EX-10.3
PURCHASE AGREEMENT
AGREEMENT (the "Agreement") dated the 30th day of January 1995 by and
among the Bark Water Co. Ltd., a corporation existing under the laws of the
State of New York, maintaining offices at 00 Xxxxxxxx Xxxxxx, Xxxxxxxx
Xxx Xxxx, (hereinafter referred to as "Bark Water" or Seller), and
Xxxxxxx Xxxxxx, residing at 00-00 000xx Xxxxxx, Xxxxxx Xxxxx Xxx Xxxx 00000,
(hereinafter referred to as "Xxxxxx"), 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, Xxxxxx is the original and sole Shareholder of Bark Water Co.
Ltd. and holds 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, Bark Water desires to sell to Purchaser and Purchaser desires
to purchase selected assets owned by Bark Water and assume selected
liabilities of Bark Water.
1. PURCHASE PRICE:
The purchase price to be paid the Seller by the
-1
Purchasers for selected assets of Bark Water shall be Four Hundred Fifty
Thousand Dollars ($450,000) 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 Bark Water for the calendar year 1994, to be approximately Two
Hundred Eighty Six Thousand Dollars ($286,000). Attached hereto as Exhibit 1.
(b) The most recent annual water cooler rentals for the calendar year
1994, estimated to be approximately Seventy Thousand Dollars ($70,000) for
six hundred units. Attached hereto as Exhibit 2.
(c) The Sellers shall convey all operating assets of Bark Water,
including customer lists, rental and supply agreements, files, records,
telephone numbers, advertising and non compete agreements.
2. PAYMENT FOR ASSETS
The purchase money that may be due and owing for the purchase of the
assets of Bark Water, as determined pursuant to paragraph 1, shall be paid to
Bark Water Co. Ltd. as follows:
(a) At the date of closing, by certified check, payable to Bark Water or
whomever else the Sellers designate in writing on or before the date of
closing, the sum of One Hundred Fifty Thousand Dollars ($150,000), less any
amount or sums of money due and owing Puro on said date. The Sellers agree to
pay from
-2-
the cash received at the closing his and/or its obligation due and owing
under an original Sellers note, a copy of which is annexed as exhibit 3, that
places a lien on Bark Water's assets and stock, so that Bark Water is able to
convey the assets covered by this Agreement free and clear of any and all
obligations, claims and liens held by said Xxxxx Xxxx, Xxxxxx Xxxxx and any
other third person or entity.
(b) The giving of a note by the Purchaser and personally guaranteed by
Xxxx Xxxx and Xxxxx Xxxx, Co-Chief Executive Officers of Puro, in the face
amount of One Hundred Twenty Thousand Dollars ($120,000), payable monthly
over seven years from the date of closing, with interest at the rate of nine
(9%) percent per annum. A copy of the note and guaranty is annexed hereto as
Exhibit 4.
(c) The giving of a convertible note by Puro in the face Amount of One
Hundred Eighty Thousand Dollars ($180,000), personally guaranteed by Xxxx
Xxxx and Xxxxx Xxxx, Co-Chief Executive officers of Puro, payable over six
years (6) with interest at the rate of nine percent (9%) per year. Interest
only will be due and payable monthly for years one and two. For the years
three through six principal and interest shall be paid monthly at the rate of
$4479.32 per month. The amount due the Seller on the note under this
sub-paragraph "c", shall be
-3-
adjusted in accordance with the percentage of increase or decrease in the
Purchaser's Long Island Division's and New York City Bark accounts yearly
gross sales, over the gross sales of the Long Island Division plus "Bark
Water" for the year ending December 31, 1994. Said amount shall be paid or
deducted if required during the year one, if Puro's public offering occurs
before 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 Four Hundred Thousand ($400,000.00) Dollars. If Bark Water customers
cease to continue to do business with Puro, anytime after November 18, 1994
as a result of inadequate revenue from Puro, the gross sales figures for
calendar 1994 or the applicable part thereof shall be added to the 1995 gross
sales figures for the purpose of the adjustment contained herein above.
(d) If Puro Corporation of America shall be in the process of preparing
a Public Stock Offering, the Sellers and the Sellers only have the option to
convert the balance of the principal due and owing on the notes contained in
subdivisions (b) and (c) 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, Bark Water Co. Ltd. (estimated to
be $350.00 per month).
(b) Purchaser will assume and be liable to Bark Water customers for all of
Bark Water's customer bottle deposits as of the date of closing.
(c) Purchaser will assume all cooler contracts between Bark Water 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. The above
representation shall survive closing.
4. REPRESENTATIONS OF THE SELLERS:
(a) The Seller and Xxxxxx represent that Bark Water's Federal, State and
Local taxes have been or will be filed and paid. If for any reason a Tax
audit is made of Bark Water, and a claim for past taxes is made to the
Purchaser, any money paid 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 Seller and Xxxxxx represent that there are no actions, suits or
other proceedings pending before any court, tribunal, commission, agency or
bureau against Bark Water, 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) Seller and Xxxxxx 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 Bark Water customers. In the event Purchaser
does receive any payments which are denominated payments of Bark Water's
accounts receivables, Purchaser shall forward said payments to Sellers,
without undue delay and without reduction. A schedule of accounts receivable
is set forth in Schedule 5 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 private
stockholder, director or officer of a corporation, or otherwise, in any
business, trade or occupation similar to the one operated by the corporation
Bark Water Co. Ltd., 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
Xxxxxxx Xxxxxx the period shall be two years from the date of termination.
Not withstanding the foregoing, Xxxxxxx Xxxxxx shall be bound by the seven
years period with respect to the existing PURO/BARK customers as of the date
of termination. Xxxxxxx Xxxxxx upon becoming a employee of Puro, by executing
his employment agreement, shall also execute a employee restrictive covenant
agreement as attached hereto as Exhibit 6. This restrictive covenant and the
restrictive covenant attached hereto as Exhibit 6 shall be rendered null and
void in the event of a default by purchase on the notes executed
simultaneously herewith.
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 commenced 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.
Bark Water Co. Ltd.
by /s/ Xxxxxxx Xxxxxx Pres.
--------------------------
/s/ Xxxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx
Puro Corporation of America
by /s/ Xxxx Xxxx Pres
--------------------------
-10-
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENT, that Bark Water Co. Ltd. of 00 Xxxxxxxx
Xxxxxx, Xxxxxxxx Xxx Xxxx, in consideration of the sum of Four Hundred Fifty
Thousand ($450,000) Dollars, lawful money of the United States, paid to me in
hand by the Puro Corporation of America, 00-00 00xx Xxxxxx, Xxxxxxx Xxx Xxxx,
receipt of which is hereby acknowledged has bargained and sold, and by these
present does grant and convey unto Puro Corporation of America, its
successors and assigns, the
a. Accounts, Inventory and Coolers valued at $145,000
b. Furniture, Fixtures and Equipment valued at $5,000
c. Goodwill valued at $300,000
and attached hereto Exhibit A and Exhibit B respectively.
To Have And Hold the same by Puro Corporation of America, its successors
and assigns forever;
And Bark Water Co. Ltd. warrants and represents to Puro Corporation of
America that the title conveyed is good, its transfer is appropriate and
rightful, and the accounts, containers and water coolers described in Exhibit
A and B are and have been delivered free of any security interest, lien and
encumbrance thereon.
EXECUTED this 30th day of January 1995 at 00-00 00xx Xxxxxx, Xxxxxxx Xxx
Xxxx.
Bark Water Co. Ltd.
by /s/ Xxxxxxx Xxxxxx Pres.
---------------------------
Xxxxxxx Xxxxxx
State of New York)
County of Queens )
On January 30th, 1995, before me, a notary public for the State of New
York, personally appeared Xxxxxxx Xxxxxx, known to me or proved to me to be
the President of Bark Water Co. Ltd., the person whose name is subscribed to
the within Xxxx of Sale and acknowledged to me that he executed same.
[seal] /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------------
Notary
Xxxxxxx Xxxxxx being duly sworn depose and say:
That he has read the foregoing document, warrant and guarantee and that the
statements made by Bark Water Co. Ltd., BY its president, Xxxxxxx Xxxxxx are
true, full well realizing that Puro Corporation of America is relying upon
its representation.
/s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
State of New York)
County of Queens )
On January 30th, 1995, before me, a notary public for the State of New
York, personally appeared Xxxxxxx Xxxxxx, known to me or proved to me to be,
the person whose name is subscribed to the within Xxxx of Sale and acknowledged
to me that he executed same.
[seal] /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------------
Notary
VARIABLE PROMISSORY NOTE
$120,000.00 JANUARY 30, 1995
For value received, Puro Corporation of America maintaining offices at
00-00 00xx Xxxxxx, Xxxxxxx Xxx Xxxx 00000 promises to pay to the order of
Bark Water Co. Ltd. ("Bark Water") maintaining offices at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxx Xxx Xxxx, One Hundred Twenty Thousand ($120,000.00) Dollars in the
following manner: $1930.70 on March 1, 1995 an $1930.70 on the 1st day of
each month thereafter until February 1, 2002 when the entire amount is fully
paid, with interest from the date hereof, at the rate of nine (9%) percent
per annum, included in each installment. Payments shall be made at such
locations as Bark Water may from time to time designate in writing. All
installments if not paid within 15 days of the due date shall become due and
payable forthwith, at the option of holder. This note shall be governed by
the laws of the State of New York, without giving effect to the principles of
conflict of laws. Bark Water may at any time negotiate and assign this note,
but said note is subject to the terms and
contained in the Purchase Agreement executed simultaneous hereto between Puro
Corporation of America, Bark Water and Xxxxxxx Xxxxxx. Protest waived.
Attest: Puro Corporation of America
/s/ Xxxxx Xxxx By /s/ Xxxx Xxxx
-------------------------- ------------------------------
Xxxxx Xxxx Xxxx Xxxx - President
Payment of the within promissory note is herewith personally guaranteed
jointly and severable by the following individuals, Xxxxx Xxxx, residing at
00 Xxxxxxxx Xxxx, Xxxx Xxxxxxxxxx, XX 00000 and Xxxx Xxxx, residing at 0000
Xxxxxxxx Xxxxx, Xx. Xxxxx, Xxx Xxxx, 00000. The payee of the written note may
only assign this note to Xxxxxxx Xxxxxx, which may be done at any time. The
Guarantors herein shall have the same rights and defenses against the payment
of the note which the maker (Puro) shall have the Guarantors herewith
guarantee the payment of the within note. The Guaranty shall continue until
all sums due under the promissory note executed simultaneously herewith are
paid in full and shall be governed by New York State Law.
/s/ Xxxxx Xxxx /s/ Xxxx Xxxx
------------------------ -------------------------------
Xxxxx Xxxx Xxxx Xxxx
VARIABLE PROMISSORY NOTE
$180,000.00 JANUARY 30, 1995
For value received, Puro Corporation of America maintaining offices at
00-00 00xx Xxxxxx, Xxxxxxx Xxx Xxxx 00000 promises to pay to the order of
Bark Water Co. Ltd. ("Bark Water") maintaining offices at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxx Xxx Xxxx, One Hundred eighty Thousand ($180,000.00) Dollars, with
interest at nine (9%) percent per annum in the following manner: Interest
payment of $1350.00 on March 1, 1995 and #1350.00 on the 1st day of each
month thereafter until February 1, 1997. Principal and interest payments in
the amount of $4479.32 payable on March 1, 1997 and monthly thereafter until
February 1, 2001, when the entire amount is fully paid, with interest from
the date hereof. Payments shall be made at such locations as Bark Water may
from time to time designate in writing. All installments if not paid within
15 days of the due date shall become due and payable forthwith, at the option
of holder. This note shall be governed by the laws of the State of New York,
without giving effect to the principles of conflict of laws. Bark Water may
at any time negotiate and assign this note, but said note is subject to the
terms and conditions
contained in the Purchase Agreement executed simultaneous hereto between Puro
Corporation of America, Bark Water and Xxxxxxx Xxxxxx. Protest waived.
Attest: Puro Corporation of America
/s/ Xxxxx Xxxx By /s/ Xxxx Xxxx
-------------------------- ------------------------------
Xxxxx Xxxx Xxxx Xxxx - President
Payment of the within promissory note is herewith personally guaranteed
jointly and severable by the following individuals, Xxxxx Xxxx, residing at
00 Xxxxxxxx Xxxx, Xxxx Xxxxxxxxxx, XX 00000 and Xxxx Xxxx, residing at 0000
Xxxxxxxx Xxxxx, Xx. Xxxxx, Xxx Xxxx, 00000. The payee of the written note may
only assign this note to Xxxxxxx Xxxxxx, which may be done at any time. The
Guarantors herein shall have the same rights and defenses against the payment
of the note which the maker (Puro) shall have the Guarantors herewith
guarantee the payment of the within note. The Guaranty shall continue until
all sums due under the promissory note executed simultaneously herewith are
paid in full and shall be governed by New York State Law.
/s/ Xxxxx Xxxx /s/ Xxxx Xxxx
------------------------ -------------------------------
Xxxxx Xxxx Xxxx Xxxx
DOCUMENTS
SALE OF
BARK WATER CO. LTD.
TO
PURO CORPORATION OF AMERICA
JANUARY 30, 1995
Xxxxxxxxx X. Xxxxxxxx Esq.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
[LETTERHEAD]
January 30, 1995
Xxxxxxx Xxxxxx
00-00 000xx Xxxxxx
Xxxxxx Xxxxx, Xxx Xxxx 00000
Re: Employment Agreement
Puro Corporation of America with Xxxxxxx Xxxxxx
Dear Xx. Xxxxxx:
This will confirm the arrangements, terms and conditions whereby Xxxxxxx
Xxxxxx (hereinafter referred as the "Employee") will be employed by Puro
Corporation of America (hereinafter referred as "Company").
You will be retained as a Employee handling the Nassau and Suffolk
Counties Bark Water Co. Ltd., d/b/a Nature's Way, divisions of the Company,
which are located at Garfield Avenue, Bayshore New York. As Manager you will
be required to devote a minimum of eight hours a day to your duties
supervising and coordinating the smooth transition of Nature's Way accounts
into Puro and opening, directing and managing a direct store-door small
package business. As compensation for the hours devoted to these duties, you
will be paid the sum of fifteen hundred ($1,500) per week, which includes
salary, special benefits and expenses, less appropriate deductions required
by law. You guarantee to preform these services up to and including December
31, 1996. However either party, either yourself or the Company may cancel
this agreement upon ninty days written notice to the other party.
This agreement shall not be assignable by either party, nor may it be
changed orally.
Very truly yours,
by /s/ Xxxx Xxxx Pres.
-----------------------------
Puro Corporation of America
Dated: January 30, 1995
Agreed and Accepted by
/s/ Xxxxxxx Xxxxxx
----------------------
Xxxxxxx Xxxxxx
