AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND SALE OF REAL PROPERTY (FARMLAND) BY AND BETWEEN LECIL E. AND MARY JEANETTE COLE, as Trustees (Singly and Collectively, As Seller) AND CALAVO GROWERS, INC. (As Buyer)
EXHIBIT 2.2
PURCHASE AND SALE OF REAL PROPERTY (FARMLAND)
BY AND BETWEEN
XXXXX X. AND XXXX XXXXXXXX XXXX, as Trustees
(Singly and Collectively, As Seller)
(Singly and Collectively, As Seller)
AND
CALAVO GROWERS, INC.
(As Buyer)
(As Buyer)
TABLE OF CONTENTS
Page | ||||||||
1. | PURCHASE AND SALE OF PROPERTY | 1 | ||||||
2. | PURCHASE PRICE | 2 | ||||||
2.1 | Purchase Price | 2 | ||||||
2.2 | Payment of Purchase Price | 2 | ||||||
3. | TITLE MATTERS | 2 | ||||||
3.1 | Permitted Exceptions | 2 | ||||||
3.2 | Monetary Liens | 2 | ||||||
3.3 | Gap Closing | 2 | ||||||
4. | BUYER AND SELLER REPRESENTATIONS, ACKNOWLEDGEMENTS, AND AGREEMENTS | 3 | ||||||
4.1 | Due Diligence Materials | 3 | ||||||
4.2 | No Assigned and Assumed Rights and Obligations | 3 | ||||||
4.3 | Tax-Deferred Exchange | 3 | ||||||
4.4 | Seller's Activities Prior to the Close of Escrow | 3 | ||||||
4.5 | Reporting Person | 4 | ||||||
4.6 | Delivery of Property Materials | 4 | ||||||
5. | POSSESSION AND RISK OF LOSS | 4 | ||||||
6. | SELLER’S REPRESENTATIONS AND WARRANTIES | 4 | ||||||
6.1 | Brokerage Fees | 4 | ||||||
6.2 | Foreign Person | 4 | ||||||
6.3 | Seller Authority | 4 | ||||||
6.4 | No Violation | 4 | ||||||
6.5 | Litigation | 4 | ||||||
6.6 | Consent | 5 | ||||||
6.7 | Condemnation | 5 | ||||||
6.8 | Compliance | 5 | ||||||
6.9 | Adverse Title or Possession Claims | 5 | ||||||
6.10 | Environmental Matters | 5 | ||||||
6.11 | Due Diligence Materials Complete | 5 | ||||||
6.12 | Seller Bankruptcy; Insolvency | 5 | ||||||
6.13 | No Use or Zoning Changes | 6 | ||||||
6.14 | Land Access to Public Road | 6 | ||||||
6.15 | No Assessments or Deferred Taxes | 6 | ||||||
6.16 | Payment of Taxes | 6 | ||||||
6.17 | Improvement Contracts | 6 |
Page | ||||||||
6.18 | Plant and Equipment | 6 | ||||||
6.19 | Wetlands | 7 | ||||||
6.20 | Historic Sites | 7 | ||||||
6.21 | Endangered Species | 7 | ||||||
6.22 | Disability Access | 7 | ||||||
7. | BUYER’S REPRESENTATIONS AND WARRANTIES | 7 | ||||||
7.1 | Brokerage Fees | 7 | ||||||
7.2 | Buyer's Authority | 7 | ||||||
7.3 | Buyer Bankruptcy; Insolvency | 7 | ||||||
8. | BUYER’S CONDITIONS | 7 | ||||||
8.1 | Owner's Title Policy | 8 | ||||||
9. | INDEMNIFICATION | 8 | ||||||
9.1 | Indemnification by Seller | 8 | ||||||
9.2 | Indemnification by Buyer | 8 | ||||||
9.3 | Survival of Indemnities | 8 | ||||||
9.4 | Matters Involving Third Parties | 8 | ||||||
10. | ESCROW AND ESCROW INSTRUCTIONS; CLOSING DELIVERIES | 8 | ||||||
10.1 | Escrow | 8 | ||||||
10.2 | Opening of Escrow | 9 | ||||||
10.3 | Further Escrow Instructions | 9 | ||||||
10.4 | Closing Date | 9 | ||||||
10.5 | Documents | 9 | ||||||
10.5.1 Seller Deposits | 9 | |||||||
10.5.2 Buyer's Deposits | 9 | |||||||
10.6 | Closing Costs | 10 | ||||||
10.7 | Prorations | 00 | ||||||
00.0 | Xxxxx xx Xxxxxx | 00 | ||||||
00. | GENERAL PROVISIONS | 12 | ||||||
11.1 | Attorneys' Fees | 12 | ||||||
11.2 | Binding Effect; Assignment | 12 | ||||||
11.3 | Time of Essence | 12 | ||||||
11.4 | Days and Business Days | 12 | ||||||
11.5 | Entire Agreement; Modifications | 12 | ||||||
11.6 | Further Assurances | 12 | ||||||
11.7 | Titles and Headings | 13 | ||||||
11.8 | Execution in Counterparts | 13 | ||||||
11.9 | Governing Law | 13 | ||||||
11.10 | Exhibits | 13 |
Page | ||||||||
11.11 | Notices | 13 | ||||||
11.12 | Invalidity of Certain Provisions | 14 | ||||||
11.13 | Survival | 14 | ||||||
11.14 | Jurisdiction; Hawaiian Courts | 15 | ||||||
11.15 | Parties-in-Interest | 15 | ||||||
11.16 | Fair Construction | 15 | ||||||
11.17 | Other Definitions | 15 | ||||||
11.18 | Nonwaiver | 15 | ||||||
11.19 | Recording | 15 | ||||||
SIGNATURES | 16 |
AGREEMENT AND ESCROW INSTRUCTIONS FOR
PURCHASE AND SALE OF REAL PROPERTY (FARMLANDS)
PURCHASE AND SALE OF REAL PROPERTY (FARMLANDS)
THIS AGREEMENT (“Agreement”) is made (for document identification purposes only) as of
May 19, 2008, by and between CALAVO GROWERS, INC., a California corporation, or Assignee
(“Buyer”), and XXXXX X. AND XXXX XXXXXXXX XXXX, acting jointly and severally hereunder as
Trustees of the Xxxxx X. and Xxxx Xxxxxxxx Xxxx Revocable 1993 Trust (singly and collectively,
“Seller”).
W I T N E S S E T H
WHEREAS, Buyer wishes to purchase, and Seller wishes to sell, in accordance with the terms and
conditions set forth herein, the real and personal property and fixtures more particularly
described and defined herein as the Property.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Buyer and Seller (sometimes individually the “Party”, and sometimes
collectively the “Parties”) hereby agree as follows:
1. | PURCHASE AND SALE OF PROPERTY. |
In accordance with, and subject to, the terms and conditions hereinafter set forth, Seller
shall sell and convey to Buyer, and Buyer shall purchase and accept from Seller, that certain real
property consisting of approximately 727.22+/- acres of agricultural land on the Island and in the
County of Hawaii, State of Hawaii, described in the legal descriptions attached to the Title Report
(as defined below) (the “Land”), and the following (collectively, along with the Land, the
“Property”): (a) all rights, privileges and easements appurtenant to such Land; (b) all
plants, vines, trees and crops now or hereafter existing thereon; (c) all improvements and fixtures
on said Land, including, without limitation, any buildings, structures, irrigation equipment,
non-portable fencing, xxxxx, casings, pumping plants, pumping equipment, pipelines, levees, drain
lines, ditches and canals, sumps, ponds, storage, transport and drainage facilities; (d) all rights
(if any) to receive or produce water on said Land, including all ground-water pumping credits or
exchange pumping credits, permits, licenses, entitlements, water stock and any other ownership
interests (if any) in any water company and all rights (if any) to receive irrigation water,
including, without limitation, all water entitlements and allocations pertaining to water used by
or on said Land, to be transferred by deed, assignment or such other written instruments as may be
necessary or appropriate; (e) such agreements, contracts, licenses, leases and other rights as may
be assignable by Seller and as Buyer elects to assume under the provisions of this Agreement; (f)
all permits, licenses, approvals and authorizations issued by any governmental authority for the
benefit of the Property or the operation thereof; and (g) all personal property, if any, owned by
Seller located on the Land and used in connection therewith (the “Personal Property”).
2. | PURCHASE PRICE. |
2.1 Purchase Price. The purchase price (the “Purchase Price”) for the
Property is ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000), payable all in cash to Seller
as set forth below.
2.2 Payment of Purchase Price. In sufficient time to allow for the disbursement of
funds to the Seller on May 19, 2008, Buyer shall deposit into Escrow in immediately available funds
the Purchase Price, as adjusted by any prorations and additional fees payable by the Buyer, as
shown on the Settlement Statement for Buyer prepared by Escrow Holder. On May 19, 2008, Escrow
Holder shall deliver the Purchase Price to Seller, adjusted by any prorations, tax withholdings, or
additional fees payable by the Seller, as shown on the Settlement Statement for Seller as prepared
by Escrow Holder.
3. | TITLE MATTERS. |
3.1 Permitted Exceptions. Buyer acknowledges and confirms that Buyer has received the
preliminary title reports dated as of December 31, 2007 (order nos. 200800526 and 200800527) for
the Property, along with a copy of the documentation that may evidence or underlie any of the title
exceptions shown in Schedule B thereto (collectively, the “Title Report”) from Title
Guaranty of Hawaii, Inc. (the “Title Company”). By its execution of this Agreement, Buyer
agrees to accept title to the Property at the Close of Escrow subject to the following matters and
exceptions (collectively, the “Permitted Exceptions”): (a) liens for nondelinquent real
property taxes; (b) all matters and exceptions shown in Schedule B of the Title Report; (c) any
matters affecting the Property resulting from the Buyer’s acts or omissions; (d) all standard
printed matters and exceptions contained in the Owner’s Title Policy (as defined in Section 8.1
hereof); and (e) any facts, rights, interests or claims that could be ascertained by a physical
inspection of the Property, or that an accurate survey of the Property would disclose, including,
without limitation, any discrepancies or conflicts in boundary lines, shortages in area or
encroachments, except to the extent known to Seller and not disclosed to Buyer.
3.2 Monetary Liens. Notwithstanding anything to the contrary expressed or implied
herein, on or before the Close of Escrow, all trust deeds, mortgages, mechanic’s liens, financing
statements, and other monetary liens (other than liens for nondelinquent real property taxes)
(collectively, “Monetary Liens”), shall be removed as encumbrances on title to the
Property, and as exceptions to the Owner’s Title Policy for the Property, it being understood that
any and all such Monetary Liens have been disapproved by Buyer and are not Permitted Exceptions.
Furthermore, Seller shall not cause or allow any title matter not shown in the Title Report to
become of record prior to the Close of Escrow.
3.3 Gap Closing. Buyer and Seller have delivered to the Title Company a recordable
Memorandum of Agreement and Escrow Instructions for Purchase and Sale of Real Property and a
Memorandum of Acquisition Agreement (collectively, the “Memoranda”) and a Mutual Termination and
Release. The Title Company is hereby authorized and directed to record the Memoranda on May 19,
2008 and to record the Mutual Termination and Release on the Close of Escrow. Buyer and Seller
have also delivered to the Title Company an Indemnity Agreement, for the benefit of the Title
Company. In connection with its receipt of the Indemnity Agreement
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and recordation of the Memoranda, the Escrow Holder shall disburse to the Seller the Purchase
Price (adjusted as described in Section 2.2) on May 19, 2008, and the Title Company shall insure
title to the Property in accordance with the Title Company’s pro forma, which is to be updated as
of May 19, 2008.
4. | BUYER AND SELLER REPRESENTATIONS, ACKNOWLEDGEMENTS, AND AGREEMENTS. |
4.1 Due Diligence Materials. Seller represents that it has provided to Buyer one
complete and legible copy of any and all information and documents known to Seller that in any way
affect the Property or the use, operation, occupancy or possession thereof or title thereto
(collectively “Due Diligence Materials”), including, without limitation, any governmental
permits or licenses; any leases, easements, rights-of-way, contracts or agreements; any historical
financial information; any notices, claims or lawsuits pertaining to the Property; any surveys,
maps, aerial photographs or diagrams of the Land; and any environmental, soils or geological
reports, studies or notices, or results of investigations or assessments. In addition, Seller has
provided Buyer with access to and copies of such other of Seller’s books, records and files
pertaining to the Property as Buyer requested.
4.2 No Assigned and Assumed Rights and Obligations. The Parties have determined that
there were no rights or obligations included in the Due Diligence Materials that Seller would
assign to Buyer and that Buyer would assume from Seller.
4.3 Tax-Deferred Exchange. Either Party may, at its option, elect to have the
Property transferred as part of a tax-deferred exchange pursuant to U.S. Internal Revenue Code
Section 1031. In order to facilitate such an exchange, each Party shall cooperate with the other
Party, shall execute, acknowledge and deliver any and all documents that the requesting Party may
reasonably request, and shall deal with any intermediary as the requesting Party may direct;
provided however, that no Party shall be required to (a) incur any escrow or title cost or any
other out-of-pocket cost or expense in connection with the exchange; (b) take title to any property
other than the Property; or (c) incur any additional material liability as the result of said
cooperation, and each Party’s right and ability to enforce each and every term of this Agreement
against the other Party, including, without limitation, any rights with respect to warranties and
representations, shall not be in any way materially diminished or impaired by said cooperation.
4.4 Seller’s Activities Prior to the Close of Escrow. From the date of this Agreement
through the Close of Escrow, Seller shall (a) operate and maintain the Property in a manner that is
consistent with its past practices and in accordance with Seller’s normal course of operation; (b)
maintain Seller’s current insurance coverages; and (c) not knowingly take or permit to be taken any
action that would render any of the representations or warranties of Seller set forth in this
Agreement incorrect or untrue as of the Close of Escrow; and Seller shall not (i) enter into any
new agreements or obtain any new permits or licenses that affect the Property, or (ii) amend,
extend or terminate any existing agreements or permits or licenses that affect the Property, or
(iii) take (or fail to take) any action if such action (or failure) might alter the existing land
use and zoning or legally allowed uses of the Property.
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4.5 Reporting Person. Seller and Buyer hereby designate Escrow Holder as the
"Reporting Person” for the transaction pursuant to Section 6045(e) of the Internal Revenue Code and
the regulations promulgated thereunder and agree to execute such documentation as is reasonably
necessary to effectuate such designation.
4.6 Delivery of Property Materials. Seller shall deliver to Buyer at Close of Escrow,
outside of Escrow, all keys to the Property in the possession of Seller, its employees, agents or
contractors; all booklets, manuals, warranties and other documents relating to the Property or any
part thereof (if any and if in Seller’s possession); and originals of such Due Diligence Materials
as Buyer may reasonably request.
5. | POSSESSION AND RISK OF LOSS. |
Possession of the Property shall be delivered to Buyer at Close of Escrow. Risk of loss with
respect to the Property shall remain with Seller until the Close of Escrow, but shall pass to Buyer
at the Close of Escrow.
6. | SELLER’S REPRESENTATIONS AND WARRANTIES. |
Seller hereby warrants, represents and covenants to Buyer (and no one else) as of the date of
execution of this Agreement and as of the Close of Escrow that:
6.1 Brokerage Fees. Seller has not engaged, and owes no fees, commissions or the like
to, any broker, finder or similar agent in connection with this Agreement or the transactions
contemplated by this Agreement.
6.2 Foreign Person. Seller is not a “foreign person” as that term is defined in
Section 1445 of the Internal Revenue Code of 1986, as amended, and applicable regulations, and is
not a “nonresident person” as that term is used in Section 235-68 of the Hawaii Revised Statutes,
as amended.
6.3 Seller Authority. (a) Seller has full legal right and authority to enter into
this Agreement and the other documents to be delivered by Seller hereunder, and to consummate the
transactions contemplated herein; (b) each natural person executing this Agreement on behalf of
Seller is authorized to do so; and (c) this Agreement constitutes a valid and legally binding
obligation of Seller enforceable in accordance with its terms, subject to bankruptcy and similar
laws of general application with respect to creditors.
6.4 No Violation. Neither the execution or delivery of this Agreement nor the
performance of Seller’s obligations under this Agreement violate, or will violate, any contract,
agreement or instrument to which Seller is a party or by which Seller or the Property is bound or
result in or constitute a violation or breach of any judgment, writ, order, injunction or decree
applicable to Seller or the Property.
6.5 Litigation. There are no actions, suits, claims or other proceedings that have
been served against Seller or the Property, or that to Seller’s knowledge, are otherwise pending,
contemplated or threatened against Seller or the Property, that could materially and adversely
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affect the Property, its use or value, or Seller’s ability to perform its obligations as and
when required under the terms of this Agreement.
6.6 Consent. No consent of any third party or governmental agency or governmental
authority is required for the execution of this Agreement by Seller or the consummation by Seller
of the transactions contemplated hereby.
6.7 Condemnation. Seller has received no notice of any pending condemnation or
similar proceeding or assessment by any governmental agency affecting the Property or any part
thereof, and, to Seller’s knowledge, no such proceeding is pending, contemplated or threatened.
6.8 Compliance. The Property is in full compliance with all applicable permits,
approvals, licenses, certificates, covenants, conditions, restrictions, leases, easements and
agreements of any kind or nature affecting the Property.
6.9 Adverse Title or Possession Claims. Except for Permitted Exceptions, Seller is
the legal fee simple title holder of the Property and has good, marketable and insurable title to
the Property, free and clear of all occupancies, liens, encumbrances, claims, covenants, leases,
licenses, conditions, restrictions, easements, rights of way, options, judgments or other matters.
There have been no tenants and there are no tenants that have been using or have had the right to
use the Property during the period in which the Seller owned the Property, and the Seller has not
executed any leases, license agreements, or rental agreements, and has collected no revenues in
connection with its ownership of the Property.
6.10 Environmental Matters. To Seller’s actual knowledge, except as disclosed in any
written environmental reports in the Due Diligence Materials, no portion of the Land is filled
land, and there are no underground or other storage tanks on the Property and there are no
Hazardous Materials (as defined below) in existence on, under or about the Property in violation of
any Environmental Laws (as defined below). For purposes of this Agreement, “Hazardous Materials”
means inflammable materials, petroleum products, explosives, radioactive materials, asbestos,
polychlorinated biphenyls, lead, lead-based paint and any other substance or material that is
listed in or regulated under any applicable federal, state or local laws pertaining to the
protection of health or the environment, including, without limitation, the Federal Water Pollution
Act, as amended (33 U.S.C. § 1251 et seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C. § 6901 et seq.), and the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. § 1801 et seq.) (collectively, “Environmental Laws”).
6.11 Due Diligence Materials Complete. The Due Diligence Materials constitute all of
the information and documents that affect the Property in any material way, and contain no material
misstatements or omissions.
6.12 Seller Bankruptcy; Insolvency. Seller has not (a) made a general assignment for
the benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of
any involuntary petition by Seller’s creditors; (c) suffered the appointment of a receiver to take
possession of all, or substantially all, of Seller’s assets; (d) suffered the attachment or other
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judicial seizure of all, or substantially all, of Seller’s assets; (e) admitted in writing its
inability to pay its debts as they come due; or (f) made an offer of settlement, extension or
composition to its creditors generally.
6.13 No Use or Zoning Changes. Seller has not been advised of any plan, study or
effort by any governmental agency or authority that would materially adversely affect the present
use or zoning of any portion of the Property or that would modify or realign any street or highway
adjacent to the Property.
6.14 Land Access to Public Road. The Land is not land-locked, and has legal and
perpetual access to a public two-way road.
6.15 No Assessments or Deferred Taxes. To Seller’s actual knowledge, there are no
outstanding, pending or proposed special assessments or special real property related taxes,
including any deferred money payments or performances on account of any subdivision or change in
zoning or land use classification, affecting the Land or any acts or omissions of Seller that would
result in the imposition of any deferred or “roll back” taxes with respect to the Land.
6.16 Payment of Taxes. Seller has filed, on a timely basis, all tax returns and
estimates for all years and periods for which such tax returns and estimates were due with respect
to income or revenue generated by its ownership of the Property (including, without limitation,
returns related to the Hawaii Gross Excise Tax), and all such returns and estimates were prepared
in the manner required by applicable law. Each such tax return properly reflected, and did not
understate, the gross revenue, the taxable income, and the liability for taxes of the Seller in the
relevant taxation period covered by the tax return. The Seller has paid in full all taxes that are
(or were) due and payable by the Seller with respect to the operations of the Seller on the
Property. The Seller has not ever received written notice from any governmental agency or
authority in a jurisdiction where the Seller does not currently file tax returns to the effect that
the Seller is or may be subject to taxation by that jurisdiction arising out of the operations of
the Seller on the Property.
6.17 Improvement Contracts. There are no outstanding contracts for the construction
of improvements on the Land that have not been fully paid for, there are no mechanics’ or
materialmen’s liens applicable to the Land arising from any labor or materials furnished to the
Land, and Seller has not authorized any actions on the Land that would give rise to the right to a
mechanic’s or materialmen’s lien on the Land.
6.18 Plant and Equipment. To Seller’s actual knowledge, the electrical, plumbing,
irrigation, heating and cooling systems and appliances, if any, in the improvements on the Land are
in good working order; the roofs, structural components and foundations of the improvements, if
any, on the Land are performing the function for which they were intended and are not in need of
repair; there are no unusual drainage conditions or evidence of mold, mildew or excessive moisture
adversely affecting the Land and improvements thereon; and the electrical, telephone, gas, water
and waste disposal systems serving the Land and the improvements are adequate, not in need of
repair and are performing the functions for which there were intended.
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6.19 Wetlands. To Seller’s actual knowledge, there are no areas of the Land subject
to wetlands regulation or the jurisdiction of any federal, state or county agency regulating and
controlling wetlands, and no such agency has made a determination that any wetland exists on the
Land.
6.20 Historic Sites. To Seller’s actual knowledge, the Land does not contain and
buildings, structures, objects, districts, areas or sites of prehistoric, historic or archeological
interest or significance of any site eligible for listing on the National Register of Historic
Places.
6.21 Endangered Species. To Seller’s actual knowledge, the Land does not contain any
aquatic life, wildlife or plant defined as or include in the definition of “endangered species”
under any federal, state, or local laws, ordinances or regulations relating to the conservation,
preservation, management or protection of any endangered species or critical habitat upon which any
endangered species depends.
6.22 Disability Access. To Seller’s actual knowledge, all improvements within the
Land comply with all governmental requirements regarding access of disabled persons including,
without limitation, Titles III and V of the Americans With Disabilities Act of 1990, 42 U.S.C. § §
12101, et seq. or any other similar federal, state or local laws or ordinances and regulations
promulgated thereunder.
7. | BUYER’S REPRESENTATIONS AND WARRANTIES. |
Buyer hereby warrants, represents and covenants to Seller (and no one else) as of the Opening
of Escrow and the Close of Escrow that:
7.1 Brokerage Fees. Buyer has not engaged, and owes not fees, commissions or the like
to, any broker, finder or similar agent in connection with this Agreement or the transactions
contemplated by this Agreement.
7.2 Buyer’s Authority. (a) Buyer has full legal right and authority to enter into
this Agreement and to consummate the transactions contemplated herein; (b) each natural person
executing this Agreement on behalf of Buyer is authorized to do so; and (c) this Agreement
constitutes a valid and legally binding obligation of Buyer enforceable in accordance with its
terms, subject to bankruptcy and similar laws of general application with respect to creditors.
7.3 Buyer Bankruptcy; Insolvency. Buyer has not (a) made a general assignment for the
benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of any
involuntary petition by Buyer’s creditors; (c) suffered the appointment of a receiver to take
possession of all, or substantially all, of Buyer’s assets; (d) suffered the attachment or other
judicial seizure of all, or substantially all, of Buyer’s assets; (e) admitted in writing its
inability to pay its debts as they come due; or (f) made an offer of settlement, extension or
composition to its creditors generally.
8. | BUYER’S CONDITIONS. |
Buyer’s obligation to complete the purchase of the Property as contemplated herein is subject
to each of the conditions contained in this Article 8.
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8.1 Owner’s Title Policy. Upon the Close of Escrow, Escrow Holder shall be in a
position to deliver to Buyer a standard coverage owner’s policy of title insurance (including a
non-imputation endorsement re Xx. Xxxx, and such access, subdivision, zoning and other endorsements
as Buyer may reasonably request) with a liability limit equal to the Purchase Price, insuring
record title to the Property in Buyer, subject only to the Permitted Exceptions (the “Owner’s
Title Policy”), as of the pro forma issued to Buyer on and as of May 19, 2008.
9. | INDEMNIFICATION. |
9.1 Indemnification by Seller. Seller shall indemnify, protect, defend (with counsel
reasonably acceptable to Buyer) and hold Buyer and Buyer’s officers, directors, members, employees
and agents harmless from and against any and all claims, fines, assessments, demands, liabilities,
losses, damages, costs and expenses (including, but not limited to, interest, awards, judgments,
penalties, reasonable attorneys’, accountants’ or other professionals’ fees, court or other
proceeding fees or costs, or expenses of every kind and nature whatsoever) all the foregoing
collectively “Losses”) that Buyer shall incur or suffer and that arise or result from or
relate to any breach of any representation, warranty, covenant, agreement or obligation of Seller
contained in this Agreement.
9.2 Indemnification by Buyer. Buyer shall indemnify, protect, defend (with counsel
reasonably acceptable to Seller) and hold Seller and Seller’s officers, directors, members,
employees and agents harmless from and against any and all Losses that Seller shall incur or suffer
and that arise or result from or relate to any of the following: (a) any breach of any
representation, warranty, covenant, agreement or obligation of Buyer contained in this Agreement;
(b) any and all statutory or common law liens or other encumbrances for labor or materials
furnished in connection with any tests, samplings, studies, surveys or other activities as Buyer
may conduct on or with respect to the Property; or (c) any injury to or death of persons or damage
to the Property or any other property occurring in, on or about the Property as a result of Buyer’s
acts or omissions.
9.3 Survival of Indemnities. The indemnities set forth in Sections 9.1 and 9.2 above
shall survive the Closing and shall not be merged into the Deed (as defined in Section 10.5.1).
9.4 Matters Involving Third Parties.
If any third party shall notify a Party (the “Indemnified Party”) with respect to any
matter which may give rise to a claim for indemnification against the other Party (the
“Indemnifying Party”) under this Article 9, then the Indemnified Party shall promptly
notify the Indemnifying Party thereof in writing; provided, however, that no delay on the part of
the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is
prejudiced.
10. | ESCROW AND ESCROW INSTRUCTIONS; CLOSING DELIVERIES. |
10.1 Escrow. The purchase and sale of the Property shall be conducted through an
escrow (the “Escrow”) with Title Guaranty Escrow Services, Inc. (“Escrow Holder”)
at the Escrow Holder’s address indicated in Section 11.11 hereof.
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10.2 Opening of Escrow. The opening of Escrow (the “Opening of Escrow”) shall
occur when Escrow Holder possesses a copy or copies of this Agreement executed in counterparts or
otherwise by the Parties. Escrow Holder’s signature below shall constitute the agreement of Escrow
Holder to serve hereunder in such capacity, and Escrow Holder shall insert the date of the Opening
of Escrow where indicated at the end of this Agreement. Escrow Holder shall promptly return to
each Party counterparts of this Agreement executed by the other Party and Escrow Holder.
10.3 Further Escrow Instructions. The Parties shall promptly execute and deliver to
Escrow Holder such additional instructions, resolutions and other documents as Escrow Holder may
reasonably require that are not inconsistent with or contrary to the provisions hereof. In the
event of any inconsistency or conflict between said instructions and the provisions of this
Agreement, this Agreement shall control.
10.4 Closing Date. The “Closing Date” shall mean the date that the Close of
Escrow occurs, which date shall occur on May 30, 2008. The Close of Escrow shall mean the date on
which the Warranty Deed is recorded by the Title Company.
10.5 Documents. On or before the Business Day immediately prior to the Closing Date,
the Parties shall do the following:
10.5.1 Seller Deposits. Seller shall deposit into Escrow the following documents
(each fully executed and, as to the Deed and the Recordable Documents, notarized): (a) a full
warranty deed (the “Deed”); (b) a certificate (“Seller’s Certificate”), in form and
substance reasonably satisfactory to the Buyer, stating that (1) each representation and warranty
of Seller contained in this Agreement (including any exhibit, schedule, or other agreement or
document delivered pursuant hereto) is true and correct in all respects on and as of the Closing
Date with the same effect as if such representation and warranty had been made on and as of the
Closing Date, and (2) Seller has performed in all material respects all agreements required by this
to be performed by it prior to or at the Closing; (c) a certificate satisfying requirements of
Section 1445 of the Internal Revenue Code (the “FIRPTA Certificate”), an executed
Conveyance Tax Certificate (Form P-64A) for the Deed, a certificate certifying whether Seller is or
is not a “nonresident person”, as that term is used in Section 235-68 of the Hawaii Revised
Statutes, as amended (the “HARPTA Certificate”), and a bulk sale or transfer certificate
for Seller issued by the State of Hawaii under Section 237-43 of the Hawaii Revised Statutes, as
amended (the “Tax Clearance Certificate”); (d) such other documents and affidavits as may
be reasonably required by the Escrow Holder or by the Title Company in connection with the issuance
of the Owner’s Title Policy; (e) such evidence of Seller’s authority to enter into and consummate
this transaction as the Escrow Holder may reasonably require; (f) Memorandum of Agreement and
Escrow Instructions for Purchase and Sale of Real Property, Memorandum of Acquisition Agreement,
and Mutual Termination and Release of Acquisition Agreement (collectively, the “Recordable
Documents”); and (g) such other documents as Buyer may reasonably require to effectuate the
transfer.
10.5.2 Buyer’s Deposits. Buyer shall deposit into Escrow the following funds and the
following documents (each fully executed, and as to the Recordable Documents, notarized): (a) the
Balance of the Purchase Price, plus funds for such prorations and additional
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charges are required by the Escrow Officer; (b) a certificate (“Buyer’s Certificate”), in form
and substance reasonably satisfactory to the Seller, stating that (1) each representation and
warranty of Buyer contained in this Agreement (including any exhibit, schedule, or other agreement
or document delivered pursuant hereto) is true and correct in all respects on and as of the Closing
Date with the same effect as if such representation and warranty had been made on and as of the
Closing Date, and (2) Buyer has performed in all material respects all agreements required by this
to be performed by it prior to or at the Closing; (c) Buyer’s notice to Seller and Escrow Holder
that the Property (including, without limitation, the Title Report or any other aspect of title) is
satisfactory to Buyer in all aspects; (d) the Recordable Documents; and (e) such other documents
and affidavits as may be reasonably required by the Escrow Holder or the Title Company in
connection with the issuance of the Owner’s Title Policy.
10.6 Closing Costs. The costs of consummating the purchase and sale contemplated
herein (collectively, the “Closing Costs”) shall be paid through Escrow as follows: (a)
Seller and Buyer shall each pay one-half (1/2) of Escrow Holder’s fees and expenses; (b) Seller shall
pay the real-estate documentary transfer taxes arising in connection with the recordation of the
Deed, and the costs of the Owner’s Title Policy (collectively, the “Title Policy Costs”);
(c) Buyer shall pay all recording fees; and (d) Buyer shall pay for any title insurance costs for
any endorsements or other coverages that Buyer may request of the Title Company and that are beyond
those customarily included in a standard coverage owner’s policy of title insurance. Except as
specifically set forth in this Section or elsewhere in this Agreement, each Party shall pay its own
fees and expenses incurred by it or on its behalf in connection with this Agreement.
10.7 Prorations. Real-estate taxes and assessments shall be prorated between Buyer
and Seller at and as of the Close of Escrow based upon the most recent available information in the
tax assessor’s office. Rents, fees and other items of income or expense from the Property shall
also be prorated between Buyer and Seller at and as of the Close of Escrow. On or before five (5)
Business Days prior to the Closing Date, Escrow Holder shall advise Buyer and Seller of Escrow
Holder’s estimate of the net credit to Buyer or Seller, as the case may be, resulting from such
prorations. If such prorations result in a net credit to Seller, Buyer shall deposit in Escrow in
immediately available funds, along with the Balance of the Purchase Price, the amount of such
credit estimated by Escrow Holder. If the tax proration is based on tax bills for the calendar year
immediately preceding the year of the Close of Escrow and the actual amount of taxes for the year
of the Close of Escrow differs from the amount upon which the prorations were based, then Buyer and
Seller, promptly upon receipt by either of them of the notice or xxxx for the taxes actually
pertaining to the year of the Close of Escrow, shall between themselves (and outside Escrow) adjust
the prorations made at the Close of Escrow to accurately reflect the taxes actually payable for the
year of the Close of Escrow, with the taxes to be computed with the maximum discount for prompt
payment, if any. Seller shall be solely responsible for any and all taxes payable for any period
preceding the Close of Escrow, including but not limited to any “roll back” or other taxes assessed
or payable after the Close of Escrow with respect to any ownership or actions on the Property for
any period prior to Close of Escrow; provided, however, that Buyer (not Seller) shall be entirely
responsible for any increase in post-Close of Escrow real-property taxes that may occur by reason
of the sale of the Property to Buyer by reason of any reappraisal of the Property for tax purposes
or otherwise.
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10.8 Close of Escrow. As soon as:
(a) Seller has deposited into Escrow all of the documents specified in Section 10.5.1 hereof;
(b) Buyer has deposited into Escrow (i) the Balance of the Purchase Price, (ii) any additional
funds required to pay the estimated net credit to Seller for the required prorations, (iii) any
additional funds required to pay Buyer’s share of the Closing Costs, and (iv) the documents
specified in Section 10.5.2 hereof; and
(c) As soon as Escrow Holder is prepared to deliver to Buyer, upon recordation of the Deed,
the Owner’s Title Policy insuring title to the Property subject only to the Permitted Exceptions,
Escrow Holder shall do the following:
(i) | Cause the Title Company to record the Deed in the Bureau of Conveyances of the State of Hawaii; | ||
(ii) | deliver to Buyer Seller’s Certificate, the FIRPTA Certificate, the Tax Clearance Certificate, copies of the HARPTA Certificate and the Conveyance Tax Certificate, the Owner’s Title Policy and any other documents which Seller is to deliver and Buyer is to receive hereunder through Escrow at the Close of Escrow; | ||
(iii) | deliver to Seller Buyer’s Certificate and any other documents which Buyer is to deliver and Seller is to receive hereunder through Escrow at the Close of Escrow; | ||
(iv) | deliver, record or file any other documents deposited into Escrow as required by such documents or hereunder; | ||
(v) | disburse to Seller, by wire transfer to an account designated by Seller in writing, the Purchase Price less (A) the amount of any net credit to Buyer resulting from the prorations required hereunder and (B) Seller’s share of the Closing Costs; | ||
(vi) | disburse to the Title Company the Title Policy Costs; | ||
(vii) | disburse Escrow Holder’s fees to Escrow Holder; | ||
(viii) | disburse to Buyer any funds remaining in Escrow after the foregoing payments; and | ||
(ix) | obtain for each Party conformed copies of all documents recorded in connection with the transactions contemplated hereunder. |
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Escrow Holder’s performance of the foregoing actions shall be deemed to occur simultaneously. The
taking of such actions and the moment thereof are hereinabove and hereinafter called the “Close
of Escrow”. The Close of Escrow shall occur immediately following the closing of the
transactions described in that certain Acquisition Agreement (the “Acquisition Agreement”)
dated as of the date hereof, by and among Buyer and the shareholders of Hawaiian Sweet, Inc., a
California corporation, and CW Hawaii Pride LLC, a Hawaii limited liability company.
11. | GENERAL PROVISIONS. |
11.1 Attorneys’ Fees. Should either Party institute any action or proceeding to
enforce any provision of this Agreement, or for damages by reason of an alleged breach of any
provision of this Agreement, or for a declaration of rights hereunder, or for any other relief
arising out of or related to the transaction contemplated by this Agreement, the prevailing Party
in any such action shall be entitled to receive from the other Party all costs and expenses,
including its reasonable attorneys’ and expert witness fees, incurred by the prevailing Party in
connection with such action or proceeding.
11.2 Binding Effect; Assignment. Either Party may assign all or any portion of its
rights and obligations under this Agreement to anyone, including, without limitation, any officer,
director, shareholder, partner, manager, member, trustee, executor, administrator, subsidiary,
parent company other related entity or other fiduciary of the assigning Party, and this Agreement
shall be binding upon and inure to the benefit of each of the Parties and their respective
successors and assigns; provided, however, that no assignment of a Party’s rights or obligations
hereunder (whether in whole or in part) shall relieve such assigning Party of its obligations
hereunder.
11.3 Time of Essence. Time is of the essence of this Agreement.
11.4 Days and Business Days. The term “day” means a calendar day, and the
term “Business Day” means any day other than a Saturday, Sunday or legal holiday under the
laws of the United States or the State of Hawaii. Any period of time specified in this Agreement,
which would otherwise, end upon a non-Business Day shall be extended to, and shall end upon, the
next following Business Day.
11.5 Entire Agreement; Modifications. This Agreement constitutes the entire agreement
between the Parties hereto pertaining to the subject matter hereof and supersedes all prior
negotiations, agreements and understandings of the Parties with respect to the subject matter
hereof, including, without limitation, the letter agreement dated October 25, 2007 between the
Parties. This Agreement may not be modified, amended, supplemented or otherwise changed except by
a writing executed by all of the Parties.
11.6 Further Assurances. Each Party and Escrow Holder shall from time to time
execute, acknowledge and deliver such further instruments and perform such additional acts as the
other Party or Escrow Holder may reasonably request to effectuate the intent of this Agreement.
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11.7 Titles and Headings. Titles and headings of Sections in this Agreement are for
convenience of reference only and shall not affect the construction of any provision of this
Agreement.
11.8 Execution in Counterparts. This Agreement, and any amendment hereto, may be
executed in two or more counterparts, each of which when so executed and delivered shall be deemed
an original, but all of which taken together shall constitute but one and the same instrument. To
expedite the transaction contemplated herein, signatures appearing on e-mailed, faxed or telecopied
transmissions may be used in place of original signatures on this Agreement. Seller and Buyer
intend to be bound by the signatures on the e-mailed, faxed or telecopied transmission, are aware
that the other Party will rely on the e-mailed, faxed or telecopied signatures, and hereby waive
any defenses to the enforcement of the terms of this Agreement based on the fact that a signature
may be in e-mailed, faxed or telecopied form.
11.9 Governing Law. This Agreement shall be deemed to be a contract made under the
laws of the State of Hawaii and for all purposes shall be governed and construed in accordance with
the laws of said State (without regard to such State’s conflicts-of-law rules or laws).
11.10 Exhibits. Each of the exhibits referred to herein and attached hereto is
incorporated herein by this reference.
11.11 Notices. Except as expressly provided to the contrary herein, any notice,
consent, report, demand, document or other item to be delivered to Buyer, Seller or Escrow Holder
hereunder shall be deemed delivered and received (a) when given in writing and personally delivered
to the person designated below for the applicable party; (b) one (1) day after delivery to Federal
Express or other nationally known “next-day” delivery service with delivery charges prepaid
for delivery the following Business Day to the person designated below for the applicable party;
(c) upon delivery by the United States Postal Service, first-class registered or certified mail,
postage prepaid, return receipt requested, at the time of delivery shown upon such receipt; or (d)
when received by facsimile with confirmation of transmission by the sender; and in any such case
shall be delivered to the address or addresses indicated for such party below, and/or to such other
person or address as such party may from time to time by written notice designate to the other:
If to Buyer:
|
Calavo Growers, Inc. | |
1100-X Xxxxxxxx Xxxx | ||
Xxxxx Xxxxx, XX 00000 | ||
Attn: Art Bruno, Chief Financial Officer | ||
Fax No.: (000) 000-0000 | ||
Tel. No.: (000) 000-0000 |
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with a copy to:
|
TroyGould | |
1800 Xxxxxxx Xxxx Xxxx | ||
Xxx Xxxxxxx, XX 00000-0000 | ||
Attn: Xxxxxx Xxxx, Esq. | ||
Fax No.: (000) 000-0000 | ||
Tel. No.: (000) 000-0000 | ||
And | ||
Carlsmith Ball LLP | ||
P.X. Xxx 000 | ||
Xxxxxxxx, XX 00000-0000 | ||
Attn: Xxxxxx Xxxxxx, Esq. | ||
Fax No.: (000) 000-0000 | ||
Tel. No.: (000) 000-0000 | ||
If to Seller:
|
Xxxxx X. Xxxx | |
C/o Calavo Growers, Inc. | ||
1100-X Xxxxxxxx Xxxx | ||
Xxxxx Xxxxx, XX 00000 | ||
Fax No.: (000) 000-0000 | ||
Tel. No.: (000) 000-0000 | ||
If to Escrow Holder:
|
Title Guaranty Escrow Services, Inc. | |
230 Xxxxx Xxxxxx | ||
Xxxxxxxx, XX 00000 | ||
Attn: Xxxxxxx Paulo, Asst. Vice President, Escrow Officer | ||
Fax No.: (000) 000-0000 | ||
Tel. No. (000) 000-0000 | ||
Escrow No.: A8-101-0270 |
11.12 Invalidity of Certain Provisions. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of any other provision
hereof.
11.13 Survival. All covenants, obligations, indemnities, rights, remedies,
representations and warranties contained in this Agreement shall survive the Close of Escrow, and
shall not be merged into, or otherwise extinguished by the Deed, it being understood that such
covenants, obligations, indemnities, rights, remedies, representations and warranties shall control
in the event that any of them may conflict (or be inconsistent) with any implied covenants in the
Deed.
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11.14 Jurisdiction; Hawaiian Courts. BUYER AND SELLER HEREBY CONSENT AND SUBMIT TO
THE EXCLUSIVE JURISDICTION OF ALL FEDERAL AND STATE COURTS IN THE STATE OF HAWAII FOR PURPOSES OF
ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. EACH PARTY AGREES THAT SUCH COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.15 Parties-in-Interest. All the conditions and covenants of this Agreement are
imposed only for the benefit of the Parties hereto and their successors and assigns as provided
herein. No other person shall have standing to require satisfaction or performance under any of
the terms hereof, and no such person shall be deemed, under any circumstances, to be a beneficiary
of the conditions and covenants of this Agreement, or have a right of subrogation hereunder unless
the Parties hereto expressly waive this Section and agree to same.
11.16 Fair Construction. This Agreement shall be given a fair and reasonable
construction in accordance with the intention of the Parties without regard to the Party
responsible chiefly for the drafting of this Agreement. All references to Section numbers in this
Agreement are references to Sections of this Agreement.
11.17 Other Definitions. Terms defined in any other part of this Agreement shall have
the defined meanings wherever capitalized herein. As used in this Agreement, the terms
“herein,” “hereof” and “hereunder” refer to this Agreement in its entirety
and are not limited to any specific sections; and the term “person” means any natural
person, other legal entity, or combination of natural persons and/or other legal entities.
Wherever appropriate in this Agreement, the singular shall be deemed to refer to the plural and the
plural to the singular, and pronouns of certain genders shall be deemed to comprehend either or
both of the genders.
11.18 Nonwaiver. Unless otherwise expressly provided herein, no waiver by Seller or
Buyer of any provision hereof shall be deemed to have been made unless expressed in writing and
signed by the waiving Party. No delay or omission in the exercise of any right or remedy accruing
to Seller or Buyer upon any breach under this Agreement or otherwise shall impair such right or
remedy or be construed as a waiver of any such right, remedy or breach theretofore or thereafter
occurring. The waiver by Seller or Buyer of any breach of any term, covenant or condition herein
stated shall not be deemed to be a waiver of any other breach, or of a subsequent breach of the
same or any other term, covenant or condition herein contained. Except as otherwise expressly
provided herein to the contrary, (a) all rights, powers, options, or remedies afforded to either
Seller or Buyer hereunder or by law shall be cumulative and not alternative, and (b) the exercise
of one right, power, option, or remedy shall not bar other rights, powers, options or remedies
allowed herein or by law.
11.19 Recording. The Parties agree that the Recordable Documents described in Section
10.5.1 and 10.5.2 shall be recorded.
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IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be executed and delivered
by their respective representatives, thereunto duly authorized, as of the date first above written.
BUYER: CALAVO GROWERS, INC. |
||||
By: | /s/ Xxxxxx Xxxxxxx | |||
Xxxxxx Xxxxxxx, | ||||
Chairman of the Special Committee of the Board of Directors | ||||
SELLER: |
||||
/s/ Xxxxx X. Xxxx | ||||
Xxxxx X. Xxxx, as Trustee of the Xxxxx X. and Xxxx Xxxxxxxx Xxxx 1993 Revocable Trust | ||||
/s/ Xxxx Xxxxxxxx Xxxx | ||||
Xxxx Xxxxxxxx Xxxx, as Trustee of the Xxxxx X. and Xxxx Xxxxxxxx Xxxx 1993 Revocable Trust | ||||
ESCROW HOLDER: TITLE GUARANTY ESCROW SERVICES, INC. |
||||
By: | /s/ Xxxxxxx Paulo | |||
Name: | Xxxxxxx Paulo | |||
Title: | Asst. Vice President, Escrow Officer |
|||
Escrow No.: A8-101-0270 | ||||
Date of Opening of Escrow: May 19, 2008.
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