Exhibit 2.1
ASSET PURCHASE AGREEMENT
AGREEMENT, dated this 4th day of February, 2004, by and between Coffee
Holding Co., Inc., a Nevada corporation ("Buyer") and Premier Roasters LLC, a
Delaware limited liability company ("Seller").
RECITALS:
This Agreement is made with reference to the following facts and
circumstances:
(a) Seller owns certain assets used in connection with its coffee
business and operations located at La Junta, Colorado and Rocky
Ford, Colorado (the "Facilities").
(b) Seller desires to sell certain of its assets to Buyer and Buyer
desires to purchase such assets from Seller, all on the terms and
conditions contained herein.
AGREEMENT:
In consideration of the foregoing recitals which are incorporated with and
are made a part of this Agreement, and in further consideration of the mutual
covenants and agreements hereinafter contained, the parties hereto agree,
subject to the terms and conditions hereinafter set forth, as follows:
1. Sale of Properties and Assets. Seller hereby sells, conveys, assigns,
transfers and delivers to Buyer, free and clear of all liens, claims and
encumbrances, the following described properties and assets (collectively the
"Assets"):
1.1 Equipment. All installed and uninstalled equipment, furniture
and fixtures owned or used by the Seller, presently located at
the Facilities, including but not limited to those assets
described on Exhibit 1.1 attached hereto, and all additions
thereto, replacements thereof, and substitutions therefore,
wherever located, relating to any of the foregoing (the
"Equipment").
1.2 Labels. All labels, both finished and unfinished, for all
coffee products currently owned by Seller (the "Labels").
1.3 Records. All customer lists, software (to the extent the
software can be assigned), sales records, purchase records and
other books and records, all sales and administrative assets
owned by Seller.
2. Excluded Assets; Liabilities.
2.1 Excluded Assets. Buyer shall not purchase any assets of Seller
other than those described in Section 1 above and shall not
purchase or assume any
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contract or agreement other than those contracts described in
Exhibit 2.1 (the "Contracts").
2.2 Liabilities. Buyer does not assume and shall not be deemed to
have assumed any liability or obligation of Seller including,
but not limited to:
2.2.1 Any liability or obligation of Seller for any taxes
(including interest and penalties thereon) imposed on or
measured by Seller's income for any period or periods
ending before or after the date hereof, including
foreign, federal, state and local income taxes, or any
liability or obligation of Seller for any withholding
taxes, Social Security taxes, unemployment taxes, excise
taxes, capital stock taxes, sales taxes, use taxes,
gross receipt taxes or other foreign, federal, state or
local taxes of any nature (including all penalties) with
respect to any time period;
2.2.2 Any liability or obligation of Seller for any accounts
payable or under any loan agreement, lease agreement or
any other contract or agreement (except as otherwise
specifically provided for herein);
2.2.3 Any liability or obligation of Seller arising out of or
resulting from any breach by Seller of any lease,
contract or other agreement to which Seller is a party,
whether or not such agreements are assumed by Buyer
hereunder;
2.2.4 Any liability or obligation of Seller arising out of or
resulting from any violation by Seller of any foreign,
federal, state or local laws or regulations including,
without limitation, environmental laws and regulations
or from the sale by Seller of any product;
2.2.5 Any liability or obligation arising out of or resulting
from any release or disposal by Seller of any Hazardous
Substances, Pollutants or Contaminants (as these terms
are defined under applicable federal and state
environmental laws);
2.2.6 Any claims, actions, suits, proceedings, arbitrations,
consent decrees, product claims or litigation relating
to, or resulting from, actions or omissions of Seller;
2.2.7 Any liabilities for defective product, product
replacements, allowances, warranties (whether express or
implied) and refunds for damaged, defective or returned
product provided by Seller;
2.2.8 Any and all workers' compensation (including, without
limitation, weekly benefits, medical rehabilitation
expenses and any other expenses or obligations) with
respect to injuries or illnesses suffered
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by any employee of Seller resulting from occurrences
prior to the Closing Date, whether known or unknown, as
of the Closing Date; or
2.2.9 Any and all liabilities or obligations for all employee
matters, severance, termination or similar obligations
of Seller or any of its predecessors or affiliates or
resulting from the consummation of the transactions
contemplated herein including, without limitation, any
liability resulting from or arising in connection with
the Union Contract (as defined in Section 8.13 below) or
resulting or in connection with any multi-employer plan
as defined in Section 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and
any liability, fines and/or penalties resulting from or
arising in connection with the Worker Adjustment and
Retraining Notification Act ("WARN Act") and all similar
state statutes.
3. Consideration Payable to Seller by Buyer. Subject to the terms and
conditions of this Agreement, and in consideration of the sale, conveyance,
assignment, transfer and delivery by Seller of the Assets pursuant to Section 1
hereof, Buyer agrees as follows:
3.1 Assumption of Contracts. Buyer does not assume or agree to
pay, perform and discharge any of the obligations of Seller
accruing before or on the Closing Date with respect to the
Contracts.
3.2 Purchase Price for the Assets. The purchase price for the
Assets described in Section 1 (the "Purchase Price") shall be
an amount equal to $825,000.
3.3 Payment of Purchase Price. At Closing, Buyer shall pay, in
immediately available funds, an aggregate cash payment of
$820,000 (the "Payment"), which shall be allocated among, and
paid directly to, the parties shown on the payment schedule
attached hereto as Exhibit 3.3.1 (the "Payment Schedule") in
the respective amounts shown on the Payment Schedule. The
remaining $5,000 (the "Escrow Amount") shall be held in escrow
with an escrow agent designated by Buyer (the "Escrow Agent")
pursuant to an Escrow Agreement in the form attached hereto as
Exhibit 3.3.2 (the "Escrow Agreement") to satisfy any
indemnity or other claims by Buyer against Seller, provided
that any portion of the Escrow Amount which remains in escrow
after sixty (60) days after the Closing Date and against which
no claims have been made shall be released to the party shown
as "Escrow Amount Beneficiary" on the Payment Schedule.
3.4 Allocation of Purchase Price. The parties hereto agree that
the Purchase Price shall be allocated to the Assets in
accordance with Exhibit 3.4 hereto. The parties hereto
acknowledge that such allocation represents the fair market
value of the Assets and shall be binding upon the parties
hereto for
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federal and state tax purposes. Each party covenants to report
gain or loss or cost basis, as the case may be, in a manner
consistent with Exhibit 3.4 for federal and state tax
purposes. As soon as practicable after Closing, the parties
shall exchange mutually acceptable and completed IRS Forms
8594 which they shall use to report the transaction
contemplated under this Agreement to the Internal Revenue
Service in accordance with such allocation.
4. Closing. Subject to the terms and conditions contained in this
Agreement, the transfer of the Assets by Seller to Buyer (the "Closing") will
take place simultaneously with the execution of this Agreement at the offices of
Xxxxxxx Xxxxxxxx & Xxxx LLP, 00 XxXxxxxx Xxxxxx, Xxxxxx, XX 00000, or some other
time and place as the parties may mutually agree. The actual date on which the
Closing occurs is herein referred to as the "Closing Date".
4.1 Buyer's Obligations at Closing. At the Closing, Buyer shall:
4.1.1 Payment. Pay to Seller, in immediately available funds,
the Payment.
4.1.2 Buyer Deliveries. Deliver, or cause to be delivered, to
Seller a certificate of a senior executive officer of
Buyer, dated as of the Closing Date, certifying that:
(i) each of the representations and warranties of Buyer
contained in this Agreement is true and correct in all
material respects (if not subject to a materiality
qualifier) or in all respects (if subject to a
materiality qualifier) as of the Closing Date (except to
the extent such representations and warranties
specifically relate to an earlier date, in which case
such representations and warranties will be true and
correct as of such earlier date); and (ii) Buyer has
performed or complied in all material respects with all
agreements and covenants required by this Agreement to
be performed or complied with by it on or prior to the
Closing Date (the "Buyer Closing Deliveries").
4.2 Seller's Obligations at Closing. At the Closing, Seller shall
deliver or cause to be delivered, to Buyer the following (the
"Seller Closing Deliveries"):
4.2.1 Instruments of Conveyance. Such assignments, bills of
sale, endorsements, notices, consents, assurances and
such other instruments of conveyance and transfer as
counsel for Buyer shall reasonably request and as shall
be effective to vest in Buyer good and marketable title
to all of the Assets. Simultaneously with such delivery,
Seller shall take all such steps as may be necessary to
grant Buyer full access to the Facilities and to put
Buyer in actual possession and control of the Assets.
Seller further agrees that it will at any time, and from
time to time after the Closing Date, upon
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the reasonable request of Buyer and without additional
consideration, do, execute, acknowledge and deliver, or
will cause to be done, executed, acknowledged and
delivered, all such further acts, assignments,
transfers, conveyances, powers of attorney and
assurances as may be required in conformity with this
Agreement for the better assigning, transferring,
granting, conveying, assuring and confirming to Buyer or
to its successors and assigns, or for aiding and
assisting in collecting and reducing to possession, any
or all of the Assets or other properties sold, conveyed,
assigned, transferred and delivered at the Closing to
Buyer as provided herein.
4.2.2 Releases. Releases or other appropriate evidence of
termination reasonably acceptable to Buyer, effective as
of the Closing, of the secured debt (including related
security agreements, guaranties and other related
documents), and all other claims of controlling members,
directors and officers. A list of all such required
releases is attached as Section 4.2.2 of Seller's
Disclosure Schedule (the Secured Debt").
4.2.3 Payment of Employees. Evidence that Seller has paid all
amounts due to its employees at Seller's La Junta,
Colorado Facility (the "La Junta Employees") through and
including the Closing Date.
4.2.4 Non-Competition Agreement. Copy of the non-competition
agreement with Seller and Xxxxxx Paper, CEO of Seller,
to be effective as of the Closing Date in the form set
forth as Exhibit 5.4.
4.2.5 Opinion of Counsel. An opinion of counsel to the Seller
substantially in the form attached hereto as Exhibit
4.2.5.
4.2.6 Certificates of Good Standing. Certificates dated as of
a day as close as practicable to the Closing Date from
appropriate Governmental Entities as to the good
standing or corporate existence, as applicable, of the
Seller.
4.2.7 Officer's Certificate. Certificate of a senior executive
officer of Seller, dated as of the Closing Date,
certifying that: (i) each of the representations and
warranties of Seller contained in this Agreement is true
and correct in all material respects (if not subject to
a materiality qualifier) or in all respects (if subject
to a materiality qualifier) as of the Closing Date
(except to the extent such representations and
warranties specifically relate to an earlier date, in
which case such representations and warranties will be
true and correct as of such earlier date); (ii) Seller
has performed or complied in all material respects with
all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior
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to the Closing Date; and (iii) there has not been any
change, occurrence or circumstance in the Assets, having
or that would have a material adverse effect on the
Assets.
4.2.8 Secretary's Certificate. Certificate, including
attachments, dated as of the Closing Date, signed by the
Secretary of Seller, relating to Seller's Certificate of
Formation and Operating Agreement, resolutions of the
Board of Directors of Seller unanimously authorizing the
transactions contemplated by this Agreement, and
incumbency.
4.2.9 Other Documents. Such other documents as Buyer and its
counsel shall reasonably request.
5. Employee Matters. Seller shall terminate as of the Closing Date all of
the La Junta Employees. Buyer may extend offers of employment to the La Junta
Employees as Buyer may choose upon terms and conditions acceptable to Buyer. In
addition, the parties agree as follows:
5.1 Severance. Seller shall be responsible for any severance or
similar obligations payable to any employee or former employee
of Seller resulting from events occurring on or prior to the
Closing Date, or resulting from the transactions contemplated
herein including, without limitation, obligations under the
WARN Act and comparable state statutes.
5.2 Seller Employees. Buyer shall have no obligation or liability
with respect to any employee or former employee or
compensation due to any employee or former employee of Seller
and Seller shall be responsible for any and all liabilities
and obligations with respect to any employee or former
employee of Seller.
5.3 Offers of Employment. No employee of Seller is precluded by
agreement from accepting an offer of employment with Buyer.
5.4 Employment Restrictions. Buyer shall enter into and execute a
non-competition agreement with Seller and Xxxxxx Paper, CEO of
Seller, to be effective as of the Closing Date in the form set
forth as Exhibit 5.4.
6. Representations, Warranties and Covenants of Seller. Seller hereby
represents, warrants, and covenants to and with Buyer as follows, subject in all
cases to exceptions and qualifications set forth in Seller's Disclosure
Schedule:
6.1 Organization, Good Standing and Corporate Power. Seller is a
limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware and
has the corporate power to own, operate and lease its
properties and carry on its business as now being conducted.
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6.2 Corporate Authorization; Binding Effect. The execution,
delivery and performance of this Agreement by Seller and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action
on the part of Seller and this Agreement constitutes the
legal, valid and binding obligation of Seller, and enforceable
against Seller in accordance with its terms.
6.3 No Authorization Required. No consent, approval, authorization
or order of, or qualification with, any court, regulatory
authority or other governmental body or any third party is
required for the consummation by Seller of the transactions
contemplated by this Agreement.
6.4 Effect of Agreement. Except as discussed on Section 6.4 of
Seller's Disclosure Schedule, the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby do not, with or without the
giving of notice or the lapse of time or both, (a) violate any
provision of law, statute, rule or regulation to which Seller
is subject; (b) violate any judgment, order, writ or decree of
any court applicable to Seller; or (c) result in the breach
of, or conflict with, any term, covenant, condition or
provision of, result in the modification or termination of,
constitute a default under, or result in the creation or
imposition of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Seller,
pursuant to any corporate charter, by-law, commitment,
contract or other agreement or instrument to which Seller is a
party or by which Seller or any of its assets or property is
or may be bound or affected or from which Seller derives
substantial benefits.
6.5 Financial Statements. Seller has heretofore delivered to Buyer
copies of Seller's balance sheets for the fiscal years ended
December 31, 2001 and 2002, and the related statements of
income for the years then ended. Seller has also delivered to
Buyer copies of its balance sheets and related statements of
income for the year to date period ended November 29, 2003.
All such financial statements are collectively referred to as
the "Financial Statements". The Financial Statements present
fairly the financial position and results of operations of
Seller as of the years and periods then ended, in conformity
with generally accepted accounting principles applied on a
basis consistent with prior years and periods. The Financial
Statements do not contain any material items of special or
nonrecurring income or any other income not earned in the
ordinary course of business. Seller has not used any improper
accounting practice for the purpose of not reflecting or
incorrectly reflecting in the financial statements or books
and records of Seller any properties, assets, liabilities,
revenues or expenses, and all books and records of Seller have
been maintained and prepared in conformity with generally
accepted accounting principles, consistently followed.
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6.6 Absence of Undisclosed Liabilities. Seller does not, as of the
date hereof, have any material (individually or in the
aggregate) liabilities (secured or unsecured and whether
accrued, absolute, direct, indirect, contingent or otherwise),
except as disclosed on Section 6.6 of Seller's Disclosure
Schedule.
6.7 Title to Assets, Absence of Liens, Condition of Assets. Seller
has good and marketable title to all of the Assets, and,
except as disclosed on Section 6.7 of Seller's Disclosure
Schedule, the Assets are free and clear of all pledges, liens,
defects, leases, licenses, equities, conditional sales
contracts, charges, claims, encumbrances or security interests
(collectively, the "Liens"), other than Liens that will be
released upon the Closing, and the instruments of conveyance,
and other endorsements and instruments of transfer and
assignment contemplated by this Agreement are sufficient to
transfer good and marketable title to the Assets to Buyer,
free and clear of all Liens. The Assets are in good and usable
condition, ordinary wear and tear excepted, are in good repair
and have been maintained in accordance with good business and
maintenance practice.
6.8 Leased Personal Property. Listed in Section 6.8 of Seller's
Disclosure Schedule attached hereto and incorporated herein
are all assets leased by Seller at its La Junta, Colorado
facility. Except as disclosed in Section 6.8 of Seller's
Disclosure Schedule, each item of such personal property is
presently in such condition that upon the return of such
property to its owner or lessor in its present condition at
the end of the relevant lease term or as otherwise
contemplated by the applicable agreement between and the owner
or lessor thereof, Seller's obligations to such owner or
lessor will be discharged.
6.9 List of Contracts and Other Data. Section 6.9 of Seller's
Disclosure Schedule sets forth, as of the date of this
Agreement, a listing of the following, true and correct copies
of which have been furnished to Buyer:
6.9.1 All existing contracts and commitments, whether written
or oral, to which Seller is a party, or to which it or
any of its assets or properties are subject or bound;
and
6.9.2 A true, correct and complete list of the names and
current annual compensation (including wages, salaries,
bonuses and benefits under pension, profit sharing,
deferred compensation and similar plans or programs) of
all of Seller's employees and information concerning
years of service and seniority.
6.10 Compliance With Agreements. Neither Seller nor any other
person, firm, corporation or entity is in breach of, or in
default under, any agreement, contract or commitment described
in Section 6.10 of Seller's Disclosure
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Schedule. No state of facts exists or event has occurred, is
pending or, to the knowledge of Seller, is threatened or
contemplated, which, after the giving of notice, the lapse of
time or otherwise, could constitute or result in a breach or a
default by Seller or any other person, firm, corporation or
entity, of any such agreement or commitment. All such
contracts and agreements are, and after consummation of the
transactions contemplated herein will be, legal, valid and
binding obligations of the respective parties thereto.
6.11 Litigation. Section 6.11 of Seller's Disclosure Schedule
contains a true, complete and correct list and caption of each
pending lawsuit, claim, administrative proceeding,
arbitration, labor dispute or governmental investigation or
inspection to which Seller is a party or which involve or
affect Seller's business or operations. To the knowledge of
Seller, there are no claims, legal actions or governmental
investigations threatened against Seller. Section 6.11 of
Seller's Disclosure Schedule further describes all material
(individually or in the aggregate) product liability claims
received by Seller during the past three (3) years. There is
no continuing order, judgment or decree of any federal, state
or local court, arbitrator or other tribunal or any
governmental or administrative agency or self-regulatory body
enjoining Seller from taking or requiring it to take any
action of any kind or to which Seller is subject to or by
which the Seller is or may be bound. Seller is not in default
under any order, writ, injunction or decree of any foreign,
federal, state or local court. Except as disclosed in Section
6.11 of Seller's Disclosure Schedule, Seller has no knowledge
of any state of facts or contemplated event which may give
rise to any claim, action, suit, proceeding, complaint,
investigation or inspection which could materially adversely
affect the Seller or the Assets.
6.12 Labor Matters. Seller had been party to a collective
bargaining agreement, dated __________, with
________________________ (the "Union Contract"), but such
Union Contract has been terminated and there are no
outstanding obligations under such Union Contract. On the date
hereof, except as described in Section 6.12 of Seller's
Disclosure Schedule, there are no material controversies
pending or, to the knowledge of Seller, threatened between
Seller and any of its employees, and Seller's relations with
such employees are good. No employee of Seller is represented
by a collective bargaining organization or subject to a
collective bargaining agreement and there is no pending or
threatened organizing on representational activity. Seller is
in compliance with all federal, state and local laws, rules
and regulations respecting employment and employment
practices, terms and conditions of employment and wages and
hours, and has withheld all amounts required by law or
agreement to be withheld from the wages or salaries of its
employees and is not liable for any arrears wages or any
taxes, interest or penalties for failure to comply with any of
the foregoing. Seller has paid all amounts due to its
employees through and including the Closing Date.
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6.13 Tax Matters. Except as disclosed in Section 6.14 of Seller's
Disclosure Schedule, Seller has duly filed all foreign,
federal, state, county and local tax returns required to be
filed, including those with respect to income, withholding,
Social Security, unemployment, franchise, excise, sales and
use taxes, and has paid in full all taxes, interest,
penalties, assessments or deficiencies shown to be due on such
returns and reports or claimed to be due on such tax returns
and reports. No claims for additional taxes are pending or, to
the knowledge of Seller, threatened with respect thereto for
any prior fiscal year which would affect Seller, the Assets or
the transfer thereof to Buyer.
6.14 Compliance with Laws. Seller has owned and operated, and
currently owns and operates its business and has procured,
processed, stored and sold its services, in compliance with
all federal, state and local laws, ordinances, rules and
regulations. Section 6.15 of Seller's Disclosure Schedule sets
forth for the past three (3) years all investigations,
inspections or citations under any federal, state or local
laws or regulations and the results thereof together with a
description of all corrective or other action taken with
respect thereto. Except as set forth in Section 6.15 of
Seller's Disclosure Schedule, there are no pending
governmental investigations, inspections or citations relating
to Seller's business.
6.15 Conduct of Business. Except as disclosed in Section 6.16 of
Seller's Disclosure Schedule, since November 30, 2003.
6.15.1 Seller's business has been conducted and carried on
only in the ordinary course consistent with past
practices.
6.15.2 Except for personal property purchased, sold or leased
in the ordinary course of business consistent with its
past practices, Seller has not purchased, sold,
leased, mortgaged, pledged or otherwise acquired or
disposed of any properties or assets.
6.15.3 There has been no increase or other change made in the
rate or nature of the compensation, including wages,
salaries, bonuses and benefits under employee benefit
plans which has been paid, or will be paid or payable,
by Seller to any officer or employee of Seller, other
than ordinary and routine increases or changes
consistent with past practice.
16.15.4 Seller has not sustained or incurred any loss or
damage (whether or not insured against) on account of
fire, flood, earthquake, accident or other calamity
which has interfered or affected, or may interfere
with or affect, the Assets.
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6.16 Disclosure and Reliance. Seller has disclosed to Buyer all
facts material to the transactions contemplated in this
Agreement. None of the information, documents, certificates or
instruments furnished or to be furnished by Seller or any of
its representatives to Buyer or any of its representatives in
connection with this Agreement or otherwise in connection with
the transactions contemplated thereby or hereby are false or
misleading in any material respect or contain any material
misstatement of fact or omit to state any material facts
required to be stated to make the statements therein not
misleading. The representations and warranties made herein are
made by Seller with the knowledge and expectation that Buyer
is placing reliance thereon. To the extent that any portion of
the representations and warranties made herein were made to
Seller's knowledge, Seller represent that it has made due and
reasonable inquiry with respect thereto.
7. Representations and Warranties of Buyer. Buyer represents and warrants
to and with Seller as follows:
7.1 Organization, Power. Buyer is a corporation duly organized,
existing and in good standing under the laws of the State of
Nevada, and has all requisite power and authority to own,
operate and lease its properties, and to carry on its business
as now being conducted and to enter into this Agreement and
perform its obligations hereunder.
7.2 Authority Relative to Agreement. The execution, delivery and
performance of this Agreement by Buyer and the consummation by
it of the transactions contemplated hereby, have been approved
by all necessary action on the part of Buyer and this
Agreement constitutes the legal, valid and binding obligation
of Buyer enforceable in accordance with its terms.
7.3 No Government Authorization Required. No consent, approval,
authorization or order of, or qualification with, any court,
regulatory authority or other governmental body is required
for the consummation by Buyer of the transactions contemplated
by this Agreement.
8. Closing Conditions
8.1 Conditions to Obligations of Each Party Under This Agreement.
The respective obligations of each party to effect the sale of
the Assets and the other transactions contemplated hereby will
be subject to the satisfaction on or prior to the Closing Date
of the following conditions, any or all of which may be waived
in writing by the parties hereto, in whole or in part, to the
extent permitted by applicable law:
8.1.1 The transactions contemplated by the Agreement have been
approved by the members of the Seller.
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8.1.2 No Governmental Entity or federal or state court of
competent jurisdiction has enacted, issued, promulgated,
enforced or entered any order, judgment, injunction or
decree (whether temporary, preliminary or permanent) or
any other judicial, administrative or legislative action
or proceeding ("Order") which is in effect and which has
the effect of making the sale of the Assets illegal or
otherwise prohibiting consummation of the sale of the
Assets. No statute, rule or regulation has been enacted,
entered, promulgated, interpreted, applied or enforced
by any Governmental Entity which prohibits or makes
illegal consummation of the sale of the Assets or any
other transaction contemplated by this Agreement.
Neither Seller nor any other party has filed a petition
for relief relating to Seller or its assets with any
United States Bankruptcy Court (the "Bankruptcy Court").
8.2 Additional Conditions to Obligations of Buyer. The obligations
of Buyer and to effect the sale of the Assets and the other
transactions contemplated hereby are also subject to the
satisfaction at or prior to the Closing Date of the following
conditions, any or all of which may be waived in writing by
Buyer, in whole or in part:
8.2.1 Each of the representations and warranties of Seller
contained in this Agreement are true and correct in all
material respects (if not subject to a materiality
qualifier) or in all respects (if subject to a
materiality qualifier) as of the Closing Date as though
made on and as of the Closing Date (except to the extent
such representations and warranties specifically relate
to an earlier date, in which case such representations
and warranties will be true and correct in all material
respects (if not subject to a materiality qualifier) or
in all respects (if subject to a materiality qualifier)
as of such earlier date).
8.2.2 Seller shall have performed or complied in all material
respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on
or prior to the Closing Date.
8.2.3 There will have been no change, occurrence or
circumstance in the Assets, having or that would have a
material adverse effect on the Assets.
8.2.4 Seller shall have delivered, or caused to be delivered,
to Buyer all of the Seller Closing Deliveries.
8.2.5 There is as of the Closing Date no pending or threatened
material litigation, claims or judgment against the
Seller that have not been disclosed to Buyer on the
disclosure schedules hereto, or other
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litigation or claims against the Seller relating to the
sale of the Assets and no judicial liens at the time of
Closing.
8.2.6 Buyer shall have entered into a lease of the La Junta,
Colorado facility with the landlord on terms acceptable
to Buyer.
8.2.7 Buyer shall have entered into a licensing agreement with
Del Monte which shall permit Buyer to use the S&W coffee
trademark on terms acceptable to Buyer.
8.4 Additional Conditions to Obligations of the Seller. The
obligations of the Seller to effect the sale of the Assets and
the other transactions contemplated hereby are also subject to
the satisfaction at or prior to the Closing Date of the
following conditions, any or all of which may be waived in
writing by the Seller, in whole or in part:
8.4.1 Each of the representations and warranties of Buyer
contained in this Agreement are true and correct in all
material respects (if not subject to a materiality
qualifier) or in all respects (if subject to a
materiality qualifier) as of the Closing Date as though
made on and as of the Closing Date (except to the extent
such representations and warranties specifically relate
to an earlier date, in which case such representations
and warranties will be true and correct in all material
respects (if not subject to a materiality qualifier) or
in all respects (if subject to a materiality qualifier)
as of such earlier date);
8.4.2 Buyer shall have performed or complied in all material
respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on
or prior to the Closing Date.
8.4.3 Buyer shall have delivered, or caused to be delivered,
to Seller all of the Buyer Closing Deliveries.
8.4.4 Seller shall have obtained all releases or other
appropriate evidence of termination reasonably
acceptable to Seller, effective as of the Closing, of
the Secured Debt.
9. Indemnification of Buyer by Seller.
9.1 Indemnity. Seller shall, and hereby agrees to, indemnify and
hold Buyer harmless against and in respect of:
9.1.1 All debts, liabilities and obligations of Seller of any
nature, whether accrued, absolute, contingent, or known
or unknown on the date hereof, existing or arising on or
resulting from events
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which occurred or failed to occur on or before the date
hereof, to the extent not specifically assumed by Buyer
hereunder;
9.1.2 Any claim, action, loss, damage or cost relating to or
arising by reason of the presence of, or any
governmental or third party requirements relating to the
disposal or arranging for disposal (on-site or
off-site), or the release or threatened release prior to
the date hereof, of any Hazardous Substances, Pollutants
or Contaminants in, on, to, under, upon or from any of
the property comprising the Facilities, or any claim,
action, loss, damage or cost relating to or arising by
reason of any violation or operation of any applicable
federal, state or local statute or regulation pertaining
to the protection of the environment or the regulation,
control, release or remediation of Hazardous Substances,
Pollutants or Contaminants which occurs prior to the
date hereof in, on, under, upon or from any of the
property comprising the Facilities, or any part thereof,
or which otherwise apply to the activities at the
Facilities;
9.1.3 Any liability, loss, claim, damage or deficiency
resulting directly or indirectly from any
misrepresentation, breach of warranty or nonfulfillment
of any agreement on the part of Seller under this
Agreement, or from any misrepresentation in or omission
from any certificate or other instrument furnished or to
be furnished to Buyer hereunder;
9.1.4 Any liability, claim or obligation relating to or
arising in connection with the termination of Seller's
employees, any liability of Seller or any of its
affiliates under any collective bargaining agreement or
relating to any multi-employer plan, or in connection
with or as a result of the transactions contemplated
herein including, without limitation, any liability
under or relating to the WARN Act and/or any comparable
state statute; and
9.1.5 All other actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses incident to
the foregoing, including, without limitation, reasonable
attorneys' fees and other out-of-pocket expenses.
9.2 Notice of Claims. Buyer agrees to give Seller notice of any
and all claims asserted against Buyer for which
indemnification is or may be sought under this Section 9. Such
notice shall be given within a reasonable time after receipt
of written notice of such claim by Buyer. Failure to give such
notice shall not abrogate or diminish Seller's obligation
under this Section 9 if Seller has or receives knowledge of
the existence of any such claim by any other means or if such
failure does not prejudice Seller's ability to defend such
claim.
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9.3 Defense of Claim. In any third party litigation,
administrative proceeding, negotiation or arbitration
pertaining to any claim for which indemnification is sought
under this Section 9, Seller shall have the right to select
legal counsel to represent Buyer and to otherwise control such
litigation, proceedings, negotiations and arbitration. If
Seller elects to control such litigation, proceeding,
negotiation or arbitration, Buyer shall at all times have the
right to fully participate in the defense at its own expense.
If Seller shall, within a reasonable time after notice, fail
to defend, Buyer shall have the right, but not the obligation,
to undertake the defense of and to compromise or settle the
claim or other matter on behalf, for the account, and at the
risk of Seller. If the claim is one that cannot by its nature
be defended solely by Seller then Buyer shall make available
all information and assistance as Seller may reasonably
request, at Seller's expense. Notwithstanding the foregoing
provisions of this Section 9, should the subject matter of any
litigation, proceeding, negotiation or arbitration include a
claim seeking permanent injunctive relief, Buyer shall have
the right to take exclusive control of the defense of the
entire proceeding.
9.4 Cooperation. The parties hereto shall cooperate in connection
with the defense of third party actions giving rise to any
claim made pursuant to this Section 9 and shall use reasonable
efforts to provide available information regarding such claim
and to keep the parties hereto informed as to the status of
any such action.
9.5 Limitations.
9.5.1 Time Limitations. Seller shall not have any liability to
Buyer under Section 9.1 unless Seller shall have
received notice of a claim for indemnity pursuant to
Section 9.2 prior to the date which is sixty (60) days
from and after the Closing Date; provided, however, that
the foregoing time limitations shall not apply to any
claim for indemnity arising from or related to (i) a
breach of the representations or warranties set forth in
Section 6.1, Section 6.2 or the first sentence of
Section 6.7, (ii) any environmental matters or issues
involving or affecting Seller and/or its business or
operations including, without limitation, any claim for
indemnity pursuant to Section 9.1.2 above, and (iii)
Seller's obligation for all taxes of whatever nature
relating to or arising in connection with Seller's
business and operations (provided that such obligations
for taxes shall terminate upon the expiration of the
applicable federal and state statutes of limitation).
9.5.2 Amount Limitations. Seller shall not have any liability
to Buyer beyond the Escrow Amount with respect to any
indemnity claims under Section 9.1 or any other claims
of any nature which may be asserted by Buyer or any
third party arising in any manner from
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this Agreement, Seller's representations, warranties and
covenants hereunder or the transactions to be
consummated pursuant hereto.
9.5.3.Exclusive Remedy; No Personal Liability. The relief
provided for in this Section 9 (which is limited to the
Escrow Amount) is the sole remedy of Buyer against
Seller with respect to any claims of any nature which
may be asserted by Buyer or any third party arising in
any manner from this Agreement, Seller's
representations, warranties and covenants hereunder or
the transactions to be consummated pursuant hereto. In
no event shall Buyer shall have any recourse against the
employees, officers, directors, members, affiliates or
agents of Seller; provided that, notwithstanding the
provisions in this Agreement, nothing hereunder shall
limit Buyer's recourse against any one or more of such
employees, officers, directors, members, affiliates or
agents of Seller, under tort rather than contract law,
with respect to any fraud perpetrated against Buyer by
any such employees, officers, directors, members,
affiliates or agents of Seller.
10. Public Announcements. No public announcement or release of this
transaction of any nature shall be made by the parties except on the parties'
mutual agreement. Any such public announcement will be on terms and conditions
in form mutually acceptable to the parties. Notwithstanding the foregoing,
Seller may make such public announcements, if any, as may be required pursuant
to applicable bankruptcy laws.
11. Prorations. Seller shall remain responsible for all utility charges
and ad valorem taxes relating to operations at or assessed against the
Facilities prior to Closing.
12. Expenses. Each party hereto shall pay its own costs and expenses
incurred in connection with the negotiation and preparation of this Agreement
and the consummation of the transactions contemplated herein; provided, however,
that Buyer shall pay any sales, use and transfer taxes incurred in connection
with the transfer of the Assets.
13. Miscellaneous. The following miscellaneous provisions shall apply to
this Agreement:
13.1 Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing
and shall be sufficient in all respects if given in writing
and delivered personally, by facsimile or mailed by
Registered, Certified or Express mail, postage prepaid, as
follows:
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If to Seller:
Xxxxxx Paper, CEO
Premier Roasters LLC
00 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to (which shall not constitute notice):
Xxxxx Xxxxxxx, Esq.
Xxxxxxx Xxxxx + Xxxxxx LLP
Xxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
If to Buyer:
Xxxxxx Xxxxxx
Coffee Holding Co, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to (which shall not constitute notice):
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Wood LLP
00 Xx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
or at such other address as any party hereto shall have
designated by notice in writing to the other parties hereto.
13.2 Waivers. Any party hereto may, by written notice to the other
party hereto, (i) extend the time for performance of any of
the obligations or other actions of the other under this
Agreement, (ii) waive any inaccuracies in the representations
and warranties of the other contained in this Agreement or in
any documents delivered pursuant to this Agreement, (iii)
waive compliance with any of the conditions or covenants of
the other contained in this Agreement, or (iv) waive or modify
performance of any of the obligations of the other under this
Agreement. Except as provided in the preceding
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sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by
the party taking such action of compliance with any
representations, warranties, covenants or agreements contained
in this Agreement. The waiver by any party hereto of a breach
of any portion of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
13.3 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and
understandings, oral and written, between the parties hereto
with respect to the subject matter hereof.
13.4 Applicable Law. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in
accordance with the laws of the State of New York applicable
to contracts made and performed in New York.
13.5 Binding Effect, Benefits. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, successors and assigns; nothing in this
Agreement, express or implied, is intended to confer on any
person other than the parties hereto or their respective
heirs, successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this
Agreement.
13.6 Assignability. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable by any party hereto
without the prior written consent of the other party hereto.
13.7 Effect of Headings. The headings of the various sections and
subsections herein are inserted merely as a matter of
convenience and for reference and shall not be construed as in
any manner defining, limiting or describing the scope or
intent of the particular sections to which they refer, or as
affecting the meaning or construction of the language in the
body of such sections.
13.8 Exhibits, Disclosure Schedule. All exhibits and schedules
referred to in this Agreement are attached hereto and are
incorporated herein by reference as if fully set forth herein.
For purposes of this Agreement, any item in the Disclosure
Schedule shall be deemed disclosed only in connection with the
representations or warranties to which it is specifically
referred.
13.9 Construction. The language in all parts of this Agreement
shall in all cases be construed as a whole according to its
fair meaning, strictly neither for nor against any party
hereto, and without implying a presumption that the terms
thereof shall be more strictly construed against one party by
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reason of the rule of construction that a document is to be
construed more strictly against the person who himself or
through his agent prepared the same, it being agreed that
representatives of both parties have participated in the
preparation hereof.
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IN WITNESS WHEREOF, the parties have each executed this Agreement on the
date first above written.
PREMIER ROASTERS LLC:
A Delaware Limited Liability Company
By: /s/ Xxxxxx Paper
--------------------------------------
Xxxxxx Paper
President and Chief Executive Officer
COFFEE HOLDING CO., INC.:
A Nevada corporation
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
Secretary and Executive Vice President
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