EXHIBIT 6.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made as of the 27th day
of October, 2000, by and between AWG, LTD., a Nevada corporation ("AWG"), and
XXXXXXX X. XXXXX AND XXXX XXXXX AS TRUSTEES OF THE XXXXX FAMILY TRUST
("Purchaser").
R E C I T A L S
A. AWG owns and desires to sell to Purchaser certain real property
comprised of approximately fifty three (53) acres located in Napa County
commonly referred to as Accessor's Parcel Number 00-000-00 (the "Napa Parcel").
B. AWG currently owns and operates a wine production and sales business
under the name "Andretti Winery" on the Napa Parcel (the "Business").
C. Purchaser desires to purchase from AWG, and AWG desire to sell to
Purchaser, the Napa Property and certain improvements thereon as set forth more
specifically in Section 1.1 herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
ARTICLE 1
PURCHASE, SALE AND LEASE
1.1 Purchase and Sale of Real Property, Improvements and Gross Revenue
Participation; Discounts by Purchaser.
(a) The following shall occur at the Closing:
(i) AWG shall sell and Purchaser shall purchase all
of the real property in the County of Napa, State of California,
referred to as Assessor's Parcel No. 00-000-00 and specifically
described in Exhibit "A" hereto, together with all of the buildings and
structures on such real property (including, but not necessarily
limited to, the vineyard house, storage barns, tasting room, guest
house) and all easements, rights of way, water rights, appurtenances
and other claims or rights appurtenant or incidental to such real
property (the "Property"). At the Closing, AWG shall convey good and
marketable title free of any liens, encumbrances, leases, easements,
restrictions, rights, covenants and conditions except the matters (the
"Permitted Exceptions") shown as exceptions (other than deeds of trust,
mortgages, financing statements or other liens except liens for current
taxes not yet due and payable) in Preliminary Report No. ________ dated
as of __________________, 2000 (the "Preliminary Report") issued by
First
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American Title Company of Napa (the "Title Company"), to the Purchaser
by a duly executed and acknowledged grant deed. AWG shall fully pay,
perform, discharge and release of record all deeds of trust, mortgages,
financing statements and liens (including any prepayment or other
charges due on account of such releases) except for current taxes not
yet due and payable, affecting the Property. Notwithstanding anything
herein to the contrary, the Property shall not include any personal
property, equipment, wine or other inventory or any tradename of AWG
(the "Excluded Property").
(ii) Purchaser and AWG shall execute an agreement to
lease approximately three (3) acres of the Napa Parcel back to AWG (the
"Lease"). The leased three (3) acre portion of the Property shall
include the vineyard house, tasting room, back barn, storage units and
the supplemental living quarters (the "Leased Premises"). The term of
the Lease will be ten (10) years with two separate five (5) year AWG
options to renew on terms and conditions which represent the lower of
fair market at the time of exercise of the option to renew or the
continuation of the then exiting Lease rate terms. The rent during the
first term of the Lease shall be twelve percent (12%) of Purchaser's
Invested Capital in the Leased Assets. Initially, Purchaser shall be
deemed to have invested two million five hundred thousand dollars
($2,500,000) in Leased Assets as a part of the Purchase Price. Such
invested capital shall increase in the event any capital improvements
or repairs are made by Purchaser as a result of a requirement under the
Lease or by applicable law or pursuant to Purchaser's good faith
determination that a capital improvement or repair is necessary or
desirable. Prior to any capital improvements or repairs to the Leased
Premises, Purchaser agrees to discuss such improvements and/or repairs
with AWG. Purchaser shall have the sole right to construct a wine
production and storage facility under the existing Napa County Use
Permit relating to the Property but such facility (which will be built
by Purchaser when and if Purchaser determines it is necessary to do so)
shall be built on the Property outside of the Leased Premises and costs
incurred by Purchaser in constructing such facility shall not be deemed
capital invested in the Leased Premises. Rent shall be payable monthly
(so that 1% of the Invested Capital in the Leased Assets shall be paid
each month). Rent payable during the initial term of the Lease shall be
increased annually by a fraction (if larger than zero) which has as its
numerator the Consumer Price Index for the San Francisco Bay Area
during July of the adjustment year and as its denominator the Consumer
Price Index for that area during July, 2000, provided however, this
increase shall not exceed 3.5% per annum. The Lease shall be a
triple-net lease providing that AWG pays all insurance, taxes,
maintenance and other expenses in any way related to the Leased
Property and its use. The Lease shall contain all customary provisions
including AWG's agreement to maintain the Leased Premises in good
condition, to comply with applicable law and permits, to promptly pay
sums when due, and so forth.
(iii) Purchaser shall purchase from AWG the right to
receive five percent (5%) of AWG's gross revenue from the leases
Premises, including
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tasting room and hospitality sales, and all other revenue excluding
grape or bulk wine sales, and the sale of wine, including internet
sales, by AWG to wholesalers, retailers or distributors (the "Gross
Revenue Participation"). The Gross Revenue Participation shall be paid
to Purchaser with respect to each year in accordance with the terms of
the Lease. The Gross Revenue Participation shall terminate if the Lease
terminates for any reason without being extended.
(iv) Within 18 months following the Closing Purchaser
agrees to obtain conceptual drawings for an approximate 24,000 square
foot winery on the Property and apply for an amendment to the current
use permit to allow for annual production of approximately 240,000
gallons of wine. Purchaser agrees that approximately 120,000 gallons of
this total will be reserved for the making of wine for AWG labels.
Actual construction of the winery will commence upon mutual agreement
between AWG and Purchaser.
(b) The following shall occur after the Closing:
(i) Purchaser shall provide bottling and other
productions services to AWG at a meaningful discount, the amount of
which shall be mutually agreed in writing.
(ii) Purchaser shall procure and sell grapes to AWG
for AWG wine production at a meaningful discount, the amount of which
shall be mutually agreed in writing.
1.2 Purchase Price. Subject to the terms and conditions of this
Agreement, at the closing, the aggregate purchase price to be paid by Purchaser
to AWG for the Property and Gross Revenue Participation shall be Six Million
Seven Hundred Fifty Thousand dollars ($6,750,000) (the "Purchase Price").
1.3 Payment. Purchaser shall pay the Purchase Price to AWG in cash or
certified funds at the Closing.
ARTICLE 2
LIABILITIES OF AWG
2.1 No Assumption of Liabilities. It is expressly understood and agreed
that the Purchaser does not and shall not assume nor shall it be liable for any
liability, obligation, or claim against AWG of any kind or nature, at any time
existing or asserted, whether or not accrued, whether fixed, contingent or
otherwise, whether known or unknown, and whether or not recorded on the books
and records of AWG, arising out of or by reason of this or any other transaction
or event occurring prior or subsequent to the Closing, including, but not
limited to, operation of the Business on the Leased Premises. AWG shall pay or
make adequate provision for the payment of all of the liabilities of AWG of
every kind and nature arising from or related to the Property, Leased Premises
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or Business and AWG shall indemnify Purchaser, as provided by Section 10.2(a),
with respect to all such liabilities, obligations, and claims against AWG.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF AWG
AWG represents and warrants to Purchaser that, except as set forth in
the Schedules to this Agreement:
3.1 Organization and Authority. AWG (i) is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and (ii) has full corporate power and authority to own, sell and
lease the Property and operate the Business.
3.2 Power and Authority. AWG has the requisite corporate power to
execute, delivery and carry out all the terms and provisions of this Agreement
and to perform its obligations under this Agreement. On or prior to the Closing
Date, AWG shall have taken, or caused to have been taken, all necessary action
to authorize AWG's execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement
constitutes, and upon the execution and delivery by AWG of the other agreements
among the parties referred to herein and each instrument and certificate
delivered by AWG pursuant hereto, and assuming the due execution and delivery by
the other parties hereto, such agreements, instruments and certificates shall
constitute, the legal, valid and binding obligations of AWG, enforceable against
AWG in accordance with their respective terms, except as such obligations and
enforceability are limited by bankruptcy, insolvency and other similar laws of
general application affecting the enforcement of creditors' rights generally,
and by general equitable principles.
3.3 Absence of Conflicts. Other than any conflicts, violations or
defaults which would not reasonably be expected to have a material adverse
effect on the financial condition or results of operations of Purchaser's use of
the Property as a vineyard and winery or of the condition of the Property, taken
as a whole (a "Material Adverse Effect"), the execution and delivery of this
Agreement by AWG, the compliance by AWG with the terms and conditions hereof and
the consummation by AWG of the transactions contemplated hereby will not (a)
conflict with, or result in a violation of, any provision of the Certificate of
Incorporation or Bylaws of AWG, (b) constitute a default (with or without notice
or lapse of time or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a material benefit
under any contract or agreement, (c) to the best of AWG's knowledge, violate any
provision of, or require any consent, authorization or approval under, any law
or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to AWG, the
Property or the Business, or any governmental permit or license issued to AWG,
(d) conflict with or result in a breach of or require any consent, authorization
or approval (other than those required to be
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obtained which have been, or prior to the Closing will be, duly obtained by AWG)
under, any indenture, mortgage, lien, lease, agreement or instrument to which
AWG is a party or by which it or the Property are bound, (e) result in the
creation of any lien upon any of the Property, (f) give to any other natural
person, corporation, business trust, association, partnership, limited liability
company, joint venture, governmental entity or any other entity (each, a
"Person") any rights or interests (including rights of purchase, termination or
cancellation) under any contract, lien, or instrument affecting the Property or
Business or (g) otherwise adversely affect the contractual or other legal rights
or privileges of AWG as they relate to the Property or the Business. There
exists no contract or right of others relating to the Property, its crops, its
farming operations or otherwise which will be burdensome upon Purchaser or the
Property after the Closing or which would give any person a colorable claim
against Purchaser, the Property or any crop there from or use thereof.
3.4 Compliance with Laws. To the knowledge of AWG, except as listed or
described on Schedule 3.4, the Business has not been conducted and is not being
conducted, and AWG is not, nor has it been, in violation of, nor received any
notice of any alleged violation of, or any citation for noncompliance with, any
applicable federal, state or local statute, law, rule, regulation, ordinance,
permit, order, decree of, or other lawful obligation imposed by, any court or
governmental authority or instrumentality ("Law").
3.5 Insurance. The insurance policies currently carried by AWG provide
such coverage against risk of loss, with respect to the Business and Property,
in such amounts as are customary for ownership of property similar in value and
size of the Property and for companies of established reputation engaged in the
same or similar business as the Business and similarly situated.
3.6 Real Property. (a) AWG has title to the Property free and clear of
all liens other than (i) liens listed or described on Schedule 3.6, (ii) liens
and other encumbrances in the Property referred to in the Preliminary Report,
(iii) Permitted Exceptions, and (iv) easements, covenants, rights-of-way and
other encumbrances or restrictions, whether recorded or unrecorded, which do not
materially impair the continued use of the Property for the Business as
presently conducted.
(b) No condemnation proceedings are pending, or to the
knowledge of AWG, threatened, with respect to any of the Property, nor has any
such property been condemned.
(c) All improvements on the Property, including buildings,
vines, irrigation systems, xxxxx, xxxxx protection systems, utilities and roads
are in good condition and repair, free of disease and infestation, and do not
require any substantial repair or replacement as of the Closing.
(d) The varieties of vines and their sources are accurately
reflected in the books, records and reports of AWG (which Purchaser shall be
entitled to retain).
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3.7 Litigation. There are no lawsuits, claims or administrative or
other proceedings ("Legal Proceedings") pending or to the best of AWG's
knowledge threatened against AWG with respect to the Business or Property,
except for Legal Proceedings which, if determined adversely, would not
reasonably be expected to have a Material Adverse Effect. To the best of AWG's
knowledge, AWG is not in default under the terms of any judgment, order or
decree of any court, governmental body or agency or instrumentality thereof
("Governmental Entity") with respect to the Business or Property (collectively,
"Orders"). No neighbors, political organizations or other interested parties
have notified AWG that AWG's property, operations or practices are improper or
unlawful. For the purposes of this Agreement, "to the best of AWG's knowledge"
means the knowledge of Xxxx Xxxxxxxx.
3.8 Consents. All consents, authorizations and approvals of any
Governmental Entity or any arbitrator or any other person to or as a result of,
the consummation of the transactions contemplated by this Agreement that are
necessary in connection with the Business as currently conducted and as proposed
to be conducted ("Consents"), except for those Consents which would not
reasonably be expected to have a Material Adverse Effect, have been obtained by
AWG.
3.9 Environmental Matters. To the best of AWG's knowledge, except as
disclosed on Schedule 3.9:
(a) In respect of the Business and Property, AWG is in
compliance with all Environmental Laws, except for violations of Environmental
Laws that would not reasonably be expected to have a Material Adverse Effect;
(b) In respect of the Business and Property, AWG holds, and is
in compliance with, all permits required under Environmental Laws, except for
the absence of, of noncompliance with, such permits that would not reasonably be
expected to have a Material Adverse Effect;
(c) Prior to the date of this Agreement, AWG has not received
any written notice of the institution or pendency of any lawsuit, action,
proceedings, investigation or claim by any third party alleging environmental
liability arising from or relating to the conduct of the Business or ownership
of the Property, except for such matters that would not reasonably be expected
to have a Material Adverse Effect.
For purposes of this Section 3.9, the term "Environmental Laws" shall
mean any and all federal, state and local laws, statutes, ordinances, rules,
regulations, and any judicial or governmental order, decrees, rulings, actions
and agreements which are related to the contamination, remediation or protection
of human health and safety or the environment.
3.10 Permits, Licenses, Etc. To the best of its knowledge, AWG
possesses, and is operating in compliance with, all zoning and other franchises,
licenses, permits
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(including conditional use and other similar permits), certificates,
authorizations, rights and other approvals of governmental bodies, agencies and
instrumentalities thereof necessary to conduct the Business as currently
conducted (the "Permits"). Schedule 3.10 herein contains a true and complete
list of all Permits.
3.11 Brokerage Obligations. No broker, finder, investment banker or
financial advisor has acted directly or indirectly for AWG, nor has AWG incurred
any obligation to pay any brokerage or finder's fee or other commission or
similar fee in connection with the transactions contemplated by this Agreement.
AWG shall indemnify and hold harmless Purchaser with respect to any and all
claims for broker's fees, finder's fees, commissions, or similar fees arising
out of or related to the transactions under this Agreement.
3.12 Non-Foreign Status. AWG is not a "foreign person" within the
meaning of Section 1445 of the Code.
3.13 Material Misstatements or Omissions. No representation or warranty
of Seller made in this Agreement, nor any documents, statement, certificate or
other information furnished or to be furnished to Purchaser by or on behalf of
AWG pursuant hereto or in connection with the transactions contemplated hereby,
contains (or will when furnished contain) any untrue statement of a material
fact, or omits (or will then omit) to state a material fact necessary in order
to make the statement of facts made therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to AWG as follows:
4.1 Organization and Authority. Purchaser has full power and authority
to own and lease the Property.
4.2 Power and Authority. Purchaser has the requisite power to execute,
delivery and carry out all the terms and provisions of this Agreement and to
perform its obligations under this Agreement. This Agreement constitutes, and
upon the execution and delivery by Purchaser of the other agreements among the
parties referred to herein, and assuming the due execution and delivery by the
other parties hereto, such agreements, instruments and certificates shall
constitute, the legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their respective terms, except as such
obligations and enforceability are limited by bankruptcy, insolvency and other
similar laws of general application affecting the enforcement of creditors'
rights generally and by general equitable principles.
4.3 Absence of Conflicts. Other than any conflicts, violations or
defaults which would not reasonably be expected to have a material adverse
effect on the financial
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condition of Purchaser, the execution and delivery of this Agreement by
Purchaser, the compliance by Purchaser with the terms and conditions hereof and
the consummations by Purchaser of the transactions contemplated hereby will not,
in any material respect to the best of Purchaser's knowledge, violate any
provision of, or require any consent, authorization or approval under, any law
or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to Purchaser, or
any governmental permit or license issued to Purchaser.
4.4 Financial Capacity. Purchaser has cash on hand sufficient to
satisfy all of its obligations under this Agreement in accordance with its terms
and timing.
4.5 Brokerage Obligations. No broker, finder, investment banker or
financial advisor has acted directly or indirectly for Purchaser, nor has
Purchaser incurred any obligation to pay any brokerage or finder's fee or other
commission or similar fee in connection with the transactions contemplated by
this Agreement. Purchaser shall indemnify and hold harmless AWG with respect to
any and all claims for broker's fees finder's fees, commissions, or similar fees
arising out of or related to the transactions under this Agreement.
ARTICLE 5
COVENANTS OF AWG
5.1 Obtaining Approvals. AWG shall use commercially reasonable efforts
to obtain (and to cooperate with Purchaser in obtaining) any consent,
authorization or approval of, or exemption by, any Governmental Entity required
to be obtained or made by AWG in connection with the transactions contemplated
by this Agreement, and shall use commercially reasonable efforts to obtain prior
to the Closing each consent to, and authorization or approval of any other
person or entity to or as a result of, the consummation of the transactions
contemplated hereby. AWG shall during the term of the Lease maintain and if
necessary obtain all permits necessary or desirable under applicable law and
regulations to operate the Business on the Leased Premises and shall comply with
all the terms and conditions of such permits (including any law or regulation
upon which the permit is based.).
5.2 Tax Assessments and Audits. AWG shall furnish promptly to Purchaser
a copy of all notices of proposed assessment or similar notices or reports that
are received from any taxing authority and which relate to the operations of the
Business or ownership of the Property for periods ending on or prior to the
Closing Date.
5.3 Satisfaction of Conditions Precedent. AWG shall use its
commercially reasonable efforts to bring about the satisfaction of the
conditions precedent to the Closing set forth in Article 7.2 of this Agreement.
5.4 Due Diligence Period. Purchaser shall have a forty-five (45) day
period in which to conduct its due diligence review of the Property (the "Due
Diligence Period").
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In the event that Purchaser cannot conclude its due diligence review within said
forty five (45) day period, Purchaser may extend the review period for up to
another thirty (30) days by providing a written notice of extension to AWG prior
to expiration of the forty five (45) day period.
5.5 Access to Property. During the Due Diligence Period, AWG shall
permit, and shall cause its officers, key employees and advisors to permit,
Purchaser and its representatives and agents access to the Property during
normal business hours to perform appraisals, inspections and testing. AWG shall
fully cooperate with the Purchaser and its representatives. Purchaser shall
provide AWG prior notice of any testing to be conducted on the Property and
shall obtain the prior written approval of AWG of the locations and methodology
of such testing, which approval shall not be unreasonably withheld. Purchaser
shall pay all of the expenses for such tests. After making any such tests in
inspections, Purchaser agrees to restore the Property to its condition prior to
such tests and inspections.
5.6 Revenues. AWG shall use its best efforts to maximize the revenues
from the Leased Property and shall in no event divert revenue producing
activities or opportunities to places other than the Leased Property if AWG
could cause them to be located at the Leased Property. Purchaser shall be
entitled to reasonable notice to review the books and records of AWG and its
affiliates as they relate to revenue which are or could be from the Leased
Property. In any event, AWG shall provide Purchaser a monthly report (no later
than 30 days after each month) specifying the type and amount of revenue
generated from the Leased Property.
ARTICLE 6
COVENANTS OF PURCHASER
6.1 Compliance with Legal Requirements. Purchaser shall comply promptly
with all requirements that applicable law may impose upon it with respect to the
transactions contemplated by this Agreement, and shall cooperate promptly with,
and furnish information to, AWG in connection with any such requirements.
6.2 Obtaining Approvals. Purchaser shall use commercially reasonable
efforts to obtain any consent, authorization of approval of, or exemption by,
any Governmental Entity required to be obtained or made by Purchaser in
connection with the transactions contemplated by this Agreement.
6.3 Satisfaction of Conditions Precedent. Purchaser shall use its
commercially reasonable efforts to bring about the satisfaction of the
conditions precedent to Closing set forth in Article 7.1 of this Agreement.
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ARTICLE 7
CONDITIONS PRECEDENT TO CLOSING
7.1 Conditions if Purchaser. Notwithstanding any other provision of
this Agreement, the obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, at or prior
to the Closing, of the following conditions:
(a) No preliminary or permanent injunction or other order by
any United States Federal or state court or by any Governmental Entity that
prevents the consummation of the transactions contemplated by this Agreement
shall have been issued and remain in effect, nor shall any proceeding therefor
have commenced, nor shall any legislative action which would accomplish such a
result have been taken or instituted;
(b) The representations and warranties of AWG in this
Agreement shall be true and correct on and as of the Closing Date in all
material respects with the same effect as if made on the Closing Date and AWG
shall have complied in all material respects with all covenants and agreements
and satisfied all conditions to be performed on or prior to the Closing Date;
(c) Any approval, consent or waiting period required by any
governmental agency or authority necessary or material to the consummation of
the transactions contemplated hereby shall have been obtained or expired, as the
case may be;
(d) Purchaser shall have received a certificate of AWG
substantially in a form approved by Purchaser relating to satisfaction of 7.2;
and
(e) AWG shall have delivered to Purchaser each of the items
set forth in Section 8.3.
(f) Purchaser shall in its discretion have approved the
results of its Due Diligence investigation.
7.2 Conditions of AWG. Notwithstanding any other provision of this
Agreement, the obligations of AWG to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, at or prior to the Closing,
of each of the conditions set forth in subsections (a) and (c) of Section 7.1
hereof and the following conditions: The representations and warranties of
Purchaser AWG in this Agreement shall be true and correct on and as of the
Closing Date in all material respects with the same effect as if made on the
Closing Date and Purchaser AWG shall have complied in all material respects with
all covenants and agreements and satisfied all conditions to be performed on or
prior to the Closing Date.
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ARTICLE 8
THE CLOSING
8.1 Closing. The Closing shall take place at 000 Xxxxxx Xxxxxx, Xxxx,
Xxxxxxxxxx no later than 5:00 p.m. on December 12, 2000 (the "Closing Date").
The parties agree that they shall take such actions, including the delivery of
documents, in order to facilitate completion on the Closing Date of all of the
transactions contemplated hereby.
8.2 Deliveries of Purchaser. At the Closing, Purchaser shall deliver
the Purchase Price to AWG.
8.3 Deliveries of AWG. At the Closing, AWG shall deliver to Purchaser:
(i) all bills of sale, warranty and other deeds,
endorsements, assignments and other instruments as Purchaser may deem
reasonably necessary or appropriate to sell, convey, assign, transfer
and deliver to Purchaser good title to all the Property; and
(ii) those authorization documents evidencing AWG's
ability to enter into this Agreement and consummate the transactions
contemplated hereunder as well as any and all certificates required
under state and federal tax laws, as reasonably requested by Purchaser.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. Notwithstanding anything contained in this Agreement
to the contrary, this Agreement may be terminated any time prior to the Closing
Date:
(a) By the written mutual consent of Purchaser and AWG;
(b) By either Purchaser or AWG if the Closing has not occurred
on or before 5:00 p.m. on December 12, 2000; provided the failure to consummate
the transactions contemplated by this Agreement on or before such date did not
result from the failure by the party seeking termination of this Agreement to
fulfill any undertaking or commitment provided for in this Agreement that is
required to be fulfilled before the Closing; or
(c) By either Purchaser or AWG if there shall have been
entered a final, nonappealable order or injunction of any Governmental Entity
restraining or prohibiting the consummation of the transactions contemplated by
this Agreement or any material part thereof.
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9.2 Other Termination by AWG. This Agreement may be terminated at any
time prior to the Closing by AWG if: (a) any of the representations or
warranties of Purchaser contained in this Agreement shall prove to be inaccurate
or untrue in any material respect when made; (b) any obligation, term or
condition to be performed, kept or observed by Purchaser under this Agreement
has not been performed, kept or observed in any material respect at or prior to
the time specified in this Agreement; or (c) if any of the conditions in Section
7.2 have not been satisfied as of the Closing or if satisfaction of such a
condition becomes impossible (other than through the failure of AWG to comply
with its obligations under this Agreement) and AWG has not waived such condition
on or before the Closing.
9.3 Other Termination by Purchaser. This Agreement may be terminated at
any time prior to the Closing by Purchaser if: (a) any of the representations or
warranties of AWG contained in this Agreement shall prove to be inaccurate or
untrue in any material respect when made; (b) any obligation, term or condition
to be performed, kept or observed in any material respect at or prior to the
time specified in this Agreement; or (c) if any of the conditions in Section 7.1
have not been satisfied as of the Closing or if satisfaction of such a condition
becomes impossible (other than through the failure of Purchaser to comply with
its obligations under this Agreement) and Purchaser has not waived such
condition on or before the Closing.
9.4 Effect of Terminations. If either party terminates this Agreement
pursuant to any of Sections 9.1, 9.2 and 9.3, all rights and obligations of the
parties hereto shall terminate without any further liabilities of either party
to the other; provided that the provisions of the Agreement with respect to
confidentiality of information, public announcements, and brokerage and similar
fees, and all dispute resolution provisions shall survive termination; and
provided further that any termination of this Agreement pursuant to any of
Sections 9.1(b), 9.2 or 9.3 by reason of the failure to perform or comply with
any covenant or other agreement contained herein shall not relieve the breaching
or defaulting party of any liability to the other party for breach of contract.
Any termination of this Agreement by reason of any breach of any representation
or warranty shall not result in any liability for breach of contract to the
other party hereto (it being understood that the non-breaching party's sole and
exclusive remedy shall be to terminate this Agreement). Each party shall be
responsible for payment of all of its own costs and expenses incurred in
connection with this Agreement and the transactions contemplated herein.
9.5 Amendment and Waiver. This Agreement may be amended at any time
only by a written instrument executed by Purchaser and AWG. Any amendment
effected pursuant to this Section 9.5 shall be binding upon the parties hereto.
Compliance with or performance under any term, provision or condition of this
Agreement may only be waived in writing by Purchaser, if the waiver of the term,
provision or condition of this Agreement is sought against Purchaser, or by AWG,
if the waiver of the term, provision or conditions of this Agreement is sought
against AWG.
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ARTICLE 10
SURVIVAL AND INDEMNIFICATION
10.1 Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties hereto contained in this
Agreement or in any writing delivered pursuant to the provisions of this
Agreement or at the Closing shall survive any examination by or on behalf of any
party hereto and shall survive the Closing and the consummations of the
transactions contemplated hereby.
10.2 Indemnification.
(a) AWG covenants and agrees to defend, indemnify and save and
hold harmless Purchaser from and against any loss, cost, expense, liability,
claim or legal damages (including, without limitation, reasonable fees and
disbursements of counsel and accounts and other costs and expenses incident to
any actual or threatened claim, suit, action or proceeding (each, an "Action")
and all costs of investigation) (collectively, the "Damages") arising out of or
resulting from: (i) any material breach of any representation, warranty,
covenant or agreement made by AWG in this Agreement or in any writing delivered
pursuant to this Agreement or at the Closing; (ii) the failure of AWG to perform
or observe fully any covenant, agreement or provision required to be performed
or observed by it pursuant to this Agreement, and (iii) in the event any Person
asserts a claim against Purchaser arising out of the Business conducted by AWG
on the Leased Premises.
(b) Purchaser covenants and agrees to indemnify and save and
hold harmless AWG, together with its officers, directors, employees, partners,
members, attorneys and representatives and each person who controls AWG within
the meaning of the Securities Act, from and against any Damages arising out of
or resulting from: (i) any material breach of any representation, warranty,
covenant or agreement made by Purchaser in this Agreement or in any writing
delivered pursuant to this Agreement or at the Closing; and (ii) the failure by
Purchaser to perform or observe any covenant, agreement or condition required to
be performed or observed by it pursuant to this Agreement.
(c) In the event that any indemnified party is made a
defendant in or party to any action, suit, proceeding or claim, judicial or
administrative, instituted by any third party for Damages (any such third party
action, suit, proceeding or claim being referred to as a "Claim"), the
indemnified party (referred to in this clause (c) as the "notifying party")
shall give notice thereof as soon as practicable and in any event within thirty
(30) days after the indemnified party receives notice thereof. The failure to
give such notice shall not affect whether an indemnifying party is liable for
reimbursement hereunder unless such failure has resulted in the loss of material
substantive rights with respect to the indemnifying party's ability to defend
such Claim. The indemnifying party may contest and defend such Claim so long as
the indemnifying party: (i) has a
13
reasonable basis for concluding that such defense may be successful, (ii)
diligently contests and defends such Claim, and (iii) as soon as practicable,
indemnitor shall make a good faith effort to determine and inform the
indemnified party of any reasonably anticipated basis upon which it might
dispute its liability, or any portion thereof, to the indemnified party for any
Damages which might be incurred or suffered as a result of such Claim. Notice of
the intention to so contest and defend shall be given by the indemnifying party
to the notifying party within twenty (20) business days after the notifying
party's notice of such Claim. Such contest and defense shall be conducted by
reputable attorneys employed by the indemnifying party and approved by the
indemnified party (which approval will not be unreasonably withheld). The
notifying party shall be entitled, at its own cost and expense (which expense
shall not constitute Damages unless the notifying party reasonably determines
that the indemnifying party is not adequately representing or, because of a
conflict of interest, may not adequately represent, the interests of the
indemnified parties, and has provided the indemnifying party with notice of such
determination, and only to the extent that such expenses are reasonable), to
participate in such contest and defense and to be represented by attorneys of
its or their own choosing. If the notifying party elects to participate in such
defense, the notifying party will cooperate with the indemnifying party in the
conduct of such defense. Neither the notifying party nor the indemnifying party
may concede, settle or compromise any Claim without the consent of the other
party, which consent will not be unreasonably withheld or delayed in light of
all factors of importance to such party. Notwithstanding the foregoing, if the
indemnifying party fails to acknowledge in writing its obligation to provide
indemnification in respect of such Claim, to assume the defense thereof with
counsel reasonably satisfactory to the notifying party or to diligently contest
and defend such Claim, then the notifying party alone shall be entitled to
contest, defend and settle such Claim in the first instance (in which case, all
expenses incurred in connection therewith shall constitute Damages) and, only if
the notifying party chooses not to contest, defend or settle such Claim, the
indemnifying party shall then have the right to contest and defend (but not
settle) such Claim.
(d) In the event any indemnified party shall have a claim
against any indemnifying party that does not involve a Claim, the indemnified
party shall deliver a notice of such claim with reasonable promptness to the
indemnifying party. The failure to give such notice shall not affect whether an
indemnifying party is liable for reimbursement unless such failure has resulted
in the loss of substantive rights with respect to the indemnifying party's
ability to defend such claim, and then only to the extent of such loss. If the
indemnifying party notifies the indemnified party that it does not dispute the
claim described in such notice or fails to notify the indemnified party within
thirty (30) days after delivery of such notice by the indemnified party whether
the indemnifying party disputes the claim described in such notice, the Damages
in the amount specified in the indemnified party's notice will be deemed to have
been rejected, in which case the indemnified party will be free to pursue such
remedies as may be available to the indemnified party on the terms and subject
to the provisions of this Agreement.
14
(e) The foregoing indemnification provisions are in addition
to, and not in derogation of, any statutory, equitable or common-law remedy any
party may have for breach of representation, warranty, covenant or agreement;
provided, however, that the rights and remedies in this Article 10 are intended
to provide the exclusive remedy as to the matters addressed therein whether any
such claim arises in contract or in tort.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Complete Agreement. This Agreement, including the exhibits and
schedules hereto, constitutes the entire agreement and supersedes all other
prior and contemporaneous agreements and undertakings, both written and oral,
between the parties hereto with regard to the subject matter hereof. This
Agreement (a) is not intended to confer upon any Person any rights or remedies
hereunder or with respect to the subject matter hereof except as specifically
provided in this Agreement; (b) shall not be assigned by any party hereto
without the prior written consent of the other party and (c) may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which counterparts shall together constitute a single agreement.
Facsimile signatures shall be fully binding and effective for all purposes as if
they were original signatures.
11.2 Expenses. All costs and expenses, other than those described in
Section 10.2 hereof, including but not limited to legal, accounting, investment
banking (if any) and other costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby and the negotiation and
execution thereof shall be paid by the party or parties incurring the same.
11.3 Further Assurances. From time to time, as and when requested by
either Purchaser or AWG, the other party will execute and deliver, or cause to
be executed and delivered, all such documents and instruments as may be
reasonably necessary to consummate the transactions contemplated by this
Agreement.
11.4 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been
received five business days after having been deposited in the United States
mail and enclosed in a registered or certified post-paid envelope; one day after
having been sent by overnight courier on a business day, or otherwise at the
open of business on the next succeeding business day; when scanned by facsimile
communications equipment of the sending party on a business day, or otherwise at
the open of business on the next succeeding business day; or when personally
delivered on a business day or otherwise at the open of business on the next
succeeding business day; and, in each case, addressed to the respective parties
at the addresses stated below, or to such other changed addresses that the
parties may have fixed by notice in accordance herewith.
15
If to AWG or
the Representative: Andretti Winery
0000 Xxx Xxxxx Xxxx
Xxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Telephone: 000-000-0000
cc: Xxxxxx X. Xxxxxxxx
0000 X. Xxxxx Xxxx
Xxxx, XX 00000
Telephone: 000-0000-0000
If to Purchaser: Xxxxxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxx, XX 00000
Attn: C. Xxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
11.5 Governing Law. This Agreement is to be construed in accordance
with and governed by the internal laws of the State of California (as permitted
by Section 1646.5 of the California Civil Code, or any similar successor
provision) without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of California to the rights and duties of the parties.
11.6 Severability. Should any one or more of the provisions of the
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby; provided that the
same may be so enforced without altering the intent of this Agreement.
11.7 Arbitration. Except as provided in Section 11.7, any dispute
between the parties arising out of this Agreement or the transactions
contemplated hereby shall be fully and finally resolved by binding arbitration
in San Francisco County, California, in accordance with the Commercial
Arbitration Rules and practices of the American Arbitration Association ("AAA")
from time to time in force. This agreement to arbitrate shall be specifically
enforceable and is the exclusive remedy for the resolution of such disputes
under this Agreement. Only individuals who are (i) lawyers engaged full-time in
the practice of law and (ii) on the AAA register of arbitrators shall be
selected as an arbitrator. There shall be one arbitrator who shall be chosen in
accordance with the rules of the AAA. Within twenty (20) days after the
conclusion of the arbitration hearing, the arbitrator shall prepare written
findings of fact and conclusions of law. Judgment upon the award determined by
the arbitrator shall be entered in state or federal court located in San
Francisco County, California. The parties hereby submit to the exclusive
jurisdiction
16
of the courts so selected, to the exclusion of any other court which might have
had jurisdiction apart from this Section 11.7, waive any defense of lack of in
personam jurisdiction of such courts and agree that service of process in any
action before such courts may be made by mailing it to the party to be served at
the address provided for in Section 11.4. The arbitrator shall require the
non-prevailing party to pay its full fees and expenses or, if in its opinion
there is no prevailing party, its fees and expenses will be borne equally by the
parties thereto. Each party to this Agreement covenants not to institute any
Action in any court with respect to any matter under this Agreement other than
in accordance with Section 11.7.
11.8 Injunctive Relief; Indemnification. Notwithstanding Section 11.7,
(a) any party may bring a claim seeking specific performance by way of
injunctive relief before a court of competent jurisdiction to enforce the
provisions of this Agreement, (b) any party seeking to enforce a claim for
indemnification may bring any claim of indemnification which is not resolved
pursuant to Section 10.2 before a court of competent jurisdiction, and (c) in
the event of any breach by either party of Section 11.7, the other party may
seek injunctive relief from a court of competent jurisdiction to restrain any
such breach.
11.9 Waiver of Jury Trial. Each party hereby knowingly, intentionally
and voluntarily waives trial by jury in any action or proceeding of any kind or
nature in any court in which an action may be commenced by or against the other
party arising out of this Agreement or the transactions contemplated hereby.
Each party acknowledges that such waiver is made with full knowledge and
understanding of the nature of the rights and benefits waived hereby, and with
the benefit of advice of counsel.
11.10 Attorneys' Fees. If any litigation or arbitration shall ensue
between the parties concerning the interpretation of or performance under this
Agreement, the prevailing party shall recover from the nonprevailing party or
parties its reasonable attorneys' and other fees as fixed by the court or the
arbitrator, as the case may be.
11.11 Construction of Agreement. Any captions to, or headings of, the
paragraphs of this Agreement are solely for the convenience of the parties
hereto, are not a part of this Agreement, and shall not be used for the
interpretations of this Agreement. Where the context so requires, words used in
any gender shall be deemed to include other genders, and the singular number
shall include the plural and vice versa. The recitals appearing at the beginning
of this Agreement, and the Exhibits and Schedules attached hereto, are hereby
incorporated into and are deemed to constitute a part of the operative text of
this Agreement. Each party hereto and such party's counsel have had the full
opportunity to review and comment upon, and have reviewed and commented upon,
this Agreement, and any rule of construction to the effect that ambiguities are
to be resolved against the drafting party shall not apply in the interpretation
of this Agreement or any Exhibits or Schedules attached hereto.
11.12 Assignment; Successors and Assigns. Each party shall have the
right to assign, by operation of law or otherwise, all or any part of its
interest in this Agreement with the other party's written consent, which consent
shall not be unreasonably withheld.
17
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Any
purported assignment in violation of this Section 11.12 shall be void and of no
effect.
11.13 Time of Essence. Time of the essence of each and every term,
condition, obligation, and provision hereof. All references herein to a
particular time of day shall be deemed to refer to Pacific Standard Time.
11.14 No Obligations to Third Parties. Except as otherwise expressly
provided herein, the execution and delivery of this Agreement shall not be
deemed to confer any rights upon, nor obligate any of the parties hereto to, any
person or entity other than the parties hereto.
11.15 No Partnership. No provision of this Agreement or the Lease shall
be construed as creating a partnership or joint venture between Purchaser and
AWG, or as creating an ownership interest by Purchaser in AWG or any portion of
the Business conducted by AWG on the Leased Premises.
IN WITNESS WHEREOF, AWG and Purchaser have executed this Agreement the
day and year first above written.
AWG:
By: /s/ X.X. Xxxxxxxx
-----------------------------
Name: X.X. Xxxxxxxx
---------------------------
Title: CEO
--------------------------
PURCHASER:
/s/ Xxxxxxx X. Xxxxx
---------------------------
---------------------------
18
SCHEDULE 3.4
1. None.
SCHEDULE 3.6
1. See Title Insurance Policy issued by North American Title Company,
Inc., attached hereto.
SCHEDULE 3.9
1. See Environmental Report prepared by Ninyo & Xxxxx, attached hereto.
SCHEDULE 3.10
1. See Permits attached hereto.
EXHIBIT A
DESCRIPTION:
The land referred to herein is situated in the State of California, County of
Napa, and is described as follows:
COMMENCING AT A POINT ON THE NORTHEASTERN LINE OF THE COUNTY ROAD COMMONLY KNOWN
AS THE "BIG RANCH ROAD", WHERE THE SAME IS INTERSECTED BY THE CENTER LINE OF A
CERTAIN STONE DITCH RUNNING THROUGH LOT 12 AS SAID LOT IS SHOWN UPON THE MAP
HEREINAFTER REFERRED TO, SAID POINT OF COMMENCEMENT BEING FURTHER DESCRIBED AS
BEING THE POINT OF INTERSECTION OF SAID NORTHEASTERN LINE OF THE "BIG RANCH
ROAD" WITH THE SOUTHEASTERN LINE OF THE 39.25 ACRE TRACT HERETOFORE CONVEYED TO
L.L. JORDAN BY DEED OF RECORD IN BOOK 112 OF DEEDS, AT PAGE 18, RECORDS OF SAID
NAPA COUNTY AND RUNNING THENCE FROM SAID POINT OF COMMENCEMENT, AND ALONG THE
NORTHEASTERN LINE OF SAID COUNTY ROAD SOUTH 30(Degree)30' EAST 849.5 FEET TO THE
SOUTHEASTERN LINE OF SAID XXX 00, XXXXXX XXXXX 00(Xxxxxx) XXXX XXX XXXXX THE
SOUTHEASTERN LINE OF SAID LOT 12, A DISTANCE OF 46.90 CHAINS, MORE OR LESS, TO
THE CENTER OF NAPA RIVER; THENCE UP SAID RIVER AND FOLLOWING MEANDERINGS OF THE
CENTER LINE THEREOF TO THE SOUTHEASTERN LINE OF THE 33 ACRE TRACT COVEYED TO
X.X. XXXXXXX BY DEED OF RECORD IN BOOK 110 OF DEEDS, AT PAGE 362, SAID NAPA
COUNTY RECORDS, TENCE WESTERLY ALONG THE SOUTHEASTERN LINE OF SAID 33 ACRE TRACT
TO A LARGE OAK TREE AND THENCE SOUTH 55 3/4(Degree) WEST AND ALONG THE
SOUTHEASTERN LINE OF SAID XXXXXXX AND THE SOUTHEASTERN LINE OF PREMISES CONVEYED
TO JORDAN HEREINABOVE REFERRED TO, 1697 FEET TO THE POINT OF COMMENCEMENT. BEING
A PORTION OF LOT 12, AS SHOWN ON THAT CERTAIN MAP, DUPLICATE PLAT OF THE SAUSAL
RANCHO, RECORDED NOVEMBER 21, 1864 IN BOOK 1 OF DEEDS AT PAGE 99, NAPA COUNTY
RECORDS, AND BEING THE SAME AS SET FORTH ON RECORD OF SURVEY MAP NO. 3998, FILED
FEBRUARY 2, 1987 IN BOOK 25 OF SURVEYS, PAGE 62, NAPA COUNTY RECORDS.
ASSESSORS PARCEL NO. 000-000-000
Order No. 1905615
