ASSET PURCHASE AGREEMENT SELLER: Hines Nurseries, Inc. TARGET: SC Hines Trenton Nursery BUYER: Palmetto Perennials, LLC REAL ESTATE LLC: Layman Holdings, LLC DATE: August 29, 2007
Exhibit
10.1
SELLER:
Xxxxx Nurseries, Inc.
TARGET:
SC Xxxxx Xxxxxxx Nursery
BUYER:
Palmetto Perennials, LLC
REAL
ESTATE LLC: Xxxxxx Holdings, LLC
DATE:
August 29, 2007
THIS
AGREEMENT IS SUBJECT TO ARBITRATION UNDER THE SOUTH CAROLINA UNIFORM ARBITRATION
ACT PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, AS MODIFIED
PURSUANT TO SECTION 10.9 HEREIN.
TABLE
OF CONTENTS
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Page
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| TABLE OF DEFINED TERMS |
i
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| Preliminary Statement |
1
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| Statement of Agreement |
1
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| 1. | Sale of Assets |
1
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| 1.1 | Transfer of Assets from Seller |
1
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|
1.2
|
Assumed Contracts |
2
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|
| 1.3 | Excluded Assets |
2
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| 1.4 | Transfer of Real Property by Seller |
3
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| 1.5 | Method of Transfer |
3
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| 1.6 | Possession |
3
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| 2. | Purchase Price for Assets |
3
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| 2.1 | Cash Payment |
3
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| 2.2 | Allocations |
3
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| 2.3 | Holdback |
3
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|
| 3. | Closing |
4
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| 3.1 | Closing Date |
4
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| 3.2 | Transactions at Closing |
4
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| 3.3 | Conditions of Title |
5
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| 3.4 | Transactions Subsequent to Closing |
7
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|
| 4. | Debts and Liabilities |
9
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| 5. | Representations and Warranties of Seller |
10
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| 5.1 | Corporation’s Status and Standing |
10
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| 5.2 | Authorization and Approval of Agreement |
10
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| 5.3 |
Compliance
with Laws
|
10
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| 5.4 | Title to Properties |
11
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| 5.5 | Litigation |
11
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| 5.6 | Consents |
11
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| 5.7 | Normal Course |
12
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| 5.8 | Creditors, Solvency, and Bankruptcy |
12
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| 5.9 | Labor and Employee Benefit Matters |
12
|
|
i
TABLE
OF CONTENTS
(continued)
|
Page
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| 5.10 | Workers’ Compensation |
12
|
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| 5.11 | Status of Assets |
12
|
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| 5.12 | Assumed Contracts |
13
|
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| 5.13 | Taxes and Tax Returns |
13
|
|
| 5.14 | Intellectual Property and Software |
13
|
|
| 5.15 | Status of Inventory |
13
|
|
| 5.16 |
Environmental
Matters
|
13
|
|
| 5.17 | Real Property |
14
|
|
| 5.18 |
Pre-Closing
Operations
|
15
|
|
| 5.20 | Brokerage |
16
|
|
| 5.21 | Disclosures |
16
|
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| 5.22 | Knowledge |
16
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| 5.23 | No Other Representations or Warranties |
16
|
|
| 6. | Representations and Warranties of Buyer Parties |
16
|
|
| 6.1 | Status and Standing of Buyer Parties |
16
|
|
| 6.2 | Authorization and Approval of Agreement |
17
|
|
| 6.3 | Consents |
17
|
|
| 6.4 | Litigation |
17
|
|
| 6.5 | Brokerage |
17
|
|
| 6.6 | Buyer’s Independent Investigation |
17
|
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| 6.7 | Bulk Transfer Laws |
17
|
|
| 7. | Cost and Expenses |
18
|
|
| 7.1 | Transactional Costs |
18
|
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| 7.2 | Documentary Stamps |
18
|
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| 7.3 |
Proration
of Taxes and Charges
|
18
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| 7.4 | Sales Taxes |
18
|
|
| 8. | Indemnity Rights |
18
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| 8.1 | Indemnity Damages |
18
|
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| 8.2 | Seller’s Indemnification |
18
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| 8.3 | Buyer Parties’ Indemnification |
19
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|
ii
TABLE
OF CONTENTS
(continued)
|
Page
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| 8.4 | Provisions of General Application |
19
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| 8.4.1 Procedures |
19
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| 8.4.2 No Implications |
19
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| 8.4.3 Settlement |
19
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| 8.5 | Limitations |
20
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| 8.6 | Exclusive Remedy |
20
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| 8.7 | Mitigation |
20
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| 8.8 | Insurance Coverage |
20
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| 8.9 | Tax Benefits |
21
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| 10. | Miscellaneous |
21
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| 10.1 | Entire Agreement |
21
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| 10.2 | No Waiver |
21
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| 10.3 | Amendment |
21
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| 10.4 | Notices |
22
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| 10.5 | Severability of Provisions |
22
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| 10.6 | Successors and Assigns |
22
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| 10.7 | Counterparts |
23
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| 10.8 | Choice of Law |
23
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| 10.10 | Usage |
24
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| 10.11 | Further Instruments and Acts |
24
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| 10.12 | Remedies |
25
|
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| TABLE OF EXHIBITS |
27
|
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| TABLE OF SCHEDULES |
30
|
||
iii
TABLE
OF DEFINED TERMS
|
Term
|
Section
or Exhibit
|
| “AAA” |
Section
10.9
|
| “Assets” |
Section
1.1
|
| “Assumed Contracts” |
Section
1.2
|
| “Business” |
Preliminary
Statement
|
| “Buyer” |
Introduction
|
| “Buyer Parties” |
Introduction
|
| “CERCLA” |
Section
5.16
|
| “Closing” |
Section
3.1
|
| “Code” |
Section
3.4.1(a)
|
| “Dispute” |
Section
10.9
|
| “ERISA” |
Section
3.4.1(a)
|
| “Escrow Agreement” |
Section
2.1
|
| “Escrow Fund” |
Section
2.1
|
| “Excluded Assets” |
Schedule
1.3
|
| “Excluded Business” |
Preliminary
Statement
|
| “Excluded Contracts” |
Section
1.2
|
| “Excluded Liabilities” |
Section
4
|
| “Hired Employees” |
Section
3.4.1(a)
|
| “Holdback” |
Section
2.3
|
| “Indemnity Damages” |
Section
8.1
|
| “Intellectual Property” |
Schedule
1.1.5
|
| “IRS” |
Section
5.13
|
|
“Permitted
Exceptions”
|
Section
3.3.2(c)
|
i
| “Plans” |
Section
3.4.1(a)
|
| “Pre-Closing Period” |
Section
5.18
|
| “Purchase Price” |
Section
2
|
| “RCRA” |
Section
5.16
|
| “Real Estate LLC” |
Introduction
|
| “Real Property” |
Section
1.4
|
| “Rules” |
Section
10.9
|
| “XXXX” |
Section
5.16
|
| “Seller” |
Introduction
|
| “SuperFund” |
Section
5.16
|
| “Tax Returns” |
Section
5.13
|
| “Taxes” |
Section
5.13
|
| “Title Commitment” |
Section
3.3.2(a)
|
| “Title Company” |
Section
3.3.2(a)
|
| “Transaction Documents” |
Section
5.2
|
ii
THIS
AGREEMENT IS SUBJECT TO ARBITRATION UNDER THE SOUTH CAROLINA UNIFORM ARBITRATION
ACT PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, AS MODIFIED
PURSUANT TO SECTION 10.9 HEREIN.
THIS
ASSET PURCHASE AGREEMENT, is made and entered into as of the 29th day of
August,
2007, by and among Xxxxx Nurseries, Inc., a California corporation (“Seller”);
Palmetto Perennials, LLC, a South Carolina limited liability company (“Buyer”);
and Xxxxxx Holdings, LLC, a South Carolina limited liability company (the
“Real
Estate LLC”, and collectively with Buyer, “Buyer Parties”).
Preliminary
Statement
Seller
owns and operates, among other operations, a nursery business selling plants
and
related products and services at its facilities located on Highway 25 (Trenton)
and Highway 191 (Mill Creek) in Edgefield County and known as the SC Xxxxx
Xxxxxxx Nursery (collectively, the “Business”). Seller has operated the Business
continuously since August 1996. Seller also operates seven (7) commercial
nursery facilities located in Arizona, California, Oregon and Texas
(collectively, the “Excluded Business”). The Excluded Business is not a part of
the “Business” for purposes of this Agreement.
Seller
desires to sell, and Buyer and the Real Estate LLC desire to purchase,
substantially all assets of Seller used in the conduct of the Business,
including without limitation the fixtures and equipment (including without
limitation approximately 5,000 to 6,000 racks); all supplies, work-in-process,
and inventory (including without limitation all pots on hand, all perennials
and
other saleable plants, and all pots and supplies on order); all the trade
names
and trademarks of the Business (including without limitation “Xxxxxxx
Perennials” and excluding names and marks using the word “Xxxxx” or any
derivations thereof); selected customer contracts, purchase orders, and
operating contracts and leases of the Business approved for transfer by Seller
and Buyer and applicable lessors, if any; selected other assets and rights
used
in the operation of the Business; and the real estate and improvements where
the
Business is currently operated, in each case, pursuant to the terms hereof.
In
connection with such purchase, Buyer will also assume certain identified
liabilities, and only such identified liabilities, of the Business as set
forth
herein.
NOW,
THEREFORE, in consideration of the premises hereof, the mutual covenants
and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and subject to
the
terms, conditions, and exceptions set forth below, the parties hereto agree
as
follows:
Statement
of Agreement
1. Sale
of Assets.
1.1 Transfer
of Assets from Seller.
At the
Closing, for the consideration herein provided, Seller shall convey, transfer,
assign, and deliver to Buyer, and Buyer shall purchase and accept from Seller,
all of the Seller’s right, title and interest in and to the following assets
that are used in the Business (but excluding the Excluded Assets (as defined
in
Section
1.3))
(collectively the “Assets”):
1
1.1.1 All
of
Seller’s plant, machinery, equipment (including, without limitation, not fewer
than 5,000 racks), tools, instruments, spare parts, trucks, forklifts and
other
vehicles, furniture, fixtures, furnishings, office equipment, computer hardware,
and supplies used solely in connection with the Business, including (without
limitation) those items described in Schedule
1.1.1.
1.1.2 All
of
Seller’s cellular telephone numbers described in Schedule 1.1.2.
1.1.3 [RESERVED].
1.1.4 All
of
Seller’s supplies, raw materials, items on order, work-in-process, finished
goods, and other inventory (including without limitation all pots on hand,
all
perennials and other saleable plants, and all pots and supplies on order),
at
Seller’s Real Property, or elsewhere, with respect to the Business. See
Schedule
1.1.4
for a
report of Seller’s inventory as of Closing.
1.1.5 All
of
Seller’s trademarks (including without limitation “Xxxxxxx Perennials” and
excluding names and marks using the word “Xxxxx” or any derivations thereof),
service marks, and trade names used solely in connection with the Business
described in Schedule
1.1.5
(collectively the “Intellectual Property”).
1.1.6 All
of
Seller’s Zebra printers and related label matrix software used solely in the
Business listed in Schedule 1.1.6,
and all
“off the shelf” local software listed in Schedule 1.1.6,
used in
the Business and located at the Real Property, but excluding any of Seller’s
proprietary software and any software subject to a license that applies to
all
of Seller’s facilities (collectively, the “Software”).
1.1.7 To
the
fullest extent permitted by law, the other assets listed in Schedule 1.1.7.
1.2 Assumed
Contracts.
Seller
shall assign all of its rights and obligations, and Buyer Parties (as
applicable) shall assume and agree to pay, perform or otherwise discharge
as the
same shall become due in accordance with the respective terms, all liabilities
and obligations under the agreements, contracts, and arrangements listed
in
Schedule
1.2
(collectively the “Assumed Contracts”); provided however, that anything
contained in this Agreement to the contrary notwithstanding, Buyer Parties
shall
assume only obligations maturing on or after the time of completion of Closing
under or with respect to the Assumed Contracts. Seller shall retain all contacts
associated with the Business other than the Assumed Contracts (the “Excluded
Contracts”).
1.3 Excluded
Assets.
Anything contained in this Agreement to the contrary notwithstanding, the
parties acknowledge and agree that Seller will not sell, assign, or convey
to
Buyer, and Buyer will not acquire, any right, title, or interest whatsoever
in
or to, or obligation for, any asset or contract related to the Business other
than Assets described in Section 1.1
and
Assumed Contracts described in Section 1.2
or any
inventory, property, item, cash, accounts receivable, deposits, security
deposits, prepaid assets, contract, agreement or other asset of Seller related
to the Excluded Business (collectively, “Excluded Assets”). The term “Assets” as
used herein shall not include the Excluded Assets. Seller will make reasonable
efforts to complete removal of tangible personal property constituting portions
of the Excluded Assets located at the Premises, if any, within ten (10) business
days after Closing. Buyer shall not be an insurer of the safety or condition
of
the Excluded Assets after Closing; and Seller shall retain the risk of loss
with
respect to any Excluded Assets after Closing.
2
1.4 Transfer
of Real Property by Seller.
At the
Closing, for the consideration herein provided, Seller shall convey, transfer,
assign, and deliver to Real Estate LLC, and Real Estate LLC shall purchase
and
accept from Seller, all of the Seller’s right, title and interest in and to the
real property described on Schedule
1.4,
together with all rights whatsoever, including any improvements, trees,
riparian, oil, gas and mineral rights, privileges, easements, interests and
appurtenances thereto (collectively, the “Real Property”).
1.5 Method
of Transfer.
The
aforesaid transfer and sale will be evidenced by appropriate bills of sale,
assignments, deeds, titles, leases, subleases, and other instruments executed
and delivered by Seller to Buyer Parties at Closing, as set forth in this
Agreement.
1.6 Possession.
Buyer
Parties shall take, and Seller shall deliver, possession of the Assets, the
Assumed Contracts and Real Property, at Closing.
2. Purchase
Price for Assets.
The
aggregate purchase price (the “Purchase Price”) for the Assets, the Assumed
Contracts and the Real Property shall be paid, allocated and held as
follows:
2.1 Cash
Payment.
Buyer
Parties shall pay to Seller, in cash or other immediately available funds
at
Closing an amount equal to Five Million Two Hundred Thousand and No/100 Dollars
($5,200,000.00), and Buyer shall direct Wachovia Bank, N.A. to deliver to
Seller
at Closing the Five Hundred Thousand and No/100 Dollars ($500,000.00) held
in
escrow by Wachovia Bank, N.A. pending Closing (the “Deposit”). Buyer shall be
entitled to retain all interest earned on the Deposit.
In
addition to the other customary Closing disbursements disclosed in the Closing
Statement to be executed by Buyer Parties and Seller at Closing, Seller shall
require that $31,309.16 (the “Escrow Fund”) of the proceeds be paid to Fidelity
National Insurance Company Title Company under that certain Agreement with
Deposit to Protect Against Defects in Title (the “Escrow Agreement”), to be
executed and delivered by Seller to Title Company at Closing.
2.2 Allocations.
The
parties agree that the purchase price for the Assets, the Assumed Contracts
and
the Real Property shall be allocated, and the transaction shall be reported
on
all tax returns (including IRS Form 8594), as provided in Exhibit
2.2.
2.3 Holdback.
Notwithstanding anything contained in this Agreement to the contrary, to
the
extent that fewer than 5,000 racks shall be at the Real Property at Closing,
(i)
Buyer Parties shall retain Fifty Thousand and No/100 Dollars ($50,000.00)
(the
“Holdback”) of the purchase price set forth in Section
2.1
until
such time that Seller has delivered to Buyer at the Real Property, at Seller’s
expense, 5,000 racks in the aggregate, and (ii) Buyer Parties shall provide
to
Seller a grace period of 60 days after the completion of the Closing (the
“Grace
Period”) to deliver such 5,000 racks to Buyer at the Real Property. Upon Buyer’s
receipt of 5,000 racks, Buyer shall promptly remit to Seller the Holdback
in
cash or other immediately available funds. If Seller has not delivered to
Buyer
5,000 racks in the aggregate within the Grace Period, Buyer shall be entitled
to
retain the Holdback. Seller and Buyer Parties agree that 4,497 racks were
delivered to Buyer at the Real Property at Closing.
3
3. Closing.
3.1 Closing
Date.
The
closing of the sale and purchase of the Assets, the Assumed Contracts and
the
Real Property and related transactions (the “Closing”) shall take place on
August 29, 2007 at 10:00 a.m., at the offices of Xxxxxx Xxxxx, LLC, 0000
Xxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxx Xxxxxxxx, or at such other time or place
as
may be mutually agreed by the parties in writing. The parties intend to
accommodate a remote closing to the extent practicable through the use of
email,
facsimile, and wire transfer.
3.2 Transactions
at Closing.
At the
Closing:
3.2.1 The
Buyer
Parties shall deliver to Seller the Purchase Price via wire transfer in
immediately available funds to such bank account as directed by
Seller.
3.2.2 Seller
shall deliver to Buyer the xxxx(s) of sale for tangible personal property
and
fixtures composing portions of the Assets in form and substance reasonably
agreed to between Seller and Buyer.
3.2.3 Seller
shall deliver to Real Estate LLC one or more deeds for the Real Property
in form
and substance reasonably agreed to between Seller and Real Estate LLC
(collectively, the “Deeds”).
3.2.4 Seller
shall deliver to Buyer an assignment of all intangible personal property
comprising portions of the Assets, in form and substance reasonably agreed
to
between Seller and Buyer, together with valid written consents to assignment
as
required.
3.2.5 Seller
shall deliver, or cause to be delivered, to Buyer valid assignments, licenses,
or sublicenses of all Intellectual Property in suitable form for recordation
or
filing, as applicable, and in form and substance reasonably agreed to between
Seller and Buyer.
3.2.6 Seller
shall deliver to Buyer certificates, vehicle titles, and other instruments
required to effect the sale of Assets contemplated hereby, in form and substance
reasonably agreed to between Seller and Buyer.
3.2.7 Buyer
shall deliver to Seller an assumption agreement of all Assumed Contracts,
if
any, in form and substance reasonably agreed to between Seller and Buyer,
together with valid written consents to assignment as required.
4
3.2.8 Seller
shall deliver to Buyer copies of duly filed UCC termination statements (or
UCC
termination statements duly authorized for filing), lease termination
statements, and mortgage, mechanics lien, and other lien satisfactions, estoppel
certificates, and other documents, as are reasonably agreed to by Buyer and
Seller to evidence Seller’s clear and marketable title to the Assets and the
Real Property in accordance with this Agreement.
3.2.9 Seller
shall deliver to Buyer any and all other instruments required, including
customary title insurance certificates and affidavits, to effect the conveyance
of title to the Assets and Real Property in accordance with Section
3.3.
3.2.10 Seller
shall deliver to Buyer an officer’s certificate for Seller in form and substance
reasonably agreed to between Seller and Buyer.
3.2.11 Buyer
Parties shall cause the delivery of a duly executed Guaranty dated as of
the
date hereof, by Xxxxxx Wholesale Nurseries, Inc., in form and substance
reasonably agreed to between Seller and Buyer.
3.2.12 Each
of
the Buyer Parties shall deliver to Seller a manager’s certificate for each
respective Buyer Party in form and substance reasonably agreed to between
Seller
and the Buyer Parties.
3.2.13 Buyer
may, subject to the exercise of Buyer’s sole discretion, offer immediately or
thereafter to hire any or all employees of Seller directly and primarily
associated with the Business. Buyer shall be obligated to hire only those
employees of Seller which Buyer elects in its sole discretion to hire; provided
however, Buyer shall not assume any liability whatsoever which arose out
of or
is related to Seller’s employment of any employee, and Buyer shall not assume
any liability whatsoever to any employee of Seller not hired by Buyer. Seller
will be responsible for: (i) paying and reporting all costs and liabilities,
including but not limited to compensation, vacation pay, severance, federal
and
state withholding taxes, federal and state unemployment taxes, employee benefit
costs and employee benefit continuation obligations, and worker’s compensation
claims incurred or accrued prior to Closing; (ii) the giving of all COBRA
and
related notices and benefits; and (iii) the giving of all federal WARN Act
notices, if any, and notices required by any similar state statute or
regulation, including without limitation S.C. Code Xxx. §41-1-40. Seller will
release all employees subsequently hired by Buyer from any employment and/or
confidentiality or non-competition agreement previously entered into by Seller
and such employees or, at the request of Buyer, will assign such agreements
to
Buyer. The parties agree that this transaction is intended to qualify under
the
exclusion of 29 U.S.C.A. §2101(b)(1) and shall cooperate reasonably in
satisfying the requirements to so qualify.
3.2.14 Seller
and Buyer Parties shall cooperate in the recording and/or filing of all Deeds,
mortgage satisfactions, UCC termination statements, and all other documents
required to be filed in connection with the Closing.
3.2.15 Seller
shall execute and deliver the Escrow Agreement, and deliver the Escrow Fund,
to
Title Company at Closing.
5
3.2.16 The
parties will take such other actions required at Closing by this
Agreement.
3.3 Conditions
of Title.
3.3.1 Operating
Assets.
At
Closing, Seller shall convey marketable title to the Assets (other than the
Real
Property) by appropriate instruments of conveyance free and clear of all
security interests, claims, liens, and encumbrances except: (a) taxes,
assessments or governmental charges or levies which are not yet due (which
shall
be prorated as provided in Section
7
of this
Agreement); and (b) as provided in Schedule
3.3.1.
3.3.2 Real
Property; Title and Survey Matters.
(a) Receipt.
Real
Estate LLC has been provided with a title insurance commitment covering the
Real
Property, together with complete copies of all instruments referred to therein
as exceptions to title (collectively the “Title Commitment”) prepared by
Fidelity National Title Insurance Company (“Title Company”) as follows: title
commitment no. 24050-585.
(b) Prior
to
the execution of this Agreement, Real Estate LLC has had an opportunity to
review and approve: (a) the Title Commitments and all supplements thereto,
and
all exceptions to title referred to therein, (b) all additional matters,
if any,
affecting title to the Real Property disclosed by Seller to Real Estate LLC
in
writing, and (c) all matters which would be disclosed by ALTA surveys of
the
Real Property prepared in accordance with the 2005 Minimum Detail Requirements
for ALTA/ACSM Land Title Surveys (collectively, “Title and Survey Matters”).
Real Estate LLC has had the opportunity, at its sole cost and expense, to
obtain
surveys of the Real Property. In no event shall Real Estate LLC’s obtaining of
such survey(s) be a condition precedent to Real Estate LLC’s obligations
hereunder. In the event that Real Estate LLC obtains any survey(s), it shall
promptly provide Seller with a copy of such survey(s). By its execution of
this
Agreement, Real Estate LLC has hereby approved all Title and Survey Matters
and
Real Estate LLC further acknowledges and agrees that Real Estate LLC shall
not
have any right to terminate this Agreement regarding any of the Title and
Survey
Matters; provided, however, Seller shall cause the following exceptions to
title
to the Real Property to be removed prior to the Closing (collectively, the
“Disapproved Exceptions”): monetary encumbrances on the Real Property caused by
or at the direction of Seller but expressly excluding (x) real property taxes
and assessments constituting a lien not yet due and payable and (y) liens
and
encumbrances caused or permitted to occur by Real Estate LLC in connection
with
Real Estate LLC’s entry upon and inspection of the Real Property.
(c) Real
Estate LLC shall be obligated to accept title to the Real Property subject
only
to the following exceptions to title (collectively, the “Permitted Exceptions”):
(a) ad valorem real estate taxes and assessments for the year 2007 and
subsequent years, a lien not yet due and payable; (b) the lien of supplemental
taxes assessed with respect to matters occurring on or after the Closing
Date;
(c) the printed exceptions which appear in the Owner’s Title Policies issued by
the Title Company; (d) all Title and Survey Matters approved or deemed approved
by Real Estate LLC pursuant to this Agreement; and (e) any matters affecting
the
Real Property which are created by or with the consent of Real Estate LLC,
including, without limitation, any matters relating to entitlements sought
by
Real Estate LLC prior to the Closing. Conclusive evidence of the availability
of
such title shall be the irrevocable commitment of the Title Company to issue
to
Real Estate LLC on the Closing Date an ALTA policy of title insurance for
each
of the Fee Properties
6
(“Owner’s
Title Policies”) in the amount of the Purchase Price allocated to the applicable
the Real Property in Section 2.2, respective, which Owner’s Title Policies shall
reflect that title to the Real Property is vested of record in Real Estate
LLC,
subject only to the Permitted Exceptions. In the event that Real Estate LLC
desires any endorsements to the Owner’s Title Policies, Real Estate LLC shall
separately negotiate such endorsements with the Title Company and
notwithstanding anything else to the contrary herein, Real Estate LLC’s
obligations under this Agreement shall not be conditioned or contingent on
Real
Estate LLC obtaining the issuance of any such endorsements, and the Closing
shall not be delayed for Real Estate LLC’s failure to obtain the issuance of any
such endorsements. Notwithstanding the foregoing, Real Estate LLC’s acceptance
of a title policy in any form other than the form of Owner’s Title Policy
described above shall be deemed to be Real Estate LLC’s acceptance of title to
the Real Property, subject to any exceptance set forth in such title
policy.
3.4 Transactions
Subsequent to Closing.
3.4.1 Employment
Matters.
(a) Employee
Benefit Plans.
Effective as of Closing, all employees of the Business hired by Buyer in
Buyer’s
discretion pursuant to Section
3.2.13
(the
“Hired Employees”) shall cease to be active participants in any “employee
benefit plan”, as that term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), of Seller
(collectively the “Plans”), in accordance with the terms of the Plans and
applicable laws, including ERISA and the Internal Revenue Code of 1986, as
amended (the “Code”). Seller shall retain liability for all claims incurred by
employees of Seller (and their enrolled dependents) under the Plans prior
to
Closing. Buyer shall be liable for all claims incurred by Hired Employees
(and
their enrolled dependents) after Closing, but only to the extent covered
under
the employee welfare benefit plans of Buyer on and after Closing. For purposes
of this Section
3.4.1(a),
a claim
shall be deemed to have been incurred on the earlier of the date the service
was
rendered or the date of submission of a claim related thereto.
(b) Seller
Responsibility.
Seller
shall make all severance, vacation, or related payments to any employees
directly and primarily associated with the Business entitled to same or as
required by law, and shall make available group health insurance coverage
to any
former employee of Seller entitled thereto pursuant to COBRA at such employee’s
cost as required by law.
(c) Non-Solicitation.
Except
as provided in Section
3.2.15,
from
the date hereof to the first anniversary of the date of Closing, neither
Seller
nor any affiliate of Seller shall solicit or encourage any employee of Buyer
to
leave the employ of, or cease to be under contract to, Buyer; provided, however,
that this Section shall not prohibit any customary advertisement in a newspaper
or trade journal of general circulation or general solicitation through an
independent search firm (or hiring as a result thereof) seeking in the ordinary
course of business applicants for job openings for Seller so long as such
customary advertisements and general solicitations are not by content or
otherwise specifically directed to the employees of Buyer.
7
3.4.2 Taxes.
Seller
shall file such tax returns and reports, and pay such taxes, as are required
for
periods ending with the Closing.
3.4.3 [RESERVED].
3.4.4 Excluded
Assets.
Seller
or its respective designees shall remove the tangible personal property
constituting portions of the Excluded Assets from the Premises, and Buyer
shall
cooperate with such removal, as provided in Section
1.3.
3.4.5 Books
and Records.
(a) Seller
shall preserve all books and records relating to the Business, which are
not
transferred to Buyer hereunder, for a period of at least three (3) years
and
shall make same reasonably available to Buyer and Buyer’s representatives for
inspection to the extent reasonably requested by Buyer in connection with
(a)
any audit or other investigation by any governmental authority, (b) preparation
by Buyer of tax returns or any other reports or submissions to any governmental
entity required to be made by Buyer, (c) review of accounting records in
order
to reconcile any payments received pursuant to Section
3.4.8;
provided that such cooperation and availability of information do not
unreasonably interfere with the normal business of Seller and provided, further,
that Buyer reimburses Seller for any necessary third-party expenses reasonably
incurred to provide such information, or (d) any dispute with a third party
with respect to the Assumed Contracts, or with respect to any aspect of the
Business if such dispute relates in whole or in part to events, acts, or
omissions prior to Closing.
(b) Buyer
shall preserve all books and records relating to the Business, which are
transferred to Buyer hereunder, for a period of at least three (3) years
and
shall make same reasonably available to Seller and Seller’s representatives for
inspection the extent reasonably requested by Seller in connection with (a)
any
audit or other investigation by any governmental authority, (b) preparation
by
Seller of tax returns or any other reports or submissions to any governmental
entity required to be made by Seller, (c) review of accounting records in
order
to reconcile any payments received pursuant to Section
3.4.8;
provided that such cooperation and availability of information do not
unreasonably interfere with the normal business of Buyer and provided, further,
that Seller reimburses Buyer for any necessary third-party expenses reasonably
incurred to provide such information, or (d) any dispute with a third party
with respect to the Assumed Contracts, or with respect to any aspect of the
Business if such dispute relates in whole or in part to events, acts, or
omissions after Closing.
3.4.6 Trade
Name.
Seller
shall discontinue commercial use of the Intellectual Property, except that
Seller shall be entitled to continued reasonable use of the Intellectual
Property for purposes of paying or terminating obligations, collecting
receivables, concluding its affairs related to the Business, or completing
other
actions specifically contemplated by this Agreement.
3.4.7 [RESERVED].
8
3.4.8 Accounts
Receivable.
Buyer
shall cooperate with Seller’s attempts to collect accounts receivable
constituting portions of the Excluded Assets, and Buyer will receive in trust
and promptly pay over to Seller any proceeds of such accounts receivable
existing at Closing that are paid to Buyer after the Closing. Seller will
receive in trust and promptly pay over to Buyer any proceeds of Buyer’s account
receivable relating to periods after Closing. As between Seller and Buyer,
payments by each customer will be applied to the specific invoice(s) identified
by the customer in connection with such payment, and if no such identification
is made, to such customer’s invoices in the chronological order in which they
were issued, with the oldest invoice being paid first.
3.4.9 Transition.
Seller
will, at no cost to Buyer, cause Seller’s management team to be available to
answer or discuss any questions or concerns of Buyer relating to the transition
of the Assets and Real Property for a period of 60 days after Closing.
3.4.10 Racks.
After
Closing, Seller shall deliver to Buyer or make available for retrieval by
Buyer
from mutually convenient locations, at Buyer’s expense, all racks associated
with the Business or the trademark “Xxxxxxx Perennials” which come into the
possession or control of Seller.
3.4.11 Unusable
Supplies, Labels, and Tags.
After
Closing, Buyer shall deliver to Seller or make available for retrieval by
Seller
from Buyer’s facility at the Real Property, at Seller’s expense, all supplies,
labels, tags, and other inventory Assets that Buyer is unable to use in the
Business after Closing, as agreed to by Buyer and Seller.
3.4.12 [RESERVED].
3.4.13 No
Acceptance on Seller’s Behalf.
Buyer
Parties shall use commercially reasonable efforts not to accept delivery
of
goods shipped to, or ordered by or intended for Seller. Buyer Parties shall
be
responsible for all liabilities and obligations relating to or arising out
of
any goods shipped to, ordered by or intended for Seller which are accepted
and
retained by Buyer Parties, and to the extent that Seller has paid for any
such
goods accepted and retained by Buyer Parties, Buyer Parties shall promptly
reimburse Seller for any such amounts. For all other goods shipped to, or
ordered by or intended for Seller that Buyer accepts but does not wish to
retain, Buyer shall notify Seller and make such goods available for pickup
by
Seller at Seller’s expense, and Seller shall remain responsible for all
liabilities and obligations relating to or arising out of such
goods.
3.4.14 Access
to Premises.
Buyer
Parties agree, without cost, after the Closing, to permit Seller and a
reasonable number of Seller’s employees, agents and representatives access to
the Real Property during normal business hours and at other reasonable times
for
a proper purpose in order to perform post-closing activities; provided, however,
that such access does not unreasonably interfere with the normal business
of
Buyer, and that Seller shall indemnify, defend and hold harmless Buyer Parties
and their respective managers, members, employees, and agents from and against
any and all claims for liabilities, issues, costs, expenses (including
reasonable attorneys’ fees), damages, or injuries arising out of or related to
such access to the Real Property. Seller shall provide Buyer Parties with
one
day prior written notice before any such access, and if required by Buyer
Parties, Seller shall execute and deliver to Buyer Parties a customary
confidentiality agreement in form and substance reasonably agreed to by Seller
and Buyer Parties.
9
3.4.15 Delivery
of Cisco Server.
As soon
as practicable after Closing, but in any event no later than 10 days after
Closing, Seller shall deliver to Buyer one Cisco Series 2600 router with
a fresh
IOS.
4. Debts
and Liabilities.
Except
as specifically provided in Section
1.2,
Seller
shall remain responsible for, and Buyer Parties shall not assume any, and
expressly disclaim all, obligations or liabilities of Seller, contingent
or
absolute, including (without limitation) liabilities for (i) federal or state
income, property, payroll, withholding, sales or other taxes for any period,
(ii) any tort, contract, warranty, statutory, or other liability resulting
from
or alleged to have resulted from the Business, Seller’s ownership of the Assets
or the Real Property, or the operations of Seller prior to the Closing, except
for Buyer’s obligations arising after Closing to perform certain obligations
under the Assumed Contracts expressly assumed by Buyer hereunder, (iii) the
Excluded Business, the Excluded Contracts, and Excluded Assets, (iv) all
trade
accounts payable and other current liabilities of Seller, (v) all long-term
and
other liabilities of Seller, including without limitation any and all secured
indebtedness or other obligations, (vi) Seller’s employee benefit plans and
employee benefit continuation obligations, and (vii) compliance or
non-compliance with the Bulk Transfer provisions of the Uniform Commercial
Code
of any applicable jurisdictions and the payment of any liabilities imposed
upon
Seller or Buyer under such Bulk Transfer provisions (collectively, the “Excluded
Liabilities”).
5. Representations
and Warranties of Seller.
Seller
hereby warrants and represents to Buyer Parties as follows:
5.1 Corporation’s
Status and Standing.
Seller
is a corporation which is duly organized, validly existing, and in good standing
under the laws of the State of California and has all corporate power and
authority to conduct its business as such business is now being conducted.
Seller is duly qualified or licensed as a foreign corporation under the laws
of
all jurisdictions in which the ownership, leasing, or use of its assets or
the
conduct of its business require it to be so qualified or licensed, except
where
the failure to be so qualified would not have a material adverse effect on
the
Business or the financial condition or operations of Seller. Seller is qualified
to do business as a foreign corporation in South Carolina.
5.2 Authorization
and Approval of Agreement.
Seller
has taken all corporate action necessary to authorize the execution and delivery
of this Agreement and all agreements, instruments, or other documents executed
in connection herewith (collectively with the Agreement, the “Transaction
Documents”), and the consummation of the transactions contemplated hereby and
thereby. All directors and the sole shareholder of Seller have been informed
of,
and consented to, the terms of the transactions contemplated hereby and thereby.
Each of the representatives of Seller signing the Transaction Documents has
full
power and authority to execute the Transaction Documents on behalf of Seller
in
the indicated capacity and to consummate the transactions contemplated hereby
and thereby. When executed and delivered by Seller, the Transaction Documents
shall constitute valid and binding obligations of Seller enforceable in
accordance with their terms and conditions, except to the extent such
enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to or limiting creditors’ rights generally and (ii) general
principles of equity. Neither the execution nor the delivery of the Transaction
Documents nor the consummation of the transactions contemplated hereby or
thereby, nor compliance with any of the terms and conditions hereof or thereof,
will result in the breach by Seller of, or will conflict with, any of the
terms,
conditions or provisions of (a) the articles of incorporation, bylaws, or
any
other organizational constitutive instrument of Seller, or (b) any agreement,
mortgage, order, judgment, permit, authorization, or instrument to which
Seller
is a party, or by which it is bound, or constitute a default of such articles
of
incorporation, bylaws, other organizational or constitutive instrument, or
agreement, mortgage, order, judgment, permit, authorization, or
instrument.
10
5.3 Compliance
with Laws.
Except
as set forth in Schedule
5.3,
Seller
is in material compliance with all laws, ordinances, and regulations that
govern
Seller’s ownership and use of the Assets, the Assumed Contracts and the Real
Property and operation of the Business. Seller possesses and, except as
described in Schedule
5.3,
is in
material compliance with, all licenses, permits, certificates, approvals,
and
other authorizations which are required in connection with its ownership,
occupancy, and use of the Assets, the Assumed Contracts, the Real Property,
and
the operation of the Business, other than those licenses, permits, certificates,
approvals, and other authorizations the noncompliance with which would not
be
reasonably expected to have, either individually or in the aggregate, a material
adverse effect on the Business. Except as set forth in Schedule
5.3,
no
notice has been issued and, to the knowledge of Seller, no investigation
or
review is pending or threatened by any governmental entity (a) with respect
to
any alleged violation by Seller of any law, ordinance, regulation, order,
policy, or guideline of any governmental entity with respect to the Assets,
the
Assumed Contracts, the Real Property, or the Business or (b) with respect
to any
alleged failure to possess, and to operate in accordance with, any permit,
certificate, license, approval, or other authorization required in connection
with ownership, occupancy, or use of the Assets, the Assumed Contracts or
the
Real Property, or the operation of the Business.
5.4 Title
to Properties.
Seller
has good and marketable title to the Assets as required in Section
3.3,
except
for liens permitted therein. Based solely on Seller’s owner’s title insurance
policies from Lawyers Title Insurance Corporation, to Seller’s actual knowledge,
Seller has good, indefeasible, insurable (at standard title insurance rates),
and marketable title to the Real Property, subject to the Permitted Exceptions.
Except as set forth in Schedule
5.4,
Seller
is not indebted to any contractor, laborer, mechanic, materialman, or any
other
person or entity for work, labor, materials, or services in connection with
the
Assets or the Real Property for which such person or entity could claim a
lien
on the Assets or the Real Property. Except as described in Schedule
5.4,
no
officer, director, shareholder, or any relative of any such officer, director,
or shareholder is a party to any material agreement with Seller relating
to the
Business or owns a material interest (except in the capacity as a director,
shareholder, or employee) in any property, real, personal or mixed, tangible
or
intangible, which is used in the Business.
5.5 Litigation.
Except
as described in Schedule
5.5,
no
judicial, arbitration, administrative actions, or other legal proceedings
are
pending or, to Seller’s knowledge, threatened that question the validity of this
Agreement or any transaction contemplated hereby or that relate to Seller
with
respect to the Business, the Assets, the Assumed Contracts or the Real Property,
including but not limited to condemnation or bankruptcy proceedings. Except
as
described in Schedule
5.5,
no
material judgment, decree, injunction, ruling, or order of any court,
governmental department, commission, agent, instrumentality, or arbitrator
is
outstanding against Seller which relates to the Business, the Assets, the
Assumed Contracts or the Real Property; and Seller is not bound by any material
judgment, decree, injunction, ruling, or order of any court, governmental
department, commission, agency, instrumentality, arbitrator, or any other
person
which relates to the Business, the Assets, the Assumed Contracts or the Real
Property.
11
5.6 Consents.
No
consent of any third party or governmental entity is required in connection
with
Seller’s conveyance, transfer, and assignment of the Assets or the Assumed
Contracts to Buyer and Real Property to Real Estate LLC hereunder, except
as set
forth in Schedule
5.6;
and to
the extent so required, such consents shall be delivered by Seller to Buyer
Parties at Closing.
5.7 Normal
Course.
Except
as set forth in Schedule 5.7,
Seller
has operated the Business, Assets, and Real Property in the normal and ordinary
course of business since June 30, 2007 and has paid or caused to be paid
promptly when due taxes, charges, and assessments imposed upon or assessed
against the Assets prior to Closing. Except as set forth in Schedule 5.7,
since
June 30, 2007, Seller has exercised its commercially reasonable efforts to
preserve the goodwill of the Business and Seller’s relationships with the
employees, customers, suppliers, and others having business relationships
with
the Business through Closing.
5.8 Creditors,
Solvency, and Bankruptcy.
Seller
has no intent to hinder, delay, defraud, or avoid any obligation to any past,
present, or future creditor in the transactions contemplated by this Agreement.
Seller is not insolvent as of Closing and will not be rendered insolvent
as a
result of the transactions contemplated hereby. Seller has not initiated
nor
does it intend to initiate with respect to itself as debtor, nor has it had
initiated against it nor does it expect to have initiated against it as debtor,
any proceeding under federal or any state’s bankruptcy, insolvency or similar
laws. As a result of the transactions contemplated in this Agreement, Seller
will not become unable to pay in full all of its debts as they fall due in
the
usual course of business.
5.9 Labor
and Employee Benefit Matters.
Attached hereto as Schedule
5.9(a)
is a
true and complete list as of the date hereof, showing the names of all employees
of Seller, their periodic salary or hourly rate of compensation, their position
entitling them to such compensation, and identification of any employment
contract with such employee. Seller is not a party to any agreement with
any
labor organization, and has no obligation to provide advance notice of
termination or the transactions contemplated herein, or pay severance, to
any
employee except as set forth in Schedule
5.9(a).
Except
as described in Schedule
5.9(b),
Seller
sponsors no employee benefit plan and has not incurred any accumulated funding
deficiency within the meaning of ERISA or any liability to the Pension Benefit
Guaranty Corporation established under such Act, nor has any tax been assessed
against Seller for the alleged violation of the Internal Revenue Code with
respect to the Business or its operations. Buyer Parties shall incur no
liability whatsoever in connection with any employee benefit plan of Seller.
Seller has complied with all continuation health care and similar requirements
(i.e., COBRA) of the Code and ERISA with respect to all current and former
employees of the Business. Seller has complied with all notice and other
requirements of the Federal WARN Act or any similar state law, including
without
limitation S.C. Code Xxx. §41-1-40, with respect to all current and former
employees.
12
5.10 Workers’
Compensation.
No
workers’ compensation or similar claims or actions are pending or threatened
with respect to the Business, and Seller does not know of facts which would
make
such claims likely by past or present employees of Seller with respect to
the
Business, except for those claims listed on Schedule
5.5
for
which Seller shall remain responsible.
5.11 Status
of Assets.
Except
as set forth in Schedule 5.11,
since
July 28, 2007, (i) Seller has not removed or otherwise disposed of any
assets from the Real Property (other than sales of inventory permitted pursuant
to the LOI), and (ii) Seller has exercised commercially reasonable efforts
to maintain and preserve the Assets in the ordinary course of business. Seller
has not received any uncured citation, variance, or other notice to the effect
that the facilities of the Business do not comply with applicable OSHA or
other
governmental laws or regulations.
5.12 Assumed
Contracts.
All of
the Assumed Contracts shall be lawfully transferred to Buyer hereunder, subject
to consents described in Schedule
5.6.
There
is no contest, claim, or right of set-off under the Assumed Contracts, other
than rebates and returns in the ordinary course of business, except as set
forth
on Schedule
5.12.
All
Assumed Contracts are valid, binding, enforceable in accordance with their
terms, and without known default or violation of law; and no uncured default
nor
event exists which upon the passage of time or the giving of notice would
constitute a default thereunder by any party thereto. None of the Assumed
Contracts are with the federal government or any subdivision thereof and
subject
to Executive Order 11246 (1965) or any similar law, regulation, order, or
standard relating to “affirmative action” or similar programs or requirements
relating to procurement or sales practices.
5.13 Taxes
and Tax Returns.
Seller
has filed through the date hereof, and shall file for all periods through
the
date of Closing, all income, franchise, property, ad valorem, sales, payroll,
withholding and other tax returns and other reports which they are required
by
law to file (collectively, the “Tax Returns”) and have paid or will pay all
taxes which have become due pursuant to applicable law, to such Tax Returns,
or
to any assessment received by Seller (collectively, the “Taxes”). All such Tax
Returns accurately reflect in all material respects the Taxes due and conform
to
applicable law. Seller has not received any notice of a proposed assessment
of a
Tax. The federal income tax returns of Seller have not been examined or audited
by the Internal Revenue Service (the “IRS”) for any year since 1996. Seller has
not (a) filed any consent or agreement under Section 341(f) of the Internal
Revenue Code; (b) executed any waiver of statutes of limitation for federal
income or other tax liability; (c) joined in the filing of consolidated returns
for any year; or (d) been required to file a consolidated return in any
year.
5.14 Intellectual
Property and Software.
Seller
owns or possesses adequate title, license, or other right to use all
Intellectual Property and Software without interference with or infringement
on
the rights of others. All such Intellectual Property and Software are
transferable by Seller and Seller will transfer such Intellectual Property
and
Software to Buyer in connection herewith. To Seller’s knowledge, no one is
currently, or has at any time in the past, infringed or otherwise interfered
with any of such Intellectual Property or Software transferred to Buyer
hereunder.
13
5.15 Status
of Inventory.
Seller
has no consignment inventory with respect to the Business or located at the
Real
Property.
5.16 Environmental
Matters.
Except
as described in Schedule
5.16,
with
respect to Parcel A (as described on Schedule 1.4),
or as
set forth in the Phase I provided by Mactec dated August 23, 2007 (the “Phase
I”), to the knowledge of Seller for all times prior to May 2, 2000, and
without regard to the knowledge of Seller for all times on or after May 2,
2000; and with respect to Parcel B (as described on Schedule 1.4),
to the
knowledge of Seller for all times prior to August 30, 1996, and without regard
to the knowledge of Seller for all times on or after August 30, 1996, no
conditions exist respecting Seller’s operations with respect to the Business,
the Assets, or the Real Property: (a) which constitute an unlawful environmental
condition; (b) which constitute a material violation of or require material
remedial, investigative, monitoring, or other compliance activity pursuant
to
any environmental protection, antipollution, health, safety, nuisance, or
related laws (whether common law, statutory law, ordinance, order, decree,
rule,
or regulation, including without limitation federal “XXXX,” “RCRA,” “CERCLA,”
Hazardous Materials Transportation Act, Federal Water Pollution Control Act,
Clean Air Act, Clean Water Act, Toxic Substance Control Act, or Safe Drinking
Water Act, and amendments thereto); (c) which involve the use, production,
or
possession and/or the presence or occurrence at, or runoff, drainage, removal,
emission, leaching, disposal, or release from Seller’s operations with respect
to the Business, the Real Property, or Assets of hazardous or regulated sludge,
industrial waste, ash, asbestos, PCBs, chemicals, chemical, fluid, or solid
containers, air-borne particulate pollutants, gases, fumes, or any other
hazardous, dangerous, or regulated substances or pollutants emitting from
or
relating to Seller’s operations with respect to the Business, the Real Property,
or Assets, any of which are in material violation of applicable laws, rules,
regulations, ordinances, orders, or decrees, require present or future (based
upon current law) material remedial actions, or require the expenditure of
material sums in order to comply with laws, rules, regulations, ordinances,
orders, or decrees in the event of demolition or remodeling of existing
facilities or improvements; or (d) which presently constitute, or can reasonably
be expected to constitute in the foreseeable future, a “loss contingency” as
defined by the Statement of Financial Accounting Standards No. 5 issued by
the
Financial Accounting Standards Board. Except as described in Schedule
5.16,
all
wastes, refuse, debris, sludge, ash, chemicals, and other byproducts of Seller’s
operations with respect to the Business, the Real Property, and Assets have
been
collected, removed, stored, handled, transported, and disposed of in material
compliance with all applicable laws, rules, regulations, ordinances, orders,
or
decrees, and to Seller’s knowledge all landfills or other disposal sites
accepting same were at the time of acceptance and are at the time of Closing
properly licensed to accept, store, and dispose of same, and no such disposal
site has been identified as a “Superfund” or “CERCLA” site or, to Seller’s
knowledge, is subject to investigation by any regulatory authority. There
are no
underground storage tanks of any nature at the Real Property, and Seller
has no
knowledge that there ever were any underground storage tanks of any nature
at
the Real Property. The Real Property is not used as a waste disposal or
hazardous substance storage site, and to Seller’s knowledge, the Real Property
was never used as a waste disposal or hazardous substances storage site.
For
purposes of this Section
5.16,
violations, remedial actions, and other compliance activities shall be
“material”, and Seller’s compliance shall not be “material”, if the losses,
damages, liabilities, penalties, assessments, costs, fines, obligations,
or
expenses (including litigation expenses and reasonable attorneys fees) arising
out of or related to all such violations, remedial actions and other compliance
activities, and Seller’s noncompliance, shall exceed $5,000 in the aggregate, or
if any such violations, remedial actions and other compliance activities,
or
Seller’s noncompliance, shall result in the cessation, restriction, or other
limitation of Seller’s continuing operations at the Real Property.
14
5.17 Real
Property.
(a) There
are
no leases, tenancies, licenses or other rights of occupancy affecting the
Real
Property as of Closing, other than the lease agreement with the County of
Edgefield, dated February 6, 1996.
(b) There
are
no executory contracts, agreements, service contracts, repair agreements
and
warranty and guaranty rights, with respect to the Real Property.
(c) There
are
no maintenance, management or other contracts or agreements affecting the
Real
Property except those which may be terminated without penalty on thirty (30)
days notice or less, and Seller shall disclose and provide all contracts
or
agreements affecting the Real Property to the Real Estate LLC prior to
Closing.
(d) No
person, firm, corporation or other entity has any right or option to lease
or to
acquire the Real Property or any portion thereof.
(e) There
is
no pending condemnation or similar proceeding or assessment affecting the
Real
Property, or any part thereof, nor to the best knowledge and belief of Seller,
is any such proceeding or assessment contemplated or threatened by any
governmental authority.
(f) Seller
has no knowledge, and has received no written notice, of any default or breach
under any of the covenants, conditions, restrictions, rights-of-way or
easements, if any, affecting the Real Property or any portion thereof which
are
to be performed or complied with by the owner of the Real Property.
(g) To
Seller’s knowledge, no portion of the Real Property is affected by any special
assessments, whether or not a lien thereon, and no such assessment has been
proposed to Seller’s knowledge. To Seller’s knowledge, there is no proceeding
pending for the reduction of the assessed valuation of any portion of the
Property.
(h) All
utility services necessary for the intended use of the Real Property (including
without limitation, electric, gas, telephone, water and sewer service) are
available to the Real Property, and Buyer Parties from and after the date
of
Closing will have the right to connect to and use all utility services without
restriction, and all necessary easements to provide such utility services
to the
Real Property have been obtained.
(i) To
Seller’s knowledge, the Real Property is currently zoned for Seller’s current
use, is in compliance with applicable zoning laws and ordinances. Seller
has no
knowledge of the status of such zoning is in question or subject to adverse
change by the appropriate governmental authorities.
15
(j) From
the
date that Seller originally acquired the real property (the “Original Real
Estate”) used in the operation of the Business and the date of this Agreement,
Seller has not transferred, assigned, or otherwise conveyed any portion of
such
Original Real Estate to any other party.
5.18 Pre-Closing
Operations.
(i)
From July 28, 2007 until the date of Closing (the “Pre-Closing Period”), except
for shipments (with notice to Buyer) of inventory to third-party customers
of
Seller with respect to the Business in the ordinary course of business to
comply
with the obligations of bona fide customer contracts entered into by Seller
prior to July 28, 2007, Seller (x) ceased sales and deliveries of perennials
and
other saleable plants, (y) except as otherwise permitted in that certain
Letter
of Intent dated August 6, 2007, by and between Seller and Guarantor (the
“LOI”),
did not transfer any such sales or inventories to other facilities of Seller,
and (z) maintained and preserved all such inventories in the ordinary course
of
business; and (ii) Seller swept customer and other locations to collect and
deliver to the Real Property prior to Closing not fewer than 5,000 racks.
5.19 [RESERVED].
5.20 Brokerage.
The
Seller has not dealt with a broker, investment banker, or financial consultant
in connection with this transaction, and no brokerage commission or similar
payment, nor claim therefor, shall accrue or become payable to any person
or
entity respecting this transaction as a result of Seller’s actions.
5.21 Disclosures.
To the
knowledge of Seller, no representation or warranty of Seller contained in
this
Agreement or in any certificate furnished or to be furnished by or on behalf
of
Seller to Buyer Parties or their respective representatives in connection
herewith or pursuant hereto, in each case as qualified in the disclosure
schedules, contains or will contain any untrue statement of a material fact,
or
omits or will omit to state any material fact required to make the statements
contained herein or therein not misleading.
5.22 Knowledge.
Notwithstanding anything to the contrary in this Agreement, all references
contained in this Agreement, or contained in any certificate delivered or
document executed by Seller and delivered pursuant to this Agreement, to
the
phrase “Seller’s knowledge” or “knowledge of Seller” or like expressions shall
exclusively refer to the actual knowledge of Xxxxxxx Xxxxxxxx, Xxxx Xxxx,
Xxxx
Xxxxxx, and Xxxx Xxxxxx, and without any imputation of the knowledge of any
other person or entity; provided, however, that the foregoing representations
and warranties shall not in and of themselves create personal liability for
such
individuals.
5.23 No
Other Representations or Warranties.
EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION 5 RELATING
TO
THE ASSETS, SELLER MAKES NO OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY
WITH RESPECT TO THE ASSETS AND SELLER HEREBY DISCLAIMS ANY SUCH REPRESENTATION
OR WARRANTY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
SECTION
5
RELATING
TO THE ASSETS, AND SELLER’S OBLIGATIONS IN THIS AGREEMENT WITH RESPECT TO THE
RACKS SOLD TO BUYER HEREUNDER, THE ASSESTS ARE USED AND BEING SOLD “AS IS WHERE
IS” AND THE SELLER HEREBY DISCLAIMS THE WARRANTY OF MERCHANTABILITY AND FITNESS
FOR USE FOR A PARTICULAR PURPOSE.
16
6. Representations
and Warranties of Buyer Parties.
Buyer
Parties hereby represent and warrant to Seller as follows:
6.1 Status
and Standing of Buyer Parties.
Each of
Buyer Parties is a limited liability company, which is duly organized, validly
existing, and in good standing under the laws of the State of South Carolina,
and has all company power and authority to conduct its business as such business
is now being conducted and is anticipated to be conducted as a result of
this
Agreement.
6.2 Authorization
and Approval of Agreement.
Each of
Buyer Parties has taken all company action necessary to approve and authorize
the execution and delivery of the Transaction Documents and consummation
of the
transactions contemplated hereby and thereby. Each of the representatives
of
Buyer Parties signing the Transaction Documents has full power and authority
to
execute the Transaction Documents in the indicated capacity and to consummate
the transactions contemplated hereby and thereby. When executed and delivered
by
Buyer Parties, the Transaction Documents will constitute valid and binding
obligations of Buyer Parties, enforceable in accordance with their terms
and
conditions. Neither the execution nor the delivery of the Transaction Documents
nor the consummation of the transactions contemplated hereby or thereby,
nor
compliance with any of the terms and conditions hereof, will result in the
breach by either of the Buyer Parties of, or will conflict with, any of the
terms, conditions, or provisions of (a) either of the Buyer Parties’ articles of
organization, operating agreement, or any other organizational or constitutive
instrument, or (b) any agreement, order, judgment, permit, authorization,
or
instrument to which either of the Buyer Parties is a party, or by which either
of them is bound, or constitute a default of such articles of organization,
operating agreement, other organizational or constitutive instrument, agreement,
order, judgment, permit, authorization, or instrument.
6.3 Consents.
No
consent of any third party is required in connection with Buyer’s acquisition of
the Assets or Real Estate LLC’s acquisition of the Real Property hereunder,
except as set forth in Exhibit
6.3;
and to
the extent so required, such consents shall be delivered by Buyer Parties
to
Seller at Closing, if any.
6.4 Litigation.
No
judicial, arbitration, administrative actions, or other legal proceedings
are
pending or, to the best of Buyer Parties’ knowledge, threatened that question
the validity of this Agreement or any transaction contemplated hereby, which
if
adversely determined would have a material adverse effect upon Buyer Party’s
ability to enter into this Agreement or perform its obligations
hereunder.
6.5 Brokerage.
Neither
of the Buyer Parties has dealt with any broker, investment banker, or financial
consultant in connection with this transaction, and no brokerage commission
or
similar payment, nor claim therefor, shall accrue or become payable to any
person or entity respecting this transaction as a result of either of the
Buyer
Parties’ actions.
17
6.6 Buyer’s
Independent Investigation.
Buyer
Parties acknowledge that they have exercised commercially reasonable efforts
to
conduct customary due diligence with respect to the Assets, the Assumed
Contracts and the Real Property. Buyer Parties acknowledge the limitations
on
Seller’s representations and warranties set forth in Section 5.23.
6.7 Bulk
Transfer Laws.
Buyer
Parties hereby waive compliance by Seller with any applicable UCC bulk sale
or
bulk transfer laws of any jurisdiction in connection with the sale of the
Assets, the Assumed Contracts or the Real Property. Pursuant to Section 8
Seller
has agreed to indemnify Buyer Parties against any and all liabilities which
may
be asserted by any third-party creditors against Buyer Parties as a result
of
Seller’s noncompliance with any such applicable law.
7. Cost
and Expenses.
7.1 Transactional
Costs.
Seller
and Buyer shall be responsible for their respective attorneys’ fees,
accountants’ fees, experts’ fees, investment banker and financial consultant
fees (if any), and other expenses incurred by them in connection with the
negotiations and Closing of this transaction; provided however that in the
event
litigation or arbitration is commenced to enforce any rights under this
Agreement or to pursue any other remedy available to any party, all legal
expenses or other direct costs of litigation or arbitration of the prevailing
party shall be paid by the other party. Any environmental assessment, title
examination, title insurance, or survey desired by Buyer Parties in connection
with Closing shall be obtained at Buyer Parties’ expense, except as set forth in
Section
3.4.7.
7.2 Documentary
Stamps.
Seller
shall pay all documentary stamp taxes, transfer taxes, or filing fees which
become due through the execution, delivery and/or recordation of any instruments
of conveyance required to be executed or delivered by Seller under this
Agreement, which amounts, if any, shall be deducted from the proceeds due
to
Seller at Closing.
7.3 Proration
of Taxes and Charges.
All
real estate and personal property taxes, all public utility charges, rents
and
like charges (which are not terminated and paid as of Closing by Seller),
if
any, relating to the real and personal (tangible and intangible) property
comprising the Assets, the Assumed Contracts and the Real Property shall
be
prorated on a per diem basis as of 11:59 p.m. on the date of Closing. If
any such amounts have not been finally assessed or billed as of the date
of
Closing for the current period, then the same shall be adjusted at the Closing
based upon the most recent bills therefor, and shall be re-adjusted when
and if
final bills are issued. If any bills for any such charges for periods prior
to
the Closing are not then available, then the parties shall make a reasonable
estimate thereof for purposes of adjustments at the Closing, with such amounts
to be re-adjusted between the parties within thirty (30) days of receipt
of said
bills.
18
7.4 Sales
Taxes.
Seller
shall be responsible for, and shall pay, all sales, excise, or similar transfer
taxes, if any, applicable to the sale of the Assets (including any vehicles)
and
Real Property as required herein.
8. Indemnity
Rights.
8.1 Indemnity
Damages.
For
purposes hereof, the term “Indemnity Damages” shall mean all losses, damages,
non-speculative lost profits, consequential and punitive damages, liabilities,
claims, suits, demands, penalties, assessments, remedial costs, fines,
obligations, causes of action, expenses, or costs (including litigation expenses
and reasonable attorneys fees) with respect to which an indemnification right
applies hereunder.
8.2 Seller’s
Indemnification.
Seller
shall indemnify and hold each of the Buyer Parties and their respective
officers, members, managers, employees, and agents (the “Seller Indemnitees”)
harmless from any and all Indemnity Damages asserted against or incurred
by the
Seller Indemnitee as a result of (a) any breach of any representation or
warranty made by Seller in this Agreement, (b) any breach by Seller, unless
waived by Buyer Parties, as applicable, of any covenant or agreement of Seller
contained in or arising out of this Agreement, (c) any liability or obligation
relating to, resulting from or arising out of the Business, the Assets, the
Assumed Contracts or the Real Property before the time of the completion
of
Closing, including without limitation the matters discussed on Schedules
5.4 and 5.5
and in
the Phase I, (d) any failure by Seller to comply with Seller’s obligations,
if any, under the Worker Adjustment Retraining and Notification Act (WARN
Act),
(e) the Bulk Transfer provisions of the Uniform Commercial Code or similar
law
of any applicable jurisdiction relating in any way to this Agreement, or
(f) any
of the Excluded Assets, Excluded Liabilities, and/or Excluded
Business.
8.3 Buyer
Parties’ Indemnification.
Buyer
Parties shall indemnify and hold Seller and its officers, shareholders,
directors, managers, employees, and agents (the “Buyer Indemnitees”) harmless
from any and all Indemnity Damages asserted against or incurred by the Buyer
Indemnitee as a result of (a) any breach of any representation or warranty
made by Buyer Parties in this Agreement, (b) any breach by Buyer Parties,
unless waived by Seller, of any covenant or agreement of any Buyer Party
contained in or arising out of this Agreement, or (c) any liability or
obligation relating to, resulting from or arising out of the Assets, the
Assumed
Contracts or the Real Property on or after the time of the completion of
Closing.
8.4 Provisions
of General Application.
With
respect to any right of indemnification arising under this Agreement, the
following provisions shall apply:
8.4.1 Procedures.
The
indemnified party and the indemnifying party agree to cooperate in the defense
of any third party claim or action subject to this Section
8
to
permit the cooperation and participation of the other parties in any such
claim
or action, and to promptly notify the other parties of the occurrence of
any
indemnified event or any material developments or amounts due respecting
any
indemnification event. All claims for indemnity hereunder shall be made in
writing, and shall state with reasonable specificity the matter for which
indemnification is sought.
19
8.4.2 No
Implications.
Neither
the rights of any party to indemnification from another party nor the
obligations of any party to indemnify another party, under this Agreement
shall
in any way imply or create, and each party specifically disclaims, any
responsibility whatsoever by such party for any other party’s liabilities to any
other person or entity or governmental body.
8.4.3 Settlement.
No
settlement of an action covered by this Section
8
shall be
made without the prior written consent of each party to this Agreement, which
consent shall not be unreasonably withheld; provided however, that anything
in
this Agreement to the contrary notwithstanding, (a) if a reasonable probability
exists that a claim may materially and adversely affect an indemnified party
other than as a result of monetary damages or other money payments, the
indemnified party shall have the right, at its own cost and expense, to
compromise or settle such claim in any reasonable manner, and (b) the
indemnifying party shall not, without prior written consent of the indemnified
party, settle or compromise any claim or consent to the entry of any judgment
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the indemnified party a release from all liability
in respect of such claim or which involves a remedy other than the payment
of
monetary damages. In any event, all parties hereto shall retain the right
to
participate in the prosecution and/or defense of any such actions; and the
party
prosecuting and/or defending such action shall act reasonably and in accordance
with good business judgment giving due recognition to the interests of the
other
parties to this Agreement.
8.5 Limitations.
Anything contained in this Agreement to the contrary notwithstanding: (a)
Seller
shall not be liable for any claim for Indemnity Damages under Section
8.2(a)
asserted
by the Seller Indemnitees after the eighteen (18) month anniversary of the
date
of Closing; provided however, that the Seller Indemnitees shall be entitled
to
pursue after such date any such claim that was properly asserted prior to
such
date; (b) Seller’s aggregate liability for such indemnification claims for a
breach of a representation or warranty under Section
8.2(a)
shall
not exceed Two Million and No/100 Dollars ($2,000,000.00); and (c) Seller
shall
not become liable for any Indemnity Damages under Section
8.2(a)
unless
and until the aggregate of all such claims exceeds Fifteen Thousand and No/100
Dollars ($15,000.00), but thereafter the indemnifying parties shall be liable
to
the full extent of such claims (including the first $15,000.00 of such claims)
up to the amount limitation in Section
8.5(b)
above in
the aggregate. The limitations of this Section
8.5
shall
apply to all claims for indemnification under Section
8.2(a)
except:
(x) claims arising out of Seller’s actual fraud; (y) a representation or
warranty that Seller knew at the date of this Agreement was false; and (z)
claims arising under Sections
5.4, 5.5, 5.13, or 5.16.
8.6 Exclusive
Remedy.
The
indemnification remedies provided in this Section
8
shall be
the exclusive remedies for monetary damages available to the parties following
the Closing with respect to any claims under this Agreement including, without
limitation, any claims for breach of any representation, warranty, covenant
or
agreement made by the parties in this Agreement, except for claims of fraud.
Such limitations shall not impair the rights of any of the parties: to seek
non-monetary equitable relief, including (without limitation) specific
performance or injunctive relief to redress any default or breach of this
Agreement or any xxxx of sale, assignment, other transfer document, assumption,
consent, or other agreement to be delivered at Closing hereunder.
20
8.7 Mitigation.
In the
event any party suffers any Indemnity Damages for which such party would
be
entitled to indemnification under Section 8, such party shall be obligated
to
use commercially reasonable efforts to mitigate the extent of any such Indemnity
Damages. A party shall be responsible for that portion of any Indemnity Damages
that results from such party’s failure to use commercially reasonable efforts to
mitigate the extent of such Indemnity Damages.
8.8 Insurance
Coverage.
The
amount of any Indemnity Damages shall be reduced by any net amount actually
received (after taking into account any cost or expenses (including without
limitation attorneys’ fees) incurred in connection with obtaining such amounts,
and adjusting for any increase in premiums resulting from such insurance
claims)
by a Buyer Indemnitee or Seller Indemnitee with respect thereto under any
third
party insurance coverage or from any other party alleged to be responsible
therefor; provided however, that: (a) this Section shall not apply to the
extent it conflicts with, is prohibited by, or would invalidate, any such
insurance policy; (b) collection of such insurance proceeds or other
amounts shall not be a condition precedent to asserting or collecting such
indemnification; and (c) such insurance proceeds or other amounts shall not
affect or be applied towards the maximum liability established in Section 8.5.
If a
Buyer Indemnitee or Seller Indemnitee makes a claim for indemnification under
this Section 8,
such
Buyer Indemnitee or Seller Indemnitee shall use commercially reasonable efforts
to collect any amounts available under such insurance coverage and from such
other party alleged to have responsibility. If a Buyer Indemnitee or Seller
Indemnitee receives an amount under insurance coverage or from such other
party
with respect to Indemnity Damages at any time subsequent to any indemnification
provided pursuant to this Section 8,
then
such Buyer Indemnitee or Seller Indemnitee shall promptly reimburse Seller
or
Buyer Parties, as applicable, for any payment made or expense incurred by
Seller
or Buyer Parties, respectively, in connection with providing such
indemnification up to such amount received by Buyer Indemnitee or Seller
Indemnitee, but net of any costs and expenses (including without limitation
attorneys’ fees) incurred by such Buyer Indemnitee or Seller Indemnitee in
collecting such amount, and adjusting for any increase in premiums resulting
from any such insurance claims.
8.9 Tax
Benefits.
Any
indemnity amounts payable to or on behalf of a Buyer Indemnitee or Seller
Indemnitee pursuant to this Agreement shall be reduced by the net present
value
of any realizable, actual tax benefit arising from the claim, loss or damage
for
which the indemnity is being paid, including any increase in deductions,
credits
or losses of Buyer Indemnitee or Seller Indemnitee (or any respective
affiliate). The net present value of such tax benefit shall be calculated
using
a discount rate equal to the mid-term applicable federal rate in effect on
the
day on which the indemnification payments are due, and the combined marginal
tax
rate for applicable U.S. federal, foreign, state and local income taxes for
the
Buyer Indemnitee or Seller Indemnitee (or its respective affiliate, as the
case
may be), as applicable.
9. [RESERVED].
21
10.
Miscellaneous.
10.1 Entire
Agreement.
This
Agreement, including the Exhibits and Schedules attached hereto (which are
incorporated herein by reference and expressly made a part hereof), embodies
the
entire Agreement and understanding between the Parties hereto as to the matters
herein addressed and supersedes all prior agreements and understandings relating
to the subject matter hereof, including without limitation the LOI.
10.2 No
Waiver.
No
failure to exercise and no delay in exercising any right, power, or remedy
hereunder or under any document delivered pursuant hereto shall impair any
right, power or remedy which the parties hereto may have, nor shall any such
delay be construed to be a waiver of any of such rights, powers, or remedies,
or
an acquiescence in any breach or default under this Agreement, nor shall
any
waiver of any breach or default of any party hereunder be deemed a wavier
of any
default or breach subsequently occurring.
10.3 Amendment.
No
provision of this Agreement or any document or instrument relating to the
Agreement may be amended, modified, supplemented, changed, waived, discharged,
or terminated unless the parties hereto consent thereto in writing.
10.4 Notices.
All
notices, requests, approvals, consents, demands and other communication provided
for or permitted hereunder shall be in writing, signed by an authorized
representative of the sender and addressed to the respective party at the
address set forth below:
| Buyer, Real Estate LLC, and Guarantor: | Xxxxxx Wholesale Nurseries, Inc. |
| 00 Xxxxx Xxxxx Xxxx | |
| Xxxxxxx, Xxxxx Xxxxxxxx 00000 | |
| ATTN: Xxxxxxx X. Xxxxxx, Xx. | |
| Copy To: | XXXXXX XXXXX, LLC |
| 0000 Xxxx Xxxxxx, Xxxxx 000 | |
| Post Office Drawer 2426 | |
| Columbia, South Carolina 29202 | |
| ATTN: G. Xxxxxx Xxxxxx, Esquire | |
| Seller | Xxxxx Horticulture, Inc. |
| 00000 Xxxxxxx Xxxx | |
| Xxxxxx, Xxxxxxxxxx 00000 | |
| ATTN: Xxxxxxx Xxxxxxxx | |
| Chief Financial Officer | |
| Copy To: | Paul, Hastings, Xxxxxxxx & Xxxxxx LLP |
| 000 Xxxxx Xxxxxx Xxxxx | |
| 00xx Xxxxx | |
| Xxxxx Xxxx, Xxxxxxxxxx 00000 | |
| ATTN: Xxxxxxx X. Xxxxx, Esquire |
A
party
hereto may change its respective address by notice in writing given to the
other
parties to this Agreement. Any notice, request, approval, consent, demand,
or
other communication shall be effective upon the first to occur of the following:
(i) when delivered to the party to whom such notice, request, approval, consent,
demand, or other communication is being given, or (ii) three (3) business
days
after being duly deposited in the U.S. mail, certified, return receipt
requested, to the address set forth above.
22
10.5 Severability
of Provisions.
In case
any one or more of the provisions contained in this Agreement should be invalid,
illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained herein shall not in
any way
be affected or impaired thereby.
10.6 Successors
and Assigns.
This
Agreement shall be binding upon the parties and their respective successors
and
assigns and shall inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement and the rights and obligations
hereunder shall not be assignable by any party without the written consent
of
the other parties hereto, and any such purported assignment by any party
without
such consent shall be void; provided, however, that the assignment of any
rights
or duties under this Agreement by one or both of Buyer Parties to Xxxxxx
Wholesale Nurseries, Inc. or any entity that is controlled, directly or
indirectly, by Xxxxxxx X. Xxxxxx, Xx., shall not require the consent of
Seller.
10.7 Counterparts.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one Agreement, and any party hereto may execute
this
Agreement by signing any such counterpart. The authorized attachment of
counterpart signature pages shall constitute execution by the
parties.
10.8 Choice
of Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of South Carolina.
10.9 Arbitration.
The
parties hereto consent to jurisdiction, subject to proper service of process,
regarding any disputes arising hereunder in the federal or state courts for
South Carolina; provided however, that the following shall apply: If a dispute,
controversy or claim (whether based upon contract, tort, statute, common
law, or
otherwise) (collectively a “Dispute”) arises from or relates directly or
indirectly to the subject matter hereof, and if the Dispute cannot be settled
within fifteen (15) calendar days through direct discussions between the
parties, any unresolved Dispute thereafter shall be settled by binding
arbitration conducted in accordance with the Commercial Arbitration Rules
(the
“Rules”) of the American Arbitration Association (the “AAA”) and judgment on the
award rendered by the arbitrator, after the review rights set forth below
(if
any) have been exhausted, may be entered in any court having jurisdiction
as set
forth above; provided however, that unless otherwise agreed as set forth
below,
the arbitration shall not be administered by the AAA; and provided further
however, that if the underlying claim involves a third party as a necessary
party to such proceedings, and such third party is not obligated, or does
not
agree, to arbitration hereunder, then the parties shall be entitled to resolve
the Dispute in such forum as is appropriate to include such third party in
the
proceedings, and the parties hereto shall waive their respective rights to
demand arbitration of the Dispute as set forth herein. The arbitration
proceedings shall be conducted in Columbia, South Carolina on an expedited
basis
before a neutral arbitrator (or three arbitrators if the Rules call for multiple
arbitrators). Each arbitrator shall be an attorney with excellent academic
and
professional credentials, who (i) is an active or retired member of the Bar
of
the State of South Carolina, (ii) has been actively engaged in the practice
of
corporate and commercial law (including mergers and acquisitions) in South
Carolina for at least fifteen (15) years, (iii) has substantial experience
in
the subject matter of this Agreement, and (iv) has no attorney-client, familial,
or pecuniary relationship
23
to
the parties; provided however, that such arbitrator is not required to be
listed
by AAA as an approved arbitrator. If the Rules call for three arbitrators,
each
of the parties shall within twenty (20) days after institution of the
arbitration designate one arbitrator and the two designated arbitrators shall
jointly designate the third arbitrator. If the Rules call for one arbitrator,
each of the parties shall designate one arbitrator and the two designated
arbitrators shall not serve but shall jointly designate a third arbitrator
who
shall serve as the single arbitrator. If in either case the two arbitrators
designated by the parties are unable to designate the third arbitrator within
ten (10) days, the third arbitrator shall be designated by the chief
administrative judge for Richland County, South Carolina Circuit Court upon
request made by either party after the expiration of such ten-day period.
Any
attorney who serves as an arbitrator shall be compensated at a rate equal
to his
or her current regular hourly billing rate if he or she is currently practicing,
and a reasonable hourly rate if not currently practicing. Unless otherwise
ordered by the arbitrators, pre-hearing discovery in the arbitration proceeding
shall be restricted to the following: (a) three depositions by each party
(plus
one additional deposition by each party for each expert witness used by the
other party); (b) two submissions of written interrogatories by each party
not
to exceed fifty total interrogatories, including subparts; (c) two requests
for
production of documents by each party; (d) two submissions of requests to
admit
by each party not to exceed thirty total requests to admit; and (e) such
similar
discovery respecting any third party which is a party to the proceeding (for
purposes of such limitations on discovery, all of the Buyer Parties and
Guarantor shall be deemed one party). All such pre-hearing discovery must
be
completed within one hundred twenty (120) days after the appointment of the
arbitrators, unless otherwise ordered by the arbitrators. All hearings conducted
by the arbitration panel shall be recorded by a court report for purposes
of
preparing a transcript, but a transcript will not be prepared unless requested
by a party for purposes of a review panel as described below. Upon the request
of either party, the arbitrator’s award shall include findings of fact and
conclusions of law, provided that such findings may be in summary form. In
the
event that the arbitrator’s award involves the award or denial of monetary
damages exceeding $250,000 or relief other than monetary damages, then either
party may seek expedited review of the arbitrator ’s award before an arbitration
review panel comprised of three arbitrators selected and qualified in the
same
manner as the initial arbitrator(s) (as set forth above) by submitting a
written
request to the initial arbitrators and the other party. The right of review
shall be deemed waived unless requested in writing within five (5) days of
the
receipt by the party seeking review of the initial arbitrator’s award. The
arbitration review panel shall be entitled to review all findings of fact
and
conclusions of law in whatever manner it deems appropriate (but such review
will
not include a de novo factual hearing) and may modify the award of the initial
arbitrator(s) in its discretion, and must be completed within one hundred
twenty
(120) days after the review is requested. The prevailing party in any
arbitration proceeding shall be entitled to an award of all reasonable
out-of-pocket costs and expenses (including attorneys’ and arbitrators’ fees)
related to the entire arbitration proceeding (including review if applicable).
Upon request of either party, the arbitrator(s) may require that the subject
arbitration proceedings be kept confidential and no party shall disclose
or
permit the disclosure of any information produced or disclosed in the
arbitration proceedings until the award is final. If recommended by the initial
or review arbitrators, the parties shall designate an organization (but not
AAA
unless both parties agree) to administer the arbitration in the manner that
the
AAA would administer the arbitration, and if the parties do not agree on
the
designation of an organization within ten (10) days the arbitrators shall
designate the organization (but not AAA). A party shall not be prevented
from
seeking temporary injunctive relief before a court of competent jurisdiction
in
an emergency or other exigent situation, but responsibility for resolution
of
the Dispute shall be appropriately transferred to the arbitrator(s) upon
appointment in accordance with the provisions hereof.
24
10.10 Usage.
The
section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement. Terms such as “hereof,” “hereunder,” “hereto,” “herein,”
“above”, “below”, and words of similar import shall refer to this Agreement in
its entirety; and all references to “Articles,” “Paragraphs,” “Sections,”
“Exhibits,” and “Schedules,” and similar cross references shall refer to
specified portions of this Agreement unless the context clearly requires
otherwise.
10.11 Further
Instruments and Acts.
From
time to time at a party’s request, whether at or after Closing and without
further consideration, the other party(ies) shall execute and deliver such
further instruments of conveyance, transfer, and assignment and upon
reimbursement for actual reasonable out-of-pocket expenses take such other
action as the requesting party reasonably may require to more effectively
convey
and transfer to the requesting party the properties to be conveyed, transferred,
and assigned hereunder, and, if necessary, will assist the requesting party
in
the collection or reduction to possession of such property. In addition,
each
party agrees to reasonably cooperate in resolving any matters resulting from
the
transactions contemplated hereby.
10.12 Remedies.
Upon
any breach or other violation of this Agreement, the parties hereto shall
be
entitled to exercise any and all rights and remedies contained herein or
now or
hereinafter existing and available at law, in equity, by statute, or otherwise.
No right or remedy herein conferred upon a party is intended to be exclusive
of
any other right or remedy contained herein; and every such right or remedy
shall
be cumulative and shall be in addition to every other right or remedy contained
herein or now or hereafter existing and available at law, in equity, by statute,
or otherwise. In connection with the seeking of any non-monetary equitable
relief, each of the parties acknowledges and agrees that the other parties
hereto would be damaged irreparably in the event any of the provisions of
this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties hereto agrees the other parties
hereto shall be entitled to an injunction or injunctions to prevent breaches
of
the provisions of this Agreement and to enforce specifically this Agreement
and
the terms and provisions hereof in any competent court having jurisdiction
over
the parties (subject to the provisions of Section 10.9
above).
[SIGNATURE
PAGE ATTACHED]
25
IN
WITNESS WHEREOF, the parties have executed and delivered this Asset Purchase
Agreement on or about August 29, 2007, to be legally binding and effective
as of
the date first above written.
| BUYER: | |
| Palmetto Perennials, LLC | |
| By: /s/ Xxxxxxx X. Xxxxxx, Xx. | |
| Xxxxxxx X. Xxxxxx, Xx. | |
| Manager and President | |
| REAL ESTATE LLC: | |
| Xxxxxx Holdings, LLC | |
| By: /s/ Xxxxxxx X. Xxxxxx, Xx. | |
| Xxxxxxx X. Xxxxxx, Xx. | |
| Manager and President | |
| SELLER: | |
| Xxxxx Nurseries, Inc. | |
| By: /s/ Xxxxxxx Xxxxxxxx | |
| Xxxxxxx Xxxxxxxx | |
| Chief Financial Officer |