ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into on this 19th day of
February, 1997, by and between VERMONT PURE SPRINGS, INC. (VPS) a Delaware
corporation with its principal place of business in Randolph, Vermont ("BUYER")
and GREATWATER REFRESHMENT SERVICES, INC. (GRS), a Delaware corporation with its
principal place of business in 0000 Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx
00000 ("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, GRS is a company, engaged in the sale and distribution of
bottled water and coffee, and the rental of cooler/dispenser equipment for home
and office customers with its principal place of business in Syracuse, NY, and
WHEREAS, both Parties desire to enter into agreements by which VPS
shall (i) purchase the business of GRS related to bottled water, certain coffee
accounts, and the rental of cooler/dispenser equipment for home and office
customers.
NOW THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
I. ASSETS
A. 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, wherever located, tangible
and intangible, consisting of the following assets: vehicles, purchase orders,
telephone numbers, customer lists, and goodwill. (The assets being purchased and
sold hereunder are sometimes referred collectively as "Assets" and are
identified in Exhibit "A"). Assets of Seller not on the list are being retained
by Seller.
B. Liabilities. Buyer agrees to assume only those certain
operating labilities as set forth in Schedule "B".
C. 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 purchase money financing liens as described in Paragraph II. The form of
the Xxxx of Sale shall be approved by Buyer's counsel prior to the closing Date
(as hereinafter defined).
II. PURCHASE PRICE
Purchase Price $580,000, provided that:
(i) $15,000 cash deposit at the signing of this Asset Purchase
Agreement, which deposit is refundable in the event that (a) this transaction
does not close on or before March 10, 1997 or (b) due diligence reveals a
material adverse variation in the projections, profit and loss, and cash flow,
(material" is defined to mean an adverse variation of at least 5% in the 1996
EBITDA and Cash Flow) or if the conditions precedent hereinafter defined are not
met prior to settlement; provided however, if the transaction does not close
because Buyer does not obtain financing, after using best efforts to obtain
financing, Buyer shall forfeit its $15,000 deposit. If the deposit is forfeited
to the SELLER pursuant to the terms of this paragraph II(i) herein, then the
remedies of the SELLER are limited to the forfeited monies and SELLER is
entitled to no further payments hereunder or for the failure to close the
transaction contemplated herein.
(ii) $305,000 of the Purchase Price to be paid in cash at
closing.
(iii) the assumption of liabilities in the amount of
$85,000 set forth in Exhibit "B";
(iv) the issuance of a Note by Buyer to Seller in the amount
of $75,000 and restricted stock in the amount of $100,000. If the gross revenues
of the Greatwater Refreshment Company Division of Buyer (to be defined as the
business acquired by this Asset Purchase Agreement) for the time period March
10, 1997 through March 9, 1998 do not equal $700,000, then the Note for the
restricted stock will be reduced or increased proportionately in an amount equal
to the minus/plus difference between the gross revenues of the Greatwater
Refreshment Company Division of Buyer for the time period March 10, 1997 through
March 9, 1998 and $700,000. The restricted securities shall be held in escrow by
Seller's attorney to facilitate the possible downward adjustment in the number
of shares. The Note shall be payable one year after Closing, subject to the
aforementioned adjustment and shall be in a form mutually agreeable by the
parties hereto and shall be secured by UCC filings and a security agreement on
the assets listed on attached Exhibit "C".
III. EXCLUDED SECURITIES AND LIABILITIES
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.
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IV. CONDUCT OF BUSINESS AND CONDITION OF PREMISES
PENDING SETTLEMENT
Prior to the Settlement:
A. 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.
B. Seller will continue to operate the business in the manner
heretofore operated by Seller. Until Settlement 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.
C. Seller will keep all of the assets and the Premises fully
insured against any loss, either by fire, other casualty or theft.
D. GRS will use their best efforts to preserve GRS's organization. to
keep available the services of employees, and to preserve friendly relations
with its customers and trade creditor. Company shall make no representation or
promises with employees about future employment but Buyer will consider existing
employees for resumption of duties as appropriate.
E. In the event that prior to the date of Closing, the Assets shall be
totally or substantially 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.
V. SETTLEMENT
A. ("Settlement") shall take place on or before March 10,
1997 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.
B. Settlement shall be held in Syracuse, NY or such other
local place as Seller and Buyer shall agree.
C. Time shall be of the essence of this Agreement.
D. Any closing adjustments shall be apportioned pro rata as
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of the date of Settlement.
VI. BULK SALES ACT.
A. Buyer and Seller waive compliance 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 . Mr. Xxxxx Xxxxxx will sign and deliver,
at c losing, an indemnification agreement in accordance with this
Paragraph.
VII. SELLER'S WARRANTIES.
A. The Seller represents and warrants to Buyer that as of
the date of this Agreement and as of the date of the Settlement,
that:
(i) 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 its business as is now being conducted.
(ii) 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 Settlement will not be subject to
any mortgages, pledges, liens, encumbrances, security interest, or charges,
except as described in Paragraph II (iv).
B. The Seller represents that to the best of the Seller's
knowledge, information and belief:
(i) The Seller is in compliance with all applicable laws,
ordinances, rules, regulations, and requirements of all governmental authorities
having jurisdiction thereof, 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.
(ii) There are no actions, suits, or proceedings pending or
threatened against Sellers, either at law or in equity, brought by any federal,
state, or municipal or other governmental agency, department, board, bureau, or
other instrumentality.
(iii) 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
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Settlement from funds set aside at Settlement.
(iv) All financial 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.
(v) 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.
C. If Seller obtains any knowledge or information between the date
hereof and Settlement, 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 VII hereof are not true
and cannot be made true by the Seller by the time of Settlement, or will no
longer be true as of the date of Settlement, Seller will promptly notify Buyer
of such change in circumstances.
VIII. CONDITIONS PRECEDENT
All obligations of the Buyer under this Agreement are subject to fulfillment,
prior to or at Settlement, of each of the following conditions:
A. 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 Asset
Purchase Agreement.
B. Representation and Warranties. The representations and
warranties of Seller contained in this Agreement being true at the
time of Settlement as though such representations and warranties
were made at such time.
C. 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.
D. 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:
(i) Seller has been duly incorporated and is existing as
a corporation in good standing under the laws of the State of
Delaware.
(ii) This transaction and its terms do not violate any
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provisions of Seller's Articles of Incorporation or Bylaws;
(iii) Seller has taken all shareholder, director and
other actions necessary to authorize the transactions contemplated
by the parties hereto;
(iv) Seller has the authority to carry on the business
presently being conducted by Company;
(v) Seller has full power and authority to sell, assign
and transfer the Assets sold pursuant to this Agreement.
E. 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.
F. Financing. Buyer obtains financing for the purchase
of assets herein described on terms acceptable to the Buyer.
G. Seller's Shareholder Approval. Seller shall have
obtained the necessary Shareholder approval for this transaction.
H. Non-Compete Agreement. Buyer and Xxxxx Xxxxxx shal
execute and deliver at Closing the Non-Compete Agreement attached
as Exhibit "D".
IX. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
A. 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 IX, the term confidential
information shall include, but not be limited to, confidential or proprietary
knowledge or information with respect to the conduct or details of the Seller's
business 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 public domain.
B. All confidential information described in Section IX (A) shall be
the exclusive property of the Buyer, and Seller shall use its best efforts to
prevent any publication or disclosure thereof.
C. The provisions of this Section IX shall survive the
closing and shall continue for a period of two years.
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X.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 two
(2) years after the closing of this Agreement, Seller, including its officers
and directors will not, within the United States of America, directly or
indirectly compete with the Buyer in the home/office distribution of distilled
water, spring or carbonated water, or coffee/tea products 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 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 X shall survive the termination, for
any reason, of this Agreement and shall continue for the two year period
contemplated by this Section X.
XI. GOVERNING LAW
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of New York.
XII. 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.
XIII. 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.
XIV. 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.
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XV. 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.
XVI. 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 X. 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:
Great Water Refreshment Services, Inc.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Att: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With Copy to:
Xxxxxx X. Xxxxxxx, Esquire
Green & Seifter
Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
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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:__________________________
GREATWATER REFRESHMENT
SERVICES, INC.
WITNESS:
_______________________ By:___________________________
Name:_________________________
Title:________________________
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Exhibit A
See Attached
Exhibit B
A. Assumption of existing debt to customers for bottle
and cooler deposits in the amount of $85,000.
Exhibit C
1. 1990 Ford Truck VIN #FDXR82AXLVA14418
2. 1993 Ford Van VIN #0XXXX00X0XXX00000
3. 1993 Ford Van VIN #0XXXX00X0XXX00000
4. 1994 International VIN #0XXXXXXX0XX000000
5. 1990 Isuzu VIN #JALC5B1U6L300I523
Exhibit D
Non-Compete Agreement
