ASSET PURCHASE
AGREEMENT
This Agreement is made and entered into
this 20 th day of February, 2009, by and between L.A.
Juice Company, Inc., Nicholas Baum, and City Juice Systems KS, LLC.
DEFINED
TERMS
These defined terms have the following
meanings as used in the Agreement:
1.
“Accounts Receivable” means
those accounts outstanding as of the Closing Date that are owing to
Seller.
2.
“Agreement” means this Asset
Purchase Agreement and all exhibits.
3.
“Assets” means those items
listed in paragraph 1 of the Agreement.
4.
“Business” means the business
that operates a beverage, smoothie, and snack business from a
location of 6537 W. 119 th Street, Overland Park, KS
66209.
5.
“Buyer” means City Juice
Systems KS, LLC.
6.
“Closing” or “Closing
Date” means February 20, 2009 at 11:00 p.m. central time at a
place to be determined by the parties.
7.
“Inventory” means those items
that are sold to customers of the Business or used in the operation
of the Business or provided to the Business’
customers.
8.
“Purchase Price” means the
consideration described in Section 9.
9.
“Seller” means L.A. Juice
Company, Inc.
Background
1. Seller currently owns the
Assets and operates the Business; and
2. Nicholas Baum is authorized
by Seller to enter into this transaction for the sale of the Assets
of Seller to Buyer; and
3. Seller wishes to sell and Buyer wishes
to acquire the Assets for the consideration and under the terms and
conditions in the Agreement; and
4. Ephren W. Taylor, Jr. and Kinta
L. Dixon are authorized by Buyer to enter into this transaction for
the purchase of the Assets from Seller; and
5. Buyer and Seller entered into an Offer
to Purchase dated January 8, 2009. The parties intend that
this Agreement is a full statement of the party’s agreement
for the sale of the Assets and Business and that it supersedes the
Offer to Purchase.
Now, in consideration of the mutual
promises and pledges of the parties, and for the reasons set forth
above, Seller and Buyer agree as follows:
AGREEMENT
1. ASSETS INCLUDED IN
PURCHASE . Seller will sell to Buyer, free from any and
all liens, encumbrances or liabilities, the Assets.
The Assets include all tangible and intangible
items used in the Business, including the following:
a. Equipment and trade fixtures used in
the Business, including those on Exhibit A or listed on any
equipment and trade fixture list provided to Buyer during the
course of the negotiations .
b. Any and all of
Seller’s (i) customer lists, listings, or business records
used in the daily operations of the Business, (ii) leases, customer
deposits, signs and signage, (iii) all e-mail access information
and addresses, and (iv) all other personal property used in the
Business, including (if transferable) software and software
licenses, permits, warranties, licenses and franchises.
c. Any and all interest Seller has or may
have in the telephone, facsimile number(s), and web site of the
Business.
d. Any and all good-will associated with
the Business.
e. Any of Seller’s right,
title and interest in and to all personal property or equipment
leases covering any assets used by Seller in the course of the
Business, including any remaining equity in existing
leases.
f.
The Inventory valued at Seller’s cost not
to exceed $7,000.
g.
Any rights Seller has in the name L.A.
Juice Company.
h.
All customer relationships, contact
information, and customer lists.
i.
Seller’s Accounts Receivables from
customer sales and ACH payments incurred, but not collected on or
following the Closing hereof.
2. ASSETS EXCLUDED FROM
PURCHASE . The Asset to be sold to Buyer specifically
excludes the following:
Any liability not expressly assumed by
Buyer herein for the Assets that accrue before Closing are the sole
liabilities and responsibility of the Seller, and Seller shall
continue to be responsible for those liabilities that accrue for
activity prior to Closing.
This Agreement constitutes a sale of
certain assets of Seller only and is not a sale of any stock in any
entity comprising all or any part of the Seller. Buyer is not
assuming and shall not be responsible for the payment of any
liabilities or obligations of the Seller or the shareholders of
Seller whatsoever, including but not limited to any collective
bargaining agreement or other agreement, benefits, plans or
arrangements affecting employees or suppliers
.
3. SELLER’S WARRANTIES
AND REPRESENTATIONS . Seller represents and warrants that
as of the Closing Date:
a. That all known issues relating to the
equipment , Inventory, furniture, and trade fixtures sold to Buyer,
including those listed on “Exhibit A”, have been
disclosed to Buyer.
b. That there are no claims or causes of
action against the Business or the Assets, or claims or causes of
action that may affect the ability of Seller to convey good and
clear title to all of the Assets enumerated herein. To the
extent the Assets are encumbered or pledged, those encumbrances or
pledges will be released as of the Closing.
c. All books and figures relative to the
Business and shown to the Buyer are true, accurate and correct.
Seller hereby acknowledges and agrees that notwithstanding
the fact that Seller does not convey or transfer title to the
financial information described in Paragraph 2(a) above, Seller, at
Closing, shall delivered copies of each of the following, certified
to be true and accurate by Seller’s certified public
account:
(i)
Form 1120 of Seller for the tax years
ending 2006, 2007 and 2008;
(ii)
Detailed year end income and loss
statement of Seller for the tax years ending 2006, 2007 and 2008;
and
(iii)
Detailed Balance Sheet and Reconciliation
Summary of Seller for the tax years ending 2006, 2007 and
2008.
d. Seller is in
compliance with all applicable statutes, rules, regulations and
requirements of federal, state or local agencies, and has timely
filed such reports, data or information where a failure to file
timely would have a material adverse effect on the Business
or
the Assets to be sold hereby.
Seller warrants that any failure to comply, file or follow
relevant requirements that precede the Closing Date and that later
becomes apparent to either party will be rectified by Seller at
Seller’s sole cost and expense.
e. All employee salaries, benefits, or
other paid compensation will be paid in full for work completed
through Closing within 7 days of Closing.
f. Seller agrees to satisfy all tax
liabilities of the Business upon their due date for Seller’s
pro-rata share as of the Closing Date. Seller agrees that it
is alone responsible for all tax liabilities, regardless of nature,
as to the Business for activity prior to Closing. Buyer will
notify Seller within 15 days of its notification of any tax related
claim for liabilities incurred before the Closing. Seller is
holding Buyer harmless of all tax liabilities related to the
Business occurring on or before the date of Closing. Seller
will provide a “No Tax Due” statement from all
applicable jurisdictions.
g. Should any of the leases or contracts
to be transferred hereunder be non-assignable by its terms, Seller
will use commercially reasonable efforts to obtain consent of the
lessor or party to a contract. For leases that are assigned,
Buyer will assume the remainder of the lease and will hold Seller
harmless against any amounts due after Closing. Seller has
right to void this contract if he cannot obtain a termination or
assignment of this lease to Buyer and/or a release of any personal
guarantees related thereto.
h. At the Closing, Seller
will provide to Buyer copies of all leases, contracts, licenses,
permits, employment contracts, purchase agreements and all other
contracts, documents, files and records which are pertinent to this
sale of the Assets and the Business.
4. PRE-CLOSING
INDEMNIFICATION . Except as otherwise expressly
provided herein, Seller shall indemnify, defend and hold Buyer and
its partners, agents, attorneys and legal assigns (collectively the
"Buyer Indemnified Parties") harmless from and against any losses,
damages and expenses (including reasonable attorneys fees)
resulting from third-party claims arising out any
misrepresentations of Seller related to the Business, except to the
extent cause by buyer or its agents. Seller acknowledges that
all of the Buyer Indemnified Parties that are not signatories to
the Agreement are intended to be third-party beneficiaries of the
promises made by it in this section.
Buyer shall deliver written notice to
Seller of any claim hereunder and its assertion that such claim is
covered by this indemnification, promptly after first receiving
knowledge of it. Seller shall have the right to defend such
claim with counsel of its own choice, at its sole expense, on
condition that Seller: (1) acknowledges its duty to indemnify such
claim; (2) promptly commences, and thereafter continues, exercising
best efforts diligently to defend the claim; and (3) delivers
written notice to Buyer of all material developments in such
proceeding and copies of all pleadings and other documents
reasonably related thereto. In
