ASSET PURCHASE AGREEMENT
among
XXXXXX XXXXXX JUICE COMPANY,
as Purchaser
PASCO JUICES, INC.
as Seller
and
XXXXXX BEVERAGE COMPANY
Dated as of May 25, 2001
TABLE OF CONTENTS
1. SALE AND PURCHASE OF ASSETS...........................................1
1.1 Assets Transferred...........................................1
2. CONSIDERATION.........................................................3
2.1 Purchase Price...............................................3
2.2 Assumption of Certain Liabilities and Obligations............4
2.3 Nonassumption of Other Liabilities...........................4
3. EMPLOYEES.............................................................5
4. THE CLOSING...........................................................5
4.1 The Closing..................................................5
4.2 Certain Events at Closing....................................5
5. REPRESENTATIONS OF SELLER.............................................5
5.1 Organization.................................................6
5.2 Authority Relative to This Agreement.........................6
5.3 Consents and Approvals; No Violations........................6
5.4 Corporate Records............................................6
5.5 Financial Information........................................6
5.6 Compliance with Laws; Permits................................7
5.7 Contracts....................................................7
5.8 Absence of Undisclosed Liabilities...........................8
5.9 Operations of Seller; Absence of Certain Changes.............8
5.10 Brokers and Finders..........................................9
5.11 Litigation and Orders........................................9
5.12 Proprietary Rights...........................................9
5.13 [RESERVED]..................................................11
5.14 Customers...................................................11
5.15 Effect of Transaction.......................................11
5.16 Accuracy of Information; Full Disclosure....................11
5.17 No Other Representations or Warranties......................12
6. REPRESENTATIONS OF PURCHASER/XXXXXX..................................12
6.1 Organization and Authority..................................12
6.2 Authorization of Agreement..................................12
6.3 Brokers and Finders.........................................12
6.4 Due Diligence...............................................13
6.5 Knowledge...................................................13
6.6 Organization and Authority..................................13
6.7 Authorization of Agreement..................................13
6.8 Brokers and Finders.........................................13
6.9 Due Diligence...............................................13
6.10 Knowledge...................................................13
7. AGREEMENTS OF SELLER AND PURCHASER...................................14
7.1 No Solicitation of Transactions.............................14
7.2 Interim Operations..........................................14
7.3 Access to Information.......................................14
7.4 Certain Filings, Consents and Arrangements..................15
7.5 Notice......................................................15
7.6 Further Assurances..........................................15
7.7 Estoppel; Infringement......................................16
7.8 Packing of Products.........................................16
7.9 IRI Contract................................................16
8. CONDITIONS TO OBLIGATIONS OF PURCHASER...............................16
8.1 Closing Actions.............................................16
8.2 Continued Truth of Representations and Warranties...........17
8.3 Consents of Third Parties...................................17
8.4 Absence of Challenge........................................17
8.5 Litigation..................................................17
8.6 Absence of Material Adverse Change..........................17
9. CONDITIONS TO OBLIGATIONS OF SELLER..................................17
9.1 Closing Actions.............................................18
9.2 Continued Truth of Representations and Warranties...........18
9.3 Litigation..................................................18
10. TERMINATION PRIOR TO THE CLOSING DATE................................18
10.1 Termination.................................................18
10.2 Effect on Obligations.......................................18
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................18
12. INDEMNIFICATION......................................................19
12.1 Indemnification by Seller...................................19
12.2 Indemnification by Purchaser/Xxxxxx.........................20
13. EFFECTIVENESS OF THIS AGREEMENT......................................20
14. EXPENSES.............................................................21
15. SALES, USE, TRANSFER AND OTHER TAXES.................................21
16. NOTICES..............................................................21
17. SUCCESSORS...........................................................22
18. PARAGRAPH HEADINGS...................................................22
19. GOVERNING LAW; ARBITRATION...........................................22
19.1 Governing Law...............................................22
19.2 Arbitration.................................................22
20. ANNOUNCEMENTS........................................................23
21. ENTIRE AGREEMENT.....................................................23
22. COUNTERPARTS.........................................................23
LIST OF EXHIBITS
Exhibit A - Trademark Assignment
Exhibit B - Assignments
Exhibit C - License Agreement
Exhibit D - Seller's Certificate of Continued Truth of Representation
Exhibit E - Purchaser's Certificate of Continued Truth of Representations
LIST OF SCHEDULES
Schedule 1.1(a) - Proprietary Rights
Schedule 1.1(b) - Contracts (Assumed)
Schedule 5.4 - Delaware Certificate of Good Standing
Schedule 5.5 - Financial Information
Schedule 5.6 - Compliance; Permits
Schedule 5.7 - Contracts (Not Assumed)
Schedule 5.9 - Operation of Seller - Extraordinary Events
Schedule 5.11 - Litigation and Administrative Investigations
Schedule 5.14 - Customers
Schedule 5.15 - Effect of Transaction
Schedule 7.8 - Co-Packing Terms
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of May 25, 2001 by and
among Xxxxxx Xxxxxx Juice Company, a Delaware corporation ("Purchaser"), Pasco
Juices, Inc., formerly known as McCain Citrus, Inc., a Delaware corporation
("Seller"), and solely for the limited purposes set forth below, Xxxxxx Beverage
Company, a Delaware corporation ("Xxxxxx").
W I T N E S S E T H :
WHEREAS, Seller is the owner of and is in the business of marketing,
selling and distributing the "Junior Juice" line of juice products (the
"Business");
WHEREAS, Seller desires to sell to Purchaser certain of the assets
comprising the Business;
WHEREAS, Purchaser desires to purchase certain of the assets comprising
Business on the terms and conditions set forth herein;
WHEREAS, Purchaser is a wholly-owned subsidiary of Xxxxxx;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained and other good and valuable consideration, receipt
of which is hereby acknowledged, it is hereby agreed as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Assets Transferred. Subject to the terms and conditions of this
Agreement, and to the continued accuracy of the representations and warranties
contained herein on the Closing Date (as hereinafter defined), Seller shall
sell, convey, assign, transfer and deliver to Purchaser and Purchaser shall
purchase, receive and accept delivery from Seller, at the Closing provided for
in Article 5, the following assets relating to the Business (collectively, the
"Purchased Assets"):
(a) All right, title and interest of Seller, now or hereafter known or
existing and of every kind and nature, whether tangible or intangible and
whether arising by statute, common law, operation of law, ownership, assignment,
agreement, contract, lease, license, consent, permit or otherwise, and however
designated, in and to:
(i) any and all trademarks, service marks, and trade names used by
Seller solely in connection with the Business, including but not limited to
those trademarks, service marks, and trade names listed on Schedule 1.1(a),
together with the goodwill of the Business associated therewith and
symbolized thereby;
(ii) any and all copyrighted and copyrightable works, works of
authorship and expression, and literary property, whether or not
copyrighted or copyrightable, including copyrights, author rights and moral
rights (such as, without limitation, any right to identification of
authorship or limitation on subsequent modification) used by Seller solely
in connection with the Business, including but not limited to those
copyrighted and copyrightable works listed on Schedule 1.1(a), together
with the moral rights therein and the goodwill of the Business associated
therewith and symbolized thereby;
(iii) any and all of the following used by Seller solely in connection
with the Business, whether or not listed on Schedule 1.1(a):
(1) product formulas and formulations, production formulas
and formulations, trade secrets, know-how and confidential
information, customer lists and information, whether or not
protectable by patent, copyright or trade secret laws;
(2) logos, trade dress (including, without limitation,
configuration, design and packaging), goodwill, rights of
publicity and privacy (including, without limitation,
photographic and other releases, whether published or
unpublished), marketing rights, franchise rights, rights against
unfair competition, and any similar rights, together with the
goodwill of the Business associated therewith and/or symbolized
thereby;
(3) other intellectual property, intangible industrial
property and proprietary rights, titles, interests and
privileges, however designated, that are similar or analogous to
any of the foregoing including, without limitation any and all
rights in and to product configurations and designs, label
designs, graphic and artistic designs; artwork; dyes; character
rights; and UPC bar codes;
(iv) registrations, applications, renewals, and extensions with
respect to each of the foregoing now or hereafter in force, in whole and/or
in part;
(v) associated documentation, modifications, improvements and
derivative works with respect to each of the foregoing;
(vi) rights of possession, ownership, use and enjoyment with respect
to each of the foregoing, including, without limitation, the right to
license, sublicense, assign, pledge sell, transfer, convey, grant, gift
over, divide, partition or use (or not use) in any way any of the foregoing
now or hereafter (including without limitation any claims, demands or
causes of action of any kind with respect thereto);
(vii) claims, demands and causes of action of any kind with respect
to, and any and all other rights relating to the enforcement of, any of the
foregoing, including, without limitation, any claims, demands or causes of
action for any infringement, conversion, misappropriation, dilution or
other violation of or injury to any of them;
each and all of the foregoing being hereinafter referred to collectively as the
"Proprietary Rights." To the extent, if any, that any moral rights of Seller or
of the author of any work encompassed by the Proprietary Rights cannot be
legally transferred by Seller, they shall be waived in a signed writing
providing for same;
(b) All right, title and interest of Seller in: (i) all agreements,
contracts and licenses relating to the Business listed on Schedule 1.1(b),
including, without limitation that certain contract between Information
Resources Inc. and Seller dated August 14, 1999 (the "IRI Contract"), (ii)
written and/or oral contracts relating to the Business with retail
establishments and brokers in respect of listing fees, it being understood,
however, that, Purchaser is not assuming any obligations of Seller under
agreements with any retail establishment or any of its brokers, (iii) the
$18,000 fee from Xxxxxxx X'Xxxx Co., Inc. to participate in the Albany-New
England area "Sizzling Savings" promotion and all cost associated with
redemption of "Sizzling Savings" coupons, including any handling or associated
fees, and (iv) such portion only of any trade allowances to customers or brokers
agreed to before Closing, as disclosed on "deal sheets," that relate to products
sold by Purchaser after the Closing Date (collectively, the "Contracts"). Seller
shall be responsible for the payment of any fees and commissions of brokers
earned on sales of the Products (as defined in Section 2.1) that occur prior to
the Closing Date. Purchaser shall be responsible for the payment of any fees and
commissions of brokers earned on sales of the Products that occur on or after
the Closing Date. Seller hereby represents and warrants to Purchaser that all of
its agreements with brokers relating to the Business are terminable upon not
more than thirty (30) days written notice.
2. CONSIDERATION.
2.1 Purchase Price. In consideration of the sale, conveyance, assignment,
transfer and delivery of the Purchased Assets by Seller to Purchaser, Purchaser
shall pay to Seller a royalty of 3% on all "Junior Juice" juice products sold by
Purchaser in 125 ml tetrapak packages (or any other similar packing material of
a volume of approximately 125 ml) (the "Products") for a period of five (5)
years commencing on the Closing Date. The royalty shall be computed on the net
selling prices of Products sold by Purchaser and its successors and assigns
after adjustments for cash discounts, promotional allowances, freight charges,
spoils and spoilage allowances, invoice allowances and billbacks. Purchaser
covenants that the minimum royalty payments that will be paid by Purchaser to
Seller over the aforesaid five-year period will not be less than $750,000, in
the aggregate. Royalties shall be payable by Purchaser to Seller quarterly in
arrears and be paid within forty-five (45) days from the end of each quarter.
Should the aggregate royalties paid by Purchaser to Seller after one (1) year
from the Closing Date be less than $150,000, in the aggregate, then the
difference shall be paid by Purchaser to Seller as an advance against future
royalties payable by Purchaser to Seller. Should the aggregate royalties paid by
Purchaser to Seller after two (2) years from the Closing Date, including all
payments made in respect of the first year (actual and by way of advance), be
less than $300,000, in the aggregate, then the difference shall be paid by
Purchaser to Seller as an advance against future royalties payable by Purchaser
to Seller. Should the aggregate royalties payable by Purchaser to Seller after
three (3) years from the Closing Date, including all payments made in respect of
the first two (2) years (actual and by way of advance), be less than $450,000,
in the aggregate, then the difference shall be paid by Purchaser to Seller as an
advance against future royalties payable by Purchaser to Seller. Should the
aggregate royalties paid by Purchaser to Seller after four (4) years from the
Closing Date, including all payments made in respect of the first three (3)
years (actual and by way of advance), be less than $600,000, in the aggregate,
then the difference shall be paid by Purchaser to Seller as an advance against
future royalties payable by Purchaser to Seller. Should the aggregate royalties
paid by Purchaser to Seller after five (5) years from the Closing Date,
including all payments made in respect of the first four years (actual and by
way of advance), be less than $750,000, in the aggregate, then the difference
shall be paid by Purchaser to Seller in full satisfaction of Purchaser's payment
obligations to Seller in respect of the royalty payments. Xxxxxx guarantees to
Seller the satisfaction of Purchaser's payment obligation pursuant to this
Section 2.1, and if Purchaser fails to make any payment required under this
Section 2.1, Xxxxxx shall make such payment to Seller on behalf of Purchaser in
the amount and within such time period as required of Purchaser. Xxxxxx
expressly waives any legal obligation, duty or necessity for Seller to proceed
first against Purchaser or to exhaust any remedy Seller may have against
Purchaser, it being agreed that in the event of failure of to make payment by
Purchaser, Seller may proceed and have right of action solely against either
Xxxxxx or Purchaser or jointly against Xxxxxx and Purchaser and nothing in this
Section shall be construed to limit any of Seller's rights or remedies against
Purchaser in the event of such default.
2.2 Assumption of Certain Liabilities and Obligations. In further
consideration of the sale, conveyance, assignment, transfer and delivery of the
Purchased Assets by Seller to Purchaser, on the Closing Date, Purchaser shall
assume and comply with all obligations and liabilities of Seller whose
performance or satisfaction first becomes due on or after the Closing Date under
each Contract listed on Schedule 1.1(b) (Seller has furnished Purchaser with
true copies of all such written Contracts). The foregoing liabilities being
assumed by Purchaser are referred to hereinafter collectively as the "Assumed
Liabilities". Xxxxxx and Purchaser, jointly and severally, shall assume the IRI
Contract.
2.3 Nonassumption of Other Liabilities. Other than the Assumed Liabilities,
Purchaser does not assume and shall in no event be liable for any liabilities,
debts or obligations of Seller or which otherwise relate to or are connected
with the Business and/or any products relating to the Business manufactured
and/or sold prior to the Closing Date, whether accrued, absolute, matured,
contingent or otherwise, including, without limitation, trade accounts payable
and accrued expenses, taxes of any kind, any liabilities for fees or expenses
incident to the preparation of this Agreement or the consummation of the
transactions contemplated hereby, including, without limitation, counsel,
accountant's or finder's fees of Seller, or any other expenses, debt, contracts,
agreements, leases or other obligations which are not specifically assumed
hereunder. Without limiting the generality of the foregoing, Seller shall be
solely responsible for all costs, expenses, claims and damages relating to or
arising from the sale of any products of the Business manufactured and/or sold
prior to the Closing Date, including without limitation, all billbacks, returns,
coupon redemptions, rebates, promotional allowances or any similar charges;
provided, however, that Purchaser shall be liable for any costs, expenses,
claims or damages to the extent primarily caused by Purchaser's negligence,
intentional wrongdoing or breach of its obligations.
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3. EMPLOYEES.
It is not anticipated that Purchaser will offer employment to or employ any
employees of Seller after the Closing Date. Seller shall be solely responsible
for all severance or other payments due to its employees.
4. THE CLOSING.
4.1 The Closing. The "Closing" or "Closing Date" means the time at which
Seller effects the transfer of the Purchased Assets to Purchaser. The Closing
shall take at such place and at such time as the parties shall agree in writing,
subject to paragraph 10.1(b).
4.2 Certain Events at Closing. In addition to such other actions as may be
provided for herein, the following actions shall be taken at the Closing:
(a) Seller shall execute and deliver to Purchaser the Trademark Assignment
in the form attached hereto as Exhibit A and all such other documents,
certificates, agreements, releases and consents to cancellation necessary to
transfer and assign to Purchaser, and for Purchaser to record, register and file
with the U.S. Patent and Trademark Office and all other applicable registration
authorities, all of Seller's right, title and interest in and to, the
Proprietary Rights, free and clear of all Liens (as defined in paragraph
5.9(b)), in form and substance satisfactory to Purchaser.
(b) Seller shall deliver to Purchaser duly executed and acknowledged
assignments in the form attached hereto as Exhibit B, and all such other
executed endorsements, assignments, and other instruments of transfer and
conveyance, in form and substance satisfactory to counsel for Purchaser, as
Purchaser shall request, to effectively vest in Purchaser all right, title and
interest in the Purchased Assets, free and clear of all Liens of any kind
whatsoever.
(c) Purchaser and Vitality Foodservice, Inc. shall enter into a License
Agreement in the form attached hereto as Exhibit C.
(d) Seller shall have delivered to Purchaser a certificate addressed to
Purchaser and executed by an authorized officer of Seller dated the Closing Date
in the form attached hereto as Exhibit D.
(e) Purchaser shall have delivered to Seller a certificate addressed to
Seller and executed by an authorized officer of Purchaser dated the Closing Date
in the form attached hereto as Exhibit E.
(f) Seller shall have delivered to Purchaser evidence reasonably acceptable
to Purchaser that all Liens on the Purchased Assets have been released,
including without limitation, liens held in favor of Cooperatieve Centrale
Raiffeisen-Boereleenbank, B.A.
5. REPRESENTATIONS OF SELLER.
Seller represents and warrants to Purchaser:
5
5.1 Organization. Seller is a corporation validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate
power and authority to carry on its business as it is now being conducted.
Seller is duly qualified and licensed as a foreign corporation to do business,
and is in good standing (and has paid all relevant franchise or analogous
taxes), in each jurisdiction where the character of its properties owned or held
under lease or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified and in good standing would not,
individually or in the aggregate, have a material adverse effect on the
business, assets, properties, prospects, results of operations or financial
condition of Seller taken as a whole (a "Material Adverse Effect")
5.2 Authority Relative to This Agreement. Seller has the requisite
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors [and the stockholders] of Seller. No other
corporate proceedings on the part of Seller or its stockholders are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, moratorium, reorganization and similar
statutory and decisional law affecting creditors' rights and debtors'
obligations generally, and to equitable principles.
5.3 Consents and Approvals; No Violations. To the Best of Seller's
Knowledge, no filing or registration with, and no permit, authorization, consent
or approval of, any domestic or foreign government or public body, agency or
authority ("Governmental Entity") is necessary for the consummation by Seller of
the transactions contemplated by this Agreement. "). To the Best of Seller's
Knowledge, neither the execution and delivery of this Agreement by Seller nor
the consummation by Seller of the transactions contemplated hereby nor
compliance by Seller with any of the provisions hereof will (a) conflict with or
violate any provision of the charter or by-laws or similar organizational
documents of Seller, (b) conflict with or result in violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which Seller
is a party or by which Seller or any of its properties or assets may be bound,
(c) violate any order, writ, injunction, decree, statute, treaty, rule or
regulation applicable to Seller or any of its properties or assets, or (d)
conflict with or constitute or result in a violation or breach (with or without
due notice or lapse of time or both) of any legal or enforceable duty or
obligation between Seller and any third party.
5.4 Corporate Records. Attached as Schedule 5.4 are true and complete copy
of the Certificate of Good Standing of Seller issued by the Secretary of State
of the State of Delaware.
5.5 Financial Information. Schedule 5.5 sets forth a list of the financial
information relating to the operation of the Business provided by Seller to
Purchaser (collectively, the "Financial Information"). The Financial Information
is accordance with the books and records of Seller and is fairly presented.
Seller has advised Purchaser and Purchaser hereby acknowledges that: (i) the
Financial Information was prepared for internal management uses only and has not
6
prepared in accordance with GAAP; (ii) the Financial Information contains actual
case volume and adjusted gross sales by customer; (iii) certain cost information
presented is based on overall results of Seller and has been allocated to the
product line Financial Information; and (iv) because the cost data presented
therein is based upon a "standard cost" model in effect at the time of the
report and Seller does not track variances to its standard cost model on a
monthly basis, actual cost may vary significantly due to ingredient pricing
changes, changes in other cost associated with the specific product and
manufacturing capacity that affects the allocated costs to the products.
Purchaser further understands that the Financial Information does not
necessarily reflect the results that other companies would experience during the
same period.
5.6 Compliance with Laws; Permits. To the Knowledge of Seller, Seller is in
compliance with all orders, judgments, decrees, laws, statutes, ordinances,
rules and regulations (collectively, "Laws") applicable the Business, except
where any noncompliance, individually or in the aggregate, would not have a
Material Adverse Effect. Seller has not received any notice of any alleged
violation of Law applicable to the Business, except where such violation,
individually or in the aggregate, would not have a Material Adverse Effect.
Seller has all governmental permits, licenses, orders and authorizations, and
has made all required filings and registrations with, Governmental Entities,
required for the conduct of the Business as presently conducted, except where
the failure to have obtained any such permit would not, individually or in the
aggregate, have a Material Adverse Effect (the "Permits"). A complete and
correct list of the Permits held by Seller is set forth on Schedule 5.6, and a
true and complete copy of each such Permit has been previously delivered to
Purchaser. All the Permits are valid and in full force and effect, and Seller
has duly performed and is in compliance with all its obligations under the
Permits, except where any noncompliance, individually or in the aggregate, would
not have a Material Adverse Effect. No event has occurred with respect to the
Permits which allows, or after notice or lapse of time or both would allow, the
suspension, limitation, revocation or termination thereof or would result in any
other material impairment of the rights of Seller in and under any of the
Permits, except where the suspension, limitation, revocation or termination,
individually or in the aggregate, would not have a Material Adverse Effect, and,
to the knowledge of Seller, no terminations thereof or proceedings to suspend,
limit, revoke or terminate any Permit have been threatened.
5.7 Contracts. (a) Except as set forth on Schedule 1.1(b) or as otherwise
disclosed on Schedule 5.7, Seller is not a party to any written or oral contract
or agreement in effect on the date of this Agreement related to the Purchased
Assets: (i) containing non-competition or other limitations restricting the
conduct of the Business of Seller in the United States of America; or (ii) with
any manufacturer, supplier or customer with respect to discounts or allowances
regarding the Purchased Assets or the Business. Seller has made available to
Purchaser true and complete copies of all Contracts which are required to be
disclosed pursuant to this Agreement.
(b) Except as set forth on Schedule 1.1(b) or as otherwise disclosed on
Schedule 5.7, all purchase orders and commitments and all sales orders and
commitments of Seller related to the Business have been entered into in the
ordinary course of business.
(c) To the Knowledge of Seller: (i) no default or alleged default or any
event which, with the lapse of time or the election of any person other than
7
Seller, will become a default exists under any of the Contracts listed in
Schedule 1.1(b); (ii) each of the Contracts is now valid, in full force and
effect and enforceable in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization
and similar statutory and decisional law affecting creditors' rights and
debtors' obligations generally, and to general equitable principles, and the
discretion of courts in awarding equitable relief) and (iii) Seller has
fulfilled in all material respects, all its obligations under the Contracts
whose performance or satisfaction are due as of the date of this Agreement.
5.8 Absence of Undisclosed Liabilities. Seller is not subject to any debts,
claims, liabilities or obligations relating to the Purchased Assets, accrued,
absolute, contingent or otherwise and whether due or to become due
("Liabilities") other than Liabilities disclosed on Schedule 5.5 and Liabilities
arising since December 31, 2000 in the ordinary course of business consistent
(in amount and kind) with past practice and which do not, singly or in the
aggregate, have a Material Adverse Effect. Seller has no knowledge of any
circumstance, condition, event or arrangement that would hereafter give rise to
any Liabilities of any successor to the Business except for the Assumed
Liabilities.
5.9 Operations of Seller; Absence of Certain Changes. Except as set forth
on Schedule 5.9, or pursuant to or as contemplated by this Agreement, since
December 31, 2000, Seller has not with respect to the Business:
(a) suffered any change, event or series of changes or events which has or
could reasonably be expected to have a Material Adverse Effect, whether or not
covered by insurance;
(b) materially changed any of its business operations or business policies,
including, without limitation, advertising, investment, marketing, pricing,
purchasing, production, personnel, sales, returns, budget or other product
acquisition policies;
(c) terminated or failed to renew, or received any written threat (that was
not subsequently withdrawn) to terminate or fail to renew, any material Contract
or other agreement to which it is or was a party except in the ordinary course
of business;
(d) to the knowledge of Seller, been the subject of any investigation by a
Governmental Entity or litigation which may have a Material Adverse Effect;
(e) offered any unusual or extraordinary promotions, discounts, price
reductions or other inducements to purchase its products to any of its customers
or prospective customers;
(f) notwithstanding the foregoing, Seller has advised Purchaser that
promotional support for the Purchased Assets has declined over the past few
years. Moreover, there has been minimal promotion support for the Purchased
Assets during the last six (6) months; and
(g) notwithstanding the foregoing, Seller has advised Purchaser that there
has been a substantial decline in the Business over the last several years,
including the last twelve (12) month period.
8
(h) notwithstanding the foregoing, Seller has advised Purchaser that after
the Closing Date, Vitality Food Services, Inc., will no longer be a customer of
the Business.
5.10 Brokers and Finders. Neither Seller nor any of its stockholders or
affiliates has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated hereby.
5.11 Litigation and Orders. Except as set forth on Schedule 5.11:
(a) There are no actions, suits or legal, administrative or arbitral
proceedings, charges or investigations (collectively "Litigation") pending or,
to the knowledge of Seller, threatened against, affecting or involving Seller
with respect to the Purchased Assets, including without limitation the
Proprietary Rights, or which seek to prevent or challenge the transactions
contemplated hereby;
(b) There are no judgments, decrees, injunctions, rules or orders of any
Governmental Entity (collectively, "Orders" and, Orders together with Litigation
being referred to herein as "Claims") outstanding against Seller relating to the
Purchased Assets;
(c) There are no product liability claims, or claims of warranty liability
or field failure involving product recall, pending or, to the knowledge of
Seller, threatened against or involving Seller relating to the Purchased Assets;
and
(d) There are no Claims pending against Seller, or to the knowledge of
Seller, threatened in respect of or for any deposits, containers, redemption or
recycling of any products of Seller relating to the Purchased Assets.
5.12 Proprietary Rights. (a) Upon Closing and thereafter, Purchaser shall
have and receive, by purchase and assignment from Seller, all Proprietary Rights
necessary and sufficient to authorize and enable Purchaser to operate the
Business for the uses and purposes and in the manner conducted by Seller on and
immediately before the date of Seller's execution of this Agreement. Upon the
execution of this Agreement and thereafter through and upon Closing, no right,
title or interest of Seller in or to the Proprietary Rights will lapse or be
sold, assigned, licensed, transferred or otherwise disposed of, in whole or in
part, except pursuant to the purchase and sale, assignment and transfer to
Purchaser of the Proprietary Rights prescribed by this Agreement. All rights to
the Proprietary Rights, and all registrations and applications for registration
thereof, that have heretofore been owned or held at any time by any employee of
Seller and used in the Business of Seller in any manner have been duly, fully
and effectively transferred to Seller. The consummation of the transactions
contemplated hereby will result in the valid transfer by Seller to Purchaser of
the rights and interests of Seller in all Proprietary Rights of Seller,
including without limitation all of the items listed on Schedule 1.1(a). Except
as is expressly disclosed on Schedule 1.1(a) or Schedule 5.12:
(i) Seller is, as of the date of its execution hereof, and will as of
the Closing Date be, the sole and exclusive owner and possessor of all
right, title and interest in and to the Proprietary Rights, including
without limitation, all registrations and applications for registration
listed on Schedule 1.1(a) for such Proprietary Rights or rights related
thereto, in and with respect to the countries and jurisdictions set forth
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therein; said right, title and interest of Seller in the Proprietary
Rights, as well as the registrations and applications for registration with
respect thereto, are valid and subsisting as of the date of Seller's
execution hereof, and will be valid and subsisting as of the Closing Date
and the assignment and transfer to Purchaser of the Proprietary Rights
thereupon;
(ii) Seller owns, or possesses adequate licenses or other valid rights
to use and to transfer to Purchaser the right to use (without Seller's or
Purchaser's incurring any obligation to make any payment, or to grant any
rights or other consideration, to any third party in exchange therefor),
all Proprietary Rights necessary to the conduct of the Business as
presently being conducted, except when the failure to have such licenses or
rights would not singly or in the aggregate have a Material Adverse Effect;
(iii) none of the validity, ownership, enforceability or use of the
Proprietary Rights, or any right, title or interest of Seller therein, is
being questioned in any Claim to which Seller is a party or subject, nor,
does Seller know, or have reason to know, that any such Claim is threatened
or would have any merit if asserted, irrespective of whether Seller is or
is not made a party or subject thereto;
(iv) to the Knowledge of Seller, neither the conduct of the Business
as now conducted, nor the use of the Proprietary Rights in connection
therewith, does or will infringe, convert, misappropriate, dilute, violate,
injure or conflict with any rights of others, including without limitation
any intellectual property rights of others (as comprised by the categories
of rights included among the Proprietary Rights);
(v) none of the Proprietary Rights is as of the date of execution
hereof, or will upon Closing be, subject to any license, sublicense,
transfer, conveyance, assignment, agreement, commitment, instrument,
arrangement, understanding, undertaking, indenture, duty, obligation,
indemnification, pledge, hypothecation, security interest, Liens, or any
other encumbrance of any kind (collectively, "Impairments"), Seller is not
aware of any use of any of the Proprietary Rights that is now being made,
except by Seller; and none of the Proprietary Rights is as of the date of
execution hereof, or will upon Closing be, subject to any other
Impairments, or any requirements, limitations or restrictions, that would
singly or in aggregate have a Material Adverse Effect;
(vi) Seller has no knowledge of any infringement by others of any of
the Proprietary Rights;
(vii) neither Seller nor any of Seller's parents, subsidiaries or
affiliates, nor any person or entity controlled by Seller, (i) is as of the
date of execution hereof, or will upon Closing be, in breach of any
agreement, commitment, instrument, arrangement, contractual understanding,
undertaking, indenture, license, sublicense, assignment, indemnification or
any legal, equitable or other enforceable duty or obligation which relates
to any of the Proprietary Rights, or (ii) has taken, or will take, any
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action, or has permitted, or will permit, any omission, that would
adversely effect any right, title or interest of the Purchaser in or to any
of the Proprietary Rights;
(viii) the transactions contemplated by this Agreement will not have
an adverse effect on the ownership, use, validity, transferability or
enforceability of any of the Proprietary Rights, and Purchaser will, upon
Closing, receive, possess and enjoy the entire right, title and interest of
Seller in and to the Proprietary Rights without Purchaser's sufferance of
any diminution or limitation of any such right, title or interest existing
immediately prior to the Closing, including but not limited to any
diminution or limitation of any right to assert any claim, cause of action
or right to petition, xxx or otherwise seek monetary, injunctive,
declaratory or any other recovery or relief, for any past, present or
future infringement, conversion, misappropriation or dilution of, or other
injury, offense, violation, breach of duty or wrong relating to, the
Proprietary Rights;
(ix) all necessary steps have been, or promptly are being and will
from time to time be, taken by Seller to obtain, protect, maintain, enforce
and perfect the Proprietary Rights to be received by Purchaser from Seller;
(x) upon the execution hereof, and thereafter through and upon
Closing, no right, title or interest in or to any of the Proprietary Rights
will lapse or be sold, assigned, licensed, transferred or otherwise
disposed of, except pursuant to the purchase and sale, assignment and
transfer to Purchaser of the Proprietary Rights prescribed by this
Agreement.
(b) To the best knowledge of Seller, Seller and its predecessors in
interest have made continuous use of the JUNIOR JUICE xxxx in commerce in
connection with juice drinks since June 16, 1989 and there have been no breaks
or gaps in said mark's chain of title.
5.13 [RESERVED]
5.14 Customers. Except as disclosed on Schedule 5.14 and in Section 5.9
above, since January 1, 2001, no customer of Seller has discontinued or has
notified Seller that it intends to discontinue the sale of the Products.
5.15 Effect of Transaction. To the Knowledge of Seller, except as otherwise
disclosed in Schedule 5.15, no creditor, key-employee or customer or other
person having a material business relationship with Seller has informed Seller
that such person intends to change the relationship because of the purchase and
sale of the Purchased Assets, nor does Seller have knowledge of any such intent.
For purposes of this Section, the term "the Knowledge of the Seller shall mean
the actual knowledge of Xxxxxxx X. Xxxxxx, Xxxx Xxxxxx, Xxxx X'Xxxxx, Xxxxxx
Xxxxxxxxxx and Xxxxx Xxxxxx, without any duty to investigate or make inquiries.
5.16 Accuracy of Information; Full Disclosure. No representation or
warranty of Seller contained in this Agreement or in any Schedule hereto
delivered to Purchaser or any of its affiliates pursuant hereto or in connection
herewith contains an untrue statement of a material fact or omits to state a
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material fact required to be stated therein or necessary to make the statements
made, in the context in which made, not materially false or misleading.
5.17 No Other Representations or Warranties. Except for the Representations
and Warranties made to Purchaser contained in this Article 5 or in any other
document delivered by Seller pursuant to this Agreement, Seller does not make
any other representation or warranty to Purchaser, including, without
limitation, any representation or warranty as to (i) projections, estimates or
budgets delivered to or made available to Purchaser or its representatives of
the future revenues, expenses, future results of operations or prospects of
Seller or the Business or (ii) any other information or documents made available
to Purchaser or its representatives, except as expressly covered by a
representation and warranty in this Article 5.
6. REPRESENTATIONS OF PURCHASER/XXXXXX.
Purchaser represents and warrants to Seller:
6.1 Organization and Authority. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all requisite corporate power and authority
to own its properties, to carry on its businesses as now being conducted, to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
6.2 Authorization of Agreement. Purchaser has the full power and authority
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by Purchaser and the consummation by
Purchaser of all obligations contemplated hereby have been duly authorized by
all requisite corporate action. This Agreement and all other agreements and
written obligations entered into and undertaken in connection with the
transactions contemplated hereby and thereby constitute the valid and legally
binding obligations of Purchaser, enforceable against it in accordance with
their respective terms subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium, reorganization and similar statutory and
decisional law affecting creditors' rights and debtors' obligations generally,
and to general equitable principles. No filing or registration with, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the consummation by Purchaser of the transactions contemplated by
this Agreement. The execution, delivery and performance of this Agreement and
the transactions contemplated hereby by Purchaser will not, with or without the
giving of notice and/or the passage of time, (a) violate any order, writ,
injunction, decree or provisions of law applicable to Purchaser, or (b) conflict
with or result in the breach or termination of any provision of, constitute a
default under, or result in the creation of any lien, charge or encumbrance upon
any of the properties or assets pursuant to any corporate charter, by-law,
indenture, mortgage, deed of trust or other agreement or instrument to which
Purchaser is a party or by which it is or may be bound.
6.3 Brokers and Finders. Purchaser has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby.
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6.4 Due Diligence. Purchaser has had a full and fair opportunity prior to
the Closing to conduct any and all due diligence, investigation, inspection and
review of the Business and the Purchased Assets, including, but not limited to
the Financial Information.
6.5 Knowledge. As of the Closing Date, Purchaser does not have actual
knowledge of any breach by Seller of any representation, warranty, covenant,
agreement, undertaking, or obligation contained in this Agreement.
Xxxxxx represents and warrants to Seller:
6.6 Organization and Authority. Xxxxxx is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all requisite corporate power and authority to own its
properties, to carry on its businesses as now being conducted, to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
6.7 Authorization of Agreement. Xxxxxx has the full power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by Xxxxxx and the consummation by
Xxxxxx of all obligations contemplated hereby have been duly authorized by all
requisite corporate action. This Agreement and all other agreements and written
obligations entered into and undertaken in connection with the transactions
contemplated hereby and thereby constitute the valid and legally binding
obligations of Xxxxxx, enforceable against it in accordance with their
respective terms subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium, reorganization and similar statutory and
decisional law affecting creditors' rights and debtors' obligations generally,
and to general equitable principles. No filing or registration with, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the consummation by Xxxxxx of the transactions contemplated by
this Agreement. The execution, delivery and performance of this Agreement and
the transactions contemplated hereby by Xxxxxx will not, with or without the
giving of notice and/or the passage of time, (a) violate any order, writ,
injunction, decree or provisions of law applicable to Xxxxxx, or (b) conflict
with or result in the breach or termination of any provision of, constitute a
default under, or result in the creation of any lien, charge or encumbrance upon
any of the properties or assets pursuant to any corporate charter, by-law,
indenture, mortgage, deed of trust or other agreement or instrument to which
Xxxxxx is a party or by which it is or may be bound.
6.8 Brokers and Finders. Xxxxxx has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby.
6.9 Due Diligence. Xxxxxx has had a full and fair opportunity prior to the
Closing to conduct any and all due diligence, investigation, inspection and
review of the Business and the Purchased Assets, including, but not limited to
the Financial Information.
6.10 Knowledge. As of the Closing Date, Xxxxxx does not have actual
knowledge of any breach by Seller of any representation, warranty, covenant,
agreement, undertaking, or obligation contained in this Agreement.
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7. AGREEMENTS OF SELLER AND PURCHASER.
7.1 No Solicitation of Transactions. Seller will not, and Seller will cause
its employees, representatives, investment bankers, consultants, advisors,
agents and affiliates not to, directly or indirectly, (a) initiate contact with,
solicit or encourage submission of any inquiries, proposals or offers by, or (b)
participate in any discussions or negotiations with, or disclose any information
concerning the Purchased Assets to, or afford any access to the properties,
books or records of Seller directly related to the Purchased Assets to, or
otherwise assist, facilitate or encourage, any person (other than Purchaser, its
affiliates, agents and representatives) in connection with any possible proposal
(an "Acquisition Proposal") regarding a sale of all or (other than in the
ordinary course of business consistent with past practice) any portion of the
Purchased Assets. Seller, (i) will notify Purchaser immediately if any inquiry
or proposal is made or any such information or access is requested in connection
with an Acquisition Proposal, or potential Acquisition Proposal, and (ii) will
immediately communicate to Purchaser the terms and conditions of any such
Acquisition Proposal or potential Acquisition Proposal or inquiry and the
identity of the offeror or potential offeror.
7.2 Interim Operations. During the period from the date of this Agreement
to the Closing Date, except as specifically contemplated by this Agreement or as
otherwise approved in writing by Purchaser, Seller shall:
(a) conduct the Business only in, and not take any action except in, the
ordinary and usual course of business and consistent with past practice;
(b) perform in all material respects its obligations under all Contracts;
(c) not encumber, sell, lease or otherwise dispose of or acquire any of the
Purchased Assets; and
(d) in connection with the continuing operation of the Business between the
date of this Agreement and the Closing Date, use all reasonable best efforts to
consult in good faith on a regular and frequent basis with representatives of
Purchaser to report material operational developments and the general status of
ongoing operations. Seller acknowledges that any such consultation shall not
constitute a waiver by Purchaser of any rights it may have under this Agreement
and that Purchaser shall have no liability or responsibility for any actions of
Seller or any of its officers or directors with respect to matters which are the
subject of such consultations;
7.3 Access to Information. From the date hereof until the Closing Date,
Seller shall, and shall cause its officers, directors, employees and agents to,
afford to Purchaser and its officers, directors, employees, counsel,
accountants, advisors, representatives and agents access (during regular
business hours with reasonable notice) to the officers, employees, agents,
properties, offices and other facilities, and to the accounts, books, records
specifically pertaining to the Purchased Assets and Contracts of Seller, and
shall furnish Purchaser and such others with access to all financial, operating,
technical and other data and information which Purchaser, through its officers,
employees or agents, may from time to time reasonably request, so long as such
request pertains to the Purchased Assets.
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7.4 Certain Filings, Consents and Arrangements. Purchaser and Seller (a)
shall cooperate with each other in promptly determining whether any other
submissions, notifications or filings are required to be or should be made or
whether any consents, approvals, permits, authorizations, exemptions or waivers
are required to be or should be obtained under any other federal, state or
foreign law or regulation or from other parties to Contracts material to the
Business in connection with the consummation of the purchase and sale of the
Purchased Assets, and (b) shall cooperate with each other in promptly making any
such submissions, notifications or filings, furnishing information required in
connection therewith and seeking timely to obtain any such consents, approvals,
permits, authorizations, exemptions or waivers. Each of the parties hereto shall
provide all reasonable assistance to, and shall cooperate with, each other to
bring about the consummation of the purchase and sale of the Purchased Assets in
accordance with the terms and conditions of this Agreement.
7.5 Notice. Each party shall give prompt written notice to the other of (a)
the occurrence, or failure to occur, of any event which occurrence or failure
would be likely to cause any representation or warranty of Seller or Purchaser,
as the case may be, contained in this Agreement to be untrue or inaccurate at
any time from the date hereof to the Closing Date or that will or may result in
the failure to satisfy any of the conditions specified in paragraphs 8 or 9, and
(b) any failure of Seller or Purchaser, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder.
7.6 Further Assurances. (a) From and after the Closing Date, Seller shall
take all such steps as may be necessary to put Purchaser in actual possession
and operating control of the Purchased Assets, and Seller agrees that at any
time or from time to time (without further cost or expense to Purchaser) after
the Closing Date, but only for the period ending on the second anniversary date
of the Closing Date, upon the request of Purchaser, Seller will execute,
acknowledge and deliver such other instruments of conveyance and transfer and
take such other action as Purchaser may reasonably require to vest more
effectively in the Purchaser good and marketable title to any of the Purchased
Assets;
(b) Following the execution of this Agreement, and upon and after the
Closing, Seller will provide such full and continuing cooperation and assistance
to Purchaser as may be reasonable and necessary to obtain, protect, maintain,
enforce and/or perfect any right, title or interest of Purchaser in or to any of
the Proprietary Rights to be received by Purchaser from Seller hereunder,
provided that Purchaser shall reimburse Seller for any reasonable out of pocket
expenses incurred in connection with the foregoing. Such cooperation and
assistance shall include without limitation Seller's receipt, preparation,
execution and delivery to or on behalf of Purchaser of all such documents,
instruments and materials, and performance of all such acts, including the
participation as a party or witness, as may reasonably be requested by Purchaser
for the purposes of obtaining any applications, registrations, recordations or
other filings, or initiating, prosecuting, defending or participating in any
action or proceeding, of or relating to the Proprietary Rights, this Agreement,
or the validity, performance or enforcement of any of the transactions, rights
or obligations provided for herein. The cooperation and assistance obligations
prescribed by this paragraph 7.6 shall survive the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement; and
15
(c) Following the execution of this Agreement, and upon and after the
Closing, but only for the period ending on the first anniversary of the Closing
Date, Seller will provide such full and continuing cooperation and assistance to
Purchaser, as Purchaser may reasonably request, including, without limitation,
access to its books and records, to enable Purchaser to prepare financial
reports relating to the operation of the Business on or before the Closing.
Notwithstanding the foregoing, if Purchaser requires such cooperation and
assistance in order to satisfy disclosure requirements under the federal
securities laws, the time period referred to above will end on the second
anniversary of the Closing Date.
7.7 Estoppel; Infringement. Upon the execution of this Agreement, and
thereafter through and after Closing, neither Seller nor any of Seller's
parents, subsidiaries or affiliates, nor any person or entity controlled by any
of them, will (i) contest, directly or indirectly, the Purchaser's right, title
and interest in and to the Proprietary Rights or the validity, transferability
or enforceability thereof, in whole or in part, with respect to any country or
jurisdiction whatsoever, nor will any of them voluntarily assist or aid others
in so doing or (ii) make, use, offer for sale or sell, or grant any license or
consent to make, use, offer for sale or sell, in any country or jurisdiction
whatsoever, any trademarks, works of authorship, inventions or other
intellectual properties (as comprised of the categories and examples encompassed
by the Proprietary Rights), that infringe, convert, misappropriate, dilute,
violate, injure or conflict with any of the Proprietary Rights, or constitute a
copy, adaptation or colorable imitation of any items encompassed by the
Proprietary Rights, or bear a substantial or confusing similarity thereto.
7.8 Packing of Products. Purchaser shall engage Seller to pack the Products
(as defined in paragraph 2.1) on a non-exclusive basis after the Closing Date in
accordance with the terms set forth in Schedule 7.8 for a period of five (5)
months beginning on the Closing Date (the "Packing Period"). If during the
Packing Period, Seller purchases additional packaging inventory at Purchaser's
written request to fulfill its obligation to pack as provided hereinabove, then
Purchaser shall reimburse Seller for the cost of any such additional packaging
inventory that was so purchased and remains at six (6) months after the Closing
Date. Seller will notify Purchaser before Seller purchases any such additional
packaging inventory.
7.9 IRI Contract. Prior to and after the Closing Date Seller agrees to use
reasonable efforts (without more than minimal expense to Seller) to secure the
agreement of Information Resources Inc. to exchange the services provided by it
under the terms of the IRI Contract for such other of its services in relation
to such type of products and in such markets as may be reasonably required by
Purchaser and/or its affiliates.
8. CONDITIONS TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser under this Agreement are subject, on or prior
to the Closing Date, to the fulfillment in all material respects of the
following conditions precedent, each of which may be waived in writing at the
sole discretion of Purchaser:
8.1 Closing Actions. Seller shall have executed and delivered all
agreements, certificates and instruments, and shall have taken all such other
actions required of Seller under paragraph 4.2.
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8.2 Continued Truth of Representations and Warranties. (i) Each of the
representations and warranties of Seller in this Agreement shall be true in all
material respects on and as of the Closing Date as though such representations
and warranties were made on and as of such date, except for any changes
permitted by the terms hereof or consented to in writing by Purchaser, (ii)
Seller shall have performed and complied with all of the terms, conditions,
obligations, agreements and restrictions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date, and (iii)
Purchaser's due diligence investigation shall not have disclosed any material
misstatement or omission by Seller.
8.3 Consents of Third Parties. Seller shall have received and delivered in
writing to Purchaser all requisite waivers, consents and approvals of all third
parties whose waiver, consent or approval is required to be obtained by Seller
to consummate the transactions contemplated hereby, in form reasonably
satisfactory to Purchaser, including without limitation, the consent of
Information Resources, Inc. to the assignment of the IRI Contract to Purchaser.
Seller agrees to use its best efforts to obtain such waivers, approvals and
consents prior to the Closing Date, provided that Seller shall not be obligated
to provide compensation or other consideration to any third party in exchange
for any such waiver, consent or approval.
8.4 Absence of Challenge. No action or proceeding by or before any court or
other Governmental Entity shall have been instituted or threatened by any
Governmental Entity whatsoever against any of the parties hereto, or any
director, officer, employee or other representative of Seller with respect to
this Agreement or any transaction provided for herein or connected herewith,
whether preceding the execution and delivery of this Agreement or arising
subsequently.
8.5 Litigation. No action or proceeding shall have been instituted or
threatened by any public authority prior to the Closing Date before a court or
other Governmental Entity of any kind for the stated purpose or with the
probable effect of enjoining or preventing the consummation of this Agreement
and the transactions contemplated herein or to recover damages by reason
thereof. No action or proceeding shall have been instituted by any private
person prior to the Closing Date before a court or other Governmental Entity of
any kind with the probable effect of enjoining or preventing the consummation of
this Agreement and the transactions contemplated hereby.
8.6 Absence of Material Adverse Change. No event shall have occurred which
would have a Materially Adverse Effect on the value of the Business or on the
condition (financial or otherwise), operations, assets, properties, business,
prospects or results of operations of the Business.
9. CONDITIONS TO OBLIGATIONS OF SELLER.
The obligations of Seller under this Agreement are subject, at the Closing
Date, to the fulfillment in all material respects of the following conditions
precedent, each of which may be waived in writing at the discretion of Seller:
17
9.1 Closing Actions. Purchaser shall have executed and delivered all
agreements, certificates and instruments, and shall have taken all such other
actions required of Purchaser under paragraph 4.2.
9.2 Continued Truth of Representations and Warranties. (i) The
representations and warranties made by Purchaser in this Agreement shall be true
in all material respects on and as of the Closing Date as though such
representations and warranties were made on and as of such date, except for any
changes permitted by the terms hereof or consented to in writing by Seller, and
(ii) Purchaser shall have performed and complied with all terms, conditions,
obligations, agreements and restrictions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date.
9.3 Litigation. No action or proceeding shall have been instituted or
threatened by any public authority prior to the Closing Date before a court or
other Governmental Entity of any kind for the stated purpose or with the
probable effect of enjoining or preventing the consummation of this Agreement
and the transactions contemplated herein or to recover damages by reason
thereof. No action or proceeding shall have been instituted by any private
person prior to the Closing Date before a court or other Governmental Entity of
any kind with the probable effect of enjoining or preventing the consummation of
this Agreement and the transactions contemplated hereby.
10. TERMINATION PRIOR TO THE CLOSING DATE.
10.1 Termination. Subject to paragraph 10.2, this Agreement may be
terminated and the purchase and sale of the Purchased Assets contemplated hereby
may be abandoned at any time prior to the Closing Date:
(a) by mutual consent of Purchaser and Seller;
(b) by Purchaser or Seller, without liability to the terminating party on
account of such termination (provided the terminating party is not otherwise in
default or in breach of this Agreement), if the Closing shall not have occurred
by April 30, 2001 or such later date as may hereafter be mutually agreed upon by
the parties hereto; and
(c) by Purchaser or Seller if the Closing shall be prohibited by any order,
decree or injunction of any Governmental Entity and such order, decree or
injunction shall remain in effect after the parties hereto shall have used their
reasonable best efforts to have such order or decree reversed or such injunction
lifted.
10.2 Effect on Obligations. Termination of this Agreement pursuant to this
Article 10 shall terminate all obligations of the parties hereunder, except for
the obligations under paragraph 14; provided, however, that termination pursuant
to paragraphs 10.1(b) or 10.1(c) shall not relieve the defaulting or breaching
party from any liability to any other party hereto.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Any investigation or examination by Purchaser of the business, properties
or affairs of Seller shall not affect the representations and warranties of
18
Seller herein contained, and except as set forth in this paragraph 11, the
respective representations and warranties of the parties herein contained in
Articles 5 and 6 shall survive for a period of one year following the Closing
Date. The representations and warranties set forth in paragraphs 5.1, 5.2, 5.10
and 6.3 shall survive the Closing and remain in full force and effect without
limitation as to time. The respective covenants and agreements of the parties
herein contained shall survive indefinitely, except as otherwise limited by
their terms.
12. INDEMNIFICATION.
12.1 Indemnification by Seller. Seller agrees to indemnify Purchaser hold
it harmless from any and all claims, losses, liabilities, actions or causes of
action, assessments, fines, damages, penalties, costs or expenses (including
reasonable attorneys' fees) (collectively, "Purchaser Losses") which Purchaser,
or any of its officers, directors, parents or subsidiaries or other affiliates
(all of which are included in the term "Purchaser" for purposes of this Article
12), may incur, suffer, become liable for or pay as a result of or in connection
with (a) the inaccuracy or breach of any agreement, covenant, representation or
warranty of Seller contained in this Agreement, any Exhibit or Schedule or other
document or agreement to be delivered pursuant hereto occurring or developing
during the period of survival of such agreement, covenant, representation or
warranty, provided that written notice thereof is given to Seller before the
expiration of any applicable period of survival; (b) non-compliance with any
applicable bulk sales law, registration of bills of sale law, or other
applicable law for the protection of creditors, except for such Purchaser
Losses, resulting from Purchaser's failure to pay or discharge in due course any
Assumed Liability; (c) any assertion against Purchaser of any claim or liability
of Seller not expressly assumed hereunder by Purchaser pursuant to paragraph 2.2
(including, but not limited to any amounts for which Seller is responsible
pursuant to paragraph 2.3); (d) unless expressly assumed by Purchaser hereunder,
the assertion against Purchaser by any person, firm, corporation or Governmental
Entity of any obligation or liability of Seller relating to periods prior to, or
existing on, the Closing Date and thereafter accrued, including without
limitation, tax claims or liabilities; (e) any amounts paid in good faith by
Purchaser to or charged to Purchaser by its customers in respect of goods
purchased by Seller's customers on or before the Closing Date; (f) the failure
of Seller to obtain necessary consents to assignment of any of the Purchased
Assets; or (g) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses incident to any of the foregoing or
in enforcing this indemnity. Purchaser shall give Seller prompt written notice
of any claim, suit or demand which Purchaser believes will give rise to
indemnification by Seller under this paragraph; provided, however, that the
failure to give such notice shall not affect the liability of Seller hereunder
unless the failure to give such notice adversely and materially affects the
ability of Seller to defend itself against a claim or to cure the breach or
inaccuracy giving rise to the claim for indemnification on account thereof.
Except as hereinafter provided, Seller shall have the right to defend and to
direct the defense against any such claim, suit or demand, at Seller's expense
and with counsel of Seller's own choosing, which counsel shall be reasonably
satisfactory to Purchaser. Purchaser shall, at Seller's expense, cooperate in
the defense of any such claim, suit or demand. If Seller, within reasonable time
after notice of a claim, fails to defend Purchaser or if the facts giving rise
to indemnification hereunder shall involve a possible claim by Purchaser or any
of its affiliates against a third party, or the facts concern a claim
constituting or challenging any material rights or assets of Seller acquired by
Purchaser pursuant to this Agreement or seeking an injunction or other equitable
relief against Purchaser or any of its affiliates, Purchaser shall be entitled
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to undertake the defense, compromise or settlement of such claim at the expense
of and for the account and risk of Seller subject to the right of Seller to
assume the defense of such claim at any time prior to the settlement, compromise
or final determination thereof if the only issues remaining therein involve
liability for, or the amount of, money damages to be assessed against Purchaser,
provided Seller will not, without Purchaser's written consent, settle or
compromise any claim or consent to any entry of judgment which does not include
as an unconditional term thereof the giving by the claimant or the plaintiff to
Purchaser a release from all liability in respect of such claim. Notwithstanding
anything contained herein to the contrary, in no event shall Seller's aggregate
indemnification obligation for all Purchaser Direct Losses exceed the greater of
the Purchase Price set forth in Section 2.1 and $750,000.00. For purposes of
this Agreement the term "Purchaser Direct Losses" shall mean Purchaser Losses
incurred or alleged by Purchaser and not arising from or related to any claims
made by any third party or any liability incurred by Purchaser to any third
party or any amounts paid by Purchaser to any third party. Seller shall have no
obligation to reimburse Purchaser under this Section unless and until the
cumulative aggregate amount of such obligation exceeds $25,000.00. Seller's
obligation shall only be with respect to such obligations that exceed
$25,000.00.
12.2 Indemnification by Purchaser/Xxxxxx. Purchaser agrees to indemnify
Seller and hold it harmless from any and all any and all claims, losses,
liabilities, actions or causes of action, assessments, fines, damages,
penalties, costs or expenses (including reasonable attorneys' fees), which
Seller or any of its officers, directors, parents or other affiliates, (all of
which are included in the term "Seller" for purposes of this Article 12), may
incur, suffer or become liable for as result of or in connection with (a) the
inaccuracy or breach of any agreement, covenant, representation or warranty of
Purchaser contained in this Agreement or other document or agreement delivered
pursuant hereto occurring or developing during the period of survival of such
agreement, covenant, representation or warranty, including any claims by any
third parties alleging facts or circumstances which, if true, would constitute
such inaccuracy or breach, provided that written notice thereof is given to
Purchaser before the expiration of any period of survival; (b) any assertion
against Seller of any claim or liability of Purchaser, including without
limitation those assumed hereunder by Purchaser or Xxxxxx, but excluding any as
to which Purchaser is entitled to indemnification pursuant to paragraph 12.1;
(c) the assertion against Seller by any person, firm, corporation or
Governmental Entity of any obligation or liability caused by or resulting from
Purchaser's ownership or use of the Purchased Assets or the conduct of the
Business following the Closing hereunder, including without limitation any
liability and penalties for taxes of Purchaser; or (d) any and all actions,
suits, proceedings, claims, demands, assessments, judgments, costs and expenses
incident to any of the foregoing or in enforcing this indemnity. In case any
claim, suit or demand shall arise hereunder Purchaser shall have the same rights
and duties given to Seller under paragraph 12.1 hereof.
13. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall become effective upon the execution and delivery of
this Agreement (or counterpart thereof) by all parties hereto and shall not be
binding upon any party executing this Agreement (or counterpart thereof) until
executed by all parties hereto.
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14. EXPENSES.
Except as may otherwise be expressly provided herein, Purchaser, on the one
hand, and Seller, on the other hand, shall pay their own expenses in connection
with this Agreement and the transactions contemplated hereby, including
attorneys' and accountants' fees.
15. SALES, USE, TRANSFER AND OTHER TAXES.
Purchaser shall pay all sales taxes and transfer taxes incurred in
connection with the transfer of the Purchased Assets by Seller to Purchaser.
16. NOTICES.
Any notices or other communications required or permitted hereunder shall
be in writing and shall be deemed given when: actually delivered to the person
to whom notice is directed; on the date of the first attempted delivery by the
U.S. Postal Service if mailed by registered or certified mail, return receipt
requested, postage prepaid; on the date of first attempted delivery if sent by
documented overnight delivery service or, to the extent receipt is confirmed, by
telecopy to the parties addressed as follows (or to such other address of which
the parties may have given notice in accordance with this paragraph 16):
In the case of Seller:
Vitality Beverages, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxx, P.A.
X.X. Xxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
In the case of Purchaser and Xxxxxx:
c/x Xxxxxx Beverage Company
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
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with a copy to:
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
17. SUCCESSORS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that
Purchaser, on the one hand, and Seller, on the other hand, shall not assign
their respective obligations hereunder, other than an assignment by Purchaser to
one of its subsidiaries or affiliates, without the prior written consent of the
other party.
18. PARAGRAPH HEADINGS.
The paragraph headings are for the convenience of the parties and in no way
alter, modify, amend, limit, or restrict the contractual obligations of the
parties.
19. GOVERNING LAW; ARBITRATION.
19.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California (without giving effect to
the conflict of law provisions of such State).
19.2 Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement shall be settled by binding arbitration conducted by
JAMS/Endispute. ("JAMS") in accordance with JAMS Comprehensive Arbitration Rules
and Procedures (the "Rules"). The arbitration shall be heard by one arbitrator
to be selected in accordance with the Rules, in Orange County, California.
Judgment upon any award rendered may be entered in any court having jurisdiction
thereof. Within 7 calendar days after appointment the arbitrator shall set the
hearing date, which shall be within 90 days after the filing date of the demand
for arbitration unless a later date is required for good cause shown and shall
order a mutual exchange of what he/she determines to be relevant documents and
the dates thereafter for the taking of up to a maximum of 5 depositions by each
party to last no more than 2 days in aggregate for each party. Both Seller and
Purchaser waive the right, if any, to obtain any award for exemplary or punitive
damages or any other amount for the purpose of imposing a penalty from the other
in any arbitration or judicial proceeding or other adjudication arising out of
or with respect to this Agreement, or any breach hereof, including any claim
that this Agreement, or any part hereof, is invalid, illegal or otherwise
voidable or void. In addition to all other relief, the arbitrator shall have the
power to award reasonable attorneys' fees to the prevailing party. The
arbitrator shall make his or her award no later than 7 calendar days after the
close of evidence or the submission of final briefs, whichever occurs later. The
obligations herein to arbitrate shall not prevent any party from seeking
temporary restraining orders, preliminary injunctions or other procedures in a
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court of competent jurisdiction to obtain interim relief when deemed necessary
by such party and court to preserve the status quo or prevent irreparable injury
pending resolution by arbitration of the actual dispute or to seek a remedy
specifically provided for in this Agreement. All parties hereto acknowledge and
agree that the state and federal courts of the State of California are courts of
competent jurisdiction for purposes of this paragraph and do hereby submit to
the jurisdiction of the appropriate court in the State of California to which
the matter is first submitted by a party for enforcement of any arbitration
award or to obtain any such interim relief as herein provided.
20. ANNOUNCEMENTS.
No press releases, announcements or other disclosure relating to this
Agreement or the transactions contemplated herein will be made or issued to the
press, employees, customers, suppliers or any other person without the joint
approval of Purchaser and Seller (which approval will not be unreasonably
withheld or delayed), except that in the case of any public disclosure required
by law, Seller's approval will not be required but Seller shall be afforded a
reasonable opportunity to review and comment upon the required disclosure.
21. ENTIRE AGREEMENT.
This Agreement, including all Schedules and Exhibits hereto, and all
agreements to be delivered by the parties pursuant hereto represent the entire
understanding and agreement among the parties hereto with respect to the subject
matter hereof and, therefore, supersede all prior negotiations between such
parties and cannot be amended, supplemented or changed orally, but only by an
agreement in writing which makes specific reference to this Agreement or the
agreement delivered pursuant hereto, as the case may be, and which is signed by
the party against whom enforcement of any such amendment, supplement or
modification is sought. Either party hereto may, only by an instrument in
writing, waive compliance by the other party hereto with any term or provision
of this Agreement on the part of such other party hereto to be performed or
complied with. The waiver by any party hereto of any breach of any term or
provision of this Agreement shall not be construed as a waiver of any subsequent
breach.
22. COUNTERPARTS.
This Agreement may be signed in two or more counterparts, each signed by
one or more of the parties hereto so long as each party shall sign at least one
counterpart of this Agreement, all of which taken together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
PURCHASER: XXXXXX XXXXXX JUICE COMPANY
By: /s/ XXXXXX X. XXXXX
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman & CEO
SELLER: PASCO JUICES, INC.
By: /s/ Xxxx Xxxxxx
-------------------------
Name: Xxxx Xxxxxx
Title: President / COO
XXXXXX: XXXXXX BEVERAGE COMPANY
By: /s/ XXXXXX X. XXXXX
-------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman & CEO
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