[Execution Copy]
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ASSET PURCHASE AGREEMENT
by and among
FUTUREBIOTICS, INC.
and
SUPERIOR SUPPLEMENTS, INC.
Dated as of November 19, 1998
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of November 19, 1998 by and between
Futurebiotics, Inc., a Delaware corporation ("Seller) and Superior Supplements,
Inc., a Delaware corporation (the "Buyer").
W I T N E S S E T H :
WHEREAS, the Seller is engaged in the distribution, marketing and sale
of vitamins located at 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the
"Business"); and
WHEREAS, the Seller owns certain assets comprising the Assets (as
hereinafter defined) which are related to the conduct of the Business; and
WHEREAS, the Seller wishes to transfer, and the Buyer wishes to
purchase, the Assets,; and
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the Seller and the Buyer hereby agree as
follows:
ARTICLE I
PURCHASE OF THE ASSETS;
PURCHASE PRICE; CLOSING ADJUSTMENTS; CONDITION OF ASSETS
1.1 TRANSFER OF THE ASSETS. Subject to the terms and conditions set
forth in this Agreement, the Seller agrees that, on the date hereof (the
"Closing Date"), the Seller shall sell, transfer, assign, convey and deliver to
the Buyer, without recourse, representation or warranty except as otherwise
expressly provided herein and Buyer shall purchase from the Seller, all of the
assets (the "Assets") set forth on Schedule 1.1 free and clear of all Liens.
"Liens" means any lien, pledge, hypothecation, mortgage, security interest,
claim, lease, charge, option, right of first refusal, easement, servitude,
transfer, restriction under any stockholder or similar agreement, encumbrance
or any other restrictions or limitations whatsoever.
1.2 NON-ASSUMED LIABILITIES. The Buyer shall not assume nor be
responsible for any liabilities or obligations of the Seller.
1.3 PURCHASE PRICE FOR THE ASSETS. The consideration for the Assets
shall be the (i) the payment to Seller for a period of three (3) years of ten
percent (10%) of all revenues derived by Buyer from the Assets and (ii) payment
to Seller on the Closing Date of an amount equal to the cost of all inventory
sold to Buyer as shown on Schedule 1.3.
1.4 CLOSING ADJUSTMENTS. Any errors or omissions in computing closing
adjustments discovered after Closing Date shall be corrected promptly upon
discovery. The obligation of the parties under this Section shall survive the
Closing.
ARTICLE II
CLOSING
2.1 THE CLOSING.
(a) The consummation of the transactions contemplated by this
Agreement (the "Closing") shall be held simultaneous with the execution of this
Agreement at the offices of Futurebiotics, Inc., 000 Xxxxxxxxx Xxxx, Xxxxxxxxx,
XX 00000.
(b) At the Closing, the Seller shall execute and deliver or cause to
be executed and delivered to the Buyer, all documents and instruments necessary
to transfer to the Buyer, all of the right, title and interest of the Seller in
and to the Assets, including, without limitation:
(i) the Assignment and Assumption Agreement, signed by
the Seller; and
(ii) the Xxxx of Sale, as applicable, signed by the
Seller;
(c) At the Closing, the Buyer shall:
(i) execute and deliver to the Seller the Assignment and
Assumption Agreement; and
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
3.1 ORGANIZATION AND QUALIFICATION. Seller is a corporation validly
existing and in good standing under the laws of the State of Delaware.
3.2 VALIDITY AND EXECUTION OF AGREEMENT. Seller has the full legal
right, capacity and power and all requisite corporate authority and approval
required to enter into, execute and deliver this Agreement and any other
agreement or instrument contemplated hereby, and to perform fully its
obligations hereunder and thereunder. The board of directors of Seller has
approved the transactions contemplated pursuant to this Agreement and each of
the other agreements required to be entered into pursuant hereto by Seller.
This Agreement and such other agreements and instruments have been duly
executed and delivered by Seller and each constitutes the valid and binding
obligation of Seller enforceable against it in accordance with its terms,
except as may be limited by any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws (whether statutory, regulatory or
decisional), now or hereafter in effect, relating to or affecting the rights of
creditors generally or by equitable principles (regardless of whether
considered in a proceeding at law or in equity).
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3.3 NO CONFLICT. Neither the execution and delivery of this Agreement
nor the performance by the Seller of the transactions contemplated hereby will
violate or conflict with (a) any of the provisions of the Certificate of
Incorporation or By-Laws or other organizational documents of the Seller; (b)
result in the acceleration of, or entitle any party to accelerate the maturity
or the cancellation of the performance of any obligation under, or result in
the creation or imposition of any lien in or upon the Assets or constitute a
default (or an event which might, with the passage of time or the giving of
notice, or both, constitute a default) under any material contract to which
Seller is a party.
3.4 THE ASSETS. The Seller owns outright and has good title to all of
the owned Assets free and clear of any lien. The Assignment and Assumption
Agreement and such other conveyancing documents as shall have been executed and
delivered to the Buyer will convey good title to the Assets, free and clear of
any liens.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
4.1 ORGANIZATION AND QUALIFICATION. The Buyer is a corporation validly
existing and in good standing under the laws of the State of Delaware.
4.2 VALIDITY AND EXECUTION OF AGREEMENT. The Buyer has the full legal
right, capacity and power and all requisite corporate authority and approval
required to enter into, execute and deliver this Agreement and any other
agreement or instrument contemplated hereby, and to perform fully its
respective obligations hereunder and thereunder. The board of directors of the
Buyer has approved to the extent required by law the transactions contemplated
by this Agreement and each of the other agreements required to be entered into
pursuant hereto by the Buyer and no other corporate or shareholder approvals
are required. This Agreement and such other agreements and instruments have
been duly executed and delivered by the Buyer and each constitutes the valid
and binding obligation of the Buyer enforceable against it in accordance with
their respective terms, except as may be limited by any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws (whether
statutory, regulatory or decisional), now or hereafter in effect, relating to
or affecting the rights of creditors generally or by equitable principles
(regardless of whether considered in a proceeding at law or in equity).
4.3 NO CONFLICT. Neither the execution and delivery of this Agreement
nor the performance by the Buyer of the transactions contemplated herein will
violate or conflict with (a) any of the provisions of their respective
Certificates of Incorporation or By-Laws or other organizational documents of
Buyer; or (b) result in the acceleration of, or entitle any party to accelerate
the maturity or the cancellation of the performance of any obligation under, or
result in the creation or imposition of any Lien or constitute a default (or an
event which might, with the passage of time or the giving of notice, or both,
constitute a default) under any material contract to which Buyer is a party.
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ARTICLE V
INDEMNIFICATION AND OTHER COVENANTS
5.1 SURVIVAL. Subject to this Section 5.1, all representations,
warranties, covenants and agreements contained in this Agreement or in any
exhibit, certificate, agreement, document or statement delivered pursuant
hereto (an "Ancillary Instrument") shall survive (and not be affected in any
respect by) the Closing and any investigation conducted by any party hereto.
Notwithstanding the foregoing, the representations and warranties contained in
or made pursuant to this Agreement or any Ancillary Instrument and the related
indemnity obligations set forth in Article V, shall terminate on, and no claim
or action with respect thereto may be brought after, the date that is three
years after the Closing Date, except that the representations and warranties
contained in Sections 3.4 shall survive in perpetuity.
5.2 INDEMNIFICATION. (a) The Seller agrees to indemnify, defend and
hold harmless the Buyer and its directors, officers, employees, shareholders
and any affiliates of the foregoing, and their successors and assigns
(collectively, the "Buyer Group") from and against any and all losses,
liabilities (including to the extent arising from third-party claims, punitive
or exemplary damages and fines or penalties and any interest thereon), expenses
(including reasonable fees and disbursements of counsel and expenses of
investigation and defense), claims, Liens or other obligations of any nature
whatsoever (hereinafter individually, a "Loss" and collectively, "Losses")
suffered or incurred by the Buyer Group which, directly or indirectly, arise
out of, result from or relate to, (i) any inaccuracy in or any breach (as of
the Closing Date) of any representation or warranty of the Seller contained in
Article III, (ii) any breach of any covenant or agreement of the Seller
contained in this Agreement or in any other document contemplated by this
Agreement (a "Tax Loss") or (iii) any liability or obligation arising out of
the operation of the Business before the Closing Date.
(b) The Buyer agrees to indemnify, defend and hold harmless the Seller
and its directors, officers, employees, and shareholders, and any Affiliates of
the foregoing, and their successors and assigns from and against any and all
Losses suffered or incurred by them which, directly or indirectly, arise out
of, result from or relate to (i) any inaccuracy in or any breach (as of the
Closing Date) of any representation or warranty of the Buyer contained in
Article IV, (ii) any breach of any covenant or agreement of the Buyer contained
in this Agreement or in any other document contemplated by this Agreement, or
(iii) any liability or obligation arising out of the operation of the Business
after the Closing Date.
5.3 METHOD OF ASSERTING CLAIMS. The party making a claim under this
Article V is referred to as the "Indemnified Party" and the party against whom
such claims are asserted under this Article V is referred to as the
"Indemnifying Party". All claims by any Indemnified Party under this Article V
shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an Indemnifying
Party would be liable to an Indemnified Party hereunder is asserted against or
sought to be collected from such Indemnified Party by a third party, said
Indemnified Party shall with reasonable promptness notify in writing the
Indemnifying Party of such claim or demand, specifying the nature of the
specific basis for such claim or demand, and the amount or the estimated amount
thereof to the
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extent then feasible (which estimate shall not be conclusive of the final
amount of such claim and demand; any such notice, together with any notice
given pursuant to Section 5.3(b) hereof, collectively being the "Claim
Notice"); provided, however, that any failure to give such Claim Notice will
not be deemed a waiver of any rights of the Indemnified Party except to the
extent the rights of the Indemnifying Party are actually prejudiced or harmed.
The Indemnifying Party, upon request of the Indemnified Party, shall retain
counsel (who shall be reasonably acceptable to the Indemnified Party) to
represent the Indemnified Party, and shall pay the fees and disbursements of
such counsel with regard thereto, provided, further, that any Indemnified Party
is hereby authorized prior to the date on which it receives written notice from
the Indemnifying Party designating such counsel, to retain counsel, whose
reasonable fees and expenses shall be at the expense of the Indemnifying Party,
to file any motion, answer or other pleading and take such other action which
it reasonably shall deem necessary to protect its interests or those of the
Indemnifying Party until the date on which the Indemnified Party receives such
notice from the Indemnifying Party. After the Indemnifying Party shall retain
such counsel, the Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties of any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Indemnifying Party shall not,
in connection with any proceedings or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
such firm for the Indemnified Party (except to the extent the Indemnified Party
retained counsel to protect its (or the Indemnifying Party's) rights prior to
the selection of counsel by the Indemnifying Party). The Indemnified Party
agrees to cooperate with the Indemnifying Party and its counsel in contesting
any claim or demand which the Indemnifying Party defends. No claim or demand
may be settled by an Indemnifying Party or, where permitted pursuant to this
Agreement, by an Indemnified Party without the consent of the Indemnified Party
in the first case or the consent of the Indemnifying Party in the second case,
which consent shall not be unreasonably withheld, unless such settlement shall
be accompanied by a complete release of the Indemnified Party in the first case
or the Indemnifying Party in the second case.
(b) In the event any Indemnified Party shall have a claim against any
Indemnifying Party hereunder which does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Party shall send a Claim Notice with respect to such claim to the
Indemnifying Party. If the Indemnifying Party does not dispute such claim, the
amount of such claim shall be paid to the Indemnified Party within thirty (30)
days of receipt of the Claim Notice.
(c) So long as any right to indemnification exists pursuant to this
Article V, the affected parties each agree to retain all books, records,
accounts, instruments and documents reasonably related to the Claim Notice. In
each instance, the Indemnified Party shall have the right to be kept informed
by the Indemnifying Party and its legal counsel with respect to all significant
matters relating to any legal proceedings. Any information or documents made
available to any party hereunder, which information is designated as
confidential by the party providing such information and which is not otherwise
generally available to the public, or which
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information is not otherwise lawfully obtained from third parties or not
already within the knowledge of the party to whom the information is provided
(unless otherwise covered by the confidentiality provisions of any other
agreement among the parties hereto, or any of them), and except as may be
required by applicable law or requested by third party lenders to such party,
shall not be disclosed to any third Person (except for the representatives of
the party being provided with the information, in which event the party being
provided with the information shall request its representatives not to disclose
any such information which it otherwise required hereunder to be kept
confidential).
5.4 SUBROGATION; EXCLUSIVITY OF REMEDY. Notwithstanding anything
contained in this Agreement, upon payment of any amount pursuant to any
indemnification claim, the Indemnifying Party shall be subrogated, to the
extent of such payment, to all of the Indemnified Party's rights of recovery
against any third party with respect to the matters to which such
indemnification claim relates.
ARTICLE VI
MISCELLANEOUS
6.1 SALES AND TRANSFER TAXES. All required filings under any applicable
Federal, state, foreign or local sales tax, stamp tax or similar laws or
regulations shall be made in a timely manner by the party responsible therefor
under such laws and regulations, and, within ten (10) days following the
Closing, such party shall deliver to the other parties either (a) proof of the
payment of any sales tax assessed pursuant to such filings or (b) statements of
no sales tax due, as the case may be. Buyer shall pay any and all transfer,
sales or stamp taxes and any similar taxes or assessments imposed on the
transfer of the Assets in accordance with the terms of this Agreement,
including but not limited to any New York state real property transfer tax.
6.2 POST-CLOSING FURTHER ASSURANCES. At any time and from time to time
after the Closing Date at the request of either party, and without further
consideration, the other party will execute and deliver, or cause the execution
and delivery of, such other instruments of sale, transfer, conveyance,
assignment and confirmation and take or cause to be taken such other action as
the party requesting the same may reasonably deem necessary or desirable in
order to transfer, convey and assign more effectively to the requesting party
all of the property and rights intended to be conveyed to such party pursuant
to the provisions of this Agreement.
6.3 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, sent by facsimile transmission or sent by prepaid air courier
or certified, registered or express mail, postage prepaid. Any such notice
shall be deemed to have been given (a) when received, if delivered in person,
sent by facsimile transmission and confirmed in writing within three (3)
business days thereafter or sent by prepaid air courier or (b) two (2) business
days following the mailing thereof, if mailed by certified first class mail,
postage prepaid, return receipt requested, in any such case as follows (or to
such other address or addresses as a party may have advised the other in the
manner provided in this Section 6.4):
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If to Seller, to:
Xx. Xxxxxxxx Xxxxxxxx
Futurebiotics, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
If to Buyer, to:
Xx. Xxxxxxxx Xxxxx
Superior Supplements, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
6.5 PUBLICITY. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made without advance
approval thereof by the Buyer and the Seller.
6.6 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules) and the agreements, certificates and other documents delivered
pursuant to this Agreement contain the entire agreement among the parties with
respect to the transactions described herein, and supersede all prior
agreements, written or oral, with respect thereto.
6.7 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties hereto or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof.
6.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
6.9 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors,
assigns and legal representatives. This Agreement is not assignable except by
operation of law and any other purported assignment shall be null and void.
6.10 VARIATIONS IN PRONOUNS. All pronouns and any variations thereof refer
to the masculine, feminine or neuter, singular or plural, as the context may
require.
6.11 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
6.12 EXHIBITS AND SCHEDULES. The Exhibits and Schedules are a part of this
Agreement as if fully set forth herein. All references herein to Sections,
subsections, clauses, Exhibits and Schedules shall be deemed references to such
parts of this Agreement, unless the context shall otherwise require.
6.13 EFFECT OF DISCLOSURE ON SCHEDULES. Any item disclosed on any Schedule
shall be deemed to be disclosed in connection with (a) the specific
representation and warranty to which such Schedule is expressly referenced, (b)
any specific representation and warranty which expressly cross-references such
Schedule and (c) any specific representation and warranty to which any other
Schedule to this Agreement is expressly referenced if such other Schedule
expressly cross-references such Schedule.
6.14 HEADINGS. The headings in this agreement are for reference only, and
shall not affect the interpretation of this Agreement.
6.15 SEVERABILITY OF PROVISIONS. If any provision or any portion of any
provision of this Agreement or the application of such provision or any portion
thereof to any Person or circumstance, shall be held invalid or unenforceable,
the remaining portion of such provision and the remaining provisions of this
Agreement, or the application of such provision or portion of such provision as
is held invalid or unenforceable to persons or circumstances other than those
as to which it is held invalid or unenforceable, shall not be affect thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FUTUREBIOTICS, INC.
By: /s/ Xxxxxxxx Xxxxxxxx
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Name: Xxxxxxxx Xxxxxxxx
Title: Chief Executive Officer
SUPERIOR SUPPLEMENTS, INC.
By: /s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
Title: Chief Executive Officer
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SCHEDULE 1.1
FUTUREBIOTICS PRIVATE LABEL CUSTOMERS
1) Xx. Xxxxxx (Best Process, Xxxxxx Health Systems)
2) Trader Joes
3) American Wellness Group (Vital Max Vitamins)
