ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated September 16,
1997, is made by and among Xxxxxx Farms Incorporated, a Maryland corporation
("Buyer"), Venture Milling Company, a Delaware corporation ("Seller"), and
Xxxxxx Protein, Inc., a Delaware corporation and the sole stockholder of the
Seller ("Stockholder").
W I T N E S S E T H:
Seller is engaged in the production, marketing and sale of blended
proteins for feed ingredients (the "Business").
Seller and Buyer wish to enter into this Agreement which sets forth the
terms and conditions upon which Buyer agrees to purchase from Seller and Seller
agrees to sell to Buyer for the consideration stated herein substantially all of
the operating assets used or useful in the conduct of the Business.
In consideration of the direct and indirect benefits accruing to the
Stockholder as the stockholder of the Seller, the Stockholder has agreed to be a
party to this Agreement and confirm the Seller's representations and warranties
hereunder to the extent set forth herein in order to induce the Buyer to enter
into this Agreement, without which inducement the Buyer would not have entered
into this Agreement.
In consideration of the foregoing and of the covenants, agreements,
conditions, representations and warranties hereinafter contained, and intending
to be legally bound, Buyer, Seller and Stockholder hereby agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Assets Included. On the terms and subject to the conditions set
forth in this Agreement and in reliance on the representations and warranties of
Seller and the Stockholder, at the Closing (as defined in Section 3.1 hereof)
Buyer shall purchase from Seller, and Seller shall sell, assign, transfer and
deliver to Buyer, free and clear of any and all liabilities, judgments, pledges,
liens, tax liens, claims, charges, security interests, exceptions or
encumbrances whatsoever, except as disclosed in and permitted by this Agreement
(collectively, "Liens"), all right, title and interest of Seller in and to all
of the operating assets, rights and properties of Seller related to or used in
the Business, of every nature, kind and description, tangible and intangible,
wherever located, as of the date of this Agreement and as they exist on the
Closing Date (except properties and assets disposed of and accounts receivable
and notes receivable paid to Seller in full, each in the ordinary course of
business between the date of this Agreement and the Closing
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Date), including without limitation, the assets, rights and properties specified
below (collectively, the "Assets"):
(a) the parcel of real property consisting of approximately 10
acres in Bridgeville, Sussex County, Delaware and described in SCHEDULE 5.10
hereto (the "Bridgeville Property")
(b) all of Seller's leasehold improvements, furniture,
furnishings and fixtures, equipment, inventory, spare parts and supplies,
computer and other electronic systems, wherever the same are located, including,
without limitation, the equipment and other items listed on SCHEDULE 5.5 hereto;
(c) all of Seller's rights and interests in, to and under all
leases, contracts and other agreements, whether oral or written, to which the
Seller is a party and which are related to the Business and/or the Assets,
including, the agreements listed in SCHEDULE 5.8 hereto and any other agreements
of Seller existing on the Closing Date, except for any agreements that are
completed or terminated in the ordinary course of Seller's business between the
date hereof and the Closing Date (collectively, the "Assumed Contracts");
(d) all of Seller's trademarks, trade names and service marks,
including, without limitation, technology, all of Seller's rights and interests
to the name "Venture Milling Co., Ltd." and all variations thereon, and all
logos, designs, color patterns and schemes, phrases and other identifications of
or relating to the Business and/or the Business and the goodwill associated
therewith, and any and all licenses or other agreements relating to the use of
any of the foregoing, and all of Seller's trade secrets, patents, know-how,
including, feed formulations, proprietary computer software, telephone numbers
of each location, and any other intellectual property or proprietary
information, including, without limitation, the intellectual property or
proprietary information listed on SCHEDULE 5.13 hereto and any manuals,
applications, licenses or other agreements for any of the foregoing
(collectively, the "Intellectual Property");
(e) all of Seller's business records and files, customer lists,
correspondence, inventory and supply records, accounting records, computer
software, databases, vendor lists, sales records, personnel records,
advertising/marketing literature, materials and records, and all other books and
records relating to the Business and/or the Assets (but not including the
corporate records of Seller), that are located at the Company's facility in
Seaford, DE;
(f) all of Seller's unpaid accounts receivable as at the Closing
Date arising out of the operation of the Business by Seller in the ordinary
course, together with all other receivables of Seller, accrued and unpaid as at
the Closing Date (the "Accounts Receivable");
(g) all cash and cash equivalents,
(h) all of Seller's licenses, permits, franchises, consents,
approvals, qualifications and orders of governmental authorities and other
public or private authorizations
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relating to the Business and/or the Assets, to the extent transferable,
including, without limitation, the permits and other items set forth on SCHEDULE
5.9 hereto;
(i) all of Seller's outstanding prepaid expenses (to the extent
transferable and excluding insurance) and other prepaid items relating to any of
the Assets and/or the Business, and all other prepaid expenses paid by Seller
through the Closing Date.
1.2 Names Following the Closing. Immediately following the Closing,
Seller will file an amendment to its Articles of Incorporation changing Seller's
corporate name to a name that is not likely to cause confusion with the name
"Venture Milling Co., Ltd."
1.3 Assumption of Liabilities.
(a) Except and solely to the extent provided in Section 1.3(b)
below (the "Assumed Liabilities"), Buyer shall not assume, and shall not be
deemed by anything contained in this Agreement to have assumed, any Liens,
liabilities or obligations (contingent or otherwise) of any nature whatsoever,
warranties and/or guarantees of Seller (all such Liens, liabilities or
obligations, warranties and/or guarantees, the "Excluded Liabilities").
(b) On and subject to the terms of this Agreement, the Buyer
agrees to and shall only assume and become responsible for the following
liabilities and obligations of Seller on the Closing Date; provided, such
liabilities are not Excluded Liabilities (collectively, the "Assumed
Liabilities"):
(i) all liabilities of Seller relating to the Business to
the extent (and in the amount) specifically accrued for or reserved against in
the Most Recent Financial Statement (excluding any liabilities of Seller to
Stockholder and/or its affiliates under any lines of credit or notes payable);
and
(ii) all liabilities of Seller relating to the Business
which have arisen after the date of the Most Recent Financial Statement in the
normal and ordinary course of the Business (excluding any liabilities of Seller
to Stockholder and/or its affiliates under any lines of credit or notes payable,
and other than any liability resulting from, arising out of, relating to, in the
nature of, or caused by any breach of contract, tort, infringement, or other
violation of law); and
(iii) all obligations of Seller accruing under the Assumed
Contracts after the Closing Date; provided, however, it is specifically
understood and agreed that Buyer shall not assume nor become responsible for any
liability or obligation of Seller under the Assumed Contracts that arose or
otherwise accrued on or prior the Closing Date unless such liability is
specifically accrued for or reserved against in the Most Recent Financial
Statement; provided further, however, it is also specifically understood and
agreed that the lease with Southern States (the "Southern States Lease")
pursuant to which the Seller leases certain real property located in Seaford, DE
(the "Seaford Leased Property") is not an Assumed Contract and Buyer shall
assume no liabilities or obligations thereunder.
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2. PURCHASE PRICE
2.1 Purchase Price. In reliance on the representations, warranties and
covenants set forth herein and in consideration of sale of the Assets, the Buyer
shall pay the following consideration (the items provided for in (a) and (b)
below are collectively referred to as the "Purchase Price"):
(a) Pay to the Seller the purchase price of One Hundred and
Eighty Thousand Dollars ($180,000), as adjusted in accordance with the
provisions of Section 2.2 below (the "Cash Purchase Price"); such amount shall
be wire transferred in immediately available funds to an account designated in
writing by Seller at Closing; and
(b) Assume the Assumed Liabilities.
2.2 Determination of Net Book Value Purchased; Post-Closing Purchase Price
Adjustment.
(a) Notwithstanding the above, it is understood that the Cash
Purchase Price is based on a Net Book Value Purchased as of July 31, 1997 (as
determined pursuant to and otherwise defined in Schedule 2.2 attached hereto) of
$347,344 which specifically excludes the amount of $180,000 which is claimed by
Buyer for undelivered product, which amount is not reflected on the Most Recent
Financial Statements. As promptly as practicable following the Closing, and in
any event not later than fifteen (15) days after the Closing Date, the Seller
shall close the books of the Seller as of the Closing Date, and shall prepare
and deliver to the Buyer a summary, with supporting calculations and detail, of
the Net Book Value Purchased as of the Closing Date (the "Closing Net Book Value
Purchased"). The Closing Net Book Value Purchased shall be calculated in the
manner of the Net Book Value Purchased calculation as at July 31, 1997 attached
hereto. If the Closing Net Book Value Purchased is less than $347,344, the
Seller shall promptly pay to the Buyer an amount in cash equal to such negative
difference (to be treated as a reduction in the Cash Purchase Price). If the
Closing Net Book Value Purchased is more than $347,344, the Buyer shall promptly
pay to the Seller an amount in cash equal to such positive difference (to be
treated as additional Cash Purchase Price). No payments shall be required
hereunder if the Closing Net Book Value Purchased is equal to $347,344. Any
dispute with respect to the calculation of the Closing Net Book Value Purchased
shall be conducted in the manner described in subsection (b) below.
(b) (i) The Buyer may dispute the Closing Net Book Value
Purchased by notifying the Seller in writing setting forth, in reasonable detail
to the extent possible, the amount(s) in dispute and the basis for such dispute,
within 10 business days of the Buyer's receipt of the Closing Net Book Value
Purchased. In the event of such a dispute, the Buyer and the Seller shall
attempt in good faith to resolve such dispute, and any resolution by them as to
any disputed amount(s) shall be final, binding and conclusive on the Buyer and
the Seller.
(ii) If the Seller and the Buyer do not resolve any such
dispute within 10 business days of the date of receipt by the Seller of the
Buyer's written notice of dispute, the
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Buyer and the Seller shall, within 3 additional business days, submit any such
unresolved dispute to an independent accounting firm of national reputation
appointed jointly by the Buyer and the Seller (neither of which may unreasonably
withhold or delay such appointment) (the "Independent Accounting Firm"), which
firm shall, within 30 business days of each such submission, resolve such
remaining dispute, and such resolution shall be binding and conclusive on the
Buyer and the Seller. The fees and disbursements of the Independent Accounting
Firm shall be borne by the Seller and the Buyer in the proportion that the
aggregate amount of disputed item submitted to the Independent Accounting Firm
that is unsuccessfully disputed by each such party (as finally determined by the
Independent Accounting Firm) bears to the total amount of such remaining
disputed item so submitted.
(iii) The Closing Net Book Value Purchased, adjusted for
the resolution of any and all disputes pursuant to subsection (i) or (ii) above,
will be deemed to be the Closing Net Book Value Purchased for purposes of (a)
above upon the later of (A) the lapse of the 20 day period referred to in
subsection (b)(i) above, (B) to the extent any amount is still in dispute, the
lapse of the 10 day period referred to in subsection (b)(ii) above or (C) such
later date upon which all disputes submitted to the Independent Accounting Firm
pursuant to subsection (b)(ii) above have been resolved.
2.3 Allocation of the Purchase Price. The Purchase Price shall be
allocated by the Buyer in its sole discretion; such allocation to be delivered
to the Seller within ninety (90) days after the Closing Date. The parties agree
to make consistent use of the Buyer's allocation. Also, to the extent required
by law, the Seller and the Buyer shall each complete, execute and timely file
with the Internal Revenue Service with its respective income tax return for the
taxable year that includes the Closing Date, an Internal Revenue Service Form
8594 (or such other Internal Revenue Service Form as may then be prescribed for
use by applicable Income Tax Regulations) to comply with the applicable asset
acquisition reporting requirements of Section 1060 of the Code and the Income
Tax Regulations thereunder. Form 8594 shall be completed by the Seller and the
Buyer based on, and shall in all events be consistent with, the allocation of
the Purchase Price among the Assets as determined by the Buyer.
3. CLOSING.
3.1 Time and Place. Subject to earlier termination of this Agreement
pursuant to Section 11 below, the closing of the transactions contemplated
hereunder (the "Closing") shall take place on September 16, 1997 at 9:00 a.m.,
or such other date as the parties may agree, at the offices of Piper & Marbury
L.L.P., 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000. The time and date of
the Closing are herein referred to as the "Closing Date," and the term "Closing
Date" shall include the date on which the transactions contemplated hereunder
are consummated.
3.2 Deliveries by the Buyer. At the Closing, the Buyer shall deliver or
cause to be delivered to the Seller, or to such other person or persons as
required by this Agreement, the following:
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(a) the Purchase Price in the manner provided under Section
2.1(a) hereof;
(b) a General Assignment and Xxxx of Sale in a form' reasonably
acceptable to the parties (the "Xxxx of Sale");
(c) an Assignment and Assumption Agreement in a form reasonably acceptable
to the parties (the "Assignment Agreement");
(d) certificate of the Secretary of the Buyer showing the
signatures of those officers of the Buyer authorized to sign this Agreement and
other agreements and instruments provided for herein on behalf of the Buyer and
certifying that said signatures are the signatures of said authorized officers;
(e) a certificate, dated as of the Closing Date, executed by a
duly authorized officer of the Buyer, certifying that (i) all of the
representations and warranties made by the Buyer under this Agreement and the
Schedules hereto and under all other documents given or delivered by the Buyer
pursuant hereto are accurate, true and complete, and (ii) all of the covenants,
obligations and conditions to be performed as of the Closing Date on the Buyer's
part have been duly performed;
(f) a certificate of Good Standing of the Buyer issued by the
appropriate authority in Maryland as of a date recently preceding the Closing
Date; and
(g) all other documents reasonably necessary or appropriate to
effectuate the purchase and sale of the Assets and the assumption of the Assumed
Liabilities as of the Closing Date.
3.3 Deliveries by Seller. At the Closing, the Seller shall deliver or
cause to be delivered to the Buyer (unless previously delivered) the following:
(a) the Xxxx of Sale;
(b) the Assignment Agreement;
(c) consents to the assignment and assumption of the Assumed
Contracts set forth in SCHEDULE 5.8 hereto;
(d) UCC-3 termination statements, together with any other
releases or consents to the transfer of the Assets reasonably deemed necessary
by the Buyer, executed by the respective creditors of the Seller, terminating
any Liens on the Assets;
(e) certificates of the Secretary of each of the Stockholder and
the Seller showing the signatures of those officers authorized to sign this
Agreement and other agreements and instruments provided for herein on behalf of
the Stockholder and the Seller, as the case may be, and certifying that said
signatures are the signatures of said authorized officers;
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(f) a copy of the resolutions adopted by the Stockholder and
directors of the Seller, certified by the Secretary of the Stockholder and the
Seller, as the case may be, as having been duly and validly adopted and as being
in full force and effect on the date hereof, authorizing the execution and
delivery by the Stockholder and the Seller, as the case may be, of this
Agreement and other agreements and instruments executed and delivered by the
Stockholder and the Seller, as the case may be, as provided for herein, and the
performance by the Stockholder and the Seller, as the case may be, of the
transactions contemplated hereby and thereby;
(g) a certificate, dated as of the Closing Date, executed by a
duly authorized officer of the Seller, certifying that (i) all of the
representations and warranties made by the Seller (with the Stockholder) under
this Agreement and the Schedules hereto and under all other documents given or
delivered by the Seller pursuant hereto are accurate, true and complete, and
(ii) all of the covenants, obligations and conditions to be performed as of the
Closing Date on the Seller's part have been duly performed;
(h) a certificate, dated as of the Closing Date, executed by a
duly authorized officer of the Stockholder, certifying that (i) all of the
representations and warranties made by the Stockholder (with the Seller) under
this Agreement and the Schedules hereto and under all other documents given or
delivered by the Stockholder pursuant hereto are accurate, true and complete,
and (ii) all of the covenants, obligations and conditions to be performed as of
the Closing Date on the Stockholder's part have been duly performed;
(i) a Certificate of Good Standing of Seller issued by the
Secretary of State of Delaware as of a date recently preceding the Closing Date;
(j) a certificate, dated as of the Closing Date, executed by a
duly authorized officer of the Seller, certifying that the information
referenced in SCHEDULE 2.2 hereto is accurate, true and complete; and
(k) all other documents reasonably necessary or appropriate to
effectuate the purchase and sale of the Assets and the assumption of the Assumed
Liabilities as of the Closing Date, including, without limitation, a special
warranty deed for the transfer of the Owned Real Property.
3.4 Other Deliveries and Actions. At the Closing, the
Seller shall pay any transfer, registration, recording or other taxes payable in
connection with the transfer of the Assets hereunder.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
The Buyer represents and warrants to the Seller that the statements
contained in this Section 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 4).
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4.1 Organization and Good Standing. The Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Maryland.
4.2 Authority. The Buyer has the full right, power and authority to (a)
own, lease or operate all of its properties and assets and to carry on its
business as and where it is now being conducted, and (b) execute, deliver and
perform this Agreement and each other transaction document to which it is a
party. The Buyer has the corporate power and authority and has taken all
necessary corporate action, to execute, deliver and perform this Agreement and
each other transaction document to which it is a party. This Agreement has been,
and when executed and delivered by the Buyer at the Closing shall be, duly
executed and delivered by the Buyer and, assuming the due execution and delivery
by the Seller and the Stockholder, constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the
rights of creditors generally and the exercise of judicial discretion in
accordance with general principles of equity.
4.3 Validity of Contemplated Transactions; Consents and Approvals. The
execution, delivery and performance by the Buyer of this Agreement and each
other transaction document to which it is a party, and the transactions
contemplated hereby and thereby, will not (a) contravene or violate the Articles
of Incorporation or Bylaws of the Buyer or any applicable judgment, decree,
order, regulation or law that is binding on or applicable to the Buyer; (b)
result in a violation or default under, termination or modification of, or
conflict with, or permit the acceleration of any obligation under, or require
the consent or approval of any party to, any material contract or other
instrument to which the Buyer is a party; or (c) require the Buyer to give
notice to, make any filing with, or obtain any permit, authorization, consent or
approval from, any federal, state, local or other governmental court, agency or
body or other public authority, or third party.
4.4 Broker's and Finder's Fees. Neither the Buyer nor any of its
directors, stockholders, employees or affiliates has, on behalf of Buyer,
employed any broker, finder, or financial advisor or incurred any liability for
any brokerage fee or commission, finder's fee or financial advisory fee, in
connection with the transactions contemplated hereby, nor is there any basis
known to the Buyer for any such fee or commission to be claimed by any person or
entity. The Buyer agrees to indemnify and hold harmless the Seller and the
Stockholder from any and all fees due to any broker, finder, or consultant,
retained by or claiming through or under the Buyer or any of the Buyer's
directors, stockholders, employees or affiliates with respect to the transaction
contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES OF SELLER.
The Seller and the Stockholder, jointly and severally, represent and
warrant to the Buyer that the statements contained in this Section 5 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement through this Section 5).
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5.1 Organization and Good Standing. The Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.
5.2 Authority. (a) The Seller has the full right, power and authority to
(i) own or lease all of the properties and assets owned or leased by it and to
conduct the Business as the same is now being conducted and has been conducted
for all periods prior to the Closing Date, and (ii) execute, deliver and perform
this Agreement and each other transaction document to which it is a party. This
Agreement has been duly executed and delivered by the Seller and, assuming the
due execution and delivery by the Stockholder and the Buyer, constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws affecting the rights of creditors generally and the exercise of
judicial discretion in accordance with general principles of equity.
(b) The Stockholder also has the full right, power and authority to
execute, deliver and perform this Agreement and each other transaction document
to which it is a party. This Agreement has been duly executed and delivered by
the Stockholder and, assuming the due execution and delivery by the Seller and
the Buyer, constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting the rights of creditors
generally and the exercise of judicial discretion in accordance with general
principles of equity.
5.3 Validity of Contemplated Transactions; Consents and Approvals. The
execution, delivery and performance by the Seller of this Agreement and each
other transaction document to which it is a party, and the transactions
contemplated hereby and thereby, will not contravene or violate the Articles of
Incorporation or Bylaws of the Seller or any applicable judgment, decree, order,
regulation or law that is binding on or applicable to the Seller, the Business
and/or any of the Assets or, except as set forth in SCHEDULE 5.3 and except
where such default, termination modification, conflict, acceleration, consent,
failure to give notice or to file or obtain any consent to the imposition of any
Lien would not, either individually or in the aggregate, have a material adverse
effect on the Business or any of the Assets or on the ability of the parties to
consummate the transactions contemplated by this Agreement, (a) result in a
violation or default under, termination or modification of, or conflict with, or
permit the acceleration of any obligation under, or require the consent or
approval of any party to, any Assumed Contract; (b) require the Seller to give
notice to, make any filing with, or obtain any permit, authorization, consent or
approval from, any federal, state, local or other governmental court, agency or
body or other public authority, or third party; or (c) result in the creation or
imposition of any Liens upon the Business or any of the Assets (except Liens
imposed by or through the Buyer). The Seller has made all material filings and
notifications required to be made by it under such laws, ordinances and
regulations.
(b) The execution, delivery and performance by the Stockholder of this
Agreement and each other transaction document to which it is a party, and the
transactions contemplated hereby and thereby, will not contravene or violate the
Articles of Incorporation or Bylaws of the
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Stockholder or any applicable judgment, decree, order, regulation or law that is
binding on or applicable to the Stockholder.
5.4 Compliance with Regulations and Court Orders. To the best of
Seller's knowledge, the Seller, and the ownership, use and operation by the
Seller, or any other person or entity, of the Business or any of the Assets, is
in material compliance with all, and is not in material violation of any, (i)
applicable Federal, state, local and foreign laws, ordinances and regulations,
or (ii) applicable court order or other legal restriction binding upon the
Business or any of the Assets.
5.5 All Assets; Title to and Condition of Personal Property; Third-Party
Rights.
(a) SCHEDULE 5.5 sets forth a summary of all material assets of
Seller of the type described in Section 1.1(a) as of September 15, 1997
identified by location.
(b) The Assets constitute substantially all of the assets used in
the conduct of the Business, and no affiliate of the Seller or any other person
or entity owns or has any other interest in the Assets. The Seller is the owner
of and has good and marketable title to all of the Assets, free and clear of all
Liens, except (i) to the extent reflected in the Most Recent Financial
Statements (as defined below), as applicable, (ii) for Liens set forth on
SCHEDULE 5.5, and (iii) for mechanics', carriers', workmen's, repairmen's or
other similar Liens arising from or incurred in the ordinary course of business
consistent with past practices (the Liens described in clauses (i) through (iii)
above are hereinafter referred to collectively as, "Permitted Liens"). There are
no existing contracts or agreements with, or rights in, any third party to
acquire any of the Assets or any interest therein.
5.6 Litigation and Claims. (a) To the best of Seller's knowledge, and
except for the litigation titled "Papillon Agricultural Products v. Venture
Milling Company, Ltd.," which is not an Assumed Liability hereunder, there are
no claims, litigation or other action, at law or in equity, arbitration
proceeding, governmental proceeding or investigation, pending or, to the best of
the Seller's knowledge, threatened, against the Business or any of the Assets or
the transfer of the Assets hereunder; and the Seller is not, with respect to the
Business and/or any of the Assets, subject to any order of any court, regulatory
commission, board or administrative body entered in any proceeding to which it
is or was a party and which is binding upon the Business or any of the Assets as
of the date hereof.
(b) To the best of Seller's knowledge, the transfer of the Assets
hereunder and the operation and maintenance of the Business and/or any of the
Assets by the Seller do not materially contravene or violate any ordinance or
other administrative regulation or any provision of applicable law or rule,
regulation, order or direction of any judicial, administrative or other
governmental authority having jurisdiction which is now in effect or which has
been enacted, issued or adopted and is binding upon the Business or any of the
Assets as of the date hereof.
5.7 Financial Statements; Undisclosed Liabilities. Attached hereto as
SCHEDULE 5.7 are the unaudited balance sheet and statement of income or loss for
the period ended July 31, 1997
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(the "Most Recent Financial Statements"). The Most Recent Financial Statements
consistently and fairly present the financial position and results of operations
of the Business in all material respects as at the dates and for the periods
covered. Except as set forth on SCHEDULE 5.7, the Seller does not have any
liabilities or obligations, except for (i) liabilities or obligations set forth
on the face of the Most Recent Financial Statements, and (ii) liabilities or
obligations incurred in the ordinary course of business which have risen after
the Most Recent Financial Statements. The Accounts Receivable represent valid
obligations arising from sales actually made or services actually performed by
Seller in the ordinary course of business, with appropriate evidence of sales
made and services performed maintained by Seller, and are collectible in the
amounts set forth on the Financial Statements.
5.8 Contracts. (a) SCHEDULE 5.8 hereto lists with respect to the
Business and/or any of the Assets, the following written or oral agreements to
which the Business or any of the Assets is party or subject: (i) contracts,
agreements or obligations that are (A) for a term of more than 30 days and
cannot be terminated within 30 days, or (B) entered into outside the ordinary
course of business; (ii) real property leases; (iii) personal property leases;
(iv) employment contracts with any consultant or employee; (v) instruments
creating any Liens or evidencing or relating to indebtedness for borrowed money;
(vi) contracts containing covenants not to enter into or consummate the
transactions contemplated hereby; (vii) contracts restricting the Seller's
ability to compete in any geographic region in any line of business; (viii)
confidentiality or similar agreements, pursuant to which the Seller or employee
thereof is restricted from using or disclosing any information; (ix) franchise,
manufacturer's representative, distributorship or similar agreements (including
with Buyer or an affiliate of Buyer); or (x) contracts, agreements or
obligations that involve or would involve annual payments by the Seller or
receipts by the Seller of more than $25,000. All of the contracts, agreements
and obligations that are material to the Business and/or any of the Assets are
listed in SCHEDULE 5.8.
(b) Except as disclosed on SCHEDULE 5.8, each Assumed Contract
has been entered into in the ordinary course of business, is legal, valid,
binding and enforceable in accordance with its terms, is in full force and
effect, and will continue to be legal, valid, binding and enforceable and in
full force and effect on identical terms following the consummation of the
transactions contemplated herein. The Seller is not in default in any material
respect under any Assumed Contract. Except as noted on SCHEDULE 5.8, and to the
knowledge of Seller, all parties to the Assumed Contracts have complied in all
material respects with the provisions thereof, no party is in default, or has
received notice of default, thereunder, or no event has occurred that, but for
the passage of time or the giving of notice or both, would constitute a default
thereunder, and the Seller has neither given nor received any notice of
cancellation or termination thereunder.
5.9 Licenses. SCHEDULE 5.9 sets forth a list of all of the Seller's
licenses, permits, franchises, consents, approvals, authorizations,
qualifications and orders of governmental authorities relating to the Business
and/or any of the Assets (the "Permits"), and such Permits constitute all
material licenses, permits, franchises, consents, approvals, authorizations,
qualifications and orders of governmental authorities necessary to conduct the
Business and to operate and/or use the Assets as such is now being conducted,
operated and used. The Seller has
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paid all fees and charges due in connection with the Permits, and all such
Permits are in full force and effect in all material respects. The Seller is in
substantial compliance with, and has not received notice of any noncompliance
with respect to, the terms and conditions of any such Permit in any case where
noncompliance could have a material adverse effect on the Business and/or any of
the Assets, and no proceeding is pending or, to the knowledge of Seller,
threatened to revoke or limit any such Permit.
5.10 Real Property. (a) The Bridgeville Property is the only real
property and/or interest in real property owned in fee by the Seller (for
purposes of this Section 5.17, the "Owned Real Property"). The Seaford Leased
Property is the only real property and/or interest in real property leased by
the Seller (for purposes of this Section 5.11, the "Leased Real Property";
collectively, with the Owned Real Property, the "Real Properties"). SCHEDULE
5.10 hereto sets forth the address and legal description of the Real Properties
and identifies any consents required in connection with the consummation of the
transactions contemplated by this Agreement. True and correct copies of (i) the
deeds for the Owned Real Property and (ii) the Southern States Lease, as the
same have been amended, modified or supplemented, have been delivered to the
Buyer by the Seller. All of the real property used in, held for use by or
related to the Business is set forth in SCHEDULE 5.10 hereto.
(b) The Seller has good and marketable fee simple title to the
Owned Real Property. The Owned Real Property is free and clear of all Liens of
any nature except (A) Liens set forth on Buyer's title policy, (B) Liens for
taxes, special assessments or governmental charges or levies if the same shall
not yet be due and payable, (C) Liens to secure indebtedness reflected on the
Financial Statements; and (D) mechanic's, materialmen's and other similar Liens
that have arisen in the ordinary course of business in respect of obligations
which are not delinquent or material in amount (collectively, "Permitted
Liens"). The Seller has not entered into any contract, arrangement or
understanding with respect to the future ownership, development, use, occupancy
or operation of any of the Real Property. The Seller has the right to use and
operate each Real Property in the manner currently being used and operated. To
the best of Sellers' knowledge, no facts exist which affect, or will affect
after Closing, such rights of use and operation.
(c) To the best of Seller's knowledge, each Real Property and the
operation of the Business thereon as currently being operated complies in all
material respects with all Laws (including, without limitation, zoning laws).
(d) No notice of violation of Law has been received by the Seller
or, to the best of the Seller's knowledge, has been issued by any Governmental
Authority with respect to any Real Property.
5.11 Environmental Matters. (a) To the best of Seller's knowledge, and
except as set forth on SCHEDULE 5.11 hereto, the Seller is in compliance in all
material respects with all applicable Environmental Laws, which compliance
includes, but is not limited to, the possession by the Seller of all permits and
other governmental authorizations necessary to operate the Seller
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as it is currently being operated or as required under applicable Environmental
Laws, and material compliance with the terms and conditions thereof. The Seller
has not received any communication (written or oral), whether from an applicable
authority, citizens group, employee or otherwise, that alleges that the Seller
is not in such compliance in all material respects.
(b) To the best of Seller's knowledge, there are no private
agreements or administrative or judicial judgments, orders, or decrees against
the Seller that relate to violations of or liability under Environmental Law
with respect to the Business or to the Release, discharge, emission or disposal
of Hazardous Materials on or under Real Properties.
(c) To the best of Seller's knowledge, there have been no
Releases, discharges, emissions or disposal of Hazardous Materials by the Seller
on or under the Real Property that have not been remediated to the satisfaction
of the applicable authority with jurisdiction over said Release, discharge,
emission or disposal. To the best of Seller's knowledge, neither the business of
the Seller nor the Real Property is nor contains a treatment, storage, or
disposal facility as defined by the federal Resource Conservation and Recovery
Act, 42 U.S.C. 'SS' 6901 et seq. or the analogous state law. No notice has been
given to the Seller or Seller that the Seller, the Seller or the Buyer, will be
required to conduct closure, post closure, or corrective action with respect to
the Real Property or the Business pursuant to the Resource Conservation and
Recovery Act or the analogous state law, as a result of activities at the Real
Property or the Business prior to the Closing Date.
(d) To the best of Seller's knowledge, (i) all on-site locations
where Hazardous Materials have been disposed of or released by the Seller are
identified in SCHEDULE 5.11 hereto, (ii) all underground storage tanks, and the
capacity and contents of such tanks, located or formerly located on the Real
Property, are identified in SCHEDULE 5.11 hereto, and (iii) except as set forth
in SCHEDULE 5.11 hereto, no polychlorinated biphenyls are used or stored on the
Real Property.
(e) For purposes of this Agreement, (i) "Environmental Law" means
all applicable current federal, state and local statutes, laws, ordinances,
rules, regulations, decrees, judgments, orders and common law decisions relating
to pollution or protection of the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata, or
natural resources) including, without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of Hazardous Materials
(including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. 'SS''SS' 9601 et seq.; the
Solid Waste Disposal Act, 42 U.S.C. 'SS''SS' 6901 et seq.; the Emergency
Planning and Community Right-To-Know Act of 1986, 42 U.S.C. 'SS''SS' 11001 et
seq.; the Toxic Substances Control Act, 15 U.S.C. 'SS''SS' 2601 et seq. the
Federal Water Pollution Control act, 33 U.S.C. 'SS''SS' 1251 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. 'SS''SS' 1801 et seq.; and
the Clean Air Act, 42 U.S.C. 'SS''SS' 7401 et seq.; (ii) "Hazardous
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Materials" shall mean any waste (including solid wastes), toxic substance,
hazardous substance, pollutant, contaminant, oil, asbestos, polychlorinated
biphenyl, and non-indigenous radioactive material, as defined and within the
context used under any Environmental Law; and (iii) "Release" means any release,
spill, emission, discharge, leaking, pumping, pouring, emptying, escaping,
injection, deposit or disposal into the environment (including, without
limitation, ambient air, surface water, groundwater, and surface or subsurface
strata) or into or out of any property, including the movement of Hazardous
Materials through or in the air, soil, surface water, groundwater or property.
5.12 Inventory. The Inventory is in good condition and consists of items
of quantity, valued at cost and quality usable and salable in the ordinary
course of business.
5.13 Intellectual Property.
(a) SCHEDULE 5.13 lists: (i) all trademarks, trade names,
trademark license agreements, logos, trade styles, service marks, and other
sources of business identifiers of the Business , including for each such
registered xxxx, name, etc., the application or registration number, country,
filing or registration and expiration date; (ii) all other intellectual
property, whether owned by or licensed to the Seller, used in the Business; and
(iii) all licenses and other contracts to which the Seller is a party (either as
licensor, licensee, sublicensor or sublicensee) and which affects the validity
of or right to use the Marks, trade secrets or other proprietary information
used in or relating to the Business.
(b) The Seller has good, valid, subsisting, unexpired and
enforceable title to, or otherwise possesses adequate rights to use, all
Intellectual Property listed in SCHEDULE 5.13. To the knowledge of the Seller,
no governmental authority has rendered any holding, decision or judgment that
would limit, cancel or question the validity of any of the Intellectual
Property, and there has not been any administrative, judicial, arbitration or
other adversary proceedings concerning the Intellectual Property. The Seller is
not a party to any license or agreement whether as licensee, licensor or
otherwise, with respect to any of the Intellectual Property.
(c) To the knowledge of the Seller, no assets, properties or
rights of the Seller or used in the Business have infringed upon any patent,
trademark, trade name, copyright, or other intellectual property, or
misappropriated or misused any invention, trade secret or other proprietary
information of another person entitled to legal protection. Except as set forth
in SCHEDULE 5.13, to the knowledge of the Seller, no person has asserted any
claim regarding the use of, or challenging or questioning the Seller's right or
title in, any Intellectual Property, or challenging or questioning the validity
or effectiveness of any license, contract or commitment relating thereto, and
the Seller does not know of any valid basis for any such claim.
5.14 Brokers. Neither the Seller, nor any of its directors,
stockholders, employees or affiliates has, on behalf of the Seller, has employed
any broker, finder, or financial advisor or incurred any liability for any
brokerage fee or commission, finder's fee or financial advisory fee, in
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connection with the transactions contemplated hereby, nor is there any basis
known to the Seller for any such fee or commission to be claimed by any person
or entity.
5.15 Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SELLER MAKES
NO OTHER WARRANTIES OR REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WHICH
WARRANTIES ARE HEREBY DISCLAIMED.
5.16 Knowledge of Seller. For purposes of this Section 5, the Seller or
the Stockholder will be deemed to have "knowledge" of a particular fact or other
matter if such fact or matter is set forth in a written letter, agreement or
other document provided to or in the possession of either the Seller or the
Stockholder, or if any executive or officer of either the Seller or the
Stockholder (excluding Xxxxxx X. Xxxxxx, Xx.), after due inquiry with respect to
each such executive or officer's areas of responsibility, had actual knowledge
of such particular fact or other matter.
6. COVENANTS.
6.1 Access to Information.
(a) Following the execution of this Agreement and prior to the
Closing Date, the Buyer and its counsel, accountants and representatives will
have full access during normal business hours to all of the offices, books,
records, employees and customers of the Seller, and the Seller will promptly
furnish to the Buyer copies of or access to all documents and information
concerning the properties and affairs of the Business that the Buyer may
reasonably request. The Seller will provide reasonable access for the Buyer to
key employees of the Seller and to other employees provided that confidentiality
regarding the transactions contemplated hereby is maintained. The Buyer will use
its best efforts to conduct its review of information with minimal disruption to
the Seller's operations.
(b) After the Closing, both the Buyer and the Seller will
cooperate with the other to provide the other, upon written request, with access
to books and records pertaining to the Business, the Assets and the Seller prior
to the Closing Date to the extent such information is reasonably required by the
other party in the conduct of the Business (including for the preparation of tax
information), in connection with the ownership and use of the Assets or
otherwise, at no cost to the party providing the information.
6.2 Conduct of Business. Following the execution of this Agreement and
prior to the Closing Date, the Seller will operate the Business only in
accordance with its usual and customary business practices. Seller agrees that
it will not enter into any contract or commitment, increase any expenditures,
waive any rights or enter into any other transaction affecting the Business
other than in the ordinary course of business and in conformity with past
practices.
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6.3 Consents and Conditions. Following the execution of this Agreement
and prior to the Closing Date, the parties agree to use their best efforts to
cause all of the conditions to the consummation of this Agreement to be
fulfilled, including obtaining all necessary consents to the assignment of the
Assumed Contracts. Buyer agrees to reasonably cooperate with Seller in respect
of the such consents.
6.4 Use of Best Efforts. Each of Seller and Buyer will use its
reasonable best efforts to take all action and to do all things necessary in
order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the conditions to Closing
set forth in Sections 9 and 10).
6.5 Accounts Receivable Obligors. The Seller shall cooperate with the
Buyer in making all necessary or desirable arrangements so that, at no cost to
the Sellers, checks and other payments on Accounts Receivable may be deposited
into the Buyer's bank accounts after Closing without endorsement by the Seller.
6.6 Insurance. The Seller shall continue insurance coverage on the
Assets in full force and effect to and including the Closing Date.
6.7 Other Covenants.
(a) On and after the Closing Date, Buyer agrees to perform and
comply with all the terms, provisions, covenants and conditions of the Assumed
Liabilities.
(b) On and after the Closing Date, Seller agrees to perform and
comply with all the terms, provisions, covenants and conditions of the Excluded
Liabilities.
6.8 Payment of Taxes. The Buyer shall pay all taxes incurred in
connection with the transfer of the Assets from the Seller to the Buyer.
7. INDEMNIFICATION AND SURVIVAL.
7.1 Indemnification by Seller and the Stockholder. Subject to the
limitations set forth in this Section 7.1, the Seller and the Stockholder,
jointly and severally, hereby agree to indemnify the Buyer against, and agree to
protect, save and keep harmless the Buyer from, and hereby assumes liability
for, the payment of all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, judgments, settlements, out-of-pocket costs, expenses
and disbursements (including reasonable costs of investigation, and reasonable
attorney's and accountant's fees) of whatever kind and nature arising in any
manner or under any circumstances that may be imposed on or incurred by the
Buyer as a consequence of or in connection with the following:
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(a) any breach by the Seller and/or the Stockholder of their
representations or warranties contained in this Agreement (except
representations or warranties relating to Excluded Liabilities, which are
covered by (d) below);
(b) any failure by the Seller and/or the Stockholder to perform
their respective covenants or agreements contained in this Agreement (except
covenants or agreements relating to Excluded Liabilities, which are covered by
(d) below);
(c) the failure of the parties to comply with any applicable bulk
sales or transfer laws, except as to liabilities and obligations specifically
assumed by the Buyer under this Agreement; or
(d) the Excluded Liabilities.
The indemnification and defense obligations of the Seller and the
Stockholder set forth in Sections 7.1(a) and 7.1(b), as well as the related
representations, warranties, covenants and agreements, shall survive the Closing
hereunder for a period of two years, except that the representations and
warranties with regard to taxes (as well as the related indemnification and
defense obligations of the Buyer) shall survive for the period of the applicable
statute of limitations and the representations and warranties with regard to the
Seller's title to the Assets (as well as the related indemnification and defense
obligations of the Buyer) shall survive the Closing indefinitely. In addition,
the Seller's and the Stockholder's aggregate and collective indemnification
obligations under Sections 7.1(a) and 7.1(b) shall be limited to the Purchase
Price. Notwithstanding anything contained herein to the contrary, (i) the
expiration of the period referred to above shall not serve to terminate or
otherwise affect any pending claim against the Seller or the Stockholder for
indemnification, or the Seller's indemnity obligation with respect to such
claim; and (ii) the indemnification and defense obligations of the Seller and
the Stockholder set forth in Sections 7.1(c) and 7.1(d), as well as the related
representations, warranties, covenants and agreements, including the agreements
of the Seller set forth in Section 1.3(a), shall survive the Closing
indefinitely.
7.2 Indemnification by Buyer. Subject to the limitations set forth in
this Section 7.2, the Buyer agrees to indemnify the Seller and the Stockholder
against, and agrees to protect, save and keep harmless the Seller and the
Stockholder from, and hereby assumes liability for, the payment of all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
judgments, settlements, out-of-pocket costs, expenses and disbursements
(including reasonable costs of investigation, and reasonable attorney's and
accountant's fees) of whatever kind and nature arising in any manner or under
any circumstances that may be imposed on or incurred by the Seller as a
consequence of or in connection with:
(a) any breach by the Buyer of any representation or warranty
contained in this Agreement (except representations or warranties relating to
Assumed Liabilities, which are covered by (c) below);
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s
(b) any failure by the Buyer to perform any covenant or agreement
contained in this Agreement (except covenants or agreements relating to Assumed
Liabilities, which are covered by (c) below); or
(c) any of the Assumed Liabilities.
The indemnification and defense obligations of the Buyer set forth in
Sections 7.2(a) and 7.2(b), as well as the representations, warranties,
covenants and agreements contained in this Agreement, shall survive the Closing
hereunder for the period set forth in Section 7.1 in respect of the Seller.
Notwithstanding anything contained herein to the contrary, (i) the expiration of
the period referred to above shall not serve to terminate or otherwise affect
any pending claim against the Buyer for indemnification, or the Buyer's
indemnity obligation with respect to such claim; and (ii) the indemnification
and defense obligations of the Buyer set forth in Section 7.2(c), as well as the
related representations, warranties, covenants and agreements, including the
agreements of the Buyer set forth in Section 1.3(b), shall survive the Closing
indefinitely.
7.3 Procedure for Indemnification - Non-Third Party Claims.
(a) If at any time a party asserts that it is entitled to
indemnification under Section 7.1 or 7.2 above in respect of a loss not
involving a Third-Party Claim (as defined in Section 7.4) (such party being
referred to as an "Indemnitee" and such assertion being referred to as a
"Claim"), the Indemnitee shall promptly give to the party obligated to provide
indemnification (the "Indemnitor") written notice of its claim setting forth (i)
a full description of the nature of the Claim, and (ii) the total anticipated
amount of the Claim, including any costs or expenses which have been incurred in
connection therewith (a "Notice of Claim").
(b) If the events or circumstances giving rise to the Claim have
continued without dispute (as contemplated by (c) below) or cure for (30) days
from the date the Notice of Claim is given, then the Indemnitor shall pay the
Indemnitee the amount of the Claim as set forth in the Notice of Claim (unless
the provisions of Section 7.4 are applicable thereto), provided that such
payment shall not release the Indemnitor from liability for any other or further
amounts claimed by the Indemnitee in connection with the Claim to the extent
that the Indemnitee is entitled to indemnification therefor under Section 7.1 or
7.2 above. The Indemnitee's failure to give prompt notice, to provide copies of
documents or to furnish relevant data to Indemnitor shall not constitute a
defense (in whole or in part) to any claim by the Indemnitee against the
Indemnitor for indemnification, except and only to the extent that such failure
shall have adversely affected the ability of the Indemnitor to defend against or
reduce the Claim or the Indemnitor is otherwise prejudiced thereby.
(c) The Indemnitor may dispute any Claim asserted by the
Indemnitee by giving written notice to the Indemnitee setting forth the basis of
the dispute within thirty (30) days after the date of the Notice of Claim, at
which time the parties shall attempt to resolve the disputed Claim through good
faith negotiation.
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7.4 Procedure for Indemnification - Matters Involving Third
Party Claims
(a) If any third party shall notify an Indemnitee with
respect to any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against the Indemnitor under Sections 7.1 or 7.2, then the
Indemnitee shall promptly notify the Indemnitor thereof in writing, provided
that no delay on the part of the Indemnitee in notifying the Indemnitor shall
relieve the Indemnitee from any obligation hereunder unless (and then solely to
the extent) the Indemnitor is prejudiced thereby.
(b) The Indemnitor will have the right to defend the
Indemnitee against the Third Party Claim with counsel of its choice satisfactory
to the Indemnitee so long as (i) the Indemnitor notifies the Indemnitee in
writing within 10 business days after the Indemnitee has given notice of the
Third Party Claim that the Indemnitor will indemnify the Indemnitee from and
against any loss that the Indemnitee may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, (ii) the
Third Party Claim involves only money damages and does not seek an injunction or
other equitable relief, (iii) if the Indemnitor is the Buyer, the Third Party
Claim does not involve the Southern States Lease, (iv) settlement of, or an
adverse judgment with respect to, the Third Party Claim is not, in the good
faith and reasonable judgment of the Indemnitee, likely to establish a
precedental custom or practice adverse to the continuing business interests of
the Indemnitee, and (v) the Indemnitor conducts the defense of the Third Party
Claim actively and diligently.
(c) So long as the Indemnitor is conducting the defense of
the Third Party Claim in accordance with paragraph (b) of this Section 7.4, (i)
the Indemnitee may retain separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (ii) the Indemnitee will
not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnitor (not to be withheld unreasonably), and (iii) the Indemnitor will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnitee
Party (not to be withheld unreasonably).
(d) In the event any of the conditions in paragraph (b) of
this Section 7.4 is or becomes unsatisfied, however, (i) the Indemnitee may
defend against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it reasonably
may deem appropriate (and the Indemnitee need not consult with, or obtain any
consent from, the Indemnitor in connection therewith), (ii) the Indemnitor will
reimburse the Indemnitee promptly and periodically for the costs and defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (iii) the Indemnitor will remain responsible for any losses that
the Indemnitee may suffer resulting from arising out of, relating to, in the
nature of, or caused by the Third Party Claim to the fullest extent provided in
this Section 8.
(e) After the Closing, to the fullest extent permitted by
law, the indemnities set forth in this Section shall be the exclusive remedies
of the Buyer, the Seller and the Stockholder for any misrepresentation or breach
of warranty or representation contained in this
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Agreement or closing certificates delivered pursuant to Sections 9 and 10, and
the parties shall not be entitled to a rescission of this Agreement or to any
further indemnification rights or statutory, equitable or common law claims of
any nature, kind or character whatsoever in respect thereof, all of which the
Buyer, the Seller and the Stockholder hereby waive, provided that nothing in
this clause (e) shall be construed to limit in any way the rights and benefits
of, or the remedies available to, the Buyer, the Seller or the Stockholder under
or in respect of any other instrument or agreement to which such party may be a
party or for fraud.
(f) The Indemnitee shall cooperate with the Indemnitor in
the defense of any Third-Party Claim assumed by the Indemnitor.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER.
The obligations of the Buyer under this Agreement are subject, at the
option of the Buyer, to the fulfillment at or prior to the Closing Date, of each
of the following conditions:
8.1 Representations and Warranties. Each of the representations and
warranties of the Seller and the Stockholder contained herein shall have been
true and correct in all respects as of the Closing Date as though made on and as
of such date.
8.2 Covenants. The Seller shall have performed and complied with, in all
material respects, all obligations and agreements and covenants and conditions
contained in this Agreement to be performed or complied with by it at or prior
to the Closing.
8.3 No Adverse Proceedings. No material action or proceeding against the
Seller or the Business and/or any of the Assets, or relating to the consummation
of the transactions contemplated by this Agreement, shall have been instituted
nor any material governmental investigation undertaken which might result in any
such action or proceeding, or any order of a court entered which has the effect
of enjoining or preventing the consummation of this transaction. No claim,
action, suit, investigation or other court proceeding shall be pending or
threatened before any court or governmental agency which threatens to prohibit
the transactions contemplated by this Agreement or which seeks material monetary
damages from or other relief against the Seller, the Business and/or any of the
Assets.
8.4 Closing Documents. The Seller shall have delivered to the Buyer
the documents to be delivered at Closing under Section 3.3 hereof in form
satisfactory to counsel to the Buyer.
8.5 Consents, Permits and Approvals. Consents to the assignment of any
Permits and the Assumed Contracts identified in the SCHEDULES hereto shall have
been obtained (and copies provided to Buyer), in written instruments reasonably
satisfactory to the Buyer.
8.6 Discharge of Liens and Indebtedness. The Seller shall, at or
prior to the Closing, discharge all Liens on any of the Assets.
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8.7 Due Diligence. The Buyer shall, at or prior to the Closing, have
completed its due diligence examination of the Seller, the Business and the
Assets, and shall have been satisfied with the results thereof.
8.8 New Lease. At or prior to the Closing, Buyer shall enter into
a lease with Southern States in respect of the Seaford Leased Property.
8.9 Title and Other Assurances. The Buyer's title to or interest in the
Real Property shall be fully insurable as of the Closing Date by a nationally
recognized title company (the "Title Company"), at normal premiums, free of all
Liens or other title defects except standard exceptions appearing in the form of
commitment used by the Title Company and Permitted Liens or those acceptable to
the Buyer in the reasonable exercise of its discretion, and the officers of the
Seller shall have executed such affidavits or statements regarding their lack of
knowledge of any Liens or other matters adversely affecting the Buyer's title to
the Real Property, as may be reasonably required by such title insurance company
to issue an ALTA Form-B owner's title insurance policy for the Real Property as
of the Closing Date with a "non-imputation" endorsement.
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9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER.
The obligations of the Seller under this Agreement are subject, at the
option of the Seller, to the fulfillment at or prior to the Closing Date of each
of the following conditions:
9.1 Representations and Warranties. The representations and warranties
of the Buyer herein contained shall be true and correct in all respects as of
the Closing Date.
9.2 Covenants. The Buyer shall have performed all obligations and
complied in all material respects with all covenants required by this Agreement
to be performed or complied with on or prior to the Closing.
9.3 No Adverse Proceedings. No material action or proceeding against the
Buyer relating to the consummation of the transactions contemplated by this
Agreement, shall have been instituted nor any material governmental
investigation undertaken which might result in any such action or proceeding, or
any order of a court entered which has the effect of enjoining or preventing the
consummation of this transaction. No claim, action, suit, investigation or other
court proceeding shall be pending or threatened before any court or governmental
agency which threatens to prohibit the transactions contemplated by this
Agreement or which seeks material monetary damages from or other relief against
the Buyer.
9.4 Closing Documents. The Buyer shall have delivered to the Seller
the documents to be delivered at Closing under Section 3.2 hereof in form
satisfactory to counsel to the Seller.
9.5 New Lease. At or prior to the Closing, Buyer shall enter into a
lease with Southern States in respect of the Seaford Leased Property, which new
lease shall be in a form reasonably satisfactory to Seller.
10. TERMINATION.
10.1 Methods of Termination. This Agreement may be terminated and the
purchase of the Assets as contemplated by this Agreement may be abandoned at any
time, but not later than the Closing Date:
(a) by mutual written consent of the Buyer and the Seller; or
(b) by the Buyer by written notice to Seller after September 30,
1997 if any of the conditions to the Buyer's obligations provided in Section 9
of this Agreement shall not have been met by the Seller or waived in writing by
the Buyer on or prior to such date (unless the failure results primarily from
the Buyer breaching any representation, warranty or covenant contained in this
Agreement); or
(d) by the Seller by written notice to Buyer after September 30,
1997 if any of the conditions to the Seller's obligations provided in Section 10
of this Agreement shall not have been met by the Buyer or waived in writing by
the Seller on or prior to such date (unless the
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failure results primarily from the Seller breaching any representation, warranty
or covenant contained in this Agreement).
10.2 Procedure Upon Termination. In the event of termination by the
Buyer or the Seller or both pursuant to Section 10.1 above, written notice
thereof shall be promptly given by the terminating party to the other party, and
this Agreement shall terminate, and the purchase of the Assets hereunder shall
be abandoned without further action by the Buyer or the Sellers. If this
Agreement is terminated as provided herein, each party shall redeliver all
documents, work papers and other material of any other party relating to the
transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same.
10.3 Effect of Termination. If this Agreement is validly terminated in
accordance with Sections 10.1 and 10.2 above, then each of the parties shall be
relieved of their duties and obligations arising under this Agreement after the
date of such termination and such termination shall be without liability to the
Buyer or the Seller; provided, however, that nothing in this Section 10.3 shall
relieve the Buyer or the Seller of any liability for a material breach of this
Agreement occurring prior to termination.
11. CONFIDENTIALITY
11.1 Confidential Information. From and after the Closing Date, the
Seller and the Stockholder (and their affiliates) jointly and severally covenant
and agree that it and they will not divulge or disclose to any third party
(other than the Buyer or any agent or employee of the Buyer) any information of
a proprietary, secret or confidential nature related to the Business, except as
contemplated by this Agreement.
11.2 Remedies. It is recognized that damages in the event of breach of
this Section 11 would be difficult, if not impossible, to ascertain and it is
therefore agreed that the Buyer, in addition to and without limiting any other
remedy or right any of them may have, shall have the right to an injunction or
other equitable relief in any court of competent jurisdiction, enjoining any
such breach; the Seller and the Stockholder hereby consent to the jurisdiction
of any court located in the jurisdiction where the event giving rise to such
breach shall have occurred or is occurring. The existence of this right shall
not preclude any other rights and remedies at law or in equity which the Buyer
may have.
12. MISCELLANEOUS.
12.1 Expenses. Except as otherwise specifically provided herein, each
party hereto shall be solely responsible for all fees, costs and expenses
incurred by it or on its behalf in connection with the preparation, negotiation
and execution of this Agreement and the Schedules hereto, and the consummation
of the transactions contemplated hereby and thereby, including, without
limitation, the fees, costs and expenses of its counsel, accountants, brokers,
funders, investment bankers, financial advisors and other representatives.
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12.2 No Solicitation. At no time prior to the termination of this
Agreement shall Seller or the Stockholder solicit or entertain any offer to
purchase the Assets made by any person, firm or corporation other than Buyer.
12.3 Notices. All notices and other communications hereunder or in
connection herewith shall be in writing and delivered as follows:
If to the Buyer, to:
Xxxxxxx X. Xxxxxx
Vice President and General Manager
Grain & Oilseed Division
Xxxxxx Farms Incorporated
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
With copies to:
Xxxxxxx X. Xxxxxxxx, Xx.
Piper & Marbury L.L.P.
Xxxxxxx Center South
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
If to the Seller or the Stockholder, to:
Xxxxxx Corporation
0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
All notices, requests, demands or other communications hereunder shall
be given to or made upon the respective parties hereto at their addresses set
forth above, or, as to any party, at such other address as may be designated by
it in a written notice to the other party. All notices, requests, consents and
demands hereunder shall be effective when personally delivered or upon delivery
when sent by United States registered or certified mail, postage prepaid, or
when sent by confirmed facsimile, or when delivered by overnight courier.
12.4 Entire Agreement. This Agreement and the other agreements
contemplated herein, including the Schedules hereto, constitutes the entire
agreement among the parties and supersedes all prior agreements, correspondence,
conversations and negotiations with respect to the subject matter hereof.
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12.5 Severability. If any provision of this Agreement shall be declared
by any court of competent jurisdiction illegal, void or unenforceable, the other
provisions shall not be effected, but shall remain in full force and effect.
12.6 Modification and Amendment. This Agreement may not be modified or
amended except by an instrument in writing duly executed by the parties hereto,
and no waiver of compliance of any provision or condition hereof and no consent
provided for herein shall be effective unless evidenced by an instrument in
writing duly executed by the party hereto seeking to be charged with such waiver
or consent.
12.7 Time of the Essence. Time is of the essence in every provision of
this Agreement where time is a factor.
12.8 Governing Law and Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware.
12.9 Specific Performance. Notwithstanding anything in this Agreement to
the contrary if, on the Closing Date, either party (i) has complied with all the
conditions to the obligations of the other party contained in Section 8 or 9, as
the case may be, and (ii) has notified the other party of its intention to
consummate the transactions contemplated under this Agreement and has furnished
evidence of its willingness and ability to do so, and if the Closing does not
then occur due to the refusal of the other party to so consummate the
transactions contemplated under this Agreement, the non-refusing party will be
entitled to specifically enforce the terms of this Agreement in a court of
competent jurisdiction, it being acknowledged that monetary damages due the
other party in such case cannot be adequately determined at law. An action for
specific performance by a party hereunder shall be deemed to be a waiver of any
unfulfilled condition required of the other party, if any, under Sections 8 or
9, as the case may be. The existence of this right shall not preclude any other
rights and remedies at law or in equity, including, without limitation, monetary
damages, which the Buyer, the Seller or the Stockholder may have.
12.10 Binding Effect; Assignment. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
legatees, beneficiaries, personal representatives and other legal
representatives and assigns, as the case may be. This Agreement may not be
assigned by either party hereto without prior written consent of the other.
12.11 Further Assurances. In addition to the actions, documents and
instruments specifically required to be taken or delivered hereby, prior to and
after the Closing and without further consideration, the Seller and the Buyer
shall execute, acknowledge and deliver such other assignments, transfers,
consents and other documents and instruments and take such other actions as
either party, or their counsel, may reasonably request in order to complete and
perfect the transactions contemplated by this Agreement.
12.12 Enumerations and Headings. The enumerations and headings contained
in this Agreement are for convenience of reference only and shall in no way be
held or deemed to define,
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limit, describe, explain, modify, amplify or add to the interpretation,
construction or meaning of any provision or the scope or intent of this
Agreement, or in any way effect this Agreement.
12.13 Counterparts. This Agreement may be signed in two or more
counterparts, all of which, taken together, shall be deemed to constitute one
original Agreement.
12.14 Publicity. Except as may otherwise be required by law, each party
hereby agrees that, on or prior to the Closing Date, it shall not issue any
press release or make any public statements, whether written or oral, with
respect to this Agreement or the transactions contemplated hereby without the
prior written consent of the other parties hereto, which consent shall not be
unreasonably withheld.
12.15 Employee Matters. As of the Closing Date, the Buyer shall offer
employment to the employees of the Seller. In respect of each such employee of
the Seller who accepts the Buyer's offer of employment on or prior to the
Closing Date, such hired employee shall be deemed terminated by Seller and newly
hired by Buyer.
12.16 No Third-Party Beneficiaries. This Agreement, including, without
limitation, Section 12.15 above, shall not confer any rights or remedies upon
any person other than the Buyer, the Seller, the Stockholder and their
respective successors and permitted assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
XXXXXX FARMS INCORPORATED
By:....................................
Xxxxxxx X. Xxxxxx
Vice President and General Manager
Grain & Oilseed Division
XXXXXX PROTEIN, INC.
By:....................................
Xxxxx Xxxxxxx
Senior Vice President-Operations
VENTURE MILLING COMPANY
By:....................................
Xxxxx Xxxxxxx
Senior Vice President-Operations
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SCHEDULES TO ASSET PURCHASE AGREEMENT
SCHEDULES ARE ATTACHED HERETO
