EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXXX NURSERIES, INC.,
KW MOHAWK VALLEY LLC,
000 XXXX XXXXX XXX,
XXXXXXXX XX LLC,
KW UTICA LLC,
KW NEWARK LLC AND
KW DANVILLE LLC
DATED AS OF
JANUARY 9, 2007
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made and
entered into as of January 9, 2007 (the "EFFECTIVE DATE"), by and among Xxxxx
Nurseries, Inc., a California corporation ("SELLER"), and KW Mohawk Valley LLC
("MOHAWK"), 000 Xxxx Xxxxx XXX ("000"), Xxxxxxxx XX LLC ("PA"), KW Utica LLC
("UTICA"), KW Newark LLC ("NEWARK") and KW Danville LLC ("DANVILLE"), each a New
York limited liability company. Mohawk, 621, PA, Utica, Newark and Danville are
collectively referred to herein as "BUYER."
RECITALS
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A. Seller owns certain real property located in the Village of
Newark, County of Xxxxx, State of New York, and more particularly described in
EXHIBIT A attached hereto and incorporated herein by this reference (the "NEWARK
PROPERTY").
B. Seller owns certain real property located in the City of
Utica, County of Oneida, State of New York, and more particularly described in
EXHIBIT B attached hereto and incorporated herein by this reference (the "UTICA
PROPERTY," and together with the Newark Property, the "FEE PROPERTIES").
C. Seller is currently a hold over tenant under that certain
Lease Agreement (the "PRIOR LEASE") dated May 6, 1981, as amended with PPL
Generation, LLC, as landlord ("PPL"), for the premises located in Danville,
Pennsylvania and more particularly described in the Prior Lease (the "LEASED
PROPERTY," and collectively with the Fee Properties, the "PROPERTY").
D. Subject to the terms and conditions set forth in this
Agreement, Buyer desires to purchase from Seller, and Seller desires to sell,
assign, transfer and deliver to Buyer, all of Seller's right, title and interest
in and to (i) the Newark Property; (ii) the Utica Property; and (iii) the
potting machinery, office furnishings and equipment, inventory, racks, other
assets and greenhouses, as further described below.
NOW, THEREFORE, in consideration of the mutual promises set
forth herein and intending to be bound hereby, the parties hereby agree as
follows:
AGREEMENT
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1. PURCHASE AND SALE OF ASSETS AT THE CLOSING.
1.1 PURCHASED ASSETS. Subject to the terms and conditions set
forth in this Agreement, at the Closing (as defined herein), Buyer agrees to
purchase from Seller, and Seller agrees to sell, assign, transfer and deliver to
Buyer all of Seller's right, title and interest in and to (i) the potting
machinery, office furnishings and office equipment, inventory, racks, other
assets and greenhouses described below and listed on Schedules 1.1(a), 1.1(b),
1.1(c), 1.1(d), 1.1(e) and 1.1(f) hereto (collectively, the "OPERATING ASSETS")
as follows: (A) those Operating Assets located at the Newark Property shall be
purchased by Newark; (B) those Operating Assets located at the Utica Property
shall be purchased by Utica; and (C) those Operating Assets located at the
Leased Property shall be purchased by Danville; (ii) the Newark Property, which
shall be purchased by 621; and (iii) the Utica Property, which shall be
purchased by Mohawk. The Operating Assets and the Fee Properties shall be
collectively referred to herein as the "PURCHASED ASSETS."
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(a) POTTING MACHINERY. The potting machinery listed
and described on SCHEDULE 1.1(A) (the "POTTING Machinery").
(b) OFFICE FURNISHINGS AND OFFICE EQUIPMENT. The
office furnishings and office equipment listed and described on SCHEDULE 1.1(B)
(the "OFFICE EQUIPMENT").
(c) INVENTORY. Subject to the next sentence, all
inventory items and related materials and supplies (each an "INVENTORY ITEM")
listed and described on SCHEDULE 1.1(C) and located on the Property at the
Closing (the "INVENTORY"). Buyer acknowledges that Inventory Items and other
products may be sold by Seller for Seller's benefit in the ordinary course of
Seller's business up to and through the close of business on the Closing Date
(defined below) and that neither such items which have been sold up to and
through the close of business on the Closing Date nor the resulting accounts
receivable are being sold to Buyer hereunder. For purposes of this Agreement,
the terms "Inventory" and "Purchased Assets" shall not include any Inventory
Items or other products sold by Seller in the ordinary course of Seller's
business up to and through the close of business on the Closing Date.
(d) RACKS. The racks listed and described on SCHEDULE
1.1(D) (the "INITIAL RACKS").
(e) OTHER ASSETS. All other assets listed and
described on SCHEDULE 1.1(E) (the "OTHER ASSETS").
(f) GREENHOUSES. The greenhouses located on the
Leased Property and listed and described on SCHEDULE 1.1(F) (the "GREENHOUSES").
1.2 EXCLUDED ASSETS. Seller shall not sell, assign, transfer
or convey to Buyer, and Buyer shall not purchase from Seller, any inventory,
property, item or asset of Seller other than those described or listed in
Section 1.1 and described or listed on Schedules 1.1(a), 1.1(b), 1.1(c), 1.1(d),
1.1(e) and 1.1(f), including, without limitation, any accounts receivable of
Seller (the "EXCLUDED ASSETS").
1.3 ASSUMED LIABILITIES.
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(a) Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall assign (to the extent assignable) all of
its rights, and Buyer shall assume and agree to pay, perform or otherwise
discharge as the same shall become due in accordance with their respective
terms, all liabilities and obligations of Seller arising from or relating to the
contracts, agreements and unfulfilled purchase orders listed on SCHEDULE 1.3 to
the extent such liabilities and obligations arise on or after the Closing Date
(the "ASSUMED LIABILITIES"); and
(b) Except for the Assumed Liabilities, Buyer shall
not assume any liabilities or obligations of Seller.
1.4 CONSENTS TO ASSIGNMENTS; Notwithstanding anything in this
Agreement, the Assignment and Assumption Agreement (as defined below) or any
xxxx of sale to the contrary, to the extent that any of the Assumed Liabilities
is not capable of being sold, assigned, transferred or conveyed without the
approval, consent or waiver of the other party thereto, or any third person, or
if such sale, assignment transfer or conveyance or attempted assignment,
transfer or conveyance would constitute a breach thereof or a violation of any
law, decree, order, regulation or other governmental edict, neither this
Agreement nor the Assignment and Assumption Agreement nor any xxxx of sale shall
constitute a sale, assignment, transfer or conveyance thereof, or an attempted
assignment, transfer or conveyance thereof. After the Closing, until any Assumed
Liability has been validly and effectively assigned to Buyer, Seller shall hold
such Assumed Liability for the benefit of Buyer and Buyer shall be entitled to
receive all benefits under such Assumed Liability (the "Interests") and Buyer
shall be solely and unconditionally responsible for all liabilities and
obligations arising in connection with or related to such Interests and pay,
perform and otherwise discharge the same as they will become due to the extent
such liabilities or obligations arise on or after the Closing Date.
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2. PURCHASE PRICE; PAYMENT TERMS.
2.1 PURCHASE PRICE. The aggregate purchase price (the
"PURCHASE PRICE") shall be an amount equal to the sum of:
(a) Land, Greenhouses, Potting Machinery and Office Equipment,
Furniture
Danville
Buildings, Greenhouses and Other Improvements to
Real Property $ 1,837,428
Potting Machinery and Office Equipment $ 210,870
Furniture $ 14,405
Newark
Land $ 100,000
Buildings, Greenhouses and Other Improvements to
Real Property $ 708,890
Potting Machinery and Office Equipment $ 129,300
Furniture $ 1,810
Utica
Land $ 100,000
Buildings, Greenhouses and Other Improvements to
Real Property $ 1,406,807
Potting Machinery and Office Equipment $ 180,900
Furniture $ 8,293
Subtotal $ 4,698,703
(b) Plus the following
Initial Racks $ 557,750
Other Assets $ 300,000
Closing Inventory Value (as defined below) $ 1,193,427
Less Credit for Leighow Contract $ (41,412)
Subtotal $ 2,009,765
Total $ 6,708,468
2.2 DEPOSIT. On the Effective Date, Buyer shall deposit by
cashier's check or wire transfer of immediately available federal funds into the
Escrow provided for in Section 3 the sum of Two Hundred Twenty Five Thousand and
00/100 Dollars ($225,000.00) (the "DEPOSIT"). Escrow Holder (as defined below)
shall, without any requirement for further instructions, immediately release the
Deposit to Seller, which funds shall become non-refundable in all instances
other than a termination of this Agreement due to Seller's default hereunder.
The Deposit will be credited against the Purchase Price. If requested by Buyer,
prior to any disbursement to Seller hereunder, the Deposit shall be deposited by
Escrow Holder into an interest-bearing account selected by Buyer. The interest
earned on the Deposit prior to disbursement of the Deposit to Seller shall, at
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the time of Closing, be paid to Seller and credited against the Purchase Price
or, in the event that this Agreement is terminated, the interest on the Deposit
shall be paid to Buyer, unless such termination is a result of Buyer's default
under the terms hereof in which case the interest on the Deposit shall be
released to Seller. Buyer shall not be entitled to any interest on the Deposit
from and after its disbursement hereunder to Seller. In addition to all of
Seller's rights and remedies under this Agreement and applicable law, Seller
shall have the right to terminate this Agreement if for any reason Buyer shall
fail to make the Deposit required to be made by Buyer when due hereunder.
2.3 PAYMENT OF PURCHASE PRICE. At the Closing, Buyer shall pay
the Purchase Price less the Deposit released to Seller pursuant to Section 2.2
above into Escrow (as defined below) by wire transfer in immediately available
funds.
2.4 SALES, USE AND TRANSFER TAXES. Buyer and Seller agree that
any and all excise, deed, documentary, stamp or transfer tax and similar
conveyance taxes or charges payable in connection with the transfer of the Fee
Properties shall be paid by Seller (expressly excluding any mortgage taxes).
Except as provided in the preceding sentence, Buyer shall be responsible for any
sales, use or other taxes, duties, fees and governmental exactions imposed by
any reason on the transfer of the Purchased Assets provided for hereunder and
any deficiency, interest or penalty asserted with respect thereto.
Notwithstanding the preceding sentence, Buyer shall not be responsible for any
income, capital gain or other similar tax incurred by Seller in connection with
the transfer of the Purchased Assets to Buyer.
2.5 PAYMENT OF COSTS AND EXPENSES. Except as provided herein,
all fees and costs of the Escrow Holder in connection with the sale of the
Purchased Assets shall be paid by Buyer. Buyer shall pay at the Closing all
costs associated with recording the Deeds (defined below), any mortgages Buyer
places on the Property and any taxes associated with such mortgages and any
other document which Buyer chooses to record. Buyer shall also pay at the
Closing all premiums for the Owner's Title Policies (as defined below) and the
cost of any surveys prepared in connection herewith. Each party shall bear the
costs of its agents, attorneys, accountants, investment bankers, travel, lodging
and entertainment and associated expenses.
2.6 PRORATIONS OF TAXES AND EXPENSES. All real estate taxes,
charges and assessments affecting the Fee Properties ("PROPERTY TAXES") and all
charges for water, electricity, sewer, gas, telephone and all other utilities
("OPERATING EXPENSES"), shall be prorated on a per diem basis as of 12:01 a.m.
on the Closing Date. If any Property Taxes have not been finally assessed as of
the Closing Date for the current fiscal year of the taxing authority, then the
same shall be adjusted at the Closing based upon the most recently issued bills
therefore, and shall be re-adjusted when and if final bills are issued. If any
bills for Operating Expenses for periods prior to the Closing are not then
available, then the parties shall make a reasonable estimate thereof for
purposes of adjustments at the Closing, with such amounts to be re-adjusted
between the parties within thirty (30) days of receipt of said bills.
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2.7 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated in relation to the Purchased Assets, as set forth in Section 2.1
hereto. Each party agrees that it will not, in its tax returns or elsewhere,
take a position inconsistent with the allocations provided for in this Section.
2.8 CLOSING INVENTORY; POST-CLOSING INVENTORY ADJUSTMENT. No
later than three (3) days prior to the Closing but no earlier than five (5) days
prior to the Closing, Seller and Buyer shall conduct a physical inventory count
(the "CLOSING INVENTORY") of the Inventory Items located on the Property for the
purpose of determining the value of the Inventory (the "CLOSING INVENTORY
VALUE"). The Closing Inventory Value shall be an amount equal to the sum of the
products of (x) the quantity of each Inventory Item on hand during the Closing
Inventory, multiplied by (y) the price for each such Inventory Item listed on
SCHEDULE 1.1(C),which amount shall be included in the Purchase Price as
contemplated by Section 2.1 above. Promptly after the Closing, Seller shall
provide Buyer a summary, including copies of related invoices and shipping
documents, setting forth the aggregate effect, calculated on a basis consistent
with the Closing Inventory Value, of any changes in the Inventory between the
Closing Inventory and the Closing (the "INVENTORY ADJUSTMENT"). If the Inventory
Adjustment is a negative number, Seller shall promptly pay the Inventory
Adjustment to Buyer. If the Inventory Adjustment is a positive number, Buyer
shall promptly pay the Inventory Adjustment to Seller.
2.9 LEASE. Seller and Buyer acknowledge that Buyer has or will
directly enter into a Lease with PPL for the Leased Property (the "LEASE").
3. CLOSING.
3.1 CLOSING. Within one (1) business day after the execution
of this Agreement (the "OPENING OF ESCROW") an escrow ("ESCROW") shall be opened
with Decision 2000 Real Estate Services, Inc., 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000 Attention: Xxxxxxxx Xxxxxxx ("ESCROW HOLDER") for the consummation of the
purchase and sale transaction contemplated herein by delivery of a fully
executed copy of this Agreement and an escrow agreement ("ESCROW AGREEMENT"). As
used herein, "CLOSING" shall mean and refer to the date Escrow Holder disburses
the funds pursuant to Section 3.4 below. The Closing shall occur on or before
January 10, 2007 (the "CLOSING DATE"). Except as otherwise provided in this
Agreement, all proceedings to be taken and all documents to be executed at the
Closing shall be deemed to have been taken, delivered or executed
simultaneously, and no action or proceeding shall be deemed taken nor documents
deemed executed or delivered until all have been taken, executed and delivered.
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3.2 DELIVERIES OF SELLER. At least one (1) day prior to the
Closing Date, Seller shall deliver or cause to be delivered to Escrow Holder:
(a) a duly executed and acknowledged Bargain and Sale
Deed in favor of Buyer, conveying all of Seller's right, title and interest in
and to the Newark Property in the form of EXHIBIT C attached hereto (the "NEWARK
Deed");
(b) a duly executed and acknowledged Bargain and Sale
Deed in favor of Buyer, conveying all of Seller's right, title and interest in
and to the Utica Property in the form of EXHIBIT D attached hereto (the "UTICA
Deed"; collectively with the Newark Deed referred to herein as the "DEEDS");
(c) an Assignment and Assumption Agreement duly
executed by Seller in the form of EXHIBIT E attached hereto ("ASSIGNMENT AND
ASSUMPTION AGREEMENT")
(d) the Escrow Agreement duly executed by Seller;
(e) a certification of the "non-foreign" status of
Seller ("FIRPTA CERTIFICATE") in the form of EXHIBIT F attached hereto;
(f) a Xxxx of Sale duly executed by Seller in
substantially the form of EXHIBIT G attached hereto (the "XXXX OF SALE");
(g) a reconveyance terminating mortgagee's security
interest under that certain Open-End Leasehold Mortgage, Assignment of Rents,
Security Agreement and Fixture Filing dated January 21, 1998 and recorded in
Montour County Book 197 page 1072 on February 2, 1998 and any amendments
thereto;
(h) a copy, certified as of the Closing Date by an
authorized officer of Seller, of the resolutions of the Board of Directors of
Seller authorizing the execution, delivery and performance of this Agreement by
Seller;
(i) a certificate, dated the Closing Date, executed
by an authorized officer of Seller to the effect that (i) each of the
representations and warranties of Seller made herein is true and correct in all
material respects on the Closing Date as though such representations and
warranties were made on such date and (ii) Seller has performed and complied in
all material respects with all covenants, conditions and obligations under this
Agreement which are required to be performed or complied with by Seller on or
before the Closing Date; and
(j) such customary documents and certificates as
Escrow Holder and/or the Title Company shall require to consummate the
transaction contemplated by this Agreement.
3.3 DELIVERIES OF BUYER. At least one (1) day prior to the
Closing Date, Buyer shall deliver or cause to be delivered to Escrow Holder:
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(a) the Purchase Price;
(b) the Assignment and Assumption Agreement;
(c) the Escrow Agreement duly executed by Buyer;
(d) a Guaranty duly executed by Xxxx Xxxxx
Greenhouses, Inc. in the form attached hereto as EXHIBIT H;
(e) a copy, certified as of the Closing Date by the
secretary of each Buyer, of the resolutions of the Managing Member of each Buyer
authorizing the execution, delivery and performance of this Agreement by each
Buyer;
(f) a certificate, dated the Closing Date, executed
by an authorized officer of Buyer to the effect that (i) each of the
representations and warranties of Buyer made herein is true and correct in all
material respects on the Closing Date as though such representations and
warranties were made on such date and (ii) Buyer has performed and complied in
all material respects with all covenants, conditions and obligations under this
Agreement which are required to be performed or complied with by Buyer on or
before the Closing Date; and
(g) such customary documents and certificates as
Escrow Holder and/or the Title Company (defined below) shall require to
consummate the transactions contemplated by this Agreement.
3.4 FUNDS. Provided that all conditions to the Closing set
forth in Section 8 have been satisfied or, as to any condition not satisfied,
waived by the party intended to be benefited thereby, on or before the Closing
Date, Escrow Holder shall disburse all funds deposited with Escrow Holder by
Buyer in payment of the Purchase Price as follows: (a) deduct all items
chargeable to the account of Seller pursuant to the provisions of this
Agreement; (b) disburse the Purchase Price to Seller promptly upon the Closing;
and (c) disburse the remaining balance of the funds, if any, to Buyer promptly
upon the Closing.
3.5 RECORDING. Upon Escrow Holder's disbursement of funds
pursuant to Section 3.4 for the Closing, above, Escrow Holder shall cause the
Deeds (with documentary transfer tax information to be affixed after recording)
and any other documents which the parties hereto may mutually direct, to be
recorded with the recorders office for the counties where the Fee Properties are
located ("COUNTY CLERK") and Escrow Holder shall obtain conformed copies thereof
for distribution to Buyer and Seller.
3.6 BUYER'S TITLE INSURANCE POLICY. Upon completion of the
recording provided in Section 3.5, Escrow Holder shall issue the Owner's Title
Policies to Buyer.
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3.7 DELIVERY OF DOCUMENTS TO BUYER. Promptly following the
Closing, Escrow Holder shall deliver to Buyer: (a) conformed copies of the
recorded Deeds and any other recorded documents; (b) the original FIRPTA
Certificate; and (c) a copy of all other documents delivered to Escrow Holder in
connection with the transactions contemplated hereby.
3.8 DELIVERY OF DOCUMENTS TO SELLER. Promptly following the
Closing, Escrow Holder shall deliver to Seller: (a) conformed copies of the
recorded Deeds and any other recorded documents; and (b) a copy of all other
documents delivered to Escrow Holder in connection with the transactions
contemplated hereby.
4. TITLE AND SURVEY MATTERS.
4.1 RECEIPT. Buyer has been provided with title insurance
commitments covering the Fee Properties, together with complete copies of all
instruments referred to therein as exceptions to title (collectively, the "TITLE
COMMITMENTS") prepared by Chicago Title Insurance Company ("TITLE COMPANY") as
follows: (a) Title Commitment for the Newark Property dated November 29, 2006,
Order No. 06-Xxxxx-5657, and (b) Title Commitment for the Utica Property dated
November 21, 2006, Order No. 06-Oneida-5657.
Prior to the execution of this Agreement, Buyer has had an
opportunity to review and approve: (a) the Title Commitments and all supplements
thereto, and all exceptions to title referred to therein, (b) all additional
matters, if any, affecting title to the Property disclosed by Seller to Buyer in
writing, and (c) all matters which would be disclosed by ALTA surveys of the
Property prepared in accordance with the 2005 Minimum Detail Requirements for
ALTA/ACSM Land Title Surveys (collectively, "TITLE AND SURVEY MATTERS"). Buyer
has had the opportunity, at its sole cost and expense, to obtain surveys of the
Fee Properties and the Leased Property. In no event shall Buyer's obtaining of
such survey(s) be a condition precedent to Buyer's obligations hereunder. In the
event that Buyer obtains any survey(s), it shall promptly provide Seller with a
copy of such survey(s). By its execution of this Agreement, Buyer has hereby
approved all Title and Survey Matters and Buyer further acknowledges and agrees
that Buyer shall not have any right to terminate this Agreement regarding any of
the Title and Survey Matters; provided, however, Seller shall cause the
following exceptions to title to the Fee Properties to be removed prior to the
Closing (collectively, the "DISAPPROVED EXCEPTIONS"): (i) monetary encumbrances
on the Fee Properties caused by or at the direction of Seller but expressly
excluding (x) real property taxes and assessments constituting a lien not yet
due and payable and (y) liens and encumbrances caused or permitted to occur by
Buyer in connection with Buyer's entry upon and inspection of the Fee Properties
and/or the Leased Property; and (ii) any other exceptions caused by Seller after
the date hereof and not approved by Buyer as a Title and Survey Matter which in
the reasonable opinion of Buyer will have a material and adverse affect on the
use and/or operation of the Fee Properties.
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4.2 EXCEPTIONS TO TITLE. Buyer shall be obligated to accept
title to the Fee Properties subject only to the following exceptions to title
(collectively, the "PERMITTED EXCEPTIONS"): (a) real estate taxes and
assessments not then delinquent; (b) the lien of supplemental taxes assessed
with respect to matters occurring on or after the Closing Date; (c) the printed
exceptions which appear in the Owner's Title Policies issued by the Title
Company; (d) all Title and Survey Matters approved or deemed approved by Buyer
pursuant to this Agreement; and (e) any matters affecting the Fee Properties
which are created by or with the consent of Buyer, including, without
limitation, any matters relating to entitlements sought by Buyer prior to the
Closing. Conclusive evidence of the availability of such title shall be the
irrevocable commitment of the Title Company to issue to Buyer on the Closing
Date an ALTA policy of title insurance for each of the Fee Properties ("OWNER'S
TITLE POLICIES") in the amount of the Purchase Price allocated to the applicable
Fee Property in Section 2.1, respective, which Owner's Title Policies shall
reflect that title to the Newark Property and the Utica Property is vested of
record in Buyer, subject only to the Permitted Exceptions. In the event that
Buyer desires any endorsements to the Owner's Title Policies, Buyer shall
separately negotiate such endorsements with the Title Company and
notwithstanding anything else to the contrary herein, Buyer's obligations under
this Agreement shall not be conditioned or contingent on Buyer obtaining the
issuance of any such endorsements, and the Closing shall not be delayed for
Buyer's failure to obtain the issuance of any such endorsements.
5. BUYER'S DUE DILIGENCE.
5.1 DELIVERY AND AVAILABILITY OF DUE DILIGENCE MATERIALS.
Buyer acknowledges that it has received and is familiar with the contents
contained in the due diligence materials described on EXHIBIT I ("DUE DILIGENCE
MATERIALS").
5.2 DUE DILIGENCE. Subject to the express representations,
warranties and indemnities of Seller set forth in this Agreement, by its
execution of this Agreement, Buyer hereby approves all Due Diligence Materials,
the physical condition of the Property and all issues in connection with the
Property in every respect. Buyer acknowledges and agrees that Buyer shall not
have any right to terminate this Agreement regarding the physical condition or
feasibility of the Property. In addition, Buyer's obligations under this
Agreement to be performed in connection with the Closing shall not be contingent
upon Buyer's approval of the Due Diligence Materials, the physical condition of
the Property, any issues in connection with the Property or Buyer's obtaining of
financing in connection with Buyer's proposed acquisition of the Property
pursuant to the terms and conditions of this Agreement. If this Agreement is
terminated for any reason, Buyer shall, within five (5) days of such
termination, provide Seller with full and complete copies of any Due Diligence
Materials and all entitlement materials, applicants and agreements, all surveys,
appraisals, investigative reports and other written materials developed by (or
for the benefit of) Buyer in connection with its due diligence review ("BUYER
PREPARED DUE DILIGENCE").
5.3 PHYSICAL INSPECTIONS.
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(a) Intentionally Deleted.
(b) Notwithstanding any provision of this Agreement
to the contrary, in no case shall Buyer or any and Buyer's agents, employees and
contractors (collectively, the "BUYER PARTIES") conduct any physical, soils,
groundwater, environmental or other sampling, drilling or coring or any other
form of work or investigation which may physically invade, alter, damage or
disturb any portion of the Property (or the soils or groundwater thereunder) or
any improvements (the "IMPROVEMENTS") thereon or thereunder (collectively,
"PHYSICAL TESTING") without first (i) submitting to Seller a written description
of the general nature and scope of the Physical Testing proposed, the protective
measures to be utilized by Buyer to avoid or minimize any damage to the Property
or the Improvements, the restoration activities proposed to be performed by
Buyer to restore any anticipated damage, the contractor(s) to be conducting such
Physical Testing (and a description of their qualifications and licensing),
those portions of the Property to be affected by such Physical Testing and
Buyer's proposed schedule for conducting such Physical Testing (collectively, a
"REQUEST FOR PHYSICAL TESTING") and (ii) obtaining the prior written approval of
Seller to Buyer's Request for Physical Testing with respect thereto, which
approval may be withheld in Seller's reasonable discretion.
(c) Buyer shall indemnify, protect, defend (with
counsel satisfactory to Seller) and hold Seller, the Property and each of
Seller's members, partners, employees, directors, officers, shareholders,
parents, subsidiaries, accountants, agents and affiliates (collectively, "SELLER
RELATED PARTIES") harmless from and against all claims, demands, actions,
liabilities, damages, losses, obligations, fines, penalties, costs and expenses,
including, without limitation, attorneys' fees and all court costs asserted
against or incurred by Seller, the Property, any plants, equipment or
improvements related to the nursery operations thereon (collectively, the
"PLANTS AND EQUIPMENT") or any Seller Related Party in connection with any
exercise by Buyer or any Buyer Party of the Inspection rights granted to Buyer
under this Agreement, except to the extent such claims are determined by a court
of competent jurisdiction to have been caused by Seller or any Seller Related
Party. The foregoing indemnity shall survive the Closing and the termination or
cancellation of this Agreement. Prior to any Inspection of or entry onto the
Property by Buyer or any Buyer Party, Buyer shall (i) at its sole cost and
expense, procure and maintain in full force and effect at all times prior to the
Closing a customary commercial general liability insurance policy with combined
single limit coverage in an amount not less than $1,000,000 and property damage
limits of at least $2,000,000, issued by an insurance company qualified to do
business in the State of New York, and having a Best's rating of not less than
A-/VII, naming Seller and any other party reasonably designated by Seller as
additional insureds with respect to all of Buyer's and the Buyer Parties'
activities in, on and about the Property and including customary insurance
against any assumed contractual liability under this Agreement, and (ii) provide
Seller with a certificate of insurance evidencing the existence of such policy
and coverage. The insurer under such policy shall agree not to cancel,
materially change or fail to renew the coverage provided by such policy without
giving Seller ten (10) business days advance written notice, which agreement
shall be reflected in Buyer's certificate of insurance.
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6. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby makes the
following representations and warranties to Buyer, each of which is true and
correct as of the date hereof and will be true and correct as of the Closing
Date, except as set forth on the disclosure schedules attached hereto ("SELLER'S
DISCLOSURE Schedules"):
6.1 GENERAL REPRESENTATIONS AND WARRANTIES.
(a) EXISTENCE. Seller validly exists as a corporation
in good standing under the laws of the State of California.
(b) AUTHORITY TO SELL OPERATING ASSETS. Seller has
all requisite corporate power and authority to sell the Operating Assets and the
Fee Properties to Buyer as contemplated hereby, and such sale of the Operating
Assets and the Fee Properties has been duly and validly authorized by all
necessary corporate action on the part of Seller.
(c) TITLE TO OPERATING ASSETS. At Closing, Seller
will deliver good and marketable title to the property included in the Operating
Assets, free and clear of all liens, claims and encumbrances except for any lien
claim or encumbrance created by Buyer or otherwise resulting from Buyer's
actions.
(d) GOVERNMENTAL CONSENTS. The execution, delivery
and performance of this Agreement by Seller does not and will not require any
consent, approval, authorization or other order of, action by, filing with or
notification to, any governmental body, agency, official or authority, except
(i) where the failure to obtain such consent, approval, authorization or action,
or to make such filing or notification, would not prevent or materially delay
the consummation by Seller of the transactions contemplated by this Agreement or
would not materially and adversely effect Buyer, or (ii) as may be necessary as
a result of any facts or circumstances relating solely to the Seller or any of
its affiliates, or (iii) filings or actions contemplated by this Agreement,
including, without limitation, filings and actions to be taken by Escrow Holder.
(e) NON-CONTRAVENTION. None of the execution,
delivery or performance by Seller of this Agreement does or will (i) contravene
or conflict with Seller's articles of incorporation or bylaws, or (ii)
contravene or conflict with any provision of any law, regulation, judgment,
injunction, order or decree binding upon Seller, or (iii) contravene or conflict
with any contract or other instrument to which Seller is a party.
(f) EXECUTION AND DELIVERY. This Agreement has been
duly executed and delivered by Seller, and the other agreements, documents and
instruments to be executed in connection herewith (the "TRANSACTION DOCUMENTS"),
when executed and delivered at the Closing, will be duly executed and delivered
by Seller. This Agreement constitutes, and the Transaction Documents when duly
executed and delivered by Seller will constitute, legal, valid and binding
obligations of Seller enforceable against Seller in accordance with their
respective terms, except to the extent such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, relating to or limiting creditors' rights generally; and
(ii) general principles of equity (whether considered in an action in equity or
at law).
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(g) NO OTHER REPRESENTATIONS OR WARRANTIES. EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION 6.1 RELATING TO
THE OPERATING ASSETS, SELLER MAKES NO OTHER EXPRESS OR IMPLIED REPRESENTATION OR
WARRANTY WITH RESPECT TO THE OPERATING ASSETS AND SELLER HEREBY DISCLAIMS ANY
SUCH REPRESENTATION OR WARRANTY. THE OPERATING ASSETS ARE USED AND BEING SOLD
"AS IS - WHERE IS" AND THE SELLER HEREBY DISCLAIMS THE WARRANTY OF
MERCHANTABILITY AND FITNESS FOR USE.
6.2 REPRESENTATIONS AND WARRANTIES REGARDING REAL PROPERTY.
(a) USE OF PREMISES BY THIRD PARTIES. Except as
provided in the Title Commitments, Seller has not leased or otherwise granted to
any third party the right to use or occupy the Property or any portion thereof
pursuant to a written agreement.
(b) CONDEMNATION. To Seller's Knowledge it has not
received any written notice of condemnation, or other proceeding in eminent
domain, affecting the Property or any part thereof.
(c) ENVIRONMENTAL MATTERS. Except for matters that
are expressly disclosed in the environmental reports listed in SCHEDULE 6.2(C)
(collectively, the "ENVIRONMENTAL REPORTS"), to Seller's Knowledge, it has not
received any written notice of any violation of any applicable federal, state or
local environmental laws affecting the Property or any part thereof. Except as
disclosed in the Environmental Reports, Seller has not released any Hazardous
Materials on the Property in violation of applicable environmental laws during
its ownership of the Fee Properties or use of the Leased Property.
(d) COMPLIANCE WITH LAWS; LEGAL PROCEEDINGS. Except
for matters that are expressly disclosed in the Environmental Reports, to
Seller's Knowledge (i) it has materially complied with all applicable federal,
state, and local laws and regulations and; (ii) it has not received notice of
any claim, action, suit or proceeding pending before any court or government
agency, which, if resolved against Seller, would materially and adversely affect
the Newark Property, the Utica Property or the Leased Property following the
Closing.
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(e) DUE DILIGENCE MATERIALS. To Seller's Knowledge,
there is no material inaccuracy in the Due Diligence Materials provided by
Seller to Buyer relating to the Newark Property, the Utica Property and the
Leased Property.
(f) KNOWLEDGE. Notwithstanding anything to the
contrary in this Agreement, all references contained in this Agreement, or
contained in any certificate delivered or document executed by Seller and
delivered pursuant to this Agreement, to the phrase "Seller's Knowledge" or like
expressions shall (i) with respect to the Utica Property exclusively refer to
the actual knowledge of Xxxxxxx Xxxxxxxx, Lincoln Xxxxxx and Xxx Xxxxx without
any duty of investigation or inquiry and without any imputation of the knowledge
of any other person or entity; (ii) with respect to the Newark Property
exclusively refer to the actual knowledge of Xxxxxxx Xxxxxxxx, Lincoln Xxxxxx
and Xxxxx XxXxxxxxxx without any duty of investigation or inquiry and without
any imputation of the knowledge of any other person or entity; and (iii) with
respect to the Leased Property exclusively refer to the actual knowledge of
Xxxxxxx Xxxxxxxx, Lincoln Xxxxxx and Xxxx Xxxxxxxx without any duty of
investigation or inquiry and without any imputation of the knowledge of any
other person or entity; provided, however, that the foregoing representations
and warranties shall not in and of themselves create personal liability for such
individuals.
6.3 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. EXCEPT FOR
THE EXPRESS REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF SELLER SET FORTH IN
THIS AGREEMENT, BUYER HEREBY ACKNOWLEDGES AND AGREES THAT THE SALE OF THE FEE
PROPERTIES HEREUNDER IS AND WILL BE MADE ON AN "AS IS, WHERE IS BASIS WITH ALL
FAULTS" AND THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND
DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, FUTURE
OR OTHERWISE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE FEE PROPERTIES.
7. REPRESENTATIONS AND WARRANTIES OF BUYER.
7.1 Mohawk, 621, PA, Utica, Newark and Danville hereby jointly
and severally represent and warrant, as of the date hereof and as of the Closing
Date, as follows:
(a) EXISTENCE. Mohawk, 621, PA, Utica, Newark and
Danville each validly exists as a limited liability company in good standing
under the laws of the State of New York.
(b) AUTHORITY TO PURCHASE PURCHASED ASSETS. Each
Buyer has all requisite power and authority to purchase the Purchased Assets as
contemplated hereby, and such purchase of the Purchased Assets has been duly and
validly authorized by all necessary action on the part of Buyer.
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(c) REQUIRED CONSENTS. None of the execution,
delivery or performance by Buyer of this Agreement requires any action by or in
respect of, or filing with, any governmental body, agency, official or authority
or the consent of any third party.
(d) NON-CONTRAVENTION. None of the execution,
delivery or performance by Buyer of this Agreement does or will (i) contravene
or conflict with the articles of organization or operating agreement of any
Buyer, or (ii) contravene or conflict with any provision of any law, regulation,
judgment, injunction, order or decree binding upon Buyer, or (iii) contravene or
conflict with any contract or other instrument to which Buyer is a party.
(e) EXECUTION AND DELIVERY. This Agreement has been
duly executed and delivered by Buyer, and the Transaction Documents, when
executed and delivered by Buyer at the Closing, will be duly executed and
delivered. This Agreement constitutes, and the Transaction Documents when duly
executed and delivered by Buyer will constitute, legal, valid and binding
obligations of Buyer enforceable against Buyer in accordance with their terms,
except to the extent such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, relating to or limiting creditors' rights generally; and (ii) general
principles of equity (whether considered in an action in equity or at law).
(f) BUYER'S INDEPENDENT INVESTIGATION. Buyer
acknowledges that it has analyzed and become familiar with the Purchased Assets
and has made such independent investigations as Buyer deems necessary or
appropriate concerning the condition of the Purchased Assets and the suitability
thereof for Buyer's potential purchase, development and use. Buyer acknowledges
that except as specifically provided for in Section 6 herein, (i) the Operating
Assets and the Property are being sold "AS IS - WHERE IS;" and (ii) Seller is
making no representation or warranty regarding the Operating Assets, the Fee
Properties, the Prior Lease, the Lease, the Leased Property or the transactions
contemplated herein. Seller shall not be liable for any failure to investigate
the Property nor shall Seller be bound in any manner by any verbal or written
statements, representations, appraisals, environmental assessment reports, or
other information pertaining to the Property or the operation thereof, furnished
by Seller or by any real estate broker, attorney, agent, representative,
employee, servant or other person acting on Seller's behalf, except for the
express representations and warranties of Seller set forth in this Agreement or
for any fraudulent or willful misrepresentation made by Seller. It is expressly
understood and agreed that the amount of the Purchase Price reflects, and the
Property being sold by Seller and purchased by Buyer is subject to, the
foregoing disclaimers, which shall survive the Closing.
(g) BULK TRANSFER LAWS. Buyer hereby waives
compliance by Seller with any applicable UCC bulk sale or bulk transfer laws of
any jurisdiction in connection with the sale of the Purchased Assets. Pursuant
to Section 11.2(d), Seller has agreed to indemnify Buyer against any and all
liabilities which may be asserted by any third-party creditors against Buyer as
a result of Seller's noncompliance with any such applicable law.
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8. CONDITIONS PRECEDENT.
8.1 BUYER'S CONDITION PRECEDENT TO CLOSE. Buyer's obligation
to purchase the Purchased Assets and to take the other actions required to be
taken by Buyer pursuant to this Agreement at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
(a) All of Seller's representations and warranties in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date as though such representations and warranties were made on and
as of such date.
(b) Seller shall have performed and complied in all
material respects with all material terms, conditions and covenants required by
this Agreement to be performed or complied with by it prior to or at the
Closing.
(c) Seller shall have delivered all the documents
required to be delivered or executed by Seller in accordance with this
Agreement.
(d) PPL shall have executed the Lease, in
substantially the form attached hereto as EXHIBIT J.
8.2 SELLER'S CONDITION PRECEDENT TO CLOSE. Seller's obligation
to sell, transfer, convey and assign Seller's right title and interest in the
Purchased Assets and to take the other actions required to be taken by Seller at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Seller, in whole or
in part):
(a) Buyer shall have timely delivered the Purchase
Price.
(b) All of Buyer's representations and warranties in
this Agreement shall be true and correct in all material respect on and as of
the Closing Date as though such representations and warranties were made on and
as of such date.
(c) Buyer shall have performed and complied in all
material respects with all material terms, conditions and covenants required by
this Agreement to be performed or complied with by it prior to or at the
Closing.
(d) Buyer shall have delivered all the documents
required to be delivered or executed by Buyer in accordance with this Agreement.
(e) Buyer and PPL shall have executed the Lease, in
substantially the form attached hereto as EXHIBIT J.
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8.3 FAILURE OF A CONDITION. Subject to the provisions of this
Agreement, and subject to the rights and remedies of any party hereto in the
case of a default hereunder by the other party hereto, in the event of any
termination of this Agreement by reason of failure of a condition set forth in
Section 8.1 or in Section 8.2:
(a) Buyer (unless resulting from a default by Seller)
shall pay for all Escrow and Title Company termination fees;
(b) Buyer shall deliver to Seller all Due Diligence
Materials and Buyer Prepared Due Diligence and all documents delivered to Buyer
pursuant to the provisions hereof;
(c) Buyer shall comply with the requirements
applicable in the event of termination of this Agreement; and
(d) All of the remaining rights and obligations of
Buyer and Seller shall terminate (except with respect to those obligations which
survive such termination).
9. ADDITIONAL AGREEMENTS.
9.1 NON-DISCLOSURE. Buyer shall hold in confidence, and shall
use reasonable efforts to ensure that its employees and representatives hold in
confidence, all information concerning Seller and the terms and conditions of
this Agreement.
9.2 Intentionally Omitted.
9.3 Intentionally Omitted.
9.4 NUMBERING OF RACKS; SALE OF ADDITIONAL RACKS. Promptly
after the Closing, Buyer agrees to sequentially number the Initial Racks sold to
Buyer pursuant to Section 1.1 above. In addition to the Initial Racks being sold
to Buyer pursuant to Section 1.1 above, Buyer agrees to purchase from Seller
those additional racks (each such rack consisting of a base and one or more
shelves) which are delivered by Seller to Buyer after the Closing and prior to
June 30, 2007 (such additional racks to be purchased by Buyer are referred to as
the "ADDITIONAL RACKS"). On July 15, 2007, Buyer shall deliver a report to
Seller setting forth in reasonable detail the number of Additional Racks and the
number of shelves on each Additional Rack delivered by Seller to Buyer and shall
pay to Seller by wire transfer a purchase price of $60 for each base of a rack
and $5 for each shelf listed thereon (such additional purchase price is defined
as the "ADDITIONAL RACKS PURCHASE PRICE"). Buyer shall continue to keep a record
of the Additional Racks, including the number of shelves on each such Additional
Rack, which it receives as provided for above and provide Seller with reasonable
access to such records and the Additional Racks for the purpose of verifying the
number of Additional Racks and the number of shelves on each Additional Rack and
the resulting Additional Racks Purchase Price calculations. In order to keep
track of the number of Additional Racks to be purchased by Buyer, Buyer agrees
to sequentially number such Additional Racks. Title for the Additional Racks
will not transfer from Seller to Buyer until such time as the Additional Racks
Purchase Price for such Additional Racks has been received by Seller. The
Additional Racks being sold to Buyer hereunder are used, have incurred wear and
tear and are being sold subject to the limitations set forth in Section 6.1(g)
and Section 7.1(f) above. In no event shall Buyer be required to purchase a
non-functional Additional Rack as reasonably determined by the parties.
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9.5 NO ACCEPTANCE ON SELLER'S BEHALF. Buyer shall not accept
delivery of goods shipped to, ordered by or intended for Seller. Buyer shall be
responsible for all liabilities and obligations relating to or arising out of
any goods shipped to, ordered by or intended for Seller which are accepted by
Buyer, and to the extent that Seller has paid for any such goods accepted by
Buyer, Buyer shall promptly reimburse Seller for any such amounts.
9.6 DAMAGE OR DESTRUCTION; CONDEMNATION; INSURANCE. If at any
time prior to the Closing Date there is damage or destruction to the Fee
Properties, the cost for repair of which exceeds One Hundred Fifty Thousand
Dollars ($150,000) and the Fee Properties cannot be restored to their original
condition prior to the Closing, or if any portion of the Fee Properties is
condemned or taken by eminent domain proceedings by any public authority, then,
at Buyer's option, this Agreement shall terminate, and neither party shall have
any further liability or obligation to the other hereunder. If there is any
damage or destruction or condemnation or taking, and either the cost to repair
does not exceed the amount set forth above or Buyer elects not to terminate this
Agreement as provided above, then (a) in the case of a taking, all condemnation
proceeds paid or payable to Seller shall belong to Buyer and shall be paid over
and assigned to Buyer at the Closing; and (b) in the case of a casualty, Seller
shall assign to Buyer all rights to any insurance proceeds paid or payable under
the applicable insurance policies, less any costs of collection and any sums
expended in restoration, and Buyer shall receive a credit against the Purchase
Price for the amount of any deductible under Seller's insurance policies.
9.7 ACCESS TO PREMISES. Buyer agrees, without cost, after the
Closing, to permit Seller and a reasonable number of Seller's employees, agents
and representatives access to the Property during normal business hours and at
other reasonable times in order to perform certain remedial and cleanup actions
and for other post-closing activities. Seller agrees to be responsible for all
damages caused to the structures, improvements or land situated on the Property
which damages result from the acts or negligence of Seller or Seller's agents
upon the Property. Further, Seller shall, at its sole cost and expense, promptly
restore any physical damage or alteration of the physical condition of the
Property which results from any inspections or activities conducted by Seller or
Seller's agents to the condition immediately preceding such physical damage or
alteration of physical condition.
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9.8 CLOSURE OF UNDERGROUND STORAGE TANKS. Notwithstanding
anything in this Agreement to the contrary, Seller shall use commercially
reasonable efforts to remove and close three (3) 10,000 gallon underground
storage tanks ("USTS") in accordance with applicable environmental laws
("CLOSURE WORK") currently in operation at the Leased Property. Seller shall
commence the process for the removal of the tanks as soon as practicable but no
later than April 1, 2007 and shall use commercially reasonable efforts to
prosecute to completion. All costs and expenses to perform such Closure Work,
including backfilling and remediation, to the extent remediation is required by
applicable governmental agencies, shall be paid by Seller; provided, however,
that Seller shall have no liability or obligation to Buyer for any legal,
consulting or other expenses incurred by Buyer in connection with Seller's
performance of the Closure Work unless caused by Seller's failure to remove and
close the USTs in accordance with this Section 9.8. Seller shall not be required
to obtain any consent of Buyer to perform the Closure Work. Notwithstanding the
foregoing, Seller shall not be responsible to pay for any remediation required
as part of the Closure Work, except to the extent required under applicable
environmental law for commercial or industrial properties.
(a) Subject to Seller's obligation to obtain Buyer's
comments prior to submitting or implementing workplans, remedial action plans
and/or closure reports, and associated documents, Seller shall have sole
authority to negotiate with the relevant governmental agencies regarding the
Closure Work. Buyer shall not communicate with such governmental agencies
regarding such matters without Seller's prior written consent except as may be
required by law, provided, however, that prior to making any communication that
Buyer believes is required by law, Buyer shall give Seller prior notice of such
communication. Notwithstanding the foregoing, Buyer may, at its sole cost and
expense, have a non-participating representative present at meetings between
Seller or its designee and applicable governmental agencies regarding the
Closure Work.
(b) Buyer shall cooperate with Seller by providing
reasonable access to the Property (including to any third parties that may
perform such Closure Work), including access to utilities and discharge
outfalls, and by taking reasonable measures to avoid interference with Seller's
performance of Closure Work, including with respect to equipment installed by
Seller in connection therewith, provided such equipment does not unreasonably
interference with Buyer's operations.
(c) Notwithstanding anything to the contrary, the
limitations on indemnification contained in Section 11.4 of this Agreement shall
not apply to Seller's obligations under this Section 9.8 and Seller's liability
of whatever nature for each UST shall terminate upon receipt of a no further
action letter or certification of closure regarding that UST from the
governmental agencies exercising jurisdiction at the time the Closure Work is
performed, in a form that is consistent with the normal and customary no further
action letters or certifications of closure issued by such governmental agencies
stating that no further closure activities are required.
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10. RELEASE. Subject to Seller's express representations, warranties
and indemnities set forth in this Agreement, Buyer (on behalf of itself and its
agents, employees, independent contractors, successors or assigns) hereby
waives, releases and discharges Seller and the Seller Related Parties and each
of them, from any and all suits, causes of action, legal or administrative
proceedings, liabilities, claims, damages, losses, costs and expenses of
whatever kind, known or unknown, suspected or unsuspected, now or hereafter
existing or discovered, in any manner or way connected with the physical
condition of the Property, any latent or patent defects concerning same and any
actual or alleged violations of law concerning same, and/or any claim or any
action concerning the environmental condition of the Property, including without
limitation under any provision of federal, state or local law, which Buyer had,
has or may have, based upon the past, present or future presence, discharge,
treatment, recycling, use, migration, storage, generation, or release or
transportation to or from the Property of any contaminants or hazardous or toxic
materials or waste on or in the soil or ground water on or under the Property
(collectively, "HAZARDOUS MATERIALS") or the environmental condition of the
Property (including without limitation all facilities, improvements, structures
and equipment thereon and soil and groundwater thereunder). Buyer acknowledges
that unknown and unsuspected Hazardous Materials may hereafter be discovered on
or about the Property, and, except for Seller's express representations,
warranties and indemnities set forth in this Agreement or any fraudulent or
willful misrepresentation made by Seller, Buyer knowingly releases Seller from
any and all liability related thereto. Buyer hereby agrees that the matters
released herein are not limited to matters which are known, disclosed, suspected
or foreseeable.
11. SURVIVAL AND INDEMNIFICATION.
11.1 SURVIVAL. All covenants and agreements of the parties in
this Agreement or provided herein shall survive the Closing without limit,
unless otherwise specifically provided for herein. All representations and
warranties of the parties shall survive the Closing and (a) with respect to the
representations and warranties contained in Section 6.2(c), for a period ending
eighteen (18) months after the Closing; and (b) with respect to all other
representations and warranties, for a period ending on the first anniversary of
the Closing (the "SURVIVAL PERIOD"), notwithstanding any investigation at any
time made by or on behalf of the other party; provided, HOWEVER, that any
representation or warranty which is the subject of a claim or dispute asserted
prior to the expiration date of the Survival Period shall survive with respect
to such claim or dispute until final resolution thereof. All claims for
indemnity hereunder shall be made in writing, and shall state with reasonable
specificity the matter for which indemnification is sought.
11.2 SELLER'S INDEMNIFICATION. Seller hereby agrees to
indemnify, defend and hold Buyer and its shareholders, officers, employees,
directors, agents and affiliates (the "SELLER INDEMNITEES") harmless from and
against any and all claims, liabilities, losses, damages or injuries together
with costs and expenses, including reasonable legal fees, actually suffered by
them and arising out of, related to or resulting from (a) the breach of any
representation or warranty made by Seller in this Agreement, (b) any breach in
any material respect by Seller, unless waived by Buyer, of any covenant or
agreement of Seller contained in or arising out of this Agreement, (c) any
liability or obligation relating to, resulting from or arising out of the
Operating Assets before the Closing (except Assumed Liabilities), (d) any
liability which may be asserted by a third-party creditor against Buyer as a
result of Seller's noncompliance with any applicable UCC bulk sale or bulk
transfer laws, and (e) any failure by Seller to comply with Seller's
obligations, if any, under the Worker Adjustment Retraining and Notification Act
(WARN Act).
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11.3 BUYER'S INDEMNIFICATION. Mohawk, 621, PA, Utica, Newark
and Danville hereby jointly and severally agree to indemnify, defend and hold
Seller and its shareholders, officers, employees, directors, agents and
affiliates (the "BUYER INDEMNITEES") harmless from and against any and all
claims, liabilities, losses, damages or injuries together with costs and
expenses, including reasonable legal fees, actually suffered by them and arising
out of or resulting from (a) the breach of any representation or warranty made
by Buyer in this Agreement, (b) any breach in any material respect by Buyer,
unless waived by Seller, of any covenant or agreement of Buyer contained in or
arising out of this Agreement, (c) any liability or obligation relating to the
Purchased Assets occurring on or after the Closing, (d) any liability or
obligation relating to, resulting from or arising out of the Buyer's business,
and (e) any failure by Buyer to comply with Buyer's obligations, if any, under
the WARN Act.
11.4 LIMITATIONS ON INDEMNIFICATION.
(a) The obligations of Seller for a breach of a
representation or warranty contained in this Agreement and from subclause (a) of
Section 11.2, and the obligations of Buyer for a breach of a representation or
warranty contained in this Agreement and/or from subclause (a) of Section 11.3,
respectively, shall each not exceed an aggregate amount equal to Five Hundred
Thousand Dollars ($500,000) (the "CAP AMOUNT").
(b) Notwithstanding the indemnification obligations
arising in subclause (a) of Section 11.2 and subclause (a) of Section 11.3,
neither Seller nor Buyer shall be liable for the first Twenty-Five Thousand
Dollars ($25,000) (the "THRESHOLD AMOUNT") in aggregate damages sustained by
Buyer Indemnitees or Seller Indemnitees, respectively, pursuant to the
indemnification obligations arising in subclause (a) of Section 11.2 and
subclause (a) of Section 11.3 or a breach of a representation or warranty in
this Agreement; provided Buyer Indemnitees and Seller Indemnitees shall be
entitled to indemnification for damages in excess of such Threshold Amount (but
not to exceed the Cap Amount) in the event damages to such Buyer Indemnitees or
Seller Indemnitees exceed such Threshold Amount.
(c) Notwithstanding anything herein to the contrary,
the Cap Amount and the Threshold Amount shall not apply to (i) any
indemnification obligation of Seller or Buyer arising as a result of fraud,
willful breach or intentional misrepresentation, or (ii) any liquidated damages
payable to Seller pursuant to Section 14.2.
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11.5 THIRD PARTY CLAIMS. If a claim by a third party is made
against any party entitled to indemnification under this Agreement, such
indemnified party shall promptly notify the indemnifying party of such claim.
The indemnifying party shall have ten (10) days after receipt of the
above-referenced notice to undertake, through counsel of its choosing (subject
to the consent of the indemnified party, which consent shall not be unreasonably
withheld) and at the expense of the indemnifying party, the settlement or
defense thereof; PROVIDED, HOWEVER, that any such settlement shall be subject to
the consent of the indemnified party, which consent shall not be unreasonably
withheld. If the indemnifying party does not notify the indemnified party within
ten (10) days after receipt of the indemnified party's notice of a claim of
indemnity hereunder that the indemnifying party elects to undertake the defense
thereof, or the indemnifying party ceases to reasonably contest such claim in
good faith, the indemnified party shall have the right to contest, settle or
compromise the claim in its exclusive discretion at the expense of the
indemnifying party. Nothing contained in this Section shall be construed as a
limitation on the right of any party to indemnification under this Agreement.
12. EMPLOYEES AND EMPLOYEE BENEFITS
12.1 EMPLOYMENT. At the request of Buyer, Seller shall
communicate Buyer's offer of employment to certain employees of Seller. SCHEDULE
12.1 lists those employees of Seller that the Buyer intends to offer employment
to (such employees are referred to herein as the "IDENTIFIED EMPLOYEES"). Buyer
is responsible for all obligations and liabilities arising out of Buyer's offers
to or employment of the Identified Employees. Buyer agrees that, for purposes of
all employee benefit plans, policies and employee fringe benefit programs,
including vacation policies, of Buyer which may apply to Identified Employees or
in which the Identified Employees may participate following the Closing, credit
will be given to the Identified Employees for service previously credited with
Seller prior to the Closing. Prior to the Closing, Seller shall pay to each
Identified Employee all accrued vacation pay in accordance with applicable law.
12.2 NO RIGHT OF EMPLOYMENT. Nothing contained herein, express
or implied, is intended to confer upon any Identified Employee any right to
continued employment for any period by reason of this Agreement. Nothing
contained herein is intended to confer upon any Identified Employee any
particular term or condition of employment other than as expressly referred to
in Section 12.1 of this Agreement.
13. TERMINATION.
13.1 This Agreement and the transactions contemplated herein
may be terminated at any time prior to the Closing Date:
(a) by the mutual written consent of Buyer and
Seller;
(b) by Buyer in the event that the conditions set
forth in Section 8.1 of this Agreement shall not have been satisfied or waived
by January 15, 2007 unless such satisfaction shall have been frustrated or made
impossible by any act or any failure to act of Buyer and the period provided for
in Section 14.1 has expired;
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(c) by Seller in the event that the conditions set
forth in Section 8.2 of this Agreement shall not have been satisfied or waived
by January 15, 2007 unless such satisfaction shall have been frustrated or made
impossible by any act or failure to act of Seller and the period provided for in
Section 14.1 has expired;
(d) by Seller or Buyer if the Closing shall not have
occurred by January 31, 2007.
13.2 EFFECT OF TERMINATION. In the event of termination in
accordance with Section 13.1, this Agreement shall become void and of no further
force or effect, without any liability or obligation on the part of any of the
parties hereto, or their respective officers, directors, employees, agents
consultants or representatives, except as set forth in Section 14 below and
provided that the provisions of Sections 9.1, 15.5, 15.9, 15.13 and 15.14 and
this Section 13.2 shall remain in full force and effect and survive any
termination of this Agreement pursuant to the terms of this Section 13.
14. REMEDIES.
14.1 SELLER'S DEFAULT. If the transactions contemplated by
this Agreement shall not be closed by reason of Seller's default under this
Agreement and Buyer shall not have defaulted under this Agreement, then Buyer
shall deliver to Seller written notice of such default, which notice shall set
forth in detail the nature of such default. Seller shall have a period of ten
(10) days from Seller's receipt of such notice to commence the cure of such
default, or, if such default cannot be cured within such ten (10) day period,
Seller shall have such amount of time as is reasonably necessary or appropriate
to cure such default provided that Seller diligently proceeds to cure the same
up to a maximum of sixty (60) days. If (a) the Closing does not occur solely by
reason of a default on the part of Seller under this Agreement and Buyer shall
not have defaulted under this Agreement; or (b) Seller has not otherwise cured a
default within the time periods provided in this Section, then Buyer, as its
sole and exclusive remedy shall subject to the provisions of this Section, be
entitled to (i) the return of the Deposit; or (ii) pursue an action for the
specific performance of this Agreement so long as Buyer institutes such action
within ninety (90) days of Seller's breach. As a material consideration to
Seller's entering into this Agreement with Buyer, Buyer waives any right to
record or file a notice of lis pendens or notice of pendency of action or
similar notice against any portion of the Property unless such filing is part of
the action for specific performance. Except as set forth in this Section, Buyer
hereby waives the remedy of specific performance on account of Seller's default
under this Agreement.
14.2 BUYER'S DEFAULT. IN THE EVENT THE TRANSACTION HEREIN
PROVIDED SHALL NOT CLOSE BY REASON OF BUYER'S DEFAULT UNDER THIS AGREEMENT, THEN
(a) ESCROW HOLDER SHALL IMMEDIATELY RELEASE TO SELLER ANY AND ALL DEPOSITS IN
ESCROW AS SELLER'S LIQUIDATED DAMAGES AND (b) SELLER SHALL BE ENTITLED TO RETAIN
ANY AND ALL SUMS CONSTITUTING DEPOSITS AS SELLER'S FULL COMPENSATION AND
LIQUIDATED DAMAGE (SUBJECT TO THE PROVISIONS OF SECTION 15.14) UNDER AND IN
CONNECTION WITH THIS AGREEMENT.
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THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE AND EXTREMELY
DIFFICULT TO ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY SELLER AS A RESULT OF
BUYER'S FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO THIS
AGREEMENT, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE EFFECTIVE DATE,
THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENT A REASONABLE
ESTIMATE OF THE DAMAGES WHICH SELLER WILL INCUR AS A RESULT OF SUCH FAILURE
(SUBJECT TO THE PROVISIONS OF SECTION 15.14). IN THE EVENT THE SALE OF THE
PROPERTY SHALL NOT BE CONSUMMATED ON ACCOUNT OF BUYER'S DEFAULT, THEN THE
DEPOSITS SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT BY
REASON OF SUCH DEFAULT (SUBJECT TO THE PROVISIONS OF SECTION 15.14).
----------------- -----------------
Seller's Initials Buyer's Initials
14.3 LIMITATION OF LIABILITY. Notwithstanding any provision of
this Agreement to the contrary, in no case shall Seller ever be liable to Buyer
under any statutory, common law, equitable or other theory of law, either prior
to or following the Closing, for any lost rents, profits, "benefit of the
bargain," business opportunities or any form of consequential damage in
connection with any claim, liability, demand or cause of action in any way or
manner relating to the Purchased Assets, the condition of the Purchased Assets,
this Agreement, or any transaction or matter between the parties contemplated
hereunder, unless such loss and/or damages results from Seller's fraudulent
action or fraudulent misrepresentation.
15. GENERAL PROVISIONS.
15.1 NOTICES. All notices and other communications under or in
connection with this Agreement shall be in writing and shall be deemed given (a)
if delivered personally, upon delivery; (b) if delivered by registered or
certified mail (return receipt requested), upon the earlier of actual delivery
or three days after being mailed; or (c) if given by telecopy, upon confirmation
of transmission by telecopy, in each case to the parties at the following
addresses:
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(a) If to Seller:
Xxxxx Nurseries, Inc.
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx, CFO
With a copy to (which shall not constitute
notice):
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
Seventeenth Floor
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
(b) If to Buyer, addressed to:
KW Mohawk Valley LLC
00 Xxxx Xxxxxx
Xxxxxx Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxx
With a copy to (which shall not constitute
notice):
Xxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxxx, Esq.
15.2 SEVERABILITY. If any term or provision of this Agreement
or the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable such term or
provision in any other jurisdiction, the remaining terms and provisions of this
Agreement or the application of such terms and provisions to circumstances other
than those as to which it is held invalid or enforceable.
15.3 BROKERS. Buyer and Seller each represents to the other
that it has not dealt with any broker or agent in connection with this
transaction, other than Performance Group. Seller shall pay Performance Group a
commission pursuant to a separate agreement, if, as and when the Closing occurs,
but not otherwise. Each party hereby indemnifies and holds harmless the other
party from all loss, cost and expense (including reasonable attorneys' fees)
arising out of a breach of its representation or undertaking set for in this
paragraph. The provisions of this paragraph shall survive the Closing or the
termination of this Agreement.
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15.4 EXPENSES. Each party shall bear the costs of its agents,
attorneys, accountants, investment bankers, travel, lodging and entertainment
and associated expenses except as otherwise provided in this Agreement.
15.5 THIRD PARTY RIGHTS. Any other provision of this Agreement
to the contrary notwithstanding, this Agreement shall not create benefits on
behalf of any other person not a party to this Agreement (including without
limitation any broker or finder), and this Agreement shall be effective only as
between the parties hereto, their successors and permitted assigns.
15.6 BACK-UP OFFERS. Seller shall have the right to continue
to market the Property for sale and accept "back-up" offers for all or any
portion of the Property contingent on the failure of the Closing to occur.
15.7 TAX DEFERRED EXCHANGE. Buyer may desire to consummate the
sale of the Fee Properties through a tax-deferred exchange (the "EXCHANGE")
which qualifies for non-recognition of gain under Section 1031 of the Internal
Revenue Code of 1986, as amended. To effect this Exchange, Buyer may assign its
rights in, and delegate its duties under, this Agreement to Xxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxx Xxxxx and any exchange accommodator which Buyer shall determine;
provided, however, that no such assignment or delegation shall releave Buyer of
its duties or obligations hereunder. As an accommodation to Buyer, Seller agrees
to cooperate with Buyer in connection with the Exchange, including the execution
of documents therefor, provided the following terms and conditions are
satisfied:
(a) There shall be no (except for de minimus costs) out
of pocket costs to Seller and Seller shall have no
obligation to take title to any property in
connection with the Exchange;
(b) Seller shall in no way be obligated to pay any escrow
costs, brokerage commissions, title charges, survey
costs, recording costs or other charges incurred with
respect to any exchange property and/or the Exchange;
and
(c) In no way shall the Closing be contingent or
otherwise subject to the consummation of the
Exchange, and the escrow shall timely close in
accordance with the terms of this Agreement,
notwithstanding any failure, for any reason, of the
parties to the Exchange to effect same.
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15.8 ENTIRE AGREEMENT. This Agreement, including the annexes,
schedules and exhibits attached hereto and other documents referred to herein,
contains the entire understanding of the parties hereto with respect to its
subject matter and supersedes all prior and contemporaneous agreements and
understandings, oral and written, between the parties with respect to such
subject matter.
15.9 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as provided in Section 15.7 above, this
Agreement and the rights and obligations hereunder shall not be assignable by
any party without the written consent of the other parties hereto, and any such
purported assignment by any party without such consent shall be void.
15.10 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, including electronically transmitted counterparts, each of
which shall be deemed an original, but all such counterparts together shall
constitute but one and the same agreement.
15.11 RECITALS, SCHEDULES AND ANNEXES. The recitals, exhibits
attached hereto and Seller's Disclosure Schedules referred to herein and
attached hereto are hereby incorporated herein and made a part hereof as if
fully set forth herein. Disclosure of any fact or item in any section of
Seller's Disclosure Schedules shall, should the existence of the fact or item be
relevant to any other section of Seller's Disclosure Schedules, be deemed to be
disclosed with respect to that other paragraph or section. The parties hereto
acknowledge that certain matters set forth in Seller's Disclosure Schedules are
included for informational purposes only, notwithstanding the fact that, because
they do not rise above applicable materiality thresholds or otherwise, they
would not be required to be set forth therein by the terms of this Agreement and
that disclosure of such matters shall not be taken as an admission by the party
delivering such Seller's Disclosure Schedules that such disclosure is required
to be made under the terms of any provision of this Agreement and in no event
shall any such disclosure be deemed or interpreted to broaden or otherwise
amplify the representations and warranties contained in this Agreement.
15.12 CONSTRUCTION. The article, section and subsection
headings used herein are inserted for reference purposes only and shall not in
any way affect the meaning or interpretation of this Agreement. As used in this
Agreement, the masculine, feminine or neuter gender, and the singular or plural,
shall be deemed to include the others whenever and wherever the context so
requires. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
15.13 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of New York.
15.14 ATTORNEYS' FEES. In the event of any dispute related to
or based upon this Agreement, the prevailing party shall be entitled to recover
from the other party its reasonable attorneys' fees and costs.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or has caused this Agreement to be executed on its behalf by a
representative duly authorized, all as of the date first above set forth.
"SELLER"
XXXXX NURSERIES, INC.
a California corporation
By: /S/ XXXXXXX X. XXXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxxx, Chief Financial
Officer, Secretary and Treasurer
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"BUYER"
KW MOHAWK VALLEY LLC,
a New York limited liability company
By: /S/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
000 XXXX XXXXX XXX,
x Xxx Xxxx limited liability company
By: KW Mohawk Valley LLC,
a New York limited liability company
its Managing Member
By: /S/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
DANVILLE PA LLC,
a New York limited liability company
By: KW Mohawk Valley LLC,
a New York limited liability company
its Managing Member
By: /S/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
KW UTICA LLC,
a New York limited liability company
By: KW Mohawk Valley LLC,
a New York limited liability company
its Managing Member
By: /S/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
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KW NEWARK LLC,
a New York limited liability company
By: KW Mohawk Valley LLC,
a New York limited liability company
its Managing Member
By: /S/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
KW DANVILLE LLC,
a New York limited liability company
By: KW Mohawk Valley LLC,
a New York limited liability company
its Managing Member
By: /S/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
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