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EXHIBIT 10.49
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of
October 30, 1997, by and among Mission Party Ice, Inc., a Texas corporation
("Buyer"), and R2D2, Inc., a Texas corporation ("Seller"), and Xxxxx Xxxxxx and
Xxxxxx Xxxxxx, who collectively own all of the outstanding capital stock of
Seller (collectively the "Shareholders").
PRELIMINARY STATEMENTS
Seller is engaged in the sale of packaged ice products (such business
being herein referred to as "Seller's Business" or "Business").
Seller desires to sell to Buyer and Buyer desires to purchase from
Seller certain assets that Seller uses in Seller's Business.
Seller is currently the lessee of approximately 4,000 square feet of
that certain parcel of real property located at 0000 Xxxxxxx, Xxxxxx, Xxxxx (the
"Real Property"), which is subject to a lease agreement (the "Real Property
Lease") by and among Seller and Xxx X. XxXxxxxx, successor to Xxxxxx Properties
& Associates, Inc., which Seller will assign to Buyer.
AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual
agreements, covenants, representations and warranties hereafter set forth, the
parties hereby agree as follows:
I. PURCHASE AND SALE
1.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement, Seller agrees to sell, convey, assign, transfer and deliver to
Buyer, and Buyer agrees to purchase, at the Closing, the personal property of
Seller that is described herein in Schedule 1.1 attached hereto and incorporated
herein by reference (collectively the "Assets"). The Assets are being sold by
Seller and purchased by Buyer AS IS, WHERE IS, WITH ALL FAULTS AND BUYER
ACKNOWLEDGES THAT NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE ARE MADE BY SELLER OR ARE TO BE IMPLIED IN THIS TRANSACTION.
1.2 PURCHASE PRICE. The Purchase Price of the Assets shall be $550,000
to be paid directly to Seller.
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1.3 ASSUMPTION OF LIABILITIES. Seller shall transfer and assign to
Buyer all of its right, title and interest in and to the leases (collectively,
the "Leases") described in Schedule 1.3 which is attached hereto and hereby
incorporated herein, which Leases Buyer agrees to assume as of the Closing and
save and hold harmless Seller from same. At Closing, Buyer shall assume and
agree to pay, according to the terms thereof, all amounts thereafter remaining
due on the Leases, but it is agreed that in the event the assignment of any of
the Leases is not allowed by a Lessor thereof (unless such denial on the part of
Lessor is for reasons of Buyer's financial condition or for other financial
reasons and occurs within one (1) month of Closing) and the remedies of Lessor
thereunder are pursued, then Buyer shall pay all balances, including related
costs and expenses due as a result thereof and completely indemnify, defend on
behalf of and hold harmless Seller from any and all liability and expense
resulting from said Leases. Except as set forth herein, Buyer is not assuming
any other liabilities of Seller.
1.4 PRORATION. The parties shall prorate at the Closing the current
year's ad valorem taxes on the property comprising the Assets, based on the
latest available statements from taxing authorities. Seller's pro rata share of
such taxes and vehicle license fees shall be the portion attributable to the
period through the day preceding the Closing Date, prorated by days. The
prorated amounts shall be payable in the manner set forth below:
(a) If a prorated amount is payable by Buyer, it shall be
billed by Seller when determinable and promptly paid by Buyer to
Seller.
(b) If a prorated amount is payable by Seller, it shall be
billed by Buyer when determinable and promptly paid by Seller to Buyer.
1.5 ALLOCATION. The allocation of the Purchase Price shall be agreed to
between Buyer and Seller within ninety (90) days after the Closing Date.
II. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 ORGANIZATION. Seller is a Texas corporation and has all requisite
power and authority to own and to sell the Assets and to enter into this
Agreement and to perform its obligations hereunder.
2.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT. The execution,
delivery and performance by Seller of this Agreement and the consummation of it
by the transactions contemplated hereby have been duly authorized by all
necessary action. This Agreement has been duly executed and delivered by Seller
and constitutes the valid and binding obligation of Seller, enforceable against
Seller in accordance with the terms herein. The execution, delivery and
performance of this Agreement by Seller will not
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violate, conflict with, or interfere with the rights of any third party, to
include the Shareholders.
2.3 ENCUMBRANCES ON THE ASSETS. As of the Closing Date, there are no
debts, liabilities or other such claims or encumbrances whatsoever against the
Assets.
2.4 BUSINESS OPERATIONS AND CONDITION OF ASSETS. Except as disclosed in
Seller's Disclosure Memorandum, Seller acknowledges that Buyer is purchasing the
Assets for the express purpose of using the Assets in Buyer's packaged ice
distribution and sales business. All items comprising the Assets have been
continuously used by Seller in Seller's Business.
2.5 TITLE TO PERSONAL PROPERTY. Seller has good, legal and marketable
title to all of the personal property comprising the Assets; at the Closing,
Seller shall deliver to Buyer good, legal and marketable title to the Assets
free from all liens, claims, mortgages, security interests, conditional sales
agreements, title retention program or other encumbrances of any kind by any
person whatsoever.
2.6 LITIGATION. There is no pending claim, action, suit, proceeding or
investigation (judicial, governmental or otherwise), or judgment relating to the
Assets, or the transactions contemplated by this Agreement.
2.7 COMPLIANCE WITH LAWS. Seller has complied with all laws, rules,
regulations, ordinances, orders, judgments and decrees relating to the Assets.
2.8 TAXES. All Taxes (as defined herein) that relate to the Assets and
that are payable by or accruable by Seller or as to which Seller has any
liability with respect to events occurring on or before the Closing Date have
been paid in full or have been adequately provided for by Seller. Seller shall
have the obligation of paying all Taxes that are due as a result of the
transactions contemplated by this Agreement. The term "Taxes" shall mean all
sales, use, ad valorem, value added, transfer, license, excise, occupation,
premium, property, environmental or other governmental fee, assessment or charge
of any kind whatsoever, together with any interest, penalty, addition to tax or
additional amount imposed by any governmental authority that relate to the
Assets.
2.9 ENVIRONMENTAL. As it relates to the Assets, to the knowledge of
Seller, Seller has complied in all material respects with all environmental laws
which have jurisdiction over the Assets and the Real Property subject to the
Lease. To the knowledge of Seller, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against Seller for failure to comply with any environmental law.
2.10 COMPLETE AND ACCURATE DISCLOSURE. No representation or warranty
made to Buyer in this Agreement or in connection with this transaction contains
or will contain an untrue statement of a material fact, or omits or will omit to
state a material fact
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necessary to make such representation or warranty not misleading or necessary to
enable a prospective purchaser of the Assets to make a fully informed decision.
Buyer acknowledges and agrees that in the event that Seller's estimated sales
projections after Closing are not accurate it shall not constitute a violation
of this paragraph.
2.11 INSURANCE. Seller has maintained insurance through the Closing
Date with financially sound and reputable insurers unaffiliated with Seller in
such amounts and against such risks as are adequate to protect the Assets.
2.12 LEASE. Seller has maintained the Real Property subject to the
Lease in a satisfactory condition so that Buyer may utilize the Real Property in
its anticipated use as an ice storage facility.
III. COVENANTS OF SELLER
Seller hereby covenants and agrees as follows:
3.1 CARE OF THE ASSETS. To the best of its knowledge, Seller has
continuously operated the Assets for their intended purposes and has exercised
all reasonable care, made all necessary capital expenditures and has made all
necessary repairs, in Seller's sole judgment and discretion, to ensure that the
Assets are capable for being utilized for their intended purposes by Buyer.
Notwithstanding the foregoing, Buyer acknowledges the Assets are being sold AS
IS, WHERE IS, WITH ALL FAULTS AND BUYER ACKNOWLEDGES THAT NO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE MADE BY SELLER OR ARE TO
BE IMPLIED IN THIS TRANSACTION.
3.2 FURTHER ASSURANCES. Seller will use its best efforts to implement
the provisions of this Agreement, and for such purpose, at the request of Buyer,
at or after the Closing Date, will, without further consideration, promptly
execute and deliver, or cause to be executed and delivered, to Buyer such deeds,
assignments, bills of sale, consents, landlord estoppel letter, documents
evidencing title and other instruments in addition to those required by this
Agreement, in form and substance satisfactory to Buyer, as Buyer may reasonably
deem necessary or desirable to implement any provision of this Agreement.
3.3 NONCOMPETITION AGREEMENT. At the Closing, Seller and Shareholders
will enter into noncompetition agreements in the form attached hereto as Exhibit
3.3 (the "Noncompetition Agreement").
3.4 DELIVERY OF ASSETS. Seller and Shareholders shall use all
reasonable effects to cooperate with and assist Buyer in removing any items
comprising the Assets from the Seller's or Shareholders' property, premises or
control.
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IV. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants as follows:
4.1 ORGANIZATION. Buyer is a Texas corporation and has all requisite
power and authority to purchase the Assets and to enter into this Agreement and
to perform its obligations hereunder.
4.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT. The execution,
delivery and performance by Buyer of this Agreement and the consummation of it
by the transactions contemplated hereby have been duly authorized by all
necessary action. This Agreement has been duly executed and delivered by Buyer
and constitutes the valid and binding obligation of Buyer, enforceable against
Buyer in accordance with the terms herein. The execution, delivery and
performance of this Agreement by Buyer will not violate, conflict with, or
interfere with the rights of any third party.
V. COVENANTS OF BUYER
5.1 ANCILLARY AGREEMENTS. At the Closing, Buyer will pay the Purchase
Price, enter into the ancillary document as set forth in this Agreement.
5.2 EMPLOYMENT AGREEMENT. Prior to or effective as of Closing, Buyer
shall enter into a two (2) year employment agreement with Xxxxxx Xxxxxxxx
("Xxxxxxxx"), which agreement shall, at a minimum, employ Xxxxxxxx in the
position of Office Manager at Xxxxxxxx'x current salary, which salary shall not
exceed $800.00 per week.
VI. CLOSING
6.1 TIME AND PLACE. The consummation of the sale and purchase of the
Assets and the execution of the Noncompetition Agreement (the "Closing") shall
take place at a mutually agreeable time and in a mutually agreeable manner to
include, but not limited to, the exchange of facsimile signature page
counterparts that have been signed by the appropriate parties to this Agreement.
The date of the Closing shall herein be referred to as the "Closing Date." The
effective time of this Agreement shall be as of the Close of Business on the
date hereof.
6.2 SELLER'S OBLIGATIONS AT CLOSING. At the Closing, Seller shall
execute, acknowledge (where appropriate) and deliver to Buyer in form reasonably
satisfactory to Buyer:
(a) An assignment or assignments assigning to Buyer the use
and possession of all that property which is described in Schedule 1.1
(b) Copies of all certificates of occupancy, licenses,
permits, authorizations, and approvals required by law and issued by
all governmental authorities having jurisdiction, if any, and copies of
each xxxx for current real
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estate and personal property taxes, together with proof of payment
thereof (if any of the same have been paid);
(c) Bills of Sale, assignments or other suitable transfer
documents transferring to Buyer, the Assets, free and clear of all
liens and encumbrances, in form reasonably satisfactory to counsel for
Buyer which includes the form UCC-3 or other appropriate form
indicating release of liens by any secured party;
(d) The Noncompetition Agreement;
(e) The Addendum to the Commercial Lease Agreement containing
the Landlord's consent to Buyer's assumption of the Real Property
Lease; and
(f) The assignment of the Leases from Seller to Buyer.
6.3 BUYER'S OBLIGATIONS AT CLOSING. At the Closing, Buyer will:
(a) Deliver to Seller a total of $550,000 in the form of a
check or wire transfer; and
(b) Deliver to Seller executed counterparts of the
Noncompetition Agreement, the assumption of the Leases and all other
ancillary documents required by this Agreement.
VII. CONDITIONS TO CLOSING
7.1 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
complete the transactions contemplated at the Closing shall be subject to the
satisfaction on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties True; No Material Adverse
Change. The representations and warranties of Seller contained herein
shall have been true in all material respects;
(b) No Violation of Statutes, Orders, etc. There shall not be
in effect any decree or judgment enjoining Buyer from consummating the
transactions contemplated hereby; and
(c) Addendum to Real Property Lease. Seller has delivered an
Addendum to Real Property Lease to Buyer that has been executed by the
landlord of the property subject to the Real Property Lease indicating
that the landlord consents to Buyer occupying the property subject to
the Lease and Buyer's removal of the refrigeration and ice vault assets
located on the Real Property at the termination of the Real Property
Lease.
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(d) Seller shall deliver to Buyer a Xxxx of Sale (attached
hereto as Exhibit A) executed from Blue American Ice, Inc. whereby Blue
American Ice, Inc. transfers and conveys title to 90-95 serviceable
merchandisers and 14 unserviceable merchandisers to Buyer.
7.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of Seller to
complete the transactions contemplated at the Closing shall be subject to the
satisfaction on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties True; No Material Adverse
Change. The representations and warranties of Buyer contained herein
shall have been true in all material respects; and
(b) No Violation of Statutes, Orders, etc. There shall not be
in effect any decree or judgment enjoining Seller from consummating the
transactions contemplated hereby.
VIII. INDEMNIFICATION
8.1 INDEMNIFICATION OF BUYER BY SELLER. Seller agrees to indemnify,
defend and hold harmless Buyer and Buyer's employees, agents, heirs, legal
representatives, and assigns from and against any and all claims, suits, losses,
expenses (legal, accounting, environmental, investigation and otherwise),
damages and liabilities (including, without limitation, tax liabilities),
arising out of or relating to (i) the conduct of, or conditions existing with
respect to, the Assets prior to the Closing; (ii) any inaccuracy of any
representation or warranty set forth in this Agreement; (iii) the breach of any
covenant made by Seller in or pursuant to this Agreement; or (iv) any obligation
whatsoever arising from Seller's occupancy of the Real Property on or before the
Closing Date.
8.2 INDEMNIFICATION OF SELLER BY BUYER. Buyer agrees to indemnify,
defend and hold harmless Seller from and against any and all claims arising out
Buyer's possession and operation of the Assets or occupancy of the Real Property
after the Closing Date. In addition to the indemnification provided for by
Section 1.3 herein, Buyer agrees to indemnify, defend and hold harmless Seller
and Seller's employees, agents, heirs, legal representatives and assigns from
and against any and all claims, suits, losses, expenses (legal, accounting,
environmental, investigation and otherwise), damages and liabilities (including,
without limitation, tax liabilities), arising out of or relating to (i) Buyer's
possession and operation of the Assets or occupancy of the Real Property after
the Closing Date, (ii) any inaccuracy of any representation or warranty set
forth in this Agreement, and (iii) the breach of any covenant made by Buyer in
or pursuant to this Agreement.
8.3 EFFECT OF TERMINATION. Without limiting any other rights the
parties may have, the parties specifically agree that the covenants contained in
this Article will continue to be enforceable following termination of this
Agreement.
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8.4 RIGHT TO PROCEED. Notwithstanding anything in this Agreement to the
contrary, if any condition specified in Section 7.1 or 7.2 has not been
satisfied, Seller or Buyer, in addition to any other rights which may be
available to it, shall have the right to waive any such condition that is for
its benefit and to require the other party hereto to proceed with the Closing.
IX. MISCELLANEOUS
9.1 EXPENSES. Legal, accounting and other costs and expenses incurred
in connection with this transaction shall be paid by the party incurring such
expenses.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in or made in connection with this Agreement shall survive
the Closing.
9.3 INUREMENT; ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, legal representatives and, if properly assigned, assigns. This
Agreement may not be assigned by any party without the written consent of the
other parties hereto.
9.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Schedules and
Exhibits hereto, and the related agreements referred to herein embody the entire
agreement of the parties hereto, and supersede all prior agreements and
understandings, with respect to the subject matter hereof.
9.5 SEVERABILITY. Any provision of this Agreement which is invalid,
unenforceable or illegal in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such invalidity, unenforceability or
illegality without affecting the remaining provisions hereof and without
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
9.6 INCORPORATION OF EXHIBITS AND SCHEDULES. All Exhibits and Schedules
referenced in this Agreement, and any statements contained therein or in any
certificate or instrument delivered pursuant hereto, constitute an integral part
of this Agreement and shall be deemed made in this Agreement as if set forth in
full herein.
9.7 CAPTIONS AND HEADINGS; USE OF TERM "PERSON". Captions and headings
used herein are for convenience only, do not constitute a part of this
Agreement, and shall not be considered in construing this Agreement. Unless the
context otherwise requires, all article, section or subsection cross-references
are to articles, sections and subsections within this Agreement. As used herein,
the term "person" shall mean any corporation, partnership, venture,
proprietorship, trust, benefit plan or other entity or enterprise.
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9.8 GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
9.9 NOTICE. All notices of requests, demands or other communications
required or to be given hereunder shall be delivered by hand, overnight courier,
facsimile transmission, or by United States Mail, postage prepaid, by registered
or certified mail (return receipt requested), to the addressed indicated below
and shall be deemed given when received by the addressee thereof:
to Seller: R2D2, Inc.
0000 X. Xxxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx
with a copy to: Naman, Howell, Xxxxx & Xxx, P.C.
X.X. Xxx 0000
Xxxx, Xxxxx 00000-0000
Attn: Xxxx Xxxxx, Esq.
to Buyer: Mission Party Ice, Inc.
0000 X. Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: X.X. Xxxxx III, President
with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxxxx, P.C.
or such other address or addresses as may be expressly designated by either
party by notice given in accordance with the foregoing provision.
9.10 AGENTS OR BROKERS. Seller and Buyer mutually represent and agree
with each other that no agents or brokers have been utilized in the solicitation
or negotiation of the sale of the Business and no fees, commissions or expenses
of any type shall be due or payable out of the proceeds of the purchase price by
either party to this Agreement.
9.11 COUNTERPARTS. This Agreement may be executed in counterparts, to
include counterparts transmitted by facsimile, each of which shall be deemed an
original, but all of which shall constitute the same instrument.
9.12 ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Rules of the American Arbitration
Association by a single arbitrator
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to be located in Xxxxxx, Xxxxxx County, Texas, and judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof, and shall not be appealable.
[R2D2 ASSET PURCHASE AGREEMENT
SIGNATURE PAGE FOLLOWS]
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[R2D2 ASSET PURCHASE AGREEMENT
SIGNATURE PAGE]
Executed on the date first written above.
BUYER:
MISSION PARTY ICE, INC.
By: /s/ X.X. XXXXX III
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Print Name: X.X. Xxxxx III
Print Title: President
SELLER:
R2D2, INC.
By: [ILLEGIBLE]
-------------------------------------
Print Name:
--------------------------
Print Title: President
-------------------------
SHAREHOLDERS:
/s/ XXXXX XXXXXX
----------------------------------------
XXXXX XXXXXX
/s/ XXXXXX XXXXXX
----------------------------------------
XXXXXX XXXXXX
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LIST OF SCHEDULES AND EXHIBITS
Exhibit A Xxxx of Sale
Schedule 1.1 Assets
Schedule 1.3 Assumption of Leases
Exhibit 3.3 Noncompetition Agreement
