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EXHIBIT 10.67
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
December 29, 1997, by and among Southwestern Ice, Inc., a Texas corporation
("Buyer"), Superior Ice Company, Inc., a Utah corporation ("Seller"), Xxxxxx X.
Xxxxx, an individual residing in the State of Nevada, and Xxxx Xxxxx, an
individual residing in the State of Utah (together, the "Shareholders").
PRELIMINARY STATEMENTS
Seller is engaged in the production, distribution and sale of packaged
ice products (such business being referred to herein as the "Seller's Business"
or the "Business"); and
Seller is desirous of selling to Buyer and Buyer is desirous of
purchasing from Seller certain assets of Seller's Business, upon the terms and
conditions hereafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants, representations and warranties hereafter set forth, the
parties hereto hereby agree as follows:
I. DEFINITIONS
Unless the context otherwise requires, the terms defined in this
Section I shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined.
"Assets" shall mean those assets of the Seller which are more fully
described in Section 2.1 and Schedule 2.1 of this Agreement.
"Xxxx of Sale" shall refer to the Xxxx of Sale conveying title to the
Assets from Seller to Buyer, a copy of which is attached hereto as Exhibit A and
incorporated herein.
"Closing" shall mean the consummation of this Agreement.
"Closing Date" shall mean the date on which this Agreement is
consummated.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Earn-Out Agreement" shall mean the earn-out agreement between Buyer
and Xxxx Xxxxx, a copy of which is attached hereto as Exhibit B and incorporated
herein.
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"Employment Agreement" shall mean the employment agreement between
Buyer and Xxxx Xxxxx referred to in Section 2.8 of this Agreement, a copy of
which is attached hereto as Exhibit C.
"Excluded Assets" shall have the meaning set forth in Section 2.10 of
this Agreement.
"Financial Statements" shall have the meaning set forth in Section 3.3
of this Agreement.
"Governmental Authority" shall mean any federal, state, local, foreign
or other governmental agency, department, commission, board, bureau,
instrumentality or body.
"Intangible Assets" shall mean all patents, trademarks, trademark
licenses, trade names, brand names, slogans, copyrights, reprint rights,
franchises, licenses, authorizations, inventions, processes, know-how, formulas,
trade secrets and other intangible assets of and only of the Business (together
with all pending applications, continuations-in-part and extensions for any of
the above).
"Purchase Price" shall have the meaning set forth in Section 2.2 of
this Agreement.
"Seller's Disclosure Memorandum" shall mean a memorandum prepared by
the Seller and Shareholders and delivered to Buyer which lists all disclosures
by the Seller concerning the Assets and the Business which are the subject of
this Agreement.
"Taxes" shall mean all excise, added value, sales, use, real and
personal property, occupancy, business and occupation, mercantile, real estate,
or other tax (including interest and penalties thereon and including estimated
taxes thereof).
II. PURCHASE AND SALE
2.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement, and except for the Excluded Assets, Seller agrees to sell,
convey, assign, transfer and deliver to Buyer, and Buyer agrees to purchase, at
the Closing, the personal property, intangible assets, contracts and rights of
Seller related to the Seller's Business which are described on Schedule 2.1
attached hereto and incorporated herein by reference, and all of the goodwill of
Seller's Business associated therewith (collectively the "Assets").
2.2 PURCHASE PRICE. The purchase price for the Assets shall be
$1,000,000.00 (the "Purchase Price"), which shall be payable to the Seller in
accordance with Section 2.4 herein. In addition, Buyer will pay to Xxxx Xxxxx in
either cash or in shares of common stock, $.01 par value, of Packaged Ice, Inc.,
a Texas corporation (the "Common Stock"), an amount not to exceed $125,000.00
(the "Additional Payment") based on the earnings of the Business and an ice
distribution and sales business located in Utah in excess of a certain threshold
amount, all on the terms and as more fully described in the Earn-Out Agreement.
2.3 ASSUMPTION OF LIABILITIES. It is hereby agreed and understood that
Buyer is assuming no liabilities whatsoever of Seller. Seller shall be
responsible for all employment
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related expenses which accrue before the Closing Date, including, without
limitation, salaries, wages, accrued vacation pay, sick pay or leave,
unemployment compensation, pension and profit sharing plans, income tax
withholding, and social security taxes. Seller will terminate its employees as
of the Closing Date, and Buyer may thereafter hire any or all of such employees.
The parties agree that Buyer is not assuming any of Seller's pension or profit
sharing plans, and Seller shall be remain responsible therefor.
2.4 PAYMENT OF INITIAL PAYMENT. The Purchase Price shall be payable as
follows:
(a) the Closing Date payoff amounts of all current and long
term interest bearing debt and operating and capital leases relating to
the Assets (including any unpaid interest and prepayment penalties)
shall be paid directly to Seller's creditors; and
(b) the remaining amount shall be paid to the Seller in the
form of cash.
2.5 PRORATION. The parties shall prorate at the Closing the current
year's Taxes on the property comprising the Assets, based on the latest
available statements from taxing authorities, whether for the current tax year
or the preceding tax year. Seller's pro rata share of such Taxes shall be the
portion attributable to the period through the day preceding the Closing Date,
prorated by days. The prorated amounts shall be payable in the manner set forth
below:
(a) If a prorated amount is payable by Buyer and determinable
at the Closing, it shall be added to the amount payable by Buyer at the
Closing.
(b) If a prorated amount is payable by Buyer and not
determinable at the Closing, it shall be billed by Seller when
determinable and promptly paid by Buyer to Seller.
(c) If a prorated amount is payable by Seller and determinable
at the Closing, it shall be deducted from the amount otherwise payable
by Buyer at the Closing.
(d) If a prorated amount is payable by Seller and not
determinable at the Closing, it shall be billed by Buyer when
determinable and promptly paid by Seller to Buyer.
2.6 ALLOCATION. The parties hereto agree and acknowledge that the
Purchase Price shall be allocated $172,000.00 to the personal property of Seller
purchased by Buyer hereunder and $828,000.00 to the Seller's customer list,
goodwill and other Assets purchased by Buyer hereunder, or as otherwise mutually
agreed upon by the Buyer and Seller, and Seller and Buyer agree to file all Tax
returns or reports including, without limitation, IRS Form 8594, for their
respective taxable years in which the Closing occurs and to reflect the
allocation of the Purchase Price on any such return or report and agree not to
take any position inconsistent therewith before any Governmental Authority
charged with the collection of any Tax or in any administrative proceeding.
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2.7 LEASE. The parties shall enter into a lease agreement for the real
property described in Schedule 2.7 (the "Leased Property") in the form of the
Lease attached hereto as Exhibit 2.7-A (the "Lease").
2.8 EMPLOYMENT AGREEMENT. Buyer shall enter into an Employment
Agreement with Xxxx Xxxxx (the "Employment Agreement") in the form of Exhibit C
attached hereto, in which Buyer agrees to employ Xxxx Xxxxx for a period of one
(1) year at a salary of $60,000.
2.9 EXCLUDED ASSETS. The Excluded Assets, if any, shall be set forth on
Schedule 2.9 attached hereto.
III. REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND SHAREHOLDERS
Except as otherwise disclosed in the Seller's Disclosure Memorandum,
the Seller and the Shareholders each represent and warrant to Buyer as follows:
3.1 ORGANIZATION. Seller is a corporation duly incorporated and
organized under the laws of the state of Utah. Seller has all requisite power
and authority to own, lease and operate the Business as presently conducted and
to enter into this Agreement and to perform its respective obligations
hereunder.
3.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT. The execution,
delivery and performance by the Seller of this Agreement and the consummation of
each of the transactions contemplated hereby have been duly authorized by all
necessary corporate action. This Agreement has been duly executed and delivered
by the Seller and constitutes the valid and binding obligation of Seller and
Shareholders, enforceable against them in accordance with its terms. The
execution, delivery and performance of this Agreement by Seller and Shareholders
will not, with or without the giving of notice, the passage of time, or both,
violate, conflict with, result in a default, breach or loss of rights under, or
result in the creation of any lien, claim or encumbrance pursuant to, any lien,
encumbrance, instrument, agreement, or understanding, or any law, regulation,
rule, order, judgment or decree, to which Seller and/or the Shareholders is a
party or by which they are bound or affected, respectively.
3.3 FINANCIAL STATEMENTS. Seller has previously caused to be furnished
to Buyer the balance sheets of Seller as of December 31, 1995 and 1996, and the
related statements of income for the period then ended, and (such balance sheets
and related statements are collectively referred to herein as the "Financial
Statements"). The Financial Statements taken as a whole present fairly the
financial position of Seller as of December 31, 1996, in accordance with
generally accepted accounting principles, consistently applied.
Except as and to the extent reflected or reserved against in the
Financial Statements or as disclosed by Seller in the Seller's Disclosure
Memorandum and except for liabilities arising in the ordinary course of business
and consistent with past practice since the date of the December 31, 1996
balance sheet of Seller, Seller has operated the Business in the ordinary course
and has
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incurred no material liabilities which would be required to be reflected in
accordance with generally accepted accounting principles on a balance sheet as
of the date hereof or disclosed in the notes thereto. Since December 31, 1996,
there has not been any material adverse change in the business, operations,
properties, prospects, assets or condition of Seller, and no event has occurred
or circumstance exists that may result in such a material adverse change.
3.4 ENCUMBRANCES ON THE ASSETS. Except as set forth on the Seller's
Disclosure Memorandum, there are no debts, liabilities, mortgages, liens,
leases, security interests, charges, pledges, conditional sale agreements, or
adverse claims or restrictions, transfers or any other encumbrances (hereinafter
"Encumbrances") whatsoever against the Assets.
3.5 BUSINESS OPERATIONS AND CONDITION OF ASSETS. The Seller
acknowledges that Buyer is purchasing the Assets for the express purpose of
operating a packaged ice manufacturing and distribution business. All items
comprising the Assets have been continuously used by Seller in Seller's Business
and are now in good operating condition unless expressly disclosed to the
contrary by Seller in the Seller's Disclosure Memorandum.
3.6 TITLE TO PERSONAL PROPERTY. Except as set forth in the Seller's
Disclosure Memorandum, Seller has good, legal and marketable title to all of the
personal property comprising the Assets; at the Closing, Seller shall deliver to
Buyer good, legal and marketable title to the Assets free from all Encumbrances.
3.7 LITIGATION. Except as set forth in the Seller's Disclosure
Memorandum, there is no pending claim, action, suit, proceeding or investigation
(judicial, governmental or otherwise), nor any order, decree or judgment in
effect or threatened, against or relating to Seller or the Assets, or the
transactions contemplated by this Agreement, and no event has occurred or
circumstances exist that will, or is reasonably likely to, give rise to or serve
as a basis for the commencement of any claim, action, suit, proceeding or
investigation.
3.8 COMPLIANCE WITH LAWS. Seller has complied with all laws, rules,
regulations, ordinances, orders, judgments and decrees relating to the Assets.
The ownership and use of the Assets and the conduct of the Business as it
specifically relates to the Assets and the Leased Properties do not conflict
with the rights of any other person.
3.9 TAXES. All returns, including estimated tax returns, required to be
filed after the Closing Date by or with respect to Seller with respect to Taxes,
that, if unpaid, might result in a lien upon any of the Assets, will be duly
filed and will be true, correct and complete, and all Taxes payable pursuant
thereto will be paid except such Taxes, if any, as may be contested in good
faith. No deficiency or adjustment in respect to any Taxes that have been
assessed against or with respect to Seller that, if unpaid, might result in a
lien upon any of the Assets remains unpaid.
All Taxes that relate to the Assets and that are payable by or
accruable by Seller or as to which Seller has any liability with respect to
events occurring on or before the Closing Date
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have been paid in full or have been adequately provided for in the reserve for
taxes on the books of Seller on or before the Closing Date, except for income,
franchise or capital stock taxes and transfer, sales and other taxes arising in
connection with the transactions contemplated by this Agreement.
3.10 ENVIRONMENTAL. The Seller has complied in all respects with all
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of any Governmental
Authorities which have jurisdiction over the Seller concerning pollution or
protection of the environment, public health and safety, or employee health and
safety, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials
or wastes, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice (collectively, an "Environmental Action")
has been filed or commenced against any of them alleging any failure of the
Seller so to comply, nor is Seller or Shareholders aware of any circumstances or
conditions which may cause any such Environmental Action to be filed or
commenced against Seller.
Without limiting the generality of the preceding sentence, the Seller
has obtained and been in material compliance with all of the terms and
conditions of all permits, licenses, and other authorizations which are required
under, and has complied, in all material respects, with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables which are contained in such laws. Buyer, at Buyer's
expense, shall have the right to conduct any and all environmental
investigations and surveys necessary to satisfy Buyer as to the environmental
condition of the Assets or the Leased Property.
3.11 EMPLOYEE BENEFITS. All employee benefit plans (whether or not
covered by ERISA), deferred compensation or executive compensation plans for
employees, directors or independent contractors, and all other employee or
independent contractor arrangements or programs that are maintained or
contributed to by the Seller have (collectively, the "Company Plans") been
administered and operated in all material respects in compliance with their
terms, ERISA, if applicable, the Code and other applicable law. All Company
Plans that are intended to be qualified under Section 401(a) of the Code are so
qualified and a current favorable IRS determination letter exists for each such
plan and covers the amendments required by the Tax Reform Act of 1986. All
funded Company Plans are fully funded according to their terms and applicable
law. To the knowledge of the Seller, no prohibited transaction or breach of
fiduciary duty under ERISA has been committed by any fiduciary, disqualified
person or party in interest of any Company Plan. The Seller has no liability,
contingent or otherwise, under Title IV of ERISA.
3.12 COMPLETE AND ACCURATE DISCLOSURE. No representation or warranty
made to Buyer in this Agreement or in connection with this transaction contains
or will contain an untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make such representation or warranty not
misleading or necessary to enable a prospective purchaser of
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Seller's Business, the Assets or the Leased Property to make a fully informed
decision. All documents and information which have been or will be delivered to
Buyer or its representatives by or on behalf of the Seller are and will be true,
correct and complete copies of the documents they purport to represent.
Except as set forth in the Seller's Disclosure Memorandum, no consent
or approval of any public body or authority and no consents or waivers from
other parties to material licenses, franchises, permits, agreements or other
instruments are required to be obtained by Seller as a result of the transfer of
the Assets contemplated by this Agreement to (i) avoid the loss of any material
license, franchise, permit or other instrument or the creation of any lien or
other claim on any Asset pursuant to the terms of any law, regulation, order,
agreement or other legal requirement binding upon Seller or Shareholders
relating to the Business or to which any such Asset may be subject, or (ii) to
enable Buyer to continue the operation of the Business substantially as
conducted prior to the Closing.
3.13 CONTRACTS. Seller is not a party to any contracts relating to the
Business or the Assets that are not terminable at will, other than those
contracts of Seller relating to the Business listed and described in the
Seller's Disclosure Memorandum.
3.14 INSURANCE AND WARRANTIES.
(a) Insurance. Seller has in force all policies of insurance
described in Section 3.14(a) of the Seller's Disclosure Memorandum insuring it
(including descriptions of whether such policies and binders are "claims made"
or "occurrences" policies, and the respective issuers and expiration dates
thereof). Seller and Shareholders have not been advised (i) of any risks or any
fact or matter which might render such policies void or voidable, or (ii) any
cancellations of insurance coverage, or material increases in premium, or other
costs related to insurance, to take effect, or that are proposed, or that may or
will occur, following the Closing. To the Seller's or Shareholders' knowledge,
all such policies are underwritten by reputable insurers, and there is no basis
to believe the insurers are or are likely to become financially unsound. Seller
has not been refused insurance or been notified of any cancellation or
involuntary reduction or other limitation of insurance during the past three
years. Section 3.14(a) of the Seller's Disclosure Memorandum lists all claims
made or dues to be made by Seller, and all matters for which a claim could
reasonably have been but was not made, against an insurer on account of events
occurring since December 31, 1996.
(b) Warranties. Except as described in Section 3.14(b) of the
Seller's Disclosure Memorandum, (i) Seller has not agreed to become responsible
for consequential damages or made any express warranties to third parties with
respect to any products distributed or sold by Seller and (ii) there are no
warranties (express or implied) outstanding with respect to any products other
than any such implied by law. A copy of each standard warranty of Seller with
respect to such product is included in Section 3.14(b) of the Seller's
Disclosure Memorandum.
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3.15 INVENTORIES.
(a) All inventories shown on the December 31, 1996 Balance
Sheet of Seller consisted of, and all inventories thereafter acquired will
consist of, items of good and merchantable quality and quantity usable or
salable in the ordinary and regular course of Seller's business except for
obsolete items and items below standard quality, all of which have been written
off, or written down to net realizable value on the December 31, 1996 Balance
Sheet of Seller. Each inventory or class was priced at the lower of cost or
market on the first-in, first-out basis and, as to the classes of items
inventoried and methods of counting and pricing, such inventories were
determined in a manner consistent with prior years. Except to the extent, if
any, disclosed in Section 3.15 of the Seller's Disclosure Memorandum, Seller has
neither sold any of its inventory under agreements with an express right of
return, nor consigned any inventory, and Seller and Shareholders have no
knowledge of any pending returns of inventory in any material quantity.
(b) There have been no material changes in the inventories
reflected in the December 31, 1996 Balance Sheet of Seller and there will be no
further changes in any such inventories except those changes resulting from
write down or write-offs, purchases in the ordinary and regular course of
business and sale of merchandise inventory in the ordinary and regular course of
business.
3.16 SUPPLIERS AND CUSTOMERS. Except as set forth in Section 3.16 of
the Seller's Disclosure Memorandum and to Seller's and Shareholders' actual
knowledge, no customer of Seller has communicated to Seller or Shareholders, in
any manner, his or its intention to cease to do business with or trade with
Seller, or materially alter, modify or amend the terms with which it has
conducted business with Seller whether as a result of, or in contemplation of,
the consummation of the transactions contemplated by this Agreement.
IV. REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 CORPORATE EXISTENCE; GOOD STANDING; CAPITALIZATION. Buyer is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Texas.
4.2 POWER AND AUTHORITY. Buyer has the requisite corporate power and
authority, and has been duly authorized, to enter into this Agreement and to
perform all of its obligations hereunder. Buyer represents and warrants to
Seller that this Agreement has been duly executed and delivered by Buyer, and
constitutes a valid and binding obligation in accordance with its terms.
V. COVENANTS OF THE SELLER AND SHAREHOLDERS
The Seller and Shareholders hereby covenant and agree as follows:
5.1 CONDUCT OF BUSINESS. Between the date hereof and the Closing Date,
Seller shall operate the Business in the ordinary course and continue normal
capital expenditures and maintenance in connection with the Assets prior to the
Closing Date, except (i) as may be
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permitted by this Agreement or (ii) as necessary to consummate the transactions
contemplated hereby.
5.2 INVESTIGATION BY BUYER.
(a) Between the date hereof and the Closing Date, the Seller
shall (i) give Buyer and its authorized representatives and advisors access, at
reasonable times and on reasonable notice, to all items of personal property
comprising the Assets, books and records, personnel, offices, and other
facilities of the Assets, (ii) permit Buyer to make such inspections thereof as
Buyer may reasonably require, and (iii) cause its employees, and its advisors to
furnish to Buyer and its authorized representatives and advisors such financial
and operating data and other information with respect to the Business prepared
in the ordinary course of the Business as Buyer or its agent shall from time to
time reasonably request.
(b) The Seller agrees that, subsequent to the Closing Date,
Buyer and its agents and accountants will be permitted reasonable access, during
normal business hours, and as often as Buyer may reasonably request, consistent
with reasonable requirements of the Seller, to the books and records of Seller
and its affiliates, insofar as such books and records contain information or
data pertaining to the Assets and the Leased Property prior to the Closing Date
to the extent such information is not otherwise available at the offices or
other facilities of the Buyer, and Buyer shall have the right to make copies
thereof and excerpts therefrom.
5.3 CLOSING CONDITIONS. The Seller and Shareholders will, to the extent
within their control, use their best efforts to cause the conditions set forth
in Article VIII to be satisfied by the Closing Date.
5.4 CONFIDENTIALITY. From and after the date hereof, the Seller will,
and will cause its respective officers, employees, representatives, consultants
and advisors to, hold in confidence all confidential information in the
possession of the Seller, its affiliates or its financial advisors concerning
the Assets and the Leased Property. The Seller and Shareholders will not release
or disclose any such information to any person other than Buyer and its
authorized representatives. Notwithstanding the foregoing, the confidentiality
obligations of this Section shall not apply to information:
(a) which Seller or Shareholders are compelled to disclose by
judicial or administrative process, or, in the reasonable opinion of
counsel, by other mandatory requirements of law;
(b) which can be shown to have been generally available to the
public other than as a result of a breach of this Section; or
(c) which can be shown to have been provided to the Seller or
Shareholders by a third party who obtained such information other than
as a result of a breach of a confidential relationship.
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5.5 PUBLIC ANNOUNCEMENT. The Seller, Shareholders and Buyer will
cooperate in the public announcement of the transactions contemplated by this
Agreement, and, other than as may be required by applicable law, no such
announcement will be made by either party without the consent of the other
party, which consent shall not be unreasonably withheld.
5.6 NO SHOPPING. Neither Seller nor Shareholders shall solicit,
initiate or participate, directly or indirectly, or cause any other person to
solicit, initiate or participate, directly or indirectly, in discussions or
negotiations with, or provide any information to, any other person (other than
the Buyer) concerning, or enter into any agreement providing for (other than in
the ordinary course of business) the acquisition of the Assets or the Leased
Property or part thereof (whether by merger, purchase of stock or assets or
other similar transaction), other than the acquisition contemplated by this
Agreement.
5.7 FURTHER ASSURANCES. The Seller and Shareholders will use their best
efforts to implement the provisions of this Agreement, and for such purpose the
Seller and Shareholders, at the request of Buyer, at or after the Closing Date,
will, without further consideration, promptly execute and deliver, or cause to
be executed and delivered, to Buyer such deeds, assignments, bills of sale,
consents, documents evidencing title and other instruments in addition to those
required by this Agreement, in form and substance satisfactory to Buyer, as
Buyer may reasonably deem necessary or desirable to implement any provision of
this Agreement.
5.8 INSURANCE. Seller shall maintain insurance through the Closing Date
with financially sound and reputable insurers unaffiliated with the Seller or
Shareholders in such amounts and against such risks as are adequate to protect
the Assets and the Business.
5.9 NONCOMPETITION AGREEMENT. At the Closing, the Seller and
Shareholders will enter into a noncompetition agreement with Buyer in the form
attached hereto as Exhibit D (the "Noncompetition Agreement").
5.10 CESSATION OF BUSINESS/CHANGE OF NAME. At and after the Closing,
the Seller will cease to conduct any business constituting the manufacturing,
packaging, distribution and/or storage of packaged ice products. Seller further
agrees it will execute any and all other documents requested by Buyer to
facilitate Buyer's use of the name of "Superior Ice Company, Inc." or any
variants thereof.
5.11 DISCHARGE OF SELLER'S DEBTS. Seller hereby agrees and acknowledges
that Buyer is not assuming any of Seller's debts, and that Seller remains
responsible for and will discharge all debts that relate to the Business and
were incurred by Seller prior to the Closing.
VI. COVENANTS OF BUYER
6.1 ANCILLARY AGREEMENTS. At the Closing, Buyer will pay the Initial Payment and
enter into the Noncompetition Agreement, the Lease, the Employment Agreement,
the Earn-Out Agreement, and all other ancillary documents required hereunder.
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VII. CLOSING
7.1 TIME AND PLACE. The consummation of the sale and purchase of the
Assets and the execution of the Noncompetition Agreement (the "Closing") shall
take place at a mutually agreeable time and place in Salt Lake City, Utah on
December 29, 1997 (the "Closing Date").
7.2 THE SELLER'S AND SHAREHOLDERS' OBLIGATIONS AT CLOSING. At the
Closing, Seller and Shareholders shall, as appropriate, execute, acknowledge and
deliver to Buyer, in form reasonably satisfactory to Buyer:
(a) an assignment or assignments assigning to Buyer the use
and possession of all that property comprising the Assets;
(b) copies of all certificates of occupancy, licenses,
permits, authorizations, and approvals required by law and issued by
all Governmental Authorities having jurisdiction, if any, and the
original of each xxxx for current real estate and personal property
taxes, together with proof of payment thereof (if any of the same have
been paid);
(c) The Xxxx of Sale, any assignments or other suitable
transfer documents transferring to Buyer, the Assets, free and clear of
all liens and encumbrances, in form reasonably satisfactory to Buyer
which includes the form UCC-3 or other appropriate form indicating
release of liens by any secured party and that no action of redress or
reclamation shall be sought by any secured party against Buyer or the
Assets;
(d) the Noncompetition Agreement;
(e) a Certificate of Compliance, in form and substance
satisfactory to Buyer, from the Seller indicating that the Seller has
materially complied with its obligations contained in this Agreement,
that all representations and warranties contained in this Agreement or
in any certificate required to be delivered in connection with this
Agreement shall be accurate at and as of the Closing with the same
force and effect as though made at Closing, and no material adverse
change with respect to Seller has occurred;
(f) the Employment Agreement;
(g) the Lease for the Leased Property;
(h) the Earn-Out Agreement.
7.3 BUYER'S OBLIGATIONS AT CLOSING. At the Closing, Buyer will:
(a) pay the Purchase Price in accordance with Section 2.4;
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(b) deliver to Shareholders an executed counterpart of the
Employment Agreement and Noncompetition Agreement;
(c) deliver to the Seller executed counterparts of the Lease,
Earn-Out Agreement, and all other ancillary documents required
hereunder; and
(d) deliver to Seller a Certificate of Compliance from an
officer of Buyer indicating that Buyer has materially complied with its
obligations, representations and warranties contained in this
Agreement.
VIII. CONDITIONS TO CLOSING
8.1 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
complete the transactions contemplated at the Closing shall be subject to the
satisfaction on or prior to the Closing Date of the following conditions:
(a) Performance. Each agreement and obligation of Seller and
Shareholders to be performed on or before the Closing Date shall have
been duly performed in all material respects;
(b) Representations and Warranties True; No Material Adverse
Change. The representations and warranties of Seller and Shareholders
contained herein or in any certificate required to be delivered in
connection with this Agreement shall have been accurate on the date
hereof and shall be accurate at and as of the Closing, and since the
date hereof there shall have occurred no material adverse change in the
business operations, properties, prospects, Assets, Leased Property or
condition of Seller;
(c) No Violation of Statutes, Orders, etc. There shall not be
in effect any decree or judgment enjoining Buyer from consummating the
transactions contemplated hereby; and
(d) Third Party Creditors. All third-party creditors of the
Business will be paid in full and will have released all liens or
claims against the Assets, Seller shall provide to Buyer documentation
from all third party creditors indicating that the third party
creditors have released their liens against the Assets and consented to
Seller's conveyance of the Assets to Buyer free and clear of all liens
or other Encumbrances.
8.2 CONDITIONS TO OBLIGATIONS OF THE SELLER AND SHAREHOLDERS. The
obligations of the Seller and Shareholders to complete the transactions
contemplated at the Closing shall be subject to the satisfaction on or prior to
the Closing Date of the following conditions:
(a) Performance. Each agreement of Buyer to be performed on or
before the Closing Date shall have been duly performed in all material
respects;
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(b) Representations and Warranties True. The representations
and warranties of Buyer contained herein shall have been true in all
material respects; and
(c) No Violation of Statutes, Orders, etc. There shall not be
in effect any decree or judgment enjoining the Seller or Shareholders
from consummating the transactions contemplated hereby.
IX. INDEMNIFICATION
9.1 INDEMNIFICATION OF BUYER BY THE SELLER AND SHAREHOLDERS. The Seller
and Shareholders agree to jointly and severally indemnify, defend and hold
harmless Buyer and Buyer's employees, agents, heirs, legal representatives, and
assigns from and against any and all claims, suits, losses, expenses (legal,
accounting, investigation and otherwise), damages and liabilities, including,
without limitation, tax liabilities (hereinafter, collectively "Damages"),
arising out of or relating to (i) any liability or obligation of Seller or
Shareholders or (ii) any inaccuracy of any representation or warranty set forth
in this Agreement or the breach of any covenant made by Seller or Shareholders
in or pursuant to this Agreement.
9.2 INDEMNIFICATION OF THE SELLER AND SHAREHOLDERS BY BUYER. Buyer
agrees to indemnify, defend and hold harmless the Seller and Shareholders from
and against only those Damages arising out of or relating to any inaccuracy of
any representation or warranty of Buyer set forth in this Agreement or the
breach of any covenant made by Buyer in or pursuant to this Agreement.
9.3 CLAIMS FOR INDEMNIFICATION. Whenever any claim arises for
indemnification hereunder, the indemnified party (hereafter the "Indemnified
Party") shall notify the indemnifying party (hereafter the "Indemnifying Party")
in writing by registered or certified mail promptly after the Indemnified Party
has actual knowledge of the facts constituting the basis for such claim (the
"Notice of Claim"). Such notice shall specify all material facts known to the
Indemnified Party giving rise to such indemnification right, and to the extent
practicable, the amount or an estimate of the amount of the liability arising
therefrom. The failure of any Indemnified Party to promptly notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligation to
indemnify in respect to such action and shall not relieve the Indemnifying Party
of any other liability which they may have to any Indemnified Party unless such
failure to notify the Indemnifying Party prejudices the rights of the
Indemnifying Party.
9.4 RIGHT TO DEFEND. If the facts giving rise to any such claim for
indemnification involve any actual or threatened claim or demand by any third
party against the Indemnified Party, the Indemnifying Party shall be entitled
(without prejudice to the right of the Indemnified Party to participate in the
defense of such claim or demand at its expense through counsel of its own
choosing) to assume the defense of such claim or demand in the name of the
Indemnified Party at the Indemnifying Party's expense and through counsel of its
own choosing, which counsel shall be reasonably satisfactory to the Indemnified
Party, if it gives written notice to the Indemnified Party within forty-five
(45) days after receipt of the Notice of Claim that the Indemnifying Party
intends to assume the defense of such claim and acknowledges its liability to
indemnify the Indemnified
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Party for any losses resulting from such claim; provided, however, that if the
Indemnifying Party does not elect to assume the defense of any claim, then (a)
the Indemnifying Party shall have the right to participate in the defense of
such claim or demand at its expense through counsel of its own choosing,
provided the Indemnified Party shall control the defense of such claim, (b) the
Indemnified Party may settle any such claim without the consent of the
Indemnifying Party, however, the Indemnifying Party may not settle any such
claim without the prior written consent of the Indemnified Party; and (c)
Section 9.5 hereof shall be inapplicable. Whether or not the Indemnifying Party
does choose to so defend such claim, the parties hereto shall cooperate in the
defense thereof and shall furnish such records, information and testimony and
attend such conferences, discovery proceedings, hearings, trials and appeals as
may be requested in connection therewith. To the extent Seller or Shareholders
are the Indemnified Party for any actual or threatened claim or demand by any
third party, the Seller shall have the right to control the prosecution of any
counterclaim or right related to such a claim or demand, provided that the
Seller and Shareholders agree to reasonably cooperate with Buyer with respect to
the prosecution of such counterclaim or right.
9.5 SETTLEMENT. Except as provided in Section 9.4, (i) the Indemnified
Party shall make no settlement of any claim that would give rise to liability on
the part of the Indemnifying Party under an indemnity contained in this Article
IX without the written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld and (ii) the Indemnifying Party can settle without
the consent of the Indemnified Party only if the settlement involves only the
payment of money for which the Indemnifying Party will be fully liable. No other
settlement of any claim may be made without the consent of both the Indemnified
Party and the Indemnifying Party, which consent shall not be unreasonably
withheld.
9.6 EFFECT OF TERMINATION. Without limiting any other rights the
parties may have, the parties specifically agree that the covenants contained in
this Article will continue to be enforceable following termination of this
Agreement.
X. TERMINATION
10.1 TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing Date by any of the
following:
(a) Mutual Consent. By mutual written consent of the Seller
and Buyer;
(b) Misrepresentation or Breach. By the Seller or the Buyer,
if there has been a material misrepresentation or a material breach of
a warranty or covenant herein or in any agreement required to be
delivered pursuant hereto on the part of the other party hereto;
(c) Failure of Condition to Buyer's Obligations. By Buyer, if
all of the conditions set forth in Section 8.1 have not been satisfied;
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(d) Failure of Condition to Seller's and Shareholders'
Obligations. By the Seller, if all of the conditions set forth in
Section 8.2 have not been satisfied;
(e) Court Order. By the Seller or Buyer if consummation of the
transactions contemplated hereby shall violate any nonappealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction;
(f) Material Adverse Change. By Buyer if any event has
occurred after the date hereof which is, or will result in a material
adverse change in the prospects, business or condition of the Assets.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 10.1(a), all further obligations of the Seller, Shareholders and Buyer
under this Agreement shall terminate without further liability of the Seller,
Shareholders or Buyer.
If Seller and/or Shareholders fail to consummate the transactions
contemplated on their parts to occur on or before December 31, 1997, in
circumstances whereby all conditions of the Closing set forth in Section 8.2
have been satisfied in all material respects or waived, Buyer's sole remedy
shall be to (i) to require the Seller and/or Shareholders to consummate and
specifically perform the transactions contemplated hereby, in accordance with
the terms of this Agreement, and to obtain from the Seller and Shareholders any
attorney fees incurred in connection with procuring such specific performance or
(ii) terminate this Agreement and obtain reimbursement of its out-of-pocket
expenses incurred directly in connection with the negotiation, preparation and
performance of this Agreement.
If Buyer fails to consummate the transactions contemplated on its part
to occur on the Closing Date, in circumstances whereby all conditions of the
Closing set forth in Section 8.1 have been satisfied in all material respects or
waived, Seller's and Shareholders' sole remedy shall be to (i) to require Buyer
to consummate and specifically perform the transactions contemplated hereby, in
accordance with the terms of this Agreement, and to obtain from Buyer any
attorney fees incurred in connection with procuring such specific performance or
(ii) terminate this Agreement and obtain reimbursement of its out-of-pocket
expenses incurred directly in connection with the negotiation, preparation and
performance of this Agreement.
10.3 RIGHT TO PROCEED. Notwithstanding anything in this Agreement to
the contrary, if any condition specified in Section 8.1 or 8.2 has not been
satisfied, the Seller, Shareholders and Buyer, in addition to any other rights
which may be available to them, shall have the right to waive any such condition
that is for their benefit and to require the other party hereto to proceed with
the Closing.
XI. MISCELLANEOUS
11.1 EXPENSES. Legal, accounting and other costs and expenses incurred
in connection with this transaction shall be paid by the party incurring such
expenses.
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11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in or made in connection with this Agreement shall
survive the Closing.
11.3 INUREMENT; ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, legal representatives and, if properly assigned, assigns. This
Agreement may not be assigned by any party without the written consent of the
other parties hereto.
11.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Schedules and
Exhibits hereto, and the related agreements referred to herein embody the entire
agreement of the parties hereto, and supersede all prior agreements and
understandings, with respect to the subject matter hereof.
11.5 SEVERABILITY. Any provision of this Agreement which is invalid,
unenforceable or illegal in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such invalidity, unenforceability or
illegality without affecting the remaining provisions hereof and without
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
11.6 INCORPORATION OF EXHIBITS AND SCHEDULES. All Exhibits and
Schedules referenced in this Agreement, and any statements contained therein or
in any certificate or instrument delivered pursuant hereto, constitute an
integral part of this Agreement and shall be deemed made in this Agreement as if
set forth in full herein.
11.7 CAPTIONS AND HEADINGS; USE OF TERM "PERSON". Captions and headings
used herein are for convenience only, do not constitute a part of this
Agreement, and shall not be considered in construing this Agreement. Unless the
context otherwise requires, all article, section or subsection cross-references
are to articles, sections and subsections within this Agreement. As used herein,
the term "person" shall mean any corporation, partnership, venture,
proprietorship, trust, benefit plan or other entity or enterprise.
11.8 GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
11.9 NOTICE. All notices of requests, demands or other communications
required or to be given hereunder shall be delivered by hand, overnight courier,
facsimile transmission, or by United States Mail, postage prepaid, by registered
or certified mail (return receipt requested), to the addressed indicated below
and shall be deemed given when received by the addressee thereof:
to Seller: Superior Ice Company, Inc.
Attn.: Xxxx Xxxxx
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
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to Shareholders: Xxxx Xxxxx
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxx X. Xxxxx
00 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
to Buyer: Southwestern Ice, Inc.
Attn.: X.X. Xxxxx III, President
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Attn.: Xxxx Xxxxxxxxxx, P.C.
000 Xxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
or such other address or addresses as may be expressly designated by either
party by notice given in accordance with the foregoing provision.
11.10 AGENTS OR BROKERS. Buyer, Seller and Shareholders represent that
they have not retained or used, or will retain or use, the services of any
broker or finder which would result in the imposition of a fee upon any party
hereto.
11.11 TIME IS OF THE ESSENCE. Time is of the essence of this Agreement,
and all time limitations shall be strictly construed and rigidly enforced. The
failure or delay in the enforcement of any rights or interests granted herein
shall not constitute a waiver of any such right or interest or be considered as
a basis for estoppel.
11.12 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which shall constitute the
same instrument.
11.13 ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Rules of the American Arbitration
Association by a single arbitrator to be mutually agreed upon by the parties
hereto, to be located in San Antonio, Bexar County, Texas, and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof, and shall not be appealable.
[ASSET PURCHASE AGREEMENT SIGNATURE PAGE FOLLOWS]
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[ASSET PURCHASE AGREEMENT SIGNATURE PAGE]
Executed on the date first written above.
BUYER:
SOUTHWESTERN ICE, INC.
By: /s/ X.X. XXXXX III
------------------------------------------
X.X. Xxxxx III, President
SELLER:
SUPERIOR ICE COMPANY, INC.
By: /s/ XXXX XXXXX
------------------------------------------
Xxxx Xxxxx, President
SHAREHOLDERS:
/s/ XXXX XXXXX
---------------------------------------------
Xxxx Xxxxx
/s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx
