EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "AGREEMENT") dated as of
the _____ day of November 2002, is by and amongst Xstream Beverage Group, Inc.,
a Nevada corporation (hereinafter referred to as "Buyer" or "Xstream") and, The
Florida Brewery, Inc., a Florida corporation (the "Company" or "Florida
Brewery"), Xxxxx Xxxxxx, Xx., Xxxxxx Xxxxxx and Xxxxx Xxxxxx III ( collectively
the "Shareholders").
WHEREAS, the respective Boards of Directors of Buyer and the
Company deem the acquisition by Buyer of all of the issued and outstanding
capital stock of the Company on the terms set forth in this Agreement to be
desirable, generally to the welfare and advantage of each, and in the best
interests of the shareholders of each;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants herein contained, and for the purpose of
prescribing the terms and conditions of such acquisition, the mode of carrying
it into effect, and such other details and provisions as are necessary or
desirable, the parties hereto hereby represent, warrant, covenant and agree as
follows:
ARTICLE I
PLAN OF AGREEMENT
1.01 (a) Number of Shares and other Consideration. Subject to the further
conditions of this Agreement and the truth of the representations and warranties
provided herein, the Shareholders set forth in Exhibit 1.01(a) agree to transfer
to Buyer a total of __________ shares of the common stock of Florida Brewery
(the "Shares"). Said Shares will at Closing represent 90% of the issued and
outstanding shares of common stock of Florida Brewery.
The Purchase Price for the Shares shall be $3,550,000 payable
as follows:
$2.5 million payable at closing by wire transfer to accounts
designated by the shareholders; Two promissory notes totaling $1,050,000.
The Purchase Price shall be paid to the Shareholders as set
more fully set forth on Exhibit 1.01(a).
Each of the promissory notes, copies of which are set forth on
Exhibit 1.01 (b), will be for a term of three years, payable semiannually with
the first payment due six months following the closing date of this transaction.
As security for the repayment of the Notes, Xstream shall deliver to the Law
Firm of Xxxx, Ringers, Xxxxxx & Xxxxxx (the "Escrow Agent"), a total of
_____________shares of the Buyer's common stock. The total number of shares to
be delivered to the Escrow Agent shall be equal to the total dollar amount of
each promissory note divided by the average of the bid and asked prices of
Xstream common stock for the five trading days immediately
prior to closing. The obligation of the Escrow Agent under this Agreement shall
be subject to the terms and conditions of the Escrow Agreement attached hereto
as Exhibit 1.01(C)).
(b) Adjustments to the Purchase Price:
There shall be a dollar for dollar reduction in the purchase
price in the event of either one or both of the following:
(1) If on the date of Closing, Florida Brewery has in excess
of $5 million in bank or institutional debt; or
(2) The Company's shareholders' equity as of September 30,
2002 is less than $2.15 million.
(3) Subject to the terms of paragraph 2.22, Xstream may offset
any amounts due the Seller under the Promissory Note by reducing the amount of
the promissory note on a dollar for dollar basis. Should Xstream choose to
exercise this right of set-off, the number of Shares to be held by the Escrow
Agent shall be adjusted accordingly. For purposes of an example only, if Xstream
has claims which are subject to Set-off totaling $100,000, the amount of the
note is $1,000,000 and there are 250,000 shares pledged as collateral, the
Escrow Agent will be required to return 25,000 shares calculated as follows:
x = amount of note z= no. of escrowed shares
y= amount subject to setoff a= no. of shares to be refunded
a= (y/x)z a=(100,000/1,000,000) x 250,000
a = 25,000
Notwithstanding the foregoing, the Shareholders shall have a
right to object to any claimed right of set-off under the Promissory Note prior
to any such set-off and the Shareholders shall provide within 30 days of any
such objection, documentation to support their objection.
Florida Brewery shall deliver to the Buyer at the Closing an
audited balance sheet of the Company prepared in accordance with generally
accepted accounting principles dated September 30, 2002 (the "Closing Date
Balance Sheet") and accompanied by such other documentation satisfactory to the
Buyer as to the amount of the outstanding bank or other institutional debt and
the shareholders' equity as of September 30, 2002. Any reduction in the purchase
price pursuant to section 1.01 (b)(1)(2) or (3) above shall be allocated to the
promissory notes.
1.02. Releases. Concurrently with the Closing, the Shareholders shall execute a
general release as to all promissory notes or other obligations due the
Shareholders from Florida Brewery. In consideration thereof, Xstream shall issue
at the Closing, a promissory note in the amount of $82,000 due Xxxxxx and
$200,000 due Xxxxxx. The terms and conditions of these promissory notes shall be
identical to the notes set forth in paragraph 1.01 except that the promissory
notes will not be collateralized with any Xstream common stock.
1.03 Option to Purchase Additional Shares. For so long as Xxxxx Xxxxxx III
remains a shareholder of the Company, Buyer shall have an option to purchase the
remaining shares owned by Xxxxxx III. The purchase price for the shares subject
to the option shall be the Fair Market Value at the time Buyer chooses to
exercise the option. If the parties cannot agree upon the Fair Market Value, the
matter shall be submitted to binding arbitration. The parties agree to
arbitration with the American Arbitration Association at their offices in Palm
Beach County, Florida unless agreed to the contrary by
the parties. The cost of the arbitration shall be borne equally by the parties
if the estimated fair market value is within 10% of the price submitted by
Xxxxxx III and Xstream. However, if the arbitrator determines that the fair
market value is not within 10% of the price submitted by Xxxxxx III and Xstream
but is within 10% of the value submitted by either party, then the other party
shall be liable for the entire cost of the arbitration.
1.04 Right of First Refusal. For so long as Xxxxxx III remains a shareholder of
Florida Brewery, Xstream shall have the absolute and unconditional right of
first refusal to purchase any remaining shares of common stock of Florida
Brewery owned by Xxxxxx III. Any offers received by Xxxxxx III must be in
writing and submitted to Xstream. The offer must set forth the price and terms
of any proposed purchase. Following receipt of the written term sheet, Xstream
shall have 14 days to either accept or reject the proposed offer. If the offer
is accepted, closing will take place at the latter of; the date set forth in the
original offer or 60 days following receipt of the notice of the offer to
purchase the Xxxxxx shares. For a period of three years following the Closing,
if Xstream receives an offer to purchase any of the Shares, Xstream shall advise
Xxxxxx III, and Xxxxxx III will have twenty days after receipt of said Notice to
participate in the proposed sale pursuant to the same terms and conditions as
are applicable to the Shares owned by Xstream.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS
Florida Brewery and the Shareholders represent and warrant to Buyer that:
2.01 (a) Incorporation, Common Stock, Etc. Florida Brewery is a corporation duly
organized and existing in good standing under the laws of Florida. Attached
hereto as Schedule 2.01 is a copy of the Company's good standing certificate and
Articles of Incorporation. Company has full corporate power and authority to
carry on its business as it is now being conducted and to own and operate its
assets, businesses and properties. Company has authorized capital stock
consisting of ___________ shares of Common Stock, par value $ __________ per
share, of which __________________ are issued and outstanding. There are no
preferred shares authorized. There are, and at the Closing will be no
outstanding subscriptions, options, warrants, convertible securities, calls,
commitments or agreements calling for or requiring issuance or transfer, sale or
other disposition of any shares of capital stock of the Company or calling for
or requiring the issuance of any securities or rights convertible into or
exchangeable (including on a contingent basis) for shares of capital stock. All
of the outstanding shares of the Company are duly authorized, validly issued,
fully paid and non- assessable. There are no dividends due, to be paid or in
arrears with respect to any of the capital stock of Company.
(b) The Company's stock and minute books made available to the
Buyer for review, are correct and complete as of the date provided. The copies
of the Articles of Incorporation, Bylaws and Stock Registrar of the Company
provided to Buyer are true and accurate and reflect all amendments made thereto
through the date of this Agreement.
(C)) The Company does not own, directly or indirectly, any
outstanding voting securities of or other interest in any other corporation,
partnership or joint venture.
2.02 Company Financial Statements. Attached hereto as Schedule 2.02 are the year
end audited financial statements for the Company dated September 30, 2002 and
2001. Said statements have been prepared using Generally Accepted Accounting
Principles. The balance sheet of the Company included
in the September 30, 2002 financial statements is referred to as the "September
30, 2002 Company Balance Sheet" and such September 30, 2002 date is referred to
as the "September 30, 2002 Company Balance Sheet Date." These financial
statements fairly present in all material respects the financial position of the
Company. There has been no material change in the financial condition of the
Company since the date of the financial statements and there are no known
liabilities contingent or otherwise. All known liabilities of the Company are
set forth in the financial statements and there are not undisclosed liabilities
of any kind or nature. All indicated accounts receivable arose from bona fide
transactions in the ordinary course of business, and the goods or services
involved have been sold, delivered and performed to the account. If the
September 30, 2002 audited financial statements reflect a material adverse
change in the financial condition of the Company from that which was previously
represented in the unaudited August 31, 2002 financial statements which have
previously been delivered to the Buyer, Buyer may, in its sole and absolute
discretion choose not to proceed with Closing and this Agreement will be of no
further force or effect and each party shall be liable for their respective
costs.
2.03 Litigation. Except as set forth in Schedule 2.03, there are no actions,
suits, proceedings, or investigations pending or, to the best of its knowledge,
threatened or contemplated against the Company or any of its subsidiaries at law
or in equity, before any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality, domestic or foreign.
The Company is not subject to any outstanding judgments or operating under or
subject to or in default with respect to any order, writ, injunction or decree
of any court or federal, state, municipal or other governmental department,
commission, board, agency or instrumentality, domestic or foreign.
2.04 Compliance with Laws. The Company has complied in all material respects
with all laws, regulations, orders, domestic and foreign, and neither the
present uses of its properties nor the conduct of its business violates any such
laws, regulations, orders or requirements, where such violation would have a
material adverse effect on the Company, and except as set forth in Schedule
2.04, the Company has not received any notice of any claim or assertion that it
is not so in compliance.
Except as set forth on Schedule 2.04(b), there have neve been
any hazardous materials stored on the property. Except as set forth on Schedule
2.04(b), the Company is currently in compliance with all applicable
environmental laws, the Company has never received any inquiry from any
governmental organization and there are no pending or contemplated
investigations regarding the same.
2.05 Indebtedness. Except as set forth on Schedule 2.05 or as reflected on the
financial statements, the Company, has not executed any instruments, or entered
into any agreements or arrangements pursuant to which the Company has borrowed
any money, incurred or guaranteed any indebtedness or established any line of
credit which represents a liability of the Company as of the date thereof.
2.06 No Material Adverse Change. Since the September 30, 2002 Company Balance
Sheet Dates, there has not been any material adverse change in the condition,
financial or otherwise, of the Company's business, nor has there been any
material transaction entered into by the Company. The Company will not incur any
material obligations (defined as any commitment in excess of $25,000) pending
closing without the prior written consent of the Buyer. It is further agreed
that any legal fees incurred by the Company in connection with this transaction
will be the responsibility of the Shareholders. Since the September 30, 2002
Company Balance Sheet date, there has not been any
damage, destruction or loss, whether or not covered by insurance adversely
affecting the Company's business, property or assets; nor has the Company (a)
issued, sold, purchased, redeemed or granted any shares of common stock or any
other securities of Company or any options, warrants or other rights to purchase
any shares of common stock of any of the companies except as set forth in
Schedule 2.06; (b) amended its Articles of Incorporation or by-laws (except as
set forth on Schedule 2.06(C)) paid any obligation or liability other than
obligations or liabilities reflected in the September 30, 2002 Company Balance
Sheet or any liabilities incurred thereafter in the ordinary course of business.
2.07 No Defaults. Neither the execution nor delivery of this Agreement nor the
consummation of the contemplated transaction are events which, of themselves or
with the giving of notice or passage of time or both, could constitute a
violation of or conflict with or result in any breach of or default under the
terms, conditions or provisions of any judgment, law, regulation or agreement,
or the Company's Articles of Incorporation or Bylaws, or of any agreement or
instrument to which Company or any Shareholder is a party or by which it is
bound; or could result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever on the property or assets of Company; and
except as set forth on Schedule 2.07, no consent of any third party except as
expressly contemplated herein is required for the consummation of this Agreement
by Company or the Shareholders.
2.08 Authority, Approval and Enforceability. This Agreement has been duly
executed and delivered by the Company and the Shareholders, and each of the
Shareholders and the Company has all requisite power and legal capacity to
execute this Agreement. This Agreement will constitute the legal, valid and
binding obligation of such party, enforceable in accordance with its terms. The
Board of Directors of the Company has duly authorized the execution and delivery
of this Agreement. Subject to the approval of the stockholders of the Company as
provided herein, this Agreement constitutes a valid, legal and binding agreement
of Company and is enforceable in accordance with its terms. Upon delivery to the
Buyer of certificates representing the Shares, good and valid title to the
Shares will pass to the Buyer free and clear of all liens and encumbrances.
2.09 Liabilities. Since the September 30, 2002 Balance Sheet date, the Company
has not incurred any other liabilities except those incurred in the ordinary
course of business. The September 30, 2002 Balance Sheet sets forth all
liabilities of the Company, contingent or otherwise as of that date.
2.10 Taxes. Except as set forth on Schedule 2.10, all federal, state, and local
tax returns, reports and declarations of estimated tax or estimated tax deposit
forms required to be filed by Company have been duly filed; the Company has paid
or reserved for all taxes which have become due pursuant to such returns or
pursuant to any assessment received by it, and has paid all installments of
estimated taxes due; and all taxes, levies and other assessments which it is
required by law to withhold or to collect have been duly withheld and collected
and have been paid over to the proper governmental authorities. The Company has
no knowledge of any tax deficiency which has been or might be asserted against
it which would materially and adversely affect the business or operations of the
Company. Prior to Closing, the Company shall provide Buyer with copies of all
tax returns, of any kind or nature, filed by Company, together with all
accounting information.
2.11 Title to Property; Leases. Except as set forth in Schedule 2.11, the
Company has good and defensible title in fee simple to, or valid and enforceable
leasehold estates in, all properties and assets, which are material to its
continued operations, free and clear of all liens, encumbrances, charges or
restrictions except those which are not materially significant or important in
relation to its operations and business. Except as set forth in Schedule 2.11,
all of such leases and subleases under
which Company is the lessor or sublessor, lessee or sublessee of properties or
assets or under which Company holds properties or assets as lessee or sublessee
are in full force and effect. The Company is not in default in any material
respect of any of the terms or provisions of any of such leases or subleases,
and no claim has been asserted by anyone adverse to the Company's rights as
lessor, sublessor, lessee or sublessee under any of the leases or subleases
mentioned above, or affecting or questioning the Company's rights to continued
possession of the leased or subleased premises or assets under any such lease or
sublease; and Company either owns or leases all such properties as are necessary
to its operations as now conducted.
Attached hereto and marked Schedule 2.11(b) is an accounting
of all assets with a market value in excess of $5,000 owned by the Company
including all tangible and intangible assets and assets owned through any
subsidiaries.
Attached hereto and marked Schedule 2.11(C)) is a list of all
leases, licenses or similar agreement relating to the use of any of Seller's
real or personal property.
2.12 Licenses. The Company has obtained all required licenses, permits or other
governmental authorization for the conduct of its business as now being
conducted.
2.13 Bank Accounts. Attached hereto as Schedule 2.13 is a listing of all bank
accounts and account numbers which are currently held by the Company. Concurrent
with the Closing, the Company shall take such steps as necessary in order for
Xstream or its designees to be named as signatories.
2.14 Contracts and Commitments. Except as set forth in Schedule 2.14, there are
no contracts nor commitments of the Company requiring any future payment to an
officer, director, employee, agent or shareholder of Company. Also attached and
marked as Schedule 2.14(b) is a list of all current employees and the salary of
each. As of the Closing Date, all salaries due and payable have been paid or
properly accrued.
Except as set forth in Schedule 2.14 (C)), the Company is not
a party to any Agreement, which requires the payment of more than $5,000 on any
annual basis. Any agreements listed on this schedule are valid and binding
agreements of the Company.
2.15 Representations True and Correct. This Agreement and the Schedules attached
hereto do not contain any untrue statement of a material fact concerning Company
or omit any material fact concerning Company or the Shareholders which is
necessary in order to make the statements therein not misleading. All of the
representations and warranties contained in this Article II (including all
statements contained in any certificate or other instrument delivered by or on
behalf of the Shareholders pursuant hereto or in connection with the
transactions contemplated hereby) shall survive the Closing but expire and
terminate on the first anniversary of the Closing
2.16 Retirement Plans. Except as set forth on Schedule 2.16, neither the Company
nor any of its subsidiaries are obligated under any pension plan, profit sharing
or similar employee benefit plan. Any pension liabilities have been satisfied in
full and there is no obligation on the part of the Company to fund any pension
plans.
2.17 Intellectual Property Rights. Attached hereto as Schedule 2.17 is a list of
all trademarks, trade names and formulas which are owned by the Company, both
domestic and foreign, together with copies of any official notices from any
issuing governing organization. The Company has valid ownership to all
trademarks identified in Schedule 2.17 and has been granted by the United States
Patent and Trademark Office valid trademarks. The Company is not aware of any
claims for trademark or patent infringement in connection with any of its
products or services. The Company owns or has the right to use any information,
know-how, trade secrets, patents, copyrights, trademarks, trade names, trade
secrets, software and other intangible property rights used in its business
operation.
2.18 Inventory and Product. Except as may be set forth on Schedule 2.18, the
inventory of the Company as of the Closing Date shall consist of items of a
quality, condition and quantity consistent with normal seasonally adjusted
inventory levels.
Each product designed, manufactured, sold or distributed by or
on behalf of the Company has been designed, manufactured, sold or distributed in
accordance with the specifications under which the product is normally produced.
There exists no set of facts which could reasonably be expected to furnish a
basis for the recall or withdrawal of any product.
2.19 Insurance. Attached hereto as Schedule 2.19 is a complete and correct list
of all insurance policies and the total amount of coverage of each policy
(including without limitation, fire, liability, product liability, workmen's
compensation and vehicular) currently in effect that relates to the Company, its
properties or the operation of its business. None of the insurance carriers has
indicated any intent to cancel the policies nor does the Company have any claims
pending with any of the insurance carriers.
2.20 Suppliers and Customers. Attached hereto as Schedule 2.20 is a list of all
principal suppliers and customers representing more than 10% of the Company's
gross purchases or sales. During the period of October 1, 2001 through September
30, 2002. The Company maintains good relationships with all customers and
suppliers required to be listed on Schedule 2.20 and no such party has canceled,
terminated or threatened to terminate or materially decrease its relationship
with the Company. The Company agrees and acknowledges that maintaining the
current customer base is a significant inducement to entering into this
transaction, although Buyer acknowledges that Buyer controls this issue after
the Closing.
2.21 Transactions with Affiliates. Except as set forth in Schedule 2.21, and
except for normal advances to employees consistent with past practices, the
Company has not purchased, acquired or leased any property from any officer,
director or shareholder or any affiliates of the foregoing.
2.22 Indemnification. The Company and the Shareholders shall indemnify and hold
Buyer, its officers and directors, harmless of and in respect of:
(1) Any damage or loss resulting from any breach of a
representation or warranty, or non-fulfillment of an agreement on the part of
Company under this Agreement;
(2) All actions or proceedings brought against the Company as
a result of any action by the Company or its employees occurring prior to
Closing.
The foregoing indemnification shall apply to claims for
indemnification that in the aggregate exceed $50,000 and shall be limited to a
term of one year following Closing.
The Buyer shall promptly after receipt by it of notice of the
assertion or the commencement of any claim with respect to an issue giving rise
to indemnification pursuant to this Section 2.22 advise the Shareholders and
thereafter keep them informed with respect thereto. In the case of any such
claim, the Shareholders shall be entitled to assume the defense thereof with
counsel reasonably satisfactory to the Buyer and at the Shareholders' own
expense.
The indemnification set forth in this Section 2.22 expires of
the first anniversary of the Closing. However, any claim for indemnification
asserted prior to the first anniversary date shall remain valid.
2.23 Ownership of the Shares. The Shareholders own 100% of the issued and
outstanding shares of stock of Company. The Shares are owned free and clear of
any liens or encumbrances. Those Shares which are being purchased pursuant to
this Agreement represent 90% of the Company's issued and outstanding shares of
common stock and the Shareholders are free to transfer these Shares without the
consent of any third party except as set forth in Schedule 2.07.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Shareholders and Company that:
3.01 Incorporation, Common Stock, Etc. Buyer is a corporation duly organized and
existing in good standing under the laws of the State of Nevada. The Buyer has
full corporate power and authority to carry on its business as it is now being
conducted and to own and operate its assets, businesses and properties. The
Buyer has authorized capital stock consisting of 50 million shares of Common
Stock, par value $.001 per share, of which _____________were outstanding as of
September 30, 2002. All of the outstanding shares of the Buyer are duly
authorized, validly issued, fully paid and non-assessable. There are no
dividends due, to be paid or are in arrears with respect to any of the capital
stock of Buyer. The Buyer is also authorized to issue 10 million shares of
preferred stock; of which 200,000 Series A have been issued.
3.02 Corporate Action of Buyer. The Board of Directors of the Buyer has duly
authorized the execution and delivery of this Agreement and the promissory notes
to be delivered by the Buyer to the Shareholders pursuant to Article I (the
"Notes"). This Agreement, and the Notes at Closing will constitute valid, legal
and binding agreements of Buyer enforceable in accordance with their terms.
3.02 Corporate Action of Buyer. The Board of Directors of the Buyer has duly
authorized the execution and delivery of this Agreement. This Agreement
constitutes a valid, legal and binding agreement of Buyer and is enforceable in
accordance with its terms.
3.03 Financial Statements. The Financial Statements as filed by the Buyer with
the Securities and Exchange Commission ("SEC") present fairly the financial
position of Xstream and do not contain any material omissions. These financial
statements are incorporated herein by reference. These financial statements
fairly present in all material respects the financial position of the Company.
Since the date of the most recent balance sheet filed by
Xstream with the SEC, there have been no events, changes, or occurrences which
have had or are reasonably likely to have, individually or in the aggregate, a
material adverse effect on Xstream. Since December 31, 2001, Xstream has filed
all reports and registration statements and the documents required to be filed
with the SEC under the rules and regulations of the SEC and all such reports and
registration statements or other documents have complied in all material
respects, as of their respective filing dates and effective dates, as the case
may be with the applicable requirements of the Securities Act of 1933 and the
Securities Exchange Act of 1934 and the rules and regulations thereunder. As of
the respective filing and effective dates, none of such reports and registration
statements and other documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.04 Litigation. Except as set forth in any filings with the SEC, or as set
forth in Schedule 3.04, there are no actions, suits, proceedings, or
investigations pending or, to the best of its knowledge, threatened or
contemplated against Xstream or any of its subsidiaries at law or in equity,
before any federal, state, municipal or other governmental department,
commission, board, agency or instrumentality, domestic or foreign.
3.05 Authority, Approval and Enforceability. This Agreement has been duly
executed and delivered by Xstream and Xstream has all requisite power and legal
capacity to execute this Agreement. This Agreement constitutes the legal, valid
and binding obligation of Xstream, enforceable in accordance with its terms. The
Board of Directors of Xstream has duly authorized the execution and delivery of
this Agreement and it constitutes a valid, legal and binding agreement of the
Buyer and is enforceable against Buyer in accordance with its terms.
3.06 Representations, True and Correct. This Agreement does not contain any
untrue statement of a material fact concerning the Buyer or omit any material
fact concerning the Buyer which is necessary in order to make the statements
therein not misleading. The representations and warranties contained in this
Article III (including all statements contained in any certificate or other
instrument delivered by or on behalf of the Buyer pursuant hereto or in
connection with the transactions contemplated hereby) shall survive the Closing
but expire and terminate on the first anniversary of the Closing.
3.07 Indemnification. The Buyer shall indemnify and hold the Shareholders
harmless of and in respect of:
(1) Any damages or loss resulting from any breach of a
representation or warranty, or nonfulfillment of an agreement, on the part of
the Buyer under this Agreement;
(2) For a period of one year all actions or proceedings
brought against the Company as a result of any action by the Company or its
employees.
The Shareholders shall promptly after receipt by them of
notice of the assertion or the commencement of any claim with respect to an
issue giving rise to indemnification pursuant to this Section 3.07 advise the
Buyer and thereafter keep it informed with respect thereto. In the case of any
such claim, the Buyer shall be entitled to assume the defense thereof with
counsel reasonably satisfactory to Shareholders and at the Buyer's own expense.
The indemnification set forth in this Section 3.08 expires of
the first anniversary of the Closing. However, any claim for indemnification
asserted prior to the first anniversary date shall remain valid.
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF BUYER TO CLOSE
The obligations of Buyer under this Agreement are subject to
the fulfillment of the following conditions at, or prior to, the Closing Date:
4.01 Representations, Warranties and Covenants. All representations and
warranties of Company contained in this Agreement and in any statement,
certificate, schedule or other document delivered by Company pursuant hereto or
in connection herewith shall have been true and accurate in all respects as of
the date when made and as of the Closing Date.
4.02 Covenants, Etc. Company shall have substantially performed and complied
with each and every covenant, agreement and condition required by this Agreement
to be performed or complied with by them prior to, or at, the Closing Date
including delivery of all required schedules as set forth in Article II.
4.03 Certificate. Company shall have delivered to Buyer, a certificate of the
President and Secretary of Company, dated the Closing Date, certifying to the
fulfillment of the conditions set forth in Schedules 4.01 and 4.02.
4.04 Proceedings. No action or proceedings shall have been instituted or
threatened against the Company which could materially adversely affect the
business of the Company. No action or proceeding shall have been instituted or
threatened against any of the parties to this Agreement or their directors or
officers before any court or governmental agency to restrain, prohibit or obtain
substantial damages in respect of this Agreement or the consummation of the
transaction contemplated hereby.
4.05 Corporate Documents. Prior to Closing the Company shall furnish to Buyer
copies of the Articles of Incorporation of Company and each amendment thereto,
if any, which shall be certified by a proper state official; one copy of the
By-Laws and minutes of Company by its secretary or an assistant secretary as
being currently in effect, and a certificate of good standing issued by the
proper state officials of each state in which Company transacts business and is
required to qualify.
4.06 Document & Production. This Agreement is expressly conditioned on Company
providing all identified schedules and exhibits at the time of Closing.
4.07 Resignation and Election of Directors. At Closing, the Shareholders shall
tender their resignation as officers and directors of the Company and provide
for the appointment of Xxxxxxxx Xxxxxxxxxx, Xxxxxx Xxxxxx and Xxxxx Xxxxxxx to
the Board of Directors effective as of the Closing.
4.08 Assumption of Bank Debt. Closing is specifically subject to and contingent
upon Buyer securing the consent of the Company's lender to this transaction or
at the discretion of the Buyer, obtaining a new line of credit to replace the
current bank line in an amount of $5 million.
4.09 Access to Financial Records Pending Closing. The Company shall deliver all
required financial statements at least seven days prior to Closing. In addition,
the Company will provide any requested financial records to Buyer in connection
with Buyer's Due Diligence.
4.10 Casualty Loss. If the Company should suffer a casualty loss, whether or not
covered by insurance between the date of execution of this Agreement and Closing
in an amount in excess of $100,000, the Buyer may, in its sole and absolute
discretion terminate this Agreement without further obligation.
4.11 Termination of Shareholders Agreement. At the Closing , the Shareholders
Agreement entered into between Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx shall be
terminated and of no further force or effect.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND SHAREHOLDERS
The obligations of the Company and the Shareholders under this
Agreement are subject to the fulfillment of the following conditions at or prior
to the Closing Date:
5.01 Representations, Warranties and Covenants. All representations and
warranties of Buyer contained in this Agreement and in any statement,
certificate, schedule or other document delivered pursuant hereto, or in
connection herewith, shall have been true and accurate in all respects as of the
date when made and as of the Closing Date.
5.02 Covenants, Etc. Buyer shall have substantially performed and complied with
each and every covenant, agreement and condition required by this Agreement to
be performed or complied with by it prior to, or at, the Closing Date.
5.03 Certificate. Buyer shall have delivered to Shareholders a certificate of
the President and Secretary of Buyer, dated the Closing Date, certifying to the
fulfillment of the conditions set forth in Schedules 5.01 and 5.02.
5.04 Proceedings. No action or proceedings shall have been instituted or
threatened against the Buyer which could materially adversely affect the
business of the Buyer. No action or proceeding shall have been instituted or
threatened against any of the parties to this Agreement or their directors or
officers before any court or governmental agency to restrain, prohibit or obtain
substantial damages in respect of this Agreement or the consummation of the
transaction contemplated hereby.
5.05 Release of Personal Guarantees. At or prior to Closing, Buyer will have
arranged for the Shareholders to be released from any personal guarantees which
the Shareholders have been required to execute in connection with either the
Company's existing bank debt or in connection with its normal business
operations.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.01 Abandonment of Agreement. This Agreement may be terminated and the
transaction hereby contemplated abandoned at any time prior to the Closing Date,
whether before or after the approval and adoption hereof by the shareholders of
the Company by (a) the mutual consent of the Board of Directors of Company and
Buyer, (b) by the Board of Directors of Buyer, if any condition to its
obligations provided in this Agreement has not been met at the time such
condition is to be met and has not been waived by it, ( c ) by the Shareholders
and the Board of Directors of the Company, if any condition to the obligations
of the Shareholders and the Company provided in this Agreement has not been met
at the time such condition is to be met and has not been waived by it, or (d) if
the Closing has not occurred on or before December 15, 2002 unless extended by
the mutual consent of the parties.
6.02 Liabilities. In the event this Agreement is terminated pursuant to Section
6.01, no party hereto shall have any liability to the other and each party shall
bear their own costs incurred.
6.03 Assignments. This Agreement may not be assigned by the Shareholders or the
Buyers except with the written consent of the nonassigning party.
6.04 Survival of Representations and Warranties. Company, Shareholders and Buyer
agree all representations and warranties contained herein or made hereunder
shall survive until the first anniversary of the Closing, except that any breach
disclosed in writing to either party prior to Closing is waived by such party if
it elects to close notwithstanding such breach.
6.05 Notices. All notices, demands and other communications which may or are
required to be given pursuant to this Agreement shall be given or made when
personally delivered or when sent via overnight delivery service, postage
pre-paid, addressed as follows:
If to Buyer to: Xstream. Beverage Group, Inc.
000 XX 00xx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
With a copy to: Xxxxxxx Xxxxx, Esquire
Xxxxxx, Xxxxxxx & Xxxxx, LLP
0000 XX Xxxxxxxxx Xxxx.
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
or to such other address as Buyer may, from time to time, designate by Notice to
Shareholders.
If to Shareholders and Company
prior to Closing
If to Shareholders Florida Brewery, Inc.
after Closing 000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Xxxxx Xxxxxx, Xx.
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
With a copy to: Xxxx X. Xxxxxxx, Esquire
Xxxxx XxxXxxxxx, PA
000 Xxxxx Xxxxxx Xxx.,Xxx.000
Xxxxxxx, Xxxxxxx 00000
or to such other addresses as the Shareholders may, from time to time, designate
by notice to Buyer.
6.06 Closing. The closing date for the contemplated transaction shall be on or
before December 15, 2002.
6.07 Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes and cancels any and all prior agreements between the
parties relating to its subject matter. The representations, warranties,
covenants and conditions of the obligations of the parties hereto may not be
orally amended, modified or altered, but may be amended, modified or altered in
a writing signed by each of the parties, whether before or after the meeting of
shareholders of Company contemplated herein.
6.08 Captions. The captions of Articles and Sections of Articles hereof are for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this Agreement.
6.09 Governing Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Florida and jurisdiction for any
dispute shall be in Palm Beach County, Florida. By entering into this Agreement,
the parties agree to the jurisdiction of the state courts within the state of
Florida. In the event of any litigation arising out of this Agreement, the
prevailing party shall be entitled to recover from the other party all costs
including reasonable attorneys fees.
6.10 Waivers. Any failure of either party hereto to comply with any of its
obligations or agreements, or to fulfill conditions herein contained may be
waived in writing by the other party. No waiver by any party of any condition or
the breach of any provision, term, covenant, representation or warranty
contained in this Agreement, whether by conduct or otherwise, shall be deemed to
be or construed as a further or continuing waiver of any such condition or of
the breach of any other provision, term, covenant, representation, or warranty
of this Agreement.
6.11 Counterparts. This Agreement may be executed in several counterparts and
all so executed shall constitute one agreement, binding upon all of the parties
hereto, notwithstanding that not all of the parties are signatory to the
original or the same counterpart.
6.12 Successors. The terms covenants and conditions of the Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, legal representatives, successors and assigns.
6.13 Binding Agreement. This Agreement represents the entire agreement among the
parties hereto with respect to the matters described herein and is binding upon
and shall inure to the benefit of the parties hereto and their legal
representatives. This Agreement may not be assigned and, except as stated
herein, may not be altered or amended except in writing executed by the party to
be charged.
6.14 Confidentiality. Each of the parties hereto and their respective agents
will maintain the confidentiality of all information provided in connection with
this Agreement which has not been publicly disclosed.
6.15 Insurance. For a period of two years following Closing, the Company shall
provide family health insurance coverage to Campos Jr. and Xxxxxx. The coverage
will be equivalent to the health insurance coverage which will be offered to the
Company's employees. Notwithstanding the foregoing, if either Xxxxxx or Xxxxxx
obtain employment following Closing and said employment provides health
insurance benefits, then the obligation of the Company shall cease. In addition,
the obligation of the Company to pay for health insurance for a period of two
years is subject to any time limitation which may be imposed as a result of
COBRA.
This Agreement entered into the date first entered above.
Xstream Beverage Group, Inc. WITNESS:
________________ _____________________
BY: Xxxxx X. Xxxxxxx
ITS: CEO
The Florida Brewery, Inc.
BY: Xxxxx Xxxxxx Xx.
ITS: President
THE SHAREHOLDERS
_______________________ _____________________
XXXXX XXXXXX XX.
____________________ _______________________
XXXXXX XXXXXX
____________________ _______________________
XXXXX XXXXXX III
