UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): June 30, 2015

 

Acacia Diversified Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Texas 1-14088 75-2095676
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

 

3512 E. Silver Springs Blvd - #243, Ocala, FL 34470

(Address of Principal Executive Offices)

 

(877) 513-6294

(Registrant’s Telephone Number, Including Area Code)

 

Acacia Automotive Inc.

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

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Item 1.01 Entry into a Material Definitive Agreement

 

Sale of Assets of Operating Subsidiaries

 

On June 29, 2015, the majority shareholders of the Company, themselves holding approximately 68% of the total issued and outstanding shares of our common stock entered into a Written Consent in Lieu of a Special Meeting of Shareholders approving the sale of substantially all of the assets of our operating subsidiaries (the “Stockholder Resolution”)(the “Transaction”). The Company’s Board of Directors subsequently entered into a Unanimous Written Consent in Lieu of a Special Meeting of Directors on such date likewise ratifying and approving the Transaction. The Transaction, in relevant part, provided for the sale of substantially all of the assets of our two subsidiaries: (a) Citrus Extracts, Inc., a Florida corporation (“CEI”); and (b) Acacia Transport Services, Inc., a Florida corporation (“ATS”)(together, the “Assets”). CEI was actively engaged in the business of acquiring and processing raw citrus peel into dehydrated food grade citrus ingredient products, while ATS was engaged in the business of transporting raw citrus peel.

 

According to the Asset Purchase Agreement dated June 29, 2015 (the “APA”) by and among the Company, CEI and ATS, and our counterparties, Citrus Extracts II, LLC, a Florida limited liability company, and Citrus Extracts Transport Services, LLC, a Florida limited liability company (together with Citrus Extracts II, LLC, the “Buyer”), the purchase price received by the Company for the Assets was Two Million Five Hundred Sixty Thousand Eight Hundred Fourteen Dollars and 22/100 Dollars ($2,560,814.22). The Buyer further agreed to assume certain liabilities of the Company, ATS and CEI, including, specifically, any liabilities related to existing contracts to which CEI or ATS were a party to. Together with the APA, the Stockholder Resolution further provided for ratification of customary agreements appurtenant to the APA, including Assignment and Assumption of Asset agreements and Intellectual Property Assignment agreements.

 

Furthermore, our Chief Executive Officer, Chairman and majority shareholder, Steve Sample, entered into a Non-Competition and Restricted Covenant Agreement pursuant to which he agreed to otherwise not engage in the former business of CEI or ATS for a period of five (5) years. Likewise, related parties of the Company Ed Sample and William Sample entered into similar agreements concerning non-competition. A true and accurate copy of the APA, the Non-Competition and Restricted Covenant Agreements and related agreements are made exhibits to this Current Report.

 

The Stockholder Resolution further provided that the management of the Company was specifically authorized to employ the proceeds of the Transaction to retire any outstanding liabilities of the Company and to further employ any remainder in its effort to identify and acquire new businesses or business assets.

 

As first reported on the Company’s Current Report on Form 8-K dated July 10, 2013, the Company acquired substantially all of the assets of Red Phoenix Extracts, Inc., a Florida corporation in exchange for nine hundred thousand (900,000) shares of the Company’s common stock (the “RPE Acquisition”). The assets acquired in the RPE Acquisition represented the majority of the operating assets of CEI’s citrus peel processing business. Concomitant with the completion of the Transaction described herein, the Company has begun a process to identify and acquire assets or businesses which management believes to be undervalued and having the potential for generating long term profits. To date, no such opportunities have been identified, nor can there be any guarantees that such opportunity will ever be identified.

 

Forward-Looking Statements

 

This Current Report on Form 8-K contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward statements relate to the Company's ability to pursue new business opportunities and execute its business plan. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the ability of management to identify and assess potentially profitable business opportunities and certain other factors that may affect future operating results. In addition, the statements in this Current Report on Form 8-K represent the Company's expectations and beliefs as of the date of this report. The Company anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company's expectations or beliefs as of any date subsequent to the date of this report.

 

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Employment Agreement with Steven Sample

 

On June 29, 2015, the majority shareholders of the Company, themselves holding approximately 68% of the total issued and outstanding shares of our common stock entered into a Written Consent in Lieu of a Special Meeting of Shareholders with authorized and approved an extension of the term of the Employment Agreement by and between the Company and Steven Sample, our Chairman of the Board of Directors, Chief Executive Officer and majority shareholder two (2) years, until December 31, 2019. The current Employment Agreement was first reported on the Company’s Current Report on Form 8-K dated August 27, 2012.

 

Item 2.01. Completion of Acquisition or Disposition of Assets

 

On June 29, 2015, the Company completed a transaction pursuant to which it sold substantially all of the assets of our two subsidiaries: (a) Citrus Extracts, Inc., a Florida corporation (“CEI”); and (b) Acacia Transport Services, Inc., a Florida corporation (“ATS”)(together, the “Assets”). The buyers of the Assets, Citrus Extracts II, LLC, a Florida limited liability company, and Citrus Extracts Transport Services, LLC, a Florida limited liability company (together with Citrus Extracts II, LLC, the “Buyer”), paid the Company Two Million Five Hundred Sixty Thousand Eight Hundred Fourteen Dollars and 22/100 Dollars ($2,560,814.22) as consideration therefor. The agreements between the parties, which are made part of this Current Report as exhibits hereto, contained terms and conditions customary for transactions of this nature, including, among other matters, assignments of third party contracts, intellectual property and other intangible assets and agreements related to non-competition

 

Item 2.05. Costs Associated with Exit or Disposal Activities

 

In connection with the transactions described in this Current Report, the Company incurred legal and other professional fees in the approximate amount of Ten Thousand and 00/100 Dollars ($10,000/00).

 

Item 5.02. Changes of Directors or Officers

 

On June 29, 2015, the majority shareholders of the Company, themselves holding approximately 68% of the total issued and outstanding shares of our common stock entered into a Written Consent in Lieu of a Special Meeting of Shareholders which provided for, among other matters, the appointment of Steven Sample, Danny Gibbs, Dan L. Rigdon and V. Weldon Hewitt as Directors of the Company for a term of one (1) year subject to their replacement or resignation.

 

Steve Sample, Chairman of the Board of Directors

 

Steven L. Sample, age 67, became a director and officer of the Company in August 2006 when he was named as a Director and Chief Executive Officer.  From January 2004 through December 2005, he served as Executive Director of Sales for ADESA Corporation, the second-largest automobile auctions conglomerate in North America, when he left ADESA to draft the business plan for his Acacia concept.  From January 2002 through December 2003, he was the General Sales Manager of ADESA’s Ocala, Florida Auto Auction where he was credited for a loss-to-profit turnaround of approximately $1.75 million in the first ten months 2002, followed by continuing profitability in ensuing years. From September 1990 through December 2001, he was employed by Mid-America Auto Auction, an Anglo-American Auto Auction (Anglo-American later being acquired by ADT and renamed ADT Automotive Auctions), which was generally acquired by Manheim Auctions in 2000, with Mr. Sample serving as General Sales Manager and in other strategic capacities.  Prior to that time, Mr. Sample managed a number of automotive dealerships in various capacities for the big three U.S. automakers and such notable imports as Lamborghini, Maserati, Volkswagen, AMG, and others.

 

Danny Gibbs, Director

 

Danny R. Gibbs, age 57 was reappointed to the Board of Directors on September 1, 2013 after originally serving from October of 1984 through September 29, 2011.  Mr. Gibbs was the President of Gibbs Construction, Inc. (later becoming Acacia Automotive, Inc. and ultimately Acacia Diversified Holdings, Inc.) and a charter member of the Company's Board of Directors

 

 

 

beginning with its formation in October of 1984 until April of 2000, and in February of 2007 Mr. Gibbs agreed to serve on Acacia's new board, where he served until September 29, 2011. The Company was most pleased to welcome Mr. Gibbs’ return to its Board of Directors as he brings decades of experience in the public domain.  From 2000 through 2003, Mr. Gibbs served as Senior Project Manager for TOC Companies in the Dallas, Texas area. From the beginning of 2004 through the present, he has served in a similar capacity with Dimensional Construction, Inc. Both companies were located in Garland, Texas where Mr. Gibbs resides with his family. 

 

Dan L. Rigdon, Director

 

Dan L. Rigdon, age 66. On September 1, 2013, Mr. Rigdon was appointed to the Company’s Board of Directors.  For the past 32 years Mr. Rigdon has served as Senior Pastor and most recently, Pastor Emeritus, in the Dallas Metroplex and has held numerous officer and director positions with a variety of organizations.  At the age of 24, Reverend Rigdon was elected Executive Vice President of Christian Life College in Stockton, California after which he was elected Director of Promotions and Publications for the Youth Division of the United Pentecostal Church International ( “UPCI” ).  Following that assignment, Reverend Rigdon was elected to the position of General Youth Secretary of UPCI, an organization of more than 9,800 ministers, ultimately being elected to General Youth President of that organization.  Following his tenure as General Youth President of UPCI, Reverend Rigdon was elected President of Christian Life College, Stockton, California.  Reverend Rigdon was also a major contributor in the envisioning and formation of  "Compassion Services International" , serving as a driving force in the development of its philosophy and scope of endeavor and served as Chairman of its first Board of Directors in the early 1980's. For the past six years Reverend Rigdon has served on the Board of Directors of Natural Citrus Products Corporation.

 

V. Weldon Hewitt, Director

 

V. Weldon Hewitt, age 77 was reappointed to the Board of Directors on September 1, 2013 after originally serving from February 1, 2007 through September 29, 2011.  Mr. Hewitt has served as President and CEO of Hewitt Marketing since 1985, where he has been instrumental in establishing numerous OEM supplier contracts providing radios and other media devices and electronics, mobile cellular telephones, power-actuated equipment and accessories to many major vehicle manufacturers. Prior to that time, Mr. Hewitt founded and served as CEO of a manufacturing concern with annual sales of more than $20 Million in audio sound systems for the luxury car market. His extensive experience in providing a wide variety of products and services to the automotive industry spans more than four decades. Mr. Hewitt resides near Louisville, Kentucky with his family.

 

Item 5.03. Changes to Articles of Incorporation or Bylaws; Change in Fiscal Year

 

On June 29, 2015, the majority shareholders of the Company, themselves holding approximately 68% of the total issued and outstanding shares of our common stock entered into a Written Consent in Lieu of a Special Meeting of Shareholders which provided for, among other matters, an amendment to Article XI of the Company’s Articles of Incorporation. Article XI was amended to include the following language:

 

“With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.”

 

Article XI of the Company’s Articles of Incorporation now reads, in its entirety:

 

Any action required by the Texas Business Organizations Code to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which each shareholder entitled to vote on the action is present and votes, sign a written consent or consents stating the action taken.

 

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With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code. Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Unless otherwise restricted by these Articles of Incorporation, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Board of Directors. Such consent shall have the Written Consent By the Majority of the Shareholders of Acacia Diversified Holdings, Inc. same force and effect as a unanimous vote at a meeting. Any such signed consent, or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Likewise, Paragraph 2.03 of the Company’s Amended and Restated Bylaws were amended to include the following language:

 

“With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.”

 

Article 2.01 of the Company’s Amended and Restated Bylaws now reads, in its entirety:

 

“2.10 Action Without Meeting. Any action required by the Texas Business Organizations Code or other statute to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which shareholders entitled to vote on the action and having at least the minimum number Written Consent By the Majority of the Shareholders of Acacia Diversified Holdings, Inc. of votes that would be necessary to take the action that is the subject of the consent are present and vote, sign a written consent or consents stating the action taken.

 

With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code.

 

Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.”

 

 

 

Item 5.07. Submission of Matters to a Vote of Security Holders

 

On June 29, 2015, the majority shareholders of the Company, themselves holding approximately 68% of the total issued and outstanding shares of our common stock entered into a Written Consent in Lieu of a Special Meeting of Shareholders approving the sale of substantially of the assets of our operating subsidiaries (the “Stockholder Resolution”)(the “Transaction”). The Resolution also approved and ratified certain agreements ancillary to the Transaction, such as asset assignment.

 

The Stockholder Resolution further provided that:

 

(a) the management of the Company was specifically authorized to employ the proceeds of the Transaction to retire any outstanding liabilities of the Company and to further employ any remainder in its effort to identify and acquire new businesses or business assets;

 

(b) Steven Sample, Danny Gibbs, Dan L. Rigdon and V. Weldon Hewitt were elected as Directors of the Company for a term of one (1) year subject to their replacement or resignation;

 

(c) authorized and approved an extension to the Amended Employment Agreement by and between the Company and Steven Sample, our Chairman of the Board of Directors, Chief Executive Officer and majority shareholder extending the term of such agreement two (2) years, until December 31, 2019;

 

(d) the Articles of Incorporation and Bylaws of the Company be amended, as described herein; and

 

(e) the Company’s Acacia Diversified Holdings, Inc. 2012 Stock Incentive Plan be terminated.

 

Item 7.01.  Regulation FD Disclosure

 

In accordance with the Texas Business Organizations Code, the Company’s Chairman, Chief Executive Officer and majority shareholder, Steve Sample, on behalf of the Board of Directors of the Company, drafted correspondence to be sent to the stockholders of the Company by August 21, 2015, a copy of which is included as an Exhibit to this Current Report.

 

Item 8.01 Other Events

 

On June 29, 2015, the majority of shareholders of the Company, themselves holding approximately 68% of the total issued and outstanding shares of our common stock entered into a Written Consent in Lieu of a Special Meeting of Shareholders, voted to terminate the Acacia Diversified Holdings, Inc. 2012 Stock Incentive Plan (the “Plan”). The Plan was first ratified by the a majority of the Company’s shareholders on July 26, 2012 as first reported in that Current Report on Form 8-K filed with the Commission on August 27, 2012. A copy of the Plan is incorporated by reference as Exhibit 99.2 in the aforesaid report.

 

 

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Item 9.01. Financial Statements and Exhibits

 

Exhibits

 

3.1 Amended and Restated Bylaws of the Company dated June 29, 2015

 

3.2 Amended and Restated Articles of Incorporation of the Company dated June 29, 2015

 

10.1 Asset Purchase Agreement dated June 29, 2015

 

10.2 Citrus Extracts, LLC Assignment and Assumption Agreement dated June 29, 2015

 

10.3 Citrus Extracts Transport Services, LLC Assignment and Assumption Agreement dated June 29, 2015

 

10.4 Acacia Diversified Holdings, Inc. Intangible Asset Assignment Agreement dated June 29, 2015

 

10.5 Citrus Extracts, Inc. Intangible Asset Assignment Agreement dated June 29, 2015

 

10.6 Acacia Transport Services, Inc. Intangible Asset Assignment Agreement dated June 29, 2015

 

10.7 Acacia Transport Services, Inc. Bill of Sale

 

10.8 Citrus Extracts, Inc. Bill of Sale

 

10.9 Non Competition and Restrictive Covenant Agreement of Steven Sample dated June 29, 2015

 

10.10 Non Competition and Restrictive Covenant Agreement of Ed Sample dated June 29, 2015

 

10.11 Non Competition and Restrictive Covenant Agreement of William Sample dated June 29, 2015

 

10.12 Amended Employment Agreement of Steven Sample dated July 26, 2012*

 

99.1 Exhibit Correspondence to the Stockholders of Acacia Diversified Holdings, Inc. to be dated on or before August 21, 2015

 

99.2 Acacia Diversified Holdings, Inc. 2012 Stock Incentive Plan*

 

*Incorporated by reference from the Current Report on Form 8-K dated August 27, 2012

 

 

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ACACIA DIVERSIFIED HOLDINGS, INC.  
       
Date: July 16, 2015          By: /s/ Steven L. Sample  
    Steven L. Sample  
    Chief Executive Officer  
       

 

RESTATED BYLAWS OF

ACACIA DIVERSIFIED HOLDINGS, INC.

 

Article I

 

1.01 Registered Office and Agent. The registered office of the Corporation shall be located at such place within the State of Texas as may be designated by the Board of Directors. The registered agent at such address shall likewise be designated by the Board of Directors.

 

1.02 Other Offices. The Corporation may also have offices at such other places, either within or without the State of Texas, as the Board of Directors may, from time to time, determine, or as the business of the Corporation may require.

 

Article II

 

Shareholders

 

2.01 Place and Time of Meeting. All meetings of the shareholders shall be held at such time and place within or without the State of Texas as shall be stated in the notice of the meeting.

 

2.02 Annual Meeting. Annual meetings of the shareholders, commencing with the year 1986, shall be held on that date and time set by the board of directors, which date and time shall be within four months after the end of the fiscal year, at which they shall elect a Board of Directors and transact such other business as may be properly brought before the meeting. In the absence of any timely Annual Meeting of shareholders as prescribed by the governing documents of the Corporation, any person appointed or elected to serve as a Director of the Corporation shall serve until the election and qualification of his successor.

 

2.03 Voting List. At least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, with the address of each and the number of voting shares held by each, shall be prepared by the officer or agent having charge of the stock transfer books. The list, for a period of ten (10) days prior to the meeting, shall be kept on file at the registered office of the Corporation, or at such other reasonable and convenient place as the Corporation shall designate, and shall be subject to inspection by any shareholder at any time during usual business hours. The list shall also be produced and kept open at the time and place of the meeting, during the whole time thereof, and shall be subject to the inspection of any shareholder during the whole time of the meeting.

 

2.04 Special Meeting. Special meetings of the shareholders may be called by the President, the Board of Directors, or the holders of not less than one-tenth (1/10th) of all shares entitled to vote at the meeting. Other than procedural matters, business transacted at any special meeting shall be confined to the purposes stated in the notice of the meeting.

 

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2.05 Notice. Written or printed notice stating the place, day and hour of the meeting, and, in case of special meetings, the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than fifty (50) days before the meeting, either personally or by mail, by or at the direction of the President, Secretary, or the officer or person calling the meeting, to each shareholder of record entitled to vote at such meeting.

 

2.06 Quorum. The holders of a majority of the votes representing shares issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by statute, by the Articles of Incorporation or by these Bylaws. If a quorum is not present or represented at a meeting of the shareholders, the shareholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.

 

2.07 Majority Vote, Withdrawal of Quorum. When a quorum is present at any meeting, the vote of the holders of a majority of the votes representing shares having voting power, present in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which, by express provision of the statutes or of the Articles of Incorporation or of these Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough votes represented by shareholders, present in person or by proxy, to leave less than a quorum.

 

2.08 Method of Voting. Each outstanding share, regardless of class, shall be entitled to the number of votes attached to that share by the relative voting rights and preferences attached thereto, on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation. At any meeting of the shareholders, every shareholder having the right to vote may vote either in person or by proxy executed in writing by the shareholder or his duly authorized attorney-in-fact. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless otherwise made irrevocable by law. Upon request by any shareholder, each proxy shall be filed with the Secretary of the Corporation prior to or at the time of the meeting. Voting for directors shall be in accordance with Section 3.06 of these Bylaws. Any vote may be taken viva voce or by show of hands unless someone entitled to vote objects, in which case, written ballots shall be used.

 

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2.09 Record Date, Closing Transfer Books. The Board of Directors may fix, in advance, a record date for the purpose of determining shareholders entitled to notice of or to vote at a meeting of the shareholders, the record date to be not less than ten (10) nor more than fifty (50) days prior to the meeting; or the Board of Directors may close the stock transfer books for such purpose for a period of not less than ten (10) nor more than fifty (50) days prior to such meeting; or the Board of Directors may close the stock transfer books for such purpose for a period of not less than ten (10) nor more than fifty (50) days prior to such meeting. In the absence of any action by the Board of Directors, the date upon which the notice of the meeting is mailed shall be the record date.

 

2.10 Action Without Meeting. Any action required by the Texas Business Organizations Code or other statute to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which shareholders entitled to vote on the action and having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent are present and vote, sign a written consent or consents stating the action taken.

 

With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code. Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Article III

 

Directors

 

3.01 Management. The business and affairs of the Corporation shall be managed by the Board of Directors who may exercise all such power of the Corporation and do all such lawful acts and things as are not (by statute or by the Articles of Incorporation or by these Bylaws) directed or required to be exercised or done by the shareholders.

 

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3.02 Number, Qualification, Election, Term. The Board of Directors shall consist of that number of Directors elected at each annual meeting of Shareholders, but never less than one nor more than seven. No director or shareholder need be a resident of the State of Texas. The Directors shall be elected at the annual meeting of the shareholders, except as provided in Bylaws 3.03 and 3.05. Each director shall hold office until his or her successor shall be elected and shall qualify.

 

3.03 Change in Number. The number of directors may be increased or decreased from time to time by amendment to these Bylaws, but no decrease shall have the effect of shortening the term of any incumbent director. Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose.

 

3.04 Removal. Any one or more of the directors may be removed, either with or without cause, at any time, by the votes of the shareholders representing fifty-one percent (51%) or more of the entire outstanding voting shares at any special meeting called for that purpose or by written consent of shareholders in lieu of a special meeting as provided in Bylaws 2.10.

 

3.05 Vacancies. Any vacancy occurring in the Board of Directors (by death, resignation, removal or otherwise) may be filled by an affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.

 

3.06 Election of Directors. Directors shall be elected by a plurality of the votes representing all shares entitled to vote at an annual meeting or special meeting of shareholders called for that purpose, whether present in person or by proxy. Cumulative voting shall not be permitted.

 

3.07 Place of Meetings. Meetings of the Board of Directors, regular or special, may be held either within or without the State of Texas.

 

3.08 First Meetings. The first meeting of each newly elected Board of Directors shall be held without further notice immediately following the first meeting of the shareholders at which they were elected, and at the same place, unless (by unanimous consent of the directors then elected and serving) such time or place shall be changed.

 

3.09 Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board.

3.10 Special Meetings. Special meetings of the Board of Directors may be called by the President, and shall be called by the Secretary on the request of one (1) Director. Written notice of special meetings of the

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board of Directors shall be given to each Director at least three (3) days before the date of the meeting. Neither the business to be transacted nor the purpose of any regular or special meeting of the Board of Directors need be specified in the notice or waiver of such meeting.

3.11 Quorum, Majority Vote. At all meetings of the Board of Directors, a majority of the number of directors present, whether one (1) or more shall constitute a quorum for the transaction of business. The act of a quorum shall be the act of the Board of Directors, except as otherwise specifically provided by statute or by the Articles of Incorporation or by these Bylaws.

 

3.12 Action Without Meeting. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Board of Directors. Such consent shall have the same force and effect as a unanimous vote at a meeting. Any such signed consent, or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Article IV

 

Officers

 

4.01 Number and Qualifications. The officers of the Corporation may consist of a Chairman, a President, one or more Vice Presidents, a Secretary and a Treasurer. Each of these officers shall be elected by the Board of Directors at its first meeting after the first meeting of the shareholders at which they were elected,. Such other officers and assistant officers and agents as may be deemed necessary may be elected or appointed by the Board of Directors at any time. Any two or more offices may be held by the same person. No officer or agent need be a shareholder, a director, or a resident of the United States.

 

4.02 Term, Removal, Vacancies. The officers of the Corporation shall hold office until their successors are chosen and qualify. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever, in its judgment, the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment shall not of itself create contract rights. Any vacancy occurring in the offices of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors.

 

4.03 Compensation. The compensation of officers and agents shall be fixed from time to time by the Board of Directors.

 

4.04 President. The President shall be the chief executive officer of the Corporation, shall preside at all meetings of the shareholders and the Board of Directors, shall have general and active management of the business of the Corporation, and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall have authority to appoint and discharge agents and employees, subject to the approval of

 

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the Board of Directors. He shall have authority to make and enter into contracts, to make purchases and sales, and to sign, execute and deliver all contracts, conveyances, deeds, deeds of trust, leases, assignments, mortgages, chattel mortgages, pledges and releases, and all other written instruments of any character appropriate to any other powers or duties of the President, in the name of and binding upon the Corporation.

 

4.05 Vice President. The Vice Presidents, in the order of their seniority, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the Board of Directors shall prescribe or as the President may delegate.

 

4.06 Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the shareholders, and record all of the proceedings of such meetings in a book to be kept for that purpose. In the absence of the Secretary at any meeting, the Assistant Secretary or such other person as may be designated by the President or Chairperson of such meeting shall record all of the proceedings of such meetings in a book to be kept for that purpose. The Secretary, Assistant Secretary, or President shall give or cause to be given notice of all meetings of the shareholders and shall perform such other duties as may be prescribed by the Board of Directors or the President, under whose supervision he or she shall be. He or she shall keep in safe custody the seal of the Corporation and affix same to any instrument requiring it and, when so affixed, it shall be attested by his or her signature or by the signature of an Assistant Secretary.

 

4.07 Assistant Secretary. The Assistant Secretaries, in the order of their seniority unless otherwise determined by the Board of Directors, shall in the absence or disability of the Secretary, perform the duties and have the authority and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the Board of Directors may prescribe or as the President may delegate.

 

4.08 Treasurer. The Treasurer shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation, as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation.

 

4.09 Assistant Treasurer. The Assistant Treasurers, in the order of their seniority unless otherwise determined by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and have the authority and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the Board of Directors may prescribe or the President may delegate.

 

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Article V

 

Certificates for Shares

 

5.01 Certificates. Certificates, in the form determined by the Board of Directors, shall be delivered, representing all shares to which shareholders are entitled. Such certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, and may be sealed with the seal of the Corporation or a facsimile thereof. Each certificate shall state on its face that the Corporation is organized under the laws of the State of Texas, the name of the person to whom issued, the number and class and the designation of the series, if any, which such certificate represents, and the par value of each share represented by such certificate or a statement that the shares are without par value.

 

5.02 Replacement of Lost or Destroyed Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates therefor issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion, as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such sum as it may direct, as indemnity against any claim that may be made against the Corporation with respect to the certificates alleged to have been lost or destroyed.

 

5.03 Transfer of Shares. Shares of stock shall be transferable only on the books of the Corporation by the holders thereof, in person, or by his duly authorized attorney. Upon surrender to the Corporation or its transfer agent of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation or its transfer agent shall issue a new certificate to the person entitled thereto, cancel the old certificates, and record the transaction upon its books.

 

5.04 Registered Shareholder. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it has express or other notice thereof, except as otherwise provided by law.

 

Article VI

 

Notice and Waivers

 

6.01 Notices. Notices to directors and shareholders shall be in writing and delivered personally or mailed or sent by telegram. If mailed, any such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the person receiving same at his address as it appears on the books of the Corporation, with ordinary postage thereon prepaid.

 

6.02 Waiver. Whenever any notice is required to be given to any shareholder or director under the provisions of the statutes or of the Articles of Incorporation or of these Bylaws, a waiver thereof, in writing,

 

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signed by the person or persons entitled to receive such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice.

 

6.03 Attendance as Waiver. Attendance of a director at a meeting shall constitute a waiver of the notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

 

Article VII

 

General Provisions

 

7.01 Dividends. The Board of Directors may declare and the Corporation may pay dividends on its outstanding shares in cash, property or its own shares, pursuant to law and subject to the provisions of its Articles of Incorporation. The Board of Directors may fix in advance a record date for the purpose of determining shareholders entitled to receive payment of any dividend, the record date to be not more than fifty (50) days prior to the payment date of such dividend, or the Board of Directors may close the stock transfer books for such purpose for a period of not more than fifty (50) days prior to the payment date of such dividend. In the absence of any action by the Board of Directors, the date upon which the Board of Directors adopts the resolution declaring the dividend shall be the record date.

 

7.02 Reserves. The Board of Directors may, by resolution, create a reserve or reserves out of earned surplus for any proper purpose or purposes and may abolish such reserve in same manner.

 

7.03 Books and Records. The Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and Board of Directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each.

 

7.04 Checks and Notes. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers, or such other person or persons, as the Board of Directors may from time to time designate.

 

7.05 Fiscal Year. The fiscal year of the Corporation shall be Calendar.

 

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7.06 Seal. The corporate seal (of which there may be one (1) or more exemplars) shall be in such form as shall be fixed by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

 

7.07 Resignations. Any director, officer or agent may resign by giving notice to the President or the Secretary in writing, by facsimile or other electronic transmission thereof, or by telegram. The resignation shall take effect at the time specified therein or immediately if no time is specified therein. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

Article VIII

 

Interested Persons

 

No contract or other transaction between the Corporation and any other corporation, and no other act of the Corporation, shall, in the absence of fraud, be invalidated or in any way affected by the fact that any of the directors of the Corporation was pecuniarily or otherwise interested in such contract, transaction or other act, or was a director or an officer of such other corporation. Any director of the Corporation, individually, or any firm or association of which any such director may be a member may be a party to or may be pecuniarily or otherwise interested in any contract or transaction of the Corporation, provided that the fact that he, individually, or such firm or association is so interested shall be disclosed or shall have been known to the Board of Directors or a majority of such members thereof as shall be present at any meeting of the Board of Directors at which such action upon any such contract or transaction shall be taken; and any director of the Corporation who is a director or officer of such other corporation, or who is so interested, may be counted in determining the existence of a quorum at any meeting of the Board of Directors which shall authorize any such contract or transaction, and may vote thereat to authorize any such contract or transaction, as long as such vote is in accordance with the Texas Business Organizations Code, as amended. Every other director of the Corporation is hereby relieved from any disability which might otherwise prevent him from carrying out transactions with or contracting with the Corporation for the benefit of himself or any firm, corporation, association, trust or organization in which or with which he may be in anywise interested or connected.

 

Article IX

 

Indemnification

 

Permissive Indemnification. The Corporation shall, to the maximum extent permitted by the Texas Business Organizations Code (or any other applicable law, rule or regulation), indemnify and hold harmless each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer of the Corporation, was acting at

 

9

 

the direction of and on behalf of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding.

 

Pursuant to the aforegoing, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for actions specified in accordance with Article 8.102 of the Texas Business Organizations Code as the same exists hereafter may be amended, or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this paragraph by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

 

Mandatory Indemnification. The Corporation shall indemnify an officer or director, former officer or director, or other person acting at the direction of and on behalf of the Corporation against reasonable expenses actually incurred by the person in connection with a proceeding in which the person is a respondent because the person is or was an officer or director or other specified agent of the Corporation (a) if the person is wholly successful, on the merits or otherwise, in the defense of the proceeding; or, (b) a court that determines, in a suit for indemnification, that an officer or director, former officer or director, or other person acting at the direction of and on behalf of the Corporation is entitled to indemnification under this section shall order indemnification and award to the person the expenses incurred in securing the indemnification.

 

Subject to the aforegoing, expenses incurred by any such person in defending a civil or criminal action, suit or proceeding, subject to the terms and conditions of this Article IX, shall be paid by the Corporation on an ongoing basis as billed in advance of the final disposition of such action, suit or proceeding, to the maximum extent permitted by law. Notwithstanding any subsequent alteration, amendment or repeal of this Article IX, the rights to indemnification and to payments created by this Article IX shall apply to (a) any claims made or asserted at any time while this Article IX is in effect and (b) any claims based on or arising from any act, omission or event occurring at any time while this Article IX is in effect

 

The Corporation may, at the discretion of the Board of Directors, purchase and maintain insurance, at its expense, and to indemnify any person against any judgment, fine, amount paid in settlement or other liability, if the Corporation would have the power to so indemnify such person under the Texas Business Organizations Code.

 

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Article X

 

Amendments

 

These Bylaws may be altered, amended or repealed at any meeting of the Board of Directors at which a quorum is present, by the affirmative vote of the majority of the directors present at such meeting.

 

June 29, 2015

Exhibit 3.2

 

ARTICLES OF AMENDMENT AND RESTATED

ARTICLES OF INCORPORATION OF

ACACIA DIVERSIFIED HOLDINGS, INC.

 

Acacia Automotive, Inc., a Texas for profit corporation (the “Corporation”), pursuant to the provisions of Sections 22.105, 22.106, 22.108, 22.109 and related provisions of the Texas Business Organizations Code hereby adopts these amendments and restated Articles of Incorporation, which accurately copies and makes new amendments to the Articles of Incorporation of the Corporation and contains all amendments thereto that are in effect to date and as further amended by such Restated Articles of Incorporation.

 

WHEREAS the Corporation’s current Articles of Incorporation, together with all previous amendments thereto and prior to any new amendments thereof, should be properly incorporated hereinbelow by way of reference.

 

NOW THEREFORE, BE IT RESOLVED that the following accurately sets forth the Corporation’s current Articles of Incorporation, together with all previous amendments thereto, being the entirety of same prior to any new amendments made by this filing as of June 9,2 015:

 

 

 

WHEREAS , the Board of Directors now deems it to be in the best interests of the Corporation to amend and restate the Corporation’s Articles of Incorporation, subject to ratification of its shareholders; and

 

WHEREAS these Amended and Restated Articles of Incorporation make new amendments to the existing Articles of Incorporation, and each Article of the original Articles of Incorporation, and each subsequent amendment of any thereof, is hereinafter stated and subsequently eliminated and the Articles appearing in the Restated Articles of Incorporation attached to this form are substituted in their place; and,

 

WHEREAS each new amendment has been made in accordance with the provisions of the Texas Business Organizations Code, these amendments to the Articles of Incorporation and the Restated Articles of Incorporation having been approved by the governing documents of the Corporation in the manner required by the Texas Business Organizations Code; and,

 

WHEREAS the Board of Directors deems it in the best interests of the Corporation hereby to adopt and be governed by the Texas Business Organizations Code, as pursuant to Chapter 4 thereof, as it applies to for-profit corporations, and to no longer be governed by the expired Texas Business Corporation Act; and,

 

WHEREAS the Corporation has determined to, and the Texas Business Organizations Code permits it to, continue forward with the use of and reference to certain synonymous terms including but not limited to “articles of incorporation” rather than “certificate of formation”, “authorized capital stock” rather than “authorized shares”, and other similar references.

 

NOW THEREFORE, BE IT RESOLVED that, pursuant to the provisions of Sections 3.051, 3.057, 3.063, 21.052, 21.053, 21.054   and/or other relevant sections of the Texas Business Organizations Code, the Board of Directors of the Corporation on July 20, 2012 adopted in the entirety hereof the following Amendments to its Articles of Incorporation which accurately copies the Articles of Incorporation and all amendments in effect to date and the full Restatement of its Articles of Incorporation, subject to proper ratification by the shareholders of the Corporation; and,

 

BE IT FURTHER RESOLVED that the Corporation’s Articles of Incorporation, as further amended by these Articles of Amendment, identified and made in accordance with the Texas Business Organizations Code, are set forth below and contain no other changes in any provisions.

 

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The instrument described above previously stated:

 

ARTICLE ELEVEN

 

Any action required by the Texas Business Organizations Code to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which each shareholder entitled to vote on the action is present and votes, sign a written consent or consents stating the action taken.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code.

 

Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Unless otherwise restricted by these Articles of Incorporation, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Board of Directors.  Such consent shall have the same force and effect as a unanimous vote at a meeting.  Any such signed consent, or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

 

That provision is now changed to correctly read:

 

ARTICLE ELEVEN

 

 

Any action required by the Texas Business Organizations Code to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which each shareholder entitled to vote on the action is present and votes, sign a written consent or consents stating the action taken.

 

With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code. Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Unless otherwise restricted by these Articles of Incorporation, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Board of Directors. Such consent shall have the Written Consent By the Majority of the Shareholders of Acacia Diversified Holdings, Inc. same force and effect as a unanimous vote at a meeting. Any such signed consent, or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

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RESTATED ARTICLES OF INCORPORATION

OF ACACIA DIVERSIFIED HOLDINGS, INC.

 

WHEREAS Acacia Diversified Holdings, Inc., in accordance with and pursuant to the provisions of Sections 3.057, 3.059, 3.063, 21.053, 21.054, and 21.056 of the Texas Business Organizations Code, adopts these following restated Articles of Incorporation, which accurately states the text and all amendments thereof in their entirety. These Restated Articles of Incorporation do not contain any other change to the Articles of Incorporation being restated except for the information permitted to be omitted by the provisions of the Texas Business Organizations Code applicable to the filing entity.  Each statement effected by these restated Articles of Incorporation and each amendment made by these restated Articles of Incorporation were adopted by the Board of Directors of the Corporation on July 20, 2012, and properly submitted for ratification by Written Consent of the Majority of the Shareholders of Acacia Automotive, Inc. in Lieu of a Special Meeting of Shareholders on July 26, 2012.

 

 

 


 

 

NOW THEREFORE, BE IT RESOLVED that these Articles of Incorporation, in their entirety, as now amended and restated as set forth below and having have been properly adopted by the Board of Directors of the Corporation on July 20, 2012, and duly ratified by Written Consent of the Majority of the Shareholders of Acacia Automotive, Inc. in Lieu of a Special Meeting of Shareholders on July 26, 2012, in accordance with and pursuant to the provisions of Sections 3.057, 3.059, 3.063, 21.053, 21.054, and 21.056 of the Texas Business Organizations Code and the governing documents of the Corporation, supersedes all prior amendments and modifications thereof and contains no other changes in any provisions.

 

ARTICLE ONE

 

The name of the Corporation is Acacia Diversified Holdings, Inc.

 

ARTICLE TWO

 

The period of its duration is perpetual.

 

ARTICLE THREE

 

The purpose or purposes for which the Corporation is organized are: The transaction of any and all lawful business for which corporations may be incorporated under the Texas Business Organizations Code.

 

ARTICLE FOUR

 

The Corporation shall be authorized to issue two classes of shares of stock to be designated, respectively, "Preferred Stock" and “Common Stock"; the total number of shares of stock which the Corporation shall have authority to issue is One hundred fifty two million (152,000,000); the total number of shares of Preferred Stock shall be Two Million (2,000,000) with a par value of One Tenth of a Cent ($0.001); the total number of shares of Common Stock shall be One Hundred Fifty Million (150,000,000) with a par value of One Tenth of a Cent ($0.001).

 

Shares of Preferred Stock may be issued from time to time in one or more series.  The Board of Directors is hereby authorized to fix the voting rights, designations, powers, preferences, and the relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, of any wholly unissued series of Preferred Stock; and to fix the number of shares constituting such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding.

 

 

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ARTICLE FIVE

 

The Corporation will not commence business until it has received for the issuance of its shares the value of $1,000.00.

 

ARTICLE SIX

 

The address of the Corporation’s registered office is:

 

1303 Columbia Dr. - Suite 209

Garland, Texas 75081

 

The registered agent at such address is Danny R. Gibbs.

 

ARTICLE SEVEN

 

The number of initial directors is two and the name and address of the directors are:

 

NAME ADDRESS
   
PROTER CLICK 612 Mount Vernon
  Garland, Texas 75043
   
HAZEL T. ECKEBERGER 909 E. Centerville
  Garland, Texas 75041

 

ARTICLE EIGHT

 

The name and address of the incorporator is:

 

NAME ADDRESS
   
W.D. BALLARD 207 Century Bank Bldg.
  1111 N. Beltline
  Garland, TX 75040

 

 

 


 

 

ARTICLE NINE

 

The Board of Directors may issue shares of any class of stock of the Corporation, or any notes, debentures, bonds, or other securities convertible into or carrying rights, options, or warrants to purchase shares of any class. No shareholder of the Corporation shall by reasons of his holding shares of any class of stock of the Corporation have any pre-emptive or preferential rights to purchase or subscribe to any shares of any class of the Corporation now or hereafter to be authorized, or to any notes, debentures, bonds or other subscriptions convertible into or carrying rights, options or warrants to purchase shares of any class, now or hereafter to be authorized whether or not the issuance of any such shares, notes, debentures, bonds or other securities would adversely affect the dividend rights of such shareholder. The Board of Directors, however, may in its discretion, and at such price as it may fix, grant such rights to shareholders of the Corporation.

 

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ARTICLE TEN

 

In all the elections for directors, each shareholder shall have the right to vote, in person or by proxy, the number of shares owned by him, for as many persons as there are directors to be elected, and for whose election he has the right to vote. It is expressly prohibited for any shareholder to cumulate his votes in any election of directors.

 

Each outstanding share, regardless of class, shall be entitled to the number of votes attached to that share by the relative voting rights and preferences attached thereto, on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by these Articles of Incorporation.

 

ARTICLE ELEVEN

 

 

Any action required by the Texas Business Organizations Code to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which each shareholder entitled to vote on the action is present and votes, sign a written consent or consents stating the action taken.

 

With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code. Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Unless otherwise restricted by these Articles of Incorporation, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Board of Directors. Such consent shall have the Written Consent By the Majority of the Shareholders of Acacia Diversified Holdings, Inc. same force and effect as a unanimous vote at a meeting. Any such signed consent, or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

ARTICLE TWELVE

 

These Articles may be altered, amended, or repealed or new Articles may be adopted by the shareholders by the affirmative vote of a majority of the shares of Capital Stock of the Corporation entitled to vote thereon.  Each outstanding share, regardless of class, shall be entitled to the number of votes attached to that share by the relative voting rights and preferences attached thereto, on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by these Articles of Incorporation.

 

At any meeting of the shareholders, every shareholder having the right to vote may vote either in person or by proxy executed in writing by the shareholder or his duly authorized attorney-in-fact.  No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless otherwise made irrevocable by law.

 

The shareholders of this Corporation may (i) adopt a plan of merger or consolidation and/or (ii) authorize a sale, lease, exchange or other disposition of all or substantially all of the property and assets of the Corporation by the affirmative vote of a majority of the shares of Capital Stock of the Corporation entitled to vote thereon.

 

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ARTICLE THIRTEEN

 

Permissive Indemnification. The Corporation shall, to the maximum extent permitted by the Texas Business Organizations Code (or any other applicable law, rule or regulation), indemnify and hold harmless each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer of the Corporation, was acting at the direction of and on behalf of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding.

 

Pursuant to the aforegoing, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for actions specified in accordance with Article 8.102 of the Texas Business Organizations Code as the same exists hereafter may be amended, or (iv) for any transaction from which the director derived an improper personal benefit.  Any repeal or modification of this paragraph by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

 

 

 

 

Mandatory Indemnification.  The Corporation shall indemnify an officer or director, former officer or director, or other person acting at the direction of and on behalf of the Corporation against reasonable expenses actually incurred by the person in connection with a proceeding in which the person is a respondent because the person is or was an officer or director or other specified agent of the Corporation (a) if the person is wholly successful, on the merits or otherwise, in the defense of the proceeding; or, (b) a court that determines, in a suit for indemnification,  that an officer or director, former officer or director, or other person acting at the direction of and on behalf of the Corporation is  entitled to indemnification under this section shall order  indemnification and award to the person the expenses incurred in  securing the indemnification.

 

Subject to the aforegoing, expenses incurred by any such person in defending a civil or criminal action, suit or proceeding, subject to the terms and conditions of this ARTICLE THIRTEEN, shall be paid by the Corporation on an ongoing basis as billed in advance of the final disposition of such action, suit or proceeding, to the maximum extent permitted by law.  Notwithstanding any subsequent alteration, amendment or repeal of this ARTICLE THIRTEEN, the rights to indemnification and to payments created by this ARTICLE THIRTEEN shall apply to (a) any claims made or asserted at any time while this ARTICLE THIRTEEN is in effect and (b) any claims based on or arising from any act, omission or event occurring at any time while this ARTICLE THIRTEEN is in effect

 

The Corporation may, at the discretion of the Board of Directors, purchase and maintain insurance, at its expense, and to indemnify any person against any judgment, fine, amount paid in settlement or other liability, if the Corporation would have the power to so indemnify such person under the Texas Business Organizations Code.

 

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WHEREAS this document and these Amended and Restated Articles of Incorporation become effective when the document is filed by the Texas Secretary of State.

 

  NOW THEREFORE, BE IT RESOLVED that the Corporation’s Secretary or other officer is hereby instructed to properly file these Amended and Restated Articles of Incorporation with the Texas Secretary of State at the earliest possible date to make them effective.

 

 

6


 

 

The undersigned (i) affirms that the person designated as the new Registered Agent for the Corporation in these Restated Articles of Incorporation has consented to the appointment in writing; (ii) affirms that he is authorized under the provisions of law governing the entity to execute the filing instrument; (iii) signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument and certifies it under penalty of perjury; and, (iv) affirms that the foregoing amendments to and restatement of the Corporation’s Articles of Incorporation were duly adopted by the Corporation’s Board of Directors on July 20, 2012, and were ratified on July 26, 2012, by Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders on

 

Date:  June 9, 2015

 

ACACIA DIVERSIFIED HOLDINGS, INC.

 

 

 

By: /s/ Steven L. Sample                                 

       Steven L. Sample, President and CEO

 

 

Ex. 10.1

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “ Agreement ”), dated as of June 29, 2015, is entered into by and between Acacia Diversified Holdings, Inc., a Texas corporation (“ ADH ”), and its wholly-owned subsidiaries Citrus Extracts, Inc., a Florida corporation (“ CEI ”), and Acacia Transport Services, Inc., a Florida corporation (“ ATS ”); and Citrus Extracts II, LLC, a Florida limited liability company (“ CEL ”), and Citrus Extracts Transport Services, LLC (“ CETS ”). ADH, CEI and ATS are individually and collectively referred to herein as the “ Seller .” CEL and CETS are individually and collectively referred to herein as the “ Buyer .”

 

RECITALS

 

WHEREAS, ADH, by and through its subsidiary CEI is engaged in the business of acquiring and processing raw citrus peel into dehydrated citrus ingredient products (the “ CEI Business ”), and by and through its subsidiary ATS is engaged in the business of transporting raw citrus peel by truck (the “ ATS Business ”). For its part, ADH owns certain assets relating to the milling of dehydrated citrus ingredient products (the “ Milling Business, ” and collectively with the CEI Business and ATS Business, the “ Seller Businesses ”);

 

WHEREAS, the Seller, in pursuit of the Seller Businesses, holds good and valuable title to assets related to the Seller Businesses and has assumed certain liabilities in the normal course of the Seller Businesses;

 

WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, the rights and interests of Seller to the Purchased Assets and the Assumed Liabilities (as defined herein), subject to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Article I  

Purchase and Sale

 

Section 1.01         Purchase and Sale of Assets .

 

(a)                 Subject to the terms and conditions set forth herein, at the Closing Seller shall sell, assign, transfer, convey and deliver to the appropriate Buyer, and such Buyer shall purchase and acquire from Seller, free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (each being an “ Encumbrance ”), all of Seller’s right, title and interest in and to all of the assets, properties, and rights (including goodwill), wherever located, described below (collectively, the “ Purchased Assets ”):

(i)                  the assets set forth on Section 1.01 of the schedules attached to this Agreement (the “Disclosure Schedules”);

(ii)                all of Seller’s contracts and agreements relating to the Seller Businesses or the Purchased Assets, including the Assigned Contracts set forth on Section 3.07 of the Disclosure Schedule;

(iii)              all of Seller’s Permits (as defined below) relating to the Seller Businesses or the Purchased Assets, to the extent transferable or assignable to the Buyer, including the Assigned Permits set forth on Section 3.08 of the Disclosure Schedule;

(iv)              all prepaid expenses and deposits of Seller relating to the Purchased Assets or the Seller Businesses, subject to Section 5.09;

(v)                all inventory, raw materials, finished goods and work-in-progress relating to the Seller Businesses or the Purchased Assets;

(vi)              all data, records and information relating to the Purchased Assets or the Seller Businesses, including without limitation financial records and information and data relating to technical support or operations of the Seller Businesses;

(vii)            all technical information, data, customer lists, supplier lists, price lists, process technology, plans and drawings, and all other Intellectual Property (as defined below) relating to the Seller Businesses or the Purchased Assets, including without limitation Seller’s trade secrets relating to its Citrus Emulsion System and its Citrus Peel Processing System, but excluding any right to use the name “Acacia” or its trademarks, trade names, or logos using the name “Acacia”; and

(viii)          all claims under warranties, indemnities or other claims or rights against third parties relating to the Purchased Assets or the Seller Businesses, and all insurance benefits and proceeds arising out of the Purchased Assets or the Seller Businesses after the Closing.

(b)                CEL shall acquire at the Closing all of the Purchased Assets except for the following which shall be acquired by CETS (collectively, the “ CETS Assets ”): (a) the Purchased Assets specifically described on Section 1.01 of the Disclosure Schedule as being transferred to CETS, (b) the Assigned Contracts specifically designated as being acquired by CETS on Section 3.07 of the Disclosure Schedule (the “ CETS Contracts ”), and (c) the Assigned Permits specifically designated as being acquired by CETS on Section 3.08 of the Disclosure Schedule (the “ CETS Permits ”).

 

Section 1.02         Excluded Assets . Notwithstanding the foregoing, the Purchased Assets shall not include:

 

(a) Seller’s cash, cash equivalents, accounts and notes receivables;

 

(b) all minute books, stock and similar records, and company seals:

 

(c) all issued and outstanding shares of capital stock of Seller;

 

(d) all personnel records and other records that Seller is required by law to retain in its possession;

 

(e) all contracts that are not included in the Purchased Assets; and

 

(f) all insurance policies and rights thereunder; and,

 

(g) any other assets of Seller identified as excluded assets on Section 1.02 of the Disclosure Schedule or not otherwise described in Section 1.01 above (collectively, the “ Excluded Assets ”).

 

Section 1.03         Assumed Liabilities; Excluded Liabilities .

 

(a)                 As part of the consideration for the Purchased Assets, subject to the terms and conditions set forth herein, (a) CEL shall assume and agree to pay, perform and discharge only the liabilities and obligations arising after the Closing under the Assigned Contracts other than the CETS Contracts, but only to the extent that such liabilities and obligations do not relate to any breach, default or violation by Seller on or prior to the Closing (the “ CEL Assumed Liabilities ”) and (b) CETS shall assume and agree to pay, perform and discharge only the liabilities and obligations arising after the Closing under the CETS Contracts, but only to the extent that such liabilities and obligations do not relate to any breach, default or violation by Seller on or prior to the Closing (the “ CETS Assumed Liabilities ” and, collectively with the CEL Assumed Liabilities, the “ Assumed Liabilities ”).

(b)                Other than the Assumed Liabilities, Buyer shall not assume any liabilities or obligations of Seller or the Seller Businesses of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created. Seller shall, and shall cause each of its Affiliates to, pay and satisfy in due course all liabilities and obligations which they are obligated to pay and satisfy. All liabilities and obligations of the Seller other than the Assumed Liabilities are sometimes referred to as the “ Excluded Liabilities .”

 

Section 1.04         Purchase Price; Payments .

 

(a)                 Purchase Price . The purchase price for the Purchased Assets shall be Two Million Five Hundred Sixty Thousand Eight Hundred Fourteen Dollars and 22/100 ($2,560,814.22) (the “ Purchase Price ”), plus the assumption of the Assumed Liabilities.

 

(b)                Payments at Closing . At the Closing, Buyer shall pay an amount equal to the Purchase Price, by wire transfer of immediately available funds to accounts and in accordance with wire transfer instructions specified in writing before Closing, as follows:

 

(i)                  the amounts to the Sellers’ creditors and other holders of Seller’s trade payable obligations, as set forth in the lender’s payoff letters and related information delivered to Buyer or the trade payables list set forth on Section 1.04 of the Disclosure Schedule;

(ii)                any amounts to the persons set forth on Section 1.04 of the Disclosure Schedule in consideration of his or her execution of the Non-Competition Agreements;

(iii)              the remainder to ADH as sole shareholder of CEI and ATS in accordance with the wire transfer instructions set forth in Section 1.04 of the Disclosure Schedules.

Section 1.05         Allocation of Purchase Price and Assets . Seller and Buyer agree to allocate the Purchase Price among the Purchased Assets for all purposes (including tax and financial accounting) in accordance with the Section 1.05 of the Disclosure Schedules. Buyer and Seller shall file all tax returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.

 

Article II
Closing

 

Section 2.01         Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place simultaneously with the execution of this Agreement on the date of this Agreement (the “ Closing Date ”) at the offices of the BrownWinick Law Firm, 666 Grand Avenue, Suite 2000, Des Moines, IA 50309. The consummation of the transactions contemplated by this Agreement shall be deemed to occur at 12:01 a.m. on the Closing Date.

 

Section 2.02         Closing Deliverables .

 

(a) At the Closing, Seller shall deliver to Buyer the following:

 

(i)                  a bill of sale in form and substance satisfactory to Buyer, duly executed by Seller, transferring the Purchased Assets (other than the CETS Assets) to CEL (the “ CEL Bill of Sale ”);

 

(ii)                a bill of sale in form and substance satisfactory to Buyer, duly executed by Seller, transferring the CETS Purchased Assets to CETS (the “ CETS Bill of Sale ”);

 

(iii)              an assignment for each of the Purchased Assets which are intangible assets (“ Intangible Asset Assignment ”);

 

(iv)              executed consents for any Assigned Contracts for which a consent is required by the terms of such Assigned Contract, including without limitation those set forth on Section 3.02 of the Disclosure schedule (the “ Contract Consents ”);

 

(v)                an assignment and assumption agreement in form and substance satisfactory to Buyer, duly executed by the Seller, effecting the assignment to and assumption by CEL of the Assigned Contracts (other than the CETS Contracts), the Assigned Permits (other than the CETS Permits), to the extent such permits are assignable, and the CEL Assumed Liabilities (the “ CEL Assignment and Assumption Agreement ”);

 

(vi)              an assignment and assumption agreement in form and substance satisfactory to Buyer, duly executed by the Seller, effecting the assignment to and assumption by CETS of the CETS Contracts, CETS Permits to the extent such permits are assignable, and the CETS Assumed Liabilities (the “ CETS Assignment and Assumption Agreement ”);

 

(vii)            Seller’s affidavit that it owes no taxes in any jurisdiction in which it is obligated to file tax returns or reports or pay taxes, and that there is no obligation of Seller that could serve to cause an Encumbrance or an attachment to the Purchased Assets.

 

(viii)          a certificate of the Secretary (or equivalent officer) of each Seller certifying as to (A) the resolutions of the board of directors of such entity, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby, and (B) the names and signatures of the officers of such entity authorized to sign this Agreement and the documents to be delivered hereunder;

 

(ix)              a non-competition and non-solicitation agreement in form and substance satisfactory to Buyer, executed by each of Steven L. Sample, Edward W. Sample, William A. Sample, Clarence Shivers, and William J. Howe in favor of Buyer (collectively, the “ Non-Competition Agreements ”);

 

(x)                an employment agreement in form and substance satisfactory to Buyer, executed by each of William J. Howe and Clarence Shivers (the " Employment Agreements ");

 

(xi)              Payoff letters for any secured creditors and/or other reasonable documentation detailing indebtedness of Seller for purposes of identifying the obligations of Seller to be extinguished from proceeds of the sale as set forth in Section 1.04;

 

(xii)            all certificates of title relating to any of the Purchased Assets, duly endorsed for transfer as necessary to vest title in the appropriate Buyer;

(xiii)          all Required Consents, in form and substance satisfactory to Buyer;

(xiv)          such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

 

(b)                At the Closing, Buyer shall deliver to Seller the following:

 

(i)                  The payments referenced in Section 1.04(b);

 

(ii)                the CEL Assignment and Assumption Agreement and CETS Assignment and Assumption Agreement duly executed by Buyer;

 

(iii)              the Employment Agreements duly executed by Buyer;

 

(iv)              the Non-Competition Agreements duly executed by Buyer;

 

(v)                the Assignments and Assumptions of Leases duly executed by Buyer;

 

(vi)              a certificate of the Secretary (or equivalent officer) of each Buyer certifying as to (A) the resolutions of the managers of such entity, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby, and (B) the names and signatures of the managers or officers of Buyer authorized to sign this Agreement and the documents to be delivered hereunder.

 

Article III
Representations and warranties of seller

 

Each Seller jointly and severally represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof. For purposes of this Article III, “Seller’s knowledge,” “knowledge of Seller” and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Seller, after due inquiry.

 

Section 3.01         Organization and Authority of Seller; Enforceability . ADH is a corporation duly organized, validly existing and in good standing under the laws of the state of Texas. CEI and ATS are corporations duly organized, validly existing and in good standing under the laws of the state of Florida. Seller has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Seller and its shareholders. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

 

Section 3.02         No Conflicts; Consents . The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, articles of incorporations, bylaws or other organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets are subject; or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. Except as set forth on Section 3.02 of the Disclosure Schedule, no consent, approval, waiver or authorization is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby (the “ Required Consents ”).

 

Section 3.03         Title to Purchased Assets . Seller owns and has good and transferable title to the Purchased Assets, free and clear of Encumbrances, except for those Encumbrances set forth on Section 3.03 of the Disclosure Schedule to be released at Closing upon payoff of the amounts and pursuant to payoff letters referenced in Section 1.04(b)(i). No party other than Seller has any right, title or interest in or to any of the Purchased Assets.

 

Section 3.04         Condition of Assets . Subject to the terms of this Agreement, all tangible Purchased Assets and items are sold and conveyed by Seller “as is-where is”, without any warranty as to fitness or condition, either expressed or implied, and Seller makes no representation as to the fitness or condition of any asset or item for a particular purpose.

 

Section 3.05         Inventory . To the best of Seller’s knowledge, all inventory, finished goods, raw materials, work in progress, packaging, supplies, parts and other inventories included in the Purchased Assets consist of a quality and quantity usable and salable in the ordinary course of business as of the Closing.

 

Section 3.06         Intellectual Property .

 

(a)                 Intellectual Property ” means any and all of the following as may be now or previously owned, used or licensed by Seller and used in any of the Seller Businesses, in any jurisdiction throughout the world: (i) its trademarks and service marks, including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing, and the name of and right to use “Citrus Extracts”; (ii) copyrights, including all applications and registrations related to the foregoing; (iii) its patents and patent applications; (iv) its websites and internet domain name registrations; (v) all its trade secrets, know how, confidential or proprietary information related to its Emulsion System and CitraBlend products, customer and supplier lists, software (excluding the QuickBooks Enterprise software and any other software licensed directly to ADH (the “ ADH Licensed Software ”)), technical information, processes, designs, plans and other proprietary and confidential information used in a Seller Business; (vi) all computer software, programs and databases in any form insofar as they can be transferred, and excluding the QuickBooks Enterprise software and any other software licensed directly to ADH; and (vii) other intellectual property and related proprietary rights, interests and protections (including all rights to sue and recover and retain damages, costs and attorneys’ fees for past, present and future infringement and any other rights relating to any of the foregoing).

 

(b)                Section 3.06(b) of the Disclosure Schedules lists all material Intellectual Property included in the Purchased Assets. The Purchased Assets include all Intellectual Property relating to the Seller Businesses (other than the right to use the name “Acacia” and the ADH Licensed Software). Seller owns or has adequate, valid and enforceable rights to use all the Intellectual Property, free and clear of all Encumbrances. Seller is not bound by any outstanding judgment, injunction, order or decree restricting the use of the Intellectual Property, or restricting the licensing thereof to any person or entity.

 

(c)                 Seller’s prior and current use of the Intellectual Property has not and does not infringe, violate, dilute or misappropriate the intellectual property or proprietary rights of any person or entity and there are no claims pending or threatened by any person or entity with respect to the ownership, validity, enforceability, effectiveness or use of the Intellectual Property. To the knowledge of Seller, no person or entity is infringing, misappropriating, diluting or otherwise violating any of the Intellectual Property, and neither Seller nor any affiliate of Seller has made or asserted any claim, demand or notice against any person or entity alleging any such infringement, misappropriation, dilution or other violation.

 

Section 3.07         Assigned Contracts . Section 3.07 of the Disclosure Schedules includes each contract, agreement included in the Purchased Assets and being assigned to and assumed by Buyer (the “ Assigned Contracts ”). The Assigned Contracts constitute all of the contracts, agreements and understandings, whether written or oral, which are necessary for or useful to permit the Buyer to conduct the Seller Businesses as conducted by Seller immediately before Closing. Each Assigned Contract is valid and binding on the parties thereto in accordance with its terms and is in full force and effect. None of Seller or, to Seller’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Assigned Contract. No event or circumstance has occurred that, with or without notice or lapse of time or both, would constitute an event of default under any Assigned Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of benefit thereunder. Complete and correct copies of each Assigned Contract have been delivered to Buyer. Each Assigned Contract is assignable to Buyer without the consent of or notice to any other person, except as set forth on Section 3.02 of the Disclosure Schedule. There are no disputes pending or threatened under any Assigned Contract.

 

Section 3.08         Permits . Section 3.08 of the Disclosure Schedules lists all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained from governmental authorities (“ Permits ”) held by a Seller and relating to the Seller Businesses or the Purchased Assets, all of which are included in the Purchased Assets to the extent they are assignable or transferable (collectively, the “ Assigned Permits ”). The Assigned Permits constitute all of the Permits, if transferrable, which are necessary for or useful to permit Buyer to lawfully conduct the Seller Businesses as conducted by the Seller immediately before Closing and own and use the Purchased Assets in the manner owned and used by the Seller immediately before Closing. The Assigned Permits are valid and in full force and effect for Seller. The Assigned Permits are, and have been, in compliance with the applicable terms and requirements of such Permits. All fees and charges with respect to such Assigned Permits as of the date hereof have been paid in full. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Assigned Permit.

 

Section 3.09         Compliance With Laws . Seller has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable to ownership and use of the Purchased Assets and the operation of the Seller Businesses. No event has occurred or circumstance exists that (with or without notice or passage of time or both) may constitute or result in a failure to comply with any such applicable federal, state and local law or regulation.

 

Section 3.10         Financial Statements . Seller has delivered to Buyer the consolidated audited income statements and balance sheets of ADH and its subsidiaries and supporting documentation as provided by Seller’s public auditors as of and for the years ended December 31, 2014 and 2013. Such financial statements fairly present the financial condition and results of operations of Seller as of the respective dates thereof for the periods referred to in such financial statements, in accordance with GAAP. Seller has no liability or obligation, except as reflected or reserved against in the most recent balance sheets for Seller referenced in this Section 3.10 or for immaterial liabilities incurred in the ordinary course of business after the date of such balance sheet.

 

Section 3.11         Material Adverse Effect . Since January 1, 2015, there has not been any material adverse change in the business, operations, assets, results of operations or condition (financial or other) of CEI or ATS or the prospects of either and, to Seller’s knowledge, no event has occurred or circumstance exists that may reasonably be expected to result in such a material adverse change.

 

Section 3.12         Other Shared Information . For purposes of this Section, “ Shared Information ” refers to projections and confidential information shared by William J. Howe to Buyer, independent of and without authorization by Seller or Steven L. Sample, relating to the past and present operations, production, product and service sales, clientele matters, and all other factors related to CEI and ATS and Buyer’s potential acquisition from Seller of the Purchased Assets. Seller does not make any representation or warranty to Buyer regarding the accuracy of the Shared Information that was created on William J. Howe’s (“ Howe ”) own time and by Howe’s own efforts, which Shared Information contains various projections, scenarios, plans, descriptions, depictions, representations and forward-looking statements, all of which were prepared and presented to Buyer by Howe in their entirety without the prior review and/or approval of Seller, who takes no responsibility for the content thereof. Nothing contained in this Section 3.12 shall limit Seller’s representations and warranties set forth in this Agreement (including the Disclosure Schedules hereto) or restrict Buyer’s right to rely on the due diligence information provided to Buyer by Seller, including the financial reports and related information provided to Buyer directly by Seller for which Seller takes full responsibility.

 

Section 3.13         Legal Proceedings . There is no claim, action, suit, proceeding or governmental investigation (“ Action ”) of any nature pending or, to Seller’s knowledge, threatened against or by Seller (a) relating to or affecting the Purchased Assets, the Assumed Liabilities or any Seller Business; or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement or any document to be delivered hereunder. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

Section 3.14         Sufficiency of Assets . The Purchased Assets constitute all of the assets and properties, tangible and intangible, real or personal, of any nature whatsoever, necessary to operate each of the Seller Businesses in substantially the same manner the Seller Businesses were conducted by Seller immediately prior to Closing.

 

Section 3.15         Taxes . Seller has filed or caused to be field on a timely basis all tax returns and reports relating to taxes that are or were required to be filed pursuant to federal, state and local laws and regulations. All tax returns and reports field by Seller are true, correct and complete and were prepared in compliance with federal, state and local laws and regulations. There is no dispute or claim concerning any taxes of Seller either claimed or raised by any governmental authority in writing or as to which Seller has knowledge. There are no proposed tax assessment or deficiency against Seller except as disclosed on the balance sheet referenced in Section 3.11(a).

 

Section 3.16         Employee Benefits . Seller’s Plans, if any, have been operated and administered in accordance with their respective terms and with applicable laws, including, without limitation, all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended and the Internal Revenue Code of 1986, as amended and the respective rules and regulations thereunder. The term “Plan” means all severance pay, vacation, sick leave, medical, dental, life insurance, disability or other welfare plans, savings, profit sharing or other retirement plans and all bonus or other incentive plans, contracts, arrangements or practices maintained or contributed to by the Seller and in which any one or more of the current or former employees of the Seller is eligible to participate or has participated. There are no pending or, to Seller’s knowledge, threatened, claims by or on behalf of any of the Plans, by any employee or beneficiary covered under such Plan, or otherwise involving any such Plan (other than routine claims for benefits), and all contributions required to be made under the terms of any Plan have been made.

 

Section 3.17         Brokers . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any Seller.

 

Section 3.18         Full Disclosure . No representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

Article IV
Representations and warranties of buyer

 

Each Buyer jointly and severally represents and warrants to Seller that the statements contained in this Article IV are true and correct as of the date hereof. For purposes of this Article IV, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases shall mean the actual or constructive knowledge of any manager or officer of Buyer, after due inquiry.

 

Section 4.01         Organization and Authority of Buyer; Enforceability . CEL and CETS are limited liability companies duly organized, validly existing and in good standing under the laws of the state of Florida. Buyer has full limited liability company power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite company action on the part of Buyer. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

 

Section 4.02         No Conflicts; Consents . The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 4.03         Legal Proceedings . There is no Action of any nature pending or, to Buyer’s knowledge, threatened against or by Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

Section 4.04         Brokers . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

 

Section 4.05         Access . Buyer acknowledges that it has been provided access by the Seller to the properties and assets of the Seller and the opportunity to communicate with Seller’s auditors for the purpose of conducting an investigation and review of the Purchased Assets.

 

 

Article V
Covenants

 

Section 5.01         Public Announcements . Unless otherwise required by applicable law, no party shall make any public announcements regarding this Agreement or the transactions contemplated hereby without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), except to the extent required by applicable federal securities laws and regulations.

 

Section 5.02         Bulk Sales Laws . The Parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer; provided, however , that Seller agrees (a) to pay and discharge when due or to contest or litigate all claims of creditors which are asserted against Buyer or the Purchased Assets by reason of such noncompliance; (b) to indemnify, defend and hold harmless Buyer from and against any and all such claims in the manner provided in Article VI; and (c) to take promptly all necessary action to remove any Encumbrance which is placed on the Purchased Assets by reason of such noncompliance.

 

Section 5.03         Transfer Taxes; Taxes for Pre-Closing Periods . All transfer, documentary, sales, use, stamp, registration, value added and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the documents to be delivered hereunder shall be borne and paid by Buyer when due. Buyer shall, at its own expense, timely file any tax return or other document with respect to such taxes or fees (and Seller shall cooperate with respect thereto as necessary). Further, Seller shall be liable for and shall pay any and all taxes and fees of Seller or any Affiliate of Seller relating to the ownership, use or operation of the Seller Businesses, the Purchased Assets and the Assumed Liabilities for any period on or before the Closing Date.

 

Section 5.04         Further Assurances . Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder.

Section 5.05         Employees and Employee Benefits . Commencing on the Closing Date, Seller shall terminate all employees who are actively employed by CEI or ATS on the Closing Date, and, at Buyer’s sole discretion, Buyer may offer employment to any or all of such employees on terms determined by Buyer. Seller shall be solely responsible, and Buyer shall have no obligations whatsoever for, any compensation, benefits or other amounts payable to any current or former employee, officer, director, independent contractor or consultant of Seller, including, without limitation, hourly pay, commission, bonus, salary, accrued vacation, fringe, pension, welfare benefits, or profit sharing benefits or severance pay for any period relating to the service with Seller at any time on or prior to the Closing Date and Seller shall pay all such amounts to all entitled persons on or prior to the Closing Date.

Section 5.06         Restrictive Covenants .

(a)                 Noncompetition . For a period of five (5) years after the Closing Date (the “ Non-Compete Period ”), no Seller nor any of any Affiliate of a Seller, shall, anywhere in the United States (the “ Restricted Territory ”), directly or indirectly invest in, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any person or entity engaged in or planning to become engaged in any of the Seller Businesses or any business competitive with any of the Seller Businesses. An “Affiliate” of a person shall mean any of its directors, officers, partners or managers (or similar capacity), any beneficial owner of 20% or more of the outstanding equity of such person, or any other person who, directly or indirectly, controls or is under common control with such a person. William J. Howe’s or Clarence Shivers’ performance of duties in accordance with the Employment Agreements shall not be deemed a violation of this provision.

(b)                Nonsolicitation . During the Non-Compete Period, no Seller nor any Affiliate of a Seller, shall, directly or indirectly:

(i)                  solicit the business of any person or entity who is a customer or potential customer of a Buyer for the products or services then sold by Buyer in any manner that could be likely to result in such person or entity curtailing or canceling any business or contracts that such person or entity has with a Buyer, or in any way interfere with the relationship between a Buyer and such person or entity;

(ii)                cause, induce or attempt to cause or induce any actual or potential customer, supplier, licensee, licensor, distributor, employee, consultant or other business relation of a Buyer to cease doing business with a Buyer, to deal with any competitor of a Buyer, or in any way interfere with its relationship with such Buyer; or

(iii)              hire, employ, engage, retain or attempt to hire, employ, engage or retain any employee or independent contractor of a Buyer or in any way interfere with the relationship between Buyer and any of its employees or independent contractors.

(c)                 Confidentiality and Nondisparagement . No Seller nor any Affiliate of a Seller will, directly or indirectly (including through advisors and brokers), (i) disparage another party to this Agreement or any of such other party’s members, managers, officers, employees or agents, (ii) disclose to any person or entity any confidential, proprietary or non-public information concerning the Buyer, the Seller Businesses, the Purchased Assets, the transactions contemplated in this Agreement, or the terms of this Agreement or any related documents (“ Confidential Information ”), for any reason or purpose whatsoever, except as permitted under this Agreement, or (iii) use any of such Confidential Information for such Seller or Affiliate’s own purpose or for the benefit of any person or entity.

(d) Modification of Covenant . If a final judgment of a court or tribunal of competent jurisdiction determines that any term or provision contained in Section 5.06(a) through (c) is invalid or unenforceable, then the parties agree that the court or tribunal will have the power to reduce the scope, duration or geographic area of the term or provision, to delete specific words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision. This Section 5.06 will be enforceable as so modified after the expiration of the time within which the judgment may be appealed. This Section 5.06 is reasonable and necessary to protect and preserve Buyer’s legitimate business interests and the value of the Purchased Assets and to prevent any unfair advantage conferred on Sellers or their Affiliates.

 

5.07 Name Change . Seller shall within ten (10) days following the Closing, execute and file appropriate documents with the State of Florida to change the name of Citrus Extracts, Inc. to “CEI Liquidation, Inc.” or such other name that does not utilize “Citrus Extracts” or any confusingly similar name.

 

5.08 Cooperation Regarding Permits and Authorizations . Seller shall provide Buyer with all commercially-reasonable assistance and documentation required to give effect to the transfer to CEL and CETS of all permits, certificates and certifications, licenses and other authorities related to the Seller Businesses, including the Assigned Permits, as set forth in Section 3.08 of the Disclosure Schedule to the extent they are transferrable to Buyer.

 

5.09 Expenses . Seller and Buyer agree that: (a) Seller shall be responsible for payment of all costs and expenses in connection with the Purchased Assets incurred before the Closing Date, and (b) Buyer shall be responsible for payment of all costs and expenses incurred by Buyer in connection with the Purchased Assets on or after the Closing Date. To the extent there are certain Straddle Period Expenses (as defined below) relating to the Purchased Assets incurred by Seller and payable for a period which commenced prior to but ends after the date of Closing (the “ Straddle Period ”), then the Straddle Period Expenses will be shared as follows:

 

(i) Seller will be responsible for its Pro Rata Percentage of such Straddle Period Expenses incurred through the date immediately prior to the date of Closing; and

 

(ii) Buyer will be responsible for its Pro Rata Percentage of such Straddle Period Expenses incurred on and after the date of Closing.

 

A party’s respective “ Pro Rata Percentage ” shall be determined by dividing the number of days in the applicable Straddle Period during which it owned the Purchased Assets (with Buyer being deemed the owner of the Purchased Assets on the date of Closing) by the total number of days within the Straddle Period, or in any other manner which the parties mutually agree.

 

The “ Straddle Period Expenses ” shall mean expenses relating to natural gas, electric and other utilities and other costs which the parties mutually agree should be shared among the parties in the manner provided herein. The parties agree to cooperate in good faith to ensure that the Straddle Period Expenses are shared in a manner that is reflective of the time period during which each party was the owner of the Purchased Assets to which the Straddle Period Expenses relate.

 

The party billed for or who otherwise initially incurred the obligation to pay the Straddle Period Expenses shall timely pay such expenses in full, and the other party’s Pro Rata Percentage, if any, of such expenses shall be offset against the FPUA Deposit as contemplated in this Section 5.09 below.

 

Seller acknowledges and agrees that it will have no authority to incur any expenses, costs or fees on behalf of Buyer from and after the date of Closing and that if any such expenses, costs or fees are incurred contrary to this sentence, Buyer will have no obligation to pay any portion thereof.

 

Similarly, Buyer acknowledges and agrees that it will have no authority to incur any expenses, costs or fees on behalf of Seller from and after the date of Closing and that if any such expenses, costs or fees are incurred contrary to this sentence, Seller will have no obligation to pay any portion thereof.

 

Notwithstanding anything herein to the contrary, the parties agree that the total amount of the Straddle Period Expenses which Buyer is responsible for hereunder shall be offset against the total amount of the Seller’s deposit with the Fort Pierce Utility Authority, including any deposit held in the name of Red Phoenix Extracts, Inc. for Seller’s benefit (“FPUA Deposit”) (which is a Purchased Asset that Seller shall be entitled to hold post-Closing for the account of Buyer until settlement as provided herein), and upon settlement of such amounts Seller shall thereafter promptly pay over and deliver to Buyer the difference between the FPUA Deposit and such expenses of Buyer.

 

5.10 Non-Assignable Permits; Permit Fees . To the extent that any Permits are not assignable to Buyer by applicable law, regulation or rule, as further disclosed on Schedule 3.08, Buyer acknowledges and agrees that it will be responsible for applying for such Permits in its own name, provided that Seller will cooperate with Buyer to facilitate such process.

 

Article VI
Indemnification

 

Section 6.01         Survival . All representations, warranties, covenants and agreements contained herein and all related rights to indemnification shall survive the Closing.

 

Section 6.02         Indemnification By Seller . Seller shall defend, indemnify and hold harmless Buyer, its affiliates and their respective stockholders, members, managers, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including attorneys’ fees and disbursements, arising from or relating to:

 

(a)                 any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or any document to be delivered hereunder;

 

(b)                any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any document to be delivered hereunder;

 

(c)                 any claim, liability or obligation based upon or arising out of the ownership or operation of the Seller Businesses or the Purchased Assets or any other liability or obligation of Seller, in any case existing or arising on or prior to the date of Closing (other than the Assumed Liabilities);

 

(d)                any claim, liability or obligation relating to or arising out of any Encumbrance or claimed Encumbrance by Florida Community State Bank or any other lienholder of Red Phoenix Extracts Inc. on any of the Purchased Assets;

 

(e)                 any Excluded Asset or Excluded Liability.

 

Section 6.03         Indemnification by Buyer . Buyer shall defend, indemnify and hold harmless Seller, its affiliates and their respective stockholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including attorneys’ fees and disbursements, arising from or relating to:

 

(a)                 any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or any document to be delivered hereunder;

 

(b)                any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement or any document to be delivered hereunder; or

 

(c)                 any Assumed Liability.

 

Section 6.04         Claims; Assumption of Defense . As soon as is reasonably practicable after becoming aware of a claim for indemnification under this Agreement (including a claim or suit by a third party), the Indemnified Party shall promptly give written notice to the Indemnifying Party of such claim, which notice shall specify in reasonable detail the facts relating to the claim. The Indemnifying Party may, at its own expense,

 

(a)                 participate in the defense of any claim, suit, action or proceeding; and,

(b)                upon notice to the Indemnified Party at any time during the course of any such claim, suit, action or proceeding, assume the defense thereof, including selecting counsel for the matter; provided, however, that counsel selected by the Indemnifying Party is reasonably satisfactory to the Indemnified Party. By the Indemnifying Party’s assumption of such defense, the applicable claim, suit or proceeding will be conclusively established as being within the scope of the Indemnifying Party’s indemnification obligations to the Indemnified Party under Section 6.02 or 6.03, as applicable. If the Indemnifying Party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party. Counsel selected by the Indemnifying Party shall have the lead role in any subsequent litigation. Whether or not the Indemnifying Party chooses to assume the defense of any such claim, suit, action or proceeding, all of the Parties hereto shall cooperate in the defense or prosecution thereof.

(c)                 For purposes of this Section 6.04, the term “ Indemnified Party ” shall mean any person entitled to indemnification under the terms of this Agreement, and the term “ Indemnifying Party ” shall mean any person from whom an Indemnified Party is entitled to seek indemnification under the terms of this Agreement.

 

Section 6.05         Tax Treatment of Indemnification Payments . All indemnification payments made by Seller under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.

 

Section 6.06         Effect of Investigation . Either party’s right to indemnification or other remedy based on the representations, warranties, covenants and agreements of the other as contained herein will not be affected by any investigation conducted by that party with respect to, or any knowledge acquired by the party at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or agreement.

 

Section 6.07         Cumulative Remedies . The rights and remedies provided in this Article VI are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

 

Article VII
Miscellaneous

 

Section 7.01         Expenses . All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

 

Section 7.02         Notices . All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.02):

 

If to Seller:

Acacia Diversified Holdings, Inc.

Facsimile: (877) 513-6295

E-mail: steve.sample@acacia.bz

Attention: Steven L. Sample, CEO

 

If to Buyer CEL:

Citrus Extracts, LLC

Facsimile: (515) 253-0942

E-mail: akoch@WEBILD.com

Attention: Al Koch, Co-Manager

 

 

If to Buyer CETS: Citrus Extracts Transport Services, LLC

Facsimile: (515) 253-0942

E-mail: akoch@WEBILD.com

Attention: Al Koch, Co-Manager

 

Section 7.03         Headings . The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

Section 7.04         Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

Section 7.05         Entire Agreement . This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter, including any letter of intent. In the event of any inconsistency between the statements in the body of this Agreement and the documents to be delivered hereunder, the Disclosure Schedule (other than an exception expressly set forth as such in the Disclosure Schedules) and any other exhibit or attachment hereto, the statements in the body of this Agreement will control. The recitals to this Agreement are incorporated by this reference.

 

Section 7.06         Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

 

Section 7.07         No Third-party Beneficiaries . Except as provided in Article VI, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 7.08         Amendment and Modification . This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

 

Section 7.09         Waiver . No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 7.10         Governing Law . This Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction).

 

Section 7.11         Submission to Jurisdiction . Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of Florida in each case located in the city of Orlando and county of Orange and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

 

Section 7.12         Waiver of Jury Trial . Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 7.13         Specific Performance . The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

 

Section 7.14         Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

[SIGNATURE PAGE TO FOLLOW]

 
 

SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT

 

 

Acacia Diversified Holdings, Inc.

 

 

By__ /s/ Steven L. Sample ___

Name: Steven L. Sample

Title: Chief Executive Officer

 

 

Citrus Extracts, Inc.

 

 

By__ /s/ Steven L. Sample ___

Name: Steven L. Sample

Title: Chief Executive Officer

 

 

Acacia Transport Services, Inc.

 

 

By__ /s/ Steven L. Sample ___

Name: Steven L. Sample

Title: Chief Executive Officer

 

 

Citrus Extracts II, LLC

 

 

By__ /s/ Alan Koch ________

Name: Alan Koch

Title: Co-Manager

 

 

Citrus Extracts Transport Services, LLC

 

By: Citrus Extracts II, LLC, its Managing Member

 

 

By:__ /s/ Alan Koch ______

Name: Alan Koch

Title: Co-Manager

   

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

[ Signature Page to Asset Purchase Agreement]
SCHEDULE 1.01

PURCHASED ASSETS

 

Assets to be Conveyed from CEI and ADH to CEL

 

Item Qty. Description or Notes
 
     
     
Reactor Tanks 750 Gallon Capacity 2 Portable. 750 gallon capacity each.
Fruit Bins 25 46" X 46" X 28" - Subject to variation in Qty
Agitator 1 Lightnin, single impeller Prox 5 HP
Assorted Break Room Items 1 Refirgerator, chect freezer, furniture Bldg. 12-E
Assorted Lab Equipment 1 Blender, mill, Tyler sieve shaker, vacuum sealers, etc.
Assorted Machinery & Equipment - 1 1 3 Portable pressure washers, 2 hyd. Pallet jacks, alum dock plate, extra propane tanks
Assorted Machinery & Equipment - 2 1 S/s hoppers, conveyors, motors, pumps, hoses, etc.
Assorted Office Items 1 Office desks, chairs, furniture in 12-E
Inclined Auger Conveyor 1 9" Diameter, stainless steel w/motor
Continuous Conveyor 1 Rubber belt type
Continuous Inclined Conveyor 1 Inclined rubber belt type
Vincent Dehydration Press 1 Model KP-10-K76 S/N 98027-C Stainless Steel
Fruit Bin Dump Table 1 S/S hopper, 6' dia., 15' auguer conveyor
Erriez Vibratory Conveyor 1 "Hi-Vi" Model.Stainless.  Covered. Incl. motor
Filling Stand for SuperSacks 1 S/S
FMC Vibratory Conveyor 1 Prox. 34" X 13"  w/drive supports and motor
Fitzmill Hammermill 1 Cominutor Model DA06 S/N 7000
Hoist System 1 Single girder prox. 15" span w/support and 1,000 lb hoist
Hydraulic Dumper, Hopper, & Conveyor 1 10-15 HP Hydraulic power unit w/hopper
Hyster Model S50XL Forklift Truck 1 S/N C187V02929N. 5,000 lb cap.  LP gas.Side shifter, etc.
LOMA Systems Metal Detector 1 Model IQ2.  Gravity flow type.
Safeline Metal Detector 1 Gravity flow type
Newlong Sewing Machine 1 Model NP-7A.  For closing SuperSacks and bags
Piedmont Vibratory Conveyor 1 Model 990089
Reactor Tank 750 Gallon Capacity 1 750 gal. capacity stainless steel
Reitz Model RSP-6-K2 Screw Press 1  S/N RSP-86003801 Stainless steel. W/motor, drive, support stand
Rice Lake Digital Platform Scale 1 48" X 48"
Rice Lake Rough Deck Digital Scale 1 Weigh-Tronix Model 350 "Rough Deck" 48" X 48"  
Polypropylene Storage Tank 4000 Gallon Capacity 1 Vertical setup
SWECO Model LS48C68 SEPARATOR w/Stand 1 S/N LS48C-848-873-63 48" Diameter 4-Deck. 1200 RPM
URSHEL Comitrol #3600 Dicer 1 S/N 876 Used in production - Bldg 12-E
Urschel #RA-D Dicer 1 GL 140677 Urschel Dicer, Model RA-D s/n #1597 (UPSTAIRS)
Wolverine-Proctor Oven 1 Stainless Steel Bed and Conveyor.  3 Burners
Caterpillar A200 GC25K Forklift Truck 1 Acquired following end of lease term August 2014
Ohaus SD75L Platform Scale 1 New
Fruit Bins 50 46" X 46" X 28" - Subject to variation in Qty
Auger Conveyor and Stainless Steel  Fabrications 1 For discharge end of Wolverine Proctor Dryer
SWECO Screens 3 Added after RPE asset acquisition
Fitzmill Screens 2 Added after RPE asset acquisition
Freemachine 1 Acquired from RPE
Urschel 180U Cutting Head 1 New spare for peel cutter
Load Leveler 1,000 pound capacity 1 New
Electric chain hoist 2,000 pound capacity 1 New
Flex Neck Digital Imaging Camera 1 New
Lenovo 8705-CTO Tower Case PC with Software 1 With Windows, MS Office, etc.
HP Tower Case Pavillion PC with Software 1 With windows, MS Office, etc
HP OfficeJet 4630All-in-One 1 Printer/fax/copier
HP G7 Laptop Computer 1 With Windows, MS Office, Etc.
Ice Machine for Bldg. 12-E 1 Stand alone model
40' Standard Height  Shipping Container for CEI Storage   Storage Container (#1) (From RPE)
Dual halogen light stand 1 Work light
Dollies (as casters) for moving heavy machinery 4 New
Drill press 1 New
Portable Generator 1 Approximately 900 watts.  New.
Portable Generator 1 4,000 watts.  New.
Steel dock plate 1 Purchsed new from Uline
SuperSacks 240 Inventory - Subject to variation in Qty
SuperSack Liners 108 Inventory - Subject to variation in Qty
Product Boxes 500 Inventory - Subject to variation in Qty
Poly Liners for Product Boxes 800 Inventory - Subject to variation in Qty
Stainless Steel Screw Conveyor 1 SS Screw conveyor 12’ x 28” w/1 hp drive motor
Stainless Steel Screw Conveyor 1 18’ x 14” SS screw conveyor (no gearbox or motor)
Stainless Steel Screw Conveyor 1 12’x 14” SS screw conveyor
Stainless Steel Screw Conveyor 1 36’ x 16” SS screw conveyor w/gearbox
Stainless Steel Screw Conveyor 1 12’ x 12” SS screw conveyor
Stainless Steel Screw Conveyor 1 36’ x 12” SS screw conveyor
Stainless Steel Screw Conveyor 1 30’ x 12” SS screw conveyor w/7.5 hp motor
Stainless Steel Screw Conveyor 1 36’ x 14” SS screw w 10 HP motor
Stainless Steel Screw Conveyor 1 12’ x 14”SS  screw with 15 HP motor
Stainless Steel Screw Conveyor 1 24’ x 16” SS screw w/10 HP motor
Stainless Steel Screw Conveyor 1 12’ x 20” SS screw with 15 HP motor
Stainless Steel Screw Conveyor 1 24’ x 24” SS screw w/15HP motor
Stainless Steel Screw Conveyor 1 10' x 9" SS screw w/5HP motor
Stainless Steel Screw Conveyor 1 10' x 9' SS screw w/5HP motor
Stainless Steel Screw Conveyor 1 5' x 9" SS screw w/5HP motor
Stainless Steel Bin 1 Stainless Steel Unloading Bin, 102” x 102” x 136”
Insulated Stainless Steel Tank 1 Double Wall SS Insulated Tank w/7-1/2 HP motor
Metal Storage Container 1 Metal Storage Container
Urschel Cutting Machine 1 Urschel Comitrol 3640 w/40 hp motor
Urschel Cutting machine 1 Urschel Comitrol 3640 w/40 hp motor
Metal detector 1 Metal Detector, Safe Line
Belt Conveyor 1 Belt Conveyors 18” x 21’ and 20” x 26’
Stainless Steel Belt Conveyor 1 Belt Conveyors 20” x 16’ Stainless Steel
Pump 1 Moyno Pump, 7-1/2 HP motor and drive
Pump 1 Moyno Pump, 5 HP motor and drive
Pump 1 Progressive Cavity Pump w/5HP motor and drive
Pump 1 Moyno pump w/var speed drive 7HP
Pump 1 Monyo pump w/5HP drive motor
Pump 1 Durco pump or shredder with 40 HP drive motor
Pump 1 Monyo pump w/20 HP drive
Bagging/Loading System 1 Bagging/Tote Loading System
Vibratory Screen deseeder/Conveyor w/Motor 1 Deseeder (vibratory screen) and conveyor w/5hp motor
Bulker 1 Griffin Bulker
Heat Exchanger 1 Gosset Heat Exchanger Model ITT 7t
Pallets 40 Inventory - Subject to variation in Qty
Forklift ramp - Heavy Duty Steel 1 Forklift ramp from ground to loading deck height
Prepaids (Insurance, etc.)   Estimated for March 31 closing
Licenses, certifications, subsidies, etc.                          (INSOFAR AS ANY OF THESE MAY BE TRANSFERRED BY SELLER TO BUYER) 1 Food license, Organic Certification License, Kosher Certification, HACCP System, State of Florida rent subsidy certification, etc.
Service deposits 1 Fort Pierce Utility Authority deposit (prox) $12,000 Transferred to Buyer by CEI and/or Red Phoenix Extracts with full authority of Red Phoenix (Subject to the terms and conditions of Section 5.09 of the Agreement)
Finished NON-ORGANIC Product Inventory as of Closing. 220,794  
Finished ORGANIC Product Inventory as of Closing. 143,568  
Description of Intellectual Property of Seller related to CEI to be transferred to Buyer as Assets:
Trade Secret Intellectual Property – Emulsion System: 1  
Trade Secret Intellectual Property – CitraBlend Peel Processing System: 1  
Technical information, data, customer lists, price lists, process technology, plans, and drawings including the names and all corporate and fictional business names, trading names, registered and unregistered trademarks, service marks, and applications (collectively, the “Marks”); all patents, patent applications, and inventions and discoveries that may be patentable (collectively, “Patents”); all copyrights in both published works and unpublished works (collectively, the “Copyrights”); all contracts and agreements, including the Profit Share Agreement with Uncle Matt's Organic or otherwise (collectively, "Contracts"); all websites, e-mail addresses, and domain names (collectively the "Internet Technology"); and all know-how, trade secrets, confidential information, software, (collectively, the “Trade Secrets”). 1 Buyer shall not use the word "Acacia" in his business or trade activities.
Total Buyer’s Valuation of Intellectual Property 1  
Goodwill 1 Goodwill relating to Citrus Extracts, Inc.
(Assets of Acacia Diversified Holdings, Inc. relating to Acacia Milling Services)
Urschel Comitrol 3640 1 Milling Machine S/N 673
Microscope-3 Turrets with Digital Imaging 1 New
Steel scaffold/stanchion 1 Acquired by AMS
Dust collection units with motors, etc. 2 Acquired by AMS
Champion Commercial Air Compressor 1 Prox. 80 gallon tank
Drill Press 1 New
Brother HL5370DW Laser Printer 1 Acquired by AMS
HP Printer/Scanner 1 Acquired by AMS
Bissell Vacuum Cleaner 1 Acquired by AMS
4' Tilt Dumpster 1 Acquired by AMS
Wood Double Pedestal Desk w/Glass Top 2 Acquired by AMS
High Back Executive Swivel Chair 2 Acquired by AMS
Secretarial Desk with Return 1 Acquired by AMS
Mint Green Sofa with Table & Magazine Rack 1 Acquired by AMS
Fire King Fireproof File Cabinet 1 Acquired by AMS
Shaw-Walker Heavy Duty Floor Safe 1 Acquired by AMS 25" X 27" X 52"
Misc. Office Furnishings 1 Acquired by AMS
100 Foot Heavy Duty Electrical Cord 1 Acquired by AMS
HotPoint Refrigerator Freezer 1 Acquired by AMS
GE Microwave Oven 1 Acquired by AMS
GE Coffeemaker 1 Acquired by AMS
All customer lists, price lists, contracts and agreements, including those with Citrus Extracts, Inc. 1 Buyer shall not use the word "Acacia" in his business or trade activities.

 

 

 

 

 

 

 

Assets to be Conveyed from ATS to CETS

 

Item Qty. Description or Notes
 
     
     
Assets to be Conveyed by Acacia Transport Services, Inc. to Citrus Extracts Transport Services, LLC
2006 IHC 8600 Tandem Axle Road Tractor 1 Acquired July 2014 - Hydraulic wetline kit, 1 yr/100,000 mi warranty good till 8-8-2015 572,000 miles, whichever occurs first.
2004 IHC 9200 Tandem Axle Road Tractor 1 Acquired July 2014 - Hydraulic wetline kit.
1986 IHC F1954 tandem Axle Road Tractor 1 Acquired July 2014 - Used as "yard" tractor
1987 IHC 1600 Flatbed Truck W/Stainless Tank 1 Electric-powered stainless screw unloader
1974 Summit Tandem Axle Aluminum Dump Trailer 1 Acquired July 2014
1981 Hardee Tandem Axle Aluminum Dump Trailer 1 Acquired July 2014
1990 Summit Tandem Axle Aluminum Dump Trailer 1 Acquired July 2014
1994 Dorsey Tandem Axle Aluminum Dump Trailer 1 Acquired July 2014
1996 Benson Tandem Axle Aluminum Dump Trailer 1 Acquired July 2014
1996 STRIK 53' Tandem Axle Van Trailer 1 Acquired July 2014
40' X 8' Hi-Cube Shipping Container for Storage 1 Storage container #2 (Acquired by ATS)
40' X 8' Hi-Cube Shipping Container for Storage 1 Storage container #3 (Acquired by ATS)
Inventory of tires, wheels, parts, tools, etc. (new & used) 1 Acquired from Lane Trucking
Wetline Hydraulic Kits for Tractors 3 Acquired from Lane Trucking
Prepaid permits, licenses, insurance 1 Estimated for March 31st closing
External Electric fuel transfer pump unit 1 12 V with fittings, hoses,
Portable mechanics tool kit 1 For field use on trucks
Portable paint sprayer unit 1 For field use on trucks
20 Ton bottle jack 1 New
8" Bench grinder with stand 1 New
Prepaids (Insurance, etc.) 1 Estimated for March 31st closing
Licenses, permits, etc. 1 Estimated for March 31st closing
2,000 pound capacity chain hoise 1 New
Service deposits 1 Cash deposit on file with Fuelman to guarantee payment performance of fuel credit card account
Description of Intellectual Property of Seller related to ATS to be transferred to Buyer as Assets:
All customer lists and price lists; all contracts and agreements, including those with Lambeth Groves Juice Company, Davie Dairy, or otherwise (collectively, "Contracts"); and, all trade secrets and confidential information (collectively, the “Trade Secrets”). 1 Buyer shall not use the word "Acacia" in his business or trade activities.
Goodwill 1 Goodwill relating to Acacia Transport Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

SCHEDULE 1.02

EXCLUDED ASSETS

 

Listing of Assets to Be Excluded from the Transactions

 

Item

 

Items and assets to be excluded from the transaction include any and all asset items owned by

Acacia Diversified Holdings, Citrus Extracts, Inc., Acacia Transport Services, Inc. and Acacia

Milling Services that are not included in the definition of “Purchased Assets”, including but not

limited to the following:

 

Licenses, permits, certificates, certifications, subsidies, etc. including but not limited to USDA

Phytosanitary Certificate, USDA Organic Certificate, Americert Organic Certification, Kosher

Certification, HACCP System, Florida Department of Agriculture Annual Food Permit, State of

Florida rent subsidy certification, etc. that cannot be transferred to Buyer by law, rule or

otherwise.

 

Tent, test equipment, miscellaneous items and records of activities outside the scope of the Seller

Businesses, all of which are located in Bldg. 12-W and otherwise.

 

"Millie Junior" Chinese Milling Machine

 

Laptop computer used by Bill Sample (Acacia Diversified has provided a Lenovo 8705-CTO

tower case pc as a replacement)

 

Ford 755B backhoe

 

The name "Acacia"; its trademarks, service marks, or logos using the name “Acacia”; or any use thereof.

 

Seller's Cash and Cash Equivalents, Accounts and Notes Receivable and related monetary

assets.

 

All Ocion chemicals and products located onsite

 

The License Agreement dated January 1, 2015 between NW Ingredients, Inc. and Citrus Extracts, Inc.

 

Ft. Pierce State Farmers’ Market Commercial Lease between the State of Florida Department of Agriculture and Consumer Services and Citrus Extracts Inc. dated February 14, 2014 (Unit 12 East), as extended by the Extension of Term Notice dated April 22, 2014

 

Ft. Pierce State Farmers’ Market Commercial Lease between the State of Florida Department of Agriculture and Consumer Services and Citrus Extracts Inc. dated January 30, 2014 (Warehouse/Office Unit 12 West), as extended by the Extension of Term Notice dated April 22, 2014

 

ADH Licensed Software (as defined in the APA)

 

All items not included in the definition of “Purchased Assets” and owned by Red Phoenix

Extracts, Inc., Natural Citrus Products Corporation, or other organization(s) diverse from Acacia

Diversified, CEI and ATS and which are and have been stored on the CEI premises. These items

include but are not limited to pallets loaded with miscellaneous parts and equipment currently

stored in Building 5-E, 12-E (including the mezzanine thereto) and 12-W, other parts, supplies,

and parts, equipment and supplies stored in those same areas but not palletized, two large

electrical control panels currently stored in steel storage container domiciled on the outside lot of

Building 12-E, and all items stored in the area commonly referred to as the "Bone Yard"

consisting of outside storage maintained by Natural Citrus Products Corporation in a diverse area

of the Fort Pierce State Farmers Market.

 

All other items as are not included in the definition of “Purchased Assets”.

 
 

SCHEDULE 1.04

WIRE TRANSFER INSTRUCTIONS; PAYOFFS; TRADE PAYABLES

 

 

 

 

Disbursements to be made at Closing from the Purchase Price:

 

Recipient – Creditors/Trade Payables Amount
Florida Community Bank $129,557.73
Natural Citrus Products Corporation $189,000
Red Phoenix Extracts, Inc $74,950
L. Palmer Sample $63,920
Kenneth E. Reeser MD, IRA $125,905.85
Reesor Family Investments Custody Account $22,218.70
David Lee Sadler Estate $83,900
Katy Sadler Prince Testamentary Trust $6,200
Alice L. Sample $13,884
William A. Sample $5,862

 

Recipient – Signatories to Non-Competition Agreements Amount
Edward W. Sample $1,000
William A. Sample $1,000

 

The balance of the purchase price, being $1,845,415.94 after payment of the relevant amounts above at closing (excluding payments for Non-Competition Agreements), will be paid to Acacia Diversified Holdings, Inc.

 

Wire transfer instructions are as set forth in that certain Funds Flow Memorandum dated as of the date of this Agreement between Buyer and Seller.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 1.05

PURCHASE PRICE ALLOCATION

 

 

    Citrus Extracts II, LLC ($) Citrus Extracts Transport Services, LLC ($) Total ($)
Finished Product Inventory          458,474                   -           458,474
Parts/Supplies Inventory              7,450          18,250          25,700
Equipment      1,457,640        141,000    1,598,640
Non Compete Agreements            50,000          50,000        100,000
Goodwill          378,000                   -           378,000
Total      2,351,564        209,250    2,560,814
         

 

 

 

 

SCHEDULE 3.02

REQUIRED CONSENTS

 

 

 

 

· Premises Usage Agreement between The Mushroom Guy and Citrus Extracts, Inc. requires prior written consent of The Mushroom Guy to assign or sublease the agreement or the premises described therein.

 

· Definitive Supply and Profit Sharing Agreement between Uncle Matt’s Organic, Inc. and Citrus Extracts, Inc. dated August 20, 2013, as extended by the Extension of Definitive Supply and Profit Sharing Agreement dated June 25, 2015 between such parties, requires the prior written consent of the non-assigning party.

 

· Transport Agreement between Davie Dairy, Inc. and Acacia Transport Services, Inc. dated June 26, 2015 provides that no party shall, without the prior written consent of the other party, which consent shall not be unreasonably conditioned, withheld or delayed, assign or permit any transfer of the Agreement.

 

 

· Consents/Notices Required for Transfer of Assigned Permits:

 

· None

 

 
 

SCHEDULE 3.03

ENCUMBRANCES

 

 

None.

 

 
 

SCHEDULE 3.06(b)

INTELLECTUAL PROPERTY

 

 
 

 

SCHEDULE 3.07

ASSIGNED CONTRACTS

 

Assigned Contracts to CEL :

 

 

 

 

 

Assigned Contracts to CETS:

 

 

 

 

 

 
 

SCHEDULE 3.08

ASSIGNED PERMITS

 

 

Certificates, Permits, and other Authorizations of Seller, all of which will be Assigned Permits (Insofar as they are transferrable) :

 

 

Permit/Certification Name Transferability Assignee (if applicable)
USDA Organic Certification/Americert Non-transferable; new application required  
Food License Non-transferable; new application required  
Kosher Certification Non-transferable; new application required  
HACCP System Non-transferable; new application required  
USDA Photosanitary Certificate Non-transferable; new application required  

 

 

Ex. 10.2

CITRUS EXTRACTS, LLC

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Assignment and Assumption Agreement (this “ Assignment and Assumption Agreement ”) is made and entered into as of June 29, 2015, by and between Citrus Extracts, Inc. (“ CEI ”), Acacia Diversified Holdings, Inc. (“ ADH ” and, collectively with CEI, “ Assignor ”) and Citrus Extracts II, LLC (“ CEL ” or “ Assignee ”).

 

WHEREAS, Assignee, Assignor and certain other parties named therein have entered into that certain Asset Purchase Agreement dated as of the date hereof (the “ Purchase Agreement ”), pursuant to which Assignee has purchased certain assets of Assignor used in connection with the business of acquiring and processing citrus peel and milling citrus ingredient products; and

 

WHEREAS, pursuant to the Purchase Agreement, Assignor has agreed to assign certain rights and agreements to Assignee, and Assignee has agreed to assume certain obligations of Assignor, as set forth herein, and this Assignment and Assumption Agreement is contemplated by the Purchase Agreement;

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

 

1. Capitalized Terms . Capitalized terms used but not defined herein shall have the meanings set forth in the Purchase Agreement.

 

2. Assignment and Assumption . Assignor hereby assigns, sells, transfers and sets over (collectively, the “ Assignment ”) to Assignee all of Assignor’s right, title, benefit, privileges and interest in and to the Purchased Assets (including, without limitation, the Assigned Contracts and, to the extent assignable, the Assigned Permits), except those CETS Assets, CETS Contracts and CETS Permits transferred to Citrus Extracts Transport Services, LLC under the Purchase Agreement, and all of Assignor’s burdens, obligations and liabilities in connection with, each of the CEL Assumed Liabilities allocated to Assignor under Section 1.03 of the Purchase Agreement. Assignee hereby accepts the Assignment and assumes and agrees to observe and perform all of the duties, obligations, terms, provisions and covenants, and to pay and discharge when due all of the obligations of Assignor to be observed, performed, paid or discharged from and after the Closing, in connection with such CEL Assumed Liabilities. Assignee assumes no Excluded Liabilities, and the parties agree that all such Excluded Liabilities shall remain the sole responsibility of Assignor.

 

3. Terms of the Purchase Agreement . The terms of the Purchase Agreement, including but not limited to Assignor’s and Assignee’s representations, warranties, covenants, agreements and indemnities relating to the Assumed Liabilities and Purchased Assets, are incorporated herein by this reference. Assignor and Assignee acknowledge and agree that the representations, warranties, covenants, agreements and indemnities contained in the Purchase Agreement shall not be superseded hereby but shall remain in full force and effect to the full extent provided therein. In the event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern.

 

4. Further Actions . Each of the parties covenants and agrees, at its own expense, to execute and deliver, at the request of the other party hereto, such further instruments of transfer and assignment and to take such other action as such other party may reasonably request to more effectively consummate the assignments and assumptions contemplated by this Assignment and Assumption Agreement.

 

5. Governing Law . This Assignment and Assumption Agreement will be governed by and construed under the laws of the State of Florida without regard to conflicts-of-laws principles that would require the application of any other law.

 

6. Execution of Agreement . This Assignment and Assumption Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. The parties may deliver an executed copy of this Assignment and Assumption Agreement or any other document contemplated by this Assignment and Assumption Agreement by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Assignment and Assumption Agreement or such other document.

 

 

[ Signature page follows ]

 
 

IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of the date first above written.

 

 

ASSIGNOR:

 

Citrus Extracts, Inc.

 

By: _____ /s/ Steven L. Sample __________

 

Name: Steven L. Sample

 

Title: Chief Executive Officer

 

 

Acacia Diversified Holdings, Inc.

 

By: ____ /s/ Steven L. Sample ___________

 

Name: Steven L. Sample

 

Title: Chief Executive Officer

 

 

ASSIGNEE :

 

Citrus Extracts II, LLC

 

By: ___ /s/ Alan Koch _________________

 

Name: Alan Koch

 

Title: Co-Manager

 

Ex 10.3

CITRUS EXTRACTS TRANSPORT SERVICES, LLC

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Assignment and Assumption Agreement (this “ Assignment and Assumption Agreement ”) is made and entered into as of June 29, 2015, by and between Acacia Transport Services, Inc. (“ Assignor ”) and Citrus Extracts Transport Services, LLC (“ CETS ” or “ Assignee ”).

 

WHEREAS, Assignee, Assignor and certain other parties named therein have entered into that certain Asset Purchase Agreement dated as of the date hereof (the “ Purchase Agreement ”), pursuant to which Assignee has purchased certain assets of Assignor used in connection with the business of transporting raw citrus peel by truck; and

 

WHEREAS, pursuant to the Purchase Agreement, Assignor has agreed to assign certain rights and agreements to Assignee, and Assignee has agreed to assume certain obligations of Assignor, as set forth herein, and this Assignment and Assumption Agreement is contemplated by the Purchase Agreement;

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

 

1. Capitalized Terms . Capitalized terms used but not defined herein shall have the meanings set forth in the Purchase Agreement.

 

2. Assignment and Assumption . Assignor hereby assigns, sells, transfers and sets over (collectively, the “ Assignment ”) to Assignee all of Assignor’s right, title, benefit, privileges and interest in and to the Purchased Assets, Assigned Contracts and Permits transferred to Citrus Extracts Transport Services, LLC under the Purchase Agreement (the “ CETS Assets ”) (including, without limitation, the CETS Contracts and, to the extent transferable, the CETS Permits), and all of Assignor’s burdens, obligations and liabilities in connection with, each of the CETS Assumed Liabilities allocated to Assignor under Section 1.03 of the Purchase Agreement. Assignee hereby accepts the Assignment and assumes and agrees to observe and perform all of the duties, obligations, terms, provisions and covenants, and to pay and discharge when due all of the obligations of Assignor to be observed, performed, paid or discharged from and after the Closing, in connection with such CETS Assumed Liabilities. Assignee assumes no Excluded Liabilities, and the parties agree that all such Excluded Liabilities shall remain the sole responsibility of Assignor.

 

3. Terms of the Purchase Agreement . The terms of the Purchase Agreement, including but not limited to Assignor’s and Assignee’s representations, warranties, covenants, agreements and indemnities relating to the Assumed Liabilities and Purchased Assets, are incorporated herein by this reference. Assignor and Assignee acknowledge and agree that the representations, warranties, covenants, agreements and indemnities contained in the Purchase Agreement shall not be superseded hereby but shall remain in full force and effect to the full extent provided therein. In the event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern.

 

4. Further Actions . Each of the parties covenants and agrees, at its own expense, to execute and deliver, at the request of the other party hereto, such further instruments of transfer and assignment and to take such other action as such other party may reasonably request to more effectively consummate the assignments and assumptions contemplated by this Assignment and Assumption Agreement.

 

5. Governing Law . This Assignment and Assumption Agreement will be governed by and construed under the laws of the State of Florida without regard to conflicts-of-laws principles that would require the application of any other law.

 

6. Execution of Agreement . This Assignment and Assumption Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. The parties may deliver an executed copy of this Assignment and Assumption Agreement or any other document contemplated by this Assignment and Assumption Agreement by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Assignment and Assumption Agreement or such other document.

 

 

[ Signature page follows ]

 
 

IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of the date first above written.

 

 

ASSIGNOR:

 

Acacia Transport Services, Inc.

 

By: ___ /s/ Steven L. Sample ______________

 

Name: Steven L. Sample

 

Title: Chief Executive Officer

 

 

 

ASSIGNEE :

 

Citrus Extracts Transport Services, LLC

 

By: Citrus Extracts II, LLC, its Managing Member

 

By: _____/s/ Alan Koch____________

 

Name: Alan Koch

 

Title: Co-Manager

 

Ex 10.4

INTANGIBLE ASSET ASSIGNMENT

THIS INTANGIBLE ASSET ASSIGNMENT AGREEMENT (the “ Assignment ”) shall be deemed made and entered into as of the 29th day of June, 2015, (“ Effective Date ”) by and between Citrus Extracts, Inc., a Florida corporation, Edward W. Sample (with Citrus Extracts, Inc., “ Assignor ”), and Citrus Extracts II, LLC, a Florida limited liability company (“ Assignee ”). This Assignment is made pursuant to the Asset Purchase Agreement (the “ Agreement ”) dated as of the date hereof by and between Citrus Extracts, Inc., Assignee, and certain other parties. Any capitalized term used but not defined in this Assignment shall have the meaning, if any, set forth in the Agreement.

 

WHEREAS, prior to the Effective Date hereof (subject to the following paragraph), Citrus Extracts, Inc. was the sole owner of the entire right, title and interest in and to all intangible assets designated as owned by Citrus Extracts, Inc. on Schedule 1.01 of the Disclosure Schedules to the Agreement and any other intangible assets (including, without limitation, Intellectual Property) owned by Citrus Extracts, Inc. which are part of the Purchased Assets under the Agreement (the “ Intangible Assets ”), and Citrus Extracts, Inc. has agreed to transfer all of its right, title, and interest in and to the Intangible Assets to Assignee pursuant to the Agreement.

 

WHEREAS, prior to the Effective Date hereof, Edward W. Sample was the sole registered owner of the entire right, title and interest in and to the domain name “allthingscitrus.com” that is included within the Intangible Assets, and Edward W. Sample has agreed to transfer all of his right, title and interest in and to such Intangible Asset in connection with Citrus Extracts, Inc.’s obligations under the Agreement.

 

NOW, THEREFORE, as per the terms of the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby transfers and assigns to Assignee its entire worldwide right, title and interest in and to the Intangible Assets, including all registrations and applications therefore, as well as all renewals and extensions of registrations that are or may be secured by Assignee, its successors, assigns or other legal representatives, for Assignee’s own use and enjoyment, and for the use and enjoyment of Assignee’s successors, assigns or other legal representatives.

Assignor agrees to take all other appropriate actions and execute any additional future documents required to implement and effectuate the assignment and transfer of the Intangible Assets to Assignee, including the rights to administer the web site associated with any domain names included in the Intangible Assets (the “ Domain Names ”). Assignor agrees to cooperate with Assignee and follow Assignee’s instructions in order to transfer the Domain Names and the related administration rights to Assignee in a timely manner. Assignor will promptly prepare and transmit the necessary documentation and/or correspond with the appropriate domain name registration authority, Internet service provider and/or governmental entities to authorize transfer of the Domain Names. Assignor further agrees to cooperate as necessary with Assignee to finalize transfer of the Domain Names.

This Assignment shall inure to the benefit of, and be binding upon the parties, their successors and assigns.

This Assignment may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. The parties may deliver an executed copy of this Assignment or any other document contemplated by this Assignment by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Assignment or such other document.

 

[ Signature page follows ]

 
 

IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above written.

 

Assignor: Assignee:

 

Citrus Extracts, Inc.   Citrus Extracts II, LLC
     
By: /s/ Steven L. Sample   By: /s/ Alan Koch
Name: Steven L. Sample   Name: Alan Koch
Title: Chief Executive Officer   Title: Co-Manager

  

 

/s/ Edward W. Sample

Edward W. Sample

 

 

 

Ex 10.5

INTANGIBLE ASSET ASSIGNMENT

THIS INTANGIBLE ASSET ASSIGNMENT AGREEMENT (the “ Assignment ”) shall be deemed made and entered into as of the 29th day of June, 2015, (“ Effective Date ”) by and between Citrus Extracts, Inc., a Florida corporation, Edward W. Sample (with Citrus Extracts, Inc., “ Assignor ”), and Citrus Extracts II, LLC, a Florida limited liability company (“ Assignee ”). This Assignment is made pursuant to the Asset Purchase Agreement (the “ Agreement ”) dated as of the date hereof by and between Citrus Extracts, Inc., Assignee, and certain other parties. Any capitalized term used but not defined in this Assignment shall have the meaning, if any, set forth in the Agreement.

 

WHEREAS, prior to the Effective Date hereof (subject to the following paragraph), Citrus Extracts, Inc. was the sole owner of the entire right, title and interest in and to all intangible assets designated as owned by Citrus Extracts, Inc. on Schedule 1.01 of the Disclosure Schedules to the Agreement and any other intangible assets (including, without limitation, Intellectual Property) owned by Citrus Extracts, Inc. which are part of the Purchased Assets under the Agreement (the “ Intangible Assets ”), and Citrus Extracts, Inc. has agreed to transfer all of its right, title, and interest in and to the Intangible Assets to Assignee pursuant to the Agreement.

 

WHEREAS, prior to the Effective Date hereof, Edward W. Sample was the sole registered owner of the entire right, title and interest in and to the domain name “allthingscitrus.com” that is included within the Intangible Assets, and Edward W. Sample has agreed to transfer all of his right, title and interest in and to such Intangible Asset in connection with Citrus Extracts, Inc.’s obligations under the Agreement.

 

NOW, THEREFORE, as per the terms of the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby transfers and assigns to Assignee its entire worldwide right, title and interest in and to the Intangible Assets, including all registrations and applications therefore, as well as all renewals and extensions of registrations that are or may be secured by Assignee, its successors, assigns or other legal representatives, for Assignee’s own use and enjoyment, and for the use and enjoyment of Assignee’s successors, assigns or other legal representatives.

Assignor agrees to take all other appropriate actions and execute any additional future documents required to implement and effectuate the assignment and transfer of the Intangible Assets to Assignee, including the rights to administer the web site associated with any domain names included in the Intangible Assets (the “ Domain Names ”). Assignor agrees to cooperate with Assignee and follow Assignee’s instructions in order to transfer the Domain Names and the related administration rights to Assignee in a timely manner. Assignor will promptly prepare and transmit the necessary documentation and/or correspond with the appropriate domain name registration authority, Internet service provider and/or governmental entities to authorize transfer of the Domain Names. Assignor further agrees to cooperate as necessary with Assignee to finalize transfer of the Domain Names.

This Assignment shall inure to the benefit of, and be binding upon the parties, their successors and assigns.

This Assignment may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. The parties may deliver an executed copy of this Assignment or any other document contemplated by this Assignment by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Assignment or such other document.

 

[ Signature page follows ]

 
 

IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above written.

 

Assignor: Assignee:

 

Citrus Extracts, Inc.   Citrus Extracts II, LLC
     
By: /s/ Steven L. Sample   By: /s/ Alan Koch
Name: Steven L. Sample   Name: Alan Koch
Title: Chief Executive Officer   Title: Co-Manager

 

 

 

/s/ Edward W. Sample

Edward W. Sample

 

 

 

INTANGIBLE ASSET ASSIGNMENT

THIS INTANGIBLE ASSET ASSIGNMENT AGREEMENT (the “ Assignment ”) shall be deemed made and entered into as of the 29th day of June, 2015, (“ Effective Date ”) by and between Acacia Transport Services, Inc., a Florida corporation (“ Assignor ”), and Citrus Extracts Transport Services, LLC, a Florida limited liability company (“ Assignee ”). This Assignment is made pursuant to the Asset Purchase Agreement (the “ Agreement ”) dated as of the date hereof by and between Assignor, Assignee, and certain other parties. Any capitalized term used but not defined in this Assignment shall have the meaning, if any, set forth in the Agreement.

 

WHEREAS, prior to the Effective Date hereof, Assignor was the sole owner of the entire right, title and interest in and to all intangible assets designated as owned by Assignor on Schedule 1.01 of the Disclosure Schedules to the Agreement and any other intangible assets (including, without limitation, Intellectual Property) owned by Assignor which are part of the Purchased Assets under the Agreement (the “ Intangible Assets ”), and Assignor has agreed to transfer all of its right, title, and interest in and to the Intangible Assets to Assignee pursuant to the Agreement.

 

NOW, THEREFORE, as per the terms of the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby transfers and assigns to Assignee its entire worldwide right, title and interest in and to the Intangible Assets, including all registrations and applications therefore, as well as all renewals and extensions of registrations that are or may be secured by Assignee, its successors, assigns or other legal representatives, for Assignee’s own use and enjoyment, and for the use and enjoyment of Assignee’s successors, assigns or other legal representatives.

Assignor agrees to take all other appropriate actions and execute any additional future documents required to implement and effectuate the assignment and transfer of the Intangible Assets to Assignee, including the rights to administer the web site associated with any domain names included in the Intangible Assets (the “ Domain Names ”). Assignor agrees to cooperate with Assignee and follow Assignee’s instructions in order to transfer the Domain Names and the related administration rights to Assignee in a timely manner. Assignor will promptly prepare and transmit the necessary documentation and/or correspond with the appropriate domain name registration authority, Internet service provider and/or governmental entities to authorize transfer of the Domain Names. Assignor further agrees to cooperate as necessary with Assignee to finalize transfer of the Domain Names.

This Assignment shall inure to the benefit of, and be binding upon the parties, their successors and assigns.

This Assignment may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. The parties may deliver an executed copy of this Assignment or any other document contemplated by this Assignment by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Assignment or such other document.

 

 

[ Signature page follows ]

 
 

IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above written.

 

Assignor: Assignee:

 

Acacia Transport Services, Inc.   Citrus Extracts Transport Services, LLC
     
    By: Citrus Extracts II, LLC, its Managing Member
     
By: /s/ Steven L. Sample   By: /s/ Alan Koch
Name: Steven L. Sample   Name: Alan Koch
Title: Chief Executive Officer   Title: Co-Manager

 

 

 

 

 

CITRUS EXTRACTS TRANSPORT SERVICES, LLC

 

WARRANTY BILL OF SALE

 

This Bill of Sale is entered into as of June 29, 2015 by Acacia Transport Services, Inc., a Florida corporation (“ Seller ”), in favor of Citrus Extracts Transport Services, LLC, a Florida limited liability company (“ Buyer ”). This Bill of Sale is made pursuant to the Asset Purchase Agreement (the “ Agreement ”) dated as of the date hereof by and between Seller, Buyer, and certain other parties, to transfer the CETS Assets, as fully defined in the Agreement. Any capitalized term used but not defined in this Bill of Sale shall have the meaning, if any, set forth in the Agreement.

 

1.                   Conveyance . For good and valuable consideration described under Section 1.04 of the Agreement, the receipt and adequacy of which Seller hereby acknowledges, Seller hereby irrevocably sells, assigns, transfers, conveys, grants, bargains and delivers to Buyer, all of its right, title and interest in and to the CETS Assets.

 

2.                   Representations and Warranties . Seller represents and warrants that (1) Seller is conveying good and valid title to all CETS Assets, free and clear of all Encumbrances; and (2) Seller has the right to sell the CETS Assets to Buyer and shall warrant and defend the right against the lawful claims and demands of all persons in accordance with the terms and conditions of the Agreement.

 

3.                   Further Assurances . Seller for itself, its successors and assigns, hereby covenants and agrees that, at any time and from time to time on Buyer’s written request, Seller will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably required by Buyer in order to assign, transfer, set over, convey, assure and confirm unto and vest in Buyer, its successors and assigns, title to the assets sold, conveyed and transferred by this Bill of Sale.

 

4.                   Governing Law . This Bill of Sale is governed by, and construed in accordance with, the laws of the State of Florida, United States of America, without regard to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of Florida.

 

5.                   Incorporation of Agreement . This Bill of Sale incorporates by reference all of the terms of the Agreement, including but not limited to Seller’s representations, warranties, covenants and agreements relating to the CETS Assets, as if each term was fully set forth herein. In the event of conflict between the terms of the Agreement and the terms of this Bill of Sale, the terms of the Agreement govern and control.

 

6.                   Counterparts . This Bill of Sale may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Bill of Sale delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Bill of Sale.

 

IN WITNESS WHEREOF, Seller and Buyer have each duly executed and delivered this Bill of Sale as of the date first written above.

 

SELLER :

 

Acacia Transport Services, Inc.

 

 

 

By_____ /s/ Steven L. Sample ________

 

Name: Steven L. Sample

Title: Chief Executive Officer

 

 

 

BUYER :

 

Citrus Extracts Transport Services, LLC

 

By: Citrus Extracts II, LLC, its Managing Member

 

By____ /s/ Alan Koch ___________

 

Name: Alan Koch

Title: Co-Manager

 

 

CITRUS EXTRACTS II, LLC

 

WARRANTY BILL OF SALE

 

This Bill of Sale is entered into as of June 29, 2015 by Acacia Diversified Holdings, Inc., a Texas corporation, and its wholly-owned subsidiary, Citrus Extracts, Inc., a Florida corporation (together with Acacia Diversified Holdings, Inc., “ Seller ”), in favor of Citrus Extracts II, LLC, a Florida limited liability company (“ Buyer ”). This Bill of Sale is made pursuant to the Asset Purchase Agreement (the “ Agreement ”) dated as of the date hereof by and between Seller, Buyer, and certain other parties, to transfer the Purchased Assets, as defined in the Agreement. Any capitalized term used but not defined in this Bill of Sale shall have the meaning, if any, set forth in the Agreement.

 

1.                   Conveyance . For good and valuable consideration described under Section 1.04 of the Agreement, the receipt and adequacy of which Seller hereby acknowledges, Seller hereby irrevocably sells, assigns, transfers, conveys, grants, bargains and delivers to Buyer, all of its right, title and interest in and to the Purchased Assets, except for the CETS Assets (the “ CEL Assets ”).

 

2.                   Representations and Warranties . Seller represents and warrants that (1) Seller is conveying good and valid title to all CEL Assets, free and clear of all Encumbrances; and (2) Seller has the right to sell the CEL Assets to Buyer and shall warrant and defend the right against the lawful claims and demands of all persons in accordance with the terms and conditions of the Agreement.

 

3.                   Further Assurances . Seller for itself, its successors and assigns, hereby covenants and agrees that, at any time and from time to time on Buyer’s written request, Seller will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably required by Buyer in order to assign, transfer, set over, convey, assure and confirm unto and vest in Buyer, its successors and assigns, title to the assets sold, conveyed and transferred by this Bill of Sale.

 

4.                   Governing Law . This Bill of Sale is governed by, and construed in accordance with, the laws of the State of Florida, United States of America, without regard to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of Florida.

 

5.                   Incorporation of Agreement . This Bill of Sale incorporates by reference all of the terms of the Agreement, including but not limited to Seller’s representations, warranties, covenants and agreements relating to the CEL Assets, as if each term was fully set forth herein. In the event of conflict between the terms of the Agreement and the terms of this Bill of Sale, the terms of the Agreement govern and control.

 

6.                   Counterparts . This Bill of Sale may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Bill of Sale delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Bill of Sale.

 

IN WITNESS WHEREOF, Seller and Buyer have each duly executed and delivered this Bill of Sale as of the date first written above.

 

BUYER :

 

Citrus Extracts II, LLC

 

 

 

By____ /s/ Alan Koch ___________

 

Name: Alan Koch

Title: Co-Manager

 

 

 

SELLER :

 

Citrus Extracts, Inc.

 

 

By___ /s/ Steven L. Sample ________

 

Name: Steven L. Sample

Title: Chief Executive Officer

 

 

Acacia Diversified Holdings, Inc.

 

 

By ____ /s/ Steven L. Sample ______

 

Name: Steven L. Sample

Title: Chief Executive Officer

 

 

 

 

Non-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT

 

This NON-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT (this “Agreement”), is made and entered into as of June 29, 2015, between Citrus Extracts II, LLC, a Florida limited liability company (together with its subsidiaries and affiliates, the “Company”), and Steven L. Sample, a Florida resident (“Sample”).

 

WHEREAS , the execution and delivery of this Agreement by the Company and Sample is a condition to the closing of the transaction contemplated by the Asset Purchase Agreement dated as of the date hereof, by and among the Company, Citrus Extracts Transport Services, LLC, Citrus Extracts, Inc. (“ CEI ”), Acacia Transport Services, Inc. (“ ATS ”) and Acacia Diversified Holdings, Inc. (“ ADH ”) (the “ Purchase Agreement ”).

 

WHEREAS , Sample has acquired, through his ownership of ADH (the parent company of ATS and CEI) and his relationship as a director, officer and/or employee of ADH, CEI and CTS, intimate knowledge regarding the business, customers, suppliers, information and processes of or relating to the Company.

 

WHEREAS , Sample will benefit from the closing of the transactions contemplated in the Purchase Agreement, which benefits constitute adequate and sufficient consideration for the covenants and obligations made in this Agreement.

 

WHEREAS , Sample and the Company desire to enter into this Agreement on the terms and conditions hereafter set forth.

 

NOW THEREFORE , in consideration of the covenants and promises contained herein, and given pursuant to the Purchase Agreement, the parties hereto agree as follows:

 

1.       ACKNOWLEDGEMENT; INCORPORATION OF RECITALS . Sample hereby acknowledges receipt of adequate and sufficient consideration from the Company for the covenants and agreements made in this Agreement. The recitals set forth above are, by this reference, incorporated into and deemed a part of this Agreement.

2.       NON-COMPETE AND NON-SOLICITATION

(a)     Non-Competition . During the Restricted Term, Sample agrees that neither he nor any of his Related Persons will, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person other than the Company, invest in, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any Person engaged in or planning to become engaged in the Business; provided, however, that Sample’s ownership of, investment in, management, control or operation of, financing of, employment with or rendering of services to Persons engaged in the production of products directly produced as a result of the systems and methods claimed in US Patent No. 8,017,171 and US Patent No. 8,383,186 and/or the claims of US Patent Application No. 13/765,310 as of the date hereof (the “ Excluded Activities ”), or the transportation by truck of raw citrus peel to be used for such Excluded Activities, shall not be deemed a violation of the restrictions set forth in this Section 2(a).

(b)    Non-Solicitation . During the Restricted Term, Sample agrees that neither he nor his Related Persons, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person will (i) solicit the business of any Person who is a customer or potential customer of the Company for the products or services then sold by the Company in any manner that could be likely to result in such Person curtailing or canceling any business or contracts that such Person has with the Company or in any way interfere with the relationship between the Company and such Person; (ii) cause, induce or attempt to cause or induce any actual or potential customer, supplier, employee, consultant or other business relation of the Company to cease doing business with the Company, to deal with any competitor of the Company, or in any way interfere with its relationship with the Company; or (iii) hire, employ, engage, retain or attempt to hire, employ, engage or retain any employee or independent contractor of the Company or in any way interfere with the relationship between the Company and any of its employees or independent contractors.

3.       CONFIDENTIAL INFORMATION .

(a)     Confidential Information; Restriction . Sample recognizes and acknowledges that certain assets of the Company, including without limitation information regarding customers, pricing policies, methods of operation, proprietary computer programs, sales, products, profits, costs, markets, key personnel, formulae, product applications, technical processes, potential acquisition or joint venture candidates and trade secrets which may have been made available to Sample, whether in writing, in computer form, reduced to a tangible form in any medium, or conveyed orally, and which gives the Company a competitive advantage over other individuals or companies which do not have access to this information (hereinafter called “ Confidential Information ”) are valuable, special, and unique assets of the Company. Sample acknowledges that the Company is the owner of the Confidential Information and agrees not to dispute, contest or deny any such ownership rights of the Company. Sample shall not use, divulge, reproduce, distribute, reverse engineer or disclose (in any way or in any manner) any Confidential Information to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, directly or indirectly, except as may be required by law, unless and until such Confidential Information becomes publicly available other than as a consequence of the breach by Sample of his confidentiality obligations hereunder. Sample agrees to take all reasonable precautions to prevent the inadvertent disclosure of the Confidential Information to any unauthorized person; agrees not to transport or cause to be transported the Confidential Information outside the premises of the Company, except as necessary or desired to carry out Sample’s duties as prescribed by the Company; agrees not, without the Company’s express authorization, to participate directly or indirectly in the development, marketing, sale, licensing or other exploitation of software or other products or services which embody or are derived from Confidential Information; and agrees that in the event Sample becomes aware that any Person is taking or threatens to take any action which would compromise the Confidential Information or violate any of the foregoing provisions were that Person subject to the provisions of this Section 3 , promptly advise the Company of all facts concerning such action or threatened action. Sample expressly agrees that the disclosures prohibited hereby include disclosure of similarities or possible similarities between the Confidential Information and the work product of another person or company.

(b)    Protective Order . In the event that Sample is required to disclose any Confidential Information pursuant to an order, regulation, ruling, governmental request, summons or subpoena, Sample shall promptly notify the Company of such pending disclosure and reasonably cooperate in assisting the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Confidential Information.

(c)     Cooperation . Sample agrees to reasonably cooperate with the Company in the prosecution or defense of all threatened claims or actual litigation in which the Company is or may become a party, whether now pending or hereafter brought, in which Sample has knowledge of relevant facts or issues. Sample shall be promptly reimbursed reasonable out-of-pocket expenses incurred by him due to his cooperating with the prosecution or defense of any litigation for the Company as applicable, including but not limited to reasonable attorney’s fees incurred in the furtherance of those actions, provided that he provides the Company with reasonable documentation of such expenses.

4.       ASSIGNMENT . Sample hereby assigns and transfers to the Company any right, title or interest in any inventions, designs, discoveries, works of authorship, creations, ideas, developments, improvements, trade secrets (including, without limitation, trade secrets relating to the Emulsion System or CitraBlend Peel Proceeding System) or software relating to the Business (collectively, “ Inventions ”), that Sample may have as of the date hereof or may have acquired on or before the date hereof, in whole or in part. This obligation is limited to any Inventions that relate to the Company’s Business or demonstrably anticipated business, whether or not the Inventions were created, originated, developed or conceived of by Sample solely or jointly with others and whether or not the Inventions are protected or protectable under applicable patent, trademark, service mark, copyright or trade secret laws. Sample hereby transfers Sample’s rights in such Inventions free of all encumbrances and restrictions, and will promptly take any action, including executing and delivering any documentation, deemed necessary by the Company to effectuate the transfer or prosecution of ownership rights in the United States and any other country as the Company may request. Sample acknowledges and agrees that the Inventions will be considered part of the Confidential Information.

5.       INJUNCTIVE RELIEF; REMEDIES . Sample acknowledges and agrees that any breach or threatened breach by Sample of Section 2, Section 3 or Section 4 of this Agreement will cause irreparable harm and continuing damages to the Company and that the remedy at law for any such breach or threatened breach will be inadequate. Accordingly, in addition to any other remedies that may be available to the Company at law or in equity in such event, the Company shall be entitled to seek and obtain, from any court of competent jurisdiction, an injunction or injunctions, without bond or other security and without having to show that money damages will be inadequate or impossible to determine, enjoining and restricting the breach or threatened breach. Sample acknowledges, however, that no specification in this Agreement of a specific legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable remedies in the event of a breach of this Agreement by Sample.

6.       SEVERABILITY AND JUDICIAL MODIFICATION . If any clause, term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be held invalid or unenforceable, the remainder of this Agreement and the application of such clause, term or provision to persons or circumstances other than those to which it is invalid and unenforceable, shall not be affected thereby, and each clause, term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. If any court of competent jurisdiction refuses to enforce any clause, term, or provision of this Agreement as written, the other clauses, terms, and provisions shall stand, and the court shall modify the clause, term, or provision at issue to the minimum extent necessary to make it enforceable under applicable law, and shall enforce it as so modified.

7.       GENERAL .

(a)     Waivers . No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. No waiver of any provision of this Agreement shall in any event be effective unless the same shall be in writing, executed by the party against whom enforcement of such waiver is sought, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.

(b)    Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The parties may deliver an executed copy of this Agreement or any other document contemplated by this Agreement by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Agreement or such other document.

(c)     Governing Law; Waiver of Jury Trial . This Agreement shall be construed in accordance with and governed by the laws of the State of Florida applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of laws. Each of the parties hereto hereby irrevocably and unconditionally waives any and all right to trial by jury of any claim or cause of action in any suit arising out of or related to this Agreement or the transactions or events contemplated hereby or any course of conduct, course of dealing, statements (whether verbal or written) or actions of any party hereto. The parties hereto each agree that any and all such claims and causes of action shall be tried by the court without a jury. Each of the parties hereto further waives any right to seek to consolidate any such lawsuit in which a jury trial has been waived with any other lawsuit in which a jury trial cannot or has not been waived.

(d)    No Strict Construction . The language used in this Agreement will be deemed to be the language chosen by Sample and the Company to express their mutual intent, and no rule of strict construction will be applied against Sample or the Company.

(e)     Headings . The section and subsection heading of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

8.       DEFINITIONS . For purposes of this Agreement, the following definitions shall apply:

“Business ” means the business of acquiring and processing raw citrus peel into dehydrated citrus ingredients products, milling dehydrated citrus ingredient products, and/or transporting raw citrus peel by truck, including all processes, systems and technology.

“Control” of an entity includes service as a director, officer, partner, manager, executor or trustee (or in a similar capacity) or beneficial ownership of 10% or more of the outstanding equity (or the right to vote or receive profits, dividends or distributions).

Person ” means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated organization, association, joint venture or other entity or a governmental body.

Related Person ” –

(a)              in the case of a natural person, each member of such Person’s immediate family, by blood or by marriage, including spouses, parents, step-parents, siblings, children, and step-children;

(b)             any Person that, directly or indirectly Controls, is Controlled by or is under common Control with, a Person.

Restricted Term ” means the period commencing on the date hereof and ending five (5) years thereafter.

Restricted Territory ” means anywhere in the United States.

 
 

 

IN WITNESS WHEREOF , and intending to be legally bound hereby, the parties hereto have caused this Non-Compete and Restrictive Covenant Agreement to be duly executed as of the date and year first above written.

 

 

CITRUS EXTRACTS II, LLC



By: /s/ Alan Koch
Name: Alan Koch

Its: Co-Manager


STEVEN L. SAMPLE

/s/ Steven L. Sample
Steven L. Sample

 

Address:

Ocala, Florida

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Non-Competition and Restrictive Covenant Agreement]

 

Non-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT

 

This NON-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT (this “Agreement”), is made and entered into as of June 29, 2015, between Citrus Extracts II, LLC, a Florida limited liability company (together with its subsidiaries and affiliates, the “Company”), and Edward W. Sample, a Texas resident (“Sample”).

 

WHEREAS , the execution and delivery of this Agreement by the Company and Sample is a condition to the closing of the transaction contemplated by the Asset Purchase Agreement dated as of the date hereof, by and among the Company, Citrus Extracts Transport Services, LLC, Citrus Extracts, Inc., Acacia Transport Services, Inc. and Acacia Diversified Holdings, Inc. (the “ Purchase Agreement ”).

 

WHEREAS , Sample has acquired, through his prior relationships with the Company and/or the Company’s shareholders, officers or directors, intimate knowledge regarding the business, customers, suppliers, information and processes of or relating to the Company.

 

WHEREAS , at the closing of the transactions contemplated in the Purchase Agreement, Sample received a cash payment from the Company in consideration of his execution of this Agreement.

 

WHEREAS , Sample and the Company desire to enter into this Agreement on the terms and conditions hereafter set forth.

 

NOW THEREFORE , in consideration of the covenants and promises contained herein, and given pursuant to the Purchase Agreement, the parties hereto agree as follows:

 

1.       ACKNOWLEDGEMENT; INCORPORATION OF RECITALS . Sample hereby acknowledges receipt of a cash payment from the Company pursuant to the Purchase Agreement, which consideration is adequate and sufficient consideration for the covenants and agreements made in this Agreement. The recitals set forth above are, by this reference, incorporated into and deemed a part of this Agreement.

2.       NON-COMPETE AND NON-SOLICITATION

(a)     Non-Competition . During the Restricted Term, Sample agrees that neither he nor any of his Related Persons will, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person other than the Company, invest in, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any Person engaged in or planning to become engaged in the Business; provided, however, that Sample’s ownership of, investment in, management, control or operation of, financing of, employment with or rendering of services to Persons engaged in the production of products directly produced as a result of the systems and methods claimed in US Patent No. 8,017,171 and US Patent No. 8,383,186 and/or the claims of US Patent Application No. 13/765,310 as of the date hereof (the “ Excluded Activities ”), or the transportation by truck of raw citrus peel to be used for such Excluded Activities, shall not be deemed a violation of the restrictions set forth in this Section 2(a).

(b)    Non-Solicitation . During the Restricted Term, Sample agrees that neither he nor his Related Persons, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person will (i) solicit the business of any Person who is a customer or potential customer of the Company for the products or services then sold by the Company in any manner that could be likely to result in such Person curtailing or canceling any business or contracts that such Person has with the Company or in any way interfere with the relationship between the Company and such Person; (ii) cause, induce or attempt to cause or induce any actual or potential customer, supplier, employee, consultant or other business relation of the Company to cease doing business with the Company, to deal with any competitor of the Company , or in any way interfere with its relationship with the Company; or (iii) hire, employ, engage, retain or attempt to hire, employ, engage or retain any employee or independent contractor of the Company or in any way interfere with the relationship between the Company and any of its employees or independent contractors.

3.       CONFIDENTIAL INFORMATION .

(a)     Confidential Information; Restriction . Sample recognizes and acknowledges that certain assets of the Company, including without limitation information regarding customers, pricing policies, methods of operation, proprietary computer programs, sales, products, profits, costs, markets, key personnel, formulae, product applications, technical processes, potential acquisition or joint venture candidates and trade secrets which may have been made available to Sample, whether in writing, in computer form, reduced to a tangible form in any medium, or conveyed orally, and which gives the Company a competitive advantage over other individuals or companies which do not have access to this information (hereinafter called “ Confidential Information ”) are valuable, special, and unique assets of the Company. Sample acknowledges that the Company is the owner of the Confidential Information and agrees not to dispute, contest or deny any such ownership rights of the Company. Sample shall not use, divulge, reproduce, distribute, reverse engineer or disclose (in any way or in any manner) any Confidential Information to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, directly or indirectly, except as may be required by law, unless and until such Confidential Information becomes publicly available other than as a consequence of the breach by Sample of his confidentiality obligations hereunder. Sample agrees to take all reasonable precautions to prevent the inadvertent disclosure of the Confidential Information to any unauthorized person; agrees not to transport or cause to be transported the Confidential Information outside the premises of the Company, except as necessary or desired to carry out Sample’s duties as prescribed by the Company; agrees not, without the Company’s express authorization, to participate directly or indirectly in the development, marketing, sale, licensing or other exploitation of software or other products or services which embody or are derived from Confidential Information; and agrees that in the event Sample becomes aware that any Person is taking or threatens to take any action which would compromise the Confidential Information or violate any of the foregoing provisions were that Person subject to the provisions of this Section 3 , promptly advise the Company of all facts concerning such action or threatened action. Sample expressly agrees that the disclosures prohibited hereby include disclosure of similarities or possible similarities between the Confidential Information and the work product of another person or company.

(b)    Protective Order . In the event that Sample is required to disclose any Confidential Information pursuant to an order, regulation, ruling, governmental request, summons or subpoena, Sample shall promptly notify the Company of such pending disclosure and reasonably cooperate in assisting the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Confidential Information.

(c)     Cooperation . Sample agrees to reasonably cooperate with the Company in the prosecution or defense of all threatened claims or actual litigation in which the Company is or may become a party, whether now pending or hereafter brought, in which Sample has knowledge of relevant facts or issues. Sample shall be promptly reimbursed reasonable out-of-pocket expenses incurred by him due to his cooperating with the prosecution or defense of any litigation for the Company as applicable, including but not limited to reasonable attorney’s fees incurred in the furtherance of those actions, provided that he provides the Company with reasonable documentation of such expenses.

4.       ASSIGNMENT . Sample hereby assigns and transfers to the Company any right, title or interest in any inventions, designs, discoveries, works of authorship, creations, ideas, developments, improvements, trade secrets (including, without limitation, trade secrets relating to the Emulsion System or CitraBlend Peel Proceeding System) or software relating to the Business (collectively, “ Inventions ”), that Sample may have as of the date hereof or may have acquired on or before the date hereof, in whole or in part. This obligation is limited to any Inventions that relate to the Company’s Business or demonstrably anticipated business, whether or not the Inventions were created, originated, developed or conceived of by Sample solely or jointly with others and whether or not the Inventions are protected or protectable under applicable patent, trademark, service mark, copyright or trade secret laws. Sample hereby transfers Sample’s rights in such Inventions free of all encumbrances and restrictions, and will promptly take any action, including executing and delivering any documentation, deemed necessary by the Company to effectuate the transfer or prosecution of ownership rights in the United States and any other country as the Company may request. Sample acknowledges and agrees that the Inventions will be considered part of the Confidential Information.

5.       INJUNCTIVE RELIEF; REMEDIES . Sample acknowledges and agrees that any breach or threatened breach by Sample of Section 2, Section 3 or Section 4 of this Agreement will cause irreparable harm and continuing damages to the Company and that the remedy at law for any such breach or threatened breach will be inadequate. Accordingly, in addition to any other remedies that may be available to the Company at law or in equity in such event, the Company shall be entitled to seek and obtain, from any court of competent jurisdiction, an injunction or injunctions, without bond or other security and without having to show that money damages will be inadequate or impossible to determine, enjoining and restricting the breach or threatened breach. Sample acknowledges, however, that no specification in this Agreement of a specific legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable remedies in the event of a breach of this Agreement by Sample.

6.       SEVERABILITY AND JUDICIAL MODIFICATION . If any clause, term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be held invalid or unenforceable, the remainder of this Agreement and the application of such clause, term or provision to persons or circumstances other than those to which it is invalid and unenforceable, shall not be affected thereby, and each clause, term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. If any court of competent jurisdiction refuses to enforce any clause, term, or provision of this Agreement as written, the other clauses, terms, and provisions shall stand, and the court shall modify the clause, term, or provision at issue to the minimum extent necessary to make it enforceable under applicable law, and shall enforce it as so modified.

7.       GENERAL .

(a)     Waivers . No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. No waiver of any provision of this Agreement shall in any event be effective unless the same shall be in writing, executed by the party against whom enforcement of such waiver is sought, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.

(b)    Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The parties may deliver an executed copy of this Agreement or any other document contemplated by this Agreement by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Agreement or such other document.

(c)     Governing Law; Waiver of Jury Trial . This Agreement shall be construed in accordance with and governed by the laws of the State of Florida applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of laws. Each of the parties hereto hereby irrevocably and unconditionally waives any and all right to trial by jury of any claim or cause of action in any suit arising out of or related to this Agreement or the transactions or events contemplated hereby or any course of conduct, course of dealing, statements (whether verbal or written) or actions of any party hereto. The parties hereto each agree that any and all such claims and causes of action shall be tried by the court without a jury. Each of the parties hereto further waives any right to seek to consolidate any such lawsuit in which a jury trial has been waived with any other lawsuit in which a jury trial cannot or has not been waived.

(d)    No Strict Construction . The language used in this Agreement will be deemed to be the language chosen by Sample and the Company to express their mutual intent, and no rule of strict construction will be applied against Sample or the Company.

(e)     Headings . The section and subsection heading of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

8.       DEFINITIONS . For purposes of this Agreement, the following definitions shall apply:

“Business ” means the business of acquiring and processing raw citrus peel into dehydrated citrus ingredients products, milling dehydrated citrus ingredient products, and/or transporting raw citrus peel by truck, including all processes, systems and technology.

“Control” of an entity includes service as a director, officer, partner, manager, executor or trustee (or in a similar capacity) or beneficial ownership of 10% or more of the outstanding equity (or the right to vote or receive profits, dividends or distributions).

Person ” means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated organization, association, joint venture or other entity or a governmental body.

Related Person ” –

(a)              in the case of a natural person, each member of such Person’s immediate family, by blood or by marriage, including spouses, parents, step-parents, siblings, children, and step-children;

(b)             any Person that, directly or indirectly Controls, is Controlled by or is under common Control with, a Person.

Restricted Term ” means the period commencing on the date hereof and ending five (5) years thereafter.

Restricted Territory ” means anywhere in the United States.

 

 
 

 

IN WITNESS WHEREOF , and intending to be legally bound hereby, the parties hereto have caused this Non-Compete and Restrictive Covenant Agreement to be duly executed as of the date and year first above written.

 

 

CITRUS EXTRACTS II, LLC



By: /s/ Alan Koch
Name: Alan Koch

Its: Co-Manager


EDWARD W. SAMPLE

/s/ Edward W. Sample
Edward W. Sample

 

Address: Allen, Texas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Non-Competition and Restrictive Covenant Agreement]

 

Non-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT

 

This NON-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT (this “Agreement”), is made and entered into as of June 29, 2015, between Citrus Extracts II, LLC, a Florida limited liability company (together with its subsidiaries and affiliates, the “Company”), and William A. Sample, a Florida resident (“Sample”).

 

WHEREAS , the execution and delivery of this Agreement by the Company and Sample is a condition to the closing of the transaction contemplated by the Asset Purchase Agreement dated as of the date hereof, by and among the Company, Citrus Extracts Transport Services, LLC, Citrus Extracts, Inc., Acacia Transport Services, Inc. and Acacia Diversified Holdings, Inc. (the “ Purchase Agreement ”).

 

WHEREAS , Sample has acquired, through his prior relationships with the Company and/or the Company’s shareholders, officers or directors or through his prior employment relationship with Citrus Extracts, Inc., intimate knowledge regarding the business, customers, suppliers, information and processes of or relating to the Company.

 

WHEREAS , at the closing of the transactions contemplated in the Purchase Agreement, Sample received a cash payment from the Company in consideration of his execution of this Agreement.

 

WHEREAS , Sample and the Company desire to enter into this Agreement on the terms and conditions hereafter set forth.

 

NOW THEREFORE , in consideration of the covenants and promises contained herein, and given pursuant to the Purchase Agreement, the parties hereto agree as follows:

 

1.       ACKNOWLEDGEMENT; INCORPORATION OF RECITALS . Sample hereby acknowledges receipt of a cash payment from the Company pursuant to the Purchase Agreement, which consideration is adequate and sufficient consideration for the covenants and agreements made in this Agreement. The recitals set forth above are, by this reference, incorporated into and deemed a part of this Agreement.

2.       NON-COMPETE AND NON-SOLICITATION

(a)     Non-Competition . During the Restricted Term, Sample agrees that neither he nor any of his Related Persons will, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person other than the Company, invest in, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any Person engaged in or planning to become engaged in the Business; provided, however, that Sample’s ownership of, investment in, management, control or operation of, financing of, employment with or rendering of services to Persons engaged in the production of products directly produced as a result of the systems and methods claimed in US Patent No. 8,017,171 and US Patent No. 8,383,186 and/or the claims of US Patent Application No. 13/765,310 as of the date hereof (the “ Excluded Activities ”), or the transportation by truck of raw citrus peel to be used for such Excluded Activities, shall not be deemed a violation of the restrictions set forth in this Section 2(a).

(b)    Non-Solicitation . During the Restricted Term, Sample agrees that neither he nor his Related Persons, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person will (i) solicit the business of any Person who is a customer or potential customer of the Company for the products or services then sold by the Company in any manner that could be likely to result in such Person curtailing or canceling any business or contracts that such Person has with the Company or in any way interfere with the relationship between the Company and such Person; (ii) cause, induce or attempt to cause or induce any actual or potential customer, supplier, employee, consultant or other business relation of the Company to cease doing business with the Company, to deal with any competitor of the Company, or in any way interfere with its relationship with the Company; or (iii) hire, employ, engage, retain or attempt to hire, employ, engage or retain any employee or independent contractor of the Company or in any way interfere with the relationship between the Company and any of its employees or independent contractors.

3.       CONFIDENTIAL INFORMATION .

(a)     Confidential Information; Restriction . Sample recognizes and acknowledges that certain assets of the Company, including without limitation information regarding customers, pricing policies, methods of operation, proprietary computer programs, sales, products, profits, costs, markets, key personnel, formulae, product applications, technical processes, potential acquisition or joint venture candidates and trade secrets which may have been made available to Sample, whether in writing, in computer form, reduced to a tangible form in any medium, or conveyed orally, and which gives the Company a competitive advantage over other individuals or companies which do not have access to this information (hereinafter called “ Confidential Information ”) are valuable, special, and unique assets of the Company. Sample acknowledges that the Company is the owner of the Confidential Information and agrees not to dispute, contest or deny any such ownership rights of the Company. Sample shall not use, divulge, reproduce, distribute, reverse engineer or disclose (in any way or in any manner) any Confidential Information to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, directly or indirectly, except as may be required by law, unless and until such Confidential Information becomes publicly available other than as a consequence of the breach by Sample of his confidentiality obligations hereunder. Sample agrees to take all reasonable precautions to prevent the inadvertent disclosure of the Confidential Information to any unauthorized person; agrees not to transport or cause to be transported the Confidential Information outside the premises of the Company, except as necessary or desired to carry out Sample’s duties as prescribed by the Company; agrees not, without the Company’s express authorization, to participate directly or indirectly in the development, marketing, sale, licensing or other exploitation of software or other products or services which embody or are derived from Confidential Information; and agrees that in the event Sample becomes aware that any Person is taking or threatens to take any action which would compromise the Confidential Information or violate any of the foregoing provisions were that Person subject to the provisions of this Section 3 , promptly advise the Company of all facts concerning such action or threatened action. Sample expressly agrees that the disclosures prohibited hereby include disclosure of similarities or possible similarities between the Confidential Information and the work product of another person or company.

(b)    Protective Order . In the event that Sample is required to disclose any Confidential Information pursuant to an order, regulation, ruling, governmental request, summons or subpoena, Sample shall promptly notify the Company of such pending disclosure and reasonably cooperate in assisting the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Confidential Information.

(c)     Cooperation . Sample agrees to reasonably cooperate with the Company in the prosecution or defense of all threatened claims or actual litigation in which the Company is or may become a party, whether now pending or hereafter brought, in which Sample has knowledge of relevant facts or issues. Sample shall be promptly reimbursed reasonable out-of-pocket expenses incurred by him due to his cooperating with the prosecution or defense of any litigation for the Company as applicable, including but not limited to reasonable attorney’s fees incurred in the furtherance of those actions, provided that he provides the Company with reasonable documentation of such expenses.

4.       ASSIGNMENT . Sample hereby assigns and transfers to the Company any right, title or interest in any inventions, designs, discoveries, works of authorship, creations, ideas, developments, improvements, trade secrets (including, without limitation, trade secrets relating to the Emulsion System or CitraBlend Peel Proceeding System) or software relating to the Business (collectively, “ Inventions ”), that Sample may have as of the date hereof or may have acquired on or before the date hereof, in whole or in part. This obligation is limited to any Inventions that relate to the Company’s Business or demonstrably anticipated business, whether or not the Inventions were created, originated, developed or conceived of by Sample solely or jointly with others and whether or not the Inventions are protected or protectable under applicable patent, trademark, service mark, copyright or trade secret laws. Sample hereby transfers Sample’s rights in such Inventions free of all encumbrances and restrictions, and will promptly take any action, including executing and delivering any documentation, deemed necessary by the Company to effectuate the transfer or prosecution of ownership rights in the United States and any other country as the Company may request. Sample acknowledges and agrees that the Inventions will be considered part of the Confidential Information.

5.       INJUNCTIVE RELIEF; REMEDIES . Sample acknowledges and agrees that any breach or threatened breach by Sample of Section 2, Section 3 or Section 4 of this Agreement will cause irreparable harm and continuing damages to the Company and that the remedy at law for any such breach or threatened breach will be inadequate. Accordingly, in addition to any other remedies that may be available to the Company at law or in equity in such event, the Company shall be entitled to seek and obtain, from any court of competent jurisdiction, an injunction or injunctions, without bond or other security and without having to show that money damages will be inadequate or impossible to determine, enjoining and restricting the breach or threatened breach. Sample acknowledges, however, that no specification in this Agreement of a specific legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable remedies in the event of a breach of this Agreement by Sample.

6.       SEVERABILITY AND JUDICIAL MODIFICATION . If any clause, term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be held invalid or unenforceable, the remainder of this Agreement and the application of such clause, term or provision to persons or circumstances other than those to which it is invalid and unenforceable, shall not be affected thereby, and each clause, term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. If any court of competent jurisdiction refuses to enforce any clause, term, or provision of this Agreement as written, the other clauses, terms, and provisions shall stand, and the court shall modify the clause, term, or provision at issue to the minimum extent necessary to make it enforceable under applicable law, and shall enforce it as so modified.

7.       GENERAL .

(a)     Waivers . No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. No waiver of any provision of this Agreement shall in any event be effective unless the same shall be in writing, executed by the party against whom enforcement of such waiver is sought, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.

(b)    Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The parties may deliver an executed copy of this Agreement or any other document contemplated by this Agreement by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Agreement or such other document.

(c)     Governing Law; Waiver of Jury Trial . This Agreement shall be construed in accordance with and governed by the laws of the State of Florida applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of laws. Each of the parties hereto hereby irrevocably and unconditionally waives any and all right to trial by jury of any claim or cause of action in any suit arising out of or related to this Agreement or the transactions or events contemplated hereby or any course of conduct, course of dealing, statements (whether verbal or written) or actions of any party hereto. The parties hereto each agree that any and all such claims and causes of action shall be tried by the court without a jury. Each of the parties hereto further waives any right to seek to consolidate any such lawsuit in which a jury trial has been waived with any other lawsuit in which a jury trial cannot or has not been waived.

(d)    No Strict Construction . The language used in this Agreement will be deemed to be the language chosen by Sample and the Company to express their mutual intent, and no rule of strict construction will be applied against Sample or the Company.

(e)     Headings . The section and subsection heading of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

8.       DEFINITIONS . For purposes of this Agreement, the following definitions shall apply:

“Business ” means the business of acquiring and processing raw citrus peel into dehydrated citrus ingredients products, milling dehydrated citrus ingredient products, and/or transporting raw citrus peel by truck, including all processes, systems and technology.

“Control” of an entity includes service as a director, officer, partner, manager, executor or trustee (or in a similar capacity) or beneficial ownership of 10% or more of the outstanding equity (or the right to vote or receive profits, dividends or distributions).

Person ” means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated organization, association, joint venture or other entity or a governmental body.

Related Person ” –

(a)              in the case of a natural person, each member of such Person’s immediate family, by blood or by marriage, including spouses, parents, step-parents, siblings, children, and step-children;

(b)             any Person that, directly or indirectly Controls, is Controlled by or is under common Control with, a Person.

Restricted Term ” means the period commencing on the date hereof and ending five (5) years thereafter.

Restricted Territory ” means anywhere in the United States.

 

 
 

 

IN WITNESS WHEREOF , and intending to be legally bound hereby, the parties hereto have caused this Non-Compete and Restrictive Covenant Agreement to be duly executed as of the date and year first above written.

 

 

CITRUS EXTRACTS II, LLC



By: /s/ Alan Koch
Name: Alan Koch

Its: Co-Manager


WILLIAM A. SAMPLE

/s/ William A. Sample
William A. Sample

 

Address: Palm Coast, Florida

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Non-Competition and Restrictive Covenant Agreement]

 

 

 

Diversified Holdings, Inc.

 

July 10, 2015

 

 

To: The Shareholders of Acacia Diversified Holdings, Inc.

 

Dear Ladies and Gentlemen:

 

As a shareholder of record of Acacia Diversified Holdings, Inc. (the “Corporation”) as of June 10, 2015, you are entitled under the Corporation's Bylaws to be provided with notice that a Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting was agreed adopted on June 29, 2015 (the “Resolution”). Pursuant to that Resolution, the following matters were approved by those shareholders representing approximately 68% of the total issued and outstanding common shares of the Corporation. To wit:

 

1) Authorization to consummate a transaction whereby the Corporation sold certain assets and the related businesses of both its wholly-owned subsidiaries, Citrus Extracts, Inc. (“CEI”) and Acacia Transport Services, Inc. (“ATS”), to Citrus Extracts II, LLC (“CEL”) and Citrus Extracts Transport Services, LLC (“CETS”), respectively, for a combined $2,560,814.22 in cash;

 

2) Authorization to employ the proceeds from the sale the assets to extinguish the Corporation's indebtedness and other current financial obligations.

 

3) Election of Steven L. Sample, Danny R. Gibbs, Dan L. Rigdon, and V. Weldon Hewitt to the Company’s Board of Directors to serve a one-year term or until they shall resign or be replaced by their duly-elected successors.

 

4) Authorization to seek new acquisitions and/or business combinations.

 

5) Authorization to terminate the Acacia Diversified Holdings, Inc. 2012 Stock Incentive Plan and to extend the Employment Agreement of the Corporation’s CEO for two years with all other provisions unchanged;

 

6) Authorization to amend Article Eleven of the Corporation's Articles of
 
 

 

 

 

 

Incorporation and Section 2.10 of the Corporation’s Bylaws; and,

 

7) Instructions for the officers of the Corporation to carry out the resolutions that are the subject of the Written Consent, and to have the Amended Articles of Incorporation certified by the Texas Secretary of State.

 

A copy of the Resolution is included herein for your review. Shareholders may also wish to review the Corporation's Current Report on Form 8-K dated July 10, 2015 for further information as it relates hereto. The 8-K can be viewed in its entirety on the United States Securities and Exchange Commission website at www.sec.gov or on the Corporations website at www.acacia.bz and clicking on the “SEC” tab. Should you have any questions, please email the Corporation at investor.relations@acacia.bz or write to:

 

Acacia Diversified Holdings, Inc.

ATTN: Investor Relations

3512 E. Silver Springs Blvd - #243

Ocala, FL 34470

 

Thank you for your continuing support, and be assured that we are working diligently to bring value to the Corporation and to its shareholders.

 

Sincerely,

 

/s/ Steven L. Sample

 

Steven L. Sample, Chairman and CEO

 

ENCL: Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders dated June 29, 2015.

 

 

 

 

 

 

 

 

 

WRITTEN CONSENT BY THE MAJORITY OF THE SHAREHOLDERS OF

ACACIA DIVERSIFIED HOLDINGS, INC.

IN LIEU OF A SPECIAL MEETING OF SHAREHOLDERS

June 29, 2015

Pursuant to Section 6.202 of the Texas Business Organizations Code, the undersigned, being the holders of more than 66.667% of the total issued and outstanding shares of Acacia Diversified Holdings, Inc., Inc., a Texas corporation (the "Corporation"), as of the Record Date of June 10, 2015, and representing the number of votes required to enact the actions taken hereby, declare that upon execution of this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders, the following Resolutions shall then be consented to, approved of, and adopted to the same extent and to have the same force and effect as if adopted at a Special Meeting of the Shareholders of the Corporation duly called and held for the purpose of acting upon proposals to adopt such Resolutions.

I. Board of Directors Ratification of and Recommendation of This Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders

WHEREAS the Corporation’s Board of Director have recommended all the actions to be taken by this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders; and,

WHEREAS The ratification of this Consent by Shareholders of the Corporation may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement, and a signed copy of this Consent delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Consent

NOW THEREFORE, BE IT RESOLVED that the Corporation’s Board of Directors recommends the approval and ratification of the resolutions set forth herein by the majority of the Shareholders of the Corporation, by this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders, by their original signatures hereon or by counterparts.

II. Sale of Certain Assets and the Associated Business of the Subsidiaries of the Corporation

WHEREAS the Corporation’s Board of Directors considers it to be in the best interests of the Corporation to sell the selected assets and the related business of the Corporation’s Citrus Extracts, Inc. subsidiary and its Acacia Transport Services, Inc. subsidiary (together the “Subsidiaries”); and,

Whereas , the Board of Directors recommended to the Shareholders of the Corporation to ratify the sale of any or all of the assets and the related businesses of the Subsidiaries for good and valuable considerations; and,

WHEREAS the Corporation’s Board of Directors has authorized its CEO, on behalf of the Corporation, to enter into a Definitive Asset Purchase Agreement dated as of or about June 29, 2015, to sell the certain assets and the related businesses associated with the Subsidiaries and such other agreements as are necessary to give effect to the sale.

NOW THEREFORE, BE IT RESOLVED , that by recommendation of the Board of Directors of the Corporation, the Shareholders by their actions by this Written Consent of the required number of shareholders, hereby ratify the sale and transfer of the majority of the assets and the businesses of its Subsidiaries under the terms of that certain Asset Purchase Agreement dated as of or about June 29, 2015 and direct the CEO of the Corporation to enter into such agreements as are required to give effect to the sale.

III. Election of Directors

Whereas , the Board of Directors on June 9, 2015, unanimously placed the names of the following directors before this Special meeting of Shareholders such as to recommend their ratification and election by the Shareholders of the Corporation to serve a one year term, or until replaced by their duly-elected successors: V. Weldon Hewitt, Dan Rigdon, and Danny R. Gibbs.

NOW THEREFORE, BE IT resolved , that by recommendation of the Board of Directors of the Corporation, the Shareholders by their actions by this Written Consent of the required number of shareholders, hereby ratify and elect V. Weldon Hewitt, Dan Rigdon, and Danny R. Gibbs as directors of the Corporation to serve a one year term, or until replaced by their duly-elected successors.

IV. Authorization of the Corporation to Seek additional Acquisitions and/or Business Combinations

Whereas , the Board of Directors on June 9, 2015, approved the sale of certain assets of the Corporation’s Subsidiaries and the businesses associated therewith; and,

Whereas , the Board of Directors in those same actions recommended ratification by the Shareholders of the sale of certain assets of the Corporation’s Subsidiaries and the businesses associated therewith; and,

Whereas , the Board of Directors in that same meeting further authorized and directed the Corporation through the efforts of its CEO to seek new business combinations and/or acquisitions to enhance its future business opportunities.

NOW THEREFORE, BE IT resolved , that upon recommendation of the Corporation’s Board of Directors and by the actions of the Corporations Shareholders by this Written Consent of the required number of shareholders, do hereby direct the Corporation, by the efforts of its CEO, to make every reasonable effort to seek new business combinations or acquisitions to enhance its business opportunities, to engage in Letters of Intent to acquire entities or their assets, and to take such actions as to prepare any such acquisition or other business combination for presentation to the Corporation’s Board of Directors for final approval thereof.

V. Authorization to Extinguish all Indebtedness and other Current Financial Obligations of the Corporation

WHEREAS the Corporation has determined that it is in its best interests to extinguish all its current indebtedness and financial obligations to its creditors, vendors and the employees of the Corporation and to provide for ongoing payments to its vendors and employees so as to allow the Corporation to continue as a going and functioning, full-reporting entity with the United States Securities and Exchange Commission and to enhance its future prospects for mergers, acquisitions, or operations.

Whereas , the Board of Directors has approved the extinguishment of debt and obligations and to provide for ongoing payments and recommends these actions to the shareholders of the Corporation for their approval and ratification.

NOW THEREFORE, BE IT resolved that upon the recommendation of the Corporation’s Board of Directors, the Corporation by the actions of its Shareholders by this Written Consent of the required number of shareholders, hereby approves and ratifies, upon closing of the agreement to sell and dispose of certain assets and the related business of its Subsidiaries, and receiving the proceeds from the sale thereof and within the limits of reasonable availability of its capital, by the actions of its CEO to immediately (i) extinguish all its indebtedness to existing creditors of the Corporation; (ii) pay all its obligations to vendors and employees of the Corporation; and, (iii) provide for ongoing payments to its vendors and employees so as to allow the Corporation to continue as a going and functioning entity and as a full-reporting entity with the United States Securities and Exchange Commission and to enhance its future prospects for mergers, acquisitions, or operations.

VI. Termination of Employee Stock Option Plan and Extension of Employment Agreement .

WHEREAS the Corporation’s Board of Directors has determined that it is in the best interests of the Corporation to discontinue its Acacia Diversified Holdings, Inc. 2012 Stock Incentive Plan in its entirety, continuing to honor any shares, options, or warrants heretofore issued under the Plan; and,

WHEREAS the Corporation’s Board of Directors has determined that it has full authority to issue shares, options, and warrants as it deems necessary without Acacia Diversified Holdings, Inc. 2012 Stock Incentive Plan; and,

Whereas , the Board of Directors recommends these actions to the shareholders of the Corporation for their approval and ratification.

 

NOW THEREFORE, BE IT resolved that the Corporation by recommendation of its Board of Directors and by the actions of its Shareholders by this Written Consent of the required number of shareholders, hereby approves and ratifies the immediate discontinuation of the Acacia Diversified Holdings, Inc. 2012 Stock Incentive Plan in its entirety, continuing to honor any shares, options, or warrants heretofore issued under the Plan.

WHEREAS the Corporation’s Board of Directors unanimously determined in actions taken June 9, 2015 that it was in the best interests of the Corporation to extend the current Employment Agreement of its CEO until December 31, 2019, with all other terms and conditions unchanged such as to retain the services of its CEO to continue to guide the Corporation and to assist the Corporation with maintaining its current status with its SEC reporting, to actively seek new acquisitions or business combinations to enhance the Corporation’s future opportunities, and to take such other actions as to assist in keep the Corporation as a going and functioning entity.

Whereas , the Board of Directors recommends these actions to the shareholders of the Corporation for their approval and ratification.

NOW THEREFORE, BE IT resolved that the Corporation by recommendation of its Board of Directors and by the actions of its Shareholders by this Written Consent of the required number of shareholders, hereby approves and ratifies the extension of the current Employment Agreement of its CEO until December 31, 2019, with all other terms and conditions unchanged.

VI. Financial Reporting Relating to This Written Consent of Shareholders

WHEREAS the Corporation’s Board of Directors believes it to be in its best interests to make its financial and other reports available on its corporate website and the website of the United States Securities and Exchange Commission in conjunction with this Written Consent of Shareholders; and,

WHEREAS the Corporation has made available for its shareholders Internet links to its financial information and other reports at the following locations:

http://www.acacia.bz/sec/sec.htm ; and at

http://www.sec.gov/cgi-bin/browse-edgar?company=acacia+automotive&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany .

or may be obtained by writing to the Corporation at:

 

3512 East Silver Springs Boulevard - #243

Ocala, FL 34470

 

and requesting financial or other reports.

 

NOW THEREFORE, BE IT RESOLVED that the Corporation’s financial and other reporting information shall be available to its shareholders via the following Internet links in conjunction with this WRITTEN CONSENT BY THE MAJORITY OF THE SHAREHOLDERS OF ACACIA DIVERSIFIED HOLDINGS, INC. IN LIEU OF A SPECIAL MEETING OF SHAREHOLDERS:

http://www.acacia.bz/sec/sec.htm ; and at

http://www.sec.gov/cgi-bin/browse-edgar?company=acacia+automotive&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany .

or may be obtained by writing to the Corporation at:

 

3512 East Silver Springs Boulevard - #243

Ocala, FL 34470

VII. Ratification of Amendments to the Corporation’s Articles of Incorporation and its Bylaws

WHEREAS, the Corporation’s Board of Directors recommends the shareholders of the Corporation ratify an amendment to change ARTICLE ELEVEN of the Corporation’s Amended and Restated Articles of Incorporation, and the full text of the existing Amendment and the provision changed is as follows:

 

The instrument described above previously stated:

 

ARTICLE ELEVEN

 

Any action required by the Texas Business Organizations Code to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which each shareholder entitled to vote on the action is present and votes, sign a written consent or consents stating the action taken.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code.

 

Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Unless otherwise restricted by these Articles of Incorporation, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Board of Directors. Such consent shall have the same force and effect as a unanimous vote at a meeting. Any such signed consent, or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

That provision is now changed to correctly read:

 

ARTICLE ELEVEN

 

Any action required by the Texas Business Organizations Code to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which each shareholder entitled to vote on the action is present and votes, sign a written consent or consents stating the action taken.

 

With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code. Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

Unless otherwise restricted by these Articles of Incorporation, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Board of Directors. Such consent shall have the same force and effect as a unanimous vote at a meeting. Any such signed consent, or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

NOW THEREFORE BE IT RESOLVED , that the Corporation by recommendation of its Board of Directors and by the actions of its Shareholders by this Written Consent of the required number of shareholders, hereby approves and ratifies the Amendment to the Company’s Articles of Incorporation as set forth above.

WHEREAS, the Corporation’s Board of Directors recommends the shareholders of the Corporation ratify an amendment to Section 2.10 of the Corporation’s Amended and Restated Bylaws, and the full text of the existing Amendment and the provision changed is as follows:

 

The instrument described above previously stated:

 

2.10 Action Without Meeting. Any action required by the Texas Business Organizations Code or other statute to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which shareholders entitled to vote on the action and having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent are present and vote, sign a written consent or consents stating the action taken.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code.

 

Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

That provision is now changed to correctly read:

 

2.10 Action Without Meeting. Any action required by the Texas Business Organizations Code or other statute to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders may be taken without holding a meeting, providing notice, or taking a vote if shareholders having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent at a meeting in which shareholders entitled to vote on the action and having at least the minimum number of votes that would be necessary to take the action that is the subject of the consent are present and vote, sign a written consent or consents stating the action taken.

 

With respect to any matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is required by the Texas Business Organizations Code, including but not limited to the vote required for approval of any fundamental action by the shareholders, the affirmative vote or the written consent of the holders of not less than the majority of the shares entitled to vote on that matter shall be all that is required for shareholder action on that matter and shall be sufficient in all matters requiring the vote of shareholders of the Corporation in accordance with the Texas Business Organizations Code Section 21.365.

 

Any such written consent or consents must include the date each shareholder signed the consent and is effective to take the action that is the subject of the consent only if the consent or consents are delivered to the Corporation not later than the 60th day after the date the earliest dated consent is delivered to the Corporation as required by Section 6.203 of the Texas Business Organizations Code.

 

Any such signed consent or a signed copy thereof, shall be placed in the Minute Book of the Corporation.

 

NOW THEREFORE BE IT RESOLVED , that the Corporation by recommendation of its Board of Directors and by the actions of its Shareholders by this Written Consent of the required number of shareholders, hereby approves and ratifies the Amendment to the Company’s Bylaws as set forth above.

IX. Ratification by the Shareholders of the Corporation of this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders

WHEREAS, the shareholders of the Corporation, in accordance with the recommendations of the Corporation’s Board of Directors desire to ratify each of the actions contained in this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders, having full right and authority to do so, and to have all appropriate sections hereof properly certified and filed with the Secretary of the State of Texas; and,

NOW THEREFORE, BE IT RESOLVED that the Corporation by recommendation of its Board of Directors and by the actions of its Shareholders by this Written Consent of the required number of shareholders, hereby approves and ratifies all of the resolutions contained in this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders and all other actions heretofore adopted and taken as acts of the Company related to the above resolutions by affixing their signatures hereto in executing these actions as their Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders as of June 29, 2015.

BE IT FURTHER RESOLVED that the Secretary of the Corporation is hereby authorized, empowered and directed, for and on behalf of the Company, to execute and file with the Texas Secretary of State any appropriate sections hereof.

The undersigned affirms that the foregoing Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders on June 29, 2015 was duly adopted by the Corporation.

 

Date: June 29, 2015

 

ACACIA DIVERSIFIED HOLDINGS, INC.

 

 

By: _____________________________________

Steven L. Sample, President and CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

SIGNATURE PAGE

TO

WRITTEN CONSENT BY THE MAJORITY OF THE SHAREHOLDERS OF ACACIA DIVERSIFIED HOLDINGS, INC. IN LIEU OF A SPECIAL MEETING OF SHAREHOLDERS

 

The undersigned stockholders of Acacia Diversified Holdings, Inc. hereby adopt the resolutions set forth in this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders of the Corporation having the effective date of June 29, 2015.

 

The Undersigned shareholders of Acacia Diversified Holdings, Inc., having approved of and adopted the foregoing actions as recited and proposed to be resolved, have executed this Written Consent by the Majority of the Shareholders of Acacia Diversified Holdings, Inc. in Lieu of a Special Meeting of Shareholders signifying his/her approval as his/her sole act and deed, and is acceptable either as an original or facsimile of the same upon receipt by the Corporation.

 

This Written Consent is executed by the undersigned Shareholders as of the date affixed beside the signature of each below, and the actual signature of each is on file with the Secretary of the Corporation.

 

Individual Shareholder Consents

 

Signature* Date Signed Common Shares % Printed Name

 

__ /s/ Dan L. Rigdon, Pastor ______ 6/23/2015 30,000 0.236% Abundant Life Church

 

____ /s/ Alice L. Sample ____________ 6/23/2015 160,000 1.256% Alice Sample

 

___ /s/ Patricia Ann Arnold _______ 6/23/2015 85,000 0.667% Patricia Ann Arnold

 

___ /s/ Bracebridge Young ________ 6/23/2015 100,000 0.785% Bracebridge Young

 

___ /s/ Daniel C. Dorsey, Jr. _______ 6/23/2015 72,000 0.565% Daniel Dorsey, Jr.

 

_____ /s/ Dan L. Rigdon _____________ 6/23/2015 12,500 0.098% Dan Rigdon

 

____ /s/ David M. Wilson ___________ 6/22/2015 55,000 0.432% David M. Wilson

 

____ /s/ Edward W. Sample ________ 6/22/2015 100,000 0.785% Edward W. Sample

 

___ /s/ Louis Spiro, Trustee ________ 6/23/2015 185,000 1.450% Louis Spiro Family Trust

 

_______ /s/ Louis Spiro ______________ 6/23/2015 110,000 0.860% Louis Spiro TTEE UA DTD

 

______ /s/ Trevor Spiro _____________ 6/23/2015 110,000 0.860% Trevor Spiro

 

____ /s/ L. Palmer Sample __________ 6/22/2015 206,808 1.620% L. Palmer Sample

 

______ /s/ Argelia Sample ___________ 6/22/2015 50,000 0.392% Argelia Sample

 

__ /s/ Edward W. Sample, Pres. ___ 6/22/2015 208,597 1.638% Red Phoenix

Extracts, Inc.

 

_____ /s/ Steven L. Sample _________ 6/25/2015 5,508,679 43.250% Steven L. Sample

 

____ /s/ Gwendolyn Sample _______ 6/25/2015 937,000 7.360% Gwendolyn G. Sample

 

___ /s/ V. Weldon Hewitt __________ 6/22/2015 110,000 0.864% V. Weldon Hewitt

 

______ /s/ Aadam A. Prario _________ 6/23/2015 17,000 0.130% Aadam A. Prario

 

______ /s/ Aaron L. Prario __________ 6/23/2015 17,000 0.130% Aaron L. Prario

 

______ /s/ Paul D. Femia ____________ 6/23/2015 17,000 0.130% Paul D. Femia

 

_____ /s/ C. Scott Sample ___________ 6/23/2015 167,000 1.310% C. Scott Sample

 

______ /s/ Sheryl Sample ___________ 6/23/2015 70,000 0.550% Sheryl Sample

 

______ /s/ Sheryl Sample ___________ 6/23/2015 25,000 0.190% Scott & Sheryl

Sample JTTEN

 

_____ /s/ Danny R. Gibbs ___________ 6/22/2015 117,500 0.923% Danny R. Gibbs

 

_____ /s/ William A. Sample _______ 6/24/2015 226,000 1.770% William A. Sample

 

_____ /s/ Phil Sadler _______________ 6/24/2015 50,000 00.393% Phil Sadler

 

Grand Total of All Shares Above: 8,632,784** 67.785% = Supermajority Consent

 

Whereas 150,000,000 Common Shares are authorized, of which 12,735,406 are Issued & Outstanding as of the Record Date of June 10, 2015, the Resolutions above are adopted as of the 29 th day of June, 2015.

 

* Actual signatures of the shareholder votes as indicated above were received by the Corporation in the normal course of the Written Consent action and are on file with the Secretary of the Corporation .