<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 5, 1996
ERLY Industries Inc.
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
1-7894 95-2312900
(Commission File Number) (I.R.S. Employer
Identification No.)
10990 Wilshire Boulevard, #1800
Los Angeles, California 90024-3955
(Address of Principal (Zip Code)
Executive Offices)
(213) 879-1480
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) On July 5, 1996, American Rice, Inc. ("ARI"), a subsidiary of
ERLY Industries Inc. (the "Registrant") acquired from Campbell
Soup Company and Vlasic Foods, Inc. (the "Sellers") certain assets
of Sellers' domestic Olive Business including real property,
machinery and equipment, inventory, grower advances, trademark
rights, books and records, contracts, permits and intangibles (the
"Assets"). Sellers have no relationship with the Registrant, its
affiliates, the officers or directors of Registrant, or any associate
of any such officer or director. ARI paid approximately $28,400,000
for the Assets and ARI assumed certain liabilities of Sellers. The
purchase price, determined by arm's length negotiations between ARI
and the Sellers, is subject to adjustment. The estimated purchase
price was paid in cash at the closing on July 5, 1996, with the
exception of a credit of $700,000 which was previously paid by ERLY
and a $732,400 note payable by ARI to Campbell Soup Company. The
source of funds used for the consideration was an $85.0 million line
of credit provided to ARI by Harris Trust and Savings Bank,
Individually and as Agent.
On July 5, 1996, ARI also purchased from Campbell Soup
Company 100% of the issued and outstanding shares of common
stock of Compania Envasadora Loreto, S.A. (the "Shares"), which
is engaged in the olive business in Spain. ARI paid approximately
$9,300,000 for the Shares. The purchase price was based on the
estimated fair market value of the Shares on the closing date, and
is subject to adjustment. The purchase price was paid in cash at
the closing on July 5, 1996. The source of funds used for the
consideration was an $85.0 million line of credit provided to ARI
by Harris Trust and Savings Bank, Individually and as Agent.
(b) The Assets were all used in Sellers' Ripe Olive and Green Olive
Businesses and ARI intends to continue using the Assets for such
purposes.
Item 7. Financial Statements and Exhibits.
(a) It is impractical for the Registrant to provide the required
financial statements and accountants' reports for the acquired
businesses at this time, however, the required information will
be filed on or before sixty (60) days of the date of the filing
of this report.
(b) It is impractical for the Registrant to provide the required pro
forma financial information at this time, however, the required
information will be filed on or before sixty (60) days of the date
of the filing of this report.
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EXHIBITS
The following exhibits are filed with this report:
Page
Number
In This
Exhibit Number and Description Filing
- ---------------------------------------- --------
(2.1) Asset Purchase and Sale Agreement Exhibit 2.1,
Between American Rice, Inc. and pages 1-46
Campbell Soup Company, dated as
of June 11, 1996
(2.2) Share Sale Agreement Between Exhibit 2.2,
American Rice, Inc. and pages 1-23
Campbell Soup Company, dated as
of June 11, 1996
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.
Date: July 22, 1996 ERLY INDUSTRIES INC.
--------------------
(Registrant)
By: /s/ Thomas A. Whitlock
----------------------
Thomas A. Whitlock
Vice President and
Corporate Controller
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EXHIBIT 2.1
-----------
ASSET PURCHASE AND SALE AGREEMENT
Between
AMERICAN RICE, INC., Buyer
and
CAMPBELL SOUP COMPANY, Seller
Dated as of June 11, 1996
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TABLE OF CONTENTS
Page
----
1. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . 1
1.1. Purchase and Sale of Assets. . . . . . . . . . . . . . . 1
1.2. Nonassignability . . . . . . . . . . . . . . . . . . . . 2
1.3. Excluded Assets. . . . . . . . . . . . . . . . . . . . . 3
1.4. Assumption of Liabilities. . . . . . . . . . . . . . . . 3
1.5. Retained Liabilities . . . . . . . . . . . . . . . . . . 4
2. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1. Purchase Price . . . . . . . . . . . . . . . . . . . . . 5
2.2. Payment of Estimated Purchase Price. . . . . . . . . . . 6
2.3. Calculation of Final Purchase Price. . . . . . . . . . . 7
2.4. Payment of Final Purchase Price. . . . . . . . . . . . . 7
2.5. Disclaimer of Warranties . . . . . . . . . . . . . . . . 8
3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . 9
3.1. Binding Agreement . . . . . . . . . . . . . . . . . . . 9
3.2. Authority . . . . . . . . . . . . . . . . . . . . . . . 9
3.3. Due Incorporation, Qualification . . . . . . . . . . . . 9
3.4. No Violation of Agreements . . . . . . . . . . . . . . . 9
3.5. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 10
3.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7. Assets . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8. Inventories . . . . . . . . . . . . . . . . . . . . . . 11
3.9. Certain Contracts . . . . . . . . . . . . . . . . . . . 11
3.10. Permits . . . . . . . . . . . . . . . . . . . . . . 11
3.11. Compliance with Applicable Law . . . . . . . . . . 12
3.12. Litigation . . . . . . . . . . . . . . . . . . . . 12
3.13. Real Property . . . . . . . . . . . . . . . . . . . 12
3.14. Environmental Matters . . . . . . . . . . . . . . . 13
3.15. Labor Matters . . . . . . . . . . . . . . . . . . . 13
3.16. Trade Promotions . . . . . . . . . . . . . . . . . 13
3.17. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18. Product Recalls; Market Research . . . . . . . . . . . . 14
3.19. No Other Representations or Warranties . . . . . . . . . 14
4. REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . 14
4.1. Legal Status . . . . . . . . . . . . . . . . . . . . . . 14
4.2. Binding Agreement. . . . . . . . . . . . . . . . . . . . 15
<PAGE>
4.3. Authority. . . . . . . . . . . . . . . . . . . . . . . . 15
4.4. No Violation of Agreements . . . . . . . . . . . . . . . 15
4.5. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6. SEC Disclosure . . . . . . . . . . . . . . . . . . . . . 16
4.7. Projections. . . . . . . . . . . . . . . . . . . . . . . 16
4.8. Financial Capacity . . . . . . . . . . . . . . . . . . . 16
5. PRE-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . 17
5.1. Seller's Covenants . . . . . . . . . . . . . . . . . . . 17
5.2. Publicity. . . . . . . . . . . . . . . . . . . . . . . . 19
5.3. Cooperation. . . . . . . . . . . . . . . . . . . . . . . 19
5.4. Bulk Transfer Law. . . . . . . . . . . . . . . . . . . . 19
5.5. Employee Matters . . . . . . . . . . . . . . . . . . . . 19
5.6. Related Agreements . . . . . . . . . . . . . . . . . . . 21
5.7. Notification of Number of Employees Hired. . . . . . . . 21
6. POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . 21
6.1. Promotions; Receivables. . . . . . . . . . . . . . . . . 21
6.2. Further Assurances . . . . . . . . . . . . . . . . . . . 22
6.3. Noncompetition Covenants . . . . . . . . . . . . . . . . 22
6.4. SEC Reports. . . . . . . . . . . . . . . . . . . . . . . 23
6.5. Relocation of Pickle Packaging Facility. . . . . . . . . 23
6.6. Adjustment of Certain Agreement Payments
and Ad Valorem and Property Taxes . . . . . . . . . 24
6.7. Product Returns. . . . . . . . . . . . . . . . . . . . . 24
6.8. Post-Closing Environmental Matters.. . . . . . . . . . . 25
7. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE . . . . . . . . . 25
7.1. Accuracy of Representations and Warranties;
Performance by Seller. . . . . . . . . . . . . . . . . . 25
7.2. Certified Resolutions. . . . . . . . . . . . . . . . . . 26
7.3. Absence of Litigation. . . . . . . . . . . . . . . . . . 26
7.4. Consents . . . . . . . . . . . . . . . . . . . . . . . . 26
7.5. Sale of Loreto . . . . . . . . . . . . . . . . . . . . . 26
7.6. Trademark License. . . . . . . . . . . . . . . . . . . . 26
7.7. Transition Services Agreement. . . . . . . . . . . . . . 26
7.8. Legal Opinion. . . . . . . . . . . . . . . . . . . . . . 27
7.9. Waiver of Conditions . . . . . . . . . . . . . . . . . . 27
8. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE . . . . . . . . 27
8.1. Accuracy of Representations and Warranties;
Performance by Buyer. . . . . . . . . . . . . . . . 27
<PAGE>
8.2. Certified Resolutions. . . . . . . . . . . . . . . . . . 27
8.3. Absence of Litigation. . . . . . . . . . . . . . . . . . 28
8.4. Consents . . . . . . . . . . . . . . . . . . . . . . . . 28
8.5. Purchase of Loreto . . . . . . . . . . . . . . . . . . . 28
8.6. Transition Services Agreement. . . . . . . . . . . . . . 28
8.7. Legal Opinion. . . . . . . . . . . . . . . . . . . . . . 28
8.8. Waiver of Conditions . . . . . . . . . . . . . . . . . . 28
9. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.1. The Closing. . . . . . . . . . . . . . . . . . . . . . . 29
9.2. Items to be Delivered at Closing by Seller . . . . . . . 29
9.3. Items to be Delivered at Closing by Buyer. . . . . . . . 29
10. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.1. Termination . . . . . . . . . . . . . . . . . . . . 30
10.2. Effect of Termination . . . . . . . . . . . . . . . 30
11. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.1. Indemnity by Seller . . . . . . . . . . . . . . . . 31
11.2. Indemnification by Buyer. . . . . . . . . . . . . . 32
11.3. Indemnification Procedures. . . . . . . . . . . . . 32
11.4. Survival of Representations and Warranties. . . . . 34
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 35
12.1. Recovery of Litigation Costs. . . . . . . . . . . . 35
12.2. Entire Agreement; Modification; Waiver. . . . . . . 35
12.3. Counterparts. . . . . . . . . . . . . . . . . . . . 36
12.4. Assignment. . . . . . . . . . . . . . . . . . . . . 36
12.5. Fees and Expenses . . . . . . . . . . . . . . . . . 36
12.6. Notices . . . . . . . . . . . . . . . . . . . . . . 36
12.7. Governing Law . . . . . . . . . . . . . . . . . . . 38
12.8. Effect of Headings. . . . . . . . . . . . . . . . . 38
<PAGE>
List of Schedules
-----------------
Schedule
--------
1.1(a) Real Property
1.1(d) Grower Advances
1.1(e) Trademarks and Patents
1.1(j) Other Assets
1.3 Excluded Assets
1.4(f) Other Promotions
2.1(c) Inventory Valuation
2.2 Location of Inventory
3.4 Consents Required Under Contracts
3.7 Title; Liens
3.8 Inventory Not Usable or Marketable in
the Ordinary Course of Business
3.9 Certain Contracts
3.10 Permits
3.11 Compliance with Laws
3.12 Litigation
3.14 Environmental Matters
3.16 Trade Promotions
List of Exhibits
----------------
Exhibit
-------
I Payment Note
II Trademark License
<PAGE>
<PAGE> 1
ASSET PURCHASE AND SALE AGREEMENT
This Agreement is dated and effective as of June 11, 1996 between
AMERICAN RICE, INC., a Texas corporation, whose address is 16825
Northchase Drive, Houston, Texas 77060 ("Buyer"), and CAMPBELL
SOUP COMPANY, a New Jersey corporation, whose address is Campbell
Place, Camden, New Jersey, 08103-1799. This Agreement is being
executed simultaneously with the Share Sale Agreement (the "Loreto
Agreement") dated and effective as of this date between Buyer and Seller
(certain capitalized terms used in this Agreement are defined in Appendix
A, which is incorporated into this Agreement by reference).
BACKGROUND
Seller is engaged, directly or through subsidiaries, in the Business.
Buyer desires to purchase from Seller and Seller desires to sell to Buyer,
on the terms and conditions set forth herein, certain assets, and Buyer
desires to assume certain specified liabilities, relating to the Business. As
part of the consideration for this sale and purchase, Seller and Buyer also
desire to enter into the Loreto Agreement, and certain other agreements
and understandings as set forth herein.
In consideration of the mutual covenants, agreements,
representations and warranties herein contained, and for other valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, Seller and Buyer, intending to be legally bound, agree as
follows:
1. PURCHASE AND SALE OF ASSETS
1.1. Purchase and Sale of Assets.
On the Closing Date Buyer shall purchase from Seller, and Seller
shall sell to Buyer, all of Seller's right, title and interest in the
following assets, other than the Excluded Assets, that are used in
the Business and are existing on the Closing Date (collectively the
"Purchased Assets"):
(a) all of the real property located in Visalia, Lindsay and
Exeter, California, which is owned in fee by Seller and
described on Schedule 1.1(a), together with the buildings,
structures, fixtures and improvements thereon and all
easements, rights and privileges appurtenant to such real
property (the "Real Property"), and all other real property
occupied by Seller exclusively with respect to the Business;
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(b) to the extent located at any of the Real Property, all of
Seller's machinery, equipment, furniture, office equipment,
supplies and other tangible personal property, including all
maintenance supplies and repair tools and related parts (the
"Fixed Assets");
(c) all Inventory of the Business, whether or not reflected on
the books and records of the Business, including Inventory
in transit to Seller;
(d) all Grower Advances identified on Schedule 1.1(d);
(e) all rights in and to the brand names "Early California," "El
Senor" and "Enticing," the patents listed on Schedule 1.1(e)
(together the "Trademarks") and the Secondary
Trademarks listed on Schedule 1.1(e) on an "AS IS,
WHERE IS" basis;
(f) all customer and supplier lists and files and other books and
records relating exclusively to the Business;
(g) subject to Section 1.2, the Contracts and all rights of Seller
thereunder;
(h) to the extent assignable by Seller, the Permits;
(i) the other assets, if any, described on Schedule 1.1(i); and
(j) all intangibles associated with the Business as a going
concern.
1.2. Nonassignability.
If any Contract or Permit included in the Purchased Assets may
not be transferred without the consent, approval or waiver of a
third party (including, without limitation, a Governmental Entity)
and such transfer or attempted transfer would constitute a breach
thereof or a violation of any law, nothing in this Agreement will
constitute a transfer or an attempted transfer thereof. Seller will
use reasonable efforts, and Buyer will cooperate with Seller, to
obtain such consents, approvals and waivers as are necessary to
transfer such Contracts and Permits to Buyer; provided, however,
that Seller will not be obligated to pay any consideration therefor
or to incur any additional liability or obligation in connection
therewith or to remain or become secondarily liable thereon. If
such consents, approvals and waivers are not (for any reason)
obtained by the Closing Date, Seller will cooperate in any
reasonable arrangement requested by Buyer to provide Buyer with
the benefits under such Contracts and Permits as if such Contracts
and Permits had been assigned to Buyer, including enforcement for
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<PAGE> 3
the benefit of Buyer, at Buyer's expense, of any and all rights of
Seller against any other party thereto.
1.3. Excluded Assets.
Seller is not by this Agreement assigning to Buyer any assets,
rights or properties not specifically described in Section 1.1
(including the other Schedules incorporated therein). Without
limiting the foregoing, Seller shall retain all of its right, title and
interest in and to, and the Purchased Assets shall not include any
of, the following assets (collectively, the "Excluded Assets"):
(a) cash and cash equivalents, such as bank deposits or money
market accounts;
(b) the pickle packaging production facility at the Visalia,
California location of Seller, and all related inventory,
supplies, equipment, machinery, tools, parts and other
assets as described on Schedule 1.3 (the "Pickle Packaging
Assets"), and all contracts, agreements, records, software
and other intangible assets related to any of the Pickle
Packaging Assets;
(c) all accounts and notes receivable of Seller relating to the
Business, including without limitation accounts receivable
for any products shipped on or before the Closing but not
yet invoiced;
(d) Seller's Tax and accounting books and records, provided
that Seller permits Buyer reasonable access to such books as
provided in Section 5.1, and Seller's stock records and
minute books;
(e) all refunds of Taxes or claims for refund of Taxes of any
kind relating to any period ending on or before the Closing
Date;
(f) any rights or benefits pursuant to any of Seller's insurance
policies (intercompany, self-insurance or otherwise);
(g) except as otherwise provided in this Agreement, all claims,
causes of action and rights of action by Seller against third
parties; and
(h) those assets listed on Schedule 1.3.
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<PAGE> 4
1.4. Assumption of Liabilities.
From and after the Closing Date, Buyer shall assume and pay,
perform and fully satisfy when due, in accordance with the terms
thereof, the following liabilities of Seller (the "Assumed
Liabilities"):
(a) all Liabilities under or with respect to the Contracts in
accordance with the respective terms thereof;
(b) all Liabilities for Grower Payables existing on the Closing
Date;
(c) all Liabilities for Inventory ordered by Seller in the
ordinary course of conduct of the Business before the
Closing and delivered to Buyer after the Closing Date;
(d) all Liabilities for Taxes imposed upon or relating to the
Real Property or the Business which become due and
payable after the Closing Date to the extent such amounts
relate to the period after the Closing Date, and all
Liabilities for one-half (50%) of all transfer Taxes as
provided in Section 12.5;
(e) all Liabilities for trade programs, price reduction
programs, trade allowances and related programs of Seller
offered to distributors or customers of the Business,
whether written or oral, related to periods after the Closing
Date, to the extent described on Schedule 3.16, ("Trade
Promotions");
(f) all Liabilities in respect of all coupons for products of the
Business ("Coupons") which have not been presented to or
paid by Seller on or before the Closing Date and all other
consumer promotions, events, refunds and rebates ("Other
Promotions") relating to sales of products of the Business
after the Closing Date, to the extent described on Schedule
1.4(f);
(g) all Liabilities in respect of product liability claims for
products of the Business packed after the Closing Date and,
solely to the extent such Liabilities arise out of Buyer's
failure to properly maintain, store, deliver for sale or
otherwise handle such products, all such Liabilities relating
to such products packed on or before the Closing Date; and
(h) subject to Section 6.7, all Liabilities for unsalable products
of the Business which are returned or received by Seller or
Buyer after the Closing Date.
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<PAGE> 5
1.5. Retained Liabilities.
Except as otherwise expressly provided herein, Buyer shall not
assume any Liabilities other than the Assumed Liabilities and
Seller shall retain and pay or discharge when due all of Seller's
Liabilities with respect to the Business (collectively, "Retained
Liabilities"), including, without limitation:
(a) all Liabilities relating to the Excluded Assets (including
without limitation any such arising pursuant to any
collective bargaining or other agreement relating to
employment matters);
(b) all Liabilities that are not related to the Business or the
Purchased Assets;
(c) subject to Section 12.5, all Liabilities of Seller for Taxes,
whether incurred, accrued or assessed before, on or after
the Closing Date;
(d) all Liabilities in respect of product liability claims for
products of the Business packed on or before the Closing
Date, other than to the extent such Liabilities arise out of
Buyer's failure to properly maintain, store, deliver for sale
or otherwise handle any such products;
(e) all Liabilities for unsalable products of the Business to the
extent provided in Section 6.7;
(f) all Liabilities in respect of the implementation of the
Remedial Action Plan referred to in Schedule 3.14, as
provided in Section 11.1(b);
(g) all Liabilities incurred in connection with the litigation
listed in Section 3.12; and
(h) all Liabilities for possible deficiencies under Federal
Marketing Orders relating to the 1995 and prior growing
seasons.
2. PURCHASE PRICE
2.1. Purchase Price.
Subject to adjustment as provided below, the aggregate purchase
price for the Purchased Assets (the "Purchase Price") shall equal
the sum of the following:
(a) $10,800,000 for the Fixed Assets and Real Property; plus
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<PAGE> 6
(b) $400,000 for the intangibles of the Business; plus
(c) the net of:
(i) the number of cases of packaged and labelled
Inventory included in the Purchased Assets as of the
close of business on the Closing Date multiplied by
the rate for each SKU and location of such Inventory
as set forth on Schedule 2.1(c)(i); plus
(ii) the number of cases of packaged but unlabelled
Inventory included in the Purchased Assets as of the
close of business on the Closing Date multiplied by
the rate for each SKU of such Inventory as set forth
on Schedule 2.1(c)(ii); plus
(iii) the quantities of raw produce Inventory stored at the
Real Property as of the close of business on the
Closing Date multiplied by the rate for each category
of such Inventory as set forth on Schedule 2.1(c)(iii),
plus
(iv) the book value of all other Inventory included in the
Purchased Assets, calculated on a basis consistent
with Schedule 2.1(c)(iv)(A), including without
limitation all empty cases, containers and cans and
labels, except that only those quantity of labels as
identified in Schedule 2.1(c)(iv)(B) will be included
in this calculation, less
(v) the amount, if any, by which $4,339,000 exceeds the
number of cases of Inventory included in calculating
the Purchase Price pursuant to Sections 2.1(c)(i) and
2.1(c)(ii) multiplied by $2.60;
plus
(d) Grower Advances identified on Schedule 1.1(d) and less
(e) the amount of payables for expenses incurred by and at any
of the Real Properties, including any Grower Payables,
through the close of business on the Closing Date.
2.2. Payment of Estimated Purchase Price.
(a) On the business day prior to the Closing Date, Seller shall
calculate, based on its internal records, an estimate of the
Purchase Price using for this purpose:
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<PAGE> 7
(i) the Inventory levels as of the end of the week prior
to the Closing Date in accordance with Section
2.1(c), reduced by estimated sales through the
Closing Date and
(ii) its good faith estimate of the amounts of Grower
Advances and payables pursuant to 2.1(d) and 2.1(e)
as of the close of business on the Closing Date.
Seller shall notify Buyer of such estimate, identifying
categories of Inventory by location. Seller shall thereupon
calculate, based upon such estimated quantity, the amount
payable by Buyer pursuant to Section 2.1. Following the
Closing, the Purchase Price shall be conclusively determined
as provided in Section 2.3 and a post-closing payment shall
be made as required by Section 2.4.
(b) At Closing, Buyer shall pay to Seller the estimated Purchase
Price calculated pursuant to Section 2.2(a), by delivery of
its promissory note, substantially in the form of Exhibit I
hereto (the "Payment Note"), in an amount equal to 25.0%
of the estimated value of the packaged and labelled
Inventory of the Green Olive Business pursuant to Section
2.2(a), and shall pay the balance by wire transfer of
immediately available funds. The principal amount of the
Payment Note shall be paid in 36 equal monthly
installments, and shall bear interest on the principal
amount thereof from the Closing Date, payable at the same
time, at an annual rate equal to one percentage point in
excess of the Prime Rate (as published in the Wall Street
Journal). The terms of the Payment Note, including
provisions permitting the acceleration, under certain
circumstances, of amounts due thereunder, are
incorporated by reference into this Agreement.
2.3. Calculation of Final Purchase Price.
(a) Seller shall take a complete physical inventory of the
Inventory to be included in the Purchased Assets as of the
weekend before the Closing Date and based on such
inventory shall calculate the value of the Inventory in
accordance with Section 2.1(d). Buyer shall have the right
to send representatives to observe the taking of such
inventory. Buyer shall determine the actual amounts of
Grower Advances and Grower Payables as of the close of
business on the Closing Date pursuant to 2.1(d) and 2.1(e)
above and as soon as practicable following Closing (and in
any event within 15 days thereafter) shall submit these
amounts to Seller along with all supporting documentation.
Seller shall determine the final Purchase Price based on the
foregoing information in accordance with Section 2.1 and
submit its calculation of the final Purchase Price to the
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<PAGE> 8
Buyer within 30 days of receiving from Buyer the actual
amounts for Grower Advances and payables.
(b) If for any reason Buyer and Seller do not agree on the
amount of the final Purchase Price within 60 days after the
Closing Date, then such calculation and any disputed
matter may be submitted by either party to and determined
by a national accounting firm or other person reasonably
acceptable to the other party (the "Arbitrator"). The
Arbitrator shall use reasonable efforts to resolve the dispute
within 30 days of the date after being engaged and its fees
and expenses incurred in resolving the disputed matters
shall be equitably apportioned by the Arbitrator based
upon the extent that it determines that Buyer on the one
hand, or Seller, on the other hand, is the prevailing party
in the resolution of all disputed matters. The final
Purchase Price, shall, after resolution of any disputes
pursuant to this Section 2.3(b), be final, binding and
conclusive on all parties to this Agreement.
2.4. Payment of Final Purchase Price
(a) Within 10 days after the conclusive determination of the
final Purchase Price by agreement or arbitration pursuant
to Section 2.3, Seller or Buyer, as appropriate, shall make
a payment to the other party hereto, in an amount such
that immediately following such payment the Seller shall
have received from Buyer, pursuant to Section 2.2 and this
Section 2.4, an amount exactly equal to the final Purchase
Price, and no more and no less. Notwithstanding the
foregoing, to the extent any difference between the final
Purchase Price and amount paid at Closing pursuant to
Section 2.2 results from any difference in the value of
packaged and labelled Inventory of the Green Olive
Business (as calculated pursuant to Section 2.2 and Section
2.3), the amount of such difference shall be paid, if by
Seller, 75.0% by wire transfer and 25% by reduction (to be
effective as of the Closing Date) of the principal amount of
the Payment Note, and if by Buyer, 75.0% by wire transfer
and 25.0% by delivery of a second Payment Note in such
amount (dated and effective as of the Closing Date). The
balance of any difference shall be paid as provided above.
(b) The consideration paid by Buyer to Seller for the various
assets and rights acquired hereunder shall be allocated on
a reasonable basis to be agreed to by the parties. Buyer
and Seller shall file all Tax returns consistently with such
allocation. Within 90 days following the Closing, Buyer
shall prepare and submit to Seller Internal Revenue Form
8594 (relating to purchase price allocation), prepared in
accordance with such allocation.
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<PAGE> 9
2.5. Disclaimer of Warranties.
EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS
AND WARRANTIES IN THIS AGREEMENT, SELLER IS SELLING THE PURCHASED
ASSETS (AND THE BUSINESS AND ASSETS REPRESENTED THEREBY) ON AN "AS
IS, WHERE IS" BASIS AND DISCLAIMS ALL OTHER WARRANTIES, REPRESENTATIONS
AND GUARANTEES WHETHER EXPRESS OR IMPLIED. SELLER MAKES NO IMPLIED
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE AND NO OTHER IMPLIED WARRANTIES WHATSOEVER.
Buyer acknowledges that neither Seller nor any of its representatives
nor any other person has made any representation or warranty, express
or implied, as to the accuracy or completeness of any memoranda,
charts, forecasts or other forward looking information, summaries or
schedules previously made available by Seller or its representatives
to Buyer or any other information which is not included in this Agreement
or the Disclosure Schedule, and neither Seller nor any of its
representatives nor any other person will have or be subject to any
liability to Buyer or any other person resulting from the
distribution of any such information to, or use of any such
information by, Buyer or any of its agents, consultants,
accountants, counsel or other representatives.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as disclosed in the Disclosure Schedule previously delivered
to Buyer (the "Disclosure Schedule") or otherwise specifically
provided herein, Seller represents and warrants to Buyer that:
3.1. Binding Agreement.
This Agreement and all Related Agreements executed by Seller are
legally binding on Seller and enforceable against Seller in
accordance with their respective terms.
3.2. Authority.
Seller has full corporate power, authority and legal right to enter
into and perform its obligations under this Agreement and the
Related Agreements. The execution and delivery of this Agreement
and the Related Agreements and the performance by Seller of their
respective terms have been duly authorized by all necessary
corporate action.
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<PAGE> 10
3.3. Due Incorporation, Qualification.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey and is qualified
to do business in the jurisdictions in which its conduct of the
Business legally requires such qualification, except jurisdictions in
which the failure to be so qualified does not have a Material
Adverse Effect. Seller has the full corporate power, authority and
legal right to own its properties and assets included in the Business
and to conduct the Business as presently conducted.
3.4. No Violation of Agreements.
Except as disclosed on Schedule 3.4 or Schedule 3.9, neither the
execution and delivery of this Agreement nor compliance by Seller
with its terms and provisions will trigger an event of default or
acceleration under or violate, or require the consent or approval
of any person pursuant to, (a) any provision of the certificate of
incorporation or bylaws of Seller; (b) any provision of any
Contract; or (c) any law, statute, Permit or regulation or, insofar
as is known to Seller, any injunction, order or decree of any
Governmental Entity or court to which Seller is subject except
where, in all cases, such a violation or failure to obtain consent
would not have a Material Adverse Effect.
3.5. Subsidiaries.
Other than the shares of Loreto and the Sadrym Shares, the
Business does not include, directly or indirectly, any equity interest
or investment in any corporation, partnership, business, trust, or
other person or any contract or agreement to acquire such an
interest or make such an investment. The Shareholder Agreement
dated January 30, 1985 (the "Sadrym Shareholder Agreement")
constitutes the only written agreement setting forth the
shareholders' rights relating to Sadrym.
3.6. Taxes.
Seller has duly filed or caused to be filed all Tax reports and
returns required to be filed by it that relate to the Business or the
Purchased Assets, and has duly paid or caused to be duly paid all
Taxes shown on such returns to be due to federal, state, local or
foreign taxing authorities, except those being contested in good
faith or for which adequate reserves have been taken. There are
no pending claims asserted for Taxes upon the Purchased Assets.
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<PAGE> 11
3.7. Assets.
Except as disclosed on Schedule 3.7 or on another schedule hereto,
Seller has (except for assets acquired between the date of this
Agreement and the Closing Date) and on the Closing Date
(immediately before the Closing) will have, good and marketable
title to all of the Purchased Assets (other than the Real Property,
as to which representations are made in Section 3.13), free and
clear of all liens and encumbrances, and at the Closing Buyer will
acquire good and marketable title to the Purchased Assets (other
than the Real Property, as to which representations are made in
Section 3.13) free and clear of any liens or encumbrances. The
Fixed Assets, Real Property and Inventories constitute substantially
all of the tangible assets used by Seller in the production operations
of the Business. The Sadrym Shares constitute 51% of the
outstanding shares of common stock of Sadrym. There are no
agreements restricting Seller's right to convey to Buyer the
Purchased Assets (excluding the Permits, as to which no
representation or warranty is made), other than as disclosed on
Schedule 3.4 or Schedule 3.9. To the best of Seller's knowledge,
none of the products sold by Seller with respect to the Business and
none of the Trademarks included in the Purchased Assets which
are currently registered with the United States Patent and
Trademark Office infringe or have been alleged to infringe any
trademark or other proprietary right of any person. Except as set
forth on Schedule 1.1(e), to the best of Seller's knowledge, Buyer's
rights to use the Trademarks will not be limited or affected by
reason of any of the transactions contemplated hereby. Seller is
making no representation or warranty as to any of the Secondary
Trademarks, including (without limitation) any such respecting
their validity, enforceability, ownership, or absence of
infringement. On the Closing Date, the Fixed Assets included in
the Purchased Assets will in the aggregate be in operating
condition, subject to normal wear and tear.
3.8. Inventories.
Except as described on Schedule 3.8, the Inventories included in
the Purchased Assets, including work-in-process, are usable or
marketable in the ordinary course of business. Since January 28,
1996, the Inventories have been replenished in a normal and
customary manner consistent with past practice of the Business and
prudent practice prevailing in the olive business for inventory of
the type included in the Inventories, except that Seller has, in
accordance with its business plans, been significantly reducing such
inventory levels. Schedule 2.2 sets forth each facility and
warehouse in the United States in which Inventory is located.
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<PAGE> 12
3.9. Certain Contracts.
Schedule 3.9 identifies the Contracts, (other than Contracts that
do not require payment of more than $50,000 for any one Contract
and Contracts that are otherwise not material). Seller has
performed in all material respects all obligations required to be
performed by it under each of the material Contracts and, to the
best of Seller's knowledge, no condition exists or event has
occurred which with notice or lapse of time would constitute a
default or a basis for delay or non-performance by Seller or by any
other party thereto. Subject to Section 1.2, upon consummation
of the Closing, all of Seller's right in and to those Contracts which
are evidenced by a writing shall be transferred to Buyer, free and
clear of all restrictions, pledges, liens or other claims or
encumbrances of any nature except as set forth in the written
documentation thereof, copies of which have been made available
to Buyer.
3.10. Permits.
Seller possesses (or has made timely application for) all Permits
and other governmental approvals necessary to enable it to carry
on the Business as currently conducted, including without
limitation those listed on Schedule 3.10, and the employees and
agents, if any, of Seller also have all such Permits and other
governmental approvals as are required of them in carrying out
their duties on behalf of the Business, except where the lack of
such Permit or other approval would not have a Material Adverse
Effect. Each such Permit and other governmental approval is in
full force and effect, there has been no default or breach
thereunder in any material respect, and there is no pending or, to
the best knowledge of Seller, threatened proceeding under which
any Permit may be revoked, terminated or suspended. To the best
of Seller's knowledge, none of the Permits are assignable by Seller.
3.11. Compliance with Applicable Law.
Except as disclosed on Schedule 3.11 or Schedule 3.12, Seller has
not received any notice that it is, in the conduct of the Business, in
substantial noncompliance with any law, statute, ordinance, permit
or regulation, the enforcement of which would have a Material
Adverse Effect.
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<PAGE> 13
3.12. Litigation.
Except as disclosed on Schedule 3.12, there is no legal action or
governmental proceeding or investigation, domestic or foreign,
pending or, to the best of Seller's knowledge, threatened against
Seller with respect to the Business which, if adversely determined
against Seller, would have a Material Adverse Effect; and there
are no judicial or governmental orders or decrees issued against
Seller materially affecting the conduct of the Business or the Real
Property.
3.13. Real Property.
Seller has, and on the Closing Date will convey to Buyer, good and
marketable title in fee simple to the Real Property and owns all
right, title and interest in all leasehold estates and other rights
purported to be granted to it by the leases and other agreements
included in the Purchased Assets, in each case free and clear of any
restriction, mortgage, deed of trust, pledge, lien, security interest
or other charge, claim, lien or encumbrance; except for:
(a) liens for taxes, assessments and other charges which may be
paid without penalty or which are being contested by
appropriate proceedings,
(b) such utility and municipal easements and restrictions, if
any, as do not detract in any material respect from the
value or marketability of the property subject thereto,
(c) as set forth in such leases and other agreements (copies of
which have been made available to Buyer) and
(d) all restrictions, effective mortgages, deeds of trust, pledges,
liens, security interests or other encumbrances which have
been or would be disclosed by a title insurance policy
covering the Real Property.
All of the buildings and structures included in the Real Property
are structurally sound. The Real Property constitutes all of the
United States real property used in the production operations of
the Business. No condemnation proceeding is pending or, to the
knowledge of Seller, threatened with respect to the Real Property
which would interfere in any material respect with the Business.
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<PAGE> 14
3.14. Environmental Matters.
To the best of Seller's knowledge, except as set forth in Schedule
3.14:
(a) the Real Property has been maintained by Seller and the
Business has been conducted by Seller in material
compliance with all Environmental Laws,
(b) Seller has not received written notice of any pending or
threatened action, claim or proceeding under
Environmental Laws arising out of the condition of the Real
Property or the conduct of the Business, and
(c) Seller has obtained all applicable environmental permits
and authorizations necessary to the operation of the
Business.
3.15. Labor Matters.
There are no pending grievances, arbitration proceedings, unfair
labor practice charges or other similar controversies between Seller
and any employees involved in the Business or the Teamsters Union
which could reasonably be expected to have a Material Adverse
Effect; provided that Seller does not make any representation
concerning the possible effects of the contemplated negotiation of
additional terms and conditions of employment or of the employee
furlough currently in effect. Seller acknowledges that Buyer is not
assuming any of Seller's contracts or commitments with respect to
any of Seller's employees.
3.16. Trade Promotions.
Schedule 3.16 and Schedule 1.4(f) identify, as of the date hereof,
all material Trade Promotions and Other Promotions to which
Seller has committed in writing.
3.17. Brokers.
Seller has not employed any broker, finder, or financial advisor,
or incurred any liability for any brokerage fee or commission,
finder's fee or financial advisory fee, in connection with the
transactions contemplated by this Agreement.
3.18. Product Recalls; Market Research.
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<PAGE> 15
(a) There have been no voluntary or involuntary product
recalls with respect to the products of the Business during
the last three years. To the knowledge of the Seller's senior
management, there have been no incidents of product
tampering or threatened incidents of product tampering
during the last three years.
(b) Seller has made available to the Buyer all market research
studies relating to consumer preference for and brand
identity of Seller's and its competitors' products included in
the Business, which were conducted by or on behalf of
Seller since August 1, 1994.
3.19. No Other Representations or Warranties.
Except for the representations and warranties contained in this
Section 3, as modified by the several disclosure Schedules referred
to herein, and in the Loreto Agreement neither Seller nor any
other person or entity makes any other express or implied
representation or warranty on behalf of Seller, and Seller hereby
disclaims any such representation or warranty whether by Seller
or any of its or the Business' respective officers, directors,
employees, agents or representatives or any other person, with
respect to the execution and delivery of this Agreement or the
transactions contemplated hereby, notwithstanding the delivery or
disclosure to Buyer or any of its officers, directors, employees,
agents or representatives or any other person of any
documentation or other information by Seller or any of its or the
Business' respective officers, directors, employees, agents or
representatives or any other person with respect to any one or
more of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1. Legal Status.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas and has full
corporate power, authority and legal right to own its properties
and assets and to conduct its business as presently conducted. The
copies of the certificate of incorporation and by-laws of Buyer
which have been delivered to Seller are complete and correct.
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<PAGE> 16
4.2. Binding Agreement.
This Agreement and all Related Agreements executed by Buyer are
legally binding on Buyer and enforceable against Buyer in
accordance with their terms.
4.3. Authority.
Buyer has full corporate power, authority and legal right to enter
into and perform its obligations under this Agreement and the
Related Agreements and, except for filings required by the HSR
Act or by federal securities laws, no registration with, consent or
approval of, notice to, or any action by, any person is necessary in
connection with Buyer's execution, delivery and performance of
this Agreement or the Related Agreements, other than as may be
required to obtain the Permits. Buyer is not required to obtain the
consent of the holders of its mortgage notes issued pursuant to the
ARI Indenture to the transactions contemplated hereby. The
execution and delivery of this Agreement and the Related
Agreements and the performance by Buyer of their respective
terms have been duly authorized by all necessary corporate action.
4.4. No Violation of Agreements.
Neither the execution and delivery of this Agreement nor
compliance by Buyer with its terms and provisions will trigger an
event of default or acceleration under or violate (a) any provision
of the certificate of incorporation or bylaws of Buyer; (b) any
contract, license, franchise or permit to which Buyer is a party or
by which it is bound; or (c) any law, statute or regulation or,
insofar as is known to Buyer, any injunction, order or decree of
any Governmental Entity or courts to which Buyer is subject
except where, in all cases, such a violation would not prohibit or
materially impair Buyer's ability to perform its obligations under
this Agreement or any Related Agreement.
4.5. Brokers.
Neither Buyer nor any of Buyer's officers, directors, or employees
has employed any broker, finder, or financial advisor, or incurred
any liability for any brokerage fee or commission, finder's fee or
financial advisory fee, in connection with the transactions
contemplated by this Agreement.
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<PAGE> 17
4.6. SEC Disclosure.
All SEC Reports filed by Buyer with the Securities and Exchange
Commission since January 1, 1994 complied when filed in all
material respects with the applicable requirements of the Securities
Act of 1933, as amended and the Securities Exchange Act of 1934,
as amended, and the applicable rules and regulations of the
Securities and Exchange Commission promulgated thereunder and
at the time filed did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
when necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading.
4.7. Projections.
In connection with the Buyer's investigation of the Business,
Buyer may have received from Seller or its representatives or
advisors certain projections and other forecasts including volume
forecasts. Buyer acknowledges that there are uncertainties
inherent in attempting to make such projections and other
forecasts, 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 projections and other forecasts,
and that Buyer will have no claim against Seller with respect
thereto. Accordingly Buyer further acknowledges that neither
Seller nor its representatives or advisors make any representation
or warranty with respect to such projections and other forecasts,
if any.
4.8. Financial Capacity.
Buyer has provided to Seller true and complete copies of the
commitment letters for the financing (the "Financing")
contemplated by Buyer to finance the acquisition of the Purchased
Assets hereunder and the operation of the Business following the
Closing (the "Financing Commitments"). The Financing
Commitments have been accepted by Buyer and are in full force
and effect. As of the date hereof, Buyer is not aware of any fact
or circumstance (including, without limitation, the negotiation of
definitive agreements, including inter-creditor agreements) which
could reasonably be expected to prevent Buyer from obtaining
financing which is sufficient to consummate the transactions
contemplated by this Agreement and the Loreto Agreement and to
operate the Business following the Closing.
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<PAGE> 18
5. PRE-CLOSING COVENANTS
5.1. Seller's Covenants.
Seller covenants as follows:
(a) Buyer's Access. Buyer and its representatives shall, before
the Closing, have reasonable access (subject, among other
things, to reasonable restrictions designed to comply with
applicable antitrust and related laws and regulations)
during normal business hours and upon reasonable advance
notice to Seller, to such management or other employees of
Seller as Buyer may reasonably request, and to the
Purchased Assets, business and books and records of the
Business, and Seller will furnish Buyer (subject to
reasonable restrictions) with such financial and operating
data and other information relating to the Business and the
Purchased Assets as Buyer shall from time to time
reasonably request for the purpose of verifying the
representations and warranties of Seller hereunder and in
order for Buyer to be able to prepare and timely file such
unaudited and audited financial information relating to the
Business as Buyer is required to file under the federal
securities laws. In connection with its preparation of any
such financial information, in order to minimize Buyer's
need for direct access, Buyer shall, at its own expense, use
the services of the Philadelphia office of Price Waterhouse
LLP to the fullest extent possible in conducting such audit,
provided that Buyer's regular audit partner based at
Houston, Texas may have ultimate responsibility for such
audit and issue the final report thereon. Buyer
acknowledges that certain of the information which has
been or may be made available to it is proprietary and
includes confidential information. Buyer shall hold all such
information in confidence and shall not disclose it to any
person before the Closing (and, to the extent it relates to
Seller or any of Seller's operations other than the Business,
after the Closing) without the prior written approval of
Seller. The foregoing restriction shall not apply to any
information which is or becomes publicly known other than
by breach of this provision or which is lawfully obtained
from a third party, or to any disclosure required by law.
If the transactions contemplated hereby are not
consummated, Buyer shall return to Seller (without
retaining any copies thereof) all documents, work papers
and any other material obtained by Buyer or on its behalf
from Seller, the Business or their respective agents, and all
copies, summaries and extracts thereof, and shall at all
times thereafter maintain the confidentiality of and shall
not use for any purpose any and all confidential
information obtained regarding Seller, the Purchased Assets
or the Business. In any event, all information provided or
obtained pursuant to this Section 5.1(a) shall be held by
Buyer in accordance with and subject to the terms of the
Confidentiality Agreement between Buyer and Seller which
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<PAGE> 19
agreement shall remain in full force and effect following
execution of this Agreement and consummation of the
transactions contemplated hereby.
(b) Conduct of the Business. Except as Seller otherwise
communicates to Buyer in writing, Seller shall prior to
Closing conduct the Business in the ordinary course and
shall not make or institute any material purchase, sale,
lease or operation for the Business other than in the
ordinary course of business consistent with past practice,
without the prior written consent of Buyer.
(c) Further Covenants. From the date hereof and until the
Closing, Seller shall:
(i) not subject any of the Purchased Assets to any lien,
other than the liens disclosed in the Disclosure
Schedule, or sell or transfer any substantial portion
of the Purchased Assets, other than Inventory sold
or used, and supplies used, in the ordinary course of
business;
(ii) maintain the Business' books and records in
accordance with good business practices and on a
basis consistent with prior practice and the
provisions herein; and
(iii) comply with respect to the Business in all material
respects with all material laws, rules, regulations,
writs, statutes, ordinances, judgments, injunctions,
decrees, determinations, awards, and other orders of
every court and Governmental Entity applicable to
the Business, or to the conduct of the Business, and
shall perform, and cause the Business to perform, its
obligations pursuant to the Contracts without
default in any material respect; other than matters
contested in good faith, the noncompliance with
which, individually or in the aggregate, do not and
will not have a Material Adverse Effect.
(iv) use reasonable efforts to preserve the Business, and
the business relationships and goodwill related
thereto, (provided that no covenant is made as to
any matter relating to employees of the Business);
(v) continue to maintain the insurance relating to the
Business, subject to variations in amounts required
by the ordinary operations of the Business, and to
pay all premiums thereon when due;
(vi) confer with Buyer concerning operational matters of
a material nature affecting the Business, and report
periodically to Buyer concerning the status of the
Business; and
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<PAGE> 20
(vii) not issue any new coupon, trade allowance or other
similar promotional programs pertaining to the
Business without Buyer's written approval, except as
described on Schedule 3.16 or Schedule 1.4(f).
5.2. Publicity.
Neither party to this Agreement shall issue or cause the publication
of any press release or other public announcement with respect to
this Agreement or the transactions contemplated hereby without
the prior consent of the other party to this Agreement, except as
may be required by law or as required by any stock exchange on
which the shares of Seller's or Buyer's stock are listed, in which
event the parties shall consult to the extent possible on the timing,
form and content of any such release or announcement.
5.3. Cooperation.
Each of Buyer and Seller shall cooperate with the other in the
performance of all obligations under this Agreement and shall use
reasonable efforts in good faith to fulfill its obligations under this
Agreement and to satisfy or cause to be satisfied, at or before the
Closing, the conditions to each party's performance under this
Agreement insofar as such conditions are within the control of such
party, including promptly making all filings required by the HSR
Act and seeking any other consents and approvals of any
Governmental Entity required to be obtained by either of them in
order to permit the consummation of the transactions contemplated
by this Agreement, or to otherwise satisfy the conditions set forth
in Sections 7 and 8. Buyer and Seller each shall advise the other
party promptly if such party determines that any condition
precedent to its obligations hereunder may not be satisfied in a
timely manner. In addition, Buyer hereby agrees, and agrees to
cause its representatives, to take no action outside the ordinary
course of business reasonably likely to have a Material Adverse
Effect.
5.4. Bulk Transfer Law.
Seller and Buyer hereby waive compliance with the California bulk
transfer law and the bulk transfer law of any other jurisdiction in
which Purchased Assets are located, with respect to the purchase
of the Purchased Assets.
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<PAGE> 21
5.5. Employee Matters.
(a) Employees. Seller shall, as of the close of business on the
Closing Date, terminate all employees of the Business other
than any such employed in connection with the operation or
relocation of the Pickle Packaging Assets. As soon as
practicable following the date hereof, Buyer shall solicit
applications for employment both from such employees of
Seller and from the general public. Buyer shall interview
any such employee who applies for employment with Buyer
and give due consideration to such employee's experience
and skill, but Buyer shall not be obligated following Closing
to employ any of Seller's employees.
(b) Benefit Plans. As of the Closing Date all employees
formerly employed by the Business will cease participation
in the Seller's Campbell's Soups Savings and 401(k) Plan
(the "Campbell Savings Plan"), the Long-Term Incentive
Plan, the Management Worldwide Incentive Plan and all
other employee benefit plans of Seller and Seller will retain
all obligations and liabilities to employees under such plans.
Account balances in the Campbell Savings Plan of
participating employees of the Business will be fully vested
and distributed to such employees as soon as practicable
after the Closing Date in accordance with the terms of the
Campbell Savings Plan, subject to applicable laws and
regulations. Coverage of any employees of the Business
under the Campbell Business Travel Accident Insurance
Plan will cease as of the Closing Date.
(c) No Retirement Benefits. As of the date hereof, certain
employees of the Business are eligible to participate in the
Campbell Soup Retirement and Pension Plan for Salaried
Employees and Campbell Soup Retirement and Pension
Plan for Hourly-Paid Employees Not Covered By Collective
Bargaining Agreements (collectively "Pension Plan"). Such
employees who, immediately prior to the date hereof are
participating in the Pension Plan, will become fully vested
in their accrued benefits as of the Closing Date under the
Pension Plan in effect at that time ("Vested Benefit"). The
Vested Benefit payable to the employee will be determined
in accordance with the terms of such Plan, as in effect as of
the Closing. No additional benefits will be accrued on
behalf of such employees under the Pension Plan for any
period beginning on or after the Closing Date. Such
employees will receive their Vested Benefits from Seller at
the time they satisfy the age and other requirements (other
than any vesting requirements) as provided under the terms
of the Pension Plan in effect on the Closing.
(d) Other Benefit Plans. Buyer shall not assume any liability
in respect of any item which, in the absence of a sale, would
be covered by Seller's insurance policies or Seller's self-insurance
programs (including, but not limited to, group
<PAGE>
<PAGE> 22
life, workmen's compensation, accident, disability, medical,
vision, dental and similar insurance for the benefit of
employees and their eligible dependents) in existence
immediately preceding the Closing insofar as they relate to
illnesses commencing or injuries or other events occurring
through the Closing Date (irrespective of whether the
covered services are provided prior to, on, or after the
Closing Date) including, but not limited to, retirements or
other terminations of employment prior to the Closing Date
which give rise to benefits, including post-retirement
benefits under any such policy or program.
(e) No Third Party Beneficiaries. Notwithstanding anything to
the contrary herein contained, no employee or former
employee of the Business will be construed as a third party
beneficiary under or pursuant to this Agreement and this
Agreement may hereafter be amended at any time upon the
mutual written agreement of Seller and Buyer.
5.6. Related Agreements.
(a) Buyer and Seller shall negotiate in good faith to enter into
a Transition Services Agreement reasonably acceptable to
the parties (the "Transition Services Agreement") as soon as
practicable after the date hereof, which shall provide for
Seller to provide specified transition services to Buyer.
(b) Buyer and Seller's subsidiary, Vlasic Foods, Inc., shall
execute a Trademark License (the "Trademark License") at
or before Closing upon the terms set forth on Exhibit II.
5.7. Notification of Number of Employees Hired.
Buyer shall, to the extent known, notify Seller in writing at least
seven days prior to Closing (or as soon as practicable thereafter)
of the name of each current employee of the Business to whom
Buyer intends to make an offer to employ in the Business following
Closing.
6. POST-CLOSING COVENANTS
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<PAGE> 23
6.1. Promotions; Receivables.
Seller shall be entitled to collect and retain all trade accounts
receivable related to the Business and arising or accrued on or
before the Closing Date, provided that to the extent a customer
takes a deduction for any amount with respect to an Assumed
Liability, Buyer shall promptly reimburse Seller for the amount of
any such deduction. To the extent that a customer takes a
deduction from an account receivable of Buyer arising or accrued
after the Closing Date with respect to an account receivable of
Seller arising or accrued on or before the Closing Date, Seller shall
promptly reimburse Buyer for the amount of any such deduction.
Seller and Buyer shall cooperate in good faith in order to ensure
that Seller receives payment of all accounts receivable related to
the Business with respect to products shipped before the Closing
Date and that Buyer receives payment of all accounts receivable of
the Business arising or accrued after the Closing Date with respect
to products shipped after the Closing Date. If either Buyer or
Seller receives payment of any accounts receivable owned by the
other party, or Seller or Buyer becomes entitled to reimbursement
by the other party, Buyer or Seller, as appropriate, shall promptly
(within ten (10) business days) remit the proceeds to the other
party. Seller may direct all trade debtors to make payment on any
such accounts receivable outstanding as of the close of business on
the day immediately preceding the Closing to Seller's specified
address and/or account.
6.2. Further Assurances.
From time to time, at Buyer's request, whether at or after the
Closing and without further consideration, Seller shall execute and
deliver such further instruments of assignment, conveyance and
transfer and take such other actions as Buyer may reasonably
request to convey and transfer more effectively to Buyer any of the
Purchased Assets. Buyer shall, after the Closing, from time to
time, promptly execute, acknowledge and deliver any other
assurances or documents reasonably requested by Seller.
6.3. Noncompetition Covenants.
(a) For and in consideration of Buyer's purchasing the
Purchased Assets, during the period commencing on the
Closing Date and ending on the third anniversary of the
Closing Date, neither Seller nor any subsidiary of Seller
shall engage in any Competitive Activity. For purposes of
this Agreement, "Competitive Activity" shall mean
participation, without the written consent of Buyer, in the
management in the United States of any business operation
or any enterprise if such operation (a "Competitive
Operation") engages in the sale in the United States of green
<PAGE>
<PAGE> 24
and/or ripe olives amounting to five percent (5%) of the
Business' 1995 gross revenues. "Competitive Activity" shall
not include:
(i) the ownership of less than 10% of the equity
securities in any enterprise or
(ii) participation in the management of any enterprise or
any business operation thereof not owned by Seller,
other than in connection with a Competitive Opera-
tion of such enterprise.
The covenants of Seller set forth above shall not restrict
Seller, its subsidiaries or corporate affiliates from disposing
of any Inventory described on Schedule 1.3 or from
acquiring in any manner, and subsequently operating and
managing, any business, organization, company, or other
person which, directly or indirectly, manufactures, sells or
distributes any green olive or ripe olive products, so long as
the manufacture, sale, distribution and marketing of green
olive products or ripe olive products in the United States is
not a substantial part of the entity acquired.
(b) It is not the intention of the parties to this Agreement that
any provision herein shall be interpreted or enforced in
such a manner as shall constitute a violation of section
16601 of the California Business and Professions Code. It
is the intention of the parties to this Agreement that the
noncompetition covenants contained in this Section 6.3 shall
be enforced to the greatest extent (but to no greater extent)
in time, area, and degree of participation as is permitted by
the law of that jurisdiction whose law is found to be
applicable to any acts allegedly in breach of said covenants.
To this end, the parties to this Agreement agree that the
covenants herein shall be construed to extend in time and
territory and with respect to degree of participation only so
far as they may be enforced in such jurisdiction, and that
the covenants herein are to that end hereby declared
divisible and severable. It being the purpose of this
Agreement to govern competition by Seller and any
subsidiary of Seller in each state of the United States, said
noncompetition covenants shall be governed by and
construed according to that law, of all the jurisdictions in
which competition in breach of this Agreement is alleged to
have occurred or to be threatened, which best gives them
effect.
(c) Buyer and Seller agree that in the event of breach of any of
the noncompetition covenants of this Agreement, the
damage or imminent damage to the value and the goodwill
of the Business shall be inestimable and that therefore any
remedy at law or in damages shall be inadequate.
Accordingly, the parties agree that following at least 30
days prior written notice to Seller and a reasonable
opportunity to cure, Buyer shall, in addition to damages
<PAGE>
<PAGE> 25
actually incurred by reason of any such breach (subject, in
all events, to Section 12.1), be entitled to injunctive relief
against Seller or any subsidiary of Seller upon Buyer's
proof that Seller has breached the provisions of this Section
6.3.
6.4. SEC Reports.
For so long as the Payment Note is outstanding, Buyer shall
promptly deliver to Seller each SEC Report filed with or provided
by it to the SEC, which delivery shall constitute a representation
and warranty as to such SEC Report to the effect of the
representation and warranty set forth in Section 4.6.
6.5. Relocation of Pickle Packaging Facility.
Seller shall, as soon as reasonably practicable following the
Closing, but in any event by August 1, 1996, cease operating the
Pickle Packaging Assets and sever any of Seller's hourly employees
employed in such operation. As soon as practicable (but in any
event within 90 days) thereafter at its expense cause the Pickle
Packaging Assets to be removed from the Real Property. Buyer
shall, prior to the removal of the Pickle Packaging Assets, give
Seller full access to the Real Property to operate and thereafter
remove such assets and Buyer and Seller shall cooperate in
planning and accomplishing such operation and removal so as to
minimize its expense and disruption to Buyer; provided that Buyer
shall not be required to take any action which is reasonably likely
to cause labor unrest. Buyer and Seller shall negotiate in good
faith to agree upon a reasonable lease agreement as consideration
for Buyer's covenants contained in this Section 6.5.
6.6. Adjustment of Certain Agreement Payments and Ad Valorem and
Property Taxes.
(a) If, on or before the Closing Date Seller makes any payment
required by the Agreement or with respect to the Purchased
Assets or the Business, in each case for a period which
extends beyond the Closing, Buyer shall reimburse Seller by
making payments to Seller at the Closing in an amount
calculated by multiplying (x) the amounts paid by Seller
referred to above for the applicable payment period by (y)
a fraction, the numerator of which shall equal the number
of days during such period commencing on the Closing and
terminating on the last day of such period, and the
denominator of which shall be the aggregate number of
days in such period.
(b) If the charges with respect to any period before the Closing
referred to in subsection (a) above either (x) have not been
<PAGE>
<PAGE> 26
billed or, if billed, have not been paid as of the Closing or
(y) have been billed and paid on account of a period before
the Closing and a portion thereof is refunded to Buyer
following the Closing, then the obligation to make such
payment and/or such refund shall be apportioned between
the parties to this Agreement on the preceding basis when
determined. Buyer and Seller shall promptly pay, or cause
to be paid, when due, their respective portions thereof.
Each party shall promptly deliver to the other any amounts
received by it to which such other party is entitled.
(c) Seller shall pay and indemnify and hold Buyer harmless
with respect to all ad valorem and personal property and
other Taxes assessed with respect to the Business or the
Purchased Assets for all applicable periods ending before
the Closing and Buyer shall pay and indemnify and hold
Seller harmless with respect to all such Taxes assessed for
all applicable periods beginning on or subsequent to the
Closing. All such Taxes assessed for any applicable period
beginning before the Closing Date and extending through or
beyond such date shall be allocated and adjusted as follows:
Seller shall pay that portion of such Taxes due with respect
to such period through the day preceding the Closing and
Buyer shall pay the balance thereof.
6.7. Product Returns.
Subject to Section 8(2) of the License Agreement (providing for
product recalls), Seller shall, for 180 days after the Closing Date,
at its expense accept for return any products returned to it which
constitute packaged and labelled Inventory shipped by Seller prior
to the Closing Date (or, in lieu of such return, destroyed, in which
case Seller shall provide appropriate credit), because such products
are damaged or spoiled or have been marked with a "Sell By" or
similar freshness date which is prior to the date of such return (or
destruction), or if such products are returned for a reason which
has been determined to constitute a breach of Seller's
representations and warranties under this Agreement; provided
that, unless otherwise agreed by Seller, Seller shall not be obligated
to incur any expense with respect to any product returns or credits
in excess of the aggregate amount incurred by Seller with respect
to such product returns and credits during the twelve months
completed prior to the Closing Date; and further provided that in
the case of destroyed products, Seller's obligations under this
Section 6.7 shall be conditioned upon its receipt of evidence
satisfactory to it of such damage, spoilage, post-sale date or non-
compliance with Seller's representations and warranties, as
appropriate. Seller shall, at Buyer's expense, deliver any such
returned products to Buyer (or at Buyer's request, destroy or
otherwise dispose of such products). Seller shall not have any
other obligation to accept any product returns.
6.8. Post-Closing Environmental Matters.
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<PAGE> 27
Seller shall diligently complete the remediation as provided in the
Remedial Action Plan (the "Remedial Action Plan") approved by
the Tulare County Department of Health Service ("County") as
such requirements may be modified by the County from time to
time. Buyer shall not interfere with or impair any monitoring
performed by Seller or the County or any of their respective agents
relating to the Remedial Action Plan or required pursuant to this
Agreement or which may be required by the County in the future.
The obligations imposed upon Buyer in this paragraph include, but
are not limited to, providing reasonable access and entry to the
Real Property after receipt of reasonable advance notice for any
monitoring, assessment, or remediation which the County, in its
discretion, deems appropriate and requires Seller or any other
person to perform.
7. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligation of Buyer to purchase the Purchased Assets under
this Agreement is subject to the satisfaction, at or before the
Closing, of all of the following conditions.
7.1. Accuracy of Representations and Warranties; Performance by
Seller.
The representations and warranties of Seller contained in this
Agreement shall be true in all material respects, except for changes
permitted or contemplated by this Agreement, on and as of the
time of Closing with the same effect as though such representations
and warranties had been made at and as of such time (except to
the extent that they expressly relate to an earlier date). Seller shall
have performed and complied with all material covenants,
agreements and conditions required by this Agreement to be
performed or satisfied by it before or at the Closing. Seller shall
have delivered to Buyer a certificate signed by a duly authorized
officer, dated the Closing Date, certifying to the foregoing effect.
7.2. Certified Resolutions.
Buyer shall have received a certificate of the Secretary of Seller,
reasonably satisfactory to Buyer, with respect to the authorization
or consent by Seller's board of directors of the transactions
contemplated hereby.
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<PAGE> 28
7.3. Absence of Litigation.
No action or proceeding before any court or other Governmental
Entity shall have been instituted or threatened by any person
(other than Buyer) to restrain or prohibit the transactions
contemplated by this Agreement and shall not have been dismissed
or resolved.
7.4. Consents.
All statutory and regulatory consents, approvals, permits, orders
and actions required by any Governmental Entity shall have been
obtained; and the waiting period under the HSR Act shall have
expired or been terminated.
7.5. Sale of Loreto.
Simultaneously with the Closing, Seller shall have caused the sale
to Buyer of all of Seller's and any subsidiary of Seller's right, title
and interest in the shares of Loreto in accordance with the terms
of the Loreto Agreement.
7.6. Trademark License.
Seller shall have caused its subsidiary, Vlasic Foods, Inc., to enter
into the Trademark License.
7.7. Transition Services Agreement.
Seller shall have entered into the Transition Services Agreement.
7.8. Legal Opinion.
Seller shall have delivered to Buyer an opinion of counsel, dated
the Closing Date, reasonably satisfactory to Buyer.
7.9. Waiver of Conditions.
Notwithstanding the failure of any one or more of the foregoing
conditions, Buyer may proceed with the Closing without
satisfaction, in whole or in part, of any one or more of such
<PAGE>
<PAGE> 29
conditions and without written waiver. To the extent that Buyer
proceeds with the Closing, Buyer shall be deemed to have waived
for all purposes any rights or remedies it may have against Seller
by reason of the failure of any such conditions.
8. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligation of Seller to sell and transfer the Purchased Assets
under this Agreement is subject to the satisfaction, at or before the
Closing, of all the following conditions.
8.1. Accuracy of Representations and Warranties; Performance by
Buyer.
The representations and warranties of Buyer contained in this
Agreement shall be true in all material respects, except for changes
permitted or contemplated by this Agreement, on and as of the
time of Closing with the same effect as though such representations
and warranties had been made at and as of such time (except to
the extent that they expressly relate to an earlier date). Buyer
shall have performed and complied with all material covenants,
agreements and conditions required by this Agreement to be
performed or satisfied by it before or at the Closing. Buyer shall
have delivered to Seller a certificate signed by a duly authorized
officer of Buyer, dated the Closing Date, certifying to the
foregoing effect.
8.2. Certified Resolutions.
Seller shall have received a certificate of the Secretary of Buyer,
reasonably satisfactory to Seller, with respect to the authorization
or consent by Buyer's board of directors of the transactions
contemplated hereby.
8.3. Absence of Litigation.
No action or proceeding before any court or other Governmental
Entity shall have been instituted or threatened by any person
(other than Seller) to restrain or prohibit the transactions
contemplated by this Agreement and shall not have been dismissed
or resolved.
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<PAGE> 30
8.4. Consents.
All statutory and regulatory consents, approvals, permits, orders
and actions required by any Governmental Entity shall have been
obtained; and the waiting period under the HSR Act shall have
expired or been terminated.
8.5. Purchase of Loreto.
Simultaneously with the Closing, Buyer shall have purchased the
shares of Loreto in accordance with the terms of the Loreto
Agreement.
8.6. Transition Services Agreement.
Buyer shall have entered into the Transition Services Agreement.
8.7. Legal Opinion.
Buyer shall have delivered to Seller an opinion of counsel, dated
the Closing Date, reasonably satisfactory to Seller.
8.8. Waiver of Conditions.
Notwithstanding the failure of any one or more of the foregoing
conditions, Seller may proceed with the Closing without
satisfaction, in whole or in part, of any one or more of such
conditions and without written waiver. To the extent that Seller
proceeds with the Closing, Seller shall be deemed to have waived
for all purposes any rights or remedies it may have against Buyer
by reason of the failure of any such conditions or the breach of any
such representations.
9. THE CLOSING
9.1. The Closing.
The consummation of the sale of the Purchased Assets shall take
place on the Closing Date at the offices of Drinker Biddle & Reath,
Philadelphia National Bank Building, 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107-3496, commencing at 10:00 a.m.,
local time, and shall be effective at the same time as the Closing
<PAGE>
<PAGE> 31
under the Loreto Agreement. Subject to Section 10, failure to
consummate the Closing shall not result in the termination of this
Agreement or relieve any person of any obligation hereunder.
9.2. Items to be Delivered at Closing by Seller.
At the Closing, Seller shall deliver to Buyer:
(a) A bill of sale and assignment agreement, in a form
reasonably satisfactory to the parties, transferring the
Purchased Assets to Buyer (the "Bill of Sale");
(b) the deeds to the Real Property;
(c) the legal opinion, other agreements and instruments
referred to herein to be delivered by Seller at or before the
Closing;
(d) the certificates referred to in Sections 7.1 and 7.2 hereof;
and
(e) such other instruments of transfer and conveyance as Buyer
shall reasonably deem necessary or desirable to effectively
vest in Buyer good and marketable title to the Purchased
Assets.
9.3. Items to be Delivered at Closing by Buyer.
At the Closing, Buyer shall deliver to Seller:
(a) Immediately available federal funds in the amount of the
Closing Payment;
(b) an assumption agreement, in a form reasonably satisfactory
to the parties, providing for Buyer to assume the Assumed
Liabilities (the "Assumption Agreement");
(c) the Payment Note;
(d) the legal opinion, other agreements and instruments
referred to herein to be delivered by Buyer before or at
Closing;
(e) the certificates referred to in Section 8.1 and 8.2 hereof;
and
(f) such other instruments, agreements and certificates as
Seller may reasonably request.
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<PAGE> 32
10. TERMINATION
10.1. Termination.
This Agreement may be terminated before the Closing Date:
(a) by mutual consent of Buyer and Seller; or
(b) by either party if the transactions contemplated hereby are
not consummated on or before July 26, 1996 and if as of
such date the Closing shall not have occurred by reason of
the failure to satisfy the conditions to Closing as set forth in
Sections 7 and 8 herein; provided, however, that the right
to terminate this Agreement shall not be available to any
party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure
of the Closing to occur on or before such date; or
(c) automatically without any action by any party if the Loreto
Agreement is terminated for any reason.
10.2. Effect of Termination.
If this Agreement is terminated pursuant to Section 10.1, all rights
of all parties to this Agreement shall terminate (other than the
confidentiality provisions of Section 5.1(a), which shall survive
indefinitely and except for liability of a party if the Closing does
not occur and this Agreement terminates by reason of a default or
breach by such party to this Agreement).
11. INDEMNITY
11.1. Indemnity by Seller.
(a) Seller shall indemnify and hold Buyer harmless from and
against any Indemnifiable Losses which are actually
suffered by Buyer arising out of or as a result of (i) any of
the Liabilities not assumed by Buyer or (ii) any
misrepresentation or breach of any representation,
warranty or covenant of Seller contained in the Agreement
or any Related Agreement; provided that Seller shall not be
required to indemnify and hold harmless Buyer with respect
to any Indemnifiable Losses unless, until and then only to
the extent that the aggregate amount of all Indemnifiable
Losses incurred by Buyer exceeds: (x) $350,000 in the
<PAGE>
<PAGE> 33
aggregate in the case of all Indemnifiable Losses arising out
of or resulting from a misrepresentation or breach of
Section 3.6, the first sentence only of Section 3.7, Section
3.8, the first sentence only of Section 3.13, or Section 3.14
or which is claimed pursuant to Section 11.1(b); or (y) in all
other circumstances, $1,000,000 in the aggregate
(collectively, the "Threshold"), whereupon Buyer may claim
indemnification only for the amount such of Indemnifiable
Losses which exceed the applicable Threshold.
Notwithstanding anything to the contrary contained herein,
the aggregate amount required to be paid by Seller
pursuant to this Section shall not exceed $10,000,000.
Notwithstanding anything to the contrary contained herein,
neither the Threshold nor the limitation set forth in this
Section 11.1(a) shall apply to any breach or noncompliance
with Section 1.5 hereof.
(b) Seller shall indemnify and hold Buyer harmless from and
against any and all claims by any third party not affiliated
with or related to Buyer for Indemnifiable Losses
(including, without limitation any claims for contribution)
which, when aggregated with Indemnifiable Losses subject
to indemnification by Seller pursuant to Section 11.1(a),
exceed the applicable Threshold, and hereby waives any
claims for contribution against Buyer for any costs,
damages, expenses or liabilities to the extent they arise
from:
(i) any generation, transportation, use, storage,
emission, discharge, release, disposal or presence of
any Hazardous Substance in, from or on any of the
Real Property occurring after the acquisition of such
Real Property by Seller and prior to the Closing Date;
(ii) the violation of any Environmental Law at any of
the Real Property occurring after the acquisition of
such Real Property by Seller and prior to the
Closing Date;
(iii) any governmental action (including, but not limited
to action to require remediation or to enforce
cleanup standards) relating to or arising out of the
generation, transportation, use, storage, emission,
discharge, release, disposal or presence of any
Hazardous Substance in, from or on any of the Real
Property occurring after the acquisition of such Real
Property by Seller and before the Closing Date.
Seller shall pay all costs and expenses reasonably incurred
by Buyer to enforce the provisions of this indemnification,
including fees and expenses incurred pursuant to 11 U.S.C.
This indemnification shall remain in force for a period of 24
months after the Closing Date. Buyer shall not initiate or
attempt to initiate any governmental action with respect to
any Environmental Law, provided that any action resulting
from a good faith attempt to verify remediation performed
<PAGE>
<PAGE> 34
by Seller and any reporting of Hazardous Substance to any
governmental agency required by law shall not be deemed
initiation nor attempted initiation of any governmental
action with the meaning of this sentence. Buyer shall advise
Seller of the results of any such attempted verification and
give Seller at least 30 days' prior written notification of any
such report that Buyer believes to be required by law and
the opportunity to investigate and, if appropriate, take such
action as may be appropriate to remediate and/or obviate
the necessity of such request. Buyer shall cooperate with
Seller's reasonable requests in accomplishing any such action.
11.2. Indemnification by Buyer.
Buyer shall indemnify and hold Seller harmless from and against
any Indemnifiable Losses which are actually suffered by Seller
arising out of or as a result of (i) any of the Assumed Liabilities or
the operation of the Business from and after the Closing, or (ii)
any misrepresentation or breach of any representation, warranty
or covenant contained in this Agreement or any Related Agreement.
11.3. Indemnification Procedures.
(a) No party shall be deemed to have breached any
representation, warranty, or covenant if:
(i) such party shall have notified the other party in
writing, on or before the Closing Date, of the breach
of, or inaccuracy in, or of any facts or circumstances
constituting or resulting in the breach of, or
inaccuracy in, such representation, warranty or
covenant or such other party hereto otherwise had
actual knowledge on or prior to the Closing Date of
such misrepresentation or breach of warranty or
covenant, and
(ii) such other party shall have permitted the Closing to
occur, and for all purposes of this Agreement, such
party is thereby deemed to have waived such breach
or inaccuracy for all purposes.
(b) If any claim is made, or any suit or action is commenced,
against Buyer in respect of which indemnification under
Section 11.1(a) or (b) may be sought by it hereunder, or
Seller in respect of which indemnification under Section
11.2 may be sought hereunder, the Indemnitee shall
promptly give the Indemnifying Party notice thereof and
the Indemnified Party shall be entitled to participate in or,
if the Indemnitee does not desire to defend, to conduct the
defense thereof at the Indemnifying Party's expense. The
Indemnifying Party may (but need not) defend or
<PAGE>
<PAGE> 35
participate in the defense of any such claim, suit or action,
but the Indemnifying Party shall promptly notify the
Indemnitee if the Indemnifying Party shall not desire to
defend or participate in the defense of any such claim, suit
or action as aforesaid. The Indemnitee may at any time
notify the Indemnifying Party of its intention to settle or
compromise any claim, suit or action against the Indemnitee
in respect of which payments may be sought by the
Indemnitee hereunder, and the Indemnitee may settle or
compromise any such claim, suit or action unless the
Indemnifying Party notifies the Indemnitee in writing
(within ten (10) days after the Indemnitee has given written
notice of its intention to settle or compromise) that the
Indemnifying Party intends to conduct or to continue to
conduct the defense of such claim, suit or action. Unless
the Indemnifying Party gives the notice referred to in the
foregoing sentence with respect to settlements or com-
promises, any such settlement or compromise of, or (not-
withstanding any notice from the Indemnifying Party
referred to in the foregoing sentence) any final judgement
or decree entered on or in, any claim, suit or action which
the Indemnitee has defended or participated in the defense
of in accordance herewith, shall be deemed to have been
consented to by, and shall be binding upon, the
Indemnifying Party as fully as if the Indemnifying Party
had assumed the defense thereof and a final judgement or
decree had been entered in such suit or action, or with
regard to such claim, by a court of competent jurisdiction
for the amount of such settlement, compromise, judgement
or decree. If the Indemnifying Party conducts or continues
the conduct of the defense of any claim, suit or action as
aforesaid, it shall do so at its own cost and expense, holding
the Indemnitee harmless from all costs, fees, expenses,
debts, liabilities and charges in connection with such
defense; shall defend against any such claim, and shall hold
the Indemnitee's business and assets free and harmless from
any attachment, execution, judgement, lien or other legal
process. The Indemnifying Party shall promptly reimburse
the Indemnitee for any and all reasonable costs and expenses
incurred by the Indemnitee in connection with any contest or
challenge by the Indemnifying Party of any claim, including,
not limited to, the cost of the Indemnitee of reasonable
attorney's fees, in connection with such contest or challenge.
(c) If an Indemnitee is entitled to be indemnified hereunder,
the Indemnifying Party shall be given written notice thereof
promptly by the Indemnitee, which notice shall specify the
amount and nature of the amounts to be indemnified,
setting forth in reasonable detail the basis therefor and shall
include the request of the Indemnitee for indemnification of
such amount. The Indemnifying Party shall within twenty
(20) days pay to the Indemnitee the amount so specified, or
deliver to the Indemnitee written notice setting forth in
reasonable detail why Indemnifying Party is not obligated
to pay such amount, in which event the parties shall use
good faith efforts to resolve any disputed matters.
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<PAGE> 36
(d) Each party to this Agreement shall take all steps necessary
to assure that any successor to substantially all of the assets
of the party shall assume all of such parties' obligations to
any Indemnitee under this Agreement.
(e) Unless otherwise agreed by Seller in writing, amounts
payable under the Payment Note shall not be subject to set-off,
reduction, holdback or deferral on account of any claim for
indemnification hereunder.
11.4. Survival of Representations and Warranties.
All representations, warranties, covenants, and agreements of the
parties contained in this Agreement, or in any instrument, certifi-
cate, opinion, or other writing provided for in it, shall survive the
Closing for a period of 24 months after the Closing Date. Except
as otherwise provided herein, no claim shall be made for the
breach of any representation or warranty under this Agreement
after the date on which such representations and warranties
terminate as set forth in this Section 11.4. The indemnification
provided hereunder with respect to breaches of representations and
warranties shall be limited to claims asserted and claim notices
delivered within 24 months from the Closing Date, and the
indemnification provided hereunder with respect to violations and
breaches of covenants shall be limited to claims asserted and claims
notices delivered within 24 months from the date of such breach or
violation; provided that a claim that Seller has breached its
representations and warranties set forth in Section 3.6 may be made
at any time before the expiration of the statute of limitations that
would be applicable to an action brought by the appropriate taxing
authority with respect to the matters forming the basis for such claim.
12. MISCELLANEOUS
12.1. Recovery of Litigation Costs; Damages.
If any dispute resolution or legal action is brought for the
enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to
any other relief to which it or they may be entitled. Under no
circumstances shall either party hereto be liable for any punitive
damages for any misrepresentation or breach of any provision of,
or any other matter arising pursuant to, this Agreement or any
Related Agreement. In addition, under no circumstances shall
Indemnifiable Losses include any losses, claims, liabilities,
damages, obligations, costs or expenses to the extent they:
<PAGE>
<PAGE> 37
(a) affect or relate to any business or operation of Buyer (or
any successors or permitted assignees or other Indemnified
Parties affiliated with Buyer), including without limitation
the financial condition, prospects or operations thereof,
other than the Business; or
(b) are not or would not be reflected on an income statement or
balance sheet of Seller prepared in accordance with
generally accepted accounting principles, consistently
applied.
12.2. Entire Agreement; Modification; Waiver.
This Agreement, together with the Loreto Agreement and the
Related Agreements, constitutes the entire agreement between the
parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, rep-
resentations, and undertakings of the parties. No supplement,
modification, or amendment of this Agreement shall be binding
unless executed in writing by all the parties. No waiver of any of
the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by any party making
the waiver.
12.3. Counterparts.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12.4. Assignment.
This Agreement shall be binding on, and shall inure to the benefit
of, the parties to it and their respective heirs, legal representatives,
successors, and assigns but this Agreement shall not be assignable
without the prior written consent of the other party, except that
Buyer may assign its rights and obligations under this Agreement
to an affiliate of Buyer, provided that such obligations are
guaranteed by Buyer by an instrument satisfactory in form and
substance to Seller.
<PAGE>
<PAGE> 38
12.5. Fees and Expenses.
Each of Seller and Buyer shall pay all fees, costs, and expenses
(including without limitation legal and accounting expenses)
incurred or to be incurred by it in negotiating and preparing this
Agreement and in closing and carrying out the transactions
contemplated by this Agreement; provided, that Seller and Buyer
shall equally divide all documentary, transfer, and sales Taxes that
arise out of or in connection with the transactions contemplated by
this Agreement.
12.6. Notices.
All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service if served personally on the
party to whom notice is to be given or by telecopier (with receipt
confirmed), or on the third day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
Buyer: American Rice, Inc.
16825 Northchase Drive
Houston, Texas 77060
Telecopier No. (713) 872-5243
Attention: Mr. Douglas A. Murphy
President and Chief Executive Officer
With a Copy to: Vial, Hamilton, Koch & Knox, LLP
1717 Main Street, Suite 4400
Dallas, Texas 75201
(214) 712-4402
Attention: George Fazakerly, Esquire
Seller: Campbell Soup Company
Campbell Place
Camden, New Jersey 08103-1799
Telecopier No. (609) 342-3936
Attention: Corporate Secretary
<PAGE>
<PAGE> 39
With a copy to: Campbell Soup Company
Campbell Place
Camden, New Jersey 08103-1799
Telecopier No. (609) 342-3936
Attention: Linda A. Lipscomb, Esquire
Deputy General Counsel
<PAGE>
<PAGE> 40
Any party may change its address for purposes of this Section by giving
the other parties written notices of the new address in the manner set
forth above.
12.7. Governing Law.
This Agreement shall, subject to Section 6.3(b), be construed in
accordance with, and governed by, the laws of the State of New
Jersey.
12.8. Effect of Headings.
The subject headings of this Agreement are included for purposes
of convenience only, and shall not affect the construction or
interpretation of any of its provisions.
IN WITNESS WHEREOF, the parties to this Agreement have duly
executed it on the day and year first above written.
CAMPBELL SOUP COMPANY
By: /s/ Anthony P. DiSilvestro
---------------------------
Deputy Treasurer
AMERICAN RICE, INC.
By: /s/ Kenneth C. McCorkle
-------------------------
Senior Vice President
<PAGE>
<PAGE> 41
APPENDIX A
DEFINED TERMS
As used in this Agreement, the terms below shall have the following
meanings:
(a) "Agreement" means this asset purchase and sale agreement
and all attached exhibits and schedules, including the
Disclosure Schedule.
(b) "ARI Indenture" means that certain indenture dated as of
August 24, 1995 pursuant to which Buyer has publicly
issued its mortgage notes.
(c) "Assumed Liabilities" is defined in Section 1.4.
(d) "Assumption Agreement" is defined in Section 9.3(b).
(e) "Bill of Sale" is defined in Section 9.2(a).
(f) "Business" means the Ripe Olive Business and the Green
Olive Business, excluding any part thereof operated or
conducted by Loreto.
(g) "Buyer" is defined in the Preamble.
(h) "Campbell Savings Plan" is defined in Section 5.6(b).
(i) "Closing Date" refers to the date upon which the parties
agree to consummate the purchase of the Purchased Assets,
as contemplated in the Agreement. The Closing Date shall
be the same date as the Closing under the Loreto
Agreement.
(j) "Closing Payment" is defined in Section 2.2(b).
(k) "Closing Statement" is defined in Section 2.2(c).
(l) "Competitive Activity" is defined in Section 6.3(a).
(m) "Competitive Operation" is defined in Section 6.3(a).
(n) "Contracts" means (i) the contracts, agreements, orders and
instruments relating to the sale of any assets, services,
properties, materials or products, including customer
contracts, distribution contracts and broker contracts, in
each case to the extent exclusively relating to the Business;
(ii) orders, Grower Contracts, supply agreements and other
agreements relating to the purchase of any assets, services,
properties, materials or products, in each case to the extent
<PAGE>
<PAGE> 42
exclusively relating to the Business; and (iii) all other
contracts, leases, agreements and instruments relating
exclusively to the Business other than any employment
contracts or union agreements.
(o) "County" is defined in Section 6.8(a).
(p) "Coupons" is defined in Section 1.4(f).
(q) "Disclosure Schedule" is defined in Section 3.
(r) "Environmental Law" means all applicable present statutes,
regulations, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, concessions,
franchises, and similar items, of all governmental agencies,
authorities, departments, commissions, boards, bureaus, or
instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial,
administrative and regulatory decrees, judgments, and
orders including, without limitation, all requirements,
including, but not limited to, those pertaining to reporting,
licensing, permitting, investigation, or remediation of
emissions, discharges, releases or threatened releases of
Hazardous Substances, whether solid, liquid, or gaseous in
nature, into the air, surface water, groundwater, or land,
or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
Hazardous Substances, whether solid, liquid, or gaseous in
nature.
(s) "Excluded Assets" is defined in Section 1.3.
(t) "Financing" is defined in Section 4.8.
(u) "Financing Commitments" is defined in Section 4.8.
(v) "Fixed Assets" is defined in Section 1.1(b).
(w) "Green Olive Business" means the business conducted by
Seller in the United States of purchasing, distributing and
marketing green olive products.
(x) "Governmental Entity" means any federal, state, local or
foreign governmental or regulatory authority (or any
department, agency, authority or political subdivision
thereof).
(y) "Grower Advances" means amounts, including interest
accrued thereon, advanced to olive growers with whom
Seller has agreements for the purchase of olives which are
included in the Contracts.
<PAGE>
<PAGE> 43
(z) "Grower Contracts" means all Contracts entered into by
Seller to purchase olives.
(aa) "Grower Payables" means all payment obligations pursuant
to the Grower Contracts (including without limitation all
bonuses payable thereunder) due following the Closing
Date, to the extent reflected on Seller's books and records.
(ab) "Hazardous Substance" has the meaning given to it under
Section 101(14) of the Comprehensive Environmental
Recovery Compensation and Liability Act, as amended, 42
U.S.C. 9601(14).
(ac) "HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
(ad) "Indemnifiable Loss" means any liabilities, obligations,
losses, damages, costs, charges or other expenses of every
kind and character, including but not limited to reasonable
attorneys' fees and litigation costs and costs of
investigation, but in all events excluding any punitive
damages.
(ae) "Indemnifying Party" means any person or entity required
to provide indemnification under this Agreement.
(af) "Indemnitee" means any person or entity entitled to
indemnification under this Agreement.
(ag) "Inventory" means all finished goods and work-in-progress
of the Business, all raw materials and supplies held for the
manufacture of products of the Business, all packaging,
labels, supply and wrapping materials used in the Business,
and any warehouse receipts or any other similar documents
relating to any of the foregoing, in each case, owned or
possessed by Seller and existing on the Closing Date;
provided that packaging and labels shall be included in
Inventory only to the extent provided by Schedule
2.1(c)(iv).
(ah) "Liabilities" means any direct or indirect liability,
indebtedness, obligation, commitment, expense, claim,
deficiency, guaranty or endorsement of or by any person or
entity of any type, whether accrued, absolute, contingent,
matured, unmatured or other.
(ai) "Loreto" means Compania Envasadora Loreto, S.A., a
Spanish corporation engaged in the purchasing, processing,
packaging, distribution and marketing of green olives and
other food products.
<PAGE>
<PAGE> 44
(aj) "Loreto Agreement" means the Share Sale Agreement,
dated the date hereof, between Buyer and Seller related to
the sale and purchase of the outstanding shares of capital
stock of Loreto.
(ak) "Material Adverse Effect" means any material adverse
effect on the financial condition, properties, operations or
results of operations of the Business taken as a whole, not
resulting from the entering into of this Agreement or arising
out of any action by Buyer or its representatives.
(al) "Other Promotions" is defined in Section 1.4(f).
(am) "Payment Note" is defined in Section 2.2(c).
(an) "Pension Plan" is defined in Section 5.6(c).
(ao) "Permits" means all governmental licenses, permits and
approvals issued to Seller with respect to the Business.
(ap) "Pickle Packaging Assets" is defined in Section 1.3(b).
(aq) "Purchase Price" is defined in Section 2.1.
(ar) "Purchased Assets" is defined in Section 1.1.
(as) "Real Property" is defined in Section 1.1(a).
(at) "Related Agreements" means the Trademark License,
Payment Note, the Assumption Agreement, the Bill of Sale
and the Transition Services Agreement.
(au) "Remedial Action Plan" is defined in Section 6.8(a).
(av) "Retained Liabilities" is defined in Section 1.5.
(aw) "Ripe Olive Business" means the business conducted by
Seller in the United States and Mexico of purchasing,
processing, packaging, distributing and marketing of ripe
olive products and, to a limited extent, cherries, onions and
capers.
(ax) "Sadrym" means Sadrym California, Inc.
(ay) "Sadrym Shareholder Agreement" is defined in Section 3.5.
<PAGE>
<PAGE> 45
(az) "Sadrym Shares" means the shares of the capital stock of
Sadrym California, Inc. owned by Seller.
(ba) "SEC Reports" means all registration statements, reports,
proxy statements and other materials filed with the SEC.
(bb) "Secondary Trademarks" includes, but is not limited to,
those Secondary Trademarks listed on Schedule 1.1(e).
(bc) "Seller" means Campbell Soup Company, a New Jersey
Corporation, provided that with respect to certain assets
and liabilities of the Business, and certain representations,
warranties and covenants related thereto, "Seller" shall also
mean one or more wholly-owned subsidiaries of Campbell
Soup Company.
(bd) "Tax" or "Taxes" means any federal, state, local or foreign
income, gross receipts, license, payroll, employment, excise,
stamp, occupation, premium, capital stock, franchise, net
worth, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto.
(be) "Threshold" is defined in Section 11.1(a).
(bf) "Trademarks" is defined in Section 1.1(e).
(bg) "Trade Promotions" is defined in Section 1.4(e).
(bh) "Trademark License" is defined in Section 5.7(b).
(bi) "Transition Services Agreement" is defined in Section
5.7(a).
(bj) "Vested Benefit" is defined in Section 5.6(c).
Other Terms
Other terms may be defined elsewhere in the text of this Agreement
and shall have the meaning indicated throughout this Agreement.
Other Definitional Provisions
The words "hereof", "herein", and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.
<PAGE>
<PAGE> 46
The terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
<PAGE>
EXHIBIT 2.2
-----------
SHARE SALE AGREEMENT
Between
AMERICAN RICE, INC., as Buyer
and
CAMPBELL SOUP COMPANY, as Seller
Dated as of June 11, 1996
<PAGE>
Page
----
Article 1. PURCHASE AND SALE OF SHARES . . . . . . 1
Section 1.1. Purchase and Sale of Shares . 1
Article 2. PURCHASE PRICE . . . . . . . . . . . . 2
Section 2.1. Credit. . . . . . . . . . . . 2
Section 2.2. Purchase Price. . . . . . . . 2
Article 3. REPRESENTATIONS AND WARRANTIES OF THE
SELLER. . . . . . . . . . . . . . . . . 3
Section 3.1. Organization; Power . . . . . 4
Section 3.2. Authorized Capital. . . . . . 4
Section 3.3. Financial Statements. . . . . 4
Section 3.4. Properties. . . . . . . . . . 4
Section 3.5. Tax Matters . . . . . . . . . 5
Section 3.6. Conduct of Green Olive
Business . . . . . . . . . 5
Section 3.7. Conflicts of Interest . . . . 5
Section 3.8. List of Contracts . . . . . . 5
Section 3.9. Litigation. . . . . . . . . . 6
Section 3.10. Trademarks and Intellectual
Property. . . . . . . . . . 6
Section 3.11. Permits and Authorizations. . 6
Section 3.12. Compliance with Applicable
Law . . . . . . . . . . . . 7
Section 3.13. Effect of Agreement . . . . . 7
Section 3.14. Spanish Government Approvals. 7
Section 3.15. No Known Claims . . . . . . . 7
Section 3.16. No Projections. . . . . . . . 7
Section 3.17. Brokers . . . . . . . . . . . 7
Article 4. REPRESENTATIONS AND WARRANTIES OF THE
BUYER . . . . . . . . . . . . . . . . . 7
Section 4.1. Legal Status. . . . . . . . . 8
Section 4.2. Authority to Execute. . . . . 8
Section 4.3. Binding Agreement . . . . . . 8
Section 4.4. Authority . . . . . . . . . . 8
Section 4.5. Compliance with Other
Instruments . . . . . . . . 8
Section 4.6. Brokers . . . . . . . . . . . 8
Article 5. PRE-CLOSING COVENANTS . . . . . . . . . 8
Section 5.1. The Seller's Covenants. . . . 8
Section 5.2. Publicity . . . . . . . . . . 10
Section 5.3. Cooperation and Best Efforts. 11
Article 6. POST-CLOSING COVENANTS . . . . . . . . 11
Section 6.1. Employment. . . . . . . . . . 11
Section 6.2. Additional Title Instruments. 11
<PAGE>
Section 6.3. Books and Records . . . . . . 11
Section 6.4. Loreto Credit Lines . . . . . 11
Section 6.5 Labels, etc . . . . . . . . . 12
Article 7. CONDITIONS PRECEDENT TO THE BUYER'S
PERFORMANCE . . . . . . . . . . . . . . 12
Section 7.1. Accuracy of Representations
and Warranties; Performance
by the Seller . . . . . . . 12
Section 7.2. Certified Resolutions . . . . 12
Section 7.3. Absence of Litigation . . . . 12
Section 7.4. Approval of Proceedings
and Documentation . . . . . 12
Section 7.5 Purchase of Green
Olive Business . . . . . . 13
Section 7.6 Trademark Agreement . . . . . 13
Section 7.8 Waiver of Conditions. . . . . 13
Article 8. CONDITIONS PRECEDENT TO THE SELLER'S
PERFORMANCE . . . . . . . . . . . . . . 13
Section 8.1 Accuracy of Representations
and Warranties; Performance
by the Buyer . . . . . . . 13
Section 8.2 Certified Resolutions . . . . 13
Section 8.3 Absence of Litigation . . . . 13
Section 8.4 Approval of Proceedings
and Documentation . . . . . 14
Section 8.5 Purchase of the Green Olive
Business . . . . . . . . . 14
Section 8.6 Transition Services
Agreement . . . . . . . . . 14
Section 8.7 Waiver of Conditions. . . . . 14
Article 9. THE CLOSING . . . . . . . . . . . . . . 14
Section 9.1 The Closing . . . . . . . . . 14
Section 9.2 Items to be Delivered at
Closing by the Seller . . . 14
Section 9.3 Items to be Delivered at
Closing by the Buyer. . . . 15
Article 10. TERMINATION . . . . . . . . . . . . . 15
Section 10.1 Termination . . . . . . . . . 15
Section 10.2 Effect of Termination . . . . 15
Article 11. INDEMNITY . . . . . . . . . . . . . . 16
Section 11.1 Indemnity by the Seller . . . 16
Section 11.2 Indemnification by the Buyer. 17
Section 11.3 Indemnification Procedures. . 17
Section 11.4 Special Tax Provisions. . . . 18
Section 11.5 Disclaimer of Warranties. . . 20
Article 12. MISCELLANEOUS . . . . . . . . . . . . 20
Section 12.1 Recovery of Litigation Costs. 20
Section 12.2 Entire Agreement;
Modification; Waiver. . . . 20
<PAGE>
Section 12.3 Counterparts. . . . . . . . . 20
Section 12.4 Assignment. . . . . . . . . . 21
Section 12.5 Fees and Expenses . . . . . . 21
Section 12.6 Survival of Representations
and Warranties. . . . . . . 21
Section 12.7 Notices . . . . . . . . . . . 21
Section 12.8 Governing Law . . . . . . . . 22
Section 12.9 Further Action. . . . . . . . 22
Section 12.10 Effect of Headings. . . . . . 23
<PAGE>
List of Schedules
-----------------
Schedule
--------
3.4 Properties
3.5 Tax Matters
3.6 Conduct of Green Olive Business
3.8 List of Contracts
3.9 Litigation
3.10 Trademarks and Intellectual Property
3.12 Compliance with Applicable Law
5.1 Insurance Coverage in Spain
8.4 Consents
List of Exhibits
----------------
Exhibit
-------
I Balance Sheet of Loreto
<PAGE>
<PAGE> 1
SHARE SALE AGREEMENT
This Share Sale Agreement ("Agreement") is made and entered into
this 11th day of June, 1996 by and between AMERICAN RICE, INC., a
California corporation, whose address is 16825 Northchase Drive, Houston,
Texas 77060 (hereinafter referred to as "Buyer"), and CAMPBELL SOUP
COMPANY, a New Jersey corporation, whose address is Campbell Place,
Camden, New Jersey, 08103-1799 (hereinafter referred to as "Seller"). This
agreement is being executed simultaneously with the Asset Purchase and Sale
Agreement dated of even date herewith between the Buyer and the Seller (the
"Domestic Olive Agreement").
WHEREAS, the Seller currently engages in the green olive business
which consists of the purchasing, storage, processing, packaging, distribution
and marketing of green olives (the "Green Olive Business") and, in
conjunction therewith, the Seller directly or indirectly owns one hundred
percent (100%) of the issued shares of common stock in Compania
Envasadora Loreto, S.A. ("Loreto"), Crt. Sevilla, Huelva KM14,
Espartinas, Sevilla, Spain, a company engaged in the Green Olive Business;
and
WHEREAS, in accordance with the provisions of this Agreement,
the Seller desires to sell and the Buyer desires to purchase the Shares (as
hereinafter defined); and
WHEREAS, as part of the consideration for the sale and purchase of
Shares, the Seller and the Buyer desire to enter into the Domestic Olive
Agreement relating to the sale and purchase of the Seller's green and ripe
olive businesses located in the United States.
NOW THEREFORE, in consideration of the above premises and the
mutual covenants, agreements, representations and warranties herein
contained, and for other valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the Seller and the Buyer do hereby agree
as follows:
Article 1.
PURCHASE AND SALE OF SHARES
Section 1.1. Purchase and Sale of Shares. Pursuant and subject to
the terms and provisions of this Agreement, on the Closing Date (as
hereinafter defined), the Seller agrees to sell to the Buyer and the Buyer
agrees to purchase from the Seller, free and clear of any and all liens and
encumbrances, 1,026,000 shares of the Loreto common stock, par value
1,000 ptas. per share, representing one hundred percent (100%) of the issued
and outstanding shares of common stock of Loreto (the "Shares"), together
with all rights attaching or accruing thereto and all dividends and
distributions declared, made or paid from and after the Closing Date (as
defined in Section 9.1) thereon or in respect thereof. The Buyer shall not be
<PAGE>
<PAGE> 2
obligated to complete the purchase of any of the Shares unless the sale to the
Buyer of all of the Shares is completed simultaneously, and if such sale is not
completed on the Closing Date, then the Buyer shall be entitled to terminate
this Agreement without liability of any kind.
Article 2.
PURCHASE PRICE
Section 2.1. Credit. The Buyer has previously paid U.S.$700,000
to the Seller pursuant to the Share Sale Agreement, dated January 6, 1995,
between Erly Industries, Inc. and the Seller, as amended, which the Seller
is willing to credit against the purchase price payable hereunder for the
Shares (the "Credit").
Section 2.2. Purchase Price.
(a) The price paid to the Seller by the Buyer for the
purchase of the Shares (the "Price") shall be an amount equal to the Equity
(as defined in Section 2.2(c)) of Loreto shown by the accounting records of
Loreto as of the Closing Date as reflected on the Closing Date Balance Sheet
(as defined below), with Spanish pesetas converted to United States Dollars
at the rate of exchange published in The Wall Street Journal on the Closing
Date, reduced by U.S. $3.0 million. No portion of the Price shall be
allocated to the Trademark License Agreement referred to in Section 7.6.
(b) At least two (2) business days prior to the Closing
Date, the Seller will prepare and deliver to the Buyer, at the Seller's
expense, a good faith estimate of the Price, which estimate will be based on
the unaudited balance sheet of Loreto, in the format set forth in Exhibit I
hereto, for Loreto's most recently completed fiscal period prior to the
Closing Date (with the Seller's estimated changes through the Closing Date)
with Spanish pesetas converted to U.S. Dollars at the rate of exchange pub-
lished in The Wall Street Journal on the third business day prior to closing.
The estimated Price, less the amount of the Credit, shall be paid in cash by
the Buyer to the Seller on the Closing Date by wire transfer.
(c) Within thirty (30) days after the Closing Date, the
Buyer shall prepare and deliver to the Seller a consolidated balance sheet of
Loreto as of the close of business on the business day immediately preceding
the Closing Date (the "Closing Date Balance Sheet") setting forth the Equity
of Loreto (as defined below), and prepared in accordance with the accounting
methods and principles used to prepare the financial statements of Loreto
referred to in Section 3.3, consistently applied. The Closing Date Balance
Sheet shall be based upon a physical inventory of Loreto's inventories taken
by the Buyer within one week prior to the Closing (and adjusted as
appropriate for sales and other transactions prior to Closing), which
representatives of the Seller shall have the right to observe. In preparing
the Closing Date Balance Sheet, no value shall be assigned to any labels,
cases, caps, signage, packing, marketing or other materials which pursuant to
Section 6.5 hereof may not be used by the Buyer or any affiliate following
<PAGE>
<PAGE> 3
the Closing. In addition, the Closing Balance Sheet shall not include any
accrual or other reserve for severance or related liability, and the Company
shall not record any expense with respect to, any of the "ECF Employees"
referred to in the Seller's Disclosure Letter (the "Disclosure Letter")
delivered to the Buyer prior to the execution and delivery of this Agreement.
The Seller shall have the right to review all of the Buyer's work papers and
all relevant records of Loreto and of the Buyer's and Loreto's accountants
relating to the Closing Date Balance Sheet. For purposes of the Closing
Date Balance Sheet, Equity shall be the amount shown on the Closing Date
Balance Sheet as equal to Loreto's total assets less total liabilities.
(d) The Closing Date Balance Sheet delivered by the Buyer
to the Seller shall be deemed to be and shall be final, binding and conclusive
on the parties hereto, unless the Seller disputes the Closing Date Balance
Sheet in accordance with this Section. The Seller may dispute any amounts
reflected on the Closing Date Balance Sheet (any such disputed amounts, the
"Disputed Matters"); provided, however, that the Seller shall be entitled to
dispute any such matter only if the Seller shall notify the Buyer in writing in
reasonable detail of each Disputed Matter, within 30 days of the Seller's
receipt of the Closing Date Balance Sheet. Any Disputed Matters shall be
subject to good faith negotiations between the parties for up to 15 days prior
to being referred to a third party for dispute resolution. Any Disputed
Matters not resolved by such good faith negotiations, may be referred by
either party to, and shall be decided by, an independent accounting firm
acceptable to both the Seller and the Buyer (the "Independent Accounting
Firm"). The costs and expenses of the Independent Accounting Firm shall
be shared equally by the Seller and the Buyer. The Independent Accounting
Firm so chosen shall consider only the Disputed Matters and shall render a
final decision on the Disputed Matters by delivering a written report to the
Buyer and the Seller no later than thirty (30) days after having received the
assignment with respect thereto. The decision of the Independent Accounting
Firm with respect to all Disputed Matters shall be based solely on whether
the Closing Date Balance Sheet was prepared in accordance with the
requirements of this Agreement, shall be final and binding upon the parties
hereto and shall not be appealable to any court.
(e) The difference, if any, between the Price as finally
determined, and the estimate of the Price paid on the Closing Date, shall, in
the case of an underpayment, be paid by the Buyer to the Seller, and, in the
case of an overpayment, shall be paid by the Seller to the Buyer, within ten
(10) days after final determination of the Price, by wire transfer of
immediately available funds to such bank account as the payee shall designate
in writing.
Article 3.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Seller hereby
represents and warrants to the Buyer as follows (certain of the Seller's
representations and warranties are modified as set forth in the Disclosure
Letter):
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Section 3.1. Organization; Power. The Seller is a corporation
organized, existing and in good standing under the laws of the State of New
Jersey and has all requisite corporate power and authority to execute and
deliver this Agreement. Prior to the Closing, the Seller shall have taken all
corporate action necessary to authorize the Seller to perform this Agreement
in accordance with its terms, and all instruments delivered pursuant to this
Agreement will be valid, binding and enforceable obligations of the Seller.
Loreto is a sociedad anonima organized and existing under the laws of Spain,
and has all requisite corporate power and authority to own and operate its
properties and carry on its business as presently being conducted. Loreto
does not own or lease any properties or conduct any operations so as to
require domestication or qualification as a foreign corporation in any other
jurisdiction where the failure to be so domesticated or qualified would have
a material adverse effect on the Green Olive Business or properties of
Loreto, including its ability to enforce contracts. True and correct copies of
the organizational documents of Loreto have been made available to the
Buyer by the Seller.
Section 3.2. Authorized Capital. The authorized capital stock of
Loreto consists of 1,026,000 shares of 1,000 ptas. par value common capital
stock in bearer form, all of which shares are issued and outstanding, none of
which are held in the treasury. All of the outstanding shares of capital stock
of Loreto have been duly and validly authorized and issued and are fully paid
and non-assessable. There are no outstanding subscriptions, contracts,
conversion privileges, options, warrants, calls or other rights obligating
Loreto to issue, sell or otherwise dispose of, or to purchase, redeem or
otherwise acquire, any shares of capital stock of Loreto. The Seller is,
directly or through one or more wholly-owned subsidiaries, the true and
lawful owner of the Shares, and the Shares, upon transfer to the Buyer as
herein contemplated, will be free and clear of all liens, encumbrances and
adverse interests.
Section 3.3. Financial Statements. The Seller has previously
delivered to the Buyer the audited balance sheet of Loreto as at July 31, 1995
(together with the notes thereto, the "Balance Sheet") and the audited income
statement of Loreto for the 12-month period then ended. To the best
knowledge of the Seller, except as disclosed in the Disclosure Letter, the
Balance Sheet presents fairly the financial position of Loreto as at July
31, 1995 and the aforesaid income statement, together with the notes thereto,
presents fairly the results of operations of Loreto for the 12-month period
then ended, in conformity with the Seller's internal accounting standards and
practices applied on a basis consistent with prior periods, except that no
intercompany items have been eliminated or consolidated. To the best
knowledge of the Seller, such internal accounting standards and practices are
in all material respects consistent with Spanish generally accepted accounting
principles ("Spanish GAAP").
Section 3.4. Properties. Loreto has good and marketable title to all
of the assets reflected on its books and records as being owned by it,
including, except as they have since been affected by transactions in the
ordinary course of business, the properties reflected as being owned in the
Balance Sheet, free and clear of any liens or encumbrances, except such as
are reflected in the Balance Sheet or the notes thereto or as are set forth in
the Disclosure Letter and except for (i) liens for taxes, assessments or other
governmental charges not yet delinquent or being contested in good faith by
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appropriate proceedings, (ii) landlords' liens for obligations not yet due,
(iii) such imperfections of title and easements, defects, exceptions and
encumbrances, if any, as do not materially detract from the value of, or
materially interfere with the present or intended use of, such properties. On
the Closing Date, the fixed assets and machinery of Loreto will in the
aggregate be in operating condition, subject to normal wear and tear, and
sufficient for the conduct of Loreto's business as conducted on the date
hereof. To the best of the Seller's knowledge, Loreto is in substantial com-
pliance with all applicable zoning and other land use laws, ordinances and
regulations, except as disclosed in the Disclosure Letter. All leases of real
property and all material leases of personal property to which Loreto is a
party are set forth in the Disclosure Letter, and copies of all such leases
have been made available to the Buyer by the Seller. To the best of the
Seller's knowledge, Loreto has received no written notice of default under any
material contract and there is not under any such contract any existing default
or event of default, which with notice or lapse of time would constitute a
default on the part of any party thereunder. The finished product inventory
of Loreto is merchantable or salable in the ordinary course of Loreto's
business, provided that certain inventory is not produced for sale in the
United States.
Section 3.5. Tax Matters. To the best of the Seller's knowledge,
except as disclosed in the Disclosure Letter, the Balance Sheet contains
sufficient reserves and accruals for all national, local and foreign taxes,
including taxes with respect to or measured by gross receipts, income,
withholding, social security, unemployment, franchise, excise, sales and use
and other taxes, to the extent required to be set forth on a balance sheet
prepared in accordance with Spanish GAAP. Except as provided, any taxes
of any nature owed by Loreto and not so reserved or accrued which are
assessed against Loreto or its property in respect of periods or transactions
prior to the Closing, shall be paid by the Seller and the Seller shall be
entitled to any refund of taxes relating to such prior periods, subject to
Sections 11.1 and 11.2.
Section 3.6. Conduct of Green Olive Business. Since the date of the
Balance Sheet, Loreto has conducted its business in the ordinary course;
except that there have been several temporary plant shut-downs.
Section 3.7. Conflicts of Interest. None of the managers of Loreto
is known by the Seller to have any direct or indirect interest in any creditor,
competitor, supplier, customer or agent of Loreto.
Section 3.8. List of Contracts. The Disclosure Letter sets forth the
following:
(a) any contract for the purchase or sale of real
property;
(b) any contract for the purchase of raw materials
which Loreto reasonably anticipates will involve the payment of more than
Pt.50,000,000 after the date hereof;
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(c) any contract for the sale of products which
Loreto reasonably anticipates will involve the payment of more than
Pt.15,000,000 after the date hereof (other than purchase orders accepted by
Loreto in the ordinary course);
(d) any guarantee of the obligations of customers,
suppliers, officers, directors, employees, affiliates or others;
(e) any agreement which provides for the
incurrence by Loreto of indebtedness for borrowed money;
(f) any mortgage or other form of secured
indebtedness;
(g) any collective bargaining agreement with a
labor union; or
(h) any other contract (not of the type mentioned
above or set forth in any other Schedule hereto) which involves a payment
by Loreto of at least Pt.6,000,000 after the date hereof.
Section 3.9. Litigation. Except as set forth in the Disclosure Letter:
(a) there is no legal action or governmental proceeding or investigation,
domestic or foreign, pending or, to the best of the Seller's knowledge,
threatened against Loreto or its properties or assets, which, if adversely
determined against Loreto would have a material adverse effect on it, and (b)
there are no judicial or governmental orders or decrees issued against Loreto
materially affecting the conduct of its business or its properties.
Section 3.10. Trademarks and Intellectual Property. The Disclosure
Letter sets forth all patents, tradenames, trademarks, service marks, brand-
marks, brandnames, material copyrights or registrations, or other material
intellectual property or licenses thereof or applications therefor or interests
therein, which Loreto is using or the use of which is necessary for its
business as now conducted. Loreto owns all of the technology,
manufacturing processes and formulations used by it in the manufacture of
the Seller's green olive products. To the best of the Seller's knowledge,
Loreto is not violating or infringing, and there is no pending or threatened
claim of violation or infringement by Loreto, of any industrial property
rights, including without limitation any patents, copyrights, trademarks,
tradenames and trade secrets, owned by any third person.
Section 3.11. Permits and Authorizations. To the best of the Seller's
knowledge, Loreto has all material approvals, authorizations, consents,
licenses, orders and other permits of all governmental agencies, whether
national, state, local or foreign, required to permit the operation of its
business as presently conducted; to the best of the Seller's knowledge, Loreto
is not disqualified from receiving permits required for activities which it
proposes to conduct in the future. Loreto shall not acquire or apply for or
permit to lapse any license, permit, authorization or order relating to its
business without the prior written consent of the Buyer.
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Section 3.12. Compliance with Applicable Law. Except as set forth
in the Disclosure Letter, the Seller has received no notice that Loreto is, in
the conduct of its business, in substantial noncompliance with any law,
statute, ordinance, permit or regulation, including those relating to
environmental matters and the laws of all foreign jurisdictions regulating
alien ownership of commercial enterprises, the enforcement of which would
have a material adverse effect on its business or the value of its properties
or assets.
Section 3.13. Effect of Agreement. To the best of the Seller's
knowledge, the execution, delivery and performance of this Agreement by
the Seller will not result in a breach or violation by Loreto of, or constitute
a default by Loreto under, (a) any judgment, decree, order or governmental
permit or license, domestic or foreign, to which Loreto is a party or by
which Loreto is bound, or (b) the Constitucion of Loreto.
Section 3.14. Spanish Government Approvals. The Seller and
Loreto, at or in connection with the Closing, shall have complied with all
requirements imposed upon each of them, respectively, by the laws of Spain
in respect of the sale and transfer of the Shares of Loreto as contemplated
herein.
Section 3.15. No Known Claims. Except as set forth in the
Disclosure Letter, neither the Seller nor any of its respective subsidiaries or
divisions nor, to the best of the Seller's knowledge, any third party, has any
claims or causes of action against Loreto as a result of, or arising out of,
transactions or occurrences prior to the Closing.
Section 3.16. No Projections. The Seller has not, and the Buyer
acknowledges that neither the Seller nor any of its agents, advisors or
representatives has, made or delivered any projections or forecasts relating
to Loreto or to any aspect of the Green Olive Business. Without limiting in
any way the foregoing, the Buyer acknowledges that it has not relied upon
the report of Loreto's management as to expected results for fiscal 1996.
Section 3.17. Brokers. Neither the Seller nor any of the Seller's
officers, directors, or employees has employed any broker, finder, or
financial advisor, or incurred any liability for any brokerage fee or
commission, finder's fee or financial advisory fee, in connection with the
transaction contemplated by this Agreement, nor is there any basis known to
the Seller for any such fee or commission to be claimed by any person.
Article 4.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As an inducement to the Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, the Buyer hereby
represents and warrants to the Seller as follows:
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Section 4.1. Legal Status. The Buyer is a company duly organized,
validly existing and in good standing under the laws of Texas and has full
corporate power, authority and legal right to own its properties and assets
and to conduct its business as presently conducted.
Section 4.2. Authority to Execute. The execution and delivery of
this Agreement and the performance by the Buyer of all of the obligations by
it to be performed hereunder have been duly authorized by all necessary
actions.
Section 4.3. Binding Agreement. This Agreement and all obligations
of the Buyer contained herein are legally binding on the Buyer and
enforceable in accordance with their terms.
Section 4.4. Authority. The Buyer has the full power, authority and
legal right to enter into and perform its obligations under this Agreement,
and, except as heretofore effectuated and disclosed in writing to the Seller,
no registration with, consent or approval of, notice to, or any action by, any
person is necessary in connection with the Buyer's execution, delivery, and
performance of this Agreement.
Section 4.5. Compliance with Other Instruments. The Buyer's
consummation of the transactions contemplated by this Agreement will not
result in or constitute any of the following: (i) a default or any event that,
with notice or lapse of time or both, would be a default, breach, or violation
of the certificate of incorporation or by-laws of the Buyer or any contract,
agreement, instrument, judgement, or order, to which the Buyer is a party
or by which it or its property is bound; or (ii) an event or condition that
would permit any person to terminate or accelerate the maturity of any
contract, agreement, instrument or other obligation to which the Buyer is a
party or by which the Buyer or its property or assets is bound, which
termination or acceleration would materially adversely affect the Buyer's
financial condition, operations, or properties.
Section 4.6. Brokers. Neither the Buyer nor any of the Buyer's
officers, directors, or employees has employed any broker, finder, or
financial advisor, or incurred any liability for any brokerage fee or
commission, finder's fee or financial advisory fee, in connection with the
transaction contemplated by this Agreement, nor is there any basis known to
the Buyer for any such fee or commission to be claimed by any person.
Article 5.
PRE-CLOSING COVENANTS
Section 5.1. The Seller's Covenants. The Seller covenants as
follows:
(i) The Buyer's Access to Premises and Information. The
Buyer and its representatives shall, prior to Closing, have reasonable access
to the properties and business and the books and records of Loreto and the
Seller will furnish the Buyer with such financial and operating data and other
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<PAGE> 9
information as to the business and properties of Loreto as the Buyer shall
from time to time reasonably request by notice delivered pursuant to Section
12.7. The Buyer acknowledges that certain of the information which may
be made available to it is proprietary and includes confidential information.
The Buyer shall hold all such information in confidence and shall not disclose
it to any person before the Closing without the approval of the Seller;
provided, however, that the foregoing restriction shall not apply to any infor-
mation which is or becomes publicly known or which is lawfully obtained
from a third party, or to any disclosure required by law. If the transactions
contemplated hereby are not consummated, the Buyer shall return to
Company all documents containing proprietary information.
(ii) Conduct of Loreto's Business in Normal Course. From
the date hereof until the Closing, the Seller will cause Loreto to carry on its
business and activities in the ordinary course, and the Seller shall not make
or institute any purchase, sale, lease or operation, or engage any new
employees for Loreto other than in the ordinary course of business consistent
with past practice, without the prior written consent of the Buyer.
(iii) Preservation of Loreto's Business. Until the Closing, the
Seller will use its best efforts to preserve the business, the business
relationships and goodwill of Loreto.
(iv) Maintenance of Insurance. Until the Closing, each of the
Seller and Loreto will continue to maintain insurance relating to Loreto in the
amounts and with the coverages described on Schedule 5.1, subject to
variations in amounts required by the ordinary operations of such businesses,
and will pay all premiums thereon when due.
(v) Further Covenants. The Seller further agrees:
(a) after the date hereof, not to subject any of the
assets or properties of Loreto to any lien, other than the liens disclosed in
the Disclosure Letter, and other than inventory sold or used, accounts
receivable collected upon, and supplies used, in each case in the ordinary
course of business consistent with past practice;
(b) to maintain Loreto's books and records in
accordance with good business practices and on a basis consistent with prior
practice and the provisions herein;
(c) to comply, and cause Loreto to comply, in all
material respects, with all laws, rules, regulations, writs, statutes,
ordinances, judgements, injunctions, decrees, determinations, awards, and
other orders of every court, government and governmental agency and
instrumentality, domestic or foreign, applicable to Loreto, or to the conduct
of its businesses and to perform, and cause Loreto to perform, its contractual
obligations (including obligations imposed under this Agreement) without
default in any material respect; other than matters contested in good faith,
the noncompliance with which, individually or in the aggregate, do not and will
not have a material adverse effect on the financial condition, properties or
operations of Loreto;
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(d) not to permit Loreto to make any loans or
advances, directly or indirectly, of any part of its assets or properties to
the Seller or to any affiliate of the Seller;
(e) not to permit Loreto to incur, or agree to incur,
any indebtedness for money borrowed, except in the ordinary course of its
business consistent with past practice or to issue any bond, debenture, note
or similar obligation, except pursuant to its existing working capital
facility;
(f) not to permit Loreto to guarantee or otherwise
take any affirmative action to become liable for any indebtedness or liability
of any person;
(g) except in the ordinary course of business
consistent with past practice or in connection with the renegotiation of
agreements with labor unions, not to make, or permit Loreto to make, any
change in the terms of any material contract, license, lease, mortgage, or any
other agreement to which Loreto is a party, other than terminations of
agreements and other arrangements between Loreto and the Seller (or an
affiliate of the Seller);
(h) not to or allow Loreto to waive, cancel, sell or
otherwise dispose of, for less than the face value thereof, any claim or right
that Loreto has against others, except with respect to accounts receivable
discounted by Loreto in the ordinary course of its business consistent with
past practice;
(i) not to or allow Loreto to amend, modify, sup-
plement, or in any way change any plan or arrangement established for the
benefit of any employee of Loreto, other than in connection with the
renegotiation of agreements with labor unions and amendments that are
required to comply with law;
(j) to cooperate and to cause Loreto to cooperate
fully with the Buyer in obtaining all necessary consents and approvals
required in connection with the transactions contemplated hereby; and
(k) to deliver to the Buyer at the Closing the
resignations (effective as of the Closing) of such officers and directors of
Loreto who are employees of the Seller as the Buyer shall request of the
Seller.
Section 5.2. Publicity. The Buyer and the Seller each agrees that
neither party shall, except to the extent required by law, make any public
announcement (whether written or oral) or notice to the press, news media,
or journalists or any person without a business relationship with the Buyer,
the Seller or Loreto relating to any transaction contemplated by this
Agreement without the prior approval of the other party hereto, which
approval shall not be unreasonably withheld. In the case of any public
announcement or other disclosure required by law, each party shall, insofar
as is practicable, consult with the other party prior to any such disclosure,
but the other party's approval shall not be required.
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Section 5.3. Cooperation and Best Efforts. Each of the Buyer and
the Seller agrees to cooperate with the other in the performance of all
obligations under this Agreement and to use its best efforts to fulfill its
respective obligations under this Agreement and to satisfy or cause to be
satisfied, at or before the Closing the conditions to each party's performance
under this Agreement. During the period prior to the Closing Date, the
Seller and the Buyer shall act diligently and reasonably, and shall cooperate
with each other, to secure any consents and approvals of any governmental
body required to be obtained by them in order to permit the consummation
of the transactions contemplated by this Agreement (including without
limitation all filings required to be made with the Director General of
Foreign Transactions, Spanish Ministry of the Economy), or to otherwise
satisfy the conditions set forth in Articles 7 and 8; provided that neither the
Seller nor Loreto shall make any agreement or understanding affecting
Loreto or its business as a condition for obtaining any such consents or
approvals except with the prior written consent of the Buyer, which consent
shall not be unreasonably withheld.
Article 6.
POST-CLOSING COVENANTS
Section 6.1. Employment. The Seller agrees not to hire any
individual employed by Loreto prior to the third anniversary date of the
Closing Date, except with the written consent of the Buyer or except an
individual terminated by Loreto.
Section 6.2. Additional Title Instruments. From time to time, at the
Buyer's request, whether at or after the Closing and without further
consideration, the Seller agrees to execute and deliver such further
instruments of conveyance and transfer and take such other actions as the
Buyer reasonably may require to maintain or perfect Loreto's continued title
to and possession of all assets that it held immediately prior to the Closing.
The originals or full and true copies of certificates, contracts, purchase
orders, sales orders, franchises, commitments, and rights pertaining to the
Shares and to the assets of Loreto that are in the possession of the Seller
shall be delivered to the Buyer or to the Buyer's agent, as the Buyer
reasonably directs, on or promptly after the Closing Date.
Section 6.3. Books and Records. The Buyer will use its best efforts
to preserve all books and records of Loreto received from the Seller, or held
by Loreto immediately after the Closing, and to provide the Seller or its
agent reasonable access to those books and records for a period of five years
following the Closing Date, or until such later date as preservation of and
access to those books and records is no longer required by any governmental
or similar investigatory or prosecutory body.
Section 6.4. Loreto Credit Lines. After the Closing, as between
each of the Buyer, the Seller or Loreto, the Seller shall not have any
obligation to guarantee any credit agreement or to provide any letter of credit
for the benefit of Loreto.
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Section 6.5 Labels, etc. After the Closing, neither Loreto, the Buyer
or any affiliate thereof shall, except to the extent otherwise agreed by the
Seller or provided in the Trademark License Agreement to be entered into
as of the Closing pursuant to Section 7.6, have any right to use, or to sell
products incorporating, any labels, cases, caps, signage, packing, marketing
or other materials (whether or not located at Loreto's place of business)
which in the opinion of the Seller's counsel state or imply that any products
sold or manufactured by Loreto, the Buyer or any such affiliate was or is
manufactured, packaged or distributed by the Seller or any of its subsidiaries
or affiliates (other than Loreto). The Buyer shall, and also shall cause
Loreto to, destroy any and all such materials that come into its possession.
Article 7.
CONDITIONS PRECEDENT TO THE BUYER'S PERFORMANCE
The obligation of the Buyer to purchase the Shares under this
Agreement is subject to the satisfaction, at or before the Closing, of all the
conditions set out below in this Article 7. The Buyer may waive any or all
of these conditions in whole or in part.
Section 7.1. Accuracy of Representations and Warranties;
Performance by the Seller. The representations and warranties of the Seller
contained in this Agreement shall be true in all material respects, except for
changes permitted or contemplated by this Agreement, on and as of the time
of Closing with the same effect as though such representations and warranties
had been made at and as of such time (except to the extent that they expressly
relate to an earlier date); the Seller shall have performed and complied with
all material covenants, agreements and conditions required by this Agreement
to be performed or complied with by it prior to or at the Closing; and the
Seller shall have delivered to the Buyer a certificate signed by a duly
authorized officer, dated the Closing Date, certifying to the foregoing effect.
Section 7.2. Certified Resolutions. The Buyer shall have received
a certificate of the Secretary of the Seller, satisfactory to the Buyer, with
respect to the authorization or consent by the board of directors of the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
Section 7.3. Absence of Litigation. No action or proceeding before
any court or governmental body shall have been instituted or threatened by
any person (other than the Buyer) to restrain or prohibit the transactions
contemplated by this Agreement and shall not have been dismissed or
resolved.
Section 7.4. Approval of Proceedings and Documentation. The
Buyer shall have received such certificates, satisfactory to the Buyer and its
counsel as the Buyer shall have reasonably requested in connection with the
transactions contemplated hereunder, and all proceedings taken by the Seller
or Loreto and all certificates and other documents delivered to the Buyer
under this Agreement shall be reasonably satisfactory to the Buyer and its
counsel.
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Section 7.5 Purchase of Green Olive Business. Simultaneously with
the Closing, the Seller shall have consummated the Closing under the
Domestic Olive Agreement.
Section 7.6 Trademark Agreement. Simultaneously with the
Closing, the Seller shall have caused its subsidiary, Vlasic Foods, Inc. to
have entered into and delivered to the Buyer a Trademark License
Agreement, substantially in the form attached as Exhibit II to the Domestic
Olive Agreement.
Section 7.7 Transition Services Agreement. Prior to the Closing, the
Seller shall have entered into and delivered to the Buyer the Transition
Services Agreement as provided in the Domestic Olive Agreement (the
"Transition Services Agreement").
Section 7.8 Waiver of Conditions. Notwithstanding the failure of
any one or more of the foregoing conditions, the Buyer may proceed with the
Closing without satisfaction, in whole or in part, of any one or more of such
conditions and without written waiver. To the extent that the Buyer proceeds
with the Closing, the Buyer shall be deemed to have waived for all purposes
any rights or remedies it may have against the Seller by reason of the failure
of any such conditions.
Article 8.
CONDITIONS PRECEDENT TO THE SELLER'S PERFORMANCE
The obligation of the Seller to sell and transfer the Loreto Shares
under this Agreement is subject to the satisfaction, at or before the Closing,
of all the following conditions. The Seller may waive any or all of these
conditions in whole or in part.
Section 8.1 Accuracy of Representations and Warranties;
Performance by the Buyer. The representations and warranties of the Buyer
contained in this Agreement shall be true in all material respects, except for
changes permitted or contemplated by this Agreement, on and as of the time
of Closing with the same effect as though such representations and warranties
had been made at and as of such time (except to the extent that they expressly
relate to an earlier date); the Buyer shall have performed and complied with
all material covenants, agreements and conditions required by this Agreement
to be performed or complied with by it prior to or at the Closing; and the
Buyer shall have delivered to the Seller a certificate signed by a duly
authorized officer of the Buyer, dated the Closing Date, certifying to the
foregoing effect.
Section 8.2 Certified Resolutions. The Seller shall have received a
certificate of the Secretary of the Buyer, in form and substance satisfactory
to the Seller, with respect to the authorization by the board of directors of
the Buyer of the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby.
Section 8.3 Absence of Litigation. No action or proceeding before
any court or other governmental body shall have been instituted or threatened
by any person (other than the Seller) to restrain or prohibit the transactions
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<PAGE> 14
contemplated by this Agreement and shall not have been dismissed or
resolved.
Section 8.4 Approval of Proceedings and Documentation. The Seller
shall have received such certificates satisfactory to the Seller and its
counsel as the Seller shall have reasonably requested in connection with the
transactions contemplated hereunder, and all proceedings taken by the Buyer,
and all certificates and other documents delivered to the Seller under this
Agreement, shall be reasonably satisfactory to the Seller and its counsel.
Section 8.5 Purchase of the Green Olive Business. Simultaneously
with the Closing, the Buyer shall have consummated the Closing under the
Domestic Olive Agreement.
Section 8.6 Transition Services Agreement. Prior to the Closing, the
Buyer shall have entered into and delivered to the Seller the Transition
Services Agreement as provided in the Domestic Olive Agreement.
Section 8.7 Waiver of Conditions. Notwithstanding the failure of
any one or more of the foregoing conditions, the Seller may proceed with the
Closing without satisfaction, in whole or in part, of any one or more of such
conditions and without written waiver. To the extent that the Seller proceeds
with the Closing, the Seller shall be deemed to have waived for all purposes
any rights or remedies it may have against the Buyer by reason of the failure
of any such conditions or the breach of any such representations.
Article 9.
THE CLOSING
Section 9.1 The Closing. The "Closing Date" refers to the date upon
which the parties consummate the purchase of the Shares, as contemplated
herein. The Closing Date shall be the same date as the closing held pursuant
to the Domestic Olive Agreement. The consummation of the sale of the
Shares (the "Closing") shall take place at the offices of Drinker Biddle &
Reath, Philadelphia National Bank Building, 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107-3496, commencing at 10:00 a.m., local
time, on the Closing Date, and shall be effective as of 12:01 a.m. (Sevilla,
Spain) Time on the Closing Date or such other time and place as the parties
agree. Subject to Article 10, failure to consummate the Closing shall not
result in the termination of this Agreement or relieve any person of any
obligation hereunder.
Section 9.2 Items to be Delivered at Closing by the Seller. At the
Closing, the Seller shall deliver to the Buyer:
(a) A certificate or certificates representing the Shares duly
endorsed to the Buyer or its designee or accompanied by duly executed stock
powers with signatures guaranteed (provided that the delivery of such
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<PAGE> 15
certificate(s) shall occur in Spain to the extent required by applicable law);
(b) Such other instruments of transfer and conveyance as
the Buyer shall deem necessary or desirable to effectively vest in the Buyer
or its designee good and marketable title to the Shares;
(c) The certificates referred to in Sections 7.1 and 7.2
hereof; and
(d) The resignation of any director of Loreto requested by
the Buyer pursuant to Section 5.1(v)(k) hereof.
Section 9.3 Items to be Delivered at Closing by the Buyer. At the
Closing, the Buyer shall deliver to the Seller:
(a) Immediately available federal funds in the amount of
the estimated Price less the amount of the Credit; and
(b) The certificates referred to in Sections 8.1 and 8.2
hereof.
Article 10.
TERMINATION
Section 10.1 Termination. This Agreement may be terminated prior
to the Closing Date:
(a) by mutual consent of the Buyer and the Seller;
(b) by either party if the transactions contemplated hereby are
not consummated on or before July 26, 1996 and if as of such date the
Closing shall not have occurred by reason of any failure to satisfy the
conditions to Closing as set forth in Section 7 or 8 hereof; provided however
that the right to terminate this Agreement shall not be available to any party
whose failure to fulfill and obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before such
date; or
(c) automatically without any action by any party if the
Domestic Olive Agreement is terminated for any reason.
Section 10.2 Effect of Termination. In the event of any termination
of this Agreement, all rights of all parties hereto shall cease and terminate
(other than the confidentiality provisions of Section 5.1(i), which shall sur-
vive); provided that no such termination shall affect any right any party may
otherwise have for breach of contract, including, without limitation, rights
for breach of any representations, warranties or covenants contained herein.
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<PAGE> 16
Article 11.
INDEMNITY
Section 11.1 Indemnity by the Seller.
(a) The Seller shall indemnify and hold the Buyer, its
successors, assigns, and employees (individually, a "Buyer Indemnitee" or
collectively, the "Buyer Indemnitees"), harmless from and against any
liabilities, obligations, losses, damages, costs, charges or other expenses of
every kind and character, including but not limited to reasonable attorneys'
fees and litigation costs (collectively, "Damages") which are actually
suffered by a Buyer Indemnitee arising out of or as a result of (i) any of the
warranties, representations or covenants of the Seller contained in this
Agreement being incorrect, untrue or breached, (ii) any failure by the Seller
to obtain any required consent to the sale and transfer of the Shares to the
Buyer or its designee, or (iii) any and all amounts which relate to liability
for Taxes (as hereinafter defined) of Loreto, or any other corporation that was
affiliated with the Seller at any time prior to the Closing, during the period
of such affiliation, (a "Seller Affiliate") for any period or periods ending on
or before the Closing, excluding any Taxes that are accrued and reflected as
a tax liability on the Balance Sheet or the Closing Balance Sheet. The Seller
shall not be required to indemnify and hold harmless the Buyer with respect
to any loss incurred by the Buyer unless, until and then only to the extent
that the aggregate amount of all losses incurred by the Buyer in respect of
which the Seller would be liable to the Buyer under this Section exceeds
U.S. $150,000 and notwithstanding anything contained herein to the
contrary, the aggregate amount required to be paid by the Seller pursuant to
this Section shall not exceed U.S. $5,000,000. The Seller shall not be liable
under this Section for losses if the Buyer had actual knowledge on or prior
to the Closing Date of such misrepresentation, breach of warranty or
nonperformance or breach of such covenant. The indemnification provided
for in Section 11.1 shall be limited to claims asserted and claim notices
delivered within 12 months from the Closing Date; provided that a claim that
the Seller has breached any of its representations or warranties made herein
with respect to compliance with environmental laws may be asserted up to
24 months after the Closing Date; and further provided that a claim that the
Seller has breached its representations and warranties set forth in Section
3.5, or a claim brought pursuant to Section 11.1(a)(iii), may be made at any
time before the expiration of the statute of limitations that would be
applicable to an action brought by the appropriate taxing authority with
respect to the matters forming the basis for such claim.
(b) The remedy provided by this Section 11.1, subject to
the limitations set forth herein, shall be the Buyer's exclusive remedy for the
recovery of any damages, losses, deficiencies, liabilities, costs and expenses
resulting from, relating to or arising out of any (1) misrepresentation or
breach of warranty made by or on behalf of the Seller in this Agreement or
in any certificate delivered by the Seller pursuant hereto, or (2) non-
fulfillment of any agreement or covenant on the part of the Seller. Any
amount which is finally determined to be due to the Buyer by the Seller as
indemnification hereunder shall be satisfied first by offsetting such amount
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<PAGE> 17
against the principal amount payable to the Seller by the Buyer pursuant to
the Payment Note (as defined in the Domestic Olive Agreement) in reverse
order of maturity.
Section 11.2 Indemnification by the Buyer. The Buyer shall indem-
nify and hold the Seller and its successors, assigns and employees
(individually, a "Seller Indemnitee" or collectively, the "Seller Indemnitees")
harmless against and in respect of any and all Damages which the Seller or
any such person may suffer, incur or become subject to arising out of, based
upon or otherwise in respect of any inaccuracy in or breach of any
representation, warranty or covenant of the Buyer made in or pursuant to this
Agreement, or the operation of Company from and after the Closing Date
(including, without limitation, any liability or obligation to any of Loreto's
employees severed by the Buyer).
Section 11.3 Indemnification Procedures.
(a) No party hereto shall be deemed to have breached any
representation, warranty, or covenant if (i) such party shall have notified the
other party hereto in writing, on or prior to the Closing Date, of the breach
of, or inaccuracy in, or of any facts or circumstances constituting or
resulting in the breach of, or inaccuracy in, such representation, warranty
or covenant, and (ii) such other parties have permitted the Closing to occur
and, for purposes of this Agreement, are thereby deemed to have waived such
breach or inaccuracy.
(b) In case any claim is made, or any suit or action is com-
menced, against a Buyer Indemnitee in respect of which indemnification
under Section 11.1(a) may be sought by it hereunder, or a Seller Indemnitee
in respect of which indemnification under Section 11.2 may be sought
hereunder, the indemnified party (the "Indemnitee") shall promptly give the
indemnifying party (the "Indemnifying Party") notice thereof and the
Indemnified Party shall be entitled to participate in or, if the Indemnitee
does not desire to defend, to conduct the defense thereof at the Indemnifying
Party's expense. The Indemnifying Party may (but need not) defend or
participate in the defense of any such claim, suit or action, but the
Indemnifying Party shall promptly notify the Indemnitee if the Indemnifying
Party shall not desire to defend or participate in the defense of any such
claim, suit or action as aforesaid. The Indemnitee may at any time notify the
Indemnifying Party of its intention to settle or compromise any claim, suit
or action against the Indemnitee in respect of which payments may be sought
by the Indemnitee hereunder, and the Indemnitee may settle or compromise
any such claim, suit or action unless the Indemnifying Party notifies the
Indemnitee in writing (within ten (10) days after the Indemnitee has given
written notice of its intention to settle or compromise) that the Indemnifying
Party intends to conduct or to continue to conduct the defense of such claim,
suit or action. Unless the Indemnifying Party gives the notice referred to in
the foregoing sentence with respect to settlements or compromises, any such
settlement or compromise of, or (notwithstanding any notice from the
Indemnifying Party referred to in the foregoing sentence) any final
judgement or decree entered on or in, any claim, suit or action which the
Indemnitee has defended or participated in the defense of in accordance
herewith, shall be deemed to have been consented to by, and shall be binding
upon, the Indemnifying Party as fully as if the Indemnifying Party had
assumed the defense thereof and a final judgement or decree had been
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<PAGE> 18
entered in such suit or action, or with regard to such claim, by a court of
competent jurisdiction for the amount of such settlement, compromise,
judgement or decree. If the Indemnifying Party conducts or continues the
conduct of the defense of any claim, suit or action as aforesaid, it shall do
so at its own cost and expense, holding the Indemnitee harmless from all
costs, fees, expenses, debts, liabilities and charges in connection with such
defense; shall diligently defend against any such claim, and shall hold the
Indemnitee's business and assets free and harmless from any attachment,
execution, judgement, lien or other legal process. The Indemnifying Party
shall promptly reimburse the Indemnitee for any and all reasonable costs and
expenses incurred by the Indemnitee in connection with any contest or
challenge by the Indemnifying Party of any claim, including, not limited to,
the cost of the Indemnitee of reasonable attorney's fees, in connection with
such contest or challenge.
(c) In the event that an Indemnitee is entitled to be
indemnified hereunder, the Indemnifying Party shall be given written notice
thereof promptly by the Indemnitee, which notice shall specify the amount
and nature of the amounts to be indemnified and include the request of the
Indemnitee for indemnification of such amount. The Indemnifying Party
shall within twenty days pay to the Indemnitee the amount so specified, or
deliver to the Indemnitee written notice setting forth in reasonable detail why
Indemnifying Party is not obligated to pay such amount, in which event the
parties shall use good faith efforts to resolve any disputed matters.
(d) The Seller shall take all steps necessary to assure that
any successor to substantially all of the assets of the Seller shall assume all
of the Seller's obligations to any Buyer Indemnitee under this Agreement.
Section 11.4 Special Tax Provisions.
(a) The Buyer shall cause Loreto to timely prepare and file
all tax returns and reports of Loreto ("Returns") which are due after the
Closing Date and which include any period prior to the Closing Date. All
such Returns shall be prepared and all elections with respect to such Returns
shall be made, to the extent permitted by law, in a manner consistent with
Loreto's prior normal practice. At least twenty Business Days prior to the
filing of the Returns which Loreto is required to file pursuant to this Section
11.4(a) the Buyer shall provide the Seller with copies of such Returns for the
Seller's approval, which approval shall not be unreasonably withheld. If the
Buyer fails to comply with any reasonable request of the Seller made in
relation to and before filing of such Return, then the Seller shall cease to
have any liability to make any payment in respect of any Tax liability
connected with the Return in question.
(b) The Seller shall be entitled to any credits or refunds of
Taxes of Loreto for any period or periods ending on or before the Closing
Date excluding any amounts reflected in the Closing Balance Sheet and taken
into account in the calculation of the Price. Any credits or refunds to which
the Seller is entitled hereunder but which at any time subsequent to the
Closing Date are received by or credited to Loreto, shall be promptly paid
to the Seller following receipt of such refund or the utilization by Loreto of
such credit.
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<PAGE> 19
(c) If any adjustments shall be made to any tax Returns
relating to Loreto for any period prior to the Closing Date which result in
any tax detriment to the Seller and any tax benefits to Loreto or the Buyer
for any taxable period ending after the Closing Date (excluding any benefits
associated with the use of operating losses carried forward) then the Buyer
shall promptly pay to the Seller an amount equal to the benefit of such tax
benefit at such time or times as and to the extent that Loreto or the Buyer
realizes such benefit through a refund of tax or reduction in the amount of
taxes which the Buyer would otherwise have had to pay if such adjustment
had not been made.
(d) The Buyer shall immediately notify the Seller in
writing upon receipt by the Buyer or Loreto of notice of any Tax audits, any
pending or threatened Tax assessments or any requests by a taxing authority
to extend the applicable statute of limitations relating to taxable periods and
Taxes of Loreto for which the Seller has any liability for Taxes under this
Agreement. The Seller shall have the right at its cost to determine whether
to grant or deny any such extensions, to control Loreto's interests in any Tax
audit or other examination by any taxing authority and to contest, resolve and
defend against any assessment for Taxes, notice of Tax deficiency or other
adjustment of Taxes of or relating to Loreto for taxable periods of Loreto
ending on or prior to the Closing Date and to employ counsel of its choice
at its expense provided that the Buyer has received assurance reasonably
acceptable to the Buyer that the Seller will to the extent required under this
Agreement pay any liability for indemnification thereunder resulting
therefrom and provided further that the Seller shall not settle or otherwise
resolve any issue which may affect the liability for Taxes of the Company for
any period with respect to which the Buyer or the Company has any
responsibility for payment thereof without the Buyer's consent, which
consent shall not be unreasonably withheld or delayed.
(e) The Buyer and the Seller agree that they will provide
each other with such assistance as may reasonably be requested by either of
them in connection with the preparation of any Return, any audit or other
examination by taxing authority or any judicial or administrative proceedings
related to liability for Taxes (including refunds) and will each provide the
other with any records or information relevant to such return, audit or exam-
ination, proceedings or determination as are in their possession or subject to
their control. Such assistance shall include making employees available on
a mutually convenient basis to provide additional information and explanation
of any material provided hereunder and shall include providing copies of any
relevant Returns. Each Party shall retain for a reasonable period of time (but
not less than six years after Closing or until expiration of all applicable
statues of limitation whichever is later) and provide the other party with any
records or information or any other assistance (including without limitation
making employees available to such other party) which may be relevant to
such Tax Return, audit, proceeding or determination. The party requesting
assistance hereunder shall reimburse the other for reasonable expenses
incurred in providing such assistance.
(f) The Buyer shall, if so requested by the Seller, cause
Loreto to apply forthwith upon the request being made, at the expense of the
Seller for any available amnesty or other legal provision permitting Loreto
to close preceding years for any Tax related purpose.
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<PAGE> 20
(g) For purpose of this Article 11, the term "Taxes" shall
mean all taxes based upon the net income of Loreto or any subsidiary of
Loreto. Such term shall include any interest, penalties or additions
attributable to such Taxes.
Section 11.5 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH
HEREIN, THE SELLER DISCLAIMS ALL WARRANTIES, REPRESENTATIONS AND GUARANTEES,
WHETHER EXPRESS OR IMPLIED. EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE
SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE AND NO IMPLIED WARRANTIES WHATSOEVER. The Buyer
acknowledges that neither the Seller nor any of its representatives nor any
other person has made any representation or warranty, express or implied,
as to the accuracy or completeness of any memoranda, charts, forecasts or
other forward looking information, summaries or schedules heretofore made
available by the Seller or its representatives to the Buyer or any other
information which is not included in this Agreement or the Schedules hereto,
and neither the Seller nor any of its representatives nor any other person will
have or be subject to any liability to the Buyer or any other person resulting
from the distribution of any such information to, or use of any such
information by, the Buyer or any of its agents, consultants, accountants,
counsel or other representatives.
Article 12.
MISCELLANEOUS
Section 12.1 Recovery of Litigation Costs. If any dispute resolution
legal action is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in connection with
any of the provisions of this Agreement, the successful or prevailing party
or parties shall be entitled to recover reasonable attorneys' fees and other
costs incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.
Section 12.2 Entire Agreement; Modification; Waiver. This
Agreement, together with the other agreements referred to herein, constitute
the entire agreement between the parties pertaining to the subject matter
contained in it and supersedes all prior and contemporaneous agreements,
representations, and undertakings of the parties. No supplement,
modification, or amendment of this Agreement shall be binding unless
executed in writing by all the parties. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by
any party making the waiver.
Section 12.3 Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
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<PAGE> 21
Section 12.4 Assignment. This Agreement shall be binding on, and
shall inure to the benefit of, the parties to it and their respective heirs,
legal representatives, successors, and assigns but this Agreement shall not be
assignable without the prior written consent of the other party, except that
the Buyer may assign its rights and obligations under this Agreement to an
affiliate of the Buyer, provided that such obligations are guaranteed by the
Buyer.
Section 12.5 Fees and Expenses. Each of the Seller and the Buyer
shall pay all fees, costs, and expenses (including without limitation legal and
accounting expenses) incurred or to be incurred by it in negotiating and
preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement; provided, that the Seller shall pay all
documentary, transfer, and sales taxes that arise out of or in connection with
the transactions contemplated by this Agreement.
Section 12.6 Survival of Representations and Warranties. All
representations, warranties, covenants, and agreements of the parties
contained in this Agreement, or in any instrument, certificate, opinion, or
other writing provided for in it, shall survive the Closing for a period of 12
months after the Closing Date. Except as otherwise provided herein, no
claim shall be made for the breach of any representation or warranty under
this Agreement after the date on which such representations and warranties
terminate as set forth in this Section 12.6.
Section 12.7 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be
deemed to have been duly given on the date of service if served personally
on the party to whom notice is to be given, or on the third day after mailing
if mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed as follows:
Buyer: American Rice, Inc.
16825 Northchase Drive
Houston, Texas 77060
Telecopier No. (713) 872-5243
Attention: Mr. Douglas A. Murphy
President and Chief Executive Officer
With a Copy to: Vial, Hamilton, Koch & Knox, LLP
1717 Main Street, Suite 4400
Dallas, Texas 75201
(214) 712-4402
Attention: George Fazakerly, Esquire
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<PAGE> 22
Seller: Campbell Soup Company
Campbell Place
Camden, New Jersey 08103-1799
Telecopier No. (609) 342-3936
Attention: Corporate Secretary
With a copy to: Campbell Soup Company
Campbell Place
Camden, New Jersey 08103-1799
Telecopier No. (609) 342-3936
Attention: Linda A. Lipscomb, Esquire
Deputy General Counsel
Any party may change its address for purposes of this Section by
giving the other parties written notices of the new address in the manner set
forth above.
Section 12.8 Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of New Jersey,
United States of America.
Section 12.9 Further Action. Each of the parties hereto shall use
such party's best effort to take such action as may be necessary or reasonably
requested by the other parties hereto to carry out and consummate the
transactions contemplated by this Agreement.
<PAGE>
<PAGE> 23
Section 12.10 Effect of Headings. The subject headings of the
Articles and Sections of this Agreement are included for purposes of
convenience only, and shall not affect the construction or interpretation of
any of its provisions.
IN WITNESS WHEREOF, the parties to this Agreement have duly
executed it on the day and year first above written.
CAMPBELL SOUP COMPANY
By: /s/ Anthony P. DiSilvestro
---------------------------
Deputy Treasurer
AMERICAN RICE, INC.
By: /s/ Kenneth C. McCorkle
------------------------
Senior Vice President
