ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the “Agreement”), dated June 1, 20__ (the
“Effective Date”), is entered into by and among ACME, LLC, a North Carolina limited liability
company (“Purchaser”), GLAMORGAN, INC. a North Carolina corporation d/b/a SUNSET
GRILL (the “Seller”), JAMES TAYLOR an individual resident of North Carolina (the
“Shareholder”), and VAN MORRISON, an individual resident of North Carolina as signatory
hereto solely for purposes of Section 8.18 of this Agreement (“Morrison”).
RECITALS:
WHEREAS, the Shareholder owns one hundred percent (100%) of the issued and
outstanding capital stock of the Seller;
WHEREAS, the Seller is the sole owner and operator of Sunset Grill, an independent
restaurant (the “Business”) located at 8 Eagle Street, Asheville, North Carolina, 28801(the
“Premises”);
WHEREAS, Purchaser desires to acquire, and the Seller desires to sell, transfer, assign
and convey to Purchaser all of the Purchased Assets (as defined herein) utilized in its Business,
subject to the conditions set forth in this Agreement;
WHEREAS, the Shareholder and the board of directors of the Seller being fully
informed in the premises have determined that it is advisable and in the Shareholder’s best
interests that the Seller sell, and Purchaser acquire the Purchased Assets (as hereinafter defined)
upon the terms and subject to the conditions set forth herein; and
WHEREAS, as an inducement for purchaser to consummate the transactions
contemplated hereby (the “Transaction”), the Seller and Shareholder desire to make certain
reasonable and limited representations, warranties, covenants and agreements to the Purchaser
regarding the financial condition, operations and prospects of the Business as specifically set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements hereinafter set forth, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto and Morrison,
intending to be legally bound, do hereby agree as follows:
ARTICLE I
Purchase and Sale of Assets
Section 1.1 Purchase and Sale of Assets.
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(a) Upon the terms and subject to the conditions of this Agreement, effective
as of the Effective Date, the Seller shall sell, assign, convey, transfer and deliver to Purchaser,
and Purchaser shall purchase and acquire from Seller, all of the Seller's right, title and interest in
and to the properties, contracts, rights and other assets owned or leased (subject to the terms of
those leases) by the Seller and utilized in the Business, wherever located and whether or not
reflected on the books and records of the Seller as the same shall exist on the Closing Date (all of
these properties, contracts, rights and other assets, are collectively referred to herein as, the
“Purchased Assets”). Without limiting the generality of the foregoing, the Purchased Assets shall
include:
(i) all of Seller's inventory, including without limitation, all
inventories, dry goods, wet goods, perishables, beverages, beer, wine, merchandise and all other
vendor purchased inventories, together with all return privileges, and warranties, held for resale
and/or supplies, as at the date of the Closing as set forth on Schedule 1.1(a)(i) attached hereto
and made a part hereof (collectively, the “Inventory”);
(ii) all databases which are used or useful in the operation of the
Business and all related computer software;
(iii) all of the Seller's goodwill relating specifically to the Business;
(iv) all of the Seller’s right, title and interest in and to all telephone and
facsimile numbers, e-mail addresses and designations or sites on the World Wide Web relating in
any way to the Business including, without limitation, all of those listed on Schedule 1.1(iv)
attached hereto and made a part hereof;
(v) all tangible personal property owned or used by the Seller in the
Business including, without limitation, computer hardware and the software installed thereon and
all related license agreements, tools, equipment, special tooling and equipment, furniture and
fixtures, consumable supplies, leasehold improvements, telephone equipment, all artifacts, all
artwork, and other tangible assets, together with any transferable manufacturer or vendor
warranties related thereto, a list of which is attached hereto as Schedule 1.1(v) and made a part
hereof;
(vi) all permits, licenses, consents, approvals and other authorizations
required from any Governmental Authority or other Persons in connection with the operation of
the Business and used by the Seller to conduct the Business, a list of which is attached to this
Agreement as Schedule 1.1(vi);
(vii) All rights to the name “Sunset Grill” and any derivative or form
thereof and any fictitious names related to the Business, and brand names, tradestyles and logos,
tradedress, artwork, decorations, lighting fixtures, and any interests thereunder, inventions,
processes and know-how, restrictive covenants, licenses, and all other intangible rights not
otherwise identified in this Agreement and related specifically to the Business;
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(viii) all exiting lists of the Seller’s former and current customer and
prospect lists and lists of contacts, distributors, suppliers, service providers and repair trade
people ;
(ix) all books, records and other data relating to the Business,
employees and operations of the Business including, without limitation, the last thirty (30)
months of “Quickbooks” Program used by Seller or its agents in the operation of the Business
and containing any and all financial information compiled during the immediately preceding
thirty (30) month period by Seller or its agents accurately reflecting in all respects the financial
performance of the Business during said period backed up on compact disks;
(x) any and all of the software, source code, documentation, manual
and computer processes which the Seller owns or has a license to use, including without
limitation, all proprietary software, a list of which is attached as Schedule 1.1(x);
(xi) all advertising of the Business in all media used by the Business
including, without limitation, Yellow Pages, newspapers, and local flyers, which related
contracts are listed on Schedule 1.1(xi) attached hereto and made a part hereof (“Advertising
Contracts”) ;
(xii) all fire safety equipment;
(xiii) all menus, recipes and any and all derivations thereof and rights
thereto;
(xiv) Seller’s leasehold interest in that certain Ecolab dishwasher lease
(the “Equipment Lease”);
(xv) any and all customer deposits in the possession of, or under the
control of Seller on the Closing Date; and
(xvi) all other property rights of every kind and nature, tangible or
intangible, owned or leased by the Seller and used in the operation of, or relating to the Business.
(b) Upon the terms and conditions contained in this Agreement, on the
Closing Date, Seller shall deliver to Purchaser (i) one or more bills of sale and assignments
conveying in the aggregate all of the Purchased Assets free and clear of all liens, claims and
encumbrances (“Bill of Sale”), (ii) an assignment to Purchaser of all transferable licenses,
warranties, guaranties and equipment leases and an assumption of same by Purchaser pursuant to
the terms hereunder, (iii) an assignment to Purchaser of Seller’s telephone and telecopier
numbers, (iv) possession of Premises to Purchaser, (v) such other instruments as shall be
reasonably requested by Purchaser to vest in Purchaser title in and to the Purchased Assets free
and clear of all liens, claims and encumbrances (“Other Conveyance Instruments”), (vi) copies of
all resolutions of Seller authorizing the Transaction, and (vii) an assignment to Purchaser of all
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Advertising Contracts approved by Purchaser, if any. In addition Seller, Shareholder and
Purchaser each agree to execute and deliver such further documents and to take such further
actions as shall be necessary to complete the Transaction. Any and all Purchased Assets shall be
subject to inspection and acceptance by the Purchaser in its sole discretion prior to the Closing
Date.
Section 1.2 Excluded Assets. There shall be excluded from the Purchased Assets to be
transferred and conveyed hereunder, and Seller shall retain all of its right, title and interest in and
to, the following assets (collectively, the “Excluded Assets”):
(a) cash and cash equivalents held by Seller, including without limitation,
bank accounts, certificates of deposit, treasury bills, securities, money market accounts, mutual
funds and repurchase agreements;
(b) all prepaid deposits by Seller to third-parties for the benefit of Seller,
which shall be retained by the Seller;
(c) any Inventory not purchased by Purchaser;
(d) all items of personal property set forth on Schedule 1.2(d) attached hereto
and made a part hereof, if any;
(e) the minute books of Seller and similar corporate records of Seller;
(f) all consideration to be delivered by Purchaser to Seller in connection with
the transactions that are the subject of this Agreement; and
(g) any and all automobiles leased and/or owned by Seller.
ARTICLE II
Purchase Price; No Assumed Obligations
Section 2.1 The Purchase Price. Upon the terms and subject to the conditions of this
Agreement, the parties agree that the aggregate purchase price (the “Purchase Price”) for the
Purchased Assets shall be Seven Hundred Eighty Five Thousand Dollars ($1.785,000.00).
Section 2.2 Inventory Adjustment. The Purchaser and Seller hereby agree to resolve
any and all issues relating to purchase and sale of Inventory hereunder on or before the Closing
Date.
Section 2.3 Payment of Purchase Price. At Closing, Purchaser shall deliver the
Purchase Price into escrow, with Lawyer & Lawyer, PC serving as Escrow Agent, in cash by wire
transfer of immediately available funds (the “Closing Payment”). The Closing Payment will be held
in an interest bearing account by Escrow Agent, with the interest accruing to the Seller. The
Closing Payment shall be released from escrow to Seller in cash by wire transfer of immediately
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available funds to the account designated by Seller in Exhibit A attached hereto, immediately
upon the earlier of: (a) such time as the Purchaser has procured any and all licenses required by
the State of North Carolina and any other governmental authority or agency to dispense beer and
wine from the Premises (it is agreed that the Purchaser will use its best efforts to have all on site
inspections required to transfer the necessary beer and wine licenses completed on or before
May 22, 20__; or (b) that date certain thirty (30) days from the Closing Date.
Section 2.4 Assumed Obligations. Except for the Equipment Lease obligations
and the Advertising Contract obligations, if any (collectively, the “Assumed Liabilities”),
Purchaser shall not assume, guarantee, agree to perform or otherwise be bound by, or be
responsible or otherwise liable for, any liability or obligation of any nature of the Seller (whether
or not related to the Purchased Assets), or claims for such liability or obligation, whether
accrued, matured or unmatured, liquidated or unliquidated, fixed or contingent, known or
unknown. Specifically, and without limiting the generality of the foregoing, Purchaser shall not
have any liability or obligation with respect to or arising out of: (a) acts or omissions of the
Seller, or agents or employees of the Seller, whether prior to or subsequent to the Closing Date,
and whether or not in the ordinary course of Business; (b) employee related liabilities of any type
or kind occurring prior to the Closing Date, including accrued wages, vacation pay, employee-
related insurance or deferred compensation claimed by any person in connection with his or her
employment by, or termination of employment with, the Seller, and payroll taxes and liabilities;
(c) liabilities or obligations of the Seller, including those for attorneys’ fees, arising out of any
litigation or other proceeding in connection with the Purchased Assets or the Business, or any
claim, whether or not asserted and whether or not liquidated or contingent, with respect to the
Purchased Assets or the Business arising (i) prior to the Closing Date, and (ii) from acts or the
failure to take any action by the Seller, or any of their respective agents or employees; (d)
liabilities for any income or other Taxes (as defined herein), whether disputed or not, attributable
to the Seller; and (e) any other liability or obligations of the Seller incurred prior to the Closing
Date. All of Seller’s accounts payable accruing prior to the Closing Date shall remain the sole
responsibility of Seller.
Section 2.5 Allocation of the Purchase Price. The Purchaser and Seller hereby agree
that the entire Purchase Price shall be allocated as set forth on Exhibit B attached hereto and
made a part hereof (the “Allocation”). The parties hereby agree that the Allocation shall be
properly reflected in any filing with United States Internal Revenue Service (“IRS”), including,
without limitation, Form 8594 with the IRS.
Section 2.6 Certain Prorations. The Closing Payment shall be adjusted to reflect a
proration of Taxes, levies, assessments, insurance, permit and fees (to the extent assignable), and
other expenses paid, and costs incurred, prior to the Closing; Seller’s reimbursement to Purchaser
for any and all pre-closing liabilities of Seller paid by Purchaser on Seller’s behalf; and all other
adjustments required under this Agreement, including the Inventory Adjustment, if any. The
parties acknowledge and agree that the Seller shall be entitled to receive all revenues associated
with, and shall be responsible for paying all liabilities and obligations relating to, the operation of
the Purchased Assets and the Business arising prior to the Closing Date and Purchaser shall be
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entitled to receive all revenues associated with, and shall be responsible for paying all liabilities
and obligations relating to, the operation of the Purchased Assets and the Business arising on and
after the Closing Date. Accordingly, the Seller and Purchaser shall prorate all of such revenues
and expenses relating to the operation of the Purchased Assets and the Business through the
Closing Date. At Closing, each party shall pay or credit to the other party the sums required to
effectuate the prorations and adjustments contemplated by the provisions of this Section 2.6. If
final figures have not been calculated on any of the adjustments, prorations or reimbursements as
of the Closing Date, then the parties hereto shall close this Transaction using estimated
adjustments, prorations and reimbursements which shall be subject to later readjustment when
such final figures have been calculated. The parties hereto shall seek to determine the amounts
of all prorations, adjustments and reimbursements required hereunder on or before the Closing, if
possible, and no later than thirty (30) days following the Closing Date.
Section 2.7 Conditions Precedent to the Consummation of this Transaction. The
obligation of Purchaser to consummate this Transaction is subject to the satisfaction (or, to the
extent legally permissible, waiver) of the following conditions: (a) the Purchaser or its Affiliate
shall have consummated the purchase of the Premises from Seller’s Affiliate, XYZ Partners,
LLC, a North Carolina limited liability company on or before the Closing Date; (b) there shall
not be pending any suit, proceeding, or investigation challenging or seeking to restrain or prohibit
the consummation of the Transaction, (c) the Purchaser shall have received all consents, waivers
and approvals required in connection with the consummation of the Transaction, except those
consents, waivers, or approvals the failure to obtain of which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the Seller, the Business or
any of the Purchased Assets; (d) there shall not have occurred any event or change since the date
of the Agreement that has had or could reasonably be expected to have a material adverse effect
on the Seller, the Business or any of the Purchased Assets, (e) the Purchaser shall have procured
any and all licenses, permits or Authorizations (as defined herein) necessary to conduct the
Business as historically conducted on or before the Closing Date, excluding any alcohol
dispensing license from the State of North Carolina, and (f) the representations and warranties
made by the Seller and Shareholder herein shall be true and correct in all respects on the Closing
Date.
ARTICLE III
Closing
Section 3.1 Closing. The closing of the Transaction (the “Closing”) shall occur at the
offices Lawyer and Lawyer, PC (“Lawyer”), 11 Market Street, Asheville, North Carolina 28801,
by overnight courier or at such other location as determined by Purchaser, no later than June 1,
20__, or such other date as mutually agreed upon by the parties. The date which the Closing
occurs is hereinafter referred to as the “Closing Date.” Except as otherwise provided herein, all
proceedings to be taken and all documents to be executed at the Closing shall be deemed to have
been taken, delivered and executed simultaneously, and no proceeding shall be deemed taken,
nor documents deemed executed or delivered until all have been taken, delivered and executed.
Section 3.2 Subsequent Actions. If, during a reasonable time following the Closing
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Date, Purchaser shall reasonably be advised by counsel that any bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in Purchaser its right, title or interest in, to or under any of the Purchased
Assets or Business or otherwise to carry out the Transaction, the Seller shall execute and deliver
all such bills of sale, assignments and assurances and shall take and do all such other actions and
things as may be reasonably necessary to vest, perfect or confirm any and all right, title and
interest in, to and under the Purchased Assets or Business or otherwise to consummate the
Transaction.
Section 3.3 Closing Deliveries.
(a) Seller’s Deliveries. Seller shall deliver to Purchaser the following items and
documents at the Closing:
(i) Seller shall duly execute and deliver the Bill of Sale and all Other
Conveyance Instruments to Purchaser;
(ii) Seller shall deliver its duly executed counterpart to the Assignment
and Assumption Agreement regarding the Equipment Lease;
(iii) Seller shall deliver to Purchaser a certified copy of the resolutions
adopted by the Seller’s sole Shareholder and board of directors authorizing the
execution, delivery and performance of this Agreement and the consummation of
all of the Transaction and an incumbency certificate duly certified by the Secretary
of the Seller;
(iv) Seller shall deliver to Purchaser the books and records of the Seller
relating to the Purchased Assets and the Business;
(v) Seller shall deliver to Purchaser a Certificate of Good Standing
certified by the Secretary of State of North Carolina;
(vii) Seller shall assist in the transfer and the assignment of the
trademark relating to the name “Sunset Grill” from Seller to Purchaser from the
United States Patent and Trademark Office; and all fees and cost associated with
such transfer/assignment will be the sole responsibility of the Purchaser; and
(viii) Seller shall deliver such other agreements and documents as
Purchaser may reasonably request.
(b) Purchaser’s Deliveries. Purchaser shall deliver to Seller the following items and
documents at the Closing:
(i) Purchaser shall deliver the Closing Payment in escrow to Van
Winkle;
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(ii) Purchaser shall deliver its duly executed counterpart to the
Assignment and Assumption Agreement;
(iii) Purchaser shall deliver to the Seller a certified copy of the
resolutions adopted by Purchaser’s Managing Member authorizing the execution,
delivery and performance of this Agreement and the consummation of the
Transaction and an incumbency certificate duly certified by the Managing
Member of Purchaser;
(v) Purchaser shall deliver to Seller a Certificate of Good Standing
certified by the Secretary of State of North Carolina; and
(vi) Purchaser shall deliver to Seller such other agreements and
documents as Purchaser or its counsel may reasonably request.
ARTICLE IV
Representations and Warranties of the Seller and Shareholder
In order to induce Purchaser to enter into this Agreement and to consummate the
Transaction, each of the Seller and the Shareholder, jointly and severally, hereby makes the
following representations and warranties, each of which is relied upon by Purchaser regardless of
any other action, omission to act, investigation made or information obtained by Purchaser:
Section 4.1 Organization, Power and Authority of the Seller. The Seller is a
corporation duly organized, validly exiting and in good standing under the laws of the State of
North Carolina and the Seller has the requisite corporate power and authority to own or lease its
properties and to carry on its Business as it is now being conducted. If applicable, the Seller is
duly qualified as a foreign corporation and is in good standing under the laws of each other
jurisdiction in which the conduct of its business or the ownership of its assets requires such
qualification, except where the failure to qualify would not result in a material adverse effect on
the Seller. The Shareholder is the legal and beneficial owner of one hundred percent (100%) of
the issued and outstanding capital stock of the Seller.
Section 4.2 Due Authorization; Binding Obligation. The Seller and the Shareholder
have the requisite capacity, power and authority to enter into this Agreement and to consummate
the Transaction. This Agreement has been duly and validly executed and delivered by the Seller
and the Shareholder and is the legal, valid and binding obligation of the Seller and the
Shareholder, enforceable against each of them in accordance with its terms. Except for any
corporate action required by the Seller, and any consents contemplated herein, no other action on
the part of any Person is necessary to authorize this Agreement or for the consummation of the
Transaction. The Seller and Shareholder have duly executed this Agreement and authorized the
execution of this Agreement and the consummation of the Transaction as required under the
North Carolina Business Corporation Act. Neither the execution and delivery of this Agreement
nor the consummation of the Transaction will: (a) conflict with or violate any provision of the
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Seller's Articles of Incorporation or By-laws, or any law, ordinance or regulation or any decree or
order of any court or administrative or other governmental body which is either applicable to,
binding upon or enforceable against the Seller; (b) result in any material breach of or default
under any lease Equipment Lease, material mortgage, other contract, agreement, indenture, will,
trust or other instrument which is either binding upon or enforceable against the Seller,
Shareholder or any of the Purchased Assets; (c) result in any breach of or default under any
contract with any supplier, vendor, broker, agent or any other party; (d) violate any legally
protected right of any individual or entity or give to any individual or entity a right or claim
against the Seller or Shareholder; or (e) impair or in any way limit any material governmental or
official license, approval, permit or authorization of the Seller to conduct its Business.
Section 4.3 Financial Statements. Attached to this Agreement as Schedule 4.3 are
true, correct and complete copies of the Seller's: (a) financial statements for the years ended
December 31, 20__, 200__ and 20__ and the related statements of earnings and changes in
financial position for the twelve (12) month period then ended; and (b) financial statements for
the period ended April 30, 20__ (the “Balance Sheet Date”) and the related statements of
earnings and changes in financial position for the four (4) month period then ended ((a) and (b)
are collectively referred to herein as, the "Financial Statements"). The Financial Statements (w)
have been prepared as consistently prepared during the immediately preceding thirty-six (36)
month period; (x) are true, complete and correct in all respects; (y) fairly and accurately present
the financial condition of the Seller as of their respective dates and results of its operations for
the periods ending on their respective dates; and (z) do not include or omit to state any fact, the
inclusion or omission of which renders those Financial Statements in any way misleading.
Section 4.4 No Undisclosed Liabilities. The Seller has no liabilities or obligations
relating to the Business (whether secured, unsecured, absolute, accrued, asserted or unasserted,
contingent or otherwise) of any nature, whether as principal, agent, partner, co-venturer,
guarantor or in any other capacity except: (a) the liabilities and obligations of the Seller that are
reflected in the Financial Statements and only to the extent reflected; (b) liabilities incurred or
accrued in the ordinary course of Business since the date of the Financial Statements which do
not, either individually or in the aggregate, have a material adverse effect on the financial
condition or prospects of the Seller; or (c) liabilities otherwise disclosed on Schedule 4.4
attached hereto and made a part hereof.
Section 4.5 Licenses; Compliance. The Seller, to the best of its knowledge, possesses
all licenses and other required governmental or official approvals, permits, consents and
authorizations, the failure of which to possess would have a material adverse effect on the
Business, financial condition, operations or results of operations of the Seller (collectively the
“Authorizations”). Seller, to the best of its knowledge, is in compliance with: (a) the terms of
all Authorizations; (b) all laws, ordinances, statutes and regulations; and (c) all judgments,
orders, rulings or other decisions of any governmental or other regulatory authority, court or
arbitrator having jurisdiction over the Seller. Except as set forth on Schedule 4.5 attached hereto
and made a part hereof, neither the execution, delivery or performance of this Agreement nor the
consummation of the Transaction will affect the validity of any Authorizations and the same
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shall remain in full force and effect upon the consummation of the Transaction, except for
Authorizations which by their terms are not transferable.
Section 4.6 Governmental Consents and Approvals. No approval, consent or
authorization of or filing or registration with any governmental or other regulatory authority is
required by the Seller for the execution, delivery or performance of this Agreement or for the
consummation of the Transaction.
Section 4.7 Litigation, Orders and Decrees. There are no actions, suits, claims,
governmental investigations or arbitration proceedings (collectively, “Litigation”), pending or to
the best of the Seller's and the Shareholder’s knowledge, threatened against or affecting the Seller
or the Business or any of the Purchased Assets, and there are no facts or circumstances which are
reasonably likely to create a basis for any of the foregoing. The Seller and the Shareholder are
not aware of any outstanding orders, decrees or stipulations issued by any local, state or federal
judicial authority in any proceeding to which the Seller is or was a party which may have a
material adverse effect on the Seller, the Business or any of the Purchased Assets.
Section 4.8 Equipment Leases. Seller has provided Purchaser with a true and
complete copy of the Equipment Lease. The Seller enjoys peaceful and undisturbed possession
of the Ecolab Dishwasher, and the Equipment Lease is the valid and legally binding obligations
of the Seller and the respective lessors, enforceable against the Seller and the respective lessors
in accordance with their respective terms, and is in full force and effect. The Seller has not
received written notice of default under the Equipment Lease and the Seller is not in default of
the Equipment Lease.
Section 4.9 Title to Purchased Assets. The Seller has good, clear and marketable and
title to all of the Purchased Assets, tangible or intangible. Except as disclosed on Schedule 4.9
attached hereto and made a part hereof, all of the Seller's assets are free and clear of restrictions
on or conditions to transfer or assignment, and are free and clear of any mortgage, lien, charge,
encumbrance, security interest or other restrictions.
Section 4.10 Material Contracts. Schedule 4.10 attached hereto sets forth a complete true
and correct list of each of the following types of contracts or commitments (whether oral or
written) to which the Seller is a party and which obligates or commits the Seller to expend Three
Thousand Five Hundred Dollars ($3,500.00) or more in any single year (collectively, the “Seller
Contracts”): (a) the Seller Contracts for the employment of any officer or employee and all
bonus, incentive compensation, profit-sharing, retirement, pension, group insurance, death
benefit or other fringe benefit plans, deferred compensation or post-termination obligations; (b)
the Seller Contracts for the future purchase of materials, inventory, supplies, services or
equipment; (c) agreements or arrangements for the purchase, sale or lease of any other assets; (d)
pledges, sales contracts, leases, security agreements or other similar agreements with respect to
the Business or properties; (e) Equipment Leases; (f) loan agreements, promissory notes,
guarantees, subordination or similar type agreements; (g) consulting agreements; and, (h) any
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contract not otherwise covered by clauses (a) through (g) above which involves annual or
aggregate payments in excess of Ten Thousand Dollars ($10,000.00). The Seller or Shareholders
have furnished to Purchaser true, complete and accurate copies of all the Seller Contracts. The
Seller has performed all of the obligations required to be performed by it to date under the Seller
Contracts and is not in default (with notice or lapse of time or both) under any of the Seller
Contracts. The Seller shall obtain all necessary consents with respect to the assignment and
assumption of any Seller Contract requiring consent on or prior to the Closing Date, including,
without limitation the Lease or the Equipment Leases. Except as otherwise provided in this
Agreement, the consummation of the Transaction will not materially affect the continuation,
validity or effectiveness of any of the Seller Contracts.
Section 4.11 Environmental Matters.
(a) Neither Seller nor its predecessors has, within the five (5) years preceding the date
hereof, through the date hereof, received from any federal, state or local governmental body,
agency, authority or entity, or any other Person, any written notice, demand, citation, summons,
complaint or order, or any written notice of any penalty, lien or assessment, and no investigation
or review is pending by any governmental entity, with respect to any (i) alleged violation by
Seller or any of its predecessors of any Environmental Law (as defined in subsection (e) below);
(ii) alleged failure by Seller or its predecessors to have any environmental permit, certificate,
license, approval, registration or authorization required pursuant to any Environmental Law in
connection with the conduct of its Business; or (iii) alleged illegal Regulated Activity (as defined
in subsection (e) below) by Seller; and there is no basis for any such notice, demand, citation,
summons, complaint, order, investigation or review with respect to (i)-(iii) hereof.
(b) Neither Seller nor its predecessors has used, transported, disposed of, or arranged
for the disposal of (as those terms are defined in and construed under the Comprehensive
Environmental Response, Compensation and Liability Act) any Hazardous Substance (as defined
herein) in a manner that would be reasonably likely to give rise to any Environmental Liabilities
(as defined in subsection (e) below) for Seller under any applicable Environmental Law. Neither
Seller nor, to the best of Seller’s and the Shareholder’s knowledge, its predecessors has engaged
in any activity, or failed to undertake any activity, which action or failure to act has given, or
would reasonably be likely to give, rise to any Environmental Liabilities or enforcement action
by any federal, state or local regulatory agency or authority, or has resulted, or would reasonably
be likely to result, in any fine or penalty imposed pursuant to any Environmental Law, and there
is no basis for any such Environmental Liability or enforcement action. To the best of Seller’s
and Shareholder’s knowledge, there is no known presence of asbestos in or on the Premises. To
the best of Seller’s and Shareholder’s knowledge, there is no friable asbestos in or on the
Premises.
(c) No soil or water in or under any assets currently or formerly held for use or sale by
Seller is or has been contaminated by any Hazardous Substance while such assets or premises
were owned, leased, operated or managed, directly or indirectly by Seller, or to the best of
Seller’s and the Shareholder’s knowledge, by its predecessors.
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(d) There have been no environmental audits or other similar reports which have been
prepared by, for or concerning the Seller or its predecessors within the five (5) years preceding
the date hereof through the date hereof with respect to any real property now or previously owned
or leased by Seller or its predecessors.
(e) For the purposes of this Section 4.11, the following terms have the following
meanings:
“Environmental Laws” shall mean any domestic, federal, state or local
laws, ordinances, codes, regulations, rules, policies and orders (including without
limitation, Medical Waste Laws) that are intended to assure the protection of the
environment, or that classify, regulate, call for the remediation of, require
reporting with respect to, or list or define air, water, groundwater, solid waste,
hazardous, toxic, or radioactive substances, materials, wastes, pollutants or
contaminants, or which are intended to assure the safety of employees, workers or
other persons, including the public in each case as in effect on the date hereof.
“Environmental Liabilities” shall mean all liabilities of Seller, whether
contingent or fixed, which (a) have arisen, or would reasonably be likely to arise,
under Environmental Laws, and (b) relate to actions occurring or conditions exi
prior to the date hereof or the Closing Date.
“Hazardous Substances” shall mean any toxic or hazardous substances,
material or waste, including Medical Waste, or any pollutant or contaminant, or
infectious or radioactive substance or material, including without limitation those
substances, materials and wastes defined in or regulated under any Environmental
Laws.
“Regulated Activity” shall mean any generation, treatment, storage, recycling,
transportation, disposal or release of any Hazardous Substances.
Section 4.12 Labor Matters. The Seller is not a party to any collective bargaining
agreements with its employees. The Seller, to the best of its knowledge, is in compliance with all
federal, state and local laws regarding employment and employment practices, conditions of
employment, wages and hours and occupational laws, the violation of which would have a
materially adverse effect on the Seller. The Seller is not engaged in unfair labor practices, and
there are no unfair labor practice complaints pending or threatened against the Seller before the
National Labor Relations Board or any other governmental or regulatory board or agency
performing similar functions. There is no labor strike, slowdown, work stoppage or dispute
pending or threatened against or involving the Seller. To the best of the Seller's and
Shareholder’s knowledge, none of the Seller's employees are engaged in organizing or are
members of any union or other employee group that is seeking recognition as a bargaining unit.
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Section 4.13 Absence of Changes. Except as set forth on Schedule 4.13 attached hereto
and made a part hereof, since December 31, 20__, there has not been: (a) any material adverse
change in the financial condition, assets, liabilities, Business, operations or prospects of the
Seller; (b) any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the properties, financial condition or Business of the Seller; (c) any change in
the outstanding capital stock of the Seller; (d) declared, paid or set aside for payment any
dividend or other distribution (whether in cash, stock, property or any combination thereof) in
respect of the Seller's common stock or any cancellation, exercise or redemption or other
acquisition by the Seller of any shares of the Seller's capital stock; (e) any increase in the rate or
terms of compensation payable or to become payable by the Seller to any of its officers, directors
or key employees or any increase in the rate or terms of contribution to any employee benefit
plans, except as required by law; (f) any liabilities or obligations incurred or agreed to be
incurred (whether absolute, accrued, contingent or otherwise), except as incurred in the ordinary
course of Business consistent with past practices; (g) any material capital expenditure or
commitment for replacements or additions or improvements; (h) any change by the Seller in its
accounting methods, principles or practices; or (i) any disposal, mortgage, pledge or other
disposition of any of its assets other than in the ordinary course of Business.
Section 4.14 Accuracy of Documents, Exhibits and Schedules. All contracts,
instruments, agreements and other documents delivered by the Seller or Shareholder to Purchaser
for Purchaser’s review in connection with this Agreement and the Transaction, including,
without limit