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SECURITIES AND EXCHANGE ACT OF 1934
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 1, 1997
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INTERNATIONAL HOME FOODS, INC.
(Exact Name of Registrant as specified in its charter)
DELAWARE 333-18859 13-3377322
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
1633 LITTLETON ROAD 07054
PARSIPPANY, N.J. (Zip Code)
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code: (201) 359-9920
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 1, 1997, International Home Foods, Inc. (the "Company")
consummated the acquisition of substantially all of the assets (the "Assets")
of Bumble Bee Seafoods, Inc. and its wholly-owned subsidiaries, Bumble Bee
International, Inc., Santa Fe Springs Holding Company and Commerce Distributing
Company (collectively, the "Sellers"), pursuant to the terms of an Asset
Purchase and Sale Agreement dated as of May 1, 1997 (the "Agreement") by and
among the Sellers, on the one hand, and the Company and its wholly-owned
subsidiary, Bumble Bee Acquisition Corporation, on the other hand. The
aggregate consideration paid for the Assets was approximately $160,000,000 in
cash and the assumption of certain liabilities of the Sellers, including trade
payables and certain accrued liabilities. The Assets consist primarily of
inventory, accounts receivable, property, plant and equipment and trademarks
formerly used by the Sellers for the processing and marketing of canned seafood
products, principally tuna and salmon, including processing facilities in
Puerto Rico, Ecuador and California. The transaction was approved by an order
of the Federal Bankruptcy Court for the Southern District of California on June
19, 1997, as part of the bankruptcy proceedings of the Sellers.
Concurrent with the acquisition of the Assets, the Company amended its
existing loan facility with Chase Manhattan Bank. The existing senior secured
bank term facilities were increased from $670 million to $750 million and the
Company's revolving facility was increased from $100 million to $140 million.
The Company financed the purchase of the Assets with the $80 million increase
in the term facility and a $30 million draw on the Company's bank revolver,
with the balance of the purchase price provided from the Company's available
cash balances as of the date of the closing.
The Company intends to maintain the plant and equipment acquired for the
processing and canning of seafood products and to continue the employ of
substantially all of the Seller's former 1700 employees.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
(b) Pro Forma Financial Information.
In accordance with Items 7(a)(4) and 7(b)(2) of Form 8-K, the financial
statements of the Sellers called for by Item 7(a) of Form 8-K and Rule 3-05 of
Regulation S-X, and the pro forma financial information called for by Item 7(b)
of Form 8-K and Article XI of Regulation S-X, will be filed by amendment as
soon as practicable but not later than September 15, 1997.
(c) Exhibits. The following exhibit is filed herewith in
accordance with Item 601 of Regulation S-K:
Exhibit No. Description
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2.1 Asset Purchase and Sale Agreement dated as of May 1, 1997, by
and among Bumble Bee Seafoods, Inc., Bumble Bee International,
Inc., Commerce Distributing Company and Santa Fe Springs
Holding Company, as Sellers, and International Home Foods,
Inc. and Bumble Bee Acquisition Corporation, its
wholly-owned subsidiary, as Buyer.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL HOME FOODS, INC.
(Registrant)
Date: July 16, 1997 By: /s/ N. MICHAEL DION
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N. Michael Dion
Chief Financial Officer
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INDEX TO EXHIBITS
2.1 Asset Purchase and Sale Agreement dated as of May 1, 1997, by and
among Bumble Bee Seafoods, Inc., Bumble Bee International, Inc.,
Commerce Distributing Company and Santa Fe Springs Holding Company,
as Sellers, and International Home Foods, Inc. and Bumble Bee
Acquisition Corporation, its wholly-owned subsidiary, as Buyer.
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EXHIBIT 2.1
ASSET PURCHASE AND SALE AGREEMENT
by and among
BUMBLE BEE SEAFOODS, INC.,
BUMBLE BEE INTERNATIONAL, INC.,
COMMERCE DISTRIBUTING COMPANY,
AND
SANTA FE SPRINGS HOLDING COMPANY,
as
SELLERS
and
INTERNATIONAL HOME FOODS, INC.
and
BUMBLE BEE ACQUISITION CORPORATION,
ITS WHOLLY-OWNED SUBSIDIARY
as
BUYER
DATED AS OF MAY 1, 1997
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TABLE OF CONTENTS
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TABLE OF CONTENTS i
ARTICLE 1 PURCHASE AND SALE OF THE ASSETS 1
Section 1.1. Purchase By Buyer And Sale By Sellers Of The Assets. 1
ARTICLE 2 CERTAIN DEFINITIONS 2
Section 2.1. Accounts Receivable. 2
Section 2.2. Acquisition Sub. 2
Section 2.3. Affiliate. 2
Section 2.4. Agreement. 3
Section 2.5. Alternative Transaction. 3
Section 2.6. Applicable Laws. 3
Section 2.7. Assets. 3
Section 2.8. Assumed Contracts. 3
Section 2.9. Assumed Liabilities. 3
Section 2.10. Bankers Trust Facility. 4
Section 2.11. Bankruptcy Code. 4
Section 2.12. Bankruptcy Court. 4
Section 2.13. Bankruptcy Proceedings. 4
Section 2.14. BBII. 4
Section 2.15. BBSI. 4
Section 2.16. BBSI Business. 4
Section 2.17. Books And Records. 4
Section 2.18. Business Day. 5
Section 2.19. [THIS SECTION LEFT INTENTIONALLY BLANK]. 5
Section 2.20. [THIS SECTION LEFT INTENTIONALLY BLANK] 5
Section 2.21. CDC. 5
Section 2.22. Closing. 5
Section 2.23. Closing Date. 5
Section 2.24. Closing Working Capital 5
Section 2.25. COBRA 5
Section 2.26. Commitment Letter 5
Section 2.27. Contingent Obligation. 6
Section 2.28. Contract. 6
Section 2.29. Contractual Obligation. 6
Section 2.30. Employee Benefit Plan. 6
Section 2.31. Employee Termination Obligations. 6
Section 2.32. Environmental Claims. 6
Section 2.33. Environmental Law. 6
Section 2.34. Environmental Permit. 7
Section 2.35. ERISA. 7
Section 2.36. ERISA Affiliate. 7
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Section 2.37. Estimated Working Capital. 7
Section 2.38. Excluded Assets. 7
Section 2.39. Excluded Liabilities. 8
Section 2.40. Falcons. 9
Section 2.41. Final Order. 9
Section 2.42. Financial Statements. 9
Section 2.43. GAAP. 9
Section 2.44. Governmental Authority. 10
Section 2.45. Governmental Licenses And Permits. 10
Section 2.46. Hazardous Materials. 10
Section 2.47. Heller Facility. 10
Section 2.48. HSR Act. 10
Section 2.49. IHF Financial Statements 10
Section 2.50. Indebtedness. 10
Section 2.51. Initial Order. 11
Section 2.52. Intellectual Property. 11
Section 2.53. Inventory. 11
Section 2.54. IRC. 12
Section 2.55. Knowledge. 12
Section 2.56. Liens. 12
Section 2.57. Mantatun. 12
Section 2.58. Material Adverse Effect. 12
Section 2.59. Mayaguez. 12
Section 2.60. Mayaguez Stock. 13
Section 2.61. Measurement Time 13
Section 2.62. Overbid Fee. 13
Section 2.63. Overbid Procedures. 13
Section 2.64. PBGC. 14
Section 2.65. Pension Plan. 14
Section 2.66. Permitted Encumbrances. 14
Section 2.67. Person. 15
Section 2.68. Heller Commitment Letter. 15
Section 2.69. Purchase Price. 15
Section 2.70. Real Property. 15
Section 2.71. Real Property Leased. 15
Section 2.72. Sales Order. 16
Section 2.73. San Diego Headquarters Lease. 16
Section 2.74. SEAFMAN. 16
Section 2.75. SEAFMAN Closing Working Capital 16
Section 2.76. SEAFMAN Estimated Working Capital 16
Section 2.77. SEAFMAN Financial Statements. 17
Section 2.78. SEAFMAN Internal Financial Statements. 17
Section 2.79. SEAFMAN Stock. 17
Section 2.80. SEAFMAN Working Capital 17
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Section 2.81. Schedule Or Schedules. 17
Section 2.82. Securities. 17
Section 2.83. Seller. 17
Section 2.84. Sellers' Retirement Plan. 17
Section 2.85. Sellers' Savings Plan 18
Section 2.86. Sellers' Severance Plan. 18
Section 2.87. SFSHC. 18
Section 2.88. Subsidiary. 18
Section 2.89. Sucres 18
Section 2.90. Survey 18
Section 2.91. Tax Exemption Order. 18
Section 2.92. Tax Return 18
Section 2.93. Taxes. 18
Section 2.94. Termination Event. 19
Section 2.95. Title Commitment 19
Section 2.96. Title Company 19
Section 2.97. Title Policy 19
Section 2.98. Trademarks. 19
Section 2.99. Trade Payables. 19
Section 2.100. Transferred Employee. 19
Section 2.101. UCC. 19
Section 2.102. Unicord - Thailand 20
Section 2.103. Uni Group. 20
Section 2.104. Uni Group - BVI 20
Section 2.105. Working Capital. 20
ARTICLE 3 TRANSACTIONS TO BE EFFECTED AT CLOSING 20
Section 3.1. Closing. 20
Section 3.2. Delivery and Payment.. 20
Section 3.3. Possession And Risk Of Loss. 22
Section 3.4. Employees. 23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF EACH OF THE SELLERS 25
Section 4.1. Organization, Powers, Capitalization, Good Standing,
Business And Subsidiaries. 25
Section 4.2. Authorization Of Agreement, Etc. 26
Section 4.3. Financial Condition. 27
Section 4.4. Title To Properties; Liens. 29
Section 4.5. Condition And Sufficiency Of Assets. 29
Section 4.6. Real Property. 29
Section 4.7. Personal Property. 30
Section 4.8. Inventories. 30
Section 4.9. Recalls. 30
Section 4.10. Accounts Receivable. 31
Section 4.11. Litigation; Adverse Facts. 31
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Section 4.12. Contracts. 31
Section 4.13. Governmental Regulation. 31
Section 4.14. Employee Benefit Plans. 32
Section 4.15. Intellectual Property. 35
Section 4.16. BBSI's Brokers. 36
Section 4.17. Environmental Compliance. 36
Section 4.18. Employee Matters. 37
Section 4.19. Compliance With Laws; Governmental Licenses And Permits. 37
Section 4.20. Insurance. 38
Section 4.21. Limitations On Representations and Warranties Of Seller. 38
Section 4.22. No Subsidiary Liability For Excluded Liability 38
Section 4.23. Mayaguez 38
ARTICLE 5 BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS 38
Section 5.1. Organizations, Powers, Capitalization Good Standing,
Business And Subsidiaries. 38
Section 5.2. Authorization Of Agreement, Etc. 39
Section 5.3. Buyer's Brokers. 40
Section 5.4. IHF Financial Statements 40
Section 5.5. IHF Cash-On-Hand 40
Section 5.6. Buyers Use Of IHF And Chase Cash 40
ARTICLE 6 ACTIONS BY THE SELLERS, IHF AND BUYER PRIOR TO THE CLOSING 40
Section 6.1. Maintenance Of Business. 41
Section 6.2. Certain Prohibited Transactions; Further Notice 43
Section 6.3. Investigation By Buyer. 43
Section 6.4. Consents And Best Efforts. 44
Section 6.5. San Diego Headquarters Sublease. 45
Section 6.6. No Solicitation. 45
Section 6.7. Bankruptcy Proceedings. 46
Section 6.8. California Real Property Transfer Tax Escrow. 46
Section 6.9. Additional Agreements. 46
Section 6.10. Working Capital Verification. 47
Section 6.11. Tax Exemption Order Requirement. 47
Section 6.12. IHF Purchase Price Commitment. 47
Section 6.13. Best Efforts To Cause Chase To Fund Purchase Price. 47
Section 6.14. Allocation 47
Section 6.15. IHF Financial Statements. 48
Section 6.16. Inventory Report And Personal Property Schedule. 48
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BBSI 48
Section 7.1. Representations, Warranties And Covenants. 48
Section 7.2. Bankruptcy Court Order. 48
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF IHF AND BUYER 49
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Section 8.1. Representations, Warranties And Covenants. 49
Section 8.2. Bankruptcy Court Order. 49
Section 8.3. Tax Exemption Order. 49
Section 8.4. Minimum SEAFMAN Working Capital 49
Section 8.5. Real Estate Title Commitment 49
Section 8.6. Survey 50
Section 8.7. Funding 50
ARTICLE 9 CONDITIONS TO THE CLOSING OF EACH PARTY 50
Section 9.1 Conditions To Obligations Of Each Party 50
ARTICLE 10 ACTIONS BY EACH SELLER, IHF AND BUYER AFTER THE CLOSING 51
Section 10.1. Books, Records And Employees. 51
Section 10.2. Collection Of Accounts Receivable And Deposits. 51
Section 10.3. Use Of Name. 52
Section 10.4. Further Assurances. 52
Section 10.5. Ongoing Representations Of Officers Of Sellers After The Closing 52
ARTICLE 11 TERMINATION 52
Section 11.1. Termination By Either Party. 52
Section 11.2. Termination By The Sellers. 53
Section 11.3. Termination By IHF Or Buyer. 54
ARTICLE 12 GENERAL PROVISIONS 55
Section 12.1. Nonsurvival Of Representations, Warranties And Covenants 55
Section 12.2. Time Is Of The Essence. 55
Section 12.3. Notices. 55
Section 12.4. Entire Agreement; Amendment. 56
Section 12.5. Counterparts. 56
Section 12.6. Governing Law. 56
Section 12.7. Severability. 56
Section 12.8. Successors And Assigns. 56
Section 12.9. Captions. 57
Section 12.10. United States Dollars. 57
Section 12.11. Waivers. 57
Section 12.12. Interpretation. 57
Section 12.13. No Third Party Beneficiaries. 57
Section 12.14. Public Announcements. 57
Section 12.15. Remedies Cumulative. 58
Section 12.16. Confidential Information. 58
Section 12.17. Fees And Expenses 58
Section 12.18. Director, Officer And Stockholder Non-Liability 58
Section 12.19. Execution In Counterparts 58
Exhibit "A" Form Of Bill Of Sale
Exhibit "B" Form Of Sales Order
Exhibit "C" Form Of Assumption Agreement
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Exhibit "D" Sellers' Severance Plan
Exhibit "E" Form Of San Diego Headquarters Sublease
Schedule 2.8 Assumed Contracts; Employment Contracts; Employee Benefit Plans
Schedule 2.9 Other Assumed Liabilities
Schedule 2.38.d Excluded Assets -- Prepaid Expenses
Schedule 2.38.j Excluded Assets -- Claims
Schedule 4.1.b Capitalization Of Sellers
Schedule 4.1.c. Qualification Of Sellers
Schedule 4.1.d Direct And Indirect Subsidiaries Of BBSI; Capitalization And
Jurisdiction Of Incorporation Of SEAFMAN,
Mantatun, And Mayaguez
Schedule 4.2.b Third Party Consents
Schedule 4.2.c Governmental Consents
Schedule 4.3 Liabilities Or Obligations Of SEAFMAN Not Reflected In
Financial Statements; Exceptions To Conduct of BBSI
Business In The Ordinary Course
Schedule 4.3.a Financial Statements -- Exceptions To GAAP
Schedule 4.4 Liens
Schedule 4.5 Material Personal Property And Assets Not In Good Operating
Condition And Repair
Schedule 4.6 Real Property And Real Property Leased
Schedule 4.9 Recalls
Schedule 4.10 Non-Ordinary Course Marketing Arrangements Affecting
Collectibility Or Value Of Accounts Receivable
Schedule 4.11 Litigation
Schedule 4.12 Oral Contracts
Schedule 4.14 Employee Benefit Programs And Agreements; Number Of Employees
Of BBSI And Subsidiaries
Schedule 4.15 Intellectual Property
Schedule 4.17 Environmental Claims
Schedule 4.18 Employee Matters
Schedule 4.19 Compliance With Laws; Material Governmental Licenses And Permits
Schedule 4.20 Policies of Insurance
Schedule 5.2 Third Party Consents; Governmental Consents
Schedule 5.4 IHF Financial Statements -- Exceptions To GAAP
Schedule 6.4.b Consents And Approvals
Schedule 8.5 Title Commitment
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ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT is made and entered
into as of the 1st day of May, 1997, by and among Bumble Bee Seafoods, Inc., a
Delaware corporation ("BBSI"), Bumble Bee International, Inc., a Delaware
corporation ("BBII"), Santa Fe Springs Holding Company, a Delaware corporation
("SFSHC"), Commerce Distributing Company, a Delaware corporation ("CDC"),
International Home Foods, Inc., a Delaware corporation ("IHF"), and Bumble Bee
Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of
IHF (the "Acquisition Sub"). BBSI, BBII, CDC and SFSHC are hereinafter each
referred to as a "Seller" (collectively they are hereinafter referred to as
"Sellers"). Acquisition Sub, together with its wholly-owned subsidiaries, is
hereinafter referred to as "Buyer".
W I T N E S S E T H:
WHEREAS, the Sellers wish to sell, assign, transfer, convey
and deliver to Buyer, all of their rights, title and interest in and to all of
the assets used in the conduct of the seafood processing, marketing and
distribution business of the Sellers including the SEAFMAN Stock and the
Mayaguez Stock (as hereinafter defined), and Buyer wishes to purchase, accept
and take from each Seller all of such Seller's rights, title and interest in
such assets and assume certain liabilities and obligations of the Sellers upon
the terms and conditions set forth below; and
WHEREAS, the Sellers have legal title to and possession of,
and are empowered to sell and dispose of such assets and to execute, deliver
and perform this Agreement, and Buyer has good and valuable consideration to be
transferred in exchange for such assets and is empowered to purchase, accept
and take such assets from each Seller and assume certain liabilities of such
Sellers.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants, agreements and representations and warranties herein
contained and other good and valuable consideration the parties hereto agree as
follows:
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ARTICLE 1
PURCHASE AND SALE OF THE ASSETS
SECTION 1.1. PURCHASE BY BUYER AND SALE BY SELLERS OF THE
ASSETS. Subject to the terms and conditions set forth, and upon the
representations and warranties made, in this Agreement, at the Closing (as
hereinafter defined) each of the Sellers shall sell, assign, transfer, convey
and deliver to Buyer, and IHF shall cause Buyer to, and Buyer shall, purchase
from each of the Sellers, the Assets (as hereinafter defined), free and clear
of all Liens (as hereinafter defined) or liabilities (other than Permitted
Encumbrances (as hereinafter defined) and liabilities assumed in accordance
with this Agreement), and IHF shall cause Buyer to, and Buyer shall, pay the
Sellers collectively the Purchase Price (as hereinafter defined) and assume the
Assumed Liabilities (as hereinafter defined), all in the form and manner
provided for in this Agreement. All liabilities and obligations of any Seller
other than the Assumed Liabilities shall remain and be the liabilities and
obligations of that Seller after the Closing. IHF may designate which Buyer,
whether Acquisition Sub or one of its Subsidiaries, will acquire which portion
of the Assets and will assume which portion of the Assumed Liabilities and IHF
shall guarantee the performance of the obligations of each Buyer under this
Agreement to pay the Purchase Price for the Assets and to assume and to pay the
Assumed Liabilities; provided however that IHF's guarantee in respect of the
assumption and payment of Assumed Liabilities shall not exceed the aggregate
amount of the Assumed Contracts, Trade Payables and current liabilities
included in the Assumed Liabilities.
ARTICLE 2
CERTAIN DEFINITIONS
The following terms used in this Agreement shall have the
following meanings:
SECTION 2.1. ACCOUNTS RECEIVABLE. The term "Accounts
Receivable" shall mean all of the trade notes and trade accounts receivable
arising out of Inventory sold or shipped or services performed in the ordinary
course of business consistent with past practices of a Person which remain
unpaid as of the time of Closing (including intercompany accounts receivable),
but shall not include accounts receivable of BBSI owed by Unicord - Thailand or
by Uni Group - BVI and accounts receivable of BBII owed by BBSI.
SECTION 2.2. ACQUISITION SUB. The term "Acquisition Sub"
shall have the meaning ascribed to such term in the introductory paragraph of
this Agreement.
SECTION 2.3. AFFILIATE. The term "Affiliate" shall mean,
with respect to any specified Person, (a) any other Person which, directly or
indirectly, owns or controls or is under common ownership or control with, or
is owned or controlled by, such specified
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Person, (b) any other Person which is a director, officer, or partner or is,
directly or indirectly, the beneficial owner of ten percent (10%) or more of
any class of equity securities, of the specified Person or a Person described
in clause (a) of this Section, (c) another Person of which the specified Person
is a director, officer or partner or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of equity securities, (d)
another Person in which the specified Person has a substantial beneficial
interest or as to which the specified Person serves as trustee or in a similar
capacity, (e) each Subsidiary of such Person, and/or (f) any relative or spouse
of the specified Person or any of the foregoing Persons, any relative of such
spouse or any spouse of such relative. For purposes of this definition,
"control" (including with correlative meanings the terms "controlling",
"controlled by" and "under common control with") shall mean the possession
directly or indirectly or beneficially of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or otherwise.
SECTION 2.4. AGREEMENT. The term "Agreement" shall mean
this Asset Purchase and Sale Agreement, including all schedules and exhibits
attached hereto, as it may hereafter be amended, supplemented or otherwise
modified from time to time.
SECTION 2.5. ALTERNATIVE TRANSACTION. The term "Alternative
Transaction" shall have the meaning ascribed to such term in Section 6.6.a.
SECTION 2.6. APPLICABLE LAWS. The term "Applicable Laws"
means all laws, statutes, rules, regulations, ordinances, judgments, orders,
decrees, injunctions, and writs of any Governmental Authority having
jurisdiction over any one or more of the Sellers or their respective
Subsidiaries, any Assets, any Assumed Liabilities or the BBSI Business, as may
be in effect on or prior to the time of Closing.
SECTION 2.7. ASSETS. The term "Assets" shall mean all of
the assets, cash, bank balances and cash equivalents (other than the amounts of
cash, bank balances and cash equivalents determined as of the close of business
on the day before the Closing Date which amounts are Excluded Assets pursuant
to Section 2.38.a.) properties, leases, leasehold improvements, prepaid
expenses and deferred charges, accounts and other receivables, contract and
other rights, books, records, files and goodwill of each Seller of every kind,
nature and description, real, personal and mixed, tangible and intangible,
whether or not reflected on the books and records of any of the Sellers;
provided, however, that for all purposes under this Agreement the Assets shall
not include the Excluded Assets.
SECTION 2.8. ASSUMED CONTRACTS. The term "Assumed
Contracts" shall mean (i) those Contracts of the Sellers set forth on Schedule
2.8, (ii) all other Contracts to which a Seller is a party under which any
party thereto remains obligated to provide goods or services having a value of,
or to make payments aggregating, less than $50,000 per year per individual
Contract, but in no event more than $500,000 per year in the aggregate, (iii)
all other Contracts that are terminable without payment or further
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obligation or penalty of a Seller on not more than thirty (30) days notice, and
(iv) all Contracts entered into by a Seller on or after the date of this
Agreement and before the time of Closing in accordance with the applicable
provisions of Section 6.1. and Section 6.2.; provided, however, that the term
"Assumed Contracts" shall not include any Contract for which there is no Final
Order of the Bankruptcy Court approving its assumption by the Seller and its
assignment to the Buyer.
SECTION 2.9. ASSUMED LIABILITIES. The term "Assumed
Liabilities" shall mean (i) all Assumed Contracts, (ii) Trade Payables
(including the trade payable due to SEAFMAN) and all current liabilities of any
of the Sellers relating to the continuing operation of the BBSI Business for
which provision is made on BBSI's Falcon dated February 28, 1997 and which
remain unpaid at the Closing Date, (iii) Trade Payables (including the trade
payable due to SEAFMAN) and current liabilities remaining unpaid at the Closing
Date, of any of the Sellers relating to the continuing operation of the BBSI
Business which are incurred in the ordinary course of the BBSI Business between
February 28, 1997 and the Closing Date and which, if incurred prior to the date
of this Agreement, would not have resulted in a breach of Section 6.1. or
Section 6.2. had it been incurred after the date of this Agreement, (iv)
Employee Termination Obligations, (v) any California sales or similar taxes
imposed upon transfer of the Assets (other than the transfer of real property),
if any, and (vi) all other liabilities and obligations of any of the Sellers
which are identified on Schedule 2.9; provided, however, that notwithstanding
the foregoing, the term Assumed Liabilities shall not include any Excluded
Liabilities.
SECTION 2.10. BANKERS TRUST FACILITY. The term "Bankers
Trust Facility" shall mean that certain Amended and Restated Senior
Subordinated Credit Agreement dated as of May 15, 1991, as amended, by and
among BBSI, Uni Group, as guarantor, and Bankers Trust Company.
SECTION 2.11. BANKRUPTCY CODE. The term "Bankruptcy Code"
shall mean Chapter 11 of Title 11 of the United States Code.
SECTION 2.12. BANKRUPTCY COURT. The term "Bankruptcy
Court" shall mean the United States Bankruptcy Court (or United States District
Court sitting as a bankruptcy court) for the Southern District of California,
San Diego Division, with jurisdiction over the contemplated chapter 11 cases of
the Sellers.
SECTION 2.13. BANKRUPTCY PROCEEDINGS. The term "Bankruptcy
Proceedings" shall have the meaning ascribed to such term in Section 6.7.
hereof.
SECTION 2.14. BBII. The term "BBII" shall mean Bumble Bee
International, Inc., a Delaware corporation.
SECTION 2.15. BBSI. The term "BBSI" shall mean Bumble Bee
Seafoods, Inc., a Delaware corporation.
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SECTION 2.16. BBSI BUSINESS. The term "BBSI Business"
shall mean the seafood processing, marketing and distribution business
conducted by the Sellers and their Subsidiaries.
SECTION 2.17. BOOKS AND RECORDS. The term "Books and
Records" means all books and records of any of the Sellers including, but not
limited to, (a) all books and records relating to (i) employees, agents,
dealers, brokers, jobbers and other representatives, (ii) suppliers, (iii) the
purchase of raw materials, supplies and services, (iv) Inventory, (v) customers
and (vi) the marketing, sale and distribution of products and services, (b) all
financial or other information relating to the BBSI Business or any of the
Assets or Assumed Liabilities, which information exists in a form that may be
reproduced in documentary form, transmitted electronically or copied to
computer media, and is, or should be, in the possession of a Seller or is
readily available to a Seller, and (c) all leases and other contracts, surveys
and appraisals, and engineering reports in the possession of a Seller relating
to the BBSI Business or any of the Assets or Assumed Liabilities.
SECTION 2.18. BUSINESS DAY. The term "Business Day" shall
mean any day of the year other than (i) any Saturday or Sunday or (ii) any
other day on which banks located in the State of California generally are
closed for business other than the retail depository business.
SECTION 2.19. [THIS SECTION LEFT INTENTIONALLY BLANK]
SECTION 2.20. [THIS SECTION LEFT INTENTIONALLY BLANK]
SECTION 2.21. CDC. The term "CDC" shall mean Commerce
Distributing Company, a Delaware corporation.
SECTION 2.22. CLOSING. The term "Closing" shall mean the
closing of the transactions contemplated by this Agreement on the Closing Date,
in accordance with Article 3 hereof and subject to all of the other terms and
conditions hereof.
SECTION 2.23. CLOSING DATE. The term "Closing Date" shall
mean the date of the Closing.
SECTION 2.24. CLOSING WORKING CAPITAL. The term "Closing
Working Capital" shall mean "Estimated Working Capital", plus increases in
Accounts Receivable and Inventory included in the Assets from the Measurement
Time to the close of business on the day before the Closing Date, minus
decreases in such Accounts Receivable and Inventory from the Measurement Time
to the close of business on the day before the Closing Date, plus (minus) any
decrease (increase) in Trade Payables included in the Assumed Liabilities from
the Measurement Time to the close of business on the day before the Closing
Date. For purposes of this defined term, the term "Accounts Receivable" shall
(i) exclude amounts historically classified as "Short Payments" in the trade
receivables detail included in the Falcons and Trade Payables owed to SEAFMAN
by BBSI, and
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(ii) include amounts historically classified as "Drafts Payable" in the Falcons
to the extent that such amounts relate to the payment of Trade Payables.
SECTION 2.25. COBRA. The term "COBRA" shall mean the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
SECTION 2.26. COMMITMENT LETTER. The term "Commitment
Letter" shall mean the commitment letter of Chase Securities, Inc. and The
Chase Manhattan Bank (collectively, "Chase") a copy of which has been provided
to Sellers, to provide financing of up to One Hundred Thirty-Five Million
Dollars ($135,000,000) to fund a portion of the Purchase Price on the terms and
subject to the conditions of this Agreement.
SECTION 2.27. CONTINGENT OBLIGATION. The term "Contingent
Obligation" as applied to any Person, means any direct or indirect liability,
contingent or otherwise, of that Person: (a) with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or
intent of the Person incurring such liability, or the primary effect thereof,
is to provide assurance to the obligee of such liability that such liability
will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such liability will be protected (in
whole or in part) against loss with respect thereto; or (b) with respect to any
demand, suit, action, investigation, litigation, claim, judicial or
administrative or other proceedings.
SECTION 2.28. CONTRACT. The term "Contract" shall mean any
plan, program, arrangement, lease, contract, commitment, understanding, sales
order, purchase order, agreement, employment contract, indenture, deed of
trust, mortgage, note, instrument, understanding, bond, right, warrant,
instrument, plan, permit or license, whether written or oral, which is intended
or purports to be binding and enforceable or which is offered to any Person and
acted upon or relied upon by such Person.
SECTION 2.29. CONTRACTUAL OBLIGATION. The term
"Contractual Obligation", as applied to any Person, shall mean any provision of
any security issued by that Person or of any Contract to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
Its properties is subject.
SECTION 2.30. EMPLOYEE BENEFIT PLAN. The term "Employee
Benefit Plan" shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA which is maintained for employees of BBSI or any of its
ERISA Affiliates.
SECTION 2.31. EMPLOYEE TERMINATION OBLIGATIONS. The term
"Employee Termination Obligations" means the obligations arising under the
Seller's Severance Plan contemplated in Section 3.4.b.
SECTION 2.32. ENVIRONMENTAL CLAIMS. The term
"Environmental Claims" shall have the meaning ascribed to such term in Section
4.17.
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SECTION 2.33. ENVIRONMENTAL LAW. The term "Environmental
Law" shall mean any Applicable Law which is related to or otherwise imposes
liability or standards of conduct concerning mining or reclamation of mined
land, discharges, emissions, releases or threatened releases of noises odors or
any pollutants, contaminants or hazardous or toxic wastes, substances or
materials, whether as matter or energy, into ambient air, water, or land, or
otherwise relating to the manufacture, processing, generation, distribution, of
pollutants, contaminants, or hazardous or toxic wastes, substances or
materials, including (but not limited to) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Resource Conservation and Recovery
Act of 1976, as amended, the Toxic Substances Control Act of 1976, as amended,
the Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act
of 1977, as amended, and any other similar Federal, state or local statutes.
SECTION 2.34. ENVIRONMENTAL PERMIT. The term
"Environmental Permit" shall mean any permit, license, approval consent or
other authorization required by or pursuant to any applicable Environmental
Law.
SECTION 2.35. ERISA. The term "ERISA" shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to time
and any successor statute and all rules and regulations promulgated thereunder.
SECTION 2.36. ERISA AFFILIATE. The term "ERISA Affiliate",
as applied to any Person, shall mean any Person who is a member of a group
which is under common control with BBSI who, together with BBSI, is treated as
a single employer within the meaning of Section 414(b), (c), (m) or (o) of the
IRC (as hereinafter defined).
SECTION 2.37. ESTIMATED WORKING CAPITAL. The term
"Estimated Working Capital" shall mean the Working Capital as adjusted as of
the close of business on a day not more than five (5) Business Days before the
Closing Date by the increases in Accounts Receivable and Inventory included in
the Assets from the date of the month-end reflected in the then most current
Falcon to the Measurement Time, the decreases in such Accounts Receivable and
Inventory from the date of the month-end reflected in the then most current
Falcon and the net increase or decrease in Trade Payables included in the
Assumed Liabilities from the date of the month-end reflected in the then most
current Falcon to the Measurement Time. For purposes of this defined term, the
term "Accounts Receivable" shall (i) exclude amounts historically classified as
"Short Payments" in the trade receivables detail included in the Falcons and
Trade Payables owed to SEAFMAN by BBSI, and (ii) include amounts historically
classified as "Drafts Payable" in the Falcons to the extent that such amounts
relate to the payment of Trade Payables.
SECTION 2.38. EXCLUDED ASSETS. The term "Excluded Assets"
shall mean all of the following assets of any of the Sellers, in each case
determined at the close of business on the day before the Closing Date:
a. all cash, bank balances or other
cash equivalents on hand or in banks or other financial institutions;
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b. all refunds of Taxes with respect to
any period of time prior to the Closing Date without regard to the
date when any such refund is received or realized;
c. all amounts paid in cash or cash
equivalents to any Seller before or after the Closing Date in
connection with any litigation, arbitration or other legal proceeding;
d. those claims by any Seller for
prepaid expenses, fees, deposits, refunds and discounts set forth on
Schedule 2.38.d;
e. the shares of capital stock of each
of the Sellers and the franchise of each Seller to be a corporation
under Delaware law, together with its stock transfer books and
records, the record books containing minutes or other proceedings
relating to actions of its board of directors and shareholders, and
any and all books and records relating to its organization, existence
or share capitalization;
f. any asset which Buyer elects in
writing prior to the time of Closing not to acquire;
g. any and all accounts receivable of
BBSI owed by Unicord - Thailand or Uni Group - BVI and any and all
accounts receivable of BBII owed by BBSI;
h. the shares of capital stock of
Bumble Bee de Panama, S.A., a Panama corporation;
i. the right, title and interest of any
Seller to, in and under the San Diego Headquarters Lease; and
j. all of the claims, causes of action,
litigation, demands, arbitration proceedings, administrative or
judicial proceedings, whether or not pending at the date hereof which
are described on Schedule 2.41.j.
SECTION 2.39. EXCLUDED LIABILITIES. The term "Excluded
Liabilities" shall mean (i) Contingent Obligations of any of the Sellers; (ii)
fees and expenses incurred by any of the Sellers in connection with the
transactions contemplated by this Agreement or any Alternative Transaction
(whether before or after the date of this Agreement); (iii) obligations owed by
any of the Sellers to Unicord - Thailand, Uni Group - BVI or Unigroup or any of
their respective successors or assigns (including any bankers acceptances or
letters of credit resulting from any Trade Payable owed thereto); (iv)
obligations, including principal, accrued interest, prepayment penalties, late
charges and collection fees owed by any of the Sellers under the Heller
Facility, the Bankers Trust
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Facility or any other Indebtedness; (v) any Taxes of any of the Sellers other
than those which expressly are Assumed Liabilities under Section 2.9(v) or are
listed on Schedule 2.9 and expressly assumed by Buyer under this Agreement,
whether incurred in connection with the transactions contemplated hereby or
otherwise; (vi) any damage claims arising from the rejection in bankruptcy of
any executory contracts or unexpired leases, or from the assumption of any
contract as to which assignment is not accepted by Buyer under this Agreement;
(vii) any obligation for consequential damages, punitive damages, or exemplary
damages however caused, whenever and wherever arising, or to whomsoever owed;
(viii) any pre- or post-petition claims for fees, interest, late fees, charges,
penalties, court costs or attorneys fees incurred by any of the Sellers, by any
party contracting with any of the Sellers (other than a party to an Assumed
Contract), or by any other creditor of any of the Sellers, including any
creditor with an otherwise Assumed Liability; (ix) any obligation, whether
direct or indirect, for contribution, indemnity, restitution, or any other form
of reimbursement, related to, resulting from, or revived by virtue of the
avoidance of one or more transfers by one or more of the Sellers in their
respective Chapter 11 cases, whether such avoidance arises under sections 544,
545, 547, 548, 549, 550, 553(b), or 724(a) of the Bankruptcy Code, by state
avoidance laws, or otherwise; (x) Trade Payables and other obligations owed by
BBSI to BBII that correspond to all accounts receivable of BBII owed by BBSI;
(xi) any liability of any Seller arising under the San Diego Headquarters
Lease; and (xii) any obligation incurred in breach or violation of the
provisions of Section 6.1. and Section 6.2.
SECTION 2.40. FALCONS. The term "Falcon" or "Falcons"
shall mean Seller's unaudited consolidated financial statements and the
supporting schedules thereto internally prepared on a quarterly or more
frequent basis.
SECTION 2.41. FINAL ORDER. The term "Final Order" shall
mean an order: (i) as to which no appeal or notice of appeal or motion for
rehearing or new trial has been timely filed or, if any of the foregoing has
been timely filed, it has been disposed of in a manner that upholds and affirms
the subject order in all material respects without the possibility for further
appeal or rehearing thereon; and (ii) as to which no stay is in effect. In the
case of the Sales Order, a Final Order shall also consist of an order as to
which an appeal, notice of appeal or motion for rehearing or new trial has been
filed, but as to which Buyer, in the exercise of reasonable judgment,
nonetheless elects to proceed with the Closing.
SECTION 2.42. FINANCIAL STATEMENTS. The term "Financial
Statements" shall mean all of the audited consolidated financial statements of
BBSI and its Subsidiaries, other than SEAFMAN, prepared with respect to its
business as at December 31, 1996, 1995 and 1994 consisting of the consolidated
balance sheets at such dates and the related statements of income, stockholders
equity and cash flow for each of the years then ended.
SECTION 2.43. GAAP. The term "GAAP" shall mean generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting
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Principles Board of the American Institute of Certified Pubic Accountants and
statements and pronouncements of the Financial Accounting Standards Board that
are applicable to the circumstances as of the date of determination.
SECTION 2.44. GOVERNMENTAL AUTHORITY. The term
"Governmental Authority" shall mean the government of the United States, any
foreign country or the Commonwealth of Puerto Rico or any state or political
subdivision thereof and any entity, body or authority exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including the PBGC and other quasi-governmental entities
established to perform such functions.
SECTION 2.45. GOVERNMENTAL LICENSES AND PERMITS. The term
"Governmental Licenses And Permits" shall mean the licenses, permits or other
authorizations required by any Applicable Law or Governmental Authority to be
held by a Person to own or operate the Assets and the assets of any of the
Sellers' Subsidiaries as they have been operated historically by any of the
Sellers or their Subsidiaries with respect to the BBSI Business.
SECTION 2.46. HAZARDOUS MATERIALS. The term "Hazardous
Materials" shall mean any hazardous substance, toxic substance, pollutant,
contaminant. hazardous waste, hazardous chemical or any other substance defined
pursuant to, or subject to, any federal, state or local law, regulation or
order relating to the protection of human health or welfare, plant life, animal
life, natural resources. the environment or property from the presence in the
environment of any solid, liquid, gas, odor or any form of energy, from
whatever source.
SECTION 2.47. HELLER FACILITY. The term "Heller Facility"
shall mean that certain Amended and Restated Credit Agreement dated as of May
15, 1991, as amended, by and among BBSI, BBII and the lenders listed therein
and Heller Financial Inc., as agent for the lenders.
SECTION 2.48. HSR ACT. The term "HSR Act" shall mean the
Hart Scott Rodino Antitrust Improvements Act of 1976 and regulations
promulgated thereunder.
SECTION 2.49. IHF FINANCIAL STATEMENTS. The IHF Financial
Statements shall mean (i) the audited consolidated financial statements of IHF
and its Subsidiaries prepared with respect to their business for the years
ended December 31, 1996 and 1995, (ii) the unaudited comparative balance sheets
for February 1997 and 1996 and statements of income for the month of February
and year to date February 1997, of IHF, and (iii) the unaudited financial
statements of IHF and its consolidated subsidiaries prepared on a quarterly or
more frequent basis.
SECTION 2.50. INDEBTEDNESS. The term "Indebtedness" means,
with respect to any Seller, the aggregate amount of, without duplication, the
following:
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a. all obligations, including interest
thereon, for borrowed money;
b. all obligations, including interest,
prepayment penalties, late charges and collection fees thereon,
evidenced by bonds, debentures, notes or other similar instruments;
c. all obligations to pay the deferred
purchase price of property or services, except Trade Payables (and
payables owed to BBII from BBSI), accrued commissions and other
similar accrued current liabilities in respect of such obligations,
arising in the ordinary course of business:
d. capital lease obligations;
e. all obligations or liabilities of
others secured by a lien on any asset owned by such Person or Persons
whether or not such obligation or liability is assumed:
f. all obligations of such Person or
Persons, contingent or otherwise, in respect of any letters of credit
or bankers acceptances; and
g. all guaranties.
SECTION 2.51. INITIAL ORDER. The term "Initial Order"
shall have the meaning ascribed to such term in Section 6.7. hereof.
SECTION 2.52. INTELLECTUAL PROPERTY. The term
"Intellectual Property" shall mean, with respect to any Person, (a) any and all
patents, patent applications, design patents, design patent applications,
industrial models, utility models, provisional or preliminary patent
applications, trademarks, registered trademarks, applications for registration
of trademark, service marks, registered service marks, applications for
registration of service mark, trade names, registered trade names, applications
for registration of trade name, logos, copyrights, registered copyrights,
applications for registration of copyright; (b) any and all technology, trade
secrets, inventions, formulae, know-how, designs, computer programs,
proprietary information, and processes; and (c) all other intangible assets,
properties and rights (whether or not appropriate steps have been taken to
protect, under applicable law, such other intangible assets, properties or
rights), all of which (i) are owned by that Person or (ii) are property in
which that Person has any right, license, or interest.
SECTION 2.53. INVENTORY. The term "Inventory" shall mean
inventory (i) of the type set forth on Sellers' most recently prepared Falcon
dated as of a month-end and also of the type defined in Article 9 of the UCC,
as to Sellers (and their Subsidiaries, except SEAFMAN and its Subsidiaries),
and (ii) of the type set forth on the most recently prepared SEAFMAN Internal
Financial Statement dated as of a month end and also of the type defined in
Article 9 of the UCC, as to SEAFMAN and its Subsidiaries, all, to the extent
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comprised of packaging materials, operating supplies, spare parts, raw
materials, work-in-process or finished products or goods of a type
manufactured, sold or consumed by any of the Sellers, SEAFMAN or their
respective Subsidiaries in the ordinary course of the BBSI Business.
SECTION 2.54. IRC. The term "IRC" means the Internal
Revenue Code of 1986, as amended from time to time, and any successor statute.
SECTION 2.55. KNOWLEDGE. The term "Knowledge" shall mean,
with respect to a specified party hereto, the actual knowledge of such party,
together with such additional knowledge as would be acquired by a reasonable
Person upon conducting reasonable and diligent inquiry concerning the subject
matter in question, except with respect to Knowledge in respect of Mayaguez and
its operations which shall be limited to the actual knowledge of the President
and Chief Executive Officer of BBSI without the additional knowledge as would
be acquired by a reasonable Person upon conducting reasonable and diligent
inquiry concerning the subject matter in question.
SECTION 2.56. LIENS. The term "Liens" shall mean, with
respect to any given property, all encumbrances, defects of title, deeds of
trust, security interests, pledges, liens, mortgages, tenancies, and other
possessory interests, conditional sales or other title retention agreements,
claims, building, use or other restrictions, charges, options, leases,
subleases, encroachments, covenants, assessments, easements and/or rights of
third parties of every kind and character arising or existing by operation of
law, by judicial decree or judgment or arbitral decision, by contract or
otherwise, whether or not accrued or fixed, absolute or contingent, known or
unknown, determined or determinable and whenever arising, including, but not
limited to, those evidenced by contracts, agreements, leases, indentures, deeds
of trust and security, conditional sale and other title retention agreements.
SECTION 2.57. MANTATUN. The term "Mantatun" shall mean
Pesqueria de Mantense de Atun S.A., an Ecuador corporation.
SECTION 2.58. MATERIAL ADVERSE EFFECT. The term "Material
Adverse Effect" shall mean (i) in respect of the Sellers, a material adverse
effect upon the business, operations, properties, assets or financial condition
of BBSI and its Subsidiaries taken as a whole, (ii) in respect of Buyer, a
material adverse effect upon the business, operations, properties, assets or
financial condition of IHF and Buyer, taken as a whole; and (iii) in respect of
the BBSI Business, a material adverse effect, which is reasonably foreseeable
at the Closing Date, upon the business, operations, properties, assets or
financial condition of the Buyer taken as a whole following the consummation of
the transactions contemplated by this Agreement.
SECTION 2.59. MAYAGUEZ. The term "Mayaguez" shall mean
Mayaguez Water Treatment Company, Inc., a Puerto Rico corporation.
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SECTION 2.60. MAYAGUEZ STOCK. The term "Mayaguez Stock"
shall mean all shares of capital stock of Mayaguez held of record by BBII.
SECTION 2.61. MEASUREMENT TIME. The term "Measurement
Time" means the date as of which Estimated Working Capital is calculated.
SECTION 2.62. OVERBID FEE. The term "Overbid Fee" shall
mean that fee, if any, not to exceed Four Million Dollars ($4,000,000), that
the Bankruptcy Court authorizes Seller to pay to Buyer as an expense of
administration of the Bankruptcy Proceedings immediately upon the
[consummation] [acceptance] of an Alternative Transaction during the term of
this Agreement.
SECTION 2.63. OVERBID PROCEDURES. The term Overbid
Procedures shall mean the following procedures for the Sellers to pursue an
Alternative Transaction: (i) any offer by a third party for an Alternative
Transaction (the "Offeror") must be received at least eight (8) Business Days
prior to the hearing on the Sales Order by each of Ronald L. Fein, Esq.,
Stutman, Treister & Glatt Professional Corporation, 3699 Wilshire Boulevard,
Suite 900, Los Angeles, California 90010, Lloyd Greif of Greif & Company, 777
South Figueroa Street, 29th Floor, Los Angeles, California 90017, and John
Batt, President, Bumble Bee Seafoods, Inc., 8899 University Center Lane, San
Diego, California 92122; (ii) all offers for an Alternative Transaction must be
made in the form of a definitive written purchase agreement, complete with all
exhibits and accompanied by the definitive form of any ancillary documents
contemplated thereby. The definitive purchase agreement must be signed by the
Offeror and contain a representation and warranty that it is the valid and
binding agreement of the Offeror, enforceable against the Offeror in accordance
with its terms. The definitive purchase agreement cannot contemplate the
closing of the transactions contemplated thereby on a day later than the 180th
day following the commencement of the Sellers chapter 11 cases; (iii) all
offers for an Alternative Transaction must be accompanied by evidence that
establishes to the Sellers, in their sole and absolute discretion, that the
Offeror is ready, willing and able to perform its obligations, monetary or
otherwise, under the definitive purchase agreement; (iv) all offers for an
Alternative Transaction must be accompanied by a certified or official bank
check in the amount of the Overbid Fee payable to the order of IHF together
with an acknowledgment that such check may be delivered to IHF
contemporaneously with the Seller's termination of the Agreement as provided in
Section 11.2. hereof and acceptance of the offered Alternative Transaction,
with the Offeror having no recourse against IHF and its only recourse with
respect to Sellers is to have such amount credited against the purchase price
it is obligated to pay as, if and when the offered Alternative Transaction is
consummated; (v) upon receipt of an offer for any Alternative Transaction, the
Sellers will promptly notify IHF in writing and indicate in such notice, the
identity of the Offeror and a complete and accurate description of the material
terms of such Alternative Transaction, and thereafter keep IHF informed on a
current basis, of the status and terms of such offer for an Alternative
Transaction. Upon the Board of Directors of BBSI determining in good faith
that an offer for an Alternative Transaction represents the highest and best
offer for the BBSI Business, the Sellers shall deliver, at least five (5)
Business Days prior to the hearing on
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the sales Order, a written notice to Buyer (an "Alternative Transaction
Notice") advising it of the foregoing determination, which notice shall be
accompanied by copies of the form of definitive purchase agreement, and other
documentation proposed to be entered into in connection with such Alternative
Transaction. Upon delivery of an Alternative Transaction Notice, Buyer shall
have the right (a "Topping Right") to deliver to Sellers (meaning receipt by
Messrs. Fein, Greif and Batt as aforesaid), within two (2) Business Days
following the receipt by Buyer of such Alternative Transaction Notice, a
written offer (a "Topping Offer") to amend the terms of the Agreement. In the
event that Buyer exercises such Topping Right then within three (3) Business
Days following receipt by Sellers of Buyer's notice of Topping Offer, the Board
of Directors of BBSI shall determine whether or not the terms and conditions of
the Topping Offer represents the highest and best offer for the BBSI Business.
If the Board of Directors of BBSI determines that the terms and conditions of
the Topping Offer represents the highest and best offer for the BBSI Business,
then Buyer and Sellers shall promptly enter into an amendment to this Agreement
to reflect Sellers' acceptance of Buyer's Topping Offer. If within the time
period specified Buyer has failed to make a Topping Offer or has notified
Sellers in writing that it oes not intend to make a Topping Offer, or if after
the receipt of a Topping Offer the Board of Directors of BBSI determines that
the terms and conditions of such Alternative Transaction represents the highest
and best offer for the BBSI Business, then Sellers may terminate the Agreement
in accordance with Section 11.2. hereof and enter into the definitive purchase
agreement with the Offeror described in the Alternative Transaction Notice.
SECTION 2.64. PBGC. The term "PBGC" shall mean the Pension
Benefit Guaranty Corporation or any successor thereto.
SECTION 2.65. PENSION PLAN. The term "Pension Plan" shall
mean any Employee Benefit Plan which is subject to the provisions of Title IV
of ERISA or Section 412 of the IRC and which (a) is maintained for employees of
BBSI or any of its ERISA Affiliates or (b) has at any time within the preceding
six (6) years been maintained for the employees of BBSI or any of its current
or former ERISA Affiliates.
SECTION 2.66. PERMITTED ENCUMBRANCES. The term "Permitted
Encumbrances" shall mean the following types of Liens.
a. Statutory Liens for Taxes,
assessments or other governmental charges not yet due and payable;
b. Statutory Liens of landlords,
carriers, warehousemen, mechanics, materialmen and other similar liens
imposed by law, which are incurred in the ordinary course of business
for obligations which (i) are not yet due or (ii) which are being
contested in good faith and are identified on Schedule 4.4; provided
that a reserve or other appropriate provision shall have been made
therefor:
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c. Leases or subleases granted to
others not interfering in any material respect with the BBSI Business,
and any interest or title of a lessor or sublessor thereunder;
d. Easements, rights-of-way,
restrictions, and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
BBSI Business.
e. Those Liens set forth on Schedule
4.4.
SECTION 2.67. PERSON. The term "Person" shall mean an
individual, a corporation, a partnership, an association, a trust or any other
entity or organization, including, but not limited to, a government or a
political subdivision thereof or an agency or instrumentality of any government
or political subdivision thereof.
SECTION 2.68. PERSONAL PROPERTY. The term
"Personal Property" shall mean, with respect to any Person, all machinery,
equipment, computer programs, computer software, tools, motor vehicles,
furniture, furnishings, leasehold improvements, office equipment, supplies,
plant, spare parts, goodwill, stocks and other Securities and other tangible or
intangible personal property which are owned or leased by that Person.
SECTION 2.69. PURCHASE PRICE. The term "Purchase Price"
shall mean One Hundred and Sixty-Three Million Dollars ($163,000,000), (i) less
the dollar amount by which Closing Working Capital is less than Seventy-Five
Million Dollars ($75,000,000) and plus the dollar amount by which Closing
Working Capital is more than Seventy-Five Million Dollars ($75,000,000); but in
no event shall the Purchase Price be less than One Hundred and Fifty-Three
Million Dollars ($153,000,000).
SECTION 2.70. REAL PROPERTY. The term "Real Property"
shall mean, with respect to any Person, all of that Person's right, title and
interest to, in or under parcels of real property and all buildings,
structures, improvements, and fixtures thereon, together with all rights of
way, easements, privileges, and appurtenances pertaining or belonging thereto,
including any right, title, and interest in and to any street or other property
adjoining any portion of such property, which are owned by that Person.
SECTION 2.71. REAL PROPERTY LEASED. The term "Real
Property Leased" shall mean, with respect to any Person, all of that Person's
right, title and interest to, in or under Real Property that is leased by that
Person; provided that Real Property Leased shall not include the right, title
and interest of BBSI to, in and under the premises of the San Diego
Headquarters Lease.
SECTION 2.72. SALES ORDER. The term "Sales Order" means
the order by the Bankruptcy Court (i) authorizing the sale and conveyance of
the Assets, pursuant to Sections 363(b) and (f) and to the extent, if any,
necessary, Section 105 of the Bankruptcy Code, free and clear of all claims,
liens (including Liens), encumbrances and
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other interests in the Assets (other than the (a) the interest of estates of
the Sellers or of the debtors in possession, which interests are to be conveyed
to Buyer at Closing, (b) the Permitted Encumbrances, and (c) the Assumed
Liabilities); (ii) approving the assumption of the Assumed Contracts by the
Sellers as debtors in possession and the assignment of the Assumed Contracts to
the Buyer pursuant to Sections 365(a), (c) and (k) of the Bankruptcy Code. The
Sales Order shall include or be accompanied by findings which, among other
things, shall determine that Buyer is a good faith purchaser for purposes of
Section 363(m) of the Bankruptcy Code.
SECTION 2.73. SAN DIEGO HEADQUARTERS LEASE. The term "San
Diego Headquarters Lease" shall mean that certain British Pacific Centre Office
Building Lease Between British Pacific Properties Corporation, a California
corporation, and Bumble Bee Seafoods, Inc., a Delaware corporation, dated May
14, 1992.
SECTION 2.74. SEAFMAN. The term "SEAFMAN" shall mean
Sociedad Ecuatoriana de Alimentos y Frigorificos Manta, C.A.
SECTION 2.75. SEAFMAN CLOSING WORKING CAPITAL. The term
"SEAFMAN Closing Working Capital" shall mean "Estimated Working Capital", plus
increase in Accounts Receivable and Inventory from the Measurement Time to the
close of business the day before the Closing Date, minus decreases in Accounts
Receivable and Inventory from the Measurement Time to the close of business the
day before the Closing Date, plus (minus) any decrease (increase) in Trade
Payables from the Measurement Time to the close of business the day before the
Closing Date. For purposes of this defined term, the term "Accounts
Receivable" shall exclude Trade Payables owed to SEAFMAN by BBSI, and shall
include amounts historically classified as "Drafts Payable" in the SEAFMAN
Internal Financial Statements to the extent that such amounts relate to the
payment of Trade Payables.
SECTION 2.76. SEAFMAN ESTIMATED WORKING CAPITAL. The term
"SEAFMAN Estimated Working Capital" shall mean the SEAFMAN Working Capital as
adjusted as of a day not more than five (5) Business Days before the Closing
Date by the increases in Accounts Receivable and Inventory from the date of the
month-end reflected in the then most current SEAFMAN Internal Financial
Statements to the Measurement Time, the decreases in Accounts Receivable and
Inventory from the date of the month-end reflected in the then most current
SEAFMAN Internal Financial Statements and the net increase or decrease in Trade
Payables from the date of the month-end reflected in the then most current
SEAFMAN Internal Financial Statements to the Measurement Time. For purposes of
this defined term, the term "Accounts Receivable" shall exclude Trade Payables
owed to SEAFMAN by BBSI, and shall include amounts historically classified as
"Drafts Payable" in the SEAFMAN Internal Financial Statements to the extent
that such amounts relate to the payment of Trade Payables.
SECTION 2.77. SEAFMAN FINANCIAL STATEMENTS. The term
"SEAFMAN Financial Statements" shall mean the audited consolidated financial
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statements and related notes of SEAFMAN prepared with respect to its business
as at December 31, 1996, 1995 and 1994 consisting of the consolidated balance
sheets at such dates and the related statements of income, stockholders equity
and cash flow for each of the years then ended.
SECTION 2.78. SEAFMAN INTERNAL FINANCIAL STATEMENTS. The
term "SEAFMAN Internal Financial Statements" shall mean SEAFMAN's unaudited
internally prepared financial statements of SEAFMAN and its consolidated
subsidiaries prepared on a quarterly or more frequent basis.
SECTION 2.79. SEAFMAN STOCK. The term "SEAFMAN Stock"
shall mean all shares of capital stock of SEAFMAN held of record by BBSI.
SECTION 2.80. SEAFMAN WORKING CAPITAL. The term "SEAFMAN
Working Capital" shall mean Inventory and Accounts Receivable of SEAFMAN and
its Subsidiaries, less Trade Payables of SEAFMAN and its Subsidiaries, all as
set forth in the most recent SEAFMAN Internal Financial Statements. For
purposes of this defined term, the term "Accounts Receivable" shall exclude
amounts Trade Payables owed to SEAFMAN by BBSI, and shall include amounts
historically classified as "Drafts Payable" in the SEAFMAN Internal Financial
Statements to the extent that such amounts relate to the payment of Trade
Payables.
SECTION 2.81. SCHEDULE OR SCHEDULES. The term "Schedule"
shall mean any schedule, and the term "Schedules" shall mean all Schedules,
attached hereto and incorporated herein.
SECTION 2.82. SECURITIES. The term "Securities" shall mean
any stock, shares, voting trust certificates, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participations
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
SECTION 2.83. SELLER. The term "Seller" shall have the
meaning ascribed to such term in the introductory paragraph of this Agreement.
SECTION 2.84. SELLERS' RETIREMENT PLAN. The term "Sellers'
Retirement Plan" shall have the meaning ascribed to such term in Section 3.4.c.
SECTION 2.85. SELLERS' SAVINGS PLAN. The term "Sellers'
Savings Plan" shall have the meaning ascribed to such term in Section 3.4.d.
SECTION 2.86. SELLERS' SEVERANCE PLAN. The term "Sellers'
Severance Plan" shall have the meaning ascribed to such term in Section 3.4.b.
SECTION 2.87. SFSHC. The term "SFSHC" shall mean Santa Fe
Springs Holding Company, a Delaware corporation.
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SECTION 2.88. SUBSIDIARY. The term "Subsidiary" shall
mean, with respect to any Person, any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
stock or similar interests entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof.
For purposes of this Agreement, the Subsidiaries of BBSI include BBII, CDC,
SFSHC, SEAFMAN, Mantatun and Mayaguez, but does not include Bumble Bee de
Panama S.A.
SECTION 2.89. SUCRES. The term "Sucre" or "Sucres" shall
mean the Ecuadorian medium of currency or monetary exchange; all financial
information, data or calculations relating thereto in respect of SEAFMAN and
its Subsidiaries shall be in Sucres.
SECTION 2.90. SURVEY. The term "Survey" shall have the
meaning ascribed to such term in Section 8.6.
SECTION 2.91. TAX EXEMPTION ORDER. The term "Tax Exemption
Order" shall mean that certain grant of Puerto Rican industrial taxation
exemption issued to Bumble Bee International, Inc. by the Governor of the
Commonwealth of Puerto Rico in Case No. 91-8-IA-1, as amended, pursuant to the
provisions of Section 3(m) of Act No. 8 of January 24, 1987, as amended, also
known as the Puerto Rico Tax Incentives Act of 1987.
SECTION 2.92. TAX RETURN. The term "Tax Return" shall mean
any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
SECTION 2.93. TAXES. The term "Taxes" shall mean, with
respect to any Person, (a) any net income, gross income, gross receipts,
estimated, alternative minimum, environmental, sales, use, ad valorem,
franchise, fuel, profits, license, withholding, payroll, employment, excise,
severance, stamp, transfer, occupation, premium, property or windfall profit
tax, custom duty or other tax, fee, assessment or charge of any kind or nature
whatsoever, together with any interest, fines and any penalty thereon, imposed
by any Governmental Authority on such Person or with respect to the assets or
operations of such Person, and (b) any liability of such Person for the payment
of any amount of the type described in the immediately preceding clause (a) as
a result of such Person's being a member of an affiliated or combined group.
SECTION 2.94. TERMINATION EVENT. The term "Termination
Event" shall mean (a) a "Reportable Event" described in Section 4043 of ERISA
and the regulations issued thereunder (other than a "Reportable Event" not
subject to the provision for the
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thirty (30) day notice to the PBGC under such regulations); or (b) the
withdrawal of BBSI, BBII or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) or 4068(f) of ERISA; or (c) the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination under Section 4041 of ERISA; or (d) the institution of proceedings
to terminate a Pension Plan by the PBGC; or (e) any other event or condition
which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan; or (f) the imposition of a Lien pursuant to Section 412 of the IRC or
Section 302 of ERISA.
SECTION 2.95. TITLE COMMITMENT. The term "Title
Commitment" shall have the meaning ascribed to such term in Section 8.5.
SECTION 2.96. TITLE COMPANY. The term "Title Company"
shall mean Chicago Title Company.
SECTION 2.97. TITLE POLICY. The term "Title Policy" shall
have the meaning ascribed to such term in Section 8.5.
SECTION 2.98. TRADEMARKS. The term "Trademarks" shall mean
trademarks, service marks, trade names, trade dress, labels, logos, and all
other names and slogans associated with any products or embodying the goodwill
of the BBSI Business, whether or not registered.
SECTION 2.99. TRADE PAYABLES. The term "Trade Payables"
shall mean (i) accounts payable arising out of Inventory purchased by or
services performed for a Person in the ordinary course of business consistent
with past practices except any payables owed to BBII by BBSI, and (ii)
obligations related to the investigation of, or remedial steps taken in
connection with Sulfites contained in Inventory of the BBSI Business.
SECTION 2.100. TRANSFERRED EMPLOYEE. The term "Transferred
Employee" shall have the meaning ascribed to such term in Section 3.4.a.
SECTION 2.101. UCC. The term "UCC" shall mean the Uniform
Commercial Code as in effect on the date hereof in the State of California, as
amended from time to time, and any successor statute.
SECTION 2.102. UNICORD - THAILAND. The term "Unicord -
Thailand" shall mean Unicord Public Company Limited, a Thailand corporation.
SECTION 2.103. UNI GROUP. The term "Uni Group" shall mean
Uni Group, Inc., a Delaware corporation.
SECTION 2.104. UNI GROUP - BVI. The term "Uni Group - BVI"
shall mean Uni Group, Inc., a British Virgin Islands corporation.
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SECTION 2.105. WORKING CAPITAL. The term "Working Capital"
shall mean, Inventory and Accounts Receivable included in the Assets, less
Trade Payables Included in the Assumed Liabilities, all as set forth in
Sellers' most recent Falcon. For purposes of this defined term, the term
"Accounts Receivable" shall (i) exclude amounts historically classified as
"Short Payments" in the trade receivables detail included in the Falcons and
Trade Payables owed to SEAFMAN by BBSI and Trade payables owed to SEAFMAN by
BBSI, and (ii) shall include amounts historically classified as "Drafts
Payable" in the Falcons to the extent that such amounts relate to the payment
of Trade Payables.
References to "Articles", "Sections", "subsections",
"Exhibits", and "Schedules" shall be to Articles, Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in this Article 2 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. All references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.
ARTICLE 3
TRANSACTIONS TO BE EFFECTED AT CLOSING
SECTION 3.1. CLOSING. The transfer of the Assets, free
and clear of all Liens or liabilities (other than Permitted Encumbrances and
liabilities assumed in accordance with this Agreement), and the delivery of the
consideration therefor by Buyer shall be effected as provided in this Agreement
on the Closing Date. Time shall be of the essence. The Closing shall take place
at the offices of Stutman, Treister & Glatt Professional Corporation, 3699
Wilshire Boulevard, Suite 900, Los Angeles, California 90010, at 9:00 a.m.,
local time, on the fifth (5th) Business Day following the date that the
conditions specified in Article 7, in Article 8 and in Article 9 shall have
been satisfied, or at such other time, date or place as shall be mutually
agreed upon in writing by the parties hereto.
SECTION 3.2. DELIVERY AND PAYMENT.. At the Closing, upon
the terms and subject to the conditions of this Agreement:
a. Each of the Sellers shall sell,
transfer, assign, convey and deliver to Buyer, and IHF shall cause
Buyer to purchase, accept and take from each of the Sellers, the
Assets free and clear of all Liens or liabilities (other than
Permitted Encumbrances and liabilities assumed in accordance with this
Agreement), in an "AS IS-WHERE IS CONDITION", and, in connection
therewith, each of the Sellers shall deliver to Buyer the following:
(i) TRANSFER DOCUMENTS. A duly
executed bill of sale, substantially in the form of Exhibit
"A" hereto, and such other appropriately executed and
authenticated documents, stock powers, deeds,
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assignments and instruments of sale, transfer, assignment and
conveyance with respect to the Assets as Buyer or its counsel
may reasonably request, in each case as shall be necessary to
sell, transfer, assign and convey to, and to vest in, Buyer,
title to the Assets as set forth therein.
(ii) DEED. A duly executed grant
deed or similar instrument conveying fee simple title to all
Real Property of that Seller included in the Assets, subject
only to Permitted Encumbrances.
(iii) OFFICER CERTIFICATES. The duly
executed officer certificates described in Section 5.1.a.
(iv) ASSUMPTION AGREEMENT. A duly
executed counterpart of an assumption agreement substantially
in the form of Exhibit "C" hereto.
(v) LICENSES AND PERMITS. The
originals and/or duly executed assignments by each Seller, in
form suitable for filing or recording with the appropriate
Governmental Authority, if applicable, of all of its
Governmental Licenses And Permits.
(vi) ESTIMATED WORKING CAPITAL
STATEMENT. A detailed statement setting forth the amounts of
Estimated Working Capital, Closing Working Capital, SEAFMAN
Estimated Working Capital and SEAFMAN Closing Working Capital,
including the amounts, by general ledger account, of Accounts
Receivable, Inventory and Trade Payables.
(vii) RECORDS. To the extent that
they are in the possession of a Seller, all Books And Records,
which shall be available at the Closing or at an office of a
Seller conveyed to Buyer hereunder.
(viii) SAN DIEGO SUBLEASE. A duly
executed counterpart of the sublease agreement contemplated by
Section 6.5.
(ix) Such other documents as may be
reasonably requested by the Title Company as required under
the terms of the Title Policy.
b. IHF shall cause Buyer to purchase
the Assets and, in connection therewith, IHF shall cause the Buyer to
deliver to BBSI the following:
(i) PURCHASE PRICE. Payment of the
Purchase Price, less the amount determined for California real
property transfer taxes in accordance with Section 6.8., by
wire transfer of immediately available funds to an account or
accounts maintained at a national banking association and
designated by BBSI to receive such funds. Payment of the
amount so
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determined for California real property transfer taxes shall
be paid by Buyer to the appropriate Government Authority at
the same time in a manner satisfactory to Buyer and Sellers.
(ii) ASSUMPTION AGREEMENT. A duly
executed counterpart of an assumption agreement substantially
in the form of Exhibit "C" hereto relating to the Assumed
Liabilities and such other appropriately executed and
authenticated documents, assumptions, assignments,
instruments, or agreements with respect to the Assumed
Liabilities, including the debts, liabilities and obligations
which are part thereof, which a Seller or its counsel may
reasonably request, in each case as shall be necessary to
transfer, or assign to Buyer, the Assumed Liabilities as set
forth herein.
(iii) OFFICER CERTIFICATES. The duly
executed officer certificates described in Section 5.1.a.
(iv) SAN DIEGO SUBLEASE. A duly
executed counterpart of the sublease agreement contemplated by
Section 6.5.
c. Buyer shall deposit with the Escrow
Agent the Escrow Amount pursuant to the Escrow Agreement.
SECTION 3.3. POSSESSION AND RISK OF LOSS.
a. The risk of any loss, damage,
impairment, confiscation, or condemnation of any of the Assets from
any cause whatsoever shall be borne by the Sellers at all times prior
to the Closing. In the event of any material such loss, damage,
impairment, confiscation, or condemnation, whether or not covered by
insurance, the Sellers shall promptly notify Buyer of such loss,
damage, impairment, confiscation, or condemnation.
b. If a Seller, at its expense,
repairs, replaces, or restores such Assets to their prior condition to
the satisfaction of Buyer before the Closing, the Sellers shall be
entitled to all insurance proceeds and condemnation awards, if any, by
reason of such award or loss.
c. If the Sellers do not or cannot
restore or replace lost, damaged, impaired, confiscated or condemned
Assets, the lack of restoration or replacement of which would have a
Material Adverse Effect on Sellers, and inform Buyer that they do not
intend to restore or replace such Assets, Buyer may at its option:
(i) terminate this Agreement by
notice forthwith without any further obligation hereunder; of
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(ii) proceed to the Closing of this
Agreement without the Sellers completing the restoration and
replacement of such Assets, provided that, at Buyer's option,
the Sellers shall assign all rights under applicable insurance
policies and condemnation awards, if any, to Buyer or Sellers
shall cause Buyer to be named at an additional insured under
the applicable insurance policies; and in such event, the
Sellers shall have no further liability with respect to the
condition of the Assets directly attributable to the loss,
damage, impairment, confiscation, or condemnation.
d. Buyer will notify BBSI of a decision
under the options described in Section 3.3.c.(i)or Section 3.3.c.(ii)
above, within ten (10) Business Days after Sellers' notice to Buyer of
the damage or destruction of Assets and the estimate of the costs to
repair or replace; provided, however, that if a Seller states that it
intends to restore the damaged Assets and if the Sellers have not
restored such damaged Assets immediately prior to the Closing Date,
notwithstanding Buyer's prior delivery of a notice to proceed pursuant
to this Section 3.3.d., Buyer shall have the right to either postpone
the Closing to a mutually agreeable date or terminate this Agreement
by notice forthwith.
SECTION 3.4. EMPLOYEES.
a. Buyer shall not be obligated to
employ any employees of any Seller or its Subsidiaries. To the extent
that Buyer or any Subsidiary or Affiliate of Buyer does employ an
employee of a Seller or any of its Subsidiaries ("Transferred
Employee"), such Transferred Employee shall be employed by Buyer or
any Subsidiary or Affiliate of Buyer at such level of compensation and
benefits as Buyer shall determine; provided, however, that
notwithstanding any provision herein to the contrary, Buyer shall
assume the obligations of each Seller and its Subsidiaries under those
employment agreements included on Schedule 2.8, copies of which have
been provided to Buyer or IHF.
b. Buyer shall be obligated to pay all
severance benefits under the severance plan of BBSI (the "Seller's
Severance Plan"), a copy of which is attached hereto as Exhibit "D",
to any employee terminated by any Seller with the consent of Buyer in
contemplation of the Closing. Additionally, Buyer shall be obligated
to provide severance benefits reasonably comparable to the severance
benefits provided under Seller's Severance Plan to any Transferred
Employee terminated by Buyer within six (6) months following the
Closing Date, provided such Transferred Employee is not terminated for
"Cause," which for purposes of this Section 3.4.shall be defined as
(i) fraud, embezzlement against any Seller or its Subsidiaries or
Buyer or any Subsidiary or Affiliate of Buyer, falsification of
records or other similar acts, (ii) gross neglect of or a gross
failure to perform substantial job duties, (iii) commission of a
felony crime, or (iv) demonstrated substance abuse. Buyer shall not
be obligated to provide severance benefits under this Section 3.4. if
a Transferred Employee is offered employment by Buyer or any
Subsidiary or
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Affiliate of Buyer involving the relocation of principal work place
that is within twenty (20) miles of the original work place.
c. Effective as of the Closing, Buyer
shall assume and adopt (or cause a Subsidiary or Affiliate of Buyer to
assume or adopt) the Employee's Retirement Plan for Bumble Bee
International, Inc., also known as the Retirement Plan for Employees
of Bumble Bee International, Inc. ("Sellers' Retirement Plan") and
shall fully succeed to all of the Sellers' and their Subsidiaries'
rights and shall fully perform and discharge all of the Sellers' and
their Subsidiaries' obligations, as a successor employer under and
with respect to Sellers' Retirement Plan and the related trust
agreement and assets thereof. Each Seller and Buyer shall take such
actions as may be necessary or appropriate in order to establish Buyer
(or a Subsidiary or Affiliate of Buyer) as the successor employer
under the Sellers' Retirement Plan and the related trust agreement.
d. Effective as of the Closing, Buyer
shall assume and adopt (or cause a Subsidiary or Affiliate of Buyer to
assume and adopt) the Bumble Bee Seafoods, Inc. Retirement Savings
Plan ("Sellers' Savings Plan") and shall fully succeed to all of
Sellers' and their Subsidiaries' rights and shall fully perform and
discharge all of Sellers' and their Subsidiaries' obligations as a
successor employer under and with respect to Sellers' Savings Plan and
the related trust agreement and assets thereof. Each Seller and Buyer
shall take such actions as may be necessary or appropriate in order to
establish Buyer (or a Subsidiary or Affiliate of Buyer) as the
successor employer under Sellers' Savings Plan and the related trust
agreement.
e. Notwithstanding any provision herein
to the contrary, Buyer shall assume obligations and liabilities under
any Employee Benefit Plan maintained by any Seller or its Subsidiaries
which is identified on Schedule 2.8 and any existing or future COBRA
obligations of Sellers (other than with respect to employees who
continue as employees of Sellers after the Closing).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF EACH OF THE SELLERS
Each Seller, jointly and severally, hereby represents and
warrants to IHF and Buyer that the following statements are true and correct:
SECTION 4.1. ORGANIZATION, POWERS, CAPITALIZATION, GOOD
STANDING, BUSINESS AND SUBSIDIARIES.
a. ORGANIZATION AND POWERS. Each
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of
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Delaware, its jurisdiction of incorporation. Each Seller has all
requisite corporate power and authority (i) to own, lease and operate
its properties, (ii) to carry on its business as now conducted and
proposed to be conducted, (iii) to enter into this Agreement and each
other agreement, instrument and certificate required to be executed
thereby in accordance herewith, and (iv) to carry out the transactions
contemplated hereby.
b. CAPITALIZATION. The authorized
capital stock, and the ownership thereof, of each Seller is identified
on Schedule 4.1.b and all such outstanding shares of capital stock of
each Seller are duly authorized and validly issued, fully paid,
nonassessable and issued in compliance with all applicable state and
federal laws concerning the issuance of Securities. There are no
preemptive or other outstanding rights, options, warrants, conversion
rights or similar agreements or understandings for the purchase or
acquisition from a Seller of any share of capital stock or other
Securities of that Seller.
c. QUALIFICATION. Each Seller is duly
qualified and in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties
makes such qualification necessary, except in jurisdictions in which
the failure to be qualified and in good standing has not had and will
not have a Material Adverse Effect on the Sellers. Each jurisdiction
in which a Seller is qualified to do business is set forth an Schedule
4.1.c.
d. SUBSIDIARIES.
(i) All of the direct or indirect
Subsidiaries of BBSI are identified on Schedule 4.1.d.
(ii) The authorized and outstanding
capital stock, and the ownership thereof, of each of SEAFMAN,
Mantatun and Mayaguez is identified on Schedule 4.1.d, and all
such outstanding shares of capital stock are duly authorized,
validly issued, fully paid and nonassessable and issued in
compliance with all applicable laws concerning the issuance of
Securities, and, except as set forth on Schedule 4.1.d, are
free and clear of all Liens other than Permitted Encumbrances.
There are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or
understandings for the purchase or acquisition of any share of
capital stock or other security of SEAFMAN, Mantatun or
Mayaguez. Each of SEAFMAN, Mantatun and Mayaguez is duly
organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation as set
forth on Schedule 4.1.d and is duly qualified and in good
standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes
such qualification necessary, except in jurisdictions in which
the failure to be qualified and in good standing has not had
and will not have a Material Adverse Effect on the Sellers.
Each of
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SEAFMAN, Mantatun and Mayaguez has all requisite corporate
power and authority to own, lease and operate its properties
and to carry on its business as now conducted and proposed to
be conducted.
(iii) All Ecuadorean Government
Licenses and Permits used in the BBSI Business are issued to,
or the property of, Mantatun or SEAFMAN.
e. PANAMANIAN SUBSIDIARY. Bumble Bee
de Panama, S.A., a Panama corporation, (A) owns no assets, whether
real, personal, tangible, intangible or otherwise, and (B) has no
liabilities or obligations, whether known, unknown, fixed, accrued,
absolute, contingent or otherwise, in each case which are material to
the BBSI Business.
SECTION 4.2. AUTHORIZATION OF AGREEMENT, ETC.
a. AUTHORIZATION OF AGREEMENT. The
execution, delivery and performance of this Agreement by each of the
Sellers, and all other agreements, instruments and certificates to be
entered into or delivered by each of the Sellers in connection with
the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate and shareholder action.
b. NO CONFLICT. Except as set forth on
Schedule 4.2.b, the execution, delivery and performance by each of the
Sellers of this Agreement and the consummation of the transactions
contemplated hereby, do not and will not: (i) violate, conflict with,
or result in any breach of any provision of the certificate of
incorporation or bylaws (or similar organizational documents) of any
Seller or its Subsidiaries, (ii) violate, conflict with, or result in
a violation or breach of, or constitute a default (with or without due
notice or lapse of time or both) under, or permit the termination of,
or result in the acceleration of, or entitle any party to accelerate
(whether as a result of a change of control of a Seller or otherwise)
any obligation under, or result in the loss of any benefit under, or
give any Person the right to require any security to be repurchased
under, or give rise to the creation of any Lien upon any of the Assets
under, any of the terms, conditions, or provisions of any Contractual
Obligation of any Seller or its Subsidiaries or pursuant to which any
Seller or its Subsidiaries or any of the Assets may be bound or
subjected, (iii) subject to making or obtaining the filings,
registrations, consents, approvals, orders, authorizations and notices
described in this Section 4.2.b., violate any order, writ, judgment,
injunction, decree, statute, law, rule, or regulation, of any
Governmental Authority applicable to any Seller or its Subsidiaries by
which or to which any of the Assets is bound or subject, or (iv)
require any approval or consent of any Person under any Contractual
Obligation of any Seller or its Subsidiaries, except for such
approvals, waivers, or consents to be obtained on or before the
Closing Date (which consist solely of Governmental Consents, and
consent of the landlord under the San Diego Headquarters Lease) and
consents of lenders or agents for lenders set forth on Schedule 4.2.b.
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c. GOVERNMENTAL CONSENTS. The
execution, delivery and performance by each of the Sellers of this
Agreement and the consummation of the transactions contemplated hereby
do not and will not require any filings or registration with, consent,
order, authorization or approval of, or notice to, or other action by,
or with, any Governmental Authority, except for filings,
authorizations, consents, notices, and approvals set forth on Schedule
4.2.c. which have been made or obtained and copies of which have been
delivered to Buyer.
d. BINDING OBLIGATION. Upon execution
and delivery by each of the Sellers, this Agreement will be the
legally valid and binding obligations of each of the Sellers,
enforceable against each of the Sellers in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratoriums and other similar laws and
equitable principles relating to or limiting creditor rights
generally.
SECTION 4.3. FINANCIAL CONDITION.
a. FINANCIAL STATEMENTS. The Financial
Statements and all of Sellers' Falcons for the month ending February
28, 1997 and each month thereafter and which have been furnished by
the Sellers to the Buyer have been prepared in accordance with GAAP
consistently applied through the periods involved (except as disclosed
therein or in Schedule 4.3.a) and present fairly the consolidated
financial condition of the corporations covered thereby as at the
dates thereof and the results of their operations for the periods then
ended. The SEAFMAN Financial Statements and the SEAFMAN Internal
Financial Statements for the month ending February 28, 1997 and each
month thereafter which have been furnished by Sellers to the Buyer
have been prepared in accordance with accounting principles generally
accepted in Ecuador consistently applied through the periods involved
(except as disclosed therein or in Schedule 4.3.a) and present fairly
the consolidated financial condition of the corporations covered
thereby as at the dates thereof and the results of their operations
for the periods then ended.
b. LIABILITIES. Except as disclosed
in Schedule 4.3, (i) there is no Assumed Liability of any of the
Sellers or any of such Seller's Subsidiaries (whose financial
statements are consolidated with those of BBSI in the Financial
Statements) that either is not reflected or reserved against in the
consolidated balance sheet as of December 31, 1996 included in the
Financial Statements or the balance sheet included in the Falcon for
the month ended February 28, 1997 other than (a) such liabilities
incurred in the ordinary course of business in a manner consistent
with past practices since December 31, 1996 in the case of the
Financial Statements or since February 28, 1997 in the case of the
Falcon, and (b) any such liability or obligation which would not be
required to be set forth on the above-referenced consolidated balance
sheet as of December 31, 1996
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included in the Financial Statements or the balance sheet in the
Falcon for the month ending February 28, 1997; in each case determined
as if such liability or obligation existed on the date of such balance
sheet, and (ii) there is no liability or obligations of any kind,
whether owed, absolute, fixed, contingent or otherwise of SEAFMAN or
its consolidated Subsidiaries that either is not reflected or reserved
against in the consolidated balance sheet as of December 31, 1996
included in the SEAFMAN Financial Statements or on the balance sheet
included in the SEAFMAN Internal Financial Statements for the month
ending February 28, 1997, other than (a) such liabilities or
obligations incurred in the ordinary course of business in a manner
consistent with past practices since December 31, 1996 in the case of
the SEAFMAN Financial Statements or since February 28, 1997 in the
case of the SEAFMAN Internal Financial Statements and (b) any such
liability or obligation which would not be required to be set forth on
the above-referenced consolidated balance sheet as of December 31,
1996 included in the SEAFMAN Financial Statements or the
above-referenced balance sheet in the SEAFMAN Internal Financial
Statements for the month ending February 28, 1997, respectively, in
each case determined as if such liability or obligation existed on the
date of such balance sheet.
c. ABSENCE OF CERTAIN CHANGES. Except
as disclosed in Schedule 4.3 or as contemplated herein, since February
28, 1997, each of the Sellers and their respective Subsidiaries have
conducted the BBSI Business only in the ordinary course consistent
with past practice and nothing has occurred that would have been
prohibited by Section 6.1. or Section 6.2. if the terms of such
Sections had been in effect as of and after February 28, 1997. Except
as included in Schedule 4.3 or as contemplated herein, since February
28, 1997, there has not occurred, and each of the Sellers and their
respective Subsidiaries have not incurred or suffered, any event,
circumstance, or fact which would result in a Material Adverse Effect
on the Sellers.
SECTION 4.4. TITLE TO PROPERTIES; LIENS. Each
Seller and each of their respective Subsidiaries has good and marketable title
to, free and clear of all Liens (other than Permitted Encumbrances and other
than Liens set forth on Schedule 4.4, or a binding leasehold interest in, all
their respective properties and assets to be purchased by Buyer.
SECTION 4.5. CONDITION AND SUFFICIENCY OF ASSETS.
Except as disclosed on Schedule 4.5, all of the tangible Assets to be purchased
by Buyer whether real, personal, owned or leased, have been maintained and are
in good operating condition and repair (with the exception of normal wear and
tear), and are free from defects other than such defects as do not interfere
with the intended use thereof in the conduct of normal operations. Upon the
Closing, Buyer shall own or have a permanent right to use all of the Assets,
including good, marketable and fee simple title to each parcel of Real
Property. The Assets and the assets of SEAFMAN and its Subsidiaries represent
all of the properties and assets (including Personal Property, Accounts
Receivable, Inventory, Intellectual
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Property, Governmental Licenses And Permits, Real Property and Real Property
Leased) which are required for or currently used in connection with the
operation of the BBSI Business, as presently conducted, with the exception of
the Excluded Assets.
SECTION 4.6. REAL PROPERTY.
a. Schedule 4.6 includes a complete
list of all Real Property and Real Property Leased of each of the
Sellers and their respective Subsidiaries, together with a description
of the ownership or leasehold interest therein. To the Knowledge of
each of the Sellers, the activities carried on in all buildings,
plants, facilities, installations, fixtures and other structures or
improvements included as part of, or located on or at such property,
and the buildings, plants, facilities, installations, fixtures and
other structures or improvements themselves, are not in violation of,
or in conflict with, any applicable zoning, or health regulations or
ordinance or any other Applicable Law. No parcel of land included in
such property relies on or regularly makes use of access to the
nearest public road or right-of-way over land owned by others, except
where such access is by means of one or more valid recorded easements
not subject to divestiture, the terms of which have been disclosed in
writing to Buyer prior to the date hereof. All covenants or other
restrictions (if any) to which any of such property is subject are
being in all respects property performed and observed and, except for
covenants contained in the Real Property Leases, do not provide for
forfeiture or reversion of title if violated, and each of the Sellers
have not received any notice of violation (or claims violations)
thereof. BBSI has delivered to Buyer true and complete copies of the
most recent title insurance policies and surveys (if any) for the Real
Property in the possession of any of the Sellers together with copies
of all reports (if any) prepared within the last twelve (12) month
period immediately preceding the date hereof, of any engineers,
environmental consultants or other consultants in its possession
specifically relating to any of such property.
b. Except as disclosed on Schedule 4.6,
there is no pending, or to the Knowledge of each of the Sellers,
threatened or proposed proceeding or governmental action to modify the
zoning classification of, or to condemn or take by the power of
eminent domain (or to purchase in lieu thereof), or to classify as a
landmark, or to impose special assessments on, or otherwise to take or
restrict in any way the right to use, develop or alter, all or any
part of the Real Property or the Real Property Leased included in the
Assets, or all or any part of the real estate used in the BBSI
Business by SEAFMAN, Mantatun or Mayaguez, whether owned or leased.
SECTION 4.7. HELLER COMMITMENT LETTER. Sellers have
obtained from Heller Financial, Inc. a commitment letter to provide to
Sellers a Debtor-in-Possession Credit Facility in an amount not to exceed
Eighty-Three Million Five Hundred Thousand Dollars ($83,500,000) pursuant to
the terms and conditions set forth therein and in an attached term sheet, a
copy of which has been provided to IHF and Buyer.
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SECTION 4.8. INVENTORIES. Each item of Inventory
of each Seller and its respective Subsidiaries was acquired and has been
maintained in the ordinary course of the BBSI Business; is of good and
merchantable quality; consists substantially of a quality, quantity and
condition usable, leasable or salable in the ordinary course of the BBSI
Business; is valued at the lower of cost or market; is not held on assignment
or consignment; and is not subject to any write-down or write-off. All
packaging Inventory meets all labeling requirements of Governmental
Authorities. Each item of such Inventory is fairly reflected in the Inventory
accounts on the balance sheets included in the Falcons and SEAFMAN Internal
Financial Statements, as at the respective dates thereof.
SECTION 4.9. RECALLS. Except as set forth in
Schedule 4.9, during the five (5) years preceding the date of this Agreement,
there have been no recalls or withdrawals of Inventory produced or sold by any
of the Sellers or their respective Subsidiaries or other similar federal, state
or private actions with respect to such Inventory and, to the Knowledge of each
of the Sellers, no facts or circumstances exist that would reasonably be
expected to result in such actions.
SECTION 4.10. ACCOUNTS RECEIVABLE. The Accounts Receivable
of each of the Sellers and their respective Subsidiaries are valid and genuine;
have arisen solely out of bona fide sales and deliveries of goods, performance
of services or other business transactions in the ordinary course of business
consistent with past practice; and are not subject to valid defenses, set-offs
or counterclaims other than those arising in the ordinary course of business.
Other than with respect to Affiliates, the allowances for collection losses
associated with such Accounts Receivable on the Falcons have been determined
consistent with past practice. Other than with respect to Affiliates, the
allowances for collection losses associated with such Accounts Receivable on
the SEAFMAN Internal Financial Statements have been determined in accordance
with accounting principles generally accepted in Ecuador consistent with past
practice. Other than those arising in the ordinary course of business, there
are no discounts, trade promotions or similar marketing arrangements that
affect the collectibility or value of any Accounts Receivable of any Seller or
its Subsidiaries other than those set forth on Schedule 4.10.
SECTION 4.11. LITIGATION; ADVERSE FACTS. Except as set
forth on Schedule 4.11, there is no demand, claim, suit, inquiry, action,
judicial or administrative proceeding, governmental investigation or
arbitration now pending or, to the Knowledge of any Seller, threatened against
any Seller or its Subsidiaries, or any property of any Seller or its
Subsidiaries, which reasonably would be expected to result in any Material
Adverse Effect on the BBSI Business or which relate to this Agreement or the
transactions contemplated by this Agreement.
SECTION 4.12. CONTRACTS. Each Seller and its respective
Subsidiaries and, to the Knowledge of each of the Sellers, each other party to
any Assumed Contract or any Contract related to the BBSI Business to which,
SEAFMAN, Mantatun or Mayaguez is a party, has performed the obligations
required to be performed by it thereunder and is
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not (with or without lapse of time or the giving of notice, or both) in breach
or default thereunder. Schedule 2.8 identifies, as to each Assumed Contract
listed thereon, whether the consent of the other party thereto is required for
such Assumed Contract to continue in full force and effect upon the
consummation of the transactions contemplated hereby or whether such Assumed
Contract can be canceled by the other party without liability to such other
party due to the consummation of the transactions contemplated hereby. A
complete copy of each written Assumed Contract set forth on Schedule 2.8 and
each Contract material to the BBSI Business to which SEAFMAN, Mantatun or
Mayaguez is a party has been provided to Buyer prior to the date of this
Agreement. Except as described on Schedule 4.12, there are no oral Contracts
related to the BBSI Business.
SECTION 4.13. GOVERNMENTAL REGULATION. Neither BBSI nor
any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Investment Company
Act of 1940 or to any federal or state statute or regulation limiting its
ability to incur Indebtedness for borrowed money.
SECTION 4.14. EMPLOYEE BENEFIT PLANS.
a. Except as set forth on Schedule
4.14, neither BBSI nor any of its ERISA Affiliates currently maintains
or contributes to, any Employee Benefit Plan or any personnel policy,
stock option plan, collective bargaining agreement, bonus plan or
arrangement, incentive award plan or arrangement, vacation policy,
severance pay plan, policy or agreement, deferred compensation
agreement or arrangement, executive compensation or supplemental
income arrangement, consulting agreement, employment agreement and
each other employee benefit plan, agreement, arrangement, program,
practice or understanding ("Benefit Program or Agreement").
b. True, correct and complete copies of
each of the Employee Benefit Plans, and related trusts, if applicable,
including all amendments thereto, have been furnished to Buyer. To
the extent applicable, true, correct and complete copies of the most
recent determination letter of each of the Employee Benefit Plans, the
most recent report on Form 5500 and the summary plan description have
been furnished to Buyer. True, correct and complete copies or
descriptions of all Benefit Programs and Agreements have also been
furnished to Buyer.
c. Except as otherwise set forth on
Schedule 4.14,
(i) Neither BBSI nor any of its
ERISA Affiliates contributes to or has an obligation to
contribute to, and has not at any time within six (6) years
prior to the Closing Date contributed to or had an obligation
to contribute to, a multiemployer plan within the meaning of
Section 3(37) of ERISA and no withdrawal liability, within the
meaning of Section 4201 of ERISA, has been incurred by BBSI or
any ERISA Affiliate;
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(ii) BBSI and its Subsidiaries have
substantially performed all obligations, whether arising by
operation of law or by contract, required to be performed by
such entities in connection with the Employee Benefit Plans
and the Benefit Programs and Agreements, and to the knowledge
of Seller there have been no defaults or violations by any
other party to the Employee Benefit Plans or Benefit Programs
and Agreements;
(iii) All reports and disclosures
relating to the Employee Benefit Plans required to be filed
with or furnished to governmental agencies, Employee Benefit
Plan participants or Employee Benefit Plan beneficiaries have
been filed or furnished in accordance with applicable law in a
timely manner, and each Employee Benefit Plan and each Benefit
Program or Agreement has been administered in substantial
compliance with its governing documents;
(iv) Each of the Employee Benefit
Plans intended to be qualified under Section 401 of the IRC
satisfies the requirement of such Section and has received a
favorable determination letter from the Internal Revenue
Service regarding such qualified status, and each of the
Employee Benefit Plans intended to be qualified under Section
165(a) of the Puerto Rico Income Tax Act ("PRITA") satisfies
the requirements of such Section and has received a favorable
determination letter from the Puerto Rico Treasury Department
regarding such qualified status, and has not, since receipt of
the most recent favorable determination letter, been amended
or, to the knowledge of the Seller, operated in a way which
would adversely affect such qualified status, and each trust
affiliated with such plan has been determined to be exempt
from federal income tax under Section 501(a) of the IRC or
exempt from income tax under Section 22 of the PRITA.
(v) As to any Pension Plan, there
has been no event or condition which presents the material
risk of Pension Plan termination, no accumulated funding
deficiency, whether or not waived, within the meaning of
Section 302 of ERISA or Section 412 of the IRC has been
incurred, no Termination Event has occurred, and no liability
to the PBGC has been incurred which liability has not been
satisfied. The Retirement Plan for the Employees of Bumble
Bee International., Inc. has been funded in accordance with
the minimum funding requirements of Section 302 of ERISA, but
the assets of the Plan are approximately $2 million less than
the actuarial present value of the benefit liabilities on a
termination basis, within the meaning of Section 4041 of
ERISA, under the Plan, based on reasonable actuarial
assumptions and the asset valuation principles established by
the PBGC;
(vi) Each trust funding an Employee
Benefit Plan, which trust is intended to be exempt from
federal income taxation pursuant
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to Section 501(c)(9) of the IRC or exempt from income tax
under Section 22 of the PRITA, satisfies the requirements of
such section and has received a favorable determination letter
from the Internal Revenue Service or from the Puerto Rico
Treasury Department regarding such exempt status and has not,
since receipt of the most recent favorable determination
letter, been amended or operated in a way which would
adversely affect such exempt status.
(vii) There are no actions, suits or
claims pending (other than routine claims for benefits) or, to
the knowledge of Seller, threatened against, or with respect
to, any of the Employee Benefit Plans or Benefit Programs and
Agreements or their assets;
(viii) All contributions required to
be made to the Employee Benefit Plans pursuant to their terms
and provisions have been made timely;
(ix) As to any Employee Benefit Plan
intended to be qualified under Section 401 of the IRC, there
has been no termination or partial termination of the Employee
Benefit Plan within the meaning of Section 411(d)(3) of the
IRC;
(x) No act, omission or transaction
has occurred which would result in imposition on BBSI or its
Subsidiaries of (A) breach of fiduciary duty liability damages
under Section 409 of ERISA, (B) a civil penalty assessed
pursuant to subsections (c), (i) or (l) of Section 502 of
ERISA or (C) a tax imposed pursuant to Chapter 43 of Subtitle
D of the IRC;
(xi) To the knowledge of Seller,
there is no matter pending (other than routine qualification
determination filings) with respect to any of the Employee
Benefit Plans before the Internal Revenue Service, the
Department of Labor or the PBGC;
(xii) The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby will not (A) require BBSI or its
Subsidiaries to make a larger contribution to, or pay greater
benefits under, any Employee Benefit Plan, Benefit Program or
Agreement than it otherwise would or (B) create or give rise
to any additional vested rights or service credits under any
Employee Benefit Plan or Benefit Program.
d. Except as otherwise set forth in
Schedule 4.14, neither BBSI nor its Subsidiaries is a party to any
agreement, nor have they established any policy or practice, requiring
them to make a payment or provide any other form of compensation or
benefit to any person performing services for the Company upon
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termination of such services which would not be payable or provided in
the absence of the consummation of the transactions contemplated by
this Agreement.
e. In connection with the consummation
of the transaction contemplated by this Agreement, no payments have or
will be made under the Employee Benefit Plans, Benefit Programs and
Agreements which, in the aggregate, would result in imposition of the
sanctions imposed under Sections 280G and 4999 of the IRC.
f. Each Employee Benefit Plan which is
an "employee welfare benefit plan", as such term is defined in Section
3(1) of ERISA, may be unilaterally amended or terminated in its
entirety without liability except as to benefits accrued thereunder
prior to such amendment or termination.
g. Schedule 4.14 sets forth by number
and employment classification the approximate numbers of employees
employed by BBSI and its Subsidiaries as of the date of this
Agreement, and, except as set forth therein, none of said employees
are subject to union or collective bargaining agreements with BBSI or
its Subsidiaries. Except as otherwise set forth in Schedule 4.14,
neither BBSI nor its Subsidiaries have at any time on or after January
1, 1994 had or, to the Knowledge of Seller, been threatened with any
work stoppages or other labor disputes or controversies with respect
to its employees.
SECTION 4.15. INTELLECTUAL PROPERTY.
a. BBSI and each of its Subsidiaries
owns, is licensed to use or otherwise has the right to use, the
Intellectual Property used in or necessary for the conduct of the BBSI
Business as currently conducted. Schedule 4.15 lists all items of
Intellectual Property of each of the Sellers and their respective
Subsidiaries material to the BBSI Business, which Intellectual
Property is fully protected and duly and properly registered, filed,
or issued in the appropriate office and jurisdictions for such
registrations, filings, or issuances.
b. Each license agreement or contract
under which any Seller or its Subsidiaries has any license, right, or
interest in the Intellectual Property is listed on Schedule 4.15 and
is a valid, binding and enforceable agreement in full force and
effect, and for each such license agreement or contract, each Seller
and its Subsidiaries has a paid-up, royalty-free, perpetual license,
except for any royalty obligations, other payment obligations, or
terminable license disclosed in Schedule 4.15, and no restrictions
exist which would prohibit or impair the ability of any of the Sellers
to assign each such license agreement or contract as contemplated
hereby.
c. For each United States and foreign
patent, patent application, design patent, design patent application,
utility model, and industrial
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model listed in Schedule 4.15 as owned by a Seller or any of its
Subsidiaries, all maintenance fees, renewal fees, or other fees
required to be paid to avoid abandonment or expiration have been
timely paid, and any applicable working requirements have been timely
met.
d. For each United States and foreign
registered trademark, registered service mark, and registered trade
name listed in Schedule 4.15 as owned by a Seller or any of its
Subsidiaries, all appropriate affidavits, documentation, and
associated fees necessary to show continued use, and all renewals and
associated fees, have been timely filed with the appropriate
administrative or governmental office.
e. Each United States and foreign
patent application and design patent application, and each United
States and foreign application for registration of a trademark,
service mark, trade name, or copyright, listed in Schedule 4.15 as
owned by a Seller or any of its Subsidiaries, remains pending and has
not been abandoned, except for any such applications which (A) the
owner in good faith wishes to intentionally abandon, and (B) for which
the Sellers consult with and obtain the prior written approval of
Buyer to abandon.
f. No product used, sold or
manufactured by any of the Sellers or their respective Subsidiaries,
nor the conduct of the BBSI Business as it is currently conducted,
infringes on or otherwise violates the patent, design patent,
trademark, service mark, trade name, copyright, industrial model,
utility model, trade secret, or other intellectual property rights of
any third party
g. To the Knowledge of each of the
Sellers, no third party is questioning the validity of, challenging,
infringing, or otherwise violating any of the Intellectual Property
listed on Schedule 4.15.
h. There are no restrictions that
impair the use of any United States or foreign trademark, service
mark, or trade name listed in Schedule 4.15 by Buyer or the transfer
of any United States or foreign trademark, service mark, or trade name
listed in Schedule 4.15 to Buyer.
i. To the extent that any of the
Sellers or their respective Subsidiaries has any trade secrets or
confidential information regarding their businesses, such Seller or
Subsidiary has taken, and will continue to take, commercially
reasonable precautions to maintain the confidentiality of such trade
secrets and confidential information, including, without limitation,
obtaining appropriate confidentiality agreements from employees or
third parties to which such trade secrets or confidential information
are disclosed.
SECTION 4.16. BBSI'S BROKERS. No Seller has dealt with,
retained or otherwise employed any broker, finder or agent in connection with
the transactions
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contemplated by this Agreement except for Greif & Co., the fees and expenses of
which shall be paid by the Sellers and not assumed by the Buyer.
SECTION 4.17. ENVIRONMENTAL COMPLIANCE.
a. NO ENVIRONMENTAL CLAIMS. Except as
set forth on Schedule 4.17, there are no claims, liabilities,
investigations, litigation, administrative proceedings, whether
pending or threatened, or judgments or orders relating to any
Hazardous Materials (collectively called "Environmental Claims")
asserted or threatened against any of the Sellers or their respective
Subsidiaries. Except as set forth on Schedule 4.17, no Seller or any
of its Subsidiaries nor, to the Knowledge of the Sellers, any other
Person has caused or permitted any Hazardous Material to be used,
generated, transported, released, treated, stored or disposed of in a
manner forming the basis for an Environmental Claim against any of the
Sellers or their respective Subsidiaries. Except as set forth on
Schedule 4.17, neither Seller or any of its Subsidiaries has assumed
any liability of any Person with cleanup or compliance in connection
with any Environmental Claim.
b. STORAGE OF HAZARDOUS SUBSTANCES.
Except as set forth on Schedule 4.17, no Hazardous Materials are
presently stored or otherwise located, and no underground storage
tanks are or were located, on real estate currently or formerly owned,
leased or operated by any of the Sellers or their respective
Subsidiaries or, to the Knowledge of the Sellers, on adjacent parcels
of real estate, and no part of such real estate or, to the Knowledge
of the Sellers, no part of such adjacent parcels or real estate,
including the groundwater located thereon, is presently contaminated
by Hazardous Materials.
SECTION 4.18. EMPLOYEE MATTERS. Except as set forth in
Schedule 4.18, none of the employees of any of the Sellers or their respective
Subsidiaries is subject to any collective bargaining agreement and there are no
strikes, work stoppages or controversies pending or, to the Knowledge of the
Sellers, threatened between any Seller or its Subsidiaries and any of their
respective employees, other than employee grievances arising in the ordinary
course of business.
SECTION 4.19. COMPLIANCE WITH LAWS; GOVERNMENTAL LICENSES
AND PERMITS.
a. Except as set forth on Schedule
4.19, the BBSI Business has been conducted in compliance with each
Applicable Law. No investigation or review by any Governmental
Authority with respect to any Seller or its Subsidiaries is pending
or, to the Knowledge of any Seller, threatened. Without limiting the
generality of the foregoing, except as set forth on Schedule 4.19,
each Seller and its Subsidiaries has complied with all obligations
with respect to equal employment opportunity under Applicable Law.
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b. Schedule 4.19 is a true and complete
list of all material Governmental Licenses And Permits of each of the
Sellers and their respective Subsidiaries and constitute all the
licenses, permits and authorizations required for the operation of the
BBSI Business. Each such Governmental License and Permit is in full
force and effect. Except as set forth on Schedule 4.19, the BBSI
Business has been operated in accordance with the terms of such
Governmental Licenses And Permits and each Seller and its Subsidiaries
is otherwise in compliance with, and has conducted its business so as
to comply with, the terms of such Governmental Licenses And Permits.
There are no proceedings pending or, to the Knowledge of any Seller,
threatened with respect to the BBSI Business which reasonably may be
expected to result in the revocation, adverse modification,
non-renewal, or suspension of any such Governmental Licenses And
Permits or the imposition of any administrative actions by any
Governmental Authority with respect to the BBSI Business.
SECTION 4.20. INSURANCE. During the last five (5) years
prior to the date hereof, each Seller and its Subsidiaries has been insured
against such risks as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured. Schedule 4.20
sets forth an accurate summary of all policies of insurance held by each Seller
and its Subsidiaries. To the Knowledge of the Sellers, no event has occurred,
including the failure by any Seller or its Subsidiaries to give any notice or
information or the delivery of any inaccurate or erroneous notice or
information, which limits or impairs the rights of any Seller or its
Subsidiaries under any such insurance policies. Excluding insurance policies
that have expired and been replaced in the ordinary course of business, no
insurance policy of any Seller or its Subsidiaries has been canceled within the
last two years prior to the date hereof.
SECTION 4.21. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES
OF SELLER. Notwithstanding any provision to the contrary herein, as to the
assets and liabilities of Sellers, Sellers make no representations or
warranties with respect to, and Buyer may not rely on any representation or
warranty with respect to, any Excluded Asset or any liability which is not an
Assumed Liability.
SECTION 4.22. NO SUBSIDIARY LIABILITY FOR EXCLUDED
LIABILITY. Neither SEAFMAN, Mantatun nor Mayaguez has any direct or indirect
liability, contingent or otherwise, with respect to any Excluded Liability.
SECTION 4.23. MAYAGUEZ. Except for the representations and
warranties set forth in Section 4.1.d., all representations and warranties
contained in this Article 4 related to the assets, liabilities or operations of
Mayaguez shall be qualified to the extent of the Knowledge of Sellers.
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ARTICLE 5
BUYER'S REPRESENTATIONS,
WARRANTIES AND COVENANTS
Buyer hereby represents, warrants and covenants to the Sellers
that the following statements are true and correct:
SECTION 5.1. ORGANIZATIONS, POWERS, CAPITALIZATION GOOD
STANDING, BUSINESS AND SUBSIDIARIES.
a. ORGANIZATION AND POWERS. Each of
IHF and Acquisition Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
its jurisdiction of incorporation. Each of IHF and Acquisition Sub
has all requisite corporate power and authority (i) to own, lease and
operate its properties, (ii) to carry on its business as now conducted
and proposed to be conducted, (iii) to enter into this Agreement and
each other agreement, instrument and certificate required to be
executed by IHF or Buyer in accordance herewith, and (iv) to carry out
the transactions contemplated hereby.
b. QUALIFICATION. IHF and Acquisition
Sub, respectively, are duly qualified in and in good standing in each
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary, except
in jurisdictions in which the failure to be qualified and in good
standing has not had and will not have a Material Adverse Effect on
the Buyer.
SECTION 5.2. AUTHORIZATION OF AGREEMENT, ETC.
a. AUTHORIZATION OF AGREEMENT. The
execution, delivery and performance of this Agreement, and all other
agreements, instruments and certificates entered into or delivered in
connection with the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate and shareholder action
of IHF and Acquisition Sub, respectively.
b. NO CONFLICT. The execution,
delivery and performance by IHF and Acquisition Sub, respectively, of
this Agreement and the consummation of the transactions contemplated
hereby, do not and will not: (i) violate, conflict with, or result in
any breach of any provision of the certificate of incorporation or
bylaws (or similar organizational documents) of IHF or Acquisition
Sub, (ii) violate, conflict with, or result in a violation or breach
of, or constitute a default (with or without due notice or lapse of
time or both) under, or permit the termination of, or result in the
acceleration of, or entitle any party to accelerate (whether as a
result of a change of control of a Seller or otherwise) any obligation
under, or result in the loss of any benefit under, or give any Person
the right to require any security to be repurchased
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under, or give rise to the creation of any Lien upon any of their
respective assets under, any of the terms, conditions, or provisions
of any Contractual Obligation of IHF or Acquisition Sub or pursuant to
which they or any of their assets may be bound or subjected, (iii)
subject to making or obtaining the filings, registrations, consents,
approvals, orders, authorizations and notices described in Section
5.2., violate any order, writ, judgment, injunction, decree, statute,
law, rule, or regulation, of any Governmental Authority applicable to
IHF or Acquisition Sub by which or to which any of their assets is
bound or subject, or (iv) require any approval or consent of any
Person under any Contractual Obligation of IHF or Acquisition Sub, or
otherwise.
c. GOVERNMENTAL CONSENTS. The
execution, delivery and performance by each of IHF and Acquisition Sub
of this Agreement and the consummation of the transactions
contemplated hereby do not and will not require any filings or
registration with, consent, approval, order or authorization of, or
notice or other action to or with, any Governmental Authority, except
for those set forth in Section 9.1.a.
d. BINDING OBLIGATIONS. Upon execution
and delivery by IHF and Acquisition Sub, this Agreement will be the
legally valid and binding obligations of each of IHF and Acquisition
Sub, enforceable against each of IHF and Acquisition Sub in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratoriums and other similar
laws and equitable principles relating to or limiting creditor rights.
SECTION 5.3. BUYER'S BROKERS. IHF has retained a broker,
finder or agent in connection with the transactions contemplated by this
Agreement and all liability to any such Person, is solely that of IHF and not
that of Sellers or their Affiliates.
SECTION 5.4. IHF FINANCIAL STATEMENTS. The IHF
Financial Statements which have been furnished by Buyer and IHF to Sellers have
been prepared in accordance with GAAP consistently applied through the periods
involved (except as disclosed therein or in Schedule 5.4), are true and correct
in all material respects and present fairly the consolidated financial
condition of the corporation covered thereby as at the dates thereof and the
results of their operations for the period then ended. Since February 28,
1997, there has not occurred, and IHF has not incurred or suffered, any event,
circumstance, or fact which would result in a Material Adverse Effect on IHF.
SECTION 5.5. IHF CASH-ON-HAND. IHF has sufficient
cash-on-hand and will continue to have sufficient cash-on-hand, to cause Buyer
to have sufficient cash, when added to the cash to be funded pursuant to the
Commitment Letter, to pay the Purchase Price at the Closing and IHF shall make
such cash-on-hand available to Buyers for the purpose of paying the Purchase
Price at the Closing.
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SECTION 5.6. BUYERS USE OF IHF AND CHASE CASH. Each Buyer
shall use such cash made available to it by IHF, Buyer or Chase for the purpose
of paying the Purchase Price, to so pay such Purchase Price to Sellers in
accordance with this Agreement.
ARTICLE 6
ACTIONS BY THE SELLERS, IHF AND
BUYER PRIOR TO THE CLOSING
Each Seller, IHF and Buyer covenant as follows:
SECTION 6.1. MAINTENANCE OF BUSINESS. Except as described
on Schedule 6.1, or otherwise contemplated in this Agreement or to the extent
that Buyer shall otherwise consent in writing, from the date of this Agreement
until the time of Closing, no Seller shall, and shall not permit its
Subsidiaries to:
a. fail to conduct, in all material
respects, the BBSI Business in the ordinary course consistent with
past practice;
b. fail, in any material respect, to
use commercially reasonable efforts to preserve intact the BBSI
Business, including (i) to keep available the services of its present
key management employees to maintain the relationships between and
among the Sellers and their Subsidiaries and their respective material
suppliers, customers, distributors, lessors, sublessors, sublessees
and others having material business relations with them, (ii) to
preserve, the organization and reputation of the BBSI Business, (iii)
to maintain all material Government Licenses and Permits, and (iv) to
conduct, marketing programs relating to the products of the BBSI
Business in the ordinary course;
c. fail, in any material respect, to
use commercially reasonable efforts to maintain the Assets (other than
the Excluded Assets) in their current condition, except for ordinary
wear and tear and damage by casualty governed by Section 3.3., or fail
to maintain insurance covering the Assets (other than the Excluded
Assets) and the BBSI Business comparable, in all material respects, to
that in effect on the date hereof;
d. fail, in any material respect, to
maintain its Books and Records in a usual and customary manner
consistent with past practices;
e. materially amend, terminate, or
fail, in any material respect, to use commercially reasonable efforts
to renew any material Assumed Contract (provided that no Seller shall
be required to renew any Assumed Contract on terms that are less
favorable to that Seller), or waive or release any right it may have
thereunder, or default, in any material respect, (or take or omit to
take any action that, with or without the giving notice or passage of
time, would constitute a
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material default) under any Assumed Contract or enter into any new
material Contract or Contract providing employment or severance
benefits to any officers or other Person occupying a similar position
or with similar duties and responsibilities.
f. merge or consolidate with or into
any other legal entity, dissolve, or liquidate;
g. authorize for issuance, issue, sell,
pledge, deliver, redeem or repurchase, or agree or commit to issue,
sell, pledge, deliver, redeem or repurchase, any shares of capital
stock (or Securities convertible into or exchangeable or exercisable
therefore) or allow any of its Subsidiaries to authorize for issuance,
issue, sell, pledge, deliver, redeem or repurchase, or agree or commit
to issue, sell, pledge, deliver, redeem or deliver, any shares of
capital stock (or Securities convertible into or exchangeable or
exercisable therefore);
h. except as required by the terms and
provisions of written contracts between a Seller or its Subsidiary and
an employee thereof as in existence on the date of this Agreement,
adopt or amend any Employee Benefit Plan or collective bargaining
agreement, or increase in any manner the compensation or fringe
benefits of any employee, except as may be required by Applicable Law;
i. sell (whether by merger,
consolidation, or the sale of an equity interest or assets), lease, or
dispose of any of Assets or the assets of SEAFMAN or its Subsidiaries
except in the ordinary course of business and consistent with past
practice or, even if in the ordinary course of business and consistent
with past practices (other than sales of Inventory or surplus or
obsolete equipment), whether in one or more transactions, in no event
involving an Asset or an asset of SEAFMAN or its Subsidiaries having
an aggregate fair market value in excess of One Hundred Fifty Thousand
Dollars ($150,000);
j. acquire (by merger, consolidation or
otherwise) any Person or make any equity investment in any Person;
k. mortgage, pledge, encumber or
subject to any material Lien, other than Permitted Encumbrances, any
of the Assets or the assets of SEAFMAN or its Subsidiaries;
l. adopt or amend any Employee Benefit
Plan or increase any salaries or wages payable to any employees (other
than increases to non-management employees made in the ordinary course
of business consistent with past practices;
m. modify, amend or change in any
material adverse respect Government License or Permit material to the
BBSI Business, or waive or release any material right it may have
thereunder;
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n. except as required by GAAP
accounting principles generally accepted in Ecuador, Applicable Law,
or circumstances which did not exist as of March 31, 1997, change any
of the material accounting principles or practices used by it;
o. change in any adverse material
respect its existing practices and procedures with respect to the
collection of, its Accounts Receivable and, except with respect to
good faith attempts consistent with past practice to obtain payment of
a past due Account Receivable, or except in accordance with existing
practices, a contested Account Receivable, offer to discount the
amount of any outstanding material Account Receivable or extend any
other incentive (whether to the account debtor or any employee or
third party responsible for the collection of Account Receivable) to
accelerate the collection thereof; or
p. change in any adverse material
respect its practices and procedures for purchasing, processing,
packaging and maintaining Inventory, including practices with respect
to the quality, quantity and mix of Inventory on hand;
q. agree to or make any commitment,
orally or in writing, to take any actions prohibited by this
Agreement.
SECTION 6.2. CERTAIN PROHIBITED TRANSACTIONS; FURTHER
NOTICE. Without limiting the provisions of Section 6.1., from the date of this
Agreement until the time of Closing, each Seller shall:
a. not, without the prior written
consent of Buyer, engage in or permit any transaction or act which, if
it had been engaged in or permitted prior to the date hereof, would
have rendered untrue in any material respect any of the
representations and warranties of any Seller contained herein.
b. promptly notify Buyer in writing
upon the occurrence of any matter or event which, if it had been in
existence and known on the date hereof, would have rendered untrue in
any material respect any of the representations and warranties of any
Seller contained herein, or which otherwise any Seller believes has or
would result in a Material Adverse Effect on the Sellers.
SECTION 6.3. INVESTIGATION BY BUYER. From the date of
this Agreement until the time of Closing, each Seller shall:
a. allow or cause to be allowed on
reasonable notice and during regular business hours, Buyer or its
employees, agents and representatives, to make such investigation of
the business, properties, stores, and Books And Records of each Seller
and its Subsidiaries related to the BBSI Business, and to
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conduct such examination of the condition (financial or otherwise) of
the Assets and the assets of SEAFMAN and Mantatun as Buyer deems
reasonably necessary to familiarize itself with such business,
properties, Books And Records, condition and other matters, and to
confirm the representations and warranties of each of the Sellers
hereunder; provided, however, that such investigation shall be
conducted by Buyer in a manner so as to not materially interfere with
the business of any Seller.
b. if Buyer or its lenders or other
financing sources require Phase I environmental site assessments, upon
written notice from Buyer identifying the locations at which such
assessments are required, allow such to be performed by Dames & Moore.
The cost of any such assessments shall be borne by Buyer.
c. assist Buyer in verifying the amount
of Estimated Working Capital, SEAFMAN Estimated Working Capital,
Closing Working Capital and SEAFMAN Closing Working Capital, including
(i) the taking of a physical inventory count at a point in time
requested by Buyer on not less than ten (10) Business Days notice,
provided that such notice must be given not less than fifteen (15)
Business Days before the Closing Date; and (ii) allowing Buyer or its
employees, and with the prior written consent of Buyer which shall not
be unreasonably withheld, agents or representatives of IHF or Buyer
who are not competitors of Sellers and who agree to execute
confidentiality agreements in a form satisfactory to Buyer and
Sellers, to review the procedures for, and process of, preparing the
statement contemplated by Section 3.2.a.(vii) (including the
accumulation of accounting information and closing accounting records;
d. provide to Buyer Falcons for a
calendar month promptly after the preparation thereof and in no event
later than forty-five (45) days after the end of such month.
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SECTION 6.4. CONSENTS AND COMMERCIALLY REASONABLE EFFORTS.
a. As soon as practicable after
execution of this Agreement, each Seller shall commence to take all
commercially reasonable action required (i) to obtain all consents and
approvals under material Contractual Obligations set forth on Schedule
4.2.b, (ii) to make all filings and registrations, obtain all
consents, approvals, orders and authorizations, and provide all
notices and other actions set forth on Schedule 4.2.c. In addition,
subject to the terms and conditions herein provided, each Seller
covenants and agrees to use all commercially reasonable efforts to
take, or cause to be taken, all action or do, or cause to be done, all
things necessary, proper or advisable under Applicable Laws to
consummate and make effective the transactions contemplated hereby.
Moreover, each Seller shall use commercially reasonable efforts to
cause all the conditions in Article 8 and in Article 9 hereof to be
satisfied.
b. As soon as practicable after
execution of this Agreement, IHF and Buyer shall commence to take all
commercially reasonable action required (i) to obtain all consents and
approvals under Contractual Obligations set forth on Schedule 6.4.b,
(ii) to make all filings and registrations, obtain all consents,
approvals, orders and authorizations, and provide all notices and
other actions set forth on Schedule 6.4.b, and (iii) obtain the Title
Commitment and Survey contemplated by Section 8.6. and Section 8.7.
In addition, subject to the terms and conditions herein provided, IHF
and Buyer covenant and agree to use all commercially reasonable
efforts to take, or cause to be taken, all action or do, or cause to
be done, all things necessary, proper or advisable under Applicable
Laws to consummate and make effective the transactions contemplated
hereby. Moreover, IHF and Buyer shall use commercially reasonable
efforts to cause all the conditions in Article 7 and in Article 9
hereof to be satisfied.
SECTION 6.5. SAN DIEGO HEADQUARTERS SUBLEASE.
Concurrently with the Closing, Buyer, as sublessee, and BBSI, as sublessor,
shall enter into a sublease of the premises leased by BBSI pursuant to the San
Diego Headquarters Lease embodying the terms set forth on Exhibit "E".
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SECTION 6.6. NO SOLICITATION.
a. Subject to (from and after the
Bankruptcy Court's approval of the Overbid Procedures) Sellers' right
to (i) receive an offer for an Alternative Transaction pursuant to the
Overbid Procedures, (ii) tender to IHF the Overbid Fee, and (iii)
terminate this Agreement pursuant to Section 11.2.g. and
contemporaneously accept an Alternative Transaction, from the date of
this Agreement until the time of Closing, each Seller shall not,
directly or indirectly, through any officer, director, stockholder,
employee, agent, financial advisor, banker or other representative, or
otherwise, solicit, initiate, or encourage the submission of any
proposal or offer from any Person (other than Buyer) relating to any
acquisition or purchase of all or any material portion of the Assets
or any equity interest in any Seller or its Subsidiaries, any merger,
consolidation, share exchange, business combination, or other similar
transaction with any Seller or its Subsidiaries (an "Alternative
Transaction") or participate in any negotiations regarding, or furnish
to any other Person any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate, or
encourage, any effort or attempt by any other Person to do or seek any
of the foregoing. Each Seller shall immediately communicate to Buyer
the material terms of any such proposal or offer (and the identity of
the party making such proposal) which it may receive and, if such
proposal is in writing, such Seller shall promptly deliver a copy of
such proposal to Buyer. Each Seller agrees not to release any third
party from, or waive any provision of, any confidentiality or
standstill agreement to which it is a party. Each Seller shall
immediately cease and cause to be terminated all existing discussions
or negotiations with any parties conducted heretofore with respect to
any of the foregoing.
b. From the date of this Agreement
until the time of Closing, Buyer and its Affiliates will not, and will
not permit their respective officers, directors, employees,
affiliates, stockholders and agents to, obtain information from or
provide information to, engage in negotiations with, solicit,
facilitate or otherwise engage in discussions with, or enter into any
agreement with any Person (other than the Sellers) for the acquisition
of all or part of such Person or such Person's assets, so long as the
business of each person or such assets relate to the production,
marketing or distribution of canned tuna or canned salmon in the
United States, and Buyer shall not otherwise engage in any offer or
indication of intent to procure or otherwise acquire, or enter into a
business related to, any Person or such Person's assets, so long as
the business of such Person or such assets relate to the production,
marketing or distribution of canned tuna or canned salmon assets in
the United States.
SECTION 6.7. BANKRUPTCY PROCEEDINGS. Not later than
May 9, 1997, each Seller shall commence proceedings (the "Bankruptcy
Proceedings") under the Bankruptcy Code and shall within ten (10) Business Days
thereafter move the Bankruptcy Court (i) for entry of an order (the "Initial
Order") reasonably satisfactory in form and
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substance to Buyer approving the provisions set forth in Section 6.6.a., the
Overbid Fee and Overbid Procedures, and (ii) for entry of the Sales Order.
Each Seller shall use commercially reasonable efforts to promptly seek entry of
the Initial Order and thereafter, a sales order, including findings of fact
incident to such sales order substantially in the form set forth in Exhibit "B"
hereto; provided Buyer must adduce evidence establishing same and otherwise use
commercially reasonable efforts to attain entry of such orders and findings.
For purposes of this Section 6.7. "sales order" shall refer to Exhibit "B" and
shall not have the same meaning as Sales Order defined in Section 2.72.
SECTION 6.8. CALIFORNIA REAL PROPERTY TRANSFER TAX. No
later than ten (10) Business Days before the Closing Date, BBSI shall
provide Buyer a good faith estimate of the amount of real property transfer
Taxes arising under California law, if any, arising as a result of the
consummation of the transactions contemplated by this Agreement. If the
Sellers and Buyer do not agree on such an amount within three (3) Business Days
of the receipt of such estimate by Buyer, BBSI shall promptly engage Price
Waterhouse (with the fees and costs of Price Waterhouse to be borne equally by
Buyer and Sellers) to determine such estimate, which determination shall be
final.
SECTION 6.9. ADDITIONAL AGREEMENTS. Subject to the terms
and conditions of this Agreement, each of the parties hereto will use its
commercially reasonable efforts to do, or cause to be taken all action and to
do, or cause to be done, all things necessary, proper, or advisable under
Applicable Laws to consummate and make effective the transactions contemplated
by this Agreement. If at any time after the Closing Date, any further action is
necessary or desirable to carry out the purposes of this Agreement, the parties
to this Agreement and their duly authorized representatives shall take all such
action. Without limiting the generality of the foregoing, if, after the Closing
Date, Buyer seeks indemnification or recovery from one or more other parties to
an Assumed Contract or otherwise seeks to enforce such Assumed Contract and, in
order to obtain such indemnification, recovery or enforcement, it is necessary,
as a matter of law, for a Seller to initiate a suit, participate in any
enforcement proceeding or otherwise provide assistance to Buyer, then, at the
request and the sole expense of Buyer, that Seller shall take such action as
Buyer may reasonably request in connection with Buyer's efforts to obtain such
indemnification, recovery or enforcement.
SECTION 6.10. WORKING CAPITAL VERIFICATION. As soon as
reasonably practicable and in any event not later than the close of business on
the day before the Closing Date, Buyer and Sellers shall jointly determine the
amounts of the SEAFMAN Estimated Working Capital, the Estimated Working
Capital, the SEAFMAN Closing Working Capital and the Closing Working Capital as
of the time of Closing and prepare and deliver to each other a statement
setting forth the calculation thereof. The amounts of changes in Inventory,
Accounts Receivable and Trade Payables utilized in calculating the Estimated
Working Capital and SEAFMAN Estimated Working Capital shall be determined in
accordance with GAAP and accounting principles generally accepted in Ecuador,
respectively. The amounts of changes in Inventory, Accounts Receivable and
Trade Payables utilized in calculating the Closing Working Capital and SEAFMAN
Closing
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Working Capital shall be determined solely by reference to the accounting books
and records of the Sellers and SEAFMAN as closed in a manner consistent with
past practices.
SECTION 6.11. TAX EXEMPTION ORDER REQUIREMENT. Buyer shall
use commercially reasonable efforts to obtain the approval contemplated in
Section 8.3. herein.
SECTION 6.12. IHF PURCHASE PRICE COMMITMENT. IHF shall
cause (i) the Purchase Price to be partially funded with Thirty-Five Million
Dollars ($35,000,000) of cash-on-hand, as contemplated in the Commitment
Letter, or (ii) the Commitment Letter to be amended or revised to increase the
financing contemplated therein by the amount of which cash-on-hand to fund the
Purchase Price is less than Thirty-Five Million Dollars ($35,000,000).
SECTION 6.13. COMMERCIALLY REASONABLE EFFORTS TO CAUSE
CHASE TO FUND PURCHASE PRICE. IHF and Buyer each shall use commercially
reasonable efforts to cause Chase to fund the amount of cash necessary, when
added to the cash provided by IHF, to fully fund the Purchase Price on the
Closing Date.
SECTION 6.14. ALLOCATION. Prior to the Closing Date, the
Sellers and Buyer shall negotiate in good faith an allocation of the Purchase
Price and Assumed Liabilities among the Assets that is intended to comply with
Section 1060 of the Internal Revenue Code of 1986, as amended. If the
allocation is not agreed upon within thirty (30) days after the Closing, then
Buyer and the Sellers agree that the allocation shall be made and consistently
reported by Buyer and the Sellers in compliance with Section 1060 based upon an
asset valuation performed by Price Waterhouse, it being understood that the
Seller and Buyer agree that the portion of the Purchase Price (including the
assumption by Buyer of any liabilities of BBII, if any) allocable to BBII,
pursuant to such Section 1060 shall in no event exceed the total amount of the
tax basis which BBII has in the assets being sold to Buyer.
SECTION 6.15. IHF FINANCIAL STATEMENTS. From the date of
this Agreement until the time of Closing, IHF shall provide to BBSI its
unaudited consolidated financial statements for each month promptly after the
preparation thereof and in no event later than forty-five (45) days after the
end of such month.
SECTION 6.16. INVENTORY REPORT AND PERSONAL PROPERTY
SCHEDULES. Sellers shall provide to Buyer, when filed or transmitted, a true
and correct copy of each of the Inventory report provided pursuant to the
requirements of the United States Trustee in the Bankruptcy Proceedings, and
the Schedules listing Personal Property which will be filed initially with the
Bankruptcy Court in the Bankruptcy Proceedings.
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ARTICLE 7
CONDITIONS PRECEDENT TO
THE OBLIGATIONS OF BBSI
The obligations of each Seller to consummate the transactions
contemplated hereby are subject, in the reasonable discretion of BBSI, to the
satisfaction, on or prior to the time of Closing, of each of the following
conditions; provided, however that with the exception of compliance with the
HSR Act, any of such conditions may be waived by BBSI in writing at or prior to
the Closing.
SECTION 7.1. REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations and warranties of IHF and Buyer contained in this Agreement
shall be true and correct in all material respects at and as of the Closing
Date as if such representations and warranties were made at and as of the
Closing Date; and IHF and Buyer shall have performed all agreements and
covenants required hereby to be performed by them prior to or at the Closing
Date. The president of each of IHF and Buyer, on behalf of such entity, shall
execute and deliver to BBSI a certificate certifying the foregoing.
SECTION 7.2. BANKRUPTCY COURT ORDER. The Bankruptcy Court
shall have approved this Agreement and the transactions contemplated thereby by
means of the Sales Order.
ARTICLE 8
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF IHF AND BUYER
The obligations of IHF and Buyer to consummate the
transactions contemplated hereby are subject, in the reasonable discretion of
Buyer, to the satisfaction, on or prior to the time of Closing, of each of the
following conditions; provided, however, any of such conditions may be waived
by IHF and Buyer in writing at or prior to the Closing.
SECTION 8.1. REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations and warranties of each Seller contained in this Agreement
shall be true and correct at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date unless
such lack of truth or correctness, individually or in the aggregate, does not
result in a Material Adverse Effect on Buyer or the BBSI Business; and each
Seller shall have performed all agreements and covenants required hereby to be
performed by them prior to or at the time of the Closing. The president of each
Seller, on behalf of such Seller, shall execute and deliver to Buyer a
certificate certifying the foregoing.
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SECTION 8.2. BANKRUPTCY COURT ORDER. Each of the Initial
Order and the Sales Order shall have become a Final Order.
SECTION 8.3. TAX EXEMPTION ORDER. Approval of the
appropriate Governmental Authority of the Commonwealth of Puerto Rico shall
have been obtained by Buyer that either (i) approves the transfer of the Tax
Exemption Order to Buyer or (ii) provides substantially the same treatment to
Buyer as the Tax Exemption Order provides to the Sellers.
SECTION 8.4. MINIMUM SEAFMAN WORKING CAPITAL. After the
close of business on the day before the Closing Date, the SEAFMAN Closing
Working Capital shall not be less than Four Billion Sucres (S/ 4,000,000,000
Sucres).
SECTION 8.5. REAL ESTATE TITLE COMMITMENT. Buyer shall
have received a preliminary report on title to the Real Property of the Sellers
covering a date subsequent to the date of this Agreement, issued by the Title
Company, which preliminary report shall contain a commitment (the "Title
Commitment") of the Title Company to issue an owner's title insurance policy at
Buyer's cost as Buyer may reasonably require (the "Title Policy") insuring the
fee simple absolute interest of the Sellers in their respective Real Property.
The Title Commitment shall be in the amount set forth in Schedule 8.5 and shall
be subject only to the standard printed exceptions and: (i) liens of current
state and local property taxes which are not delinquent or subject to penalty;
(ii) unviolated zoning regulations and restrictive covenants and easements of
record which do not detract materially from the value of the Real Property of
the Sellers and do not materially and adversely affect, impair or interfere
with the use of any property affected thereby as heretofore used by Sellers;
(iii) public utility easements of record, in customary form, to serve the Real
Property; and (iv) Permitted Encumbrances. Such Title Policy shall be issued on
the Closing Date.
SECTION 8.6. SURVEY. Buyer, at its sole cost and expense,
shall have obtained a survey (the "Survey") of the Real Property of the Sellers
as of a date subsequent to the date hereof which shall: (i) be prepared by a
registered land surveyor reasonably acceptable to Buyer; (ii) be certified to
the Title Company and to Buyer; and (iii) show with respect to such Real
Property: (A) its legal description (which shall be the same as the Title
Policy pertaining thereto); (B) all buildings, structures and improvements
thereon and all restrictions of record and other restrictions that have been
established by an applicable zoning or building code or ordinance and all
easements or rights of way across or serving the Owned Real Property (including
any off-site easements affecting or appurtenant thereto); (C) no encroachments
thereon or adjoining parcels by buildings, structures or improvements and no
other survey defects; (D) access to such parcel from a public street; and (E) a
flood certification reasonably satisfactory to Buyer to the effect that no
portion thereof is located within a flood hazard area.
SECTION 8.7. FUNDING. Buyer and IHF shall have received
the amounts of the funding contemplated by the Commitment Letter.
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SECTION 8.8. MINIMUM CLOSING WORKING CAPITAL. After the
close of business on the day before the Closing Date, the Closing Working
Capital shall not be less than Sixty-Five Million Dollars ($65,000,000).
ARTICLE 9
CONDITIONS TO THE CLOSING OF EACH PARTY
SECTION 9.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY.
The obligations of each party to this Agreement to effect the transactions
contemplated hereby to occur at the Closing shall be subject to the
satisfaction or, to the extent permitted by Applicable Law, mutual waiver of
each of the following conditions:
a. (i) All requirements of any
Applicable Law necessary for the valid consummation of the
transactions contemplated herein to occur at the Closing shall have
been fulfilled, including without limitation, the termination or
expiration of the applicable waiting period, and any extensions
thereof, under the HSR Act, without the filing of any injunctive
action or the taking of any other action by the Federal Trade
Commission or the Department of Justice objecting to or challenging
the transactions contemplated by this Agreement), and (ii) all
filings, registrations and notices with, and consents, approvals and
orders of, Governmental Authorities required be obtained from any
Governmental Authority under any Applicable Law shall have been made
or obtained, in each case in order to permit each Seller, IHF or the
Buyer to consummate the transactions contemplated hereby to occur at
the Closing (other than any requirement, filing, registration, notice,
consent, approval or order, of which the nonfulfillment or failure to
make or obtain would not reasonably be expected to have a Material
Adverse Effect on the Sellers, the Buyer or the BBSI Business); and
b. No temporary restraining order,
preliminary or permanent injunction or other order issued by any
Governmental Authority of competent jurisdiction preventing the
consummation of the transactions contemplated hereby to occur at the
Closing shall be in effect.
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ARTICLE 10
ACTIONS BY EACH SELLER, IHF
AND BUYER AFTER THE CLOSING
SECTION 10.1. BOOKS, RECORDS AND EMPLOYEES. The parties
hereto agree that so long as any books, records and information retained by any
Seller relating to the Assets, Assumed Liabilities or the BBSI Business, or the
books, records and information delivered to Buyer hereunder, to the extent that
they pertain to the Assets, Assumed Liabilities or the BBSI Business prior to
the Closing Date, remain in existence and are available, each party (at its
expense) shall have the right, after the Closing, to inspect and to make copies
of the same at any time during business hours for any proper purpose. None of
the parties hereto will destroy, without first having offered to deliver to the
other parties, any of such books, records and information for three (3) years.
Each party agrees that it will cooperate with and make available to the other
parties, during normal business hours, all such books, records, information and
employees (without substantial disruption of employment) necessary and useful
in connection with any litigation or investigation or any other matter
requiring any such books, records, information or employees for any reasonable
business purpose (including, without limitation, filing federal, state, local
and foreign Tax returns and other governmental reports). The party requesting
any such books, records, information or employees shall bear all of the
out-of-pocket costs and expenses (but excluding reimbursement for the salaries
and employee benefits) reasonably incurred in connection with providing such
books, records, information and employees. Buyer agrees that it shall maintain
in safekeeping such books, records and other information and allow BBSI access
thereto as set forth in this Section.
SECTION 10.2. COLLECTION OF ACCOUNTS RECEIVABLE AND
DEPOSITS. After the Closing, each Seller will promptly transfer or deliver to
Buyer or its designee any cash or other property that Seller or its
Subsidiaries may receive in respect of any claim, Contract, license, lease,
commitment, sales order, purchase order, deposit, letter of credit or
receivable of any character constituting a part of the Assets. Buyer will
promptly transfer or deliver to BBSI or its designee any cash or other property
that Buyer may receive after the Closing in respect of any claim, contract,
license, lease, commitment, sales order, purchase order, deposit, letter of
credit or receivable of any character constituting a part of the assets of any
Seller not included in the Assets.
SECTION 10.3. USE OF NAME. Each Seller shall take all
commercially reasonable actions, including the changing of their corporate
names, so as to enable Buyer to use the words "Bumble Bee" and to use all other
Intellectual Property included in the Assets in all manners, without any
blockage from any Seller. Immediately following the Closing, each Seller shall
file with the Secretary of State of Delaware amendments to their certificates
of incorporation changing Sellers' and their Subsidiaries' corporate names to
the extent that any such name contains, or is similar in sound or appearance
to, "Bumble Bee" or any other trademark or trade name which is part of the
Assets.
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SECTION 10.4. FURTHER ASSURANCES. Upon the reasonable
request of any party hereto, the other party will on and after the Closing Date
execute and deliver to such Person such other documents, releases, assignments
and other instruments as may be required to effectuate completely the transfer
and assignment to Buyer of, and to vest fully in Buyer title to, the Assets, to
effectuate completely the assumption by Buyer of the Assumed Liabilities and to
otherwise carry out the purposes of this Agreement.
SECTION 10.5. ONGOING REPRESENTATIONS OF SELLERS AFTER THE
CLOSING. Buyer shall cooperate with Sellers after the Closing to allow John
Batt to continue to act as President and Chief Executive Officer of each of
Sellers, Scott Benjamin to continue to act as Vice President and General
Counsel of each of Sellers and Annette Schlife to continue to act as Vice
President of Business Planning and Analysis of each of Sellers until such time
as Sellers have liquidated, wound-up and dissolved or otherwise terminated
their corporate franchises. In order to minimize any adverse effect on Buyer
of Messrs. Batt and Benjamin and Ms. Schlife continuing to act in such
capacities, Sellers agree that Mr. Batt may appoint subordinate officers,
employees, representatives and agents of Sellers, at Sellers' expense, to
minimize the time and effort required of Messrs. Batt and Benjamin and Ms.
Schlife with respect to their continuing representatives as officers of Sellers
after the Closing.
ARTICLE 11
TERMINATION
SECTION 11.1. TERMINATION BY EITHER PARTY. In addition to
other termination rights that might be available to it with respect hereto, any
party hereto may, at its option, terminate this Agreement at any time prior to
Closing by giving notice thereof to the other party:
a. if the Closing has not occurred
within one hundred and eighty (180) days after the commencement of the
Sellers' chapter 11 cases; provided, however, that the right to
terminate this Agreement under this Section 11.1.a. shall not be
available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of or resulted in the failure of the
Closing to occur on or before such date;
b. if a bona fide legal action or
proceeding brought by a Governmental Authority is pending or
threatened against such party as of the date of such notice of
termination, if an unfavorable judgment, decree or order in such
action or proceeding would prevent or make unlawful the consummation
of the transactions contemplated by this Agreement and an unfavorable
judgment, order or decree is likely, or if any court of competent
jurisdiction issues a permanent injunction to the same effect;
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c. if (i) in the event that early
termination is not granted, the waiting period, or any extension
thereof provided for under the HSR Act applicable to the transactions
contemplated by this Agreement, shall not have expired by May 15, 1997
or if, (ii) within such time period, the Federal Trade Commission or
the United States Department of Justice shall have filed an injunctive
action or any other action objecting to or challenging the
transactions contemplated by this Agreement or made a formal second
request for information; or
d. by mutual written consent of the
parties hereto.
SECTION 11.2. TERMINATION BY THE SELLERS. In addition to
other termination rights that might be available to them under Section 11.1.,
Sellers (acting unanimously) may, at their option, terminate this Agreement at
any time prior to Closing by giving notice thereof to Buyer, upon the
occurrence of any of the following events:
a. A proceeding or case is commenced by
or against IHF or Buyer under any law relating to bankruptcy or
insolvency or seeking reorganization, liquidation, dissolution,
winding-up, or any other relief under any bankruptcy, insolvency,
reorganization, liquidation, winding-up or similar law;
b. Buyer makes an application for the
appointment of, or the appointment is made of, a receiver, trustee or
similar official of IHF or Buyer or for all or a substantial part of
its assets;
c. Buyer or IHF makes an assignment for
the benefit of its creditors;
d. Buyer or IHF is unable, or admits in
writing that it is unable, to pay its debts as they mature;
e. IHF or Buyer breaches any of its
covenants, agreements or obligations under this Agreement provided
such breach remains uncured for ten (10) calendar days after IHF or
Buyer has received notice from a Seller of such breach (other than
breaches of Section 6.6.b., for which there shall be no cure period);
f. Any representation or warranty (read
without regard to any qualification as to materiality or Material
Adverse Effect) made by IHF or Buyer in this Agreement, shall prove to
have been incorrect, incomplete, misleading or inaccurate provided
that such breach of representation or warranty remains uncured for ten
(10) calendar days after IHF or Buyer has received notice from any
Seller of such breach and provided that such breach reasonably would
be expected to have a Material Adverse Effect on the Sellers;
g. Following approval by the Bankruptcy
Court of the Overbid Procedures and the Overbid Fee pursuant to the
Initial Order, upon payment of the Overbid Fee and contemporaneously
with the acceptance of an
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offer for an Alternative Transaction that has been determined by the
Board of Directors of BBSI to be the highest and best offer for the
BBSI Business.
SECTION 11.3. TERMINATION BY IHF OR BUYER. In addition to
other termination rights that might be available to IHF or Buyer under Section
11.1., IHF and Buyer may, at their option, terminate this Agreement at any time
prior to Closing by giving notice thereof to BBSI, upon the occurrence of any
of the following events:
a. A Seller breaches any of its
covenants, agreements or obligations under this Agreement provided
such breach remains uncured for ten (10) calendar days after a Seller
has received notice from IHF or Buyer of such breach (other than
breaches of Section 6.6.a. and Section 6.7, for which there shall be
no cure period);
b. Any representation or warranty (read
without regard to any qualifications as to materiality or Material
Adverse Effect) made by a Seller in this Agreement shall prove to have
been incorrect, incomplete, misleading or inaccurate, provided that
such breach of representation or warranty remains uncured for ten (10)
calendar days after a Seller has received notice from IHF or Buyer of
such breach and provided that such breach or breaches, individually or
in the aggregate, reasonably would be expected to have a Material
Adverse Effect on IHF and the Buyer or the BBSI Business;
c. The Initial Order shall not have
been entered within twenty-five (25) Business Days after commencement
of the Bankruptcy Proceedings;
d. The Initial Order shall not have
become a Final Order of the Bankruptcy Court within forty (40)
Business Days after commencement of the Bankruptcy Proceedings; or
e. A Seller shall file and pursue
confirmation of a plan of reorganization which (i) does not provide
for distributions according to a strict application of the relative
priority of each class (as determined by the Bankruptcy Code and, as
necessary, applicable state law), or (ii) is not agreed to (as
evidenced by a written agreement) by and among (A) the Sellers, (B)
claimants under the Heller Facility, (C) claimants under the Bankers
Trust Facility, and (D) Unicord - Thailand, Uni Group - BVI, Uni
Group.
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ARTICLE 12
GENERAL PROVISIONS
SECTION 12.1. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS. All of the representations, warranties, covenants and
agreements of the respective parties hereto, as contained herein, shall not
survive the Closing, and shall expire, terminate and be of no further force and
effect at the time of Closing; provided, however, that all covenants and
agreements to be performed, in apart or in whole, after the Closing, which are
set forth in Section 6.9., Section 6.14., Article 10, and Section 12.16., shall
survive the Closing.
SECTION 12.2. TIME IS OF THE ESSENCE. Time is of the
essence with regard to the consummation of the transactions contemplated by
this Agreement, and both parties shall use all commercially reasonable efforts
to satisfy all obligations imposed upon such parties under this Agreement in a
timely fashion.
SECTION 12.3. NOTICES. Any notice, request, instruction or
other document to be given hereunder by any party hereto shall be in writing
and shall be deemed to have been given (a) when received if given in person or
by courier or a courier service, (b) on the date of transmission if sent by
telex, facsimile or other wire transmission or (c) three (3) Business Days
after being deposited by certified mail, postage prepaid
To Buyer or IHF:
International Home Foods, Inc.
c/o Hicks, Muse, Tate & Furst Incorporated
1325 Avenue of the Americas
New York, NY 10019
Attention: Alan Menkes
with a copy to: Vinson & Elkins L.L.P.
3700 Trammel Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attention: A. Winston Oxley, Esq.
To Sellers:
Bumble Bee Seafoods, Inc.
8899 University Center Lane
San Diego, California 92123
Attention: President
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with a copy to:
Stutman, Treister & Glatt Professional Corporation
3699 Wilshire Boulevard, Suite 900
Los Angeles, California 90010
Attention: Ronald L. Fein, Esq.
or such other address as may be communicated in writing by any party to the
other.
SECTION 12.4. ENTIRE AGREEMENT; AMENDMENT. This Agreement,
the Confidentiality Agreement to which reference is made in Section 12.16., the
Exhibits and the Schedules attached hereto contain the entire agreement between
the parties hereto with respect to the transactions contemplated hereby and
supersede all previous written or oral negotiations, commitments and writings
between the parties hereto. This Agreement may be amended, but only in
writing, signed on behalf of each Seller by an authorized officer thereof and
signed on behalf of Buyer and IHF by any authorized officer thereof. The
confidentiality obligation of Buyer, IHF and their Affiliates contained in
Section 12.16. and the above-referenced Confidentiality Agreement shall
terminate and be of no further force or effect after the consummation of the
transactions contemplated hereby at the Closing.
SECTION 12.5. COUNTERPARTS. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
SECTION 12.6. GOVERNING LAW. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware without regard to principles of conflicts of laws otherwise
applicable to such determinations.
SECTION 12.7. SEVERABILITY. Any term or provision of this
Agreement that is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
SECTION 12.8. SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and inure to the benefit of each Seller, IHF and Buyer and
their respective successors and permitted assigns. Notwithstanding the
foregoing, this Agreement shall not be assigned by IHF or Buyer without the
prior written consent of BBSI, or by any Seller without the prior written
consent of Buyer and IHF.
SECTION 12.9. CAPTIONS. The index and the titles of the
Articles and Sections of this Agreement are for convenience only and shall not
be construed as limiting, defining or affecting the substantive terms of this
Agreement.
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SECTION 12.10. UNITED STATES DOLLARS. All amounts to be
paid in this Agreement are expressed in, and all payments required by this
Agreement are in, United States dollars.
SECTION 12.11. WAIVERS. The failure of a party hereto at
any time or times to require performance of any provision hereof shall in no
manner affect its right at a later time to enforce the same. No waiver by a
party of any condition or of any breach of any term, covenant, representation
or warranty contained in this Agreement shall be effective unless in writing,
and no waiver in any one or more instances shall be deemed to be a further or
continuing waiver of any such condition or breach of any other term, covenant,
representation or warranty.
SECTION 12.12. INTERPRETATION. The use of the masculine,
feminine or neuter gender herein shall not limit any provision of this
Agreement. The use of the terms "including" or "include" shall in all cases
herein mean "including, without limitation", or "including without limitation",
respectively. Underscored references to Articles, Sections, Subsections or
Schedules shall refer to those portions of this Agreement. Consummation of the
transactions contemplated herein shall not be deemed a waiver of, a breach of
or inaccuracy in any representation, warranty or covenant or of any party's
rights and remedies with regard thereto. No specific representation, warranty
or covenant contained herein shall limit the generality or applicability of a
more general representation, warranty or covenant contained herein. A breach
of or inaccuracy in any representation, warranty or covenant shall be not be
affected by the fact that any more general or less general representation
warranty or covenant was not also breached or inaccurate.
SECTION 12.13. NO THIRD PARTY BENEFICIARIES. This Agreement
is solely for the benefit of the parties hereto and, to the extent provided
herein, their respective Affiliates, directors, officers, employees, agents and
representatives, and no provision of this Agreement shall be deemed to confer
upon any third parties any remedy, claim, liability, reimbursement, cause of
action or other right.
SECTION 12.14. PUBLIC ANNOUNCEMENTS. Subject to the
requirements of Applicable Law, the timing and content of any press releases,
public announcements or other public communications concerning this Agreement
or the transactions contemplated hereby shall be subject to the mutual
agreement of each Seller, IHF and Buyer.
SECTION 12.15. REMEDIES CUMULATIVE. The remedies provided
in this Agreement shall be cumulative and shall not preclude the assertion or
exercise of any other rights or remedies available by law, in equity or
otherwise.
SECTION 12.16. CONFIDENTIAL INFORMATION. Except as
contemplated by this Agreement, Buyer and Seller agree to keep any information
concerning the proposed transaction confidential (including information
regarding any financing commitments); provided, however, that Buyer and Seller
may disclose all such information to their direct
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and indirect parent corporations, employees, representatives, legal counsel,
professional advisers and financing sources who shall be apprised of the
confidential nature of such information and the existence of this
confidentiality provision and the confidentiality agreement executed by Buyer
and Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse") on January 8, 1997,
and as required by law or regulatory authority. Furthermore, Buyer and Seller
agree that, except as may otherwise be required by law or regulatory authority,
which requirement shall be confirmed by an opinion of counsel of the disclosing
party delivered to the nondisclosing party prior to such disclosure, any press
releases or other announcements, whether written or oral, to be made by any of
them with respect to the transactions contemplated hereby shall be subject to
mutual agreement and consent prior to the dissemination thereof.
Notwithstanding the foregoing, the parties hereto will not be required to
obtain an opinion of counsel in connection with any disclosure to be made
pursuant to the Securities Exchange Act of 1934, as amended, or any of the
rules or regulations promulgated thereunder. The January 8, 1997
confidentiality agreement previously executed by Buyer and Hicks Muse shall
continue to be in full force and effect, and shall control in the event of any
inconsistency herewith.
SECTION 12.17. FEES AND EXPENSES. Except as otherwise
specifically provided herein, the Sellers, on the one hand, and IHF and Buyer,
on the other hand, shall each bear their own direct and indirect costs or
expenses incurred in connection with the negotiation and preparation of this
Agreement and the consummation and performance of the transactions contemplated
hereby.
SECTION 12.18. DIRECTOR, OFFICER AND STOCKHOLDER
NON-LIABILITY. Except for the institutional signatories to this Agreement, the
individual stockholders, directors and officers of the parties hereto or their
Affiliates shall not have any liability or obligation arising under this
Agreement.
SECTION 12.19. EXECUTION IN COUNTERPARTS. This Agreement
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a mutually executed
counterpart of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have each caused to be
executed this Agreement effective as of the date written above.
SELLERS:
BUMBLE BEE SEAFOODS, INC.
By: __________________________________
Phornpun Phornprapha,
Chair, Board of Directors
BUMBLE BEE INTERNATIONAL INC.
By: __________________________________
Phornpun Phornprapha,
Chair, Board of Directors
COMMERCE DISTRIBUTING COMPANY
By: __________________________________
Phornpun Phornprapha,
Chair, Board of Directors
SANTA FE SPRINGS HOLDING COMPANY
By: __________________________________
Phornpun Phornprapha,
Chair, Board of Directors
BUYER:
BUMBLE BEE ACQUISITION CORPORATION
By: __________________________________
Andrew Rosen,
Vice President
IHF:
INTERNATIONAL HOME FOODS, INC.
By: __________________________________
Alan B. Menkes,
Vice President
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