ASSET PURCHASE AGREEMENT
between
SONOMAWEST HOLDINGS, INC.
and
Commercial Sales and Leasing, Inc.
October 3, 2002
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of October 3,
2002 by and between SONOMAWEST HOLDINGS, INC., a California corporation
("Seller"), and Commercial Sales and Leasing, Inc., a Utah corporation
("Buyer").
R E C I T A L S:
----------------
WHEREAS, Seller owns certain assets related to its former business of
producing, packing and distributing low-moisture food products (the "Business");
WHEREAS, Seller no longer is engaged in the Business and desires to sell,
and Buyer desires to buy, on the terms and conditions set forth in this
Agreement, certain of Seller's assets relating to the Business.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree as
follows:
T E R M S :
-----------
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Transferred Assets.
Subject to and upon the terms and conditions of this Agreement, Seller
agrees to sell, assign, transfer, convey and deliver to Buyer, and Buyer agrees
to purchase from Seller on the Closing Date (as defined in Section 11.1), all of
those certain assets of Seller described below (all of which are sometimes
collectively referred to as the "Transferred Assets").
(a) Certain equipment owned by Seller which is used in the operation
of the Business, which is listed on Schedule 1.1(a) hereto (the "Equipment").
(b) Certain inventory owned by the Seller, which is listed on Schedule
1.1(b) hereto (the "Inventory"), provided, however, that there may be
non-material variations in the exact amounts of the various Inventory items
listed on Schedule 1.1(b) and such non-material variations shall not affect
Buyer's obligation hereunder.
(c) All of Seller's rights, title and interest in the trademarks
"Perma-Pak", "Noah's Ark" and "Pantri Reserve" as currently owned by Seller and
as evidenced by the following registrations with the United States Patent and
Trademark Office (the "USPTO") and/or common law rights (all these marks are
sometimes collectively referred to as the "Trademarks"):
PERMA-PAK -- Federal Registration Number 1124329 and common
law rights.
NOAH'S ARK -- Federal Registration Numbers 1195824, 1208746
and 1318399 and common law rights.
PANTRI RESERVE -- Common law rights.
Seller makes no representations or warranties as to (i) any potential claims,
actions or proceedings by any other person or entity arising out of or related
to Seller's, Buyer's or any other party's use of (or right to use) any of the
Trademarks, (ii) the right of any other person or entity to use any of the
Trademarks or any similar xxxx or (iii) the status of the aforementioned
trademark registrations with the USPTO. Seller has an abandoned application with
the USPTO to register the xxxx "Perma Pak" evidenced by application Serial
Number 76204492 (the "Application") for which Seller has filed a petition to
revive the Application.
(d) The supplier list attached hereto as Schedule 1.1(d) (the
"Supplier List") which lists the suppliers for the Business as last used by
Seller prior to when
it ceased operating the Business.
(e) All goodwill related to the Business to the extent it relates to
the Trademarks (the "Goodwill").
1.2 Transfer of Title and Buyer Taking Possession; Security Interest.
---------------------------------------------------------------------
Title and risk of loss to all the Transferred Assets other than the
Trademarks and Goodwill shall pass to Buyer at the Closing. By no later than
November 30, 2002, Buyer shall, at its own expense, remove all of the Equipment
and Inventory from Seller's premises. Buyer's obligation to remove the Equipment
and Inventory includes, but is not limited to, disassembling the Equipment for
removal. If all or any portion of the Equipment and/or Inventory remains at
Seller's premises after November 30, 2002, Buyer shall pay Seller Five Hundred
Dollars ($500.00) per day thereafter for the storage of the Equipment and/or
Inventory, the same to be paid monthly in arrears.
Buyer hereby grants Seller a security interest in the Transferred Assets
and any and all accessions to, replacements of and proceeds from the Transferred
Assets as security for the payment of any and all amounts due under the
Promissory Note and for any and all amounts that may become due if Buyer does
not remove all the Equipment and Inventory from Seller's premises by November
30, 2002. At the Closing (or at Seller's discretion after the Closing), Buyer
shall execute a UCC-1 financing statement and any other documents Seller deems
necessary or advisable to perfect and maintain its security interest in the
Transferred Assets. Upon any default of the obligations secured by the above
granted security interest, Seller shall have all the rights of a secured
creditor under the California Commercial Code.
1.3 Cessation of Use of Trademarks.
------------------------------
As of the Closing Date, Seller shall not use the Trademarks in commerce.
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price.
--------------
The purchase price to be paid by Buyer to Seller for the Transferred Assets
shall be Two Hundred and Forty Thousand Dollars ($240,000.00) (the "Purchase
Price"). Of the Purchase Price: (i) One Hundred and Seventy-Five Thousand
Dollars ($175,000.00) shall be paid at the Closing in the form of one or more
cashier's checks of immediately available U.S. currency payable to Seller and;
and (ii) Sixty-Five Thousand Dollars ($65,000.00) shall be paid at the Closing
in the form of a promissory note made by Buyer in the form attached hereto as
Exhibit A (the "Promissory Note").
2.2 Liabilities Not Assumed.
-----------------------
Except for the sales tax payments required in Section 2.3, Buyer does not
assume any obligations, responsibilities, liabilities, or debts of Seller.
2.3 Sales Taxes.
-----------
Buyer shall pay any and all sales taxes resulting from Buyer purchasing all
or any portion of the Transferred Assets and shall reimburse Seller for any and
all sales taxes properly paid by Seller in connection therewith.
As soon as practicable after the Closing but before taking possession of
the Inventory, Seller shall provide Buyer any resale use certificates, exempt
use certificates or any other exemption certifications held by Buyer which are
required to enable Buyer to benefit from any sales and use or other tax
exemption.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Now, and at the time of Closing, Seller hereby represents and warrants to
Buyer as follows:
3.1 Formation and Authority.
-----------------------
Seller is a corporation duly formed, validly existing and in good standing
under the laws of the State of California, and on the Closing Date shall have
full corporate power and authority to consummate the transactions contemplated
hereby.
3.2 Non-Contravention.
-----------------
The execution, delivery and performance of this Agreement (and each of the
Related Agreements defined in Section 3.5) by Seller and the consummation of the
transactions contemplated hereby do not and will not, with or without the giving
of notice or the lapse of time, or both, violate, conflict with, result in the
breach of or accelerate the performance required by any of the terms, conditions
or provisions of the charter documents or by-laws or other governing documents
of Seller or any covenant, agreement or understanding to which Seller is a party
or any order, ruling, decree, judgment, or arbitration award to which Seller is
subject or constitute a default thereunder.
3.3 Title to Assets.
---------------
Seller has good and marketable title to the Transferred Assets. On the
Closing Date, the Transferred Assets shall be free and clear of restrictions on
or conditions to transfer or assignment, and free and clear of mortgages, liens,
security interests, tax liens, successor tax liability claims, pledges, charges,
encumbrances, equities, claims, covenants, conditions, or restrictions. The
Transferred Assets do not represent all or substantially all of the assets of
the Seller.
3.4 Warranties.
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THE TRANSFERRED ASSETS ARE TO BE SOLD ON AN "AS IS/WHERE IS" BASIS. EXCEPT
AS EXPRESSLY SET FORTH IN SECTIONS 3.3 AND 3.7, SELLER MAKES NO REPRESENTATIONS
OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSFERRED ASSETS,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
3.5 Authorization.
-------------
The execution and delivery of this Agreement and the Xxxx of Sale (as
defined in Section 6.4), and all other instruments and agreements delivered or
to be delivered by Seller in connection herewith (collectively referred to as
the "Related Agreements"), and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all necessary
corporate action on the part of Seller. This Agreement and the Related Documents
have been or shall be duly executed and delivered by Seller and shall constitute
legal, valid and binding obligations of Seller, enforceable against it in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally and by general equitable principles. Seller is
neither currently engaged in nor contemplating any bankruptcy or insolvency
proceeding.
3.6 Consents.
--------
No consent, license, approval or authorization of, or registration or
declaration with, any governmental authority, agency, bureau or commission, or
any third party, is required to be obtained or made by Seller in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement or the consummation of the transactions contemplated hereby.
3.7 Trademarks.
----------
Seller believes that it has rights to the Trademarks based on registrations
with the USPTO and/or prior use of the Trademarks in commerce.
3.8 Brokers or Finders.
------------------
Except for a fee payable to Xxxx X. Xxxx by Seller, neither Seller nor any
of its agents have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement or the transactions
contemplated by this Agreement.
3.9 Litigation.
----------
To Seller's actual knowledge, there are no actions, suits, proceedings or
investigations pending or threatened or in prospect before any court, agency or
other tribunal, to which Seller is a party which may adversely affect the
Transferred Assets; provided, however, that Seller makes no representations or
warranties as to the status of any trademark registration or pending trademark
application with the USPTO.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Now, and at the time of Closing, Buyer hereby represents and warrants to
Seller as follows:
4.1 Formation and Authority.
-----------------------
Buyer is a corporation duly formed, validly existing and in good standing
under the laws of the State of Utah, and on the Closing Date shall have full
corporate power and authority to consummate the transactions contemplated
hereby.
4.2 Authorization.
-------------
The execution and delivery of this Agreement and all other instruments and
agreements delivered or to be delivered by Buyer in connection herewith, and the
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary company action on the part of Buyer.
This Agreement and any other instruments and agreements delivered to or to be
delivered in connection herewith have been or shall be duly executed and
delivered by Buyer and shall constitute legal, valid and binding obligations of
Buyer enforceable against it in accordance with their respective terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors generally and
by general equitable principles. Buyer is neither currently engaged in nor
contemplating any bankruptcy or insolvency proceeding.
4.3 Non-Contravention.
-----------------
The execution, delivery and performance of this Agreement and each of the
Related Agreements by Buyer and the consummation of the transactions
contemplated do not and will not, with or without the giving of notice or the
lapse of time, or both, violate, conflict with, result in the breach of or
accelerate the performance required by any of the terms, conditions or
provisions of any covenant, agreement or understanding to which Buyer is a party
or any order, ruling, decree, judgment, or arbitration award to which Buyer is
subject or constitute a default thereunder.
4.4 Consents.
--------
No consent, license, approval or authorization of, or registration or
declaration with, any governmental authority, agency, bureau or commission, or
any third party, is required to be obtained or made by Buyer in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement or the consummation of the transactions contemplated hereby.
4.5 Resale Certificate.
------------------
Buyer will furnish any resale certificate or other document related to the
purchase of Inventory reasonably requested by Seller to comply with the
provisions of the sale and use tax laws of the State of California.
ARTICLE 5
MUTUAL CONDITIONS PRECEDENT
The respective obligations of each of the parties hereto at the Closing are
subject to the fulfillment to their reasonable satisfaction of the following
conditions precedent (or mutual written waiver thereof) on or before the Closing
Date:
(a) Consummation of the transactions contemplated hereby shall not
have been prohibited by any order, decree or judgment of any United States
court, governmental agency, or other regulatory agency or commission having
competent jurisdiction; and
(b) There shall not have been promulgated, entered, issued or
determined to be applicable to this Agreement any law, regulation, order,
judgment or decree making the sale or purchase of the Transferred Assets as
contemplated hereby illegal.
ARTICLE 6
CONDITIONS PRECEDENT TO CLOSING BY BUYER
The obligation of Buyer to purchase the Transferred Assets and to
consummate the transactions contemplated hereby is subject to the fulfillment
and satisfaction by Seller or waiver in writing by Buyer prior to or at the
Closing Date of each of the following conditions:
6.1 Accuracy of Representations and Warranties.
------------------------------------------
The representations and warranties of Seller contained in this Agreement
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of such date.
6.2 Performance.
----------- -
Each and all of the actions of Seller to be performed on or before the
Closing Date pursuant to the terms hereof shall have been duly performed in all
material respects.
6.3 Authorization.
-------------
All corporate action necessary to authorize the execution, delivery and
performance by Seller of this Agreement and the transactions to be performed on
or before the Closing Date pursuant to the terms hereof shall have been duly and
validly taken.
6.4 Xxxx of Sale.
-------------
On the Closing Date, Seller shall have executed and delivered to Buyer a
xxxx of sale conveying to Buyer all of the tangible and intangible personal
assets to be acquired by Buyer, substantially in the form attached hereto as
Exhibit B (the "Xxxx of Sale").
6.5 Transfer of Trademarks; License to Use Trademarks.
-------------------------------------------------
Within three (3) business days after the Promissory Note is paid in full,
Seller shall execute and deliver to Buyer documents to assign, transfer and
convey to Buyer, to the fullest extent permitted by the USPTO, ownership of all
of Seller's right, title and interest in and to the four (4) trademark
registrations and one trademark application listed in Section 1.1(c), along with
all of Seller's common law rights and all the goodwill associated therewith.
Within three (3) business days after the Promissory Note is paid in full, Seller
shall also execute and deliver to Buyer a document to assign ownership of all
Seller's common law rights to the trademark "Pantri Reserve" and all the
goodwill associated therewith to Buyer. Seller hereby grants buyer an exclusive
license to use the Trademarks from the Closing Date and until the date the
Promissory Note is paid in full; provided, however, that Seller, at its
discretion, may revoke such license for any material breach of this Agreement or
the Promissory Note by Buyer.
ARTICLE 7
CONDITIONS PRECEDENT TO CLOSING BY SELLER
The obligation of Seller to sell the Transferred Assets and to consummate
the transactions contemplated hereby is subject to the fulfillment and
satisfaction by Buyer or waiver in writing by Seller prior to or at the Closing
Date of each of the following conditions:
7.1 Accuracy of Representations and Warranties.
------------------------------------------
The representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of such date.
7.2 Performance.
------------
Each and all of the actions of Buyer to be performed on or before the
Closing Date pursuant to the terms hereof shall have been duly performed in all
material respects.
ARTICLE 8
FURTHER ASSURANCES
8.1 Execution of Other Instruments.
------------------------------
From time to time after the Closing, at Buyer's request and without further
consideration or additional cost to Seller, Seller shall execute and deliver
such other and further instruments of conveyance, assignment, transfer and
consent, and take such other action, as Buyer may reasonably request for the
more effective conveyance and transfer of ownership of the Transferred Assets.
ARTICLE 9
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
9.1 Survival of Representations, Warranties and Agreements.
------------------------------------------------------
All representations of Seller and Buyer in this Agreement shall survive the
execution of this Agreement for three (3) months after the Closing Date. All
statements contained in any schedule, exhibit or any document delivered at
Closing shall be deemed representations within the meaning of this Section.
9.2 Indemnification by Seller.
-------------------------
Seller agrees to defend with competent counsel, indemnify and hold Buyer
and its agents, employees, officers, directors and stockholders (collectively
referred to herein as "Buyer Indemnitees") harmless from any and all
Indemnifiable Losses arising from or related to (i) the failure of any
representation or warranty made by Seller hereunder to be true when made and as
of the Closing or (ii) the nonfulfillment of any obligation of Seller under this
Agreement. Provided, however, notwithstanding any other provision of this
Agreement, in no event shall Seller's obligation to indemnify, defend and hold
Buyer Indemnitees harmless from Indemnifiable Losses pursuant to the immediately
preceding sentence exceed, in the aggregate, One Hundred Thousand Dollars
($100,000) in total costs and expenses to be borne by Seller.
9.3 Indemnification by Buyer.
------------------------
Buyer agrees to defend with competent counsel, indemnify and hold Seller
and its agents, employees, officers, directors and stockholders (collectively
referred to herein as the "Seller Indemnitees") harmless from any and all
Indemnifiable Losses arising from or related to (i) the failure of any
representation or warranty made by Buyer hereunder to be true when made and as
of the Closing or (ii) any and all claims (other than claims arising out of a
failure by Seller to perform its obligations under this Agreement) including but
not limited to business torts, breach of contract claims, indemnity or guarantee
claims, malicious or intentional misconduct, fraud, personal injury, property
damage, employment related claims and workers compensation claims, arising from
Buyer's use or sale of all or any portion of the Transferred Assets from and
after the Closing.
9.4 Procedures.
----------
When a party seeking indemnification under Section 9.2 or 9.3 (the
"Indemnified Party") receives notice of any action, suit, proceeding, claim,
demand or assessment which is likely to give rise to a claim for indemnification
hereunder, the Indemnified Party shall give prompt written notice thereof to the
other party (the "Indemnifying Party") reasonably describing (to the extent
known) the nature of such claim and the basis therefor. If the Indemnified Party
fails to give such prompt written notice to the Indemnifying Party, the
Indemnified Party shall not forfeit its indemnification claim, but such
indemnification claim shall be reduced by the amount of any additional or
increased liability, cost or expense (including applicable interest and
penalties) caused by the delay in giving notice. If the Indemnified Party is
entitled to indemnification hereunder, the Indemnifying Party shall, at its
expense, assume the complete defense of the action, suit, proceeding, claim,
demand or assessment giving rise thereto, with full authority to conduct such
defense and to settle or otherwise dispose of the same, except as set forth
below. The Indemnifying Party and the Indemnified Party will each fully
cooperate with the other in the defense of any claim which is likely to give
rise to a claim for indemnification hereunder or does present such a claim. The
Indemnifying Party will not, except with the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld), consent to
the entry of any judgment or enter into any settlement in connection with such
defense which does not include a release of the Indemnified Party from all
liability in respect thereof or does include any undertaking or agreement which
causes the Indemnified Party to perform any act or to refrain from performing
any act. The Indemnifying Party will not, except with the prior written consent
of the Indemnified Party (which consent shall not be unreasonably withheld),
consent to the entry of any judgment or enter into any settlement in connection
with such defense.
9.5 Indemnifiable Losses.
--------------------
In determining the amount of Indemnifiable Losses for which an Indemnified
Party is liable hereunder, amounts paid or recovered from or reimbursed by third
parties and/or under insurance policies, contractual or other rights of
indemnification or contribution, and the like, which amounts are paid to the
Indemnified Party on behalf of the Indemnifying Party, shall reduce the amount
for which the Indemnifying Party shall otherwise be liable hereunder. If an
Indemnified Party receives payment from the Indemnifying Party with respect to
an indemnification claim made hereunder, and the amount for which the
Indemnified Party was entitled to seek indemnity hereunder is subsequently
reduced under the terms of this Section 9.5, the Indemnified Party shall
promptly refund to the Indemnifying Party the amount of such reduction.
As used herein, the term "Indemnifiable Losses" means all costs, expenses,
losses, claims, obligations, liabilities, damages, deficiencies, actions and
judgments, or diminution in value, whether or not involving a third-party claim
together with all reasonable attorneys' fees and other costs and expenses of the
defense thereof (including such fees, costs and expenses incurred pursuant to
Section 9.4); provided, however, an Indemnified Party's internal expenses
(salaries, general and administrative costs, allocated corporate overhead, etc.)
incurred in processing, monitoring and assisting in the defense of an action,
suit, proceeding, claim, demand or assessment subject to indemnity hereunder
shall not be considered an "Indemnifiable Loss" and shall be borne by the
Indemnified Party.
ARTICLE 10
TERMINATION
10.1 Termination.
-----------
This Agreement may be terminated and the transactions contemplated hereby
abandoned at any time prior to the Closing Date as follows:
(a) by mutual written consent of Seller and Buyer;
(b) by Buyer if any of the conditions set forth in Article 6 shall
have become impossible of fulfillment and shall not have been waived by Buyer;
(c) by Seller if any of the conditions set forth in Article 7 shall
have become impossible of fulfillment and shall not have been waived by Seller;
or
(d) by either Buyer or Seller if the transactions contemplated hereby
are not consummated on or before October 4, 2002 for any reason other than the
failure of the party seeking termination to fulfill the conditions set forth in
Article 6 if Seller, or Article 7 if Buyer.
If this Agreement is terminated pursuant hereto, this Agreement shall
become void and of no further force and effect except that such termination
shall be without prejudice to the rights of any party because of the
non-satisfaction of conditions set forth in Articles 6 and 7 hereof resulting
from the intentional or willful breach or violation of the representations,
warranties, covenants or agreements of another party under this Agreement.
Sections 12.1, 13.1, 14.1, 14.2 and 15.1 through 15.9 shall survive
termination of this Agreement.
ARTICLE 11
CLOSING
11.1 Closing Date.
------------
The closing of the purchase and sale of the Transferred Assets hereunder
shall be held at the offices of Seller at 0000 Xxxxxxx 000, Xxxxx Xxxxxxxxxx,
Xxxxxxxxxx 00000-0000 at 10:00 a.m., local time, on October 4, 2002, or at such
other date, time and place as the parties may hereafter agree in writing. The
time and place of closing is herein referred to as the "Closing" and the date of
the Closing is referred to in this Agreement as the "Closing Date".
ARTICLE 12
EXPENSES OF THE PARTIES
12.1 Expenses of the Parties.
-----------------------
Each party shall pay its respective expenses incurred in connection with
the negotiation, execution and performance of this Agreement.
ARTICLE 13
NOTICES
13.1 Notices.
-------
All notices hereunder must be in writing and shall be sufficiently given
for all purposes hereunder if properly addressed and delivered personally by
documented overnight delivery service, by certified or registered mail, return
receipt requested, or by facsimile at the address or facsimile number, as the
case may be, set forth below. Any notice given personally or by documented
overnight delivery service is effective upon receipt. Any notice given by
registered mail is effective upon receipt, to the extent such receipt is
confirmed by return receipt. Any notice given by facsimile transmission is
effective upon receipt, to the extent that receipt is confirmed, either verbally
or in writing by the recipient. Any notice which is refused, unclaimed or
undeliverable because of an act or omission of the party to be notified, if such
notice was correctly addressed to the party to be notified, shall be deemed
communicated as of the first date that said notice was refused, unclaimed or
deemed undeliverable by the postal authorities, or overnight delivery service.
Any "copy to" notice to be given as set forth below is a courtesy copy only; and
a notice given to such person is not sufficient to effect giving a notice to the
principal party, nor does a failure to give such a courtesy copy of a notice
constitute a failure to give notice to the principal party.
if to Buyer: Commercial Sales and Leasing, Inc.
X.X. Xxx 000
Xxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to Seller: SonomaWest Holdings, Inc.
0000 Xxxxxxx 000 Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Allen, Matkins, Xxxx, Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such address may be changed by any party by written notice to the other
party.
ARTICLE 14
DISPUTE RESOLUTION
14.1 Mandatory Arbitration.
---------------------
Any controversy or claim between or among the parties, their agents,
employees and affiliates, arising out of or relating to this Agreement or the
Related Agreements, including without limitation any claim based on or arising
from an alleged tort, shall, at the option of any party, be resolved through
mandatory and binding arbitration in accordance with the rules then in effect of
the American Arbitration Association ("AAA") for commercial arbitration,
notwithstanding any other choice of law provision in the Agreement or the
Related Agreements. All statutes of limitations or any waivers contained herein
that would otherwise be applicable shall apply to any arbitration proceeding
under this Section 14.1. The parties agree that related arbitration proceedings
may be consolidated. The arbitrator shall prepare written reasons for the award.
The location of the arbitration shall be in San Francisco, California. The
arbitrator or arbitrators shall be generally skilled in the legal and business
aspects of the subject matter at issue. If the parties so agree, a single
arbitrator shall be selected jointly by Buyer and Seller to settle the dispute.
If the parties cannot agree upon the selection of an arbitrator within fifteen
(15) days after the receipt by one party from the other of a notice of
arbitration, then each party shall within fifteen (15) days after the expiration
of said fifteen (15) day period select one arbitrator. If either party fails to
appoint an arbitrator within that fifteen (15) days period, the other party may
designate an arbitrator for the party who failed to make such appointment. The
two arbitrators shall select a third arbitrator within fifteen (15) days after
their appointment; if the two arbitrators selected by the parties cannot agree
upon a third arbitrator, the third arbitrator shall be appointed by the AAA. The
arbitrators shall promptly determine whether and in what amount a payment should
be made to the prevailing party and shall submit a written report of their
decision to Buyer and Seller. The decision of the majority of the arbitrators
shall be binding upon all parties. The arbitrators shall not be entitled to
award punitive damages. Judgment upon the award rendered may be entered in any
court having jurisdiction.
14.2 Provisional Remedies and Self Help.
----------------------------------
No provision of, or the exercise of any rights under, Section 14.1 shall
limit the right of any party to exercise self help remedies such as set-off, or
to obtain provisional or ancillary remedies such as injunctive relief or the
appointment of a receiver from a court having jurisdiction before, during or
after the pendency of any arbitration.
ARTICLE 15
MISCELLANEOUS
15.1 Disclosure.
----------
Neither party shall reveal to the general public the details of this
Agreement or the transactions contemplated by this Agreement or make any public
or private announcement concerning this Agreement or the transactions
contemplated by this Agreement without first obtaining the written approval of
the other party hereto. Nothing contained herein shall be deemed to prevent a
party from making such disclosures as may be (a) required to be filed with or
submitted to regulatory agencies or bodies, or (b) otherwise permitted by other
provisions of this Agreement.
15.2 Entire Agreement; Waivers.
-------------------------
This Agreement (including all attachments hereto) comprises the entire
agreement between the parties hereto as to the subject matter hereof and
supersedes all prior agreements and understandings between them relating
thereto. Each party may extend the time for, or waive the performance of, any of
the obligations of the other, waive any inaccuracies in the representations or
warranties of the other, or waive compliance by the other with any of the
covenants or conditions contained in this Agreement, but only by an instrument
in writing signed by the party granting such extension or waiver.
15.3 Attorneys Fees.
--------------
If any legal action, arbitration, mediation or other proceeding is brought
for the enforcement of this Agreement or the Related Agreements, or because of
an alleged dispute, breach, default, or misrepresentation in connection with any
of the provisions of this Agreement or the Related Agreements, the prevailing
party (as "prevailing party" is defined in California Code of Civil Procedure
Section 1032(a)(4), interpreted to apply to arbitration as well as judicial
proceedings) or parties shall be entitled to recover reasonable attorneys' fees
and other costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.
15.4 Governing Law.
-------------
This Agreement and any and all matters related to or arising under this
Agreement shall be construed in accordance with the internal laws of the State
of California, regardless of any choice or conflicts of law provision of any
jurisdiction.
15.5 Successors and Assigns.
----------------------
This Agreement shall inure to the benefit of, and be binding upon and
enforceable against, the respective successors and assigns of the parties hereto
but may not be assigned by any party without the prior written consent of the
other parties.
15.6 Captions.
--------
Captions are supplied herein for convenience only and shall not be deemed a
part of this Agreement for any purpose.
15.7 Counterparts; Facsimile Signatures.
----------------------------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original for all purposes. This Agreement may be executed by
a party's signature transmitted by facsimile ("fax"), and copies of this
Agreement executed and delivered by means of faxed signatures shall have the
same force and effect as copies hereof executed and delivered with original
signatures. All parties hereto may rely upon faxed signatures as if such
signatures were originals. Any party executing and delivering this Agreement by
fax shall promptly thereafter deliver a counterpart signature page of this
Agreement containing said party's original signature. All parties hereto agree
that a faxed signature page may be introduced into evidence in any proceeding
arising out of or related to this Agreement as if it were an original signature
page.
15.8 Severability.
------------
If any term or provision of this Agreement or the application thereof to
any person or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Agreement or the application of such terms or provisions to
persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.
15.9 Time is of the Essence.
----------------------
Time is of the essence with respect to all obligations under this
Agreement.
[Signature page follows this page.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
Seller:
SONOMAWEST HOLDINGS, INC., a California corporation
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx, Chairman of the Board
Buyer:
Commercial Sales and Leasing, Inc., a
Utah corporation
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Print Name: Xxxx Xxxxxxxxx
------------------------------
Title: President
----------------------------------
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.1(a)* Equipment
Schedule 1.1(b)* Inventory
Schedule 1.1(d)* Suppliers
*Schedules omitted in accordance with Item 601(b)(2) of
Regulation S-K.
EXHIBITS
Exhibit A Promissory Note
Exhibit B Xxxx of Sale
EXHIBIT A
SECURED PROMISSORY NOTE
-----------------------
$65,000.00 October 4, 2002
1. FOR VALUE RECEIVED, COMMERCIAL SALES AND LEASING, INC., a Utah
corporation ("Maker") promises to pay to SONOMAWEST HOLDINGS, INC., a California
corporation ("Payee"), or holder of this Note, the principal sum of Sixty-Five
Thousand Dollars ($65,000.00) ("Principal").
2. Maker shall pay Twenty Thousand Dollars ($20,000.00) of the Principal on
or before October 25, 2002. Maker shall pay Thirty Thousand Dollars ($30,000.00)
of the Principal on or before April 4, 2003. Maker shall pay the remaining
Fifteen Thousand Dollars ($15,000.00) of the Principal on or before July 4,
2003. All payments shall be made by immediately available U.S. currency in the
form of either a wire transfer or cashier's check.
3. Any amounts not paid when due shall thereafter bear interest at the rate
of eighteen percent (18%) per annum or the highest rate permitted under
applicable law, whichever is lower, and shall be compounded daily and computed
on the basis of a 365 day year.
4. At its option, the holder of this Note may determine that Maker is in
default and may, consequently, accelerate the unpaid balance, making the unpaid
balance of the Note (the total of the unpaid balance and any applicable
interest) due immediately without presentment for payment or any notice, if any
of the following occur:
(a) Maker fails to make payment when due.
(b) Maker:
(i) Fails, after demand by the holder of this Note, to furnish
financial information or to permit inspection of any books or records;
(ii) Suspends business;
(iii) Becomes insolvent or offers settlement to any creditor;
(iv) Files a petition in bankruptcy, either voluntary or
involuntary;
(v) Institutes any proceeding under any bankruptcy or insolvency
laws relating to the relief of debtors;
(vi) Gives notice of any intended bulk sale or completes any bulk
sale;
(vii) Makes an assignment for the benefit of creditors;
(viii) Mortgages, pledges, assigns, or transfers any accounts
receivable or other property, in trust or otherwise, without the
written consent of the holder of this Note;
(ix) Makes any false statement or representation orally or in
writing to Payee or any subsequent holder of this Note;
(x) Fails to pay any obligation when due; or
(xi) Is dissolved or its capital becomes impaired.
(c) Payee or any subsequent holder of this Note discovers that any
misrepresentation was made to Payee or any such holder on behalf of Maker to
obtain credit or an extension of credit.
(d) Any legal action is commenced against Maker or any endorser,
surety, or guarantor, including, but not limited to, the following:
(i) Entry of judgment; or
(ii) Issuance of a writ of attachment, order of garnishment,
order or subpoena in supplementary proceedings, execution, or similar
process.
(e) A receiver is appointed for Maker or any endorser, surety or
guarantor.
(f) Maker defaults in any of the obligations due under Asset Purchase
Agreement between Maker and Payee dated October 3, 2002 (the "Purchase
Agreement") or otherwise breaches the Purchase Agreement.
5. All payments under this Note shall be made in the form of cashier's
check or wire transfer to Payee or holder of this Note.
6. This Note may be prepaid in full or in part, at any time, without
penalty.
7. Maker waives diligence, presentment, protest and notice of protest,
dishonor and nonpayment of this Note, and expressly agrees that this Note, or
any payment under it, may be extended and any security may be accepted, released
or substituted by the holder of this Note from time to time without in any way
affecting the liability of Maker.
8. As collateral security for the payment of this Note, Maker hereby grants
the holder of this Note a security interest in and right of offset against the
Transferred Assets and any and all accessions to, replacements of and proceeds
from the Transferred Assets (as "Transferred Assets" is defined in the Purchase
Agreement which is incorporated herein by this reference). Upon any default of
the obligations secured by the above granted security interest or the
obligations secured by the security interest granted to Payee in the Purchase
Agreement, Seller shall have all the rights of a secured creditor under the
California Commercial Code.
9. Maker agrees to reimburse the holder of this Note for all costs of
collection or enforcement of this Note, whether or not suit is filed (including,
but not limited to, actual legal fees), incurred by the holder of this Note.
10. Maker, Payee and any subsequent holder of this Note waive the right to
trial by jury in any action arising under or related to this Note. Any dispute
arising under or related to this Note shall be resolved pursuant to the
arbitration terms set forth in Article 14 of the Purchase Agreement and
incorporated herein by reference. Costs of any such dispute shall be recoverable
as provided in Section 15.3 of the Purchase Agreement.
11. This Note shall be governed by and construed in accordance with the
laws of the State of California, regardless of any laws on choice or conflicts
of law of any jurisdiction.
MAKER:
COMMERCIAL SALES AND LEASING, INC.,
a Utah corporation
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxx
-------------------------------------
Title: President
------------------------------------
EXHIBIT B
XXXX OF SALE
------------
This Xxxx of Sale ("Xxxx of Sale") is made and entered into as of October
4, 2002, by and between SONOMAWEST HOLDINGS, INC., a California corporation
("Seller"), and Commercial Sales and Leasing, Inc., a Utah corporation
("Buyer"), with reference to the following facts.
R E C I T A L S :
- - - - - - - -
A. Seller and Buyer are parties to that certain Asset Purchase Agreement,
made and entered into as of October 3, 2002 (the "Purchase Agreement"), pursuant
to which Seller, subject to certain terms and conditions, agreed to sell and
convey to Buyer, and Buyer agreed to purchase from Seller, certain assets
related to the business of producing, packing and distributing by-moisture food
products.
B. Seller now desires to assign and transfer to Buyer all of the assets
listed on Schedule 1 attached to this Xxxx of Sale (the "Assets").
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
A G R E E M E N T :
- - - - - - - - -
1. Defined Terms. All capitalized terms used and not otherwise defined in
this Xxxx of Sale, but defined in the Purchase Agreement, shall have the meaning
set forth in the Purchase Agreement.
2. Sale. Seller hereby grants, sells, conveys, transfers and delivers to
Buyer any and all of Seller's rights, title and interests in and to the Assets
set forth on Schedule 1 attached hereto; provided, however, that Seller retains
a security interest in the Assets as provided in the Purchase Agreement.
3. Rights to Tangible Assets. From and after the date of this Xxxx of Sale,
it is intended by the parties that Buyer and its successors and assigns shall
have the right to use, have, hold and own the Assets forever.
4. As Is. Buyer hereby acknowledges, covenants, represents and warrants
that the only representations or warranties made by Seller regarding the Assets
are those expressly stated in the Purchase Agreement. This Xxxx of Sale shall
not be construed as a representation or warranty by Seller as to the condition
of the Assets.
5. Dispute Resolution. Any dispute between Seller and Buyer arising under
or related to this Xxxx of Sale shall be resolved pursuant to the arbitration
terms set forth in Article 14 of the Purchase Agreement which is incorporated
herein by reference. Costs of any such dispute shall be recoverable as provided
in Section 15.3 of the Purchase Agreement.
6. Counterparts; Facsimile Signatures. This Xxxx of Sale may be executed in
multiple counterparts, each of which shall be deemed an original for all
purposes. This Xxxx of Sale and any other document or instrument relating hereto
may be executed by a party's signature transmitted by facsimile ("fax"), and
copies of this Xxxx of Sale and any such document or instrument executed and
delivered by means of faxed signatures shall have the same force and effect as
copies hereof executed and delivered with original signatures. All parties
hereto may rely upon faxed signatures as if such signatures were originals. Any
party executing and delivering this Xxxx of Sale and any such document or
instrument by fax shall promptly thereafter deliver a counterpart signature page
of this Xxxx of Sale and the fully executed original or counterpart original of
any such document or instrument containing said party's original signature. All
parties hereto agree that a faxed signature may be introduced into evidence in
any proceeding arising out of or related to this Xxxx of Sale or any such
document or instrument as if it were an original signature.
7. Limited Liability. Buyer on its own behalf and on behalf of its
shareholders, directors, officers, employees, representatives, agents,
successors and assigns hereby agrees that in no event or circumstance shall any
of Seller's shareholders, directors, officers, employees, representatives,
agents, successor, assigns, affiliated or related entities of Seller have any
personal liability under this Xxxx of Sale, or to any of Buyer's creditors, or
to any other party in connection with the Assets. Seller on its own behalf and
on behalf of its shareholders, directors, officers, employees, representatives,
agents, successors and assigns hereby agrees that in no event or circumstance
shall any of Buyer's shareholders, directors, officers, employees,
representatives, agents, successor, assigns, affiliated or related entities of
Buyer have any personal liability under this Xxxx of Sale, or to any of Seller's
creditors, or to any other party in connection with the Assets.
8. No Third Party Beneficiaries. The execution and delivery of this Xxxx of
Sale 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.
9. Governing Law. This Xxxx of Sale and any and all matters arising under
or related to this Xxxx of Sale shall be construed in accordance with the
internal laws of the State of California, regardless of any choice or conflicts
of law provision of any jurisdiction.
10. Captions. Captions are supplied herein for convenience only and shall
not be deemed a part of this Agreement for any purpose.
11. Successor and Assigns. This Xxxx of Sale shall inure to the benefit of,
and be binding upon and enforceable against, the respective successors and
assigns of the parties hereto, but may not be assigned by any party without the
prior written consent of the other party.
12. Notice. All notices or other communications required or permitted
hereunder shall be transmitted by one or more of the means permitted in Section
13.1 of the Purchase Agreement and shall be deemed received according to the
provisions of that Paragraph.
13. Severability. If any term or provision of this Xxxx of Sale or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Xxxx of Sale or the application
of such terms or provisions to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby and each
term and provision of this Xxxx of Sale shall be valid and enforced to the
fullest extent permitted by law.
IN WITNESS WHEREOF, the parties hereto have executed this Xxxx of Sale as
of the date first written above. Seller:
SONOMAWEST HOLDINGS, INC., a California
corporation
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, Chairman of the Board
Buyer:
Commercial Sales and Leasing, Inc., a Utah
corporation
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Print Name: Xxxx Xxxxxxxxx
----------------------------
Title: President
---------------------------------
SCHEDULE 1
The Equipment listed in Schedule 1.1(a) attached to the Purchase Agreement.*
The Inventory listed in Schedule 1.1(b) attached to the Purchase Agreement.*
The Trademarks listed in Section 1.1(c) of the Purchase Agreement.*
The Supplier List attached as Schedule 1.1(d) to the Purchase Agreement.*
All goodwill related to the Business to the extent it relates to the
Trademarks.
* Schedules omitted in accordance with Item 601(b)(2) of Regulation S-K.
