ASSET PURCHASE AGREEMENT
BY AND BETWEEN
NORTHLAND CRANBERRIES, INC.,
AND
SENECA FOODS CORPORATION
DECEMBER 2, 1998
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
1. PURCHASE AND SALE OF ASSETS................................................2
1.1. Assets to be Transferred..........................................2
1.2. Excluded Assets...................................................6
2. ASSUMPTION OF LIABILITIES..................................................7
2.1. Liabilities to be Assumed.........................................7
2.2. Liabilities Not to be Assumed.....................................8
3. PURCHASE PRICE - PAYMENT..................................................11
3.1. Purchase Price...................................................11
3.2. Payment of Purchase Price........................................11
3.3. Determination of Net Asset Value.................................13
3.4. Other Payments and Adjustments...................................17
3.5. Allocation of Purchase Price.....................................17
4. REPRESENTATIONS AND WARRANTIES OF COMPANY.................................17
4.1. Corporate........................................................18
4.2. Authority........................................................18
4.3. No Violation.....................................................18
4.4. Financial Statements.............................................19
4.5. Tax Matters......................................................19
4.6. Accounts Receivable..............................................20
4.7. Inventory........................................................20
4.8. Absence of Certain Changes.......................................20
4.9. Absence of Undisclosed Liabilities...............................21
4.10. No Litigation....................................................22
4.11. Compliance With Laws and Orders..................................22
4.12. Title to and Condition of Properties.............................24
4.13. Insurance........................................................26
4.14. Contracts and Commitments........................................27
4.15. Labor Matters....................................................29
4.16. Employee Benefit Plans...........................................29
4.17. Employment Compensation..........................................31
4.18. Trade Rights.....................................................31
4.19. Major Customers and Suppliers....................................32
4.20. Product Warranty and Product Liability...........................33
4.21. Affiliates'Relationships to Company..............................33
4.22. Sufficiency of Purchased Assets..................................34
4.23. Computer Software and Database...................................34
4.24. No Brokers or Finders............................................34
4.25. Disclosure.......................................................34
5. REPRESENTATIONS AND WARRANTIES OF BUYER...................................34
5.1. Corporate........................................................35
5.2. Authority........................................................35
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5.3. Northland Stock..................................................35
5.4. No Brokers or Finders............................................35
5.5. No Violation.....................................................35
5.6. SEC Filing; Financial Statements.................................36
5.7. Registration.....................................................36
5.8. No Brokers or Finders............................................36
5.9. Accuracy of Information..........................................36
5.10. Disclosure.......................................................37
6. EMPLOYEES - EMPLOYEE BENEFITS.............................................37
6.1. Buyer's Responsibilities; Transferred Employees..................37
6.2. Retained Responsibilities........................................39
6.3. Payroll Tax......................................................40
6.4. Termination Benefits.............................................40
6.5. Employee Benefit Plans...........................................40
6.6. No Third-Party Rights............................................41
7. OTHER MATTERS.............................................................41
7.1. Title Insurance..................................................41
7.2. Surveys 41
7.3. Environmental Audits.............................................42
7.4. Seneca License Agreement.........................................42
7.5. Nonsolicitation of Employees.....................................42
7.6. Confidential Information.........................................42
7.7. ▇▇▇▇▇▇▇ Sauerkraut Facility Lease and Shared Use Agreement.......43
7.8. HSR Act Filings..................................................43
7.9. ▇▇▇▇▇▇▇ Co-Packing Agreement.....................................43
7.10. Can Supply Agreement.............................................43
7.11. Stock Resale Agreement; Prospectus Supplement....................43
7.12. Product Liability Matters........................................43
7.13. Audit of Juice Division Financial Statements.....................44
7.14. Sales Tax Matters................................................44
7.15. Unemployment Compensation........................................44
7.16. Bulk Sales Compliance............................................44
7.17. Post-Closing Cooperation, Access and Records Retention...........44
7.18. Transition.......................................................45
7.19. Publix LUA Agreement.............................................45
7.20. Slotting, Credits, Adjustments, Offsets; Coupons.................46
8. FURTHER COVENANTS OF COMPANY..............................................47
8.1. Access to Information and Records................................47
8.2. Bank Accounts....................................................47
8.3. Conduct of Business Pending the Closing..........................47
8.4. Consents; Transfers of Permits and Licenses......................48
8.5. Other Action.....................................................48
8.6. Disclosure.......................................................49
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS...............................49
9.1. Representations and Warranties True on the Closing Date..........49
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9.2. Compliance With Agreement........................................49
9.3. Absence of Litigation............................................49
9.4. Consents and Approvals...........................................49
9.5. Title Insurance; Surveys.........................................49
9.6. Financing........................................................50
9.7. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Waiting Period.................................50
9.8. Section 1445 Affidavit...........................................50
9.9. Environmental Audit..............................................50
10. CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS.............................50
10.1. Representations and Warranties True on the Closing Date..........50
10.2. Compliance With Agreement........................................50
10.3. Absence of Litigation............................................51
10.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Waiting Period.................................51
10.5. Consents and Approvals...........................................51
11. INDEMNIFICATION...........................................................51
11.1. By Company.......................................................51
11.2. By Buyer ........................................................52
11.3. Indemnification of Third-Party Claims............................52
11.4. Payment .........................................................53
11.5. Indemnification for Environmental Matters........................53
11.6. Limitations on Indemnification...................................54
11.7. No Waiver........................................................55
12. CLOSING...................................................................55
12.1. Documents to be Delivered by Company.............................55
12.2. Documents to be Delivered by Buyer...............................57
13. TERMINATION...............................................................58
13.1. Right of Termination Without Breach..............................58
13.2. Termination for Breach...........................................58
14. RESOLUTION OF DISPUTES....................................................59
14.1. Arbitration......................................................59
14.2. Arbitrators......................................................60
14.3. Procedures; No Appeal............................................60
14.4. Authority........................................................60
14.5. Entry of Judgment................................................60
14.6. Confidentiality..................................................60
14.7. Continued Performance............................................60
14.8. Tolling. ........................................................60
15. MISCELLANEOUS.............................................................60
15.1. Disclosure Schedule..............................................61
15.2. Further Assurance................................................61
15.3. Disclosures and Announcements....................................61
15.4. Assignment; Parties in Interest..................................61
15.5. Equitable Relief.................................................61
15.6. Law Governing Agreement..........................................62
15.7. Amendment and Modification.......................................62
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15.8. Notice. .........................................................62
15.9. Expenses.........................................................63
15.10. Entire Agreement.................................................65
15.11. Counterparts.....................................................65
15.12. Jointly Drafted..................................................65
15.13. Headings.........................................................65
15.14. Certain Definitions and Glossary of Terms........................65
Disclosure Schedules
Schedule 1.1.(a) - Owned Real Property
Schedule 1.1.(b) - Leased Real Property
Schedule 1.1.(c) - Personal Property
Schedule 1.1.(d) - Personal Property Leases
Schedule 1.1.(e) - Trade Rights
Schedule 1.1.(f) - Contracts
Schedule 1.2.(f) - ▇▇▇▇▇▇▇ Sauerkraut Assets
Schedule 2.1.(a) - Final Closing Balance Sheet
Schedule 2.2.(h) - Environmental Liabilities
Schedule 4.1.(c) - Qualification
Schedule 4.1.(d) - Subsidiaries
Schedule 4.3 - No Violation (Company)
Schedule 4.4 - Financial Statements
Schedule 4.5.(b) - Tax Audits
Schedule 4.5.(a) - Tax Returns
Schedule 4.6 - Accounts Receivable
Schedule 4.7 - Inventory Off-Premises
Schedule 4.8 - Certain Changes
Schedule 4.9 - Off-Balance Sheet Liabilities
Schedule 4.10 - Litigation Matters
Schedule 4.11.(a) - Compliance with Laws and Orders
Schedule 4.11.(a)(i) - Nuisances and Tortious Interference
Schedule 4.11.(b) - Permits and Licenses
Schedule 4.11.(c) - Environmental Matters
Schedule 4.12.(a) - Liens
Schedule 4.12.(c) - Real Property
Schedule 4.13 - Insurance
Schedule 4.14.(c) - Purchase Commitments
Schedule 4.14.(d) - Sales and Commitments
Schedule 4.14.(e) - Contacts for Services
Schedule 4.14.(g) - Collective Bargaining Agreements
Schedule 4.14.(j) - Burdensome or Restrictive Agreement
Schedule 4.14.(k) - Material Contract
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Schedule 4.14.(l) - No Default
Schedule 4.15 (b) - Labor Disputes
Schedule 4.16.(a) - Employee Benefit Plans and Agreements
Schedule 4.17 - Employment Compensation
Schedule 4.19.(a) - Major Customers
Schedule 4.19.(c) - Sales Representatives
Schedule 4.20 - Product Warranty and Product Liability
Schedule 4.21.(a) - Contracts with Affiliates
Schedule 4.21.(b) - No Adverse Interests
Schedule 4.23 - Computer Software and Database
Schedule 5.5 - No Violation (Buyer)
Schedule 6.1(a) - Non-Union Employees
Schedule 6.1.(c) - Union Employee
Schedule 9.4 - Consents and Approvals
Schedule 7.19.(b) - Frozen LUA Agreement
EXHIBITS
Exhibit A - License Agreement
Exhibit B - Lease and Shared Use Agreement
Exhibit C - Contract Packing Agreement
Exhibit D - Can Supply Agreement
Exhibit E - Stock Resale Agreement
Exhibit F - Opinion Letter of Seller
Exhibit G - Opinion Letter of Buyer
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement") dated December 2, 1998, by
and between NORTHLAND CRANBERRIES, INC., a Wisconsin corporation ("Buyer"), and
SENECA FOODS CORPORATION, a New York corporation ("Company").
RECITALS
A. Company, through its Eastern Juice Division, is engaged in the
business of producing, packaging, marketing, distributing and selling, under the
Company's brand and customers' private labels, grape juice, apple juice and
cider products and other shelf-stable juices, drinks and concentrates and is
engaged in the co-packing of such products for other producers (the "Juice
Division").
B. The facilities of the Juice Division consist of the following:
1. A bottling plant and warehouse facility located in Mountain Home,
North Carolina (the "Mountain Home Plant");
2. A bottling plant and warehouse facility located in Dundee, New York
(the "Dundee Plant");
3. A bottling plant and warehouse facility located in ▇▇▇▇▇▇▇,
Wisconsin, [together with approximately 200 acres of neighboring,
undeveloped land] (the "▇▇▇▇▇▇▇ Plant");
4. A warehouse facility and distribution center located in Eau Claire,
Michigan (the "Eau Claire Distribution Center"); and
5. A bulk fruit receiving station located in Portland, New York (the
"Portland Receiving Station").
All of the above facilities are more particularly described on Schedule 1.1.(a)
and are hereinafter collectively referred to as the "Purchased Facilities").
C. Company has a Western Juice Division with processing plants and
storage and distribution facilities located in various locations in the State of
Washington (the "Western Facilities") which will not be sold to Buyer pursuant
to this Agreement. Company also has facilities located in Covington, Kentucky
and Buckley, Michigan, that are carried in its books as part of its Eastern
Juice Division which are not juice production facilities (the "Non-Juice
Facilities") and which will not be sold to Buyer pursuant to this Agreement.
D. A portion of the Juice Division products are produced, packaged and
distributed using the Western Facilities, which business, together with the
business of the Juice Division out of the Purchased Facilities, constitutes the
"Juice Division Business."
E. The ▇▇▇▇▇▇▇ Plant includes a sauerkraut processing plant (the
"▇▇▇▇▇▇▇ Sauerkraut Facility") that will be leased back to Company as provided
in this Agreement. Although the ▇▇▇▇▇▇▇ Sauerkraut Facility and certain of the
fixtures and equipment located therein will be part of the "Purchased Assets"
(as hereinafter defined), the business and operations of Company at the ▇▇▇▇▇▇▇
Sauerkraut Facility shall not be considered to be part of the Juice Division or
the Purchased Assets.
F. Buyer desires to purchase from Company, and Company desires to sell
to Buyer, the property, assets and business of the Juice Division.
G. Capitalized Terms not defined in the body of the text as they first
appear are defined in Section 15.14 hereof.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows.
1. PURCHASE AND SALE OF ASSETS
1.1. Assets to be Transferred. Subject to the terms and conditions of
this Agreement, on the Closing Date (as hereinafter defined), Company shall
sell, transfer, convey, assign, and deliver to Buyer (or upon Buyer's request,
to one or more wholly-owned subsidiaries or affiliates of Buyer as designated by
Buyer), free and clear of all liens and encumbrances (except as noted in
Schedule 4.12.(a) and Permitted Real Property Liens (as defined in Section
4.12.(a))), and Buyer shall purchase and accept all of Company's right, title
and interest in, to and under the business, rights, claims and assets (of every
kind, nature, character and description, whether real, personal or mixed,
whether tangible or intangible, whether accrued, contingent or otherwise, and
wherever situated) of its Juice Division, including all such business, rights,
claims and assets located at the Purchased Facilities, together with all rights
and privileges associated with such assets and with the Juice Division, other
than the Excluded Assets (as hereinafter defined) (collectively the "Purchased
Assets"). The Purchased Assets shall include, but not be limited to, the
following:
1.1.(a) Owned Real Property. All of the real property, including
fixtures, buildings, improvements, and all appurtenant rights owned by
Company described on Schedule 1.1.(a) as associated with the Purchased
Facilities (collectively, the "Owned Real Property").
1.1.(b) Leased Real Property All of the leases of real property
with respect to real property leased by Company (the "Real Property
Leases") described on Schedule 1.1.(b) with respect to the real property
described thereon (the "Leased Real Property").
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1.1.(c) Personal Property. All machinery, equipment, vehicles,
tools, supplies, spare parts, furniture and all other personal property
(other than personal property leased pursuant to Personal Property Leases
as hereinafter defined) owned, utilized or held for use by Company in
connection with the business operations of the Juice Division or the
operation or maintenance of the Purchased Facilities on the Closing Date
or located on the Owned Real Property including, without limitation, the
items of personal property described on Schedule 1.1(c) as associated
with the Purchased Facilities (but excluding any such personal property
located at the Western Facilities and used primarily in the operation and
maintenance of the Western Facilities and excluding all personal property
used for the Company's general and management functions which is not used
primarily in the operation or administration of the Juice Division).
1.1.(d) Inventory. All inventories of raw materials,
work-in-process and finished goods and service and repair parts, supplies
and components held for resale by the Juice Division, together with
related labels and packaging materials, that are located on or in transit
to the Owned Real Property on the Closing Date and all juice product
inventories carrying the Seneca brand or the brands which are included in
the Juice Division Trade Rights, together with related labels and
packaging materials, located at the Company's Prosser, Washington
facility (collectively the "Inventory").
1.1.(e) Personal Property Leases. All leases of machinery,
equipment, vehicles, furniture and other personal property leased by
Company described in Schedule 1.1.(e) (the "Personal Property Leases") as
being associated with any of the Purchased Facilities.
1.1.(f) Trade Rights. All the Company's interest in any trade
rights used or held for use in connection with ------------- the business
and operation of the Juice Division (the "Juice Division Trade Rights"),
other than the "SENECA" brand name and related trademark rights to be
licensed to Buyer as described in Sections 1.1.(k) and 7.5 hereof. As
used herein, the term Trade Rights" shall mean and include: (i) trademark
rights, business identifiers, trade dress, service marks, trade names,
and brand names; (ii) copyrights and all other rights associated
therewith and the underlying works of authorship; (iii) patents and all
proprietary rights associated therewith; (iv) contracts or agreements
granting any right, title, license or privilege under the intellectual
property rights of any third party; (v) inventions, mask works and mask
work registrations, know-how, discoveries, improvements, designs, trade
secrets, shop and royalty rights, employee covenants and agreements
respecting intellectual property and non-competition and all other types
of intellectual property; and (vi) all registrations of any of the
foregoing, all applications therefor, all goodwill associated with any of
the foregoing, and all claims for infringement or breach thereof. The
Juice Division Trade Rights include the Trade Rights described in
Schedule 1.1.(f) attached hereto.
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1.1.(g) Contracts
(i) Contracts in General. All Company's rights in, to and
under all contracts, purchase orders and sales orders (hereinafter
"Contracts") of Company pertaining exclusively or primarily to the
Juice Division, including without limitation the Contracts
described on Schedule 1.1.(g). To the extent that any Contract for
which assignment to Buyer is provided herein is not assignable
without the consent of another party, this Agreement shall not
constitute an assignment or an attempted assignment thereof if
such assignment or attempted assignment would constitute a breach
thereof. Company and Buyer agree to use their "Reasonable Best
Efforts" to obtain the consent of such other party to the
assignment of any such Contract to Buyer in all cases in which
such consent is or may be required for such assignment. Until such
consent is obtained or if it is not obtained, Company shall
cooperate with Buyer in any reasonable arrangement designed to
provide Buyer with the benefits under such relevant contract,
including appointing Buyer to act as its agent to perform all of
Company's obligations under such relevant Contract, 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 Company against any other person arising out of
the breach or cancellation thereof by such other person or
otherwise; provided that to the extent that Buyer requires Company
to undertake any services or take any action in furtherance of the
performance of such Contract, 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; and provided further that, if
and to the extent that such an agreement or arrangement cannot be
made, Buyer, upon notice to Company, shall have no obligation
pursuant to Section 2.1 or otherwise with respect to any such
Contract (other than the Westfield Maid Cooperative Agreement
described in Section 1.1.(g)(ii)) and any such Contract shall not
be deemed to be a Purchased Asset hereunder. The "Purchase Price"
(as defined in Section 3.1) shall not be reduced by reason of the
inability to transfer (by assignment, subcontract or otherwise) to
Buyer any such Contract 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 subsection.
(ii) Westfield Maid Cooperative Agreement. All the
Company's rights in, to and under the Marketing Agreement between
Company and Westfield Maid Cooperative, Inc. ("Westfield Maid")
dated August 1, 1972 (the "Westfield Maid Agreement"). This
Agreement shall not constitute an assignment or an attempted
assignment of the Westfield Maid Agreement to the extent such
assignment or attempted assignment would constitute a breach
thereof. Company and Buyer agree to use their Reasonable Best
Efforts (without any requirement on the part of Buyer to pay any
money or
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to agree to any change in the terms of such Agreement) to obtain
the consent of Westfield Maid to the assignment of the Westfield
Maid Agreement to Buyer and to obtain the release of Company from
any liability under such Agreement following such assignment. If
the consent of Westfield Maid is obtained, but the parties are not
able to obtain a release of Company from Westfield Maid, Buyer
will agree to indemnify and hold Company harmless for and from any
liability that may accrue to Company under the Westfield Maid
Agreement following its assignment to Buyer. In the event the
consent of Westfield Maid to such assignment is not obtained,
Company and Buyer shall enter into an agreement providing for the
pressing of grapes at the Purchased Facilities by Buyer in order
to permit Company to fulfill its obligations under the Westfield
Maid Agreement and such other reasonable agreements and
arrangements designed to provide for the transfer of the
obligations intended to be assumed and the benefits intended to be
assigned to Buyer under such agreement, including the enforcement
at the cost and for the account of Buyer of any and all rights of
Company against Westfield Maid arising out of the breach or
cancellation thereof by Westfield Maid.
1.1.(h) Computer Software. All computer source codes, programs and
other software of Company, if any, used exclusively in connection with
the operations of the Juice Division at any of the Purchased Facilities,
including all machine readable code, printed listings of code,
documentation and related property and information of the Juice Division.
1.1.(i) Literature. All sales literature, promotional literature,
catalogs and similar materials of Company as associated with the Juice
Division.
1.1.(j) Licenses; Permits. All transferable licenses, permits,
approvals, certifications and listings of Company as associated with the
Purchased Facilities or the Juice Division.
1.1.(k) Seneca License. A sole and exclusive, royalty-free,
99-year license to use the Seneca trademark in association with juice,
juice beverages, cranberry sauce, dried cranberries, retail and food
service concentrates (shelf-stable and frozen) for juice and juice
beverages, to be granted pursuant to the license agreement described in
Section 7.4 hereof, provided that Company shall retain the right to use
the Seneca trademarks in connection with all other activities, products
and product groups not listed above, including without limitation those
trademarks listed in Schedule 1.2.(d).
1.1.(l) General Intangibles. All goodwill, all prepaid expenses,
advances and deposits, all causes of action arising out of occurrences
before or after the Closing, and all other intangible rights and assets
of the Company as associated with the Purchased Facilities (other than
the ▇▇▇▇▇▇▇ Sauerkraut Facility and the goodwill and other rights
associated with Company's sauerkraut operations therein) or the Juice
Division.
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1.1.(m) Records and Files. All records and files of Company of
every kind located at the Purchased Facilities (except records and files
pertaining primarily to the ▇▇▇▇▇▇▇ Sauerkraut Facility and Company's
Sauerkraut operations therein) on the Closing Date or relating
specifically to the aforementioned assets or the Juice Division,
including, without limitation, transferring invoices, customer and vendor
lists, engineering design plans, blueprints and as-built plans,
specifications, designs, drawings, operating, safety and maintenance
manuals, Transferring Employee Records, and operating and marketing
plans, and all other documents, tapes, discs, programs or other
embodiments of information of the Juice Division.
1.2. Excluded Assets. The provisions of Section 1.1 notwithstanding,
Company shall not sell, transfer, assign, convey or deliver to Buyer, and Buyer
will not purchase or accept any of the assets of Company not constituting the
assets and business of the Juice Division and the following assets, whether or
not associated with the Juice Division, (collectively the "Excluded Assets"):
1.2.(a) Cash and Cash Equivalents. All cash and cash equivalents
and bank deposits.
1.2.(b) Investments. Certificates of deposit, shares of stock,
securities, bonds, debentures, evidences of indebtedness, interests in
joint ventures, partnership, limited liability companies and other
entities.
1.2.(c) Notes and Accounts Receivable. All notes, drafts and
accounts receivable of Company or the Juice Division.
1.2.(d) Names. The name "Seneca" "Seneca Foods Corporation", or
any related or similar names logos, designs and trademarks using the
Seneca names, except to the extent the rights to such names are licensed
pursuant to the license described in Sections 1.1.(k) and 7.4 hereof.
Among other things, items excluded pursuant to this Section 1.2.(d)
include the right to use the name, brand and logos of "Seneca" and Seneca
Foods Corporation in the business of industrial juice concentrates,
applesauce, fruit chips and vegetable products.
1.2.(e) Western Facilities and Non-Juice Facilities. The real
property, personal property, inventory, contracts, records and other
properties and assets located on or associated solely with the Western
Facilities and the Non-Juice Facilities.
1.2.(f) ▇▇▇▇▇▇▇ Sauerkraut Assets. The machinery, equipment,
tools, supplies and spare parts, other personal property located in the
▇▇▇▇▇▇▇ Sauerkraut Facility to be leased back to Company pursuant to
Section 7.7 hereof and associated with the vegetable and sauerkraut
operations of Company located therein, but only to the extent
specifically described on Schedule 1.2.(f) (the "▇▇▇▇▇▇▇ Sauerkraut
Assets").
1.2.(g) Consideration. The consideration delivered by Buyer to
Company pursuant to this Agreement and the rights of Company under this
Agreement and under the documents to be delivered to Company at the
Closing.
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1.2.(h) Tax Credits and Records. Federal, state and local income
and franchise tax credits and tax refund claims and associated returns
and records. Buyer shall have reasonable access to such returns and
records and may make excerpts therefrom and copies thereof.
1.2.(i) Corporate Franchise. Company's franchise to be a
corporation, its certificate of incorporation, corporate seal, stock
books, minute books and other corporate records having principally to do
with the corporate organization and capitalization of Company. Buyer
shall have reasonable access to such books and records and may make
excerpts therefrom and copies thereof as to items associated with the
Juice Division or the transactions effectuated pursuant to this
Agreement.
1.2.(j) Obligations of Affiliates. Notes, drafts, accounts
receivable or other obligations for the payment of money, made or owed by
any Affiliate of Company. For purposes of this Agreement, the term
"Affiliate" shall mean and include all directors and officers of Company;
the spouse of any such person; any person who would be the heir or
descendant of any such person if he or she were not living (not more
remote than first cousin) and any entity in which any of the foregoing
has a direct or indirect interest (except through ownership of less than
5% of the outstanding shares of any entity whose securities are listed on
a national securities exchange or traded in the national over-the-counter
market).
1.2.(k) Personnel Records. All personnel records other than
Transferring Employee Records, provided that the Company may, in its
discretion, retain copies of any or all of the Transferring Employee
Records.
1.2.(l) Non-Valued Inventory. All Inventory of Seller which is
assigned no value in the determination of Net Asset Value pursuant to the
procedures set forth in Sections 3.3.(c) and 3.3.(c)(v)(2) hereof.
2. ASSUMPTION OF LIABILITIES
2.1. Liabilities to be Assumed. As used in this Agreement, the term
"Liability" shall mean and include any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown, asserted or
unasserted, liquidated or unliquidated, secured or unsecured. Subject to the
terms and conditions of this Agreement, on the Closing Date, Buyer shall assume
and agree to perform and discharge the following, and only the following,
Liabilities of the Juice Division (collectively the "Assumed Liabilities"):
2.1.(a) Final Closing Balance Sheet Current Liabilities. The
accounts payable and accrued current Liabilities (excluding Debt
Obligations) of the Juice Division reflected or reserved against on the
Final Closing Balance Sheet (as hereinafter defined), but only in the
amounts so reflected or reserved. By way of illustration, the Final
Closing Balance Sheet Juice Division current Liabilities under this
Section 2.1.(a) if the Closing were as of June 27, 1998, would have been
$11,505,000 as shown on Schedule 2.1.(a).
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2.1.(b) Contractual Liabilities. Company's Liabilities arising
from and after the Closing Date under and pursuant to the following
Contracts:
(i) All Contracts described in any of Schedules 1.1.(b),
l.1.(e), 1.1.(g) or 4.14.(l); and
(ii) Every Contract entered into by Company in the ordinary
course of the Juice Division business following the date of this
Agreement which does not involve consideration or other
expenditure by Company payable or performable on or after the
Closing Date in excess of $50,000 or performance over a period of
more than six months. Contractual Liabilities which are not
otherwise assumable pursuant to the foregoing sentence shall be
"Assumed Contracts" and shall be assumed by Buyer if entered into
after consultation and written consent by Buyer,
except, in each case, to the extent the liabilities and obligations under
such Contracts, but for a breach or default by Company, would have been
paid, performed or otherwise discharged on or prior to the Closing Date
or to the extent that the same arise out of any such breach or default or
out of any event which, after the giving of notice, would constitute a
default. The Contracts described in subsections 2.1.(b)(i) and (ii) above
are hereinafter collectively described as the "Assumed Contracts."
2.1.(c) Liabilities Under Permits and Licenses. Company's
Liabilities arising from and after the Closing Date under any
transferable permits or licenses listed in Schedule 4.11.(b) and assigned
to Buyer at the Closing.
2.1.(d) Transferred Employees. All liabilities and obligations
with respect to accrued compensation, benefits, vacation and holiday pay
and other rights and entitlements under Company's written practices and
procedures due to the Transferred Employees and Transferred Union
Employees of Company to be employed at the Purchased Facilities after the
Closing Date for which the Buyer is responsible pursuant to Section 6.1.
2.1.(e) Mountain Home Deed of Trust. Company's Liabilities under
the promissory note secured by deed of trust for the real property
located in Mountain Home, North Carolina, a copy of which is attached
hereto as Schedule 2.1.(e).
It is understood and agreed that nothing in this Section 2.1 shall constitute a
waiver or release of any claims arising out of the contractual relationships
between Company and Buyer.
2.2. Liabilities Not to be Assumed. Except as and to the extent
specifically set forth in Section 2.1, Buyer is not assuming any Liabilities of
Company and all such Liabilities shall be and remain the responsibility of
Company, whether or not relating to the Juice Division or the Purchased Assets.
Notwithstanding the provisions of Section 2.1, Buyer is not assuming and Company
shall not be deemed to have transferred to Buyer the following Liabilities of
Company (the "Excluded Liabilities"):
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2.2.(a) Excluded Assets. Any Liabilities or obligations of Company
in respect of any Excluded Assets or other assets of Company which are
not Purchased Assets;
2.2.(b) Certain Contracts. The Liabilities of Company under and
pursuant to the following contracts and leases:
(i) 1999 Business Agreement dated June 19, 1998, between
Company and Valassis Communications, Inc.
(ii) Collective Bargaining Agreement between Company and
Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy
Employees and Helpers Union Local 695 effective through January
15, 1999 (the "Union Contract") (except as otherwise provided in
Section 6.1(c)).
2.2.(c) Taxes Arising from Transaction. Any taxes applicable to,
imposed upon or arising out of the sale or transfer of the Purchased
Assets to Buyer and the other transactions contemplated by this
Agreement, including but not limited to any income, transfer, sales, use,
gross receipts or documentary stamp taxes, but excluding any North
Carolina Highway Use Taxes on vehicles purchased by Buyer (which shall be
paid by Buyer).
2.2.(d) Income and Franchise Taxes. Any Liability of Company for
Federal income taxes and any state or local income, profit or franchise
taxes (and any penalties or interest due on account thereof).
2.2.(e) Insured Claims. Any Liability of Company insured against,
to the extent such Liability is or will be paid by an insurer.
2.2.(f) Product Liability. Any Liability of Company arising out of
or in any way relating to or resulting from any product manufactured,
assembled or sold prior to the Closing Date (including any Liability of
Company for claims made for injury to person, damage to property or other
damage, whether made in product liability, tort, breach of warranty or
otherwise).
2.2.(g) Debt Obligations. Any long or short-term debt obligations
of Company for money borrowed, including overdraft and advances ("Debt
Obligations").
2.2.(h) Environmental Liabilities. Any Liabilities arising in
connection with any Environmental Action (as defined below) where any
such Environmental Action or Liability (i) is related in any way either
to any Purchased Asset or Purchased Facility or to Company's or any
previous owner's or operator's ownership, operation or occupancy of the
Juice Division or the Purchased Facilities and Purchased Assets being
transferred to Buyer, or to any other assets of Company, and (ii) in
whole or in part occurred, existed, arose out of conditions or
circumstances that existed, or was caused on or before the Closing Date,
whether or not known to Company, including, without
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limitation, any Liability relating to the matters described on Schedule
2.2.(h). As used herein, "Environmental Action" means any pollution,
threat to the environment, or exposure to, or manufacture, processing,
distribution, use, treatment, generation, existence, transport, handling,
holding, removal, abatement, remediation, recycling, reclamation,
management, presence, disposal, emission, discharge, storage, escape,
seepage, leakage or release of, or threatened release of, any Hazardous
Substances (as defined below) in any location. As used herein "Hazardous
Substance" means pollutants, contaminants, chemicals, compounds or
industrial, toxic, hazardous or petroleum or petroleum-based substances
or wastes, waste waters or byproducts, including without limitation
asbestos, polychlorinated biphenyls or urea formaldehyde, and any other
substances subject to regulation under any Environmental Law (as defined
in Section 4.11.(c)). The Liabilities described in this Section 2.2.(h)
include, without limitation, Liabilities arising under any applicable
federal or state Environmental Law, including, without limitation, the
Federal Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 ▇.▇.▇.▇▇. 9601 et. seq. -- --- ("CERCLA"), but shall
not include any Liability described in this Section 2.2.(h) arising after
the Closing Date relating to matters, substances or conditions which, as
at the Closing Date, do not constitute a violation of any Environmental
Law or do not require remediation or corrective action under any
Environmental Law.
2.2.(i) Litigation Matters. Any Liability of Company with respect
to any action, suit, proceeding, arbitration, investigation or inquiry,
whether civil, criminal or administrative ("Litigation"), whether or not
described in Schedule 4.10.
2.2.(j) Infringements. Any Liability of Company to a third party
for infringement or misappropriation of such third party's Trade Rights.
2.2.(k) Transaction Expenses. All Liabilities incurred by Company
in connection with this Agreement and the transactions contemplated
herein.
2.2.(l) Liability For Breach. Liabilities of Company for any
breach or failure to perform any of Company's covenants and agreements
contained in, or made pursuant to, this Agreement, or, prior to the
Closing, any other contract, whether or not assumed hereunder, including
breach arising from assignment of contracts hereunder without consent of
third parties.
2.2.(m) Liabilities to Affiliates. Liabilities of Company to its
present or former Affiliates, except obligations for compensation for
services rendered as an employee pursuant to plans or practices disclosed
in Schedule 4.16.(a).
2.2.(n) Violation of Laws or Orders. Liabilities of Company for
any violation of or failure to comply with any statute, law, ordinance,
rule or regulation (collectively, "Laws") or any order, writ, injunction,
judgment, plan or decree (collectively, "Orders") of any court,
arbitrator, department, commission, board, bureau, agency, authority,
instrumentality or other body, whether federal, state, municipal, foreign
or other (collectively, "Government Entities").
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2.2.(o) ▇▇▇▇▇▇▇ Sauerkraut Facility. Any liabilities, obligations
or responsibilities relating to (a) Company's property, equipment or
machinery within or associated with the ▇▇▇▇▇▇▇ Sauerkraut Facility to be
leased back to Company pursuant to Section 7.7 hereof or (b) any of
Company's operations on, or usage of, the ▇▇▇▇▇▇▇ Sauerkraut Facility
including, without limitation, liabilities, obligations or
responsibilities arising as a result of or in connection with (i) any
violation or alleged violation of any Environmental Law or (ii) loss of
life, injury to persons or property or damage to natural resources.
2.2.(p) Benefit Plan Liabilities. Except as specifically provided
in Section 6.1 hereof, Liabilities obligations or responsibilities of
Company relating to any Employee Plan/Agreement (as defined in Section
4.16.(a) hereof), or to any "employee pension benefit plan," as defined
in Section 3(2) of ERISA, whether or not terminated, established,
maintained or contributed to by Company or any of its ERISA Affiliates at
any time or to which Company or any of its ERISA Affiliates are or have
been obligated to contribute to at any time ("ERISA Affiliate Plan");
including any liability (i) to the Pension Benefit Guaranty Corporation
under Title IV of ERISA; (ii) relating to a multiemployer plan; (iii)
with respect to non-compliance with COBRA or HIPAA; (iv) with respect to
noncompliance with any other applicable provision of the Code or ERISA or
any other applicable laws; or (v) with respect to any suit, proceeding or
claim which is brought against the Buyer with respect to any Employee
Plan/Agreement or ERISA Affiliate Plan, against any Employee
Plan/Agreement or ERISA Affiliate Plan, or against any fiduciary or
former fiduciary of any such Employee Plan/Agreement or ERISA Affiliate
Plan; or (vi) for claims incurred under or in connection with Company's
health plans prior to the Closing Date (whether or not reported); and
2.2.(q) Termination Liabilities. Liabilities, obligations or
responsibilities of Company relating to the employment or termination of
employment by Company of any individual (including, but not limited to,
any employee of Company), except as expressly assumed by the Buyer
pursuant to Section 6.1 hereof.
2.2.(r) Workers Compensation. Liabilities or obligations of
Company arising in connection with or relating to incidents relating to
matters covered under workers compensation laws occurring prior to the
Closing Date.
3. PURCHASE PRICE - PAYMENT
3.1. Purchase Price. The purchase price (the "Purchase Price") for the
Purchased Assets shall be $7,000,000 plus (i) the Net Asset Value and (ii) the
assumption of the Assumed Liabilities.
3.2. Payment of Purchase Price. The Purchase Price shall be paid by Buyer
as follows:
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3.2.(a) Assumption of Liabilities. At the Closing, Buyer shall
deliver to Company such documents and instruments as are reasonably
required to evidence the assumption of the Assumed Liabilities.
3.2.(b) Cash and Stock to Company. At the Closing, Buyer (i) shall
deliver to Company cash in an amount equal to the sum of $4,000,000 plus
the Preliminary Net Asset Value, and shall deliver and issue in Company's
name that number of shares of Buyer's Class A Common Stock, $.01 par
value ("Northland Stock") that is equal to $3,000,000 divided by the
"Northland Stock Value" as of the Closing Date.
3.2.(c) Adjustment of Purchase Price
(i) Interim Adjustment. In the event that the Closing Date
is prior to January 5, 1999, on January 9, 1999 either (A) Company
shall pay to Buyer the amount of cash, if any, by which the amount
paid to Company on the Closing Date exceeds the sum of (I) the Net
Asset Value as reflected on the Interim Closing Balance Sheet, and
(II) $4,000,000, with no interest; or (B) Buyer shall pay to
Company the amount, if any, by which the sum of (I) the Net Asset
Value, as reflected on the Interim Closing Balance Sheet, and (B)
$4,000,000 exceeds the amount of cash paid to Company on the
Closing Date, with no interest. The amount, if any, paid by
Company or Buyer pursuant to this Subsection 3.2.(c)(i) shall be
referred to herein as the "Interim Adjustment." In the event that
the Closing Date is on or after January 5, 1999, there shall be no
Interim Adjustment.
(ii) Final Adjustment. On or before the fifth business day
following the determination of the Final Closing Balance Sheet (as
hereinafter defined) (such date being hereinafter referred to as
the "Settlement Date"), either (A) Company shall pay to Buyer the
amount, if any, by which the sum of the amount paid in cash to
Company on the Closing Date plus or minus, as the case may be, the
amount of the Interim Adjustment, exceeds the sum of (I) the Net
Asset Value, as reflected on the Final Closing Balance Sheet, and
(II) $4,000,000, together with interest on the amount being paid
from the Closing Date to the date of the payment at the rate of
six percent per annum; or (B) Buyer shall pay to Company the
amount, if any, by which the sum of (I) the Net Asset Value, as
reflected on the Final Closing Balance Sheet, and (II) $4,000,000
exceeds the sum of amount paid in cash to the Company on the
Closing Date, plus or minus, as the case may be, the amount of the
Interim Adjustment, together with interest on the amount being
paid from the Closing Date to the date of payment at the rate of
six percent per annum.
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3.2.(d) Northland Stock Value. For purposes of this Agreement,
Northland Stock Value shall mean the price $0.50 under the closing bid
price of Northland Stock on the National Association of Securities
Dealers Automated Quotations System ("Nasdaq") exchange on the Closing
Date.
3.2.(e) Method of Payment. All payments of cash under this Section
3.2 shall be made by wire transfer of immediately available funds to an
account designated by the recipient not less than 48 hours prior to the
time for payment specified herein.
3.3. Determination of Net Asset Value
3.3.(a) Definition of Net Asset Value. The term "Net Asset Value "
shall mean the dollar amount by which the net book value of the Purchased
Assets exceeds the net book value of the Assumed Liabilities, both to the
extent as reflected in the Final Closing Balance Sheet, Interim Closing
Balance Sheet or Preliminary Closing Balance Sheet, as applicable. Only
Purchased Assets and Assumed Liabilities shall be considered in the
calculation of Net Asset Value; provided that no value shall be assigned
to any of the Purchased Assets (or allocable part thereof) constituting
the "Exclusive Premises" for the ▇▇▇▇▇▇▇ Sauerkraut Facility under the
lease to be entered into pursuant to Section 7.7 hereof.
3.3.(b) Preliminary and Interim Closing Balance Sheets
(i) Preliminary Closing Balance Sheet. For purposes of
determining the Net Asset Value and the Purchase Price payable by
the Buyer at the Closing, not less than five business days prior
to the Closing Date, Company shall, in consultation with the
Buyer, prepare and deliver to Buyer a balance sheet of the Juice
Division as of the close of business November 21, 1998 which shall
represent Company's reasonable estimate of the Final Closing
Balance Sheet had Closing occurred on November 22, 1998 provided
that if the Closing Date shall be on or after January 5, 1999, the
Company shall deliver a balance sheet of the Juice Division as of
the close of business on December 26, 1998; such balance sheet to
be in form and detail identical to, and in its accounting
principles and policies consistent in every respect with, the
Recent Balance Sheet as defined in Section 4.4 hereof and
accompanied by schedules setting forth in reasonable detail all
assets and liabilities included therein. Such balance sheet or the
accompanying schedules shall contain sufficient detail of the
Purchased Assets and Assumed Liabilities for the determination of
Net Asset Value. In the event Buyer shall object to any of the
information set forth on the balance sheet or accompanying
schedules as presented by Company, the parties shall negotiate in
good faith and agree on appropriate adjustments to the end that
such balance sheet and accompanying schedules reflect a reasonable
estimate of the Final Closing Balance Sheet and Net Asset Value
(the estimated balance sheet as finally determined by the parties
pursuant to this subsection is herein referred to as the
"Preliminary Closing Balance
Sheet"). In connection with the determination of the Preliminary
Closing Balance Sheet, Company shall provide to Buyer such
information and detail as Buyer shall reasonably request.
(ii) Interim Closing Balance Sheet. In the event that the
Closing Date is prior to January 5, 1999, Company shall prepare
and deliver to Buyer, on or prior to January 6, 1999, a balance
sheet of the Juice Division as of the close of business on
December 26, 1998, which shall represent Company's reasonable
estimate of the Final Closing Balance Sheet had Closing occurred
on December 27, 1998, such balance sheet to be prepared following
the same procedures and in accordance with the criteria applicable
to the Preliminary Closing Balance Sheet in Section 3.2.(b)(i)
(the "Interim Closing Balance Sheet").
3.3.(c) Final Closing Balance Sheet. The balance sheet of Company,
prepared as of the Effective Time and certified by Deloitte & Touche LLP,
Buyer's independent accountants ("Buyer's Accountants"), shall be
prepared as follows:
(i) Within 45 days after the Closing Date, Buyer shall
deliver to Company a balance sheet of the Juice Division as of the
close of business on the business day immediately prior to the
Closing Date (hereinafter the "Effective Time"), prepared in
accordance with generally accepted accounting principles from the
books and records of Company, on a basis consistent with the
generally accepted accounting principles theretofore followed by
Company in the preparation of the Recent Balance Sheet and in
accordance with this Section 3.3, and fairly presenting the
financial position of Juice Division as of the Effective Time. The
balance sheet shall be accompanied by detailed schedules of the
Purchased Assets and Assumed Liabilities and by a report of
Buyer's Accountants (A) setting forth the amount of Net Asset
Value (as defined above) reflected in the balance sheet, (B)
stating that (1) the examination of the balance sheet has been
made in accordance with generally accepted auditing standards and
(2) the balance sheet has been prepared in accordance with
generally accepted accounting principles, on a basis consistent
with the accounting principles theretofore followed by Company,
except as otherwise provided in this Section 3.3, and (C) setting
forth the amount of any adjustment to the Purchase Price to be
paid and by whom pursuant to Section 3.2.(c) hereof.
(ii) Within 30 days following the delivery of the balance
sheet referred to in (i) above, Company or its independent
accountants ("Company's Accountants") may object to any of the
information contained in said balance sheet or accompanying
schedules which could affect the necessity or amount of any
payment by Buyer or Company pursuant to Section 3.2.(c) hereof.
Any such objection shall be made in writing and shall state
Company's determination of the amount of the Net Asset Value.
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(iii) In the event of a dispute or disagreement relating to
the balance sheet or schedules which Buyer and Company are unable
to resolve, either party may elect to have all such disputes or
disagreements resolved by an accounting firm of nationally
recognized standing (the "Third Accounting Firm") to be mutually
selected by Company and Buyer or, if no agreement is reached, by
Company's Accountants and Buyer's Accountants. The Third
Accounting Firm shall make a resolution of the balance sheet of
the Juice Division as of the Effective Time and the calculation of
Net Working Capital Adjustment, which shall be final and binding
for purposes of this Article 3. The Third Accounting Firm shall be
instructed to use every reasonable effort to perform its services
within 15 days of submission of the balance sheet to it and, in
any case, as soon as practicable after such submission. The fees
and expenses for the services of the Third Accounting Firm shall
be shared by Buyer and Company as follows:
Company shall pay a percentage of such fees and expenses
equal to A/(A+B) and Buyer shall pay a percentage of such fees and expenses
equal to B/(A+B), where A is equal to the absolute value of the difference (in
dollars) between Net Asset Value as finally determined by the Third Accounting
Firm and Net Asset Value as reflected in the objection prepared and delivered by
Company in accordance with Section 3.3.(c)(ii), and B is equal to the absolute
value of the difference (in dollars) between the Net Asset Value as finally
determined by the Third Accounting Firm and Net Asset Value as reflected in the
report prepared and delivered by Buyer in accordance with Section 3.3.(c)(i). As
used in this Agreement, the term "Final Closing Balance Sheet" shall mean the
balance sheet of the Juice Division as of the Effective Time as finally
determined for purposes of this Article 3, whether by acquiescence of Company in
the figures supplied by Buyer in accordance with Section 3.3.(c)(i), by
negotiation and agreement of the parties or by the Third Accounting Firm in
accordance with Section 3.3.(c)(iii).
(iv) Buyer agrees to permit Company, Company's Accountants,
and their respective representatives, during normal business
hours, to have reasonable access to, and to examine and make
copies of, all books and records of the Juice Division, including
but not limited to the books, records, schedules, work papers and
audit programs of Buyer and Buyer's Accountants and access to
representatives of Buyer's Accountants, which documents and access
are necessary to review the balance sheet delivered by Buyer in
accordance with Section 3.3.(c)(i). In addition, Company's
Accountants shall have the opportunity to observe the taking of
the inventory in connection with the preparation of such balance
sheet. Company similarly agrees to permit Buyer's Accountants and
their respective representatives, during normal business hours, to
have reasonable access to any books and records of Company which
do not constitute Purchased Assets, in order to enable them to
prepare such balance sheet.
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(v) Notwithstanding any provision contained herein
requiring that the Final Closing Balance Sheet be prepared in a
manner consistent with Company's past practices or in accordance
with generally accepted accounting principles, the Final Closing
Balance Sheet shall be prepared utilizing the following criteria:
(1) Prepaid expenses shall be valued at the net book
value thereof, provided that (i) there shall be no value
assigned to slotting fees or advances paid more than 30
days prior to Closing or paid pursuant to proposals made
after August 26, 1998 for which the prior written consent
of Buyer was not obtained and (ii) there shall be no value
assigned to advances pursuant to the LUA Agreements
described in Section 7.19 hereof.
(2) Inventory shall be valued in accordance with the
following standards: A physical inventory shall be taken by
Buyer's Accountants as of the Effective Time.
Inventory which relates to discontinued products or
which is otherwise obsolete shall not be valued.
Inventory (other than (i) cranberry concentrates,
(ii) the Inventory listed and described on Schedule
3.3.(c) or (iii) as otherwise agreed to in writing
by the parties) which represents more than six
months projected requirements based on the prior 12
months' usage of any item of inventory shall not be
valued.
Only inventory of first quality and good and usable
or saleable in the ordinary course of business shall
be valued, provided that all cranberry concentrates
of first quality shall be valued at Company's cost.
Except to the extent otherwise provided for herein,
inventory shall be valued in accordance with
Company's past practices at Company's cost.
(3) All accrued liabilities (which shall exclude
compensation and all related expenses to be paid by Company
at Closing pursuant to Section 3.4) shall be sufficient for
the payment in full of the liabilities to which they relate
and accrued expenses shall reflect all accruals of a
character that would be reflected in a manner consistent
with a year-end balance sheet.
(4) No insurance claim relating to damage to or full
or partial loss of any property occurring after the date of
the Recent Balance Sheet
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shall be valued in excess of the book value (net of
accumulated depreciation) of such property as reflected in
the Recent Balance Sheet.
(5) Deferred costs, deferred taxes and any
intangible assets of the Juice Division shall not be
valued.
3.4. Other Payments and Adjustments. The amount of wages and other
remuneration due in respect of periods to and including the Effective Time to
employees of Company and the amount of bonuses due to such employees for all
such periods will be paid by Company directly to such employees. Except to the
extent taken into account on the Final Closing Balance Sheet, Buyer shall
receive a credit on the Settlement Date in an amount equal to all vacation and
holiday pay unpaid by Company as of the Effective Time attributable to any
period or partial period of employment by Company prior to the Effective Time,
plus employee payroll taxes applicable thereto due or to become due, for those
Transferred Employees and Transferred Union Employees who will be employed by
Buyer after the Closing and (i) who have not as of the Effective Time taken
vacation, holiday or sick time earned prior to Closing, or (ii) who have not
earned vacation, holiday or sick time as of the Effective Time but who would
have earned vacation and holiday pay for any such period or partial period of
employment prior to the Closing (on a pro rata basis) had they continued as
employees of Company to the date when such vacation and holiday pay would have
accrued to them.
3.5. Allocation of Purchase Price. The aggregate Purchase Price
(including the assumption by Buyer of the Assumed Liabilities) shall be
allocated among the Purchased Assets by agreement of the parties prior to
Closing, provided that Inventory shall be valued at the lower of cost or market,
determined on a per item basis, for purposes of such allocation. Company and
Buyer will follow and use such allocation in all tax returns, filings or other
related reports made by them to any governmental agencies. To the extent that
disclosures of this allocation are required to be made by the parties to the
Internal Revenue Service ("IRS") under the provisions of Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code") or any regulations
thereunder, Buyer and Company will disclose such reports to the other prior to
filing with the IRS.
4. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company makes the following representations and warranties to Buyer, each
of which is true and correct on the date hereof, shall remain true and correct
to and including the Closing Date, shall be unaffected by any investigation
heretofore or hereafter made by Buyer, or any knowledge of Buyer other than as
specifically disclosed in the Disclosure Schedule delivered to Buyer at the time
of the execution of this Agreement, and shall survive the Closing of the
transactions provided for herein.
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4.1. Corporate
4.1.(a) Organization. Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of New
York.
4.1.(b) Corporate Power. Company has all requisite corporate power
and authority to own, operate and lease its properties, to carry on its
business as and where such is now being conducted, to enter into this
Agreement and the other documents and instruments to be executed and
delivered by Company pursuant hereto and to carry out the transactions
contemplated hereby and thereby.
4.1.(c) Qualification. Company is duly licensed or qualified to do
business as a foreign corporation, and is in good standing, in each
jurisdiction wherein the character of the properties owned or leased by
it, or the nature of its business, makes such licensing or qualification
necessary, except where the failure so to qualify would not have a
Material Adverse Effect upon (i) the Purchased Assets, (ii) the business,
operations or financial condition of the Juice Division, or (iii) the
ability of Company to consummate the transactions contemplated hereby.
The states in which Company is licensed or qualified to do business by
reason of the business or assets of the Juice Division are listed in
Schedule 4.1.(c).
4.1.(d) Subsidiaries. Except with respect to the subsidiaries
described in Schedule 4.1.(d) ("Subsidiaries"), Company does not own any
controlling interest in any corporation, partnership or other entity.
4.2. Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Company pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by the Board of Directors of Company. No notice to,
meeting of, action by, or approval of any of the shareholders of Company is
necessary to authorize this Agreement or any of the Ancillary Agreements to
which it is a party or to consummate the transaction contemplated hereby or
thereby. No other or further corporate act or proceeding on the part of Company
is necessary to authorize this Agreement or the other documents and instruments
to be executed and delivered by Company pursuant hereto or the consummation of
the transactions contemplated hereby and thereby. This Agreement constitutes,
and when executed and delivered, the other documents and instruments to be
executed and delivered by Company pursuant hereto will constitute, valid and
binding agreements of Company, enforceable in accordance with their respective
terms, except as such may be limited by bankruptcy, insolvency, reorganization
or other laws affecting creditors' rights generally, and by general equitable
principles.
4.3. No Violation. Except as set forth on Schedule 4.3, neither the
execution and delivery of this Agreement, the Ancillary Agreements or the other
documents and instruments to be executed and delivered by Company pursuant
hereto, nor the consummation by Company of the transactions contemplated hereby
and thereby (a) will violate any applicable Law or Order, (b) except for
applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
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Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), will require any authorization,
consent, approval, exemption or other action by or notice to any Government
Entity (including, without limitation, under any "plant-closing" or similar
law), or (c) subject to obtaining the consents referred to in Schedule 4.3, will
violate or conflict with, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or will
result in the termination of, or accelerate the performance required by, or
result in the creation of any Lien (as defined in Section 4.12.(a)) upon any of
the assets of the Juice Division under, any term or provision of the Certificate
of Incorporation or By-laws of Company or of any contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character to
which Company is a party or by which Company or any of its assets or properties
may be bound or affected.
4.4. Financial Statements. Included as Schedule 4.4 are true and complete
copies of the unaudited financial statements of the Juice Division consisting of
(i) statement of working capital of the Juice Division as of June 27, 1998; (ii)
divisional income statements of the Juice Division for the fiscal years ended
March 31, 1997 and March 31, 1998; and (iii) a fixed asset statement of the
Juice Division as of June 27, 1998 ("Recent Balance Sheet"). All of such
financial statements (including all notes and schedules contained therein or
annexed thereto) are true, complete and accurate, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited statements, for the absence of footnote disclosure) applied on a
consistent basis, provided that in the Recent Balance Sheet and related
statements are subject to normal year-end adjustments (which will not be
material individually or in the aggregate), have been prepared in accordance
with the books and records of Company, and fairly present, in accordance with
generally accepted accounting principles, the assets, liabilities and financial
position, the results of operations, and cash flows of the Juice Division and
the Juice Division Business as of the dates and for the years and periods
indicated and represent Company's good faith, best estimate of the assets,
liabilities and financial position, the results of operations and cash flows of
the Juice Division and the Juice Division Business if operated on a stand alone
basis (except as described on Schedule 4.4 attached hereto). The Estimated
Closing Balance Sheet and the Final Closing Balance Sheet shall be in accordance
with the specifications set forth in Article 3.
4.5. Tax Matters.
4.5.(a) Tax Returns Filed. Except as set forth on Schedule
4.5.(a), all federal, state, foreign, county, local and other tax returns
required to be filed by or on behalf of Company have been timely filed
and when filed were true and correct in all material respects, and the
taxes shown as due thereon were paid or adequately accrued. Company has
duly withheld and paid all taxes which it is required to withhold and pay
relating to salaries and other compensation heretofore paid to the
employees of Company and the Juice Division.
4.5.(b) Tax Audits. The federal and state income tax returns of
Company have been audited by the Internal Revenue Service and appropriate
state taxing authorities for the periods and to the extent set forth in
Schedule 4.5.(b), and Company has not received from the Internal Revenue
Service or from the tax authorities of any
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state, county, local or other jurisdiction any notice of underpayment of
taxes or other deficiency which has not been paid nor any objection to
any return or report filed by Company. There are outstanding no
agreements or waivers extending the statutory period of limitations
applicable to any tax return or report.
4.6. Accounts Receivable. All accounts receivable of the Juice Division
reflected on the Recent Balance Sheet, and as incurred in the normal course of
business since the date thereof, represent arm's length sales actually made in
the ordinary course of business.
4.7. Inventory. All Inventory of the Juice Division reflected on the
Recent Balance Sheet consists of a quality and quantity usable and saleable in
the ordinary course of business, had an aggregate commercial value at least
equal to the aggregate value shown on such balance sheet (other than cranberry
concentrates) and is valued in accordance with generally accepted accounting
principles at the lower of cost (on a FIFO basis) or market (on an aggregate
basis). All inventory purchased since the date of such balance sheet consists of
a quality and quantity usable and saleable in the ordinary course of business.
Except as set forth in Schedule 4.7, all inventory of the Juice Division is
located at the Purchased Facilities. Except as set forth on Schedule 4.7, as of
October 29, 1998, the cost of finished goods contained in inventory of the Juice
Division constitutes items produced pursuant to contracts or open orders taken
in the ordinary course of business, from regular customers of Company with no
recent history of credit problems with respect to Company. Neither Company nor,
to the knowledge of Company, any such customer is in material breach of the
terms of any obligation to the other, and no valid grounds exist for any set-off
of amounts billable to such customers for the finished goods. All such finished
goods are of a quality ordinarily produced in accordance with the requirements
of the orders to which such finished goods may be identified, are fit for human
consumption, are saleable based on Company's normal sales experience prior to
the expiration of their shelf life, if any, and will require no rework with
respect to services performed prior to Closing. All packaging, labels and
finished goods contained in the Juice Division inventory are in compliance in
all material respects as to content, labeling and packaging with applicable laws
and regulations (including, without limitation, those of the U.S. Department of
Agriculture and U.S. Food and Drug Administration). Schedule 4.7 contains a list
of all inventory of Customers of the Juice Division supplied to Company and held
by the Company as of June 27, 1998.
4.8. Absence of Certain Changes. Except as and to the extent set forth in
Schedule 4.8, since the date of the Recent Balance Sheet there has not been:
4.8.(a) No Adverse Change. Any change in the financial condition,
assets, Liabilities, business, prospects or operations of Company which
has had or could reasonably be expected to have a Material Adverse Effect
on the business or properties of the Juice Division;
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4.8.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, affecting Company's business or properties
which has had or could reasonably be expected to have a Material Adverse
Effect on the business or properties of the Juice Division;
4.8.(c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to any
employee, broker, representative or agent of the Juice Division
(including, without limitation, any increase or change pursuant to any
bonus, pension, profit sharing, retirement, commission or other plan or
commitment), or any bonus or other employee benefit granted, made or
accrued;
4.8.(d) No Labor Disputes. Any labor dispute or disturbance, other
than routine individual grievances which are not material individually or
in the aggregate to the business, financial condition or results of
operations of the Juice Division;
4.8.(e) No Nonordinary Commitments. Any commitment or transaction
by Company with respect to the business or properties of the Juice
Division (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business consistent
with past practice;
4.8.(f) No Disposition of Property. Any sale, lease or other
transfer or disposition of any material properties or assets of the Juice
Division, except for the sale of inventory items in the ordinary course
of business;
4.8.(g) No Liens. Any Lien made on any of the properties or assets
of the Juice Division, except for Permitted Real Property Liens;
4.8.(h) No Amendment of Contracts. Any entering into, amendment or
termination by Company of any contract associated with the Juice
Division, or any waiver of material rights thereunder, other than in the
ordinary course of business consistent with past practice or as
contemplated by this Agreement;
4.8.(i) Credit. Any grant of credit to any customer or distributor
of the Juice Division on terms or in amounts more favorable than those
which have been extended to such customer or distributor in the past, any
other change in the terms of any credit heretofore extended, or any other
change of Company's policies or practices with respect to the granting of
credit with respect to any customer or distributor of the Juice Division;
4.8.(j) No Accounting Changes. Any change in any method of
accounting or accounting practice; or
4.8.(k) No Unusual Events. Any other material event or condition
not in the ordinary course of business of the Juice Division.
4.9. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet, or in Schedule 4.9 or with
respect to claims or liabilities for which Company will be fully covered by
existing insurance policies of Company (other than retention amounts under such
insurance policies), the Juice Division does not have any Liabilities other than
commercial liabilities and obligations incurred since the date of the Recent
Balance Sheet in the ordinary course of business and consistent in amount and
nature
-21-
with past practice and none of which has or will have a Material Adverse Effect
on the business, properties, financial condition or results of operations of the
Juice Division. Except as and to the extent described in the Recent Balance
Sheet or in Schedule 4.9, Company has no knowledge of any basis for the
assertion against Company of any Liability and there are no circumstances,
conditions, happenings, events or arrangements, contractual or otherwise, known
to the Company, which may give rise to Liabilities of the Juice Division, except
commercial liabilities and obligations incurred in the ordinary course of the
Juice Division's business and consistent in amount and nature with past
practice.
4.10. No Litigation. Except as set forth in Schedule 4.10, there is no
Litigation pending or, to the knowledge of Company, threatened against Company,
its directors (in such capacity), its business or any of its assets which
relates to the Juice Division or which has had or reasonably be expected to have
a Material Adverse Effect on the business or properties of the Juice Division,
nor does Company know, or have grounds to know, of any basis for any Litigation.
Schedule 4.10 also identifies all Litigation which relates to the Juice Division
to which Company or any of its directors have been parties since July 1, 1993.
Except as set forth in Schedule 4.10, Company's business and assets relating to
the Juice Division are not subject to any Order.
4.11. Compliance With Laws and Orders
4.11.(a) Compliance. Except as set forth in Schedule 4.11.(a), the
Juice Division (including each and all of its operations, practices,
properties and assets) is in compliance in all material respects with all
applicable Laws and Orders, including, without limitation, those
applicable to discrimination in employment, occupational safety and
health, trade practices, competition and pricing, product warranties,
zoning, building and sanitation, employment, retirement and labor
relations, product advertising and the Environmental Laws as hereinafter
defined. Except as set forth in Schedule 4.11.(a), Company has not
received notice of any violation or alleged violation of, and is subject
to no Liability for past or continuing violation of, any Laws or Orders
in connection with the operations or business of the Juice Division. All
reports and returns required to be filed by Company with any Government
Entity with respect to the Juice Division have been filed, and were
accurate and complete when filed. Without limiting the generality of the
foregoing:
(i) Except as set forth on Schedule 4.11.(a), neither the
operation of the business of the Juice Division as it is now
conducted, nor any condition existing at any of the Purchased
Facilities, can reasonably be expected to in any manner constitute
a nuisance or other tortious interference with the rights of any
person or persons in such a manner as to give rise to or
constitute the grounds for a suit, action, claim or demand by any
such person or persons seeking compensation or damages or seeking
to restrain, enjoin or otherwise prohibit any aspect of the
conduct of such business or the manner in which it is now
conducted.
-22-
(ii) Company has made all required payments to its
unemployment compensation reserve accounts with respect to the
operations of the Juice Division with the appropriate governmental
departments of the states where it is required to maintain such
accounts, and each of such accounts has a positive balance.
(iii) Company has delivered to Buyer copies of all reports
of Company for the past five years required under the federal
Occupational Safety and Health Act of 1970, as amended, and under
all other applicable health and safety laws and regulations with
respect to the business and operations of the Juice Division. The
deficiencies, if any, noted on such reports have been corrected.
4.11.(b) Licenses and Permits. Company has all material licenses,
permits, approvals, authorizations and consents of all Government
Entities and all certification organizations required for the conduct of
the business (as presently conducted and as proposed to be conducted) and
operation of the Juice Division and the Purchased Facilities. All such
licenses, permits, approvals, authorizations and consents are described
in Schedule 4.11.(b) and are in full force and effect. Except as set
forth in Schedule 4.11.(b), Company (including its operations, properties
and assets) is and has been in compliance in all material respects with
all such permits and licenses, approvals, authorizations and consents.
4.11.(c) Environmental Matters. The applicable Laws relating to
pollution or protection of the environment, including Laws relating to
emissions, discharges, generation, storage, releases or threatened
releases of Hazardous Substances into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances including, without limitation, the Clean Water Act,
the Clean Air Act, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act and CERCLA, as amended, and their state and local
counterparts are herein collectively referred to as the "Environmental
Laws". Without limiting the generality of the foregoing provisions of
this Section 4.11, the business and properties of the Juice Division are
in compliance in all material respects with all material limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental Laws
or contained in any regulations, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or
approved thereunder. Except as set forth in Schedule 4.11.(c), there is
no Litigation nor any demand, claim, hearing or notice of violation
pending or threatened against Company with respect to the business or
operations of the Juice Division or the Purchased Facilities relating in
any way to the Environmental Laws or any Order issued, entered,
promulgated or approved thereunder. Except as set forth in Schedule
4.11.(c), there are no past or present (or, to the best of Company's
knowledge, future) events, conditions, circumstances, activities,
practices, incidents, actions, omissions or plans which may interfere
with or prevent compliance
-23-
or continued compliance with the Environmental Laws or with any Order
issued, entered, promulgated or approved thereunder with respect to the
business or operations of the Juice Division or the Purchased Facilities,
or which may give rise to any Liability of Company, including, without
limitation, Liability under CERCLA or similar state or local Laws, or
otherwise form the basis of any Litigation against Company, hearing,
notice of violation, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened
release into the environment, of any Hazardous Substance in connection
with the business or operations of the Juice Division or the Purchased
Facilities.
4.12. Title to and Condition of Properties.
4.12.(a) Marketable Title. Company has good and marketable title
to all the Purchased Assets, free and clear of all mortgages, liens
(statutory or otherwise), security interests, claims, pledges, licenses,
equities, options, conditional sales contracts, assessments, levies,
easements, covenants, reservations, restrictions, rights-of-way,
exceptions, limitations, charges or encumbrances of any nature whatsoever
(collectively, "Liens") except those described in Schedule 4.12.(a) and
Schedule 4.12.(c), none of which interfere with the use of the property
as currently utilized; and, in the case of real property, Liens for taxes
not yet due or which are being contested in good faith by appropriate
proceedings (and which have been sufficiently accrued or reserved against
in the Recent Balance Sheet), municipal and zoning ordinances and
easements or other encumbrances, none of which interfere with the use of
the property as currently utilized ("Permitted Real Property Liens").
None of the Purchased Assets are subject to any restrictions with respect
to the transferability thereof, except that certain contracts may require
the consent to assignment thereof and certain licenses and permits may
not be assignable. Company has complete and unrestricted power and right
to sell, assign, convey and deliver the Purchased Assets to Buyer as
contemplated hereby. At Closing, Buyer will receive good and marketable
title to all the Purchased Assets, free and clear of all Liens of any
nature whatsoever except those described in Schedule 4.12.(a) and
Permitted Real Property Liens.
4.12.(b) Condition. All tangible assets (real and personal)
constituting Purchased Assets hereunder are in good operating condition
and repair, free from any defects (except for reasonable wear and tear
and such minor defects as do not interfere with the use thereof in the
conduct of the normal operations of Company), have been maintained
consistent with the standards generally followed in the industry and, as
of the date of this Agreement and the Closing Date are, or will then be,
sufficient to carry on the business of the Juice Division as conducted
during the preceding 12 months. All buildings, plants and other
structures owned or otherwise utilized by the Juice Division are in good
condition and repair, reasonable wear and tear excepted, and have no
structural defects or defects affecting the plumbing, electrical,
sewerage, or heating, ventilating or air conditioning systems except for
minor defects which do not interfere with the use of the buildings,
plants and other structures.
-24-
4.12.(c) Real Property. Schedules l.1.(a) and 1.1.(b) set forth
all real property owned, used or occupied by Company, or to be acquired
by Company in connection with the business of the Juice Division (the
"Real Property"), including a description of all land, and all
encumbrances, easements or rights of way of record (or, if not of record,
of which Company has notice or knowledge) granted on or appurtenant to or
otherwise affecting such Real Property, the zoning classification
thereof, and all plants, buildings or other structures located thereon.
Schedule 1.1.(b) also sets forth, with respect to each parcel of Real
Property which is leased, the material terms of such lease. Except set
forth in Schedule 4.12.(c), there are now in full force and effect duly
issued certificates of occupancy permitting the Real Property and
improvements located thereon to be legally used and occupied as the same
are now constituted. All of the Real Property has permanent rights of
access to dedicated public highways. No fact or condition exists which
would prohibit or adversely affect the ordinary rights of access to and
from the Real Property from and to the existing highways and roads and
there is no pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress. Except as set forth in Schedule
4.12.(c), there is not (i) any claim of adverse possession or
prescriptive rights involving any of the Real Property, (ii) any
structure located on any Real Property which encroaches on or over the
boundaries of neighboring or adjacent properties or (iii) any structure
of any other party which encroaches on or over the boundaries of any of
such Real Property. None of the Real Property is located in a flood
plain, flood hazard area, wetland or lakeshore erosion area within the
meaning of any Law. Except as set forth in Schedule 4.12.(c), no public
improvements have been commenced and, to Company's knowledge, none are
planned which in either case may result in special assessments against or
otherwise materially adversely affect any Real Property. No portion of
any of the Real Property has been used as a landfill or for storage or
landfill of Hazardous Substances. Except as set forth in Schedule
4.12.(c), Company has no notice or knowledge of any (i) planned or
proposed increase in assessed valuations of any Real Property, (ii) Order
requiring repair, alteration, or correction of any existing condition
affecting any Real Property or the systems or improvements thereat, (iii)
condition or defect which could give rise to an order of the sort
referred to in "(ii)" above, or (iv) underground storage tanks, or any
structural, mechanical, or other defects of material significance
affecting any Real Property or the systems or improvements thereat
(including, but not limited to, inadequacy for normal use of mechanical
systems or disposal or water systems at or serving the Real Property).
4.12.(d) No Condemnation or Expropriation. Neither the whole nor
any portion of the property or any other assets of the Juice Division is
subject to any Order to be sold or is being condemned, expropriated or
otherwise taken by any Government Entity with or without payment of
compensation therefor nor, to the best of Company's knowledge, has any
such condemnation, expropriation or taking been proposed.
-25-
4.12.(e) No Certified Survey Map Required. No certified survey map
or other state, municipal, or other governmental approval regarding the
division, platting, or mapping of real estate is required as a
prerequisite to the conveyance by Company to Buyer (or as a prerequisite
to the recording of any conveyance document) of any Owned Real Property
or Leased Real Property pursuant to the terms hereof.
4.13. Insurance. Set forth in Schedule 4.13 is a complete and accurate
list and description of all policies of fire, liability, product liability,
workers compensation, health and other forms of insurance presently in effect
with respect to the business and properties of the Juice Division. Schedule 4.13
includes, without limitation, the carrier, a summary description of coverage,
the limits of coverage, retention or deductible amounts, date of expiration, and
any pending claims with respect to the business or operations of the Juice
Division or the Purchased Facilities in excess of $10,000. All such policies are
valid, outstanding and enforceable policies and provide insurance coverage for
the properties, assets and operations of the Juice Division, of the kinds, in
the amounts and against the risks customarily maintained by organizations
similarly situated; and no such policy is subject to any currently enforceable
retroactive rate or premium adjustment, loss sharing arrangement or other actual
or contingent liability arising wholly or partially out of events or
circumstances with respect to the business or operations of the Juice Division
or the Purchased Facilities arising prior to the date hereof. Schedule 4.13
indicates each policy as to which the total incurred losses to date with respect
to business or operations of the Juice Division or the Purchased Facilities
exceed $50,000. No notice of cancellation or termination has been received with
respect to any such policy, and Company has no knowledge of any act or omission
of Company which could result in cancellation of any such policy prior to its
scheduled expiration date. Company has not been refused any insurance with
respect to any aspect of the business or operations of the Juice Division or the
Purchased Facilities nor has its coverage been limited by any insurance carrier
to which it has applied for insurance or with which it has carried insurance
during the last three years. Company has duly and timely made all claims it has
been entitled to make under each policy of insurance associated with the
business or operations of the Juice Division or the Purchased Facilities. Since
July 1, 1993, all products liability and general liability policies maintained
by or for the benefit of Company with respect to the business or operations of
the Juice Division or the Purchased Facilities have been "occurrence" policies
and not "claims made" policies. There is no claim by Company pending under any
such policies with respect to the business or operations of the Juice Division
or the Purchased Facilities as to which coverage has been questioned, denied or
disputed by the underwriters of such policies, and Company knows of no basis for
denial of any claim under any such policy. Company has not received any written
notice from or on behalf of any insurance carrier issuing any such policy that
insurance rates therefor will hereafter be substantially increased (except to
the extent that insurance rates may be increased for all similarly situated
risks) or that there will hereafter be a cancellation or an increase in a
deductible (or an increase in premiums in order to maintain an existing
deductible) or nonrenewal of any such policy. Such policies are sufficient in
all material respects for compliance by Company with all material requirements
of law and with the requirements of all material contracts relating to the Juice
Division to which Company is a party.
-26-
4.14. Contracts and Commitments.
4.14.(a) Real Property Leases. Except as set forth in Schedule
1.1.(b), Company has no leases of real property for real property used in
the business of the Juice Division.
4.14.(b) Personal Property Leases. Except as set forth in Schedule
1.1.(e), Company has no leases of personal property used in the business
or operations of the Juice Division involving consideration or other
expenditure in excess of $10,000 or involving performance over a period
of more than six months.
4.14.(c) Purchase Commitments. Except for the Westfield Maid
Cooperative Agreement or as set forth in Schedule 4.14.(c), Company has
no purchase commitments for inventory items or supplies for use in the
business of the Juice Division that, together with amounts on hand,
constitute in excess of six months normal usage, or which are at an
excessive price, nor does Company have any purchase commitments for
equipment with a price in excess of $50,000.
4.14.(d) Sales Commitments. Except as set forth in Schedule
4.14.(d), Company has no sales contracts or commitments to customers or
distributors of the Juice Division which aggregate in excess of $50,000
to any one customer or distributor (or group of affiliated customers or
distributors). Company has no sales contracts or commitments with respect
to the business of the Juice Division except those made in the ordinary
course of business, at arm's length.
4.14.(e) Contracts for Services. Except as set forth in Schedule
4.14.(e), Company has no agreement, understanding, contract or commitment
(written or oral) with any officer, employee, agent, consultant,
distributor, dealer or franchisee of the Juice Division that is not
cancelable by Company on notice of not longer than 30 days without
liability, penalty or premium of any nature or kind whatsoever.
4.14.(f) Powers of Attorney. The Company has not given a power of
attorney, which is currently in effect, to any person, firm or
corporation for any purpose whatsoever in connection with the business or
properties of the Juice Division.
4.14.(g) Collective Bargaining Agreements. Except for the Union
Contract or as set forth on Schedule 4.14.(g), Company is not a party to
any collective bargaining agreements with any unions, guilds, shop
committees or other collective bargaining groups for any employees of the
Juice Division. Copies of all such agreements have heretofore been
delivered to Buyer.
-27-
4.14.(h) Partnerships or Joint Ventures. Company is not a party to
any partnership, joint venture or similar agreement relating to the
Purchased Assets, the operation of the Purchased Assets or the business
of the Juice Division in connection therewith.
4.14.(i) Contracts Subject to Renegotiation. Company is not a
party to any contract with any governmental body which is subject to
renegotiation that relates to the business or operations of the Juice
Division.
4.14.(j) Burdensome or Restrictive Agreements. Except as set forth
on Schedule 4.14.(j), Company is not a party to nor is it bound by any
agreement, deed, lease or other instrument which is so burdensome as to
materially adversely affect or impair the business or operations of the
Juice Division. Without limiting the generality of the foregoing, Company
is not a party to nor is it bound by any agreement requiring Company to
assign any interest in any trade secret or proprietary information
relating to the business or operations of the Juice Division, or
prohibiting or restricting Company from competing in any business or
geographical area or soliciting customers or otherwise restricting it
from carrying on its business anywhere in the world in connection with
the business or operations of the Juice Division.
4.14.(k) Other Material Contracts. Company has no lease, license,
contract or commitment of any nature relating to the business or
operations of the Juice Division involving consideration or other
expenditure in excess of $75,000, or involving performance over a period
of more than six months, or which is otherwise individually material to
the operations of the Juice Division, except as explicitly described in
Schedule 4.14.(k) or in any other Schedule.
4.14.(l) No Default. Except as set forth on Schedule 4.14.(l),
Company is not in material default under any material lease, contract or
commitment relating to the business or operations of the Juice Division,
nor has any event or omission occurred which through the passage of time
or the giving of notice, or both, would constitute a material default
thereunder or cause the acceleration of any of Company's obligations or
result in the creation of any Lien on any of the Purchased Assets.
Schedule 4.14.(l) sets forth all delinquent accounts of the Juice
division in excess of $5,000 per account as of the date of this
Agreement. To the knowledge of Company or except as set forth on Schedule
4.14.(l), no third party is in default under any lease, contract or
commitment relating to the business or operations of the Juice Division
to which Company is a party, nor has any event or omission occurred
which, through the passage of time or the giving of notice, or both,
would constitute a default thereunder or give rise to an automatic
termination, or the right of discretionary termination, thereof.
-28-
4.15. Labor Matters
4.15.(a) Union Contract. Company is a party to the Union Contract
with the International Brotherhood of Teamsters, Drivers, Salesmen,
Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Union
Local No. 695, ("Teamsters Union") which is effective through January 15,
1999, with respect to certain employees of Company located at the ▇▇▇▇▇▇▇
Plant. A copy of the Union Contract, together with all other agreements
and understandings with the union referenced therein, have previously
been provided by Company to Buyer. Company is not in violation or breach
of the Union Contract or any of such other agreements.
4.15.(b) Labor Disputes. Except as set forth in Schedule 4.15.(b),
within the last five years Company has not experienced any labor disputes
or any work stoppage due to labor disagreements in connection with the
business or operations of the Juice Division. Except to the extent set
forth in Schedule 4.15.(b), with respect to the business and operations
of the Juice Division (a) Company is in material compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and is not engaged in any
unfair labor practice; (b) there is no unfair labor practice charge or
complaint against Company pending or, to the knowledge of Company,
threatened; (c) there is no labor strike, dispute, slowdown or stoppage
actually pending or, to the knowledge of Company, threatened against or
affecting Company nor any secondary boycott with respect to products; (d)
there is no representation of the employees of Company (other than the
employees covered by the Union Contract) by any labor organization and,
to the knowledge of Company, there are no union organizing activities
among the employees of Company and, to the knowledge of Company, no
question concerning representation has been raised or is threatened
respecting the employees of Company; (e) no grievance which might have a
Material Adverse Effect on the business or operations of the Juice
Division, nor any arbitration proceeding arising out of or under
collective bargaining agreements, is pending and, to the knowledge of
Company, no such claim therefor exists; (f) there are no administrative
charges or court complaints against Company concerning alleged employment
discrimination or other employment related matters pending in any court
or, to the knowledge of Company, threatened before the U.S. Equal
Employment Opportunity Commission or any Government Entity; and (g)
except for the Union Contract or as set forth on Schedule 4.15.(b), no
representation has been made to any employee of the Juice Division
regarding longevity of employment.
4.16. Employee Benefit Plans.
4.16.(a) Disclosure. Schedule 4.16.(a) sets forth all pension,
thrift, savings, profit sharing, retirement, incentive bonus or other
bonus, medical, dental, life, accident insurance, benefit, employee
welfare, disability, group insurance, stock purchase, stock option, stock
appreciation, stock bonus, executive or deferred compensation,
hospitalization and other similar fringe or employee benefit plans,
programs and arrangements, and any employment or consulting contracts,
"golden parachutes," collective bargaining agreements, severance
agreements or plans, vacation
-29-
and sick leave plans, programs, arrangements and policies, including,
without limitation, all "employee benefit plans" (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), all employee manuals, and all written or, to the knowledge of
Company, binding oral statements of policies, practices or understandings
relating to employment, which are provided to, for the benefit of, or
relate to, any current or former employees employed by Company at any of
the Purchased Facilities, for the operation or maintenance of the
Purchased Assets or in connection with the business of the Juice Division
("Juice Division Employees"). The items described in the foregoing
sentence are hereinafter sometimes referred to collectively as "Employee
Plans/Agreements," and each individually as an "Employee Plan/Agreement."
True and correct copies of all the Employee Plans/Agreements, including
all amendments thereto, have heretofore been provided or made available
to Buyer. Each of the Employee Plans/Agreements is identified on Schedule
4.16.(a), to the extent applicable, as one or more of the following: an
"employee pension benefit plan" (as defined in Section 3(2) of ERISA), a
"defined benefit plan" (as defined in Section 414 of the Code), an
"employee welfare benefit plan" (as defined in Section 3(1) of ERISA),
and/or as a plan intended to be qualified under Section 401 of the Code.
No Employee Plan/Agreement is a "multiemployer plan" (as defined in
Section 4001 of ERISA), and Company has never contributed nor been
obligated to contribute to any such multiemployer plan with respect to
the Purchased Facilities or the employees of the Juice Division.
4.16.(b) Terminations, Proceedings, Penalties, etc.. With respect
to Seneca Foods Corporation Employees Pension Benefits Plan ("Pension
Plan"):
(i) the Pension Plan has not been terminated so as to
subject, directly or indirectly, any assets of Company to any
Liability or the imposition of any Lien under Title IV of ERISA;
(ii) no proceeding has been initiated or threatened by any
person (including the Pension Benefit Guaranty Corporation
("PBGC")) to terminate any such plan;
(iii) no condition or event currently exists or currently
is expected to occur that could subject, directly or indirectly,
any assets of Company to any Liability or the imposition of any
Lien under Title IV of ERISA, whether to the PBGC or to any other
person or otherwise on account of the termination of the Pension
Plan;
(iv) the Pension Plan will not be terminated prior to the
Closing Date;
(v) no "reportable event" (as defined in Section 4043 of
ERISA) for which notice has not been waived by PBGC regulations
has occurred with respect to the Pension Plan; and
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(vi) the Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Code, respectively), whether or not waived.
4.16.(c) Payments and Compliance. With respect to each Employee
Plan/Agreement, all payments due from Company to date have been made and
all amounts properly accrued to date as Liabilities of Company which have
not been paid have been properly recorded on the books of Company and are
reflected in the Recent Balance Sheet.
4.16.(d) Liabilities. Company has not incurred, nor has any event
occurred (or condition exist) that reasonably may be expected to result
in the Company incurring, any Liability in connection with any Employee
Plan/Agreement or any other employee benefit plan or ERISA affiliate plan
that could become, on or after the Closing, an obligation or liability of
Buyer, or result in the Purchased Assets being or becoming subject to a
lien under Title IV of ERISA.
4.16.(e) Post-Retirement Benefits. No Employee Plan/Agreement
provides benefits, including, without limitation, death or medical
benefits (whether or not insured) with respect to current or former Juice
Division Employees beyond their retirement or other termination of
service other than (i) coverage mandated by applicable law, (ii) benefits
under any Employee Plan/Agreement that is an employee pension benefit
plan, (iii) deferred compensation benefits accrued as liabilities on the
books of the Juice Division (including the Recent Balance Sheet), (iv)
disability benefits under any Employee Plan/ Agreement that is an
employee welfare benefit plan and which have been fully provided for by
insurance or otherwise or (v) benefits in the nature of severance pay.
4.16.(f) Delivery of Documents. There has been delivered to Buyer
the most recent determination letter received from the Internal Revenue
Service with respect to each Employee Plan/Agreement that is intended to
be a "qualified plan" under Section 401 of the Code and that has obtained
such a letter.
4.16.(g) Future Commitments. Company has no announced plan or
legally binding commitment to create any additional Employee
Plans/Agreements or to amend or modify any existing Employee
Plan/Agreement.
4.17. Employment Compensation. Schedule 4.17 contains a true and correct
list of all Juice Division Employees to whom the Company is paying compensation,
including bonuses and incentives, for services rendered or otherwise; and in the
case of salaried employees such list identifies the current annual rate of
compensation for each employee and in the case of hourly or commission employees
identifies each employee's rate.
4.18. Trade Rights. Schedule 1.1.(f) lists all Juice Division Trade
Rights which are Trade Rights of the type described in clauses (i), (ii), (iii)
or (iv) of Section 1.1.(f) in which Company now has any interest, specifying
whether such Trade Rights are owned, controlled, used or held (under license or
otherwise) by Company, and also indicating which of such
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Trade Rights are registered. All Juice Division Trade Rights shown as registered
in Schedule 1.1.(f) have been properly registered, all pending registrations and
applications have been properly made and filed and all annuity, maintenance,
renewal and other fees relating to registrations or applications are current. In
order to conduct the business of the Juice Division, as such is currently being
conducted or proposed to be conducted, Company does not require any Trade Rights
that it does not already have. Company is not infringing and has not infringed
any Trade Rights of another in the operation of the business of Company and to
the knowledge of Company, no other person is infringing the Trade Rights of
Company. Company has not granted any license or made any assignment of any
registered Juice Division Trade Right listed on Schedule 1.1.(f), and no other
person has any right to use any registered Juice Division Trade Right owned or
held by Company. Company does not pay any royalties or other consideration for
the right to use any Trade Rights of others in connection with the business or
operations of the Juice Division. There is no Litigation pending or, to the
knowledge of Company, threatened to challenge Company's right, title and
interest with respect to its continued use and right to preclude others from
using any Juice Division Trade Rights of Company. All registered Juice Division
Trade Rights of Company are valid, enforceable and in good standing, and there
are no equitable defenses to enforcement based on any act or omission of
Company.
4.19. Major Customers and Suppliers.
4.19.(a) Major Customers. Schedule 4.19.(a) contains a list of the
15 largest customers, including distributors, of the Juice Division for
each of the two most recent fiscal years and for the three-month period
ending June 27, 1998 (determined on the basis of the total dollar amount
of net sales) showing the total dollar amount of net sales to each such
customer during each such year or period. To the knowledge of Company, no
customer listed in Schedule 4.19.(a) (other than Buyer and ▇▇▇▇▇▇▇▇ Soup
Co.) has informed Company that it has ceased or will cease to be a
customer or has substantially reduced, or will substantially reduce its
annual level of purchases for any reason, including the closing of the
transactions contemplated herein, but Company can give no assurance that
the Juice Division business relationship with any such customer will
continue or remain at substantially the same level after Closing. In
particular, Company believes that its participation in the LUA program of
Publix Super Markets, Inc. ("Publix") has been a key factor promoting its
substantial sales to Publix, and Company would not anticipate that it, or
any successor to it, could maintain that level of sales without LUA
participation.
4.19.(b) Major Suppliers. Schedule 4.19.(b) contains a list of the
15 largest suppliers to the Juice Division for each of the two most
recent fiscal years and for the three-month period ending June 27, 1998
(determined on the basis of the total dollar amount of purchases) showing
the total dollar amount of purchases from each such supplier during each
such year or period. Schedule 4.19.(b) also contains a true and correct
list of all contracts for the purchase of fruits, fruit juices and fruit
juice concentrate for goods in excess of $50,000, in each case
identifying in reasonable detail the term, approximate quantities, price
and payment terms. To the knowledge of Company, no supplier listed in
Schedule 4.19.(b) has informed Company that it has
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ceased or will cease to be a supplier or has substantially limited the
quantity of or materially changed the quality of, or will substantially
limit its annual level of goods or services sold to the Juice Division
for any reason, including the closing of the transactions contemplated
herein, but Company can give no assurance that the Juice Division
business relationship with any such supplier will continue or remain at
substantially the same level after Closing.
4.19.(c) Sales Representatives. Schedule 4.19.(c) contains a list
by product line of all sales representatives, brokers, dealers,
distributors and franchisees of the Juice Division, together with
representative copies of all sales representative, broker, dealer,
distributor and franchise contracts and policy statements, and a
description of all substantial modifications or exceptions.
4.20. Product Warranty and Product Liability. Schedule 4.20 contains a
true, correct and complete copy of Company's standard warranty or warranties for
sales of Products (as defined below) and, except as stated therein, there are no
warranties, commitments or obligations with respect to the return, repair or
replacement of Products. Schedule 4.20 sets forth the estimated aggregate annual
cost to Company of performing product return or warranty obligations for
customers of the Juice Division for each of the three preceding fiscal years and
the current fiscal year to the date of the Recent Balance Sheet. Schedule 4.20
contains a description of all product liability claims and similar Litigation
relating to Products manufactured or sold, or services rendered, which are
presently pending or which to Company's knowledge are threatened, or which have
been asserted or commenced against Company within the last three years, in which
a party thereto either requests injunctive relief or alleges damages in excess
of $20,000 (whether or not covered by insurance). There are no defects in
design, construction or manufacture of Products which would adversely affect
quality or create an unusual risk of injury to persons or property. Except as
set forth on Schedule 4.20, none of the Products has been the subject of any
replacement or recall campaign and, to Company's knowledge, no facts or
conditions exist which could reasonably be expected to result in such a recall
campaign. Schedule 4.20 identifies each Form 483 issued by the U.S. Food and
Drug Administration to Company with respect to Products or the business or
operations of the Juice Division during the last three fiscal years and the
current fiscal year and a description of the circumstances leading to the
issuance of each. The Products have been designed and manufactured so as to meet
and comply with all governmental standards and specifications currently in
effect, and have received all governmental approvals necessary to allow their
sale and use. As used in this Section 4.20, the term "Products" means any and
all products currently, or at any time within the past four years, produced,
manufactured, distributed or sold by the Juice Division, or by any predecessor
of the Juice Division, under any brand name or ▇▇▇▇ under which products are or
have been manufactured, distributed or sold by Company.
4.21. Affiliates' Relationships to Company.
4.21.(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements between Company and any Affiliate with
respect to the operation or
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maintenance of the Purchased Assets or the business of the Juice Division
are described on Schedule 4.21.(a).
4.21.(b) No Adverse Interests. Except as set forth on Schedule
4.21.(b), no Affiliate has any direct or indirect interest in (i) any
entity which does business with the Juice Division or is competitive with
the Juice Division business, excluding, however, any ownership of
securities of corporations which are listed on a national securities
exchange or traded in a national over-the-counter market in an amount
which shall not exceed 5% of the outstanding shares of any such
corporation, or (ii) any property, asset or right which is used by
Company in the conduct of the business of the Juice Division.
4.22. Sufficiency of Purchased Assets. The Purchased Assets, together
with the Seneca License, include all property and assets, tangible and
intangible (including, without limitation, water rights and access rights), and
all leases, licenses and other agreements, which are necessary and sufficient to
permit Buyer to carry on, or are currently used or held for use in, the
operation and maintenance of the Purchased Facilities and other Purchased Assets
and the business of the Juice Division as presently conducted, except for
nonassignable contracts or other rights, permits, and licenses that have been
specifically described as such in the Schedules to this Agreement and all
Excluded Assets, including, among other things, software, databases, insurance
contractors and Company-wide administrative assets which are used in the
business of the Juice Division and are used generally or primarily in the
business of other businesses retained by Seneca.
4.23. Computer Software and Database. Schedule 4.23 identifies and
described the functions of all computer software and databases owned, licensed,
leased, internally developed or otherwise used in connection with the business
and operations of the Juice Division.
4.24. No Brokers or Finders. Neither Company nor any of its directors,
officers, employees, or agents have retained, employed or used any broker or
finder in connection with the transactions provided for herein or the
negotiation thereof.
4.25. Disclosure. No representation or warranty by Company in this
Agreement, nor any statement, certificate, schedule, document or exhibit hereto
furnished or to be furnished by or on behalf of Company pursuant to this
Agreement or in connection with transactions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not misleading.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to Company, each
of which is true and correct on the date hereof, shall remain true and correct
to and including the Closing Date, shall be unaffected by any investigation
heretofore or hereafter made by Company or any notice to Company, and shall
survive the Closing of the transactions provided for herein.
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5.1. Corporate
5.1.(a) Organization. Buyer is a corporation duly organized, and
validly existing under the laws of the State of Wisconsin.
5.1.(b) Corporate Power. Buyer has all requisite corporate power
to enter into this Agreement and the other documents and instruments to
be executed and delivered by Buyer and to carry out the transactions
contemplated hereby and thereby.
5.2. Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by the Board of Directors of Buyer. No other corporate
act or proceeding on the part of Buyer or its shareholders is necessary to
authorize this Agreement or the other documents and instruments to be executed
and delivered by Buyer pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by Buyer pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as such may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
5.3. Northland Stock. The shares of Northland Stock to be issued to the
Shareholder hereunder pursuant to Section 3.2.(d) hereof have been duly
authorized for issuance by Buyer and, upon such issuance by Buyer, such shares
will be validly issued, fully paid and nonassessable (except for any statutory
liabilities for unpaid wage claims and other liabilities to employees under
Wisconsin Statutes Section 180.0622(2)(b)). Northland Stock has a par value of
$.01 per share and has never been assessed under Section 180.0622(2)(b) of the
Wisconsin Statutes. At Closing, Company will be issued such Northland Stock free
and clear of all Liens.
5.4. No Brokers or Finders. Except for ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., neither Buyer
nor any of its directors, officers, employees or agents have retained, employed
or used any broker or finder in connection with the transactions provided for
herein or the negotiation thereof.
5.5. No Violation. Except as set forth on Schedule 5.5 attached hereto,
neither the execution and delivery of the Agreement, nor the consummation by
Buyer of the transactions contemplated hereby, (a) will violate any statute or
law or any rule, regulation, order, writ, injunction or decree of any court or
governmental authority; (b) subject to obtaining any consents, approvals or
authorizations required under the HSR Act, will require any authorization,
consent, approval, exemption or other action by or notice to any court,
administrative or governmental agency, instrumentality, commission, authority,
board or body; or (c) will violate or conflict with, or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or will result in the termination of, or accelerate the
performance required by, or result in the creation of any Lien upon any of the
assets of Buyer or under any term or provision of (i) the articles of
incorporation or bylaws of Buyer or (ii) of any contract, commitment, agreement
or restriction of any kind or character
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to which Buyer is a party or by which Buyer or any of its assets or properties
may be bound or affected, other than contracts, commitments, agreements and the
like which, if violated or breached, would not individually or in the aggregate
have a Material Adverse Effect on Buyer.
5.6. SEC Filing; Financial Statements. Buyer has made available to
Company complete copies of each report, schedule, registration statement and
definitive proxy statement filed by Buyer with the Securities and Exchange
Commission ("Commission") since January 1, 1997 (as such documents have since
the time of their filing been amended, the "Northland SEC Documents") which are
all the documents (other than preliminary material) that Buyer was required to
file with the Commission since such date. As of their respective dates, the
Northland SEC Documents complied in all material respects with the requirements
of the Securities Act and the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder applicable to such Northland SEC Documents
and none of the Northland SEC Documents at the time of filing contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, no misleading. The financial
statements of Buyer included in the Northland SEC Documents complied as to form
in all material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the Commission)
and present fairly (subject, in the case of the unaudited statements, for
year-end adjustments of a normal recurring nature) the consolidated financial
position of Buyer and its consolidated subsidiary as at the dates thereof and
the consolidated results of operations and cash flows for the periods then
ended.
5.7. Registration. On the Closing Date, all of the shares of Northland
Stock to be issued pursuant to this Agreement will be (a) issued in a
transaction registered under the Securities Act of 1933, as amended, pursuant to
the Registration Statement (as defined below) as filed with the SEC; (b) issued
in a transaction registered, qualified, or exempted under all applicable state
securities laws; (c) listed on The Nasdaq National Market, subject to official
notice of issuance; and (d) saleable and transferable by Company without further
registration under the Securities Act of 1933, as amended, or applicable state
securities laws, but subject to the Stock Resale Agreement attached hereto as
Exhibit A.
5.8. No Brokers or Finders. Neither Northland nor any of its directors,
officers, employees, shareholders or agents have retained, employed or used any
broker or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof, except that Northland has retained
▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. to act as financial advisor.
5.9. Accuracy of Information. Northland has provided Company with
Northland's Form S-4 Registration Statement, filed July 22, 1996 (Reg. No.
333-08563) ("Registration Statement"), and copies of the documents incorporated
by reference therein (collectively with the Registration Statement, the
"Disclosure Documents"). Each of the Disclosure Documents and all other filings
by Northland with the SEC, as of the date filed by Northland with the SEC,
complied, and in the future will comply, in all material respects with the
applicable
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requirements of the Securities Act of 1933, the Securities Exchange Act of 1934
and the SEC's rules and regulations promulgated thereunder and did not, as of
such dates, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of the date hereof,
since the filing of its Form 10-K on December 1, 1998, Northland has not filed
any other documents with the SEC.
5.10. Disclosure. No representation or warranty by Buyer in this
Agreement, nor any statement, certificate, schedule, document or exhibit hereto
furnished or to be furnished by or on behalf of Buyer pursuant to this Agreement
or in connection with transactions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statements contained therein not misleading.
6. EMPLOYEES - EMPLOYEE BENEFITS
6.1. Buyer's Responsibilities; Transferred Employees
6.1.(a) Non-Union Employees. Except with respect to those
employees identified in a written notice from Buyer to Company prior to
Closing and approved by Company, which approval shall not be unreasonably
withheld, and except for the "Divisional and Sales Staff Employees"
separately dealt with in Section 6.1.(b) below, Buyer agrees to offer
employment, in similar positions, with comparable compensation and
benefits in the aggregate, and acknowledging prior service with Company,
to all non-union, full-time permanent employees of the Juice Division who
are presently employed principally in connection with the ownership and
operation of Purchased Assets at one of the Purchased Facilities, and who
are listed on Schedule 6.1.(a), including those employees on leave of
absence (including short-term disability leave if the employee is
reasonably expected to return to active employment) or layoff, as of the
Closing Date, and Company shall use its Reasonable Best Efforts to have
the employees accept such offers. Employees of the Company who accept
such offers and who are employed by Buyer immediately after the Closing
shall be referred to herein as "Transferred Employees."
6.1.(b) Divisional and Sales Staff Employees. Beginning on the
date of this Agreement and ending five days prior to the Closing Date,
Buyer may interview and offer employment, effective as of the Effective
Time to any of the divisional and sales staff employees of Company
identified on Schedule 6.1.(b) (the "Divisional and Sales Staff
Employees") at such compensation and benefits that Buyer shall determine
in its sole discretion. Buyer shall provide a written notice to Company
at least five days prior to the Closing Date of those Divisional and
Sales Staff Employees to whom Buyer has offered or intends to offer
employment and Company agrees to use its Reasonable Best Efforts to have
such employees accept such offers. Any Divisional and Sales Staff
Employees who accept such offers and are employed by Buyer immediately
after the Closing Date shall also be considered to be "Transferred
Employees" for purposes of this Agreement.
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6.1.(c) Union Employees.
(i) Offer of Employment. Buyer agrees to offer employment
in similar positions to all employees of the Juice Division
represented by the Teamsters Union who are presently employed
principally in connection with the ownership and operation of the
Purchased Assets, including those employees on leave of absence
(including short-term disability leave if the employee is
reasonably expected to return to active employment) or layoff,
except those employees who are listed on Schedule 6.1.(c). Any
union employees who accept such offers and are employed by Buyer
immediately following the Closing Date shall be referred to as
"Transferred Union Employees." Transferred Union Employees shall
also be considered to be Transferred Employees for purposes of
this Agreement.
(ii) Union Contract. The Union Contract expires on January
15, 1999. The parties contemplate Closing Date will occur prior to
expiration of the Union Contract. If Closing Date occurs prior to
expiration of the Union Contract, Buyer agrees to take one of the
following actions prior to or at Closing: (1) assume, with consent
of the Teamsters Union, the Union Contract; (2) negotiate a new
collective bargaining agreement with the Teamsters Union covering
the time period after Closing, under which the Teamsters Union
will waive any claims against Company under the Union Contract
arising during or based on the time period between Closing Date
and January 15, 1999; or (3) indemnify, defend, and hold harmless
Company for any liabilities it incurs under the Union Contract
arising during the period from Closing Date to January 15, 1999,
as a result of the sale of the ▇▇▇▇▇▇▇ facility to Buyer. If the
Closing occurs after expiration of the Union Contract, Buyer
agrees to recognize the Union as the bargaining representative for
the hourly employees at ▇▇▇▇▇▇▇, and to satisfy its duty to
bargain with the Union before making any changes in the terms and
conditions of employment for those employees. Buyer agrees to
indemnify, defend, and hold harmless Company from any liabilities
it incurs as a result of any unlawful failure to bargain by Buyer
after Closing with respect to the ▇▇▇▇▇▇▇ facility. Buyer and
Company agree they will mutually use their reasonable best efforts
to secure a release from the Union of any obligations or
liabilities Company has or may have to the bargaining unit
employees or the Teamsters Union arising prior to Closing Date
under the Union Contract. The parties contemplate this release
could either be a stand alone agreement or part of a new
collective bargaining agreement between Buyer and the Union or
contained in an assignment and assumption agreement.
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6.1.(d) Warn Act Notices. Buyer further agrees to assume
responsibility for providing any and all notices which may be required
pursuant to state and federal plant closing/mass layoff statutes
(including WARN Act and Wisconsin Statutes Section 109.07) for employees
of Company losing employment after the Effective Time as a result of
transactions contemplated by this Agreement or following the Closing Date
for any reason.
6.1.(e) Vacation Pay. To the extent taken into account on the
Final Closing Balance Sheet or credited to Buyer in accordance with
Section 3.4, Buyer agrees to provide paid vacation or to pay accrued
vacation pay to each Transferred Employee substantially in accordance
with the Company's vacation policy, to the extent the employee has
accrued vacation under the Company's vacation policy through the
Effective Time.
Except as provided in Section 6.1.(c) and (e), nothing in this Section 6.1 shall
be deemed to require Buyer to employ any such person for any period of time or
to maintain any specific benefit plan, provided that any such terminations shall
not trigger any liability to Company under the WARN Act and Wisconsin Statutes
ss. 109.07 or other state plant closing/mass layoff statutes.
6.2. Retained Responsibilities. Company agrees to satisfy, or cause its
insurance carriers to satisfy, all claims for benefits, whether insured or
otherwise under its workers' compensation, life insurance, medical and
disability and Family Medical Leave Act programs, brought by, or in respect of,
Transferred Employees and Transferred Union Employees and other employees and
former employees of the Company, which claims were incurred prior to the
Effective Time, in accordance with the terms and conditions of such programs or
applicable workers' compensation statutes without interruption as a result of
the employment by Buyer of any such employees after the Effective Time.
For purposes of this Section 6.2, a Benefit Claim shall be deemed to have
been incurred prior to the Effective Time as follows:
(i) For workers compensation claims, a claim shall be
deemed to have been incurred on the date of injury,
(ii) For life insurance claims, the claim shall be deemed
to have been incurred on the date of death,
(iii) For claims under medical and dental policies, the
claim shall be deemed to have been incurred on the date on which
the covered service is provided, regardless of when the condition
or illness occurred or the date of billing for the covered
services.
(iv) For disability claims for employees on long-term
disability or short-term disability that are not expected to
return to active employment as of the Effective Time (who are not
Transferred Employees), the claim shall be deemed to have been
incurred prior to the Effective Time. For
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Transferred Employees on short-term disability who are expected to
return to active employment and with respect to whom there is an
accrued liability for the estimated disability benefits on the
Closing Balance Sheet payable to such Transferred Employee, the
claim shall be deemed to have been incurred at the time the
benefit accrues to the employee under the applicable program or
policy.
6.3. Payroll Tax. Company agrees to make a clean cut-off of payroll and
payroll tax reporting with respect to the Transferred Employees and Transferred
Union Employees paying over to the federal, state and city governments those
amounts respectively withheld or required to be withheld for periods ending on
or prior to the Effective Time. Company also agrees to issue, by the date
prescribed by IRS Regulations, Forms W-2 for wages paid through the Effective
Time. Buyer shall be responsible for all payroll and payroll tax obligations
after the Effective Time for Transferred Employees and Transferred Union
Employees.
6.4. Termination Benefits. Buyer shall be solely responsible for, and
shall pay or cause to be paid, severance payments and other termination
benefits, if any, to Transferred Employees and Transferred Union Employees who
may become entitled to such benefits by reason of any events occurring after the
Effective Time. If any action on the part of Company prior to the Closing, or if
the sale to Buyer of the business and assets of the Juice Division pursuant to
this Agreement or the transactions contemplated hereby, or if the failure by
Buyer to hire as a permanent employee of Buyer any employee of the Juice
Division, shall directly or indirectly result in any Liability for severance
payments or termination benefits, such Liability shall be the sole
responsibility of Company, and Company shall indemnify and hold harmless Buyer
against such Liability.
6.5. Employee Benefit Plans
6.5.(a) Defined Contribution Plans. With respect to each employee
pension benefit plan that is not a defined benefit plan ("defined
contribution plan") maintained by Company for any Transferred Employee or
Transferred Union Employee (Transferred Employees and Transferred Union
Employees are collectively referred to as "Covered Employees" for
purposes of this Section 6.5), (i) the eligibility of Covered Employees
for a matching contribution under the plan for 1998 shall be determined
without regard to any plan provision that would require the Covered
Employees to be employed on the last day of the plan year or any plan
provision that would disqualify the Covered Employees from receiving a
matching contribution as a result of the Covered Employees' termination
of employment from the Company in connection with this transaction, and
(ii) the Company shall vest and make non-forfeitable as of the Closing
Date the interest of each Covered Employee in each such defined
contribution plan.
6.5.(b) Defined Benefit Plans. With respect to each employee
pension benefit plan that is a defined benefit plan maintained by Company
for any Covered Employee, Company shall vest and make non-forfeitable the
accrued benefit of each Covered Employee.
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6.5.(c) Confirmation Regarding Terminations. Upon the reasonable
request of Company in connection with the distribution of benefits to
Covered Employees from employee pension benefit plans, Buyer shall
confirm to Company whether the employment of a Covered Employee with
Buyer has terminated and the date of such termination.
6.6. No Third-Party Rights. Nothing in this Agreement, express or
implied, is intended to confer upon any of Company's employees, former
employees, collective bargaining representatives, job applicants, any
association or group of such persons or any Transferred Employees or Transferred
Union Employees any rights or remedies of any nature or kind whatsoever under or
by reason of this Agreement, including, without limitation, any rights of
employment.
7. OTHER MATTERS
7.1. Title Insurance. Not less than 7 days prior to Closing, Company,
shall provide to Buyer title insurance commitments, issued by a title insurance
company or companies reasonably satisfactory to Buyer, agreeing to issue to
Buyer standard form owners (or lessee's, as the case may be) policies of title
insurance with respect to all Owned Real Property and Leased Real Property,
together with a copy of each document to which reference is made in such
commitments. In the case of Owned Real Property, such policies shall be standard
ALTA Form 1992 owner's policies in the full amount of that portion of the
Purchase Price allocated respectively to each subject parcel of Owned Real
Property under Section 3.6 hereof, insuring good and marketable title thereto
(expressly including all easements and other appurtenances and shall include
extended coverage deleting all of the standard exceptions). In either case, all
policies shall insure title in full accordance with the representations and
warranties set forth herein and shall be subject only to Permitted Real Property
Liens, liens described in Schedule 4.12.(a) and such other conditions and
exceptions as shall be reasonably acceptable to Buyer, and shall contain such
endorsements as Buyer shall reasonably request (including, but not limited to,
any gap coverage, zoning 3.1, access, location, owner's comprehensive and
contiguity and, if requested by Buyer or Buyer's lender, an endorsement over
rights of creditors). Buyer shall pay all of the title insurance premiums
incurred pursuant to this Section 7.1.
7.2. Surveys. Not less than 7 days prior to Closing, Company shall
provide to Buyer surveys of all Owned Real Property and all Leased Real Property
prepared in accordance with ALTA/ASCM standards, each dated no more than 90 days
prior to the Closing and each detailing the legal description, the perimeter
boundaries, all improvements located thereon, all easements and encroachments,
rights of way, utilities, rights and other matters affecting each such parcel of
Owned Real Property and such other matters as may be reasonably requested by
Buyer or the title insurance companies, each containing a surveyor certificate
reasonably acceptable to Buyer and the title insurance companies, and each
prepared by a registered land surveyor satisfactory to Buyer. Buyer shall pay
all of the survey costs incurred pursuant to this Section 7.2.
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7.3. Environmental Audits. Buyer will promptly retain, at its expense, a
firm or firms engaged in the regular business of environmental engineering to
conduct such environmental audits of the Purchased Facilities and other real
estate occupied by the Juice Division as Buyer in its discretion shall consider
necessary or appropriate.
7.4. Seneca License Agreement. At the Closing, Company and Buyer shall
execute and deliver to Buyer a license agreement substantially in the form
attached hereto as Exhibit A, which shall grant to Buyer the sole and exclusive
99-year Seneca License described in Section 1.1.(k) to use the SENECA trademark
in association with juice, juice beverages, cranberry sauce and dried
cranberries, and retail and food services concentrates (shelf stable and frozen)
for juice and juice beverages.
7.5. Nonsolicitation of Employees. Subject to the Closing, and as an
inducement to the other party to execute this Agreement and complete the
transactions contemplated hereby, Company and Buyer each hereby covenants and
agrees that for a period of two years from the Closing Date, it will not,
directly or indirectly, hire, offer to hire, or solicit for employment any
executive- or division manager-level or salaried employee of the other party or
any person who, at any time during such two-year period, has been an executive-
or division manager-level or salaried employee of the other party, without the
prior consent of the other party, until such person has been separated from
employment by the other party for at least 90 days.
7.6. Confidential Information. Company shall not at any time subsequent to the
Closing, except as explicitly requested by Buyer, use for any purpose, disclose
to any person, or keep or make copies of documents, tapes, discs, programs or
other information storage media ("records") containing, any confidential
information concerning the Juice Division Business, the Purchased Assets, or the
Assumed Liabilities, all such information being deemed to be transferred to the
Buyer hereunder, except that Buyer shall make available to Company such records
for use for the purposes of operating its continuing businesses; corporate
administration, record keeping and preparation of reports required by insurers
and taxing, regulatory and other governmental authorities; and enforcement,
defense, dispute resolution and other matters concerning accounts receivable,
liabilities, claims and other matters which are, or are related to, Excluded
Assets, liabilities, contracts and rights and obligations not acquired by Buyer.
For purposes hereof, "confidential information" shall mean and include, without
limitation, all Juice Division Trade Rights in which Company has an interest,
all Juice Division customer and vendor lists and related information, all
information concerning the Juice Division's processes, products, costs, prices,
sales, marketing and distribution methods, properties and assets, liabilities,
finances, employees, all privileged communications and work product, and any
other information not previously disclosed to the public directly by Company.
The foregoing provisions shall not apply to any information which is an
"Excluded Asset" as defined in Section 1.2, or which relates primarily to one or
more Excluded Assets. If at any time after Closing, Company should discover that
it is in possession of any records containing the confidential information of
Buyer, then the Company shall immediately turn such records over to Buyer, which
shall upon request make available to the Company any information contained
therein which is not confidential information. Company agrees that it will not
assert a waiver or loss of confidential or privileged status of the information
based upon such possession or discovery. Company hereby consents to Buyer's
consultation with
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legal, accounting and other professional advisors to Company concerning advice
rendered to Company prior to the Closing regarding the Juice Division Business,
the Purchased Assets or the Assumed Liabilities, excluding, however, the
negotiation and drafting of this Agreement and the transactions entered into
pursuant hereto.
7.7. ▇▇▇▇▇▇▇ Sauerkraut Facility Lease and Shared Use Agreement. At the
Closing, Company and Buyer shall enter into a Lease and Shared Use Agreement
substantially in the form attached hereto as Exhibit B, which shall provide for
a lease of the ▇▇▇▇▇▇▇ Sauerkraut Facility to Company and use of certain common
areas and utilities of the ▇▇▇▇▇▇▇ Plant for a lease term and upon certain other
terms and conditions to be negotiated in good faith by the parties prior to
Closing.
7.8. HSR Act Filings. To the extent such filings have not been completed
prior to the execution of this Agreement, each of Company and Buyer shall, in
cooperation with the other, file any reports or notifications that may be
required to be filed by it under the HSR Act, with the Federal Trade Commission
and the Antitrust Division of the Department of Justice, and shall furnish to
the other all such information in its possession as may be necessary for the
completion of the reports or notifications to be filed by the other. Prior to
making any communication, written or oral, with the Federal Trade Commission,
the Antitrust Division of the federal Department of Justice or any other
governmental agency or authority or members of their respective staffs with
respect to this Agreement or the transactions contemplated hereby, the parties
agree to consult with the other. Company shall pay the filing fees for the HSR
application and notification made pursuant to this Section 7.8.
7.9. ▇▇▇▇▇▇▇ Co-Packing Agreement. At the Closing, Company and Buyer
shall enter into a Contract Packing Agreement substantially in the form of
Exhibit C, which shall provide for contract packing of Buyer's juice and juice
beverage products by Company at its ▇▇▇▇▇▇▇ Plant.
7.10. Can Supply Agreement. At the Closing, Company and Buyer shall enter
into a Can Supply Agreement substantially in the form of Exhibit D, which shall
provide for the supply by Company to Buyer of all of Buyer's can requirements
for the Juice Division Business.
7.11. Stock Resale Agreement; Prospectus Supplement. At the Closing,
Company and Buyer shall enter into a Stock Resale Agreement substantially in the
form of Exhibit E, which shall provide for mutual adjustments based on the
resale price of the Northland Stock issued pursuant to Section 3.2.(c) hereof
("Stock Resale Agreement"). No later than the first business day following the
Closing Date, Buyer will file with the SEC all necessary supplements or
amendments to the Registration Statement required under the Securities Act of
1933 with respect to the Northland Stock and will promptly deliver a copy of all
prospectus supplements to Company to facilitate and allow Company's public
resale of the Northland Stock under and pursuant to the Registration Statement
and the Stock Resale Agreement.
7.12. Product Liability Matters. At or prior to the Closing, Company at
its expense shall cause Buyer to be named as an additional insured under each of
its occurrence-type
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policy or policies of insurance insuring against claims for personal injury and
property damage arising out of or resulting from any products manufactured by
the Juice Division prior to the Closing Date. At the Closing, Company shall
deliver to Buyer one or more certificates of insurance evidencing that the
insurance to be obtained by it pursuant to this Section is in effect and
providing for notification to Buyer at least ten days prior to the effective
date of any termination or cancellation of such insurance if such effective date
occurs prior to the end of the period referred to in the next sentence. The
insurance coverage set forth in this Section shall be maintained by Company in
an amount of not less than $1,000,000 for a period of two years following the
Closing, with a deductible not exceeding $200,000.
7.13. Audit of Juice Division Financial Statements. Company shall prepare
and deliver to Buyer by the Closing Date complete Financial Statements of its
Juice Division and the Juice Division Business for the years ended March 31,
1998 and March 31, 1997 which financial statements shall be prepared in
accordance with GAAP. Such financial statements shall be audited by Deloitte &
Touche, LLP, Company's accountants, which shall render its unqualified opinion
thereon. Buyer shall pay all reasonable expenses of Company's accountants in
providing such services.
7.14. Sales Tax Matters. Prior to Closing, Company shall obtain a Tax
Clearance Certificate from the State of Michigan Department of Taxation and
Finance, a statement from the North Carolina Department of Revenue certifying
that Company has no unpaid North Carolina sales tax liability. Prior to Closing,
Buyer shall request a sales and use tax clearance certificate from the Wisconsin
Department of Revenue and shall file all necessary reports required for bulk
transfers of business assets with the State of New York Department of Taxation
and Finance. Within 30 days following Closing, Company shall file all Wisconsin
sales and use tax returns due with respect to the ▇▇▇▇▇▇▇ Facility or the
sellers permit issued with respect thereto, such that the sales and use tax
clearance certificate can be issued.
7.15. Unemployment Compensation. Company shall, upon the request of
Buyer, cooperate with Buyer in any efforts by Buyer to obtain the transfer of
Company's portion of the Wisconsin unemployment compensation fund applicable to
Transferred Employees and Transferred Union Employees at the ▇▇▇▇▇▇▇ Plant, to
the extent Buyer elects to transfer and assume such amounts. Company shall also
cooperate, at Buyer's request, in any efforts by Buyer to obtain a transfer of
any similar fund applicable to Transferred Employees in Michigan, North Carolina
and New York, provided such transfer does not adversely affect Company or
Company's rating or the taxes, fees, contributions or assessments to be paid by
Company with respect to such funds. In connection therewith, Company will
execute such documents as Buyer may reasonably request in order to effectuate
such transfer.
7.16. Bulk Sales Compliance. Buyer hereby waives compliance by Company
with the applicable provisions of the bulk sales or bulk transfer statutes of
any state in which Juice Division assets are located.
7.17. Post-Closing Cooperation, Access and Records Retention. Company and
Buyer will use their respective Reasonable Best Efforts to cause all conditions
to its and the other parties' obligations hereunder to be timely satisfied and
to perform and fulfill all obligations on
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its part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be effect substantially in
accordance with its terms. The parties shall cooperate with each other in such
actions and in securing requisite approvals and consents. Each party shall
execute and deliver both before and after the Closing Date such further
certificates, agreements and other documents and records to consummate or
implement the transactions contemplated hereby or to evidence such events or
matters. Company and Buyer shall each permit authorized representatives of the
other, at all reasonable times after the Closing, access to their offices,
records and accounts which relate to Company prior to the closing for the
purpose of obtaining any information necessary or desirable for the preparation
and filing of any tax returns or other reports to any governmental agency for
any period or for any other purpose reasonably related to the rights or
obligations of the parties under this Agreement. Without limiting the generality
of the foregoing, Buyer will furnish reasonable assistance to Company in matters
which pertain to accounts receivable, liabilities, obligations and contract or
other rights and obligations retained by Company and not acquired or assumed by
Buyer if Company believes that information with respect to claims or liabilities
asserted by or against Company is, or may be, available from records or other
Purchased Assets acquired by Buyer or from Transferred Employees, Transferred
Union Employees or other former employees of Company who have entered Buyer's
employment. Such cooperation will include, among other things, giving Company
access to inspect records and to consult with such employees, permitting
Company, after consultation with Buyer, to copy the records and giving such
employees reasonable leave during working hours to meet with representatives of
Company, to furnish testimony or render other assistance to Company.
7.18. Transition. Company will not take any action that is designed or
intended to have the effect of discouraging any customer, supplier or other
business associate of the Juice Division from maintaining the same business
relationships with the Buyer and the Juice Division after the Closing as it
maintained with the Division prior to the Closing.
7.19. Publix LUA Agreements.
7.19.(a) Shelf-Stable LUA Agreement. Company has made a $1,236,000
payment to Publix Supermarkets, Inc. ("Publix") as a LUA fee pursuant to
a LUA proposal accepted August 14, 1998 between Publix and Company,
providing for the marketing by Publix of 200,000 cases of Seneca(C) brand
apple juice and cider products for cases shipped during the period
October 1, 1998 through January 31, 1999 (the "Shelf-Stable LUA
Agreement"). Buyer shall pay to Company following Closing on the 20th day
of each month beginning January 20, 1999, an amount equal to $1,236,000
multiplied by a ratio, the numerator of which is the number of cases
shipped by Buyer during the preceding calendar month and the denominator
of which is 200,000, provided that no cases shipped by Buyer shall be
included in the numerator to the extent that the total cases shipped by
Company and Buyer pursuant to the Publix Marketing Agreement ("Total
Cases") exceeds 200,000. Buyer shall be entitled to offset any payments
due Company pursuant to this Section 7.19.(a) against any amounts
determined to be due to Company pursuant to Section 7.20 below. If Total
Cases are less than 200,000, Company may receive any payment and due from
Publix under the Shelf-Stable LUA Agreement by reason of the shortfall in
Publix purchases.
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If Total Cases exceed 200,000, Buyer will pay to Publix the per case
payment for the excess cases due to Publix under the Shelf-Stable LUA
Agreement to the extent that the excess cases were shipped by Buyer after
Closing.
7.19.(b) Frozen LUA Agreement. Company has made a $104,908.50
payment to Publix as a LUA fee pursuant to an LUA agreement between
Publix and Company which has been in effect in 1998 and will be
automatically renewed on December 26, 1998 unless terminated by written
notice to Publix on or before December 18, 1998 (the "Frozen LUA
Agreement"). Publix and Company settle their respective obligations on a
quarterly basis, each quarter ending in accordance with Company's fiscal
quarter. The only quarter open is the current quarter ending December 26,
1998. The Frozen LUA Agreement provides for the marketing of 27,550 cases
in the aggregate for the period September 27, 1998 through December 26,
1998 of the following types of Seneca brand frozen juice products: (1)
Apple Juice; (2) Granny ▇▇▇▇▇ Apple Juice; (3) White Grape Juice; (4)
Natural Grape Juice; and (5) Cranberry Juice. Schedule 7.19.(b) sets
forth the LUA price per case for each type of frozen juice product and
the quantity of each type of frozen juice product Publix proposes to
purchase from Company.
On or before January 20, 1999, Buyer shall pay to Company an
amount equal to Buyer's shipments post-Closing to Publix of the number of
cases of the respective items listed on Schedule 7.19.(b) multiplied by
the per-case price indicated in Schedule 7.19.(b) pertaining to each item
and to the month of shipment by Buyer. If the total cases shipped in the
full quarter for any item are less than the quarterly totals listed in
the table, Company may receive any payment due from Publix by reason of
the shortfall in Publix purchases. If the total cases shipped exceed the
quarterly total for any item, Buyer will pay to Publix the per-case
payment for the cases due to Publix under the Frozen LUA Agreement to the
extent that the excess cases were shipped by Buyer after Closing. Buyer
shall be entitled to offset any payments due Company pursuant to this
Section 7.19.(b) against any amounts determined to be due to Company
pursuant to Section 7.20 below.
7.20. Slotting, Credits, Adjustments, Offsets; Coupons. On the Closing
Date, Company shall provide notices to all customers of the Juice Division to
which "slotting" offers remain outstanding, notifying them that such slotting
offers are withdrawn and requesting that they contact Buyer with respect to
future orders and promotions. All credits, offsets, cash discounts, other
discounts, trade allowances and deductions or other adjustments of any nature
whatsoever made by customers against invoices or ▇▇▇▇▇▇▇▇ of Buyer for products
of the Juice Division shipped after the Effective Time that relate to products
shipped by Company prior to the Effective Time shall be promptly reimbursed by
Company to Buyer. Buyer will prepare and deliver to Company a summary of all
such credits, offsets, etc. as of the 1st and 15th days of each month following
the Closing setting forth the amount, customer, reason given, if any, and date.
Company shall remit the amount of any such adjustments promptly upon receipt of
such summary. Buyer shall be entitled to offset any payments due Company
pursuant to Section 7.19 above against any amounts due and owing to Buyer
pursuant to this Section 7.20.
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Company shall be responsible for all redemption costs associated with coupons
issued or authorized by Company prior to the Closing Date, regardless of when
redeemed.
8. FURTHER COVENANTS OF COMPANY
Company covenants and agrees as follows:
8.1. Access to Information and Records. During the period prior to the
Closing:
8.1.(a) Information and Records. Company shall, and shall cause
its officers, employees, agents, independent accountants and advisors to,
furnish to Buyer, its officers, employees, agents, independent
accountants and advisors, at reasonable times and places, all information
in their possession concerning the Juice Division as may be requested,
and give such persons access to all of the properties, books, records,
contracts and other documents of or pertaining to the Juice Division that
Company or its officers, employees, agents, independent accountants or
advisors shall have in their custody, except documents pertaining to the
representation of Company in connection with the transactions
contemplated by this Agreement.
8.1.(b) Access to Business Contacts. With the prior consent of
Company in each instance (which consent shall not be unreasonably
withheld), Buyer and its officers, employees, agents, independent
accountants and advisors, shall have access to vendors, customers, and
others having business dealings with the Juice Division for the purpose
of performing Buyer's due diligence investigation.
8.2. Bank Accounts. Not less than ten days prior to the Closing, Company
shall provide to Buyer a list of each bank in which the Juice Division has an
account or safe deposit box, the name and number of each such account or box and
the names of all persons authorized to draw thereon or who have access thereto,
with the amounts they are authorized to draw.
8.3. Conduct of Business Pending the Closing. From the date hereof until
the Closing, except as otherwise approved in writing by the Buyer:
8.3.(a) No Changes. Company will carry on the business of the
Juice Division diligently and in the same manner as heretofore and will
not make or institute any material changes in its methods of purchase,
sale, management, accounting or operation.
8.3.(b) Maintain Organization. Company will take such action as
may be reasonably necessary to maintain, preserve, renew and keep in
favor and effect the existence, rights and franchises of the Juice
Division and will use its Reasonable Best Efforts to preserve the
business organization of the Juice Division intact, to keep available to
Buyer the present officers and employees, and to preserve for Buyer its
present relationships with suppliers and customers and others having
business relationships with the Juice Division.
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8.3.(c) No Breach. Company will not do or omit any act, or permit
any omission or act by any Affiliate, employee, or representative, which
may cause a breach of any material contract, commitment or obligation, or
any breach of any representation, warranty, covenant or agreement made by
Company herein, or which would have required disclosure on Schedule 4.8
had it occurred after the date of the Recent Balance Sheet and prior to
the date of this Agreement.
8.3.(d) No Material Contracts. Without the prior consultation with
and written consent of Buyer, no contract or commitment will be entered
into, and no purchase of raw materials or supplies and no sale of goods
or services (real, personal, or mixed, tangible or intangible) will be
made, by or on behalf of Company with respect to the Juice Division,
except contracts, commitments, purchases or sales which are in the
ordinary course of business and consistent with past practice, are not
material to the Company (individually or in the aggregate) and would not
have been required to be disclosed in the Disclosure Schedule had they
been in existence on the date of this Agreement.
8.3.(e) Maintenance of Insurance. Company shall maintain all of
the insurance in effect as of the date hereof with respect to the
operations of the Juice Division and the Purchased Assets.
8.3.(f) Maintenance of Property. Company shall use, operate,
maintain and repair all property of the Juice Division in a normal
business manner.
8.3.(g) Interim Financials. Company will provide Buyer with
interim monthly financial statements and other management reports for the
Juice Division promptly as and when they are available.
8.3.(h) No Negotiations. Company will not directly or indirectly
(through a representative or otherwise) solicit or furnish any
information to any prospective buyer, commence, or conduct presently
ongoing, negotiations with any other party or enter into any agreement
with any other party concerning the sale of the Juice Division, its
assets or business or any material part thereof (an "Acquisition
Proposal"), and Company shall immediately advise Buyer of the receipt of
any Acquisition Proposal.
8.4. Consents; Transfers of Permits and Licenses. Company will use its
Reasonable Best Efforts prior to Closing to obtain all consents necessary for
the consummation of the transactions contemplated hereby. Company will use its
Reasonable Best Efforts to cause all licenses, permits, approvals,
authorizations and consents identified in Schedule 4.11.(b) to be transferred or
reissued to Buyer as of the Closing Date and to cooperate fully with Buyer in
securing such transfers or reissues to Buyer.
8.5. Other Action. Company shall use its Reasonable Best Efforts to cause
the fulfillment at the earliest practicable date of all of the conditions to the
parties' obligations to consummate the transactions contemplated in this
Agreement.
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8.6. Disclosure. Company shall have a continuing obligation to promptly
notify Buyer in writing with respect to any matter hereafter arising or
discovered which, if existing or known at the date of this Agreement, would have
been required to be set forth or described in the Disclosure Schedule, but no
such disclosure shall cure any breach of any representation or warranty which is
inaccurate.
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of each of the
following conditions:
9.1. Representations and Warranties True on the Closing Date. Each of the
representations and warranties made by Company in this Agreement, and the
statements contained in the Disclosure Schedule or in any instrument, list,
certificate or writing delivered by Company pursuant to this Agreement, shall be
true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date as though such
representations and warranties were made or given on and as of the Closing Date,
except for any changes permitted by the terms of this Agreement or consented to
in writing by Buyer.
9.2. Compliance With Agreement. Company shall have in all material
respects performed and complied with all of its agreements and obligations under
this Agreement which are to be performed or complied with by it prior to or on
the Closing Date, including the delivery of the closing documents specified in
Section 12.1.
9.3. Absence of Litigation. No Litigation shall have been commenced or
threatened by a party other than Buyer or an affiliate of Buyer, and no
investigation by any Government Entity shall have been commenced, against Buyer,
Company or any of the affiliates, officers or directors of any of them, with
respect to the transactions contemplated hereby.
9.4. Consents and Approvals. All approvals, consents and waivers that are
set forth on Schedule 9.4 shall have been received, and executed counterparts
thereof shall have been delivered to Buyer not less than two business days prior
to the Closing. Notwithstanding the foregoing, receipt of the consent of any
third party to the assignment of a Contract which is not (and is not required to
be) disclosed in the Disclosure Schedule shall not be a condition to Buyer's
obligation to close, provided that the aggregate of all such Contracts does not
represent a material portion of Company's sales or expenditures. After the
Closing, Company will continue to use its Reasonable Best Efforts to obtain any
such consents or approvals, and Company shall not hereby be relieved of any
liability hereunder for failure to perform any of its respective covenants or
for the inaccuracy of any representation or warranty.
9.5. Title Insurance; Surveys. Buyer shall have obtained good and valid
title insurance policies or, in final form, irrevocable title insurance binders,
dated as of the Effective Time, conforming to the specifications set forth in
Section 7.1 hereof. Buyer shall have received the surveys described in Section
7.2 hereof conforming to the specifications set forth therein.
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9.6. Financing. Buyer shall have obtained, on terms and conditions
reasonably satisfactory to it, approval from ▇▇▇▇▇▇ Bank & Trust under Buyer's
[Term Loan] Agreement for advances sufficient to provide to Buyer all of the
financing needed in order to consummate the transactions contemplated hereby and
fund the working capital requirements of the Juice Division after the Closing.
9.7. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
9.8. Section 1445 Affidavit. Company shall have delivered to Buyer an
affidavit, in form satisfactory to Buyer, to the effect that Company is not a
"foreign person," "foreign corporation," "foreign partnership," "foreign trust,"
or "foreign estate" under Section 1445 of the Code, and containing all such
other information as is required to comply with the requirements of such
Section.
9.9. Environmental Audit. The results of the environmental audit
conducted pursuant to Section 7.3 shall not have disclosed any past or present
condition, process or practice with respect to the Juice Division or with
respect to the ▇▇▇▇▇▇▇ Sauerkraut Facility or the Purchased Facilities or any
other any property owned, occupied or operated by the Juice Division which is
not in compliance in all natural respects with all applicable Environmental Laws
or which otherwise requires remediation under any Environmental Law (except for
the conditions described on Schedule 2.2.(g)), if a reasonable estimate by Buyer
of the cost of remediation, or the potential liability to third persons
(including statutory liability) arising from such condition, process or
practice, or the cost of bringing Company or such property into full compliance
with all applicable Environmental Laws, would exceed $300,000 in the aggregate
with respect to all matters described in this Section.
Buyer may waive any condition set forth in this Article 9 by executing and
delivering to Company a written waiver thereof prior to the Closing.
10. CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS
Each and every obligation of Company to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
conditions:
10.1. Representations and Warranties True on the Closing Date. Each of
the representations and warranties made by Buyer in this Agreement shall be true
and correct in all material respects when made and shall be true and correct in
all material respects at and as of the Closing Date as though such
representations and warranties were made or given on and as of the Closing Date.
10.2. Compliance With Agreement. Buyer shall have in all material
respects performed and complied with all of Buyer's agreements and obligations
under this Agreement which are to be performed or complied with by Buyer prior
to or on the Closing Date, including the delivery of the closing documents
specified in Section 12.2.
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10.3. Absence of Litigation. No Litigation shall have been commenced or
threatened, and no investigation by any Government Entity shall have been
commenced, against Buyer, Company or any of the affiliates, officers or
directors of any of them, with respect to the transactions contemplated hereby;
provided that the obligations of Company shall not be affected unless there is a
reasonable likelihood that as a result of such action, suit, proceeding or
investigation Company will be unable to retain substantially all the
consideration to which it is entitled under this Agreement.
10.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
10.5. Consents and Approvals. All consents and approvals of the lenders
and other entities identified on Schedule 10.5, which consents or approvals are
required pursuant to agreements or other commitments of Company, shall have been
obtained by Company.
Company may waive any condition set forth in this Article 10 by executing and
delivering to Buyer a written waiver thereof prior to the Closing.
11. INDEMNIFICATION
11.1. By Company. Subject to the terms and conditions of this Article 11,
Company hereby agrees to indemnify, defend and hold harmless Buyer, and its
directors, officers, employees and controlled and controlling persons
(hereinafter "Buyer's Affiliates"), from and against all Claims asserted
against, resulting to, imposed upon, or incurred by Buyer, Buyer's Affiliates or
the business and assets transferred to Buyer pursuant to this Agreement,
directly or indirectly, by reason of, arising out of or resulting from
11.1.(a) the inaccuracy or breach of any representation or warranty of
Company contained in or made pursuant to this Agreement (regardless of whether
such breach is deemed "material");
11.1.(b) the breach of any covenant of Company contained in this
Agreement (regardless of whether such breach is deemed "material");
11.1.(c) any Claim brought by or on behalf of any broker or finder
retained, employed or used by Company or any of its directors, officers,
employees or agents in connection with the transactions provided for herein or
the negotiation thereof, whether or not disclosed herein; or
11.1.(d) any Claim against Company, the Purchased Assets or the business
of Company not specifically assumed by Buyer pursuant hereto.
As used in this Article 11, the term "Claim" shall include (i) all Liabilities;
(ii) all losses, damages, judgments, awards, penalties and settlements; (iii)
all demands, claims, suits, actions, causes of action, proceedings and
assessments, whether or not ultimately determined to be valid; and (iv) all
costs and expenses (including, without limitation, interest (including
prejudgment interest in any litigated or arbitrated matter), court costs and
reasonable fees and
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expenses of attorneys and expert witnesses) of investigating, defending or
asserting any of the foregoing or of enforcing this Agreement.
11.2. By Buyer. Subject to the terms and conditions of this Article 11,
Buyer hereby agrees to indemnify, defend and hold harmless Company and its
directors, officers, employees and controlling persons from and against all
Claims asserted against, resulting to, imposed upon or incurred by any such
person, directly or indirectly, by reason of or resulting from (a) the
inaccuracy or breach of any representation or warranty of Buyer contained in or
made pursuant to this Agreement (regardless of whether such breach is deemed
"material"); (b) the breach of any covenant of Buyer contained in this Agreement
(regardless of whether such breach is deemed "material"); (c) all Claims of or
against Company specifically assumed by Buyer pursuant hereto; or (d) conduct of
the Business by Buyer after the Closing.
11.3. Indemnification of Third-Party Claims. The following provisions
shall apply to any Claim subject to indemnification which is (i) a suit, action
or arbitration proceeding filed or instituted by any third party, or (ii) any
other form of proceeding or assessment instituted by any Government Entity:
11.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will give the
party from whom indemnification is sought (the "Indemnifying Party")
prompt written notice of any such Claim, and the Indemnifying Party will
undertake the defense thereof by representatives chosen by it. The
assumption of defense shall constitute an admission by the Indemnifying
Party of its indemnification obligation hereunder with respect to such
Claim, and its undertaking to pay directly all costs, expenses, damages,
judgments, awards, penalties and assessments incurred in connection
therewith. Failure to give such notice shall not affect the Indemnifying
Party's duty or obligations under this Article 11, except to the extent
the Indemnifying Party is prejudiced thereby. So long as the Indemnifying
Party is defending any such Claim actively and in good faith, the
Indemnified Party shall not settle such Claim. The Indemnified Party
shall make available to the Indemnifying Party or its representatives all
records and other materials required by them and in the possession or
under the control of the Indemnified Party, for the use of the
Indemnifying Party and its representatives in defending any such Claim,
and shall in other respects give reasonable cooperation in such defense.
11.3.(b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to defend such
Claim actively and in good faith, the Indemnified Party will (upon
further notice) have the right to undertake the defense, compromise or
settlement of such Claim or consent to the entry of a judgment with
respect to such Claim, on behalf of and for the account and risk of the
Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise,
settlement or consent to judgment.
11.3.(c) Indemnified Party's Rights. Anything in this Article 11
to the contrary notwithstanding, (i) if there is a reasonable probability
that a Claim may
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materially and adversely affect the Indemnified Party other than as a
result of money damages or other money payments, the Indemnified Party
shall have the right to defend, compromise or settle such Claim (with the
prior written consent of the Indemnifying Party, which shall not
unreasonably be withheld), and (ii) the Indemnifying Party shall not,
without the written consent of the Indemnified Party, settle or
compromise any Claim or consent to the entry of any judgment which does
not include as an unconditional term thereof the giving by the claimant
or the plaintiff to the Indemnified Party of a release from all Liability
in respect of such Claim.
11.4. Payment The Indemnifying Party shall promptly pay the Indemnified
Party any amount due under this Article 11, which payment may be accomplished in
whole or in part, at the option of the Indemnified Party, by the Indemnified
Party setting off any amount owed to the Indemnifying Party by the Indemnified
Party. To the extent set-off is made by an Indemnified Party in satisfaction or
partial satisfaction of an indemnity obligation under this Article 11 that is
disputed by the Indemnifying Party, upon a subsequent determination by final
judgment not subject to appeal that all or a portion of such indemnity
obligation was not owed to the Indemnified Party, the Indemnified Party shall
pay the Indemnifying Party the amount which was set off and not owed together
with interest from the date of set-off until the date of such payment at an
annual rate equal to the prime lending rate then being published by money center
banks. Upon judgment, determination, settlement or compromise of any third party
Claim, the Indemnifying Party shall pay promptly on behalf of the Indemnified
Party, and/or to the Indemnified Party in reimbursement of any amount
theretofore required to be paid by it, the amount so determined by judgment,
determination, settlement or compromise and all other Claims of the Indemnified
Party with respect thereto, unless in the case of a judgment an appeal is made
from the judgment. If the Indemnifying Party desires to appeal from an adverse
judgment, then the Indemnifying Party shall post and pay the cost of the
security or bond to stay execution of the judgment pending appeal. Upon the
payment in full by the Indemnifying Party of such amounts, the Indemnifying
Party shall succeed to the rights of such Indemnified Party, to the extent not
waived in settlement, against the third party who made such third party Claim.
11.5. Indemnification for Environmental Matters. Without limiting the
generality of the foregoing, Company agrees to indemnify, reimburse, hold
harmless and defend Buyer for, from, and against all Claims asserted against,
imposed on, or incurred by Buyer, directly or indirectly, in connection with any
pollution, threat to the environment, or exposure to, or manufacture,
processing, distribution, use, treatment, generation, transport or handling,
disposal, emission, discharge, storage or release of Hazardous Substances that
(A) is related in any way to (i) any Purchased Asset or Purchased Facility or
(ii) Company's or any previous owner's or operator's ownership, operation or
occupancy of the business, properties and assets being transferred to Buyer, and
(B) in whole or in part occurred, existed, arose out of conditions or
circumstances that existed, or was caused on or before the Closing Date.
Notwithstanding anything in the foregoing to the contrary in this Section 11.5,
Company shall not be required to indemnify Buyer with respect to any matter,
condition or circumstance described in this Section 11.5 which, at Closing, did
not constitute a violation of any Environmental Law or did not require
remediation or corrective action under any Environmental Law.
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11.6. Limitations on Indemnification. Except for fraud or any intentional
misrepresentation, as to which claims may be brought without limitation as to
time or amount:
11.6.(a) Time Limitation. No claim or action shall be brought
under this Article 11 for breach of a representation or warranty after
the lapse of two years following the Closing. Regardless of the
foregoing, however, or any other provision of this Agreement:
(i) There shall be no time limitation on claims on actions
brought for breach of any representation or warranty made in or
pursuant to Sections 4.1, 4.2, 4.11.(c), and 4.12.(a) and Company
hereby waives all applicable statutory limitation periods with
respect thereto.
(ii) Any claim or action brought for breach of any
representation or warranty made in or pursuant to Section 4.5 may
be brought at any time until the underlying tax obligation is
barred by the applicable period of limitation under federal and
state laws relating thereto (as such period may be extended by
waiver).
(iii) With respect to Claims described in Sections 11.1.(c)
and 11.1.(d), there shall be no time limit on claims for
indemnification.
(iv) With respect to Claims described in Section 11.5, no
claim or action shall be brought after the lapse of seven years
following the Closing.
(v) Any claim made by a party hereunder by a demand for
arbitration in accordance with Article 14 hereof for breach of a
representation or warranty prior to the termination of the
survival period for such claim shall be preserved despite the
subsequent termination of such survival period.
(vi) If any act, omission, disclosure or failure to
disclosure shall form the basis for a claim for breach of more
than one representation or warranty, and such claims have
different periods of survival hereunder, the termination of the
survival period of one claim shall not affect a party's right to
make a claim based on the breach of representation or warranty
still surviving.
11.6.(b) Amount Limitation. Except with respect to claims for
breaches of representations or warranties contained in Sections 4.7 (with
respect to the fourth and fifth sentences thereof), 4.24 or 5.4, an
Indemnified Party shall not be entitled to indemnification under this
Article 11 for breach of a representation or warranty unless the
aggregate of the Indemnifying Party's indemnification obligations to the
Indemnified Party pursuant to this Article 11 (but for this Section
11.6.(b)) exceeds $300,000 but in such event, the Indemnified Party shall
be entitled to indemnification in full for all breaches of
representations and/or warranties. With respect to claims for breaches of
representations or warranties contained in the fourth and fifth sentences
of
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Section 4.7, the Buyer shall not be entitled to indemnification under
this Article 11 for a breach of such representation or warranty unless
the aggregate of the Company's indemnification obligations under this
Article 11 with respect thereto (but for this Section 11.6.(b)) exceeds
$50,000. Company shall not be required to indemnify Buyer for Claims
under this Article 11 for breaches of warranties or representations to
the extent the aggregate of such Claims exceeds the Purchase Price.
11.6.(c) Insurance Offset. The obligation of an Indemnifying Party
to indemnify any Claim under this Article 11 shall be reduced by any
amounts actually and irrevocably recovered by the Indemnified Party with
respect to such Claim or the underlying facts under insurance policies,
(i) net of any increase that will occur, or is reasonably likely to
occur, in insurance premiums payable by the Indemnified Party, whether by
retrospective premium adjustments or any other premium increase under the
policy or policies under which the claim is made or any other policy,
where the increase results directly from filing the insurance claim and
(ii) less, dollar for dollar, the amount by which the insurance claim
when filed or at any time during the applicable policy period, either
singly or in the aggregate with all other claims made under the
applicable policy or policies, exceeds the policy coverage limit;
provided, however, that this subsection shall apply only if this
provision does not constitute an improper waiver of the insurer's rights
of subrogation against the Indemnifying Party. Nothing contained in this
Section 11.6.(c) shall be deemed to create an obligation of any party
hereto to maintain any form or level of insurance after the Closing, to
name any other party as an additional insured or to obtain approval for
any waiver of rights of subrogation, except as otherwise expressly
provided in this Agreement.
11.7. No Waiver. The closing of the transactions contemplated by this
Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has knowledge of the breach, violation or failure of condition
constituting the basis of the Claim at or before the Closing, and regardless of
whether such breach, violation or failure is deemed to be "material".
12. CLOSING
The closing of this transaction ("▇▇▇ ▇▇▇▇▇▇▇") shall take place at the
offices of ▇▇▇▇▇ & Lardner, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ at 9:00 A.M. on December 29, 1998 (provided all conditions set forth in
Articles 9 and 10 have been waived or satisfied), or at such other time and
place as the parties hereto shall agree upon. Such date is referred to in this
Agreement as the "Closing Date".
12.1. Documents to be Delivered by Company.. At the Closing, Company
shall deliver to Buyer the following documents, in each case duly executed or
otherwise in proper form:
12.1.(a) Deeds, Bills of Sale. Warranty deeds to real estate and
bills of sale and such other instruments of assignment, transfer,
conveyance and endorsement as
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will be sufficient in the opinion of Buyer and its counsel to transfer,
assign, convey and deliver to Buyer the Purchased Assets as contemplated
hereby.
12.1.(b) Compliance Certificate. A certificate signed by the chief
executive officer of Company that each of the representations and
warranties made by Company in this Agreement is true and correct in all
material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made or given on and
as of the Closing Date (except for any changes permitted by the terms of
this Agreement or consented to in writing by Buyer), and that Company has
performed and complied with all of Company's obligations under this
Agreement which are to be performed or complied with on or prior to the
Closing Date.
12.1.(c) Opinion of Counsel. A written opinion of ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ & Mugel, LLP, counsel to Company, dated as of the Closing
Date, addressed to Buyer, substantially in the form of Exhibit F hereto.
12.1.(d) License Agreement. The License Agreement referred to in
Section 7.4, duly executed by the Company.
12.1.(e) Lease and Shared Use Agreement. The Lease and Shared Use
Agreement referred to in Section 7.7, duly executed by Company.
12.1.(f) Contract Packing Agreement. The Contract Packing
Agreement referred to in Section 7.9, duly executed by Company.
12.1.(g) Can Supply Agreement. The Can Supply Agreement referred
to in Section 7.10, duly executed by Company.
12.1.(h) Stock Resale Agreement. The Stock Resale Agreement
referred to in Section 7.11 duly executed by the Company.
12.1.(i) Mortgage and Security Releases. Releases of mortgages,
liens and/or financing statements to the extent necessary to terminate
any liens against, or security interests in, any of the Purchased Assets.
12.1.(j) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Company authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
12.1.(k) Certificate of Incorporation: By-laws. A copy of the
By-laws of Company certified by the secretary of Company, and a copy of
the Certificate of Incorporation of Company certified by the Secretary of
State of the state of New York.
12.1.(l) Incumbency Certificate. Incumbency certificates relating
to each person executing any document executed and delivered to Buyer
pursuant to the terms hereof.
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12.1.(m) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as Buyer may reasonably request.
12.2. Documents to be Delivered by Buyer. At the Closing, Buyer shall
deliver to Company the following documents, in each case duly executed or
otherwise in proper form:
12.2.(a) Cash Purchase Price. To Company, cash in the amount
required pursuant to Section 3.2.(b) by wire transfer of immediately
available funds.
12.2.(b) Northland Stock. To Company, a certificate or certificate
for the number of shares of Northland Stock to be issued by Buyer as
required by Section 3.2.(b) hereof.
12.2.(c) Assumption of Liabilities. Such undertakings and
instruments of assumption as will be reasonably sufficient in the opinion
of Company and its counsel to evidence the assumption of the Assumed
Liabilities as provided for in Article 2 and Section 3.2.(a).
12.2.(d) Compliance Certificate. A certificate signed by the chief
executive officer of Buyer that the representations and warranties made
by Buyer in this Agreement are true and correct on and as of the Closing
Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date (except for any
changes permitted by the terms of this Agreement or consented to in
writing by Company), and that Buyer has performed and complied with all
of Buyer's obligations under this Agreement which are to be performed or
complied with on or prior to the Closing Date.
12.2.(e) Opinion of Counsel. A written opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel to Buyer, dated as of the Closing Date, addressed to Company, in
substantially the form of Exhibit G hereto.
12.2.(f) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and approving
this Agreement and the consummation of the transactions contemplated by
this Agreement.
12.2.(g) Seneca License Agreement. The Seneca License Agreement
referred to in Section 7.4, duly executed by Buyer.
12.2.(h) Lease and Shared Use Agreement. The Lease and Shared Use
Agreement referred to in Section 7.7, duly executed by Buyer.
12.2.(i) Contract Packing Agreement. The Contract Packing
Agreement described in Section 7.9, duly executed by Buyer.
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12.2.(j) Can Supply Agreement. The Can Supply Agreement described
in Section 7.10, duly executed by Buyer.
12.2.(k) Stock Resale Agreement. The Stock Resale Agreement
described in Section 7.11, duly executed by Buyer.
12.2.(l) Incumbency Certificate. Incumbency certificates relating
to each person executing any document executed and delivered to Company
by Buyer pursuant to the terms hereof.
12.2.(m) Other Documents. All other documents, instruments or
writings required to be delivered to Company at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as Company may reasonably request.
13. TERMINATION
13.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:
13.1.(a) Mutual Agreement. By mutual written agreement of Buyer
and Company, or
13.1.(b) Termination Date. By either Buyer or Company if the
Closing shall not have occurred on or before January 31, 1999, provided
the terminating party has not, through breach of a representation,
warranty or covenant, prevented the Closing from occurring on or before
such date.
13.2. Termination for Breach.
13.2.(a) Termination by Buyer. If (i) there has been a material
violation or breach by Company of any of the agreements, representations
or warranties contained in this Agreement which has not been waived in
writing by Buyer, or (ii) there has been a failure of satisfaction of a
condition to the obligations of Buyer which has not been so waived, or
(iii) Company shall have attempted to terminate this Agreement under this
Article 13 or otherwise without grounds to do so, then Buyer may, by
written notice to Company at any time prior to the Closing that such
violation, breach, failure or wrongful termination attempt is continuing,
terminate this Agreement with the effect set forth in Section 13.2.(c)
hereof.
13.2.(b) Termination by Company. If (i) there has been a material
violation or breach by Buyer of any of the agreements, representations or
warranties contained in this Agreement which has not been waived in
writing by Company, or (ii) there has been a failure of satisfaction of a
condition to the obligations of Company which has not been so waived, or
(iii) Buyer shall have attempted to terminate this Agreement under this
Article 13 or otherwise without grounds to do so, then Company may, by
written notice to Buyer at any time prior to the Closing that such
violation, breach,
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failure or wrongful termination attempt is continuing, terminate this
Agreement with the effect set forth in Section 13.2.(c) hereof.
13.2.(c) Effect of Termination. Termination of this Agreement by
Buyer pursuant to clauses (i) or (iii) of Section 13.2.(a) or by Company
pursuant to clauses (i) or (iii) of Section 13.2.(b) shall not in any way
terminate, limit or restrict the rights and remedies of any party hereto
against the other party. In addition to the right of any party under
common law to redress for any such breach or violation, each party whose
breach or violation has occurred prior to termination shall jointly and
severally indemnify each other party for whose benefit such
representation, warranty, covenant, agreement or other provision was made
("indemnified party") from and against all losses, damages (including,
without limitation, consequential damages), costs and expenses
(including, without limitation, interest (including prejudgment interest
in any litigated matter), penalties, court costs, and attorneys fees and
expenses) asserted against, resulting to, imposed upon, or incurred by
the indemnified party, directly or indirectly, by reason of, arising out
of or resulting from such breach or violation. Subject to the foregoing,
the parties' respective obligations under Sections 15.3 and 15.9 of this
Agreement and the Confidentiality Agreement dated April 20, 1998 shall
survive termination indefinitely.
14. RESOLUTION OF DISPUTES
14.1. Arbitration. After the Closing, any dispute, controversy or claim
arising out of or relating to this Agreement or the negotiation hereof or entry
hereunto or any contract or agreement entered into pursuant hereto or the
performance by the parties of its or their terms shall be settled by binding
arbitration held in Chicago, Illinois in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect, except
as specifically otherwise provided in this Article 14. This Article 14 shall be
construed and enforced in accordance with the Federal Arbitration Act,
notwithstanding any other choice of law provision in this Agreement.
Notwithstanding the foregoing:
14.1.(a) Buyer may, in its discretion, apply to a court of
competent jurisdiction for equitable relief as provided in Section 15.5.
Such an application shall not be deemed a waiver of the right to compel
arbitration pursuant to this Article.
14.1.(b) No party shall be required to submit to arbitration
hereunder unless all persons who are not parties to this Agreement, but
who are necessary parties to a complete resolution of the controversy,
submit to the arbitration process on the same terms as the parties
hereto. Without limiting the generality of the foregoing, no claim under
Article 11 for the indemnification of a third-party claim shall be
subject to arbitration under this Article 14 unless the third party
bringing such claim against the indemnitee shall agree in writing to the
application of this Article 14 of the resolution of such claim.
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14.1.(c) Without the express written consent of all parties, this
Article 14 shall not apply where the amount in controversy, excluding
attorney fees and expenses, exceeds $1,000,000.
14.2. Arbitrators. If the matter in controversy (exclusive of attorney
fees and expenses) shall appear, as at the time of the demand for arbitration,
to exceed $100,000, then the panel to be appointed shall consist of three
neutral arbitrators; otherwise, one neutral arbitrator.
14.3. Procedures; No Appeal. The arbitrator(s) shall allow such discovery
as the arbitrator(s) determine appropriate under the circumstances and shall
resolve the dispute as expeditiously as practicable, and if reasonably
practicable, within 120 days after the selection of the arbitrator(s). The
arbitrator(s) shall give the parties written notice of the decision, with the
reasons therefor set out, and shall have 30 days thereafter to reconsider and
modify such decision if any party so requests within 10 days after the decision.
Thereafter, the decision of the arbitrator(s) shall be final, binding, and
nonappealable with respect to all persons, including (without limitation)
persons who have failed or refused to participate in the arbitration process.
14.4. Authority. The arbitrator(s) shall have authority to award relief
under legal or equitable principles, including interim or preliminary relief,
and to allocate responsibility for the costs of the arbitration and to award
recovery of attorneys fees and expenses in such manner as is determined to be
appropriate by the arbitrator(s).
14.5. Entry of Judgment. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having in personam and subject matter
jurisdiction. Company, Buyer and the Shareholder hereby submit to the in
personam jurisdiction of the Federal and State courts in Chicago, Illinois, for
the purpose of confirming any such award and entering judgment thereon.
14.6. Confidentiality. All proceedings under this Article 14, and all
evidence given or discovered pursuant hereto, shall be maintained in confidence
by all parties and by the arbitrators.
14.7. Continued Performance. The fact that the dispute resolution
procedures specified in this Article 14 shall have been or may be invoked shall
not excuse any party from performing its obligations under this Agreement and
during the pendency of any such procedure all parties shall continue to perform
their respective obligations in good faith, subject to any rights to terminate
this Agreement that may be available to any party and to the right of setoff
provided in Section 11.4 hereof.
14.8. Tolling. All applicable statutes of limitation shall be tolled
while the procedures specified in this Article 14 are pending. The parties will
take such action, if any, required to effectuate such tolling.
15. MISCELLANEOUS
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15.1. Disclosure Schedule. Information set forth in the Disclosure
Schedule specifically refers to the article and section of this Agreement to
which such information is responsive and such information shall not be deemed to
have been disclosed with respect to any other article or section of this
Agreement or for any other purpose. The Disclosure Schedule shall not vary,
change or alter the language of the representations and warranties contained in
this Agreement and, to the extent the language in the Disclosure Schedule does
not conform in every respect to the language of such representations and
warranties, such language shall be disregarded and be of no force or effect.
15.2. Further Assurance. From time to time, at Buyer's request and
without further consideration, Company will execute and deliver to Buyer such
documents, instruments and consents and take such other action as Buyer may
reasonably request in order to consummate more effectively the transactions
contemplated hereby, to discharge the covenants of Company and to vest in Buyer
good, valid and marketable title to the business and assets being transferred
hereunder.
15.3. Disclosures and Announcements. Both the timing and the content of
all disclosure to third parties and public announcements concerning the
transactions provided for in this Agreement by either Company or Buyer shall be
subject to the approval of the other in all essential respects, except that the
other party's approval shall not be required as to any statements and other
information which a party may submit to the Securities and Exchange Commission
or its stockholders or be required to make pursuant to any rule or regulation of
the Securities and Exchange Commission or NASDAQ, etc., or otherwise required by
law; provided that such party shall consult with the other party to the extent
possible prior to any such submission or statements.
15.4. Assignment; Parties in Interest.
15.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the other
parties. Notwithstanding the foregoing, Buyer may, without consent of the
Company, cause one or more subsidiaries of Buyer to carry out all or part
of the transactions contemplated hereby; provided, however, that Buyer
shall, nevertheless, remain liable for all of its obligations, and those
of any such subsidiary, to Company hereunder.
15.4.(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing contained
herein shall be deemed to confer upon any other person any right or
remedy under or by reason of this Agreement.
15.5. Equitable Relief. Company agrees that any breach of Company's
obligation to consummate the sale of the Purchased Assets on the Closing Date,
any breach of any nonsolicitation obligation imposed by Section 7.5 hereof or
any breach by Company of its obligations imposed by Section 7.6 hereof, will
result in irreparable injury to Buyer for which a remedy at law would be
inadequate; and that, in addition to any relief at law which may be
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available to Buyer for such breach and regardless of any other provision
contained in this Agreement, Buyer shall be entitled to injunctive and other
equitable relief as a court may grant. Buyer agrees that any breach of Buyer's
nonsolicitation obligation imposed by Section 7.5 hereof will result in
irreparable injury to Company for which a remedy at law would be inadequate; and
that in addition to any relief at law which may be available to Company for such
breach and regardless of any other provision contained in this Agreement,
Company shall be entitled to injunctive and other equitable relief as a court
may grant. This Section 15.5 shall not be construed to limit either party's
right to obtain equitable relief for other breaches of this Agreement under
general equitable standards.
15.6. Law Governing Agreement. This Agreement shall be construed and
interpreted according to the internal laws of the State of Wisconsin, excluding
any choice of law rules that may direct the application of the laws of another
jurisdiction. Process and pleadings given to a party in the manner and at the
address provided in Section 15.8 shall be deemed properly served and accepted
for all purposes.
15.7. Amendment and Modification. Buyer and Company may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing.
15.8. Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
(a) If to Buyer, to:
Northland Cranberries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as Buyer shall furnish to Company in writing.
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(b) If to Company:
Seneca Foods Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & Mugel, LLP
Fleet Bank Building
Twelve ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as Company shall furnish to Buyer in writing.
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent by
overnight courier pursuant to this paragraph, such communication shall be deemed
delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph,
such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Any party to this Agreement may change its address for the purposes of
this Agreement by giving notice thereof in accordance with this Section.
15.9. Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:
15.9.(a) Expenses to be Paid by Company. Company shall pay, and
shall indemnify, defend and hold Buyer harmless from and against, each of
the following:
(i) Transfer Taxes. Any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions
provided for in this Agreement, and any interest or penalties
related thereto (excluding, however, any North Carolina Highway
Use Taxes described in Section 2.2.(c)).
(ii) Professional Fees. All fees and expenses of Company's
legal, accounting, investment banking and other professional
counsel in connection with the transactions contemplated hereby,
provided, however, that if Buyer or its accountants request any
services from Company's
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accountants with respect to financial information of Company for
the purpose of filing reports and exhibits concerning its
acquisitions from Company in compliance with the Rules and
Regulations of the Commission, including without limitation Form
8-K under the Act or Regulation S-X and the audits to be performed
pursuant to Section 7.13, Buyer shall pay all reasonable fees and
expenses of Company's accountants in providing such services.
15.9.(b) Expenses to be Paid by Buyer. Buyer shall pay, and shall
indemnify, defend and hold Company harmless from and against each of the
following:
(i) North Carolina Highway Use Taxes. All North Carolina
Highway Use Taxes imposed on the transfer to Buyer of vehicles
licensed in North Carolina.
(ii) Environmental Audit. The fees and other expenses
relating to the environmental audit performed pursuant to Section
7.3 hereof.
(iii) Title Insurance Premiums and Survey Costs. All
premiums for the issuance of the title insurance policies issued
pursuant to Section 7.1 hereof and all costs of the surveys
performed pursuant to Section 7.2.
(iv) Filing Fees. All filing fees for the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
application filed pursuant to Section 7.9 hereof.
(v) Professional and Advisory Fees. All fees and expenses
of Piper, Jaffray Inc. and of Buyer's legal accounting and other
investment banking and professional counsel in connection with the
transactions contemplated hereby.
15.9.(c) Other. Except as otherwise provided herein, each of the
parties shall bear its own expenses and the expenses of its counsel and
other agents in connection with the transactions contemplated hereby.
15.9.(d) Costs of Litigation. The parties agree (subject to the
discretion, in an arbitration proceeding, of the arbitrator as set forth
in Section 14.4) that the prevailing party in any action brought with
respect to or to enforce any right or remedy under this Agreement shall
be entitled to recover from the other party or parties all reasonable
costs and expenses of any nature whatsoever incurred by the prevailing
party in connection with such action, including without limitation
attorneys' fees and prejudgment interest, provided, however, that if a
party seeking monetary recovery recovers less than 50% of the amounts
sought, the reasonable costs and expenses which it is entitled to recover
from the other party will be reduced so that the costs and expenses which
it is entitled to recover constitute the same proportion of its total
costs and expenses as the percentage of its monetary recovery to the
total recovery which is sought.
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15.9.(e) Brokerage. Except as to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., who shall be
paid by Buyer, Company and Buyer have each represented and warranted to
each other that there is no broker or finder involved or in any way
connected with the transfer provided for herein on their behalf
respectively and each agrees to hold the others harmless from and against
all other claims for brokerage commissions or finder's fees in connection
with the execution of this Agreement or the transactions provided for
herein.
15.10. Entire Agreement. This instrument embodies the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and there have been and are no agreements, representations or warranties between
the parties other than those set forth or provided for herein.
15.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.12. Jointly Drafted. This Agreement and the Ancillary Agreements have
been jointly drafted by the respective representatives of Buyer and Company and
no party shall be considered as being responsible for drafting the Agreement or
any of the Ancillary Agreements for the purpose of applying any rule construing
ambiguities against the drafter or otherwise. No draft of this Agreement or any
Ancillary Agreement shall be taken into account in construing the agreement.
15.13. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
15.14. Certain Definitions and Glossary of Terms. The following sets
forth the certain definitions of capitalized terms used in this Agreement and
the location of other such terms defined in the body of this Agreement.
(i) Definitions.
(1) "Knowledge," to the knowledge of," and any
similar phrase, when referring to Company, means the actual
and conscious knowledge of the following members of
management of Company: A. S. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇, C. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇▇▇ ▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ after reasonable
inquiry by them of selected employees of Company whom they
believe, in good faith, to be the persons generally
responsible for the subject matters to which the knowledge
is pertinent.
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(2) "Material Adverse Effect" means any change or
changes in, or effect on, the Purchased Assets, the
operation, maintenance, or condition (financial or
otherwise) of the Purchased Assets, or the business of the
Juice Division (or, the Juice Division as operated by the
Buyer, after the Closing, as the case may be) in connection
therewith after the date of this Agreement, or any change
or changes in, or effect on, the Assumed Liabilities after
the date of this Agreement, in each case that is,
individually, or in the aggregate are, in the reasonable
judgment of the Buyer, materially adverse to the Purchased
Assets, the operation, maintenance, or condition (financial
or otherwise) of the Purchased Assets, the business of the
Juice Division (or, the Juice Division as operated by the
Buyer, after the Closing, as the case may be) in connection
therewith, and the Assumed Liabilities, taken as a whole,
other than (i) any change or effect resulting from changes
in the international U.S., regional or local wholesale or
retail markets for consumer juice beverages, (ii) any
changes or effects resulting from changes in U.S.,
Canadian, state, provincial or local laws, regulations or
ordinances affecting the Purchased Assets, and (iii) any
materially adverse change in or effect on the Purchased
Assets, the operation, maintenance, or condition (financial
or otherwise) of the Purchased Assets, the business of
Juice Division in connection therewith, or the Assumed
Liabilities which is cured (including by the payment of
money) by Company to the reasonable satisfaction of the
Buyer before the Termination Date.
(3) "Reasonable Best Efforts" shall mean the taking
or performing of all commercially reasonable efforts,
actions or other measures, provided that it shall not
require that additional costs or expenses be incurred
(other than incidental costs or expenses).
(4) "Transferring Employee Records" means all
personnel files related to Company's personnel who will
become employees of the Buyer to the extent such files
pertain to (i) skill and development training and resumes,
(ii) seniority histories, (iii) salary and benefit
information, (iv) Occupational, Safety and Health
Administration medical reports, or (v) active medical
restriction forms.
(ii) Glossary.
"Affiliate" - Section 1.2.(j)
"Assumed Contracts" - Section 2.1.(b)
"Assumed Liabilities" - Section 2.1
"Buyer's Accountants" - Section 3.3.(c)
"Buyer's Affiliates" - Section 11.1 "CERCLA" - Section 2.2.(h)
"Claim" - Section 11.1
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"Closing" - Preamble to Article 12
"Closing Date" - Section 12
"Code" - Section 3.5
"Company's Accountants" -- Section 3.3.(c)(ii)
"Contracts" - Section 1.1.(g) "Covered Employees" - Section 6.5
"Current Assets: - Section 3.3(a)
"Debt Obligations" - Section 2.2.(g)
"Disclosure Schedule" - Article 15.1
"Effective Time" - Section 3.3.(c)(i)
"Employee Plans/Agreements" - Section 4.16.(a)
"Environmental Laws" - Section 4.11.(c)
"ERISA" - Section 4.16.(a)
"Excluded Assets" - Section 1.2
"Final Closing Balance Sheet" - Section 3.3.(c)(iii)
"Frozen LUA Agreement" - Section 7.19.(b)
"Government Entities" - Section 2.2.(n)
"Hazardous Substances" - Section 2.2.(h)
"HSR Act" - Section 4.3 "IRS" - Section 3.5
"Indemnified Party" - Section 11.3.(a)
"Indemnifying Party" - Section 11.3.(a)
"Interim Adjustment" - Section 3.2.(c)(i)
"Interim Closing Balance Sheet" - Section 3.3.(c)(ii)
"Inventory" - Section 1.1.(d)
"▇▇▇▇▇▇▇ Sauerkraut Facility" - Recital D
"Juice Division" - Recital A
"Juice Division Business" - Section 4.4
"Juice Division Employees" - Section 3.5
"Juice Division Trade Rights" - Section 1.1.(f)
"Laws" - Section 2.2.(n)
"Leased Real Property" - Section 1.1.(b)
"Liability" - Section 2.1
"Lien" - Section 4.12.(a)
"Litigation" - Section 2.2.(i)
"LUA Agreement" - Section 7.19
"Northland Stock" - Section 3.2.(b)
"Orders" - Section 2.2.(n)
"Owned Real Property" - Section 1.1.(a)
"PBGC" - Section 4.16.(b)(ii)
"Permitted Real Property Liens" - Section 4.12.(a)
"Personal Property Leases" - Section 1.1.(e)
"Preliminary Closing Balance Sheet" - Section 3.3.(b)(i)
"Products" - Section 4.20
"Publix" - Section 7.19
"Purchased Assets" - Section 1.1
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"Purchase Price" - Section 3.1
"Real Property" - Section 4.12.(c)
"Real Property Leases" - Section 1.1.(b)
"Recent Balance Sheet" - Section 4.4
"Settlement Date" - Section 3.2.(d)
"Shelf-Stable LUA Agreement" - Section 7.19.(a)
"Third Accounting Firm" - Section 3.3.(c)(iii)
"Trade Rights" - Section 1.1.(f)
"Transferred Employees" - Section 6.1.(a)
"Transferred Union Employees" - Section 6.1.(c)
"Western Facilities" - Recital C
"Westfield Maid" - Section 1.1.(g)(ii)
"Westfield Maid Agreement" - Section 1.1.(g)(ii)
Where any group or category of items or matters is defined collectively in the
plural number, any item or matter within such definition may be referred to
using such defined term in the singular number.
THIS SPACE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
NORTHLAND CRANBERRIES, INC.
By: /s/▇▇▇▇ Swendrwoski
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
SENECA FOODS CORPORATION
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
President and Chief Executive Officer