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EXHIBIT 10.18
ASSET PURCHASE AGREEMENT
AGREEMENT, dated December 22, 1997, between The Delicious Frookie
Company, Inc., a Delaware corporation ("Seller"), and Xxxxxxx X. Worth ("Worth"
or "Buyer").
IT IS AGREED:
1. Transaction.
1.1 Purchase and Sale of Assets. Subject to the terms and
conditions of this Agreement, Seller hereby sells and/or assigns to Buyer, and
Buyer hereby purchases from Seller, the following assets of Seller (hereinafter
collectively referred to as the "Purchased Assets") associated with the Seller's
Cool Fruits(TM) Fruit Juice Freezers product line ("Cool Fruits Product Line")
and Xxxxxxxx Tropical Freezers product line ("Xxxxxxxx Product Line" and,
together with the Cool Fruits Product Line, the "Product Lines"): The
formulations and recipes for the products included in such Product Lines
("Formulations"), a list of Seller's customers for the Product Lines ("Customer
List"), the inventory and product displays for the Product Lines and the product
packaging for the Xxxxxxxx Product Line described on Schedule A hereto, the
rights to any packaging design used in connection with the Product Lines
(subject to Section 4.1 hereof), and the Cool Fruits trademark, trademark
registrations and trademark applications ("Trademark"). It is understood and
agreed that Buyer can use the Cool Fruits name and Trademark for any and all
products except cookies and crackers.
1.2 Assignment and Assumption of Xxxxxxxx License. Seller does
hereby irrevocably assign to Buyer all of Seller's right, title and interest and
obligations in and to the license agreement between the Seller and Xxxxxxxx
Brands, Inc. ("Xxxxxxxx") for the Xxxxxxxx Product Line dated November 1, 1993,
as amended on November 26, 1996 ("Xxxxxxxx License"). Buyer does hereby accept
and assume all of the terms, covenants and conditions of the Xxxxxxxx License to
be performed from and after the effective date of this Agreement and shall from
and after the effective date of this Agreement assume full liability to Xxxxxxxx
under the Xxxxxxxx License with respect to such terms, covenants and conditions
to be performed from and after the effective date of this Agreement. The parties
hereto hereby agree that if Seller has not obtained the written consent of
Xxxxxxxx to the foregoing assignment by the effective date
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of this Agreement, such assignment shall be null and void and, together with all
references to the Xxxxxxxx Product Line, shall be deemed eliminated from this
Agreement without liability to any party hereto.
1.3 Indemnity. Seller assumes no liability to Buyer or to
third parties with respect to the performance characteristics of the products
manufactured or sold by Buyer under the Trademark or the Xxxxxxxx License or to
the use of the Trademark, and Buyer indemnifies and holds harmless Seller
against all losses, damages and expenses, including attorneys' fees, incurred as
a result of or related to claims of third persons involving the manufacture or
sale of the products comprising the Product Lines or the use of the Trademark or
the Xxxxxxxx License.
1.4 Purchase Price. In full payment for the Purchased Assets
and assignment of the Trademark and the Xxxxxxxx License, Worth hereby
surrenders for cancellation the options issued to him to purchase an aggregate
of 500,000 shares of Common Stock of Seller identified on Schedule B hereto
("Worth Options").
1.5 Transition of Business. Simultaneously with the delivery
of this Asset Purchase Agreement, Seller is delivering to Buyer the Customer
List and an assignment of the Trademark and is making available to Buyer the
inventory and product displays for the Product Lines and the product packaging
for the Xxxxxxxx Product Line described on Schedule A. Seller shall forward to
Buyer any future orders it receives for the Product Lines. Buyer and Seller
acknowledge that Buyer has possession of the Formulations. Buyer shall promptly
send to customers a joint announcement with Seller relating to the sale of the
Product Lines to Buyer. All future business matters relating to the Product
Lines shall be the sole responsibility of Buyer.
1.6 Sales Tax. To the extent required by law, Buyer will pay
any sales tax arising by reason of the sale of the Purchased Assets and the
assignment of the Trademark and the Xxxxxxxx License to Buyer.
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2. Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows and acknowledges that Buyer is relying upon such
representations and warranties in connection with the purchase by Buyer of the
Purchased Assets.
2.1 Corporate Existence and Power. Seller is a corporation
duly organized and validly existing, in good standing, under the laws of the
State of Delaware.
2.2 Authorization. The execution, delivery and performance of
this Agreement by Seller have been duly authorized by all necessary corporate
action. This Agreement has been duly executed by Seller and constitutes a valid
and legally binding obligation of Seller enforceable against Seller in
accordance with its terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (ii) as enforceability of any indemnification provision may be
limited under the federal and state securities laws, and (iii) that the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
3. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
3.1 Authority; Execution, Delivery and Performance of
Agreement. Buyer has full power and authority to enter into this Agreement and
to carry out the transactions contemplated hereby; all proceedings required to
be taken by Buyer to authorize the execution and delivery of this Agreement by
Buyer and the performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby have been properly taken; and this Agreement
constitutes a valid and legally binding obligation of Buyer. Neither the
execution, delivery nor performance of this Agreement by Buyer will, with or
without the giving of notice or the passage of time, or both, conflict with,
result in a default, right to accelerate or loss of rights under, or result in
the creation of any encumbrance pursuant to, or require the consent of any third
party or governmental authority pursuant to (a) any provision of Buyer's
certificate of incorporation or by-laws or (b) any franchise, mortgage,
indenture or deed of trust or any material, lease, license, agreement, or any
law, rule, regulation, order, judgment or decree to which Buyer is a party or by
which Buyer may be bound or affected.
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3.2 Obligations Relating to Product Lines. The Buyer is not
aware of any obligations of the Seller relating to or incurred in connection
with the Product Lines.
4. Covenants of Buyer.
4.1 No Use of Terms. Buyer agrees that it will not use the
trademarks "Frookie" or "Delicious" or the term "The Good For You," or any logo
using such trademarks or term, in connection with any product marketed by Buyer,
including any product constituting part of the Product Lines.
5. Title to Purchased Assets. Buyer accepts the Purchased Assets and
the assignment of the Trademark and the Xxxxxxxx License "as is" and without any
representation or warranty made with respect thereto by the Company, it being
acknowledged by Buyer that as a result of Worth's position as an officer and
director of the Company over the years Buyer has been and is in a position of
equal knowledge with the Company with respect to such matters.
6. Notices. Any notice required or permitted under this Agreement
shall be given in writing and shall either be delivered personally or sent by
certified mail, return receipt requested, postage prepaid, or by Federal Express
next business day service with signed receipt required, to the parties at their
respective addresses set forth below, or to such other address as either shall
have specified by notice to the other given as provided herein, and shall be
deemed duly given hereunder when so delivered. Any notice to Buyer shall be sent
to Buyer at 0000 Xxxx Xxxx Xxxxxxxxx, Xxxx #0, Xxxxxx, Xxxxxxx 00000-0000, and
any notice to Seller shall be sent to it at 0000 Xxxxx Xxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxx 00000, or at such other address as a party may designate by
notice to the other given as provided herein, with copies to Xxxxxx Xxxxxxx,
Esq., Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and Xxxxx Xxxx Xxxxxx, Esq., Xxxxxxxx Mollen & Xxxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
7. Indemnification. Buyer shall indemnify and hold harmless Seller
and its successors and assigns from and against any losses, damages, expenses or
liabilities, including, without limitation, reasonable attorneys' fees, which
may be sustained, suffered or incurred by Seller, its successors and assigns,
arising from or in connection with the breach of any of
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Buyer's representations, warranties, agreements, obligations or undertakings
hereunder. Seller shall indemnify and hold harmless Buyer and its heirs,
executors, legal representatives, successors and assigns from and against any
losses, damages, expenses or liabilities, including, without limitation,
reasonable attorneys' fees, which may be sustained, suffered or incurred by
Buyer or its heirs, executors, legal representatives, successors and assigns,
arising from or in connection with the breach of any of Seller's
representations, warranties, agreements, obligations or undertakings hereunder.
These indemnities shall survive the execution of this Agreement.
8. Miscellaneous.
8.1 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and may not
be modified, amended or terminated except by a written agreement specifically
referring to this Agreement signed by all of the parties.
8.2 Partial Invalidity. In the event that any provision of
this Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be construed as if
such invalid, prohibited or unenforceable provision had been more narrowly drawn
so as not to be invalid, prohibited or unenforceable. If, notwithstanding the
foregoing, any provision of this Agreement would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, such provision,
as to such jurisdiction for any reason, shall be ineffective to the extent of
such invalidity, prohibition or unenforceability, without invalidating the
remaining portion of such provision or the other provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
8.3 No Waiver. No waiver of any breach or default hereunder
shall be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
8.4 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of each party hereto, and its successors
and permitted assigns. This
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Agreement shall not be assigned by either Buyer, Seller or Worth and any
attempted assignment shall be void; provided, however, that Worth may assign his
rights and, except as set forth in the next sentence, obligations hereunder to a
corporation of which Worth is the sole stockholder. In the event of any such
assignment, Worth shall remain obligated to deliver the Worth Options in
accordance with Section 1.4.
8.5 Headings. The article and section headings contained
herein are for the purpose of convenience only and are not intended to define or
limit the contents of said articles or sections.
8.6 Cooperation. Each party hereto shall cooperate, shall take
such further action and shall execute and deliver such further documents as may
be reasonably requested by any other party in order to carry out the provisions
and purposes of this Agreement.
8.7 Governing Law. This Agreement and all amendments thereof
shall, in all respects, be governed by and construed and enforced in accordance
with the internal law of the State of New York without regard to principles of
conflicts of laws.
8.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed the day and year first above written.
THE DELICIOUS FROOKIE COMPANY, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: XXXXXX XXXXXX
Title: CHIEF FINANCIAL OFFICER
/s/ Xxxxxxx X. Worth
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Xxxxxxx X. Worth
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SCHEDULE A
Inventory-Finished Goods (a/c 13260)
June 30, 0000
Xxxx Xxxxxx
Xxxx Xxxx
Xxxxxxxxxxx Drums Lbs/Gal.
----------- ----- --------
Polynesian Passion - lbs 45 336
Pineapple WONF - lbs 3 419
Xxxxxxxx - gal 12 55
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Kisko
Unit
Description Quantity
----------- --------
Packaging
---------
Inserts 140,000
88 ct Boxes 41,200
Risers 4,020
Base 1,905
Trays 3,600
FOL Shippers 2,420
Dividers 4,757
Ingredients
-----------
45162 Xxxxxxxx Flavor 37.857
F10620 Pineapple Flavor 242.485
L44237 Pineapple WONF 485
Pre-Blends
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Polynesian 4 1/3
Hawaiian 4 1/4
Finished Goods 785
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Items Shipped not Billed
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Pails Pineapple flavor 4,190
Polynesian Passion Pre-Blend 8
A-1
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Diversified Distribution
5/30/97
Unit
Item Code # Description Quantity
---- ------ ----------- --------
Frookie 11911 Cool Fruit End Match Set 545
DCC Xxxxxxxx 54616A Xxxxxxxx Base 10,200
54616B Xxxxxxxx Tray 7,600
54616C Xxxxxxxx Xxxxx 4,200
A-2
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Schedule B
Cancellation of Options
Option issued pursuant to : 1995 Stock Option Plan
Option Number : 1
Date of Grant : July 6, 1995
Number of Options Originally Issued : 600,000
Number of Options to be Canceled : 500,000
Number of Options to be Retained : 100,000
