STATE OF FLORIDA
COUNTY OF SARASOTA
SALES AGREEMENT FOR ASSET SALE
THIS AGREEMENT made this 24th day of November, 1999, between PANIFICIO
WHOLESALE ITALIAN BAKERY, LLC, A Florida Limited Liability Corporation
(hereinafter referred to as ("Seller"), and QCL GROUP, INC, a Georgia
Corporation (hereinafter referred to as "Purchaser").
1.
Sale of Business Assets: The Seller shall sell to the Purchaser all assets
of the Seller's bakery business owned and operated under the trade name
"Panificio Wholesale Italian Bakery", located at 0000 00xx Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxx, 00000 (the "Premises") free from all liabilities and
encumbrances except the Permitted Exceptions as shown on Exhibit B, as a going
concern, including the good will of the business, all accounts receivable of
Seller, all interest of Seller in and to the Lease Agreement between Seller and
its Landlord ("the Lease") regarding said Premises, all inventory as of the date
hereof, all transferable licenses, and all furniture, fixtures, supplies, and
equipment now used by the businesses as shown on Exhibit A (all of the foregoing
being hereinafter sometimes referred to as "the Transferred Assets").
2.
Purchase Price: The total purchase price shall be paid by and through a
transfer of stock in Purchaser's corporation. The purchase price shall be
payable in the following manner:
(a) Purchaser shall transfer and assign or issue capital stock to Seller
in the equivalent of 500,000 shares of restricted stock in QCL Group,
Inc., said stock comprising
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the entire purchase price for the Transferred Assets, subject to the
setoff amount (the "Setoff") as set forth in paragraph ten (10)
hereof.
(b) Purchaser shall pay to Seller $1,000.00 per month for 24 months
following the Closing. Such payment shall be made on the first day of
each month beginning December 1, 1999 and continuing the first day of
each month thereafter.
3.
Closing: The closing of the transaction contemplated herein and transfer of
possession of the Premises and assets (the "Closing") shall be completed upon
execution of this Agreement and transfer of all documents necessary to transfer
ownership of the Transferred Assets.
4.
No Assumptions of Obligations: Purchaser and Seller agree and acknowledge
that Purchaser is not assuming any debts of Seller except the Permitted
Exceptions and that Seller shall remain liable for all debts and obligations of
Seller except the Permitted Exceptions.
5.
Use of Trade Name: Purchaser may use the trade name "Panificio" for
wholesale purposes but not for retail purposes. Seller may not open retail store
for sale of bakery products solely using the name "Panificio" for its store
name. Seller may however use the name "Panificio" for the following permitted
uses, this list not being exclusive but only explicatory:
1. Purchaser may open retail outlets using the following name, "Southeastern
Baking Company, Inc. selling Panificio Bread";
2. Purchaser may make retail sales from the Premises;
3. Purchaser may use the following name on all advertising "Southeastern
Baking Company, Inc. selling Panificio Bread."
6.
Accounts Payable/ Accounts Receivable: A list of which is attached hereto
as Exhibit C. Seller agrees that should the amount of Seller's Accounts Payable
exceed the amounts shown on Exhibit C, the difference shall be deducted from the
purchase price as a setoff as set forth in paragraph number ten (10) hereof.
7.
Lease: Purchaser agrees to assume Seller's lease for the Premises and
agrees to indemnify and hold harmless Seller for any claims arising from and for
past due rent thereon.
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Consultation: Xxxxxxxx Xxxxxxxxxxx agrees to work for Purchaser a minimum
of ten (10) hours per month for (12) months after closing for no compensation.
Such work shall include consultation and procurement of new business and
accounts. Should Xxxxxxxx Xxxxxxxxxxx fail to work said ten (10) hours for any
month during said twelve (12) month time period as agreed herein, Seller shall
forfeit payment of the $1,000.00 per month portion of the purchase price until
such time as Xxxxxxxx Xxxxxxxxxxx works said minimum ten (10) hours per month.
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Representations and Warranties of Seller: The Seller warrants and
represents the following:
Seller shall pay and be responsible for all unpaid taxes and all other
claims, obligations or liabilities due at or accruing prior to the date of
Closing hereunder except the Permitted
Exceptions. Seller shall remain liable for all taxes except tangible property
tax as set forth [ILLEGIBLE] accruing prior to the date of Closing including,
but not limited to, all sales taxes or payroll taxes owed by the Seller pursuant
to Seller's operation of the business. Seller shall remain liable for the
payment of any lawful demands, penalties, assessments, or levies filed against
Seller by any tax authorities for taxes accruing during the period prior to
Closing. Further, the Seller covenants that the Seller will file such final tax
returns and reports and make all payments required under the same as are
required under the law; and
All equipment is in working order. All service agreements or warranties if
any, pertaining to the equipment and allowed to be transferred under the
provisions thereof will be transferred to Purchaser under this Agreement at no
additional cost to Purchaser; and
All financial and other information provided to Purchaser and all
representations and warranties contained herein are true and correct in all
material aspects or facts and there are no material ommissions of fact which
would render said information, representations or warranties misleading.
Seller further warrants and represents the following:
(a) Seller is the owner of and has good fee simple marketable title to all
the Transferred Assets, free from all encumbrances.
(b) To its knowledge, Seller has complied with all laws, rules and
regulations of the applicable county, state and federal governments.
(c) Seller has paid all applicable social security, withholding, sales and
unemployment insurance taxes levied by county, state and federal
governments to date.
(d) Seller has not entered into any other contract to sell or mortgage its
business, the Premises, the Transferred Assets, or any portion
thereof.
(e) There are no judgments, liens, actions or proceedings pending against
Seller in any
court except these Disclosed Lawsuits listed in Exhibit D.
(f) All state and county licenses and zoning requirements applicable to
the Premises and/or the Transferred Assets have been met by Seller.
(g) Seller is a limited liability corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida.
Seller has full power and authority to own its properties and assets
and to carry on its business as it is now being conducted.
(h) By appropriate vote and by unanimous written consent of its members,
all in accordance with Florida Law and its Operating Agreement,
Seller, by and through its authorized agent, has full power to execute
and perform this Agreement and to transfer his properties and assets
as herein provided, and such executive and performance does not
conflict with any provisions of its Operating Agreement or with any
contract to which it is a part or to which it is subject.
(i) There have been no actual claims, litigation, administrative
proceedings, judgments or orders and to the best of Seller's belief
and knowledge, none are threatened, relating to any hazardous
substances, hazardous wastes, discharges, omissions or other forms of
pollution relating in any way to any real estate leased by Seller and
used in connection with the businesses.
(j) There have been no hazardous substances or hazardous wastes, as
defined by the Resource Conservation and Recovery Act (42 U.S.C.
Subsection 6901, et seq., generated, manufactured, refined,
transported, treated, stored, handled or disposed of on any of the
Premises by Seller or, to Seller's knowledge without independent
investigation, any lessor, previous owner or occupant of the Premises
or any other person.
(k) There have been no discharges, spillages or disposals of hazardous
substances or
hazardous wastes (as defined herein) on any of the Premises by Seller,
or to Seller's knowledge without independent investigation, and lessor
or previous owner or occupant of the Premises or any other person.
(l) The lease for the Premises is in full force and effect and no
violation thereof exists as of the date of Closing.
(m) The xxxx of sale and instruments of assignment delivered herewith will
transfer all of the Transferred Assets, free of all encumbrances, and
will contain the usual warranties and affidavits of title.
(n) The business of the Seller has been and is being conducted up to the
date of this Closing in accordance with all laws, rules and
regulations of the county, state and federal governments.
(o) All suppliers and creditors of the business shall be paid in full as
of the date of Closing except as shown on Exhibit C. In signing this
Agreement Seller warrants and affirms to Purchaser there no others
suppliers or creditors of the Seller's business, except as shown on
Exhibit C, that have not been paid in full as of the date of Closing.
(p) The Seller represents that there are no liens, encumbrances or
security interests on any of the property to be sold to the Purchaser,
and warrants that the title conveyed to the Purchaser is free and
clear.
All representations and warranties made by the Seller shall survive the
Closing and be independently enforceable.
10.
Escrow and Setoff: The entire purchase price shall be held in escrow by
Seller for twelve (12) months from the date of the Closing. Said purchase price
shall be disbursed at the end of said twelve (12) months as follows:
Seller shall receive the full amount of the purchase price less and except
the following:
1. Any setoff for Accounts Payable-Purchaser shall deduct an amount of stock
in QCL Group, Inc. from the purchase price equivalent to the amount
Purchaser paid for Seller's Accounts Receivable which is greater than that
amount shown on Exhibit C.
2. Any setoff for Disclosed Lawsuits--Purchaser shall deduct an amount of
stock in QCL Group, Inc. from the purchase price equivalent to the amount
of the claims in the Disclosed Lawsuits for any such lawsuit not resolved
and dismissed. Such amount shall continue to be held in escrow until such
claim is resolved and dismissed.
3. Any setoff for Other Claims--Purchaser shall deduct an amount of stock in
QCL Group, Inc. from the purchase price equivalent to the amount of any
other closing brought against Purchaser or Seller for Seller's operation of
the business. Such amount shall continue to be held in escrow until such
claim is resolved and dismissed.
11.
Brokers: Seller and Purchaser both represent to each other that they have
not dealt with any brokers, finders or realtors in connection with this
transaction. Both Seller and Buyer agree to indemnify, defend and hold each
other harmless from and against any liability, losses, costs, judgments, claims,
demands, damages, actions, causes of action, suits and expenses (including,
without limitation, reasonable attorneys' fees, court costs and disbursements,)
arising out of or resulting from the claim by any broker, finder or realtor that
such broker, finder, or realtor brought about this transaction through dealings
with Seller or Purchaser, as the case may be.
12.
Construction: This Agreement shall be construed under the laws of the State
of Florida.
13.
Severability: The invalidity or unenforceability of particular provisions
of this Agreement shall not affect the other provisions hereof, and the
agreement shall be construed in all respects as if such uneforceable or invalid
provisions were omitted.
14.
Indemnification: Seller hereby agrees to defend and to indemnify and to
hold wholly harmless Purchaser, its officers, agents and assigns, from and
against any and all losses, liabilities, damages, costs (including without
limitation, court costs) and expenses (including without limitation, measurable
attorney's fees) which Purchaser may incur as a result of, or with respect to,
any inaccuracy in or breach of any representation, warranty, covenant or
agreement by or on behalf of Seller contained in this Agreement or contained in
any certificate, agreement or document of Seller or any certificate, agreement
and document of any director or officer of Seller delivered to Purchaser in
connection with the consummation of the transactions contemplated hereunder. By
way of explanation and not by way of limitation, Seller shall be obligated to
indemnify and hold harmless Purchaser against any and all actions, suits,
proceedings, claims, demands, judgments, costs and expenses incident to any
breach of any representation or warranty given by Seller. Further, Seller agrees
specifically to indemnify and hold harmless Purchaser from all liability from
and for the Disclosed Lawsuits.
15.
Non-Compete/Non Solicitation:
(a) Seller and its members individually and jointly covenant and agree that
for a period of 36 months the execution of this Agreement, they will not,
without the prior written consent of Purchaser, for themselves, as a consultant,
management, supervisory or executive employee of any company, of any company,
partnership or business concern, or as an independent contractor for any
company, partnership or business concern compete within the Territory, to be
defined as the county in which
the Seller is located together with all counties touching said county, with the
business of the Purchaser for any competing business by providing services which
are the same as or substantially similar to the service provided by the Company.
(b) Seller and its members individually and jointly covenant and agree that
for 36 months after the date of this Agreement, they will not, without the prior
written consent of Purchaser, directly or indirectly, on their own behalf or in
the service or on behalf of others, solicit, attempt to solicit, divert or
appropriate away from Purchaser to any competing business, any persons and/or
entities who are customers of Purchaser for business of another.
(c) Seller and its members individually and jointly covenant and agree that
for a period of 36 months after the date of this Agreement, they will not,
either directly or indirectly, on their own behalf or in the service or on
behalf of others, solicit or attempt to solicit, divert or hire away any person
employed by the Purchaser.
16.
Encumbrances or Liens: Should Purchaser become aware of any liens or
encumbrances on the Transferred Assets and Seller fail to pay the same within
thirty (30) days of notice thereof from Purchaser to Seller, Purchaser may at
its option deduct the amount thereof from the purchase price as a setoff as set
forth in paragraph ten (10) hereof.
17.
Entire Agreement: This Agreement contains the entire agreement of the
parties hereto and no representations, inducements, promises or agreements, oral
or otherwise, between the parties not embodied herein shall be of any force or
effect, and no such representations, inducements, promises or agreements have
been made.
18.
Exhibits: All exhibits hereto are hereby specifically incorporated herein
and made a part hereof by reference.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
SELLER
PANIFICIO WHOLESALE ITALIAN BAKERY, LLC.
By: /s/ Xxxxxxxx Xxxxxxxxxxx (Seal)
-------------------------
XXXXXXXX XXXXXXXXXXX,
Managing Member
By: /s/ Xxxxxxxx X'xxx, (SEAL)
-------------------------
XXXXXXXX X'XXX,
Member
[CORPORATE SEAL]
Signed, sealed and delivered
in the presence of
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Unofficial Witness
------------------------------
Notary Public, _____ Co., FL
My commission expires.
[STAMP OF NOTARY]
Xxxxxxx X. Xxxxxx
MY COMMISSION [ILLEGIBLE] EXPIRES:
August 29, 2001
[ILLEGIBLE]
BUYER
QCL GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx, Xx. (SEAL)
-------------------------------
XXXXX X. XXXXXX, XX., PRESIDENT
Attest: /s/ Xxxxxxx X. Xxxxxx (SEAL)
----------------------------
XXXXXXX X. XXXXXX, Secretary
[CORPORATE SEAL]
Signed, sealed and delivered
in the presence of:
_____________________________
Unofficial Witness
_____________________________
Notary Public, Xxxxxx Co., GA
My commission expires:
[HANDWRITTEN LIST OF EQUIPMENT INTENTIONALLY OMITTED]
EXHIBIT B
PERMITTED EXCEPTIONS
1. All amounts due Seller's landlord (the "Landlord") under its lease
agreement therewith for the Premises, better known as 0000 00xx Xxxxxx
Xxxx, Xxxxxxxx, Xxxxxxx, 00000. Amount not to exceed $25,000.00.
2. All of Seller's Accounts Payable as shown on Exhibit C.
EX C
Panificio Wholesale Italian Bakery, LC
A/R Aging Summary
As of November 24, 1989
[ILLEGIBLE AGING SCHEDULES INTENTIONALLY OMITTED]
ADDENDUM TO SALES AGREEMENT FOR ASSET SALE
BETWEEN QCL GROUP, INC. AND
PANIFICIO WHOLESALE ITALIAN BAKERY, LLC
WHEREAS, QCL GROUP, INC. "BUYER" did make an offer to purchase the assets
of PANIFICIO WHOLESALE ITALIAN BAKERY, LLC, "SELLER", a copy of said Agreement
is attached hereto and made a part of this Addendum; and
WHEREAS, the original agreement has not been accepted by the BUYER subject
to modifications thereto by SELLER; and
WHEREAS, BUYER does hereby renew his offer to purchase the subject assets
with certain amendments as follows:
1. BUYER authorizes SELLER to transfer and assign 400,000 shares of the
500,000 shares of stock in QCL Group, Inc., the purchase price as follows:
1. 200,000 shares will be transferred and assigned to Xxxx Xxxxxxxxxxx; and
2. 200,000 shares will be transferred and assigned to Xxxxx Xxxxxx. The
remaining 100,000 shares of stock being the remainder of the purchase price
shall stay in the name of SELLER until one year from the date of this
agreement. All 500,000 shares of stock are subject to the restrictions
against sale and shall be held in escrow subject to the terms of the
agreement.
2. All stock issued as the purchase price shall be held in escrow pursuant to
the terms of the agreement by Xxxxxx Xxxxx, Attorneys at Law, 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxx, 00000.
All other terms, conditions and agreements contained in the original
agreement shall remain the same and of full force and effect.
This the ___ day of December, 1999.
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SELLER
PANIFICIO WHOLESALE ITALIAN BAKERY, LLC.
By: /s/ Xxxxxxxx Xxxxxxxxxxx (Seal)
-------------------------
XXXXXXXX XXXXXXXXXXX,
Managing Member
By: /s/ Xxxxxxxx X'xxx, (SEAL)
-------------------------
XXXXXXXX X'XXX,
Member
[CORPORATE SEAL]
Signed, sealed and delivered
in the presence of
------------------------------
Unofficial Witness
------------------------------
Notary Public, _____ Co., FL
My commission expires.
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