AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of June 11, 1998 by and between
Global Walk, Inc., a Japanese corporation ("Global"); MIN Acquisition Corp., a
California corporation (the "Company"); and Vacu-dry Company, a California
corporation ("Vacu-dry").
R E C I T A L S:
WHEREAS, Global and Made In Nature Inc. ("Made In Nature") entered into an
Amended and Restated Purchase and Prepayment Agreement dated October 17, 1996
(the "Purchase Agreement") pursuant to which Global made certain prepayments to
Made In Nature against the future delivery by Made In Nature to Global of frozen
organic apple juice and other products; and
WHEREAS, as of the date hereof, there is due from Made in Nature to Global
pursuant the Purchase Agreement approximately $1,050,000, including principal,
interest, and costs; and
WHEREAS, to secure its obligations pursuant to the Purchase Agreement, Made
In Nature granted to Global a security interest in certain of its assets
pursuant to an Amended and Restated Security Agreement dated October 17, 1996
(the "Security Agreement"); and
WHEREAS, to further secure Made In Nature's obligations pursuant to the
Purchase Agreement, Xxxxxx X. Xxxxxxx pledged certain shares of Made In Nature's
issued and outstanding common stock pursuant to a Pledge Agreement dated October
17, 1996 (the "Pledge Agreement"); and
WHEREAS, pursuant to a Subscription Agreement dated November 17, 1997 (the
"Subscription Agreement"), Global purchased $250,000 face value of Made In
Nature's 8% Senior Secured Convertible Promissory Note (the "Secured Note"); and
WHEREAS, to secure its obligations pursuant to the Secured Note, Made In
Nature granted to Global a security interest in certain of its assets pursuant
to a Security Agreement dated November 17, 1997 (the "Secured Note Security
Agreement") (the Purchase Agreement, the Security Agreement, the Pledge
Agreement, the Subscription Agreement, the Secured Note and the Secured Note
Security Agreement are hereinafter referred to as the "Loan Agreements"); and
WHEREAS, the Company has been organized by Vacu-dry to acquire
substantially all of the assets of Made In Nature pursuant to an Asset Purchase
Agreement dated as of June 11, 1998 (the "Asset Purchase Agreement"); and
WHEREAS, Global desires to acquire certain shares of the Company's common
stock on the terms and conditions provided for in this Agreement; and
WHEREAS, Vacu-dry is a party to this Agreement for purposes of certain
representations, warranties and covenants.
NOW, THEREFORE, in consideration of these premises and the mutual covenants
and agreements herein contained and other valuable consideration, the receipt
and adequacy of which the parties hereto acknowledge, the parties agree as
follows:
1. Purchase and Sale of the Shares. Subject to the terms and conditions of
this Agreement, Global agrees to purchase at the Closing, and the Company agrees
to sell and issue to Global at the Closing, against payment of the purchase
price set forth below, 15,000 shares of the Company's common stock (the
"Shares").
2. Purchase Price. The purchase price to be paid by Global for the Shares
shall be $1.00.
3. Closing Date; Delivery. The purchase and sale of the Shares shall be
held at the offices of Xxxxxxxx & Werson, A Professional Corporation, Xxx
Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 immediately
prior to the closing of the purchase and sale provided for in the Asset Purchase
Agreement or at such other times and places as the parties may agree upon
(collectively, the "Closing"). At the Closing, subject to the terms of this
Agreement, the Company will deliver to Global a certificate representing the
Shares against delivery of the Purchase Price.
4. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, Global that:
(a) Organization and Standing; Articles and Bylaws. The Company is a
corporation duly organized and existing under, and by virtue of, the laws of the
State of California and is in good standing under such laws. The Company has the
requisite corporate power to own and operate its properties and assets and to
carry on its business as presently conducted and as proposed to be conducted.
The Company is qualified, licensed or domesticated as a foreign corporation in
all jurisdictions where the nature of its activities or of its properties owned
or leased makes such qualification, licensing or domestication necessary at this
time.
(b) Corporate Power. The Company has now, or will have as of the
Closing, all requisite legal and corporate power to enter into this Agreement,
to sell the Shares hereunder, and to carry out and perform its obligations under
the terms of this Agreement.
(c) Capitalization. The authorized capital stock of the Company
consists of 1,000,000 shares of Common Stock, no par value, of which 85,000
shares are issued and outstanding and owned by Vacu-dry (the "Vacu-dry shares").
The issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, and were issued in compliance
with all applicable state and federal laws concerning the issuance of
securities. There are no outstanding rights, options, warrants, conversion
rights, or agreements for the purchase or acquisition from the Company of any
shares of its capital stock.
(d) Authorization.
(i) All corporate action on the part of the Company, its officers,
directors, and stockholders necessary for the sale and issuance of the Shares
pursuant hereto and the performance of the Company's obligations hereunder, has
been taken or will be taken prior to the Closing. This Agreement is a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting
enforcement of creditors' rights, and except as limited by application of legal
principles affecting the availability of equitable remedies.
(ii) The Shares, when issued in compliance with the provisions of this
Agreement, will be validly issued, fully paid and nonassessable, and will be
free of any liens or encumbrances; provided, however, that such Shares may be
subject to restrictions on transfer under state and/or federal securities laws
as set forth herein and as may be required by future changes in such laws.
(iii) No shareholder of the Company has any right of first refusal or
any preemptive rights in connection with the issuance of the Shares or of Common
Stock by the Company.
(e) Financial Statements. The Company's balance sheet as of June 5, 1998
which has been supplied to Global is true and correct, has been prepared in
accordance with generally accepted accounting principles (except that the
balance sheet does not contain the footnotes required by generally accepted
accounting principles), and fairly presents the financial condition of the
Company as of the date thereof. As of the date hereof there are no liabilities
of the Company other than liabilities provided for in the balance sheet and
other than liabilities pursuant to the Asset Purchase Agreement.
(f) Compliance with Other Instruments, None Burdensome, etc. The Company is
not in violation of any term of its Articles of Incorporation or Bylaws, or in
any material respect of any mortgage, indenture, contract, agreement,
instrument, or to the best knowledge of the Company, any judgment, decree,
order, statute, rule, or regulation applicable to it. The execution, delivery,
and performance by the Company of this Agreement, and the issuance and sale of
the Shares pursuant hereto, will not result in any such violation or be in
conflict with or constitute a default under any such term, or cause the
acceleration of maturity of any loan or material obligation to which the Company
is a party or by which it is bound or with respect to which any of them is an
obligor or guarantor, or result in the creation or imposition of any material
lien, claim, charge, restriction, equity or encumbrance of any kind whatsoever
upon, or to the best knowledge of the Company after due inquiry, give to any
other person any interest or right (including any right of termination or
cancellation) in or with respect to any of the material properties, assets,
business or agreements of the Company.
(g) Litigation, etc. There are no actions, proceedings or investigations
pending (or to the best of the Company's knowledge, any basis therefor), which,
either in any case or in the aggregate, might result in any adverse change in
the business, prospects, conditions, affairs, or operations of the Company or in
any of its properties or assets, or in any impairment of the right or ability of
the Company to carry on its business as proposed to be conducted, or in any
material liability on the part of the Company, or which question the validity of
this Agreement or any action taken or to be taken in connection herewith.
(h) Governmental Consent, etc. No consent, approval, or authorization of,
or designation, declaration, or filing with, any governmental unit is required
on the part of the Company in connection with the valid execution and delivery
of this Agreement, or the offer, sale or issuance of the Shares, or the
consummation of any other transaction contemplated hereby (except exemption
notice filings under the Blue Sky securities laws which filings have been or
will be timely made so as to comply with such laws).
(i) Offering. The offer, sale and issuance of the Shares in conformity with
the terms of this Agreement will not violate the Securities Act of 1933 (the
"Securities Act") or any applicable state Blue Sky law.
(j) Insurance. The Company has in full force and effect fire, casualty and
other insurance policies, sufficient in amount (subject to reasonable
deductibles) to allow it to replace any of its properties that might be damaged
or destroyed.
(k) The Shares:
(i) are free and clear of any security interests, liens, claims, or
other encumbrances;
(ii) have been duly and validly authorized and issued and are, and as
of the Closing Date will be, fully paid and non-assessable;
(iii) will not have been, individually and collectively, issued or sold
in violation of any pre-emptive or other similar rights of the holders of any
securities of the Company;
(iv) will not subject the holders thereof to personal liability by
reason of being such holders.
5. Representations and Warranties of Global. Global represents and warrants
to, and agrees with, the Company as follows:
(a) No consent, approval, authorization, or order of any court,
governmental agency or body, or arbitrator having jurisdiction over Global is
required for execution of this Agreement, including, without limitation, the
purchase of the Shares, or the performance of Global's obligations hereunder.
(b) Global understands that no federal or state agency has passed on or
made any recommendation or endorsement of the Shares.
(c) The Company has given Global the opportunity to have answered all of
Global's questions concerning the Company and its business and has made
available to Global all information requested by Global which is reasonably
necessary to verify the accuracy of other information furnished by the Company.
Global has received and evaluated all information about the Company and its
business which Global deems necessary to formulate an investment decision and
does not desire any further information.
(d) Global understands that the Shares are being offered and sold to it
in reliance on specific exemptions from or non-application of the registration
requirements of federal and state securities laws and that the Company is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments, and understandings of Global set forth herein in
order to determine the applicability of such exemptions or non-applications and
the suitability of Global to acquire the Shares.
(e) Global is aware that the Shares have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act pursuant
to Section 4(2) and Regulation D thereof, and that they must be held by Global
for an indeterminate period, and Global must therefore bear the economic risk of
such investment indefinitely, unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from registration.
(f) Each instrument representing the Shares may be endorsed with the
following legends:
(i) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
(ii) Any other legend required by California or other state
securities laws.
The Company need not register a transfer of legended Shares and may
instruct its transfer agent not to register the transfer of the Shares unless
one of the conditions specified in the foregoing legends is satisfied.
(g) Any legend endorsed on an instrument pursuant to Section 4(f) hereof
and the stop transfer instructions with respect to such Shares shall be removed,
and the Company shall issue an instrument without such legend to the holder of
such Shares if such Shares are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder provides the Company with an opinion of counsel for
such holder of the Shares, reasonably satisfactory to the Company, to the effect
that a sale, transfer or assignment of such Shares may be made without
registration.
(h) Global is acquiring the Shares for Global's own account, for
investment, and without any present intention to engage in a distribution
thereof.
(i) Global has the knowledge and experience in financial and business
matters to evaluate the merits and risks of the proposed investment.
(j) Global is an "Accredited Investor" as that term is defined under Rule
501 adopted pursuant to the Securities Act. "Accredited Investors" are defined
in Rule 501 to include among others: (i) various specified institutional
investors (such as banks, savings and loan associations, licensed brokers or
dealers, insurance companies, investment companies, small business investment
companies, employee benefit plans having assets in excess of $5,000,000, and
self-directed plans having investment decisions made solely by persons that are
Accredited Investors); (ii) any entity with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities
offered; (iii) any person who had individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level this year; (iv) any person whose individual net
worth (or joint net worth with the person's spouse) at the time of purchase
exceeds $1,000,000; (v) directors and executive officers of the Company; (vi)
trusts with total assets in excess of $5,000,000 not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
sophisticated person prescribed in Rule 506(b)(2)(ii); and (vii) any entity in
which all the equity owners are deemed accredited.
6. Conditions Precedent to Global's Obligations. The obligations of Global
hereunder are subject to the performance by the Company of its obligations
hereunder and to the satisfaction of the following additional conditions
precedent on or before the Closing Date:
(a) The representations and warranties made by the Company in this
Agreement shall, unless waived by Global, be true and correct as of the date
hereof and as of the Closing, with the same force and effect as if they had been
made on and as of the Closing;
(b) After the date hereof and until the Closing Date, there shall not
have occurred:
(i) any change, or any development involving a prospective change,
in either the condition, financial or otherwise, or in the earnings, business or
operations, or in or affecting the properties of the Company [or the financial
or market conditions or circumstances in the United States, in either case
which, in Global's judgment, is material and adverse and makes it impractical or
inadvisable to proceed with the offering, sale, or delivery of the Shares];
(ii) an imposition of a new legal or regulatory restriction notin
effect on the date hereof, or any change in the interpretation of existing legal
or regulatory restrictions, that materially and adversely affects the offering,
sale, or delivery of the Shares;
(c) Vacu-dry shall have entered into a Co-Sale Agreement with Global
in the form of Exhibit A hereto.
(d) Vacu-dry shall have agreed to contribute as capital to the Company
without additional consider cash up to approximately $2,700,000 (depending upon
the final outcome of negotiations with Made In Nature's creditors) and common
stock warrants necessary to consummate the transactions provided for in the
Asset Purchase Agreement.
7. Conditions Precedent to the Company's Obligations. The obligations of
the Company under this Agreement are subject to the performance by Global of its
obligations hereunder and to the satisfaction of the following additional
conditions precedent on or before the Closing:
(a) The representations and warranties made by Global in this Agreement
shall, unless waived by the Company, be true and correct at the Closing, with
the same force and effect as if they had been made on, and as of, the Closing;
(b) Global shall have canceled all obligations of Made in Nature and
Xxxxxx X. Xxxxxxx pursuant to the Loan Agreements and shall have released all
security interests granted and held pursuant thereto in form and substance
satisfactory to the Company.
8. Affirmative Covenants. The Company covenants and agrees as follows:
(a) Books of Account. The Company will keep books of record and account
in which full, true and correct entries are made of all of its and their
respective dealings, business and affairs in accordance with generally accepted
accounting principles. The Company will employ certified public accountants
selected by the Board of Directors of the Company who are "independent" within
the meaning of the accounting regulations of the Securities and Exchange
Commission and have annual audits made by such independent public accountants in
the course of which such accountants shall make such examinations, in accordance
with generally accepted auditing standards.
(b) Furnishing of Financial Statements and Information. The Company will
deliver to Global:
(i) as soon as practicable, but in any event within
90 days after the end of each fiscal year, a consolidated
balance sheet of the Company and its Subsidiaries, as of the
end of such fiscal year, together with the related
consolidated statements of operations, shareholders' equity
and cash flow for such fiscal year, setting forth in
comparative form figures for the previous fiscal year, all in
reasonable detail and duly certified by the Company's
independent public accountants, which accountants shall have
given the Company an opinion, unqualified as to the scope of
the audit, regarding such statements;
(ii) with reasonable promptness, such other
financial data relating to the business, affairs and financial
condition of the Company and any Subsidiaries as is available
to the Company and as from time to time Global may reasonably
request; and
(iii) at least 20 days prior to the earlier of (i)
the execution of any agreement relating to any merger or
consolidation of the Company with another corporation, or a
plan of exchange involving the outstanding capital stock of
the Company, or the sale, transfer or other disposition of all
or substantially all of the property, assets or business of
the Company to another corporation, or (ii) the holding of any
meeting of the shareholders of the Company for the purpose of
approving such action, written notice of the terms and
conditions of such proposed merger, consolidation, plan of
exchange, sale, transfer or other disposition.
(c) Inspection. The Company will permit Global and any of its officers or
employees, or any outside representatives designated by Global and reasonably
satisfactory to the Company, to visit and inspect at Global's expense any of the
properties of the Company, including its books and records (and to make
photocopies thereof or make extracts therefrom), and to discuss its affairs,
finances, and accounts with their officers, lawyers and accountants, except with
respect to trade secrets and similar confidential information, all to such
reasonable extent and at such reasonable times and intervals as Global may
reasonably request. Except as otherwise required by laws or regulations
applicable to Global, Global shall maintain, and shall require its
representatives to maintain, all information obtained pursuant to Section 8
hereof on a confidential basis.
(d) Election of Director. Vacu-dry and the Company covenant, so long as
Global and its affiliates shall own at least 10,000 shares of Common Stock, to
cause Xx. Xxxxxxxxx Xxxxxxxxx to be elected a director of the Company.
(e) Right of Participation. The Company hereby grants to Global the right
of participation to purchase, pro rata, all or any part of New Securities (as
defined in Section 8(e)(i) which the Company may, from time to time, propose to
sell and issue. A pro rata share, for purposes of this right of participation,
is the quotient obtained by dividing the aggregate number of shares of Common
Stock held by the Global by the sum of (x) the total number of outstanding
shares of Common Stock plus (y) the total number of shares of Common Stock
issuable upon conversion of all outstanding capital stock convertible into
Common Stock or upon the exercise of all options and warrants to purchase the
Company's Common Stock.
(i) Except as set forth below, "New Securities"
shall mean any shares of capital stock of the Company,
including Common Stock and preferred stock, whether now
authorized or not, and rights, options or warrants to purchase
said shares of capital stock and securities of any type
whatsoever that are, or may become, convertible into said
shares of capital stock. Notwithstanding the foregoing, "New
Securities" does not include (i) securities offered to the
public generally pursuant to an underwritten registration
statement under the Securities Act, (ii) securities issued
pursuant to the acquisition of another corporation by the
Company by merger, purchase of substantially all of the
assets, or other reorganization whereby the Company or its
shareholders own not less than fifty-one percent (51%) of the
voting power of the surviving or successor corporation, (iii)
shares of the Company's Common Stock or options exercisable
for the purchase of Common Stock issued to employees, officers
and directors of, and consultants and franchisees to the
Company pursuant to any incentive program approved by the
Board of Directors of the Company, or (iv) stock issued in
connection with any stock split, stock dividend or
recapitalization by the Company.
(ii) In the event that the Company proposes to
undertake an issuance of New Securities, it shall first make
an offering of such new securities to Global by giving Global
written notice of its intention, describing the type of New
Securities, and the price and terms upon which the Company
proposes to issue the same. The Global shall have fifteen (15)
business days from the date of receipt of any such notice to
agree to purchase up to its pro rata share of such New
Securities for the price and upon the terms specified in the
notice by giving written notice to the Company and stating
therein the quantity of New Securities to be purchased. If
Global does not elect to purchase the New Securities as
provided herein, the Company shall have sixty (60) days
thereafter to sell or enter into an agreement (pursuant to
which the sale of New Securities covered thereby shall be
closed, if at all, within thirty (30) days from the date of
said agreement) to sell the New Securities not elected to be
purchased by Global at the price and upon terms no more
favorable than specified in the Company's notice. In the event
the Company has not sold the New Securities or entered into an
agreement to sell the New Securities within said sixty (60)
day period (or sold and issued New Securities in accordance
with the foregoing within thirty (30) days from the date of
said agreement), the Company shall not thereafter issue or
sell any New Securities without first offering such securities
in the manner provided above.
(iii) The right of participation hereunder is not
assignable, in whole or in part, except (A) from Global to an
entity controlling, controlled by, or under common control
with Global and (B) from Global to a transferee of the Shares
so long as such transferee acquires not less than 10,000
shares of Common Stock (appropriately adjusted for any stock
split, stock dividend or similar capital reorganization).
(f) Termination. The obligations of the Company and Vacu-dry pursuant to
this Section 8 shall terminate on the earlier of (i) the date of closing of an
initial underwritten public offering by the Company of its Common Stock pursuant
to an effective registration statement, (ii) a sale of all or substantially all
of the assets of the Company, (iii) a sale of all or substantially all of the
outstanding common stock of the Company, or (iv) a merger of the Company
following which the shareholders of the Company own together with their
affiliates less than 50% of the voting stock of the survivor.
9. Put and Call Rights.
(a) Grant of Put. Subject to the terms hereof, the Company hereby
irrevocably grants and issues to Global the right and option to sell to the
Company (hereinafter referred to as the "Put") all or any portion of the Shares
at a purchase price equal to the fair market value of such shares as hereinafter
determined (the "Purchase Price"). Subject to the provisions of Sections 9(e)
below, Global may exercise the Put and sell to the Company, and the Company
agrees to purchase from Global, all or any portion of the Shares. Global's right
to exercise the Put shall commence on July 1, 2001. Global shall have thirty
(30) days from commencement of the exercise period in which to exercise the Put
by notice to the Company specifying the number of Shares as to which the Put is
exercised.
(b) Grant of Call. Subject to the terms hereof, Global irrevocably
grants and issues to Global the right and option to purchase from Global
(hereinafter referred to as the "Call") all or any portion of the Shares at a
purchase price equal to the fair market value of such shares as hereinafter
determined (the "Purchase Price"). Subject to the provisions of Section 9(e)
below, the Company may exercise the Call and purchase from Global, and Global
agrees to sell to the Company, all or any portion of the Shares. The Company's
right to exercise the Call shall commence on July 1, 2001. The Company shall
have thirty (30) days from the commencement of the exercise period in which to
exercise the Call by notice to Global specifying the number of Shares as to
which the Call is exercised.
(c) Determination of Fair Market Value. The fair market value of the
Shares shall be determined by appraisal pursuant to the process described
herein. Upon the providing of a notice of Put or a notice of Call, the Shares
shall be appraised by a mutually agreed upon appraiser. If the parties cannot
agree upon a single appraiser within seven (7) days following the date of
delivery of a notice of Put or a notice of Call, the Shares shall be appraised
by two appraisers, one appointed by each party. Each party shall have twenty-one
(21) days following the date of the delivery of the notice of Put or notice of
Call to select its appraiser. Each appraiser shall be fully qualified to
appraise the ownership interests in privately held companies and shall be
independent of the appointing party. Each appraiser shall be instructed: (i) to
appraise the Shares as if they were to be sold to a single purchaser for their
fair market value in a transaction where a willing seller sells and a willing
buyer purchases, each acting without duress or urgency; (ii) not to apply a
discount for lack of marketability; and (iii) to complete such appraisal no
later than thirty (30) days following such appraiser's appointment. If the
difference between the values of the two appraisals does not exceed fifteen
percent (15%) of the value determined by the higher appraisal, the average of
the two appraisals shall establish the fair market value of the Shares. If the
difference between the values of the two appraisals exceeds fifteen percent
(15%) of the value determined by the higher appraisal, a third appraiser shall
be selected by the two appraisers within fourteen (14) days following completion
of the last of the two appraisals, and such third appraiser shall review and
enhance the work and conclusions of the initial two appraisers, and based on
such review and enhancement, issue a determination as to the fair market value
of the Shares within thirty (30) days thereafter, which determination shall
state a value neither higher than the higher nor lower than the lower of the two
previously issued values of the Shares and shall establish the fair market value
for the Shares. Copies of all final appraisals of all appraisers shall be
delivered to each party immediately after their completion. The cost of each
party's appraiser shall be borne by such party and the cost of the third
appraiser, if any, shall be borne by the parties equally.
(d) Payment and Delivery of Shares.
(i) Subject to Section 9(c)(ii) below, the Company
shall, within twenty days of the determination of the Purchase Price as
provided in Section 9(c) above, pay to Global the Purchase Price as
follows: (A) if the Purchase Price is to be paid pursuant to an
exercise of the Call provided in Section 9(b), in a single lump sum
payment in cash; or (B) if the Purchase Price is to be paid pursuant to
an exercise of the Put provided for in Section 9(a), at the Company's
sole option, in either of the following ways: (z) a single lump sum
payment in cash; or (y) an initial payment of twenty percent (20%) of
the Purchase Price, with the principal balance to be paid, at the
Company's option, in four (4) equal installments on the four succeeding
anniversary dates of the Exercise Date. If the Company selects the
installment form of payment, the unpaid balance shall bear simple
interest on the balance at the rate equal to the Prime Rate as
published in The Wall Street Journal. Such rate, at the option of the
Company exercisable at the time the Company elects the installment form
of payment, shall be fixed as of such date or shall change from time to
time. The Company may prepay any portion of the unpaid balance without
penalty. Such payments shall be made in exchange for the delivery, upon
payment of the initial payment, to the Company of a stock certificate
or certificates representing the total number of Shares being put and
purchased duly endorsed in blank by Global or having attached thereto a
stock power duly executed by Global in proper form for transfer. Any
unpaid amounts shall become immediately due and payable on the earlier
of (i) the date of closing of an initial underwritten public offering
by the Company of its Common Stock pursuant to an effective
registration statement, (ii) a sale of all or substantially all of the
assets of the Company, (iii) a sale of all or substantially all of the
outstanding common stock of the Company, or (iv) a merger of the
Company following which the shareholders of the Company together with
their affiliates own less than 50% of the voting stock of the survivor
(ii) In the event that any payment to be made by the
Company is prohibited by applicable provisions of California
Corporations Code Section 500 et seq. or by any other applicable law,
then such payment shall be immediately made by the Company at the next
earliest time together with simple interest on the balance at the rate
equal to the Prime Rate as published in The Wall Street Journal plus
2%, and to the extent possible, when compliance with said law may be
effected, and the Company agrees that it will execute all such
documents and take all such other steps as may be necessary to expedite
and effectuate to the extent possible such compliance.
(e) Termination. The Put and Call shall terminate, whether or not either
has then become exercisable, on the earlier of (i) the date of closing of an
initial underwritten public offering by the Company of its Common Stock pursuant
to an effective registration statement, (ii) a sale of all or substantially all
of the assets of the Company, (iii) a sale of all or substantially all of the
outstanding common stock of the Company, or (iv) a merger of the Company
following which the shareholders of the Company together with their affiliates
own less than 50% of the voting stock of the survivor.
10. Right of First Refusal. Each time Global proposes to transfer, assign,
convey, sell, encumber or in any way alienate all or any part of its Shares (or
is required by operation of law or other involuntary transfer to do so) Global
shall first offer such Shares to the Company. Global shall deliver a written
notice to the Company stating (i) Global's bona fide intention to transfer such
Shares, (ii) the name and address of the proposed transferee, (iii) the Shares
to be transferred, and (iv) the purchase price and terms of payment for which
Global proposes to transfer such Shares. Within thirty (30) days after receipt
of the notice, the Company shall have the first right to purchase or obtain such
Shares upon the price and terms of payment designated in such notice. If such
notice provides for the payment of non-cash consideration, the Company may elect
to pay the consideration in cash equal to the good faith estimate of the present
fair market value of the noncash consideration offered as determined by the
Company. If the Company elects not to purchase or obtain all of the Shares
designated in such notice, then Global may transfer the remainder of the Shares
described in the notice to the proposed transferee, providing such transfer (i)
is completed within thirty (30) days after the expiration of the Company's right
to purchase such Shares, and (ii) is made on terms no less favorable to Global
than as designated in the notice. If such Shares are not so transferred, Global
must give notice in accordance with this Section prior to any other or
subsequent transfer of such Shares. The right of first refusal provided herein
shall terminate, whether or not it has then become exercisable, on the earlier
of (i) the date of closing of an initial underwritten public offering by the
Company of its Common Stock pursuant to an effective registration statement,
(ii) a sale of all or substantially all of the assets of the Company, (iii) a
sale of all or substantially all of the outstanding common stock of the Company,
or (iv) a merger of the Company following which the shareholders of the Company
together with their affiliates own less than 50% of the voting stock of the
survivor. Notwithstanding the foregoing, Global may transfer some or all of its
Shares to its affiliates or to members of the Takanashi family without such
transfers being subject to the right of first refusal provided herein, provided
that such transferees agree in writing to be bound by the provision of this
Agreement.
11. Fees and Expenses. Other than as stated in this Agreement, Global and
the Company agrees to pay their own expenses incident to the performance of
their obligations hereunder.
12. Survival of the Representations, Warranties, etc. The respective
agreements, representations, warranties, indemnities, and other statements made
by or on behalf of the Company and Global pursuant to this Agreement shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the other party to this Agreement or any officer, director, or
employee of, or person controlling or under common control with, such party, and
will survive delivery of any payment of the Shares.
13. Dispute Resolution.
(a) Arbitration. All disputes between the parties arising in connection
with this Agreement shall be finally settled under the Commercial Arbitration
Rules of the American Arbitration Association then in effect (as modified by
this section). The arbitration panel shall be composed of three arbitrators
appointed in accordance with this section. The arbitration shall be held in San
Francisco, California, and it shall be conducted in the English language. The
law governing the procedures and substance of the arbitration will be that of
the State of California. The arbitration proceedings and all documents and
testimony, written or oral, produced in connection therewith shall be kept
confidential. The arbitration panel may determine all questions of law and
jurisdiction (including questions as to whether the dispute is arbitrable) and
has the right to grant legal and equitable relief (including injunctive and
other interim relief and the right to grant permanent and interim injunctive
relief), and shall apportion all costs between Licensee and Licensor taking into
consideration, among other factors, the percentage of the total amount in
dispute that is represented by the amount of claims asserted by a party but
rejected by the arbitrators, including reasonable legal fees, interest and costs
of the arbitration, provided that nothing herein shall prevent the parties
hereto from seeking interim injunctive relief in a court of competent
jurisdiction pending resolution of the dispute in accordance with this section.
The arbitrators may not amend or otherwise alter the terms and conditions of
this Agreement.
(b) Selection of Arbitrators. The parties shall have fifteen (15) days
to agree upon the qualifications of the arbitrators (the "Qualifications")
commencing on the day on which notice is given by the party initiating the
arbitration. Upon the expiration of the fifteen day period and regardless of an
agreement being reached as to the Qualifications, either or both of the parties
shall apply to any court having jurisdiction over the parties or their assets in
accordance with Section 15(c) to appoint the three arbitrators. The court shall
appoint the arbitrators within 30 days after such request (on the basis of the
Qualifications if agreed but otherwise in its discretion) and shall notify the
parties of the appointment.
(c) Award Binding. The arbitral award shall state the reasons for the
award, and the relief granted shall be final and binding on the parties to the
arbitration. Any award rendered may be confirmed; judgment upon any award
rendered may be entered; such award or the judgment thereon may be enforced; and
any interim or supplemental relief may be sought in any court having
jurisdiction over the parties or their assets in accordance with Section 15(a)
hereof. Any monetary award shall be payable in U.S. dollars, free of any tax or
any other deduction, other than taxes in the nature of income taxes imposed by
the country, province or political subdivision in which the recipient is
organized or is otherwise subject to such taxes. Such award shall bear interest
from the date of the award at a variable rate equal to the rate publicly
announced from time to time by Xxxxx Fargo Bank, N.A. at its principal office in
San Francisco, California as its "prime rate".
(d) Discovery. The parties shall make available to the arbitrators all
information requested by them in accordance with the applicable rules of
arbitration, including production of all relevant records and documents. All
notices and other communications required to be delivered pursuant to the
applicable rules of arbitration shall be delivered to the address specified in
this Agreement.
(e) Certain Disputes. In the event that the parties disagree as to
whether any issue or issues are to be submitted to arbitration under the terms
of this Agreement or either party asserts that the other is refusing to
arbitrate either overtly or by delay, the parties agree that any such action,
lawsuit or proceeding over such dispute or assertion shall be brought in
accordance within the provisions of Section 15(a) hereof.
(f) Attorneys' Fees. If any party hereto must institute arbitration to
collect any payments due hereunder, the party liable therefor shall reimburse
the other party for reasonable attorneys' fees and other costs incurred in
connection with such arbitration.
14. Notices. Any notice to any party hereto given pursuant to this
Agreement shall be in writing addressed as follows:
if to Global Walk, Inc. Global Walk, Inc.
c/o Takanashi Milk Products Co., Ltd.
Nisseki Yokahama Bl.8F
0-0-0 Xxxxxxxx-xxx Xxxx-xx
Xxxxxxxx-xxx 000, Xxxxx
Attention: Nobuyoshi Takanashi
Telecopier: (011)(00) 0 0000-0000
with a copy to: Xxxxxxx, Xxxxx & Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 000000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
if to the Company or Vacu-dry: Vacu-dry Company
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxx, President
Telecopier: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxxx
Xxx Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
Any such address may be changed by any party by written notice to the other
party. Any notice shall be deemed delivered (i) if transmitted by electronic
facsimile transmission, when the appropriate number and answerback are
transmitted, (ii) if delivered personally, when received, or (iii) if mailed by
registered or certified mail, postage prepaid, return receipt requested, when
received.
15. Miscellaneous
(a) This Agreement may be executed in one or more
counterparts and it is not necessary that signature of all parties appear on
the same counterpart, but such counterparts together shall constitute one and
the same agreement.
(b) This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors, and no other
person shall have any right or obligation hereunder.
(c) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California. The parties hereby
irrevocably attorn to the exclusive jurisdiction of the courts of the State of
California in respect of the subject matter of this Agreement and irrevocably
agree to be bound by any judgment rendered thereby in connection with this
Agreement, subject in each case to all rights to appeal such decisions to the
extent available to such parties. Each party waives personal service of process
and consents that service of process upon it may be made by delivery in
accordance with the provisions of this Agreement. Nothing shall affect the right
to serve process in any other manner permitted by applicable law.
(d) The headings of the sections of this document have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
IN WITNESS HEREOF, the parties have duly executed and delivered this
Agreement, all as of the day and year first above written.
COMPANY:
MIN ACQUISITION CORP.
By: /s/ Xxxx X. Xxxx
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Its: President
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By: /s/ Xxxxx X. Xxxxx
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Its: Assistant Secretary
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GLOBAL WALK, INC.
By: /s/ Nobuyoshi Takanashi
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Its: President
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By:
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Its:
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VACU-DRY COMPANY
By: /s/ Xxxx X. Xxxx
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Its: President
--------------------------------------------
