EXHIBIT 10.43
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
dated as of
September 30, 2007
between
CRYSTAL PARADISE HOLDINGS, INC.
and
AMCON DISTRIBUTING CO.
TRINITY SPRINGS, INC.
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement ("Agreement") is dated
September 30, 2007 (the "Effective Date"), by and between Crystal
Paradise Holdings, Inc., an Idaho corporation, also known as Trinity
Springs, Ltd. ("CPH"), AMCON Distributing Co., a Delaware corporation
("AMCON"), and Trinity Springs, Inc., a Delaware corporation ("TSI").
CPH, AMCON, and TSI may each be referred to as a "Party" or
collectively as the "Parties."
RECITALS
A. On December 21, 0000, XXX filed an action against TSI and AMCON in
the Fourth Judicial District of the State of Idaho (the "Court") (Case
No. CV 06-1034) (the "Lawsuit"). CPH asserted claims for (i)
foreclosure; (ii) breach of the asset purchase agreement between the
Parties dated April 24, 2004, as amended (the "2004 Purchase
Agreement"), and related promissory notes and water royalty
obligations; (iii) quantum meruit; (iv) unjust enrichment; and (v)
collection and enforcement of its security interest. In addition, CPH
sought a declaratory judgment that: (i) AMCON and TSI are obligated to
perform under the 2004 Purchase Agreement and other agreements related
to the asset purchase transaction; (ii) the actions of AMCON and TSI
constituted events of default; (iii) TSI has not cured the events of
default; (iv) TSI's obligations are accelerated under certain
promissory notes; and (v) AMCON is liable to CPH under a guaranty and
suretyship agreement for all amounts owing to CPH under the 2004
Purchase Agreement and related agreements.
B. On May 29, 2007, TSI and AMCON responded and filed counterclaims
against CPH in the Lawsuit for (i) breach of the 2004 Purchase
Agreement; (ii) breach of the implied covenant of good faith and fair
dealing; (iii) fraudulent misrepresentation; (iv) fraudulent
inducement of AMCON; (v) breach of representations and warranties in
the 2004 Purchase Agreement; (vi) negligence; (vii) unjust enrichment;
and (viii) setoff for failure to mitigate damages. In addition, AMCON
and TSI sought a declaratory judgment that (i) the 2004 Purchase
Agreement is unenforceable against the parties, (ii) AMCON and TSI are
excused from performance under the 2004 Purchase agreement, and (iii)
CPH, TSI, and AMCON are required to return each other to their
pre-contractual positions.
C. The Parties desire to dismiss the Lawsuit in its entirety with
prejudice, settle all outstanding claims, and release the other
Parties from any claims and causes of action on the terms and
conditions set forth herein.
AGREEMENT
The Parties, intending to be legally bound, agree as follows:
ARTICLE 1
OPTION TO ACQUIRE ASSETS
1.1 OPTION TO ACQUIRE ASSETS
Upon the terms and subject to the conditions set forth in this
Agreement, TSI hereby grants to CPH the exclusive option (the
"Option") to acquire from TSI, all of TSI's right, title, and interest
in and to all of TSI's property and assets possessed by or for which
TSI has any rights of ownership or use as of September 30, 2007,
whether real, personal, or mixed, tangible and intangible, or every
kind and description, wherever located, including the following (but
excluding the Excluded Assets as set forth in Section 1.2)
(collectively, the "Assets"), on an "AS IS, WHERE IS" basis, except as
set forth in Section 3.1(f).
(a) All Real Property, including but not limited to the Real Property
described in Schedule 1.1(a);
(b) All Tangible Personal Property, including but not limited to
those items described in Schedule 1.1(b);
(c) The Raw Materials Inventories, including but not limited to the
Raw Materials Inventories described in Schedule 1.1(c);
(d) All TSI Contracts listed in Schedule 1.1(d);
(e) All data and Records in the possession of TSI or AMCON related to
the operations of TSI or Trinity Springs, Ltd. ("TSLtd") including
prior client and customer lists and Records, research and development
reports and Records, production reports and Records, service and
warranty Records, equipment logs, operating guides and manuals, and
other similar documents and Records;
(f) All of the intangible rights and property of TSI, including
Intellectual Property Assets, goodwill, telephone, telecopy, and
e-mail addresses and listings and those Marks, Copyrights, and Net
Names listed in Schedule 1.1(f);
(g) All insurance benefits, including rights and proceeds, arising
from or relating to the Assets or the Assumed Liabilities prior to the
Closing Date, unless expended in accordance with this Agreement;
(h) All claims of TSI and, to the extent applicable, of TSLtd against
third parties relating to the Assets, whether xxxxxx or inchoate,
known or unknown, contingent or noncontingent, including but not
limited to all such claims listed in Schedule 1.1(h);
(i) All of TSI's Water Rights; and
(j) All rights of TSI relating to deposits and prepaid expenses,
claims for refunds and right to offset in respect thereof.
1.2 EXCLUDED ASSETS
Notwithstanding anything to the contrary contained in Section 1.1 or
elsewhere in this Agreement, the following assets will not be part of
any assignment, transfer or delivery of Assets contemplated under this
Agreement, are excluded from the Assets, shall remain the property of
TSI from and after the Effective Date, and represent assets for which
TSI shall have full rights of ownership or use, including but not
limited to rights of disposition, after the Effective Date (the
"Excluded Assets").
(a) All cash and cash equivalents;
(b) All minute books, stock Records, and corporate seals;
(c) Those rights relating to deposits and prepaid expenses, and
claims for refunds and rights to offset in respect thereof
specifically listed in Schedule 1.2(d);
(d) All insurance policies with respect to TSI and rights thereunder;
(e) All personnel Records and other Records (including financial and
accounting Records) that TSI is required by law to retain in its
possession;
(f) All claims for refund of Taxes and other governmental charges of
whatever nature;
(g) All rights of TSI under this Agreement, the Xxxx of Sale, and the
Assignment and Assumption Agreement;
(h) All of TSI's Net Operating Losses; and
(i) The additional assets of TSI specifically listed in Schedule
1.2(j).
1.3 LIABILITIES
(a) ASSUMED LIABILITIES. If CPH exercises the Option, CPH will
assume and agree to discharge only the following "Assumed
Liabilities." Except for the Assumed Liabilities, CPH will not assume
and shall in no event be liable for (and TSI shall retain and pay,
perform, or otherwise discharge) any debt, obligation, responsibility
or Liability of TSI (which TSI shall retain and pay, perform or
discharge before Closing).
(i) the Liabilities of TSI that are due and payable with respect to
acts or omissions occurring in the periods after the Closing Date
under the TSI Contracts listed on Schedule 1.1(d);
(ii) the Liabilities of TSI for acts or omissions occurring in the
periods after the Closing Date under the Governmental Authorizations
assigned to TSI;
(iii) state and local real estate and personal property taxes and
water and sewer use charges assessed on the Assets payable at any time
after the Closing Date;
(iv) the Permitted Encumbrances; and
(v) any liabilities arising solely from CPH's ownership and
operation of the Assets after Closing.
(b) RETAINED LIABILITIES. From and after the Effective Date, TSI
shall retain and before Closing pay, perform, or discharge the
following Liabilities (the "Retained Liabilities"):
(i) Secured promissory note payable to Xxxxx X. Xxxxxxxx in the
principal amount of $1,000,000 dated December 14, 2004;
(ii) Promissory note payable to Nebraska Distributing Co. in the
principal amount of $500,000 dated March 30, 2005;
(iii) Subordinated promissory note payable to Aristide Investments,
L.P. in the principal amount of $250,000 dated August 8, 2005;
(iv) Subordinated promissory note payable to Draupnir LLC in the
principal amount of $250,000 dated August 8, 2005;
(v) Subordinated promissory note payable to Draupnir LLC in the
principal amount of $400,000 dated October 20, 2005;
(vi) Subordinated promissory note payable to Draupnir LLC in the
principal amount of $200,000 dated November 7, 2005;
(vii) Subordinated promissory note payable to Draupnir LLC in the
principal amount of $150,000 dated December 1, 2005;
(viii) Trade accounts payable due and owed by TSI as of the
Effective Effective Date totaling approximately $881,000, and all such
trade accounts due and owed thereafter;
(ix) Any amounts owed by TSI or AMCON to LaSalle Bank NA as of the
Effective Date totaling approximately $1,000,000, and all such other
amounts owed to LaSalle Bank NA owed thereafter;
(x) Any amounts owed by TSI to AMCON as of the Effective Date
totaling approximately $2,900,000, and all such amounts owed
thereafter; and
(xi) Any other Liability of TSI, whether known or unknown,
contingent or absolute, other than the Assumed Liabilities.
1.4 OPTION PERIOD
(a) CPH may elect to exercise the Option, by providing written notice
to TSI and AMCON at any time before 5:00 pm, MST, on August 31, 2008
(the "Initial Option Period").
(b) CPH shall have the right to extend the Option until 5:00 pm, MST,
on March 31, 2009 (the "Option Expiration Date") by (i) providing
written notice to TSI and AMCON before 5:00 pm, MST on August 31,
2008, and (ii) foregoing its right to payment of all interest accrued
or to be accrued with respect to the period from the Effective Date
through the Initial Option Period. If CPH does not provide written
notice before the expiration of the Initial Option Period or the
Option Expiration Date, as the case may be, the Option shall
automatically terminate and CPH shall release its security interests
as provided in Section 2.1(e).
ARTICLE 2
CONSIDERATION FOR OPTION; MUTUAL RELEASES
2.1 CONSIDERATION FOR OPTION
(a) TERMINATION OF 2004 PURCHASE AGREEMENT. As of the Effective
Date, the 2004 Purchase Agreement shall be terminated by mutual
agreement of the Parties and none of the Parties shall have any
further obligations, liabilities, or rights of any kind thereunder,
including, without limitation, any water royalties and previously
accrued payment obligations of any kind; provided that CPH shall be
entitled to retain any and all funds otherwise received prior to the
Effective Date pursuant to the 2004 Purchase Agreement.
(b) CANCELLATION OF EXISTING NOTES. As of the Effective Date, CPH
shall unconditionally cancel and forever discharge TSI and AMCON from
any unfulfilled obligations under (i) the Promissory Note made by TSI
to the order of CPH in the principal amount of $500,000, dated June
17, 2004 (the "3-Year Note") and (ii) the Promissory Note made by TSI
to the order of CPH in the principal amount of $2,828,400, dated June
17, 2004 (the "10-Year Note"). None of the Parties shall have any
further obligations, liabilities, or rights of any kind thereunder.
CPH shall deliver the original 3-Year Note and the original 10-Year
Note promptly following the Effective Date with notations that each is
cancelled and paid in full.
(c) ISSUANCE OF NEW NOTE. Concurrently with the execution and
delivery of this Agreement, TSI shall issue to CPH a promissory note
in the principal amount of Five Million Dollars ($5,000,000.00) and
bearing interest at a rate of five percent (5%) per annum, compounded
annually, which principal and accrued interest shall be due and
payable on September 30, 2012, in the form attached to this Agreement
as Exhibit A (the "Note").
(d) AMENDMENT OF GUARANTY. Concurrently with the execution and
delivery of this Agreement, AMCON shall amend and restate that certain
Guaranty and Suretyship Agreement dated June 17, 2004 to reflect
AMCON's guarantee of payment in full of the principal and interest
under the Note, in the form attached to this Agreement as Exhibit B
(the "Guaranty").
(e) SECURITY AGREEMENT; SECURITY INSTRUMENTS. The Security Agreement
between TSI and CPH dated June 17, 2004 (the "Security Agreement"),
and the Mortgage granted by TSI to CPH dated June 17, 2004 (the
"Mortgage," together with the Guaranty and Security Agreement, the
"Security Instruments"), shall continue in full force and effect until
the earlier of CPH's exercise of the Option or Option Expiration Date;
provided that AMCON, TSI and CPH shall amend or replace such documents
as may be necessary to reflect the terms of this Agreement,
specifically the Option set forth herein, but only to the extent to
which such amendment or replacement will not adversely affect the
priority or other rights of CPH with respect to the Assets, it being
the intention of AMCON, TSI and CPH that CPH continue in, or be placed
in, a position with respect to other existing or potential creditors
or other claimants that will ensure possession by CPH of the Assets
upon exercise of the Option. In the event that CPH does not exercise
the Option, promptly following the Option Expiration Date, CPH will
release all of its security interests in the Assets.
(f) REDEMPTION OF TSI STOCK. As of the Effective Date, CPH shall
transfer to TSI and TSI shall redeem from CPH all of the right, title
and interest of CPH in and to the shares of common stock of TSI (the
"Shares"). CPH shall transfer the Shares to TSI free and clear of any
Encumbrance. CPH waives any right, option, right of first refusal,
warrant, or any right to acquire shares of stock of other interest in
TSI or AMCON. Promptly following the execution and delivery of this
Agreement, CPH shall deliver to TSI the stock certificate representing
the Shares, duly endorsed for transfer or a lost certificate affidavit
in form reasonably acceptable to TSI, and a duly executed stock power
to transfer and assign the Shares to TSI, in the form attached hereto
as Exhibit C (the "Stock Power"), together with all other necessary
endorsements, to TSI.
(g) MUTUAL RELEASE OF CLAIMS.
(i) Release by CPH. As of the Effective Date, CPH, on behalf of
itself and its subsidiaries, predecessors and successors in interest
(the "CPH Entities"), together with, but solely with respect to acts
or omissions directly relating to their employment or other engagement
by or contracts with one of the CPH Entities, all of its past,
present, and future officers, directors, principals, stockholders,
attorneys, insurers, agents, employees, representatives, and assigns
(collectively with the CPH Entities, the "CPH Parties"), shall fully,
finally, and forever discharge and release TSI, AMCON, and their
respective subsidiaries, predecessors and successors in interest (the
"AMCON Entities"), together with, but solely with respect to acts and
omissions directly relating to their employment or other engagements
by or contracts with one of the AMCON Entities, their respective past,
present, and future officers, directors, principals, stockholders,
attorneys, insurers, agents, employees, representatives, and assigns
(collectively, with the AMCON Entities, the "AMCON Parties"), from any
and all Damages (including general, special, compensatory, and
punitive damages), Liabilities, and compensation of any kind or
nature, whether based on contract, tort, strict liability, or other
theory of recovery, whether known or unknown, which CPH or the CPH
Parties now has or may have on account of, or in any way growing out
of, or which is the subject of: (i) the Lawsuit, (ii) the 2004
Purchase Agreement (including the water royalties contemplated
thereunder), the 3-Year Note, the 10-Year Note, the Security
Instruments, and all other related documents executed in connection
with the transactions contemplated in the 2004 Purchase Agreement (the
"CPH Released Claims"), excluding only any claims arising out of any
AMCON or TSI breach of the terms of this Agreement. Solely for the
purpose of clarification and to correct any subsequent claims of
ambiguity, TSI and AMCON understand and acknowledge that none of the
CPH Parties is discharging or releasing any person or entity that
previously had, currently has or may in the future have any
employment, engagement or contractual relationship with any of the CPH
Parties with respect to acts or omissions relating to or resulting
from that relationship, including by way of example only, and without
excluding other persons or entities, any employee or officer that
previously worked for TSLtd, any previous TSLtd shareholder or any
previous, current or subsequent professional services firm, such as
Holland & Xxxx and Xxxxxxx Coie, engaged by any of the CPH Entities.
(ii) Release by TSI and AMCON. As of the Effective Date, TSI and
AMCON, on behalf of themselves and the other AMCON Parties, together
with, but solely with respect to acts or omissions directly relating
to their employment or other engagements by or contracts with one of
the AMCON Parties, shall fully, finally, and forever discharge and
release each of the CPH Parties from any and all Damages (including
general, special, compensatory, and punitive damages), Liabilities,
and compensation of any kind or nature, whether based on contract,
tort, strict liability, or other theory of recovery, whether known or
unknown, which any of the AMCON Parties now has or may have on account
of, or in any way growing out of, or which is the subject of: (i) the
Lawsuit, (ii) the 2004 Purchase Agreement, the 3-Year Note, the
10-Year Note, the Security Instruments, and all other related
documents executed in connection with the transactions contemplated in
the 2004 Purchase Agreement (the "AMCON Released Claims"), excluding
only any claims arising out of CPH's breach of the terms of this
Agreement and claims against the law firm of Xxxxxxx Coie. Solely for
the purpose of clarification and to correct any subsequent claims of
ambiguity, CPH understands and acknowledges that none of the AMCON
Parties are discharging or releasing any person or entity that
previously had, currently has or may in the future have any
employment, engagement or contractual relationship with any of the
AMCON Parties with respect to acts or omissions relating to or
resulting from that relationship, including by way of example only,
and without excluding other persons or entities, any employee or
officer that previously or currently works with any of the AMCON
Parties, any previous TSLtd shareholder or any previous, current or
subsequent professional services firm, such as Holland & Xxxx or
Xxxxxxx Coie, engaged by any of the AMCON Parties.
(h) COVENANT NOT TO XXX. The Parties shall not xxx or commence any
action at law, equity, or otherwise against each other for the CPH
Released Claims or the AMCON Released Claims. The Parties, however,
may xxx or commence any action at law, equity, or otherwise against
each other for any excluded claims, including any rights of the
Parties pursuant to the Note, the Guaranty or the promises, covenants
and commitments of each other under this Agreement.
(i) LIABILITY CONTESTED AND DENIED. This settlement between the
Parties as documented by this Agreement is a settlement of disputed
claims between the Parties. Except as otherwise provided herein,
nothing contained in this Agreement shall constitute an admission of
fault or liability by any Party on any claim asserted or alleged. The
Parties intend by this Agreement to fully, finally, and forever
resolve certain claims, and the Parties intend only to avoid further
litigation. This Agreement and the consideration provided are made
and accepted in good faith with the understanding by the Parties of
the risks attendant to litigation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TSI AND AMCON
3.1 TSI REPRESENTATIONS AND WARRANTIES
TSI represents and warrants to CPH as follows (which representations
shall be made as of the Effective Date and shall be deemed to be made
again at and as of the Closing):
(a) ORGANIZATION AND GOOD STANDING. TSI is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware. TSI is duly qualified to do business as a foreign
corporation and is in good standing under the laws of Idaho.
(b) ENFORCEABILITY; AUTHORITY. This Agreement has been duly
authorized, executed and delivered by TSI and is the legal, valid and
binding obligation of TSI, enforceable against TSI in accordance with
its terms except to the extent that enforcement thereof may be limited
by general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity). TSI has the right,
power and authority to execute and deliver this Agreement and all
other documents to be signed and delivered by TSI on signing and at
the Closing, and to perform its obligations thereunder. TSI is not
required to obtain the Consent from any Person in connection with the
execution and delivery of this Agreement and all other documents to be
signed and delivered by TSI or the consummation or performance of any
of the Contemplated Transactions.
(c) CERTAIN PROCEEDINGS. There is no pending or threatened
Proceeding that challenges, or that may have the effect of preventing
or making illegal, any of the Contemplated Transactions. To the best
of TSI's Knowledge, no event has occurred or circumstance exists that
is reasonably likely to give rise to or serve as a basis for the
commencement of any such Proceeding.
(d) NO CONFLICT. Neither the execution and delivery by TSI of this
Agreement nor the consummation by it of the Contemplated Transactions
will violate, breach, be in conflict with, or constitute a default
under, or permit the termination or the acceleration of maturity of
any contract, agreement, or instrument, or any judgment, order,
injunction, or decree by which TSI is bound, or to which the Assets
are subject.
(e) NO ASSIGNMENT OF CLAIMS. TSI has not made, nor caused to be
made, any assignment or transfer of any of their claims or causes of
action covered by the releases in Section 2.1(g)(ii).
(f) TITLE TO THE ASSETS. TSI owns good and marketable title to
Assets, free and clear of any Encumbrances, other than Permitted
Encumbrances and with respect to any Encumbrances in favor of CPH or
its shareholders or arising from or related to the Lawsuit or the
previous lawsuit (Case No. 04-506 in the Fifth Judicial District of
the State of Idaho). Without limiting the generality of the
foregoing, there are no leases, licenses, occupancy or related
agreements or tenancies affecting the Real Property. TSI has not
granted, other than to CPH, any outstanding option, right of first
refusal or any other right with respect to the purchase of all or any
portion of the Real Property.
3.2 AMCON REPRESENTATIONS AND WARRANTIES
AMCON represents and warrants to CPH as follows (which representations
shall be made as of the Effective Date and shall be deemed to be made
again at and as of the Closing):
(a) ORGANIZATION AND GOOD STANDING. AMCON is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware.
(b) ENFORCEABILITY; AUTHORITY. This Agreement has been duly
authorized, executed and delivered by AMCON and is the legal, valid
and binding obligation of AMCON, enforceable against AMCON in
accordance with its terms except to the extent that enforcement
thereof may be limited by general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity). AMCON has the right, power, and authority to execute and
deliver this Agreement and all other documents to be signed and
delivered by AMCON on signing and at the Closing, and to perform its
obligations thereunder. AMCON is not required to obtain the Consent
from any Person in connection with the execution and delivery of this
Agreement and all other documents to be signed and delivered by AMCON
or the consummation or performance of any of the Contemplated
Transactions.
(c) CERTAIN PROCEEDINGS. There is no pending or threatened
Proceeding that challenges, or that may have the effect of preventing
or making illegal, any of the Contemplated Transactions. To the best
of AMCON's Knowledge, no event has occurred or circumstance exists
that is reasonably likely to give rise to or serve as a basis for the
commencement of any such Proceeding.
(d) NO CONFLICT. Neither the execution and delivery by AMCON of this
Agreement nor the consummation by it of the Contemplated Transactions
will violate, breach, be in conflict with, or constitute a default
under, or permit the termination or the acceleration of maturity of
any contract, agreement, or instrument, or any judgment, order,
injunction, or decree by which AMCON is bound, or to which the Assets
are subject.
(e) NO ASSIGNMENT OF CLAIMS. AMCON has not made, nor caused to be
made, any assignment or transfer of any of their claims or causes of
action covered by the releases in Section 2.1(g)(ii).
3.3 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.
EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, TSI AND AMCON MAKE NO
REPRESENTATIONS OR WARRANTIES EXPRESS OR IMPLIED REGARDING THE ASSETS,
ASSUMED LIABILITIES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTY OF MERCHANTABILITY, TITLE, NONINFRINGEMENT, OR FITNESS FOR A
PARTICULAR PURPOSE, AND ALL SUCH REPRESENTATIONS AND WARRANTIES ARE
HEREBY DISCLAIMED.
Acknowledged and agreed: TSI /s/AP AMCON /s/ AP CPH /s/ RB
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CPH
CPH represents and warrants to TSI as follows (which representations
shall be made as of the Effective Date and shall be deemed to be made
again at and as of the Closing):
4.1 ORGANIZATION AND GOOD STANDING
CPH is a corporation duly organized, validly existing and in good
standing under the laws of the State of Idaho, with full corporate
power and authority to conduct its business as it is now conducted.
4.2 ENFORCEABILITY; AUTHORITY
This Agreement constitutes the legal, valid and binding obligation of
CPH, enforceable against CPH in accordance with its terms except to
the extent that enforcement thereof may be limited by general
principles of equity (regardless of whether enforcement is considered
in a proceeding at law or in equity). CPH has the right, power and
authority to execute and deliver this Agreement and all other
documents to be signed and delivered by CPH on signing or at the
Closing, and to perform its obligations thereunder. CPH is not
required to obtain the Consent from any Person in connection with the
execution and delivery of this Agreement and all other documents to be
signed and delivered by CPH or the consummation or performance of any
of the Contemplated Transactions.
4.3 CERTAIN PROCEEDINGS
There is no pending or threatened Proceeding that challenges, or that
may have the effect of preventing or making illegal, any of the
Contemplated Transactions. To the Knowledge of CPH, no event has
occurred or circumstance exists that is reasonably likely to give rise
to or serve as a basis for the commencement of any such Proceeding.
4.4 NO CONFLICT
Neither the execution and delivery by CPH of this Agreement nor the
consummation by it of the Contemplated Transactions will violate,
breach, be in conflict with, or constitute a default under, or permit
the termination or the acceleration of maturity of any contract,
agreement, or instrument, or any judgment, order, injunction, or
decree by which CPH is bound.
4.5 NO ASSIGNMENT OF CLAIMS
Neither CPH nor any CPH Party has made, nor caused to be made, any
assignment or transfer of any of their claims or causes of action
covered by the releases in Section 2.1(g)(i).
4.6 BROKERS OR FINDERS
Neither CPH nor any of its Representatives have incurred any
obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in
connection with the Contemplated Transactions.
ARTICLE 5
COVENANTS OF TSI AND AMCON
5.1 ACCESS AND INVESTIGATION
Between the Effective Date and the earlier of the Closing Date and
Option Expiration Date, and upon reasonable advance notice received
from CPH, TSI and AMCON will cooperate and assist, to the extent
reasonably requested by CPH, with CPH's investigation of the Assets.
In addition, CPH shall have the right to have the Real Property,
Tangible Personal Property and other Assets inspected by CPH and its
Representatives, at CPH's sole cost and expense, for purposes of
determining the physical condition and legal characteristics of the
Assets.
5.2 MAINTENANCE OF ASSETS
Subject to any limitations on TSI's business operations or disclosures
of TSI (in either case as expressly set forth in this Agreement or the
schedules hereto), and with CPH's acknowledgement that TSI ceased
operations in March 2006, between the Effective Date and the earlier
of the Closing Date and Option Expiration Date, TSI shall, unless
otherwise consented to in writing by CPH:
(a) maintain the Assets in good order;
(b) comply in all material respects with all Legal Requirements and
contractual obligations applicable to the Assets;
(c) not dispose of any material Asset; and
(d) maintain all books and Records of TSI relating to the Assets.
5.3 BULK SALES LAWS
CPH and TSI hereby waive compliance with the Bulk Sales Laws in
connection with the Contemplated Transactions.
5.4 EMPLOYEES AND EMPLOYEE BENEFITS
Immediately before Closing, TSI will terminate all of its employees
and will continue to have no employees through the Closing Date and
shall remain obligated in respect of the following liabilities or
obligations to such terminated employees: (i) all claims for
compensation, (ii) claims under TSI benefit plans (including vacation
time and sick leave), (iii) any failure to provide health continuation
coverage, if any, required by applicable law to any employees who do
not accept employment with CPH; (iv) all workers' compensation claims,
(v) all filings required in connection with the termination of
employment by TSI of such employees and (vi) all other claims,
responsibilities, obligations and other Liabilities associated with
TSI's or AMCON's relationship with such employees.
ARTICLE 6
CLOSING FOLLOWING EXERCISE OF OPTION
6.1 OBLIGATION TO TRANSFER ASSETS
If CPH exercises its Option prior to the Option Expiration Date, upon
the terms and subject to the conditions set forth in this Agreement,
TSI shall convey, assign, transfer and deliver to CPH, free and clear
of any Encumbrances other than Permitted Encumbrances, all of TSI's
right, title and interest in and to the Assets as set forth in Section
1.1.
6.2 TIME AND PLACE OF CLOSING
(a) Promptly following the exercise by CPH of the Option, the Parties
shall set a time and date for closing (the "Closing" and "Closing
Date") no later than thirty (30) days after TSI's receipt of CPH's
written notice.
(b) The Closing will take place at the offices of Holland & Xxxx LLP
in Boise, Idaho, commencing at 10:00 a.m. (local time) on the Closing
Date, unless CPH and TSI otherwise agree.
6.3 CONSIDERATION FOR TRANSFER OF ASSETS
(a) CANCELLATION OF NOTE. At Closing, CPH shall unconditionally
cancel and forever discharge TSI and AMCON from any unfulfilled
obligations, including without limitation the payment of any accrued
interest, under the Note. None of the Parties shall have any further
obligations, liabilities, or rights of any kind thereunder. CPH shall
deliver the original Note at Closing with notations that each is
cancelled and paid in full.
(b) TERMINATION OF GUARANTY. At Closing, the Guaranty shall be
deemed terminated by mutual agreement of the Parties and none of the
Parties shall have any further obligations, liabilities, or rights
thereunder.
(c) ASSUMPTION OF LIABILITIES. CPH shall assume the Assumed
Liabilities as provided in Section 1.3(a).
6.4 CLOSING OBLIGATIONS
In addition to any other documents to be delivered under other
provisions of this Agreement, at the Closing:
(a) TSI shall deliver to CPH:
(i) the Xxxx of Sale in the form of Exhibit D executed by TSI;
(ii) the Assignment and Assumption Agreement in the form of Exhibit
E executed by TSI;
(iii) for each interest in Real Property, a recordable special
warranty deed or such other appropriate document or instrument of
transfer, as the case may require, each in form and substance
satisfactory to CPH and its counsel and executed by TSI;
(iv) assignments of all Intellectual Property Assets and separate
Assignments of Copyrights, Patents, and Marks in the form of Exhibit F
executed by TSI;
(v) such other deeds, bills of sale, assignments, documents and
other instruments of transfer and conveyance as may reasonably be
requested by CPH in connection with the Water Rights, each in form and
substance satisfactory to CPH and its legal counsel and executed by
TSI; and
(vi) such other deeds, bills of sale, assignments, certificates of
title, documents and other instruments of transfer and conveyance as
may reasonably be requested by CPH, each in form and substance
satisfactory to CPH and its legal counsel and executed by TSI.
(b) CPH shall deliver to TSI:
(i) payment equal to all amounts paid by TSI with respect to the
maintenance of the Xxxxxxxx Ranch Reservoir Water Right from and after
September 1, 2007;
(ii) the cancelled Note and evidence of termination of the
Guaranty;
(iii) the Assignment and Assumption Agreement executed by CPH; and
(iv) such other documents as may reasonably be requested by TSI,
each in form and substance satisfactory to TSI and its legal counsel
and executed by CPH.
6.5 ALLOCATION
The consideration paid by CPH as set forth in Section 6.3 shall be
allocated among the Assets in accordance with Section 1060 of the Code
and pursuant to an allocation schedule to be agreed upon by the
Parties. Within ten (10) days following the date TSI receives notice
of CPH's exercise of the Option, TSI shall furnish CPH with a draft
allocation schedule. CPH shall have five (5) days after receipt to
propose any adjustments to such allocation schedule. If no such
adjustments are proposed within such period, TSI's draft allocation
schedule will become final. If adjustments are timely proposed, the
Parties will work diligently to develop an agreed and final allocation
schedule no later than ten (10) Business Days following CPH's proposal
of adjustments. TSI and CPH each agree to report the federal, state
and local income and other tax consequences of the transactions
contemplated herein in a manner which gives effect to the final
allocation schedule.
ARTICLE 7
ADDITIONAL COVENANTS
7.1 DISMISSAL OF LAWSUIT
Immediately following the Effective Date, the Parties shall prepare,
execute, and file with the Court as part of the record, a final
dismissal with prejudice of the Lawsuit in its entirety, including
with respect to all other secured creditors named as defendants in
connection with the foreclosure claims.
7.2 TSI LEGAL NAME
Immediately following the Closing Date, TSI shall change its legal
name to a name which does not include "Trinity Springs" or confusingly
similar phrases.
7.3 NONDISPARAGEMENT AND CONFIDENTIALITY
(a) No Party will disrupt, damage, impair, or otherwise interfere
with any other Party's business or operations. No Party shall at any
time publicly disparage any other Party to this Agreement. For
purposes of this Section, the term "publicly disparage" means to
discredit the other Party's agents, business, or property through a
written or oral communication to any other Person.
(b) Except as specifically provided in this Agreement, and except for
disclosures required by applicable laws and regulations, the Parties
will (i) keep confidential and not disclose to any other Person the
terms of this Agreement, (ii) keep confidential and not disclose to
any other Person any information that is provided by one party to the
other in connection with the performance of this Agreement that is
marked or otherwise identified as "confidential," "proprietary," or
with words of similar import, (iii) not disclose or use any such
confidential information for any purpose other than performance of
this Agreement. Notwithstanding the foregoing, each Party shall be
entitled to disclose the terms of this Agreement to (x) its financial,
legal, and other advisors and consultants and (y) CPH shall also be
entitled to disclose the terms of this Agreement to the Person
providing capital to CPH, interested in acquiring the assets or stock
of CPH, or considering a merger or consolidation with CPH, in each
case on a need-to-know basis; provided that such Party provides
advance written notice to the other Parties identifying the proposed
recipients and notifies the recipients that the information disclosed
is done so without any representation or warranty, and such recipients
are obligated to maintain the confidentiality thereof without further
disclosure to any other Person.
(c) After the Effective Date and through the Closing Date or Option
Expiration Date, as applicable, TSI and AMCON shall keep confidential
and not disclose to any other Person any proprietary or confidential
information of TSLtd or TSI relating to the Assets or operations of
TSLtd or TSI with respect to such Assets. Notwithstanding the
foregoing, TSI and AMCON shall be entitled to disclose such
confidential information to its financial, legal, and other advisors
and consultants in each case on a need-to-know basis and provided that
such recipients are obligated to maintain the confidentiality thereof
without further disclosure to any other Person.
7.4 PAYMENT OF ALL TAXES RESULTING FROM TRANSFER OF ASSETS
Each party shall be responsible for the payment of any state or local
sales, use or similar transfer Taxes that are imposed on such party
under applicable law on or as a result of the transfer of the Assets
under this Agreement, including but not limited to all Idaho state
sales or use Taxes.
7.5 RETENTION OF AND ACCESS TO RECORDS
After the Closing Date, CPH shall retain for a period consistent with
CPH's record-retention policies and practices, and as required under
applicable law to TSI and CPH, those Records of TSI delivered to CPH.
CPH also shall provide TSI and their Representatives reasonable access
thereto, during normal business hours and upon prior written notice,
for any reasonable business purpose specified by TSI in such notice.
After the Closing Date, TSI shall provide CPH and its Representatives
reasonable access to Records that are Excluded Assets, during normal
business hours and upon reasonable prior written notice, for any
reasonable business purpose specified by CPH in such notice.
7.6 FURTHER ASSURANCES
Subsequent to the Effective Date (or with respect to access to books
and records subsequent to the Closing Date), the parties shall
cooperate reasonably with each other and with their respective
Representatives in connection with any steps required to be taken as
part of their respective obligations under this Agreement or to comply
with orders or Governmental Bodies, including but not limited to, by
way of example, (i) CPH making books and records obtained from TSI and
AMCON available for clarifications and defense of claims of liability
by third parties with respect to the ownership by TSI of assets and
the operations of TSI, (ii) AMCON and TSI making books and records
available to CPH with respect to the operations of TSI, as such
operations may affect the ability of CPH to re-commence water
acquisition, bottling and sales involving the Water Rights, and (iii)
making TSI and AMCON personnel and professional advisers available, at
out-of-pocket cost to be reimbursed by CPH, to provide information and
assistance (A) in the prosecution of CPH's legal actions involving the
Xxxxxxx Coie law firm, to the extent such legal actions involve
matters related directly or indirectly to the matters that are the
subject of the settlement and release contained in this Agreement and
(B) the clarification, pursuit and defense of the Water Rights.
ARTICLE 8
GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise provided in this Agreement, each party to this
Agreement will bear its respective fees and expenses incurred in
connection with the preparation, negotiation, execution and
performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of its Representatives.
8.2 PUBLIC ANNOUNCEMENTS
Except as permitted under Section 7.3(b), any public announcement,
press release or similar publicity with respect to this Agreement or
the Contemplated Transactions will be issued, if at all, at such time
and in such manner as the Parties jointly determine unless required by
applicable law or legal process. Except with the prior consent of the
other Parties or as permitted by this Agreement or as required by
applicable law or legal process, no Party shall disclose to any Person
(i) the fact that any confidential information of TSI has been
disclosed to CPH or its Representatives, that CPH or its
Representatives have inspected any portion of the confidential
information of TSI, that any confidential information of CPH has been
disclosed to TSI, or its Representatives or that TSI, or its
Representatives have inspected any portion of the confidential
information of CPH or (ii) any information about the Contemplated
Transactions, including the status of such discussions or
negotiations, the execution of any documents (including this
Agreement) or any of the terms of the Contemplated Transactions or the
related documents (including this Agreement).
8.3 NOTICES
All notices, Consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed
given to a Party when (i) delivered to the appropriate address by hand
or by nationally recognized overnight courier service (costs prepaid);
(ii) sent by facsimile with confirmation of transmission by the
transmitting equipment; or (iii) received or rejected by the
addressee, if sent by certified mail, return receipt requested, in
each case to the following addresses, or facsimile numbers and marked
to the attention of the person (by name or title) designated below (or
to such other address, facsimile number, address or person as a Party
may designate by notice to the other Parties):
TSI:
0000 Xxxxxxxxx Xx.
Xxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Fax no.: (000) 000-0000
with a mandatory copy to:
Xxxx X. Xxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx & Xxxx LLP
000 X. Xxxxxxx Xxxx, Xxxxx 0000
Xxxxx, Xxxxx 00000
Fax no.: (000) 000-0000
AMCON:
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Fax no.: (000) 000-0000
with a mandatory copy to:
Xxxx X. Xxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx & Xxxx LLP
000 X. Xxxxxxx Xxxx, Xxxxx 0000
Xxxxx, Xxxxx 00000
Fax no.: (000) 000-0000
CPH:
Crystal Paradise Holdings, Inc.
c/o Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxx 00000
Fax no: (000) 000-0000
with a mandatory copy to:
Xxxxxxx X. Case
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxx 00000
Fax no: (000) 000-0000
8.4 JURISDICTION; SERVICE OF PROCESS
Any Proceeding arising out of or relating to this Agreement or any
Contemplated Transaction shall be brought in the Federal District
Court for the District of Idaho or Idaho State Court with venue in the
Fourth Judicial District, and each of the Parties irrevocably submits
to the jurisdiction of each such court in any such Proceeding, waives
any objection it may now or hereafter have to venue or to convenience
of forum, and agrees that all claims in respect of the Proceeding may
be heard and determined in any such court. The Parties agree that
either or both of them may file a copy of this paragraph with any
court as written evidence of the knowing, voluntary and bargained
agreement between the Parties irrevocably to waive any objections to
venue or to convenience of forum. Process in any Proceeding referred
to in the first sentence of this section may be served on any Party
anywhere in the world.
8.5 ENFORCEMENT OF AGREEMENT
The Parties acknowledge and agree that the other Parties would be
irreparably damaged if any of the provisions of this Agreement are not
performed in accordance with their specific terms and that any Breach
of this Agreement could not be adequately compensated in all cases by
monetary damages alone. Accordingly, in addition to any other right
or remedy to which a Party may be entitled, at law or in equity, it
shall be entitled to enforce any provision of this Agreement by a
decree of specific performance and to temporary, preliminary and
permanent injunctive relief to prevent Breaches or threatened Breaches
of any of the provisions of this Agreement, without posting any bond
or other undertaking.
8.6 WAIVER; REMEDIES CUMULATIVE
The rights and remedies of the Parties are cumulative and not
alternative. Neither any failure nor any delay by any Party in
exercising any right, power or privilege under this Agreement or any
of the documents referred to in this Agreement will operate as a
waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other
or further exercise of such right, power or privilege or the exercise
of any other right, power or privilege. To the maximum extent
permitted by applicable law, (i) no claim or right arising out of this
Agreement or any of the documents referred to in this Agreement can be
discharged by one Party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the
other party; (ii) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and
(iii) no notice to or demand on one party will be deemed to be a
waiver of any obligation of that party or of the right of the Party
giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in
this Agreement.
8.7 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements, whether written or
oral, between the Parties with respect to its subject matter
(including any letter of intent and any confidentiality agreement
between the Parties) and constitutes (along with the Schedules,
Exhibits and other documents delivered pursuant to this Agreement) a
complete and exclusive statement of the terms of the agreement between
the Parties with respect to its subject matter. This Agreement may
not be amended, supplemented, or otherwise modified except by a
written agreement executed by the party to be charged with the
amendment.
8.8 ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS
No Party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of
the other Parties. Subject to the preceding sentence, this Agreement
will apply to, be binding in all respects upon and inure to the
benefit of the successors and permitted assigns of the Parties.
Nothing expressed or referred to in this Agreement will be construed
to give any Person other than the Parties to this Agreement any legal
or equitable right, remedy or claim under or with respect to this
Agreement or any provision of this Agreement, except such rights as
shall inure to a successor or permitted assignee pursuant to this
Section.
8.9 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.
8.10 CONSTRUCTION
The headings of Articles and Sections in this Agreement are provided
for convenience only and will not affect its construction or
interpretation. All references to "Articles," "Sections" and
"Schedules" refer to the corresponding Articles, Sections and
Schedules of this Agreement.
8.11 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
8.12 GOVERNING LAW
This Agreement will be governed by and construed under the laws of the
State of Idaho, other than such laws that would direct the application
of the laws of another jurisdiction.
8.13 EXECUTION OF AGREEMENT
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all
of which, when taken together, will be deemed to constitute one and
the same agreement. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective
execution and delivery of this Agreement as to the Parties and may be
used in lieu of the original Agreement for all purposes. Signatures
of the Parties transmitted by facsimile shall be deemed to be their
original signatures for all purposes.
[SIGNATURE PAGE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
The individuals signing below represent, warrant, and covenant to each
other and the Parties that they are duly authorized to execute and
deliver this Agreement on behalf of the entity for which they have
signed.
CRYSTAL PARADISE HOLDINGS, INC., an Idaho corporation
By: /s/ Xxxxxx Xxxxx
Title: Chairman
TRINITY SPRINGS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
Title: President and Secretary
AMCON DISTRIBUTING CO.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
Title: Vice President and CFO
DEFINITION ANNEX
As used herein, the following terms shall have the meanings set forth
below:
"3-Year Note" has the meaning as set forth in Section 2.1(b).
"10-Year Note" has the meaning as set forth in Section 2.1(b).
"2004: Purchase Agreement" the Asset Purchase Agreement between the
Parties dated April 24, 2004, as amended.
"Agreement" this Mutual Release and Settlement Agreement.
"AMCON" AMCON Distributing Co., a Delaware corporation.
"AMCON Parties" has the meaning as set forth in Section 2.1(e)(i).
"AMCON Released Claims" has the meaning as set forth in Section
2.1(e)(ii).
"AMCON's Knowledge" - the actual knowledge of AMCON's chief executive
officer and chief financial officer.
"Accounts Receivable" (a) all trade accounts receivable and other
rights to payment from customers of TSI and the full benefit of all
security for such accounts or rights to payment, including all trade
accounts receivable representing amounts receivable in respect of
goods shipped or products sold or services rendered to customers of
TSI; (b) all other accounts or notes receivable of TSI and the full
benefit of all security for such accounts or notes; and (c) any claim,
remedy or other right related to any of the foregoing.
"Assets" has the meaning set forth in Section 1.1.
"Assumed Liabilities" has the meaning as set forth in Section
1.3(b).
"Breach" any breach of, or any inaccuracy in, any material
representation or warranty or any breach of, or failure to perform or
comply with any material covenant or material obligation, in or of
this Agreement or any other Contract, or any event which with the
passing of time or the giving of notice, or both, would constitute
such a breach, inaccuracy or failure.
"Bulk Sales Laws" the bulk-transfer provisions of the Uniform
Commercial Code (or any similar law).
"Business Day" any day other than (a) Saturday or Sunday or (b) any
other day on which banks in Idaho are permitted or required to be
closed.
"CPH" Crystal Paradise Holdings, Inc., an Idaho corporation.
"CPH Parties" has the meaning as set forth in Section 2.1(e)(i).
"CPH Released Claims" has the meaning as set forth in Section
2.1(e)(i).
"Closing" the closing of the purchase and sale of the Assets
pursuant to this Agreement.
"Closing Date" the date on which the Closing actually takes place.
"Code" the Internal Revenue Code of 1986, as amended.
"Consent" any approval, consent, ratification, waiver or other
authorization.
"Contemplated Transactions" all of the transactions specifically set
forth in this Agreement.
"Contract" any agreement, contract, any lease or rental agreement,
license, right to use, installment and conditional sale agreement,
consensual obligation, promise or undertaking (whether written or oral
and whether express or implied), whether or not legally binding.
"Copyrights" all registered and unregistered copyrights in both
published works and unpublished works.
"Court" has the meaning as set forth in Recital A.
"Damages" any loss, liability, claim, damage, expense (including
reasonable attorneys' fees and expenses) whether or not involving a
third-party claim.
"Effective Date" has the meaning as set forth in the Introductory
Paragraph to this Agreement.
"Encumbrance" any charge, claim, community or other marital property
interest, condition, equitable interest, lien, option, pledge,
security interest, mortgage, right of way, easement, encroachment,
servitude, right of first option, right of first refusal or similar
restriction, including any restriction on use, voting (in the case of
any security or equity interest), transfer, receipt of income or
exercise of any other attribute of ownership.
"Excluded Assets" has the meaning as set forth in Section 1.2.
"Guaranty" the Guaranty and Suretyship Agreement between AMCON and
CPH dated June 17, 2004, as amended.
"Governmental Authorization" any Consent, license, registration or
permit issued, granted, given or otherwise made available by or under
the authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body" any:
(a) nation, state, county, city, town, borough, village, district
or other jurisdiction;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature
(including any agency, branch, department, board, commission, court,
tribunal or other entity exercising governmental or quasi-governmental
powers);
(d) multinational organization or body;
(e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police, regulatory
or taxing authority or power; or
(f) official of any of the foregoing.
"Improvements" all buildings, structures, fixtures and improvements
located on the Land or included in the Assets, including those under
construction.
"Initial Option Period" has the meaning as set forth in Section
1.4(a).
"Intellectual Property Assets" all intellectual property owned or
licensed (as licensor or licensee) by TSI in which TSI has a
proprietary interest, including the Marks, Copyrights, Net Names, and
all know-how, trade secrets, confidential or proprietary information,
customer lists, technical information, data, process technology,
plans, drawings and blue prints.
"IRS" the United States Internal Revenue Service and, to the extent
relevant, the United States Department of the Treasury.
"Knowledge" an individual will be deemed to have Knowledge of a
particular fact or other matter if that individual is actually aware
of that fact or matter or a prudent individual could be expected to
discover or otherwise become aware of that fact or matter in the
course of conducting a reasonably comprehensive investigation
regarding the accuracy of any representation or warranty contained in
this Agreement. A Person (other than an individual) will be deemed to
have Knowledge of a particular fact or other matter if any individual
who is serving as an officer of that Person has, or at any time had,
Knowledge of that fact or other matter.
"Land" all parcels and tracts of land in which TSI has an ownership
interest.
"Lawsuit" has the meaning as set forth in Recital A.
"Legal Requirement" any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance,
principle of common law, code, regulation, statute or treaty.
"Liability" with respect to any Person, any liability or obligation
of such Person of any kind, character or description, whether known or
unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or
several, due or to become due, vested or unvested, executory,
determined, determinable or otherwise, and whether or not the same is
required to be accrued on the financial statements of such Person.
"Marks" TSI's name, all assumed fictional business names, trade
names, registered and unregistered trademarks, service marks and
applications.
"Mortgage" the Mortgage granted by TSI to CPH dated June 17, 2004.
"Net Names" all rights in internet web sites and internet domain
names presently used by TSI.
"Net Operating Losses" any losses associated with TSI's Business for
accounting and Tax purposes.
"Note" has the meaning as set forth in Section 2.1(c).
"Option" has the meaning as set forth in Section 1.1.
"Option Expiration Date" has the meaning as set forth in Section
1.4(b).
"Order" any order, injunction, judgment, decree, ruling, assessment
or arbitration award of any Governmental Body or arbitrator.
"Party" or "Parties" has the meaning as set forth in the
introductory paragraph of the Agreement.
"Permitted Encumbrances" all (i) liens for taxes, assessments or
other governmental charges not yet due and payable; (ii) restrictions,
conditions, reservations, limitations, easements and other matters of
record, current zoning and any condition the physical inspection of
the Real Property and an accurate and complete survey of the Real
Property would disclose, (iii) matters identified as Permitted
Encumbrances on the Schedules to this Agreement, and (v) any
Encumbrances in favor of CPH.
"Person" an individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, joint stock
company, trust, unincorporated association, joint venture or other
entity or a Governmental Body.
"Proceeding" any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, judicial
or investigative, whether formal or informal, whether public or
private) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Raw Materials Inventories" the raw materials used previously used
in TSI's business, such as boxes, labels, bottles, and other similar
materials.
"Real Property" the Land and Improvements and all appurtenances
thereto.
"Record" information that is inscribed on a tangible medium or that
is stored in an electronic or other medium and is retrievable in
perceivable form.
"Representative" with respect to a particular Person, any director,
officer, manager, agent, consultant, advisor, accountant, financial
advisor, legal counsel or other representative of that Person.
"Retained Liabilities" has the meaning as set forth in Section
1.3(a).
"Security Agreement" the Security Agreement between TSI and CPH
dated June 17, 2004.
"Security Instruments" has the meaning as set forth in Section
2.1(e).
"Shares" has the meaning as set forth in Section 2.1(f).
"Stock Power" has the meaning as set forth in Section 2.1(f).
"Subsidiary" with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests
having the power to elect a majority of that corporation's or other
Person's board of directors or similar governing body, or otherwise
having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests
having such power only upon the happening of a contingency that has
not occurred), are held by the Owner or one or more of its
Subsidiaries.
"TSI" Trinity Springs, Inc., a Delaware corporation.
"TSI's Knowledge" the actual knowledge of TSI's directors, officers,
and employees.
"TSI's Water Rights" all Water Rights or interests therein owned by
or belonging to TSI, including but not limited to (a) those Water
Rights represented by water right numbers 63-8206, 63-8207, 63-11051,
63-11053, 63-27144 and 63-11439, (b) any and all interests TSI holds
in Water Rights associated with Paradise Lodge and/or Paradise
Subdivision, including those held in the name of Paradise Homeowners'
Association (including but not limited to 63-4221, 63-10559, 63-32016,
and 63-10560), and (c) the Industrial Water Service Contract (Contract
No. 2-07-10-W0943) dated August 24, 1992, and any amendments or
assignment thereto, with the United States.
"Tangible Personal Property" all machinery, equipment, tools,
furniture, office equipment, computer hardware, supplies, materials,
vehicles and other items of tangible personal property (other than Raw
Materials Inventories) of every kind owned or leased by TSI (wherever
located and whether or not carried on TSI's books), together with any
express or implied warranty by the manufacturers or TSI's or lessors
of any item or component part thereof and all maintenance records and
other documents relating thereto.
"Tax" any income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, property,
environmental, windfall profit, customs, vehicle, airplane, boat,
vessel or other title or registration, capital stock, franchise,
employees' income withholding, foreign or domestic withholding, social
security, unemployment, disability, real property, personal property,
sales, use, transfer, value added, alternative, add-on minimum and
other tax, fee, assessment, levy, tariff, charge or duty of any kind
whatsoever and any interest, penalty, addition or additional amount
thereon imposed, assessed or collected by or under the authority of
any Governmental Body or payable under any tax-sharing agreement or
any other Contract.
"Tax Return" any return (including any information return), report,
statement, schedule, notice, form, declaration, claim for refund or
other document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or
enforcement of or compliance with any Legal Requirement relating to
any Tax.
"Water Right" any and all rights to the use or control of water.
The term shall be construed broadly to include, without limitation,
rights to natural flow water, ground water, spring water, waste water,
seepage, return flow, water of indeterminate origin, stored water,
water recovered from an aquifer storage and recovery project, the
right to store water, the right to store water in an aquifer storage
and recovery project, the right to recharge water into an aquifer. It
includes permits and licenses issued by the Idaho Department of Water
Resources. It includes all water rights or similar entitlements
reflected in any court decree (including any partial decree of the
Snake River Basin Adjudication) confirming the right or entitlement.
It also includes claims or entitlements (whether or not filed with a
court or the Department) based on having placed water to beneficial
use. It includes storage entitlements, whether by contract or
otherwise. It includes entitlements to the use of water based on
contract with the owner or acquirer of a water right (including
rental, lease, sale, purchase, exchange, subordination, or mitigation
agreement). It includes all ditch or canal company shares or other
entitlements to receive water from any ditch or canal company,
irrigation district or any other water delivery entity. It includes
all ditch rights, easements or rights-of-way associated with any
irrigation or other water delivery ditch, canal, lateral or pipeline.
EXHIBITS
Exhibit A Note
Exhibit B Amended and Restated Guaranty
Exhibit C Stock Power
Exhibit D Xxxx of Sale
Exhibit E Assignment and Assumption Agreement
Exhibit F Assignment of Marks and Copyrights
