Exhibit 99.2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is executed as of February 9, 2005 by and
between State-Line Bark & Mulch, Inc., a Georgia corporation ("Seller"), Xxxxxxx
X. Xxxxxxx and Xxxx X. Xxxxxxx ("Shareholders") and Xxxxx State Line, Inc., a
Florida corporation ("Buyer").
Recitals
Shareholders and Mulch Masters, Inc., a Florida corporation ("Mulch
Masters"), own certain property located at Xxx. 0, Xxx 000, Xxx Xxxxx Xxxxxxx,
Xxxxxxxx, Xxxxxxx 00000 (the "Property") and Seller operates a business (the
"Business") on the Property for the production of bulk or bagged ground cover,
soil and compost products and related products (the "Products"). Shareholders
are the sole shareholders of Seller and Mulch Masters. Subject to the terms and
conditions set forth herein, Seller will sell to Buyer, or its designee,
substantially all of the assets relating to the Business (as more particularly
defined in Section 1.1, the "Assets").
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, intending to be legally bound, the
parties hereto agree as follows:
ARTICLE I
TRANSFER OF ASSETS AND LIABILITIES
----------------------------------
1.1 Assets to be Sold. Subject to the terms and conditions of this
Agreement, Seller will, at the closing provided for in Section 1.8 hereof (the
"Closing"), sell, convey, assign, transfer and deliver to Buyer all of the
assets used in or associated with the Business (the "Assets"), including,
without limitation, the following:
(a) all of Seller's equipment, inventory, work-in-process, fixtures,
furnishings, supplies, tools, machinery, motor vehicles ("Vehicles") and other
tangible assets used in or associated with the Business ("the Tangible Personal
Property"), all as more specifically listed on Schedule 1.1(a), all such
Tangible Personal Property and Vehicles to be free and clear of all liens, other
than liens to which Buyer consents in writing (the "Permitted Liens");
(b) all of Seller's data, records, files and papers relating to the
Assets and the Business, including but not limited to client contracts, files
and records in respect of sales, sales, distribution and purchase
correspondence, research and development records, procedure manuals, product
mixing recipes and guidelines, job records, records of present and former
customers (including credit histories), suppliers and employees, mailing lists
and prospect lists, and other records relating to the Assets and/or the
operation of the Business;
(c) the accounts receivable and goodwill of the going business concern
of Seller as it relates to the Business, including the name "State Line Bark &
Mulch," all tradenames, trademarks, phone numbers, e-mail addresses, websites,
URL, and domain names of Seller;
(d) those software, software licenses, license agreements, and other
contracts, agreements or certificates for the use of software held by Seller;
(e) all rights and interests of Seller as of the Closing Date in and
to the contracts and agreements listed in Schedule 1.1(e) attached hereto (the
"Ancillary Agreements"), and including all contracts and agreements with clients
of Seller, but excluding those contracts as to which Buyer has notified Seller
prior to the Effective Time that Buyer does not wish to receive an assignment;
provided that nothing herein shall be construed to constitute compliance with
ss. 4204(a) of the Employment Retirement Income Security Act of 1974, as
amended, or to require the parties to take any action that would transfer any
multiemployer plan liability to Buyer;
(f) all transferable or assignable permits (including state or local
permits for all manufacturing activities), licenses, authorizations, approvals
or indicia of authority held by Seller as of the Closing Date (as defined in
Section 1.8 herein) with respect to the ownership or operation of the Business
or the Assets; and
(g) Seller's rights under all of its present and former insurance
policies, including without limitation workers' compensation, product liability
and general liability insurance and any other insurance required to be held by
law, to the extent such rights are transferable and subject to the consent, if
any of the insurer (such consent not to be a condition to the Closing).
Buyer and Seller agree that the containerized trees owned by Seller and
located on a portion of the Property (the "Containerized Trees") and the
personal effects of Shareholders, including artwork, shall be excluded from the
Assets and shall not be subject to the transactions contemplated hereby.
1.2 Debts, Obligations and Liabilities. Except for those liabilities
expressly listed in Schedule 1.2 attached hereto (collectively, the "Assumed
Liabilities"), Buyer shall assume no debts, obligations or liabilities of Seller
as a result of the purchase of the Assets contemplated hereby. Any debt,
obligation, or liability of Seller which is not an Assumed Liability for which
Buyer is invoiced or notified, shall be promptly forwarded to Seller for
payment.
1.3 Consideration.
(a) In consideration of the transfer, conveyance, and assignment of
the Assets, Buyer will deliver to Seller at Closing (i) the sum of Two Million
Five Hundred Thousand Dollars ($2,500,000.00), payable in cash by wire transfer
or delivery of other immediately available funds (the "Cash Consideration"), and
(ii) an agreement for assumption of the Assumed Liabilities. The Buyer will also
deliver to Escrow Agent (as defined in Section 1.11 below) the sum of One
Hundred Thousand Dollars ($100,000.00) (the "Escrow Funds"). The Cash
Consideration, the Escrow Funds and the Assumed Liabilities are collectively
referred to herein as the "Purchase Price".
(b) The Purchase Price shall be reduced by any amounts required to
satisfy liens, other than Permitted Liens, and shall be subject to adjustment
pursuant to Section 1.5.
-2-
1.4 Purchase of the Property. The terms and conditions governing the
Buyer's purchase of the Property from Seller and Shareholders shall be governed
by one or more Purchase and Sale Agreements ("Purchase Agreement") in
substantially the form of Exhibit A attached hereto.
1.5 Adjustment to Purchase Price for Proration of Certain Items. Buyer and
Seller shall adjust the Cash Consideration to account for the pro-ration of
prepaid items and adjustments as shown on Schedule 1.5.
1.6 Payments Received After Closing. To the extent that, after Closing,
either Buyer or Seller shall receive any payments from any third parties
relating to the operations at the Business and attributable to the period prior
to (in the case of receipt by Buyer), or after (in the case of receipt by
Seller) the Closing Date, the party receiving the same shall promptly make
delivery thereof to the party hereto entitled to such payment.
1.7 Allocation of Purchase Price. Buyer and Seller shall allocate the
Purchase Price among the Assets in the manner required by ss. 1060 of the
Internal Revenue Code of 1986, as amended (the "Code"), and shall make all
filings with the Internal Revenue Service (the "IRS") as may be required by ss.
1060 of the Code and the Treasury Regulations promulgated thereunder. The
Purchase Price shall be allocated in accordance with Schedule 1.7 hereto. Seller
and Buyer agree to use such allocation for federal and state income tax purposes
and to cooperate in the preparation and timely filing of IRS Form 8594
reflecting the allocation.
1.8 Closing. The closing of the transactions contemplated by this
Agreement(the "Closing") shall take place at 9:00 a.m. on February , 2005, at
the offices of Xxxxx Xxxxxx Xxxxxxxx Xxxx & Xxxxxx, P.A., 00 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx, or at such alternative time, date and place
as the parties may mutually determine (the "Closing Date"). The transactions
contemplated hereby shall be effective as of 12:01 a.m. on the Closing Date
("Effective Time").
1.9 Deliveries at Closing.
(a) At the Closing, Seller and Shareholders, as applicable, will
deliver the following to Buyer:
(i) duly executed and acknowledged Purchase Agreement;
(ii) duly executed and acknowledged Xxxx of Sale transferring the
Assets, in substantially the form attached hereto as Exhibit B (the
"Xxxx of Sale");
(iii) duly executed certificates of title for the Vehicles;
(iv) duly executed and acknowledged Assignment and Assumption of
Ancillary Agreements and Liabilities, in substantially the form
attached hereto as Exhibit C, (the "Assignment and Assumption of
Ancillary Agreements") whereby Seller will assign to Buyer all of
Seller' rights in and interests under the Ancillary Agreements, or
-3-
those contracts or agreements entered into after the date hereof in
accordance with the terms hereof, together with any third party
consents that may be required pursuant thereto, and Buyer will assume
the Ancillary Agreements and the Assumed Liabilities;
(v) the Escrow Agreement (as defined in Section 1.11 below);
(vi) the Non-Compete Agreement (as defined in Section 3.9 below);
(vii) the License Agreement (as defined in Section 3.11 below);
(viii) the Lease Agreement (as defined in Section 4.6 below);
(ix) the Supply Agreement (as defined in Section 5.7 below);
(x) a Closing Certificate as to the matters specified in Sections
5.1 - 5.3 hereof;
(xi) a Secretary's Certificate of Seller certifying (A) its
Articles of Incorporation, (B) its Bylaws and (C) resolutions adopted
by its shareholders and the Board of Directors authorizing the
transactions contemplated hereby;
(xii) such other documents as may be reasonably necessary to
effect the transactions contemplated hereby.
(b) At the Closing, Buyer will deliver the following to Seller or
applicable officers of Seller, as the case may be:
(i) the Cash Consideration;
(ii) the Escrow Agreement;
(iii) duly executed and acknowledged Purchase Agreement;
(iv) duly executed and acknowledged Assignment and Assumption of
Ancillary Agreements and Liabilities;
(v) duly executed and acknowledged Escrow Agreement;
(vi) duly executed and acknowledged License Agreement;
(vii) duly executed and acknowledged Supply Agreement;
(viii) duly executed and acknowledged Lease Agreement;
-4-
(ix) a Closing Certificate as to the matters specified in
Sections 6.1 - 6.3 hereof;
(x) a Secretary's Certificate of Buyer certifying (A) its
Articles of Incorporation, (B) its Bylaws and (C) resolutions adopted
by its Board of Directors authorizing the transactions contemplated
hereby; and
(xi) such other documents as may be reasonably necessary to
effect the transactions contemplated hereby.
1.10 Closing Costs. All costs of closing shall be shared equally by the
parties; provided, however, each party shall be responsible for their own
attorneys' and accountants' fees and expenses.
1.11 Escrow Agreement. Buyer and Seller agree that the Escrow Funds (as
defined in Section 1.3 above) shall be deposited into escrow with the law firm
of Xxxxxx Towers, P.A. ("Escrow Agent") to be held and disbursed in accordance
with the terms of that certain Escrow Agreement in substantially the form of
Exhibit F attached hereto (the "Escrow Agreement").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 Representations and Warranties of Shareholders and Seller.Shareholders
and Seller hereby represent, covenant and warrant to Buyer, the following:
(a) Organization and Power of Seller. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Georgia, and has all requisite corporate power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
(b) Authority Relative to Agreement. The execution, delivery and
performance of this Agreement by Seller, and the consummation by Seller of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Seller. Seller has duly executed and delivered
this Agreement. This Agreement constitutes a valid and binding obligation of
Seller, enforceable in accordance with its terms.
(c) Effect of Agreement. To the best of Seller's and Shareholders'
knowledge, the execution, delivery and performance of this Agreement by Seller,
and the consummation by Seller of the transactions contemplated hereby, do not
and will not (i) violate any statute, rule, regulation, law or court order
applicable to Seller, including but not limited to any applicable bulk sales
law; (ii) require any consent, waiver, approval, license or authorization of, or
filing with any person or entity, other than the consents of third parties to
the Ancillary Agreements; or (iii) with or without the giving of notice or the
passage of time or both, conflict with or result in a breach or termination of,
constitute a default under Seller's Articles of Incorporation, Bylaws or any
-5-
other agreement by which it is bound, or result in the creation of any lien,
charge or encumbrance upon any of the assets of Seller pursuant to, any
provision of any mortgage, deed of trust, indenture or other agreement or
instrument, or any order, judgment, decree or any other restriction of any kind
or character, to which Seller are a party or by which either of them or their
assets may be bound.
(d) Financial Statements. Seller heretofore has furnished to Buyer
true and complete copies of the unaudited balance sheets of Seller for the
periods ended [December 31, 2004, December 31, 2003 and December 31, 2002, and
the related statements of income for Seller for the periods then ended, together
with the notes thereto (the "Financial Statements"). The Financial Statements
were prepared in accordance with generally accepted accounting principles,
consistently applied, and present fairly the financial position, results of
operations and cash flow of Seller as of the dates and for the periods
indicated.
(e) Proceedings. There are no claims, actions, disciplinary
proceedings, notices to initiate litigation, litigation, other proceedings or
investigations (collectively, "Proceedings") pending or threatened against or
relating to Seller or any of the Assets, and to the best of Seller's knowledge,
there is no basis therefor. Neither Seller nor any of its property is subject to
any order, judgment, injunction or decree that could affect the Assets or the
Business adversely.
(f) Inventory. The inventory is in marketable condition, is not
obsolete and, as of the date hereof and as of the Closing Date, Seller will have
at least fifteen (15) days supply of inventory on hand.
(g) Title to and Condition of Assets.
(i) At the Closing Date, Seller shall own all rights, titles and
interests, free and clear of all liens or payment obligations (except
the Permitted Liens, the Assumed Liabilities and those liabilities
that are satisfied prior to or simultaneously with the Closing), in
and to all of the Assets and, by execution and delivery of the Xxxx of
Sale, the Assignment and Assumption of Ancillary Agreements, will vest
Buyer with full right, title and interest in such Assets, free and
clear of all claims, liabilities or restrictions, except for the
Assumed Liabilities.
(ii) There are no lawsuits, proceedings, claims or governmental
investigations pending or threatened against Seller that question the
validity of Seller' rights or good title regarding the Assets.
(iii) All Tangible Personal Property is in proper working
condition.
(h) Purchase Agreement. The representations and warranties of Mulch
Masters and Shareholders set forth in the Purchase Agreement are incorporated
herein by this reference as if fully set forth herein.
(i) Intellectual Property. To the best of Seller's and Shareholders'
knowledge, Seller has the right to use all intellectual property used in
connection with the Business as presently being conducted, and no claim has been
made against Seller that such use violates the rights of any third party. All
-6-
intellectual property is free from any security interest, lien, encumbrance or
restriction, there is no default with respect thereto on the part of Seller, and
no intellectual property has been or is now being challenged in any way or
involved in any pending or threatened infringement, unfair competition or other
proceeding. To the best of its knowledge, Seller is not infringing the rights of
any other person or entity with respect to any intellectual property nor has it
received any claim of any such infringement or violation. Seller represents that
it neither owns nor uses in the Business any patents, copyrights, or trademarks
(other than common law rights it may have to the use of its name "State Line
Bark & Mulch") and no representation or warranty is made as to ownership or use
of any such patent, trademark or copyright.
(j) Absence of Certain Events. Since December 31, 2004, the Business
has been conducted only in the ordinary course and there has not been (i) any
materially adverse change or, to the knowledge of Seller, any event that
involved any significant possibility of a materially adverse change in the
Assets or the condition (financial or otherwise), liabilities, business,
operations or affairs of Seller; (ii) any damage, destruction or casualty loss,
whether covered by insurance or not, materially and adversely affecting the
Assets; (iii) any entry into or modification of any material agreement,
commitment or transaction (including without limitation any borrowing, capital
expenditure or capital financing) by Seller, except for the entry into of
agreements, commitments or transactions in the ordinary course of business or as
contemplated by or referred to in this Agreement or the Schedules hereto; or
(iv) any material change by Seller in its accounting methods, principles or
practices.
(k) Governmental Permits. Seller has been and is in substantial
compliance with all material permits, licenses, orders and approvals of all
federal, state, local or foreign governmental or regulatory bodies required for
it with respect to the Business, all of which are listed in Schedule 2.1(k). All
such permits, licenses, orders and approvals are in full force and effect, and
no suspension or cancellation, nor any proposed adverse modification, of any of
them is pending or, to the best knowledge of Seller, threatened. No consent of
any governmental or regulatory body issuing such permits, licenses, orders and
approvals is necessary for the transfer thereof, or the consummation of the
transactions contemplated by this Agreement. With respect to the Business,
Seller has paid all installments of sales taxes, income taxes, payroll taxes,
employment taxes, ad valorem taxes or other taxes due to any governmental agency
and has not received any notice of non-payment, delinquency, audit or levy with
respect to any taxes.
(l) Solvency. The sale and transfer of the Assets pursuant to this
Agreement will not render Seller insolvent (within the meaning of the Uniform
Fraudulent Conveyance Act or 11 U.S.C. ss. 101(31)).
(m) Disclosure. Seller has made available for inspection and copying
by Buyer and its advisers true, complete and correct copies of all documents
referred to in this Article II or in any Schedule furnished to Seller by Buyer.
To the best of its knowledge, Seller has not made any representation or warranty
in this Agreement, or furnished any statement, certificate, schedule, list or
other information to Buyer in connection with this Agreement, which contains any
untrue statement of a material fact, or omits to state a material fact necessary
in order to make the statements herein or therein not misleading.
-7-
(n) Agreements. The Ancillary Agreements are in full force and effect,
enforceable in accordance with their terms. All parties thereto have performed
in all material respects all of the obligations required to be performed by them
to date and, to the knowledge of Seller and Shareholders, are not in default
thereunder in any material respect.
(o) Employee Relations. All of the employees of Seller leased by
Seller and used in the Business are listed on Schedule 2.1(o) (the "Employees").
Seller acknowledges that Buyer has no obligation to employ the Employees. Seller
represents that its relationships with its Employees are good and Seller does
not know of, or have any reason to believe that, the sale of the Assets or the
Business will in any way jeopardize the continued relationship of such Employees
with the Business subsequent to the sale to Buyer, should the Buyer so choose,
in its sole discretion. There are no contracts, leases, employment contracts,
accrued vacation or employee benefits, including but not limited to, pension,
401(k), deferred compensation or other employee obligations, debts, liabilities,
employee taxes, state or federal taxes that shall remain due and payable after
Closing other than such liabilities as may be payable in ordinary course of
business after Closing, which amount Seller agrees to pay.
(p) Right of Offset. Seller acknowledges that Buyer shall have a right
to offset any amounts due to Seller after the Closing by any amount due and
owing to Buyer based on Seller's obligations under this Agreement or the
Purchase Agreement, including without limitation amounts due to Buyer pursuant
to Article VII or Section 2.1(q) of this Agreement. Buyer's right of setoff may
be exercised by delivery of a Claims Notice to Escrow Agent, whereupon Buyer
shall be entitled to immediate payment from the Escrow Funds, in accordance with
the terms of the Escrow Agreement.
(q) Proration of Expenses and Liabilities. Seller will be responsible
for all liabilities incurred by the Business through the Effective Time and
Buyer will pay to Seller at Closing the pro-rated portion of amounts prepaid by
Seller (the "Prepaid Amounts") prior to closing. An accounting of costs
requiring proration, such as property taxes, payroll taxes, etc. will be made by
Seller, with a right of review by Buyer. Any liabilities (other than Assumed
Liabilities) not paid for by Seller at Closing (or offset against the Cash
Consideration at Closing) shall be offset against any amounts due to Seller
after the Closing. In the event such liabilities, if any, exceed the amount of
payments then due to Seller (the "Shortfall"), then Seller shall immediately pay
to Buyer, in certified funds, an amount equal to the Shortfall. Buyer may, at
its option, exercise its right of setoff against the Escrow Funds, by delivery
of a Claims Notice to Escrow Agent, whereupon Buyer shall be entitled to
immediate payment from the Escrow Funds, in accordance with the terms of the
Escrow Agreement, or may proceed directly to demand and action against Seller
for repayment of any Shortfall. Prepaid Amounts not otherwise set for in
Schedule 1.5 shall be paid by Buyer to Seller immediately.
2.2 Representations and Warranties of Buyer.
Buyer represents and warrants to Seller as follows:
(a) Organization and Power of Buyer. As of the Closing, Buyer will be
duly organized, validly existing and in good standing under the laws of the
-8-
state of its organization, duly qualified to do business as a foreign
corporation in each jurisdiction in which the conduct of business or the
ownership or lease of property requires or makes it desirable for it to be so
qualified, and has or will have all requisite corporate power and authority to
enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
(b) Authority Relative to Agreement. As of the Closing, the execution,
delivery and performance of this Agreement by Buyer, and the consummation by
Buyer of the transactions contemplated hereby, will have been duly authorized
and/or ratified by all necessary action on the part of Buyer. Buyer has duly
executed and delivered this Agreement. This Agreement constitutes a valid and
binding obligation of Buyer, enforceable in accordance with its terms.
(c) Effect of Agreement. To the best of Buyer's knowledge, the
execution, delivery and performance of this Agreement by Buyer, and the
consummation by Buyer of the transactions contemplated hereby, do not and will
not (i) violate any statute, rule, regulation or law applicable to Buyer; (ii)
require any consent, waiver, approval, license or authorization of, or filing
with any person or entity; or (iii) with or without the giving of notice or the
passage of time or both, conflict with or result in a breach or termination of,
constitute a default under Buyer's Articles of Incorporation or Bylaws, or
result in the creation of any lien, charge or encumbrance upon any of the assets
of Buyer pursuant to any provision of any mortgage, deed of trust, indenture or
other agreement or instrument, or any order, judgment, decree or any other
restriction of any kind or character, to which Buyer is a party or by which it
or its assets may be bound.
(d) Absence of Certain Events. To the knowledge of Buyer, no event
exists that relating to the condition (financial or otherwise), liabilities,
business, operations or affairs of Buyer which could reasonably be expected to
have a material adverse impact on the transactions contemplated in this
Agreement.
(e) Disclosure. No representation or warranty contained in this
Agreement, and no statement, certificate, schedule, list or other information
furnished or to be furnished by or on behalf of Buyer to Seller in connection
with this Agreement, contains or will contain any untrue statement of a material
fact, or omits to state or will omit to state a material fact necessary in order
to make the statements herein or therein not misleading.
(f) Solvency. The acquisition of the Assets pursuant to this Agreement
will not render Buyer insolvent (within the meaning of the Uniform Fraudulent
Conveyance Act or 11 U.S.C. ss.101 (31)).
ARTICLE III
COVENANTS OF SELLER AND SHAREHOLDERS
------------------------------------
Seller and Shareholders hereby jointly and severally covenant and agree
with Buyer as follows:
3.1 Conduct of Business. During the period from the date of this Agreement
to the Closing, Seller shall conduct operations in the ordinary and
-9-
usual course of business and maintain good relationships with its suppliers,
creditors, clients and others having business relationships with it. During the
period from the date of this Agreement to the Closing, Seller shall not (i)
sell, assign, lease, transfer or dispose of any of the Assets, (ii) mortgage,
pledge or encumber any of the Assets, (iii) amend or terminate any of the
Ancillary Agreements, except as approved by Buyer, (iv) enter into or become a
party to any material contract, agreement or lease, except in the ordinary
course of business, or (v) enter into any transaction or take any action that is
not in the ordinary course of business as historically conducted by Seller.
Seller shall not accept any prepaid orders for Products nor grant any purchaser
pricing or payment terms outside the ordinary course of business. Seller shall
notify Buyer of any change in the ordinary course of business or in the
operation of the Assets or properties of Seller and of any governmental
complaints, investigations or hearings (or communication indicating that the
same may be contemplated), adjudicatory proceedings or submissions involving any
material portion of the Assets and shall keep Buyer fully informed of such
events and permit its representatives prompt access to all materials prepared in
connection therewith. Shareholders also agree to personally introduce Xxxxxxx X.
Xxxxxxx and Xxxx Xxxxxx to the timber, bark and wood products vendors of Seller.
3.2 Consents to Assignment. Seller shall (a) prior to Closing use its best
efforts to obtain all consents required of third parties in connection with the
assignment of the Ancillary Agreements, and (b) indemnify Buyer for any payments
due but not paid and relating to periods prior to the Closing Date or defaults
incurred under the Ancillary Agreements up to and on the Closing Date.
3.3 Current Information. Seller shall advise Buyer in writing, as soon
as practicable but in no event later than one day prior to the Closing, of: (a)
the occurrence of any event that renders any of the representations or
warranties of Seller herein misleading or inaccurate; and (b) the failure of
Seller to perform any of its covenants or agreements set forth herein. Seller
also shall provide to Buyer promptly upon their becoming available copies of all
financial reports prepared by or for the conduct of the Business prior to the
Closing Date.
3.4 Confidentiality. Except as may be required by law, Seller from and
after the date hereof shall, and shall cause their officers, directors,
employees, attorneys, accountants, representatives, agents and affiliates to,
maintain in strict confidence, and shall not disclose to anyone other than those
persons with a need to know (who shall be under a similar obligation of
confidentiality), the existence of this Agreement, the proposed sale of the
Assets, or any and all information regarding Buyer; provided that, this
restriction shall not apply to (a) information in the public domain; (b)
information in the possession of Seller without restriction as to use or
disclosure and not acquired from Buyer; and (c) information obtained from third
parties who were lawfully in possession of it and under no obligation of secrecy
with respect thereto. Nothing in this paragraph shall be construed as a
restriction upon Seller's right to request and receive any and all information
it, in its sole discretion, deems necessary in order to consent to the
transaction contemplated by this Agreement.
3.5 Best Efforts. Seller shall use its commercially reasonable best
efforts to fulfill all of the conditions set forth in this Agreement over which
it has control or influence (including but not limited to obtaining any
authorizations, consents, approvals or waivers hereunder) and to consummate the
transactions contemplated herein.
-10-
3.6 Further Assurances. Seller shall deliver or cause to be delivered
such additional documents and take such additional actions on the Closing Date
and at such other times and places before or after Closing as Buyer reasonably
may request for the purpose of carrying out the provisions of this Agreement.
3.7 Quality Standards. For the period from the date hereof until the
Closing Date, Seller shall use reasonable efforts to operate the Business in a
manner that maintains operating standards and quality consistent with the
standards and quality established by Seller prior to the date hereof, and do so
in the most economical and cost efficient manner.
3.8 Employees. At Closing, Seller shall deliver to Buyer Schedule 3.8
setting forth all employee wages, benefits (including accrued and unused or
unpaid holiday, vacation, sick or personal days), union dues and other financial
obligations of the Business relative to employees of the Business through the
Closing Date (as to each employee, the "Accrued Employee Liability"). Buyer
agrees to furnish to Seller on or promptly after the ninety-first (91st) day
following the Closing Date, a list of all employees who remained employed by
Buyer on the ninetieth (90th) day following the Closing Date (the "Retained
Employees"). Such notice shall also include a calculation of the sum of Accrued
Employee Liability for each Retained Employee, which amount shall be deducted
from the Escrow Funds, in accordance with the terms of the Escrow Agreement.
Seller has represented to Buyer that Seller will terminate all employees of the
Business as of the Closing Date. Nothing in this Agreement will obligate Buyer
to continue the employment of any employee of Seller.
3.9 Covenant Not to Compete. Seller and Shareholders agree to execute and
deliver a Non-Compete Agreement in substantially the form attached hereto as
Exhibit D (the "Non-Compete Agreement").
3.10 Exclusive Dealing. Until the later of thirty (30) days after the date
this Agreement is signed by both parties, or the earlier termination hereof, the
Seller and Shareholders will not, directly or indirectly, enter into any
agreement, discussion, or negotiation with, or provide information to, any other
corporation, firm or other person, or solicit, encourage, entertain or consider
any inquiries or proposals, with respect to (a) the possible sale or other
disposition of the Assets or the Property, or (b) any business combination
involving the Business, whether by way of merger, consolidation, share exchange
or other transaction.
3.11 License Agreement. Shareholders shall cause their affiliate, Mulch
Masters, Inc., to enter into that certain License Agreement in substantially the
form attached hereto as Exhibit G (the "License Agreement"), granting to Buyer a
royalty-free, non-exclusive license to use the "Wild Earth" trademark for a
period ending on the nine (9) month anniversary of the Closing Date.
3.12 Post-Closing Covenants.
(a) General. In case at any time after the Closing any further action
is necessary to carry out the purposes of this Agreement, each of the Parties
will take such further action (including the execution and delivery of such
further instruments and documents) as any other Party reasonably may request,
-11-
all at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Article VII hereof).
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(a) any transaction contemplated under this Agreement or (b) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Business, the Assets or the Property, each of
the other Parties shall cooperate with him, her, or it and his, her, or its
counsel in the defense or contest, make available his, her, or its personnel,
and provide such testimony and access to his, her, or its books and records as
shall be necessary in connection with the defense or contest, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Article VII
hereof).
(c) Transition. Neither Seller nor Shareholders will take any action
that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of the Seller from
maintaining the same business relationships with the Business after the Closing
as it maintained with the Seller prior to the Closing.
ARTICLE IV
COVENANTS OF BUYER
Buyer hereby covenants and agrees with Seller as follows:
4.1 Confidentiality. Except as may be required by law or regulation
(including the federal securities laws and regulations) or as deemed advisable
by counsel to Buyer, Buyer shall, and shall cause its officers, directors,
employees, attorneys, accountants, representatives, agents and affiliates to,
maintain in strict confidence, and shall not disclose to anyone other than those
persons with a need to know (who shall be under a similar obligation of
confidentiality), any confidential information of Seller or any information
regarding Seller or the Assets, until the Closing Date; provided that, this
restriction shall not apply to (a) information in the public domain; (b)
information in the possession of Buyer without restriction as to use or
disclosure and not acquired from Seller; and (c) information obtained from third
parties who were lawfully in possession of it and under no obligation of secrecy
with respect thereto. Nothing in this paragraph shall be construed as a
restriction upon Buyer's right to disclose, request and receive any and all
information it, in its sole discretion, deems necessary in order to consummate
the transactions contemplated by this Agreement, including without limitation,
inquiries of banks, insurance companies and other third parties, or to disclose
such information as may be required by or necessary or appropriate in connection
with legal proceedings or to comply with applicable securities laws or the rules
of any stock exchange or securities markets on which the common stock of Buyer
or its parent entity trades. In that regard, Seller acknowledges that Buyer will
be making a public disclosure of this Agreement and the transactions
contemplated hereby, in accordance with its obligations under applicable federal
securities laws. In the event the transactions contemplated hereby are not
consummated for any reason, the Buyer will return to the Seller any materials
containing confidential information of the Seller or will certify in writing
that all such materials and copies thereof have been destroyed. The provisions
of this Section 4.1 shall survive termination of this Agreement.
-12-
4.2 Best Efforts. Buyer shall use best efforts to fulfill all of
the conditions set forth in this Agreement over which it has control or
influence (including but not limited to obtaining any authorizations, consents,
approvals or waivers hereunder) and to consummate the transactions contemplated
herein.
4.3 Further Assurances. Buyer shall deliver or cause to be delivered
such additional documents, and take such additional actions on the Closing Date
and at such other times and places, before or after Closing, as Seller
reasonably may request for the purpose of carrying out the provisions of this
Agreement.
4.4 Current Information. Buyer shall advise Seller in writing, as soon
as practicable but in no event later than one day prior to the Closing, of: (a)
the occurrence of any event that renders any of the representations or
warranties of Buyer herein misleading or inaccurate; and (b) the failure of
Buyer to perform any of its covenants or agreements set forth herein.
4.5 Tree Storage. Buyer agrees that Seller and Shareholders may store
the Containerized Trees on the Property in accordance with the terms and
conditions of that certain Lease Agreement in substantially the form attached
hereto as Exhibit H (the "Lease Agreement").
ARTICLE V
CONDITIONS TO OBLIGATIONS OF BUYER
----------------------------------
Each and every obligation of Buyer under this Agreement to be performed at
the Closing shall be subject to the satisfaction, on or before the Closing Date,
of each of the following conditions, unless waived in writing by Buyer:
5.1 Representations and Warranties True.The representations and warranties
of Seller contained herein shall be true, complete and accurate in all material
respects as of the date when made and at and as of the Closing Date as though
such representations and warranties were made at and as of such date, and Seller
shall have delivered to Buyer on the Closing Date a Certificate, dated the
Closing Date, to such effect.
5.2 Performance. Seller shall have performed and complied with all
covenants, agreements, obligations and conditions required by this Agreement on
or prior to the Closing Date.
5.3 No Injunction. On the Closing Date, (a) there shall be no effective
injunction, writ, preliminary restraining order or any order of any nature
issued or threatened by a court or other governmental authority of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as so provided or imposing any conditions on the consummation
of the transactions contemplated hereby and (b) no action, suit or proceeding
shall be pending before any such court or other government authority seeking
such relief.
-13-
5.4 No Materially Adverse Change. From the date hereof through the Closing
Date, there shall have been no materially adverse change in the Assets, or the
condition, financial or otherwise, the results of operations or the prospects of
the Business, and Seller shall have delivered to Buyer a Certificate, dated the
Closing Date, to such effect.
5.5 Required Consents. The parties shall have received all required
consents and approvals from third parties.
5.6 Satisfaction of Due Diligence. The Buyer shall be satisfied with its
due diligence review of the Property and the Business which will include, but
not be limited to, the financial and operational records related to the
Business, environmental due diligence of the Property, and the review of such
records as are deemed pertinent by Buyer. Seller agrees to provide the Buyer and
its representatives with prompt and reasonable free access to the executives of
the Seller and to properties, books, records, contracts and other information
pertaining to the Business and the Assets.
5.7 Key Employee.The Buyer shall have entered into an employment agreement
with Xxx Xxxxxxxx on terms and conditions satisfactory to each.
5.8 Supply Agreement. The Seller shall execute and deliver to Buyer, and
Shareholders shall cause their affiliate, Mulch Masters, Inc., to execute and
deliver to Buyer, a Supply Agreement in the form of Exhibit E attached hereto
(the "Supply Agreement"), pursuant to which Mulch Masters, Inc. will agree to
purchase from Buyer a supply of Products in an amount not less than its average
purchases from Seller for the three (3) year period preceding Closing.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SELLER
-----------------------------------
Each and every obligation of Seller under this Agreement to be performed at
the Closing shall be subject to the satisfaction, on or before the Closing Date,
of each of the following conditions by Buyer, unless waived in writing by
Seller:
6.1 Representations and Warranties True. The representations and
warranties of Buyer contained herein shall be true, complete and accurate in all
material respects as of the date when made and at and as of the Closing Date as
though such representations and warranties were made at and as of such date, and
Buyer shall have delivered to Seller on the Closing Date a Certificate, dated
the Closing Date, to such effect.
6.2 Performance. Buyer shall have performed and complied with all
covenants, agreements, obligations and conditions required by this Agreement on
or prior to the Closing Date.
-14-
6.3 No Injunction. On the Closing Date, (a) there shall be no effective
injunction, writ, preliminary restraining order or any order of any nature
issued or threatened by a court or other governmental authority of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as so provided or imposing any conditions on the consummation
of the transactions contemplated hereby and (b) no action, suit or proceeding
shall be pending before any such court or other government authority seeking
such relief.
6.4 Required Consents. The parties shall have received all required
consents and approvals from third parties.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
--------------------------------------------
7.1 Survival of Representations.
(a) The representations, warranties, indemnities, covenants and
agreements made by Seller, Mulch Masters and Shareholders under this Agreement,
the Purchase Agreement or pursuant hereto or thereto, as of the Closing Date
shall survive until the second anniversary of the Closing Date.
(b) The representations, warranties, covenants and agreements made by
Buyer under this Agreement and the Purchase Agreement, or pursuant hereto or
thereto, as of the Closing Date shall survive until the second anniversary of
the Closing Date.
(c) Seller and Shareholders hereby agree to indemnify and to hold
Buyer harmless from, against and in respect of damage, loss or liability
incurred by Buyer arising out of (i) any misrepresentation, breach of warranty
or nonfulfillment of any covenant or agreement of Seller, Mulch Masters or
Shareholders made under or pursuant to this Agreement or the Purchase Agreement,
or (ii) any debts, obligations or liabilities of Seller, Shareholders or the
Business arising before the Closing Date, including but not limited to any
debts, obligations or liabilities of Seller, Shareholders or the Business that
have not been expressly assumed by Buyer.
(d) Buyer hereby agrees to indemnify and to hold Seller harmless from,
against and in respect of damage, loss or liability incurred by Seller arising
out of (i) any misrepresentation, breach of warranty or non-fulfillment of any
covenant or agreement of Buyer made pursuant to this Agreement or the Purchase
Agreement, or (ii) any debts, obligations, or liabilities of Buyer arising after
the Closing Date or (iii) the Assumed Liabilities.
(e) Any sums due and payable to Buyer and arising out of a breach of
any of the representations, warranties, indemnities, covenants and agreements
made by Seller, Shareholders or Mulch Masters under this Agreement, the Purchase
Agreement or pursuant hereto or thereto, shall be immediately due and payable on
demand, and if not paid, may be satisfied by Buyer's delivery of a Claims Notice
to Escrow Agent, whereupon Buyer shall be entitled to immediate payment from the
Escrow Funds, in accordance with the terms of the Escrow Agreement.
-15-
(f) Any sums due and payable to Seller arising out of a breach of any
of the representations, warranties, indemnities, covenants and agreements made
by Buyer under this Agreement, the Purchase Agreement or pursuant hereto or
thereto, shall be immediately due and payable on demand.
7.2 Procedures Relating to Indemnification.The obligations and liabilities
of the parties pursuant to the terms of this Agreement, with respect to claims
made by third parties against a party, shall be subject to the following terms
and conditions:
(a) The party receiving such a claim or notice of such a claim (the
"indemnitee") will give to the other party (the "indemnifying party") prompt
notice of any such claim, and the indemnifying party shall have the right to
undertake (at the indemnifying party's sole cost and expense) the defense
thereof by representatives chosen by the indemnifying party and reasonably
acceptable to the indemnitee.
(b) If the indemnifying party , within a reasonable time after notice
of any such claim, fails to defend the indemnitee against such claim, then the
indemnitee will (upon further notice to the indemnifying party ) have the right
to undertake the defense, compromise or settlement of such claim on behalf of
and for the account and risk of the indemnifying party , subject to the
indemnifying party 's right to assume the defense of such claim at any time
prior to settlement, compromise or final determination thereof.
(c) Anything in this Section 7.2 to the contrary notwithstanding, (i)
if there is a reasonable probability that a claim may materially and adversely
affect the indemnitee other than as a result of money damages or other money
payments, then the indemnitee shall have the right, at the cost and expense of
the indemnifying party , to defend, compromise or settle such claim, and (ii)
the indemnifying party shall not, without the written consent of the indemnitee,
settle or compromise any claim or consent to the entry of any judgment.
(d) In connection with all claims defended hereunder, the indemnitee
will give the indemnifying party prompt written notice of all material
developments in connection with all claims, will promptly supply the
indemnifying party with all papers, documents and evidence in the indemnitee's
possession and such other information within the indemnitee's knowledge
pertinent to such claims, and will produce at the appropriate place or places,
at reasonable times, such witnesses under the indemnitee's control as may
reasonably be requested by the indemnifying party or its' representatives.
7.3 Limitation on Indemnification.
(a) Notwithstanding the provisions of Section 7.1 and 7.2, Seller and
Shareholders shall not have any obligation to indemnify Buyer from and against
any Adverse Consequences (i) until Buyer has suffered Adverse Consequences by
reason of all such breaches in excess of a Ten Thousand Dollar ($10,000.00)
aggregate deductible, after which point Sellers will be obligated to indemnify
Buyer from and against further Adverse Consequences, (ii) until such time as the
Adverse Consequences Buyer has suffered by reason of all such breaches equal the
Purchase Price, after which point Sellers will have no obligation to indemnify
Buyer from and against further such Adverse Consequences.
-16-
(b) As used herein, "Adverse Consequences" means all actions, suits,
charges, proceedings, hearings, investigations, complaints, claims, demands,
injunctions, orders, decrees, judgments, rulings, damages, dues, penalties,
fines, costs, liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses,
suffered or incurred by Buyer and arising out of or in connection with this
Agreement and the transactions contemplated hereby, or the ownership and
operation of the Assets after Closing, whether arising pursuant to claims under
this Article VII, or otherwise.
ARTICLE VIII
TERMINATION
-----------
8.1 Methods of Termination. This Agreement may be terminated prior to
the Closing:
(a) By mutual written agreement of the Buyer and Seller;
(b) By Seller or Buyer if the other party breaches the terms of this
Agreement or fails to satisfy the conditions to Closing imposed under Articles V
or VI, as applicable; or
(c) By Seller or Buyer if the Closing has not taken place by March 15,
2005.
8.2 Procedure Upon Termination. Upon termination under any method of
termination as set forth in Section 8.1 hereof, this Agreement shall terminate
and the transactions contemplated hereby shall be abandoned, without further
action by Buyer or Seller. Each party shall return any documents or copies in
their possession furnished by the other in connection with the transactions
contemplated by this Agreement. If this Agreement is terminated as provided
herein, then and in that event, no party to this Agreement shall have any
liability or further obligation to any other party to this Agreement with
respect to this Agreement or the transactions contemplated hereby; provided,
however, that nothing in this section shall relieve Seller of liability for a
breach of any provision of this Agreement occurring prior to such termination.
ARTICLE IX
BROKERS
-------
Neither Buyer, nor Seller, nor any of their respective shareholders,
officers, directors or employees has taken any action with respect to any broker
or finder that would give rise to any liability on the part of any party hereto
or incurred any liability for any brokerage fees, commissions or finders' fees
in connection with the transactions contemplated by this Agreement which would
give rise to any liability on the part of any party hereto. Each party hereto
will indemnify, defend and hold harmless the other parties hereto against any
claims by any broker or finder claiming by, through or under such party.
-17-
ARTICLE X
OBLIGATIONS OF SELLER AFTER CLOSING
-----------------------------------
10.1 For a period from the Closing Date to the thirtieth (30th) day
thereafter, Shareholders agree to make themselves available to Buyer to
introduce Buyer to principal customers, suppliers and others, as Buyer deems
appropriate in its reasonable judgment. Such assistance under this Section 10.1
shall not exceed 20 hours per week for the 30 days following the Closing Date.
10.2 Neither Seller nor the Shareholders shall receive any additional
consideration for their obligations pursuant to this Article X.
ARTICLE XI
EXPENSES
--------
Seller and Buyer agree that each party will pay and be responsible for its
own expenses with respect to this Agreement, the purchase of the Assets by Buyer
and all transactions and matters contemplated thereby.
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
12.1 Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified and supplemented only by written agreement of the
parties hereto with respect to any of the terms contained herein.
12.2 Waiver of Compliance. Any failure of Buyer, on the one hand, or
Seller, on the other hand, to comply with any obligation, covenant, agreement or
condition herein may be expressly waived in writing by Buyer or Seller, as
applicable, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure of such party
to comply.
12.3 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or nationally recognized overnight courier
service, with postage prepaid:
(a) If to Buyer: Xxxxx State Line, Inc.
Xxxxxxxxx 000, Xx. 0.0
Xxxx Xxxx, Xxxxxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
With a copy to: G. Xxxx Xxxxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx Xxxx & Xxxxxx, P.A.
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
-18-
or to such other person or address as Buyer shall furnish to Seller in writing:
(b) If to Seller or -----------------------
Shareholders: -----------------------
-----------------------
Attn: Xxxxxxx X. Xxxxxxx
With a copy to: Xxxxxxx X. Xxxxxx, Xx., Esq.
Xxxxxx Towers, P.A.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
or to such person or address as Seller shall furnish to Buyer in writing.
12.4 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No assignment may occur without the prior
written approval of the other party. Notwithstanding the foregoing, (i)
Shareholders and Seller expressly agree that Buyer may assign this Agreement to
an entity that owns or controls, is owned or controlled by, or under common
control with, Buyer, and (ii) in the event Seller is liquidated, all rights of
Seller under this Agreement including rights under the Purchase Agreement and
all other rights to receive payments or enforce the covenants and agreements
made by Buyer under this Agreement and the Purchase Agreement may be assigned by
Seller.
12.5 Press Releases. All press releases and public announcements, if any,
relating to the transaction contemplated by this letter of intent will be agreed
to jointly by the Seller and the Buyer, provided that the Buyer will be entitled
to issue any press release which is required or it deems advisable upon the
advice of counsel to comply with the requirements of applicable law or
regulations, including the federal securities laws or the rules of any stock
exchange or securities markets on which the common stock of Buyer or its parent
entity trades.
12.6 Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Florida applicable to contracts made and to be performed in that
State.
12.7 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.8 Recitals and Headings. The Recitals to this Agreement are hereby
incorporated herein and made part of this Agreement. The headings of the
Sections and Articles of this Agreement are inserted for convenience only and
shall not constitute a part hereof or affect in any way the meaning or
interpretation of this Agreement.
-19-
12.9 Entire Agreement. This Agreement sets forth the entire understanding
between the parties concerning the subject matter of this Agreement and
incorporates all prior negotiations and understandings. There are no covenants,
promises, agreements, conditions or understandings, either oral or written,
between the parties relating to the subject matter of this Agreement, other than
those set forth herein.
12.10 Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or entity other than the parties hereto and
their successors or assigns any rights or remedies under or by reason of this
Agreement.
12.11 Strict Construction. The language used in this Agreement shall be
deemed to be in the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
12.12 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remaining provisions of the Agreement.
12.13 Costs of Enforcement. In the event either party initiates action to
enforce its rights hereunder, the substantially prevailing party shall recover
from the substantially non-prevailing party its reasonable expenses, costs,
including but not limited to taxed and untaxed costs, and reasonable attorneys'
and paralegals' fees, whether suit be brought or not (jointly referred to as
"Expenses"). As used herein, Expenses include Expenses incurred in any appellate
or bankruptcy proceeding. All such Expenses shall bear interest at the rate of
ten percent (10%) from the date the substantially prevailing party pays such
Expenses until the date the substantially non-prevailing party repays such
Expenses. Expenses incurred in enforcing this paragraph shall be covered by this
paragraph.
12.14 Necessary Documents. All parties agree to sign any necessary
documents to implement this Agreement.
12.15 Time of the Essence. Time is of the essence for performance
hereunder.
-20-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SELLER:
STATE-LINE BARK & MULCH, INC.,
a Georgia corporation
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Its Authorized Officer
SHAREHOLDERS:
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxx
----------------------------------
Xxxx X. Xxxxxxx
BUYER:
XXXXX STATE LINE, INC.,
a Florida corporation
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Its Authorized Officer
-21-
INDEX TO EXHIBITS AND SCHEDULES
Schedule 1.1(a) Tangible Personal Property
Schedule 1.1(e) Ancillary Agreements
Schedule 1.2 Assumed Liabilities
Schedule 1.5 Adjustments to Purchase Price
Schedule 1.7 Purchase Price Allocation
Schedule 2.1(k) Permits
Schedule 2.1(o) Employees
Schedule 3.8 Accrued Employee Liability
Exhibit A Form of Purchase Agreement
Exhibit B Xxxx of Sale
Exhibit C Assignment and Assumption of Ancillary Agreements
Exhibit D Form of Non-Compete Agreement
Exhibit E Form of Supply Agreement
Exhibit F Form of Escrow Agreement
Exhibit G Form of License Agreement
Exhibit H Form of Lease Agreement
EXHIBIT A
FORM OF PURCHASE AGREEMENT
EXHIBIT B
XXXX OF SALE
State-Line Bark & Mulch, Inc., a Georgia corporation ("Seller"), for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby grants, bargains, sells, transfers and delivers to Xxxxx
State Line, Inc., a Florida corporation ("Buyer"), and its successors and
assigns, the Assets, as defined in the Asset Purchase Agreement between Seller
and Buyer of even date herewith (the "Asset Purchase Agreement").
Seller warrants to Buyer that: (i) Seller is the lawful owner of the
Assets; and (ii) the Assets are free and clear of all liens, charges, mortgages,
security interests, pledges and encumbrances of any nature whatsoever (other
than Permitted Liens, as defined in the Asset Purchase Agreement).
IN WITNESS WHEREOF, the undersigned have executed this Xxxx of Sale as of
the ____ day of February 2005.
STATE-LINE BARK & MULCH, INC.
By:
-----------------------------------
Its Authorized Officer
EXHIBIT C
ASSIGNMENT AND ASSUMPTION OF
ANCILLARY AGREEMENTS AND LIABILITIES
THIS ASSIGNMENT AND ASSUMPTION OF ANCILLARY AGREEMENTS AND LIABILITIES
dated as of the ___ day of February 2005, is by and between Xxxxx State Line,
Inc., a Florida corporation ("Buyer"), and State-Line Bark & Mulch, Inc., a
Georgia corporation ("Seller").
Recitals
This Agreement is delivered in connection with that certain Asset
Purchase Agreement by and between Buyer and Seller dated of even date herewith
(the "Asset Purchase Agreement"). Seller wishes to assign to Buyer its
respective rights and obligations under the agreements listed in Schedule 1.1(e)
to the Asset Purchase Agreement attached hereto (the "Ancillary Agreements"),
and Buyer wishes to assume Seller's rights and obligations under the Ancillary
Agreements. Buyer has also agreed to assume the Assumed Liabilities as described
in Schedule 1.2 to the Asset Purchase Agreement.
Agreement
In consideration of the representations, warranties, covenants and
agreements contained herein, intending to be legally bound, the parties hereto
agree as follows:
1. Assignment and Assumption of Ancillary Agreements. Seller hereby sells,
assigns, transfers and sets over to Buyer all of Seller's rights, title and
interest in and to the Ancillary Agreements. Buyer hereby accepts such
assignment and assumes and agrees to perform all obligations and liabilities
arising under the Ancillary Agreements after the date hereof. Seller shall
remain responsible for all of its obligations under the Ancillary Agreements
arising or accruing prior to the date hereof.
2. Assumption of Liabilities. Buyer hereby assumes and agrees to pay and
satisfy, in accordance with the terms thereof, the Assumed Liabilities.
3. Representations by Seller. Seller represents that no party has defaulted
in the payment of its obligations under the Ancillary Agreements or in the
performance of any of the terms, covenants, provisions and conditions of the
Ancillary Agreements. Seller further represents that the Ancillary Agreements
are in full force and effect according to the written terms and provisions
thereof, and Seller has the right to assign its rights and obligations
thereunder.
4. No Waiver. Notwithstanding the foregoing, nothing provided herein shall
be construed as a waiver by Seller of any claim or defense against any third
party relating to any breach or default by such third party occurring under an
Ancillary Agreement prior to the date hereof and Seller shall be permitted to
pursue or continue legal action with respect thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption of Ancillary Agreements to be duly executed and their respective
corporate seals to be affixed hereto, all as of the day and year first above
written.
SELLER:
STATE-LINE BARK & MULCH, INC.,
a Georgia corporation
By:
-------------------------------
Its Authorized Officer
BUYER:
XXXXX STATE LINE, INC.,
a Florida corporation
By:
--------------------------------
Its Authorized Officer
EXHIBIT D
---------
NON-COMPETE AGREEMENT
This Non-Compete Agreement is dated as of February ____, 2005 by and among
between State-Line Bark & Mulch, Inc., a Georgia corporation ("Seller"), Xxxxxxx
X. Xxxxxxx and Xxxx X. Xxxxxxx ("Shareholders") and Xxxxx State Line, Inc., a
Florida corporation ("Buyer").
Background
Buyer and Seller are party to that certain Asset Purchase Agreement dated
of even date herewith (the "Asset Purchase Agreement") pursuant to which Seller
agreed to sell and Buyer agreed to purchase substantially all of the business
and assets of Seller located in Folkston, Georgia. Shareholders are the sole
shareholders of Seller. As a condition to the purchase and sale of the Business
and the Assets (as defined in the Asset Purchase Agreement), Seller and the
Shareholders agreed to enter into this Non-Compete Agreement.
AGREEMENT
---------
Therefore, for good and valuable consideration paid pursuant to the Asset
Purchase Agreement, which consideration Shareholders will receive the benefit
of, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Recitals and Definitions. The foregoing recitals are true and correct
and are hereby incorporated into this Agreement. Any interpretation or
construction of this Agreement shall be considered in light of the recitals. Any
capitalized terms used herein without definition shall have the meanings
assigned to them in the Asset Purchase Agreement.
2. Non-Competition. During the period commencing on the date hereof and
ending three (3) years thereafter, neither Seller nor the Shareholders shall
directly or indirectly, (i) engage in any activity or business that in any way
competes with the business of Buyer, including without limitation the production
of bulk or bagged garden cover, soil or compost products or related products
(collectively, the "Products") within the Restricted Area (as defined below), or
(ii) contact any customers or suppliers of Buyer for purposes of directly or
indirectly engaging in the activities described in subsection (i) above for such
period. Provided, however, Buyer acknowledges that the Shareholders are also the
owners and operators of "Mulch Masters, Inc.," which is engaged in the
distribution and sales of Products, and Buyer hereby consents to Shareholders
continuing the business of Mulch Masters, Inc., as it is presently conducted,
notwithstanding the provisions of this Non-Compete Agreement.
For purposes of this Agreement, the term "Restricted Area" shall mean the
states of Georgia, Alabama, Florida, South Carolina and Tennessee, the
Commonwealth of Puerto Rico and the Caribbean.
For purposes of this Agreement, the term "directly or indirectly" shall
include, but not be limited to: (a) acting as an agent, representative,
consultant, officer, director, independent contractor, or employee of any entity
or enterprise; (b) lending money to, guaranteeing the debts or obligations of or
permitting one's name to be used in connection with, or (c) participating
directly or indirectly in any such entity or enterprise as an owner, partner,
limited partner, joint venturer, material creditor or stockholder (except as a
stockholder holding less than a two percent (2%) interest in a corporation whose
shares are traded on a national securities exchange or in the over-the-counter
market).
For purposes of this Agreement, a "customer" means any corporation,
association, partnership, organization, business, individual or governmental
agency (a "Person") within the Restricted Area to whom Buyer or Seller provides
or has provided Products, or who is otherwise actively involved in a business
relationship with Buyer or Seller in connection with such sales or services,
including, without limitation, any person within such Restricted Area that Buyer
is actively soliciting at any time during the term of this Agreement.
3. Confidentiality. Seller and Shareholders acknowledge that they are in
possession of certain confidential and proprietary information pertaining to the
Business and the Assets, all of which contribute to the goodwill of the Business
and all of which are transferred, sold and assigned to Buyer pursuant to the
Asset Purchase Agreement. Therefore, Seller and Shareholders agree that at no
time in the future will they disclose, discuss or reveal to any third party,
whether directly or indirectly, any proprietary, confidential or non-public
information pertaining to the Business or the Assets, including without
limitation, customer lists, customer identities, sales figures, costs of
products, methods of operation, methods of production, inventory levels, pricing
structure, purchasing information, employee information or any other information
pertaining to the Business, except in consented to in writing by Buyer. The
restrictions set forth in this Section 3 are limited to information pertaining
to the Assets and Business. The Seller will continue to operate a similar
business, namely "Mulch Masters, Inc." and this restriction of confidentiality
shall not prevent Seller from conducting normal operations of such business.
4 . Nonsolicitation, Non-Recruitment and Non-Hiring Agreement. Seller and
Shareholders further agree that they will not, directly or indirectly, solicit,
recruit or hire any person (i) employed by Seller at any time within twelve (12)
months prior to the execution of this Agreement, or (ii) employed by the Buyer
at the time of or subsequent to execution of this Agreement.
5. Breach.
(a) The parties acknowledge that Buyer will suffer irreparable harm if
Shareholder or Seller breaches this Agreement at any time. Accordingly, Buyer
shall be entitled, in addition to any other right and remedy it may have, at law
or in equity, to an injunction, without the posting of a bond or other security,
enjoining or restraining Shareholder or Seller from any violation of this
Agreement, and Shareholder and Seller hereby consent to Buyer's right to the
issuance of such injunction. In any proceeding by Buyer to enforce any provision
of this Agreement, Buyer shall, in addition to any injunctive relief to which it
may be entitled, be awarded damages to be determined by a court of competent
jurisdiction and all court costs, disbursements and attorneys' fees incurred by
Buyer.
(b) In the event Shareholder or Seller violate the terms of this
Agreement, the period of the restrictive covenant shall be extended, for an
additional period equal to twice the length of time from the beginning of the
violation until the later of:
(i) the date on which Shareholder and Seller cease such
violation; or
(ii) the date on which a court issues an order or judgment
enforcing the terms of the covenant.
(c) In the event Shareholder or Seller violates the terms of this
Agreement, they shall remit immediately to Buyer all profits, income and other
amounts received by such party, directly or indirectly, or received by any
person or entity related thereto, that may, in any way, be attributed to or
otherwise connected with such violation.
6. Miscellaneous.
(a) Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by written agreement of
the parties hereto with respect to any of the terms contained herein.
(b) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remaining provisions of the Agreement. If any provision of this
Agreement shall be found to be excessive in time or scope under applicable law,
such provision shall be deemed modified so as to give it the greatest degree of
effectiveness in accordance with applicable law.
(c) Waiver of Compliance. Any failure of Shareholder or Seller to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by Buyer, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure of such party to comply.
(d) Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered in accordance with the terms of the Asset Purchase
Agreement.
(e) Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither Shareholder nor Seller may
assign this Agreement, or any portion hereof, without the prior written approval
of Buyer. Notwithstanding the foregoing, Shareholder and Seller expressly agree
that Buyer may assign this Agreement to an entity that owns or controls, is
owned or controlled by, or under common control with, Buyer. In addition, this
Agreement shall be binding upon, and shall inure to the benefit of, any person
or entity that acquires, is acquired by, merges, or otherwise combines with
Buyer.
(f) Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Florida applicable to contracts made and to be performed in that
State, notwithstanding any conflicts of laws provisions to the contrary.
(g) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(h) Recitals and Headings. The Recitals to this Agreement are hereby
incorporated herein and made part of this Agreement. The headings of the
Sections and Articles of this Agreement are inserted for convenience only and
shall not constitute a part hereof or affect in any way the meaning or
interpretation of this Agreement.
(i) Entire Agreement. This Agreement sets forth the entire
understanding between the parties concerning the subject matter of this
Agreement and incorporates all prior negotiations and understandings. There are
no covenants, promises, agreements, conditions or understandings, either oral or
written, between the parties relating to the subject matter of this Agreement,
other than those set forth herein.
(j) Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation other than the parties hereto
and their successors or assigns any rights or remedies under or by reason of
this Agreement.
(k) Jurisdiction. The parties agree that any action hereunder shall be
taken in a state court of competent jurisdiction in Xxxxx County, Florida (the
"County"). The parties agree that should any action in enforcement of this
Agreement be undertaken in any federal court or in any other court outside of
the County, this Agreement shall serve as the filing party's unconditional
agreement to transfer said action, or dismiss it without prejudice for
re-filing, to a proper state court in the County.
(l) Strict Construction. The language used in this Agreement shall be
deemed to be in the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied for or
against any party hereto by reason of such party being deemed the draftsman
hereof.
(m) Costs of Enforcement. In the event either party initiates action
to enforce his, her or its rights hereunder, the substantially prevailing party
shall recover from the non-prevailing party its expenses, court costs, including
taxed and untaxed costs, and reasonable attorneys' fees, whether suit be brought
or not (jointly referred to hereafter as "Expenses"). As used herein, Expenses
include, but are not limited to, Expenses incurred in any workout,
administrative, appellate or bankruptcy proceeding. All such Expenses shall bear
interest at the rate of ten percent (10%) per annum from the date the
substantially prevailing party pays such Expenses until the date the
non-prevailing party repays such Expenses. Expenses incurred in enforcing this
paragraph shall be covered by this paragraph. For this purpose, the court is
requested by the parties to award actual costs and attorneys' fees incurred by
the substantially prevailing party, it being the manifest intention of the
parties that the substantially prevailing party be completely reimbursed for all
such costs and fees. The parties request that any inquiry by the court as to the
award of fees and costs shall be limited to a review of the substantially
prevailing party's affidavit of reasonable attorney fees and costs and any
independent affidavit as to reasonable attorney fees and costs in determining
whether the fees charged and hourly rates for such fees are consistent with the
fees and hourly rates routinely charged by the attorneys for the substantially
prevailing party.
(n) Necessary Documents. All parties agree to sign any necessary
documents to implement this Agreement.
(o) Time of the Essence. Time is of the essence for performance
hereunder.
IN WITNESS WHEREOF the parties hereto have executed and delivered this
Non-Compete Agreement as of the date first above written.
SELLER:
STATE-LINE BARK & MULCH, INC.,
a Georgia corporation
By:
---------------------------------
Its Authorized Officer
SHAREHOLDERS:
------------------------------------
Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
EXHIBIT E
---------
SUPPLY AGREEMENT
----------------
This Supply Agreement is entered into as of this ___ day of February,
2005, by and between Xxxxx State Line, Inc., a Florida corporation ("Supplier"),
and Mulch Masters, Inc., a Florida corporation ("Mulch Masters").
Background
Supplier entered into that certain Asset Purchase Agreement dated as of
February 9, 2005 (the "Asset Purchase Agreement") with State Line Bark & Mulch,
Inc. ("Seller") and Xxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxx (collectively,
"Shareholders"), pursuant to which Seller agreed to sell, and Supplier agreed to
purchase, substantially all of the business and assets of Seller located in
Folkston, Georgia. Shareholders are the sole shareholders of Seller and Mulch
Masters. As a condition to the purchase and sale of the Business and the Assets
of Seller, Shareholders agreed to cause Mulch Masters to enter into this Supply
Agreement. Capitalized terms used herein and not otherwise defined herein shall
have the meanings given to them in the Asset Purchase Agreement.
NOW THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, do hereby agree as follows:
Section 1. Supply and Purchase. Subject to the terms and conditions hereof,
Supplier agrees to sell to Mulch Masters, and Mulch Masters agrees to purchase
from Supplier, the bulk or bagged ground cover, soil and compost products and
related products that have been purchased from Supplier in the last three (3)
years (the "Products") in amounts not less than the three (3) year average
purchases of Products by Mulch Masters, as reflected on Schedule 1 attached
hereto. Notwithstanding the foregoing, if Supplier is unable to deliver any
ordered Product to Mulch Masters within seventy-two (72) hours, Mulch Masters
may purchase such Product from any third party; provided, however, for purposes
of satisfying the purchase requirements under this Section 1, Mulch Masters will
be deemed to have made such purchase from Supplier and such purchase shall count
for all purposes towards the satisfaction of the requirements hereunder.
Section 2. Price. The price for Products supplied hereunder shall be the
fair market price for Products sold on similar terms and in similar quantities
at the time of order. Payment shall be due net thirty (30) days from invoice.
For purposes of this Agreement, the fair market price for Products shall be the
lowest such price charged by Supplier to any customer of Supplier, on similar
terms and in similar quantities at the time of order.
Section 3. Quality Standards. The Products to be sold by Supplier to Mulch
Masters pursuant to this Agreement shall be of a quality comparable to the
Products produced by Seller and sold to Mulch Masters, in the three (3) year
period preceding the date hereof. If Supplier is unable to provide Mulch Masters
Products of comparable quality to the Products produced by Seller and sold to
Mulch Masters in the three (3) year period preceding the date hereof, as
determined by Mulch Masters in its reasonable good faith judgment, with respect
to every two (2) out of three (3) orders, Mulch Masters may immediately
terminate this Agreement.
Section 4. Term. This Agreement shall be for a term of three (3) years,
subject to earlier termination as set forth below. This Agreement may be renewed
upon written agreement of both parties at the expiration of its initial term.
Section 5. Termination. This Agreement may be terminated, at any time, as
follows:
a. Upon mutual agreement of the parties, in writing;
b. By Supplier, upon ninety (90) days prior written notice;
c. By Mulch Masters, in accordance with Section 3 hereof;
d. By Mulch Masters, upon the dissolution and liquidation
of its business, upon the sale of all or substantially all of the assets of the
business, or upon the sale of all of the stock of Mulch Masters by the
shareholders of Mulch Masters; and
e. By either party, upon a material default by the other
party (except for a default under Section 3 relating to the delivery of quality
Product), which default remains uncured for thirty (30) days after receipt of
written notice thereof; provided, however, in the event such default cannot be
reasonably cured within thirty (30) days, then such cure period shall be
extended for an additional thirty (30) days provided the defaulting party has
undertaken and continued all reasonable efforts to cure such default.
Upon expiration or termination of this Agreement for any reason, Mulch
Masters shall purchase from Supplier, at Supplier's cost, all bags in inventory
of Supplier bearing the Licensed Marks (as defined in that certain Trademark and
Trade Secret License Agreement dated of even date herewith between Supplier and
Mulch Masters.)
Section 6. Miscellaneous.
-------------
a. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and given in accordance with the notice provisions of the Asset Purchase
Agreement.
b. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
c. Severability. Every provision of this agreement is
intended to be severable. If any term or provision hereof is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the parties, and
such illegality, invalidity or unenforceability shall not affect the validity or
legality of the remainder of this agreement. If necessary to effect the intent
of the parties, the parties will negotiate in good faith to amend this agreement
to replace the unenforceable language with enforceable language which as closely
as possible reflects such intent.
d. Further Action. Each party, upon the reasonable request
of the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this Agreement.
e. Governing Law. The internal laws of the State of Florida
(without regard to principles of conflict of law) shall govern the validity of
this agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
f. Entire Agreement. The provisions of this agreement set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and supersede all prior agreements, oral or written, and
other communications between the parties relating to the subject matter hereof
g. Waivers; Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
h. Relationship of Parties. It is the express intention of
the parties that the relationship between the parties shall be that of an
independent contractor and no partnership shall exist between the parties
pursuant hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Supply
Agreement to be duly executed as of the day and year first above written.
MULCH MASTERS:
MULCH MASTERS, INC.,
a Florida corporation
By: _______________________________
Its Authorized Officer
SUPPLIER:
XXXXX STATE LINE, INC.,
a Florida corporation
By: _______________________________
Its Authorized Officer
EXHIBIT F
---------
ESCROW AGREEMENT
(STATE-LINE BARK & MULCH, INC.)
This Escrow Agreement (this "Agreement") is made effective as of February
___, 2005 (the "Effective Date"), by and among State-Line Bark & Mulch, Inc., a
Georgia corporation ("Seller"), Xxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxx
("Shareholders"), Xxxxx State Line, Inc., a Florida corporation ("Buyer") and
Xxxxxx Towers, P.A., a Florida professional corporation ("Escrow Agent").
Shareholders and Mulch Masters, Inc., a Florida corporation ("Mulch
Masters"), own certain property located at Xxx. 0, Xxx 000, Xxx Xxxxx Xxxxxxx,
Xxxxxxxx, Xxxxxxx 00000 (the "Property") and Seller operates a business (the
"Business") on the Property for the production of bulk or bagged ground cover,
soil and compost products and related products. Shareholders are the sole
shareholders of Seller and Mulch Masters. Pursuant to and subject to the terms
and conditions set forth in that certain Asset Purchase Agreement, dated
February 9, 2004, by and among Buyer, Shareholders and Seller (the "Asset
Purchase Agreement"), Buyer is acquiring from Seller substantially all of the
assets relating to the Business, including, the Property.
Capitalized terms which are used but not defined in this Agreement shall
have the meanings ascribed to such terms in the Asset Purchase Agreement.
Pursuant to Section 1.3(a) of the Asset Purchase Agreement, upon closing of
transactions contemplated by the Asset Purchase Agreement, One Hundred Thousand
and 00/100 Dollars ($100,000.00) of the Purchase Price (the "Escrow Funds") is
to be delivered to Escrow Agent to be distributed to Buyer or Seller, as the
case may be, in accordance with the terms and conditions of the Asset Purchase
Agreement and this Agreement.
Escrow Agent has consented to act as escrow agent and to receive, hold, and
disburse the Escrow Funds on the terms hereinafter set forth in this Agreement.
Now, therefore, in consideration of the premises and the mutual promises
herein made, the adequacy and receipt of such consideration is hereby
acknowledged, the parties agree as follows.
1. Acceptance of Escrow Funds. To induce Escrow Agent to accept and hold in
escrow the Escrow Funds of One Hundred Thousand and 00/100 Dollars
($100,000.00), each of Buyer and Seller does hereby authorize Escrow Agent to
deposit the Escrow Funds in an interest bearing money market account with Bank
of America, N.A. pursuant to the terms of this Escrow Agreement, using on said
account the following name and Tax Identification Number:
State-Line Bark & Mulch, Inc.
TIN #__-________
2. Disbursement of Escrow Funds. Escrow Agent is authorized to disburse
escrow funds from the escrow account to Buyer or Seller upon the satisfaction of
the conditions or the occurrence of the events set forth on Exhibit A. Escrow
Agent shall have the right, but not the obligation, to require a written
statement signed by all parties to this Agreement confirming satisfaction of all
conditions precedent to disbursement of funds hereunder and authorizing
disbursement of said funds, together with accrued interest, if any.
Simultaneously with final disbursement of the Escrow Funds pursuant to this
Agreement, Escrow Agent shall be released of all liability and responsibility
under this Escrow Agreement.
3. Escrow Account. All parties to this agreement understand and agree that
Escrow Agent is holding the Escrow Funds as agent and that the funds are not
trust funds. Escrow Agent undertakes and agrees to perform only such duties as
expressly set forth herein. The duty of Escrow Agent hereunder shall be limited
to the safe keeping of the Escrow Funds and the disposition of same in
accordance with the provisions hereof.
4. Escrow Agent. The parties acknowledge that Escrow Agent serves as legal
counsel to Seller and Shareholders. Each party consents to such engagement and
hereby waives any conflict arising from Escrow Agent's service hereunder.
Nothing contained in this Agreement shall constitute Escrow Agent as trustee for
any party hereto or impose on Escrow Agent any duties or obligations other than
those for which there is an express provision herein. No implied duties or
obligations of any kind shall be read into this Agreement against or on the part
of Escrow Agent. Escrow Agent shall not be responsible for any of the agreements
referred to or described herein (including without limitation the Asset Purchase
Agreement), or for determining or compelling compliance therewith, and shall not
otherwise be bound thereby. Except as provided herein, Escrow Agent shall have
no responsibility or liability for delivery of the Escrow Funds.
5. Expense, Reimbursement and Indemnification.
5.1 Buyer, Seller and Shareholders, jointly and severally, agree to
reimburse Escrow Agent on demand for all costs and expenses incurred in
connection with the administration of this Agreement or the escrow created
hereby or the performance or observance of its duties hereunder which are in
excess of its compensation for normal services hereunder, including without
limitation, payment of any legal fees and expenses incurred by Escrow Agent in
connection with resolution of any claim by any party hereunder.
5.2 Each of Buyer, Seller and Shareholders, jointly and severally,
agrees to indemnify Escrow Agent (and its directors, officers and employees) and
hold it (and such directors, officers and employees) harmless from and against
any loss, liability, damage, cost and expense of any nature incurred by Escrow
Agent arising out of or in connection with this Agreement or with the
administration of its duties hereunder, including but not limited to attorneys'
fees and other costs and expenses of defending or preparing to defend against
any claim of liability unless and except to the extent such loss, liability,
damage, cost and expense shall be caused by Escrow Agent's gross negligence, bad
faith, or willful misconduct. The foregoing indemnification and agreement to
hold harmless shall survive the termination of this Agreement.
6. Limitations on Escrow Agent Liability.
6.1 Escrow Agent shall not be liable for any action taken or omitted
to be taken by it under this Agreement except for acts of gross negligence or
willful misconduct. In no event shall Escrow Agent be liable for indirect,
punitive, special or consequential damage or loss (including but not limited to
lost profits) whatsoever, even if Escrow Agent has been informed of the
likelihood of such loss or damage and regardless of the form of action.
6.2 None of the provisions hereof shall be construed so as to require
Escrow Agent to expend or risk any of its own funds or otherwise incur any
liability in the performance of its duties under this Agreement.
6.3 If it becomes illegal or impossible for Escrow Agent to carry out
any of the provisions hereof, Escrow Agent shall incur no liability as a
consequence of the enforceability or lack thereof of any agreements referred to
herein.
6.4 Escrow Agent shall not be liable to any party hereto in acting
upon any written notice, request, waiver, consent, receipt, instruction
(including, without limitation, wire transfer instructions, whether incorporated
herein or provided in a separate written notification) or other paper or
document believed by Escrow Agent to be signed by the proper party or parties.
Escrow Agent will be entitled to treat as genuine and as the document it
purports to be any letter, paper, telex or other document furnished or caused to
be furnished to Escrow Agent by Buyer, Seller or Shareholders, and believed by
Escrow Agent to be genuine and to have been transmitted by the proper party or
parties, and shall have no responsibility for determining the accuracy thereof.
Escrow Agent shall have no liability with respect to any good faith action taken
or allowed by it hereunder.
6.5 Escrow Agent may consult with legal counsel in the event of any
dispute or questions as to the interpretation or construction of this Agreement
or Escrow Agent's duties hereunder, and Escrow Agent shall incur no liability
and shall be fully protected in acting in accordance with the opinion and
instructions of counsel. Buyer, Seller and Shareholders, jointly and severally,
shall be liable for any fees and costs incurred by the Escrow Agent in obtaining
or acting upon the advice of counsel.
6.6 In the event of any disagreement between Buyer, Seller and
Shareholders resulting in adverse claims and demands being made in connection
with or for any money involved herein or affected hereby, Escrow Agent shall be
entitled at its option to refuse to comply with any such claims or demands, so
long as such disagreement shall continue, and in so doing Escrow Agent shall not
be or become liable for damages or interest to the undersigned or any of them,
or to any person named in this Agreement, for its refusal to comply with such
conflicting or adverse demands; and Escrow Agent shall be entitled to continue
so to refrain and refuse so to act until:
(a) the rights of the adverse claimants have been finally
adjudicated in a court or by arbitration as set forth below assuming and
having jurisdiction of the parties and the money involved herein and
affected hereby; or
(b) all differences have been adjudicated by agreement and Escrow
Agent has been notified thereof in writing by all of the persons
interested.
6.7 In the event of such disagreement, Escrow Agent, in its sole and
absolute discretion, may file a suit in interpleader or for declaratory relief
for the purpose of having the respective rights of the claimants adjudicated,
and may deposit with the court all documents and property held hereunder, and
each of Buyer, Seller and Shareholders, jointly and severally, agrees to pay
Escrow Agent's fees and all reasonable costs and reasonable counsel fees
incurred in such action and said costs and fees shall be included in the
judgment of any such action.
7. Modification, Amendment, Rescission. No modification, amendment,
rescission supplement or change of this Agreement shall be valid, binding or in
effect unless notice thereof is given to Escrow Agent in writing by all parties
hereto and accepted by Escrow Agent. A waiver of any of the terms and conditions
of this Agreement on one occasion shall not constitute a waiver of the other
terms of this Agreement, or of such terms and conditions on any other occasion.
8. Resignation of Escrow Agent. Escrow Agent reserves the right to resign
as Escrow Agent at any time upon giving five (5) business days written notice
thereof to all parties at such parties' last known address. Upon notice or
resignation by Escrow Agent, the parties agree that Escrow Agent may deliver the
deposited funds, upon payment in full of all fees due Escrow Agent, to such
replacement escrow agent as Buyer, Seller and Shareholders may appoint. If no
notice is promptly received from the undersigned and the replacement escrow
agent, Escrow Agent may petition any court of competent jurisdiction for
disposition of the assets and Escrow Agent shall thereby be released from any
and all responsibility and liability to the parties hereto.
9. Successors and Assigns. The provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their respective legal
representatives, heirs, successors and assigns. The provisions hereof in favor
of Escrow Agent shall survive the termination of this Agreement.
10. Notices. All notices to or from Escrow Agent shall be in writing and
shall be deemed delivered upon mailing by certified or registered mail, return
receipt requested, to the respective addresses set forth below
If to Escrow Agent:
------------------
Xxxxxx Towers, P.A.
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx, Xx.
Fax: (000) 000-0000
If to Buyer: Required copy to:
----------- ----------------
Xxxxx State Line, Inc. Xxxxx Xxxxxx Xxxxxxxx Xxxx & Xxxxxx, P.A.
Xxxxxxxxx 000, Xx. 5.8 00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxx Xxxx 00692 Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx Attn.: G. Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000 Fax: (000) 000-0000
If to Seller and Shareholders: Required copy to:
---------------------------- ----------------
Mulch Masters, Inc. Xxxxxx Towers, P.A.
000 Xxx Xx. 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxxxxx Xxxxxxx Attn.: Xxxxxxx X. Xxxxxx, Xx., Esq.
Fax: (904) ________________ Fax: (000) 000-0000
All notices, instructions and other communication under this Agreement
shall be deemed given to Escrow Agent only upon Escrow Agent's actual receipt of
same at the address above (or to such other address or addresses as the Escrow
Agent may designate to the parties in writing).
11. Venue; Service; Etc. Each of the parties hereto absolutely and
irrevocably consent and submit to the jurisdiction of the courts in the State of
Florida and of any federal court located in said state in connection with any
actions or proceedings brought against any of the parties hereto (or each of
them) by Escrow Agent arising out of or relating to this Agreement. In any such
action or proceeding, the parties hereto each absolutely and irrevocably: (a)
waive any objection to jurisdiction or venue; (b) waive personal service of any
summons, complaint, declaration or other process, and (c) agree that the service
thereof may be made by certified or registered first-class mail directed to such
party, as the case may be, at their respective addresses in accordance with
Section 10.
12. Tax Indemnification. Each of the parties hereto agree, jointly and
severally, (a) to assume any and all obligations imposed now or hereafter by any
applicable tax law with respect to any payment or distribution of the funds in
the escrow account or performance of other activities under this Agreement, (b)
to instruct Escrow Agent in writing with respect to Escrow Agent's
responsibility for withholding and other taxes, assessments or other
governmental charges, and to instruct Escrow Agent with respect to any
certifications and governmental reporting that may be required under any laws or
regulations that may be applicable in connection with its acting as Escrow Agent
under this Agreement, and (c) to indemnify and hold Escrow Agent harmless from
any liability or obligation on account of taxes, assessments, additions for late
payment, interest, penalties, expenses and other governmental charges that may
be assessed or asserted against Escrow Agent in connection with or relating to
any payment made or other activities performed under the terms of this
Agreement, including without limitation any liability for the withholding or
deduction of (or the failure to withhold or deduct) the same, and any liability
for failure to obtain proper certifications or to report properly to
governmental authorities in connection with this Agreement, including costs and
expenses (including reasonable legal fees and expense), interest and penalties.
The foregoing indemnification and agreement to hold harmless shall survive the
termination of this Agreement.
13. General.
13.1 Force Majeure. Escrow Agent shall not be responsible for delays
or failures in performance resulting from acts beyond its control. Such acts
shall include but not be limited to acts of God, strikes, lockouts, riots, acts
of war, epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.
13.2 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida.
13.3 Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
13.4 Counterparts. This Agreement may be executed in several
counterparts and by facsimile, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first above written.
Xxxxxx Towers, P.A.,
a Florida professional corporation
By: _________________________________________
Name: _______________________________________
Title: ________________________________________
State-Line Bark & Mulch, Inc.,
a Georgia corporation
By: _________________________________________
Name: _______________________________________
Title: ________________________________________
------------------------------------
Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
Xxxxx State Line, Inc.,
a Florida corporation
By:
-----------------------------
Xxxxxxx X. Xxxxxxx
Its Authorized Officer
Exhibit A
The Escrow Funds shall be held by Escrow Agent to satisfy certain
indemnification obligations of Seller under Article VII of the Asset Purchase
Agreement.
On August 16, 2005, Escrow Agent shall distribute to Seller a portion of
the Escrow Funds equal to Fifty Thousand and 00/100 Dollars ($50,000.00) unless
Escrow Agent and Seller have received written notice from Buyer, in accordance
with Section 10, that Buyer is making or has made a claim for indemnification
under Article VII of the Asset Purchase Agreement (a "Claims Notice"). If Escrow
Agent and Seller have not received a Claims Notice, then on August 16, 2005,
Escrow Agent shall distribute to Seller a portion of the Escrow Funds equal to
Fifty Thousand and 00/100 Dollars ($50,000.00), less any and all amounts that
have been paid pursuant to any Claims Notices and less any and all amounts then
subject to a Claims Notice.
On February 16, 2006, Escrow Agent shall distribute the balance of the
Escrow Funds (i.e., the Escrow Funds, together with any interest thereon, less
any and all amounts that have been paid pursuant to any Claims Notices), less
any amounts then subject to a Claims Notice, to Seller.
In the event Escrow Agent receives a Claims Notice, then Escrow Agent shall
pay to Buyer the amount set forth in such Claims Notice, unless Escrow Agent
receives written notice that Seller disputes such right of Buyer to set off
against the Escrow Funds as described in such Claims Notice within five (5) days
of receipt of such Claims Notice. In the event Seller disputes the right of
Buyer to exercise of the right of setoff against the Escrow Funds pursuant to
Article VII of the Asset Purchase Agreement or disputes the amount by which
Buyer seeks to setoff any claim for indemnification, as described in such Claims
Notice, and such dispute is not otherwise settled by the mutual agreement of
Buyer and Seller, then such dispute shall be settled by arbitration in
Jacksonville, Florida in accordance with the rules of the American Arbitration
Association and the award rendered by the arbitrator or arbitrators shall be
final and binding on the parties and may be entered in any court having
jurisdiction thereof.
Escrow Agent shall not have the obligation to distribute any part of the
Escrow Funds pursuant to a Claims Notice that is in dispute unless and until
such time that Escrow Agent has received definitive written evidence that such
dispute has been resolved and then Escrow Agent shall only be required to make
distribution in accordance with and only to the extent permitted by such
resolution.
Seller shall not have any right or interest in any portion of the Escrow
Funds distributed by Escrow Agent to Buyer and the amount distributed to Buyer
shall be treated as a reduction in the Purchase Price.
EXHIBIT G
---------
TRADEMARK AND TRADE SECRET LICENSE AGREEMENT
THIS TRADEMARK AND TRADE SECRET LICENSE AGREEMENT is made and entered into
as of this __ day of February 2005 (the "Effective Date") by and between: (1)
Mulch Masters, Inc., a Florida corporation ("Licensor"); and (2) Xxxxx State
Line, Inc., a Florida corporation ("Licensee").
Background
Licensor is the lawful owner of, has adopted, used and is using the
trademark WILD EARTH in connection with mulches, stones, soils, mixes,
fertilizers and other goods used in connection with greenhouses, nurseries and
plant growing. Licensee recently purchased from Licensor substantially all of
the business and assets of Licensor's business operations located in Folkston,
Georgia. As a condition to the purchase and sale of those assets, Licensor
retained ownership of its trademarks and all goodwill associate therewith and
agreed to enter into a license agreement with Licensee for the limited use of
the WILD EARTH trademark by Licensee in connection with Licensee's sale of
certain plant products at the Folkston, Georgia location on the terms and
conditions set forth in this Agreement. Licensee recognizes that the valuable
reputation and goodwill attaching to Licensor's trademarks are dependent for
their preservation on the high quality standards prescribed and established by
Licensor and, accordingly, Licensee is willing to comply with Licensor's
standards in order to obtain such quality and to cooperate with Licensor in
preserving the reputation and goodwill attaching to Licensor's trademarks.
NOW, THEREFORE, the parties, in consideration of the mutual agreements and
promises herein contained, the receipt and adequacy of which are hereby
acknowledged, do hereby agree, intending to be legally bound, as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Licensed Marks" shall mean the xxxx XXXX EARTH, the xxxx depicted in
the Registration and all other words, marks, names, slogans, logos,
graphics, designs and other indicia used in connection therewith.
(b) "Location" shall mean that certain facility located at Xxx. 0, Xxx
000, Xxx Xxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx 00000, Folkston, Georgia
purchased by Licensee from Licensor.
(c) "Products" shall mean mulch, aggregate stones; soil mixes, soil-less
mixes; and fertilizers.
(d) "Registration" shall mean trademark registration number 2,295,023,
registered on the Principal Register of the United States Patent and
Trademark Office by Licensor on November 30, 1999, a true and correct
copy of which is attached hereto as Exhibit A.
(e) "Trade Secrets" shall mean all information disclosed by Licensor to
Licensee that is neither public nor generally known including, without
limitation, ideas, inventions, discoveries, improvements, procedures,
methods, processes, formulae, compositions, methods, components,
recipes and other materials used in connection with the manufacture,
maintenance, improvement and use of the Products.
2. License Grant.
(a) Licensed Marks. Subject to the terms and conditions set forth in this
Agreement, Licensor grants to Licensee, and Licensee accepts from
Licensor a limited, personal, non-transferable, royalty-free license
to use the Licensed Marks solely for and in connection with the
marketing, promotion, advertisement, distribution, and sale of
Products manufactured at and sold from the Location during the Term of
this Agreement. Licensee shall not have the right to grant
sub-licenses.
(b) Trade Secrets. Licensor may disclose the Trade Secrets to Licensee in
connection with this Agreement. Upon receipt of the Trade Secrets,
subject to the terms and conditions set forth in this Agreement,
Licensor grants to Licensee, and Licensee accepts from Licensor a
limited, personal, non-transferable, royalty-free license to use the
Trade Secrets solely to manufacture Products at the Location during
the Term of this Agreement. Licensee shall not have the right to grant
sub-licenses.
3. Quality Standards.
(a) Trademark Use Approval. Licensee shall furnish to Licensor prior to
any use, for the approval of Licensor, copies of any Products, or
other products or materials exhibiting or otherwise using the Licensed
Marks (the " Samples") and copies of formats of all advertising,
marketing, and promotional material on which the Licensed Marks appear
(the "Materials"). Licensor shall have the right to approve or
disapprove any or all Products, Samples or Materials and Licensor's
approval shall not be unreasonably withheld. Licensee shall not
distribute, sell or advertise any Products unless and until the Sample
and Materials for such Products have been approved by Licensor
pursuant to this section 3(a). Licensor shall have the right to
require any Products or Samples to be manufactured in accordance with
its specifications and using the Trade Secrets. Any product developed,
manufactured, distributed, sold, and advertised by Licensee shall
conform to the Sample approved or deemed approved by Licensor.
Licensor shall have the right to terminate the licenses granted in
sections 2(a) and 2(b) of this Agreement upon Licensee's failure to
have any Products, Materials or Samples approved after having received
written notice from Licensor of such failure and an opportunity to
cure. Licensor hereby approves of and consents to Licensee's use of
the existing bag inventory purchased by Licensee from Licensor and
bearing the Licensed Marks.
(b) Inspections and Requests. Licensor may visit the Licensee's business
at reasonable times to determine Licensee's compliance with its
obligations under this Agreement including, without limitation the
express requirements of this sections 3 and sections 4, 5 and 10.
Licensor shall have the right, from time to time, to request that
Licensee provide written confirmation and provide Samples of all uses
of the Licensed Marks and a description of their manufacture and
composition, and of complaints, violations or other issues that
evidence whether or not Licensee is in compliance with the terms and
conditions of this Agreement including, without limitation, this
section 3. Licensee shall respond to all such requests within thirty
(30) days.
(c) Good Faith. Licensee agrees that it shall conduct its business
operations including, without limitation, at the Location, in a
dignified manner, consistent with and enhancing the general reputation
of the Licensed Marks and Licensor, and in accordance with good
trademark practice.
(d) Goodwill. Any and all goodwill arising from Licensee's use of the
Licensed Marks shall inure solely to the benefit of Licensor, and
neither during or after the termination of this Agreement and the
License granted hereunder shall Licensee shall not acquire ownership
of or assert any claim to the Licensed Marks or such goodwill.
Licensee shall not take any action that could be detrimental to the
goodwill associated with the Licensed Marks or with Licensor.
(e) Compliance With Laws. Licensee shall comply at all times at its sole
expense with all applicable laws and regulations pertaining to the
development, creation, promotion, sale, or distribution of the
Products.
4. Marking and Validity.
(a) Acknowledgment and Marking. Licensee hereby acknowledges Licensor's
ownership of all rights, title and interest in and to the Licensed
Marks and the Trade Secrets and Licensor's exclusive right to use and
license the use of the Licensed Marks and Trade Secrets and agrees not
to claim any title, ownership or interest to the Licensed Marks or
Trade Secrets or any right to use the Licensed Marks or Trade Secrets,
or to the goodwill associated therewith. Licensee shall include all
notices and legends with respect to Licensor's trademarks and trade
names as are or may be required by applicable federal, state and local
trademark laws or which may be reasonably requested by Licensor. All
materials containing the Trade Secrets shall be marked with a legend
and cover sheet stating, "Confidential and Proprietary Information and
Trade Secrets of Mulch Masters, Inc. DISCLOSURE OF THIS INFORMATION IS
RESTRICTED AND PROTECTED BY LAW." Licensee shall place in a
conspicuous location on all Materials, Products, and other goods
bearing a federally registered trademark, a notice in accordance with
the United States trademark laws, including 15 U.S.C. ss. 1111.
(b) Use of Similar Marks. Licensee shall at no time adopt or use, without
Licensor's prior written consent, any variation of the Licensed Marks,
including translations, or any xxxx likely to be similar to or
confusing with the Licensed Marks any products or services, whether or
not included within the definition of "Products." In the event that
Licensor consents to any variation of the Licensed Marks, Licensee
hereby agrees that Licensor shall own such new xxxx and shall, at its
cost and expense, file and obtain in Licensor's name all United States
and international trademark registrations. Licensor agrees to give
Licensee reasonable assistance, including execution and delivery of
all documents required by Licensee, in filing such applications for
trademark registration.
(c) Trademark Validity. Licensee shall not contest or deny the validity or
enforceability of any or all of the Licensed Marks or oppose or seek
to cancel any registration thereof by Licensor, or Licensor's
exclusive right to use the Licensed Marks nationwide, or provide
assistance or cooperation to others in doing so, either during the
term of this Agreement or at any time thereafter.
(d) Cooperation. Licensee shall, during the term of this Agreement and
after termination cancellation or expiration hereof for any reason
whatsoever, execute such documents as Licensor may request from time
to time to ensure that all right, title and interest in and to the
Licensed Marks reside with Licensor.
(e) Survival. The provisions of this section 4 shall survive any
termination, cancellation or expiration of this Agreement for any
reason whatsoever.
5. Title to the Licensed Marks. Licensor represents to Licensee that: (a)
Licensor has good title to the Licensed Marks and has the right to grant
the licenses provided for hereunder in accordance with the terms and
conditions hereof, free of any liens, pledges, mortgages, restrictions,
security interests and encumbrances of any kind, other than encumbrances
and restrictions which will not interfere in any material respect with the
exercise by Licensee of the rights granted to Licensee hereunder; (b) there
is no claim, action, proceeding or other litigation now pending with
respect to the Licensed Marks or Trade Secrets; and (c) to the best of
Licensor's knowledge and belief, there are no known threatened claims with
respect to Licensor's ownership of the Licensed Marks or Trade Secrets
which, if adversely determined, would restrict or otherwise interfere in
any material respect with the exercise by Licensee of the rights purported
to be granted to Licensee hereunder.
6. Notice and Prosecution of Infringement. Licensee agrees to notify Licensor
promptly, in writing, of any alleged, actual or threatened infringement of
any of the Licensed Marks of which Licensee becomes aware. Licensor has the
sole right to determine whether or not to take any action on such
infringements. Licensor has the sole right to employ counsel of its
choosing and to direct any litigation and settlement of infringement
actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be
solely responsible for all costs and expenses (including attorney fees) of
prosecuting such actions. Licensee agrees to provide Licensor with all
reasonably requested assistance in connection with such proceedings.
7. Term and Termination.
(a) Term. This Agreement commences on the Effective Date and continues for
a term of nine months, plus such additional period of time as may be
required to exhaust the bag inventory bearing the Licensed Marks on
hand at the end of nine months, unless earlier terminated in
accordance with Section 6(b), 6(c) or 6(d) below (the "Term"). This
Agreement shall only be renewed if agreed upon in writing by the
parties prior to the expiration of the Term.
(b) Termination by Licensor. Licensor shall have the right to terminate
this Agreement upon prior written notice to Licensee, effective
immediately upon Licensee's receipt of said notice, if:
(i) During any three (3) consecutive month period Licensee has not
marketed, published, distributed, sold or otherwise exploited
the Products used in connection with the Licensed Marks;
(ii) Licensee sells or otherwise disposes of substantially all of
its business or assets to a third party or parties, whether by
stock, merger, consolidation, or sale of all or substantially
all of its assets or otherwise, except as expressly authorized
in section 9 below;
(iii) Control or ownership of Licensee is in any manner transferred
except as expressly authorized in section 9 below; or
(iv) Licensee breaches any of its obligations or fails to meet any
of those requirements of performance or quality set forth in
sections 3 and 4 above.
(c) By Licensee. Except as otherwise provided herein, Licensee shall have
the right to terminate this Agreement at any time and for any reason
upon thirty (30) days prior written notice.
(d) By Either Party. Either party shall have the right to terminate this
Agreement upon the following:
(i) If either Licensor or Licensee defaults in the performance or
observance of any of the terms or conditions of this Agreement
and such default is not remedied within fifteen (15) calendar
days after written notice specifying the nature of the default
is received by the defaulting party, then the non-defaulting
party shall have the right to terminate this Agreement by
written notice to the defaulting party; or
(ii)
If any of the following events occur: (A) insolvency or the
making by a party to this Agreement of an assignment for the
benefit of creditors; (B) the filing by or against a party
hereto of, or the entry of an order for relief against a
party hereto in, any voluntary or good faith involuntary
proceeding under any bankruptcy, insolvency, reorganization
or receivership law, including, but not limited to, the
Bankruptcy Code, or an admission seeking relief as therein
allowed, which filing or order shall not have been vacated
within sixty (60) calendar days from the entry thereof; (C)
the appointment of a receiver for all or a substantial
portion of such party's property and such appointment shall
not be discharged or vacated within sixty (60) calendar days
of the date thereof; or (D) the assumption of custody,
attachment or sequestration by a court of competent
jurisdiction of all or a significant portion of such party's
property, then the other party to the Agreement shall have
the right to terminate this Agreement by written notice to
the party affected by such occurrence. No assignee for the
benefit of creditors, receiver, liquidator, trustee in
bankruptcy, sheriff or any other officer of the court or
official charged with taking over custody of the assets or
business of a party to this Agreement shall have any right
to continue performance of this Agreement, and this
Agreement may not be assigned by operation of law.
8. Effects of and Procedure with Respect to Termination. Upon the termination,
cancellation or expiration of this Agreement for any reason whatsoever, all
rights of Licensee under the licenses granted in sections 2(a) and 2(b)
shall immediately terminate and automatically revert to Licensor, without
notice and without the need to take any action, and Licensee shall
immediately cease and discontinue all uses of the Licensed Marks and Trade
Secrets and thereafter shall no longer use or have the right to use any of
the Trade Secrets or any of the Licensed Marks or any variation or
simulation thereof, or any word or xxxx similar thereto, or to (directly or
indirectly) develop, create, market, distribute, sell, or advertise the
goods or services in connection with any of the Licensed Marks. Licensee
acknowledges that Licensee's failure to immediately cease the use of the
Licensed Marks and Trade Secrets upon termination, cancellation or
expiration of this Agreement shall result in immediate and irreparable
damage to Licensor and to the rights of any other or subsequent licensees.
Licensee acknowledges and admits that there is no adequate remedy at law
for such failure, and agrees that in the event of such failure, Licensor
shall be entitled to equitable relief by way of temporary and permanent
injunction and such other and further relief as any court with jurisdiction
may deem just and proper.
9. Assignment. This Agreement is personal with respect to Licensee's
performance and licensing of the Licensed Marks and use of the Trade
Secrets. Licensee shall not assign this Agreement, in whole or in part,
without the prior written consent of Licensor (in its sole discretion);
provided, however, Licensee may assign or transfer this Agreement to
another entity controlled by Xxxxx Caribe, Inc., by operation of law or
otherwise, without the prior consent of Licensor. Any attempted assignment
in violation of this section shall be void and of no force or effect.
Nothing herein shall be construed to limit the right of the Licensor to
transfer or assign its interests in the Licensed Marks, subject to the
Agreement of the assignee to be bound by the terms and conditions of this
Agreement.
10. Confidentiality.
(a) Licensee agrees to maintain the Trade Secrets in strict confidence.
Except with the express prior written consent of Licensor, Licensee
shall not at any time use the Trade Secrets for its own use or for any
purpose whatsoever and shall not disclose any Trade Secrets to any one
at any time including, without limitation, any person, business,
organization or company or entity, or any employee, agent, officer,
director, or shareholder of Licensee. Under this Agreement, Licensee
is only authorized to use the Trade Secrets in connection with the
license grants set forth in section 2(b) above and may only disclose
the Trade Secrets to a very limited number of Licensee's employees
having a need to review the Trade Secrets in order to carry out the
licensed activities. Prior to any disclosures to such employees,
Licensee shall have each such employee execute a written agreement
acknowledging that they have been advised of this Agreement and agree
to be bound thereby. Licensee shall promptly deliver to Licensor the
names of each individual to whom the Trade Secrets is disclosed along
with a copy of such person's agreement to be bound hereby. Licensor
shall be an express and intended third party beneficiaries of such
agreements.
(b) No Reproduction of Materials. Licensee acknowledges and agrees that
any and all Trade Secrets shall not be copied or reproduced in whole
or in part in any form and shall not be used to create any
compilations, extracts, or other works containing or based upon the
Trade Secrets. At any time upon the oral or written request of
Licensor, Licensee shall return all Trade Secrets and materials to
Licensor within five (5) business days along with a statement by an
officer of Licensee certifying the return of all Trade Secrets.
(c) No Obligation To Disclose. Nothing in this Agreement shall be
construed to create an obligation upon Licensor to make any
disclosures of the Trade Secrets, in whole or in part, to Licensee.
Licensor shall have the right to decide what disclosures, if any, it
shall make under this Agreement.
(d) Judicially Ordered Disclosure. In the event that Licensee is compelled
to disclose any portion of the Trade Secrets pursuant to a court
order, Licensee shall first immediately give Licensor written notice
of such required disclosure and shall cooperate with Licensor in
seeking to prevent the disclosures or to otherwise seek a protective
order sealing the requested information. In the event a disclosure is
finally ordered, Licensee shall only disclose those portions of the
Trade Secrets necessary to comply with the court order.
(e) Notice of Violations. In the event of any violation or breach of any
obligation set forth in this Agreement, Licensee shall notify Licensor
in writing of such violation or breach including, the names of all
parties involved and the extent thereof. Licensee shall, at its cost
and expense, also take all necessary steps to cure the violation and
shall fully cooperate with Licensor in any actual or threatened legal
actions and proceedings.
(f) No Rights Granted. The disclosure of Trade Secrets under this
Agreement does not grant any express or implied rights or license to
Licensee to or under any trade secrets, patents, patent applications,
inventions, copyrights, trademarks, trade secret information, works of
authorship, or other intellectual property rights heretofore or
hereafter possessed by Licensor. All Trade Secrets are and shall
remain the sole and exclusive property of Licensor.
11. Waiver of Statutes. Licensee hereby expressly and forever releases and
discharges Licensor and its successors and assigns from all obligations and
requirements Licensor may have, and waives all rights, protections and
privileges Licensee may have or otherwise be entitled to under Florida's
Sale of Business Opportunities Act (Fla. Stat. xx.xx. 559.80 through
559.815) and under any similar laws of any other state or jurisdiction
including, without limitation, the State of Georgia. The foregoing release,
waiver and discharge by Licensee shall further include, without limitation,
any obligations of Licensor to deliver or make available to Licensee any
disclosure documents, any registration requirements, any breaches of the
Sales and Business Opportunities Act, any and all claims Licensee may have
under Fla. Stat. ss. 559.813, and any and all like or related claims
arising under Florida's Deceptive and Unfair Trade Practices Act (Fla.
Stat. xx.xx. 501.201 through 501.213), and under any similar laws of any
other state or jurisdiction including, without limitation, the State of
Georgia.
12. Miscellaneous.
(a) Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand or nationally
recognized overnight courier service, with postage prepaid:
(i) If to Licensee: Xxxxx State Line, Inc.
Xxxxxxxxx 000, Xx. 0.0
Xxxx Xxxx, Xxxxxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
With a copy to: G. Xxxx Xxxxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx Xxxx & Xxxxxx, P.A.
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
or to such other person or address as Buyer shall furnish to Seller
in writing:
(ii) If to Licensor Mulch Masters, Inc.
000 Xxx Xx.
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
With a copy to: Xxxxxxx X. Xxxxxx, Xx., Esq.
Xxxxxx Towers, P.A.
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
(b) Binding Effect. Except as otherwise provided in this Agreement, this
Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
(c) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid
under applicable law. However, if any provision of this Agreement or
the application of any provision to any party or circumstance shall be
prohibited by or invalid under applicable law, such provision shall be
reduced to such scope as is reasonable and enforceable if possible.
Otherwise, such provision shall be ineffective to the extent of such
prohibition or invalidity without it invalidating the remainder of the
provisions of this Agreement or the application of the provision to
the other parties or other circumstances.
(d) Further Action. Each party, upon the reasonable request of the other
party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary,
appropriate, or desirable to carry out the intent and purposes of this
Agreement.
(e) Governing Law. This Agreement shall be governed by, and interpreted
under, the laws of the State of Florida applicable to contracts made
and to be performed therein, without giving effect to the principles
of conflicts of law. The parties hereto hereby agree that any legal
suit action, or proceeding arising out of or relating to this
Agreement must be instituted in a federal or state court location in
Xxxxx County, Florida, and the parties hereto hereby irrevocably
submit to the jurisdiction of any such court and waive any objection
to the laying of venue in, jurisdiction over their person in, or the
inconvenience of, such forum. In connection with any litigation
brought which arises out of or relates to this Agreement, the
prevailing parties shall be entitled to recover all costs and expenses
therein incurred including reasonable attorneys' fees at trial and on
appeal.
(f) Interpretation. Should any provision of this Agreement require
judicial interpretation, the Court interpreting or construing the same
shall not apply a presumption that the terms hereof shall be more
strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against
the party who itself or through its agents prepared the same, it being
agreed that the agents of all parties have participated in the
preparation hereof.
(g) Specific Performance. Each party agrees with the other party that the
other party would be irreparably damaged if any of the provisions of
this Agreement are not performed in accordance with their specific
terms and that monetary damages would not provide an adequate remedy
in such event. Accordingly, in addition to any other remedy to which
the nonbreaching party may be entitled, at law or in equity, the
nonbreaching party shall be entitled to injunctive relief to prevent
breaches of this Agreement and specifically to enforce the terms and
provisions hereof.
(h) Entire Agreement. The parties expressly declare and understand that no
promises, inducements, consideration or agreements not herein
expressed have been made to them. This Agreement, and all Exhibits
hereto constitute the entire agreement between the parties with
respect to its subject matter, and merges all prior discussions
between them. The parties shall not be bound by any conditions,
definitions, or representations with respect to the subject matter of
this Agreement other than as expressly provided herein or as duly set
forth subsequent to the date hereof in writing and signed by a duly
authorized representative of the party to be bound thereby. This
Agreement may only be amended or modified by a writing, signed by the
parties.
(i) Waivers; Remedies. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to
enforce such term, but any such waiver shall be effective only if in
writing signed by the party or parties against which such waiver is to
be asserted. Except as otherwise provided herein, no failure or delay
of any party in exercising any power or right under this Agreement
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any
other further exercise thereof or the exercise of any other right or
power.
(j) Survival. Notwithstanding any provision of this Agreement to the
contrary, the parties obligations and the terms and conditions of
sections 4, 8, 10 and 11 shall expressly survive the termination,
cancellation or expiration of this Agreement for any reason
whatsoever.
(k) Relationship of Parties. Except as otherwise provided herein no
license or other rights, express or implied, are granted to either
party. The relationship of Licensee to Licensor is that of an
independent contractor and neither Licensee nor its agents or
employees shall be considered employees of Licensor. This Agreement
does not constitute and shall not be construed as constituting a
partnership or joint venture or grant of a franchise between Licensor
and Licensee. This Agreement shall not be construed as authority for
either party to act for the other party in any agency or other
capacity or to make commitments of any kind for the account of or on
behalf of the other, except to the extent and for the purposes
provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LICENSOR:
MULCH MASTERS, INC.,
a Florida corporation
By: _______________________________
Its Authorized Officer
LICENSEE:
XXXXX STATE LINE, INC.,
a Florida corporation
By: _______________________________
Its Authorized Officer
Exhibit A
Registration Number 2,295,023
EXHIBIT H
LEASE AGREEMENT
This LEASE AGREEMENT (this "Lease") is made as of February 16th, 2005, by
and between Xxxxx State Line, Inc., a Florida corporation ("Tenant"), Xxxxxxx X.
Xxxxxxx and Xxxx X. Xxxxxxx (the "Stewarts") and Mulch Masters, Inc., a Florida
corporation (together with the Stewarts, the "Landlord").
Background
Tenant (as Buyer) and Landlord (as Seller) are party to that certain Asset
Purchase Agreement (the "Asset Purchase Agreement") and those Agreements for the
Purchase and Sale of Real Property (collectively, the "Purchase Agreements"),
each dated as of February 9, 2005 pursuant to which Lessor has purchased from
Lessee substantially all of the business and assets of Seller located in
Folkston, Georgia, and agreed to purchase that certain real property more
particularly described on Exhibit A to the Purchase Agreements (the "Real
Property"). The Real Property is described on Exhibit A attached hereto and,
together with all improvements located thereon is referred to herein as the
"Premises". Lessor has agreed to lease the Premises to Lessee, subject to the
terms and conditions of this Lease. Capitalized terms used herein and not
otherwise defined herein shall have the meanings given to them in the Asset
Purchase Agreement.
In anticipation of a purchase of the Premises, in conjunction with the
purchase of the Business, the Landlord obtained an environmental audit of the
Real Property which revealed the presence of certain recognized environmental
conditions (RECs) as set forth in that certain letter from Butte, Inc. dated as
of February 14, 2005. Landlord has agreed to pursue remediation of the Real
Property to address the RECs. The Tenant remains desirous of purchasing the
Property, once the remediation efforts have been completed. In the interim, the
Tenant has agreed to lease the Premises on the terms and conditions set forth
below.
NOW THEREFORE, for and in consideration of the premises, the covenants
and agreements hereinafter set forth, Landlord and Tenant do hereby covenant and
agree as follows:
1. Premises. Landlord does hereby lease to Tenant, and Tenant does
hereby lease from Landlord, the Real Property more particularly described in
Exhibit A attached hereto, together with all Improvements constructed thereon.
2. Term of Lease. The term of this Lease (the "Term") shall be for a
period of thirty (30) days, subject to extension or earlier termination in
accordance with the terms hereof. The Term, and Tenant's obligations under this
Lease, shall commence on the date hereof (the "Commencement Date"). The Term may
be extended by Tenant, in its sole discretion, for no more than three (3)
additional periods of thirty (30) days each, to permit Landlord sufficient time
to remediate the RECs. In the event that Seller shall default under the terms of
the Purchase Agreements or the transactions contemplated thereby do not
otherwise close for reason other than default by Tenant, then Tenant, may in its
sole discretion and option, elect to extend the term hereof for a period of
twelve (12) months.
3. Rent.
-----
(a) During the Term of this Lease, Tenant shall pay to Landlord
rent in the amount of $1.00 per month.
(b) In addition to the above-stated rent payments, during the Term
of this Lease Tenant shall be responsible for the payment of all of the ad
valorem, real estate property taxes and other assessments against the Premises
(the "Taxes") and provide Landlord evidence of payment of same, upon request.
4. Tenant Agreements.
------------------
(a) The Tenant agrees to pay the rent as set forth above in advance
commencing on the Commencement Date and on the first day of each succeeding
calendar month. The Tenant shall pay for all of its own utility charges,
including water, electric and sewer.
(b) Tenant agrees to keep, repair, replace and maintain the interior
and exterior of all Improvements on the Premises, in as good and substantial
condition as they are at the beginning of the Lease (reasonable wear and tear
excepted), and to keep and maintain the Premises in good and clean condition,
reasonable wear and tear excepted.
(c) In the event that any mechanic's lien is filed against the Premises
as a result of alterations, additions or improvements made by the Tenant, the
Tenant shall, within ninety (90) days after receiving written notice from
Landlord, remove said lien or post any bond which may be reasonably required,
which bond shall be with adequate surety. Landlord shall have the right, at its
discretion, to record a memorandum giving notice that all work commenced and
liens filed are based on the authority of Tenant, and not Landlord.
5. Landlord Agreements.
-------------------
(a) Landlord grants to Tenant the right of peaceful possession and use
of the Premises.
(b) Landlord agrees to promptly commence and diligently pursue
remediation efforts with respect to the RECs present on the Premises. Tenant
agrees to close on the purchase of the Real Property within three (3) days of
completion of remediation of the RECs, in accordance with the provisions of the
Purchase Agreements, which are deemed amended in accordance with the provisions
hereof.
6. Damage to or Destruction of Premises. The Tenant shall carry
replacement liability and fire and casualty insurance in order to provide for
replacement and/or repair of the Improvements in the event of said destruction.
The Landlord shall be named as an additional insured on all such policies. In
the event of damage or destruction of the Premises as a result of any cause,
Tenant may, at its sole discretion, either elect to rebuild the Improvements or
terminate this Lease without further liability hereunder. In the event the
Tenant elects to terminate this Lease, then Tenant agrees to assign and pay all
insurance proceeds to Landlord. If the Tenant elects not to terminate this
Lease, then the insurance proceeds received by the Tenant shall be applied to
rebuilding of the Improvements and repair and/or replacement of the Tenant's
personal property. If the proceeds of the insurance policies are insufficient to
replace the Improvements, then Tenant shall be liable for the difference between
the insurance proceeds and the replacement cost of the Improvements.
7. Eminent Domain. If the entire Premises shall be appropriated or
taken by virtue of (or sold under threat of) eminent domain by any public or
quasi-public use or purpose, this Lease shall terminate as of the date of such
taking, and Tenant shall thereupon be released from any further liability
hereunder, and Tenant shall be entitled to apply for and, to the extent
rewarded, receive that portion of any condemnation award covering the value of
the Improvements and any alterations made to the Premises by Tenant, if any have
been performed, and relocation expenses for the moving of Tenant's furnishings,
movable expenses for the moving of the Improvements, Tenant's furnishings,
movable fixtures and other personal property. If a portion of the Premises or
any access thereto is condemned or taken by eminent domain proceedings so as to
render the Premises substantially unusable as an electric motor repair facility,
then in such event Tenant shall have the right to terminate this Lease as of the
date of such taking upon giving Landlord notice in writing within thirty (30)
days after the receipt of written notice of such appropriation or taking by
Tenant from Landlord. Landlord agrees to give written notice to Tenant
immediately upon receiving notice of appropriation or taking hereunder. Upon any
such cancellation, Tenant shall thereupon be released from any further liability
under this Lease, and share in the condemnation award as indicated above. If
this Lease is terminated in either manner hereinabove provided, the monthly
rental for the last month of Tenant's occupancy shall be prorated. The entire
damage award of the condemnation proceedings shall be allocated between Landlord
and Tenant as their interests may be determined.
8. Default and Early Termination.
------------------------------
(a) If Tenant shall fail to make any rent or other payment required
under this Lease as and when due and such failure shall not be cured within ten
(10) days after receipt of written notice from Landlord, or if Tenant shall fail
to perform any other obligation under this Lease and such failure shall not be
cured within thirty (30) days after receipt of written notice from Landlord (or
such longer period if such failure cannot be reasonably cured within a 30 day
period and Tenant promptly commences and diligently pursues the curing of such
failure), Landlord shall be entitled to declare a default under this Lease and
to immediately re-enter and retake possession of the Premises.
(b) If Tenant fails to perform any of its obligations under this
Lease, and such failure is not cured within thirty (30) days after written
notice from Landlord, then, in addition to such other rights and remedies as
Landlord may have at law or in equity, Landlord shall have the right to perform
such obligation in lieu of Tenant, and, in such event, Tenant shall reimburse
Landlord for all costs incurred in performing such obligation within thirty (30)
days of written demand therefor. If Tenant shall fail to reimburse Landlord as
required in the preceding sentence, Landlord shall have the right to offset such
due amount against the Varnish Note.
(c) If Landlord fails to perform any of its obligations under this
Lease, and such failure is not cured within thirty (30) days after written
notice from Tenant, then, in addition to such other rights and remedies as
Tenant may have at law or in equity, Tenant shall have the right to perform such
obligation in lieu of Landlord, and, in such event, Landlord shall reimburse
Tenant for all costs incurred in performing such obligation within thirty (30)
days of written demand therefor. If Landlord shall fail to reimburse Tenant as
required in the preceding sentence, Tenant shall have the right to offset such
due amount against Tenant's rent obligation under this Lease.
9. Insurance. Tenant shall keep and maintain the following insurance
at Tenant's cost and expense:
(a) Tenant shall insure the Improvements against damage and
destruction by fire and other perils in the amount of the full replacement value
of the Improvements, as the value may exist from time to time. All such policies
shall name Landlord as additional insureds and shall provide that such policies
may not be canceled without thirty (30) days prior written notice to Landlord.
(b) Tenant shall also keep and maintain liability insurance with a
minimum combined single limit of liability of $1,000,000.00 for personal
injuries or deaths of persons occurring in or about the Premises, and Tenant
shall indemnify and hold the Landlord harmless from any losses, claims, or cause
of action arising out of Tenant's use of the Premises.
10. Signage. Tenant shall have the sole discretion, responsibility
and obligation in regard to the placement and installation of signage on the
Premises. Tenant shall have all responsibility and all obligation to maintain,
install and permit any signage on the Premises, in accordance with all
applicable state, local and national regulations.
11. Assignment. Tenant may not assign this Lease or any of its rights
hereunder to a third party, without the prior written consent of Landlord, such
consent not to be unreasonably withheld, conditioned or delayed, it being
understood that the assignee must have substantially similar or greater
financial resources than Tenant. Upon execution and delivery of an express
assumption of the Tenant's obligations hereunder by any assignee, the Tenant
shall be released from all further liability hereunder.
12. Memorandum of Lease. With the execution of this Lease, Landlord
and Tenant shall, upon Tenant's request, enter into a memorandum of lease which
will be recorded in the public records of Charlton County, Georgia for the
purposes of providing constructive notice of Tenant's rights in the Premises.
13. Non-Disturbance Agreement. This Lease shall be superior to any
mortgage or other lien upon the Premises. Landlord shall exercise its best
efforts to cause the holder of any mortgage lien encumbering all or any portion
of the Premises to enter into a non-disturbance agreement with Tenant under
which such holder shall agree that the foreclosure of the mortgage lien or
exercise of any other rights or remedies shall not terminate the Lease or impair
the exercise of any rights of Tenant thereunder. Landlord's failure to obtain
such a non-disturbance agreement shall not be a default hereunder if Landlord
has exercised its best efforts to obtain such an agreement.
14. Indemnification.
---------------
(a) The representations, warranties, indemnities, covenants and
agreements made by Landlord and Tenant under this Agreement or pursuant hereto
shall survive indefinitely.
(b) Landlord covenants and agrees to defend, indemnify and hold Tenant
harmless from, against and in respect of: (i) damage, loss or liability incurred
by Tenant arising out of any misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement of Landlord made under or pursuant
to this Agreement; and (ii) any damage, loss or liability incurred by Tenant
arising out of debts, obligations or liabilities of Landlord relating to the
Premises arising prior to the Commencement Date.
(c) Tenant covenants and agrees to defend, indemnify and hold Landlord
harmless from, against, and in respect of: (i) any damage, loss or liability
incurred by Landlord arising out of any misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement of Tenant made under or pursuant to
this Agreement; and (ii) any damage, loss or liability incurred by Landlord
arising out of or in connection with the debts, obligations or liabilities of
Tenant relating to the Premises arising after the Commencement Date.
(d) The obligations and liabilities of the party making the indemnity,
pursuant to Sections 14(b) and 14(c) hereof (the "Indemnitor"), with respect to
claims made by third parties against the party being indemnified pursuant to
such sections (the "Indemnitee"), shall be subject to the Indemnitee giving the
Indemnitor prompt notice of any such claim. The Indemnitor shall have the right
to undertake (at the Indemnitor's sole cost and expense) the defense thereof by
representatives chosen by it and reasonably acceptable to the Indemnitee.
(i) If the Indemnitor, within a reasonable time after notice of
any such claim, fails to defend the Indemnitee against which such claim has been
asserted, the Indemnitee will (upon further notice to the Indemnitor) have the
right to undertake the defense, compromise or settlement of such claim on behalf
and at the expense of and for the account and risk of the Indemnitor, subject to
the right of the Indemnitor to assume the defense of such claim at any time
prior to settlement, compromise or final determination thereof.
(ii) Anything in this Section 14(d) to the contrary
notwithstanding, (A) if there is a reasonable probability that a claim may
materially and adversely affect the Indemnitee other than as a result of money
damages or other money payments, the Indemnitee shall have the right, at its own
cost and expense, to defend, compromise or settle such claim, and (B) the
Indemnitor shall not, without the written consent of the Indemnitee, settle or
compromise any claim or consent to the entry of any judgment.
(iii) In connection with all claims defended hereunder, the
Indemnitee will give the Indemnitor prompt written notice of all material
developments in connection with all claims, will promptly supply the Indemnitor
with all papers, documents and evidence in the Indemnitee's possession and such
other information within the Indemnitee's knowledge pertinent to such claims,
and will produce at the appropriate place or places, at reasonable times, such
witnesses under the Indemnitee's control as may reasonably be requested by the
Indemnitor or its representatives.
(iv) The amount of any indemnification payable pursuant to this
Section 16 shall be reduced by the amount of any insurance proceeds received by
either with respect to the damage, loss or liability.
(v) The parties agree that any amounts due and payable and arising
out of a breach of any of the representations, warranties, indemnities,
covenants and agreements made by any party under this Agreement or pursuant
hereto, shall be immediately due and payable on demand.
(e) In this Section 14, references to Tenant and Landlord shall be
deemed to include their successors and assigns, and their respective
shareholders, directors, officers and employees.
15. Notice. All notices, consents and approvals under this Lease shall
be in writing and sent by a nationally-recognized overnight delivery service, in
accordance with the provisions of the Asset Purchase Agreement.
Either party may change these persons or addresses by giving notice as provided
above. Notice shall be considered given and received on the date of last
delivery or attempted delivery date as indicated on the delivery receipt(s) of
all persons and addresses to which notice is to be given.
16. Partial Invalidity. If any Lease provision is invalid or
unenforceable to any extent, then that provision and the remainder of this Lease
shall continue in effect and be enforceable to the fullest extent permitted by
law.
17. Waiver. The failure of a party to exercise any of its rights is
not a waiver of those rights. A party waives only those rights specified in
writing and signed by the party waiving its rights.
18. Binding on Successors. This Lease shall bind the parties' heirs,
successors, representatives, and permitted assigns.
19. Governing Law. This Lease shall be governed by the laws of the
State of Florida.
20. Attorneys' Fees. In any litigation between the parties regarding
this Lease, the losing party shall pay to the prevailing party all reasonable
expenses and court costs including attorneys' fees incurred by the prevailing
party. A party shall be considered the prevailing party if: (i) it initiated the
litigation and substantially obtains the relief it sought, either through a
judgment or the losing party's voluntary action before trial, or judgment; (ii)
the other party withdraws its action without substantially obtaining the relief
it sought; or (iii) it did not initiate the litigation and judgment is entered
for either party, but without substantially granting the relief sought.
21. Time of Essence. Time is of the essence under this Lease.
22. Entire Agreement. This Lease contains the entire agreement between
the parties about the Premises. This Lease shall be modified only by a writing
signed by both parties.
SIGNATURES APPEAR ON THE FOLLOWING PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement
to be duly executed as of the day and year first above written.
LANDLORD:
STATE-LINE BARK & MULCH, INC.,
a Georgia corporation
By: _______________________________
Its Authorized Officer
TENANT:
XXXXX STATE LINE, INC.,
a Florida corporation
By: _______________________________
Its Authorized Officer
EXHIBIT A
Legal Description of Property
SCHEDULE 1.1(a)
---------------
TANGIBLE PERSONAL PROPERTY
Description Serial Year
----------- ------ ----
1 Volvo L120 loader L120CB61539 1997
2 Verneer Grinder Tub Loader IURK3822651 1995
3 CEC Screener 96485170 1997
4 CEC Screener 97413199 1997
5 SIT Baggin Line
6 Volvo L120 loader L120CB61449 1995
7 Nissan Forklift FJ02A2513 2000
8 Hood Loader 205523 1997
9 Toyota Forklift 60074 1995
10 Volvo Loader 670U18821B/ETC 2002
11 Xxx Xxx 3350 Mixer T130325208L N/A
12 One Reel Auggie Mixer 87
13 One Reel Auggie Mixer 841 1995
14 Duetz Tractor 74357532 N/A
15 Trojan Loader 382330 3 N/A
16 CAT Forklift 502555024 N/A
17 GMC Truck 1908V604523 1989
18 Xxxx Deere Gator 006X4D009811 2000
19 Dye Pump X--000Xxxxxx 0000 XXXX SS 4040 1999
20 Fecon Dye Machine 181202 2002
21 Hood Loader 202323 N/A
22 7 Storage Boxes Containers
23 Golf Cart 17G95224326410
24 2yd. Bucket #95
25 31/2yd. Bucket #90
26 Air Compressor (shop) #115
27 Air Compressor (plant) N/A
28 Bag Plant #215
29 Bagger #245
30 Blackcaps #236
31 Case Tractor #30
32 Conveyor Belt M60 #175
SCHEDULE 1.1(a)
TANGIBLE PERSONAL PROPERTY
(CONTINUED)
33 Electric Bag Plant #220
34 Electrical (shop) #000
00 Xxxx Xxxxxxx #000 (out of service)
36 Fuel Tanks #200
37 HI Tip Bucket 81/2yds. #75
38 Infeed-Palletizer #260
39 Infeed Conveyor #240
40 Log Grapple Forks #80
41 Palletizer #265
42 Root Rake #85
43 Scales #125
44 Sealer #000
00 Xxxx #000
00 Xxxxxxxxxx #000
47 Slasher #60
48 Stretchwrap Machine #270
49 Upright Bag Convey #255
50 (2)Portable Loader Ramp N/A
51 Portable Conveyor N/A
52 Fire & Safety Equipment #300
53 30ft. Portable Conveyor N/A
54 Log Trailer N/A
55 Chevr. Pickup C1500 0XXXX00X0X0000000 2000
56 10yd High Tip Bucket N/A
57 Volvo Standard Forks N/A
58 Nissan Forklift (2nd.) FSA073-W06270-R 2000
59 6yd High Tip Bucket N/A
Miscellaneous office equipment, computers, furniture and furnishings
SCHEDULE 1.1(d)
---------------
ASSIGNED SOFTWARE, SOFTWARE LICENSES AND OTHER LICENSES
SCHEDULE 1.1(e)
---------------
ANCILLARY AGREEMENTS
1. All rights, pursuant to contract or otherwise, to the following phone and fax
numbers:
000-000-0000
000-000-0000
2. Letter understanding between Americscape, Inc. and Seller, dated December 20,
2004, regarding product usage for 2005.
3. By-Product Sales Agreement, dated December 6, 2004, by and between Jefferson
Smurfit Corporation and Seller.
4. By-Product Sales Agreement, dated January 1, 2005, by and between Jefferson
Smurfit Corporation and Seller.
5. Web-hosting agreement between Seller and web-hosting company (for Seller's
web
SCHEDULE 1.2
------------
ASSUMED LIABILITIES
1. Liabilities associated with the Ancillary Agreements.
2. Those liabilities detailed on the attached listing of Assumed Liabilities.
Schedule 1.2
Assumed Liabilities
Vendor Amount
------ ------
1 Agri-Marketing, Inc. $ 531
2 B & V Timber 1,887
3 Bass Electrical 45
4 Betrock 50
5 Carter's 523
6 CBS 477
7 Xxxxx(Bark) 4,558
8 Xxxxx Xxxxxx Trucking (Loads) 1,800
9 Charlton County Service Center 45
10 Charlton Printing 255
11 Cintas First Aid 169
12 Citicapital(Volvo) (2,565)
13 City of Folkston (895)
14 Coastal Wood Products 2,560
15 Xxxxx Elec 48
16 Xxxxxxxx 99
17 Excel (16)
18 Fecon 136
19 Federal Machine & Industrial 1,065
20 First Coast Pallet 11,850
21 Flagler Construction Equipment 9,335
22 Florida Irrigation (285)
23 FNATS 850
24 Folkston Auto Supply 2,760
25 Georgia Department of Revenue 606
26 Grainger (13)
27 Xxxxxxxx Plastic Products 2,478
28 Xxxxxxx 6,804
29 Janpak of Jacksonville 8,049
30 Jefferson Smurfit Corp. 22,750
31 X.X. Xxxxx Inc. 2,269
32 Xxxxx Xxxxx 883
33 Linde Gas 199
34 Master Trucking 1,284
35 MBNA-Xxx 2,969
36 Xxxxxx Wire 1,513
37 Mulch Manufacturing 27,840
38 Nina Plastic Bags 20,442
39 North Florida Forklift 428
40 Pitney Xxxxx (481)
41 Pro Auto Inc. 59
42 Rayonier 4,856
43 Reliable 342
44 Xxxxxx Repair 23
45 S GA. Timber 2,541
46 Satilla Transport, Inc. 600
47 Security Bla 32
48 Shawalker Wood Yard 6,854
49 Shiver Diesel (100)
50 Smurfit-Stone Container Corporatio 29,089
51 South Scape Garden Center 203
52 Southern Nursery Association 125
53 Satandard Sand & Silica Co (220)
54 Stateline Disposal Services 154
55 Stone's Mach 611
56 T-N-T Plastics (16,838)
57 The Cit Group 1,940
58 Thrift Farm & Feed 12
59 Toyota Motor Credit Corp. 324
60 Vermeer 2,610
61 Western Auto (1)
62 Xpedex (343)
63 Xxxxxx Xxxx. Co (728)
Accounts Payable Trade $ 65,647
---------------------- ==========
Sales Tax Payable $ 71
----------------- ==========
1 Line of Credit-Southeastern Bank $ 1,618
2 Line of Credit-Bank of America 193,388
Lines of Credit $ 235,006
--------------- ==========
1 Mortgage Payable-Xxxxx X. Xxxxxxxx &
Xxxxxxx X. Xxxxxxxx $ 51,985
------------------------------------ ==========
1 Northland Capital Contract #4935-1 (Mixer) 21,431
2 CitiCapital Contract #121-0096005-000(Fecon Colorizer) 29,846
3 De Xxxx Xxxxxx Contract #24543790(Nissan Forklift) 25,016
4 Bank of America Contract #00000-000-000000(Bagging Line) 27,750
5 Toyota Financial Contract #LAS802(Toyota Forklift) 1,912
6 CitiCapital Contract #90114726(Volvo Loader) 85,201
Leases and Notes Payable $ 191,156
------------------------ ==========
TOTAL ASSUMED LIABILITIES $ 644,665
PLUS: Masters Trucking 15,521
Xxxxxxx X. and Xxxx X. Xxxxxxx Sh'r Loan 30,000
----------
GRAND TOTAL ASSUMED LIABILITIES $ 690,186
==========
SCHEDULE 1.5
------------
ADJUSTMENTS TO PURCHASE PRICE FOR PRORATION OF CERTAIN ITEMS
NONE
SCHEDULE 1.7
PURCHASE PRICE ALLOCATION
Buyer and Seller agree to allocate the Purchase Price to the following
categories of assets in the following specified amounts, which allocations
represent the results of the parties' economic negotiations and the present fair
value of each of the specified categories of assets.
Description Allocation
----------- ----------
1 Accounts Receivable $ 242,913 (1)
2 Inventory 317,714 (2)
3 Real Property 640,000 (3)
4 Building 200,000 (4)
5 Equipment 942,880 (5)
6 Accumulated Depreciation (293,421) (6)
7 Other Assets 51 (7)
Assets Acquired $ 2,050,137
--------------- ===========
8 Accounts Payable Trade $ 181,168 (8)
9 Sales Tax Payable 871 (9)
10 Line of Credit 235,006 (10)
11 Mortgage Payable 51,985 (11)
12 Leases & Notes Payable 221,156 (12)
Liabilities Assumed $ 690,186
------------------- ===========
Net Assets Acquired $ 1,359,951
Non Compete Agreement & Goodwill 1,240,049
Price Paid in Cash $ 2,600,000
===========
(1)Valued at carrying value due to the short maturity of these assets.
Source Aging Report @2/15/2005
(2)Valued at carrying value due to the short maturity of these assets.
Source Compiled Balance Sheet @1/31/2005
(3)Valued at carrying value($40,000) plus $600,000, asked price for the
second land. No recent appraisals are available.
(4)Valued at carrying value since no recent appraisals are available.
(5)Valued at carying value as per Depreciation Schedule.
(6)Accumulated depreciation as per Depreciation Schedule.
(7)Valued at carying value as per Compiled Balance Sheet @1/31/2005.
(8)Valued at carying value as per Schedule 1.2.
(9)Valued at carying value as per Schedule 1.2.
(10)Valued at carying value as per Schedule 1.2.
(11)Valued at carying value as per Schedule 1.2.
(12)Valued at carying value as per Schedule 1.2.
SCHEDULE 2.1(k)
PERMITS
1. City of Folkston Professional Occuptaional Certificate (issued January 1,
2005 and expires December 31, 2005.
SCHEDULE 2.1(o)
EMPLOYEES
Last Name Name Division Badge Number ID Number
--------- ---- -------- ------------ ---------
1 Xxxxxxxxx Xxxxxx Production 5 37
2 Xxxxxx Xxxxxx Administration 33 64
3 Xxxxx Xxxxxx Administration 3 103
4 Xxxxxxxxx Xxxxxxxxxxx Production 71 176
5 Xxxxxxxx Xxxxxx 94 181
6 Xxxxx Xxxxxxxx Production 98 177
7 Xxxxx Xxxx Production 8 42
8 Xxxxxxx Xxxx Production 46 171
9 Xxxxxxx Xxxxxx Administration 77 169
10 Xxxxxxx Xxxxxxxxxxx Production 40 99
11 Xxxxxxxxx Xxxxx Production 52 118
12 Xxxxxxxx Xxxxx Production 95 180
13 Xxxxxxx Xxxxx Production 96 179
14 Xxx Xxxxxx Production 44 148
15 Xxxxxxx Xxxxx Production 10 47
16 Xxxxxxx Xxxxxxx Production 62 144
17 Xxxxxx Xxxxxx Assistant Mechanic 74 162
18 Xxxx Xxxxxx Production 97 178
19 Xxxxxxx Xxxxx Production 41 80
20 Xxxxx Xxxxxx Production 63 170
21 Xxxxxx Xxxxxxx Mechanic 45 17
22 Nazworht Xxx Administration 12
23 Xxxxxx Xxxxxx Production 66 175
24 Xxxxxx Xxxxxx Production 58 140
25 Xxxxxx Xxxx Production 42 102
26 Xxxx Xxxx Production 72 173
27 Xxxxx Xxxxxxxx Production 64 146
28 Xxxxxxxx Xxxxxxx Production 31 62
29 Xxxxxx Xxxx Production 7 172
30 Xxxxxx Xxxxx Production 59 134
31 Xxxxxxxx Xxxxxxx Production 53 139
32 Xxxxxxxx Xxxxxx Production 54 168
SCHEDULE 3.8
------------
ACCRUED EMPLOYEE LIABILITY
1. Vacation pay owed to leased employees:
Name Amount of Time
---- --------------
Xxxxxx Xxxxxxxxx 1 day
Xxxxx Xxxxxxx 1 week
Xxxxx Xxxxxx 1 day
Xxxxx Xxxxxxx 1 week
Xxx Xxxxxxxx 3 weeks
Xxxxxxx Xxxxxx 3 days
Xxxx Xxxxx 1 day
Xxxxxxx Xxxxxxxx 5 days
