EXHIBIT 10.31


 


UNIT PURCHASE AGREEMENT


 


THIS UNIT PURCHASE AGREEMENT (the “Agreement”)
is made and entered into as of this l2th day of May 2004 by and among Obic,
Inc., a Washington corporation (“Seller”), Monterey Pasta Company, a Delaware
corporation (the “Buyer”), CIBO Naturals LLC, a Washington limited liability
company (the “Company” or “CIBO”), and Suekat LLC, a Washington limited
liability company (“Suekat”). Collectively, all parties except CIBO are
referred to as the “Members.”


 


R E C I T A L S


 


A.                                   The Members are members of CIBO.


 


B.                                     The Buyer acquired its membership interest in CIBO
pursuant to an Agreement for Purchase and Sale of Limited Liability Company
Units by and among the Members and CIBO, dated January 28, 2004 (the “Purchase
and Sale Agreement”). Under the terms of the Purchase and Sale Agreement, the
Buyer acquired eighty percent (80%) of the outstanding units of the Company,
and the Seller and Suekat together retained twenty percent (20%) of the
outstanding units for subsequent sale to the Buyer further in accordance with
the terms of the Purchase and Sale Agreement.


 


C.                                     Subsequent to the closing of the Purchase and Sale
Agreement, the Members have determined that it is in their mutual best interest
for the Buyer to acquire from Seller its remaining interest in CIBO
immediately, rather than in accordance with the terms of the Purchase and Sale
Agreement.


 


D.                                    The Members and CIBO further agree that, as a result of
this departure from the Members’ original intentions, it is necessary to amend
the Purchase and Sale Agreement and the Company’s Amended and Restated
Operating Agreement dated January 28, 2004 (the “Operating Agreement”),
that the Parties consent to the withdrawal of Obic as a member of CIBO, and
that the Members further waive certain provisions of the Operating Agreement.


 


E.                                      Suekat is a party to the Agreement for the purposes of
(a) giving its consent to the withdrawal of Seller as a Member of the Company
and (b) waiving the provisions of section 13.1 of the Operating Agreement.
Insofar as they otherwise may apply to the transaction provided for in the
Agreement. Suekat is not a party to the Agreement for any other purpose.


 


AGREEMENT


 


NOW, THEREFORE, based on the foregoing
recitals and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Members and CIBO agree as follows:


 


1.                                       Sale of Units.  Seller agrees to sell and deliver to Buyer
and Buyer agrees to purchase and accept from Seller, free and clear of all
liens, encumbrances or restrictions of any kind or nature whatsoever, except
for those set forth in the Operating Agreement, on the terms and subject to the
conditions set forth in this Agreement, good and marketable title to 83,333
units of the Company, representing all of such units now owned by the Seller
(the “Units”).


 


2.                                       Purchase Price; Closing.  The purchase
price to be paid in consideration for the purchase of the Units shall be Three
Hundred Sixteen Thousand Five Hundred Dollars ($ 316,500) (the “Purchase Price”)
to be paid at Closing (as defined below) in the following manner:


 


a.                                       Buyer shall deliver to Seller cash in the amount of
Three Hundred Sixteen Thousand Five Hundred Dollars ($316,500).


 


c.                                       Seller shall deliver an assignment and transfer of the
Units, in a form acceptable to Buyer’s counsel, to the Buyer.


 


d.                                      Closing shall take place as of the 12th day of May 2004
(the “Closing”).


 


3.                                       Amendment of Other Agreements.  The Members
shall make such changes to the Purchase and Sale Agreement and the Operating
Agreement as they shall deem necessary or desirable in consequence of the sale
of the Units to Buyer.


 


4.                                       Consent and Waiver.


 


a.                                       Acting pursuant to section 5.7 of the Operating
Agreement, the Members consent to the withdrawal of Obic as a member of CIBO,
effective as of the Closing.


 


b.                                      The Members hereby waive the restrictions upon transfer
of units of interest in CIBO set forth in section 13.1 of the Operating
Agreement for the purpose only of the purchase and sale of the Units by the
Buyer and Seller.


 


5.                                       Representations and Warranties of Seller.  The Seller
hereby represents and warrants that:


 





















 


a.               Ownership of
Units.  Seller owns of record and
beneficially the Units and has, and at Closing will have, good and marketable
title to the Units free and clear of all liens, encumbrances or restrictions of
any kind or nature whatsoever, except as set forth in the Operating Agreement.


b.              Delivery of Good
Title.  Upon delivery of the Units
and payment of the Purchase Price therefor pursuant to this Agreement, Buyer
will have good and marketable title to the Units free and clear of all liens,
encumbrances or restrictions of any kind or nature whatsoever, except as set
forth in the Operating Agreement.


c.               Authorization of
Transaction.  Seller has full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder.  This
Agreement constitutes the valid and legally binding obligation of Seller,
enforceable in accordance with its terms and conditions.  Seller need not give any notice to, make any
filing with, or obtain any authorization, consent or approval of any government
or governmental agency in order to consummate the transactions contemplated by
this Agreement.  The execution, delivery
and performance of this Agreement and all other agreements contemplated hereby
have been duly authorized by Seller.


 


5.                                       Representations and Warranties of Buyer and Suekat.  The Buyer and
Suekat hereby each severally represent and warrant, for themselves
and not jointly, that:


 


a.               Authorization of
Transaction.  Each has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.  This Agreement constitutes
the valid and legally binding obligation of each of them, enforceable in
accordance with its terms and conditions. 
Neither of them need give any notice to, make any
filing with, or obtain any authorization, consent or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.  The
execution, delivery and performance of this Agreement and all other agreements
contemplated hereby have been duly authorized by each of them.


 


6.                                       Indemnification.  Each party to this Agreement hereby agrees to
indemnify and hold each other party harmless from any and all liabilities or
damages incurred by each such party arising as a result of any breach of a
representation or warranty made by the indemnifying party.


 


7.                                        Dispute Resolution;
Attorneys’ Fees  In the event of any
dispute or action regarding the interpretation or enforcement of any provision
of this Agreement, or on account of any default under or breach of this
Agreement, any party may submit such dispute to binding arbitration.  Such arbitration shall be conducted in King
County, Washington (or in such other venue as to which the disputants shall
mutually agree), under the commercial rules then prevailing of the American
Arbitration Association.  In the event
that the disputant parties are unable to agree on a single arbitrator, any of
them may apply to a court of competent jurisdiction in the selected venue for
appointment of an arbitrator.  The
decision of the arbitrator shall be final and binding on the disputant parties
and may be entered and enforced in any court of competent jurisdiction.  Unless the arbitrator for good cause
determines otherwise, the mostly prevailing party or parties shall be entitled
to recover from the other disputant party or parties, in addition to any other
relief, all reasonable attorneys’ fees and expenses incurred by the mostly
prevailing disputant or disputants in connection with such arbitration
proceedings.


 


6.                                       Binding Effect: Governing Law.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. 
This Agreement shall be governed and interpreted under the laws of the
State of Washington.


 


7.                                       Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
shall constitute part of a single Agreement. The parties agree that the Closing
may take place on the basis of faxed executed copies of this Agreement and
related agreements, with original signed copies to be distributed afterwards.


 


IN WITNESS WHEREOF, the parties hereto have
duly executed this Agreement as of the date first set forth above.


 


	
  OBIC, INC.

  	
  SUEKAT LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Debra Neace

  	
   

  	
  By:

  	
  /s/ Jamie Colbourne

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  President

  	
   

  	
  Its:

  	
  Manager

  	
   

  
	
   

  	
   

  
	
  MONTEREY PASTA COMPANY

  	
  CIBO NATURALS LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ James M. Williams

  	
   

  	
  By:

  	
  /s/ James M. Williams

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  President

  	
   

  	
  Its:

  	
  President