EX-10.6
PURCHASE AGREEMENT
AGREEMENT (the "Agreement") dated the 28th day of April 1995 by and among
the Nature's Best Water Company, Inc. a corporation existing under the laws of
the State of New York, maintaining offices at 000-00 Xxxxxxx Xxxx, Xxxx
Xxxxxxxxx Xxxxxxx Xxx Xxxx, (hereinafter referred to as "Nature's Best"), Xxxxx
Xxxxxxxx, residing at 00 Xxxxxxxxxxx Xxxx, Xxxxx Xxx Xxxx 00000 (hereinafter
referred to as "Xxxxxxxx", and Xxxxxxx Xxxxxxxxx, residing at 0000X Xxxxxxxxxx
Xxxx, Xxxxxxx Xxx Xxxx 00000 (hereinafter referred to as "Xxxxxxxxx") and/or
collectively as the "Sellers"), and the Puro Corporation of America, a New York
Corporation, maintaining offices at 00-00 00xx Xxxxxx, Xxxxxxx Xxx Xxxx
(referred to as "Puro" and/or "Purchaser").
WITNESSETH
WHEREAS, Xxxxxxxx and Xxxxxxxxx are the original and sole Shareholder of
Nature's Best Water Company, Inc. and hold a total of one hundred (100) shares
of Common Stock, representing one hundred (100%) percent of all such voting and
non voting, shares issue and outstanding, and
WHEREAS, Nature's Best desires to sell to Purchaser and Purchaser desires
to purchase selected assets owned by Nature's
-1-
Best and assume selected liabilities of Nature's Best.
1. PURCHASE PRICE:
The purchase price to be paid the Seller by the Purchasers for selected
assets of Nature's Best shall be Two Hundred Thousand Dollars ($200,000) which
is derived and calculated upon the following representations of the Sellers:
(a) The Sellers have represented that the most recent twelve month
revenues of Nature's Best, to be approximately Two Hundred Eighty Thousand
Dollars ($280,000). Attached hereto as Exhibit 1.
(b) The most recent annual water cooler rentals, estimated to be
approximately Ten Thousand Dollars ($10,000) for Eighty (80) units. Attached
hereto as Exhibit 2.
(c) The Sellers shall convey all operating assets of Nature's Best,
including customer lists, rental and supply agreements, files, records,
telephone numbers, advertising and non compete agreements, use of trade name
"Nature's Best" inventory, bottles, coolers, containers, racks, crates (wood or
plastic) and furniture and fixtures.
2. PAYMENT FOR ASSETS
The purchase money that may be due and owing for the purchase of the assets
of Nature's Best, as determined pursuant to paragraph 1, shall be paid to
Nature's Best Water Company, Inc. as follows:
-2-
(a) At the date of closing, by certified check, payable to Nature's Best
or whomever else the Sellers designate in writing on or before the date of
closing, the sum of Fifty Thousand Dollars ($50,000), less any amount or sums
of money due and owing Puro on said date.
(b) The giving of a convertible note by Puro in the face Amount of One
Hundred Fifty Thousand Dollars ($150,000), payable over three years (3) without
interest. Payment to be made pursuant to the terms in the note. The amount due
the Seller on the note under this sub-paragraph "b", shall be adjusted in
accordance with the percentage of increase or decrease in the Purchaser's
Nature's Best Division's accounts yearly gross sales, over the gross sales of
Nature's Best Water Company, Inc. for the year ending April 30, 1995. Said
amount shall be paid or deducted if required during the year one, if Puro's
public offering occurs
-3-
December 31, 1995 otherwise the adjustment shall occur in year two. However the
face amount of the note herein shall not exceed, in total, the sum of One
Hundred Fifty Thousand ($150,000.00) Dollars.
(c) If Puro Corporation of America shall be in the process of preparing a
Public Stock Offering, the Sellers and the Sellers only shall have the option to
convert the balance of the principal due and owing on the notes contained in
subdivision (b) above for the purchase of said stock in the Public Offering, at
the offering price less any underwriters commissions. The right of conversion
shall belong only to the Sellers herein and may not be transferred, assigned or
given to any other person or entity. If the initial public offering occurs
before December 31, 1995, the adjustment up or down mentioned in paragraph "c"
above, will be determined by year to date change prorated to the twelve month
period.
3.REPRESENTATIONS OF THE PURCHASER:
(a) Purchaser will assume and pay, from the execution of
-4-
the Agreement, all monthly payments due and owing the Yellow Book and Pages for
the advertisements of the Corporation, Nature's Best Water Company, Inc.
(estimated to be $000.00 per month).
(b) Purchaser will assume and be liable to Nature's Best customers for all
of Nature's Best customer bottle deposits as of the date of closing.
(c) Purchaser will assume all cooler contracts between Nature's Best and
its customers. A list of cooler contracts being assumed is annexed as
Exhibit 2.
(d) Purchaser shall fully comply with its obligations under the New York
State Bulk Assets Sales Law.
(e) Purchaser represents that it has full power and legal right to
execute, deliver and perform this agreement. The execution, delivery and
performance of this agreement will not contravene any provision of the
certificate of incorporation or by-laws of Purchaser.
4. REPRESENTATIONS OF THE SELLERS:
(a) The Sellers represent that Nature's Best Water Company, Inc. Federal,
State and Local taxes have been or will be filed and paid. If for any reason a
Tax audit is made of Nature's Best and a claim for past taxes is made to the
Purchaser, any money paid by the Purchaser pursuant to these claims shall be
deducted from the money due and owing Sellers in accordance with paragraph 1 of
this
-5-
agreement. In the event of a tax audit, Puro must notify Sellers pursuant to
paragraph 10 herein.
(b) The Sellers represent that there are no actions, suits or other
proceedings pending before any court, tribunal, commission, agency or bureau
against Nature's Best, except as noted in Exhibit 3 attached hereto. Sellers
are not in default with respect to any order, injunction, writ or decree of any
court, tribunal, commission, agency, office or bureau.
(c) Sellers further represent that they shall fully cooperate with the
Purchaser to comply with the New York State Bulk Asset Sales Law. Any failure
to cooperate by the Seller which results in a claim against the Purchaser, shall
be offset against any money due and owing under this agreement.
5. ACCOUNTS RECEIVABLE:
Purchaser shall be under no obligation to assist in collection of any
accounts receivable due from Nature's Best customers. In the event Purchaser
does receive any payments which are denominated payments of Nature's Best's
accounts receivables, Purchaser shall forward said payments to Sellers, without
undue delay. A schedule of accounts receivable is set forth on Schedule 4
annexed hereto.
-6-
6.RESTRICTIVE COVENANT:
Sellers covenant that they will not reestablish, reopen, be engaged in, nor
in any manner whatsoever become interested, directly or indirectly, either as a
employee, as an owner, as a partner, as a agent, or as stockholder, director or
officer of a corporation, or otherwise, in any business, trade or occupation
similar to the one operated by the corporation Nature's Best Water Company Inc.,
within the Counties of Suffolk, Nassau and the City of New York for a period of
Seven (7) years from the date of this agreement. Upon the termination for
economic reasons of the Employment Agreement of Xxxxx Xxxxxxxx the period shall
be three years from the date of termination. Not withstanding the foregoing,
Xxxxx Xxxxxxxx and and Xxxxxxx Xxxxxxxxx shall be bound by the seven years
period with respect to the existing PURO/NATURE'S BEST customers as of the date
of termination. Xxxxx Xxxxxxxx upon becoming a employee of Puro, by executing
his employment agreement, shall also execute a employee restrictive covenant
agreement as attached hereto as Exhibit 5.
7. GOVERNING LAW:
This Agreement shall be governed by the laws of the State of New York
without giving effect to the principles of Conflict of Law.
-7-
8. ARBITRATION:
Any Dispute relating to the interpretation or performance of this Agreement
shall be resolved at the request of either party through binding arbitration in
accordance with the rules of the American Arbitration Association. Judgment of
any award determined by the arbitrators may be entered in any appropriate court
having jurisdiction In event that arbitration is commended to enforce any of
the terms of this Agreement, the prevailing party in the arbitration shall be
entitled to the costs thereof, including reasonable attorney's fees.
9. CAPTIONS
The captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Agreement
nor the intent of any provisions thereof.
10. NOTICE
All notices, requests or other communications required hereunder shall be
in writing and shall be deemed to have been duly given or made, if personally
delivered, or if mailed by United States certified mail, return receipt
requested, to the parties at the respective addresses first above written, or at
such other address as shall be specified in writing by either
-8-
of the parties to the other in accordance with the terms and conditions of this
paragraph.
11. BROKERAGE:
Each party represents to each other party that it has dealt with no finder
or broker in connection with any of the transactions contemplated by this
agreement or the negotiations looking forward to the consummation of this
agreement and that no broker or other person is entitled to any commission or
finder's fee in connection with any such transactions or negotiations, and each
party hereby indemnifies each other party against and agrees to hold such other
party harmless from any liability or expense which may be imposed by or incurred
by such other party in connection with any claim by any such finder or broker
based upon any alleged arrangement or communication with the indemnifying party.
12. EXPENSES
Whether or not the transactions contemplated by this agreement shall be
consummated, all expenses incurred by the Sellers or the Purchaser in connection
with the transactions contemplated hereby shall be the responsibility of and for
the account of the party who ordered the particular service or incurred the
particular expense.
This Agreement may not be changed orally. The terms,
-9-
warranties and agreements herein contained shall bind and inure to the benefit
of the respective parties hereto, and their respective legal representatives,
successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be made and
executed the day and year first written above.
Nature's Best Water Company, Inc.
by /s/ Xxxxx X. Xxxxxxx Pres.
--------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxxx
Puro Corporation of America
by /s/ Xxxxx Xxxx Pres.
----------------------------
-10-
