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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered into as
of the 9th day of February, 2000, by and between C. Xxxxxxx Xxxxxx, a citizen
and resident of Watauga County, North Carolina (hereinafter "Seller"); and Xxxxx
X. Xxxxxxxxxx, Xx., or his assigns, a citizen and resident of Catawba County,
North Carolina (hereinafter "Buyer").
RECITALS
A. Seller is the owner of 41,341 shares of common stock (the 'Stock")
of Fresh Foods, Inc., (hereinafter the "Corporation'), a corporation organized
and existing under the laws of the State of North Carolina, having its principal
place of business in Catawba County, North Carolina, and said stock is traded
over National Association of Security Dealers Automated Quotation System
(NASDAQ) having the symbol "FOOD".
B. Seller desires to sell all of his stock in the Corporation to Buyer,
and Buyer desires to purchase all of Seller's stock in the Corporation pursuant
to the terms and provisions hereof.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF STOCK
Seller hereby sells, assigns, transfers and sets over to Buyer 43,341
shares of common stock owned by the Seller in the Corporation. Buyer hereby
agrees to purchase the Stock and agrees to pay in consideration thereof the
purchase price of Eight Dollars ($8.00) per share, for a total of $346,728.00
(the "Purchase Price"), to be payable as follows:
1.1 Cash Payment at Closing. Buyer shall deliver the sum of One Hundred
Seventy-Three Thousand Three Hundred Sixty-Four Dollars ($173,364.00) to Seller
at the Closing of the subject transaction.
1.2 Payment of Balance of Purchase Price after Closing. At the Closing,
Buyer shall deliver a secured Promissory Note to the Seller in the principal
amount of the remaining balance of the Purchase Price. Said Promissory Note
shall bear interest at the rate of eight (8%) percent per annum. The Buyer shall
pay interest payments only on an annual basis on the twelfth (12th) month and
the twenty-fourth (24th) month following the Closing. The entire outstanding
principal balance and any interest accrued thereon shall be due and payable no
later than three (3) years from the date of the Closing. There shall be no
prepayment penalty for early payment of all or any part of the amount due.
However, if substantially all of the assets of Fresh Foods. Inc., or
substantially all of the
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voting stock of Fresh Foods, Inc., are sold to a party unrelated to Xxxxx X.
Xxxxxxxxxx, Xx., then the entire amount due under the provisions of the
Promissory Note shall become due and payable as of the closing of the Fresh
Foods sale.
ARTICLE II.
DELIVERY OF STOCK IN ESCROW
2.1 Stock Certificates to Escrow Agent. At the Closing, Seller shall
deliver to Xxxxxxx X. Xxxxx, Xx., whose address is 000 Xxxxxx Xxxxxx XX,
Xxxxxxx, Xxxxx Xxxxxxxx 00000, as "Escrow Agent", free and clear of all
encumbrances and restrictions on transfer, all certificates for the shares of
Stock sold pursuant to this Agreement, duly endorsed for transfer to Buyer and
accompanied by all other documents necessary for an effective transfer.
2.2 Shares Transferred Directly to Buyer at Closing. At the Closing,
21,670 shares shall be conveyed directly to the Buyer.
2.3 Balance of Shares Delivered Upon Payment of Promissory Note. Upon
the payment of the balance of the Purchase Price under the terms of the subject
Promissory Note in the principal sum of $173,364.00, on or before the due date
as provided for in the said Promissory Note, the Escrow Agent shall deliver the
remaining balance of shares of Stock being sold hereunder, together with the
necessary stock transfer stamps duly affixed thereon, and all other documents
delivered to the Escrow Agent to effectively transfer such shares, to the Buyer.
2.4 Escrow Fees. The fees and all other expenses of the Escrow Agent
shall be paid by Buyer.
2.5 Escrow Agreement. At the Closing, the Seller, Buyer and Escrow
Agent shall enter into a formal Escrow Agreement containing standards terms and
provisions governing the duties and responsibilities of the Escrow Agent.
ARTICLE III.
CLOSING
The Closing of the transactions contemplated hereby shall occur on or
before February 9, 2000 (the "Closing") at 3:00 P.M. at the law offices of Xxxx,
Young, Morphis, Bach & Xxxxxx, LLP, 400 Second Avenue NW, Hickory, North
Carolina. or at such other time and place as the parties may mutually agree
upon.
ARTICLE IV.
RIGHTS TO SELL STOCK OR ASSIGN DEBT
Xxxxx X. Xxxxxxxxxx, Xx., shall have the right to sell the subject
stock and assign the indebtedness evidenced by the Promissory Note set forth in
Paragraph 1.2 hereinabove, provided
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that Xxxxx X. Xxxxxxxxxx, Xx., remains as a guarantor of payment and performance
of the indebtedness and other conditions evidenced by the Promissory Note and
the provisions of Paragraph 1.2 are performed.
ARTICLE V.
DIVIDENDS DURING ESCROW
Any and all dividends paid on the Stock held by the Escrow Agent during
the term of the subject Promissory Note shall be the property of the Buyer.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Seller represents and warrants as follows:
(a) Seller is the owner of, free and clear of any liens, encumbrances
and charges, and has full power to sell and transfer to Buyer the Stock.
(b) The sale of the Stock by Seller pursuant to this Agreement is an
isolated transaction by the Seller, who does not intend to make any other sales
and who has not made any sales or purchases of such stock within the past six
months.
ARTICLE VII.
DELIVERIES BY SELLER AT CLOSING
At the Closing, Seller shall deliver the following documents and
instruments:
(a) All stock certificates representing 43,341 shares of
common stock owned by Seller in the Corporation. Said
certificates shall be endorsed for transfer to Buyer,
thereby transferring the subject shares free and
clear of any and all liens and encumbrances;
(b) An Escrow Agreement containing standard terms and
provisions governing the duties and responsibilities
of the Escrow Agent and the parties with respect to
that portion of the Stock being held by the Escrow
Agent; and
(c) Such other documents as may be reasonably necessary
in the opinion of Buyer to effectuate the
transactions contemplated by this Agreement.
ARTICLE VIII.
DELIVERIES BY SELLER AT CLOSING
At the Closing, Buyer shall deliver the following
(a) The sum of One Hundred Seventy-Three Thousand Three
Hundred Sixty-Four Dollars ($173.364.00) in cash or certified funds as part of
the Purchase Price payable to the Seller;
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(b) The secured Promissory Note in favor of Seller containing
the terms and provisions set forth in Section 1.3 hereof, a provision permitting
the Buyer to assign the debt to another, provided the Buyer remains as a
guarantor, and other standard and customary terms of such a Promissory Note.
(c) A Pledge Agreement which pledges the 21,671 shares of
stock as collateral for repayment of the Promissory Note to Seller.
(d) An escrow agreement containing standard terms and
provisions governing the duties and responsibilities of the Escrow Agent and the
parties with respect to that portion of the Stock being held by the Escrow
Agent; and
(e) Such other documents as may be reasonably necessary in the
opinion of Seller to effectuate the transactions contemplated by this Agreement.
ARTICLE IX.
FILINGS AND REGISTRATION
Buyer agrees to perform and to pay for the costs and expenses required
in connection with any filings and registration with the Securities and Exchange
Commission, the Corporation, and any and all other entities or agencies required
in order to close this transaction.
ARTICLE X.
BROKERAGE
Buyer and Seller represent that there are no brokerage or other
commissions due relative to the sale and transfer of the Stock by Seller to
Buyer.
ARTICLE XI
RELEASES
(a) Release by Seller. For himself and his affiliates, related parties,
heirs, assigns, agents, servants and representatives ("Xxxxxx Group"), Seller
does hereby release and forever discharge and acquit the affiliates, related
parties, employees, officers, directors, shareholders, attorneys, accountants,
agents, servants, representatives, successors and assigns of Fresh Foods, Inc.
(the "Fresh Foods Entities"), Fresh Foods, Inc., and Buyer, his affiliates,
related parties, heirs, assigns, agents, servants and representatives, from any
and all claims, demands, actions, rights, causes of action, obligations and
liabilities, known and unknown (collectively "Claims") that he or the Xxxxxx
Group or any of them has, could or may have against Fresh Foods, Inc., Fresh
Foods Entities and/or Buyer. from the beginning of time to the date of this
Agreement. including any and all Claims that have arisen. may have arisen or
might arise at any time in the future from the status of any of them as a
Company shareholder. Seller represents and warrants to Fresh Foods, Inc. and
Buyer that he has not assigned, transferred or conveyed in any manner all or any
part of his Claims against Fresh Foods, Inc., any of the Fresh Foods Entities,
or Buyer. Seller further represents and warrants to Fresh Foods, Inc.. and Buyer
that this Agreement is the legal, valid and binding obligation of himself,
enforceable against him accordance with its terms.
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(b) Release by Fresh Foods, Inc. and Buyer. Fresh Foods, Inc. and Buyer
do hereby release and forever discharge Seller from any and all Claims that
Fresh Foods. Inc. and/or Buyer has or may have against Seller from the beginning
of time until the date of this Agreement. Fresh Foods, Inc. and Buyer represent
and warrant to Seller that neither Fresh Foods, Inc, the Fresh Foods Entities,
nor Buyer have assigned. transferred or conveyed in any manner all of any part
of any Claim against Seller. Fresh Foods. Inc., and Buyer further represent and
warrant to Seller that this Agreement is the legal, valid and binding obligation
of Fresh Foods, Inc., and Buyer, enforceable against Fresh Foods, Inc. and Buyer
in accordance with its terms.
(c) Fresh Foods, Inc. Securities. Seller represents and warrants to
Fresh Foods, Inc. and Buyer that, other than the shares of Fresh Foods, Inc.,
common stock that he has unconditionally contracted to sell to Buyer, he does
not own any shares of common stock or other securities issued by Fresh Foods,
Inc. Except in the event of default by Buyer. Seller covenants and agrees with
Fresh Foods, Inc. that he will not at any time hereafter purchase or otherwise
acquire (so as to beneficiarily own) any security issued by Fresh Foods, Inc.
(d) Fresh Foods a Beneficiary. Fresh Foods, Inc., is a third party
beneficiary of the provisions of this Article and Seller acknowledges that the
provisions herein in favor of Fresh Foods, Inc., were a material inducement to
Buyer entering into this Agreement and that the Seller has received adequate and
sufficient legal consideration therefor.
ARTICLE XII.
ENTIRE AGREEMENT
This Agreement sets forth and contains the entire agreement between the
Buyer and Seller with respect to the subject stock, and will not be modified or
terminated except by agreement in writing executed by both parties.
ARTICLE XIII
GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the State of North Carolina.
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IN WITNESS WHEREOF, the parties hereby have executed this Stock
Purchase Agreement by affixing their hands and seals hereto on the date first
above written.
SELLER:
/s/ C. Xxxxxxx Xxxxxx (SEAL)
C. Xxxxxxx Xxxxxx
BUYER:
/s/ Xxxxx X. Xxxxxxxxxx, Xx. (SEAL)
Xxxxx X. Xxxxxxxxxx, Xx.
FRESH FOODS, INC. (*)
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx, Vice-Chairman
(*) Fresh Foods, Inc. is a party to this
agreement for purposes of Article XI and for
no other purpose.
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