<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 16, 1998
AURORA FOODS INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 33-24715 13-3921934
(State or Other (Commission File (IRS Employer
Jurisdiction of Incorporation Number) Identification No.)
445 Hutchinson Ave. Ste. 960, Columbus, Ohio 43235
(Address of Principal Executive Offices) (Zip Code)
(614) 436-8600
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changes Since Last Report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 16, 1998, Aurora Foods Inc. (formerly known as MBW Foods Inc.), a
Delaware corporation (the "Company"), completed the acquisition (the
"Acquisition") of substantially all of the assets of the Duncan Hines business
from The Procter & Gamble Company ("P&G") and certain of its affiliates. These
assets include (i) Duncan Hines and associated trademarks, (ii) substantially
all of the equipment for the manufacture of Duncan Hines products currently
located in P&G's Jackson, Tennessee facility, (iii) proprietary formulations for
Duncan Hines products, (iv) other product specifications and customer lists and
(v) rights under certain contracts, licenses, purchase orders and other
arrangements and permits. The Company intends to use the acquired assets in its
operation of the Duncan Hines business. The purchase price of approximately
$445 million was based on arm's length negotiations between the Company and P&G.
The Company financed the Acquisition and related costs with an equity
contribution by Aurora Foods Holdings Inc., the Company's parent, of
approximately $94 million and with additional senior secured bank borrowings
totalling approximately $373 million. The additional senior secured bank debt
was incurred under the Company's Second Amended and Restated Credit Agreement.
Pursuant to this amendment, The Chase Manhattan Bank acts as administrative
agent for the lenders listed per Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) and (b). Financial Statements of Business Acquired; Pro Forma Financial
Information. Providing the financial statements and pro forma financial
information required by this item is not practical at the time of this report on
Form 8-K. Such financial statements and pro forma financial information are
expected to be filed within 60 days of this filing by an amendment to this
report on Form 8-KA.
(c) Exhibits. The following exhibits are filed herewith in accordance with
item 601 of Regulation S-K:
2.1 Asset Sale and Purchase dated November 26, 1997 between MBW
Investors LLC and the Procter & Gamble Company and joined
solely for the purpose stated therein by the Procter &
Gamble Manufacturing Company, the Procter & Gamble
Distributing Company and Procter & Gamble, Inc.
99.1 Lenders under the Second Amended and Restated Credit
Agreement
2
<PAGE>
SIGNATURE
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 hereunto duly authorized.
Dated: January 30, 1998 AURORA FOODS INC.
By: /s/ DIRK GRIZZLE
---------------------
DIRK GRIZZLE
Chief Financial Officer
<PAGE>
EXHIBIT NO. EXHIBIT DESCRIPTION
2.1 Asset Sale and Purchase dated November 26, 1997 between MBW
Investors LLC and The Procter & Gamble Company and joined solely for
the purpose stated therein by The Procter & Gamble Manufacturing
Company, The Procter & Gamble Distributing Company and Procter &
Gamble, Inc.
99.1 Lenders under the Second Amended and Restated Credit Agreement.
<PAGE>
EXHIBIT 2.1
================================================================================
ASSET SALE AND PURCHASE
AGREEMENT
BETWEEN
THE PROCTER & GAMBLE COMPANY
AND
MBW INVESTORS LLC
and joined solely for the purposes stated herein by
The Procter & Gamble Manufacturing Company
The Procter & Gamble Distributing Company
and
Procter & Gamble, Inc.
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. CERTAIN DEFINITIONS....................................... 1
1.01 ACQUIRED ASSETS................................................ 1
1.02 ACTION......................................................... 2
1.03 AFFILIATE...................................................... 2
1.04 ANTITRUST LAWS................................................. 2
1.05 ASSUMED LIABILITIES............................................ 2
1.06 ASSUMPTION AGREEMENT........................................... 4
1.07 AUTHORIZATION.................................................. 4
1.08 BDF COMMITMENTS................................................ 4
1.09 BDF CONTRACTS.................................................. 4
1.10 BOOKS AND RECORDS.............................................. 4
1.11 BUSINESS....................................................... 4
1.12 BUSINESS DAY................................................... 5
1.13 CLOSING........................................................ 5
1.14 CLOSING DATE................................................... 5
1.15 CONTROL........................................................ 5
1.16 CONTRACTS...................................................... 5
1.17 DOJ............................................................ 5
1.18 EFFECTIVE TIME................................................. 5
1.19 EQUIPMENT...................................................... 5
1.20 EXCLUDED ASSETS................................................ 6
1.21 EXCLUDED LIABILITIES........................................... 6
1.22 FINANCIAL INFORMATION.......................................... 7
1.23 FTC............................................................ 7
1.24 GOVERNMENTAL ENTITY............................................ 7
1.25 HSR ACT........................................................ 8
1.26 INTELLECTUAL PROPERTY.......................................... 8
1.27 INTERCOMPANY CONTRACTS......................................... 8
1.28 IRS............................................................ 8
1.29 KNOWLEDGE...................................................... 8
1.30 MATERIAL....................................................... 8
1.31 PATENTS........................................................ 8
1.32 PATENT ASSIGNMENT.............................................. 8
1.33 PATENT LICENSE................................................. 8
1.34 PERSON......................................................... 9
1.35 PURCHASE PRICE................................................. 9
1.36 SELLER'S AFFILIATES............................................ 9
1.37 SUPPLY CONTRACTS............................................... 9
1.38 TAXES.......................................................... 9
1.39 TECHNOLOGY..................................................... 9
1.40 TECHNOLOGY LICENSE AGREEMENT................................... 10
1.41 ACQUIRED ASSETS................................................ 10
1.42 TRADEMARK ASSIGNMENT........................................... 10
1.43 TRANSACTION DOCUMENTS.......................................... 10
1.44 TRANSITIONAL SERVICES AGREEMENT................................ 10
1.45 TRANSITIONAL SUPPLY AGREEMENT.................................. 10
1.46 UNITED STATES.................................................. 11
1.47 OTHER DEFINITIONS.............................................. 11
ARTICLE II. PURCHASE AND SALE OF ASSETS.............................. 12
2.01 DETAILS OF THE PURCHASE PRICE.................................. 12
</TABLE>
<PAGE>
<TABLE>
<S> <C>
2.02 DELIVERY OF PURCHASE PRICE.............................................. 12
2.03 SALE AND PURCHASE OF THE BUSINESS....................................... 12
ARTICLE III. CLOSING.......................................................... 13
3.01 ACTIONS TO BE TAKEN AT CLOSING.......................................... 13
3.02 INTERDEPENDENCE......................................................... 15
3.03 TIME AND PLACE OF CLOSING............................................... 15
ARTICLE IV. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF SELLER............. 16
4.01 AUTHORITY............................................................... 16
4.02 AUTHORIZATIONS.......................................................... 16
4.03 COMPLIANCE WITH APPLICABLE LAWS......................................... 16
4.04 CONTRACTS............................................................... 16
4.05 COUPONS................................................................. 17
4.06 EQUIPMENT............................................................... 17
4.07 FINANCIAL INFORMATION................................................... 17
4.08 FINDER'S FEES AND COMMISSIONS........................................... 17
4.09 INSURANCE............................................................... 18
4.10 INTELLECTUAL PROPERTY................................................... 18
4.11 LITIGATION AND CLAIMS................................................... 26
4.12 MAJOR CUSTOMERS......................................................... 26
4.13 ORGANIZATION AND GOOD STANDING.......................................... 26
4.14 PERMITS................................................................. 27
4.15 RECENT CONDUCT OF THE BUSINESS.......................................... 27
4.16 RECIPES; INGREDIENTS.................................................... 27
4.17 TAXES................................................................... 27
4.18 TITLE TO ACQUIRED ASSETS................................................ 28
4.19 VIOLATIONS/BREACHES..................................................... 28
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER............................ 30
5.01 AUTHORITY............................................................... 30
5.02 AUTHORIZATIONS.......................................................... 30
5.03 FINDER'S FEES AND COMMISSIONS........................................... 30
5.04 FUNDING................................................................. 30
5.05 LITIGATION AND CLAIMS................................................... 31
5.06 ORGANIZATION AND GOOD STANDING.......................................... 31
5.07 VIOLATIONS/BREACHES..................................................... 32
ARTICLE VI. COVENANTS......................................................... 33
6.01 ACCESS.................................................................. 33
6.02 ADDITIONAL DOCUMENTS.................................................... 33
6.03 ADDITIONAL RECORDS...................................................... 33
6.04 ASSIGNMENT, ASSUMPTION AND CONSENTS..................................... 33
6.05 BDF COMMITMENTS......................................................... 34
6.06 BULK TRANSFER LAWS...................................................... 35
6.07 CONFIDENTIALITY......................................................... 35
6.08 COOPERATION IN LITIGATION............................................... 36
6.09 COOPERATION IN TAX MATTERS.............................................. 37
6.10 COOPERATION OF THIRD PERSONS............................................ 37
6.11 COUPONS................................................................. 37
6.12 COVENANT NOT TO COMPETE................................................. 37
6.13 DELIVERY OF FINANCIAL INFORMATION....................................... 38
6.14 EFFORTS TO CLOSE........................................................ 39
6.15 EMPLOYEES............................................................... 41
6.16 EXPENSES................................................................ 41
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
6.17 PROPERTY ASSIGNMENT/RECORDATION/MAINTENANCE......................... 41
6.18 MODIFIED/REPLACEMENT AGREEMENTS PERTAINING TO THE
MANUFACTURE OF PRODUCTS........................................... 42
6.19 NO SHOP............................................................. 42
6.20 OPERATION OF THE BUSINESS PRIOR TO CLOSING.......................... 42
6.21 POSSESSION OF ACQUIRED ASSETS....................................... 43
6.22 PRODUCT RETURNS..................................................... 44
6.23 SUPPLEMENTS TO SCHEDULES............................................ 44
6.24 TAX RECORDS......................................................... 44
6.25 USE OF TECHNOLOGY................................................... 45
6.26 USE OF SELLER'S NAME OR REPUTATION/PACKAGING MATERIALS.............. 45
ARTICLE VII. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE................... 46
7.01 AUTHORIZATIONS/WAITING PERIODS...................................... 46
7.02 NO INJUNCTION/ORDER................................................. 46
7.03 PERFORMANCE OF BUYER'S OBLIGATIONS.................................. 46
7.04 BUYER'S REPRESENTATIONS AND WARRANTIES.............................. 46
ARTICLE VIII. CONDITIONS TO BUYER'S OBLIGATION TO CLOSE................... 47
8.01 AUTHORIZATIONS/WAITING PERIODS...................................... 47
8.02 NO INJUNCTION/ORDER................................................. 47
8.03 PERFORMANCE OF SELLER'S OBLIGATIONS................................. 47
8.04 RECEIPT OF FINANCING................................................ 47
8.05 SELLER'S REPRESENTATIONS AND WARRANTIES TRUE........................ 47
ARTICLE IX. INDEMNIFICATION AND ARBITRATION............................... 48
9.01 INDEMNIFICATION BY SELLER........................................... 48
9.02 INDEMNIFICATION BY BUYER............................................ 50
9.03 DISPUTE RESOLUTION.................................................. 52
9.04 DAMAGE LIMITATIONS.................................................. 53
9.05 TERMINATION OF INDEMNIFICATION...................................... 54
ARTICLE X. TERMINATION AND ABANDONMENT.................................... 55
10.01 TERMINATION......................................................... 55
10.02 PROCEDURE AND EFFECT OF TERMINATION................................. 55
ARTICLE X. MISCELLANEOUS.................................................. 56
11.01 AMENDMENT AND MODIFICATION.......................................... 56
11.02 WAIVER OF COMPLIANCE................................................ 56
11.03 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; OTHER MATTERS........... 56
11.04 PRE-CLOSING ACTIVITIES.............................................. 57
11.05 NOTICES............................................................. 57
11.06 EXHIBITS AND SCHEDULES; INCORPORATION BY REFERENCE.................. 58
11.07 SUCCESSORS AND ASSIGNS.............................................. 58
11.08 ENTIRE AGREEMENT.................................................... 59
11.09 SEVERABILITY........................................................ 59
11.10 CAPTIONS............................................................ 59
11.11 COUNTERPARTS........................................................ 59
11.12 GOVERNING LAW....................................................... 60
</TABLE>
iii
<PAGE>
PREAMBLE
This is an ASSET SALE AND PURCHASE AGREEMENT, dated November 26, 1997 between
The Procter & Gamble Company, an Ohio corporation ("Seller") and MBW Investors
LLC, a Delaware limited liability company ("Buyer"), and joined solely for the
purposes stated herein by The Procter & Gamble Manufacturing Company ("P&GM"),
an Ohio corporation, The Procter & Gamble Distributing Company ("P&GD"), an Ohio
corporation, and Procter & Gamble, Inc. ("P&GC"), a Canadian corporation. Each
of Seller and Buyer may hereinafter be referred to as a "Party" or,
collectively, as "Parties".
This agreement ("Agreement") sets forth the terms and conditions upon which
Seller and Seller's Affiliates (as that term is defined in Section 1.36 below)
will sell to Buyer, and Buyer will purchase from Seller and Seller's Affiliates,
the Business as hereinafter defined.
In consideration of the mutual agreements contained herein, and intending to be
legally bound hereby, the signatories hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 "ACQUIRED ASSETS" means only the following assets:
(a) the Books and Records;
(b) to the extent transferable without the consent of any third party,
all claims of Seller or Seller's Affiliates against third parties
exclusively related to other Acquired Assets or the Assumed
Liabilities including without limitation claims in respect of rights
under manufacturers' and vendors' warranties, guarantees or similar
obligations; claims for past infringement or violation of rights
associated with the Intellectual Property; and claims against any
third party who damaged or injured, or caused damages or injury to,
any portion of the other Acquired Assets or the Business;
(c) the Contracts;
(d) the Equipment;
(e) goodwill exclusively related to the Business not otherwise
specifically identified herein;
(f) the Intellectual Property; and
(g) all refunds of Taxes to the extent the Taxes being refunded were an
Assumed Liability.
Notwithstanding the above, the Acquired Assets do not include any of the
Excluded Assets.
1.02 "ACTION" means any dispute, controversy, claim, action, litigation, suit,
cause of action, arbitration, mediation, or any proceeding by or before
any mediator or Governmental Entity,
1
<PAGE>
or any investigation, subpoena, or demand preliminary to any of the
foregoing.
1.03 "AFFILIATE" means, with respect to a Person, another Person that directly,
or indirectly through one or more intermediaries, Controls, or is
Controlled by, or is under common Control with, such Person.
1.04 "ANTITRUST LAWS" means the Sherman Act (as amended); the Clayton Act (as
amended); the HSR Act; the Federal Trade Commission Act (as amended); and
all other statutes, rules, regulations, orders, decrees, administrative
and judicial doctrines, and other laws (whether foreign, federal, state,
provincial, local or other) that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade.
1.05 "ASSUMED LIABILITIES" means the following liabilities, whether known or
unknown, accrued or contingent, direct or indirect:
(a) all liabilities arising out of or related to the operation of the
Business or ownership of the Acquired Assets after the Effective
Time;
(b) all liabilities for product liability and product warranty for all
products manufactured by or for the Buyer or its successors after the
Effective Time;
(c) all liabilities for return of products of the Business after March
31, 1998;
(d) all liabilities for Taxes arising out of or related to the operation
of the Business or ownership of the Acquired Assets after the
Effective Time and as provided in Section 6.16;
(e) all liabilities of Seller or Seller's Affiliates for periods after
the Effective Time pursuant to any Contract, but only to the extent
any such Contract is actually assigned to Buyer and excluding any
liability or obligation relating to or arising out of any such
Contract as a result of any breach by Seller or any of Seller's
Affiliates of any such Contract occurring at any time prior to the
Effective Time;
(f) reimbursement of Seller or Seller's Affiliates for BDF Commitments
paid by them for performance that occurs after January 31,1998 by any
trade customer that has irrevocably committed to such performance
prior to the date on which Seller or one of Seller's Affiliates gives
the notice required by Section 6.05;
(g) all liabilities of Seller or Seller's Affiliates for periods after
the Effective Time, pursuant to any purchase orders, contracts,
agreements or other obligations to the extent they are exclusively
related to the Business and are to be sold, conveyed, assigned,
transferred and delivered to Buyer pursuant to Section 6.04(a)(ii);
2
<PAGE>
(h) except as otherwise specifically provided in the Transitional Supply
Agreement, all liabilities of Seller or Seller's Affiliates for
periods after the termination or expiration of the Transitional
Supply Agreement pursuant to any Supply Contract, including without
limitation all liabilities for materials or services to the extent
exclusively related to the Manufacture of Products and ordered in the
ordinary course of business prior to the termination or expiration of
the Transitional Supply Agreement, but delivered to Buyer or its
designee thereafter;
(i) except as otherwise specifically provided in the Transitional Supply
Agreement, all liabilities of Seller or Seller's Affiliates for
periods after the termination or expiration of the Transitional
Supply Agreement pursuant to any purchase order, contracts,
agreements or other obligations to the extent they are exclusively
related to the Business and are to be sold, conveyed, assigned,
transferred and delivered to Buyer pursuant to Section 6.04(a)(i),
including without limitation all liabilities for materials or
services to the extent exclusively related to the Manufacture of
Products and ordered in the ordinary course of business prior to the
termination or expiration of the Transitional Supply Agreement, but
delivered to Buyer or its designee thereafter;
(j) all liabilities and obligations of the Buyer as set forth in the
Transaction Documents;
(k) all liabilities with respect to coupon distribution and redemption,
except for those coupons set forth in Schedule 1.05(k); and
(l) reimbursement of Seller or Seller's Affiliates for amounts paid by
them for media advertising, if any, for the Business that occurs
after the Effective Time.
1.06 "ASSUMPTION AGREEMENT" means that agreement in the form attached as
Exhibit 1.06, between Seller, Seller's Affiliates, and Buyer, to be
executed as of the Closing, dealing with the assumption by the Buyer of
the Assumed Liabilities and the assignment by the Seller and Seller's
Affiliates of their interests pursuant to the Contracts.
1.07 "AUTHORIZATION" means any consent, authorization, approval, order,
license, certificate or permit of or from, or declaration or filing with,
any Governmental Entity including without limitation any required filing
with any Governmental Entity and the subsequent expiration of any required
waiting period under any Antitrust Law.
1.08 "BDF COMMITMENTS" means, to the extent exclusively related to the
Business, those commitments made by Seller or Seller's Affiliates with
certain customers of the Business to perform according to a BDF Contract.
3
<PAGE>
1.09 "BDF CONTRACTS" means those contracts by and among Seller or Seller's
Affiliates and certain customers of the Business defining and qualifying
merchandising activities and how those customers will be reimbursed by
Seller or Seller's Affiliates for performance of merchandising activities
occurring during the period of those contracts. A sample BDF Contract and
calculation sheet is attached as Exhibit 1.09.
1.10 "BOOKS AND RECORDS" means all books, records and other documents
(including without limitation customer and supplier lists and files;
distribution lists; mailing lists; sales, marketing, promotional and
advertising materials; cost and pricing information; operating, production
and other manuals; plans; files; specifications; process drawings;
computer programs, data and information; manufacturing and quality control
records and procedures; research and development files) exclusively
related to the Business and existing at the Effective Time.
1.11 "BUSINESS" means the manufacturing, packaging, distributing, marketing and
selling of cake mixes, brownie mixes, frostings, muffin mixes, cookie
mixes, dessert bar mixes and fruit crisp mixes ("BAKING MIXES") under the
Trademarks. The assets and liabilities of the Business consist,
respectively, of the Acquired Assets and the Assumed Liabilities.
1.12 "BUSINESS DAY" means any day on which commercial banks in New York City
are open for business providing substantially all services offered by such
banks.
1.13 "CLOSING" means the closing of the transactions contemplated by this
Agreement in accordance with the terms and upon the conditions set forth
in this Agreement.
1.14 "CLOSING DATE" means the date on which the Closing occurs, as provided in
Section 3.03 of this Agreement.
1.15 "CONTROL" means, with respect to a Person, the ownership by another Person
of greater than 50% of the income or voting interests of such Person, or
such other arrangement as constitutes the ability to direct the management
or affairs of such Person.
1.16 "CONTRACTS" means those purchase orders, contracts, agreements, licenses
and other obligations (except Intercompany Contracts and Supply Contracts)
exclusively related to the Business and freely assignable by Seller or
Seller's Affiliates without the consent of any third party. The Contracts
in effect as of the date of the execution of this Agreement, other than
those made in the ordinary course of business that involve payments of
less than seventy-five thousand United States dollars (US$75,000) per
year, are set forth in Schedule 1.16; provided, however, that the
liabilities after the Effective Time for all Contracts not
4
<PAGE>
listed pursuant to this clause will not exceed seven hundred fifty
thousand United States dollars (US$750,000) in the aggregate.
1.17 "DOJ" means the United States Department of Justice.
1.18 "EFFECTIVE TIME" means 9:00 a.m. Eastern Standard Time on the Closing
Date.
1.19 "EQUIPMENT" means the machinery, equipment (including without limitation
production molds, dies, artwork cylinders, spare parts, maintenance
equipment and supplies), tools and other capital assets set forth in
Schedule 1.19.
1.20 "EXCLUDED ASSETS" means any and all assets not expressly listed as
Acquired Assets, whether or not related to the Business.
1.21 "EXCLUDED LIABILITIES" means liabilities of Seller or Seller's Affiliates
that are not Assumed Liabilities including without limitation:
(a) any of Seller's or Seller's Affiliates obligations or liabilities
under this Agreement and the other agreements with Buyer contemplated
by the Transaction Documents;
(b) except as set forth in Section 6.16 or elsewhere in this Agreement,
any of Seller's or Seller's Affiliates' obligations or liabilities
for expenses or fees (including attorneys' and accountants' fees)
arising out of or related to the negotiation, preparation, approval
or authorization of this Agreement and the transactions contemplated
hereby or the consummation (or preparation for the consummation) of
the transactions contemplated hereby;
(c) any of Seller's or Seller's Affiliates' obligations or liabilities
with respect to Taxes, except Taxes specifically allocated to,
prorated to or assumed by Buyer under this Agreement;
(d) any liabilities arising out of or relating to the Excluded Assets
except for damage or destruction of any Excluded Assets to the extent
caused by Buyer or its representatives;
(e) liabilities with respect to Actions that arise out of or relate to
the conduct of the Business prior to the Effective Time;
(f) any intercompany debt, settlement or other liability or obligation
between the Business and Seller or Seller's Affiliates including
without limitation any Intercompany Contracts;
(g) any liability or obligation arising out of or related to claims based
on violations of laws or regulations (including without limitation
any environmental law, rule or regulation) in effect at or prior to
the Effective Time, in each case arising out of or related to events
which have occurred, products which have been manufactured, or
5
<PAGE>
services which have been performed by the Business, or the use of the
Acquired Assets or the operation of the Business, prior to the
Effective Time;
(h) any liability or obligation relating to any indebtedness for money
borrowed by Seller or Seller's Affiliates;
(i) any liability or obligation under Contracts, which liability or
obligation arose or accrued prior to the Effective Time;
(j) except as set forth in this Agreement, any accounts payable or
accrued expenses of the Business as of the Effective Time;
(k) any liability or obligation arising out of or related to any
employment relationship with Seller or Seller's Affiliates (including
without limitation compensation, payroll taxes and employee benefits)
with respect to any and all employees and/or former employees of
Seller or any of Seller's Affiliates; and
(l) any liability or obligation for product liability or product warranty
for all products manufactured by or for Seller or Seller's Affiliates
or the Business prior to the Effective Time.
1.22 "FINANCIAL INFORMATION" means:
(a) the audited statements of direct revenues, cost of products sold,
gross margin, other direct expenses (including marketing,
promotional, selling, administrative and other expenses) and excess
of direct revenues over direct expenses of the Business for the
Seller's fiscal year ended June 30, 1995, the Seller's fiscal year
ended June 30, 1996, and the Seller's fiscal year ended June 30, 1997
set forth in Schedule 1.22(a);
(b) the reviewed but unaudited financial statements of direct revenues,
cost of products sold, gross margin, other direct expenses of the
Business (including marketing, promotional, selling, administrative
and other expenses) and excess of direct revenues over direct
expenses for the Seller's fiscal quarter ended September 30, 1997 set
forth in Schedule 1.22(b); and
(c) the statement ("Asset Statement") of the book value of Equipment and
intangibles of the Business having book value being sold to Buyer
pursuant to this Agreement, in accordance with Seller's historical
practices as of June 30, 1997 set forth in Schedule 1.22(c).
1.23 "FTC" means the United States Federal Trade Commission.
1.24 "GOVERNMENTAL ENTITY" means any arbitrator, court, judicial, legislative,
administrative or regulatory agency, commission, department, board or
bureau or body or other governmental authority or instrumentality or any
Person or entity exercising executive, legislative, judicial, regulatory
or administrative
6
<PAGE>
functions of or pertaining to government, whether foreign, federal, state,
provincial, local or other.
1.25 "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(as amended).
1.26 "INTELLECTUAL PROPERTY" means the Trademarks and the Technology, and such
other trade names, service marks, brand names, copyrights, slogans, rights
to trade dress, labels, advertising and designs, whether or not
registered, as are owned as of the date hereof by Seller or Seller's
Affiliates and are exclusively related to the Business, as well as all the
registrations and applications for the foregoing.
1.27 "INTERCOMPANY CONTRACTS" means all purchase orders, contracts, agreements
and other obligations between or among Seller and its Affiliates.
1.28 "IRS" means the United States Internal Revenue Service.
1.29 "KNOWLEDGE" means, in the case of an entity, the actual knowledge of the
officers of such entity after reasonable investigation.
1.30 "MATERIAL" and its variations mean, with respect to an item, event,
circumstance or condition, that such item, event, circumstance or
condition, individually or in the aggregate, has a substantially adverse
effect upon the assets, operations, financial condition or earnings of the
Business.
1.31 "PATENTS" means those patents and applications therefor that are set forth
in Schedule 1.31.
1.32 "PATENT ASSIGNMENT" means the overall assignment of the Patents to Buyer
from Seller, which will be in the form attached as Exhibit 1.32 or in such
other form as agreed to in writing by Seller and Buyer. Individual Patent
assignment documents, by country, will be prepared and filed as stated in
Section 6.17 of this Agreement.
1.33 "PATENT LICENSE AGREEMENT" means that agreement in the form attached as
Exhibit 1.33, between Seller and Buyer to be executed as of Closing,
dealing with the license of certain patents of Seller to Buyer. Such
patents (the "Licensed Patents") are set forth in Schedule 1.33.
1.34 "PERSON" means (as the context requires) an individual, a corporation, a
partnership, an association, a trust, a limited liability company, or
other entity or organization, including a Governmental Entity.
7
<PAGE>
1.35 "PURCHASE PRICE" means four hundred forty-five million United States
dollars (US$445,000,000).
1.36 "SELLER'S AFFILIATES" means (as the context requires) one or more of P&GM,
P&GD and/or P&GC.
1.37 "SUPPLY CONTRACTS" means those purchase orders, contracts, agreements and
other obligations (except Intercompany Contracts) exclusively related to
the Manufacture of Products and freely assignable by Seller or Seller's
Affiliates without the consent of any third party. The Supply Contracts in
effect as of the date of execution of this Agreement, other than those
made in the ordinary course of business that involve payments of less than
seventy-five thousand United States dollars (US$75,000) per year, are set
forth in Schedule 1.37; provided, however, that the liabilities after the
Effective Time for all Supply Contracts not listed pursuant to this clause
will not exceed seven hundred fifty United States dollars (US$750,000) in
the aggregate.
1.38 "TAXES" means all foreign, federal, state, provincial, local or other
taxes, fees, levies, duties or other assessments or charges of whatever
kind (including without limitation income, sales, use, transfer, excise,
stamp, property, value added, recording, registration, intangible,
documentary, goods and services, real estate, sales, payroll, gains, gross
receipts, withholding, and franchise taxes) imposed by the United States
or any state, county or local government, subdivision or agency thereof,
or any other jurisdiction outside the United States. Such term will
include any interest, penalties, or additions payable in connection with
such taxes, fees, levies, duties or other assessments or charges.
1.39 "TECHNOLOGY" means the Patents, Buyer's rights under the Patent License
Agreement, and (except as set forth in Schedule 1.39) all of Seller's
know-how, patented and unpatented formulas (including without limitation
current and discontinued flavors and products, recipes and mixing
instructions), improvements, trade secrets, research and results thereof,
inventions, data, methods, processes, instructions, drawings, and
specifications that are exclusively related to the Business.
1.40 "TECHNOLOGY LICENSE AGREEMENT" means that agreement in the form attached
as Exhibit 1.40, between Seller and Buyer to be executed as of Closing,
dealing with the license of certain specific technologies of Seller to
Buyer. Such technologies are set forth in Schedule 1.40.
1.41 "TRADEMARKS" means those trademarks, registrations and applications
therefor that are set forth in Schedule 1.41.
8
<PAGE>
1.42 "TRADEMARK ASSIGNMENT" means the overall assignment of the Trademarks to
Buyer from Seller, which will be in the form attached as Exhibit 1.42 or
in such other form as agreed to in writing by Seller and Buyer. Individual
Trademark assignment documents, by country, will be prepared and filed as
stated in Section 6.17 of this Agreement.
1.43 "TRANSACTION DOCUMENTS" means collectively (a) this Agreement; (b) the
Assumption Agreement; (c) the Patent Assignment; (d) the Patent License
Agreement; (e) the Technology License Agreement; (f) the Trademark
Assignment; (g) the Transitional Services Agreement; and (h) the
Transitional Supply Agreement. The phrase "THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT" or such similar phrases
includes the execution and delivery of these Transaction Documents.
1.44 "TRANSITIONAL SERVICES AGREEMENT" means the agreement, in the form
attached as Exhibit 1.44, between Buyer and some or all of Seller and
Seller's Affiliates, to be executed as of the Closing, dealing with the
short-term provision of certain transitional services by Seller and/or
Seller's Affiliates to Buyer.
1.45 "TRANSITIONAL SUPPLY AGREEMENT" means the agreement, in the form attached
as Exhibit 1.45, between Buyer and P&GM, to be executed as of the Closing,
dealing with the short-term manufacture by P&GM of Products for Buyer.
1.46 "UNITED STATES" means the United States of America.
1.47 OTHER DEFINITIONS. Other terms defined in this Agreement, and the location
where they are defined, are:
<TABLE>
<CAPTION>
Location
--------
<S> <C>
"AAA".................................................. Section 9.03(d)
"AGREEMENT"............................................ Preamble
"ASSET STATEMENT"...................................... Section 1.22
"BAKING MIXES"......................................... Section 1.11
"BUYER"................................................ Preamble
"BUYER'S ASSERTION".................................... Section 9.01(b)
"CHASE"................................................ Section 5.04
"CHASE COMMITMENT...................................... Section 5.04
"CLAIM"................................................ Section 9.03(a)
"CONFIDENTIALITY AGREEMENT"............................ Section 6.07(a)
"CONSUMMATION OF TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT"................................. Section 1.43
"EVALUATION MATERIAL".................................. Section 6.07(a)
"LICENSED PATENTS"..................................... Section 1.33
"MANUFACTURE".......................................... Exhibit 1.45
"MATTER"............................................... Section 11.05
"NATWEST".............................................. Section 5.04
"NATWEST COMMITMENT"................................... Section 5.04
"P&GC"................................................. Preamble
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
"P&GD"................................................. Preamble
"P&GM"................................................. Preamble
"PARTY"/"PARTIES"...................................... Preamble
"PERMITTED LIENS"...................................... Section 4.18
"PRODUCTS"............................................. Exhibit 1.45
"RESTRICTED BUSINESS".................................. Section 6.12
"SELLER"............................................... Preamble
"SELLER'S ASSERTION"................................... Section 9.02(b)
"TAX RECORDS".......................................... Section 6.24
</TABLE>
10
<PAGE>
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.01 DETAILS OF THE PURCHASE PRICE. A description of the details of the
Purchase Price, as agreed to by Seller, Seller's Affiliates and Buyer
prior to the Closing, is or will be set forth in Schedule 2.01. Seller and
Seller's Affiliates, and Buyer and its Affiliates, will not take a
position in any forum that is inconsistent with the details set forth in
Schedule 2.01, including without limitation taking an inconsistent
position on any Tax return, before any Governmental Entity charged with
the collection of any Tax, or in any Action relating to any Tax. Seller
and Buyer will file IRS Form 8594 and all federal, state, local and
foreign tax returns in accordance with Schedule 2.01. Seller and Buyer
will provide each other promptly (and no later than 90 days following the
Closing Date) with any additional information necessary to complete IRS
Form 8594.
2.02 DELIVERY OF PURCHASE PRICE. In accordance with the terms and upon the
conditions of this Agreement, and in consideration of the sale of the
Acquired Assets to Buyer by Seller and Seller's Affiliates, at the Closing
Buyer will deliver to Seller the Purchase Price in immediately available
funds by wire transfer to an account specified by Seller at least 3 days
prior to Closing.
2.03 SALE AND PURCHASE OF THE BUSINESS. In accordance with the terms and upon
the conditions of this Agreement, at the Closing Seller and Seller's
Affiliates will sell, convey, assign, transfer and deliver to Buyer the
Acquired Assets and Assumed Liabilities, and Buyer will purchase, acquire,
accept and assume, the Acquired Assets and Assumed Liabilities; provided,
however, the Supply Contracts and certain purchase orders, contracts,
agreements and other obligations or portions thereof described in Section
6.04, will be sold, conveyed, assigned, transferred and delivered to Buyer
by Seller or Seller's Affiliates, and Buyer will purchase, acquire, accept
and assume the rights and Assumed Liabilities with respect thereto
pursuant to Section 6.04.
11
<PAGE>
ARTICLE III
CLOSING
3.01 ACTIONS TO BE TAKEN AT CLOSING. At the Closing, the following actions
will be taken:
(a) Seller or Seller's Affiliates will deliver to Buyer, duly executed,
the following:
(i) a bill of sale, in the form attached as Exhibit 3.01(a)(i) or
in such other form as agreed to in writing by Seller and
Buyer, for those Acquired Assets that will not be transferred
pursuant to specific documents described elsewhere in this
Section 3.01(a);
(ii) a certificate by a Vice-President of Seller, in a form
reasonably acceptable to Buyer, to the effect that, to the
Knowledge of Seller, the warranties and representations set
forth in Article IV of this Agreement are true and correct in
all material respects, and that all representations and
warranties set forth in Article IV of this Agreement that are
qualified as to materiality are true in all respects, as of
the Closing;
(iii) a short-form certificate of good standing and certificate of
incorporation of Seller, in each case certified by the
Secretary of State of the State of Ohio as of a date no more
than 5 Business Days prior to the Closing Date;
(iv) a certified copy of Seller's Code of Regulations;
(v) an assignment of the copyrights set forth in Schedule
3.01(a)(v) in the form set forth in Exhibit 3.01(a)(v) or in
such other form as agreed to in writing by Seller and Buyer;
(vi) an opinion of Seller's counsel in the form attached as
Schedule 3.01(a)(vi) (upon which the lenders under the Chase
Commitment and the Natwest Commitment will be entitled to
rely) with respect to the due authorization, execution and
delivery of the Transaction Documents by Seller and Seller's
Affiliates and the enforceability of the Transaction
Documents against Seller and Seller's Affiliates;
(vii) the Patent Assignment;
(viii) a receipt for the Purchase Price in the form attached as
Exhibit 3.01(a)(viii) or in such other form as agreed to in
writing by Seller and Buyer;
(ix) certified copies of any resolutions by Seller's and Seller's
Affiliates' boards of directors, or any other necessary
corporate actions of Seller and Seller's Affiliates,
authorizing the execution and performance of this Agreement,
the Transaction Documents and the consummation of the
transactions contemplated thereby;
(x) the Trademark Assignment;
(xi) assignments for the United States and Canadian Trademarks in
a form suitable for filing with the
12
<PAGE>
appropriate Governmental Entities, assuming proper
notarization, authentication, legalization, execution and/or
consularization by Buyer, if needed; and
(xii) such other documents as are, in the reasonable opinion
of counsel for Seller and Buyer, necessary or advisable to
transfer the Acquired Assets to Buyer.
(b) Buyer will deliver to Seller or Seller's Affiliates, duly executed,
the following:
(i) a certified copy of Buyer's by-laws;
(ii) a certificate by a Vice-President of Buyer, in a form
reasonably acceptable to Seller, to the effect that, to the
Knowledge of Buyer, the warranties and representations set
forth in Article V of this Agreement are true and correct in
all material respects, and that all representations and
warranties set forth in Article V of this Agreement that are
qualified as to materiality are true in all respects, as of
the Closing;
(iii) a short-form certificate of good standing and
certificate of incorporation of Buyer, in each case certified
by the Secretary of State of the State of Delaware as of a
date no more than 5 Business Days prior to the Closing Date;
(iv) an opinion of Buyer's counsel in the form attached as
Schedule 3.01(b)(iv) with respect to the due authorization,
execution and delivery of the Transaction Documents by Buyer
and the enforceability of the Transaction Documents against
Buyer;
(v) the Purchase Price, delivered as described in Section 2.02;
(vi) a receipt for the Acquired Assets in the form attached as
Exhibit 3.01(b)(vi) or in such other form as agreed to in
writing by Seller and Buyer;
(vii) certified copies of any resolutions by Buyer's board of
directors, or any other necessary corporate actions of Buyer
and its Affiliates, authorizing the execution and performance
of this Agreement, the Transaction Documents and the
consummation of the transactions contemplated thereby; and
(viii) such other documents as are, in the reasonable opinion
of counsel for Seller and Buyer, necessary or advisable to
transfer the Assumed Liabilities to Buyer.
(c) Seller or Seller's Affiliates and Buyer concurrently will duly
execute and deliver to each other:
(i) a certificate of its Secretary or an Assistant Secretary as
to the incumbency of all officers executing documents in
connection with the Transaction Documents;
(ii) the Transitional Supply Agreement;
(iii) the Assumption Agreement;
(iv) the Patent License Agreement;
13
<PAGE>
(v) the Technology License Agreement; and
(vi) the Transitional Services Agreement.
3.02 INTERDEPENDENCE. The transfers and deliveries described in this Article
III are mutually interdependent and are to be regarded as occurring
simultaneously as of the Effective Time. Unless agreed to in writing by
both Seller and Buyer, no such transfer or delivery will become effective
until all other transfers and deliveries provided for in this Article III
have also become effective.
3.03 TIME AND PLACE OF CLOSING. Subject to the satisfaction or waiver of all
of the conditions set forth in Articles VII and VIII, the Closing will
take place at the offices of Buyer's counsel, Richards & O'Neil, 885 Third
Avenue, New York, New York, at 10:00 a.m. local time on the later of
January 16, 1998 or 5 Business Days after receipt of all Authorizations
necessary to consummate the sale by Seller and Seller's Affiliates, and
the purchase and assumption by Buyer, of the Acquired Assets and the
Assumed Liabilities, or on such other date as may be mutually agreed to in
writing by Seller and Buyer.
14
<PAGE>
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF SELLER
Seller represents and warrants that the following are true and correct as of the
date of this Agreement, and will be true and correct as of the Closing.
4.01 AUTHORITY. Seller and Seller's Affiliates have full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. All corporate actions and proceedings on
the part of Seller or Seller's Affiliates that are necessary to approve
and authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have, or prior to
Closing will have, occurred, and, assuming proper execution and delivery
by Buyer, this Agreement is enforceable against Seller and Seller's
Affiliates in accordance with its terms and the Transaction Documents will
be enforceable upon proper execution and delivery to Buyer.
4.02 AUTHORIZATIONS. No Authorization is needed by Seller or Seller's
Affiliates for the execution, delivery, or performance of this Agreement
and the consummation of the transactions contemplated hereby, except as
set forth in Schedule 4.02 or where the failure to obtain such
Authorization will not have a material adverse effect on the Business,
this Agreement or the consummation of the transactions contemplated
hereby.
4.03 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in Schedule 4.03,
to the Knowledge of Seller, the Business is being conducted in compliance
in all Material respects with all material statutes, laws, ordinances,
rules, orders, and regulations and, since July 1, 1997 Seller has not
received any written communication from a Governmental Entity that alleges
the Business is not in such compliance. The Products are in all Material
respects in compliance with the United States Federal Food, Drug and
Cosmetic Act, including the Nutrition Labeling and Education Act of 1990
and the regulations issued thereunder.
4.04 CONTRACTS. Schedule 4.04(a) sets forth all purchase orders, contracts,
agreements, licenses and other obligations to be assumed by Buyer pursuant
to Section 6.04(a) and not set forth in Schedule 1.16 or Schedule 1.37
that subject the Business or will, after the Closing, subject Buyer or the
Business to any covenant not to compete or otherwise limit the areas in
which the Business may be conducted. Except as set forth on Schedule
4.04(b), to the Knowledge of Seller, each Contract and Supply Contract is
in full force and effect and is enforceable by Seller or Seller's
Affiliates in accordance with its terms, except where not Material. Except
as set forth in Schedule 4.04(c), or where not Material, each of Seller
and Seller's Affiliates has performed all obligations required to be
15
<PAGE>
performed by it to date under the Contracts and Supply Contracts and is
not (with or without the lapse of time or the giving of notice, or both)
in breach or default thereunder.
4.05 COUPONS. All coupons issued or scheduled to be issued during Seller's
fiscal year ending June 30, 1998 are set forth in Schedule 4.05.
4.06 EQUIPMENT. Except as set forth on Schedule 4.06, the Equipment is, in all
Material respects, in reasonable operating condition, has been maintained
in accordance with reasonable maintenance schedules, and is adequate for
its current uses. SELLER AND SELLER'S AFFILIATES DISCLAIM ANY AND ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE WITH RESPECT TO
THE EQUIPMENT. The Equipment comprises all Material Equipment exclusively
used in the Business by Seller and Seller's Affiliates at Seller's
Affiliate's facility in Jackson, Tennessee.
4.07 FINANCIAL INFORMATION. The Financial Information has been derived from
the accounting books and records of Seller and Seller's Affiliates used as
a basis for the preparation of the consolidated financial statements of
Seller and presents fairly in all Material respects the direct revenues,
cost of products sold, gross margin, other direct expenses (including
marketing, promotional, selling, administrative and other expenses) and
excess of direct revenues over direct expenses for the Business on the
basis described in the notes to Schedules 1.22(a) and 1.22(b) for the
periods covered by such schedules, and the items included in the Asset
Statement on the basis described in the notes to Schedule 1.22(c) for the
periods covered by that schedule, in each case in accordance with United
States generally accepted accounting principles consistently applied,
except as otherwise provided in the Schedules.
4.08 FINDER'S FEES AND COMMISSIONS. Neither Seller nor Seller's Affiliates
have any liability or obligation to pay any fees or commissions to any
broker, finder or other agent with respect to the transactions
contemplated by this Agreement for which Buyer could become liable or
obligated.
4.09 INSURANCE. Seller has maintained and will continue to maintain through
the Closing Date a reasonable program of casualty and property insurance
(which may include self insurance) with respect to the Acquired Assets and
the Business. Between the date of this Agreement and the Closing Date,
Seller will provide or make available to Buyer any information pertaining
to the Acquired Assets and the Business that is reasonably requested by
Buyer or Buyer's brokers or insurers to effect insurance on the Acquired
Assets and the Business as of the Closing Date.
4.10 INTELLECTUAL PROPERTY.
(a) TRADEMARKS
16
<PAGE>
(i) Except as set forth in Schedule 4.10(a)(i) or where not
Material, the Trademarks listed on Schedule 1.41 comprise all
the trademarks federally registered in the United States and
Canada that contain the Duncan Hines name as well as all the
trademarks federally registered in the United States and
Canada that are in current and exclusive use in the Business.
(ii) Except as set forth in Schedule 4.10(a)(ii) or where not
Material, Seller or Seller's Affiliates own all United States
and Canadian Trademarks that use the Duncan Hines name, as
well as all the United States and Canadian Trademarks in
current and exclusive use in the Business (whether or not they
use the Duncan Hines name), free and clear of any security
interests, liens, pledges, claims, charges or options.
(iii) Except as set forth in Schedule 4.10(a)(iii) or where not
Material, Seller or Seller's Affiliates are the owners of
record of the Trademarks not as a nominee or agent of any
third party (provided, however, Buyer acknowledges and agrees
the records of certain Governmental Entities outside the
United States and Canada may continue to reflect Hines Park
Foods, Inc. as the registered owner of certain Trademarks that
are now owned by Seller as a result of a merger between Seller
and Hines-Park Foods, Inc., effective May 12, 1995).
(iv) Except as set forth in Schedule 4.10(a)(iv) or where not
Material, each of the United States and Canadian Trademark
registrations is valid and subsisting in the territory in
which such Trademark is registered for use on the products for
which such Trademark is currently and exclusively being used
in the Business.
(v) Except as set forth in Schedule 4.10(a)(v) or where not
Material:
(A) no claims are currently being asserted against Seller or
Seller's Affiliates by any person regarding the use of
any United States or Canadian Trademarks, or challenging
or questioning the validity of any license or agreement
relating to the use of any United States or Canadian
Trademarks;
(B) to the Knowledge of Seller, the use in the United States
and Canada of such United States or Canadian Trademarks,
respectively, by Seller or Seller's Affiliates does not
infringe on any United States or Canadian trademark,
trade name or service mark of any third party;
(C) no Actions are pending or, to the Knowledge of Seller,
threatened against Seller or Seller's Affiliates with
respect to the United States and Canadian Trademarks; and
17
<PAGE>
(D) no Action is currently being asserted and, to the
Knowledge of Seller, no conditions exist upon which such
Action could be based, that Seller or any of Seller's
Affiliates is in default or is not in full compliance
with all licenses and other agreements under which it is
using any United States or Canadian Trademarks.
(vi) Except as set forth in Schedule 1.16 or where not Material:
(A) there are no licenses, sublicenses, assignments or joint
ownership agreements currently in effect pertaining to
any of the United States or Canadian Trademarks to which
Seller or Seller's Affiliates is a party, other than any
intercompany licenses which will be terminated as of the
Closing Date; and
(B) no third party will have a right to license or acquire
any of the United States or Canadian Trademarks as a
consequence of the consummation of the transactions
contemplated by this Agreement.
(vii) Except as set forth in Schedule 4.10(a)(vii) or where not
Material, no consent of any third party will be required for
the use of any United States or Canadian Trademark as a
result of the consummation of the transactions contemplated
by this Agreement.
(viii) Except as set forth in Schedule 4.10(a)(viii) or where not
Material, there are no common law or state-registered
trademarks that contain the Duncan Hines name which are used
by Seller or Seller's Affiliates in the United States or
Canada other than exclusively in connection with the
Business.
(b) PATENTS, LICENSED PATENTS
(i) Except as set forth in Schedule 4.10(b)(i) or where not
Material, the Patents and Licensed Patents listed on
Schedules 1.31 and 1.33 comprise all the patents necessary
for Seller's and Seller's Affiliates' conduct of the
Business, and all patents related to "shelf stable" batter
technology owned by Seller.
(ii) Except as set forth in Schedule 4.10(b)(ii) or where not
Material, Seller or Seller's Affiliates own all the United
States and Canadian Patents and United States and Canadian
Licensed Patents free and clear of any security interests,
liens, pledges, claims, charges or options.
(iii) Except as set forth in Schedule 4.10(b)(iii) or where not
Material, Seller or Seller's Affiliates are the owners of
record of the Patents and Licensed Patents (provided,
however, Buyer acknowledges and agrees the records of certain
Governmental Entities may continue to reflect Hines Park
Foods, Inc. as the registered owner of certain Patents and
Licensed
18
<PAGE>
Patents that are now owned by Seller as a result of a merger
between Seller and Hines-Park Foods, Inc., effective May 12,
1995).
(iv) Except as set forth in Schedule 4.10(b)(iv) or where not
Material, each of the United States and Canadian Patents and
Licensed Patents is valid and in force.
(v) Except as set forth in Schedule 4.10(b)(v) or where not
Material:
(A) no claims are currently being asserted against Seller or
Seller's Affiliates by any person regarding the use of
any United States or Canadian Patents or United States
or Canadian Licensed Patents, or challenging or
questioning the validity of any license or agreement
relating to the use of any United States or Canadian
Patents or United States or Canadian Licensed Patents;
(B) to the Knowledge of Seller, the use in the United States
and Canada of such United States and Canadian Patents
and United States and Canadian Licensed Patents,
respectively, by Seller or Seller's Affiliates does not
infringe on any United States or Canadian patent of any
third party;
(C) no Actions are pending or, to the Knowledge of Seller,
threatened against Seller or Seller's Affiliates with
respect to the United States and Canadian Patents and
United States and Canadian Licensed Patents; and (D) no
Action is currently being asserted and, to the Knowledge
of Seller, no conditions exist upon which such Action
could be based, that Seller or any of Seller's
Affiliates is in default or is not in full compliance
with all licenses and other agreements under which it is
using any United States or Canadian Patents or United
States or Canadian Licensed Patents.
(vi) Except as set forth in Schedule 1.16 or where not Material:
(A) there are no licenses, sublicenses, assignments or joint
ownership agreements currently in effect pertaining to
any of the United States or Canadian Patents or United
States or Canadian Licensed Patents to which Seller or
Seller's Affiliates is a party, other than any
intercompany licenses which will be terminated as of the
Closing Date; and
(B) no third party will have a right to license or acquire
any of the United States or Canadian Patents or United
States or Canadian Licensed Patents as a consequence of
the consummation of the transactions contemplated by
this Agreement.
19
<PAGE>
(vii) Except as set forth in Schedule 4.10(b)(vii) or where not
Material, no consent of any third party will be required for
the use of any United States or Canadian Patent or United
States or Canadian Licensed Patent as a result of the
consummation of the transactions contemplated by this
Agreement.
(viii) Except as set forth in Schedule 4.10(b)(viii), all
maintenance fees applicable to the Patents and the Licensed
Patents applied for after December 12, 1980 have been timely
paid as required by 35 United States Code (S)41(b).
(c) MISCELLANEOUS TECHNOLOGY
(i) Except as set forth in Schedule 4.10(c)(i) or where not
Material, the Technology (excluding the Patents and Buyer's
rights under the Licensed Patents, which are addressed in
Section 4.10(b) above) plus Buyer's rights under the
Technology License Agreement comprise all of Seller's and
Seller's Affiliates' process knowledge necessary for Seller's
and Seller's Affiliates' conduct of the Business, and all
such process knowledge related to "just add water" technology
owned by Seller.
(ii) Except as set forth in Schedule 4.10(c)(ii) or where not
Material, there are no security interests, liens, pledges,
claims, charges or options on Technology (excluding the
Patents and Buyer's rights under the Licensed Patents, which
are addressed in Section 4.10(b) above).
(iii) Except as set forth in Schedule 4.10(c)(iii) or where not
Material:
(A) no claims are currently being asserted against Seller or
Seller's Affiliates by any person regarding the use of
any Technology in the United States or Canada (excluding
the Patents and Buyer's rights under the Licensed
Patents, which are addressed in Section 4.10(b) above),
or challenging or questioning the validity of any
license or agreement relating to the use of any
Technology in the United States or Canada (excluding the
Patents and Buyer's rights under the Licensed Patents,
which are addressed in Section 4.10(b) above);
(B) to the Knowledge of Seller, the use in the United States
and Canada of such Technology (excluding the Patents and
Buyer's rights under the Licensed Patents, which are
addressed in Section 4.10(b) above), respectively, by
Seller or Seller's Affiliates does not infringe on any
United States or Canadian patent of any third party;
(C) no Actions are pending or, to the Knowledge of Seller,
threatened against Seller or Seller's
20
<PAGE>
Affiliates with respect to the use of Technology in the
United States or Canada (excluding the Patents and
Buyer's rights under the Licensed Patents, which are
addressed in Section 4.10(b) above); and
(D) no Action is currently being asserted and, to the
Knowledge of Seller, no conditions exist upon which such
Action could be based, that Seller or any of Seller's
Affiliates is in default or is not in full compliance
with all licenses and other agreements under which it is
using any Technology in the United States or Canada
(excluding the Patents and Buyer's rights under the
Licensed Patents, which are addressed in Section 4.10(b)
above).
(iv) Except as set forth in Schedule 1.16 or where not Material:
(A) there are no licenses, sublicenses, assignments or joint
ownership agreements currently in effect pertaining to
use of any of the Technology in the United States or
Canada (excluding the Patents and Buyer's rights under
the Licensed Patents, which are addressed in Section
4.10(b) above) to which Seller or Seller's Affiliates is
a party, other than any intercompany licenses which will
be terminated as of the Closing Date; and
(B) no third party will have a right to license or acquire
any of the Technology in the United States or Canada
(excluding the Patents and Buyer's rights under the
Licensed Patents, which are addressed in Section 4.10(b)
above) as a consequence of the consummation of the
transactions contemplated by this Agreement.
(v) Except as set forth in Schedule 4.10(c)(v) or where not
Material, no consent of any third party will be required for
the use of any Technology in the United States or Canada
(excluding the Patents and Buyer's rights under the Licensed
Patents, which are addressed in Section 4.10(b) above) as a
result of the consummation of the transactions contemplated
by this Agreement.
(vi) Except as set forth in Schedule 4.10(c)(vi), Seller and
Seller's Affiliates have taken reasonable steps in accordance
with customary industry standards to maintain the
confidentiality of the Technology (excluding the Patents and
Buyer's rights under the Licensed Patents, which are
addressed in Section 4.10(b) above) and to maintain and
protect the Technology (excluding the Patents and Buyer's
rights under the Licensed Patents, which are addressed in
21
<PAGE>
Section 4.10(b) above) in the United States and Canada.
(d) MISCELLANEOUS INTELLECTUAL PROPERTY
(i) Except as set forth in Schedule 4.10(d)(i) or where not
Material, the Intellectual Property (except for the
Trademarks, the Patents, Buyer's rights under the Licensed
Patents, and the Technology, which are addressed in Section
4.10(a) through 4.10(c) above) comprises all of Seller's and
Seller's Affiliates' intellectual property necessary for
Seller's and Seller's Affiliates' conduct of the Business.
(ii) Except as set forth in Schedule 4.10(d)(ii) or where not
Material, Seller or Seller's Affiliates own all the United
States and Canadian Intellectual Property (except for the
Trademarks, the Patents, Buyer's rights under the Licensed
Patents, and the Technology, which are addressed in Section
4.10(a) through 4.10(c) above).
(iii) Except as set forth in Schedule 4.10(d)(iii) or where not
Material:
(A) no claims are currently being asserted against Seller or
Seller's Affiliates by any person regarding the use of
any United States or Canadian Intellectual Property
(except for the Trademarks, the Patents, Buyer's rights
under the Licensed Patents, and the Technology, which
are addressed in Section 4.10(a) through 4.10(c) above),
or challenging or questioning the validity of any
license or agreement relating to the use of any United
States or Canadian Intellectual Property (except for the
Trademarks, the Patents, Buyer's rights under the
Licensed Patents, and the Technology, which are
addressed in Section 4.10(a) through 4.10(c) above);
(B) to the Knowledge of Seller, the use in the United States
and Canada of such United States or Canadian
Intellectual Property (except for the Trademarks, the
Patents, Buyer's rights under the Licensed Patents, and
the Technology, which are addressed in Section 4.10(a)
through 4.10(c) above), respectively, by Seller or
Seller's Affiliates does not infringe on any United
States or Canadian trademark, trade name or service mark
of any third party;
(C) no Actions are pending or, to the Knowledge of Seller,
threatened against Seller or Seller's Affiliates with
respect to the United States and Canadian Intellectual
Property (except for the Trademarks, the Patents,
Buyer's rights under the Licensed Patents, and the
Technology, which
22
<PAGE>
are addressed in Section 4.10(a) through 4.10(c) above);
and
(D) no Action is currently being asserted and, to the
Knowledge of Seller, no conditions exist upon which such
Action could be based, that Seller or any of Seller's
Affiliates is in default or is not in full compliance
with all licenses and other agreements under which it is
using any United States or Canadian Intellectual
Property (except for the Trademarks, the Patents,
Buyer's rights under the Licensed Patents, and the
Technology, which are addressed in Section 4.10(a)
through 4.10(c) above).
(iv) Except as set forth in Schedule 1.16 or where not Material:
(A) there are no licenses, sublicenses, assignments or joint
ownership agreements currently in effect pertaining to
any of the United States or Canadian Intellectual
Property (except for the Trademarks, the Patents,
Buyer's rights under the Licensed Patents, and the
Technology, which are addressed in Section 4.10(a)
through 4.10(c) above) to which Seller or Seller's
Affiliates is a party, other than any intercompany
licenses which will be terminated as of the Closing
Date; and
(B) no third party will have a right to license or acquire
any of the United States or Canadian Intellectual
Property (except for the Trademarks, the Patents,
Buyer's rights under the Licensed Patents, and the
Technology, which are addressed in Section 4.10(a)
through 4.10(c) above) as a consequence of the
consummation of the transactions contemplated by this
Agreement.
(v) Except as set forth in Schedule 4.10(d)(v) or where not
Material, no consent of any third party will be required for
the use of any United States or Canadian Intellectual
Property (except for the Trademarks, the Patents, Buyer's
rights under the Licensed Patents, and the Technology, which
are addressed in Section 4.10(a) through 4.10(c) above) as a
result of the consummation of the transactions contemplated
by this Agreement.
4.11 LITIGATION AND CLAIMS. Except as set forth in Schedule 4.11, there are no
pending Actions relating to the Business with respect to which Seller or
Seller's Affiliates has received service of process or has been threatened
in writing and which:
(a) involve a claim against Seller or Seller's Affiliates of, or which
involve an unspecified amount which is reasonably expected to result
in a liability to Seller or Seller's
23
<PAGE>
Affiliates of, more than one hundred thousand United States dollars
(US$100,000);
(b) seek injunctive relief which would Materially affect Buyer's
acquisition, ownership or operation of the Acquired Assets; or
(c) directly relate to the transactions contemplated by this Agreement.
Except as set forth in Schedule 4.11, there are no:
(d) outstanding judgments, orders, writs, injunctions or decrees of any
Governmental Entity against Seller or Seller's Affiliates which have
or are reasonably expected to have a material adverse effect on the
ability of Seller or Seller's Affiliates to consummate the
transactions contemplated by this Agreement;
(e) Actions pending or, to the Knowledge of Seller, threatened against
Seller or Seller's Affiliates which have or are reasonably expected
to have a material adverse effect on the ability of Seller or
Seller's Affiliates to consummate the transactions contemplated by
this Agreement.
Except as set forth in Schedule 4.11, to the Knowledge of Seller, neither
Seller nor Seller's Affiliates is in Material default under any judgment,
order or decree of any Governmental Entity applicable to the Business or
the Acquired Assets.
4.12 MAJOR CUSTOMERS. To the Knowledge of Seller, since July 1, 1997 Seller
has not received oral or written notice from any of the top 10 customers
of the Business (as measured by sales volume during Seller's fiscal year
ended June 30, 1997) expressing its current intention to terminate 25% or
more of its purchases from the Business.
4.13 ORGANIZATION AND GOOD STANDING. Seller and Seller's Affiliates are
corporations duly organized, validly existing, and in good standing under
the laws of their respective states of incorporation and are duly
authorized to do business therein, with full corporate power to own their
properties and conduct the Business presently being conducted by them,
except where not Material.
4.14 PERMITS. To the Knowledge of Seller, Seller and Seller's Affiliates
possess all licenses, permits and other approvals of Governmental Entities
necessary to enable it to carry on the Business as it is currently
conducted, except where not Material.
4.15 RECENT CONDUCT OF THE BUSINESS. From July 1, 1997, until the date of this
Agreement, Seller and Seller's Affiliates have conducted the Business in
all Material respects in the same manner as it has historically been
conducted by Seller and Seller's Affiliates, and there has been no
Material change in the Business, except for changes attributable to
general economic conditions or relating to the consumer or food products
24
<PAGE>
industries generally or changes resulting from actions of Buyer or the
announcement of the transactions contemplated by this Agreement. Except as
set forth on Schedule 4.15, since June 30, 1997, Seller has not:
(a) permitted or allowed any of the Acquired Assets to be subjected to
any lien other than Permitted Liens;
(b) sold, transferred, leased, licensed, mortgaged or pledged any of the
Acquired Assets other than in the ordinary course of business;
(c) disposed of or permitted to lapse any Material Intellectual Property;
(d) waived any Material right under any Contract or Supply Contract;
(e) failed to perform in any Material respect any of its obligations, or
suffered or permitted to exist and be continuing, any Material
default by it, under any Contract or Supply Contract; or
(f) agreed, whether in writing or otherwise, to take any of the actions
set forth in this Section 4.15, other than as contemplated by this
Agreement.
4.16 RECIPES; INGREDIENTS. The recipes (in their entirety) for the Products
are used exclusively in the Business. After the Closing Date, no
ingredient (including without limitation any flavor) used in the recipes
of the Business will need to be procured from or through Seller or
Seller's Affiliates, except as contemplated by the Transitional Supply
Agreement.
4.17 TAXES. All returns, reports and declarations of every nature required to
be filed with respect to Taxes by or on behalf of Seller (either
separately or as part of a consolidated group) prior to the Closing Date
with respect to the Business have been timely filed (taking into account
any extensions) and such returns, reports and declarations as so filed are
complete and accurate and disclose all Taxes required to be paid for the
periods covered thereby, except for any such failures to file and such
errors which would not be Material.
4.18 TITLE TO ACQUIRED ASSETS. Seller or Seller's Affiliates have and will
convey to Buyer good and marketable title to all of the Acquired Assets
free and clear of any security interests, liens, pledges, claims, charges
or options, except:
(a) as set forth in Schedule 4.18;
(b) mechanics', carriers', workmen's, repairmen's or other like liens
arising or incurred in the ordinary course of business, liens arising
under original purchase price conditional sales contracts and
equipment leases with third parties entered into in the ordinary
course of business, liens for Taxes and other governmental charges
which are not due and payable or which may be paid later without
penalty; and
25
<PAGE>
(c) other imperfections of title, security interests, liens, pledges,
claims, charges or options, if any, which do not, individually or in
the aggregate, materially impair the continued use and operation of
the Acquired Assets to which they relate in the operation of the
Business as currently conducted (collectively, the "Permitted
Liens"); and
provided, however, that this representation and warranty will not apply to
any Intellectual Property.
4.19 VIOLATIONS/BREACHES. Except as set forth in Schedule 4.19, or where not
Material, the execution, delivery and compliance with this Agreement by
Seller and Seller's Affiliates will not, and the consummation by Seller
and Seller's Affiliates of the transactions contemplated by this Agreement
will not, conflict with, or result in any violation of or default under,
or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a benefit under, or result in the creation of
any lien, claim, encumbrance, security interest, option, charge or
restriction of any kind upon any of the Acquired Assets under, or require
any consent, authorization or approval under:
(a) any provision of the certificate of incorporation, code or
regulations, or by-laws of Seller or Seller's Affiliates;
(b) any Contract, Supply Contract or Material permit to which Seller or
any of Seller's Affiliates is a party or by which any of the Acquired
Assets may be bound; or
(c) to the Knowledge of Seller, any judgment, order or decree or any
statute, rule, regulation, order, decree, administrative or judicial
doctrine, or other law (whether foreign, federal, state, provincial,
local or other) binding on or applicable to Seller, Seller's
Affiliates, the Business or any of the Acquired Assets.
26
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants that the following are true and correct as of the
date of this Agreement, and will be true and correct as of the Closing.
5.01 AUTHORITY. Buyer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. All corporate actions and proceedings on the part of Buyer that
are necessary to approve and authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have, or prior to Closing will have, occurred, and, assuming proper
execution and delivery by Seller and Seller's Affiliates, this Agreement
is enforceable against Buyer in accordance with its terms and the
Transaction Documents will be enforceable upon proper execution and
delivery to Seller or Seller's Affiliates.
5.02 AUTHORIZATIONS. No Authorization is needed by Buyer for the execution,
delivery, or performance of this Agreement and the consummation of the
transactions contemplated hereby, except as set forth in Schedule 5.02 or
where the failure to obtain such Authorization will not have a material
adverse effect on the Business, this Agreement or the consummation of the
transactions contemplated hereby.
5.03 FINDER'S FEES AND COMMISSIONS. Neither Buyer nor its Affiliates have any
liability or obligation to pay any fees or commissions to any broker,
finder or other agent with respect to the transactions contemplated by
this Agreement for which Seller of Seller's Affiliates could become liable
or obligated.
5.04 FUNDING. Set forth on Schedule 5.04 are fully executed copies of the
following commitment letters for the financing contemplated by Buyer to
finance the transactions contemplated by this Agreement: (a) the
commitment letter of The Chase Manhattan Bank and Chase Securities Inc.
("Chase") dated November 26, 1997 to provide certain debt facilities (the
"Chase Commitment"); (b) the commitment letter of The National Westminster
Bank PLC and Gleacher Natwest Inc. ("Natwest") dated November 26, 1997 to
provide certain debt facilities (the "Natwest Commitment"); (c) the letter
dated November 7, 1997 from MBW Investors LLC confirming that it will
provide a minimum of ninety-three million seven hundred fifty thousand
United States dollars (US$93,750,000) to complete the transactions
contemplated by this Agreement; and (d) the letters dated November 7, 1997
from each of McCown De Leeuw & Co., Fenway Partners Capital Fund, LP, and
Dartford Partnership LLC. confirming that each of them will provide to MBW
Investors LLC up to each of their pro rata share of up to ninety-three
million seven hundred fifty thousand United States dollars
27
<PAGE>
(US$93,750,000) to complete the transactions contemplated by this
Agreement. As of the date hereof, (e) each of the Chase Commitment and the
Natwest Commitment is in full force and effect and (f) to the Knowledge of
Buyer, there are no facts or circumstances which prevent, or could
reasonably be expected to prevent, the conditions to the financing
outlined in these commitments from being satisfied, or Buyer from
receiving financing pursuant to these commitments or from consummating the
transactions contemplated by this Agreement. Pursuant to the letters
described in Section 5.04(d), Buyer has commitments to have available at
Closing at least ninety-three million seven hundred fifty thousand United
States dollars (US$93,750,000) in equity available to it for use to
satisfy the equity conditions contained in the Chase Commitment and the
Natwest Commitment, and Buyer will use such equity for that purpose.
5.05 LITIGATION AND CLAIMS. Except as set forth in Schedule 5.05, there are no
pending Actions relating to the Business with respect to which Buyer has
received service of process or has been threatened in writing and which:
(a) seek injunctive relief which would Materially affect Buyer's
acquisition, ownership or operation of the Acquired Assets; or (b)
directly relate to the transactions contemplated by this Agreement. Except
as set forth in Schedule 5.05, there are no: (c) outstanding judgments,
orders, writes, injunctions or decrees of any Governmental Entity against
Buyer which have or could reasonably be expected to have a material
adverse effect on the ability of Buyer to consummate the transactions
contemplated by this Agreement; (d) Actions pending or, to the Knowledge
of Buyer, threatened against Buyer which have or could reasonably be
expected to have a material adverse effect on the ability of Buyer to
consummate the transactions contemplated by this Agreement.
5.06 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the state of
Delaware and is duly authorized to do business therein.
5.07 VIOLATIONS/BREACHES. Except as set forth in Schedule 5.07, or where not
Material, the execution, delivery and compliance with this Agreement by
Buyer will not, and the consummation by Buyer of the transactions
contemplated by this Agreement will not, conflict with, or result in any
violation of or default under, or require any consent, authorization or
approval under: (a) any provision of the certificate of incorporation,
code or regulations, or by-laws of Buyer; (b) any contract to which Buyer
is a party; or (c) to the Knowledge of Buyer, any judgment, order or
decree or any statute, law, rule or regulation binding on or applicable to
Buyer.
28
<PAGE>
ARTICLE VI
COVENANTS
6.01 ACCESS. From the date of this Agreement through the Closing, Seller will
permit Buyer, its employees, Chase, Natwest, counsel and accountants to
have reasonable access, during normal business hours and upon reasonable
notice, to the personnel, properties, books and records of Seller and
Seller's Affiliates relating to the transition of the Business to Buyer
(except for formulas and recipes, which will only be provided to a third
party who is mutually agreed upon by Seller and Buyer under the terms of a
confidentiality agreement that is satisfactory to Seller in its sole
discretion); provided, however, that such access must not unreasonably
interfere with the normal operations of Seller, Seller's Affiliates or the
Business.
6.02 ADDITIONAL DOCUMENTS. From time to time after the Closing, Seller, Buyer
and their Affiliates will execute and deliver, without further
consideration, such documents as either Party may reasonably request, in
such form as may be appropriate, if necessary or advisable in connection
with the consummation of the transactions contemplated by this Agreement,
including without limitation assignment and assumption agreements with
respect to the Supply Contracts and certain purchase orders, contracts,
agreements and other obligations described in Section 6.04.
6.03 ADDITIONAL RECORDS. Within a reasonable time (but not more than 45 days)
after Closing, Seller and Seller's Affiliates will provide to Buyer copies
of books, records or other documents, if any, which were not exclusively
related to the Business but which are necessary for the operation of the
Business. Seller and Seller's Affiliates may redact from such copies any
information that does not relate to the Business, and Buyer will have the
right to use such copies only in connection with its operation and
ownership of the Business.
6.04 ASSIGNMENT , ASSUMPTION AND CONSENTS.
(a) Seller and Seller's Affiliates will use commercially reasonable
efforts to obtain the consent of any third party to any purchase
order, contract, agreement or other obligation to the extent
exclusively related to the Business, which consent is required for
the assignment of any such purchase order, contract, agreement or
other obligation from Seller or Seller's Affiliates to Buyer;
provided, however, that Seller and Seller's Affiliates will not agree
to modify any such purchase order, contract, agreement or other
obligation to obtain such consent without the prior written consent
of Buyer. If any such consent is not obtained with respect to a
specific purchase order, contract, agreement or other obligation, or
if an attempted assignment of such purchase order, contract,
29
<PAGE>
agreement or obligation would be ineffective, Seller and Seller's
Affiliates will use commercially reasonable efforts to provide Buyer
with any information in their possession which would assist Buyer in
identifying alternative sources of supply for the goods or services
obtained by Seller or Seller's Affiliates pursuant to such purchase
order, contract, agreement or other obligation. For no additional
consideration, Seller or Seller's Affiliates will sell, convey,
assign, transfer and deliver to Buyer, and Buyer will purchase,
acquire, accept and assume such purchase orders, contracts,
agreements and other obligations for which the required consent has
been obtained: (i) with respect to the Manufacture of Products
pursuant to the Transitional Supply Agreement, after obtaining such
required consent, if obtained, and after the termination or
expiration of the Transitional Supply Agreement and (ii) with respect
to all other such purchase orders, contracts, agreements and other
obligations, after obtaining such required consent, if obtained.
(b) Upon termination or expiration of the Transitional Supply Agreement
and for no additional consideration, Seller or Seller's Affiliates
will sell, convey, assign, transfer and deliver to Buyer, and Buyer
will purchase, acquire, accept and assume all Supply Contracts in
effect as of the termination or expiration of the Transitional Supply
Agreement; provided, however, that if any such Supply Contract would
obligate Buyer to pay scrapping costs that are allocated to Seller
under the Transitional Supply Agreement, Seller will remain
responsible for such costs as set forth in the Transitional Supply
Agreement.
6.05 BDF COMMITMENTS. Seller will notify its trade customers by December 31,
1997 that no BDF Commitments with respect to the Business will be honored
for performance that occurs after January 31, 1998, except for those where
a trade customer has irrevocably committed to such performance prior to
the date of the notification. An estimate of such BDF Commitments is set
forth in Schedule 6.05.
6.06 BULK TRANSFER LAWS. Buyer waives compliance by Seller and its Affiliates
with any laws relating to bulk transfers and bulk sales applicable to the
transactions contemplated by this Agreement. Seller will indemnify Buyer
from any third party Actions arising out of or related to the failure of
Seller and Seller's Affiliates to comply with such bulk transfer and bulk
sales laws.
6.07 CONFIDENTIALITY.
(a) Except to the extent contrary to the terms of this Agreement, the
terms of the Confidentiality Agreement dated August 11, 1997 between
Seller and Buyer (the "Confidentiality Agreement") are hereby
incorporated by
30
<PAGE>
reference and will continue in full force and effect until the
Closing, at which time such Confidentiality Agreement will terminate
only in respect of that portion of the Evaluation Material (as defined
in the Confidentiality Agreement) which relates to the Business. If
this Agreement is, for any reason, terminated prior to the Closing,
the Confidentiality Agreement will continue in full force and effect
in accordance with its terms. Under all circumstances, the
Confidentiality Agreement will continue in full force and effect with
respect to that portion of the Evaluation Material not related to the
Business.
(b) Except as otherwise expressly permitted by this Agreement, Seller,
Buyer and their Affiliates will not disclose the terms of the
Transaction Documents to any Person other than such directors,
officers, shareholders, employees and attorneys of Seller, Buyer,
their Affiliates and their financial advisors, or such other Persons
acting on behalf of or in the interests of Seller, Buyer and their
Affiliates to whom disclosure of the terms of this Agreement is
necessary for the consummation of the transactions contemplated hereby
or the operation of the Business. Any disclosure permitted by this
Section 6.07(b) will be made on a confidential basis.
(c) Notwithstanding anything to the contrary in this Agreement, Seller,
Buyer and their Affiliates may disclose the terms of this Agreement to
any Person, whether by providing such Person with photocopies of all
or portions thereof or otherwise: (i) to the extent required by
applicable laws, rules or regulations; (ii) as may be required in the
reasonable opinion of Seller, Buyer, or their Affiliates, as the case
may be, in connection with the consummation of the transactions
contemplated by this Agreement; (iii) as may be required, in the
reasonable opinion of Seller, Buyer, or their Affiliates, as the case
may be, in the defense of Seller, Buyer, or their Affiliates in any
Action; or (iv) as may be required in connection with the Chase
Commitment and the Natwest Commitment or as may be legally required,
in the reasonable opinion of Buyer's counsel, in any filings under the
Securities Act of 1933 or the Securities Exchange Act of 1934.
(d) If this Agreement is, for any reason, terminated prior to the Closing,
Buyer will promptly return to Seller all copies of Evaluation Material
in its possession or in the possession of any Person acting on behalf
of or in the interests of Buyer or its Affiliates; provided, however,
that the portion of the Evaluation Material which consists of
analyses, compilations, studies or other documents prepared by Buyer
or its Affiliates or any Person acting on their behalf or in their
interest will be destroyed and such destruction will be confirmed in
writing to Seller.
31
<PAGE>
(e) Any press releases, public announcements or similar publicity with
respect to this Agreement or the transactions contemplated hereby must
be approved by both Seller and Buyer in advance, provided that such
approval may not be unreasonably withheld or delayed, and further
provided that nothing herein will prevent either Seller or Buyer, upon
reasonable notice to the other, from making public announcements to
comply with the requirements of law or any listing agreement with any
securities exchange or to inform their respective employees of the
transactions contemplated by this Agreement.
(f) Subject to the principles set forth in Section 6.07(c)(i) (except for
applicable laws, rules or regulations related to the Securities
Exchange Commission) and Section 6.07(c)(iii), Buyer will not
disclose, and will cause its employees, counsel and accountants not to
disclose, to any Person, any information relating to the cost
structure of the Seller or the Business as conducted by the Seller
that is made available to Buyer, its employees, counsel or accountants
pursuant to Section 6.13(f) or 6.13(j), except to the extent such
information is otherwise made available to Buyer, its employees,
counsel or accountants pursuant to any other subsection of Section
6.13. Buyer will be responsible for any breach of this Section 6.07(f)
by any of Buyer's employees, counsel or accountants.
6.08 COOPERATION IN LITIGATION. For a period of 3 years after the Effective
Time, Seller and Buyer will, in the defense of any third-party Action
relating to the Business, make available during normal business hours, but
without unreasonably disrupting their respective businesses, all personnel
and records of the Business reasonably necessary to permit the effective
defense or investigation of such Action. If business information other
than that pertaining to the Business is contained in such records, Seller
and Buyer will either agree that such information may be omitted or
redacted by the producing Party, or will enter into appropriate secrecy
commitments to protect such information.
6.09 COOPERATION IN TAX MATTERS. Seller, Seller's Affiliates and Buyer will
make available during normal business hours, but without unreasonably
disrupting their respective businesses, all personnel and records of the
Business reasonably necessary in connection with: the filing of any Tax
return, amended return or claim for refund; determining a liability for
Taxes or a right to refund for Taxes; or conducting an audit or other
proceeding in respect of Taxes.
6.10 COOPERATION OF THIRD PERSONS. Where the cooperation of third Persons such
as insurers or trustees would be necessary in order for a Party to
completely fulfill its obligations under the Transaction Documents, such
Party will use all commercially
32
<PAGE>
reasonable efforts to cause such third Persons to provide such
cooperation.
6.11 COUPONS. Seller will remain liable for distribution and redemption of all
coupons set forth in Schedule 1.05(k), whether they are distributed before
or after the Closing Date.
6.12 COVENANT NOT TO COMPETE. For a period of 3 years after the Closing Date
Seller will not for itself or for any of its Affiliates engage in any
enterprise engaged in the business of manufacturing, marketing or selling
Baking Mixes anywhere in the United States, Puerto Rico, Canada or Mexico
(the "Restricted Business"); provided, however, that notwithstanding the
foregoing, Seller and its Affiliates may: (a) hereafter purchase, or
otherwise become affiliated with or participate in, any enterprise engaged
in the Restricted Business (i) if less than 25% of the aggregate gross
revenues of such enterprise for its most recently-completed fiscal year
were derived from the Restricted Business or (ii) if more than 25% of the
aggregate gross revenues of such enterprise for its most recently-
completed fiscal year were derived from the Restricted Business, so long
as Seller uses commercially reasonable efforts to divest, as soon as
reasonably practicable, a portion of its interest in such enterprise
relating to the Restricted Business such that the 25% gross revenues limit
set forth above would not be exceeded after giving effect to such
divestiture; and (b) engage in any Restricted Business (other than the
Business) currently conducted by Seller or any Affiliate.
6.13 DELIVERY OF FINANCIAL INFORMATION. Upon reasonable request and
reasonable notice, Seller will provide or cause to be provided to Buyer:
(a) an audited financial statement of direct revenues, cost of products
sold, gross margin, other direct expenses (including marketing,
promotional, selling, administrative and other expenses) and excess
of direct revenues over direct expenses for the Business for the 6
month period ended December 31, 1997;
(b) an audited statement of the book value of Equipment and intangibles
having book value being sold to Buyer pursuant to this Agreement, in
accordance with Seller's historical practices as of June 30, 1996;
(c) unaudited financial statements of direct revenues, cost of products
sold, gross margin, other direct expenses (including marketing,
promotional, selling, administrative and other expenses) and excess
of direct revenues over direct expenses for the Business for Seller's
fiscal quarters ended September 30, 1996; December 31, 1996; March
31, 1997; June 30, 1997; and December 31, 1997;
(d) unaudited financial statements of direct revenues, cost of products
sold, gross margin, other direct expenses (including marketing,
promotional, selling, administrative
33
<PAGE>
and other expenses) and excess of direct revenues over direct expenses
for the Business for Seller's fiscal years ended June 30, 1993 and
June 30, 1994; and
(e) an unaudited pro-rata allocation of the portion of the Business'
direct revenues, cost of products sold, gross margin, other direct
expenses (including marketing, promotional, selling, administrative
and other expenses) and excess of direct revenues over direct expenses
attributable to the period from January 1, 1998 through the Closing
Date, based on actual shipments as of the Closing Date.
In addition Seller will, upon reasonable request and reasonable notice, use its
commercially reasonable efforts to:
(f) for a period of up to 6 months after the Closing Date, cause Deloitte
& Touche to permit Buyer, it employees, counsel and accountants to
have reasonable access, during normal business hours and upon
reasonable notice, to Deloitte & Touche personnel familiar with
Deloitte & Touche's audits of the Financial Information and the
information to be provided in accordance with Sections 6.13(a) and (b)
above and, if applicable, Section 6.13(i) below, and the Deloitte &
Touche work papers with respect to such information;
(g) cause Deloitte & Touche to cooperate with Buyer in providing
appropriate consents and comfort letters with respect to the Financial
Information and the information to be provided in accordance with
Sections 6.13(a) and (b) above and, if applicable, Section 6.13(i)
below;
(h) for a reasonable period after the Closing Date, provide Deloitte &
Touche with Seller's customary management representation letters and
other information to induce Deloitte & Touche provide the information
to be provided in accordance with Sections 6.13(a) and (b) above and
the cooperation described in Sections 6.13(g) above and, if
applicable, Section 6.13(i) below;
(i) provide or cause to be provided to Buyer fully-allocated income
statements (through and including the excess of revenues over expenses
after provision for income taxes) for the periods described in
Sections 1.22(a) and (b) and Sections 6.13(a), (c), (d) and (e) at a
reasonable level of detail, which statements will be audited to the
extent the statements for the corresponding periods were or were to be
audited pursuant to this Agreement; and
(j) for a period of up to 6 months after the Closing Date, permit Buyer,
its employees, counsel and accountants to have reasonable access,
during normal business hours and upon reasonable notice, to personnel
familiar with the operation of the Business and to any records
pertaining to the Business that were not provided to Buyer pursuant to
this Agreement, for the purpose of answering or responding to
reasonable and specific requests by Buyer pertaining to
34
<PAGE>
the operation or finances of the Business prior to the Closing Date.
6.14 EFFORTS TO CLOSE.
(a) Seller, Seller's Affiliates and Buyer will use all commercially
reasonable efforts to cause all of the conditions, as specified in
Articles VII and VIII of this Agreement, to the obligations of the
others to consummate the transactions contemplated hereby to be met
as soon as practicable after the date of this Agreement.
(b) Buyer will attempt to ensure that it has the funds necessary for
Closing on or prior to January 16, 1998 including without limitation:
(i) by using its best efforts to ensure that it has at least ninety-
three million seven hundred fifty thousand United States dollars
(US$93,750,000) in equity (or such lesser amount as may be acceptable
under the Chase Commitment and the Natwest Commitment); (ii) by using
its best efforts to ensure it receives the proceeds of the debt
facilities pursuant to the Chase Commitment or the Natwest
Commitment; (iii) by using its best efforts to satisfy any and all
conditions to closing the financing contemplated by the Chase
Commitment and the Natwest Commitment and (iv) by using commercially
reasonable efforts to obtain and acquire the proceeds of equivalent
financing if the financing contemplated by the Chase Commitment and
the Natwest Commitment becomes unavailable.
(c) Seller and Buyer will comply fully with all applicable notification,
reporting and other requirements of the HSR Act. Seller and Buyer,
within 10 Business Days after the date of this Agreement, will file
the required notifications with the FTC and the Antitrust Division of
the DOJ pursuant to and in compliance with the HSR Act. Seller and
Buyer will as soon as practicable file any additional information
requested by any Governmental Entity.
(d) Seller and Buyer will each use commercially reasonable efforts to
obtain, as soon as practicable, the Authorizations that may be or
become necessary for the performance of its obligations under this
Agreement and the consummation of the transactions contemplated
hereby and will cooperate fully with each other in promptly seeking
to obtain such Authorizations.
(e) Seller and Buyer will promptly take any and all of the following
actions to the extent required to eliminate any concerns on the part
of any Governmental Entity regarding the legality under any Antitrust
Law of Buyer's purchase of the Business: (i) use commercially
reasonable efforts to prevent the entry in an Action brought under
any Antitrust Law of any preliminary or permanent injunction or other
order that would prevent, delay or make unlawful the
35
<PAGE>
consummation of the transactions contemplated by this Agreement; (ii)
in the event that such an injunction or order has been issued,
promptly take any and all commercially reasonable actions necessary
to vacate, modify or suspend such injunction or order so as to permit
the consummation of the transactions contemplated by this Agreement
as nearly as possible on the schedule contemplated by this Agreement,
including without limitation appeal and the posting of a bond; and
(iii) promptly take all other commercially reasonable actions
necessary to avoid or eliminate each and every impediment under any
Antitrust Law to the consummation of the transactions contemplated by
this Agreement. The obligations contained in this Section 6.14 are in
addition to and not in limitation of any other obligations of Seller
and Buyer under this Agreement.
6.15 EMPLOYEES. No employees of Seller or Seller's Affiliates will be
transferred to Buyer pursuant to the transactions contemplated by this
Agreement.
6.16 EXPENSES. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated by this Agreement are
consummated, Seller, Seller's Affiliates and Buyer will each bear its own
costs and expenses, except that (a) all Taxes imposed as a result of this
Agreement or the transactions contemplated hereby (except Taxes on the
income of Seller or Seller's Affiliates and any expenses allocated
pursuant to Section 6.17) will be shared equally by Seller and Buyer, and
(b) Buyer will pay all expenses associated with the preparation of the
Financial Information and the information to be provided pursuant to
Section 6.13.
6.17 INTELLECTUAL PROPERTY ASSIGNMENT/RECORDATION/MAINTENANCE. For purposes of
this Section 6.17, the term "expenses" will include without limitation
expenses of drafting, notarization, authentication, legalization and/or
consularization.
(a) Seller will prepare and will pay all expenses (whether incurred
before or after the Effective Time) involved in preparing the
Trademark and Patent assignment documents, by country, and obtaining
appropriate signatures from Seller's representatives. Buyer will be
responsible, and will pay all expenses (whether incurred before or
after the Effective Time) involved in, obtaining appropriate
signatures from Buyer's representatives on and recording, at Buyer's
sole discretion, such Trademark and Patent assignment documents with
the appropriate Governmental Entities.
(b) Seller will pay all expenses related to the maintenance of the
Trademarks and Patents for 6 months after the Closing Date, and Buyer
will reimburse Seller for such expenses.
36
<PAGE>
After this 6 month period, Buyer will be solely responsible for
maintenance of the Trademarks and Patents.
(c) Seller will pay all bills for Trademark and Patent expenses which are
received after the Effective Time but which relate to work performed
for the benefit of Seller before the Effective Time or to costs to
maintain the Trademarks and Patents up to the Effective Time. The
phrase "work performed for the benefit of Seller" will not include
any work, whether performed before or after the Effective Time,
related to the transfer of the Trademarks and the Contracts related
thereto to Buyer, other than that specifically assumed by Seller
pursuant to Section 6.17(a) above.
6.18 MODIFIED/REPLACEMENT AGREEMENTS PERTAINING TO THE MANUFACTURE OF PRODUCTS.
Buyer acknowledges and agrees that Seller or Seller's Affiliates, after
the execution of this Agreement, may amend or modify any Supply Contracts
and/or other purchase orders, contracts, agreements or other obligations
related to the Manufacture of Products that were in effect as of the date
of execution of this Agreement, or may enter into new Supply Contracts
and/or other purchase orders, contracts, agreements or other obligations,
all as necessary or advisable to fulfill Seller's or Seller's Affiliates'
obligations pursuant to the Transitional Supply Agreement.
6.19 NO SHOP. From the date of this Agreement until the earlier of (a) the
termination of this Agreement pursuant to Section 10.01 and (b) January
16, 1998 Seller will not, and will cause its subsidiaries, Affiliates,
agents, representatives, and any other person acting on behalf of Seller
not to, directly or indirectly solicit, negotiate with respect to,
actively facilitate or accept any offers for the purchase or sale of or
otherwise transfer the Business or the Acquired Assets (other than in the
ordinary course of business), or otherwise effect any transaction
inconsistent with the transactions contemplated by this Agreement.
6.20 OPERATION OF THE BUSINESS PRIOR TO CLOSING. Except for actions taken
pursuant to the prior written consent of Buyer, Seller and Seller's
Affiliates from the date of this Agreement until the Closing will:
(a) conduct the Business in the ordinary course, including without
limitation repairing or replacing any Equipment that is currently
used in the Business that is damaged or that is destroyed due to an
event that is customarily insured against;
(b) not transfer any of the Acquired Assets, other than in the ordinary
course of business;
(c) continue to meet the contractual obligations of, and pay obligations
relating to, the Business as they mature in the ordinary course; and
37
<PAGE>
(d) maintain in the ordinary course the business relations of Seller and
Seller's Affiliates with their suppliers, business customers and
others with whom they have business relations in connection with the
Business.
From the date of this Agreement until the Closing, Seller will, within 15
Business Days after the end of each calendar month, provide Buyer with financial
information concerning the Business in the United States in a form consistent
with that shown in Schedule 6.20.
6.21 POSSESSION OF ACQUIRED ASSETS.
(a) All Acquired Assets (except Equipment described in Section 15.02 of
the Transitional Supply Agreement and those Books and Records and
other documents described in Section 15.01 of the Transitional Supply
Agreement) will be moved from Seller's or Seller's Affiliates'
premises, in a manner so as to not unreasonably interfere with
Seller's or Seller's Affiliates' operations and to minimize damage to
such premises, at Buyer's expense within 14 calendar days after
Closing.
(b) All Books and Records and other documents described in Section 15.01
of the Transitional Supply Agreement will be moved from Seller's or
Seller's Affiliates' premises, in a manner so as to not unreasonably
interfere with Seller's or Seller's Affiliates' operations and to
minimize damage to such premises, at Buyer's expense within 60
calendar days after the expiration of the Transitional Supply
Agreement.
(c) On a schedule mutually agreed to in writing by Seller and Buyer, at
Seller's expense, Seller will, or will arrange for a contractor
mutually agreed to by Buyer and Seller to, disassemble and prepare
for shipment (including crating where appropriate) the Equipment
described in Section 15.02 of the Transitional Supply Agreement. In
addition, Seller will reimburse Buyer for the first ten million
United States dollars (US$10,000,000) of costs associated with the
shipment of such Equipment to, and the installation of such Equipment
at, a facility designated by Buyer, provided arrangements for such
shipment and installation are made by Buyer and are reasonably
acceptable to Seller.
6.22 PRODUCT RETURNS. Prior to March 31, 1998, Seller and Seller's Affiliates
will follow their normal practice of not accepting any returns, but
instead handling potential returns liability with a prepayment to trade
customers. Prior to April 1, 1998, Buyer will establish a program with
trade customers with respect to product returns, and will be solely
responsible for making the arrangements for, and paying the costs of, such
program. In no event will Seller or Seller's Affiliates be required to
accept product returns at any location including without limitation
Seller's Affiliates facility in Jackson, Tennessee nor will Buyer accept
any product returns for which Seller or
38
<PAGE>
Seller's Affiliates will be liable. No Party will undertake any action to
encourage any product returns..
6.23 SUPPLEMENTS TO SCHEDULES. From time to time prior to the Closing, Seller
may deliver to the Buyer information supplementing or amending the
representations and warranties, and the disclosures made in connection
therewith in the Schedules. Such supplemental information will identify
the specific item or event to be disclosed, and set forth Seller's good
faith estimate of the adverse effect, if any, that such item or event will
have on the Business. Any representation or warranty of Seller will be
deemed to have been amended accordingly; provided, however, that no
representation or warranty will be deemed to have been amended with
respect to any Material supplement or amendment with respect to which
Buyer has, within 5 Business Days of receipt of such supplement or
amendment notified Seller of its desire to modify the terms of this
Agreement as a result of such supplement or amendment, unless and until
the parties have negotiated in good faith an appropriate modification to
the terms of this Agreement to reflect such supplement or amendment.
6.24 TAX RECORDS. Buyer will preserve and keep all Books and Records received
from Seller or Seller's Affiliates relating to Tax matters of the Business
("Tax Records") until the expiration of the appropriate statutes of
limitations with respect to such Tax matters, or 7 years, whichever is
longer. Until such expiration, representatives of Seller or Seller's
Affiliates will, upon reasonable notice, have access to such Tax Records
during normal business hours to, examine, inspect and copy them. After
such expiration, but prior to disposal, Buyer will inform Seller of its
intent to dispose of any Tax Records, and will provide Seller and Seller's
Affiliates with a reasonable opportunity to obtain such Tax Records as
they deem appropriate.
6.25 USE OF TECHNOLOGY. To the extent that Buyer is operating the Business
subsequent to the Closing Date using the same know-how, patented and
unpatented formulas (including without limitation current and discontinued
flavors and products, recipes and mixing instructions), improvements,
trade secrets, research and results thereof, inventions, data, methods,
processes, instructions, drawings, and specifications that Seller and
Seller's Affiliates used in operating the Business prior to the Closing
Date, Seller hereby waives any right, remedy or cause of action it might
have against Buyer arising out of or related to such use (other than
rights, remedies or causes of action that arise prior to the Closing
Date), regardless of whether such know-how, patented and unpatented
formulas (including without limitation current and discontinued flavors
and products, recipes and mixing instructions), improvements, trade
secrets, research and results thereof, inventions, data, methods,
39
<PAGE>
processes, instructions, drawings, and specifications constitute
Technology transferred to Buyer under this Agreement.
6.26 USE OF SELLER'S NAME OR REPUTATION/PACKAGING MATERIALS. Buyer will not
operate the Business utilizing, based on or taking advantage of the name,
reputation or corporate goodwill of Seller or Seller's Affiliates. Buyer
will cease use of packaging, advertising, sales and promotional materials
bearing any of Seller's or its Affiliates' corporate names, product
identification numbers or consumer information telephone numbers beginning
3 months after the Closing, or such shorter period if limited by the
requirements of any law or regulation; provided, however, that buyer may
continue to use the existing UPC codes for the Products until Buyer has
been able to obtain new UPC codes for such Products, or 9 months after
Closing, whichever is earlier. Buyer will maintain quality standards for
products of the Business at least equal to those maintained by Seller or
its Affiliates at the time of the Closing for so long as Buyer continues
to use any packaging, advertising, sales or promotional materials bearing
the corporate names, product identification numbers or consumer
information telephone numbers of Seller or its Affiliates.
40
<PAGE>
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
All obligations of Seller and Seller's Affiliates to sell the Acquired Assets,
to transfer the Business, and to perform any other action at the Closing are
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions, any of which may be waived by Seller in whole or in part without
written or oral notice of such waiver to Buyer.
7.01 AUTHORIZATIONS/WAITING PERIODS. All Authorizations necessary for the
Closing will have been obtained, except where failure to obtain such
Authorizations will not have a material adverse effect on the Business,
this Agreement or the consummation of the transactions contemplated
hereby.
7.02 NO INJUNCTION/ORDER. No preliminary or permanent injunction or other
order will have been issued that would make unlawful the consummation of
the transactions contemplated by this Agreement.
7.03 PERFORMANCE OF BUYER'S OBLIGATIONS. Buyer will have fully performed all
commitments required by this Agreement to be performed prior to Closing
(except for those which, in the aggregate, will not have a material
adverse effect on this Agreement or the consummation of the transactions
contemplated hereby) and will have tendered at the Closing the Purchase
Price and the documents required in Section 3.01(b) and (c).
7.04 BUYER'S REPRESENTATIONS AND WARRANTIES TRUE. All representations and
warranties of Buyer contained in this Agreement will be true and correct
in all material respects (except that all representations and warranties
qualified as to materiality will be true in all respects) as of the
Closing, except for those which, in the aggregate, will not have a
material adverse effect on this Agreement or the consummation of the
transactions contemplated hereby.
41
<PAGE>
ARTICLE VIII
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
All obligations of Buyer to purchase the Acquired Assets, to assume the Assumed
Liabilities, and to perform any other action at the Closing are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
any of which may be waived by Buyer in whole or in part without written or oral
notice of such waiver to Seller.
8.01 AUTHORIZATIONS/WAITING PERIODS. All Authorizations necessary for the
Closing will have been obtained, except where failure to obtain such
Authorizations will not have a material adverse effect on this Agreement
or the consummation of the transactions contemplated hereby.
8.02 NO INJUNCTION/ORDER. No preliminary or permanent injunction or other
order will have been issued that would make unlawful the consummation of
the transactions contemplated by this Agreement.
8.03 PERFORMANCE OF SELLER'S OBLIGATIONS. Seller and Seller's Affiliates will
have fully performed all commitments required by this Agreement to be
performed prior to Closing, except for those which, in the aggregate are
not Material, and will have tendered at the Closing the documents required
in Section 3.01(a) and (c).
8.04 RECEIPT OF FINANCING. Buyer will have received the proceeds of the debt
facilities pursuant to the Chase Commitment or the Natwest Commitment, or
any replacement financing; provided, however, that this condition to
Closing will not apply if Buyer has breached the covenant contained in
Section 6.14(b).
8.05 SELLER'S REPRESENTATIONS AND WARRANTIES TRUE. All representations and
warranties of Seller contained in this Agreement will be true and correct
in all material respects (except that all representations and warranties
qualified as to materiality will be true in all respects) as of the
Closing, except for those which, in the aggregate, are not Material.
42
<PAGE>
ARTICLE IX
INDEMNIFICATION AND ARBITRATION
9.01 INDEMNIFICATION BY SELLER.
(a) Subject to the terms and conditions of this Agreement, Seller will
defend, indemnify and hold Buyer and its Affiliates harmless from and
against: (i) all claims, losses, liabilities, damages, costs and
expenses (including without limitation reasonable fees and expenses
of attorneys incurred in investigation or defense of any third-party
Action, but excluding fees, costs and expenses of attorneys,
accountants, consultants or other experts or witnesses incurred in
the investigation or prosecution of any non third-party Action)
related to (A) an Excluded Liability or (B) any breach of a
representation and warranty or covenant of Seller or Seller's
Affiliates in this Agreement and (ii) all costs and expenses of Buyer
(including without limitation reasonable fees and expenses of
attorneys) incurred in connection with the successful enforcement of
any rights of Buyer under the indemnity provided in this Section
9.01.
(b) Promptly after receipt by Buyer of notice of any third-party Action
in respect of which indemnity may be sought against Seller hereunder
(for purposes of this Section 9.01, a "Buyer's Assertion"), Buyer
will notify Seller in writing of the Buyer's Assertion, but the
failure to so notify Seller will not relieve Seller of any liability
it may have to Buyer, except to the extent Seller has suffered actual
prejudice thereby. Seller will be entitled to participate in the
defense of such Buyer's Assertion. If Seller, by written notice to
Buyer within 30 days after receipt by Seller of notice of such
Buyer's Assertion, acknowledges its responsibility to indemnify Buyer
based on the facts alleged in the third-party Action and the Buyer's
Assertion and if Seller elects to do so, Seller will also be entitled
to assume the defense of such Buyer's Assertion, at its own expense,
with counsel chosen by it which will be reasonably satisfactory to
Buyer. With respect to any such Buyer's Assertion, Buyer will
promptly provide Seller with: (i) notice and copies of any documents
served upon Buyer; and (ii) all reasonable cooperation which Seller
deems necessary to defend such Buyer's Assertion, including without
limitation providing Seller and its outside attorneys access to any
potentially-relevant documents, information, or individuals within
the control of Buyer, other than any privileged documents. If
business information of Buyer other than that pertaining to the
Business is contained in such documents or information, Seller and
Buyer will enter into appropriate secrecy commitments to protect such
documents or information. Notwithstanding that Seller may have
elected as provided above to assume the defense of any Buyer's
Assertion, Buyer
43
<PAGE>
will have the right to participate in the investigation and defense
thereof, with separate counsel chosen by Buyer, but in such event the
fees and expenses of Buyer (above those which would otherwise have
been incurred) and such separate counsel will be paid by Buyer.
(c) Notwithstanding anything in this Section 9.01 to the contrary: (i)
Seller will have no obligation with respect to any Buyer's Assertion
if, in connection therewith, Buyer, without the written consent of
Seller, settles or compromises any Action or consents to the entry of
any judgment (provided Seller has not rejected the Buyer's Assertion
or failed to respond within the time allotted under Section 9.01(b)
above to proper notice of the Buyer's Assertion, in which case
Seller's obligation will be determined by mutual agreement between
the Parties or under the procedures described in Section 9.03 below);
and (ii) Seller will not, without the written consent of Buyer with
respect to any Buyer's Assertion: (A) settle or compromise any Action
or consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff
to Buyer of a duly executed written release of Buyer from all
liability in respect of such Action, which release will be reasonably
satisfactory in form and substance to counsel for Buyer; or (B)
settle or compromise any Action in any manner that, in the reasonable
judgment of Buyer or its counsel, may materially adversely affect
Buyer, it being acknowledged and agreed that any settlement or
compromise pursuant to which the sole relief is monetary damages that
are paid in full by Seller will not be deemed to materially adversely
affect Buyer.
(d) Upon the payment of any settlement or judgment pursuant to this
Section 9.01 with respect to any Buyer's Assertion, Seller will be
subrogated to all rights and remedies of Buyer against any third
party in respect of such Buyer's Assertion to the extent of the
amount so paid by Seller.
(e) The indemnity provided for by this Section 9.01 will be Buyer's
exclusive source of recovery against Seller with respect to matters
covered hereby.
44
<PAGE>
9.02 INDEMNIFICATION BY BUYER.
(a) Subject to the terms and conditions of this Agreement, Buyer will
defend, indemnify and hold Seller and its Affiliates harmless from
and against: (i) all claims, losses, liabilities, damages, costs and
expenses (including without limitation reasonable fees and expenses
of attorneys incurred in investigation or defense of any third-party
Action, but excluding fees, costs and expenses of attorneys,
accountants, consultants or other experts or witnesses incurred in
the investigation or prosecution of any non third-party Action)
related to (A) an Assumed Liability; (B) any Buyer financing
(including without limitation any financing provided pursuant to or
under the Chase Commitment or the Natwest Commitment or any
replacement financing); (C) any public or private offering of debt or
equity; or (D) any breach of a representation and warranty or
covenant of Buyer in this Agreement and (ii) all costs and expenses
of Seller and its Affiliates (including without limitation reasonable
fees and expenses of attorneys) incurred in connection with the
successful enforcement of any rights of Seller or its Affiliates
under the indemnity provided in this Section 9.02.
(b) Promptly after receipt by Seller or its Affiliates of notice of any
third-party Action in respect of which indemnity may be sought
against Buyer hereunder (for purposes of this Section 9.02, a
"Seller's Assertion"), Seller will notify Buyer in writing of the
Seller's Assertion, but the failure to so notify Buyer will not
relieve Buyer of any liability it may have to Seller or its
Affiliates, except to the extent Buyer has suffered actual prejudice
thereby. Buyer will be entitled to participate in the defense of such
Seller's Assertion. If Buyer, by written notice to Seller within 30
days after receipt by Buyer of notice of such Seller's Assertion,
acknowledges its responsibility to indemnify Seller based on the
facts alleged in the third-party Action and the Seller's Assertion
and if Buyer elects to do so, Buyer will also be entitled to assume
the defense of such Seller's Assertion, at its own expense, with
counsel chosen by it which will be reasonably satisfactory to Seller.
With respect to any such Seller's Assertion, Seller will promptly
provide Buyer with: (i) notice and copies of any documents served
upon Seller or its Affiliates; and (ii) all reasonable cooperation
which Buyer deems necessary to defend such Seller's Assertion,
including without limitation providing Buyer and its outside
attorneys access to any potentially-relevant documents, information,
or individuals within the control of Seller or Seller's Affiliates,
other than any privileged documents. If business information of
Seller or its Affiliates other than that pertaining to the Business
is contained in such documents or information, Seller and Buyer will
enter into appropriate secrecy commitments to
45
<PAGE>
protect such documents or information. Notwithstanding that Buyer may
have elected as provided above to assume the defense of any Seller's
Assertion, Seller will have the right to participate in the
investigation and defense thereof, with separate counsel chosen by
Seller, but in such event the fees and expenses of Seller (above those
which would otherwise have been incurred) and such separate counsel
will be paid by Seller.
(c) Notwithstanding anything in this Section 9.02 to the contrary: (i)
Buyer will have no obligation with respect to any Seller's Assertion
if, in connection therewith, Seller or its Affiliates, without the
written consent of Buyer, settle or compromise any Action or consent
to the entry of any judgment (provided Buyer has not rejected the
Seller's Assertion or failed to respond within the time allotted under
Section 9.02(b) above to proper notice of the Seller's Assertion, in
which case Buyer's obligation will be determined by mutual agreement
between the Parties or under the procedures described in Section 9.03
below); and (ii) Buyer will not, without the written consent of Seller
with respect to any Seller's Assertion: (A) settle or compromise any
Action or consent to the entry of any judgment which does not include
as an unconditional term thereof the delivery by the claimant or
plaintiff to Seller of a duly executed written release of Seller and
its Affiliates from all liability in respect of such Action, which
release will be reasonably satisfactory in form and substance to
counsel for Seller; or (B) settle or compromise any Action in any
manner that, in the reasonable judgment of Seller or its Affiliates or
their counsel, may materially adversely affect Seller or its
Affiliates, it being acknowledged and agreed that any settlement or
compromise pursuant to which the sole relief is monetary damages that
are paid in full by Buyer will not be deemed to materially adversely
affect Seller.
(d) Upon the payment of any settlement or judgment pursuant to this
Section 9.02 with respect to any Seller's Assertion, Buyer will be
subrogated to all rights and remedies of Seller and its Affiliates
against any third party in respect of such Seller's Assertion to the
extent of the amount so paid by Buyer.
(e) The indemnity provided for by this Section 9.02 will be Seller's and
its Affiliates' exclusive source of recovery against Buyer with
respect to matters covered hereby.
9.03 DISPUTE RESOLUTION.
(a) Any Action asserted by Seller or its Affiliates against Buyer or by
Buyer against Seller or Seller's Affiliates (a "Claim") arising out of
or related to the Transaction Documents, including without limitation
any Claim for indemnification pursuant to Article IX hereof or any
issue as to whether or not a Claim is arbitrable, will be
46
<PAGE>
resolved pursuant to the procedures described in this Section 9.03.
(b) Should any Claim arise, Seller and Buyer will first attempt to resolve
such Claim by entering into good faith negotiations by or among their
appropriate employees or officers. Such negotiations will commence as
soon as practicable after Seller and Buyer have both received notice
of such Claim, but no later than 10 days after such receipt, and will
terminate 30 calendar days after such commencement. During
negotiations, Seller and Buyer will not have the right to any
discovery unless agreed to by both Seller and Buyer.
(c) Any Claim which has not been resolved pursuant to Section 9.03(b) of
this Agreement will be referred to good faith negotiations by or among
one or more Vice Presidents of Seller and Buyer. Such negotiations
will commence as soon as practicable after termination of the
negotiations described in Section 9.03(b), but not later than 10
business days thereafter, and will terminate 30 calendar days after
such commencement. During the negotiations, Seller and Buyer will not
have the right to any discovery unless agreed to by both Seller and
Buyer.
(d) Any Claim which has not been resolved pursuant to Section 9.03(c) of
this Agreement will be determined by arbitration. The arbitration will
be conducted by three arbitrators, one of whom will be appointed by
Seller, one of whom will be appointed by Buyer, and the third who will
be chosen by the first two arbitrators. The arbitration will be held
in a mutually agreed to location in Ohio and will be conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), except that the rules set forth in
this Section 9.03(d) will govern such arbitration to the extent they
conflict with the rules of the AAA. Costs of the arbitration will be
shared equally by Seller and Buyer, except Seller and Buyer will each
pay its own arbitrator, attorneys, accountants, consultants and other
experts and witnesses. Seller and Buyer will use commercially
reasonable efforts to cause the arbitration to be conducted in an
expeditious manner. Seller and Buyer will use their commercially
reasonable efforts to cause the arbitration to be completed within 60
days after selection of the arbitrator. In the arbitration, Ohio law
will govern, except to the extent that those laws conflict with the
Commercial Arbitration Rules of the AAA and the provisions of this
Section 9.03(d). There will be no discovery except as the arbitrator
will permit following a determination by the arbitrator that the
Person seeking such discovery has a substantial demonstrable need. All
other procedural matters will be within the discretion of the
arbitrator. In the event a Person fails to comply with the procedures
in any arbitration in a manner deemed material by the
47
<PAGE>
arbitrator, the arbitrator will fix a reasonable period of time for
compliance and, if the Person does not comply within said period, a
remedy deemed just by the arbitrator, including an award of default,
may be imposed. The determination of the arbitrator will be final and
binding on the Seller, Seller's Affiliates and Buyer. Judgment upon
the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
9.04 DAMAGE LIMITATIONS.
(a) Notwithstanding anything to the contrary in the Transaction
Documents, none of Seller, Seller's Affiliates nor Buyer will be
permitted to recover any consequential, indirect, or punitive damages
arising out of or related to the Transaction Documents, regardless of
the form of the Claim or Action, including without limitation Claims
or Actions for indemnification, tort, breach of contract, warranty,
representation or covenant.
(b) Seller's and its Affiliates' aggregate liability arising out of or
related to breaches of representations or warranties contained in the
Transaction Documents, regardless of the form of the Claim or Action,
including without limitation Claims or Actions for indemnification,
tort, breach of contract, warranty or representation, is limited to
the amount by which all liabilities exceed five million United States
dollars (US$5,000,000), and in no event will Seller's and its
Affiliates' aggregate liability therefor exceed a total of 20% of the
Purchase Price.
(c) Buyer's aggregate liability arising out of or related to breaches of
representations or warranties contained in the Transaction Documents,
regardless of the form of the Claim or Action, including without
limitation Claims or Actions for indemnification, tort, breach of
contract, warranty or representation, is limited to the amount by
which all liabilities exceed five million United States dollars
(US$5,000,000), and in no event will Buyer's aggregate liability
therefor exceed a total of 20% of the Purchase Price.
(d) In the event any Buyer's Assertion, Seller's Assertion or Claim
hereunder results in a Tax benefit or is an insured loss to the
indemnified Party, the indemnifying Party will be entitled to a
credit against any liability thereunder in the amount by which any
Taxes of the indemnified Party will be reduced by reason of any
deduction or adjustment allowed the indemnified Party for any
payment, settlement or satisfaction of such claim, as well as in the
amount of and to the extent of any insurance proceeds to which the
indemnified Party is entitled. For the purposes hereof, it will be
presumed that the maximum possible Tax benefit is derived in the
shortest time period possible.
48
<PAGE>
9.05 TERMINATION OF INDEMNIFICATION. The obligation to indemnify a Person
pursuant to Sections 9.01(a)(i)(B) and 9.02(a)(i)(D) will terminate when
the applicable representation or warranty terminates pursuant to Section
11.03; provided, however, that such indemnification obligation will not
terminate with respect to any item as to which the Person to be
indemnified will have, prior to the expiration of the applicable period,
previously delivered written notice (stating in reasonable detail the
nature of, and factual and legal basis for, any Claim, and the provisions
of this Agreement on which such Claim is made) to the other Party.
49
<PAGE>
ARTICLE X
TERMINATION AND ABANDONMENT
10.01 TERMINATION. This Agreement may be terminated at any time prior to
the Closing:
(a) by mutual written consent of Seller and Buyer;
(b) by any of Seller, Seller's Affiliates, or Buyer if the Closing has
not occurred within 6 months from the date of this Agreement,
provided that the terminating Person is not then in default
hereunder; and
(c) by any of Seller, Seller's Affiliates, or Buyer if any Governmental
Entity has issued a final, non-appealable order, decree or ruling
permanently enjoining or prohibiting the consummation of the
transactions contemplated by this Agreement.
10.02 PROCEDURE AND EFFECT OF TERMINATION. In the event of termination of
this Agreement and abandonment of the transactions contemplated hereby
pursuant to Section 10.01 hereof, written notice thereof will promptly be
given to all appropriate entities and this Agreement will terminate and the
transactions contemplated hereby will be abandoned, without further action
by any of the Seller, Seller's Affiliates, or Buyer, and without additional
liability on the part of any of them or their Affiliates, directors,
officers, shareholders, employees, contractors or agents, except for
Sections 6.07, 6.10, 6.16, 9.03 and 10.02 and any definitions pertaining
thereto, which sections and definitions will continue to bind the Parties
as necessary to effectuate their purpose. Nothing contained in this Section
10.02 will release any of Seller, Seller's Affiliates or Buyer from
liability for any breach of this Agreement prior to its termination.
50
<PAGE>
ARTICLE XI
MISCELLANEOUS
11.01 AMENDMENT AND MODIFICATION. The Transaction Documents may be amended,
modified, or supplemented only by the written agreement of Seller and
Buyer. Seller, Seller's Affiliates and Buyer agree that amendments,
modifications and/or supplements to the Transaction Documents need not be
executed by any of Seller's Affiliates, except for amendments,
modifications or supplements to the Transitional Supply Agreement, which
will require execution by any of Seller's Affiliates affected by such
amendments, modifications or supplements.
11.02 WAIVER OF COMPLIANCE. Except as otherwise provided in the Transaction
Documents, the failure by any Person to comply with any obligation,
covenant, agreement or condition under such agreements may be waived by the
Person entitled to the benefit thereof only by a written instrument signed
by the Person granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or
condition will not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. The failure of any Person to enforce at any
time any of the provisions of such agreements will in no way be construed
to be a waiver of any such provision, nor in any way to affect the validity
of such agreements or any part thereof or the right of any Person
thereafter to enforce each and every such provision. No waiver of any
breach of such provisions will be held to be waiver of any other or
subsequent breach.
11.03 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; OTHER MATTERS. Each and
every representation and warranty of Seller or Buyer contained in this
Agreement will survive any investigation and will not be extinguished by
the Closing, but will survive for a period of 12 months from the Closing
Date. No Party may initiate any Claim nor will any Party be responsible for
any Action arising out of or related to a breach of a representation or
warranty under this Agreement, regardless of the form of the Claim or
Action, including without limitation indemnification, tort, breach of
contract, warranty or representation, unless such Claim or Action is
initiated prior to the expiration of the relevant representation or
warranty. All other covenants and agreements of the Parties hereto are
subject to all applicable statutes of limitation, statutes of repose and
other similar defenses provided by law or equity, it being understood that
the parties' obligations to indemnify with respect to Excluded Liabilities
and Assumed Liabilities will survive for the statute of limitations
applicable to such liability.
11.04 PRE-CLOSING ACTIVITIES. The Parties agree to undertake, prior to the
Closing Date, the specific activities designated to
51
<PAGE>
occur prior to the Closing Date in Exhibit 1.44. In addition, should the
Closing Date by delayed beyond January 16, 1998, the Parties will work in
good faith to revise, as appropriate, the dates set forth in Exhibit 1.44.
11.05 NOTICES. All notices required or permitted pursuant to this Agreement
will be in writing and will be deemed to be properly given when actually
received by the Person entitled to receive the notice at the address stated
below, or at such other address as a Party may provide by notice to the
other:
Seller: Mailing Delivery
------- --------
The Procter & Gamble Company The Procter & Gamble Company
P.O. Box 599 One Procter & Gamble Plaza
Cincinnati, OH 45201 Cincinnati, OH 45202
ATTENTION: C. V. ATTENTION: C. V. Bergh
Copy to: S. E. Abrams Copy to: S. E. Abrams
Buyer: Mailing Delivery
------- --------
MBW Foods LLC MBW Foods LLC
c/o Dartford Partnership LLC c/o Dartford Partnership LLC
c/o Richards & O'Neil, LLP c/o Richards & O'Neil, LLP
885 Third Avenue 885 Third Avenue
New York, NY 10022-4873 New York, NY 10022-4873
ATTENTION: J. B. Ardrey ATTENTION: J. B. Ardrey
Copy to:
Aurora Foods, Inc.
445 Hutchinson Avenue, Suite 960
Columbus, Ohio 43235
ATTENTION: President
11.06 EXHIBITS AND SCHEDULES; INCORPORATION BY REFERENCE. The exhibits and
schedules attached to this Agreement, each when executed and delivered, are
incorporated by reference into and made a part of this Agreement. The fact
that any document, asset, item, action, entity, event, condition, claim,
agreement, or other matter (hereinafter collectively referred to as
"Matter") is set forth or described or referred to in any one or
52
<PAGE>
more exhibits or schedules will not be construed as a representation,
warranty, acknowledgment or admission by any Person or as evidence that
such Matter is, or may at any time be or have been, Material or in any way
significant to the transactions contemplated by this Agreement. Disclosure
in any exhibit or schedule to this Agreement will be deemed to be
disclosure in any exhibit(s) or schedule(s) where such disclosure would be
appropriate or required.
11.07 SUCCESSORS AND ASSIGNS. The Transaction Documents will be binding
upon and will inure to the benefit of the signatories thereto and their
respective successors and permitted assigns. Except as otherwise set forth
in the applicable Transaction Document, none of Seller, Seller's Affiliates
nor Buyer may assign any of the Transaction Documents, or any of their
rights or liabilities thereunder, without the prior written consent of the
other signatories thereto, provided that: (a) Seller, Seller's Affiliates
and Buyer may so assign in whole or in part, to one or more of their
Affiliates; (b) Buyer may so assign in whole or in part as collateral to
secure indebtedness in connection with the Chase Commitment and the Natwest
Commitment; and (c) after the later of 12 months after Closing or the
termination of the Transitional Supply Agreement, Buyer may so assign in
whole or in part in connection with the sale of all or substantially all of
the assets of the Business to any unaffiliated third party (regardless of
the form of the transaction); provided, however, that Seller and Seller's
Affiliates will have no obligations whatsoever, including without
limitation obligations to provide information or assistance in connection
with such sale or the third party's financing thereof, and provided further
that no such assignment will limit or otherwise affect Buyer's obligations
hereunder. Upon the assignment of this Agreement by MBW Foods LLC to Aurora
Foods, Inc. or any other Affiliate of Buyer reasonably acceptable to Seller
(and provided that such assignee expressly assumes in writing all of the
obligations of Buyer under the Transaction Documents), MBW Foods LLC will
be relieved of any further liability under the Transaction Documents except
for liability under Section 9.02(a)(C), which liability will terminate at
the end of one year after any public offering by MBW Foods LLC or any of
its Affiliates which make use of the Financial Information and/or the
information to be provided pursuant to Section 6.13; provided, however,
that such indemnification obligation of MBW Foods LLC shall not terminate
as to any item as to which the person to be indemnified will have, prior to
the expiration of such one-year period, previously delivered written notice
to MBW Foods LLC stating in reasonable detail the nature and factual and
legal basis of any Claim. Any other assignment will not relieve the Person
making the assignment from any liability under such agreements.
53
<PAGE>
11.08 ENTIRE AGREEMENT. The Transaction Documents constitute the entire
agreement between the signatories hereto with respect to the subject matter
thereof and will supersede all previous negotiations, commitments, and
writings with respect to such subject matter. SELLER, SELLER'S AFFILIATES
AND BUYER MAKE NO REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR
IMPLIED, OTHER THAN THOSE SPECIFICALLY SET FORTH IN THE TRANSACTION
DOCUMENTS.
11.09 SEVERABILITY. The illegality or partial illegality of any or all of
the Transaction Documents, or any provision thereof, will not affect the
validity of the remainder of the such agreements, or any provision thereof,
and the illegality or partial illegality of any such agreements will not
affect the validity of any such agreement in any jurisdiction in which such
determination of illegality or partial illegality has not been made, except
in either case to the extent such illegality or partial illegality causes
such agreements to no longer contain all of the material provisions
reasonably expected by the signatories to be contained therein.
11.10 CAPTIONS. The captions appearing in the Transaction Documents are
inserted only as a matter of convenience and as a reference and in no way
define, limit or describe the scope or intent of such agreements or any of
the provisions thereof.
11.11 COUNTERPARTS. The Transaction Documents may be executed in one or
more counterparts, each of which will be deemed to be an original, but all
of which will constitute one agreement.
11.12 GOVERNING LAW. The Transaction Documents will be governed
by and construed in accordance with the laws of Ohio, whether common law or
statutory, without reference to the choice of law provisions thereof.
IN WITNESS WHEREOF, each of the signatories hereto has caused this Agreement to
be signed by their respective duly authorized officers as of the date first
above written.
THE PROCTER & GAMBLE COMPANY MBW INVESTORS LLC
By: ________________________________ By: ______________________________
Name Printed: C. C. Daley, Jr. Name Printed: _______________
---------------------
Title: Vice President and Treasurer Title: ______________________
----------------------------
THE PROCTER & GAMBLE THE PROCTER & GAMBLE
54
<PAGE>
MANUFACTURING COMPANY DISTRIBUTING COMPANY
By: ________________________________ By: _________________________________
Name Printed: C. C. Daley, Jr. Name Printed: C. C. Daley, Jr.
--------------------- ----------------
Title: Vice President and Treasurer Title: Vice President and
---------------------------- ------------------
Treasurer
-------------
PROCTER & GAMBLE, INC.
By:_________________________________
Name Printed: C. C. Daley, Jr.
---------------------
Title: Designated Agent
----------------------------
55
<PAGE>
The following list briefly identifies the contents of the Schedules
and Exhibits to the Asset Purchase and Sale Agreement, dated as of November 26,
1997, between The Procter & Gamble Company and MBW Investors, LLC (the
"COMPANY"), and joined solely for the purposes stated therein by The Procter &
Gamble Manufacturing Company, The Procter & Gamble Distributing Company and
Procter & Gamble Inc. (Terms used but not defined have the meanings assigned to
them in the Asset Purchase Agreement.) In accordance with Regulation S-K under
the Securities Act of 1933 the actual Schedules and Exhibits have not been filed
with the Securities and Exchange Commission (the "COMMISSION"). The Company
hereby agrees to furnish supplementally a copy of any omitted Schedule or
Exhibit to the Commission upon request.
1. Schedule 1.05(k) Coupons to be Paid for by Seller
2. Schedule 1.16 Contracts - List of assumed contracts involving payments over
$75,000 per year
3. Schedule 1.19 Equipment - List of acquired equipment
4. Schedule 1.22(a) Audited Statements of Direct Revenue, Cost of Production,
etc. of the Duncan Hines Business
5. Schedule 1.22(b) Unaudited Financial Statements of the Duncan Hines
Business
6. Schedule 1.22(c) Statement of Equipment & Goodwill of the Duncan Hines
Business
7. Schedule 1.31 Patents and Applications - List of patents and applications
8. Schedule 1.33 Licensed Patents - List of patents licensed to the Company
9. Schedule 1.37 Supply Contracts - List of assumed supply contracts involving
payments over $75,000 per year
10. Schedule 1.39 Technology Exclusively Related to the Business - Not to be
Sold to Buyer - List of technology not sold to the Company
11. Schedule 1.40 Technologies - List of technology licensed to the Company
12. Schedule 1.41 Trademarks, Registrations and Applications - List of
trademarks, registration and applications acquired by the Company
13. Schedule 2.01 Detail of Purchase Price - Description of purchase price
allocation
56
<PAGE>
14. Schedule 3.01(a)(v) Copyrights to be Assigned - List of copyrights assigned
to the Company
15. Schedule 4.02 Seller's Required Authorization - List of authorizations
necessary to complete the transaction
16. Schedule 4.03 Material Non-Compliance with Applicable Laws, etc. -
Indicates there were none
17. Schedule 4.04(a) Agreements Exclusive to the Business, Not Freely
Assignable, etc.-List of such agreements
18. Schedule 4.04(b) Materially Non-Enforceable Contracts and Supply Contracts
- List of such contracts
19. Schedule 4.04(c) Material Breaches/Defaults Under Contracts/Supply
Contracts - Lists breaches of such contracts
20. Schedule 4.05 Coupons Issued or Scheduled to be Issued in Fiscal Year 97/98
- List of such coupons
21. Schedule 4.06 Equipment not in Reasonable Operating Condition/Repair -
Indicates there are none
22. Schedule 4.10(a)(i) Certain Trademarks not included in Acquired Assets -
Indicates there are none
23. Schedule 4.10(a)(ii) Exceptions to Seller's or Seller's Affiliation
Ownership of U.S. and Canadian Trademarks - List of exceptions to trademark
ownership by Seller
24. Schedule 4.10(a)(iii) Trademarks not Owned by Seller - Lists trademarks not
owned of record by Seller
25. Schedule 4.10(a)(iv) Invalid U.S. and Canadian Trademarks - Lists invalid
U.S. and Canadian trademarks
26. Schedule 4.10(a)(v) Claims and Actions related to Trademarks - List of
claims and actions relating to Trademarks
27. Schedule 4.10(a)(vii) Third Party Consents for use of Trademarks - List of
necessary third party consents - Indicates there are none
57
<PAGE>
28. Schedule 4.10(a)(viii) Common Law or State Registered Trademarks Not used
Exclusively in the Business - Indicates there are none
29. Schedule 4.10(b)(i) Certain Trademarks and Patents not included in the
Acquired Assets - Indicates there are none
30. Schedule 4.10(b)(ii) Security Interests, etc. on U.S. and Canadian Patents
and Licensed Patents - Indicates there are none
31. Schedule 4.10(b)(iii) Patents and Licensed Patents not owned by Seller or
Seller's Affiliates - Indicates there are none
32. Schedule 4.10(b)(iv) Invalid U.S. and Canadian Patents and Licensed Patents
-
33. Schedule 4.10(b)(v) Claims and Actions pertaining to U.S. and Canadian
Patents -Indicates there are none
34. Schedule 4.10(b)(vii) Third Party Consents regarding U.S. and Canadian
Patents -Indicates there are none
35. Schedule 4.10(b)(viii) Patents and Licensed Patents where certain
Maintenance Fees have not been paid - Indicates there are none
36. Schedule 4.10(c)(i) Technology not Included in Acquired Assets -
Indicates there are none
37. Schedule 4.10(c)(ii) Security Interests, etc. regarding Technology -
Indicates there are none
38. Schedule 4.10(c)(iii) Claims and Actions regarding Technology - Indicates
there are none
39. Schedule 4.10(c)(v) Third Party Consents regarding use of Technology in
U.S. and Canada - Indicates there are none
40. Schedule 4.10(c)(vi) Failure by Seller or Seller's Affiliates to take
reasonable and customary steps to maintain the Confidentiality of
Technology - Indicates there were none
41. Schedule 4.10(d)(i) Miscellaneous Intellectual Property not included in
Acquired Assets - Indicates there are none
58
<PAGE>
42. Schedule 4.10(d)(ii) Exceptions to Seller or Seller's Affiliates Ownership
of Miscellaneous Intellectual Property (excluding the Trademarks, the
Patents and the Technology) in the U.S. and Canada
43. Schedule 4.10(d)(iii) Claims and actions pertaining to the use of United
States or Canadian Intellectual Property (excluding the trademarks, the
patents, the licensed patents and the technology) and licenses and
agreements involving said intellectual property; intellectual property
(excluding the trademarks, the patents, the licensed patents and the
technology) infringements of United States and Canadian trademarks, trade
names, or service marks of third parties
44. Schedule 4.10(d)(iv) Third Party Consents regarding U.S. and Canadian
Intellectual Property Third Party Consent required for use of United States
or Canadian Intellectual Property (excluding the Trademarks, the Patents,
the Licensed Patents, and the Technology)
45. Schedule 4.11 Litigation - Seller - List of litigation versus the Seller
pertaining to the Duncan Hines Business
46. Schedule 4.15 Activities Outside of Ordinary Course - List of such
activities
47. Schedule 4.18 Security Interests, etc. - List of security interest in the
Intellectual Property - Indicates there are none
48. Schedule 4.19 Seller Violations/Breaches - Indicates there are none
49. Schedule 5.02 Buyer's Required Authorization - List of Buyer's required
authorizations necessary to complete transaction
50. Schedule 5.04 Buyer's Financing Commitments
51. Schedule 5.05 Litigation - Buyer - Litigation involving the Buyer -
Indicates there are none
52. Schedule 5.07 Buyer - Violations/Breaches - Indicates there are none
53. Schedule 6.05 Estimate of BDF Commitments - Lists estimated cost of BDF
commitments
54. Schedule 6.20 Format of Seller Monthly Financial Data
59
<PAGE>
55. Exhibit 1.06 Form of Assignment and Assumption Agreement
56. Exhibit 1.09 BDF Contract/Calculation Sheet - Description of BDF contract
calculations
57. Exhibit 1.32 Form of Patent Assignment
58. Exhibit 1.33 Form of Patent License Agreement
59. Exhibit 1.40 Form of Technology License Agreement
60. Exhibit 1.42 Form of Trademark Assignment
61. Exhibit 1.44 Form of Transitional Services Agreement
62. Exhibit 1.45 Form of Transitional Supply Agreement
63. Exhibit 3.01(a)(i) Form of Bill of Sale and Assignment
64. Exhibit 3.01(a)(v) Form of Copyright Assignment
65. Exhibit 3.01(a)(vi) Form of Opinion of Seller's Counsel
66. Exhibit 3.01(a)(viii) Form of Purchase Price Receipt
67. Exhibit 3.01(b)(iv) Form of Opinion of Buyer's Counsel
60
<PAGE>
Exhibit 99
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent
THE NATIONAL WESTMINSTER BANK PLC, individually and as
Syndication Agent
SWISS BANK CORPORATION, individually and as
Documentation Agent
FLEET NATIONAL BANK
HELLER FINANCIAL, INC.
BANKBOSTON, N.A.
MARINE MIDLAND BANK
PNC BANK, NATIONAL ASSOCIATION
SUNTRUST BANK, ATLANTA
WELLS FARGO BANK, N.A.
NATIONAL CITY BANK
HARRIS TRUST AND SAVINGS BANK
CREDIT AGRICOLE INDOSUEZ
U.S. BANK NATIONAL ASSOCIATION
BHF-BANK AKTIEGESELLSCHAFT,
GRAND CAYMAN BRANCH
BALANCED HIGH YIELD FUND LTD.
FIRST UNION NATIONAL BANK
SUMMIT BANK
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
DLJ CAPITAL FUNDING, INC.
METROPOLITAN LIFE INSURANCE COMPANY
THE TRAVELERS INSURANCE COMPANY
THE TRAVELERS LIFE AND ANNUITY COMPANY
AMARA-1 FINANCE LTD.
CERES FINANCE LTD.
WARECONSECO
PILGRIM AMERICA PRIME RATE TRUST
ML CLO XV PILGRIM AMERICA (Cayman) LTD.
SANKATY HIGH YIELD ASSET PARTNERS, L.P.
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO
ALLSTATE INSURANCE COMPANY
SENIOR DEBT PORTFOLIO
PRIME INCOME TRUST
KZH-ING-2 CORPORATION
KZH HOLDING CORPORATION III
HIGH INCOME PRINCIPAL PRESERVATION FUND
VAN KAMPEN AMERICA CAPITAL PRIME RATE INCOME TRUST
CYPRESS TREE BOSTON PARTNERS
ACM CREDIT OPPORTUNITIES MASTER FUND
