ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into on this
12th day of May, 1998, by and between VERMONT PURE SPRINGS, INC. ("VPS") a
Delaware Corporation with its principal place of business in Randolph, Vermont
("BUYER") and THE PERRIER GROUP OF AMERICA, INC. ("PERRIER"), a Delaware
Corporation with its principal place of business in Greenwich, Connecticut
("SELLER").
RECITALS
WHEREAS, VPS is a company engaged in the bottling and sale of natural
spring water with its manufacturing facility and principal place of business in
Xxxxxxxx Center, VT and
WHEREAS, Perrier is a company, engaged in the bottling and sale of
water with its principal place of business in Greenwich, Connecticut, and
WHEREAS, both parties desire to enter into agreements by which VPS
shall purchase the certain assets of Perrier related to its Home and Office
Bottled Water and Coffee Business in or about Albany, New York ("Alabany
Market") and other assets listed on Exibit "A".
NOW THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. ASSETS
1.1 Asset Purchase and Sale. Seller and Buyer mutually agree for the
Seller to sell, convey, transfer, assign and deliver to Buyer and Buyer to
purchase substantially all of the property of Seller relating to the Home and
Office (Route Distribution) bottled water and coffee Business in or about
Albany, New York, wherever located, tangible and intangible, (the "Business")
consisting of the following assets: vehicles, vehicle leases, purchase orders,
customer contracts, customer lists, inventory, and goodwill. (The assets being
purchased and sold hereunder are sometimes referred to collectively as "Assets"
and are identified in Exibit "A"). Assets of Seller not on the list are being
retained by Seller, including specifically, and without limitation, accounts
receivable arising out of sales on or before the Closing Date (as hereinafter
defined).
1.2 Xxxx of Sale. Title to the Assets will be conveyed to Buyer by
Seller pursuant to a Xxxx of Sale, free and clear of all liens and encumbrances
except for approximately $138,000 in bottled deposits which are being assumed by
Buyer. The Form of the Xxxx of Sale shall be prepared by Buyer's counsel prior
to the Closing Date.
1.3 Assumption of Liabilites. Buyer agrees to assume only those
certain operating liabilities as set forth in Schedule "B".
2. PURCHASE PRICE
2.1 Purchase Price: $2,500,000.00, provided that:
(i) $2,500,000.00 of the Purchase Price to be
paid in cash, by wire transfer of immediately available funds, at Closing
subject to adjustments as more fully set forth in subsection 2.1 (ii) herein.
(ii) The parties agree that the aforementioned purchase price
is based on a customer base of 3,978 cooler/D.W.S. (Customer to be defined by
the number of coolers/D.W.S equipment.) Seller will provide a verification of
Customers two (2) days prior to Closing and an adjustment of $500.00 per
customer plus/minus 3,978 customers will be made at Closing.
(iii) The parties agree that the aforementioned purchase price
is based on assets other than a customer base of 3,798 cooler/D.W.S Customers
valued at $533,195.00 as more fully set forth in Schedule A. Seller will provide
a verification of this portion of the Assets two (2) days prior to Closing and
an adjustment will be made for Assets missing at Closing.
(iv) Contingent consideration in the form of cash in an amount
equal to actual sales of small package (PET) sales by VPS from the acquired
customer list during the first year of operation of the Business commencing on
the Closing Date and terminating on the first anniversary of the Closing Date.
Payment, including simple interest calculated at the annual rate of 6% from the
Closing Date, will be paid within thirty days following the first anniversary of
the Closing Date. Buyer shall provide Seller with a reasonable written
accounting to support the calculation of the contingent consideration. In the
event that the parties cannot agree upon the accounting the determination of the
contingent consideration shall be made by KPMG-Peat Marwick whose fees shall be
equally shared by the parties.
(v) Buyer shall be responsible for all sales
taxes arising out of the Transaction.
3. EXCLUDED SECURITIES AND LIABILITIES
3.1 It is agreed and understood that this is a purchase and sale of
assets (with limited assumption of certain operating liabilities). The
securities of the Seller are expressly excluded from this transaction. All
liabilities not enumerated in Schedule B, including without limitation, Utility,
Taxing Authority and Employment Claims are expressly excluded (except for sales
tax arising out of the Transaction).
4. CONDUCT OF BUSINESS AND CONDITION OF PREMISES
PENDING CLOSING
4.1 Prior to the closing:
4.1.1. The business of Seller will be conducted only in the
ordinary course, in accordance with all laws and regulations of the township,
state, and federal governments, and Seller shall not violate the terms of any
existing leases or contracts.
4.1.2. Seller will continue to operate the business in the
manner heretofore operated by Seller. Until the Closing Date, a representative
of the Buyer shall have the right, during normal business hours, to visit the
Seller's place of business to examine Seller's books and records and to observe
the operation of the business.
4.1.3. Seller will keep all of the Assets and the Premises
fully insured against any loss, either by fire, other casualty or theft until
the time of Closing.
4.1.4. Seller will use their best efforts to preserve Seller's
organization relating to Business, and to preserve friendly relations with its
customers and trade creditors. Seller will assume all responsibility toward its
employees and their representative and Buyer assumes no responsibility for their
employment nor their termination of employment as the case may be.
4.1.5. In the event that prior to the date of Closing, the
Assets shall be totally or substancially lost or damages by fire or any other
casualty, the Buyer shall have the option to terminate this agreement or waive
the diminution in value and close under this Agreement buying the Assets "as
is", in which latter event it shall be entitled to treat the proceeds of any
insurance paid to Seller by reason of such loss or damage (excepting insurance
for lost profits, if any), as a payment on the purchase price or the Buyer shall
have the right to all insurance proceeds to apply the funds to repair and/or to
reconstruct the Assets.
5. Closing
5.1 ("Closing") shall take place on or before May 31, 1998 ("Closing
Date") and on the date and time set forth by written notice from the Buyer to
the Seller at least ten (10) days in advance thereto or otherwise as the parties
may agree.
5.2 Closing shall be held by telephone and the parties agree to accept
facsimile signatures and signed counterparts, to effectuate Closing. Original
documents will follow Closing.
5.3 Time shall be of the essence of this Agreement.
5.4 Any Closing adjustments shall be apportioned pro rata as of the
date of Closing.
6. BULK SALES ACT.
6.1 Buyer and Seller waive compiance with the applicable Bulk Sales
Act. Seller and its majority shareholder shall indemnify and hold Buyer harmless
for any loss to Buyer arising out of such non-compliance. Seller will execute
and deliver, at Closing Date, if requested by Buyer, an indemnification
agreement in accordance with this paragraph.
7. SELLER'S WARRANTIES.
7.1 The Seller represents and warrants to Buyer that as of the date of
this Agreement and as of the date of the Closing, that:
7.1.1 The Seller is a corporation duly organized and existing
in good standing under the laws of the State of Delaware with the corporate
power to own its assets and carry on it business as is now being conducted.
7.1.2. Seller has good and marketable title and the right of
sole possession and control of all the Assets being sold pursuant to this
Agreement, and that such Assets at the time of Closing will not be subject to
any mortgages, pledges, liens, encumbrances, security interest, or charges,
except as described in Schedule B.
7.2 The Seller represents that to the best of the Seller's knowledge,
information and belief (with respect to the Business):
7.2.1 The Seller is in compliance with all applicable laws,
ordinances, rules, regulations, and requirements of all governmental authorities
having jurisdiction therof, and that Seller has complied with all laws municipal
ordinances, and regulations of all governmental authorities having jurisdiction
thereof, and that Seller has complied with all laws, municipal ordinances, and
regulations applicable to Seller and in the ownership of the assets and the
Business hereunder.
7.2.2 There are no actions, suits, or proceedings pending or
threatened against Seller, which affect the Business or Assets either at law or
in equity, brought by any federal, state, or municipal or other governmental
agency, department, board, bureau, or other instrumentality.
7.2.3 All federal, state, and local tax returns required to be
filed have been filed, all deficiencies proposed have either been paid or
settled or are included in an account for accrued taxes; all withholding,
unemployment, social security, excise interest have been paid or will be paid by
Seller after Closing.
7.2.4 All financial information information provided to the
Buyer is accurate and in accordance with the books and records of the Company,
and fairly represents the financial condition, assets and liabilities of the
Company.
7.2.5 Neither Seller nor any direct or indirect shareholder
thereof has made any agreement or taken any action which might cause anyone to
become entitled to a broker's fee or commission.
7.2.6. Seller and buyer agree that the acounts receivables
will remain the property o fthe Seller; however, Seller hereby warrants that it
will provide an accounting to the Buyer of all receivables mistankenly received
by the Seller for sales made and/or services rendered subsequent to the Closing
Date.
7.2.7 Seller and Buyer agree that the 800 telephone number
utilized by the seller in connection with the Business will remain the property
of the Seller; however, Seller hereby warrants that following the Closing Date,
it will implement a call-forwarding service on an 800 number more fully
described in Exhibit C.
7.3 If Seller obtains any knowledge or information between the date
hereof and Closing, making or indicating that any of the aforesaid warranties or
representations are no longer true, or indication that any of the
representations and conditions set forth in this Section 7 hereof are not true
and cannot be made true by the Seller by the time of Closing, or will no longer
be true as of the date of Closing, Seller will promptly notify Buyer of such
change in circumstances.
8. BUYER'S WARRANTIES
8.1 As an inducement to the Seller to enter into this Agreement and to
consummate the transactions contemplated herein, the Buyer represents and
warrants to the Seller and agrees as follows:
a. Organization. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
b. Authority. This Agreement and the transactions contemplated
herein have been duly approved by all necessary corporate action on the part of
the Buyer. This Agreement, when executed and delivered by the Buyer, and
assuming due execution hereof by the Stockholder will constitute the valid and
binding agreement of the Buyer enforceable in accordance with its terms. Neither
the execution nor the delivery of this Agreement, nor the consummation of the
transactions contemplated herein, nor compliance with nor fulfillment of the
terms and provisions hereof, will (i) conflict with or result in a breach of the
terms, conditions or provisions of or constitute a default under the governing
instruments of the Buyer, any instrument, mortgage, agreement, judgement, order,
award, decree or other restriction to which the buyer is a party or by which the
Buyer is bound or any statute or regulatory provisions affecting it or (ii)
require the approval, consent, or authorization of or any filing with or
notification to any federal, state or local court, governmental authority or
regulatory body. The Buyer has full power and authority to purchase the Stock
pursuant to this Agreement and to do and perform all acts and things required to
be done by the Buyer under this Agreement.
c. Brokers. Buyer has paid or shall pay any fee or
commission to any broker, finder or intermediary for or on account of the
transactions provided for in this Agreement.
d. No Omissions. None of the representations or warranties of
the buyer contained herein and none of the other information or documents
furnished to the seller by the Buyer or its representatives in connection with
this Agreement is false or misleading in any material respect or omits to state
a fact herein or therein necessary to make the statements herein or therein not
misleading in any material respect; to the best knowledge of the Buyer, there is
no fact ehich adversely affects, or in the future is likely to adversely affect,
the business or assets of the Buyer in any material respect which has not been
disclosed in writing to the seller.
e. Financial Ability. The buyer has the financial
resources and ability to meet each of its obligations under this Agreement,
whether due at Closing or after Closing, in a timely manner and withour default.
8.2 Opinion of Counsel. At the closing, the Buyer shall deliver to the
seller an opinion of Ledgewood Law Firm, P.C., counsel for the Buyer, in form
and substance satisfactory to the Seller and its counsel, to the effect that (i)
the Buyer is a corporation duly organized, validly existing and in good standing
under the laws State of Delaware; and (ii) this Agreement and the transactions
contemplated herein have been duly approved by all necessary corporate action of
the Buyer and such Agreement, assuming due execution by the seller, is the valid
and binding agreement of the Buyer enforceable against the Buyer in accordance
with its terms except as enforcement of such agreement may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and, (iii) neither the execution and delivery of this agreement, nor
the consumation of the transactions contemplated herein, (a) violates or
conflicts with or results in the breach of the terms, conditions or provisions
of, or constitutes a default under, the Certificate of Incorporation or Bylaws
of the Company or any agreement or instrument known to such counsel to which the
Buyer is a party or by which either of them is bound or (b) requires the
consent, approval or authorization of or any filing with or notification to any
Federal, state or local court, governmental authority or regulatory body not
already obtained or made, as the case may be. In giving such opinion, counsel
for the Buyer may rely, as to matters of fact, upon certificates of officers of
the Buyer.
9. CONDITIONS PRECEDENT
All obligations of the Buyer under this agreement are subject to
fulfillment, prior to or at Closing, of each of the following conditions:
9.1 Due Diligence. Buyer has been afforded the opportunity to conduct
due diligence on the business and operations of the Seller and is satisfied, in
its reasonable discretion, that the business is as represented to VPS prior to
entering into this Agreement.
9.2 Representation and Warranties. The representations and
warranties of Seller contained in this Agreement being true at the time of
closing as though such representations and warranties were made at such time.
9.3 Compliance with Agreement. Seller shall have performed and complied
with all agreements and conditions required by this Agreement to be performed or
complied with by prior to or at Closing.
9.4 Opinion of counsel. Seller shall have delivered to Buyer, in form
and content satisfactory to Buyer's counsel, an opinion of its counsel issued to
Buyer to the effect that:
9.4.1 Seller has been duly incorporated and is existing as a
corporation in good standing under the laws of the State of Delaware.
9.4.2 This transaction and its terms do not violate any
provisions of Seller's Articles of Incorporation or Bylaws;
9.4.3 Seller has taken all shareholder, director and other
actions necessary to authorize the transactions contemplated by the parties
hereto;
9.4.4 Seller has authority to carry on the business
presently being conducted by Company;
9.4.5 Seller has full power and authority to sell, assign and
transfer the Assets sold pursuant to this Agreement.
9.5 Documentation. Negotiation and preparation of definitive documents,
including all collateral documents, governing the transactions contemplated
herein under terms and conditions acceptable to Buyer's and Seller's counsel.
9.6 Financing. Buyer obtains financing for the purchase of assets
herein described on terms acceptable to Buyer.
9.7 Seller's Shareholder Approval. Seller shall have obtained
any necessary Shareholder approval for this transaction.
10. NONDISCLOSURE O FCONFIDENTIAL INFORMATION
10.1 Seller and its directors, shall not, during the term of this
Agreement or at any time for a period of two years following Closing, unless
authorized to do so in writing by the Buyer, directly or indirectly disclose or
permit to be known to , or used for the benefit of , any person, corporation or
other entity (outside of the employ of the Company), or itself, any confidential
information. For the purposes of this Section 10, the term confidential
information shall include, but not limited to, confidential or proprietary
knowledge or information with respect to the conduct or details of the Seller's
Business or relating to the Assets including, but not limited to, lists of
customers of the Buyer's Business, pricing strategies, or marketing methods.
Confidential information does not include matters which are generally known
outside of the Buyer, public knowledge or in the publice domain.
10.2 All confidential information described in section 10.1 shall be
the exclusive property of the Buyer, and Seller shall use its best efforts to
prevent any publication or disclosure thereof.
10.3 The provisions of this Section 10 shall survive the Closing and
shall continue for a period of two (2) years.
11. RESTRICTIVE COVENANT
In order to protect the Buyer in its full beneficial use and enjoyment
of the goodwill, assets, business relationships, marketing techniques and other
know-how acquired as a result of this Agreement, for a period of three (3) years
after the Closing of this Agreement, Seller, including its officers and
directors will not, within the Albany Market, directly or indirectly compete
with the Buyer in the Business or the home/office water and coffee delivery
business, and will not either (i) solicit any persons or entities known to be
customers of the Buyer to purchase any of the aforementioned products; or (ii)
solicit or induce any employee of the Buyer to leave such employment to take a
position with the Seller or with any company for which any officer or director
then works. During the aforesaid period, Seller shall not make any statements or
commit any acts (including contacting any of the Buyer's customers that would in
any way be tortiously injurious or detrimental to the Company's image, business
or customer relations. The provisions of this Section 10 shall survive the
termination, for any reason, of this Agreement and shall continue for the three
(3) year period contemplated by this Section 10. Seller specifically reserves
the right and intends to remain in the business of selling retail bottled water
products in the Albany Market in any size or container in any other manner it
deems appropriate provided that sales are not made via the home/office water and
coffee delivery business.
12. REMEDIES.
Seller acknowledges that their promises with respect to the
Agreement not to compete and to maintain the confidentiality of information in
accordance with this Agreement are promises of a special, unique, ususual,
extraordinary and intellectual character, which give them peculiar value the
loss of which cannot be reasonably or adequately compensated in an action of
law, and that, in the event there is a breach hereof by Seller, the Company eill
suffer irrepatable harm, the amount of which will be impossible to ascertain.
Accordingly, the Company shall be entitled, if it so elects, to institute and
prosecute proceedings in any court of competent jurisdiction, either at law or
in equity, to obtain damages for any breach or to enforce specific performance
of the provisions or to enjoin Seller from commiting any such act in breach of
this Agreement. The remedies granted to the Buyer in this Agreement are
cumulative and are in addition to remedies otherwise available to the Buyer at
law or in equity. If the Buyer is obliged to resort to the courts for the
enforcement of a covenant of Seller contained in Section or, such covenant shall
be extended for a period of time equal to the period of such breach which
extension shall commence on the later of (i) the date on which the original
(unextended) term of such covenant is scheduld to terminate or (ii) the date of
the final court order (without further
right of appeal) enforcing such covenant.
13. GOVERNING LAW
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the state of New York exclusive of its conflict of
laws and provisions. The parties agree that venue shall lie in White Plains, New
York and shall to jurisdiction of an appropriate court located in the city.
14. TERMS SEVERABLE
In the event that any term or provision hereof or the application
thereof to persons or circumstances shall to any extent be invalid or
unenforceable, then the remainder of this Agreement shall not be affected
thereby and each term or provision hereof shall be valid and enforced to the
fullest extent permitted by law.
15. SURVIVAL OF TERMS.
The terms of this Agreement, including but not limited to the
warranties, representations and covenants made by the parties hereto, shall
survive for a period of one (1) year from the Closing Date and the Seller shall
remain liable for any deficiency arising from any breach of the same during such
period.
16. FORCE MAJEURE.
The failure of or delay in compliance with any of the terms and
conditions of this Agreement by either party shall be excused if said failure or
delay is due to an Act of God, fire, flood, strike, labor dispute, accident, act
of government or any similar cause beyond the reasonable control of said party.
17. ENTIRE AGREEMENT.
This Agreement, including the Preambles, and any other document or
exhibit incorporated herein by reference sets forth the entire understanding of
the parties. It shall not be changed or terminated orally. 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 document.
18. NOTICE.
Notices required under this Agreement shall be in writing sent by
certified mail and facsimile to the representatives of the parties as follows:
Vermont Pure Springs, Inc.
Xxxxx 00
Xxxxxxxx Xxxxxx, XX 00000
Attn:Xxxxxxx Xxxxxx
Facsimile (000) 000-0000
With Copy to:
Xxxxx X Xxxxx, Esquire
Ledgewood Law Firm
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile (000) 000-0000
To Seller:
The Perrier Group of America, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx and Xxxx Xxxxx
Facsimile (000) 000-0000
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the day, month and year first written above.
WITNESS: VERMONT PURE SPRINGS, INC.
By:
Name:
Title:
WITNESS: THE PERRIER GROUP OF AMERICA, INC.
By:
Name:
Title:
