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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered into as
of the 22 day of December, 1999, by and between Xxxxxxx X. Xxxxxx, Xx., a
citizen and resident of Catawba County, North Carolina (hereinafter "Seller");
and Xxxxx X. Xxxxxxxxxx, Xx., a citizen and resident of Catawba County, North
Carolina (hereinafter "Buyer").
RECITALS
A. Seller is the owner of 716,063 shares of common stock (the "Stock")
of Fresh Foods, Inc., (hereinafter the "Corporation"), a corporation organized
and existing under the laws of the State of North Carolina, having its principal
place of business in Catawba County, North Carolina, and said stock is traded
over National Association of Security Dealers Automated Quotation System
(NASDAQ) having the symbol "FOOD".
B. Seller desires to sell all of his stock in the Corporation to Buyer,
and Buyer desires to purchase all of Seller's stock in the Corporation pursuant
to the terms and provisions hereof.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF STOCK
Seller hereby sells, assigns, transfers and sets over to Buyer 716,063
shares of common stock owned by the Seller in the Corporation. Buyer hereby
agrees to purchase the Stock and agrees to pay in consideration thereof the
purchase price of Eight and 25/100 Dollars ($8.25) per share, for a total of
$5,907,519.75 (the "Purchase Price"), to be payable as follows:
1.1 Xxxxxxx Money Deposit. Upon execution hereof, Buyer shall
deliver the sum of One Hundred Thousand Dollars ($100,000.00)
to Xxxxxxx X. Xxxxx, Xx., as Trustee, to be held by Xxxxxxx X.
Xxxxx, Xx., as Trustee, until the Closing (as defined below)
of the transaction contemplated hereby (the "Xxxxxxx Money
Deposit"). The Xxxxxxx Money Deposit shall be credited toward
the Purchase Price at the Closing.
1.2 Cash Payment at Closing. Buyer shall deliver the sum of Two
Million Four Hundred Thousand Dollars ($2,400,000.00) to
Seller at the Closing of the subject transaction.
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1.3 Payment of Balance of Purchase Price after Closing. At the
Closing, Buyer shall deliver a Promissory Note to the Seller
in the principal amount of the remaining balance of the
Purchase Price. Said Promissory Note shall bear interest at
the rate of eight (8%) percent per annum. The Buyer shall pay
interest payments only on an annual basis on the twelfth
(12th) month and the twenty-fourth (24th) month following the
Closing. The entire outstanding principal balance and any
interest accrued thereon shall be due and payable no later
than three (3) years from the date of the Closing. There shall
be no prepayment penalty for early payment of all or any part
of the amount due.
ARTICLE II
DELIVERY OF STOCK IN ESCROW
2.1 Stock Certificates to Escrow Agent. At the Closing, Seller shall
deliver to Xxxxxxx X. Xxxxx, Xx., whose address is 000 Xxxxxx Xxxxxx XX,
Xxxxxxx, Xxxxx Xxxxxxxx 00000, as "Escrow Agent", free and clear of all
encumbrances and restrictions on transfer, all certificates for the shares of
Stock sold pursuant to this Agreement, duly endorsed for transfer to Buyer and
accompanied by all other documents necessary for an effective transfer.
2.2 Shares Transferred Directly to Buyer at Closing. At the Closing,
the number of shares of the Stock represented by the sum of Two Million Five
Hundred Thousand Dollars ($2,500,000.00) at the price of Eight and 25/100
Dollars ($8.25) per share shall be conveyed to the Buyer.
2.3 Balance of Shares Delivered upon Payment of Promissory Note. Upon
the payment of the balance of the Purchase Price under the terms of the subject
Promissory Note in the principal sum of $3,407,519.75, on or before the due date
as provided for in the said Promissory Note, the Escrow Agent shall deliver the
remaining balance of shares of Stock being sold hereunder, together with the
necessary stock transfer stamps duly affixed thereon, and all other documents
delivered to the Escrow Agent to effectively transfer such shares, to the Buyer.
2.4 Escrow Fees. The fees and all other expenses of the Escrow Agent
shall be paid by Buyer.
2.5 Escrow Agreement. At the Closing, the Seller, Buyer and Escrow
Agent shall enter into a formal Escrow Agreement containing standards terms and
provisions governing the duties and responsibilities of the Escrow Agent.
ARTICLE III
CLOSING
The Closing of the transactions contemplated hereby shall occur on or
before January 31, 2000 (the "Closing") at 10:00 AM at the law offices of Xxxx,
Young, Morphis, Bach & Xxxxxx, LLP, 400 Second Avenue NW, Hickory, North
Carolina, or at such other time and place as the parties may mutually agree
upon.
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ARTICLE IV
VOTING RIGHTS DURING ESCROW
As long as the Buyer is not in default in the payment of the balance of
the Purchase Price pursuant to the subject Promissory Note, the Buyer shall have
the right to vote the Stock delivered to Buyer at Closing and on deposit with
the Escrow Agent. In connection therewith, Seller shall at Closing execute and
deliver an effective, irrevocable proxy or proxies in favor of Buyer or Buyer's
nominee or nominees, and Buyer shall have the right, in Buyer's sole discretion,
to designate one or more nominees to vote the proxy or proxies pursuant to the
terms of this Agreement.
ARTICLE V
DIVIDENDS DURING ESCROW
Any and all dividends paid on the Stock held by the Escrow Agent during
the term of the subject Promissory Note shall be the property of the Buyer.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Seller represents and warrants as follows:
(a) Seller is the owner of, free and clear of any liens,
encumbrances and charges, and has full power to sell and
transfer to Buyer the Stock.
(b) The sale of the Stock by Seller pursuant to this Agreement is
an isolated transaction by the Seller, who does not intend to
make any other sales and who has not made any sales or
purchases of such stock within the past __________ months.
ARTICLE VII
DELIVERIES BY SELLER AT CLOSING
At the Closing, Seller shall deliver the following documents and
instruments:
(a) All stock certificates representing 716,063 shares of common
stock owned by Seller in the Corporation. Said certificates
shall be endorsed for transfer to Buyer, thereby transferring
the subject shares free and clear of any and all liens and
encumbrances;
(b) An Escrow Agreement containing standard terms and provisions
governing the duties and responsibilities of the Escrow Agent
and the parties with respect to that portion of the Stock
being held by the Escrow Agent; and
(c) Such other documents as may be reasonably necessary in the
opinion of Buyer to effectuate the transactions contemplated
by this Agreement.
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ARTICLE VIII
DELIVERIES BY BUYER AT CLOSING
At the Closing, Buyer shall deliver the following:
(a) The sum of Two Million Four Hundred Thousand Dollars
($2,400,000.00) in cash or certified funds as part of the
Purchase Price payable to the Seller;
(b) The Promissory Note in favor of Seller containing the terms
and provisions set forth in Section 1.3 hereof and the
standard and customary terms of such a Promissory Note.
(c) An escrow agreement containing standard terms and provisions
governing the duties and responsibilities of the Escrow Agent
and the parties with respect to that portion of the Stock
being held by the Escrow Agent; and
(d) Such other documents as may be reasonably necessary in the
opinion of Seller to effectuate the transactions contemplated
by this Agreement.
ARTICLE IX
FILINGS AND REGISTRATION
Buyer agrees to perform and to pay for the costs and expenses required
in connection with any filings and registration with the Securities and Exchange
Commission, the Corporation, and any and all other entities or agencies required
in order to close this transaction.
ARTICLE X
BROKERAGE
Buyer and Seller represent that there are no brokerage or other
commissions due relative to the sale and transfer of the Stock by Seller to
Buyer.
ARTICLE XI
ENTIRE AGREEMENT
This Agreement sets forth and contains the entire agreement between the
Buyer and Seller with respect to the subject stock, and will not be modified or
terminated except by agreement in writing executed by both parties.
ARTICLE XII
GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the State of North Carolina.
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IN WITNESS WHEREOF, the parties hereby have executed this Stock
Purchase Agreement by affixing their hands and seals hereto on the date first
above written.
SELLER:
/s/ Xxxxxxx X. Xxxxxx, Xx. (SEAL)
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Xxxxxxx X. Xxxxxxx, Xx.
BUYER:
/s/ Xxxxx X. Xxxxxxxxxx, Xx. (SEAL)
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Xxxxx X. Xxxxxxxxxx, Xx.
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