Asset Sale/Purchase Agreement - Right Body Foods Inc., Rebecca Klafter and Bio-Reference Laboratories Inc.
ASSET SALE/PURCHASE AGREEMENT
AGREEMENT made as of the 14th day of December 1999 by and between Right
Body Foods Inc., a New York corporation with its principal place of business at
118 Jackson Avenue, Syosset, Long Island, New York 11791 ("RBF") and Rebecca
Klafter residing at 102 Bristol Drive, Woodbury, New York 11797 ("Klafter"), the
chief executive officer and sole stockholder of RBF (Klafter and RBF being at
times collectively referred to as the "Sellers") on the one hand, and
Bio-Reference Laboratories, Inc., a New Jersey corporation ("BRLI") and its
wholly-owned subsidiary, BRLI No. 1 Acquisition Corp., a New Jersey corporation
(the "Purchaser"), each with its principal place of business at 481 Edward H.
Ross Drive, Elmwood Park, New Jersey 07407.
W I T N E S S E T H :
WHEREAS RBF is engaged in the manufacture of certain health food products
at its leased facility at 118 Jackson Avenue, Syosset, Long Island, New York
11791 and in the distribution of such products under the name "Right Body Foods"
in the greater New York metropolitan area (the "Health Food Business"); and
WHEREAS the Sellers desire to sell and Purchaser desires to purchase
certain assets used by RBF in its operation of the Health Food Business so as to
enable Purchaser to operate the Health Food Business; and
WHEREAS Purchaser is unwilling to effect such purchase unless it is able
to employ Klafter to serve as Director of the Health Food Business operations
and to obtain Klafter's agreement not to compete with Purchaser and/or BRLI in
its operation of the Health Food Business.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained and other good and valuable consideration, the receipt
whereof and sufficiency of which are hereby acknowledged, it is hereby agreed as
follows:
1. Purchase and Sale
(a) At the Closing (hereinafter defined) Sellers will sell, transfer,
convey, grant, relinquish, release, assign, and deliver to Purchaser, and
Purchaser will purchase and acquire from Sellers, on the terms and subject to
the conditions set forth in this Agreement, certain assets and rights of Sellers
related to the Health Food Business as they exist as of the Closing including
Sellers' rights to the tradename "Right Body Foods Inc." and to all other
registered or unregistered patents, trademarks and/or tradenames, licenses,
recipes, labels, artwork, food ingredients, supplies, certain equipment,
leaseholds, customer lists and
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associated goodwill used in the operation of the Health Food Business and
certain other assets, all of which are specifically enumerated on Schedule A
hereto and are hereafter referred to as the "Assets."
(b) At the Closing, BRLI shall issue an aggregate 180,000 shares of its
authorized but unissued common stock and deliver same to Purchaser, registered
in the name of RBF, or if RBF so designates, in the name of Klafter, which upon
delivery to the registered owner together with BRLI and the Purchaser's
assumption of the liabilities enumerated in Schedule B hereto, shall constitute
full payment for the Assets.
(c) Excluded from this sale and purchase are any and all liabilities
(including but not limited to tax liabilities of the Sellers) except for those
liabilities specifically enumerated on Schedule B hereto which shall be assumed
by the Purchaser.
(d) At the Closing, BRLI shall issue an aggregate 20,000 additional shares
of its authorized but unissued common stock and deliver same to Purchaser,
registered in Klafter's name, for delivery to Klafter in full payment for her
non-competition agreement.
2. The Closing
(a) The closing of the sale and purchase (the "Closing") shall take place
at the principal offices of the Purchaser on Tuesday, December 14, 1999 or at
such date and time thereafter as the parties hereto shall mutually agree in
writing (the "Closing Date").
(b) At the Closing, Sellers shall deliver or cause to be
delivered to the Purchaser;
(i) a duly executed bill of sale substantially in the form of
Schedule C hereto ("Bill of Sale") and other good and sufficient instruments of
transfer and conveyance, including assignments if appropriate, as shall vest in
Purchaser all of Sellers' rights, title and interest in and to the Assets, free
from all encumbrances;
(ii) a duly executed assignment to Purchaser of the exclusive right
to use of all of Sellers' registered and unregistered patents, trademarks and
tradenames including the right to the name "Right Body Foods";
(iii) an employment agreement (the "Employment
Agreement") in the form of Schedule D hereto, duly executed by
Klafter;
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(iv) a non-competition agreement (the "Non-Competition
Agreement") in the form of Schedule E hereto, duly executed by
Klafter;
(v) a duly executed assignment of the lease of the Premises in
Syosset, Long Island, New York utilized by RBF in the operation of the Health
Food Business to Purchaser and a duly executed consent from the Landlord with
respect to such assignment;
(vi) an investment representation letter substantially in the form
of Schedule F hereto, with respect to the shares of BRLI common stock to be
issued at the Closing, duly executed by the recipient(s) of such shares; and
(vii) all such other duly executed assignments and consents,
satisfactory in form and content to the Purchaser, as the Purchaser may
reasonably require in order to effectuate transfer of the Assets to the
Purchaser.
(c) At the Closing, the Purchaser shall deliver or cause to be
delivered to RBF and/or Klafter, as the case may be;
(i) a duly executed assumption of certain liabilities agreement
substantially in the form of Schedule G hereto ("Assumption of Certain
Liabilities Agreement") as shall be binding upon both BRLI and the Purchaser
with respect to those liabilities of RBF specifically enumerated on Schedule B;
(ii) an aggregate 180,000 shares of BRLI's authorized but unissued
common stock to RBF, or if RBF so designates in writing, to Klafter, registered
in the recipient's name, in full payment (together with the Assumption of
Certain Liabilities Agreement) for the Assets;
(iii) the Employment Agreement, duly executed by BRLI;
(iv) the Non-Competition Agreement, duly executed by BRLI
and the Purchaser;
(v) an aggregate 20,000 shares of BRLI's authorized but unissued
common stock to Klafter, registered in Klafter's name, in full payment for her
execution and delivery of the Non-Competition Agreement;
(vi) an assumption by Purchaser of the lease for the Premises in
Syosset, Long Island, New York and a guarantee of the Purchaser's obligations
thereunder executed by BRLI; and
(vii) all such other duly executed consents and
assumptions satisfactory in form and content to the Sellers, as the
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Sellers may reasonably require in order to consummate the transactions described
herein.
3. Representations and Warranties of Sellers
(a) As an inducement to Purchaser to enter into this Agreement and
consummate the transactions contemplated hereby, the Sellers, and each of them,
jointly and severally, represent and warrant to BRLI and the Purchaser that:
(i) RBF is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York and has all requisite
power and authority to enter into this Agreement, to consummate the transactions
herein contemplated, and to own, lease and operate its properties. They have no
actual knowledge of any impairment of RBF's power and authority to carry on the
Health Food business as it is now being conducted.
(ii) The execution and delivery of this Agreement, the consummation
of the transactions herein contemplated and the performance, observance and
fulfillment by RBF of all of the terms and conditions hereof on its part to be
performed, observed, and fulfilled, (a) have been duly approved and effectively
authorized by the Board of Directors and by the sole stockholder of RBF and no
other proceedings are necessary to authorize this Agreement or the consummation
of the transactions contemplated hereby, (b) do not and will not (either
immediately or with the lapse of time, or with notice, or both) (1) violate any
provisions of any judicial or administrative order, award, judgment, decree,
statute, rule or regulation applicable to RBF or any of its properties, (2)
conflict with or result in a breach of, constitute a default under, contravene,
result in a forfeiture of a right under, or result in the acceleration of
payment or performance under, any note, bond, mortgage, indenture, deed, trust,
license, lease, agreement, or other instrument or obligation to which RBF is a
party or by which RBF or any of the Assets may be bound or affected, or (3)
result in the creation or imposition of any lien, security interest, charge or
other encumbrance against any of the Assets.
(iii) This Agreement has been duly and validly executed and
delivered by the Sellers and upon execution and delivery, will constitute valid,
binding and enforceable obligations of the Sellers subject to bankruptcy,
insolvency and similar laws affecting creditors rights generally and subject to
general principles of equity. No petition in bankruptcy has been filed by or
against either of the Sellers. The Sellers have the right, power, legal capacity
and authority to enter into and perform their obligations under this Agreement
(and with respect to Klafter, her obligations under the Employment Agreement and
the Non-Competition Agreement) and no consent of any third party is necessary
with respect thereto which has not been obtained.
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(iv) There is no material action, dispute, claim, litigation,
arbitration, investigation, or other proceeding, at law or in equity or by or
before any court or governmental or administrative body (U.S. or foreign),
pending or threatened against RBF, its business or properties, or with respect
to the transactions contemplated by this Agreement, and RBF is not subject to
any adverse judicial, governmental or agency judgment, decree or order, nor do
the Sellers know of any basis for any such action, dispute, claim, litigation,
arbitration, investigation or other proceeding.
(v) RBF has made, and will continue to make, adequate provision for
payment of its obligations, and RBF is not in default of and will not with the
passage of time or otherwise become in default of, any current or long-term
liabilities (including contingent liabilities), debts or obligations,
contractual or otherwise.
(vi) Immediately after the Closing, RBF will cease all operations
relating to the Health Food Business and will engage solely in collecting any
receivables outstanding on the Closing Date and paying all payables and other
obligations which are not expressly assumed hereunder by BRLI and the Purchaser.
RBF shall be permitted to maintain a bank account for such purposes.
Furthermore, RBF will not engage in any facet of the Health Food Business
anywhere in the continental United States east of the Mississippi River for a
period of five (5) years after the Closing.
(vii) Annexed hereto as Schedule H is a copy of the sole
governmental license which RBF has obtained in connection with its operation of
the Health Food Business. Sellers have no actual knowledge that said license is
not in full force and effect.
(viii) Annexed hereto as Schedule I is a schedule listing each and
every inspection or other visit to RBF's premises by any federal, state or local
governmental organization or authority which is or was related to the Health
Food Business including (a) the date of such inspection or visit; (b) the name
of the organization or authority; (c) the substance of the communication from
the organization or authority after such visit; and (d) the responsive action
(if any) taken by RBF.
(ix) Since its inception, the food products sold and/or distributed
by RBF in its operation of the Health Food Business have been tested for quality
by independent testing entities and RBF has not received any negative reports
concerning such tests.
(x) From August 31, 1999 through the date hereof, there has been no
material adverse change in RBF's financial condition, operating results or
business, and no sale or distribution of
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assets and no incurrence of liabilities or indebtedness, except in each case, in
the ordinary course of its business.
(xi) As soon as possible after the Closing but no later than two (2)
weeks after the Closing, RBF will file a duly executed amendment to its
certificate of incorporation with the New York Department of State, changing its
name from "Right Body Foods, Inc."
(b) The foregoing representations and warranties are made with the
knowledge and expectation that the Purchaser is placing complete reliance
thereon.
4. Representations and Warranties of BRLI and Purchaser
----------------------------------------------------
(a) As an inducement to the Sellers to enter into this Agreement and
consummate the transactions contemplated hereby, BRLI and Purchaser, and each of
them, represent and warrant:
(i) BRLI and Purchaser are each corporations duly organized, validly
existing and in good standing under the laws of the State of New Jersey and each
has all requisite corporate power and authority to enter into this Agreement, to
consummate the transactions herein contemplated, to own, lease and operate its
properties and to carry on its business as it is now being conducted, and each
is duly licensed, authorized and qualified to do business and is in good
standing in all jurisdictions in which the conduct of its business or the
ownership or leasing of its properties requires it to be so qualified,
authorized or licensed.
(ii) The execution and delivery of this Agreement, the consummation
of the transactions herein and therein contemplated and the performance,
observance and fulfillment by BRLI and by Purchaser of all of the terms and
conditions hereof and thereof, on each of their parts to be performed, observed,
and fulfilled, (A) have all been approved and effectively authorized by BRLI and
by Purchaser's boards of directors and no other proceedings on the part of BRLI
or of Purchaser are necessary to authorize this Agreement or the consummation of
the transactions contemplated hereby and thereby, (B) do not and will not
(either immediately or with the lapse of time, or with notice, or both) (1)
conflict with any of the provisions of the Articles of Incorporation or by-laws
of BRLI or of Purchaser, violate any provisions of any judicial or
administrative order, award, judgment, decree, statute, rule or regulation
applicable to BRLI or Purchaser or any of their properties, (2) conflict with or
result in a breach of, constitute a default under, contravene, result in a
forfeiture of a right under, or result in the acceleration of payment or
performance under, any note, bond, mortgage, indenture, deed, trust, license,
lease, agreement, or other instrument or obligation to which BRLI or Purchaser
is a party or by which BRLI or Purchaser or any of
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their properties may be bound or affected, or (3) result in the creation or
imposition of any lien, security interest, charge or other encumbrance against
any properties of BRLI or Purchaser.
(iii) This Agreement has been duly and validly executed and
delivered by BRLI and by Purchaser and upon execution and delivery, will
constitute valid, binding and enforceable obligations of BRLI and Purchaser.
BRLI and the Purchaser each has the right, power, legal capacity and authority
to enter into and perform its obligations under this Agreement and no consent of
any third party is necessary with respect thereto, which has not been obtained.
No petition in bankruptcy has been filed by or against or is contemplated to be
filed by BRLI or the Purchaser.
(iv) There is no material action, dispute, claim, litigation,
arbitration, investigation, or other proceeding, at law or in equity or by or
before any court or governmental or administrative body (U.S. or foreign),
pending or threatened against BRLI or the Purchaser, or against their businesses
or properties, or with respect to the transactions contemplated by this
Agreement, and neither BRLI nor the Purchaser is subject to any adverse
judicial, governmental or agency judgment, decree or order, nor does BRLI or the
Purchaser know of any basis for any such action, dispute, claim, litigation,
arbitration, investigation or other proceeding.
(v) At the Closing Date, BRLI will have not more than 8,000,000
shares of its common stock, $.01 par value, issued and outstanding, each share
of which is entitled to one vote on all matters on which stockholders are
entitled to vote. In addition, at such date, the only other outstanding class of
BRLI capital stock will be Series A Senior Preferred Stock, $.10 par value
("Senior Preferred Stock") of which 604,078 shares were issued and outstanding.
Each share of Senior Preferred Stock is entitled to one vote on all matters on
which stockholders are entitled to vote. Furthermore, each share of Senior
Preferred Stock is convertible into one share of common stock at a conversion
price of $.75.
(b) The foregoing representations and warranties are made with the
knowledge and expectation that the Sellers are placing complete reliance
thereon.
5. Indemnification
(a) Provided that the representations made by BRLI and by Purchaser in
this Agreement are accurate and BRLI and Purchaser are in compliance with their
obligations under this Agreement, the Sellers and each of them, jointly and
severally hereby agree to indemnify and hold harmless BRLI and Purchaser, and
each of them, against and in respect of:
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(i) all liabilities and obligations of, or claims against BRLI
and/or the Purchaser based on liabilities and obligations of RBF or the
individual Seller in connection with the operation up to the Closing Date of the
Health Food Business, including but not limited to liabilities (if any) based on
alleged violations of food processing, licensing and/or labeling laws as well as
liabilities for income, employment, sales and all other taxes as well as
penalties and interest thereon (if any); unless same shall result from the acts
or omissions of BRLI and/or the Purchaser or are liabilities of RBF expressly
assumed hereunder by BRLI and/or the Purchaser;
(ii) any damage or deficiency resulting from any material
misrepresentation, breach of warranty or nonfulfillment of any agreement on the
part of any of the Sellers under this Agreement or from any material
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to Purchaser under this Agreement; and
(iii) all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses incident to any of the foregoing.
(b) Provided that the representations made by the Sellers in this
Agreement are accurate and each Seller is in compliance with its and her
obligations under this Agreement, BRLI and the Purchaser, and each of them
hereby agrees to indemnify and hold harmless the Sellers and each of them,
against and in respect of:
(i) all liabilities and obligations of, or claims against the
Sellers or any of them with respect to the Assets, for periods after the Closing
as a result of Purchaser's purchase of the Assets hereunder unless same shall
result from the acts or omissions of Sellers;
(ii) any damage or deficiency resulting from any material
misrepresentation, breach of warranty, or nonfulfillment of any agreement on the
part of Purchaser under this Agreement or from any material misrepresentation in
or omission from any certificate or other instrument furnished or to be
furnished to Sellers under this Agreement; and
(iii) all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses incident to any of the foregoing.
(c) In the event that any parties hereunder (the "Indemnitees") elect to
assert their rights pursuant to this Section 5 to indemnification against the
other parties hereto (the "Indemnitors"), prior to settling or defending against
any claim as to which they may seek indemnification hereunder, the Indemnitees
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shall give notice to the Indemnitors of such election and the claim with respect
to which indemnification is sought. The Indemnitors shall have the right within
seven (7) days after such notice, time being of the essence, to give notice to
the Indemnitees that they elect to contest such claim and thereupon, upon
posting reasonably adequate security with the Indemnitees, will be entitled at
their own expense, to contest same. In the event they so elect to contest the
claim, the Indemnitors will also have the right to settle same at their own
expense with the Indemnitees' consent, which consent will not be unreasonably
withheld.
6. Expenses
Each of the parties shall pay its or her own expenses (including without
limitation, the fees and expenses of the agents, representatives, counsel and
accountants) incidental to the preparation and consummation of this Agreement.
7. Brokerage
Each party shall indemnify and hold the other parties free and harmless
from all losses, damages, costs, and expenses (including attorney's fees) that
may be suffered as a result of claims brought by any broker or finder seeking
compensation on account of this transaction arising out of the actions of such
party.
8. Survival of Representations and Warranties
The parties agree that the representations, warranties, agreements, and
covenants contained in this Agreement or in any other documents delivered in
accordance with or by virtue of this Agreement shall survive the execution and
delivery of this Agreement and all other instruments in connection herewith or
therewith.
9. Notices
All notices and other documents required or permitted to be given pursuant
to this Agreement shall be in writing and shall be deemed to have been given if
delivered by hand with an acknowledgement of receipt therefor or mailed by
registered or certified mail, return receipt requested, to the parties at the
addresses provided above (or such other address for a party as shall be
specified by notice given pursuant to this paragraph) with a copy by certified
mail, return receipt requested, to the attorneys for the respective parties at
the following addresses: for Sellers - Vitale & Levitt, 445 Broadhollow Road,
Suite 124, Melville, New York 11747 and for BRLI and the Purchaser - Tolins &
Lowenfels, A Professional Corporation, 12 East 49th Street, New York, New York
10017.
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10. Binding Effect and Assignability
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs and assigns.
11. Governing Law and Jurisdiction
This Agreement shall be construed and enforced in accordance with the laws
of the State of New Jersey without regard to the principle of the conflict of
laws. The parties hereto consent to the in personam jurisdiction of the courts
of the State of New Jersey and further agree that any action with respect to
this Agreement shall be commenced and prosecuted only in such courts. The
parties hereby waive trial by jury in any action or proceeding arising under
this Agreement.
12. Remedies
No remedy herein conferred upon or reserved to a party is intended to be
exclusive of any other available remedy, but each and every such remedy shall be
cumulative and in addition to every other remedy given under this Agreement or
in connection with this Agreement and now or hereafter existing at law or in
equity.
13. Entire Agreement
This Agreement, the Employment Agreement and the Non- Competition
Agreement constitute the entire agreement among the parties with respect to the
subject matter contained herein and therein and supersedes all prior agreements
and understandings, oral or written. This Agreement and such other Agreements
may not be amended or modified except in writing executed by each of the parties
hereto and thereto.
14. Confidentiality of Agreement and Disclosure
The parties agree that the terms of this Agreement and the transactions
contemplated hereby will be kept confidential and not publicly disclosed until
such time and in such manner as shall be determined by the Purchaser, although
Klafter shall be permitted to disclose the terms of the transaction to members
of her immediate family and her professional advisors.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
/s/Rebecca Klafter
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Rebecca Klafter (individually)
Right Body Foods Inc.
By /s/Rebecca Klafter
Rebecca Klafter, President
Bio-Reference Laboratories, Inc.
By /s/Howard Dubinett
Howard Dubinett, Executive Vice President
BRLI No. 1 Acquisition Corp.
By /s/Howard Dubinett
Howard Dubinett, Executive Vice President
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