-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VVs87jDf5WbkJ5H/k3IqrWluBc2TTP0G/sp7AdJ6L1KqCoU3hFB8wpADBSYyTU+d 3jDgviRTlPoup5Z26gHyqw== 0001157523-08-007948.txt : 20081009 0001157523-08-007948.hdr.sgml : 20081009 20081009114549 ACCESSION NUMBER: 0001157523-08-007948 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20080829 FILED AS OF DATE: 20081009 DATE AS OF CHANGE: 20081009 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLDEN ENTERPRISES INC CENTRAL INDEX KEY: 0000042228 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 630250005 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04339 FILM NUMBER: 081115517 BUSINESS ADDRESS: STREET 1: 2101 MAGNOLIA AVE STE 212 STREET 2: SOUTH CITY: BIRMINGHAM STATE: AL ZIP: 35205 BUSINESS PHONE: 2053266101 MAIL ADDRESS: STREET 1: 2140 11TH AVE SOUTH STREET 2: STE 208 CITY: BIRMINGHAM STATE: AL ZIP: 35205 FORMER COMPANY: FORMER CONFORMED NAME: GOLDEN FLAKE INC DATE OF NAME CHANGE: 19761019 FORMER COMPANY: FORMER CONFORMED NAME: MAGIC CITY FOOD PRODUCTS INC DATE OF NAME CHANGE: 19700805 10-Q 1 a5799738.txt GOLDEN ENTERPRISES, INC. 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly (thirteen weeks) period ended August 29, 2008 --------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------------------------------ Commission file number 0-4339 ------------------------------------------ GOLDEN ENTERPRISES, INC. ------------------------ (Exact name of registrant as specified in its charter) DELAWARE 63-0250005 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Golden Flake Drive Birmingham, Alabama 35205 - ------------------------------------------------ ------------------------ (Address of Principle Executive Offices) (Zip Code) (205) 458-7316 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Act). (Check one):
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company X --- --- --- ---
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ( ) No (X) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of September 30, 2008. Outstanding at Class September 30, 2008 ----- ------------------ Common Stock, Par Value $0.66 2/3 11,770,743 GOLDEN ENTERPRISES, INC. INDEX
Part I. FINANCIAL INFORMATION Page No. Item 1 Financial Statements (unaudited) Condensed Consolidated Balance Sheets August 29, 2008 (unaudited) and May 30, 2008 3 Condensed Consolidated Statements of Income (unaudited) Thirteen Weeks Ended August 29, 2008 and August 31, 2007 4 Condensed Consolidated Statements of Cash Flows (unaudited)- Thirteen Weeks Ended August 29, 2008 and August 31, 2007 5 Notes to Condensed Consolidated Financial Statements (unaudited) 7 Report of Independent Registered Public Accounting Firm 10 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3 Quantitative and Qualitative Disclosure About Market Risk 14 Item 4 Controls and Procedures 14 Part II. OTHER INFORMATION 14 Item 1 Legal Proceedings 14 Item 1-A Risk Factors 15 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 15 Item 3 Defaults Upon Senior Securities 15 Item 4 Submission of Matters to a Vote of Security Holders 15 Item 5 Other Information 15 Item 6 Exhibits 16
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PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) August 29, May 30, 2008 2008 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 322,405 $ 442,756 Receivables, net 8,008,254 7,940,547 Inventories: Raw materials and supplies 1,329,644 1,467,400 Finished goods 3,499,581 2,870,698 ------------ ------------ 4,829,225 4,338,098 ------------ ------------ Prepaid expenses 2,180,639 1,642,959 Deferred income taxes 649,420 649,420 ------------ ------------ Total current assets 15,989,943 15,013,780 ------------ ------------ Property, plant and equipment, net 14,314,416 14,629,336 Other assets 2,458,211 2,592,929 ------------ ------------ Total $ 32,762,570 $ 32,236,045 ============ ============ LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES Checks outstanding in excess of bank balances $ 825,796 $ 817,370 Accounts payable 4,655,137 3,567,939 Accrued income taxes 188,106 160,619 Other accrued expenses 4,804,882 4,989,684 Salary continuation plan 134,650 131,993 Line of credit outstanding 1,125,556 1,484,368 ------------ ------------ Total current liabilities 11,734,127 11,151,973 ------------ ------------ LONG-TERM LIABILITIES Salary continuation plan 1,480,224 1,499,421 Deferred income taxes 620,077 620,077 ------------ ------------ Total long-term liabilities 2,100,301 2,119,498 ------------ ------------ STOCKHOLDER'S EQUITY Common stock - $.66-2/3 par value: 35,000,000 shares authorized Issued 13,828,793 shares 9,219,195 9,219,195 Additional paid-in capital 6,497,954 6,497,954 Retained earnings 14,046,842 14,060,942 ------------ ------------ 29,763,991 29,778,091 Less: Cost of common shares in treasury (2,051,784 shares at August 29, 2008 and 2,039,886 shares at May 30, 2008) (10,835,849) (10,813,517) ------------ ------------ Total stockholder's equity 18,928,142 18,964,574 ------------ ------------ Total $ 32,762,570 $ 32,236,045 ============ ============
See Accompanying Notes to Condensed Consolidated Financial Statements 3
GOLDEN ENTERPRISES, INC. AND SUDSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Thirteen Thirteen Weeks Weeks Ended Ended August 29, 2008 August 31, 2007 ---------------- ----------------- Net sales $ 29,850,688 $ 28,394,228 Cost of sales 15,385,271 14,407,799 --------------- ---------------- Gross margin 14,465,417 13,986,429 Selling, general and administrative expenses 13,879,057 12,681,882 --------------- ---------------- Operating Income 586,360 1,304,547 --------------- ---------------- Other income (expenses): Gain on sale of assets 44,911 10,500 Interest expense (59,944) (32,743) Other income 9,496 52,733 --------------- ---------------- Total other income (expenses) (5,537) 30,490 --------------- ---------------- Income before income taxes 580,823 1,335,037 Income taxes 226,357 492,664 --------------- ---------------- Net income $ 354,466 $ 842,373 =============== ================ PER SHARE OF COMMON STOCK Basic earnings per share $ 0.03 $ 0.07 Diluted earnings per share $ 0.03 $ 0.07 Weighted average number of common stock share outstanding: Basic 11,783,385 11,835,288 Diluted 11,783,385 11,835,288 Cash dividends paid per share of common stock $ 0.0313 $ 0.0313
See Accompanying Notes to Condensed Consolidated Financial Statements 4
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Thirteen Thirteen Weeks Ended Weeks Ended August 29, 2008 August 31, 2007 ---------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 29,782,981 $ 29,049,777 Miscellaneous income 9,496 52,733 Cash paid to suppliers & employees (14,372,274) (14,611,733) Cash paid for operating expenses (14,317,509) (13,336,325) Income taxes (paid)/received (198,870) (339,443) Interest expenses paid (59,944) (32,743) ---------------- ---------------- Net cash from operating activities 843,880 782,266 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (274,457) (348,449) Proceeds from sale of property, plant and equipment 51,510 11,500 Collection of notes receivable - 14,099 ---------------- ---------------- Net cash used in investing activities (222,947) (322,850) CASH FLOWS FROM FINANCING ACTIVITIES Debt proceeds 5,538,561 5,252,017 Debt repayments (5,897,373) (5,880,880) Change in checks outstanding in excess of bank balances 8,426 429,418 Cash dividends paid (368,566) (369,856) Purchases of treasury shares (22,332) (301) ---------------- ---------------- Net cash used in financing activities (741,284) (569,602) Net change in cash and cash equivalents (120,351) (110,186) Cash and cash equivalents at beginning of period 442,756 706,852 ---------------- ---------------- Cash and cash equivalents at end of period $ 322,405 $ 596,666 ================ ================
See Accompanying Notes to Condensed Consolidated Financial Statements 5
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - CONTINUED RECONCILIATION OF NET INCOME TO NET CASH FROM OPERATING ACTIVITIES FOR THE THIRTEEN WEEKS ENDED AUGUST 29, 2008 AND AUGUST 31, 2007 Thirteen Thirteen Weeks Ended Weeks Ended August 29, 2008 August 31, 2007 ----------------- ---------------- Net Income $ 354,466 $ 842,373 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 582,778 573,056 Gain on sale of property and equipment (44,911) (10,500) Changes in operating assets and liabilities: Change in receivables - net (67,707) 655,549 Change in inventories (491,127) 294,951 Change in prepaid expenses (537,680) (480,966) Change in other assets 134,718 47,911 Change in accounts payable 1,087,198 (904,956) Change in accrued expenses (184,802) (370,869) Change in salary continuation (16,540) (17,504) Change in accrued income taxes 27,487 153,221 ----------------- ---------------- Net cash provided by operating activities $ 843,880 $ 782,266 ================= ================
6 GOLDEN ENTERPRISES, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The accompanying unaudited condensed consolidated financial statements of Golden Enterprises, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 to Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal, recurring accruals) necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in the Golden Enterprises, Inc. and subsidiary ("the Company") Annual Report on Form 10-K for year ended May 30, 2008. 2. The consolidated results of operations for the thirteen weeks ended August 29, 2008 are not necessarily indicative of the results to be expected for the fifty-three week fiscal year ending June 5, 2009. 3. The following tables summarize the prepaid assets accounts at August 29, 2008 and August 31, 2007. Prepaid Breakdown August 29, 2008 August 31, 2007 ---------------- --------------- Truck Shop Supplies $ 716,456 $ 694,622 Insurance Deposit 188,959 227,640 Slotting Fees 193,268 218,292 Deferred Advertising Fees 727,371 617,625 Prepaid Insurance 154,141 194,367 Prepaid Taxes/Licenses 139,392 116,092 Prepaid Dues/Supplies 32,673 6,872 Other 28,379 28,356 ---------------- --------------- $ 2,180,639 $ 2,103,866 ================ =============== 4. The principal raw materials used in the manufacture of the Company's snack food products are potatoes, corn, vegetable oils and seasoning. The principal supplies used are flexible film, cartons, trays, boxes and bags. These raw materials and supplies are generally available in adequate quantities in the open market from sources in the United States and are generally contracted up to a year in advance. 5. Inventories are stated at the lower of cost or market. Cost is computed on the first-in, first-out method. 7 6. The following table provides a reconciliation of the denominator used in computing basic earnings per share to the denominator used in computing diluted earnings per share for the thirteen weeks ended August 29, 2008 and August 31, 2007:
-------------------- --------------------- Thirteen Thirteen Weeks Ended Weeks Ended August 29, 2008 August 31, 2007 -------------------- --------------------- Weighted average number of common shares used in computing basic earnings per share 11,783,385 11,835,288 Effect of dilutive stock options 0 0 -------------------- --------------------- Weighted average number of common shares and dilutive potential common stock used in computing dilutive earnings per share 11,783,385 11,835,288 ==================== ===================== Stock options excluded from the above reconciliation because they are anti-dilutive 369,000 369,000 ==================== =====================
7. The Company has a letter of credit in the amount of $2,314,857 outstanding at August 29, 2008 compared to $2,668,846 at August 31, 2007. The letter of credit supports the Company's commercial self-insurance program. 8. The Company has a line-of-credit agreement with a local bank that permits borrowing up to $2 million. The line-of-credit is subject to the Company's continued credit worthiness and compliance with the terms and conditions of the advance application. The Company's line-of-credit debt as of August 29, 2008 was $1,125,556 with an interest rate of 7.75%, leaving the Company with $874,444 of credit availability. The Company's line-of-credit debt as of August 31, 2007 was $264,712 with an interest rate of 8.25%, leaving the Company with $1,735,288 of credit availability. 9. The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables. The Company maintains deposit relationships with high credit quality financial institutions. The Company's trade receivables result primarily from its snack food operations and reflect a broad customer base, primarily large grocery store chains located in the Southeastern United States. The Company routinely assesses the financial strength of its customers. As a consequence, concentrations of credit risk are limited. 10. On August 20, 2008, the Company executed a Purchase and Sale Agreement to sell property located at 2926 Kraft Drive in Nashville, Tennessee and across the street from this address for $2,100,000. The property is scheduled to close in the second quarter of 2009. 11. On September 10, 2008, the Company executed a Purchase and Sale Agreement to sell property located at 4771 Phyllis Street, Jacksonville, Florida for $200,000. The property is scheduled to close in the second quarter of 2009. 8 12. On July 7, 2008, the Company executed a Purchase and Sale Agreement to sell property located at 321 Marble Mill Road, Marietta, Georgia for $556,000. The sale of the property occurred on September 25, 2008. 9 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------------------------------------- We have reviewed the accompanying condensed consolidated balance sheet of Golden Enterprises, Inc. and subsidiary as of August 29, 2008, and the related condensed consolidated statements of income and cash flows for the thirteen week periods ended August 29, 2008 and August 31, 2007. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial statements consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We previously audited in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet as of May 30, 2008 and the related consolidated statements of operations, changes in stockholders' equity and cash flows for the fiscal year then ended (not presented herein), and in our report dated July 30, 2008 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of May 30, 2008, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. Birmingham, Alabama September 25, 2008 DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP 10 ITEM 2 ------ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion and analysis of our financial condition and results of operations are based upon the condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. This discussion should be read in conjunction with our recent SEC filings, including Form 10-K for the year ended May 30, 2008. The preparation of these financial statements requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. Future events and their effects cannot be determined with absolute certainty. Therefore, management's determination of estimates and judgments about the carrying values of assets and liabilities requires the exercise of judgment in the selection and application of assumptions based on various factors, including historical experience, current and expected economic conditions and other factors believed to be reasonable under the circumstances. We routinely evaluate our estimates including those considered significant and discussed in detail in Form 10-K for the year ended May 30, 2008. Actual results may differ from these estimates under different assumptions or conditions and such differences may be material. Overview The Company manufactures and distributes a full line of snack items, such as potato chips, tortilla chips, corn chips, fried pork skins, baked and fried cheese curls, onion rings and puff corn. The products are all packaged in flexible bags or other suitable wrapping material. The Company also sells a line of cakes and cookie items, canned dips, pretzels, peanut butter crackers, cheese crackers, dried meat products and nuts packaged by other manufacturers using the Golden Flake label. No single product or product line accounts for more than 50% of the Company's sales, which affords some protection against loss of volume due to a crop failure of major agricultural raw materials. Raw materials used in manufacturing and processing the Company's snack food products are purchased on the open market and under contract through brokers and directly from growers. A large part of the raw materials used by the Company consists of farm commodities which are subject to precipitous changes in supply and price. Weather varies from season to season and directly affects both the quality and supply available. The Company has no control of the agricultural aspects and its profits are affected accordingly. The Company sells its products through its own sales organization and independent distributors to commercial establishments that sell food products primarily in the Southeastern United States. The products are distributed through the independent distributors and approximately 328 route representatives who are supplied with selling inventory by the Company's trucking fleet. All of the route representatives are employees of the Company and use the Company's direct-store delivery system. Liquidity and Capital Resources At August 29, 2008 and May 30, 2008, working capital was $4,255,816 and $3,861,807, respectively. Cash was used to purchase 11,898 shares of treasury stock this quarter in the amount of $22,332. The Company's current ratio was 1.36 to 1.00 at August 29, 2008 compared to 1.35 to 1.00 at May 30, 2008. Accounts Receivable and Allowance for Doubtful Accounts At August 29, 2008 and May 30, 2008 the Company had accounts receivables in the amount of $8,008,254 and $7,940,547, net of an allowance for doubtful accounts of $70,000 and $70,000, respectively. 11 The following table summarizes the Company's customer accounts receivable profile as of August 29, 2008 and May 30, 2008:
Amount Range No. of Customers ------------ ---------------- August 29, 2008 May 30, 2008 Less than $1,000.00 1,077 1,118 $1,001.00-$10,000.00 530 558 $10,001.00-$100,000.00 120 113 $100,001.00-$500,000.00 7 8 $500,001.00-$1,000,000.00 1 1 $1,000,001.00-$2,500,000.00 0 0 ------------------ ---------------- Total All Accounts 1,735 1,798 ================== ================
The following table summarizes the significant contractual obligations of the Company as of August 29, 2008:
Contractual Obligations Total Current 2-3 Years 4-5 Years Thereafter - ----------------------- ----- ------- --------- --------- ---------- Vehicle Lease $ 3,755,123 $ 902,270 $ 1,802,781 $ 1,050,072 $ - Salary Continuation Plan 1,614,874 134,650 303,756 356,271 820,197 -------------- ------------- ---------------- ------------- --------------- Total Contractual Obligations $ 5,369,997 $ 1,036,920 $ 2,106,537 $ 1,406,343 $ 820,197 ============== ============= ================ ============= ===============
Other Commitments Available cash, cash from operations and available credit under the line-of-credit are expected to be sufficient to meet anticipated cash expenditures and normal operating requirements for the foreseeable future. Operating Results For the thirteen weeks ended August 29, 2008, net sales increased 5.1% from the comparable period in fiscal 2008. This year's first quarter cost of sales was 51.5% of net sales compared to 50.7% for last year's first quarter. This year's first quarter, selling, general, and administrative expenses were 46.5% of net sales compared to 44.7% for last year's first quarter. The following tables compare manufactured products to resale products:
Manufactured Products-Resale Products Thirteen Weeks Ended Thirteen Weeks Ended August 29, 2008 August 31, 2007 Sales % % Manufactured Products $ 23,835,378 79.8% $ 22,933,096 80.8% Resale Products 6,015,310 20.2% 5,461,132 19.2% --------------------- --------------- --------------- --------------------- Total $ 29,850,688 100.0% $ 28,394,228 100.0% ===================== =============== =============== ===================== Gross Margin % % Manufactured Products $ 12,106,591 50.8% $ 12,210,069 53.2% Resale Products 2,358,826 39.2% 1,776,360 32.5% --------------------- --------------- --------------- --------------------- Total $ 14,465,417 48.5% $ 13,986,429 49.3% ===================== =============== =============== =====================
12 The Company's gain on sales of assets for the thirteen weeks ended August 29, 2008 in the amount of $44,911 was from the sale of used transportation equipment. For last year's thirteen weeks the gain on sale of assets was $10,500 from the sale of used equipment for cash. The Company's effective tax rate for the first quarter was 39.0% compared to 36.9% for the last year's first quarter. Market Risk The principal market's risks (i.e., the risk of loss arising from adverse changes in market rates and prices), to which the Company is exposed, are interest rates on its bank loans, and commodity prices affecting the cost of its raw materials. The Company is subject to market risk with respect to commodities because its ability to recover increased costs through higher pricing may be limited by the competitive environment in which it operates. The Company purchases its raw materials on the open market and under contract through brokers or directly from growers. Future contracts have been used occasionally to hedge immaterial amounts of commodity purchases, but none are presently being used. Inflation Certain costs and expenses of the Company are affected by inflation. The Company's prices for its products over the past several years have remained relatively flat. The Company will contend with the effect of further inflation through efficient purchasing, improved manufacturing methods, pricing and by monitoring and controlling expenses. Environmental Matters There have been no material effects of compliance with governmental provisions regulating discharge of materials into the environment. Subsequent Event On July 7, 2008, the Company executed a Purchase and Sale Agreement to sell property located at 321 Marble Mill Road, Marietta, GA for $556,000. The sale of the property occurred on September 25, 2008. Significant Events On August 20, 2008, the Company executed a Purchase and Sale Agreement to sell property located at 2926 Kraft Drive in Nashville, Tennessee and across the street from this address for $2,100,000. The property is scheduled to close in the second quarter of 2009. On September 10, 2008 the Company executed a Purchase and Sale Agreement to sell property located at 4771 Phyllis Street, Jacksonville, Florida for $200,000. The property is scheduled to close in the second quarter of 2009. 13 Forward-Looking Statements This discussion contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those forward-looking statements. Factors that may cause actual results to differ materially include price competition, industry consolidation, raw material costs and effectiveness of sales and marketing activities, as described in the Company's filings with the Securities and Exchange Commission. ITEM 3 ------ QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not Applicable. ITEM 4 ------ CONTROLS AND PROCEDURES The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this report. Any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures provided reasonable assurance that the disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and in accumulating and communicating such information to management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the Company's internal control over financial reporting to determine whether any changes occurred during the Company's first fiscal quarter ended August 29, 2008 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Based on that evaluation, there has been no such change during the period covered by this report. PART II OTHER INFORMATION ITEM 1 ------ LEGAL PROCEEDINGS There are no material pending legal proceedings against the Company or its subsidiary other than routine litigation incidental to the business of the Company and its subsidiary. 14 ITEM 1-A -------- RISK FACTORS There are no material changes in our risk factors from those disclosed in our 2008 Annual Report on Form 10-K. ITEM 2 ------ UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Company did not sell any equity securities during the period covered by this report. Registrant Purchases of Equity Securities. Cash was used to purchase 11,898 shares of treasury stock for the quarterly period ended August 29, 2008 in the amount of $21,902. In addition, commission fees in the sum of $430 were paid to the broker. ISSUER PURCHASES OF EQUITY SECURITIES
Period (a) Total (b) Average Price Paid (c) Total Number of (d) Maximum Number Number of per Share (or Unit) Shares (or Approximate Shares (or Units) Dollar Value) of (or Units) Purchased as Part Shares (or Units) Purchased of Publicly that May Yet Be Announced Plans or Purchased Under the Programs Plans or Programs May 30 to June 27 -0- -0- June 28 to August 1 9,906 $1.86 August 2 to August 29 1,992 $1.97 Total First Quarter 11,898 $1.88
ITEM 3 ------ DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4 ------ SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5 ------ OTHER INFORMATION Not applicable. 15 ITEM 6 ------ EXHIBITS (3) Articles of Incorporation and By-laws of Golden Enterprises, Inc. 3.1 Certificate of Incorporation of Golden Enterprises, Inc. (originally known as "Golden Flake, Inc.") dated December 11, 1967 (incorporated by reference to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the Commission). 3.2 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated December 22, 1976 (incorporated by reference to Exhibit 3.2 to Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the Commission). 3.3 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated October 2, 1978 (incorporated by reference to Exhibit 3 to Golden Enterprises, Inc. May 31, 1979 Form 10-K filed with the Commission). 3.4 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated October 4, 1979 (incorporated by reference to Exhibit 3 to Golden Enterprises, Inc. May 31, 1980 Form 10-K filed with the Commission). 3.5 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated September 24, 1982 (incorporated by reference to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 1983 Form 10-K filed with the Commission). 3.6 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated September 22, 1983 (incorporated by reference to Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q Report for the quarter ended November 30, 1983 filed with the Commission). 3.7 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises. Inc. dated October 3, 1985 (incorporated by reference to Exhibit 19.1 to Golden Enterprises, inc. Form l0-Q Report for the quarter ended November 30, 1985 filed with the Commission). 3.8 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated September 23, 1987 (incorporated by reference to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 1988 Form 10-K filed with the Commission). 3.9 By-Laws of Golden Enterprises, Inc. (incorporated by reference to Exhibit 3.4 to Golden Enterprises, Inc. May 31, 1988 Form 10-K filed with the Commission). (10) Material Contracts. 10.1 A Form of Indemnity Agreement executed by and between Golden Enterprises, Inc. and Each of its Directors (incorporated by reference as Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q Report for the quarter ended November 30, 1987 filed with the Commission). 16 10.2 Amended and Restated Salary Continuation Plans for John S. Stein (incorporated by reference to Exhibit 19.1 to Golden Enterprises, Inc. May 31, 1990 Form 10-K filed with the Commission). 10.3 Indemnity Agreement executed by and between the Company and S. Wallace Nall, Jr. (incorporated by reference as Exhibit 19.4 to Golden Enterprises, Inc. May 31, 1991 Form 10-K filed with the Commission). 10.4 Salary Continuation Plans - Retirement Disability and Death Benefits for F. Wayne Pate (incorporated by reference to Exhibit 19.1 to Golden Enterprises, Inc. May 31, 1992 Form 10-K filed with the Commission). 10.5 Indemnity Agreement executed by and between the Registrant and F. Wayne Pate (incorporated by reference as Exhibit 19.3 to Golden Enterprises, Inc. May 31, 1992 Form 10-K filed with the Commission). 10.6 Golden Enterprises, Inc. 1996 Long-Term Incentive Plan (incorporated by reference as Exhibit 10.1 to Golden Enterprises, Inc. May 31, 1997 Form 10-K filed with the Commission). 10.7 Equipment Purchase and Sale Agreement dated October 2000 whereby Golden Flake Snack Foods. Inc., a wholly-owned subsidiary of Golden Enterprises, Inc., sold the Nashville, Tennessee Plant Equipment (incorporated by reference as Exhibit 10.1 to Golden Enterprises, Inc. May 31, 2001 Form 10-K filed with the Commission). 10.8 Real Property Contract of Sale dated October 2000 whereby Golden Flake Snack Foods, Inc. sold the Nashville, Tennessee Plant Real Property (incorporated by reference as Exhibit 10.2 to Golden Enterprises, Inc. May 31, 2001 Form 10-K filed with the Commission). 10.9 Amendment to Salary Continuation Plans, Retirement and Disability for F. Wayne Pate dated April 9. 2002 (incorporated by reference to Exhibit 10.2 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.10 Amendment to Salary Continuation Plans, Retirement and Disability for John S. Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.3 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.11 Amendment to Salary Continuation Plan, Death Benefits for John S. Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.4 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.12 Retirement and Consulting Agreement for John S. Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.5 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.13 Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002 (incorporated by reference to Exhibit 10.6 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 17 10.14 Trust Under Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002 (incorporated by reference to Exhibit 10.7 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.15 Lease of aircraft executed by and between Golden Flake Snack Foods, Inc., a wholly-owned subsidiary of Golden Enterprises, Inc., and Joann F. Bashinsky dated February 1, 2006 (incorporated by reference to Exhibit 10.15 to Golden Enterprises, Inc. June 2, 2006 Form 10-K filed with the Commission). 10.16 Real Property Purchase and Sale Agreement dated May 2, 2008 whereby Golden Flake Snack Foods, Inc., a wholly-owned subsidiary of Golden Enterprises, Inc. re-acquired certain real property in Nashville, Tennessee. 10.17 Purchase and Sale Agreement executed between Golden Flake Snack Foods, Inc. as Seller, and Alternative Communications, Inc., as Purchaser, with an effective date of September 10, 2008, for the sale of real property and improvements being located at 4771 Phyllis, Jacksonville, Duval County, Florida. 10.18 Purchase and Sale Agreement executed by and between Golden Flake Snack Foods, Inc. as Seller, and Michael L. Rankin, as Purchaser, with an effective date of August 20 2008, for the sale of real property located at 2926 Kraft Drive, Nashville, County of Davidson, State of Tennessee and undeveloped real property located across the road from 2926 Kraft Drive. 10.19 Purchase and Sale Agreement executed by and between Golden Flake Snack Foods, Inc., as Seller, and Steve Bacorn, as Purchaser, with an effective date of July 7, 2008, for the sale of land and improvements located in Cobb County, Address being 321 Marble Mill Road, Marietta, Georgia 14.1 Golden Enterprises, Inc.'s Code of Conduct and Ethics adopted by the Board of Directors on April 8, 2004 (incorporated by reference to Exhibit 14.1 to Golden Enterprises, Inc. May 31, 004 From 10-K with the Commission). 21 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the Commission) (31) Certifications 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002, 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 18 (99) Additional Exhibits 99.1 A copy of excerpts of the Last Will and Testament and Codicils thereto of Sloan Y. Bashinsky, Sr. and of the SYB Common Stock Trust created by Sloan Y. Bashinsky, Sr. providing for the creation of a Voting Committee to vote the shares of common stock of Golden Enterprises, Inc. held by SYB, Inc. and the Estate/Testamentary Trust of Sloan Y. Bashinsky, Sr. (Incorporated by reference to Exhibit 99.1 to Golden Enterprises, Inc. May 31, 2005 Form 10-k filed with the Commission). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GOLDEN ENTERPRISES, INC. ----------------------- (Registrant) Dated: October 9, 2008 /s/Mark W. McCutcheon --------------- --------------------- Mark W. McCutcheon President and Chief Executive Officer Dated: October 9, 2008 /s/ Patty Townsend --------------- ------------------ Patty Townsend Vice-President and Chief Financial Officer (Principal Accounting Officer) 19 EX-10.17 2 a5799738ex10_17.txt EXHIBIT 10.17 Exhibit 10.17 Purchase and Sale Agreement executed between Golden Flake Snack Foods, Inc. as Seller, and Alternative Communications, Inc., as Purchaser, with an effective date of September 10, 2008, for the sale of real property and improvements being located at 4771 Phyllis Street, Jacksonville, Duval County, Florida 20 EXHIBIT LIST EXHIBIT A LEGAL DESCRIPTION/DEPICTION PURCHASE AND SALE AGREEMENT This PURCHASE AND SALE AGREEMENT ("Agreement") dated as of the 10th day of September 2008 (the "Effective Date"), by and between Alternative Communications, Inc. or assigns, a Florida corporation having an address of 5215 Highway Ave, Jacksonville, Florida 32254 (hereinafter called "Buyer"), and Golden Flake Snack Foods, Inc., a Delaware corporation duly qualified to conduct business in the state of Florida, having an address of P.O. Box 2447, Birmingham, AL 35205 (hereinafter called "Seller"). W I T N E S S E T H: WHEREAS, Seller is the record owner of fee simple title to certain real property and improvements located thereon at 4771 Phyllis Street, Jacksonville, Duval County, Florida, which property is currently improved with a warehouse building containing approximately 4,784 square feet of under roof space; and WHEREAS, Seller is desirous of selling and conveying the real property and improvements more particularly described below to Buyer, and Buyer is desirous of purchasing same from Seller, on the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, the sums of money paid and to be paid hereunder, and for other good and valuable considerations, the receipt and sufficiency all of which are hereby acknowledged, the parties hereto do covenant, stipulate and agree as follows: 1. SALE AND PURCHASE. Seller agrees to sell, assign, transfer and convey to Buyer, and Buyer agrees to purchase from Seller, the following: 1.1. The real property described on Exhibit A attached hereto and by this reference made a part hereof, together with the improvements situated thereon, said land and improvements being located at 4771 Phyllis Street, Jacksonville, Duval County, Florida; 1.2. All improvements, appurtenances, rights, easements, rights-of-way, tenements and hereditaments incident thereto and all title and interest, if any, of Seller in and to all strips and gores and any land lying in the bed of any street; and 1.3. All equipment, plumbing, heating, air conditioning systems presently incorporated in or located on the property. (The real property improvements and personal property described in paragraphs 1.1, 1.2 and 1.3 are collectively referred to as the "Property".) 21 2. PURCHASE PRICE AND PAYMENT. In consideration of the conveyance of the Property to Buyer, Buyer shall pay to Seller the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) payable as follows: 2.1. A deposit in the sum of TEN THOUSAND DOLLARS ($10,000.00) to be held by C. Holt Smith 111, 233 Bay Street, Suite 930, Jacksonville, Florida 32202 as escrow agent (in such capacity, "Escrow Agent") in a Florida Bar IOTA trust account, with the principal credited against the purchase price ("Earnest Money Deposit"); and 2.2. The balance of the purchase price shall be due in the form of cash, cashier's check or certified funds at closing and shall be subject to prorations and adjustments. The Earnest Money Deposit and the balance due at Closing are collectively referred to as the "Purchase Price". 3. INVESTIGATION PERIOD. 3.1. Buyer shall have, at reasonable times, a period of THIRTY (30) days after the Effective Date (the effective date is the date the last party signs this Agreement) to perform such due diligence as Buyer deems necessary or appropriate to make a determination as to the desirousness of obtaining the Property, its suitability for Buyer's purposes and to determine whether or not the Property is satisfactory to Buyer ("Investigation Period"). At any time during the Investigation Period, and notwithstanding anything to the contrary as hereinafter set forth, Buyer may terminate this Agreement at its sole discretion for any reason by giving notice thereof to Seller and receive a return of the Earnest Money Deposit, in which case neither party shall have any further obligation hereunder. 3.2. During such Investigation Period, Buyer will, during normal business hours, be provided access to the Property to inspect the Property, verify zoning, conduct engineering and environmental studies and feasibility tests, determine available uses under zoning and the Comprehensive Land Use Plan, test for hazardous materials, and determine the availability of water, sewer, and other utilities. 3.3. During the Investigation Period, Seller will make available, upon Buyer's request for inspection by Buyer, all building permits, plats, plans, governmental approvals relating to the construction and use of the Property, service agreements and/or management contracts, engineering data, drawings, plans, specifications, architectural drawings, studies, surveys, soil tests, audits, site assessments, reports and other information dealing with jurisdictional wetlands and environmental, soil and subsurface conditions of the Property affecting the Property that are in Seller's possession or control. Except as otherwise set forth herein, all such investigations, tests, verifications, copies and examinations shall be made by Buyer at Buyer's sole expense. If Buyer refuses or fails to close for any reason, all materials provided by Seller to Buyer and all materials relating to the Property obtained by Buyer, and all copies of any such materials, will be immediately delivered to Seller. 22 3.4. Seller has delivered or will deliver to Buyer within ten (10) days of the Effective Date copies of all plans, drawings, studies, tests, development orders and other reports and information in its possession concerning the Property, including without limitation environmental reports, soil test reports, zoning and wetlands information, development orders and other regulatory requirements concerning land use affecting the Property or the development of which it is a part, surveys, title reports, covenants and restrictions, easements and plats. During the Investigation Period Buyer may, at its sole cost and expense, obtain such additional environmental reports as it deems necessary to fully evaluate the condition of the Property. 3.5. If during the investigation Period, Buyer determines in its judgment that it has been unable to obtain such studies, reports, authorizations or tests in order for Buyer to make a determination to acquire the Property, and it is continuing to attempt to secure same, then upon written notice to Seller, prior to the expiration of such period, it may extend the Investigation Period by an additional thirty (30) days. 3.6. Buyer hereby agrees to defend, indemnify and hold Seller harmless against any claims, costs, damages, or liability arising out of Buyer's inspection of the Property, including costs and reasonable attorney's fees at both trial and appellate levels. Buyer hereby agrees to defend, indemnify and hold Seller harmless from and against all liens on the Property filed by contractors, materialmen, or laborers performing work and tests for Buyer. If this sale does not close, Buyer shall restore the Property to its original condition, and Buyer's obligation under this paragraph 3.6 shall survive Closing or the expiration or termination of this Agreement. 4. SURVEY. 4.1 On or before twenty-five (25) days from the Effective Date, Buyer, at its option and expense, shall obtain an ALTA survey of the Property (the "Survey") prepared by Florida registered land surveyors and dated no more than twenty-five (25) days prior to the Effective Date. The Survey shall be completed in accordance with the minimum standard detail requirements for an ALTA survey; will, prior to Closing, be certified by such surveyor to: (i) Buyer, (ii) the Title Insurer, (iii) Seller; (iv) Buyer's counsel; and (v) any lenders designated by Buyer; have one perimeter description of the Property; show all improvements, easements, rights-of-way, set-back lines, encroachments and other matters affecting the use or development of the Property; show all title exceptions shown on the title insurance commitment which are capable of being located on the Property; and certify that the Property is located within the applicable flood zone according to the HUD Flood Insurance Rate Map, all of which shall be in form and substance satisfactory to Buyer. 4.2 If the Survey shows (i) any encroachments on the Property or that improvements, if any, on the Property encroach on other lands; (ii) that the Property is not contiguous to a publicly dedicated right-of-way; or (iii) any other title matters other than Permitted Exceptions, Buyer shall notify Seller in writing within ten (10) days after Buyer's receipt of the Survey specifying such defects. Survey defects shall be treated in the same manner as Title Defects under paragraph 5 below. 23 5. QUALITY OF TITLE. 5.1. Buyer shall not be obligated hereunder unless title to the Property shall be marketable of record as will enable an ALTA member title insurance underwriter acceptable to Buyer, and authorized to do business in Florida to issue to Buyer, at regular rates, its full Purchase Price coverage, standard marketability revised ALTA Owner's Title Insurance Policy, in the amount of the Purchase Price hereunder, without exceptions, and free and clear of all defects, liens and encumbrances and subject only to the following permitted exceptions: (a) Ad valorem taxes for the year of Closing (as such term is hereinafter defined) and subsequent years; (b) Such other Permitted Exceptions as defined herein. 5.2. A title commitment ("Title Commitment"), together with copies of all exceptions, shall be obtained, by Buyer's attorney, at Seller's expense on or before fifteen (15) days after the Effective Date. (a) Within twenty-five (25) days after the Effective Date, Buyer shall notify Seller in writing of any title exceptions ("Title Defects") identified in the Title Commitment, which Buyer disapproves. Any title exception not disapproved in writing by such date shall be deemed approved by Buyer, and shall constitute a "Permitted Exception" hereunder. (b) Seller shall have ten (10) days after receipt of Buyer's written notification of Title Defects to provide Buyer with a written notice of which Title Defects Seller is willing or able to cause to be removed or insured against prior to Closing. If Seller fails to provide such written notice to Buyer it will be presumed that Seller is unwilling to cause any of the Title Defects to be removed or insured against. (c) In the event Seller is unable or unwilling to cure all Title Defects (except Permitted Exceptions) within the time period permitted under paragraph (a), Buyer shall have the option to waive any Title Defect and proceed to Closing with such Title Defect being included as a Permitted Exception, or terminate this Agreement and receive back the Earnest Money Deposit, in which case neither party shall have any further obligation hereunder; except that Buyer may be entitled to damages if Seller has failed to remove any Monetary Encumbrances in accordance with the requirements of this Agreement. If Buyer does not make its election in writing within the time permitted, the Buyer will be deemed to elect to terminate this Agreement and Seller hereby consents to the release of Buyer's deposit to Buyer. Notwithstanding anything herein to the contrary, Seller shall be obligated to cure any monetary liens against the Property arising by, through or under Seller. (d) In addition to the foregoing, Buyer and Seller agree that (i) all non-delinquent property taxes and assessments, (ii) all matters created by or on behalf of Buyer, including, without limitation, any documents or instruments to be recorded as part of any financing for the acquisition of the Property by Buyer, and (iii) all matters agreed to by the parties hereto, shall constitute "Permitted Exceptions". 24 (e) Notwithstanding anything contained herein to the contrary, except as hereinafter limited, Seller shall be obligated to expend whatever sums are required to remove or obtain affirmative coverage for the following Title Defects ("Monetary Encumbrances") prior to, or at, the Closing: (i) all mortgages, security deeds or other security instruments encumbering the Real Property; (ii) all past due ad valorem taxes and assessments of any kind, whether or not of record, which constitute, or may constitute, a lien against the Real Property (to the extent that such assessments can be cured by the payment of money); (iii) judgments against Seller (which do not result from acts or omissions on the part of Buyer) which have attached to and become a Lien against the Real Property; and (iv) any other monetary encumbrances or liens (which do not result from acts or omissions on the part of Buyer) attaching to the Property. 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. 6.1. Prior to Closing Seller agrees to remove all debris and trash located on the Property, if any. 6.2. Seller's Representations. To induce Buyer to enter into this agreement and to close the transactions contemplated hereby, Seller makes the following representations to Buyer (the "Representations"): (a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in Florida. The individual executing this Agreement has full and lawful authority to bind and obligate Seller to perform its obligations as herein provided and upon execution hereof, this Agreement shall be the binding and legal obligation of Seller and is enforceable against Seller under the laws of the State of Florida; (b) There are no leases; 25 (c) Seller has no knowledge of any violation of any Environmental Laws pertaining to the use, storage or location of Hazardous Materials on the Property, as hereinafter defined and affirmatively represents to Buyer: (i) That the property had an existing underground tank that was removed. Seller shall provide the Underground Storage Tank Removal Closure Report describing the data, findings and conclusions. If Seller is unable to provide the Closure Report, the Seller shall generate a Clean Phase Il Audit for Buyer's review. The Seller hereby agrees to indemnify and hold harmless the Buyer and pay all fees, costs and damages associated with any environmental contamination and clean-up which pertains to said underground tank or any other existing environmental contamination of the property existing as of the Effective Date which may be discovered after closing for a period of 25 years; and (ii) That, to the best of Seller's knowledge, no Hazardous Materials are located, buried or hidden on the Property. As used herein, the term "Hazardous Material" shall mean any hazardous, toxic, radioactive or dangerous waste, substance or material defined as such in or for the purposes of the Comprehensive Environmental Response Compensation and Liability Act of 1980 ("CERCLA"), The Resource Conservation Recovery Act ("RCRA"), the Superfund Amendment Reauthorization Act ("SARA"), any so-called superfund or superlien law, Chapter 403, Florida Statutes (1993), or any other federal, state or local statute law, ordinance, code, rule, regulation, order, decree, regulating, relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, as now or any time hereafter in effect (the "Environmental Laws"), and any petroleum products. (d) The Property is owned by the Seller and is free and clear of all liens and encumbrances except the "Permitted Exceptions"; (e) Seller is not the subject of a receivership, nor is it insolvent. There are no unsatisfied liens, judgments or decrees of any kind against the Seller or the Property, or any actions or proceedings, pending or threatened, before any court or administrative agency which would affect the Seller or the Property; (f) Seller has not and, to the best of Seller's knowledge, no other person has generated, placed, disposed or stored in, on, upon, over or under the Property (i) asbestos in any form; (ii) urea formaldehyde form insulation; (iii) poly-chlorinated biphenyls; (iv) underground storage tanks (other than as referenced in subparagraph "c" above); or (v) any other chemical, material or substance exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority and there is no existing or transferred claim or demand against Seller with report thereof from any principle party or governmental entity or agency thereof; 26 (g) There are no special assessments, condemnation or eminent domain proceedings pending, or, to the best of Seller's knowledge, threatened, which would affect the Property; (h) There are no management, real estate, leasing or rental commissions in existence affecting the Property which are or could be the obligation of Buyer; (i) The Property is not subject to any DRI development order under Chapter 380, Florida Statutes, nor is it subject to aggregation with any other property of Seller or with property which heretofore was subject to a DRI development order; (j) Seller has received no notice of violation, and to the best of Seller's knowledge, there exists no violations of any law, ordinance, order, rule, regulation, covenant or other restriction (local, state or Federal) affecting the Property; (k) Seller has made no commitments to or agreements with any governmental authority or other person, which are binding upon Buyer of the Property which have not been disclosed to the Buyer and made part of this agreement; (l) There is no person which is required to approve or consent to this conveyance or contemplated use of the Property by Buyer, as is herein contemplated, or if required, such approval or consent will be obtained by Closing; (m) Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986, and has furnished Buyer with its Federal Employer Identification Number. At Closing, Seller will execute and deliver to Buyer a Non-Foreign Certification of Individual Transferor, in form and substance satisfactory to Buyer's counsel; (n) No notice of commencement has been filed with respect to the Property and no work has been done or materials furnished to the Property within the preceding ninety (90) days for which a lien could arise; (o) There are no persons in possession of the Property (or any portion thereof) or having rights to possession of the Property (or any portion thereof) except Seller; and (p) The Property is properly zoned for Seller's present business purposes. 27 6.3 All representations, warranties and covenants of Seller shall survive closing for a period of six (6) months, except for such representation set forth in Section 6.2(c)(i) hereof, which shall survive for the term set forth therein. 7. LEASES. There are no Leases affecting the Property, oral or written. 8. CONDITIONS PRECEDENT. 8.1. Conditions Precedent to Buyer's Obligations. The obligations of Buyer under this Agreement are subject to satisfaction (or written waiver by Buyer) of each of the following conditions or requirements on or before the Closing Date: (a) Seller's warranties and representations under this Agreement shall be true and correct, and Seller shall not be in default hereunder; (b) All obligations of Seller contained in this Agreement, shall have been fully performed in all material respects and Seller shall not be in default under any covenant, restriction, right-of-way or easement affecting the Property; (c) A Title Insurance Commitment in the full amount of the Purchase Price shall have been issued to the Buyer, subject only to Permitted Exceptions; (d) The physical and environmental condition of the Property shall be clean and unchanged from the date of this Agreement, ordinary wear and tear excepted; and (e) Seller shall have delivered to Buyer the following in form reasonably satisfactory to Buyer: (i) General Corporate Warranty Deed in proper form for recording, duly executed and acknowledged so as to convey to Buyer the fee simple title to the Property, subject only to the Permitted Exceptions (the "Deed"); (ii) A title certificate, properly endorsed by Seller, as to any items of Property for which title certificates exist; (iii) A general assignment of all assignable existing warranties relating to the Property, to the extent said existing warranties relating to the Property are in Seller's possession; (iv) An owner's affidavit, non-foreign affidavit and such further instruments of conveyance, transfer and assignment and other documents as may reasonably be required by Buyer or its counsel in order to effectuate the provisions of this Agreement and the transactions contemplated herein; 28 (v) The originals or copies of any real property tax bills for the Real Property and Improvements for the then current fiscal year and the previous year, and, if requested, the originals or copies of any current water, sewer and utility bills which are in Seller's custody or control; (vi) Certificate of Resolution and Incumbency Certificate for Seller and/or its principals authorizing the transaction described herein; (vii) All keys and other means of access to the Improvements in the possession of Seller or its agents; and (viii) Closing Statement executed by Seller. In the event that all of the foregoing provisions of this paragraph 8.1 are not satisfied and Buyer elects in writing to terminate this Agreement, then the Earnest Money Deposit shall be promptly delivered to Buyer by Escrow Agent and, upon the making of such delivery, neither party shall have any further claim against the other by reasons of this Agreement, except as provided in paragraph 3.6. 8.2. Conditions Precedent to Seller's Obligations. The obligations of Seller under this Agreement are subject to satisfaction (or written waiver by Seller) of each of the following conditions or requirements on or before the Closing date: (a) All of the obligations of Buyer contained in this Agreement shall have been fully performed by or on the data of Closing in compliance with the terms and provisions of this Agreement; and (b) Buyer shall have delivered to Seller at or prior to the Closing the following, which shall be reasonably satisfactory to Seller: (i) Delivery and/or payment of the balance of the Purchase Price in accordance with paragraph 2 at Closing; and (ii) Closing Statement executed by Buyer. In the event that all conditions precedent to Buyer's obligation to purchase shall have been satisfied but the foregoing provisions of this Section 8.2 have not, and Seller elects in writing to terminate this Agreement, then the Earnest Money Deposit shall be promptly delivered to Seller by Escrow Agent and, upon the making of such delivery, neither party shall have any further claim against the other by reasons of this Agreement, except as provided in paragraph 3.6. 29 8.3. Best Efforts. Each of the parties hereto agrees to use reasonable best efforts to take or cause to be taken all actions necessary, proper or advisable to consummate the transactions contemplated by this Agreement. 9. CLOSING AND CLOSING DATE. 9.1. Closing Date. The consummation of this sale by Seller and the purchase by Buyer of the Property (the "Closing" or "Closing Date") shall be held on or before thirty (30) days following the expiration of the Investigation Period, at the office of Seller's closing agent in Jacksonville, Florida or at such other location as jointly determined by Buyer and Seller. 9.2. In the event Buyer shall have notified Seller pursuant to Paragraph 3.5 above and extended the Investigation Period, then Buyer shall have the right to a thirty (30) day extension within which to close this transaction. In the event Buyer exercises its right to extend, then the extended date shall be deemed the Closing Date for purposes of this transaction. 9.3. Waiver of Attendance at Closing. Either party may waive its appearance at Closing by providing to Escrow Agent on or before the date established for Closing all documents, funds and things required to be delivered by said party pursuant to this Agreement along with written instruction as to the conditions (if any) for release thereof as well as instructions for the delivery of documents, funds and things to be delivered to said party. 10. APPORTIONMENTS. All ad valorem taxes, assessments, rents and other expenses and revenues of the Property, related to periods extending beyond the Closing Date, shall be prorated between Seller and Buyer as of midnight on the day immediately preceding the Closing Date. The ad valorem tax proration shall be based upon the fully documented amount reflected on the current year's assessment. If the current year's assessment is not available, taxes will be prorated on the prior year's assessment and either party shall have the right to request and obtain a re-proration on receipt of the appropriate tax bill. 11. CLOSING COSTS. 11.1. Seller shall pay the following closing costs: (a) Documentary stamps on the Deed; (b) Recording releases of all liens and encumbrances; (c) The premium and search fees for issuance of an Owner's Fee Title Insurance Policy insuring Buyer in the full amount of the Purchase Price; (d) Seller's attorney's fees; 30 (e) The real estate commission set forth in paragraph 12 below; (f) All curative title documents for title and survey defects elected to be cured by Seller; and (g) All recording fees other than for the Warranty Deed and documents relating to Buyer's financing. 11.2. Buyer shall pay the following closing costs: (a) Recording of the Deed; (b) Buyer's attorney's fees; (c) Any and all expenses incurred by Buyer for financing, permitting, environmental, investigations and inspections (except as otherwise provided herein); and (d) Costs associated with Buyer's financing, if any. 12. BROKERAGE. The Seller agrees to pay Pine Street/RPS, LLC (Sellers Agent) a total commission of Six percent (6%) of the total sales price at the Closing of this transaction. 13. CASUALTY/CONDEMNATION. 13.1. Seller assumes all risk and liability, damage to or injury occurring to the Property and/or Personal Property by fire, storm, accident or any other casualty or cause until the Closing has been consummated. If the Property or Personal Property, or any part thereof, suffers any damages prior to the Closing from fire or other casualty, Buyer may either (i) terminate this Agreement and the Earnest Money Deposit and all interest thereon shall be returned to Buyer, in which event the parties shall have no further rights and liabilities hereunder except with respect to those matters specifically surviving termination or Closing; or (ii) without repairing such damage, consummate the Closing, in which latter event the proceeds of any insurance covering such damage shall be assigned to Buyer at Closing. 13.2. If, prior to Closing, action is initiated or threatened to take a material part of the Property by eminent domain proceedings or by deed in lieu under threat thereof, Buyer may either (i) terminate this Agreement and receive a refund of the Earnest Money Deposit, in which event the parties shall have no further rights or obligations hereunder except those matters specifically surviving termination or Closing; or (ii) consummate the Closing in which latter event any award received or to be received by Seller from the condemning authority shall be assigned to Buyer at the Closing. For purposes hereof, a "material part" shall be deemed to mean a taking which (i) prohibits or impedes Buyer's intended use of the Property; (ii) affects any means of ingress or egress to the Property; or (iii) physically affects more than ten percent (10%) of the available square footage of the Property. 31 14. DEFAULT. 14.1. In the event Buyer fails to perform any of the covenants and agreements set forth in this Agreement on its part to be performed within the time or times specified herein, the Earnest Money Deposit deposited by Buyer with Buyer's counsel hereunder, shall be paid to Seller as consideration for its execution of this Agreement and in full settlement of, and as liquidated damages for, any and all claims for damage occasioned by Buyer's default, the exact measure of damages being impossible to ascertain, and upon such payment this Agreement shall terminate, expire, cease and become null and void and, thereafter, all parties hereto shall be relieved of any and all further obligations and liabilities to each other under this Agreement, save and except those which by the terms of this Agreement are intended to survive any such termination. 14.2. In the event the Seller fails to perform any of the covenants and agreements set forth in this Agreement on its part to be performed, the Earnest Money Deposit and shall be returned to Buyer on demand, and upon such demand and the return of said Earnest Money Deposit to Buyer, this Agreement shall terminate, expire, cease and become null and void and, thereafter, all parties hereto shall be relieved and absolved of all further obligations and liabilities to each other under this Agreement, save and except those which by the terms of this Agreement are intended to survive any such termination. The Buyer, however, at its option and in lieu of the return of the Earnest Money Deposit and interest, as aforesaid, may proceed to enforce its rights of specific performance, against Seller under this Agreement. 15. NOTICES. All notices, requests, demands, and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be given to the party at its address or facsimile number set forth below. Each notice shall be deemed to have been duly given and received(1): (a) as of the date and time the same are personally delivered with a receipted copy, (b) if given by facsimile, when the facsimile is transmitted to the party's facsimile number specified below and confirmation of complete receipt is received by that transmitting party during normal business hours or the next Business Day if not confirmed during normal business hours; (c) if delivered by U. S. Mail, within three (3) days after depositing with the United States Postal Service, postage prepaid by certified mail, return receipt requested, or (d) if given by a nationally recognized or reputable overnight delivery service within one (1) day after deposit with such delivery service: If to Seller: Golden Flake Snack Foods, Inc. P.O. Box 2447 Birmingham, AL 35201 Facsimile: 205-458-7335 Attn: Patty Townsend (1) Provided that such notice shall not be deemed tardy because it is mailed on or before the date due hereunder but not the requisite number of days prior, only that delivery by such method shall extend the period of any required response from the recipient. 32 With a copy to: John P. McKleroy, Jr. Spain & Gillon, LLC 2117 Second Avenue North Birmingham, AL 35203 Facsimile: 205-324-8866 If to Buyer Alternative Communications, Inc. 5215 Highway Ave Jacksonville, Florida 32254 Facsimile ___________ With a copy to: C. Holt Smith III 233 Bay Street, Suite 930 Jacksonville, Florida 32202 Facsimile: 904-358-0060 or at such other address as the parties may specify from time to time by written notice to the other party. Notwithstanding the provisions hereof to the contrary, legal counsel for either party may provide any notice required or permitted hereunder solely by direct communication from said party's legal counsel to legal counsel for the other party pursuant to the methods of notice permitted under this paragraph. 16. SUCCESSORS AND ASSIGNS. All terms of this Agreement shall be binding upon, shall inure to the benefit of, and be enforceable by the parties hereto and its respective legal representatives, heirs, successors and assigns. This Agreement may not be assigned without the written consent of Seller, which consent will not be unreasonably withheld or delayed. 17. GOVERNING LAW. This Agreement is intended to be performed in the State of Florida and shall be governed and construed in all respects in accordance with the laws of the State of Florida, without regard to concepts of choice of laws. Venue in any action arising under this Agreement shall lie exclusively in the County and Circuit Courts of the Florida county in which the property is located. 18. CAPTIONS. The captions of this Agreement are inserted for convenience or reference only and not to define, describe or limit the scope or the intent of this Agreement or any term hereof. 19. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 33 20. CHANGES AND MODIFICATIONS; CHANGES AND INCORPORATION OF PRIOR AGREEMENTS. This Agreement may not be orally changed, modified or terminated. This Agreement supersedes any and all prior understandings, letters of intent and/or letter agreements. Other matters of similar nature shall be deemed to be of no force or effect in the interpretation of this Agreement, it being intended that this Agreement represents the entire understanding of the parties. No modification or waiver of any provision hereof shall be valid unless in writing and signed by the party against whom it is to be enforced. 21. WAIVER. No failure of either party to exercise any power given hereunder or to insist upon strict compliance with any obligations specified herein, and no custom or practice at variance with the terms hereof, shall constitute a waiver of any party's right to demand strict compliance with the terms hereof; provided, however, that any party may, at its sole option, waive any requirement, covenant or condition herein established for the benefit of such party without affecting any of the other provisions of this Agreement. 22. FURTHER ASSURANCES. Seller and Buyer each agree to execute and deliver to the other such further documents and instruments as may be reasonable and necessary in furtherance of and to effectuate the intent of the parties as expressed by the terms and conditions hereof. 23. ATTORNEY'S FEES. If either party commences an action against the other to enforce any of the terms hereof or because of the breach by either party of any of the covenants, terms or conditions hereof, the prevailing party shall be entitled to costs, expenses, and reasonable attorney's fees at both trial and appellate levels incurred in connection with the bringing and/or defense of any such action. 24. TIME OF ESSENCE. TIME IS OF THE ESSENCE TO THIS AGREEMENT. 25. RADON. Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit. This disclosure is required by Florida law to be contained in all contracts for sale or lease of buildings. 26. ESCROW AGENT; EARNEST MONEY DEPOSIT 26.1. Duties. By signing a copy of this Agreement, Escrow Agent agrees to comply with the terms hereof insofar as they apply to Escrow Agent. Upon its receipt, Escrow Agent shall receive and hold the Earnest Money Deposit in trust, to be held and disbursed in accordance with the provisions of this Agreement. 34 26.2. Indemnity. Escrow Agent shall not be liable to either party except for claims resulting from the gross negligence or willful misconduct of Escrow Agent. If the escrow is involved in any controversy or litigation, the parties hereto shall jointly and severally indemnify and hold Escrow Agent free and harmless from and against any and all loss, cost, damage, liability or expense, including costs of reasonable attorneys' fees to which Escrow Agent may be put or which may incur by reason of or in connection with such controversy or litigation, except to the extent it is finally determined that such controversy or litigation resulted from Escrow Agent's gross negligence or willful misconduct. If the indemnity amounts payable hereunder result from the fault of Buyer or Seller (or their respective agents), the party at fault shall pay, and hold the other party harmless against, such amounts. 26.3. Continuing Counsel. The parties hereby acknowledges that Escrow Agent is counsel to Buyer herein and the other party hereby agrees that in the event of a dispute hereunder or otherwise between Seller and Buyer, Escrow Agent may continue to represent Buyer notwithstanding that it is acting and will continue to act as Escrow Agent hereunder, it being acknowledged by all parties that Escrow Agent's duties hereunder are ministerial in nature. 26.4. Withdrawal. No party shall have the right to withdraw any monies or documents deposited by it with Escrow Agent prior to the Closing or termination of this Agreement except in accordance with the terms of this Agreement. 26.5. Written Objection. If a written objection is filed within the time allowed or if the Escrow Agent is in doubt as to its duties, the Escrow Agent may continue to hold the funds in escrow until the matter is resolved either by joint written direction from the parties or by any County or Circuit court having jurisdiction of the dispute or the Escrow Agent may interplead the same in the applicable County or Circuit court and be relieved of any and all liability therefor. In any action or proceeding regarding the Earnest Money Deposit brought by Escrow Agent or to which Escrow Agent is made a party the Escrow Agent shall be entitled to recover its reasonable costs and attorney's fees (through appeal). 27. DUE NEGOTIATION. This Agreement has been drafted following due negotiation by both parties and their respective representatives and fairly and accurately reflects the intent of the parties with regard to the terms and conditions of this Agreement. Accordingly, all parties agree that this Agreement shall not be construed for or against any party, but rather solely on the plain meaning of the contents hereof. None of the parties hereto shall be considered to be the drafter of this Agreement or any provision hereof for the purpose of any statute, case law or rule of interpretation or construction that would or might cause any provision to be construed against the drafter thereof. Each party has had or has been advised to seek legal advice by an attorney of their own choice prior to the execution of this Agreement. Each party fully understands the facts and has been informed fully as to their legal rights and obligations. Each party is signing or has signed this Agreement freely and voluntarily and with full knowledge of the possible implications hereof. 28. Intentionally Omitted. 35 29. RECORDING. Neither this Agreement, any portion thereof, nor any memorandum relating hereto, shall be placed of record by any party to this Agreement. 30. NO ASSUMPTION OF SELLER'S LIABILITIES. Buyer is acquiring only the Property from Seller. Buyer does not assume or agree to pay, or indemnify the Seller or any other person or entity against, any liability, obligation, or expense of the Seller or relating to the Property in any way except only to the extent, if any, herein expressly and specifically provided. 31. WAIVER OF JURY TRIAL. SELLER AND BUYER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SELLER AND BUYER ENTERING INTO THIS AGREEMENT. IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement as of the Effective Date, Signed, sealed and delivered in the presence of: ______________________________ Golden Flake Snack Foods, Inc., a Delaware Corporation [_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _] Date: ________________________ Print Name By: ------------------------ ______________________________ [_ _ _ _ _ _ _ _ _ ]Print Name [_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _] Its President Print Name ______________________________ Alternative Communications, Inc., a Florida Corporation [_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _] Date: ________________________ Print Name By: ------------------------ ______________________________ [_ _ _ _ _ _ _ _ _ _]Print Name [_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _] Its President Print Name 36 ACKNOWLEDGMENT C. HOLT SMITH III, Attorney as Law, 233 E. Bay Street, Suite 930, Jacksonville, Florida 32202 acknowledges receipt of the Earnest Money Deposit (if paid by check, subject to clearance) and agrees to act as Escrow Agent in accordance with the terms of the foregoing Agreement. ACKNOWLEDGED this ___ day of August, 2008. Name By: -------------------------------- 37 EXHIBIT A --------- Lots Eight (8), Nine (9) and West Twenty-seven (27) feet of Lot Ten (10), Block Five (5), Riverside Gardens, according to plat recorded in Flat Book 3, page 67, of the current public records of Duval County, Florida, also known as 4771 Phyllis Street, Jacksonville, Florida 32254. 38 EX-10.18 3 a5799738ex10_18.txt EXHIBIT 10.18 Exhibit 10.18 Purchase and Sale Agreement executed by and between Golden Flake Snack Foods, Inc. as Seller, and Michael L. Rankin, as Purchaser, with an effective date of August 20, 2008, for the sale of real property located at 2926 Kraft Drive, Nashville, County of Davidson, State of Tennessee and undeveloped real property located across the road from 2926 Kraft Drive. 39 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS by and among GOLDEN FLAKE SNACK FOODS, INC., a Delaware corporation the "Seller" and MICHAEL L. RANKIN, the "Purchaser" Dated as of August 20, 2008 PROPERTY: 2926 Kraft Drive, Nashville, Davidson County, Tennessee and vacant land across road from 2926 Kraft Drive 40 TABLE OF CONTENTS
1. IDENTIFICATION OF PARTIES...............................................................................1 2. DESCRIPTION OF THE PROPERTY.............................................................................1 3. THE PURCHASE PRICE......................................................................................1 4. TITLE...................................................................................................2 5. DUE DILIGENCE INSPECTIONS...............................................................................3 6. REPRESENTATIONS AND WARRANTIES OF SELLER................................................................4 7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER..................................................6 8. CONDITIONS PRECEDENT TO CLOSING.........................................................................6 9. COVENANTS OF SELLER.....................................................................................7 10. SELLER'S CLOSING DELIVERIES.............................................................................8 11. PURCHASER'S CLOSING DELIVERIES..........................................................................9 12. PRORATIONS AND ADJUSTMENTS.............................................................................10 13. CLOSING................................................................................................11 14. CLOSING COSTS..........................................................................................11 15. RISK OF LOSS...........................................................................................12 16. DEFAULT................................................................................................13 17. BROKER'S COMMISSION....................................................................................14 18. ESCROW.................................................................................................14 19. TAX-DEFERRED EXCHANGE COOPERATION......................................................................15 20. CONDITION OF PROPERTY..................................................................................16 21. LEASE TO SELLER........................................................................................16 22. MISCELLANEOUS..........................................................................................17 EXHIBIT A LEGAL DESCRIPTION OF THE LAND........................................................................23 EXHIBIT B INTENTIONALLY OMITTED................................................................................25 EXHIBIT C DUE DILIGENCE MATERIALS..............................................................................26 EXHIBIT D SPECIAL WARRANTY DEED................................................................................27 EXHIBIT E BILL OF SALE.........................................................................................32 EXHIBIT F CERTIFICATE OF NONFOREIGN STATUS.....................................................................35 EXHIBIT G ASSIGNMENT...........................................................................................37
41 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS 1. IDENTIFICATION OF PARTIES THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this "Agreement") is entered into as of August 20, 2008 (the "Effective Date") by and between GOLDEN FLAKE SNACK FOODS, INC., a Delaware corporation ("Seller"), and MICHAEL L. RANKIN, or his assigns ("Purchaser"). 2. DESCRIPTION OF THE PROPERTY In consideration of the mutual undertakings of the parties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller hereby agrees to sell and convey to Purchaser, subject to the terms and conditions hereof, and Purchaser hereby agrees to purchase from Seller, subject to the terms and conditions hereof, all of Seller's right, title and interest in and to the following: (a) That certain (i) improved real property located at 2926 Kraft Drive, Nashville, County of Davidson, State of Tennessee and (ii) undeveloped real property located across the road from 2926 Kraft Drive, and being more particularly described as Tract I and Tract II, respectively, on Exhibit A attached hereto (the "Land"), together with one building (approximately 65,967 square feet) located thereon, and all other improvements located on Tract I (collectively the "Improvements"); (b) All rights, privileges, easements and appurtenances to the Land and the Improvements, if any, including, without limitation, all of Seller's right, title and interest, if any, in and to all easements, rights-of-way and other appurtenances used or connected with the beneficial use or enjoyment of the Land and the Improvements (the Land, the Improvements and all such easements and appurtenances are sometimes collectively hereinafter referred to as the "Real Property"); (c) All personal property and fixtures (if any) owned by Seller and identified in Schedule A of Exhibit E (the "Personal Property"); and (d) All of Seller's interest in and to any service contracts, guarantees, licenses, approvals, certificates, permits and warranties, if any, relating to the Property, to the extent assignable (collectively, the "Intangible Property"). (The Real Property, the Personal Property and the Intangible Property are sometimes collectively hereinafter referred to as the "Property"). 3. THE PURCHASE PRICE. The purchase price for the Property shall be the greater of (i) $2,100,000.00 or (ii) $_____N/A___________ (the "Purchase Price") and shall be paid to Seller by Purchaser as follows: 1 (a) Within five (5) business days after the Effective Date, Purchaser will deposit into escrow with Chicago Title Insurance Company, 725 Cool Springs Blvd., Suite 160, Franklin, Tennessee 37067 ("Title Company") an earnest money deposit in immediately available funds in the amount of $20,000 (said deposit, and all interest earned thereon, collectively referred to as the "Deposit"). (b) The Deposit paid by Purchaser pursuant to the terms hereof shall be held by Title Company in escrow (pursuant to the Escrow Instructions set forth in Section 18 hereof) in an interest bearing account insured by the federal government in an institution as directed by Purchaser and reasonably acceptable to Seller. The Deposit is fully refundable to Purchaser upon written notice of termination of this transaction on or before the expiration of the Due Diligence Period subject to the prior delivery to Seller or his designated representative, of all of the Due Diligence Materials Seller has furnished Purchaser as set forth in Exhibit C prior to, and subsequent to, the Effective Date of this Agreement and all third party studies, appraisal and reports that Purchaser has ordered or obtained. Seller will immediately notify Title Company upon receipt of these materials, so that the Deposit can be disbursed to Purchaser, it being expressly agreed that the delivery of these materials is a condition precedent to the release of the Deposit to Purchaser. If the purchase and sale of the Property is consummated as contemplated hereunder, the Deposit shall either be (i) paid to Seller at the direction of Purchaser and credited against the Purchase Price, or (ii) as otherwise directed by Purchaser so long as the entire Purchase Price is paid. Provided Purchaser does not terminate this Agreement in accordance with this paragraph, upon the expiration of the Due Diligence Period, the Deposit shall be non-refundable to Purchaser except in the event of a default by Seller or as otherwise expressly set forth herein. (c) The balance of the Purchase Price over and above the amounts paid by or credited to Purchaser pursuant to Sections 3(a) and 3(b) above shall be paid to Seller by wire transfer of immediately available funds at the Closing (as that term is defined in Section 13 below), net of all prorations as provided herein. 4. TITLE. (a) Within ten (10) days after the Effective Date, Seller shall deliver a title commitment for an extended coverage ALTA type Owner's Policy of title insurance for the Real Property issued by Title Company (the "Title Report"), together with legible copies of all documents relating to the title exceptions referred to in such Title Report. 2 (b) Within twenty (20) days after the Effective Date, Purchaser shall notify Seller in writing of any initial title exceptions identified in the Title Report, which Purchaser disapproves. Any disclosed exception not disapproved in writing by such date shall be deemed approved by Purchaser, and shall constitute a "Permitted Exception" hereunder. Purchaser and Seller agree that (i) all non-delinquent property taxes and assessments, (ii) all matters created by or on behalf of Purchaser, including, without limitation, any documents or instruments to be recorded as part of any financing for the acquisition of the Property by Purchaser, and (iii) all matters agreed to by the parties hereto, shall constitute "Permitted Exceptions". Seller shall have ten (10) days after receipt of Purchaser's notification of disapproved title exceptions to provide Purchaser with a written notice of which disapproved exceptions Seller is willing or able to cause to be removed or insured against prior to Closing. If Seller fails to provide such written notice to Purchaser it will be presumed that Seller is unwilling to cause any of the disapproved title exceptions to be removed or insured against, and Purchaser then shall elect, by giving written notice to Seller and Title Company within five (5) days thereafter, (x) to terminate this Agreement, or (y) to waive its disapproval of such exceptions, in which case such exceptions shall then be deemed to be Permitted Exceptions and proceed to Closing. Purchaser's failure to give such notice shall be deemed an election to waive the disapproval of any such exception and proceed to Closing. If Purchaser elects to terminate this Agreement in accordance with clause (x) above, the Deposit shall be immediately refunded to Purchaser, and neither party shall have any further rights or obligations under this Agreement, except for those obligations that are to survive the termination of this Agreement as expressly set forth elsewhere in this Agreement. (c) Purchaser shall obtain a current ALTA/ACSM Land Title Survey to be prepared by Timothy Mark Donlon, Tenn. Registered Surveyor, No. 2297, of Donlon Land Surveying, LLC, 8120 Sawyer Brown Road, Suite 110A, Nashville, Tennessee 37221 ("Survey"), for Purchaser's review and approval and Purchaser shall deliver any objections to the Survey, along with a copy of the Survey, to Seller within the time frame set forth in Section 4(b) above. Seller's response to Purchaser's Survey comments will be addressed in a similar manner as Seller is to address Purchaser's title objections as set forth in Section 4(b) above. The cost of the Survey shall be paid by Purchaser. 5. DUE DILIGENCE INSPECTIONS. (a) As used in this Agreement, the term "Due Diligence Period" means the period from the Effective Date until 5:00 p.m. Central Standard Time on the sixtieth (60th) day following the Effective Date. Not later than five (5) business days after the Effective Date, Seller shall deliver to Purchaser the documents, reports, plans and materials set forth on Exhibit C attached hereto and incorporated herein ("Due Diligence Materials that are in Seller's possession or under its control. During the Due Diligence Period, and with reasonable advance notice (which may be telephonic) to Seller, Purchaser, its agents, representatives and consultants may enter onto the Real Property during reasonable business hours to perform inspections and tests of the Property and the structural, mechanical and other systems within any Improvements including, without limitation, soils tests and "Phase 1" environmental testing, and, if necessary, "Phase II" environmental testing; provided, however, that in no event shall such inspections or tests unreasonably disrupt or disturb the on-going operation of the Property. After making such tests and inspections, Purchaser shall promptly restore the Property to the condition that existed prior to making such tests and inspections (which obligation shall survive the Closing or any termination of this Agreement). All such tests and inspections shall be at Purchaser's expense. (b) Purchaser shall keep the Property free from all liens, and shall indemnify, defend, and hold harmless Seller from and against all claims, actions, losses, 3 liabilities, damages, costs and expenses (including, but not limited to, attorneys' fees and costs) incurred, suffered by, or claimed against the Seller by reason of any damage to the Property or injury to persons caused by Purchaser and/or its agents, representatives or consultants in exercising its rights under this Section 5. If any mechanic's liens encumber the Property as a result of Purchaser's activities or investigation, Purchaser shall cause the mechanic's liens to be removed, bonded or insured over within ten (10) days after receiving written notice from Seller. The foregoing provisions shall survive the Closing or any termination of this Agreement. (c) The Due Diligence Materials summarized in Exhibit C, to the extent in Seller's possession or under its control, are made by Seller to accommodate and facilitate Purchaser's investigations relating to the Property, and except as expressly set forth herein, Seller makes no representations or warranties of any kind regarding the accuracy or thoroughness of the information contained in the materials delivered to Purchaser, but Seller does warrant, to the best of its knowledge, that the Due Diligence Materials are true and correct copies of such Due Diligence Materials maintained in Seller's files. Seller agrees to continue to immediately furnish to Purchaser any additional Due Diligence Materials and any other items relevant to the property that may be discovered subsequent to the execution of this Agreement. (d) At any time during the Due Diligence Period, Purchaser may terminate this Agreement in its sole and absolute discretion for any reason or no reason by sending to Seller written notice of such termination. If Purchaser terminates this Agreement during the Due Diligence Period, the Deposit shall be immediately refunded to Purchaser, and neither party shall have any further rights or obligations under this Agreement, except for those obligations that are to survive the termination of this Agreement, as expressly set forth elsewhere in this Agreement. If Purchaser does not terminate this Agreement within the Due Diligence Period, the Deposit shall be retained by Title Company and applied or paid as herein provided. (e) Prior to Closing, all information derived from Purchaser's tests, test results, and other Due Diligence investigation completed by Purchaser shall, to the extent permissible under existing law, remain confidential and not be disclosed to any party other than as is necessary to consummate the transaction contemplated hereby or to exercise Purchaser's rights hereunder, including without limitation, Purchaser's affiliates, counsel, and its consultants and lenders. Purchaser shall bear all of the costs and expenses with respect to its feasibility studies, including, but not limited to, all environmental matters and investigations, surveys and other studies. In the event Seller obtains any copies of the third party tests and/or test results prepared for Purchaser during its Due Diligence Period, Purchaser shall incur no liability in Seller's use of the reports or for Seller's distribution of the reports to third parties. Any distribution of the reports by Seller shall be conditioned upon Seller's advising such third party that they are not to rely on the any of the reports. Seller's rights and obligations under this subsection (e) shall survive the termination of this Agreement. 6. REPRESENTATIONS AND WARRANTIES OF SELLER. 4 Seller represents and warrants to Purchaser that the following matters are true and correct as of the Effective Date and will also be true and correct as of the Closing: (a) Seller is validly incorporated and in good standing in the State of Delaware and is qualified to do business and in good standing in the State of Tennessee. (b) This Agreement is, and all the documents executed by Seller which are to be delivered to Purchaser at the Closing will be, duly authorized, executed, and delivered by Seller. The obligations contained in this Agreement, are and will be legal, valid, and binding obligations of Seller enforceable against Seller in accordance with their respective terms (except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally). This Agreement does not, and will not, violate any provisions of any agreement to which Seller is a party or to which it is subject. (c) To Seller's actual knowledge, there are no pending legal proceedings or administrative actions of any kind or character adversely affecting the Property or Seller's interest therein including any condemnation or eminent domain proceedings. (d) Except with respect to Environmental Laws (as defined below), which are covered by Section 6(e) below, Seller has received no written notice from any city, county, state or other government authority of any violation of any statute, ordinance, regulation, or administrative or judicial order or holding, whether or not appearing in public records, with respect to the Property, which violation has not been corrected. (e) Except as expressly set forth in any environmental reports delivered to Purchaser under Section 5(a), Seller has received no written notice and has no actual knowledge that (i) the Property is in violation of any federal, state and local laws, ordinances and regulations applicable to the Property with respect to hazardous or toxic substances or industrial hygiene (collectively, "Environmental Laws"), which violation has not been corrected, or (ii) past or current owners, tenants or occupants of all or any portion of the Property have used, generated, manufactured, stored, handled, released or disposed of any hazardous or toxic substances on the Property in violation of applicable Environmental Laws. (f) There are no leases, licenses or other occupancy agreements in effect in which Seller has granted any party rights to possession or use of the Real Property or any portion thereof, nor has Seller given any party an option or right of first refusal to purchase any portion of the Property. (g) Intentionally Deleted. (h) To Seller's actual knowledge, there are no service contracts or maintenance agreements with respect to the Property to which Seller is a party other than those delivered to Purchaser pursuant to Section 5 hereof. 5 (i) Seller has not filed or been the subject of any filing of a petition under the Federal Bankruptcy Law or any federal or state insolvency laws or laws for composition of indebtedness or for the reorganization of debtors. (j) Seller has disclosed to Purchaser and Purchaser acknowledges that the roof on the building on Tract I of the Property is in substantial disrepair and is in need of replacement. Seller shall not have any obligation or liability in regard to the roof or any other condition of the Property. As used in this Agreement, the phrase "to Seller's actual knowledge" or words of similar import means the actual (and not constructive or imputed) knowledge, without independent investigation or inquiry, of Joe Elliott, and Seller represents that said individual has the primary responsibility for overseeing the Property. Notwithstanding anything herein to the contrary, the individual listed in this Section shall have no personal liability to Purchaser with respect to any representations or warranties made herein "to the best of Seller's knowledge" and Purchaser has no legal recourse against the individual listed herein. Purchaser's only recourse for any breach of a representation or warranty set forth in this Agreement is limited by this Section and to the remedies set forth in Section 16, and only against the Seller. The express representations and warranties made in this Agreement shall not merge into any instrument or conveyance delivered at the Closing and shall survive Closing for a period of nine (9) months. Seller shall indemnify, defend, and hold Purchaser harmless from and against any losses, damages, costs or expenses (including, but not limited to, attorneys' fees and costs) incurred by Purchaser by reason of any breach or inaccuracy of the Seller's representations or warranties contained in this Section 6. Purchaser's only recourse for any breach or inaccuracy of the Seller's representations or warranties contained in this Section 6 is limited to the remedies set forth in Section 16. This provision shall survive Closing for a period of nine (9) months. 7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER. Purchaser represents and warrants to Seller that the following matters are true and correct as of the Effective Date and will also be true and correct as of the Closing: (a) Intentionally omitted. (b) This Agreement is, and all the documents executed by Purchaser which are to be delivered to Seller at the Closing will be, duly executed and delivered by Purchaser. The obligations contained in this Agreement are, and will be, legal, valid, and binding obligations of Purchaser enforceable against Purchaser in accordance with their respective terms (except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally). This Agreement does not, and will not, violate any provisions of any agreement to which Purchaser is a party or to which it is subject. 8. CONDITIONS PRECEDENT TO CLOSING. 6 The following shall be conditions precedent to Purchaser's obligation to consummate the purchase and sale transaction contemplated herein (the "Purchaser's Conditions Precedent"): (i) Purchaser shall not have terminated this Agreement in accordance with the terms of this Agreement within the time periods described in this Agreement. (ii) Title Company shall stand ready to issue, at the Closing, a Standard ALTA Owner's Policy of title insurance, with extended coverage over the standard exceptions, insuring Purchaser's fee simple interest in the Real Property, dated the day of the Closing, with liability in the amount of the Purchase Price, subject only to the Permitted Exceptions, together with such endorsements as Purchaser may reasonably require (the "Title Policy"). (iii) Intentionally Deleted. (iv) There shall be no material breach of any of Seller's representations, warranties or covenants set forth in Section 6 and Section 9 of this Agreement as of the Closing. (v) Seller shall have delivered to the Title Company the items described in Section 10. The conditions set forth in this Section 8(a) are solely for the benefit of Purchaser and may be waived only by Purchaser. Purchaser shall, at all times prior to the termination of this Agreement, have the right to waive any of these conditions. If any of the Purchaser's Conditions Precedent are not satisfied by Closing, Purchaser at its option may terminate this Contract. In such event, the Deposit shall be immediately returned to Purchaser and neither party shall have any further rights or obligations under this Agreement, except for those obligations that are to survive the termination of this Agreement, as expressly set forth elsewhere in this Agreement, provided, that if such failure of condition is caused by a Seller default, Purchaser may pursue its remedies under Section 16 below. 9. COVENANTS OF SELLER. Seller covenants with Purchaser, as follows: (a) Prior to the Closing, Seller shall not enter into any lease, license or occupancy agreement affecting the Property or any portion thereof, nor shall Seller enter into any Service Contracts that will be binding on the Property or the Seller after the Closing, without the prior written consent of Purchaser. (b) Intentionally Deleted. (c) Until the Closing, Seller shall keep the Property insured against fire, vandalism and other loss, damage and destruction in commercially reasonable amounts, provided, however, Seller's insurance policies shall not be assigned to Purchaser at the Closing, and Purchaser shall be obligated to obtain its own insurance coverage from and after the Closing. 7 (d) The building on Tract I of the Property is vacant except for a portion of the building which is occupied by Seller (the "Tract I Space") and no other operations are being conducted from the building. With this disclosure, until the Closing, Seller shall operate and maintain the Property in substantially the manner being operated and maintained on the date of this Agreement. (e) Prior to the Closing, Seller shall not, without the prior written consent of Purchaser, enter into any contract with respect to the Property which will survive the Closing or will otherwise affect the use, operation or enjoyment of the Property after the Closing. (f) Seller shall pay in full prior to the Closing (to the extent that such amounts have not already been paid), all bills and invoices for labor, goods, material and services of any kind relating to the Property, utility charges, and employee salary and other accrued benefits relating to the period prior to the Closing. Except with regard to the Tract I Space, Seller represents that it employs no employees at the Property. (g) Intentionally Deleted. (h) Seller shall promptly notify Purchaser of any change in any condition with respect to the Property or of any event or circumstance, which makes any representation, or warranty of Seller to Purchaser under this Agreement materially untrue or misleading, or any covenant of Seller under this Agreement incapable of being performed. 10. SELLER'S CLOSING DELIVERIES. At Closing, Seller shall deliver or cause to be delivered to Title Company the following: (a) A Special Warranty Deed executed by Seller (one for each separate parcel if necessary), in the form of Exhibit D attached hereto, conveying the Real Property to Purchaser free and clear of all claims, liens and encumbrances except the Permitted Exceptions and matters arising by or through Purchaser (the "Special Warranty Deed"). (b) A Bill of Sale executed by Seller, in the form of Exhibit E attached hereto, conveying to the Purchaser title to the Personal Property, if any (the "Bill of Sale"). (c) An affidavit in the form of Exhibit F attached hereto, certifying that Seller is not a "foreign person" within the meaning of Section 1445 of the U.S. Internal Revenue Code (the "Certificate of Non-Foreign Status") and an affidavit that Seller is a resident of Tennessee for state withholding tax purposes. (d) An Assignment executed by Seller, in the form of Exhibit G attached hereto, assigning to Purchaser the particular Service Contracts that Purchaser chooses to assume and any warranties, guaranties and indemnities relating to the Property, to the extent that such items exist and are assignable (the "Assignment"). Seller prior to the Closing shall terminate all Service Contracts that Purchaser does not choose to assume. 8 (e) An executed counterpart of a Settlement Statement as approved by the Title Company reflecting the receipt and disbursement of the Purchase Price as provided herein. (f) Any keys in the possession or control of Seller to all locks located in the Property. (g) A reaffirmation of Seller's representations and warranties as of Closing. (h) Originals, to the extent in Seller's possession, of all plans, permits, licenses, and other of the Due Diligence Materials, to the extent in Seller's possession, shall be delivered to Purchaser outside of escrow within five (5) business days after Closing. Purchaser acknowledges receipt of all items set forth on Exhibit C that were in the Seller's possession. (i) Evidence of Seller's authority to close this transaction. (j) State, county and local transfer declarations, as applicable. (k) Any other documents, instruments or agreements reasonably necessary to effectuate the transaction contemplated by this Agreement. 11. PURCHASER'S CLOSING DELIVERIES. Except as otherwise set forth below, at Closing Purchaser shall deliver to Title Company: (a) The balance of the Purchase Price, together with such other sums as Title Company shall require to pay Purchaser's share of the Closing costs, prorations, reimbursements and adjustments as set forth in Sections 12 and 14, herein, in immediately available funds. (b) An executed counterpart of the Assignment, whereby Purchaser shall assume the obligations relating to the matters set forth in such document. (c) An executed counterpart of a Settlement Statement as approved by the Title Company reflecting the receipt and disbursement of the Purchase Price as provided herein. 9 (d) Any other documents, instruments or agreements reasonably necessary to effectuate the transaction contemplated by this Agreement. 12. PRORATIONS AND ADJUSTMENTS. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified: (i) General real estate, personal property and ad valorem taxes and assessments, common area maintenance payments, if any, and similar payments under any declaration affecting the Property and any improvement or other bonds encumbering the Property, if any, for the current tax year for the Property. (ii) Utility charges, if any, and such other items that are customarily prorated in transactions of this nature shall be ratably prorated. (b) For purposes of calculating prorations, Purchaser shall be deemed to be in title to the Property, and, therefore, entitled to the income therefrom and responsible for the expenses thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing and based upon the actual number of days in the month and a three-hundred-sixty-five (365) day year. The amount of such prorations shall be initially performed by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available, if such information is not available at the Closing. Seller and Purchaser shall cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing (except with respect to property taxes, which shall be adjusted within sixty (60) days after the tax bills for the applicable period are received). Without limiting the generality of the foregoing, Seller and Purchaser agree that: (i) With respect to any property tax appeals or reassessments filed by Seller for tax years prior to the year in which the Closing occurs, Seller shall be entitled to the full amount of any refund or rebate resulting therefrom, and with respect to any property tax appeals or reassessments filed by Seller for the tax year in which the Closing occurs, Seller and Purchaser shall share the amount of any rebate or refund resulting therefrom (after first paying to Seller all costs and expenses incurred by Seller in pursuing such appeal or reassessment) in proportion to their respective periods of ownership of the Property for such tax year (with Seller and Purchaser each obligated for any amount of such refund or rebate required to be paid to any tenant for its respective period of ownership of the Property for such tax year, with Seller being responsible only for any amount owed to the tenant in excess of that credited to Purchaser at Closing pursuant to Section 12(a)(iv) above ); and 10 (ii) in no event will there be any proration of insurance premiums under Seller's existing policies of insurance relating to the Property, and none of Seller's insurance policies (or any proceeds payable thereunder, except as expressly provided for in Section 15 below) will be assigned to Purchaser at the Closing, and Purchaser shall be solely obligated to obtain any and all insurance that it deems necessary or desirable. Except as set forth in this Section 12, all items of income and expense which accrue for the period prior to the Closing will be for the account of Seller and all items of income and expense which accrue for the period on and after the Closing will be for the account of Purchaser. The provisions of this Section 12 shall survive the Closing. 13. CLOSING. The purchase and sale contemplated herein shall close (the "Closing") twenty (20) days following the expiration of the Due Diligence Period. As used herein, the term "Closing" means the date and time that Seller's Closing Deliveries and Purchaser's Closing Deliveries are delivered to the Title Company and the Title Company has been authorized to record the Deed and disburse the proceeds. 14. CLOSING COSTS. Purchaser shall pay all other costs of closing, including without limitation, all costs and expenses incurred in connection with obtaining any financing for the purchase of the Property, including title, escrow, documentation and appraisal costs relating thereto, the fee for recording the Special Warranty Deed and any documentary transfer tax due in connection with the consummation of the transaction contemplated herein, any sales commission, the premium for the Owner's and Mortgagee's title insurance policies, prorations of taxes and other matters as set forth herein. Each party shall bear the expense of its own counsel. Unless otherwise specified herein, if the sale of the Property contemplated hereunder does not occur because of a default by Purchaser, all escrow cancellation and title fees shall be paid by Purchaser; if the sale of the Property does not occur because of a default by Seller, all escrow cancellation and title fees shall be paid by Seller; if the sale of the Property contemplated hereunder does not occur because of the failure of a Purchaser's Condition Precedent, in each case other than due to default, Seller and Purchaser shall each pay one-half of the escrow cancellation and title fees. Notwithstanding anything to the contrary herein, in the event Purchaser finances any portion of the Purchase Price by placing a loan on the Property and provides the lender with a lender and/or mortgagee title insurance policy, then the cost of the premium of the owner's title insurance policy and the lender and/or mortgagee title insurance policy shall be paid by Purchaser. 15. RISK OF LOSS. (a) If prior to the Closing, the Improvements, or any part thereof, are materially damaged (as set forth in Section 15(d)), Purchaser shall have the right, exercisable by giving written notice to Seller within five (5) days after receiving written notice from Seller of such damage or destruction (but in any event prior to the Closing), either (i) to terminate this Agreement, in which case any money (including, without limitation, the Deposit and all interest accrued thereon) or documents in escrow shall be returned to the party depositing the same, and neither party shall have any further rights or obligations under this Agreement, except for those obligations that are to survive the termination of this Agreement, as expressly set forth elsewhere in this Agreement, or (ii) to accept the Property in its then condition and to proceed with the Closing with a credit for any insurance deductibles, but otherwise without any abatement or reduction in the Purchase Price and receive an assignment of all of Seller's right to any insurance proceeds payable by reason of such damage or destruction. A failure by Purchaser to notify Seller in writing within such five (5) day period shall be deemed an election to proceed under clause (ii) above. If Purchaser elects (or is deemed to have elected) to proceed under clause (ii) above, Seller shall not compromise, settle or adjust any claims to such proceeds without Purchaser's prior written consent. 11 (b) If prior to the Closing, all or any material portion (as set forth in Section 15(d)) of the Property is subject to a taking by public authority, Purchaser shall have the right, exercisable by giving written notice to Seller within five (5) days after receiving written notice from Seller of such taking (but in any event prior to the Closing), either (i) to terminate this Agreement, in which case any money (including, without limitation, the Deposit and all interest accrued thereon) or documents in escrow shall be returned to the party depositing the same, and neither party shall have any further rights or obligations under this Agreement, except for those obligations that are to survive the termination of this Agreement, as expressly set forth elsewhere in this Agreement, or (ii) to accept the Property in its then condition, without any abatement or reduction in the Purchase Price, and receive an assignment of all of Seller's rights to any condemnation award payable by reason of such taking. A failure by Purchaser to notify Seller in writing within such five (5) day period shall be deemed an election to proceed under clause (ii) above. If Purchaser elects (or is deemed to have elected) to proceed under clause (ii) above, Seller shall not compromise, settle or adjust any claims to such award without Purchaser's prior written consent. As used in this Section 15, "taking" means any transfer of the Property or any portion thereof to a governmental entity or other party with appropriate authority by exercise of the power of eminent domain. (c) If prior to the Closing, any non-material portion of the Property is damaged or subject to a taking, Purchaser shall accept the Property in its then condition (with a credit for any insurance deductibles but otherwise without any abatement or reduction in the Purchase Price) and proceed with the Closing, in which case Purchaser shall be entitled to an assignment of all of Seller's rights to any insurance proceeds or any award in connection with such taking, as the case may be. If any such non-material damage or taking occurs, Seller shall not compromise, settle or adjust any claims to such insurance proceeds or such award, as the case may be, without Purchaser's prior written consent. (d) For the purpose of this Section 15, damage to the Property, or a taking of a portion thereof, shall be deemed to involve a material portion thereof if the reasonably estimated cost of restoration or repair of such damage or the amount of the condemnation award with respect to such taking shall exceed $150,000.00, or affects any access to the Property, or affects the ability to occupy more than five percent (5%) of the leaseable space in the Improvements. 12 (e) Seller agrees to give Purchaser notice of any taking, damage or destruction of the Property promptly after Seller obtains knowledge thereof. The provisions of this Section 15 will survive the Closing. 16. DEFAULT. (a) If Seller defaults in its obligations under this Agreement after the end of the Due Diligence Period and on or before the Closing, or if any of Seller's representations or covenants set forth in this Agreement are not true and correct in all material aspects as of the Closing, then except as set forth in the next sentence, Purchaser's sole remedy shall be to (i) terminate this Agreement, whereupon the Title Company shall return the Deposit to Purchaser, and (ii) recover from Seller the reasonable and verifiable third-party out-of-pocket costs and expenses, up to the maximum amount of $20,000 incurred by Purchaser in connection with the review of the Property, including, without limitation, title and survey expenses, third-party report expenses, and reasonable attorney's fees, and upon receipt of said costs and expenses, both Seller and Purchaser shall be relieved of any further liability under this Agreement. Notwithstanding the foregoing, if Purchaser shall have the right to terminate this Agreement by reason of Seller's default in tendering settlement to Purchaser, Purchaser may elect to terminate the Agreement as set forth in this Section or pursue a remedy of specific performance of Seller's obligation to convey the Property to Purchaser within ninety (90) days of the Closing. If Purchaser fails to file such action for specific performance within such ninety (90) day period, the remedy will be considered waived and no longer enforceable. (b) If Purchaser defaults in its obligation to close the purchase of the property, the deposit, plus any interest accrued thereon, shall be paid to and retained by Seller as liquidated damages. The amount paid to and retained by Seller as liquidated damages shall be Seller's sole remedy if Purchaser fails to close the purchase of the Property. The parties hereto expressly agree and acknowledge that Seller's actual damages in the event of a default by Purchaser would be extremely difficult or impracticable to ascertain and that the amount of the deposit represents the parties' reasonable estimate of such damages. The payment of such amount as liquidated damages is not intended as a forfeiture or penalty, but is intended to constitute liquidated damages to Seller. Seller shall have no other remedy whether at law or equity for any default by Purchaser. Notwithstanding the foregoing, in no event shall seller's ability to recover from Purchaser any loss, cost, damage or expense pursuant to any indemnification or other provisions of this agreement that survive Closing hereunder be deemed limited in any respect by Seller's receipt of the Deposit, including, but not limited to Section 5(a) and Section 5(b). 17. BROKER'S COMMISSION. (a) Except for a 3% real estate commission payable by Purchaser to Southeast Venture/Oncor, Purchaser represents and warrants to Seller that no brokerage commission, finder's fee or other compensation is due or payable with respect to the transaction contemplated herein arising out of any action or representation by Purchaser. Purchaser shall indemnify, defend, and hold the Seller harmless from and against any losses, damages, costs and expenses (including, but not limited to, attorneys' fees and costs) incurred by the Seller by reason of any breach or inaccuracy of the Purchaser's representations and warranties contained in this Section 17(a). 13 (b) Seller represents and warrants to Purchaser that no brokerage commission, finder's fee or other compensation is due or payable with respect to the transaction contemplated herein arising out of any action or representation by Seller. Seller shall indemnify, defend, and hold Purchaser harmless from and against any losses, damages, costs and expenses (including, but not limited to, attorneys' fees and costs) incurred by Purchaser by reason of any breach or inaccuracy of Seller's representations and warranties contained in this Section 17(b) . (c) The provisions of this Section 17 shall survive the Closing. 18. ESCROW. (a) Purchaser and Seller each shall promptly deposit a copy of this Agreement executed by such party (or either of them shall deposit a copy executed by both Purchaser and Seller) with Escrow Agent, and, upon receipt of the Deposit from Purchaser, Escrow Agent shall immediately execute this Agreement where provided below. This Agreement, together with such further instructions, if any, as the parties shall provide to Escrow Agent by written agreement, shall constitute the escrow instructions. If any requirements relating to the duties or obligations of Escrow Agent hereunder are not acceptable to Escrow Agent, or if Escrow Agent requires additional instructions, the parties hereto agree to make such deletions, substitutions and additions hereto as counsel for Purchaser and Seller shall mutually approve, which additional instructions shall not substantially alter the terms of this Agreement unless otherwise expressly agreed to by Seller and Purchaser. (b) Escrow Agent is hereby designated the "real estate reporting person" for purposes of Section 6045 of Title 26 of the United States Code and Treasury Regulation 1.6045-4 and any instructions or settlement statement prepared by Escrow Agent shall so provide. Upon the consummation of the transaction contemplated by this Agreement, Escrow Agent shall file Form 1099 information return and send the statement to Seller as required under the aforementioned statute and regulation. Seller and Purchaser shall promptly furnish their federal tax identification numbers to Escrow Agent and shall otherwise reasonably cooperate with Escrow Agent in connection with Escrow Agent's duties as real estate reporting person. 14 (c) The parties acknowledge that the Escrow Agent shall be conclusively entitled to rely, except as hereinafter set forth, upon a certificate from Purchaser or Seller as to how the Deposit (which, for purposes of this Section shall be deemed to also include any other escrowed funds held by the Escrow Agent pursuant to this Agreement) should be disbursed. Any notice sent by Seller or Purchaser (the "Notifying Party") to the Escrow Agent shall be sent simultaneously to the other noticed parties pursuant to Section 20(f) herein (the "Notice Parties"). If the Notice Parties do not object to the Notifying Party's notice to the Escrow Agent within ten (10) days after the Notice Parties' receipt of the Notifying Party's certificate to the Escrow Agent, the Escrow Agent shall be able to rely on the same. If the Notice Parties send, within such ten (10) days, written notice to the Escrow Agent disputing the Notifying Party's certificate, a dispute shall exist and the Escrow Agent shall hold the Deposit as hereinafter provided. The parties hereto hereby acknowledge that Escrow Agent shall have no liability to any party on account of Escrow Agent's failure to disburse the Deposit if a dispute shall have arisen with respect to the propriety of such disbursement and, in the event of any dispute as to who is entitled to receive the Deposit, disburse them in accordance with the final order of a court of competent jurisdiction, or to deposit or interplead such funds into a court of competent jurisdiction pending a final decision of such controversy. The parties hereto further agree that Escrow Agent shall not be liable for failure to any depository and shall not be otherwise liable except in the event of Escrow Agent's gross negligence or willful misconduct. The Escrow Agent shall be reimbursed on an equal basis by Purchaser and Seller for any reasonable expenses incurred by the Escrow Agent arising from a dispute with respect to the Deposit. The obligations of Seller with respect to the Escrow Agent are intended to be binding only on Seller and Seller's assets and shall not be personally binding upon, nor shall any resort be had to, the private properties of any of the partners, officers, directors, shareholders or beneficiaries of Seller, or of any partners, officers, directors, shareholders or beneficiaries of any partners of Seller, or of any of Seller's employees or agents. 19. TAX-DEFERRED EXCHANGE COOPERATION. (a) Seller Exchange. Seller may exchange the Property for other property in a transaction qualifying under Internal Revenue Code section 1031. Purchaser and Seller agree that Seller has a right to effectuate a tax-deferred exchange within the meaning of section 1031 of all or any portion of the Property and that Purchaser will cooperate with Seller to effectuate such exchange. If Seller effectuates an exchange under section 1031, title to the Property will be transferred to Purchaser by an accommodation party as if title had been transferred to Purchaser directly from Seller. Upon designation of an accommodation party, and upon the accommodation party's written assumption of Seller's obligation, the accommodation party shall be substituted for Seller in the escrow as Seller of the Property and all other required performance under this Agreement, provided the foregoing shall not relieve Seller from its obligations and liabilities under this Agreement. Seller agrees to indemnify, defend, and hold Purchaser harmless for any loss, damage, claim, or liability to the extent arising out of Purchaser's agreement to permit performance by the accommodation party (excepting any attorney's fees incurred to review documents provided for signature to effect the tax-deferred 1031 exchange). Upon designation of an accommodation party, Purchaser shall render performance of all of its obligations to the accommodation party. Purchaser agrees to execute any and all documents, which are reasonably necessary to carry out the tax-deferred exchange. 15 (b) Purchaser Exchange. Purchaser may exchange the Property for other property in a transaction qualifying under Internal Revenue Code section 1031. Purchaser and Seller agree that Purchaser has a right to effectuate a tax-deferred exchange within the meaning of section 1031 of all or any portion of the Property and that Seller will cooperate with Purchaser to effectuate such exchange. If Purchaser effectuates an exchange under section 1031, title to the Property will be transferred by Seller to an accommodation party as if title had been transferred by Seller directly to Purchaser. Upon designation of an accommodation party, and upon the accommodation party's written assumption of Purchaser's obligation, the accommodation party shall be substituted for Purchaser in the escrow as Purchaser of the Property and all other required performance under this Agreement, provided the foregoing shall not relieve Purchaser from its obligations and liabilities under this Agreement. Purchaser agrees to indemnify, defend, and hold Seller harmless for any loss, damage, claim, or liability to the extent arising out of Seller's agreement to permit performance by the accommodation party (excepting any attorney's fees incurred to review documents provided for signature to effect the tax-deferred 1031 exchange). Upon designation of an accommodation party, Seller shall render performance of all of its obligations to the accommodation party. Seller agrees to execute any and all documents, which are reasonably necessary to carry out the tax-deferred exchange. 20. Condition of Property. Notwithstanding anything to the contrary herein, Seller makes no representations or warranties regarding the condition of the Property except to the extent expressly and specifically set forth herein. Purchaser has and shall have the opportunity to determine any and all conditions of the Property material to Purchaser's decision to buy the Property. Except as otherwise stated in this Agreement, Purchaser accepts the Property in their present "AS IS" condition. 21. Lease to Seller. During the Due Diligence Period, Purchaser and Seller shall negotiate a lease for the Tract I Space; however, the execution of or failure to execute such lease shall not be a condition precedent to Closing and shall not constitute a breach of the terms of this Agreement by either party. In the event Purchaser and Seller, during the Due Diligence Period, fail to execute, for whatever reason, a lease for the Tract I Space, then Seller shall have a period of 60 days following Closing to vacate the Tract I Space and remove all of its personal property therefrom at no rent or charge to Seller. 22. MISCELLANEOUS. (a) Authority. Each individual and entity executing this Agreement represents and warrants that he, she or it has the capacity set forth on the signature pages hereof with full power and authority to bind the party on whose behalf he, she or it is executing this Agreement to the terms hereof. 16 (b) Integration. This Agreement is the entire Agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, between the parties with respect to the matters contained in this Agreement. Except as provided in this Agreement, neither of the parties has relied upon any oral or written representation or oral or written information given by any representative of the other party. (c) Modification; Waiver. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or on behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach. (d) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this Agreement attached thereto. (e) Time of Essence. Time is of the essence in the performance of and compliance with each of the provisions and conditions of this Agreement. (f) Notice. Any communication, notice or demand of any kind whatsoever which either party may be required or may desire to give to or serve upon the other shall be in writing and delivered by personal service (including express or courier service), by electronic communication, whether by telex, telegram or facsimile (if confirmed in writing sent by a nationally recognized overnight delivery service or by registered or certified mail, postage prepaid, return receipt requested), or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: Purchaser: Michael L. Rankin ---------------------- Nashville, Tennessee _____ Attn: ______________ Telephone: (615) _______ Fax: (615) ______ with a copy to: ___________________ Attn: _______________ Telephone: (___) ________ Fax: (___) ________ 17 Seller: Golden Flake Snack Foods, Inc. One Golden Flake Drive Birmingham, Alabama 35205 Attn: Patty Townsend Telephone: (205) 323-6161 Fax: (205) 458-7335 Email: ptownsend@goldenflake.com With a copy to: Spain & Gillon, LLC 2117 Second Avenue North Birmingham, Alabama 35203 Attn: John P. McKleroy, Jr. Telephone: (205) 328-4100 Fax: (205) 324-8866 Email: jpm@spain-gillon.com Title Company: Chicago Title Insurance Company 725 Cool Springs Blvd. Suite 160 Franklin, Tennessee 37067 Attn: Stephanie Carter Telephone: (615) 435-1128 Fax: (615) 435-1129 Email: stephanie.carter@ctt.com Any party may change its address for notice by written notice given to the other in the manner provided in this Section. Any such communication, notice or demand shall be deemed to have been duly given or served on the date personally served, if by personal service, on the date of confirmed dispatch, if by electronic communication, or three (3) days after being placed in the U.S. Mail, if mailed. (g) Execution of Documents. The parties agree to execute such instructions to Title Company and such other instruments and to do such further acts as may be reasonably necessary to carry out the provisions of this Agreement. (h) Inducement. The making, execution and delivery of this Agreement by the parties hereto have been induced by no representations, statements, warranties or agreements other than those expressly set forth herein. (i) Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be valid under applicable law, but, if any provision of this Agreement shall be invalid or prohibited thereunder, such invalidity or prohibition shall be construed as if such invalid or prohibited provision had not been inserted herein and shall not affect the remainder of such provision or the remaining provisions of this Agreement. 18 (j) Construction; Interpretation. The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto. Section headings of this Agreement are solely for convenience of reference and shall not govern the interpretation of any of the provisions of this Agreement. References to "Sections" are to Sections of this Agreement, unless otherwise specifically provided. (k) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee (l) Omitted. (m) Assignment. This Agreement will be binding upon and inure to the benefit of each of the parties hereto and to their respective transferees, successors, and assigns. Purchaser may assign all of its right, title and interest under this Agreement at any time prior to the Closing, whereupon such assignee will succeed to all of the rights and obligations of Purchaser hereunder; provided, however, Purchaser shall not be released from such obligations. (n) Incorporation of Exhibits. The exhibits attached hereto are incorporated herein by reference. (o) Relationship of Parties. Notwithstanding anything to the contrary contained herein, this Agreement shall not be deemed or construed to make the parties hereto partners or joint venturers, or to render either party liable for any of the debts or obligations of the other, it being the intention of the parties to merely create the relationship of Seller and Purchaser with respect to the Property to be conveyed as contemplated hereby. (p) No Recordation. This Agreement shall not be recorded or filed in the public land or other public records of any jurisdiction by either party and any attempt to do so may be treated by the other party as a breach of this Agreement. (q) Confidentiality. Each party agrees that, except as otherwise set forth in this Agreement or provided by law or unless compelled by an order of a court, it shall keep the contents of this Agreement and any information related to the transaction contemplated hereby confidential and further agrees to refrain from generating or participating in any publicity statement, press release, or other public notice regarding this transaction without the prior written consent of the other party unless required under applicable law or by a court order. Notwithstanding the foregoing, Purchaser may provide such confidential information to its lenders, consultants, attorneys and prospective investors in connection with Purchaser's acquisition of the Property (provided that Purchaser shall instruct the aforesaid parties to maintain the confidentiality of such information). The provisions of this Section 22(q) shall survive the Closing or any termination of this Agreement and shall not be merged into any instrument or conveyance delivered at the Closing. This Section 22(q) shall cease to apply to Purchaser upon the Closing of the purchase and sale contemplated by this Agreement. 19 (r) Broker Not Third-Party Beneficiary. Seller and Purchaser agree that it is their specific intent that no broker shall be a party to or a third-party beneficiary of this Agreement or the escrow; and further that the consent of a broker shall not be necessary to any agreement, amendment, or document with respect to the transaction contemplated by this Agreement. (s) Non-Business Days. If any of the dates specified in this Agreement shall fall on a Saturday, a Sunday, or a holiday, then the date of such action shall be deemed to be extended to the next business day. [SIGNATURES ON NEXT PAGE] 20 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written. PURCHASER: MICHAEL L. RANKIN By: ________________________ Michael L. Rankin SELLER: GOLDEN FLAKE SNACK FOODS, INC., a Delaware corporation By: _________________________ Name: _________________________ Title: _________________________ 21 TITLE COMPANY AND ESCROW AGENT JOINDER -------------------------------------- Title Company and Escrow Agent hereby executes this Agreement for the sole purpose of acknowledging its responsibilities hereunder and to evidence its consent to serve as Title Company and Escrow Agent in accordance with the terms of this Agreement. TITLE COMPANY AND ESCROW AGENT: CHICAGO TITLE INSURANCE COMPANY By: _________________________ Name: _________________________ Title: _________________________ Date: ___________________, 2008 725 Cool Springs Blvd. Suite 160 Franklin, Tennessee 37067 22 EXHIBIT A LEGAL DESCRIPTION OF THE LAND ----------------------------- TRACT I Parcel I: Land in Davidson County, Tennessee, being Lot No. 21 and the northerly one-half (1/2) of Lot 20 on the Map of Sidco Subdivision, of record in Book 2133, page 115, Register's Office for said County. Said Lot No. 21 and the northerly one-half (1/2) of Lot No. 20 adjoin and front together 150 feet on the easterly boundary of Kraft Drive and run back between parallel lines, 315 feet to a dead line. Parcel II: Land in Davidson County, Tennessee, being Lot No. 22 and the southerly one-half of Lot 23 on the Map of Sidco Subdivision, of record in Book 2133, page 115, Register's Office for said County. Said Lots No. 22 and part of 23 front 150 feet on the easterly side of Kraft Drive and extend back between parallel lines 315 feet to the center line of the L. & N. lead track. Being the same property conveyed to Ronald B. Buchanan, Trustee, with full power to sell, mortgage or convey without joinder of beneficiary by Quitclaim Deed from Tennessee Chips, LLC, of record in Instrument No. 20070125-0010088, Register's Office for Davidson County, Tennessee. TRACT II Land in the 6th Civil District of Davidson County, Tennessee, being Lot No. 1 on the Plan of Hailey Subdivision, Sidco, Section 1, as of record in Book 5200, Page 364, said Register's Office. Beginning at a point in the westerly margin Kraft Drive, being the southeast corner of the S. Norfleet Allen, III, and Gaiser Property; thence along the said margin, South 2(0) 40' West 663 feet; thence North 87(0) 20' West 204.92 feet; thence North 4(0) 01' East 663.18 feet to a point in the south line of said property of Allen and Gaiser; thence along said line South 87(0) 20' east 189.30 feet to the beginning. 23 Less and except: Land in Davidson County, Tennessee, being Lot No. 2 on the plan of Hailey Subdivision, Revision 1, Sidco Section 1, as recorded August 17, 1992, at Book 7900, page 422, Register's Office for said County, to which plan reference is hereby made and the same incorporated herein for a complete description of said lot. Being part of the same property conveyed to Golden Flack Snack Foods, Inc., a Delaware Corporation, by deed from W. L. Hailey & Company, Inc., dated September 30, 1981, as of record at Book 5806, page 545, said Register's Office for Davidson County, Tennessee. 24 EXHIBIT B INTENTIONALLY OMITTED --------------------- 25 EXHIBIT C DUE DILIGENCE MATERIALS ----------------------- A. Any existing Environmental Reports. B. Any existing drawings, as-builts, building plans and specifications. C. Any existing surveys. D. Any existing title commitment and/or title policy. E. Any geotech/subsurface studies. F. Real estate tax bills. G. Any current management, maintenance and service agreements and contracts. H. Any letters verifying zoning and utilities. I. Any documentation concerning any actual, pending or threatened litigation against the Property. J. Copy of any covenants, restrictions, easements on the Property. 26 EXHIBIT D After recording, return to: SPECIAL WARRANTY DEED THIS INDENTURE, made this _____ day of __________, 2008, between ____________________, a __________________________, hereinafter called "Grantor", and ____________________________________, a __________ limited liability company, hereinafter called "Grantee" (the words "Grantor" and "Grantee" to include their respective heirs, successors and assigns where the context requires or permits). W I T N E S S E T H : That Grantor, for and in consideration of the sum of Ten Dollars ($10.00) and other valuable consideration in hand paid at and before the sealing and delivery of these presents, the receipt and sufficiency whereof are hereby acknowledged, has granted, bargained, sold, aliened, conveyed and confirmed, and by these presents does grant, bargain, sell, alien, convey and confirm unto the said Grantee, fee simple interest in and to all that tract or parcel of land described as follows: See Exhibit "A" attached hereto and incorporated by reference herein. This conveyance is made subject to the Permitted Encumbrances set forth on Exhibit "B" attached hereto and made a part hereof by this reference. TO HAVE AND TO HOLD said tract or parcel of land, with all and singular the rights, members and appurtenances thereof, to the same being, belonging, or in anywise appertaining, to the only proper use, benefit and behalf of the said Grantee forever in FEE SIMPLE. And, except as to the Permitted Encumbrances, the said Grantor will warrant and forever defend the right and title to the above described property unto the said Grantee against the lawful claims of Grantor and all persons claiming through or under Grantor, but not otherwise. 27 IN WITNESS WHEREOF, the Grantor has signed and sealed this Deed, the day and year above written. -------------------------------, a ______________________________ By: _________________________ Name: _________________________ Title: _________________________ STATE OF COUNTY OF Before me, a Notary Public within and for said State and County, duly commissioned and qualified, personally appeared __________________________, with whom I am personally acquainted, and who upon oath acknowledged himself to be the ________________________ of ________________________, a ____________, the within named bargainor, and that he as such officer being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by himself as said officer. WITNESS my hand and Notarial Seal at office this _______ day of _________, 2008. ------------------------------------------------ Notary Public My Commission Expires: __________________________________________ 28 (FOR RECORDING DATA ONLY) Tax Parcel ID Numbers: I, or we, hereby swear or affirm Property address: ________________________ that, to the best of affiant's Nashville, Tennessee knowledge, information, and belief, the actual consideration for this transfer or value of the property transferred, whichever is greater, is $___________ which amount is equal to or greater than the amount which the property transferred would command at a fair and voluntary sale. Mail tax bills to: (Person or Agency AFFIANT: responsible for payment of taxes) c/o Michael L. Rankin __________________________________ 8775 Folsom Boulevard Sacramento, CA 95826 State tax $ Subscribed and sworn to before me Register's fee $ 3.00 this ___day of ________, 2008. Recording fee $ 25.00 --------- Total $ Notary Public T.C. # ___________ (______________) My commission expires: _________________________ 29 Exhibit "A" ----------- To Deed ------- Legal Description ----------------- 30 Exhibit "B" ----------- To Deed ------- Permitted Encumbrances ---------------------- 31 EXHIBIT E BILL OF SALE ------------ FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the undersigned, ___________________________________, ("Seller"), does hereby give, grant, bargain, sell, transfer, assign, convey and deliver to ____________________________________, a ________ limited liability company, ("Purchaser"), all personal property (if any) described on Schedule A attached hereto and incorporated herein by this reference owned by Seller and located on or in that certain real property located in the County of Davidson, State of Tennessee and more particularly described in Schedule B attached hereto and incorporated herein by this reference. Seller warrants to Purchaser that Seller owns all right, title and interest in said Personal Property, free and clear of any lien, security interest or adverse claim. EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE, SAID PERSONAL PROPERTY IS BEING TRANSFERRED ON AN "AS IS" BASIS, WITHOUT ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, OF ANY KIND WHATSOEVER BY SELLER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, PURCHASER ACKNOWLEDGES THAT SELLER EXPRESSLY DISCLAIMS AND NEGATES, AS TO ALL PERSONAL PROPERTY TRANSFERRED HEREBY: (A) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY; (B) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; AND (C) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR MATERIALS. Seller covenants that it will, at any time and from time to time upon written request therefor, at Purchaser's sole expense and without the assumption of any additional liability thereby, execute and deliver to Purchaser, its nominees, successors and/or assigns, any new or confirmatory instruments and do and perform any other acts which Purchaser, its nominees, successors and/or assigns, may reasonably request in order to fully assign and transfer to and vest in Purchaser, its nominees, successors and/or assigns, and protect its or their rights, title and interest in and enjoyment of, all of the assets of Seller intended to be transferred and assigned hereby, or to enable Purchaser, its nominees, successors and/or assigns, to realize upon or otherwise enjoy any such assets. All references to "Seller" and "Purchaser" herein shall be deemed to include their respective nominees, successors and/or assigns, where the context permits. Notwithstanding the foregoing, it is understood and agreed that Seller is not transferring to Purchaser the personal property located in the Tract I Space owned by Seller, including, but not limited to, Golden Flake Snack Products, office equipment, furniture and supplies, computer equipment, business records and files, etc. [The Tract I Space is defined in the Purchase and Sale Agreement and Joint Escrow Instructions executed by and between Purchaser and Seller dated May ___, 2008.] 32 Dated: ________________, 2008. SELLER: _______________________________, a ______________________________ By: _________________________ Name: _________________________ Title: _________________________ 33 SCHEDULE A List of Personal Property None 34 SCHEDULE B Legal Description of the Real Property -------------------------------------- 35 EXHIBIT F CERTIFICATE OF NONFOREIGN STATUS -------------------------------- ____________________________ is ("Seller"), the transferor of that certain real property located in the County of Davidson, State of Tennessee and more particularly described on Exhibit A attached hereto (the "Property"). Section 1445 of the Internal Revenue Code of 1986 (the "Code") provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax will not be required in connection with the disposition of the Property pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of _________, 2008, by and between Seller and Panattoni Development Company, LLC, a California limited liability company, the undersigned certifies the following on behalf of Seller: 1. Seller is not a foreign corporation, foreign partnership, foreign trust or foreign estate, as those terms are defined in the code and the regulations promulgated thereunder; 2. Seller's U.S. Taxpayer" Identification Number is ____________; and 3. Seller's address is _____________________________________. It is understood that this certificate may be disclosed to the Internal Revenue Service, and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined the foregoing certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Seller. Date: _______________, 2008 Signature: _________________________ Authorized Signatory 36 EXHIBIT A Legal Description of Real Property ---------------------------------- 37 EXHIBIT G ASSIGNMENT ---------- THIS ASSIGNMENT (this "Assignment") is made as of __________, 2008, by and between the __________________________, a _____________________ ("Assignor"), and __________________________, a _____________ limited liability company, ("Assignee"). FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, Assignor grants, sells, conveys, transfers and assigns unto Assignee all of Assignor's right, title and interest in, to and under the following items, if any, relating to that certain real property located in the County of Davidson, State of Tennessee and more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Real Property"): (a) the contracts or agreements described in Exhibit B attached hereto and incorporated herein by this reference; (b) warranties, guarantees, indemnities, rights and claims (including, without limitation, those for workmanship, materials and performance) which may exist from, by or against any contractor, subcontractor, architect, manufacturer, laborer or supplier of labor, materials or other services relating to the Real Property or any improvements located thereon; (c) plans, drawings, and specifications for the improvements located on the Real Property; and (d) any licenses, approvals, certificates, trade names, permits and claims. Assignor shall indemnify, protect, defend and hold Assignee harmless from and against any and all claims, demands, damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising in connection with the contracts and agreements described in paragraph (a) above and relating to the period prior to the date hereof. Assignee accepts the foregoing assignment and assumes any executory obligations of Assignor arising after the date hereof in connection with the contracts and agreements described in paragraph (a) above and shall indemnify, protect, defend and hold Assignor harmless from and against any and all claims, demands, damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising in connection with the contracts and agreements described in paragraph (a) above and relating to the period on or after the date hereof. Assignor covenants that it will, at any time and from time to time upon written request therefor, at Assignee's sole expense and without the assumption of any additional liability therefor, execute and deliver to Assignee, and its successors and assigns, any new or confirmatory instruments and take such further acts as Assignee may reasonably request to fully evidence the assignment contained herein and to enable Assignee, and its successors and assigns, to fully realize and enjoy the rights and interests assigned hereby. 38 The provisions of this Assignment shall be binding upon, and shall inure to the benefit of, the successors and assigns of Assignor and Assignee, respectively. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon, provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this Assignment attached thereto. [SIGNATURE PAGE TO FOLLOW] 39 IN WITNESS WHEREOF, Assignor and Assignee have caused their duly authorized representatives to execute this Assignment as of the date first above written. ASSIGNOR: _______________________________, a ______________________________ By: _________________________ Name: _________________________ Title: _________________________ ASSIGNEE: _______________________________, a ______________________________ By: _________________________ Name: _________________________ Title: _________________________ 40 EXHIBIT A To ASSIGNMENT Legal Description of Real Property ---------------------------------- 41 EXHIBIT B To ASSIGNMENT Schedule of Contracts --------------------- None ---- 42 EX-10.19 4 a5799738ex10_19.txt EXHIBIT 10.19 Exhibit 10.19 Purchase and Sale Agreement executed by and between Golden Flake Snack Foods, Inc., as Seller, and Steve Bacorn, as Purchaser, with an effective date of July 7, 2008, for the sale of land and improvements located in Cobb County, Address being 321 Marble Mill Road, Marietta, Georgia 84 ATLANTA COMMERCIAL BOARD OF REALTORS, INC. STANDARD COMMERCIAL SALES AGREEMENT 1. PURCHASE AND SALE: As a result of the efforts Bryant Commercial Real Estate Partners ("Broker"), a licensed real estate broker, the undersigned purchaser Steve Bacorn ("Purchaser"), agrees to buy, and the undersigned seller Golden Flake Snack Foods, Inc. ("Seller"), agrees to sell all that tract of land being +/- ..98 acres, located in Cobb County, Address being 321 Marble Mill Road, Marietta, GA. 30060, Also known as District 16, Land lot 1005, Parcel 23 as more particularly described in Exhibit "A", attached hereto and by this reference made a part hereof, together with all improvements now located thereon, including all electrical, mechanical, plumbing and other systems and all fixtures located therein, as well as plants, trees and shrubbery thereon (collectively, the "Property"). 2. PURCHASE PRICE AND METHOD OF PAYMENT: The purchase price of the Property shall be Five Hundred and Seventy Six Thousand ($576,000) DOLLARS (U.S.) to be paid as follows: All cash at closing. 3. EARNEST MONEY: Purchaser has deposited with Smith, Eubanks, Smith and Tumlin ("Escrow Agent") $10,000 ( ) cash (x) check, the receipt of which is hereby acknowledged by Escrow Agent, as "Earnest Money" which Earnest Money shall be applied as partial payment of the cash portion of the purchase price of the Property at the time the sale is consummated. If Purchaser's check for the Earnest Money is returned by Purchaser's bank for any reason, Seller shall have the option to declare this Agreement null and void by written notice to Purchaser and Escrow Agent. Purchaser and Seller understand and agree that Escrow Agent shall deposit Earnest Money within five (5) banking days following the execution of this Agreement by all parties. The parties to this Agreement agree that Escrow Agent shall deposit the Earnest Money in (x) Escrow Agent's Non-Interest-bearing Escrow Trust Account. The parties to this Agreement understand and agree that the disbursement of Earnest Money held by the Escrow Agent can occur only (A) at closing; (B) upon written agreement signed by all parties having an interest in the funds; (C) upon court order; (D) upon the failure of any contingency or failure of either party to fulfill its obligations as set forth in this Agreement, or (E) as otherwise set out herein. In the event of a dispute between Purchaser and Seller regarding this Agreement and/or distribution of the Earnest Money, sufficient in the discretion of Escrow Agent to justify its doing so, Escrow Agent shall be entitled to interplead all or any disputed part of the Earnest Money into court, and thereupon be discharged from all further duties and liabilities hereunder. The filing of any such interpleader action shall not deprive Escrow Agent of any of its rights under this Agreement. Purchaser and Seller agree that Escrow Agent shall be entitled to be compensated by the party who does not prevail in the interpleader action for its costs and expenses, including reasonable attorney's fees, in filing said interpleader action. 4. TITLE: Seller agrees to convey good and marketable, fee simple title to the Property to Purchaser by Limited Warranty Deed. Good and marketable, fee simple title is hereby defined as title which is insurable by a national title insurance company at its standard rates on an ALTA Owner Policy, without exception other than the following "Permitted Title Exceptions": (A) zoning ordinances affecting the Property; (B) general utility, sewer and drainage easements of record upon which any buildings on the Property do not encroach; (C) subdivision restrictions of record; (D) current city, state and county ad valorem property and sanitary taxes not yet due and payable; and (E) leases and other easements, restrictions and encumbrances specified in this Agreement or on Exhibit "B", attached hereto and incorporated herein by this reference. Purchaser shall have thirty (30) days after the date that this Agreement has been fully executed and delivered to Seller and Purchaser to examine the title to the Property and notify Seller of any objections to matters affecting title to the Property, including the Permitted Title Exceptions. Seller shall have up to twenty (20) calendar days after receipt of Purchaser's written notice of objections in which to correct such defects, or to provide to Purchaser a written notice that Seller shall cause such objections to be corrected or cured on or before the date of closing. If Seller shall fail to either cure or correct such title objections defects, or provide to Purchaser such written notice obligating Seller to do so on or before the date of closing, within twenty (20) calendar days after receipt of said written notice, then Purchaser shall have the choice of (1) accepting the Property with such legal defects, or (2) declining to accept the Property with such legal defects. Purchaser shall exercise such choice by written notice to Seller mailed within twenty (20) calendar days following the end of the period provided above for the correction by Seller of such legal defects or notice of Seller's intention to do so on or before the closing. If Purchaser shall decline to so accept the Property subject to such legal defects, then this Agreement shall be null and void and the Earnest Money deposit shall be promptly refunded to Purchaser. In the event that Purchaser fails to make such election within such 20-day period it shall be conclusively deemed to have elected to accept the Property subject to such defects and proceed to closing. 85 5. LEASES/SERVICE CONTRACTS: Seller represents to Purchaser that there are no management, service or other contracts that affect the Property that cannot be terminated at closing by Purchaser at its sole discretion. Seller also represents that as of the day of closing, there will be no leases in effect on the Property except as set forth on Exhibit "C", attached hereto and by this reference made a part hereof. 6. WARRANTIES: Seller represents that: (A) to Seller's best reasonable knowledge, there are no existing or proposed governmental orders or condemnation proceedings affecting the Property and Seller has received no notice of any such orders or proceedings; (B) Seller is a validly existing entity existing under the laws of the State of Delaware and the individual executing on behalf of the entity has authority to enter into the transaction contemplated by this Agreement, or if executed in an individual capacity, has authority to execute; (C) to Seller's best reasonable knowledge, Seller has good and marketable fee simple title to the Property which can be conveyed to Purchaser in accordance with the terms and conditions of this Agreement. 7. APPLIANCES AND MECHANICAL SYSTEMS: Seller warrants and represents that all appliances remaining with the Property, and the heating, air conditioning, plumbing, and electrical systems, will be in normal operating condition at the time of closing. Purchaser shall have the privilege and responsibility of making inspections of said appliances and systems prior to closing and notwithstanding anything contained herein to the contrary, Seller's responsibility in connection with the foregoing shall cease at closing. To the extent transferable, Seller agrees to transfer and assign to Purchaser any and all transferable warranties regarding any such appliances and/or systems. 8. CONDITION OF PROPERTY: Seller represents that at closing the improvements on the Property will be in the same condition as they are on the date this Agreement is signed by Purchaser, ordinary wear and tear excepted. Until closing, Seller shall, at Seller's expense, maintain in full force and effect the same fire and extended coverage insurance carried by Seller on the Property on the date of this Agreement. However, should the Property be destroyed or substantially damaged before closing, then Seller shall provide to Purchaser written notice of such occurrence within ten (10) days after the date thereof, and, at the election of Purchaser: (A) this Agreement may be canceled; or (B) Purchaser may consummate this Agreement and receive an assignment of Seller's interest in such insurance proceeds as are paid or payable on the claim of loss. This election must be exercised within ten (10) days after Seller provides Purchaser written notice of the amount of the insurance proceeds, if any, which Seller will receive on the claim of loss. If Purchaser has not been so notified by Seller within forty-five (45) days subsequent to the occurrence of such damage or destruction, or by the date of closing, whichever occurs first, Purchaser may at its option cancel this Agreement by written notice to Seller. If Purchaser fails to provide such notice to Seller, Purchaser shall be conclusively deemed to have elected to consummate this Agreement and receive an assignment of Seller's interest in such insurance proceeds as are paid or payable on the claim of loss. 9. AGENCY DISCLOSURE: Purchaser and Seller acknowledge that Broker (Bryant Commercial Real Estate Partners, LLC) has acted as agent for Purchaser. Broker shall not owe any duty to Seller or Purchaser greater than what is set forth in the Brokerage Relationships in Real Estate Transactions Act, Official Code of Georgia Annotated Section 10-6A-1 et seq. 10. REAL ESTATE COMMISSION: 86 In negotiating this Agreement, Broker have rendered a valuable service for which the Broker shall be paid a commission at closing by Seller equal to seven percent (7%) of the Purchase Price (the "Commission"). Such Commission shall be payable at closing as follows: 100% paid to Bryant Commercial Real Estate Partners, LLC at closing. No change shall be made by Purchaser or Seller with respect to the time of payment, amount of payment, or the conditions of payment of the Commission, without the written consent of Broker. If this transaction involves an exchange of real estate, the full Commission shall be paid in respect to the property conveyed to each party to the other. The Commission on an exchange shall be calculated on the amount of the stated basis of each property as taken in such exchange, according to the agreement between the parties, and if no value is placed on the property to be exchanged, then according to the reasonable value thereof. In the event of any exchange, each party shall be regarded as the seller as to the property conveyed by each party. Purchaser and Seller each hereby represent and warrant to the other, and to Broker, that no party other than Broker is entitled as a result of the actions of Seller or Purchaser, as the case maybe, to a commission or other fee resulting from the execution of this Agreement or the transactions contemplated hereby, and Seller and Purchaser each hereby agree to severally indemnify, defend and hold each other and Broker harmless from and against any and all costs, damages and expenses, including attorneys fees arising from claims made by Broker or agents for additional real estate commissions or brokerage fees with whom the indemnifying party may have dealt. This representation, warranty and indemnity shall survive the rescission, cancellation, termination or consummation of this Agreement. 11. DISCLAIMER: Seller and Purchaser acknowledge that they have not relied upon the advice or representations, if any, of Broker, or their associate broker or salespersons, concerning: (A) the legal and tax consequences of this Agreement in the sale of the Property; (B) the terms and conditions of financing of the Property; (C) the purchase and ownership of the Property; (D) the structural condition of the Property; (E) the operating condition of any business; (F) the operating condition of the electrical, heating, air conditioning, plumbing, water heating systems and appliances on the Property; (G) the availability of utilities to the Property; (H) the investment potential or resale value of the Property; (I) the financial ability of Purchaser; (J) any conditions existing on the Property which may affect the Property; or (K) any matter which could have been revealed through a survey, title search or inspection of the Property. Seller and Purchaser both acknowledge that if such matters have been a concern to them, they have sought and obtained independent advice relative thereto. Seller and Purchaser acknowledge that the Atlanta Commercial Board of REALTORS, Inc. has furnished this Standard Commercial Sales Agreement form to its members as a service and that it makes no representation or warranty as to the enforceability of this Standard Commercial Sales Agreement form. 12. ASSIGNMENT: This Agreement, and the rights and obligations hereunder, may not be assigned by Purchaser without the prior written consent of Seller, which consent may not be unreasonably withheld, except to an affiliated company or a to be formed entity in which Purchaser has a majority equity interest. Notwithstanding anything contained herein to the contrary, however, any such approved assignee shall assume in writing all of the obligations and liabilities of Purchaser hereunder, and a copy of such assignment shall be provided to Seller in writing within two (2) days after it is signed by Purchaser and assignee. No such assignment shall release the original Purchaser from liability to Seller as set forth in this Agreement. 13. RESPONSIBILITY TO COOPERATE: Seller and Purchaser agree that such documentation as is reasonably necessary to carry out the terms of this Agreement shall be produced, executed and/or delivered by such parties within the time required to fulfill the terms and conditions of this Agreement. 14. DEFAULT; REMEDIES: Purchaser's Default: If the sale and purchase of the Property contemplated by this Agreement is not consummated because of Purchaser's default, then Seller shall retain the Earnest Money as full and final liquidated damages for such default of Purchaser, the parties hereto acknowledging that it is impossible to more precisely estimate the damages to be suffered by Seller upon Purchaser's default, and the parties expressly acknowledging that retention of the Earnest Money is intended not as a penalty, but as full and final liquidated damages and that said sum is an agreed reasonable estimate of such damages. The Seller's right to retain the Earnest Money as full and final liquidated damages is Seller's sole and exclusive remedy in the event of default hereunder by Purchaser, and Seller hereby waives and releases any right to (and hereby covenants that it shall not) sue the Purchaser (A) for specific performance of this Agreement; or (B) to prove that Seller's actual damages exceed the Earnest Money which is hereby provided Seller as full and final liquidated damages. In the event the purchase and sale contemplated in this Agreement is not consummated because of Purchaser's default, Purchaser hereby waives and releases any right to (and hereby covenants that it shall not) sue Seller to recover the Earnest Money or any part thereof. 87 Seller's Default: If the purchase of the Property is not consummated in accordance with the terms and conditions of this Agreement because of Seller's default, then the Earnest Money (including any interest earned thereon) shall be returned to Purchaser within five (5) business days of written demand from Purchaser and Purchaser shall have right, at its sole election: (A) to terminate this Agreement; (B) to pursue specific performance plus the cost of obtaining specific performance; or (C) if Purchaser is not reasonably able to obtain specific performance of Seller's obligations under this Agreement or if specific performance is an inadequate remedy as a result of acts or omissions of Seller, to pursue its remedies at law and equity (provided, however, in no event shall Purchaser be entitled to monetary damages in excess of an amount equal to the Earnest Money). 15. NOTICES: Except as may be otherwise provided for in this Agreement, all notices required or permitted to be given hereunder shall be in writing and shall be deemed delivered, either (A) in person, (B) by overnight delivery service prepaid, (C) by facsimile (FAX) transmission, or (D) U.S. Postal Service, postage prepaid, registered or certified, return receipt requested, to the party being given such notice at the appropriate address set forth below:
As to Purchaser: As to Seller: Golden Flake Snack Foods, Inc. Name: Steve Bacorn Name: Patty Townsend, CFO Address: 621 Hardage Farm Dr. Address: 1 Golden Flake Drive City, State, ZIP: Marietta, GA 30064 City, State, ZIP: Birmingham, AL 35233 Fax No.: 770-389-0114 Fax No.: 205-458-7316 As to Broker: Bryant Commercial Real Estate As to Partners, LLC Escrow Agent: Smith, Eubanks, Smith and Tumlin Name: Bryant Dromey Name: Hap Smith Address: 3500 Lenox Road, Suite 200 Address: 94 Church Street City, State, ZIP: Atlanta, GA 30326 City, State, ZIP: Marietta, GA 30060 Fax No.: 404-442-2811 Fax No.: 770-499-0027
Such notices shall be deemed to have been given as of the date and time actually received by the receiving party, or the date of refusal to accept delivery or inability to deliver, as shown on the return receipt. In the event no address for purpose of notice is specified with respect to a particular party as required by this Paragraph, any other party may direct notices to such party at any business or residence address known to such other party. Any such notice to an unspecified address shall be effective when delivered personally or, with respect to mailed notices, upon actual receipt by the party to whom such notice is directed, or the date of refusal to accept delivery or inability to deliver, as shown on the return receipt. 16. TIME: Time is of the essence with respect to this Agreement. 17. FOREIGN PERSON STATUS: At closing, if Seller does not deliver to Purchaser a certificate reasonably acceptable to Purchaser setting forth Seller's address and Social Security or Tax Identification number and certifying that Seller is not a foreign person for purposes of the Foreign Investment in Real Property Tax Act, as revised by the Deficit Reduction Act of 1984, then Purchaser shall deduct and withhold a tax equal to either ten percent (10%) of the Purchase Price or such other amount as may be authorized by a withholding certificate from the Internal Revenue Service. At Closing, if Seller does not deliver to Purchaser an affidavit reasonably acceptable to Purchaser confirming that Seller is a resident or "deemed resident" of the State of Georgia for purposes of O.C.G.A. Section 48-7-128, then Purchaser shall be entitled to withhold a portion of the Purchase Price for payment to the Georgia Department of Revenue pursuant to said statute. 88 18. ENVIRONMENTAL CONDITIONS: To Seller's best reasonable knowledge: (A) The Property has never been used as a landfill for garbage or refuse, dump, stump pit, toxic waste dump or cemetery, or for the handling, generation, treatment, release, storage or disposal of chemicals or hazardous wastes or substances so as to create an environmental hazard. For purposes of this Agreement, the term "hazardous wastes or substances" shall mean petroleum including crude oil or any fraction thereof, and any substance identified in CERCLA, RCRA, or any other federal, state or other governmental legislation or ordinance identified by its terms as pertaining to the disposal of hazardous substances or waste. (B) (i) The Property is free from any hazardous or toxic materials or waste or similarly described substances under any applicable federal or state laws or regulations and (ii) there have been no violations of applicable "wetlands" regulations in connection with the development of the Property. (C) There are no storage tanks located on the Property, either above or below ground. 19. SURVEY: Within thirty (30) days after the date that this Agreement has been fully executed by Seller and Purchaser, Purchaser shall obtain and deliver to Seller, at Purchaser's sole cost and expense, a current boundary survey of the Property, which shall be prepared by a Georgia registered land surveyor in accordance with no less than the minimum standards of the State of Georgia for surveys and land surveyors. Said survey shall: (A) be certified to Purchaser, Purchaser's lender (if applicable) and Purchaser's title insurer by the surveyor pursuant to a certificate in form and substance satisfactory to Purchaser; (B) correctly show the boundaries of the Property and the location of all buildings, structures, fences and other improvements situated on the Property, the location of and identify all visible easements and rights-of-way across, serving or abutting the Property, and all recorded easements to the extent they affect specific portions of the Property (including any and all off-site easements affecting or benefiting the Property) and (C) contain a calculation of the exact acreage of the Property (calculated to the nearest 1/100' of an acre), exclusive of any streets, roads and rights-of-way. Seller agrees to execute a Quit Claim Deed with the legal description of this survey in favor of the Purchaser. Purchaser's notice of title objections pursuant to Section 4 above shall include any objections revealed by such survey. 20. CLOSING COSTS: Purchaser shall pay all recorded costs of this transaction including document recording costs, all applicable intangible taxes and Purchaser's attorney's fees. Seller shall pay any applicable Georgia transfer fees and Seller's attorney's fees. 21. CLOSING: The sale of the Property shall be closed on or before thirty (30) days after the inspection period has been satisfied, at a time acceptable to Purchaser and Seller; provided, however, if Purchaser and Seller fail to agree on a time and place, the closing shall be held on the aforesaid date at 1:00 P.M. in the office of Broker at the address shown above. If the time period by which any right, option or election provided under this Agreement must be exercised, or by which any act required hereunder must be performed, or by which the closing must be held, expires on a Saturday, Sunday or legal holiday, then such time period shall be automatically extended to the close of business on the next regular business day. 22. MISCELLANEOUS: (A) Real estate taxes on the Property for the calendar year in which the sale is closed shall be prorated as of the date of closing. 89 (B) All tenant security deposits shall be delivered or credited by Seller to Purchaser at closing, and Purchaser shall sign an agreement at closing to hold Seller harmless against claims regarding such transferred security deposits. (C) Possession of the Property shall be granted by Seller to Purchaser no later than the day of closing, subject to the rights of tenants of the Property, if any are listed on Exhibit "D" hereto. (D) Conditions precedent to the obligation of either party to close hereunder, if any, are for the benefit of such party only, and any and all of said conditions may be waived in the discretion of the party benefited thereby. (E) This Agreement shall be construed under the laws of the State of Georgia. 23. CONDITIONS OF PURCHASE: The parties hereto agree that Purchaser's obligation to purchase the Property shall be subject to the satisfaction of the following terms and conditions ("The Conditions of Purchase"), any one or some of which may be waived in part: Inspections: Purchaser shall have a period of thirty (30) days after the date this Agreement has been fully executed by Seller and Purchaser to inspect the Property (the "Inspection Period"). Commencing on the acceptance date of this Agreement, and subject to the rights of the tenants, if any, Purchaser, Purchaser's agents, employees and contractors, shall have the right during regular business hours, but without unreasonable interfering with the operations being carried on upon the Property, to enter the Property, for the purposes of making surveys, inspections, soil tests, environmental studies and other investigations of the Property, including, but not limited to, the physical condition of any improvements and mechanical and electrical systems, leases, management, service and other contracts affecting the Property, and Seller's accounting books and records with respect to the operations of the Property. Purchaser shall and does hereby agree to indemnify, defend and hold harmless Seller and Broker or others from any loss or damages as a result of the exercise by Purchaser of the rights herein granted, including any damage resulting from the negligence of Purchaser or Purchaser's agents, employees or contractors. This indemnity shall survive the rescission, cancellation, termination or consummation of this Agreement. Should the Purchaser not be satisfied with the results of any of the reports, studies and inspections, the Purchaser at its sole discretion shall notify Seller of its dissatisfaction and declare this Agreement null and void prior to the expiration of the Inspection Period. Purchaser shall then be entitled to a full refund of its Earnest Money and shall deliver to Seller the copies of its reports and studies. Neither Purchaser nor Seller shall have any responsibilities, one to the other, if Purchaser notifies Seller of its dissatisfaction after Purchaser receives its Earnest Money. 24. ENTIRE AGREEMENT; AMENDMENT: This Agreement constitutes the sole and entire agreement between the parties hereto with respect to the subject matter hereof, and no modification of this Agreement shall be binding unless signed by all parties to this Agreement. No representation, promise, or inducement not included in this Agreement shall be binding upon any party hereto. 25. BINDING EFFECT: This Agreement shall bind and inure to the benefit of Seller, Purchaser and Broker, and their respective heirs, executors, legal representatives, successors and assigns. 26. SPECIAL STIPULATIONS: a. Seller and Purchaser agree that Seller shall have the option to lease said property for a period of 12 months after closing. The terms of the lease shall as follows: 90 1. First three months shall be free of rental charges, however a 1/12a' share of the real estate taxes and insurance shall be paid to Purchaser by Seller each month for the first three months. The real estate taxes shall be calculated as of the last tax bill received from Cobb County. Insurance shall be calculated from Sellers last insurance bill received from Seller's insurance company. 2. Starting at the beginning of the fourth month a rental rate of $5.00 per square foot or $3,333 per month shall be paid to Purchaser by Seller. 3. Seller shall terminate the lease at any time without notice to the Purchaser. 4. Seller and Purchaser agree to sign an Atlanta Commercial Board of Realtors Lease agreement before closing said property hereby attached as exhibit "C" and made apart hereto. 5. Seller and Purchaser agree that lease shall not become enforceable until said property is closed and good and marketable, fee simple title is transferred to the Purchaser. b. Seller and Purchaser agree that Purchaser shall have the option of extending the closing of said property for up to thirty days by depositing an additional non-refundable earnest money check of $10,000 with Escrow Agent prior to said closing date. 91 This instrument shall be regarded as an offer by the first party to sign it and is open for acceptance by the other party until 5 O'clock P.M. on the 30 day of July, 2008, by which time written acceptance of such offer must have been actually received by Broker, who shall promptly notify the other party of such acceptance. Purchaser acknowledges that Purchaser has read and understood the terms of this Agreement and has received a copy of it. The date of this Agreement is July 24, 2008. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. Signed sealed and delivered In the presence of: SELLER: __________________________ By: (Seal) ----------------------------------- Witness: Name/Title: ------------------------------ Address: --------------------------------- Phone: -------------------------------- Date: --------------------------------- Signed sealed and delivered In the presence of: Purchaser: __________________________ By: (Seal) ----------------------------------- Witness: Name/Title: ------------------------------ Address: --------------------------------- Phone: ----------------------------------- Date: ------------------------------------ Signed sealed and delivered In the presence of: Broker: __________________________ By: (Seal) ----------------------------------- Witness: Name/Title: ------------------------------- Address: ---------------------------------- Phone: ------------------------------------ Date: ------------------------------------- Signed sealed and delivered In the presence of: Escrow Agent: __________________________ By: (Seal) ----------------------------------- Witness: Name/Title: ------------------------------ Address: --------------------------------- Phone: ----------------------------------- Date: ------------------------------------ 92 ACCEPTANCE DATE: The Acceptance Date of this Agreement is the date upon which the last party executes or initials the last change in this Agreement and is ______________. The party last executing this Agreement shall promptly deliver executed counterparts of this Agreement to all parties in accordance with the notice provisions of this Agreement. Note: Prepare and attach Exhibit "A" - "C", as applicable Exhibit "A" Legal Description Exhibit "C" Leases 93 EXHIBIT A LEGAL DESCRIPTION ALL THAT TRACT AND PARCEL OF LAND LYING AND BEING IN LAND LOT 1005, of the 16th District, Second Section, Cobb County, Georgia, and being more particularly described as follows: Beginning at a point on the Southerly right of way of Marble Mill Road, 681.48 feet westerly along the southerly right of way of Marble Mill Road from the intersection of the southerly right of way of Marble Mill Road and the East Land Lot Line of Land Lot 1005, of the 16th District, 2nd Section, Cobb County, Georgia, running thence South 01 degrees 37 minutes 00 seconds East, 285.71 feet to an iron pin set; running thence North 88 degrees 42 minutes 00 seconds West, 150.00 feet to an iron pin set; running thence North 01 degrees 37 minutes 00 seconds West, 285.71 feet to an iron pin set and the southerly right of way of Marble Mill Road; thence running South 88 degrees 42 minutes 00 seconds East, 150.00 feet along the southerly right of way of Marble Mill Road to an iron pin set and the Point of Beginning. Being the same property as shown in survey for Golden Flake, dated July 20, 1984, by West Georgia Engineers & Surveyors, Inc. Being the same property as conveyed from O.C. Hubert to Golden Flake Snack Foods, Inc., dated August 9, 1984, and as recorded in Deed Book 3236, page 449, Cobb County, Georgia. 94 Exhibit "C" ATLANTA COMMERCIAL BOARD OF REALTORS, INC. STANDARD COMMERCIAL LEASE AGREEMENT THIS LEASE is made this ____ day of __________, 2008 by and among Steve Bacorn (hereinafter called "Landlord"), and Golden Flake Snack Foods, Inc. (hereinafter called "Tenant"). WITNESSETH: PREMISES 1. Landlord, for and in consideration of the rents, covenants, agreements, and stipulations hereinafter mentioned, provided for and contained herein to be paid, kept and performed by Tenant, leases and rents unto Tenant, and Tenant hereby leases and takes upon the terms and conditions which hereinafter appear, the following described property (hereinafter called the "Premises"), to wit: a 8,000+/- square foot office/warehouse building and being known as 321 Marble Mill Road, Marietta, GA 30060. No easement for light or air is included in the Premises TERM 2. The Tenant shall have and hold the Premises for a term of twelve (12) months beginning on the ____ day of __________, ________, and ending on the ____ day of _____________, _________, at midnight, unless sooner terminated as hereinafter provided. RENTAL 3. There shall be no rental amount due until the first day of the fourth month, however Tenant agrees to pay one twelfth (1/12) of the Landlord's annual taxes and insurance for the first three months. The real estate taxes shall be calculated as of the last tax bill received from Cobb County. Insurance shall be calculated from Sellers last insurance bill received from Seller's insurance company. Starting on the first day of the fourth month, Tenant agrees to pay Landlord $3,333 per month for the remainder of the term. SECURITY DEPOSIT 4. Tenant shall deposit with Landlord upon execution of this Lease $3,333 as a security deposit which shall be held by Landlord, without liability to Tenant for any interest thereon, as security for the full and faithful performance by Tenant of each and every term, covenant and condition of this Lease of Tenant. If any of the rents or other charges or sums payable by Tenant to Landlord shall be overdue and unpaid or should Landlord make payments on behalf of Tenant, or should Tenant fail to perform any of the terms of this Lease, then Landlord may, at its option, appropriate and apply the security deposit, or so much thereof as may be necessary to compensate Landlord toward the payment of the rents, charges or other sums due from Tenant, or towards any loss, damage or expense sustained by Landlord resulting from such default on the part of Tenant; and in such event Tenant shall upon demand restore the security deposit to the original sum deposited. In the event Tenant furnishes Landlord with proof that all utility bills have been paid through the date of Lease termination, and performs all of Tenant's other obligations under this Lease, the security deposit shall be returned in full to Tenant within thirty (30) days after the date of the expiration or sooner termination of the term of this Lease and the surrender of the Premises by Tenant in compliance with the provisions of this Lease. UTILITY BILLS 5. Tenant shall pay all utility bills, including, but not limited to water, sewer, gas , electricity, fuel, light and heat bills for the Premises, and Tenant shall pay all charges for garbage collection or other sanitary services, unless otherwise provided for herein. USE OF PREMISES 6. The Premises shall be used for office, distribution and storage purposes only and no other. The Premises shall not be used for any illegal purposes, nor in any manner to create any nuisance or trespass, nor in any manner to vitiate the insurance or increase the rate of insurance on the Premises. Except as provided herein, Landlord makes no warranties, express or implied, including fitness for purpose. 95 ABANDONMENT OF THE PREMISES 7. Tenant agrees not to abandon or vacate the Premises during the term of this Lease and agrees to use the Premises for the purposes herein leased until the expiration hereof. INDEMNITY; INSURANCE 8. Tenant agrees to and hereby does indemnify and save Landlord harmless against all claims for damages to persons or property by reason of Tenant's use or occupancy of the Premises, and all expenses incurred by Landlord because thereof, including attorney's fees and court costs. Supplementing the foregoing and in addition thereto, Tenant shall during the term of this Lease and any extension or renewal thereof, and at Tenant's expense, maintain in full force and effect comprehensive general liability insurance with limits of $500,000.00 per person and $1,000,000.00 per incident, and property damage limits of $100,000.00, which insurance shall contain a special endorsement recognizing and insuring any liability accruing to Tenant under the first sentence of this paragraph 8, and naming Landlord as additional insured. Tenant shall provide evidence of such insurance to Landlord prior to the commencement of the term of this Lease. Landlord and Tenant each hereby release and relieve the other, and waive its right of recovery, for loss or damage arising out of or incident to the perils insured against which perils occur in, on or about the Premises, whether due to the negligence of Landlord or Tenant or their Brokers, employees, contractors and/ or invitees, to the extent that such loss or damage is within the policy limits of said comprehensive general liability insurance. Landlord and Tenant shall, upon obtaining the policies of insurance required, give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease. REPAIRS BY TENANT 13. Tenant accepts the Premises in their present condition and as suited for the uses intended by Tenant. Tenant shall, throughout the initial term of this Lease, and any extension or renewal thereof, at its expense, maintain in good order and repair the Premises, including the building, heating and air conditioning equipment (including but not limited to replacement of parts, compressors, air handling units and heating units) and other improvements located thereon, except those repairs expressly required to be made by Landlord hereunder. Unless the grounds are common areas of a building(s) larger than the Premises, Tenant further agrees to care for the grounds around the building, including paving, the mowing of grass, care of shrubs and general landscaping. Tenant agrees to return the Premises to Landlord at the expiration, or prior to termination of this Lease, in as good condition and repair as when first received, natural wear and tear, damage by storm, fire, lightning, earthquake or other casualty alone excepted. ALTERATIONS 14. Tenant shall not make any alterations, additions, or improvements to the Premises. Tenant shall remove all of Tenant's machinery, equipment, and all items of parts, debris and truck vans from the Premises and yard area on or before the last day of the Lease Term. Tenant shall repair, at Tenant's expense, any damage to the Premises caused by the removal of any such machinery, equipment and other noted items. REMOVAL OF FIXTURES 15. Tenant may (if not in default hereunder) prior to the expiration of this Lease, or any extension or renewal thereof, remove all fixtures and equipment which it has placed in the Premises, provided Tenant repairs all damage to the Premises caused by such removal. DESTRUCTION OF OR DAMAGE TO PREMISES 16. If the Premises are totally destroyed by storm, fire, lightning, earthquake or other casualty, this Lease shall terminate as of the date of such destruction and rental shall be accounted for as between Landlord and Tenant as of that date. If the Premises are damaged but not wholly destroyed by any such casualties, rental shall abate in such proportion as use of the Premises has been destroyed and Landlord shall restore the Premises to substantially the same condition as before damage as speedily as is practicable, whereupon full rental shall recommence. GOVERNMENTAL ORDERS 17. Tenant agrees, at its own expense, to comply promptly with all requirements of any legally constituted public authority made necessary by reason of Tenant's occupancy of the Premises. Landlord agrees to comply promptly with any such requirements if not made necessary by reason of Tenant's occupancy. It is mutually agreed, however, between Landlord and Tenant, that if in order to comply with such requirements, the cost to Landlord or Tenant, as the case may be, shall exceed a sum equal to one year's rent, then Landlord or Tenant who is obligated to comply with such requirements may terminated this Lease by giving written notice of termination to the other party by certified mail, which termination shall become effective sixty (60) days after receipt of such notice and which notice shall eliminate the necessity of compliance with such requirements by giving such notice unless the party giving such notice of termination shall, before termination becomes effective, pay to the party giving notice all cost of compliance in excess of one year's rent, or secure payment of said sum in manner satisfactory to the party giving notice. 96 CONDEMNATION 18. If the whole of the Premises, or such portion thereof as will make the Premises unusable for the purposes herein leased, are condemned by any legally constituted authority for any public use or purposes, then in either of said events the term hereby granted shall cease from the date when possession thereof is taken by public authorities, and rental shall be accounted for as between Landlord and Tenant as of said date. Such termination, however, shall be without prejudice to the rights of either Landlord or Tenant to recover compensation and damage caused by condemnation from the condemner. It is further understood and agreed that neither the Tenant nor Landlord shall have any rights in any award made to the other by any condemnation authority notwithstanding the termination of the Lease as herein provided. Broker may become a party to the condemnation proceeding for the purpose of enforcing his rights under this paragraph. EVENTS OF DEFAULT 19. The happening of any one or more of the following events (hereinafter any one of which may be referred to as an "Event of Default") during the term of this Lease, shall constitute a breach of this Lease on the part of the Tenant: (A) Tenant abandons or vacates the Premises; (B) Tenant fails to comply with or abide by and perform any other obligation imposed upon Tenant under this Lease; (C) Tenant is adjudicated bankrupt; (D) a permanent receiver is appointed for Tenant's property and such receiver is not removed within sixty (60) days after written notice from Landlord to Tenant to obtain such removal; (E) Tenant, either voluntarily or involuntarily, takes advantage of any debt or relief proceedings under the present or future law, whereby the rent or any part thereof is, or is proposed to be reduced or payment thereof deferred; (F) Tenant makes an assignment for benefit of creditors. REMEDIES UPON DEFAULT 20. Upon the occurrence of an Event of Default, Landlord, in addition to any and all other rights or remedies it may have at law or in equity, shall have the option of pursuing any one or more of the following remedies: (A) Landlord may terminate this Lease by giving notice of termination, in which event this Lease shall expire and terminate on the date specified in such notice of termination, with the same force and effect as though the date so specified were the date herein originally fixed as the termination date of the term of this Lease, and all rights of Tenant under this Lease and in and to the Premises shall expire and terminate, and Tenant shall remain liable for all obligations under this Lease arising up to the date of such termination and Tenant shall surrender the Premises to Landlord on the date specified in such notice; (B) Landlord may terminate this Lease as provide in paragraph 20(A) hereof and recover from Tenant all damages Landlord may incur by reason of Tenant's default, including, without limitation, a sum which, at the date of such termination, represents the then value of the excess, if any, of (i) the monthly rental and additional rent for the period commencing with the day following the date of such termination and ending with the date hereinbefore set for the expiration of the full term hereby granted, over (ii) the aggregate reasonable rental value of the Premises (less reasonable brokerage commissions, attorneys' fees and other costs relating to the reletting of the Premises) for the same period, all of which excess sum shall be deemed immediately due and payable; 97 (C) Landlord may, from time to time without terminating this Lease, and without releasing Tenant in whole or in part from Tenant's obligation to pay monthly rental and additional rent and perform all of the covenants, conditions and agreements to be performed by Tenant as provided in this Lease, make such alterations and repairs as may be necessary in order to relet the Premises, and, after making such alterations and repairs, Landlord may, but shall not be obligated to, relet the Premises or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable or acceptable; upon each reletting, all rentals received by Landlord from such reletting shall be applied first, to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord, second, to the payment of any costs and expenses of such reletting, including brokerage fees and attorneys' fees, and of costs of such alterations and repairs, third, to the payment of the monthly rental and additional rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied against payments of future monthly rental and additional rent as the same may become due and payable hereunder; in no event shall Tenant be entitled to any excess rental received by Landlord over and above charges that Tenant is obligated to pay hereunder, including monthly rental and additional rent; if such rentals received from such reletting during any month are less than those to be paid during the month by Tenant hereunder, including monthly rental and additional rent, Tenant shall pay any such deficiency to Landlord, which deficiency shall be calculated and paid monthly; Tenant shall also pay Landlord as soon as ascertained and upon demand all costs and expenses incurred by landlord in connection with such reletting and in making any alterations and repairs which are not covered by the rentals received from such reletting; notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach. Tenant acknowledges that the Premises are to be used for commercial purposes, and Tenant expressly waives the protections and rights set forth in Official Code of Georgia Annotated Section 44-7-52. LANDLORD'S ENTRY OF PREMISES 20. Landlord may enter the Premises at reasonable hours to exhibit the Premises to prospective purchasers or tenants, to inspect the Premises to see that Tenant is complying with all of its obligations hereunder, and to make repairs required of Landlord under the terms hereof or to make repairs to Landlord's adjoining property, if any. EFFECT OF TERMINATION OF LEASE 21. No termination of this Lease prior to the normal ending thereof, by lapse of time or otherwise, shall affect Landlord's right to collect rent for the period prior to termination thereof. SUBORDINATION 22. At the option of Landlord, Tenant agrees that this Lease shall remain subject and subordinate to all present and future mortgages, deeds to secure debt or other security instruments (the "Security Deeds") affecting the Building or the Premises, and Tenant shall promptly execute and deliver to Landlord such certificate or certificates in writing as Landlord may request, showing the subordination of the Lease to such Security Deeds, and in default of Tenant so doing, Landlord shall be and is hereby authorized and empowered to execute such certificate in the name of and as the act and deed of Tenant, this authority being hereby declared to be coupled with an interest and to be irrevocable. Tenant shall upon request from Landlord at any time and from time to time execute, acknowledge and deliver to Landlord a written statement certifying as follows: (A) that this Lease is unmodified and in full force and effect (or if there has been modification thereof, that the same is in full force and effect as modified and stating the nature thereof); (B) that to the best of its knowledge there are no uncured defaults on the part of Landlord (or if any such default exists, the specific nature and extent thereof); (C) the date to which any rent and other charges have been paid in advance, if any; and (D) such other matters as Landlord may reasonably request. Tenant irrevocably appoints Landlord as its attorney-in-fact, coupled with an interest, to execute and deliver, for and in the name of Tenant, any document or instrument provided for in this paragraph. QUIET ENJOYMENT 23. So long as Tenant observes and performs the covenants and agreements contained herein, it shall at all times during the Lease term peacefully and quietly have and enjoy possession of the Premises, but always subject to the terms hereof. NO ESTATE IN LAND 24. This Lease shall create the relationship of Landlord and Tenant between the parties hereto. No estate shall pass out of Landlord. Tenant has only a usufruct not subject to levy and sale, and not assignable by Tenant except by Landlord's consent. HOLDING OVER 25. If Tenant remains in possession of the Premises after expiration of the term hereof, with Landlord's acquiescence and without any express agreement of the parties, Tenant shall be a tenant at will at the rental rate which is in effect at end of this Lease and there shall be no renewal of this Lease by operation of law. If Tenant remains in possession of the Premises after expiration of the term hereof without Landlord's acquiescence, Tenant shall be a tenant at sufferance and commencing on the date following the date of such expiration, the monthly rental payable under Paragraph 3 above shall for each month, or fraction thereof during which Tenant so remains in possession of the Premises, be twice the monthly rental otherwise payable under Paragraph 3 above. 98 ATTORNEY'S FEES 26. In the event that any action or proceeding is brought to enforce any term, covenant or condition of this Lease on the part of Landlord or Tenant, the prevailing party in such litigation shall be entitled to recover reasonable attorney's fees to be fixed by the court in such action or proceeding, in an amount at least equal to fifteen percent of any damages due from the non-prevailing party. Furthermore, Landlord and Tenant agree to pay the attorney's fees and expenses of (A) the other party to this Lease (either Landlord or Tenant) if it is made a party to litigation because of its being a party to this Lease and when it has not engaged in any wrongful conduct itself, and (B) Broker if Broker is made a party to litigation because of its being a party to this Lease and when Broker has not engaged in any wrongful conduct itself. RIGHTS CUMULATIVE 27. All rights, powers and privileges conferred hereunder upon parties hereto shall be cumulative and not restrictive of those given by law. WAIVER OF RIGHTS 28. No failure of Landlord to exercise any power given Landlord hereunder or to insist upon strict compliance by Tenant of its obligations hereunder and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver of Landlord's right to demand exact compliance with the terms hereof. ENVIRONMENTAL LAWS 29. Landlord represents to the best of its knowledge and belief, (A) the Premises are in compliance with all applicable environmental laws, and (B) there are not excessive levels (as defined by the Environmental Protection Agency) of radon, toxic waste or hazardous substances on the Premises. Tenant represents and warrants that Tenant shall comply with all applicable environmental laws and that Tenant shall not permit any of his employees, brokers, contractors or subcontractors, or any person present on the Premises to generate, manufacture, store, dispose or release on, about, or under the Premises any toxic waste or hazardous substances which would result in the Premises not complying with any applicable environmental laws. TIME OF ESSENCE 30. Time is of the essence of this Lease. DEFINITIONS 31. "Landlord" as used in this Lease shall include the undersigned, its heirs, representatives, assigns and successors in title to the Premises, "Tenant" shall include the undersigned and its heirs, representatives, assigns and successors, and if this Lease shall be validly assigned or sublet, shall include also Tenant's assignees or subtenants as to the Premises covered by such assignment or sublease. "Broker" shall include the undersigned, its successors, assigns, heirs and representatives. "Landlord", "Tenant" and "Broker" include male and female, singular and plural, corporation, partnership or individual, as may fit the particular parties. NOTICES 32. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or delivered by courier or sent by regularly scheduled commercial overnight delivery service prepaid, or deposited with the U.S. Postal Service, postage prepaid. In the event that any notice or obligation shall be required to be given or performed on a weekend or legal holiday then such date shall automatically be extended to the close of business of the next regular business day. Any such notices or deliveries required or permitted hereunder may be delivered to the fax number set forth herein by facsimile thereof (with delivery of an original by acceptable means as set forth above, promptly to follow) and such facsimile shall constitute an acceptable notice or delivery. Broker shall be copied with all required or permitted notices. Notices to Tenant shall be delivered or sent to the address shown below, except that upon Tenant's taking possession of the Premises, then the Premises shall be Tenant's address for notice purposes. Notices to Landlord and Broker shall be delivered or sent to the addresses hereinafter stated, to wit: 99 Landlord: Tenant: Steve Bacorn Golden Flake Snack Foods, Inc 621 Hardage Farm Drive One Golden Flake Drive Marietta, GA 30064 Birmingham, AL 35233 Fax: 770-389-0114 Broker: Bryant Commercial Real Estate Partners 3500 Lenox Road, NE Suite 200 Atlanta, GA 30326 Office: 404-442-2810 All notices shall be effective upon delivery. Any party may change his notice address upon written notice to the other parties. ENTIRE AGREEMENT 34. This Lease contains the entire agreement of the parties hereto, and no representations, inducements, promises or agreements, oral or otherwise, between the parties, not embodied herein, shall be of any force or effect. No subsequent alteration, amendment, change or addition to this Lease, except as to changes or additions to the Rules and Regulations described in paragraph 7, shall be binding upon Landlord or Tenant unless reduced to writing and signed by Landlord and Tenant. SPECIAL STIPULATIONS 35. Any special stipulations are set forth in the attached Exhibit ____. Insofar as said Special Stipulations conflict with any of the foregoing provisions, said Special Stipulations shall control. 100 Tenant acknowledges that Tenant has read and understands the terms of this Lease and has received a copy of it. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. Signed sealed and delivered TENANT: ----------------------------- in the presence of: _________________________ By: (Seal) ----------------------------------------- Witness: Name/Title: ------------------------- Address: --------------------------- Phone: ------------------------------ Signed sealed and delivered LANDLORD: --------------------------- in the presence of: _________________________ By: (Seal) ----------------------------------------- Witness: Name/Title: ------------------------- Address: --------------------------- Phone: ------------------------------ Signed sealed and delivered BROKER: ----------------------------- in the presence of: _________________________ By: (Seal) ----------------------------------------- Witness: Name/ Title: ------------------------ Address: 3500 Lenox Road, Suite 200 Atlanta, GA 30326 Phone: 404-442-2810 Firm License #: 47588 101 EXHIBIT "A" ----------- SPECIAL STIPULATIONS 1. Facsimile Signatures. Facsimile signatures shall be sufficient unless originals are required by a third party. 2. Counterparts. This Lease may be executed in two or more counterparts, each of which shall constitute an original, but when taken together shall constitute but one Lease. Each counterpart shall be effective if it bears the signatures of all parties hereto; or so many counterparts shall contain all of the signatures of the parties hereto shall constitute one Lease, and shall be effective as such. 3. E-Mail. E-mail is not sufficient for legal notice under Paragraph __ of the Lease. 4. It is hereby acknowledged by both Seller and Purchaser or Landlord and Tenant, as applicable that Broker, nor its affiliated licenses have engaged in the unauthorized practice or law during the negotiation of this transaction contemplated herein. Seller and Purchaser or Landlord and Tenant are hereby advised to seek legal counsel prior to executing this Agreement with any question (s) as to legal matters as they pertain to this transaction herein. 102 FIRST AMENDMENT TO THE ATLANTA COMMERCIAL BOARD OF REALTORS, INC. STANDARD COMMERCIAL. SALES AGREEMENT by and between Seller (Golden Flake Snack Foods, Inc. ). and (Steve Bacorn), dated July 28, 2008 for the property located at 321 Marble Mill Road, Marietta, GA 30060, Cobb County, Georgia Purchaser and Seller hereby agree that this amendment, dated August 27, 2008, shall become a part of the original above referenced contract (all parts together shall be the "Agreement") and carry the same force, effect and remedies as all parts of the contract that are contained in the original document. The principals further agree to the following: 1) Purchaser and Seller agree that the contract to purchase 321 Marble Mill Road, Marietta, GA 30060 dated July 28, 2008 between Seller (Golden Flake Snack Foods, Inc) and Purchaser (Steve Bacorn) shall remain in full force. 2) Purchaser and Seller agree that the letter dated August 20, 2008 from the Purchaser to the Broker is hereby withdrawn by the Purchaser. 3) Purchaser and Seller agree to extend the inspection period until 4:00 on September 4, 2008. The closing date shall remain on or before September 26, 2008. 4) Purchaser and Seller agree that the purchase price shall be five hundred and fifty six thousand ($556,000) DOLLARS (U.S.) 5) Purchase and Seller agree that all other terms of the Purchase Agreement shall remain as before and that the points changed above shall supersede the Atlanta Commercial Board Of Realtors, Inc. Standard Commercial Sales Agreement dated July 28, 2008. Acknowledgments: Signatures below signify agreement to the terms above. Purchaser: ---------------------------- ------------ Date ---------------------------- ------------ Date 103 SECOND AMENDMENT TO THE ATLANTA COMMERCIAL BOARD OF REALTORS, INC. STANDARD COMMERCIAL SALES AGREEMENT by and between Seller (Golden Flake Snack Foods, Inc.) and (Steve Bacorn), dated July 28, 2008 for the property located at 321 Marble Mill Road, Marietta, GA 30060, Cobb County, Georgia Purchaser and Seller hereby agree that this amendment, dated September 4, 2008, shall become a part of the original above referenced contract (all parts together shall be the "Agreement") and carry the same force, effect and remedies as all parts of the contract that are contained in the original document. The principals further agree to the following: 1) Purchaser and Seller agree that the Seller shall complete the following work prior to closing. After the following items have been completed, the Purchaser shall have the option to inspect the following items prior to closing. a. Install an expansion tank on the cold water side of the water heater. b. Provide access panel for water cut-off valve and pressure reducing valve. c. Change overflow pipe on water heater from plastic to copper. d. Change all door knobs from cylindrical design to lever design according to ADA compliance standards. e. Gas fired unit heaters in the warehouse need to have disconnects installed on the unit. f. Exits signs shall be installed at every exit man door as well as emergency egress lighting installed in the warehouse and offices. g. The A/C condenser needs to have a GFIC receptacle installed with in 25 feet of it. h. The louver on the exhaust fan shall be fixed so that it opens completely when turned on. i. The electrical cable that feeds the louver is a rubber cord that shall be replaced with conduit or MC Cable. j. The ground wire from the panel to the ground rod shall be in a PCV or Ridged conduit. k. The outdoor lighting shall be replaced or repaired A switch shall be installed on the front light so that the lights can be turn off during the day. l. Replace or repair all light fixtures that are not working properly. 2) Purchaser and Seller agree that the Seller shall re-stripe the parking lot area as well as adding ADA compliant handicap parking. The Seller agrees to re-stripe the parking lot according to Purchase's layout. Seller also agrees to re-stripe the parking area after vacating the premises. 3) Purchase and Seller agree that all other terms of the Purchase Agreement shall remain as before and that the points changed above shall supersede the Atlanta Commercial Board of Realtors, Inc. Standard Commercial Sales Agreement dated July 28, 2008. Acknowledgements: Signatures below signify agreement to the terms above. Purchaser: ------------------------------------------- ------------- Seller: Date ------------------------------------------- -------------- Date 104 EX-31.1 5 a5799738ex31_1.txt EXHIBIT 31.1 EXHIBIT 31.1 CERTIFICATION BY MARK W. MCCUTCHEON PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Mark W. McCutcheon, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Golden Enterprises, Inc. for the first quarter ended August 29, 2008; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Dated: October 9, 2008 /s/ Mark W. McCutcheon - ---------------------- Mark W. McCutcheon President and Chief Executive Officer 105 EX-31.2 6 a5799738ex31_2.txt EXHIBIT 31.2 EXHIBIT 31.2 CERTIFICATION BY PATTY TOWNSEND PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Patty Townsend, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Golden Enterprises, Inc. for the first quarter ended August 29, 2008; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: October 9, 2008 /s/ Patty Townsend - ------------------ Patty Townsend Vice-President and Chief Financial Officer 106 EX-32.1 7 a5799738ex32_1.txt EXHIBIT 32.1 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Golden Enterprises, Inc. (the "Company") on Form 10-Q for the first quarter ended August 29, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark W. McCutcheon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: October 9, 2008 /s/ Mark W. McCutcheon - ---------------------- Mark W. McCutcheon President and Chief Executive Officer A signed original of this written statement required by Section 906 has been provided to Golden Enterprises, Inc. and will be retained by Golden Enterprises, Inc. and furnished to the Securities and Exchange Commission, or its staff, upon request. 107 EX-32.2 8 a5799738ex32_2.txt EXHIBIT 32.2 EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Golden Enterprises, Inc. (the "Company") on Form 10-Q for the first quarter ended August 29, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Patty Townsend, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: October 9, 2008 /s/ Patty Townsend - ------------------ Patty Townsend Vice-President and Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to Golden Enterprises, Inc. and will be retained by Golden Enterprises, Inc. and furnished to the Securities and Exchange Commission, or its staff, upon request. 108 -----END PRIVACY-ENHANCED MESSAGE-----