EX-10.10
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, entered into as of the 30th day of June, 1996, by and
between MOUNTAINWOOD SPRING WATER CO., INC., a New Jersey Corporation, and WHITE
MOUNTAIN COMPANY, INC., a New Jersey Corporation, both having their
administrative offices at 00-00 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxx Xxxxxx 00000
(hereinafter collectively the "Seller") and PURO WATER GROUP, INC., a Delaware
Corporation, having an office at 000 Xxxxx Xxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx,
(hereinafter the "Buyer").
DESCRIPTION OF TRANSACTION
This transaction comprises the acquisition by Buyer of certain of the
assets, accounts, customer lists, goodwill, etc., owned by the Seller, which
comprise solely the Seller's "direct" or "retail" business (the "Purchased
Business"), all as more particularly set forth herein. Seller shall retain
ownership of all of its other assets relating to its "bulk" and "wholesale"
business, which it shall continue to operate.
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WITNESSETH:
WHEREAS, in consideration of the promises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE
PURCHASED ASSETS; EXCLUDED ASSETS
1.01 PURCHASED ASSETS. Upon the terms and conditions hereinafter set
forth, and for the purchase price as set forth in Article II Seller shall sell,
assign and transfer to Buyer and Buyer shall purchase and acquire from Seller at
the Closing (as hereinafter defined) all of the "Purchased Assets" as follows:
(a) All of the customers and accounts, as more fully set forth on
Exhibit "A" to be attached hereto and made a part hereof (the "Customers");
(b) Approximately 1450 coolers (hot and cold, cold, refrigerated, etc.)
utilized by the Customers together with all leases from Seller to the Customers.
A listing of the coolers and a specimen copy of the lease to be attached hereto
as Exhibit "B".
(c) All of Seller's inventory and stock-in-trade as of the date of
Closing;
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(d) All telephone numbers currently in usage by Seller (including New
Jersey and out of State and 800 lines) regarding the Purchased Business;
(e) All customer lists, original leases, and all original customer
files;
(f) All product and customer sales histories;
(g) All copyrights, names, labels and trademarks used in the conduct of
the Purchased Business, if any, and if none exists, the common law right to
usage of all such marks;
(h) All equipment and bottles utilized to properly service the
Customers (E.G. all bottles, crates, racks, etc.), as well as any
equipment, parts, supplies, tools, coolers, owned by Seller; and
(i) The following vehicles, which are being sold "as is":
1995 International Truck (4 Bay/160 bottles)
1985 International Truck (4 Bay/160 bottles)
1990 Ford Truck (4 Bay/160 bottles)
1988 International Truck (4 Bay/160 bottles)
Highcube (120 bottles)
Van (80 bottles)
All appropriate documents necessary to transfer and register will be executed
and delivered.
All of the foregoing being referred to as the "Purchased Assets". All
of the above Purchased Assets shall be delivered by the Seller to the Buyer in
"as is" condition.
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1.02 EXCLUDED ASSETS. The following assets of Seller (the "Excluded
Assets") are not included in the purchase and sale hereunder:
(a) Seller's cash on hand and any accounts and notes receivable;
(b) Seller's books and records; provided, however, that Buyer shall
have access to Seller's books and records in accordance with Section 7.03
hereof;
(c) Any asset of Seller not specifically included in the Purchased
Assets.
1.03 SELLER'S ACCOUNT RECEIVABLES
The account receivables of Seller shall remain the property of the
Seller and shall not be transferred to Buyer. Seller shall furnish to Buyer a
complete list of all uncollected Account Receivables setting forth the name and
address of debtor and the amount owed by each. Buyer agrees to pay over to
Seller all amounts received from the debtors on such list at least monthly after
the Closing Date, until each such receivable is paid in full. All sums
received, unless specifically allocated by any debtor, but not if made at
Buyer's request, shall be applied to the indebtedness from each debtor in order
of oldest maturity first. In the event any such receivable remains unpaid or
uncollected at the end of one hundred twenty (120) days, Seller shall be at
liberty to pursue collection in its sole
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discretion, but Buyer shall nevertheless remit to Seller any amounts it may
thereafter receive from any such debtor promptly after receipt thereof.
ARTICLE II
PURCHASE PRICE - PAYMENT
2.01 PRICE OF BUSINESS AND ASSETS; PAYMENT. The purchase price for the
purchase and sale hereunder shall consist of a payment of ONE MILLION TWO
HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($1,250,000) payable as follows:
(a) At closing by bank or certified funds $ 500,000.00
(b) Execution and delivery of a Negotiable
Promissory Note in form and substance
similar to Exhibit "C" the terms and
conditions of which are incorporated
herein by reference (the "Negotiable
Promissory Note") $ 500,000.00
(c) Execution and delivery of a Non-Negotiable
Promissory Note in form and substance similar
to Exhibit "D" the terms and conditions
of which are incorporated herein by
reference (the "Non-Negotiable Promissory
Note") $ 250,000.00
TOTAL $1,250,000.00
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2.02 SECURITY FOR NOTE. As collateral security for the Negotiable
Promissory Note described above, the Buyer will
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deliver a Letter of Credit, issued by European American Bank or such other
commercial bank acceptable to the Seller in its reasonable discretion, which
shall be in the form of Exhibit "E" attached hereto and incorporated herein as
if fully set forth (the "Letter of Credit"), modified to relate to the terms of
the Negotiable Promissory Note.
2.03. PURCHASE PRICE ALLOCATION. The Payment of the purchase price
shall be allocated among the Purchased Assets pursuant to a schedule to be
agreed upon by the parties at the Closing.
Seller and Buyer agree that this allocation shall represent the fair
market value for the Purchased Assets and the Non Competition Agreements.
2.04 ADJUSTMENT TO PURCHASE PRICE. The parties agree that the Purchase
Price has been determined based on the mutual expectation of the parties that
for the twelve (12) month period immediately following the Closing (the "First
Year") the gross sales to the Customers, exclusive of UMDNJ, will be, at least,
$932,000 (the "First year Revenue"). When and in the event the gross sales
reflected on the Gross Sales Statement (as defined herein) is less than
$832,000, representing +- 85% of the First Year Revenue, the parties agree to
adjust the Purchase Price as follows:
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Gross Sales equal to
or greater than $832,000 - No adjustment
Gross Sales less than
$832,000 - An adjustment equal
to $1.30 of every dollar
of Gross Sales
less than $832,000;
provided however, that the maximum total adjustment shall, in no event,
exceed $250,000.00.
For purposes of this Section, gross sales shall include the aggregate
amount charged, net of sales tax, to the Customers, for the rental of
coolers, the sales of water, paper and allied products as well as coffee and
other products and beverages sold by Buyer; provided, however, that in any
instance where the rental fee for coolers or the price that is less than the
price charged by Seller for the same rental or product than that charged as
of the Closing Date ("Seller's Price") then solely for purposes of the
calculation of gross sales, the amount charged by the Buyer shall be
increased to be the amount that would have been charged at Seller's price
("Gross Sales"). Within thirty (30) days of the first anniversary of the
Closing Date, Seller and Buyer shall prepare a statement of Gross Sales for
the one year period following the Closing (the "Gross Sales Statement").
Seller agrees that Buyer's remedy for this adjustment is to credit against
the principal balance due on the
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Non-Negotiable Promissory Note the amount of any adjustment determined in
accordance with this Section 2.04 and the monthly payment due under the
Non-Negotiable Promissory Note shall be adjusted to reflect the new principal
balance. The parties agree to meet within thirty (30) days after the First
Year to review any proposed adjustment(s) and to execute and deliver an
amendment to the Non-Negotiable Promissory Note to reflect any adjusted
principal balance which adjustment(s) shall be deemed effective July 1, 1997.
If the parties are unable to agree on any proposed adjustment(s), the
mechanism of Section 12.04 shall be utilized.
The Buyer agrees to provide sales information on the Customers on a
monthly basis and Seller shall have the right to reasonable access to the
sales and revenue books and records of the Buyer to verify the accuracy of
all sales information relative to sales to the Customers.
Buyer agrees to use its best efforts, consistent with its practices with
its existing customers to maximize the sales potential to the Customers and
not to raise the Seller's Price for a period of one year.
Any loss of Gross Sales due to the poor performance of service by the
Buyer after the Closing shall NOT be deducted from the Gross Sales
calculation.
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ARTICLE III
ASSUMPTION AND PAYMENT OF
SPECIFIC CONTRACTS OR LIABILITIES
3.01 ASSUMPTION. It is understood and agreed by the parties hereto
that Buyer shall assume by an instrument acceptable to Seller and its
counsel, as additional consideration for the Purchased Assets in addition to
the Payment the following specific contracts or liabilities:
(a) SALES ORDERS. Any and all liability of the Seller arising from
and/or accrued in connection with orders on hand of the Seller yet unshipped
prior to the Closing (the "Unshipped Orders"), excepting any claims for
sales commissions claimed by any person not employed by Buyer. The Buyer
agrees to fulfill all Unshipped Orders after the Closing. The Seller
represents that all Unshipped Orders were booked in the ordinary and normal
course of its business using previously established gross profit margins.
(b) INVENTORY PURCHASES. Any and all liability of the Seller pursuant
to any Purchase Orders (the "Inventory Purchases") of the Seller
outstanding at the Closing requiring the Seller to purchase inventory items
for resale in the normal course of its business. Buyer agrees to accept such
orders and to satisfy all payment for same. From and after the date of this
Agreement, the Seller agrees not to place any Purchase Orders for
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Inventory Purchases for delivery after June 27, 1996 without the prior
approval of the Buyer.
3.02 NO OTHER LIABILITIES. Except as set forth herein, the Buyer is
not assuming, adopting, or taking over and shall not be deemed to have
assumed adopted or taken over, and Sellers and Stockholders hereby indemnify
the Buyer with respect to any obligation, liabilities or responsibilities of
the Seller inclusive of but not limited to the following:
(a) any liability of Seller for federal, state or local taxes of any
nature or description;
(b) any liability or obligation of Seller for damages with respect to
any breach of warranty or default in the performance by Seller of any
agreement including product liability;
(c) any liability for claims of creditors for debts incurred by Seller
prior to the Closing.
(d) any liability or obligation, contingent or otherwise, arising out
of any investigation or litigation or violation of law, rules or regulations
existing prior to the Closing Date or arising out of the Sellers conduct;
(e) any accrued obligations in connection with the Excluded Assets or
Seller's insurance policies;
(f) any liability or obligation in respect of any retirement,
severance, vacation, XXX or Xxxxx plan of Seller; and
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(g) any liabilities or obligations of Seller to any bank or finance
company or any other person under any note, covenant, agreement or instrument
for the payment of money.
of Seller.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that the following
statements are true:
4.01 POWER AND AUTHORITY. Seller has full power and authority to
execute and deliver this Agreement and such other agreements and instruments
as are to be executed and delivered by it pursuant hereto and to consummate
the transaction contemplated hereby and thereby.
4.02 CORPORATE ACTS. All proceedings required to be taken by or on the
part of Seller to authorize it to execute, deliver and perform this Agreement
and such other agreements and instruments have been duly and properly taken.
4.03 GOOD STANDING. Sellers are corporations validly organized under
the laws of the State of New Jersey and in good standing in such State.
4.04 EXECUTION AND DELIVERY. This Agreement has been duly executed and
delivered by Seller and constitutes, and such other agreements and
instruments when duly executed and delivered
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by Seller, will constitute, legal valid and binding obligations of Seller,
enforceable in accordance with their respective terms.
4.05 NO BREACH. The execution and delivery by Seller, of this
Agreement and such other agreements and instruments, and its consummation of
the transactions contemplated hereby and thereby, will not violate, conflict
with, or result in any breach of, or constitute a default (of an event which
with notice or lapse of time or both would become a default) under, or result
in the creation of a lien or encumbrance on any of the properties or assets
of Seller, pursuant to any indenture, mortgage, lease, agreement or other
instrument to which Seller, is a party or by which Seller, or its properties
or assets may be bound or affected.
4.06 GOOD TITLE. Seller is now, and on the closing date will be, the
legal and equitable owner of merchantable title to all of the property and
assets to be sold and transferred to Buyer hereunder, free and clear of any
and all liens, charges, encumbrances, security interests and other burdens of
every kind.
4.07 NO VIOLATION. To the best of Seller's knowledge, information and
belief, there are no violations against the Seller and the personal property
sold herein by any local, state or federal agency. Seller further warrants
and represents that it owes no taxes to the local, state, federal or other
agency for
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income or any other taxes that it will not pay and that it and its
shareholders will indemnify the Buyer from any claims which may be made for
any said taxes which may constitute a lien on the assets of Seller herein
being conveyed.
4.08 CONVEYANCE FREE AND CLEAR. The xxxx of sale and instruments of
assignment to be delivered at the closing will transfer all of the Purchased
Assets enumerated in the attached schedules, free of all encumbrances, and
will contain the usual warranties and affidavit of title.
4.09 LIABILITIES. Seller, will pay in full all debts and liabilities
of Seller, including any and all business and employment tax liabilities
which may be or become due and owing, and Seller, and Xxxxxx X. Xxxxxx, III,
and Xxxxxxx X. Xxxx, individually, agree to indemnify and hold Buyer harmless
from any and all such liabilities, including any and all taxes owed by Seller.
4.10. REVENUE. The gross sales booked by Seller from the Purchased
Business for the year 1995 was not less than $932,000, exclusive of UMDNJ.
4.11 NO APPROVAL. No approval, authorization, consent or other order
or action of or filing with any court, administrative agency, other
governmental authority, or other third party is required for the execution
and delivery by Seller of this
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Agreement or such other agreements or instruments, or consummation of the
transactions contemplated hereby or thereby.
4.12 LITIGATION. Seller is not engaged in or threatened with any
action, investigation or proceeding before any court or governmental agency
affecting Seller or any of its properties, assets or business.
4.13 COMPLIANCE WITH LAWS. Seller is in compliance with all federal,
state and local laws, rules, regulations and order applicable to the
Purchased Business, including without limitation, zoning, anti-pollution,
occupational safety and health laws and regulations, and has all licenses and
permits required for the proper conduct of the business.
4.14 LABOR CONTRACTS. Seller is not a party to a collective bargaining
agreement with any labor union; nor is Seller a party to any pension,
profit-sharing or other employee benefit plan.
4.15 TAXES. Seller has or will file all federal, state and local tax
return required to be filed, pertaining to Seller, its business or otherwise,
and all such tax returns are true, correct and complete. All taxes due or
collectible by or for any governmental agency from the Seller have been, or
will be, paid in full.
4.16 FULL DISCLOSURE. No representation, warranty or covenant made by
Seller in this Agreement, and no certificate,
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schedule or exhibit given or delivered to Buyer in connection with or
pursuant to this Agreement, contains any knowingly untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained in this Agreement or the matters disclosed in such
certificate, schedule or exhibit, in the light of circumstances under which
such statements or disclosures were made, not misleading.
4.17 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties and agreements made herein and in the Exhibits hereto by the
Seller shall remain operative and in full force and effect for two (2) years
from and after the Closing Date, except that representations, warranties and
agreements based upon tax claims or litigation shall survive for their
respective statutes of limitation period.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby warrants to Seller that the following statements are true:
5.01 POWER OF AUTHORITY. Buyer has full power and authority to execute
and deliver this Agreement and such other agreements and instruments to be
executed and delivered by it
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pursuant hereto and to consummate the transaction contemplated hereby and
thereby.
5.02 CORPORATE ACTS. All corporate acts and other proceedings required
to be taken by or on the part of Buyer to authorize it to execute, deliver
and perform this Agreement and such other agreements and instruments and the
transactions contemplated hereby have been duly and properly taken.
5.03 EXECUTION AND DELIVERY. This Agreement has been duly executed and
delivered by Buyer and constitutes, and such other agreements and instruments
when duly executed and delivered by Buyer will constitute, legal, valid and
binding obligations of Buyer enforceable in accordance with their respective
terms, subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally from time to time in effect, and
subject to any equitable principles limiting the right to obtain specific
performance of certain obligations of Buyer hereunder the thereunder.
5.04 NO BREACH. The execution and delivery by Buyer of this Agreement
and such other agreements and instruments, and its consummation of the
transactions contemplated hereby and thereby, will not violate, conflict
with, or result in any breach of, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or result
in the
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creation of a lien or encumbrance on any of the properties or assets of Buyer
pursuant to, the Certificate of Incorporation or By-laws of Buyer or any
indenture, mortgage, lease, agreement or other instrument to which Buyer is a
party or by which Buyer or its properties or assets may be bound or affected.
5.05 NO APPROVAL. No approval, authorization, consent or other or
action of or filing with any court, administrative agency, governmental
authority, or other third party is required for the execution and delivery by
Buyer of this Agreement or such other agreements or instruments or
consummation of the transactions contemplated hereby or thereby.
5.06 NO OTHER REPRESENTATIONS OF SELLER. The Buyer acknowledges and
agrees that it has examined and inspected the Purchased Assets to be sold and
transferred to Buyer hereunder and is satisfied with the quality and quantity
thereof and their value, and agree to accept the same all in their "as is"
condition and state of repair. The Buyer further represents to the Sellers
that the Purchased Assets have been inspected and that it has been assured by
means independently of the Seller or of any agent of the Seller of the truth
of all facts material to this Agreement, and that the Purchased Assets, as
they are described in this Agreement, are and have been purchased by the
Buyer as a result of such inspection or investigation and not by or through
any representations made by the Seller, or by an agent
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of the Seller. The Buyer hereby expressly waives any and all claims for
damages or for rescission or cancellation of this Agreement because of any
representations made by the Seller or by any agent of the Seller, other than
such representations as may be contained in this Agreement. The Buyer further
agrees that the Seller and any and all agents of the Seller shall not be
liable for or on account of any inducements, promises, representations, or
agreements not contained in this Agreement, that no agent or employee of the
Seller is or has been authorized by the Seller to make any representations
with respect to the Purchased Business, and that if any such representations
have been made they are wholly unauthorized and not binding on the Seller.
Buyer further represents that it has been and is represented by independent
counsel of its choosing and has engaged and sought other professional advice
as it, its officers, directors and shareholders deemed appropriate under the
circumstances.
5.07 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of Buyer shall survive the Closing hereof for a period of two
(2) years.
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ARTICLE VI
CERTAIN AGREEMENTS AND ASSURANCES
OF SELLER PRIOR TO CLOSING
6.01 DUE DILIGENCE. Buyer acknowledges that Seller has granted
reasonable access to Buyer's representatives for the performance of due
diligence.
6.02 ACTION CONSISTENT WITH AGREEMENT. Seller shall not voluntarily
undertake any course of action inconsistent with the satisfaction of the
requirements of the conditions applicable to them set forth in this
Agreement, and Seller shall promptly do all such acts and take all such
measures as may be appropriate to enable it to perform as early as
possible the obligations herein provided to be performed by it.
ARTICLE VII
POST-CLOSING COVENANTS AND AGREEMENTS OF SELLER AND BUYER
7.01 SELLER'S COVENANT REGARDING OBLIGATIONS. From and after the
date of the Closing, Seller shall, in a timely fashion, fully pay, or
otherwise satisfy, all creditors, discharge any and all obligations to
any taxing authority, and satisfy all obligations and liabilities of
Seller not specifically assumed by the Buyer hereunder. Seller, will
pay in full all liabilities of Seller, including any and all business
tax liabilities which may be or become due and owing, and Seller, and
Xxxxxx X. Xxxxxx, III
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and Xxxxxxx X. Xxxx, individually, agree to indemnify and hold Buyer
harmless from any and all such liabilities, including any and all
taxes owed by Seller, if any. The covenant contained in this
Section 7.01 shall survive the Closing hereof for the same period as
the survival of the Representations and Warranties set forth in
Section 4.17.
7.03 ACCESS TO RECORDS AFTER CLOSING. After the Closing,
Seller agrees that it will give, or cause to be given, to the
Buyer and its representatives, during normal business hours and
at Buyer's expense, such reasonable access to the books, records
and files of Seller, as the case may be with respect to the
Purchased Business as is reasonably necessary to allow Buyer to
obtain information regarding products, deliveries, Customers,
sales and inventory suppliers regarding the Purchased Business,
and to make copies of such information to the extent reasonably
necessary.
7.04 TELEPHONE NUMBERS USED BY SELLER. Seller agrees to
take any action reasonably requested by Buyer to effect a transfer,
at Buyer's expense, from Seller to Buyer of all telephone numbers
in use by Seller as of the Closing Date (including New Jersey
and out of State and 800 lines) applicable to the Purchased
Business.
7.05 CUSTOMER NOTICE. The Seller and Xxxxxxx X. Xxxx shall
join in a "Welcome" letter to the Customers and Xxxxxxx X.
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Xxxx shall personally introduce the appropriate person(s) of the
Buyer to the twenty (20) largest and "key" Customers to be
identified by the Seller.
7.06. TRANSITION. For a period of sixty (60) days from the
Closing, Xxxxxxx X. Xxxx will make himself reasonably available
to the Buyer, if requested, and upon reasonable advance notice,
without charge or fee, at East Orange, New Jersey. For a period
of one (1) year from the Closing, Xxxxxx X. Xxxxxx, III, will make
himself reasonably available to the Buyer, if requested, and upon
reasonable advance notice, without charge or fee, at Xxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxx Xxxxxx.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to proceed with the Closing shall be
subject to the fulfillment of the obligations herein contained, the
delivery of documents herein referred to, and the fulfillment of the
conditions set forth below, the fulfillment of any of which Seller
may waive:
8.01 PAYMENT. The payment required by Section 2.02 shall have
been made.
8.02 DELIVERY OF NOTES. The Negotiable Promissory Note and the
Non-Negotiable Promissory Note shall be executed and delivered.
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8.03 LETTER OF CREDIT. The Letter of Credit shall be executed
and delivered.
8.04 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer which are contained in Article V of this Agreement
shall be true as of the Closing as though such representations and
warranties were made as of the Closing.
8.05 SUPPLY AGREEMENT. The parties shall have entered into an
agreement for the supply in bulk of spring water to the East Orange,
New Jersey, facility of the Buyer, in form and substance similar to
Exhibit "F" attached hereto.
8.06 OPTION. The parties shall have entered into a mutually
satisfactory agreement granting the Sellers the option to purchase
up to 50,000 shares of the Buyer's Common Stock at a price equal
to one hundred percent (100%) of the per share price offered by
the Buyer in connection with any initial public offering of SEC
registered shares of any class of Common Stock of the Buyer
(the "Option Agreement").
8.07 COVENANTS AND AGREEMENTS. Buyer shall have performed and
complied with all covenants and agreements required by this
Agreement to be performed or complied with by it prior to or at the
date of Closing.
8.08 OFFICER'S CERTIFICATE. Buyer shall have delivered to Seller
a certificate, in form and substance satisfactory to Seller, of an
officer of Buyer, dated the date of Closing,
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certifying to the fulfillment of the conditions specified in
Sections 8.04 and 8.07 hereinabove.
8.09 RESOLUTIONS AND OPINION. Buyer shall have delivered to Seller
a certified copy of the resolutions of the Board of Directors of Buyer
authorizing this Agreement and the transactions contemplated herein.
Buyer shall also have delivered the opinion of Buyer's counsel as to such
matters as may be reasonably requested by Seller or its counsel.
8.10 APPROVAL OF COUNSEL. All actions, proceedings, instruments,
agreements and documents required to carry out the transactions
contemplated by this Agreement and incidental thereto and all other
related legal matters shall have been resolved satisfactorily to and
approved by Xxxxxx & Xxxxxx, counsel to Seller, and such counsel shall
have been furnished with such copies (certified, if requested) of all
such actions, proceedings, instruments, agreements and documents as
they have reasonably requested.
ARTICLE IX
CONDITION PRECEDENT TO
OBLIGATIONS OF BUYER
The obligation of Buyer to proceed with the Closing shall be
subject to the fulfillment of the obligations herein contained, the
delivery of documents herein referred to, and the
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fulfillment of the conditions set forth below, the fulfillment of
any of which Buyer may waive:
9.01 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller which are contained in this Agreement,
shall be true as of the Closing as though such representations
and warranties were made as of the Closing.
9.02 SUPPLY AGREEMENT. The parties shall have entered
into an agreement for the supply in bulk of spring water to
the East Orange, New Jersey, facility of the Buyer.
9.03 OPTION AGREEMENT. The parties shall have entered
into the Option Agreement.
9.04 COVENANTS AND AGREEMENTS. Seller shall have
performed and complied with all covenants and agreements required
by this Agreement to be performed or complied with by it prior to
or at the date of the Closing.
9.05 OFFICER'S CERTIFICATE. Seller shall have delivered
to Buyer a certificate, in form and substance satisfactory to
Buyer, of an appropriate officer of Seller, dated the date of the
Closing, certifying, in such detail as Buyer may reasonably request,
to the fulfillment of the conditions specified in Sections 9.01
and 9.04 hereinabove.
9.06 RESOLUTIONS AND OPINION. Seller shall have delivered
to Buyer (i) a certified copy of the resolution of the Board of
Directors of Seller authorizing this Agreement and the
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transactions contemplated herein; (ii) a written consent to the proposed
purchase and sale executed by all of the shareholders of Seller; and (iii)
opinion of Seller's counsel as to such matters as may be reasonably requested
by Buyer or its counsel.
9.07 NO LITIGATION. There shall not be pending any litigation,
arbitrations, proceeding or governmental investigation involving Seller as a
party since the date of execution of this Agreement.
9.07 APPROVAL OF COUNSEL. All actions, proceedings, instruments,
agreements and documents required to carry out the transactions contemplated
by this Agreement and incidental thereto and all other related legal matters
shall have been resolved satisfactorily to and approved by Lev & Berlin,
Esqs., of Norwalk, Connecticut, counsel to Buyer, and such counsel shall have
been furnished with such copies (certified, if requested) of all such
actions, proceedings, instruments, agreements and documents as they have
reasonably requested.
ARTICLE X
NON-COMPETITION AGREEMENT
10.01 NON-COMPETITION AGREEMENT. The Seller, Xxxxxxx X. Xxxx and Xxxxxx
X. Xxxxxx, III agree that from and after the Closing they will not, without
the Buyer's prior written consent, directly or indirectly, own, manage,
operate, join, control, or
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participate in the ownership, management, operation or control of, or be
connected as an officer, employee, partner or otherwise with, any business
for a period of five (5) years after closing that will, in any manner,
directly or indirectly compete with, or become interested in any competitor
of the Buyer regarding the Purchased Business throughout the States of New
Jersey, New York, Pennsylvania and Connecticut. The parties agree that the
remedy at law for any breach by them of the foregoing will be inadequate and
that the Buyer shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damage to the Buyer.
ARTICLE XI
THE CLOSING
11.01 TIME, DATE AND PLACE. The Closing hereunder (the "Closing")
shall take place on June 27, 1996, and shall be conducted at the offices of
Xxxxxx and Xxxxxx, 0000 Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000.
11.02 DOCUMENTS TO BE DELIVERED BY SELLER AT THE CLOSING. At the
Closing hereunder, Seller shall deliver to Buyer:
(a) a duly executed xxxx of sale (the "Xxxx of Sale") in the form and
substance set forth in the annexed Exhibit "G", made a part of this Agreement;
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(b) a duly executed Assignment of Leases in the form and substance set
forth in the annexed Exhibit "H";
(c) a duly executed certificate in the form described in Section 9.05
hereinabove;
(d) certified resolutions as described in Section 9.06 hereinabove;
(e) such other documents, etc., as may be reasonably required by the
Buyer or its counsel; and
(f) such other documents, etc, as may be reasonably required by the
Seller or its counsel;
(g) motor vehicle titles duly endorsed; and
(h) original customer files and original customer files for accounts
closed in the last two (2) years.
11.03 DOCUMENTS TO BE DELIVERED BY BUYER AT THE CLOSING. At the
Closing hereunder, Buyer will deliver to Seller:
(a) a duly executed Assignment and Assumption of Contracts and/or
Liabilities;
(b) an executed officer's certificate in the form described in Section
8.08 hereinabove;
(c) certified resolutions, as described in Section 8.09 hereinabove;
(d) duly executed and acknowledged Letter of Credit;
(e) duly executed and acknowledged Promissory Notes; and
(f) duly executed and acknowledged Option Agreement.
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11.04 FURTHER ACTIONS. The parties further agree to deliver, each to
the other, after the Closing, any further documents or evidences of title or
of undertakings that may reasonably be required to effectuate this Agreement
and to carry out the intent and purpose hereof or thereof.
ARTICLE XII
INDEMNIFICATION
11.01 INDEMNIFICATION BY SELLER. Seller and Xxxxxx X. Xxxxxx, III and
Xxxxxxx X. Xxxx (the "Individuals") shall jointly and severally indemnify
Buyer and hold it harmless from and against any and all loss, cost, liability
and expense, including attorney's fees and costs of suit, which Buyer may
incur as a result of any claim, demand or action against it arising out of
Seller's conduct of the Business prior to the Closing and sale to Buyer
hereunder, or any damage or deficiency resulting from any agreement on the
part of Seller under this Agreement, or for any material misrepresentation in
or omissions from any other instrument furnished or to be furnished to Buyer
under this Agreement.
12.02 CLAIMS FOR INDEMNIFICATION. Whenever any claim of
indemnification shall arise in favor of Buyer under this Article XII, Buyer
shall notify Seller in writing by personal delivery or certified mail, return
receipt requested, within thirty (30) days
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after Buyer has actual knowledge of the facts constituting the basis for such
a claim. Such notice shall specify all facts known to Buyer giving rise to
such indemnification right and the amount or an estimate of the amount of the
liability arising therefrom. The right to indemnification hereunder and the
amount of the estimated amount thereof, as set forth in such notice, shall be
deemed agreed to by Seller unless, within thirty (30) days after the receipt
of such notice, Buyer is notified in writing that Seller disputes the right
to indemnification as set forth or estimated in such notice.
12.03 THIRD PARTY CLAIMS. If the facts giving rise to any such
indemnification right shall involve any actual or threatened claim or demand
by any third party against the Buyer or any possible claim by the Buyer
against any Third Party, such claim by or against a third party shall be
referred to as a "Third-Party Claim". If Seller shall give Buyer an agreement
in writing, in form and substance reasonably satisfactory to counsel to
Buyer, agreeing to indemnify and save Buyer harmless from all costs and
liability arising from any Third-Party Claim, Seller may, at their own
expense, undertake full responsibility for the defense or prosecution of such
Third-Party Claim and may contest or settle it on such terms as they may
choose, except that no settlement of any action involving claims other than
for money damages may be made without the prior written consent of Buyer
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(such consent not be unreasonably withheld). If by reason of any Third-Party
Claim, a lien, attachment, garnishment or execution is placed upon the
Purchased Asset thereof, or any of the property or assets of Buyer or Seller
if they desire to exercise their rights to defend or prosecute such suit,
they shall furnish a satisfactory indemnity bond to obtain the prompt release
of such lien, attachment, garnishment or execution.
12.04 SET-OFF
(a) The Buyer may set off against the portion of Non-Negotiable Note
not then paid any loss, damage, cost or expenses for which the Seller or the
Individuals may be responsible pursuant to this Agreement, subject, however,
to the following terms and conditions:
(1) the Buyer shall give written notice, in accordance with
Section 14.04 of this Agreement, to the Sellers and the Individuals of any
claimed breach of any such representation or warranty made or obligation
incurred, which notice shall set forth the amount of loss, damage, cost or
expense which the Buyer claims to have sustained by reason thereof;
(2) unless otherwise agreed, in writing, by the parties, set off
shall be effected on the date of notice of such claim and such set off shall
be charged against any unpaid portion of the Non-Negotiable Promissory Note;
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(3) if, such claim is contested, the Seller or the Individuals shall
notify the Buyer in writing within 10 days from the date of such notice (the
"Notice of Contest Period") of an intention to dispute the claim. If such
dispute is not resolved within 30 days after Notice of Contest is given (the
"Resolution Period"), then such dispute shall be resolved by a committee of
three arbitrators (one jointly appointed by the Seller and the Individuals,
one appointed by the Buyer and one appointed by the other two so appointed),
which shall be appointed within 60 days after the expiration of the
Resolution Period. The arbitrators shall abide by the rules of the American
Arbitration Association and their decision shall be made within 45 days from
the date of appointment and shall be final and binding on all parties. The
arbitration shall take place in Essex County, New Jersey; and
(b) The remedies provided for in this Section 12.04 shall be in addition
to and not in lieu of any other remedies available to the Buyer under this
Agreement or otherwise.
ARTICLE XIII
NOTICE TO DIVISION OF TAXATION
13.01 SELLER'S ACCRUED TAXES. Any amounts due the State of New Jersey
with respect to accrued taxes of Seller as of the Closing shall be paid by
Seller. Xxxxxx X. Xxxxxx, III and
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Xxxxxxx X. Xxxx, individually, guarantee performance by the Seller regarding
this provision.
ARTICLE XIV
MISCELLANEOUS
14.01 NO BROKERS. Seller represents and warrants to Buyer and Buyer
represents and warrants to Seller, that neither it nor any party acting on
its behalf has incurred any liability, either express or implied, to any
"broker" or "finder" or similar person in respect of any transactions
contemplated hereby.
14.02 ENTIRE AGREEMENT; MODIFICATION. This Agreement with the exhibits
hereto and other documents referred to herein, constitutes the entire
understanding and contains all warranties of the parties hereto relative to
the subject matter hereof. This Agreement may be amended only by a written
instrument executed on behalf of Seller and Buyer, or by a duly authorized
officer of each.
14.03 NON-DISCLOSURE. Each party agrees that neither will impair the
reputation of the other nor discuss any difference or agreement of the
parties nor the terms and conditions of this Agreement and the Supply
Agreement nor the negotiations thereof. Each party agrees that it is in their
mutual best interests for their respective businesses post closing to enjoy
the benefits of
32
a positive image with their customers, suppliers, vendors and others.
14.04 GOVERNING LAW. All questions relating to the validity,
interpretation or performance of this Agreement shall be deterimined in
accordance with the law of the State of New Jersey.
14.05 NOTICES. Any notice or communication of any party hereto to
another shall be deemed to be duly given if and when sent be certified mail,
return receipt requested, to the parties at the following addresses:
If to Seller: Mountain Spring Water Co., Inc.
White Mountain Company, Inc.
c/o Xxxxxx X. Xxxxxx, III, Esq.
Xxxxxx & Xxxxxx, Esqs.
Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxx Xxxxxx 00000
With Copy to: Xxxxxxx X. Xxxx
00 Xxxxxxx Xxxxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
If to Buyer: Puro Water Group, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx
With Copy to: Xxxxx Xxxxxx, Esq.
LEV & BERLIN, ESQS.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
or to any changed address that the parties may designate by like notice. The
effective date of such notice shall be its mailing date.
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14.06 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which when so executed and delivered shall be deemed an
original yet all of which together shall constitute but one and the same
instrument.
14.07 HEADINGS. The article and section headings in this Agreement are
for convenience of reference only and shall not be deemed to alter or affect
any provisions thereof.
14.08 NON-ASSIGNABILITY. This Agreement shall not be assignable by
either party hereto without the prior written consent of the other party.
Nothing in this Agreement, expressed or implied, is intended to confer upon
any person, other than the parties hereto and their successors, and right or
remedy under or by reason of this Agreement.
14.09 EXPENSES. Except as may otherwise be provided herein, the parties
hereto shall be responsible for their respective costs and expenses,
including attorneys' fees, incurred with respect to the purchase and sale
hereunder.
14.10 FURTHER ASSURANCES. Each of the parties hereto shall cooperate and
take such action, give such assurances and execute such documents as may be
reasonably requested by the other party in order to effectuate the purpose
and provisions of this Agreement.
14.11 ACCESS AND INFORMATION. The Seller will give to the Buyer and the
Buyer's counsel accountants and other
34
representatives, full access, during normal business hours throughout the
period prior to the Closing, to all of the sellers properties, revenue and
sales, contracts, commitments and records, and to furnish the Buyer during
such period with all such information concerning the Purchased Assets as the
Buyer reasonably may request.
[end of page 35]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
ATTEST: MOUNTAINWOOD SPRING WATER CO., INC.
/s/ illegible By: /s/ Xxxxxx X. Xxxxxx, III
-------------------------------- -----------------------------------------
a duly authorized officer
ATTEST: WHITE MOUNTAIN COMPANY, INC.
/s/ illegible By: /s/ Xxxxxx X. Xxxxxx, III
-------------------------------- -----------------------------------------
a duly authorized officer
ATTEST: PURO WATER GROUP, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------- -----------------------------------------
a duly authorized officer
WE AGREE TO THE TERMS AND CONDITIONS OF THIS AGREEMENT:
/s/ Xxxxxxx X. Xxxx /s/ Xxxxxx X. Xxxxxx, III
-------------------------------- -----------------------------------------
Xxxxxxx X. Xxxx Xxxxxx X. Xxxxxx, III
i:\wpfiles\xxxxx\mountainwood\1995\puro\agree10
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