Exhibit 10.5
ASSET PURCHASE
AGREEMENT
This ASSET PURCHASE AGREEMENT (the
“Agreement”) is made as of the 14 th day of April, 2005, by and between,
ORGANIC HOLDING COMPANY, INC., a Delaware corporation (the
“Buyer”), and BRIAZZ INC., a Washington
corporation (the “Seller”) (collectively, the
“Parties”).
RECITALS:
A.
Seller is engaged in the business
of, among other things, selling prepared foods on a wholesale and
retail basis, including a catering business. Seller filed its
voluntary Chapter 11 bankruptcy petition on June 7, 2004, in
the United States Bankruptcy Court for the Western District of
Washington, under Case No. 04-17701-PHB, and is a
debtor-in-possession in that case.
B.
The Parties desire that Seller sell
to Buyer, and that Buyer purchase from Seller, the Assets on the
terms set forth in this Agreement.
NOW, THEREFORE, in consideration of
the premises and the mutual covenants contained herein, and for
other good, fair and valuable consideration, the receipt,
reasonable equivalency and sufficiency of which are hereby
acknowledged, the Parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
The following terms shall have the
following meanings when used in this Agreement:
1.1
“ Assets ” means
all of Seller’s right, title, and interest in and to the
following assets of Seller:
(a)
All inventory, furniture, fixtures, equipment, Leases and Executory
Contracts, leasehold improvements, lease deposits, owned vehicles
and telephone numbers used in connection with (i) all
Seller’s locations in the State of Washington and (ii) all
Seller’s locations in Los Angeles County and Orange County,
California, other than the lease, lease deposit, and leasehold
improvements for Seller’s corporate headquarters at 3901
– Seventh Avenue South, Seattle, Washington 98108;
(b)
All Assets, both tangible and intangible, constituting
Seller’s catering business including but not limited to
Seller’s catering contracts with the University of
Washington, Starbucks, and Verizon;
(c)
The trade mark and trade name “Briazz” and all
associated good will and trademarks, service marks, trade dress,
and logos (provided that Buyer grant Seller a transferable,
perpetual license to use the trade name “Briazz” in
the
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San Francisco Bay Area subject to
standard terms and conditions, pursuant to the license agreement
attached as Exhibit A ):
(d)
The URL www.Briazz.com and all licenses, permits and
contracts related thereto; and
(e)
All restaurant and food storage or preparation equipment presently
in storage.
1.2
“ Bankruptcy Code ” means Title 11 of the United
States Code, as amended, 11 U.S.C. §§ 101,
et seq.
1.3
“ Bankruptcy Court ” means the United States
Bankruptcy Court for the Western District of Washington, or such
other court exercising competent jurisdiction over the bankruptcy
case involving Seller.
1.4
“ Buyer ” is defined in the Preamble.
1.5
“ Closing ” means the delivery of the documents
necessary to transfer the Assets to the Buyer as provided in this
Agreement.
1.6
“ Closing Date ” is defined in Section
2.4.
1.7
“ Competing Bid ” means a bid for some or all of
the Assets.
1.8
“ Leases and Executory Contracts ” means those
leases and executory contracts that are a part of the Assets and
are described in the attached Schedule 1.8 .
1.9
“ Note ” means the secured non-negotiable
convertible promissory note described in
Section 2.2(b).
1.10
Series A Preferred Stock means the Series A Preferred Stock
of the Buyer.
1.11
“ Purchase Price” is defined in Section
2.2.
1.12
“ Right to Overbid ” means the right of the
Buyer to overbid on any sale of Seller’s assets used in the
San Francisco Bay Area, other than a transfer of all equipment at
one or more locations together with the assignment and assumption
of the real property leases for such location or locations. Seller
shall provide adequate notice to Buyer so that Buyer has a
meaningful opportunity to overbid on the sales to which this
subsection 1.12 applies.
1.13
“ Sale Order ” means the order of the Bankruptcy
Court which is not subject to stay pending appeal that is in
substantially and materially the form attached hereto as Exhibit
B, authorizing the transactions described in this Agreement,
requiring the assumption and assignment of the Leases and Executory
Contracts, finding that Buyer is a good faith purchaser under
section 365(m) of the Bankruptcy Code, and waiving any automatic
stay period under applicable rules, including Bankruptcy Rule
6004(g).
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1.14
“ San Francisco Bay Area ” means the
geographical location of the five (5) Briazz stores currently
operating in the San Francisco/Oakland, California area.
1.15
“ Seller ” is defined in the
Preamble.
ARTICLE II
PURCHASE AND
SALE
2.1
Purchase and Sale of Assets . Subject to the terms and
conditions of this Agreement, and pursuant to sections 363 and 365
of the Bankruptcy Code, at Closing Seller shall grant, sell,
convey, transfer, assign and deliver to Buyer, free and clear of
all liens, claims, interests and encumbrances, and Buyer shall
purchase all right, title and interest in and to the Assets. In
addition, Seller shall grant to Buyer the Right to Overbid set
forth in Section 1.12.
2.2
Purchase Price . For the Assets and the Right to Overbid,
Buyer agrees to pay to Seller at the Closing a purchase price of
One Million Three Hundred Fifty Thousand dollars ($1,350,000)
payable as follows:
(a)
$750,000 in cash at Closing; and
(b)
a secured non-negotiable convertible promissory note in the
principal amount of $600,000 in the form of Exhibit C ,
bearing interest at the rate of seven and three-quarters percent
(7.75%) per annum, with a five-year term, payable in 20 equal
quarterly payments, convertible at the holder’s election
during the first 12 months into Series A Preferred Stock. Repayment
of the obligations under Exhibit C , and any new notes
issued pursuant to this Agreement shall be secured pursuant to the
terms of a Security Agreement in the form of Exhibit D . The
number of shares of the Buyer’s Series A Preferred Stock that
shall be issued to the holder (or holders) in the event of
conversion equals the amount of the note which is converted divided
by 1.2987. This formula is based on a $10 million valuation of the
Buyer. When the amounts of the claims of all of the secured
noteholders of Briazz are fixed by a final Bankruptcy Court Order
which is no longer subject to appeal or revision, the note in the
form of Exhibit C shall be cancelled and returned to Buyer,
whereupon Buyer will issue new notes, as provided for in Exhibit
C , provided that the recipient of each note shall provide any
written representations and warranties which are required to assure
that the Notes and any shares of Seller’s capital stock
issued upon conversion of the Notes are issued in compliance with
applicable federal and state securities laws. Such written
representation and warranties shall be in the form of the Secured
Noteholder Representation and Acknowledgment Letter
(“Acknowledgement Letter”) in the form of Exhibit
E . If one or more of the proposed recipients of a new note
does not provide the Buyer with a signed Acknowledgment Letter,
Buyer will issue a new note to Seller or a successor or assignee of
Seller such as a bank or trust company in a principal amount equal
to the total principal amounts of the notes which would otherwise
be issued to the secured noteholders who have not signed an
Acknowledgment Letter, and with the same terms, other
than
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as to amount, as the notes being
issued to the secured noteholders who have signed the
Acknowledgment Letter. The Seller or its successor or assignee
shall in turn forward the payments in the amounts which the
recipient or recipients of such payments would have received had
they signed the Acknowledgment Letter.
(c)
The Buyer shall allocate the purchase price among the Assets. Such
allocation shall be without prejudice to third parties.
2.3
Minimum Overbid . The Parties hereby agree that any sales
procedures relating to the disposition of the Assets will include,
among other things, a requirement that any subsequent bids shall be
in increments of no less than $50,000. Buyer and Seller shall
further agree on reasonable overbid procedures, including but not
limited to bid procedures to insure that any overbidders are
qualified to bid. Flying Food Group shall be deemed a qualified
bidder.
2.4
The Closing . The Closing shall take place on a date (the
“Closing Date”) no later than two business days after
the later of the following:
(a)
the date on which the Sale Order becomes final and not subject to
stay pending appeal; or
(b)
April 14, 2005.
2.5
Access to Corpo r ate Offices . During the two (2)
week period immediately after the Closing, Seller shall provide
Buyer with access to Seller’s corporate offices during
regular business hours free of charge so that Buyer can remove the
Assets which are located at Seller’s corporate offices,
provided that if the two week period expires after April 30, Buyer
shall provide reasonable access to such Assets either at the
corporate offices or at an appropriate storage facility.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLER
3.1
Warranty of Title . Seller warrants that it is the owner of
the Assets and that, upon entry of the Sale Order, the Leases and
Executory Contracts will be freely assignable by Seller to Buyer
and that the Assets will be sold to Buyer free and clear of all
liens, claims, interests and encumbrances of any nature whatsoever,
except for the obligations of Seller under the Leases and Executory
Contracts that accrue after the Closing Date.
3.2
Warranties of Condition . Except as otherwise explicitly set
forth in this Agreement, the sale of the Assets to the Buyer is
“AS-IS, WHERE-IS” and the Seller makes no warranties,
express or implied, in connection with the Assets or its sale of
the same to the Buyer. Without limiting the generality of the
foregoing, the Seller hereby DISCLAIMS ANY WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE with
respect to the Assets or its sale of the same to the Buyer;
PROVIDED that Seller warrants that the Assets shall be
conveyed to Buyer at Closing in substantially the same condition as
they were in on the date hereof.
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3.3
Warranty of Continued Operation . Seller warrants that it
shall continue to operate its business which uses the Assets until
the Closing Date.
ARTICLE IV
NO ASSUMPTION OF LIABILITIES
BY BUYER
Except as may otherwise be
explicitly provided in this Agreement, Buyer shall not
assume any debts, liabilities, or obligations of the Seller of any
nature, whether present or future, fixed or contingent, disclosed
or undisclosed, including, but not limited to, any and all
liabilities for any claims, debts, defaults, warranties, or duties
of the Seller of any kind, provided that Buyer shall be
liable for all liabilities accruing after the closing under assumed
and assigned executory contracts and real property
leases.
ARTICLE V
TERMINATION
The Seller and the Buyer shall each
be entitled to terminate this Agreement and shall have no further
liability hereunder of any kind whatsoever on such date as the
Bankruptcy Court enters an order approving a Competing Bid or if
the sale is not consummated by the Closing Date.
ARTICLE VI
CONDITIONS OF CLOSING FOR THE
BENEFIT OF BUYER
The obligation of Buyer to
consummate the transactions contemplated hereunder is subject to
the satisfaction as of the Closing Date of each of the following
conditions (all of which shall be conclusively deemed to be
satisfied or waived when Buyer transfers the Purchase Price to the
Seller):
6.1
Seller’s Obligations Performed . Seller shall have
performed its obligations under this Agreement.
6.2
Bankruptcy Court Approval . The Bankruptcy Court shall have
entered the Sale Order and the Sale Order shall be in full force
and effect and not subject to stay pending appeal.
6.3
Trade Name . Seller shall have taken all actions necessary
to ensure that Buyer will acquire all rights in all trademarks and
trade names that are part of the Assets.
6.4
Cure of Defaults . Seller shall have cured any and all
defaults, monetary or otherwise, under the Leases and Executory
Contracts as of the Closing Date, and all of Seller’s stores
which are included in the Assets shall continue to be open for
business.
6.5
Employees . Seller shall have advised all of its employees
that the company is being sold. Seller shall have advised each
employee of his or her last day of
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employment and shall have paid all
wages, benefits and employment related state and federal taxes
through each employee’s last day of employment. Seller agrees
that it shall have complied with state and federal regulations
regarding termination including, if applicable, the provisions of
the WARN Act.
6.6
Extension of Time to Assume or Reject Leases or Executory
Contracts . The Bankruptcy Court shall have entered an order
extending the deadline to assume or reject nonresidential
real property leases so that the Leases and Executory Contracts can
be assumed and assigned at Closing without the approval of any
other party to such leases and agreements.
6.7
Closing Deliveries . At or prior to Closing, Seller shall
deliver, or cause to be delivered, to Buyer the following
documents:
(a)
Bill of Sale . A bill of sale in form and substance
reasonably satisfactory to Buyer and signed by Seller;
and
(b)
Assignment Notice . A written notice of assignment, in form
and substance reasonably satisfactory to Buyer and signed by
Seller, informing each party to a Lease or Executory Contract that
Seller’s intent in such contract has been assigned to
Buyer.
6.8
Continued Operations Without Significant Deterioration .
Seller shall have continued to operate its business which uses the
Assets until the Closing Date without significant deterioration to
the manner in which it has operated such business since its
bankruptcy case commenced and without significant deterioration to
the continuity of service to customers and reputation in the
applicable market area.
ARTICLE VII
CONDITIONS OF CLOSING FOR THE
BENEFIT OF THE SELLER
The obligation of the Seller to
consummate the transactions contemplated hereunder is subject to
the satisfaction on the Closing Date of each of the following
conditions:
7.1
Bankruptcy Court Approval . The Bankruptcy Court shall have
entered the Sale Order and the Sale Order shall be in full force
and effect and not subject to stay pending appeal.
7.2
Consideration . That part of the Purchase Price described in
Section 2.2(a) shall have been received by Seller via wire transfer
or cashiers check, and the Note described in Section 2.2(b) will
have been executed and delivered to Seller.
ARTICLE VIII
MISCELLANEOUS
8.1
Notices . All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other
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communication hereunder shall be
deemed duly given upon receipt if it is sent by facsimile, or
reputable express courier, and addressed or otherwise sent to the
intended recipient as set forth below:
(a)
If to the Seller:
Briazz Inc.
3901 Seventh Avenue South, Suite 200
Seattle, Washington 98108
Attention: Bill Zang
Fax: (206) 467-1970
with a copy to:
Cynthia A. Kuno
Crocker Kuno Ostrovsky, LLC
720 Olive Way, Suite 1000
Seattle, Washington 98101
Fax: (206) 624-9894
(b)
If to the Buyer:
Organic Holding Company
5610 E. Lake Sammamish Parkway SE, Suite A
Issaquah, Washington 98029
Attention: Jason Brown
Fax: (425) 837-9622
with a copy to:
Carr, McClellan, Ingersoll, Thompson & Horn
216 Park Road
Burlingame, California 94010
Attention: Ed Willig
Fax: (650) 373-3388
Any party may send any notice,
request, demand, claim or other communication hereunder to the
intended recipient at the address or facsimile number set forth
above using any other means (including personal delivery, messenger
service, ordinary mail, or electronic mail), but no such notice,
request, demand, claim or other communication shall be deemed to
have been duly given unless and until it is actually received by
the intended recipient. Any party may change the address or
facsimile number to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth.
8.2
Controlling Law . This Agreement shall be construed under
and governed by the laws of the State of Washington.
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8.3
Entire Agreement . This Agreement and the agreements and
documents referred to herein constitute the entire agreement of the
Parties with respect to the transactions contemplated hereby and
supersede all other agreements between the Parties, whether written
or oral, with respect to such transactions.
8.4
Binding Effect . This Agreement shall inure to the benefit
of and bind the Parties hereto and their respective heirs,
successors and assigns.
8.5
Succession and Assignment . This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No party may assign
either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the
other party, provided that this Section 8.5 shall not affect
the issuance of new notes as provided for in Section
2.2(b).
8.6
Expenses and Fees . Each party shall pay its respective
costs and expenses, including, without limitation, legal and
accounting fees in connection with this Agreement and the
transactions contemplated hereby.
8.7
Counterparts . This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same
instrument.
8.8
Modifications and Waivers . No supplement, modification or
amendment of this Agreement shall be binding unless made in a
written instrument which is signed by all of the Parties and which
specifically refers to this Agreement. Compliance with the
provisions of this Agreement may be waived only by a written
instrument specifically referring to this Agreement and signed by
the party waiving compliance. No course of dealing, nor any failure
or delay in exercising any right, shall be construed as a waiver,
and no single or partial exercise of a right shall preclude any
other or further exercise of that or any other right. This section
shall not affect the transactions described in Section
2.2(b).
8.9
Severability . Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any
other jurisdiction.
8.10
Incorporation of Exhibits and Schedules . The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
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IN WITNESS WHEREOF, the Parties
hereto have duly caused this Agreement to be executed as of the day
and year first above written.
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BUYER:
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ORGANIC HOLDING COMPANY, INC.
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By:
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/s/ Jason Brown
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Print Name:
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Jason Brown
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Title:
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CEO
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SELLER:
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BRIAZZ, INC.
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By:
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/s/ Illegible
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Print Name:
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Illegible
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Title:
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CFO
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9
EXHIBIT A
BRIAZZ TRADEMARK LICENSE
AGREEMENT
BRIAZZ TRADEMARK LICENSE
AGREEMENT
This agreement, effective as of the
last date executed by a party below, is entered into by and between
Organic Holding Company, Inc. d/b/a Organic to Go, a Delaware
corporation, having an address at 5610 E. Lake Sammamish Parkway
5E, Suite A, Issaquah, Washington 98029 (“Organic” or
“Licensor”) and Briazz, Inc., a Washington corporation,
having an address at 3901 - 7th Avenue South, Suite 200, Seattle,
Washington 98108 (“Briazz” or
“Licensee”).
I. Recitals
WHEREAS, contemporaneously herewith,
Licensor and Briazz have entered into an Asset Purchase Agreement
dated
April , 2005
under which Licensor has acquired all assets of Briazz related to
its business under the Briazz “Marks” (defined in
Section II, below); and
WHEREAS, the Asset Purchase
Agreement requires Organic to grant Briazz a transferable perpetual
license to use the trade name “Briazz” in the
“Territory” (defined in Section II, below);
NOW, THEREFORE, the parties agree
with each other as follows:
II.
Definitions
1.
The “Marks” mean the
word mark BRIAZZ as set forth in U.S. Trademark Registration No.
2,0183,79 and BRIAZZ (AND DESIGN) as set forth in U.S. Registration
No. 2,0183,90), all confusingly similar marks, and all rights in
and to the marks, logos, designs, trade dress, and depictions
thereof, together with any and all rights whatsoever existing at
the effective date or accruing later during the term of this
agreement, of either party in the Marks and all confusingly similar
terms at common law, in any U.S. state, federal and local and
foreign trademark registrations and applications, design
registrations, past and future infringement claims and rights to
recover therefrom, fictitious, assumed business, corporate and
trade name, and domain name and URL registrations, permits,
licenses and contracts relating thereto, worldwide.
2.
“The Field” means the
field of prepared foods offered for sale on the wholesale and
retail bases, as well as catering and delicatessen
services.
3.
“The Territory” means
the sites at which Briazz does business as of the effective date,
all located in the California counties of Alameda and San
Francisco.
III.
Agreements
1.
License . Organic hereby grants to Licensee the
perpetual, personal, irrevocable (subject to section 9,
termination), royalty-free right to use the Marks in the Territory
and the Field subject to the restrictions of this license. Nothing
herein shall be construed to grant any license or right to any
trademark of the parties other than the Marks. Licensee may neither
sublicense its rights nor expand beyond the sites at which it does
business as of the effective date
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without prior written approval of
Organic. Approval of a sublicense shall not be unreasonably
withheld or delayed if the sublicense relates to the sale by
Licensee of one or more of its stores located in the Territory
which are in operation on the date of this agreement provided that
(a) Each proposed sublicensee enters directly into a trademark
license with Organic with terms substantially similar to those in
this agreement and (b) Organic shall have the right to reject a
proposed licensee if it finds the sublicensee’s financial
condition unacceptable. Organic reserves the right to require
payment of royalties as a condition of approval of a proposed
sublicence that results in an expansion of the Territory.
Notwithstanding any provision contained herein to the contrary,
Organic may license others, including but not limited to firms,
individuals, co-partnerships or corporations, to use the Marks in
connection with any products and services, and, except as
specifically granted herein, Organic reserves all rights pertaining
to the Marks.
2 .
Ownership and
Goodwill. Licensee
acknowledges that Organic shall as of the effective date and
thereafter own all right, title, and interest in and to the Marks
and all goodwill related thereto, and shall not at any time do or
cause to be done any act contesting or in any way impairing or
intending to impair any part of such right, title, or interest or
harming, misusing or bringing into disrepute the Marks. Licensee
recognizes the great value, prestige, publicity and goodwill
associated with the Marks, and in such connection, acknowledges
that such goodwill exclusively belongs to Organic and that the
Marks have acquired secondary meaning in the mind of the purchasing
public as a source of goods and services in the Field.
3.
Costs. Except as expressly herein, it is understood
that all costs associated with Licensee’s performance
hereunder or use of the Marks, whether approved or disapproved at
any stage by Organic, shall be borne by Licensee, and Organic has
no responsibility for any such costs.
4.
Representations and
Warranties.
4.1
Licensee warrants that, within
thirty days of the effective date, it will deliver to Organic all
of its files and records relating to the Marks, together with all
depictions of the Marks not required for Licensee to operate under
the license granted hereby. Organic shall have thirty days
thereafter to advise Licensee if it desires that Licensee cease use
of any such depictions, in which event Licensee shall have the
right to exhaust its current supplies of materials bearing the
Marks. Otherwise, Organic shall be deemed to approve all current
usages of the Marks by Licensee. Licensee hereby warrants that such
files and records will contain all information known to it related
to any and all claims of any kind, whether claims for infringement
of the Marks or claims that use of the Marks infringes the rights
of any third party. Otherwise, this license is given “AS
IS,” without warranty of any kind.
4.2
Neither party makes any warranty or
representation concerning the validity, enforceability or value of
any one or more of the Marks.
4.3
Neither party makes any
representation or warranty that any one or more of the Marks is
available for use as a service mark, a trademark or otherwise. EACH
PARTY HEREBY DISCLAIMS ANY AND ALL WARRANTIES RELATING TO THE MARKS
AND THE LICENSED RIGHTS, INCLUDING BUT NOT LIMITED TO WARRANTIES
OF
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TITLE, AGAINST INFRINGEMENT,
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.
Protection of the
Marks.
5.1
Licensee agrees to notify Organic
promptly in writing of all claims of infringement that may arise
during the term, including claims for infringement of the Marks and
claims that use of the Marks infringes the rights of any third
party relating to the Marks. Organic shall have the sole right to
protect the Marks and may, in its sole discretion, commence or
prosecute and seek any trademark registrations, claims or suits it
deems advisable, at its own expense, either in its own name or in
the name of Licensee, or join Licensee as a party thereto, at its
sole option. Licensee also agrees to provide all reasonable
assistance and to execute all further documents and provide all
further testimony appropriate to confirm Organic’s sole and
exclusive ownership of the Marks, worldwide.
5.2
Licensee agrees not, directly or
indirectly, to challenge or assist another party in challenging the
validity, use or registration by Organic of the Marks in any
registration or license or fictitious, assumed business or
corporate name or URL.
5.3
Quality, Markings.
Licensee agrees to maintain a level
of quality of the goods or services offered in connection with the
Marks substantially similar to that as of the effective date, no
less than consistent with general industry standards, and according
to any and all specifications Organic may provide to Licensee after
the effective date. To ensure the quality of the goods and services
offered under the Marks, Licensee will provide Organic’s
authorized representative access to the location at which it
maintains its business records during regular business hours and at
other times as may be mutually arranged, to further the
parties’ continued compliance with minimum quality control
standards. The parties will take all reasonable steps to protect
the confidentiality of all proprietary information disclosed under
this obligation. Licensee also agrees to cause statutory notices of
trademark, copyright and like registrations to be affixed to or
imprinted on products and materials on Organic’s request.
Licensee also agrees not to affix its own or any other trademark,
design or service mark to products or materials bearing the Marks
without Organic’s prior written approval.
6.
Samples. At Organic’s request, Licensee shall
promptly provide Organic, at no charge, reasonable quantities of
any Licensee materials and products related to the Marks. No new
materials or products will be manufactured or sold by Licensee
until Organic has given written approval at each appropriate stage.
Licensee agrees that the Marks possess a special, unique and
extraordinary character. If at any time Organic deems that the
continued development, manufacture or sale of any materials or
product will harm, bring into disrepute, or affect the integrity of
the Marks, or is not in keeping with the reputation of Organic,
Organic shall have the right to withdraw its approval previously
given. Licensee acknowledges that all materials produced pursuant
to this agreement which incorporate the Marks and all right, title
and interest therein, including copyright, shall be owned by
Organic. These materials may include but are not limited to
designs, sketches, tracings, draft and finished artwork, packaging,
advertisements, instructions and descriptive or textual materials.
In the event such materials are adjudged not to be derivative
works, Licensee hereby transfers and assigns to Organic, for
fair
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consideration, all rights, including
copyright, in all materials produced pursuant to this
agreement.
7.
Compliance.
Each party shall be solely
responsible for its compliance with all laws and regulations
relating to its duties hereunder and the design, manufacture, sale,
provision of, or distribution of any and all products and
services.
8.
Indemnification.
The parties hereby agree to
indemnify, defend and hold harmless one another and
successors-in-interest to their rights under this agreement from
all claims and costs that may arise from their unlawful and
tortious activities under the Marks, whether occurring before or
after the effective date. Licensee further agrees to indemnify,
defend, and hold Organic and its agents, assigns and successors in
interest harmless from any consumer protection and products
liability claims or suits arising or alleging to arise out of
Licensee’s activities. As soon as commercially practicable,
therefore, Licensee agrees to secure and maintain, at a minimum,
commercial general liability insurance, including products
liability, in the minimum amount of $2,000,000 per occurrence.
Policies evidencing the above coverage shall include Organic as an
Additional Insured and shall include or provide for insurance
coverage for liability assumed under this agreement. All such
insurance policies shall contain a minimum thirty (30) day notice
requirement to Organic prior to cancellation. As evidence that
Licensee has the required coverage, original certificates of
insurance or true copies of the policies shall be presented to
Organic upon request.
9.
Termination.
This agreement shall be perpetual
except in the following events of termination:
9.1
Any breach of this agreement shall
give the non-breaching party the right to terminate this agreement.
The aggrieved party shall, however, give the other party written
notice of the breach and 30 days from the date of actual receipt of
such notice to cure said breach. If such breach is not cured within
the 30-day period, this agreement shall automatically
terminate.
9.2
Upon termination of this agreement
for Licensee’s breach, Licensee shall, as soon as
commercially practicable, cease use of the Marks and transfer to
Organic all assumed business names, URLs, and other registrations
and applications which include any one or more of the marks, to the
extent not previously transferred to Organic.
9.3
This agreement shall automatically
terminate in the event that Licensee ceases use of the Marks for a
period longer than 365 days. On such a termination, all rights of
the Licensee shall revert automatically to Organic.
10.
Disclaimer of Agency, Partnership
and Joint Venture. In the
performance of this agreement, the parties and their respective
employees and agents will at all times act as independent
contractors as to one another, and shall not be considered
employees or agents of the other party. Nothing herein shall be
construed to grant either party the right to exercise control or
direction over the method by which the other party provides goods
or services. Further, nothing in this agreement shall be construed
to create any legal relationship between Organic and Licensee
except as expressly set forth herein.
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11.
Entire Agreement
. This agreement constitutes the
entire agreement and understanding between the parties relating to
its subject matter, and supersedes any and all prior agreements and
understandings, or course of prior conduct, whether written or
oral, relating to such subject matter.
12.
Severability
. Any term or provision of this
agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
13.
Assignment
. Except to a successor in interest
to all of a party’s rights in the Marks, this agreement may
be assigned by a party only upon the other party’s prior
written approval, not to be withheld unreasonably. Except in the
event of an assignment to such a successor in interest, Licensee
shall give Organic a minimum of 90 days advance written notice of
any bona fide offer to acquire its rights in the Marks by
assignment, and Licensee shall assign the Marks to Organic if
Organic is willing to meet or exceed the offer received by Licensee
in consideration for the assignment.
14.
Notices . All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be
deemed duly given upon receipt if it is sent by facsimile, or
reputable express courier, and addressed or otherwise sent to the
intended recipient as set forth below:
14.1
If to Briazz:
Briazz Inc.
3901 Seventh Avenue, Suite
200
Seattle, Washington 98108
Attention: Bill Zang
Fax: (206) 467-1970
with a copy to:
Cynthia A. Kuno
Crocker Kuno Ostrovsky,
LLC
720 Olive Way, Suite 1000
Seattle, Washington 98101
Fax: (206) 624-9894
14.2
If to Organic:
Organic Holding Company
5610 E. Lake Sammamish Parkway SE,
Suite A
Issaquah, Washington
98029
Attention: Jason Brown
Fax: (425) 837-9622
with a copy to:
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Carr, McClellan, Ingersoll, Thompson
& Horn
215 Park Road
Burlingame, California
94010
Attention: Ed Willig
Fax: (650) 373-3388
Any party may send any notice,
request, demand, claim or other communication hereunder to the
intended recipient at the address or facsimile number set forth
above using any other means (including personal delivery, messenger
service, ordinary mail, or electronic mail), but no such notice,
request, demand, claim or other communication shall be deemed to
have been duly given unless and until it is actually received by
the intended recipient. Any party may change the address or
facsimile number to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth.
15.
Jurisdiction and Venue
. The agreement shall be deemed to
have been made in Washington, and all questions relating to its
validity, interpretation, performance, and enforcement shall be
governed by and construed in accordance with the laws of the State
of Washington, notwithstanding any conflicts of law doctrine to the
contrary. In the event of legal action between the parties, both
parties hereby consent irrevocably to the exclusive jurisdiction of
and venue in the courts of King County, Washington.
16.
Attorney’s Fees
. The substantially prevailing party
in any dispute shall be awarded its reasonable attorney’s
fees, costs (including costs on appeal, expert’s fees and
court costs) and expenses as may be fixed by any court of
law.
17.
Survival . Sections, 2, 8 and 13 through 19 (inclusive)
of Article III of this agreement shall survive any
termination.
18.
Counterparts
. This agreement may be executed in
one or more counterparts, including electronic counterparts, each
of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
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19.
Modifications and
Waivers . No supplement,
modification or amendment of this agreement shall be binding unless
made in a written instrument which is signed by all of the parties
and which specifically refers to this agreement. Compliance with
the provisions of this agreement may be waived only by a written
instrument specifically referring to this agreement and signed by
the party waiving compliance. No course of dealing, nor any failure
or delay in exercising any right, shall be construed as a waiver,
and no single or partial exercise of a right shall preclude any
other or further exercise of that or any other right.
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AGREED:
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BRIAZZ, INC.:
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ORGANIC HOLDING COMPANY, INC.
d/b/a ORGANIC TO GO:
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By:
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By:
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Its:
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Date:
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7
EXHIBIT B
ORDER AUTHORIZING
SALE
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Honorable The Honorable Philip H. Brandt
Chapter 11
Hearing Date: April , 2005
Hearing Time:
am/pm
Hearing Location: United States Courthouse,
Seattle. Courtroom No. 8106
Response Date: April , 2005
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UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF WASHINGTON AT SEATTLE
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In re
BRIAZZ INC.,
Debtor.
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Case No. 04-17701
ORDER AUTHORIZING ASSET PURCHASE
AGREEMENT WITH ORGANIC HOLDING COMPANY; THE SALE OF CERTAIN OF
DEBTOR’S ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS,
INTERESTS, AND ENCUMBRANCES; THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN LEASES AND EXECUTORY CONTRACTS; AND THE GRANTING OF CERTAIN
OVERBID RIGHTS
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This matter having come before this
Court on the motion (the “Motion”) for an order
pursuant to sections 105(a), 363(b), 365(a) and 365(f) of Title 11
of the United States Code (the “Bankruptcy Code”) and
Federal Rules of Bankruptcy Procedure 2002, 6004, and 6006 (a)
authorizing the sale of certain of debtor’s assets outside
the ordinary course of business described in and in accordance with
the terms and conditions of that certain Asset Purchase Agreement,
dated April , 2005, between debtor and
Organic Holding Company (“Organic”) (a copy of which is
annexed to the Declaration of
in Support of the Motion as Exhibit ,
and is hereinafter referred to as the “Asset Purchase
Agreement”) for those certain assets described in Section 1.1
of the Asset Purchase Agreement (the “Assets”), to be
conveyed free
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and clear of all liens, interests
and encumbrances, approving the assumption and assignment of Leases
and Executory Contracts described in Schedule 1.8 to the Asset
Purchase Agreement (the “Leases and Executory
Contracts”) and further granting certain overbid rights as
described in Section 1.12 of the Asset Purchase Agreement (the
“Overbid Rights”) and notice of the Motion having been
duly given in accordance with applicable Federal Rules of
Bankruptcy Procedure to (i) the Office of the United States
Trustee; (ii) all parties who have filed notices of appearance in
this chapter 11 case; (iii) all parties who have filed proofs of
claim in this chapter 11 case; (iv) all
