ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of May 25,2000 by and
between PREMIER VALLEY FOODS, INC., a Delaware corporation ("Buyer"), and MADE
IN NATURE COMPANY, INC., a California corporation ("Seller"'), and SONOMAWEST
HOLDINGS, INC., a California corporation (the "Shareholder") with reference to
the following facts:
R E C I T A L S :
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A. Seller is engaged in the business of producing, packing and distributing
various consumer food products under the trademark "Made in Nature" and various
related marks (the "Business").
B. Buyer is also in the business of producing, packing and distributing
various consumer food products, and Buyer and Seller are parties to that certain
Manufacturing/Packing Agreement dated September 22, 1999 (the "Co-Pack
Agreement") under which Buyer packs and distributes dried fruits and vegetables
for Seller under the "Made in Nature" trademark.
C. Seller desires to transfer its intellectual property rights associated
with the trademark "Made in Nature" and various related marks and its dried
fruit inventories as more particularly described in Section 1.1 of this
Agreement and to transfer certain related obligations and liabilities of Seller
in connection therewith on the other terms and conditions hereinafter set forth.
D. Buyer desires to acquire such assets and is willing to assume such
obligations and liabilities under the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement, the parties agree
as follows:
1. PRINCIPAL TERMS
1.1. Assets to be Purchased. Subject to the terms and conditions set forth
in this Agreement, Seller agrees to sell, convey, transfer, assign, and deliver
to Buyer, and Buyer agrees to purchase from Seller, the following assets and
properties of the~ Business (the "Acquired Assets"), which shall include,
without limitation:
(a) All intellectual property rights of Seller, including without
limitation, the trademark "Made in Nature" and any related marks, as more
particularly described on the attached Schedule 1.1(a) ("Intellectual Property
Rights").
(b) Seller's entire inventory of dried fruit (including raw material
inventories, finished goods inventories and packaging materials inventories) as
more specifically described on the attached Schedule 1.1(b) (the "Inventories").
(c) All goodwill related to the Business to the extent that it relates
to the Intellectual Property Rights.
1.2. Liabilities. Subject to the provisions of this Agreement, Buyer shall
not assume any of Seller's obligations except the liabilities described on
Schedule 1.2 (each of the foregoing assumed obligations collectively referred to
as the "Assumed Liabilities"). With the exception of the Assumed Liabilities,
Buyer shall not assume any liability or obligation arising out of occurrences
prior to the Closing Date.
1.3. Purchase Price.
1.3.1 The purchase price for the Intellectual Property Rights shall be
$750,000 and the purchase price for the Inventories shall be $317,944.42. In the
event that any of the Inventories are not already located in Buyer's facilities,
such Inventories shall be shipped to Buyer's facilities at Buyer's sole cost and
expense under arrangements made strictly between Buyer and the third parties
where the Inventories are located.
1.3.2 Upon the terms and subject to the conditions contained in this
Agreement, in consideration for the Acquired Assets and in full payment
therefor, Buyer shall (i) assume the Assumed Liabilities as provided in Section
1.2 of this Agreement, and (ii) deliver to Seller on the Closing Date by wire
transfer of funds by Buyer to Seller's designated bank account, the amount
determined pursuant to Section 1.3.1.
1.4. Allocation. The Purchase Price for the Acquired Assets shall be
allocated as follows: $750,000 shall be allocated to Intellectual Property
Rights and the balance of the purchase price shall be allocated among the
Inventories as provided on the attached Schedule 1.1(b). Each of the parties
agrees to report this transaction for federal and state tax purposes in
accordance with the allocation of the Purchase Price set forth herein.
1.5. Termination of Co-Pack Agreement. The Co-Pack Agreement shall be
deemed terminated effective as of the Closing.
2. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
Seller and Shareholder, jointly and severally, represent and warrant that:
2.1. Due Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. Seller
has all requisite corporate power and authority to execute, deliver and perform
this Agreement and the Ancillary Documents and to consummate the transactions
contemplated hereby and thereby. Seller has the requisite corporate power and
authority and all licenses and permits necessary to own or lease and operate the
Acquired Assets and carry on the Business as it is presently being conducted.
Seller does not have and has never had any subsidiaries or affiliated companies.
2.2. Due Authorization. The execution, delivery and performance by
Seller of this Agreement and the other documents provided for herein and the
consummation of the transaction contemplated hereby and thereby have been duly
authorized by all requisite corporate action. This Agreement and the other
documents to which any of the Selling Parties are a party have been duly
executed and delivered by Selling Parties, and constitute or will constitute, as
the case may be, valid and binding obligations of Selling Parties, enforceable
in accordance with their respective terms.
2.3. Financial Statements.
2.3.1 Attached as Schedule 2.3 hereto are true, correct and complete
copies of (i) an internally prepared balance sheet of the Seller as of June 30,
1999 (the "Balance Sheet") and the related income statement for the 12-month
period then ended, and (ii) an internally prepared balance sheet of the Seller
as of March 31, 2000 (the "Interim Balance Sheet") and the related income
statement for the three-month period then ended. Such financial statements
present fairly the financial position and results of operations of the Seller at
the dates and for the periods to which they relate and have been prepared in
accordance with accounting principles consistently applied.
2.3.2 As of the date of the Interim Balance Sheet, the Seller had no
material liability of any nature, whether known or unknown and whether accrued,
absolute, contingent or otherwise, of a type which should be reflected in the
Interim Balance Sheet that was not fully disclosed, reserved against or
reflected therein. The Seller has not incurred any such material liability since
the date of the Interim Balance Sheet, except for any liability that has arisen
in the Ordinary Course of Business since such date.
2.4. Absence of Certain Changes and Events. Since the date of the Interim
Balance Sheet and until the date of this Agreement, there has not been any:
(a) Transaction by Seller relating to the Business or the Acquired
Assets except in the ordinary course of business as conducted on that date;
(b) Destruction, damage to, or loss of any asset of Seller (whether or
not covered by insurance) that materially and adversely affects the financial
condition, business, or prospects of the Business;
(c) Amendment or termination of any contract, agreement, or license to
which Seller is a party relating to or affecting the Acquired Assets-
(d) Mortgage, pledge, or other encumbrance of any of the Acquired
Assets;
(e) Waiver or release of any right or claim of Seller relating to or
affecting the Acquired Assets;
(f) Commencement or notice or threat of commencement of any civil
litigation or any governmental proceeding against or investigation of Seller or
the Shareholders relating to or affecting the Acquired Assets;
(g) Agreement by Seller to do any of the things described in the
preceding clauses (a) through (f); or
(h) Other event or condition of any character that has or might
reasonably have a material and adverse effect on the financial condition,
business, assets, liabilities, or prospects of the Business.
2.5. 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 Selling
Parties in connection with the execution, delivery, performance, validity, and
enforceability of this Agreement or the consummation of the transactions
contemplated by this agreement.
2.6. Title to Assets. Except as set forth on the attached Schedule 2.6,
Seller has good and marketable title to the Acquired Assets, and all the
Acquired Assets are free and clear of restrictions on or conditions to transfer
or assignment, and free and clear of mortgages, liens, pledges, charges,
encumbrances, equities, claims, easements, rights of way, covenants, conditions,
or restrictions, except for (1) those disclosed in the Balance Sheet or the
Interim Balance Sheet; (2) the lien of current taxes not yet due and payable;
and (3) possible minor matters that, in the aggregate, are not substantial in
amount and do not materially detract from or interfere with the present or
intended use of the Acquired Assets or materially impair the Business. None of
the Shareholder; nor any officer, director, or employee of Seller or
Shareholder; nor any spouse, child, or other relative of any of these persons,
owns, or has any interest, directly or indirectly, in the Inventories or any
copyrights, patents, trademarks, trade names, or trade secrets used by Seller in
connection with the Business.
2.7. Compliance with Other Instruments and Laws. Seller is not in violation
of any term of any charter, by-law, mortgage, indenture, instrument, agreement,
judgment, decree or order or of any law, ordinance, rule or governmental
regulation (including without limitation those relating to environmental
protection, pollution, sanitation, conservation, hazardous substances, or
contaminants) applicable to Seller which violation would materially interfere
with Buyer's use of the Acquired Assets or operation of the Business, or result
in a material fine, penalty or other liability. Seller has all approvals, and is
in compliance with, all consents, permits, licenses, orders, ratings,
authorizations and approvals of, or registration or declarations with, all
governmental authorities, agencies, bureaus, commissions or regulatory bodies
which are necessary for it to operate the Business as presently operated
(collectively, the "Approval") and which are necessary to sell the Acquired
Assets free from any and all claims and liens of third parties.
2.8. Litigation. Except as set forth on Schedule 2.8 hereto, there are no
actions, suits, claims, proceedings or governmental investigations against
Seller with respect to the Acquired Assets, or to which the Acquired Assets are
subject, before any court or governmental agency or authority, pending or, to
the knowledge of Selling Parties threatened, which could have an adverse effect
on the Acquired Assets.
2.9. Inventory. All of the classes of goods included within the
Inventories, whether or not reflected in the Balance Sheet or the Interim
Balance Sheet, consist of a quality and quantity usable and salable in the
ordinary course of business. All of such goods have been priced at the lower of
cost or market on a first-in, first-out basis. The quantities of each item
included within such inventories (whether raw materials, work-in-process, or
finished goods) are not excessive, but are reasonable in the present
circumstances of the Business.
2.10. Intellectual Property.
(a) Schedule 1.1(a) contains a complete and accurate list and summary
description of all marks used by Seller in connection with the Business. Seller
is the owner of all right, title, and interest in and to each of such marks,
free and clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims.
(b) All marks listed on Schedule 1.1(a) have been registered (or
applications for registration have been filed) with the United States Patent and
Trademark Office, or the comparable govern-mental body in any foreign
jurisdiction listed on the attached Schedule 1.1(a) and are currently in
compliance with all formal legal requirements (including the timely
post-registration filing of affidavits of use and incontestability and renewal
applications), and are not subject to any maintenance fees or taxes or actions
falling due within ninety days after the Closing Date.
(c) No mark listed on Schedule 1.1(a) has been or is now involved in
any opposition, invalidation, or cancellation and, to Sellers' knowledge, no
such action is threatened with the respect to any of such marks.
(d) To Selling Parties' knowledge, there is no potentially interfering
trademark or trademark application of any third party.
(e) No mark listed on Schedule 1.1(a) is infringed or, to Selling
Parties' knowledge, has been challenged or threatened in any way. No mark listed
on Schedule 1.1(a) infringes or is alleged to infringe any trade name,
trademark, or service mark of any third party.
(f) All products and materials containing a mark listed on Schedule
1.1(a) bear the proper registration notice where permitted by law.
2.11. Taxes. Within the times and in the manner prescribed by law, Seller
has filed all federal, state, and local tax returns required by law and has paid
all taxes, assessments, and penalties due and payable. The federal and state
income tax returns of Seller have not been audited by the Internal Revenue
Service or any state taxing authority The provisions for taxes reflected in the
balance sheet included in the Interim Financial Statements, are adequate for any
and all federal, state, county, and local taxes for the period ending on the
date of that balance sheet and for all prior periods, whether or not disputed.
There are no present disputes as to taxes of any nature' payable by Seller.
2.12. Contracts. Seller has delivered to Buyer a copy of (or provided a
written description of any oral) (a) mortgage, indenture, note or installment
obligation or other instrument or contract primarily related to the Acquired
Assets, (b) guaranty of any obligation by Seller or any of the Selling
Shareholders or other person with respect to the Acquired Assets, (c) agreement
or arrangement limiting in any way the freedom of Selling Parties to sell any of
the Acquired Assets or to compete in any line of business, with any person or
other entity or in any geographical area, which is presently in effect, (d)
license agreements to which Seller is a party and which relate to the Acquired
Assets; and (e) any other agreements relating to the Acquired Assets or the
Business under which Seller is obligated to render, or is entitled to receive,
or is expected to render or receive any performance on or after the Closing
Date. A list of the items described by the previous sentence ("Contracts") is
set out on Schedule 2.12. All of the Contracts are in full force and effect and,
as to each such Contract, there does not exist thereunder any default by Seller
or, to the knowledge of Selling Parties, any other party thereto. Except as set
forth on Schedule 2.12, no consents by any party to a Contract listed on
Schedule 2.12 are required in connection with the transactions contemplated by
this Agreement.
2.13. Insurance. Schedule 2.13 to this Agreement is a description of all
insurance policies held by Seller concerning the Business and the Acquired
Assets. All of these policies are in the respective amounts set forth on
Schedule 2.13. Seller has maintained and now maintains (i) insurance on al ' 1
their assets and businesses of a type customarily insured by a person operating
a business similar to that of the Business, including covering product liability
insurance, and (ii) adequate insurance protection against all liabilities,
claims, and risks against which it is customary to insure. Seller is not in
default with respect to payment of premiums on any such policy. Except as set
forth in Schedule 2.13, no claim is pending under any such policy.
2.14. Brokers or Finders. None of the Selling Parties, or any of their
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. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Selling Parties as follows:
3.1. Due Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Buyer has
the corporate power and authority to execute, deliver and perform this Agreement
and the other documents contemplated hereby and to consummate the transactions
contemplated hereby and thereby. Buyer has the requisite corporate power and
authority and all licenses and permits necessary to own or lease and operate the
Acquired Assets.
3.2. Due Authorization. The execution, delivery and performance by Buyer of
this Agreement and the other documents provided for herein and the consummation
of the transaction contemplated hereby and thereby have been duly authorized by
all requisite corporate action. This Agreement and the other documents to which
the Buyer is a party have been duly executed and delivered by Buyer, and
constitute or will constitute, as the case may be, valid and binding obligations
of Buyer, enforceable in accordance with their respective terms.
3.3. 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, and
enforceability of this Agreement or the consummation of the transactions
contemplated by this agreement.
3.4. Brokers or Finders. Buyer and its officers and agents have incurred no
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.
3.5. Complete Disclosure. None of the representations and warranties made
by Buyer herein or in any document delivered by Buyer, or on its behalf,
contains or will contain any untrue statement of material fact, or omit to state
any material fact, the omission of which would be misleading.
4. OBLIGATIONS BEFORE CLOSING
4.1. Operation of Business. Until the Closing Date, Seller shall (i)
operate the Business in the ordinary course as has been operated prior to the
date hereof, (ii) maintain all the Acquired Assets in good condition, (iii)
perform its obligations under all agreements binding upon it, (iv) maintain all
licenses, permits and authorizations, (v) maintain all insurance as disclosed on
Schedule 2.13, and (vi) maintain good will of suppliers, customers, and others
having business relations with Seller.
4.2. 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 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.
4.3. Access. Prior to the Closing Date, Buyer, its employees, and agents
shall be permitted reasonable access to the employees, records and property of
Seller during regular business hours. After the Closing Date, Seller, its
employees and agents, shall be permitted reasonable access to the records of
Seller if necessary to comply with law.
4.4. Consents and Approvals. Selling Parties and Buyer will use their best
efforts to obtain all consents and approvals required to be obtained in order to
consummate the transactions contemplated hereby.
4.5. Negative Covenant. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Selling
Parties will not, without the prior consent of Buyer, take any affirmative
action, or fail to take any reasonable action within their or its control, as a
result of which any of the changes or events listed in Section 2.4 is likely to
occur.
4.6. Notification. Between the date of this Agreement and the Closing Date,
each of the Selling Parties will promptly notify Buyer in writing if such
Selling Party becomes aware of any fact or condition that causes or constitutes
a breach of any of the representations and warranties of Selling Parties as of
the date of this Agreement, or if such Selling Party becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in any Schedule
to this Agreement if the Schedule were dated the date of the occurrence or
discovery of any such fact or condition, Selling Parties will promptly deliver
to Buyer a supplement to such Schedule specifying such change. During the same
period, each of the Selling Parties will promptly notify Buyer of the occurrence
of any breach of any covenant of Selling Parties in this Article 4 or of the
occurrence of any event that may make the satisfaction of the conditions in
Section 5.1 or Section 5.2 impossible or unlikely.
4.7. No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 7.1, Selling Parties will not, directly or
indirectly solicit, initiate, or encourage any inquiries or proposals from,
discuss or negotiate with, provide any nonpublic information to, or consider the
merits of any unsolicited inquiries or proposals from, any person (other than
Buyer) relating to any transaction involving the sale of the business or assets
(other than sales of inventory in the ordinary course of business) of the
Seller, or any of the capital stock of the Seller, or any merger, consolidation,
business combination, or similar transaction involving the Seller.
4.8. Payment of Accounts and Trade Payables. Seller shall promptly pay all
accounts payable incurred prior to the Closing Date which directly relate to the
Acquired Assets except those being contested in good faith. Seller shall obtain
the prior written consent of Buyer prior to contesting any such accounts
payable.
5. CONDITIONS PRECEDENT
5.1. Conditions to Mutual Obligations. 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:
5.1.1 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.
5.1.2 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 Acquired Assets as
contemplated hereby illegal.
5.2. Conditions to Buyer's Obligations. The obligation of Buyer to purchase
the Acquired Assets and to perform the other provisions under this Agreement are
subject to the satisfaction, at or before the Closing Date of all the conditions
set out below in this Section 5.2. Buyer may waive any or all of these
conditions in whole or in part, in writing, without prior notice; provided,
however, that no such waiver of a condition shall constitute a waiver by Buyer
of any of its other rights or remedies, at law or in equity, if Selling Parties
shall be in default of any of their representations, warranties, or covenants
under this Agreement.
5.2.1 All representations and warranties of Selling Parties set forth
in this Agreement and in the Schedules to this Agreement must have been accurate
in all material respects as of the date of this Agreement, and must be accurate
in all material respects as of the Closing Date as if made on the Closing Date,
without giving effect to any supplement to any Schedule.
5.2.2 Seller and Selling Shareholders shall have performed, satisfied,
and complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them on or before the Closing
Date.
5.2.3 No action, suit, or proceeding before any court or any
governmental body or authority, pertaining to the transaction contemplated by
this Agreement or to its consummation, shall have been instituted or threatened
on or before the Closing Date.
5.2.4 Seller shall have obtained the discharge and release of any
liens or encumbrances against the Acquired Assets. 5.2.5 Buyer shall have
received such certificates of discharge (collectively, the "Certificates of
Discharge") it reasonably believes should be obtained from local, state and
federal taxing authorities that could have liens on the Acquired Assets after
the Closing Date.
5.2.6 Buyer shall have received copies of resolutions by the Board of
Directors of Seller, duly certified by the Secretary of Seller, authorizing the
execution of this Agreement by Seller and the consummation of the transactions
contemplated by this Agreement.
5.2.7 Buyer shall have received copies of resolutions by the Board of
Directors of Shareholder, duly certified by the Secretary of Shareholder,
authorizing the execution of this Agreement by Shareholder and the consummation
of the transactions contemplated by this Agreement.
5.2.8 The form and substance of all certificates, instruments,
opinions, and other documents delivered to Buyer under this Agreement shall be
satisfactory in all reasonable respects to Buyer and its counsel.
5.3. Conditions To Selling Parties' Performance. The obligation of Selling
Parties to sell and transfer the Acquired Assets and to perform the other
provisions under this Agreement are subject to the satisfaction, at or before
the Closing Date, of all 9f the following conditions. Selling Parties may waive
any or all of these conditions in whole or in part, in writing, without prior
notice; provided, however, that no such waiver of a condition shall constitute a
waiver by Selling Parties of any of their other rights or remedies, at law or in
equity, if Buyer should be in default of any of its representations, warranties
or covenants under this Agreement.
5.3.1 All representations and warranties of Buyer set forth in this
Agreement must have been accurate in all material respects as of the date of
this Agreement, and must be accurate in all material respects as of the Closing
Date as if made on the Closing Date.
5.3.2 Buyer shall have performed and complied with all covenants and
agreements, and satisfied all conditions that it is required by this Agreement
to perform, comply with, or satisfy, before or at the Closing Date.
5.3.3 The execution, delivery and performance by Buyer of this
Agreement and the other documents contemplated hereby and the consummation of
the transactions contemplated hereby and thereby shall have been duly authorized
by the Board of Directors of Buyer.
6. THE CLOSING
6.1. Date and Time. The transfer of the Acquired Assets by Seller to Buyer
(the "Closing") shall take place at the offices of the Buyer's counsel at 1676
N. California Blvd., Suite 200, Walnut Creek, California 94596, at 10:00 a.m.
(local time) on or before May 25, 2000, or such other date and time as may be
agreed to by the parties in writing. Notwithstanding the foregoing, upon the
mutual agreement of the parties, the Closing may be consummated via the delivery
of executed documents via mail or overnight service or via the transmission of
signature pages by facsimile. Subject to the provisions of Article 7, failure to
consummate the purchase and sale provided for in this Agreement on the date and
time and at the place determined pursuant to this Section 6.1 will not result in
the termination of this Agreement and will not relieve any party of any
obligation under this Agreement. It is anticipated that the Closing will occur
simultaneous with the execution of this Agreement.
6.2. Selling Parties' Deliveries. At the Closing, Selling Parties shall
deliver or cause to be delivered to Buyer, each duly executed (if execution is
appropriate):
(a) Such bills of sale and other recordable instruments of assignment,
transfer and conveyance as Buyer shall reasonably request in order to sell,
convey, assign, transfer and deliver to Buyer good title to all of the Acquired
Assets free and clear of any and all liens and encumbrances.
(b) UCC termination statements duly executed by the holders of all
security interests of record with respect to outstanding UCC-1 financing
statements evidencing security interests in any of the Acquired Assets.
(c) Full possession and enjoyment of the Inventories.
(d) The Certificates of Discharge.
(e) All other documents and instruments required to b@ delivered to
Buyer pursuant to the provisions of this Agreement.
6.3. Buyer's Deliveries. At the Closing, Buyer shall deliver or cause to be
delivered to Seller:
(a) The purchase price set forth in Section 1.3 of this Agreement by
wire transfer or certified or official bank check drawn on a California bank
payable to the order of Seller.
(b) An instrument of assumption of liabilities by which Buyer assumes
the Assumed Liabilities as of the Closing Date in a form reasonably satisfactory
to the Seller.
(c) All other documents and instruments required to be delivered to
Buyer pursuant to the provisions of this Agreement.
6.4. Further Assurances. At or after the Closing Date, Selling Parties and
Buyer shall prepare, execute and deliver, at the other party's direction and at
the appropriate party's expense, such further instruments of transfer or
assumption, and shall take such further action in order to evidence in Buyer
title to the Acquired Assets or to consummate the terms of this Agreement.
7. TERMINATION
7.1. Termination. This Agreement may, by notice given prior to or at the
Closing, be terminated:
(a) by either Buyer or Selling Parties if a material breach of any
provision of this Agreement has been committed by the other party and such
breach has not been waived;
(b) (i) by Buyer if any of the conditions in Section 5.1 or 5.2 has
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Buyer to comply with
its obligations under this Agreement) and Buyer has not waived such condition on
or before the Closing Date; or (ii) by Selling Parties, if any of the conditions
in Section 5.1 or 5.3 has not been satisfied of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than through
the failure of Selling Parties to comply with their obligations under this
Agreement) and Selling Parties have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Selling Parties; or
(d) by either Buyer or Selling Parties if the Closing has not occurred
(other than through the failure of any party seeking to terminate this Agreement
to comply fully with its obligations under this Agreement) on or before May 31,
2000, or such later date as the parties may agree upon.
7.2. Effect Of Termination. Each party's right of termination under Section
7.1 is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section 7.1, all further
obligations of the parties under this Agreement will terminate, except that the
obligations in Sections 10.4 (regarding payment of expenses] and 10.5 [regarding
confidentiality] will survive; provided, however, that if this Agreement is
terminated by a party because of the material breach of the Agreement by the
other party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
8. OBLIGATIONS AFTER CLOSING
8.1. Survival of Representations, Warranties and Agreements. All
representations of Selling Parties and Buyer in this Agreement shall survive the
execution of this Agreement. All statements contained in any schedule, exhibit
or any document delivered at Closing shall be deemed representations within the
meaning of this Section.
8.2. Indemnification by Selling Parties. Selling Parties agree 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 that are not
Assumed Liabilities and that are caused by or arise out of or otherwise in
respect of (i) the failure of any representation or warranty made by Selling
Parties hereunder to be true when made and as of the Closing Date; (ii) the
nonfulfillment of any obligation of Selling Parties under this Agreement; (iii)
any and all claims (other than claims arising out of a failure by Buyer to
perform its obligations under this Agreement, or arising out of Buyer's use or
sale of the Acquired Assets from and after the Closing Date) 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 worker's compensation claims, arising from
Seller's use or sale of the Acquired Assets before the Closing Date.
8.3. Indemnification by Buyer. Buyer will 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 that are caused by or arise out
of or otherwise in respect of (i) the failure of any representation or warranty
made by Buyer hereunder to be true when made and as of the Closing Date; and
(ii) any and all claims (other than claims arising out of a failure by Selling
Parties to perform their obligations under this Agreement) arising from Buyer's
use or sale of the Acquired Assets from and after the Closing Date.
8.4. Procedures. When a party seeking indemnification under Section 8.2 or
8.3 (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 Indemnified Party will not, except with the prior written consent
of the Indemnifying 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.
8.5. 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 8.5, 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 8.4); 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.
8.6. Name Change. Seller will change its corporate name promptly after the
closing to a name that does not include the words "Made in Nature" and to cease
all uses of the mark "Made in Nature" or any of the marks listed on Schedule
1.1(a) or any derivative thereof, whether in connection with the sale of dried
fruits and nuts or any other consumer product whatsoever. Notwithstanding the
foregoing, Seller may continue to sell its existing chilled beverage inventory
under the "Made in Nature" mark until the existing inventory has been
liquidated, or until three (3) months after the Closing Date, whichever shall
first occur. Seller may also continue to sell bulk ingredients intended for use
in manufacturing or processing chilled beverage and dried fruit and vegetable
inventories as long as necessary, and in this regard, shall be allowed during
the three (3) month period after the Closing Date to reference the Made in
Nature organic certification of such ingredients.
9. NON-COMPETITION; NON-DISCLOSURE
9.1. Intent. Selling Parties hereby represent and warrant to Buyer that
they have each agreed to be bound by the provisions of this Section 9.1 (i) to
induce Buyer to consummate the transactions contemplated by this Agreement, (ii)
with the intention of causing the effective preservation of the goodwill of the
Business unimpaired, and (iii) to provide assurance to Buyer that Seller and
Shareholder will take no action that could frustrate or interfere with such
preservation or otherwise impair such goodwill.
9.2. Noncompetition. Seller and Shareholder hereby covenants and agrees
with Buyer that, except as otherwise expressly provided in this Agreement or
consented to, approved or otherwise permitted by Buyer in writing, for the
period ending two years from the Closing Date (provided, however, that such
period shall be extended in either case by and for the duration of any period of
time during which Seller or Shareholder is in violation of any provision in this
Section 9.2), the Seller and Shareholder shall not do the following, directly or
indirectly, acting alone or as a member of a partnership or other business
entity or as a holder of any security of any class (provided however, that
nothing herein shall prohibit Seller or Shareholder from holding less than one
percent (1%) of the outstanding amount of any publicly traded security):
9.2.1 engage, within
(a) the counties of the State of California listed on Schedule
9.2.1(a) hereto and any county or other political subdivision in the United
States of America within or outside of the State of California in which Seller
carries on the Business as of the Closing Date; or
(b) Any foreign country or province or political subdivision thereof
in which Seller carries on the Business as of the Closing Date;
9.2.2 request, induce or attempt to influence any person who is or was
a customer or supplier of Buyer to limit, curtail or cancel its business with
Buyer or any successor; or 9.2.3 request, induce or attempt to influence any
current or future officer, director, employee, consultant, agent or
representative of Buyer to (i) terminate his, her or its employment or business
relationship with Buyer or (ii) commit any act that, if committed by Seller or
Shareholder, would constitute a breach of any provision hereof.
The provisions of Sections 9.2.1 through 9.2.3 above are separate and
distinct commitments independent of each of the other such Sections.
9.3. Equitable Relief. Selling Parties agree that a violation on its or
their part of any covenant contained in this Article 9 will cause such damage to
Buyer as will be irreparable, and for that reason Selling Parties agree that
Buyer shall be entitled, as a matter of right, to an injunction from any court
of competent jurisdiction restraining any further violation of said covenants by
Selling Parties or either or them. Such right to injunctive remedies shall be in
addition to and cumulative with any other rights and remedies Buyer may have
pursuant to this Article 9 or pursuant to law, including specifically the
recovery of monetary damages, whether compensatory or punitive. Selling Parties
acknowledge and agree that the covenants and agreements contained herein are
minimum and reasonable in scope as to both area and time and are necessary to
protect the legitimate interests of Buyer and its goodwill. Selling Parties
hereby waive any requirement for securing or posting a bond in connection with
the obtaining of injunctive or other equitable relief by Buyer.
9.4. Enforcement and Reformation. Since it is the agreement and desire of
the parties hereto that the provisions of this Article 9 be enforced to the
fullest extent possible under the laws and public policies applied in each
jurisdiction in which enforcement is sought, should any particular provision of
this Article 9 be deemed invalid or unenforceable, the same shall be deemed
reformed and amended to delete that portion that is adjudicated to be invalid,
and the deletion shall apply only with respect to the operation of said
provision and, to die extent a provision of this Article 9 would be deemed
unenforceable by virtue of its scope, but may be made enforceable by limitation
thereon, each party agrees that this Article 9 shall be reformed and amended so
that the same shall be enforceable to the fullest extent permissible under the
laws and public policies applied in the jurisdiction in which enforcement is
sought, the parties hereto acknowledging that the covenants contained herein are
an indispensable part of the transactions contemplated hereby.
10. MISCELLANEOUS PROVISIONS
10.1. Entire Agreement. This Agreement and all other agreements, exhibits,
and schedules referred to in this Agreement constitute the final, complete, and
exclusive statement of the terms of the agreement between the parties pertaining
to the purchase and sale of assets of Seller, and supersedes all prior and
contemporaneous understandings or agreements of the parties. No party has been
induced to enter into this Agreement by, nor is any party relying upon, any
representation or warranty outside those expressly set forth in this Agreement.
10.2. Binding Effect; Assignment. This Agreement and the various rights and
obligations arising hereunder shall inure to the benefit of and be binding upon
the parties and their respective successors and permitted assigns. No party may
assign their respective interests hereunder without the express written consent
of the other, such consent not to be unreasonably withheld. Notwithstanding the
foregoing, Buyer may assign all of its rights and delegate all of its duties
hereunder to another entity which it controls, or which is under common control
with Buyer.
10.3. Captions. The Section headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement in construing
or interpreting any provisions hereof.
10.4. Transaction Expenses. Except as otherwise provided herein, each of
the parties hereto shall each respectively pay all costs and expenses incurred
by it or on its behalf in connection with this Agreement and the transactions
contemplated hereby, including regulatory approvals thereof, whether or not the
transactions contemplated hereby occur, which costs and expenses shall include
without limitation, fees and expenses of legal counsel, accountants, brokers or
finders, consultants or other representatives or services used, hired or
connected with such transactions.
10.5. Confidentiality. Between the date of this Agreement and the Closing
Date, Buyer and Selling Parties will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Buyer and the Selling
Parties to maintain in confidence, any written, oral, or other information
obtained in confidence from another party in connection with this Agreement or
the transactions contemplated hereby, unless (a) such information is already
known to such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
transactions contemplated by this Agreement, or (c) the furnishing or use of
such information is required by legal proceedings. If the transactions
contemplated by this Agreement are not consummated, each party will return or
destroy as much of such written information as the other party may reasonably
request.
10.6. 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 or other electronic
transmission service 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.
Buyer: Premier Valley Foods, Inc.
101 Ygnacio Valley Road, Suite 100
Walnut Creek, CA 94596
Attn: Secretary
Fax No.: (925) 974-6670
Copy to: George S. Cabot, Esq.
Morgan, Miller & Blair Professional Corporation
1676 N. California Blvd., Suite 200
Walnut Creek, CA 94596
Fax No.: (925) 943-1106
Seller and
Shareholder: 1448 Industrial Ave.
Sebastopol, CA 95472
Attn: President
Fax: (707) 824-2545
Copy to: Roger Mertz, Esq.
Allen Matkins Leck Gamble & Mallory, LLP
333 Bush Street, 17th Floor
San Francisco, CA 94104-2806
Fax No.: (415) 837-1516
The parties may change their addresses for notices set forth above by
notice given in accordance with the provisions of this Section 10-6.
10.7. Waiver, Consent. This Agreement may not be changed, waived or
discharged (other than by performance), in whole or in part, except by a writing
executed by the parties hereto.
10.8. No Third-Party Beneficiaries. Nothing herein shall be construed to
confer upon any person or entity, other than the parties hereto and their
shareholders, any rights or benefits.
10.9. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one instrument.
10.10. Gender; Number. Whenever the context requires, words used in the
singular shall be construed to include the plural and vice versa, and pronouns
of any gender shall be deemed to include the masculine, feminine or neuter
gender.
10.11. Severability. If any provision of this Agreement is determined to be
unenforceable, Seller and Buyer hereby agree that such provision may be reformed
so that it is enforceable to the maximum extent permitted by law. In the event
that any provision of this Agreement cannot be reformed, such provision shall be
deemed to be severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
10.12. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of California.
10.13. Jurisdiction and Venue. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement may be
brought against any of the parties in the courts of the State of California,
County of Contra Costa, or, if it has or can acquire jurisdiction, in the United
States District Court for the Northern District of California, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world by any means
by which notice may be given pursuant to Section 10.6, except facsimile or other
electronic transmission service.
10.14. Attorneys' Fees. Should any litigation be commenced between the
parties to this Agreement concerning the purchase and sale of Acquired Assets or
the other transactions contemplated by this Agreement, the party prevailing in
such litigation shall be entitled to have its reasonable attorneys" fees paid by
the non-prevailing party.
11. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article 11:
"Acquired Assets"--as defined in Section 1.1.
"Ancillary Documents"--all of the agreements certificates and documents to
be delivered in connection with the transactions contemplated hereby other than
this Agreement.
"Assumed Liabilities"--as defined in Section 1.2.
"Balance Sheet"--as defined in Section 2.3.
"Business"--as defined in Recital A.
"Buyer Indemnitees"--as defined in Section 8.2.
"Buyer"--as defined in the first paragraph of this Agreement.
"Certificates of Discharge"--as defined in Section 5.2.5.
"Closing"--as defined in Section 6.1.
"Closing Date"--the date and time as of which the Closing actually takes
place.
"Contracts"--as defined in Section 2.12.
"Indemnifiable Loss"--as defined in Section 8.5.
"Indemnified Party"--as defined in Section 8.4.
"Indemnifying Party"--as defined in Section 8.4..
"Intellectual Property Rights"--as defined in Section 1.1(a).
"Interim Balance Sheet"--as defined in Section 2.3.
"Inventories"--as defined in Section 1.1(b).
"Purchase Price"--as defined in Section 1.3.
"Seller"--as defined in the first paragraph of this Agreement.
"Seller Indemnitees"--as defined in Section 8.3.
"Selling Parties"--the Seller and the Shareholder.
"Shareholder"--as defined in the first paragraph of this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have executed it to be
effective as of the date first written above.
Seller:
MADE IN NATURE COMPANY, INC.,
a California corporation
By: /s/ Gary Hess
---------------------------------
Gary Hess
President
Buyer:
PREMIER VALLEY FOODS, INC.,
a Delaware corporation
By: /s/ Al Vangelos
--------------------------------
Al Vangelos
Chairman and CEO
By: /s/ Ian Crabtree
--------------------------------
Ian Crabtree
Chief Operating Officer and Secretary
Shareholder:
SONOMAWEST HOLDINGS, INC.,
a California corporation
By: /s/ Gary Hess
-------------------------------
Gary Hess
President