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Exhibit 10.18
ASSET PURCHASE AGREEMENT
This Asset
Purchase Agreement (the “ Agreement ”) is
entered into as of October 15, 2007 (the “ Effective
Date ”), by and among Schlabach Amish Bakery, LLC, an
Ohio Limited Liability Company (“ Seller ”), and
Vickie Moser, (“ Seller’s Owner ” and, the
“ Seller Parties ”), and Amish Natural Sub Inc.,
an Ohio corporation (“ Buyer ”), which is a
wholly-owned subsidiary of Amish Naturals, Inc., a Nevada
corporation (“ ANI ”). Buyer and the Seller
Parties shall hereinafter individually be referred to as a “
Party ” and collectively be referred to as the “
Parties .”
RECITALS
WHEREAS, Seller
is engaged in the business of manufacturing, sale and distribution
of bakery goods and other products in Millersburg, Ohio (the
“ Business ”); and
WHEREAS, Buyer
desires to purchase from Seller, and the Seller Parties desire that
the Seller sell and transfer to Buyer, certain assets of Seller on
the terms and subject to the conditions of this
Agreement.
NOW, THEREFORE,
in consideration of the premises, and the representations,
warranties, covenants, and agreements contained in the Transaction
Documents (as hereinafter defined), and for such other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.
Purchase and Sale of
Assets
1.1
Purchase and Sale . Subject to the terms and conditions of
this Agreement, on the Closing Date (as defined in
Section 4.1 herein), Seller hereby agrees to sell,
assign, transfer, and deliver to Buyer, and Buyer agrees to
purchase, accept, and acquire from Seller, all of Seller’s
right, title, and interest in and to the “Purchased
Assets ”as follows:
(a) Any and all assets and inventory of
Seller relating to the Business, including, without limitation,
that certain inventory set forth on Schedule 1.1(a) attached
hereto (the “ Assets and Inventory ”).
Schedule 1.1(a) shall include, but shall not be limited to,
the name, location, description and identification number (to the
extent available) of all the Assets and Inventory;
(b) Any and all intellectual property of
Seller relating to the Business, including without limitation that
certain intellectual property set forth on Schedule 1.1(b)
attached hereto (the “ IP ”). Schedule
1.1(b) shall include, without limitation, Seller’s
tradename and website domain name, as used in the
Business;
(c)
The real estate lease agreement set forth on Schedule 1.1(c)
attached hereto (the “ Lease Agreement ”) and
all improvements and fixtures which shall terminate upon
Closing;
(d)
All customer lists, vendor lists, and other compilations of data
used in or related to the Business;
(e)
Those books and records of Seller directly related to the Purchased
Assets, including invoices, purchase orders, vendor and customer
correspondence (if any);
(f)
To the extent transferable, all franchises, approvals, permits,
licenses, registrations, certificates, and similar rights obtained
from governmental bodies; and
(g)
All goodwill and other intangible assets associated with the
Purchased Assets.
1.2
Excluded Assets . Notwithstanding
any term herein to the contrary, Seller is not agreeing to, and,
accordingly, shall not, sell, assign, transfer, or deliver to
Buyer, and Buyer is not agreeing to, and, accordingly, shall not,
purchase, accept, or acquire from Seller, any of Seller’s
assets other than those assets specifically set forth in
Section 1.1 herein.
1.3
Free and Clear of All Liens and
Liabilities . The Purchased Assets shall be free and clear of
all liens, liabilities, claims, and encumbrances, except as
referred to in Section 1.1(c).
1.4
Delivery of Purchased Assets . As
of the Closing, Buyer shall take physical possession of the
Purchased Assets at Seller’s warehouse facilities located in
Millersburg, Ohio.
ARTICLE 2
PURCHASE PRICE
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Purchase Price . The purchase price for the Purchased
Assets (the “ Purchase Price ”) shall be
Two Hundred Fifty Thousand Dollars ($250,000) payable to Seller at
Closing by wire transfer or delivery of certified funds for such
amount. |
2.2
Purchase Price Allocation . The
Purchase Price shall be allocated among the Purchased Assets as set
forth on Schedule 2.2 attached hereto. Seller and Buyer
agree that the allocation will bind them for federal, state, local,
and foreign income tax purposes in connection with the purchase and
sale of the Purchased Assets and will be consistently reflected by
them on any tax returns or reports they file or prepare. Seller and
Buyer shall consult with each other concerning all issues relating
to such allocation in connection with any tax audit and shall not
initiate any positions inconsistent with such allocation in
connection with any tax audit.
ARTICLE 3
ASSUMPTION OF SPECIFIED LIABILITIES
3. Assumption of Specified
Liabilities .
3.1
No Assumption of Liabilities Unless
Expressly Assumed . Unless as specifically provided in Section
3.2 below, Buyer does not assume and shall not have any duty or
obligation with respect to any liability, duty, contract,
agreement, or obligation of Seller or Seller’s Owners,
whether by the terms of this Agreement, by operation of law, or
otherwise, whether or not associated with the Business or any of
the Purchased Assets.
3.2
Specification of Liabilities
Assumed . Seller hereby agrees that Buyer has the right, but
not the obligation, to assume, satisfy, and perform when due all
liabilities, duties, contracts, agreements, and obligations of
Seller arising or accruing from and after the Closing Date directly
and solely related to the Lease Agreement and any purchase orders
that had been received by the Seller prior to the Closing Date,
which related to the purchase of products from the Business, if
such purchase orders had not been fulfilled, in whole or in part,
as of the Closing Date (collectively, the “ Assumed
Liabilities ”). Buyer shall have no obligation to tender
to Seller any economic benefit received by Seller in respect of
fulfilling any such purchase orders.
ARTICLE 4
CLOSING DATE
4. Closing Date .
4.1
Closing Date . Provided that all
conditions precedent set forth in this Agreement have been
satisfied or waived, the closing of the transactions contemplated
hereby (the “ Closing ”) shall occur on
October 15, 2007, or such other date as shall be mutually agreed
upon by the Parties hereto (the “ Closing Date
”). The Closing shall be held on the Closing Date at 10:00
a.m. EST at the offices of ANI, unless another place and time is
mutually agreed upon by the Parties.
4.2
Date of Transfer . Provided that
the Closing occurs, it is the intent of the Parties that the
Purchased Assets be transferred to Buyer effective as of the
Closing Date. Further, the Assumed Liabilities shall be transferred
to and assumed by Buyer effective as of the Closing
Date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES
5.
Representations and Warranties of
Seller Parties . As a material inducement to Buyer to enter
into this Agreement, the Seller Parties, jointly and severally,
make the following representations and warranties to Buyer, each of
which the Seller Parties, jointly and severally, represent to be
true and correct. The schedules delivered pursuant to this Article
5 (the “ Disclosure Schedules ”) shall be
arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Article 5, and the disclosure in any
paragraph shall qualify other paragraphs in this Article 5 only to
the extent that it is reasonably apparent from a reading of such
disclosure through appropriate cross-referencing that it also
qualifies or applies to such other paragraphs.
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5.1
Organization and Qualification .
Seller is a Limited Liability Company duly organized, validly
existing, and in good standing under the laws of the State of Ohio,
with all necessary corporate power and authority to own or use its
property that it now owns or uses and to carry on its business as
it is now being conducted. Seller is duly qualified to do business
and is in good standing in each jurisdiction where the ownership,
lease, or operation of its property or the conduct of its business
requires such qualification, except where the failure to be in good
standing or so qualified would not have a material adverse effect
on Seller or the Business. At the date hereof, Seller has one
Member Interest (the “ Seller Member Interest ”)
validly issued and outstanding. The Seller Member Interest is fully
paid, non-assessable, and is entirely owned of record and
beneficially by Seller’s Owner, who has not granted any
options in the Seller Member Interest to any person. There are no
options, warrants, or other securities exercisable or convertible
into, or any calls, commitments, agreements, or obligations of any
kind relating to, any unissued equity securities of
Seller.
5.2
Authorization and Validity . Each
of the Seller Parties has the requisite power and is duly
authorized to execute and deliver and to carry out the terms of
this Agreement and to execute, deliver and perform its respective
obligations under the documents required at the Closing pursuant to
Article 10 (the “ Closing
Documents”) and any other documents this Agreement
contemplates. All action required, by law and/or Seller’s
Articles of Organization and Bylaws or otherwise, to authorize the
execution and delivery of this Agreement, the Closing Documents and
the consummation of the transactions contemplated hereby has been
taken. This Agreement, the Closing Documents and all other
documents contemplated by this Agreement are, or will be upon
execution, legal, valid and binding obligations of the Seller
Parties, duly enforceable against the Seller Parties according to
their terms, except as may be limited by (i) bankruptcy,
insolvency, moratorium, or other similar laws affecting
creditors’ rights generally, and (ii) general principles
of equity relating to the availability of equitable
remedies.
5.3
Consents and Approvals . Except for
that stated on Schedule 5.3 , no consent, approval,
notification or authorization is required in connection with the
execution, delivery, and performance of this Agreement or any
Closing Document by the Seller Parties or the consummation of any
transactions contemplated hereby, including but not limited to any
“bulk sale”notice or similar filing, publication or
notice by any Party under the laws of the State of Ohio in
connection with the transactions contemplated hereby.
5.4
No Defaults . Seller is not in
default under or in violation of (i) any provision of its
Certificate of Incorporation or Bylaws; (ii) any material
provision of any indenture, mortgage, deed of trust, lease, loan
agreement, or other agreement or instrument to which it is a party
or by which it is bound or to which any of Seller’s property
is subject (including without limitation the Contracts, as that
term is defined hereinafter), if such default would have a material
adverse effect on Seller, the Business, or the Purchased Assets; or
(iii) any statute, law, ordinance, order, judgment, rule,
regulation, permit, franchise, or other approval or authorization
of any court or governmental agency or body having jurisdiction
over it or any of Seller’s properties which, if enforced,
would have a material adverse effect on Seller, the Business, or
the Purchased Assets. The execution and delivery of this Agreement,
the Closing Documents and any other documents contemplated
hereunder or thereunder; the Seller Parties’ performance of
their respective obligations under this Agreement, the Closing
Documents and other documents; or the consummation of the
transactions contemplated herein will not conflict with, result in
a breach of or, constitute a default under any of the foregoing,
require the payment of any prepayment or other penalties, or result
in the creation of any lien, mortgage, pledge, charge, or
encumbrance upon any asset of Seller. Furthermore, no consents or
waivers thereunder are required to be obtained or notices be given
in connection therewith in order to execute and deliver this
Agreement, the Closing Documents and/or any other documents
contemplated hereunder or thereunder or to consummate the
transactions contemplated by this Agreement.
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5.5
Documents . The copies and/or
originals of all agreements, books and records related to the
Purchased Assets, and other instruments (including any financial
statements relating to the Business provided to Buyer prior to
Closing) that have been delivered by the Seller Parties to
Buyer are true, correct, and complete copies and/or originals of
such agreements, books, records, and instruments, and include all
amendments thereto.
5.6
Litigation . There are no actions,
suits, proceedings, orders, investigations, or claims
(collectively, “Proceedings ”) pending or
threatened against or affecting Seller, the Business or the
Purchased Assets, or that may interfere with the timely
consummation of the transactions contemplated by this Agreement, at
law or in equity, or before or by any governmental department,
commission, board, bureau, agency, or instrumentality. Seller is
not operating under or subject to, or in default with respect to,
any order, writ, injunction, or decree of any court or federal,
state, municipal, or other governmental department, commission,
board, agency, or instrumentality. Neither of the Seller Parties
has any Knowledge (defined below) of the basis for any such action,
suit, proceeding, order, investigation, or claim. “
Knowledge ” is defined to include actual knowledge and
what a reasonably prudent person would discover upon due inquiry
and investigation.
5.7
Products . During its existence,
Seller has not had (a) any notification, in writing or otherwise,
relating to or (b) any claims, demands, causes of action (including
third-party claims, demands, and causes of action, whether directly
or for contribution or indemnification), losses, damages, expenses
(including attorney’s fees), and/or liabilities of any kind
and nature asserted by any person that arises out of or results
from any one or more of the following, with respect to products
sold by the Seller in relation to the Business: (i) any breach by
any manufacturer of any of its representations, warranties, or
covenants; (ii) without limiting the preceding, any defective
product; (iii) any recall of any product, regardless of who
initiated the product recall; and/or (iv) any negligent act or
omission by a manufacturer. In addition, the Seller has not issued
or been required to issue any notification, in writing or
otherwise, to any person about the quality, manner of consumption,
or spoilage of any products sold by the Seller in relation to the
Business, or for any other reason. Furthermore, there has been no,
or any notice received of, death, personal injury, or loss of
property to unrelated third parties, whether during any warranty
period or after its expiration, in connection with any products of
the Business.
5.8
Inventory . Except for obsolete
items and items below standard quality, all of which will have been
written off or written down to net realizable value, all Inventory
will (a) consist of inventory manufactured or acquired in bona fide
transactions in the ordinary course of business; (b) be of a
quality and quantity usable and salable in the ordinary course of
business; and (c) not exceed the shelf life that would adversely
affect the qualitative performance characteristics or the quality
of the ingredients. All inventories not written off will be
reflected in the appropriate documents at the lower of average cost
or market on a [last-in, first-out basis] . The quantities
of each item of Inventory (whether raw materials, work-in-process
or finished goods) will not be excessive, but will be reasonable in
the circumstances of the Business.
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5.9
Title to Properties . Seller is the
sole owner of and has good, complete, and marketable title to, and
full rights to utilize, the Purchased Assets, free and clear of
liens, claims, and encumbrances. At the Closing, Seller will convey
and transfer to Buyer good, complete, and marketable title to all
of the Purchased Assets, free and clear of restrictions or
conditions to transfer or assignment, and free and clear of all
liens, claims, and encumbrances.
5.10
Real Property . Schedule
5.10 sets forth a description of all real property and real
property interests currently owned, leased or otherwise held by
Seller (“ Real Property ”). Schedule 5.10
also sets forth a list of all leases of real property to which
Seller is a signatory or by which it is bound or affected
(collectively, the “ Real Property Leases ”).
Seller owns valid and binding leasehold interests in the Real
Property Leases. The Real Property Leases are in full force and
effect and have not been terminated. No event has occurred and no
condition exists which, with the giving of notice or the lapse of
time or both, will constitute a default under any of the Real
Property Leases. Seller has not sublet or assigned any portion of
the Real Property. To Seller Parties’ Knowledge, none of the
Real Property is the subject of any condemnation action and, to
Seller Parties’ Knowledge, there is no proposal under
consideration by any governmental body to take or use any of the
Real Property. To Seller Parties’ Knowledge, the Real
Property has direct access on a public way with sufficient road
frontage to satisfy all necessary Laws.
5.11
Condition and Sufficiency of Assets
. To Seller Parties’ Knowledge, the buildings, plants,
structures, furniture, fixtures and/or equipment owned or used by
Seller and included in the Purchased Assets: (a) are structurally
sound, are in good operating condition and repair, are adequately
serviced by all required utilities and are adequate for the uses to
which they are being put; (b) do not need maintenance or repairs
except for ordinary, routine maintenance and repairs; and (c) are
sufficient for the continued conduct of the Business as it is
currently being conducted.
5.12
Compliance with Laws . Seller has
complied with and is not in violation of any federal, state,
county, or local statute, law, rule, regulation, ordinance,
guidance, code, license, use, permit, franchise, judgment, decree,
writ, injunction, and/or order (collectively, “ Laws
”) applicable to the Purchased Assets. Neither of the
Seller Parties has received any notice alleging non-compliance with
any Law. There are no present or past conditions relating to the
Purchased Assets arising from or related to any past or present
storage, spill, discharge, leak, emission, injection, escape,
dumping, or release of any kind whatsoever of any hazardous
material or any generation, transportation, treatment, storage, or
disposal of waste materials, raw material, or other products of any
kind or from the storage, use, or handling of any hazardous
material or other substances. Seller has no reason to anticipate
that any existing circumstances are likely to result in a violation
of any Laws.
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5.13
Permits and Licenses . To Seller
Parties’ Knowledge, all governmental authorizations necessary
to carry on the Business as presently conducted are set forth in
Schedule 5.13 and have been timely obtained, are in full
force and effect and have been complied with. All fees and charges
incident to those governmental authorizations have been fully paid
and are current, and no suspension or cancellation of any
governmental authorization has been threatened or to Seller
Parties’ Knowledge could result by reason of the transactions
contemplated by this Agreement.
5.14
Liabilities . Seller has no
liabilities or obligations, including without limitation any debt,
accounts payable, indebtedness, commitment, unpaid tax liability or
other obligation of any nature, incurred in connection with the
Purchased Assets (whether known or unknown and whether absolute,
accrued, contingent, unasserted, secured, unsecured or otherwise),
except those set forth in Schedule 5.14 . Schedule
5.14 also sets forth any liabilities and/or obligations of
Seller that are being assumed by Buyer at Closing.
5.15
No Other Agreements to Sell the
Assets . Neither the Seller Parties nor any of Seller’s
officers or affiliates has any commitment or legal obligation,
absolute or contingent, to any other person or entity other than
Buyer to sell, assign, transfer, or effect a sale of any of the
Purchased Assets, to sell or effect a sale of any of the capital
stock of Seller, to effect any merger, consolidation, liquidation,
dissolution, or other reorganization of Seller, or to enter into
any agreement or cause the entering into of an agreement with
respect to any of the foregoing.
5.16
Taxes . All tax returns or
statements required to be filed with respect to the operations or
assets of Seller prior to the Closing Date have been correctly
prepared in all material respects and timely filed, and all taxes,
and penalties and interest, if any, required to be paid in respect
of the periods covered by such returns have been paid in full or
adequate reserves have been established for the payment of such
taxes. All known deficiencies of any tax, assessment, or government
charge or duty have been paid in full or adequate reserves have
been established for the payment of such taxes. No audits or
investigations by federal or state authorities are currently
pending or threatened. Furthermore, Seller has complied in all
material respects with all applicable Laws relating to the payment
and withholding of taxes and has, within the time and the manner
prescribed by such Laws, withheld and paid over to the proper
governmental authorities all amounts required to be so withheld and
paid over under the applicable Laws.
5.17
Intellectual Property . To Seller
Parties’ Knowledge, Seller owns or has the right to use,
pursuant to license, sublicense, agreement or permission, all
intellectual property. The use of IP has not infringed any
intellectual property of any other person and, to Seller
Parties’Knowledge, there is no infringement of or unlawful
use by any other person of any of the IP. Schedule 5.17 also
sets forth a list of all contracts relating to IP to which Seller
or any affiliate is a party or by which Seller or any affiliate is
bound or affected to any material extent, excluding: (i) license
agreements for “off the shelf” computer software and
other commercially available products and (ii) any licenses implied
by the sale of a product. None of the IP owned or used by Seller is
subject to any pending, or threatened, Proceedings, and there is no
valid basis for asserting any such Proceeding. No IP owned or used
by Seller is subject to any outstanding order restricting the use
by Seller (or Buyer following the Closing) of that IP. The IP
included among the Purchased Assets is all that is necessary for
the operation of the Business as presently conducted.
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5.18
Subsidiaries . (a) Seller has
no subsidiaries; (b) Seller does not own, beneficially, of record
or otherwise, any securities of any entity; (c) Seller is not
a party or subject to any partnership, joint venture, or similar
agreement or arrangement; and (d) except shares of common stock of
ANI owned of record or beneficially by Seller’s Owners (or
Seller’s Owners’ spouses), no Seller Party owns,
directly or indirectly, any security or financial interest in any
other entity or concern which competes with or does business with
Seller or which would interfere with the performance of any duties
it/they owe to Seller.
5.19
Employees, Labor
Relations.
(a)
Schedule 5.19 contains, as of a recent date specified
therein, the following information for each employee of Seller
(including each employee on leave of absence or layoff status):
name; job title; hire date; current compensation paid or payable;
vacation accrued; eligibility to participate under any Employee
Benefit Plan; and citizenship. Seller Parties have no Knowledge
that any employee intends either to (i) discontinue employment with
Seller either prior or subsequent to the Closing or (ii) refuse
employment by Buyer (taking into account the employment
arrangements and policies to be implemented after the
Closing).
(b)
Neither Seller, nor any affiliate of Seller, is now or has ever
been a party to any collective bargaining or other labor contract.
In the last five (5) years there has not been, there is not
presently pending or existing, and to Seller Parties’
Knowledge there is not threatened, with respect to Seller or any of
its premises: (i) any strike, slowdown, picketing, work
stoppage, lockout, organizational activity or other labor dispute
or Proceeding; (ii) any application or complaint filed by any
employee or union with any governmental body; or (iii) any
application or demand for recognition or certification of a
collective bargaining agent. To Seller Parties’ Knowledge,
there is not currently, nor has there been in the past five years,
any internal investigation of any charge or complaint by any
employee of Seller alleging harassment, discrimination or other
employment conduct which could give rise to liability. To Seller
Parties’ Knowledge, all Laws relating to Seller’s
employees, including Laws relating to terms of employment,
immigration and employment of illegal aliens, the payment of social
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