EXHIBIT 4.15
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "AGREEMENT") is made and entered into as
of January 19, 2007, by and among X. Xxxxx-Food International, Ltd. ("Willi"), a
corporation incorporated under the laws of the State of Israel, WF Kosher Food
Distributors, Ltd., a Delaware corporation and wholly owned subsidiary of Willi
(the "Buyer"), Laish Israeli Food Products Ltd., a New York corporation (the
"Company"), and Xxxx Xxxxxxx, an individual ("Xxxxxxx," and together with the
Company, the "Sellers," and each individually sometimes referred to herein as a
"Seller"). Xxxxxxx is the sole shareholder of the Company.
RECITALS
1. The Company sells, markets, imports and distributes kosher food
in the USA (the "BUSINESS").
2. Buyer desires to purchase selected assets of the Company, and to
assume the Assumed Obligations (referred to in Section 1(f)) of
the Company.
3. The Sellers desire to sell such assets and to cause Buyer to
assume the Assumed Obligations of the Company.
4. Sellers conduct the Business from its warehouse and office space
("Principal Office") located at 000 Xxxxx Xx., Xxxxxxxx, Xxx Xxxx
00000. 860 Nostrand Associates, LLC ("Nostrand Associates") is
the owner of the Principal Office.
5. Buyer desires to lease the Principal Office from Nostrand
Associates in accordance with the terms and conditions of a lease
agreement ("Lease Agreement") to be entered between Buyer and
Nostrand Associates simultaneous with the Closing of this
Agreement.
Certain definitions related to this Agreement are set forth in Section 21.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, the receipt of which
the parties hereto acknowledge to each other, the parties hereby agree as
follows:
1. Sale and Purchase of Assets.
(a) On the terms and subject to the conditions of this Agreement, at the
Closing referred to in Section 6, the Sellers shall sell, convey,
assign, transfer and deliver to Buyer, and Buyer shall purchase,
acquire and accept delivery of the following assets and properties
(the "Assets"):
(i) The inventory listed on Schedule (1)(a)(i)(A) (the "Merchandise
Inventory"). The value of the Merchandise Inventory is $2,209,630
("Merchandise Inventory Value");
(ii) Trade accounts receivable listed on Schedule (1)(a)(ii) (the
"Purchased Trade Receivables"). The value of the Purchased Trade
Receivables is $1,240,374 ("Purchased Trade Receivables Value");
(iii) The fixed assets (the "Fixed Assets") of the Sellers all as set
forth on Schedule (1)(a)(iii);
(iv) The assignment of Sellers' lease arrangements for two trucks set
forth on Schedule (1)(a)(iv);
(v) The assignment of the Vendor Agreements and understandings with
suppliers and vendors, whether written or otherwise listed in
Schedule 1(a)(v);
(vi) All of Sellers' rights under any products liability insurance
policy (or similar agreement) under which Sellers are an insured,
named as an additional insured or is otherwise a beneficiary, and
all proceeds realized in connection therewith listed in Schedule
1(a)(vi);
(vii) All proprietary knowledge, Trade Secrets, Confidential
Information, computer software and licenses, formulae, designs
and drawings, quality control data, processes (whether secret or
not), methods, inventions and other similar know-how or rights
Used in the conduct of the Sellers' business;
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(viii) the Sellers' Permits and other authorizations of Governmental
Authorities (to the extent such Permits and other authorizations
of Governmental Authorities are transferable) and third parties,
licenses, telephone numbers for all locations, facsimile numbers,
website addresses, customer lists, vendor lists, referral lists
and contracts, advertising materials and data, restrictive
covenants, choses in action and similar obligations owing to the
Sellers from its present and former shareholders, officers,
employees, agents and others, together with all databases,
operating data and records (including credit records), files,
papers, records and other data of the Sellers relative to the
operation of the Sellers' business, i.e., customer records,
vendor records, etc. The Sellers shall for a period of not less
than three years make their records for transactions through the
Closing available to the Buyer on request for review and copying
(whether for the purpose of facilitating the preparation of
Securities and Exchange Commission reports for Buyer's affiliates
or otherwise), and they shall not destroy its respective records
without first offering to deliver the same to the Buyer;
(ix) all rights of the Sellers in and to the name Laish Israeli Food
Products Ltd. and any other name that incorporates the word Laish
and all variants thereof, and all other trade names, brand names,
logos, trademarks and slogans Used in its business, all variants
thereof and all goodwill associated therewith, it being
understood that Sellers shall have the rights to the corporate
name of the Company in accordance with Section 5(f);
(x) all other purchase orders, customer orders, and other rights
under contracts in the ordinary course;
(xi) all rights and all intangible assets, including but not limited
to (i) goodwill; (ii) customer agreements and contractual rights
arising out of Company's ordinary course of business and (iii)
software, information technologies, business forms, business
files, vendor information and agreements, and other intellectual
property related to the Company's business;
(xii) Zanlacol inventory in the amount of $25,000.
(b) Notwithstanding the foregoing, the following assets and properties
("Excluded Assets") are not included in the Assets:
(i) Cash;
(ii) declined trade receivables listed in Schedule 1(a)(ii) in an
amount equal to $119,605;
(iii) Any rights accruing to the Company in connection with a
litigation pending in the United States District Court for the
Eastern District of New York, entitled Laish Food Products Ltd. v
Jaffora-Tabori Ltd (Case No: 02CV1322); and
(iv) Any other assets not being purchased hereunder, including
security deposits, if any.
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(c) Any cash proceeds (inclusive of checks, money orders and credit card
transactions) or return of security of the Excluded Assets received by
the Buyer subsequent to the date of Closing shall be remitted by Buyer
to the Company (and Company shall receive such remittance on behalf of
the Sellers) within five (5) days from receipt. Conversely, any cash
proceeds (inclusive of checks, money orders and credit card
transactions) of the Assets received by the Sellers subsequent to the
date of Closing shall be remitted by the Sellers to Buyer within five
(5) days from receipt.
(d) METHOD OF CONVEYANCE. The sale, transfer, conveyance, assignment and
delivery by the Sellers of the Assets to the Buyer in accordance with
Section 1(a) hereof shall be effected on the Closing Date by the
Sellers' execution and delivery to the Buyer of a Xxxx of Sale with
respect to the Sellers' transfer the Assets in form and scope
agreeable between the parties (collectively the "CONVEYANCE
DOCUMENT"). At the Closing, good, valid and marketable title to all of
the Assets shall be transferred, conveyed, assigned and delivered by
the Company to the Buyer pursuant to the Conveyance Document, free and
clear of any and all Liens, excepting Assumed Obligations referred to
in Section 1(f), and except for the lien by HSBC Bank for aggregate
obligations of $427,402.37 included in the Assumed Trade Payables
(defined below) which shall be satisfied at Closing as evidenced by a
payoff letter in Schedule 1(d), and for which Sellers' shall instruct
HSBC Bank, in the form of the instruction letter set forth in Schedule
1(d), to release the obligations by way of a UCC-3 termination
statement.
(e) REAL ESTATE LEASE. It is specifically understood and agreed by the
parties hereto that concurrent with the signing of this Agreement,
Nostrand Associates and Buyer shall enter into a real estate lease
("Lease") pursuant to which Nostrand Associates shall lease to Buyer,
and Buyer shall lease from Nostrand Associates, the Principal Office
simultaneously with the Closing of this Agreement.
(f) ASSUMED OBLIGATIONS. At the Closing, the Buyer shall assume, and agree
to satisfy and discharge as the same shall become due (the "Assumed
Obligations"):
(i) all trade accounts payable and accrued expenses that have been
incurred in the ordinary course of the Company's business in
connection with sales of Merchandise Inventory ("Assumed Trade
Payables"); and
(ii) the Sellers' liabilities and other obligations arising subsequent
to the Closing under the truck leases listed on Schedule
1(a)(iv).
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(g) EXCLUDED LIABILITIES. Except for liabilities resulting from Buyer's
breach of representations and warranties set forth in Section 9, and
except as expressly set forth in Section 1(f), the Buyer shall not
assume or be responsible at any time for any liability, obligation,
debt or commitment of the Sellers, whether absolute or contingent,
accrued or unaccrued, asserted or unasserted, or otherwise (the
"Excluded Liabilities"). Without limiting the generality of the
foregoing, Sellers expressly acknowledge and agree that the Sellers
shall retain, and that Buyer shall not assume or otherwise be
obligated to pay, perform, defend or discharge, any liability or
obligation
(i) incident to, arising out of or incurred with respect to, this
Agreement and the transactions contemplated hereby (including any
legal or other fees and expenses, all sales, income or other
taxes arising out of the transactions contemplated hereby),
except as otherwise expressly provided for in this Agreement;
(ii) for taxes whether measured by income or otherwise incurred prior
to the Closing Date;
(iii) Any obligations incident to, arising out of or incurred with in
connection with a litigation pending in the United States
District Court for the Eastern District of New York, entitled
Laish Food Products Ltd. v Jaffora- Tabori Ltd (Case No:
02CV1322);
(iv) under any foreign, federal, state or local law, rule, regulation,
ordinance, program, Permit, or other Legal Requirement relating
to health, safety, Hazardous Materials and environmental matters
applicable to the Sellers' business and/or the facilities Used by
the Sellers (whether or not owned by the Sellers) incurred prior
to the Closing Date;
(v) pertaining to products sold or manufactured or services performed
or other actions taken or omitted by the Sellers prior to the
Closing Date; or
(vi) relating to any default by Sellers taking place before the
Closing Date under any of the Assumed Obligations to the extent
such default created or increased the liability or obligation.
(vii) Sellers shall jointly and severally agree to satisfy and
discharge the Excluded Liabilities as the same shall become due.
2. Payment for Assets
(a) As payment in full for the Assets being acquired by the Buyer
hereunder and the non-compete agreements referred to in Section 7(c)
hereof, Buyer shall pay to the Company (and Company shall receive such
payment on behalf of the Sellers) (the "Purchase Price") in the manner
set forth in this Section 2
(i) the Purchased Trade Receivables Value equal to $1,240,374,
reduced by Assumed Trade Payables equal to $853,094, for a net
Purchased Trade Receivables Value equal to $387,280; plus
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(ii) the Merchandise Inventory Value equal to $2,209,630 reduced by
Assumed Trade Payables equal to $0, for a net Merchandise
Inventory Value equal to $2,209,630, and further reduced by
$275,000 {{discount}} for a total Net Merchandise Inventory Value
equal to $1,934,630 ("Total Net Merchandise Inventory Value");
plus
(iii) US$10,000 in respect of the non-compete agreements, plus
(iv) US$990,000 in respect of all other Assets, including goodwill,
plus
(v) US$25,000 in respect of the Zanlacol inventory.
(vi) Notwithstanding any other provision in this Agreement, in the
event Xxxxxxx is terminated for Cause (as defined in his
employment agreement referred to in Section 7(c)(ii)) or Xxxxxxx
terminates his employment with Buyer for any reason or for no
reason (other than for disability and/or death), such termination
shall be considered a fundamental breach of this Agreement by
Sellers and Sellers shall have forfeited their rights to any
portion of the Purchase Price not theretofore due and paid by
Buyer to Sellers and Buyer shall have no obligation to make any
then remaining outstanding Purchase Price payments to Sellers.
Xxxxxxx may dispute his termination for Cause. In the event
Xxxxxxx prevails on the issue of Cause, then Buyer shall
forthwith remit to the Company the portion of the Purchase Price
then due, if any, together with interest accrued thereon at the
JPMorganChase prime rate to the extent any such payments were
withheld from the Company during the period of time of such
dispute.
3. The Buyer shall make payment towards the Purchase Price as follows:
(a) Buyer is hereby entitled to a US$50,000 credit against the Purchase
Price in consideration for US$50,000 received by Sellers on December
20, 2006 by way of release of US$50,000 of escrow funds ("US$50,000
Deposit") deposited by Buyer on December 17, 2006 to the Law Offices
of Xxxxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx") as escrow agent for the Buyer
and Sellers; plus
(b) On the Closing Date, Buyer shall pay to the Company (and Company shall
receive on behalf of the Sellers) by wire transfer to a single account
of the Company (Account Number: 660714345; ABA Number: 000000000;
HSBC, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000); plus
(1) US$550,000;
(2) $1,934,630 {{Total Net Merchandise Inventory Value}}; and
(3) $77,187 {{75% of the $1,240,374 Trade Receivable Value
reduced by Assumed Trade Payables equal to $853,094}};
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(4) $25,000 {{ Zanlacol inventory}}; plus
(c) Escrow Payments.
(i) On the Closing Date, Buyer shall deliver to Xxxxx & Xxxx and
Xxxxxxxxxxx, as escrow agents (the "ESCROW AGENTS") $310,094
{{$25% of the Trade Receivable Value}} (the "Escrow Amount") by
wire transfer to be held in the account of the Escrow Agents
("Escrow Account").
(ii) The Escrow Agents shall distribute the Escrow Amount in
accordance with the following:
(1) No distributions shall be made to the Sellers during the
period of time for which the outstanding Trade Receivables
Value of the Purchased Trade Receivables equals or exceeds
the sum of the Escrow Amount and US$400,000.
(2) For each dollar of collected Purchased Trade Receivables
collected by Buyer within one year from the date of invoice
of such Purchased Trade Receivables, the Escrow Agents
shall, in accordance with the terms of the Escrow Agreement,
release from the Escrow Account to the Company (and the
Company shall receive on behalf of the Sellers), dollar for
dollar collected against those Purchased Trade Receivables,
provided that the total outstanding Trade Receivables Value
of the Purchased Trade Receivables on such date is below the
sum of the Escrow Amount and US$400,000.
(3) The Escrow Agents shall in accordance with the terms of the
Escrow Agreement release to the Buyer (the "Escrow
Indemnity") an amount equal to the value of such Delinquent
Purchased Trade Receivable ("Delinquent Purchased Trade
Receivable Value"). A "Delinquent Purchased Trade
Receivable" means a Purchased Trade Receivable that remains
uncollected within one year from the date of invoice of such
Purchased Trade Receivable.
(4) The Escrow Amount shall be held and released by the Escrow
Agents pursuant to the terms and conditions of the Escrow
Agreement to be entered into by and among the Buyer, Sellers
and Escrow Agents on the Closing Date (the "ESCROW
AGREEMENT"). The Escrow Agents shall place the Escrow Amount
into an interest bearing account. A party entitled to the
Escrow Amount shall be entitled to receive the accrued
interest thereon; plus
(d) Subject to Section (3)(d) or as otherwise expressly provided for in
this Agreement, the Buyer shall make the following three payments
totaling US$400,000 ("$400,000 Payment") by wire transfer, to a single
account of the Company (and the Company shall receive on behalf of the
Sellers), as set forth herein:
(i) US$200,000 ("First Payment") no later than June 30, 2007 ("First
Payment Date");
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(ii) US$100,000 ("Second Payment") no later than December 31, 2007
("Second Payment Date"); and
(iii) US$100,000 ("Third Payment," and together with the First Payment
and the Second Payment, the "Payments" and individually, a
"Payment") no later than June 30, 2008 ("Third Payment Date," and
together with the First Payment Date, Second Payment Date and
Third Payment Date the "Payment Dates" and individually, a
"Payment Date").
(e) Payments shall be subject to the following:
(i) Sellers forfeit their rights to Payments to the extent not
theretofore paid, and Buyer shall have no obligation to make any
Payments to Sellers, if any representation and warranty in
Section 8 is false or misleading.
(ii) Sellers forfeit their rights to Payments in accordance with
Section 2(a)(v).
(iii) No Payments shall be made until the Escrow Agents shall have
distributed all amounts from the Escrow Account in accordance
with Section (3)(c)(ii).
(iv) On the date a Purchased Trade Receivable becomes a Delinquent
Purchased Trade Receivable, Buyer may offset Payments by the
Delinquent Purchased Trade Receivable Value for any such
Delinquent Purchased Trade Receivable, subject to Section
(5)(a)(ii)(3). In the event Buyer offsets Payments in accordance
with this Section, Buyer shall provide Sellers with a notice of
such offset and a copy of the Delinquent Purchased Trade
Receivable.
(v) Payments shall be made subject to Section 5(a)(ii)(3) and
payments shall only be due and payable to the extent the value of
the cumulative Payments outstanding as of any Payment Date exceed
the then outstanding uncollected Trade Receivables Value
("Payment Excess"). No Payments shall be due and payable on any
Payment Date to the extent the outstanding uncollected Trade
Receivables Value equals or exceeds the cumulative Payments
outstanding on a Payment Date ("Payment Shortfall"). To the
extent payments are not made on a Payment Date due to a Payment
Shortfall, Buyer and Seller shall on a monthly basis jointly
determine whether a Payment Shortfall or Payment Excess exists.
If Buyer and Sellers jointly determine that there is a Payment
Excess on such determination date, then Buyer shall promptly make
payments to the Company in the amount equal to such Payment
Excess.
(f) The Purchase Price shall be allocated, apportioned and adjusted in the
manner specified in IRS Form 8594 attached as Schedule 3(e) and the
parties agree to abide by such allocations for all tax reporting
purposes.
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4. Bank Guaranty. The $400,000 Payment will be guaranteed by a bank guaranty
("Bank Guaranty"). Payments under the Bank Guaranty shall be subject to
Section (3)(d) or as otherwise expressly provided for in this Agreement. No
Payments shall be made under the Bank Guaranty in the event Xxxxxxx is
terminated for Cause (as defined in his Employment Agreement referred to in
Section 7(c)(ii)). The terms and conditions of the Bank Guaranty shall be
governed by the Bank Guaranty dated the date hereof and attached as Exhibit
(4) to this Agreement.
5. Certain Other Agreements:
(a) Purchased Trade Receivables.
(i) Buyer's Agreements:
(1) Until the full collection of the Purchased Trade
Receivables, Buyer shall provide the Company on the 15th and
30th of each month from the date of the Closing a list of
all Purchased Trade Receivable collections and will provide
the Company on the 30th of each month an aged accounts
receivable.
(2) Buyer may issue credits or discounts to any customer,
provided, however, that any credit or discount applied to a
Purchased Trade Receivable of a customer (or any outstanding
portion thereof) will be deemed to be a payment (or partial
payment, as applicable) of such Purchased Trade Receivable.
(3) Buyer may sell cash on delivery ("COD") to any customer that
has an outstanding trade balance due to Buyer under a
Purchased Trade Receivable without Buyer being required to
apply such COD payment towards any outstanding Purchased
Trade Receivable held by the Buyer as against such customer,
but only so long as the balance of any such Purchased Trade
Receivable is not outstanding more than 90 days from the
Closing Date.
(4) Buyer may sell COD to any customer that has an outstanding
trade balance due to Buyer under a Purchased Trade
Receivable but Buyer shall apply such COD payment towards
the payment of the balance of any outstanding Purchased
Trade Receivable that is outstanding more than 90 days from
the Closing Date.
(5) Buyer shall not sell on credit to any customer who has an
outstanding Purchased Trade Receivable that is outstanding
more than 90 days from the Closing Date until the Purchased
Trade Receivables held by the Buyer as against such customer
shall not be outstanding more than 90 days from the Closing
Date.
(6) Buyer may sell on credit to any customer who has an
outstanding Purchased Trade Receivable that is not
outstanding more than 90 days from the Closing Date,
provided that any credit payments made by such customer
shall first be applied to the payment of any outstanding
Purchased Trade Receivable.
(7) Buyer shall use its best efforts to collect the Purchased
Trade Receivables.
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(ii) Sellers' Agreements.
(1) Sellers shall assist and use its best efforts to collect the
Purchased Trade Receivables
(2) Sellers guaranty the full payment of the Purchased Trade
Receivables to Buyer provided that Buyer shall have complied
with its obligations set forth in Sections 5(a)(i)(2)-(7).
(3) Buyer shall have the right to recover the value of any
Delinquent Purchased Trade Receivable in accordance with the
following:
(a) First, Buyer shall be entitled to the Escrow Indemnity
in accordance with Section 3(b)(ii);
(b) Second, after the time when all Escrow Amounts shall
have been distributed in accordance with Section
(3)(b)(ii), Payments shall forthwith be offset by the
Delinquent Purchased Trade Receivable Value for any
Delinquent Purchased Trade Receivable ("Payment
Indemnity") in accordance with Section (3)(d);
(c) Third, after the time when all Payments shall have been
distributed and offset, or both, in accordance with
Section 3, Sellers shall, upon the submission by Buyer
to either Seller of a Delinquent Purchased Trade
Receivable, forthwith jointly and severally fully
indemnify and reimburse Buyer ("Sellers' Delinquent
Purchased Trade Receivable Indemnity") for the
Delinquent Purchased Trade Receivable Value for such
Delinquent Purchased Trade Receivable. Sellers'
indemnity obligation under this subsection is
conditional on Buyer's fulfillment of its obligations
under Sections 5(a)(i)(2)-(7).
(b) Assumed Obligations
(i) Buyer's Agreements. Buyer shall promptly pay the Assumed
Obligations as they become due and payable and shall indemnify
Sellers in the event such Assumed Obligations are not made timely
and Sellers suffer direct damages, including reasonable court
expenses and legal fees, as a result of such untimely payments.
Willi guaranties the payment of the Assumed Trade Payables.
(ii) Sellers' Agreements. In the event of the assertion or
commencement by any person of any demand, claim or legal
proceeding against Sellers with respect to an Assumed Trade
Payable Sellers shall immediately notify Willi and Buyer of such
assertion or commencement of any demand, claim or legal
proceeding, and Willi and Buyer shall have the right, at their
election, to proceed on behalf of Sellers with the defense of
such demand, claim or legal proceeding on their own.
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(c) Delinquent Purchased Trade Receivable. Any Delinquent Purchased Trade
Receivable for which Buyer received a set-off in accordance with
Sections 3(b)(3), 3(d) and 5(a)(ii)(3) shall revert back to the
Sellers and the Sellers may at its discretion pursue the collection of
such reverted Delinquent Purchased Trade Receivable for its own
benefit.
(d) Suppliers. Sellers agree to introduce the Company's suppliers to the
Buyer. Xxxxxxx shall accompany Buyer's representatives in face-to-face
meetings with the Company's suppliers, including but not limited to,
face-to-face meetings with the Company's suppliers located in Israel.
Expenses incurred by Sellers in furtherance of compliance with this
Section shall be borne solely by Buyer.
(e) Employees.
(i) Willi or the Buyer shall have, at its sole discretion, the right
to employ the Company's employees.
(ii) For the avoidance of doubt, the Sellers shall jointly and
severally bear all costs and expenses (including, but not limited
to, inter alia, salary, social and pension rights and
compensation, retirement compensation plans), regarding the
employment (and the termination thereof), of such employees
during the period prior to the employment of such employees by
the Willi or the Buyer, and neither Willi nor the Buyer
undertakes to repay or reimburse the Sellers or any such employee
for such costs and expenses.
(f) Corporate Name.
(i) Each Seller hereby represents, warrants and covenants to the
Buyer that the corporate name of the Company is as set forth on
the signature page hereof and further agrees and acknowledges
that such name is included with the Assets and that the exclusive
right to use such name will be transferred to the Buyer on the
Closing Date.
(ii) Buyer hereby agrees to allow Sellers to use the corporate name of
the Company solely for the purposes of winding down the business
of the Company and for allowing Sellers to cash checks made out
to the order of Laish Israeli Food Products Ltd. for products
sold by Sellers prior to the Closing Date hereof. Sellers shall,
at the later of such time as Buyer and Sellers shall jointly
conclude that corporate name of the Company is no longer needed
and the third anniversary of the Closing Date hereof, cause the
filing of an appropriate amendment to the Company's Certificate
of Incorporation changing its name to a name which is in no way
similar to the corporate name set forth on the signature page
hereof and shall furnish such written consents and assignments as
the Buyer shall hereafter reasonably request in connection with
such name change.
(iii) Buyer agrees not to use the corporate name "Laish Israeli Food
Products Ltd." during the period of time that the Bank Guaranty
referred to in Section 4 shall remain in effect.
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(iv) For purposes of clarification, Buyer agrees that, notwithstanding
anything to the contrary in Section 1(ix) and Section 5(f), Xxxxx
Xxxxxxx owns, and shall continue to own after the Closing Date,
the right to the name "Laish Dairy Ltd." and may continue to use
such name after the Closing Date.
(g) Pro-Rating. The parties agree to make an adjustment after the Closing
to account for such events as expenses a party may pay on account of
the other party for bills that crossed their respective periods of
operation (e.g., telephone and other utility bills). The parties shall
pay their allocable portion within 5 days of receipt of amounts due.
(h) Sellers agree to produce and deliver to Buyer all invoices relating to
the Assumed Trade Payables and Merchandise Inventory upon request by
Buyer.
(i) Sellers agree that the amount set forth on any invoice in connection
with the Assumed Trade Payables or otherwise owing by Sellers reflects
the complete and accurate record paid by Sellers in connection with
such invoice.
6. Closing.
(a) The Closing of this transaction will take place at the office of Xxxxx
& Hill, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, X.X. 00000, at 10:00
a.m., or at such other place and time mutually agreed upon among the
parties, on or before January 31, 2007, but if there is a force
majeure impediment to closing on that day, the term means the first
business day thereafter on which there is no such impediment to
Closing, at which time the Buyer will pay the Purchase Price to the
Company.
(b) The day on which the Closing actually takes place is herein sometimes
referred to as the Closing Date.
7. OTHER TRANSACTIONS AT CLOSING; FURTHER ASSURANCES.
(a) At the Closing, the Sellers will deliver to Buyer:
(i) the Conveyance Document;
(ii) Releases of all Liens on any of the Assets other than for Liens
relating to each of the truck leases assumed by Buyer, each as
set forth on Schedule 1(f)(ii), except for the lien by HSBC Bank
for aggregate obligations of $427,402.37 included in the Assumed
Trade Payables (defined below) which shall be satisfied at
Closing as evidenced by a payoff letter in Schedule 1(d), and for
which Sellers' shall instruct HSBC Bank, in the form of the
instruction letter set forth in Schedule 1(d), to release the
obligations by way of a UCC-3 termination statement;
(iii) copies of the certificate of incorporation of each of the
Company;
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(iv) a certificate from the Secretary of State of the State of New
York as to the good standing of the Company as of a recent date;
(v) copies of the bylaws of the Company;
(vi) all consents from shareholders, lenders and other third parties
as are required to consummate the sale of the Assets as set forth
in Schedule 7(vi);
(vii) all consents from shareholders, lenders and other third parties
as are required to consummate the assignment of all contracts;
(viii) a copy of the resolutions of the Board of Directors of the
Company, together with any and all required resolutions or
consents of the shareholders thereof, approving the execution and
delivery of this Agreement and the consummation of all of the
transactions contemplated hereby; and
(ix) all documents required to be delivered to Buyer under the
provisions of this Agreement or as may reasonably by requested by
Buyer and its counsel.
(b) On the Closing Date, Buyer shall deliver or cause to be delivered to
the Company, and the Company shall receive on behalf of the Sellers,
the following:
(i) payment of the Purchase Price in accordance with terms and
conditions of this Agreement;
(ii) a copy of the resolutions of the Board of Directors of Buyer,
together with any and all required resolutions or consents of
each of the shareholders thereof, approving the execution and
delivery of this Agreement and the consummation of all of the
transactions contemplated hereby;
(iii) such other documents as may be required pursuant to this
Agreement or as may reasonably be requested by the Company and
their counsel.
(c) At the Closing:
(i) Buyer and Nostrand Associates shall execute and deliver the Lease
Agreement.
(ii) Buyer and Xxxxxxx shall execute and deliver an employment
agreement ("Employment Agreement");
(iii) The non-competition agreement signed by Sellers on December 22,
2006 is incorporated herein and shall be effective as of the
Closing Date;
(iv) The non-competition agreement signed by Xxxxx Xxxxxxx on December
22, 2006 is incorporated herein and shall be effective as of the
Closing Date.
- 13 -
8. The Sellers hereby jointly and severally represent and warrant to Buyer
that:
(a) Corporate Existence, etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of New York; it
has all requisite corporate power and authority and is entitled to
carry on its business as now being conducted and to own, lease or
operate its properties as and in the places where such business is now
conducted and such properties are now owned, leased or operated.
(b) Authority, Approval and Enforceability. This Agreement has been duly
executed and delivered by each Seller, and the Sellers have all
requisite power and legal capacity to execute and deliver this
Agreement and all Collateral Agreements executed and delivered or to
be executed and delivered in connection with the transactions provided
for hereby, to consummate the transactions contemplated hereby and by
the Collateral Agreements, and to perform its obligations hereunder
and under the Collateral Agreements. This Agreement and each
Collateral Agreement to which each Seller is a party constitutes, or
upon execution and delivery will constitute, the legal, valid and
binding obligation of such party, enforceable in accordance with its
terms, except as such enforcement may be limited by general equitable
principles or by applicable bankruptcy, insolvency, moratorium, or
similar laws and judicial decisions from time to time in effect which
affect creditors' rights generally.
(c) Capitalization and Corporate Records.
(i) All issued and outstanding shares of the Company capital stock
are owned beneficially and of record by Xxxxxxx.
(ii) The copies of the Certificate of Incorporation and Bylaws of the
Company provided to Buyer are true, accurate, and complete and
reflect all amendments made through the date of this Agreement.
(d) Taxes. All taxes, including, without limitation, income, property,
sales, use, franchise, added value, employees' income withholding and
social security taxes, imposed by the United States or by any foreign
country or by any state, municipality, subdivision or instrumentality
of the United States or of any foreign country, or by any other taxing
authority, which are due or payable by the Company, and all interest
and penalties thereon, whether disputed or not, have either been paid
in full or are not due or payable on the Closing Date, all tax returns
required to be filed in connection therewith have been accurately
prepared and duly and timely filed and all deposits required by law to
be made by the Company with respect to employees' withholding have
been duly made. The Company has not been delinquent in the payment of
any foreign or domestic tax, assessment or governmental charge or
deposit and have no tax deficiency or claim outstanding, proposed or
assessed against it, and there is no basis for any such deficiency or
claim. The Company's federal income tax returns have never been
audited by the Internal Revenue Service for all of its fiscal years
through the year ended 2006, there is not now in force any extension
of time with respect to the date on which any tax return was or is due
to be filed by or with respect to the Company, or any waiver or
agreement by it for the extension of time for the assessment of any
tax.
- 14 -
(e) The Company's capital stock issued and outstanding as of the date
hereof shall constitute all of the outstanding shares of capital stock
of Sellers as of the Closing Date. Xxxxxxx is the sole shareholder of
the Company as of the date hereof. Other than the Company's capital
stock owned by Xxxxxxx, the Company has not issued any other capital
stock or other security instruments and are not committed or obligated
to do so in the future. There are no outstanding subscriptions,
options, warrants, calls, contracts, demands, commitments, convertible
securities or other agreements or arrangements of any character or
nature whatever under which the Sellers, are or may become obligated
to issue, assign or transfer, and there are no rights of first
refusal, preemptive rights or similar rights with respect to any such
shares.
(f) No Defaults or Consents. The execution and delivery of this Agreement
and the Collateral Agreements by Xxxxxxx and the performance by
Xxxxxxx of his respective obligations hereunder and thereunder will
not violate or conflict with any provision of law or any judgment,
award or decree or any indenture, agreement or other instrument to
which Xxxxxxx is a party, or by which the properties or assets of
Xxxxxxx or his Affiliates are bound or affected, or conflict with,
result in a breach of or constitute (with due notice or lapse of time
or both) a default under, any such indenture, agreement or other
instrument, in each case except to the extent that such violation,
default or breach could not reasonably be expected to delay or
otherwise significantly impair the ability of the parties to
consummate the transactions contemplated hereby.
(g) No Company Defaults or Consents
(i) Neither the execution and delivery of this Agreement nor the
carrying out of any of the transactions contemplated hereby will:
(1) violate or conflict with any of the terms, conditions or
provisions of the Company's Certificate of Incorporation or
bylaws ;
(2) violate any Legal Requirements applicable to the Company or
its Affiliates;
(3) violate, conflict with, result in a breach of, constitute a
default under (whether with or without notice or the lapse
of time or both), or accelerate or permit the acceleration
of the performance required by, or give any other party the
right to terminate, any Contract or Permit binding upon or
applicable to the Company or its Affiliates;
(4) result in the creation of any lien, charge or other
encumbrance on any properties of the Company or its
Affiliates; or
(5) require the Sellers or its Affiliates to obtain or make any
waiver, consent, action, approval or authorization of, or
registration, declaration, notice or filing with, any
private non-governmental third party or any Governmental
Authority.
- 15 -
(h) No Proceedings. No suit, action or other proceeding is pending or, to
the Knowledge (as defined below) of the Sellers, threatened before any
Governmental Authority seeking to restrain the Sellers or prohibit
their entry into this Agreement or prohibit the Closing, or seeking
damages against the Sellers or the properties as a result of the
consummation of this Agreement or any Collateral Agreement. The term
"Knowledge" shall mean the actual knowledge of Sellers, or any of the
other directors, officers or managerial personnel of the Sellers with
respect to the matter in question, and such knowledge as Sellers or
any of the other directors, officers or managerial personnel of the
Sellers reasonably should have obtained (i) in the performance of
their duties to the Sellers and/or (ii) upon diligent investigation
and inquiry into the matter in question.
(i) Liabilities; Accounts Receivable; Inventories
(i) Except for trade payables and accrued expenses incurred since
January 1, 2007 in the ordinary course of business, none of which
are material, and except for the liabilities set forth in
Schedule 8(i)(i) attached hereto, the Sellers have no material
liabilities or obligations (whether accrued, absolute,
contingent, known, unknown or otherwise).
(ii) Schedule 8(i)(ii) lists all trade accounts payable and accrued
expenses.
(iii) Schedule 1(a)(iii) lists all trade accounts receivables.
(iv) The Purchased Trade Receivables arose from bona fide transactions
in the ordinary course of business, and the goods and services
involved have been sold, delivered and performed to the account
obligors, and no further filings (with Governmental Authorities,
insurers or others) are required to be made, no further goods are
required to be provided and no further services are required to
be rendered in order to complete the sales and fully render the
services and to entitle the Company to collect the Purchased
Trade Receivables in full. No such Purchased Trade Receivable has
been assigned or pledged to any other person, firm or
corporation, and no defense or set-off to any such account has
been asserted by the account obligor or exists..
(v) Schedule (1)(a)(i)(A) sets forth the Merchandise Inventory
purchased by Buyer.
(j) The Company's sales turnover for fiscal year ended 2006 shall not have
been less than US$7,200,000.
(k) Nostrand Associates has legal and beneficial ownership of the
Principal Office, and has all requisite power and legal capacity to
execute and deliver the Lease Agreement and to perform its obligations
under such Lease Agreement. The Lease Agreement upon execution and
delivery will constitute, the legal, valid and binding obligation of
Nostrand Associates, enforceable in accordance with its terms, except
as such enforcement may be limited by general equitable principles or
by applicable bankruptcy, insolvency, moratorium, or similar laws and
judicial decisions from time to time in effect which affect creditors'
rights generally.
- 16 -
(l) Xxxxxxx is the sole managing member of Nostrand Associates and has the
sole power to cause Nostrand Associates to enter in the Lease
Agreement and does not require the consent, approval, or act of, or
the making of any filings with, any Person.
(m) Absence of Certain Changes
(i) Since December 14, 2006, there has not been:
(1) any event, circumstance or change that had or might have a
material adverse effect on the Business, Assets, operations,
prospects, properties, financial condition or working
capital of the Sellers;
(2) any damage, destruction or loss (whether or not covered by
insurance) that had or might have a material adverse effect
on the Business, Assets, operations, prospects, Properties
or financial condition of the Sellers; or
(3) any material adverse change in the Sellers' vendor or
supplier relations or in Sellers' sales patterns, pricing
policies, accounts receivable or accounts payable.
(4) any material adverse change in the Sellers' customer
relations or in Sellers' customer sales patterns, pricing
policies, accounts receivable or accounts payable.
(ii) Since December 14, 2006, each Seller has not done any of the
following:
(1) created, incurred, assumed, guaranteed or otherwise become
liable or obligated with respect to any indebtedness, or
made any loan or advance to, or any investment in, any
person, except in each case in the ordinary course of
business and as set forth on Schedule 8(m)(ii), except that
Sellers personally guaranteed payables to L&S, in writing,
and other vendors orally;
(2) made any payment to any Affiliate or forgiven any
indebtedness due or owing from any Affiliate to the Company;
(3) (A) liquidated inventory or accepted product returns other
than in the ordinary course, (B) accelerated receivables,
(C) delayed payables, or (D) changed in any material respect
the Company's practices in connection with the payment of
payables or the collection of receivables;
(4) engaged in any one or more activities or transactions with
an Affiliate or outside the ordinary course of business; or
(5) committed to do any of the foregoing.
- 17 -
(n) Compliance with Laws. Sellers are and have been in compliance in all
respects with any and all Legal Requirements applicable to Sellers,
other than failures to so comply that would not have an adverse effect
on the business, operations, prospects, properties or financial
condition of Sellers. Sellers (i) have not received or entered into
any citations, complaints, consent orders, compliance schedules, or
other similar enforcement orders or received any written notice from
any Governmental Authority or any other written notice that would
indicate that there is not currently compliance with all such Legal
Requirements, except for failures to so comply that would not have an
adverse effect on the business, operations, prospects, properties or
financial condition of Sellers, and (ii) are not in default under, and
no condition exists (whether covered by insurance or not) that with or
without notice or lapse of time or both would constitute a default
under, or breach or violation of, any Legal Requirement or Permit
applicable to Sellers.
(o) Litigation. Except as otherwise set forth in Schedule 8(o), there are
no claims, actions, suits, investigations or proceedings against each
Seller pending or, to the Knowledge of such Seller, threatened in any
court or before or by any Governmental Authority, or before any
arbitrator, that might have an adverse effect (whether covered by
insurance or not) on the business, operations, prospects, Properties
or financial condition of such Seller or on their ability to
consummate the transactions contemplated hereby, and there is no basis
for any such claim, action, suit, investigation or proceeding.
Schedule 8(o) also includes a true and correct listing of all material
actions, suits, investigations, claims or proceedings that were
pending, settled or adjudicated since January 1, 2005.
(p) Insurance. Schedule 1(a)(vi) hereto is a complete and correct list of
all product liability insurance policies presently in effect that
relate to the Company, including the amounts of such insurance and
annual premiums with respect thereto, all of which have been in full
force and effect from and after the date(s) set forth on Schedule
1(a)(vi).
(q) Permits; Environmental Matters. Schedule 8(r) contains a true and
complete list of all Permits Used by each Seller in the conduct of the
Business, setting forth the grantor, grantee, the function and the
expiration and renewal date of each. Prior to the execution of this
Agreement, each Seller has delivered to the Buyer true and complete
copies of all such Permits. Except as otherwise set forth in Schedule
8(r), each Seller has all Permits necessary for such Seller to own,
operate, use and maintain its properties and to conduct its business
and operations as presently conducted and as expected to be conducted
in the future.
(r) Suppliers and Customers
(i) The Company has been granted rights for marketing, distributing
and selling products that the Company purchased from the
Company's vendors. Schedule 8(r) sets forth (i) the suppliers and
vendors of the Sellers collectively during each of the year ended
December 31, 2006, and a specification with regard to exclusivity
or non exclusive rights granted by Sellers by such suppliers and
vendors, together with a list of the products purchased,
including purchase prices and quantities purchased from the
suppliers and vendors, and a copy of all of the Sellers
agreements with any suppliers and vendors ("Vendor Agreements");
(ii) the customers of the Company during each of the fiscal year
ended December 31, 2006, together with the dollar amount of goods
and/or services sold by the Company to each such customer during
each such period as well as a specification as to the due date of
each of the accounts receivable from such customer; and (iii) a
list of the Company's agents. Each Seller maintains good
relations with all suppliers and customers listed or required to
be listed in Schedule 8(r) as well as with governments, partners,
financing sources and other parties with whom such Seller has
significant relations, and no such party has canceled, terminated
or made any threat to the such Seller to cancel or otherwise
terminate its relationship with the such Seller or to materially
decrease its services or supplies to such Seller or its direct or
indirect purchase or usage of the products of such Seller.
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(ii) All Vendor Agreements shall be assignable to Buyer and shall be
assigned by Sellers to Buyer at the Closing.
(iii) Sellers shall introduce the Company's suppliers and vendors to
the Buyer and shall use their best efforts to assure that the
suppliers and vendors continue the business relationship it had
with the Company prior to the Closing with the Buyer.
(s) Employees. To the Company's best knowledge, except for persons listed
on Schedule 8(t), no Company employee is obligated under any contract
or agreement, or subject to any judgment, decree or order of any court
or other Governmental authority that would conflict with such
employee's obligation to use his best efforts to promote the interests
of Willi or Buyer or would conflict with Willi or Buyer's conduct of
business, as contemplated hereunder. To the best knowledge of the
Company, no Company employee is in violation of any term or any
employment contract, non-competition agreement, or any other contract
or agreement relating to the relationship of any such employee with
the Company, or Company Affiliate or any previous employer. A list of
the Company's employees, as well as a copy of all of the Company's
agreements with such employees, is set forth on Schedule 8(t).
(t) Salesman Contracts. Schedule 8(u) lists all of the Company's salesman
contracts.
(u) Absence of Certain Business Practices. Neither the Sellers nor any
other Affiliate or agent of the Sellers, or any other person acting on
behalf of or associated with the Sellers, acting alone or together,
have directly or indirectly given or agreed to give any money, gift or
similar benefit to any customer, supplier, employee or agent of any
customer or supplier, any official or employee of any government
(domestic or foreign), or any political party or candidate for office
(domestic or foreign), or other person who was, is or may be in a
position to help or hinder the business of the Sellers (or assist the
Sellers in connection with any actual or proposed transaction), in
each case which (i) may subject the Sellers to any damage or penalty
in any civil, criminal or governmental litigation or proceeding, (ii)
if not given in the past, may have had an adverse effect on the
assets, business, operations or prospects of the Sellers, or (iii) if
not continued in the future, may adversely affect the assets,
business, operations or prospects of the Sellers.
- 19 -
(v) Products, Services and Authorizations
(i) To Sellers' Knowledge, each product distributed by the Company
has been distributed in accordance with the provisions of all
applicable laws, policies, guidelines and any other governmental
requirements.
(ii) There are no claims existing or threatened under or pursuant to
any warranty, whether express or implied, on products sold by
each Seller. There are no claims existing and there is no basis
for any claim against the Sellers for injury to persons, animals
or property as a result of the sale or distribution of any
product by the Sellers, including, but not limited to, claims
arising out of the defective or unsafe nature of its products.
Each Seller has full and adequate insurance coverage for products
liability claims against it.
(iii) Set forth on Schedule 8(v)(iii) is a list of all
authorizations, consents, approvals, franchises, licenses and
permits required by any Person (other than a Governmental
Authority) for the operation of the business of the Sellers as
presently operated (the "Other Person Authorizations"). All of
the Other Person Authorizations have been duly issued or obtained
and are in full force and effect, and each Seller is in
compliance with the terms of all the Other Person Authorizations.
The Sellers have no knowledge of any facts which could be
expected to cause them to believe that the Other Person
Authorizations will not be renewed by the appropriate Person in
the ordinary course. Each of the Other Person Authorizations may
be assigned and transferred to the Buyer in accordance with this
Agreement and each will continue in full force and effect
thereafter, in each case without (i) the occurrence of any
breach, default or forfeiture of rights thereunder, or (ii) the
consent, approval, or act of, or the making of any filings with,
any Person.
(w) Other Information. The information furnished by Sellers to Buyer
pursuant to this Agreement (including, without limitation, information
contained in the exhibits hereto, the Schedules identified herein, the
instruments referred to in such Schedules and the certificates and
other documents to be executed or delivered pursuant hereto by the
Shareholders and/or the Sellers at or prior to the Closing) is not,
nor at the Closing will be, false or misleading in any material
respect, or contains, or at the Closing will contain, any misstatement
of material fact, or omits, or at the Closing will omit, to state any
material fact required to be stated in order to make the statements
therein not misleading. Notwithstanding the foregoing, Sellers do no
make any representation or warranty in connection with the Merchandise
Inventory including Schedule 1(a)(i)(A).
- 20 -
(x) The Company has good and marketable title to all of the Assets,
whether real, personal, tangible or intangible except those leased or
financed as listed in Schedule 1(d), and except for the lien by HSBC
Bank for aggregate obligations of $427,402.37 included in the Assumed
Trade Payables (defined below) which shall be satisfied at Closing as
evidenced by a payoff letter in Schedule 1(d), and for which Sellers'
shall instruct HSBC Bank, in the form of the instruction letter set
forth in Schedule 1(d), to release the obligations by way of a UCC-3
termination statement. The Assets, except those listed in Schedule
1(d), are free and clear of restrictions or assignment and free and
clear of mortgages, Liens, pledges, encumbrances, claims, conditions
or restrictions. Any liens or encumbrances on Assets that may exist
prior to Closing will be satisfied, released or discharged at Closing,
except as provided in this Section and except those listed in Schedule
1(d). Any UCC liens on Assets will be terminated at Closing except
those listed in Schedule 1(d).
9. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to the Company that:
(a) Existence and Qualification. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
(b) Authority, Approval and Enforceability of Buyer. This Agreement has
been duly executed and delivered by Buyer and Buyer has all requisite
company power and legal capacity to execute and deliver this Agreement
and all Collateral Agreements executed and delivered or to be executed
and delivered by Buyer in connection with the transactions provided
for hereby, to consummate the transactions contemplated hereby and by
the Collateral Agreements, and to perform its obligations hereunder
and under the Collateral Agreements. The execution and delivery of
this Agreement and the Collateral Agreements and the performance of
the transactions contemplated hereby and thereby have been duly and
validly authorized and approved by all company action necessary on
behalf of Buyer. This Agreement and each Collateral Agreement to which
Buyer is a party constitutes, or upon execution and delivery will
constitute, the legal, valid and binding obligation of Buyer,
enforceable in accordance with its terms, except as such enforcement
may be limited by general equitable principles or by applicable
bankruptcy, insolvency, moratorium, or similar laws and judicial
decisions from time to time in effect which affect creditors' rights
generally.
(c) Authority, Approval and Enforceability of Willi. This Agreement has
been duly executed and delivered by Willi and Willi has all requisite
company power and legal capacity to execute and deliver this Agreement
executed and delivered in connection with the transactions provided
for hereby, to consummate the transactions contemplated hereby, and to
perform its obligations hereunder. The execution and delivery of this
Agreement, the performance of the transactions contemplated hereby
have been duly and validly authorized and approved by all company
action necessary on behalf of Willi. This Agreement to which Willi is
a party constitutes, or upon execution and delivery will constitute,
the legal, valid and binding obligation of Willi, enforceable in
accordance with its terms, except as such enforcement may be limited
by general equitable principles or by applicable bankruptcy,
insolvency, moratorium, or similar laws and judicial decisions from
time to time in effect which affect creditors' rights generally.
- 21 -
(i) No Default or Consents
(1) Neither the execution and delivery of this Agreement nor the
carrying out of the transactions contemplated hereby will:
(a) violate or conflict with any of the terms, conditions
or provisions of Buyer's Certificate of Incorporation
or by-laws;
(b) violate any Legal Requirements applicable to Buyer;
(c) violate, conflict with, result in a breach of,
constitute a default under (whether with or without
notice or the lapse of time or both), or accelerate or
permit the acceleration of the performance required by,
or give any other party the right to terminate, any
contract or Permit applicable to Buyer; or
(d) result in the creation of any lien, charge or other
encumbrance on any property of Buyer.
(d) No Proceedings. No suit, action or other proceeding is pending or, to
Buyer's knowledge, threatened before any Governmental Authority
seeking to restrain Buyer or prohibit its entry into this Agreement or
prohibit the Closing, or seeking Damages against Buyer or its
properties as a result of the consummation of this Agreement.
10. CONDITIONS TO SELLERS' AND BUYER'S OBLIGATIONS
(a) Conditions to Obligations of the Sellers. The obligations of the
Sellers to carry out the transactions contemplated by this Agreement
are subject, at the option of the Sellers to the commercially
reasonable satisfaction, or waiver by the Sellers, of the following
conditions:
(i) Buyer shall have furnished the Sellers with a copy of all
necessary company action on its behalf to approve its execution,
delivery and performance of this Agreement.
(ii) All representations and warranties of Buyer contained in this
Agreement shall be true and correct, and Buyer shall have
performed and satisfied in all material respects all covenants
and agreements required by this Agreement to be performed and
satisfied by Buyer at or prior to the Closing.
(iii) As of the Closing Date, no suit, action or other proceeding
(excluding any such matter initiated by or on behalf of the
Sellers or any Shareholder) shall be pending, or to the Knowledge
of Sellers, threatened before any Governmental Authority seeking
to restrain the Sellers or prohibit the Closing or seeking
Damages against the Sellers as a result of the consummation of
this Agreement.
(iv) Buyer shall have executed the Employment Agreement with Xxxxxxx
simultaneous with the Closing of this Agreement.
- 22 -
(v) Buyer shall have executed the Lease Agreement with Nostrand
Associates simultaneous with the Closing of this Agreement.
(b) Conditions to Obligations of Buyer. The obligations of Buyer to carry
out the transactions contemplated by this Agreement are subject, at
the option of Buyer, to the commercially reasonable satisfaction, or
waiver by Buyer, of the following conditions:
(i) All representations and warranties of the Sellers contained in
this Agreement shall be true and correct, and the Sellers shall
have performed and satisfied all agreements and covenants
required by this Agreement to be performed and satisfied by them
at or prior to the Closing.
(ii) As of the Closing Date, no suit, action or other proceeding
(excluding any such matter initiated by or on behalf of Buyer)
shall be pending or threatened before any court or governmental
agency seeking to restrain Buyer or prohibit the Closing.
(iii) The Sellers shall have furnished Buyer with a copy of all
necessary corporate action on its behalf approving the Sellers'
execution, delivery and performance of this Agreement.
(iv) Buyer shall have received written evidence, in form and substance
satisfactory to Buyer, of the consent to the transactions
contemplated by this Agreement of all governmental,
quasi-governmental and private third parties (including, without
limitation, persons or other entities leasing real or personal
property to the Company) where the absence of any such consent
would result in a violation of law or a breach or default under
any agreement to which the Company is subject. In the event of a
breach by Sellers of this Section 10(iv), Sellers shall be
entitled to cure such breach within 30 days of receipt of notice
given by Buyer of such breach.
(v) No proceeding in which any of the Sellers shall be a debtor,
defendant or party seeking an order for its own relief or
reorganization shall have been brought or be pending by or
against such person under any United States, state or foreign
bankruptcy or insolvency law.
(vi) Xxxxxxx shall execute and deliver his Employment Agreement
simultaneous with the Closing of this Agreement.
(vii) Nostrand Associates shall execute and deliver the Lease
Agreement simultaneous with the Closing of this Agreement.
11. POST-CLOSING OBLIGATIONS. Further Assurances
(a) Publicity. None of the parties hereto shall issue or make, or cause to
have issued or made, any public release or announcement concerning
this Agreement or the transactions contemplated hereby, without the
advance approval in writing of the form and substance thereof by each
of the other parties, except as required by law (in which case, so far
as possible, there shall be consultation among the parties prior to
such announcement), and the parties shall endeavor jointly to agree on
the text of any announcement or circular so approved or required.
- 23 -
(b) Post-Closing Indemnity
(i) The Sellers shall jointly and severally indemnify and hold
harmless Buyer from and against any and all damages arising out
of, resulting from or in any way related to (i) a breach of or
the failure to perform or satisfy any of the representations,
warranties, covenants and agreements made by each Seller in this
Agreement or in any document or certificate delivered by the
Sellers at the Closing pursuant hereto, (ii) the occurrence of
any event on or prior to the date of Closing that is (or would
be, but for any deductible thereunder) covered by individual
policies of insurance, blanket insurance policies or self
insurance programs maintained by the Sellers, (iii) the Excluded
Assets, (iv) the existence of any liabilities or obligations of
the Sellers (whether accrued, absolute, contingent, known or
unknown, or otherwise, and whether or not of a nature appropriate
for inclusion in a balance sheet in accordance with generally
accepted accounting principles) other than the Assumed
Obligations or (v) any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs, and expenses,
including, without limitation, legal fees and expenses, incident
to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof,
or in enforcing this indemnity.
(ii) In the event that Buyer is entitled to indemnification hereunder
in any amount Sellers shall jointly and severally pay such
indemnification amounts to Buyer forthwith.
(iii) The Buyer shall indemnify and hold harmless Sellers from and
against any and all damages arising out of, resulting from or in
any way related to a breach of or the failure to perform or
satisfy any of the representations, warranties, covenants and
agreements made by Buyer in this Agreement or in any document or
certificate delivered by the Buyer at the Closing pursuant
hereto, or any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including,
without limitation, legal fees and expenses, incident to any of
the foregoing or incurred in investigating or attempting to avoid
the same or to oppose the imposition thereof, or in enforcing
this indemnity..
(iv) Willi guaranties the payment of the Assumed Trade Payables and
shall indemnify and hold harmless Sellers from and against any
Assumed Trade Payables not paid by Buyer .
(v) In the event that Sellers are entitled to indemnification
hereunder in any amount Buyer shall jointly and severally pay
such indemnification amounts to the Company (and Company shall
receive such payment on behalf of the Sellers) forthwith.
- 24 -
(vi) If any claim or demand for which an Indemnifying Party would be
liable to an Indemnified Party is asserted against or sought to
be collected from the Indemnified Party by a third party,
Indemnified Party shall with reasonable promptness notify in
writing the Indemnifying Party of such claim or demand stating
with reasonable specificity the circumstances of the Indemnified
Party's claim for indemnification; provided, however, that any
failure to give such notice will not waive any rights of the
Indemnified Party except to the extent the rights of the
Indemnifying Party are actually prejudiced. After receipt by the
Indemnifying Party of such notice, then upon reasonable notice
from the Indemnifying Party to the Indemnified Party, or upon the
request of the Indemnified Party, the Indemnifying Party shall
defend, manage and conduct any proceedings, negotiations or
communications involving any claimant whose claim is the subject
of the Indemnified Party's notice to the Indemnifying Party as
set forth above, and shall take all actions necessary, including,
but not limited to, the posting of such bond or other security as
may be required by any Governmental Authority, so as to enable
the claim to be defended against or resolved without expense or
other action by the Indemnified Party. Upon request of the
Indemnifying Party, the Indemnified Party shall, to the extent it
may legally do so and to the extent that it is compensated in
advance by the Indemnifying Party for any costs and expenses
thereby incurred,
(1) take such action as the Indemnifying Party may reasonably
request in connection with such action,
(2) allow the Indemnifying Party to dispute such action in the
name of the Indemnified Party and to conduct a defense to
such action on behalf of the Indemnified Party, and
(3) render to the Indemnifying Party all such assistance as the
Indemnifying Party may reasonably request in connection with
such dispute and defense.
(vii) In any action or proceeding, the Indemnified Party shall have
the right to retain its own counsel; but the fees and expenses of
such counsel shall be at its own expense unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to any suit, action or proceeding (including any impleaded
parties) include both the Indemnifying Party and the Indemnified
Party and representation of all parties by the same counsel would
be inappropriate due to actual or potential conflict of interests
between them.
(viii) An Indemnifying Party shall not be liable under this Agreement
for any settlement effected without its consent of any claim,
litigation or proceeding in respect of which indemnity may be
sought hereunder.
(ix) The Indemnifying Party may settle any claim without the consent
of the Indemnified Party, but only if the sole relief awarded is
monetary damages that are paid in full by the Indemnifying Party.
The Indemnified Party shall, subject to its reasonable business
needs, use reasonable efforts to minimize the indemnification
sought from the Indemnifying Party under this Agreement.
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(c) Delivery of Property Received by the Company After Closing. From and
after the Closing, Buyer shall have the right and authority to
collect, for the account of Buyer, all receivables and other items
which shall be transferred or are intended to be transferred to Buyer
as part of the Assets as provided in this Agreement, and to endorse
with the name of the Sellers any checks or drafts received on account
of any such receivables or other Assets. Each Seller agrees that it
will transfer or deliver to Buyer, promptly after the receipt thereof,
any cash or other property which such Seller receives after the
Closing Date in respect of any claims, contracts, licenses, leases,
commitments, sales orders, purchase orders, receivables of any
character or any other items transferred or intended to be transferred
to Buyer as part of the Assets under this Agreement.
(d) Assignment of Contracts.
(i) At the option of Buyer, and notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an
assignment of any claim, contract, license, franchise, lease,
commitment, sales order, sales contract, supply contract, service
agreement, purchase order or purchase commitment if an attempted
assignment thereof without the consent of a third party thereto
would constitute a breach thereof or in any way adversely affect
the rights of Buyer thereunder. If such consent is not obtained,
or if any attempt at an assignment thereof would be ineffective
or would affect the rights of the Sellers thereunder so that
Buyer would not in fact receive all such rights, the Sellers
shall cooperate at its own expense with Buyer to the extent
necessary to provide for Buyer the benefits under such claim,
contract, license, franchise, lease, commitment, sales order,
sales contract, supply contract, service agreement, purchase
order or purchase commitment, including enforcement for the
benefit of Buyer of any and all rights of the Sellers against a
third party thereto arising out of the breach or cancellation by
such third party or otherwise.
(ii) In the event the assignment of the truck leases set forth on
Schedule 1(f)(ii) is not assignable on the Closing Date hereof,
Sellers hereby agree to continue to lease and insure such trucks
under the leases in effect on the Closing Date and shall make
such trucks available solely to Buyer for a period not to exceed
the earlier of (i) 120 days following the Closing Date and (ii)
the date upon which the lease agreements set forth in Schedule
1(f)(ii) shall have been assigned to Buyer. Buyer shall pay to
Sellers an amount equal to the premium and insurance payments for
the leases and all costs of the truck financing and the premium
insurance payments for the leases. Buyer further agrees that it
shall indemnify and hold harmless Sellers from any and all
damages incurred in connection with Buyer's usage of such trucks
not covered and/or otherwise disclaimed under the relevant
insurance policies set forth in Schedule 1(f)(ii).
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MISCELLANEOUS
12. Survival on Liability. The representations, warranties, covenants and
obligations of each party shall survive the execution and delivery of this
Agreement and the Closing hereunder and shall thereafter continue in full
force for 12 full calendar months after the Closing Date. However, the
representations and warranties contained in Section 8(d) (Taxes) shall
continue until 30 days after all liability relating thereto is barred by
all applicable statutes of limitation. If any claim for indemnification
hereunder that has been previously asserted by a party to this Agreement in
accordance with this Agreementy is still pending at the expiration of the
applicable survival period, such claim shall continue to be subject to the
indemnification provisions of this Agreement until resolved.
13. Confidentiality.
(a) At all times after the Closing, the Sellers shall, and shall cause the
Affiliates of the Sellers and its and their employees, agents,
accountants, legal counsel and other representatives and advisers to,
hold in strict confidence all, and not divulge or disclose any,
information of any kind concerning the transactions contemplated by
this Agreement, the Sellers, Buyer or their respective businesses;
provided, however, that the foregoing obligation of confidence shall
not apply to (i) information that is or becomes generally available to
the public other than as a result of a disclosure by the Sellers or
its Affiliates or any of its or their employees, agents, accountants,
legal counsel or other representatives or advisers, and (ii)
information that is required to be disclosed by the Sellers or its
Affiliates or any of its or their employees, agents, accountants,
legal counsel or other representatives or advisers as a result of any
applicable law, rule or regulation of any Governmental Authority; and
provided further that the Sellers and Shareholders promptly shall
notify Buyer of any disclosure pursuant to clause (ii) of this
Section.
(b) The Buyer shall, and shall cause their respective Affiliates,
employees, agents, accountants, legal counsel and other
representatives and advisers to, hold in strict confidence all, and
not divulge or disclose any, information of any kind concerning the
transactions contemplated by this Agreement, the Sellers, Buyer or
their respective businesses; provided, however, that the foregoing
obligation of confidence shall not apply to (i) information that is or
becomes generally available to the public other than as a result of a
disclosure by the Buyer or any of its Affiliates, employees, agents,
accountants, legal counsel or other representatives or advisers, and
(ii) information that is required to be disclosed by the Buyer or any
of its Affiliates, employees, agents, accountants, legal counsel or
other representatives or advisers as a result of any applicable law,
rule or regulation of any Governmental Authority; and provided further
that the Buyer shall promptly shall notify the Sellers of any
disclosure pursuant to clause (ii) of this Section.
(c) Notwithstanding anything herein to the contrary, any party to this
agreement (and each employee, representative, or other agent of such
party) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of any transaction
contemplated by this Agreement and all materials of any kind
(including opinions and other tax analyses) that are provided to the
party relating to such tax treatment and tax structure.
- 27 -
14. Notices.
Any notice, request, instruction, correspondence or other document to be
given hereunder by any party hereto to another (herein collectively called
"Notice") shall be in writing and delivered personally or mailed by registered
or certified mail, postage prepaid and return receipt requested, as follows:
IF TO BUYER: Chen Shlein
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
With a copy to:
Xxxx X. Xxxx, Esq.
Xxxxx & Hill
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax No. (000) 000-0000
Tel No. (000) 000-0000
IF TO THE COMPANY AND/OR THE
Shareholder:
Xxxx Xxxxxxx
0000 X. 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
With a copy to: Xxxxxxx Xxxxxxxxxxx, Esq.
The Law Offices of Xxxxxxx Xxxxxxxxxxx
00 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000
Each of the above addresses for notice purposes may be changed by providing
appropriate notice hereunder. Notice given by personal delivery or registered
mail shall be effective upon actual receipt. Notice given by telecopier shall be
effective upon actual receipt if received during the recipient's normal business
hours, or at the beginning of the recipient's next normal business day after
receipt if not received during the recipient's normal business hours. All
Notices by telecopier shall be confirmed by the sender thereof promptly after
transmission in writing by registered mail or personal delivery.
- 28 -
15. Governing Law. The provisions of this agreement and the documents delivered
pursuant hereto shall be solely governed by and construed in accordance
with the laws of the State of New York (excluding any conflict of law rule
or principle that would refer to the laws of another jurisdiction).
16. Dispute Resolution.
(a) The parties agree that the state or federal courts in the southern
district of New York shall have exclusive jurisdiction on all matters
arising out of or connected in any way with this agreement, and
sellers further agree that the service of process or of any other
papers upon them or any of them in the manner provided for notices
hereunder shall be deemed good, proper and effective service upon
them.
(b) Each of the sellers and buyer hereby waives its right to a jury trial
with respect to any action or claim arising out of any dispute in
connection with this agreement, the collateral agreements or any of
the other transaction documents, any rights or obligations hereunder
or thereunder or the performance of such rights and obligations.
17. Each party hereto shall cooperate, shall take such further action and shall
execute and deliver such further documents as may be reasonably requested
by any other party in order to carry out the provisions and purposes of
this Agreement.
18. Entire Agreement; Amendments and Waivers. This Agreement, together with all
exhibits and schedules attached hereto, constitutes the entire agreement
between and among the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties, including but not
limited to, that certain Memorandum of Understanding, dated the 14th day of
December 2006 by and among Willi and Sellers, and there are no warranties,
representations or other agreements between the parties in connection with
the subject matter hereof except as set forth specifically herein or
contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof
(regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
19. Binding Effect and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns; but neither this Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned, by operation of law or
otherwise, by any party hereto without the prior written consent of the
other party, provided, however, that nothing herein shall prohibit the
assignment of Buyer's rights and obligations to any direct or indirect
subsidiary or affiliate or prohibit the assignment of Buyer's rights (but
not obligations) to any lender. Nothing in this Agreement, express or
implied, is intended to confer upon any person or entity other than the
parties hereto and their respective permitted successors and assigns, any
rights, benefits or obligations hereunder.
- 29 -
20. Remedies. The rights and remedies provided by this Agreement are
cumulative, and the use of any one right or remedy by any party hereto
shall not preclude or constitute a waiver of its right to use any or all
other remedies. Such rights and remedies are given in addition to any other
rights and remedies a party may have by law, statute or otherwise.
21. Multiple Counterparts. This Agreement may be executed by facsimile and in
one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
22. References and Construction.
(a) Whenever required by the context, and is used in this Agreement, the
singular number shall include the plural and pronouns and any
variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identification the person
may require. References to monetary amounts, specific named statutes
and generally accepted accounting principles are intended to be and
shall be construed as references to United States dollars, statutes of
the United States of the stated name and United States generally
accepted accounting principles, respectively, unless the context
otherwise requires.
(b) The provisions of this Agreement shall be construed according to their
fair meaning and neither for nor against any party hereto irrespective
of which party caused such provisions to be drafted. Each of the
parties acknowledge that it has been represented by an attorney in
connection with the preparation and execution of this Agreement.
23. DEFINITIONS Capitalized terms used in this Agreement are used as defined in
this Section or elsewhere in this Agreement.
(a) Affiliate. The term "Affiliate" shall mean, with respect to any
person, any other person controlling, controlled by or under common
control with such person. The term "Control" as used in the preceding
sentence means, with respect to a corporation, the right to exercise,
directly or indirectly, more than 50% of the voting rights
attributable to the shares of the controlled corporation and, with
respect to any person other than a corporation, the possession,
directly or indirectly, of the power to direct or cause the direction
of the management or policies of such person.
(b) Collateral Agreements. The term "Collateral Agreements" shall mean any
or all of the exhibits to this Agreement and any and all other
agreements, instruments or documents required or expressly provided
under this Agreement to be executed and delivered in connection with
the transactions contemplated by this Agreement.
- 30 -
(c) Confidential Information. Any information not generally known in the
relevant field or industry about the Sellers' processes, activities,
services or products, including software, patents, Inventions,
know-how, trade secrets and information relating to research,
development, purchase, accounting, marketing, merchandising, pricing,
vendors, selling and customer lists. "Inventions" shall mean and
include discoveries, concepts and ideas, whether patentable or not,
including but not limited to processes, methods, designs, formulas,
and techniques, as well as improvements thereof or know-how related
thereto, which have been reduced to written form in some manner.
(d) Contracts. The term "Contracts," when described as being those of or
applicable to any Person, shall mean any and all contracts,
agreements, franchises, understandings, arrangements, leases,
licenses, registrations, authorizations, easements, servitudes, rights
of way, mortgages, bonds, notes, guaranties, liens, indebtedness,
approvals or other instruments or undertakings to which such person is
a party or to which or by which such person or the property of such
person is subject or bound, excluding any Permits.
(e) Damages. The term "Damages" shall mean any and all damages,
liabilities, obligations, penalties, fines, judgments, claims,
deficiencies, losses, costs, expenses and assessments (including
without limitation income and other taxes, interest, penalties and
attorneys' and accountants' fees and disbursements).
(f) Governmental Authorities. The term "Governmental Authorities" shall
mean any nation or country (including but not limited to the United
States) and any commonwealth, territory or possession thereof and any
political subdivision of any of the foregoing, including but not
limited to courts, departments, commissions, boards, bureaus,
agencies, ministries or other instrumentalities.
(g) Hazardous Material. The term "Hazardous Material" shall mean all or
any of the following: (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations
as "hazardous substances," "hazardous materials," "Hazardous wastes,"
"toxic substances" or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive
toxicity or "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or
geothermal resources; (c) any flammable substances or explosives or
any radioactive materials; and (d) asbestos in any form or electrical
equipment which contains any oil or dielectric fluid containing levels
of polychlorinated biphenyls in excess of fifty parts per million.
(h) Legal Requirements. The term "Legal Requirements," when described as
being applicable to any person, shall mean any and all laws
(statutory, judicial or otherwise), ordinances, regulations,
judgments, orders, directives, injunctions, writs, decrees or awards
of, and any Contracts with, any Governmental Authority, in each case
as and to the extent applicable to such person or such person's
business, operations or properties.
- 31 -
(i) Liens: The term "Liens" shall mean any and all liens, encumbrances,
mortgages, security interests, pledges, claims, equities, charges and
other restrictions or limitations of any kind or nature whatsoever.
(j) Permits. The term "Permits" shall mean any and all permits, rights,
approvals, licenses, authorizations, legal status, orders or Contracts
under any Legal Requirement or otherwise granted by any Governmental
Authority.
(k) Person. The term "Person" shall mean any individual, partnership,
joint venture, firm, corporation, association, limited liability
company, limited liability partnership, trust or other enterprise or
any governmental or political subdivision or any agency, department or
instrumentality thereof.
(l) Regulations. The term "Regulations" shall mean any and all regulations
promulgated by the Department of the Treasury pursuant to the Internal
Revenue Code.
(m) Trade Secrets. The term "Trade Secrets" shall mean information of the
Sellers including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, financial data, financial
plans, product or service plans or lists of actual or potential
customers or suppliers which (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its
secrecy.
(n) Used. The term "Used" shall mean, with respect to the Properties,
Contracts or Permits of the Sellers, those owned, leased, licensed or
otherwise held by the Sellers which were acquired for use or held for
use by the Sellers in connection with the Sellers' business and
operations, whether or not reflected on the Sellers' books of account.
[Signature Page Follows]
- 32 -
EXECUTED as of the date first written above.
WF Kosher Food Distributors, Ltd. X. Xxxxx-Food International, Ltd., with
regard to Sections 3(c) and 5(b)(i)(2)
only
/s/ Pini Rozen /s/ Chen Shlein
-------------- ---------------
By: By:
Name: Pini Rozen Name: Chen Shlein
SELLERS:
Laish Israeli Food Products, Ltd.
/s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxxxx
---------------- ----------------
By: By:
Name: Xxxx Xxxxxxx Name: Xxxx Xxxxxxx
Escrow Agents
Xxxxx & Xxxx Law Offices of Xxxxxxx Xxxxxxxxxxx
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxxx Xxxxxxxxxxx
-------------------- ---------------------------
Name: Xxxx X. Xxxx Name: Xxxxxxx Xxxxxxxxxxx
- 33 -
