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
July 25, 1996
(Date of earliest event reported)
STOKELY USA, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 0-13943
Wisconsin 39-0513230
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
1055 Corporate Center Drive
Oconomowoc, Wisconsin 53066
(Address of principal executive offices) (Zip Code)
(414) 569-1800
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The sale of substantially all the Company's frozen business
assets was completed on July 25, 1996 to Dean Foods Vegetable
Company, AGRIPAC and The Freezer Group Acquisition, L.L.C. The
pending sale and related terms of the sale were disclosed in a
Current Report on Form 8-K dated May 23, 1996 and in the
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1996.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) Not applicable.
(b) Unaudited Pro Forma Consolidated Financial Information of
Stokely USA, Inc.
The following unaudited pro forma consolidated balance sheet
reflects the consolidated balance sheet of Stokely USA, Inc. as
of March 31, 1996 assuming the sale of the frozen business was
consummated at March 31, 1996. The following unaudited pro forma
consolidated statement of operations reflects the consolidated
statement of operations of Stokely USA, Inc. for the year ended
March 31, 1996 assuming the sale of the frozen business was
consummated at April 1, 1995.
The pro forma consolidated balance sheet as of March 31, 1996 and
the pro forma consolidated statement of operations for the year
then ended have been prepared by Stokely USA, Inc. management
based upon the audited and unaudited financial statements of
Stokely USA, Inc. for the periods indicated. The pro forma
consolidated statement of operations is not necessarily
indicative of the results that actually would have occurred if
the sale of the frozen business had occurred at April 1, 1995 or
which may be obtained in the future. The pro forma financial
statements should be read in conjunction with the audited
financial statements of Stokely USA, Inc. for the year ended
March 31, 1996 on Form 10-K, incorporated herein by reference.
<PAGE>
<TABLE>
Stokely USA, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
ASSETS
<CAPTION>
March 31, 1996
Stokely
USA, Pro-Forma Pro-Forma
(Dollars in thousands) Inc. Adjustments Results
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 777 $ 777
Accounts receivable, less allowance
for losses ($570 and $452, respectively) 16,975 16,975
Refundable income taxes 11 11
Inventories 85,404 $(15,000) 70,404
Prepaid expenses 1,406 1,406
Property held for disposition 9,500 (9,500) --
TOTAL CURRENT ASSETS 114,073 (24,500) 89,573
OTHER ASSETS 4,147 4,147
PROPERTY, PLANT AND EQUIPMENT, at cost
Land and land improvements 2,973 2,973
Buildings 27,217 27,217
Machinery and equipment 60,952 60,952
91,142 91,142
Less accumulated depreciation 33,641 33,641
57,501 57,501
TOTAL ASSETS $175,721 $(24,500) $151,221
See Notes to Unaudited Pro Forma Consolidated Statements.
</TABLE> <PAGE>
<TABLE>
Stokely USA, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
March 31, 1996
Stokely
USA, Pro-Forma Pro-Forma
(Dollars in thousands) Inc. Adjustments Results
<S> <C> <C> <C>
CURRENT LIABILITIES:
Notes payable $ 19,887 $(15,000) $ 4,887
Accounts payable 21,365 21,365
Accrued compensation and withholdings 2,546 2,546
Other accrued liabilities 6,447 (500) 5,947
Income taxes 260 260
Current maturities on long-term debt 15,150 (9,000) 6,150
TOTAL CURRENT LIABILITIES 65,655 (24,500) 41,155
LONG-TERM DEBT, less current maturities 77,230 77,230
OTHER LIABILITIES 3,269 3,269
STOCKHOLDERS' EQUITY
Preferred stock - no par value, authorized
1,000,000 shares, none issued
Common stock - $.05 par value, authorized
20,000,000 shares, issued 11,435,195 572 572
Additional paid-in capital 43,683 43,683
Retained earnings (14,070) (14,070)
30,185 30,185
Less treasury stock at cost (108,754 and
110,550 shares, respectively) (618) (618)
29,567 29,567
COMMITMENTS AND CONTINGENCIES
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $175,721 $(24,500)$151,221
See Notes to Unaudited Pro Forma Consolidated Statements.
</TABLE> <PAGE>
<TABLE>
Stokely USA, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements Of Operations
(Dollars in thousands except per share amounts)
<CAPTION>
Year Ended March 31, 1996
Less
Stokely Frozen
USA, Business Pro-Forma Pro-Forma
Inc. Results Adjustments Results
<S> <C> <C> <C> <C>
REVENUES:
Net sales $206,251 $38,095 $168,156
Other 147 -- 147
TOTAL REVENUES 206,398 38,095 168,303
COSTS AND EXPENSES:
Cost of products sold 175,865 35,559 140,306
Selling, general and
administrative expenses 36,672 3,611 33,061
Nonrecurring charge 12,500 12,500 --
Interest 10,182 2,802 7,380
TOTAL COSTS AND EXPENSES 235,219 54,472 180,747
LOSS BEFORE INCOME TAXES (CREDIT) (28,821) (16,377) (12,444)
INCOME TAXES -- -- -- --
NET EARNINGS (LOSS) $(28,821) $(16,377) $(12,444)
PER SHARE AMOUNTS:
NET EARNINGS (LOSS)PER SHARE OF
COMMON STOCK $(2.54) $(1.44) $(1.10)
WEIGHTED AVERAGE SHARES OUTSTANDING 11,326,245 11,326,245 11,326,245
See Notes to Unaudited Pro Forma Consolidated Statements.
</TABLE>
<PAGE>
Stokely USA, Inc. and Subsidiaries
Notes to Pro Forma Consolidated Condensed Financial Statements
1. Pro Forma Adjustments - The pro forma adjustments on the
balance sheet assume that all proceeds related to the sale
of substantially all of the frozen assets were received on
March 31, 1996 and applied to outstanding debt and notes
payable.
(c) Exhibits:
Exhibit 99.1 Inventory Purchase Agreement by and among
Dean Foods Vegetable Company, AGRIPAC and
Stokely USA, Inc. dated July 22, 1996 for
frozen vegetable products.
Exhibit 99.2 Plant Purchase Agreement by and among AGRIPAC
and Stokely USA, Inc. dated July 22, 1996 in
respect to the Walla Walla, Washington plant
and related assets.
Exhibit 99.3 Plant Purchase Agreement by and among The
Freezer Group Acquisition, L.L.C. and Stokely
USA, Inc. dated July 22, 1996 in respect to
the Grandview, Washington plant and related
assets.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
STOKELY USA, INC.
Registrant
Date: August 9, 1996 /s/ Stephen W. Theobald
Stephen W. Theobald
President and Chief Executive
Officer
Date: August 9, 1996 /s/ Leslie J. Wilson
Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
STOKELY USA, INC.
Registrant
Date: August 9, 1996
Stephen W. Theobald
President and Chief Executive
Officer
Date: August 9, 1996
Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
INVENTORY PURCHASE AGREEMENT
THIS INVENTORY PURCHASE AGREEMENT (which, including the
exhibits attached hereto, is hereby called the "Agreement") is
made this 22nd day of July, 1996, by and among DEAN FOODS
VEGETABLE COMPANY, a Wisconsin corporation ("DFVC"); AGRIPAC, an
Oregon agricultural cooperative ("AGRIPAC"), and Stokely USA,
Inc. a Wisconsin corporation ("Stokely").
RECITALS:
A. Stokely owns certain assets, including plants located in
Grandview, Washington and Walla Walla, Washington (the "Plants"),
which it has used to process frozen vegetable products (the
"Products").
B. Stokely has decided to exit the business of the
manufacture and sale of Products (the "Business") and desires to
sell its inventory of Products to DFVC and AGRIPAC under the
terms and conditions set forth herein and the Plants to AGRIPAC
under the terms and conditions to be set forth in a Plant
Purchase Agreement between Stokely and AGRIPAC (the "Plant
Purchase Agreement").
NOW, THEREFORE, in consideration of the recitals, the
mutual benefits to be derived from this Agreement and the mutual
and dependent promises herein contained, the parties hereto do
represent, warrant, covenant and agree as follows:
1. SALE AND PURCHASE OF INVENTORY
1.1 DFVC INVENTORY
For the price and subject to the terms and conditions set
forth in this Agreement, and in reliance on the representations,
warranties, covenants and agreements hereinafter set forth,
Stokely hereby sells, assigns, transfers and delivers to DFVC,
and DFVC hereby purchases and acquires from Stokely, the Product
identified in Exhibit A-1 attached hereto (the "Dean Inventory").
1.2 AGRIPAC INVENTORY
For the price and subject to the terms and conditions set
forth in this Agreement, and in reliance on the representations,
warranties, covenants and agreements hereinafter set forth,
Stokely hereby sells, assigns, transfers and delivers to AGRIPAC,
and AGRIPAC hereby purchases and acquires from Stokely, the
Product identified in Exhibit A-2 attached hereto (the "AGRIPAC
Inventory") and all of Stokely's rights, title and interest in
and to those contracts related to the AGRIPAC Inventory as
described in Exhibit B, attached hereto (the "Commitments").
<PAGE>
2. PURCHASE PRICE
2.1 PURCHASE PRICE
As payment in full for the Dean Inventory and AGRIPAC
Inventory (together, the "Closing Inventory"), DFVC and AGRIPAC,
as the case may be, will pay to Stokely and Stokely will accept
the value of the Dean Inventory and AGRIPAC Inventory as set
forth in Exhibits A-1 and A-2 respectively, plus the value of
Inventory purchased by DFVC or AGRIPAC prior to Closing but not
paid for as of the Closing as reflected in the accounts
receivable listing set forth on Exhibit A-3 (collectively the
"Inventory Purchase Price").
3. THE CLOSING
The consummation of the purchase and sale of the Closing
Inventory (the "Closing") shall take place on July 22, 1996, at
2:00 p.m. (local time) at the offices of Chicago Title in
Waukesha, Wisconsin. At the Closing:
3.1 Stokely will execute and deliver to DFVC and AGRIPAC
such bills of sale, assignments, endorsements, and other good and
sufficient instruments of transfer or conveyance as DFVC and
AGRIPAC may reasonably request, in order to convey and transfer
to DFVC and AGRIPAC good and marketable title to the Closing
Inventory, free and clear of all liens, claims and encumbrances.
3.2 AGRIPAC will execute and deliver to Stokely such
instruments of assumption as Stokely reasonably may request to
effectuate the assumption by AGRIPAC of certain obligations and
commitments of Stokely to be assumed by AGRIPAC pursuant to the
provisions of Section 4 hereof.
3.3 DFVC and AGRIPAC shall pay to Stokely the Inventory
Purchase Price, by wire transfer of federal funds.
3.4 Stokely shall deliver to DFVC possession of the Dean
Inventory as a transfer in place, and to AGRIPAC possession of
the AGRIPAC Inventory as a transfer in place, and the entire
right, title and interest of Stokely in and to the Dean Inventory
and AGRIPAC Inventory shall pass to DFVC and AGRIPAC
respectively, on the Closing Date; and
3.5 The parties shall deliver all other documents required
by the provisions hereof to be delivered at the Closing.
4. ASSUMPTION OF LIABILITIES
4.1 ASSUMED LIABILITIES
At the Closing, AGRIPAC will assume and agree to pay,
perform and discharge only those liabilities (the "Assumed
Liabilities") of Stokely which first accrue or are to be
performed or satisfied on or after the Closing Date under the
Commitments listed on Exhibit B.
4.2 EXCLUDED LIABILITIES
Except as set forth in Section 4.1, DFVC and
AGRIPAC will not assume any obligations or liabilities of
Stokely.
5. REMAINING INVENTORY
5.1 PURCHASE OF REMAINING INVENTORY
Stokely owns additional finished goods and bulk inventory
described on Exhibit 5.1. Said inventory, less the Closing
Inventory and inventories determined by Dean before or after the
Closing to be unsaleable due to quality defects, shall be
referred to as the Remaining Inventory. The Remaining Inventory
and the Closing Inventory shall be referred to collectively as
the "Inventory". Stokely agrees that the Remaining Inventory
includes a product mix that is proportionately the same as the
product mix reflected in Exhibit A to the Agreement in Principle
dated April 30, 1996, plus or minus fifteen percent (15%) by
product, except as otherwise mutually agreed to by the parties.
Dean agrees to purchase the Remaining Inventory for its own use
or to supply sales by Dean to third parties during the period
from Closing through the earlier of November 15, 1996, or when
the amount of Remaining Inventory is equal to or less than
10,000,000 pounds. Stokely shall be responsible for all storage
and other carrying costs associated with the Remaining Inventory
until it is purchased by DFVC. Stokely will pay AGRIPAC storage
and handling fees for any Remaining Inventory stored at the
Plants at the following rates:
Handling Monthly Storage
Bulk in Totes $ .225/cwt. $ .34/cwt.
Finished Goods Cases $ .29/cwt. $ .36/cwt.
Upon the purchase of Remaining Inventory, Dean shall pay
Stokely the Inventory Purchase Price therefor as indicated on
Exhibit 5.1. On the earlier of November 15, 1996, or when the
amount of Remaining Inventory is less than or equal to 10,000,000
pounds (the "Remaining Inventory Purchase Date"), Dean shall
purchase such Remaining Inventory from Stokely at the Inventory
Purchase Price therefor.
5.2 SET OFF
To the extent that any DFVC or AGRIPAC Inventory purchased
at Closing is later determined by DFVC or AGRIPAC, as the case
may be, to be unsaleable due to quality defects existing at
Closing, DFVC shall notify Stokely in writing of same and may
deduct the Inventory Purchase Price associated with the
unsaleable Inventory from payments due to Stokely for Remaining
Inventory pursuant to Section 5.1. Dean will pay over to AGRIPAC
any amounts set off against payments due Stokely that are related
to unsaleable AGRIPAC Inventory . If Stokely disagrees with
Dean's or AGRIPAC's determination as to saleability, the parties
shall confer to resolve the disagreement. If the disagreement
cannot be resolved within 10 days of Stokely's receipt of the
written notice, then an inspector from the Federal Department of
Agriculture who is mutually agreeable to both parties shall
inspect the Inventory claimed to be unsaleable due to quality
defects existing at Closing to determine whether the said
Inventory is unsaleable due to quality defects existing at
Closing. The parties shall abide by the determination of such
inspector and Stokely shall be responsible for all costs and
expenses associated with such inspection. In the event that any
of the Inventory is determined by the inspector not to be
unsaleable due to quality defects existing at Closing, then DFVC
or AGRIPAC, as the case may be, shall repay Stokely the amounts
set off pursuant to the first sentence of this Section 5.2 In the
event amounts due for unsaleable Inventory exceed payments due
Stokely for Remaining Inventory, Stokely shall pay to AGRIPAC or
Dean, as the case may be, the excess amounts immediately upon
demand.
6. REPRESENTATIONS AND WARRANTIES OF STOKELY
Stokely represents and warrants to DFVC and AGRIPAC as
follows:
6.1 ORGANIZATION AND STANDING OF STOKELY
Stokely is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Wisconsin. Stokely has full corporate power and authority to
own its property and to carry on its business as it is now being
conducted, and Stokely has the corporate power and authority to
execute and deliver, and carry out the transactions on their part
contemplated by, this Agreement.
6.2 TITLE TO INVENTORY
Stokely has good and marketable and insurable title to
all the Inventory, free and clear of any and all liens, claims,
security interests, charges or encumbrances of any kind or
character, including without limitation, warehousemen's liens and
liens arising under the Perishable Agriculture Commodities Act,
except as set forth in Exhibit 6.2. The sale and delivery of the
Inventory pursuant hereto shall vest in DFVC and AGRIPAC, as the
case may be, good and marketable title thereto, free and clear of
any and all liens, claims, security interests, charges or
encumbrances of any kind or character.
6.3 INVENTORY
The Inventory is of good and merchantable quality, is
saleable or useable for the purpose for which it is intended,
without any material defects, meets Stokely's current
specifications and standards as well as any other applicable
specifications and standards, and is not damaged or obsolete.
All finished products and work in process included in the
Inventory are neither (i) adulterated or misbranded within the
meaning of the Federal Food, Drug and Cosmetics Act (the "FDC
Act") as amended, 21 U.S.C. Section 301, et seq., including the
Food Additives Amendment of 1958; (ii) articles which may not,
under the provisions of Section 404 or 505 of the FDC Act, be
introduced into interstate commerce; nor (iii) adulterated or
misbranded within the meaning of any food and drug law,
regulation or ordinance. The current location of the Inventory
is as set forth on Exhibit 6.3.
6.4 BOOKS AND RECORDS
All books, records and other information of Stokely
provided to DFVC or AGRIPAC by Stokely or its representatives
relating to the Inventory are accurate, complete and properly
reflect: (i) the Inventory on-hand; (ii) the first-in, first-out
Standard Cost of manufacturing said Inventory determined on a
consistent basis since April 1, 1995; (iii) the aging of the
Inventory on-hand; and (iv) the quality and grade specifications
of the Inventory on-hand.
6.5 COMPLIANCE WITH LAW
Stokely has conducted and is conducting its business in
compliance with all laws, rules and regulations, domestic or
foreign, applicable to it or the Inventory. All authorizations,
permits and licenses held by Stokely and related to the
manufacture of the Inventory are valid and subsisting.
6.6 CLAIMS AND LITIGATION
There are no actions, suits, judgments, decrees, orders
or proceedings (whether or not purportedly on behalf of Stokely)
pertaining to or, to the best knowledge of Stokely, threatened
against Stokely or affecting the Inventory or the sale thereof.
To the best knowledge of Stokely, there are no existing grounds
on which any such action, suit or proceeding might be commenced.
Stokely has delivered to DFVC and AGRIPAC a listing of all
consumer complaints relating to the Products during the previous
three (3) year period.
6.7 COMMITMENTS
Each of the Commitments was entered into by Stokely in the
ordinary course of its business. Stokely has furnished to
AGRIPAC on or before the date of this Agreement with correct and
complete copies of all Commitments, and there have been no
modifications, amendments or terminations thereof not reflected
in such copies. Each of the Commitments is valid, binding,
subsisting and enforceable in accordance with its terms. Stokely
has performed, and has the ability to continue to perform, all
obligations required to be performed by it under each Commitment,
and is not in any respect in breach of or default under, nor in
receipt of any claim of default or breach under, any Commitment;
no event has occurred which with the passage of time or giving of
notice or both would cause such a breach of or default under any
Commitment; Stokely has no present expectation or intention of
not fully performing, or inability to perform, its obligations
under any Commitment; and Stokely has no knowledge of any breach
or anticipated breach by any other party to any Commitment. The
prices due under the Commitments, in the aggregate, exceed the
Inventory Purchase Price allocated to the products to be sold
pursuant to such Commitments.
6.8 AUTHORITY FOR TRANSACTION
The execution and delivery of this Agreement by Stokely,
the performance by Stokely of its obligations hereunder, and the
consummation of the transactions contemplated herein have been
duly authorized and approved by all necessary corporate action on
the part of Stokely. This Agreement and any other agreements or
instruments contemplated hereby constitute the legal, valid and
binding obligations of the Stokely, enforceable against it in
accordance with their respective terms.
6.9 NO CONFLICT
The execution and delivery of this Agreement by Stokely,
the consummation of the transactions provided for herein and the
fulfillment of the terms hereof, will not result in a breach of
any of the terms and provisions of, or constitute a default under
or conflict with, any agreement, indenture or other instrument to
which Stokely is a party or by which Stokely or any of the
Inventory is bound, the charter or by-laws of Stokely or any
judgment, decree, order or award of any court, governmental body
or arbitrator or any law, rule or regulation applicable to
Stokely and will not result in the creation or imposition of any
lien, security interest, charge or encumbrance on any of the
Inventory. No consent, authorization or approval of, or the
granting of any exemption by, any governmental or public body or
authority is required in connection with the execution, delivery
and performance by Stokely of this Agreement or the taking of any
action by Stokely provided for herein.
7. REPRESENTATIONS OF DFVC
DFVC represents and warrants to Stokely as follows:
7.1 ORGANIZATION AND STANDING OF DFVC
DFVC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin.
DFVC has the corporate power and authority to execute and
deliver, and carry out the transactions on its part contemplated
by, this Agreement.
7.2 AUTHORITY FOR TRANSACTION
The execution and delivery of this Agreement by DFVC,
the performance by DFVC of its obligations hereunder, and the
consummation of the transactions contemplated herein have been
duly authorized and approved by all necessary corporate action on
the part of DFVC. This Agreement constitutes a legal, valid and
binding obligation of DFVC, enforceable against DFVC in
accordance with its terms.
7.3 NO CONFLICT
The execution and delivery of this Agreement by DFVC,
the consummation of the transactions provided for herein and the
fulfillment of the terms hereof, will not result in a breach of
any of the terms and provisions of, or constitute a default under
or conflict with, any agreement, indenture or other instrument to
which DFVC is a party or by which DFVC is bound, the charter or
by-laws of DFVC or any judgment, decree, order or award of any
court, governmental body or arbitrator or any law, rule or
regulation applicable to DFVC. No consent, authorization or
approval of, or the granting of any exemption by, any
governmental or public body or authority is required in
connection with the execution, delivery and performance by DFVC
of this Agreement or the taking of any action by DFVC herein
provided.
8. REPRESENTATIONS OF AGRIPAC
AGRIPAC represents and warrants to Stokely as follows:
8.1 ORGANIZATION AND STANDING OF DFVC
AGRIPAC is an agricultural cooperative duly organized,
validly existing and in good standing under the laws of the State
of Oregon. AGRIPAC has the corporate power and authority to
execute and deliver, and carry out the transactions on its part
contemplated by, this Agreement.
8.2 AUTHORITY FOR TRANSACTION
The execution and delivery of this Agreement by AGRIPAC,
the performance by AGRIPAC of its obligations hereunder, and the
consummation of the transactions contemplated herein have been
duly authorized and approved by all necessary corporate action on
the part of AGRIPAC. This Agreement constitutes a legal, valid
and binding obligation of AGRIPAC, enforceable against AGRIPAC in
accordance with its terms.
8.3 NO CONFLICT
The execution and delivery of this Agreement by AGRIPAC,
the consummation of the transactions provided for herein and the
fulfillment of the terms hereof, will not result in a breach of
any of the terms and provisions of, or constitute a default under
or conflict with, any agreement, indenture or other instrument to
which AGRIPAC is a party or by which AGRIPAC is bound, the
charter or by-laws of AGRIPAC or any judgment, decree, order or
award of any court, governmental body or arbitrator or any law,
rule or regulation applicable to AGRIPAC. No consent,
authorization or approval of, or the granting of any exemption
by, any governmental or public body or authority is required in
connection with the execution, delivery and performance by
AGRIPAC of this Agreement or the taking of any action by AGRIPAC
herein provided.
9. CONFIDENTIALITY
Each of the parties hereto agrees to use its best
efforts to keep confidential any and all information and data
with respect to the other party which it has received as a result
of any investigation made in connection with this Agreement and
which is not otherwise available to the public; provided,
however, that notwithstanding the foregoing each of the parties
hereto shall be free to disclose any such information or data (a)
to the extent required by applicable law or (b) during the course
of or in connection with any litigation, arbitration or other
proceeding based upon or in connection with the subject matter of
this Agreement, including, without limitation, the failure of the
transactions contemplated hereby to be consummated. Neither
Stokely, Dean nor AGRIPAC will make any public announcement or
communication to employees, customers or suppliers regarding the
subject matter of the transaction contemplated by this Agreement
without the prior approval of the others, other than disclosures
required by law.
10. SURVIVAL AND INDEMNIFICATION
10.1 SURVIVAL OF REPRESENTATIONS
The representations, warranties, covenants and
agreements of the parties contained herein shall be continuing
and shall survive the consummation of this transaction,
notwithstanding any investigation by or on behalf of any party.
Consummation of the transactions contemplated herein shall not be
deemed to be a waiver of any right or remedy possessed by any
party hereto, notwithstanding that such party knew or should have
known at the time of the Closing that such right or remedy
existed.
10.2 INDEMNIFICATION BY STOKELY
Stokely shall indemnify and hold harmless DFVC and
AGRIPAC against and in respect of any and all of the following
and any and all loss, liability, damage or expense (including
reasonable attorneys' fees and expenses and interest and
penalties) suffered or incurred by either of them arising out of
or resulting from any of the following:
10.2.1 Any misrepresentation or breach of warranty on
the part of Stokely in this Agreement, or any misrepresentation
in or omission from any Exhibit, certificate or other instrument
furnished or to be furnished to DFVC and AGRIPAC hereunder;
10.2.2 Any breach or non-fulfillment of any covenant or
agreement on the part of Stokely in this Agreement or any
agreement, instrument or document delivered in connection
herewith, or the failure to comply with any applicable
requirements of the bulk transfer provisions of the Uniform
Commercial Code or any other applicable state law;
10.2.3 Any liability or obligation of Stokely for which
DFVC and/or AGRIPAC becomes liable, or in respect of which any
claim may be asserted against DFVC or AGRIPAC, which is not
assumed by DFVC or AGRIPAC pursuant to Section 4.1, including in
particular, but without limitation, any claim or demand arising
out of or in connection with any matter referred to in Section
4.2; and
10.2.4 Any actions, suits, proceedings, demands, or
assessments incident to any of the foregoing and any
investigation or defense against claims which, if proven, would
be covered thereby.
The items referred to in Subsections 10.2.1
through 10.2.4 are hereinafter collectively referred to as
"Buyer's Damages". Stokely shall be jointly and severally liable
and shall reimburse DFVC or AGRIPAC on demand for any Buyer's
Damages.
10.3 NOTICE OF CLAIM
In the event that any legal proceeding shall be
instituted or any claim or demand shall be asserted by any person
in respect of which DFVC or AGRIPAC intends to seek
indemnification under the provisions of this Section 10., DFVC or
AGRIPAC, as the case may be, shall promptly cause written notice
thereof to be given to Stokely. Notwithstanding the foregoing,
DFVC's or AGRIPAC's right to indemnification hereunder shall not
be affected by any delay in giving notice unless, and then only
to the extent that, the rights and remedies of Stokely shall have
been prejudiced as a result of the delay in giving such notice.
In the event that Stokely has acknowledged that it will indemnify
and reimburse Buyer's Damages with respect to a particular
lawsuit, claim or demand, Stokely shall be permitted to control
the conduct of any defense and, at the expense and option of
Stokely, may settle such claim. DFVC or AGRIPAC shall make no
settlement of any such suit, claim or demand without Stokely'
prior written consent (which consent shall not be unreasonably
withheld) unless Stokely shall have failed to accept such defense
within twenty (20) days after Stokely has been notified of such
suit, claim or demand or unless Stokely has failed to diligently
maintain such defense after such acceptance, or unless the matter
in question shall have been finally determined adversely to
Stokely (or DFVC or AGRIPAC) by a court or governmental
instrumentality having jurisdiction thereof. DFVC and AGRIPAC
shall cooperate with Stokely in each such defense, but all DFVC's
or AGRIPAC's out-of-pocket expenses are to be Buyer's Damages.
It shall be no defense to the claims by DFVC or AGRIPAC for
indemnification hereunder that a third party claimant cannot or
does not prove his claim.
10.4 OFFSET
DFVC shall have the right to offset against any payment
owing from it to Stokely hereunder, an amount equal to Buyer's
Damages, and the right of Stokely to any such payment shall be
subject to such right of DFVC to withhold such payment.
11. POST CLOSING COVENANTS AND AGREEMENTS
11.1 COMMUNICATIONS TO STOKELY
Stokely hereby authorizes and empowers DFVC and AGRIPAC,
from time to time after the Closing: (a) to receive and open all
mail and other communications to Stokely received by DFVC or
AGRIPAC; and (b) to deal with the contents of such communications
in any proper manner, consistent with the parties' respective
rights and obligations under this Agreement, if such
communications relate to the Inventory. DFVC or AGRIPAC shall
promptly provide Stokely copies of all such communications which
appear on their face to relate to Stokely's continuing rights and
obligations under this Agreement.
11.2 RIGHT OF FIRST REFUSAL. Dean shall have a right of
first refusal, for a period of three (3) years following Closing,
to purchase Stokely's Green Bay, Wisconsin plant on the same
terms and conditions as contained in any bona fide third party
offer to purchase the plant. Within fifteen (15) days of receipt
of an offer for the Green Bay plant, Stokely shall notify DFVC in
writing, setting out the terms and conditions of the offer. DFVC
shall then have thirty (30) days in which to notify Stokely that
it intends to exercise its right to purchase the Green Bay plant
on the terms and conditions as set forth in the offer. Closing
of the purchase shall occur as soon as reasonably possible after
notice of DFVC's exercise of its right of first refusal.
11.3 RESTRICTIVE COVENANTS. For a period of three (3)
years following Closing, neither Stokely nor any subsidiary of
Stokely shall engage in the manufacture or sale of frozen
vegetable products in the territory consisting of all markets
served by the Business at the time of Closing, except to the
extent that Stokely is acquired by or merges with a third party
who at the time of such acquisition or merger is engaged in the
business of manufacturing and/or selling frozen vegetable
products in said territory or any part of said territory.
12. MISCELLANEOUS
12.1 PUBLIC ANNOUNCEMENT
No press release or other formal public announcement
with respect to this Agreement or any of the transactions
contemplated hereby shall be made without the express approval of
DFVC, AGRIPAC and Stokely; provided, however, that if, in the
opinion of counsel for Dean or Stokely or AGRIPAC public
disclosure of the pendency of such transactions is required under
the Federal securities laws, the consent or approval of the other
to the release of such publicity and the content thereof shall
not be unreasonably withheld.
12.2 PAYMENT OF COSTS, EXPENSES AND TRANSFER TAXES
Except as otherwise provided herein, each of the parties
hereto shall bear the costs, fees and expenses incurred by it in
connection with the negotiation, execution and performance of
this Agreement, including counsel and accountant fees. The cost
of all sales, transfer and documentary taxes, if any, payable in
connection with the sales, transfers and deliveries to be made
hereunder shall be paid by Stokely.
12.3 NON-ASSIGNMENT; SUCCESSORS AND ASSIGNS
This Agreement shall not be assignable by any party
without the consent of the others. This Agreement shall be
binding upon and shall inure to the benefit of DFVC, AGRIPAC and
Stokely and their permitted successors and assigns..
12.4 ENTIRE AGREEMENT
All statements contained in the Exhibits hereto or any
certificate or other document or instrument delivered by or on
behalf of any of the parties pursuant to this Agreement shall
constitute representations and warranties by the party making
such statements or on whose behalf such statements are made.
This Agreement, together with the Schedules and Exhibits hereto,
sets forth the entire understanding of the parties, and
supersedes all prior agreements, arrangements and communications,
whether oral or written, with respect to the subject matter
hereof. This Agreement shall not be modified or amended except
by written agreement of the parties hereto. The representations,
warranties, covenants, agreements and indemnifications provided
for in this Agreement shall be unaffected by any investigation
made by or on behalf of any party hereto.
12.5 SEVERABILITY; ENFORCEABILITY
The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as
if the invalid or unenforceable provision was omitted. Insofar
as any of the representations and warranties contained in
Sections 6, 7 and 8 of this Agreement relate to the
enforceability of any agreement in accordance with its terms, in
each instance such representation, warranty or opinion is
subject, as to enforceability of remedies, to applicable
bankruptcy, reorganization, insolvency and similar laws and to
moratorium laws form time to time in effect and to the discretion
of the court before which any proceeding therefor is brought in
ordering any equitable relief such as specific performance or
injunctive relief.
<PAGE>
12.6 COUNTERPARTS
This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument,
and in pleading or proving any provision of this Agreement it
shall not be necessary to produce more than one such counterpart.
12.7 NOTICES
Any notice or other instrument or thing required or
permitted to be given, served or delivered to any of the parties
hereto shall be in writing and shall be deemed to have been
given, served or delivered when personally delivered to, or 72
hours after being deposited in the United States mails,
registered and with proper postage prepaid, addressed as follows:
(a) If to Stokely, to:
Les Wilson
Stokely USA, Inc.
1055 Corporate Center Drive
Oconomowoc, Wisconsin 53066-0248
With a copy to:
Robert Brill
Stokely USA, Inc.
1055 Corporate Center Drive
Oconomowoc, Wisconsin 53066-0248
(b) If to DFVC, to:
Dean Foods Vegetable Company
520 N. Broadway
Green Bay, Wisconsin 54307
Attention: Jeff Shaw
With a copy to:
Eric A. Blanchard
Dean Foods Company
3600 N. River Road
Franklin Park, Illinois 60131
(C) If to AGRIPAC, to:
George Crispin
AGRIPAC
P.O. Box 5345
Salem, Oregon 97304
provided, however, that if any party shall have designated a
different address by notice to the other, then to the last
address so designated.
<PAGE>
12.8 WAIVERS
Any waiver by Stokely, AGRIPAC or DFVC of any breach of
or failure to comply with any provision of this Agreement by the
other party shall be in writing and shall not be construed as, or
constitute, a continuing waiver of such provision, or a waiver of
any other breach of, or failure to comply with, any other
provision of this Agreement.
12.9 THIRD PARTIES
Nothing herein is intended or shall be construed to
confer upon or give to any person, other than the parties hereto
and any assignees permitted by Section 10.3 of this Agreement,
any rights or remedies under or by reason of this Agreement.
12.10 PASSAGE OF TITLE AND RISK OF LOSS
Legal title, equitable title and risk of loss with
respect to the Inventory will not pass to DFVC or AGRIPAC until
the Inventory are transferred at the Closing.
12.11 INTERPRETATION
The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement. References to
Sections refer to sections of this Agreement unless otherwise
stated. Words such as "herein", "hereinafter", "hereof",
"hereto", "hereby", and "hereunder", and words of like import
shall, unless the context otherwise requires, refer to this
Agreement. The singular shall include the plural, and the
masculine shall include the feminine and neuter, and vice versa.
Each of the parties have contributed to the drafting of this
instrument; accordingly, no rule of strict contraction shall be
applied against any party hereto. For purposes of this
Agreement, the materiality of any fact(s), omissions(s),
exception(s) or other matter(s), insofar as they relate to either
party and/or its subsidiaries, shall be judged based on such
party and its subsidiaries taken as a whole and not based on the
combined parties and their subsidiaries taken as a whole.
12.12 GOVERNING LAW
This Agreement shall be governed by and construed under
the laws of the State of Wisconsin.
[THIS SECTION INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date first set forth above.
DEAN FOODS VEGETABLE COMPANY
By_______________________________
Its______________________________
AGRIPAC
By_______________________________
Its______________________________
STOKELY USA, INC.
By_______________________________
Its______________________________
WALLA WALLA PLANT PURCHASE AGREEMENT
Dated as of July 22, 1996
Between
Stokely USA, Inc., as Seller
And
AGRIPAC, INC., as Buyer<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 2
1.1 "Assets". . . . . . . . . . . . . . . . . . . . . . 2
1.2 "Collective Bargaining Agreement" . . . . . . . . . 2
1.3 "Environmental Laws". . . . . . . . . . . . . . . . 2
1.4 "Employee Plans". . . . . . . . . . . . . . . . . . 2
1.5 "Hazardous Substance" . . . . . . . . . . . . . . . 2
1.6 "Immediately Available Funds" . . . . . . . . . . . 2
1.7 "Real Property" . . . . . . . . . . . . . . . . . . 2
1.8 "Person". . . . . . . . . . . . . . . . . . . . . . 2
2. PURCHASE AND SALE OF ASSETS. . . . . . . . . . . . . . . 3
2.1 Purchase and Sale of Assets . . . . . . . . . . . . 3
2.1.1 Equipment. . . . . . . . . . . . . . . . 3
2.1.2 Real Property . . . . . . . . . . . . . . 3
2.1.3 Supplies and Repair Parts . . . . . . . . 3
2.1.4 Seed. . . . . . . . . . . . . . . . . . . 3
2.1.5 Intangibles . . . . . . . . . . . . . . . 3
2.1.6 Assigned Contracts. . . . . . . . . . . . 3
2.1.7 Books and Records . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . 4
2.3 Assumption of Liabilities . . . . . . . . . . . . . 4
2.4 Purchase Price for Assets and Non-Competition
Agreement . . . . . . . . . . . . . . . . . . . . . 4
2.5 Payment of Purchase Price and Noncompete
Consideration . . . . . . . . . . . . . . . . . . . 4
2.6 Allocation of Purchase Price. . . . . . . . . . . . 5
2.7 Prorations and Other Payment Obligations. . . . . . 5
2.7.1 Ad Valorem Taxes and Assessments. . . . . 5
2.7.2 Utilities . . . . . . . . . . . . . . . . 6
2.7.3 State and Local Transfer Taxes. . . . . . 6
2.7.4 Closing Costs . . . . . . . . . . . . . . 6
2.7.5 Inventory . . . . . . . . . . . . . . . . 6
2.8 The Closing . . . . . . . . . . . . . . . . . . . . 6
2.8.1 Closing . . . . . . . . . . . . . . . . . 6
2.8.2 Closing Deliveries by Stokely . . . . . . 7
2.8.3 Closing Deliveries by Agripac . . . . . . 7
2.9 Further Documents or Necessary Action . . . . . . . 8
3. EMPLOYEE MATTERS . . . . . . . . . . . . . . . . . . . . 8
3.1 Employee Plans. . . . . . . . . . . . . . . . . . . 8
3.2 Labor Matters . . . . . . . . . . . . . . . . . . . 8
3.3 Termination of Stokely's Employees. . . . . . . . . 9
3.4 Employees of Stokely. . . . . . . . . . . . . . . . 9
3.5 Agripac's Nonassumption . . . . . . . . . . . . . . 9
<PAGE>
4. REPRESENTATIONS AND WARRANTIES OF STOKELY. . . . . . . . 9
4.1 Organization and Standing of Stokely. . . . . . . . 10
4.2 Authority for Transaction . . . . . . . . . . . . . 10
4.3 No Conflict . . . . . . . . . . . . . . . . . . . . 10
4.4 Consents 10 . . . . . . . . . . . . . . . . . . . . 10
4.5 Title to and Condition of the Assets. . . . . . . . 10
4.6 Liabilities . . . . . . . . . . . . . . . . . . . . 11
4.7 Contracts . . . . . . . . . . . . . . . . . . . . . 11
4.8 Brokers and Finders . . . . . . . . . . . . . . . . 12
4.9 Environmental Matters . . . . . . . . . . . . . . . 12
4.10 Assets. . . . . . . . . . . . . . . . . . . . . . . 12
4.11 Accuracy and Completeness of Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . 12
5. REPRESENTATIONS AND WARRANTIES OF AGRIPAC. . . . . . . . 13
5.1 Organization and Standing of Agripac. . . . . . . . 13
5.2 Authority for Transaction . . . . . . . . . . . . . 13
5.3 No Conflict . . . . . . . . . . . . . . . . . . . . 13
6. CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 13
7. NON-COMPETITION AGREEMENT. . . . . . . . . . . . . . . . 13
8. AGREEMENTS PRIOR TO CLOSING. . . . . . . . . . . . . . . 14
8.1 Fulfillment of Conditions . . . . . . . . . . . . . 14
8.2 Inspection and Information. . . . . . . . . . . . . 14
8.3 Confidentiality . . . . . . . . . . . . . . . . . . 14
9. CONDITIONS TO OBLIGATIONS OF AGRIPAC AND STOKELY . . . . 15
9.1 Conditions to Obligations of Agripac. . . . . . . . 15
9.1.1 Representations and Warranties; Covenants 15
9.1.2 Consents and Approvals. . . . . . . . . . 15
9.1.3 Litigation. . . . . . . . . . . . . . . . 15
9.1.4 Authorizations. . . . . . . . . . . . . . 15
9.1.5 No Material Adverse Change. . . . . . . . 16
9.1.6 Damage to or Destruction of the Assets. . 16
9.1.7 Documents of Transfer . . . . . . . . . . 16
9.1.8 Opinion of Stokely's Counsel. . . . . . . 16
9.1.9 Closing of Inventory Purchase Agreement . 17
9.1.10 Closing of Grandview Plant Purchase
Agreement . . . . . . . . . . . . . . . . 17
9.1.11 Hart-Scott Act. . . . . . . . . . . . . . 17
9.1.12 Satisfaction of Counsel . . . . . . . . . 17
9.2 Conditions to Obligations of Stokely. . . . . . . . 18
9.2.1 Representations and Warranties; Covenants 18
9.2.2 Authorizations. . . . . . . . . . . . . . 18
9.2.3 Consents and Approvals. . . . . . . . . . 18
9.2.4 Documents of Transfer . . . . . . . . . . 18
9.2.5 Opinion of Agripac's Counsel. . . . . . . 18
9.2.6 Hart-Scott Act. . . . . . . . . . . . . . 19
9.3 Waiver of Conditions. . . . . . . . . . . . . . . . 19
<PAGE>
10. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . 19
10.1 Survival of Representations . . . . . . . . . . . . 19
10.2 Indemnification by Stokely. . . . . . . . . . . . . 20
10.3 Indemnification by Agripac. . . . . . . . . . . . . 20
10.4 Notice of Claim . . . . . . . . . . . . . . . . . . 21
11. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 21
11.1 Further Assurances. . . . . . . . . . . . . . . . . 21
11.2 Amendments and Waivers. . . . . . . . . . . . . . . 21
11.3 Successors and Assigns. . . . . . . . . . . . . . . 21
11.4 Public Announcement . . . . . . . . . . . . . . . . 22
11.5 Default . . . . . . . . . . . . . . . . . . . . . . 22
11.6 Severability. . . . . . . . . . . . . . . . . . . . 22
11.7 Descriptive Headings. . . . . . . . . . . . . . . . 22
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . 22
11.9 Governing Law . . . . . . . . . . . . . . . . . . . 23
11.10 Entire Agreement. . . . . . . . . . . . . . . . . 23
11.11 Counterparts. . . . . . . . . . . . . . . . . . . 23
11.12 Schedules . . . . . . . . . . . . . . . . . . . . 24
<PAGE>
PURCHASE AGREEMENT
PARTIES: Agripac, Inc.,
an Oregon cooperative corporation ("Agripac")
AND: Stokely USA, Inc.,
a Wisconsin corporation ("Stokely")
DATE: July 22nd, 1996
RECITALS:
A. Stokely owns certain assets including plants located in
Grandview, Washington, and Walla Walla, Washington (the
"Plants"), which it has used to process frozen vegetable products
(the "Products").
B. Stokely has decided to exit the business of the manufacture
and sale of Products (the "Business").
C. Stokely desires to sell a portion of its inventory of
Products to Dean Foods Vegetable Company and Agripac under the
terms and conditions set forth in the Inventory Purchase
Agreement dated the 22nd day of July, 1996 (the "Inventory
Purchase Agreement").
D. Stokely desires to sell all of the assets owned or used by
Stokely in connection with its vegetable processing plant in
Grandview, Washington ("Grandview Plant"), to The Freezer Group
Acquisition, L.L.C., a Washington limited liability company,
under the terms and conditions set forth in that certain Plant
Purchase Agreement between Stokely and Freezer Group L.L.C. dated
the 22nd day of July, 1996 (the "Grandview Plant Purchase
Agreement").
E. Stokely desires to sell all of the assets owned or used by
Stokely in connection with its vegetable processing plant in
Walla Walla, Washington ("Walla Walla Plant"), to Agripac under
the terms and conditions set forth herein ("Walla Walla Plant
Purchase Agreement" or "Agreement").
NOW, THEREFORE, in consideration of the Recitals, the mutual
benefits to be derived from this Agreement and the mutual and
dependent promises herein contained, the parties hereto do
represent, warrant, covenant and agree as follows:
<PAGE>
AGREEMENT:
1. DEFINITIONS.
In addition to the terms defined elsewhere in this
Agreement, the following terms, when used in this Agreement
(including the Schedules and Exhibits attached hereto), shall
have the following meanings:
1.1 "Assets" means the Assets of the Business located at or
used in connection with the operation of the Walla Walla Plant,
except for inventory, but including, without limitation, the real
property, buildings, improvements, fixtures, equipment,
intangibles, assigned contracts, and books and records to be
transferred under this Agreement, described in particularity in
Section 2 of this Agreement.
1.2 "Collective Bargaining Agreement" means the collective
bargaining agreements described on Exhibit 1.2.
1.3 "Environmental Laws" means the federal, state and local
environmental or health or safety laws, regulations and
ordinances as such laws may be amended or modified through the
Closing Date.
1.4 "Employee Plans" means those employee benefit plans of
Stokely described in Exhibit 1.4.
1.5 "Hazardous Substance" means any chemical, substance or
material defined, classified or designated hazardous, toxic or
radioactive, or other similar term, by any federal, state or
local environmental statute, regulation or ordinance presently in
effect or that may be promulgated in the future, as they may be
amended from time to time.
1.6 "Immediately Available Funds" means electronic wire
transfer to an account or accounts designated by the payee.
1.7 "Real Property" means that real property located in
Walla Walla, Washington, described on Exhibit 1.7, together with
all buildings, improvements, fixtures and other real property
interests located thereon or appurtenant thereto.
1.8 "Person" means an individual, corporation, partnership,
unincorporated association, trust, joint venture or other
organization or entity, including a governmental entity or any
department, agency or political subdivision of such entities.
<PAGE>
2. PURCHASE AND SALE OF ASSETS.
2.1 Purchase and Sale of Assets. On and subject to the
terms and conditions set forth in this Agreement, and except as
provided in Section 2.2 as to Excluded Assets, at the Closing,
Stokely shall sell, assign, transfer, convey, set over and
deliver to Agripac, and Agripac shall purchase, acquire and
accept from Stokely all of the following assets, properties and
rights (collectively, the "Assets"):
2.1.1 Equipment. All of the machinery, equipment
(including agricultural and harvesting equipment), furniture,
fixtures, located at the Walla Walla Plant as of the Closing, or
used in connection with the operation of the Walla Walla Plant,
as more particularly described in Exhibit 2.1.1, but excluding
Supplies and Repair Parts, and Seed ("Equipment").
2.1.2 Real Property. All of the Real Property.
2.1.3 Supplies and Repair Parts. All of the
useable supplies and repair parts located at the Walla Walla
Plant and Grandview Plant or used by Stokely in connection with
the operation of the Walla Walla Plant or Grandview Plant, as
more particularly described on Exhibit 2.1.3 ("Supplies and
Repair Parts").
2.1.4 Seed. All of the useable seed located at the
Walla Walla Plant and Grandview Plant or used in connection with
the operation of the Walla Walla Plant or Grandview Plant, as
more particularly described in Exhibit 2.1.4 ("Seed").
2.1.5 Intangibles. All intangibles used by Stokely
in connection with its Business, including, but not limited to,
customer lists as more particularly described on Exhibit 2.1.5
("Intangibles").
2.1.6 Assigned Contracts. All of Stokely's rights
under contracts, including contracts with customers and suppliers
and other agreements relating to the Assets and the Business,
including, without limitation, those that are listed and
described on Exhibit 2.1.6, and further including, without
limitation if assignable, all rights, claims and privileges of
Stokely arising under all warranties, representations and
guaranties (express, implied or otherwise) made by suppliers or
others in connection with the Assets or the Business
(collectively the "Assigned Contracts").
2.1.7 Books and Records. Copies of all relevant
books, paper, records and any electronic information which relate
solely to the Assets and the operation of the Business ("Books
and Records").
2.2 Excluded Assets. Notwithstanding anything to the
contrary contained in Section 2.1, the following properties,
assets and rights used in, or related to the Business (the
"Excluded Assets") are excluded from the Assets and shall not be
purchased by Agripac:
2.2.1 Cash on hand, bank accounts, cash
equivalents, or instruments in existence on the Closing Date;
2.2.2 Inventory of Product;
2.2.3 Prepaid taxes and any tax refunds arising
from taxes that relate to any period prior to Closing;
2.2.4 Insurance policies, including any premium
refunds in respect of such policies and claims covered by such
policies arising prior to Closing and all state accident
insurance refunds and insurance company dividends relating to
performance prior to the Closing Date;
2.2.5 Accounts Receivable of the Business.
2.2.6 Packaging materials.
2.3 Assumption of Liabilities. Contemporaneously with the
purchase of the Assets, Agripac shall assume the liabilities and
perform the obligations of Stokely identified on Schedule 2.3
that accrue after the Closing Date (the "Assumed Liabilities").
Agripac is not assuming, and Stokely agrees and acknowledges that
Agripac will not assume, any other debts, liabilities or
obligations of Stokely, whether related to or arising from the
Business, the Assets, or otherwise.
2.4 Purchase Price for Assets and Non-Competition
Agreement. The Purchase Price for the Assets and the Non-
Competition Agreement shall be Three Million and No/100 Dollars
($3,000,000.00) plus the price agreed upon for the Supplies and
Repair Parts and Seed.
2.5 Payment of Purchase Price and Noncompete Consideration.
2.5.1 Agripac shall, at Closing, pay in Immediately
Available Funds to Stokely, the amount of the purchase price less
the amount paid into the Hold-back Account pursuant to Section
2.5.2.
2.5.2 Agripac shall pay the amount of $60,000.00
into a Hold-back Account to be held by Chicago Title Company, at
10900 Swenson Drive, Suite 900, Waukesha, Wisconsin, an escrow
company (the "Escrow Agent"). The Escrow Agent shall deposit the
funds in an interest-bearing account approved by Agripac and
Stokely. All of the income earned on the funds in the Hold-back
Account shall continue to be held as part of the Hold-back
Account. The income will be reported by Stokely as taxable
income. The Hold-back Account shall secure Stokely's obligations
as provided in this Agreement. Agripac shall be deemed to have a
security interest in the Hold-back Account to secure payment of
any amounts owed by Stokely to Agripac as provided in this
Agreement. This Agreement shall be considered a security
agreement. Stokely agrees to execute any documents necessary to
perfect Agripac's security interest in the Hold-back Account.
Upon the final determination of any indemnity claim owed by
Stokely to Agripac pursuant to Section 10.2, the amount of the
indemnity claim shall be paid to Agripac from the Hold-back
Account. On June 30, 1997, the remaining amount in the Hold-back
Account shall be paid to Stokely, less any amount subject to a
pending claim by Agripac for indemnification from Stokely. Any
amount withheld subject to a pending claim shall be disbursed to
Agripac or Stokely upon the final determination of such pending
claim. All of the costs of the Escrow Agent for administering
the Hold-back Account shall be paid equally by Agripac and
Stokely. The parties shall execute escrow instructions with
Escrow Agent with regard to the Hold-back Account. The parties
shall execute escrow instructions with Escrow Agent with regard
to the Hold-back Account.
2.6 Allocation of Purchase Price. Agripac and Stokely
agree that the purchase price shall be allocated among the Assets
and Non-Competition Agreement in accordance with the terms and
conditions of this Agreement and that said allocation shall be
set forth in the form of the attached Schedule 2.6, prepared in
accordance with Section 1060 of the Internal Revenue Code of
1986, as amended (the "Code"). Each of the parties agrees to
report this transaction for state and federal tax purposes in a
manner consistent with the allocation set forth in Section 2.6,
including the filing of a form 8594 with the Internal Revenue
Service reflecting such allocation in accordance with Treasury
Regulation Section 1.1060-1T. If any state or federal taxing
authority challenges such allocation, the party receiving notice
of such challenge shall give prompt written notice to the other
party of the challenge and Agripac and Stokely shall cooperate in
good faith in responding to the challenge. Stokely shall have
the option to elect within thirty (30) days of receipt of any
such notice to assume the defense of the challenge. If Stokely
does not elect to assume such defense, Agripac shall have the
right to enter into any settlement that Agripac wishes to make
with respect to such challenge, or to assume the defense of such
challenge.
2.7 Prorations and Other Payment Obligations.
2.7.1 Ad Valorem Taxes and Assessments. Ad valorem
taxes on the Assets, including personal property taxes, and
assessments due and payable on or with respect to the Assets,
shall be prorated as of close of business on the Closing Date.
If the tax rate for the current year is not established by
Closing, the proration of taxes shall be based upon the tax rate
for the preceding year applied to the latest assessed evaluation;
and any adjustments required by reason of a change of said
assessed evaluation or applicable tax rate shall be made in cash
between Agripac and Stokely within ten (10) days after the tax
rate for the current year is determined. The obligation to make
such adjustment shall survive Closing.
2.7.2 Utilities. All utilities relating to the
Assets, including water and sewer charges, as well as gas,
electric and telephone charges, shall be prorated as of the close
of business on the Closing Date. Final readings for all
utilities shall be made on or before the Closing Date, and
Stokely shall arrange and obtain final billings of such utilities
to close of business on the Closing Date. If, for reasons beyond
Stokely's reasonable control, it is not possible to obtain final
utility readings prior to the Closing Date, prorations shall be
completed as soon as possible after Closing and promptly settled
between the parties.
2.7.3 State and Local Transfer Taxes. Agripac
shall pay all of the state or local transfer, sales or use taxes,
if any, arising from the transfer of any personal property from
Stokely to Agripac, other than the Supplies and Repair Parts, and
Seed purchased. Stokely shall pay all of the state or local
transfer, sales or use taxes, if any, arising from the transfer
of Supplies and Repair Parts, and Seed purchased. Stokely shall
pay all state or local transfer, sales or use taxes, if any,
arising from the transfer of the Real Property.
2.7.4 Closing Costs. Agripac and Stokely shall
each pay at Closing one-half of all closing costs, including any
escrow fees incurred in carrying out the transactions
contemplated by this Agreement.
2.7.5 Inventory. On July 12, 1996, Agripac shall
inventory the Supplies and Repair Parts and the Seed. After the
inventory, Agripac shall then change the locks on the Walla Walla
Plant and Grandview Plant to secure the Supplies and Repair Parts
and Seed until Closing.
2.8 The Closing.
2.8.1 Closing. The closing of the purchase and
sale of the Assets (the "Closing") shall take place on July 22,
1996, at 2:30 p.m. (local time) at Chicago Title Company, 10900
Swenson Drive, Suite 900, Waukesha, Wisconsin, and shall be
effective on such date, except as may be otherwise agreed by the
parties as to time and place. The date on which the Closing is
contemplated is referred to herein as the "Closing Date."
2.8.2 Closing Deliveries by Stokely. At the
Closing, Stokely shall deliver or cause to be delivered to
Agripac:
2.8.2.1 Bills of Sale, Assignments, properly
endorsed certificates of title, and other instruments of
transfer, in form and substance reasonably satisfactory to
counsel for Agripac, necessary to transfer and convey all of the
Assets to Agripac, free and clear of all liens, claims and
encumbrances. Assignments of executory contracts shall be
subject to performance by the parties thereto.
2.8.2.2 A Statutory Warranty Deed in form and
substance reasonably satisfactory to counsel for Agripac, duly
executed and acknowledged in recordable form by Stokely,
conveying the real property to Agripac, subject only to the
exceptions set forth on Schedule 2.8.2.6.
2.8.2.3 Stokely's payment of its share of the
obligations described in Section 2.7.4.
2.8.2.4 Possession of the Assets.
2.8.2.5. Stokely represents and warrants that it
is not a "foreign person" as defined in IRC Section 1445.
Stokely will give an affidavit to Agripac to this effect in the
form required by that statute and related regulations.
2.8.2.6 At Stokely's expense, an ALTA Owner's
Title Insurance Policy with extended coverage in the amount of
the purchase price allocated to the Real Property insuring title
vested in Agripac, subject only to the exceptions listed on
Schedule 2.8.2.6. Agripac may elect to have issuance of the
title insurance deferred until Agripac is prepared to close
financing on the Real Property, in which case no title insurance
commitment or policy shall be issued at closing, and Stokely will
pay to Agripac at Closing the premium for the Owner's Extended
Coverage Policy of Title Insurance.
2.8.2.7 The escrow instructions referred to in
Section 2.5.2.
2.8.2.8 Such other certificates and documents as
may be called for by the provisions of this Agreement.
2.8.3 Closing Deliveries by Agripac. At the
Closing, Agripac shall deliver or cause to be delivered to
Stokely:
2.8.3.1 The payment of Immediately Available
Funds described in Section 2.5.1 to Stokely and in Section 2.5.2
to Escrow Agent;
2.8.3.2 Agripac's payment of its share of the
obligations described in Section 2.7.4.
2.8.3.3 Such other certificates and documents as
may be called for by the provisions of this Agreement.
2.9 Further Documents or Necessary Action. Stokely and
Agripac, respectively, shall take all actions that may be
necessary or appropriate to effectuate the transactions
contemplated by this Agreement. On or after the Closing Date, if
any further action is necessary to carry out the purposes of this
Agreement and to vest Agripac with full title to Assets, Stokely
shall take all such necessary or appropriate action.
3. EMPLOYEE MATTERS.
3.1 Employee Plans. As a result of the termination of all
employees of Stokely and their participation in Stokely's
Employee Plans, Agripac shall have no liability on or after the
Closing Date with respect to Stokely's Employee Plans. Stokely
has delivered to Agripac copies of, and information regarding the
Employee Plans.
3.2 Labor Matters. There are no collective bargaining
agreements, memoranda of understanding, letters of understanding
or commitments of Stokely covering the employees of Stokely at
the Walla Walla Plant other than the Collective Bargaining
Agreement. There have been no claims of default, and, to the
best of Stokely's knowledge, there are no facts or conditions
which if continued, or on notice, will result in a default under
the Collective Bargaining Agreement. There are no unfair labor
practice complaints or proceedings against Stokely pending or, to
the best of Stokely's knowledge, threatened before the National
Labor Relations Board. There are no discrimination charges or
proceedings pending or, to the best of Stokely's knowledge,
threatened before any state or federal agency. There are no
labor grievances or arbitration proceedings under the Collective
Bargaining Agreement pending, or to the best of Stokely's
knowledge, threatened. To the best of Stokely's knowledge,
Stokely has materially complied with, and is in material
compliance with, the Collective Bargaining Agreement by which it
is bound. Stokely further warrants that, to the best of
Stokely's knowledge, it has complied with all applicable laws,
rules and regulations related to employment, including the
Immigration Reform and Controls Act, as amended, including
Consolidated Omnibus Budget Reconciliation Act (COBRA), Worker
Adjustment and Retaining Notification Act (WARN Act), those
related to wages, hours (including payment of overtime required
by state or federal law), Equal Employment Opportunity, pension
and welfare benefit plans and the payment of state and federal
payroll taxes, including Social Security taxes. There is no
pending or, to the best of Stokely's knowledge, threatened labor
dispute, union organizing activity, or demand for recognition
from a labor organization, strike, or work stoppage affecting the
employees of Stokely. As a result of the termination of the
employment of all employees of Stokely pursuant to Section 3.3,
Agripac shall have no liability on or after the Closing Date with
respect to any employment agreements or collective bargaining
agreements covering the employees of Stokely and no liability
arising in connection with the termination of such employees,
including, without limitation, accrued compensation, vacation
pay, fringe benefits or severance pay. If required to do so by
law or any collective bargaining agreement, Stokely shall, within
the applicable time required, notify any labor union which
currently represents Stokely's employees for the purpose of
offering to bargain with that union concerning Stokely's decision
to sell the Assets, and the effects of such decision on Stokely's
union represented employees. Prior to Closing, Stokely shall
deliver to Agripac such information which is available to Stokely
which shows for each of Stokely's employees at the Walla Walla
Plant and Grandview Plant, such employee's compensation and
benefits, including accrued vacation time and sick leave bank as
of the Closing Date and each employee's current vacation year.
3.3 Termination of Stokely's Employees. Stokely shall, on
or before the Closing Date, terminate all employees of Stokely at
the Walla Walla Plant and their participation in any Employee
Plans, and Stokely shall be solely responsible for any
liabilities arising from such termination, including, without
limitation, accrued compensation, vacation pay, fringe benefits,
payments to the employees of any benefits occurred under the
Employee Plans, severance pay, and other liabilities, if any,
arising under the Worker Adjustment and Retaining Notification
Act of 1988. Agripac may hire one or more of Stokely's employees
to be employed by Agripac subsequent to the Closing Date, as it
desires in its sole discretion. Employees of Stokely who are
hired by Agripac shall be employed on the terms and conditions as
solely determined by Agripac.
3.4 Employees of Stokely. Agripac does not represent or
warrant that it will retain or hire any of Stokely's employees,
and Agripac shall have no obligation under this Agreement to
employ any of Stokely's employees in connection with Agripac's
future operations. Employees of Stokely who are hired by Agripac
will be employed on terms and conditions determined by Agripac.
3.5 Agripac's Nonassumption. Agripac and Stokely agree
that Agripac will not assume Stokely's Collective Bargaining
Agreement, including any Employee Plans.
4. REPRESENTATIONS AND WARRANTIES OF STOKELY.
Stokely represents and warrants to Agripac that the
following statements are true and correct on the date of this
Agreement and will be true and correct on the Closing Date as
though made on such date:
4.1 Organization and Standing of Stokely. Stokely is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Wisconsin. Stokely has full
corporate power and authority to own its property and to carry on
its business as it is now being conducted, and Stokely has the
corporate power and authority to execute and deliver, and carry
out the transactions on their party contemplated by, this
Agreement. Stokely is qualified to do business and in good
standing under the laws of the state of Washington.
4.2 Authority for Transaction. The execution and delivery
of this Agreement by Stokely, the performance by Stokely of its
obligations hereunder, and the consummation of the transactions
contemplated herein have been duly authorized and approved by all
necessary corporate action on the part of Stokely. This
Agreement and any other agreements or instruments contemplated
hereby constitute the legal, valid and binding obligations of
Stokely, enforceable against it in accordance with their
respective terms.
4.3 No Conflict. The execution and delivery of this
Agreement by Stokely and, the consummation of the transactions
provided for herein and the fulfillment of the terms hereof, will
not result in a breach of any of the terms and provisions of, or
constitute a default under or conflict with, any agreement,
indenture or other instrument to which Stokely is a party or by
which Stokely or any of the Assets or the Business is bound, the
charter or bylaws of Stokely or any judgment, decree, order or
award of any court, governmental body or arbitrator or any law,
rule or regulation applicable to Stokely and will not result in
the creation or imposition of any lien, security interest, charge
or encumbrance on any of the Assets or the Business. No consent,
authorization or approval of, or the granting of any exemption
by, any governmental or public body or authority is required in
connection with the execution, delivery and performance by
Stokely of this Agreement or the taking of any action by Stokely
provided for herein.
4.4 Consents. Except as disclosed on Schedule 4.4, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental authority is required in
connection with the execution and delivery by Stokely of this
Agreement or the consummation by Stokely of the transactions
contemplated by this Agreement.
4.5 Title to and Condition of the Assets.
4.5.1 Stokely has good and marketable title to the
Assets, free and clear of all liens, security interests,
mortgages, deeds of trust, encumbrances, reservations, charges,
equity, leases, licenses, encroachments, permits, easements,
claims or restrictions or other exceptions other than those set
forth on Schedule 4.5.1. The parties acknowledge that Pacific
Power is retaining a lien as described in Schedule 4.5.1.
Agripac is not assuming the liability to Pacific Power, and
Stokely agrees to continue to pay such liability, provide
evidence to Agripac of such payments, and indemnify and hold
Agripac harmless from any failure by Stokely to make the required
payments to Pacific Power as required by the liens shown in I.J.
and K. on Schedule 4.5.1.
4.5.2 Except as set forth in Schedule 4.5.2, the
Equipment shall be in operable condition on the Closing Date.
4.5.3 The Equipment has been maintained in
substantially the same manner during Stokely's fiscal year ending
March 31, 1996, and during Stokely's current fiscal year up to
the date of Closing, as the Equipment was maintained during
Stokely's fiscal years ending March 31, 1995, March 31, 1994, and
March 31, 1993.
4.5.4 Except as disclosed in Schedule 4.5.4, the
operation of the Business is in compliance with all applicable
laws, statutes, rules, regulations and requirements of any
governmental authorities.
4.5.5 Stokely possesses, is in compliance with,
and, except for business licenses and subject to necessary
consents or regulatory requirements, is capable of transferring
to Agripac the full benefit of all material licenses and permits
required from all governmental authorities having jurisdiction
over the Assets or the Business necessary for the use of the
Assets and the operation of the Business.
4.5.6 Except as disclosed in Schedule 4.5.6, there
is no action, suit, proceeding, investigation or litigation
pending or, to the knowledge of Stokely, threatened that (i)
arises out of the ownership or use of any of the Assets, (ii)
will materially and detrimentally affect the use or operation of
any of the Assets or the Business or the value of any of the
Assets, or (iii) will adversely affect the ability of Stokely to
perform its obligations under this Agreement.
4.6 Liabilities. Except as disclosed on Schedule 4.6,
there are no liabilities (contingent or otherwise) with respect
to the Assets or the Business which will not be satisfied on or
before the Closing Date.
4.7 Contracts.
4.7.1 Accurate and complete copies of all Assigned
Contracts have been delivered or made available to Agripac. Each
such Assigned Contract is valid and in full force and effect, is
enforceable in accordance with its terms, and constitutes the
legal, valid and binding obligation of Stokely. Stokely has
complied in all material respects with the terms of each such
Assigned Contract.
4.7.2 Except as disclosed in Schedule 4.7.2 (and
other than the Assigned Contracts), Stokely is not a party to any
material contracts relating to the Business or the Assets.
4.8 Brokers and Finders. Stokely shall indemnify and hold
harmless Agripac from any liability for any brokerage fees,
agents commissions or finders fees and any related costs and
expenses, including attorney's fees, arising from Stokely's
employment of Goldsmith, Agio, Helms Company as its broker in
connection with the transactions contemplated by this Agreement.
4.9 Environmental Matters. The Real Property has never
been used for the storage or disposal of any Hazardous Substance
except as set forth on Schedule 4.9. Except as set forth on
Schedule 4.9, there are no Hazardous Substances contained on or
under the Real Property and the Real Property has not been
identified by any governmental agency as a site upon which
Hazardous Substances have been or may have been located or
deposited. Except as set forth on Schedule 4.9, Stokely has at
all times complied with the Environmental Laws with regard to its
occupancy of the Real Property and its use of the Assets, and on
the Closing Date, the Assets shall comply with the Environmental
Laws.
4.10 Assets. Except for the Green Bay, Wisconsin, vegetable
processing plant ("Green Bay Plant"), the inventory of Products
and the Excluded Assets, the Assets and the assets covered by the
Grandview Plant Purchase Agreement constitute all of the assets
owned, used or held for use in connection with the Business.
Except for the Green Bay Plant, the inventory of Products and the
Excluded Assets, the sale of the Assets pursuant to this
Agreement and the sale of the assets pursuant to the Grandview
Plant Purchase Agreement will effectively convey the Business to
Agripac and Freezer Group, L.L.C., including, without limitation,
all tangible and intangible assets relating to the Business, and
will allow Agripac and Freezer Group, L.L.C. to operate the
Business in the same manner as it has historically been operated.
4.11 Accuracy and Completeness of Representations and
Warranties. No representation or warranty made by Stokely in
this Agreement and no statement contained in any schedule or
exhibit delivered or to be delivered to Agripac pursuant to this
Agreement contains or will contain any untrue statement of a
material fact or omit to state a material fact, necessary to make
the statements contained herein or therein, not misleading.
There is no fact or condition which materially adversely affects
or, to the best of the knowledge of Stokely, in the future may
materially adversely affect, the Business or any of the Assets,
which fact or condition has not been set forth in this Agreement
or in the attached schedules or exhibits.
5. REPRESENTATIONS AND WARRANTIES OF AGRIPAC.
Agripac represents and warrants to Stokely that the
following statements are true and correct on the date of this
Agreement and will be true and correct on the Closing Date as
though made on such date:
5.1 Organization and Standing of Agripac. Agripac is an
Oregon cooperative corporation organized, validly existing and in
good standing under the laws of the State of Oregon. Agripac has
the corporate power and authority to execute and deliver, and
carry out the transactions on its part contemplated by, this
Agreement.
5.2 Authority for Transaction. The execution and delivery
of this Agreement by Agripac, the performance by Agripac of its
obligations hereunder, and the consummation of the transactions
contemplated herein have been duly authorized and approved by all
necessary corporate action on the part of Agripac. This
Agreement constitutes a legal, valid and binding obligation of
Agripac, enforceable against Agripac in accordance with its
terms.
5.3 No Conflict. The execution and delivery of this
Agreement by Agripac, the consummation of the transactions
provided for herein and the fulfillment of the terms hereof, will
not result in a breach of any of the terms and provisions of, or
constitute a default under or conflict with, any agreement,
indenture or other instrument to which Agripac is a party or by
which Agripac is bound, the charter or bylaws of Agripac or any
judgment, decree, order or award of any court, governmental body
or arbitrator or any law, rule or regulation applicable to
Agripac. No consent, authorization or approval of, or the
granting of any exemption by, any governmental or public body or
authority is required in connection with the execution, delivery
and performance by Agripac of this Agreement or the taking of any
action by Agripac herein provided.
6. CONSENTS.
Stokely shall exercise its best efforts to obtain prior to
the Closing Date all consents, authorizations, waivers, approvals
of or exemptions by, any Persons that are identified in Schedule
4.4. Agripac shall cooperate with Stokely in providing
information to which only Agripac has access that is requested by
the Persons identified in Schedule 4.4 from whom consents,
authorizations, waivers, approvals, or exemptions are required to
the extent that providing such information is necessary in order
to permit Stokely to secure such Person's consents,
authorizations, waivers, approvals or exemptions.
7. NON-COMPETITION AGREEMENT. For a period of three years
following Closing, neither Stokely nor any subsidiary of Stokely
shall engage in the manufacture or sale of frozen vegetable
products in the territory consisting of all markets served by the
Business at the time of Closing except to the extent that Stokely
is acquired by or merges with a third party who at the time of
such acquisition or merger is engaged in the business of
manufacturing and/or selling frozen vegetable products in said
territory or any party of said territory.
8. AGREEMENTS PRIOR TO CLOSING.
8.1 Fulfillment of Conditions. Each party hereto agrees to
use its best efforts to take any action necessary or appropriate
to cause the conditions set forth in Section 9 to be fulfilled at
or prior to the Closing. Without limiting the generality of the
foregoing, each party will refrain from taking any action which
would cause, and shall use its best efforts to take any action
necessary to prevent, any of the representations and warranties
made by it in this Agreement not to be true and correct in all
respects at and as of the Closing Date with the same force and
effect as if then made, subject only to exemptions permitted or
expressly contemplated by this Agreement. Promptly upon becoming
aware of any fact, or of the occurrence or impending or
threatened occurrence of any event, which would cause or
constitute a breach, or would have caused or constituted a
breach, of any of such representations and warranties had such
fact been known or such event occurred prior to the date hereof,
each party shall give detailed written notice thereof to the
others.
8.2 Inspection and Information. Agripac may, through its
representatives, accountants and attorneys, make such
investigation of the Assets and Business of Stokely, including
without limitation contacting personnel, customers and suppliers
of Stokely, as they may deem necessary or advisable, and Stokely
agrees to make available to such persons its books, records and
other data related to the Assets and Business and its personnel,
customers and suppliers as may from time to time be reasonably
requested (provided, however, that such investigation shall be
made only at reasonable hours and so as not to interfere with
Stokely's operations).
8.3 Confidentiality. Whether or not the transactions
contemplated hereby are consummated, each of the parties hereto
agrees to use its best efforts to keep confidential any and all
information and data with respect to the other party which it has
received as a result of any investigation made in connection with
this Agreement and which is not otherwise available to the
public; provided, however, that notwithstanding the foregoing
each of the parties hereto shall be free to disclose any such
information or date (a) to the extent required by applicable law
or (b) during the course of or in connection with any litigation,
arbitration or other proceeding based upon or in connection with
the subject matter of this Agreement, including, without
limitation, the failure of the transactions contemplated hereby
to be consummated. Neither Stokely nor Agripac will make any
public announcement or communication to employees, customers or
suppliers regarding the subject matter of the transaction
contemplated by this Agreement without the prior approval of the
others, other than disclosures required by law.
9. CONDITIONS TO OBLIGATIONS OF AGRIPAC AND STOKELY.
9.1 Conditions to Obligations of Agripac. Notwithstanding
any other provision of this Agreement, the obligation of Agripac
to purchase the Assets is subject to the satisfaction or waiver
in writing, on or before the Closing Date, of the following
conditions:
9.1.1 Representations and Warranties; Covenants.
All representations and warranties of Stokely contained in this
Agreement and in the certificates and other instruments delivered
by Stokely to Agripac in connection with this Agreement shall be
true and correct in all material respects as and as of the
Closing Date as though made at and as of such time, and Stokely
shall have performed and complied with all material covenants,
obligations and conditions required by this Agreement to be
performed or complied with prior to or on the Closing Date; and
Agripac shall have received a certificate signed by Stokely's
President, dated the Closing Date, to that effect.
9.1.2 Consents and Approvals.
9.1.2.1 All consents and approvals set forth in
Schedule 4.4 shall have been given by the Person authorized to
give such consent or approval and each such consent or approval
shall have been given unconditionally and without any requirement
that any terms and conditions of this Agreement or the
transactions contemplated hereby be modified or amended in any
respect.
9.1.2.2 Agripac shall have obtained any and all
material permits (other than business licenses), authorizations,
consents or approvals of any public body or authority required to
effectively transfer the Assets and to allow Agripac to operate
the Business in the same manner as Stokely.
9.1.3 Litigation. There shall be no pending or
threatened litigation against the Business or the Assets or
Stokely other than those set forth on Schedule 4.5.6 that, in the
opinion of counsel for any party has or could have any material
adverse effect on the Business or the Assets or the enjoyment of
the benefits of them by Agripac.
9.1.4 Authorizations. All actions necessary to
authorize the execution, delivery and performance of this
Agreement by Stokely and the consummation of the transactions
contemplated by this Agreement shall have been duly and validly
taken by Stokely.
9.1.5 No Material Adverse Change. There shall have
been no material adverse change in the Business, the Assets or
the financial condition, prospects or operations of Stokely
between the date of this Agreement and the Closing Date.
9.1.6 Damage to or Destruction of the Assets. In
the event of any destruction or condemnation of the Assets or any
material portion of the Assets prior to Closing, Agripac or
Stokely may elect to terminate this Agreement and the purchase of
the Assets contemplated by this Agreement if (i) there has been a
material dissipation of the Assets or (ii) the Assets are no
longer suitable for Agripac's intended use. If neither party
elects to terminate this Agreement as provided herein, the
parties shall proceed to Closing and Agripac will receive any
insurance proceeds or condemnation award with respect to the
Assets so destroyed or condemned, free and clear of all liens or
interests of any third parties. Stokely shall provide Agripac
with written notice of any destruction or condemnation of the
Assets or any portion thereof immediately after the occurrence of
such destruction or condemnation, and, pending election by the
parties, any insurance proceeds or condemnation award shall be
deposited in escrow.
9.1.7 Documents of Transfer. Stokely shall have
provided to Agripac the Closing deliveries set forth in Section
2.8.2 and any documents necessary to transfer ownership of the
Assets to Agripac, free and clear of all liens except liens
listed on Schedule 2.8.2.6.
9.1.9 Closing of Inventory Purchase Agreement. The
closing of Agripac and Dean Foods purchase of the inventory
pursuant to the Inventory Purchase Agreement shall have occurred
or shall simultaneously occur with the closing hereunder.
9.1.10 Closing of Grandview Plant Purchase
Agreement. The closing of Freezer Group's purchase of the
Grandview Plant pursuant to the Grandview Plant Purchase
Agreement shall have occurred or shall simultaneously occur with
the closing hereunder.
9.1.11 Hart-Scott Act. Any waiting period (and any
extension thereof) applicable to the consummation of the
transaction contemplated hereby under the Hart-Scott Act shall
have expired or been terminated.
9.1.12 Satisfaction of Counsel. The validity of all
transactions herein mentioned, as well as the form and substance
of all opinions, certificates and other documents hereunder shall
be satisfactory in all reasonable aspects to counsel for Agripac.
9.2 Conditions to Obligations of Stokely. Notwithstanding
any other provision of this Agreement, the obligation of Stokely
to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver in writing, on or before
the Closing Date, of the following conditions:
9.2.1 Representations and Warranties; Covenants.
All representations and warranties of Agripac contained in this
Agreement and in the certificates and other instruments delivered
by Agripac to Stokely in connection with this Agreement shall be
true and correct in all material respects at and as of the
Closing Date as though made at and as of such time, and Agripac
shall have performed and complied with all material covenants,
obligations and conditions required by this Agreement to be
performed or complied with by Agripac prior to or on the Closing
Date; and Stokely shall have received a certificate signed by an
officer of Agripac, dated the Closing Date, to that effect.
9.2.2 Authorizations. All actions necessary to
authorize the execution, delivery and performance of this
Agreement by Agripac and the consummation of the transactions
contemplated by this Agreement shall have been duly and validly
taken by Agripac.
9.2.3 Consents and Approvals. All consents and
approvals set forth in Schedule 4.4 shall have been given by the
Person authorized to give such consent or approval and each such
consent and approval shall have been given unconditionally and
without any requirement that any terms and conditions of this
Agreement or the transactions contemplated hereby be modified or
amended in any respect.
9.2.4 Documents of Transfer. Agripac shall have
provided to Stokely the Closing deliveries set forth in Section
2.8.3.
9.2.6 Hart-Scott Act. Any waiting period (and any
extension thereof) applicable to the consummation of the
transactions contemplated hereby under the Hart-Scott Act shall
have expired or been terminated.
9.3 Waiver of Conditions. In the event the conditions
precedent to Agripac's obligation to close this transaction have
not been satisfied at or prior to the Closing Date, Agripac may,
at their option, elect (i) to waive such conditions and to close
the transaction on the terms and conditions set forth herein, or
(ii) terminate this Agreement. In the event the conditions
precedent to Stokely's obligations to close this transaction have
not been satisfied at or prior to the Closing Date, Stokely may,
at its option, elect (i) to waive such conditions and close the
transaction on the terms and conditions set forth herein, or (ii)
terminate this Agreement. In the event that any party hereto
exercises such right of termination, there shall be no liability
on the part of the terminating party or its officers, directors
or stockholders to any other party to this Agreement, nor shall
there be any liability on the part of any other parties to this
Agreement or its officers, directors or stockholders.
10. INDEMNIFICATION.
10.1 Survival of Representations. The representations,
warranties, covenants and agreements of the parties contained
herein shall be continuing and shall survive the consummation of
this transaction notwithstanding any investigation by or on
behalf of any party. Consummation of the transaction
contemplated herein shall not be deemed to be a waiver of any
right or remedy possessed by any party hereto notwithstanding
that such party knew or should have known at the time of the
Closing that such right or remedy existed.
10.2 Indemnification by Stokely. Stokely shall be
responsible to Agripac for, and shall defend, indemnify, and hold
Agripac harmless from and against loss, damage, liability, cost
or expense (including, without limitation, reasonable attorneys'
fees, legal expenses, consultant's fees and interest and
penalties), that shall be suffered or incurred by Agripac,
resulting from or relating to (i) claims or demands made by third
parties against Agripac with regard to Stokely's ownership,
management, or conduct of the Business or use of the Assets prior
to and including the Closing Date, including without limitation
any liabilities for personal injury, property damage, or other
harm relating to services provided or products of the Business
sold by Stokely prior to and including the Closing Date, or any
other liability, obligation or commitment of Stokely (whether
known or unknown, fixed or contingent, due or to become due) not
expressly assumed by Agripac under this Agreement; (ii) any
breach of any of the representations or warranties of Stokely
contained in this Agreement (including, without limitation, any
schedule, certificate, exhibit or other instrument delivered or
to be delivered by Stokely pursuant to this Agreement) or failure
of Stokely to perform or observe any term of or covenant in this
Agreement; (iii) any failure by Stokely to satisfy the
liabilities of the Business not assumed by Agripac, or the
failure to comply with any applicable requirements of the bulk
transfer provisions of the Uniform Commercial Code or any other
applicable state law; (iv) any act or cause of action arising out
of the Collective Bargaining Agreement; (v) any actions, suits,
proceedings, demands, or assessments incident to any of the
foregoing and any investigation or defense against claims which,
if proven, would be covered thereby.
10.3 Indemnification by Agripac. Agripac shall be
responsible to Stokely for, and shall defend, indemnify and hold
Stokely harmless from and against loss, damage, liability, cost
or expense (including, without limitation, reasonable attorneys'
fees, legal expenses and consultant's fees and interest and
penalties) that shall be suffered or incurred by them, resulting
or relating to (i) claims or demands made by third parties
against Stokely with regard to Agripac's ownership, management,
or conduct of the Business or use of the Assets after the Closing
Date, including, without limitation, any liabilities for personal
injury, property damage or other harm relating to services
provided by or products of the Business sold by Agripac after the
Closing Date; (ii) any breach of any of the representations or
warranties of Agripac contained in this Agreement (including,
without limitation, any schedule, certificate, exhibit or other
instrument delivered or to be delivered by Agripac pursuant to
this Agreement) or failure of Agripac to observe or perform any
term of or covenant in this Agreement; (iii) any failure by
Agripac to satisfy the Assumed Liabilities; or (iv) any actions,
suits, proceedings, demands or assessments incident to any of the
foregoing and any investigation or defense against claims which,
if proven, would be covered thereby.
10.4 Notice of Claim. In the event that any legal
proceeding shall be instituted or any claim or demand shall be
asserted by any person in respect of which Agripac or Stokely
intends to seek indemnification under the provisions of this
Section 10, Agripac or Stokely, as the case may be, shall
promptly cause written notice thereof to be given to the other
party. Notwithstanding the foregoing, Stokely or Agripac's right
to indemnification hereunder shall not be affected by any delay
in giving notice unless, and then only to the extent that, the
rights and remedies of the indemnifying party shall have been
prejudiced as a result of the delay in giving such notice. In
the event the indemnifying party has knowledge that it will
indemnify and reimburse the indemnified party with respect to a
particular lawsuit, claim or demand, the indemnifying party shall
be permitted to control the conduct of any defense and, at the
expense and option of the indemnifying party, may settle such
claim. The indemnified party shall make no settlement of any
such suit, claim or demand without the indemnifying party's prior
written consent (which consent shall not be unreasonably
withheld) unless the indemnifying party has failed to accept such
defense within 20 days after the indemnifying party has been
notified of such suit, claim or demand, or unless the
indemnifying party has failed to diligently maintain such defense
after such acceptance, or unless the matter in question shall
have been finally determined adversely to the indemnifying party
or indemnified party by a court or governmental instrumentality
having jurisdiction thereof. The indemnified party shall
cooperate with the indemnifying party in each such defense, but
all of the indemnified party's out-of-pocket expenses shall be
paid by the indemnifying party. It shall be no defense to the
claims by the indemnified party for indemnification hereunder
that a third party claimant cannot or does not prove his claim.
<PAGE>
11. MISCELLANEOUS.
11.1 Further Assurances. Stokely and Agripac will, from
time to time on or after the Closing Date, execute and deliver to
the other parties all such further assignments, endorsements and
other documents as Agripac or Stokely, as the case may be,
reasonably requests in order to complete the transactions
contemplated by this Agreement.
11.2 Amendments and Waivers. The provisions of this
Agreement may be amended only by the written agreement of all of
the parties to this Agreement. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any
provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically
set forth in such writing.
11.3 Successors and Assigns. Neither party may assign this
Agreement without the prior written consent of the other party.
In the event the Agreement is assigned, the Agreement will bind
and inure to the benefit of the respective assigns of the parties
to this Agreement. In the event there is any successor to a
party to this Agreement, this Agreement will bind and inure to
the benefit of the respective successors.
11.4 Public Announcement. No press release or other formal
public announcement with respect to this Agreement or any of the
transactions contemplated hereby shall be made without the
express approval of Agripac and Stokely; provided, however, that
if, in the opinion of counsel for Stokely or Agripac, public
disclosure of the pendency of such transaction is required under
the Federal Securities Laws, the consent or approval of the other
to the release of such publicity and the consent thereof shall
not be unreasonably withheld.
11.5 Default. Time is of the essence of this Agreement. If
either party defaults under this Agreement, the other party may
seek specific performance of this Agreement, damages, or
rescission. In any suit, action or appeal to enforce this
Agreement or any term or provision of this Agreement, or to
interpret this Agreement, the prevailing party shall be entitled
to recover its costs incurred, including reasonable attorneys'
fees at trial or on appeal.
11.6 Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of this Agreement.
11.7 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do
not constitute a party of this Agreement.
11.8 Notices. Any notices, requests, demands or other
communications required or permitted to be sent under this
Agreement shall be delivered personally, sent by overnight
courier or mailed by registered or certified mail, return receipt
requested, to the following addresses, and shall be deemed to
have been received on the day of personal delivery, one business
day after deposit with an overnight courier or three business
days after deposit in the mail:
To Agripac: AGRIPAC, INC.
Attn: Dennis J. Colleran
P.O. Box 5346
Salem, OR
With a copy to: Arnold Gallagher Saydack Percell &
Roberts, P.C.
Attn: Donald A. Gallagher, Jr.
P. O. Box 1758
Eugene, Oregon 97440
To Stokely: Stokely USA, Inc.
Attn: Robert Brill
1055 Corporate Center Drive
Oconomowoc, WI 53056
With a copy to: ___________________________
Attn: ____________________
___________________________
___________________________
11.9 Governing Law. The validity, meaning and effect of
this Agreement shall be determined in accordance with the laws of
the State of Washington applicable to contracts made and to be
performed in that state.
11.10 Entire Agreement. This Agreement, together with
those documents expressly referred to in this Agreement,
constitutes the final agreement of the parties concerning the
matters referred to in this Agreement, and supersedes all prior
agreements and understandings.
11.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts
together shall constitute one instrument.
<PAGE>
11.12 Schedules. The following Schedules and Exhibits
are attached to and form an integral part of this Agreement:
Collective Bargaining Agreement Exhibit 1.2
Employee Plans Exhibit 1.4
Real Property Exhibit 1.7
Equipment Exhibit 2.1.1
Supplies and Repair Parts Exhibit 2.1.3
Seed Exhibit 2.1.4
Intangibles Exhibit 2.1.5
Assigned Contracts Exhibit 2.1.6
Assumed Liabilities Schedule 2.3
Allocation of Purchase Price Schedule 2.6
Liens on Assets Schedule 2.8.2.6
Consents Schedule 4.4
Exceptions to Free and Clear Title Schedule 4.5.1
Assets Not in Operable Condition Schedule 4.5.2
Noncompliance with Laws Schedule 4.5.4
Pending Litigation Schedule 4.5.6
Liabilities Schedule 4.6
Material Contracts Schedule 4.7.2
Hazardous Substances Schedule 4.9
The parties to this Agreement have executed this Agreement
as of the date first set forth above.
AGRIPAC, INC. STOKELY USA, INC.
By: Dennis J. Colleran By: Robert M. Brill
Its: Treasurer Its: Secretary
STATE OF Wisconsin )
) ss.
County of Waukesha )
This instrument was acknowledged before me on July 23,
1996, by Dennis Colleran, as Treasuer of Agripac, Inc.
Michelle Schmid
Notary Public for Wisconsin
My Commission Expires: 11-3-96
<PAGE>
STATE OF Wisconsin )
) ss.
County of Waukesha )
This instrument was acknowledged before me on July 23,
1996, by Robert M. Brill, as Secretary of Stokely USA, Inc.
Michelle Schmid
Notary Public for Wisconsin
My Commission Expires: 11-3-96
GRANDVIEW PLANT PURCHASE AGREEMENT
Dated as of July 22, 1996
Between
STOKELY USA, INC., as Seller
And
THE FREEZER GROUP ACQUISITION, L.L.C., as Buyer<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 "Assets" . . . . . . . . . . . . . . . . . . . . . . 2
1.2 "Collective Bargaining Agreement". . . . . . . . . . 2
1.3 "Environmental Laws" . . . . . . . . . . . . . . . . 2
1.4 "Employee Plans" . . . . . . . . . . . . . . . . . . 2
1.5 "Hazardous Substance". . . . . . . . . . . . . . . . 2
1.6 "Immediately Available Funds". . . . . . . . . . . . 2
1.7 "Real Property". . . . . . . . . . . . . . . . . . . 2
1.8 "Person" . . . . . . . . . . . . . . . . . . . . . . 2
2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . 2
2.1 Purchase and Sale of Assets. . . . . . . . . . . . . 2
2.1.1 Equipment. . . . . . . . . . . . . . . . . 3
2.1.2 Real Property. . . . . . . . . . . . . . . 3
2.1.3 Assigned Contracts . . . . . . . . . . . . 3
2.2 Excluded Assets. . . . . . . . . . . . . . . . . . . 3
2.3 Assumption of Liabilities. . . . . . . . . . . . . . 3
2.4 Purchase Price for Assets. . . . . . . . . . . . . . 4
2.5 Payment of Purchase Price. . . . . . . . . . . . . . 4
2.6 Allocation of Purchase Price . . . . . . . . . . . . 4
2.7 Prorations and Other Payment Obligations . . . . . . 5
2.7.1 Ad Valorem Taxes and Assessments . . . . . 5
2.7.2 Utilities. . . . . . . . . . . . . . . . . 5
2.7.3 State and Local Transfer Taxes . . . . . . 5
2.7.4 Closing Costs. . . . . . . . . . . . . . . 5
2.8 The Closing. . . . . . . . . . . . . . . . . . . . . 6
2.8.1 Closing. . . . . . . . . . . . . . . . . . 6
2.8.2 Closing Deliveries by Stokely. . . . . . . 6
2.8.3 Closing Deliveries by Freezer Group. . . . 6
2.9 Further Documents or Necessary Action. . . . . . . . 7
3. EMPLOYEE MATTERS. . . . . . . . . . . . . . . . . . . . . 7
3.1 Employee Plans . . . . . . . . . . . . . . . . . . . 7
3.2 Labor Matters. . . . . . . . . . . . . . . . . . . . 7
3.3 Termination of Stokely's Employees . . . . . . . . . 8
3.4 Employees of Stokely . . . . . . . . . . . . . . . . 8
3.5 Freezer Group's Nonassumption. . . . . . . . . . . . 8
4. REPRESENTATIONS AND WARRANTIES OF STOKELY . . . . . . . . 9
4.1 Organization and Standing of Stokely . . . . . . . . 9
4.2 Authority for Transaction. . . . . . . . . . . . . . 9
4.3 No Conflict. . . . . . . . . . . . . . . . . . . . . 9
4.4 Consents . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Title to and Condition of the Assets . . . . . . . . 9
4.6 Liabilities. . . . . . . . . . . . . . . . . . . . . 10
4.7 Contracts. . . . . . . . . . . . . . . . . . . . . . 10
4.8 Brokers and Finders. . . . . . . . . . . . . . . . . 11
4.9 Environmental Matters. . . . . . . . . . . . . . . . 11
4.10 Assets . . . . . . . . . . . . . . . . . . . . . . . 11
4.11 Accuracy and Completeness of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . 11
5. REPRESENTATIONS AND WARRANTIES OF FREEZER GROUP . . . . . 11
5.1 Organization and Standing of Freezer Group . . . . . 12
5.2 Authority for Transaction. . . . . . . . . . . . . . 12
5.3 No Conflict. . . . . . . . . . . . . . . . . . . . . 12
6. CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . 12
7. AGREEMENTS PRIOR TO CLOSING . . . . . . . . . . . . . . . 12
7.1 Fulfillment of Conditions. . . . . . . . . . . . . . 12
7.2 Inspection and Information . . . . . . . . . . . . . 13
7.3 Confidentiality. . . . . . . . . . . . . . . . . . . 13
8. CONDITIONS TO OBLIGATIONS OF FREEZER GROUP AND STOKELY. . 13
8.1 Conditions to Obligations of Freezer Group . . . . . 13
8.1.1 Representations and Warranties; Covenants 14
8.1.2 Consents and Approvals . . . . . . . . . . 14
8.1.3 Litigation . . . . . . . . . . . . . . . . 14
8.1.4 Authorizations . . . . . . . . . . . . . . 14
8.1.5 No Material Adverse Change . . . . . . . . 14
8.1.6 Damage to or Destruction of the Assets . . 14
8.1.7 Documents of Transfer. . . . . . . . . . . 15
8.1.8 Opinion of Stokely's Counsel . . . . . . . 15
8.1.9 Closing of Inventory Purchase Agreement. . 16
8.1.10 Closing of Walla Walla Plant Purchase
Agreement. . . . . . . . . . . . . . . . . 16
8.1.11 Hart-Scott Act . . . . . . . . . . . . . . 16
8.1.12 Satisfaction of Counsel. . . . . . . . . . 16
8.2 Conditions to Obligations of Stokely . . . . . . . . 16
8.2.1 Representations and Warranties; Covenants 16
8.2.2 Authorizations . . . . . . . . . . . . . . 17
8.2.3 Consents and Approvals . . . . . . . . . . 17
8.2.4 Documents of Transfer. . . . . . . . . . . 17
8.2.5 Opinion of Freezer Group's Counsel . . . . 17
8.2.6 Hart-Scott Act . . . . . . . . . . . . . . 18
8.3 Waiver of Conditions . . . . . . . . . . . . . . . . 18
9. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 18
9.1 Survival of Representations. . . . . . . . . . . . . 18
9.2 Indemnification by Stokely . . . . . . . . . . . . . 18
9.3 Indemnification by Freezer Group . . . . . . . . . . 19
9.4 Notice of Claim. . . . . . . . . . . . . . . . . . . 19
10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 20
10.1 Further Assurances . . . . . . . . . . . . . . . . . 20
10.2 Amendments and Waivers . . . . . . . . . . . . . . . 20
10.3 Successors and Assigns . . . . . . . . . . . . . . . 20
10.4 Public Announcement. . . . . . . . . . . . . . . . . 21
10.5 Default. . . . . . . . . . . . . . . . . . . . . . . 21
10.6 Severability . . . . . . . . . . . . . . . . . . . . 21
10.7 Descriptive Headings . . . . . . . . . . . . . . . . 21
10.8 Notices. . . . . . . . . . . . . . . . . . . . . . . 21
10.9 Governing Law. . . . . . . . . . . . . . . . . . . . 22
10.10 Entire Agreement. . . . . . . . . . . . . . . . 22
10.11 Counterparts. . . . . . . . . . . . . . . . . . 22
10.12 Schedules . . . . . . . . . . . . . . . . . . . 22
<PAGE>
PURCHASE AGREEMENT
PARTIES: The Freezer Group Acquisition, L.L.C.
a Washington limited liability company
("Freezer Group")
AND: Stokely USA, Inc.,
a Wisconsin corporation
("Stokely")
DATE: July 22, 1996
RECITALS:
A. Stokely owns certain assets including plants located in
Grandview, Washington, and Walla Walla, Washington (the
"Plants"), which it has used to process frozen vegetable products
(the "Products").
B. Stokely has decided to exit the business of the manufacture
and sale of Products (the "Business").
C. Stokely desires to sell a portion of its inventory of
Products to Dean Foods Vegetable Company and Agripac under the
terms and conditions set forth in the Inventory Purchase
Agreement dated the 22nd day of July, 1996 (the "Inventory
Purchase Agreement").
D. Stokely desires to sell all of the assets owned or used by
Stokely in connection with its vegetable processing plant in
Walla Walla, Washington ("Walla Walla Plant"), to Agripac, Inc.,
an Oregon cooperative corporation, under the terms and conditions
set forth in that certain Plant Purchase Agreement between
Stokely and Agripac, Inc. dated the 22nd day of July, 1996 (the
"Walla Walla Plant Purchase Agreement").
E. Stokely desires to sell all of the assets owned or used by
Stokely in connection with its vegetable processing plant in
Grandview, Washington ("Grandview Plant"), to Freezer Group under
the terms and conditions set forth herein ("Grandview Plant
Purchase Agreement" or "Agreement").
NOW, THEREFORE, in consideration of the Recitals, the mutual
benefits to be derived from this Agreement and the mutual and
dependent promises herein contained, the parties hereto do
represent, warrant, covenant and agree as follows:
<PAGE>
AGREEMENT:
1. DEFINITIONS.
In addition to the terms defined elsewhere in this
Agreement, the following terms, when used in this Agreement
(including the Schedules and Exhibits attached hereto), shall
have the following meanings:
1.1 "Assets" means the Assets of the Business located at or
used in connection with the operation of the Grandview Plant,
except for inventory, but including, without limitation, the real
property, buildings, improvements, fixtures, and equipment to be
transferred under this Agreement, described in particularity in
Section 2 of this Agreement.
1.2 "Collective Bargaining Agreement" means the collective
bargaining agreements described on Exhibit 1.2.
1.3 "Environmental Laws" means the federal, state and local
environmental or health or safety laws, regulations and
ordinances as such laws may be amended or modified through the
Closing Date.
1.4 "Employee Plans" means those employee benefit plans of
Stokely described in Exhibit 1.4.
1.5 "Hazardous Substance" means any chemical, substance or
material defined, classified or designated hazardous, toxic or
radioactive, or other similar term, by any federal, state or
local environmental statute, regulation or ordinance presently in
effect or that may be promulgated in the future, as they may be
amended from time to time.
1.6 "Immediately Available Funds" means electronic wire
transfer to an account or accounts designated by the payee.
1.7 "Real Property" means that real property located in
Grandview, Washington, described on Exhibit 1.7, together with
all buildings, improvements, fixtures and other real property
interests located thereon or appurtenant thereto.
1.8 "Person" means an individual, corporation, partnership,
unincorporated association, trust, joint venture or other
organization or entity, including a governmental entity or any
department, agency or political subdivision of such entities.
2. PURCHASE AND SALE OF ASSETS.
2.1 Purchase and Sale of Assets. On and subject to the
terms and conditions set forth in this Agreement, and except as
provided in Section 2.2 as to Excluded Assets, at the Closing,
Stokely shall sell, assign, transfer, convey, set over and
deliver to Freezer Group, and Freezer Group shall purchase,
acquire and accept from Stokely all of the following assets,
properties and rights (collectively, the "Assets"):
2.1.1 Equipment. All of the machinery, equipment
(including agricultural and harvesting equipment), furniture,
fixtures, located at the Grandview Plant as of the Closing, or
used in connection with the operation of the Grandview Plant, as
more particularly described in Exhibit 2.1.1 ("Equipment").
2.1.2 Real Property. All of the Real Property.
2.1.3 Assigned Contracts. All of Stokely's rights
under contracts which are listed and described on Schedule 2.1.3
(collectively the "Assigned Contracts").
2.2 Excluded Assets. Notwithstanding anything to the
contrary contained in Section 2.1, the following properties,
assets and rights used in, or related to the Business (the
"Excluded Assets") are excluded from the Assets and shall not be
purchased by Freezer Group:
2.2.1 Cash on hand, bank accounts, cash
equivalents, or instruments in existence on the Closing Date;
2.2.2 Inventory of Product;
2.2.3 Prepaid taxes and any tax refunds arising
from taxes that relate to any period prior to Closing;
2.2.4 Insurance policies, including any premium
refunds in respect of such policies and claims covered by such
policies arising prior to Closing and all state accident
insurance refunds and insurance company dividends relating to
performance prior to the Closing Date;
2.2.5 Accounts Receivable of the Business.
2.2.6 Supplies and Repair Parts of the Business.
2.2.7 Seed and Packaging of the Business.
2.2.8 Intangibles of the Business.
2.2.9 Except for the Assigned Contracts, Contracts of
the Business.
2.2.10 Books and Records of the Business.
2.3 Assumption of Liabilities. Contemporaneously with the
purchase of the Assets, Freezer Group shall assume the
liabilities and perform the obligations of Stokely identified on
Schedule 2.3 that accrue after the Closing Date (the "Assumed
Liabilities"). Freezer Group is not assuming, and Stokely agrees
and acknowledges that Freezer Group will not assume, any other
debts, liabilities or obligations of Stokely, whether related to
or arising from the Business, the Assets, or otherwise.
2.4 Purchase Price for Assets. The Purchase Price for the
Assets shall be Six Million Two Hundred Fifteen Thousand and
No/100 Dollars ($6,215,000.00).
2.5 Payment of Purchase Price.
2.5.1 Freezer Group shall, at Closing, pay in
Immediately Available Funds to Stokely, the amount of the
purchase price less the amount paid into the Hold-back Account
pursuant to Section 2.5.2.
2.5.2 Freezer Group shall pay the amount of
$124,300.00 into a Hold-back Account to be held by Chicago Title
Company, at 10900 Swenson Drive, Suite 900, Waukesha, Wisconsin,
an escrow company (the "Escrow Agent"). The Escrow Agent shall
deposit the funds in an interest-bearing account approved by
Freezer Group and Stokely. All of the income earned on the funds
in the Hold-back Account shall continue to be held as part of the
Hold-back Account. The income will be reported by Stokely as
taxable income. The Hold-back Account shall secure Stokely's
obligations as provided in this Agreement. Freezer Group shall
be deemed to have a security interest in the Hold-back Account to
secure payment of any amounts owed by Stokely to Freezer Group as
provided in this Agreement. This Agreement shall be considered a
security agreement. Stokely agrees to execute any documents
necessary to perfect Freezer Group's security interest in the
Hold-back Account. Upon the final determination of any indemnity
claim owed by Stokely to Freezer Group pursuant to Section 9.2,
the amount of the indemnity claim shall be paid to Freezer Group
from the Hold-back Account. On June 30, 1997, the remaining
amount in the Hold-back Account shall be paid to Stokely, less
any amount subject to a pending claim by Freezer Group for
indemnification from Stokely. Any amount withheld subject to a
pending claim shall be disbursed to Freezer Group or Stokely upon
the final determination of such pending claim. All of the costs
of the Escrow Agent for administering the Hold-back Account shall
be paid equally by Freezer Group and Stokely. The parties shall
execute escrow instructions with Escrow Agent with regard to the
Hold-back Account.
2.6 Allocation of Purchase Price. Freezer Group and
Stokely agree that the purchase price shall be allocated among
the Assets in accordance with the terms and conditions of this
Agreement and that said allocation shall be set forth in the form
of the attached Schedule 2.6, prepared in accordance with Section
1060 of the Internal Revenue Code of 1986, as amended (the
"Code"). Each of the parties agrees to report this transaction
for state and federal tax purposes in a manner consistent with
the allocation set forth in Section 2.6, including the filing of
a form 8594 with the Internal Revenue Service reflecting
suchallocation in accordance with Treasury Regulation Section
1.1060-1T. If any state or federal taxing authority challenges
such allocation, the party receiving notice of such challenge
shall give prompt written notice to the other party of the
challenge and Freezer Group and Stokely shall cooperate in good
faith in responding to the challenge. Stokely shall have the
option to elect within thirty (30) days of receipt of any such
notice to assume the defense of the challenge. If Stokely does
not elect to assume such defense, Freezer Group shall have the
right to enter into any settlement that Freezer Group wishes to
make with respect to such challenge, or to assume the defense of
such challenge.
2.7 Prorations and Other Payment Obligations.
2.7.1 Ad Valorem Taxes and Assessments. Ad valorem
taxes on the Assets, including personal property taxes, and
assessments due and payable on or with respect to the Assets,
shall be prorated as of close of business on the Closing Date.
If the tax rate for the current year is not established by
Closing, the proration of taxes shall be based upon the tax rate
for the preceding year applied to the latest assessed evaluation;
and any adjustments required by reason of a change of said
assessed evaluation or applicable tax rate shall be made in cash
between Freezer Group and Stokely within ten (10) days after the
tax rate for the current year is determined. The obligation to
make such adjustment shall survive Closing.
2.7.2 Utilities. All utilities relating to the
Assets, including water and sewer charges, as well as gas,
electric and telephone charges, shall be prorated as of the close
of business on the Closing Date. Final readings for all
utilities shall be made on or before the Closing Date, and
Stokely shall arrange and obtain final billings of such utilities
to close of business on the Closing Date. If, for reasons beyond
Stokely's reasonable control, it is not possible to obtain final
utility readings prior to the Closing Date, prorations shall be
completed as soon as possible after Closing and promptly settled
between the parties.
2.7.3 State and Local Transfer Taxes. Freezer Group
shall pay all of the state or local transfer, sales or use taxes,
if any, arising from the transfer of any personal property from
Stokely to Freezer Group. Stokely shall pay all state or local
transfer, sales or use taxes, if any, arising from the transfer
of the Real Property.
2.7.4 Closing Costs. Freezer Group and Stokely shall
each pay at Closing one-half of all closing costs, including any
escrow fees incurred in carrying out the transactions
contemplated by this Agreement.
2.8 The Closing.
2.8.1 Closing. The closing of the purchase and sale
of the Assets (the "Closing") shall take place on July 22, 1996,
at 2:30 p.m. (local time) at Chicago Title Company, 10900 Swenson
Drive, Suite 900, Waukesha, Wisconsin, and shall be effective on
such date, except as may be otherwise agreed by the parties as to
time and place. The date on which the Closing is contemplated is
referred to herein as the "Closing Date."
2.8.2 Closing Deliveries by Stokely. At the Closing,
Stokely shall deliver or cause to be delivered to Freezer Group:
2.8.2.1 Bills of Sale, Assignments, properly
endorsed certificates of title, and other instruments of
transfer, in form and substance reasonably satisfactory to
counsel for Freezer Group, necessary to transfer and convey all
of the Assets to Freezer Group, free and clear of all liens,
claims and encumbrances.
2.8.2.2 A Statutory Warranty Deed in form and
substance reasonably satisfactory to counsel for Freezer Group,
duly executed and acknowledged in recordable form by Stokely,
conveying the real property to Freezer Group, subject only to the
exceptions set forth on Schedule 2.8.2.6.
2.8.2.3 Stokely's payment of its share of the
obligations described in Section 2.7.4.
2.8.2.4 Possession of the Assets.
2.8.2.5. Stokely represents and warrants that
it is not a "foreign person" as defined in IRC Section 1445.
Stokely will give an affidavit to Freezer Group to this effect in
the form required by that statute and related regulations.
2.8.2.6 At Stokely's expense, an ALTA Owner's
Title Insurance Policy with extended coverage in the amount of
the purchase price allocated to the Real Property insuring title
vested in Freezer Group, subject only to the exceptions listed on
Schedule 2.8.2.6.
2.8.2.7 The escrow instructions referred to in
Section 2.5.2.
2.8.2.8 Such other certificates and documents as
may be called for by the provisions of this Agreement.
2.8.3 Closing Deliveries by Freezer Group. At the
Closing, Freezer Group shall deliver or cause to be delivered to
Stokely:
2.8.3.1 The payment of Immediately Available
Funds described in Section 2.5.1 to Stokely and in Section 2.5.2
to Escrow Agent;
2.8.3.2 Freezer Group's payment of its share of
the obligations described in Section 2.7.4.
2.8.3.3 Such other certificates and documents as
may be called for by the provisions of this Agreement.
2.9 Further Documents or Necessary Action. Stokely and
Freezer Group, respectively, shall take all actions that may be
necessary or appropriate to effectuate the transactions
contemplated by this Agreement. On or after the Closing Date, if
any further action is necessary to carry out the purposes of this
Agreement and to vest Freezer Group with full title to Assets,
Stokely shall take all such necessary or appropriate action.
3. EMPLOYEE MATTERS.
3.1 Employee Plans. As a result of the termination of all
employees of Stokely and their participation in Stokely's
Employee Plans, Freezer Group shall have no liability on or after
the Closing Date with respect to Stokely's Employee Plans.
Stokely has delivered to Agripac copies of, and information
regarding the Employee Plans.
3.2 Labor Matters. There are no collective bargaining
agreements, memoranda of understanding, letters of understanding
or commitments of Stokely covering the employees of Stokely at
the Walla Walla Plant other than the Collective Bargaining
Agreement. There have been no claims of default, and, to the
best of Stokely's knowledge, there are no facts or conditions
which if continued, or on notice, will result in a default under
the Collective Bargaining Agreement. There are no unfair labor
practice complaints or proceedings against Stokely pending or, to
the best of Stokely's knowledge, threatened before the National
Labor Relations Board. There are no discrimination charges or
proceedings pending or, to the best of Stokely's knowledge,
threatened before any state or federal agency. There are no
labor grievances or arbitration proceedings under the Collective
Bargaining Agreement pending, or to the best of Stokely's
knowledge, threatened. To the best of Stokely's knowledge,
Stokely has materially complied with, and is in material
compliance with, the Collective Bargaining Agreement by which it
is bound. Stokely further warrants that, to the best of
Stokely's knowledge, it has complied with all applicable laws,
rules and regulations related to employment, including the
Immigration Reform and Controls Act, as amended, including
Consolidated Omnibus Budget Reconciliation Act (COBRA), Worker
Adjustment and Retaining Notification Act (WARN Act), those
related to wages, hours (including payment of overtime required
by state or federal law), Equal Employment Opportunity, pension
and welfare benefit plans and the payment of state and federal
payroll taxes, including Social Security taxes. There is no
pending or, to the best of Stokely's knowledge, threatened labor
dispute, union organizing activity, or demand for recognition
from a labor organization, strike, or work stoppage affecting the
employees of Stokely. As a result of the termination of the
employment of all employees of Stokely pursuant to Section 3.3,
Freezer Group shall have no liability on or after the Closing
Date with respect to any employment agreements or collective
bargaining agreements covering the employees of Stokely and no
liability arising in connection with the termination of such
employees, including, without limitation, accrued compensation,
vacation pay, fringe benefits or severance pay. If required to
do so by law or any collective bargaining agreement, Stokely
shall, within the applicable time required, notify any labor
union which currently represents Stokely's employees for the
purpose of offering to bargain with that union concerning
Stokely's decision to sell the Assets, and the effects of such
decision on Stokely's union represented employees. Prior to
Closing, Stokely shall deliver to Freezer Group such information
which is available to Stokely which shows for each of Stokely's
employees at the Walla Walla Plant and Grandview Plant, such
employee's compensation and benefits, including accrued vacation
time and sick leave bank as of the Closing Date and each
employee's current vacation year.
3.3 Termination of Stokely's Employees. Stokely shall, on
or before the Closing Date, terminate all employees of Stokely at
the Walla Walla Plant and their participation in any Employee
Plans, and Stokely shall be solely responsible for any
liabilities arising from such termination, including, without
limitation, accrued compensation, vacation pay, fringe benefits,
payments to the employees of any benefits occurred under the
Employee Plans, severance pay, and other liabilities, if any,
arising under the Worker Adjustment and Retaining Notification
Act of 1988. Freezer Group may hire one or more of Stokely's
employees to be employed by Freezer Group subsequent to the
Closing Date, as it desires in its sole discretion. Employees of
Stokely who are hired by Freezer Group shall be employed on the
terms and conditions as solely determined by Freezer Group.
3.4 Employees of Stokely. Freezer Group does not represent
or warrant that it will retain or hire any of Stokely's
employees, and Freezer Group shall have no obligation under this
Agreement to employ any of Stokely's employees in connection with
Freezer Group's future operations. Employees of Stokely who are
hired by Freezer Group will be employed on terms and conditions
determined by Freezer Group.
3.5 Freezer Group's Nonassumption. Freezer Group and
Stokely agree that Freezer Group will not assume Stokely's
Collective Bargaining Agreement, including any Employee Plans.
4. REPRESENTATIONS AND WARRANTIES OF STOKELY.
Stokely represents and warrants to Freezer Group that the
following statements are true and correct on the date of this
Agreement and will be true and correct on the Closing Date as
though made on such date:
4.1 Organization and Standing of Stokely. Stokely is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Wisconsin. Stokely has full
corporate power and authority to own its property and to carry on
its business as it is now being conducted, and Stokely has the
corporate power and authority to execute and deliver, and carry
out the transactions on their party contemplated by, this
Agreement. Stokely is qualified to do business and in good
standing under the laws of the state of Washington.
4.2 Authority for Transaction. The execution and delivery
of this Agreement by Stokely, the performance by Stokely of its
obligations hereunder, and the consummation of the transactions
contemplated herein have been duly authorized and approved by all
necessary corporate action on the part of Stokely. This
Agreement and any other agreements or instruments contemplated
hereby constitute the legal, valid and binding obligations of
Stokely, enforceable against it in accordance with their
respective terms.
4.3 No Conflict. The execution and delivery of this
Agreement by Stokely and, the consummation of the transactions
provided for herein and the fulfillment of the terms hereof, will
not result in a breach of any of the terms and provisions of, or
constitute a default under or conflict with, any agreement,
indenture or other instrument to which Stokely is a party or by
which Stokely or any of the Assets or the Business is bound, the
charter or bylaws of Stokely or any judgment, decree, order or
award of any court, governmental body or arbitrator or any law,
rule or regulation applicable to Stokely and will not result in
the creation or imposition of any lien, security interest, charge
or encumbrance on any of the Assets or the Business. No consent,
authorization or approval of, or the granting of any exemption
by, any governmental or public body or authority is required in
connection with the execution, delivery and performance by
Stokely of this Agreement or the taking of any action by Stokely
provided for herein.
4.4 Consents. Except as disclosed on Schedule 4.4, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental authority is required in
connection with the execution and delivery by Stokely of this
Agreement or the consummation by Stokely of the transactions
contemplated by this Agreement.
4.5 Title to and Condition of the Assets.
4.5.1 Stokely has good and marketable title to the
Assets, free and clear of all liens, security interests,
mortgages, deeds of trust, encumbrances, reservations, charges,
equity, leases, licenses, encroachments, permits, easements,
claims or restrictions or other exceptions other than those set
forth on Schedule 4.5.1.
4.5.2 Except as set forth in Schedule 4.5.2, the
Equipment shall be in operable condition on the Closing Date.
4.5.3 The Equipment has been maintained in
substantially the same manner during Stokely's fiscal year ending
March 31, 1996, and during Stokely's current fiscal year up to
the date of Closing, as the Equipment was maintained during
Stokely's fiscal years ending March 31, 1995, March 31, 1994, and
March 31, 1993.
4.5.4 Except as disclosed in Schedule 4.5.4, the
operation of the Business is in compliance with all applicable
laws, statutes, rules, regulations and requirements of any
governmental authorities.
4.5.5 Stokely possesses, is in compliance with, and,
except for business licenses and subject to necessary consents or
regulatory requirements, is capable of transferring to Freezer
Group the full benefit of all material licenses and permits
required from all governmental authorities having jurisdiction
over the Assets or the Business necessary for the use of the
Assets and the operation of the Business.
4.5.6 Except as disclosed in Schedule 4.5.6, there is
no action, suit, proceeding, investigation or litigation pending
or, to the knowledge of Stokely, threatened that (i) arises out
of the ownership or use of any of the Assets, (ii) will
materially and detrimentally affect the use or operation of any
of the Assets or the Business or the value of any of the Assets,
or (iii) will adversely affect the ability of Stokely to perform
its obligations under this Agreement.
4.6 Liabilities. Except as disclosed on Schedule 4.6,
there are no liabilities (contingent or otherwise) with respect
to the Assets or the Business which will not be satisfied on or
before the Closing Date.
4.7 Contracts.
4.7.1 Accurate and complete copies of all Assigned
Contracts have been delivered or made available to Freezer Group.
Each such Assigned Contract is valid and in full force and
effect, is enforceable in accordance with its terms, and
constitutes the legal, valid and binding obligation of Stokely.
Stokely has complied in all material respects with the terms of
each such Assigned Contract.
4.7.2 Except as disclosed in Schedule 4.7.2 (and other
than the Assigned Contracts), Stokely is not a party to any
material contracts relating to the Business or the Assets.
4.8 Brokers and Finders. Stokely shall indemnify and hold
harmless Freezer Group from any liability for any brokerage fees,
agents commissions or finders fees and any related costs and
expenses, including attorney's fees, arising from Stokely's
employment of Goldsmith, Agio, Helms Company as its broker in
connection with the transactions contemplated by this Agreement.
4.9 Environmental Matters. The Real Property has never
been used for the storage or disposal of any Hazardous Substance
except as set forth on Schedule 4.9. Except as set forth on
Schedule 4.9, there are no Hazardous Substances contained on or
under the Real Property and the Real Property has not been
identified by any governmental agency as a site upon which
Hazardous Substances have been or may have been located or
deposited. Except as set forth on Schedule 4.9, Stokely has at
all times complied with the Environmental Laws with regard to its
occupancy of the Real Property and its use of the Assets, and on
the Closing Date, the Assets shall comply with the Environmental
Laws.
4.10 Assets. Except for the Green Bay, Wisconsin, vegetable
processing plant ("Green Bay Plant"), the inventory of Products,
and the Excluded Assets, the Assets and the assets covered by the
Walla Walla Plant Purchase Agreement constitute all of the assets
owned, used or held for use in connection with the Business.
Except for the Green Bay Plant, the inventory of Products, and
the Excluded Assets, the sale of the Assets pursuant to this
Agreement and the sale of the assets pursuant to the Walla Walla
Plant Purchase Agreement will effectively convey the Business to
Freezer Group and Agripac, Inc., including, without limitation,
all tangible and intangible assets relating to the Business, and
will allow Freezer Group and Agripac to operate the Business in
the same manner as it has historically been operated.
4.11 Accuracy and Completeness of Representations and
Warranties. No representation or warranty made by Stokely in
this Agreement and no statement contained in any schedule or
exhibit delivered or to be delivered to Freezer Group pursuant to
this Agreement contains or will contain any untrue statement of a
material fact or omit to state a material fact, necessary to make
the statements contained herein or therein, not misleading.
There is no fact or condition which materially adversely affects
or, to the best of the knowledge of Stokely, in the future may
materially adversely affect, the Business or any of the Assets,
which fact or condition has not been set forth in this Agreement
or in the attached schedules or exhibits.
5. REPRESENTATIONS AND WARRANTIES OF FREEZER GROUP.
Freezer Group represents and warrants to Stokely that the
following statements are true and correct on the date of this
Agreement and will be true and correct on the Closing Date as
though made on such date:
5.1 Organization and Standing of Freezer Group. Freezer
Group is a Washington limited liability company organized,
validly existing and in good standing under the laws of the State
of Washington. Freezer Group has the power and authority to
execute and deliver, and carry out the transactions on its part
contemplated by, this Agreement.
5.2 Authority for Transaction. The execution and delivery
of this Agreement by Freezer Group, the performance by Freezer
Group of its obligations hereunder, and the consummation of the
transactions contemplated herein have been duly authorized and
approved by all necessary corporate action on the part of Freezer
Group. This Agreement constitutes a legal, valid and binding
obligation of Freezer Group, enforceable against Freezer Group in
accordance with its terms.
5.3 No Conflict. The execution and delivery of this
Agreement by Freezer Group, the consummation of the transactions
provided for herein and the fulfillment of the terms hereof, will
not result in a breach of any of the terms and provisions of, or
constitute a default under or conflict with, any agreement,
indenture or other instrument to which Freezer Group is a party
or by which Freezer Group is bound, or any judgment, decree,
order or award of any court, governmental body or arbitrator or
any law, rule or regulation applicable to Freezer Group. No
consent, authorization or approval of, or the granting of any
exemption by, any governmental or public body or authority is
required in connection with the execution, delivery and
performance by Freezer Group of this Agreement or the taking of
any action by Freezer Group herein provided.
6. CONSENTS.
Stokely shall exercise its best efforts to obtain prior to
the Closing Date all consents, authorizations, waivers, approvals
of or exemptions by, any Persons that are identified in Schedule
4.4. Freezer Group shall cooperate with Stokely in providing
information to which only Freezer Group has access that is
requested by the Persons identified in Schedule 4.4 from whom
consents, authorizations, waivers, approvals, or exemptions are
required to the extent that providing such information is
necessary in order to permit Stokely to secure such Person's
consents, authorizations, waivers, approvals or exemptions.
7. AGREEMENTS PRIOR TO CLOSING.
7.1 Fulfillment of Conditions. Each party hereto agrees to
use its best efforts to take any action necessary or appropriate
to cause the conditions set forth in Section 8 to be fulfilled at
or prior to the Closing. Without limiting the generality of the
foregoing, each party will refrain from taking any action which
would cause, and shall use its best efforts to take any action
necessary to prevent, any of the representations and warranties
made by it in this Agreement not to be true and correct in all
respects at and as of the Closing Date with the same force and
effect as if then made, subject only to exemptions permitted or
expressly contemplated by this Agreement. Promptly upon becoming
aware of any fact, or of the occurrence or impending or
threatened occurrence of any event, which would cause or
constitute a breach, or would have caused or constituted a
breach, of any of such representations and warranties had such
fact been known or such event occurred prior to the date hereof,
each party shall give detailed written notice thereof to the
others.
7.2 Inspection and Information. Freezer Group may, through
its representatives, accountants and attorneys, make such
investigation of the Assets and Business of Stokely, including
without limitation contacting personnel, customers and suppliers
of Stokely, as they may deem necessary or advisable, and Stokely
agrees to make available to such persons its books, records and
other data related to the Assets and Business and its personnel,
customers and suppliers as may from time to time be reasonably
requested (provided, however, that such investigation shall be
made only at reasonable hours and so as not to interfere with
Stokely's operations).
7.3 Confidentiality. Whether or not the transactions
contemplated hereby are consummated, each of the parties hereto
agrees to use its best efforts to keep confidential any and all
information and data with respect to the other party which it has
received as a result of any investigation made in connection with
this Agreement and which is not otherwise available to the
public; provided, however, that notwithstanding the foregoing
each of the parties hereto shall be free to disclose any such
information or date (a) to the extent required by applicable law
or (b) during the course of or in connection with any litigation,
arbitration or other proceeding based upon or in connection with
the subject matter of this Agreement, including, without
limitation, the failure of the transactions contemplated hereby
to be consummated. Neither Stokely nor Freezer Group will make
any public announcement or communication to employees, customers
or suppliers regarding the subject matter of the transaction
contemplated by this Agreement without the prior approval of the
others, other than disclosures required by law.
8. CONDITIONS TO OBLIGATIONS OF FREEZER GROUP AND STOKELY.
8.1 Conditions to Obligations of Freezer Group.
Notwithstanding any other provision of this Agreement, the
obligation of Freezer Group to purchase the Assets is subject to
the satisfaction or waiver in writing, on or before the Closing
Date, of the following conditions:
8.1.1 Representations and Warranties; Covenants. All
representations and warranties of Stokely contained in this
Agreement and in the certificates and other instruments delivered
by Stokely to Freezer Group in connection with this Agreement
shall be true and correct in all material respects as and as of
the Closing Date as though made at and as of such time, and
Stokely shall have performed and complied with all material
covenants, obligations and conditions required by this Agreement
to be performed or complied with prior to or on the Closing Date;
and Freezer Group shall have received a certificate signed by
Stokely's President, dated the Closing Date, to that effect.
8.1.2 Consents and Approvals.
8.1.2.1 All consents and approvals set forth in
Schedule 4.4 shall have been given by the Person authorized to
give such consent or approval and each such consent or approval
shall have been given unconditionally and without any requirement
that any terms and conditions of this Agreement or the
transactions contemplated hereby be modified or amended in any
respect.
8.1.2.2 Freezer Group shall have obtained any
and all material permits (other than business licenses),
authorizations, consents or approvals of any public body or
authority required to effectively transfer the Assets and to
allow Freezer Group to operate the Business in the same manner as
Stokely.
8.1.3 Litigation. There shall be no pending or
threatened litigation against the Business or the Assets or
Stokely other than those set forth on Schedule 4.5.6 that, in the
opinion of counsel for any party has or could have any material
adverse effect on the Business or the Assets or the enjoyment of
the benefits of them by Freezer Group.
8.1.4 Authorizations. All actions necessary to
authorize the execution, delivery and performance of this
Agreement by Stokely and the consummation of the transactions
contemplated by this Agreement shall have been duly and validly
taken by Stokely.
8.1.5 No Material Adverse Change. There shall have
been no material adverse change in the Business, the Assets or
the financial condition, prospects or operations of Stokely
between the date of this Agreement and the Closing Date.
8.1.6 Damage to or Destruction of the Assets. In the
event of any destruction or condemnation of the Assets or any
material portion of the Assets prior to Closing, Freezer Group or
Stokely may elect to terminate this Agreement and the purchase of
the Assets contemplated by this Agreement if (i) there has been a
material dissipation of the Assets or (ii) the Assets are no
longer suitable for Freezer Group's intended use. If neither
party elects to terminate this Agreement as provided herein, the
parties shall proceed to Closing and Freezer Group will receive
any insurance proceeds or condemnation award with respect to the
Assets so destroyed or condemned, free and clear of all liens or
interests of any third parties. Stokely shall provide Freezer
Group with written notice of any destruction or condemnation of
the Assets or any portion thereof immediately after the
occurrence of such destruction or condemnation, and, pending
election by the parties, any insurance proceeds or condemnation
award shall be deposited in escrow.
8.1.7 Documents of Transfer. Stokely shall have
provided to Freezer Group the Closing deliveries set forth in
Section 2.8.2 and any documents necessary to transfer ownership
of the Assets to Freezer Group, free and clear of all liens
except liens listed on Schedule 2.8.2.6.
8.1.9 Closing of Inventory Purchase Agreement. The
closing of Agripac and Dean Foods purchase of the inventory
pursuant to the Inventory Purchase Agreement shall have occurred
or shall simultaneously occur with the closing hereunder.
8.1.10 Closing of Walla Walla Plant Purchase
Agreement. The closing of Agripac's purchase of the Walla Walla
Plant pursuant to the Walla Walla Plant Purchase Agreement shall
have occurred or shall simultaneously occur with the closing
hereunder.
8.1.11 Hart-Scott Act. Any waiting period (and any
extension thereof) applicable to the consummation of the
transaction contemplated hereby under the Hart-Scott Act shall
have expired or been terminated.
8.1.12 Satisfaction of Counsel. The validity of all
transactions herein mentioned, as well as the form and substance
of all opinions, certificates and other documents hereunder shall
be satisfactory in all reasonable aspects to counsel for Freezer
Group.
8.2 Conditions to Obligations of Stokely. Notwithstanding
any other provision of this Agreement, the obligation of Stokely
to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver in writing, on or before
the Closing Date, of the following conditions:
8.2.1 Representations and Warranties; Covenants. All
representations and warranties of Freezer Group contained in this
Agreement and in the certificates and other instruments delivered
by Freezer Group to Stokely in connection with this Agreement
shall be true and correct in all material respects at and as of
the Closing Date as though made at and as of such time, and
Freezer Group shall have performed and complied with all material
covenants, obligations and conditions required by this Agreement
to be performed or complied with by Freezer Group prior to or on
the Closing Date; and Stokely shall have received a certificate
signed by an officer of Freezer Group, dated the Closing Date, to
that effect.
8.2.2 Authorizations. All actions necessary to
authorize the execution, delivery and performance of this
Agreement by Freezer Group and the consummation of the
transactions contemplated by this Agreement shall have been duly
and validly taken by Freezer Group.
8.2.3 Consents and Approvals. All consents and
approvals set forth in Schedule 4.4 shall have been given by the
Person authorized to give such consent or approval and each such
consent and approval shall have been given unconditionally and
without any requirement that any terms and conditions of this
Agreement or the transactions contemplated hereby be modified or
amended in any respect.
8.2.4 Documents of Transfer. Freezer Group shall have
provided to Stokely the Closing deliveries set forth in Section
2.8.3.
8.2.6 Hart-Scott Act. Any waiting period (and any
extension thereof) applicable to the consummation of the
transactions contemplated hereby under the Hart-Scott Act shall
have expired or been terminated.
8.3 Waiver of Conditions. In the event the conditions
precedent to Freezer Group's obligation to close this transaction
have not been satisfied at or prior to the Closing Date, Freezer
Group may, at their option, elect (i) to waive such conditions
and to close the transaction on the terms and conditions set
forth herein, or (ii) terminate this Agreement. In the event the
conditions precedent to Stokely's obligations to close this
transaction have not been satisfied at or prior to the Closing
Date, Stokely may, at its option, elect (i) to waive such
conditions and close the transaction on the terms and conditions
set forth herein, or (ii) terminate this Agreement. In the event
that any party hereto exercises such right of termination, there
shall be no liability on the part of the terminating party or its
officers, directors or stockholders to any other party to this
Agreement, nor shall there be any liability on the part of any
other parties to this Agreement or its officers, directors or
stockholders.
9. INDEMNIFICATION.
9.1 Survival of Representations. The representations,
warranties, covenants and agreements of the parties contained
herein shall be continuing and shall survive the consummation of
this transaction notwithstanding any investigation by or on
behalf of any party. Consummation of the transaction
contemplated herein shall not be deemed to be a waiver of any
right or remedy possessed by any party hereto notwithstanding
that such party knew or should have known at the time of the
Closing that such right or remedy existed.
9.2 Indemnification by Stokely. Stokely shall be
responsible to Freezer Group for, and shall defend, indemnify,
and hold Freezer Group harmless from and against loss, damage,
liability, cost or expense (including, without limitation,
reasonable attorneys' fees, legal expenses, consultant's fees and
interest and penalties), that shall be suffered or incurred by
Freezer Group, resulting from or relating to (i) claims or
demands made by third parties against Freezer Group with regard
to Stokely's ownership, management, or conduct of the Business or
use of the Assets prior to and including the Closing Date,
including without limitation any liabilities for personal injury,
property damage, or other harm relating to services provided or
products of the Business sold by Stokely prior to and including
the Closing Date, or any other liability, obligation or
commitment of Stokely (whether known or unknown, fixed or
contingent, due or to become due) not expressly assumed by
Freezer Group under this Agreement; (ii) any breach of any of the
representations or warranties of Stokely contained in this
Agreement (including, without limitation, any schedule,
certificate, exhibit or other instrument delivered or to be
delivered by Stokely pursuant to this Agreement) or failure of
Stokely to perform or observe any term of or covenant in this
Agreement; (iii) any failure by Stokely to satisfy the
liabilities of the Business not assumed by Freezer Group, or the
failure to comply with any applicable requirements of the bulk
transfer provisions of the Uniform Commercial Code or any other
applicable state law; (iv) any act or cause of action arising out
of the Collective Bargaining Agreement; (v) any actions, suits,
proceedings, demands, or assessments incident to any of the
foregoing and any investigation or defense against claims which,
if proven, would be covered thereby.
9.3 Indemnification by Freezer Group. Freezer Group shall
be responsible to Stokely for, and shall defend, indemnify and
hold Stokely harmless from and against loss, damage, liability,
cost or expense (including, without limitation, reasonable
attorneys' fees, legal expenses and consultant's fees and
interest and penalties) that shall be suffered or incurred by
them, resulting or relating to (i) claims or demands made by
third parties against Stokely with regard to Freezer Group's
ownership, management, or conduct of the Business or use of the
Assets after the Closing Date, including, without limitation, any
liabilities for personal injury, property damage or other harm
relating to services provided by or products of the Business sold
by Freezer Group after the Closing Date; (ii) any breach of any
of the representations or warranties of Freezer Group contained
in this Agreement (including, without limitation, any schedule,
certificate, exhibit or other instrument delivered or to be
delivered by Freezer Group pursuant to this Agreement) or failure
of Freezer Group to observe or perform any term of or covenant in
this Agreement; (iii) any failure by Freezer Group to satisfy the
Assumed Liabilities; or (iv) any actions, suits, proceedings,
demands or assessments incident to any of the foregoing and any
investigation or defense against claims which, if proven, would
be covered thereby.
9.4 Notice of Claim. In the event that any legal
proceeding shall be instituted or any claim or demand shall be
asserted by any person in respect of which Freezer Group or
Stokely intends to seek indemnification under the provisions of
this Section 9, Freezer Group or Stokely, as the case may be,
shall promptly cause written notice thereof to be given to the
other party. Notwithstanding the foregoing, Stokely or Freezer
Group's right to indemnification hereunder shall not be affected
by any delay in giving notice unless, and then only to the extent
that, the rights and remedies of the indemnifying party shall
have been prejudiced as a result of the delay in giving such
notice. In the event the indemnifying party has knowledge that
it will indemnify and reimburse the indemnified party with
respect to a particular lawsuit, claim or demand, the
indemnifying party shall be permitted to control the conduct of
any defense and, at the expense and option of the indemnifying
party, may settle such claim. The indemnified party shall make
no settlement of any such suit, claim or demand without the
indemnifying party's prior written consent (which consent shall
not be unreasonably withheld) unless the indemnifying party has
failed to accept such defense within 20 days after the
indemnifying party has been notified of such suit, claim or
demand, or unless the indemnifying party has failed to diligently
maintain such defense after such acceptance, or unless the matter
in question shall have been finally determined adversely to the
indemnifying party or indemnified party by a court or
governmental instrumentality having jurisdiction thereof. The
indemnified party shall cooperate with the indemnifying party in
each such defense, but all of the indemnified party's out-of-
pocket expenses shall be paid by the indemnifying party. It
shall be no defense to the claims by the indemnified party for
indemnification hereunder that a third party claimant cannot or
does not prove his claim.
10. MISCELLANEOUS.
10.1 Further Assurances. Stokely and Freezer Group will,
from time to time on or after the Closing Date, execute and
deliver to the other parties all such further assignments,
endorsements and other documents as Freezer Group or Stokely, as
the case may be, reasonably requests in order to complete the
transactions contemplated by this Agreement.
10.2 Amendments and Waivers. The provisions of this
Agreement may be amended only by the written agreement of all of
the parties to this Agreement. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any
provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically
set forth in such writing.
10.3 Successors and Assigns. Neither party may assign this
Agreement without the prior written consent of the other party.
In the event the Agreement is assigned, the Agreement will bind
and inure to the benefit of the respective assigns of the parties
to this Agreement. In the event there is any successor to a
party to this Agreement, this Agreement will bind and inure to
the benefit of the respective successors.
10.4 Public Announcement. No press release or other formal
public announcement with respect to this Agreement or any of the
transactions contemplated hereby shall be made without the
express approval of Freezer Group and Stokely; provided, however,
that if, in the opinion of counsel for Stokely or Freezer Group,
public disclosure of the pendency of such transaction is required
under the Federal Securities Laws, the consent or approval of the
other to the release of such publicity and the consent thereof
shall not be unreasonably withheld.
10.5 Default. Time is of the essence of this Agreement. If
either party defaults under this Agreement, the other party may
seek specific performance of this Agreement, damages, or
rescission. In any suit, action or appeal to enforce this
Agreement or any term or provision of this Agreement, or to
interpret this Agreement, the prevailing party shall be entitled
to recover its costs incurred, including reasonable attorneys'
fees at trial or on appeal.
10.6 Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of this Agreement.
10.7 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do
not constitute a party of this Agreement.
10.8 Notices. Any notices, requests, demands or other
communications required or permitted to be sent under this
Agreement shall be delivered personally, sent by overnight
courier or mailed by registered or certified mail, return receipt
requested, to the following addresses, and shall be deemed to
have been received on the day of personal delivery, one business
day after deposit with an overnight courier or three business
days after deposit in the mail:
To Freezer Group: Attn: General Manager
P.O. Box 604
Grandview, WA 98930
With a copy to: Lane Powell Spears Lubersky LLP
Attn: Michael D. Dwyer
1420 Fifth Avenue, Suite 4100
Seattle, Washington 98101
To Stokely: Stokely USA, Inc.
Attn: Robert Brill
1055 Corporate Center Drive
Oconomowoc, WI 53056
With a copy to: ___________________________
Attn: _____________________
___________________________
___________________________
10.9 Governing Law. The validity, meaning and effect of
this Agreement shall be determined in accordance with the laws of
the State of Washington applicable to contracts made and to be
performed in that state.
10.10 Entire Agreement. This Agreement, together with
those documents expressly referred to in this Agreement,
constitutes the final agreement of the parties concerning the
matters referred to in this Agreement, and supersedes all prior
agreements and understandings.
10.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts
together shall constitute one instrument.
10.12 Schedules. The following Schedules and Exhibits
are attached to and form an integral part of this Agreement:
Collective Bargaining Agreement Exhibit 1.2
Employee Plans Exhibit 1.4
Real Property Exhibit 1.7
Equipment Exhibit 2.1.1
Assigned Contracts Schedule 2.1.3
Assumed Liabilities Schedule 2.3
Allocation of Purchase Price Schedule 2.6
Liens on Assets Schedule 2.8.2.6
Consents Schedule 4.4
Exceptions to Free and Clear Title
to Assets Schedule 4.5.1
Assets Not in Operable Condition Schedule 4.5.2
Noncompliance with Laws Schedule 4.5.4
Pending Litigation Schedule 4.5.6
Liabilities Schedule 4.6
Material Contracts Schedule 4.7.2
Hazardous Substances Schedule 4.9
<PAGE>
The parties to this Agreement have executed this Agreement
as of the date first set forth above.
THE FREEZER GROUP ACQUISITION, STOKELY USA, INC.
L.L.C.
By: Scott Wingert By: Robert M. Brill
Its: Asst. General Manager Its: Secretary
STATE OF Wisconsin )
) ss.
County of Waukesha )
This instrument was acknowledged before me on July 23,
1996, by Scott Wingert, as Asst. General Manager of The Freezer
Group Acquisition, L.L.C.
Michelle Schmid
Notary Public for Waukesha
My Commission Expires: 11-3-96
STATE OF Wisconsin )
) ss.
County of Waukesha )
This instrument was acknowledged before me on July 23,
1996, by Robert M. Brill, as Secretary of Stokely USA, Inc.
Michelle Schmid
Notary Public for Waukesha
My Commission Expires: 11-3-96
