ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into this 31 day of December,
1997, by and between D.M.S. FOOD DISTRIBUTORS, INC., a Florida corporation doing
business as Gourmet Distributors ("Seller"), XXXXXXX XXXXXXXX ("Shareholder")
and TERRACE HOLDINGS, INC., a Delaware corporation ("Purchase").
PRELIMINARY STATEMENT
---------------------
Seller is in the business of distribution of food products at 0000 X.X.
00xx Xxxxx, #000, Xxxxxxx Xxxxx, Xxxxxxx 00000 under the trade name "Gourmet
Distributors." Xxxxxxx Xxxxxxxx ("Shareholder") is the sole stockholder of
Seller. Purchaser desires to purchase and Seller desires to sell and convey to
Purchaser certain of the non-cash assets of Seller pertaining to the business of
Seller, subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and undertakings of
the parties, it is hereby agreed as follows:
1. Sale and Purchase of Assets. At the Closing (as defined in Section 4),
---------------------------
Seller agrees to sell, convey, transfer, assign; and deliver to Purchaser, and
Purchaser agrees to purchase from Seller, for the purchase price hereinafter
specified, certain of seller's non-cash assets identified as follows
(collectively the "Purchased Assets"):
1.1 Goodwill, Tradename and Customer Lists. All of Seller's
--------------------------------------
goodwill, tradename, customer lists, prospect lists, sales and marketing
materials, customer telephone numbers and telephone directory listings.
1.2 Inventory. All of Seller's non-obsolete inventory of goods and
---------
merchandise.
1.3 Furnishings and Fixtures. Any of Seller's furnishings and
-------------------------
fixtures which Purchaser elects to purchase at the Closing.
1.4 Contact Rights. All of Seller's contract rights under all
--------------
contracts to which Seller is a party.
1.5 No Accounts Receivable. Purchaser is not purchasing any of
----------------------
Seller's accounts receivable all of which shall be retained by Seller.
2. Non-Assumption of Seller's Liabilities. The sale, conveyance,
--------------------------------------
assignment, transfer and delivery of the Purchased Assets hereunder shall be
made free and clear of all liens and encumbrances, and of all obligations and
liabilities of Seller. Purchaser is not assuming any of Seller's accounts
payable or any liabilities of Seller.
3. Purchase Price.
--------------
3.1 Amount. The purchase price for the Purchased Assets shall be
------
determined as follows:
(a) Customer Lists: Purchaser shall pay ONE HUNDRED TWENTY FIVE
--------------
THOUSAND DOLLARS ($125,000.00) for the items recited in Section 1.1.
(b) Inventory: The purchase price for Seller's non-obsolete inventory
---------
shall be determined at Seller's cost, including shipping.
(c) Furnishings and Fixtures: The purchase price for Seller's
------------------------
furnishings and fixtures which Purchaser elects to purchase shall be
determined by agreement between the parties on or before the Closing.
3.2 Payment. At the Closing the Purchaser shall pay to Seller by
-------
cashier's check drawn on a Florida bank the sum of ONE HUNDRED TWENTY FIVE
THOUSAND DOLLARS ($125,000.00) plus the amounts of the separate purchase price
for the Seller's Inventory and the Seller's Furnishings and Fixtures. In
addition to the foregoing, the Purchaser shall enter into a three year
Consulting Agreement with XXXXXXXX, a copy of which Consulting Agreement is
attached hereto as Exhibit "A". Payment for the Consulting Agreement shall be
made in the manner set forth in said Consulting Agreement.
4. Closing.
-------
4.1 Closing. The closing (the "Closing") of the sale and purchase shall
-------
take place at the offices of ______________________________, at ____ a.m. on
January 2, 1998 or at such other time as the parties may mutually agree upon
(the "Closing Date"). Closing shall be conditioned upon the following: (a)
Seller and Purchaser shall have contacted the following named principal
customers of Seller: Publix, Xxxx-Xxxxx and Walmart, and Purchaser shall have
satisfied itself, in its sole judgment, that said customers shall continue as
customers of the business being acquired; (b) Delivery of a good standing
certificate on behalf of Seller; and (c) Delivery of a corporate resolution of
Seller approving of the transaction contemplated herein. At the Closing, Seller
shall deliver to Purchaser such bills of sale, required consents, assignments,
or other instruments to Purchaser to vest effectively in Purchaser good and
marketable title to the assets sold to Purchaser hereunder free and clear of all
liens, pledges, mortgages, security interests, encumbrances, actions or causes
of action, or rights in any other party whatsoever.
4.2 Effectiveness of Transactions. All transactions, deliveries and
-----------------------------
payments to take place at the Closing shall be deemed to take place
simultaneously and no
2
transaction, delivery of any certificate, consent or other document, or
payment shall be deemed made until all transactions, deliveries and
payments at the Closing are completed. All such transactions, deliveries
and payments shall be given effect as of the close of business on the
Closing date.
4.3 Delivery of Consulting Agreement To Be Made at Closing. In
------------------------------------------------------
addition to the deliveries to be made at Closing as per Paragraph 4.1, the
Consulting Agreement shall also be executed and delivered at the Closing.
5. Expenses. Each party shall pay their own expenses which may be
--------
incurred in connection with the sale of the assets pursuant to the terms of this
Agreement including, without limitation, the fees and expenses of their agents,
representatives, counsel and accountants.
6. Representations and Warranties of Seller. Seller hereby represent and
----------------------------------------
warrant to Purchaser as follows:
6.1 Organization, Authority, Qualifications, Taxes. etc. Seller is a
----------------------------------------------------
corporation duly organized, validly existing, and in good standing under
the laws of the State of Florida and has all corporate power and authority
to carry on its own business as presently conducted. Seller has properly
withheld and paid all taxes required to have been withheld and paid and has
timely filed all tax returns required to be filed.
6.2 Authority to Transfer Assets. Prior to the Closing, the Board of
----------------------------
Directors of the Seller shall take all corporate action necessary to
transfer the Purchased Assets. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not
constitute a violation of, or be in conflict with, or constitute a default
under, any terms or provisions of any contract, mortgage, indenture, or any
other document whatsoever to which Seller is a party.
6.3 Title to Properties, Encumbrances and Leases. At the Closing,
--------------------------------------------
Seller shall convey to Purchaser good and marketable title to all of the
Purchased Assets including all contracts to which Seller is a party. Such
properties and assets will be subject to no mortgage, pledge, lien,
conditional sales agreement, encumbrances, or charge of any nature or kind.
6.4 Consummation of Agreement. Neither the execution nor delivery of
-------------------------
this Agreement, the consummation of the transactions contemplated hereby,
the execution and delivery of any document referred to herein, nor the
fulfillment of the terms hereof will conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any
obligations, mortgage, lease, contract, or other agreement or document
pertaining to or affecting the Purchased Assets.
6.5 Proceedings and Judgments. No proceeding is currently pending or
-------------------------
threatened against Seller and no judgment is currently outstanding against
Seller.
3
6.6 Obligations of Seller Pending Closing. From the date hereof until
-------------------------------------
the time of Closing, Seller will:
(a) Operation of Business. Operate the business only in the
---------------------
usual, regular, and ordinary manner as heretofore conducted so as to
maintain the goodwill it now enjoys, and preserve the relationship
with its employees, customers, suppliers and others having business
dealings with it.
(b) Maintenance of Business. At Seller's expense, maintain the
-----------------------
Purchased Assets in customary repair, order, or condition, ordinary
wear and use excepted, and keep in effect such policies of insurance
as may be necessary or advisable to protect the Purchased Assets.
(c) Disposal of Assets. Not sell or dispose of any property or
------------------
assets comprising the Purchased Assets, other than inventory in the
normal course of business.
(d) Encumbering of Assets/Incurring Obligations. Notmortage,
-------------------------------------------
pledge or create any lien, security interest, charge or encumbrance
upon any of the Purchased Assets or incur any obligation or liability
except normal business or trade obligations incurred in the ordinary
course of business consistent with past practice.
6.7 Full Disclosure. No representation or warranty made by Seller in
----------------
this Agreement (a) contains any untrue statement of any fact, or (b) omits
to state any fact that is necessary to make the statements made, in the
context in which made, not false or misleading in any respect. There is no
fact known to Seller, that has been disclosed to Purchaser, that was and
is, or so far as Seller can reasonably foresee will be, material to the
business of Seller or the ability of Seller to perform its obligations
under this Agreement.
7. Representations and Warranties of Purchaser. Purchaser hereby
-------------------------------------------
represent and warrant to Seller as follows:
7.1 Organization, Authority, Qualifications, etc. Purchaser is a
--------------------------------------------
corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware, is registered to do business in Florida
and has all corporate power and authority to carry on its own business as
presently conducted.
7.2 Authority to Transfer Assets. Prior to the Closing, the Board of
----------------------------
Directors of the Purchaser shall take all corporate action necessary to
purchase the Purchased Assets. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not
constitute a violation of, or be in conflict with,
4
or constitute a default under, any terms or provisions of any contract,
mortgage, indenture, or any other document whatsoever to which Purchaser is
a party.
7.3 Consummation of Agreement. Neither the execution nor delivery of
-------------------------
this Agreement, the consummation of the transactions contemplated hereby,
the execution and delivery of any document referred to herein, nor the
fulfillment of the terms hereof will conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
obligations, mortgage, lease, contract, or other agreement or document
pertaining to or affecting the Purchaser.
8. Consulting Agreement. As a part of the consideration to be paid for
--------------------
the Purchased Assets, Purchaser agrees to execute and deliver to XXXXXXXX at the
Closing the Consulting Agreement in the form of Exhibit "A", attached hereto.
The Purchaser shall pay additional consideration in the amount of $275,000.00
for the Consulting Agreement, the terms of payment of which are set forth in
Exhibit "A".
9. Further Assurances. Seller shall from time to time, upon reasonable
------------------
request of Purchaser and without further consideration, execute and deliver such
instruments of transfer, conveyance and assignment, in addition to those
delivered pursuant to this Agreement, and take such other action as Purchaser
may reasonably request to more effectively convey, assign and transfer to
Purchaser the Purchased Assets or carry out the provisions of this Agreement.
10. Risk of Loss. Seller shall bear all risk of loss of, or damage or
------------
injury to, the Purchased Assets prior to the Closing.
11. Indemnification. From and after the Closing Date, Seller and XXXXXXXX
---------------
shall indemnify and hold harmless Purchaser and its respective directors,
officers and employees from and against any and all actions, suits, claims,
demands, debts, liabilities, obligations, damages, costs, and expenses,
including reasonable attorneys fees, arising out of any material
misrepresentation or breach of any material representation by Seller or XXXXXXXX
made herein, any failure or refusal of Seller to satisfy or perform any covenant
required to be satisfied, or any obligation of Seller for taxes. From and after
the Closing Date, Purchaser shall indemnify and hold harmless XXXXXXXX and
Seller and Seller's respective directors, officers and employees from and
against any and all actions, suits, claims, demands, debts, liabilities,
obligations, damages, costs and expenses, including reasonable attorneys fees,
arising out of any material misrepresentation or breach of any material
representation by Purchaser made herein, any failure or refusal of Purchaser to
satisfy or perform any covenant required to be satisfied.
12. Brokers. All negotiations relative to this Agreement and the
-------
transactions contemplated hereby have been carried on by Seller with Purchaser
and their representatives without the intervention of any other person in such a
manner as to give rise to any valid claim against any of the parties for a
brokerage commission, finder's fee or other like payment. Each party hereto
shall indemnify and hold harmless the other against and in respect of any claim
for brokerage or other commissions relative to this Agreement or to the
transactions contemplated
5
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
13. Miscellaneous.
-------------
13.1 This Agreement and the documents delivered pursuant to this
Agreement constitute the entire understanding and sole agreement of the
Parties and supersedes any prior understanding or written or oral
agreements between the Parties. No amendment, modification, or alteration
of the terms hereof shall be binding unless the same be in writing, dated
subsequent to the date hereof, and duly executed by the Parties.
13.2 This Agreement shall be binding upon and inure to the benefit
of, and be enforceable by, the Parties and their respective heirs,
executors, administrators, legal representatives, successors, and assigns
where permitted by this Agreement.
13.3 This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which shall constitute one
and the same instrument.
13.4 The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.5 The term "Agreement" shall mean this Agreement, as originally
executed, together with all schedules and exhibits hereto, which are an
integral part hereof and are incorporated herein, and any amendments hereto
or thereto.
13.6 Any provision of this Agreement which is found to be invalid
or unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions
hereof.
13.7 No waiver by the Parties of any default or breach of any term,
condition, or covenant of this Agreement shall be deemed to be a waiver of
any other breach of the same or any other term, condition, or covenant
contained herein.
13.8 Any notice required or permitted to be given hereunder shall be
in writing and shall be delivered personally or sent by certified mail,
postage prepaid, as follows: if to Seller or the Shareholder, 0000 Xxxxxx
Xxxxxxxxx #000, Xxxxxxxx, Xxxxxxx 00000 with a copy to Xxxxxxxx Xxxxxx,
Esq., one Biscayne Tower, Suite 0000, Xxx Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx,
Xxxxxxx 00000; and if to Purchaser, 0000 Xxxxxxxx Xxxx, Xxxxx X-000, Xx.
Xxxxxxxxxx, Xxxxxxx 00000 with a copy to Xxxxxx X. Xxxxxx, Esq., Xxxxxxx,
Merrick, Miller, etc., 00 Xxxxx Xx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000.
6
13.9 Should any litigation be commenced between the Parties to this
Agreement concerning this Agreement or the rights and duties of the Parties
in relation thereto, the Party prevailing in such litigation shall be
entitled, in addition to such other relief as may be granted, to its costs
and a reasonable sum for attorneys' fees in such litigation and any
appeals.
13.10 This Agreement and the exhibits and schedules hereto have been
jointly drafted by the parties hereto and, accordingly, shall not be
construed for or against either party as a result thereof.
IN WITNESS WHEREOF, the Parties have executed this Agreement the day and
year first above written.
SELLER:
------
Attest: D.M.S. FOOD DISTRIBUTIONS, INC.,
a Florida corporation
By: /s/ Xxxxxxx Xxxxxxxx
__________________________ ------------------------------
, Secretary Xxxxxxx Xxxxxxxx, President
Witnesses as to Shareholder: SHAREHOLDER:
-----------
/s/ Xxxxxxx Xxxxxxxx
__________________________ ---------------------------------
XXXXXXX XXXXXXXX
__________________________
PURCHASER:
---------
Attest: TERRACE HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxx
__________________________ ------------------------------
, Secretary Xxxxxxxx X. Xxxxx, V.P.
7
[LOGO]
Food Distributors, Inc.
Gourmet Distributors
December 31, 1997
ASSET LIST
COMPUTER EQUIPMENT (See Attached List) $2,560.00
TWO 1994 INTERNATIONAL TRUCKS @ $14,00 EACH $28,000.00
WAREHOUSE RACKS 1,200.00
TELEPHONE SYSTEM 1,000.00
FAX MACHINE 100.00
TYPEWRITER 100.00
REFRIGERATOR 150.00
PHOTOCOPY MACHINE 950.00
ELECTRIC PALLET XXXX 1,200.00
PALLET XXXX - MANUAL - 2 @ $75.00 150.00
FORK LIFT 2,500.00
OFFICE FURNITURE (See attached list) 1,750.00
FILE CABINETS
DESKS
CHAIRS
FOLDING TABLES
KITCHEN FURNITURE
ETC.
TOTAL $39,600.00
[LOGO] XXXXXXX COMPUTER SERVICES, INC. [LOGO]
0000 XX 00xx Xxxxxxx Xxxxxxxxxx Xxxxx, Xx. 00000-0000
Phone: (000) 000-0000 Fax: (000) 000-0000
Gourmet Food Distributors Inventory, as of December 30, 1997
Tripplite Omni 500Lan UPS 75.00
Computer 386SX from Orlando 200.00
14" Samsung Monitor 30.00
KeyBoard & Mouse 10.00
Panasonic KX-P1150 Printer 75.00
Citizen GSX-190 Printer 95.00
14" AOC Monitor-Color 100.00
Computer 386 200.00
Keyboard & Mouse 10.00
14" Monitor-Color 100.00
Computer #1 486 300.00
KeyBoard & Mouse 10.00
Panasonic KX-P1624 Printer 75.00
Tripplite Ups-Small 30.00
Star NX-1001 Printer 25.00
Tripplite UPS-Small 30.00
14" Hyundai Monitor 30.00
Computer 386SX33 200.00
KeyBoard & Mouse 10.00
14" AOC Monitor 30.00
Computer - Server 486 400.00
KeyBoard & Mouse 10.00
Panasonic KX-P 2624 Printer 75.00
Star NX-1001 Printer 25.00
14" Color Monitor (Xxxxxxxxx) 75.00
Computer 486/66 300.00
KeyBoard & Mouse 10.00
Tripplite Ups 30.00
Total Value 2560.00
OFFICE FURN.
DESK CHAIRS FOLDING TABLES STANDS CREDENZA FILE KITCHEN
SALES 2
EXEC. 7
SEC. 3
COMP. 1
SIDE METAL 11
SIDE WOOD 7
EXEC. 5
SEC. 5
6 foot 2
8 3
OFFICE REFRIG 1
PRINTER STANDS 3
TYPEWRITER STAND 1
COMPUTER 3 TIER STAND 1
WOOD 2
METAL 1
4 DRAWER 9
2 DRAWER 2
STORAGE CABINET 1
TABLE LG. 1
TABLE SM. 1
CHAIRS 8
MICROWAVE 1
TSTEE CHAIR 1
