EXHIBIT 2.6
EXECUTION COPY
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of the
date on the signature page hereto, by and between Integrated BioPharma, Inc., a
Delaware corporation ("Purchaser") and Aloe Commodities International, Inc., a
Texas corporation ("Seller"). Purchaser and Seller are collectively, the
"Parties".
RECITALS
WHEREAS, Seller is the owner of various assets related to the Naturally
Aloe(TM), Naturally Noni(TM) and Avera(R) Sport product lines (the
"Product Lines"); and
WHEREAS, the assets specifically and directly related to the Product Lines
include, but are not limited to, the following: trademarks, art work,
formula for the products, customer list, goodwill, and inventory; and
WHEREAS, the Parties desire to evidence an agreement for Purchaser to purchase
all of the assets related to the Product Lines from Seller, on the
terms and conditions set forth herein;
WHEREAS, Purchaser and Seller intend to enter into the transactions as of the
date hereof (the "Effective Date"); and
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements and representations herein contained, Purchaser and Seller
agree as follows:
Article I
Purchase and Sale
1.1 Purchase and Sale of Transferred Assets. On the terms and subject to
the conditions herein expressed, Seller agrees to sell, convey,
transfer, assign, and deliver to Purchaser, and Purchaser agrees to
purchase, good and marketable title to all of the assets, properties,
and business of Seller of every nature, and description, whether
tangible or intangible, contingent or otherwise, wherever so located
and whether or not reflected on the books and records of Seller related
to the Naturally Aloe(TM), Naturally Noni(TM) and Avera(R) Sport
product lines, including, without limitation, all copyrights,
trademarks, and trade names and associated goodwill, inventories,
product formulas, product labels, customer lists and books and records
(collectively hereinafter referred to as the "Transferred Assets").
Without limiting the generality of the foregoing, it is agreed that the
Transferred Assets shall include, without limitation, all of the assets
listed on Schedule "A" to this Agreement and shall be deemed
transferred to Purchaser in their respective amounts existing on the
Effective Date. No other assets of Seller are being transferred other
than the Transferred Assets.
1.2 No Assumption of Liabilities. Purchaser shall in no event assume or be
responsible for any liabilities, liens, security interests, claims,
obligations, or encumbrances of Seller, contingent or otherwise, and the
Transferred Assets shall be sold and conveyed to Purchaser free and clear
of all liabilities, liens, security interests, claims, obligations, and
encumbrances and arising out of the conduct to the business relating to
the Transferred Assets by Seller prior to the Closing (as defined
herein). Without limiting the generality of the foregoing, in no event
shall Purchaser assume or be responsible for: (i) any income, property,
franchise, sales, use or other tax of Seller or any filing requirements
or obligations with respect thereto arising out of or resulting from the
sale of the Transferred Assets hereunder (all such taxes to be paid by
Seller) or any transaction of Seller prior to or subsequent to the
execution of this Agreement; and (ii) any liabilities, obligations, or
costs resulting from any claim or lawsuit or other proceeding relating to
the Transferred Assets or naming Seller or any successor thereof as a
party and arising out of events, transactions, or circumstances occurring
or existing prior to the Closing Date.
1.3 Assignment of Contracts. Seller does hereby assign to Purchaser all of
Seller's right, title and interest in and to the contracts and agreements
listed on Schedule 1.3 attached hereto (the "Assigned Contracts"), free
and clear of all claims, liens, pledges, encumbrances, mortgages, taxes
and equities of any kind whatsoever.
1.4 Delivery of Know-How. At Closing, Seller shall furnish to Seller copies
of the documents that listed on Schedule 1.4 attached hereto that relate
to the Product Line Intellectual Property.
1.5 Excluded Assets. Notwithstanding anything to the contrary, the following
assets related to the Product Lines are being retained by Seller and are
not being assigned, transferred or sold to Purchaser:
a. All bank accounts, demand accounts, deposit accounts, cash on hand and
all accounts receivable arising from the operation of the Product Lines
prior to the Closing Date (as defined herein) except for the General
Nutrition Centers, Inc. account receivable listed on Schedule A.
b. All other assets of Seller not used in connection with the Product
Lines which are not specifically listed on Schedule A.
c. Manufacturing equipment that is used in connection with the Product
Lines.
1.6 Product Labels. Part of the Transferred Assets include existing product
labels printed with the name of Seller. Seller authorizes Purchaser to use such
labels until such supplies are exhausted.
Article II
Purchase Price
2.1 Purchase Price. The purchase price for the Transferred Assets
shall be $2,597,469.83 payable as follows:
a. Cash Consideration. Purchaser shall pay to Seller $872,469.83 upon
Closing ("Cash Consideration") in immediately available funds by wire
transfer.
b. Common Stock. Purchaser shall issue to Seller shares of common stock
of Purchaser representing that number of shares equal to (I)
$1,725,000.00 divided by (II) the average closing price for Purchaser's
common stock as reported on the American Stock Exchange for the last
ten (10) business days prior to the Closing Date (the "Share
Consideration"), as set forth on Schedule 2.1(b) attached hereto.
Such Share Consideration shall be held in escrow for a period of one
(1) year from the Closing Date and released pursuant to the terms
of an Escrow Agreement (the "Escrow Agreement") between and among
Purchaser, Seller and Vial, Hamilton, Xxxx & Xxxx, L.L.P. (the "Escrow
Agent") in the form of Exhibit A attached hereto. Purchaser will cause
its Transfer Agent to deliver a certificate representing such shares
to the Escrow Agent as soon as practicable after the Closing Date.
Such shares shall be restricted stock and shall bear the restrictive
legend set forth in Section 4.2(o) herein.
c. Registration Rights. Seller shall be entitled to the "piggy back"
registration rights to said shares in accordance with the Registration
Rights Agreement attached hereto as Exhibit "B."
2.2 Purchase Price Allocation. Seller and Purchaser agree to allocate the
purchase price among the Transferred Assets including the items listed
on Schedule A as set forth on Schedule 2.2 attached hereto.
2.3 Purchase Price Adjustment; Inventory and Valuation of Inventory.
a. Purchaser shall cause a physical inventory of the Products to be taken
by Purchaser's representative at Seller's premises after the close
of business on the day immediately prior to the Closing Date (the
"Closing Inventory"). The items to be included in this physical
inventory shall include all finished goods, work-in-process, raw
materials, bottles, labels, prepaid expenses and specified
intellectual property. Seller may have a representative present
during the Closing Inventory. At Closing, Seller and Purchaser shall
prepare an inventory schedule attached hereto as Schedule 2.3
detailing all inventory items. No inventory items shall have an
expiration date which expires within six (6) months from the Closing
Date. The inventory shall be valued consistent with generally
accepted accounting principles as agreed by the Parties and establish
the value of such inventory as of the Closing (the "Inventory Value").
b. If the Inventory Value is less than $597,470 the Purchase Price and the
Share Consideration shall be reduced by the difference between the
Inventory Value and $597,470 up to a maximum of $75,000 and if the
difference is greater than $75,000, then the Purchase Price and the
Cash Consideration shall be reduced by the difference between the
Inventory Value and $522,470.
2.4 Conversion and Supply Agreement. Concurrently herewith, Seller and
Purchaser shall enter into a Conversion and Supply Agreement in the
form of Exhibit C attached hereto.
Article III
Closing
3.1 Time and Place of Closing. The transactions contemplated by this
Agreement shall be consummated (the "Closing") on the date hereof at
11:00 a.m. (New Jersey time), simultaneously with the execution of this
Agreement by the Parties, at the offices of St. Xxxx & Xxxxx, L.L.C.,
Newark, New Jersey or on such other date, or at such other time or place,
as shall be mutually agreed upon by the Parties hereto (the "Closing
Date").
Article IV
Representations and Warranties
4.1 General Statement. The Parties make the representations and warranties to
each other which are set forth in this Article IV, elsewhere in this
Agreement, and in any financial statement, schedule or exhibit delivered
with this Agreement to the other party. All such representations and
warranties shall survive for a period of twelve (12) months only
following Closing, regardless of any investigation or lack of
investigation by any of the parties to this Agreement. No specific
representation and warranty shall limit the generality or applicability
of a more general representation or warranty. No representations or
warranties of either of the Parties will be considered incorrect or
breached unless the inaccuracy of the representation or warranty has a
material impact upon that Party's ability to perform its obligations
under this Agreement.
4.2 Representations and Warranties of Seller. Seller represents and
warrants to Purchaser that:
(a) Organization; Authorization. Seller is a corporation duly
organized, validly existing and in good standing under the
laws of the Texas. Seller has all requisite corporate power
and authority to own or lease and operate its properties and
to carry on its business and is qualified or licensed to do
business and is in good standing in every jurisdiction where
the nature of its business or the properties owned, leased or
operated by it requires qualification or licensure, except
where the failure to be so qualified or licensed would not
have a material adverse effect on the ability of Seller to
perform its obligations under this Agreement.
(b) Authority. Seller has full power and authority to execute and
deliver this Agreement, the other agreements contemplated
herein, and to consummate the transactions contemplated
hereby.
(c) Enforceability. This Agreement has been duly executed and
delivered by Seller and constitutes Seller's legal, valid and
binding obligation, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency or
other similar laws relating to creditors' rights generally,
now or hereafter in effect, and general principles of equity.
Seller need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any court,
government or governmental agency, or third person in order to
consummate the transactions contemplated by this Agreement
except for certain bank authorizations which have been
obtained. Schedule 4.2 (c) attached hereto contains a list of
such required consents.
(d) Ownership; Title. Seller is the owner of, and has good, valid
and marketable title to, the Transferred Assets, free and
clear of all encumbrances including any taxes, security
interests, purchase rights, contracts, commitments, equities,
claims, demands, liens, encumbrances, or other restrictions
whatsoever in law or in equity (the "Encumbrances"). Except
for this Agreement, Seller is not a party to any purchase
right, or other contract or commitment that could require
Seller to sell, transfer, or otherwise dispose of the
Transferred Assets. The trademarks conveyed hereunder are not
registered trademarks.
(e) Capacity. Seller has full legal power, right and authority and
all authorizations and approvals required by law to enter into
and perform this Agreement and to sell, transfer and deliver
good, valid and marketable title to the Transferred Assets
free and clear of any and all liens, claims, encumbrances, or
rights of third parties whatsoever in accordance with the
terms of this Agreement.
(f) Nonviolation. The execution and delivery of this Agreement and
the consummation of the Transactions by Seller do not and will
not (a) violate or conflict with the provisions of the
Articles of Incorporation or Bylaws, or other charter
documents, of Seller, (b) constitute a default under, violate,
conflict with, or result in the termination of, any contract,
agreement, judgment, order, injunction or decree to which any
Seller is a party, or by which Seller is bound or to which
Seller, or any of the Transferred Assets is subject, (c)
conflict with or violate any law, rule or regulation of any
governmental authority having jurisdiction over Seller or any
of the Transferred Assets, or (d) result in the creation or
imposition of any Encumbrance on the Transferred Assets.
(g) Litigation. There is no pending or, to the knowledge of
Seller, threatened, litigation or judicial, administrative or
arbitration claim, action or proceeding with respect to the
Transferred Assets nor are there any judgments, orders, writs,
injunctions or decrees currently in effect involving or
affecting any of the Transferred Assets.
(h) Inventory. All the Inventory including finished goods, goods
under open purchase orders or invoices on the Effective Date,
work-in-process and raw materials is in good condition, not
obsolete or defective, and is usable and saleable in the
ordinary course of Seller's business as presently conducted
and does not have an expiration date which expires within six
(6) months from Closing. All the items making up the Closing
Inventory (as conducted during the Closing Date Inventory from
October 15-16, 2003, and set forth Schedule 2.3) have not been
used or sold by Seller since the dates of the Closing
Inventory.
(i) Warranty or Product Liability Claims. There are no pending or,
to the knowledge of Seller, threatened warranty or product
liability claims against Seller with respect to the finished
goods. Schedule 4.2(i) attached hereto contains a list of all
warranty or product liability claims against such goods made
against Seller within the last year.
(j) Return Policy. A copy of Seller's return policy with respect
to the finished goods is attached hereto as Schedule 4.2(j).
(k) Compliance with Laws. Seller is in compliance with all
federal, state, local, municipal and foreign laws, rules,
regulations, statutes and ordinances applicable to Seller as
they relate to the Transferred Assets.
(l) Purchase Orders. Schedule 4.2(l) attached hereto contains a
list of open purchase orders and invoices ("Purchase Orders")
specifically identifying the goods and quantifies under such
open orders. Such Purchase Orders and the goods which are the
subject of such orders are being transferred to Purchaser
herewith free of any Encumbrances or third party claims and
are for the benefit of Purchaser.
(m) Permits and Licenses. Schedule 4.2(m) sets forth a list of
all permits, licenses or authorizations held by Seller
(collectively, the "Permits") required for sale of the
Products. Each such Permits is in full force and effect and
Seller is in compliance with such Permit. Such listed Permits
are the only Permits required for Purchaser to utilize the
Transferred Assets. To Seller's nowledge, no suspension or
cancellation of a Permit is threatened and Seller has no basis
for believing that such Permit will not be assignable to
Purchaser or renewable upon expiration, as the case may be.
To Seller's knowledge, each such Permit will continue in full
force and effect immediately following the Closing.
(n) Intellectual Property. Schedule 4.2(n) lists (a) all
trademarks, trade names, logos, patents, if any, service
marks, designs and specifications, copyrights, data, formulas,
processes, inventions nd other intellectual property and all
applications therefor related to the Transferred Assets
(collectively, "Intellectual Property"), owned, licensed or
used by Seller (and discloses whether such Intellectual
Property is owned by Seller and any agreements which license
such Intellectual Property to Seller or otherwise allows
Seller to use such Intellectual Property) and (b) all licenses
granted by Seller, if any, with regard to Intellectual
Property. To the knowledge of Seller, Seller owns or has the
right to use all Intellectual Property owned, licensed or used
by it, and such rights will be owned, licensed or made
available for use by Purchaser after the Closing on terms and
conditions identical to those under which Seller owned,
licensed or used such rights prior to the Closing. To the
knowledge of Seller, no Intellectual Property owned, licensed
or used by Seller violates or infringes on any rights of
any third parties. There is no pending or, to the knowledge
of Seller, threatened, claim or litigation contesting the
right of Seller to own, license or use such Intellectual
Property. To the knowledge of Seller, no third party is
presently infringing any Intellectual Property owned, licensed
or used by Seller. Seller has filed certain trademark
applications with the United States Patent and Trademark
Office with respect to Naturally Aloe(TM) and Naturally
Noni(TM); however, Seller can give no assurance that it will
be granted a registered trademark with respect to such marks.
(o) Accredited Investor; Investment Representation.
(i) Seller is acquiring the Share Consideration for its
own account for investment only, and not with a view
to, or for sale in connection with, any distribution
of such shares in violation of the Securities Act of
1933, as amended (the "Securities Act"), or any rule
or regulation under the Securities Act.
(ii) Seller has had adequate opportunity to obtain from
representatives of Purchaser such information, in
addition to the representations set forth in this
Agreement, as is necessary to evaluate the merits
and risks of such Seller's acquisition of the Share
Consideration.
(iii) Seller has sufficient experience in business,
financial and investment matters to be able to
evaluate the risks involved in the acquisition of
the Share Consideration and to make an informed
investment decision with respect to such
acquisition.
(iv) Seller understands that the shares representing the
Share Consideration have not been registered under
the Securities Act and are "restricted securities"
within the meaning of Rule 144 under the Securities
Act; and that until such shares are so registered,
the shares representing the Share Consideration
cannot be sold, transferred or otherwise disposed of
unless they are subsequently registered under the
Securities Act or an exemption from registration is
then available.
(v) Seller agrees and understands that until the shares
representing the Share Consideration are sold under
an effective registration statement pursuant or sold
pursuant to Rule 144 under the Securities Act, a
legend substantially in the following form may be
placed on the certificate representing the Share
Consideration to be issued to Seller:
"The shares represented by this certificate
have not been registered under the
Securities Act of 1933, as amended (the
"Act"), and may not be sold, transferred or
otherwise disposed of in the absence of an
effective registration statement under such
Act or an opinion of counsel satisfactory to
the Integrated BioPharma, Inc. to the effect
that such registration is not required."
(vi) Seller represents that it (i) is an "accredited
investor" within the meaning of Rule 501(a) under
the Act or (ii) has utilized a purchaser
representative in accordance with Regulation D under
the Act.
(p) Brokers or Finders Fees. No agent, broker, investment banker
or other firm, entity or individual is entitled to any
broker's or finder's fee or any other commission or similar
fee from Seller in connection with the transactions
contemplated pursuant to this Agreement.
(q) Disclosure of Material Facts. None of the representations and
warranties contained in this Agreement contains any untrue
statement of a material fact or omits to state any material
fact necessary to make the statements contained herein or
therein not misleading.
(r) Financial Statements. Attached hereto as Schedule 4.2(r) is a
true and correct copy of the following financial statements of
Seller (collectively, the "Financial Statements"): a balance
sheet as of the end of Seller's last fiscal year and the
related statement of income and retained earnings for the
fiscal year then ended, together with a balance sheet as of
August 31, 2003 and the related statement of income and
retained earnings for the eight (8) months then ended (the
"Interim Statements"). The Financial Statements fairly
present, in all material respects, the financial condition,
assets and liabilities, results of operations and related
costs and expenses of Seller as of the dates or for the
periods presented in the Financial Statements, as applicable,
in each case, in conformity with generally accepted accounting
principles, applied on a consistent basis during the period
involved, subject in the case of the Interim Statements, to
normal year-end and audit adjustments. The Financial
Statements are in accordance with Seller's books and records.
(s) Solvency. As of the Closing Date, Seller is able to pay its
debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business.
(t) Validity of Sale. The sale of the Transferred Assets by Seller
to Purchaser is a sale made for fair and valid consideration
and the sale and the transactions contemplated pursuant to
this Agreement have not been entered into by Seller with an
intent to hinder, delay or defraud its creditors.
(u) Sales. Seller's sales in 2001, 2002 and 2003 for the products
Avera(R) Sport-Protein Crunch, Avera(R)
Sport-Distributor/Other, Naturally Noni(TM) and Naturally
Aloe(TM) are set forth on Schedule 4.2(u) attached hereto, and
Seller represents that Schedule 4.2(u) accurately represents
the sales of such products during those periods.
4.3 Purchaser's Representations and Warranties. Purchaser
represents and warrants to Seller that:
Organization. Purchaser is a corporation duly organized,
(a) validly existing and in good standing under the laws of the
Delaware.
(b) Authority. Purchaser has full power and authority to execute
and deliver this Agreement and other agreements contemplated
herein, to issue the Share Consideration and to consummate the
transactions contemplated hereby.
(c) Authorization; Enforceability. The execution and delivery by
Purchaser of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Purchaser and no other
corporate proceedings on the part of Purchaser or its
stockholders are necessary to authorize the execution and
delivery by Purchaser of this Agreement or the consummation of
the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Purchaser and constitutes
Purchaser's legal, valid and binding obligation, enforceable
in accordance with its terms, except as limited by applicable
bankruptcy, insolvency or other similar laws relating to
creditors' rights generally, now or hereafter in effect, and
general principles of equity. Purchaser need not give any
notice to, make any filing with, or obtain any authorization,
consent, or approval of any court, government or governmental
agency, or third person in order to consummate the
transactions contemplated by this Agreement.
(d) Capitalization. The authorized capital stock of Purchaser
consists of 26,000,000 shares of stock, comprised of Stock")
and 1,000,000 shares of preferred stock, with a par value of
$.002 per share (the "Preferred Stock"). As of September 30,
2003, there were issued and outstanding 10,321,839 shares of
Common Stock and 9,500 shares of Series A Convertible
Preferred Stock. All outstanding sharesof Common Stock that
make up the Share Consideration, when issued, will be validly
issued, fully paid and non-assessable. Other than this
Agreement or the Escrow Agreement, there is no subscription,
option, warrant, call, right, agreement or commitment relating
to the issuance, sale, delivery or transfer by Purchaser
(including any right of conversion or exchange under any
outstanding security or other instrument) of the shares of
Common Stock that make up the Share Consideration. Upon
consummation of the transactions contemplated hereby, Seller
shall acquire good title to the shares of the Common Stock
that make up the Share Consideration, free and clear of all
pledges, security interests, liens, charges, encumbrances,
equities, claims and options of whatever nature arising prior
to the deliver of the Share Consideration to Seller, subject
to the provisions of Article VIII herein.
(e) Nonviolation. The execution and delivery of this Agreement and
the consummation of the transactions contemplated herein by
Purchaser do not and will not (a) violate or conflict with the
provisions of the Articles of Incorporation or Bylaws, or
other charter documents, of Purchaser, (b) constitute a
default under, violate, conflict with, or result in the
termination of, any contract, agreement, judgment, order,
injunction or decree to which Purchaser is a party, or by
which Purchaser is bound, or (c) conflict with or violate any
law, rule or regulation of any governmental authority
having jurisdiction over Purchaser. There is no requirement
applicable to Purchaser to make any filing with, or to obtain
any permit, authorization, consent or approval of, any
governmental or regulatory authority as a condition to the
lawful consummation by Purchaser of the delivery of the Share
Consideration pursuant to this Agreement. Neither the
execution and delivery of this Agreement by Purchaser nor
delivery by Purchaser of the Share Consideration pursuant to
this Agreement will: (a) conflict with or result in a breach
of any provision of its Certificate of Incorporation, as
amended or its By-laws; (b) result in any default (or give
rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, agreement,
lease or other instrument or obligation of Purchaser; or (c)
violate any order, writ, injunction or decree applicable to
Purchaser.
(f) Brokers or Finders Fees. No agent, broker, investment banker or
other firm, entity or individual is entitled to any broker's or
finder's fee or any other commission or similar fee from Purchaser
in connection with the transactions contemplated pursuant to this
Agreement.
(g) Disclosure of Material Facts. None of the representations and
warranties contained in this Agreement or in any report or form
filed with the Securities and Exchange Commission by Purchaser
contains any untrue statement of a material fact or omits to state
any material fact necessary to make the statements contained
herein or therein not misleading.
4.4 Survival. The representations and warranties of Seller and Purchaser,
respectively, contained in this Agreement shall survive the Closing for a
twelve (12) month period.
Article V
Conditions Precedent
5.1 Conditions Precedent to Purchaser's Obligations. The obligation of
Purchaser to close the transactions contemplated by this Agreement is
subject to the satisfaction or the fulfillment of all of the following
conditions on or prior to the Closing Date, upon non-fulfillment of any
of which, this Agreement may, at Purchaser's option, be terminated
pursuant to and with the effect set forth in Article X:
a. Each and every representation and warranty made by Seller shall have
been true and correct when made and shall be true and correct as if
originally made on the Closing Date.
b. All obligations of Seller to be performed hereunder through, and
including on, the Closing date (including, without limitation, all
obligations which Seller would be required to perform at the Closing
if the transactions contemplated hereby were consummated) shall have
been performed.
c. No suit, proceeding or investigation shall have been commenced or
threatened by any governmental authority or private person on any
grounds to restrain, enjoin or hinder, or to seek material damages on
account of, the consummation of the transactions contemplated hereby.
d. Seller shall deliver all of the Transferred Assets to Purchaser on
the Closing Date, or shall take such other action with respect to the
Transferred Assets as agreed between the Parties.
5.2 Conditions Precedent to Seller's Obligations. The obligation of Seller to
close the transactions contemplated by this Agreement is subject to the
satisfaction or the fulfillment of all of the following conditions on or
prior to the Closing Date, upon non-fulfillment of any of which, this
Agreement may, at Seller's option, be terminated pursuant to and with the
effect set forth in Article X:
a. Each and every representation and warranty made by Purchaser shall
have been true and correct when made and shall be true and correct as
if originally made on the Closing Date.
b. All obligations of Purchaser to be performed hereunder through, and
including on, the Closing Date (including, without limitation, all
obligations which Purchaser would be required to perform at the
Closing if the transactions contemplated hereby were consummated)
shall have been performed.
c. No suit, proceeding or investigation shall have been commenced or
threatened by any governmental authority or private person on any
grounds to restrain, enjoin or hinder, or to seek material damages on
account of, the consummation of the transactions contemplated hereby.
Article VI
Closing and Closing Deliveries
6.1 Form of Documents. At the Closing, the parties shall deliver the
documents, and shall perform the acts, which are set forth in this
Article VI. All documents to be delivered shall be in form and substance
reasonably satisfactory to the party to whom such documents are to be
delivered.
6.2 Purchaser's Deliveries. Subject to the fulfillment or written waiver of
the conditions set forth in Section 5.1, Purchaser shall execute and/or
deliver to Seller all of the following:
(a) Counterpart of this Agreement duly executed by Purchaser.
(b) A wire transfer of immediately available funds in the amount of the
Cash Consideration as defined hereinabove.
(c) As soon as practicable after the Closing Date, Purchaser shall cause
its transfer agent to deliver a certificate representing the Share
Consideration to the Escrow Agent pursuant to Section 2.1(b).
(d) Counterpart of an Escrow Agreement by and between Purchaser, Seller
and Escrow Agent duly executed by Purchaser in the form attached
hereto as Exhibit A;
(e) Counterpart of a Registration Rights Agreement by and between
Purchaser and Seller duly executed by Purchaser in the form attached
hereto as Exhibit B;
(f) Counterpart of a Conversion and Supply Agreement by and between
Purchaser and Seller duly executed by Purchaser in the form attached
hereto as Exhibit C;
(g) A Proprietary Rights Assignment duly executed by Purchaser in the
form attached hereto as Exhibit E;
(h) Any other instruments that Seller may reasonably deem necessary or
desirable to effect or evidence the transactions contemplated hereby,
including, but not limited to, the following:
(i) Certificate of Good Standing in Purchaser's jurisdiction
of organization;
(ii) Certificates as to the incumbency of Purchaser's
officers;
(iii)Certificate of an officer of Purchaser as to the
representations and warranties of Purchaser; and
(iv) Board resolutions approving this Agreement and the
transactions contemplated herein.
6.3 Seller's Deliveries. Subject to the fulfillment or written waiver of
the conditions set forth in Section 5.2, Seller shall execute and/or
deliver to Purchaser all of he following:
(a) Counterpart of this Agreement duly executed by Seller;
(b) Counterpart of an Escrow Agreement by and between Purchaser, Seller
and Escrow Agent duly executed by Seller in the form attached hereto
as Exhibit A;
(c) Counterpart of a Registration Rights Agreement by and between
Purchaser and Seller duly executed by Seller in the form attached
hereto as Exhibit B;
(d) Counterpart of a Conversion and Supply Agreement by and between
Purchaser and Seller duly executed by Seller in the form attached
hereto as Exhibit C;
(e) Xxxx of Sale for the Transferred Assets duly executed by Seller in
the form attached hereto as Exhibit D;
(f) A Proprietary Rights Assignment duly executed by Seller in the form
attached hereto as Exhibit E;
(g) Any and all consents and/or approval required in order for Seller to
transfer the Transferred Assets to Purchaser and to complete the
transactions contemplated by this Agreement.
(h) Any other instruments that Purchaser may reasonably deem necessary or
desirable to effect or evidence the transactions contemplated hereby,
including, but not limited to, the following:
(i) Certificate of Good Standing in Seller's jurisdiction of
organization;
(ii) Certificates as to the incumbency of Seller's officers;
(iii)Certificate of an officer of Seller as to the
representations and warranties of Seller; and
(iv) Shareholder and board resolutions approving this
Agreement and the transactions contemplated herein.
Article VII
Post-Closing Covenants
7.1 Licenses and Permits. Seller shall cooperate with Purchaser in all
commercially reasonable respects in connection with Purchaser's
application or the transfer, renewal, or issuance of any Permit.
7.2 Delivery of Stock Certificate. Purchaser shall cause its transfer agent
to deliver a certificate representing the Share Consideration to the
Escrow Agent within five (5) business days after the Closing Date.
7.3 Assistance with Preparation of Financial Statements. In the event
Purchaser is required to prepare financial statements including
information relating to the Transferred Assets in accordance with
applicable laws, Seller shall use commercially reasonable efforts to
assist Purchaser and make available such information deemed necessary by
Purchaser to prepare such statements, at Purchaser's expense.
7.4 Remittance of Receipts. Any receipts collected by or paid to Seller after
the Closing Date with regard to sale of Products after the Closing Date
will be duly endorsed or assigned by Seller to Purchaser and promptly
remitted to Purchaser in the same form as received by Seller.
7.5 Returned Goods. Seller acknowledges and agrees that the following
category of goods returned by customers to Purchaser after the Closing
Date shall remain the responsibility of Seller and Purchaser shall have
no obligations thereby for: (i) defective goods which were sold by Seller
prior to the Closing Date; and (ii) defective goods which were
subsequently manufactured by Seller for Purchaser from works-in-process
existing on the Closing Date. Seller shall reimburse Purchaser for any
such amounts within five (5) business days upon receipt of reasonably
acceptable documentation of Purchaser's costs and expenses incurred to
replace such customer's returned goods.
7.6 Confidentiality. Seller will keep confidential and will not directly or
indirectly disseminate, disclose, use, communicate, divulge or otherwise
appropriate any of the Confidential Information (as defined below).
Seller will take all steps necessary or requested by Purchaser to ensure
that all of the Confidential Information is kept secret and confidential
for the sole use and benefit of Purchaser. All Confidential Information
will be the exclusive property of Purchaser, and Seller will promptly
deliver to Purchaser all Confidential Information, including all copies
thereof, which is in Seller's possession or under Seller's control,
without making or retaining any copies or extracts thereof. As used in
this Agreement, "Confidential Information" means the information set
forth on Schedule 7.6 attached hereto.
7.7 Limited Non-Compete; Non-Solicitation. As a condition to Purchaser's
willingness to enter into this Agreement and consummate the transactions
contemplated herein, following the Closing Seller and its officers,
directors and Affiliates shall not directly or indirectly: (a) own,
manage, control, participate in, consult with, render services for, or in
any manner engage in any business within the United States of America
engaged in the business of manufacturing, marketing, distributing any
product bearing the name Naturally Aloe(TM), Naturally Noni(TM) and
Avera(R) Sport; or (b) for a period of five (5) years thereafter, (i)
sell, market, or provide any same or similar product to a retail class of
trade in the following categories: mass market, groceries, drugstores,
clubs, convenience stores or independents, or to Costco Wholesale
Corporation locations worldwide; (ii) own any portion of a private label
customer that sells to the retail class of trade or a private label brand
that is sold in the retail class of trade; or (iii) induce or attempt to
induce Costco Wholesale Corporation or General Nutrition Centers, Inc. to
cease doing business with Purchaser, or in any way interfere with the
relationship Costco Wholesale Corporation or General Nutrition Centers,
Inc. and Purchaser. Purchaser acknowledges and agrees that Seller is a
contract manufacturer of aloe and noni juice products for private label
customers. Purchaser acknowledges that Seller has no control over such
private label customers or whether such private label customers may
distribute such aloe and noni juice products to a retail class of trade.
If, at the time of enforcement of this Section, a court holds that the
restrictions stated herein are unreasonable under circumstances then
existing, the Parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area.
For the purposes of this Agreement, "Affiliates" means any person, firm,
corporation, partnership, limited liability company, joint venture,
business trust, association or other entity that now or in the future,
directly or indirectly, controls, is controlled by or is under common
control with Seller. For the purposes of this Agreement, "control" shall
mean engage or participate in the ownership, operation or management of
the foregoing, "control" shall mean, with respect to: (a) corporation,
the ownership, directly or indirectly, of greater than fifty percent
(50%) of the voting power to elect the directors thereof and "own" shall
include any ownership by way of capital stock, partnership interests, or
any other equity ownership.
Any transactions with Purchaser or its Affiliates pursuant to this
Agreement or pursuant to their written approval or direction shall not be
deemed in violation of this Section 7.7.
7.8 Remedies. Seller acknowledges and agrees that its obligations under
Section 7.6 and 7.7 above are of a special, unique and extraordinary
character, that they are reasonably related to the legitimate
business interests of Purchaser, and that a failure to perform any
such obligation or a violation of such obligations will cause
irreparable injury to Purchaser, the amount of which would be
impossible to estimate or determine and for which adequate
compensation could not be fashioned. Therefore, Seller agrees that
Purchaser will be entitled, as a matter of right, and without the
need to prove irreparable injury or to post bond, to an injunction,
restraining order, writ of mandamus or other equitable relief
(including specific performance) from any court of competent
jurisdiction, restraining any violation or threatened violation of
any term of such Section 7.6 or 7.7, or requiring compliance with or
performance of any obligation thereunder, by Seller and such other
persons as the court will order. The rights and remedies provided
Purchaser hereunder are cumulative and will be in addition to the
rights and remedies otherwise available to Purchaser under any other
agreement or applicable law, including the right to require Seller
to account for and pay over to Purchaser all compensation, profits,
moneys, accruals, increments or other benefits derived or received
as a result of any transactions constituting a breach of the
covenants contained therein.
7.9 Bulk Transfer Laws. The Parties do not believe that any laws
relating to bulk sales or bulk transfers (including any such laws
under the Uniform Commercial Code) are applicable to any of the
transactions contemplated under this Agreement. Notwithstanding the
foregoing, and in order to induce Purchaser to execute this
Agreement and consummate these transactions, Seller will indemnify
and defend Purchaser and its Affiliates and hold them harmless (in
accordance with Article VIII below) from and against any claim or
other expense arising out of, resulting from or relating to, any
determination of the applicability to any of the transactions of, or
failure to comply with in connection with any of the transactions
of, any of such laws.
Article VIII
Indemnification Agreement
8.1 General. From and after the Closing, the parties shall indemnify each
other as provided in this Article VIII. For the purposes of this Article
VIII, each party shall be deemed to have remade all of its
representations and warranties contained in this Agreement at the Closing
with the same effect as if originally made at the Closing. As used in
this Agreement, the term "Damages" shall mean all liabilities, demands,
claims, actions or causes of action, regulatory, legislative or judicial
proceedings or investigations, assessments, levies, losses, fines,
penalties, damages, costs and expenses, including, without limitation
reasonable attorneys', accountants', investigators', and experts' fees
and expenses, sustained or incurred in connection with the defense or
investigation of any such claim.
8.2 Seller's Indemnification Obligations. Seller shall defend, indemnify,
save and keep harmless Purchaser, its Affiliates and their respective
representatives, officers, directors, shareholders, agents, employees,
successors and assigns against and from all Damages sustained or incurred
by any of them resulting from or arising out of:
(a) any material inaccuracy in or any material breach of any
representation and warranty made by Seller in this Agreement or
in any closing document delivered to Purchaser in connection
with this Agreement;
(b) any failure by Seller to perform or observe any covenant or
agreement to be performed or observed by it or on its behalf under this
Agreement or under any certificates or other documents or agreements
executed by Seller in connection with this Agreement;
(c) any of Seller's debts, liabilities, taxes, obligations, contracts
or commitments of any nature or kind whatsoever, whether existing as of
the Closing or arising thereafter, known or unknown, contingent or
otherwise;
(d) any agreements, contracts, negotiations or other dealings by Seller
or any of its shareholders with any person concerning the sale of the
Transferred Assets.
8.3 Setoff. Purchaser shall have the right to set-off any amounts owed by
Seller to Purchaser pursuant to this Agreement (including any amounts
owed pursuant to Section 8.2) against any amounts owed by Purchaser to
Seller pursuant to this Agreement or against the Share Consideration.
8.4 Valid Transfer. Notwithstanding anything to the contrary contained
herein, if after the Closing Date, a claim is made challenging the
validity of the sale of the Transferred Assets by Seller to Purchaser and
the transactions contemplated in this Agreement and such claim is upheld
or resolved by a judicial proceeding, arbitration or otherwise, during
the time the Share Consideration is held in escrow, then the Parties
agree that Purchaser shall have the option (the "Option") to return the
Product Lines to Seller in consideration for the release of the Share
Consideration from escrow and return of the such Share Consideration to
Purchaser. Purchaser and Seller agree that Purchaser's exercise of the
Option constitutes an election of remedies and waiver of all causes of
action pertaining to representations, warranties, and indemnification
obligations related to the validity of the sale of the Transferred
Assets.
8.5 Purchaser's Indemnification Obligations. Purchaser shall defend,
indemnify, save and keep harmless Seller, and its representatives,
officers, directors, agents, employees, successors and assigns against
and from all Damages sustained or incurred by any of them resulting from
or arising out of or by virtue of any inaccuracy in or breach of any
representation and warranty made by Purchaser in this Agreement or in any
closing document delivered to Seller in connection with this Agreement.
8.6 Expiration of Indemnification /Time and Manner of Claim. Purchaser or
Seller shall be indemnified only to the extent that notice of a claim
therefor is asserted by the other in writing and delivered prior to the
expiration of twelve (12) months from the Closing Date of this Agreement.
Any notice of a claim by reason of any of the representations and
warranties contained in this Agreement shall state specifically the
representation or warranty with respect to which the claim is made, the
facts giving rise to an alleged basis for the claim, and the amount of
liability asserted against the other party by reason of the claim. Any
claim made by Purchaser or Seller against the other for a default or
breach of any covenant or agreement contained in this Agreement must be
made by written notice which shall state specifically the covenant or
agreement with respect to which the claim is made, the facts giving rise
to an alleged basis for such claim and the amount of liability asserted
against the other party by reason of such claim.
Article IX
Employee Matters
9.1 Employee Matters; Hiring of Employees. Purchaser may, in its sole
discretion, offer employment as of the Closing to the following employees of
Seller: Xxxx Xxxxxx, Xxxxxx Xxxxxxx and Xxx Xxxxx. All such employees so hired,
if any, will be considered "new hires" by Purchaser, and Purchaser will
establish all terms and conditions relating to their employment in its sole
discretion. Purchaser shall have no obligation to any employee of Seller not
hired by Purchaser. Nothing contained in this Section 9.1 shall obligate
Purchaser to employ any of such employees of Seller or a Transferred Employee
for any length of time and the employment of any such employees by Purchaser, if
any, shall be terminable at will at any time.
Article X
Miscellaneous
10.1 Expenses. Each party shall be responsible and pay for its respective
expenses, in connection with the authorization, preparation, execution
and performance of this Agreement, including without limitation, all fees
and expenses of agents, representatives, counsel, accountants and
consultants.
10.2 Right to Terminate. Anything to the contrary herein notwithstanding, this
Agreement and the transactions contemplated hereby may be terminated at
any time prior to the Closing by:
(a) the mutual written consent of Purchaser and Seller;
(b) either Purchaser or Seller, if the Closing shall not have
occurred at or before 11:59 p.m. on October 24, 2003; provided,
however, that the right to terminate this Agreement under this
Section shall not be available to any party whose failure to fulfill
any material obligation under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or prior to the
aforesaid date; or
(c) Seller, on the one hand, or by Purchaser, on the other hand, if a
material breach or default shall be made by the other party in the
observance or in the due and timely performance of any of the
covenants or agreements contained herein.
10.3 Notices. Any notice required or permitted to be given under this
Agreement shall be made in writing, and shall be effective when mailed,
by registered or certified mail as follows:
Purchaser: Integrated BioPharma, Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Chief Executive Officer
Copy to: St. Xxxx & Xxxxx, LLC
Xxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Seller: Aloe Commodities International, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: L. Xxxxx XxXxxxxx, President
Copy to: Vial, Hamilton, Xxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Any party may change said address by notice to the other parties in
accordance with the terms hereof.
10.4 Press Releases and Announcements. Neither Party shall issue any press
release or public announcement relating to the subject matter of this
Agreement without the prior written consent of the other Party; provided,
however, that either Party may make any public disclosure it believes in
good faith is required by applicable law, regulation or national exchange
rule (in which case the disclosing Party shall use reasonable efforts to
advise the other Party and provide it with a copy of the proposed
disclosure prior to making such disclosure).
10.5 Representations as to Compliance with Law. Whenever a representation or
warranty is made herein with respect to compliance with any law, that
representation means the applicable subject matter is in compliance with
applicable statutes, regulations and ordinances as in existence on the
date hereof and on the Closing Date and does not extend to any amendments
or revisions of such laws adopted subsequent to such dates.
10.6 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns.
Seller may not assign its rights, interests or obligations hereunder.
10.7 Entire Agreement; Amendment. This Agreement, including the exhibits and
schedules hereto, shall constitute the entire agreement between the
Parties with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings. The Parties hereto may,
by mutual consent, amend or modify and supplement this Agreement in such
manner as may be agreed upon in writing.
10.8 Captions. The captions and heading contained herein are solely for
convenience of reference and will not affect the interpretation of any
provision hereof.
10.9 Waiver, Discharge, etc. This Agreement may not be released, discharged or
modified except by an instrument in writing signed on behalf of each of
the Parties. The failure of a party to enforce any provision of this
Agreement shall not be deemed a waiver by such party of any other
provision or subsequent breach of the same or any other obligation
hereunder.
10.10 Governing Law. This Agreement shall be construed and the rights of the
Parties hereunder shall be governed by laws of the State of New Jersey.
Venue for any dispute regarding this Agreement shall be in a court of
competent jurisdiction in Union County, New Jersey.
10.11 Counterparts and Facsimile Signatures. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one Agreement. This Agreement
may be executed by facsimile signature.
10.12 Severability. Any portion of this Agreement which a court of competent
jurisdiction shall determine to be void or unenforceable against public
policy, or for any other reason, shall be deemed to be severable from
this Agreement and shall have no effect on the other covenants or
provisions in this Agreement. It is agreed that the court shall be
empowered to reform and construe any provision that would otherwise be
void or unenforceable in a manner that will be valid and enforceable to
the maximum extent permitted by law.
10.13 Attorneys' Fees. In the event that any action or proceeding is brought in
connection with this Agreement, the prevailing party therein shall be
entitled to recover its costs and reasonable attorney's fees.
10.14 Further Assurances. Seller shall, and shall cause its officers, directors
and Affiliates to, execute and deliver all other documents and
instruments of conveyance, transfer or assignment and take all other
actions reasonably requested by Purchaser at any time before or after the
Closing Date to effect the sale and transfer to Purchaser of the
Transferred Assets in accordance with this Agreement. Purchaser shall,
and shall cause its officers, directors and Affiliates to, execute and
deliver all other documents and instruments of conveyance, transfer or
assignment and take all other actions reasonably requested by Seller at
any time before or after the Closing Date to effect the sale and transfer
to Seller of the Cash Consideration and the Share Consideration in
accordance with this Agreement.
[signature page follows]
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the 22nd day of October, 2003.
Seller:
Aloe Commodities International, Inc.
By: /s/ L. Xxxxx XxXxxxxx
-------------------------
L. Xxxxx XxXxxxxx, Chairman & CEO
Purchaser:
Integrated BioPharma, Inc.
By: /s/ E. Xxxxxx Xxx
---------------------
E. Xxxxxx Xxx, Chief Executive Officer
And with respect to the provisions of Section 7.7 only:
/s/ L. Xxxxx XxXxxxxx
---------------------
L. Xxxxx XxXxxxxx
/s/ Xxxx XxXxxxxx
-----------------
Xxxx XxXxxxxx
/s/ Xxxx Xxxxxxxxxx
-------------------
Xxxx Xxxxxxxxxx
/s/ Xxxxxxxx X. Xxxxxx
----------------------
Xxxxxxxx X. Xxxxxx
Exhibit A. Escrow Agreement
(to be attached)
Exhibit B. Registration Rights Agreement
(to be attached)
Exhibit C. Conversion and Supply Agreement
(to be attached)
Exhibit D. Xxxx of Sale
(to be attached)
Exhibit E. Proprietary Rights Agreement
(to be attached)
Schedules
(to be attached)
