ASSET PURCHASE AGREEMENT
This ASSET
PURCHASE AGREEMENT ("Agreement") dated June 30, 2005, by and
between SCHREIBER FOODS, INC., a Wisconsin
corporation ("Purchaser") and GALAXY
NUTRITIONAL FOODS, INC., a Delaware
corporation ("Seller").
WHEREAS,
Seller produces certain imitation dairy products at a facility
located in Orlando, Florida (the
"Facility"); and
WHEREAS,
Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller the Purchased Assets,
according to the terms and conditions
set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements
contained herein, the parties hereto agree
as follows:
A. Definitions.
1.
Agreement.
This Asset Purchase Agreement.
2.
Bill of
Sale. The document delivered by the Seller to the Purchaser
under which Seller shall convey to Purchaser title to the
Purchased
Assets in the form of Exhibit A.2 hereto.
3.
Closing.
The consummation of the transactions contemplated hereby as
set forth in Section D hereof.
4.
Closing
Date. November 1, 2005, effective as of 12:01 a.m., Central
Standard Time, or, if later, the date that is three (3)
business
days after the date on which all conditions to closing specified
in
Sections D.2 and D.3 have been satisfied or waived.
5.
Fixed
Assets. Those assets set forth on Exhibit A.5.
6.
Governmental Approvals. Any order, permission, consent,
approval,
license, authorization, registration, or validation of, or
filing
with, or exemption by any governmental agency, commission, board
or
public authority in connection with the sale of the Purchased
Assets
from Seller to Purchaser, or the execution, delivery or
performance
by the Seller of this Agreement or any other agreement or
instrument
to be executed or delivered by Seller hereunder.
7.
Material
Adverse Effect. An effect that is reasonably likely to
result in a material diminution in value of the Purchased
Assets
(excluding, however, any such Material Adverse Effect which
results
from any announcement of the transactions contemplated by this
Agreement, which includes the effect of any announcement on any
customers, suppliers or employees, and general economic
conditions).
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8.
Ordinary
Course. With respect to the Seller's operations at the
Facility, the ordinary course of commercial operations
customarily
engaged in by the Seller.
9.
OSHA. The
Federal Occupational Safety and Health Act of 1970.
10.
Purchase Price.
Eight Million Seven Hundred Thousand Dollars
($8,700,000.00).
11.
Purchased
Assets. The Fixed Assets and all books and records related
thereto.
12.
Removal Plan.
The Asset Removal Agreement in the form of Exhibit
A.12 hereto describing the process and procedures for removing
the
Fixed Assets from the Facility.
13.
Seller
Liabilities. As defined in Section H.2(a).
14.
Supply
Agreement. The Supply Agreement between Seller and Purchaser
dated as of the date hereof.
B. Purchase and Sale of
Assets.
1.
Assets
Being Purchased and Sold. Pursuant to the terms and
conditions provided herein, and in consideration of the
covenants,
conditions and agreement of Purchaser contained herein, Seller
shall
sell, convey, assign, and transfer to Purchaser, and Purchaser
shall
purchase and acquire from Seller, the Purchased Assets.
2.
Assumed Liabilities. The
Purchaser shall not assume or be obligated
for any liability, obligation or commitment of Seller, direct
or
indirect, known or unknown, absolute or contingent (the
"Pre-Closing
Liabilities").
C. Purchase
Price/Payment.
1. Amount. In reliance on
the representations and warranties made herein by
Seller,
subject to the terms and conditions of Section I, Purchaser
agrees
to pay
Seller the Purchase Price.
2. Payment. At the
Closing, Purchaser shall pay to Seller, by wire transfer
of funds,
the Purchase Price.
D. Closing
1.
Closing/Transfer of Title. The Closing shall commence at 8:00
A.M.,
CST on the Closing Date. Title and risk of loss to the
individual
Purchased Assets shall pass to Purchaser at the Closing.
2.
Conditions
Precedent to Purchaser's Obligation to Close. Purchaser's
obligation to consummate the purchase of the Purchased Assets and
to
take the other actions required to be taken by Purchaser on the
Closing Date are subject to the satisfaction, at or prior to
the
Closing Date, of each of the following conditions (any of which
may
be waived by Purchaser, in whole or in part).
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(a) Seller's
Performance. All of the covenants and obligations
that the Seller is required to perform or to comply with
pursuant to this Agreement and the Supply Agreement at or
prior to the Closing Date, including delivery to Purchaser of
all items described in Section D.4, must have been duly
performed and complied with in all material respects.
(b) No
Proceedings. Since the date of this Agreement, there must
not have been commenced against Purchaser or Seller any
proceeding involving any challenge to, or seeking damages or
other relief in connection with, or which may have the effect
of preventing or delaying any of the transactions contemplated
in, this Agreement or the Supply Agreement.
(c) Release of
Existing Liens. Any liens on the Purchased Assets
shall have been released and terminated at or prior to the
Closing, and Seller shall have received any consents required
to be obtained from the Seller's lenders.
(d) Stockholder
Approval. The Seller's stockholders holding a
majority of the outstanding shares of common stock shall have
approved the sale of the Purchased Assets contemplated hereby.
For purposes of clarification, the accuracy of the Seller's
representations and warranties shall not be a condition to the
Purchaser's obligations to consummate the purchase of the
Purchased
Assets, and Purchaser's sole remedy for any breach of any
representation or warranty by Seller hereunder shall be pursuant
to
Section H.
3.
Conditions
Precedent to Seller's Obligation to Close. Seller's
obligation to consummate the sale of the Purchased Assets and
to
take the other actions required to be taken by Seller on the
Closing
Date is subject to the satisfaction, at or prior to the Closing
Date, of each of the following conditions (any of which may be
waived by Seller, in whole or in part).
(a) Accuracy of
Representations. All of Purchaser's
representations and warranties in this Agreement must have
been accurate in all material respects as of the date of this
Agreement and as of the Closing Date as if made on the Closing
Date.
(b) Purchaser's
Performance. All of the covenants and obligations
that the Purchaser is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing Date,
including delivery to Seller of all items described in Section
D.5, must have been duly performed and complied with in all
material respects.
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(c) No
Proceedings. Since the date of this Agreement, there must
not have been commenced against Seller or Purchaser any
proceeding involving any challenge to, or seeking damages or
other relief in connection with, or which may have the effect
of preventing or delaying any of the transactions contemplated
in, this Agreement or the Supply Agreement.
(d) Release of
Existing Liens. Any liens on the Purchased Assets
shall have been released and terminated at or prior to the
Closing, and Seller shall have received any consents required
to be obtained from the Seller's lenders.
(e) Stockholder
Approval. The Seller's stockholders holding a
majority of the outstanding shares of common stock shall have
approved the sale of the Purchased Assets contemplated hereby.
4.
Deliveries
of Seller. At Closing, Seller shall deliver to Purchaser,
in form and content reasonably satisfactory to Purchaser, the
following:
(a) copies of resolutions adopted by
Seller's Board of Directors,
certified by the Secretary or Assistant Secretary of Seller,
authorizing the execution, delivery and performance of this
Agreement by Seller and authorizing and approving all other
transactions contemplated by this Agreement;
(b) the Bill of
Sale;
(c) the Supply
Agreement;
(d) the Removal
Plan; and
(e) all such
other resolutions, certifications, documents or
instruments as Purchaser or its counsel may reasonably request
to carry out the intent of this Agreement.
5.
Deliveries
of Purchaser. At Closing, Purchaser shall deliver to
Seller, in form and content reasonably satisfactory to Seller,
the
following:
(a) payment by
wire transfer of the Purchase Price;
(b) copies of
resolutions adopted by Purchaser's board of
directors, certified by the Secretary of Purchaser,
authorizing the execution, delivery and performance of this
Agreement by Purchaser and authorizing and approving all other
transactions contemplated by this Agreement;
(c) the Supply
Agreement;
(d) the Removal
Plan; and
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(e) all such
other resolutions, certifications, documents or
instruments as Seller or its counsel may reasonably request to
carry out the intent of this Agreement.
E. Covenants and
Agreements
1.
Access to
Books and Records. After Closing, Seller and Purchaser
each will permit the other party and their representatives,
upon
receipt of a written request a reasonable time in advance,
including
but not limited to lawyers and accountants, during normal
business
hours, to have access to and examine and make copies of the
books
and records related to the Purchased Assets.
2.
Liabilities. Subject to the terms of this Agreement, Seller
agrees
to pay and shall discharge when due all Pre-Closing
Liabilities.
Purchaser shall
not assume, and Seller shall remain responsible for
all other Pre-Closing Liabilities and obligations of Seller.
3.
Payment of
Taxes. Seller shall be responsible for and shall pay all
federal, state, and local taxes, including, but not limited to,
all
income, earnings, and property taxes, relating to Seller and
the
Purchased Assets prior to the Closing Date. Purchaser shall be
responsible for and pay all such taxes relating to the
Purchased
Assets payable for any period from and subsequent to the
Closing
Date.
4.
Sales
Taxes. Seller shall report and pay all sales taxes, if any,
payable to the State of Florida in connection with the
transactions
contemplated by this Agreement.
5.
Bulk Sales
Laws. Purchaser hereby agrees to waive Seller's
obligation to comply with any notification requirements of the
bulk
sales law of Florida.
6.
Removal of
Assets. Seller shall comply with the provisions of the
Removal Agreement.
7.
Employee
Matters. Purchaser shall not be obligated to extend job
offers to any employees employed by Seller as of the Closing
Date.
Seller shall be responsible for any notification and/or
liability
under the Worker Adjustment and Retraining Notification Act
and/or
any similar state statute or local laws in connection with the
consummation of the transactions contemplated hereunder.
8.
Conduct of
Business Until Closing. Except as the Purchaser may
otherwise consent to or approve in writing on and after the
date
hereof and prior to the Closing Date, the Seller agrees:
(a) not to enter
into discussions, and to discontinue all pending
discussions, relating to the disposition of any of the
Purchased Assets, other than in the Ordinary Course;
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(b) except in
the Ordinary Course, not to sell, lease or grant any
option to sell or lease, give a security interest in or
otherwise create any encumbrance on any of the Purchased
Assets;
(c) not to enter
into any agreement (conditional or otherwise) to
do any of the foregoing.
9.
Further
Assurances. From time to time after the Closing Date, at the
request of the other party hereto, and without further
consideration, each party hereto shall execute and deliver such
other instruments of conveyance and transfer and take such
other
action as the other party hereto may reasonably request so as
to
effectuate the transactions contemplated by this Agreement.
F. Representations and
Warranties of Seller. Seller represents and warrants
to
Purchaser that, except as set forth in the various Schedules
provided
as a part
of this Section F and attached hereto:
1.
Organization. Seller is a corporation duly formed and validly
existing under the laws of the State of Delaware and has the
power
and authority to carry on its business as now conducted, to own
and
operate the Purchased Assets, to execute this Agreement and the
other agreements and instruments referred to in this Agreement
that
it is executing and delivering, and, subject to the Seller
obtaining
the approval of its stockholders holding a majority of the
outstanding shares of its common stock (the "Stockholder
Approval"),
the Seller shall have the power and authority to carry out the
transactions contemplated hereby and thereby.
2.
Enforceability. Subject to the Seller obtaining the Stockholder
Approval, the execution and delivery by Seller of this Agreement
and
the other agreements and instruments referred to in this
Agreement
have been duly authorized by the Seller's board of directors
and
constitute legal, valid, binding, and enforceable agreements
and
instruments of Seller, except as the enforceability thereof may
be
affected by the laws of bankruptcy, insolvency, reorganization,
or
similar laws affecting the rights of creditors generally.
3.
No
Violations. Except as set forth in Schedule F.3, neither the
execution, delivery, nor performance of this Agreement or any
other
agreement or instrument executed and delivered by or on behalf
of
Seller in connection herewith, nor the consummation of the
transactions herein or therein contemplated, nor compliance with
the
terms and provisions hereof or thereof, (i) contravenes
Seller's
certificate of incorporation or by-laws, (ii) to Seller's
knowledge,
violates any statute, rule or regulation of any governmental
authority to which Seller is subject, (iii) contravenes any
judgment, decree or order applicable to Seller, (iv) conflicts or
is
inconsistent with or will result in any breach of or constitute
a
default under any contract, commitment, agreement
