EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXX NURSERIES, INC.
AND
COSTA NURSERY FARMS, LLC
DATED AS OF
OCTOBER 2, 2006
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered
into as of October 2, 2006 (the "Closing Date") by and between Xxxxx Nurseries,
Inc., a California corporation ("Seller"), and Costa Nursery Farms, LLC, a
Florida limited liability company ("Purchaser").
RECITALS
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A. Seller desires to sell certain inventory and assets, and the
goodwill related thereto, of Seller to Purchaser, and Purchaser desires to
purchase certain inventory and assets, and the goodwill related thereto, of
Seller from Seller upon consummation of the transactions contemplated by this
Agreement, all pursuant to the terms and conditions set forth herein.
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 in Section 3.1 hereof),
Purchaser agrees to purchase from Seller, and Seller agrees to sell, assign,
transfer and deliver to Purchaser all of Seller's right, title and interest in
and to the inventory, vehicles, trailers, farm equipment, racks and other assets
described below and listed on Schedules 1.1(a), 1.1(b), 1.1(c), 1.1(d) and
1.1(e) hereto, and the goodwill related thereto (collectively, the "Purchased
Assets"):
(a) INVENTORY. All inventory items and related
materials and supplies described on SCHEDULE 1.1(A) (i) located on the real
property to be subleased to Purchaser pursuant to the terms of the Sublease
Agreement (as defined herein) other than those inventory items and related
materials and supplies located on such property which are tagged or otherwise
identified as being sold to Pure Beauty Farms, Inc. ("Pure Beauty"), (ii)
located at other areas of the Xxxxx Miami Facility which are specifically tagged
or otherwise identified as being sold to Purchaser, and (iii) owned by Seller
and located at The Home Depot stores listed on SCHEDULE 1.1(A) (such stores are
referred to as "The Home Depot Stores") after the close of business on the
Closing Date (the items listed in the preceding subclauses (i), (ii) and (iii)
are referred to collectively, as the "Inventory"). Notwithstanding any physical
inventory count that Seller and/or Purchaser may have conducted prior to the
Closing or any provision herein to the contrary, Purchaser acknowledges that
inventory items and other products have been sold by Seller for Seller's benefit
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in the ordinary course of Seller's business up to and through the close of
business on the Closing Date and 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 Purchaser. For purposes of this Agreement, the
terms "Inventory" and "Purchased Assets" shall not include any inventory items
or other products sold by Seller up to and through the close of business on the
Closing Date.
(b) VEHICLES. The vehicles and trailers listed and
described on SCHEDULE 1.1(B).
(c) FARM EQUIPMENT. The farm equipment listed and
described on SCHEDULE 1.1(C).
(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").
1.2 EXCLUDED ASSETS. Seller shall not sell, assign, transfer
or convey to Purchaser, and Purchaser shall not purchase, any inventory,
property, item or asset of the 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)
and 1.1(e) including, without limitation, any accounts receivable of Seller (the
"Excluded Assets"). Purchaser acknowledges that Seller is selling other assets
to another third party on or about the date hereof and Purchaser has no rights
to such other assets or any of the Excluded Assets.
1.3 ASSUMED LIABILITIES. At the Closing, Purchaser shall
assume all liabilities and obligations of Seller arising from or relating to
returns of Inventory or other products purchased from The Home Depot Stores
which occur after the Closing without regard to when such Inventory or other
products were purchased (the "Assumed Liabilities"). Except as set forth in the
preceding sentence, Purchaser shall not assume any liabilities or obligations of
Seller.
2. PURCHASE PRICE; PAYMENT TERMS.
2.1 PURCHASE PRICE. The aggregate purchase price for the
Purchased Assets (the "Purchase Price") shall be the sum of Six Hundred
Seventy-Three Thousand Eight Hundred Thirty-Three Dollars and Fifty-Three Cents
($673,833.53) (the "Net Purchase Price") and One Million Seven Hundred Twenty
Thousand Nine Hundred Ninety-Six Dollars and Thirty-Three Cents ($1,720,996.33)
(the "Payoff Amount").
2.2 PAYMENT OF PURCHASE PRICE. At the Closing, Purchaser shall
pay the Net Purchase Price and the Payoff Amount by wire transfer in immediately
available funds to the accounts designated by Seller as set forth on SCHEDULE
2.2.
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2.3 SALES, USE AND TRANSFER TAXES. Purchaser shall be
responsible for any documentary transfer taxes and any sales, use or other
taxes, duties, fees and governmental exactions imposed by reason of the transfer
of the Purchased Assets provided for hereunder and any deficiency, interest or
penalty asserted with respect thereto. Notwithstanding the foregoing sentence,
Purchaser shall not be responsible for any income, capital gain or other similar
tax incurred by Seller in connection with such transfer.
2.4 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated in relation to the Purchased Assets, as set forth on SCHEDULE 2.4
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.
3. CLOSING.
3.1 CLOSING. The closing of the purchase and sale of the
Purchased Assets shall be consummated (the "Closing") at 11:59 P.M. (Florida
time) on the Closing Date (the "Closing") via facsimile, telephone, mail and
other mutually acceptable means of communication and delivery. 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, delivered and executed. At the Closing, Purchaser acknowledges receipt of
the Purchased Assets.
3.2 DELIVERIES OF SELLER. At the Closing, Seller shall deliver
or cause to be delivered to Purchaser:
(a) a Xxxx of Sale duly executed by Seller in
substantially the form of EXHIBIT A attached
hereto;
(b) title to those vehicles and trailers listed on
SCHEDULE1.1(B) to the extent that Seller has possession of and can locate and
deliver such titles at Closing; and
(c) a sublease agreement in substantially the form of
EXHIBIT B attached hereto (the "Sublease Agreement") duly executed by Seller.
3.3 DELIVERIES OF PURCHASER.
(a) At the Closing, Purchaser shall deliver or cause
to be delivered the following to Seller (or such other parties as may be
designated by Seller or specified in the Sublease Agreement):
(i) the Purchase Price, as provided in
Section 2.2 hereof;
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(ii) the Sublease Agreement duly executed
by Purchaser together with all rents, deposits and other monies required to be
paid by Purchaser under the Sublease Agreement; and
(iii) proof of insurance in amounts and
form acceptable to Seller naming Seller as an additional insured.
4. REPRESENTATIONS AND WARRANTIES.
4.1 REPRESENTATIONS AND WARRANTIES REGARDING SELLER. Seller
hereby represents and warrants to Purchaser, as of the date hereof, except as
set forth on the disclosure schedules attached hereto ("SELLER'S SCHEDULE OF
EXCEPTIONS"), as follows:
(a) EXISTENCE. Seller validly exists as a corporation
in good standing under the laws of the State of California.
(b) AUTHORITY TO SELL PURCHASED ASSETS. Seller has
all requisite corporate power and authority to sell the Purchased Assets to
Purchaser as contemplated hereby, and such sale of the Purchased Assets has been
duly and validly authorized by all necessary corporate action on the part of
Seller.
(c) TITLE TO PURCHASED ASSETS. At Closing, Seller
will deliver good and marketable title to the property included in the Purchased
Assets, free and clear of all liens, claims and encumbrances except for any lien
claim or encumbrance created by Purchaser or otherwise resulting from
Purchaser's actions.
(d) NON-CONTRAVENTION. None of the execution,
delivery or performance by Seller of this Agreement does or will (a) contravene
or conflict with Seller's articles of incorporation or bylaws, or (b) contravene
or conflict with any provision of any law, regulation, judgment, injunction,
order or decree binding upon Seller.
(e) BROKERS' FEES. No broker, finder or similar agent
has been employed by or on behalf of Seller in connection with this Agreement or
the transactions contemplated hereby, and Seller has not entered into any
agreement, arrangement or understanding of any kind with any person or entity
for the payment of any brokerage commission, finder's fee or any similar
compensation in connection with this Agreement or the transactions contemplated
hereby.
(f) EXECUTION AND DELIVERY. This Agreement has been
duly executed and delivered by Seller and constitutes a legal, valid and binding
agreement of Seller enforceable against Seller in accordance with its terms,
except to the extent such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, relating to or limiting creditors' rights generally and (b) 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 4.1, SELLER
MAKES NO OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AND SELLER HEREBY
DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY WITH RESPECT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY. THE PURCHASED ASSETS ARE USED AND BEING SOLD "AS IS - WHERE IS" AND THE
SELLER HEREBY DISCLAIMS THE WARRANTY OF MERCHANTABILITY AND FITNESS FOR USE.
4.2 REPRESENTATIONS AND WARRANTIES REGARDING PURCHASER.
Purchaser hereby represents and warrants to Seller, as of the date hereof, as
follows:
(a) EXISTENCE. Purchaser validly exists as a limited
liability company in good standing under the laws of the State of Florida.
(b) AUTHORITY TO PURCHASE PURCHASED ASSETS. Purchaser
has all requisite power and authority to purchase the Purchased Assets from
Seller as contemplated hereby, and such purchase of the Purchased Assets has
been duly and validly authorized by all necessary action on the part of
Purchaser.
(c) REQUIRED CONSENTS. None of the execution,
delivery or performance by Purchaser 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 Purchaser of this Agreement does or will (a)
contravene or conflict with Purchaser's Articles of Organization or Operating
Agreement, or (b) contravene or conflict with any provision of any law,
regulation, judgment, injunction, order or decree binding upon Purchaser.
(e) BROKERS' FEES. No broker, finder or similar agent
has been employed by or on behalf of Purchaser in connection with this Agreement
or the transactions contemplated hereby, and Purchaser has not entered into any
agreement, arrangement or understanding of any kind with any person or entity
for the payment of any brokerage commission, finder's fee or any similar
compensation in connection with this Agreement or the transactions contemplated
hereby.
(f) EXECUTION AND DELIVERY. This Agreement has been
duly executed and delivered by Purchaser and constitutes a legal, valid and
binding agreement of Purchaser enforceable against Purchaser in accordance with
its terms, except to the extent such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, relating to or limiting creditors' rights generally and (b)
general principles of equity (whether considered in an action in equity or at
law).
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(g) INSPECTION AND ACKNOWLEDGEMENT. Purchaser has
fully inspected to its satisfaction all of the Purchased Assets. Purchaser
acknowledges that (i) the Purchased Assets are being sold "AS IS - WHERE IS,"
and (ii) except as specifically provided for in Section 4.1 herein, Seller is
making no representation or warranty regarding the Purchased Assets or the
transactions contemplated herein.
5. ADDITIONAL AGREEMENTS.
5.1 NON-DISCLOSURE. Purchaser 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.
5.2 UNIFORM PRODUCT CODES. To the extent transferable, Seller
hereby grants to Purchaser, for the period commencing on the Closing and ending
the earlier of June 30, 2007 or such time as the Inventory tagged with Seller's
universal product codes ("UPCs") prior to the Closing has been sold or otherwise
disposed of by Purchaser, the royalty-free (other than the consideration to be
paid hereunder), non-exclusive, non-transferable, restricted right and limited
license to use Seller's UPCs solely on tags attached by Seller to the Inventory
prior to the Closing and solely for the purpose of selling such Inventory
through The Home Depot Stores. In addition to the other provisions in this
Agreement, Purchaser agrees to indemnify, defend and hold harmless Seller for
any cost, liability, claim, or expense arising out of Purchaser's use of
Seller's UPCs.
5.3 LIMITED USE OF SELLER'S NAME. Seller hereby grants to
Purchaser, for the period commencing on the Closing and ending the earlier of
June 30, 2007 or such time as all Inventory tagged with Seller's tags prior to
the Closing has been sold or otherwise disposed of by Purchaser, the
royalty-free (other than the consideration to be paid hereunder), non-exclusive,
non-transferable, restricted right and limited license to use the name "Xxxxx,"
"Xxxxx Nurseries" or similar derivations thereof solely on tags attached by
Seller to the Inventory prior to the Closing and solely for the purpose of
selling such Inventory through The Home Depot Stores. The parties acknowledge
that Seller is the exclusive owner of all rights in the name "Xxxxx," "Xxxxx
Nurseries" or similar derivations thereof and that nothing in this Agreement
confers any rights to Purchaser therein except as specifically set forth in the
previous sentence.
5.4 ACCESS TO INFORMATION AND DIRECTION OF FUNDS. After the
Closing, Seller shall have access at reasonable times, upon reasonable notice
and subject to reasonable requirements related to confidentiality, to copies of
the reports and any remittance advice provided by The Home Depot to Purchaser
relating to the sale of Inventory or any plants, nursery products or other
products by The Home Depot Stores for purposes of determining that sales are
properly credited to either Purchaser or Seller as contemplated by this
Agreement. Likewise, Purchaser shall have access at reasonable times, upon
reasonable notice and subject to reasonable requirements related to
confidentiality, to copies of the reports and any remittance advice provided by
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The Home Depot to Seller relating to the sale of Inventory or any plants,
nursery products or other products by The Home Depot Stores for purposes of
determining that sales are properly credited to either Purchaser or Seller as
contemplated by this Agreement. After the Closing, Purchaser agrees to promptly
remit to Seller any funds improperly received by Purchaser from The Home Depot
relating to sales prior to and through the close of business on the Closing Date
of any plants, nursery products or any other products owned by Seller. After the
Closing, Seller agrees to promptly remit to Purchaser any funds improperly
received by Seller from The Home Depot relating to sales after the close of
business on the Closing Date of Inventory or any other products owned by
Purchaser. The parties agree to attempt to work reasonably together to resolve
any questions or disputes which may result from the misapplication of funds
which they may receive from The Home Depot for furthering the purposes and
intent of this Section 5.4.
5.5 ACCESS TO PREMISES. Purchaser agrees, without cost, after
the Closing, to permit Seller and a reasonable number of Seller's employees,
agents and representatives access to the premises leased to Purchaser pursuant
to the Sublease Agreement in order to perform certain remedial and cleanup
actions and for other post-closing activities.
5.6 STORAGE OF THE TRUCK AND TRAILER. Seller owns a truck and
trailer (the "Truck and Trailer") that was involved in an accident which is the
subject of pending litigation. Purchaser agrees to permit Seller to store,
without cost, the Truck and Trailer where it is currently located on the
premises leased to Purchaser pursuant to the Sublease Agreement and Purchaser
agrees not to disturb or move the Truck and Trailer as Purchaser acknowledges
that the Truck and Trailer are evidence in a legal proceeding and agrees to
treat them as such.
5.7 TITLE TO VEHICLES. Other than with respect to vehicles or
trailers leased by Seller, Seller agrees to deliver to Purchaser, within a
reasonable time after the Closing, those titles to vehicles and trailers listed
on SCHEDULE 1.1(B) which Seller was unable to deliver at Closing pursuant to
Section 3.2(b) hereof. With respect to those vehicles or trailers listed on
SCHEDULE 1.1(B) which are leased by Seller, Seller agrees to use reasonable
efforts to cooperate with and assist Purchaser in promptly obtaining title from
the respective lessors of such vehicles and trailers. Promptly after receiving
the titles to the vehicles and trailers pursuant to Section 3.2(b) and promptly
after receiving the additional titles to the vehicles and trailers pursuant to
this section, Purchaser agrees to register such trailers and vehicles in
Purchaser's own name with the Department of Motor Vehicles or comparable
governmental agency in the State of Florida and to provide Seller with evidence
reasonably satisfactory to Seller of such registration. Purchaser agrees to
indemnify and hold Seller harmless from any costs, claim, liability or other
expense resulting from any delay in Purchaser's registration of the vehicles and
trailers in Purchaser's own name and to name Seller as an additional insured on
Purchaser's insurance for such vehicles and trailers until such registration.
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5.8 NUMBERING OF RACKS; SALE OF ADDITIONAL RACKS. Promptly
after the Closing, Purchaser agrees to sequentially number the Initial Racks
sold to Purchaser pursuant to Section 1.1 above. In addition to the Initial
Racks being sold to Purchaser pursuant to Section 1.1 above, Purchaser agrees to
acquire from Seller those additional racks (each such rack consisting of a base
and one or more shelves) which are either (i) located at The Home Depot Stores
at the time of Closing and retrieved by Purchaser, or (ii) delivered by Seller
to Purchaser after the Closing and prior to December 31, 2006 (such additional
racks to be purchased by Purchaser are referred to as the "Additional Racks").
On the 15th and the last day of each month following the Closing until December
31, 2006, Purchaser 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 either gathered by Purchaser at The Home Depot Stores or
delivered by Seller to Purchaser and 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").
Purchaser shall continue to keep a record of the Additional Racks, including the
number of shelves on each such Additional Rack, which it gathers or 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 acquired by Purchaser, Purchaser agrees to sequentially
number such Additional Racks. Title for the Additional Racks will not transfer
from Seller to Purchaser until such time as the Additional Racks Purchase Price
for such Additional Racks has been received by Seller. The Additional Racks are
being sold to Purchaser hereunder are used, have incurred wear and tear and are
being sold subject to the limitations set forth in Section 4.1(g) and Section
4.2(g) above. In no event will Purchaser be required to purchase (i) a
non-functional Additional Rack as reasonably determined by the parties, or (ii)
more than an aggregate of 2,050 Initial Racks or Additional Racks.
5.9 NO ACCEPTANCE ON SELLER'S BEHALF. Purchaser shall not
accept delivery of goods shipped to, ordered by or intended for Seller.
Purchaser 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 Purchaser and to the extent that Seller has paid for any such
goods accepted by Purchaser, Purchaser shall promptly reimburse Seller for any
such amounts.
5.10 SUBSTITUTION OF VEHICLES AND TRAILERS. The parties
acknowledge that some of the vehicles and trailers listed on Schedule 1.1(b) of
this Agreement which are being sold to Purchaser are not at Seller's Miami
facility at the time of Closing and have not been viewed by Purchaser (the
"Unseen Vehicles and/or Trailers"). To the extent an Unseen Vehicle and/or
Trailer contains an obvious, significant and material visual defect or is
otherwise obviously and visually significantly and materially damaged when it is
returned after the Closing to the premises being leased by Purchaser and
Purchaser reasonably objects to such significantly and materially defective or
damaged Unseen Vehicle and/or Trailer, then the parties agree to work in good
faith to attempt to find a comparable replacement as a substitute from the other
vehicles and trailers Seller still has in its possession at its Miami facility
after the Closing. If the parties agree to substitute a comparable vehicle
and/or trailer for a damaged or defective Unseen Vehicle and/or Trailer pursuant
to this Section, Seller shall deliver title for such replacement vehicle and/or
trailer to Purchaser and Purchaser shall (i) deliver to Seller any title
received by Purchaser for the damaged or defective Unseen Vehicle and/or
Trailer, and (ii) promptly register the substituted vehicle and/or trailer in
Purchaser's name. The parties agree that Purchaser's obligations under Section
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5.7 of this Agreement shall apply to any substituted vehicle and/or trailer as
if such vehicle and/or trailer had been listed on Schedule 1.1(b) at the
Closing. Purchaser's failure to object to any damaged Unseen Vehicle and/or
Trailer by the close of business on Wednesday, October 4, 2006, shall be deemed
acceptance of such Unseen Vehicle and/or Trailer. Notwithstanding the foregoing,
Purchaser acknowledges that the Purchased Assets, including without limitation,
the Unseen Vehicles and or Trailers are used, have incurred wear and tear, and
are being sold subject to the limitations set forth in Section 4.1(b) and
Section 4.2(b).
5.11 ALLOCATION OF ASSETS BETWEEN PURCHASER AND PURE BEAUTY.
Purchaser acknowledges that certain of the schedules hereto list assets being
sold to Purchaser and other assets being sold to Pure Beauty without any
specific allocation of individual assets between Purchaser and Pure Beauty. To
the extent that any such schedule does not specifically allocate individual
assets between Purchaser and Pure Beauty, Purchaser acknowledges and agrees that
such allocation will be determined between Purchaser and Pure Beauty without the
involvement of Seller. Purchaser agrees that Seller shall have no responsibility
with respect to the allocation of such assets between Purchaser and Pure Beauty,
including without limitation, any failure of such parties to agree to the
allocation and/or possession of such assets. Purchaser further agrees to
indemnify, defend and hold harmless Seller, from and against any and all claims,
liabilities, losses, damages or injuries together with costs and expenses,
including reasonable legal fees, arising out of, related to or resulting from
the allocation between Purchaser and Pure Beauty of the assets listed on the
schedules hereto.
6. SURVIVAL AND INDEMNIFICATION.
6.1 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 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.
6.2 SELLER'S INDEMNIFICATION. Seller hereby agrees to
indemnify, defend and hold Purchaser 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, arising out of,
related to or resulting from (i) any incorrectness or incompleteness in the
representations and warranties made by Seller in this Agreement, (ii) any breach
in any material respect by Seller, unless waived by Purchaser, of any covenant
or agreement of Seller contained in or arising out of this Agreement, and (iii)
any liability or obligation relating to, resulting from or arising out of the
Purchased Assets arising before the Closing (except Assumed Liabilities).
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6.3 PURCHASER'S INDEMNIFICATION. Purchaser hereby agrees to
indemnify, defend and hold Seller and its shareholders, officers, employees,
directors, agents and affiliates (the "Purchaser Indemnitees") harmless from and
against any and all claims, liabilities, losses, damages or injuries together
with costs and expenses, including reasonable legal fees, arising out of or
resulting from (i) any incorrectness or incompleteness in the representations
and warranties made by Purchaser in this Agreement, (ii) any breach in any
material respect by Purchaser, unless waived by Seller, of any covenant or
agreement of Purchaser contained in or arising out of this Agreement, (iii) any
liability or obligation relating to, resulting from or arising out of the
Assumed Liabilities or the Purchased Assets accruing on or after the Closing or
the Purchaser's business.
6.4 LIMITATIONS ON INDEMNIFICATION.
(a) The indemnification obligations of either Seller
or Purchaser in subclause (i) of Section 6.2 or subclause (i) of Section 6.3,
respectively, shall not exceed an aggregate amount equal to Two Hundred Fifty
Thousand Dollars ($250,000) (the "Cap Amount").
(b) Notwithstanding the indemnification obligations
arising in subclause (i) of Section 6.2 and subclause (i) of Section 6.3,
neither Seller nor Purchaser shall be liable for the first Twenty-Five Thousand
Dollars ($25,000) (the "Threshold Amount") in aggregate damages sustained by
Purchaser Indemnitees or Seller Indemnitees, respectively, pursuant to the
indemnification obligations arising in subclause (i) of Section 6.2 and
subclause (i) of Section 6.3; provided Purchaser 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
Purchaser 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 any indemnification
obligation of Seller or Purchaser arising as a result of fraud, willful breach
or intentional misrepresentation.
6.5 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 days after receipt of the above-referenced
notice to undertake, through counsel of its choosing (subject to the consent of
the indemnified party) 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 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,
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settle or compromise the claim in its exclusive discretion at the expense of the
indemnifying party. Nothing contained in this Section 6.5 shall be construed as
a limitation on the right of any party to indemnification under this Agreement.
7. EMPLOYEES AND EMPLOYEE BENEFITS
7.1 EMPLOYMENT. At the request of Purchaser, Seller has
communicated Purchaser's offer of employment to certain employees of Seller and
SCHEDULE 7.1 lists those employees of Seller that the parties believe have
indicated an intent to accept Purchaser's offer of employment (such employees
are referred to herein as the "Identified Employees"). Purchaser is responsible
for all obligations and liabilities arising out of Purchaser's offers to or
employment of the Identified Employees. Purchaser agrees that, for purposes of
all employee benefit plans, policies and employee fringe benefit programs,
including vacation policies, of Purchaser 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.
7.2 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 7.1 of this Agreement.
8. GENERAL PROVISIONS.
8.1 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:
(a) If to Seller:
Xxxxx Nurseries, Inc.
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx, CFO
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With a copy to:
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 Purchaser, addressed to:
Costa Nursery Farms, LLC
00000 X.X. 000 Xxxxxx
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
8.2 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.
8.3 EXPENSES. Each party will bear the costs of its agents,
attorneys, accountants, investment bankers, travel, lodging and entertainment
and associated expenses except as provided in this Agreement.
8.4 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.
8.5 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.
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8.6 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. 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.
8.7 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.
8.8 RECITALS, SCHEDULES AND ANNEXES. The recitals, exhibits
attached hereto and Seller's Schedule of Exceptions 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 Schedule of Exceptions shall, should the existence of the fact or item
be relevant to any other section of Seller's Schedule of Exceptions, 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 Schedule of
Exceptions 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 Schedule of Exceptions 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.
8.9 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.
8.10 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 Florida.
8.11 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.
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8.12 ARBITRATION.
(a) Any controversy, claim or dispute involving the
parties (or their affiliated persons) directly or indirectly concerning this
Agreement or the subject matter hereof, including, without limitation, any
questions concerning the scope and applicability of this Section 8.12 shall be
finally settled by arbitration held in Miami-Dade County, Florida by one
arbitrator in accordance with the rules of commercial arbitration then followed
by the American Arbitration Association or any successor to the functions
thereof, provided that the arbitrator shall be (i) a Florida Bar licensed
attorney with no less than fifteen (15) years experience in the active practice
of law with a focus on commercial transactions, or (ii) a former circuit court
or appellate court judge who served for no less than ten (10) years. The
arbitrator shall apply Florida law in the resolution of all controversies,
claims and disputes and shall have the right and authority to determine how his
or her decision or determination as to each issue or matter in dispute may be
implemented or enforced. Any decision or award of the arbitrator shall be final
and conclusive on the parties to this Agreement and their respective affiliates,
and there shall be no appeal therefrom other than from gross negligence or
willful misconduct.
(b) The parties hereto agree that any action to
compel arbitration pursuant to this Agreement must be brought in the appropriate
court in Miami-Dade County, Florida and in connection with such action to compel
the laws of the State of Florida shall control. Application may also be made to
such court for confirmation of any decision or award of the arbitrator, for an
order of the enforcement and for any other remedies which may be necessary to
effectuate such decision or award. The parties hereto hereby consent to the
jurisdiction of the arbitrator and of such court and waive any objection to the
jurisdiction of such arbitrator and court.
(c) Notwithstanding the foregoing provisions of this
Section 8.12, nothing contained herein shall require arbitration of any issue
arising under this Agreement for which injunctive relief is successfully sought
by any party hereto. Any action, suit or other proceeding initiated by Seller or
Purchaser against any other party for injunctive relief or to enforce this
Section 8.12 or any decision or award of the arbitrator must be brought in any
Federal or state court in Miami-Dade County, Florida having jurisdiction over
the subject matter thereof as the party bringing such action, suit or proceeding
shall elect. Seller and Purchaser hereby submit themselves to the jurisdiction
of any such court and agree that service of process on them in any such action,
suit or proceeding may be effected by the means by which notices are to be given
to it under this Agreement.
[Signature Page Follows]
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INDEX TO EXHIBITS
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
"PURCHASER"
COSTA NURSERY FARMS, LLC
a Florida limited liability company
By: /S/ XXXX X. XXXXX
------------------------------------
Xxxx X. Xxxxx, Manager
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