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EXHIBIT 10.7
AMENDED AGREEMENT OF PURCHASE AND SALE OF
ALL STOCK OF SUSTAINABLE HARVEST, INC.
This agreement is made effective December 31, 1997, at Emeryville, California,
between XXXXX XXXXXXXX ("XXXXXXXX" hereafter) as Buyer, THANKSGIVING COFFEE
COMPANY ("TCC" hereafter), a California Corporation as Selling Shareholder, and
SUSTAINABLE HARVEST, INC., ("SH" hereafter) as Corporation being bought. This
agreement supersedes all previous agreements for the purchase and sale of
Sustainable Harvest stock.
I. RECITALS
1.1 TCC has represented that it owns all the outstanding stock of SH. XXXXXXXX
desires to purchase SH free and clear of all prior SH debts and obligations, and
TCC desires to sell to XXXXXXXX all the outstanding stock of SH (the Shares) so
that XXXXXXXX takes SH free and clear of all prior existing debts and
obligations; SH desires that this transaction be consummated. In consideration
of the mutual covenants, agreements representations and warranties contained in
this agreement, the parties agree as follows:
1.2 Subject to the terms and conditions set forth in this agreement, on the
closing date, Shareholder TCC will transfer and convey the SH Shares to Buyer
XXXXXXXX, and Buyer XXXXXXXX will acquire the SH Shares from Shareholder TCC.
II. PAYMENT
2.1 SH and XXXXXXXX, jointly and severally, promise to pay to TCC, or order, the
Principal sum of Eighty-Nine Thousand Dollars ($89,000), plus interest on the
outstanding Principal balance at the Bank of America reference rate ("Prime"),
redetermined annually as of the anniversary date hereof, interest to be
calculated from the effective date of this Agreement until payment in full of
the outstanding Principal computed on the basis of a three hundred sixty-five
(365) day year and actual days elapsed.
2.2 Payments shall be made by XXXXXXXX and/or SH as follows:
A. December 1, 1998 - $10,000, plus interest
B. December 1, 1999 - $10,000, plus interest
C. December 1, 2000 - $10,000, plus interest
D December 1, 2001 - $10,000, plus interest
E. December 1, 2002 - Balance of principal, plus interest
2.3 All prepayments shall be credited against Principal due.
2.4 Payments shall be made in lawful currency of the United States of America at
such reasonable place as may be designated from time to time by TCC.
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2.5 Each payment received on or after the due date shall be credited in the
following order: late payment charges; fees, charges, advances and obligations;
collection costs; attorneys' fees; interest; and Principal to the extent of any
balance. On payment of any portion of Principal, interest shall cease accruing
against the amount so credited to Principal.
III. SECURITY FOR PAYMENTS
3.1 The promise to pay by XXXXXXXX and/or SH pursuant to this Agreement is
secured by the granting to TCC of a first priority security interest, which
secures the obligations herein, in all the Stock in SH acquired by XXXXXXXX and
in all the assets of SH, specifically including, but not limited to, the
"Sustainable Harvest" trademark, all SH trade relationships, and all the certain
tangible and intangible personal property which is located at 0000 - 00xx
Xxxxxx, Xxxxxxxxxx, XX wherein SH's business (the "Business") is being
transacted. Public notice of said security interest rights are intended to be
given by the filing of a Financing Statement (form UCC-1) with the California
Secretary of State in Sacramento, California which shall be executed and
delivered to TCC on demand if not concurrently with this Agreement. For this
purpose XXXXXXXX grants to TCC a pledge of the Stock.
3.2 If XXXXXXXX and/or SH sells, transfers and/or conveys in any manner
whatsoever all, or substantially all, of the security for this Agreement, all
accrued interest and all principal must be paid in full concurrently with
consummation of such transaction, unless TCC consents in writing to such
transaction prior to its consummation and permits the assumption of some or all
of the obligations hereunder. Such consent may be not be unreasonably withheld.
IV. TCC'S RIGHTS ON DEFAULT
4.1 A. Upon default of any payment hereafter due from XXXXXXXX and/or SH to TCC
hereunder, TCC shall give XXXXXXXX and SH thirty (30) days written notice of
default. If said default is not cleared, waived, compromised or otherwise the
subject of letter agreement between the parties executed within said thirty
(30)-day period until arrearages are cured in full, interest shall be increased
and shall accrue at an adjusted applicable rate of one and one-half percent
(1.5%) per month and any unpaid interest shall be added to the Principal monthly
thereafter and if unpaid shall accrue like interest until paid. Any amount due
hereunder, whether principal, interest, late charges or otherwise, which is not
paid when due shall itself bear interest at such rate.
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B. All reasonable costs of collection, litigation costs and attorneys's fees
actually incurred in collecting the amounts due under the Agreement, or in
connection with the curing of any Default shall be added to the Principal.
4.2 Defaults are any failure to completely and timely perform any provision
hereof and includes:
A. A general assignment for benefit of creditor;
B. Filing of a bankruptcy petition or a petition for relief under the provisions
of any bankruptcy act by XXXXXXXX and/or SH.
C. Appointment of a receiver or trustee to take possession of the property of
XXXXXXXX and/or SH.
V. COFFEE OWNERSHIP
5.1 XXXXXXXX and SH agree and acknowledge that on December 2, 1997 no green bean
inventory remains under the control of SH and no green bean inventory remains
which is the sole and exclusive property of TCC.
VI. Coffee Purchases by TCC
TCC will purchase from SH coffee beans in a manner consistent with current
business practices between the two companies as follows:
6.1 TCC shall purchase from SH not less than *** pounds (which is ***% of the
1997 volume) of coffee beans per year for a period of five (5) years for
delivery between December 31, 1997, and December 31, 2002, at a price of *** per
pound over "landed coffee costs."
6.2 As used herein "landed coffee costs" means the price of coffee as billed by
the producing country exporter, shipping costs, customs charges, organic
royalties and other normal coffee costs of delivering the coffee to Oakland
warehouse facilities.
6.3 The *** per per pound SH margin is intended to reflect the normal sales
price charged by SH to other roasters who buying a similar product in terms of
selection criteria, volume and quality, and payment conditions. TCC shall have
the right to inspect, on reasonable notice during business hours XXXXXXXX'x
and/or SH's books to verify such sales information.
6.4 If the TCC purchase is less than *** pounds in any year between December 31,
1997 and December 31, 2002 the
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obligation of XXXXXXXX and/or SH to pay the amount set forth in para. 2.2 for
said year shall be proportionately reduced for that year and said reduction
shall not be thereafter due.
6.5 If DG/SH terminate or substantially terminate business operations or their
relationship with organic and/or shade-grown sources during the pendency of
this agreement so as to be unable to provide organic and/or shade-grown coffees
in accordance with the history of TCC/SH business dealings than all amounts due
hereunder shall immediately be due and payable, notwithstanding that the SH/TCC
Sales Calculation for the year in which such event occurs will decrease by
reason of such event.
6.6 All purchase orders from TCC will be made by written PO's. SH will provide
TCC with information and credentials on each supply source for TCC's use and
ability to verify appropriate sources consistent with its stated intent and
consistent with the manner of business occurring between the two companies in
1997.
VII. WARRANTIES OF SELLING PARTY TCC
TCC warrants that:
7.1 SH is a corporation duly organized validly existing, and in good standing
under the laws of California; is duly qualified to do intrastate business; and
is in good standing in all states and countries in which it conducts business.
7.2 The authorized capital stock of SH consist of 1,000,000 shares of common
stock, with no par value of which 1,000 shares (the Shares) are issued and
outstanding. All the 1,000 Shares are validly issued, fully paid, and
nonassessable, and such shares have been so issued in full compliance with all
federal and state securities laws. There are no outstanding subscriptions,
options, rights, warrants convertible securities, or other agreements or
commitments obligating Corporation to issue or to transfer from treasury any
additional shares of its capital stock of any class.
7.3 Shareholder TCC is the owner, beneficially and of record, of all the 1,000
SH Shares free and clear of all liens, encumbrances, security agreements,
equities, options, claims, charges, and restrictions, other than the restriction
set forth in a permit dated February 18, 1997, issued to SH by the California
Commissioner of Corporations. Shareholder has full power to transfer the SH
Shares to Buyer without obtaining the consent or approval of any other person or
governmental authority, other than the consent of the Commissioner of
Corporations required by the permit referred to in the preceding sentence.
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7.4 On the year end financial reports of SH as of December 2, 1998, the
following items appears as assets:
1. Intercompany accounts payable due to TCC from SH - $74,851.23.
2. Inventory - $-0-.
3. Cash - $7,476.53.
4. Accounts Receivable due SH - $9,496.00
5. Prepaid coop coffee contract/producer receivable - $30,000.00
6. Physical Assets - $4,496.00
The parties agree as follows with respect to these enumerated assets
treated herein as part of the payment of the purchase price by XXXXXXXX to TCC:
1. Item 1. Is eliminated. Neither XXXXXXXX nor SH shall be obligated to pay said
$74,851.53 upon closing of this agreement or any other time.
2. XXXXXXXX shall immediately close the account containing the sum of $7,476.53
(item 3) and shall promptly pay TCC said sum. TCC shall immediately credit said
sum against the sales price hereunder of $89,000.00 plus interest, if any,
thereon.
3. XXXXXXXX shall liquidate items 4 and 5 as soon as possilbe but in any event
not later than March 1, 1998 and shall promptly pay TCC the proceeds of said
liquidation. TCC shall immediately credit the sums received against the sales
price hereunder of $89,000.000 plus interest thereon.
7.5 TCC is responsible for all operating expenses of SH up to and including
December 2, 1997. XXXXXXXX and/or SH is responsible for all operating expenses
of SH commencing December 3, 1997.
7.6 Since December 2, 1997 SH has entered into no transactions except in the
ordinary course of business.
7.7 Except as otherwise set forth herein XXXXXXXX purchases SH shares hereunder
free and clear of any and all SH debts and obligations which arose on or before
December 2, 1997. Except as otherwise set forth herein XXXXXXXX and SH have no
obligation for any debt or obligation of SH which arose on or before December 2,
1997.
VIII. REPRESENTATIONS AND WARRANTIES
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8.1 TCC warrants that it has done nothing which would make the intended
achievement of the purpose of the Agreement impossible, nor has it modified the
capital structure or stock ownership of SH in any manner since its formation.
8.2 XXXXXXXX warrants that he has done nothing which would make the intended
achievement of the purpose of the Agreement impossible, nor has it modified the
capital structure or stock ownership of SH in any manner since its formation.
8.3 Neither party is aware of any fact or problem which has not been previously
disclosed which if disclosed would materially affect the other party's decision
to proceed.
8.4 The execution and delivery of this Agreement and the performance of TCC's
obligations under it have been duly authorized by the necessary corporate
action.
8.5 Effective concurrently herewith, all persons other than XXXXXXXX who hold
officer or director positions have resigned such positions.
8.6 XXXXXXXX warrants that he has full power and authority to execute this
Agreement.
8.7 XXXXXXXX agrees that he has no claim against TCC arising out of or related
to the ownership, or operations of SH that arise before or after December 2,
1997.
8.8 XXXXXXXX represents that he will be the sole owner of the SH stock and
indirectly in the Business, as his sole and separate property. XXXXXXXX warrants
and represents that he has full power and authority to execute this Agreement on
behalf of any and all other persons who have any interest in the subject matter
hereof and who are aligned in any way with his interests hereunder or in SH,
such as a spouse or undisclosed partner.
IX. CONDITIONS PRECEDENT TO XXXXXXXX'X PERFORMANCE
9.1 This Agreement has been duly and valid authorized and, when executed and
delivered by TCC, will be valid, binding, and enforceable in accordance with its
terms, except as limited by bankruptcy and insolvency laws and by other laws and
equitable principles affecting the rights of creditors generally.
9.2 TCC is the record owner of all issued shares of stock of SH. On the transfer
and delivery of the Shares to XXXXXXXX in accordance with the Agreement,
XXXXXXXX will acquire the rights in the shares had by buyer free of any adverse
claim, except for the restrictions set forth herein.
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9.3 The execution and delivery of this Agreement and the performance of TCC's
covenants and obligations under it, will have been duly authorized by all
necessary corporate action, and XXXXXXXX will have received copies of all
resolutions pertaining to that authorization.
9.4 TCC will have delivered to XXXXXXXX, except as otherwise requested by
XXXXXXXX, the written resignations of all the officers and directors of SH, and
will cause any other action to be take with respect to these resignations that
XXXXXXXX may reasonable request.
X. THE CLOSING
10.1 The closing will take place prior to February 15, 1998 at a location
mutually agreed upon by the parties.
XI. TCC'S INDEMNITY
11.1 TCC will indemnify, defend, and hold harmless XXXXXXXX against and in
respect of claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries, and deficience, including interest, penalties, and
reasonable attorney fees, that he may incur or suffer, which arise, result from
or relate to any breach of, or failure by TCC to perform, any of its
representations, warranties, covenants, or agreements in this Agreement or in
any schedule, certificate, exhibit, or other instrument furnished or to be
furnished by TCC under this Agreement.
A. Notwithstanding paragraph 11.1 herein, TCC's indemnity obligation shall not
apply to liability (1) arising out of or related to any contract entered into by
XXXXXXXX in carrying forward the business of SH which contract was not disclosed
by XXXXXXXX to TCC or which contract was otherwise unknown to TCC on the
effective date of this agreement; (2) arising out of or related to any acts
undertaken by XXXXXXXX inc carrying forward the business of SH concerning which
TCC had no knowledge on the effective date of this agreement; and (3) arising
out of or related to any failure or failures to act by XXXXXXXX in a matter
concerning which XXXXXXXX had the exclusive duty and responsibility to ct in
carrying forward the business of SH and which failure or failures to act are
unknown to TCC on the effective date of this agreement.
B. To the extent that paragraph 11.1 A applies to any contract or act or failure
to act XXXXXXXX and SH shall be jointly and severally liable for any costs
and/or expenses incurred by TCC in connection therewith.
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11.2 Except as stated herein, XXXXXXXX agrees that he holds no claim of any kind
against TCC or hereby irrevocably waives and releases such claims, if any.
11.3 Except as stated herein, TCC agrees that they hold no claim of any kind
against XXXXXXXX or hereby irrevocably waives and releases such claims, if any.
11.4 XXXXXXXX and TCC each acknowledge that this Agreement has been entered into
to completely settle all matter between XXXXXXXX on one hand and TCC on the
other for any purpose and XXXXXXXX land TCC each waive with respect to such
claims any benefits accruing by reason of California Civil Code Section 1542,
which provides:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
11.5 The term TCC as used herein with respect to the above release and indemnity
provision hereof shall mean and include TCC as identified above, and its
affiliates, officers, shareholders and directors, and specifically Xxxx Xxxxxxx
and Xxxx Xxxxxxx, any and all entities owned or controlled by any of the
foregoing and the representatives, agents, attorneys, accountants, and lenders
of each and all other persons having any interest whatsoever, whether through
community property, joint ownership, partnership, joint enterprise, or otherwise
in the subject matter hereof, and the successors, heirs, and assigns of each to
the fullest possible including of persons and entities.
XII. EXPENSES AND RELATED PROVISION
12.1 Each party will pay all costs and expenses incurred or to be incurred by it
in negotiating and preparing this Agreement and in closing and carrying out the
transactions contemplated by this Agreement.
12.2 This Agreement constitutes the entire Agreement between the parties
pertaining to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and understands of the parties. No
supplement, modification, or amendment of this Agreement will be binding unless
executed in writing by all the parties. No waiver of any of the provisions of
this agreement will constitute a waiver of any other provision, whether or not
similar, nor will any waiver constitute a continuing waiver. No waiver will be
binding unless executed in writing by the party making the waiver.
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12.3 This agreement will be binding on, and will inure to the benefit of, the
parties to it and their respective heirs, legal representatives, successors, and
assigns.
12.4 All notices, requests, demands and other communications under this
Agreement must be in writing and will be considered to have been duly given on
the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
To Selling Parties at: Thanksgiving Coffee
X.X. Xxx 0000
Xxxx Xxxxx, XX 00000
To Buyer at: Xxxxx XXXXXXXX
0 Xxxxxxxxx Xxxxx, #000
Xxxxxxxxxx, XX 00000
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
12.5 The failure of any party at any time to require performance by the other
parties of any provision hereof shall not be taken or held to be a waiver of the
provision itself.
12.6 The parties will execute any additional documents necessary or appropriate
to carry out the intent of this Agreement.
12.7 No party hereto is currently subject to the jurisdiction of any bankruptcy
court in receivership.
12.8 The facsimile transmission of a signed copy hereof to the other party or to
such party's attorney, followed by a faxed acknowledgment of receipt, shall
constitute delivery of said signed document. The parties agree to confirm such
delivery by subsequent mailing or personal delivery of a signed copy to the
other party or such party's attorney.
12.9 This Agreement shall be considered a contract made under California law,
and the right and obligations of the parties hereto shall be construed in
accordance with such law.
12.10 This instrument contains all of the agreement, understandings,
representations, conditions, warranties and covenants made between the parties
hereto with respect to XXXXXXXX'x purchase of SH from TCC. TCC and XXXXXXXX
shall only be liable for representations included in this written
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document and no others. All modifications and amendments hereto must be in
writing and signed by the parties.
12.11 If any provision of this Agreement is held invalid or unenforceable by any
court of final jurisdiction, it is the intent of the parties that all other
provisions of this agreement be construed to remain fully valid, enforceable,
and binding on the parties.
In witness whereof, the parties of this Agreement have duly executed it on the
day and year first above written.
Dated: 2/12/98 /s/ Xxxxx XXXXXXXX
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Dated: 2/12/98 Thanksgiving Coffee Company, Inc.
Shareholder
By /s/ Xxxx Xxxxxxx
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Dated:2/12/98 SUSTAINABLE HARVEST, INC.
By /s/ Xxxxx Xxxxxxxx
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President
By /s/ Xxxx Xxxxxxx
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SECRETARY/OWNER/DIRECTOR
By /s/ Xxxx Xxxxxxx
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DIRECTOR and OWNER
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