Attached files
Exhibit
10.2
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this
“Agreement”), dated as of December 15, 2020
(“Effective
Date”), is entered into
between VeroBlue Farms USA, Inc., a Nevada corporation
(“VBF”), VBF Transport, Inc., a Delaware
corporation (“Transport”), and Iowa’s First, Inc., an Iowa
corporation (“Iowa’s
First”) (each a
“Seller” and collectively, “Sellers”) and NaturalShrimp, Inc., a Nevada
corporation (“Buyer”).
RECITALS
WHEREAS, VBF owns an inoperative aquaculture
business based in Webster City, Iowa, with facilities in Blairsburg
and Buckeye, Iowa (the “Business”);
WHEREAS,
VBF wishes to sell to Buyer, and Buyer wishes to purchase from VBF,
substantially all Tangible Property of the Business, subject to the
terms and conditions set forth herein;
WHEREAS,
Transport and Iowa’s First are wholly-owned subsidiaries of
VBF and own Vehicles and Real Property related to the Business;
and
WHEREAS,
Iowa’s First and Transport have been made parties to this
Agreement for the purpose of transferring their respective assets
to Buyer and joining in the representations, warranties and
indemnification obligations.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I PURCHASE AND SALE
Section 1.01 Purchase and Sale
of Assets. On the terms and
subject to the conditions set forth herein, at the Closing (as
hereinafter defined), Sellers shall sell, assign, transfer, convey
and deliver to Buyer, and Buyer shall purchase from Sellers, on an
“as is” basis, free and clear of any Encumbrance all of
Sellers’ right, title and interest in, to and under all of
Sellers’ property and tangible assets of every kind and
description located at Webster City, Iowa, Buckeye, Iowa,
Blairsburg, Iowa and Byhalia, Mississippi, that was used or
intended to be used in connection with the Business (but excluding
the “Excluded Assets) (collectively, the
“Purchased
Assets”) including the
following:
(a) all items of equipment, inventory, supplies,
parts, tires, accessories and tangible personal property of every
kind, nature and description owned by VBF including those set forth
and identified on Schedule
1.01(a) (“Tangible
Property”);
(b) those motor vehicles owned by Transport and set
forth on Schedule
1.01(b)
(“Vehicles”); and
(c) all
of Iowa’s First’s right, title and interest in and to
the real property (together with all plants, buildings, structures,
fixtures, fittings, systems and other improvements located on such real property and all
easements, privileges, licenses, rights of way, permits, riparian
and other water rights, hereditaments, appurtenances and other
rights pertaining to or accruing to the benefit of such owned real
property), set forth on Schedule
1.01(c) (“Real
Property”);
and
(d) all
manufacturers warranties or other warranties relating to the
Purchased Assets, if any.
Section 1.02 Excluded
Assets. Other than the
Purchased Assets, Buyer expressly understands and agrees that it is
not purchasing or acquiring, and Sellers are not selling or
assigning, any other assets or properties of Sellers, and all such
other assets and properties shall be excluded from the Purchased
Assets (collectively, the "Excluded
Assets"). Excluded Assets
consist of those assets, properties and rights specifically set
forth on Schedule 1.02
and all intangible assets including
without limitation causes of action and Intellectual Property
Rights.
Section 1.03 No
Liabilities. Buyer shall not
assume or be responsible for any Liabilities related to the
Purchased Assets, including third-party litigation, or any other
Liabilities of Sellers that arose prior to Closing (the
“Retained
Liabilities”). The
Retained Liabilities shall remain the sole liability of Sellers and
Sellers will have paid, performed, and discharged the Retained
Liabilities prior to Closing.
Section 1.04 Purchase
Price. The purchase price Buyer
shall pay to Sellers for the Purchased Assets shall be Ten Million
Dollars ($10,000,000) (the “Purchase
Price”), payable as
follows: (i) Five Million Dollars ($5,000,000), in cash at Closing
(“Closing
Payment”), (ii) Three
Million Dollars ($3,000,000) payable in thirty-six (36) months with
interest thereon at the rate of five percent (5%) per annuum,
interest only payable quarterly on the first day of the quarter,
with the remaining balance to be paid to VBF as a balloon payment
on the maturity date, as further set forth in the promissory note,
security agreement and mortgage attached hereto as
Exhibit
B (“Promissory Note
A”), and (iii) Two
Million Dollars ($2,000,000) payable in forty-eight (48) months
with interest thereon at the rate of five percent (5%) per annuum,
interest only payable quarterly on the first day of the quarter,
with the remaining balance to be paid to VBF as a balloon payment
on the maturity date, as further set forth in the promissory note,
security agreement and mortgage attached hereto as
Exhibit
C (“Promissory Note
B”). Sellers agree and
instruct Buyer to make payment of the Closing Payment to First
American Title Company, who will disburse funds to VBF on
Sellers’ behalf and Sellers shall assume full responsibility
for the proper allocation of such payment as between
Sellers.
Section 1.05 Allocation of
Purchase Price. The Purchase
Price shall be allocated among the Purchased Assets and the related
Noncompetition and Nonsolicitation Agreement entered into by the
parties, dated of even date herewith (the “Noncompete
Agreement”) for all purposes (including tax and financial
accounting) as shown on the allocation schedule set forth on
Schedule
1.05 (the "Allocation
Schedule"). The Allocation
Schedule is prepared in accordance with Section 1060 of the
Internal Revenue Code of 1986, as amended and is attached hereto as
Schedule 1.05. Buyer and each Seller shall file all returns,
declarations, reports, information returns and statements and other
documents relating to taxes (including amended returns and claims
for refund) ("Tax Returns") in a manner consistent with the Allocation
Schedule.
Section 1.06 Non-Assignable
Assets.
(a) Notwithstanding
anything to the contrary in this Agreement, this Agreement shall
not constitute a sale, assignment or transfer of any Purchased
Asset if such sale, assignment or transfer: (i) violates applicable
law; or (ii) requires the consent or waiver of a person or entity
who is not a party to this Agreement and such consent or waiver has
not been obtained prior to the Closing (as hereinafter
defined).
(b) To
the extent that any Purchased Asset cannot be transferred to Buyer
pursuant to this Section 1.06, Buyer and the appropriate Seller
shall use commercially reasonable efforts to enter into such
arrangements (such as subleasing, sublicensing or subcontracting)
to provide to the parties the economic and, to the extent permitted
under applicable Law, operational equivalent of the transfer of
such Purchased Asset to Buyer as of the Closing. Buyer shall, as
agent or subcontractor for Sellers, pay, perform and discharge
fully the liabilities and obligations of Sellers thereunder from
and after the Closing Date. To the extent permitted under
applicable law, each Seller shall, at Buyer's expense, hold in
trust for and pay to Buyer promptly upon receipt thereof, all
income, proceeds and other monies received by that Seller from and
after the Closing Date, to the extent related to such Purchased
Asset in connection with the arrangements under this Section 1.06.
Sellers shall be permitted to set off against such amounts all
direct costs associated with the retention and maintenance of such
Purchased Assets.
ARTICLE II CLOSING
Section 2.01 Closing.
The closing of the transactions
contemplated by this Agreement (the “Closing”) will take place electronically at a time
to be mutually agreed upon by VBF and Buyer on: (i) the third
Business Day following the satisfaction or waiver by the
appropriate party of all the conditions precedent to Closing
specified in Article VI hereof, but in any event no later than
December 31, 2020; or (ii) at any other place, time or date as may
be mutually agreed in writing by VBF and Buyer. The date on which
the Closing occurs is referred to herein as the
“Closing Date” and the Closing shall be deemed effective
as of 12:01 a.m. on the Closing Date.
Section 2.02 Closing
Deliverables.
(a)
At
the Closing, VBF shall deliver to Buyer the following:
(i)
keys
to the facilities located on the Real Property and the
Vehicles;
(ii)
a bill of sale in the form of Exhibit D
hereto (the “VBF Bill of
Sale”), duly executed by
VBF, transferring the Tangible Property included in the Purchased
Assets to Buyer;
(iii)
a
certificate of the Secretary (or equivalent officer) of VBF
certifying as to (A) the resolutions of the board of directors of
VBF, which authorize the execution, delivery and performance of
this Agreement by VBF, including all documents to be delivered
pursuant to Section 2.02(a), and the other agreements,
instruments and documents required to be delivered
in connection with this Agreement or at the Closing (collectively
and for any party, the "Transaction
Documents") and the
consummation of the transactions contemplated hereby and thereby
and (B) the names and signatures of the officers of VBF authorized
to sign this Agreement and the other Transaction Documents;
and
(iv)
such
other customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to Buyer,
as may be required by VBF, Transport and Iowa’s First to give
effect to the transactions contemplated by this
Agreement.
(b)
At
the Closing, Transport shall deliver to Buyer the
following:
(i)
a bill of sale in the form of Exhibit D
hereto (the “Transport Bill of
Sale”), duly executed by
Transport, transferring the Vehicles included in the Purchased
Assets to Buyer;
(ii)
a
certificate of the Secretary (or equivalent officer) of Transport
certifying as to (A) the resolutions of the board of directors of
Transport, which authorize the execution, delivery and performance
of this Agreement by Transport, including all documents to be
delivered pursuant to Section 2.02(b), and the other Transaction
Documents and the consummation of the transactions contemplated
hereby and thereby and (B) the names and signatures of the officers
of Transport authorized to sign this Agreement and the other
Transaction Documents; and
(iii)
such
other customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to Buyer,
as may be required by Transport to give effect to the transactions
contemplated by this Agreement.
(c)
At
the Closing, Iowa’s First shall deliver to Buyer the
following:
(i)
a Deed in form and substance satisfactory to Buyer
(each, a “Deed”) for each parcel of Real Property (as
hereafter defined), duly executed and notarized by Iowa’s
First;
(ii)
a certificate of the Secretary (or equivalent officer) of
Iowa’s First certifying as to (A) the resolutions of the
board of directors of Iowa’s First, which authorize the
execution, delivery and performance of this Agreement by
Iowa’s First, including all documents to be delivered
pursuant to Section 2.02(c), and the other Transaction Documents
and the consummation of the transactions contemplated hereby and
thereby and (B) the names and signatures of the officers of
Iowa’s First authorized to sign this Agreement and the other
Transaction Documents; and
(iii)
such
other customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to Buyer,
as may be required
by Iowa’s First to give effect to the transactions
contemplated by this Agreement.
(d)
At
the Closing, Buyer shall deliver the following:
(i)
the
Closing Payment to First American Title Company;
(ii)
the
VBF Bill of Sale to VBF, duly executed by Buyer;
(iii)
the
Transport Bill of Sale to Transport, duly executed by
Buyer;
(iv)
Promissory
Note A and the related mortgage to VBF, duly executed by
Buyer;
(v)
Promissory
Note B and the related mortgage to VBF, duly executed by
Buyer;
(vi)
a
certificate of the Secretary (or equivalent officer) of Buyer to
VBF certifying as to (A) the resolutions of the Board of Directors
of Buyer, which authorize the execution, delivery and performance
of this Agreement, including all documents to be delivered pursuant
to this Section 2.02(d), and the other Transaction Documents and
the consummation of the transactions contemplated hereby and
thereby and (B) the names and signatures of the officers of Buyer
authorized to sign this Agreement and the other Transaction
Documents; and
(vii)
such
other customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to Buyer,
as may be required to give effect to the transactions contemplated
by this Agreement.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers,
jointly and severally, represent and warrant to Buyer that the
statements contained in this ARTICLE III are true and correct as of
the date hereof. For purposes of this ARTICLE III,
“Sellers’ knowledge,” “knowledge of
Sellers” and any similar phrases shall have the meaning set
forth on Exhibit A.
Section 3.01 Organization and
Authority of Sellers; Enforceability. VBF is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Nevada. Transport is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware.
Iowa’s First is a corporation duly organized, validly
existing and in good standing under the laws of the state of Iowa.
Sellers have full corporate power and authority to enter into this
Agreement and the documents to be delivered hereunder, to carry out
its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by
Sellers of this Agreement and the documents to be delivered
hereunder and the consummation of the transactions contemplated
hereby have been duly authorized by Sellers’ respective
boards of directors. This Agreement and the documents to
be delivered
hereunder have been duly executed and delivered by Sellers, and
(assuming due authorization, execution and delivery by Buyer) this
Agreement and the documents to be delivered hereunder constitute
legal, valid and binding obligations of Sellers, enforceable
against Sellers in accordance with their respective
terms.
Section 3.02 No Conflicts;
Consents. The execution,
delivery and performance by the Sellers of this Agreement and the
documents to be delivered hereunder, and the consummation of the
transactions contemplated hereby, do not and will not: (a) violate
or conflict with the organizational documents of Sellers; (b)
violate or conflict with any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Sellers or the
Purchased Assets, including without limitation, any Order or
Judgment of the US Bankruptcy Court; (c) conflict with, or result
in (with or without notice or lapse of time or both) any violation
of, or default under, or give rise to a right of termination,
acceleration or modification of any obligation or loss of any
benefit under any contract or other instrument to which Sellers are
a party or to which any of the Purchased Assets are subject; or (d)
result in the creation or imposition of any Encumbrance on the
Purchased Assets. Except as otherwise set forth in this Agreement,
no consent, approval, waiver or authorization is required to be
obtained by Sellers from any person or entity (including any
governmental authority) in connection with the execution, delivery
and performance by Sellers of this Agreement and the consummation
of the transactions contemplated hereby.
Section 3.03 Legal
Proceedings. Except as set
forth in Schedule 3.03, There is no Action of any nature pending
or, to Sellers’ knowledge, threatened against or by Sellers
or any of them that challenges or seeks to prevent, enjoin or
otherwise delay the transactions contemplated by this Agreement. To
Sellers’ knowledge, no event has occurred, or circumstances
exist that may give rise to, or serve as a basis for, any such
Action.
Section 3.04 Title to
Assets. Sellers have good and
indefeasible title to the Assets, free and clear of all
Encumbrances. Buyer shall receive at the Closing good and
indefeasible title to the Assets, free and clear of all
Encumbrances, and at the Closing, the Purchased Assets shall not be
subject to any Liability or obligations (including under theories
of successor liability). To the best of Sellers’ knowledge,
Sellers have not entered into any agreements which would limit
their ability to transfer title to their respective Purchased
Assets.
Section 3.05 Compliance with
Law. To the best of
Sellers’ knowledge, Schedule 3.05
identifies each Governmental Order
applicable to the Purchased Assets or the Real Property, and no
such Governmental Order has, has had or will have a Material
Adverse Effect.
Section 3.06
Taxes. There are no Tax liens
in effect with respect to or filed against the Purchased Assets or
the Real Property and, to the best of Sellers’ knowledge,
none are threatened.
Section 3.07 Environmental
Issues, Hazardous Materials. To
the best of Norman McCowan and Ed Kerzner’s actual knowledge,
in the three (3) years immediately preceding Closing, no Seller has
done, caused, or allowed to be done any of the following
acts:
(a) Illegally
stored or caused to be stored Hazardous Materials on any of the
Real Property;
(b) Released
or caused to be released Hazardous Materials on the Real Property;
or
(c) Disposed
of or handled Hazardous Material in a manner contrary to
Environmental Laws.
Section 3.08
Notices. To the best of Norman
McCowan, Ed Kerzner, and Allan Sutherland’s actual knowledge,
in the three (3) years immediately preceding Closing, with the
exception of the Wastewater Discharge Permit issued by the City of
Webster City and except as set forth in those documents provided by
Sellers to Buyer via the data room prior to Closing, Sellers have
received no notice of any violation of Environmental Laws that
would currently have a Material Adverse Effect on the Purchased
Assets. None of Norman McCowan, Ed Kerzner, nor Allan Sutherland
have actual knowledge of any fact or circumstance that may give
rise to a violation of Environmental Law.
Section 3.09 Environmental
Documents. To the best of
Sellers’ knowledge, Sellers have made available to Buyer
copies of all environmental assessments, reports, audits and other
documents that relate to the Real Property.
Section 3.10 Affiliate
Relationships. There are no
material contractual arrangements between or among any of Seller or
and any Affiliate thereof that (a) are currently in effect, and (b)
relate to the Purchased Assets.
Section 3.11
Bankruptcy. Except as set forth
on Schedule 3.11, all matters affecting the Purchased Assets or
title to the Purchased Assets involved in the bankruptcy of
VeroBlue Farms,
USA, Inc. et al, Case No.
18-01297, filed in the US Bankruptcy Court, Northern District of
Iowa have been resolved, to the best of Sellers’
knowledge.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer
represents and warrants to VBF that the statements contained in
this ARTICLE IV are true and correct as of the date hereof. For
purposes of this ARTICLE IV, “Buyer’s knowledge,”
“knowledge of Buyer” and any similar phrases shall have
the meaning set forth on Exhibit A.
Section 4.01 Organization and
Authority of Buyer; Enforceability. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Nevada. Buyer has full corporate power and authority to enter into
this Agreement and the documents to be delivered hereunder, to
carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Buyer of this Agreement and the documents to be
delivered hereunder and the consummation of the transactions
contemplated hereby have been duly authorized by Buyer’s
Board of Directors. This Agreement and the documents to be
delivered hereunder have been duly executed and delivered by Buyer,
and (assuming due authorization, execution and delivery by Sellers)
this Agreement and the documents to be delivered hereunder
constitute legal, valid and binding obligations of Buyer
enforceable against Buyer in accordance with their respective
terms.
Section 4.02 No Conflicts;
Consents. The execution,
delivery and performance by Buyer of this Agreement and the
documents to be delivered hereunder, and the consummation of the
transactions contemplated hereby, do not and will not: (a) violate
or conflict with the organizational documents of Buyer; or (b)
violate or conflict with any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Buyer. No consent,
approval, waiver or authorization is required to be obtained by
Buyer from any person or entity (including any governmental
authority) in connection with the execution, delivery and
performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby.
Section 4.03 Legal
Proceedings. There is no Action
of any nature pending or, to Buyer’s knowledge, threatened
against or by Buyer that challenges or seeks to prevent, enjoin or
otherwise delay the transactions contemplated by this Agreement. No
event has occurred, or circumstances exist that may give rise to,
or serve as a basis for, any such Action.
Section 4.04 Independent
Investigation. Buyer has
conducted its own independent investigation, review and analysis of
the Purchased Assets, and acknowledges that it has been provided
adequate access to the personnel, properties, assets, premises,
books and records and other documents and data of Sellers for such
purpose. Buyer acknowledges and agrees that: (a) in making its
decision to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer has relied solely upon its
own investigation and the express representations and warranties of
Sellers set forth in Article III of this Agreement; and (b) neither
Sellers nor any other person has made any representation or
warranty as to Sellers, the Business, the Purchased Assets or this
Agreement, except as expressly set forth in Article III of this
Agreement.
Section 4.05 “As
is” Nature of Assets, Permits. In making the decision to enter into this
Agreement and consummate the transactions contemplated hereby, (a)
Buyer acknowledges that the Purchased Assets were not designed for
Buyer’s operations; (b) Buyer acknowledges the existence of
the bankruptcy proceedings related to the Sellers; (c) Buyer has
not relied on the operating condition of the Purchased Assets,
which Buyer acknowledges have been sitting idle, may not operate,
and may not be suitable for the Business or useful for any of
Buyer’s purposes;
(d) Buyer
has not relied upon any representations and warranties of any of
the Sellers except as explicitly set forth in writing herein; (e)
Buyer has agreed to the Purchase Price understanding and
acknowledging that it will not be adjusted due to the operating
condition, sufficiency or usefulness of the Purchased Assets; and
(f) Buyer has not relied on any of Sellers’ permits, licenses
and other agreements, including those permits, licenses and other
agreements that may be required by the city of Webster City, Iowa,
to operate the Business, being current, operational or otherwise
suitable for the Business or any of Buyer’s
purposes.
ARTICLE V COVENANTS
Section 5.01 Transfer
Taxes. All transfer, sales,
use, registration, documentary, stamp, value added and other such
taxes and fees (including any penalties and interest) incurred in
connection with this Agreement and the other Transaction Documents,
shall be borne and paid by Buyer when due. Buyer shall, at its own
expense, timely file any Tax Return or other document with respect
to such Taxes or fees (and Sellers shall cooperate with respect
thereto as necessary).
Section 5.02 Bulk Sales
Laws. The parties hereby waive
compliance with the provisions of any bulk sales, bulk transfer or
similar laws of any jurisdiction that may otherwise be applicable
with respect to the sale of any or all of the Purchased Assets to
Buyer.
Section 5.03 Further
Assurances. Following the
Closing, each of the parties hereto shall execute and deliver such
additional documents, instruments, conveyances and assurances and
take such further actions, without additional consideration or
undue delay as may be reasonably required to carry out the
provisions hereof and give effect to the transactions contemplated
by this Agreement and the other Transaction
Documents.
Section 5.04
Insurance. Buyer acknowledges
that Sellers’ insurance policies will terminate as of
Closing. Buyer has, and will continue to maintain post-Closing,
insurance coverage as may be required to hold Sellers harmless from
any and all Liabilities related to the Purchased Assets that are
incurred by Buyer post-Closing.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
Section 6.01 Conditions
Precedent to Sellers’ Obligations. The obligations of Sellers at the Closing shall
be subject to the satisfaction of the following conditions
precedent at Closing (each of which may be waived by
Sellers):
(a) Representations.
All representations and warranties of Buyer contained herein shall
be true and correct on the Closing Date in all material respects as
if made on such date; all agreements of Buyer contained herein
shall have been complied with; and Sellers shall have received a
certification of Buyer, dated the Closing Date, to each such
effect.
(b) Satisfaction of Financial
Review. VBF shall have received
and reviewed Buyer’s Form S-1, including its most recent
amendment, on file with the Securities and Exchange Commission and
Buyer’s balance sheet, dated as of the month end immediately
preceding Closing, to its reasonable satisfaction, as determined by
VBF in its sole discretion.
(c) Funding
Verification. VBF shall have
received written verification from a financial institution
acceptable to VBF that Buyer is capable of paying First American
Title Company, on Sellers’ behalf, the Closing Payment on the
Closing Date.
(d) Closing
Deliveries. Buyer shall have
executed and delivered the Transaction Documents required by
Section 2.02(d).
(e) Approval of the Board of
Sellers. Each board of
directors of Sellers shall have approved the Agreement and the
transactions contemplated hereby.
(f) Shareholder
Approval. The sole shareholder
of VBF, by written consent, shall have approved this Agreement and
the transactions contemplated hereby.
(g) Actions or
Proceedings. No preliminary or
permanent injunction or other order by any federal or state court
of competent jurisdiction that makes it illegal or otherwise
prevents the consummation of the transactions contemplated hereby
shall have been issued and shall remain in
effect.
Section 6.02 Conditions
Precedent to the Buyer’s Obligations. The obligations of Buyer at the Closing shall be
subject to the satisfaction of the following conditions precedent
at Closing (each of which may be waived by the
Buyer):
(a) Representations.
All representations and warranties of Sellers contained herein
shall be true and correct in all material respects on the Closing
Date as if made on such date.
(b) No Material Changes to
Assets. From the Effective Date
until the Closing Date, there has not been any change, event,
condition or development that has had a Material Adverse Effect on
the Purchased Assets, in the aggregate.
(c) VBF Closing
Deliveries. VBF shall have
executed and delivered the Transaction Documents required by
Section 2.02(a).
(d) Transport Closing
Deliveries. Transport shall
have executed and delivered the Transaction Documents required by
Section 2.02(b).
(e) Iowa’s First Closing
Deliveries. Iowa’s First
shall have executed and delivered the Transaction Documents
required by Section 2.02(c).
(f) Board of Directors
Approval. The Board of
Directors of Buyer shall have approved of the Agreement and the
transactions contemplated hereby.
(g) Actions or
Proceedings. No preliminary or
permanent injunction or other order by any federal or state court
of competent jurisdiction that makes it illegal or otherwise
prevents the consummation of the transactions contemplated hereby
shall have been issued and shall remain in
effect.
ARTICLE VII INDEMNIFICATION
Section 7.01 Survival.
Except as it relates to Buyer’s
payment of the Purchase Price, including Buyer’s payment of
the Closing Payment and Buyer’s obligations under Promissory
Note A and Promissory Note B, and their respective mortgages, all
representations, warranties, covenants and agreements contained
herein and all related rights to indemnification shall survive the
Closing for a period ending seven and one half (7.5) months
following the Closing Date (“Survival
Period”). Neither Sellers
nor Buyer shall be liable to the other party with respect to any
claim for the breach or inaccuracy of any representation or
warranty pursuant to this Agreement unless written notice of a
claim thereof is delivered to the other party prior to expiration
of the Survival Period.
Section 7.02 Indemnification by
Sellers. Sellers, jointly and
severally, shall defend, indemnify and hold harmless Buyer, its
affiliates and their respective stockholders, directors, officers
and employees from and against all Losses arising from or relating
to:
(a) any
inaccuracy in or breach of any of the representations or warranties
of Sellers contained in this Agreement or any document to be
delivered hereunder;
(b)
all
Liabilities of Sellers including the Retained
Liabilities;
(c) any
breach or non-fulfillment of any covenant, agreement or obligation
to be performed by Sellers pursuant to this Agreement or any
document to be delivered hereunder; or
(d) the
costs and expenses directly related to defending title to any of
the Purchased Assets during, after, related to or arising out of or
as a result of the bankruptcy proceedings.
Section 7.03 Indemnification by
Buyer. Buyer shall defend,
indemnify and hold harmless VBF, its affiliates and their
respective stockholders, directors, officers and employees from and
against all Losses, arising from or relating
to:
(a) any
inaccuracy in or breach of any of the representations or warranties
of Buyer contained in this Agreement or any document to be
delivered hereunder; or
(b) any
breach or non-fulfillment of any covenant, agreement or obligation
to be performed by Buyer pursuant to this Agreement or any document
to be delivered hereunder.
Section 7.04 Indemnification
Procedures. Whenever any claim
shall arise for indemnification within the Survival Period, the
party entitled to indemnification (the “Indemnified
Party”) shall promptly
provide written notice of such claim (a ”Claim Notice”)
to the other party (the “Indemnifying
Party”). In connection
with any claim giving rise to indemnity hereunder resulting from or
arising out of any Action by a person or entity who is not a party
to this Agreement, the Indemnifying Party, at its sole cost and
expense and upon written notice to the Indemnified Party, may
assume the defense of any such Action with counsel reasonably
satisfactory to the Indemnified Party. The Indemnified Party shall
be entitled to participate in the defense of any such Action, with
its counsel and at its own cost and expense. If the Indemnifying
Party does not assume the defense of any such Action, the
Indemnified Party may, but shall not be obligated to, defend
against such Action in such manner as it may deem appropriate,
including, but not limited to, settling such Action, after giving
notice of it to the Indemnifying Party, on such terms as the
Indemnified Party may deem appropriate and no action taken by the
Indemnified Party in accordance with such defense and settlement
shall relieve the Indemnifying Party of its indemnification
obligations herein provided with respect to any damages resulting
therefrom. The Indemnifying Party shall not settle any Action
without the Indemnified Party’s prior written consent (which
consent shall not be unreasonably withheld or
delayed).
Section 7.05 Tax Treatment of
Indemnification Payments. All
indemnification payments made by VBF under this Agreement shall be
treated by the parties as an adjustment to the Purchase Price for
tax purposes, unless otherwise required by law.
Section 7.06
Certain
Limitations.
(a) The aggregate amount of all Losses for which
Sellers shall be liable under this Article VII shall not exceed Two
Million Dollars ($2,000,000), provided
however, this limitation shall
not apply to any Order or Judgment rendered by the US Bankruptcy
Court or any appellate court having jurisdiction of the VBF
Bankruptcy that sets aside or otherwise cancels or terminates this
purchase transaction. In the event of such termination or
cancellation, the limitation on losses shall be the entire Purchase
Price or such portion of the Purchase Price as has actually been
paid by Buyer.
(b) In
no event shall any Indemnifying Party be liable to any Indemnified
Party for any punitive, incidental, consequential, special or
indirect damages, including loss of future revenue or income, loss
of business reputation or opportunity relating to the breach or
alleged breach of this Agreement, or diminution of value or any
damages based on any type of multiple.
(c) VBF
shall not be liable under this Article VII for Losses based upon or
arising out of any inaccuracy in or breach of any of the
representations, warranties or covenants of VBF contained in this
Agreement if to the best of Buyer’s knowledge, it was aware
of such inaccuracy or breach prior to the Closing.
Section 7.07 Exclusive
Remedies. Except as otherwise
set forth herein, Sellers and Buyer acknowledge and agree that
their sole and exclusive remedy with respect to any and all claims
(other than claims arising from fraud on the part of a party hereto
in connection with the transactions contemplated by this Agreement)
for any breach of any representation, warranty, covenant, agreement
or obligation set forth herein or otherwise relating to the subject
matter of this Agreement shall be pursuant to the indemnification
provisions set forth in this Article VII.
ARTICLE VIII MISCELLANEOUS
Section 8.01 Expenses.
All costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and
expenses.
Section 8.02 Notices.
All notices, requests, consents,
claims, demands, waivers and other communications hereunder shall
be in writing and shall be deemed to have been given (a) when
delivered by hand (with written confirmation of receipt); (b) when
received by the addressee if sent by a nationally recognized
overnight courier (receipt requested); (c) on the date sent by
facsimile or e-mail of a PDF document (with confirmation of
transmission) if sent during normal business hours of the
recipient, and on the next business day if sent after normal
business hours of the
recipient; or (d) on the third day after the date mailed, by
certified or registered mail, return receipt requested, postage
prepaid. Such communications must be sent to the respective parties
at the following addresses (or at such other address for a party as
shall be specified in a notice given their principal office as
reflected in the records of the Secretary of State of the State in
which they are incorporated.
If to
Sellers:
Davis,
Brown, Koehn, Shors & Roberts, P.C.
215 10th Street, Suite 1300
Des
Moines, Iowa 50309
Phone:
(515) 288-2500
Email:
mattlaughlin@davisbrownlaw.com
Attention: Matt
Laughlin
If to
Buyer:
NaturalShrimp
Incorporated
15150
Preston Road, Suite 300
Dallas,
TX 75248
Phone:
(972) 951-8035
Email:
geasterling@sbcglobal.net
Attention: Gerald Easterling
with a copy
to:
(which shall not
constitute notice)
Law
Offices of W. Steven Walker
6443
Las Colinas Blvd
Irving,
Texas. 75039
Phone:
(972) 773-9713
Email: swalker@wswalkerlaw.com
Attention: W. Steven
Walker
Section 8.03 Headings.
The headings in this Agreement are for
reference only and shall not affect the interpretation of this
Agreement.
Section 8.04
Severability. If any term or
provision of this Agreement is invalid, illegal or unenforceable in
any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other term or provision of this Agreement or
invalidate or render unenforceable such term or provision in any
other jurisdiction.
Section 8.05 Entire
Agreement. This Agreement and
the documents to be delivered hereunder constitute the sole and
entire agreement of the parties to this Agreement with respect to
the subject matter contained herein, and supersede all prior and
contemporaneous understandings and agreements, both written and
oral, with respect to such subject matter. In the event of any
inconsistency between the statements in the body of this Agreement
and the documents to be delivered hereunder, the Exhibits and
Schedules, the statements in the body of this Agreement will
control.
Section 8.06 Successors and
Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. No
party may assign its rights or obligations hereunder without the
prior written consent of the other parties, which consent shall not
be unreasonably withheld or delayed. No assignment shall relieve
the assigning party of any of its obligations
hereunder.
Section 8.07 No Third-party
Beneficiaries. Except as
provided in Article VII, this Agreement is for the sole benefit of
the parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person or entity any legal or equitable
right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
Section 8.08 Amendment and
Modification. This Agreement
may only be amended, modified or supplemented by an agreement in
writing signed by all parties hereto.
Section 8.09 Waiver.
No waiver by any party of any of the
provisions hereof shall be effective unless explicitly set forth in
writing and signed by the party so waiving. No waiver by any party
shall operate or be construed as a waiver in respect of any
failure, breach or default not expressly identified by such written
waiver, whether of a similar or different character, and whether
occurring before or after that waiver. No failure to exercise, or
delay in exercising, any right, remedy, power or privilege arising
from this Agreement shall operate or be construed as a waiver
thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power
or privilege.
Section 8.10 Governing
Law. This Agreement shall be
governed by and construed in accordance with the internal laws of
the State of Iowa without giving effect to any choice or conflict
of law provision or rule (whether of the State of Iowa or any other
jurisdiction).
Section 8.11 Waiver of Jury
Trial. Each party acknowledges
and agrees that any controversy which may arise under this
Agreement is likely to involve complicated and difficult issues
and, therefore, each such party irrevocably and unconditionally
waives any right it may have to a trial by jury in respect of any
legal action arising out of or relating to this Agreement or the
transactions contemplated hereby.
Section 8.12 Specific
Performance. The parties agree
that irreparable damage would occur if any provision of this
Agreement were not performed in accordance with the terms hereof
and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy to which they are
entitled at law or in equity.
Section 8.13
Counterparts. This Agreement
may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall be deemed to be one and
the same agreement. A signed copy of this Agreement delivered by
facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original
signed copy of this Agreement.
ARTICLE IX DEFINITIONS
Section 9.01
Definitions. For the purpose of
this Agreement, certain capitalized terms have the meaning given to
them within the provisions of this Agreement and other capitalized
terms have the meaning given them in Exhibit “A” which
is incorporated herein by this reference.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective
officers thercirRto duly authorized.
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VEROBLUE FARMS USA, INC. |
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Date: February 16,
2021
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By:
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/s/ Norman
McCowan
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Norman McCowan |
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President |
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VBF TRANSPORT, INC. |
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Date: February 16,
2021
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By:
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/s/ Norman
McCowan
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Norman McCowan |
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President |
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IOWA’S FIRST, INC. |
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Date: February 16,
2021
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By:
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/s/ Norman
McCowan
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Norman McCowan |
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President |
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NATURALSHRIMP, INC. |
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Date: February 16,
2021
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By:
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/s/ Gerald
Easterling
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Gerald Easterling |
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President |
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