AGREEMENT OF PURCHASE AND SALE OF ASSETS AMONG ORGANIC HOLDING COMPANY, INC. VINAIGRETTES LLC AND DAN KARZEN

 

Table of Contents

ARTICLE 1		PURCHASE AND SALE OF ASSETS		1
1.1		SALE AND TRANSFER OF ASSETS		1
1.2		CONSIDERATION FROM BUYER AT CLOSING		2
1.3		NO ASSUMPTION OF LIABILITIES		2
1.4		ALLOCATION OF PURCHASE PRICE		2
1.5		TAXES		2
ARTICLE 2		SELLING PARTIES’ REPRESENTATIONS AND WARRANTIES		3
2.1		ORGANIZATION, STANDING AND QUALIFICATION OF COMPANY		3
2.2		MEMBERSHIP INTERESTS		3
2.3		SUBSIDIARIES		3
2.4		TAX RETURNS AND AUDITS		3
2.5		TITLE TO ASSETS		3
2.6		LABOR AND EMPLOYMENT		4
2.7		COMPLIANCE WITH LAWS		4
2.8		LITIGATION		4
2.9		AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION		4
2.10		AUTHORITY AND CONSENTS		5
ARTICLE 3		BUYER’S REPRESENTATIONS AND WARRANTIES		5
3.1		ORGANIZATION, STANDING AND QUALIFICATION OF BUYER		5
3.2		AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION		5
3.3		AUTHORITY AND CONSENTS		5
3.4		AS—IS PURCHASE		6
ARTICLE 4		THE CLOSING		6
4.1		TIME AND PLACE		6
4.2		SELLING PARTIES’ OBLIGATIONS AT CLOSING		6
4.3		BUYER’S OBLIGATIONS AT CLOSING		7
ARTICLE 5		SELLING PARTIES’ OBLIGATIONS AFTER CLOSING		8
5.1		INDEMNIFICATION		8
5.2		SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS		9
5.3		NON-COMPETITION		9

 

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5.4		CONFIDENTIAL INFORMATION		9
5.5		POST CLOSING ESCROW.		10
ARTICLE 6		MISCELLANEOUS		11
6.1		RETENTION OF AND ACCESS TO RECORDS		11
6.2		PUBLICITY		12
6.3		FINDER’S OR BROKER’S FEES		12
6.4		EXPENSES		12
6.5		INTERPRETATION AND EFFECT OF HEADINGS		12
6.6		ENTIRE AGREEMENT; MODIFICATION; WAIVER		12
6.7		COUNTERPARTS		12
6.8		PARTIES IN INTEREST		13
6.9		ASSIGNMENT		13
6.10		ARBITRATION		13
6.11		RECOVERY OF LITIGATION COSTS		13
6.12		NOTICES		14
6.13		GOVERNING LAW		14
6.14		SEVERABILITY		15

 

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AGREEMENT OF PURCHASE AND SALE OF ASSETS

THIS AGREEMENT OF PURCHASE AND SALE OF ASSETS is made as of October    , 2007, by and among Vinaigrettes LLC, a California limited liability company doing business as “Vinaigrettes Catering Company” (“ Company ”), Dan Karzen (“ Member ”), and Organic Holding Company, Inc., a Delaware corporation (“ Buyer ”).  Company and Member are collectively referred to in this agreement as “ Selling Parties .”  This agreement is made under the following circumstances:

A.            Buyer desires to purchase from Company and Company desires to sell to Buyer, on the terms and subject to the conditions of this agreement, certain business and properties of Company; and

B.            Selling Parties desire that this transaction be consummated on the terms and subject to the conditions of this agreement.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties contained in this agreement, the parties agree as follows:

ARTICLE 1

PURCHASE AND SALE OF ASSETS

1.1   SALE AND TRANSFER OF ASSETS .

Subject to the terms and conditions set forth in this agreement, Company shall sell, convey, transfer, assign, and deliver to Buyer, and Buyer shall purchase from Company, all of the assets, properties, and business of Company of every kind, character, and description, whether tangible, intangible, personal, or mixed, and wherever located, all of which are collectively referred to as the assets, other than property and rights specifically excluded in Schedule 1 attached to this agreement. The assets acquired by Buyer pursuant to this agreement (the “ Acquired Assets ”) shall include, without limitation, the following:

1.1(a)      All property and other rights listed in Schedule 1 attached to this agreement; and

1.1(b)      All other supplies, materials, work-in-progress, finished goods, equipment, machinery, furniture, fixtures, deposits, rights and claims to refunds and adjustments of any kind (except for taxes, contracts or liabilities with respect to which Buyer is not assuming), and

 

intellectual property rights, including, without limitation, copyrights, service marks, trade secrets, recipes, patent rights, and royalty rights.

1.2   CONSIDERATION FROM BUYER AT CLOSING .

The total purchase price of the Acquired Assets shall be $1,000,000.  As payment of such purchase price, Buyer shall deliver to Seller the following:

1.2(a)      Cash to Seller .  At the Closing (as hereinafter defined), by wire transfer to an account designated by Seller or by bank cashier’s check, the amount of U.S. $950,000.

1.2(b)      Cash to Escrow Agent.   At the Closing, by wire transfer to an account designated by Escrow Agent (as hereinafter defined) or by bank cashier’s check payable to Escrow Agent, the amount of U.S. $50,000.00 (the “ Escrow Deposit ”).

1.3   NO ASSUMPTION OF LIABILITIES.

Buyer assumes no contracts, obligations, debts or liabilities under this agreement, other than those listed on Schedule 1.3 , if any.  It is expressly understood and agreed that Buyer shall not be liable for any of the contracts, obligations, debts or liabilities of Company of any kind and nature, other than those listed on Schedule 1.3 , if any.

1.4   ALLOCATION OF PURCHASE PRICE .

The purchase price of the Acquired Assets shall be allocated as follows:

1.		Inventory		$	12,000
2.		Furniture and Equipment		$	15,000
3.		Motor Vehicles		$	6,000
4.		Covenant not to Compete		$	150,000
5.		Customer Lists		$	350,000
6.		Goodwill		$	467,000
		Total Purchase Price		$	1,000,000

 

Each of the parties shall report this transaction for federal and state tax purposes in accordance with this allocation of the purchase price.

1.5   TAXES .

Company shall pay all sales and use taxes arising out of the transfer of the Acquired Assets and shall pay its portion, prorated as of the Closing Date, of state and local real and

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personal property taxes, and all other taxes of Company’s business.  Buyer shall not be responsible for any business, sales, occupation, withholding, or similar tax, or any taxes of any kind related to any period before the Closing Date.

ARTICLE 2

SELLING PARTIES’ REPRESENTATIONS AND WARRANTIES

Selling Parties, jointly and severally, represent and warrant that:

2.1   ORGANIZATION, STANDING AND QUALIFICATION OF COMPANY .

Company is a limited liability company duly organized, validly existing, and in good standing under the laws of California and has all necessary powers to own its properties and to operate its business as now owned and operated by it; and neither the ownership of its properties nor the nature of its business requires Company to be qualified in any jurisdiction other than the state of its organization where the failure to qualify would have a material adverse effect on its business.

2.2   MEMBERSHIP INTERESTS .

Member is the sole manager of the Company and holds a majority of the membership interests of the Company free and clear of all liens, encumbrances, security agreements, equities, options, claims, charges, and restrictions.  There are no outstanding subscriptions, options, rights, warrants, convertible securities, or other agreements or commitments obligating the Company to issue or to transfer any additional membership interests, or any other interests in the Company.

2.3   SUBSIDIARIES .

Company does not own, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, limited liability company, business, trust, or other entity.

2.4   TAX RETURNS AND AUDITS .

Except as set forth on Schedule 2 , within the times and in the manner prescribed by law, Company has filed all federal, state, and local tax returns required by law and has paid all taxes, assessments, and penalties due and payable, including without limitation all sales taxes.  There are no present disputes as to taxes of any nature payable by Company.

2.5   TITLE TO ASSETS .

Company has good and marketable title to the Acquired Assets, whether real, personal, mixed, tangible, or intangible, which constitute all the assets and interests in assets that are used in the business of Company.  Except as set forth on Schedule 2 , all these assets are free and clear

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of mortgages, liens, pledges, charges, encumbrances, equities, claims, easements, rights of way, covenants, conditions, or restrictions, except for (i) the lien of current taxes not yet due and payable, and (ii) 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 any of these assets, nor materially impair business operations.  To the best knowledge of Selling Parties, Company does not occupy any real property in violation of any law, regulation, or decree.

2.6           LABOR AND EMPLOYMENT

There is no pending nor, to Selling Parties’ knowledge, threatened labor dispute, strike, or work stoppage affecting Company’s business.  Seller is not a party to any collective bargaining agreement.

2.7   COMPLIANCE WITH LAWS .

Company has complied with and is not in violation of applicable federal, state, or local statutes, laws, and regulations (including, without limitation, any applicable employment, immigration, building, zoning, environmental, or other law, ordinance, or regulation) affecting or relating to its properties, employees, or the operation of its business.  Company has all licenses and permits required to operate its business, and no governmental or third party approval is required to assign and transfer such licenses and permits, if any, to Buyer pursuant to this agreement.

2.8   LITIGATION .

There is no suit, action, arbitration, or legal, administrative, or other proceeding, or governmental investigation, pending or threatened, to the best knowledge of Selling Parties, against or affecting Company or its business, assets, or financial condition.  Company is not in default with respect to any order, writ, injunction, or decree of any federal, state, local, or foreign court, department, agency, or instrumentality.  Except as set forth in Schedule 2 , Company is not presently engaged in any legal action to recover monies due to it or damages sustained by it.

2.9   AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION .

The consummation of the transactions contemplated by this agreement will not result in or constitute any of the following:  (i) a default or an event that, with notice or lapse of time or both, would be a default, breach, or violation of the articles of organization or operating agreement of Company or any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement

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to which Member or Company is a party or by which either of them or the property of either of them is bound; or (ii) the creation or imposition of any lien, charge, or encumbrance on any of the properties of Company.

2.10 AUTHORITY AND CONSENTS .

Selling Parties have the right, power, legal capacity, and authority to enter into, and perform their respective obligations under, this agreement, and no approvals or consents of any persons other than Company’s members are necessary in connection with it.  The execution and delivery of this agreement by Company has been duly authorized by all necessary action.

ARTICLE 3

BUYER’S REPRESENTATIONS AND WARRANTIES

Buyer represents and warrants that:

3.1   ORGANIZATION, STANDING AND QUALIFICATION OF BUYER .

Buyer is a corporation duly organized, validly existing, and in good standing under the laws of Delaware and has all necessary powers to own its properties and to operate its business as now owned and operated by it.  Buyer is duly qualified to do intrastate business and is in good standing in California and in each other jurisdiction in which the nature of Buyer’s business or of its properties makes such qualification necessary.

3.2   AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION .

The consummation of the transactions contemplated by this agreement will not result in or constitute any of the following:  (i) a default or an event that, with notice or lapse of time or both, would be a default, breach, or violation of the articles of incorporation or bylaws of Buyer or any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Buyer is a party or by it or its property is bound; or (ii) the creation or imposition of any lien, charge, or encumbrance on any of the properties of Buyer.

3.3   AUTHORITY AND CONSENTS .

Buyer has the right, power, legal capacity, and authority to enter into, and perform its obligations under, this agreement, and no approvals or consents of any persons other than Buyer are necessary in connection with it.  The execution and delivery of this agreement by Buyer has been duly authorized by all necessary action.

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3.4   AS—IS PURCHASE

Buyer acknowledges that the Acquired Assets which constitute tangible personal property (the “ Tangible Personal Property ”) shall be purchased on an “As-Is,” “Where-Is” basis and no implied representations or warranties are intended or made in connection with such purchase.  Buyer acknowledges that it has had a reasonable opportunity to make and has made an independent investigation of all aspects of the Tangible Personal Property that it deemed appropriate.  Buyer and not Company assumes any and all costs to repair and maintain the Tangible Personal Property.

ARTICLE 4

THE CLOSING

4.1           TIME AND PLACE .

The transfer of the Acquired Assets by Company to Buyer (the “ Closing ”) shall occur on the date of this Agreement (the “ Closing Date ”) at 126 South Glendale Boulevard, Los Angeles, California, or such other location which the parties agree upon.

4.2           SELLING PARTIES’ OBLIGATIONS AT CLOSING.

At the Closing, Selling Parties shall deliver or cause to be delivered to Buyer:

4.2(a)      The Lease of the property commonly known as 126 South Glendale Boulevard, Los Angeles, California substantially in the form of Exhibit A attached to this agreement (the “ Lease ”).

4.2(b)      A Bill of Sale with respect to the Acquired Assets.

4.2(c)      Instruments of assignment and transfer of all other Acquired Assets wherever situated.

4.2(d)      An employment Offer Letter from Buyer in the form of Exhibit B attached to this agreement, signed by Dan Karzen (the “ Offer Letter ”).

4.2(e)      Certificates of title with respect to all of Company’s motor vehicles being acquired hereunder, endorsed for transfer to Buyer and accompanied by all documents and fees required to transfer record title to such vehicles to Buyer.

Simultaneously with the consummation of the transfer, Company, through its officers, agents, and employees, will put Buyer into full possession and enjoyment of all properties and assets to be conveyed and transferred by this agreement.

Selling Parties, at any time on or after the Closing Date, shall execute, acknowledge, and

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deliver any further deeds, assignments, conveyances, and other assurances, documents, and instruments of transfer reasonably requested by Buyer, and will take any other action consistent with the terms of this agreement that may reasonably be requested by Buyer for the purpose of assigning, transferring, granting, conveying, and confirming to Buyer, or reducing to possession, any or all property to be conveyed and transferred by this agreement.  If requested by Buyer, Company shall prosecute or otherwise enforce in its own name for the benefit of Buyer any claims, rights, or benefits that are transferred to Buyer by this agreement and that require prosecution or enforcement in Company’s name.  Any prosecution or enforcement of claims, rights, or benefits under this paragraph shall be solely at Buyer’s expense, unless the prosecution or enforcement is made necessary by a breach of this agreement by the Selling Parties, or any of them.

As soon as reasonably practicable following the Closing, Seller shall (i) take all action required to change Company’s name to                                              , (ii) take all action required to terminate its Fictitious Business Name Statement for “Vinaigrettes Catering Company,” and (iii) not use or employ in any manner directly or indirectly the word “Vinaigrettes” alone or in combination with any other words.

Within one (1) week following the Closing, Seller shall pay in full all of its obligations (whether or not then due and payable) under its LLC gross receipts tax payment and city tax payment agreements.

4.3           BUYER’S OBLIGATIONS AT CLOSING .

At the Closing, Buyer shall deliver the following instruments and documents:

4.3(a)      $950,000, by wire transfer to an account designated by Seller or by bank cashier’s check.

4.3(b)      $50,000, by wire transfer to an account designated by Escrow Agent or by bank cashier’s check.

4.3(c)      The Offer Letter, signed on behalf of Buyer.

4.3(d)      The Lease.

4.3(e)      Secretary’s Certificate and copy of a Resolution of the Board of Directors approving this agreement.

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ARTICLE 5

SELLING PARTIES’ OBLIGATIONS AFTER CLOSING

5.1   INDEMNIFICATION .

5.1(a)      Selling Parties shall, jointly and severally, indemnify, defend, and hold Buyer harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including without limitation, interest, penalties, and reasonable attorneys’ fees, incurred or suffered by Buyer that arise from, result from, or relate to any (a) breach of, or failure by Selling Parties to perform, any of their representations, warranties, covenants, or agreements in this agreement or in any schedule, certificate, exhibit, or other instrument furnished or to be furnished by Selling Parties under this agreement (an “ Agreement Claim ”), or (b) any contract, debt, liability, or obligation of Company, including without limitation any contract, debt, liability or obligation arising from, resulting from or relating to the ownership and operation of the Acquired Assets before the Closing (a “ Liability Claim ”); provided, however, that (i) Selling Parties’ liability under this paragraph shall not exceed $300,000 except in the case of a breach or failure to perform under Sections 2.2 (Membership Interests), 2.4 (Tax Returns and Audits), 5.3 (Non-Competition), or 6.2 (Finder’s or Broker’s Fees) or fraud, and (ii) Selling Parties shall not be liable for the first $15,000 of liability for any Agreement Claim.

5.1(b)      Buyer shall indemnify, defend, and hold Selling Parties harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including without limitation, interest, penalties, and reasonable attorneys’ fees, incurred or suffered by Selling Parties that arise from, result from, or relate to (a) any breach of, or failure by Buyer 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 Buyer under this Agreement (an “ Agreement Claim ”), or (b) any contract, debt, liability, or obligation of Company assumed by Buyer under this Agreement and any contract, debt, liability or obligation arising from, resulting from or relating to the ownership and operation of the Acquired Assets after the Closing.

5.1(c)      Each party (an “ Indemnified Party ”) shall notify the other party or parties (the “ Indemnifying Party ”) of the existence of any claim, demand, or other matter to which the Indemnifying Party’s indemnification obligations would apply, and shall give the

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Indemnifying Party a reasonable opportunity to defend the same at its own expense and with counsel of its own selection; provided that the Indemnified Party shall at all times also have the right to fully participate in the defense at its own expense.  If the Indemnifying Party shall, within a reasonable time after this notice, fail to defend, the Indemnified Party shall have the right, but not the obligation, to undertake the defense of, and to compromise or settle (exercising reasonable business judgment), the claim or other matter on behalf, for the account, and at the risk, of the Indemnifying Party.  If the claim is one that cannot by its nature be defended solely by the Indemnifying Party (including, without limitation, any federal or state tax proceeding), then the Indemnified Party shall make available and cause to be made available all information and assistance that Selling Parties may reasonably request.

5.2   SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS .

All representations, warranties, covenants, and agreements of the parties contained in this agreement, or in any instrument, certificate, opinion, or other writing provided for in it, shall survive the Closing until one (1) year after the Closing Date; provided that (a) the representations and warranties in Sections 2.2 (Membership Interests) and 2.4 (Tax Returns and Audits), shall survive the Closing until the expiration of the applicable statute of limitations, (b) the obligations in Section 5.3 (Non-Competition) shall survive the Closing for the period specified in Section 5.3, and (c) the obligations in Section 5.4 (Confidential Information) shall survive indefinitely.

5.3   NON-COMPETITION .

Neither Company nor Dan Karzen shall at any time during the two (2) year period immediately after the Closing directly or indirectly engage in, or have any interest in any person, firm, corporation, or business (whether as an employee, officer, director, agent, security holder, creditor, consultant, or otherwise) that engages in any activity within the United States, which activity is the same as, similar to, or competitive with any activity that has been carried on or is now being carried on by Company in the United States, so long as the Buyer or any successor shall engage in that activity in the United States.

5.4   CONFIDENTIAL INFORMATION .

The Selling Parties shall not divulge, communicate, use to the detriment of Buyer or for the benefit of any other person or persons, or misuse in any way, any confidential information or trade secret of Company, including without limitation personnel information, secret processes, know-how, customer lists, recipes, formulas, or other technical data.  Any information or data

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Selling Parties have acquired on any of these matters or items was received in confidence and as fiduciaries of Company.

5.5           POST CLOSING ESCROW .

At the Closing, Buyer shall deposit the Escrow Deposit into escrow with Rogin, Nassau, Caplan, Lassman & Hirtle, LLC (the “ Escrow Agent ”) as security for Selling Parties’ indemnification obligations under Section 5.1(a) of this Agreement.  The following terms and conditions shall govern the Escrow Deposit.

5.5(a)      The Escrow Agent shall invest the Escrow Deposit in an interest bearing account (with interest, the “ Escrow Account ”) to be disbursed as provided for herein.

5.5(b)      Buyer may at any time before February 1, 2007 (the “ Cut-Off Date ”) give written notice to Selling Parties and the Escrow Agent that Buyer has (i) a Liability Claim against Selling Parties or (ii) an Agreement Claim against Selling Parties which individually or together with other Agreement Claims exceeds $15,000  Any such notice shall contain a description of each claim and the amount thereof, and be signed by an officer of Buyer.

5.5(c)      If the Escrow Agent and Buyer do not receive from Selling Parties prior to the thirtieth (30th) day following the date of receipt of such notice from Buyer, a written notice from Selling Parties disputing the claim, the Escrow Agent shall pay to Buyer an amount equal to the claim asserted in Buyer’s notice of claim.

5.5(d)      If Selling Parties deliver a notice of dispute to the Escrow Agent and Buyer within the thirty (30) day period, then the Escrow Agent shall refrain from disbursing from the Escrow Account the amount disputed in the notice from Selling Parties unless pursuant to or in accordance with: (i) a written authorization signed by Selling Parties and Buyer, which authorization shall set forth the distribution from the Escrow Account, or (ii) a certified copy of a final judgment of a court of competent jurisdiction following an arbitration pursuant to Section 6.10 (Arbitration); provided, however, that a certified copy of a final judgment shall be effective only if no right of appeal exists, the time for appeal has expired and no appeal has been perfected, or all appeals have been exhausted.

5.5(e)      On the Cut-Off Date, any and all funds in the Escrow Account, including any interest earned, in excess of that which the Escrow Agent is or may be required to pay by reason of a claim notice delivered by Buyer in accordance with this section and which have not

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theretofore been paid, shall be distributed to Seller without the requirement of any further act or consent by either Buyer or Seller.

5.5(f)       In the event of a dispute or disagreement under this Section, the Escrow Agent shall have the right to retain the Escrow Account as provided in Section 5.5(d) or commence an action for interpleader and in connection therewith, to deposit the Escrow Account with the court having jurisdiction over the interpleader action and thereafter, the Escrow Agent shall be discharged from any further liability under this Agreement.  Following the commencement of the interpleader action, the dispute or disagreement shall be referred to arbitration pursuant to section 6.10 (Arbitration).

5.5(g)      The Escrow Agent may rely upon, and shall be protected in acting or refraining from acting upon, any written notice, instruction or request furnished to it under this Agreement, believed by it to be genuine, and believed by it to have been signed or presented by the proper party or parties.  The Escrow Agent shall not be liable for any action taken by it in good faith, and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement.  Accordingly, the Escrow Agent shall only be responsible for losses caused by its gross negligence or willful misconduct.  The Escrow Agent shall have no liability whatsoever arising out of its investment of the escrowed funds.  The Escrow Agent shall be entitled to recover from the Escrow Account its reasonable legal fees and disbursements in any action or proceeding to determine the parties’ rights to the Escrow Account.

5.5(h)      Buyer and Seller waive any conflict which may be created by the Escrow Agent being the attorney for a party to this agreement, including but not limited to, the Escrow Agent’s continued representation of such party in any matter related to the Escrow Account including any dispute, arbitration or litigation which may arise hereunder or under any document delivered in connection herewith, and expressly consent to such continued representation by the Escrow Agent.

ARTICLE 6

MISCELLANEOUS

6.1      RETENTION OF AND ACCESS TO RECORDS

 

After the Closing Date, Company shall retain all of its books and records (including any financial information stored electronically) for not less than two (2) years after the Closing Date.  Company also shall provide Buyer and its employees, agents, accountants and advisors

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reasonable access to such books and records, during normal business hours and on at least three days’ prior written notice, to enable them to prepare audited financial statements.

6.2      PUBLICITY .

 

All notices to third parties and all other publicity concerning the transactions contemplated by this agreement shall be jointly planned and coordinated by and between Buyer and Selling Parties.  None of the parties shall act unilaterally in this regard without the prior written approval of the others; this approval shall not be unreasonably withheld.

6.3      FINDER’S OR BROKER’S FEES .

 

Each of the parties represents and warrants that it has dealt with no broker or finder in connection with any of the transactions contemplated by this agreement, and, insofar as it knows, no broker or other person is entitled to any commission or finder’s fee in connection with any of these transactions.

6.4      EXPENSES .

 

Each of the parties shall 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.

6.5      INTERPRETATION AND EFFECT OF HEADINGS .

 

This agreement shall be construed as if drafted jointly by all the parties.  The subject headings of the paragraphs and subparagraphs of this agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

6.6      ENTIRE AGREEMENT; MODIFICATION; WAIVER .

 

This agreement constitutes the entire agreement among the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and understandings of the parties with respect to such subject matter.  No supplement, modification, or amendment of this agreement shall be binding unless executed in writing by all the parties.  No waiver of any of the provisions of this agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver.  No waiver shall be binding unless executed in writing by the party making the waiver.

6.7      COUNTERPARTS .

 

This agreement may be executed in multiple counterparts, each of which constitutes an

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original, and all of which, collectively, constitute only one agreement.  The signatures of all of the parties need not appear on the same counterpart, and delivery of an executed counterpart signature page by U.S. mail, overnight courier, facsimile, or email is as effective as executing and delivering this agreement in the presence of the other parties to this agreement.  This agreement is effective upon delivery of one executed counterpart from each party to Edward J. Willig, Esq.

6.8      PARTIES IN INTEREST .

 

Nothing in this agreement, whether express or implied, is intended to confer any rights or remedies under or by any reason of this agreement on any persons other than the parties to it and their respective successors and assigns, nor is anything in this agreement intended to relieve or discharge the obligation or liability of any third persons to any party to this agreement, nor shall any provision give any third persons any right of subrogation or action over against any party to this agreement.

6.9      ASSIGNMENT .

 

This agreement shall be binding on, and shall inure to the benefit of, the parties to it and their respective heirs, legal representatives, successors, and assigns, but shall not be assignable by any party without the prior written consent of the other parties.

6.10    ARBITRATION .

 

Any dispute, claim or controversy arising out of or relating to this agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Los Angeles, California.  The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures.  Judgment on the arbitration award may be entered in any court having jurisdiction.  This clause shall not preclude the parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

6.11    RECOVERY OF LITIGATION COSTS .

 

If any legal action, arbitration or other proceeding is brought for the enforcement of this agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

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6.12    NOTICES .

 

All notices, requests, demands, and other communications under this agreement shall be in writing and shall be deemed to have been duly given on the date of service or mailing if served personally on the party to whom notice is to be given, or 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:		Mr. Dan Karzen Vinaigrettes LLC 11740 Wilshire Boulevard # 1605 Los Angeles, CA 90025
With copies to:		Martin H. Blank, Jr., Esq. 1990 S. Bundy Drive, Suite 540 Los Angeles, CA 90025-5244
		Rogin Nassau Caplan Lassman & Hirtle LLC CityPlace I, 22 nd  Floor 185 Asylum Street Hartford, CT 06103-3460 Attn: Iris J. Brown
To Buyer at:		Mr. Jason Brown Chief Executive Officer Organic Holding Company, Inc. 601 Union Street, Suite 3700 Seattle, WA 98101
With a copy to:		Edward J. Willig, Esq. Carr, McClellan, Ingersoll, Thompson & Horn Professional Law Corporation 216 Park Road Burlingame, CA 94011-4206

 

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.

6.13    GOVERNING LAW .

 

This agreement shall be construed in accordance with, and governed by, the laws of the State of California.

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6.14    SEVERABILITY

 

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.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, the parties to this agreement have duly executed it as of the day and year first above written.

ORGANIC HOLDING COMPANY, INC. a Delaware corporation			VINAIGRETTES LLC a California limited liability company
			doing business as
By:	/s/ Jason Brown		“VINAIGRETTES CATERING CO.”
	Jason Brown
	Chief Executive Officer		By:		/s/ Dan Karzen
					Dan Karzen, Manager
					/s/ Dan Karzen
					DAN KARZEN, Individually
			AGREED TO FOR PURPOSES OF SECTION 5.5 ONLY:
			ROGIN, NASSAU, CAPLAN, LASSMAN & HIRTLE, LLC
			By:
				Iris Brown Escrow Agent

 

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LIST OF EXHIBITS AND SCHEDULES

Schedule		Description
1.		Acquired Assets
1.3		Assumed Contracts and Liabilities
2.		Disclosure Schedule

 

Exhibit		Section		Description
A.		4.2(a)		Lease
B.		4.2(d)		Offer Letter

 

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SCHEDULE 1

ASSETS OF VINAIGRETTES LLC

Acquired Assets :

Inventory
Furniture
Fixtures
Equipment
Motor vehicles, unless excluded
Leasehold improvements
Telephone numbers
Web sites
URL’s
Trademarks
Trade names
Customer lists
Goodwill
Licenses and Permits

Excluded Assets :

Cash
Accounts receivable
Walk-in refrigerator and freezer
Built-in HVAC and wall air conditioner
Wok table, refrigerator and related equipment and utensils owned by Asean Chef, S. Lee.
Hood and fire retardant system
Leased Toyota 4-Runner
Any interest in real estate.

 

SCHEDULE 1.3

ASSUMED CONTRACTS & LIABILITIES

Two leased photocopiers
Two Vehicle (Van) loans
Linen Contract

 

SCHEDULE 2

DISCLOSURE SCHEDULE

Set forth below are exceptions to the representations and warranties of the Selling Parties made in Article 2 of the Agreement of Purchase and Sale of Assets dated as of October      , 2007, by and among Vinaigrettes LLC, a California limited liability company doing business as “Vinaigrettes Catering Company” (“ Company ”), Dan Karzen (“ Member ”), and Organic Holding Company, Inc., a Delaware corporation (“ Buyer ”).  Company and Member are collectively referred to in the agreement and in this Disclosure Schedule as “ Selling Parties .”  All capitalized terms used in this Disclosure Schedule and not defined in this Disclosure Schedule have the same meanings given to such terms in the agreement.

1. Dispute with worker’s compensation insurer;
2. The Company has a collection matter against a former employee;
3. The Company has an LLC gross receipts tax payment agreement;
4. Car lease;
5. One year linen company contract;
6. Two leased photocopiers, one year left before owned;
7. The Company has a city tax payment agreement;
8. Insurance policies;
9. Loans on the two vans;
10. Mortgage on the building.

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EXHIBIT A

LEASE

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REAL ESTATE LEASE

(SINGLE TENANT FACILITY)

ARTICLE ONE: BASIC TERMS

This Article One contains the Basic Terms of this Lease between the Landlord and Tenant named below. Other Articles and Sections of the Lease referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.

Section 1.01. Date of Lease: October 27, 2006

Section 1.02. Landlord:	Vinaigrettes, LLC
Address of Landlord:	c/o Iris J. Brown
	Rogin, Nassau, Caplan, Lassman & Hirtle, LLC
	CityPlace l – 22 nd  Floor
	185 Asylum Street
	Hartford, CT 06103-3460
Section 1.03. Tenant:	Organic Holding Company, Inc.
Address of Tenant:	601 Union Street, Suite 3700
	Seattle, WA 98101
Section 1.04. Property:	126 South Glendale Boulevard, Los Angeles, CA 90026

 

Section 1.05. Lease Term: one (1) year beginning on October 28, 2006 and ending on October 30, 2007.

Section 1.06. Permitted Uses: (See Article Five .) Operation of a catering and food service business.

Section 1.07. Tenant’s Guarantor: Not Applicable.

Section 1.08. Broker: Not Applicable.

Section 1.09. Security Deposit: (See Section 3.03 ) Nineteen Thousand Eight Hundred Dollars ($19,800).

Section 1.10. Rent and Other Charges Payable by Tenant:

(a)            BASE RENT:

(i)            No Base Rent for the first two months of the Lease Term.

(ii)           Thereafter, $6,600.00 per month through the end of the Lease Term. In the event that Tenant exercises the option referred to below to extend the Lease then the Base Rent shall increase annually commencing on the first day of the Extended Term (as hereinafter defined) by an amount equal to six percent (6%) of the prior year’s Base Rent.

(b)           OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section 4.02 ); (ii) Utilities (See Section 4.03) ; (iii) Insurance Premiums (See Section 4.04 ); (iv) Impounds for Insurance Premiums and Property Taxes (See Section 4.07) : and (v) Maintenance, Repairs and Alterations (See Article Six ).

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Section 1.11. Landlord’s Share of Profit on Assignment or Sublease: (See Section 9.04 ) fifty percent (50%) of the Profit (the “Landlord’s Share”).

ARTICLE TWO: LEASE TERM

Section 2.01. Lease of Property For Lease Term. Landlord leases the Property to Tenant and Tenant leases the Property from Landlord for the Lease Term. The Lease Term is for the period stated in Section 1.05 above and shall begin and end on the dates specified in Section 1.05 above, unless the beginning or end of the Lease Term is changed under any provision of this Lease. The “Commencement Date” shall be the date specified in Section 1.05 above for the beginning of the Lease Term, unless advanced or delayed under any provision of this Lease.

Section 2.02. [Intentionally Deleted]

Section 2.03. Early Occupancy. If Tenant occupies the Property prior to the Commencement Date, Tenant’s occupancy of the Property shall be subject to all of the provisions of this Lease. Early occupancy of the Property shall not advance the expiration date of this Lease. Tenant shall pay Base Rent and all other charges specified in this Lease for the early occupancy period.

Section 2.04. Holding Over. Tenant shall vacate the Property upon the expiration or earlier termination of this Lease. Tenant shall reimburse Landlord for and indemnify Landlord against all damages which Landlord incurs from Tenant’s delay in vacating the Property. If Tenant does not vacate the Property upon the expiration or earlier termination of the Lease and Landlord thereafter accepts rent from Tenant, Tenant’s occupancy of the Property shall be a “month-to-month” tenancy, subject to all of the terms of this Lease applicable to a month-to-month tenancy, except that the Base Rent then in effect shall be increased by fifty percent (50%).

ARTICLE THREE: BASE RENT

Section 3.01. Time and Manner of Payment. On or before the start of the third month of the Lease Term, Tenant shall pay Landlord the Base Rent in the amount stated in Section 1.10(a) above for the third month of the Lease Term. On the first day of each month of the Lease Term (and the Extended Term if applicable) thereafter, Tenant shall pay Landlord the Base Rent, in advance, without offset, deduction or prior demand. The Base Rent shall be payable at Landlord’s address or at such other place as Landlord may designate in writing.

Section 3.02. Cost of Living Increases. Not Applicable.

Section 3.03. Security Deposit; Increases.

(a)           Upon the execution of this Lease, Tenant shall deposit with Landlord a cash Security Deposit in the amount set forth in Section 1.09 above. Landlord may apply all or part of the Security Deposit to any unpaid rent or other charges due from Tenant or to cure any other defaults of Tenant. If Landlord uses any part of the Security Deposit, Tenant shall restore the Security Deposit to its full amount within ten (10) days after Landlord’s written request. Tenant’s failure to do so shall be a material default under this Lease. No interest shall be paid on the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its other accounts and no trust relationship is created with respect to the Security Deposit. The amount of the Security Deposit shall not constitute a limitation on the amount of damages that Landlord is entitled to recover in the event of a breach of this Lease by Tenant.

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(b)           Each time the Base Rent is increased. Tenant shall deposit additional funds with Landlord sufficient to increase the Security Deposit to an amount which bears the same relationship to the adjusted Base Rent as the initialSecurity Deposit bore to the initial Base Rent.

Section 3.04. Termination; Advance Payments. Upon termination of this Lease under ArticleSeven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from Tenant’s default, and after Tenant has vacated the Property in the manner required by this Lease, Landlord shall refund or credit to Tenant (or Tenant’s successor) the unused portion of the Security Deposit, any advance rent or other advance payments made by Tenant to Landlord, and any amounts paid for real property taxes and other reserves which apply to any time periods after termination of the Lease.

Section 3.05. Partial Month. Should the Commencement Date be a day of the month other than the first day of such month, then the Basic Rent for the first fractional month shall be computed on a daily basis for the period from the Commencement Date to the end of such calendar month and at an amount equal to one/three hundred and sixtieth (1/360th) of the Minimum Annual Rental for each such day. Rental for such partial month shall be due and payable prior to the Commencement Date.

ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT

Section 4.01. Additional Rent. All charges payable by Tenant other than Base Rent are called “Additional Rent” Unless this Lease provides otherwise. Tenant shall pay all Additional Rent then due with the next monthly installment of Base Rent. The term “rent” shall mean Base Rent and Additional Rent.

Section 4.02. Property Taxes.

(a)            Real Property Taxes. Tenant shall pay all real property taxes on the Property (including any fees, taxes or assessments against, or as a result of, any tenant improvements installed on the Property by or for the benefit of Tenant) during the Lease Term. Subject to Section 4.02(c) below, such payment shall be made at least ten (10) days prior to the delinquency date of the taxes. Within such ten (10) day period, Tenant shall furnish Landlord with satisfactory evidence that the real property taxes have been paid. Landlord shall reimburse Tenant for any real property taxes paid by Tenant covering any period of time prior to or after the Lease Term or the amount of Landlord’s increase as defined in (b). If Tenant fails to pay the real property taxes when due, Landlord may pay the taxes and Tenant shall reimburse Landlord for the amount of such tax payment as Additional Rent.

(b)            Definition of “Real Property Tax.” “Real property tax” means: (i) any fee, license fee, license tax, business license fee, commercial rental tax, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Property: (ii) any tax on the Landlord’s right to receive, or the receipt of, rent or income from the Property or against Landlord’s business of leasing the Property; (iii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Property by any governmental agency; (iv) any tax imposed upon this transaction or based upon a re-assessment of the Property due to a change of ownership, as defined by applicable law, or other transfer of all or part of Landlord’s interest in the Property; and (v) any charge or fee replacing any tax previously included within the definition of real property tax. “Real property tax” does not, however, include (1) Landlord’s federal or state income, franchise, inheritance or estate taxes or (2) Landlord’s increase which shall mean any increase in “Real property tax” that is the result of a revaluation caused by a transfer of the Property.

(c)           Joint Assessment. If the Property is not separately assessed, Landlord shall reasonably determine Tenant’s share of the real property tax payable by Tenant under Section 4.02(a) from the

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assessor’s worksheets or other reasonably available information. Tenant shall pay such share to Landlord within fifteen (15) days after receipt of Landlord’s written statement.

(d)           Personal Property Taxes.

(i)            Tenant shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to Tenant. Tenant shall try to have personal property taxed separately from the Property.

(ii)           If any of Tenant’s personal property is taxed with the Property, Tenant shall pay Landlord the taxes for the personal property within fifteen (15) days after Tenant receives a written statement from Landlord for such personal property taxes.

Section 4.03. Utilities. Tenant shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the Property. However, if any services or utilities are jointly metered with other property, Landlord shall make a reasonable determination of Tenant’s proportionate share of the cost of such utilities and services and Tenant shall pay such share to Landlord within fifteen (15) days after receipt of Landlord’s written statement.

Section 4.04. Insurance Policies.

(a)           Liability Insurance. During the Lease Term, Tenant shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring Tenant against liability for bodily injury, property damage (including loss of use of property) and personal injury arising out of the operation, use or occupancy of the Property, Tenant shall name Landlord as an additional insured under such policy.