UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 30, 1998
Seaboard Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-3390 04-2260388
(State or other jurisdiction of (Commission (I.R.S. Employer)
incorporation or organization) File Number) Indentification No.)
9000 W. 67th Street, Shawnee Mission, Kansas 66202
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (913) 676-8800
Not Applicable
(Former name or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets
Effective December 30, 1998, the Registrant completed the sale of its
Holsum Bakers business located at Toa Baja, Puerto Rico and its
Harinas de Puerto Rico flour milling operation located at Guanica,
Puerto Rico, to a management group led by the current President of
Holsum Bakers, Ramon Calderon. These assets were sold for
approximately $81 million (which includes an adjustment increasing the
purchase price by approximately $1 million pursuant to section
2(b)(iii) of the sale agreement) and the assumption of approximately
$12 million in liabilities. Approximately $35 million of cash and
short-term investments carried on the books of these companies were
excluded from the sale and retained by the registrant. The registrant
also retained approximately $2 million in net tax liabilities. The
proceeds consist of approximately $72 million in cash, an $8 million
interest bearing subordinated note receivable due in 2004, and a $1
million interest bearing note receivable from Ramon Calderon due in
2000. Consideration was determined by arms length negotiations.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information:
The following pro forma unaudited condensed consolidated financial
data of Seaboard Corporation (the Company) reflects the pro forma
impact on the Company's financial position and results of operations
of the sale of its Holsum Bakers and Harinas de Puerto Rico flour
milling businesses (the Sold Businesses). Pro forma condensed
consolidated statements of earnings are presented for the nine months
ended September 30, 1998 and the year ended December 31, 1997,
reflecting pro forma adjustments as if the sale was consummated at the
beginning of each of the periods presented. A pro forma condensed
consolidated balance sheet is presented as of September 30, 1998,
reflecting pro forma adjustments as if the sale was consummated on
that date. Certain management assumptions and adjustments are
described in the accompanying notes. The following pro forma
financial information is not necessarily indicative of the actual
financial position or results of operations that would have resulted
had the sale been consummated on the dates assumed, nor is it
necessarily indicative of future operating results.
SEABOARD CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statements of Earnings
Nine months ended September 30, 1998
(Thousands of dollars except per share amounts)
(Unaudited)
Historical Pro Forma
September 30, Pro Forma September 30,
1998 Adjustments 1998
Net sales $1,340,086 $ (68,356) (1)$1,271,730
Cost of sales and operating expenses 1,180,994 (35,667) (1) 1,145,327
Gross income 159,092 (32,689) 126,403
Selling, general and
administrative expenses 106,068 (27,541) (1) 78,527
Operating income 53,024 (5,148) 47,876
Other income (expense):
Interest income 5,166 761 (2)
560 (3) 6,487
Interest expense (24,343) 2,298 (4) (22,045)
Loss from foreign affiliates (12,052) -- (12,052)
Miscellaneous 3,460 4 (1) 3,464
Total other income (expense), net (27,769) 3,623 (24,146)
Earnings before income taxes 25,255 (1,525) 23,730
Income tax expense 9,441 (2,208) (1)
1,114 (5) 8,347
Net earnings $ 15,814 $ (431) $ 15,383
Earnings per common share $ 10.63 $ (0.29) $ 10.34
Average number of shares outstanding 1,487,520 -- 1,487,520
SEABOARD CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statements of Earnings
Year ended December 31, 1997
(Thousands of dollars except per share amounts)
(Unaudited)
Historical Pro Forma
December 31, Pro Forma December 31,
1997 Adjustments 1997
Net sales $1,780,333 $ (93,977) (1)$1,686,356
Cost of sales and operating expenses 1,561,265 (49,443) (1) 1,511,822
Gross income 219,068 (44,534) 174,534
Selling, general and
administrative expenses 141,993 (36,616) (1) 105,377
Operating income 77,075 (7,918) 69,157
Other income (expense):
Interest income 6,127 1,012 (2)
760 (3) 7,899
Interest expense (31,108) 2,890 (4) (28,218)
Loss from foreign affiliates (8,733) -- (8,733)
Miscellaneous 1,221 -- 1,221
Total other income
(expense), net (32,493) 4,662 (27,831)
Earnings before income taxes 44,582 (3,256) 41,326
Income tax expense 14,008 (2,579) (1)
1,423 (5) 12,852
Net earnings $ 30,574 $ (2,100) $ 28,474
Earnings per common share $ 20.55 $ (1.41) $ 19.14
Average number of shares outstanding 1,487,520 -- 1,487,520
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Pro Forma Condensed Consolidated Statements of Earnings
Nine months ended September 30, 1998 and
Year ended December 31, 1997
1. Adjustment eliminates from consolidated results the amounts
contributed by the Sold Businesses. Adjustments do not reflect the
net gain on the sale of the Sold Businesses of approximately $34
million, after tax on the gain of approximately $22 million.
2. Adjustment reflects pro forma interest income earned during the
period on $28.8 million in cash proceeds from the sale invested in
short-term investments, consistent with the actual application of
proceeds resulting after the closing of the transaction. Pro forma
interest income for each period was based on an average, non-taxable
interest rate of 3.5%.
3. Adjustment reflects pro forma interest income earned during the
period on the $9 million of notes receivable received as components of
total sales proceeds, based on interest rates of 8% on the $8 million
note and 12% on the $1 million note.
4. Adjustment reflects the pro forma reduction in interest expense
assuming $43.5 million in cash proceeds are used to reduce short-term
borrowings, consistent with the actual application of proceeds
resulting after the closing of the transaction. Calculations are
based on annual interest rates of 7.2% for the nine months ending
September 30, 1998 and 6.6% for the year ended December 31, 1997.
5. Adjustment reflects the pro forma tax effect of additional
interest income and reduced interest expense discussed in 2., 3. and
4. above at statutory tax rates. Note that the additional pro forma
interest income discussed in 2. above is nontaxable.
SEABOARD CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Balance Sheet
September 30, 1998
(Thousands of dollars)
(Unaudited)
Pro Forma
Historical Adjustments Pro Forma
Assets
Current assets:
Cash and cash equivalents $ 12,865 $ 1,107 (1) $ 13,972
Short-term investments 117,963 28,839 (2) 146,802
Receivables, net 177,921 (8,978) (1)
500 (3) 169,443
Inventories 196,807 (3,408) (1) 193,399
Deferred income taxes 11,117 -- 11,117
Prepaid expenses and deposits 18,980 (1,369) (1) 17,611
Total current assets 535,653 16,691 552,344
Investments in and advances to
foreign affiliates 122,410 -- 122,410
Net property, plant and equipment 470,656 (20,356) (1) 450,300
Other assets 17,182 (1,457) (1)
8,500 (3) 24,225
Total assets $1,145,901 $ 3,378 $1,149,279
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ 175,048 $ (43,500) (4) $ 131,548
Current maturities of
long-term debt 6,883 -- 6,883
Accounts payable 67,009 (2,929) (1) 64,080
Other current liabilities 113,293 (4,802) (1)
1,500 (5)
21,942 (6) 131,933
Total current liabilities 362,233 (27,789) 334,444
Long-term debt, less
current maturities 306,048 -- 306,048
Deferred income taxes 32,342 -- 32,342
Other liabilities 31,428 (3,153) (1) 28,275
Total non-current and
deferred liabilities 369,818 (3,153) 366,665
Stockholders' equity:
Common stock of $1 par value,
Authorized 4,000,000 shares;
issued 1,789,599 shares 1,790 -- 1,790
Less 302,079 shares
held in treasury (302) -- (302)
1,488 -- 1,488
Additional capital 13,214 -- 13,214
Accumulated other
comprehensive income 147 -- 147
Retained earnings 399,001 34,320 (7) 433,321
Total stockholders' equity 413,850 34,320 448,170
Total liabilities and
stockholders'equity $1,145,901 $ 3,378 $1,149,279
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Pro Forma Condensed Consolidated Balance Sheet
September 30, 1998
1. Adjustment eliminates amounts attributable to the Sold
Businesses, net of assets and liabilities to be retained and the
settlement of intercompany balances.
2. Adjustment reflects pro forma increase in short-term investments
funded by cash proceeds not used to pay down short-term borrowings,
consistent with actual application of cash proceeds after the closing
of the transaction.
3. Adjustment reflects pro forma increase of $9 million in notes
receivable representing a portion of the sale proceeds. $500,000 of
the notes receivable are classified as current, the remaining $8.5
million are classified as long term.
4. Adjustment reflects the pro forma paydown of short-term
borrowings with a portion of the cash proceeds received from the
buyer, consistent with actual application of cash proceeds after the
closing of the transaction.
5. Adjustment reflects pro forma estimated expenses and liabilities
associated with the sale.
6. Adjustment reflects the pro forma estimated tax liability due on
the gain from the sale based on statutory tax rates.
7. Adjustment reflects the pro forma estimated gain, net of tax,
realized on the sale.
(c) Exhibits:
2.1 Stock and Asset Purchase Agreement by and between HDPR
Acquisitions Corp., and CB Acquisitions Corp., as Buyers and
Seaboard Corporation, as Seller, dated as of November 9,
1998.
2.2 Asset Purchase Agreement by and between HDPR Acquisitions Corp.,
as Buyer, Harinas de Puerto Rico, Inc., as Seller and Seaboard
Corporation, dated as of November 9, 1998.
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 thereunto duly authorized.
DATE: January 13, 1999
Seaboard Corporation
by: /s/ Robert L. Steer
Robert L. Steer, Vice President-Chief
Financial Officer
STOCK AND ASSET PURCHASE AGREEMENT
by and between
HDPR ACQUISITIONS CORP.,
and
CB ACQUISITIONS CORP.,
as Buyers,
and
SEABOARD CORPORATION,
as Seller
________________________________________
Dated as of November 9, 1998
________________________________________
TABLE OF CONTENTS
Section Page
1. Purchase and Sale of the Assets and the Shares;
Assumption of Assumed Liabilities. . . . . . . . . . .2
2. Closing; Purchase Price Adjustment.. . . . . . . . . 10
3. Conditions to Closing. . . . . . . . . . . . . . . . 13
4. Representations and Warranties of Seller.. . . . . . 17
5. Covenants of Seller. . . . . . . . . . . . . . . . . 20
6. Representations and Warranties of Buyer. . . . . . . 27
7. Mutual Covenants.. . . . . . . . . . . . . . . . . . 28
8. Employee Matters . . . . . . . . . . . . . . . . . . 31
9. Further Assurances.. . . . . . . . . . . . . . . . . 31
10. Indemnification. . . . . . . . . . . . . . . . . . . 32
11. Tax Matters. . . . . . . . . . . . . . . . . . . . . 36
12. Assignment.. . . . . . . . . . . . . . . . . . . . . 41
13. No Third-Party Beneficiaries.. . . . . . . . . . . . 41
14. Termination. . . . . . . . . . . . . . . . . . . . . 41
15. Survival of Representations. . . . . . . . . . . . . 44
16. Expenses.. . . . . . . . . . . . . . . . . . . . . . 45
17. Amendments.. . . . . . . . . . . . . . . . . . . . . 45
18. Notices. . . . . . . . . . . . . . . . . . . . . . . 46
19. Interpretation.. . . . . . . . . . . . . . . . . . . 47
20. Counterparts.. . . . . . . . . . . . . . . . . . . . 47
21. Entire Agreement.. . . . . . . . . . . . . . . . . . 47
22. Fees.. . . . . . . . . . . . . . . . . . . . . . . . 48
23. Severability.. . . . . . . . . . . . . . . . . . . . 48
24. Governing Law; Consent to Jurisdiction.. . . . . . . 48
25. Waiver of Trial by Jury. . . . . . . . . . . . . . . 49
EXHIBITS
B
C
D
E
F
G SCHEDULES
STOCK AND ASSET PURCHASE AGREEMENT
Stock and Asset Purchase Agreement dated as of November 9,
1998, by and between HDPR Acquisitions Corp. ("HDPR") and CB
Acquisitions Corp. ("CB"), Puerto Rico corporations (each, a "Buyer"
and, collectively, "Buyers"), and Seaboard Corporation, a Delaware
corporation ("Seller").
WHEREAS HDPR desires to purchase from Seller and Seller desires
to sell to HDPR all the Holsum Assets (as defined below), and HDPR
desires to assume all the Assumed Liabilities (as defined below)
relating to the Holsum Business (as defined below) on the terms and
subject to the conditions set forth herein; and
WHEREAS CB desires to purchase from Seller and Seller desires
to sell to CB all the issued and outstanding shares of capital stock
(the "Shares") of Seaboard Bakeries, Inc. ("Seaboard Bakeries"), a
Delaware corporation and a wholly owned subsidiary of Seller, and
the Seaboard Bakeries Trademarks (as defined below), to the extent
not owned directly by Seaboard Bakeries;
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable con
sideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
1. Purchase and Sale of the Assets and the Shares;
Assumption of Assumed Liabilities.
(a) Purchase and Sale of the Assets and the Shares;
Purchase Price Allocation. (i) On the terms and subject to the
conditions of this Agreement, (A) Seller will sell, transfer,
assign, convey and deliver to HDPR, and HDPR will purchase from
Seller, the Holsum Assets, and (B) Seller will sell, transfer,
assign, convey and deliver to CB, and CB will purchase from Seller,
the Shares and the Seaboard Bakeries Trademarks (to the extent not
owned direct directly by Seaboard Bakeries) for an aggregate
purchase price equal to $74,500,000 plus the assumption of the
Assumed Liabilities (the "Purchase Price"), payable as set forth
below in Section 2(a), and subject to adjustment as provided in
Section 2(b).
(ii) Without affecting Seller's obligations
hereunder, Seller shall have the right to transfer the Holsum Assets
and the Assumed Liabilities related to the Holsum Business to a
newly formed wholly owned limited liability company on or prior to
the Closing Date and to cause such limited liability company to
transfer the Holsum Assets and the Assumed Liabilities related to
the Holsum Business pursuant to this Agreement. Seller shall not
use the name Holsum Bakers' in connection with the Business after
the Closing Date and shall change the name no later than six months
after the Closing Date (or earlier if necessary in order to allow
Buyer to use the name). Seller agrees to execute any consent that
may be required in connection with Buyer's use of such name.
(iii) Seller and Buyers agree that the Purchase Price
shall be allocated as follows: $67,500,000 plus the assumption of
the Assumed Liabilities for the Holsum Assets, and $7,000,000 for
the Shares and the Seaboard Bakeries Trademarks. The allocation of
the purchase price among the Holsum Assets will be agreed to between
Seller and HDPR after the date hereof; provided, however, that to
the extent that HDPR requests, and
Seaboard agrees, that any portion of the purchase price be allocated
to the Restrictive Covenant, (as defined below), HDPR shall
indemnify Seller for any Puerto Rico income tax payable by Seller
attributable to such Restrictive Covenant in excess of the amount of
Puerto Rico income tax thereon that would be payable by Seller if no
portion of the purchase price had been allocated to such Restrictive
Covenant, any interest and penalties and for any taxes payable with
respect to this indemnity (gross up). Buyers and Seller agree to
file all income, franchise and other tax returns, and execute such
other documents or instruments as may be required by any
governmental authority in a manner consistent with such allocations.
(b) Holsum Assets. The term "Holsum Assets" shall mean
the right, title and interest of Seller and any affiliate of Seller
in the assets of Seller or such affiliate used or held primarily in
the conduct of the business (the "Holsum Business") of the Holsum
Bakers of Puerto Rico division of Seller ("Holsum Bakers"), wherever
located and whether or not reflected on the books of Seller or such
affiliate, whether tangible or intangible, whether real, personal or
mixed, and whether existing on the date hereof or acquired
hereafter, but excluding prepaid or deferred tax assets. Without
limiting the generality of the foregoing, the Holsum Assets include,
among other things, the following:
(i) Real Property. The real property
described on Schedule 1(b)(i) hereto, together with all buildings,
improvements and fixtures thereon and all rights (including, but
not limited to, any rights that Seller may possess over any other
properties, such as any related rights of way or options), privileges and
easements appurtenant thereto (the "Real Property");
(ii) Equipment. All machinery, equipment,
vehicles, parts, supplies, fixtures, computers, trade fixtures and
furnishings, whether leased or owned, that are located on the Real
Property on the date hereof or otherwise used primarily in
connection with the Holsum Business (the "Equipment"), including
without limitation the Equipment set forth on Schedule 1(b)(ii);
(iii) Contracts. All contracts, leases,
agreements, commitments, purchase orders and other legally binding
arrangements, whether oral or written, to which Seller is a party
or by which Seller is bound which are related to the Holsum Business,
including but not limited to those listed on
Schedule 1(b)(iii) (the "Contracts");
(iv) Inventory. All inventory, goods,
materials and supplies that are used in the Holsum Business (the
"Inventory") and that are owned by Seller on the Closing Date;
(v) Computer Software. To the extent
permitted by the relevant license agreement, all computer software
(including, without limitation, licenses, warranties and
documentation related thereto and related objects and source codes)
primarily utilized in the Holsum Business;
(vi) Records. All information, files, records,
data and plans relating to the operation of the Holsum Business,
including, without limitation, maintenance records and manuals, and as-
built drawings and surveys (provided that Seller shall have the right
to retain copies of any or all such records);
(vii) Licenses, Licensing Agreements and
Permits. To the extent permitted by law and the terms of the
license or permit, all permits, authorizations, licenses, licensing
agreements, privileges and rights related to the Holsum Business,
including all government authorizations, permits and licenses;
(viii) Intellectual Property. Any and all
patents, patent applications (whether filed, unfiled or being
prepared), invention disclosures, trademarks (whether registered or
unregistered), trademark registrations, trademark applications (whether
filed, unfiled or being prepared), trade names, copyrights (registered
or unregistered), copyright applications (whether
filed, unfiled or being prepared), service marks (registered or unregistered),
service mark applications (whether filed, unfiled or being prepared), all
together with the goodwill of the Holsum Business associated with such marks
or names, trade secrets, technology, inventions, know how, processes and
confidential and proprietary information, including any being developed
(including, but not limited to, drawings, designs, manufacturing data, design
data, test data, operational data, engineering drawings, formulae, computer
programs, computer software and manuals), whether or not subject to statutory
registration, and Seller's patent and trademark files (or copies thereof) on
all such intellectual property, and all other intellectual property and all
rights thereunder, or in respect thereof, in each and every case referred to
in this Section 1(b)(viii) relating primarily to the Holsum Business,
including without limitation the trademarks and service marks listed on
Schedule 1(b)(viii); provided that Seller expressly disclaims any warranty,
express or implied, that it owns or has the exclusive right to use the same or
that any of the intellectual property transferred does not violate or infringe
upon the intellectual property rights of any third person;
(ix) Accounts Receivable. All accounts
receivable owed to the Holsum Business and generated from sales of
products of the Holsum Business;
(x) Cash. All cash and investments held by or
for the account of Holsum Bakers on the Closing Date to the extent
that the sum of the Seaboard Bakeries Dividend (as defined below) and the
Holsum Cash Balance (as defined below) exceeds $30,488,851; and
(xi) Other Assets. All other assets of the
Holsum Business not described above reflected on the August 1,
1998, balance sheet set forth as Schedule 1(b)(xi) (the "Balance
Sheet"), to the extent such assets have not been sold in the
ordinary course of business or by persons under the direct or
indirect supervision of Mr. Ramon Calderon.
(c) Seaboard Bakeries Assets. The term "Seaboard
Bakeries Assets" shall mean the right, title and interest of Seller
and any affiliate of Seller, including Seaboard Bakeries, in the
assets of Seller or such affiliate used or held primarily in the
conduct of the business of Seaboard Bakeries (the "Seaboard Bakeries
Business"), wherever located and whether or not reflected on the
books of Seller or such affiliate, whether tangible or intangible,
whether real, personal or mixed, and whether existing on the date
hereof or acquired hereafter. Without limiting the generality of
the foregoing, the Seaboard Bakeries Assets include, among other
things, the types of assets described in Section 1(b) above, but
relating to the Seaboard Bakeries Business instead of the Holsum
Business, and the assets of the Seaboard Bakeries Business listed in
the schedules specified in Section 1(b).
(d) Seaboard Bakeries Trademarks. The term "Seaboard
Bakeries Trademarks" shall mean the trademarks, service marks, trade
names and other intellectual property of the type described in
Section 1(b)(viii) used exclusively by the Business, including that
set forth on Schedule 1(d). Seller makes no warranty, express
or implied, that the Seaboard Bakeries Trademarks do not infringe
upon the intellectual property rights of any other person or that it
owns or has the exclusive right to use the same.
(e) The term "Assets" means, collectively, the Holsum
Assets and the Seaboard Bakeries Assets. The term "Business" means,
collectively, the Holsum Business and the Seaboard Bakeries
Business.
(f) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN,
BUYERS TAKE THE ASSETS "AS IS" AND BUYERS ACKNOWLEDGE THAT, EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, NEITHER SELLER NOR ANY
PREDECESSOR OR SUCCESSOR IN INTEREST OF SELLER NOR ITS EMPLOYEES,
REPRESENTATIVES, AGENTS OR ASSIGNS HAS MADE, NOR SHALL BE DEEMED TO
HAVE MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO
VALUE, CONDITION, MERCHANTABILITY, DESIGN, QUALITY, DURABILITY,
OPERATION, OR FITNESS FOR USE OR PURPOSE OF SUCH ASSETS, OR ANY
OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO SUCH ASSETS, OR ANY COMPONENT THEREOF, IT BEING
AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY BUYERS IN
THE EVENT OF ANY DEFECT OR DEFICIENCY IN SUCH ASSETS OR ANY
COMPONENT PART THEREOF, OF ANY NATURE, WHETHER PATENT OR LATENT, AND
THAT SELLER SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT
THERETO. This provision is intended as a complete exclusion and
negation of any warranties by Seller, express or implied, with
respect to the Assets or any component thereof, other than the
warranties set forth herein.
(g) Assumed Liabilities. On the Closing Date, HDPR and
CB shall assume, and shall thereafter pay, perform and discharge
when due by their terms or as required by law, all the obligations
and liabilities of Seller related to the Holsum Business and the
Seaboard Bakeries Business, respectively, other than Retained
Liabilities (as defined below), all in accordance with their terms
(the "Assumed Liabilities"), including, but not limited to, (i) all
liabilities included in the balance sheet of Holsum Bakers as of the
Closing Date to be prepared by the parties (the "Closing Date
Balance Sheet"); (ii) all obligations to perform the Contracts;
(iii) all liabilities or claims arising from the operations of the
Holsum Business and the Seaboard Bakeries Business, respectively
(whether accruing prior to or after the Closing Date), other than
Retained Liabilities; (iv) all liabilities arising under all
employee benefit plans of Holsum Bakers and Seaboard Bakeries
relating to all present and former employees of Holsum Bakers and
Seaboard Bakeries (the "Plans"), including all unfunded liabilities
under such Plans relating to such employees, any liability arising
from any "deemed termination" of any such Plan, any liability
arising from prior violations of law with respect to the Plans, any
liability for violations of the minimum funding rules, any liability
for violations of the reporting and disclosure rules, any liability
for any past or present breach of fiduciary rules, any liability for
any violation of rules under the Internal Revenue Code, any
liability for any breach of ERISA, any liability for breach of COBRA
rules, any liability for the failure to file any Form 5500 for prior
years and the responsibility for Form 5500 filings in all subsequent
years, any liability or responsibility with respect to any audit of
the Plans, and all responsibility for any and all reporting
requirements under Section 4043 of ERISA; (v) all claims and
liability arising from the termination or deemed termination of any
contract, whether under Act 75 of the Legislature of Puerto Rico or
otherwise; and (vi) all liabilities as successor employer of the
employees of the Business, including but not limited to any existing
or future claim of wrongful termination, discrimination or any other
claims related to terms and conditions of employment; but excluding
Retained Liabilities, which Retained Liabilities will be retained by
Seller. In
addition, the Assumed Liabilities shall include liability for any
WARN Act, severance, or other labor or employment obligations or
claims under United States law, the law of the Commonwealth of
Puerto Rico, or any local law or ordinance arising from or relating
to the sale of the Assets and the Shares or the operation of the
Business, other than Retained Liabilities.
(h) Retained Liabilities. The term "Retained
Liabilities" shall mean, with respect to both Holsum Bakers and
Seaboard Bakeries, (i) all liability relating to or arising from the
claims identified on Schedule 1(h)(i), except to the extent of any
amount reserved for such claims on the Balance Sheet and indicated
on said schedule; (ii) any liability under any agreement entered
into by Seller or Seaboard Bakeries that (A) is not listed on
Schedule 1(b)(ii) and (B) was entered into on behalf of Seller or
Seaboard Bakeries by officers or employees of Seller or Seaboard
Bakeries not under the direct or indirect supervision of Mr. Ramon
Calderon, but only if any such agreement was not actually or
constructively known to Buyers on the date hereof; and (iii) any
liability arising from any action taken by officers or employees of
Seller or Seaboard Bakeries not under the direct or indirect
supervision of Mr. Ramon Calderon, and which action was not actually
or constructively known to Buyers on the date hereof.
(i) Withholding. All payments relating to the Purchase
Price, including all payments of principal and interest due on the
Note (as defined below) shall be made without any withholding or
deduction of any kind other than (i) those relating to payments on
account of the Restrictive Covenant (as defined below) and
(ii) those required as a result of any change in any applicable law
or regulation adopted after the date hereof. In the event that any
such change in law is adopted prior to the Closing Date, the parties
shall negotiate in good faith the net effect, if any, of such change
in law on the economic benefit to be derived by Seller from the
transactions contemplated herein. If such net effect is, in the
reasonable opinion of Seller, adverse to Seller, Seller may
terminate this Agreement pursuant to Section 14(a)(iv); provided,
however, that Seller shall not have this termination right if Buyers
agree to fully indemnify Seller to the extent of such adverse
effect. Seller shall not have any termination right as a result of
any change in law adopted after the Closing Date.
2. Closing; Purchase Price Adjustment.
(a) Closing. The closing (the "Closing") of the purchase
and sale of the Holsum Assets and the Shares shall be held
simultaneously at the offices of McConnell Vald,s (in the case of
the Holsum Assets) and at the principal offices of Seaboard
Corporation in Shawnee Mission, Kansas (in the case of the Shares),
at 10:00 a.m. on November 30, 1998, or if the conditions to Closing
set forth in Section 3 of this Agreement shall not have been
satisfied by such date, as soon as practicable after such conditions
shall have been satisfied or, if permitted, waived. The parties
agree that title to the Shares shall pass to Buyer in Shawnee
Mission, Kansas, and agree that this agreement was negotiated and
signed by Seller outside Puerto Rico. The date on which the Closing
shall occur is hereinafter referred to as the "Closing Date." At
the Closing, Buyers shall deliver to Seller
(i) immediately available funds in an amount equal to $66,500,000,
by wire transfer to one or more bank accounts designated in writing
by Seller, (ii) a subordinated promissory note substantially in the
form of Exhibit A in a principal amount equal to $8,000,000, duly
executed by HDPR and CB (the "Note"), subordinate only to Buyers'
acquisition financing (including senior and subordinated debt not
exceeding $80,000,000), (iii) an assumption agreement or agreements
in form and substance reasonably satisfactory to Seller, duly
executed by Buyers (the "Assumption Agreement"), (iv) a guaranty
agreement substantially in the form of Exhibit B duly executed by
Mr. Ramon Calderon (the "Guaranty"), and secured by a lien on all
the issued and outstanding Capital Stock of CB and Seaboard
Bakeries, subordinate only to Buyers' acquisition financing
(including senior and subordinated debt not exceeding $80,000,000);
(v) mortgage (in the amount of $9,000,000) and security agreements
in form and substance reasonably satisfactory to Seller on the
Assets and the Shares, subordinate only to Buyers' acquisition
financing (including senior and subordinated debt not exceeding
$80,000,000) securing the Note, Mr. Ramon Calderon's obligations
under the Guaranty and all obligations owing under this Agreement,
the agreement relating to the acquisition of the assets of Harinas
de Puerto Rico, Inc. or under any other documents or instruments
delivered in connection therewith, (vi) if a mortgagee title policy
is required by the banks providing the acquisition financing, a
mortgage title insurance policy to Seller with respect to the
mortgage describe above and (vii) the other documents described in
Section 3(b). Concurrently, Seller shall deliver or cause to be
delivered to Buyers (w) duly executed real property deeds and bills
of sale in form and substance reasonably satisfactory to Buyers, (x)
such other instruments of sale, assignment, transfer or conveyance,
in form and substance reasonably satisfactory to Buyers and their
counsel, as are necessary to convey to Buyers good, and in the case
of real property, recordable, title to the Assets (provided that
title to the Seaboard Bakeries Assets, other than the Seaboard
Bakeries Trademarks, shall be transferred to CB by transfer of the
Shares), (y) to CB, in Shawnee Mission, Kansas, certificates
representing the Shares, duly endorsed in blank or accompanied by
stock powers duly endorsed in blank in proper form for transfer,
with appropriate transfer stamps, if any, affixed, and (z) the other
documents described in Section 3(a).
(b) Purchase Price Adjustment. (i) On the Closing Date,
Seller shall prepare and deliver to Buyers a statement setting forth
the balance of cash and cash equivalents (including short term and
long term investments) held by or for the account of each of Holsum
Bakers and Seaboard Bakeries on the Closing Date (the "Cash
Balance").
(ii) At the Closing, Seaboard Bakeries
may, if determined by Seller, pay a dividend to Seller in an amount
equal
to the lesser of (A) its Cash Balance, and (B) $30,488,851 (the
"Seaboard Bakeries Dividend"). To the extent that the sum of the
Seaboard Bakeries Dividend and the Holsum Bakers Cash Balance is
less than $30,488,851, the Purchase Price payable in immediately
available funds shall be increased by the amount by which such sum
is less than $30,488,851. Seller shall have the right to determine
not to pay the Seaboard Bakeries Dividend or to pay such dividend in
an amount that is less than the amount set forth above (but not in
excess of $30,488,851), in which event, Seaboard Bakeries shall lend
to CB at the time of the Closing the difference between the amount
that it could have paid as the Seaboard Bakeries Dividend and the
amount actually paid.
(iii) The Purchase Price shall also be
increased by an amount equal to the interest from November 1, 1998,
until
such date as Buyers and Seller consummate the Closing, (A) at the
rate of 6% per annum, with respect to $30,488,851, and (B) at the
rate payable by Buyers under their senior acquisition debt, with
respect to $74,500,000. Interest shall be computed on the basis of
a 360-day year and the actual number of days elapsed, provided that
if Buyers' acquisition financing provides for the calculation of
interest on the basis of twelve 30-day months, interest shall be
calculated on that basis.
3. Conditions to Closing.
(a) Buyer's Obligation. The obligation of Buyers to
purchase the Assets and the Shares is subject to the satisfaction
(or waiver by Buyers) as of the Closing of the following
conditions:
(i) The representations and warranties of
Seller made in this Agreement shall be true and correct in all
material respects as of the date hereof and on and as of the Closing, as
though made on and as of the Closing Date, and Seller shall have performed
or complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by Seller by the
time of the Closing; and Seller shall have delivered to Buyers a certificate
dated the Closing Date and signed by an authorized officer of Seller
confirming the foregoing.
(ii) Buyers shall have received an opinion or
opinions dated the Closing Date of Fiddler Gonz lez & Rodriguez,
LLP, Sullivan & Worcester LLP or David Becker, Esq., in form and
substance reasonably satisfactory to Buyers.
(iii) The waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the "HSR Act") shall have expired or
been terminated.
(iv) Seller shall have delivered to the
relevant Buyer the following documents, certified by the Secretary
or any Assistant Secretary of Seller, as appropriate:
(A) the charter, by-laws and corporate
books of Seaboard Bakeries;
(B) the resolution or resolutions of the
board of directors of Seller authorizing the transactions
contemplated hereby;
(C) a document evidencing the authority
and incumbency of the persons executing documents on
behalf of Seller relating to the transactions
contemplated hereby;
(D) deeds of purchase and sale in form
and substance reasonably satisfactory to Buyers conveying
good and recordable title to the Real Property, free and
clear of all liens other than those set forth on the title
studies or title insurance policies set forth as Schedule
3(a)(iv)(D), easements and restrictions of record which do
not unreasonably interfere with the use of the premises as
presently used, and those created by officers and
employees of Seller or Seaboard Bakeries under the direct
or indirect supervision of Mr. Ramon Calderon
(collectively, "Permitted Encumbrances");
(E) such bills of sale, assignments, and
other instruments of transfer and conveyance as may be
necessary to evidence and effect the sale, assignment,
transfer, conveyance and delivery to Buyers of good title
to the Assets and the Shares, free and clear of all liens
other than Permitted Encumbrances, but which shall contain
no additional warranties (provided that title to the
Seaboard Bakeries Assets that are owned directly by
Seaboard Bakeries shall be transferred to CB by transfer
of the Shares).
(v) Buyers shall have received the financing
necessary to consummate the transactions contemplated hereby.
(vi) There shall not have occurred any material
adverse change in the Business caused by fire, explosion, acts of
God or of the public enemy, natural disasters or events of similar
nature occurring after the date hereof.
(vii) All the conditions to the obligations of
HDPR Acquisitions Corp. to consummate the closing contemplated by
the agreement relating to the acquisition of the assets of Harinas
de Puerto Rico, Inc. (the "Harinas Acquisition") shall have been
satisfied or waived by HDPR Acquisitions Corp. and such closing
shall be consummated simultaneously with the Closing hereunder.
(b) Seller's Obligation. The obligation of Seller to
sell and deliver the Assets and the Shares to Buyers is subject to
the satisfaction (or waiver by Seller) as of the Closing of the
following conditions:
(i) The representations and warranties of
Buyers made in this Agreement shall be true and correct in all
material respects as of the date hereof and on and as of the Closing Date as
though made on and as of the Closing Date, and each Buyer shall have performed
or complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by such Buyer by
the time of the Closing; and each Buyer shall have delivered to Seller a
certificate dated the Closing Date and signed by an authorized officer of such
Buyer confirming the foregoing.
(ii) Seller shall have received an opinion
dated the Closing Date of McConnell Vald,s, counsel to Buyers, in
form and substance reasonably satisfactory to Seller.
(iii) The waiting period under the HSR Act shall
have expired or been terminated.
(iv) Each Buyer shall have delivered to Seller
the following documents, certified by the Secretary or any
Assistant Secretary of such Buyer, as appropriate:
(A) copies of the certificate of
incorporation and by-laws of such Buyer and of the
resolution or resolutions of such Buyer authorizing the
transactions contemplated hereby;
(B) a document evidencing the authority
and incumbency of the persons executing documents on
behalf of such Buyer relating to the transactions
contemplated hereby;
(C) the Note;
(D) the Assumption Agreement; and
(E) the documents referred to in Section
2(a)(iv), (v) and (vi).
(v) Seller shall have received a favorable
ruling in relation with its ruling request to the Puerto Rico
Treasury Department dated October 7, 1998.
(vi) All the conditions to the obligations of
Harinas de Puerto Rico, Inc. to consummate the closing contemplated
by the agreement relating to the acquisition of the assets of
Harinas de Puerto Rico, Inc. shall have been satisfied or waived by
Harinas de Puerto Rico, Inc. and such closing shall be consummated
simultaneously with the Closing hereunder.
4. Representations and Warranties of Seller.
Seller hereby represents and warrants to Buyer as
follows:
(a) Authority. Seller and Seaboard Bakeries are duly
organized, validly existing and in good standing under the laws of
the state of Delaware, and are authorized to do business in the
Commonwealth of Puerto Rico. Seller has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All corporate acts and other
proceedings required to be taken by Seller to authorize the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and properly taken. This Agreement has been duly executed and
delivered by Seller and constitutes a valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance and similar laws relating to the
protection of debtors and by principles of equity. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms
hereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or
give right to a right of termination, cancellation or acceleration
of any material obligation or to loss of a material benefit under,
or result in the creation of any lien, claim, encumbrance, security
interest, option, charge or restriction of any kind upon any of the
properties or assets of Seller or Seaboard Bakeries under, any
provision of (i) the corporation law of the State of Delaware, (ii)
the Certificate of Incorporation or By-laws of Seller or Seaboard
Bakeries, (iii) except as disclosed on the Schedules hereto, any
material note, bond, mortgage, indenture, deed of trust, license,
lease, contract, commitment, agreement or arrangement to which
Seller or Seaboard Bakeries is a party or by which any of their
respective properties or assets are bound which was entered into
without the knowledge of Mr. Ramon Calderon by officers or employees
of Seller or Seaboard Bakeries not under the direct or indirect
supervision of Mr. Ramon Calderon, or (iv) any judgment, order or
decree, or statute, law, ordinance, rule or regulation applicable to
Seller or Seaboard Bakeries or the property or assets of Seller or
Seaboard Bakeries and not to Buyer or the property or assets of
Buyer, other than any such conflicts, violations, defaults, rights
or liens, claims, encumbrances, security interests, options, charges
or restrictions that individually or in the aggregate would not have
a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations the Business. No
consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign, or any other person, is
required to be obtained or made by or with respect to Seller or
Seaboard Bakeries or their respective affiliates in connection with
the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby, other than (A) those set forth
on Schedule 4(a),
(B) compliance with and filings under the HSR Act, if applicable,
and (C) those that may be required solely by reason of Buyers' and
their lenders (as opposed to any other third party's) participation
in the transactions contemplated hereby.
(b) Title to the Assets and the Shares. Seller has good
and valid title to the Assets and the Shares, directly or through
Seaboard Bakeries, free and clear of any liens or encumbrances other
than Permitted Encumbrances. Upon delivery to CB at the Closing in
Shawnee Mission, Kansas, of certificates representing the Shares,
duly endorsed by Seller for transfer to CB, and upon delivery to
HDPR and CB of the documents described in
Section 3(a)(iv)(D) and (E), good and, in the case of real
properties, recordable, title to the Assets and the Shares will pass
to Buyers, free and clear of any liens or encumbrances other than
Permitted Encumbrances.
(c) Capital Stock of Seaboard Bakeries. The authorized
capital stock of Seaboard Bakeries consists of 1,000 shares of
common stock, no par value, of which 100 shares, constituting the
Shares, are duly authorized and validly issued and outstanding,
fully paid and nonassessable. Seller is the registered and bene
ficial holder of the Shares. The Shares have not been issued in
violation of, and none of the Shares is subject to, any preemptive
or similar rights. Except as set forth above, there are no shares
of capital stock or other equity securities of Seaboard Bakeries
outstanding. There are no outstanding warrants, options, agree
ments, convertible or exchangeable securities or other commitments
(other than this Agreement) pursuant to which Seller is or may
become obligated to issue, sell, purchase, return or redeem any
shares of capital stock or other securities of Seaboard Bakeries,
and there are not any equity securities of Seaboard Bakeries
reserved for issuance for any purpose.
5. Covenants of Seller. Seller covenants and agrees as
follows:
(a) Ordinary Conduct of Business by Seller. Except for
actions taken by Mr. Ramon Calderon and officers or employees of
Seller or Seaboard Bakeries under the direct or indirect supervision
of Mr. Ramon Calderon, and except as permitted by the terms of this
Agreement, from the date hereof to the Closing Date, Seller will
conduct the Business in the ordinary course in substantially the
same manner as presently conducted. Except for actions taken by Mr.
Ramon Calderon and officers or employees of Seller or Seaboard
Bakeries under the direct or indirect supervision of Mr. Ramon
Calderon, and except as set forth on Schedule 5(a) or otherwise
expressly permitted by the terms of this Agreement, from the date
hereof to the Closing Date, Seller, will not, and will not permit
Seaboard Bakeries to, do any of the following without the prior
written consent of Buyers, which consent shall not be unreasonably
withheld or delayed:
(i) amend Seaboard Bakeries' Certificate of
Incorporation or By-laws;
(ii) issue any capital stock of Seaboard
Bakeries or any option, warrant or right relating thereto or any securities
convertible into or exchangeable for any shares of such
capital stock;
(iii) adopt or amend in any material respect any
employee benefit plan or collective bargaining agreement in any way
affecting the employees of the Business;
(iv) approve any compensation or other benefit
increases to employees of the Business;
(v) incur or assume any liabilities, obliga
tions or indebtedness for borrowed money or guarantee any such
liabilities, obligations or indebtedness, other than in the ordinary course of
business consistent with past practice; provided that in no event shall the
Seller or Seaboard Bakeries incur,
assume or guarantee any long-term indebtedness for borrowed money
relating to the Business;
(vi) permit, allow or suffer any of the Assets
or Shares to be subjected to any encumbrance other than Permitted
Encumbrances;
(vii) cancel any material indebtedness
(individually or in the aggregate) or waive any claims or rights of
substantial value;
(viii) make or incur any capital expenditure or
expenditures which, individually, is in excess of $10,000;
(ix) make any material change in the conduct or
character of the Business;
(x) make any sale, assignment, transfer or
other conveyance of any of the Assets, except in the ordinary
course of business;
(xi) acquire or agree to acquire any assets
that will form part of the Assets other than in the ordinary course
of business;
(xii) enter into any material transactions other
than in the ordinary course of business;
(xiii) take any action that would cause or permit
the representations and warranties made herein to be inaccurate at
the Closing Date; or
(xiv) agree, whether in writing or otherwise, to
do any of the foregoing.
None of the actions described above may be taken by Mr. Ramon
Calderon or any person under his direct or indirect supervision
without the express approval of Mr. Robert Steer.
(b) Access. Prior to the Closing, Seller will give each
Buyer and its financing sources, and their respective
representatives, employees, counsel and accountants, access, during
normal business hours and upon reasonable notice, to the personnel,
properties, books and records of Holsum Bakers and Seaboard
Bakeries. Seller will arrange for its directors, officers,
employees and independent public accountants and legal counsel to
cooperate with such examination. Each Buyer and its representatives
shall execute such confidentiality agreements as Seller shall
reasonably require.
(c) Insurance. Seller shall keep, or cause to be kept,
all insurance policies relating to the Business, or suitable
replacements therefor, in full force and effect through the close of
business on the Closing Date.
(d) Resignations. On the Closing Date, Seller shall
cause to be delivered to Buyer duly signed resignations, effective
immediately after the Closing Date, of all directors of Seaboard
Bakeries and shall take such other action as is necessary to
accomplish the foregoing.
(e) Insured Claims. (i) Notwithstanding anything to the
contrary set forth herein, Seller will assume full responsibility as
of the Closing Date for all claims relating to events occurring
before Closing which are covered by the insurance policies set forth
on Schedule 5(e) (such claims being herein called "Insured
Claims," and such policies being herein called "Section 5(e)
Policies").
(ii) Buyers shall bear, or shall reimburse Seller
for, such portion of the amounts payable by Seller following the
Closing under the Section 5(e) Policies and any similar prior
policies as are attributable to liabilities which would be Assumed
Liabilities but for this Section, such amount to be determined by
agreement of Buyers and Seller, including retroactive or
retrospective premium adjustments relating thereto.
(iii) With respect to all Insured Claims, Buyers
shall cooperate in all reasonable respects with Seller (and its
affiliates) in the defense thereof. Such cooperation shall include
the retention and (upon Seller's request) the provision to Seller of
records and information which are reasonably relevant to such
Insured Claims, and making employees available on a mutually
convenient basis to testify and provide additional information and
explanation of any materials provided.
(iv) Any disputes with respect to the coverage of any
claim which would constitute an Assumed Liability but for this
Section under any Section 5(e) Policy shall be prosecuted entirely
at Buyers' expense.
(f) Other Transactions. Prior to the Closing, none of
Seller, nor any affiliate of Seller shall, nor shall they permit any
of their respective officers, directors, stockholders or other
representatives to, directly or indirectly, encourage, solicit or
initiate discussions or negotiations with, any corporation,
partnership, person, or other entity or group (other than Buyers and
their representatives) concerning any merger, sale of securities,
sale of assets or similar transaction involving the Business.
(g) Non-Competition. (i) Seller, on its behalf and on
behalf of its affiliates and subsidiaries, agrees that, for a period
of ten (10) years after the Closing Date, Seller and its affiliates
shall not, directly or indirectly, engage in (1) the production,
marketing or sale of bakery products, or (2) the manufacture,
marketing or sale of flour, in each case in Puerto Rico or with
respect to customers in Puerto Rico (the "Restricted Business"), or
acquire any equity securities of, or make any loan to, or enter into
any joint venture or similar agreement with, any person engaged in
the Restricted Business in Puerto Rico or with respect to customers
in Puerto Rico; provided, however, that this clause (i)(2) shall not
prohibit (A) any minority investment in any entity that is not
engaged in the Restricted Business as a material line of business,
(B) any joint venture for which the Restricted Business is not a
material line of business or (C) any investment representing less
than 5% of the ownership in a publicly traded company in the
management of which Seller does not participate. This covenant (the
"Restrictive Covenant") shall cease to have any effect with respect
to the business described in clause (i)(2) above if Mr. Ramon
Calderon, or his lineal descendants, persons who are members of the
management of the Business on the Closing Date, or any person or
entity acquiring an interest in the Business as a result of a
foreclosure or work-out of the acquisition financing shall at any
time cease to own, directly or indirectly, a controlling interest in
the "Business" (as defined in the Asset Purchase Agreement relating
to the acquisition of Harinas de Puerto Rico, Inc.).
(ii) The parties agree that if any
court of competent jurisdiction determines that the Restrictive
Covenant or
any part thereof is invalid or unenforceable, the remainder of the
Restrictive Covenant shall not thereby be affected and shall be given full
effect, without regard to the invalid portions. Furthermore, if any portion of
the Restrictive Covenant, or the application of any portion of the Restrictive
Covenant to any person or circumstances, shall be held invalid or
unenforceable by any court of competent jurisdiction, the remaining portion of
the Restrictive Covenant, or the application of such portion of the
Restrictive Covenant to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby. In either
of the foregoing cases, the parties agree that they will amend the terms of
the Restrictive Covenant or portion thereof so determined to be invalid or
unenforceable, but only in the most minimal manner necessary to make such
terms comply with the determination of such court.
(iii) If Seller breaches, or threatens to commit
a breach of, the Restrictive Covenant, Buyers shall have the right
to have the Restrictive Covenant specifically enforced by any court
of competent jurisdiction, it being acknowledged and agreed that any
such breach or threatened breach will cause irreparable injury to
Buyers and that money damages will not provide an adequate remedy to
Buyers. Such right of specific performance shall be independent of,
and in addition to, and not in lieu of, any other rights and
remedies available to Buyer at law or in equity.
(h) Supplemental Disclosure. Seller shall have the
continuing obligation until the Closing promptly to supplement or
amend the Schedules hereto with respect to any matter hereafter
arising or discovered which, if existing or known at the date of
this Agreement, would have been required to be set forth or
described in such Schedules; provided, however, that for the purpose
of the rights and obligations of the parties hereunder, any such
supplemental or amended disclosure shall not be deemed to have been
disclosed as of the date of this Agreement unless so agreed in
writing by Buyer.
(i) Tax Ruling. Seller shall use its best efforts to
obtain the ruling referred to in Section 3(b)(v).
6. Representations and Warranties of Buyers.
(a) Each Buyer hereby jointly and severally represents
and warrants to Seller that it is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Puerto Rico. Each Buyer has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All corporate acts and other
proceedings required to be taken by each Buyer to authorize the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and properly taken. This Agreement has been duly executed and
delivered by each Buyer and constitutes a valid and binding
obligation of each Buyer, enforceable against each Buyer in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance and similar
laws relating to the protection of debtors and by principles of
equity. The execution and delivery of this Agreement by each Buyer
does not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, conflict with,
or result in any violation of or default (with or without notice or
lapse of time, or both) under, or give right to
a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or result in the
creation of any lien, claim, encumbrance, security interest, option,
charge or restriction of any kind upon any of its properties or
assets under, any provision of (i) the corporation
law of the Commonwealth of Puerto Rico, (ii) its Certificate of
Incorporation or By-laws, (iii) except as disclosed on the Schedules
hereto, any material note, bond, mortgage, indenture, deed of trust,
license, lease, contract, commitment, agreement or arrangement to
which it is a party or by which any of its properties or assets are
bound, or (iv) any judgment, order or decree, or statute, law,
ordinance, rule or regulation applicable to it or its property or
assets and not to Seller or the property or assets of Seller, other
than any such conflicts, violations, defaults, rights or liens,
claims, encumbrances, security interests, options, charges or
restrictions that individually or in the aggregate would not have a
material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Business.
No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign, is required to be obtained or
made by or with respect to Buyers or their respective affiliates in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, other than (A)
those described on Schedule 6, (B) compliance with and filings under
the HSR Act, if applicable, and (C) those that may be required
solely by reason of Seller's (as opposed to any other third party's)
participation in the transactions contemplated hereby.
7. Mutual Covenants.
(a) Consents. Buyers and Seller shall use their
reasonable best efforts to obtain, prior to the Closing, any
consents of third parties and any authorizations or permits from any
governmental authority required in connection with the consummation
of the transactions contemplated herein; provided, however, that (i)
Buyers shall be solely responsible for obtaining any consent
required in connection with the assignment of particular contracts,
licenses, authorizations or permits that require the consent of a
counterparty or government entity as a condition to such assignment
(including the consent of the Puerto Rico government under Seaboard
Bakeries' grant of tax exemption), as well as for obtaining new
governmental permits and authorizations to replace permits and
authorizations that are not assignable, and (ii) the obtaining of
any consent or new governmental permit or authorization referred to
in clause (i) shall not be a condition to Buyers obligations to
consummate the Closing.
(b) Cooperation. Each Buyer and Seller shall cooperate
with each other and shall cause their officers, employees, agents,
auditors and representatives to cooperate with each other after the
Closing to ensure the orderly transition of the Assets from Seller
to Buyers and to minimize any disruption to the respective
businesses of Seller or Buyers that might result from the
transactions contemplated hereby. Each party shall reimburse the
other for reasonable out-of-pocket costs and expenses incurred in
connection with actions taken at the request of the other party
pursuant to this Section 7(b), provided that the party seeking such
reimbursement shall have notified the other prior to incurring any
such expense that it intends to seek reimbursement for such expense.
(c) Publicity. Seller and Buyers agree that, from the
date hereof through the Closing Date, no public release or
announcement, and no disclosure to any third party, concerning the
transactions contemplated hereby shall be made by either party
without the prior consent of the other party, except as such release
or announcement may be required by law or by the
regulations of the American Stock Exchange, in which case the party
required to make the release or announcement shall allow the other
party reasonable time to comment on such release or announcement in
advance of such issuance to the extent possible. Buyers acknowledge
Seller s Press Release of October 20, 1998.
(d) Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable
best efforts to cause the Closing to occur as soon as possible.
(e) Records. On the Closing Date, Seller shall deliver
or cause to be delivered to the relevant Buyer all original agree
ments, documents, books, records and files (collectively,
"Records"), in the possession of Seller relating to the Business,
except that Seller may retain all Records prepared in connection
with the sale of the Assets and the Shares. Seller shall have
access to and be authorized to make copies of any Records delivered
to the Buyers. Each Buyer shall keep all Records for six years
after the Closing Date or until the expiration of the applicable
statute of limitations for third party claims, if longer.
(f) Seller Trade Payables. Buyers shall repay in full,
within five days after the Closing Date, all trade payables and all
intercompany payables due by Holsum Bakers or Seaboard Bakeries to
Seller or any affiliate of Seller. On the Closing Date, such trade
and intercompany payables shall be secured by the same collateral
securing the Note. Non-payment of these payables shall be deemed
a default under the Note.
(g) Confidentiality. Each party shall take reasonable
appropriate actions to keep confidential, and cause its affiliates
and instruct its and their officers, directors, employees and
advisors to keep confidential, all nonpublic information relating to
the Business, Seller, Seaboard Bakeries and Buyers, except as
required by law or administrative process or the rules of the
American Stock Exchange and except for information which becomes
public other than as a result of a breach of this Section 7(g), and
provided that this covenant shall not restrict the ability of any
person's and its affiliates' respective officers, directors,
advisors and employees to discuss such information internally.
(h) Cooperation with Respect to Litigation. Buyers shall
cooperate with Seller in all respects, at Seller's expense, in the
defense of all claims which constitute Retained Liabilities.
(i) Liquidation of Seaboard Bakeries. Buyers jointly and
severally agree that Seaboard Bakeries will be liquidated into CB,
and its legal existence dissolved, within 30 days after the Closing
Date.
8. Employee Matters.
(a) HDPR shall offer employment, effective as of the
Closing Date, on the same terms and conditions as provided by Seller
as of the Closing Date, including compensation level and benefits,
to each person employed by Seller in the Holsum Business in Puerto
Rico on the Closing Date. Notwithstanding the above, Buyers intend
to change the existing defined benefit plan of Seller and Seaboard
Bakeries to a defined contribution plan, it being understand that
Buyers shall be responsible for any liability or claim resulting
from such action.
(b) The parties shall take all actions required on
their part to cause Buyers to substitute the sponsors of the Plan
effective as of the Closing Date.
9. Further Assurances.
From time to time, as and when requested by either party
hereto, the other party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other actions, as
such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by, or give effect to the
agreements set forth in, this Agreement.
10. Indemnification.
(a) Indemnification by Seller. Seller shall indemnify
each Buyer and its officers, directors, employees and agents and
hold them harmless from any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) suffered or
incurred by any such indemnified party (other than any relating to
income taxes, for which indemnification provisions are set forth in
Section 11) to the extent arising from (i) any breach of any
representation or warranty of Seller contained in this Agreement,
(ii) any breach of any covenant of Seller contained in this
Agreement requiring performance after the Closing Date, (iii) the
Retained Liabilities and (iv) Insured Claims, but only to the extent
actually covered by the Section 5(e) Policies; provided, however,
that Seller shall not have any liability under clause (i) above
unless the aggregate of all losses, liabilities, costs and expenses
relating thereto for which Seller would, but for this provision, be
liable exceeds on a cumulative basis an amount equal to $350,000,
and then only to the extent of any such excess up to
a maximum aggregate amount equal to $1,500,000; and provided
further, however, that Seller shall not have any liability hereunder
for any breach of a representation or warranty of Seller contained
in this Agreement if Mr. Ramon Calderon or any officer of Seller or
Seaboard Bakeries directly or indirectly supervised by him had
actual or constructive knowledge of such breach on the Closing Date.
(b) Indemnification by Buyer. Each Buyer shall jointly
and severally indemnify Seller, its affiliates and each of its
officers, directors, employees and agents against and hold them
harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) suffered or incurred
by any such indemnified party (other than any relating to income
taxes, for which indemnification provisions are set forth in Section
11) to the extent arising from (i) any breach of any representation
or warranty of any Buyer contained in this Agreement, (ii) any
breach of any covenant of any Buyer contained in this Agreement
requiring performance after the Closing Date, and (iii) the Assumed
Liabilities.
(c) Losses Net of Insurance. The amount of any loss,
liability, claim, damage or expense for which indemnification is
provided under this Section 10 shall be net of any amounts recovered
or recoverable by the indemnified party under insurance policies
with respect to such loss, liability, claim, damage or expense and
net of any tax benefit derived by the indemnified party from such
loss, liability, claim, damage or expense.
(d) Termination of Indemnification. The obligations to
indemnify and hold harmless a party hereto, (i) pursuant to Sections
10(a)(i) and 10(b)(i), shall terminate when the applicable
representation or warranty terminates pursuant to Section 15,
(ii) pursuant to Sections 10(a)(ii) and 10(b)(ii), shall terminate
when the applicable covenant terminates in accordance with its
terms, and (iii) pursuant to Sections 10(a)(iii), 10(a)(iv) and
10(b)(iii), shall not terminate; provided, however, that as to
clause (i) above such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the person
to be indemnified or the related party hereto shall have, before the
expiration of the applicable period, previously made a claim by
delivering a notice (stating in reasonable detail the basis of such
claim) to the indemnifying party.
(e) Procedures Relating to Indemnification. In order for
a party (the "indemnified party") to be entitled to any
indemnification provided for under this Agreement, arising out of or
involving a claim or demand made by any person, firm, governmental
authority or corporation against the indemnified party (a "Third
Party Claim"), such indemnified party must notify the indemnifying
party in writing, and in reasonable detail, of the Third Party Claim
within 30 days after receipt by such indemnified party of written
notice of the Third Party Claim; provided, however, that failure to
give such notification shall not affect the indemnification provided
hereunder except to the extent the indemnifying party shall have
been actually prejudiced as a result of such failure (except that
the indemnifying party shall not be liable for any expenses incurred
during the period following the end of such 30-day period referred
to above in which the indemnified party failed to give such notice
and the date on which such notice is given). Thereafter, the
indemnified party shall deliver to the indemnifying party, within
ten (10) business days after the indemnified party's receipt
thereof, copies of all notices and documents (including court
papers) received by the indemnified party relating to the Third
Party Claim.
If a Third Party Claim is made against an indemnified
party, the indemnifying party will be entitled to participate in the
defense thereof and, if it so chooses, to assume the defense thereof
(unless the indemnifying party is also a party to such Third Party
Claim and the indemnified party determines in good faith that joint
representation would be inappropriate due to a potential conflict of
interest) with counsel selected by the indemnifying party and
reasonably satisfactory to the indemnified party. Should the
indemnifying party be entitled under the preceding sentence to
assume the defense of a Third Party Claim and so elect to assume
such defense, the indemnifying party will not be liable to the
indemnified party for legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof. If the
indemnifying party assumes such defense, the indemnified party shall
have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by
the indemnifying party, it being understood that the indemnifying
party shall control such defense (except in the circumstances set
forth in the parenthetical to the first sentence of this paragraph).
The indemnifying party shall be liable for the fees and expenses of
counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the defense thereof
(other than during any period following the 30-day period referred
to in the first sentence of this Section 10(e) in which the
indemnified party shall have failed to give notice of the Third
Party Claim as provided above). If the indemnifying party chooses
to defend or prosecute any Third Party Claim, all of the parties
hereto shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying
party's request) the provision to the indemnifying party of records
and information which are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient basis
to provide additional information and explanation of any material
provided hereunder. Whether or not the indemnifying party shall
have assumed the defense of a Third Party Claim, the indemnified
party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which consent shall not
be unreasonably withheld or delayed).
(f) This Section 10 shall not apply to indemnification
for taxes, which shall be governed by Section 11.
11. Tax Matters.
(a) Income Tax Matters Relating to Seaboard Bakeries
(i) Income Tax Liability. Buyers
shall be responsible and shall indemnify Seller for any federal and
Puerto
Rico income tax liabilities (net of any foreign tax credit) of
Seaboard Bakeries relating to the period from August 2, 1998 to the
Closing Date, provided that Buyers shall not be responsible for any
additional federal income tax incurred during such period which is
attributable to: (i) Seaboard Bakeries' revocation of its election
under Section 936 of the United States Internal Revenue Code (the
"Section 936 revocation"), or (ii) its election under
Section 338(h)(10) of the United States Internal Revenue Code (the
"Section 338(h)(10) election"). Buyers shall agree, at the request
of Seller, to the Section 338(h)(10) election and the Section 936
revocation. Seller shall be responsible and shall indemnify Buyers
for any federal and Puerto Rico income tax liabilities of Seaboard
Bakeries for any period prior to August 2, 1998 (net of any
estimated payments or overpayments refundable to Seller), and for
any federal income tax attributable to: (i) the Section 936
revocation, or (ii) its Section 338(h)(10) election. The income
taxes for the period that includes August 2, 1998 shall be allocated
among the parties based on Seaboard Bakeries' monthly financial
statements as of, and for the year to date period ended on, August
1, 1998, provided that reconciling items between book net income and
net taxable income shall be attributed to the period to which they
are directly allocable and those items not attributable to any
period shall be apportioned based on the net taxable income before
such reconciling items. The marginal income tax rate for both
periods (on and before August 1 and on and after August 2, 1998)
shall be the same.
(ii) United States Income Tax
Liability and Filings. The taxable period of Seaboard Bakeries
that includes the Closing Date shall be reported to the United
States by the Seller. Seller will timely prepare and file with the
appropriate
authorities (after approval by Buyer, which approval shall not be
unreasonably withheld or delayed) all United States income tax
returns, reports and forms required to be filed and will pay all
income taxes due with respect to such returns, reports and forms.
Buyer shall, within thirty (30) days of the later of the filing of
such return or notification by Seller of the amounts owed, pay to
Seller any amounts that are owed in accordance with the allocation
methodology set forth above. Conversely, if amounts are owed to
Buyer, they shall be paid within thirty (30) days of the filing of
such return. For tax periods commencing after the Closing Date,
Buyer shall be responsible for preparing and filing all returns,
reports and forms and for any liability associated with those
filings.
(iii) Puerto Rico Income Tax Liability
and Filings. The taxable period of Seaboard Bakeries that includes
the Closing
Date shall be reported to the Puerto Rico tax authorities by the
Buyer. Buyer will timely prepare and file with the appropriate
authorities (after approval by Seller, which approval shall not be
unreasonably withheld or delayed) all Puerto Rico income tax
returns, reports and forms required to be filed and will pay all
income taxes due with respect to such returns, reports and forms.
Seller shall, within thirty (30) days of the later of the filing of such
return or notification by Buyer of the amounts owed, pay to Seller any
amounts owed in accordance with the allocation methodology set forth
above. Conversely, if amounts are owed to Seller, they shall be paid
within thirty (30) days of the filing of such return.
(iv) Tax Audits and Amended Returns. Any
liability or refund resulting from a tax audit, revenue agent
review or similar proceeding of either taxing jurisdiction shall be
borne or shared by Seller and Buyer in accordance with the
allocation methodology set forth above and paid over to the
appropriate party within thirty (30) days of the finalization of
such proceeding. Seller shall give notice to Buyer of any United
States audits and allow Buyer to participate in the process. Seller
shall not agree to any audit adjustments which would increase Buyer
s income or other tax liability without Buyer s consent, which
consent shall not be unreasonably withheld or delayed. Buyer shall
give notice to Seller of any Puerto Rico audits and allow Seller to
participate in the process. Buyer shall not agree to any audit
adjustments which would increase Seller s income or other tax
liability without Seller s consent, which consent shall not be
unreasonably withheld or delayed. Buyer shall, if Seller so
requests and at Seller s expense, file for and obtain any refunds or
credits to which Seller is entitled under this Section. Buyer shall
permit Seller to control the prosecution of any such refund claim
and, where deemed appropriate by Seller, authorize by appropriate
powers of attorney such persons as Seller shall designate to
represent the Seller or Seaboard Bakeries with respect to such
refund claim. Buyer shall forward to Seller any refund within
thirty (30) days after the refund is received (or reimburse Seller
for any such credit within thirty (30) days after the credit is
allowed and applied against other income tax liability), provided,
however, that such amounts payable to Seller shall be net of any
reasonable expense incurred by Buyer attributable to the receipt of
such refund and/or the payment of such amount to Seller. Seller and
Buyer shall treat any payments under the preceding sentence that
Seller shall receive pursuant to this Section as an adjustment to
the Purchase Price.
(b) Income Tax Matters relating to Holsum Bakers
(i) Income Tax Liability. Buyer
shall be responsible and shall indemnify Seller for any Puerto Rican
income
tax liabilities of Holsum Bakers related to the period from
August 2, 1998 to the Closing Date (net of any estimated payments
made after August 2, 1998 or overpayments attributable to such
payments), but excluding any gains resulting from the sale of the
Holsum Assets and the Shares. Seller shall be responsible and shall
indemnify Buyers for any Puerto Rican income tax liabilities of
Holsum Bakers for any period prior to August 2, 1998 (net of any
estimated payments or overpayments attributable to such payments and
refundable to Seller) and for any tax attributable to any gains
resulting from the sale of the Holsum Assets and the Shares. The
amount of such Puerto Rican income tax liabilities for the taxable
period including the period from January 1, 1998 to the Closing Date
will be allocated among the parties as provided in
Section 11(a) above. The Buyer's income tax liability for the
period that includes August 2, 1998 shall be determined assuming a
marginal tax rate of 39%. In addition, the interest paid by Buyer
to Seller as an increase to the Purchase Price pursuant to
Section 2(b)(iii) shall be treated as interest expense to Buyer and
as interest income to Seller for purposes of calculating the income
tax liability. The apportioning of income tax liabilities as
provided above shall not have any bearing on the Seller's ability to
claim on its U.S. income tax return a foreign tax credit for the
Puerto Rican taxes paid.
(ii) Tax Returns. Seller shall be responsible
for filing the Puerto Rican income tax returns of Holsum Bakers for the
period from January 1, 1998 to the Closing Date. On the Closing Date,
Seller and Buyer shall agree on an estimated amount of income taxes to be
paid by Buyer pursuant to Section 11(b)(i), which amount shall be paid by
Buyer to Seller ten (10) business days after the later of (A) the date
notice requesting payment is given to Buyer by Seller and (B) the date when
the tax is due. Such amount shall be collateralized by the same collateral
securing the Note. If, based on the tax return to be filed, the amount of
income taxes attributable to the Buyer is more or less than the
aforementioned estimated amount, then the excess or the shortage shall be
paid to the Buyer or Seller, as the case may be, on or before thirty (30)
days after the income tax return is filed.
(iii) The aforementioned apportionment of the
Puerto Rican income tax liability shall be made irrespective of
Seller's ability to take as a credit any Puerto Rican income tax
paid.
(iv) Any adjustments to the income tax liability
based on audit shall be borne in accordance with the apportionment
set forth herein within thirty (30) days after the final audit
determination.
(c) General Tax Matters. Seller and Buyers shall
reasonably cooperate, and shall cause their respective affiliates,
officers, employees, agents, auditors and representatives reasonably
to cooperate, in preparing and filing all returns, reports and forms
relating to income taxes, including maintaining and making available
to each other all records necessary in connection with income taxes
and in resolving all disputes and audits with respect to all taxable
periods relating to income taxes. Buyers and Seller recognize that
Seller and its affiliates will need access, from time to time, after
the Closing Date, to certain accounting and tax records and
information of Holsum Bakers and Seaboard Bakeries, and therefore,
each party agrees (1) to use its best efforts to properly retain and
maintain such records until such time as the other party agrees that
such retention and maintenance is no longer necessary; and (2) to
allow the other party and its agents and representative (and agents
or representatives of any of its affiliates), at times and dates
mutually acceptable to the parties, to inspect, review and make
copies of such records as the other party may deem necessary or
appropriate from time to time, such activities to be conducted
during normal business hours and at the other party's expense.
12. Assignment.
This Agreement and the rights and obligations hereunder
shall not be assignable or transferable by any Buyer or Seller
(including by operation of law) without the prior written consent of
the other parties hereto; provided, however, that (i) any Buyer may
assign its right hereunder to a subsidiary or affiliate of such
Buyer which is controlled by Mr. Ramon Calderon without the prior
written consent of Seller and (ii) Seller may assign its rights and
obligations hereunder to any entity wholly owned by Seller; provided
further, however, that no assignment shall limit or affect the
assignor's obligations hereunder.
13. No Third-Party Beneficiaries.
This Agreement is for the sole benefit of the parties
hereto and their permitted assigns and nothing herein expressed or
implied shall give or be construed to give to any person or entity,
other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
14. Termination.
(a) Anything contained herein to the contrary notwith
standing, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(i) by mutual written consent of Seller and
Buyers;
(ii) by either party hereto, if the Closing does
not occur on or prior to December 31, 1998;
(iii) by Seller, if on or prior to December 4,
1998, Buyers shall not have executed a credit agreement providing
for sufficient financing to consummate the transactions
contemplated herein and containing terms that, to the extent affecting the
rights of Seller or the ability of Buyers to consummate the transactions
contemplated herein, shall be reasonably satisfactory to Seller; or
(iv) by Seller, as provided in Section 1(g), in
the event that Seller and Buyers shall not reach an agreement with
respect to any adverse economic effect arising from any change in
any applicable law or regulation adopted prior to the Closing Date
and requiring any tax withholding with respect to payment of the
Purchase Price;
provided, however, that the party seeking termination pursuant to
clause (ii) or (iii) is not in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.
Seller shall not be deemed to be in breach of any of its
representations, warranties, covenants or agreements contained in
this Agreement as a result of any act or any failure to take any
required action by Mr. Ramon Calderon and/or officers or employees
of Seller or Seaboard Bakeries under the direct or indirect
supervision of Mr. Ramon Calderon.
(b) In the event of termination by Seller or Buyers
pursuant to this Section 14, written notice thereof shall forthwith
be given to the other party and the transactions contemplated by
this Agreement shall be terminated, without further action by either
party. If the transactions contemplated by this Agreement are
terminated as provided herein:
(i) Buyers shall return all documents and other
material received from Seller relating to the transactions
contemplated hereby, whether so obtained before or after the
execution hereof, to Seller;
(ii) if such termination is pursuant to Sec-
tion 14(a)(ii) under such circumstances that all the conditions to
Closing set forth in Section 3(a) shall have been satisfied or would
have been satisfied but for any action taken or omitted to be taken by
Buyer or any of its affiliates, then such termination shall not result
in any liability to Seller; and
(iii) if such termination is pursuant to
Section 14(a)(ii) under such circumstances that all the conditions
to Closing set forth in Section 3(b) shall have been satisfied or
would have been satisfied but for any action taken or omitted to be
taken by Seller or any of its affiliates, then such termination
shall not result in any liability to Buyer.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 14,
this Agreement shall become void and of no further force and effect,
except for the provisions of (i) Section 16 hereof relating to
expenses, (ii) Section 7(c) hereof relating to publicity,
(iii) Section 22 hereof relating to finder's fees and broker's fees,
(iv) this Section 14 and (v) Section 7(g) relating to
confidentiality. Nothing in this Section 14 shall be deemed to
release either party from any liability for any breach by such party
of the terms and provisions of this Agreement or to impair the right
of either party to compel specific performance by the other party of
its obligations under this Agreement or to claim damages from the
other party for breach of this Agreement; provided, however, that a
termination of this Agreement based solely on the breach of a
representation, which breach is not intentional and does not involve
fraud or bad faith, shall only entitle the non-breaching party to
recover its out-of-pocket expenses incurred in connection with this
transaction, and not any consequential or other damages.
15. Survival of Representations.
The representations and warranties in this Agreement shall
survive the Closing for a period of one year commencing on the
Closing Date. The representations and warranties in the Note, the
collateral documents securing the Note and the Guaranty shall
survive until the Note is paid in full. The obligations of each
party hereto under the covenants that are required to be performed
after the Closing pursuant to this Agreement and the Assumption
Agreement and the obligations of Mr. Ramon Calderon and Buyers under
the Note, the collateral documents securing the Note and the
Guaranty shall survive until such obligations have been fully
performed.
16. Expenses.
Whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs or expenses. The relevant Buyer
shall be responsible for the payment of the expenses related to the
preparation and execution of the real property deeds necessary for
the transfer of the Real Property (except for the internal revenue
stamps to be affixed to the original of the real property deeds,
which shall be paid by Seller), and for the payment of the internal
revenue stamps required in the first certified copy of such deeds
and the internal revenue vouchers required for the recordation of
such deeds in the Registry of Property of Puerto Rico. The relevant
Buyer shall also be responsible for the expenses related to the
execution and recordation of any mortgages and security interests
provided herein. If the transactions contemplated hereby are not
consummated within the agreed period, Buyers and Ramon Calderon
shall reimburse Seller for any expenses of Buyers paid for by Seller
or Seaboard Bakeries related to the transaction within ten (10) days
after the termination of this Agreement.
17. Amendments.
No amendment to this Agreement shall be effective unless
it shall be in writing and signed by all parties hereto.
18. Notices.
All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex, cable or telecopy, or sent, postage
prepaid, by registered, certified or express mail, or reputable
overnight courier service and shall be deemed given when so
delivered by hand, telexed, cabled or telecopied, or if mailed,
three days after mailing (one business day in the case of express
mail or overnight courier service), as follows:
(a) if to any Buyer,
Mr. Ramon Calderon
Holsum Bakers of Puerto Rico
Call Box 8282
Toa Baja, P.R. 00951
Telecopier: (787) 251-2060
with copies to:
McConnell Valdes
270 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Telecopier: (787) 759-8282
Attention: Julio Pietrantoni, Esq.
(b) if to Seller,
Seaboard Corporation
9000 West 67th Street
PO Box 2972
Shawnee Mission, Kansas 66201
Telecopier: (913) 676-8978
Attention: David M. Becker, Esq.
Department of Legal Affairs
with copies to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02108
Telecopier: (617) 338-2880
Attention: Marshall L. Tutun, Esq.
and
Fiddler Gonzalez & Rodriguez, LLP
254 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Telecopier: (787) 754-7539
Attention: Rafael Cortes Dapena, Esq.
19. Interpretation.
The headings contained in this Agreement, in any Exhibit
or Schedule hereto and in the table of contents to this Agreement,
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
20. Counterparts.
This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties and delivered
to the other party.
21. Entire Agreement.
This Agreement, including the Schedules and Exhibits
hereto, contains the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and super
sedes all prior agreements and understandings relating to such
subject matter.
22. Fees.
Each party hereto hereby represents and warrants that no
brokers or finders have acted for such party in connection with this
Agreement or the transactions contemplated hereby, and agrees to
indemnify the other for any such fees.
23. Severability.
If any provision of this Agreement or the application of
any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
24. Governing Law; Consent to Jurisdiction.
This Agreement shall be governed by and construed in
accordance with the laws of New York, without regard to the
conflicts of law principles thereof, except as to matters relating
to real estate, in which case Puerto Rico law shall apply. Each
party hereto consents to the jurisdiction of the courts of New York
and of the federal courts in New York in connection with any claim
arising hereunder, and waives and expressly agrees not to raise any
claim that it is not personally subject to the jurisdiction of such
court, that the venue of the suit is improper, that this agreement
may not be litigated in such court, and expressly agrees not to
raise forum non conveniens in any such proceeding. With respect to
any action brought by any Buyer against Seller pursuant to
Section 10(a)(i) or (ii), Buyers agree to bring such action in a New
York court so long as such New York court shall have jurisdiction
(including as a result of the consent to jurisdiction contained
herein) over the parties and the subject matter of the action.
Other actions brought by any Buyer and actions brought by Seller may
also be brought in any appropriate forum. Each of the parties
agrees that service of process may be made upon it by certified or
registered mail to the address for notices set forth in this
agreement or as otherwise provided by law.
25. Waiver of Trial by Jury.
Seller and Buyers expressly waive all right to trial by
jury in any action, proceeding or counter claim related to this
Agreement. The parties acknowledge that the provisions of this
paragraph have been bargained for and that they have been
represented by counsel in connection therewith.
26. Schedules. Matters disclosed in any Schedule hereto
shall be deemed to have been disclosed in all Schedules hereto. All
Schedules shall be integral part of this Agreement.
- 52 -
27. Execution by Mr. Ramon Calderon.
Mr. Ramon Calderon is executing this agreement solely for
purposes of confirming his agreement set forth in Sections 5(a) and
16.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
SEABOARD CORPORATION HDPR ACQUISITIONS CORP.
By: /s/ Robert Steer By: /s/ Ramon Calderon
Name: Robert Steer Name: Ramon Calderon
Title: Vice President- Title: President
Chief Financial Officer
CB ACQUISITIONS CORP.
By: /s/ Ramon Calderon By: /s/ Stanley N. Woodworth
Ramon Calderon Name: Stanley N. Woodworth
Title: Attorney in Fact
The following exhibits and schedules have been excluded from
this filing, registrant agrees to furnish supplementally a
copy of any omitted schedule to the SEC upon request:
Exhibit A-Form of Promissory Note
Exhibit B-Form of Guaranty
Schedule 1(b) (i)-Real Property
Schedule 1(b) (ii)-Machinery & Equipment
Schedule 1(b) (iii)-Contracts
Schedule 1(b) (viii)-Trademarks
Schedule 1(b) (xi)-Baking Division Consolidated Balance
Sheet
Schedule 1(h) (i)-Claims, Product Liability and Accident
Complaints
Schedule 3(a) (iv) (D)-Title Studies
Schedule 4(a)-Consents to Transaction (Seller)
Schedule 5(a)-Seaboard Bakeries Ordinary Course of Business
Exceptions
Schedule 5(e)-Holsum Bakers and Harinas De Puerto Rico
insurance policies
Schedule 6-Consents to transaction (buyer)
ASSET PURCHASE AGREEMENT
by and between
HDPR ACQUISITIONS CORP.,
as Buyer,
HARINAS DE PUERTO RICO, INC.,
as Seller
and
SEABOARD CORPORATION
________________________________________
Dated as of November 9, 1998
________________________________________
TABLE OF CONTENTS
Section Page
1. Purchase and Sale of the Assets; Assumption of
Assumed Liabilities. . . . . . . . . . . . . . . . . .1
2. Closing; Purchase Price Adjustment.. . . . . . . . . .6
3. Conditions to Closing. . . . . . . . . . . . . . . . .8
4. Representations and Warranties of Seller.. . . . . . 12
5. Covenants of Seller. . . . . . . . . . . . . . . . . 27
6. Representations and Warranties of Buyer. . . . . . . 32
7. Mutual Covenants.. . . . . . . . . . . . . . . . . . 34
8. Further Assurances.. . . . . . . . . . . . . . . . . 36
9. Indemnification. . . . . . . . . . . . . . . . . . . 37
10. Assignment.. . . . . . . . . . . . . . . . . . . . . 41
11. No Third-Party Beneficiaries.. . . . . . . . . . . . 41
12. Termination. . . . . . . . . . . . . . . . . . . . . 41
13. Survival of Representations. . . . . . . . . . . . . 44
14. Expenses.. . . . . . . . . . . . . . . . . . . . . . 45
15. Amendments.. . . . . . . . . . . . . . . . . . . . . 45
16. Notices. . . . . . . . . . . . . . . . . . . . . . . 46
17. Interpretation.. . . . . . . . . . . . . . . . . . . 47
18. Counterparts.. . . . . . . . . . . . . . . . . . . . 47
19. Entire Agreement.. . . . . . . . . . . . . . . . . . 47
20. Fees.. . . . . . . . . . . . . . . . . . . . . . . . 48
21. Severability.. . . . . . . . . . . . . . . . . . . . 48
23. Governing Law. . . . . . . . . . . . . . . . . . . . 49
24. Waiver of Trial by Jury. . . . . . . . . . . . . . . 49
EXHIBITS
B
C
D
E
F
G
SCHEDULES
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement dated as of November 9, 1998, by and
between HDPR Acquisitions Corp., a Puerto Rico corporation (the
"Buyer"), Harinas de Puerto Rico, Inc. ("Harinas"), a Delaware
corporation (the "Seller") and a wholly owned subsidiary of Seaboard
Corporation, a Delaware corporation ("Seaboard"), and Seaboard.
WHEREAS, Buyer desires to purchase from Seller and Seller
desires to sell to Buyer all the Assets (as defined below), and
Buyer desires to assume all the Assumed Liabilities (as defined
below) relating to the Business (as defined below) on the terms and
subject to the conditions set forth herein; and
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable con
sideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
1. Purchase and Sale of the Assets; Assumption of Assumed
Liabilities.
(a) Purchase and Sale of the Assets; Purchase Price
Allocation. (i) On the terms and subject to the conditions of this
Agreement, (A) Seller will sell, transfer, assign, convey and
deliver to Buyer, and Buyer will purchase from Seller, the Assets
for an aggregate purchase price equal to $5,500,000 plus the
assumption of the Assumed Liabilities (the "Purchase Price"),
payable as set forth below in Section 2(a), and subject to
adjustment as provided in Section 2(b).
(ii) The allocation of the purchase price among the
Assets will be agreed to between Seller and Buyer on or prior to the
Closing Date. Buyer and Seller agree to file all income, franchise
and other tax returns, and execute such other documents or
instruments as may be required by any governmental authority in a
manner consistent with such allocations.
(b) The Assets. The term "Assets" shall mean the right,
title and interest of Seller and any affiliate of Seller in the
assets of Seller or such affiliate used or held primarily in the
conduct of its business (the "Business"), wherever located and
whether or not reflected on the books of Seller or such affiliate,
whether tangible or intangible, whether real, personal or mixed, and
whether existing on the date hereof or acquired hereafter, but
excluding prepaid or deferred tax assets and the Harinas Trademarks
described in Schedule 1(c)(iii). Without limiting the generality of
the foregoing, the Assets include, among other things, the
following:
(i) Real Property. The ground lease
and the buildings described on Schedule 1(b)(i) hereto, together
with all improvements and fixtures thereon and all rights
(including, but
not limited to, any rights that Seller may possess over any other
properties, such as any related rights of way or options) privileges
and easements appurtenant thereto (the "Real Property");
(ii) Equipment. All machinery,
equipment, vehicles, parts, supplies, fixtures, computers, trade
fixtures and furnishings, whether leased or owned, that are located
on the Real Property on the date hereof or otherwise used primarily
in
connection with the Business (the "Equipment"), including, without
limitation, the Equipment set forth on Schedule 1(b)(ii);
(iii) Contracts. All contracts, leases,
agreements, commitments, purchase orders and other legally binding
arrangements, whether oral or written, to which Seller is a party
or by which Seller is bound which are related to the Business and
which are listed on Schedule 1(b)(iii) (the "Contracts");
(iv) Inventory. All inventory, goods,
materials and supplies that are currently used in the Business (the
"Inventory") and that are owned by Seller on the Closing Date;
(v) Computer Software. To the extent
permitted by the relevant license agreement, all computer software
(including, without limitation, licenses, warranties and
documentation related thereto and related objects and source codes)
primarily utilized in the Business, it being understood by Buyer that
substantially all of the computer software utilized in the Business
belongs to Seaboard Corporation, is used on a shared basis by Seller
and will therefore not form part of the Assets;
(vi) Records. All information, files, records,
data and plans relating to the operation of the Business,
including, without limitation, maintenance records and manuals, and as-
built drawings and surveys, but excluding any files or records
relating to Employees;
(vii) Licenses, Licensing Agreements and
Permits. To the extent permitted by law and the terms of the
license or permit, all permits, authorizations, licenses, licensing
agreements, privileges and rights related to the Business, including
all government authorizations, permits and licenses;
(viii) Intellectual Property. Any and all
patents, patent applications (whether filed, unfiled or being
prepared), invention disclosures, trademarks (whether registered or
unregistered), trademark registrations, trademark applications (whether
filed, unfiled or being prepared), trade names, copyrights (registered
or unregistered), copyright applications (whether
filed, unfiled or being prepared), service marks (registered or
unregistered), service mark applications (whether filed, unfiled or being
prepared), all together with the goodwill of the Business associated with
such marks or names, trade secrets, technology, inventions, know how,
processes and confidential and proprietary information, including any being
developed (including, but not limited to, drawings, designs, manufacturing
data, design data, test data, operational data, engineering drawings,
formulae, computer programs, computer software and manuals), whether or not
subject to statutory registration, and Seller's patent and trademark files
(or copies thereof) on all such intellectual property, and all other
intellectual property and all rights thereunder, or in respect thereof, in
each and every case referred to in this Section 1(b)(viii) relating
primarily to the Business, including, without limitation, the trademarks and
service marks listed on Schedule 1(b)(viii) (the "Intellectual Property");
provided that Seller expressly disclaims any warranty, express or implied,
that it owns or has the exclusive right to use the same or that any of the
Intellectual Property does not violate or infringe upon the intellectual
property rights of any third person;
(ix) Accounts Receivable. All accounts
receivable owed to Seller and generated from sales of products of
the Business;
(x) Cash. All cash and investments held by
or for the account of the Seller on the Closing Date in excess of
$4,336,618;
(xi) Other Assets. All other assets
of the Business not described above reflected on the August 1, 1998
(the "Balance Sheet Date") balance sheet set forth as Schedule
1(b)(xi)
(the "Balance Sheet"), other than Inventory sold in the ordinary
course of business and accounts receivable which have been paid.
(c) Assumed Liabilities. On the Closing Date, Buyer
shall assume, and shall thereafter pay, perform and discharge when
due, the following obligations and liabilities of Seller related to
the Business, all in accordance with their terms (the "Assumed
Liabilities"): (i) all liabilities specifically included in the
balance sheet of Seller as of the Closing Date to be prepared by the
parties (the "Closing Date Balance Sheet"), which shall reflect
liabilities identical to the Balance Sheet except for changes in
current liabilities in the ordinary course of business or
attributable to the shutdown caused by Hurricane Georges (but
excluding repairs that Seaboard Corporation has agreed to make
pursuant to section 5(a)(v)); (ii) all obligations to perform the
Contracts after the Closing Date, but not any claims relating to
events prior to the Closing Date (other than claims for delivery of
finished products to the extent the purchase price thereof is
reflected on the Closing Date Balance Sheet); and (iii) the
liabilities identified as Assumed Liabilities on Schedule 1(c)(iii).
Buyer shall give access to Seller to Buyer's offices for purposes of
preparing the Closing Date Balance Sheet.
(d) Retained Liabilities. Except to the extent
constituting Assumed Liabilities, Buyer shall not assume or be
responsible for any liabilities of Seller related to the Business
("Retained Liabilities"), including without limitation
(i) liabilities relating to or arising from the operation of the
Business, or from conditions existing, prior to the Closing Date;
(ii) liabilities under any agreement entered into by Seller or any
affiliate of Seller that is not listed on Schedule 1(b)(iii);
(iii) liabilities arising from the consummation of the transactions
contemplated herein; (iv) liabilities relating to the employees of
Seller or to the termination of their employment; and (v) the
liabilities identified as Retained Liabilities on Schedule 1(c)
(iii). In no event shall the Retained Liabilities include any
amount specifically included in the Closing Date Balance Sheet.
(e) Withholding. All payments of principal and interest
due on the Note (as defined below) shall be made without any
withholding or deduction of any kind other than those required as
a result of any change in any applicable law or regulation adopted
after the date hereof. In the event that any such change in law is
adopted prior to the Closing Date, the parties shall negotiate in
good faith the net effect, if any, of such change in law on the
economic benefit to be derived by Seller from the transactions
contemplated herein. If such net effect is, in the reasonable
opinion of Seller, adverse to Seller, Seller may terminate this
Agreement pursuant to Section 13(a)(iv); provided, however, that
Seller shall not have this termination right if Buyer agrees to
fully indemnify Seller to the extent of such adverse effect. Seller
shall not have any termination right as a result of any change in
law adopted after the Closing Date.
2. Closing; Purchase Price Adjustment.
(a) Closing. The closing (the "Closing") of the purchase
and sale of the Assets shall be held at the offices of McConnell
Valdes, at 10:00 a.m. on November 30, 1998, or if the conditions to
Closing set forth in Section 3 of this Agreement shall not have been
satisfied by such date, as soon as practicable after such conditions
shall have been satisfied or, if permitted, waived. The date on
which the Closing shall occur is hereinafter referred to as
the "Closing Date." At the Closing, Buyer shall deliver to Seller
(i) immediately available funds in an amount equal to $5,500,000 by
wire transfer to one or more bank accounts designated in writing by
Seller, (ii) an assumption agreement or agreements in form and
substance reasonably satisfactory to Seller, duly executed by Buyer
(the "Assumption Agreement"), (iii) a guaranty agreement
substantially in the form of Exhibit A duly executed by Mr. Ramon
Calderon (the "Guaranty"), (iv) mortgage (in the amount of
$9,000,000) and security agreements in form and substance reasonably
satisfactory to Seller on the Assets, subordinate only to the
acquisition financing (including senior and subordinated debt not
exceeding $80,000,000) (the "Acquisition Financing") relating to the
purchase of the Holsum Bakers division of Seaboard and the shares of
Seaboard Bakeries, Inc. (the "Holsum Acquisition"), securing a note
issued by Buyer relating to the Holsum Acquisition, Mr. Ramon
Calderon's obligations under the Guaranty and all obligations owing
under this Agreement, the agreement relating to the Holsum
Acquisition or under any other documents or instruments delivered in
connection therewith, (v) if a mortgage title insurance policy is
required by the banks providing the acquisition financing, a
mortgagee title insurance policy with respect to the mortgage
describe above and (vi) the other documents described in Section
3(b). Concurrently, Seller shall deliver or cause to be delivered
to Buyer (x) duly executed real property deeds and bills of sale in
form and substance reasonably satisfactory to Buyer, (y) such other
instruments of sale, assignment, transfer or conveyance, in form and
substance reasonably satisfactory to Buyer and its counsel, as are
necessary to convey to Buyer good and, in the case of Real Property,
recordable title to the Assets and (z) the other documents described
in Section 3(a).
(b) Purchase Price Adjustment. (i) On the Closing Date,
Seller shall prepare and deliver to Buyer a statement setting forth
the balance of cash and cash equivalents (including short term and
long term investments) held by or for the account of Seller on the
Closing Date (the "Cash Balance").
(ii) To the extent that the Cash Balance is less
than $4,336,618, the Purchase Price shall be increased by the
amount by which such sum is less than $4,336,618. Such increase
shall be payable at Closing in immediately available funds.
(iii) The Purchase Price shall also be increased
by an amount equal to the interest from November 1, 1998, until
such date as Buyer and Seller consummate the Closing, (A) at the
rate of 6% per annum, with respect to $4,336,618, and (B) at the
rate payable under the senior portion of the Acquisition Financing,
with respect to $5,500,000. Interest shall be computed on the basis
of a 360-day year and the actual number of days elapsed, provided
that if the acquisition financing relating to the Holsum Acquisition
provides for the calculation of interest on the basis of twelve 30-
day months, interest shall be calculated on that basis.
3. Conditions to Closing.
(a) Buyer's Obligation. The obligation of Buyer to
purchase the Assets is subject to the satisfaction (or waiver by
Buyer) as of the Closing of the following conditions:
(i) The representations and
warranties of Seller made in this Agreement shall be true and
correct in all
material respects as of the date hereof and on and as of the
Closing, as though made on and as of the Closing Date, and Seller
shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or
complied with by Seller by the time of the Closing; and Seller shall have
delivered to Buyer a certificate dated the Closing Date and signed by an
authorized officer of Seller confirming the foregoing.
(ii) Buyer shall have received an opinion or
opinions dated the Closing Date of Fiddler Gonzalez & Rodriguez,
LLP, Sullivan & Worcester LLP or David Becker, Esq. in form and
substance reasonably satisfactory to Buyer.
(iii) The waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the "HSR Act") shall have expired or
been terminated.
(iv) Seller shall have delivered to the Buyer
the following documents, certified by the Secretary or any
Assistant Secretary of Seller, as appropriate:
(A) the charter and by-laws of Seller;
(B) the resolution or resolutions of the
board of directors of Seller authorizing the transactions
contemplated hereby;
(C) a document evidencing the authority
and incumbency of the persons executing documents on
behalf of Seller relating to the transactions
contemplated hereby;
(D) deeds of purchase and sale in form
and substance reasonably satisfactory to Buyer conveying
good and recordable title to the Real Property, free and
clear of all liens other than those set forth on the title
studies or title insurance policies set forth as Schedule
3(a)(iv)(D), and easements and restrictions of record
which do not unreasonably interfere with the use of the
premises as presently used (collectively, "Permitted
Encumbrances");
(E) such bills of sale, assignments, and
other instruments of transfer and conveyance as Buyer may
reasonable request or as may otherwise be necessary to
evidence and effect the sale, assignment, transfer,
conveyance and delivery to Buyer of good title to the
other Assets, but containing no representations or
warranties other than as set forth herein.
(v) Buyer shall have received the Acquisition
Financing necessary to consummate the Holsum Acquisition;
(vi) There shall not have occurred any material
adverse change in the Business caused by fire, explosion, acts of
God or of the public enemy, natural disasters or events of similar nature
occurring after the date hereof. Buyer understands that the Business has
not operated since Hurricane Georges struck Puerto Rico and that from that
date until October 20, 1998, the Business had no electrical power and that
Seller does not intend to operate the Business prior to the Closing Date.
(vii) All the conditions to the obligations of
HDPR Acquisitions Corp. and CB Acquisitions Corp. to consummate the
closing contemplated by the agreement relating to the Holsum
Acquisition shall have been satisfied or waived by such companies.
(b) Seller's Obligation. The obligation of Seller to
sell and deliver the Assets to Buyer is subject to the satisfaction
(or waiver by Seller) as of the Closing of the following condi-
tions:
(i) The representations and warranties of
Buyer made in this Agreement shall be true and correct in all
material respects as of the date hereof and on and as of the Closing Date as
though made on and as of the Closing Date, and Buyer shall have performed or
complied in all material respects with all obligations and covenants required
by this Agreement to be performed or complied with by Buyer by the time of the
Closing; and Buyer shall have delivered to Seller a certificate dated the
Closing Date and signed by an authorized officer of Buyer confirming the
foregoing.
(ii) Seller shall have received an opinion dated
the Closing Date of McConnell Valdes, counsel to Buyer, in
form and substance reasonably satisfactory to Seller.
(iii) The waiting period under the HSR Act shall
have expired or been terminated.
(iv) Buyer shall have delivered to Seller the
following documents, certified by the Secretary or any Assistant
Secretary of Buyer, as appropriate:
(A) copies of its certificate of
incorporation, by-laws and the resolution or resolutions
of Buyer authorizing the transactions contemplated hereby;
(B) a document evidencing the authority
and incumbency of the persons executing documents on
behalf of Buyer relating to the transactions contemplated
hereby;
(C) the Assumption Agreement; and
(D) the documents referred to in
Section 2(a)(iii), (iv) and (v).
(v) Seller shall have received a favorable
ruling in relation with its ruling request to the Puerto Rico
Treasury Department dated October 7, 1998.
(vi) All the conditions to the obligations of
Seaboard Corporation to consummate the closing contemplated by the agreement
relating to the Holsum Acquisition shall have been
satisfied or waived by Seaboard Corporation and such closing shall
be consummated simultaneously with the Closing hereunder.
4. Representations and Warranties of Seller.
Seller and Seaboard hereby represent and warrant to Buyer
as follows:
(a) Authority. Seller is duly organized, validly
existing and in good standing under the laws of the state of
Delaware, and is authorized to do business in Puerto Rico. Seller
has all requisite power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. All
corporate acts and other proceedings required to be taken by Seller
to authorize the execution, delivery and performance of this Agree
ment and the consummation of the transactions contemplated hereby
have been duly and properly taken. This Agreement has been duly
executed and delivered by Seller and constitutes a valid and binding
obligation of Seller, enforceable against Seller in
accordance with its terms, except to the extent such enforceability
may be limited by (x) laws affecting the enforcement generally of
the rights and remedies of creditors and secured parties and the
obligations of debtors and (y) general principles of equity. The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance
with the terms hereof will not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or
both) under, or give right to a right of termination, cancellation
or acceleration of any material obligation or to loss of a material
benefit under, or result in the creation of any lien, claim,
encumbrance, security interest, option, charge or restriction of any
kind upon any of the properties or assets of Seller under, any
provision of (i) the corporation law of the State of Delaware, (ii)
the Certificate of Incorporation or By-laws of Seller, (iii) except
as disclosed on the Schedules hereto, any material note, bond,
mortgage, indenture, deed of trust, license, lease, contract,
commitment, agreement or arrangement to which Seller is a party or
by which any of their respective properties or assets are bound, or
(iv) any judgment, order or decree, or statute, law, ordinance, rule
or regulation applicable to Seller or the property or assets of
Seller and not to Buyer or the property or assets of Buyer, other
than any such conflicts, violations, defaults, rights or liens,
claims, encumbrances, security interests, options, charges or
restrictions that individually or in the aggregate would not have a
material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of Seller. No
consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign, or any other person, is
required to be obtained or made by or with respect to Seller or its
affiliates in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby, other than (A) those set forth on
Schedule 4(a), (B) compliance with and filings under the HSR Act, if
applicable, and (C) those that may be required solely by reason of
Buyer's (as opposed to any other third party's) participation in the
transactions contemplated hereby.
(b) Title to the Assets. Seller has good and valid title
to the Assets, free and clear of any liens or encumbrances other
than Permitted Encumbrances. Upon delivery to Buyer of the
documents described in Section 3(a)(iv)(D) and (E), good and, in the
case of the Real Property, recordable title to the Assets will pass
to Buyer, free and clear of any liens or encumbrances, other than
Permitted Encumbrances.
(c) Power of Seller. Seller has full corporate power and
authority and possesses all required governmental franchises,
licenses, permits, authorizations and approvals which are material
and necessary to entitle it to own, lease or otherwise hold the
Assets and to carry on the Business as presently conducted.
(d) Compliance with Applicable Laws. Except as
disclosed on Schedule 4(d), the Business is being conducted in
material compliance with all applicable laws, orders, ordinances,
rules or regulations of any governmental authority, other than those
where the failure to comply would not have a material adverse
effect.
(e) Real Property. Schedule 1(b)(i) sets forth a list of
all the Real Property owned by Seller. Except as disclosed on
Schedule 4(e), Seller has good and recordable title to the Real
Property, free and clear of any encumbrances, except the Permitted
Encumbrances. Except as disclosed on Schedule 4(e), Seller has
received no written notice of any pending, contemplated or proposed
eminent domain proceeding with respect to any Real Property which
would materially and adversely affect the use, operation or value
thereof.
(f) Contracts. All Contracts are valid and binding
obligations of Seller (or an affiliate of Seller, if applicable) and
are in full force and effect, except as disclosed on
Schedule 4(f). Except as disclosed on Schedule 4(f), Seller (or an
affiliate of Seller, if applicable) has performed all material
obligations required to be performed by it to date under the
Contracts and is not (with or without the lapse of time or the
giving of notice, or both) in breach or default thereunder.
(g) Litigation. Schedule 4(g) sets forth a list of all
material lawsuits and proceedings pending or, to Seller's knowledge,
threatened in a written communication addressed to Seller or to
Seaboard Corporation and of all material claims or investigations to
Seller's knowledge pending or threatened, as of the date of this
Agreement, by or against Seller which affect the Business or relate
to the transactions contemplated by this Agreement.
(h) Intellectual Property. All patents, patent
applications, trademarks and trademark applications included in the
Intellectual Property are listed on Schedule 1(b)(viii). Except as
disclosed on Schedule 4(h), Seller has not received written notice
of any claims that are currently pending or that have been
threatened by any person, in each case with respect to the
ownership, validity, enforceability or use of any Intellectual
Property. Seller and Seaboard expressly disclaim any warranty,
express or implied, that Seller owns or has the exclusive right to
use any Intellectual Property or that any of the Intellectual
Property does not violate or infringe upon the intellectual property
of any third party.
(i) Balance Sheet. Subject to end of period adjustments,
the Balance Sheet fairly presents, in all material respects, the
financial condition of the Business as of August 1, 1998, in
accordance with Generally Accepted Accounting Principles.
(j) Taxes. Except as set forth in Schedule 4(j),
(i) Seller has, in respect of the Business and the Assets, filed all
tax returns which are required to be filed and has paid all taxes
which have become due pursuant to such tax returns or pursuant to
any assessment which has become payable; (ii) all such tax returns
are complete and accurate and disclose all taxes required to be paid
in respect of the Business and the Assets; (iii) there is no action,
suit, investigation, audit, claim or assessment pending or proposed
or threatened with respect to taxes of the Business or the Assets;
(iv) Seller has not waived or been requested to waive any statute of
limitations in respect of taxes associated with the Business or the
Assets; (v) all monies required to be withheld by Seller from
employees for income taxes and social security and other payroll
taxes have been collected or withheld, and all other taxes subject
to withholding under applicable law and regulations have been either
paid to the respective taxing authorities, set aside in accounts for
such purpose, or accrued, reserved against and entered upon the
books of Seller; and
(vi) there are no liens for taxes upon the Assets, except for liens
for taxes not yet due.
(k) Operation Since Balance Sheet Date. (i) Except as
set forth in Schedule 4(k) and Section 1(c), since the Balance Sheet
Date, there has been:
(A) no material adverse change in the
Assets, it being understood that the Business has not
operated since September 21, 1998, and is not expected to
operate prior to the Closing Date; and
(B) no material damage, destruction, loss
or claim, whether or not covered by insurance, or
condemnation or other taking adversely affecting any of
the Assets, other than that caused by Hurricane Georges.
(ii) Except as set forth in Schedule 4(k) or
Section 1(c), since the Balance Sheet Date, Seller has not:
(A) sold, leased (as lessor), transferred
or otherwise disposed of (including any transfers from
Seller to any of its affiliates) or mortgaged or pledged,
or imposed or suffered to be imposed any encumbrance on,
any of the assets reflected on the Balance Sheet or any
assets acquired by Seller after the Balance Sheet Date,
except for inventory and minor amounts of personal
property sold or otherwise disposed of for fair value in
the ordinary course of the Business consistent with past
practice and except for Permitted Encumbrances;
(B) canceled any debts owed to Seller and
reflected on the Balance Sheet other than in the ordinary
course of the Business consistent with past practice;
(C) created, incurred or assumed, or
agreed to create, incur or assume, any indebtedness for
borrowed money or entered into, as lessee, any capitalized
lease obligations;
(D) accelerated or delayed collection of
notes or accounts receivable generated by the Business in
advance of or beyond their regular due dates or the dates
when the same would have been collected in the ordinary
course of the Business consistent with past practice;
(E) delayed or accelerated payment of any
account payable or other liability of the Business beyond
or in advance of its due date or the date when such
liability would have been paid in the ordinary course of
the Business consistent with past practice; or
(F) made any change in the accounting
principles and practices used by Seller from those applied
in the preparation of the Balance Sheets.
(l) Availability of Assets and Legality of Use. Except
as set forth in Schedule 4(l) or otherwise described in
Section 1(b), the Assets constitute all the assets used in the
Business (including, but not limited to, all books and records),
will on the Closing Date be in good working condition (subject to
normal wear and tear) and are suitable for the uses for which
intended.
(m) Governmental Permits. Seller owns, holds or
possesses all material licenses, franchises, permits, privileges,
immunities, approvals and other authorizations which are necessary
to entitle it to own or lease, operate and use the Assets and to
carry on and conduct the Business substantially as currently
conducted (herein collectively called "Governmental Permits").
Schedule 4(m) sets forth a list and brief description of each
Governmental Permit. Complete and correct copies of all of the
Governmental Permits have heretofore been delivered to Buyer by
Seller.
Except as set forth in Schedule 4(m), (i) Seller has
fulfilled and performed its material obligations under each of the
Governmental Permits, and no event has occurred or condition or
state of facts exists which constitutes or, after notice or lapse of
time or both, would constitute a material breach or default under
any such Governmental Permit or which permits or, after notice or
lapse of time or both, would permit revocation or termination of any
such Governmental Permit, or which might materially and adversely
affect the rights of Seller under any such Governmental Permit; (ii)
no notice of cancellation, of default or of any material dispute
concerning any Governmental Permit, or of any event, condition or
state of facts described in the preceding clause, has been received
by, or is known to, Seller; and
(iii) each of the Governmental Permits is valid, subsisting and in
full force and effect.
(n) Accounts Receivable; Inventories. All accounts
receivable of Seller existing on the Closing Date have arisen from
bona fide transactions by Seller in the ordinary course of the
Business.
Except as set forth on Schedule 4(n), the inventories
of Seller (including supplies and other materials) are in good,
merchantable and useable condition. The reserve for inventory
obsolescence contained in the Balance Sheet fairly reflects the
amount of obsolete inventory as of the Balance Sheet Date.
(o) Environmental Matters. For purposes of this
Agreement,
(A) "CERCLA" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601 et seq., as amended as of the date hereof,
and any federal, state, Commonwealth of Puerto Rico or
local regulations promulgated thereunder;
(B) "Contaminant" shall mean any hazardous
or toxic substance or waste, petroleum, petroleum-based
substance or waste or special waste;
(C) "Environmental Encumbrance" shall mean
an encumbrance in favor of any Governmental Body for (i)
any liability under any Environmental Law, or
(ii) damages arising from, or costs incurred by such
Governmental Body in response to, a Release or threatened
Release of a Contaminant into the environment;
(D) "Environmental Law" shall mean all
federal, state, commonwealth and local laws or regulations
relating to or addressing the environment, including but
not limited to CERCLA, RCRA, the Clean Water Act, the
Clean Air Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, and any state or commonwealth
equivalent thereof;
(E) "Governmental Body" shall mean any
foreign, federal, state, local or other governmental
authority or regulatory body;
(F) "Person" shall mean any individual,
corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
Governmental Body;
(G) "RCRA" shall mean the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et seq.,
and any state or Commonwealth of Puerto Rico regulations
promulgated thereunder;
(H) "Release" shall mean release, spill,
emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into
or out of any Assets, including the movement of
Contaminants through or in the air, soil, surface water,
groundwater or the Assets; and
(I) "Remedial Action" shall mean actions
required under applicable Environmental Law to (i) clean
up, remove, treat or in any other way address Contaminants
in the indoor or outdoor environment;
(ii) prevent the Release or threatened Release or minimize the
further Release of Contaminants; or
(iii) investigate and determine if a remedial response is needed and to
design such a response and post-remedial investigation, monitoring,
operation and maintenance and care.
Except as set forth in Schedule 4(o):
(i) the Assets and the operations of the
Business comply in all material respects with all applicable
Environmental Laws;
(ii) Seller has, in respect of the
Business, obtained all Governmental Permits required under
applicable
Environmental Law necessary for its operation, and all such
Governmental Permits required under applicable Environmental Law are
in good standing and Seller is in compliance with all terms and
conditions of such permits, except where the failure to have or be
in compliance with such permits would not reasonably be expected to
have a material adverse effect on the Business;
(iii) to Seller's knowledge, neither
Seller, with respect to the Business, nor any of the Assets is
currently
subject to any on-going investigation by, agreement with any Person
respecting (A) any Environmental Law, (B) any Remedial Action or (C)
any claim arising from a Release or threatened Release, in each
case, that would reasonably be expected to have a material adverse
effect on the Business;
(iv) Seller has not, with respect
to the Assets or the Business, received written notice of any
judicial or
administrative proceeding, order, judgment, decree or settlement
alleging or addressing a violation of or liability under any
Environmental Law;
(v) to Seller's knowledge, with
respect to the Assets or the Business, Seller has never been
required and is not
currently required by any applicable Environmental Laws to:
(A) report a Release of a hazardous
substance pursuant to Section 103(a) of CERCLA, or any
state equivalent;
(B) file a notice pursuant to
Section 103(c) of CERCLA; or
(C) file any other notice under any
applicable Environmental Law reporting a violation of any
applicable Environmental Law which might reasonably be
expected to have a material adverse effect on the
Business;
Seller, has not, with respect to the Assets or the Business, ever
filed such a report or notice;
(vi) to Seller's knowledge, there is not now,
nor has there ever been, on or in any of the Assets any generation,
transfer, handling treatment, recycling, storage or disposal of any
hazardous waste or substance, as that term is defined under
applicable Environmental Laws, that requires or required a
Governmental Permit pursuant to such Environmental Laws;
(vii) Seller has not received and is not aware
of any written notice or claim to the effect that it is or may be
liable to any Person as a result of a Release or threatened Release at or from
the Assets or concerning the presence of a Contaminant in the Assets;
(viii) to Seller's knowledge, no Environmental
Encumbrance has attached to any of the Assets; and
(ix) to Seller's knowledge, any asbestos-
containing material which is on or part of the Assets is in good repair
according to the current standards and practices governing such material, and
its presence or condition does not violate any currently applicable
Environmental Law.
(p) Disclosure. None of the representations or
warranties of Seller contained herein, none of the information
contained in the Schedules hereto and none of the other information
or documents furnished or to be furnished to Buyer or any of its
representatives by Seller or its representatives pursuant to the
terms of this Agreement, is false or misleading in any material
respect or omits to state a fact herein or therein necessary to make
the statements herein or therein not misleading in any material
respect. To Seller's knowledge there is no fact which adversely
affects or in the future is likely to adversely affect the Assets or
the Business in any material respect which has not been set forth or
referred to in this Agreement or the Schedules hereto.
(q) Employees. Effective at or before the Closing
Seller will have dismissed all its employees (the "Employees") and
will have paid all Employees such sums as may be required to be paid
to the Employees under all applicable laws, regulations, orders and
employment contracts.
5. Covenants of Seller. Seller and Seaboard covenant and
agree as follows:
(a) Ordinary Conduct of Business by Seller. Seller
expects that the Business will not operate prior to the Closing
Date. If the Business is operated, then except as permitted by the
terms of this Agreement, from the date hereof to the Closing Date,
Seller will conduct the Business in the ordinary course in
substantially the same manner as conducted prior to Hurricane
Georges. Except as set forth on Schedule 5(a) or otherwise
expressly permitted by the terms of this Agreement, from the date
hereof to the Closing Date, Seller, will not do any of the following
without the prior written consent of Buyer, which consent shall not
be unreasonably withheld or delayed:
(i) approve any compensation or other benefit
increases to employees of the Business;
(ii) incur or assume any liabilities, obliga-
tions or indebtedness for borrowed money or guarantee any such
liabilities, obligations or indebtedness, other than in the ordinary course of
business consistent with past practice; provided
that in no event shall the Seller, assume or guarantee any long-term
indebtedness for borrowed money relating to the Business;
(iii) permit, allow or suffer any of the Assets
to be subjected to any encumbrance, other than Permitted
Encumbrances;
(iv) cancel any material indebtedness
(individually or in the aggregate) or waive any claims or rights of
substantial value;
(v) make or incur any capital expenditure or
expenditures which, individually, is in excess of $10,000, it being
understood that damages caused by Hurricane Georges shall be
repaired at the expense of Seaboard Corporation, and not of Seller;
(vi) make any material change in the conduct or
character of the Business;
(vii) make any sale, assignment, transfer or
other conveyance of any of the Assets, except in the ordinary
course of business;
(viii) acquire or agree to acquire any assets
that will form part of the Assets other than in the ordinary course
of business;
(ix) pay any dividend or make any other
distribution to its Stockholders;
(x) enter into any material transactions other
than in the ordinary course of business;
(xi) take any action that would cause or permit
the representations and warranties made herein to be inaccurate at
the Closing Date; or
(xii) agree, whether in writing or otherwise, to
do any of the foregoing.
(b) Access. Prior to the Closing, Seller will give
Buyer and its financing sources, and their respective
representatives, employees, counsel and accountants, access, during
normal business hours and upon reasonable notice, to its personnel,
properties, books and records. Seller will arrange for its
directors, officers, employees and independent public accountants
and legal counsel to cooperate with such examination. Buyer and its
representatives shall execute such confidentiality agreements as
Seller shall reasonably require.
(c) Insurance. Seller shall keep, or cause to be kept,
all insurance policies relating to the Business, or suitable
replacements therefor, in full force and effect through the close of
business on the Closing Date.
(d) Other Transactions. Prior to the Closing, none of
Seller, nor any affiliate of Seller shall, nor shall they permit any
of their respective officers, directors, stockholders or other
representatives to, directly or indirectly, encourage, solicit or
initiate discussions or negotiations with, any corporation,
partnership, person, or other entity or group (other than Buyer and
their representatives) concerning any merger, sale of securities,
sale of assets or similar transaction involving the Business.
(e) Non-Competition. (i) Seller, on its behalf and
on behalf of its affiliates and subsidiaries, agrees that, for a
period of ten (10) years after the Closing Date, Seller and its
affiliates shall not, directly or indirectly, engage in (1) the
production, marketing or sale of bakery products, or (2) the
manufacture, marketing or sale of flour, in each case in Puerto Rico
or with respect to customers in Puerto Rico (the "Restricted
Business"), or acquire any equity securities of, or make any loan
to, or enter into any joint venture or similar agreement with, any
person engaged in the Restricted Business in Puerto Rico or with
respect to customers in Puerto Rico; provided, however, that this
clause (i)(2) shall not prohibit (A) any minority investment in any
entity that is not engaged in the Restricted Business as a material
line of business, (B) any joint venture for which the Restricted
Business is not a material line of business or (C) any investment
representing less than 5% of the ownership in a publicly traded
company in the management of which Seller does not participate. This
covenant (the "Restrictive Covenant") shall cease to have any effect
with respect to the business described in clause (i)(2) above if Mr.
Ramon Calderon, or his lineal descendants, persons who are members
of the management of the Business on the Closing Date, or any person
or entity acquiring an interest in the Business as a result of a
foreclosure or work-out of the Acquisition Financing shall at any
time cease to own, directly or indirectly, a controlling interest in
the Business.
(ii) The parties agree that if any
court of competent jurisdiction determines that the Restrictive
Covenant or
any part thereof is invalid or unenforceable, the remainder of the
Restrictive Covenant shall not thereby be affected and shall be
given full effect, without regard to the invalid portions.
Furthermore, if any portion of the Restrictive Covenant, or the
application of any portion of the Restrictive Covenant to any person
or circumstances, shall be held invalid or unenforceable by any
court of competent jurisdiction, the remaining portion of the
Restrictive Covenant, or the application of such portion of the
Restrictive Covenant to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected
thereby. In either of the foregoing cases, the parties agree that
they will amend the terms of the Restrictive Covenant or portion
thereof so determined to be invalid or unenforceable, but only in
the most minimal manner necessary to make such terms comply with the
determination of such court.
(iii) If Seller breaches, or threatens to commit
a breach of, the Restrictive Covenant, Buyer shall have the right to
have the Restrictive Covenant specifically enforced by any court of
competent jurisdiction, it being acknowledged and agreed that any
such breach or threatened breach will cause irreparable injury to
Buyer and that money damages will not provide an adequate remedy to
Buyer. Such right of specific performance shall be independent of,
and in addition to, and not in lieu of, any other rights and
remedies available to Buyer at law or in equity.
(f) Supplemental Disclosure. Seller shall have the
continuing obligation until the Closing promptly to supplement or
amend the Schedules hereto with respect to any matter hereafter
arising or discovered which, if existing or known at the date of
this Agreement, would have been required to be set forth or
described in such Schedules; provided, however, that for the purpose
of the rights and obligations of the parties hereunder, any such
supplemental or amended disclosure shall not be deemed to have been
disclosed as of the date of this Agreement unless so agreed in
writing by Buyer.
(g) Tax Ruling. Seller shall use its best efforts to
obtain the ruling referred to in Section 3(b)(v).
6. Representations and Warranties of Buyer.
Buyer hereby represents and warrants to Seller that it is
a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Puerto Rico. Buyer has all
requisite power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. All corporate acts
and other proceedings required to be taken by Buyer to authorize the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and properly taken. This Agreement has been duly executed and
delivered by Buyer and constitutes a valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms,
except to the extent such enforceability may be limited by (x) laws
affecting the enforcement generally of the rights and remedies of
creditors and secured parties and the obligations of debtors and (y)
general principles of equity. The execution and delivery of this
Agreement by Buyer does not, and the consummation of the
transactions contemplated hereby and compliance with the terms
hereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or
give right to a right of termination, cancellation or acceleration
of any obligation or to loss of a material benefit under, or result
in the creation of any lien, claim, encumbrance, security interest,
option, charge or restriction of any kind upon any of its properties
or assets under, any provision of (i) the corporation law of the
Commonwealth of Puerto Rico, (ii) its Certificate of Incorporation
or By-laws, (iii) except as disclosed on the Schedules hereto, any
material note, bond, mortgage, indenture, deed of trust, license,
lease, contract, commitment, agreement or arrangement to which it is
a party or by which any of its properties or assets are bound, or
(iv) any judgment, order or decree, or statute, law, ordinance, rule
or regulation applicable to it or its property or assets, other
than, in the case of
clause (iii) above, any such conflicts, violations, defaults, rights
or liens, claims, encumbrances, security interests, options, charges
or restrictions that individually or in the aggregate would not have
a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Business.
No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign, is required to be obtained or
made by or with respect to Buyer or its respective affiliates in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, other than (A)
those described on Schedule 6, (B) compliance with and filings under
the HSR Act, if applicable, and (C) those that may be required
solely by reason of Seller's (as opposed to any other third party's)
participation in the transactions contemplated hereby.
7. Mutual Covenants.
(a) Consents. Buyer and Seller shall use their
reasonable best efforts to obtain, prior to the Closing, any
consents of third parties and any authorizations or permits from any
governmental authority required in connection with the consummation
of the transactions contemplated herein; provided, however, that (i)
Buyer shall be solely responsible for obtaining any consent required
in connection with the assignment of particular contracts, licenses,
authorizations or permits that
require the consent of a counterparty or government entity as a
condition to such assignment (including the consent of the Puerto
Rico government under Seller's grant of tax exemption), as well as
for obtaining new governmental permits and authorizations to replace
permits and authorizations that are not assignable, and (ii) the
obtaining of any consent or new governmental permit or authorization
referred to in clause (i) (other than those set forth in Schedule
7(a), which shall be a condition to Buyer's obligation to consummate
the Closing) shall not be a condition to Buyer s obligation to
consummate the Closing.
(b) Cooperation. Buyer and Seller shall cooperate with
each other and shall cause their officers, employees, agents,
auditors and representatives to cooperate with each other after the
Closing to ensure the orderly transition of the Assets from Seller
to Buyer and to minimize any disruption to the respective businesses
of Seller or Buyer that might result from the transactions
contemplated hereby. Each party shall reimburse the other for
reasonable out-of-pocket costs and expenses incurred in connection
with actions taken at the request of the other party pursuant to
this Section 7(b), provided that the party seeking such
reimbursement shall have notified the other prior to incurring any
such expense that it intends to seek reimbursement for such expense.
(c) Publicity. Seller and Buyer agree that, from the
date hereof through the Closing Date, no public release or
announcement, and no disclosure to any third party, concerning the
transactions contemplated hereby shall be made by either party
without the prior consent of the other party, except as such release
or announcement may be required by law or by the regulations of the
American Stock Exchange, in which case the party required to make
the release or announcement shall allow the other party reasonable
time to comment on such release or announcement in advance of such
issuance to the extent possible. Buyer acknowledges Seller's Press
Release of October 20, 1998.
(d) Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable
best efforts to cause the Closing to occur as soon as possible.
(e) Records. On the Closing Date, Seller shall deliver
or cause to be delivered to Buyer copies of all agreements,
documents, books, records and files (collectively, "Records"), in
the possession of Seller relating to the Business, except that
Seller may retain all Records prepared in connection with the sale
of the Assets. Seller shall have access to and be authorized to
make copies of any records delivered to the Buyer. Buyer shall keep
all Records for six years after the Closing Date or until the
expiration of the applicable statute of limitations for third party
claims, if longer.
(f) Seller Trade Payables. Buyer shall repay in full,
within five days after the Closing Date, all trade payables and all
intercompany payables identified on the Closing Date Balance Sheet
due by Seller to Seaboard or any affiliate of Seller. On the
Closing Date, such trade and intercompany payables shall be secured
by the same collateral securing the Note. Non-payment of these
payables shall constitute a default under the Note.
(g) Confidentiality. Each party shall take reasonable
appropriate actions to keep confidential, and cause its affiliates
and instruct its and their officers, directors, employees and
advisors to keep confidential, all non-public information relating
to the Business, Seller and Buyer, except as required by law or
administrative process or the rules of the American Stock Exchange,
and except for information which becomes public other than as a
result of a breach of this Section 7(g), and provided that this
covenant shall not restrict the ability of any person's and its
affiliates' respective officers, directors, advisors and employees
to discuss such information internally.
(h) Cooperation with Respect to Litigation. Buyer shall
cooperate with Seller in all respects, at Seller's expense, in the
defense of all claims which constitute Retained Liabilities.
8. Further Assurances.
From time to time, as and when requested by either party
hereto, the other party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other actions, as
such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by, or give effect to the
agreements set forth in, this Agreement.
9. Indemnification.
(a) Indemnification by Seller and Seaboard. Seller and
Seaboard shall jointly and severally indemnify Buyer and its
officers, directors, employees and agents and hold them harmless
from any loss, liability, claim, damage or expense (including
reasonable legal fees and expenses) suffered or incurred by any such
indemnified party to the extent arising from (i) any breach of any
of their representations or warranties contained in this Agreement,
(ii) any breach of any of their covenants contained in this
Agreement requiring performance after the Closing Date, and (iii)
the Retained Liabilities; provided, however, that neither Seller nor
Seaboard shall have any liability under clause (i) above unless the
aggregate of all losses, liabilities, costs and expenses relating
thereto for which Seller or Seaboard would, but for this provision,
be liable exceeds on a cumulative basis an amount equal to $150,000,
and then only to the extent of any such excess up to
a maximum aggregate amount equal to $500,000; and provided further,
however, that neither Seller nor Seaboard shall have any liability
hereunder for any breach of a representation or warranty of Seller
contained in this Agreement if Mr. Ramon Calderon, Buyer or any of
its directors or officers had actual or constructive knowledge of
such breach on the Closing Date.
(b) Indemnification by Buyer. Buyer shall indemnify
Seller, its affiliates and each of its officers, directors,
employees and agents against and hold them harmless from any loss,
liability, claim, damage or expense (including reasonable legal fees
and expenses) suffered or incurred by any such indemnified party to
the extent arising from (i) any breach of any representation or
warranty of any Buyer contained in this Agreement, (ii) any breach
of any covenant of any Buyer contained in this Agreement requiring
performance after the Closing Date, and (iii) the Assumed
Liabilities.
(c) Losses Net of Insurance. The amount of any loss,
liability, claim, damage or expense for which indemnification is
provided under this Section 9 shall be net of any amounts recovered
or recoverable by the indemnified party under insurance policies
with respect to such loss, liability, claim, damage or expense and
net of any tax benefit derived by the indemnified party from such
loss, liability, claim, damage or expense.
(d) Termination of Indemnification. The obligations to
indemnify and hold harmless a party hereto, (i) pursuant to Sections
9(a)(i) and 9(b)(i), shall terminate when the applicable
representation or warranty terminates pursuant to Section 13, (ii)
pursuant to Sections 9(a)(ii) and 9(b)(ii), shall terminate when the
applicable covenant terminates in accordance with its
terms, and (iii) pursuant to Sections 9(a)(iii) and 9(b)(iii) shall
not terminate; provided, however, that as to clause (i) above such
obligations to indemnify and hold harmless shall not terminate with
respect to any item as to which the person to be indemnified or the
related party hereto shall have, before the expiration of the
applicable period, previously made a claim by delivering a notice
(stating in reasonable detail the basis of such claim) to the
indemnifying party.
(e) Procedures Relating to Indemnification. In order for
a party (the "indemnified party") to be entitled to any
indemnification provided for under this Agreement, arising out of or
involving a claim or demand made by any person, firm, governmental
authority or corporation against the indemnified party (a "Third
Party Claim"), such indemnified party must notify the indemnifying
party in writing, and in reasonable detail, of the Third Party Claim
within 30 days after receipt by such indemnified party of written
notice of the Third Party Claim; provided, however, that failure to
give such notification shall not affect the indemnification provided
hereunder except to the extent the indemnifying party shall have
been actually prejudiced as a result of such failure (except that
the indemnifying party shall not be liable for any expenses incurred
during the period following the end of such 30-day period referred
to above in which the indemnified party failed to give such notice
and the date on which such notice is given). Thereafter, the
indemnified party shall deliver to the indemnifying party, within
ten (10) business days after the indemnified party's receipt
thereof, copies of all notices and documents (including court
papers) received by the indemnified party relating to the Third
Party Claim.
If a Third Party Claim is made against an indemnified
party, the indemnifying party will be entitled to participate in the
defense thereof and, if it so chooses, to assume the defense thereof
(unless the indemnifying party is also a party to such Third Party
Claim and the indemnified party determines in good faith that joint
representation would be inappropriate due to a potential conflict of
interest) with counsel selected by the indemnifying party and
reasonably satisfactory to the indemnified party. Should the
indemnifying party be entitled under the preceding sentence to
assume the defense of a Third Party Claim and so elect to assume
such defense, the indemnifying party will not be liable to the
indemnified party for legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof. If the
indemnifying party assumes such defense, the indemnified party shall
have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by
the indemnifying party, it being understood that the indemnifying
party shall control such defense (except in the circumstances set
forth in the parenthetical to the first sentence of this paragraph).
The indemnifying party shall be liable for the fees and expenses of
counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the defense thereof
(other than during any period following the 30-day period referred
to in the first sentence of this Section 9(f) in which the
indemnified party shall have failed to give notice of the Third
Party Claim as provided above). If the indemnifying party chooses
to defend or prosecute any Third Party Claim, all of the parties
hereto shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying
party's request) the provision to the indemnifying party of records
and information which are reasonably relevant to such Third Party
Claim, and making
employees available on a mutually convenient basis to provide
additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party shall have assumed
the defense of a Third Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the indemnifying party's
prior written consent (which consent shall not be unreasonably
withheld or delayed).
(f) This Section 9 shall not apply to indemnification for
taxes, which shall be governed by Section 10.
10. Tax Matters.
(a) Income Tax Liability. Buyer shall be responsible and
shall indemnify Seller for any Puerto Rican and federal income tax
liabilities of Seller related to the period from August 2, 1998 to
the Closing Date (net of any estimated payments made on or after
August 2, 1998 or overpayments attributable to such payments).
Seller and Seaboard shall be responsible and shall jointly and
severally indemnify Buyer for any Puerto Rican and federal income
tax liabilities of Seller for any period prior to August 2, 1998
(net of any estimated payments made prior to August 2, 1998 or
overpayments attributable to such payments and refundable to
Seller). The income taxes for the period that includes August 2,
1998 shall be allocated among the parties based on Seller's monthly
financial statements as of, and for the year to date period ended
on, August 1, 1998, provided that reconciling items between book net
income and net taxable income shall be attributed to the period to
which they are directly allocable and those items not attributable
to any period shall be apportioned based on the net taxable income
before such reconciling items. The marginal income tax rate for
both periods (on and before August 1, 1998 and on and after August
2, 1998) shall be the same.
(b) Tax Returns and Filings. The taxable period
of Seller that includes the Closing Date shall be reported to the
United States and Puerto Rico by the Seller. Seller will timely
prepare and file with the appropriate authorities (after approval by
Buyer, which approval shall not be unreasonably withheld or delayed)
all United States income tax returns, reports and forms required to
be filed and will pay all income taxes due with respect to such
returns, reports and forms. Buyer shall, within thirty (30) days of
the later of the filing of such return or notification by Seller of
the amounts owed, pay to Seller any amounts are owed in accordance
with the allocation methodology set forth above. Conversely, if
amounts are owed to Buyer, they shall be paid by Seller or Seaboard
within thirty (30) days of the filing of such return.
(c) Tax Audits and Amended Returns. Any liability or
refund resulting from a tax audit, revenue agent review or similar
proceeding of either taxing jurisdiction shall be borne or shared by
Seller (or Seaboard) and Buyer in accordance with the allocation
methodology set forth above and paid over to the appropriate party
within thirty (30) days of the finalization of such proceeding.
Seller shall give notice to Buyer of any United States audits and
allow Buyer to participate in the process. Seller shall not agree
to any audit adjustments which would increase Buyer s income or
other tax liability without Buyer s consent, which consent shall not
be unreasonably withheld or delayed. Seller shall, if Buyer so
requests and at Buyer's expense, file for and obtain any refunds or
credits to which Buyer is entitled under this Section. Seller shall
permit Buyer to control the prosecution of any such refund claim
and, where deemed appropriate by Buyer, authorize by appropriate
powers of attorney such persons as Buyer shall
designate to represent the Buyer with respect to such refund claim.
Seller shall forward to Buyer any refund within thirty (30) days
after the refund is received (or reimburse Buyer for any such
credit within thirty (30) days after the credit is allowed and
applied against other income tax liability), provided, however, that
such amounts payable to Buyer shall be net of any reasonable
expense incurred by Seller attributable to the receipt of such
refund and/or the payment of such amount to Buyer. Seller and Buyer
shall treat any payments under the preceding sentence as an
adjustment to the Purchase Price.
(d) Any adjustments to the income tax liability based on
audit shall be borne in accordance with the apportionment set forth
herein within thirty (30) days after the final audit determination.
(e) General Tax Matters. Seller and Buyer shall
reasonably cooperate, and shall cause their respective affiliates,
officers, employees, agents, auditors and representatives reasonably
to cooperate, in preparing and filing all returns, reports and forms
relating to income taxes, including maintaining and making available
to each other all records necessary in connection with income taxes
and in resolving all disputes and audits with respect to all taxable
periods relating to income taxes. Buyer and Seller recognize that
Seller and its affiliates will need access, from time to time, after
the Closing Date, to certain accounting and tax records and
information of Seller, and therefore, each party agrees (1) to use
its best efforts to properly retain and maintain such records until
such time as the other party agrees that such retention and
maintenance is no longer necessary; and (2) to allow the other party
and its agents and representative (and agents or representatives of
any of its affiliates), at times and dates mutually acceptable to
the parties, to inspect, review and make copies of such records as
the other party may deem necessary or appropriate from time to time,
such activities to be conducted during normal business hours and at
the other party's expense.
11. Assignment; Successors.
This Agreement and the rights and obligations hereunder
shall not be assignable or transferable by any Buyer or Seller
(including by operation of law) without the prior written consent of
the other parties hereto; provided, however, that (i) any Buyer may
assign its right hereunder to a subsidiary or affiliate of such
Buyer which is controlled by Mr. Ramon Calderon without the prior
written consent of Seller and (ii) Seller may assign its rights and
obligations hereunder to any entity wholly owned by Seller; provided
further, however, that no assignment shall limit or affect the
assignor's obligations hereunder.
12. No Third-Party Beneficiaries.
This Agreement is for the sole benefit of the parties
hereto and their permitted assigns and nothing herein expressed or
implied shall give or be construed to give to any person or entity,
other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
13. Termination.
(a) Anything contained herein to the contrary notwith
standing, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(i) by mutual written consent of Seller and
Buyer;
(ii) by either party hereto, if the Closing does
not occur on or prior to December 31, 1998;
(iii) by Seller, if on or prior to December 4,
1998, Buyer shall not have executed a credit agreement providing
for sufficient financing to consummate the Holsum Acquisition and containing
terms that, to the extent affecting the rights of Seller or the ability of
Buyer to consummate the transactions contemplated herein, shall be reasonably
satisfactory to Seller; or
(iv) by Seller, as provided in Section 1(g), in
the event that Seller and Buyer shall not reach an agreement as to
the indemnification, if any, of Seller by Buyer with respect to any
adverse economic effect arising from any change in any applicable
law or regulation adopted prior to the Closing Date and requiring
any tax withholding with respect to payment of the Purchase Price;
provided, however, that the party seeking termination pursuant to
clause (ii) or (iii) is not in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.
(b) In the event of termination by Seller or Buyer
pursuant to this Section 13, written notice thereof shall forthwith
be given to the other party and the transactions contemplated by
this Agreement shall be terminated, without further action by either
party. If the transactions contemplated by this Agreement are
terminated as provided herein:
(i) Buyer shall return all documents
and other material received from Seller relating to the transactions
contemplated hereby, whether so obtained before or after the execution
hereof, to Seller;
(ii) if such termination is pursuant to
Section 12(a)(ii) under such circumstances that all the conditions
to Closing set forth in Section 3(a) shall have been satisfied or
would have been satisfied but for any action taken or omitted to be
taken by Buyer or any of its affiliates, then such termination shall
not result in any liability to Seller; and
(iii) if such termination is pursuant to
Section 13(a)(ii) under such circumstances that all the conditions
to Closing set forth in Section 3(b) shall have been satisfied or
would have been satisfied but for any action taken or omitted to be
taken by Seller or any of its affiliates, then such termination
shall not result in any liability to Buyer.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 13,
this Agreement shall become void and of no further force and effect,
except for the provisions of (i) Section 15 hereof relating to
expenses, (ii) Section 7(c) hereof relating to publicity,
(iii) Section 21 hereof relating to finder's fees and broker's fees,
(iv) this Section 13 and (v) Section 7(g) relating to
confidentiality. Nothing in this Section 13 shall be deemed to
release either party from any liability for any breach by such party
of the terms and provisions of this Agreement or to impair the right
of either party to compel specific performance by the other party of
its obligations under this Agreement or to claim damages from the
other party for breach of this Agreement; provided, however, that a
termination of this Agreement based solely on the breach of a
representation, which breach is not intentional and does not involve
fraud or bad faith, shall only
entitle the non-breaching party to recover its out-of-pocket
expenses incurred in connection with this transaction, and not any
consequential or other damages.
14. Survival of Representations.
The representations and warranties in this Agreement shall
survive the Closing for a period of one year commencing on the
Closing Date. The representations and warranties in the Note, the
collateral documents securing the Note and the Guaranty shall
survive until the Note is paid in full. The obligations of each
party hereto under the covenants that are required to be performed
after the Closing pursuant to this Agreement or the Assumption
Agreement and the obligations of Mr. Ramon Calderon and Buyer under
the Note, the collateral documents securing the Note and the
Guaranty shall survive until such obligations have been fully
performed.
15. Expenses.
Whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs or expenses. Buyer shall be
responsible for the payment of the expenses related to the
preparation and execution of the real property deeds necessary for
the transfer of the Real Property (except for the internal revenue
stamps to be affixed to the original of the real property deeds,
which shall be paid by Seller), and for the payment of the internal
revenue stamps required in the first certified copy of such deeds
and the internal revenue vouchers required for the recordation of
such deeds in the Registry of Property of Puerto Rico. Buyer shall
also be responsible for the expenses related to the execution and
recordation of any mortgages and security interests provided herein.
If the transactions contemplated hereby are not consummated within
the agreed period, Buyer and Ramon Calderon shall reimburse Seller
for any expenses of Buyer paid for by Seaboard Corporation or
Seaboard Bakeries related to the transaction within ten (10) days
after the termination of this Agreement.
16. Amendments.
No amendment to this Agreement shall be effective unless
it shall be in writing and signed by all parties hereto.
17. Notices.
All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex, cable or telecopy, or sent, postage
prepaid, by registered, certified or express mail, or reputable
overnight courier service and shall be deemed given when so
delivered by hand, telexed, cabled or telecopied, or if mailed,
three days after mailing (one business day in the case of express
mail or overnight courier service), as follows:
(a) if to Buyer,
Mr. Ramon Calderon
Holsum Bakers of Puerto Rico
Call Box 8282
Toa Baja, P.R. 00951
Telecopier: (787) 251-2060
with copies to:
McConnell Valdes
270 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Telecopier: (787) 759-8282
Attention: Julio Pietrantoni, Esq.
(b) if to Seller,
Seaboard Corporation
9000 West 67th Street
PO Box 2972
Shawnee Mission, Kansas 66201
Telecopier: (913)676-8978
Attention: David M. Becker, Esq.
Department of Legal Affairs
with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02108
Telecopier: (617) 338-2880
Attention: Marshall L. Tutun, Esq.
and
Fiddler Gonzalez & Rodriguez, LLP
254 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Telecopier: (787) 754-7539
Attention: Rafael Cortes Dapena, Esq.
18. Interpretation.
The headings contained in this Agreement, in any Exhibit
or Schedule hereto and in the table of contents to this Agreement,
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
19. Counterparts.
This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties and delivered
to the other party.
20. Entire Agreement.
This Agreement, including the Schedules and Exhibits
hereto, contains the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and super
sedes all prior agreements and understandings relating to such
subject matter.
21. Fees.
Each party hereto hereby represents and warrants that no
brokers or finders have acted for such party in connection with this
Agreement or the transactions contemplated hereby, and agrees to
indemnify the other for any such fees.
22. Severability.
If any provision of this Agreement or the application of
any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
23. Governing Law; Consent to Jurisdiction.
This Agreement shall be governed by and construed in
accordance with the laws of New York, without regard to the
conflicts of law principles thereof, except as to matters relating
to real estate, in which case Puerto Rico law shall apply. Each
party hereto consents to the jurisdiction of the courts of New York
and of the federal courts in New York in connection with any claim
arising hereunder, and expressly waives and agrees not to raise any
claim that it is not personally subject to the jurisdiction of such
court, that the venue of the suit is improper, that this agreement
may not be litigated in such court, and expressly agrees not to
raise forum non conveniens in any such proceeding. With respect to
any action brought by Buyer against Seller pursuant to
Section 9(a)(i) or (ii), Buyer agrees to bring such action in a New
York court so long as such New York court shall have jurisdiction
(including as a result of the consent to jurisdiction contained
herein) over the parties and the subject matter of the action. Other
actions brought by Buyer and actions brought by Seller may
additionally be brought in any appropriate forum. Each of the
parties agrees that service of process may be made upon it by
certified or registered mail to the address for notices set forth in
this agreement or as otherwise provided by law.
24. Waiver of Trial by Jury.
Seller and Buyer expressly waive all right to trial by jury in
any action, proceeding or counter claim related to this Agreement.
The parties acknowledge that the provisions of this paragraph have
been bargained for and that they have been represented by counsel in
connection therewith.
25. Schedules. Matters disclosed in any Schedule hereto shall
be deemed to have been disclosed in all Schedules hereto. The
Schedules shall be an integral part of this Agreement.
26. Execution by Mr. Ramon Calderon. Mr. Ramon Calderon is
executing this Agreement solely for purposes of confirming his
agreement set forth in Section 15 hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
HARINAS DE PUERTO RICO, INC. HDPR ACQUISITIONS CORP.
By: /s/ Robert Steer By: /s/ Ramon Calderon
Name: Robert Steer Name: Ramon Calderon
Title: Vice President Title: President
SEABOARD CORPORATION
By: /s/ Robert Steer
Name: Robert Steer
Title: Vice President-
Chief Financial Officer
/s/ Ramon Calderon
Ramon Calderon
The following exhibits and schedules have been excluded from
this filing, registrant agrees to furnish supplementally a
copy of any omitted schedule to the SEC upon request:
Exhibit A-Form of Guaranty
Schedule 1(b) (i) to Asset Purchase Agreement-Harinas-Real
Property
Schedule 1(b) (ii) to Asset Purchase Agreement-Harinas-
Machinery & Equipment
Schedule 1(b) (iii) to Asset Purchase Agreement-Harinas-
Contracts
Schedule 1(b) (viii) to Asset Purchase Agreement-Harinas-
Intellectual Property
Schedule 1(b) (xi) to Asset Purchase Agreement-Harinas-Other
Assets
Schedule 1(c) (iii)-Nunez Agreement and Harinas Trademarks
Schedule 3(a) (iv) (D) to Asset Purchase Agreement-Harinas-
Buyer's Obligations
Schedule 4(a) to Asset Purchase Agreement-Harinas-Authority
Schedule 4(d) to Asset Purchase Agreement-Harinas-Compliance
with Applicable Laws
Schedule 4(e) to Asset Purchase Agreement-Harinas-Real
Property
Schedule 4(f) to Asset Purchase Agreement-Harinas-Contracts
Schedule 4(g) to Asset Purchase Agreement-Harinas-Litigation
Schedule 4(h) to Asset Purchase Agreement-Harinas-
Intellectual Property
Schedule 4(j) to Asset Purchase Agreement-Harinas-Taxes
Schedule 4(k) to Asset Purchase Agreement-Harinas-Operation
since Balance Sheet
Schedule 4(I) to Asset Purchase Agreement-Harinas-
Availability of Assets and Legality of Use
Schedule 4(m) to Asset Purchase Agreement-Harinas-
Governmental Permits
Schedule 4(n) to Asset Purchase Agreement-Harinas-Accounts
Receivable; Inventories
Schedule 4(p) to Asset Purchase Agreement-Harinas-
Environmental Matters
Schedule 5(a) to Asset Purchase Agreement-Harinas-Ordinary
Conduct of Business by Seller
Schedule 7(a) to Asset Purchase Agreement-Harinas-Consents
