AMENDED FINAL JUDGMENT
GREGG COSTA, Circuit Judge.*
Plaintiff Bear Ranch, LLC brought five claims against defendants HeartBrand Beef, Inc., The American Akaushi Association, Inc., and Ronald Beeman. Counter-Claimants HeartBrand and Beeman bought six claims against Bear Ranch. Prior to trial, the court made the following rulings:
• On November 26, 2013, the Court dismissed Bear Ranch's claim for a declaratory judgment concerning its defense of fraudulent inducement of contract (Claim 2). Dkt. #70.
• On March 18, 2014, the Court ruled on Bear Ranch's motion for summary judgment. Dkt. #91. Specifically, the Court:
• granted partial summary judgment to Bear Ranch on its declaratory claim that the Full-Blood Contract restrictions from July 2010, with the exception of certain provisions, do not apply to the cattle purchased from Spears, Beeman, and Twinwood (Claim 4);
• granted summary judgment to Bear Ranch on HeartBrand's claims regarding alleged misrepresentation about Bear Ranch's purpose in acquiring the cattle, while reserving rulings on other alleged misrepresentations (Counterclaims 1 and 5);
• granted summary judgment to Bear Ranch on Beeman's fraud claim (Counterclaim 2); and
• granted summary judgment to Bear Ranch on HeartBrand's contract claim relating to failure to sell offspring to HeartBrand, but ruled that other alleged breaches relating to AAA registration, enrollment, reporting, and rules remained (Counterclaim 6).
On May 16, 2014, the Court called this case for trial as to the parties' remaining claims. Plaintiff Bear Ranch and defendants HeartBrand, American Akaushi Association, and Beeman appeared and announced ready for trial. Having determined that it had jurisdiction over the subject matter and the parties in this case, the Court impaneled and swore in the jury, which heard the evidence and arguments of counsel.
• On May 27, 2014, the Court dismissed Bear Ranch's contract claim against HeartBrand (Claim 3). Minute Entry of 5/27/14.
The Court then submitted questions, definitions, and instructions to the jury, but not with regard to defendant American Akaushi Association. In response, the jury made findings, including advisory findings, that the Court received, filed, and entered of record. The jury found in response to the Court's questions that:
• HeartBrand did not fraudulently induce Bear Ranch to agree to the Heart Brand purchase;
• Bear Ranch did not fraudulently induce HeartBrand to enter into the 2010 Agreements;
• Bear Ranch did fraudulently induce HeartBrand's approval of the Beeman Purchase;
• Bear Ranch did not fraudulently induce HeartBrand to approve the Twinwood Purchase;
• Bear Ranch was unjustly enriched by purchasing cattle in 2011 from Beeman in the amount of $23,199,000;
• Harm to HeartBrand resulted from fraud by Bear Ranch by clear and convincing evidence with respect to the Beeman purchase, and $1,825,000 was an appropriate punitive remedy for that conduct;
• Bear Ranch failed to comply with the 2010 Full-Blood Contract or F-1 Program Contract;
• Bear Ranch's failure to comply was not excused; and
• Bear Ranch spent certain reasonable amounts acquiring, producing, and maintaining the cattle from the various cattle purchases, including:
• Akaushi cattle that Bear Ranch acquired in the HeartBrand Purchase and any offspring of those animals: $6,034,000;
• Akaushi cattle that Bear Ranch acquired in the Beeman Purchase and any offspring of those animals: $6,832,000;
• Akaushi embryos in Bear Ranch's possession: $90,000; and
• Straws of Akaushi semen in Bear Ranch's possession: $160,000.
The Court then ruled on HeartBrand's requested equitable remedies, sitting as a finder of fact. Dkt. #240.
Pursuant to the Court's pretrial rulings, the jury verdict, and the Court's ruling on HeartBrand's equitable remedies, it is ORDERED, JUDGED, and DECREED that:
1. The Court orders that Bear Ranch take nothing by its suit against the Defendants, including its claims that: (i) Defendants fraudulently induced Bear Ranch to enter into the Full Blood Contract (attached as Exhibit 1) and F1 Program Contract (attached as Exhibit 2), executed by Bear Ranch and HeartBrand on July 8, 2010; (ii) Bear Ranch has a defense of fraudulent inducement that defeats any enforcement by Defendants of any contract with Bear Ranch; and (iii) Defendants breached the terms of the Full Blood Contract and F-1 Program Contract.
2. The Court declares that the Full Blood Contract and F-1 Program Contract do not of their own force apply to cattle purchased by Bear Ranch from Tony Spears, Ronald Beeman, and Twinwood Cattle Company, Inc. However, equitable remedies pertaining to these cattle are addressed below.
3. Based on the jury's verdict, Bear Ranch is liable for fraudulent inducement committed against HeartBrand in connection with Bear Ranch's 2011 purchase of full-blood Akaushi cattle from Beeman.
4. The Court orders the imposition of a constructive trust over the "Beeman Cattle,"1 Bear Ranch will hold these cattle in constructive trust for HeartBrand, which will have an equitable claim to the cattle, and Bear Ranch will surrender the cattle to HeartBrand upon receipt of payment for Bear Ranch's costs. The trial record reflects there were 1,800 head of cattle from the 2011 Beeman sale, and the jury found that the buy-back price, reflecting the reasonable amount of acquiring, producing, and maintaining these cattle, was $6,832,000, or $3,796 per head. HeartBrand will pay to Bear Ranch by wire transfer $3,796 per head, plus the maintenance costs detailed below, simultaneously with the transfer of title of the cattle. The parties will split the cost of transporting the cattle from Bear Ranch's facilities in Colorado and Texas.
5. If HeartBrand does not wish to reacquire the cattle on these terms, the Court authorizes a judicial sale or auction process, to be completed within 180 days from the date of this order. HeartBrand will be able to determine whether its standard contractual restrictions apply. Proceeds from the judicial sale or auction up to $3,796 per head, plus the maintenance costs detailed below, will be paid to Bear Ranch, with any proceeds above that amount paid to HeartBrand. In the event that HeartBrand does not wish to either reacquire the Beeman Cattle on the terms described in Paragraph 4 or does not wish to proceed with a judicial sale or auction of the Beeman Cattle, the Beeman Cattle will remain in Bear Ranch's possession with HeartBrand maintaining a constructive trust over the sale of any cattle as described below in paragraph 15.
6. The Court further orders that HeartBrand shall recover exemplary damages from Bear Ranch in the amount of ONE MILLION, EIGHT-HUNDRED-TWENTY-FIVE THOUSAND AND NO/100THS DOLLARS ($1,825,000). HeartBrand may elect to credit this amount against any amount due under paragraph 9 by written notice to Bear Ranch. Post-judgment interest shall accrue on this amount, at the rates set forth in 28 U.S.C. § 1961(a), from the date of this judgment to the date the amount is paid or credited.
7. Based on the jury's verdict, Bear Ranch is liable for breach of the 2010 Full-Blood Contract and the 2010 F1 Program Contract, each executed by Bear Ranch and HeartBrand on July 8, 2010.
8. As a remedy for its breaches, no later than the sixtieth day after this judgment is signed, Bear Ranch shall deliver to HeartBrand the 2010 cattle and their offspring; the straws of semen and embryos identified on the attached Exhibit A; all DNA samples taken from any of those animals, semen, or embryos; and all "Cattle Records"2 pertaining to any of those animals, semen, or embryos.
9. For the items described in paragraph 8, HeartBrand shall pay to Bear Ranch, in the manner described in paragraph 13, the following amounts:
a. $3,898/head of cattle based on the jury's finding as to amounts Bear Ranch reasonably spent acquiring, producing, and maintaining the 2010 cattle and their offspring that were living as of March 31, 2014;3
b. $90,000.00, based on the jury's finding as to amounts Bear Ranch reasonably spent acquiring, producing, and maintaining Akaushi embryos;
c. $160,000.00, based on the jury's finding as to amounts Bear Ranch reasonably spent acquiring, producing, and maintaining Akaushi semen; and
d. Additional maintenance costs of $525 for each mature bull and for each mature cow not in production.4
10. The Court orders that the deliveries described in paragraph 8 shall be
made to HeartBrand's ranch located at 732 Jeff Davis Road, Harwood, Texas 78632, or another location or locations to be determined by HeartBrand.5 Bear Ranch will pay the cost of transporting the animals.
11. As to any animal or genetics delivered pursuant to paragraph 8 that arrives at the delivery point in a condition other than a good merchandising physical condition, or which is determined within 90 days after delivery to have a disease or health defect affecting the animal's suitability as a breeding or feeding animal, or to not be full-blood Akaushi, HeartBrand may refuse to take delivery of or revoke acceptance of said animal or genetics. Such animals or genetics shall be returned to Bear Ranch at Bear Ranch's election and at its sole expense. Any payments made by HeartBrand for such animals or genetics shall be refunded within 30 days, or may be credited against remaining amounts owed by HeartBrand to Bear Ranch at HeartBrand's option.
12. The Court further orders that until such time as the items described in paragraph 8 are delivered, that Bear Ranch take at its own cost all commercially reasonable steps to care for and preserve the animals, genetics, and data in its possession that are subject to delivery, and shall do so in a commercially reasonable fashion. HeartBrand shall be entitled to inspect the cattle during ordinary business hours to verify that Bear Ranch has taken such commercially reasonable steps beginning from the time this judgment is signed to the time any deliveries contemplated herein occur.
13. HeartBrand shall pay the amounts specified in paragraph 9 on the following schedule: 50% of the amount due shall be paid within three business days after delivery; and the remaining 50% shall be paid no later than 120 calendar days after delivery.
14. As to all surviving "Twinwood Cattle,"6 or "Spears Cattle,"7 remaining in Bear Ranch's possession now or in the future ("Covered Cattle"), the Court finds that unrestricted sales of those cattle will undermine the integrity of HeartBrand's Akaushi program, causing irreparable injury to HeartBrand, and would also result in Bear Ranch being unjustly enriched on all the cattle it has obtained, including the 2011 Cattle it obtained under fraudulent pretenses. Accordingly, the Court orders that Bear Ranch (and its officers, agents, servants, employees, attorneys, and other persons who are in active concert or participation with them with actual notice of this judgment) shall be and hereby are permanently required to abide by any restrictions included in the 2010 Full-Blood Contract (attached as Exhibit C) and 2010 F1 Program Contract (attached as Exhibit D) with respect to the Covered Cattle. Specifically, and without limiting the foregoing:
a. Bear Ranch is permanently enjoined from selling, leasing or giving any of the Covered Cattle to any party other than HeartBrand.8
b. Bear Ranch is permanently enjoined from allowing any third party to use the Covered Cattle for any purpose without the express written permission of HeartBrand.9
c. Bear Ranch is required to register Covered Cattle with the American Akaushi Association and enroll them in the Whole Herd Reporting System.10
d. Bear Ranch is required to comply with the Rules of the American Akaushi Association, including payment of assessments due under those rules.11
e. Bear Ranch is required to submit to the American Akaushi Association DNA results for each calf produced from the Covered Cattle.12
15. As to all remaining Beeman Cattle or "Beeman Cattle Offspring,"13 (that is, any that HeartBrand chooses to not purchase or sell at auction), HeartBrand will maintain a constructive trust over the proceeds of any sales of such cattle. Those cattle may be sold without the restrictions. Any amounts Bear Ranch receives for such cattle above $3,796 per head, plus maintenance costs described herein, shall be paid to HeartBrand within 30 days of the sale.
16. The Court retains jurisdiction of this matter for the purpose of overseeing the relief described in paragraphs 8 through 15. The Court may appoint a special master if substantial disputes arise concerning the enforcement of this judgment.
17. Bear Ranch will pay HeartBrand $3,259,972.93 in attorneys' fees and costs. HeartBrand may file another fee request if successful on appeal.
18. The amount awarded pursuant to paragraph 17 shall accrue post-judgment interest at the rates set forth in 28 U.S.C. § 1961(a) from the date of the award to the date the amount is paid.
19. The Court orders execution to issue for this judgment.
20. The Court denies all relief not granted in this judgment.
21. This is a FINAL JUDGMENT.
EXIBIT 1
FULL-BLOOD CONTRACT
This Agreement is entered into by and, between BEAR RANCH, LLC (hereinafter eferred to as "PRODUCER") of _____________________ County, Texas and HEARTBRAND BEEF, INC. (hereinafter referred to as "HEARTBRAND") of Yoakum, Lavaca County, Texas.
WITNESSETH
WHEREAS, a small number of Full-Blood Akaushi cattle were exported from Japan approximately 15 years ago. These are the only Full-Blood Akaushi cattle known to have been exported form Japan. HEARTBRAND is the sole owner of Akaushi Full-Blood cattle exported from Japan; and
WHEREAS, PRODUCER is interested in participating in a Full-Blood program to create and market Full-Blood Akaushi cattle; and
WHEREAS, HEARTBRAND and PRODUCER desire jointly to promote the raising of Akaushi cattle and the marketing of meat from such cattle outside of Japan so that the Akaushi breed of cattle may grow in stature and number to the mutual economic benefit of HEARTBRAND and PRODUCER as owners of Akaushi cattle; and
WHEREAS, HEARTBRAND and PRODUCER desire that HEARTBRAND'S preeminent position as the owner of Akaushi genetics outside of Japan be recognized and preserved. Accordingly, this Agreement contains certain restrictions and other provisions intended to protect HEARTBRAND'S position.
NOW, THEREFORE, for and in consideration of the premises, and other good and valuable consideration described herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
I.
Sale of Breeding Stock
HEARTBRAND will sell to PRODUCER Twenty-Four Full-Brood Akaushi Bulls and Fourt Hundred (400) Full-Blood bred Akaushi Females, subject to the promises and conditions contained herein. PRODUCER agrees that it will never sell, lease or give any Full-Blood Akaushi animal purchased pursuant to this agreement or any off-spring thereof to any party other than HEARTBRAND. PRODUCER further agrees that it will not allow any third party to use any Full-Blood Akaushi animal purchased pursuant to this agreement for any purpose without the express written permission of HEARTBRAND.
I.
Price
PRODUCER will pay to HEARTBRAND the sum of Ten Thousand and no/100 Dollars ($10,000.00) for each Full-Blood Akaushi bull purchased by PRODUCER from HEARTBRAND. PRODUCER will pay to HEARTBRAND the sum of Five Thousand arid no/100 Dollars ($5,000.00) for each Full-Blood bred Akaushi Female purchased by PRODUCER from HEARTBRAND.
III.
Delivery Location
PRODUCER shall pick up the cattle at the HeartBrand Ranch located near Harwood, Texas.
IV.
Warranty
HEARTBRAND'S SOLE WARRANTY IS THAT ALL FULL-BLOOD AKAUSHI CATTLE SELECTED BY HEARTBRAND ARE HEREBY SOLD TO PRODUCER. ALL FULL-BLOOD AKAUSHI ARE IN GOOD PHYSICAL CONDITION. HEARTBRAND DOES NOT WARRANT THAT THE CATTLE ARE FIT FOR A PARTICULAR PURPOSE. PRODUCER AGREES THAT THE PRODUCER WILL MAKE ALL ARRANGEMENTS FOR SHIPPING OF THE CATTLE. ALL EXPENSE OF SHIPPING WILL BE PAID BY PRODUCER AND ALL RISKS ASSOCIATED WITH SHIPPING WILL BE BORN BY PRODUCER. HEARTBRAND DOES NOT WARRANT NOR GUARANTEE THAT USE OF A PARTICULAR BULL OR FEMALE WILL RESULT IN THE PRODUCTION OF A CALF.
V.
American Akaushi Association
PRODUCER agrees that as soon as practical all offspring produced by using any of the cattle purchased (hereinafter referred to as the "Akaushi cattle") by this agreement will be registered with the American Akaushi Association (Rule 102) and enrolled in their Whole Herd Reporting System. PRODUCER agrees that at all times PRODUCER will comply with the Rules of the American Akaushi Association,
VI.
Full-Blood Offspring
HEARTBRAND agrees that it will purchase all Full-Blood calves produced by using the Akaushi cattle at a price of Eight Hundred Dollars ($800.00) for a 500 pound minimum weaned calf and One Thousand Eight Hundred Dollars ($1,800.00) for a finished 1500 pound animal offered for sale to HEARTBRAND by PRODUCER.
VII.
Full-Blood Offspring
PRODUCER agrees that it will either keep the Full-Blood Offspring of the Akaushi Cattle in order to grow its herd or advise HEARTBRAND of its desire to sell a Full-Blood Akaushi animal, HEARTBRAND will either purchase the offspring pursuant to Paragraph VI above or will attempt to sell the animal to a member of the American Akaushi Association in such a way as to obtain the highest price possible. This may be done either by an auction or private treaty at the sole discretion of HEARTBRAND. PRODUCER shall have the right to set a minimum price on its animals. If HEARTBRAND is unable to obtain the minimum price, the animal will be returned to PRODUCER. PRODUCER agrees to pay HEARTBRAND a commission equal to 10% of the price received for the sale of the offspring.
HEARTBRAND will have the right to purchase any superior sire from PRODUCER for a price of Fifteen Thousand and no/100 Dollars ($15,000,00), HEARTBRAND will have the right to purchase any superior female from PRODUCER for a price of Ten Thousand and non 00 Dollars ($10,000.00).
VIII.
Semen
HEARTBRAND has formed a Texas corporation named Akaushi Semen International, Inc. This corporation will supervise the sale of all sales of semen from Full-Blood Akaushi Bulls derived from the bulls owned by HEARTBRAND or their progeny. In so doing, Akaushi Semen International, Inc. will be responsible for the costs of the collection of the semen, the marketing of the semen, ail pricing and the collection of the prices paid for the semen. All proceeds from the sale of the semen will be paid prorata to the stockholders of Akaushi Semen International, Inc. after deducting all costs for the operation of the corporation. HEARTBRAND will be paid its actual cost for obtaining of each straw HEARTBRAND will own fifty-one percent (51%) of the outstanding common stock of Akaushi Semen International, Inc. PRODUCER will own Four percent (4%) of the outstanding common stock of Akaushi Semen international, Inc. The remaining ___________ percent (____%) of the outstanding stock of Akaushi Semen International, Inc. will be sold to as yet undetermined parties that will purchase Full-Blood Akaushi cattle from HEARTBRAND. No semen will be collected from any bull not owned by HEARTBRAND except for in herd use. All Full-Blood producers, including PRODUCER, will be allowed to purchase semen for internal use at a price of Ten and no/100 Dollars ($10.00) per straw.
IX.
Future Producers
The ownership of Akaushi Semen International, Inc. shall be limited to the owners of the first Ten Thousand (10,000) full-blood cows produced by HEARTBRAND. HEARTBRAND will own the first Five Thousand One Hundred Full-blood cows which result in the ownership by HEARTBRAND of fifty-one percent (51%) of the outstanding stock of Akaushi Semen International, Inc. No PRODUCER may acquire more than twenty-five per cent (25%) of the outstanding stock of Akaushi Semen International, Inc. PRODUCER will acquire one percent of the outstanding stock of Akaushi Semen International, Inc. for each one hundred Full-blood cows purchased from HEARTBRAND from the original Ten Thousand (10,000) Full-blood cows.
X.
Data
PRODUCER shall be responsible for all DNA related expenses incurred by them required by HEARTBRAND. PRODUCER shall submit DNA results for each calf more than 30 days before the calf's weaning. Both parties will share all data on all programs rising from this agreement. PRODUCER agrees that PRODUCER will secure all data pertaining to this program and guarantee that it will not be released to any other party without the express written permission of HEARTBRAND. Each calf produced pursuant to this agreement shall by documented by PRODUCER as a Full-Blood by using DNA analysis,
XI.
Warranty
PRODUCER warrants that all cattle sold to HEARTBRAND, pursuant to this agreement, are in good merchandizing physical condition. Any animal which either is not in a merchandisable condition or has a physical defect will be purchased by HEARTBRAND at a discounted price to be agreed upon by the parties on a case by case basis. In the event that the parties are unable to reach an agreement, the respective prices shall be submitted to _________ who will determine the price using the two prices as the outside parameters for sale price determination.
XII.
Care of Calves
While any calves born under this program are in the possession of PRODUCER, PRODUCER will insure that the calves remain in good condition and receive the required vaccinations and health regimen as prescribed. No calf will be given any growth implant of any kind at any time.
XIII.
Payment
All sums due and owing to HEARTBRAND under this agreement shall be paid at 404 Airport Drive, Yoakuin, Texas in United States Dollars before 5:00 p.m. on the date that the sum is due. All sums owed by HEARTBRAND under this agreement shall be paid to the business address of PRODUCER set forth below in United States Dollars before 5:00 p.m. on the date that the sum is due. Any sum shall be deemed to be timely paid if it is placed in the United States Mail before the time that it is due in a properly addressed and adequately stamped envelope,
XIV.
Liens
PRODUCER agrees that it will not allow an encumbrance or lien on any of the cattle under this agreement arid that it has good and merchantable clear title on all cattle transferred under this agreement.
XV.
Marketing
Regardless of the source of the cattle, PRODUCER will at no time market any of the cattle or beef sold by PRODUCER to any party for any purpose at any time as having unique health benefits similar to those of Akaushi beef or as having been derived from Akaushi cattle. This agreement shall survive this agreement and continue for a period of fifty(50) years after the termination of this agreement, regardless of the reason or cause for the termination of this agreement.
XVI.
Remedies for Breach
In the event of a breach of any of the provisions of this Agreement by PRODUCER, HEARTBRAND shall be allowed to entitled to obtain injunctive relief to insure that it obtains possession of all cattle described in this agreement and to prevent PRODUCER from delivering any data obtained under this agreement to any party and to enforce all other provisions of this agreement. PRODUCER understands and agrees that the data and genetics of this agreement are confidential trade secrets which can only be protected by injunctive relief. In addition, PRODUCER understands that the unique nature of the Akaushi cattle and their reputation in the community is an essential element in the value of the cattle and the business of HEARTBRAND. Accordingly, in addition to all of the relief described above, HEARTBRAND shall be entitled to recover damages from PRODUCER in amount equal to the amount that the value of the unique Akaushi brand and the sole control of the brand by HEARTBRAND has been reduced. In the event that the breach is the failure of PRODUCER to pay a sum due and owing under this agreement and HEARTERAND, PRODUCER agrees to pay interest on such sum at the maximum interest rate allowed by law. PRODUCER further agrees that it will reimburse HEARTBRAND all of its reasonable attorney fees and any other costs incurred in enforcing the terms of this agreement.
XVII.
HEARTBRAND Termination
HEARTBRAND may terminate this Agreement, with cause, upon six (6) months advance written notice to PRODUCER in the event that PRODUCER violates the rules of the American Akaushi Association or the terms of this agreement. Upon receipt of the written notice, PRODUCER may avoid the termination if PRODUCER is able to bring its position into compliance within thirty (30) days of receipt of the written notice.
XVIII.
PRODUCER Termination
PRODUCER understands and agrees that in the event it decides to terminate this agreement, PRODUCER will notify HEARTBRAND in writing six (6) months in advance of any termination date and transfer all data and cattle to HEARTBRAND for the consideration set forth in this agreement.
XIX.
Non-Exclusive
Notwithstanding anything to the contrary contained in this Agreement, the parties hereto expressly acknowledge and agree that HEARTBRAND shall be free, during the term of this Agreement and at its sole discretion, to contract with one or more third parties of its own choosing for any service described in this agreement.
XX.
Miscellaneous
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors in interest, The validity of this Agreement and any of its terms or provisions, as well as the rights and duties of the parties hereunder, shall be governed by the laws of the State of Texas. Further, the parties agree that this Agreement is partly performable in Lavaca County, Texas and that the sole and exclusive venue far any dispute directly or indirectly arising out of this Agreement is Lavaca County, Texas, Each party hereby irrevocably and unconditionally consents to the jurisdiction of the courts of Lavaca County, Texas and hereby irrevocably and unconditionally waives any defense of an inconvenient form to the maintenance of any action or proceeding in any such court, any objection to venue with respect to any such action or proceeding, and any right of jurisdiction on account of the place of residence or domicile of any party thereto. This Agreement supersedes any and all other agreements, oral or in writing, between the parties hereto with respect to the subject matter hereof and no other agreement, statement, or promise related to the subject matter of this Agreement which is not contained herein shall be valid or binding. This Agreement may be amended or modified at any time and in all respects only by an instrument in writing executed by both parties hereto. No oral modification shall be effective. If any legal action is brought to enforce this Agreement by either of the parties hereto, it is expressly agreed that the prevailing party in such legal action shall be entitled to recover from the other party reasonable attorney's fees, expenses, and costs. If one or more of the provisions of this Agreement shall be held unenforceable, invalid, or illegal in any respect, such unenforceability, invalidity, or illegality, shall not affect any other provision or this Agreement, which shall be construed as if such unenforceable, invalid, or illegal provision had never been a part hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands on the dates set forth below,
HEARTBRAND BEEF, INC. BEAR RANCH, LLC. (Producer
BY ____________________________ BY:_________________
Dr. Antonio Elias Calles, President __________________
404 Airport Drive. 30482 Cty, Road 12 (Adress)
Yoakum, Texas 77995 Somerset, CO 81434
DATE 7-8-10 DATE: 7/8/10
July 1, 2010
Bear Ranch, LLC
30682 County Road 12
Somerset, CO 81434
Akaushi Fullblood Proposal
100 Pregnant Fullblood Akaushi Cows $ 500,000.00
100 Fullblood Akaushi cows with calves on the side 600,000.00
12 Fullblood Akaushi Bulls 120,000.00
10,000 Units of Ful'blood Alcaushi semen 100,000.00
Grand Total $ 1,320,000.00
Akaushi Fullblood Purchase Option
Note: The purchase of these additional 200 cows and 12 bulls is only valid For the following three months after the initial purchase.
200 Pregnant Fullblood Akaushi Cows $ 1,000,000.00
12 Fullblood Akaushi Bulls 120,000.00
Grand Total $ 1,120,000.00
Fullblood Meat Offer
Bear ranch can purchase all Akaushi meat and related meat products at shareholder price depending on availability at the time of purchase.
Room and Board Provided by HeartBrand
In the exclusive event that Bear Ranch will request to leave any of the Akaaushi Fullblood animals on HeartBrand properties for a transitional period of time, HeartBrand will manage those animals according to the best animal husbandry practices for a total of $25.00 (twenty five dollars 00/100) per animal unit per month,
EXHIBIT 2
F1 Program Contract
This Agreement is entered into by and between BEAR RANCH, LLC ("PRODUCER") of _______, ____ County, CO, and HEARTBRAND BEEF, INC. (jointly referred to as "HEARTBRAND") of Yoakum, Lavaca County, Texas.
WITNESSETH
WHEREAS, a small number of Full-Blood Akaushi cattle were exported from Japan approximately 15 years ago. These are the only Full-Blood Akaushi cattle known to have been exported form Japan. HEARTBRAND is the sole owner of these Akaushi Full-Blood cattle exported from Japan; and
WHEREAS, PRODUCER is interested in participating in a F-1 breeding program to produce cross-bred cattle with Fullblood Akaushi bulls or semen from Fullblood Akaushi bulls; and
WHEREAS, HEARTBRAND and PRODUCER desire jointly to promote the raising of Akaushi cattle and the marketing of meat from such cattle outside of Japan so that the Akaushi breed of cattle may grow in stature and number to the mutual economic benefit of HEARTBRAND and PRODUCER as owners of Akaushi cattle; and
WHEREAS, HEARTBRAND and PRODUCER desire that HEARTBRAND'S preeminent position as the owner of Akaushi genetics outside of Japan be recognized and preserved. Accordingly, this Agreement contains certain restrictions and other provisions intended to protect HEARTBRAND'S position.
NOW, THEREFORE, for and in consideration of the premises, and other good and valuable consideration described herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
I.
Sale of Semen.
AKAUSHI SEMEN INTERNATIONAL, INC. will sell to PRODUCER straws of semen from Fullblood Akaushi bulls.
II.
Price
At the time of the delivery of the semen to PRODUCER, or its assign, at Elgin Breeding Service, PRODUCER will pay to AKAUSHI SEMEN INTERNATIONAL, INC. for each straw purchased by PRODUCER from AKAUSHI SEMEN INTERNATIONAL, WC.
III.
Delivery Location
PRODUCER agrees that the semen will be obtained from Elgin Breeding Service at its main location in Elgin, Texas and producer will make all arrangements for shipping of the semen, if any. All expenses of shipping will be paid by producer and all risks associated with shipping will he horn by producer.
IV.
Warranty
HEARTBRAND'S SOLE WARRANTY IS THAT A FULLI3LOOD AKAUSHI BULL SELECTED BY HEARTBRAND WAS PROVIDED TO ELGIN BREEDING SERVICE FOR THE HARVESTING OF FULLBLOOD AKAUSHI SEMEN. HEARTBRAND DOES NOT WARRANT THAT THE SEMEN IS FIT FOR A PARTICULAR PURPOSE. HEARTBRAND DOES NOT WARRANT NOR GUARANTEE THAT A PARTICULAR SEMEN WILL RESULT IN THE PRODUCTION OF A CALF.
V.
Sale or Lease of Bulk's)
HEARTBRAND will sale/lease to PRODUCER Fullblood Akaushi Bulls,
VI.
Use of Semen/Bull(s)
PRODUCER agrees that it will use the semen/bull(s) solely for the impregnation of PRODUCER'S cows for the production of terminal calves or replacement females.
VII.
American Akaushi Association
PRODUCER agrees that as soon as practical all calves produced using the semen/bull(s) will be enrolled with the American Akaushi Association's Whole Herd Reporting system for the purpose of collecting data. PRODUCER agrees that at all times PRODUCER will comply with the Rules of the American Akaushi Association.
VIII.
Male Fl Calves
PRODUCER agrees that as soon as practical, PRODUCER will castrate all male calves produced under this contract which are the subject of this agreement. PRODUCER agrees that all male calves gathered will be castrated before or at weaning. PRODUCER agrees to sell all calves produced by the semen/bull(s) under this agreement to a buyer approved by HEARTBRAND. PRODUCER may keep the calf (or partner at a 50/50 undivided interest at a determined price), feed it and sell it to a packer approved by HEARTBRAND.
During the first two weaning cycles, if PRODUCER does not realize a net of $50 per calf increased value, due to using Akaushi genetics (includes the market or sale price) at weaning, HARTMAND will provide semen rebate equal to 2 units for calf produced for each year that a net premium was not realized. This is for in herd use only.
If PRODUCER has purchased or leased a bull from HEARTBRAND, HEARTBRAND will pay. PRODUCER a rebate of $1,000 per year for each of the first five (5) years after the purchase or lease that PRODUCER does not realize a net of $50 per calf increased value due to using Akaushi genetics (includes the market or sale price) at weaning.
PRODUCER shall abide by all the rules of the American Akaushi Association with regard to all eligible male calves owned or controlled by PRODUCER.
IX.
Female Calves
For all female calves produced from semen/bull(s), PRODUCER will at weaning either (1) sell to a buyer approved by HEARTBRAND or (2) will retain the female calf. If PRODUCER retains the female calf, PRODUCER will enroll said calf in the American Akaushi Association's Upgrading Program and shall abide by all the rules of the American Akaushi Association,
X.
Data
PRODUCER shall be responsible for all DNA related analysis expenses incurred by any party. PRODUCER shall submit DNA data for each calf more than 30 days before the calf's weaning. Both parties will share all cross terminal data on all programs rising from this agreement. PRODUCER agrees that PRODUCER will secure all data pertaining to this program and guarantee that it will not be released to any other party without the express written permission of HEARIBRAND. Each calf produced pursuant to this agreement shall be documented by PRODUCER as a first cross by using DNA analysis.
XI.
Warranty
PRODUCER warrants that all calves sold to HEARTBRAND, pursuant to this agreement, are in good merchandizing physical condition. Any calf which either is not in a merchandisable condition or has a physical defect will be purchased by IlEARTBRAND at a discounted price to be agreed upon by the parties on a case by case basis. In the event, that the parties are unable to reach an agreement, the respective prices shall be submitted to an agreed third party who will determine the price using the two prices as the outside parameters for his, analysis.
XII.
Care of Calves
While any calves born under this program are in the possession of PRODUCER, PRODUCER will insure that the calves remain in good condition and receive the required vaccinations as they are prescribed. No calf will be given any growth implant of any kind.
VIII
Clean-up Pragram — (Applies Semen Purchase Oral
In addition to the semen described herein, HEARTBRAND agrees that it will provide (at a mutually agreed upon price) one Akaushi bull selected by HEARTBRAND in its sole discretion for every 100 cows. This obligation is subject to the availability of satisfactory bulls for this program. HEARTBRAND agrees that all bulls selected hereunder will be tested prior to delivery to PRODUCER and will be certified to be in good health and free of disease. PRODUCER agrees that every bull in its care will be maintained in good health and good physical condition. PRODUCER further agrees that the bull shall not be used for any purpose other than the clean-up of the 100 cows specified herein. For the bulls used under this provision, PRODUCER agrees to pay to HEARTBRAND the sum agreed upon for each bull for the predetermined lease period as set forth in the "Lease Agreement". If it is necessary to slaughter a bull because it becomes infected with a venereal disease or an infectious disease while it is under the control of PRODUCER or if a bull dies as a result of the negligence of PRODUCER, PRODUCER shall pay HEARTBRAND a prorated amount equal to the remaining lease agreement. PRODUCER shall he responsible for all costs associated with the transportation of a bull as a result of this agreement. If a bull dies from natural causes while it is in the possession of PRODUCER, PRODUCER will have no obligations relating to the bull other than the disposition of the carcass.
If PRODUCER and HEARTBRAND agree that the clean-up program will be handled by a bull owned by PRODUCER, PRODUCER shall keep all calves which are the product of the PRODUCER'S bull. Such calves will not be subject to the provisions of this agreement. Upon the request of HEARTBRAND, PRODUCER shall have the DNA of the calves examined to insure that they are the product of PRODUCER'S bull rather than the product of the semen provided by HEARTBRAND,
XIV.
Payment
All sums due and owing to HEARTBRAND under this agreement shall be paid at 404 Airport Drive, Yoakum, Texas in United States Dollars before 5:00 p.m. on the date that the sum is due. All sums owed by HEARTBRAND under this agreement shall be paid to the business address of PRODUCER set forth below in United States Dollars before 5:00 p.m, on the date that the sum is due. Any sum shall be deemed to be timely paid if it is placed in the United States Mail before the tune that it is due in a properly addressed and adequately stamped envelope.
XV.
Liens
PRODUCER agrees that it will not allow an encumbrance or lien on any of the cattle under this agreement and that it has good and merchantable clear title on all cattle transfelTed under this agreement.
XVI.
Marketing
Regardless of the source of the cattle, PRODUCER will at no time market any of the cattle or beef sold by PRODUCER to any party for any purpose at any time as having unique health benefits similar to those of Akaushi beef or as having been derived from Akaushi cattle, This agreement shall survive this agreement and continue for a period of fifty (50) years after the termination of this agreement, regardless of the reason or cause for the teintination of this agreement.
XVII.
Remedies for Breach
In the event of a breach of any of the provisions of this Agreement by PRODUCER, HEARTBRAND shall be allowed to entitled to obtain injunctive relief to insure that it obtains possession of all cattle described in this agreement and to prevent PRODUCER from delivering any data obtained under this agreement to any party and to enforce all other provisions of this agreement. PRODUCER understands and agrees that the data and genetics of this agreement are confidential trade secrets which can only be protected by injunctive relief. In addition, PRODUCER understands that the unique nature of the Akaushi cattle and their reputation in the community is an essential element in the value of the cattle and the business of HEARTBRAND. Accordingly, in addition to all of the relief described above, HEARTBRAND shall be entitled to recover damages from PRODUCER in amount equal to the amount that the value of the unique Akaushi brand and the sole control of the brand by HEARTBRAND has been reduced. In the event that the breach is the failure of PRODUCER to pay a sum due and owing under this agreement and HEARTBRAND, PRODUCER agrees to pay interest on such sum at the maximum interest rate allowed by law. PRODUCER further agrees that it will reimburse HEARTBRAND all of its reasonable attorney fees and any other costs incurred in enforcing the terms of this agreement.
XVIII.
HEARTBRAND Termination
HEARTBRAND may terminate this Agreement, with or without cause, upon thirty (30) days advance written notice to PRODUCER.
XIX.
PRODUCER Termination
PRODUCER understands and agrees that in the event it decides to terminate this agreement, PRODUCER will notify HEARTBRAND in writing thirty (30) days in advance of any termination date and transfer all data and cattle to HEARTBRAND for the consideration set forth in this agreement.
XX.
Non-Exclusive
Notwithstanding anything to the contrary contained in this Agreement, the parties hereto expressly acknowledge and agree that HEARTBRAND shall be free, during the term of this Agreement and at its sole discretion, to contract with one or more third parties of its own choosing for any service described in this agreement.
XXI.
Miscellaneous
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors in interest. The validity of this Agreement and any of its terms or provisions, as well as the rights and duties of the parties hereunder, shall be governed by the laws of the State of Texas. Further, the parties agree that this Agreement is partly performable in Lavaca County, Texas and that the sole and exclusive venue for any dispute directly or indirectly arising out of this Agreement is Lavaca County, Texas. Each party hereby irrevocably and unconditionally consents to the jurisdiction of the courts of Lavaca County, Texas and hereby irrevocably and unconditionally waives any defense of an inconvenient form to the maintenance of any action or proceeding in any such court, any objection to venue with respect to any such action or proceeding, and any right of jurisdiction on account of the place of residence or domicile of any party thereto, This Agreement supersedes any and all other agreements, oral or in writing, between the parties hereto with respect to the subject matter hereof and no other agreement, statement, or promise related to the subject matter of this Agreement which is not contained herein shall be valid or binding. This Agreement may be amended or modified at any time and in all respects only by an instrument in writing executed by both parties hereto. No oral modification shall be effective. If any legal action is brought to enforce this Agreement by either of the parties hereto, it is expressly agreed that the prevailing party in such legal action shall be entitled to recover from the other party reasonable attorney's fees, expenses, and costs. If one or more of the provisions of this Agreement shall be held unenforceable, invalid, or illegal in any respect, such unenforceability, invalidity, or illegality, shall not affect any other provision of this Agreement, which shall be construed as if such unenforceable, invalid, or illegal provision had never been a part hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands on the dates set forth below.
HEARTBRAND BEEF, INC. BEAR RANCH, LLC, (Producer)
BY: ________________________ BY: ___________________
Dr. Anotonio Elias Calles President ________________________
404 Aiport Drive. 3082 Cty, 12 (address)
Yoakum, Texas 77995 Somrset, CO 81434
DATE: 7-8-10 DATE 7/8/10
7X CATTLE COMPANY
Semen and Embryo Inventory
09-23-15
Semen in Storage
Storage Facility Akaushi Semen International HeartBrand Beeman Spears Twinwood Grand Totals
Elgin Breeding Service, Inc. 10,948 13,122 24,070
Rocky Mountain Sire Services, Inc. 6,045 6,045
Champion Genetics 212 35 19 266
Grand Totals 11,160 13,157 6,064 30,381
Embryo in Storage
Storage Facility Akaushi Semen International HeartBrand Beeman Spears Twinwood
Elgin Breeding Service, Inc. 553 553
Grand Total/Semen 30,381
Grand Total/Embryo 553
