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EXHIBIT 10.27
ASSET PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
ACADIA DAIRY, INC.
AS SELLER,
AND
XXXXXXX-FOREMOST, INC.,
AS BUYER
January 1, 1994
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TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE; NON-COMPETITION
1.1 Sale and Purchase of Assets . . . . . . . . . . . . . . . . . . 1
(a) Real Property . . . . . . . . . . . . . . . . . . . . . 1
(b) Personal Property . . . . . . . . . . . . . . . . . . . 2
(c) Inventory . . . . . . . . . . . . . . . . . . . . . . . 2
(d) Intellectual Property . . . . . . . . . . . . . . . . . 2
(e) Customer List . . . . . . . . . . . . . . . . . . . . . 2
(f) Licenses . . . . . . . . . . . . . . . . . . . . . . . 2
(g) Prepaid Expenses . . . . . . . . . . . . . . . . . . . 2
(h) Deposits . . . . . . . . . . . . . . . . . . . . . . . 2
(i) Other Property . . . . . . . . . . . . . . . . . . . . 2
1.2 Definition of Assets. . . . . . . . . . . . . . . . . . . . . . 3
1.3 Asset Transaction . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Purchase Price; Returns; Prorations/Expenses . . . . . . . . . . 3
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . 3
(b) Adjustment With Respect to Certain Returned Items . . . 5
(c) Prorations/Expenses . . . . . . . . . . . . . . . . . . 5
1.5 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.6 Non-Competition Agreement . . . . . . . . . . . . . . . . . . . 6
1.7 Purchase Price Allocations . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller . . . . . . . . . . . . 6
(a) Organization and Standing . . . . . . . . . . . . . . . 6
(b) Power and Authority . . . . . . . . . . . . . . . . . . 7
(c) Enforceability . . . . . . . . . . . . . . . . . . . . 7
(d) Title . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Licensing . . . . . . . . . . . . . . . . . . . . . . . 7
(f) Sufficiency and Condition of Assets . . . . . . . . . . 7
(g) Condition of Inventory; Customers . . . . . . . . . . . 8
(h) Intellectual Property . . . . . . . . . . . . . . . . . 8
(i) No Litigation . . . . . . . . . . . . . . . . . . . . . 8
(j) Parties in Possession . . . . . . . . . . . . . . . . . 8
(k) Condemnation . . . . . . . . . . . . . . . . . . . . . 8
(l) Contracts . . . . . . . . . . . . . . . . . . . . . . . 8
(m) Books and Records. . . . . . . . . . . . . . . . . . . 9
(n) Absence of Certain Changes . . . . . . . . . . . . . . 9
(o) Employees . . . . . . . . . . . . . . . . . . . . . . . 9
(p) Labor Matters . . . . . . . . . . . . . . . . . . . . . 11
(q) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 11
(r) Utilities . . . . . . . . . . . . . . . . . . . . . . . 12
(s) Environmental Matters . . . . . . . . . . . . . . . . . 12
(t) "Foreign Person" Status . . . . . . . . . . . . . . . . 12
(u) Consents . . . . . . . . . . . . . . . . . . . . . . . 12
(v) No Violation . . . . . . . . . . . . . . . . . . . . . 12
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(w) Finder's or Broker's Fees. . . . . . . . . . . . . . . 13
(x) Compliance With Laws . . . . . . . . . . . . . . . . . 13
2.2 Representations and Warranties of Buyer . . . . . . . . . . . . 13
(a) Organization and Standing . . . . . . . . . . . . . . . 13
(b) Power and Authority . . . . . . . . . . . . . . . . . . 13
(c) Enforceability . . . . . . . . . . . . . . . . . . . . 13
(d) Consents . . . . . . . . . . . . . . . . . . . . . . . 14
(e) No Violation . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE III
CLOSING
3.1 Date of Closing . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2 Actions by Seller . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Real Property Deed. . . . . . . . . . . . . . . . . . . 14
(b) Non-Foreign Affidavit. . . . . . . . . . . . . . . . . 14
(c) Xxxx of Sale. . . . . . . . . . . . . . . . . . . . . 15
(d) Assignment and Assumption . . . . . . . . . . . . . . . 15
(e) Non-Competition Agreement . . . . . . . . . . . . . . . 15
(f) Certificates of Title. . . . . . . . . . . . . . . . . 15
(g) Opinion of Counsel. . . . . . . . . . . . . . . . . . 15
(h) Possession . . . . . . . . . . . . . . . . . . . . . . 15
(i) Name Change. . . . . . . . . . . . . . . . . . . . . . 15
(j) Other Agreements . . . . . . . . . . . . . . . . . . . 15
3.3 Actions by Buyer . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Payment . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Assignment and Assumption . . . . . . . . . . . . . . . 16
(c) Non-Competition Agreement . . . . . . . . . . . . . . . 16
(d) Letter of Credit. . . . . . . . . . . . . . . . . . . . 16
(e) Opinion of Counsel . . . . . . . . . . . . . . . . . . 16
(f) Other Agreements . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV
POST CLOSING AGREEMENTS AND COVENANTS
4.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Seller. . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Buyer . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Indemnity Procedures . . . . . . . . . . . . . . . . . 18
4.2 Environmental Survey . . . . . . . . . . . . . . . . . . . . . . 18
4.3 Setoff Rights . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4 Accounts Payable; Accounts Receivable; Additional Prorations . . 19
(a) Accounts Payable. . . . . . . . . . . . . . . . . . . 19
(b) Accounts Receivable. . . . . . . . . . . . . . . . . . 19
(c) Additional Prorations. . . . . . . . . . . . . . . . . 20
4.5 Books and Records after the Closing. . . . . . . . . . . . . . 20
4.6 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.7 Further Acts and Assurances. . . . . . . . . . . . . . . . . . . 20
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ARTICLE V
MISCELLANEOUS
5.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) If to Seller: . . . . . . . . . . . . . . . . . . . . . 21
(b) If to Buyer: . . . . . . . . . . . . . . . . . . . . . 21
5.2 Survival of Representations and Warranties . . . . . . . . . . . 22
5.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 22
5.4 Binding Effect/Assignability . . . . . . . . . . . . . . . . . . 22
5.5 Full Cooperation . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . 22
5.7 Headings/Captions . . . . . . . . . . . . . . . . . . . . . . . 22
5.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.9 Communications . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.10 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 23
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LIST OF SCHEDULES
Schedule 1.1(a) Real Property
Schedule 1.1(b) Personal Property
Schedule 1.1(e) Customer List
Schedule 1.1(f) Licenses
Schedule 1.1(g) Prepaid Expenses
Schedule 1.1(h) Deposits
Schedule 1.5 Contracts To Be Assigned By Seller
Schedule 1.7 Purchase Price Allocations
Schedule 2.1(d) Existing Exceptions to Title
Schedule 2.1(i) Litigation
Schedule 2.1(o) Employees
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LIST OF EXHIBITS
Exhibit A Form of Non-Competition Agreement
Exhibit B Form of Special Warranty Deed
Exhibit C Form of Xxxx of Sale
Exhibit D Form of Assignment and Assumption
Agreement
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ASSET PURCHASE AND SALE AGREEMENT
This Asset Purchase and Sale Agreement (this "Agreement") is made as
of the 1st day of January, 1994, by and between Acadia Dairy, Inc., a Louisiana
corporation ("Seller"), and Xxxxxxx-Foremost, Inc., a Delaware corporation
("Buyer").
WHEREAS, Seller owns certain real property located in Lafourche
Parish, Louisiana and operates a dairy processing plant on such real property
under the name "Acadia Dairy" (the "Dairy Plant"); and
WHEREAS, Seller operates a wholesale dairy route service (the
"Routes") through which the dairy products produced at the Dairy Plant by
Seller are sold; and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, such real property and certain assets of Seller used at
the Dairy Plant and in servicing the Routes, on the terms and subject to the
conditions hereinafter set forth; and
WHEREAS, in connection with such sale and purchase, Buyer and Seller
desire to enter into certain covenants not to compete and certain other
ancillary agreements, all as more particularly described herein.
NOW, THEREFORE, in consideration of the premises and the mutual terms
and conditions herein contained, Seller and Buyer hereby agree as follows:
ARTICLE I
PURCHASE AND SALE; NON-COMPETITION
1.1 SALE AND PURCHASE OF ASSETS. At the Closing (hereinafter
defined) and subject to the terms and conditions hereof, Seller hereby agrees
to sell to Buyer, and Buyer hereby agrees to purchase from Seller, the
following assets:
(a) REAL PROPERTY. That certain tract of land situated
in Lafourche Parish, Louisiana more particularly described on Schedule 1.1(a)
attached hereto and incorporated herein by reference, together with all and
singular the rights and appurtenances pertaining to said real property,
including all right, title and interest of Seller in and to adjacent streets,
alleys, rights of way, and together with any buildings, structures,
improvements, and fixtures situated on said real property (collectively, the
"Real Property").
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(b) PERSONAL PROPERTY. All furniture, equipment,
leasehold improvements, fixtures, computers and related software, machinery,
supplies, signs, rolling stock, vehicles, and other tangible personal property
of any kind or character whatsoever owned by Seller (collectively, the
"Personal Property"), including, without limitation, those items listed on
Schedule 1.1(b) attached hereto and incorporated herein by reference.
(c) INVENTORY. All finished product inventory of
processed and packaged milk and other dairy products of Seller at the Dairy
Plant on the date of Closing (collectively, the "Inventory"); provided,
however, that the term "Inventory" as used herein shall not include, and Buyer
shall not be obligated to purchase hereunder, any outdated, spoiled, damaged or
unmarketable processed or packaged milk or other dairy products of Seller.
(d) INTELLECTUAL PROPERTY. All rights of Seller in and
to any trademarks, trade names, patents, trade secrets, service marks,
copyrights, processes, designs, formulae, inventions, ideas, concepts, and
advertising and media materials, owned by Seller (collectively, the
"Intellectual Property").
(e) CUSTOMER LIST. A listing (the "Customer List") of
the name of each and every customer to whom Seller sold or contracted to sell
any dairy products within the 180 day period prior to Closing and each
potential customer to whom Seller has submitted any outstanding bid to sell any
dairy products in the future (collectively, the "Customers" and individually a
"Customer"), as set forth on Schedule 1.1(e) attached hereto and incorporated
herein by reference.
(f) LICENSES. All licenses, permits, certificates and
authorizations of any kind held by Seller (collectively, the "Licenses"),
including, without limitation, those items listed on Schedule 1.1(f) attached
hereto and incorporated herein by reference, to the extent that the Licenses
may be lawfully transferred or assigned.
(g) PREPAID EXPENSES. Those certain prepaid expenses and
other items listed or referred to on Schedule 1.1(g) attached hereto and
incorporated herein by reference (collectively, the "Prepaid Expenses").
(h) DEPOSITS. Those certain deposits listed or referred
to on Schedule 1.1(h) attached hereto and incorporated herein by reference
(collectively, the "Deposits").
(i) OTHER PROPERTY. All guarantees, warranties,
blueprints, building plans and specifications, telephone exchange numbers and
listings (including, but not limited to, yellow page advertisements) and all
other personal property, whether tangible or intangible, owned by Seller and
used in the operation of its
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business, but specifically excluding post office boxes (collectively, the
"Other Property").
1.2 DEFINITION OF ASSETS. As used herein, "Assets" means the Real
Property, the Personal Property, the Inventory, the Intellectual Property, the
Customer List, the Licenses, the Prepaid Expenses, the Deposits, and the Other
Property, collectively, and does not include any of Seller's accounts
receivable, cash or cash equivalents or bank accounts.
1.3 ASSET TRANSACTION. The transactions contemplated by this
Agreement shall constitute only the purchase and sale of Assets to be conveyed
to Buyer under the express terms of this Agreement. Buyer shall not assume or
be liable for any accounts payable, obligations or liabilities of Seller,
whether direct or indirect, now existing or hereafter incurred, absolute,
accrued, contingent or otherwise, except solely for the contractual obligations
or liabilities which Buyer expressly agrees to assume under the terms of this
Agreement. Without limiting the generality of the foregoing, Buyer shall not
assume and shall have no liability for any liability or obligation based on,
arising out of or in connection with any termination or severance liability
(including, without limitation, any liability related to or arising out of the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et seq. and
any applicable state and local laws) with respect to employees who are employed
by Seller as of the date of Closing, or claims or conditions arising under or
relating to any applicable federal, state or local laws, rules or regulations,
common law or strict liability provisions, and any judicial or administrative
interpretations thereof, including any judicial or administrative orders or
judgments, relating to health, safety, industrial hygiene, pollution or
environmental matters. Seller shall not assume or be liable for any accounts
payable, obligations or liabilities of Buyer, whether direct or indirect, now
existing or hereafter incurred, absolute, accrued, contingent or otherwise.
1.4 PURCHASE PRICE; RETURNS; PRORATIONS/EXPENSES.
(a) PURCHASE PRICE. Subject to the terms and conditions
hereof and the adjustments and setoffs expressly specified in this Agreement,
the total purchase price (the "Purchase Price") for all of the Assets except
the Inventory shall be TWO MILLION FIVE HUNDRED THOUSAND AND NO/100ths DOLLARS
($2,500,000), composed of and payable as follows:
(i) At Closing an aggregate of FIVE HUNDRED
THOUSAND AND NO/100THS DOLLARS
($500,000.00) shall be paid by bank
cashiers check of immediately available
funds to Seller.
(ii) The remainder of the Purchase Price, being
TWO MILLION AND NO/100ths DOLLARS
($2,000,000) shall be paid to Seller in
four
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equal consecutive annual installments of
FIVE HUNDRED THOUSAND AND NO/100ths
DOLLARS ($500,000) each, beginning on the
first anniversary date of this Agreement
and continuing on the same date of each of
the next three (3) years thereafter. The
obligations of Buyer under this Section
1.4(a)(ii) shall be secured by an
irrevocable standby letter of credit
issued in favor of Seller by Continental
Bank, N.A. (the "Letter of Credit"). The
Letter of Credit shall be in such form and
substance as is reasonably satisfactory to
Seller. In the event of any default by
Buyer of any of its payment obligations
under this Section 1.4(a)(ii) that is not
cured within five (5) business days after
the due date of such payment, the
beneficiary of the Letter of Credit shall
be entitled to draw under the Letter of
Credit in accordance with the terms
thereof to obtain payment of all then
unpaid amounts of the Purchase Price less
any amounts then owing to Buyer pursuant
to Sections 4.1, 4.2 or 4.4(a); provided,
however, that nothing contained herein
shall give to Buyer, in the event of
default of its payment obligations, any
right to enjoin payment to
Seller/Beneficiary under the Letter of
Credit, it being clearly agreed and
understood between Buyer and Seller that
such Letter of Credit shall be independent
in every respect from this Agreement.
(iii) In addition to the payments to Seller
under Sections 1.4(a)(i) and (ii), Buyer
shall pay to Seller an additional amount
for the Inventory pursuant to this Section
1.4(a)(iii). Seller shall cause a
physical count of the Inventory to be
taken at the Dairy Plant after the close
of business on the date of Closing or as
soon thereafter as practicable, with
Buyer's representatives present and
assisting during such count. Seller and
Buyer shall mutually approve a schedule
showing the physical count of the
Inventory. The Inventory as stated in
such physical count shall be valued by
Seller and Buyer at Buyer's Xxxxx'x Velvet
Division's finished product cost for
comparable products. The aggregate value
of the Inventory as determined pursuant to
this subsection, less the amount of any
reductions pursuant to Section 1.4(b)
hereof
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in respect of returned items, shall be
payable to Seller in full by Buyer's check
within ten (10) business days after the
completion of the physical count of the
Inventory.
(b) ADJUSTMENT WITH RESPECT TO CERTAIN RETURNED ITEMS.
Buyer is not assuming any obligation to replace, or pay any refund for, any
dairy products sold by Seller to Customers prior to the Effective Time
(hereinafter defined) and thereafter returned to Seller or Buyer by such
Customers for replacement or refund. Nevertheless, in order to maintain good
relations with Customers after Closing, at its option Buyer may elect to
replace such returned dairy products with comparable dairy products of Buyer or
otherwise refund to the returning Customer the purchase price (including sales
taxes) actually paid by such Customer for the returned dairy products.
Notwithstanding anything in Section 1.4(a)(iii) to the contrary, any such
replacements or refunds effected by Buyer on or before the 10th business day
after the completion of the physical count of the Inventory as described in
Section 1.4(a)(iii) shall constitute a reduction of the amount otherwise
payable by Buyer under Section 1.4(a)(iii). The aggregate amount of such
reduction shall be the aggregate dollar amount of such refunds made by Buyer
plus the value (based on Buyer's finished product cost) of all replacement
products provided by Buyer to such Customers.
(c) PRORATIONS/EXPENSES. General real estate taxes for
the current year relating to the Real Property, property taxes for the current
year relating to Assets other than the Real Property, Prepaid Expenses for
which Buyer will receive the benefit, utility costs, and revenues and expenses
under any of the Contracts (hereinafter defined) to be assigned to Buyer
hereunder, shall be estimated and prorated as of the Effective Time
(hereinafter defined) and such prorations shall constitute adjustments to the
amount of the Purchase Price payable in cash at Closing under Section
1.4(a)(i). The Deposits credited to the account of Buyer shall be reimbursed
by Buyer at Closing as an adjustment to the amount of the Purchase Price
payable in cash at Closing under Section 1.4(a)(i). All taxes or assessments
assessed or accrued with respect to the period prior to the Effective Time
shall be paid by Seller. All sales and/or use taxes imposed with respect to
the transfer of the Assets to Buyer pursuant to this Agreement, shall be paid
by Buyer. Except as expressly otherwise provided herein, Seller and Buyer
shall each pay their own respective accounting, legal and actuary fees and
other costs and expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement.
1.5 CONTRACTS. For the same consideration, at Closing, and
subject to the terms and conditions hereof, Seller shall assign (to the extent
assignable) to Buyer, and Buyer shall assume and thereafter perform, those
certain contracts to supply products
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pursuant to bid proposals and other agreements (collectively, the "Contracts")
described in or attached to Schedule 1.5 attached hereto and incorporated by
reference; provided, however, that Buyer shall not assume or be obligated for
any obligations or liabilities of Seller arising out of the Contracts which
accrued or resulted from any transactions or any state of facts existing prior
to the Effective Time.
1.6 NON-COMPETITION AGREEMENT. As material consideration to
induce Buyer to enter into and perform this Agreement, at the Closing, and
subject to the terms and conditions hereof, Seller shall execute and deliver to
Buyer a Non-Competition Agreement in the form of Exhibit A attached hereto and
incorporated herein by reference (the "Non-Competition Agreement"). Seller
acknowledges and agrees that it shall benefit from the transactions
contemplated by this Agreement and that, but for the execution of the
Non-Competition Agreement by Seller, Buyer would not have agreed to enter into
or perform this Agreement or any of the transactions contemplated hereby.
1.7 PURCHASE PRICE ALLOCATIONS. The Purchase Price shall be
allocated in the manner set forth on Schedule 1.7 attached hereto and
incorporated herein by reference. Such agreed upon allocations are hereinafter
referred to as the "Allocations." The parties agree not to take a federal or
state income tax reporting position inconsistent with such Allocations and
further agree that such Allocations among the various categories of assets
represent reasonable estimates of the fair market values of such categories of
assets. Each party agrees to cooperate with the other so that the information
shown on Form 8594 filed with the Internal Revenue Service by such party with
respect to the transactions contemplated hereby will be consistent with the
information shown on the other party's Form 8594.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Buyer as follows:
(a) ORGANIZATION AND STANDING. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Louisiana with full power and authority to own and operate its
properties and to carry on its business operations as presently being
conducted, and to execute, deliver and perform this Agreement and all other
documents, instruments and agreements contemplated or required by this
Agreement. Seller is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by
it or the nature of the business transacted by it makes such qualification
necessary.
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(b) POWER AND AUTHORITY. Seller has all requisite
corporate power and authority to execute, deliver and perform this Agreement
and the transactions and other documents contemplated hereby. Seller has taken
all requisite corporate action necessary to authorize the execution, delivery
and performance of this Agreement and the transactions and other documents
contemplated hereby.
(c) ENFORCEABILITY. This Agreement constitutes, and the
other documents to be executed by Seller at Closing hereunder shall constitute
when executed by Seller, legal, valid and binding obligations of Seller
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(d) TITLE. Seller is the sole and unconditional legal
and equitable owner of the Assets free and clear of any and all liens, charges,
claims, security interests or encumbrances of any kind or nature whatsoever and
of any agreement or understanding with respect to the use or possession thereof
except as set forth in Schedule 2.1(d) (the "Existing Exceptions"). At the
Closing, Seller will convey to Buyer good, valid and merchantable title to the
Assets, free and clear of any and all liens, charges, claims, security
interests and encumbrances of any kind or nature whatsoever and of any such
agreement or understanding (including, without limitation, the Existing
Exceptions), except as expressly agreed to in writing by Buyer.
(e) LICENSING. Seller has received all required and
appropriate licenses, permits, authorizations, consents and approvals from all
applicable governmental agencies or authorities having jurisdiction over the
operation of Seller's business necessary for the operation of such business as
currently operated. Seller is in compliance with all terms, conditions and
provisions of such licenses, permits, authorizations, consents and approvals
and has not received notice of any deficiencies under or violations of any
applicable licensing laws, rules, regulations or requirements which have not
been corrected. Schedule 1.1(f) is a schedule of all permits, licenses, and
authorizations listing and describing each permit, license or similar
authorization from each governmental authority issued with respect to the
operation or ownership of Seller's business.
(f) SUFFICIENCY AND CONDITION OF ASSETS. The Assets to
be purchased by Buyer hereunder are sufficient in quantity to carry on the
business of Seller as heretofore conducted. The Assets include all assets
currently being utilized by Seller in operating its business. The Assets
comply in all material respects with all applicable environmental, fire,
health, safety, zoning and other
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governmental statutes, codes, rules and regulations. The Assets shall be
conveyed to Buyer at Closing with only those representations and warranties
stated in Section 2.1 hereof, and except for such representations and
warranties stated in Section 2.1 hereof, Seller shall convey the Assets to
Buyer at Closing "AS IS", "WHERE IS".
(g) CONDITION OF INVENTORY; CUSTOMERS. The Inventory
complies in all material respects with all applicable environmental, health,
safety, and other governmental statutes, codes, rules and regulations.
Schedule 1.1(e) hereto is a true and complete list of all significant customers
to whom Seller sold any dairy products within the 180 day period prior to
Closing and each potential customer to whom Seller has submitted any
outstanding bid to sell any dairy products in the future.
(h) INTELLECTUAL PROPERTY. Except for the Intellectual
Property, Seller does not own or use any registered or unregistered trademarks,
trade names or service marks in connection with the operation of Seller's
business. The operation of Seller's business as presently conducted does not
infringe upon or violate any trade name, trademark, service xxxx, patent,
patent application, copyrights or other property rights of another and Seller
has not received any notice of any claim of such infringement or violation.
(i) NO LITIGATION. Except as set forth in Schedule
2.1(i), there are no claims, actions, suits, arbitrations, governmental
investigations, inquiries or proceedings pending or threatened against Seller
or the Assets, at law or in equity, or before any governmental or
administrative board, agency or authority and, to the best knowledge of Seller,
there are no outstanding citations, orders, writs, injunctions, or decrees of
any court, government or governmental agency against or affecting the business,
financial condition or operations of Seller. Seller does not know of any facts
or circumstances which might reasonably form the basis for any such action,
suit, or proceeding. None of the actions described in Schedule 2.1(i), if
determined adversely to Seller, will have any material adverse impact on Buyer
or the Assets or the transactions contemplated hereby.
(j) PARTIES IN POSSESSION. There are no parties in
possession of the Real Property, or any portion thereof, as lessees, tenants at
sufferance, or trespassers.
(k) CONDEMNATION. There are no pending or, to the best
knowledge of Seller, threatened condemnation, assessment or similar proceedings
affecting or relating to the Real Property, or any portion thereof, and, to the
best knowledge of Seller after due investigation, no such proceedings are
contemplated by any governmental authority.
(l) CONTRACTS. Seller has performed all material
obligations required of it and is not in default (and no event has
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occurred which, with the passage of time or the giving of notice, or both,
would constitute a default) under any of the agreements with its Customers and
there is no asserted claim of such nonperformance or default by any Customer.
Each of the Contracts is in full force and effect. The assignment to Buyer of
the Contracts and the consummation of the transactions contemplated by this
Agreement will not cause or result in the acceleration, termination or
violation of, or default under, any of the Contracts, all of which will
continue to be binding in accordance with their terms after the consummation of
the transactions contemplated by this Agreement except as otherwise described
on Schedule 1.5.
(m) BOOKS AND RECORDS. The books and records of Seller
made available to Buyer reflect accurately and completely and in reasonable
detail valid transactions and fairly present an accurate and complete statement
of the transactions, business operations, affairs, assets, liabilities and
financial condition of Seller's business as of the respective dates thereof.
There have been no material transactions involving Seller's business which
properly should have been set forth in such books and records and which have
not been actually so set forth.
(n) ABSENCE OF CERTAIN CHANGES. Since June 1, 1993,
Seller has (i) not suffered any material adverse change outside the ordinary
course of business consistent with past practices in the condition, financial
or otherwise, business, assets, liabilities or operations of Seller, except as
otherwise indicated on the Schedules hereto, (ii) not suffered any material
damage, destruction or loss to any of the properties and assets of Seller,
whether or not covered by insurance, (iii) not increased the regular rate of
compensation payable to any non stockholder employee of Seller other than
normal merit or cost of living increases granted in the ordinary course of
business, (iv) not established or agreed to establish any pension, retirement
or welfare plan for the benefit of any of Seller's employees, (v) not
experienced any labor organizational efforts or strikes or entered into any
collective bargaining agreements with any union, (vi) not allowed any of the
Assets (real, personal or mixed, tangible or intangible) to be subjected to any
mortgage, pledge, lien, security interest, encumbrances, or restriction, except
as indicated on the Schedules hereto, (vii) not amended or terminated any
contract, agreement or license of significant value to which Seller was or is a
party, except in the ordinary course of business, (viii) not entered into a
material transaction other than in the ordinary course of business or made any
change in any method of accounting or accounting practice, or (ix) not agreed,
whether in writing or otherwise, to take any action described in this Section
2.1(n).
(o) EMPLOYEES. Schedule 2.1(o) hereto (the "Employee
Schedule") lists in true, accurate and complete detail all employees of Seller
as of the date of such Schedule, their job titles, annual rates of
compensation, accrued vacation, holiday pay
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and sick leave as of such date and other fringe benefits, if any, and a
description of any severance pay arrangements, if any, and the amounts payable
with respect to such accrued vacation, holiday pay, or sick leave and the rate
at which such accrued vacation, holiday and sick leave accrues. There are no
employees of Seller except as shown on the Employee Schedule. Seller is not
bound by any written contract of employment with any employee and all oral
employment contracts are terminable at will. Seller is not a party to any
employment or other agreement, whether written or oral, pursuant to which
Seller has agreed to make any loan to, or guarantee any loan of, an employee of
Seller or relating to any bonus, deferred compensation, severance pay or
similar plan, agreement or arrangement or understanding with any non
stockholder employees of Seller except as reflected in the Employee Schedule.
Except as listed on the Employee Schedule, Seller does not have any employee
welfare benefit plan (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), any employee
pension benefit plan (within the meaning of Section 3(2) of ERISA), or any
other type of pension, profit sharing, deferred compensation, retirement, stock
option, bonus, severance, medical, dental, life insurance, accident, or other
employee benefit or compensation plan, agreement, arrangement, practice or
policy with respect to employees of Seller. With respect to itself and its
employees, Seller has complied with all requirements of Sections 601 through
608 of ERISA and Section 4980B of the Internal Revenue Code of 1986, as amended
(the "Code"). Seller shall assume all responsibility and liability with
respect to continuation health coverage to the extent required by law and as
described in Sections 601 through 608 of ERISA and Section 4980B of the Code
for employees whose employment with Seller was terminated at or prior to the
Effective Time, including but not limited to employees of Seller who accept
employment with Buyer as contemplated below in this Section 2.1(o). At
Closing, Seller shall terminate all of its employees effective as of the
Effective Time except those listed on the Employee Schedule to whom Buyer has
indicated that it intends to offer employment. Buyer shall offer employment to
those employees of Seller listed on the Employee Schedule as being employees of
Seller to whom Buyer intends to offer employment, and those individuals who
accept such offer of employment shall become employees of Buyer and shall be
considered "new hires"; provided, however, that Seller acknowledges and agrees
that Buyer shall not assume, and shall be indemnified and held harmless by
Seller against, any liability or obligation arising out of or with respect to
(i) employment by Seller of any such employees prior to the Effective Time or
the termination of such employment at or prior to the Effective Time as
described in this Section 2.1(o), including any obligation or liability under
Section 4980B of the Code or Sections 601 through 608 of ERISA, (ii) any
pension, profit sharing, deferred compensation, retirement, stock option,
bonus, severance, medical, dental, life insurance, accident, or other employee
welfare benefit plan (within the meaning of Section 3(1) of ERISA) or employee
pension benefit plan (within the meaning of Section 3(2) of ERISA) of Seller,
or (iii)
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any other type of employee benefit or compensation plan, agreement,
arrangement, practice or policy of Seller. Furthermore, Seller shall be
responsible for paying (i) the amount of all current wages payable or accrued
to employees of Seller as of the Effective Time, and (ii) all amounts necessary
to discharge any and all accrued and/or earned fringe benefits such as vacation
pay, holiday pay or sick leave to all employees of Seller as of the Effective
Time; provided, however, Buyer shall honor any accrued vacation time with
respect to those employees of Seller to whom it offers employment and who
accept such offer of employment and Seller shall not be obligated to pay any
accrued vacation pay with respect to such employees. All amounts referred to
in clauses (i) and (ii) in the immediately preceding sentence shall be the
responsibility of and paid by Seller. Buyer acknowledges and agrees that
Seller shall not assume, and shall be indemnified and held harmless by Buyer
against, any liability or obligation arising out of or with respect to (i)
employment by Buyer of any employees of Seller who accept employment with Buyer
at or after the Effective Time as described in this Section 2.1(o), including
any obligation or liability under Section 4980B of the Code or Sections 601
through 608 of ERISA, (ii) any pension, profit sharing, deferred compensation,
retirement, stock option, bonus, severance, medical, dental, life insurance,
accident, or other employee welfare benefit plan (within the meaning of Section
3(1) of ERISA) or employee pension benefit plan (within the meaning of Section
3(2) of ERISA) of Buyer, or (iii) any other type of employee benefit or
compensation plan, agreement, arrangement, practice or policy of Buyer.
(p) LABOR MATTERS. Seller does not have any collective
bargaining agreements with any labor union or organization representing
employees of Seller and are not currently negotiating with any labor union or
organization representing employees of Seller. There is no pending or, to the
best knowledge of Seller, threatened petition by employees of Seller or unions
seeking a representation election. Seller is in material compliance with all
applicable laws respecting employment and employment practices, benefit plans,
other terms and conditions of employment and wages and hours, and is not
engaged in any discriminatory act or unfair labor practice. There is no labor
strike, dispute, slow down or stoppage actually pending or, to the best
knowledge of Seller, threatened against or affecting Seller and no charge or
matters pending or threatened before any federal, state or local agencies
alleging patterns or practices of discrimination by Seller.
(q) TAXES. Seller shall have paid in full when due all
federal and state withholding taxes, unemployment taxes, social security taxes,
franchise taxes, payroll taxes, and any other applicable federal, state or
local taxes, including, but not limited to, any ad valorem, sales, gross
receipts of excise taxes, and all penalties and interest with respect thereto,
relating to the operations of Seller which were assessed, confirmed and/or
accrued prior to the Effective Time or shall have made provision therefor and
shall pay such taxes when due if such occurs after the
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Effective Time. There are no unpaid proposed assessments for any such taxes
pending against Seller.
(r) UTILITIES. There are available at the Real Property
water and sewer lines in operating condition which provide such utility
services to the Real Property sufficient for the operation of Seller's business
as presently conducted. There are available at the Real Property electrical
and telephone services sufficient for the operation of Seller's business as
presently conducted. There is no pending or, to the best knowledge of Seller,
threatened governmental or third party proceeding which would impair or result
in the termination of such utility availability, and all requisite governmental
permits, licenses and approvals for such utility services as are necessary for
the operation of Seller's business have been obtained.
(s) ENVIRONMENTAL MATTERS. None of the Real Property is
subject to any flood plain, wetland protection, coastal zone management,
historical preservation, wildlife conservation or other applicable land use
law, statute, ordinance, rule, regulation, policy, order or determination which
could prohibit or restrict the use and enjoyment of any of the Real Property as
presently utilized by Seller. Neither the Real Property nor Seller with
respect to the operations of its business are in violation or breach of, or
subject to any pending or, to the best knowledge of Seller, threatened
investigation, inquiry, notice or remedial order under, any applicable
governmental law, rule, regulation of order pertaining to health, safety or the
environment ("Applicable Environmental Laws") and no hazardous or toxic
substances as defined under Applicable Environmental Laws have been disposed or
otherwise released on or from or exist on the Real Property. Seller is not
aware that there are any leaks or has been any leakage from the one underground
storage tank located on the Real Property (the "Underground Storage Tank"), or
that the waste water being released from the Real Property does not presently
comply with Applicable Environmental Laws.
(t) "FOREIGN PERSON" STATUS. Seller is not a "foreign
person" which would subject Buyer to the withholding tax provisions of Section
1445 of the Code.
(u) CONSENTS. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement by Seller will not require any consent, approval, authorization,
order, declaration, filing or registration of or with any court, any federal,
state, or local governmental or regulatory authority, or any other person or
entity, other than those which have been, or by Closing will have been,
obtained and furnished to Buyer or which the parties have agreed not to seek to
obtain.
(v) NO VIOLATION. The execution, delivery and
performance of this Agreement and the consummation of the
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transactions contemplated by this Agreement (i) do not conflict with and will
not conflict with, or result or will result in a breach of, the Articles of
Incorporation or Bylaws of Seller, (ii) do not conflict with and will not
conflict with, or result or will result in a breach of, or constitute or will
constitute a default (or an event which, with or without notice or elapse of
time, or both, would constitute a default) under, or result or will result in a
creation of any lien or other encumbrance upon any of the Assets under, any of
the terms, conditions or provisions of any material agreement or other
instrument or obligation by which Seller is bound, and (iii) do not violate and
will not violate in any material respect any order, writ, injunction, decree,
statute, rule or regulation applicable to Seller or any of them or any of the
Assets.
(w) FINDER'S OR BROKER'S FEES. Seller is not nor will be
obligated for any finder's or broker's fee or commission in connection with
this Agreement or the transactions contemplated hereby.
(x) COMPLIANCE WITH LAWS. Seller has no knowledge of,
and have not received any notice of, any material violation of any federal,
state or local law, rule or regulation relating to Seller's business which has
not been cured.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to Seller as follows:
(a) ORGANIZATION AND STANDING. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full power and authority to own and operate its
properties and to carry on its business operations as presently being
conducted, and to execute, deliver and perform this Agreement and all other
documents, instruments and agreements contemplated or required by this
Agreement.
(b) POWER AND AUTHORITY. Buyer has the corporate power
and authority to execute and deliver and perform this Agreement and the
transactions and other documents contemplated hereby. Buyer has taken all
requisite corporate action necessary to authorize its execution, delivery and
performance of this Agreement and the transactions and other documents
contemplated hereby.
(c) ENFORCEABILITY. This Agreement constitutes, and the
other documents to be executed by Buyer at Closing hereunder shall constitute
when executed by Buyer, legal, valid and binding obligations of Buyer
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
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(d) CONSENTS. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement by Buyer will not require any consent, approval, authorization,
order, or declaration of any court, any federal, state, or local governmental
or regulatory authority, or any other person or entity, other than those which
have been, or by Closing will have been, obtained or which the parties have
agreed not to seek to obtain.
(e) NO VIOLATION. The execution, delivery and
performance of this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated by this Agreement, (i) do not conflict with and will
not conflict with, or result or will result in a breach of, the Certificate of
Incorporation or Bylaws of Buyer, (ii) do not conflict with and will not
conflict with, or result or will result in a breach of, or constitute or will
constitute a default (or an event which, with or without notice or elapse of
time, or both, would constitute a default) under any of the terms, conditions
or provisions of any material agreement or other instrument or obligation to
which Buyer is bound, and (iii) do not violate and will not violate in any
material respect any order, writ, injunction, decree, statute, rule or
regulation applicable to Buyer or any of its properties or assets other than
those which the parties have discussed.
ARTICLE III
CLOSING
3.1 DATE OF CLOSING. Closing hereunder (the "Closing") shall take
place simultaneously with the execution and delivery of this Agreement by the
parties. The Closing and the transfer of risk of loss with respect to the
Assets, and the legal transfer of the Assets, shall be effective as of 12:01
a.m., Dallas, Texas time on the date hereof (such effective time is herein
referred to as the "Effective Time"), and all income and expense attributable
to the ownership of the Assets and under the Contracts (measured on an accrual
basis) to the Effective Time shall be for the account of Seller and thereafter
for the account of Buyer.
3.2 ACTIONS BY SELLER. At the Closing:
(a) REAL PROPERTY DEED. Seller shall deliver to Buyer a
duly executed and acknowledged special warranty deed in the form of Exhibit B
attached hereto and incorporated herein by reference conveying good and
indefeasible title in fee simple to the Real Property, free and clear of any
and all liens, claims, encumbrances, conditions, easements, assessments and
restrictions except those, if any, expressly agreed to in writing by Buyer.
(b) NON-FOREIGN AFFIDAVIT. Seller shall execute and
deliver an affidavit in form and content reasonably satisfactory to Buyer and
the Title Company certifying that Seller is not a
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"foreign person" for purposes of Section 1445 of the Internal Revenue Code.
(c) XXXX OF SALE. Seller shall deliver to Buyer a duly
executed Xxxx of Sale in the form of Exhibit C attached hereto and incorporated
herein by reference conveying good and marketable title to all of the Personal
Property, Inventory, Customer List, Intellectual Property, Licenses, Prepaid
Expenses, Deposits and Other Property to Buyer, free and clear of any and all
liens, security interests, encumbrances, conditions and restrictions except as
expressly agreed to in writing by Buyer.
(d) ASSIGNMENT AND ASSUMPTION. Seller shall deliver to
Buyer a duly executed Assignment and Assumption Agreement in the form of
Exhibit D (the "Assignment and Assumption Agreement") attached hereto and
incorporated herein by reference conveying and assigning to Buyer all of
Seller's right, title and interest in and to the Contracts, free and clear of
any and all limitations, conditions, and restrictions except as may be approved
by Buyer in writing.
(e) NON-COMPETITION AGREEMENT. Seller shall deliver to
Buyer a duly executed counterpart of the Non-Competition Agreement.
(f) CERTIFICATES OF TITLE. Seller shall deliver to Buyer
the duly executed or endorsed originals of the Certificates of Title and other
documents required by applicable law to transfer to Buyer the rolling stock and
vehicles purchased by Buyer as part of the Assets hereunder.
(g) OPINION OF COUNSEL. Seller shall deliver to Buyer an
opinion of Block & Xxxxxxxx, counsel to Seller, dated the date of Closing, in
form and substance reasonably satisfactory to Buyer and its counsel with
respect to certain of the matters set forth in Sections 2.1(a), (b) and (c)
hereof.
(h) POSSESSION. Seller shall deliver to Buyer possession
of the Assets.
(i) NAME CHANGE. In furtherance of Buyer's purchase of
the name "Acadia Dairy, Inc." hereunder, Seller shall deliver to Buyer duly
executed original Articles of Amendment to the Articles of Incorporation of
Seller in form sufficient for filing with the Louisiana Secretary of State to
change the name of Seller to delete any reference to "Acadia Dairy", together
with a check payable to the Louisiana Secretary of State in the applicable
amount for the required filing fee. Buyer is hereby authorized to file such
Articles of Amendment with the Louisiana Secretary of State.
(j) OTHER AGREEMENTS. Seller shall perform or shall
have performed all of the covenants and agreements contained in this Agreement
to be performed or complied with by Seller at or prior to the Closing
hereunder.
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3.3 ACTIONS BY BUYER. At the Closing, Buyer shall:
(a) PAYMENT. Pay the amount due at Closing pursuant to
Section 1.4(a)(i) hereof, by bank cashiers check of immediately available funds
as provided in Section 1.4(a)(i).
(b) ASSIGNMENT AND ASSUMPTION. Deliver to Seller a duly
executed counterpart of the Assignment and Assumption Agreement.
(c) NON-COMPETITION AGREEMENT. Deliver to Seller a duly
executed counterpart of the Non-Competition Agreement.
(d) LETTER OF CREDIT. Cause to be issued and
delivered to Seller the duly executed Letter of Credit.
(e) OPINION OF COUNSEL. Deliver to Seller an opinion of
Xxxxxxxxxxx & Price, L.L.P., counsel to Buyer, dated the date of Closing, in
form and substance reasonably satisfactory to Seller and its counsel with
respect to certain of the matters set forth in Sections 2.2(a), (b) and (c)
hereof.
(f) OTHER AGREEMENTS. Perform or shall have performed
all of the covenants and agreements contained in this Agreement to be performed
or complied with by Buyer at or prior to the Closing hereunder.
ARTICLE IV
POST CLOSING AGREEMENTS AND COVENANTS
4.1 INDEMNITY.
(a) SELLER. Seller agrees to defend, indemnify and hold
Buyer and its successors and assigns harmless from, against, and in respect of,
any loss, damage, liability, claim, demand, and expense (including, without
limitation, reasonable attorney's fees, costs, and expenses) of any kind
whatsoever arising out of or resulting from:
(i) Any material misrepresentation, breach of
warranty, or failure to fulfill any agreement or covenant of
Seller under this Agreement or under any other agreement or
document delivered by Seller at Closing hereunder.
(ii) Any and all liabilities of Seller of any
nature which existed, had been incurred, or arise out of any
transaction or any state of facts existing prior to the
Effective Time hereunder, including, without limitation,
liabilities arising prior to the Effective Time under the
Contracts, third party claims or causes of action, taxes,
indebtedness, liabilities to employees as provided
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in Section 2.1(o) or other loss resulting directly or
indirectly from the assertion of claims against Seller by any
governmental authority or agency or any other person or
entity, whether such liability may be direct or indirect,
accrued, absolute, contingent, or otherwise; except solely for
the contractual liabilities expressly assumed by Buyer at
Closing pursuant to this Agreement.
(iii) Any other matter with respect to which
Seller has agreed, either in this Agreement or in any document
or agreement executed and delivered by Seller pursuant to this
Agreement, to provide indemnity to Buyer.
(iv) Any and all liability or losses resulting
from or arising out of any noncompliance with requirements of
any bulk sales or bulk transfer laws applicable to the
transactions contemplated hereby.
(v) Any and all actions, suits, proceedings,
demands, assessments, judgments, costs and legal and other
expenses incident to the foregoing.
(b) BUYER. Buyer agrees to defend, indemnify and hold
Seller and its successors and assigns harmless from, against, and in respect
of, any loss, damage, liability, claim, demand, or expense (including, without
limitation, reasonable attorney's fees, costs and expenses) of any kind
whatsoever arising out of or resulting from:
(i) Any misrepresentation, breach of warranty, or
failure to fulfill any agreement or covenant of Buyer under
this Agreement or under any other agreement or document
delivered by Buyer at Closing hereunder.
(ii) Any and all contractual liabilities of Seller
which Buyer has expressly assumed at Closing pursuant to this
Agreement.
(iii) Any liability arising out of Buyer's use of
the Assets after the Effective Time.
(iv) Any and all actions, suits, proceedings,
demands, assessments, judgments, costs, and legal and other
expenses incident to any of the foregoing.
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(c) INDEMNITY PROCEDURES. In case any claim, demand or
action shall be brought against any party entitled to indemnity under Section
4.1(a) or 4.1(b) above, such party shall promptly notify the other party from
whom indemnity is sought in writing and the indemnifying party shall assume the
defense thereof, including the employment of counsel. In addition, in case any
party shall become aware of any facts which might result in any such claim,
demand or action, such party shall promptly notify the other party from whom
indemnity might be sought with respect thereto, which shall have the right to
take such action as it may deem appropriate to resolve such matter. The
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless the
employment of such counsel has been specifically authorized by the
indemnifying party. The indemnifying party shall not be liable for any
settlement of any action effected without its consent, but if settled with the
consent of the indemnifying party or if there be a final judgment for the
plaintiff in any such action, the indemnifying party shall indemnify and hold
harmless the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
4.2 ENVIRONMENTAL SURVEY. During the one hundred twenty (120)
day period immediately following Closing, Buyer may conduct such environmental
surveys or audits of the Real Property as it deems necessary, including,
without limitation, an assessment of the Underground Storage Tank, in order to
determine if there has been any violation of Applicable Environmental Laws
affecting the Real Property or any disposal or release of hazardous or toxic
substances on or from or existing on the Real Property. In the event that
during such one hundred twenty (120) day period, Buyer discovers any such
violation of Applicable Environmental Laws or the existence of hazardous or
toxic substances released on or from or existing on the Real Property, or Buyer
determines that there has been leakage from the Underground Storage Tank, that
repairs are reasonably necessary to prevent leakage therefrom, or the
Underground Storage Tank must be removed, Buyer shall promptly notify Seller of
such facts. As soon as practicable thereafter, Buyer shall consult with Seller
and the parties shall mutually agree upon an environmental cleanup firm
(Seller's agreement shall not be unreasonably withheld) to perform any
environmental cleanup or remedial work reasonably necessary on the Real
Property. Buyer shall submit all invoices for such remedial work to Seller and
Seller hereby agrees that it shall be responsible for and shall timely pay all
of such invoices. In the event that Seller fails to promptly pay any of such
invoices, then Buyer may elect to pay such invoices and be entitled to set off
such amounts in the manner permitted by Section 4.3 hereof.
4.3 SETOFF RIGHTS. Notwithstanding anything in this Agreement to
the contrary, Buyer shall be entitled to set off against the amounts payable by
it under Section 1.4(a)(ii) hereof the amount of
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all losses, damages, liabilities, costs or expenses incurred by Buyer (i) for
which Buyer is entitled to indemnity from Seller pursuant to Section 4.1
hereof, (ii) which Seller has agreed to pay but failed to do so pursuant to
Section 4.2 hereof, and (iii) as a result of Seller's failure to timely pay its
obligations under Section 4.4(a) hereof (such setoff to be made against Buyer's
payment obligations in such order and manner as Buyer, in its sole discretion,
may select). Such rights of setoff shall be cumulative of all rights of
indemnity under this Agreement and all other rights provided by applicable law;
provided, however, that nothing contained herein shall grant to Buyer in the
event of default in its payment obligations contained in Section 1.4(a)(ii)
hereof, any right to enjoin payment to Seller under the Letter of Credit
provided for herein.
4.4 ACCOUNTS PAYABLE; ACCOUNTS RECEIVABLE; ADDITIONAL PRORATIONS.
(a) ACCOUNTS PAYABLE. Except for those obligations under
the Contracts expressly assumed by Buyer at Closing, Seller will pay in a
timely manner all bills, accounts payable, notes payable, obligations,
indebtedness (including, without limitation, federal, state and local taxes)
and other liabilities of Seller due, accrued or incurred for the period prior
to the Effective Time. In the event that Seller's failure to promptly pay any
such obligations shall result in a material interference with Buyer's business
in Buyer's reasonable judgment, then Buyer shall give notice thereof to Seller
and, within ten (10) days following receipt of such notice, Seller shall either
(i) pay the particular obligations or (ii) notify Buyer in good faith that the
particular obligation is in dispute. If Seller fails to either pay the
obligation or notify Buyer that the obligation is in dispute and immediately
proceed to resolve the dispute, then Buyer may (i) pay such obligation, in
which case the amount so paid plus interest from the date of payment at the
fixed rate of four percent (4%) over the prime rate as established by
NationsBank of Texas, N.A., Dallas, Texas at the date of payment (or, if less,
the maximum lawful rate of interest under applicable law) ("Interest") shall be
immediately due from Seller, (ii) pay such obligation, in which case Buyer may
set off, in accordance with Section 4.3 hereof, the amount so paid plus
Interest against the amounts payable by Buyer pursuant to Section 1.4(a)(ii)
hereof, or (iii) exercise any other remedy available to Buyer hereunder or
under applicable law.
(b) ACCOUNTS RECEIVABLE. The accounts receivable of
Seller accrued, whether or not billed, as of the Effective Time shall be the
property of Seller. Seller shall be responsible for the billing and collection
of such accounts receivable and shall be entitled to exercise any and all of
its remedies, whether at law, in equity or pursuant to any agreement with any
obligor, against any obligor owing accounts receivable to Seller. The parties
hereby agree that for the ninety (90) day period immediately following the
Closing, Seller shall have the right to use the name
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"Acadia Dairy" and related logos only in connection with the billing and
collection of accounts receivable of Seller pursuant to this Section 4.4(b).
After the termination of such ninety (90) day period, Seller shall no longer
use such name or any of the other Intellectual Property in connection with the
billing or collection of accounts receivable or conducting, directly or
indirectly, any dairy business in the State of Louisiana. Buyer shall promptly
forward to Seller any payments received by Buyer from obligors owing money to
Seller for products sold or services rendered by Seller prior to the Effective
Time. Buyer shall not be obligated to take any action other than forwarding of
amounts received which are owed to Seller with respect to any accounts
receivable of Seller. Seller shall promptly forward to Buyer any payments
received by Seller from obligors owing money to Buyer for products sold or
services rendered by Buyer after the Effective Time.
(c) ADDITIONAL PRORATIONS. To the extent not prorated at
Closing pursuant to Section 1.4(c), (i) utility costs, property taxes and other
revenues and expenses with respect to the Assets and the Contracts shall be
prorated between Seller and Buyer as soon as reasonably practicable as of the
Effective Time, and (ii) settlement of such items shall occur within five (5)
business days after receipt of a request therefor accompanied by evidence that
such proration and payment is required hereunder.
4.5 BOOKS AND RECORDS AFTER THE CLOSING. During the three year
period immediately following Closing, all books and records of Seller with
respect to the period prior to the Effective Time, including without
limitation, all records relating to the Assets and operations of Seller, shall
be kept at the Real Property where the same are currently located for use by
Buyer in its business. During the three year period immediately after Closing,
Seller shall have the right from time to time to examine and copy, at its
expense, upon reasonable prior request during normal business hours, such books
and records with respect to the period prior to the Effective Time.
Thereafter, Seller shall keep such books and records for an additional three
year period, during which time Buyer shall have the right from time to time to
examine and copy, at its expense, and upon request during normal business
hours, such books and records.
4.6 BROKERAGE. Seller on the one hand, and Buyer, on the other,
hereby agree each with the other that they shall indemnify and hold the other
party harmless of and from any and all liability, including attorneys' fees and
other expenses, arising out of any claim for any broker's or finder's fee or
commission or any similar charge in connection with the transactions
contemplated and provided for in this Agreement, so far as such claim arises by
reason of services alleged to have been rendered to or at the instance of such
party.
4.7 FURTHER ACTS AND ASSURANCES. Seller shall from time to time
at and after the Closing, upon request of Buyer, take any
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reasonable steps necessary to vest in Buyer possession and ownership of the
Assets in accordance with the terms of this Agreement, and will do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged and
delivered, any reasonable further acts, deeds, assignments, transfers,
conveyances, and assurances as may be reasonably required for the transferring
and confirming to Buyer, its successors and assigns, the ownership and
possession of any or all of the Assets in accordance with terms of this
Agreement.
ARTICLE V
MISCELLANEOUS
5.1 NOTICES. All notices, claims, or demands required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or
mailed to the other party, properly addressed, certified or registered mail,
postage prepaid, return receipt requested, addressed as follows:
(a) IF TO SELLER:
Acadia Dairy, Inc.
0000 Xx. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
With a copy to:
Block & Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Xx., Esq.
(b) IF TO BUYER:
Schepps-Foremost, Inc.
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx, Chairman of the Board
With a copy to:
Xxxxxxxxxxx & Price, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Hand delivered notices shall be deemed delivered on the date the same are
delivered by hand, and mailed notices shall be deemed delivered on the date
mailed in accordance with the foregoing provisions of this Section 5.1. A
party may change the address for
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notices to be sent to it by written notice delivered pursuant to the terms of
this Section 5.1.
5.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in any agreement, certificate, instrument, schedule, exhibit or
document delivered at or prior to Closing by or on behalf of any of the parties
hereto pursuant to this Agreement and the transactions contemplated hereby
shall be deemed representations and warranties by the delivering party
hereunder. All representations, warranties and agreements set forth herein or
pursuant hereto shall survive the consummation of this Agreement until the
fourth (4th) anniversary date of this Agreement with the same force and effect
as if made at the Effective Time, and shall be deemed to be material and to
have been relied upon by the parties hereto, notwithstanding any investigation
or inspection heretofore or hereafter made by or on behalf of any of such
parties.
5.3 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to the subject matter
hereof. No terms, conditions, warranties, other than those contained herein,
and no amendments or modifications hereto shall be valid unless made in writing
and signed by the parties hereto.
5.4 BINDING EFFECT/ASSIGNABILITY. This Agreement shall extend to and
be binding upon and inure to the benefit of the parties hereto, their
respective heirs, legal representatives, successors and permitted assigns.
Seller shall not be entitled to assign this Agreement in whole or in part.
Buyer shall have the right at any time to assign this Agreement in whole or in
part without the prior consent of any party hereto.
5.5 FULL COOPERATION. From time to time after the Effective Time,
Seller and Buyer shall cooperate and take such action, including the execution
of such other documents, as may be necessary to fully consummate the
transactions contemplated hereby, and as may be reasonably requested in order
to carry out the provisions and purposes of this Agreement.
5.6 INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provisions shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof with the remaining
provisions remaining in full force and effect and not affected by the illegal,
invalid or unenforceable provision or by severance herefrom.
5.7 HEADINGS/CAPTIONS. The captions to sections and subsections of
this Agreement have been inserted solely for convenience and reference, and
shall not control or effect the
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meaning or construction of any of the provisions of this Agreement.
5.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same agreement.
5.9 COMMUNICATIONS. Seller and Buyer agree that they will prepare
and issue a mutual agreeable press release or other announcement with respect
to the transactions contemplated hereby.
5.10 WAIVER. The failure of any party to insist, in any one or more
instances, on performance of any of the terms and conditions of this Agreement
shall not be construed as a waiver or relinquishment of any rights granted
hereunder or of the future performance of any such term, covenant or condition,
but the obligations of the parties with respect thereto shall continue in full
force and effect.
5.11 GOVERNING LAW. THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.
* * * * *
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SIGNATURE PAGE TO ASSET PURCHASE AND SALE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
SELLER:
ACADIA DAIRY, INC.
BY:/s/
------------------------------------
ITS:
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BUYER:
XXXXXXX-FOREMOST, INC.
BY:/s/
------------------------------------
ITS:
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