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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: October 30, 1995
Date of earliest event reported: October 2, 1995
CPC INTERNATIONAL INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 1-4199 36-2385545
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
INTERNATIONAL PLAZA, P.O. BOX 8000
ENGLEWOOD CLIFFS, N.J. 07632-9976
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(Address of principal executive offices) (Zip Code)
(201) 894-4000
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(Registrant's telephone number, including area code)
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ITEM 2, ACQUISITION AND DISPOSITION OF ASSETS.
On October 2, 1995 the Company acquired the nationwide baking business of
Kraft Foods, Inc., a wholly-owned subsidiary of the Philip Morris Companies
Inc., for $865 million. The business has $1.2 billion in sales and includes
four major market-leading brands: Entenmann's sweet baked products, Freihofer's
and Oroweat breads, and Boboli Italian bread shells. Entenmann's is the 14th
largest food brand in the United States by dollar sales.
CPC will combine the acquired business and its Best Foods Baking
Group, which markets such premium products as Thomas' English muffins; Arnold,
Brownberry, and Bran'nola breads; and Sahara pita bread. With the acquisition,
CPC's sales of specialty baking products will total approximately $1.7
billion, making the company the largest producer of fresh premium bakery
products in the United States. The acquisition also significantly strengthens
the presence of CPC's consumer foods business in the U.S. grocery business;
among other benefits it will give CPC one of the best nationwide direct store
delivery systems.
The largest market of the business to be acquired is the Northeastern
United States; its other significant markets are the Midwest, Southeast, and
West. Operations include 16 bakeries, one of which is located in the U.K.; an
apple processing facility; and a research and development facility. The
business currently employs about 9,000 people.
CPC's Best Foods Baking Group operates seven plants and employs about
2,000 people.
ITEM 7, FINANCIAL STATEMENTS PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
As of the date of the filing of this Current Report on Form 8-K, it is
impracticable for the Company to provide the financial statements required by
this item 7(a). In accordance with Item 7(a)(4) of Form 8-K, such financial
statements shall be filed by amendment to this Form 8-K no later than 60 days
after October 17, 1995.
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(b) Pro Forma Financial Information.
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for the Company to provide the pro forma financial information
required by this Item 7(b). In accordance with Item 7(b) of Form 8-K, such
financial statements shall be filed by amendment to this Form 8-K no later
than 60 days after October 17, 1995.
(c) Exhibits.
(a) Stock Purchase Agreement among Kraft Foods Bakery Companies,
Inc., Kraft Foods, Inc. and CPC International Inc. dated as of August 7, 1995,
as amended on October 2, 1995 (omitting schedules and exhibits).
(b) Press Release issued by the Company on October 2, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CPC International Inc.
By /s/Clifford B. Storms
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Name: Clifford B. Storms
Title: Senior Vice President
and General Counsel
Date: October 30, 1995
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EXHIBIT INDEX
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Exhibit No. Description
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Ex. 99. (a) Stock Purchase Agreement among Kraft Foods Bakery Companies,
Inc., Kraft Foods, Inc. and CPC International Inc. dated as of
August 7, 1995, as amended on October 17, 1995 (omitting
schedules and exhibits).
Ex. 99. (b) Press Release issued by the Company on October 2, 1995.
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Exhibit A
[EXECUTION COPY]
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STOCK PURCHASE AGREEMENT
among
KRAFT FOODS BAKERY COMPANIES, INC.,
KRAFT FOODS, INC.
and
CPC INTERNATIONAL INC.
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Dated as of August 7, 1995
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TABLE OF CONTENTS
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1. Purchase and Sale of Stock and Other Assets; Assumption
of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(b) Purchase and Sale of Shares, Other Assets,and UK Assets . . . . . . . . . . . . . . . . . . . . . . 2
(c) Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(d) Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(e) UK Assets; UK Assumed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(f) Transferred and Retained Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(g) Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(h) Transfer of the Tulare Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Buyer's Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Sellers' Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4. Representations and Warranties of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Authority; No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Ownership of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Organization and Standing of the Companies
and the Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(d) Capital Stock of the Companies and the Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . 13
(e) Financial Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(f) Title to Tangible Assets Other than
Real Property Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(g) Title to Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(h) Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(i) Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(j) Litigation; Decrees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(k) Absence of Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(l) Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(m) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(n) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(o) Sufficiency of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(p) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(q) Liabilities. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5. Covenants of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Ordinary Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(d) Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(e) Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(f) Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(g) Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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6. Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(a) Authority; No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(b) Actions and Proceedings, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(c) Availability of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(d) Acquisition of Shares for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7. Covenants of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Performance of Obligations by Buyer AfterClosing Date . . . . . . . . . . . . . . . . . . . . . . 33
(c) No Additional Representations; Disclaimer
Regarding Estimates and Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(d) Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(e) Customer Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(f) Certain Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8. Mutual Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(a) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(b) Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(c) Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(d) HSR Act Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(e) Promotional Materials and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(f) Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(g) Transition Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(h) Proprietary Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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(i) Cash Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(j) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(k) Transition Services Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(l) Trademark License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(m) Technology License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(n) Tulare Facility License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(o) Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(p) Lease Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(q) UK Asset Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(r) Co-Generation Guaranty Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(s) Know-How License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(t) Development Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(u) MX Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(a) Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(b) Section 338(h)(10) Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(c) Allocation of Final Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(d) Tax Indemnification by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(e) Tax Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(f) Allocation of Certain Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(g) Filing Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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(h) Refunds and Carrybacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(i) Cooperation and Exchange of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(j) Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(k) Safe Harbor Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(l) Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(a) Indemnification by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(b) Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
(c) Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(d) Losses Net of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
(e) Termination of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
(f) Procedures Relating to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
13. No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
14. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
15. Survival of Representations and Environmental Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 72
16. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
17. Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
19. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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20. No Strict Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
21. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
22. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
23. Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
24. Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
25. Representation by Counsel; Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
26. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
27. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
28. Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
29. Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
(a) Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
(b) Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
30. Commercially Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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INDEX OF DEFINED TERMS
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Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Adjustment Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Anaheim Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Applicable Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Applicable Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Bakery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bakery Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Bakery Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Boboli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bouyea-Fassets Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Bristol Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
BSCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
BSCI Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Cash Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Closing Net Book Value Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Co-Generation Guaranty Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Deduction Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Development Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Diligence Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Enhanced Severance Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Enhanced Severance Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Entenmann's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Environmental Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Environmental Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Environmental Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
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ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
File Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Final Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Financial Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Freihofer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Hazardous Substance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Income Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
indemnified party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Information Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Initial Net Book Value Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Initial Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
KFBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Know-How License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Kraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Kraft Jacobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Lease Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Licensed Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Net Book Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Nontransferred Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Nontransferred Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Notice of Disagreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Offered Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Owned Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Owned Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Partially Transferred Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Permitted Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
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<S> <C>
PMCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Proprietary Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
RCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Relevant Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Restricted Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Safe Harbor Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Scheduled Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 338 Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 338(h)(10) Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Seller Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sellers' Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Shared Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Shared Indemnifiable Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Stock Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Surveyed Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Tax Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Taxing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Technology License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Third Party Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Trademark License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Transferred Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Transition Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Transition Services Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Tulare Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Tulare Facility License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Tulare Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Tulare Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
UK Asset Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
UK Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
UK Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
UK Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
</TABLE>
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This STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of
August 7, 1995, between KRAFT FOODS BAKERY COMPANIES, INC., a Delaware
corporation ("KFBC"), KRAFT FOODS, INC., a Delaware corporation ("Kraft";
together with KFBC, "Sellers"), and CPC INTERNATIONAL INC., a Delaware
corporation ("Buyer");
W I T N E S S E T H:
WHEREAS, Sellers own (i) 100% of the outstanding capital stock
of Boboli Co., a Delaware corporation ("Boboli"), (ii) 100% of the outstanding
capital stock of Charles Freihofer Baking Company, Inc., a New York corporation
("Freihofer"), and (iii) 100% of the outstanding capital stock of Entenmann's,
Inc., a Delaware corporation ("Entenmann's") (Boboli, Freihofer and Entenmann's
are referred to collectively as the "Companies" and individually as a
"Company");
WHEREAS, KFBC conducts the Business (as defined herein)
through the Companies and their Subsidiary (as defined herein);
WHEREAS, Buyer desires to purchase from Sellers, and Sellers
desire to sell to Buyer, 100% of the outstanding shares of capital stock of the
Companies (the "Shares") (the sale and purchase of the Shares and certain
related assets being referred to herein as the "Stock Purchase");
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Purchase and Sale of Stock and Other Assets; Assumption
of Liabilities.
(a) Certain Definitions. As used in this Agreement
(including the Schedules and Exhibits hereto), the following definitions shall
apply:
(i) "Affiliate" shall mean any natural person, and any
corporation, partnership or other entity, that directly, or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with the party specified.
(ii) "Business" shall mean the business of manufacturing,
marketing, selling and distributing fresh sweet baked goods, variety
breads, and Italian bread shells and various pizza ingredients as
conducted as of the date hereof by KFBC through the Companies and the
Subsidiary.
(iii) "Intellectual Property" shall mean all of the patents,
invention disclosures, registered trademarks, trade names, registered
copyrights and registered service marks, and any patent applications
or applications for registration of
<PAGE> 12
the foregoing, and any goodwill associated therewith, listed on
Schedule 4(h) attached hereto.
(iv) The term "knowledge," when used in the phrase "to the
knowledge of Sellers," shall mean, and shall be limited to, the actual
knowledge of the following individuals: Gregory B. Murphy (President
of Kraft's Bakery Division ("Bakery")), William Petersen (Vice
President/Finance, Systems and Planning of Bakery), Dr. Kevin Lang
(Vice President/ Operations and Technology of Bakery), Jayne Eastman
(Vice President/Marketing and Development of Bakery), Stephen Bryan
(President of Entenmann's), Neil Beckerman (President of Oroweat), and
Martin Gorman (Deputy Chief Counsel of Kraft).
(v) "Material Adverse Effect" shall mean a material adverse
effect upon the properties, condition (financial or otherwise) or
results of operations of the Companies and the Subsidiary, taken as a
whole.
(vi) "Subsidiary" shall mean Oroweat Bakers, Ltd., an
Ontario, Canada corporation and wholly-owned subsidiary of
Entenmann's.
(vii) "UK Assets" shall mean all the property and assets to
be purchased by Buyer or its Affiliate and sold by Kraft Jacobs
Suchard Ltd. ("Kraft Jacobs") pursuant to the UK Asset Purchase
Agreement (as defined in Section 8(q)).
(viii) "UK Assumed Liabilities" shall mean the liabilities to
be assumed by Buyer pursuant to the UK Asset Purchase Agreement and
agreements or instruments executed in connection therewith.
(ix) "UK Business" shall mean the business currently
conducted by Kraft Jacobs, a corporation organized under the laws of
England, relating to the manufacture, sale and distribution in England
of fresh sweet baked goods under the Entenmann's(R) label and frozen
meat products under the Mr. Brains label, and certain other private
label products as currently manufactured at the factory in Bristol,
England (the "Bristol Facility").
(b) Purchase and Sale of Shares, Other Assets, and UK
Assets. On the terms and subject to the conditions of this Agreement, at the
Closing Sellers shall sell, transfer and deliver to Buyer, or cause to be sold,
transferred and delivered to Buyer, and Buyer shall purchase from Sellers or an
Affiliate of Sellers, the Shares, the Other Assets and the UK Assets, for an
aggregate cash purchase price of $865,000,000 (the "Initial Purchase Price").
-2-
<PAGE> 13
(c) Other Assets. The term "Other Assets" shall mean all
right, title and interest of Sellers or an Affiliate of Sellers in the assets
that are listed or described on Schedule 1(c). Prior to the Closing, Sellers
shall have the right to update the description of the Other Assets (including
Schedule 1(c)) to reflect changes in the ordinary course of business consistent
with past practice (and subject to Section 5(b) below) prior to the Closing.
(d) Assumed Liabilities. Buyer shall assume on the
Closing Date and shall pay, perform and discharge when due the obligations and
liabilities of such Seller or such Affiliate that are listed or described on
Schedule 1(d) (the "Assumed Liabilities").
(e) UK Assets; UK Assumed Liabilities. Pursuant to
the UK Asset Purchase Agreement and on the terms and subject to the conditions
contained therein, Kraft Jacobs shall sell, and Buyer or an Affiliate of Buyer
shall buy, the UK Assets, and Buyer or an Affiliate of Buyer shall assume the
UK Assumed Liabilities.
(f) Transferred and Retained Assets. Buyer acknowledges
that, on or prior to the Closing Date, each applicable Company or the
Subsidiary will (i) transfer to KFBC the assets listed or described on Schedule
1(f) and Buyer will not acquire any interest in the assets listed or described
on Schedule 1(f) and (ii) adopt a plan of liquidation which encompasses the
transfer of the assets described in clause (i), and the deemed distribution to
its shareholder of the proceeds of the deemed sale of all the other assets of
such Company pursuant to the election under Section 338(h)(10) of the Code
referred to in Section 10(b). Sellers acknowledge that the Companies (which
will be deemed to be new corporations under Section 338(h)(10) of the Code)
will after the Closing Date rescind such plans of liquidation. Notwithstanding
any other provision of this Agreement, no representation, warranty or covenant
of Sellers will be deemed to be breached, and no purchase price adjustment
pursuant to Section 2 will be made, by reason of the transfers contemplated by
this Section 1(f) or by reason of any facts relating to the assets referred to
above.
(g) Software. Prior to the Closing, Sellers shall assign
to Entenmann's their entire right, title and interest under the Software
License Agreements set forth on Schedule 1(g).
(h) Transfer of the Tulare Facility. Prior to the
Closing, Kraft will convey to Boboli its entire right, title and interest in
the real estate located at 800 East Paige Avenue, Tulare, California on which
the Tulare Facility is located as described in the legal description of such
premises attached hereto
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as Schedule 1(h) (the "Tulare Property"). Notwithstanding any other provision
of the Stock Purchase Agreement, no purchase price adjustment pursuant to
Section 2 will be made by reason of the transfer contemplated by this
paragraph.
2. Closing.
(a) Closing. The closing (the "Closing") of the
transactions contemplated hereby shall be held at the offices of Kirkland &
Ellis, Citicorp Center, 153 East 53rd Street, New York, New York at 10:00 a.m.,
local time, on October 2, 1995, or, if the conditions to Closing set forth in
Sections 3(a)(iii) and 3(b)(iii) shall not have been satisfied or waived at
least five business days prior to such date, on the first Monday or fiscal
month-end (determined with reference to Sellers' accounting policies) that is
at least five (5) business days following satisfaction of such conditions. The
date on which the Closing shall occur is hereinafter referred to as the
"Closing Date," and the Closing shall be deemed effective as of the opening of
business on the Closing Date. On the business day immediately preceding the
Closing Date, Buyer and Sellers shall conduct a pre-Closing at the same
location as the Closing, commencing at 10:00 a.m., local time, at which each
party shall present for review by the other party copies in execution form of
all documents required to be delivered by such party at the Closing.
(i) At the Closing, subject to and on the terms and
conditions set forth in this Agreement, Buyer shall deliver to Sellers
(A) by wire transfer to a bank account designated in writing by Kraft
immediately available funds in an amount equal to the Initial Purchase
Price, (B) instruments of assumption in form and substance reasonably
satisfactory to Kraft and its counsel evidencing and effecting the
assumption by Buyer of the Assumed Liabilities and such other
documents as are specifically required by this Agreement (it being
understood that such instruments shall not require Buyer or its
Affiliates to make any additional representations, warranties or
covenants, expressed or implied, not contained in this Agreement), (C)
documents required to be delivered by Buyer pursuant to the UK Asset
Purchase Agreement, including instruments of assumption evidencing
and effecting the assumption by Buyer or its Affiliate of the UK
Assumed Liabilities, (D) certified copies of resolutions duly adopted
by Buyer's board of directors authorizing the execution, delivery and
performance of this Agreement and the Ancillary Agreements (as defined
herein), (E) certified copies of Buyer's certificate of incorporation
and by-laws, (F) a certificate of the Secretary or an Assistant
Secretary of Buyer as to the incumbency of the officer(s) of Buyer
(who
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<PAGE> 15
shall not be such Secretary or Assistant Secretary) executing this
Agreement or any Ancillary Agreement, and (G) a short-form
certificate of good standing of Buyer, certified by the Secretary of
State of Buyer's state of incorporation as of a date not more than
three (3) business days prior to the Closing Date.
(ii) At the Closing, subject to and on the terms and
conditions set forth in this Agreement, Sellers shall deliver or cause
to be delivered to Buyer (A) certificates representing the Shares,
with appropriate stock powers and requisite tax stamps attached
properly signed, in form suitable for the valid transfer of such
Shares to Buyer, (B) such appropriately executed instruments of sale,
assignment, transfer and conveyance in form and substance reasonably
satisfactory to Buyer and its counsel evidencing and effecting the
sale and transfer to Buyer of the Other Assets (it being understood
that such instruments shall not require Sellers or their Affiliates to
make any additional representations, warranties or covenants,
expressed or implied, not contained in this Agreement), (C) documents
required to be delivered by Seller pursuant to the UK Asset Purchase
Agreement to evidence and effect the sale and transfer to Buyer or its
Affiliate of the UK Assets, (D) certified copies of resolutions duly
adopted by the board of directors of each Seller, and each of the
Companies and the Subsidiary authorizing the execution, delivery and
performance of this Agreement and the Ancillary Agreements, to the
extent each is a party hereto or thereto, (E) certified copies of the
certificate of incorporation and by-laws of each Seller, and each of
the Companies and the Subsidiary, (F) a certificate of the Secretary
or an Assistant Secretary of each Seller, and each of the Companies
and the Subsidiary as to the incumbency of the officer(s) of each (who
shall not be such Secretary or Assistant Secretary) executing this
Agreement or any Ancillary Agreement and (G) a short form certificate
of good standing of each Seller, and each of the Companies and the
Subsidiary, in each case certified by the Secretary of State or
similar Canadian authority of the State or province of such entity's
incorporation as of a date not more than three (3) business days prior
to the Closing Date.
(iii) Without limiting the generality of paragraphs (i) and
(ii) above, at the Closing, Sellers and its Affiliates and Buyer also
shall execute and deliver any separate purchase agreements, bills of
sale, assumption agreements and other instruments and agreements that
are reasonably requested by either party to evidence the sale to Buyer
of the Shares, the
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<PAGE> 16
Other Assets and the UK Assets and the assumption by Buyer of Assumed
Liabilities and the UK Assumed Liabilities.
(iv) If the sale of all or substantially all of the UK
Assets cannot be effected on the Closing Date (any such Assets being
referred to herein as the "Nontransferred Assets") in accordance with
the terms of the UK Agreement, Buyer and Sellers shall (A) on the
Closing Date, consummate or cause to be consummated the sale and
purchase of the Shares and the Other Assets on the terms and
conditions set forth in this Agreement and (B) as soon as reasonably
practicable after the Closing Date, consummate or cause to be
consummated the sale and purchase of the UK Assets. In the event
there are Nontransferred Assets, (x) Buyers may withhold the amount of
U.K. Sterling 12,000,000 from the Initial Purchase Price, provided,
however, that such withheld amount shall not be determinative of any
amount allocated to the UK Assets or the UK Assumed Liabilities
pursuant to Section 10(c), (y) prior to the Closing Date, Sellers and
Buyer shall, to the extent feasible, negotiate in good faith and agree
upon reasonable interim arrangements relating to the ownership and
operation of the Nontransferred Assets between the Closing Date and
the date such assets are actually sold (or caused to be sold) by
Sellers to Buyer or its Affiliate and (z) following the Closing Date,
Sellers and Buyer shall cooperate with each other regarding, and shall
use commercially reasonable efforts to cause, the sale of the
Nontransferred Assets and the payment of the withheld amount by wire
transfer of immediately available funds as soon as reasonably
practicable after the Closing Date.
(b) Purchase Price Adjustment.
(i) Within 60 days after the Closing Date, Sellers shall
prepare and deliver to Buyer a balance sheet of the Companies and the
Subsidiary as of the opening of business on the Closing Date (such
balance sheet, in its final and binding form, the "Closing Net Book
Value Statement"). The Closing Net Book Value Statement shall be
prepared, and shall fairly present in all material respects the Net
Book Value as of the opening of business on the Closing Date, in
accordance with the Applicable Accounting Principles in a manner
consistent with the preparation of the Initial Net Book Value
Statement (without regard to any purchase accounting adjustments
arising out of the consummation of the transactions contemplated
hereby) and the principles set forth on Schedule 2(b) hereto (the
"Adjustment Principles") which, in the event of a conflict with the
Applicable Accounting Principles, shall control. The parties agree
that the adjustment contemplated
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<PAGE> 17
by this Section 2(b) is solely intended to show changes in the assets
and the liabilities reflected in Net Book Value from June 17, 1995 to
the Closing and that any such change can only be measured if the
Closing Net Book Value Statement is prepared using the same
methodologies, practices and principles (subject to the immediately
preceding sentence) as were used in connection with the preparation of
the Initial Net Book Value Statement. During the preparation of the
Closing Net Book Value Statement and the period of any dispute with
respect thereto, Buyer shall and shall cause the Companies and the
Subsidiary to (A) provide Sellers and Sellers' representatives with
reasonable access during normal business hours and upon reasonable
notice to the books, records (including work papers, schedules,
memoranda and other documents), facilities and employees of the
Companies and the Subsidiary, (B) provide Sellers as promptly as
practicable following the Closing Date (but in no event later than 15
days after the Closing Date) with normal year-end closing financial
information for the Companies and the Subsidiary for the period ending
as of the opening of business on the Closing Date, and (C) cooperate
fully with Sellers and Sellers' representatives, including the
provision on a timely basis of all information reasonably necessary or
useful in connection with the preparation of the Closing Net Book
Value Statement. The Closing Net Book Value Statement shall be
accompanied by a special purpose report by Coopers & Lybrand L.L.P.,
acting on behalf (and at the expense) of Sellers, to the effect that
the Closing Net Book Value Statement has been prepared in accordance
with this Section 2(b). During the 30 days immediately following
Buyer's receipt of the Closing Net Book Value Statement, Buyer shall
be permitted to review Coopers & Lybrand L.L.P.'s working papers
relating to the issuance of their special report on the Closing Net
Book Value Statement. The Closing Net Book Value Statement shall
become final and binding upon the parties on the thirtieth day
following receipt thereof by Buyer unless Buyer gives written notice
of its disagreement (a "Notice of Disagreement") to Sellers prior to
such date. Any Notice of Disagreement shall (A) specify in reasonable
detail the nature and amount of any disagreement so asserted, (B) only
include disagreements based on mathematical errors or based on the
Closing Net Book Value Statement not being prepared in accordance with
this Section 2(b) and (C) be accompanied by a certificate of Buyer
that it has complied with the covenants set forth in paragraph (iv) of
this Section 2(b). If a timely Notice of Disagreement is received by
Seller, then the Closing Net Book Value Statement (as revised in
accordance with clause (x) or (y) below) shall become final and
binding upon the parties on the earlier of (x) the date the parties
hereto resolve in writing any
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<PAGE> 18
differences they have with respect to any matter specified in the
Notice of Disagreement or (y) the date any matters properly in dispute
are finally resolved in writing by the Accounting Firm. During the 30
days immediately following the delivery of a Notice of Disagreement,
Sellers and Buyer shall seek in good faith to resolve in writing any
differences which they may have with respect to any matter specified
in the Notice of Disagreement. During such period, Sellers shall have
reasonable access during normal business hours and upon reasonable
notice to the working papers of Buyer prepared in connection with
Buyer's preparation of the Notice of Disagreement. At the end of such
30-day period, Sellers and Buyer shall submit to Ernst & Young L.L.P.
(the "Accounting Firm") for review and resolution of any and all
matters which remain in dispute and which were properly included in
the Notice of Disagreement, and the Accounting Firm shall make a final
determination of the Closing Net Book Value Statement which shall be
binding on the parties (it being understood, however, that the
Accounting Firm shall act as an arbitrator to determine, based solely
on presentations by Buyer and Sellers (and not by independent review),
only those matters which remain in dispute and which were properly
included in the Notice of Disagreement). The Closing Net Book Value
Statement shall become final and binding on Buyer and Sellers on the
date the Accounting Firm delivers its final resolution to the parties
(which final resolution shall be delivered as soon as practicable
following the selection of the Accounting Firm). The Accounting Firm
shall be selected by Sellers and Buyer or, if the parties are unable
to agree, by Sellers' and Buyer's independent accountants. The fees
and expenses of the Accounting Firm pursuant to this Section 2(b)
shall be borne 50% by Buyer and 50% by Sellers.
(ii) The Initial Purchase Price shall be either increased
by the amount by which the Net Book Value reflected on the Closing Net
Book Value Statement exceeds the Net Book Value reflected on the
Initial Net Book Value Statement or decreased by the amount by which
the Net Book Value reflected on the Initial Net Book Value Statement
exceeds the Net Book Value reflected on the Closing Net Book Value
Statement (the Initial Purchase Price, as so increased or decreased,
being referred to herein as the "Final Purchase Price"). If the
Initial Purchase Price is less than the Final Purchase Price, Buyer
shall, and if the Initial Purchase Price is greater than the Final
Purchase Price, Sellers shall, within five business days after the
Closing Net Book Value Statement becomes final and binding on the
parties, make payment to the other party by wire transfer in
immediately available funds of the amount of such difference, together
with interest thereon at the prime
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<PAGE> 19
rate as announced from time to time by the First National Bank of
Chicago (the "Applicable Rate") calculated on the basis of the number
of days elapsed from the Closing Date to the date of payment.
(iii) The term "Net Book Value" shall mean the total assets
of the Companies and the Subsidiary minus the total liabilities of the
Companies and the Subsidiary, in each case as reflected on the Initial
Net Book Value Statement or the Closing Net Book Value Statement, as
the case may be.
(iv) Buyer agrees that following the Closing it will not
take any actions with respect to the accounting books, records,
policies and procedures of the Companies and the Subsidiary that would
obstruct or prevent the preparation of the Closing Net Book Value
Statement as provided in this Section 2(b). Buyer will cooperate in
the preparation of the Closing Net Book Value Statement, including
providing customary certifications to Sellers or, if requested, to
Sellers' auditors or the Accounting Firm.
(v) The adjustment to the purchase price for the UK
Assets provided in the UK Asset Purchase Agreement is separate from,
and shall not affect or be affected by, the determination of the Final
Purchase Price under this Agreement.
3. Conditions to Closing.
(a) Buyer's Obligation. The obligation of Buyer to purchase
and pay for the Shares, the UK Assets and the Other Assets and assume the UK
Assumed Liabilities and the Assumed Liabilities is subject to the satisfaction
(or waiver by Buyer) as of the Closing of the following conditions:
(i) The representations and warranties of Sellers made in
this Agreement (other than those in Section 4(q)(ii)) shall be true
and correct as of the date hereof and such representations and
warranties (together with the representations and warranties made in
the UK Asset Purchase Agreement) shall be true and correct on and as
of the Closing Date, as though made on and as of the Closing Date,
except to the extent of changes or developments contemplated by the
terms of this Agreement and the UK Asset Purchase Agreement and except
for representations and warranties that speak as of a specific date or
time (which need only be true and correct as of such date or time),
and Sellers shall have performed or complied with all obligations and
covenants required by this Agreement to be performed or complied with
by Sellers by the
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<PAGE> 20
time of the Closing, except for breaches of such representations and
warranties and covenants that, in the aggregate, together with all
information disclosed in any supplements, modifications and updates to
the Schedules by Sellers prior to the Closing as permitted by this
Agreement, would not have a Material Adverse Effect; and Sellers shall
have delivered to Buyer certificates dated the Closing Date and signed
by a Vice President of each Seller confirming the foregoing;
(ii) No injunction or order of any court or administrative
agency of competent jurisdiction shall be in effect as of the Closing
which restrains or prohibits the consummation of the Stock Purchase
and the transfer of the Other Assets;
(iii) The waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall
have expired or been terminated; and
(iv) Sellers, the Companies and the Subsidiary (as
appropriate) shall have executed and delivered, or shall have caused
to be executed and delivered, the Co-Generation Guaranty Assignment,
the Development Agreement, the Distribution Agreement, the Know-How
License Agreement, the Lease Agreement, the Transition Services
Agreement, the Technology License Agreement, the Trademark License
Agreement, the Tulare License Agreement and the UK Asset Purchase
Agreement, (collectively, the "Ancillary Agreements").
(b) Sellers' Obligation. The obligation of Sellers to
sell and deliver or cause to be sold and delivered the Shares, the UK Assets
and the Other Assets to Buyer is subject to the satisfaction (or waiver by
Sellers) as of the Closing of the following conditions:
(i) The representations and warranties of Buyer made in
this Agreement shall be true and correct in all material respects as
of the date hereof and on and as of the Closing Date, as though made
on and as of the Closing Date, except to the extent of changes or
developments contemplated by the terms of the Agreement and except for
representations and warranties that speak as of a specific date or
time (which need only be true and correct as of such date or time),
and Buyer shall have performed or complied in all material respects
with the obligations and covenants required by this Agreement to be
performed or complied with by Buyer by the time of the Closing; and
Buyer shall have delivered to Sellers a certificate dated the Closing
Date and signed by the President or a Vice President of Buyer
confirming the foregoing;
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<PAGE> 21
(ii) No injunction or order of any court or administrative
agency of competent jurisdiction shall be in effect as of the Closing
which restrains or prohibits the consummation of the Stock Purchase
and the transfer of the Other Assets;
(iii) The waiting period under the HSR Act shall have
expired or been terminated; and
(iv) Buyer shall have executed and delivered each of the
Ancillary Agreements.
4. Representations and Warranties of Sellers. Sellers
hereby jointly and severally represent and warrant to Buyer as follows:
(a) Authority; No Conflicts.
(i) Each of Kraft, KFBC, the Companies and the Subsidiary
is a corporation duly organized, validly existing and in good standing
under the laws of the state or other jurisdiction of its
incorporation. Each of Kraft, KFBC, the Companies and the Subsidiary
has all requisite corporate power and authority to enter into this
Agreement and such Ancillary Agreements, to the extent any is a party
hereto or thereto, as are contemplated hereby to be executed and
delivered by it and to consummate the transactions contemplated hereby
and thereby. All corporate acts and other proceedings required to be
taken by each of Kraft, KFBC, the Companies and the Subsidiary to
authorize the execution, delivery and performance of this Agreement
and such Ancillary Agreements, to the extent any is a party hereto or
thereto, and the consummation of the transactions contemplated hereby
and thereby, have been or will have been at or prior to the Closing
duly and properly taken. This Agreement has been duly executed and
delivered by Sellers, and such Ancillary Agreements as are
contemplated hereby to be executed and delivered by any of Kraft,
KFBC, the Companies and the Subsidiary will, to the extent any is a
party thereto, be duly and validly executed and delivered by Kraft,
KFBC, such Company or the Subsidiary, as applicable. This Agreement
and such Ancillary Agreements constitute, or will constitute, as the
case may be, valid and binding obligations of Kraft, KFBC, the
Companies and the Subsidiary, to the extent any is a party thereto,
enforceable against Kraft, KFBC, the Companies and the Subsidiary, as
applicable, in accordance with their respective terms.
(ii) Subject to the matters disclosed on Schedule
4(a)(ii), the execution and delivery of this Agreement by
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<PAGE> 22
Sellers and the execution and delivery of such Ancillary Agreements as
are contemplated hereby to be executed and delivered by any of Kraft,
KFBC, the Companies and the Subsidiary, to the extent any is a party
thereto, do not or will not, as the case may be, and the consummation
by any of Kraft, KFBC, the Companies and the Subsidiary of the
transactions contemplated hereby and thereby and compliance by any of
Kraft, KFBC, the Companies and the Subsidiary with the terms hereof
and thereof will not, conflict with, or constitute any violation of or
default (or an event which, with notice or lapse of time or both,
would constitute 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 Properties or other assets of Kraft, KFBC,
the Companies and the Subsidiary under, or require any consent,
authorization or approval under any provision of the certificate of
incorporation or by-laws of any of Kraft, KFBC, the Companies or the
Subsidiary, any material contract or any material judgment, order or
decree or any material statute, law, ordinance, rule or regulation
applicable to any of Kraft, KFBC, the Companies and the Subsidiary or
the assets of any of Kraft, KFBC, the Companies and the Subsidiary,
other than any such conflicts, violations, defaults, rights or liens,
claims, encumbrances, security interests, options, charges or
restrictions that, individually or in the aggregate, would not have a
Material Adverse Effect and would not impair the ability of Sellers to
consummate the transactions contemplated hereby, and other than any
such consents, authorizations or approvals required under the HSR Act
or that may be required solely by reason of Buyer's participation in
the transactions contemplated hereby.
(b) Ownership of the Shares. KFBC is the record and
beneficial owner of all of the Shares. The sale and delivery of the Shares to
Buyer pursuant to this Agreement will vest in Buyer all right, title and
interest in the Shares, free and clear of all adverse claims (as defined under
U.C.C. Section 8-302(2)), other than adverse claims created by or through or
suffered by Buyer.
(c) Organization and Standing of the Companies and the
Subsidiary. Each of the Companies and the Subsidiary is a corporation duly
organized and validly existing under the laws of the state or other
jurisdiction of its incorporation as set forth on Schedule 4(c). Each of the
Companies and the Subsidiary has all requisite corporate power and authority
and possesses all governmental franchises, licenses, permits, authorizations
and approvals necessary to enable it to carry on its business as
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<PAGE> 23
presently conducted other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, would not have a Material Adverse Effect. Each of the Companies and
the Subsidiary is duly qualified and in good standing to do business in the
respective jurisdictions set forth under each entity's name on Schedule 4(c).
The jurisdictions set forth on Schedule 4(c) constitute a complete list of all
jurisdictions in which the ownership or leasing of the respective properties of
the Companies and the Subsidiary or the conduct of their respective operations
makes such qualification or good standing necessary other than such
qualifications or good standings the lack of which, individually or in the
aggregate, would not have a Material Adverse Effect. Sellers have made
available to Buyer true and complete copies of (i) the Certificate of
Incorporation, as amended to the date of this Agreement, and the By-laws, as in
effect on the date hereof, of each of the Companies and the Subsidiary and (ii)
the stock certificate and transfer books of each of the Companies and the
Subsidiary. Except for the capital stock of the Subsidiary, none of the
Companies nor the Subsidiary directly or indirectly owns any capital stock of
or other equity interests in any corporation, partnership or other entity.
(d) Capital Stock of the Companies and the Subsidiary.
Schedule 4(d) sets forth for each of the Companies and the Subsidiary the
amount of its authorized capital stock, the amount of its outstanding capital
stock and the record owners of its outstanding capital stock. All the
outstanding shares of capital stock of each of the Companies and the Subsidiary
have been duly authorized and validly issued and are fully paid and
nonassessable. Neither the Shares nor any shares of capital stock of the
Subsidiary has been issued in violation of, and none of the Shares or shares of
capital stock of the Subsidiary is subject to, any preemptive or subscription
rights. Except as set forth on Schedule 4(d), there are no shares of capital
stock or other equity securities of any of the Companies or the Subsidiary
outstanding. There are no outstanding warrants, options, "phantom" stock
rights, agreements, convertible or exchangeable securities or other commitments
(other than this Agreement) pursuant to which any of Kraft, KFBC, the Companies
or the Subsidiary is or may become obligated to issue, sell, purchase, return
or redeem any shares of capital stock or other securities of any of the
Companies and the Subsidiary, and no equity securities of the Companies or the
Subsidiary are reserved for issuance for any purpose. Entenmann's is the
record owner of all the outstanding shares of capital stock of the Subsidiary.
Entenmann's has all right, title and interest in the shares of capital stock of
the Subsidiary, free and clear of all adverse claims (as defined under U.C.C.
Section 8-302(2)), other than adverse claims created by or through or suffered
by Buyer.
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<PAGE> 24
(e) Financial Schedules. Schedule 4(e) sets forth pro
forma statements of results of operations for the Companies and the Subsidiary
for the 52-week period ended December 18, 1993, the 52-week period ended
December 17, 1994 and the 26-week period ended June 17, 1995, and a statement
(the "Initial Net Book Value Statement") setting forth the Net Book Value as of
June 17, 1995, in each case together with the notes thereto (such schedules,
together with the Initial Net Book Value Statement, being referred to herein as
the "Financial Schedules"). The Financial Schedules have been derived from the
accounting books and records of KFBC, the Companies and the Subsidiary and
present fairly in all material respects the results of operations for the
Companies and the Subsidiary on the pro forma basis described in the notes
thereto for the respective periods covered thereby and the statement of Net
Book Value as of June 17, 1995 on the basis described in the notes thereto, in
each case in accordance with United States generally accepted accounting
principles, consistently applied, except as otherwise provided in the Financial
Schedules (such accounting principles, together with the exceptions thereto,
being referred to herein as the "Applicable Accounting Principles").
(f) Title to Tangible Assets Other than Real Property
Interests. The Companies and the Subsidiary have good and valid title to all
the material tangible assets reflected in the Initial Net Book Value Statement,
except those sold or otherwise disposed of since the date of the Initial Net
Book Value Statement in the ordinary course of business consistent with past
practice (and subject to Section 5(b) hereof), free and clear of all mortgages,
liens, security interests, charges, pledges, hypothecations, restrictions,
options, claims, disputes, leases or other encumbrances of any nature
whatsoever, except (i) such as are disclosed on Schedule 4(f) or the other
Schedules hereto, (ii) mechanics', carriers', workmen's, repairmen's or other
like liens arising or incurred in the ordinary course of business which are not
yet delinquent or the validity of which are being contested in good faith by
appropriate proceedings, (iii) liens arising under original purchase price
conditional sales contracts and equipment leases with third parties entered
into in the ordinary course of business, (iv) liens for taxes, assessments and
other governmental charges which are not yet delinquent or the validity of
which are being contested in good faith by appropriate proceedings and for
which the appropriate Company or Subsidiary has set aside on its books adequate
reserves with respect thereto, and (v) other imperfections of title,
restrictions or encumbrances, if any, which imperfections of title,
restrictions or encumbrances do not, individually or in the aggregate,
materially impair the continued use and operation of the assets to which they
relate in the operation of the Companies and the Subsidiary as currently
conducted (collectively, the "Permitted Liens"). The Sellers and
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<PAGE> 25
their respective Affiliates have good and valid title to all tangible assets
included in the Other Assets, free and clear of all mortgages, liens, security
interests, charges, pledges, hypothecations, restrictions, options, claims,
disputes, leases or other encumbrances of any nature whatsoever, except the
Permitted Liens. This Section 4(f) does not relate to real property or
interests in real property, it being the intent of the parties that such items
are the subject of Section 4(g).
(g) Title to Real Property. The term "Owned Properties"
as used herein means (x) all real property and interests in real property owned
in fee by any of KFBC, the Companies, or the Subsidiary as set forth on
Schedule 4(g)-1 and (y) the North Tulare facility, owned by Kraft and located
in Tulare, California (the "Tulare Facility") and the portion of the Anaheim
facility (the "Anaheim Facility") located in Anaheim, California constituting
the leased premises under the Lease Agreement (each of the properties described
in clauses (x) and (y) is referred to individually as an "Owned Property").
Sellers shall use all commercially reasonable efforts to obtain and deliver to
Buyer, prior to the Closing, current surveys (the cost of which shall be
divided equally) of all properties listed on Schedule 4(g)-2 (the "Surveyed
Properties"), provided, however, (a) Seller's delivery of said surveys prior to
the closing of the transaction contemplated hereby shall not be considered a
condition to Buyer's obligation to purchase the Shares and the Other Assets and
to assume the Assumed Liabilities, and (b) Seller's failure to deliver said
surveys (i) shall not be considered a default under this Agreement and (ii)
shall not delay the Closing. Sellers shall obtain, prior to the Closing, title
commitments from Chicago Title Insurance Corporation for each Owned Property.
Provided Sellers shall not be required to expend any monies, post any bonds or
act as a surety to the title insurance company, Sellers shall, at or prior to
the Closing, deliver or cause to be delivered such commercially reasonable
affidavits, certificates, information and instruments of indemnification as
shall be reasonably required to induce the title insurance company to issue
owners' title insurance policies covering the Owned Properties (i) free of any
exceptions for (x) rights of parties in possession other than the insured and
(y) mechanics' and materialmen's liens and (ii) together with endorsements
regarding extended coverage, zoning, non-imputation access and/or location.
Sellers have made available to Buyer complete copies of all title insurance
commitments, title insurance policies and surveys in their, the Companies' and
the Subsidiary's possession relating to the Properties. Schedule 4(g)-3 sets
forth a list of real properties leased by a Company or the Subsidiary pursuant
to leases under which the applicable Company or the Subsidiary (a) has an
annual base rental obligation in excess of $50,000 or (b) has an aggregate base
rental liability for the remaining term (exclusive
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of renewal or extension periods) of the applicable lease in excess of $250,000
(individually, a "Leased Property"). The Leased Properties are the only real
properties leased by the Companies and the Subsidiary which are material to the
current operation of the Business conducted by the Companies and the
Subsidiary. An Owned Property or Leased Property shall be sometimes referred
to herein individually as a "Property" and collectively as the "Properties".
The Companies and the Subsidiary and Kraft (with respect to the Tulare Facility
and the Anaheim Facility) have good and marketable fee simple title to each of
the Owned Properties and valid leasehold interests in all Leased Properties, in
each case free and clear of all mortgages, liens, security interests, charges,
pledges, hypothecations, restrictions, options, claims, disputes, leases,
easements, covenants, rights-of-way and other similar restrictions of any
nature whatsoever, except (i) Permitted Liens (other than those referred to in
clause (iii) of the definition thereof), (ii) easements, covenants,
rights-of-way and other restrictions of record,(iii) any conditions that may be
shown by a current, accurate survey or physical inspection of the relevant
Property made prior to the Closing and which shall not, as of the Closing and
for a period of two years thereafter, individually or in the aggregate,
materially impair the use and operation of the Property affected thereby as
currently used or operated, (iv) current general real estate taxes and
installments for special assessments which are not yet due and payable, (v)
existing unrecorded leases, licenses and possession or occupancy agreements, if
any, which shall not, as of the Closing and for a period of two years
thereafter, individually or in the aggregate, materially impair the use and
operation of the Property affected thereby as currently used or operated, (vi)
(A) zoning, building, fire, health, environmental and pollution control laws,
ordinances, rules and safety regulations and other similar restrictions, (B)
liens, security interests or encumbrances that have been placed by any
developer, landlord or other third party on property over which any of the
Companies or the Subsidiary has easement rights or on any Leased Property and
subordination or similar agreements relating thereto, (C) mortgages, the
liability for which has been accounted for in the Initial Net Book Value
Statement, and (D) unrecorded easements, covenants, rights-of-way, liens or
other restrictions which shall not, as of the Closing and for a period of two
years thereafter, individually or in the aggregate, materially impair the use
and operation of the Property affected thereby as currently used or operated,
and (vii) acts done or suffered to be done by, and judgments against, Buyer and
those claiming by, through or under Buyer, and (viii) any and all orders,
decrees, awards or judgments related to (A) any eminent domain or condemnation
proceedings or (B) the Americans with Disabilities Act. Sellers shall use
commercially reasonable efforts in order to cause the title company to delete
or insure over any and all unpermitted
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title exceptions under this Section 4(g); provided, however, (a) such
obligation shall not be deemed a condition to Buyer's obligation to purchase
the Shares and the Other Assets and to assume the Assumed Liabilities and (b)
Sellers' failure to cause the deletion or insurance over such unpermitted
exceptions (i) shall not be considered a breach or give rise to a claim for
indemnity under this Agreement and (ii) shall not delay the Closing.
(h) Intellectual Property. Except as disclosed on
Schedule 4(h), as of the date of this Agreement, the Companies and the
Subsidiary own or have the right to use, without payment to any other party,
the Intellectual Property and all material trade secrets and know-how used in
the Business. Except as set forth on Schedule 4(h), no material claims are
pending or, to the knowledge of any of Sellers, the Companies or the
Subsidiary, threatened against any of the Companies or the Subsidiary as of the
date of this Agreement by any person with respect to the ownership or use of
any of the Intellectual Property. Except as set forth on Schedule 4(h), no
licenses, sublicenses or agreements pertaining to any of the Intellectual
Property have been granted or entered into by any of the Companies or the
Subsidiary. To the knowledge of the Sellers, each of the Sellers, the
Companies and the Subsidiary have taken all reasonable steps in accordance with
customary industry standards to maintain the confidentiality of the material
trade secrets and know-how used in the Business. To the knowledge of the
Sellers, the Companies and the Subsidiary, each of the trademarks and service
marks included among the Intellectual Property are valid and enforceable. None
of the Sellers, the Companies or the Subsidiary have received any notices of,
nor are aware of any facts which indicate a likelihood of, any infringement by
any third party with respect to those trademarks and service marks included
among the Intellectual Property. Prior to the Closing, Kraft shall assign to
the Companies and the Subsidiary its entire right, title and interest in and to
all know-how used exclusively in the Business. Although the Companies and the
Subsidiary may own or have the right to use intellectual property not set forth
on Schedule 4(h) (the "Other Intellectual Property"), except as expressly set
forth herein with respect to material trade secrets and know-how, Buyer
acknowledges and agrees that Sellers have not made and are not making any
representation or warranty of any type, express or implied (including any
implied warranties of noninfringement or title), as to such Other Intellectual
Property and any information provided to Buyer regarding the Other Intellectual
Property is being provided for informational purposes only. As between the
parties, Buyer further acknowledges and agrees that any trade secrets, know-how
or other confidential technical and business information not used exclusively
in the Business is the exclusive property of the Sellers and that neither
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Buyer, the Companies nor the Subsidiary has any rights therein, except as set
forth in the Know-How License Agreement. Except as set forth on Schedule 4(h),
the Companies and the Subsidiary have or will receive pursuant to the
transactions contemplated by this Agreement and the Ancillary Agreements the
right to use, without payment to any other party other than maintenance and
transfer fees, all software applications currently in use by the Companies and
the Subsidiary that are material to the Business.
(i) Material Contracts. Schedule 4(i) sets forth a list
as of the date of this Agreement of each of the following types of
written contracts to which any of the Companies or the Subsidiary is a
party:
(i) any employment agreement or employment contract with
any officer or director of any of the Companies or the Subsidiary that
has future liability in excess of $150,000 per annum and is not
terminable by notice of not more than 60 calendar days for a cost of
less than $150,000;
(ii) any employee collective bargaining agreement;
(iii) any covenant not to compete that materially impairs
the Business;
(iv) any lease or similar agreement under which any of the
Companies or the Subsidiary is a lessor or sublessor of, or makes
available for use by any third party, any real property owned or
leased by any of the Companies and the Subsidiary or any portion of
premises otherwise occupied by any of the Companies or the Subsidiary,
in any case which has future liability in excess of $150,000 per annum
and is not terminable by notice of not more than 60 calendar days for
a cost of less than $150,000;
(v) any lease or similar agreement under which (A) any of
the Companies or the Subsidiary is lessee of, or holds or uses, any
machinery, equipment, vehicle or other tangible personal property
owned by a third party or (B) any of the Companies or the Subsidiary
is a lessor or sublessor of, or makes available for use by any third
party, any tangible personal property owned or leased by any of the
Companies or the Subsidiary; in any case which has future liability in
excess of $250,000 per annum and is not terminable by notice of not
more than 60 calendar days for a cost of less than $250,000;
(vi) any agreement or contract under which any of the
Companies or the Subsidiary has borrowed or loaned any money
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or issued any note, bond, indenture or other evidence of indebtedness
or directly or indirectly guaranteed indebtedness, liabilities or
obligations of others (other than endorsements for the purpose of
collection, loans made to employees for relocation, travel or other
employment-related purposes, or purchases of equipment or materials
made under conditional sales contracts, in each case in the ordinary
course of business), or any other note, bond, indenture or other
evidence of indebtedness, in each case having an outstanding principal
amount in excess of $500,000;
(vii) any agreement or contract under which any other
person has directly or indirectly guaranteed indebtedness, liabilities
or obligations of any of the Companies or the Subsidiary (other than
endorsements for the purpose of collection in the ordinary course of
business), in each case having an outstanding principal amount or
aggregate future liability in excess of $500,000; or
(viii) any other agreement, contract, lease, license,
commitment or instrument, in each case not included in clauses (i)
through (vii) above, to which any of the Companies or the Subsidiary
is a party or by or to which any of their assets are bound or subject
which has future liability in excess of $1,000,000 per annum and is
not terminable by notice of not more than 60 calendar days for a cost
of less than $1,000,000 (other than purchase contracts and orders for
inventory in the ordinary course of business consistent with past
practice).
Sellers have delivered to, or made available for inspection
by, Buyer a copy of each contract, lease, license, instrument or other
agreement listed on Schedule 4(i) as amended to date. Except as disclosed on
4(i) or the other Schedules hereto, each contract, lease, license, commitment,
instrument or other agreement of any of the Companies and the Subsidiary
required by this Section 4(i) to be described on Schedule 4(i) (collectively,
the "Material Contracts") is valid, binding and in full force and effect and is
enforceable by a Company or the Subsidiary, as applicable, in accordance with
its terms. Except as disclosed in Schedule 4(i) or the other Schedules hereto,
a Company or the Subsidiary, as applicable, has performed all material
obligations required to be performed by it to date under the Material Contracts
and is not (with or without the lapse of time or the giving of notice, or both)
in breach or default in any material respect thereunder.
(j) Litigation; Decrees. Schedule 4(j) sets forth a
list, as of the date of this Agreement, of all pending lawsuits or claims
(excluding lawsuits or claims for workers' compensation)
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with respect to which any Company or the Subsidiary has received service of
process against any Company or the Subsidiary or any of their respective
properties, assets, operations or businesses or the Other Assets or, to the
Sellers' knowledge, which have been threatened, and which (A) involve a claim
against any Company or the Subsidiary, as applicable, of, or which involve an
unspecified amount which could reasonably be expected to result in liability
of, more than $250,000, (B) seek any material injunctive relief which would
affect Buyer's acquisition, ownership or operation of the Companies and the
Subsidiary, or (C) directly relate to the transactions contemplated by this
Agreement. To the knowledge of Sellers, except as disclosed on Schedule 4(j),
none of the Companies or the Subsidiary is in default under any material
judgment, order or decree of any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign.
(k) Absence of Changes or Events. Except as set forth on
Schedule 4(k) or the other Schedules hereto, since June 17, 1995, there has
been no material adverse change in the Business, properties, condition
(financial or otherwise) or results of operations of the Companies and the
Subsidiary taken as a whole, other than changes resulting from developments or
occurrences relating to or affecting United States or foreign economies in
general or the industry of the Companies and the Subsidiary in general and not
specifically relating to the Companies and the Subsidiary, and other than
changes that are the result of actions taken by Buyer prior to the Closing Date
or as contemplated herein that have an effect on the Companies and the
Subsidiary. Buyer acknowledges that there may be a disruption to the Business
as a result of the execution of this Agreement, the announcement by Buyer of
its intention to purchase the Companies and the Subsidiary or the announcement
by Kraft of its intention to sell the Companies and the Subsidiary, and the
consummation of the transactions contemplated hereby, and Buyer agrees that
such disruptions do not and shall not constitute a breach of this Section 4(k).
(l) Compliance with Applicable Laws.
(i) Except as set forth on Schedule 4(l)(i) or the other
Schedules hereto, or as previously disclosed by Sellers to Buyer in
writing, to the knowledge of Sellers, the Companies, the Subsidiary,
Kraft (with respect to the Tulare Facility and the Anaheim Facility)
and their respective Properties are in compliance in all respects with
all applicable statutes, laws, ordinances, rules, orders and
regulations of any governmental authority or instrumentality, except
to the extent any instances of non-compliance would not result in a
Material Adverse Effect. Except as set forth on Schedule 4(l)(i) or
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the other Schedules hereto, or as previously disclosed by Sellers to
Buyer in writing, to the knowledge of Sellers, since December 31,
1994, none of the Companies, the Subsidiary or Kraft (with respect to
the Tulare Facility and the Anaheim Facility) has received any written
communication from a governmental authority that alleges that any of
them or any of their Properties is not in compliance with all federal,
state or local laws, rules and regulations, except to the extent any
instances of non-compliance would not result in a Material Adverse
Effect. Notwithstanding the foregoing, Buyer acknowledges and agrees
that Sellers have not made and are not making any representation or
warranty that any of the Properties are in compliance with the
Americans with Disabilities Act. This Section 4(l)(i) does not relate
to environmental matters, it being the intent of the parties that
environmental matters are the subject of Section 4(l)(ii).
(ii) Sellers have provided Buyer with copies of or access
to certain environmental reports relating to certain of the
Properties, true and correct copies of which are attached as part of
Schedule 4(l)(ii) (the "Environmental Reports"). Except as set forth
in the Environmental Reports or in Schedule 4(l)(ii), (A) since
December 31, 1993, none of Sellers, the Companies and the Subsidiary
has received any written communication from a governmental authority
that alleges that any Company, the Subsidiary, Kraft (with respect to
the Tulare Facility and the Anaheim Facility) or Kraft Jacobs (with
respect to the UK Business) is not in compliance, in all material
respects, with or has material liability (other than executory
obligations of the type referred to in Section 4(q)) under any
Environmental Laws (Buyer hereby acknowledges that Sellers have
received written notices from governmental entities regarding Sellers'
failure to timely file reports regarding certain underground storage
tanks, which notices are no longer pending or such filing issue has
otherwise been resolved), and (B) to the knowledge of Sellers, the
Companies, the Subsidiary, Kraft (with respect to the Tulare Facility
and the Anaheim Facility) and Kraft Jacobs (with respect to the UK
Business) hold, and are in compliance with, all material permits,
licenses and governmental authorizations (collectively,
"Authorizations") required for the Companies, the Subsidiary, Kraft
(with respect to the Tulare Facility and the Anaheim Facility) and
Kraft Jacobs (with respect to the UK Business) to operate under
Environmental Laws, and are in compliance with all Environmental Laws,
except for failures to have such Authorizations and instances of
noncompliance which, individually or in the aggregate, would not have a
Material Adverse Effect. As used in this Agreement, the term
"Environmental Laws" means all
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laws, rules and regulations relating to pollution or the protection of
the environment and includes, without limitation, the Clean Air Act,
as amended, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended ("CERCLA"), the Resource Conservation and
Recovery Act, as amended ("RCRA"), the Clean Water Act, as amended.
(m) Employee Benefit Plans.
(i) Schedule 4(m) lists all of the material pension,
retirement, profit sharing, savings, deferred compensation, health,
life insurance, disability, accidental death and dismemberment, stock
option, stock bonus, restricted stock, stock appreciation right, stock
purchase, bonus, incentive compensation, severance, and other employee
benefit plans (other than multiemployer plans (as defined in Section
3(37) of ERISA)) maintained or contributed to by Sellers, the
Companies or the Subsidiary with respect to current or former
employees of the Companies or the Subsidiary or the employees listed
on Schedule 8(f)-2 (the "Bakery Employee Benefit Plans"). Sellers
have delivered to, or made available for inspection by, Buyer a copy
of each Bakery Employee Benefit Plan, including all amendments
thereto. Sellers have provided or made available to Buyer the name of
each multiemployer plan contributed to by Sellers, the Companies or
the Subsidiaries with respect to the employees of the Companies or the
Subsidiary or the employees listed on Schedule 8(f)-2, and Sellers,
the Companies and the Subsidiaries have made all contributions which
are due under each such multiemployer plan and have not withdrawn from
any such multiemployer plan. With respect to each Bakery Employee
Benefit Plan to be assumed or retained by Buyer, the Companies or the
Subsidiary on or after the Closing, Sellers have delivered to, or made
available for inspection by, Buyer a copy of: (i) any trust
agreements thereunder, (ii) any current summary plan descriptions,
(iii) the most recent Forms 5500, financial statements and actuarial
reports, if applicable, and (iv) the most recent Internal Revenue
Service determination letter, if applicable.
(ii) All Bouyea-Fassets Benefit Plans which are "employee
benefit plans" (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) are in compliance
in all material respects with the applicable requirements of law,
including ERISA and the Code.
(iii) Each Bouyea-Fassets Benefit Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable
determination letter that it is so qualified and that its trust is
exempt from taxation, and Sellers are not
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aware of any facts which would cause such favorable determination
letters to be revoked.
(iv) With respect to each Bakery Employee Benefit Plan to
be assumed or retained by Buyer, the Companies or the Subsidiary on or
after the Closing, (A) there have been no non-exempt prohibited
transactions within the meaning of Section 4975 of the Code or Section
406 of ERISA, (B) all contributions to and payments from the plan
which are required to have been made have been timely made, (C) there
has been no waiver of the minimum funding requirements of Section 412
of the Code or of Part 3 of Subtitle B of Title I of ERISA, (D) there
are no investigations pending by any governmental entity, (E) all
applicable reporting and disclosure requirements have been satisfied,
(F) there are no pending or threatened claims (other than routine
claims for benefits), suits or proceedings, (G) there has been no
reportable event within the meaning of Section 4043 of ERISA and the
regulations thereunder, (H) no notice of intent to terminate has been
filed with the Pension Benefit Guaranty Corporation, and (I) the
Pension Benefit Guaranty Corporation has not instituted proceedings to
terminate the plan or to appoint a trustee to administer the plan.
Clauses (G), (H) and (I) relate only to plans subject to Title IV of
ERISA.
(n) Taxes. Except as regards the Companies' liability
for Other Taxes for periods or portions of periods ending on or prior to the
Closing Date for purposes of applying Sections 4(e) and 4(q), none of the
representations and warranties in this Section 4 shall be construed to apply to
compliance with or violation of any Tax law. Except as stated in the preceding
sentence, Section 10 of this Agreement contains Seller's representations and
warranties on Taxes.
(o) Sufficiency of Assets. The assets and properties of
the Companies and the Subsidiary and the Other Assets constitute all of the
assets and properties, together with Buyer's rights under the Ancillary
Agreements, which are necessary for the conduct of the Business by the
Companies and the Subsidiary except for (i) assets and properties disposed of
in the ordinary course of business consistent with past practice (and subject
to Section 5(b) below) and (ii) assets and properties owned by Kraft and its
Affiliates and used in the performance by Kraft and its Affiliates of services
for the Companies and the Subsidiary, including: Central Research; Corporate
Market Services; Data Processing Systems; Human Resources; Legal Counsel; Tax
and Audit; Real Estate; Operations Systems; Treasury Services; Payroll
Administration; Pension Administration; Purchasing (including the Shared
Contracts); and Risk Management.
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(p) Insurance. As of the date hereof, each of the
Companies and the Subsidiary and Kraft (with respect to the Tulare Facility and
the Anaheim Facility) is covered (subject to applicable deductibles,
self-insurance provisions and other limitations on coverage) by valid insurance
policies issued in favor of Sellers or their respective Affiliates and/or any
of the Companies or the Subsidiary. Sellers have not received any notices of
cancellation or non-renewal with respect to any such policies, all premiums due
thereon have been paid and Sellers, the Companies, the Subsidiary and such
Affiliates have complied with the provisions of such policies (except for
notices of cancellation or nonrenewal, failures to pay premiums and to comply
which, individually or in the aggregate, would not have a Material Adverse
Effect). To the knowledge of Sellers, workmen's compensation loss runs
provided or made available to Buyer covering the last ten years were received
in the ordinary course of business, have been relied upon by Sellers in the
conduct of the Business and accurately reflect the loss information shown
thereon in all material respects.
(q) Liabilities.
(i) To the knowledge of Sellers, there are no liabilities
of the Companies and the Subsidiary which would have a Material
Adverse Effect and which are not reflected on the Initial Net Book
Value Statement, except for liabilities incurred in the ordinary
course consistent with past practice (subject to Section 5(b) below)
since June 17, 1995, liabilities for which Sellers have responsibility
under this Agreement, and liabilities of the type not required by
generally accepted accounting principles to be reflected on a balance
sheet; and, to the knowledge of Sellers, all contingent liabilities
relating to the Business as of June 17, 1995 have been adequately
reserved for on the Initial Net Book Value Statement except that no
representation is made as to (A) retiree medical and life insurance
liabilities, (B) liabilities for which Sellers have responsibility
under this Agreement, (C) workmen's compensation liabilities, (D)
Environmental Losses and (E) liabilities for executory obligations
(excluding liabilities for breach or non-compliance) to be performed
after the Closing either under contracts, permits and similar
instruments or under applicable laws which executory obligations do
not require accruals under generally accepted accounting principles
(collectively, the liabilities referred to in clauses (A) through (E)
shall constitute the "Excluded Liabilities") and except to the extent
the failure to maintain adequate reserves would not have a Material
Adverse Effect.
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(ii) At the opening of business on the Closing Date there
will be, to the knowledge of Sellers, no liabilities, including
contingent liabilities (whether or not required by generally accepted
accounting principles to be reflected on a balance sheet), of the
Companies and the Subsidiary which will not be fully reserved for on
the Closing Net Book Value Statement except that no representation is
made as to the Excluded Liabilities (it being understood that (x) the
adequacy of reserves shall be determined by the total amount of
reserves as reflected on the Closing Net Book Value Statement,
excluding reserves for Excluded Liabilities, in relation to the total
amount of liabilities, excluding Excluded Liabilities, (y) this
sentence is intended solely to serve as a basis for sharing
indemnification responsibility, shall not serve as the basis for a
fraud claim, shall not have any effect on the manner of preparation of
the Closing Net Book Value Statement and shall not have any effect
upon the condition set forth in Section 3(a)(i) and (z) the Closing
Net Book Value Statement shall not reflect any purchase accounting
adjustments relating to the transactions contemplated by this
Agreement).
5. Covenants of Sellers. Sellers jointly and severally
covenant and agree as follows:
(a) Access. Prior to the Closing, Sellers shall grant to
Buyer or cause to be granted to Buyer and its representatives, employees,
counsel and accountants reasonable access, during normal business hours and
upon reasonable notice, to the personnel, properties, books and records of
Kraft Jacobs, KFBC, the Companies and the Subsidiary relating to the transition
of the Business and the UK Business to Buyer; provided, however, that such
access does not unreasonably interfere with the normal operations of Kraft
Jacobs, KFBC or the Companies and the Subsidiary; and provided further, that
all requests for access to members of management of Kraft, Kraft Jacobs, KFBC,
the Companies and the Subsidiary shall be directed to Rosemary Ripley, Vice
President of Philip Morris Companies Inc., or such other person as Sellers may
designate from time to time. Buyer shall indemnify and hold Sellers, the
Companies and the Subsidiary and their respective Affiliates, officers,
shareholders, directors and employees harmless against any and all losses,
liabilities, expenses and damages or actions or claims with respect thereto
resulting from claims suffered or incurred by any of Sellers, Kraft Jacobs,
KFBC, the Companies and the Subsidiary and any of their respective Affiliates,
officers, shareholders, directors and employees arising out of or with respect
to Buyer's or its representatives', agents' or employees' exercise of Buyer's
rights under this Section 5(a) or the mere presence of any of them upon any of
the Properties or any property
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<PAGE> 36
owned or leased by Kraft Jacobs. Notwithstanding any provision in this
Agreement to the contrary, Buyer's obligations under this Section 5(a) shall
survive the termination of this Agreement and the consummation of the
transactions contemplated hereby.
(b) Ordinary Conduct. Except as permitted by the terms
of this Agreement or as set forth in Schedule 5(b), from the date hereof to the
Closing, Sellers will cause the Companies and the Subsidiary to conduct the
Business and Kraft Jacobs to conduct the UK Business in the ordinary course
consistent with past practice. Sellers will cause the Companies and the
Subsidiary to maintain all of their material properties and assets in
substantially the same working condition and repair as of the date hereof,
consistent with past practice, except for ordinary wear and tear, casualties,
and acts of God. Kraft, through the Closing, will maintain the Tulare Facility
and the Anaheim Facility and cause Kraft Jacobs to maintain the Bristol
Facility in substantially the same working condition and repair as of the date
hereof, consistent with past practice except for ordinary wear and tear,
casualties and acts of God; provided, however, that proceeds of insurance in
respect of any such casualty or act of God shall be utilized to repair or
restore the facility or assets affected thereby. Except as provided in this
Agreement or Schedule 5(b), from the date hereof until the Closing, none of
Sellers, the Companies or the Subsidiary will do any of the following without
the prior written consent of Buyer (written requests for which should be
directed to Hanes A. Heller, Deputy General Counsel):
(i) amend its Certificate of Incorporation or Bylaws;
(ii) declare or pay any dividend or make any other
distributions to its shareholders whether or not upon or in respect of
any shares of its capital stock; provided, however, that Buyer
acknowledges that (x) the Companies and the Subsidiary do not maintain
cash balances and, at or prior to the time of the Closing, Sellers
will withdraw any cash balances of any of the Companies and the
Subsidiary, (y) dividends or distributions may continue to be made by
the Subsidiary to any of the Companies and (z) dividends or
distributions of cash may continue to be made by any of the Companies
to Sellers;
(iii) redeem or otherwise acquire any shares of its capital
stock or issue any capital stock or any option, warrant or right
relating thereto or any securities convertible into or exchangeable
for any shares of capital stock;
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(iv) make any material change in the conduct of the
Business, except as specifically contemplated by this Agreement;
(v) sell, lease, license or otherwise dispose of, or
agree to sell, lease, license or otherwise dispose of, any interest in
any of the assets that are material, individually or in the aggregate,
to the Companies and the Subsidiary, taken as a whole, except for
sales of inventory in the ordinary course of business consistent with
past practice;
(vi) permit, allow or subject any of the assets or Owned
Properties owned by any of the Companies, the Subsidiary or Kraft
(with respect to the Tulare Facility and the Anaheim Facility) or the
leasehold interests of the Companies and the Subsidiary in the Leased
Properties to any mortgage, pledge, security interest, encumbrance or
lien or suffer such to be imposed, except for Permitted Liens;
(vii) except in the ordinary course of business consistent
with past practice or as required by law or contractual obligations or
other agreements existing on the date hereof, increase in any manner
the compensation of, or enter into any new bonus or incentive
agreement or arrangement with, any of its directors or officers;
(viii) assume, incur or guarantee any obligation for
borrowed money (other than intercompany indebtedness) having an
outstanding principal amount in excess of $500,000 in the aggregate;
(ix) except in the ordinary course of business consistent
with past practice or as otherwise provided for in this Agreement,
enter into a new agreement that would be included within the
definition of Material Contracts if it had been entered into as of the
date of this Agreement or amend in a material manner any of the
Material Contracts;
(x) enter into or terminate, or agree to enter into or
terminate, a lease of real property which is (or would be) a Leased
Property, except that Buyer acknowledges and consents to any of the
Companies or the Subsidiary entering into any lease the negotiation of
which has commenced prior to the date of this Agreement or any renewal
of a lease to which any of the Companies or the Subsidiary is a party;
provided, however, that any such lease shall contain terms and
provisions which shall be consistent with past practice;
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(xi) make any material alteration in the manner of keeping
its books, accounts or records, or in the accounting practices therein
reflected or methods by which such principles are applied except as
required by law or generally accepted accounting principles (in which
case notice shall be given to Buyer); or
(xii) except in jurisdictions for which a Section
338(h)(10) election (or its equivalent) is effective, make or revoke
any Tax election (including any change in accounting method) or amend
any Tax Return previously filed in a manner that may materially affect
any Tax item of a Company or the Subsidiary or the Other Assets or the
UK Assets.
(c) Confidentiality. Each Seller agrees that after the
Closing Date each Seller shall and shall use all commercially reasonable
efforts to cause their respective directors, officers, employees, former
employees, advisors and Affiliates to keep the Information (as defined below)
confidential following the Closing Date, except that any Information required
by law or legal or administrative process to be disclosed may be disclosed
without violating the provisions of this Section 5(c), and except that any
Information may be used and disclosed (i) in connection with the exercise or
performance by Sellers of their respective rights and obligations under the
Ancillary Agreements, and (ii) in connection with the development, manufacture,
sale or distribution of any product other than those currently manufactured or
sold by the Business but including any bagel or pizza product, in each case
without violating the provisions of this Section 5(c). At Buyer's request,
Seller shall use legal action, including the commencement of litigation, if
required to enforce such confidentiality obligations, and Buyer shall reimburse
Seller for all reasonable out-of-pocket expenses (including the fees and
expenses of counsel) incurred in connection with such legal action as is
requested by Buyer. For purposes hereof, the term "Information" means all
information exclusively concerning the Business and the UK Business, other than
any such information that is available to the public on the Closing Date, or
thereafter becomes available to the public other than as a result of a breach
of this Section 5(c), or is developed independently by Sellers or their
respective Affiliates or is obtained from third parties.
(d) Preservation of Business. Subject to the terms and
conditions of this Agreement, Sellers shall, and shall cause the Companies and
the Subsidiary and Kraft Jacobs to, use commercially reasonable efforts
consistent with past practices to preserve the Business and the UK Business
intact, to preserve the goodwill of customers and suppliers of the Companies
and the Subsidiary and the UK Business, and to retain their respective key
employees.
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(e) Resignations. At the Closing, Sellers shall cause to
be delivered to Buyer duly signed resignations, effective immediately after the
Closing, of all directors and officers of the Companies and the Subsidiary
(other than those directors and officers designated in writing by Buyer to
Sellers at least five business days prior to the Closing Date), or shall take
such other action as is necessary to ensure that such persons are not directors
or officers of the Companies and the Subsidiary after the Closing.
(f) Covenant Not to Compete. Sellers agree that neither
Sellers nor any Affiliate of Sellers will, for a period of three (3) years from
the Closing Date, manufacture, sell or distribute anywhere in the world any
fresh bakery product of a type currently manufactured and sold by the Business
with a shelf code of two weeks or less (the "Restricted Business"), provided,
however, Sellers or any Affiliate of Sellers may at any time (i) manufacture,
sell or distribute (A) any bagel product, (B) any pizza or similar Italian food
product (other than pizza shells of the type currently sold under the Boboli
trademark), (C) any product containing or utilizing bread or other bakery
product as wrapping, shell or other component which has meat, cheese, fruits,
vegetables or sauce as a principal component, including any sandwich type
product, (D) any packaged cookie or biscuit product with a shelf code of more
than two weeks or (E) any product with respect to which the bakery product
content is incidental or supplemental, (ii) purchase, or otherwise become
affiliated with or participate in, any enterprise engaged in the Restricted
Business in the United States or Canada if (A) twenty-five percent (25%) or
less of the aggregate gross revenues in the United States and Canada for its
most recently completed fiscal year were derived from the Restricted Business
and (B) the aggregate gross revenues from the Restricted Business in the
United States and Canada for its most recently completed fiscal year were
$50,000,000 or less, (iii) purchase, or otherwise become affiliated with or
participate in, any enterprise engaged in the Restricted Business anywhere in
the world other than the United States or Canada if 20% or less of the
aggregate gross revenues of such enterprise outside the United States and
Canada for its most recently completed fiscal year were derived from the
Restricted Business, or (iv) engage in any joint marketing, promotion or
in-store merchandising program for products of either Seller or Sellers'
respective Affiliates and any products produced by or for any person,
partnership, corporation or entity not bound by this Section 5(f) so long as
no such program shall be intended to create the impression that such
Seller or Affiliate is engaged in the Restricted Business. Notwithstanding the
foregoing, Sellers or their respective Affiliates may hereafter acquire a
controlling interest in any enterprise that is engaged in the Restricted
Business, even if the limitations provided in clauses
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(ii) or (iii) above are exceeded, so long as the applicable Seller or Affiliate
shall divest, within one year of such acquisition, the Restricted Business such
that the applicable limitations set forth above would not be exceeded after
giving effect to such divestiture. Sellers agree that neither Sellers nor any
Affiliate controlled by Sellers will, for a period of two years from the
Closing Date, solicit any of the present employees of the Companies or the
Subsidiary while they are so employed, which employees have had responsibility
relating to, or oversight of, baking or research and development, except for
solicitations pursuant to general advertising (it being understood that
solicitations do not include offers of employment in response to unsolicited
inquiries by any such employee).
(g) Accounts Receivable. Except as otherwise provided in
Section 7(e), Sellers shall promptly forward or cause to be forwarded to Buyer
any and all proceeds from accounts receivable reflected on the Closing Net Book
Value Statement that are received by Sellers or their respective Affiliates
after the Closing Date.
6. Representations and Warranties of Buyer. Buyer
hereby represents and warrants to Sellers as follows:
(a) Authority; No Conflicts.
(i) Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Buyer has all requisite corporate power and authority to enter into
this Agreement and the Ancillary Agreements and to consummate the
transactions contemplated hereby and thereby. All corporate acts and
other proceedings required to be taken by Buyer to authorize the
execution, delivery and performance of this Agreement and the
Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly and properly taken.
This Agreement has been duly executed and delivered by Buyer, and the
Ancillary Agreements to be executed and delivered by Buyer will be
duly and validly executed and delivered by Buyer. This Agreement and
the Ancillary Agreements constitute, or will constitute, as the case
may be, valid and binding obligations of Buyer, enforceable against
Buyer in accordance with their terms.
(ii) The execution and delivery of this Agreement by Buyer
and the execution and delivery of such Ancillary Agreements as are
contemplated hereby to be executed and delivered by any of Buyer and
its Affiliates to the extent any is a party thereto, do not or will
not, as the case may be, and the consummation by any of Buyer and its
Affiliates of the
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transactions contemplated hereby and thereby and compliance by any of
Buyer and its Affiliates with the terms hereof and thereof will not,
conflict with, or constitute any violation of, or default (or event
which with notice or lapse of time or both, would constitute) 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 assets of Buyer and
such Affiliates under, or require any consent, of incorporation or
by-laws of any of Buyer and such Affiliates, any material contract or
any material judgment, or order or decree applicable to any Buyer and
such Affiliates, other than any such conflicts, violations, defaults,
rights or liens, claims, encumbrances, security interests, options,
charges or restrictions that, individually or in the aggregate, would
not impair the ability of Sellers to consummate the transactions
contemplated hereby, and other than any such consents, authorizations
or approvals required under the HSR Act or that may be required solely
by reason of Seller's participation in the transactions contemplated
hereby.
(b) Actions and Proceedings, etc. There are no (i)
outstanding judgments, orders, writs, injunctions or decrees of any court,
governmental agency or arbitration tribunal against Buyer which have or could
have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby or (ii) actions, suits, claims or legal,
administrative or arbitration proceedings or investigations pending or, to the
knowledge of Buyer, threatened against Buyer, which have or could have a
material adverse effect on the ability of Buyer to consummate the transactions
contemplated hereby.
(c) Availability of Funds. Buyer has cash available, or
irrevocable commitments from financial institutions, to enable it to consummate
the transactions contemplated by this Agreement.
(d) Acquisition of Shares for Investment. The Shares
purchased by Buyer pursuant to this Agreement are being acquired for investment
only and not with a view to any public distribution thereof, and Buyer will not
offer to sell or otherwise dispose of the Shares so acquired by it in violation
of any of the registration requirements of the Securities Act of 1933, as
amended, or any comparable state law.
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7. Covenants of Buyer. Buyer covenants as follows:
(a) Confidentiality.
(i) Buyer acknowledges that all information provided to
any of it and its Affiliates, agents and representatives by any of
Sellers, the Companies or the Subsidiary and their respective
Affiliates, agents and representatives is subject to the terms of a
confidentiality agreement between or on behalf of Sellers and Buyer or
one or more of their respective Affiliates or other beneficial owners
(the "Diligence Confidentiality Agreement"), the terms of which are
hereby incorporated herein by reference. Effective upon, and only
upon, the Closing, the Diligence Confidentiality Agreement shall
terminate; provided, however, that Buyer acknowledges that the
Diligence Confidentiality Agreement shall terminate only with respect
to information provided to any of Buyer and its Affiliates, agents or
representatives that relates solely to the Companies and the
Subsidiary, the Other Assets and the Assumed Liabilities; and provided
further, however, that Buyer acknowledges that any and all information
provided or made available to any of it and its Affiliates, agents and
representatives by or on behalf of Sellers (other than information
relating solely to the Companies and the Subsidiary, the Other Assets
and the Assumed Liabilities) shall remain subject to the terms and
conditions of the Diligence Confidentiality Agreement after the
Closing Date.
(ii) Buyer agrees that, after the Closing Date, Buyer, the
Companies and the Subsidiary shall, and shall use their commercially
reasonable efforts to cause their respective directors, officers,
employees, former employees, advisors and Affiliates to, keep the
Seller Information (as defined below) confidential following the
Closing Date, except that any such Seller Information required by law
or legal or administrative process to be disclosed may be disclosed
without violating the provisions of this Section 7(a)(ii). Buyer
agrees that, except as expressly set forth herein and in the Ancillary
Agreements, after the Closing Date, Buyer, the Companies and the
Subsidiary shall not use, and shall use their commercially reasonable
efforts to cause their respective directors, officers, employees,
former employees, advisors and Affiliates not to use, directly or
indirectly, any Seller Information other than as applicable in the
operation of the Business. At Sellers' request, Buyer shall, or shall
cause the applicable Company or Subsidiary to, use legal action,
including the commencement of litigation, if required to enforce such
confidentiality obligations, and Sellers shall reimburse Buyer for all
reasonable out-of-pocket expenses (including the fees
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and expenses of counsel) incurred in connection with such legal action
as is requested by Sellers. For purposes of this Agreement, the term
"Seller Information" shall mean all information concerning Kraft, KFBC
or their Affiliates, including any trade secrets, know-how and other
confidential technical and business information, other than
information that relates exclusively to the Business, the Other Assets
and the Assumed Liabilities and other than any such information that
is available to the public on the Closing Date, or thereafter becomes
available to the public other than as a result of a breach of this
Section 7(a)(ii).
(b) Performance of Obligations by Buyer After Closing
Date. On and after the Closing Date, Buyer shall or shall cause the Companies
and the Subsidiary to duly, promptly and faithfully pay, perform and discharge
when due, (i) all obligations and liabilities of whatever kind and nature,
primary or secondary, direct or indirect, absolute or contingent, known or
unknown, whether or not accrued, whether arising before, on or after the
Closing Date, of any of the Companies and the Subsidiary or included in the
Assumed Liabilities, including, without limitation, any such obligations or
liabilities contained in each of the Material Contracts and (ii) any liability
or obligation of Kraft or KFBC and their respective Affiliates with respect to
any of the liabilities described in clause (i), including, without limitation,
any guarantee or obligation to assure performance given or made by Kraft or
KFBC and their respective Affiliates with respect to any such obligation of any
of the Companies and the Subsidiary set forth in clause (i) above.
(c) No Additional Representations; Disclaimer Regarding
Estimates and Projections. Buyer acknowledges that neither Kraft nor KFBC, nor
any other person or entity acting on behalf of Sellers or any Affiliate of
Sellers (i) has made any representation or warranty express or implied,
including any implied representation or warranty, as to the condition,
merchantability, suitability or fitness for a particular purpose of any of the
assets used in the Business or the UK Business or held by the Companies and the
Subsidiary, or the Other Assets, or (ii) has made any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding the Business, the UK Business, the Other Assets, the
Companies, or the Subsidiary, in each case except as expressly set forth in
this Agreement or as and to the extent required by this Agreement to be set
forth in the Schedules hereto. Buyer further agrees that neither Kraft, KFBC
nor any other person or entity will have or be subject to any liability to
Buyer or any other person resulting from the distribution to Buyer, or Buyer's
use of, any such information, including the Information Memorandum prepared by
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Wasserstein Perella & Co. dated June 1995 (the "Information Memorandum") and
any information, document, or material made available to Buyer in certain "data
rooms," management presentations or any other form in expectation of the
transactions contemplated by this Agreement.
In connection with Buyer's investigation of the Companies and
the Subsidiary, Buyer has received from or on behalf of Sellers certain
projections, including projected statements of operating revenues, variable
contribution, and income from operations of the UK Business, and the Companies
and the Subsidiary for the fiscal year ending in December 1995 and for
subsequent fiscal years and certain business plan information for such fiscal
year and succeeding fiscal years. Buyer acknowledges that there are
uncertainties inherent in attempting to make such estimates, projections and
other forecasts and plans, that Buyer is familiar with such uncertainties, that
Buyer is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, projections and other forecasts and
plans so furnished to it (including the reasonableness of the assumptions
underlying such estimates, projections and forecasts), and that Buyer shall
have no claim against Sellers with respect thereto. Accordingly, Sellers make
no representation or warranty with respect to such estimates, projections and
other forecasts and plans (including the reasonableness of the assumptions
underlying such estimates, projections and forecasts).
(d) Notification. [Omitted.]
(e) Customer Deductions.
(i) Following the Closing, Buyer shall reimburse Kraft
for all deductions taken or made by customers against any accounts
receivable or invoices of Kraft and its Affiliates arising out of any
trade promotion (including in-ad coupons) or trade allowance programs
or discounts arising out of the Business.
(ii) Each party shall comply with the following procedures
in dealing with customer deductions for which Kraft seeks
reimbursement from Buyer:
(A) Kraft shall give written notice (the
"Deduction Notice") to Buyer of any customer deductions within
90 days following Kraft's receipt thereof; provided that the
failure to give such notice within 90 days shall not affect
Kraft's rights hereunder, except to the extent that Buyer is
actually prejudiced thereby; and
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(B) Within ten (10) business days following
delivery of a Deduction Notice, Buyer shall tender to Kraft a
check or wire transfer in the aggregate amount of the customer
deductions set forth therein. Any amounts not tendered to
Kraft on a timely basis may be offset against any proceeds
from accounts receivable relating to the Business that Kraft
is otherwise required to forward to Buyer pursuant to Section
5(g) or against any amounts that Kraft owes to Buyer pursuant
to any other provision of this Agreement or any of the
Ancillary Agreements. Late payments of any such amounts shall
bear simple interest at the Applicable Rate.
(iii) Nothing in this Section 7(e) shall restrict Buyer
from contesting any deduction that a customer has taken or made;
provided that Buyer reimburses Kraft for the deduction so made or
taken and seeks to recover the alleged wrongful deduction directly
from the customer.
(f) Certain Guaranties. Buyer shall use its commercially
reasonable efforts to cause itself to be substituted in all respects for
Sellers or their Affiliates (as applicable) (or, in the case of the guaranties
by Philip Morris Capital Corporation ("PMCC") covering potential liabilities
associated with certain underground storage tanks as more fully described in
attached Schedule 7(f), otherwise satisfy the federal and state financial
assurance legal requirements related thereto), effective as of the Closing, in
respect of all obligations of Sellers and their respective Affiliates under
each of the guaranties obligations or other obligations set forth on Schedule
7(f) (individually, a "Guaranty", and collectively, the "Guaranties"). Copies
of each of the Guaranties have been provided or made available to Buyer. If
Buyer is unable to effect such a substitution with respect to any Guaranty (or,
in the case of the PMCC guaranty, otherwise satisfy the federal and state
financial assurance requirements) after using commercially reasonable efforts
to do so, Buyer shall obtain letters of credit in favor of Sellers (or their
Affiliates) with respect to all obligations and liabilities of the applicable
Seller or Affiliate under such Guaranty, on terms, in amounts and from
financial institutions reasonably satisfactory to Sellers. As a result of the
substitution contemplated by the first sentence of this Section 7(f) and/or the
letter or letters of credit contemplated by the immediately preceding sentence,
Sellers and their Affiliates shall from and after the Closing cease to have any
obligation whatsoever arising from or in connection with the Guaranties (and
shall have the right to unilaterally terminate the coverage of the PMCC
guaranties with respect to the properties covered thereby) except
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for obligations, if any, for which Sellers or their appropriate Affiliates will
be fully indemnified pursuant to a letter of credit obtained by Buyer and
except as otherwise specifically provided in Section 11(a).
8. Mutual Covenants. Sellers and Buyer covenant and
agree as follows:
(a) Consents.
(i) Buyer acknowledges that certain consents (to the
extent disclosed in the Schedules to this Agreement, the "Scheduled
Consents") to the transactions contemplated by this Agreement may be
required from parties to contracts, leases, licenses or other
agreements (written or otherwise) to which any of Kraft, KFBC, the
Companies and/or the Subsidiary or any of their respective Affiliates
is a party (including but not limited to the Material Contracts) and
such consents have not been obtained. Buyer agrees Sellers shall not
have any liability whatsoever to Buyer arising out of or relating to
the failure to obtain any Scheduled Consent that may have been or may
be required in connection with the transactions contemplated by this
Agreement or because of the default, acceleration or termination of
any such contract, lease, license or other agreement as a result
thereof. Buyer further agrees that no representation, warranty or
covenant of Sellers contained herein shall be breached or deemed
breached and no condition of Buyer shall be deemed not to be satisfied
as a result of the failure to obtain any Scheduled Consent or as a
result of any such default, acceleration or termination or any
lawsuit, action, claim, proceeding or investigation commenced or
threatened by or on behalf of any persons arising out of or relating
to the failure to obtain any Scheduled Consent or any such default,
acceleration or termination. At Buyer's written request prior to the
Closing, Sellers shall cooperate with Buyer in any reasonable manner
in connection with Buyer's obtaining any such Scheduled Consent;
provided, however, that such cooperation shall not include any
requirement of Sellers to expend money, commence any litigation or
offer or grant any accommodation (financial or otherwise) to any third
party.
(ii) Buyer acknowledges that the contracts and
arrangements that are listed or described on Schedule 8(a) attached
hereto under the heading "Shared Contracts" shall not be assigned in
whole or in part by either of Kraft or KFBC or any of their respective
Affiliates to Buyer (such contracts and arrangements being referred to
herein as the "Shared Contracts"). With respect to any Shared
Contract, at Buyer's request prior to the Closing, Sellers shall
cooperate with
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Buyer in any reasonable manner in connection with Buyer's efforts to
obtain the agreement of the other party or parties to any such Shared
Contract to enter into a separate agreement with Buyer with respect to
the matters covered by such Shared Contract as they relate to the
Business; provided, however, that such cooperation shall not include
any requirement of Sellers to expend money, commence any litigation or
offer or grant any accommodation (financial or otherwise) to any third
party. Buyer agrees that Sellers shall not have any liability
whatsoever to Buyer arising out of or relating to the failure to
obtain any such separate agreement. Buyer further agrees that no
representation, warranty or covenant of Sellers contained herein shall
be breached or deemed breached, and no condition of Buyer shall be
deemed not satisfied, as a result of the failure to obtain any such
separate agreement or as a result of any facts relating to the Shared
Contracts.
(iii) With respect to any contracts, leases, licenses or
other agreements referred to in Section 8(a)(i) that are not assigned
to Buyer because of the failure to obtain a required consent
("Nontransferred Contract") or any Shared Contract with respect to
which Buyer has requested Sellers' cooperation in accordance with
Section 8(a)(i) or 8(a)(ii) and with respect to which Sellers and
Buyer are unable to obtain a separate agreement between Buyer and the
other party or parties, Buyer shall have the right to require that
Sellers use reasonable efforts to perform any such Nontransferred
Contract or Shared Contract, to the extent it relates to the Business,
as agent for and for the account of Buyer, for a period up to six
months following the Closing Date; provided that Buyer shall indemnify
and hold Sellers harmless from and against any and all costs,
expenses, losses and liabilities (including fees and expenses of
counsel) incurred by Sellers in connection with taking such action.
(iv) With respect to the contracts and arrangements listed
on Schedule 8(a)(ii) hereto (the "Partially Transferred Contracts"),
Buyer hereby agrees to use commercially reasonable efforts to induce
any third party to such contracts to agree to assign to the Buyer
those rights under such contracts relating primarily to the Business
(the "Relevant Rights"), and Buyer further agrees to assume all
obligations related to such rights so assigned. Sellers hereby agree
to cooperate with Buyer as reasonably requested to assist Buyer in
securing the assignment of such rights and the assumption of the
liabilities related thereto. If Sellers and Buyer are unable to
obtain such assignment and assumption, either Sellers or Buyer shall
have the right to require that the other enter into any reasonable
arrangement pursuant to which
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Buyer shall obtain the Relevant Rights (and shall perform the
corresponding obligations) until the termination or expiration of such
Partially Transferred Contract.
(b) Cooperation. Buyer and Sellers shall cooperate with
each other and shall cause their respective officers, employees, agents and
representatives to cooperate with each other for a period of sixty (60) days
after the Closing to provide for an orderly transition of the Companies and the
Subsidiary and the Other Assets and the Assumed Liabilities to Buyer and to
minimize the disruption to the respective businesses of the parties hereto
resulting from the transactions contemplated hereby. Each party shall
reimburse the other for reasonable out-of-pocket costs and expenses incurred in
assisting the other pursuant to this Section 8(b). No party shall be required
by this Section 8(b) to take any action that would unreasonably interfere with
the conduct of its business.
(c) Publicity. Sellers and Buyer agree that, from the
date hereof through the Closing Date, no public release or announcement
concerning the transactions contemplated hereby shall be issued or made by any
party without the prior consent of the other party (which consent shall not be
unreasonably withheld), except (i) as such release or announcement may be
required by law or the rules or regulations of any United States securities
exchange, in which case the party required to make the release or announcement
shall allow the other party reasonable time to comment on such release or
announcement in advance of such issuance, and (ii) that each of Kraft, the
Companies and the Subsidiary may make such an announcement to their respective
employees. Notwithstanding the foregoing, Buyer and Sellers shall cooperate to
prepare a joint press release to be issued on the Closing Date and, upon the
request of either Buyer or Sellers, at the time of the signing of this
Agreement. Sellers and Buyer agree to keep the terms of this Agreement
confidential, except to the extent required by applicable law or for financial
reporting purposes and except that the parties may disclose such terms to their
respective accountants and other representatives as necessary in connection
with the ordinary conduct of their respective businesses (so long as such
persons agree to keep the terms of this Agreement confidential).
(d) HSR Act Compliance. Buyer and Sellers shall each
file or cause to be filed with the Federal Trade Commission and the United
States Department of Justice any notifications required to be filed under the
HSR Act with respect to the transactions contemplated hereby and Buyer and
Sellers shall bear the costs and expenses of their respective filings; provided
that Buyer shall pay the filing fee in connection therewith. Buyer and Sellers
shall
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use their respective best efforts to make such filings promptly (and in any
event within 10 business days) following the date hereof, to respond to any
requests for additional information made by either of such agencies and to
cause the waiting periods under the HSR Act to terminate or expire at the
earliest possible date and to resist in good faith, at each of their respective
cost and expense (including the institution or defense of legal proceedings),
any assertion that the transactions contemplated hereby constitute a violation
of the antitrust laws, all to the end of expediting consummation of the
transactions contemplated hereby. Each of Buyer and Kraft shall consult with
the other prior to any meetings, by telephone or in person, with the staff of
the Federal Trade Commission and the United States Department of Justice, and
each of Buyer and Kraft shall have the right to have a representative present
at any such meeting.
(e) Promotional Materials and Records.
(i) Except as contemplated by the Distribution Agreement,
on or as soon as reasonably practicable following the Closing, Buyer
shall destroy or deliver to Kraft or cause to be destroyed or
delivered to Kraft all existing print materials (including any
letterhead, stationery or business cards), promotional materials,
point-of-sale materials and advertising copy bearing the words
"Kraft", "General Foods" or "Lender's" and Buyer agrees it shall cease
to use or display the names "Kraft", "General Foods" or "Lender's" or
any variant thereof or name confusingly similar thereto.
(ii) Buyer and Sellers agree that Sellers may maintain
copies of any books and records of and other financial, personnel and
operations data relating to the Business, the UK Business, the Other
Assets and the Assumed Liabilities (collectively, the "Records") and
Sellers may prepare a comprehensive index and file plan of such
Records (the "File Plan"). Buyer agrees to maintain such Records in a
manner consistent with the File Plan for a period of not less than ten
years from the Closing Date (plus any additional time during which a
party has been advised that there is an ongoing tax audit with
respect to periods prior to the Closing Date, or such period is
otherwise open to assessment). During such period, Buyer agrees to
give Sellers and their representatives reasonable cooperation, access
(including copies) and staff assistance, as needed, during normal
business hours and upon reasonable notice, with respect to the
Records, and Sellers agree to give Buyer and its representatives
reasonable cooperation, access and staff assistance, as needed, during
normal business hours and upon reasonable notice, with respect to the
books and records and other
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financial data relating to the Business, the UK Business, and the
Other Assets and the Assumed Liabilities and retained by Sellers, in
each case as may be necessary for general business purposes, including
the preparation of tax returns and financial statements and the
management and handling of tax audits; provided that such cooperation,
access and assistance does not unreasonably disrupt the normal
operations of Buyer or Sellers. Buyer shall not destroy or otherwise
dispose of the Records for the period set forth in the immediately
preceding sentence without the written consent of Kraft.
(iii) Buyer and Sellers agree that Sellers may retain all
books, documents, records and files, including books of account,
relating in whole or in part to the manufacture, sale or distribution
of cheese products or any other products (other than Italian bread
shells) at the Tulare Facility, and that all other books, documents,
records and files at the Tulare Facility that relate to the Tulare
Facility shall be transferred to Buyer (collectively, all of the
books, documents, records and files referred to in this sentence shall
be referred to as the "Tulare Records"). The foregoing shall be
subject to Section (8)(e)(ii), including the provisions therein
regarding Sellers' right to keep copies of records, Buyer and Sellers'
obligations to provide access to certain records retained by each, and
Buyer's agreement not to destroy certain records without Kraft's
consent, all of which shall apply to the Tulare Records.
(f) Employee Benefits.
(i) Schedule 8(f)-1 attached hereto identifies employees
who as of the date hereof perform substantial services for the
Lender's bagels business and will be employed by Sellers immediately
following the Closing Date. Except as otherwise provided by the
immediately preceding sentence, Buyer agrees to (x) cause the
Companies and the Subsidiary to retain all of the employees employed
by the Companies and the Subsidiary on the Closing Date, except those
employees in receipt of or
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qualified for long term disability plan benefits under any plans
of Sellers or their Affiliates or employees on short-term disability
whose current disabilities first commence prior to the Closing Date,
provided, however, that each employee on short-term disability who
recovers from short-term disability will at that point be considered a
Bakery Employee and will immediately be retained or hired, as the case
may be, by Buyer; and (y) offer to hire all of the employees employed
by a Seller or its Affiliates who as of the date hereof perform
services primarily for the Business and are set forth on Schedule
8(f)-2, except those employees in receipt of or qualified for long term
disability plan benefits under any plans of Sellers or their Affiliates
or employees on short-term disability whose current disabilities first
commence prior to the Closing Date, provided, however, that each
employee on short-term disability who recovers from short-term
disability will at that point be considered a Bakery Employee and will
immediately be retained or hired, as the case may be, by Buyer (the
employees described in clauses (x) and (y) above are collectively
referred to herein as the "Bakery Employees") at substantially the same
salaries and wages, and with employee benefits, including medical,
disability and life insurance and retirement benefits, that are
substantially the same in the aggregate, as those provided to such
employees by the appropriate Seller, or Company or the Subsidiary, as
the case may be, immediately prior to the Closing Date, provided,
however, that Buyer agrees to provide the wages, employee benefits and
other terms and conditions of employment with respect to such employees
covered by a collective bargaining agreement in accordance with the
terms of the applicable collective bargaining agreement. With respect
to the employees on Schedule 8(f)-2 who accept employment with Buyer,
Buyer shall assume and be responsible for all accrued but not taken
vacation as of the Closing Date, and Sellers shall be responsible for
all accrued salary, wages and bonuses. Nothing in this Agreement shall
be construed as limiting in any way the right of Buyer, the Companies
or the Subsidiary at any time and from time to time, after the Closing
Date to terminate the employment of any Bakery Employee, to change his
or her salary or wages or to modify benefits or other terms and
conditions of employment of Bakery Employees as long as any changes to
salary or wages are done in accordance with Buyer's normal compensation
practices and as long as any modification to benefits or other terms
and conditions of employment of any non-union Bakery Employee made
within one year following the Closing Date apply generally to employees
or former employees of Buyer's bakery business. Sellers have
heretofore provided or made available to Buyer copies or summaries of
the Bakery Employee Benefit Plans. All of the employee benefit plans,
programs and policies maintained for the Bakery Employees in the
Bouyea-Fassets business (the "Bouyea- Fassets Benefit Plans") shall be
assumed or retained by Buyer. No other employee benefit plans,
programs or policies (other than the multiemployer plans) maintained
for any current or former Bakery Employees shall be assumed or retained
by Buyer, the Companies or the Subsidiary. Buyer agrees to continue
making contributions to each multiemployer plan contributed to by one
or more of the Sellers, the Companies or Subsidiary with respect to the
Bakery Employees. To the extent any applicable statutes, laws,
ordinances,
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rules, orders, or regulations of any governmental authority or
instrumentality requires that Buyer, any of the Companies or
Subsidiary provide any greater payment (including severance payments)
or provision of benefits than is required under this Agreement, Buyer,
such Company or Subsidiary shall comply with such applicable statute,
law, ordinance, rule, order or regulation.
Sellers shall retain liability for severance pay and
any related continuation of welfare benefits with respect to former
Bakery Employees receiving severance pay as of the Closing Date. If
Buyer terminates any Bakery Employee or subjects any Bakery Employee
to an indefinite lay-off, in each case other than for Cause (as
defined below) within two years following the Closing Date, Buyer
shall pay to such Bakery Employee (x) if such Bakery Employee was a
non-union employee immediately prior to the Closing Date, severance
and outplacement benefits no less favorable than would be provided
under the Buyer's severance plan for "Special Situations" (and Buyer
represents and warrants that such severance plan shall recognize
service with Buyer, Sellers, the Companies, the Subsidiary and
Sellers' Affiliates and provides severance at the rate of two weeks
base salary for each full year of service up to a maximum of 52 weeks
and with a minimum of one month's base salary), and (y) if such Bakery
Employee was a union employee immediately prior to the Closing Date,
severance pay in an amount equal to the amount that would be due under
the collective bargaining agreement applicable to such Bakery Employee
if such Bakery Employee was terminated on the Closing Date by the
appropriate Seller or Company or Subsidiary. Immediately following
the period of Buyer's payments of the severance benefits described
above, Sellers shall provide the following additional severance
benefits to the following Bakery Employees who are terminated by Buyer
or subjected to an indefinite lay-off by Buyer, in each case other
than for Cause (as defined below) within one year following the
Closing Date: (A) if such Bakery Employee was an exempt employee
immediately prior to the Closing Date, severance equal to the amount
by which (I)
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exceeds (II) where (I) is the greater of (w) six month's base
salary and (x) the severance benefit which would have been payable
under the applicable Seller, Company or Subsidiary severance pay plan
if such Employee was terminated on the Closing Date by the appropriate
Seller or Company or Subsidiary, and (II) is the severance benefit
payable under Buyer's severance pay plan; or (B) if such Bakery
Employee was a non-exempt salaried employee or an hourly, non-union
employee immediately prior to the Closing Date, severance equal to the
amount by which (I) exceeds (II) where (I) is the greater of (y) three
month's base salary and (z) the severance benefit which would have been
payable under the applicable Seller, Company or Subsidiary severance
pay plan if such Employee was terminated on the Closing Date by the
appropriate Seller or Company or Subsidiary and (II) is the severance
benefit payable under Buyer's severance pay plan ((A) and (B) being
referred to as the "Enhanced Severance Benefit"). The period during
which Sellers provide the Enhanced Severance Benefit shall be referred
to as the "Enhanced Severance Period." Buyer shall reimburse Sellers
in the amount by which the Enhanced Severance Benefit exceeds $4
million. For the entire period during which Buyer is required to pay
to any Bakery Employee severance pay under its severance pay plan
pursuant to this Section 8(f) (it being understood that such severance
pay shall be paid over the maximum period permitted under the relevant
plan and not in a lump sum), Buyer shall in addition continue to
provide such persons and their spouses and dependents medical, dental,
life insurance and such other benefits as provided under Buyer's
severance pay plan for such period at the same cost to such person as
if such person were still employed by Buyer. For the Enhanced Severance
Period, Buyer agrees to provide each such person and their spouses and
dependents medical, dental and life insurance benefits (the cost of
which shall be reimbursed by Sellers) and to provide Sellers with
information regarding when Bakery Employees become eligible for Buyer's
severance pay plan and the amount of such severance pay to enable
Sellers to calculate what, if any, Enhanced Severance Benefit is
payable by Sellers. If Buyer transfers any Bakery Employee and such
transfer causes such Bakery Employee to be subject to Buyer's
relocation policy benefits within two years after the Closing Date,
Buyer shall provide such person with relocation benefits not less
favorable than under Buyer's relocation policy. If Buyer either (A)
initially offers employment to a Bakery Employee at, or (B) within one
year following the Closing Date transfers a Bakery Employee to, in
either case, a job location which is greater than 50 miles from his or
her current job location and in either case the Bakery Employee
declines the offer of employment or job transfer and his or her
employment is terminated thereafter, Sellers shall pay severance
benefits to such Bakery Employee in accordance with the following: (x)
if such Bakery Employee was an exempt employee immediately prior to the
Closing Date, severance equal to the greater of (I) six month's base
salary and (II) the amount that would have been payable under the
applicable Seller, Company or Subsidiary severance pay plan if such
Employee was terminated on the Closing Date by the appropriate Seller
or Company or Subsidiary or (y) if such Bakery Employee was a
non-exempt
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salaried employee or a non-union hourly employee immediately prior to
the Closing Date, severance equal to the greater of (I) three month's
base salary and (II) the amount that would have been payable under the
applicable Seller, Company or Subsidiary severance pay plan if such
Employee was terminated on the Closing Date by the appropriate Seller
or Company or Subsidiary. For the entire period during which Sellers
pay the severance referred to in the immediately preceding sentence,
Buyer agrees to provide each such person and their spouses and
dependents medical, dental and life insurance benefits (the cost of
which shall be reimbursed by Sellers). For purposes hereof, the term
"Cause" means the Bakery Employee's material misconduct or inability
or refusal to perform his or her job responsibilities or conviction of
a felony, but shall not include the Bakery Employee's refusal to
relocate when such Bakery Employee had been eligible for Buyer's
relocation benefits.
(ii) With respect to each Bakery Employee:
(A) Buyer shall waive pre-existing
condition exclusions, evidence of insurability
provisions, waiting period requirements or any
similar provisions under any employee benefit plan or
compensation arrangements maintained or sponsored by
or contributed to by Buyer for such Bakery Employees
after the Closing Date; provided such conditions,
waiting periods, exclusions or similar provisions did
not preclude coverage for such Bakery Employee as of
the Closing Date under the comparable plans of
Sellers or their Affiliates.
(B) Effective on the Closing Date and
until December 31, 1995 (the "Transition Period"),
Sellers shall extend participation under its medical
and dental plans to Bakery Employees who participated
in such plans immediately prior to the Closing Date
(excluding any plans assumed by Buyer) and Buyer
shall reimburse Sellers for all of Sellers'
reasonable costs and expenses under such plans with
respect to the Bakery Employees (including costs for
benefits provided by Sellers' plans during or with
respect to the Transition Period). Effective on
January 1, 1996, all Bakery Employees who remain
employed by Buyer, a Company or the Subsidiary shall
be eligible to participate in Buyer's medical and
dental plans to the extent they are not excluded
taking into account (A) above.
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(C) Except as provided in (B) above,
Sellers' welfare benefit plans (other than the
welfare benefit plans for employees in the
Bouyea-Fassets business), shall be responsible for
expenses covered by Sellers' welfare benefit plans;
provided that such expenses were incurred prior to
the Closing Date, and Buyer's plans shall assume
responsibility for all other welfare plan benefit
claims relating to Bakery Employees incurred on or
after the Closing Date. However, Sellers' welfare
benefit plans shall remain responsible for all
welfare benefits that relate to employees on short or
long-term disability until, in the case of an
employee on short-term disability, such employee
becomes a Bakery Employee or Transferred Employee and
retained or hired by Buyer, a Company or the
Subsidiary as provided in paragraph (f)(i) above or
(f)(viii) below.
(D) Sellers shall fully vest all Bakery
Employees in all benefits accrued through the Closing
Date under Sellers' savings and pension plans that
are intended to qualify under Section 401(a) of the
Code and under Sellers' supplemental pension plan.
(E) Buyer shall recognize, for purposes
of eligibility to participate, early commencement of
benefits and vesting (including eligibility for and
amount of severance and vacation benefits but not for
purposes of benefit accrual and compensation
arrangements) under its employee benefits plans, the
service of each Bakery Employee with either Seller,
any of the Companies, Subsidiary or Sellers' other
Affiliates prior to the Closing Date.
(F) Except as provided in (B) above,
Sellers shall be responsible for satisfying
obligations under Section 601 et. seq. of ERISA and
Section 4980B of the Code, to provide continuation
coverage to or with respect to any Bakery Employee in
accordance with law with respect to any "qualifying
event" occurring before the Closing Date. Buyer
shall be responsible for satisfying obligations under
Section 601 et. seq. of ERISA and Section 4980B of
the Code, to provide continuation coverage to or with
respect to any Bakery Employee in accordance with law
with respect to any "qualifying event" which occurs
on or following the Closing Date.
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(G) Buyer shall be responsible for all
workers compensation benefits paid or payable to
active or former Bakery Employees on or after the
Closing Date with respect to injuries to active or
former Bakery Employees occurring prior to, on or
after the Closing Date irrespective of the date of
the original claim relating to any such injury.
(H) Sellers shall be liable for and
shall provide all post-retirement welfare benefits
for all active or former Bakery Employees to the
extent that such active or former Bakery Employees
would have been eligible for such benefits under
Sellers' plans either (i) as of the Closing Date (had
they retired as of or prior to the Closing Date) or
(ii) solely in the case of Bakery Employees who are
terminated or subjected to indefinite lay-off (in
each case other than for Cause) within one year
following the Closing Date, one year following the
Closing Date (had they retired on such date); but no
such benefits shall commence while any such employee
is an employee of Buyer or an Affiliate of Buyer.
(iii) Except as set forth in clause (i) above, Buyer shall
indemnify, defend and hold Sellers harmless from and against any loss,
liability, claim or damage, including attorneys' fees, for (A)
severance liability suffered by Sellers with respect to any Bakery
Employee and (B) multiemployer plan liability. Sellers represent and
warrant to Buyer that there are no commitments, contracts or policies
in effect that would trigger severance payments to any Bakery Employee
solely on account of a change of control of any of the Companies or
the Subsidiary other than those benefits which will be provided by
Sellers to such Bakery Employees.
(iv) Buyer shall assume and comply with the terms of all
collective bargaining agreements to which any of the Companies or the
Subsidiary is bound or with respect to employees employed in the
Business and shall hold the Sellers and their respective Affiliates
harmless against any breach thereof by the Buyer after the Closing
Date or any failure of the Buyer to engage in collective bargaining as
required by law.
(v) Sellers shall be responsible for all deferred
compensation due under Sellers' compensation plans with respect to
services rendered prior to Closing by any Bakery Employee.
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(vi) As soon as reasonably practicable after execution of
this Agreement, (i) Kraft Jacobs will send to the unions representing
the employees employed in the UK Business as of the date of this
Agreement a notice pursuant to Regulation 10 of the Transfer of
Undertakings (Protection of Employment) Regulations 1981 promulgated
under English law and (ii) Buyer shall provide to Sellers or Kraft
Jacobs the information concerning the intentions of Buyer with regard
to the UK Business which is required for Kraft Jacobs to meet its
obligations under such regulations. Buyer hereby irrevocably
authorizes Kraft Jacobs to include in the notice referred to in the
immediately preceding sentence any information given to Sellers or
Kraft Jacobs by Buyer.
(vii) Except with respect to liability assumed by Buyer in
accordance with the terms of this Agreement (including, without
limitation, the obligations of the Companies and the Subsidiary under
each Bouyea-Fassets Benefit Plan and each multiemployer plan
contributed to for the Bakery Employees), Sellers shall indemnify and
hold Buyer, the Companies and the Subsidiary harmless from and against
any loss, liability, claim or damage, including attorneys' fees, for
liability suffered by Buyer, the Companies and the Subsidiary with
respect to any employee pension plan subject to Title IV of ERISA or
Section 412 of the Code or Part 3 of Subtitle B of Title I of ERISA
maintained or contributed to by Sellers or any of its ERISA
Affiliates. For this purpose, an "ERISA Affiliate" means any trade or
business (whether or not incorporated) which is under common control
with the Sellers, the Companies or the Subsidiary pursuant to Section
414(b) or (c) of the Code.
(viii) Effective as of the Closing Date, Buyer shall offer
to employ (x) all salaried employees of Sellers currently employed at
the Tulare Facility who are dedicated to the Business and are listed
on Part A of Schedule 8(f)-3 and (y) all hourly employees of Sellers
employed at the Tulare Facility who are dedicated to the Business as
of the Closing Date, provided that Buyer shall not be required to
offer employment to any salaried or hourly employee at the Tulare
Facility who is in receipt of or qualified for long-term disability
plan benefits under the Sellers' disability plan or employees on
short-term disability whose current disabilities first commence prior
to the Closing Date, provided however that each employee on
short-term disability who recovers from short-term disability will at
that point be offered employment by Buyer as provided above (all such
employees described in clauses (x) and (y) being referred to herein as
the "Offered Employees" and all such employees who accept such offer
of employment being referred to herein as the "Transferred
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Employees"), at substantially the same salaries and wages, and with
employee benefits, including medical, disability and life insurance
and retirement benefits, that are substantially the same in the
aggregate, as those provided to such employees by Kraft immediately
prior to the Closing Date. Set forth in Part B of Schedule 8(f)-3 for
informational purposes only and subject to change prior to Closing are
all hourly employees of Sellers employed at the Tulare Facility who
are dedicated to the Business as of the date of this Agreement and his
or her title or job description, base salary and target bonus (if any
and excluding any long-term incentive plan bonus). Set forth in Part
A of Schedule 8(f)-3 is such information for the salaried Offered
Employees. To the extent any applicable statutes, laws, ordinances,
rules, orders, or regulations of any governmental authority or
instrumentality requires that Buyer provide any greater payment
(including severance payments) or provision of benefits than is
required under this Agreement, Buyer shall comply with such applicable
statute, law, ordinance, rule, order or regulation. Sellers shall
terminate employment of all Transferred Employees effective as of the
Closing Date. Sellers make no representation as to whether Offered
Employees will accept employment with Buyer. Nothing in this
Agreement shall be construed as limiting in any way the right of
Buyer, the Companies or the Subsidiary at any time and from time to
time, after the Closing Date to terminate the employment of any
Transferred Employee, to change his or her salary or wages or to
modify benefits or other terms and conditions of employment or
Transferred Employees as long as any changes to salary or wages are
done in accordance with Buyer's normal compensation practices and as
long as any modification to benefits or other terms and conditions of
employment of any non-union Transferred Employee made within one year
following the Closing Date apply generally to employees or former
employees of Buyer's bakery business. The Offered Employees
participate in certain of the Bakery Employee Benefit Plans.
(ix) The provisions in clauses (i) (other than the first
paragraph), (ii) (other than paragraph (G)), (iii), (v) and (vii)
above, including the obligations of each of Buyer, Sellers, the
Companies and the Subsidiary, shall apply equally with respect to the
Transferred Employees as they do with respect to the Bakery Employees.
(x) Buyer shall be responsible for all workers'
compensation benefits payable to Transferred Employees with respect to
injuries to Transferred Employees on or after the Closing Date or,
with respect to injuries which relate to an event or circumstance or
events or circumstances that
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straddles or straddle the Closing Date if the date of the original
claim relating to such injury is after the Closing Date, regardless of
the date of injury. Except as otherwise set forth in the immediately
preceding sentence, Sellers shall be responsible for all workers'
compensation benefits payable to Transferred Employees with respect to
injuries occurring prior to the Closing Date.
(xi) Sellers and Buyer agree that the responsibilities for
payroll taxes with respect to Transferred Employees shall be assigned
under the Alternate Procedure described in Section 5 of Rev. Proc.
83-66 as modified and superseded by Rev. Proc. 84-77.
(xii) Buyer represents that it does not currently
contemplate a plant closing involving, or mass lay-off of, Transferred
Employees, or any terminations that in the aggregate would constitute
a mass lay-off of Transferred Employees, within one year following the
Closing. Buyer shall indemnify and defend Sellers and hold each of
them harmless from and against any Losses which may be incurred or
suffered by either of them under the Worker Adjustment and Retraining
Notification Act or any similar state law arising out of, or relating
to, any actions taken by Buyer with respect to the Transferred
Employees on or after the Closing Date.
(xiii) Sellers shall be responsible for all accrued salary
and wages and, if applicable, 1995 bonus (in an amount equal to the
pro rata portion of such bonus allocable to the period prior to the
Closing Date), and Buyer shall be responsible for the pro rata portion
of such bonus allocable to the period from and after the Closing Date.
(xiv) Buyer shall assume and be responsible for all
vacation earned by Transferred Employees but not taken as of the
Closing Date.
(g) Transition Assistance. After the Closing, Kraft will
make available pursuant to the Transition Services Agreement Kraft employees
who are employed at the Tulare Facility to provide purchasing, maintenance,
security and accounting services in the same manner as such employees have
provided such services in the past. After the termination of the Tulare
Facility License Agreement, Kraft will make such employees available for hire
by Buyer, but Sellers make no representation as to whether such employees will
accept employment with Buyer.
(h) Proprietary Software. Sellers hereby grant to the
Companies a non-exclusive, royalty-free license to use the
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software, including the source code, listed or described on Schedule 8(h)(the
"Proprietary Software") on behalf of the Companies and their Affiliates solely
in connection with the Business (the "Licensed Field"), and to make copies and
prepare derivative works of the Proprietary Software necessary for such use.
The Proprietary Software shall not be used or disclosed except as expressly
provided herein. Buyer shall maintain the Proprietary Software in strict
confidence. Sellers represent and warrant that all changes, modifications,
deletions or additions which have been made to the object code of the
Proprietary Software are also reflected or contained in the source code of such
Proprietary Software. Sellers further represent and warrant that the
Proprietary Software operates with at least one commercially available
database, not a proprietary database. EXCEPT AS OTHERWISE STATED HEREIN, BUYER
ACKNOWLEDGES THAT SELLERS HAVE NOT MADE AND HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTIES OF NONINFRINGEMENT, TITLE, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AS TO THE PROPRIETARY SOFTWARE OR THAT THE PROPRIETARY
SOFTWARE SHALL OPERATE IN AN UNINTERRUPTED OR ERROR-FREE MANNER. BUYER
ACKNOWLEDGES THAT THE PROPRIETARY SOFTWARE IS BEING LICENSED TO BUYER "AS IS."
BUYER ACKNOWLEDGES THAT SELLERS HEREBY EXPRESSLY DISCLAIM ANY MAINTENANCE
OBLIGATIONS WHATSOEVER IN CONNECTION WITH THE PROPRIETARY SOFTWARE LICENSED
PURSUANT TO THIS SECTION. At Sellers' request, Buyer shall cause the Companies
to provide Sellers copies of the source code for any or all of the Proprietary
Software.
(i) Cash Management. Prior to the Closing Date, the Company and
the Subsidiary shall continue to participate in Sellers' cash management system
(the "Cash Management System") in accordance with the prior practice.
(i) Effective at the opening of business on the Closing
Date, (A) none of the Companies and the Subsidiary shall participate
in the Cash Management System, (B) Buyer shall be responsible for
funding all disbursements on behalf of the Companies and the
Subsidiary, and (C) Sellers shall cease to be responsible for funding
any disbursements on behalf of the Companies and the Subsidiary.
(ii) Effective at the opening of business on the Closing
Date, none of Sellers and their respective Affiliates (other than the
Companies and the Subsidiary) shall have any right to any funds in any
disbursement or depository account of any of the Companies or the
Subsidiary, other than those funds received by the Companies and the
Subsidiary prior to 12 noon EST on the first business day immediately
preceding the Closing Date (such funds to include deposits made after
normal
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banking hours, and receipts held in vaults not yet deposited) and
unavailable balances in accounts as of close of banking business on
the first business day immediately preceding the Closing Date, which
funds belong to Sellers and shall be remitted by Buyer to Sellers no
later than the fifth business day after the Closing Date. Effective
at the opening of business on such date, Buyer (or the applicable
Company or Subsidiary) shall take physical possession of each such
account and the balance therein.
(j) Insurance.
(i) From and after the Closing, Sellers shall use
commercially reasonable efforts (which shall not require conversion of
any claims made policy to an occurrence based policy, acceptance of
adverse changes in the respective existing insurance policies of
Sellers or their respective Affiliates or the payment of money),
subject to the terms of the Sellers' Insurance Policies (as
hereinafter defined), to retain the right to make claims and receive
recoveries, subject to subsection 8(j)(v), for the benefit of the
Companies and the Subsidiary, as well as for the benefit of Sellers
and their respective Affiliates, under any insurance policies (except
to the extent that any such policy provides for coverage only if that
policy is in effect, and/or any of the Companies and the Subsidiary is
a subsidiary of any of Sellers or their respective Affiliates, at the
time such claim is made to the related insurer) maintained at any time
prior to the Closing by either of Sellers or their respective
Affiliates, or the predecessors of any of them, except for any such
policies listed on Schedule 8(j) hereto (collectively, but excluding
the policies listed on Schedule 8(j), the "Sellers' Insurance
Policies"), covering any loss, liability, claim, damage or expense
relating to the assets, business, operations, conduct, products and
employees (including former employees) of the Companies and the
Subsidiary or Kraft (with respect to the Tulare Facility, but only
with respect to any Assumed Liability relating thereto), and any of
their respective predecessors that relates to or arises out of
occurrences prior to the Closing (a "Claim"). Sellers agree to use
commercially reasonable efforts (which shall not require conversion of
any claims made policy to an occurrence based policy, acceptance of
adverse changes in the respective existing insurance policies of
Sellers or their respective Affiliates or the payment of money) so
that the Companies and the Subsidiary shall have the right, power and
authority, subject to any required consent of the carriers under the
Sellers' Insurance Policies, in the name of Sellers or any of their
respective Affiliates, to make directly any Claims under
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the Sellers' Insurance Policies and to receive directly recoveries
thereunder. Buyer acknowledges and agrees that certain of Sellers'
Insurance Policies (including certain excess liability policies) are
claims made policies and the ability of Buyer, the Companies and the
Subsidiary to make post-Closing Claims with respect to such claims
made policies may be limited to the terms of such policies. Buyer
agrees to notify Sellers, promptly upon making any such Claim, of the
basis and amount of such Claim.
(ii) Buyer agrees, and shall cause the Companies and
Subsidiary, promptly to reimburse, indemnify and hold Sellers and
their respective Affiliates harmless for out-of-pocket costs and
expenses incurred (including any self-insured loss amounts paid by
either of Sellers or their respective Affiliates, any retrospective
premiums imposed on Sellers or their respective Affiliates to the
extent related to or arising from Claims) (x) to carry out any
obligations pursuant to this Section 8(j) or (y) as a result of Claims
being made after the Closing by or on behalf of any of the Companies
or the Subsidiary against Sellers' Insurance Policies. Buyer shall,
and shall cause the Companies and Subsidiary to, pay and bear all
amounts relating to any self-retention or deductible and any gaps in
or limits on coverage applicable to a Claim asserted at any time with
respect to the applicable Sellers' Insurance Policy, after taking into
account the effect of any prior claim payments under the terms of such
Sellers' Insurance Policy, whether or not the applicable Sellers'
Insurance Policy solely covers claims of the Companies and the
Subsidiary or covers claims of either of Sellers and their respective
Affiliates on the one hand, and the Companies and the Subsidiary on
the other hand. The payments by Buyer described in the preceding
sentence and the first sentence of this subsection (ii) shall be
accompanied by interest at the Applicable Rate payable from the date
that is thirty (30) days after receipt of a bill from Sellers or their
respective Affiliates thereof until the date of payment. In the event
that any legal action, arbitration, negotiation or other proceedings
are required for coverage to be asserted against any insurer or a
Claim to be perfected, in each case on behalf of the Companies or the
Subsidiary, Buyer shall (x) to the extent possible, do so at its own
expense or (y) if Buyer is not permitted to assert coverage or perfect
a Claim, Sellers or one of their respective Affiliates shall do so,
and, in either event, Buyer shall hold harmless and indemnify Sellers
and their respective Affiliates for any costs and expenses that they
may incur because of such action (including the fees and expenses of
counsel).
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(iii) Each of Sellers, Buyer, the Companies, and the
Subsidiary shall use commercially reasonable efforts (x) to cooperate
fully and to cause its Affiliates to cooperate fully with the others
in submitting good faith Claims on behalf of the Companies and the
Subsidiary under the Sellers' Insurance Policies and (y) to pay
promptly over to Buyer (or, at Buyer's request, to any of the
Companies or the Subsidiary) any and all amounts received by Sellers
or their respective Affiliates under the Sellers' Insurance Policies
with respect to Claims.
(iv) Sellers and their respective Affiliates shall retain
custody and possession of the Sellers' Insurance Policies and any and
all service contracts, claim settlements and all other insurance
records relating thereto and Buyer, the Companies, and the Subsidiary
shall have access to and the right to make copies (at their expense)
of all such documents and records upon reasonable request to Sellers
or their respective Affiliates.
(v) Buyer acknowledges that Sellers and their respective
Affiliates shall have no responsibility for obtaining any insurance or
bearing any loss, liability, claim, damage or expense relating to the
assets, business, operations, conduct, products and employees
(including former employees) of the Companies and the Subsidiary that
relates to or arises out of occurrences subsequent to the Closing.
Except for its obligations to perform the covenants set forth in this
Section 8(j), nothing herein shall create any obligation on the part
of Sellers to endeavor to provide any insurance coverage for any loss,
liability, lien, damage or expense of Buyer, the Companies or the
Subsidiary after the Closing. Nothing in this Section 8(j) shall
modify the rights or obligations of the parties with respect to
indemnification obligations or the responsibility for losses,
liabilities, damages or expenses that relates to or arises out of
occurrences prior to the Closing which is provided for elsewhere in
this Agreement.
(vi) Nothing contained herein to the contrary shall
prohibit Sellers from managing their respective risk management
programs with respect to post-Closing periods, including the
cancellation or reduction of the amount or scope of insurance coverage
with respect to post-Closing periods in a manner consistent with their
business judgment as applied to the operations of Sellers and their
respective Affiliates.
(k) Transition Services Agreement. At the Closing, Buyer
and Kraft shall execute and deliver a Transition Services Agreement in
substantially the form attached hereto as Exhibit A (the "Transition Services
Agreement") which shall, as appropriate,
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identify particular individuals, (and percentages of their business time) who
shall provide transition services. Promptly following the execution of this
Agreement, representatives of Buyer and Kraft shall meet to develop a
transition plan which will identify services, service periods and service
charges to be provided pursuant to the Transition Service Agreement and which
will, to the extent practicable, be completed prior to the Closing.
(l) Trademark License Agreement. At the Closing, the
Companies and Kraft shall execute and deliver a Trademark License Agreement
substantially in the form attached hereto as Exhibit B (the "Trademark License
Agreement").
(m) Technology License Agreement. At the Closing, the
Companies and Kraft shall execute and deliver a Technology License Agreement
substantially in the form attached hereto as Exhibit C (the "Technology License
Agreement").
(n) Tulare Facility License Agreement. At the Closing,
the Buyer and Kraft shall execute and deliver a License Agreement substantially
in the form attached hereto as Exhibit D (the "Tulare Facility License
Agreement").
(o) Distribution Agreement. At the Closing, Buyer and
Kraft or an Affiliate of Kraft shall execute and deliver a Distribution
Agreement on the terms attached hereto as Exhibit E (the "Distribution
Agreement"), which Buyer and Sellers shall, as soon as practicable following
the date hereof, negotiate in good faith.
(p) Lease Agreement. At the Closing, Entenmann's and
Kraft shall execute and deliver a Lease Agreement substantially in the form
attached hereto as Exhibit F (the "Lease Agreement").
(q) UK Asset Purchase Agreement. At the Closing, Buyer
shall, and Kraft shall cause Kraft Jacobs to, execute and deliver a form of
Asset Purchase Agreement substantially in the form attached hereto as Exhibit G
(the "UK Asset Purchase Agreement").
(r) Co-Generation Guaranty Assignment. At the Closing,
Buyer, Kraft and Bay Shore Co-Gen, Inc., a Delaware corporation ("BSCI"), shall
execute and deliver a Guaranty Assignment containing the terms attached hereto
as Exhibit H (the "Co- Generation Guaranty Assignment"), which Buyer and
Sellers shall, as soon as practicable following the date hereof, negotiate in
good faith, and pursuant to which (i) Kraft will assign its obligations and
liabilities under the Guaranty Agreement, dated as of March 11, 1993, between
Kraft and BSCI (the "BSCI Guaranty"), to Buyer or an Affiliate, (ii) Buyer or
an Affiliate will assume all obligations
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and liabilities of Kraft under the BSCI Guaranty, and (iii) BSCI will release
Kraft from all obligations and liabilities under the BSCI Guaranty. Buyer
shall use commercially reasonable efforts to induce BSCI to enter into the
Co-Generation Guaranty Assignment. If Buyer is unable to effect the occurrence
of such events after using commercially reasonable efforts to do so, Buyer
shall obtain letters of credit with respect to all obligations and liabilities
of Kraft under the BSCI Guaranty providing for the reimbursement of Kraft to
the extent Kraft is responsible for any amounts under the BSCI Guaranty, and
such letters of credit shall be on terms, in amounts and from financial
institutions satisfactory to Sellers. As a result of the substitution
contemplated by the first sentence of this Section 8(r) and/or the letter or
letter of credit contemplated by the immediately preceding sentence, Kraft and
its Affiliates shall from and after the Closing cease to have any obligation
whatsoever arising from or in connection with the BSCI Guaranty except for
obligations, if any, for which Kraft or an Affiliate will be fully indemnified
pursuant to a letter of credit obtained by Buyer or as otherwise provided in
this Agreement.
(s) Know-How License Agreement. At the Closing, the
Companies, the Subsidiary and Kraft shall execute and deliver a Know-How
License Agreement substantially in the form attached hereto as Exhibit I (the
"Know-How License Agreement").
(t) Development Agreement. At the Closing, Buyer and
Kraft or an Affiliate of Kraft shall execute and deliver a Development
Agreement containing the terms attached hereto as Exhibit J (the "Development
Agreement"), which Buyer and Seller shall, as soon as practicable following the
date hereof, negotiate in good faith.
(u) MX Technology. Notwithstanding anything in this
Agreement to the contrary, upon the Closing (i) the Sellers shall transfer to
the Companies and the Subsidiary Sellers' entire rights, title and interest in
the MX Technology (as defined in the Technology License Agreement attached
hereto as Exhibit C), worldwide and for all applications, and (ii) the
Companies and the Subsidiary shall, pursuant to the terms of the Technology
License Agreement, grant to the Sellers a nonexclusive, perpetual, irrevocable,
worldwide, royalty-free license outside the Bakery Field (as defined in the
Technology License Agreement) to make, have made, use, have used and sell
products which embody the MX Technology.
9. Further Assurances. From time to time, as and when
requested by any party hereto, any other party hereto shall execute and
deliver, or cause to be executed and delivered, all
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such documents and instruments and shall take, or cause to be taken, all such
further or other actions (subject to any limitations set forth in this
Agreement), as such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by this Agreement.
10. Tax Matters.
(a) Tax Returns. Sellers represent and warrant that (i)
all Income Tax Returns required to be filed for taxable periods ending on or
prior to the Closing Date by, or with respect to any activities of, the
Companies or the Subsidiary have been or will be filed in accordance with all
applicable laws, and all Income Taxes shown to be due on such Tax Returns have
been or will be paid, (ii) all other material Tax Returns required to be filed
before the Closing Date by, or with respect to any activities of the Companies
or the Subsidiary have been or will be filed in accordance with all applicable
laws and all Taxes shown as due on such Tax Returns have been or will be paid
and (iii) for purposes of an election under Section 338(h)(10) of the Code, the
Companies and KFBC are members of the Philip Morris Companies Inc. consolidated
tax return group for Federal Income Tax purposes.
(b) Section 338(h)(10) Election.
(i) Sellers will join with the Buyer in making an
election under Section 338(h)(10) of the Code (and any corresponding
elections under state or local tax law) (collectively, a "Section
338(h)(10) Election") with respect to the purchase and sale of the
Shares hereunder. Sellers will pay any Federal, state, or local
Income Tax attributable to the deemed sale resulting from making the
Section 338(h)(10) Election.
(ii) Buyer will not make an election under Section 338(g)
of the Code (or any corresponding elections under state or local tax
law) with respect to the Subsidiary unless Buyer has received Seller's
written consent to such election, which consent shall not be
unreasonably withheld.
(iii) Buyer shall prepare all Section 338 Forms in
accordance with applicable Tax Laws and the terms of this Agreement,
and Sellers shall cooperate as reasonably requested by Buyer in the
preparation of such Section 338 Forms.
(c) Allocation of Final Purchase Price. Buyer and
Sellers will negotiate in good faith based on an appraisal (the expense of
which shall be borne equally by Sellers and Buyer) secured by Buyer (a draft as
well as final copies of which shall be furnished to Sellers within ten days
after receipt by Buyer) to
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determine the fair market value of the assets of the Companies and the
Subsidiary and of the Other Assets and the UK Assets and allocate the Final
Purchase Price, the liabilities of the Companies and the Subsidiary, the
Assumed Liabilities and the UK Assumed Liabilities to the assets of the
Companies, the Subsidiary, the Other Assets and the UK Assets for all purposes
(including Tax and financial accounting purposes). Sellers' covenant not to
compete shall be treated as an inseparable part of the Final Purchase Price.
The Buyer, the Companies, the Subsidiary, and Sellers will file all Income Tax
Returns (including amended returns and claims for refund) in a manner
consistent with such allocation. The allocation agreed to shall be deemed to
be part of the Agreement.
(d) Tax Indemnification by Sellers. Sellers shall be
liable for, and shall hold Buyer, the Companies, the Subsidiary, and any
successor corporations thereto harmless from and against the following Taxes
with respect to the Companies and the Subsidiary, except to the extent such
Taxes are taken into account in the Closing Net Book Value Statement:
(i) any and all Income Taxes (including any Income Taxes
of any consolidated, combined or unitary group of which any of the
Companies or the Subsidiary is or has been a member) for any taxable
period ending (or deemed, pursuant to Section 10(f) hereof, to end) on
or before the Closing Date due or payable by the Companies or the
Subsidiary, including any Federal, state, or local Income Taxes
incurred as a result of making the Section 338(h)(10) Election;
(ii) any and all Taxes allocated to Sellers pursuant to
Section 10(f);
(iii) any and all Taxes with respect to the operations of
Sellers, other than those operations conducted by the Companies and
the Subsidiary or operations conducted by Sellers or their respective
Affiliates in connection with the UK Business, including any several
liability of the Companies or the Subsidiary under United States
Treasury Regulation Section 1.1502-6 or under any comparable or
similar provision under state, local or foreign laws or regulations;
and
(iv) any liability for Federal, state, or local Income
Taxes with respect to any gain realized by the Sellers or their
Affiliates upon the sale of the Companies, the Subsidiary, or the
Other Assets.
(e) Tax Indemnification by Buyer. Buyer shall be liable
for, and shall hold Sellers harmless from and against, the following Taxes with
respect to the Companies and the Subsidiary:
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(i) any and all Income Taxes (other than Income Taxes
referred to in Section 10(d)) for any taxable period beginning after
the Closing Date, due or payable by the Companies, the Subsidiary or
Sellers;
(ii) any and all Other Taxes (other than Taxes described
in Section 10(d) for which Sellers are liable) due or payable by the
Companies or the Subsidiary for all taxable periods (whether beginning
before, on or after the Closing Date) except to the extent Sellers are
required to indemnify under Section 11(a). This Section 10(e)(ii)
shall not alter the application of Section 2(b);
(iii) any and all Taxes not incurred in the ordinary course
of business attributable to the acts or omissions of Buyer, Buyer's
affiliates, the Companies or the Subsidiary after the Closing;
(iv) any and all Taxes resulting from or arising out of
any transaction or act done in anticipation of the transactions
contemplated by this Agreement but only to the extent such
transactions or acts were done on the written request of Buyer that
cited this Section 10(e)(iv) and Sellers have the right in their sole
discretion to decline to accede to such request in the absence of a
reference to this Section; and
(v) any and all Taxes allocated to Buyer pursuant to
Section 10(f).
(f) Allocation of Certain Taxes.
(i) Any Income Taxes (unless described in Section
10(e)(iv)) for a taxable period beginning on or before the Closing
Date and ending after the Closing Date with respect to the Companies
or the Subsidiary shall be apportioned between Sellers and Buyer based
on the actual operations of the Companies and/or the Subsidiary, as
the case may be, during the portion of such period ending on the
Closing Date and the portion of such period beginning on the day
following the Closing Date, and for purposes of the provisions of
Section 10(d), 10(e), 10(f) and 10(h), each portion of such period
shall be deemed to be a taxable period (whether or not it is in fact a
taxable period).
(ii) Sellers will pay all state, county, or local sales,
excise, value added, use, registration, stamp, or other transfer taxes
and similar taxes, levies, charges or fees required to be paid on the
transfer of any of the Shares or
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the Other Assets. The parties will cooperate in providing each other
with appropriate resale exemption certification and other similar tax
and fee documentation.
(iii) Sellers will pay the New York State Gains Tax
incurred as a result of the transactions contemplated by this
Agreement. Buyer agrees to cooperate and to cause the Companies to
cooperate with Sellers in complying with the Gains Tax Law. No later
than thirty (30) days before Closing, Buyer shall prepare and submit
to Sellers for their approval, which approval will not be unreasonably
withheld, the appraised fair market values of the New York Real
Property. Sellers agree to comply as soon as practicable with the
requirements of Article 31-B of the Tax law of the State of New York
and the regulations applicable thereto, as the same from time to time
may be amended (collectively, the "Gains Tax Law").
(g) Filing Responsibility.
(i) Seller shall prepare and file or shall cause the
Companies to prepare and file the following Tax Returns with respect
to the Companies and the Subsidiary: (A) all Income Tax Returns for
any taxable period ending on or before the Closing Date (including,
without limitation, any deemed sale Tax Return resulting from the
filing of a Section 338(h)(10) Election) other than Tax Returns
referred to in Section 10(f)and (B) all Tax Returns with respect to
Other Taxes required to be filed (taking into account extensions)
prior to the Closing Date.
(ii) Buyer, the Companies and the Subsidiary shall,
subject to the provisions of this Section 10(g), file all other Tax
Returns with respect to the Companies and the Subsidiary.
(iii) With respect to any state or local Income Tax Return
for taxable periods beginning on or before the Closing Date and ending
after the Closing Date, Buyer shall cause the Companies and the
Subsidiary to consult with Sellers concerning such Tax Return and to
report all items with respect to the period ending on the Closing Date
in accordance with the Companies' past practice, unless otherwise
agreed by Sellers and Buyer. The Companies and the Subsidiary shall
provide Sellers a copy of their proposed Tax Returns at least 40 days
prior to the filing deadline for such Tax Return, and Sellers may
provide comments to any of the Companies and/or the Subsidiary, which
comments shall be delivered within 15 days of receiving such copies
from such Company or Subsidiary.
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(h) Refunds and Carrybacks.
(i) Sellers shall be entitled to any refunds or credits
of Income Taxes attributable to or arising in taxable periods ending
on or before the Closing Date, other than refunds or credits of Income
Taxes in states or local jurisdictions for which a Section 338(h)(10)
Election is unavailable, attributable to any unavoidable carryback of
tax items generated by a Company or the Subsidiary after the Closing
Date for which an election to only carryforward is not available. The
refund or credit attributable to such carrybacks shall be computed as
if all carryforwards and carrybacks of Sellers and their respective
Affiliates which could have been utilized in such periods were
utilized first.
(ii) Buyer, the Companies, or the Subsidiary, as the case
may be, shall be entitled to any refunds or credits of Income Taxes
attributable to or arising in taxable periods beginning on or after
the Closing Date, other than refunds or credits of Income Taxes in
states or local jurisdictions for which a Section 338(h)(10) Election
is unavailable, attributable to any unavoidable carryforward of tax
items generated by a Company or Subsidiary on or before the Closing
Date for which carrybacks are not available. The refund or credit
attributable to such carryforwards shall be computed as if all
carryforwards and carrybacks of Buyer and its respective Affiliates
which could have been utilized in such periods were utilized first.
(iii) Buyer shall cause the Companies and the Subsidiary
promptly to forward to Sellers or to reimburse Sellers for any refunds
or credits due Sellers (pursuant to the terms of this Section 10)
after receipt thereof, and Sellers shall promptly forward to Buyer or
reimburse Buyer for any refunds or credits due Buyer (pursuant to the
terms of this Section 10) after receipt thereof.
(i) Cooperation and Exchange of Information.
(i) Sellers and Buyer shall cooperate, including
preparing and delivering certificates and other documentation, to
avoid imposition of Canadian withholding and other taxes attributable
to the sale of the Subsidiary.
(ii) Sellers shall prepare and submit to Buyer no later
than three months after the Closing Date, 1995 blank tax return
workpaper packages. Buyer shall, or shall cause each of the Companies
and the Subsidiary to, prepare in good faith
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and consistent with past practice and submit to Sellers within three
months of receipt, all information as Sellers shall reasonably request
in such tax return workpaper packages.
(iii) As soon as practicable, but in any event within 30
days after any request, from and after the Closing Date, Sellers or
Buyer shall provide the other with such cooperation and shall deliver
such information and data concerning the pre-Closing operations of the
Companies and the Subsidiary and make available such knowledgeable
employees of the Companies and the Subsidiary as Sellers or Buyer may
reasonably request, including providing the information and data
required by Sellers' or Buyer's customary tax and accounting
questionnaires, in order to enable Sellers or Buyer to complete and
file all Tax Returns which they may be required to file with respect
to the operations and business of the Companies and the Subsidiary
through the Closing Date or to respond to audits by any taxing
authorities with respect to such operations and to otherwise enable
Sellers or Buyer to satisfy their internal accounting, tax and other
legitimate requirements. Such cooperation and information shall
include without limitation provision of powers of attorney for the
purpose of signing Tax Returns and defending audits and promptly
forwarding copies of appropriate notices and forms of other
communications received from or sent to any Taxing Authority which
relate to any of the Companies or the Subsidiary, and providing copies
of all relevant Tax Returns, together with accompanying schedules and
related workpapers, documents relating to rulings or other
determinations by any Taxing Authority and records concerning the
ownership and tax basis of property, which Sellers, Buyer, the
Companies, or the Subsidiary may possess. Sellers, Buyer, the
Companies, and the Subsidiary shall make their respective employees
and facilities available on a mutually convenient basis to provide
explanation of any documents or information provided hereunder.
(iv) For a period of seven (7) years or, if longer, the
applicable limitation period after the Closing Date, Buyer shall, and
shall cause the Companies and the Subsidiary to, retain all Tax
Returns, books and records (including computer files) of, or with
respect to the activities of, the Companies and the Subsidiary for all
taxable periods ending on or prior to the Closing Date. Thereafter,
Buyer shall not dispose of any such tax Returns, books or records
unless it first offers in writing such Tax Returns, books and records
to Sellers and Sellers fail to accept such offer within sixty (60)
days of its being made.
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(v) Buyer and Sellers and their respective Affiliates
shall cooperate in the preparation of all Tax Returns relating in
whole or in part to taxable periods ending on or before or including
the Closing Date that are required to be filed after such date. Buyer
and Sellers and their respective Affiliates shall reasonably cooperate
with respect to preparation of the Tax Returns for the first three
taxable periods ending after the Closing Date. Such cooperation shall
include, but not be limited to, furnishing such information within
such party's possession requested by the party filing such Tax Returns
as is relevant to their preparation. In the case of any state, local
or foreign joint, consolidated, combined, unitary or group relief
system Tax Returns, such cooperation shall also relate to any other
taxable periods in which one party could reasonably require the
assistance of the other party in obtaining any necessary information.
(vi) Sellers shall have the right, at their own expense,
to control any audit or examination by any Taxing Authority ("Tax
Audit"), initiate any claim for refund, contest, resolve and defend
against any assessment, notice of deficiency, or other adjustment or
proposed adjustment relating to any and all Income Taxes for any
taxable period ending on or before the Closing Date. Sellers shall
have the right, at their own expense, to control any Tax Audits,
initiate any claim for refund, contest, resolve and defend against any
assessment, notice of deficiency, or other adjustment or proposed
adjustment relating to any and all Other Taxes payable with respect to
Tax Returns filed or required to be filed (taking into account
extensions) prior to the Closing Date with respect to the Companies
and the Subsidiary to the extent that Losses arising from Other Taxes
for such items or group of related items as described in Section
11(a), exceeds $25,000 and Buyer has sought an indemnification under
Section 11(a). With respect to the items described in the preceding
sentence, Sellers shall consult with Buyers with respect to the
resolution of any such issue that would affect Buyers, and not settle
any such issue, or file any amended return relating to such issue,
without the consent of Buyer, which consent shall not be unreasonably
be withheld. Where consent to a settlement is withheld by the other
party pursuant to this Section, such party may continue or initiate
any further proceedings at its own expense, provided that the
liability of the first party, after giving effect to this Agreement,
shall not exceed the liability that would have resulted from the
settlement or amended returns. Seller will not enter into any binding
agreement with any Tax Authority for Tax Periods beginning after the
Closing Date. Buyer shall have the right, at its own expense, to
control any other Tax Audit, initiate
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any other claim for refund, and contest, resolve and defend against
any other assessment, notice of deficiency, or other adjustment or
proposed adjustment relating to any Taxes for any taxable period
beginning before the Closing Date and ending after the Closing Date,
provided that, Buyer shall consult with Sellers with respect to the
resolution of any issue that would affect Sellers, and not settle any
such issue, or file any amended return relating to any such issue,
without the consent of Sellers, which consent shall not unreasonably
be withheld. Where consent to a settlement is withheld by the other
party pursuant to this Section, such other party may continue or
initiate any further proceedings at its own expense, provided that the
liability of the first party, after giving effect to this Agreement,
shall not exceed the liability that would have resulted from the
settlement or amended return. Sellers shall furnish Buyer, the
Companies, and the Subsidiary with their cooperation and Buyer,
Companies and Subsidiary shall similarly furnish their cooperation in
a manner comparable to that described in Section 10(i)(iii) hereof to
effect the purposes of this Section 10(i)(vi).
(vii) If Buyer, or any of the Companies or the Subsidiary,
as the case may be, fails to provide any information reasonably
requested by Sellers, or Sellers fail to provide any information
requested by Buyer, in each case, in the time specified herein, or if
no time is specified pursuant to this Section 10(i), within a
reasonable period, or otherwise fails to do any act required of it
under this Section 10(i), then Buyer or Sellers, as the case may be,
shall be obligated, notwithstanding any other provision of this
Agreement, to indemnify the other party and shall so indemnify the
other party and its respective Affiliates and hold the other party and
its respective Affiliates harmless from and against any and all costs,
claims or damages, including, without limitation, all Taxes or
deficiencies thereof, payable as a result of such failure.
(j) Tax Sharing Agreements. Any Tax sharing agreement
between any other person and any of the Companies or the Subsidiary shall be
terminated as of the Closing Date with respect to the Companies and the
Subsidiary and neither the Companies nor the Subsidiary shall have any
liability thereunder after such termination.
(k) Safe Harbor Leases. In the case of leases under a
safe harbor lease agreement entered into by any of the Companies under section
168(f)(8) of the Internal Revenue Code of 1954, as amended by the Economic
Recovery Tax Act of 1981, listed on Schedule 10(k) (each, a "Safe Harbor
Lease"), each lessee (in the
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case of a deemed purchase under Sec. 168(f)(8) pursuant to 10(b) above) shall
(1) furnish to Sellers at the Closing a written consent to take any property
covered by a Safe Harbor Lease subject to such Safe Harbor Lease in the form
attached as Exhibit K, (2) furnish a copy of such consent to the lessor within
30 days of the Closing, (3) file a statement with its timely filed federal
income tax return for the taxable year in which the deemed transfer occurs
containing the information required by Temporary Regulation Section
5c.168(f)(8)-2(a)(5) and confirming the consent, and (4) take such other steps
as may reasonably be requested by Sellers with respect to such Safe Harbor
Lease.
(l) Definitions. For purposes of this Section 10,
Section 4, and Section 5(b)(xii), the following terms shall have the meanings
ascribed to them below:
(i) "Code" means the Internal Revenue Code of 1986, as
amended.
(ii) "Income Taxes" means (A) federal, state, local, or
foreign income or franchise Taxes or other Taxes measured by income
and all other Taxes reported on Tax Returns which include federal,
state, local, or foreign income or franchise taxes or other taxes
measured by income, together with interest or penalties imposed with
respect thereto, and (B) any obligations under any agreements or
arrangements with respect to any Income Taxes described in clause (A)
above.
(iii) "Income Tax Returns" means federal, state, local, or
foreign Income Tax Returns required to be filed with any Taxing
Authority that include any of the Companies or the Subsidiary.
(iv) "IRS" means the Internal Revenue Service.
(v) "Other Taxes" means all Taxes which are not Income
Taxes.
(vi) "Section 338 Forms" means all returns, documents,
statements, and other forms that are required to be submitted to any
Taxing Authority in connection with a Section 338(h)(10) Election.
(vii) "Tax" or "Taxes" means (A) all federal, state, local,
or foreign income, gross receipts, estimated, alternative minimum,
add-on minimum, profits, sales, use, occupation, value added, ad
valorem, transfer, registration, franchise, employee or other
withholding, payroll, unemployment, excise, license, property, or
other tax, of any
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kind whatsoever, together with any interest, penalties, or additions
to tax imposed with respect thereto and (B) any obligations under any
agreements or arrangements with respect to any Taxes described in
clause (A) above.
(viii) "Tax Laws" means the Code and any federal, state,
local, or foreign laws relating to Taxes and any regulations or
official administrative pronouncements released thereunder.
(ix) "Tax Returns" means returns, declarations, reports,
claims for refund, information returns, or other documents (including
any related or supporting schedules, statements, or information) filed
required to be filed in connection with the determination, assessment
or collection of Taxes of any party or the administration of any laws,
regulations, or administrative requirements relating to any Taxes.
(x) "Taxing Authority" means any governmental authority,
domestic or foreign, having jurisdiction over the assessment,
determination, collection, or other imposition of Tax.
11. Indemnification.
(a) Indemnification by Sellers. Sellers shall indemnify
Buyer and each of its Affiliates, officers, directors, employees and agents and
hold them harmless from any loss, liability, damage or expense (including
reasonable legal fees and expenses as provided in Section 11(f)) but excluding
liabilities to the extent reserved for on the Closing Net Book Value Statement,
consequential damages, lost profits or punitive damages (such items, giving
effect to such exclusions, being referred to as "Losses") suffered or incurred
by any such indemnified party to the extent arising from (i) any breach of any
representation or warranty of Sellers contained in this Agreement, the Tulare
Facility License Agreement and the Lease Agreement or of Kraft Jacobs in the UK
Asset Purchase Agreement which survives the Closing; provided, however, that
for purposes of this indemnity the representations and warranties of Sellers
shall be read as if they contained no qualifications for Material Adverse
Effect, materiality (except with respect to Section 4(e) and 4(k) and except
for the purpose of determining which agreements, documents or similar items are
required to be listed on particular Schedules) or knowledge (solely with
respect to Section 4(l)(i) and Section 4(q)), (ii) any Environmental Losses and
(iii) any breach of any covenant of Sellers contained in this Agreement, the
Tulare Facility License Agreement and the Lease Agreement or of Kraft Jacobs in
the UK Asset Purchase Agreement requiring performance after the Closing Date;
provided, however, that Sellers shall not have any liability under clause (i)
or (ii) of this Section 11(a) unless the aggregate of all Losses relating
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thereto for which Sellers would, but for this proviso, be liable exceeds on a
cumulative basis $15 million, and thereafter Sellers shall indemnify any such
indemnified party for 50% of all Losses in excess of $15 million but not
exceeding $35 million, and 75% of all Losses in excess of $35 million but not
exceeding $200 million; provided further, however, that Seller shall not have
any liability for any individual item (or group of items relating to the same
claim) where the Loss relating to such item (or group of related items) is less
than $25,000 and such items shall not be aggregated or otherwise considered for
purposes of calculating cumulative Losses under the immediately preceding
proviso to this Section 11(a). Buyer agrees that any Loss which was incurred
or suffered because it was necessary to bring any Property or UK Asset which is
not in compliance with applicable laws at the Closing Date into compliance with
applicable laws in effect at the Closing Date shall be reduced by (and Sellers
shall not indemnify for) any amounts expended with respect thereto which are
included in the compliance capital expenditures budget of the Companies and the
Subsidiary set forth on Schedule 11(a). "Environmental Losses" means
out-of-pocket expenses and payments to third parties (including judgments,
settlements, fines and penalties and payments to consultants, engineers and
attorneys) incurred in connection with the remediation or correction of any
Environmental Condition required by an Environmental Law as in effect on the
Closing Date. "Environmental Condition" means (A) any condition affecting any
Property, other leased real property of any Company or the Subsidiary or UK
Asset arising out of any release of Hazardous Substances from or onto any
Property, other leased real property of any Company or the Subsidiary or UK
Asset prior to the Closing Date, (B) any condition affecting any other property
arising out of any disposal or release of Hazardous Substances prior to the
Closing Date by any of the Companies or the Subsidiary or by the Bristol
Facility or any predecessor in interest of any of them or (C) any condition
arising out of non-compliance with Environmental Laws prior to the Closing
Date. For purposes of this Agreement, "Hazardous Substance" means any
hazardous and toxic substance, waste or material, any pollutant or contaminant,
including, without lmitation, PCB's, asbestos and raw materials that include
hazardous constituents or any other similar substance or material that are
included under or regulated by any Environmental Laws.
(b) Exclusive Remedy. Except as otherwise expressly
provided in Sections 5(a), 8(f)(iii), 8(f)(vii), 10 and 23, Buyer and Sellers
acknowledge and agree that, from and after the Closing, their sole and
exclusive remedy with respect to any and all claims relating to the subject
matter of this Agreement, the Stock Purchase and the UK Asset Purchase
Agreement shall be pursuant to the indemnification provisions set forth in this
Section 11. In furtherance of the foregoing, Buyer and Sellers hereby waive,
from
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and after the Closing, to the fullest extent permitted under applicable law,
any and all rights, claims and causes of action either may have against the
other relating to the subject matter of this Agreement, the Stock Purchase and
the UK Asset Purchase Agreement arising under or based upon any federal, state,
local or foreign statute, law, ordinance, rule or regulation or otherwise,
provided, however, that Buyer and Sellers do not hereby waive any tort claims
either may have against the other for intentional fraudulent misrepresentation
(except with respect to claims relating to the truth of the representation and
warranty in Section 4(q)(ii), as to which Buyer's sole remedy shall be pursuant
to Section 11(a)). Notwithstanding anything to the contrary contained in this
Agreement, Buyer shall have no right to indemnification under Section 11(a)
with respect to any Loss or alleged Loss if Buyer shall have requested a
reduction in the Net Book Value reflected on the Closing Net Book Value
Statement on account of any matter forming the basis for such Loss or alleged
Loss and shall have agreed, or the Accounting Firm shall have determined, that
no such reduction is appropriate.
(c) Indemnification by Buyer. Buyer shall indemnify
Sellers, their respective Affiliates, officers, directors, employees and agents
against and hold them harmless from any Losses suffered or incurred by any such
indemnified party to the extent arising from (i) any breach of any
representation or warranty of Buyer contained in this Agreement, the Tulare
Facility License Agreement and the Lease Agreement or of Kraft Jacobs in the UK
Asset Purchase Agreement which survives the Closing, (ii) any breach of any
covenant of Buyer contained in this Agreement, the Tulare Facility License
Agreement and the Lease Agreement or of Kraft Jacobs in the UK Asset Purchase
Agreement requiring performance after the Closing Date, (iii) any failure of
Buyer to pay, discharge or perform any of the Assumed Liabilities or the UK
Assumed Liabilities, (iv) any obligation, guarantee or obligation to assure
performance given or made by Sellers or any of their respective Affiliates with
respect to any of the Assumed Liabilities or the UK Assumed Liabilities, (v)
any discontinuance, suspension or modification of any employee benefit plan
maintained by Buyer as contemplated by Section 8(f) hereof and any and all
obligations, liabilities, actions, suits, claims and other proceedings which
arise directly or indirectly out of the operation of the Companies and the
Subsidiary or use of the Other Assets or UK Assets after the Closing, (vi) any
liability or obligation of Sellers or their respective Affiliates or the
Companies or the Subsidiary with respect to any of the litigation set forth on
Schedule 4(j), (vii) any liability or obligation of Sellers and their
respective Affiliates for any of the liabilities set forth in clause (viii)
below, including, without limitation, any guarantee or obligation to assure
performance given or made by Sellers or an
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Affiliate of Sellers with respect to any obligation of any of the Companies and
the Subsidiary set forth in clause (viii) below, (viii) all obligations and
liabilities of whatever kind and nature, primary or secondary, direct or
indirect, absolute or contingent, known or unknown, whether or not accrued,
whether arising before, on or after the Closing Date, of any of the Companies
and the Subsidiary, including, without limitation, any such obligations or
liabilities contained in the Material Contracts, the Bouyea-Fassetts Benefit
Plans or any agreement, lease, license, permit, plan or commitment that,
because it fails to meet the relevant threshold amount or term, is not included
within the definition of Material Contracts; provided, however, that Buyer
shall not have any liability for any individual item (or group of items
relating to the same claim) where the Loss relating to such item (or group of
related items) is less than $25,000. Notwithstanding anything in this Section
11(c) to the contrary, any obligation of the Buyer to indemnify any indemnified
party against any Losses arising pursuant to clauses (vi), (vii) and (viii) of
this Section 11(c) which are also within the scope of Sellers' indemnification
obligations under clauses (i) or (ii) of Section 11 (a) (together with all
other Losses which are within the scope of such indemnification obligations of
Sellers, the "Shared Indemnifiable Items") shall be treated as a Loss for
purposes of, and shall be subject to the limits of, the first proviso which
follows clause (iii) of Section 11(a).
(d) Losses Net of Insurance. The amount of any and all
Losses under this Section 11 shall be determined net of any amounts recovered
or recoverable by the indemnified party under insurance policies, indemnities
or other reimbursement arrangements with respect to such Losses. Each party
hereby waives, to the extent permitted under its applicable insurance policies,
any subrogation rights that its insurer may have with respect to any
indemnifiable Losses. Any indemnity payment under this Agreement shall be
treated as an adjustment to the Final Purchase Price for tax purposes.
(e) Termination of Indemnification. The obligations to
indemnify and hold harmless a party hereto, pursuant to Sections 11(a)(i),
11(a)(ii) and 11(c)(i), shall terminate when the applicable representation,
warranty or indemnification terminates pursuant to Section 15; provided,
however, that such obligations to indemnify and hold harmless shall not
terminate with respect to any item as to which the person to be indemnified or
the related party thereto shall have, prior to the expiration of the applicable
period, previously made a claim by delivering a written notice (stating in
reasonable detail the nature of, and factual and legal basis for, any such
claim for indemnification, and the provisions of this Agreement upon which such
claim for indemnification is
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made) to the indemnifying party. The obligation to indemnify and hold harmless
a party hereto pursuant to the other clauses of Sections 11(a) and 11(c) shall
not terminate.
(f) Procedures Relating to Indemnification.
(i) In order for a party (the "indemnified party") to be
entitled to any indemnification provided for under this Agreement in
respect of, arising out of or involving a claim or demand made by any
person, firm, governmental authority or corporation against the
indemnified party (a "Third Party Claim"), such indemnified party must
notify the indemnifying party in writing, and in reasonable detail, of
the Third Party Claim as promptly as reasonably possible after receipt
by such indemnified party of notice of the Third Party Claim;
provided, however, that failure to give such notification on a timely
basis shall not affect the indemnification provided hereunder except
to the extent the indemnifying party shall have been actually
prejudiced as a result of such failure. Thereafter, the indemnified
party shall deliver to the indemnifying party, within five business
days after the indemnified party's receipt thereof, copies of all
notices and documents (including court papers) received by the
indemnified party relating to the Third Party Claim. With respect to
any Third Party Claim that constitutes a Shared Indemnifiable Item,
the recipient of such Third Party Claim shall give the notice
contemplated above.
(ii) If a Third Party Claim is made against an indemnified
party, the indemnifying party shall be entitled to participate in the
defense thereof and, if it so chooses and acknowledges its obligation
to indemnify the indemnified party therefor, to assume the defense
thereof with counsel selected by the indemnifying party and reasonably
satisfactory to the indemnified party; provided, however, that, in the
case of Shared Indemnifiable Items, (x) Buyer shall be the party which
is entitled to such rights (and shall be deemed the indemnifying party
for purposes of this paragraph (ii)), except to the extent that
Sellers' share of such Shared Indemnifiable Items exceeds 50%, in
which event Sellers shall be deemed the indemnifying party and (y)
defense costs incurred by the indemnifying party to the extent it has
assumed the defense thereof in the manner contemplated below (or by
the indemnified party for any period during which the indemnifying
party has not assumed the defense) in each case shall be deemed Losses
for purposes of the first proviso which follows clause (iii) of
Section 11(a) to the extent it has assumed the defense thereof in the
manner contemplated below. Notwithstanding any acknowledgment made
pursuant to the
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immediately preceding sentence, the indemnifying party shall continue
to be entitled to assert any limitation on its indemnification
responsibility contained in the provisos to Section 11(a) or Section
11(c), as the case may be. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party
shall not be liable to any indemnified party for legal expenses
subsequently incurred by the indemnified party in connection with the
defense thereof and shall not be liable for legal expenses of more
than one counsel (who shall be selected by Sellers or Buyer, as the
case may be) for all indemnified parties in connection with the same
Third Party Claim. If the indemnifying party assumes such defense,
the indemnified party shall have the right to participate in the
defense thereof and to employ counsel, at its own expense, separate
from the counsel employed by the indemnifying party, it being
understood, however, that the indemnifying party shall control such
defense. Subject to the first sentence of this subsection, the
indemnifying party shall be liable for the fees and expenses of
counsel employed by the indemnified party for any period during which
the indemnifying party has not assumed the defense thereof. If the
indemnifying party chooses to defend any Third Party Claim, all the
parties hereto shall cooperate in the defense or prosecution of such
Third Party Claim. Such cooperation shall include the retention and
(upon the indemnifying party's request) the provision to the
indemnifying party of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on
a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Whether or not the
indemnifying party shall have assumed the defense of a Third Party
Claim, the indemnified party shall not admit any liability with
respect to, or settle, compromise or discharge, such Third Party Claim
without the indemnifying party's prior written consent (which consent
shall not be unreasonably withheld). In addition, in the case of any
Third Party Claim which is a Shared Indemnifiable Item, Buyer (or
Sellers if they are deemed the indemnifying party) shall not admit any
liability with respect to, or settle, compromise or discharge, such
Third Party Claim without Sellers' (or Buyer's, if applicable) prior
written consent (which consent shall not be unreasonably withheld);
provided, however, that no such consent shall be required for a
settlement that does not impose any payment or other obligation on the
Sellers to the extent that Sellers are not then directly sharing in
the Losses arising out of such settlement.
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12. Assignment. Except as set forth below, this
Agreement and any rights and obligations hereunder shall not be assignable or
transferable by Buyer or Sellers (including by operation of law in connection
with a merger or sale of stock, or sale of substantially all the assets, of
Buyer or Sellers) without the prior written consent of the other parties and
any purported assignment without such consent shall be void and without effect;
provided that, without the consent of Sellers, Buyer may assign its right to
purchase any of the Shares or the Other Assets hereunder to one or more
wholly-owned subsidiaries of Buyer upon written notice of such assignment to
Sellers (it being understood, however, that no such assignment shall limit or
otherwise affect Buyer's obligations hereunder).
13. No Third-Party Beneficiaries. This Agreement is for
the sole benefit of the parties hereto and their permitted assigns and nothing
herein express or implied (including Sections 8(f), 8(j) and 11) shall give or
be construed to give to any person or entity, other than the parties hereto and
such permitted assigns, any legal or equitable rights hereunder.
14. Termination.
(a) Anything contained herein to the contrary notwithstanding,
this Agreement may be terminated and the transactions contemplated hereby
abandoned at any time prior to the Closing Date:
(i) by the mutual written consent of Sellers and Buyer;
(ii) by Sellers if any of the conditions set forth in
Section 3(b) shall have become incapable of fulfillment, and shall not
have been waived by Seller;
(iii) by Buyer if any of the conditions set forth in
Section 3(a) shall have become incapable of fulfillment, and shall not
have been waived by Buyer; or
(iv) by Seller or Buyer if the Closing does not occur on
or prior to October 31, 1995;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) above is not in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
(b) In the event of termination by Sellers or Buyer
pursuant to this Section 14, written notice thereof shall forthwith be given to
the other party and the transactions contemplated by
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this Agreement shall be terminated, without further action by any party. If
the transactions contemplated by this Agreement are terminated as provided
herein:
(i) Buyer shall return all documents and copies and other
materials received from or on behalf of Sellers relating to the
transactions contemplated hereby, whether so obtained before or after
the execution hereof, to Sellers; and
(ii) all confidential information received by Buyer with
respect to the Companies and the Subsidiary, the UK Business, the
Other Assets, and the Assumed Liabilities shall be treated in
accordance with the Diligence Confidentiality Agreement, which shall
remain in full force and effect notwithstanding the termination of
this Agreement.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 14, this
Agreement shall become void and of no further force and effect, except for the
provisions of (i) Section 5(a) relating to indemnification in connection with
access to the Property,(ii) Section 7(a) relating to the obligation of Buyer to
keep confidential certain information and data obtained by it, (iii) Section
8(c) relating to publicity, (iv) Section 16 relating to certain expenses, (v)
Section 23 relating to finder's fees and broker's fees, and (vi) this Section
14. Nothing in this Section 14 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or to impair the right of any party to compel specific performance by
another party of its obligations under this Agreement.
15. Survival of Representations and Environmental
Indemnity. The representations and warranties in this Agreement and the UK
Asset Purchase Agreement and in any other document delivered in connection
herewith and the indemnification provided in clause (ii) of Section 11(a) shall
survive the Closing solely for purposes of Sections 11(a) and 11(c) and shall
terminate at the close of business on the second anniversary of the Closing
Date; provided, however, that (i) the representations and warranties provided
in Section 10 with respect to Tax Matters shall survive until 90 days after all
potential claims thereon shall be barred by the applicable statute of
limitations, (ii) the representations and warranties provided in Section 4(g)
with respect to any Owned Property as to which Sellers deliver a title
commitment shall not survive, and shall terminate at the Closing and (iii) the
representation and warranties provided in Section 4(e) shall terminate on March
31, 1997. The indemnification provided in
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clause (ii) of Section 11(a) shall terminate at the close of business on the
third anniversary of the Closing Date.
16. Expenses. Whether or not the transactions
contemplated hereby are consummated, and except as otherwise specifically
provided in this Agreement, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs or expenses.
17. Amendment and Waiver. This Agreement may be amended,
or any provision of this Agreement may be waived; provided that any such
amendment or waiver shall be binding upon Sellers only if set forth in a
writing executed by Sellers and referring specifically to the provision alleged
to have been amended or waived, and any such amendment or waiver shall be
binding upon Buyer only if set forth in a writing executed by Buyer and
referring specifically to the provision alleged to have been amended or waived.
No course of dealing between or among any persons having any interest in this
Agreement shall be deemed effective to modify, amend or discharge any part of
this Agreement or any rights or obligations of any person under or by reason of
this Agreement.
18. Notices. All notices or other communications
required or permitted to be given hereunder shall be in writing and shall be
delivered by hand or sent by prepaid telex, cable or telecopy, or sent, postage
prepaid, by registered, certified or express mail, or reputable overnight
courier service and shall be deemed given when so delivered by hand, telexed,
cabled or telecopied, or if mailed, three (3) days after mailing (one business
day in the case of express mail or overnight courier service), as follows:
(i) if to Buyer,
CPC International Inc.
International Plaza
Englewood Cliffs, New Jersey 07631
Telecopy No. (201) 894-2381
Attention: Hanes A. Heller
Deputy General Counsel
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Telecopy No. (212) 269-5420
Attention: W. Leslie Duffy
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(ii) if to Kraft or KFBC,
Kraft Foods, Inc.
Three Lakes Drive
Northfield, Illinois 60093
Telecopy No. (708) 646-2950
Attention: General Counsel
with a copy to:
Kraft Foods, Inc.
Three Lakes Drive
Northfield, Illinois 60093
Telecopy No. (708) 646-4431
Attention: Douglas B. Levene, Senior Mergers and
Acquisitions Counsel
19. Interpretation. The headings and captions contained
in this Agreement, in any Exhibit or Schedule hereto and in the table of
contents to this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Any capitalized
terms used in any Schedule or Exhibit and not otherwise defined therein shall
have the meanings set forth in this Agreement. The use of the word "including"
herein shall mean "including without limitation."
20. No Strict Construction. Notwithstanding the fact that
this Agreement has been drafted or prepared by one of the parties, Buyer and
Sellers confirm that both they and their respective counsel have reviewed,
negotiated and adopted this Agreement as the joint agreement and understanding
of the parties, and the language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against any person.
21. Counterparts. This Agreement may be executed in one
or more counterparts (including by means of telecopied signature pages), all of
which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to the other party.
22. Entire Agreement. This Agreement and the other
agreements referred to herein (including the Diligence Confidentiality
Agreement) contain the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and
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understandings, whether written or oral, relating to such subject matter.
23. Brokerage. Buyer has not used a broker or finder in
connection with the transactions contemplated by this Agreement, and there are
no claims for brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement by or on behalf of Buyer, except pursuant to an
arrangement with Salomon Brothers Inc. for which Buyer is solely responsible.
Sellers have not retained any broker or finder or incurred any liability or
obligation for any brokerage fees, commissions or finder's fees with respect to
this Agreement or the transactions contemplated hereby, except pursuant to an
arrangement with Wasserstein Perella & Co., for which Sellers are solely
responsible. Notwithstanding anything to the contrary in Section 11, Buyer
shall indemnify and hold Sellers harmless for any breach of its representation
in this Section 23, and Sellers shall indemnify and hold Buyer harmless for any
breach of their representation in this Section 23.
24. Schedules. The disclosures in the Schedules hereto
and to the UK Asset Purchase Agreement are to be taken as relating to the
representations and warranties of Sellers as a whole. The inclusion of
information in any of such Schedules hereto shall not be construed as an
admission that such information is material to any of the Business, the
Companies and the Subsidiary, the UK Business, or KFBC. In addition, matters
reflected in such Schedules are not necessarily limited to matters required by
this Agreement to be reflected in such Schedules. Such additional matters are
set forth for informational purposes only and do not necessarily include other
matters of a similar nature. Prior to the Closing, Sellers shall have the
right to supplement, modify or update the Schedules hereto and to the UK Asset
Purchase Agreement to reflect changes in the ordinary course of business
consistent with past practice and subject to Section 5(b) prior to the Closing;
provided, however, that any such supplements, modifications or updates shall be
subject to Buyer's rights under Section 3(a)(i).
25. Representation by Counsel; Interpretation. Sellers
and Buyer acknowledge that each of them has been represented by counsel in
connection with this Agreement and the transactions contemplated hereby.
Accordingly, any rule of law or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the party
that drafted it has no application and is expressly waived.
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26. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be valid and effective
under applicable law, but if any provision of this Agreement or the application
of any such provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
27. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Illinois
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
28. Exhibits and Schedules. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein.
29. Dispute Resolution.
(a) Negotiation. In the event of any dispute or
disagreement between Sellers and Buyer as to the interpretation of any
provision of this Agreement or any Ancillary Agreement (or the performance of
obligations hereunder or thereunder), the matter, upon written request of
either party, shall be referred to representatives of the parties for decision,
each party being represented by a senior executive officer who has no direct
operational responsibility for the matters contemplated by this Agreement (the
"Representatives"). The Representatives shall promptly meet in a good faith
effort to resolve the dispute. If the Representatives do not agree upon a
decision within thirty (30) calendar days after reference of the matter to
them, each of Buyer and Sellers shall be free to exercise the remedies
available to them under Section 29(b).
(b) Arbitration. Any controversy, dispute or claim
arising out of or relating in any way to this Agreement or the Ancillary
Agreements (other than the Distribution Agreement) or the transactions arising
hereunder or thereunder that cannot be resolved by negotiation pursuant to
Section 29(a) shall, except as otherwise provided in Section 2(b), be settled
exclusively by arbitration in the City of New York, New York. Such arbitration
shall be administered by the Center for Public Resources Institute for Dispute
Resolution (the "Institute") in accordance with its then prevailing Rules for
Non-Administered Arbitration of Business Disputes (except as otherwise provided
herein), by three independent and impartial arbitrators, one of whom shall be
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appointed by Sellers and one of whom shall be appointed by Buyer.
Notwithstanding anything to the contrary provided in Section 27 hereof, the
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
Section 1 et seq. The fees and expenses of the Institute and the arbitrators
shall be shared equally by the parties and advanced by them from time to time
as required; provided that at the conclusion of the arbitration, the
arbitrators shall award costs and expenses (including the costs of the
arbitration previously advanced and the fees and expenses of attorneys,
accountants and other experts) and interest at the Applicable Rate to the
prevailing party. No pre-arbitration discovery shall be permitted, except that
the arbitrators shall have the power in their sole discretion, on application
by any party, to order pre-arbitration examination solely of those witnesses
and documents that any other party intends to introduce in its case-in-chief at
the arbitration hearing. The arbitrators shall render their award within 90
days of the conclusion of the arbitration hearing. The arbitrators shall not
be empowered to award to any party any consequential damages, lost profits or
punitive damages in connection with any dispute between or among them arising
out of or relating in any way to this Agreement or the transactions arising
hereunder, and each party hereby irrevocably waives any right to recover such
damages. Notwithstanding anything to the contrary provided in this Section
29(b) and without prejudice to the above procedures, either party may apply to
any court of competent jurisdiction for temporary injunctive or other
provisional judicial relief if such action is necessary to avoid irreparable
damage or to preserve the status quo until such time as the arbitration panel
is convened and available to hear such party's request for temporary relief.
The award rendered by the arbitrators shall be final and not subject to
judicial review and judgment thereon may be entered in any court of competent
jurisdiction.
30. Commercially Reasonable Efforts. Subject to the
terms of this Agreement (including the limitations set forth in Section 8(a)),
each party will use all commercially reasonable efforts (including actions or
agreements to take actions with respect to the Business by Sellers prior to the
Closing or by Buyer after the Closing) to comply with its obligations under
this Agreement and the Ancillary Agreements, to obtain any necessary third
party consents, to obtain any required regulatory approvals or clearances and
otherwise to satisfy all the conditions to the Closing.
* * * * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
KRAFT FOODS BAKERY COMPANIES, INC.
By:
-----------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
KRAFT FOODS, INC.
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
CPC International Inc.
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
This Amendment No. 1 (this "Amendment") to the Stock Purchase
Agreement, dated as of August 7, 1995 (the "Purchase Agreement"), by and among
KRAFT FOODS, INC., a Delaware corporation ("Kraft"), KRAFT FOODS BAKERY
COMPANIES, INC., a Delaware corporation (together with Kraft, "Sellers") and
CPC INTERNATIONAL INC., a Delaware corporation ("CPC"), is made by and among
Sellers, CPC and CPC BAKING CO., INC., a Delaware corporation and a
wholly-owned subsidiary of CPC ("CPC Baking Co." and together with CPC,
"Buyer") this 2nd day of October, 1995. Capitalized terms used but not
otherwise defined herein shall have the respective meanings accorded such terms
in the Purchase Agreement.
WHEREAS, Sellers and CPC wish to amend the Purchase Agreement
in certain respects, all upon the terms and conditions set forth herein; and
WHEREAS, CPC has requested that the Shares being sold pursuant
to the Purchase Agreement be transferred by Sellers to CPC Baking Co.; and
WHEREAS, the parties hereto wish to enter into certain other
arrangements in accordance with the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, the parties hereto hereby agree as follows:
1. The first "WHEREAS" clause of the recitals to the
Purchase Agreement is hereby amended by adding the words ", Hudson Processing,
Inc., a Delaware corporation ("Hudson")" after the word "("Entenmann's")" in
the sixth line thereof; and by deleting the words
<PAGE> 90
"(Boboli, Freihofer and Entenmann's" in the sixth line thereof and replacing
them with the words "(Boboli, Freihofer, Entenmann's and Hudson".
2. Notwithstanding the provisions of Sections 2(b), 5(b)
or 8(i) or any other provision of the Purchase Agreement, the Companies will be
entitled to retain all currency in possession of the thrift stores as of the
opening of business on the Closing Date and the Closing Net Book Value
Statement shall reflect an amount equal to such currency.
3. Section 3(a)(iv) of the Purchase Agreement is hereby
amended by inserting the words "BBS Software License Agreement," before "the
Tulare License Agreement" in the penultimate line.
4. On even date herewith, the Buyer and Kraft shall
execute and deliver the BBS Software License Agreement in the form attached
hereto as Exhibit A.
5. Section 4(b) of the Purchase Agreement is hereby
amended by adding the words "Kraft or" before the word "KFBC."
6. Pursuant to certain contracts with third party
vendors, Kraft, Buyer or the Companies may receive rebates from the vendors
thereunder which are attributable to commodities or other supplies purchased
for the Business. Kraft agrees that Kraft shall pay on or prior to March 31,
1996 to Buyer an amount equal to the aggregate amount of such rebates, if any,
that Kraft actually receives from vendors which are attributable to purchases
made between October 2, 1995 and December 31, 1995 for the Business. Buyer
agrees that Buyer shall pay on or prior to March 31, 1996 to Kraft an amount
equal to the aggregate amount of rebates, if any, that Buyer or any of the
Companies actually receives from vendors which are attributable to purchases
made by Kraft or any of the Companies before October 2, 1995 for the Business.
The parties acknowledge that each party will pay any such rebates to the other
in an aggregate amount and will not provide an accounting or breakdown of any
such rebates. Without limiting
2
<PAGE> 91
the generality of the indemnification provisions of Section 8(a) of the
Purchase Agreement, Buyer agrees to indemnify and hold Sellers harmless from
and against any and all costs, expenses (including fees and expenses of
counsel), losses and liabilities incurred by Sellers in connection with
obtaining any such rebates on behalf of Buyer. Sellers agree to indemnify and
hold Buyer harmless from and against any and all costs, expenses (including
fees and expenses of counsel), losses and liabilities incurred by Buyer in
connection with obtaining any such rebates on behalf of Sellers.
7. Section 4 of the Purchase Agreement is hereby amended
by adding the following subsection at the end thereof:
"(r) Hudson Assets and Liabilities. Hudson has no material
assets or liabilities (except for liabilities to employees
which will be accrued on the Closing Net Book Value
Statement)."
8. Section 8(f)(i) is hereby amended by adding the
following sentence to the end thereof: "Sellers and Buyer agree that the
provisions in this Section 8(f) relating to severance benefits to be provided
to terminated Bakery Employees by Buyer shall not apply to hourly employees of
Hudson.
9. Pursuant to Sections 7(f) and 8(r) of the Purchase
Agreement, CPC agreed to obtain letters of credit in favor of Sellers
(or their Affiliates) with respect to all obligations and liabilities of the
applicable Seller or Affiliate under the Guaranties and under the BSCI Guaranty
in the event CPC was not able to cause itself to be substituted as guarantor of
such obligations and liabilities. Sellers waive the requirement to obtain such
letters of credit and agree that such letters of credit shall not be required
as a condition to Closing. Notwithstanding such waiver, Buyer acknowledges and
agrees that Buyer has assumed all obligations and liabilities of Sellers and
their Affiliates under the Guaranties and under the BSCI Guaranty and that
Buyer shall continue to use commercially reasonable efforts to cause itself to
be substituted
3
<PAGE> 92
in all respects for Sellers or their Affiliates in respect of
all obligations and liabilities of Sellers and their Affiliates under the
Guaranties and the BSCI Guaranty (or, in the case of the PMCC guaranty,
otherwise satisfy the federal and state financial assurance requirements
related thereto), as more fully described in Sections 7(f) and 8(r).
10. Section 11(c) of the Purchase Agreement is hereby
amended by replacing the words "Kraft Jacobs" in clauses (i) and (ii) thereof
with the words "Buyer or its Affiliate".
11. Sellers hereby agree that, at the written request of
Buyer within six months of the Closing Date, Sellers shall assign to Buyer any
rights in air emission offsets and credits that Sellers may have as of the
Closing Date that are attributable to Sellers' ownership and operation of the
Tulare Facility; provided, however that Buyer hereby acknowledges that Sellers
make no representation that any such air emission offsets and credits exist or
are assignable or otherwise transferable under applicable law, and that
Sellers' obligation to assign or transfer such air emission offsets and credits
shall not include any requirement to expend money, commence any litigation or
offer or grant any accommodation (financial or otherwise) to any third party.
12. Kraft will indemnify, defend and hold harmless CPC
and the Companies from and against any and all claims, losses, damages and
expenses (including reasonable attorney's fees and expenses) ("Claims") arising
out of or relating to the Entenmann's Savings Plan and the merger of said plan
into the Kraft General Foods Savings Plan. CPC will provide or cause the
Companies to provide reasonable access to documents and records in their
possession relating to such plans and such Claims (whether made against Kraft,
CPC, the Companies or any of them) and will make available employees of the
Companies with knowledge of facts relevant to such Claims for purposes of
evaluating and defending such Claims.
4
<PAGE> 93
13. The Introduction to the Schedules to the Purchase
Agreement is hereby amended by
a. inserting the words "August 7" between the brackets
in line two therein and removing the brackets from line two therein;
b. deleting the words "(the 'Agreement')" from line two
therein; and
c. adding the words "(CPC) and CPC Baking Co., (together
with CPC, "Buyer") amended as of the date hereof, (the 'Stock Purchase
Agreement')" to the end of line four therein; and
d. adding the words "Stock Purchase" before the word
"Agreement" in line seven therein.
14. Schedule 1(c) of the Purchase Agreement is hereby
amended by
a. adding to the list contained therein under the
caption "Other Assets" the following item: "6. The assets set forth on Annex
3 hereto (the "Pilot Plant Equipment");" and
b. adding Schedule 1 attached hereto as Annex 3 to
Schedule 1(c) of the Purchase Agreement.
The Pilot Plant Equipment shall be included in the schedule
to the Bill of Sale of even date herewith from Sellers to Buyer or its
designee. The parties hereto acknowledge and agree that (i) the net book value
of the Pilot Plant Equipment shall be included in the property, plant and
equipment account to be reflected on the Closing Net Book Value Statement and
(ii) including the net book value of the Pilot Plant Equipment on the Closing
Net Book Value Statement will cause the Final Purchase Price to increase by an
amount equal to such net book value.
15. Annex 1 to Schedule 1(c) to the Purchase Agreement is
hereby amended by adding the following items to the list contained therein
captioned "Other Contracts":
5
<PAGE> 94
11. Software License Agreement between Software
Plus, Inc. and General Foods Bakery Companies
for Human Resources/SP and Payroll/SP
Combined Version.(4)
12. Software License Agreement between Michaels,
Ross and Cole Ltd. and General Foods Bakery
Companies for MRC - Full Functions.(4)
13. Software License Agreement between IBM and
KFBC for Metaphor.(4)
14. Agreement between Red Brick Systems and
General Foods Bakery Companies for Red Brick
Warehouse Version 1.5 and DIS Gateway.(4)
15. Agreement between Routing Technology
Software, Inc. and General Foods Bakery
Companies, Inc. for ROADSHOW/50 System.(4)
16. Software License Agreement between KMA
Synthesis and General Foods Bakery Companies,
Inc. for Auto-REMIT.(4)
17. Software License Agreement between McCormack
& Dodge and General Foods Corporation for
Accounts Payable software.(4)
18. Software License Agreement between PKWARE and
KFBC for PKZIP, PKUNZIP & PKSFX.(4)
19. Term Lease Supplement Agreements between IBM
Credit Corporation and Kraft Inc. for various
IBM hardware.(4)
6
<PAGE> 95
20. Term Lease Supplement Agreements between IBM
Credit Corporation and General Foods Bakery
Companies, Inc. for various IBM hardware.(4)
21. Master Lease Agreement Schedule between Kraft
General Foods, Inc. and Comdisco, Inc. for
2502 Router and 4000 Router (each on Schedule
18-SL30148-04).(4)
22. Master Equipment Lease Agreement between EMC
Corporation and Lender's Bagel Bakery for
DASD.(6)
23. Master Purchase Agreement Schedules between
Norand Corporation and General Foods Bakery
Companies, Inc. for Maintenance of Norand
Hand-Held Computers, Printers and
Communication Equipment.(6)
24. Schedule to Multinational Computer Products
Purchase Agreement (CM 696) Exhibit VI
(Addendum B) between Kraft Foods, Inc. and
Hewlett-Packard Company.(4)
25. The following hedging and futures contract
rights and obligations of the Sellers:
<TABLE>
<CAPTION>
PERIOD COVERED
COVER COMMODITY FUTURE MO MEASURE CONTRACTS PRICE
------- --------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
1Q95 Cocoa Bean Mar (H) 95 10 MT 34 1,318
Cocoa Bean May (K) 96 10 MT 17 1,347
--------- --------
51 1,327
</TABLE>
7
<PAGE> 96
26. Contract rights and obligations of the
Sellers under outstanding purchase orders
entered into in the ordinary course of
business or at the request of Buyer
(including without limitation the purchase
orders described on Schedule 2 attached to
this Amendment), to the extent that such
contract rights and obligations were obtained
or incurred in connection with the conduct of
the Business.
27. Bank Card Merchant Agreement, Account
Reconcilement Services Agreement, and Lockbox
Agreements for all boxes between Kraft Foods,
Inc. and Bank of America.
28. Special Depository Agreement and Cash Vault
Deposit Agreement between Kraft Foods, Inc.
and Bank of America, NM.
29. Check Cashing Indemnity Letter between Kraft
Foods, Inc. and Barnett Bank.
30. Night Depository Service Agreement between
Kraft Foods, Inc. and BayBank.
31. Carrier Agreement, Special Night Depository
Agreement and Letter Authorizing Deposits in
Bulk Subject to Count between Kraft Foods,
Inc. and Chemical Bank, N.A.
32. After Hour Depository Agreement between Kraft
Foods, Inc. and Chase Lincoln First.
33. Night Depository Service Agreement between
Kraft Foods, Inc. and CFX Bank.
34. Night Depository Agreement and Check Cashing
Indemnity Letter between Kraft Foods, Inc.
and First Fidelity.
8
<PAGE> 97
35. Night Depository Agreement between Kraft
Foods, Inc. and First NH Bank.
36. Special Depository Agreement and Night
Depository Agreement (two) between Kraft
Foods, Inc. and First Interstate Bank.
37. Night Depository Agreements (8 various
formats) and Check Cashing Indemnity Letter
between Kraft Foods, Inc. and Fleet Bank.
38. Lockbox Agreements for all boxes between
Kraft Foods, Inc. and Mellon Bank.
39. Check Cashing Indemnity Letter between Kraft
Foods, Inc. and The Merchants Bank, Vermont.
40. Account Reconciliation Service Night
Depository, Disposable Bags Corporate
Depository's Agreement, Post Verification/
Night Depository and Payroll Check Cashing
Indemnity Letter between Kraft Foods, Inc.
and NationsBank, Florida.
41. Night Depository Agreement Bank Account
between Kraft Foods, Inc. and Nationsbank,
Texas.
42. Night Depository Agreements (7 various
formats), Payroll Check Cashing Indemnity
Letter and Lockbox Agreements for all boxes
between Kraft Foods, Inc. and NationsBank,
Georgia.
43. Night Depository Agreement between Kraft
Foods, Inc. and Seafirst.
44. Night Depository/Bulk Deposit Agreement
between Kraft Foods, Inc. and Shawmut Bank.
9
<PAGE> 98
45. Payroll Check Cashing Indemnity Letter Night
Depository Agreement between Kraft Foods,
Inc. and Sun Bank.
46. Lockbox Agreements for all boxes between
Kraft Foods, Inc. and Wachovia.
47. Co-Packing Agreement between General Foods
Bakery Companies, Inc. and Gold Coast Bakery
Company, Inc. (dated March 13, 1995).
48. Schedules to Master Agreement for
Maintenance, Dedicated Service, and Site
Administration between American Telephone &
Telegraph Company and Kraft General Foods,
Inc.(4)
49. Schedules to Master Equipment Lease Agreement
between AT&T Credit Corporation and Kraft
Inc.(4)"
15. Schedule 1(d) to the Purchase Agreement is hereby
amended by replacing the word "Peter" with the word "Pete" in item 9 therein.
16. Schedule 1(g) to the Purchase Agreement is hereby
amended by:
a. adding to the end of item 2 therein the words
"and QUICK SCHEDULER"; and
b. adding the following item to the list
contained therein captioned "Computer
Software":
"15. Agreement between Hawkeye
Information Systems, Inc. and
General Foods Bakery Companies, Inc.
for PATHFINDER SERVICES."
10
<PAGE> 99
17. Schedule 4(a)(ii) to the Purchase Agreement is hereby
amended by:
a. deleting item 6 from the list contained
therein (and renumbering the items therein
accordingly); and
b. adding the following items to the list
contained therein captioned "Seller
Conflicts" (assuming the renumbering
described in "a" above):
"10. Lease Agreement between Entenmann's,
Inc. and Stanley Thomson for 355
East 76th Avenue; Anchorage,
Alaska(1)
11. Lease Agreement between Entenmann's,
Inc. and Albrecht, Incorporated for
154 East Avenue; Tallmadge, Ohio(1)
12. Sublease Agreement between
Entenmann's, Inc. and Supermarkets
General Corporation for the property
located at White Plains Road and
Cypress Road; Eastchester, New
York.(1)
13. Lease Agreement between Entenmann's,
Inc. and Patrick Koenig and Richard
Johnson for 3215 South Dixie
Highway; West Palm Beach,
Florida.(1)
14. Lease Agreement between Entenmann's,
Inc. and Electroservice Laboratories
for 2880 Seaborg Avenue; Ventura,
California.(1)
15. Lease Agreement between Entenmann's,
Inc. and Zephyer Properties, Inc.
for 245 S. Spruce Avenue; San
Francisco, California.(1)"
11
<PAGE> 100
c. adding to the end of item 17 therein the
words "and QUICK SCHEDULER";
d. replacing the words "Bankers Life Company" in
the last sentence of item 37 contained
therein with the words, "Principal Financial
Group (successor-in-interest to Bankers Life
Company), and Northlake Associates Limited
Partnership (assignee of Third Swansea
Properties, Inc.)" ; and
e. adding the following items to the list
contained therein captioned "Seller
Conflicts" (assuming the renumbering
described in "a" above):
"43. Master Lease Agreement Schedule
between Kraft General Foods, Inc.
and Comdisco, Inc. for 2502 Router
and 4000 Router (each on Schedule
18-SL30148-04).(5)
44. Master Purchase Agreement Schedules
between Norand Corporation and
General Foods Bakery Companies, Inc.
for Maintenance of Norand Hand-Held
Computers, Printers and
Communication Equipment.(6)
45. Schedule to Multinational Computer
Products Purchase Agreement (CM 696)
Exhibit VI (Addendum B) between
Kraft Foods, Inc. and
Hewlett-Packard Company.(5)
46. Agreement between Hawkeye
Information Systems, Inc. and
General Foods Bakery Companies, Inc.
for Pathfinder Services.(6)
47. Bank Card Merchant Agreement,
Account Reconcilement Services
Agreement, and Lockbox Agreements
for all boxes between Kraft Foods,
Inc. and Bank of America.(2)
12
<PAGE> 101
48. Night Depository Agreements (8
various formats) between Kraft
Foods, Inc. and Fleet Bank.(2)
49. Night Depository Agreements (7
various formats) between Kraft
Foods, Inc. and NationsBank,
Texas.(2)
50. Night Depository/Bulk Deposit
Agreement between Kraft Foods, Inc.
and Shawmut Bank.(2)
51. Co-Packing Agreement between General
Foods Bakery Companies, Inc. and
Gold Coast Bakery Company, Inc.
(dated March 13, 1995).
52. Schedules to Master Agreement for
Maintenance, Dedicated Service, and
Site Administration between American
Telephone & Telegraph Company and
Kraft General Foods, Inc.(5)
53. Schedules to Master Equipment Lease
Agreement between AT&T Credit
Corporation and Kraft Inc.(5)"
18. Schedule 4(c) to the Purchase Agreement is hereby
amended by adding the following to the list contained therein captioned "States
of Incorporation and Jurisdictions of Qualification":
"HUDSON PROCESSING, INC.
State of Incorporation:
Delaware
States where qualified to do business:
New York"
19. Schedule 4(d) to the Purchase Agreement is hereby
amended by
13
<PAGE> 102
a. replacing the word "Subsidiaries" in the caption
thereto with the word "Subsidiary"; and
b. adding the following to the list contained therein
captioned "Authorized Capital Stock of the Companies and Subsidiary and
Record Owners":
"HUDSON PROCESSING, INC.
Common Stock, $1.00 par value per share
1,000 shares authorized
1,000 shares outstanding
Kraft Foods, Inc. 1,000 shares"
20. Schedule 4(g)-1 to the Purchase Agreement is
hereby amended by deleting item 5 of the list contained therein entitled
"Footnotes," and adding the following item:
"5. Kraft Foods, Inc. is in the process
of transferring this property to
Entenmann's, Inc. This transfer
will be complete by the Closing."
21. Schedule 4(g)-3 to the Purchase Agreement is
hereby amended by deleting items 37 and 67 of the list captioned "Schedule of
Material Leases."
22. Schedule 4(h) to the Purchase Agreement is
hereby amended by:
a. replacing the words "Not yet
available" with the number "497,577"
in item 2 of the chart contained
therein captioned "U.S. PATENT
APPLICATIONS";
b. replacing the words "Process for
Making a Micromilled Cocoa
Composition and a Micromilled Cocoa
Composition" with the words "Food
Modifier and Process for Making
Same" in item 1 of the chart
contained therein captioned "FOREIGN
PATENTS";
14
<PAGE> 103
c. adding the following item to the
chart contained therein captioned
"FOREIGN PATENTS" following item 23
therein:
<TABLE>
<S> <C> <C> <C>
Germany Not yet Cake Icing Composition Utilizing a Not yet
available Food Modifying Composition and available
Process for Making Same
</TABLE>
d. replacing the words "Process for Making a
Micromilled Cocoa Composition and a
Micromilled Cocoa Composition" with the words
"Food Modifier and Process for Making Same"
in item 31 of the chart contained therein
captioned "FOREIGN PATENTS";
e. replacing the words "Process for Making a
Micromilled Cocoa Composition and a
Micromilled Cocoa Composition" with the words
"Food Modifier and Process for Making Same"
in item 10 of the chart contained therein
captioned "FOREIGN PATENT APPLICATIONS";
f. replacing the word "Columbia" with the word
"Colombia" and replacing the words "Process
for Making a Micromilled Cocoa Composition
and a Micromilled Cocoa Composition" with the
words "Food Modifier and Process for Making
Same" in item 11 of the chart contained
therein captioned "FOREIGN PATENT
APPLICATIONS";
15
<PAGE> 104
g. deleting the words "Low Fat Chocolaty Chip
with Hydrated Micro Particles of Cocoa" from
item 12 of the chart contained therein
captioned "FOREIGN PATENT APPLICATIONS";
h. deleting item 19 from the chart contained
therein captioned "FOREIGN PATENT
APPLICATIONS";
i. replacing the words "Process for Making a
Micromilled Cocoa Composition and a
Micromilled Cocoa Composition" with the words
"Food Modifier and Process for Making Same"
in item 22 of the chart contained therein
captioned "FOREIGN PATENT APPLICATIONS";
j. deleting the words "Low Fat Chocolaty Chip
with Hydrated Micro Particles of Cocoa" from
item 24 of the chart contained therein
captioned "FOREIGN PATENT APPLICATIONS";
k. replacing the words "Process for Making a
Micromilled Cocoa Composition and a
Micromilled Cocoa Composition" with the words
"Food Modifier and Process for Making Same"
in item 26 of the chart contained therein
captioned "FOREIGN PATENT APPLICATIONS";
l. replacing the number "9202740" with the
number "92,2740" and replacing the words
"Process for Making a Micromilled Cocoa
Composition and a Micromilled Cocoa
Composition" with the words "Food Modifier
and Process for Making Same" in item 28 of
the chart contained therein captioned
"FOREIGN PATENT APPLICATIONS";
16
<PAGE> 105
m. replacing the words "Process for Making a
Micromilled Cocoa Composition and a
Micromilled Cocoa Composition" with the words
"Food Modifier and Process for Making Same"
in items 29 and 31 of the chart contained
therein captioned "FOREIGN PATENT
APPLICATIONS";
n. deleting the words "Low Fat Chocolaty Chip
with Hydrated Micro Particles of Cocoa" from
items 32 and 34 of the chart contained
therein captioned "FOREIGN PATENT
APPLICATIONS";
o. replacing the words "Process for Making a
Micromilled Cocoa Composition and a
Micromilled Cocoa Composition" with the words
"Food Modifier and Process for Making Same"
in item 38 of the chart contained therein
captioned "FOREIGN PATENT APPLICATIONS";
p. adding the following item to the chart
contained therein captioned "U.S. TRADEMARKS"
following item 2 therein:
<TABLE>
<S> <C> <C> <C>
BOBOLI** 1,864,843 Sauces, excluding August 19, 1993
apple and cranberry
sauces
</TABLE>
q. deleting the asterisk next to "Oroweat Foods
Company/Aliments Oroweat et Cie" in item 7
and the corresponding footnote at the bottom
of the page from the chart contained therein
captioned "TRADE NAMES";
r. replacing "14" with "19" and "24" with "29"
in item 1 of the chart contained therein
captioned "SOFTWARE";
17
<PAGE> 106
s. adding the following items to the end of item
2 of the chart contained therein captioned
"SOFTWARE":
"h. Miscellaneous
i. "Librarian" (Applied Data
Research, now Computer
Associates)
ii. "ACF2" (Cambridge Systems
Group, now Computer Associates)
iii. "Bundl/VTAM View" (Legent, now
Computer Associates)
iv. "ZARA, ZEBE and ZEKE" (Altai)
v. "Consumer Services" (American
Transtek)"
23. Schedule 4(i)(viii) to the Purchase Agreement is
hereby amended by:
a. deleting items 6, 9, 10, 16, 21, 26, 29, 33, 47, 49,
54, 55, 66, 67, 75, 77, 79, 81, and 82 from the list contained therein
captioned "Material Contracts" (and renumbering the items therein accordingly);
and
b. adding to the list contained therein captioned
"Material Contracts", the following (assuming the renumbering described in "a"
above):
"69. Distributor's Appointment and Agreement
between E&H Distributing Co., Inc. and Boboli
Co. (dated January 25, 1989).
70. Co-Packing Agreement between General Foods
Bakery Companies, Inc. and Gold Coast Baking
Company, Inc. (dated March 13, 1995).
18
<PAGE> 107
71. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Northern Sales
Co. of Alaska, Inc. (dated March 1, 1995).
72. Distributor's Appointment and Agreement
between Entenmann's, Inc. and P&P
Distributors (dated February 22, 1993).
73. Distributor's Appointment and Agreement
between Entenmann's, Inc. and DBR
Distributing (dated June 5, 1995).
74. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Mark's
Distributing Co. (dated November 4, 1993).
75. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Juan
Aguayo (dated August 25, 1995).
76. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Jim
Bullock (dated February 15, 1993).
77. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Larry
Conlee (dated March 28, 1990).
78. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Hobie
Dennis (dated July 5, 1993).
19
<PAGE> 108
79. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and S.T.
Figuero (dated December 1, 1990).
80. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and James
B. Hurst (dated September 16, 1991).
81. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Joe
Huval (dated February 1, 1991).
82. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Bobby
Irvan (dated March 28, 1990).
83. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Bill
Johnson (dated May 16, 1988).
84. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Jay
Kilpatrick (dated July 3, 1995).
85. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Sam
Lacy (dated January 23, 1995).
86. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and David
Law (dated October 17, 1994).
20
<PAGE> 109
87. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Charles
Linville (dated December 17, 1990).
88. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Joyce
McLemore (dated July 10, 1995).
89. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Robert
Moles (dated March 28, 1990).
90. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Charles
R. Nation, Jr. (dated September 7, 1993).
91. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Danny
Owen (dated December 1, 1990).
92. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Roy
Rafield (dated March 8, 1993).
93. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Elvis
Sneathern (dated March 6, 1995).
94. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Matthew
Cena (contract approved, awaiting final
execution).
21
<PAGE> 110
95. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and James
Rouse (contract approved, awaiting final
execution).
96. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Ron
Woosley (contract approved, awaiting final
execution).
97. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Arctic
Sun Distributors (undated).
98. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Great
Alaskan Food Co. (undated).
99. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and
Greatland/Bob's Distributor (undated).
100. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and
Northern Sales Co. (undated).
101. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Bob
Royall (undated).
102. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and
Williams Baking Co. (undated).
22
<PAGE> 111
103. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Smith
Distributors (undated).
104. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and Idaho
Bread and Pastry (undated).
105. Distributorship Agreement between Oroweat
Foods Company (Entenmann's, Inc.) and P&P
Distributing/Bob Perata (undated).
106. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Juan Aguayo
(dated August 28, 1995).
107. Distributor's Appointment and Agreement
between Entenmann's, Inc., on behalf, and for
the benefit of, its Oroweat Foods Company
Division and Jim Bullock (dated April 23,
1992).
108. Distributor's Appointment and Agreement
between Entenmann's Inc. and Larry Conlee
(dated March 28, 1990).
109. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Hobie Dennis
(dated July 5, 1993).
110. Distributor's Appointment and Agreement
between Entenmann's, Inc. and S.T. Figuero
(dated December 1, 1990).
23
<PAGE> 112
111. Distributor's Appointment and Agreement
between Boboli Co. and S.T. Figuero (dated
December 1, 1990).
112. Distributor's Appointment and Agreement
between Entenmann's, Inc. and James B. Hurst
(dated September 16, 1991).
113. Distributor's Appointment and Agreement
between Boboli Co. and James B. Hurst (dated
September 16, 1991).
114. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Bobby Irvan
(dated March 28, 1990).
115. Agreement for the Distribution of Oroweat
Foods Company Products between Oroweat Foods
Company and Bill Johnson (dated May 16,
1988).
116. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Jay Kilpatrick
(dated July 3, 1995).
117. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Sam Lacy (dated
January 23, 1995).
118. Distributor's Appointment and Agreement
between Entenmann's, Inc. and David Law
(dated October 17, 1994).
119. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Charles
Linville (dated December 17, 1990).
24
<PAGE> 113
120. Distributor's Appointment and Agreement
between Boboli Co. and Charles Linville
(dated December 17, 1990).
121. Distributor's Appointment and Agreement
between Boboli Co. and Joyce McLemore (dated
July 10, 1995).
122. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Charles R.
Nation, Jr. (dated September 7, 1993).
123. Distributor's Appointment and Agreement
between Boboli Co. and Danny Owen (dated
December 1, 1990).
124. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Danny Owen
(dated August 17, 1992).
125. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Elvis Sneathern
(dated March 6, 1995).
126. Distributor's Appointment and Agreement
between Entenmann's, Inc. and Royal
Enterprises (dated September 1, 1987)."
24. Schedule 4(j) to the Purchase Agreement is hereby
amended by:
a. replacing the caption thereto "Litigation(1)"
with the caption "Pending Lawsuits and
Claims(1)";
b. adding the words "or State Agency" between
the words "Commission" and "Claims" in the
caption to item I.A. therein;
25
<PAGE> 114
c. replacing the word "suit" with the word
"charge" in items 1, 3-16, and 18-20 of the
list contained therein captioned "I.A. Equal
Employment Opportunity Commission Claims";
d. adding to the end of item 2 of the list
captioned "I.A. Equal Employment Opportunity
Commission Claims," the words "discrimination
charge based on disability brought against
Entenmann's, Inc. re: Entenmann's failure
to reinstate claimant to job of Route Sales
Representative, dated June 6, 1995."
e. adding to the end of item 14 of the list
contained therein captioned "I. A. Equal
Opportunity Commission Claims", the words
"Dismissed, no cause 6/27/95."
f. adding to the end of item 17 of the list
captioned "I.A. Equal Employment Opportunity
Commission Claims," the words "Additional
attorney letter received re: threatened
filing of a lawsuit, dated August 17, 1995."
and replacing the word "suit" with the word
"charge" therein;
g. adding the following items to the list
contained therein captioned "I.A. Equal
Employment Opportunity Commission Claims":
"22. Robert Taaffe: age discrimination
charge brought against Entenmann's
Inc. re: termination, dated August
22, 1995.
23. Anna Lynn Aloia: sex discrimination
charge brought against Entenmann's,
Inc. re: alleged harassment and
constructive discharge, dated August
16, 1995.
26
<PAGE> 115
24. Carey LaFleur: sex discrimination
charge brought against
Bouyea-Fassetts Bakery re: alleged
environmental and quid pro quo
sexual harassment, dated August 21,
1995.
25. Israel James: race discrimination
charge brought against Entenmann's,
Inc. re: termination, dated August
8, 1995."
h. adding the following item to the list
contained therein captioned "I.B. Employment
Litigation Other Than Workmen's
Compensation":
"8. John Doe v. Philip Morris/General
Foods d/b/a Entenmann's, Inc. and
Food Driver Salesmen, Dairy and Ice
Cream Workers, Local No. 463, re:
alleged discrimination based on
blood trait, alleged discrimination
based on employee's claim for
worker's compensation benefits, and
union's failure to fairly
represent."
i. adding the following items to the list
contained therein caption "I.C. National
Labor Relations Board Matters(2)":
"6. Bakery Drivers Local 550, I.B.T.V.
Charles Freihofer Baking Co., Inc.
re: petition for recognition of
petitioner as certified
representative of group of employees
at New Paltz, New York depot, dated
August 7, 1995. (See Schedule 5(b))
(NLRB Case No. 3-RC-10303).
7. Petition for representation filed by
IBEW Local 2066 seeking to represent
shippers at the South Plainfield,
N.J. depot (NLRB Case No.
22-RC-11113).
27
<PAGE> 116
8. Teamsters Local 550 v. Charles
Freihofer Baking Company Co. re:
discharge of Craig Salcido from
employment at Goshen, New York
Freihofer depot, allegedly due to
Salcido's union activity (NLRB Case
No. 2-CA-28685)."
j. adding to the end of item 1 of the list
contained therein captioned "I. D. Labor
Arbitrations," the words "Settled by hearing
by agreement."
k. deleting item 3 from the list contained
therein captioned "I.D. Labor Arbitrations,"
and adding to the list the following items:
"7. Duane Hull: re: employee suspended
for 4 hours after being observed
drinking at lunch in tavern across
from plant.
8. Arbitration demand filed at
Freihofers NYERB Case No. AP95-71
re: claim of excessive overtime.
9. BCTWU, Local 50 v. Freihofer Baking
Co. re: alleged inequality in
offering overtime to employee Ken
Smith based on seniority, dated
August 2, 1995.
10. Donna Carta re: employee terminated
for failure to follow regulations
and cash handling procedures."
l. adding to the end of item 3 of the list
contained therein captioned "I. E. Attorney
Letters," the words "Private Settlement
reached 9/26/95."
m. deleting items 6 and 10 from the list
contained therein captioned "I.E. Attorney
Letters and Other Possible or Threatened
Claims"
28
<PAGE> 117
(and renumbering the items therein
accordingly) and adding the following items
(assuming the renumbering described above):
"12. Claim by Frank Chrysler, Employee of
Charles Freihofer Baking Company at
Albany location alleging discharge
for racial reasons and in
retaliation for filing of workers
compensation claim.
13. Possible suit by collection agency
against Entenmann's, Inc. re: funds
which should have been withheld from
paycheck of employee Jorge Perez
between November 1994 and August
1995. Entenmann's, Inc. did not
withhold funds, based on notice that
Perez had filed for bankruptcy.
Bankruptcy filing had never
occurred.
14. Attorney letters dated September 7,
1995 and September 22, 1995 re:
alleged sexual harassment of
employee Judith Matthews.
15. Attorney letter received on
September 26, 1995 re: Oroweat
employee D. Sanford."
n. adding the following items to the list
contained therein captioned "II.D.
Miscellaneous Litigation and Other Claims":
"13. Mitchell Distributing, Inc. v.
Entenmann's, Inc., re: claims for
losses due to transfer of accounts
to other parties, and loss of
Chattanooga market, dated August 16,
1995.
14. Beier Enterprises, Inc. v.
Entenmann, Inc./Oroweat Foods
Company, re: claim that alleged
cessation of bread
29
<PAGE> 118
delivery by Company constituted
unfair trade practices in violation
of law and resulted in losses to
distributor, dated September 21,
1995.
15. State of New York v. Wray re: buyout
of Wait Road superfund site in
Clifton, New York. Consent decree
entered. Deminimus buyout payment
of $2,500 has been made. Possible
re- opener.
16. U.S. v. Pierce re: contribution
action for York Oil site in Moira,
New York. Consent decree signed.
Pending payment of approximately
$80,000 due after entry."
25. Schedule 4(k) to the Purchase Agreement is hereby
amended by adding the following item to the list contained therein:
"2. Estimated operating results for Kraft Foods
Bakery Division since June 1995 are as
follows: (a) volume: 49.0mm (7/95), 48.2mm
(8/95) and 61.3mm (9/95); (b) revenue:
$87.9mm (7/95), $86.8mm (8/95) and $110.3mm
(9/95); and (c) income from operations:
$6.3mm (7/95), $4.0mm (8/95) and $7.3mm
(9/95). Note that 9/95 data represent
"flash" estimates."
26. Schedule 4(l)(ii) to the Purchase Agreement is hereby
amended by adding to the list captioned "Environmental Matters," the following
items:
"4. Sampling of two underground diesel storage
tanks under the Montebello, California
facility conducted on August 25, 1995
indicated contamination at one of the tanks.
Next steps and costs have not yet been
finalized.
30
<PAGE> 119
5. The Montebello Bakery is currently under a
"Demonstration" period with the County
Sanitation District of Los Angeles as a
result of exceeding allowable (permitted)
discharges during the 1993- 1994 reporting
period. Should waste water discharges not
achieve allowable levels from July 1, 1995 to
June 30, 1996, a connection fee of $743,000
will be due."
27. Schedule 4(m) to the Purchase Agreement is hereby
amended by deleting item 43 of the list contained therein captioned "Employee
Benefit Plans".
28. Schedule 7(f) to the Purchase Agreement is hereby
amended by replacing the word "Peter" with the word "Pete" in item 5 of the
list contained therein captioned "Guaranties."
29. Schedule 8(a) to the Purchase Agreement is hereby
amended by
a. replacing the words "Software License
Agreement between" with the words "Marketing
Information Supplier Alliance Agreement
(including Software License) between A.C."
and deleting the words "for 'Nielsen'" in
item 11 of the list therein captioned "Shared
Contracts"; and
b. adding the following items to the list
contained therein captioned "Shared
Contracts":
"47. Basic Agreement for Permanent
License of Proprietary Software
Products between Applied Data
Research, Inc. and General Foods for
"Librarian."
31
<PAGE> 120
48. License Agreement and Maintenance
Agreement between The Cambridge
Systems Group, Inc. and General
Foods Corporation for "ACF2".
49. Software License Agreement between
Legent Corporation and Kraft General
Foods, Inc. for "Bundl/VTAM View."
50. Software License Agreement between
Altai, Inc. and Kraft General Foods,
Inc. for "ZARA, ZEBE and ZEKE."
51. Consumer Response Supplier Alliance
Agreement between American
Transtech, Inc. and Kraft General
Foods, Inc.
52. Sungard Master Disaster Recovery
Services Agreement between Sungard
Recovery Services Inc. and Kraft
General Foods, Inc.
53. Focus System License Agreement
between Information Builders Inc.
and Kraft, Inc. for 'Focus
Database'."
30. Schedule 8(f)-1 to the Purchase Agreement is hereby
amended by adding the following item to the list contained therein captioned
"Retained Employees(1)":
"uu. Helm, Henry
vv. Eustace, Jack"
31. Schedule 8(f)-2 to the Purchase Agreement is hereby
amended by replacing the words "Others(1)" with the words "Kuntz, James(1)" in
item 6 of the list contained therein captioned "Transferred Employees."
32. Schedule 8(f)-3 to the Purchase Agreement is hereby
amended by adding the following to the list contained therein captioned
"Offered Employees":
32
<PAGE> 121
<TABLE>
<CAPTION>
"ADDENDUM TO PART A
------------------
<S> <C> <C>
Employee Name Job Title Payroll Classification
------------- --------- ----------------------
Alissa Thorne HR Administrator Salary/Non-Exempt
Katharine Dill A/P Clerk Salary/Non-Exempt
Jim Kuntz Business Unit Mgr. Salary/Exempt
* Edwin Sugay Payroll Clerk
* Renate Mosher Cost Acctg Sup
</TABLE>
<TABLE>
<CAPTION>
ADDENDUM TO PART B
<S> <C> <C>
Employee Name Job Title Payroll Classification
------------- --------- ----------------------
Rufus Kenyan Boiler Tech Hourly
David Vejvoda Boiler Tech Hourly
Sal Anaya Boiler Tech Hourly
Silverio Guerra Boiler Tech Hourly
Carl Neeley Electrician Hourly
Steve Stevenson Machinist Hourly
David Van Building/Grounds Tech Hourly
Tina Chamberlain Purchasing Hourly
Ellie Shaw Sanitation Tech Hourly
Billy Stokes Quality Technician Hourly
</TABLE>
-------------------------------------
* Available for employment by CPC on 1/1/96. May be hourly
or salaried."
33. Schedule 8(h) to the Purchase Agreement is hereby amended by:
a. deleting the words "Base Bakery System -
Integrated Application Portfolio that manages
bakery ordering, intercompany ordering,
production bake, vendor product sourcing,
product availability, product authorization,
product pricing, distribution, truck cubing,
Norand functions, SLF/RMS functions, A/R
Interface, Settlement, Customer History
Analysis, Sales Reporting" from the list
contained therein captioned "Proprietary
Software"; and
b. adding the following words to the end of the
list contained therein captioned "Proprietary
Software":
ITV - Intercompany Transfer Voucher System
33
<PAGE> 122
CWIP - Capital Project Financial Tracking System
S-Print - PRINT function used in Accounts Payable and
General Ledger
PAMI - Packaging and Material Inventory System
34. Schedule 10(k) to the Purchase Agreement is hereby amended by
deleting items 1 and 2 of the list contained therein captioned "Safe Harbor
Leases" (and renumbering the items therein accordingly).
35. The parties hereto acknowledge that the updated and
amended Schedules to the Purchase Agreement which are attached to this
Amendment No. 1 shall replace the corresponding original Schedules attached to
the Purchase Agreement and that all other original Schedules shall remain
unchanged.
Except as expressly set forth herein, no change is made hereby
to the terms and provisions of the Purchase Agreement and as amended hereby the
Purchase Agreement shall remain in full force and effect.
* * * * *
34
<PAGE> 123
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the date first written above.
KRAFT FOODS, INC.
By:
-------------------------
Name:
Title:
KRAFT FOODS BAKERY COMPANIES, INC.
By:
-------------------------
Name:
Title:
CPC INTERNATIONAL INC.
By:
-------------------------
Name:
Title:
CPC BAKING CO., INC.
By:
-------------------------
Name:
Title:
<PAGE> 1
Exhibit (b) Press Release issued by the Company on October 2, 1995.
CPC Vice President Bernard H. Kastory, formerly president of CPC's
Corn Refining Business, has been named chairman and chief executive officer of
the newly formed CPC Baking Business. CPC Vice President Samuel C. Scott,
president of Corn Products, the company's North American corn refining
division, has been named president of the CPC Corn Refining Business,
succeeding Kastory. John J. Langdon, who had been president of CPC's Best
Foods Baking Group, has been named president and chief operating officer of the
new baking business.
Mr. Kastory, 50, joined CPC in 1967 and progressed through a series of
assignments in operations, finance, and general management before being named
vice president, technology, for the Corn Refining Business in 1989. He was
named president of the Corn Refining Business and elected a corporate officer
in 1992.
Mr. Scott, 51, remains president of Corn Products, in addition to
becoming president of the CPC Corn Refining Business. He joined Corn Products
in 1973 and progressed through a series of assignments in sales, marketing, and
business management. He was named president of Corn Products in 1989 and was
elected a corporate officer in 1991.
Mr. Langdon, 55, joined CPC in 1992 as president of the Best Foods
Baking Group. Previously he was senior vice president and group general
manager of the Western region for the General Foods Baking Companies, a unit of
Kraft/General Foods. Mr. Langdon was with Kraft/General Foods for 11 years and
before that served 13 years in the baking operations of Sara Lee.
The newly formed CPC Baking Business combines the Entenmann's sweet
baked products, Freihofer's sweet baked products and breads, Oroweat breads,
and Boboli Italian bread shells businesses purchased from Kraft Foods, Inc.,
with CPC's baking business, which includes Thomas' English muffins, Arnold
and Brownberry breads, and Sahara pita breads. CPC's sales of specialty baking
products now total approximately $1.7 billion, making the company the largest
producer of fresh premium bakery products in the United States.
The purchase of the business from Kraft, a wholly-owned subsidiary of
the Philip Morris Companies Inc., was completed today. CPC announced August 7
that it had agreed to purchase the business, with sales of approximately $1.2
billion, for $865 million.
<PAGE> 2
CPC's Corn Refining Business had sales of $1.2 billion in 1994. With
operations in 17 countries, chiefly in North America and Latin America, CPC is
one of the world's largest corn refiners. Its operations produce starches,
sweeteners, oils, and other products used in more than 60 basic industries,
including the baking, beverage, paper, and pharmaceutical businesses.
ABOUT CPC INTERNATIONAL: CPC International Inc., is among the largest U.S.
food companies and ranks as one the 100 largest industrial companies in the
U.S., with sales prior to the recent baking acquisition of about $8 billion in
the current year. In 1994, consumer foods accounted for 84% of the company's
total sales. Best known among CPC's U.S. products are: Hellmann's and Best
Foods mayonnaise, Mazola corn oil and margarine, Skippy peanut butter, Thomas'
English muffins, Arnold breads, Mueller's pasta products, Karo syrup, and
Knorr soups, sauces, and bouillons. Deriving more than 60% of its sales from
operations outside the U.S. in 1994, CPC is one of the nations most
international food companies. CPC is also one of the largest corn refiners,
with operations in North America and Latin America. Worldwide, CPC
International has operations in 60 countries.
