EXHIBIT 4(i)(6)
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") is executed and entered into
the 27th day of February 1998, by and between ▇▇▇▇▇ VENTURES, INC., a Delaware
corporation ("▇▇▇▇▇"), and GOURMET REGENCY COFFEE COMPANY, a Minnesota
corporation ("Gourmet");
WITNESSETH:
WHEREAS, Gourmet is in the business of roasting and distributing coffee
and other specialty products in Minnesota and Wisconsin; and
WHEREAS, the respective Boards of Directors of ▇▇▇▇▇ and Gourmet deem
it advisable and in the best interests of each corporation that ▇▇▇▇▇ acquire
Gourmet pursuant to this Agreement and the applicable provisions of the laws of
the States of Delaware and Minnesota: and
WHEREAS, the Boards of Directors of ▇▇▇▇▇ and Gourmet have approved and
adopted this Agreement, subject to approval of at least eighty percent (80%) of
the outstanding shares of both ▇▇▇▇▇ and Gourmet; and
WHEREAS, following the consummation of the transaction contemplated
herein, ▇▇▇▇▇ will own one hundred percent (100%) of the issued and outstanding
shares of Gourmet.
NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto and the mutual benefits to be gained by the performance hereof, the
parties hereto agree as follows:
ARTICLE I.
THE EXCHANGE
1.1) The Exchange. On the Effective Date, and subject to the terms and
conditions contained in this Agreement, each of the non-dissenting shareholders
of Gourmet shall sell, assign, transfer, convey and deliver to ▇▇▇▇▇, free and
clear of any liens, claims and encumbrances and ▇▇▇▇▇ shall purchase, accept and
acquire from each of the non-dissenting shareholders of Gourmet, the Gourmet
Stock. In consideration of the Gourmet Stock purchased from the shareholders of
Gourmet, ▇▇▇▇▇ shall deliver to each of the non-dissenting shareholders of
Gourmet, certificates representing one (1) share of ▇▇▇▇▇ Stock for every one
(1) share of Gourmet Stock owned by the non-dissenting shareholders of Gourmet.
1.2) Instruments of Transfer. On the Effective Date, Gourmet shall
deliver to ▇▇▇▇▇ stock certificates representing the Gourmet Stock owned by the
shareholders of Gourmet who do not dissent from the approval and adoption of
this Agreement at the duly called meeting of the
shareholders of Gourmet plus a duly executed Assignment Separate from
Certificate in proper form to transfer to ▇▇▇▇▇ good and marketable title to the
Gourmet Stock owned by such shareholder. Thereafter, ▇▇▇▇▇ shall deliver to the
shareholders of Gourmet, stock certificates representing the shares of ▇▇▇▇▇
Stock to which the shareholders of Gourmet are entitled.
1.3) Articles of Exchange. On the Effective Date, the parties hereto
will cause the Articles of Exchange attached hereto as Schedule 1.3 (the
"Articles of Exchange") to be signed, verified and delivered to the Minnesota
Secretary of State. On the Effective Date, ▇▇▇▇▇ will own one hundred percent
(100%) of the issued and outstanding shares of Gourmet.
1.4) Restated Certificate of Incorporation and Restated Bylaws.
Promptly after the Effective Date, the Restated Certificate of Incorporation
attached hereto as Schedule 1.4 will be signed, verified and delivered to the
Delaware Secretary of State by the appropriate officer of ▇▇▇▇▇ and shall become
the Certificate of Incorporation of ▇▇▇▇▇ until otherwise changed as provided by
law. In addition, the Restated Bylaws attached hereto as Schedule 1.4 shall be
signed by the appropriate officer of ▇▇▇▇▇ and shall become the Bylaws of ▇▇▇▇▇
until they shall thereafter be duly amended.
1.5) Board of Directors. On the Effective Date, and thereafter until
otherwise changed as provided by law, the Board of Directors of ▇▇▇▇▇ shall
consist of three (3) members who shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
1.6) Stock Option Plan and Stock Options. Promptly after the Effective
Date, the Gourmet Regency Coffee Company Incentive Stock Option Plan attached
hereto as Schedule 1.5 shall be assumed and adopted by ▇▇▇▇▇. In addition, each
option granted (whether or not exercisable or exercised and whether or not
granted pursuant to the Gourmet Regency Coffee Company Incentive Stock Option
Plan) to a current or former employee, director or independent contractor of
Gourmet shall be assumed by ▇▇▇▇▇ and shall thereafter be deemed to constitute
an option to purchase ▇▇▇▇▇ Stock on the same terms and conditions as were
applicable under such options.
1.7) Warrants. Promptly after the Effective Date, the warrants issued
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ to each purchase up to eighteen
thousand seven hundred and fifty (18,750) shares of Gourmet Stock, dated
February 26, 1997, shall be assumed by ▇▇▇▇▇ in accordance with the provisions
of such warrants and shall thereafter be deemed to constitute warrants to
purchase, on the same terms and conditions as were applicable under such
warrants, the same number of ▇▇▇▇▇ Stock and at an exercise price to be
determined in accordance with the provisions of such warrants.
1.8) Closing. Unless the parties hereto agree otherwise, and subject to
the satisfaction of all of the conditions to closing set forth in Articles V and
VI, the execution of the Agreement by ▇▇▇▇▇ shall take place at the offices of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇. The execution of this Agreement by Gourmet shall take place at the
offices of Larkin, Hoffman, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd., 1500 Norwest Financial
Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ within
forty-eight (48) hours after the receipt of the executed Agreement from ▇▇▇▇▇ by
Larkin, Hoffman, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd. (the "Closing"). The date on which the
Closing occurs shall be referred to as the "Closing Date." The effective date
(the "Effective Date") of the transactions contemplated herein shall
be the day ▇▇▇▇▇ receives Letters of Transmittal and reconfirmation from the 419
Shareholders, substantially in the form of Schedule 4.1, owning at least eighty
percent (80%) of the 419 shares reconfirming their investment in ▇▇▇▇▇ Stock.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇
▇▇▇▇▇ represents and warrants that the statements contained in this
Article II are correct and complete as of the Closing Date and Effective Date
and shall survive the Closing. Neither such survival nor the liability of any
party with respect to the party's representations and warranties shall be
reduced by any investigation made at any time by or on behalf of any party.
2.1) Organization. ▇▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Except as
provided on Schedule 2.1, ▇▇▇▇▇ is now, and has been at all times since its
creation, duly authorized, qualified and licensed under all laws, regulations,
ordinances and orders of public authorities to carry on its business in the
places and in the manner as conducted at the time such activities were
conducted. Copies of Lloyd's Certificate of Incorporation (certified by the
Secretary of State of Delaware) and Bylaws (certified by the Secretary of
▇▇▇▇▇), as amended, are attached hereto as Schedule 2.1.
2.2) Authority. Except for approval of the ▇▇▇▇▇ shareholders all
action by ▇▇▇▇▇ necessary to approve the transactions contemplated by this
Agreement has been taken. Except for the Post Effective Amendment, applicable
"blue sky" laws applying to the Gourmet shareholder, and requirements under the
applicable laws of the States of Delaware and Minnesota, ▇▇▇▇▇ does not need to
give any notice to, or make any filing with, or obtain the authorization,
consent or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
2.3) Stock Ownership. Attached as Schedule 2.3 is a complete and
accurate list of all the shareholders of ▇▇▇▇▇ as of the date of this Agreement.
All of the issued and outstanding shares of ▇▇▇▇▇ are owned of record by such
shareholders. This Agreement is the valid and binding obligation of ▇▇▇▇▇ and is
enforceable against it in accordance with its terms.
2.4) Capitalization. The authorized capital stock of ▇▇▇▇▇ consists
solely of Thirty-Five Million (35,000,000) shares of voting common stock, $.001
par value ("▇▇▇▇▇ Stock"), of which, on the Closing Date, two million two
hundred and fifty-seven thousand (2,257,000) shares are issued and outstanding.
On the Effective Date, and upon effectuating a one-for-five reverse stock split,
there shall be four hundred and fifty-one thousand four hundred (451,400) shares
issued and outstanding. All of the issued and outstanding shares of ▇▇▇▇▇ Stock
have been or, as of the Effective Date, will be, duly authorized and validly
issued, are fully paid and nonassessable, were offered, issued, sold and
delivered by ▇▇▇▇▇ in compliance with all applicable state and federal laws
concerning the issuance of securities and none of such shares were issued
pursuant to awards, grants or bonuses nor in violation of the preemptive rights
of any past or present shareholder. The stock transfer records provided by ▇▇▇▇▇
to Gourmet correctly set forth all issuances, acquisitions and retirements of
▇▇▇▇▇ Stock since its inception. Except as contemplated by Rule 419 ("Rule 419")
as promulgated by the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and this Agreement, no subscriptions, options, warrants, puts, calls,
conversion rights or other commitments of any kind exist which obligates ▇▇▇▇▇
to issue any of its authorized but unissued capital stock or otherwise relate to
the sale or transfer by ▇▇▇▇▇ of any securities of ▇▇▇▇▇ (whether debt or
equity). In addition, ▇▇▇▇▇ has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its equity securities or any
interests therein or to pay any dividend or make any distribution in respect
thereof. Except for the securities registered by ▇▇▇▇▇ by the filing of a
registration statement with the SEC on Form SB-2 (the "Form SB-2 Registration"),
▇▇▇▇▇ has not agreed to register any securities under the Act, or under any
state securities law.
2.5) Predecessor Entities. ▇▇▇▇▇ has never directly or indirectly
participated in any manner in any joint venture, partnership or other
noncorporate entity. ▇▇▇▇▇ has never conducted any other business or activity.
Set forth on Schedule 2.5 is a list of the names of all predecessors of ▇▇▇▇▇,
and all trade names and "doing business as" names of ▇▇▇▇▇, including the names
of any entities substantially all of the assets of which were previously
acquired by ▇▇▇▇▇.
2.6) No Subsidiaries. ▇▇▇▇▇ has never owned or controlled and does not
now own or control, directly or indirectly, any capital stock, securities
convertible into capital stock or any other equity interest in any corporation.
2.7) Financial Statements. Attached hereto as Schedule 2.7 is a true,
complete and correct copy of the financial statements, and all footnotes
thereto, of ▇▇▇▇▇ which include Balance Sheets as of December 31, 1997 and
December 31, 1996 and a statement of income, cash flow and retained earnings for
the years then ended ("▇▇▇▇▇ Financial Statement"). The ▇▇▇▇▇ Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated and
are true, complete and correct. Each of the balance sheets present fairly, in
all material respects, the financial condition of ▇▇▇▇▇ as of the date indicated
thereon and each of the statements of income referred to above presents fairly,
on an accrual basis and in all material respects, the results of the operations
of ▇▇▇▇▇ for the periods indicated thereon. All reserves for contingent risks
have been estimated in accordance with generally accepted accounting principles
and are appropriate and sufficient to cover all costs reasonably expected to be
incurred from such risks. Except as set forth on Schedule 2.7, since December
31, 1997, ▇▇▇▇▇ has not (a) made any material change in its accounting policies
or (b) effected any prior period adjustment to, or other restatement of, its
financial statements for any period.
2.8) Accounts Receivable. Attached as Schedule 2.8 is a complete and
accurate list of all accounts and notes receivable of ▇▇▇▇▇ as of December 31,
1997, including receivables from and advances to employees and also including
all such accounts and notes receivable which are not reflected in the ▇▇▇▇▇
Financial Statement.
2.9) Absence of Undisclosed Liabilities. ▇▇▇▇▇ has no debt, liability,
or obligation of any nature, whether accrued, absolute, contingent, or
otherwise, and whether due or to become due, that is not reflected or reserved
against in the most recent balance sheet included in the ▇▇▇▇▇ Financial
Statement, or on Schedule 2.9, except for those that may have been incurred
after the
date of that balance sheet and in the ordinary course of business or in
connection with this transaction. All debts, liabilities, and obligations
incurred after that date were incurred in the ordinary course of business, and
are usual and normal in amount both individually and in the aggregate.
2.10) Inventory. ▇▇▇▇▇ has no inventory of raw materials, work in
process or finished goods.
2.11) Proprietary Rights. Attached as Schedule 2.11 is a complete and
accurate list and summary description as of the date hereof of all permits,
titles (including motor vehicle titles and current registrations), fuel permits,
licenses, franchises and certificates, owned or held by ▇▇▇▇▇. None of such
permits, titles, licenses, franchises and certificates, have been claimed to or,
to the knowledge of ▇▇▇▇▇, infringe on the rights of others, and all of which
are now valid, in good standing and in full force and effect. In addition, ▇▇▇▇▇
has, as of the date of this Agreement, made available to Gourmet for its
inspection, all presently held records, correspondence, reports, notifications,
permits, pending permit applications, licenses and pending license applications,
environmental impact studies, assessments and audits and all notifications from
governmental agencies and any other person or entity and all other documents of
▇▇▇▇▇.
2.12) Personal Property. Attached as Schedule 2.12 is a complete and
accurate list and a complete description as of the date hereof of all personal
property of ▇▇▇▇▇ (excluding individual pieces of personal property valued at
less than $500), including true and correct copies of leases for equipment and
other personal property used in the operation of ▇▇▇▇▇. ▇▇▇▇▇ has good title to,
or a valid leasehold interest in, the properties and assets used by it (other
than real property) as shown on ▇▇▇▇▇ Financial Statements or acquired after the
date thereof free and clear of all security interests, liens or other claims.
2.13) Contracts. Attached as Schedule 2.13 is a complete and accurate
list as of the date hereof of all of the contracts, commitments and other
agreements to which ▇▇▇▇▇ is a party or by which ▇▇▇▇▇ is bound. Such list shall
include, but not be limited to, joint venture or partnership agreements,
contracts or collective bargaining arrangements with any labor organizations,
loan agreements, powers of attorney, indemnity or guaranty agreements, bonds,
mortgages, options to purchase land, liens, pledges or other security
agreements, agreements for the employment of any individual, agreements under
which ▇▇▇▇▇ has advanced or loaned any amount to any employee, officer or
director of ▇▇▇▇▇. Such list shall also include any guaranties by ▇▇▇▇▇, any
agreement concerning confidentiality, nonsolicitation or noncompetition and any
other agreement under which the consequences of a default or termination could
have an adverse effect on the business, financial condition, operations or
prospects of ▇▇▇▇▇. None of the agreements listed on Schedule 2.13 have been
modified, altered, terminated or otherwise amended and there have been no
waivers, oral agreements, representations or other statements with relation to
any such agreements. ▇▇▇▇▇ has complied with the obligations pertaining to it
contained in such contracts, commitments and other agreements, are not in
default thereunder and no notice of default has been received nor will the
consummation of the transactions contemplated by this Agreement result in such a
default. To the best knowledge of ▇▇▇▇▇, there is no default by any other party
to any contract, commitment or other agreement attached as Schedule 2.13 or
event which, upon the
giving of notice or passage of time, or both, would constitute a default. There
are no outstanding powers of attorney executed on behalf of ▇▇▇▇▇.
2.14) Personnel. Schedule 2.14 contains a complete and accurate list of
all employees, officers and directors of ▇▇▇▇▇, and the rate of compensation of
each, as of the date hereof. Each of the employees of ▇▇▇▇▇ is an employee at
will.
2.15) Employee Plans. ▇▇▇▇▇ has never, or currently does, maintain or
contribute to any employee benefit plans, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended, whether or not
any such employee benefit plans are otherwise exempt from the provisions of the
Employee Retirement Income Security Act of 1974.
2.16) Labor Relations/Employees. There is no unfair labor practice
complaint pending against ▇▇▇▇▇ before the National Labor Relations Board or any
similar public agency. There is no labor strike, dispute, slowdown, stoppage or
other labor difficulty pending or, to the knowledge of ▇▇▇▇▇, threatened against
or affecting or involving ▇▇▇▇▇. To the best of Lloyd's knowledge, ▇▇▇▇▇ is not
in violation of any employment related law, rule or regulation.
2.17) Compliance with Law. Except for Lloyd's periodic reporting
requirements under the Securities Exchange Act of 1934, to the best of Lloyd's
knowledge, ▇▇▇▇▇ has complied in all material respects, with all applicable
federal, state or local statues, laws, and regulations.
2.18) No Breach or Violation. The execution, delivery and performance
of this Agreement, the consummation of any transactions herein referred to or
contemplated hereby and the fulfillment of the terms hereof and thereof will
not:
(a) conflict with, or result in a breach or violation of the
Certificate of Incorporation or Bylaws of ▇▇▇▇▇;
(b) To the best knowledge of ▇▇▇▇▇, conflict with, or result in a
breach under any document, agreement or other instrument to which ▇▇▇▇▇
is a party, or result in the creation or imposition of any lien, charge
or encumbrance on any properties of ▇▇▇▇▇;
(c) To the best knowledge of ▇▇▇▇▇, result in the termination or any
impairment of any permit, license, franchise, contractual right or
other authorization of ▇▇▇▇▇; or
(d) Except as may be required by Rule 419 and the applicable laws of
the States of Delaware and Minnesota, require the consent of, or the
filing with, any governmental authority or agency or any other third
party.
2.19) Taxes. Except as provided on Schedule 2.19, ▇▇▇▇▇ has filed all
requisite federal, state, local and other tax returns due for all fiscal periods
ended on or before the Closing Date. There are no agreements to extend the
statutory period for the assessment of any taxes, examinations in progress or
claims against ▇▇▇▇▇ for federal, state, local and other taxes (including
penalties and interest) for any period or periods prior to and including the
Closing Date and no notice of any claim, whether pending or threatened, for
taxes has been received. The amounts shown as accruals for taxes on the ▇▇▇▇▇
Financial Statements are sufficient in accordance with generally accepted
accounting principles as of such respective dates for the payment of all taxes
of
the kinds indicated (including penalties and interest) for all fiscal periods
ended on or before such date. ▇▇▇▇▇ currently utilizes the accrual method of
accounting for income tax purposes and has not changed its method of accounting
since its initial creation.
2.20) Litigation. To the best knowledge of ▇▇▇▇▇, there is no claim,
litigation, action, suit or proceeding, investigation, formal arbitration,
informal arbitration or mediation, administrative, judicial or otherwise,
pending or threatened against ▇▇▇▇▇, or otherwise directly relating to the
business or affairs of ▇▇▇▇▇, at law or in equity, before any federal, state or
local court or regulatory agency, or other governmental or private authority, no
written notice of any of the above has been received by ▇▇▇▇▇ and no facts or
circumstances exist which would give rise to any of the foregoing. In addition,
there are no instances where ▇▇▇▇▇ is the plaintiff, or complaining or moving
party, under any of the above types of proceedings or otherwise.
2.21) Absence of Changes. Except as set forth on Schedule 2.21, since
the date of the ▇▇▇▇▇ Financial Statements attached hereto, there has not been
any:
(a) material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of
▇▇▇▇▇;
(b) damage, destruction or loss (whether or not covered by
insurance) which, singly or in the aggregate, materially and adversely
affects the properties (whether owned or leased) or business of ▇▇▇▇▇;
(c) change in the authorized capital of ▇▇▇▇▇ or in its
securities outstanding, any change in its equity ownership or any grant
by it of any subscriptions, options, warrants, puts, calls, conversion
rights or other commitments related to its equity interests;
(d) declaration or payment of any dividend or distribution in
respect of the capital stock of ▇▇▇▇▇ or any direct or indirect
redemption, purchase or other acquisition of any of the capital stock
of ▇▇▇▇▇;
(e) increase in the compensation, bonus, sales commissions or
fee arrangements payable or to become payable by ▇▇▇▇▇ to any of its
officers, directors, employees, consultants or agents;
(f) work interruption, labor grievance or claim filed;
(g) sale or transfer of, or any agreement to sell or transfer,
any material assets, property or rights of ▇▇▇▇▇ to any person not in
the ordinary course of the business of ▇▇▇▇▇;
(h) cancellation or agreement to cancel any indebtedness or
other obligation owing to ▇▇▇▇▇;
(i) plan, agreement or arrangement granting any preferential
right to purchase or acquire any interest in any of the assets,
property or rights of ▇▇▇▇▇ or requiring consent of any party to the
transfer and assignment of any such assets, property or rights;
(j) purchase or acquisition by any third party of, or any
agreement, plan or other arrangement by any third party to purchase or
acquire, any property, rights or assets of ▇▇▇▇▇ other than in the
ordinary course of business;
(k) waiver of any rights or claims of ▇▇▇▇▇;
(l) breach, amendment or termination of any material contract,
license, permit or other agreement to which ▇▇▇▇▇ is a party other than
in the ordinary course of business;
(m) transaction by ▇▇▇▇▇ outside the ordinary course of its
business;
(n) amendment to the Certificate of Incorporation or Bylaws of
▇▇▇▇▇;
(o) any other material occurrence, event, incident, action or
failure to act outside the ordinary course of business of ▇▇▇▇▇; or
(p) any action by ▇▇▇▇▇, or any employee, officer or agent of
▇▇▇▇▇, committing to do any of the foregoing.
2.22) Bank Accounts; Depositories. Attached as Schedule 2.22 is a
complete and accurate list as of the date of this Agreement, of:
(a) the name of each financial institution in which ▇▇▇▇▇ has
any account or safe deposit box;
(b) the names in which each account or box is held;
(c) the type of each account; and
(d) the name of each person authorized to draw on or have
access to each account or box.
2.23) Hazardous Materials; Disposal Sites. ▇▇▇▇▇ has never owned,
leased, had an interest in, generated, transported, handled, recycled,
reclaimed, disposed of, or contracted for the disposal of, hazardous materials,
hazardous wastes, hazardous substances, toxic wastes or substances, infectious
or medical waste, radioactive waste or sewage sludges as those terms are defined
by the Resource Conservation and Recovery Act of 1976; CERCLA; the Atomic Energy
Act of 1954; the Toxic Substances Control Act; the Occupational Health and
Safety Act; any comparable or similar Minnesota statute; any other applicable
law; or the rules and regulations promulgated under any of the foregoing, as
each of the foregoing may have been amended. ▇▇▇▇▇ has never owned, operated,
had an interest in, engaged in and/or leased a waste transfer, recycling,
treatment, storage or disposal facility, business or activity.
2.24) Title to Assets. ▇▇▇▇▇ has good and marketable title to all of
its properties and assets, including without limitation the assets reflected on
its balance sheets included in the ▇▇▇▇▇ Financial Statement. Except as
contemplated by Rule 419, all such properties and assets are not subject to any
mortgage, pledge, lien, charge, security interest, encumbrance, restriction,
lease, license assessment, liability or claim of any nature whatsoever, direct
or indirect, whether accrued, absolute, contingent or otherwise.
2.25) Intellectual Property. ▇▇▇▇▇ does not use any trademark,
servicemark, tradename, copyright or brand name in its business, nor does it own
any trademarks, trademark registrations or applications, trade names, service
marks, copyrights, copyright registrations or applications or brand names. No
person owns any trademark, tradename, trademark registration, or application,
servicemark, tradename, copyright, copyright registration or application, or
brand name, the use of which is necessary or contemplated in connection with the
performance of any contract, other than this Agreement, to which ▇▇▇▇▇ is a
party. ▇▇▇▇▇ does not infringe on the intellectual property rights of any third
party.
2.26) Corporate Documents. ▇▇▇▇▇ has furnished to Gourmet a true,
correct and complete copy of the following for examination:
(a) The Certificate of Incorporation and Bylaws of ▇▇▇▇▇ and any
amendments thereto;
(b) The minute book of ▇▇▇▇▇ containing all of the records required to
be set forth in such records including, but not limited to, all
proceedings, consents, actions and meetings of the shareholder and
Board of the Directors of ▇▇▇▇▇; and
(c) The stock transfer books of ▇▇▇▇▇ setting forth all transfers of
▇▇▇▇▇ Stock; and
(d) All other material data and information concerning the business,
finances and properties of ▇▇▇▇▇.
2.27) Complete Disclosure. To the best knowledge of ▇▇▇▇▇, this
Agreement and the schedules hereto and all other documents and information
furnished to Gourmet, or its representatives, pursuant hereto or pursuant to the
negotiation of this transaction or the investigations of Gourmet or the
employees or representatives of it, do not and will not include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading. If ▇▇▇▇▇ becomes aware of any fact or
circumstance which would change a representation or warranty of ▇▇▇▇▇ in this
Agreement, the party with such knowledge shall promptly give written notice of
such fact or circumstance to Gourmet. Neither such notification nor any
pre-Closing investigation made by Gourmet of ▇▇▇▇▇ or its properties, businesses
or assets, or the Closing contemplated by this Agreement shall relieve ▇▇▇▇▇ of
its obligations under this Agreement, including its representations and
warranties made in this Article II.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF GOURMET
Gourmet represents and warrants that the statements contained in this
Article III are correct and complete as of the Closing Date and Effective Date
and shall survive the Closing. Neither such survival nor the liability of any
party with respect to the party's representations and warranties shall be
reduced by any investigation made at any time by or on behalf of any party.
3.1) Organization. Gourmet is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota. Gourmet
is now, and has been at all times since its creation, duly authorized, qualified
and licensed under all laws, regulations, ordinances and orders of public
authorities to carry on its business in the places and in the manner as
conducted at the time such activities were conducted. Copies of Gourmet's
Articles of Incorporation (certified by the Secretary of State of Minnesota) and
Bylaws (certified by the Secretary of Gourmet), as amended, are attached hereto
as Schedule 3.1.
3.2) Authority. Except for approval of the Gourmet shareholders, all
action by Gourmet to approve the transactions contemplated by this Agreement has
been taken. Except for the Post Effective Amendment and requirements under the
applicable laws of the States of Delaware and Minnesota, Gourmet does not need
to give any notice to, or make any filing with, or obtain the authorization,
consent or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
3.3) Stock Ownership. Attached as Schedule 3.3 is a complete and
accurate list of all the shareholders of Gourmet as of the date of this
Agreement. All of the issued and outstanding shares of Gourmet are owned of
record by such shareholders. This Agreement is a valid and binding obligation of
Gourmet and enforceable against it in accordance with its terms.
3.4) Capitalization. The authorized capital stock of Gourmet consists
solely of Twelve Million Five Hundred Thousand (12,500,000) shares of voting
common stock, no par value ("Gourmet Stock"), of which Two Million Nine Hundred
and Ninety-Four Thousand Three Hundred Fifty (2,994,350) shares are issued and
outstanding. All of the issued and outstanding shares of Gourmet Stock have been
duly authorized and validly issued, are fully paid and nonassessable, were
offered, issued, sold and delivered by Gourmet in compliance with all applicable
state and federal laws concerning the issuance of securities and have not been
issued in violation of the preemptive rights of any past or present shareholder.
The stock transfer record provided by Gourmet to ▇▇▇▇▇ correctly sets forth all
issuances, acquisitions and retirements of Gourmet Stock since its inception.
Except as provided on Schedule 3.4, no subscriptions, options, warrants, puts,
calls, conversion rights or other commitments of any kind exist which obligates
Gourmet to issue any of its authorized but unissued capital stock or otherwise
relates to the sale or transfer by Gourmet of any securities of Gourmet (whether
debt or equity). In addition, Gourmet has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any distribution in
respect thereof.
3.5) Predecessor Entities. Except as set forth on Schedule 3.5, Gourmet
has never directly or indirectly participated in any manner in any joint
venture, partnership or other noncorporate entity. Gourmet was formed solely to
operate its current business and has never conducted any other business or
activity.
3.6) No Subsidiaries. Except as set forth on Schedule 3.6, Gourmet has
never owned or controlled and does not now own or control, directly or
indirectly, any capital stock, securities convertible into capital stock or any
other equity interest in any corporation.
3.7) Financial Statements. Attached hereto as Schedule 3.7 is a true,
complete and accurate copy of the financial statements, and all footnotes
thereto, of Gourmet which include Balance Sheet as of December 31, 1997 and
December 31, 1996 and a statement of income, cash flow and retained earnings for
the years then ended ("Gourmet Financial Statements"). The Gourmet Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated and
are true, complete and correct. Each of the balance sheets presents fairly, in
all material respects, the financial condition of Gourmet as of the date
indicated thereon and each of the statements of income referred to above
presents fairly, on an accrual basis and in all material respects, the results
of the operations of Gourmet for the periods indicated thereon. All reserves for
contingent risks have been estimated in accordance with generally accepted
accounting principles and are appropriate and sufficient to cover all costs
reasonably expected to be incurred from such risks. Since December 31, 1997,
Gourmet has not (a) made any material change in its accounting policies or (b)
effected any prior period adjustment to, or other restatement of, its financial
statements for any period.
3.8) Absence of Undisclosed Liabilities. To the best of Gourmet's
knowledge, Gourmet has no material debt, liability, or obligation of any nature,
whether accrued, absolute, contingent, or otherwise, and whether due or to
become due, that is not reflected or reserved against in the most recent balance
sheet included in the Gourmet Financial Statements except for those that may
have been incurred after the date of that balance sheet and in the ordinary
course of business or in connection with this transaction. All debts,
liabilities, and obligations incurred after that date were incurred in the
ordinary course of business, and are usual and normal in amount both
individually and in the aggregate.
3.9) Contracts. To the best of Gourmet's knowledge, Gourmet is in
compliance with all material terms of its contracts, commitments and other
agreements, is not in default thereunder and no notice of default has been
received nor will the consummation of the transactions contemplated by this
Agreement result in such a default.
3.10) Labor Relations/Employees. There is no unfair labor practice
complaint pending against Gourmet before the National Labor Relations Board or
any similar public agency. There is no labor strike, dispute, slowdown, stoppage
or other labor difficulty pending or, to the knowledge of Gourmet, threatened
against or affecting or involving Gourmet. To the best knowledge of Gourmet, it
is not in violation of any employment related law, rule or regulation.
3.11) Compliance with Law. To the best of Gourmet's knowledge, Gourmet
has complied, in all material respects, with all, and is not in violation of
any, applicable federal, state or local statues, laws, and regulations.
3.12) No Breach or Violation. The execution, delivery and performance
of this Agreement, the consummation of any transactions herein referred to or
contemplated hereby and the fulfillment of the terms hereof and thereof will
not:
(a) conflict with, or result in a breach or violation of the Articles
of Incorporation or Bylaws of Gourmet;
(b) To the best knowledge of Gourmet, conflict with, or result in a
breach under any document, agreement or other instrument to which
Gourmet is a party, or result in the creation or imposition of any
lien, charge or encumbrance on any properties of Gourmet;
(c) To the best knowledge of Gourmet, result in the termination or any
impairment of any permit, license, franchise, contractual right or
other authorization of Gourmet; or
(d) Except as may be required by Rule 419 and the applicable laws of
the States of Delaware and Minnesota, require the consent of, or the
filing with, any governmental authority or agency or any other third
party.
3.13) Taxes. Except as provided on Schedule 3.13, Gourmet has filed all
requisite federal, state, local and other tax returns due for all fiscal periods
ended on or before the Closing Date. There are no agreements to extend the
statutory period for the assessment of any taxes, examinations in progress or
claims against Gourmet for federal, state, local and other taxes (including
penalties and interest) for any period or periods prior to and including the
Closing Date and no notice of any claim, whether pending or threatened, for
taxes has been received. The amounts shown as accruals for taxes on the Gourmet
Financial Statements are sufficient in accordance with generally accepted
accounting principles as of such respective dates for the payment of all taxes
of the kinds indicated (including penalties and interest) for all fiscal periods
ended on or before such date. Gourmet currently utilizes the accrual method of
accounting for income tax purposes and has not changed its method of accounting
since its incorporation.
3.14) Litigation. Except as provided on Schedule 3.14, to the best
knowledge of Gourmet, there is no claim, litigation, action, suit or proceeding,
investigation, formal arbitration, informal arbitration or mediation,
administrative, judicial or otherwise, pending or threatened against Gourmet, or
otherwise directly relating to the business or affairs of Gourmet, at law or in
equity, before any federal, state or local court or regulatory agency, or other
governmental or private authority, no written notice of any of the above has
been received by Gourmet and no facts or circumstances exist which would give
rise to any of the foregoing. In addition, there are no instances where Gourmet
is the plaintiff, or complaining or moving party, under any of the above types
of proceedings or otherwise.
3.15) Hazardous Materials; Disposal Sites. Gourmet has never owned,
leased, had an interest in, generated, transported, handled, recycled,
reclaimed, disposed of, or contracted for the
disposal of, hazardous materials, hazardous wastes, hazardous substances, toxic
wastes or substances, infectious or medical waste, radioactive waste or sewage
sludges as those terms are defined by the Resource Conservation and Recovery Act
of 1976; CERCLA; the Atomic Energy Act of 1954; the Toxic Substances Control
Act; the Occupational Health and Safety Act; any comparable or similar Minnesota
statute; any other applicable law; or the rules and regulations promulgated
under any of the foregoing, as each of the foregoing may have been amended.
Gourmet has never owned, operated, had an interest in, engaged in and/or leased
a waste transfer, recycling, treatment, storage or disposal facility, business
or activity.
3.16) Intellectual Property. To the best of Gourmet's knowledge,
Gourmet does not use any trademark, copyright or brand name in its business that
infringes on the intellectual property rights of any third party.
3.17) Absence of Changes. Except as set forth on Schedule 3.17, since
the date of the Gourmet Financial Statements attached hereto, there has not been
any:
(a) material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of
Gourmet;
(b) damage, destruction or loss (whether or not covered by
insurance) which, singly or in the aggregate, materially and adversely
affects the properties (whether owned or leased) or business of
Gourmet;
(c) change in the authorized capital of Gourmet or in its
securities outstanding, any change in its equity ownership or any grant
by it of any subscriptions, options, warrants, puts, calls, conversion
rights or other commitments related to its equity interests;
(d) declaration or payment of any dividend or distribution in
respect of the capital stock of Gourmet or any direct or indirect
redemption, purchase or other acquisition of any of the capital stock
of Gourmet;
(e) increase in the compensation, bonus, sales commissions or
fee arrangements payable or to become payable by Gourmet to any of its
officers, directors, employees, consultants or agents;
(f) work interruption, labor grievance or claim filed;
(g) sale or transfer of, or any agreement to sell or transfer,
any material assets, property or rights of Gourmet to any person not in
the ordinary course of the business of Gourmet;
(h) cancellation or agreement to cancel any indebtedness or
other obligation owing to Gourmet;
(i) plan, agreement or arrangement granting any preferential
right to purchase or acquire any interest in any of the assets,
property or rights of Gourmet or requiring consent of any party to the
transfer and assignment of any such assets, property or rights;
(j) purchase or acquisition by any third party of, or any
agreement, plan or other arrangement by any third party to purchase or
acquire, any property, rights or assets of Gourmet other than in the
ordinary course of business;
(k) waiver of any rights or claims of Gourmet;
(l) breach, amendment or termination of any material contract,
license, permit or other agreement to which Gourmet is a party other
than in the ordinary course of business;
(m) transaction by Gourmet outside the ordinary course of its
business;
(n) amendment to the Articles of Incorporation or Bylaws of
Gourmet;
(o) any other material occurrence, event, incident, action or
failure to act outside the ordinary course of business of Gourmet; or
(p) any action by Gourmet, or any employee, officer or agent
of Gourmet, committing to do any of the foregoing.
3.18) Title to Assets. Gourmet has good and marketable title to all of
its properties and assets, including without limitation the assets reflected on
its balance sheets included in the Gourmet Financial Statements. Except as
provided on Schedule 3.18 and except as contemplated by Rule 419, all such
properties and assets are not subject to any mortgage, pledge, lien, charge,
security interest, encumbrance, restriction, lease, license assessment,
liability or claim of any nature whatsoever, direct or indirect, whether
accrued, absolute, contingent or otherwise.
3.19) Corporate Documents. Gourmet has furnished to ▇▇▇▇▇ a true,
correct and complete copy of the following for examination:
(a) The Articles of Incorporation and Bylaws of Gourmet and any
amendments thereto;
(b) The minute book of Gourmet containing all of the records required
to be set forth in such records including, but not limited to, all
proceedings, consents, actions and meetings of the shareholders and
Board of the Directors of Gourmet; and
(c) The stock transfer books of Gourmet setting forth all transfers of
Gourmet Stock.
3.20) Complete Disclosure. To the best knowledge of Gourmet, this
Agreement and the schedules hereto and all other documents and information
furnished to ▇▇▇▇▇, or its representatives, pursuant hereto or pursuant to the
negotiation of this transaction or the investigations of ▇▇▇▇▇ or the employees
or representatives of it, do not and will not include any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading. If Gourmet becomes aware of any
fact or circumstance which would change a representation or warranty of Gourmet
in this Agreement, the party with such knowledge shall promptly give written
notice of such fact or circumstance to ▇▇▇▇▇. Neither such notification nor any
pre-Closing investigation made by ▇▇▇▇▇ of Gourmet or its properties, businesses
or assets, or the Closing contemplated by this Agreement shall relieve Gourmet
of its obligations under this Agreement, including its representations and
warranties made in this Article III.
ARTICLE IV.
OBLIGATIONS AFTER CLOSING
4.1) Post Effective Amendment. Subject to review and approval by
Gourmet and its counsel, which may not be unreasonably delayed or withheld,
▇▇▇▇▇ shall:
(a) file with, and use its best efforts to cause to be declared
effective by the SEC, a post effective amendment (the "Post Effective
Amendment") amending its Form SB-2 Registration by setting forth
therein the information required by Rule 419; and
(b) not more than five (5) business days after the Post Effective
Amendment is declared effective, provide each shareholder who purchased
▇▇▇▇▇ Stock pursuant to the Form SB-2 Registration and whose shares are
being held in escrow pursuant to Rule 419 (the "Rule 419 Shareholders")
with a prospectus produced thereby containing the terms of the
reconfirmation offer of investment as required by Rule 419. ▇▇▇▇▇ shall
provide each Rule 419 Shareholder no fewer than twenty (20), and no
more than forty-five (45) business days (the "Reconfirmation Offering
Period") from the effective date of the Post Effective Amendment to
decide to reconfirm his investment. Such reconfirmation shall be
evidenced by delivering to ▇▇▇▇▇ the Letter of Transmittal and
Reconfirmation substantially in the form of Schedule 4.1.
4.2) Cooperation by Gourmet. Gourmet will cooperate and provide ▇▇▇▇▇
with, on a timely basis, any information concerning Gourmet including, but not
limited to, its affiliates, officers directors and employees required to be
included in the Post-Effective Amendment and will update such information as may
be required.
4.3) Prohibited Activities of ▇▇▇▇▇. Except as provided in Section 4.5,
between the Closing Date and the Effective Date, ▇▇▇▇▇ shall not, without the
prior written consent of all the parties hereto:
(a) amend its Certificate Incorporation or Bylaws;
(b) change its authorized capital or grant any options, warrants, puts,
calls, conversion rights or commitments relating to the equity
interests of ▇▇▇▇▇;
(c) declare or pay any dividend or directly or indirectly purchase,
redeem or otherwise acquire or retire for value or issue any of its
shares of stock;
(d) enter into any contract or commitment or incur or agree to incur
any liability or make any capital expenditures in excess of One
Thousand Dollars ($1,000) except in the normal course of business;
(e) increase the compensation payable or to become payable to any
officer, director, stockholder, employee, consultant or agent, or make
any bonus or management fee payment to any such person;
(f) sell, assign, lease or otherwise transfer or dispose of any
property or equipment except in the normal course of business;
(g) negotiate to acquire any business or begin any new business or
project;
(h) merge or consolidate or agree to merge or consolidate with or into
any other business entity;
(i) waive any of its material rights or claims;
(j) enter into any transaction outside the ordinary course of its
business; or
(k) make any oral or written announcement concerning this transaction
except as may be required by law, all of which announcements, if any,
shall be forwarded to the other parties for review and comment at least
seven (7) days prior to dissemination.
4.4) Prohibited Activities of Gourmet. Except for the transaction
between Gourmet and Cameron's Coffee Company, Inc., which may be consummated at
Gourmet's sale and absolute discretion between the Closing Date and the
Effective Date, Gourmet shall not, without the prior written consent of all the
parties hereto:
(a) amend its Articles Incorporation or Bylaws;
(b) declare or pay any dividend or directly or indirectly purchase,
redeem or otherwise acquire or retire for value or issue any of its
shares of stock;
(c) sell, assign, lease or otherwise transfer or dispose of
substantially all of its property or equipment;
(d) merge or consolidate with or into any other business entity; or
(e) make any oral or written announcement concerning this transaction
except as may be required by law, all of which announcements, if any,
shall be forwarded to the other parties for review and comment at least
seven (7) days prior to dissemination.
4.5) Deposited Funds. Notwithstanding anything herein to the contrary,
▇▇▇▇▇ may distribute, on or before the Effective Date, all cash on hand
including, but not limited to, the remaining proceeds from the subscription of
the Rule 419 Shareholders as it determines, in its sole
discretion provided, however, there shall be at least Twenty-Five Thousand
Dollars ($25,000) in the ▇▇▇▇▇ ▇▇▇▇ account listed on Schedule 2.22 on the
Effective Date.
4.6) Consent of Gourmet Shareholders. On or before the Effective Date
and as may be required by applicable law, Gourmet shall use its reasonable best
efforts to obtain, and deliver to ▇▇▇▇▇, the following: (a) evidence that all
consents and approvals required to be obtained by Gourmet in connection with the
consummation of the transactions contemplated herein including, but not limited
to, the consent of at least eighty percent (80%) of its shareholders; and (b)
the stock certificates representing the Gourmet Stock; and (c) such other
documentation as required to be delivered by Gourmet pursuant to the terms of
this Agreement.
4.7) Consent of ▇▇▇▇▇ Shareholders. On or before the Effective Date and
as may be required by applicable law, ▇▇▇▇▇ shall use its reasonable best
efforts to obtain, and deliver to Gourmet, the following: (a) evidence that all
consents and approvals required to be obtained by ▇▇▇▇▇ in connection with the
consummation of the transactions contemplated herein including, but not limited
to, the consent of eighty percent (80%) of its shareholders, including the
affirmative reconfirmation of investment by the Rule 419 Shareholders owning at
least eighty percent (80%) of the Rule 419; (b) shares and the stock
certificates representing the shares of ▇▇▇▇▇ Stock; and (c) such other
documentation as required to be delivered by ▇▇▇▇▇ pursuant to the terms of this
Agreement.
ARTICLE V.
CONDITIONS PRECEDENT TO OBLIGATIONS OF ▇▇▇▇▇
The obligations of ▇▇▇▇▇ hereunder are subject to the completion,
satisfaction, or at its option, waiver, on or prior to the Effective Date of the
following conditions.
5.1) Representations and Warranties. The representations and warranties
of Gourmet that are contained in this Agreement shall be accurate on and as of
the Closing Date and Effective Date with the same effect as though such
representations and warranties had been made on and as of such dates.
5.2) Covenants. Except as otherwise provided herein, each and all of
the terms, covenants and conditions of this Agreement to be complied with and
performed by Gourmet on or before the Closing Date shall have been duly complied
with and performed.
5.3) Consents. All necessary notices to, consents of and filings with
any governmental authority or agency or other third party relating to the
consummation of the Closing or the other transactions contemplated herein to be
made or obtained by Gourmet shall have been obtained and made including, but not
limited to, the consent of the shareholders of Gourmet.
5.4) No Adverse Proceeding. No action or proceeding before a court or
any other governmental agency or body shall have been instituted or, to the best
of Gourmet's knowledge, threatened to restrain or prohibit any of the
transactions contemplated by this Agreement.
5.5) Certificates. Gourmet shall have each delivered to ▇▇▇▇▇ a
certificate to the effect that each of the conditions specified in Sections 5.1,
5.2, 5.3 and 5.4 above have been satisfied in all respects.
5.6) Post Effective Amendment. The Post Effective Amendment shall have
been approved and declared effective by the SEC.
5.7) Letter of Transmittal and Reconfirmation. ▇▇▇▇▇ shall have
received the Letters of Transmittal and Reconfirmation substantially in the form
of Schedule 4.1 for the 419 Shareholders owning at least eighty percent (80%) of
the 419 Shares reconfirming their investment in the ▇▇▇▇▇ Stock.
5.8) Good Standing Certificates. Gourmet shall have delivered to ▇▇▇▇▇
certificates, dated as of a date no earlier than ten (10) days prior to the
Closing Date, duly issued by the appropriate governmental authority or
authorities showing that Gourmet is in good standing in its state of
incorporation.
ARTICLE VI.
CONDITIONS PRECEDENT TO OBLIGATIONS OF GOURMET
The obligations of Gourmet hereunder are subject to the completion,
satisfaction, or at its option, waiver on or prior to the Closing Date, of the
following conditions.
6.1) Representations and Warranties. The representations and warranties
of ▇▇▇▇▇ that are contained in this Agreement shall be accurate on and as of the
Closing Date and Effective Date with the same effect as though such
representations and warranties had been made on and as of such dates.
6.2) Covenants. Except as otherwise provided herein, each and all of
the terms, covenants and conditions of this Agreement to be complied with and
performed by ▇▇▇▇▇ on or before the Closing Date shall have been duly complied
with and performed.
6.3) Consents. All necessary notices to, consents of and filings with
any governmental authority or agency or other third party relating to the
consummation of the Closing or the other transactions contemplated herein to be
made or obtained by ▇▇▇▇▇ shall have been obtained and made including, but not
limited to, the consent of the shareholders of ▇▇▇▇▇ pursuant to applicable
federal and state laws.
6.4) No Adverse Proceeding. No action or proceeding before a court or
any other governmental agency or body shall have been instituted or, to the best
of Lloyd's knowledge, threatened to restrain or prohibit any of the transactions
contemplated by this Agreement.
6.5) ▇▇▇▇▇ Stock. ▇▇▇▇▇ shall deliver to Gourmet the stock certificates
representing the ▇▇▇▇▇ Stock registered in the name of the shareholders of
Gourmet.
6.6) Post Effective Amendment. The Post Effective Amendment shall have
been approved and declared effective by the SEC.
6.7) Letter of Transmittal and Reconfirmation. ▇▇▇▇▇ shall have
received and delivered to Gourmet and its counsel the Letters of Transmittal and
Reconfirmation, substantially in the form of Schedule 4.1, from the 419
Shareholders owning at least eighty percent (80%) of the 419 Shares reconfirming
their investment in the ▇▇▇▇▇ Stock.
6.8) Certificates. ▇▇▇▇▇ shall have delivered to Gourmet a certificate
to the effect that each of the conditions specified in Sections 6.1, 6.2, 6.3,
6.4, 6.5, 6.6 and 6.7 above have been satisfied in all respects.
6.9) Updated Material Agreements. ▇▇▇▇▇ shall have delivered to Gourmet
a schedule (Schedule 6.9), dated the Closing Date, listing all material
agreements, together with copies thereof, entered into by ▇▇▇▇▇ since the date
of the ▇▇▇▇▇ Financial Statements together with an updated schedule of accounts
receivable and accounts payable of ▇▇▇▇▇ as of the Closing Date.
6.10) Good Standing Certificates. ▇▇▇▇▇ shall have delivered to Gourmet
certificates, dated as of a date no earlier than ten (10) days prior to the
Closing Date, duly issued by the appropriate governmental authority or
authorities showing that ▇▇▇▇▇ is in good standing in its state of
incorporation.
6.11) Resignations. The current members of the Boards of Directors and
the officers of ▇▇▇▇▇ shall have tendered their resignations effective as of the
Effective Date.
ARTICLE VII.
INDEMNIFICATION
7.1) Mutual Indemnification. ▇▇▇▇▇ agrees to indemnify, defend and hold
harmless Gourmet (and its officers, directors and employees) and Gourmet agrees
to indemnify, defend and hold harmless ▇▇▇▇▇ (and its officers, directors and
employees), from and against all liabilities, claims, damages, actions, suits,
proceedings, demands, losses, costs and expenses whatsoever (including
specifically, but without limitation, court costs, reasonable attorneys' fees
and expenses, and reasonable expenses of investigation) which result, either
before or after the date of this Agreement, from:
(a) any breach of, misrepresentation in, untruth in or inaccuracy in
the representations and warranties set forth herein or in the
Schedules, exhibits or certificates attached hereto or delivered at the
Closing pursuant hereto;
(b) nonfulfillment or nonperformance of any agreement or covenant made
in this Agreement;
(c) except as otherwise disclosed herein, the existence of liabilities
in excess of the liabilities represented by the parties hereto on their
respective financial statements.
ARTICLE VIII.
MISCELLANEOUS
8.1) Arbitration. In the event there is any dispute between the parties
hereto arising out of or relating to this Agreement and the parties hereto
cannot resolve such dispute themselves, the parties hereto agree to refer and
submit such dispute to the American Arbitration Association, Minneapolis,
Minnesota (the "Association"), for arbitration, and any such proceeding shall be
conducted in the Minneapolis, Minnesota metropolitan area. Any such arbitration
shall be before a panel of three (3) arbitrators and shall be conducted in
accordance with the rules of the Association, except that the parties shall be
permitted discovery prior to any hearing in accordance with the Federal Rules of
Civil Procedure, and the Federal Rules of Evidence and Federal Rules of Civil
Procedure shall apply at any hearing. No arbitrator shall have any connection to
the parties to this Agreement. The arbitrators shall have the right to award or
include in their award any relief they deem proper, including without
limitation, money damages, interest, specific performance, attorneys fees, cost
and expenses incurred, but not exemplary or punitive damages. The award decision
of the arbitrators shall be conclusive and binding upon all parties and may be
entered in any court of competent jurisdiction. The parties agree to bring all
claims in this arbitration which relate to the original claim. This provision
shall continue after any expiration or termination of this Agreement.
8.2) Termination. ▇▇▇▇▇ or Gourmet (as the case may be) may, with ten
(10) days prior written notice, terminate this Agreement on or before the
Effective Date in the event of a breach by ▇▇▇▇▇ or Gourmet (as the case may be)
in the observance, or in the due and timely performance, of any of the
agreements or conditions contained herein or to be performed if such breach has
not been cured on or before the Effective Date. Notwithstanding the foregoing,
this Agreement will terminate if the Closing does not occur on or before April
30, 1998.
8.3) Assignment; Binding Effect; Amendment. This Agreement and the
rights hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto and the
successors of the parties hereto. This Agreement, upon execution and delivery,
constitutes a valid and binding agreement of the parties hereto enforceable in
accordance with its terms and may be modified or amended only by a written
instrument executed by all parties hereto.
8.4) Entire Agreement. This Agreement is the final, complete and
exclusive statement and expression of the agreement among the parties hereto
with relation to the subject matter of this Agreement, it being understood that
there are no oral representations, understandings or agreements covering the
same subject matter as this Agreement. This Agreement supersedes, and cannot be
varied, contradicted or supplemented by evidence of any prior or contemporaneous
discussions, correspondence, or oral or written agreements of any kind.
8.5) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
8.6) No Brokers. All of the parties hereto represent and warrant to
each other that they have had no dealings with any broker or agent so as to
entitle such broker or agent to a commission or fee in connection with the
within transaction. If for any reason a commission or fee shall become due, the
party dealing with such agent or broker shall pay such commission or fee and
agrees to indemnify and save harmless each of the other parties from all claims
for such commission or fee and from all attorneys, fees, litigation costs and
other expenses relating to such claim.
8.7) Expenses of Transaction. The parties hereto agree that they shall
pay all of their own costs and expenses incurred, or to be incurred, by them in
the negotiation and preparation of this Agreement and in closing and carrying
out the transactions contemplated by this Agreement.
8.8) Notices. All notices or other communications required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, by overnight courier or
by delivering the same in person to such party.
(a) If to ▇▇▇▇▇: with a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ Ventures, Inc. ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
(b) If to Gourmet: with a copy to:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Gourmet Regency Coffee Company Larkin, Hoffman, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notice shall be deemed given and effective the day personally
delivered, the day after being sent by overnight courier and three business days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received, if earlier. Any party may change the address for notice by notifying
the other parties of such change in accordance with this Section 8.8.
8.9) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Minnesota, without giving
effect to any choice or
conflict of law provision or rule (whether of the State of Minnesota or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Minnesota.
8.10) No Waiver. No delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of or in any similar breach or default occurring later;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach of default occurring before or after that waiver.
8.11) Captions. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
8.12) Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified
in such manner as to be valid, legal and enforceable but so as most nearly to
retain the intent of the parties. If such modification is not possible, such
provision shall be severed from this Agreement. In either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
8.13) Survival of Representations and Warranties, etc. The
representations, warranties and covenants contained in this Agreement or any of
the schedules or exhibits attached hereto, or in any certificate, document, or
instrument delivered in connection with the Agreement, shall survive the
execution and delivery of this Agreement and the Closing regardless of any
investigation connected by any party.
8.14) Publicity. Except as otherwise required by applicable law, all
notices to third parties and all other publicity concerning the transactions
contemplated by this Agreement shall be jointly planned and coordinated by and
among all of the parties hereto.
8.15) Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute shall be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The parties
intend that representation, warranty and covenant contained herein shall have
independent significance. If any party has breached any representation, warranty
or covenant contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party has not
breached shall not detract from or mitigate the fact the party is in breach of
the first representation, warranty or covenant.
8.16) Further Assurance. From time to time on and after the Closing and
without further consideration, the parties hereto shall each deliver or cause to
be delivered to any other party at such times and places as shall be reasonably
requested, such additional instruments as any of the
others may reasonably request for the purpose of carrying out this Agreement and
the transaction contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
▇▇▇▇▇:
▇▇▇▇▇ VENTURES, INC.
Dated: By: /s/
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
GOURMET:
GOURMET REGENCY COFFEE COMPANY
Dated: By: /s/
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President