AGREEMENT OF ASSET ACQUISITION
This Agreement of Asset Acquisition (the "Agreement") dated November
24, 1998, by and between Candy Candy Acquisition Corporation, a New York
corporation with its principal offices located at c/o Xxxxxxx Xxxxxxxxxx, 000 X.
00xx Xxxxxx. Xxx. 0X, Xxx Xxxx, XX 10021,, ("Buyer") and Jonford Corporation, a
North Carolina corporation with its principal offices located at 000 Xxxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx-Xxxxx, XX 00000 ("Seller")
RECITALS
WHEREAS, Buyer desires to acquire certain of the assets of Seller, all
as more particularly set forth herein (the "Acquisition"); and
WHEREAS, the Acquisition shall be consummated pursuant to and in
accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties agree as follows:
SECTION 1.
TRANSFER AND ACQUISITION OF CERTAIN ASSETS OF SELLER.
1.1 Acquisition of Assets. Subject to the terms and conditions of this
Agreement, Seller agrees to sell, convey, transfer, assign and deliver to Buyer,
and Buyer agrees to accept the transfer all of Seller's right, title and
interest in its assets, real, personal and mixed, tangible and intangible,
employed in the operations of Seller, including, without limitation, the
following items but excluding the items listed in Section 1.2 below
(collectively, the "Transferred Assets"):
(a) the leases (the "Leases") granting Seller a leasehold interests
relating to each of the eight retail candy stores further described in
EXHIBIT 1.1(a) hereto (the "Stores") used in connection with the retail
candy business of Seller (the "Business");
(b) all improvements and fixtures located at the Stores;
(c) all equipment, furniture and furnishings located at the Stores which
equipment furniture and fixtures is set forth in EXHIBIT 1.1(c) hereto,
including, without limitation, those taken into consideration in any
depreciation schedule of Seller;
(d) all supplies, forms, and inventory located at the Stores;
(e) any intangible assets, goodwill, and intellectual property, including
any service and/or trademark or names and logos (excluding specifically
the name "Jonford") used in connection with the Stores, including that
intellectual property set for in EXHIBIT 1.1(e) hereto;
(f) copies of all employment applications and other personnel records of
employees as selected by Buyer;
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(g) all interests in commitments, contracts, leases, and agreements
relating to the Business and the Transferred Assets, a list of which is
attached hereto as EXHIBIT 1.1(g);
(h) all files, lists, and records relating to the Business or the Stores;
(i) rights to telephone and fax numbers used by Seller at the Stores;
(j) all computers, other data processing equipment, and related software
located at the Stores; and
(k) all prepaid expenses, and miscellaneous deposits of Seller relating to
the Stores.
Seller shall convey good and marketable title to the Transferred Assets and all
parts thereof to Buyer free and clear of all liabilities, claims, assessments,
security interests, liens, restrictions and encumbrances, except as expressly
provided herein to the contrary.
1.2 Excluded Assets. The Transferred Assets shall not include and Buyer
shall not acquire from Seller the following items ("Excluded Assets"): cash and
cash equivalents or Accounts receivable.
1.3 Excluded Liabilities. Except for the leases for the Stores, Buyer
shall not be obligated to pay or assume, and none of the Transferred Assets
shall be or become liable for or subject to, any liability of Seller, including,
without limitation, the following, whether fixed or contingent, recorded or
unrecorded, known or unknown (collectively, the "Excluded Liabilities"): (i)
long, or short term indebtedness, liabilities and other obligations or
guarantees of Seller; (ii) federal, state or local tax liabilities or
liabilities of Seller relating to the operations of Seller for the period prior
to the Closing Date or resulting from the consummation of the transactions
contemplated herein, including, without limitation, any income or acquisitions,
tax, any franchise tax, and any other such tax; (iii) obligation or liability
for any and all claims by or on behalf of any employee of Seller relating to
periods prior to Closing; (iv) any liability, obligation, interest, sanctions,
or penalties arising out of or in connection with any claim or violation under
the Employee Retirement Income Security Act of 1974, as amended, and (v) any
liability or obligation arising out of or in connection with any act or omission
relating to the ownership or operations of the Business by Seller or the
Transferred Assets which occurred prior to Closing, including, but not limited
to any breach by Seller at any time of any contract or commitment, trade
payables relating to Transferred Assets or otherwise, or obligations under any
of the leases for any of the Stores to the extent accruing prior to December 1,
1998.
1.4 Transfer Price.
(a) The total transfer price (including interest) payable by Buyer to
Seller for the Transferred Assets ("Transfer Price"), shall be
Five Hundred and Forty-Nine Thousand Dollars ($549,000) payable as
follows: (i) $225,000 payable in cash at closing and (ii) 12
quarterly payments of principal and interest equal to $27,000 each
payable on the last day of each three month period commencing
February 28, 1999, which shall be evidenced by a promissory note
in the form of EXHIBIT 1.4(a) (the
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"Note"). The Note will provide that it is secured by a security
interest in Transferred Assets as provided in the language
relating thereto in Exhibit 1.4(a)
(b) In addition to the purchase price, on or before the "Closing Date"
as provided below, Buyer will pay Seller for that portion of the
rent paid for the Stores for that portion of the month of November
starting from and following the "Effective Date" as provided
below. EXHIBIT 1.4(b) hereto is a calculation of the amount
payable under this ss.1.4(b) assuming that the "Effective Date" is
November 25, 1998.
(c) Notwithstanding the foregoing, if, despite Buyer's efforts as
provided in ss.5.2 below, the Landlord of any of the Stores
refuses to approve the assignment of the Lease thereof to Buyer
and if Buyer does not enter into a new lease with the Landlord
within one year following the closing, then, at Seller's option,
either (i) take the action provided in ss.5.2(a)(i)and (ii); or
(ii) Seller will enter into an agreement as described in
ss.5.2(b).. In the event that Buyer causes any store to close
during the term of its current lease, Buyer will indemnify Seller
from any expenses incurred to landlord with respect to such lease.
(d) Buyer may offset the amount payable in 1.4(a) by amounts due under
1.4(c), amounts owed Buyer under the Management Agreement provided
in ss.1.5 or other amounts owed to Buyer by Seller.
1.5 Management Agreement.
(a) Simultaneously with the execution of this Agreement, the parties
shall enter into a Management Agreement in the form annexed hereto
as EXHIBIT 1.5(a) pursuant to which Buyer shall supervise the
construction of and manage the operation of Seller's store in
Grand Central Station (the "Grand Central Store").
1.6 Instruments of Conveyance and Transfer. At the Closing, Seller
shall deliver to Buyer such bills of acquisition, endorsements, assignments, and
other good and sufficient instruments of transfer, conveyance, and assignment
satisfactory to Buyer and its counsel as shall be effective to vest in and
warrant to Buyer good and marketable title to the Transferred Assets, free and
clear of all mortgages, security agreements, pledges, charges, claims, liens,
and encumbrances except for those provided in the Security Agreement provided in
ss.1.4(b). Simultaneously with such delivery, Seller shall take all steps as may
be required to put Buyer in actual possession and operating control of the
Transferred Assets and the Business. Seller shall use its best efforts to obtain
assignments to Buyer of the leases for the Stores.
1.7. Further Assurances. Seller shall from time to time at the request
of Buyer and without further consideration, execute and deliver such instruments
of transfer, conveyance, and assignment in addition to those delivered pursuant
to ss.1.6 and take such other action as Buyer may reasonably request to more
effectively transfer, convey and assign to and vest in Buyer, and to put Buyer
in possession of, all or any portion of the Transferred Assets. In the event
that any consent is required to transfer any contracts to be assumed by Buyer
has not been received by the Closing, and Buyer waives such nonreceipt and
proceeds to Closing, Seller shall be obligated
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without further consideration to use its best efforts to secure for the Buyer
the benefits of such contracts.
SECTION 2.
CLOSING
2.1 Time and Place. Subject to the terms and conditions of this
Agreement the closing (the "Closing") shall take place at 10:00 a.m. on December
3, 1998, at the officers of Share & Blejec, P.C., 000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, XX 00000, or at such other time, date, and/or place as the
parties may mutually agree or such later date as shall be deemed to be at least
10 days following compliance with Article 6 of the New York Uniform Commercial
Code. The date on which the Closing occurs is referred to as the "Closing Date."
On a date prior to the Closing Date, (the "Effective Date") Buyer shall deliver
to Seller's attorney to hold in escrow until the Closing date the cash payment
and Note (dated the Effective Date) as well as fully executed copies of all
other documents and certificates to be provided to Seller at the Closing and
Seller will deliver to Buyer fully executed copies of those documents and
certificates to be delivered at the Closing. The parties, by mutual consent, may
designate documents or certificates which need not be delivered on or before the
Effective Date.
2.2 Actions of Seller at Closing. At Closing and unless otherwise
waived in writing by Buyer, Seller shall deliver to Buyer the following:
(a) Assignments executed by Seller assigning to Buyer the
leasehold title to each Store, and evidencing the
requests for consents to the respective landlords thereto;
(b) A General Xxxx of Acquisition and Agreement, fully executed by
Seller, conveying to Buyer good and marketable title to all
tangible and intangible assets which are a part of the
Transferred Assets, free and clear of all liabilities, claims,
liens, security interests and restrictions:
(c) Copy of resolutions duly adopted by the board of directors and
the shareholders of Seller authorizing and approving Seller's
execution, delivery and performance of this Agreement and the
transactions contemplated hereby, certified as true and of
full force as of Closing, by an appropriate officer of Seller;
(d) Certificate of a duly authorized officer of Seller certifying
that each covenant and agreement of Seller to be performed
prior to Closing pursuant to this Agreement has been performed
in all material respects;
(e) Certificate of a duly authorized officer of Seller certifying
that each representation and warranty of Seller is true and
complete as of the date of this Agreement and as of the
Closing date;
(f) Certificate of existence and good standing of Seller from the
State of North Carolina, dated the most recent practical date
prior to Closing; and
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(g) Such other instruments and documents required under this
Agreement or as Buyer reasonably deems necessary to effect the
transactions contemplated hereby and to otherwise consummate
the transactions described herein.
2.3 Actions of Buyer at Closing. At the closing and unless otherwise
waived in writing by Seller, Buyer shall deliver to Seller the following:
(a) Copy of the resolutions duly adopted by the board of
directors of Buyer, authorizing and approving Buyer's
execution, delivery and performance of this Agreement
and the transactions contemplated hereby, certified as true
and in full force as of Closing by an appropriate officer of
Buyer;
(b) Certificate of a duly authorized officer of Buyer
certifying that each covenant and agreement of Buyer to be
performed prior to Closing pursuant to this Agreement has been
performed in all material respects;
(c) Certificate of a duly authorized officer of Buyer
certifying that each representation and warranty of Buyer as
set forth herein is true and complete as of the date of the
Agreement and as of the Closing Date;
(d) The Note.
(e) Certificate of Good Standing of Buyer from the State of
New York.
2.4 Effective Date. From the Effective Date, through the Closing, Buyer
may manage the Stores for the Buyer's own benefit, provided that Buyer shall be
responsible for any risk of loss to any Store during such interim (provided that
any insurance proceeds relating to any such loss shall be deemed to be part of
the Transferred Assets) and provided further that no casualty or any other event
shall justify the Buyer in refusing to close the transaction and release the
escrowed funds and documents upon the passage of time necessary to comply with
Article 6 of the New York Uniform Commercial Code. During such interim Seller
shall retain title to (and possession of) the Transferred Assets.
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF SELLER.
3.1 Seller's Representations and Warranties. Seller represent and
warrant to Buyer as follows:
(a) Ownership. Xxxxxx Xxxxxxxx ("Xxxxxxxx") is the legal and beneficial
owner of no less that seventy-five percent (75%) the issued and
outstanding voting securities of Seller.
(b) Leases for the Store. EXHIBIT 1.1(a) hereto contains a true and
complete list of each lease and each amendment thereto for each of
the Stores. Seller has delivered to buyer a true and complete copy
of each such lease and amendment certified to be true and complete
by the Owner. Seller has paid all rent due for all leased premises
for the month of November 1998. Attached hereto as part of EXHIBIT
1.1(a) is a
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schedule showing the actual rent paid for each of the eight Stores
for the one year period ended September 27, 1998. There are no
defaults or breaches of any of the leases or amendments thereto
listed in Exhibit 1.1(a) by either Seller or to Seller's knowledge,
by any Landlord, nor any circumstance which with the giving of
notice or the passage of time, or both, would constitute a default
or breach of any such lease or result in the termination, of,
result in the acceleration of performance of any of such leases.
(c) Employees Attached as EXHIBIT 3.1(c) is a schedule listing the
names and compensation of each employee of Seller involved in the
direct operation of any Store (but not including any accounting or
management personnel used to oversee the operations of the Stores
in general). All of Seller's employees listed in Exhibit 3.1(c) are
employed at will. Seller has no pension, health or other employee
benefit plan in effect other than as described and identified in
Exhibit 3.1(c) nor are any of such employees entitled to any
accrued vacation pay or any other fringe benefits except as
described in Exhibit 3.1(c).
(d) Transferred Assets. The Transferred Assets are all the assets of
Seller used or reasonably needed to operate the eight Stores
comprising the transferred Business. All of the Transferred Assets
are owned by Seller, free and clear of all liens and encumbrances,
except for (i) potential claims with respect to the trademarks
included as part of the Transferred Assets as described in EXHIBIT
1.1(e) and except for (ii) the existing Security Agreement and
uniform commercial code financing statement granted by Seller to
Atlantic Venture Company, Inc. a Virginia corporation ("Atlantic
Venture"). Atlantic Venture has agreed to enter into a Security
Subordination Agreement in the form of EXHIBIT 3.1(d) (the
"Security Subordination Agreement") whereby Atlantic consents to
the transaction provided in this Agreement and agrees that its
security interest in the Transferred Assets will be subordinate to
Buyer's title therein, provided that such security interest shall
remain in effect to the extent that Seller has rights in such
Transferred Assets pursuant to the terms of Security Agreement
provided inss.1.4(b) Therefore, taking the Security Subordination
Agreement into effect, when the transfer of the Transferred Assets
to Buyer at the Closing will vest complete and unencumbered title
in the Transferred Assets to Buyer, subject only to the Security
Agreement provided in ss.1.4(b).
(e) Organization and Good Standing. Seller is duly qualified as a North
Carolina corporation and is in good standing in any jurisdiction in
which the conduct of its business or the ownership of its assets
requires such qualification except where such non-qualification has
not had a material adverse effect on Seller.
(f) Subsidiaries. Seller has no subsidiaries.
(g) Authorization; Validity. The execution, delivery, and performance
of this Agreement by Seller has been duly and validly authorized by
all requisite corporate action. This Agreement has been duly and
validly executed and delivered by Seller, and is the legal, valid,
and binding obligation of Seller, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency, moratorium,
reorganization, and
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other laws of general application affecting the enforcement of
creditor's rights and by the availability of equitable remedies.
(h) Consents, etc. Other than as set forth on EXHIBIT 3.1.(h), no
approval, consent, waiver, or authorization of or filing or
registration with any governmental authority or third party is
required for the execution, delivery, or performance by Seller of
the transactions contemplated by this Agreement.
(i) Violations. The execution, delivery, or performance of this
Agreement does not and will not (i) with or without the giving of
notice or the passage of time, or both, constitute a default,
result in a breach of, result in the termination, of, result in the
acceleration of performance of, require any consent, approval, or
waiver (other than those identified on EXHIBIT 3.1(i)), or result
in the imposition of any lien or other encumbrance upon any
property or assets of Seller, under any agreement, lease, or other
instrument to which Seller is a party or by which any of the
property or assets of Seller is bound; (ii) violate any permit
license, or approval required by Seller to own the Transferred
Assets and operate the Business; (iii) violate any law, statute, or
regulation or any judgment, order, ruling, or other decision of any
governmental authority, court, or arbitrator; or (iv) violate any
provision of Seller's Articles of Incorporation or Bylaws.
(j) Bulk Sales Information. Attached hereto as Exhibit 3.1(j) is a list
of existing creditors, providing all of the information and in
compliance with the provisions of ss.6-104 of the New York Uniform
Commercial Code. Buyer shall be entitled to send the notice
provided in ss.6-107 to all such creditors and Seller will
cooperate with his Buyer doing so.
3.2 Survival of Representations and Warranties. Each of the
representations and warranties in Section 3 shall be deemed renewed and made
again by Seller at the Closing as if made as at that time, and shall survive the
Closing until the expiration of all applicable statute of limitation periods.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF BUYER.
4.1 Buyer's Representations and Warranties. As of the date hereof and
as of the Closing Date, Buyer represents and warrants to Seller the following:
(a) Corporate Capacity. Buyer is a for-profit corporation duly
organized and validly existing in good standing under the laws of
the State of New York. Buyer has the requisite power and authority
to enter into this Agreement, perform its obligations hereunder and
to conduct its business as now being conducted.
(b) Corporate Powers; Consents; Absence of Conflicts With Other
Agreements, Etc. The execution, delivery and performance of this
Agreement by Buyer and all other agreements referenced herein or
ancillary hereto to which Buyer is to be a party: (i) are within
Buyer's authority and powers, are not in contravention of law or of
the
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terms of Buyer's Certificate of Incorporation, By-laws or any
amendments thereto and have been duly authorized by all appropriate
corporate action; (ii) do not require any approval or consent of,
or filing with, any governmental agency or authority bearing on the
validity of this Agreement which is required by law or the
regulations of any such agency or authority; (iii) will neither
conflict with nor result in any material breach or contravention
of, or the creation of any lien under, any indenture, agreement,
lease, instrument or understanding to which Buyer is a party or by
which Buyer is bound; (iv) will not violate any statute, law, rule
or regulation of any governmental authority to which Buyer may be
subject; and (v) will not violate any judgment, order or decree of
any court or governmental authority to which Buyer may be subject.
(c) Binding Agreement. This Agreement and all other agreements to which
Buyer will become a party hereunder are and will constitute the
valid and legally binding obligations of Buyer and are and will be
enforceable against Buyer in accordance with the respective terms
hereof and thereof, except as enforceability against Buyer may be
restricted, limited or delayed by applicable bankruptcy or other
laws affecting creditors' rights generally and except as
enforceability may be subject to general principles of equity.
(d) Full Disclosure. The representations and warranties of Buyer herein
do not and will not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
made and to be made not misleading.
(e) Note. The Note is duly authorized and validly issued and represents
a binding obligation of Buyer enforceable in accordance with its
terms.
4.2 Survival of Representations and Warranties. Each of the
representations and warranties in Section 4 shall be deemed renewed and made
again by Buyer at the Closing as if made as at that time, and shall survive the
Closing until the expiration of all applicable statute of limitation periods.
SECTION 5
COVENANTS OF THE PARTIES.
5.1 By Seller Prior to the Closing Except as may otherwise be consented
to or approved in writing by Buyer, Seller agrees that from the date of this
Agreement and until the Closing:
(a) Conduct Pending Closing. (i) The Business shall be conducted only
in the ordinary course consistent with past practices; (ii) Seller
shall not declare any dividends, enter into any mergers, and shall
not engage in any borrowing, or hiring of new personnel.
(b) Access to Records. Seller shall provide Buyer and its
representatives access to all records of Seller that they may
reasonably request and provide access to the properties of Seller.
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(c) Solicitation. Seller agrees that it will not solicit, consider, or
negotiate any offers to acquire the shares or assets of Seller, or
to provide any information or to make available any management
personnel to third parties for such purposes.
(d) Enforcement of Agreements. For a period of twelve (12) months
following the Closing Date, Seller shall, upon Buyer's request,
cooperate with Buyer to provide for Buyer the benefits under any
contract or agreement, including any agreement with employees,
including, without limitation, enforcement of any and all rights
against the other party or parties.
(e) Employee Payments; Terminations and Rehirings. Seller shall pay all
employee compensation, benefits, vacations, sick time, and all
other payments due to its employees for the period up to and
including the Closing Date. Buyer shall, prior to or at the Closing
Date, notify Seller of which of the employees listed on Exhibit
3.1(c) Buyer wishes to employ. Seller shall, effective at Closing
terminate all such employees so that they may accept employment by
Buyer.
5.2 After Closing Regarding Assignment of Leases After the Closing,
Buyer will use reasonable efforts to obtain the consent by each landlord thereof
to the assignment of the leases provided in ss.1.1(a) above, provided that Buyer
may (but shall not be required to) instead enter into a new lease with the
Landlord. If the Landlord refuses such assignment and Buyer does not negotiate
and enter a new lease for any Store, then: at Seller's option, either
(a)(i) the purchase price provided in ss.1.4(a) shall be adjusted as
provided in EXHIBIT 5.2(a) above; and (ii) Buyer shall transfer back to
Seller all of the Transferred Assets relating to such Store, including,
but not limited to inventory similar in value to that in the Store in
question as indicated on EXHIBT 5.2; or
(b) Seller will enter into any agreement providing for Buyer to manage
the Stores on Seller's behalf, but under economic terms whereby Buyer
will obtain the same economic benefit, and have the same economic risks
(including, but not limited to Buyer, paying rent and other store
expenses), as if it owned the store in question.
5.3 After Closing Indemnification. Seller will indemnify Buyer or
Buyers successor in interest from any claim from any creditor of Seller relating
to Buyer purchasing the Transferred Assets, except for a claim from a landlord
under any lease for the Stores relating to the period after the effective date
of the Closing.
SECTION 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER.
6.1 Conditions Precedent. Unless, at the Closing, each of the following
conditions is either satisfied or waived by Buyer in writing, Buyer shall not be
obligated to effect the transactions contemplated by this Agreement:
(a) Representations and Warranties. The representations and warranties of
Seller in this Agreement are true and correct at the date of this
Agreement and shall be true and correct as of the Closing as if each
were made again at that time.
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(b) Performance of Covenants. Seller shall have performed and complied in
all respects with the covenants and agreements required by this
Agreement.
(c) Items to be Delivered at Closing. Seller shall tendered for delivery to
Buyer the following:
(i) Consents, etc. Consents for each item listed on Schedule 3.1(h).
(h) Good Standing Certificate. A good standing certificate from Seller in
North Carolina.
(i) Corporate Action. A certified copy of the corporate action of Seller
authorizing and approving this
Agreement and the transactions contemplated by it.
(j) Transfer Documents. Deeds, bills of acquisition, assignments, consents
to assignments, and other instruments of transfer and consent necessary
to transfer to Buyer good and marketable title in and to all of the
Transferred Assets, free and clear of all liens, except as set forth in
this Agreement.
(i) Management Agreement Seller shall have executed and delivered
the Management Agreement in substantially the form provided in
Exhibit 1.5.
(ii) Security Subordination Agreement. Atlantic, and Seller shall
have executed the Security Subordination Agreement in the form
provided in 3.1(d); and
(iii) Xxxxxxxx Certificate. Xxxxxxxx shall have entered into a
certificate satisfactory to counsel for Buyer, certifying that
the representations and warranties of Seller are true and
correct.
(k) Proceedings and Instruments Satisfactory. All proceedings, corporate or
other, to be taken in connection with the transactions contemplated by
this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to Buyer and Buyer's counsel, whose
approval shall not be unreasonably withheld.
(l) Certificate. There shall be delivered to Buyer an officer's
certificate, signed by Seller, to the effect that all of the
representations and warranties of Seller set forth in this Agreement
are true and complete in all material respects as of the Closing Date,
and that Seller has complied in all material respects with its
covenants and agreements required to be complied with by the Closing.
SECTION 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.
7.1 Conditions Precedent. Unless, at the Closing, each of the following
conditions is either satisfied or waived by Seller in writing, Seller shall not
be obligated to effect the transactions contemplated by this Agreement.
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(a) Representations and Warranties. The representations and warranties of
Buyer in this Agreement are true and correct at the date of this
Agreement and as of the Closing as if each were make again at that
time.
(b) Performance of Covenants. Buyer shall have performed and complied in
all respects with the covenants and agreements required by this
Agreement.
(c) Items to be Delivered at Closing. Buyer shall have tendered for
delivery to Seller the following:
(i) Good Standing Certificate. A Certificate of the New York
Department of State showing that Buyer is in good standing.
(ii) Corporate Action. A certified copy of the corporate action of
Buyer authorizing and approving this Agreement and the
transactions contemplated by it.
(iii) Cash Payment, Note, Security Agreement. Buyer shall have
delivered the payment and the executed Note provided in ss.
1.4(a) and the an executed copy of the Security Agreement
provided in ss.1.1(b) along with such signed forms UCC-1 as
Seller's counsel shall reasonably request.
(iv) Management Agreement. Buyer shall have executed and delivered
the Management Agreement in substantially the form provided in
Exhibit 1.5.
(v) Security Subordination Agreement. Buyer shall have executed
and delived the Security Subordination Agreement
(d) Proceedings and Instruments Satisfactory. All proceedings, corporate or
other, to be taken in connection with the transactions contemplated by
this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to Seller and Seller's counsel,
whose approval shall not be unreasonably withheld.
(e) Certificate. There shall be delivered to Seller an officer's
certificate, signed by Buyer, to the effect that all of the
representations and warranties of Buyer set forth in this Agreement are
true and complete in all material respects as of the Closing Date, and
that Buyer has complied in all material respects with its covenants and
agreements required to be complied with by the Closing.
SECTION 8.
NOTICES.
Any notice, request, demand, or communication required or permitted to
be given to any provision of this Agreement shall be deemed to have been
delivered, given, and received for all purposes if written and (i) if delivered
personally, by facsimile, or by courier or delivery service, at the time of such
delivery or (ii) if directed by registered or certified United States mail,
postage and charges prepaid, addressed to the intended recipient, at the address
specified below, two business days after such delivery to the United States
Postal Service.
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If to Buyer at the address first provided above with a copy to:
Xxxx A Share, Esq.
000 Xxxxxxx Xxx.-Xxxxx 0000
Xxx Xxxx, XX 00000
If to Seller at the address first provided above with a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxx, PLLC
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Any party may change the address to which notices are to be mailed by giving
notice as provided herein to all other parties.
SECTION 9.
MISCELLANEOUS.
9.1 Entire Agreement. This Agreement, the Exhibits, and the Schedules,
contain all of the terms and conditions agreed upon by the parties with
reference to the subject matter and supersede any and all previous agreements,
representations, and communications between the parties, whether written or
oral. This Agreement, including its Exhibits and Schedules, may not be modified
or changed except by written instrument signed by all of the parties, or their
respective successors or assigns.
9.2 Assignment. This Agreement shall not be assigned or assignable by
Seller or Buyer without the express written consent of the other party, except
that, as provided in the Note, Seller may assign the Note and related security
interest. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective successors and assigns.
9.3 Captions. All section, schedule, and exhibit headings are inserted
for the convenience of the parties and shall not be used in any way to modify,
limit, construe, or otherwise affect this Agreement.
9.4 Counterparts; Facsimile Signatures. This Agreement may be executed
in several counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument. Facsimile
signatures shall be of the same legal effect as if signed originally.
9.5 Waiver. Each of the parties may, by written notice to the other,
(i) extend the time for the performance of any of the obligations or other
actions of the other party; (ii) waive any inaccuracies in the representations
or warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement; (iii) waive compliance with any other
covenants of the other party contained in this Agreement; or (v) waive, in whole
or in part, performance of any of the obligations of the other party. No action
taken pursuant to this Agreement, including, but not limited to, the
consummation of the Closing or any knowledge of
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or investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action, possessing such knowledge, or performing
such investigation or compliance with the representations, warranties,
covenants, and agreements contained herein. The waiver by any party of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent or similar breach.
9.6 Controlling Law. This Agreement has been entered into the State of
New York and shall be governed by and construed and enforced in accordance with
the laws of New York.
9.7 Gender. Whenever in this Agreement the context so requires,
references to the masculine shall be deemed to include the feminine and the
neuter, references to the neuter shall be deemed to include the masculine and
the feminine, and references to the plural shall be deemed to include the
singular and the singular to include the plural.
9.8 Further Assurances. Each of the parties shall use all reasonable
efforts to bring about the transactions contemplated by this Agreement as soon
as practicable, including the execution and delivery of all instruments,
assignments, and assurances, and shall take or cause to be taken such reasonable
further or other actions necessary or desirable in order to carry out the intent
and purposes of this Agreement.
9.9 Attorneys' Fees. In the event a lawsuit is brought to enforce or
interpret any part of this Agreement or the rights or obligations of any party
to this Agreement, the prevailing party shall be entitled to recover such
party's costs of suit and reasonable attorney's fees, through all appeals.
9.10 References to Agreement. The words "hereof," "herein,"
"hereunder," and other similar compounds of the word "here" shall mean and refer
to the entire Agreement and not to any particular section, article, provision,
annex, exhibit, schedule, or paragraph unless so required by the context.
9.11 Schedules and Exhibits. Schedules and Exhibits to this Agreement
(and any references to any part or parts of them) shall, in each instance,
include the Schedules or Exhibits (as the case may be) attached hereto as well
as any amendments thereto (in each such case). All such Schedules and Exhibits
shall be deemed an integral part hereof, and are incorporated herein by
reference.
9.12 Arbitration. Any dispute relating to this Agreement or the Note
shall be subject to binding arbitration in New York City, such arbitration to be
conducted by the American Arbitration Association ("AAA") pursuant to the AAA's
rules as in effect at that time All parties agree that the AAA in New York City
(and nowhere else) shall be the proper venue for all such disputes.
9.13 Severability. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant, and/or
provision. In the event that any provision of this Agreement shall finally be
determined to be unlawful, such provision shall be
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deemed severed from this Agreement, but every other provision of this Agreement
shall remain in full force and effect.
9.14 Rights in Third Parties. Except as otherwise specifically
provided, nothing expressed or implied in this Agreement is intended, or shall
be construed, to confer upon or give any person, form, or corporation, other
than the parties hereto and their assigns, any rights or remedies under or be
reason of this Agreement.
9.15 Expenses. Each party shall pay its own expenses in connection with
the negotiation and consummation of the transactions contemplated by this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Candy Candy Acquisition Corporation
a New York corporation
By: /s/ Xxxxxxx Xxxxxxxxxx
--------------------------- ------------------------------------
Witness Xxxxxxx Xxxxxxxxxx, President
Jonford Corporation
a North Carolina corporation
___________________________ By: /s/ Xxxxxx X Xxxxxxxx
-----------------------------------
Witness Xxxxxx X. Xxxxxxxx, President
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LIST OF EXHIBITS
EXHIBIT NUMBER. DESCRIPTION
1.1(a) Description of the Eight Stores, and information provided
in ss.3.1(b) (annual rental for each Store for year ended
September 27, 1998
1.1(c) Schedule of equipment furniture and fixtures located at the
Stores
1.1(e) Description of intellectual property being transferred
1.1(g) List of all commitments, contracts, leases (other than those
provided in ss.1.1(a)) and agreements relating to the Business
and the Transferred Assets.
1.4(a) Form of the Note and Security Agreement
1.4(b) Calculation of Proration of Rent Assuming November 25
Effective Date
3.1(c) List of Employees and all pension, health or other employee
benefit plans or fringe benefits
3.1(d) Form of Security Subordination Agreement
3.1(h) List of Required Consents
3.1(I) Violations
3.1(j) List of Creditors
5.2(a) Schedule of Amount of Reduction of Purchase Price if Landlord
for each Store refused to Agreement to Assignment and the
Buyer does not enter a new lease
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EXHIBIT 1.1(E)
DESCRIPTION OF INTELLECTUAL PROPERTY BEING TRANSFERRED
Included in the Transferred Assets is all right and title held by
Jonford in the Trademarks/Service Marks: "Candy Candy" and "Candico". Jonford
obtained the right to use these names in connection with the Stores at the time
of acquisition of the Stores from Specialty Retail Concepts, Inc. ("Specialty"),
Jonford believes that Specialty had filed for these trademarks with the United
States Patent Office. However Specialty is no longer in business and Jonford
believes that these filings have expired. Jonford has not received any claim
that its use of the "Candy Candy" or "Candico" trademarks violates the rights of
any third party, but given the foregoing history, cannot represent or warrant
that there might not be such a violation. The trademark "Park Avenue Sweets" is
currently being used at the -Xxxxxxxx Place, Tennessee Mall and is intended to
be used at the GCS Store. Jonford grants Buyer a non-exclusive perpetual license
to use such xxxx with respect to the Xxxxxxxx Place Store or any replacement
store located within 50 miles thereof, but retains ownership of such xxxx and
the right to use it for all purposes.
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1.1(g)
None, other than the agreements for use of cash registers in the Stores
as follows:
[LIST CASH REGISTER AGREEMENTS]
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3.1(d)
FORM OF SUBORDINATION AGREEMENT
[TO BE PROVIDED]
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3.1(h)
LIST OF REQUIRED CONSENTS
NONE
-Other than the Landlord's of the Stores with respect to the Assignment of the
Leases therefor
3.1(I)
VIOLATIONS:
NONE
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Certificate
Xxxxxx X. Xxxxxxxx, the 75% shareholder of Jonford Corporation
("Jonford"), agrees to be jointly and severably liable for any breach by Jonford
of the representations and warranties of Jonford in Section 3 of Agreement of
Asset Acquisition dated November , 1998 between Candy Candy Acquisition
Corporation and Jonford Corporation.
Dated: November , 1998 ____________________________
Xxxxxx X. Xxxxxxxx
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