Exhibit 2(A)
ASSET PURCHASE AGREEMENT
by and between
SENECA FOODS CORPORATION
and
THE PILLSBURY COMPANY
April 11, 1997
iii
TABLE OF CONTENTS
Page
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ARTICLE I TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES................................................. 1
1.01 Transfer of Assets............................................................................ 1
1.02 Excluded Assets............................................................................... 4
1.03 Assumption of Liabilities..................................................................... 5
1.04 Excluded Liabilities.......................................................................... 5
1.05 Assumption of Contractual Rights and Obligations Related Thereto.............................. 5
ARTICLE II PURCHASE PRICE................................................................................ 6
2.01 Amount........................................................................................ 6
2.02 Manner of Payment............................................................................. 7
2.03 Closing Date Valuation........................................................................ 8
2.04 Transfer Taxes and Other Closing Costs........................................................ 9
2.05 Allocation of Purchase Price.................................................................. 9
ARTICLE III CLOSING....................................................................................... 9
3.01 Closing....................................................................................... 9
3.02 General Procedure............................................................................. 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER............................................................ 10
4.01 Incorporation and Corporate Power............................................................. 10
4.02 Subsidiaries.................................................................................. 10
4.03 Execution, Delivery; Valid and Binding Agreement.............................................. 11
4.04 No Breach..................................................................................... 11
4.05 Governmental Authorities; Consents............................................................ 11
4.06 Title to Properties........................................................................... 11
4.07 Inventory..................................................................................... 13
4.08 Contracts and Commitments..................................................................... 13
4.09 Litigation.................................................................................... 14
4.10 Employees..................................................................................... 14
4.11 Insurance..................................................................................... 15
4.12 Compliance with Laws; Permits................................................................. 15
4.13 Environmental Matters......................................................................... 16
4.14 Brokerage..................................................................................... 17
4.15 Taxes......................................................................................... 17
4.16 Accounts Receivable........................................................................... 17
4.17 Beet Color Business Capital Expenditures...................................................... 17
4.18 Intellectual Property Rights.................................................................. 18
4.19 No Change in Assets........................................................................... 18
4.20 No Other Representations or Warranties........................................................ 18
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................. 18
5.01 Incorporation and Corporate Power............................................................. 18
5.02 Execution, Delivery; Valid and Binding Agreement.............................................. 18
5.03 No Breach..................................................................................... 19
5.04 Governmental Authorities; Consents............................................................ 19
5.05 Brokerage..................................................................................... 19
ARTICLE VI COVENANTS OF SELLER................................................................................. 19
6.01 Conduct of the Business....................................................................... 19
6.02 Environmental Matters......................................................................... 20
6.03 Access to Books and Records................................................................... 21
6.04 Regulatory Filings............................................................................ 22
6.05 Conditions.................................................................................... 22
6.06 Purchase of Trademarks from Selviac........................................................... 22
ARTICLE VII COVENANTS OF BUYER................................................................................. 22
7.01 Regulatory Filings............................................................................ 22
7.02 Conditions.................................................................................... 22
ARTICLE VIII CONDITIONS TO CLOSING............................................................................. 22
8.01 Conditions to Buyer's Obligations............................................................. 22
8.02 Conditions to Seller's Obligations............................................................ 25
ARTICLE IX TERMINATION......................................................................................... 27
9.01 Termination................................................................................... 27
9.02 Effect of Termination......................................................................... 27
ARTICLE X ADDITIONAL AGREEMENTS................................................................................ 27
10.01 Employee Matters.............................................................................. 27
10.02 Terminated Employees; Severance............................................................... 31
10.03 Assumption of Multi-Employer Pension Plan..................................................... 31
10.04 Non-Solicitation of Employees................................................................. 33
10.05 Licenses...................................................................................... 33
10.06 Supply of Excluded Products................................................................... 34
10.07 Collection of Accounts Receivable............................................................. 34
10.08 Bulk Sales Laws............................................................................... 34
10.09 Customer Claims............................................................................... 34
10.10 ▇▇▇▇▇▇▇ Facility................................................................................ 35
ARTICLE XI SURVIVAL; INDEMNIFICATION........................................................................... 36
11.01 Survival of Representations and Warranties.................................................... 36
11.02 Indemnification by Seller..................................................................... 36
11.03 Indemnification by Buyer...................................................................... 37
11.04 Method of Asserting Claims.................................................................... 37
11.05 Cost-Sharing for Certain Conditions........................................................... 39
ARTICLE XII MISCELLANEOUS...................................................................................... 40
12.01 Press Releases and Announcements.............................................................. 40
12.02 Expenses...................................................................................... 40
12.03 Further Assurances............................................................................ 40
12.04 Amendment and Waiver.......................................................................... 40
12.05 Notices....................................................................................... 41
12.06 Assignment.................................................................................... 41
12.07 Severability.................................................................................. 41
12.08 Complete Agreement............................................................................ 41
12.09 Certain Definitions........................................................................... 41
12.10 Counterparts.................................................................................. 42
12.11 Governing Law................................................................................. 42
EXHIBITS:
Exhibit A Allocation of Purchase Price
Exhibit B ▇▇▇▇ of Sale
Exhibit C Assignment and Assumption Agreement
Exhibit D1 Trademark License Agreement [Inventory]
Exhibit D2 Trademark License Agreement [Foodservice]
Exhibit D3 Trademark License Agreement [Fruit]
SCHEDULES:
Schedule 1.01(a) Plants
Schedule 1.01(b) ▇▇▇▇▇▇▇ Facility
Schedule 1.01(c) Real Property
Schedule 1.01(d) Equipment, Machinery, Furniture, Fixtures and Furnishings
Schedule 1.01(e) Real Property Leases
Schedule 1.01(f) Personal Property Leases
Schedule 1.01(g) Inventory Schedule
Schedule 1.01(i) Assumed Contracts
Schedule 1.01(j) Prepaid Expenses
Schedule 1.01(k) Trademarks and Brand Names
Schedule 1.01(l) Patents and Trade Secrets
Schedule 1.02(h) Nonassignable Authorizations
Schedule 1.02(i) Nonassignable Leases and Contracts
Schedule 5.03 Buyer Consents
Schedule 6.02(b) Wastewater Project
Schedule 6.02(d) Underground Tank Sites
Schedule 10.06 Excluded Products
Schedule 12.09 "Knowledge" of Seller
Disclosure Schedule
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
April 11, 1997, is made and entered into by and between The Pillsbury Company, a
Delaware corporation ("Seller"), and Seneca Foods Corporation, a New York
corporation ("Buyer").
WHEREAS, Seller is engaged, among other things, in the
business of acquiring, processing, manufacturing, packaging, marketing and
selling certain categories of shelf-stable fruit and vegetable products (the
"Products") under the "Aunt Nellie's" and various other brand names listed on
Schedule 1.01(k) hereto (such business, including the "Beet Color Business"
defined in Section 1.01(i) below, but excluding the business of growing,
processing, manufacturing, and packaging for Seller the "Excluded Products" (as
defined in Section 10.06), referred to as the "Business");
WHEREAS, Selviac International ▇▇▇▇▇▇▇▇ ▇▇. ▇, ▇.▇., ▇
▇▇▇▇▇▇▇▇▇▇▇ company formerly known as Driehoek B.V. and an affiliate of Seller
("Selviac") is the owner of those "Aunt Nellie's" trademarks listed on Schedule
1.01(k) as being owned by "DBV", which trademarks Seller will (i) purchase from
Selviac prior to the closing of the transactions contemplated herein, and (ii)
sell to Buyer hereunder; and
WHEREAS, Seller owns a facility in ▇▇▇▇▇▇▇, Minnesota, more
fully described in Section 1.01(b) below (the "LeSueur Facility") which is
currently leased to Buyer; and
WHEREAS, Seller desires to sell and assign to Buyer, and Buyer
desires to purchase and assume from Seller, on the terms and subject to the
conditions set forth in this Agreement, substantially all of the assets and
liabilities of Seller that are primarily used in conjunction with or related to
the Business.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements and the conditions set forth in this
Agreement, Buyer and Seller hereby agree as follows:
I ARTICLE I
TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES
1.01.....Transfer of Assets. On the terms
and subject to the conditions set forth in this Agreement, Seller shall, at the
"Closing" (as defined in Section 3.01 hereof), sell, transfer and assign to
Buyer, and Buyer shall purchase and acquire from Seller, all of Seller's right,
title and interest, as of the "Closing Date" (as defined in Section 3.01
hereof), in and to the following assets of Seller, all of which are primarily
related to or used in conjunction with the Business or the ▇▇▇▇▇▇▇ Facility
(collectively, the "Assets"):
(a) The offices and manufacturing plants, and the air strip,
spray fields, and other wastewater capacity rights related thereto,
identified in Schedule 1.01(a) hereto (collectively, the "Plants"), and
the migrant farm worker housing located at ▇▇▇▇▇▇, Wisconsin and
Clyman, Wisconsin owned by Seller and the agricultural shops located
adjacent to the Clyman, Wisconsin Plant known as the "Stock farm" which
is used in connection with the operation of the Plants (collectively,
the "Housing and Farm Shops");
(b) The warehouse, knife center, barracks, seed operation and
all related operations at Seller's facility at ▇▇▇▇▇▇▇, Minnesota, as
more fully described in Schedule 1.01(b) hereto (the "LeSueur
Facility");
(c) Fee title to the real property owned by Seller on which
the Plants, the Housing and Farm Shops, and the ▇▇▇▇▇▇▇ Facility are
located and all buildings (including the Plants and buildings on the
▇▇▇▇▇▇▇ Facility) and other improvements and all easements and
appurtenances relating thereto (excluding rights retained by Seller
with respect to the ▇▇▇▇▇▇▇ Facility as described in Schedule 1.01(b)),
as more fully described in Schedule 1.01(c) hereto;
(d) All of the equipment, machinery, furniture, fixtures,
furnishings, trucks, tractors and other motor vehicles, hardware,
tools, spare and replacement parts and all other items of tangible
personal property that are owned by Seller, located at any of the
Plants, the Housing and Farm Shops, or the ▇▇▇▇▇▇▇ Facility, and used
primarily in the Business or the operations of the ▇▇▇▇▇▇▇ Facility
(the "▇▇▇▇▇▇▇ Facility Operations"), of which such assets material to
the operation of the Plants, the Housing and Farm Shops, or the ▇▇▇▇▇▇▇
Facility are identified in Schedule 1.01(d) hereto;
(e) Seller's interest as lessee, to the extent assignable, in
all real property leases with respect to (i) real property on which any
of the Plants, the Housing and Farm Shops, or the ▇▇▇▇▇▇▇ Facility is
located and all leasehold improvements thereon, and (ii) with respect
to farmland upon which Seller has the right to grow crops to be
processed at any of the Plants after the Closing Date or to conduct any
activities related to the ▇▇▇▇▇▇▇ Facility Operations, of which the
leases material to the operation of the Plants are identified in
Schedule 1.01(e) hereto;
(f) Seller's interest, to the extent assignable, in all
personal property leases to which Seller is a party with respect to
personal property which is located at any of the Plants or the ▇▇▇▇▇▇▇
Facility and used primarily in the Business or the ▇▇▇▇▇▇▇ Facility
Operations (provided that motor vehicles leased under Seller's master
leasing program used primarily in the Business or the ▇▇▇▇▇▇▇ Facility
Operations shall be transferred to a separate lease to be entered into
between such lessor and Buyer), of which the leases material to the
operation of the Business or the ▇▇▇▇▇▇▇ Facility Operations are
identified in Schedule 1.01(f) hereto;
(g) All of Seller's inventories of (i) finished goods and
work-in-process, but specifically excluding any of Seller's finished
goods inventories of Excluded Products, (ii) supplies (including jars,
lids, cans and other containers, packaging materials, labels and
ingredients used primarily in the Business) and raw materials
(including vegetable seed located at the Plants or the Housing and Farm
Shops), but specifically excluding any supplies, raw materials and
vegetable seed primarily used in or related to the Excluded Products,
(iii) Seller's interest, to the extent assignable, in all orders or
contracts for the purchase of such supplies and raw materials and (iv)
fuels, cleaning supplies and other miscellaneous items primarily used
in the maintenance or operation of the Business or the ▇▇▇▇▇▇▇ Facility
Operations ("Non-Product Supplies") (collectively, the "Inventory
Assets"), the estimated (as of the date hereof) aggregate dollar
amounts of which are described in Schedule 1.01(g) hereto (the
"Inventory Schedule");
(h) All accounts or notes receivable owing to Seller that
relate to sales by the Business (excluding receivables owed by Seller
or its affiliates, receivables over 90 days old and other receivables
which Buyer reasonably believes to be doubtful) (the "Accounts
Receivable");
(i) The contracts and agreements of Seller that are identified
or described in Schedule 1.01(i) hereto, to the extent such contracts
and agreements are assignable, including but not limited to the Supply
Agreement dated September 1, 1996 between Seller and Kraft Foods, Inc.
(the "Kraft Agreement") pursuant to which Seller will process beet
juice concentrate containing betanin for use as food coloring (the
"Beet Color Business") and, subject to Section 8.01(i), the collective
bargaining agreements covering Business Employees (as defined in
Section 10.01);
(j) All prepaid expenses recorded by Seller in accordance with
Seller's established accounting policies, including prepaid Plant
expenses, as well as deposits made by Seller, with respect to the
Assets of the type described in Schedule 1.01(j) hereto (the "Prepaid
Expenses");
(k) The trademarks, trade names, brand names and logos listed
on Schedule 1.01(k) hereof, and any rights associated with such names
and logos and all rights to use any of such names or logos in all
jurisdictions in which Seller either currently uses any of such names
or logos or has any right to use any of such names or logos;
(l) All rights of Seller in and to the patents, patent
applications, copyrights, trade secrets or other intellectual property
rights described in Schedule 1.01(l) hereto, and all documents or other
tangible materials embodying such intellectual property rights;
(m) All of Seller's books, records and other documents and
information relating to the Business, including, without limitation,
all customer, prospect, dealer and distributor lists, sales literature,
inventory records, purchase orders and invoices, sales orders and sales
order log books, customer information, commission records,
correspondence, employee personnel records, product data, price lists,
product demonstrations, quotes and bids and all product catalogs and
brochures (but excluding books, records and other documents and
information related primarily to Liabilities (as defined in Section
1.04) of Seller which are not within the Assumed Liabilities);
(n) The right to use the telephone numbers currently being
used at the offices or facilities located at the Plants or the ▇▇▇▇▇▇▇
Facility (but specifically excluding the right to use any "800" numbers
relating to Seller customer service or emergency response matters);
(o) All permits, licenses and other governmental approvals
held by Seller related exclusively to the Assets or Business or the
▇▇▇▇▇▇▇ Facility, to the extent they are assignable;
(p) Copies or originals of all of Seller's books and
records relating to its ownership, operation or maintenance of the
Assets or Business; and
(q) Goodwill (including all goodwill associated with and
symbolized by the trademarks, brand names and logos identified in
subsection (k) above as used as a trademark or service ▇▇▇▇, logo or
corporate name used in the conduct of the Business as now conducted)
and all related intangibles which Seller uses exclusively in the
conduct of the Business.
1.02.....Excluded Assets Excluded Assets. Notwithstanding the
terms of Section 1.01, the following assets shall be retained by
Seller and shall not be sold, transferred or assigned to Buyer in
connection with the purchase of the Assets:
(a) All corporate certificates of authority and corporate
minute books and the corporate stock record or register of Seller, and
all bank accounts of Seller;
(b) Except for the trademarks, brand names and corporate names
listed on Schedule 1.01(k) hereof and except as provided in Section
10.05 hereof, all of Seller's trademarks, service marks, trade names,
brand names, corporate names and logos, or any rights associated with
such names and logos and all rights to use any of such names or logos
in all jurisdictions in which Seller either currently uses any of such
names or logos or has any right to use any of such names or logos;
(c) All cash and cash equivalents of Seller;
(d) Except as provided in Section 1.01(l) hereof, all rights
in patents, patent applications, copyrights, trade secrets or other
intellectual property rights owned by, licensed to or otherwise
controlled by Seller, and all documents or other tangible materials
embodying such technology or intellectual property;
(e) Any rights to recovery by Seller arising out of litigation
with respect to the Business or the ▇▇▇▇▇▇▇ Facility that relates to
activities occurring prior to the Closing Date, or arising out of
Liabilities not within the Assumed Liabilities (including but not
limited to petro fund reimbursement for environmental remediation to be
conducted by Seller pursuant to Section 6.02);
(f) All insurance policies of Seller obtained in connection
with the Business or the ▇▇▇▇▇▇▇ Facility and all rights of Seller
(including rights to receive dividends) under or arising out of such
insurance policies;
(g) Rights to receive refunds with respect to any and all
taxes paid by Seller in connection with the Business or the ▇▇▇▇▇▇▇
Facility, including interest payable with respect thereto, for Business
activity conducted prior to the Closing Date;
(h) Such licenses, permits, governmental approvals or other
certificates of authority relating to the Assets which, by their terms,
are nonassignable, and which, to Seller's knowledge, are described on
Schedule 1.02(h) hereto; and
(i) Seller's interests in any real property leases, personal
property leases, orders, contracts or agreements which, by the terms
thereof, are not assignable, and which, to Seller's knowledge, are
described on Schedule 1.02(i) hereto.
1.03.....Assumption of Liabilities.
As of the Closing Date, Buyer shall assume and agree to pay, perform or
otherwise satisfy in accordance with their terms all of the following (the
"Assumed Liabilities"): (i) Seller's obligations to be performed or satisfied on
or after the Closing Date under the leases, agreements, contracts, arrangements
and licenses assigned to Buyer pursuant to Section 1.01 hereof, except to the
extent that any such obligations constitute payments in arrears for benefits
received in full by Seller prior to the Closing Date and except as set forth in
Section 1.05 below, and (ii) Seller's accounts payable and accrual balances
related to the Business as of the Closing except for liability for coupons,
rebates and similar types of payments related to the sale of goods by the
Business prior to Closing.
1.04.....Excluded Liabilities. Other
than as set forth above in Section 1.03, Seller shall retain, and Buyer shall
not assume, any liabilities, obligations or undertakings of Seller of any nature
whatsoever, whether accrued, absolute, fixed or contingent, known or unknown due
or to become due, unliquidated or otherwise (collectively, "Liabilities").
Seller shall be responsible for all of the Liabilities of Seller not assumed by
Buyer pursuant to Section 1.03 hereof.
1.05.....Assumption of Contractual Rights and Obligations
Related ▇▇▇▇▇▇▇.▇▇ the extent that the assignment hereunder of any of the leases
agreements, contracts, arrangements and licenses assigned to Buyer pursuant to
Section 1.01 shall require the consent of any other party (or in the event that
any of the same shall be nonassignable) (a "Nonassignable Agreement"), neither
this Agreement nor any action taken pursuant to its provisions shall constitute
an assignment or an agreement to assign if such assignment or attempted
assignment would constitute a breach thereof or result in the loss or diminution
thereof; provided, however, that in each such case, Buyer and Seller shall use
commercially reasonable efforts to obtain the consent of such other party to an
assignment to Buyer and upon receipt of such consent, such Nonassignable
Agreement shall be included as an Assumed Liability under Section 1.03. Until
such consent is obtained, Seller shall cooperate with Buyer in any reasonable
arrangement designed to provide Buyer with the benefits under such Nonassignable
Agreement, including appointing Buyer to act as its agent to perform all of
Seller's obligations under such Nonassignable Agreement, and collecting and
promptly remitting to Buyer all compensation payable pursuant thereto and
enforcing, for the account and benefit of Buyer, any and all rights of Seller
against any other person arising out of the breach or cancellation thereof by
such other person or otherwise (any and all of which arrangements shall
constitute, as between the parties hereto, a deemed assignment or transfer);
provided that to the extent that Buyer requires Seller to undertake any services
or take any action in furtherance of the performance of such Nonassignable
Agreement, any such services or actions shall be the subject of a separate
agreement that the parties shall, in good faith, negotiate as promptly as
possible and that shall be mutually acceptable to the parties. The "Purchase
Price" (as defined in Section 2.01 hereof) shall not be reduced by reason of the
inability to transfer (by assignment, subcontract or otherwise) to Buyer any
such Nonassignable Agreement on or after the Closing Date. Each party shall be
responsible for all of its internal costs and expenses incurred by it in
connection with the actions required by it under this Section 1.05; Seller shall
not be obligated to incur any out-of-pocket expenses in connection therewith
unless Buyer agrees to reimburse Seller for such expenses; and Buyer shall not
be required to incur any out-of-pocket expenses to secure the consent of any
other party to any assignment hereunder. Buyer shall bear the risk, from and
after the Closing Date, of breach or nonperformance of, and shall indemnify,
defend and hold harmless Seller in full from and after the Closing Date with
respect to, any loss, damage, liability or expense (including, without
limitation, any reasonable attorney's fees and expenses) that Seller may suffer
as a result of any failure to perform any such Nonassignable Agreement after the
Closing Date unless such failure to perform is caused in whole or part, or to
the extent Buyer's performance is made more costly, by the conduct of any other
party to the Nonassignable Agreement predicated in whole or in part on the other
party's position that it has no legal obligation to accept performance by Buyer
with respect to the Nonassignable Contract; provided that, Buyer shall not be
required to indemnify, defend or hold harmless Seller from any claim that the
actions of the parties hereunder violated any prohibition against the transfer
of any Nonassignable Agreement or violated any right of a third party to prevent
any such transfer by withholding its consent.
II ARTICLE II
PURCHASE PRICE
2.01.....Amount. The consideration given by Buyer for
the Assets shall consist of Buyer's assumption of the Assumed Liabilities plus
payment of an amount in cash (the "Purchase Price") equal to the sum of the
following:
(a) the sum of the following amounts (referred to as the
"Net Working Capital") as of the Closing:
(i) the book value, determined in accordance with the
Inventory Schedule, of the Inventory Assets minus $2,800,000;
plus
(ii) the net book value of all other working capital
of the Business, including the Accounts Receivable (without
deduction for any allowances for doubtful accounts) and the
Prepaid Expenses; minus
(iii) the net book value of those accounts payable
and accrual balances of the Business (other than those
accounts payable and accrual balances for capital expenditures
related to the Kraft Agreement and other than allowances for
doubtful accounts or any accruals or allowances already
deducted in calculating the net book value of the working
capital pursuant to (ii) above); and
(b) all capital expenditures made by Seller in connection with
the Beet Color Business (the "Beet Color Business Capital
Expenditures") prior to the Closing (it being understood that Buyer
shall be responsible for making after the Closing such capital
expenditures to which Seller has committed under the Kraft Agreement,
and that the total expenditures by Buyer under this subparagraph, both
at and after Closing in accordance with Seller's existing
specifications for such project, shall not exceed $950,000); and
(c) $750,000.
2.02 Manner of Payment Manner of Payment. The Purchase
Price shall be paid as follows:
(a) On the Closing Date, Buyer shall deliver to Seller, by
wire transfer (in accordance with appropriate wire transfer
instructions previously delivered by Seller to Buyer), an amount equal
to the sum of:
(i) the estimated Net Working Capital as of a date
five business days prior to the Closing, based on the February
28, 1997 on-site count of the Inventory Assets conducted by
representatives of Buyer, Seller and the accounting firm of
KPMG ("Auditor") as adjusted to reflect purchases and sales
since such date;
(ii) all Beet Color Business Capital Expenditures
made by Seller up to and including the date five business days
prior to the Closing; and
(iii) $750,000.
(b) Within five business days after the Final Valuation
Sheet becomes final and binding:
(i) if the amount reflected on the Final Valuation
Sheet plus $750,000 exceeds the amount paid by Buyer pursuant
to Section (a) above, then Buyer shall pay to Seller by wire
transfer (in accordance with appropriate wire transfer
instructions previously delivered by Seller to Buyer) the
amount of such excess, or
(ii) if the amount paid by Buyer pursuant to Section
(a) above exceeds the amount reflected on the Final Valuation
Sheet plus $750,000, then Seller shall pay to Buyer by wire
transfer (in accordance with appropriate wire transfer
instructions previously delivered by Buyer to Seller) the
amount of such excess.
2.03 Closing Date Valuation.
The Purchase Price shall be finally determined in accordance with this
Section 2.03.
(a) Representatives of Buyer, Seller and Auditor have
conducted an on-site count of the Inventory Assets as of February 28,
1997 (the "Pre-Closing Count"). Within 60 days following the Closing
Date, Seller shall cause to be delivered to Buyer an unaudited, partial
balance sheet of the Business reflecting only the value of the Net
Working Capital as of the Closing and all Beet Color Business Capital
Expenditures made prior to the Closing (the "Unaudited Valuation
Sheet") which Unaudited Valuation Sheet shall reflect the quantity of
the Inventory Assets in the Pre-Closing Count, as adjusted to reflect
changes since the date thereof. Seller shall make the persons in charge
of the preparation of the Unaudited Valuation Sheet available for
reasonable inquiry by Buyer. If Buyer fails timely to notify Seller of
its disagreement with any values set forth in the Unaudited Valuation
Sheet in accordance with the first sentence of Section 2.03(b), the
Unaudited Valuation Sheet shall be final and binding on Buyer and
Seller, and shall be deemed the "Final Valuation Sheet," for purposes
of this Agreement.
(b) Buyer may notify Seller in writing within 20 business days
following receipt of the Unaudited Asset Valuation Sheet that it does
not agree with any values set forth thereon or that the Unaudited
Valuation Sheet assigns value to items which were not counted with
respect to the Pre-Closing Count, as adjusted to reflect changes since
the date thereof. Buyer and Seller will use good faith efforts during
the 20-day period following the date of such written notice to resolve
any differences they may have as to the Unaudited Valuation Sheet. Such
written notice will identify with specificity the calculations with
which Buyer disagrees. If Buyer and Seller cannot reach agreement
during that 20-day period, their disagreements shall be promptly
submitted to the Auditor, which shall conduct such additional review as
is necessary to resolve the specific disagreements referred to it.
Auditor shall be required to exclude all values assigned to items which
were not counted (unless the failure to count such items was clearly
erroneous) with respect to the Pre-Closing Count, as adjusted to
reflect changes since the date thereof. The review of Auditor will be
restricted as to scope to address only those specific disagreements
referred to it by Seller and Buyer. The final calculation of the Net
Working Capital and Beet Color Business Capital Expenditures as of the
Closing (the "Final Valuation Sheet") shall be determined by Auditor as
promptly as practicable following its selection, shall be confirmed by
Auditor in writing to, and shall be final and binding on, Buyer and
Seller for purposes of this Agreement.
(c) The fees of and expenses incurred by Auditor shall be
shared equally by Buyer and Seller.
(d) The Unaudited Valuation Sheet prepared in accordance with
this Section 2.03 shall be prepared in accordance with generally
accepted accounting principles used in the United States, as
consistently applied by Seller, and shall be prepared in a manner
consistent with Seller's past accounting policies and practices in
connection with the preparation of financial statements of the
Business, except that such statements do not and shall not include
footnotes as may be required by such accounting principles.
2.04 Transfer Taxes and Other Closing Costs.
Buyer shall pay any and all sales, use, transfer, deed
or excise taxes that shall become due and payable as a result of the sale of the
Assets as contemplated under Section 1.01, including any sales tax assessed by
governmental authorities after filing of the applicable sales tax return or
returns. Buyer shall pay the filing fee due under the HSR Act (as defined in
Section 4.05). Buyer shall file all sales or use tax returns and pay to the
appropriate taxing authority all such tax as is required by law to be paid in
connection herewith. In addition, Buyer shall pay any and all recording fees and
other closing costs involved with the transfer of the "Owned Parcels" (as
defined in Section 4.06(a) hereof) and the ▇▇▇▇▇▇▇ Facility, but excluding any
costs and expenses of Seller incurred in connection with the transactions
contemplated hereby. Seller shall be responsible for and pay all recording fees
and closing costs incurred in connection with removing liens and encumbrances
that are not Permitted Encumbrances.
2.05 Allocation of Purchase Price5 Allocation of Purchase
Price. Buyer and Seller agree to allocate the Purchase Price among the Assets as
set forth in the Form 8594 attached hereto as Exhibit A (subject to adjustment
for changes between the date hereof and Closing). Seller and Buyer shall file
all federal, state, local and foreign returns and tax information on a basis
that is consistent with such allocations and shall execute such other
documentation as may be reasonably necessary with respect to such allocations.
ARTICLE III
CLOSING
3.01 Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") will take place at the offices of
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A., 1100 International Centre, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ at 10:00 a.m., Minneapolis time, on or before the fifth
business day following the day on which all conditions to the parties'
obligations set forth in Article VIII hereof have been satisfied or waived by
the party entitled to the benefit of such condition, or at such other place and
on such other date as is mutually agreeable to Buyer and Seller. The date on
which the Closing occurs is referred to herein as the "Closing Date," and the
Closing shall be deemed effective as of 12:01 a.m., Minneapolis time, on the
Closing Date. The parties intend to close the purchase and sale of the ANFK
Business and assets as soon as practicable after the conditions set forth in
Section 8.01 have been satisfied with respect to the ANFK Business and assets,
regardless of whether all of the conditions set forth in Section 8.01 have been
satisfied with respect to the ▇▇▇▇▇▇▇ Facility. If it becomes apparent that the
inclusion of the ▇▇▇▇▇▇▇ Facility in the Assets being purchased will delay the
Closing of the purchase and sale of the ANFK Business and assets, then the
parties will arrange for a mutually-agreed upon subsequent Closing for the
purchase and sale of the ▇▇▇▇▇▇▇ Facility.
3.02 General Procedure. At the Closing,
each party shall deliver to the party entitled to receipt thereof the documents
required to be delivered pursuant to Article VIII hereof and such other
documents, instruments and materials (or complete and accurate copies thereof,
where appropriate) as may be reasonably required in order to effectuate the
intent and provisions of this Agreement, and all such documents, instruments and
materials shall be satisfactory in form and substance to counsel for the
receiving party. The conveyance, transfer, assignment and delivery of the Assets
to Buyer shall be effected by Seller's execution and delivery of a ▇▇▇▇ of sale,
substantially in the form attached hereto as Exhibit B (the "▇▇▇▇ of Sale"), the
assignment and assumption of the designated Liabilities of Seller to Buyer shall
be effected by the parties' execution and delivery of an assignment and
assumption agreement, substantially in the form attached hereto as Exhibit C
(the "Assignment and Assumption"), the deeds to the Owned Parcels referred to in
Section 8.01(j)(i) and such other instruments of conveyance, transfer,
assignment and delivery as Buyer or Seller shall reasonably request to cause
Seller to transfer, convey, assign and deliver the Assets and Assumed
Liabilities to Buyer.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that, except as
set forth in the Disclosure Schedule delivered by Seller to Buyer on the date
hereof (the "Disclosure Schedule") (which Disclosure Schedule sets forth the
exceptions to the representations and warranties contained in this Article IV
and which shall constitute disclosure of all items described for all purposes of
this Agreement):
4.01 Incorporation and Corporate Power.
Seller is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.
4.02 Subsidiaries. The Assets do not include any
stock, partnership interest, joint venture interest or any other security or
ownership interest issued by any other corporation, organization or entity.
4.03 Execution, Delivery; Valid and Binding Agreement.
The execution, delivery and
performance of this Agreement by Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the requisite
corporate action of Seller, and no other corporate proceedings on its part are
necessary to authorize the execution, delivery or performance of this Agreement.
This Agreement has been duly executed and delivered by Seller and, assuming that
this Agreement is the valid and binding agreement of Buyer, constitutes the
valid and binding obligation of Seller, enforceable in accordance with its
terms.
4.04 No Breach. The execution, delivery and
performance of this Agreement by Seller and the consummation of the transactions
contemplated hereby do not conflict with or result in any breach of any of the
provisions of, or constitute a default under, result in a violation of, result
in the creation of a right of termination or acceleration or any lien, security
interest or charge or require any authorization, consent, approval, exemption or
other action by or notice to any court or other governmental body, under the
provisions of the Certificate of Incorporation or Bylaws of Seller or any
indenture, mortgage, lease, loan agreement or other agreement or instrument by
which Seller or the Assets are bound or affected (other than consents required
under Section 8.01(c) hereof, which Seller undertakes to use commercially
reasonable efforts to obtain prior to the Closing Date), or any law, statute,
rule or regulation or order, judgment or decree to which Seller or the Assets
are subject; in each case, and in the aggregate, in which the breach, default,
violation, right of termination or acceleration or any other action or event
described herein would have a material adverse effect on the ability of Buyer to
operate the Business and the Assets (taken as a whole) immediately after the
Closing in substantially the same manner as they were operated by Seller
immediately prior to the Closing.
4.05 Consents Governmental Authorities
Except for the applicable requirements of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the "HSR Act") and except for certain
Wisconsin registration requirements with respect to the corporate ownership of
farmland, Seller is not required to submit any notice, report or other filing
with any governmental authority in connection with the execution or delivery by
it of this Agreement or the consummation of the transactions contemplated
hereby. No consent, approval or authorization of any governmental or regulatory
authority is required to be obtained by Seller in connection with its execution,
delivery and performance of this Agreement or the transactions contemplated
hereby.
4.06 Title to Properties.
(a) The real property owned by Seller constituting part of the
Assets (the "Owned Parcels") and the real property demised by the
leases described under the caption referencing this Section 4.06 in the
Disclosure Schedule (the "Leases") together constitute all of the real
property owned, used or occupied by Seller on which the Plants or any
Housing or Farm Shops are located (which property is referred to
collectively as the "Real Property"). To the extent that Seller has in
its possession any surveys with respect to the Real Property or the
▇▇▇▇▇▇▇ Facility, Seller shall provide copies thereof to Buyer. Seller
shall provide to Buyer updated title insurance commitments with respect
to all parcels of Real Property and the ▇▇▇▇▇▇▇ Facility, the cost of
which commitments shall be paid one-half by Seller and one-half by
Buyer. The Real Property has access, sufficient for the conduct of the
Business as now conducted, to public roads and to all utilities,
including electricity, sanitary and storm sewer, potable water, natural
gas and other utilities, used in the operation of the Business at such
location.
(b) The Leases are in full force and effect, and Seller holds
a valid and existing leasehold interest under each of the Leases for
the term set forth under such caption in the Disclosure Schedule.
Seller has delivered, or will deliver within 15 business days after the
date hereof, to Buyer complete and accurate copies of each of the
Leases in Seller's possession, and none of the Leases has been modified
in any material respect, except to the extent that such modifications
are disclosed by the copies delivered to Buyer. Seller has not received
written notice of any default of any material provision of any Lease,
and Seller has not delivered to any current party to any Lease a notice
of default with respect to that Lease which default has not been cured.
(c) Seller owns good and marketable title to the Assets,
including each of the Owned Parcels, free and clear of all liens and
encumbrances, except for (i) liens for current taxes not yet due and
payable, (ii) matters disclosed in the title insurance commitments or
the surveys delivered to Buyer or otherwise set forth under the caption
referencing this Section 4.06 in the Disclosure Schedule, (iii)
lessors' interests in the real property leased under the Leases (and
the personal property subject to leases constituting part of the
Assets), (iv) liens imposed by law and incurred in the ordinary course
of business for obligations not yet due to carriers, warehousemen,
laborers and materialmen, with respect to which Seller agrees to
indemnify and hold Buyer harmless and to take such action as may be
necessary to cause the liens to be removed or discharged except to the
extent the obligation secured by such lien is included in the
calculation of Net Working Capital as of the Closing, (v) liens in
respect of pledges or deposits under workers' compensation laws, with
respect to which Seller agrees to indemnify and hold Buyer harmless and
to take such action as may be necessary to cause the liens to be
removed or discharged except to the extent the obligation secured by
such lien is included in the calculation of Net Working Capital as of
the Closing, and (vi) easements and other encumbrances which do not
materially adversely affect the manner in which the Plants or the
Housing and Farm Shops or the ▇▇▇▇▇▇▇ Facility are operated on the date
hereof (clauses (i) through (vi) being referred to herein,
collectively, as the "Permitted Encumbrances").
(d) Seller has not received any written notice of any
violation of any applicable zoning ordinance or other law, regulation
or requirement (other than "Environmental Laws" as defined in Section
4.13) relating to the operation of any of the Plants or the Real
Property, and Seller has not received any notice of any such violation,
or the existence of any condemnation proceeding with respect to any of
the Real Property, and to Seller's knowledge, no such violations exist,
except, in each case, with respect to violations or proceedings the
known potential consequences of which do not or would not be reasonably
deemed to have a material adverse effect on the ability of Buyer to
operate the Plants at such locations immediately after the Closing in
substantially the same manner as they were operated by Seller
immediately prior to the Closing. No variances, special use permits or
similar permits or administrative approvals exist which would terminate
upon the transfer of the Real Property to the Buyer, the termination of
which would have a material adverse effect on the ability of Buyer to
operate the Plants.
(e) There are no liens for taxes upon any of the Assets,
except liens for taxes not yet due.
(f) Seller has not received any written notice of any material
improvements made or contemplated to be made by any public or private
authority, the costs of which are to be assessed as special taxes or
charges against any of the Real Property, and there are no present
assessments of a material amount with respect to the Real Property.
4.07 Inventory. Seller's inventory of finished
goods complies in all material respects with the U.S. Food, Drug and Cosmetic
Act and all applicable state and local laws and regulations with respect to the
wholesomeness and fitness for human consumption of food and the content and
accuracy of labels for the products to which the labels are intended.
4.08 Contracts and Commitments.
(a) The Disclosure Schedule, under the caption referencing
this Section 4.08, lists the following agreements to which Seller is a
party, which are currently in effect, and which relate to the operation
of the Plants or the other Assets: (i) any contract or group of related
contracts with the same party for the purchase of products (other than
vegetables) or services relating to the operations or maintenance of
the Plants or the other Assets under which the undelivered balance of
such products or services exceeds $100,000; (ii) any contract or
commitment, or group of related contracts or commitments, for capital
expenditures at any of the Plants or the ▇▇▇▇▇▇▇ Facility for an amount
in excess of $100,000; (iii) any contract or commitment, or group of
related contracts or commitments, with one or more growers of fruits or
vegetables to be processed at any of the Plants after the Closing Date;
(iv) any lease of farmland upon which Seller has the right to grow
crops to be processed at any of the Plants after the Closing Date; (v)
any collective bargaining agreement or contract with any labor union
covering Seller's employees at any of the Plants; (vi) any written
employment contracts with any of Seller's employees at any of the
Plants; (vii) any agreement or indenture relating to mortgaging,
pledging or otherwise placing a lien on any of the Assets; and (viii)
any other material lease or material agreement to which Seller is a
party and which relates to or affects the Plants or the other Assets.
(b) Seller has performed, in all material respects, all
obligations required to be performed by it in connection with the
contracts, agreements, indentures, leases or commitments disclosed in
the Disclosure Schedule under the caption referencing this Section 4.08
and is not in receipt of any written claim of material default under
any such contract or commitment.
(c) Prior to the date of this Agreement, Buyer has been
supplied with a true and correct copy of each contract, agreement,
indenture, lease or commitment referred to under the caption
referencing this Section 4.08 in the Disclosure Schedule, together with
all amendments thereto.
4.09 Litigation. Except as set forth in the
Disclosure Schedule under the caption referencing this Section 4.09 and except
for matters related to "Environmental Laws" as defined in Section 4.13, there
are no actions, suits, proceedings, orders or investigations pending or, to the
best knowledge of Seller, threatened against Seller with respect to the Assets,
at law or in equity, which, if determined adversely to Seller's interests, would
have a material adverse effect on (i) Seller's ability to transfer the Business
and Assets, taken as a whole, to Buyer, or (ii) Buyer's ability to operate the
Business and Assets, taken as a whole, immediately after the Closing in
substantially the same manner as they were operated by Seller immediately prior
to the Closing.
4.10 Employees. Except as set forth in the Disclosure
Schedule under the caption referencing this Section 4.10 and only with respect
to employees of Seller who perform functions in connection with the operation of
the Plants and the other Assets:
(a) Seller has complied in all material respects with all
federal, state and local laws, rules, guidelines and regulations
(collectively, and for purposes of this Section 4.10(a) only, "laws")
which regulate employment of employees and the terms and conditions of
employment, including without limitation, laws regulating or
prohibiting discrimination on account of age, sex, race, religion,
citizenship, national origin, marital or family status, military or
national guard service, arrest or conviction record, lawful use of
consumable products, status as a smoker, or handicap or disability;
civil rights and employment opportunity of employees and applicants for
employment; wages, hours and overtime compensation; occupational safety
and health; laws relating to immigration; and payment of social
security and other taxes related to employment. There are no pending
suits, claims, formal written charges or complaints, or other
proceedings alleging violation of the laws by Seller with respect to
employees at any of the Plants; and there are no material workers'
compensation claims pending against Seller with respect to employees at
any of the Plants which claims are not covered by insurance.
(b) Seller has complied in all material respects with all
federal and state laws, rules and regulations with respect to labor
relations, union organizing activities and collective bargaining rights
of employees. There are no pending claims against Seller alleging
violations of any federal or state laws respecting labor relations and
collective bargaining.
(c) Seller has no written contracts of employment with any
employee working at any of the Plants. Seller has not issued or
distributed any employee handbook or manual for any Plant which, to
Seller's knowledge, is reasonably likely to be deemed materially
inconsistent with employment at-will. Seller has entered into no
understanding, oral agreement or course of conduct which creates a
binding obligation with respect to any term or condition of employment
that will be binding upon Buyer.
(d) Seller will make available to Buyer a copy or accurate
summary of each agreement, arbitration decision, grievance proceeding,
memorandum, or record relating to any dispute or proceeding affecting
the employment relationships at the Plants or Assets which is currently
pending or has been resolved within the past five years.
4.11 Insurance. The Disclosure Schedule, under the
caption referencing this Section 4.11, lists and briefly describes each
insurance policy maintained by Seller with respect to the Assets and operations
of the Business and sets forth the date of expiration of each such insurance
policy. All of such insurance policies are in full force and effect and are
issued by insurers of recognized responsibility. Seller has not received any
written notice that it is in material default with respect to its obligations
under any of any insurance policies relating to the Assets, taken as a whole.
4.12 Compliance with Laws;
Permits. Other than with respect to "Environmental Laws" as defined in Section
4.13:
================================================================================
(a) Seller has complied in all material respects with all
applicable federal, state and local laws, ordinances, rules,
regulations and other requirements pertaining to occupational safety
and health and building and zoning codes, which materially affect the
operation of the Assets, taken as a whole, and no claims have been
filed against Seller alleging a material violation of any such laws,
regulations or other requirements. To Seller's knowledge, the Assets
may be operated "as is" in compliance with all such laws, regulations
and other requirements. Seller has not received any written notice of
any action, pending or threatened, to change the zoning or building
ordinances or any other laws, rules, regulations or ordinances that, if
successful, would materially adversely affect the Assets, taken as a
whole. Seller has not received any written notice of any violations on
the part of Seller of any zoning or building ordinances with respect to
the Plants. Seller has complied in all material respects with the U.S.
Food, Drug and Cosmetic Act and all applicable state and local laws and
regulations with respect to the wholesomeness and fitness for human
consumption of food.
================================================================================
(b) Seller has, in full force and effect, all material
licenses, permits and certificates, from federal, state and local
authorities (including, without limitation, federal and state agencies
regulating occupational health and safety) necessary to conduct the
Business at the Plants and own and operate the Assets (other than
"Environmental Permits," as such term is defined in Section 4.13
hereof) (collectively, the "Permits") as presently conducted or
operated.
Environmental Matters. Except as disclosed on the Disclosure Schedule under the
caption referencing this Section 4.13, and subject to Section 6.02 hereof:
================================================================================
(a) Seller's operation of the Plants and the present condition of the
Real Property are in material compliance with all applicable federal, state
and local laws, rules, regulations, ordinances, codes, orders, decrees and
judgments relating to pollution, contamination, hazardous substance
remediation or handling, or protection of the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and Recovery Act, the
Hazardous Materials Transportation Act, the Toxic Substances Control Act,
the Clean Water Act, the Clean Air Act and similar state statutes
(collectively, and as in effect on the date hereof, "Environmental Laws").
================================================================================
(b) Seller has obtained and maintained all permits, licenses,
certificates of compliance, approvals and other authorizations required
under Environmental Laws to conduct the Business at the Plants and to
own or operate the Real Property (collectively, the "Environmental
Permits"). Seller has conducted the Business at the Plants in
compliance in all material respects with the terms of the Environmental
Permits, taken as a whole with respect to each Plant. Seller is in
material compliance with all requirements to file all reports and
notifications with respect to the Plants and the Real Property under
and pursuant to all material requirements of Environmental Laws.
(c) Seller has not: (i) generated, treated, contained,
handled, located, used, manufactured, processed, buried, incinerated,
deposited, injected, disposed of, stored, or released on or under the
Real Property, any "Hazardous Materials" (as hereinafter defined), (ii)
utilized on the Real Property any asbestos, polychlorinated biphenyls
("PCBs") or pesticides or (iii) constructed, installed, used or placed
aboveground or underground Hazardous Materials storage tanks on or
under the Real Property, or removed or filled any such tanks. To
Seller's knowledge: (i) no Hazardous Materials have been generated,
treated, contained, handled, located, used, manufactured, processed,
buried, incinerated, deposited, injected, disposed of, stored,
originated from or released on or under the Real Property by Seller,
(ii) the Real Property and any improvements thereon contain no
asbestos, PCBs or pesticides, and (iii) no aboveground or underground
Hazardous Materials storage tanks are located on or under the Real
Property, or have been located on or under the Real Property and then
subsequently been removed or filled. If any such storage tanks exist on
or under the Real Property, such storage tanks have been duly
registered, if required, with all appropriate governmental entities and
are otherwise in material compliance with all applicable Environmental
Laws.
(d) Seller has not received written notice alleging in any
manner that Seller is, or might potentially be, responsible for any
past release of Hazardous Materials on or under the Real Property,
whether such release originated on or under the Real Property or on or
under other property adjacent to the Real Property.
(e) The Real Property is not listed on the United States
Environmental Protection Agency National Priorities List of Hazardous
Waste Sites, or any other similar list of hazardous waste sites
maintained by any similar state agency.
(f) No part of the Real Property has been used by Seller as a
landfill, dump or other disposal, storage, transfer, handling or
treatment area for Hazardous Materials.
(g) Seller has not received any written notice of the
existence of any lien against Seller or the Real Property in favor of
any governmental entity for: (i) any liability or imposition of costs
under or violation of any applicable Environmental Law with respect to
the Real Property, or (ii) any release of Hazardous Materials on or
under the Real Property.
(h) As used in this Section 4.13, "Hazardous Materials" shall
mean any dangerous, harmful, toxic or hazardous pollutant, contaminant
or chemical, including petroleum, as defined in or governed by any
Environmental Law.
4.14 Brokerage. No third party shall be entitled to
receive any brokerage commissions, finder's fees, fees for financial advisory
services or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Seller.
4.15 Taxes. Seller has filed all returns of federal,
state, county and local taxes and has paid all such taxes and interest and
penalties with respect to taxes, if any, which are owed by it and the
non-payment of which would permit the taxing entity to assert under applicable
law a claim against Buyer by reason of the transactions contemplated under this
Agreement.
4.16 Accounts Receivable. All of the
Accounts Receivable arose in the ordinary course of the Business. To Seller's
knowledge, none of such Accounts Receivable are subject to counterclaim, defense
or set-off or are being contested or disputed by the obligor thereon except as
adequately covered by the allowance for doubtful accounts.
4.17 Beet Color
Business Capital Expenditures. The Beet Color Business Capital Expenditures
which will be reimbursed by Buyer at Closing pursuant to Section 2.02(a)(ii),
together with those Beet Color Business Capital Expenditures to which Seller has
committed pursuant to the Kraft Agreement which must be completed by Buyer after
Closing pursuant to Seller's specifications for such project, will not in the
aggregate exceed the sum of $950,000.
4.18 Intellectual Property
Rights. Schedule 1.01(k) is a complete and correct list of all trademarks,
service marks, trade names and domain names owned by Seller and used in the
Business (other than those trademarks described in Section 10.05) (the "ANFK
Trademarks") and a list of Seller's applications and registrations in any
governmental office or registry with respect to the ANFK Trademarks. Seller does
not know of any claim that the use of the ANFK Trademarks infringes the
intellectual property rights of any person or entity. Seller does not know of
any infringement by any person or entity of Seller's rights in the ANFK
Trademarks.
4.19 No Change in Assets. Except (i) as
listed in Section 1.02, or (ii) for normal and customary changes in the ordinary
course of business with respect to current assets and repairs to fixed assets
and (iii) for the Beet Color Business Capital Expenditures, the Assets
constitute all the assets with which Seller has conducted the Business during
the twelve months preceding the Closing Date.
4.20 No Other
Representations or Warranties. Except for the representations and warranties
expressly set forth in this Article IV, neither Seller nor any other person
makes any other representation or warranty on behalf of Seller, express or
implied, and Seller hereby disclaims any such representation or warranty,
whether by Seller or any of its officers, directors, employees, agents or
representatives or any other person, with respect to the execution and delivery
of this Agreement or the transactions contemplated hereby, notwithstanding the
delivery or disclosure to Buyer or any of its officers, directors, employees,
agents or representatives or any other person of any documentation or other
information by Seller or any of its officers, directors, employees, agents or
representatives or any other person with respect to the transactions
contemplated hereby. Notwithstanding any contrary provision of this Agreement,
Seller makes no representations or warranties with respect to the ▇▇▇▇▇▇▇
Facility or the ▇▇▇▇▇▇▇ Facility Operations except as set forth in the limited
warranty deed(s) to be delivered with respect to the ▇▇▇▇▇▇▇ Facility pursuant
to Section 8.01(j)(i). Except as expressly set forth in this Agreement, the
Assets are sold on an "as is" and "where is" basis, with any and all faults.
================================================================================
ARTICLE V
================================================================================
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
5.01 Incorporation and
Corporate Power. Buyer is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of New York, and has the requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.
5.02 Execution, Delivery; Valid and Binding Agreement. The
execution, delivery and
performance of this Agreement by Buyer and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the requisite
corporate action of Buyer, and no other corporate proceedings on its part are
necessary to authorize the execution, delivery or performance of this Agreement.
This Agreement has been duly executed and delivered by Buyer and, assuming that
this Agreement is the valid and binding agreement of Seller, constitutes the
valid and binding obligation of Buyer, enforceable in accordance with its terms.
5.03 No Breach. Except as disclosed in Schedule
5.03, the execution, delivery and performance of this Agreement by Buyer and the
consummation by Buyer of the transactions contemplated hereby do not conflict
with or result in any breach of any of the provisions of, or constitute a
default under, result in a violation of, result in the creation of a right of
termination or acceleration or any lien, security interest, charge or
encumbrance upon any assets of Buyer, or require any authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Certificate of Incorporation or
Bylaws of Buyer or any indenture, mortgage, lease, loan agreement or other
agreement or instrument by which Buyer is bound or affected, or any law,
statute, rule or regulation or order, judgment or decree to which Buyer is
subject; in each case, in which the breach, default, violation, right of
termination or acceleration or any other action or event described herein would
have a material adverse effect on the ability of Buyer to operate the Business
and the Assets (taken as a whole) immediately after the Closing in substantially
the same manner as they were operated by Seller immediately prior to the
Closing.
5.04 Consents Governmental
Authorities; Consents. Except for the applicable requirements of the HSR Act,
Buyer is not required to submit any notice, report or other filing with any
governmental authority in connection with the execution or delivery by it of
this Agreement or the consummation of the transactions contemplated hereby. No
consent, approval or authorization of any governmental or regulatory authority
or any other party or person is required to be obtained by Buyer in connection
with its execution, delivery and performance of this Agreement or the
transactions contemplated hereby.
5.05 Brokerage. No third party shall be entitled to
receive any brokerage commissions, finder's fees, fees for financial advisory
services or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Buyer.
ARTICLE VI
COVENANTS OF SELLER
6.01 Conduct of the Business. In
connection with the ownership and use of the Assets, Seller agrees to observe
each term set forth in this Section 6.01 and agrees that, from the date hereof
until the Closing Date, unless otherwise consented to by Buyer in writing:
(a) Seller shall operate the Business and maintain the Assets
only in the ordinary course of the Business as presently conducted by
Seller, in accordance in all material respects with Seller's past
custom and practice;
(b) Seller shall not, directly or indirectly, sell,
pledge, dispose of or encumber any of the Assets, except in the
ordinary course of the operation of the Business by Seller;
(c) Seller shall not cancel or terminate its current insurance
policies described in the Disclosure Schedule under the caption
referencing Section 4.11, or cause any of the coverage thereunder to
lapse unless, simultaneously with such termination, cancellation or
lapse, replacement policies providing coverage equal to or greater than
the coverage under the canceled, terminated or lapsed policies for
substantially similar premiums are in full force and effect; and
(d) Seller shall (i) use commercially reasonable efforts to
keep available the services of those officers and employees of Seller
responsible for operating the Plants but shall make no new commitments
beyond June 30, 1997, except as expressly authorized by Buyer; (ii)
confer on a regular and frequent basis with representatives of Buyer to
report on operational matters and the general status of ongoing
operations with respect to the Business and the Assets; (iii) not
intentionally take any action which would render, or which reasonably
may be expected to render, any representation or warranty made by it in
this Agreement untrue in any material respect at the Closing; (iv)
notify Buyer of any emergency or other change in the normal operation
of the Business and of any governmental or third party complaints,
investigations or hearings (or communications indicating that the same
may be contemplated) if such emergency, change, complaint,
investigation or hearing would be material, individually or in the
aggregate, to the operations of the Business or to Seller's or Buyer's
ability to consummate the transactions contemplated by this Agreement;
and (v) promptly notify Buyer in writing if Seller shall discover that
any representation or warranty made by it in this Agreement was when
made, or has subsequently become, untrue in any material respect.
6.02 Environmental Matters.
(a) Seller shall deliver to Buyer a Phase I Environmental Site
Assessment, dated not more than 60 days prior to the date hereof, that
satisfies the ASTM Standard for Phase I Site Assessments (E 1527) for
each of the Plants (the "Phase I Investigations").
(b) Seller shall complete, at Seller's cost and expense, the
wastewater treatment project described in Schedule 6.02(b) (regarding
the expansion of sprayfields and improvements to lagoon 4) (the
"Wastewater Project"). Buyer shall cooperate with Seller and Seller's
contractors in all respects to allow Seller to complete the Wastewater
Project. If within five years after the Closing Date the Wisconsin
Department of Natural Resources requires Buyer to perform additional
dredging of lagoons 1, 2 or 3, then Seller shall reimburse Buyer
one-half of Buyer's net out-of-pocket costs of such dredging.
Notwithstanding any contrary provision of this Agreement other than the
immediately preceding sentence, and except as provided in Section
11.05, upon completion of the Wastewater Project, Seller shall have no
further liability to Buyer in connection with the generation, storage,
treatment or disposal of wastewater at the Plants.
(c) Prior to or within 30 days after the Closing, Seller shall
cause, at Seller's cost and expense, a well integrity test to be
performed on the existing deep injection well located at the Buckley,
Michigan Plant. Such test shall be performed by Petrotek Engineering
Corporation, Englewood, Colorado (Federal ID# ▇▇-▇▇▇▇▇▇▇) or such other
third party acceptable to Buyer and Seller (the "Well Tester"). Buyer
shall cooperate with Seller and the Well Tester in all respects in
connection with such well integrity test. If such well integrity test
indicates such well to be in compliance with the requirements for Class
I injection ▇▇▇▇▇ set forth in 40 C.F.R. 146 (the "Class I Well
Regulations") and not in violation of any other federal or Michigan
regulations governing the integrity of the well, then, except as
provided in Section 11.05, such deep injection well will be considered
to have been sold "as is" and Seller shall have no further liability to
Buyer with respect to such well or the use thereof. If such well
integrity test shows such well not to be in compliance with the Class I
Well Regulations, then (i) Seller shall perform such steps as necessary
to cause such well to be brought into compliance, (ii) Buyer shall
cooperate with Seller and Seller's contractors in all respects to allow
Seller to cause such well to be brought in compliance, and (iii) upon
satisfaction of (i), Seller shall have no further liability to Buyer
with respect to such well or the use thereof, except as provided in
Section 11.05.
(d) Seller shall complete the remediation of those underground
tank sites identified on Schedule 6.02(d) that have been identified by
the applicable state regulatory agency as requiring remediation. Buyer
shall cooperate with Seller and Seller's contractors in all respects to
allow Seller to complete such remediation. Upon completing such
remediation to the satisfaction of the state and/or federal regulatory
agency having jurisdiction, and obtaining a written determination from
such agency to the effect that the remediation has been completed in
accordance with current regulatory standards and no further action is
required by such agency, except as provided in Section 11.05, Seller
shall have no further liability to Buyer in connection with such
underground tank sites.
6.03 Access to Books and Records.
Between the date hereof and the Closing Date, Seller shall afford to Buyer and
its authorized representatives full access at all reasonable times and upon
reasonable notice to the offices, properties, books, records, officers,
employees and other items of Seller (but only insofar as such items related
primarily to the Assets or the operation of the Business, and excluding such
items that relate to Liabilities not included within the Assumed Liabilities)
and otherwise provide such assistance as is reasonably requested by Buyer in
order that Buyer may have a full opportunity to make such investigation and
evaluation as it shall reasonably desire to make of the Business and the Assets.
Buyer acknowledges and agrees that all information it obtains pursuant to such
investigation shall constitute "Business Information," as defined in that
certain Confidentiality Agreement between the parties hereto (the
"Confidentiality Agreement"), and that Buyer and its authorized representatives
shall continue to be subject to the terms thereof.
6.04 Regulatory Filings. To the extent not
filed as of the date hereof, as promptly as practicable after the execution of
this Agreement, Seller shall make or cause to be made all filings and
submissions under the HSR Act and any other laws or regulations applicable to
the Assets for the consummation of the transactions contemplated herein. Seller
will coordinate and cooperate with Buyer in exchanging such information, will
not make any such filing without providing to Buyer a final copy thereof for its
review and consent at least two full business days in advance of the proposed
filing and will provide such reasonable assistance as Buyer may request in
connection with all of the foregoing.
6.05 Conditions. Seller shall take all
commercially reasonable actions necessary or desirable to cause the conditions
set forth in Section 8.01 to be satisfied and to consummate the transactions
contemplated herein as soon as reasonably possible after the satisfaction
thereof (but, in any event, within five business days of such date).
6.06 Purchase of
Trademarks from Selviac. Prior to the Closing, Seller shall purchase the "Aunt
Nellie's" trademarks listed on Schedule 1.01(k) as being owned by "DBV". At the
Closing, Seller will deliver to Buyer assignments of such trademarks in form
suitable for recording such transfer from Selviac to Seller.
ARTICLE VII
COVENANTS OF BUYER
Buyer covenants and agrees with Seller as follows:
7.01 Regulatory Filings Regulatory Filings. To the extent not
filed as of the date hereof, as promptly as practicable after the execution of
the Agreement, Buyer shall make or cause to be made all filings and submissions
under the HSR Act and any other laws or regulations applicable to Buyer for the
consummation of the transactions contemplated herein. Buyer will coordinate and
cooperate with Seller in exchanging such information, will not make any such
filing without providing to Seller a final copy thereof for its review and
consent at least two full business days in advance of the proposed filing and
will provide such reasonable assistance as Seller may request in connection with
all of the foregoing.
7.02 Conditions. Buyer shall take all commercially
reasonable actions necessary or desirable to cause the conditions set forth in
Section 8.02 to be satisfied and to consummate the transactions contemplated
herein as soon as reasonably possible after the satisfaction thereof (but, in
any event, within five business days of such date).
ARTICLE VIII
CONDITIONS TO CLOSING
8.01 Conditions to
Buyer's Obligations. The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the following
conditions on or before the Closing Date:
(a) (i) Seller shall have delivered an update of the
Disclosure Schedule referred to in Article IV as of the Closing Date
(the "Updated Disclosure Schedule"). The representations and warranties
of Seller set forth in Article IV hereof shall be true and correct in
all material respects at and as of the Closing Date, except as set
forth in the Updated Disclosure Schedule, as though then made and as
though the Closing Date had been substituted for the date of this
Agreement throughout such representations and warranties, except that
any such representation or warranty made as of a specified date (other
than the date hereof) shall only need to have been true on and as of
such date;
(ii) The Updated Disclosure Schedule shall not
disclose any event or circumstance that is not disclosed in the
original Disclosure Schedule and that has had or is reasonably expected
to have a materially adverse effect upon the Business or the Assets;
(b) Seller shall have performed in all material respects all
of the covenants and agreements required to be performed and complied
with by it under this Agreement prior to the Closing;
(c) Seller shall have obtained, or caused to be obtained, each
consent or approval of nongovernmental third parties necessary for
Seller to transfer beneficial ownership of the Assets without material
exception, to Buyer substantially in the manner contemplated hereby,
including without limitation the consent of the other party or parties
to the Kraft Agreement and to the lease of the ▇▇▇▇▇▇▇▇▇ Plant;
(d) The applicable waiting periods under the HSR Act shall
have expired or been terminated, and all other material governmental
filings, authorizations and approvals that are required for the
consummation of the transactions contemplated hereby will have been
duly made and obtained;
(e) There shall not be pending any action or proceeding before
any judicial or governmental body having proper jurisdiction thereof:
(i) challenging or seeking to make illegal, or to delay substantially
or restrain materially or prohibit, the consummation of the
transactions contemplated hereby or seeking to obtain material damages
in connection with such transactions, (ii) seeking to prohibit direct
or indirect ownership or operation by Buyer of all or a material
portion of the Business or the Assets, or to compel Buyer or any of its
subsidiaries to dispose of or to hold separately all or a material
portion of the business or assets of Buyer and its subsidiaries, taken
as a whole, as a result of the transactions contemplated hereby, (iii)
seeking to invalidate or render unenforceable any material provision of
this Agreement or (iv) otherwise relating to and materially adversely
affecting the transactions contemplated hereby;
(f) There shall not be any action taken, or any statute, rule,
regulation, judgment, order or injunction enacted, entered, enforced,
promulgated, issued or deemed applicable to the transactions
contemplated hereby by any federal, state or foreign court, government
or governmental authority or agency, which would reasonably be expected
to result, directly or indirectly, in any of the consequences referred
to in Section 8.01(e) hereof;
(g) There shall have been no damage, destruction or loss of or
to the Assets, whether or not covered by insurance, which, in the
aggregate, has, or would be reasonably likely to have, a material
adverse effect on the value of any of the Plants (other than any
damage, loss or destruction of the Buckley, Michigan receiving station
which would not be considered material) or the ▇▇▇▇▇▇▇ Facility or on
the aggregate value of the Business and the Assets or the ability of
Buyer to operate them, as a whole, immediately after the Closing in
substantially the same manner as Seller was operating them, as a whole,
immediately prior to the Closing;
(h) To the extent not delivered on or prior to the date
hereof, Seller shall have delivered all Schedules and all Exhibits in
form and substance reasonably satisfactory to Buyer and Buyer shall
have had a reasonable opportunity to verify information;
(i) Buyer shall negotiate in good faith with the International
Brotherhood of Teamsters Local 695, and shall have reached agreement on
the terms and provisions of a collective bargaining agreement covering
the Clyman, Wisconsin Plant, which agreement shall be reasonably
acceptable to Buyer and shall, among other things: (i) release Seller
from any further obligations from and after the Closing under the
Master Agreement covering April 15, 1996 to April 14, 2001 between
Seller (dba Aunt Nellie's Farm Kitchens, Inc.) and IBT Local 695 and
the Addenda thereto currently in effect, (ii) acknowledge Seller's
compliance with its obligation to bargain over the effects of the sale
of the Assets, and (iii) contain terms and conditions of employment
acceptable to Buyer. In negotiating such agreement with IBT Local 695,
Buyer agrees to offer to pay wages benefits and other terms and
conditions general comparable to those in force at Buyer's ▇▇▇▇▇▇▇,
Wisconsin plant and Buyer is deemed for the purposes of this paragraph
to be reasonable in requiring such an agreement;
(j) On the Closing Date, Seller shall have delivered to
Buyer all of the following:
(i) separate warranty deeds in form reasonably
satisfactory to Buyer selling, conveying and transferring to
Buyer title to each of the Owned Parcels, free and clear of
all mortgages, liens, charges and encumbrances (except the
Permitted Encumbrances), and warranting such title, and
separate limited warranty deed(s) in form reasonably
satisfactory to Buyer selling, conveying and transferring to
Buyer the ▇▇▇▇▇▇▇ Facility;
(ii) the ▇▇▇▇ of Sale executed by Seller and such
other instruments of conveyance, transfer, assignment and
delivery as Buyer shall have reasonably requested pursuant to
Section 3.02 hereof;
(iii) the Assignment and Assumption executed by
Seller;
(iv) a certificate of a Vice-President of Seller,
dated the Closing Date, in form and substance reasonably
acceptable to Buyer, stating that the conditions precedent set
forth in subsections (a) and (b) above have been satisfied;
(v) copies of the third party and governmental
consents and approvals referred to in subsections (c) and (d)
above;
(vi) either (A) a copy of the text of the resolutions
adopted by the Board of Directors of Seller authorizing the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this
Agreement, along with a certificate, executed on behalf of
Seller by its corporate secretary, certifying to Buyer that
such copy is a true and complete copy of such resolutions, and
that such resolutions were duly adopted and have not been
amended or rescinded, or (B) a certificate, executed on behalf
of Seller by its corporate secretary, certifying to Buyer that
approval by Seller's Board of Directors of the execution,
delivery and performance of this Agreement and the
consummation of the transactions contemplated by this
Agreement is not required;
(vii) such other certificates, documents and
instruments as Buyer reasonably requests related to the
transactions contemplated hereby; and
(k) Buyer shall have received from a bank reasonably
acceptable to Buyer a commitment for an approximately $240 million
credit facility to a special purpose company created to finance Green
Giant inventories related to the Alliance Agreement (as defined in
Section 10.06).
8.02 Conditions to Seller's
Obligations. The obligation of Seller to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the following
conditions on or before the Closing Date:
(a) The representations and warranties of Buyer set forth in
Article V hereof will be true and correct in all material respects at
and as of the Closing as though then made and as though the Closing
Date had been substituted for the date of this Agreement throughout
such representations and warranties;
(b) Buyer shall have performed in all material respects
all the covenants and agreements required to be performed by it under
this Agreement prior to the Closing;
(c) The applicable waiting periods under the HSR Act shall
have expired or been terminated and all other material governmental
filings, authorizations and approvals that are required for the
consummation of the transactions contemplated hereby will have been
duly made and obtained;
(d) There shall not be pending any action or proceeding before
any judicial or governmental body having proper jurisdiction thereof:
(i) challenging or seeking to make illegal, or to delay substantially
or restrain materially or prohibit, the consummation of the
transactions contemplated hereby or seeking to obtain material damages
in connection with such transactions, (ii) seeking to invalidate or
render unenforceable any material provision of this Agreement, or (iii)
otherwise relating to and materially adversely affecting the
transactions contemplated hereby;
(e) There shall not be any action taken, or any statute, rule,
regulation, judgment, order or injunction, enacted, entered, enforced,
promulgated, issued or deemed applicable to the transactions
contemplated hereby by any federal, state or foreign court; government
or governmental authority or agency, which would reasonably be expected
to result, directly or indirectly, in any of the consequences referred
to in Section 8.02(d) hereof; and
(f) On the Closing Date, Buyer will have delivered to
Seller:
(i) a wire transfer, in immediately available
United States funds, in the amount set forth in Section
2.02(a);
(ii) the Assignment and Assumption executed by
Buyer;
(iii) a copy of the text of the resolutions adopted
by the Board of Directors of Buyer authorizing the execution,
delivery and performance of this Agreement and the
consummation of the transactions contemplated by this
Agreement, along with a certificate, executed on behalf of
Buyer by its corporate secretary, certifying to Seller that
such copy is a true and complete copy of such resolutions, and
that such resolutions were duly adopted and have not been
amended or rescinded;
(iv) a certificate of the Chief Executive Officer of
Buyer, dated the Closing Date, in form and substance
reasonably satisfactory to Seller, stating that the conditions
precedent set forth in subsections (a) and (b) above have been
satisfied; and
(v) such other certificates, documents and
instruments as Seller reasonably requests related to the
transactions contemplated hereby.
ARTICLE IX
TERMINATION
9.01 Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by the mutual consent of Buyer and Seller;
(b) by either Buyer or Seller if there has been a material
misrepresentation, breach of warranty or breach of covenant on the part
of the other in the representations, warranties and covenants set forth
in this Agreement and such misrepresentation or breach has not been
cured within ten business days after receipt by the misrepresenting or
breaching party of written notice from the other party of the
misrepresentation or breach (which notice shall describe the problem in
sufficient detail to enable the misrepresenting or breaching party to
cure the problem identified); or
(c) by either Buyer or Seller if the transactions contemplated
hereby have not been consummated by April 30, 1997, provided that,
neither Buyer nor Seller will be entitled to terminate this Agreement
pursuant to this Section 9.01(c) if such party's willful breach of this
Agreement has prevented the consummation of the transactions
contemplated hereby.
9.02 Effect of Termination. In the
event of termination of this Agreement by either Buyer or Seller as provided in
Section 9.01, this Agreement shall become void and there shall be no liability
on the part of either Buyer or Seller, or their respective stockholders,
officers, or directors, except that (a) the last sentence of Section 6.03 and
Sections 12.01, 12.02 and 12.11 hereof shall survive indefinitely, and (b) each
party shall be liable to the other party hereto for willful breaches of this
Agreement prior to the time of such termination.
ARTICLE X
ADDITIONAL AGREEMENTS
10.01 Employee Matters. This Section 10.01
and Sections 10.02 and 10.03 below set forth the parties' agreements with
respect to the treatment of Seller's employees who are employed on a
non-seasonal basis in the Business (excluding (i) any employees of Seller
employed at Seller's headquarters in Minneapolis, (ii) ▇▇▇ ▇▇▇▇▇▇, who shall
remain employed by Seller but with respect to whom Buyer will reimburse Seller
the cost of severance and out-placement services for senior managers to ▇▇.
▇▇▇▇▇▇ pursuant to the "Business Severance Plans" as defined in Section
10.02(a), and (iii) ▇▇▇▇▇ ▇▇▇▇▇▇▇, who shall remain employed by Seller after the
Closing but whose duties shall, for a period of 120 days after the Closing,
relate exclusively to the sale of the Assets and transition of the Business to
Buyer) (the "Business Employees"). Except as otherwise specifically set forth in
Sections 10.01, 10.02 and 10.03 (and only for the limited purposes described
therein), effective as of the day immediately preceding the Closing Date, all
Business Employees shall cease to be participants in or otherwise covered by
Seller's pension and welfare benefit plans, including plans, programs, policies
and arrangements which provide retirement benefits, medical and dental coverage,
accident and life insurance, disability coverage, vacation and severance pay.
(a) Termination; Rehire. Effective as of the day immediately
preceding the Closing Date, Seller shall terminate the employment of
all Business Employees, other than ▇▇▇▇▇ ▇▇▇▇▇▇▇ who shall remain
employed by Seller but whose duties shall, for a period of 120 days
after the Closing, relate exclusively to the sale of the Assets and
transition of the Business to Buyer. Effective as of the Closing Date,
Buyer shall make offers of employment (which shall include Buyer's
agreements set forth below with respect to participation in Buyer's
employee benefit plans) to all Business Employees who are actively at
work or on vacation. As to Business Employees who are on leave, Buyer
shall make offers of employment to such Business Employees effective
upon their return from leave to the same extent, if any, as Seller
would be required to offer employment in accordance with applicable law
and applicable collective bargaining agreements. Buyer shall have no
obligation to provide any pay, compensation or benefits to any Business
Employee on leave for any period prior to the date, if any, of hiring
of that Business Employee by Buyer to work. Buyer shall pay Business
Employees who are hired by Buyer (a "Hired Business Employee") the same
rate of base pay as was paid to such Hired Business Employee by Seller
immediately prior to the Closing Date except to the extent applicable
collective bargaining agreements would not so require. If Buyer elects
to waive the condition set forth in Section 8.01(i), then effective as
of the Closing Date Buyer shall assume all collective bargaining
agreements covering Business Employees. Seller shall bear all
responsibility for, and related costs associated with, complying with
the WARN Act and similar state laws to the extent that the same apply
to Business Employees up to the date of Closing; Buyer shall bear all
responsibility for, and related costs associated with, complying with
the WARN Act and similar state laws to the extent that the same apply
to Business Employees from and after the date of Closing.
(b) Pension Plans. Effective as of the end of the day
immediately preceding the Closing Date, Business Employees shall cease
to accrue benefits and cease to earn service for purposes of
participation, vesting and any early retirement or other subsidies, but
will continue to be participants, under the Seller's employee benefit
pension plans ("Seller's Pension Plans") as that term is defined in the
Employee Retirement Income Security Act of 1974 ("ERISA"), as amended
(and excluding the Multi-Employer Pension Plan referred in Section
10.03 below). Business Employees shall cease being participants under
Seller's Pension Plans upon final payment of all vested benefits
payable thereunder in accordance with the terms of the Seller's Pension
Plans.
Effective as of the Closing Date (or in the case of Business
Employees on leave at Closing who present themselves for employment on
termination of their leave and who are hired by Buyer, effective as of
the date of hire), Buyer shall include Hired Business Employees in its
applicable employee benefit plans ("Buyer's Pension Plans") except (i)
seasonal employees, (ii) employees whose applicable length of service
with Seller and any predecessor owner of the ANFK Business on the
Closing Date makes them ineligible for inclusion in Buyer's Pension
Plans, and (iii) any contrary provision of any collective bargaining
agreement which governs the terms and conditions of that employee's
employment. Hired Business Employees (other than seasonal employees)
shall be given credit for all service with Seller and any predecessor
owner of the ANFK Business under Buyer's applicable employee benefit
pension plans in which they become participants for purposes of
participation and vesting.
(c) Health Coverage. Effective as of the end of the day
immediately preceding the Closing Date, Business Employees shall no
longer be covered by Seller's medical and dental plans. Seller shall be
responsible for providing Business Employees and their eligible
dependents who terminate or otherwise become subject to a "qualifying
event" (as defined in Section 4980B of the Internal Revenue Code of
1986, as amended (the "Code")) prior to the Closing Date the election
of group health continuation coverage required by Section 4980B of the
Code ("Continuation Coverage"), under the terms of the health plans
maintained by Seller.
Effective as of the Closing Date, Hired Business Employees
(other than seasonal employees) will be eligible for coverage under
Buyer's medical and dental plans, subject to the plan's eligibility
requirement (giving credit for service with Seller and any predecessor
owner of the ANFK Business). Buyer's medical and dental plans shall
provide for waiver of preexisting conditions if Seller's medical and/or
dental plans covered the Hired Business Employee for such condition
prior to the Closing Date. Buyer shall perform the duties required of
an employer with respect to Continuation Coverage, for Hired Business
Employees upon their termination of employment with Buyer on or after
the Closing Date to the extent required by law.
(d) Vacation. Buyer shall recognize all earned, but unused
vacation of the Hired Business Employees under Seller's existing
vacation policy and shall permit the Hired Business Employees to use
such earned, but unused vacation during calendar year 1997 in
accordance with Buyer's vacation policy in effect on the date hereof.
(e) Workers' Compensation. Seller shall remain responsible for
all workers' compensation claims made by Business Employees based on
occurrences prior to the Closing Date, and Buyer shall be responsible
for all workers' compensation claims made by Hired Business Employees
based on occurrences on and after the Closing Date.
(f) Other Employee Benefit Plans. Effective as of the end of
the day immediately preceding the Closing Date, and except as otherwise
provided herein, Business Employees shall cease to be covered by
Seller's employee welfare benefit plans, including, but not limited to,
disability, life insurance, severance, employee assistance and vacation
provided, however, that Seller's employee welfare benefit plans shall
continue to cover claims incurred before the Closing Date and long- and
short-term disability benefits for disabilities that began before the
Closing Date.
Effective as of the Closing Date, Buyer shall include Hired
Business Employees (which term excludes seasonal employees) in its
employee welfare benefit plans (including its long-term disability
insurance and life insurance programs, subject to the plans'
eligibility requirements). Such Hired Business Employees shall be given
credit for all service with Seller (and with Seller's predecessor
owners of the ANFK Business) under the employee welfare benefit plans
of Buyer in which they become participants for purposes of
participation in such plans of Buyer.
(g) Retiree Health Plans. Seller shall be responsible for
payment of retiree benefits for those Business Employees who are
receiving retiree health benefits under Seller's retiree health plan as
of the end of the day immediately preceding the Closing Date, in
accordance with the terms of such retiree health plan as then in effect
or as subsequently amended. In the case of Hired Business Employees who
are eligible for health benefits under both Seller's retiree health
plan and Buyer's health plan, Buyer's health plan shall have primary
responsibility for such Hired Business Employee's health claims and
Seller's retiree health plan shall have secondary responsibility.
(h) Other Employment-Related Liabilities. The parties agree
that, except as explicitly set forth above, Seller shall be liable for
all employment-related liabilities of the employer of the Hired
Business Employees incurred through the day immediately preceding the
Closing Date (or through the day immediately preceding the date of hire
by Buyer, in the case of Business Employees on leave), and Buyer shall
be and become liable for all employment-related liabilities of the
employer of the Business Employees who accept employment with Buyer
incurred from and after the Closing Date (or from and after the date of
hire, by Buyer in the case of Business Employees on leave).
(i) No Transfer of Seller Plan Assets or Liabilities. All of
Seller's pension and welfare benefit plans and assets retained for the
funding of benefits through such plans, and any corresponding
liabilities, are specifically excluded from any assets and liabilities
transferred to Buyer pursuant to this Agreement. Seller shall remain
liable, and (except as provided in Section 10.03 below) Buyer shall not
assume or otherwise have any Liability, under any employee benefit plan
or program (whether or not subject to ERISA) of Seller.
(j) Limitation on Enforcement. Sections 10.01 and 10.02 are
agreements solely between Seller and Buyer. Nothing in this Section
10.01 or Section 10.02 below, whether express or implied, confers upon
any employee of Buyer or Seller (including the Business Employees and
the Hired Business Employees) or any other person, any rights or
remedies, including, but not limited to (i) any right to employment or
recall, (ii) any right to continued employment for any specified period
or (iii) any right to claim any particular compensation, benefit or
aggregation of benefits, of any kind or nature whatsoever, as a result
of this Section 10.01 or 10.02 below.
(k) Buyer has informed Seller that Buyer has reached agreement
with the International Brotherhood of Teamsters Local 695 regarding the
terms and provisions of a collective bargaining agreement covering the
Clyman, Wisconsin Plant as described in Section 8.01(i).
10.02 Terminated Employees; Severance.
(a) Prior to the Closing, Seller will adopt one or more
separate severance plans covering the Business Employees in form and
substance substantially identical to the severance plans currently
covering such Business Employees (the "Business Severance Plans"). Upon
the Closing, Buyer shall adopt the Business Severance Plans with
respect to the Hired Business Employees.
(b) Business Employees as of the Closing who are not offered a
"comparable job" (as defined in the Business Severance Plans) and who
do not accept an offer of a non-comparable job as described in the
following sentence, with Buyer as of the Closing or who are terminated
(except for misconduct or gross negligence) by Buyer prior to the
one-year anniversary of the Closing Date are referred to herein as
"Terminated Employees". Buyer will use commercially reasonable efforts,
to the extent practicable, to offer each employee a non-comparable job,
if available, at the applicable Plant or, to the extent it does not
subject Buyer to relocation costs, employment, if available, at another
Buyer facility within 50 miles of such employee's home; any such
offeree who accepts such noncomparable job is not a "Terminated
Employee" and is not eligible for benefits available to Terminated
Employees under this Section 10.02.
(c) Buyer shall pay (or promptly reimburse Seller for the cost
of) all severance payments under the Business Severance Plans to
Terminated Employees and all outplacement costs incurred in connection
with Terminated Employees, subject to the following limitations as to
cost and duration of out-placement services per Terminated Employee:
Type of Employee Cost Limit Duration of Out-Placement Services
Senior Managers $5,000 3 months
Professionals 2,500 3 months
Administrative/Clerical 1,500 3 months
10.03 Assumption of
Multi-Employer Pension Plan. Seller and Buyer agree that both parties intend for
the transaction described in this Agreement not to constitute a partial or
complete withdrawal from the Teamsters Central States Southeast and Southwest
Area Pension Fund ("Central States Fund") as described by Section 4203 of ERISA
and thereby agree to take the following steps to ensure that the requirements of
Section 4204 of ERISA are met:
(a) Buyer and Seller both warrant that this transaction is a
bona fide arm's length sale of all, or a part of, assets of Seller to
an unrelated party as that term is defined in Section 267(b) of the
Internal Revenue Code;
(b) Buyer agrees to obligate itself under Section 4204 of
ERISA with respect to contributions to the Central States Fund
sufficient to comply with Section 4204(a)(1)(A) of ERISA as in effect
on the Closing Date and further obligates itself to contribute for
"substantially the same number of contribution base units" as may be
defined by statute and the Fund's fiduciaries for which Seller had an
obligation to contribute;
(c) Buyer shall provide to the Fund for a period of five
consecutive plan years of the Fund, beginning with the first plan year
of the Fund to commence after the Closing Date, a bond issued by a
corporate surety company that is an acceptable surety for purposes of
Section 412 of ERISA or an amount held in escrow by a bank or similar
financial institution satisfactory to the Fund or shall make such other
financial arrangement as may be satisfactory to the Fund for or in an
amount determined in accordance with Section 4204(a)(1)(B) of ERISA,
but only if and to the extent required by Section 4204(a)(1)(B) of
ERISA giving effect to all the provisions of ERISA, the regulations
promulgated thereunder, any actions or determinations of the Pension
Benefit Guaranty Corporation, or any actions or determinations of the
fiduciaries of the Fund;
(d) If Buyer shall withdraw or be deemed to have withdrawn
from the fund in a complete withdrawal, or a partial withdrawal with
respect to operations, as defined in Sections 4203 and 4205 of ERISA
during the five consecutive plan years of the Fund commencing with the
first plan year beginning after the Closing Date, Seller shall be
secondarily liable for any withdrawal liability it would have had to
the Fund with respect to operations but for Section 4204 of ERISA if
the liability of Buyer with respect to the Fund is not paid, but only
if and to the extent required by Section 4204(a)(1)(C) of ERISA giving
effect to all the provisions of ERISA, the regulations promulgated
thereunder, any actions or determinations of the Pension Benefit
Guaranty Corporation or any actions or determinations of the
fiduciaries of the Fund;
(e) Buyer and Seller shall promptly undertake and perform all
acts relating to the providing of notice to the fiduciaries of the Fund
and obtaining variances as may reasonably be requested by Buyer, if
any, to the requirements of paragraphs (b) and (c) above which may be
necessary or desirable to satisfy the requirements of Section 4204 of
ERISA. Buyer and Seller shall prepare their own submission documents to
obtain a variance, if any, and shall each absorb the legal and
administrative costs attributable to such preparation except that Buyer
shall provide Seller with copies of all correspondence sent to the Fund
(including exhibits) regarding a variance;
(f) If all or substantially all of Seller's assets are
distributed, or if Seller is liquidated within the five (5) Fund years
following the Fund year of this sale of assets, Seller shall provide a
surety bond or an amount in escrow as required by Section 4204(a)(3)(A)
and (B) of ERISA unless a waiver or exemption from the bond/escrow
requirements is obtained. Said bond or escrow, if any, shall be in such
amount as is required under Section 4204(a)(3)(A) of ERISA, or if only
a portion of Seller's assets are distributed, the bond or escrow shall
be such as required under Section 4204(a)(3)(8) of ERISA; and
(g) If Buyer breaches any agreement in this Section 10.03,
Buyer shall pay and indemnify Seller for any withdrawal liability owed
by Seller to the Central States Fund and shall hold Seller harmless
from and against any and all direct and indirect costs and expenses
(including attorney's fees) incurred by Seller in relation to any such
breach.
10.04 Non-Solicitation of
Employees. Seller shall not, for a period of two-years after the Closing,
without Buyer's consent (which consent shall not be unreasonably withheld or
delayed) offer employment to any Business Employee, other than those Business
Employees who are not offered employment by Buyer as of the Closing or whose
employment is terminated by Buyer.
10.05 Licenses Licenses.
(a) Seller hereby grants to Buyer, effective as of the Closing
Date, non-exclusive, non-transferable, fully paid trademark licenses as
follows:
(i) Seller will license Buyer the "Green Giant"
trademarks as currently used by ANFK through the 1997
pack year pursuant to a Trademark License Agreement
in the form attached hereto as Exhibit D1;
(ii) Seller will license Buyer the "Green Giant", "Kounty
▇▇▇▇", and "Trellis" trademarks and Seller's
proprietary seed as currently used by ANFK on
foodservice products for sale to existing foodservice
customers through the 1998 pack year pursuant to a
Trademark License Agreement in the form attached
hereto as Exhibit D2; and
(iii) Seller will license Buyer the so-called "Pillsbury
barrelhead trademark" as currently used by ANFK on
preserved fruit packed through the 1997 holiday
season pursuant to a Trademark License Agreement in
the form attached hereto as Exhibit D3.
(b) Buyer shall have no right to use Seller's trademarks
licensed pursuant to this Section 10.05 in any other place or for any
other purpose except as set forth in this Section and in the Trademark
License Agreements referred to in Subsection (a) above (the "License
Agreements"). Buyer shall grant no sublicense, in whole or in part, of
the licenses granted pursuant to this Section 10.05 without Seller's
prior written consent. Buyer recognizes Seller's ownership of the
trademarks licensed under this Section 10.05 and the License
Agreements, shall not at any time take any action that might in any way
impair Seller's rights in and to such trademarks and shall not claim
any right or interest in or to such trademarks, except such rights as
are expressly granted by this Section 10.05 or the License Agreements.
Buyer hereby agrees to take, at Seller's cost and expense, all such
actions as Seller may reasonably request in order to protect and
enforce the trademarks licensed under this Section 10.05 and the
License Agreement.
10.06 Supply of Excluded
Products. The Business currently processes and supplies to Seller the products
listed on Schedule 10.06 hereto (the "Excluded Products"). Buyer agrees to cause
the Business to continue to supply such Excluded Products in similar quantities
as ordered by Seller. The pricing terms of such supply shall be substantially
the same as Buyer supplies vegetables to Seller under the Alliance Agreement
dated as of December 8, 1994 between Seller and Buyer, as amended (the "Alliance
Agreement"), for the following periods: (i) with respect to beets and three-bean
salads, for so long as Seller continues to market such products, and (ii) with
respect to spaghetti sauces, for a period of six months; after such six-month
period the supply price for spaghetti sauces shall be renegotiated on an arms'
length basis customary in the industry. Buyer and Seller shall enter into one or
more co-packing agreements as described in this Section.
10.07 Collection of Accounts Receivable.
(a) Seller covenants and agrees that, if any payment is made
to Seller after the Closing Date on account of Accounts Receivable of
the Business which were included in the Net Working Capital as of the
Closing, Seller shall promptly endorse and deliver to Buyer any checks,
drafts or money designated as such payment.
(b) Buyer covenants and agrees that, if any payment is made to
Buyer after the Closing Date on account of accounts receivable of
Seller that are not included in the Accounts Receivable of the Business
which were included in the Net Working Capital as of the Closing, Buyer
shall promptly endorse and deliver to Seller any checks, drafts or
money designated as such payment. If requested by Seller, Buyer agrees
to cooperate and give reasonable assistance to Seller in Seller's
efforts to collect any accounts receivable of Seller that relate to the
Business and that are not included in the Assets. Seller shall be
entitled to use any lawful means to attempt to collect such accounts
receivable.
10.08 Bulk Sales Laws. The parties hereby agree to waive
compliance with the provisions of all applicable bulk sales laws (if any are
applicable).
10.09 Customer Claims. If any customer or
purchaser of products sold by ANFK shall, with respect to any purchase or other
transaction which occurred prior to the Closing Date ("ANFK Transaction")
charges Buyer or claims that Buyer has a liability to it, or asserts or exacts
an offset, discount or deduction against any amount due Buyer (an "ANFK Derived
Charge"), Seller covenants and agrees to pay, reimburse and indemnify Buyer for
any loss (not to exceed the amount of such ANFK Derived Charge) which it
sustains by reason of that ANFK Derived Charge, regardless whether the ANFK
Derived Charge is asserted in connection with Buyer's operation of the Assets or
Business after Closing or is asserted against Buyer in the conduct of its other
business operations. In addition to any other remedies available to Buyer to
recover amounts owed by Seller hereunder, Buyer may enforce any claim of Buyer
for indemnification hereunder in whole or in part by offsetting amounts so
claimed against amounts due to Seller under Section 10.07(b). Buyer shall assign
to Seller all rights Buyer has against such third party so as to enable Seller
to dispute such third party's entitlement to such ANFK Derived Charge.
10.10 ▇▇▇▇▇▇▇ Facility.
(a) The parties acknowledge that the leases currently in effect between
Seller and Buyer with respect to the ▇▇▇▇▇▇▇ Facility shall terminate upon
closing of the purchase and sale of the ▇▇▇▇▇▇▇ Facility.
(b) The parties acknowledge that all machinery, equipment, buildings,
fixtures, supplies and other tangible or intangible property included within the
▇▇▇▇▇▇▇ Facility, and except as expressly represented and warranted in Sections
4.05 and 4.13 or in the limited warranty deed(s) to be delivered pursuant to
Section 8.01(j)(ii), and except as set forth in Section 11.05, the real estate
upon which the ▇▇▇▇▇▇▇ Facility is located, is being sold "as is" with any and
all faults, and Buyer hereby waives and releases any and all present and future
claims it may have against Seller arising out of or related to Seller's
ownership or use of the ▇▇▇▇▇▇▇ Facility.
(c) The parties acknowledge that Seller is negotiating with third
parties for the sale of certain sprayfields located near (but not included as
part of) the ▇▇▇▇▇▇▇ Facility. The use of such sprayfields as sprayfields,
however, requires (i) use of a pumphouse located on approximately eight ares of
land included in the ▇▇▇▇▇▇▇ Facility and located west of the railroad tracks on
the banks of the Minnesota River (the "Eight Acres"), and (ii) easements for
underground piping across the ▇▇▇▇▇▇▇ Facility. Buyer hereby grants Seller the
right and option, exercisable at any time within six months after the Closing
Date, to purchase the pumphouse and the Eight Acres and to obtain easements for
the existing underground piping between the pumphouse and the sprayfields. If
the purchase option is exercised, the purchase price for such Eight Acres and
easements shall be one dollar, and the deed from Buyer to Seller shall be a
limited warranty deed. If the purchase option is exercised, the parties shall
agree on reasonable and customary provisions regarding such easement and the
operation, maintenance, and environmental compliance of such pumphouse and
piping.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01 Survival of
Representations and Warranties. The representations and warranties contained in
Article IV and Article V hereof shall survive the Closing for a period of two
years after Closing, except that the representations and warranties contained in
Sections 4.13 and 6.02 shall survive indefinitely.
11.02 Indemnification by Seller.
(a) Subject to the limitations of Section 11.02(b) and Section
11.05, Seller agrees to indemnify in full Buyer and its officers,
directors, employees, agents and stockholders (collectively, the "Buyer
Indemnified Parties") and hold them harmless against any loss,
liability, deficiency, damage, expense or cost (including reasonable
legal expenses), (collectively, "Losses"), which Buyer Indemnified
Parties may suffer, sustain or become subject to, as a result of (i)
any misrepresentation in any of the representations and warranties of
Seller contained in this Agreement or in any certificate or other
document delivered or to be delivered by or on behalf of Seller
pursuant to the terms of Section 8.01(j) of this Agreement, (ii) any
breach of, or failure to perform, any agreement of Seller contained in
this Agreement, or (iii) except as otherwise provided in this
Agreement, any "Claims" (as defined in Section 11.04(a) hereof) or
threatened Claims against Buyer arising out of the actions or inactions
of Seller with respect to the ownership or operation of the Assets or
the Business prior to the Closing (collectively, "Buyer Losses").
(b) Seller shall be liable to Buyer Indemnified Parties for
any Buyer Losses (i) only if Buyer or another Buyer Indemnified Party
delivers to Seller written notice, setting forth in reasonable detail
the identity, nature and amount of Buyer Losses related to such claim
or claims prior to the expiration of any applicable period specified in
Section 11.01, and (ii) only if the aggregate amount of all Buyer
Losses exceeds $150,000 (the "Basket Amount"), in which case Seller
shall be obligated to indemnify the Buyer Indemnified Parties only for
the excess of the aggregate amount of all such Buyer Losses over the
Basket Amount up to a total equal to the Purchase Price (the "Maximum
Amount"), which shall constitute the maximum aggregate liability of
Seller to Buyer under this Agreement; provided that any breach by
Seller of its covenants in Section 6.02 hereof shall not be subject to
the time limitation of clause (i) of this sentence or the Maximum
Amount limitation. A Buyer Indemnified Party's failure to provide the
detail required by clause (i) in the preceding sentence shall not
constitute either a breach of this Agreement by the Buyer Indemnified
Party or any basis for Seller to assert that the Buyer Indemnified
Party did not comply with the terms of this Section 11.02 sufficient to
cause the Buyer Indemnified Party to have waived its rights under this
Section 11.02, unless Seller demonstrates that its ability to defend
against any Claims with respect thereto has been materially adversely
affected.
11.03 Indemnification by Buyer.
(a) Subject to the limitations of Section 11.03(b), Buyer
agrees to indemnify in full Seller, and its officers, directors,
employees, agents and stockholders (collectively, the "Seller
Indemnified Parties") and hold them harmless against any Losses which
any of the Seller Indemnified Parties may suffer, sustain or become
subject to as a result of (i) any misrepresentation in any of the
representations and warranties of Buyer contained in this Agreement or
in any certificate or other document delivered or to be delivered by
Buyer pursuant to the terms of Section 8.02(f) of this Agreement, (ii)
any breach of, or failure to perform, any agreement of Buyer contained
in this Agreement, (iii) any Claims or threatened Claims against Seller
arising out of the actions or inactions of Buyer with respect to the
ownership or operation of the Assets or the Business after the Closing,
or (iv) any Claims or threatened Claims against Seller arising out of
any breach, violation or failure to comply by Buyer after the Closing
Date with CERCLA or any similar state "superfund" law, all as amended
from time to time (collectively, "Seller Losses").
(b) Buyer shall be liable to the Seller Indemnified Parties
for any Seller Losses (i) only if Seller or another Seller Indemnified
Party delivers to Buyer written notice, setting forth in reasonable
detail the identity, nature and amount of Seller Losses related to such
claim or claims prior to the expiration of any applicable period
specified in Section 11.01, and (ii) only if the aggregate amount of
all Seller Losses exceeds the Basket Amount, in which case Buyer shall
be obligated to indemnify the Seller Indemnified Parties only for the
excess of the aggregate amount of all such Seller Losses over the
Basket Amount up to the Maximum Amount, which shall constitute the
maximum aggregate liability of Buyer to Seller under this Agreement;
provided that, any obligation of Buyer to indemnify Seller pursuant to
clauses (ii), (iii) or (iv) of Section 11.03(a) shall not be subject to
the time limitation of clause (i) of this sentence, the Basket Amount
or the Maximum Amount limitation. A Seller Indemnified Party's failure
to provide the detail required by clause (i) in the preceding sentence
shall not constitute either a breach of this Agreement by the Seller
Indemnified Party or any basis for Buyer to assert that the Seller
Indemnified Party did not comply with the terms of this Section 11.03
sufficient to cause the Seller Indemnified Party to have waived its
rights under this Section 11.03, unless Buyer demonstrates that its
ability to defend against any Claims with respect thereto has been
materially adversely affected.
11.04 Method of Asserting Claims.
As used herein, an "Indemnified Party" shall refer to a "Buyer Indemnified
Party" or "Seller Indemnified Party," as applicable, the "Notifying Party" shall
refer to the party hereto whose Indemnified Parties are entitled to
indemnification hereunder, and the "Indemnifying Party" shall refer to the party
hereto obligated to indemnify such Notifying Party's Indemnified Parties.
(a) In the event that any of the Indemnified Parties is made a
defendant in or party to any action or proceeding, judicial or
administrative, instituted by any third party, the liability or the
costs or expenses of which are Buyer Losses or Seller Losses (any such
third party action or proceeding being referred to as a "Claim"), the
Notifying Party shall give the Indemnifying Party prompt notice
thereof. The failure to give such notice shall not affect any
Indemnified Party's ability to seek reimbursement unless such failure
has materially and adversely affected the Indemnifying Party's ability
to defend successfully a Claim. The Indemnifying Party shall be
entitled to contest and defend such Claim; provided that, the
Indemnifying Party (i) has a reasonable basis for concluding that such
defense may be successful and (ii) diligently contests and defends such
Claim. Notice of the intention so to contest and defend shall be given
by the Indemnifying Party to the Notifying Party within 20 business
days after the Notifying Party's notice of such Claim (but, in all
events, at least five business days prior to the date that an answer to
such Claim is due to be filed). Such contest and defense shall be
conducted by reputable attorneys employed by the Indemnifying Party.
The Notifying Party shall be entitled at any time, at its own cost and
expense (which expense shall not constitute a Loss unless the Notifying
Party reasonably determines that the Indemnifying Party is not
adequately representing or, because of a conflict of interest, may not
adequately represent, any interests of the Indemnified Parties, and
only to the extent that such expenses are reasonable), to participate
in such contest and defense and to be represented by attorneys of its
or their own choosing. If the Notifying Party elects to participate in
such defense, the Notifying Party will cooperate with the Indemnifying
Party in the conduct of such defense. Neither the Notifying Party nor
the Indemnifying Party may concede, settle or compromise any Claim
without the consent of the other party, which consent will not be
unreasonably withheld. Notwithstanding the foregoing, (i) if a Claim
seeks equitable relief or (ii) if the subject matter of a Claim relates
to the ongoing business of any of the Indemnified Parties, which Claim,
if decided against any of the Indemnified Parties, would materially
adversely affect the ongoing business or reputation of any of the
Indemnified Parties, then, in each such case, the Indemnified Parties
alone shall be entitled to contest, defend and settle such Claim in the
first instance and, if the Indemnified Parties do not contest, defend
or settle such Claim, the Indemnifying Party shall then have the right
to contest and defend (but not settle) such Claim.
(b) In the event any Indemnified Party should have a claim
against any Indemnifying Party that does not involve a Claim, the
Notifying Party shall deliver a notice of such claim with reasonable
promptness to the Indemnifying Party. If the Indemnifying Party
notifies the Notifying Party that it does not dispute the claim
described in such notice or fails to notify the Notifying Party within
30 days after delivery of such notice by the Notifying Party whether
the Indemnifying Party disputes the claim described in such notice, the
Buyer Loss or Seller Loss in the amount specified in the Notifying
Party's notice will be conclusively deemed a liability of the
Indemnifying Party and the Indemnifying Party shall pay the amount of
such Loss to the Indemnified Party on demand. If the Indemnifying Party
has timely disputed its Liability with respect to such claim, the Chief
Financial Officers of each of the Indemnifying Party and the Notifying
Party will proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through the negotiations of such Chief
Financial Officers within 60 days after the delivery of the Notifying
Party's notice of such claim, such dispute shall be resolved fully and
finally in Chicago, Illinois by an arbitrator selected pursuant to, and
an arbitration governed by, the Commercial Arbitration Rules of the
American Arbitration Association. The arbitrator shall resolve the
dispute within 30 days after selection and judgment upon the award
rendered by such arbitrator may be entered in any court of competent
jurisdiction.
(c) After the Closing, the rights set forth in this Article XI
shall be each party's sole and exclusive remedies against the other
party hereto for misrepresentations or breaches of covenants contained
in this Agreement. Notwithstanding the foregoing, nothing herein shall
prevent any of the Indemnified Parties from bringing an action based
upon allegations of fraud or other intentional breach of an obligation
of or with respect to either party in connection with this Agreement or
the transactions contemplated hereby. In the event such action is
brought, the prevailing party's attorneys' fees and costs shall be paid
by the nonprevailing party.
11.05 Cost-Sharing for Certain Conditions.
(a) For purposes of this Section 11.05, a "▇▇▇▇▇▇▇ Condition" means any
condition or event: (i) that existed prior to Closing and the existence of which
at the Closing constituted a breach of Seller's representations or warranties
contained in Section 4.06 (Title) or Section 4.13 (Environmental Matters) with
respect to the ▇▇▇▇▇▇▇ Facility; (ii) with respect to environmental matters, the
existence of which was a violation of applicable Environmental Law as in effect
at the Closing; (iii) which is not covered by Buyer's insurance; and (iv) which
was not disclosed to Buyer prior to the Closing.
(b) For purposes of this Section 11.05, a "ANFK Condition" means any
condition or event: (i) that existed prior to Closing and the existence of which
at the Closing constituted a breach of Seller's representations or warranties
contained in Section 4.13 (Environmental Matters) with respect to the Plants;
(ii) the existence of which was a violation of applicable Environmental Law as
in effect at the Closing; (iii) which is not covered by Buyer's insurance; and
(iv) which was not disclosed to Buyer prior to the Closing.
(c) Buyer shall be responsible for the first $250,000 of Losses
incurred with respect to ▇▇▇▇▇▇▇ Conditions and the first $350,000 of Losses
incurred with respect to ANFK Conditions. Losses with respect to ▇▇▇▇▇▇▇
Conditions beyond such initial $250,000 amount, and Losses with respect to ANFK
Conditions beyond such initial $350,000 amount, shall be shared equally by Buyer
and Seller, with each of Buyer and Seller paying one-half of such Losses.
(d) Buyer's rights and Seller's liability under this Section shall
cease with respect to any portion of real estate upon its sale or transfer by
Buyer to any third-party.
ARTICLE XII
MISCELLANEOUS
12.01 Press Releases and
Announcements. Prior to the Closing Date, neither party hereto shall issue any
press release (or make any other public announcement) related to this Agreement
or the transactions contemplated hereby or make any announcement to the
employees, customers or suppliers of Seller without prior written approval of
the other party hereto, except as may be necessary, in the opinion of counsel to
the party seeking to make disclosure, to comply with the requirements of this
Agreement or applicable law. If any such press release or public announcement is
so required, the party making such disclosure shall consult with the other party
prior to making such disclosure, and the parties shall use all reasonable
efforts, acting in good faith, to agree upon a text for such disclosure which is
satisfactory to both parties.
Buyer understands that Grand Metropolitan PLC, the indirect
sole stockholder of Seller ("Parent"), is a publicly held corporation subject to
disclosure rules and regulations of federal and foreign securities laws.
Similarly, Seller understands that Buyer is a publicly held corporation subject
to such disclosure rules and regulations. Each of Buyer (with respect to Seller)
and Seller (with respect to Buyer) acknowledges the right of the other public
company to disclose the transactions contemplated by this Agreement at any time
if such disclosure is deemed by such other public company, in its reasonable
opinion, to be required by law. In the event that either public company
determines to make such disclosure, Buyer or Seller, as the case may be, agrees
to notify the other party hereto of such public company's intention to make such
disclosure and to provide such other party with the text of the disclosure
sufficiently in advance of its release to the public to enable such other party
to have a reasonable opportunity to comment thereon.
12.02 Expenses. Except as otherwise expressly
provided for herein, Seller and Buyer will pay all of their own expenses
(including attorneys' and accountants' fees), in connection with the negotiation
of this Agreement, the performance of their respective obligations hereunder and
the consummation of the transactions contemplated by this Agreement (whether
consummated or not).
12.03 Further Assurances. Seller agrees
that, on and after the Closing Date, it shall take all appropriate action and
execute any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the provisions hereof,
including, without limitation, putting Buyer in possession and operating control
of, and vesting in Buyer title to (subject to Section 1.05), the Business and
the Assets.
12.04 Amendment and Waiver. This
Agreement may not be amended or waived except in a writing executed by the party
against which such amendment or waiver is sought to be enforced. No course of
dealing between or among any persons having any interest in this Agreement will
be deemed effective to modify or amend any part of this Agreement or any rights
or obligations of any person under or by reason of this Agreement.
12.05 Notices. All notices, demands and other
communications to be given or delivered under or by reason of the provisions of
this Agreement will be in writing and will be deemed to have been given when
personally delivered or three business days after being mailed by registered or
certified U.S. mail, return receipt requested, or when receipt is acknowledged,
if sent by facsimile, telecopy or other electronic transmission device. Notices,
demands and communications to Buyer and Seller will, unless another address is
specified in writing, be sent to the address indicated below:
Notices to Buyer: with a copy to:
Seneca Foods Corporation ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & Mugel, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Twelve Fountain Plaza
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Buffalo, New York 14202-2292
President and CEO Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Seller: with a copy to:
The Pillsbury Company ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President, Attention: ▇▇▇▇ ▇. ▇▇▇▇
Operations Finance Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
12.06 Assignment. This Agreement and all of the
provisions hereof will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, except that
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by either party hereto without the prior written consent of the
other party hereto.
12.07 Severability. Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
12.08 Complete Agreement. This Agreement,
the Exhibits and Schedules attached hereto, the Disclosure Schedule, the
Confidentiality Agreement and the other documents referred to herein contain the
complete agreement between the parties and supersede any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way.
12.09 Certain Definitions. Unless
otherwise specified, all monetary payments hereunder shall be made in United
States dollars, and all references to "dollars" or "$" shall refer to the
currency of the United States of America. All references to All references to
"knowledge" of Seller shall mean the actual knowledge of the officers of Seller
listed on Schedule 12.09.
12.10 Counterparts. This Agreement may be executed
in one or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same instrument.
12.11 Governing Law. The internal law, without
regard to conflicts of laws principles, of the State of Minnesota will govern
all questions concerning the construction, validity and interpretation of this
Agreement and the performance of the obligations imposed by this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Asset Purchase Agreement as of the day and year first above written.
SENECA FOODS CORPORATION
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its President
THE PILLSBURY COMPANY
By /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its Vice President-
Operations Finance