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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): December 31, 1993
TERRA INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
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MARYLAND 1-8520 52-1145429
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
TERRA CENTRE
600 FOURTH STREET
P. O. BOX 6000
SIOUX CITY, IOWA 51102-6000
(Address of principal Executive offices) (Zip Code)
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Registrant's telephone number, including area code: (712) 277-1340
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ITEM 2. Acquisition or Disposition of Assets.
On December 31, 1993, pursuant to an Asset Purchase Agreement
("Agreement") among Asgrow Florida Company (AFC), The Upjohn Company ("Upjohn")
and Terra International, Inc. ("Terra International"), Terra International
acquired most of the assets of AFC, including real property, machinery,
vehicles, accounts receivable and inventory. AFC is a wholly owned subsidiary
of Asgrow Seed Company, which in turn is a wholly owned subsidiary of Upjohn.
Terra International is a wholly owned subsidiary of Terra Industries Inc. AFC
and Terra International are engaged in the business of marketing, selling and
distributing fertilizers, seeds, herbicides, pesticides and other agricultural
products through outlets in Florida. Terra International will assimilate the
12 retail locations in Florida formerly owned by AFC into its existing network
of Florida sales locations, and will initially operate its Florida business
under the name Terra Asgrow Florida. Terra International paid Upjohn
approximately $31 million cash for the purchased assets at closing, which
amount was based on the value of the purchased assets as determined by
management of Terra International.
ITEM 7. Financial Statements and Exhibits.
(a), (b) Financial Statements of Businesses Acquired and Pro Forma Financial
Information.
It is impracticable to provide the historical and pro forma financial
statements for the purchased assets, required by Item 7 of Form 8-K, by the
date on which the report on Form 8-K relating to the above-described
acquisition would be required to be filed under the Securities Exchange Act of
1934. Such financial statements will be filed with the Securities and Exchange
Commission under cover of Form 8 as soon as practicable, but not later than 60
days after January 15, 1994, the date on which such report on Form 8-K would be
required to be filed.
(c) Exhibits.
Exhibit 2. Asset Purchase Agreement dated as of December 30, 1993, by
and between Terra International, Inc., The Upjohn Company and Asgrow Florida
Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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TERRA INDUSTRIES INC.
/S/ George H. Valentine
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Date: January 11, 1994 George H. Valentine
-- Vice President and General Counsel
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EXHIBIT INDEX
Exhibit 2 -- Asset Purchase Agreement dated as of December 30, 1993, by and
between Terra International, Inc., The Upjohn Company and Asgrow
Florida Company.
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ASSET PURCHASE AGREEMENT
AMONG
TERRA INTERNATIONAL, INC.,
THE UPJOHN COMPANY
AND
ASGROW FLORIDA COMPANY
DATED: DECEMBER 30, 1993
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TABLE OF CONTENTS
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BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - SALE AND PURCHASE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Assets to be Acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) Other Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(c) Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(e) Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(f) Other Promotional Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(g) Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(h) Customer Lists and other
Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(i) FIFRA Label Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(j) Seller's Deposits and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(k) Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(l) Telephone and Fax Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(m) Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(n) Claims Relating to Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(o) Other Property and Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.02 Assumed Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Other Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Open Purchase Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Customer Deposits and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(e) Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.03 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Excluded Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Cash, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(d) Inter-Company Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(e) Claims Against Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Prepaid Insurance Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(g) Rights Hereunder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(h) Consigned Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(i) Seed Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(j) Homestead Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(k) Trade Name, Trademarks, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(l) Third Party Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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(m) Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(n) Tax Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(o) Combined Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(p) Internal Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(q) Privileged Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(r) Contracts not Assigned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II - PURCHASE PRICE; POST-CLOSING
ADJUSTMENT; ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.01 Cash at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.02 Post-Closing Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Joint Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Initial Closing Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Seller's Review of Initial Closing
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Buyer's Review of Seller's Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) Final Determination by Accounting
Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) Procedure for Payment of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.03 Reserves for Bad Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.04 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III - TITLE INSURANCE AND RELATED MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.01 Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.02 Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.03 Title Defects and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV - CLOSING; DOCUMENTS OF CONVEYANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.01 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.02 Conveyance of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) Delivery of Special Warranty
Deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Recording Deeds and Delivery of
Endorsement to Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.03 Assignment and Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.04 Other Instruments of Conveyance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.05 Other Deliveries at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.06 Allocation of Closing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.07 Prorations at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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Section 4.08 Transfer of Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.09 Termination and Related Employee
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.10 Utility Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.11 Procedure Relating to Motor Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.12 Other Actions and Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.01 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.02 Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.03 Validity of Contemplated
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.04 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.05 Inventory Held for Resale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.06 Veracity of Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF
SELLER AND UPJOHN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.01 Organization, Good Standing
and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.02 Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.03 Validity of Contemplated
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.04 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.05 Copies of Articles and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.06 Liabilities and Obligations of
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.07 Title to Non-Real Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.08 Assumed Leases and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.09 Fixed Assets and Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.10 Zoning; Easements; Utilities;
Contiguous Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.11 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.12 Certain Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.13 Ad Valorem Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.14 Litigation; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.15 Permits and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.16 Intellectual Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.17 All Necessary Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.18 Labor or Employee Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.19 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.20 Employee Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.21 No Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.22 FIRPTA Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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Section 6.23 No Affiliates' Assets, Leases
or Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.24 Insurance Coverages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.25 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.26 Conditions Affecting Seller's
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.27 Customers and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.29 Scheduled Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VII - ACTIVITIES PRIOR TO THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.01 Activities Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.02 Reports; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.03 Access; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.04 Seller's Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.05 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.06 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VIII - CASUALTY AND CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.01 Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.02 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IX - CONDITIONS TO OBLIGATIONS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.02 Performance of Covenants,
Agreements and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.03 Prohibitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.04 Hart-Scott-Rodino Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9.05 Opinion of Seller's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9.06 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 9.07 No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 9.08 Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.09 Title Commitment, Permitting and Land
Use Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.10 UCC Search Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.11 Environmental Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.12 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE X - CONDITIONS TO OBLIGATIONS OF SELLER
AND UPJOHN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.02 Performance of Covenants,
Agreements and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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Section 10.03 Prohibitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.04 Hart-Scott-Rodino Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.05 Opinion of Buyer's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 10.06 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 10.07 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XI - SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.01 Survival of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.02 Indemnification by the
Seller and Upjohn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.03 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.04 Indemnification from
Environmental Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 11.05 Limitations of Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(a) Time Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(b) Monetary Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(c) Consequential Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(d) Actions Taken by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(e) Mitigation of Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(f) Knowledge of Indemnified Party . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(g) Environmental Limitations and
Cost Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(h) Plant City Corrective Action
Plan; Disposal of Containers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(i) Limitation on Scope of Remediation
Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(j) Definition of Environmental Claim . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 11.06 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 11.07 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 11.08 Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 11.09 Remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XII - CONDUCT OF THE PARTIES AFTER CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.01 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.02 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.03 Manufacturers' Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.04 Product Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.05 Use of License Tags . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.06 Use of Asgrow Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.07 Deposit of Checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.08 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
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<TABLE>
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PAGE
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<S> <C>
Section 12.09 Delivery of Title Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XIII - BROKERAGE; EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 13.01 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 13.02 Transactional Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XIV - BULK TRANSFER LAWS; SATISFACTION
OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 14.01 Waiver of Compliance with Bulk
Transfer Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 14.02 Satisfaction of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XV - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 15.01 Termination by Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 15.02 Termination Due to Title Defect,
Casualty, or Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 15.03 Termination Attributable to
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XVI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 16.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 16.02 Assignability and Parties
in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 16.03 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 16.04 Non-Exclusive Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 16.05 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 16.06 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 16.07 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 16.08 Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 16.09 Modifications, Amendments
and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 16.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 16.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 16.12 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 16.13 No Recordation of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 16.14 Radon Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 16.15 Gender; Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 16.16 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 16.17 No Benefit to Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE XVII - GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
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<PAGE> 8
SCHEDULES AND EXHIBITS
<TABLE>
<CAPTION>
SCHEDULES DESCRIPTION
--------- -----------
<S> <C>
Schedule 1.01(a)...................Real Property
Schedule 1.01(b)...................Fixed Assets
Schedule 1.01(e)...................Intellectual Property
Schedule 1.01(g)...................Excluded Accounts Receivable
Schedule 1.01(i)...................FIFRA Label Registrations
Schedule 1.02(a)...................Assumed Leases
Schedule 1.02(b)...................Assumed Contracts
Schedule 1.03(a)...................Excluded Facilities
Schedule 2.03(a)...................Additional Bad Debt Reserves
Schedule 3.01......................Permitted Exceptions
Schedule 4.09......................Severance Benefits
Schedule 6.09(a)...................Latent Defects, Etc.
Schedule 6.10......................Restrictions on Land Use
Schedule 6.11......................Financial Statements
Schedule 6.14......................Litigation
Schedule 6.15......................Permits
Schedule 6.17......................Certain Assets, Leases and Contracts
Schedule 6.18......................Labor/Employee Disputes
Schedule 6.19......................Non-Merchantable Inventory
Schedule 6.21......................Changes since Financial
Statement Date
Schedule 6.23......................Excluded Assets, Etc.
Schedule 6.24......................Insurance Coverages
Schedule 6.25......................Environmental Disclosures
</TABLE>
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<TABLE>
<CAPTION>
SCHEDULES DESCRIPTION
--------- -----------
<S> <C>
Schedule 6.26......................Seller/Upjohn Representatives
Schedule 6.27......................Customers and Sales
Schedule 12.01.....................Dupont-Benlate Litigation
Cooperation
</TABLE>
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
-------- -----------
<S> <C>
Exhibit A............................Form of Seed Distributor
Agreement
Exhibit B............................Asgrow License Agreement
Exhibit C............................Allocation of Purchase Price
Exhibit D............................The Seed Purchase Agreement
Exhibit E............................6/30/93 Pro-Forma Balance
Sheet
Exhibit F............................Plant City Site Plan
</TABLE>
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<PAGE> 10
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made this -30th day
of December, 1993, by and among Terra International, Inc., a Delaware
corporation (hereafter "Buyer"), Asgrow Florida Company, a Florida corporation
(hereafter "Seller") and Seller's ultimate parent, The Upjohn Company, a
Delaware corporation (hereafter "Upjohn"). The Buyer, the Seller and Upjohn
are sometimes referred to collectively herein as the "parties" or individually
as a "party."
BACKGROUND
WHEREAS, the Seller is engaged in business as a retailer and
distributor of vegetable seeds, crop protection, and specialty products to
agricultural dealers and growers, primarily in the State of Florida; and
WHEREAS, the Seller desires to sell substantially all of its assets
and, under the terms and conditions set forth in this Agreement, the Buyer has
agreed to purchase such assets and assume certain of the Seller's obligations;
and
WHEREAS, the Seller is a second-tier wholly owned subsidiary of Upjohn
and Upjohn has agreed to join in this Agreement to provide certain warranties,
covenants, and indemnities in order to induce the Buyer to enter into this
Agreement; and
WHEREAS, in connection with the purchase and sale contemplated herein,
the Buyer and the Seller's immediate parent, Asgrow Seed Company, a Delaware
corporation, will execute a distributor agreement in the form of Exhibit A
attached hereto, under which the Buyer is to become a seed distributor in
Florida of Asgrow Seed Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants, representations, warranties, and agreements contained
herein, and intending to be legally bound, the Buyer, the Seller and Upjohn
agree as follows:
ARTICLE I
SALE AND PURCHASE OF ASSETS
Section 1.01 Assets to be Acquired. Subject to the terms and
conditions set forth herein, on the Closing Date (as set forth in Section
3.01), the Seller shall sell, assign, transfer, convey and deliver to the
Buyer, free and clear of all mortgages, deeds of trust, pledges, liens,
conditional sales agreements, leases, lease-
<PAGE> 11
purchase agreements, security interests, charges, easements, restrictions,
encumbrances, and options (hereafter collectively referred to as
"Encumbrances"), except for Permitted Exceptions (as defined in Section
3.01(a)), and the Buyer shall purchase, acquire and accept from the Seller, all
of the Seller's right, title and interest in and to the following assets of the
Seller, whether real, personal or mixed, and whether tangible or intangible
(hereafter collectively referred to as the "Purchased Assets"):
(a) Real Property. All real property described in
Schedule 1.01(a) attached hereto and incorporated herein by reference,
including all buildings, structures and other improvements located
thereon or affixed thereto and all mineral, developmental and property
rights relating thereto (hereafter collectively referred to as the
"Real Property");
(b) Other Fixed Assets. All machinery, equipment,
rolling stock, fixtures and leasehold improvements (but only to the
extent owned by Seller), tools, furniture, furnishings, signs,
displays and other fixed assets owned by the Seller, including without
limitation computer hardware and software, as more particularly
described in Schedule 1.01(b) attached hereto and incorporated herein
by reference, but excluding the leasehold improvements and fixed
assets (other than rolling stock) located at the Excluded Facilities
described in Section 1.03(a) (the fixed assets to be purchased by the
Buyer are hereafter collectively referred to as the "Fixed Assets");
(c) Inventory. All merchantable inventory of
fertilizers, pesticides, crop protection, specialty and other products
owned by the Seller held for sale to customers as of the Effective
Time (as defined in Section 2.02), including the Seller's inventory of
non-Asgrow seeds, but excluding all of the Seller's inventory of
Asgrow produced seeds wherever located and all inventory located at
the Excluded Facilities (the inventory to be purchased by the Buyer is
hereafter collectively referred to as the "Inventory");
(d) Supplies. All usable supplies, including without
limitation all fuel, petroleum products, tires, parts, product labels,
packaging materials, sacks, bags, containers, shop supplies, office
supplies and cleaning supplies owned by the Seller as of the Effective
Time but excluding all supplies located at the Excluded Facilities
(the supplies to be purchased by the Buyer are hereafter collectively
referred to as the "Supplies");
(e) Intellectual Property. All trademarks, patents,
service marks, copyrights and trade names set forth in Schedule
1.01(e), all goodwill associated therewith, and any applications
therefor or registrations thereof (hereafter referred to as the
"Intellectual Property"); provided that the
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<PAGE> 12
Seller and Asgrow Seed Company shall retain exclusive ownership of the
name "Asgrow" and "Asgrow Florida Company" and the Buyer's interest
therein shall be limited to a license to use the fictitious name
"Asgrow" in combination with the words "Florida" and "Terra" within
the State of Florida for a term of three (3) years from the Closing
Date as provided in a license agreement in the form of Exhibit B
attached hereto to be executed and delivered at the Closing;
(f) Other Promotional Rights. All trademarks, patents,
service marks, copyrights and trade names, whether or not listed in
Schedule 1.01(e), all goodwill associated therewith, and all
applications for or registrations of any of the foregoing, and all
marketing or promotional designs, brochures, advertisements, concepts,
literature, books, media rights, rights against any other Person in
respect of any of the foregoing and all other promotional properties
(hereafter collectively referred to as the "Promotional Rights"), in
each case (i) primarily used or useful or developed or acquired by the
Seller for use in connection with the ownership and operation of the
Purchased Assets and (ii) subject to the licensing limitation with
respect to the use of the name "Asgrow" as set forth in Section
1.01(e) above;
(g) Accounts Receivable. All of the Seller's accounts
receivables as of the Effective Time, including all promissory notes,
guarantees and collateral relating thereto but excluding (i) accounts
receivable due from those customers listed in Schedule 1.01(g)
attached hereto and incorporated herein by reference, including any
promissory notes, guaranties and collateral relating to such excluded
accounts receivable, (ii) accounts receivable generated by the
Seller's Moultrie, Georgia retail facility and (iii) inter-company
receivables (the accounts receivable to be purchased by the Buyer are
hereafter referred to as the "Accounts Receivable" and the accounts
receivable to be retained by the Seller are hereafter referred to as
the "Excluded Accounts Receivable");
(h) Customer Lists and other Intangible Assets. All
other intangible assets except cash or equivalents, including without
limitation all customer lists (the "Customer Lists"), goodwill,
"know-how," proprietary information and trade secrets relating to the
Seller's business operations; and all supplier and manufacturers'
warranties (including pending warranty claims) and manuals relating to
the Fixed Assets, the Inventories and the Real Property;
(i) FIFRA Label Registrations. All registrations of
product labels pursuant to the Federal Insecticide, Fungicide and
Rodenticide Act ("FIFRA"), as more particularly described in Schedule
1.01(i) attached hereto and incorporated herein by reference, to the
extent such registrations are transferable
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<PAGE> 13
and whether or not all action necessary to effect the transfer of such
registrations has been taken prior to the Closing.
(j) Seller's Deposits and Prepayments. All of the
Seller's prepayments (including without limitation prepaid ad valorem
taxes and heavy vehicle highway use taxes but excluding prepaid
insurance premiums) and lease deposits and, to the extent they are
transferable, all utility deposits and other deposits (hereafter
referred to as the "Seller's Prepayments");
(k) Permits. All Permits (as defined in Section 6.15)
relating to the operation of Seller's business, to the extent such
Permits are transferable and whether or not all action necessary to
effect such transfer has been taken prior to the Closing;
(l) Telephone and Fax Numbers. The right to use the
telephone and fax machine numbers assigned to each of the Seller's
places of business in Florida and Georgia;
(m) Books and Records. Except as expressly set forth in
Section 1.03(b), all papers, documents, computerized databases and
records of Seller relating to the Purchased Assets and its business
operations, including without limitation all product formulations,
personnel, labor relations and workers' compensation records relating
to employees hired by the Buyer, environmental control records, sales
records, marketing records, accounting and financial records,
maintenance and production records, surveys of the Real Property, and
plans and specifications relating to the buildings, fixtures and other
improvements located on the Real Property;
(n) Claims Relating to Purchased Assets. All claims,
causes of action, rights of recovery and rights of setoff of every
type and kind relating to supplier and manufacturers warranties issued
with respect to the Purchased Assets and all claims, causes of action,
rights of recovery and rights of setoff of every type and kind
relating to the Assumed Obligations (as defined in Section 1.02(c));,
in each case whether accruing before or after the Closing.
(o) Other Property and Rights. Unless otherwise
expressly excluded above or in Section 1.03, all other property and
rights, tangible and intangible, real, personal or mixed, which the
Seller owns and utilizes in connection with its business operations;
provided, however, that the definition of Purchased Assets shall not include
any items defined as Excluded Assets in Section 1.03.
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<PAGE> 14
Section 1.02 Assumed Obligations. Subject to the terms and
conditions set forth herein, on the Closing Date the Seller shall assign to the
Buyer and the Buyer shall assume and discharge in a timely fashion all of the
liabilities and obligations of the Seller arising under the following leases,
contracts, purchase orders and liabilities of the Seller (hereafter
collectively referred to as the "Assumed Obligations"):
(a) Leases. The leases relating to the Seller's retail
facilities described in Schedule 1.02(a) (hereafter referred to as the
"Assumed Leases");
(b) Other Contracts. The contracts described in Schedule
1.02(b) (hereafter referred to as the "Assumed Contracts");
(c) Open Customer Purchase Orders. The Seller's
obligations to deliver products, including seeds, to customers who
have placed orders for products which have not been delivered as of
the Effective Time, including all customer purchase orders and
contracts relating thereto, provided such obligations are incurred in
the ordinary course of the Seller's business (hereafter referred to as
the "Assumed Purchase Orders");
(d) Customer Deposits and Prepayments. All deposits and
prepayments received from customers relating to products to be
delivered after the Effective Time (referred to herein as the
"Customer Deposits"); and
(e) Current Liabilities. The Seller's trade payables
(excluding inter-company payables), Customer Deposits, and other
current liabilities outstanding as of the Effective Time but only to
the extent such liabilities are reflected in the Final Closing
Balance Sheet (as described in Section 2.02(c) (hereafter referred to
as the "Assumed Current Liabilities").
For purposes of subsection (e) above, current liabilities shall mean
liabilities incurred in the ordinary course of the Seller's business due within
one year of the Closing Date and shall not include accrued tax liabilities, the
current portion of any long-term debt, inter-company payables, contingent
liabilities or any current liabilities that are not included in the Final
Closing Balance Sheet as finally determined in accordance with the procedures
set forth in Section 2.02(b)-(e). Except as expressly set forth in subsection
(a)-(e) above and in Section 4.09, the Buyer shall have no responsibility for
any of the Seller's obligations (including contracts, leases, product
warranties, purchase orders and liabilities of any type, kind or nature),
whether fixed, accrued, contingent or otherwise, and whether arising in
contract, in tort, by violation of law, or otherwise,
-5-
<PAGE> 15
and all such obligations shall remain with the Seller and are herein referred
to as the "Excluded Obligations."
Section 1.03 Excluded Assets. The "Purchased Assets" shall not
include any of the Seller's rights, privileges, title or interest in the
following assets (hereafter referred to as the "Excluded Assets"):
(a) Excluded Facilities. The leasehold facilities of the
Seller described in Schedule 1.03(a), including all leases, leasehold
improvements, fixtures, inventory, supplies and leasehold interests
relating thereto (hereafter referred to as the "Excluded Facilities");
(b) Books and Records. All of the Seller's minute books,
stock books, tax returns and books and records directly relating to
the Excluded Assets and the Excluded Obligations, all personnel, labor
relations and workers' compensation records relating to the Seller's
employees who are not hired by the Buyer, and all records relating to
Benlate and Benlate claimants (provided that copies of such records
other than privileged attorney-client communications will be furnished
to the Buyer if reasonably requested by the Buyer).
(c) Cash, etc. Any currency, coins or balances in
checking or other demand deposits, securities or money market accounts
or other cash equivalents, including cash or cash equivalents
representing Customer Deposits;
(d) Inter-Company Receivables. All inter-company or
affiliate accounts receivable, advances or indebtedness;
(e) Claims Against Third Parties. Any claim of the
Seller against any Person other than claims described in Section
1.01(n);
(f) Prepaid Insurance Premiums. Any claim for refund of
prepaid insurance premiums, it being understood and agreed that the
Seller may cancel all policies insuring the Purchased Assets as of the
Closing Date upon the first to occur of (i) three (3) days after the
Closing or (ii) notification that Buyer's insurance has become
effective; and
(g) Rights Hereunder. All rights and claims of the
Seller under this Agreement.
(h) Consigned Goods. All goods held by the Seller on
consignment;
(i) Seed Inventory. All inventory of seeds (which shall
be purchased separately by Buyer pursuant to the terms of the Seed
Purchase Agreement attached hereto as Exhibit D);
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<PAGE> 16
(j) Homestead Insurance Proceeds. The insurance proceeds
paid or payable by reason of damage to the Real Property located in
Homestead, Florida caused by Hurricane Andrew;
(k) Trade Name, Trademarks, etc. Except for the limited
license granted pursuant to Exhibit B, all trade names, trademarks,
service marks, logos, symbols or other rights with respect to the
names "Asgrow," "Asgrow Florida," "Asgrow Seed" or "Upjohn," any
variation thereof or any name or mark similar thereto or any trade
dress or trade style used by the Seller in connection therewith;
(l) Third Party Information. All information and
materials the Seller received from any third party subject to
confidentiality restrictions unless any required consent to assignment
has been obtained;
(m) Prepaid Expenses. Prepaid expenses not assignable to
the Buyer, including, without limitation, prepaid insurance premiums;
(n) Tax Refunds. Refunds pertaining to income tax
obligations of the Seller;
(o) Combined Information. Any documents containing
information about the Seller's business or the Purchased Assets which
is combined or consolidated with other information of Upjohn or the
Seller (provided that the Seller shall copy portions of such
information for the Buyer to the extent requested by the Buyer after
the Closing);
(p) Internal Documents. Any documents prepared by the
Seller or Upjohn for the purpose of informing any of their management
about the sale of the Purchased Assets and the other transactions
contemplated herein;
(q) Privileged Communications. All privileged
communications, oral or written, between any of the officers,
directors or employees of Seller or Upjohn and any of the Seller's or
Upjohn's attorneys (whether in-house or outside counsel), on any
subject whatsoever regarding the Purchased Assets or the Seller's
business and all attorney work product on any subject whatsoever
regarding the Purchased Assets or the Seller's business. If any
documents are inadvertently transferred to the Buyer which contain
such privileged communications or attorney work product, the Buyer
shall immediately return such documents to the Seller upon discovery
and such inadvertent disclosure shall not be deemed to be a waiver of
the attorney-client privilege or work product doctrine; and
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<PAGE> 17
(r) Contracts not Assigned. All rights of the Seller in,
to and under those leases, purchase orders, contracts and other
agreements not being assigned to the Buyer pursuant to Section 1.02.
ARTICLE II
PURCHASE PRICE; POST-CLOSING ADJUSTMENT; ALLOCATIONS
Section 2.01 Cash at Closing. In consideration of the sale and
purchase contemplated herein, the Buyer agrees at the Closing (a) to pay the
Seller the cash sum of Thirty One Million Dollars ($31,000,000) by means of a
wire transfer of such funds to a bank account to be designated in writing by
the Seller prior to Closing, and (b) to assume and discharge the Seller's
obligations and liabilities with respect to the Assumed Obligations as they
come due.
Section 2.02 Post-Closing Price Adjustment. The cash portion of
the purchase price has been established based on the assumption that as of the
close of business on December 31, 1993 (hereafter referred to as the "Effective
Time") the Inventory, Supplies, Accounts Receivable, and Seller's Prepayments
(hereafter referred to as the "Acquired Current Assets") will exceed the
Assumed Current Liabilities by Twelve Million Four Hundred Sixty-Six Thousand
Dollars ($12,466,000) (hereafter referred to as the "Baseline Working
Capital"). After the Closing, the cash portion of the purchase price shall be
adjusted to account for any variation in the difference between the Baseline
Working Capital and the Acquired Working Capital (defined below) as of the
Effective Time. For example, if the Acquired Working Capital is less than the
Baseline Working Capital, the Seller shall refund the difference to the Buyer
in immediately available funds and if the Acquired Working Capital exceeds the
Baseline Working Capital, the Buyer shall pay the difference to the Seller in
immediately available funds. The "Acquired Working Capital" shall be the
difference at the Effective Time between (i) the sum of the Acquired Current
Assets and (ii) the sum of the Assumed Current Liabilities. The procedure for
determining and paying the post-closing price adjustment shall be as follows:
(a) Joint Inventory. The Buyer and the Seller shall
conduct a joint physical inventory count of the Inventory (hereafter
referred to as the "Joint Inventory") as of the Effective Time. The
Joint Inventory shall be conducted using comprehensive count
procedures and shall be valued at the lower of cost or market using
the first-in, first-out ("FIFO") cost method.
(b) Initial Closing Balance Sheet. Within ninety (90)
days after the Closing, the Buyer shall deliver to the Seller a
pro-forma balance sheet as of the Effective Time prepared in
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accordance with the generally accepted accounting principles
consistently applied (hereafter referred to as "GAAP") followed in the
preparation of the Seller's interim unaudited June 30, 1993 pro-forma
balance sheet attached hereto and incorporated herein by reference as
Exhibit E, reflecting only the Purchased Assets and the Assumed
Current Liabilities (hereafter referred to as the "Initial Closing
Balance Sheet"). The Buyer shall simultaneously deliver to the Seller
an itemized schedule of all the Assumed Current Liabilities, Customer
Deposits and Seller's Prepayments included in the Initial Closing
Balance Sheet. The Initial Closing Balance Sheet shall value the
Inventory in the manner set forth in subsection (a) above and the
Supplies at the lower of cost or market regardless of whether that
approach was used in prior periods and shall reflect a reserve for bad
debts determined in accordance with Section 2.03(a).
(c) Seller's Review of Initial Closing Balance Sheet.
The Seller shall have thirty (30) days after its receipt of the
Initial Closing Balance Sheet to review the results thereof. During
the period, the Buyer shall provide any information and supporting
documents relating to the Initial Closing Balance Sheet and the
Assumed Current Liabilities, Customer Deposits and Seller's
Prepayments reasonably requested by the Seller to determine its
accuracy. Any objections the Seller may have to the amount of the
Acquired Working Capital reflected in the Initial Closing Balance
Sheet (including any additions or changes to the Assumed Current
Liabilities, Customer Deposits and Seller's Prepayments incorporated
therein) shall be communicated by a written notice of objections
delivered to the Buyer within such thirty (30) day period. The notice
shall set forth the specific grounds for each objection and enclose
all available supporting data. In the event the Seller fails to
provide notice of objections to the Buyer within the thirty (30) day
period, the determinations of the Acquired Working Capital set forth
in the Initial Closing Balance Sheet shall be deemed final and binding
on all parties to this Agreement. The Initial Closing Balance Sheet,
as prepared by the Buyer if the Seller does not provide notice of
objections to the Buyer within the thirty (30) day period, or if
objections are received, as determined in accordance with the
procedures set forth in Section 2.02(d) or (e) below, is herein
referred to as the "Final Closing Balance Sheet."
(d) Buyer's Review of Seller's Objections. In the event
the Seller delivers a notice of objections to the Initial Closing
Balance Sheet to the Buyer within the thirty (30) day period set forth
in subsection (c) above, the Buyer shall have an additional thirty
(30) days to review the Seller's objections. During this period, the
Buyer and the Seller shall use their best efforts to mutually agree on
the amount
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of the Acquired Working Capital. Any such written agreement shall be
final and binding on all parties to this Agreement.
(e) Final Determination by Accounting Firm. In the event
the Seller objects to the Initial Closing Balance Sheet and the
parties are unable to resolve their differences within the thirty (30)
day period provided in subsection (d) above, the Buyer and the Seller
shall jointly select a nationally recognized certified public
accounting firm that has no business or professional relationship to
either party or their affiliates to determine the Final Closing
Balance Sheet, including the amount of the Acquired Working Capital.
In the event the Buyer and the Seller are unable to jointly select an
accounting firm within ten (10) days after the thirty (30) day period
set forth in (d) above has elapsed, the parties shall jointly
request the Chief Judge of the Hillsborough County, Florida Circuit
Court to appoint an accounting firm satisfying the foregoing
qualifications to make such determination. The accounting firm
selected in the manner set forth above shall be required to render its
determination within thirty (30) days after such appointment. During
this period, the Buyer and the Seller shall cooperate with such
accounting firm by providing access to or copies of all books and
records it reasonably requests. The determination of Acquired Working
Capital rendered by such accounting firm shall be final and binding on
all parties to this Agreement.
(f) Procedure for Payment of Adjustment. The amount of
the post-closing price adjustment finally established to be due the
Buyer or the Seller based on the Final Closing Balance Sheet
determined in accordance with the procedures set forth in subsections
(a)-(e) above shall be paid in immediately available funds within five
(5) Business Days following the final determination, together with
interest from and after the Closing Date at a floating rate equal to
the prime rate announced from time to time by Citibank, N.A., New
York, New York, as its prime rate. Such payment shall be made by wire
transfer to an account designated by the party entitled to the
payment.
Section 2.03 Reserves for Bad Debts. The reserves for bad debts
used in the Closing Balance Sheet shall equal $400,000, plus the balances
outstanding at the Effective Time on the accounts listed in Schedule 2.03(a).
Section 2.04 Allocation of Purchase Price. At or prior to the
Closing, the Buyer and the Seller shall execute a written instrument in the
form of Exhibit C setting forth by asset category and amount the mutually
agreed allocation of the consideration being paid by the Buyer for the
Purchased Assets. Exhibit C shall include specific allocations for each parcel
of Real Estate and each titled motor vehicle (including trailers). The sums
allocated
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to the Acquired Current Assets shall subsequently be modified to conform to the
Closing Balance Sheet which serves as the basis for any post-closing adjustment
in the purchase price. Each party agrees to report the purchase and sale
contemplated herein on Internal Revenue Service Form 8594 and for all other
federal and state tax purposes in accordance with such allocation.
ARTICLE III
TITLE INSURANCE AND RELATED MATTERS
Section 3.01 Title Insurance. Not less than two (2) Business Days
prior to the Closing Date, the Seller, at its expense, shall furnish to the
Buyer a commitment together with legible copies of all documents pertaining to
any exceptions therein (hereafter referred to as the "Commitment"), for an
owner's title insurance policy issued by First American Title Insurance Company
(hereafter referred to as the "Title Company"). The Seller's counsel will act
as the title agent for the Title Company. Upon request, Seller's counsel shall
provide written confirmation from the Title Company of its authority as agent.
The Commitment shall commit to provide to the Buyer a single ALTA title
insurance owner's policy (current Florida form), (hereafter referred to as the
"Title Policy"), in the amount of the purchase price allocated to the Real
Property, insuring the Buyer's title to the Real Property to be marketable and
free of all Encumbrances and other matters, except for (a) the exceptions set
forth in Schedule 3.01(a) attached hereto and incorporated herein by reference
(hereafter referred to as the "Permitted Exceptions"), and (b) those matters
that do not constitute Title Defects as defined in Section 3.03. The initial
Commitment may be subject to exceptions for: (i) real property ad valorem
taxes and assessments for the calendar year during which the Closing occurs,
(ii) unfiled mechanics' liens, (iii) survey, (iv) unrecorded easements, (v)
rights of parties in possession and (vi) those matters created or first
appearing in the Public Records or attaching subsequent to the effective date
of the Commitment but prior to the date the Buyer acquires the Real Property.
The Seller shall pay the 1993 ad valorem taxes on the Real Property prior to
the Closing. Subject to compliance with the provisions of Sections 3.02 and
3.03 of this Agreement, the exceptions referred to in paragraphs (i) through
(vi) above shall be deleted from the Commitment at the Closing and will not
appear in the Title Policy.
Section 3.02 Surveys. The Seller shall, at the Seller's expense,
obtain current surveys of the Real Property (the "Surveys") not less than two
(2) Business Days prior to the Closing Date. Two prints of the Surveys shall
be promptly delivered to the Buyer. The Surveys shall be certified to the
Buyer, the Title Company, and the Seller's counsel, and shall clearly set forth
the bearings and dimensions of all boundary lines as well as the dimensions and
locations of all improvements, streets, accesses,
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easements, encroachments and setbacks and shall otherwise meet the minimum
technical requirements of the Florida Statutes and the Florida Administrative
Code. When the Seller obtains the Surveys, the exceptions described in
Sections 3.01(iii) and (iv) above will be deleted from the Commitment at the
Closing and will not appear in the Title Policy when issued. At the Buyer's
option the legal description of the Real Property as determined by the Surveys
shall be used in the deeds, the Commitment and the Title Policy.
Section 3.03 Title Defects and Remedies. The term "Title Defect"
means any Encumbrance, restriction, reservation, easement, matter disclosed by
the Survey, or any other matter which would in the Buyer's reasonable
discretion cause the title to be unmarketable under the Uniform Title Standards
adopted by the Florida Bar and applicable law. The Buyer shall have one (1)
Business Day after receipt of the Commitment (including any endorsement
thereto), and all of the Surveys, to give the Seller notice of any Title
Defect. The Seller shall have thirty (30) days after the date of such notice
(hereafter referred to as the "Cure Period") in which to cure such Title Defect
and furnish to the Buyer evidence that such Title Defect has been cured.
Seller shall exercise reasonable efforts, at the Seller's sole expense to cure
all Title Defects but Seller shall not be required to initiate any legal
proceedings to cure any Title Defect. If the Seller fails or is unable to cure
any Title Defect within the applicable Cure Period, the Buyer shall have the
option, to be exercised by giving the Seller notice within one (1) Business Day
after the end of such Cure Period, either to complete the purchase of the
Purchased Assets without reduction in the purchase price and accept title to
the Real Property subject to any uncured Title Defects or to terminate this
Agreement. If the Buyer elects to complete such purchase, the Title Policy and
closing documents shall reflect the uncured Title Defects accepted by the Buyer
as being Permitted Exceptions. If the Closing Date is extended because of the
provisions of this Section, then the Closing shall take place on or before the
tenth day after: (i) the date any and all Title Defects have been cured; or
(ii) the Buyer's election to complete the purchase of the Purchased Assets
subject to any uncured Title Defects.
ARTICLE IV
CLOSING; DOCUMENTS OF CONVEYANCE
Section 4.01 Closing. Subject to the satisfaction of the
conditions set forth in Section 3.03 and Articles IX and X, the purchase and
sale contemplated hereby shall be consummated at a closing (referred to herein
as the "Closing") to be held at the offices of Shackleford, Farrior, Stallings
& Evans, P.A., 501 E. Kennedy Boulevard, Tampa, Florida, starting at 9:00 a.m.
local time on December 31, 1993, or at such earlier or later date or time as
the parties may mutually agree. The date the Closing occurs is
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referred to herein as the "Closing Date". The purchase and sale shall be
deemed effective for all purposes as of the Effective Time.
Section 4.02 Conveyance of Real Property.
(a) Delivery of Special Warranty Deeds. At the Closing,
the Seller shall deliver to the Title Company or its agent the
following instruments, each in form and content reasonably acceptable
to counsel for the Buyer and the Seller:
(i) special warranty deeds conveying the Real
Property;
(ii) the Seller's affidavit with respect to
ownership, possession and the absence of mechanics' liens or
other Encumbrances, which shall be sufficient to remove the
standard exceptions in the Commitment (in no less than two (2)
duplicate originals);
(iii) the Seller's "FIRPTA" affidavit in accordance
with Section 1445 of the Internal Revenue Code of 1986, as
amended; and
(iv) the Seller's closing statement and such other
documents or affidavits as may be required to obtain the Title
Policy free and clear of all Encumbrances other than the
Permitted Exceptions;
(b) Recording Deeds and Delivery of Endorsement to
Commitment.
(i) Immediately following the delivery of the
instruments described in subsection (a) above, the special
warranty deeds and such documents, if any, deposited by the
Seller to clear title shall be recorded
(ii) At the Closing, the Title Company, or its
agent, shall acknowledge in writing receipt of those
instruments described in subsection (a) above, the special
warranty deeds and such documents, if any, deposited by the
Seller to clear title and shall issue and deliver to the Buyer
an endorsement to the Commitment confirming the following:
(1) that all requirements in the Commitment (including any
endorsement thereto), have been satisfied; (2) the amount of
the Title Policy to be issued; (3) the deletion of the
standard exceptions, including, but not limited to, the
exception for those matters first appearing in the public
records or attaching subsequent to the effective date of the
Commitment but prior to the date of recording of the deeds and
other documents referred to herein; and (4) the
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deletion of all other exceptions to title with the exception
of the Permitted Exceptions.
(iii) Promptly after the recording of the instruments
referred to in subsection (a) above and in no event later than
January 28, 1994, the Title Company shall deliver to the Buyer
the Title Policy, issued in accordance with the terms of the
Commitment, as endorsed as of the Closing..
Section 4.03 Assignment and Assumption Agreements. At the
Closing, the Buyer and the Seller shall execute and deliver to each other
instruments of assignment and assumption, in form and content reasonably
acceptable to counsel for the Buyer and the Seller, pursuant to which the
Seller shall assign the Assumed Leases, the Assumed Contracts, and the Assumed
Purchase Orders to the Buyer and the Buyer shall assume all such obligations,
together with the Assumed Current Liabilities and the Customer Deposits as
described in Section 1.02. The instruments of assignment and assumption are
hereafter collectively referred to as the "Assignment and Assumption
Agreements." With respect to the Assumed Leases, the Seller shall also deliver
to the Buyer copies of the landlord consents to the assignment of such leases
to the Buyer and such landlord estoppel certificates and non-disturbance
agreements as the Buyer may reasonably request.
Section 4.04 Other Instruments of Conveyance. At the Closing, the
Seller shall execute and deliver to the Buyer the following instruments of
conveyance (hereafter referred to as the "Other Instruments of Conveyance"):
(a) A bill of sale conveying the Fixed Assets (including
all manufacturers' and other warranties relating thereto) and
Inventory described in Section 1.01(b) and (c) to the Buyer.
(b) Certificates of title relating to the titled rolling
stock, duly endorsed for transfer to the Buyer;
(c) Assignments in recordable form of the FIFRA product
label registrations described in Section 1.01(i);
(d) Assignment of all other Purchased Assets (including
without limitation the Seller's Prepayments); and
(e) Such other instruments as may be reasonably requested
by the Buyer to convey the Purchased Assets or any part thereto to the
Buyer or to transfer any Florida Department of Environmental
Protection Permits or other Permits to the Buyer.
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All Other Instruments of Conveyance shall be free of all Encumbrances and shall
be in form and content reasonably acceptable to counsel for the Buyer and the
Seller.
Section 4.05 Other Deliveries at Closing. At the Closing, in
addition to the instruments described in Sections 4.02- 4.04, the following
deliveries shall be made:
(a) The Seller shall deliver to Buyer (i) the endorsement
to the Commitment (as described in Section 4.02(b)), (ii) a true copy
of the Seller's Blanket Certificate of Resale issued by the Florida
Department of Revenue, and (iii) all certificates and opinions
required by Article IX, except such as may be expressly waived in
writing by the Buyer;
(b) The Buyer shall deliver to the Seller (i) the cash
purchase price as set forth in Section 2.01 and (ii) all certificates
and opinions required by Article X, except such as may be expressly
waived in writing by Seller;
(c) Asgrow Seed Company and the Buyer shall execute and
deliver to each other a distributor agreement in the form of Exhibit A
attached hereto and incorporated herein by reference under which the
Buyer shall become a distributor in Florida for seeds for a term of
three (3) years from and after the Closing Date;
(d) Asgrow Seed Company and the Buyer shall execute and
deliver to each other the Asgrow License Agreement in the form of
Exhibit B attached hereto and incorporated herein by reference; and
(e) Asgrow Seed Company and the Buyer shall execute and
deliver to each other the Seed Purchase Agreement in the form attached
hereto as Exhibit D.
(f) Such other deliveries as may be required by the
provisions of Section 4.12.
Section 4.06 Allocation of Closing Costs. At or after the
Closing, the Seller shall pay in a timely manner (a) all recording costs to
clear Seller's title and documentary stamp taxes relating to the special
warranty deeds to be delivered pursuant to Section 4.04(a); (b) all premiums
and other costs relating to the issuance of the Title Policy; and (c) all taxes
and transfer fees relating to the transfer of the Purchased Assets to the
Buyer, including without limitation the transfer of the certificates of title
described in Section 4.04(c) and, as applicable, the issuance of new license
tags for the rolling stock. Except as provided in clauses (a) - (c) of this
Section 4.06, each party shall be
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responsible for and bear all of its own transactional costs and charges
relating to the purchase and sale contemplated herein.
Section 4.07 Prorations at Closing. All ad valorem taxes and
assessments relating to the Purchased Assets for the 1993 calendar year shall
be paid by the Seller prior to the Closing and all compensation (including
vacation and sick pay accruals, as applicable), payroll and withholding taxes
relating to the Seller's employees through the date of their termination shall
be paid by the Seller when due. All other operating expenses and liabilities
relating to the ownership and operation of the Purchased Assets attributable to
the period ending at the Effective Time which are not Assumed Current
Liabilities shall be paid by the Seller as they fall due. The Assumed Current
Liabilities and all operating and other expenses relating to the ownership and
operation of the Purchased Assets attributable to periods commencing on and
after the Effective Time shall be the sole responsibility of the Buyer.
Section 4.08 Transfer of Possession. Simultaneously with the
Effective Time, the Seller shall give the Buyer full possession and enjoyment
of the Purchased Assets.
Section 4.09 Termination and Related Employee Matters.
Simultaneous with the Effective Time, the Seller shall terminate all of its
employees that it no longer intends to employ and as of January 1, 1994 the
Buyer shall employ such of the terminated employees as it determines in its
sole discretion. Employees of the Seller hired by the Buyer shall be entitled
to participate in the Buyer's pension plan in accordance with the terms thereof
as new employees with no past service credit, except that for purposes of
determining vesting and retirement eligibility such employees shall receive
credit for the period of their employment by the Seller. In determining
eligibility for all other fringe benefits offered by the Buyer, employees of
the Seller hired by the Buyer shall be entitled to service credit for the
period they were employed by the Seller. The Seller will pay severance
benefits to its terminated employees who are not hired by the Buyer in
accordance with the Separation Pay Plan appended hereto as Schedule 4.09 and
incorporated by reference herein, and upon receipt of an itemized accounting
thereof the Buyer shall promptly reimburse the Seller for all such severance
benefits paid by the Seller. The Buyer shall pay severance benefits in
accordance with Schedule 4.09 to the Seller's employees that are hired by the
Buyer and subsequently terminated without cause within twelve (12) months
following the Closing. Severance benefits paid and/or reimbursed in the manner
described in this Section 4.09 shall not be treated as Assumed Current
Liabilities. If Cecil D. Kent is employed by the Buyer on October 19, 1994,
his service date will be adjusted to September 9,1988 to recognize all previous
service with Seller. After October 19, 1994, this date will be used for
determining his fringe benefits under the Buyer's fringe benefit plans. If
Daniel A. Barnes is transferred to a regular status during his employment
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with the Buyer, his service date will be adjusted to include three (3) years
and eight (8) months of previous service with Seller and this date will be used
for determining his fringe benefits under the Buyer's fringe benefit plans.
Section 4.10 Utility Services. On the Closing Date or as soon
thereafter as practicable, the Seller and the Buyer will cooperate with each
other to arrange to disconnect or obtain final readings with respect to all
electricity, water, telephone, and other utilities serving the Real Property
and, unless such services are in the name of the landlord, the real property
that is the subject of the Assumed Leases, and to have such services
reconnected in or otherwise transferred to the Buyer's name immediately
thereafter. All fees and charges associated therewith and all unpaid utility
charges accrued through the Effective Time shall be an Assumed Current
Liability subject to the post-closing price adjustment set forth in Section
2.02.
Section 4.11 Procedure Relating to Motor Vehicles. At the
Closing, the Buyer and the Seller shall execute an affidavit prepared by the
Seller for use in transferring the certificates of title to the titled motor
vehicles (and trailers) included in the Purchased Assets. The affidavit shall
identify each such motor vehicle by year, make, model and vehicle
identification number and shall set forth the current odometer readings and the
purchase price that the parties have mutually agreed to allocate to each such
motor vehicle. The sum allocated to each motor vehicle shall not be less than
80 percent of the average loan value as reported in the current NADA Used Car
Guide (or another nationally recognized pricing guide with respect to vehicles
not listed in the NADA Used Car Guide). Immediately following the Closing, the
Buyer shall present the affidavit, together with the original certificates of
title, HSMV Forms 8204 (Application for Certificate of Title and/or Vehicle
Registration) and proof of insurance (i.e., an insurance certificate or binder)
to the Florida Department of Motor Vehicles to secure new certificates of title
and registrations/license tags in the Buyer's name. To facilitate preparation
of the HSMV Forms 8204 prior to the Closing, the Seller shall furnish copies of
the affidavit and certificates of title to the Buyer at least five (5) Business
Days prior to the Closing Date.
Section 4.12 Other Actions and Instruments. The Buyer and the
Seller shall take such other actions and shall execute and deliver such other
instruments, documents and certificates at the Closing as are required by the
terms of this Agreement or as may be reasonably requested by the Buyer or the
Seller in connection with the Closing of the transactions contemplated by this
Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Seller and Upjohn as
follows:
Section 5.01 Organization and Good Standing. The Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.
Section 5.02 Corporate Power and Authority. The Buyer has the
requisite corporate power and authority to execute, deliver and perform its
obligations under and pursuant to this Agreement, including without limitation,
the requisite corporate power and authority to acquire the Purchased Assets and
assume the Assumed Obligations upon the terms and conditions set forth herein.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Buyer. This Agreement has been duly
executed and is a legal, valid and binding obligation of the Buyer, enforceable
in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally.
Section 5.03 Validity of Contemplated Transactions. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby do not and will not (i) contravene any
provision of the Certificate of Incorporation or Bylaws of the Buyer, (ii)
violate, be in conflict with, constitute a default under, result in the
termination of, cause the acceleration of any payments pursuant to, or
otherwise impair the good standing, validity, and effectiveness of any
agreement, contract, commitment, indenture, lease or mortgage applicable to the
Buyer, (iii) violate any provision of law, rule, regulation, order, license,
permit, authorization, or approval to which the Buyer is subject, or (iv)
violate any judgment, order, writ, prohibition, injunction or decree of any
court, governmental body or arbitrator by which the Buyer is bound, except
where such breach of conflict would not, individually or in the aggregate, have
a material adverse effect on the Buyer.
Section 5.04 Regulatory Approvals. All consents, waivers,
approvals, authorization or exemptions from governmental entities and other
third parties and other requirements prescribed by any law, rule or regulation
which must be obtained or satisfied by law, rule or regulation which must be
obtained or satisfied by the Buyer in order to permit the consummation of the
transactions contemplated by this Agreement have been obtained and satisfied or
will be obtained and satisfied prior to the Closing.
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Section 5.05 Inventory Held for Resale. The Buyer intends to hold
the Inventory for resale to customers and for no other purpose.
Section 5.06 Veracity of Statements. No representation or
warranty made by the Buyer which is contained in this Agreement or in any
document, statement, certificate, schedule, exhibit or instrument furnished or
to be furnished to the Seller or Upjohn pursuant hereto, or in connection with
the transactions contemplated hereby, contains or will contain an untrue
statement of a material fact or omits or will omit to state material fact
required to be stated therein or necessary to make the statements and facts
contained therein in light of the circumstances in which they were or are made,
not false or misleading, except where any such untrue statement or omission
would not, individually or in the aggregate, have a material adverse effect on
the Seller or Upjohn.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND UPJOHN
Each of the Seller and Upjohn represent and warrant, jointly and
severally, and, where applicable, covenant as follows:
Section 6.01 Organization, Good Standing and Qualification. Each
of the Seller and Upjohn is a corporation duly organized, validly existing, and
in good standing under the laws of their respective states of incorporation.
The Seller is duly qualified to do business and is in good standing in each and
every jurisdiction where the failure to qualify or to be in good standing would
have a material adverse effect upon its financial condition, the conduct of its
business or the ownership of the Purchased Assets.
Section 6.02 Corporate Power and Authority. Each of the Seller
and Upjohn has the requisite corporate power and authority to execute, deliver
and perform their obligations under and pursuant to this Agreement. The Seller
has the requisite corporate power and authority to sell, transfer, assign,
convey and deliver to the Buyer at Closing, the Purchased Assets, free and
clear of all Encumbrances other than Permitted Exceptions, and, subject to
obtaining all requisite third party consents thereto, to assign the Assumed
Leases, the Assumed Contracts and the Assumed Purchase Orders to the Buyer at
Closing. The Seller has the requisite corporate power and authority to carry
on its business operations as they are now being conducted and to own and
operate the Purchased Assets. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Seller and
Upjohn. This Agreement has been duly executed and is a legal, valid and
binding obligation of both the Seller and Upjohn, enforceable in accordance
with its terms, except as such
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enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
Section 6.03 Validity of Contemplated Transactions. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby do not and will not (i) contravene any
provision of the Articles or Certificate of Incorporation or Bylaws of the
Seller or Upjohn, (ii) violate, be in conflict with, or constitute a default
under, result in the termination of, cause the acceleration of any payments
pursuant to, or otherwise impair the good standing, validity, or effectiveness
of any material agreement, contract, commitment, indenture, lease or mortgage,
to which the Seller is a party or by which the Purchased Assets are bound,
(iii) violate any provision of law, including without limitation, all
applicable securities laws, rules regulations, orders, permits, licenses,
authorizations or approvals to which the Seller or Upjohn is subject or (iv)
violate any judgment, order, writ, prohibition, injunction or decree of any
court or other governmental body of competent jurisdiction or arbitrator by
which either the Seller or Upjohn is bound, except where such breach or
conflict would not, individually or in the aggregate, have a material adverse
effect on the Seller or Upjohn and except to the extent the consent of third
parties may be required in connection with the assignment of the Assumed
Leases, the Assumed Contracts and/or the Assumed Purchase Orders.
Section 6.04 Regulatory Approvals. All material consents,
waivers, approvals, authorization or exemptions from governmental entities and
other third parties and other material requirements prescribed by any law, rule
or regulation which must be obtained or satisfied by the Seller or Upjohn
(including without limitation, the Federal Trade Commission and the United
States Department of Justice) in order to permit the consummation of the
transactions contemplated by this Agreement have been obtained or satisfied or
will be obtained or satisfied prior to the Closing.
Section 6.05 Copies of Articles and Bylaws. The copy of the
Seller's Certificate or Articles of Incorporation and Bylaws (the completeness
and accuracy of which has been certified by an authorized officer of the
Seller) which have been delivered to the Buyer are true, complete and correct
in full force and effect as of the date hereof and will be in effect on the
Closing Date.
Section 6.06 Liabilities and Obligations of Seller. The Seller
and Upjohn understand and acknowledge that the Buyer is not assuming any
liabilities or obligations of the Seller other than the Assumed Obligations
expressly set forth in Section 1.02.
Section 6.07 Title to Non-Real Property Assets. At Closing, the
Seller will have good title to all of the Purchased Assets
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described in Section 1.01(b)-(o), free and clear of all Encumbrances, other
than Permitted Exceptions. All other Encumbrances will be paid, satisfied or
removed on or prior to the Closing Date. Notwithstanding the foregoing, Asgrow
Seed Company shall also continue to own the Customer Lists and may use the
Customer Lists in its business, subject only to its obligations under the
Limited Joinder to this Agreement.
Section 6.08 Assumed Leases and Contracts. Subject to receipt of
all necessary third party consents, at the Closing, the Buyer will receive the
Seller's entire right, title and interest in the Assumed Leases and the Assumed
Contracts, free and clear of all Encumbrances and restrictions other than
Permitted Exceptions and those expressly stated in such leases and contracts.
Each of the Assumed Leases and Assumed Contracts is valid, binding, in full
force and effect, and enforceable by or against Seller in accordance with their
respective terms and conditions, and with respect only to the Seller's
obligations, there is no existing default thereunder or breach thereof or
condition which, with the passage of time or notice or both, might constitute
such a default by Seller. There has been no termination or, to Seller or
Upjohn's knowledge, threatened termination or notice of default relating to any
such lease or contract. Prior to the Closing, the Seller will use its best
efforts to obtain all necessary consents to the assignment of the Assumed
Leases to the Buyer at the Closing.
Section 6.09 Fixed Assets and Structures. Except as set forth in
Schedule 6.09 attached hereto and incorporated herein by reference: (a) on
the Closing Date the Fixed Assets and the buildings, structures and other
improvements constituting part of the Real Property (collectively the
"Structures") will be in a good state of repair and operating condition,
reasonable wear and tear excepted; (b) to the knowledge of the Seller and
Upjohn, neither the Fixed Assets nor the Structures contain any latent defects;
(c) to the knowledge of the Seller and Upjohn, all of the Structures (including
all structures which are the subject of the Assumed Leases) comply in all
material respects with all applicable building, fire, and other applicable
laws, codes and regulations; and (d) the lists of Fixed Assets set forth in
Schedule 1.01(b) include all fixed assets used in the Seller's business
operations other than the leasehold improvements located at the Excluded
Facilities. Notwithstanding clause (c) above, the Seller expressly disclaims
any warranties regarding compliance with the Americans With Disabilities Act or
any similar state laws or regulations. Except as set forth in Schedule 6.09,
the Seller is not leasing or holding on consignment any of its Fixed Assets or
Inventory. There are no outstanding special tax assessments against any of the
Seller's Fixed Assets or Inventory.
Section 6.10 Zoning; Easements; Utilities; Contiguous Property.
Each parcel of the Real Property has the proper zoning classification for the
Seller's existing use of the Real Property.
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Except as set forth in Schedule 6.10, there are no land use laws, rules,
regulations or ordinances or modifications to zoning that restrict the use of
the Real Property as used by the Seller on the date hereof or, to the knowledge
of the Seller and Upjohn, proposed, which restrict or prevent, or would
restrict or prevent, the use of the Real Property for such use and there are no
existing easements, rights-of-way, or restrictions affecting the Real Prop-erty
which could adversely affect or prohibit the use of the Real Property as
presently used by the Seller. The electric, natural gas, water, sewer,
telephone and other utility service to the Real Property is adequate for the
existing operation and use of the Real Property. Except for the Excluded
Facilities, the Seller does not own any real property adjacent or contiguous to
the Real Property, nor does it own or lease any real property adjacent or
contiguous to the real property which is the subject of the Assumed Leases and
there are no other parcels of real property used or utilized by the Seller
either for drainage, water retention, access or otherwise in connection with
its use and operation of the Real Property or the real property which is the
subject of the Assumed Leases.
Section 6.11 Financial Statements. The Seller's financial
statements consisting of (a) an unaudited balance sheet of the Seller prepared
as of November 30, 1992 and November 30, 1991 and (b) an unaudited income
statement of the Seller for each such period then ended are attached hereto as
Schedule 6.11 and incorporated herein by reference (such balance sheets and
income statements being referred to herein collectively as the "Seller's
Financial Statements"). November 30, 1992 is hereafter referred to as the
"Financial Statement Date." The Seller's Financial Statements were prepared in
a consistent manner from the applicable books and records of the Seller and,
except with respect to contingent environmental liabilities,were prepared in
conformity with standards consistently applied during the related periods and
in all material respects present fairly the financial condition of the Seller
on the last day of and the results of operations for the respective periods
ended on such dates. Since the Financial Statement Date, there has been no
material adverse change in the financial condition of the Seller.
Section 6.12 Certain Tax Matters. The Seller has duly filed all
federal, state, and local tax returns and reports required to be filed by it
and all taxes, including without limitation, including income, gross receipt,
payroll, withholding, sales, use and other taxes and any penalties with respect
thereto, due and payable, have been paid, withheld or reserved. The
consolidated federal income tax return of Upjohn has been audited by the
Internal Revenue Service through calendar year 1987. Upjohn has no reason to
believe that such audit or previous audits will adversely affect the Buyer or
the Purchased Assets. With regard to the Seller, neither Upjohn or the Seller
has (i) entered into any agreements for the extension of time or for the
assessment of any tax or tax delinquency which would adversely affect the Buyer
or
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the Purchased Assets or (ii) received any outstanding or unresolved notices
from the Internal Revenue Service or any taxing body of any proposed deficiency
or assessment. The Seller has properly paid all sales and use taxes due with
respect to its business operations and withheld all amounts, if any, required
by law to be withheld for income taxes and unemployment taxes, including
without limitation, social security and unemployment compensation, relating to
its employees, and remitted such withheld amounts to the appropriate taxing
authority.
Section 6.13 Ad Valorem Tax Matters. There are no taxes, fees, or
assessments of any kind or nature whatsoever which are presently due or, to the
knowledge of the Seller and Upjohn, which will or may become due with respect
to the Purchased Assets, except for ad valorem real and tangible personal
property taxes for the current calendar year which have been paid or will be
paid by the Seller prior to the Closing. Except as reflected on the ad valorem
real property tax bill for the Real Property with respect to 1993, copies of
which have been furnished to the Buyer, neither the Real Property, nor any
portion thereof, is within a "special assessment district" and, to the
knowledge of the Seller and Upjohn, no application has been made or submitted
by anyone for the creation thereof or annexation thereby which affects or may
affect the Real Property. The Real Property is not currently benefitted by any
special tax abatement or categorization.
Section 6.14 Litigation; Compliance with Laws. Except as set
forth in Schedule 6.14 attached hereto and incorporated herein by reference,
(a) there is no material suit, action, claim, investigation, arbitration,
administrative or legal or other proceeding or governmental investigation
pending or, to the Seller's or Upjohn's knowledge, threatened against or
related to the Seller, nor (b) have the Seller or Upjohn failed to materially
comply with any law, including without limitation all material ordinances,
requirements, regulations, or orders applicable to the Seller, (c) nor have
Upjohn or the Seller materially violated any order, writ, injunction, judgment,
or decree of any court or federal, state or local department, official,
commission, authority, board, bureau, agency, or other instrumentality which
was issued or is pending against the Seller, which might have a material
adverse effect on: (i) the financial condition, business or results of
operations of the Seller, or, the Purchased Assets or the business of the
Seller or (ii) the Buyer's purchase or ownership of the Purchased Assets.
Except as set forth in Schedule 6.14, to the knowledge of the Seller or Upjohn,
there has been no occurrence which could give rise to any material claim,
action, suit or proceeding against the Seller alleging that any products sold
or shipped by the Seller caused personal injury to any Person or damage to any
property, and there is no material action, condemnation, or proposal for public
improvement, assessment, paving agreement, road expansion or improvement
agreement, utility moratorium, use moratorium, improvement moratorium, rental
increase
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moratorium, rent rollback, rent control, or legal, administrative, or other
proceeding or governmental investigation or requirement, formal or informal,
pending or, to the knowledge of Seller or Upjohn, threatened which has a
material adverse effect on the Real Property or its use as presently utilized
by the Seller, or which has a material adverse effect on the Seller's ability
to perform hereunder, or imposes a lien or other charge or expense upon or
related to any of the Purchased Assets.
Section 6.15 Permits and Licenses. All permits (including without
limitation Florida DER permits), licenses, certificates, zoning variances,
approvals, repackaging agreements or related licenses, and other authorizations
(hereafter referred to as the "Permits") necessary for the complete operation
of the Seller's business as it is presently operated, have been obtained and
are in full force and effect, except for Permits which if not in full force and
effect would not have a material adverse effect on the Purchased Assets. All
of the Permits as they relate to the Seller are listed on Schedule 6.15,
attached hereto and incorporated herein by reference. All Permits are
presently valid and no revocation, cancellation or withdrawal thereof has been
effected or, to Upjohn's or the Seller's knowledge, threatened. Except as
disclosed in Schedule 6.15, the execution of this Agreement and the performance
of the transactions contemplated hereby will not alter in any material respect,
or result in the termination of any such Permits or the modification of such
federal or state Permits, so as to limit in any material manner the Buyer's
business operations.
Section 6.16 Intellectual Properties. Neither the Seller nor
Upjohn has any knowledge of any claim or reason to believe that the Seller is
or may be infringing on or otherwise acting adversely to the rights of any
person under or in respect of any proprietary rights. The Seller is not
obligated or under any liability whatsoever to make any payments by way of
royalties, fees, or otherwise to any owner or franchisor, licensor, permitter,
or easement grantor of, or other claimant to, any trademark, service mark,
trade name, trade secret, copyright, patent, or other intangible asset with
respect to the use thereof, in connection with the conduct of its business
operations.
Section 6.17 All Necessary Assets. The Purchased Assets, the
Assumed Purchase Orders the Assumed Contracts and the Assumed Leases constitute
all of the material assets, contracts and leases used in the operation of the
Seller's business other than the Excluded Assets and the assets, leases and
contracts listed in Schedule 6.17 attached hereto and incorporated herein by
reference.
Section 6.18 Labor or Employee Disputes. The Seller is not a
party to any contract or other agreement with any labor union and is not
experiencing or the subject of, or to the Seller's or Upjohn's knowledge,
threatened by, any union organization campaign or any strike, slowdown,
picketing, work stoppage, or other labor
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disturbance by any labor union or group of employees. Except as set forth in
Schedule 6.18, there are no, and there have not been any, unfair labor
complaints, strikes, walkouts, work stoppages, slow downs, material complaints
or material charges of discrimination (including without limitation, based on
age, race, gender, marital status, national origin, disability or handicap),
other material labor difficulties, or, to their knowledge, threats of any of
the foregoing, affecting Seller or any of its business operations.
Section 6.19 Inventory. Except as set forth in Schedule 6.19, the
Inventory is and at the Effective Time will be merchantable and no item of the
Inventory is or at the Effective Time will be obsolete, damaged or defective,
subject only to normal writedowns consistent with the lower of cost or market
valuation method to be utilized in the preparation of the Closing Balance
Sheet.
Section 6.20 Employee Compensation. At least one (1) Business Day
prior to the Closing Date, the Seller will deliver to the Buyer a list of all
employees of the Seller, their dates of hire, positions, base salaries and
commissions or bonus schedules, and a true, correct and complete copy of all
employment contracts with the Seller's employees and all employee manuals which
have been distributed to or otherwise apply to the Seller's employees, each of
which shall be correct in all material respects.
Section 6.21 No Changes. Except as required by this Agreement or
as disclosed in Schedule 6.21, since the Financial Statement Date, the Seller
has operated its business in the ordinary course and there has not been:
(a) Any material change in the financial or other
condition, assets, liabilities, operation or business of Seller,
except with respect to contingent environmental matters;
(b) Any damage, destruction or loss (whether or not
covered by insurance) or any condemnation by governmental authorities
which has or may materially adversely affect any of the Purchased
Assets;
(c) Any sale or transfer, or any agreement to sell or
transfer, any Purchased Asset or right of the Seller, to any Person,
including, without limitation, Upjohn or any of its affiliates or any
entity owned or controlled by Upjohn or its affiliates, except in the
ordinary course of business;
(d) Any mortgage, pledge, lien, lease, security interest
or other Encumbrance granted with respect to any of the Purchased
Assets, other than Permitted Exceptions;
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(e) Any plan, agreement or arrangement except in the
ordinary course of business (i) granting any rights to purchase or
acquire any interest in any of the Purchased Assets or the rights of
the Seller therein or (ii) requiring consent of any party, to the
transfer and conveyance of any of the Purchased Assets or rights of
the Seller; or
(f) Any amendment or termination of any contract,
agreement, license, Permit or other right to which the Seller is a
party and which would materially adversely affect the Purchased
Assets.
Section 6.22 FIRPTA Withholding. At Closing, in accordance with
Section 1445 and Section 897 of the Code, the Seller will provide to the Buyer
an affidavit certifying that the Seller is not a foreign person.
Section 6.23 No Affiliates' Assets, Leases or Contracts. Except
as set forth in Schedule 1.03(a) or in Schedule 6.23 attached hereto and
incorporated by reference, (a) none of the Purchased Assets are owned by Upjohn
or other Affiliates of the Seller, and (b) all of the Assumed Contracts and
Assumed Leases are with Persons who are not Affiliates of the Seller and were
negotiated at arms' length.
Section 6.24 Insurance Coverages. Schedule 6.24 attached hereto
and incorporated herein by reference contains a true, complete and correct
listing of all policies of fire, liability, and other forms of insurance,
including the amounts and types of coverages pursuant to which the Seller and
the Purchased Assets are insured. All of such policies shall be kept in full
force and effect until the first to occur of (a) three (3) days after the
Closing or (b) notification that the Buyer's insurance has become effective.
Section 6.25 Environmental Matters. Except as set forth in
Schedule 6.25, to Seller's and Upjohn's actual knowledge, (a) the Seller's
operations on the Real Property (which term for purposes of this Section 6.25
is defined to include all real property owned or leased by the Seller for
disposal or other purposes and all real property contaminated by the migration
of Hazardous Substances as defined in Section 11.01 therefrom) do not
materially violate and have not materially violated any of the Environmental
Control Laws (as defined in Section 11.04(e)), no portion of the Real Property
is on the federal National Priorities List (40 CFR 300, Appendix B) or state
equivalent list (hereafter referred to as "Superfund Site"), or, to the actual
knowledge of the Seller and Upjohn, has been, prior to the Seller's ownership
of the Real Property, the site of any activity that materially violated or
would materially violate, any of the Environmental Control Laws; (b) to the
actual knowledge of the Seller and Upjohn, no Hazardous Substances have been
handled, stored, recycled, or disposed of or leaked or spilled
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on, or have otherwise contaminated the Real Property (as defined in this
Section 6.25) such as would give rise to a cleanup or remediation obligation
under any of the Environmental Control Laws and, to the actual knowledge of the
Seller or Upjohn, no clean up or remediation obligation has been threatened;
(c) to the actual knowledge of the Seller and Upjohn, the improvements on the
Real Property contain no asbestos-containing materials; (d) none of the Real
Property has been used as a sanitary landfill during the Seller's ownership
thereof or, to the actual knowledge of the Seller and Upjohn, prior to the
Seller's ownership thereof; and (e) to the actual knowledge of the Seller and
Upjohn, there are no incinerators, above ground or underground storage tanks,
septic tanks, sumps, oil/water separators, or cesspools which are now or have
ever been located on the Real Property. Schedule 6.25 includes, without
limitation, all information regarding underground storage tanks required by
Section 7.01(j) and a summary description of all citations received by Seller
relating to alleged violations of any of the Environmental Control Laws. As
used in this Section 6.25, "actual knowledge" means the Seller's actual
knowledge after performing only those due diligence investigations disclosed in
Schedule 6.25.
Section 6.26 Conditions Affecting Seller's Business. None of the
representatives of the Seller or Upjohn identified in Schedule 6.26 have actual
knowledge of any extraordinary or unusual conditions with respect to the
products, services, facilities, personnel, supplies or major customers of the
Seller that are not public information or known generally in the Seller's
industry or which has not been disclosed in writing to the Buyer and which the
Seller or Upjohn believes will or could have a material adverse effect on the
Seller's business or the continued operation thereof by the Buyer not
experienced by others in the same industry. In providing the warranties set
forth in Section 6.26, the Seller and Upjohn are relying exclusively on the
actual knowledge, without independent investigation, of the representatives of
the Seller or Upjohn identified in Schedule 6.26. The Seller and Upjohn
expressly disclaim any warranties with respect to the knowledge of any other
Persons relating to the matters set forth in this Section 6.26.
Section 6.27 Customers and Sales. Schedule 6.27 attached hereto
and incorporated herein by reference, is a true and accurate list of the top
ten (10) customers of the Seller in terms of gross sale, together with the
approximate dollar amount of sales made to each such customer during the twelve
(12) month period ending October 31, 1993. Except as disclosed in Schedule
6.27, neither the Seller nor Upjohn is aware of any facts indicating that any
of such customers intend to cease doing business with the Seller (or the Buyer
after the Closing). In providing the warranty contained in the preceding
sentence, the Seller and Upjohn are relying exclusively on the actual knowledge
of Gerald A. Welch and Gerald L. Crane, without independent investigation, and
the Seller and
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Upjohn expressly disclaim any warranty with respect to the knowledge of any
other Person relating thereto.
Section 6.28 Scheduled Disclosures. The exceptions,
modifications, descriptions and disclosures in any Schedule attached hereto are
made for all purposes of this Agreement and are exceptions to all
representations and warranties set forth in this Agreement or in any agreement
or instrument delivered pursuant to or in connection with this Agreement (the
"Related Agreements"). To the extent that prior to the date hereof a report,
document or other written information has been delivered to or is in the
possession of the Buyer or its counsel which discloses the existence of any
fact or circumstance which should have been disclosed in this Agreement or in
the Related Agreements or such fact or circumstance is otherwise actually known
to the Buyer or its counsel, such fact or circumstance is deemed disclosed for
all purposes of this Agreement and the Related Agreements and is an exception
to the representations and warranties set forth herein. The Buyer shall have
no right to compel compliance or to bring an action for indemnification arising
out of matters deemed disclosed hereunder.
The representations and warranties set forth in this Article VI and
the Schedules appended hereto are the only representations and warranties made
by Upjohn or the Seller with respect to its business and the Purchased Assets.
Except as specifically set forth herein, the Seller is selling the Purchased
Assets to the Buyer "as is" and with all faults. EXCEPT AS SPECIFICALLY SET
FORTH HEREIN, ALL WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED AND
EXCLUDED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT.
ARTICLE VII
ACTIVITIES PRIOR TO THE CLOSING
Section 7.01 Activities Prior to Closing. Each of the Seller and
Upjohn hereby covenants and agrees that from and after the date hereof to the
Closing Date, the Seller will, in all material respects, conduct its business
solely in the ordinary course and in a reasonably prudent manner consistent
with past practices and the Seller and Upjohn will:
(a) Engage in no material transaction out of the ordinary
course of business except as contemplated herein;
(b) Not merge or consolidate the Seller with any other
corporation or allow it to acquire or agree to acquire or be acquired
by any corporation, association, partnership, joint venture, or other
entity;
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(c) Not sell, assign, lease, transfer, or otherwise
dispose of any of the Purchased Assets without the prior written
consent of the Buyer, except in the ordinary course of business;
(d) Not create or suffer to exist any Encumbrance on any
of the Purchased Assets other than Permitted Exceptions;
(e) Not make, or commit to make, any capital expenditure
or major repair in excess of One Hundred Thousand Dollars ($100,000)
without the prior written consent of the Buyer, which consent shall
not be unreasonably withheld;
(f) Not waive any material rights or claims of the Seller
related to the Purchased Assets without first having notified the
Buyer and received the Buyer's written consent thereto;
(g) Use its best efforts to preserve its existing
business organization and relations with its employee that Buyer
expects to hire and with its customers, suppliers, and others with
whom it has a business relationship;
(h) Maintain in full force and effect all material
agreements, contracts, leases, Permits, authorizations, and approvals
necessary for or related to its business operations as such operations
are now conducted and comply with all laws and regulations applicable
to the Seller or its business operations;
(i) Promptly advise Buyer in writing of any material
change or inaccuracy in any document, Schedule, Exhibit or other
information given to the Buyer pursuant to this Agreement;
(j) Provide to the Buyer (on Schedule 6.25) a list of all
underground storage tanks (hereafter referred to as "UST") presently
located, or to the actual knowledge of the Seller and Upjohn, at any
time located on the Real Property and all UST's installed by or at the
request of the Seller on any real property which is the subject of the
Assumed Leases, and:
(i) the location of the UST (including, as and to
the extent in its possession or control, any drawings, maps,
sketches and photographs showing the location) and whether the
Seller currently owns or leases the real property in which the
UST is located (and if the Seller does not currently own or
lease said property, the dates on which it did and the current
owner or lessee of such property);
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(ii) copies, as and to the extent in its
possession or control, of all of the UST manufacturer's
literature, brochures, proposals and contract documents, or
other information accurately describing the UST system
(including tanks, piping, dispensers, leak and cathodic
protection equipment or components) and all manufacturer's
warranties covering the UST system;
(iii) the date, if known, of installation and the
specific use or uses of the UST;
(iv) copies, as and to the extent in its
possession or control, of all UST tank and piping tightness
tests and cathodic protection tests and similar studies or
reports for all periods;
(v) a copy of the Owner's Notification For UST;
(vi) all other records, as and to the extent in
its possession or control, with regard to the UST, including,
without limitation, repair records, financial assurance
compliance records, records of ownership and records of
removal; and
(vii) to the extent not otherwise set forth
pursuant to the above, a summary description of instances,
past or present, in which, to the best knowledge of the Seller
or Upjohn, the UST failed to meet applicable standards and
regulations for tightness or otherwise, and the extent of such
failure, and any other operational or environmental problems
with regard to the UST, including, without limitation, spills
(including spills in connection with delivery of materials to
the UST), releases and soil contamination or other
environmental pollution.
Section 7.02 Reports; Taxes. Between the date hereof and the
Closing Date, the Seller will duly and timely file all reports or returns
required to be filed with federal, state, local and foreign authorities, will
promptly pay when due all federal, state, local and foreign taxes, assessments
and governmental charges levied or assessed upon it or any of its properties
(unless contesting such in good faith and adequate provision has been made
therefor), and will duly observe and conform to any lawful requirements of any
governmental authority relating to any of its Purchased Assets or to the
operation and conduct of its business operation and all covenants, terms and
conditions upon or under which any of its Purchased Assets are held.
Section 7.03 Access; Confidentiality. Between the date hereof and
the Closing Date, the Seller will give to authorized representatives of the
Buyer reasonable access, during normal business hours, in such manner as not to
unduly disrupt normal
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business activities, to any and all premises, properties, contracts,
commitments, books, records and affairs of the Seller, and will cause its
officers and employees to furnish any and all financial, technical and
operating data and other information pertaining to its business as the Buyer
will from time to time reasonably request. The Buyer and its representatives
will hold in confidence all information so obtained and will use such
information only for the purpose of considering the transactions contemplated
hereby. The Buyer further agrees that it will not otherwise disclose any such
information to any third party except upon the written consent of the Seller or
except as required by law. If the transactions contemplated hereby are not
consummated as contemplated herein, the Buyer will promptly return all
returnable data furnished to it to the Seller. Such obligation of
confidentiality will not extend to any information which is shown to be or to
have been generally known to others engaged in the same trade or business as
the furnishing party, or that is or will be public knowledge through no act or
omission by the Buyer or any of its directors, officers, employees,
professional advisors or other representatives.
Section 7.04 Seller's Employees. The Seller and Upjohn
acknowledge and agree that the Buyer, prior to the Closing, will have the
right, with prior consultation with the Seller and Upjohn, to interview and
offer employment in its intended business operations to individuals who at the
time of such interview of offer of employment are employed by or otherwise
committed to the Seller; provided, however, that such offers shall be withdrawn
if the Closing does not occur prior to January 1, 1994.
Section 7.05 Consents. The Seller and Upjohn will in good faith
request and use all reasonable efforts to obtain all necessary consents,
waivers, approvals, or authorization from third parties (collectively the
"Consents") which are necessary in connection with the assignment of the
Assumed Leases, the Assumed Contracts and the Assumed Purchase Orders as
contemplated herein and the Buyer will in good faith request and use all
reasonable efforts to obtain all Consents which are necessary in connection
with the assignment of the Permits that are transferable as contemplated
herein. Each party will cooperate with the other party in such efforts.
However, it is understood and agreed that although obtaining such Consents
shall be a condition to the Buyer's obligation to close the transactions
contemplated herein, the failure to obtain the Consents shall not give rise to
any action by any party for breach of this Agreement or any provision hereof,
notwithstanding any language contained in this Agreement to the contrary.
Section 7.06 Public Announcements. Except as set forth in Section
16.08 or as otherwise required by law, neither party shall make any public
announcements regarding the transactions
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contemplated herein without the prior consent of the other party, including its
approval of the content thereof.
ARTICLE VIII
CASUALTY AND CONDEMNATION
Section 8.01 Casualty. If prior to the Closing, any material
portion of the Purchased Assets are damaged or destroyed by fire or any other
casualty, the Seller will promptly give notice of the same to the Buyer. In
such event, at the Buyer's option and subject to the limitation set forth
below, the Buyer will have the right to terminate this Agreement by giving
notice thereof to the Seller within the earlier of fifteen (15) days after
receipt of the Seller's notice under this Section 8.01 or one (1) day prior to
the Closing Date. If the Buyer terminates this Agreement pursuant to this
Section 8.01, this Agreement will become null and void, and the Seller, Upjohn
and the Buyer will thereupon have no further liabilities or obligations under
this Agreement or otherwise hereunder. If the Buyer elects not to terminate
this Agreement pursuant to this Section 8.01, the Buyer will be entitled to the
benefits of all insurance proceeds and claims relating to any such fire or
casualty loss (except business interruption insurance), and the Seller will at
or prior to Closing assign to the Buyer all such insurance proceeds and claims.
The Seller will inform the Buyer of any negotiations with respect to insurance
claims involving any damaged Purchased Assets, will permit the Buyer to take
part therein, and will not settle any such claims without the Buyer's prior
written consent. The Buyer will be entitled to a diminution of the purchase
price to the extent that the insurance proceeds are less than the reasonable
cost of repairing or replacing the damaged property. Notwithstanding anything
to the contrary contained herein, in the event the difference between the
insurance proceeds and loss in the fair market value of the affected
Purchased Assets is less than One Million Dollars ($1,000,000), the Buyer shall
not be entitled to terminate this Agreement and instead shall be entitled to a
diminution in the purchase price to the extent of such difference.
Section 8.02 Condemnation. If any authority having the right of
eminent domain commences negotiations or commences legal action for the
damaging, taking or acquiring of any Assets, either temporarily or permanently,
by condemnation or by exercise of the right of eminent domain (a "Taking"), the
Seller will promptly give notice of the same to the Buyer. In the event of a
material Taking, at the Buyer's option and subject to the limitation set forth
below, the Buyer will have the right to terminate this Agreement by giving
notice thereof to the Seller within the earlier of fifteen (15) days after
receipt of the Seller's notice under this Section 8.02 or one (1) day prior to
the Closing Date. If the Buyer terminates this Agreement pursuant to this
Section, this Agreement will become null and void, and the Seller, Upjohn and
the
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Buyer will thereupon have no further liabilities or obligations under this
Agreement or otherwise. If the Buyer elects not to terminate this Agreement
pursuant to this Section 8.02 or if the Taking is not material, the Buyer will
be entitled to the benefits of all awards, claims, settlement proceeds, and
other proceeds payable by reason of any such Taking, and the Seller will assign
to the Buyer all awards, claims, settlement proceeds, or other proceeds payable
by reason of any such Taking. In the event of any negotiations with respect to
any of the Purchased Assets with any authority regarding settlement on account
of any Taking, the Seller will inform the Buyer of all such negotiations, will
permit the Buyer to take part therein, and will not enter into any settlements
thereof without the Buyer's prior written consent. Notwithstanding anything to
the contrary contained herein, in the event the difference between the
condemnation proceeds and loss in the fair market value of the affected
Purchased Assets is less than One Million Dollars ($1,000,000) and Buyer's
ability to utilize the Purchased Assets is not materially impaired, the Buyer
shall not be entitled to terminate this Agreement.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of the Buyer to consummate the transactions
contemplated hereby will be subject to the satisfaction or the waiver by the
Buyer, at or prior to the Closing Date, of the following conditions:
Section 9.01 Representations and Warranties. The representations
and warranties of the Seller and Upjohn contained in this Agreement, the
Schedules hereto, or in any other document delivered pursuant hereto, shall
have been true and correct in all material respects on the date such
representations and warranties were made, and at the Closing, as though made on
and as of the Closing Date and the Seller and Upjohn will have delivered to the
Buyer a certificate to such effect signed by an authorized officer of the
Seller and Upjohn, which certificate will be in form and substance satisfactory
to the Buyer.
Section 9.02 Performance of Covenants, Agreements and Obligations.
Each covenant, agreement and obligation of the Seller and Upjohn to be
performed on or before the Closing Date pursuant to the terms and specific
provisions of this Agreement, will have been duly performed on or before the
Closing Date, and at the Closing, the Seller and Upjohn will have delivered to
the Buyer a certificate to such effect signed by an authorized officer of the
Seller and Upjohn, which certificate will be in form and substance satisfactory
to the Buyer.
Section 9.03 Prohibitions. No claim, action, suit, investigation,
arbitration or legal or other proceeding or
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governmental investigation will be pending or threatened before any court of
governmental agency which presents a substantial risk of the restraint or
prohibition of the transactions contemplated by this Agreement or the obtaining
of material damages or other relief in connection therewith.
Section 9.04 Hart-Scott-Rodino Filing. The Buyer and the Seller
shall have (a) each filed a Notification and Report Form for Certain Mergers
and Acquisitions as required by Section 7A of the Clayton Act, 15 U.S.C.
Section 18a, the filing fees associated therewith shall have been fully paid,
and the filings shall have been deemed complete, (b) the post-filing waiting
period prescribed in Federal Trade Commission Rule 803.10, 16 C.F.R. Section
803.10 shall have expired or shall have been waived by the appropriate
governmental authorities, and (c) neither the United States Department of
Justice nor the Federal Trade Commission shall have notified either the Buyer
or the Seller that they intend to take further action with respect to the
transactions contemplated herein.
Section 9.05 Opinion of Seller's Counsel. At the Closing, the
Buyer will have been furnished with the opinion of Larry Moore, Esquire,
Upjohn's Senior Counsel for Pharmaceutical and Agricultural Operations, dated
the Closing Date, addressed to Buyer and in form and content reasonably
acceptable to the Buyer, to the effect that:
(a) Each of the Seller and Upjohn is a corporation
validly existing and in good standing under the laws of their
respective states of incorporation;
(b) Each of the Seller and Upjohn has the corporate power
and authority to execute and deliver the Agreement. The Agreement is
a valid and binding obligation of both the Seller and Upjohn,
enforceable against the Seller and Upjohn in accordance with its
terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally and general
equitable principles;
(c) The Seller has the corporate power and authority to
carry on its business operations and to own and operate the Purchased
Assets as presently owned and operated;
(d) Except where any violation, conflict, breach or
default would not, individually or in the aggregate, have a material
adverse effect on the Seller or Upjohn, the consummation of the
transactions contemplated by the Agreement, will not contravene any
provision of the Articles or Certificates of Incorporation or Bylaws
of the Seller or Upjohn.
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(e) Except as disclosed in the Agreement or in Schedule
6.14, to the knowledge of such counsel, (i) there is no pending or
threatened suit, action, claim, investigation, arbitration,
administrative or legal or other proceeding or governmental
investigation of any kind against or relating to the Seller, (ii) the
Seller and Upjohn each have complied with all state or federal laws
which might adversely effect the Purchased Assets, including without
limitation all applicable securities laws, rules, ordinances,
requirements, regulations, and orders applicable to the Seller and
Upjohn, except where the failure to comply would not have a material
adverse effect on the Purchased Assets or the Seller, (iii) there are
no violations of any orders, writs, injunctions, judgments, or decrees
of any court or federal, state or local department, official,
commission, authority, board, bureau, agency, or other instrumentality
which have been issued or are pending against the Seller or Upjohn,
which might adversely effect the Purchased Assets; and
(f) The transfer of the Purchased Assets pursuant to this
Agreement (i) materially complied with all applicable state and
federal laws, rules, regulations, ordinances, requirements and orders
(other than any applicable bulk sales laws) and (ii) subject to any
necessary official recordations or filings, validly transferred all of
the Seller's rights, title and interest in and to the aforesaid
Purchased Assets.
As to any matter contained in such opinion which involves the laws of
a jurisdiction in which such counsel is not admitted to practice, such counsel
may rely upon the opinion of local counsel of established reputation
satisfactory to the Buyer. As to the matters set forth in subsection (f)
above, such counsel may deliver an opinion of Upjohn's general counsel whom
Buyer understands to be an employee of Upjohn, which opinion shall be in form
and substance satisfactory to the Buyer.
Section 9.06 Authority. All actions required to be taken by, or
on the part of the Seller, Asgrow Seed Company and Upjohn to authorize the
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby will have been duly and validly taken by
the Board of Directors of each of the Seller, Asgrow Seed Company and Upjohn,
and the Buyer shall have received copies of all such resolutions certified by
the Secretary of each such entity.
Section 9.07 No Adverse Change. There will not have occurred
between the date hereof and the Closing Date any material adverse changes in
the Purchased Assets or business of the Seller and the Purchased Assets will
not have been, and will not be threatened to be, materially adversely affected
in any material way as a result of fire, explosion, earthquake, disaster,
accident, labor, dispute, any action by any governmental authority, flood,
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drought, embargo, riot, civil disturbance, uprising, activity of armed forces
or act of God or public enemy.
Section 9.08 Required Consents. On the Closing Date, the parties
(other than the Seller) to all of the Assumed Leases and the Assumed Contracts,
any governmental agency or body or any other person, firm or corporation which
owns or has authority to grant any franchise, license, permit, easement, right
or other authorization necessary for the business or operations of the Seller
or the Purchased Assets which will be transferred by the Seller to the Buyer
pursuant to this Agreement, and any governmental body or regulatory agency
having jurisdiction over the Buyer, the Seller, or Upjohn, to the extent that
their consent or approval is required under the pertinent debt, lease,
contract, commitment or agreement or other document or instrument or under
applicable laws, rules or regulations for the consummation of the transaction
contemplated hereby and for the continued operation by the Buyer of Seller's
business in the same manner which the Seller operated its business prior to the
Closing, in the manner herein provided, will have granted such consent or
approval such that the consummation of the transactions contemplated by this
Agreement will be in material compliance with all applicable law.
Section 9.09 Title Commitment, Permitting and Land Use Matters.
The Buyer shall be satisfied that (a) the Commitment with respect to the Title
Policy contains no exceptions other than Permitted Exceptions and all
requirements to the issuance of the Title Policy have been satisfied, (b) all
Assumed Leases are valid, enforceable and assignable to the Buyer, (c) all
Florida DER and other Permits necessary to the operation of the Seller's
business are transferrable to or can otherwise be timely and readily obtained
by the Buyer; and (d) no federal, state, or local land use laws or regulations
(including without limitation regulations adopted pursuant to the requirements
set forth in Section 163.3161, et. seq., Florida Statutes, and Rule 9J-5 of the
Florida Administrative Code, will materially affect the Buyer's ability to
conduct business operations on the Real Property in the manner presently
conducted by the Seller.
Section 9.10 UCC Search Report. Prior to the Closing, the Buyer
shall have received UCC search reports dated as of a date not more than fifteen
(15) days before the Closing Date issued by the Florida Secretary of State
indicating that there are no filings under the Uniform Commercial Code on file
with the Florida Secretary of State which indicate any Encumbrances on the
Purchased Assets.
Section 9.11 Environmental Review. The Buyer shall have completed
its review of all environmental matters relating to the Real Property and the
operation of Seller's business and shall be reasonably satisfied with the
results thereof.
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Section 9.12 Other Documents. On the Closing Date, the Buyer will
have been provided with such other documents as it may have reasonably
requested from the Seller and Upjohn.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF SELLER AND UPJOHN
The obligations of the Seller and Upjohn to effect the transactions
contemplated hereby will be subject to the satisfaction or the waiver by the
Seller and Upjohn, as the case may be, at or prior to the Closing Date, of the
following conditions:
Section 10.01 Representations and Warranties. The representations
and warranties of the Buyer contained in this Agreement or in any document
delivered by the Buyer pursuant hereto shall have been true and correct in all
material respects on the date such representations and warranties were made,
and at the Closing, as though made on and as of the Closing Date, and the Buyer
will have delivered to the Seller and Upjohn a certificate to such effect,
signed by an authorized officer of the Buyer, which certificate will be in form
and substance satisfactory to the Seller and Upjohn.
Section 10.02 Performance of Covenants, Agreements and Obligations.
Each of the covenants, agreements and obligations of the Buyer to be performed
by it on or before the Closing Date pursuant to the terms of this Agreement
will have been duly performed on or before the Closing Date, and at the
Closing, the Buyer will have delivered to the Seller and Upjohn a certificate
to such effect, signed by an authorized officer of the Buyer, which certificate
will be in form and substance satisfactory to the Seller and Upjohn.
Section 10.03 Prohibitions. No claim, action, suit, investigation,
arbitration or legal or other proceeding or governmental investigation will be
pending or threatened before any court or governmental agency which presents a
substantial risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material damages or other
relief in connection therewith.
Section 10.04 Hart-Scott-Rodino Filing. The Buyer and the Seller
shall have (a) each filed a Notification and Report Form for Certain Mergers
and Acquisitions as required by Section 7A of the Clayton Act, 15 U.S.C.
Section 18a, the filing fees associated therewith shall have been fully paid
and the filings shall have been deemed complete, (b) the post-filing waiting
period prescribed in Federal Trade Commission Rule 803.10, 16 C.F.R. Section
803.10 shall have expired or shall have been waived by the appropriate
governmental authorities, and (c) neither the United States Department of
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Justice nor the Federal Trade Commission shall have notified either the Buyer
or the Seller that they intend to take further action with respect to the
transactions contemplated herein.
Section 10.05 Opinion of Buyer's Counsel. The Seller and Upjohn
will have been furnished with an opinion of Buyer's counsel, Shackleford,
Farrior, Stallings & Evans, P.A., dated the Closing Date, addressed to the
Seller and Upjohn and in form and content reasonably acceptable to the Seller
and Upjohn to the effect that:
(a) the Buyer is a corporation duly organized and in good
standing under the laws of its jurisdiction of incorporation;
(b) the Buyer has the requisite corporate power and
authority to execute and deliver, and has duly executed and delivered
the Agreement. The Agreement is a valid and binding obligation of the
Buyer, enforceable against the Buyer in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting the
enforcement of creditors' rights generally;
(c) Except where any violation, conflict, breach or
default would not, individually or in the aggregate, have a material
adverse effect on the Buyer, the consummation of the transactions
contemplated by the Agreement, will not:
(i) contravene any provision of the Certificate
of Incorporation or Bylaws of the Buyer; or
(ii) to the knowledge of such counsel, violate, be
in conflict with, or constitute a default under, result in the
termination of, cause the acceleration of any payments
pursuant to, or otherwise impair the good standing, validity,
or effectiveness of any agreement, contract, indenture, lease,
or mortgage applicable to the Buyer;
(d) No consent, waiver, approval, authorization or
exemption which has not been obtained from a governmental authority or
third party is required in connection with the consummation by the
Buyer of the transactions contemplated by this Agreement.
As to any matter which involves the laws of a jurisdiction in which
the counsel rendering the opinion is not admitted to practice, such counsel may
rely upon the opinion of local counsel of established reputation satisfactory
to counsel to the Seller and Upjohn, or the opinion of the Buyer's general
counsel whom the Seller and Upjohn understand to be an employee of the Buyer.
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Section 10.06 Authority. All actions required to be taken by, or
on the part of the Buyer to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby
will have been duly and validly taken by the Buyer's Board of Directors and the
Seller and Upjohn shall have received copies of all such resolutions certified
by the Secretary of the Buyer.
Section 10.07 Other Documents. On the Closing Date, the Seller and
Upjohn will have been provided with such other documents as they may have
reasonably requested from the Buyer.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
Section 11.01 Survival of Warranties. The covenants, agreements,
representations and warranties of the parties hereto contained herein or in any
document required to be delivered pursuant hereto at Closing shall survive the
Closing until twenty-four (24) months after the Closing Date. Notwithstanding
the preceding sentence, (i) the covenants, agreements, representations and
warranties of the parties contained in Sections 5.01-5.03, 6.01-6.03, and 6.07
shall survive the Closing for a period of five (5) years, (ii) claims relating
to Superfund Sites arising out of Sections 6.25, 11.04 or 11.05 and all claims
relating to the Buyer's obligations to satisfy the Assumed Obligations under
this Agreement (including Sections 1.02 and 14.02) and the Seller's obligation
to satisfy the Excluded Obligations under this Agreement (including Section
14.02) shall survive the Closing without any time limitation; provided,
however, that this Section 11.01(ii) shall apply only to the disposal of
Hazardous Substances prior to the Closing on property other than the Real
Property, as defined in Section 11.04(a), (iii) all claims (other than those
described in subsection (ii) above) arising out of Sections 6.25, 11.04, 11.05
or 11.09 shall survive the Closing as provided in Section 11.05 and in no case
shall claims against Seller or Upjohn survive longer than ninety (90) months
(other than those described in subsection (ii) above), and (iv) claims arising
out of Sections 6.12 or 6.13 shall survive until the expiration of all
applicable statutes of limitations, as may be extended or waived. Any right of
indemnification pursuant to this Article XI with respect to a breach or a
claimed breach of a covenant, agreement, representation or warranty or
otherwise (including any Environmental Claim) will expire on the applicable
date described in the preceding sentences, unless, on or prior to such date,
written notice asserting such breach, and setting forth in reasonable detail a
description of and a reasonable estimate of the amount involved in such breach,
has been given to the party from whom indemnification is sought. As used in
this Section 11.01 and throughout this Agreement, the term Hazardous Substances
means "hazardous substances" as defined in the
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Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq. and "pollutants" as defined in the
Florida Pollutant Discharge Prevention and Removal Act, Section 376.011, et
seq., Florida Statutes, and in 376.301, Florida Statutes, in each case
including the regulations promulgated thereunder and as such statutes and
regulations exist as of the Closing Date.
Section 11.02 Indemnification By the Seller and Upjohn. Except for
the breach of any of the warranties set forth in Section 6.25 and the other
matters specified in Sections 11.04 and 11.09, all of which shall be governed
by Section 11.04 relating to environmental indemnities and subject to the
provisions and limitations set forth in Sections 11.01 and 11.05, from and
after the Effective Time, each of the Seller and Upjohn will indemnify and hold
harmless the Buyer from and against any and all damages, losses, obligations,
deficiencies, liabilities, claims, Encumbrances, fines, penalties, costs, and
expenses, including reasonable attorneys' fees, which the Buyer may suffer or
incur, resulting from, related to, or arising out of (i) any misrepresentation,
breach of warranty (other than the warranties set forth in Section 6.25), or
nonfulfillment of any of the respective covenants or agreements of the Seller
or Upjohn in this Agreement (including the attached schedules) or in any
document required to be delivered pursuant hereto at Closing or (ii) any
Excluded Obligations; provided, however, before the Buyer may assert a claim
for indemnity under this Section, the Buyer must give or cause to be given
written notice of such claim to the Seller and Upjohn as provided in Section
11.07. For purposes of this Section 11.02 and Section 11.04, the term "Buyer"
shall include its officers, directors, employees, agents, and Affiliates.
Section 11.03 Indemnification by Buyer. Except as provided in
Section 11.04 with respect to indemnity for Hazardous Substances and subject to
the limitations set forth in Section 11.05, from and after the Effective Time,
the Buyer agrees to indemnify and hold harmless the Seller and Upjohn from and
against any and all damages, losses, obligations, deficiencies, liabilities,
claims, Encumbrances, fines, penalties, costs, and expenses, including
reasonable attorneys' fees, which the Seller or Upjohn may suffer or incur,
resulting from, related to, or arising out of (i) any misrepresentation, breach
of warranty, or nonfulfillment of any of the covenants or agreements of the
Buyer in this Agreement or in any document required to be delivered pursuant
hereto at Closing, or (ii) the Assumed Obligations or the Buyer's ownership or
operation of the Purchased Assets after the Effective Time; provided, however,
before the Seller or Upjohn may assert a claim for indemnity under this
Section, the Seller or Upjohn must give or cause to be given written notice of
such claim to Buyer as provided in Section 11.07. For purposes of this Section
11.03, the term "Seller and Upjohn" shall include each of their officers,
directors, employees, agents and Affiliates.
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Section 11.04 Indemnification from Environmental Damages. Subject
to the limitations set forth in Sections 11.01 and 11.05, from and after the
Effective Time, each of the Seller and Upjohn will indemnify, defend and hold
harmless the Buyer from and against any and all damages, losses, obligations,
deficiencies, liabilities, claims, Encumbrances, fines, penalties, costs and
expenses, including reasonable attorneys' fees, arising from or relating to
Environmental Claims asserted during the applicable time periods set forth in
Section 11.01 regarding environmental conditions that exist on or prior to the
Effective Time, and which may be suffered or incurred by the Buyer, in
connection with (a) the manufacture, formulation, storage, transportation,
deposit, disposal, treatment, handling, production, processing or recycling of
Hazardous Substances with respect to the Real Property (which term for purpose
of Article XI includes all real property owned or leased by the Seller for
disposal or other purposes and all real property contaminated by migration of
Hazardous Substances therefrom) or the operation of the business of the Seller;
(b) the existence of any tank or facility for the storage of Hazardous
Substances located on or in the Real Property provided the existence or
condition of such tank or facility was in violation of any Environmental
Control Laws in effect at the Effective Time; (c) the existence of any asbestos
materials on or in any of the Real Property which subjects the Buyer as owner
or operator thereof to liens, damages, penalties, injunctive relief or cleanup
costs under any Environmental Control Law, or under any civil action respecting
Hazardous Substances; (d) the failure by the Seller to obtain all environmental
permits and file all environmental notifications necessary to carry on the
Seller's business; (e) failure by the Seller to comply in any respect with all
federal, state or local laws and regulations governing the storage,
transportation, deposit, disposal, treatment, handling, production, processing,
recycling, control, removal, spill, release or discharge of any substances
regulated under any Environmental Control Laws, including without limitation,
the provisions of or regulations under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendment and Reauthorization Act of 1986 ("CERCLA"), the Federal Insecticide,
Fungicide and Rodenticide Act, as amended, the Hazardous Materials
Transportation Act, as amended, the Occupational Safety and Health Act, as
amended, the Solid Waste Disposal Act, the Clean Water Act, as amended, the
Clean Air Act, as amended, the Resource Conservation and Recovery Act of 1976,
as amended, and the Federal Water Pollution Control Act Amendments of 1972 (all
of the foregoing enumerated and non- enumerated statutes, including without
limitation any similar state, federal or local statutes, as amended, and any
regulations thereunder are collectively referred to herein as the
"Environmental Control Laws"); (f) any circumstances under which liability
could be imposed on the Buyer under or as a result of the application of any
Environmental Control Laws arising out of, resulting from or related to the
Real Property or any other real property or the operation of the
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business of the Seller; (g) the receipt of any written or oral notice from, or
the failure to provide oral or written notice, as required by any Environmental
Control Laws, to the United States Environmental Protection Agency ("EPA"), the
National Response Center, or any state or local agency with regard to any
actual or threatened removal, spill, release or discharge of Hazardous
Substances on or relating to the Real Property (including without limitation
the migration of contamination therefrom) or in connection with the conduct of
Seller's business operations; (h) the receipt of notice that the Buyer is
potentially responsible for costs of cleanup or investigation of any actual or
imminently threatened spill, release or discharge of Hazardous Substances
pursuant to any Environmental Control Law arising out of, resulting from or
related to the Real Property or the operation of the business of the Seller;
(i) the failure of any and all UST's which have been removed from the Real
Property prior to the Closing Date, to be removed, sealed and remediated in
accordance with all applicable laws, rules, regulations and requirements in
effect at the time of UST closure; and (j) the breach of any of the warranties
set forth in Section 6.25.
Section 11.05 Limitations of Indemnity. Notwithstanding any
provisions herein to the contrary:
(a) Time Limitations. Except as otherwise provided in
subsection (h) below, neither party will be liable to the other party for any
claim based on a misrepresentation, breach of warranty or nonfulfillment of any
covenant or agreement herein for which it has not received written notice prior
to the expiration dates set forth in Section 11.01.
(b) Monetary Limitations. No claim may be made against
any party to this Agreement for indemnification pursuant to Sections 11.02 or
11.03 (but not claims pursuant to Sections 11.04 or 11.05) for any individual
claim of less than One Thousand Dollars ($1,000). Claims of One Thousand
Dollars ($1,000) or more are referred to herein as "Qualified Claims." No
party to this Agreement shall be required to make any payments pursuant to
Sections 11.02 or 11.03 unless and until the aggregate of all Qualified Claims
due under Section 11.02 or 11.03, respectively, shall exceed Fifty Thousand
Dollars ($50,000), at which time the indemnifying party shall be responsible
for the entire amount of all Qualified Claims, including the initial One
Thousand Dollars ($1,000) of the Qualified Claims. The maximum amount
recoverable from the Seller and Upjohn pursuant to Section 11.02 shall be an
amount equal to Twenty-Four Million Dollars ($24,000,000). For the purposes of
this Section 11.05(b), in computing such individual or aggregate amounts of
claims, the amount of each claim shall take into account any insurance proceeds
or other monetary compensation recovered or recoverable by the indemnified
party.
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(c) Consequential Damages. Seller and Upjohn shall have
no obligation to indemnify Buyer for consequential damages, incidental damages,
lost profits or similar items pursuant to this Article XI other than (i)
damages attributable to fraud and (ii) lost profits attributable to the
complete closure, whether temporary or permanent, of any of the Buyer's
business facilities located on any of the Real Property caused by a breach of
any of the environmental warranties set forth in Section 6.25 or the
environmental remedial actions required by Sections 11.04 or 11.05 hereof,
provided that the Buyer shall take reasonable steps to avoid any such closure
and if a closure does occur, to mitigate its damages as provided in Section
11.05(e) below.
(d) Actions Taken by Buyer. Seller and Upjohn shall have
no liability under this Article XI for any liabilities and damages to the
extent that such liabilities and damages arise from actions taken or not taken
by the Buyer or its Affiliates after the Closing Date.
(e) Mitigation of Damages. The party entitled to
indemnification shall take all reasonable steps to mitigate all indemnifiable
liabilities and damages upon and after becoming aware of any event which could
reasonably be expected to give rise to any liabilities and damages that are
indemnifiable hereunder.
(f) Knowledge of Indemnified Party. The
representations, warranties, covenants and agreements of each party set forth
in this Agreement and any document required to be delivered pursuant hereto at
Closing shall be affected by the investigations, verifications and examinations
of the party seeking indemnification to the extent that no party shall bring a
claim or be entitled to indemnification with respect to any breach of any
representation, warranty, covenant or agreement of which any executive officer,
director or department head (or equivalent managerial personnel) of such party
had knowledge on or before the Closing Date.
(g) Environmental Limitations and Cost Allocations. The
following additional limitations and cost allocations shall apply to the
obligation of the Seller and Upjohn to indemnify the Buyer for Environmental
Claims asserted pursuant to Section 11.04:
(i) All costs attributable to the following shall
be the sole responsibility of the Seller and Upjohn: (A) Environmental Claims
asserted regarding Superfund Sites arising out of Sections 6.25 or 11.04 with
respect to Seller's activities prior to the Closing Date, or (B) Environmental
Claims asserted regarding Hazardous Substances located in or on the Real
Property, which Hazardous Substances are disclosed in Table 2 of Appendix C or
E in the H2O Environmental, Inc. reports listed in Schedule 6.25 or are
otherwise discovered prior to the Closing Date; provided, however, that the
foregoing is not an admission or an agreement that
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anything disclosed in the H2O reports is a violation of any Environmental
Control Law or must be cleaned up or remediated under any Environmental Control
Law;
(ii) All costs attributable to pesticides products
(as defined in FIFRA) located in or on the Real Property, the
registration of which has been cancelled or suspended in whole or in
material part prior to the Closing Date by the United States
Environmental Protection Agency ("EPA") or the registrant, shall be
the sole responsibility of the Seller and Upjohn;
(iii) All costs attributable to Environmental
Claims asserted regarding Hazardous Substances discovered in or on the
Real Property within ninety (90) months after the Closing Date shall
be the sole responsibility of the party (i.e., either the Buyer on the
one hand or the Seller and Upjohn on the other hand) causing such
Hazardous Substance contamination, if such cause can be determined by
clear and convincing evidence, and the Buyer shall pay all costs
associated with Hazardous Substance contamination discovered
thereafter; and
(iv) If within five (5) years after the Closing
Date Hazardous Substances are discovered in or on the Real Property
and the identity of the party causing the Hazardous Substance
contamination cannot be determined by clear and convincing evidence,
then the costs attributable to Environmental Claims asserted regarding
the Hazardous Substance contamination shall be allocated between the
Buyer, on the one hand, and the Seller and Upjohn, on the other hand,
as follows:
<TABLE>
<CAPTION>
PERIOD OF DISCOVERY ALLOCATION OF COSTS
------------------- -------------------
<S> <C>
One day after Closing Seller and Upjohn - 90%
through end of 1st year Buyer - 10%
1st day of 2nd year Seller and Upjohn - 70%
through end of 2nd year Buyer - 30%
1st day of 3rd year Seller and Upjohn - 50%
through end of 3rd year Buyer - 50%
1st day of 4th year Seller and Upjohn - 20%
through end of 4th year Buyer - 80%
1st day of 5th year Seller and Upjohn - 10%
through end of 5th year Buyer - 90%
</TABLE>
The Buyer shall be solely responsible for all costs attributable to Hazardous
Substance contamination discovered on or after the first day of the sixth year
after the Closing Date when the party
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responsible for such contamination cannot be determined by clear and convincing
evidence. As used in this Section 11.05(g) and in Section 11.05(h) below,
"costs" shall include all damages, losses, obligations, deficiencies,
liabilities, claims, Encumbrances, fines, penalties, and expenses, including
reasonable attorneys' fees and reasonable compensation for time expended by the
Buyer's environmental personnel and other employees, arising from or relating
to Hazardous Substance contamination, including the remediation therefor and
the costs associated with monetary compliance with all Environmental Control
Laws.
(h) Plant City Corrective Action Plan; Disposal of
Containers. The Seller has been engaged in negotiations with the Florida
Department of Environmental Protection ("FDEP") regarding the appropriate
nature and scope of a Preliminary Corrective Action Plan and a Corrective
Action Plan (collectively referred to as "CAP") deemed desirable for the
parcels of the Seller's Real Property located on Highway 39 in Plant City,
Florida (hereafter referred to as the "Plant City Real Property"). The purpose
of the CAP and related activity is to define environmental conditions within
the scope of the CAP and identify action, if any, which may be appropriate for
protection of human health or the environment. The Seller and Upjohn shall
continue with such project, and shall be fully responsible for implementation
and completion of the remediation contemplated by the CAP to the reasonable
satisfaction of the Buyer and all appropriate regulatory authorities. The
parties recognize that, upon completion of the remediation contemplated by the
CAP, certain monitoring, risk assessment or additional remedial action at the
Plant City Real Property may be required. After completion of the remediation
contemplated by the CAP, the Buyer shall assume responsibility for undertaking
any and all monitoring, risk assessment or additional remedial action relating
to or identified by or through the CAP and required by appropriate regulatory
authorities and shall pay all costs associated therewith. The Seller and
Upjohn shall reimburse the Buyer, no less frequently than quarterly, all
reasonable costs incurred by the Buyer in fulfilling such responsibilities to
the extent that such costs (i) arise out of application of the least costly
engineering practice adequate for compliance with applicable regulatory
requirements, and (ii) arise solely out of requirements imposed due to
conditions at the Plant City Real Property as of the Closing Date. In the
event the costs of the CAP, the monitoring, the risk assessment or the remedial
action are increased as a result of additional contamination of the Plant City
Real Property occurring after the Closing Date, the Seller and Upjohn shall not
be obligated to reimburse the Buyer for such increased costs. The Seller and
Upjohn shall continue and complete the remediation, cleanup and disposal now in
progress at the Plant City Real Property to the approval of the Buyer (which
approval shall not be unreasonably withheld) and all appropriate governmental
agencies and prior to the Closing shall properly dispose of all drums, vessels
and other containers which contain or previously contained
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Hazardous Substances at the Plant City Real Property or any other parcel of
Real Property and which are not in use or to be used for the storage of
saleable products as of the Closing Date. All reasonable costs associated
therewith shall be paid by the Seller and Upjohn. All contracts entered into
by the Seller or Upjohn for remediation work to be performed at the Plant City
Real Property or any other parcel of Real Property shall disclose that neither
the Seller nor Upjohn owns the Real Property and that the Real Property is
therefore not subject to construction or mechanics' liens by reason of the work
to be performed thereunder. The Seller and Upjohn will use reasonable efforts
to ensure that the Buyer is not named as a party to any consent order or
enforcement proceeding that may be issued by the FDEP relating to the CAP or
the environmental conditions giving rise to the CAP; provided, however, that
such reasonable efforts shall not be deemed to require the Seller or Upjohn to
agree to any condition, obligation or other provision of the CAP which may be
requested by the FDEP which the Seller or Upjohn determine, in their sole
discretion, is not in the best interest of the Seller or Upjohn.
Notwithstanding the foregoing provisions of this Section 11.05(h)
which contemplates that the Seller and Upjohn shall be responsible for
implementing the remediation contemplated by the CAP, after the Closing the
Buyer will give due consideration to proposals from the Seller and Upjohn under
which the Buyer would assume responsibility for implementing part or all of
such remediations, but the Buyer shall not be obligated to do so.
Buyer shall grant Seller and Upjohn access to the Plant City Real
Property and appropriate records in order for Seller and Upjohn to fulfill
their obligations under this Subsection 11.05(h).
Notwithstanding any provision herein to the contrary, no later than
June 1, 1994 the Seller and Upjohn shall use their best efforts to complete to
the satisfaction of FDEP a sufficient portion of the remediation contemplated
by the preliminary or final CAP relating to the area within the Plant City Real
Property denoted by diagonal lines on the site plan appended to this Agreement
as Exhibit F to allow construction of a tank farm consisting of six or seven
tanks and associated secondary containment improvements. In the event the
Seller and Upjohn fail for any reason to complete such remediation to the
satisfaction of FDEP by June 1, 1994, they shall pay to the Buyer liquidated
damages in the amount of Forty Thousand Dollars ($40,000) per month for each
full month thereafter that the remediation remains incomplete. Such amount
shall be prorated for that portion of any delay involving less than a full
month. The Seller and Upjohn acknowledge that liquidated damages of forty
thousand dollars per month represents a reasonable estimate of the actual
damages the Buyer would suffer as a result of the failure of the remediation to
be completed by June 1, 1994 and is not intended as a penalty. Notwithstanding
the foregoing, no liquidated damages shall be
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assessed for any delays beyond June 1, 1994 that are directly attributable to
cessation of remediation work due to a hurricane, tornado or flood or damages
caused by any such event. The foregoing liquidated damages shall be payable in
lieu of any other damages relating to a breach of the obligation set forth in
this paragraph, whether actual, special, incidental or consequential.
(i) Limitations on Scope of Remediation Work. In the
event that any remediation is required to be performed or funded by the Seller
and Upjohn after the expiration of the applicable limitations period set forth
in Section 11.01 pursuant to a written notice served on the Seller and Upjohn
prior thereto, the scope of the remediation work to be performed or funded by
the Seller and Upjohn shall be determined by the applicable laws and
regulations relating to the scope of such work in effect as of the last day of
the applicable limitations period, notwithstanding any change in such laws or
regulations that may become effective thereafter.
(j) Definition of Environmental Claim. For purposes of
this Article XI, the term "Environmental Claim" shall mean: (i) any and all
claims, actions or proceedings of any type or nature commenced by the EPA,
FDEP, other governmental agency or by a third party relating to a violation or
an alleged violation of any Environmental Control Law; (ii) a written notice
from the EPA, the FDEP or other governmental agency of any violation or
potential violation of any Environmental Control Law, including, but not
limited to, a Warning Notice, Notice of Non-Compliance, Notice of Violation, a
request for a preliminary assessment, or a site investigation notice from the
EPA, the Florida DEP or other governmental agency; or (iii) a written notice of
a claim or potential claim by a third party. Nothing herein shall preclude
Buyer from notifying the EPA, the FDEP or other appropriate governmental agency
of any violation of any Environmental Control Law if Buyer reasonably
determines that such notification is required under such laws. Notwithstanding
any other provisions contained herein, Seller and Upjohn shall only be
responsible for Environmental Claims asserted within the applicable time
limitations set forth in Section 11.01.
Section 11.06 Exclusive Remedy. (a) Each of the Buyer, Seller and
Upjohn hereby acknowledges and agrees that its sole and exclusive remedy with
respect to any and all claims relating to the covenants, agreements,
representations and warranties contained in this Agreement and the documents
required to be delivered pursuant hereto shall be pursuant to the
indemnification provisions set forth in this Article XI, and, in furtherance of
the foregoing, each of the Buyer, Seller and Upjohn hereby waives, to the
fullest extent permitted under applicable law, any and all rights, claims and
causes of action it may have against the Buyer or Seller and Upjohn, as the
case may be, arising under or based upon common law or any federal, state or
local statute, law, ordinance, rule or regulation other than any such rights,
claims or causes of action based upon fraud.
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(b) Except as set forth in this Agreement and the
documents required to be delivered pursuant hereto, neither the Buyer nor
Seller and Upjohn is making any representation, warranty, covenant or agreement
with respect to the matters contained herein.
Section 11.07 Notice. Promptly, and in no event later than ten
(10) Business Days after acquiring knowledge of any damage, loss, deficiency,
liability, claim, Encumbrance, penalty, cost, expense, action, suit,
investigation, proceeding, demand, assessment, audit, judgment, or claim
against which the Seller and Upjohn have agreed to indemnify the Buyer or
against which the Buyer has agreed to indemnify the Seller and Upjohn, the
Seller and Upjohn or the Buyer, as the case may be, will give to the other
party written notice thereof in the manner set forth in Section 16.01.
Section 11.08 Third Party Claims. With respect to each third party
claim subject to this Article XI (a "Third Party Claim"), the party seeking
indemnification (the "Indemnified Party") shall give prompt notice to the
indemnifying party (the "Indemnifying Party") of the Third Party Claim in
accordance with Section 11.07. If the remedy sought in the Third Party Claim
is solely money damages and/or equitable relief as would not have a material
adverse effect on the Indemnified Party, then the Indemnifying Party, at its
sole cost and expense, may, upon notice to the Indemnified Party within fifteen
(15) days after the Indemnifying Party receives notice of the Third Party
Claim, assume the defense of the Third Party Claim. If it assumes the defense
of a Third Party Claim then the Indemnifying Party shall select counsel of its
choosing to conduct the defense. The Indemnifying Party shall not consent to a
settlement of, or the entry of any judgment arising from, any Third Party
Claim, unless (i) the settlement or judgment is solely for money damages and/or
such equitable relief as would not have a material adverse effect on the
Indemnified Party or (ii) the Indemnified Party consents thereto, which consent
shall not be unreasonably withheld. The Indemnified Party shall be entitled to
participate in the defense of any Third Party Claim, the defense of which is
assumed by the Indemnifying Party, with its own counsel and at its own expense.
With respect to any Third Party Claim in which the remedy sought is not solely
money damages and/or such equitable relief as would not have a material adverse
effect on the Indemnified Party, then (i) the Indemnifying Party shall not be
entitled to assume the defense, (ii) the Indemnifying Party shall, upon notice
to the Indemnified Party within fifteen (15) days after the Indemnifying Party
receives notice of the Third Party Claim, be entitled to participate in the
defense with its own counsel at its own expense and (iii) the Indemnified Party
shall not consent to any settlement of, or entry of any judgment arising from,
such Third Party Claim unless the Indemnifying Party consents thereto, which
consent shall not be unreasonably withheld. If the Indemnifying Party does not
elect to assume or participate in the defense of any Third Party Claim in
accordance with the terms of
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this Section 11.08, then the Indemnified Party shall be entitled to conduct its
own defense of the Third Party Claim. The parties shall cooperate in the
defense of any Third Party Claim and the relevant records of each party shall
be made available on a timely basis.
Section 11.09 Remediation.
(a) Notwithstanding the notice provisions set forth in
Section 11.07 of this Agreement and except as otherwise expressly
provided in Section 11.05, in the event that Buyer intends to
undertake remediation work of Hazardous Substances in or on the Real
Property due to the existence of any of the circumstances, events or
conditions contemplated by Sections 11.04 or 11.05 of this Agreement,
the Buyer will give written notice to the Seller and Upjohn of its
intent to undertake such remediation, together with: (i) an estimate
of the cost to perform such remediation (hereafter referred to as the
"Estimate") and (ii) a statement of the amount expended and costs
incurred by or for the benefit of the Buyer prior to the date of such
notice, in connection with the determination of the scope and need for
such remediation. The Seller and Upjohn shall, within ten (10)
Business Days after receipt of such notice notify the Buyer either
that it will not undertake the remediation, or that it will undertake
such remediation. If the Seller and Upjohn elect not to undertake the
remediation, the Buyer shall allow Seller and Upjohn a reasonable
opportunity to comment on the Buyer's remediation plans and to
participate in any significant negotiations with governmental
authorities that may take place regarding such remediation plan.
Within ten (10) Business Days after receipt from the Buyer of an
invoice reflecting costs incurred with respect to such remediation,
Seller and Upjohn shall reimburse the Buyer for the reasonable costs
for the least costly engineering practice adequate for compliance with
applicable regulatory requirements and as set forth in such invoice
(or a portion thereof as provided in Section 11.05).
(b) In the event the Seller and Upjohn elect to undertake
the remediation of the Real Property it shall bear and pay directly
and promptly all costs of such remediation, except as otherwise
provided in Section 11.05. The Seller and Upjohn shall, in connection
therewith, be provided reasonable access to the contamination site by
the Buyer and the Seller and Upjohn shall perform or cause to be
performed, in a diligent and workmanlike manner, any and all acts
necessary to remediate the contamination of the Real Property as
required by all applicable laws, rules, and regulations and orders,
directives or instructions of any agency or judicial or quasi judicial
body having jurisdiction; provided, however, that Seller and Upjohn
shall not be required by this Agreement to comply with any laws,
rules, regulations, orders, directives,
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or instructions of any agency or judicial or quasi-judicial body if
Seller and Upjohn, in good faith, appeal, defend against, or otherwise
contest any such laws, rules, regulations, orders, directives or
instructions and hold the Buyer harmless with respect to any loss,
cost or expense resulting from a delay in performing any remediation
attributable to any such defense, contest or appeal. The Seller and
Upjohn shall not engage any consultant, engineer or any other person
to perform remediation work without the prior written consent of the
Buyer, which consent shall not be unreasonably withheld. The Seller
and Upjohn will perform such remediation in a manner so as not to
unreasonably interfere with the Buyer's business operations. The
Seller will assure that each person involved in or associated with the
remediation work is covered by (a) workers' compensation insurance
either as required by applicable law, or sufficient to compensate such
person for any injury suffered while involved in or associated with
the remediation, and (b) appropriate liability insurance sufficient to
compensate the Buyer for any loss, damage, cost, expense or charge
occasioned by such person while so involved or associated with the
remediation.
ARTICLE XII
CONDUCT OF THE PARTIES AFTER CLOSING
Section 12.01 Cooperation. The Buyer and the Seller and Upjohn
will cooperate upon and after the Closing Date in effecting the orderly
transfer of the Purchased Assets to the Buyer. Without limiting the generality
of the foregoing, the Seller and Upjohn, at the request of either party and at
the requesting party's expense, but without additional consideration, the other
party will execute and deliver from time to time such further instruments of
assignment, conveyance and transfer, will sign any documents necessary or
useful to ensure that all of the right, title and interest in and to the
Purchased Assets, the Assumed Leases and the Assumed Contracts vests in the
Buyer, will cooperate in the conduct of litigation and the processing and
collection of insurance claims, and will take such other actions as may
reasonably be required to convey and deliver more effective to the Buyer the
Purchased Assets, the Assumed Leases and the Assumed Contracts or to confirm
and perfect the Buyer's title thereto, as contemplated by this Agreement. In
addition, the Buyer shall cooperate with and assist the Seller and Upjohn in
the defense of the litigation described in Schedule 12.01 in the manner set
forth in such Schedule. All travel and other out-of-pocket expenses incurred
by the Buyer in providing such assistance shall be paid by the Seller and
Upjohn. Further, if Seller and Upjohn undertake any remediation work pursuant
to Sections 11.05 or 11.09, the Buyer shall allow Seller and Upjohn access to
the Real Estate and any
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appropriate records and documents and shall cooperate with Seller and Upjohn to
facilitate their performance of such work.
Section 12.02 Access to Books and Records. As long as the Buyer
retains the books and records of Seller's business acquired by the Buyer
hereunder, it will provide the Seller and Upjohn with reasonable access during
customary business hours to such books and records and as long as the Seller
and Upjohn retain the books and records of the Seller's business retained by
the Seller hereunder, they will provide the Buyer with reasonable access during
customary business hours to such books and records. Prior to the disposal of
any such books and records by any party hereto, such party shall provide sixty
(60) days' prior written notice to the other party and shall relinquish
possession of such books and records to such other party upon receipt of a
written request therefor within the sixty (60) day time period.
Section 12.03 Manufacturers' Warranties. After the Closing, the
Seller and Upjohn will cooperate with and assist the Buyer, at the Buyer's
expense, to pursue any manufacturers' warranty claims pending as of the Closing
Date or that may arise thereafter with respect to the Purchased Assets.
Section 12.04 Product Warranties. After the Closing, the Seller
and Upjohn shall honor in accordance with the terms thereof all product
warranties issued by the Seller to its customers prior to the Effective Time
and the Buyer will cooperate and assist the Seller and Upjohn, at the expense
of the Seller and Upjohn, in connection with the defense of claims relating to
product warranties issued by the Seller which the Seller and Upjohn in good
faith determine should not be recognized.
Section 12.05 Use of License Tags. After the Closing, the Buyer
will use its best efforts to obtain new license tags at the earliest
practicable date for all of the rolling stock included in the Purchased Assets
that require license tags. Until the earlier of (a) the date the new license
tags are issued or (b) five (5) Business Days after the Closing Date, the Buyer
shall be entitled to operate the rolling stock included in the Purchased Assets
using the Seller's license tags. The Buyer covenants and agrees that as long
as Buyer operates using Seller's license tags it shall have insurance policies
in place, including umbrella policies providing motor vehicle liability
coverage for all owned, non-owned and hired vehicles operated by the Buyer in
an amount not less than Two Hundred Fifty Million Dollars ($250,000,000) with
deductibles aggregating not more than One Million Dollars ($1,000,000). At
Closing, the Buyer shall furnish the Seller and Upjohn with a certificate of
insurance attesting that the Seller and Upjohn have been added as an additional
insured under the Seller's primary motor vehicle liability insurance policy
issued by Insurance Company of North America providing coverage up to One
Million Dollars ($1,000,000). The Buyer covenants and agrees to indemnify
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and hold harmless the Seller and Upjohn from and against all loss, cost or
expense, including reasonable attorneys' fees, by reason of any suit, claim or
demand arising out of or resulting from the Buyer's operation of the rolling
stock after the Effective Time using the Seller's license tags.
Section 12.06 Use of Asgrow Name. As provided in the Asgrow
License Agreement, the Buyer shall discontinue the use of the name "Asgrow" on
the third anniversary of the Closing Date.
Section 12.07 Deposit of Checks. The Seller and Upjohn shall
cooperate with the Buyer to a reasonable extent in making all necessary
arrangements to enable the Buyer to deposit checks and other payments with
respect to the Accounts Receivable into the Buyer's bank accounts without
endorsement by the Seller.
Section 12.08 Covenant not to Compete and Confidentiality. As a
material inducement to the Buyer to enter into this Agreement, the Seller,
Upjohn and Asgrow Seed Company jointly and severally agree that for a period of
five (5) years after the Closing Date, they will not, either directly or
indirectly, as a stockholder of any corporation or partner of any partnership
or as an owner, investor, principal or agent, or in any other manner, engage in
any business within the State of Florida which markets Fertilizers, Crop
Protection Products (both as defined below) or any other products that the
Seller currently markets within the State of Florida or any products similar
thereto; provided that this restrictive covenant shall not apply to seeds. As
used herein, "Fertilizers" means chemicals applied to plants or the soil for
nutrition and "Crop Protection Products" means both products which physically
shield plants from inclement weather and chemical fungicides, pesticides and
insecticides. Nothing contained herein shall restrict Seller, Upjohn, Asgrow
Seed Company or any of their affiliates from developing, selling or engaging in
any other activities involving biotechnology or seeds, including without
limitation, coating seeds with fungicides, pesticides and insecticides. In the
event that this restriction should ever be deemed to exceed the scope of
business, time or geographic limitations permitted by applicable law, then such
provisions shall be reformed to the maximum scope, time or geographic
limitations permitted by applicable law. The Seller, Upjohn and Asgrow Seed
Company further jointly and severally agree that from and after the Closing
Date they will hold in confidence and not make use of any proprietary
information or trade secrets that they possess relating to the business of the
Seller or the Buyer, except to the extent that (i) Asgrow Seed Company makes
use of the Customer List in connection with the sale or marketing of seeds,
(ii) disclosures are ordered by any court, and (iii) such information has
become public knowledge other than by reason of their breach of the provisions
of this Section. The Seller, Upjohn and Asgrow Seed Company hereby agree that
the covenants set forth in this Section are a material and substantial
inducement to the Buyer to enter
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into this Agreement and the transactions contemplated hereby and that in the
event of a breach of such covenants the Buyer shall be entitled to all
available legal and equitable remedies, including without limitation,
injunctive relief, both preliminary and permanent, and the Buyer shall not be
required to post a surety bond in connection therewith.
Section 12.09 Delivery of Title Policy. On or before January 28,
1994, the Seller and Upjohn shall cause the Title Policy to be delivered to the
Buyer in the amount of the purchase price allocated to the Real Property in
accordance with the provisions of Section 4.02(b)(iii).
ARTICLE XIII
BROKERAGE; EXPENSES
Section 13.01 Brokerage. The Seller and Upjohn agree to hold the
Buyer harmless with respect to any liability for brokerage fees, commissions,
finders' fees, or other such fees claimed by any broker, agent, finder, or
consultant engaged by the Seller or Upjohn in connection with the transactions
contemplated herein. The Buyer agrees to hold the Seller and Upjohn harmless
with respect to any liability for brokerage fees, commissions, finders' fees,
or other such fees claimed by any broker, agent, finder, or consultant engaged
by the Buyer in connection with the transactions contemplated herein.
Section 13.02 Transactional Expenses. Except as otherwise
expressly provided in this Agreement, the parties agree to bear their fees and
expenses incident to the negotiation, preparation, execution, delivery and
performance hereof, including without limitation, the fees and expenses of
their counsel, accountants and other experts.
ARTICLE XIV
BULK TRANSFER LAWS; SATISFACTION OF OBLIGATIONS
Section 14.01 Waiver of Compliance with Bulk Transfer Laws. To the
extent it may apply to the transactions contemplated herein, the Buyer waives
compliance by the Seller with the provisions of the Georgia Uniform Commercial
Code-Bulk Transfers. The provisions of the Florida Uniform Code-Bulk Transfers
have been repealed effective as of July 1, 1993.
Section 14.02 Satisfaction of Obligations. With the exception of
the Assumed Current Liabilities which shall be paid by the Buyer as they fall
due and employee severance benefits for which the Seller will be reimbursed by
the Buyer, the Seller and Upjohn will pay, discharge and satisfy any obligation
or liability of the Seller existing at the Effective Time arising out of
events,
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acts or occurrences or operations of the Seller prior to the Effective Time.
In turn, the Buyer will pay, discharge and satisfy when they come due the
Assumed Obligations and any obligations or liability of the Buyer which accrues
after the Effective Time arising out of events, acts or occurrences or
operation of the Purchased Assets or the business of the Buyer after the
Effective Time, and will hold the Seller and Upjohn harmless against all claims
of creditors which may be asserted against the Seller or Upjohn by reason of
its failure to pay any such obligations or liabilities.
ARTICLE XV
TERMINATION
Section 15.01 Termination by Mutual Consent. On or prior to the
Closing Date, the Buyer, the Seller and Upjohn may terminate this Agreement by
joint execution of an instrument to such effect. Subject to the provisions of
any such instrument terminating this Agreement, no party will have any
liability to the other party hereunder in the event of any termination of this
Agreement pursuant to this Section, except that the Buyer will continue to be
subject to the provisions of Section 7.03 of this Agreement relating to
confidentiality.
Section 15.02 Termination Due to Title Defect, Casualty, or
Condemnation. The Buyer may terminate this Agreement by reason of a Title
Defect, casualty or condemnation but only in accordance with the provisions of
Sections 3.03, 8.01 and 8.02, respectively, by giving written notice to the
other party of such termination. In the event of a termination of this
Agreement pursuant to this Section, no party will have any liability to the
other party hereunder, except that the Buyer will continue to be subject to the
provisions of Section 7.03 of this Agreement relating to confidentiality.
Section 15.03 Termination Attributable to Default. If either the
Buyer, on the one hand, or the Seller and Upjohn, on the other hand, breach any
warranties or default in the due and timely performance of any covenants, or
agreements under this Agreement in any material respect, the non-defaulting
party may on or before the Closing give notice of termination to the defaulting
party in the manner provided in Section 16.01. The notice shall specify with
particularity the default(s) on which this notice is based. The termination
shall be effective five (5) Business Days after service unless the specified
default(s) have been cured on or before the effective date of termination.
Termination pursuant to this Section shall relieve the non-defaulting party
from any obligations under this Agreement but shall not relieve the defaulting
party from liability for damages or other available remedies by reason of the
breach of this Agreement prior to termination.
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ARTICLE XVI
MISCELLANEOUS
Section 16.01 Notices. All notices, requests, demands and other
communications hereunder will be in writing and will be deemed given if
delivered either personally or by sending a copy thereof by fax (facsimile)
transmission, telegram (with messenger service specified), or telex or TWX
(with answer back received), and confirmed by express mail sent via recognized
overnight courier, all charges prepaid, to such party's address (or to such
party's telex, fax or telephone number). If the notice is sent by telegraph,
it will be deemed to have been given to the person entitled thereto when
deposited with a telegraph office for delivery to that person or, in the case
of fax or telex transmissions, when dispatched.
If to Buyer: Terra International, inc.
Terra Centre
600 Fourth Street
Sioux City, Iowa 51101
Attn: Burton N. Joyce,
President and CEO
Fax No. (712) 277-5429
With copy to: Terra International, Inc.
Terra Centre
600 Fourth Street
Sioux City, Iowa 51101
Attn: Mark A. Kalafut,
Vice President and
General Counsel
Fax No. (712) 279-8719
If to Seller and
Upjohn: The Upjohn Company
7000 Portage Road
Kalamazoo, Michigan 49001
Attn: Gerald A. Welch,
Executive Vice President
Fax No. (616) 323-4372
With copy to: The Upjohn Company
7000 Portage Road
Kalamazoo, Michigan 49001
Attn: Larry Moore, Esquire
Senior Counsel
Fax No. (616) 323-4372
Section 16.02 Assignability and Parties in Interest. No party may
assign any of its rights or delegate any of its obligations hereunder without
the prior written consent of the
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other party. This Agreement binds, inures to the benefit of and is enforceable
by the respective successors and permitted assigns of the parties and it does
not confer any rights on any other persons or entities.
Section 16.03 Governing Law. This Agreement will be governed by,
and construed and enforced in accordance with the laws of the State of Florida,
without giving effect to its conflicts of laws provisions.
Section 16.04 Non-Exclusive Jurisdiction. The parties agree that
any legal action or proceeding with respect to or arising out of this Agreement
may be brought either in the Hillsborough County, Florida Circuit Court or the
Kalamazoo County, Michigan Circuit Court. By execution of this Agreement, the
parties hereby submit to the non-exclusive jurisdiction of such courts and
agree to accept the process of such courts.
Section 16.05 Counterparts. This Agreement may be executed in any
number of counterparts and any party hereto may execute any such counterpart,
each of which when executed and delivered will be deemed to be an original and
all of which counterparts taken together will constitute but one and the same
instrument. The execution of this Agreement by any party hereto will not
become effective until counterparts hereof have been executed by all the
parties hereto. It will not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.
Section 16.06 Waiver. The failure of any party to insist upon
strict performance of any of the terms or conditions of this Agreement will not
constitute a waiver of any of its rights hereunder.
Section 16.07 Publicity. The Buyer, the Seller and Upjohn agree
that press releases and other announcements to be made by any of them with
respect to the transactions contemplated hereby will be subject to mutual
agreement. Notwithstanding the foregoing, each of the parties hereto may
respond to inquiries relating to this Agreement and the transactions
contemplated hereby by the press, employees or customers without any notice to
or further consent of the other parties.
Section 16.08 Complete Agreement. This Agreement, the Exhibits
hereto and the Schedules hereto delivered pursuant to this Agreement contain
the entire agreement between the parties hereto with respect to the
transactions contemplated herein and, except as provided herein, supersede all
previous oral and written and all contemporaneous oral negotiations,
commitments, writings and understandings relating to the subject matter hereof.
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Section 16.09 Modifications, Amendments and Waivers. At any time
prior to the Closing Date or termination of this Agreement, the Buyer, on the
one hand, and the Seller and Upjohn, on the other hand, may, by written
agreement:
(a) extend the time for the performance of any of the
obligations or other acts of the party hereto;
(b) waive any inaccuracies in the representations and
warranties made by the other parties contained in this Agreement or in
the Schedules hereto or any other document delivered pursuant to this
Agreement; and
(c) waive compliance with any of the covenants or
agreements of the other parties contained in this Agreement.
Section 16.10 Interpretation. The headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
Section 16.11 Severability. If any provision of this Agreement is
held illegal, invalid, or unenforceable, such illegality, invalidity, or
unenforceability will not affect any other provision hereof. This Agreement
will, in such circumstances, be deemed modified to the extent necessary to
render enforceable the provisions hereof.
Section 16.12 Time of Essence. The parties to this Agreement
acknowledge and agree that time is of the essence with respect to the
consummation of the transactions contemplated by this Agreement.
Section 16.13 No Recordation of Agreement. Neither this Agreement
nor any short form memorandum hereof shall be recorded among any public
records.
Section 16.14 Radon Disclosure. As required by Florida law, the
Seller makes the following disclosure:
"RADON GAS: Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of
radon that exceed federal and state guidelines have been found in
buildings in Florida. Additional information regarding radon and
radon testing may be obtained from your county public health unit."
Section 16.15 Gender; Number. Words of gender may be read as
masculine, feminine, or neuter, as required by context. Words of number may be
read as singular or plural, as required by context.
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All terms such as "herein," "hereby" or "hereunder" refer to this Agreement as
a whole.
Section 16.16 Exhibits and Schedules. Each Exhibit and Schedule
referred to herein is incorporated into this Agreement by such reference.
Section 16.17 No Benefit to Others. The representations,
warranties, covenants and agreements contained in this Agreement are for the
sole benefit of the parties hereto and their successors and permitted assigns,
and they will not be construed as conferring and are not intended to confer any
rights on any other persons.
ARTICLE XVII
GLOSSARY
As used in this Agreement, the following terms whether used in upper
or lower case shall have the respective meanings set forth below or in the
Section or other location in this Agreement indicated:
Accounts Receivable - Section 1.01(g)
Acquired Current Assets - Section 2.02
Acquired Working Capital - Section 2.02
Affiliate - Any controlled groups (within the meaning of
Section 414(b) of the Internal Revenue Code
of 1986, as amended (the "Code") of
which any party to this Agreement is a member,
all trades or businesses, whether or not
incorporated, under common control (within the
meaning of Section 414(c) of the Code) and of
which any party to this Agreement is a member,
and all affiliated service groups (within the
meaning of Section 414(m) of the Code of which
any party to this Agreement is a member.
Agreement - This Asset Purchase Agreement including the
Exhibits and Schedules hereto, as it may
be amended from time to time in accordance
with the terms hereof.
Asgrow License Agreement - Section 1.01(e)
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Assignment and Assumption
Agreements - Section 4.03
Assumed Obligations - Section 1.02
Assumed Purchase Orders - Section 1.02(c)
Assumed Leases - Section 1.02(a)
Assumed Contracts - Section 1.02(b)
Assumed Current Liabilities - Section 1.02(e)
Baseline Working Capital - Section 2.02
Business Days - Any day which is not a Saturday, Sunday or a
permitted or required bank holiday in
the states of Florida, Iowa or Michigan.
Buyer - Terra International, Inc., a Delaware
corporation
CAP - Section 11.05(h)
Closing Date - Section 4.01
Closing - Section 4.01
Commitment - Section 3.01
Crop Protection Products - Section 12.08
Customer Deposits - Section 1.02(d)
Customer Lists - Section 1.01(h)
Effective Time - Section 2.02
Encumbrance - Section 1.01
Environmental Control
Laws - Section 11.04(e)
Excluded Accounts
Receivables - Section 1.01(g)
Excluded Assets - Section 1.03
Excluded Facilities - Section 1.03(a)
Excluded Obligations - Section 1.02
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Exhibits - The Exhibits appended to this Agreement.
FDEP - Section 11.05(h)
Fertilizers - Section 12.08
FIFO - Section 2.02(a)
FIFRA - Section 1.01(i)
Final Closing Balance
Sheet - Section 2.02(c)
Financial Statement Date - Section 6.11
Fixed Assets - Section 1.01(b)
GAAP - Section 2.02(b)
Hazardous Substance - Section 11.01
Initial Closing Balance
Sheet - Section 2.02(b)
Intellectual Property - Section 1.01(e)
Inventory - Section 1.01(c)
Joint Inventory - Section 2.02(a)
Other Instruments of
Conveyance - Section 4.04
Party or Parties - Preamble
Permitted Exceptions - Section 3.01(a)
Person - An individual, partnership, corporation,
trust, unincorporation organization, or
a federal, state, local or foreign
governmental body or agency.
Plant City Real Property - Section 11.05(h)
Promotional Rights - Section 1.01(f)
Purchased Assets - Section 1.01
Qualified Claims - Section 11.05(b)
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Real Property - Section 1.01(a)
Records - Any paper, document, file or record of any
kind, whether recorded in writing or on
magnetic, optical, or any other storage
medium, and including without limitation all
computer records in whatever form.
Rolling Stock - Automobiles, trucks, trailers, forklifts,
loaders, spreaders, tractors and other
motorized vehicles of every type and kind.
Schedules - The schedules appended to this Agreement.
Seller - Asgrow Florida Company, a Florida corporation
Seller's Financial
Statements - Section 6.11
Seller's Prepayments - Section 1.01(j)
Structures - Section 6.09
Supplies - Section 1.01(d)
Survey - Section 3.02
Tax - Any federal, state, local or foreign tax
assessment, fee, interest, penalty or
other governmental charge of any kind.
Third Party Claim - Section 11.08
Threshold Amount - Section 11.05(a)
Title Policy - Section 3.01
Title Defects - Section 3.03
Title Company - Section 3.01
Upjohn - The Upjohn Company, a Delaware corporation
UST - Section 7.01(k)
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IN WITNESS WHEREOF, EACH OF THE PARTIES HERETO HAS CAUSED THIS
AGREEMENT TO BE SIGNED AS OF THE DATE FIRST ABOVE WRITTEN.
<TABLE>
<S> <C>
ATTEST: TERRA INTERNATIONAL, INC.,
A DELAWARE CORPORATION
BY: /s/ BY: /s/ BURTON M. JOYCE
--------------------- ----------------------------
TITLE: Vice President and General Counsel NAME: BURTON M. JOYCE
----------------------------------- TITLE: PRESIDENT AND CHIEF
EXECUTIVE OFFICER
ATTEST: THE UPJOHN COMPANY,
A DELAWARE CORPORATION
BY: /s/ BY: /s/ GERALD A. WELCH
--------------------- ----------------------------
TITLE: Senior Attorney NAME: GERALD A. WELCH
------------------ TITLE: EXECUTIVE VICE PRESIDENT
ATTEST: ASGROW FLORIDA COMPANY,
A FLORIDA CORPORATION
BY: /s/ BY: /s/ GERALD L. CRANE
--------------------- ----------------------------
TITLE: Secretary NAME: GERALD L. CRANE
------------------ TITLE: PRESIDENT
</TABLE>
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LIMITED JOINDER
IN ORDER TO INDUCE THE BUYER TO ENTER INTO THIS AGREEMENT, ASGROW SEED
COMPANY HEREBY JOINS IN THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN FOR
THE LIMITED PURPOSE OF ADOPTING AND AGREEING TO COMPLY WITH THE RESTRICTIVE
COVENANTS SET FORTH IN SECTION 12.08 HEREOF.
<TABLE>
<S> <C>
ASGROW SEED COMPANY,
A DELAWARE CORPORATION
ATTEST:
BY: /s/ BY: /s/ NORMAN A. BRAKSICK
----------------------- -------------------------
TITLE: Secretary TITLE: PRESIDENT
-------------------- ----------------------
</TABLE>
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