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EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of
January 20, 1998, by and among Southwestern Ice, Inc. ("Buyer"), a Texas
corporation and wholly owned subsidiary of Packaged Ice, Inc., CICO, LTD., a
Colorado Limited PartnerShip ("Seller"), CICO Investments, Inc., the General
Partner of Seller and the shareholders of General Partner ("Shareholders").
PRELIMINARY STATEMENTS
Seller is engaged in the manufacture, transportation and distribution
of packaged ice products (such business being herein referred to here in as
"Seller's Business" or "Business"); and
Seller operates the Business under the name of "City Ice;" and
Seller is desirous of selling to Buyer and Buyer is desirous of
purchasing certain assets of Seller's Business, upon the terms and conditions
hereafter set forth;
NOW THEREFORE, in consideration of the premises and the mutual
agreements, covenants, representations and warranties hereafter set forth, the
parties hereby agree as follows:
I. DEFINITIONS
Unless the context otherwise requires, the terms defined in this
Section I shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined.
"Assets" shall mean those assets of the Seller which are more fully
described in Section 2.1 and Schedule 2.1 of this Agreement. The Assets shall
not include the Excluded Assets (defined hereinbelow).
"Xxxx of Sale" shall refer to the Xxxx of Sale conveying title to the
Assets from Seller to Buyer attached to this Agreement as Exhibit A.
"Closing" shall mean the consummation of this Agreement.
"Closing Date" shall mean the date on which this Agreement will be
consummated.
"Excluded Assets" shall have the meaning set forth in Section 2.3 of
this Agreement.
"Financial Statements" shall have the meaning set forth in Section
3.3 of this Agreement.
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"Intangible Assets" shall mean all patents, trademarks, trademark
licenses, trade names, brand names, slogans, copyrights, reprint rights,
franchises, licenses, authorizations, inventions, processes, know-how,
formulas, trade secrets and other intangible assets of and only of the Business
(together with all pending applications, continuations-in-part and extensions
for any of the above).
"Seller's Disclosure Memorandum" shall mean a memorandum prepared by
Seller and delivered to Buyer that lists all disclosures by Seller concerning
the Assets and the Business which are the subject of this Agreement.
"Taxes" shall mean all federal and state income and franchise tax, all
excise, added value, sales, use, real and personal property, occupancy,
business and occupation, mercantile, real estate, or other tax (including
interest and penalties thereon and including estimated taxes thereof).
II. PURCHASE AND SALE
2.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and
conditions of this Agreement, Seller agrees to sell, convey, assign, transfer
and deliver to Buyer, and Buyer agrees to purchase, at the Closing, the
personal property, intangible assets, contracts and rights of Seller related to
the Seller's Business which are described on Schedule 2.1 attached hereto and
incorporated herein by reference, and all of the goodwill of Seller's Business
associated therewith (collectively the "Assets").
2.2 PURCHASE PRICE. The Purchase Price of the Assets shall be
$10,216,700 which shall be paid to Seller in the form of a bank cashier's check
or wire transfer. The Purchase Price shall be paid to Seller less any amounts
to be paid directly to creditors of Seller that are required to discharge any
liens or other encumbrances against the Assets and less $785,900 of the xxxxxxx
money that was previously paid to the Land Title Guarantee Company as escrow
agent which is to be applied to the Purchase Price at Closing.
2.3 EXCLUDED ASSETS. The Assets shall not include and Buyer shall
not acquire the assets and properties described in Schedule 2.3 attached hereto
(the "Excluded Assets").
2.4 ASSUMPTION OF LIABILITIES. It is hereby agreed and understood
that Buyer is assuming no liabilities whatsoever of Seller. Seller shall be
responsible for all employment related expenses occurring before Closing Date,
including salaries, wages, accrued vacation pay, sick pay or leave,
unemployment compensation, income tax withholding, social security taxes.
2.5 PRORATION. The parties shall prorate at the Closing the
current year's ad valorem taxes and vehicle license fees on the property
comprising the Assets, based on the latest available statements from taxing
authorities, whether for the current tax year or the preceding tax year.
Seller's pro rata share of such taxes and vehicle license fees, if any, shall
be the portion attributable to the period through the day preceding the Closing
Date, prorated by days. The prorated amounts shall be payable in the manner
set forth below:
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(a) If a prorated amount is payable by Buyer and
determinable at the Closing, it shall be added to the amount payable
by Buyer at the Closing.
(b) If a prorated amount is payable by Buyer and not
determinable at the Closing, it shall be billed by Seller when
determinable and promptly paid by Buyer to Seller.
(c) If a prorated amount is payable by Seller and
determinable at the Closing, it shall be deducted from the amount
otherwise payable by Buyer at the Closing.
(d) If a prorated amount is payable by Seller and not
determinable at the Closing, it shall be billed by Buyer when
determinable and promptly paid by Seller to Buyer.
2.6 ALLOCATION. The parties hereto agree and acknowledge that the
Purchase Price shall be allocated as set forth in Schedule 2.6 attached hereto,
and Seller and Buyer agree to file all Tax returns or reports including,
without limitation, IRS Form 8594, for their respective taxable years in which
the Closing occurs and to reflect the allocation of the Purchase Price on any
such return or report and agree not to take any position inconsistent therewith
before any governmental agency charged with the collection of any Tax or in any
administrative proceeding.
2.7 PURCHASE PRICE ADJUSTMENT. The cash amount of the Purchase
Price (the "Cash Amount") shall be reduced by the sum of the following and paid
directly to Seller's creditors:
(a) the Closing Date payoff amounts of all current and
long term debt that relate to the Assets and current and long term
Capital Leases that relate to the Assets (including any unpaid
interest and prepayment penalties);
(b) intercompany and affiliated accounts and notes
payable.
III. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as otherwise disclosed in Seller's Disclosure Memorandum,
Seller represents and warrants to Buyer as follows:
3.1 ORGANIZATION. Seller is a Colorado limited partnership doing
business in the State of Colorado and is known to do business as City Ice.
Seller has all requisite power and authority to own, lease and operate the
Business as presently conducted and to enter into this Agreement and to perform
its obligations hereunder.
3.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT. The
execution, delivery and performance by Seller of this Agreement and the
consummation of it by the transactions contemplated hereby have been duly
authorized by all necessary action. This Agreement has been duly executed and
delivered by Seller and constitutes the valid and binding obligation of
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Seller, enforceable against Seller, in accordance with its terms. The
execution, delivery and performance of this Agreement by Seller will not, with
or without the giving of notice, the passage of time, or both, violate,
conflict with, result in a default, breach or loss of rights under, or result
in the creation of any lien, claim or encumbrance pursuant to, any lien,
encumbrance, instrument, agreement, or understanding, or any law, regulation,
rule, order, judgment or decree, to which Seller is a party or by which it is
bound or affected, respectively.
3.3 FINANCIAL STATEMENTS. Seller has previously caused to be
furnished to Buyer the Business' audited balance sheet as of December 31, 1994,
December 31, 1995 and December 31, 1996, and the related statements of income
and statements of cash flow for the years then ended, and the unaudited balance
sheet of the Business as of September 30, 1997 and the related unaudited
statement of income and statement of cash flow for the 9-month period ending
September 30, 1997 (such balance sheets and related statements are collectively
referred to herein as the "Financial Statements"). The Financial Statements
taken as a whole present fairly the financial position of Seller as of December
31, 1994, December 31, 1995, December 31, 1996 and September 30, 1997,
respectively, in accordance with generally accepted accounting principles,
consistently applied.
Except as and to the extent reflected or reserved against in the
Financial Statements or as disclosed by Seller in Seller's Disclosure
Memorandum and except for liabilities arising in the ordinary course of
business and consistent with past practice since the date of Seller's September
30, 1997 Balance Sheet, Seller has operated the Business in the ordinary course
and has incurred no material liabilities which would be required to be
reflected in accordance with the generally accepted accounting principles on a
balance sheet as of the date hereof or disclosed in the notes thereto. Since
December 31, 1996, there has not been any material adverse change in the
business, operations, properties, prospects, assets or condition of Seller, and
no event has occurred or circumstance exists that may result in such a material
adverse change.
3.4 ENCUMBRANCES ON THE ASSETS. Except as set forth on Seller's
Disclosure Memorandum, there are no debts, liabilities, mortgages, liens,
security interests, charges, pledges, conditional sale agreements, or adverse
claims or restrictions, transfers or any other encumbrances (hereinafter
"Encumbrances") whatsoever against the Assets.
3.5 BUSINESS OPERATIONS AND CONDITION OF ASSETS. Seller
acknowledges that Buyer is purchasing the Assets for the express purpose of
operating a packaged ice manufacturing and distribution business. All items
comprising the Assets have been continuously used by Seller in Seller's
Business and are now in serviceable condition unless expressly disclosed to the
contrary by Seller in Seller's Disclosure Memorandum.
3.6 TITLE TO PERSONAL PROPERTY. Except as set forth in Seller's
Disclosure Memorandum, Seller has good, legal and marketable title to all of
the personal property comprising the Assets; at the Closing, Seller shall
deliver to Buyer good, legal and marketable title to the Assets free from all
Encumbrances.
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3.7 LITIGATION. Except as set forth in Seller's Disclosure
Memorandum, there is no pending claim, action, suit, proceeding or
investigation (judicial, governmental or otherwise), nor any order, decree or
judgment in effect or, to the best of Seller's knowledge, threatened, against
or relating to Seller or the Assets, or the transactions contemplated by this
Agreement, and no event has occurred or circumstances exist that will, or is
reasonably likely to, give rise to or serve as a basis for the commencement of
any claim, action, suit, proceeding or investigation.
3.8 COMPLIANCE WITH LAWS. To the best of Seller's knowledge,
Seller has complied with all laws, rules, regulations, ordinances, orders,
judgments and decrees relating to the Assets. The ownership and use of the
Assets and the conduct of the Business as it specifically relates to the Assets
does not conflict with the rights of any other person.
3.9 TAXES. All returns, including estimated tax returns, required
to be filed after the Closing Date by or with respect to Seller with respect to
Taxes, that, if unpaid, might result in a lien upon any of the Assets, will be
duly filed and will be true, correct and complete, and all Taxes payable
pursuant thereto will be paid except such Taxes, if any, as may be contested in
good faith. No deficiency or adjustment in respect to any Taxes that have been
assessed against or with respect to Seller that, if unpaid, might result in a
lien upon any of the Assets remains unpaid.
All Taxes that relate to the Assets and that are payable by or
accruable by Seller or as to which Seller has any liability with respect to
events occurring on or before the Closing Date have been paid in full or have
been adequately provided for in the reserve for taxes on the books of Seller on
or before the Closing Date, except for income, franchise, if any, or capital
stock taxes, if any, and transfer, sales and other taxes arising in connection
with the transactions contemplated by this Agreement.
3.10 ENVIRONMENTAL. To the best of Seller's knowledge, Seller has
complied in all respects with all laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof) which have jurisdiction over Seller and its subsidiaries concerning
pollution or protection of the environment, public health and safety, or
employee health and safety, including laws relating to emissions, discharges,
releases, or threatened releases of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to comply.
Without limiting the generality of the preceding sentence, Seller has
obtained and been in material compliance with all of the terms and conditions
of all permits, licenses, and other authorizations which are required under,
and has complied, in all material respects, with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
Schedules, and timetables which are contained in such laws.
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3.11 EMPLOYEE BENEFITS. All employee benefit plans (whether or not
covered by ERISA), deferred compensation or executive compensation plans for
employees, directors or independent contractors, and all other employee or
independent contractor arrangements or programs that are maintained or
contributed to by the Seller (collectively, the "Company Plans") have been
administered and operated in all material respects in compliance with their
terms, ERISA, if applicable, the Code and other applicable law. All Company
Plans that are intended to be qualified under Section 401(a) of the Code are,
to the knowledge of Seller, so qualified under a favorable IRS determination
letter exists for each such plan which covers the amendments required by the
Tax Reform Act of 1986. All funded Company Plans are fully funded according
to their terms and applicable law. To the knowledge of the Seller, no
prohibited transaction or breach of fiduciary duty under ERISA has been
committed by any fiduciary, disqualified person or party in interest of any
Company Plan. The Seller has no liability, contingent or otherwise, under
Title IV of ERISA.
3.12 CONSENTS. Except as set forth in Seller's Disclosure
Memorandum, no consent or approval of any public body or authority and no
consents or waivers from other parties to material licenses, franchises,
permits, agreements or other instruments are required to be obtained by Seller
as a result of the transfer of the Assets contemplated by this Agreement to (i)
avoid the loss of any material license, franchise, permit or other instrument
or the creation of any lien or other claim on any Asset pursuant to the terms
of any law, regulation, order, agreement or other legal requirement binding
upon Seller relating to the Business or to which any such Asset may be subject,
or (ii) to enable Buyer to continue the operation of the Business substantially
as conducted prior to the Closing.
3.13 CONTRACTS. Seller is not a party to any contracts relating to
the Business or the Assets that are not terminable at will, other than those
contracts of Seller relating to the Business listed and described in Seller's
Disclosure Memorandum.
3.14 INSURANCE AND WARRANTIES.
(a) Insurance. Seller has in force all policies of
insurance described in Section 3.14(a) of Seller's Disclosure Memorandum
insuring it (including descriptions of whether such policies and binders are
"claims made" or "occurrences" policies, and the respective issuers and
expiration dates thereof). Seller has not been advised (i) of any risks or any
fact or matter which might render such policies void or voidable, or (ii) any
cancellations of insurance coverage, or material increases in premium, or other
costs related to insurance, to take effect, or that are proposed, or that may
or will occur, following the Closing. To the best of Seller's knowledge, all
such policies are underwritten by reputable insurers, and there is no basis to
believe the insurers are or are likely to become financially unsound. Seller
has not been refused insurance or been notified of any cancellation or
involuntary reduction or other limitation of insurance during the past three
years. Section 3.14(a) of Seller's Disclosure Memorandum lists all claims made
or dues to be made by Seller, and all matters for which a claim could
reasonably have been but was not made, against an insurer on account of events
occurring since December 31, 1996.
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(b) Warranties. Except as described in Section 3.14(b)
of Seller's Disclosure Memorandum, (i) Seller has not agreed to become
responsible for consequential damages or made any express warranties to third
parties with respect to any products distributed or sold by Seller and (ii)
there are no warranties (express or implied) outstanding with respect to any
products other than any such implied by law. A copy of each standard warranty
of Seller with respect to such product is included in Section 3.14(b) of
Seller's Disclosure Memorandum.
3.15 INVENTORIES.
(a) All inventories shown on the September 30, 1997
Balance Sheet consisted of, and all inventories thereafter acquired will
consist of, items of good and merchantable quality and quantity usable or
salable in the ordinary and regular course of Seller's Business except for
obsolete items and items below standard quality, all of which have been written
off, or written down to net realizable value on the September 30, 1997 Balance
Sheet. Each inventory or class was priced at the lower of cost or market on
the first-in, first-out basis and, as to the classes of items inventoried and
methods of counting and pricing, such inventories were determined in a manner
consistent with prior years. Except to the extent, if any, disclosed in
Section 3.15 of Seller's Disclosure Memorandum, Seller has neither sold any of
its inventory under agreements with an express right of return, nor consigned
any inventory, and Seller has no knowledge of any pending returns of inventory
in any material quantity.
(b) There have been no material changes in the
inventories reflected in the September 30, 1997 Balance Sheet and there will be
no further changes in any such inventories except those changes resulting from
write down or write offs, purchases in the ordinary and regular course of
business and sale of merchandise inventory in the ordinary and regular course
of business.
3.16 SUPPLIERS AND CUSTOMERS. Except as set forth in Section 3.16
of Seller's Disclosure Memorandum and to Seller's actual knowledge, no customer
of Seller has communicated to Seller in any manner his or its intention to
cease to do business with or trade with Seller, or materially alter, modify or
amend the terms with which it has conducted business with Seller whether as a
result of, or in contemplated of, the consummation of the transactions
contemplated by this Agreement.
3.17 COMPLETE AND ACCURATE DISCLOSURE. No representation or
warranty made to Buyer in this Agreement or in connection with this
transaction, to include all previous negotiations between Buyer and Seller,
contains or will contain an untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make such representation or
warranty not misleading or necessary to enable a prospective purchaser of
Seller's Business or the Assets to make a fully informed decision. All
documents and information which have been or will be delivered to Buyer or its
representatives by or on behalf of Seller are and will be true, correct and
complete copies of the documents they purport to represent. There have been no
material changes in Seller's Business from the commencement of negotiations
between Buyer and Seller and the Closing of this transaction.
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IV. REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 CORPORATE EXISTENCE; GOOD STANDING; CAPITALIZATION. Buyer is
a corporation, duly organized, validly existing and in good standing under the
laws of the State of Texas and is qualified to do business in the State of
Colorado.
4.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT. The
execution, delivery and performance by Buyer of this Agreement and the
consummation of it by the transactions contemplated hereby have been duly
authorized by all necessary action. This Agreement has been duly executed and
delivered by Buyer and constitutes the valid and binding obligation of Buyer,
enforceable against Buyer, in accordance with its terms. The execution,
delivery and performance of this Agreement by Buyer will not, with or without
the giving of notice, the passage of time, or both, violate, conflict with,
result in a default, breach or loss of rights under, or result in the creation
of any lien, claim or encumbrance pursuant to, any lien, encumbrance,
instrument, agreement, or understanding, or any law, regulation, rule, order,
judgment or decree, to which Buyer is a party or by which it is bound or
affected, respectively.
V. COVENANTS OF SELLER
Seller hereby covenants and agrees as follows:
5.1 CONDUCT OF BUSINESS. Between the date hereof and the Closing
Date, Seller shall operate the Business in the ordinary course and continue
normal capital expenditures and maintenance in connection with the Assets prior
to the Closing Date, except (i) as may be permitted by this Agreement or (ii)
as necessary to consummate the transactions contemplated hereby.
5.2 INVESTIGATION BY BUYER.
(a) Between the date hereof and the Closing Date, Seller
shall (i) give Buyer and its authorized representatives and advisors access, at
reasonable times and on reasonable notice, to all items of personal property
comprising the Assets, books and records, personnel, offices, and other
facilities of the Assets, (ii) permit Buyer to make such inspections thereof as
Buyer may reasonably require, and (iii) cause its employees, and its advisors
to furnish to Buyer and its authorized representatives and advisors such
financial and operating data and other information with respect to the Business
prepared in the ordinary course of the Business as Buyer or its agent shall
from time to time reasonably request.
(b) Seller agrees that, subsequent to the Closing Date,
Buyer and its agents and accountants will be permitted reasonable access,
during normal business hours, and as often as Buyer may reasonably request,
consistent with reasonable requirements of Seller, to the books and records of
Seller and its affiliates, insofar as such books and records contain
information or data pertaining to the Assets prior to the Closing Date to the
extent such information is not
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otherwise available at the offices or other facilities of the Buyer, and Buyer
shall have the right to make copies thereof and excerpts therefrom.
5.3 CLOSING CONDITIONS. Seller will, to the extent within its
control, use its best efforts to cause the conditions set forth in Article VII
to be satisfied by the Closing Date.
5.4 CONFIDENTIALITY. From and after the date hereof, Seller will,
and will cause its officers, employees, principals; affiliates,
representatives, consultants and advisors, to hold in confidence all
confidential information in the possession of Seller, its officers, employees,
principles, affiliates, representatives, consultants and advisors concerning
the Assets. Seller will not release or disclose any such information to any
person other than Buyer and its authorized representatives. Notwithstanding the
foregoing, the confidentiality obligations of this Section shall not apply to
information:
(a) which Seller is compelled to disclose by judicial or
administrative process, or, in the reasonable opinion of counsel, by
other mandatory requirements of law;
(b) which can be shown to have been generally available
to the public other than as a result of a breach of this Section; or
(c) which can be shown to have been provided to Seller by
a third party who obtained such information other than as a result of
a breach of a confidential relationship.
5.5 PUBLIC ANNOUNCEMENT. Seller and Buyer will cooperate in the
public announcement of the transactions contemplated by this Agreement, and,
other than as may be required by applicable law, no such announcement will be
made by either party without the consent of the other party, which consent
shall not be unreasonably withheld.
5.6 NO SHOPPING. Seller shall not solicit, initiate or
participate, directly or indirectly, or cause any other person to solicit,
initiate or participate, directly or indirectly, in discussions or negotiations
with, or provide any information to, any other person (other than the Buyer)
concerning, or enter into any agreement providing for (other than in the
ordinary course of business) the acquisition of the Assets or part thereof
(whether by merger, purchase of stock or assets or other similar transaction),
other than the acquisition contemplated by this Agreement. Seller shall not be
bound by this Section 5.6 in the event that the Closing has not occurred by
February 28, 1998 or until this Agreement is terminated in accordance with the
provisions of Article X herein.
5.7 FURTHER ASSURANCES. Seller will use its best efforts to
implement the provisions of this Agreement, and for such purpose Seller, at the
request of Buyer, at or after the Closing Date, will, without further
consideration, promptly execute and deliver, or cause to be executed and
delivered, to Buyer such deeds, assignments, bills of sale, consents, documents
evidencing title and other instruments in addition to those required by this
Agreement, in form and substance satisfactory to Buyer, as Buyer may reasonably
deem necessary or desirable to implement any provision of this Agreement.
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5.8 INSURANCE. Seller shall maintain insurance through the
Closing Date with financially sound and reputable insurers unaffiliated with
Seller in such amounts and against such risks as are adequate to protect the
Assets and the Business.
5.9 NONCOMPETITION AGREEMENT. At the Closing, Seller and the
shareholders of the General Partner of Seller will enter into and deliver to
Buyer noncompetition agreements in the form attached hereto as Exhibit 5.9 (the
"Noncompetition Agreement").
5.10 CESSATION OF BUSINESS/CHANGE OF NAME. Seller will cease to
conduct any business constituting the manufacturing, packaging, distribution
and/or storage of packaged ice products under the name of "City Ice" or "CICO,
Ltd."
5.11 OPINION OF LEGAL COUNSEL. At the Closing, Seller shall
deliver to Buyer a Legal Opinion of Seller's counsel in the form attached
hereto as Exhibit 5.11.
5.12 DISCHARGE OF SELLER'S DEBTS. Seller hereby agrees and
acknowledges that Buyer is not assuming any debts of Seller's debts and that
Seller remains responsible for and will discharge all debts that relate to the
Business (excluding those debts relating to the Excluded Assets) and were
incurred by Seller prior to the Closing.
VI. COVENANTS OF BUYER
6.1 ANCILLARY AGREEMENTS. At the Closing, Buyer will pay the
purchase price and enter into the Noncompetition Agreement and all other
ancillary documents required and deliver its Buyer's Opinion of Counsel to
Seller.
VII. CLOSING
7.1 TIME AND PLACE. The consummation of the sale and purchase of
the Assets and the execution of the Noncompetition Agreement (the "Closing")
shall take place at a mutually agreeable time and in a mutually agreeable
manner to include, but not limited to, the exchange of facsimile signature page
counterparts that have been signed by the appropriate parties to this
Agreement. The date of the Closing shall herein be referred to as the "Closing
Date" and shall take place no later than January 27, 1998.
7.2 SELLER'S OBLIGATIONS AT CLOSING. At the Closing, Seller shall
execute, acknowledge (where appropriate) and deliver to Buyer in form
reasonably satisfactory to Buyer:
(a) An assignment or assignments assigning to Buyer the
use and possession of all that property comprising the Assets.
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(b) copies of all certificates of occupancy, licenses,
permits, authorizations, and approvals required by law and issued by
all governmental authorities having jurisdiction, if any, and the
original of each xxxx for current real estate and personal property
taxes, together with proof of payment thereof (if any of the same have
been paid);
(c) Bills of Sale, assignments or other suitable transfer
documents transferring to Buyer, the Assets, free and clear of all
liens and encumbrances, in form reasonably satisfactory to counsel for
Buyer which includes the form UCC-3 or other appropriate form
indicating release of liens by any secured party and that no action of
redress or reclamation shall be sought by any secured party against
Buyer or the Assets;
(d) the Noncompetition Agreement;
(e) a Certificate of Compliance, in form and substance
satisfactory to Buyer, from Seller indicating that Seller has
materially complied with its obligations contained in this Agreement,
that all representations and warranties contained in this Agreement or
in any certificate required to be delivered in connection with this
Agreement shall be accurate at and as of the Closing with the same
force and effect as though made at Closing, and no material adverse
change with respect to the Seller has occurred.
(f) Seller shall deliver a copy of Seller's Opinion of
Counsel to Buyer.
7.3 BUYER'S OBLIGATIONS AT CLOSING. At the Closing, Buyer will:
(a) deliver to Seller $10,216,700 by check or wire
transfer (to include $785,900 from the $1,000,000 previously paid to
Seller as xxxxxxx money) less amounts needed to discharge
Encumbrances;
(b) deliver to the holders of any Encumbrances the
amounts necessary to discharge the Encumbrances against the Assets
(excluding the Excluded Assets), which shall not exceed $1,148,240;
(c) deliver to Seller and the shareholders of General
Partner executed counterparts of the Noncompetition Agreement and all
other ancillary documents required hereunder;
(d) a Certificate of Compliance from an officer of Buyer
indicating that Buyer has materially complied with its obligations,
representations and warranties contained in this Agreement;
(e) instruct the Land Title Guarantee Company to release
the $785,900 in xxxxxxx money being held by the Land Title Guarantee
Company to Seller as escrow agent; and
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(f) deliver Buyer's Opinion of Counsel to Seller.
VIII. CONDITIONS TO CLOSING
8.1 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer
to complete the transactions contemplated at the Closing shall be subject to
the satisfaction on or prior to the Closing Date of the following conditions:
(a) Performance. Each agreement and obligation of Seller
to be performed on or before the Closing Date shall have been duly
performed in all material respects;
(b) Representations and Warranties True; No Material
Adverse Change. The representations and warranties of Seller
contained herein or in any certificate required to be delivered in
connection with this Agreement shall have been accurate on the date
hereof and shall be accurate at and as of the Closing and since the
date hereof there shall have occurred no material adverse change in
the business operations, properties, prospects, Assets or condition of
Seller;
(c) No Violation of Statutes, Orders, etc. There shall
not be in effect any decree or judgment enjoining Buyer from
consummating the transactions contemplated hereby;
(d) Third Party Creditors. All third party creditors of
the Business will be paid in full and have released all liens or
claims against the Assets (excluding the Excluded Assets), or Seller
shall provide to Buyer documentation from all third party creditors
indicating that the third party creditors have released their liens
against the Assets and consented to Seller's conveyance of the Assets
to Buyer free and clear of all liens or other Encumbrances;
(e) Noncompetition Agreement. Seller and the
shareholders of General Partner shall have entered into the
Noncompetition Agreement;
(f) Stock Purchase Agreement. Buyer and Ice Delivery
Systems, LLC shall have consummated the Stock Purchase Agreement among
Buyer, and the transferee of all of the assets of Ice Delivery
Systems, LLC, Ice Delivery Systems, LLC, and the members of Ice
Delivery Systems, LLC dated ___________________, 1998;
(g) Opinion of Counsel. Seller shall have delivered an
Opinion of Counsel as described in Section 5.11 herein to Buyer; and
8.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of Seller
to complete the transactions contemplated at the Closing shall be subject to
the satisfaction on or prior to the Closing Date of the following conditions:
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(a) Performance. Each agreement of Buyer to be performed
on or before the Closing Date shall have been duly performed in all
material respects;
(b) Representations and Warranties True. The
representations and warranties of Buyer contained herein shall have
been true in all material respects;
(c) No Violation of Statutes, Orders, etc. There shall
not be in effect any decree or judgment enjoining Seller from
consummating the transactions contemplated hereby; and
(d) Stock Purchase Agreement. Buyer and the transferee
of the assets of Ice Delivery Systems, LLC shall have consummated the
Stock Purchase Agreement among Buyer, the transferee of the assets of
Ice Delivery Systems, LLC, Ice Delivery Systems, LLC, and the members
of Ice Delivery Systems, LLC dated __________, 1998.
(e) Buyer's Opinion of Counsel. Buyer has delivered an
Opinion of Counsel to Seller in a form that is reasonably satisfactory
to Seller.
IX. INDEMNIFICATION
9.1 INDEMNIFICATION OF BUYER BY SELLER. Seller agrees to
indemnify, defend and hold harmless Buyer and Buyer's employees, agents, heirs,
legal representatives, parent company, assigns and affiliates from and against
any and all claims, suits, losses, expenses (legal, accounting, investigation
and otherwise), damages and liabilities, including, without limitation, tax
liabilities (hereinafter, collectively "Damages"), arising out of or relating
to (i) any liability or obligation of Seller, (ii) any inaccuracy of any
representation or warranty set forth in this Agreement or the breach of any
covenant made by Seller in or pursuant to this Agreement, or (iii) the conduct
of, or conditions existing with respect to the Assets prior to Closing,.
9.2 INDEMNIFICATION OF SELLER BY BUYER. Buyer agrees to
indemnify, defend and hold harmless Seller from and against only those Damages
arising out of or relating to any inaccuracy or any representation or warranty
of Buyer set forth in this Agreement or the breach of any covenant made by
Buyer in or pursuant to this Agreement.
9.3 CLAIMS FOR INDEMNIFICATION. Whenever any claim arises for
indemnification hereunder, the indemnified party (hereafter the "Indemnified
Party") shall notify the indemnifying party (hereafter the "Indemnifying
Party") in writing by registered or certified mail promptly after the
Indemnified Party has actual knowledge of the facts constituting the basis for
such claim (the "Notice of Claim"). Such notice shall specify all material
facts known to the Indemnified Party giving rise to such indemnification right,
and to the extent practicable, the amount or an estimate of the amount of the
liability arising therefrom. The failure of any Indemnified Party to promptly
notify the Indemnifying Party shall not relieve the Indemnifying Party of its
obligation to indemnify in respect to such action and shall not relieve the
Indemnifying Party of any other liability which they may have to any
Indemnified Party unless such failure to notify the
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Indemnifying Party prejudices the rights of the Indemnifying Party. Any claim
of Buyer against Seller for any Damages shall be in accordance with the
provisions set forth in Section 9.6 herein.
9.4 RIGHT TO DEFEND. If the facts giving rise to any such claim
for indemnification involve any actual or threatened claim or demand by any
third party against the Indemnified Party, the Indemnifying Party shall be
entitled (without prejudice to the right of the Indemnified Party to
participate in the defense of such claim or demand at its expense through
counsel of its own choosing) to assume the defense of such claim or demand in
the name of the Indemnified Party at the Indemnifying Party's expense and
through counsel of its own choosing, which counsel shall be reasonably
satisfactory to the Indemnified Party, if it gives written notice to the
Indemnified Party within forty-five (45) days after receipt of the Notice of
Claim that the Indemnifying Party intends to assume the defense of such claim
and acknowledges its liability to indemnify the Indemnified Party for any
losses resulting from such claim; provided, however, that if the Indemnifying
Party does not elect to assume the defense of any claim, then (a) the
Indemnifying Party shall have the right to participate in the defense of such
claim or demand at its expense through counsel of its own choosing, provided
the Indemnified Party shall control the defense of such claim, (b) the
Indemnified Party may settle any such claim without the consent of the
Indemnifying Party, however, the Indemnifying Party may not settle any such
claim without the prior written consent of the Indemnified Party; and (c)
Section 9.5 hereof shall be inapplicable. Whether or not the Indemnifying
Party does choose to so defend such claim, the parties hereto shall cooperate
in the defense thereof and shall furnish such records, information and
testimony and attend such conferences, discovery proceedings, hearings, trials
and appeals as may be requested in connection therewith. To the extent Seller
is the Indemnified Parties for any actual or threatened claim or demand by any
third party, Seller shall have the right to control the prosecution of any
counterclaim or right related to such a claim or demand, provided that Seller
agrees to reasonably cooperate with Buyer with respect to the prosecution of
such counterclaim or right.
9.5 SETTLEMENT. Except as provided in Section 9.4, (i) the
Indemnified Party shall make no settlement of any claim that would give rise to
liability on the part of the Indemnifying Party under an indemnity contained in
this Article IX without the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld and (ii) the Indemnifying Party can
settle without the consent of the Indemnified Party only if the settlement
involves only the payment of money for which the Indemnifying Party will be
fully liable. No other settlement of any claim may be made without the consent
of both the Indemnified Party and the Indemnifying Party, which consent shall
not be unreasonably withheld.
9.6 LIMITATION OF WARRANTIES AND REPRESENTATIONS. The warranties
and representations that are set forth in Article III shall survive the Closing
for a period of one year, except for the warranties and representations of that
are set forth in Sections 3.1, 3.2, 3.4, 3.6, 3.9 and 3.10 which shall survive
the Closing for the applicable statute of limitations.
Buyer and Seller agree and acknowledge that contemporaneously with the
execution of this Agreement, Buyer and CICO, Ltd. have executed and delivered,
to each other, a Commercial Lease Agreement by which Buyer agrees to lease
certain real property (hereinafter the "Leased Premises" as that real property
is known in the Commercial Lease Agreement) from CICO, Ltd.
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and by which both parties have respective options requiring or enabling,
respectively, Buyer to purchase the Leased Premises from CICO, Ltd.
In the event that Buyer suffers or incurs any Damages (as that term is
defined in Section 9.1, herein and for which indemnity is required by Article
IX herein) in accordance with the terms set forth in this Agreement, Buyer
shall be entitled to off set the amount of such Damages against the purchase
price for the Leased Premises upon the execution of either party's respective
option as set forth in the Commercial Lease Agreement.
9.7 EFFECT OF TERMINATION. Without limiting any other rights the
parties may have, the parties specifically agree that the covenants contained
in this Article will continue to be enforceable following termination of this
Agreement.
X. TERMINATION
10.1 TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing Date by any of the
following:
(a) Mutual Consent. By mutual written consent of Seller
and Buyer;
(b) Misrepresentation or Breach. By Seller or by Buyer,
if there has been a material misrepresentation or a material breach of
a warranty or covenant herein or in any agreement required to be
delivered pursuant hereto on the part of the other party hereto;
(c) Failure of Condition to Buyer's Obligations. By
Buyer, if all of the conditions set forth in Section 8.1 have not been
satisfied;
(d) Failure of Condition to Seller's Obligations. By
Seller, if all of the conditions set forth in Section 8.2 have not
been satisfied;
(e) Court Order. By Seller or Buyer if consummation of
the transactions contemplated hereby shall violate any nonappealable
final order, decree or judgment of any court or governmental body
having competent jurisdiction;
(f) Material Adverse Change. By Buyer if any event has
occurred after the date hereof which is, or will result in a material
adverse change in the prospects, business or condition of the Assets.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 10.1(a), all further obligations of Seller and Buyer under
this Agreement shall terminate without further liability of Seller or Buyer.
If Seller fails to consummate the transactions contemplated on its
part to occur on or before February 28, 1998, in circumstances whereby all
conditions of the Closing set forth in Section 8.2 have been satisfied in all
material respects or waived, Buyer shall be entitled to
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receive back $785,900 of the $1,000,000 paid to the Land Title Guaranty Company
as xxxxxxx money for this transaction, and, additionally, Buyer shall be
entitled to (i) to require Seller to consummate and specifically perform the
transactions contemplated hereby, in accordance with the terms of this
Agreement, and to obtain from Seller any attorney fees incurred in connection
with procuring such specific performance or (ii) terminate this Agreement and
obtain reimbursement of its out-of-pocket expenses incurred directly in
connection with the negotiation, preparation and performance of this Agreement.
If Buyer fails to consummate the transactions contemplated on its part
to occur on the Closing Date, in circumstances whereby all conditions of the
Closing set forth in Section 8.1 have been satisfied in all material respects
or waived, Seller's sole remedy shall be to receive the xxxxxxx money deposit
that Buyer has deposited with the Land Title Guaranty Company of Denver,
Colorado as an xxxxxxx money deposit for this transaction.
10.3 RIGHT TO PROCEED. Notwithstanding anything in this Agreement
to the contrary, if any condition specified in Section 8.1 or 8.2 has not been
satisfied, Seller or Buyer, in addition to any other rights which may be
available to it, shall have the right to waive any such condition that is for
its benefit and to require the other party hereto to proceed with the Closing.
XI. MISCELLANEOUS
11.1 EXPENSES. Legal, accounting and other costs and expenses
incurred in connection with this transaction shall be paid by the party
incurring such expenses.
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in or made in connection with this
Agreement shall survive the Closing, except where limited by Section 9.6.
11.3 INUREMENT; ASSIGNMENT. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors, legal representatives and, if properly assigned, assigns. This
Agreement may not be assigned by any party without the written consent of the
other parties hereto.
11.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Schedules
and Exhibits hereto, and the related agreements referred to herein embody the
entire agreement of the parties hereto, and supersede all prior agreements and
understandings, with respect to the subject matter hereof.
11.5 SEVERABILITY. Any provision of this Agreement which is
invalid, unenforceable or illegal in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such invalidity,
unenforceability or illegality without affecting the remaining provisions
hereof and without affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
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11.6 INCORPORATION OF EXHIBITS AND SCHEDULES. All Exhibits and
Schedules referenced in this Agreement, and any statements contained therein or
in any certificate or instrument delivered pursuant hereto, constitute an
integral part of this Agreement and shall be deemed made in this Agreement as
if set forth in full herein.
11.7 CAPTIONS AND HEADINGS; USE OF TERM "PERSON". Captions and
headings used herein are for convenience only, do not constitute a part of this
Agreement, and shall not be considered in construing this Agreement. Unless
the context otherwise requires, all article, section or subsection
cross-references are to articles, sections and subsections within this
Agreement. As used herein, the term "person" shall mean any corporation,
partnership, venture, proprietorship, trust, benefit plan or other entity or
enterprise.
11.8 GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO.
11.9 NOTICE. All notices of requests, demands or other
communications required or to be given hereunder shall be delivered by hand,
overnight courier, facsimile transmission, or by United States Mail, postage
prepaid, by registered or certified mail (return receipt requested), to the
addressed indicated below and shall be deemed given when received by the
addressee thereof:
to Seller: CICO, LTD.
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx
00000
to General Partner: CICO Investments, Inc.
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx
00000
Attn: Xxxxxxx X. Xxxxx
with a copy to: Xxxx Xxxxxxxxx
Xxxxx, Xxxxx & Xxxx, P.C.
2900 Lincoln Center Building
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
to Buyer: Southwestern Ice, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: X.X. Xxxxx III, President
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with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xx.
Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxxxx, P.C.
or such other address or addresses as may be expressly designated by either
party by notice given in accordance with the foregoing provision.
11.10 AGENTS OR BROKERS. Seller and Buyer mutually represent and
agree with each other that no agents or brokers have been utilized in the
solicitation or negotiation of the sale of the Business and no fees,
commissions or expenses of any type shall be due or payable out of the proceeds
of the purchase price by either party to this Agreement.
11.11 TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement, and all time limitations shall be strictly construed and rigidly
enforced. The failure or delay in the enforcement of any rights or interests
granted herein shall not constitute a waiver of any such right or interest or
be considered as a basis for estoppel.
11.12 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which shall constitute
the same instrument.
11.13 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Rules of the American Arbitration
Association by a single arbitrator to be located in San Antonio, Bexar County,
Texas, and judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof, and shall not be appealable.
[CICO, LTD. ASSET PURCHASE AGREEMENT SIGNATURE PAGE FOLLOWS]
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[CICO, LTD. ASSET PURCHASE AGREEMENT SIGNATURE PAGE]
Executed on the date first written above.
SOUTHWESTERN ICE, INC.:
By:
-------------------------------------
Print Name: Xxxxx X. Xxxxxx
Print Title: Chief Executive Officer
CICO, LTD., A COLORADO LIMITED PARTNERSHIP:
By: CICO INVESTMENTS, INC., ITS GENERAL
PARTNER
By:
-------------------------------------
Print Name:
--------------------------
Print Title:
-------------------------
SHAREHOLDERS OF CICO INVESTMENTS, INC.:
----------------------------------------
XXXXXXX X. XXXXX
----------------------------------------
XXXXXX XXXXXXX
----------------------------------------
XXXXXXX XXXXXXXX
----------------------------------------
XXXXXX X. XXXXXXXX
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LIST OF SCHEDULES AND EXHIBITS
Exhibit A Xxxx of Sale
Schedule 2.1 Assets
Schedule 2.3 Excluded Assets
Schedule 2.6 Allocation of Purchase Price
Exhibit 5.9 Noncompetition Agreement
Exhibit 5.11 Opinion of Counsel
Seller's Disclosure Memorandum
2
