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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is made as of the 24th day
of November, 1998, by and between Atlantic Premium Brands, Ltd. ("SELLER"), and
Canada Dry Potomac Corporation ("PURCHASER").
W I T N E S S E T H:
WHEREAS, Seller, through its beverage division, is engaged in the
business of distributing specialty beverages (the "Business"); and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, certain properties and assets relating to the Business as
described herein under the terms and conditions herein set forth; and
WHEREAS, unless otherwise defined herein, capitalized terms shall have
the meanings ascribed to such terms in Article 15 hereof; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Purchase and Sale of Acquired Assets. Seller shall assign,
transfer, convey and deliver to Purchaser, and Purchaser shall purchase from
Seller, all of Seller's right title and interest in and to the Acquired Assets.
1.2 Liabilities. Purchaser shall not assume any liability or
responsibility whatsoever under the terms, conditions or other provisions of
this Agreement or otherwise for any liability or obligation of Seller (absolute,
contingent, accrued or otherwise), which has not been specifically assumed by
Purchaser pursuant to this Agreement. If and only if Purchaser agrees to assume
any liability or obligation of Seller, such liabilities and obligations shall be
discharged by Purchaser after Closing when and as they become due.
2. PRE-CLOSING ACTIVITIES, CLOSING, CONSIDERATION.
2.1 Procedures before Closing. The following procedures shall be
conducted by the parties before the Closing occurs:
2.1.1 Glass Door Merchandisers. Within one (1) business day
after the execution and delivery hereof, Seller shall deliver to Purchaser a
list of all glass door merchandising machines carried on Seller's books of
account, itemized by location and described in detail reasonably sufficient for
each such machine to be identified by physical inspection (herein, the "Cooler
List"). Purchaser may avail itself of the time before Closing to survey these
machines to determine the extent to which they are still in place and in working
order. If it appears to Purchaser, after a good faith effort to find the
machines (or a fairly representative sample of them), that less than eleven
hundred (1,100) of such machines can be found in working order, including those
machines in Seller's warehouse in good working order, Purchaser shall give
notice to Seller and the parties shall adjust the Purchase Price according to
the number of machines that will
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be available to Purchaser after Closing, each machine to have a current fair
market value of $300. Notwithstanding the foregoing, Purchaser acknowledges that
all of such machines are delivered on an "asis", "where-is", "if-is" basis
subject to Seller's warranty of good title. There shall be no other indemnity
respecting such machines except as provided in this Section 2.1.1 and in
Sections 3.5 and 5.5. With respect to the number of glass door merchandisers,
there shall not be any adjustment to the Purchase Price other than pursuant to
this Section 2.1.1 and Section 3.11 and Section 2(c) of the Escrow Agreement.
2.1.2 Verification of Annual Case Sales. In the place and at
the time set forth in the Escrow Agreement, Seller shall make available to
representatives of Purchaser the Customer List in written format of EXHIBIT
2.1.2 for all sales of Beverages in the Territory during the period November 1,
1997 through October 31, 1998, for the purpose of verifying the number of Cases
of Beverages sold by Seller in the Territory for ultimate sale to consumers
within the Territory. Such records shall be sorted, as well as may be, between
Seller's Baltimore and Washington, D.C. areas of operations, and further sorted
by channels of trade. Purchaser's representatives may examine such records at
the place reasonably designated by Seller but shall not remove the records from
such place, nor shall any reproductions be made. Seller's representatives may
attend Purchaser's representatives throughout the examination. If Purchaser
disputes (in good faith and with reasonable evidence) the total number of Cases
or disputes (in good faith and with reasonable evidence) that any particular
sale of Cases resulted in an ultimate consumer purchase within the Territory.
Purchaser shall notify the Seller and the parties shall endeavor in good faith
to resolve the dispute if any; provided, however, that whether Cases sold to
Giant Food in the Territory were for ultimate sales to consumers within the
Territory may not be disputed. Any dispute which is not resolved shall be
entered in the Disputed Case Sales Statement and shall be dealt with as set
forth in the Escrow Agreement. In the event that Undisputed Case Sales are less
than 900,000, Purchaser may elect to terminate this Agreement by notice to
Seller. With respect to the number of cases sold by Seller in the Territory,
there shall not be any adjustment to the Purchase Price or indemnification or
any other remedy other than pursuant to this Section 2.1.2 and Section 3.11 and
Articles 10 and 13 and the Escrow Agreement.
2.1.3 Counting of Acquired Inventory. The physical counting,
valuing and removal of the Acquired Inventory shall be performed in accordance
with paragraph 3 of the Escrow Agreement.
2.2 Time of Closing. The Closing for the sale and purchase of the
Acquired Assets shall be held on Monday, November 30, 1998, at the Washington,
D.C. offices of Blank Rome Xxxxxxx & XxXxxxxx LLP or such other place as may be
agreed upon by the parties. The Closing shall be deemed to be effective as of
5:01 p.m. on the Closing Date.
2.3 Closing Procedure. At the Closing, each party will cause to be
prepared, executed and delivered all other documents reasonably required to be
delivered by such party pursuant to Articles 7 and 8 of this Agreement and all
other necessary, appropriate and customary documents as another party or its
counsel may reasonably request for the purpose of consummating the transactions
contemplated by this Agreement. Title to the Acquired Assets shall be delivered
to Purchaser at the place of Closing by means of the Xxxx of Sale and
Assignment. All actions taken at the Closing shall be deemed to have been taken
simultaneously at the time the last of any such actions is taken or completed.
2.4 Purchase Price. The Purchase Price shall be delivered to the Escrow
Agent and the Seller in accordance with the provisions of the Escrow Agreement.
The Purchase Price shall be allocated among the Acquired Assets in the manner
set forth in SCHEDULE 2.4, attached.
2.5 Notice and Payment of Seller's Creditors. At Closing, Seller
shall (a) identify all of its
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creditors to Purchaser, (b) give notice of the bulk sale of its assets to all of
its creditors and (c) pay certain of its creditors, all as set forth in Section
13, below.
2.6 Delivery of Acquired Assets.
2.6.1 Acquired Inventory (and on-site glass door
merchandisers) shall be delivered to Purchaser F.O.B. Seller's premises in
Jessup, Maryland. For purposes of delivery of the Acquired Inventory to
Purchaser, Seller shall provide access to Purchaser and the use of Seller's fork
lifts to load the Acquired Inventory onto Purchaser's trucks. Risk of loss to
the Acquired Inventory shall pass from Seller to Purchaser upon the physical
removal of the Acquired Inventory by Purchaser from Seller's place of business.
Purchaser shall reimburse Seller for any physical damage to Seller's warehouse
proximately caused by Purchaser removing the Acquired Inventory. Seller shall
reimburse Purchaser for all expenses incurred by Purchaser if the Acquired
Inventory is not made available for delivery pursuant to this Agreement and the
Escrow Agreement, including loss of the Acquired Inventory. Purchaser
acknowledges that Seller does not make any guarantee or representation that
there is a market for the Acquired Inventory or at what price or prices it may
be sold, and that Seller expressly disclaims any such representation, warranty
or guarantee. With respect of number of Cases of Beverages delivered, there
shall not be any adjustment to the Purchase Price or indemnification or any
other remedy other than through the process enumerated in this Section 2.6, and
the Escrow Agreement.
2.6.2 The Customer Lists shall be delivered at Closing.
Immediately after the execution and delivery of this Agreement, Seller shall
deliver to Purchaser in written form the names and addresses of all the
Customers with an indication for each Customer whether such Customer pays cash
or is extended credit terms for inspection by Purchaser pursuant to the Escrow
Agreement.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Purchaser, as follows:
3.1 Organization; Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and has all requisite power and authority to own and lease its
properties and carry on its business as currently conducted.
3.2 Due Authorization. Seller has full power and authority to enter
into and perform this Agreement and to carry out the transactions contemplated
hereby. Seller has taken all necessary action to approve the execution and
delivery of this Agreement and the transactions contemplated hereby. This
Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms, except as may be limited by
the availability of equitable remedies or by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally.
3.3 Execution and Delivery. Neither the execution and delivery by
Seller of this Agreement nor the consummation by it of the transactions
contemplated hereby will: (a) conflict with or result in a breach of the
Articles of Incorporation or Bylaws of Seller; (b) violate any statute, law,
rule or regulation or any order, writ, injunction or decree of any court or
governmental authority, which violation, either individually or in the
aggregate, might reasonably be expected to have a material adverse effect on the
Business or operations of Seller or Purchaser's ownership of the Acquired
Assets; or (c) except as disclosed on SCHEDULE
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3.3, violate or conflict with or constitute a default under (or give rise to any
right of termination, cancellation or acceleration under), or result in the
creation of any lien on any of the Acquired Assets pursuant to any material
agreement, indenture, mortgage or other instrument to which Seller is a party or
by which it is bound or affected.
3.4 Governmental and Other Consents. No approval, authorization,
consent, order or other action of, or filing with, any governmental authority or
administrative agency is required in connection with the execution and delivery
by Seller of this Agreement or the consummation of the transactions contemplated
hereby or thereby, other than filings related to the WARN Act, compliance with
which shall be the sole responsibility of Seller. Except as set forth in
SCHEDULE 3.4, no approval, authorization or consent of any other third party is
required in connection with the execution and delivery by Purchaser of this
Agreement and the consummation of the transactions contemplated hereby, except
as may have been previously obtained by Seller (or Purchaser in the Distribution
Agreements (as defined below)), or those which will be obtained prior to
Closing.
3.5 Title to Acquired Assets. Except for leased or licensed property
set forth in SCHEDULE 3.5A, Seller is the sole and exclusive legal owner of all
right, title and interest in the Acquired Assets, and when delivered to
Purchaser, the Acquired Assets constituting personal property shall be free and
clear of liens, claims, security interests, judgments, restrictions,
reservations, conditional sales, prior assignments, or other encumbrances,
burdens or charges of any nature except liens for taxes not yet payable, and
liens permitted or incurred by Purchaser. Within the past ten years, Seller has
not done business under or been known by any name other than its present
corporate name, or done business at any address other than the names and
addresses set forth in SCHEDULE 3.5B.
3.6 Storage of Inventory. None of the Acquired Inventory, as of the
Closing Date, will consist of items that have been mishandled or not stored by
Seller or on Seller's behalf in strict accordance with the requirements of the
Supplier whose trademarks it bears.
3.7 Case Volume. The Annual Case Sales Statement set forth on
SCHEDULE 3.7 is an accurate listing of the Case sales volumes for the Beverages
by beverage brand, flavor and package which Seller has sold in the Territories
during the period commencing November 1, 1997 through October 31, 1998.)
3.8 Litigation. There is no order of any court, governmental agency or
authority and no action, suit, proceeding or publicly disclosed investigation,
judicial, administrative or otherwise that is pending or, to Seller's knowledge
(without any inquiry whatsoever), threatened against or affecting the Seller
which, if adversely determined, might materially and adversely affect the
Business, the Acquired Assets or the operations, properties or conditions
(financial or otherwise) of the Seller or which challenges the validity or
propriety of any of the transactions contemplated by this Agreement.
3.9 Finders and Brokers. Except as set forth in SCHEDULE 3.9, no
person has, as a result of any agreement entered into by Seller, any valid claim
against any of the parties hereto for a brokerage commission, finder's fee or
other like payment.
3.10 No Adverse Distribution Rights. Except as described in SCHEDULE
3.10, the Seller holds the Acquired Distribution Rights free of any and all
adverse claims of any Third Party and no Third Party has any adverse license,
right or color of right, existing or inchoate, expressed or implied, vested or
contingent, to purchase, sell, distribute, promote, market or otherwise deal in
any Beverages in any portion of the Territories, provided, however, the Seller
makes the foregoing representations only to the best of its
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knowledge, information and belief with respect to any claims or rights in Third
Parties that may arise or exist on account of any actions taken by or on behalf
of any of the Suppliers.
3.11 No Untrue Written Statements. All representations or warranties by
Seller in this Agreement and in any Schedule, all other written statements
attached hereto, and all certificates furnished or to be furnished to Purchaser
by or on behalf of Seller in connection with this Agreement including, without
limitation, the Customer Lists, the Statement of Net Selling Price, and the
lists provided pursuant to Section 13.1, are true, accurate and correct in all
material respects to the best knowledge and belief of Seller. No representations
are made with respect to any statements, written or otherwise, not included in
or attached to this Agreement or referenced in this Section 3.11.
3.12 No Other Representations. Except for the express representations
and warranties contained in this Agreement, Seller makes no other
representations or warranties of any nature whatsoever, and Seller hereby
disclaims any and every other representation and warranty of any nature
whatsoever.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to Seller as follows:
4.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of Pennsylvania
and has all requisite power and authority to own and lease its properties and
carry on its business as currently conducted.
4.2 Due Authorization. Purchaser has full power and authority to
enter into and perform this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Purchaser. This Agreement has been duly executed
and delivered by Purchaser and constitutes the legal, valid and binding
obligation of Purchaser, enforceable against it in accordance with its
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
or general equitable principles.
4.3 Execution and Delivery. Neither the execution and delivery by
Purchaser of this Agreement nor the consummation by it of the transactions
contemplated hereby will: (a) conflict with or result in a breach of the
Articles of Incorporation or Bylaws of Purchaser; (b) violate any law, statute,
rule or regulation or any order, writ, injunction or decree of any court or
governmental authority; or (c) violate or conflict with or constitute a default
under (or give rise to any right of termination, cancellation or acceleration
under) any indenture, mortgage, lease, contract or other instrument to which
Purchaser is a party or by which it is bound or affected.
4.4 Consents. No consent, approval, authorization, license, exemption
of, filing or registration with any court, governmental authority, commission,
board, bureau, agency or instrumentality, domestic or foreign, is required by
Purchaser in connection with the execution and delivery of this Agreement or the
consummation by it of any transaction contemplated hereby or thereby. Except as
set forth in SCHEDULE 4.4, no approval, authorization or consent of any other
Third Party is required in connection with the execution and delivery by
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby, except as may have been previously obtained by Purchaser or
Seller.
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4.5 Finders and Brokers. No person has, as a result of any agreement
entered into by Purchaser, any valid claim against any of the parties hereto for
a brokerage commission, finder's fee or other like payment.
4.6 Litigation. There is no order of any court, governmental agency or
authority and no action, suit, proceeding or publicly disclosed investigation,
judicial, administrative or otherwise that is pending or, to Purchaser's
knowledge (without any inquiry whatsoever), threatened against or affecting
Purchaser which, if adversely determined, might materially and adversely affect
the assets, operations, properties or conditions (financial or otherwise) of
Purchaser or which challenges the validity or propriety of any of the
transactions contemplated by this Agreement.
4.7 Distribution Agreements. Purchaser is ready, willing and able to
enter into, Purchaser's Distribution Agreements with the Suppliers as of the
Closing which Distribution Agreements are acceptable to Purchaser and which
contain express consents from the Suppliers to the termination of Seller's
distribution rights in the Territories.
4.8 No Other Representations. Except for the express representations
and warranties contained in this Agreement, Purchaser makes no other
representations or warranties of any nature whatsoever, and Purchaser hereby
disclaims any and every other representation and warranty of any nature
whatsoever.
5. CERTAIN COVENANTS AND AGREEMENTS.
5.1 Reasonable Efforts. Each of Seller and Purchaser shall take all
reasonable action necessary and cooperate in good faith to consummate the
transactions contemplated by this Agreement and will use all necessary and
reasonable means at its disposal to obtain all necessary consents and approvals
of other persons and governmental authorities required to enable it to
consummate the transactions contemplated by this Agreement. Except as otherwise
provided herein, each of Seller and Purchaser acknowledges and agrees that it
shall pay all costs, fees and expenses incurred by it in obtaining such
necessary consents and approvals. Each party shall make, if any, all filings,
applications, statements and reports to all governmental agencies or entities
which are required to be made prior to the Closing Date by or on its behalf
pursuant to any statute, rule or regulation in connection with the transactions
contemplated by this Agreement, and copies of all such filings, applications,
statements and reports shall be provided to the other.
5.2 Public Announcements. Prior to the Closing Date, all notices to
third parties and other publicity relating to the transaction contemplated by
this Agreement shall be made only after joint planning and agreement by Seller
and Purchaser. Additionally, the parties reaffirm and incorporate by reference
the terms and provisions of that certain Confidentiality Letter Agreement dated
August 21, 1998.
5.3 Obligations Pending Closing. During the period from the date hereof
to the Closing Date, unless the prior consent of Purchaser is first obtained,
Seller shall not knowingly take any action which would cause any representation
contained in Article 3 to be untrue as of the Closing Date. Purchaser
acknowledges that Seller has taken and will take certain actions to curtail its
normal conduct of the Business. In addition, during the period from the date
hereof to the Closing Date, unless the prior consent of Seller is first
obtained, Purchaser shall not knowingly take any action which would cause any
representation contained in Article 4 to be untrue as of the Closing Date
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5.4 Seller to Pay Creditors as of Closing Date. Seller shall deliver
checks representing payment in full of all known fixed, liquidated and
non-disputed obligations owed to all of its creditors as of the Closing Date
(except for those obligations and creditors identified in SCHEDULE 5.4) and
neither Purchaser nor any of the Acquired Assets at any time after Closing shall
be subjected to any damage, claim or expense by or on behalf of any creditor of
Seller with respect to any obligation owed or claimed to be owed to any such
creditor by Seller.
5.5 Glass Door Merchandisers. For the six months immediately following
the Closing Date, Purchaser shall allow Seller to use one shelf of each glass
door merchandiser machine sold hereunder for Seller's beverage inventory which
is not being sold hereunder. Seller shall reimburse Purchaser for any physical
damage to such machines proximately caused by Seller placing such beverages in
such machines and Seller shall defend and indemnify Purchaser from all claims of
whatever nature made by any Third Party against Purchaser relating to Seller's
use of such machines after Closing.
6. CONDITIONS TO PURCHASER'S CLOSING.
All obligations of Purchaser under this Agreement shall be subject to
the fulfillment at or prior to the Closing of the following conditions, it being
understood that Purchaser may, in its sole discretion, waive any or all of such
conditions in whole or in part:
6.1 Representations, Etc. Seller shall have performed in all material
respects the covenants and agreements contained in this Agreement that are to be
performed by it at or prior to the Closing, and the representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects as of the Closing Date with the same effect as though made
at such time (except as contemplated or permitted by this Agreement).
6.2 No Adverse Litigation. No order or temporary, preliminary or
permanent injunction or restraining order shall have been entered and no action,
suit or other legal or administrative proceeding by any court or governmental
authority, agency or other person shall be pending or threatened on the Closing
Date which may have the effect of (i) making any of the transactions
contemplated hereby illegal, or (ii) making Purchaser liable for the payment of
damages to any person in respect of the Business or the Acquired Assets.
6.3 Closing Deliveries. Purchaser shall have received each of the
documents or items required to be delivered to it pursuant to Section 8.1
hereof.
7. CONDITIONS TO SELLER'S CLOSING.
All obligations of Seller under this Agreement shall be subject to the
fulfillment at or prior to the Closing of the following conditions, it being
understood that Seller may, in its sole discretion, waive any or all of such
conditions in whole or in part:
7.1 Representations, Etc. Purchaser shall have performed in all
material respects the covenants and agreements contained in this Agreement that
are to be performed by Purchaser as of the Closing, and the representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all material respects as of the Closing Date with the same effect as though made
at such time (except as contemplated or permitted by this Agreement).
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7.2 No Adverse Litigation. No order or temporary, preliminary or
permanent injunction or restraining order shall have been entered and no action,
suit or other legal or administrative proceeding by any court or governmental
authority, agency or other person shall be pending or threatened on the Closing
Date which may have the effect of (i) making any of the transactions
contemplated hereby illegal, or (ii) making Seller liable for the payment of
damages to any person in respect of the Business or the Acquired Assets.
7.3 Closing Deliveries. Seller shall have received each of the
documents or items required to be delivered to it pursuant to Section 8.1.
7.4 WARN Act. Seller shall be satisfied, in its sole but reasonable
discretion, that it has complied with the mandates of the WARN Act.
8. DOCUMENTS TO BE DELIVERED AT OR BEFORE CLOSING.
8.1 To Purchaser. At or before the Closing, there shall be delivered to
Purchaser:
8.1.1 The Xxxx of Sale and Assignment.
8.1.2 A certificate, signed by an executive officer of Seller,
as to the fulfillment of the conditions set forth in Section 6.1
hereof.
8.1.3 All other items reasonably requested by Purchaser.
8.1.4 he Escrow Agreement.
8.2 To Seller. At or before the Closing, there shall be
delivered to Seller:
8.2.1 A certificate, signed by an executive officer of
Purchaser, as to the fulfillment of the conditions set forth in Section
7.1 hereof.
8.2.2 The Escrow Agreement.
8.2.3 That portion of the Purchase Price determined pursuant
to the Escrow Agreement.
8.2.4 All other items reasonably requested by Seller.
8.3 To Escrow Agent. At or before the Closing, there shall be
delivered to the Escrow Agent:
8.3.1 The Escrow Agreement, and
8.3.2 Those amounts determined pursuant to paragraph 2.4
which are required to be delivered to the Escrow
Agent, and
8.3.3 All other items reasonably requested by Escrow Agent.
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9. SURVIVAL.
All representations, warranties, covenants and agreements made by any
party to this Agreement or pursuant hereto shall be deemed to have been relied
upon by the parties hereto and shall survive the Closing as follows:
9.1 The representations and warranties in Sections 3.6 and 5.4 and
Article 13 shall survive indefinitely (subject to applicable
statutes of limitations).
9.2 Seller shall remain liable for one year after Closing for its
representations in Section 3.10, and notice of any claim of
any nature thereunder seeking indemnification or any other
remedy must be given within one (1) year from the Closing
Date, and if not, shall be deemed waived and forfeited.
9.3 All other claims for indemnification or otherwise shall be
made, if at all, not later than the 185th day after the later
of the Closing Date, or the public dissemination of the
transactions contemplated hereby, and if not made shall be
deemed waived and forfeited.
10. INDEMNIFICATION OF PURCHASER.
Subject to the limitations set forth in Articles 9 and 12, Seller shall
defend, indemnify and hold Purchaser harmless from, against, for and in respect
of:
10.1 any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action and encumbrances suffered,
sustained, incurred or required to be paid by Purchaser because of the breach of
any written representation, warranty, agreement or covenant of Seller contained
in this Agreement or any certificate or agreement executed in connection with
this Agreement;
10.2 any and all liabilities, obligations, claims and demands arising
out of the ownership or the Acquired Assets or operation of the Business at all
times prior to the Closing Date); and
10.3 any and all liabilities, obligations, claims and demands arising
out of alleged defects in products sold by Seller at any time; and
10.4 all reasonable costs and expenses (including, without limitation,
attorney's fees, interest and penalties) incurred by Purchaser in connection
with any action, suit, proceeding, demand, assessment or judgment incident to
any of the matters indemnified against in this Article 10.
11. INDEMNIFICATION OF SELLER.
Subject to the limitations set forth in Articles 9 and 12, Purchaser
shall indemnify and hold Seller harmless from, against, for and in respect of:
11.1 any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action and encumbrances suffered,
sustained, incurred or required to be paid by Seller because of the breach of
any written representation, warranty, agreement or covenant of Purchaser
contained in this Agreement or any certificate or agreement executed in
connection with this Agreement;
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11.2 any and all liabilities, obligations, claims and demands arising
out of the ownership of the Acquired Assets and operation of Purchaser's
business on and after the Closing Date, except to the extent the same arises
from a breach of any written representation, warranty, agreement or covenant of
Seller contained in this Agreement or any certificate or agreement executed in
connection with this Agreement;
11.3 all reasonable costs and expenses (including, without limitation,
attorney's fees, interest and penalties) incurred by Seller in connection with
any action, suit, proceeding, demand, assessment or judgment incident to any of
the matters indemnified against in this Article 11.
12. GENERAL RULES REGARDING INDEMNIFICATION.
The obligations and liabilities of each indemnifying party hereunder
with respect to claims resulting from the assertion of liability by the other
party or indemnified third parties shall be subject to the following terms and
conditions:
12.1 The indemnified party shall give prompt written notice (which in
no event shall exceed thirty (30) days from the date on which the indemnified
party first became aware of such claim or assertion) to the indemnifying party
of any claim which might give rise to a claim by the indemnified party against
the indemnifying party based on the indemnity agreements contained in Articles
10 or 11 hereof, stating the nature and basis of said claims and the amounts
thereof, to the extent known;
12.2 If any action, suit or proceeding is brought against the
indemnified party with respect to which the indemnifying party may have
liability under the indemnity agreements contained in Articles 10 or 11 hereof,
the action, suit or proceeding shall, upon the written acknowledgment by the
indemnifying party that it is obligated to indemnify under such indemnity
agreement, be defended (including all proceedings on appeal or for review which
counsel for the indemnified party shall deem appropriate) by the indemnifying
party. The indemnified party shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the
indemnified party's own expense unless (a) the employment of such counsel and
the payment of such fees and expenses both shall have been specifically
authorized in writing by the indemnifying party in connection with the defense
of such action, suit or proceeding, or (b) counsel to such indemnified party
shall have reasonably concluded and specifically notified the indemnifying party
that there may be specific defenses available to it which are different from
those available to the indemnifying party, in any of which events the
indemnifying party, to the extent made necessary by such defenses, shall not
have the right to direct the defense of such action, suit or proceeding on
behalf of the indemnified party. In the latter such case only that portion of
such fees and expenses of the indemnified party's separate counsel reasonably
related to matters covered by the indemnity agreements contained in Articles 10
or 11 hereof shall be borne by the indemnifying party. The indemnified party
shall be kept fully informed of such action, suit or proceeding at all stages
thereof whether or not it is represented by separate counsel.
12.3 The indemnified party shall make available, upon reasonable
notice, to the indemnifying party and its attorneys and accountants all books
and records of the indemnified party relating to such proceedings or litigation
and the parties hereto agree to render to each other such assistance as they may
reasonably require of each other in order to ensure the proper and adequate
defense of any such action, suit or proceeding.
12.4 The indemnified party shall not make any settlement of any claims
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld or delayed.
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12.5 If any claims are made by an indemnified party for which an
indemnifying party would be liable, and it appears likely that such claims might
also be covered by the indemnified party's insurance policies, the indemnified
party shall make a timely claim under such policies and to the extent that such
party obtains any recovery from such insurance, such recovery shall be offset
against any sums due from an indemnifying party (or shall be repaid to the
indemnifying party by the indemnified party to the extent that an indemnifying
party has already paid any such amounts). In addition, any claim for indemnity
hereunder shall be reduced by any tax-related benefit reasonably expected by
Purchaser to be received or actually received by Purchaser, viewing such claim
without being affected by any of Purchaser's other activities.
12.6 The indemnified party shall not make any claim unless and until it
has incurred indemnified losses, damages and expenses in the cumulative
aggregate amount of $25,000.00, and then only in respect of the excess over such
$25,000.00 minimum. All claims for indemnification and liability pursuant
thereto shall not, in any event, exceed $500,000 provided, however, that there
shall be no limit and no deductible with respect to claims by Seller's
creditors.
12.7 Purchaser and Seller acknowledge and agree that the foregoing
indemnification provisions in Articles 10, 11 and 12 hereof shall be the sole
and exclusive remedies for breaches or defaults of any representation, warranty,
covenant or agreement contained herein or in any other document or instrument
delivered in connection herewith, except in the case of fraud.
12.8 All amounts owed under this Article 12 not paid when due shall
bear interest at a rate equal to 15% per annum.
13. NOTICE OF CREDITORS OF SELLER.
13.1 Identification of Seller's Creditors. Seller will furnish to
Purchaser at Closing a written list, signed and sworn to or affirmed by Seller,
of the names and business addresses of all creditors of Seller, with the amounts
of indebtedness due, when known, ("List of Creditors"), and also the names of
all persons known to assert claims against Seller, even if such claims are
disputed.
13.2 Payment of Creditors. Seller shall notify by registered or
certified mail posted at Closing all Creditors whose names appear on the List of
Creditors (except those identified in SCHEDULE 5.4), and all other persons known
to Purchaser to hold or assert claims against Seller, that a bulk transfer has
been made and shall identify the Acquired Inventory and the glass door
merchandisers as have been sold to Purchaser. Each notice shall be delivered
together with Seller's check evidencing payment in full the amount deemed by the
notice to be owed. For purposes of this Section 13, the word "creditors"
includes, without limitation, all taxing authorities and all employees of the
Seller.
13.3 Purchaser Assuming no Obligations of Seller. It is especially
understood and agreed that Purchaser is not assuming any obligations or
liabilities of Seller hereunder, and Seller hereby represents and warrants that
all of Seller's creditors shall be paid in full as the obligations to such
creditors become due.
14. MISCELLANEOUS PROVISIONS.
14.1 Expenses. Except as otherwise expressly provided herein, each
party shall pay the fees and expenses incurred by it in connection with the
transactions contemplated by this Agreement. Purchaser shall be responsible for
all transfer taxes, fees or other charges levied as a result of the transaction
described by
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this Agreement.
14.2 Accounts Receivable. As of and following Closing, Seller will
collect for itself all accounts receivable with respect to Business which relate
to any period prior to the Closing. Within sixty (60) days following Closing,
(a) Seller shall deliver to Purchaser a complete and detailed statement setting
forth all collections of accounts receivable which relate to the Business during
the period after the Closing, along with, if applicable, the cash proceeds of
all such accounts receivable collected on behalf of Purchaser, and (b) Purchaser
shall deliver to Seller a complete and detailed statement setting forth all
collections of accounts receivable which relate to any period prior to the
Closing, along with, if applicable, the cash proceeds of all such accounts
receivable collected on behalf of Seller. Payments on accounts receivable shall
be credited to the invoice reasonably identified by amount paid, invoice,
invoice number, or other customer identification indicating that a specific
invoice is being paid. In the event that a payment cannot be matched to a
particular invoice or if an invoice is overpaid, it shall be applied against the
oldest invoice first. Both parties shall be entitled, upon reasonable prior
written notice to the other, to inspect the books and records of the other
solely for the purpose of verifying the accuracy of the reports delivered
hereunder, and shall make a good faith effort to match payments on accounts
receivables to the appropriate invoice.
14.3 Amendment. This Agreement may be amended at any time but only by
an instrument in writing signed by the parties hereto.
14.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if mailed by certified mail, return receipt
requested, or by nationally recognized "next-day" delivery service, to the
parties at the addresses set forth below (or at such other address for a party
as shall be specified by like notice), or sent by confirmed facsimile with a
cover page to the number set forth below (or such other number for a party as
shall be specified by proper notice hereunder):
If to Purchaser: Canada Dry Potomac Corporation
0000 Xxxx Xxxx Xxxxxxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy to : Xxxx Xxxxxx, Esq.
Blank Rome Comisky & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
If to Seller: Atlantic Premium Brands, Ltd.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
With a copy to : Xxx X. Xxxxxxx, Esq.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
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14.5 Assignment. This Agreement may not be assigned by either party
without the prior consent of the other party. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs and permitted assigns.
14.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14.7 Headings. The headings of the Articles and Sections of this
Agreement are inserted for convenience only and shall not constitute a part
hereof.
14.8 Entire Agreement. This Agreement and the documents referred to
herein contain the entire understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
warranties, conveyances or undertakings other than those expressly set forth
herein. This Agreement supersedes any prior agreements and understandings
between the parties with respect to the subject matter.
14.9 Waiver. No attempted waiver of compliance with any provision or
condition hereof, or consent pursuant to this Agreement, will be effective
unless evidenced by an instrument in writing by the party against whom the
enforcement of any such waiver or consent is sought.
14.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland.
14.11 Intended Beneficiaries. The rights and obligations contained in
this Agreement are hereby declared by the parties hereto to have been provided
expressly for the exclusive benefit of such entities as set forth herein and
shall not benefit, do not benefit and may not be relied upon by any unrelated
third parties.
14.12 Mutual Contribution. The parties to this Agreement and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.
15. Definitions. For the purposes of this Agreement, except as otherwise
expressly provided, the terms defined in this Article 15 have the meanings
assigned to them in this Article, wherever they appear in the Agreement; the
plural form of a defined term shall have the same meaning as the defined
singular term and the singular form of a defined term shall have the same
meaning as a defined plural form.
15.1 The term "ACQUIRED ASSETS" shall mean the tangible and intangible
property set forth on SCHEDULE 15.1 attached hereto.
15.2 The term "ACQUIRED DISTRIBUTION RIGHTS" shall mean the exclusive
rights of the Seller to market, sell and deliver Beverages within Territories,
provided, however, that such term shall not include the rights to distribute
Arizona products unless Purchaser has entered into an Arizona Agreement.
15.3 The term "ACQUIRED INVENTORY" shall mean those stocks and
inventories of the Beverages and of Hires, Crush and Vernors branded products
owned by and in the possession of the Seller on the Closing Date, (i) which are
packed into cartons or trays and assembled on to pallets ready for shipment,
(ii)
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which are free of all apparent defects in quality, whether of contents or
packaging, and (iii) whose age (since date of manufacture) is not less than the
following: AriZona Regular and Diet: 110 days; Mistic and Stewarts Regular:
eleven (11) months; Mistic and Stewarts Diet: five (5) months: Hires, Crush and
Vernors, eleven (11) months. The Acquired Inventory shall include any of those
sku's listed in SCHEDULE 15.3.
15.4 The term "ARIZONA AGREEMENT" shall mean any agreement between
Purchaser and Hornell Brewing Co., Inc. for the exclusive wholesale distribution
by Purchaser of AriZona-brand beverages in the Territory.
15.5 The term "BEVERAGES" shall mean any and all beverage products
identified with the AriZona, Stewarts or Mistic trademarks.
15.6 The term "XXXX OF SALE AND ASSIGNMENT" shall mean a document in
form and substance of EXHIBIT 15.6 attached.
15.7 The term "CASE" shall mean a carton or tray containing
twenty-four bottles or their equivalent number (e.g., for example, a carton of
twelve bottles of whatever size shall count as one-half case).
15.8 The term "CLOSING" shall mean the transfer of the Assets to
Purchaser simultaneous with the payment of the Purchase Price to the Seller and
to the Escrow Agent pursuant to this Agreement.
15.9 The term "CLOSING DATE" shall mean the date on which the Closing
occurs.
15.10 The term "CUSTOMER" shall mean each and every Person who
purchased Beverages from the Seller during the period from November 1, 1997
through October 31, 1998.
15.11 The term "CUSTOMER LIST" shall mean a list or lists which
collectively includes all Customers identified by name, address, telephone
number, principal contact and each sale of Beverages made by Seller in the
Territories, described by brand, flavor, package, date of sale, place of
delivery, and net selling price, during the period from November 1, 1997 through
October 31, 1998, in the format of EXHIBIT 15.11.
15.12 The term "DISPUTED CASE SALES" shall mean the Case volumes for
AriZona, Mistic and Stewarts products by Beverage brand, and channel of
distribution, which Seller claims to have sold in the Territories during the
period from November 1, 1997 through October 31, 1998, which claims are disputed
in good faith in writing stating the reason such Case(s) is (are) disputed by
Purchaser, to be delivered in the form of SCHEDULE 15.12 (the "DISPUTED CASE
SALES STATEMENT.")
15.13 The term "DISTRIBUTOR CLAIM" shall main any written assertion by
or on behalf of any Person made to any other Person that the Person by or on
behalf of whom the assertion is made has any license, right or color of right,
existing or inchoate, expressed or implied, vested or contingent, to purchase,
sell, distribute, promote, market or otherwise deal in any Beverages in any of
the Territories. Distributor Claims include, without limitation, all statements
or assertions (whether or not addressed to a party to this Agreement) made in
any letter, notice, demand, memorandum, complaint, suit or action in any court
or to any administrative agency or arbitration association or arbitrator.
15.14 The term "ESCROW AGENT" shall mean those Persons designated as
such by the Escrow Agreement.
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15.15 The term "ESCROW AGREEMENT" shall mean that document in form
and substance of Exhibit 15.15, attached.
15.16 The term "ESCROW FUND" shall mean those funds delivered to the
Escrow Agent at Closing, as such funds may be increased by interest and
diminished by payments and expenses from time to time.
15.17 The term "INVENTORY COST LIST" shall mean the schedule of all
stock keeping units ("SKU's") of the Acquired Inventory separately priced by
each SKU (or package size). The price for each shall be as set forth on SCHEDULE
15.17.
15.18 The term "PERSON" shall mean any natural person, corporation or
other legal business, governmental, charitable, fraternal, religious or social
entity, association or organization and any agent of the foregoing.
15.19 The term "PURCHASE PRICE" shall mean the sum of (i) the
Undisputed Case Sales, multiplied by $2.50, plus (ii) the value of the Acquired
Inventory, determined by reference to the Inventory Cost List and the physical
count of the Acquired Inventory conducted pursuant to paragraph 2.1.3, and (iii)
the Disputed Case Sales determined after Closing pursuant to arbitration as
provided by the Escrow Agreement to have been made for ultimate sale to
consumers in the Territory, multiplied by $2.50.
15.20 The term "PURCHASER'S DISTRIBUTION AGREEMENTS" shall mean
agreements Purchaser has entered into, or is ready, willing and able to enter
into, with the Suppliers respecting the Acquired Distribution Rights, which
agreements are acceptable to Purchaser, in its sole discretion, and which
contain express consents from the Suppliers to the termination of Seller's
distribution rights in the Territories.
15.20A The term "STATEMENT OF NET SELLING PRICE" shall mean the list of
selling prices, by channel, brand and package size, after all discounts, but
before recoveries for the Beverages sold by Seller for the 12 month period ended
August 31, 1998 set forth in EXHIBIT 15.20A, which net prices Seller represents
were no less for the twelve months ended October 31, 1998.
15.21 The term "SUPPLIER" shall mean each of Hornell Brewing Co.,
Inc., Cable Car Beverage Corporation (or its successor), Mistic Brands, Inc. and
Triarc Companies, Inc.
15.22 The term "TERRITORIES" shall mean the exclusive territories for
the marketing, sale and distribution of AriZona, Stewarts and Mistic products as
contractually designated by the Suppliers of those products, as set forth in
SCHEDULE 15.22.
15.23 The term "THIRD PARTY" shall mean any Person, other than the
Seller and the Purchaser.
15.24 The term "UNDISPUTED CASE SALES" shall mean the actual number of
Cases of Beverages which Purchaser and Seller agree that Seller sold in the
Territories (for ultimate resale to consumers in the Territories) during the
period from November 1, 1997 through October 31, 1998.)
15.25 The term "WARN ACT" shall mean Worker Adjustment and Retraining
Notification Act ("WARN"), 29 U.S.C. Sections 2101-2109, which took effect on
February 4, 1989.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATLANTIC PREMIUM BRANDS, LTD.
By /s/ XXXX X. XXXXXX
-------------------------------
Xxxx X. Xxxxxx, President
CANADA DRY POTOMAC CORPORATION
By /s/ XXXXXXX X. XXXXX
-------------------------------
Xxxxxxx X. Xxxxx, President
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INDEX TO SCHEDULES AND EXHIBITS
Schedules:
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2.4 Allocation of Purchase Price.
3.3 Seller's Conflicts with Laws and other Contracts.
3.4 Seller Required Third Party Consents.
3.5A Seller's Leased and Licensed Acquired Assets.
3.5B Seller's Former Names and Addresses.
3.7 Annual Case Sales Statement.
3.9 Seller's Finders and Brokers.
3.10 Distribution Rights of Third Parties Adverse to Purchaser.
4.4 Purchaser Required Third Party Consents.
5.4 Seller's Creditors and Obligations NOT Paid at Closing.
15.1 Acquired Assets.
15.3 SKU's for Acquired Inventory.
15.11 Customers List.
15.12 Form of Disputed Case Sales Statement.
15.17 Inventory Cost List.
15.22 Territories.
Exhibits
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15.5 Xxxx of Sale and Assignment.
15.15 Escrow Agreement.
15.20A Statement of Net Selling Prices.
THE COMPANY AGREES TO FURNISH SUPPLEMENTALLY A COPY OF ANY OF THE
SCHEDULES AND EXHIBITS LISTED ABOVE TO THE SECURITIES AND EXCHANGE COMMISSION
UPON REQUEST.
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