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EXHIBIT 99.1
ASSET PURCHASE AGREEMENT
AMONG
DEL MONTE CORPORATION
("PURCHASER"),
UNIMARK FOODS, INC.
("SELLER"),
AND
THE UNIMARK GROUP, INC.
("PARENT")
DATED AS OF AUGUST 25, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..........................................................................................15
1.1 Definitions...................................................................................15
1.2 Interpretation................................................................................22
ARTICLE II SALE AND PURCHASE OF ASSETS.........................................................................23
2.1 Purchased Assets..............................................................................23
2.2 Excluded Assets...............................................................................25
2.3 Assumed Obligations...........................................................................25
2.4 No Other Liabilities Assumed..................................................................25
2.5 Transfer and Other Taxes......................................................................26
2.6 Risk of Loss..................................................................................26
ARTICLE III PURCHASE PRICE AND PAYMENT.........................................................................26
3.1 Payment of Purchase Price.....................................................................26
3.2 Purchase Price Adjustment.....................................................................26
3.3 Allocation of Consideration...................................................................29
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT.................................................29
4.1 Organization..................................................................................29
4.2 Due Authorization.............................................................................29
4.3 Consents and Approvals; No Conflicts..........................................................29
4.4 Financial Statements: No Undisclosed Liabilities..............................................30
4.5 Internal Accounting Controls..................................................................30
4.6 No Adverse Effects or Changes.................................................................30
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4.7 Title to Properties...........................................................................31
4.8 Condition and Sufficiency of Purchased Assets.................................................31
4.9 Absence of Unethical Business Practices.......................................................32
4.10 Real Property.................................................................................32
4.11 Equipment; Personal Property..................................................................33
4.12 Inventory.....................................................................................33
4.13 Intellectual Property.........................................................................34
4.14 Contracts.....................................................................................35
4.16 Insurance.....................................................................................36
4.17 Capital Improvements..........................................................................37
4.18 Taxes.........................................................................................37
4.19 No Defaults or Violations.....................................................................38
4.20 Environmental Matters.........................................................................39
4.21 Litigation....................................................................................40
4.22 Customers and Suppliers.......................................................................40
4.23 Information and Records.......................................................................41
4.24 Product Warranties............................................................................41
4.25 Employees.....................................................................................41
4.26 Labor Relations; Compliance...................................................................42
4.27 Brokers.......................................................................................42
4.28 Accuracy of Statements........................................................................43
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................................43
5.1 Due Incorporation.............................................................................43
5.2 Due Authorization.............................................................................43
5.3 Consents and Approvals: No Conflicts. etc.....................................................43
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5.4 Financing.....................................................................................44
5.5 Brokers.......................................................................................44
ARTICLE VI COVENANTS OF SELLER AND PARENT......................................................................44
6.1 Implementing Agreement........................................................................44
6.2 Consents and Approvals........................................................................44
6.3 Preservation of Business......................................................................45
6.4 Access to Information and Facilities..........................................................47
6.5 Supplemental Information......................................................................47
6.6 Tax Matters...................................................................................48
6.7 Cooperation...................................................................................48
6.8 Surveys and Title Insurance...................................................................48
6.9 Destruction or Condemnation of Real Property..................................................49
6.10 No Shopping...................................................................................49
6.11 Use of Name...................................................................................49
6.12 Use of Specifications.........................................................................50
ARTICLE VII COVENANTS OF PURCHASER.............................................................................51
7.1 Implementation Agreement......................................................................51
7.2 Consents and Approvals........................................................................51
7.3 Tax Matters...................................................................................51
7.4 Access........................................................................................51
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER..................................................52
8.1 Warranties True as of Both Present Date and Closing Date......................................52
8.2 Compliance with Agreements and Covenants......................................................52
8.3 Consents and Approvals........................................................................52
8.4 No Material Adverse Change....................................................................52
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8.5 Actions or Proceedings........................................................................52
8.6 Financing.....................................................................................52
8.7 Environmental Report..........................................................................52
8.8 Title Commitment..............................................................................53
8.9 Removal of Signs..............................................................................53
8.10 Renewal of Agreement..........................................................................53
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND PARENT............................................53
9.1 Warranties True as of Both Present Date and Closing Date......................................53
9.2 Compliance with Agreements and Covenants......................................................53
9.3 Actions or Proceedings........................................................................53
ARTICLE X EMPLOYEE MATTERS.....................................................................................54
10.1 Employees.....................................................................................54
ARTICLE XI CLOSING.............................................................................................54
11.1 Closing.......................................................................................54
11.2 Deliveries by Seller and Parent...............................................................54
11.3 Deliveries by Purchaser.......................................................................56
ARTICLE XII TERMINATION........................................................................................57
12.1 Termination...................................................................................57
12.2 Effect of Termination.........................................................................57
ARTICLE XIII INDEMNIFICATION...................................................................................57
13.1 Survival......................................................................................57
13.2 Indemnification by Seller and Parent..........................................................58
13.3 Limitations on Certain Claims for Indemnification.............................................58
13.4 Indemnification by Purchaser..................................................................59
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13.5 Notice of Claims: Assumption of Defense.......................................................59
13.6 Settlement or Compromise......................................................................60
13.7 Failure of Indemnifying Person to Act.........................................................60
13.8 Right of Set Off..............................................................................60
13.9 Effect of Negligence..........................................................................61
ARTICLE XIV COVENANT NOT TO COMPETE............................................................................61
14.1 Covenant......................................................................................61
14.2 Definition of "Customer"......................................................................62
14.3 Territory.....................................................................................62
14.4 Enforceability................................................................................62
14.5 Severability..................................................................................62
ARTICLE XV MISCELLANEOUS.......................................................................................63
15.1 Expenses......................................................................................63
15.2 Amendment.....................................................................................63
15.3 Notices.......................................................................................63
15.4 Effect of Investigation.......................................................................65
15.5 Waivers.......................................................................................65
15.6 Assignment....................................................................................65
15.7 No Third Party Beneficiaries..................................................................65
15.8 Publicity.....................................................................................65
15.9 Further Assurances............................................................................65
15.10 Severability..................................................................................66
15.11 Remedies Cumulative...........................................................................66
15.12 Entire Understanding..........................................................................66
15.13 Applicable Law................................................................................66
15.14 Counterparts..................................................................................66
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EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement and
Confirmatory Assignment
Exhibit B Form of Bill of Sale and Confirmatory Assignment
Exhibit C Form of License Agreement
Exhibit D Form of Supply Agreement
Exhibit E Form of Transition Services Agreement
Exhibit F Matters to be Covered by Opinion of Seller's and
Parent's Counsel
Exhibit G Matters to be Covered by Opinion of Purchaser's
Counsel
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of August 25, 2000, by and
among Del Monte Corporation, a New York corporation ("Purchaser"), The UniMark
Group, Inc., a Texas corporation ("Parent") and UniMark Foods, Inc., a Texas
corporation and wholly owned subsidiary of Parent ("Seller").
WHEREAS, Purchaser desires to purchase from Seller and Seller desires
to sell to Purchaser, for an aggregate consideration of US$14,500,000, the
Purchased Assets (as defined below), upon and subject to the terms and
conditions set forth or referred to in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
warranties, representations, covenants and agreements herein contained, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
"Acquired Contracts and Permits" shall have the meaning
provided in Section 2.1(e).
"Act" means the Federal Food, Drug and Cosmetic Act, as
amended.
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"Affiliate" means, with respect to any Person, each other
Person that directly or indirectly (through one or more intermediaries or
otherwise) controls, is controlled by, or is under common control with such
Person.
"Agreement" means this Asset Purchase Agreement, including all
exhibits and schedules hereto, as it may be amended from time to time in
accordance with its terms.
"Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement between Purchaser and Seller to be dated the Closing Date,
in the form attached hereto as Exhibit A.
"Assumed Obligations" means the obligations assumed pursuant
to Section 2.3.
"Business" means the business of selling processed fruit
products (including the Products but excluding any juices), whether packaged in
cans, glass, plastic or any other container, to retail outlets (including
grocery, health food, club, consumer mass merchandise and drug stores, military
commissaries and similar channels) and through vending, in the Western
Hemisphere (North America, Central America and South America), excluding the
business conducted by Seller, Parent or any of their Affiliates, wherever
located, of selling such products in their food service and industrial market
segments (other than through vending).
"Business Day" means any day of the year other than (i) any
Saturday or Sunday or (ii) any other day on which banks located in Dallas, Texas
or San Francisco, California generally are closed for business.
"Cash" means all cash, certificates of deposits, bank deposits
and other cash equivalents, together with all accrued but unpaid interest
thereon.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any successor statutes
and any regulations promulgated thereunder.
"Claim Holdback Amount" means US$100,000.
"Closing" means the consummation of the transactions
contemplated herein in accordance with Article XI.
"Closing Date" means the date on which the Closing occurs or
is to occur.
"Closing Claim Accounting" shall have the meaning provided in
Section 3.2.
"Closing Claim Statement" shall have the meaning provided in
Section 3.2.
"Closing Inventory Statement" shall have the meaning provided
in Section 3.2.
"Code" means the United States Internal Revenue Code of 1986,
as amended.
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"Confidential Information" means all Information and Records
and Intellectual Property that are not and have not become ascertainable or
obtainable from public or published information.
"Contract" means any contract, agreement, instrument, lease,
commitment, understanding, sales order, purchase order, plan, permit or license,
whether written or verbal, which is intended or purports to be binding and
enforceable.
"Customer" shall have the meaning provided in Section 14.2.
"Employees" shall have the meaning provided in Section 4.25.
"Employee Liabilities" means any cost, liabilities, or
obligations relating to any (a) Law relating to employees, including laws
relating to concerted activity, discrimination, hours, occupational,
immigration, health and safety, wages, and the withholding of Taxes, (b)
collective bargaining agreement, (c) compensation owed to employees, including
salaries, wages, and bonuses, (d) employee disabilities, including disabilities
relating to accidents, exposure to harmful conditions, injuries, sickness, and
torts, (e) employment contracts, whether written or oral, (f) employment
discrimination, (g) employee benefit plans, (h) employee fringe benefits, (i)
employee insurance coverage, (j) compensation, including any change of control
agreements, (k) health and safety, (l) pension plans, (m) plant closings or mass
layoffs, (n) retiree medical, (o) severance pay, (p) unfair labor practices, (q)
vacation pay, (r) unemployment benefits, (s) wage and hour laws, (t) workers'
compensation, (u) wrongful discharge and (v) provision of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended.
"Environmental Claims" means any claims, demands, causes of
action, judgments and litigation made or brought against Purchaser, Seller,
Parent or any of their Affiliates, relating to the violation of any
Environmental and Health and Safety Law or Environmental Health and Safety
Permit, except to the extent such violation arises out of the operation of the
Business after the Closing Date.
"Environmental and Health and Safety Law" means any federal,
state, local or foreign statute, code, ordinance, rule, regulation, policy,
guideline, permit, consent, approval, license, judgment, order, writ, decree,
common law, injunction or other authorization in effect on the date hereof or at
a previous time applicable to operation of the Business relating to (a)
emissions, discharges, releases or threatened releases of Hazardous Materials
into the natural environment, including into ambient air, soil, sediments, land
surface or subsurface, buildings or facilities, surface water, groundwater,
publicly-owned treatment works, septic systems or land; (b) the generation,
treatment, storage, disposal, use, handling, manufacturing, transportation or
shipment of Hazardous Materials; (c) occupational health and safety; or (d)
otherwise relating to the pollution of the environment, solid waste handling
treatment or disposal.
"Environmental Health and Safety Permit" means any Permit
required by or pursuant to any applicable Environmental and Health and Safety
Law.
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"Environmental Health and Safety Warranties" means the
representations and warranties in Section 4.20.
"Equipment" shall have the meaning provided in Section 2.1(d).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Assets" shall have the meaning provided in Section
2.2.
"Excluded Obligations" shall have the meaning provided in
Section 2.4.
"GAAP" means generally accepted accounting principles, as
recognized by the U.S. Financial Accounting Standards Board (or any generally
recognized successor).
"Governmental Authority" means any national, state, county or
municipal government, domestic or foreign, any agency, board, bureau,
commission, court, department or other instrumentality of any such government,
or any arbitrator in any case that has jurisdiction over the Business, Purchaser
or Seller or any of their respective properties or assets.
"Hazardous Material" means (a) any "hazardous substance," as
defined by CERCLA; (b) any "hazardous waste" or "solid waste," in either case as
defined by the Resource Conservation and Recovery Act, as amended; (c) any
solid, hazardous, dangerous or toxic chemical, material, waste or substance,
within the meaning of and regulated by any Environmental and Health and Safety
Law; (d) any radioactive material, including any naturally occurring radioactive
material, and any source, special or byproduct material as defined in 42 U.S.C.
2011 et seq. and any amendments or authorizations thereof; (e) any
asbestos-containing materials in any form or condition; (f) any polychlorinated
biphenyls in any form or condition; (g) petroleum, petroleum hydrocarbons, or
any fraction or byproducts thereof; (h) any air pollutant designated by the U.S.
Environmental Protection Agency as authorized by the Clean Air Act; or (i) any
heavy metals.
"ICMOSA" means Industrias Citricolas De Montemorelos S.A. De
C.V., a corporation organized and existing under the laws of Mexico.
"Identified Contracts" shall have the meaning set forth in
Section 4.14.
"Indemnified Person" means the Person or Persons entitled to,
or claiming a right to, indemnification under Article XIII.
"Indemnifying Person" means the Person or Persons claimed by
the Indemnified Person to be obligated to provide indemnification under Article
XIII.
"Independent Accountants" shall have the meaning provided in
Section 3.2.
"Information and Records" shall have the meaning provided in
Section 2.1(f).
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"Intellectual Property" means United States and foreign
patents (including divisionals, continuations, continuations-in-part,
provisionals, reissues and re-examinations thereof) and patent applications;
registered and unregistered trade names, trademarks, service names and service
marks (and applications for registration of the same) and all goodwill
associated therewith; Internet domain names and websites; copyrights, copyright
registrations (and applications for the same) and copyrightable material; trade
secrets, shop rights, mask works, firmware, Internet domain names, computer data
(including formulations and analyses), computer software (in source code and
object code form) and all related programming, user and systems documentation;
inventions, processes and designs (whether or not patentable or reduced to
practice); all formulas, recipes, specifications, processes, know-how and
show-how; and all other intangible assets, properties and rights.
"Inventory" shall have the meaning provided in Section 2.1(c).
"Inventory Accounting" shall have the meaning provided in
Section 3.2.
"Inventory Adjustment" shall have the meaning provided in
Section 3.2.
"Inventory Holdback Amount" means US$900,000.
"Law" means any law (including common law), statute,
regulation, ordinance, rule, order, decree, judgment, consent decree, settlement
agreement or governmental requirement enacted, promulgated, entered into, agreed
or imposed by any Governmental Authority, including any Environmental and Health
and Safety Law.
"License Agreement" means the License Agreement between
Purchaser and Seller to be dated the Closing Date, in the form attached hereto
as Exhibit C.
"Licensed Intellectual Property" shall have the meaning
provided in Section 4.13.
"Lien" means any lien, mortgage, security interest, pledge,
deposit, restriction, burden, encumbrance, rights of a vendor under any title
retention or conditional sale agreement, or lease or other arrangement
substantially equivalent thereto.
"Loss" or "Losses" means any and all liabilities, losses
(including any diminution in value), costs, claims, damages, penalties and
expenses (including attorneys' fees and expenses and costs of investigation and
litigation), whether or not involving any third-party claim. In the event any of
the foregoing are indemnifiable hereunder, the terms "Loss" and "Losses" shall
also include any and all reasonable attorneys' fees and expenses and costs of
investigation and litigation incurred by the Indemnified Person in enforcing
such indemnity.
"Major Customers" shall have the meaning provided in Section
4.22(a)(i).
"Major Suppliers" shall have the meaning provided in Section
4.22(a)(ii).
"Material Adverse Change" means a change (or circumstance
involving a prospective change) in the business, operations, assets,
liabilities, results of operations, cash
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flows, condition (financial or otherwise) or prospects of the Business or the
Purchased Assets that results in a Material Adverse Effect.
"Material Adverse Effect" means (a) when used with respect to
the Business, a result or consequence that would materially adversely affect the
condition (financial or otherwise), assets, liabilities, results of operations
or business of the Business or the aggregate value of the Purchased Assets,
would materially impair Seller's ability to own or operate the Business or the
Purchased Assets, or would impair the ability of Seller or Parent to perform its
obligations hereunder or consummate the transactions contemplated hereby or
prevent or materially delay the performance of this Agreement; and (b) when used
with respect to Purchaser, a result or consequence that would materially
adversely affect its condition (financial or otherwise), assets, liabilities,
results of operations or business or the aggregate value of its assets, would
materially impair its ability to own, hold, develop and operate its assets, or
would impair its ability to perform its obligations hereunder or consummate the
transactions contemplated hereby or prevent or materially delay the performance
of this Agreement.
"Owned Intellectual Property" shall have the meaning provided
in Section 2.1(a).
"Parent" shall have the meaning provided in the preamble.
"Parent Financial Statements" means the unaudited consolidated
financial statements of Parent as of June 30, 2000, and the audited consolidated
financial statements of Parent as of December 31, 1999, and December 31, 1998,
including all notes thereto, which shall be attached hereto as Schedule 4.4(a),
consisting of the balance sheets of Parent at such dates and the related
statements of income and cash flows of Parent for the fiscal periods then ended.
"Permits" means permits, tariffs, authorizations, licenses,
certificates, variances, interim permits, approvals, franchises and rights under
any Law or otherwise required by any Governmental Authority and any applications
for the foregoing, including any Environmental Health and Safety Permit.
"Permitted Exceptions" means (i) general real estate Taxes for
the year 1999 and subsequent years, to the extent not yet due and payable, (ii)
those Liens set forth on Schedule 4.7 and (iii) such other matters as
specifically identified by Purchaser as being acceptable in writing and
delivered no later than ten days after delivery of the surveys and title
commitments pursuant to Section 6.8.
"Person" means any natural person, corporation, company,
limited or general partnership, joint stock company, joint venture, association,
limited liability company, trust, bank, trust company, land trust, business
trust or other entity or organization, whether or not a Governmental Authority.
"Products" shall have the meaning provided in the Supply
Agreement.
"Purchase Price" shall have the meaning provided in Section
3.1.
"Purchased Assets" shall have the meaning provided in Section
2.1.
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"Purchaser" shall have the meaning provided in the preamble.
"Purchaser Consents" shall have the meaning provided in
Section 5.3(a).
"Purchaser Indemnified Party" shall have the meaning provided
in Section 13.2.
"Real Property" shall have the meaning provided in Section
2.1(b).
"Related Agreement" means any Contract which is, or is to be,
entered into at the Closing or otherwise pursuant to this Agreement. The Related
Agreements executed by a specified Person shall be referred to as "such Person's
Related Agreements," "its Related Agreements" or another similar expression.
"Seller" shall have the meaning provided in the preamble.
"Seller Consents" shall have the meaning provided in Section
4.3(a).
"Seller Financial Statements" means the unaudited financial
statements of Seller as of June 30, 2000, December 31, 1999, and December 31,
1998, which are attached hereto as Schedule 4.4(b).
"Seller Group" means Seller and all of its Affiliates having
any right, title or interest in or to the Business or the Purchased Assets.
"Specifications" shall have the meaning provided in the Supply
Agreement.
"Supply Agreement" means the Supply Agreement among Purchaser,
Seller and ICMOSA to be dated the Closing Date, in the form attached hereto as
Exhibit D.
"Tax Returns" means all returns, declarations, reports, claims
for refunds, information returns, statements and other forms required to be
filed with respect to any Taxes, including any Schedule or attachment thereto,
and including any amendments or supplements thereof.
"Tax Statute of Limitations Date" means the close of business
on the 90th day after the expiration of the applicable statute of limitations
with respect to Taxes, including any extensions thereof (or if such date is not
a Business Day, the next Business Day).
"Tax Warranties" means the representations and warranties in
Section 4.18.
"Taxes" means taxes of any kind, levies or other like
assessments, customs, duties, imposts, charges or fees, including income, gross
receipts, ad valorem, value added, excise, real or personal property, asset,
sales, use, federal royalty, license, payroll, transaction, capital, net worth
and franchise taxes, estimated taxes, withholding, employment, social security,
workers compensation, utility, severance, production, unemployment compensation,
occupation, premium, windfall profits, transfer and gains taxes or other
governmental taxes imposed or payable to the United States or any state, local
or foreign governmental subdivision or agency
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thereof, and in each instance such term shall include any interest, penalties or
additions to tax attributable to any such Tax, including penalties for the
failure to file any Tax Return or report.
"Territory" shall have the meaning provided in Section 14.3.
"Title and Authorization Warranties" means the representations
and warranties in Sections 4.1, 4.2, 4.3, 4.7 and 4.13.
"Title Insurer" means Chicago Title Company, 909 Fannin, Suite
200, Houston, Texas 77010.
"Transition Services Agreement" means collectively the
Transition Services Agreement between Purchaser and Parent to be dated the
Closing Date and the Transition Services Agreement (Food Service Distribution)
between Purchaser and Parent to be dated the Closing Date, in the forms attached
hereto as Exhibit E.
"Unpermitted Exceptions" shall have the meaning provided in
Section 6.8(c).
1.2 Interpretation.
The headings preceding the text of Articles and Sections
included in this Agreement and the headings to Schedules attached to this
Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Reference to any Law means
such Law as amended, modified, codified, replaced or re-enacted, in whole or in
part, and in effect on the date hereof, including rules, regulations,
enforcement procedures and any interpretations promulgated thereunder.
Underscored references to Articles, Sections, clauses, Exhibits or Schedules
shall refer to those portions of this Agreement, and any underscored references
to a clause shall, unless otherwise identified, refer to the appropriate clause
within the same Section in which such reference occurs. The use of the terms
"hereunder," "hereof," "hereto" and words of similar import shall refer to this
Agreement as a whole and not to any particular Article, Section or clause of or
Exhibit or Schedule to this Agreement.
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ARTICLE II
SALE AND PURCHASE OF ASSETS
2.1 Purchased Assets.
Subject to the terms and conditions of this Agreement, at and as of the
Closing, Seller shall sell, assign, convey, transfer and deliver, or Parent
shall or shall cause its other Affiliates in the Seller Group to sell, assign,
convey, transfer and deliver, to Purchaser, and Purchaser shall purchase,
acquire and take assignment and delivery of all of the following:
(a) Intellectual Property. All interests of Seller and the
Seller Group in and to (i) the names, "Sunfresh," "Fruits of Four
Seasons," "Fruit Made Easy" and "Flavor Fresh" and all variants thereof
and all rights to the use of such names and variants thereof, including
all goodwill associated therewith, (ii) all Internet domain names and
websites using such names, including the "sunfreshfruit.com" website,
(iii) all stationery, forms, labels, packaging (including designs,
trade names and trade dress), shipping materials, catalogs, brochures,
art work, photographs and advertising and promotional materials, in
each case including all paper and electronic copies thereof, relating
to the Business, (iv) all Uniform Product Codes relating to the
Products, (v) all formulas, recipes, Specifications, processes,
know-how and show-how relating to the Products, and (vi) all
Intellectual Property related thereto or otherwise used or held for use
in connection with the processing or sale of the Products in the
Business (collectively, the "Owned Intellectual Property"), including
the Owned Intellectual Property set forth on Schedule 2.1(a);
(b) Real Property. All of the real property set forth on
Schedule 2.1(b), together with (i) all buildings, fixtures, and
improvements located thereon or attached thereto, (ii) all easements,
franchises, licenses, permits, and rights-of-way appurtenant to or
otherwise benefiting the Real Property or the buildings, fixtures, or
improvements located thereon, (iii) all development rights, water
rights, utility capacity reservations, and other rights and
appurtenances affecting or pertaining to the Real Property or the
buildings, fixtures, or improvements located thereon, and (iv) all
leases affecting or pertaining to the Real Property or the buildings,
fixtures, or improvements located thereon (collectively, the "Real
Property"), together with all deposits and prepayments related thereto;
(c) Inventory. All of the Products (including all finished
goods inventories, packaging, labeling and other supplies and materials
that are used or held for use in connection with the sale or
distribution of the Products in the Business) that, as of the Closing
Date and in the ordinary course of business consistent with past
practice, (i) are saleable, (ii) are of merchantable quality, (iii) are
fit and usable for their apparently intended purpose, (iv) except as
set forth on Schedule 4.12(b), have expiration dates not less than 90
days after the Closing Date, and (v) are located on the Real Property
or such other real property in Texas (under arrangements satisfactory
to Purchaser providing title to an possession of the Inventory, free
and clear of any Liens or other interests or rights of
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any third party) as mutually agreed by Purchaser and Seller
(collectively, the "Inventory"), including the Inventory set forth on
Schedule 2.1(c), which schedule shall include the item numbers,
descriptions, values and locations of such Inventory, all as determined
in accordance with this Agreement, as of the date hereof;
(d) Equipment; Personal Property. All machinery, vehicles,
equipment, tools, dyes, castings, fixed assets,
plant-under-construction, furniture, tools, spare parts, maintenance
equipment, refrigeration equipment, materials, computers, printers,
servers and other items of personal property of every kind and
description, whether owned or leased, that are used or held for use in
connection with the operation of the Real Property in the Business
(collectively, the "Equipment"), including the Equipment set forth on
Schedule 2.1(d);
(e) Contracts and Permits. All rights and benefits in (i) each
written and oral agreement, arrangement, commitment, contract,
commitment, personal property lease, and option that principally
relates to the Business, (ii) any agreement relating to the license of
any of the Owned Intellectual Property, (iii) all written and oral
agreements, arrangements, commitments, contracts, leases, and options
entered into between the date hereof and the Closing Date in the
ordinary course of business consistent with past practice and this
Agreement, that principally relate to the Business, and that are not
otherwise required to be listed on any schedule hereto pursuant to any
other provisions of this Agreement, and (iv) all Permits which
principally relate to the Business (collectively, the "Acquired
Contracts and Permits"), including the Acquired Contracts and Permits
set forth on Schedule 2.1(e);
(f) Information and Records. All information and records
principally relating to the Purchased Assets or the Business, including
all books, records, files, databases, plans, specifications, technical
information, confidential information, price lists, promotional
materials, advertising copy and data, marketing research and
information, competitive analyses, sales records, service records,
supplier lists, customer lists, sales order files, engineering data
files, purchase order files, supplier files, other supplier
information, customer files, other customer information, plats and
surveys of the Real Property, plans and designs of buildings,
structures, fixtures and equipment, environmental control, monitoring
and test records and all other proprietary information that is used or
held for use in connection with the Purchased Assets described in this
Section 2.1 or otherwise principally related to the processing or sale
of the Products in the Business that are in Seller's or any of the
Seller Group's care, custody or control (collectively, the "Information
and Records"), including the Information and Records set forth on
Schedule 2.1(f); and
(g) Other Assets. All product, equipment and other warranties,
claims and rights to insurance proceeds and other causes of action
benefiting the Purchased Assets or the Business.
All of the foregoing assets described in this Section 2.1 are
referred to herein collectively as the "Purchased Assets." Seller
shall, or Parent shall or shall cause its other
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Affiliates in the Seller Group to, sell, convey, transfer, assign and
deliver the Purchased Assets to Purchaser free and clear from any
Liens, other than Permitted Exceptions. Anything in this Agreement to
the contrary notwithstanding, this Agreement shall not constitute an
agreement to assign any Contract or Permit or any claim or right or any
benefit or obligation thereunder or resulting therefrom if an
assignment thereof, without the consent of a third party thereto, would
constitute a breach or violation thereof and if such consent is not
obtained at or prior to the Closing.
2.2 Excluded Assets.
Seller and the Seller Group shall retain all of their assets that are
not Purchased Assets (collectively, the "Excluded Assets"), including:
(a) Cash. All Cash of Seller;
(b) Notes. All notes receivable;
(c) Accounts Receivable. All accounts receivable of Seller; and
(e) Other Assets. Any assets relating principally to the businesses
previously or currently owned by Seller or Parent other than the Business,
including all assets relating principally to the procurement, manufacturing,
processing and packaging of the Products, and not otherwise described in Section
2.1.
2.3 Assumed Obligations.
On the terms and subject to the conditions set forth in this Agreement,
on the Closing Date, Purchaser shall assume the executory obligations of Seller
and the Seller Group not required to be performed prior to or as of the Closing
Date under the written Acquired Contracts and Permits that Purchaser acquires
(collectively, the "Assumed Obligations").
2.4 No Other Liabilities Assumed.
Notwithstanding anything in this Agreement to the contrary, except as
specifically set forth in Section 2.3, neither Purchaser nor any of its
Affiliates shall assume or otherwise be liable in respect of, or be deemed to
have assumed or otherwise be liable in respect of, any debt, claim, guarantee,
obligation or other liability of Seller or any of the Seller Group whatsoever,
whether accrued or contingent, known or unknown (the "Excluded Obligations"),
including any debt, claim, liability or obligation (a) under the Excluded
Assets, (b) relating to any Environmental Claims and any of the matters
described on Schedule 4.20 and the attachments thereto, (c) relating to any
Employee Liabilities, (d) relating to Taxes (other than Taxes on the Real
Property attributable to periods after the Closing Date), (e) relating to any
matters set forth on Schedule 4.21, (f) relating to any Product deemed
unsaleable in the possession of any retailer and returned by such retailer
within three months after the Closing Date, or (g) relating to or arising from
the ownership or use of the Purchased Assets or the operation or conduct of the
Business on or prior to the Closing Date. Seller shall, or Parent shall or shall
cause its other Affiliates in the Seller Group to, pay when due or otherwise
discharge the Excluded Obligations.
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2.5 Transfer and Other Taxes.
At the Closing, Seller shall pay all Taxes and recording charges in
connection with the conveyance, assignment, or transfer of the Purchased Assets
to Purchaser. If the final amount of any such Tax or recording charge is not
determinable on the Closing Date, Seller shall pay such Tax or recording charge
on the Closing Date based upon the estimated amount thereof and shall thereafter
pay any balance of such Tax or recording charge as soon as it becomes
determinable. In addition, Seller and Parent shall be jointly and severally
responsible for and shall pay and indemnify and reimburse Purchaser against and
for any subsequent Taxes, not quantified at Closing, that are due and owing for
any Tax periods prior to the Tax period during which the Closing Date occurs
which are assessed or reassessed in respect of the Purchased Assets after the
Closing Date due to changes in land use or for any other reason, including
interest or penalties thereon.
2.6 Risk of Loss.
All risk of loss with respect to the Purchased Assets and the Business
on or before the Closing Date shall remain the sole risk of Seller.
ARTICLE III
PURCHASE PRICE AND PAYMENT
3.1 Payment of Purchase Price.
The total purchase price for the Purchased Assets shall be an amount
equal to US$14,500,000, subject to the adjustment set forth in Section 3.2 (the
"Purchase Price"). On the Closing Date, in consideration for the sale of the
Purchased Assets by Seller, Purchaser shall assume the Assumed Obligations and
pay by electronic transfer to such account or accounts as Seller shall specify
to Purchaser in writing prior to the Closing Date Cash in an amount equal to
US$14,500,000, less the sum of (i) the Inventory Holdback Amount, (ii) the Claim
Holdback Amount, and (iii) any reasonable amounts withheld in accordance with
Section 6.8. Purchaser shall have no obligation as to the allocation, if any, of
the Purchase Price among the Seller Group.
3.2 Purchase Price Adjustment.
The Purchase Price shall be subject to adjustment after the Closing
(the "Inventory Adjustment"), in accordance with the following procedure:
(a) On or immediately after the Closing Date, Purchaser and Seller
shall jointly conduct a physical count of the Inventory as of the close of
business on the Closing Date (the "Inventory Accounting"). Within fifteen (15)
days after the Closing Date, Seller shall prepare and deliver to Purchaser a
statement audited by Seller's independent auditors (as such audited statement
may be adjusted pursuant to this Section 3.2, the "Closing Inventory
Statement"), that shall include the item numbers, descriptions, values and
locations of such Inventory, all as determined in accordance with this
Agreement, as of the Closing Date; provided that all of the Inventory set forth
on the Closing Inventory Statement shall (i) meet the elements of the definition
of Inventory set forth in Section 2.1(c), (ii) meet the requirements set forth
in
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Section 4.12, and (iii) be valued in accordance with the values of the Inventory
set forth on Schedule 2.1(c). Schedule 3.2(a) sets forth, for each type of
Inventory to be purchased pursuant to the terms of this Agreement, the maximum
quantity Purchaser shall be obligated to purchase. Notwithstanding anything in
this Agreement to the contrary, the Closing Inventory Statement shall not
include any Inventory in excess of the maximum quantity applicable thereto.
(b) Within fifteen (15) days after Seller delivers the Closing
Inventory Statement to Purchaser pursuant to Section 3.2(a), Purchaser may
propose adjustments to the Closing Inventory Statement in a written statement
delivered to Seller. If Purchaser does not propose any adjustments to the
Closing Inventory Statement within such 15-day period, the Closing Inventory
Statement shall be deemed final. If Purchaser does propose any adjustments to
the Closing Inventory Statement, Purchaser and Seller shall use reasonable
efforts to produce a revised Closing Inventory Statement acceptable to both
Purchaser and Seller. If a revised Closing Inventory Statement acceptable to
both Purchaser and Seller is not obtained within fifteen (15) days after
Purchaser delivers its written statement, Purchaser and Seller shall promptly
retain a nationally recognized independent accounting firm (other than KPMG LLP
or Ernst & Young LLP) acceptable to both Purchaser and Seller (the "Independent
Accountants") to resolve any remaining disputes concerning the Closing Inventory
Statement. The Independent Accountants' decision shall be final and binding on
both Purchaser and Seller, and the fees and expenses of the Independent
Accountants shall be borne equally by both parties.
(c) Within five Business Days after the Closing Inventory Statement has
become final and binding upon both Purchaser and Seller pursuant to Section
3.2(b), if, based on the Closing Inventory Statement, the Inventory Accounting
is:
(i) greater than or equal to $6,500,000, Purchaser shall pay
to Seller an amount equal to the Inventory Holdback Amount;
(ii) less than $6,500,000 and greater than or equal to
$5,600,000, Purchaser shall pay to Seller an amount equal to (i) the
Inventory Holdback Amount, less (ii) the difference between $6,500,000
and the Inventory Accounting; or
(iii) less than $5,600,000, Purchaser shall retain the
Inventory Holdback Amount, and Seller shall pay to Purchaser an amount
equal to the difference between $5,600,000 and the Inventory
Accounting; or at Purchaser's option, Purchaser may set-off such amount
against any payment or payments owed to Seller, Parent or any of their
Affiliates by Purchaser or any of its Affiliates pursuant to the Supply
Agreement or otherwise.
(d) Within thirty (30) days after the Closing Date, Purchaser shall
prepare and deliver to Seller a statement (the "Closing Claim Statement"), that
shall include a list of any expenses (the "Closing Claim Accounting") incurred
by Purchaser within such 30-day period (with copies of any corresponding
invoices received by Purchaser from third parties attached) with respect to (i)
repairing or replacing the Equipment set forth on Schedule 3.2(d), to bring such
Equipment into compliance with the representations and warranties of Seller and
Parent set forth in Section 4.8, and (ii) performing any portion of the
environmental remediation on the Real
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Property or testing described on Schedule 3.2(d); provided that Seller is under
no obligation and in no way undertakes to repair or replace such Equipment or
perform such remediation, in whole or in part, within such 30-day period.
(e) Within five Business Days after the Closing Claim Statement has
been delivered by Purchaser pursuant to Section 3.2(d), if, based on the Closing
Claim Statement, the Closing Claim Accounting is:
(i) less than or equal to the Claim Holdback Amount, Purchaser
shall pay to Seller an amount equal to (i) the Claim Holdback Amount,
less (ii) the Closing Claim Accounting; or
(ii) greater than the Claim Holdback Amount, Purchaser shall
retain the Claim Holdback Amount, and Seller shall pay to Purchaser an
amount equal to (i) the Closing Claim Accounting, less (ii) the Claim
Holdback Amount; or at Purchaser's option, Purchaser may set-off such
amount against any payment or payments owed to Seller, Parent or any of
their Affiliates by Purchaser or any of its Affiliates pursuant to the
Supply Agreement or otherwise.
(f) Notwithstanding anything in this Section 3.2 to the contrary, the
obligations of Purchaser and Parent with respect to (i) the Equipment set forth
on Schedule 3.2(d), and (ii) the environmental remediation on the Real Property
described on Schedule 3.2(d) shall not be limited to the Claim Holdback Amount.
(g) Payments due pursuant to this Section 3.2 shall be made by
electronic transfer of immediately available funds to such account or accounts
as Purchaser or Seller, as the case may be, shall specify.
3.3 Allocation of Consideration.
The allocation of the Purchase Price among the Purchased Assets (the
"Allocation") shall be made as reasonably determined by Purchaser consistent
with the requirements of Treas. Reg. Section 1.1060-1T and consented to by
Seller, such consent not to be unreasonably withheld. Schedule 3.3 setting forth
the Allocation shall be delivered by Purchaser to Seller no later than five
Business Days prior to the Closing. Seller shall have two Business Days from
receipt of Schedule 3.3 to notify Purchaser in writing of any objections to the
Allocation. If no written notice is received by Purchaser within such two
Business Days, Seller shall be deemed to have consented to the Allocation as set
forth on Schedule 3.3.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
Seller and Parent jointly and severally represent and warrant to
Purchaser as follows:
4.1 Organization.
Each of Seller and Parent (a) is a corporation, duly organized, validly
existing and in good standing under the laws of its state of incorporation, (b)
has the requisite power and authority to own, lease and operate its properties
and to conduct its business as it is presently being conducted, and (c) is duly
qualified to do business as a foreign corporation, and is in good standing, in
each jurisdiction where the character of the properties owned or leased by it or
the nature of its activities makes such qualification necessary (except where
any failure to be so qualified or to be in good standing would not, individually
or in the aggregate, have a Material Adverse Effect).
4.2 Due Authorization.
Each of Seller and Parent has full power and authority to execute,
deliver and perform this Agreement and its Related Agreements and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance by Seller and Parent of this Agreement and their respective Related
Agreements and the consummation by Seller and Parent of the transactions
contemplated hereby and thereby have been duly and validly approved by Seller's
and Parent's board of directors and, to the extent required by applicable Law or
any agreement, by the sole stockholder of Seller, and no other actions or
proceedings on the part of Seller or Parent or their respective stockholders are
necessary to authorize the execution, delivery and performance by Seller or
Parent of this Agreement, their respective Related Agreements or the
transactions contemplated hereby and thereby. Each of Seller and Parent has duly
and validly executed and delivered this Agreement and has duly and validly
executed and delivered (or prior to or at the Closing will duly and validly
execute and deliver) its Related Agreements. This Agreement constitutes legal,
valid and binding obligations of Seller and Parent, and their respective Related
Agreements upon execution and delivery by Seller and Parent will constitute
legal, valid and binding obligations of Seller and Parent, in each case,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws which affect the enforcement of creditors' rights
generally, by equitable limitations on the availability of specific remedies and
by principles of equity.
4.3 Consents and Approvals; No Conflicts
(a) Except for the consents set forth on Schedule 4.3 (the "Seller
Consents"), no consent, authorization or approval of, filing or registration
with, waiver of any right of first refusal or first offer from, or cooperation
from, any Governmental Authority or any other Person not a party to this
Agreement is necessary in connection with Seller's or Parent's execution,
delivery and performance by Seller or Parent of this Agreement and their
respective Related Agreements or the consummation by Seller or Parent of the
transactions contemplated hereby or thereby, and the assignment of all Acquired
Contracts and Permits and related claims, rights and benefits.
(b) Except as set forth on Schedule 4.3, the execution, delivery and
performance by Seller and Parent of this Agreement and their respective Related
Agreements and the consummation by Seller and Parent of the transactions
contemplated hereby and thereby, including the assignment of all Acquired
Contracts and Permits and related claims, rights and
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benefits, do not and will not (i) violate, in any material respect, any Law
applicable to Seller or Parent, the Business or any of the Purchased Assets;
(ii) violate or conflict with, result in a breach or termination of, constitute
a default or give any third party any additional right (including a termination
right) under, permit cancellation of, result in the creation of any Lien upon
any of the Purchased Assets under, or result in or constitute a circumstance
which, with or without notice or lapse of time or both, would constitute any of
the foregoing under, any Contract to which Seller or Parent is a party or by
which Seller or Parent or any of their respective assets are bound which relates
to the Business and results in a Material Adverse Effect; (iii) permit the
acceleration of the maturity of any indebtedness of Seller or Parent or
indebtedness secured by any of the Purchased Assets; or (iv) violate or conflict
with any provision of any of the articles of incorporation, bylaws or similar
organizational instruments of Seller or Parent.
4.4 Financial Statements: No Undisclosed Liabilities.
(a) Attached hereto as Schedule 4.4(a) are true, accurate and complete
copies of the Parent Financial Statements. The Parent Financial Statements
present fairly the consolidated financial position, assets and liabilities of
Parent as of the dates thereof and the consolidated revenues, expenses, results
of operations and cash flows of Parent for the periods covered thereby, in each
case in conformity with GAAP applied consistently during such periods in
accordance with the past accounting practices of Parent. The Parent Financial
Statements, including the notes thereto, make full and adequate disclosure of,
and provision for, all material obligations and liabilities of Parent and its
subsidiaries, including Seller, as of the dates thereof, to the extent required
by GAAP. The Parent Financial Statements are in accordance with the books and
records of Parent and do not reflect any transactions that are not bona fide
transactions. Information in the Parent Financial Statements with respect to the
Packaged Foods segment of Seller fairly presents, in all material respects, the
information required by GAAP to be disclosed therein with respect thereto.
(b) Attached hereto as Schedule 4.4(b) are true, accurate and complete
copies of the Seller Financial Statements. The Seller Financial Statements are
in conformity with the past accounting practices of Seller. The Seller Financial
Statements are in accordance with the books and records of Seller and do not
reflect any transactions that are not bona fide transactions.
4.5 Internal Accounting Controls.
Seller (a) keeps books, records, and accounts that, accurately, fairly
and in reasonable detail, reflect its assets and transactions and (b) maintains
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are accurately and promptly recorded to permit
the preparation of the Parent Financial Statements and the Seller Financial
Statements, (ii) transactions are executed in accordance with management's
general or specific authorization, (iii) access to its assets is permitted only
in accordance with management's general or specific authorization, and (iv)
comparisons are made between its fixed asset registers and its existing assets
at reasonable intervals and Seller takes appropriate action with respect to any
differences.
4.6 No Adverse Effects or Changes.
Except as set forth on Schedule 4.6, since December 31, 1999, Seller
has conducted the Business in all respects only in the ordinary course and
consistent with past practices. Without
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limiting the foregoing, except as set forth on Schedule 4.6, since December 31,
1999, Seller has not with respect to the Business or the Purchased Assets:
(a) Suffered any Material Adverse Change;
(b) Suffered any material damage, destruction or loss to any of the
Purchased Assets (whether or not covered by insurance);
(c) Taken any action, or entered into or authorized any Contract or
transaction or any amendment or modification to any Contract or transaction,
other than in the ordinary course of business and consistent with past practice;
(d) Sold, transferred, conveyed, assigned or otherwise disposed of any
of its assets, except sales of inventory in the ordinary course of business and
consistent with past practice;
(e) Acquired or leased any assets other than in the ordinary course of
business and consistent with past practice;
(f) Waived, released or canceled any claims against third parties or
debts owing to it or any rights which have any value;
(g) Made any changes in its accounting systems, policies, principles or
practices;
(h) Suffered or permitted the creation of any Lien over any of the
Purchased Assets other than in the ordinary course of business and consistent
with past practice; or
(i) Entered into any transaction or arrangement of any kind, including
transactions or arrangements in the ordinary course of business as contemplated
by Sections 4.6(a)-(h), that (i) requires or reasonably may in the future
require Seller to pay or guarantee amounts or transfer assets or interests
having fair market value in excess of in the aggregate US$5,000, (ii) has a
term, or requires the performance of any obligations by Seller over a period, in
excess of 90 days, or (iii) involves any director, officer or employee of Seller
or any of the respective Affiliates of such individuals or any Affiliate of
Seller.
4.7 Title to Properties.
Except as set forth on Schedule 4.7, Seller is the lawful owner of the
Purchased Assets, free and clear of any Lien, and no Affiliate of Seller has any
interest in the Purchased Assets. Seller has the full right to sell, convey,
transfer, assign and deliver the Purchased Assets to Purchaser, and Seller has
and shall convey good and valid record and equitable title, free and clear of
all Liens (other than Liens which are Permitted Exceptions), to the Purchased
Assets to Purchaser by deeds, bills of sale, certificates of title and
instruments of assignment and transfer effective to vest such title in and
warrant such title to Purchaser.
4.8 Condition and Sufficiency of Purchased Assets.
Except as set forth on Schedule 4.8, all of the tangible Purchased
Assets, whether real or personal, owned or leased, have been well maintained,
are in good operating condition and repair (with the exception of normal wear
and tear) and are suitable for the purposes for which they are
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intended. The Purchased Assets constitute all the assets, properties and rights
that are required for or (except for the Excluded Assets and inventory sold in
the ordinary course of business) currently used in connection with the conduct
of the Business as it is presently conducted and has been conducted since
December 31, 1999.
4.9 Absence of Unethical Business Practices.
Neither Seller, Parent nor any of their Affiliates has directly or
indirectly given or agreed to give any gift or similar benefit to any customer,
subcontractor, supplier, government employee, or other Person who was or is in a
possible position to help or hinder the Business, which gift or benefit (a)
might subject Seller to any damages or penalties in any civil or criminal
proceeding, or (b) might have had, singly or in the aggregate, a Material
Adverse Effect if not given or continued.
4.10 Real Property.
(a) Schedule 2.1(b) sets forth true, accurate, complete and insurable
legal descriptions of all of the Real Property and a description of any and all
buildings, plants, facilities, installations, fixtures and structures situated
or located thereon. Seller shall deliver to Purchaser prior to the Closing Date
surveys for the Real Property, together with copies of any title insurance
policies, title opinions or reports of any insurance companies, attorneys,
engineers, environmental consultants, insurance consultants or other consultants
in the possession of Seller, Parent or any of their Affiliates relating to any
of the Real Property.
(b) The activities carried on in all buildings, plants, facilities,
installations, fixtures and other structures or improvements included as part
of, or located on or at, the Real Property and the buildings, plants,
facilities, installations, fixtures and other structures or improvements
themselves, are not in violation of, or in conflict with, any applicable zoning
or building law or, except as set forth on Schedules 2.1(b) and 4.20, any
Environmental and Health and Safety Law or any other similar Law. There are no
non-conforming uses, zoning or building code variances or any other use
restrictions (whether written or oral) or special permits not set forth in the
local zoning laws and building codes with respect to the Real Property. Schedule
2.1(b) sets forth the zoning classifications applicable to the Real Property and
describes all variances, use restrictions or special permits applicable to the
Real Property. Seller has delivered to Purchaser or made available for
inspection all agreements, documents or other writings, and has no knowledge of
any oral arrangement, pertaining to any such variance, use restriction or other
special permit.
(c) Except as set forth on Schedules 2.1(b) and 4.20, no asbestos,
asbestos-containing materials, PCB compounds or other pollutants, contaminants
or Hazardous Materials have been used in the construction or repair of, or any
alterations or additions to, or are otherwise located on, any portion of the
Real Property.
(d) The Real Property has adequate parking and is adequately serviced
by all utilities necessary for the effective operation of the Business and has
not, since December 31, 1999, experienced any material interruption in the
delivery of adequate quantities of any utilities (including electricity, natural
gas, potable water, water for cooling or similar purposes and fuel oil) or other
public services (including sanitary and storm sewer services) required by Seller
to operate the Business.
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(e) Except as set forth on Schedule 2.1(b), there is no pending,
threatened or proposed proceeding or governmental action to modify the zoning
classification of, or to condemn or take by the power of eminent domain (or to
purchase in lieu thereof), or to classify as a landmark, or to impose special
assessments on, or otherwise to take or restrict in any way the right to use,
develop or alter, all or any part of the Real Property. All special assessments
imposed on the Real Property have been paid.
(f) Except as set forth on Schedule 2.1(b), no work has been performed
or is in progress at, and no materials have been furnished to Seller for use at,
any of the Real Property that may give rise to any mechanic's, materialmen's or
other Lien against the Real Property which could in the aggregate exceed
US$5,000.
(g) Neither Seller nor Parent has received any notice of any, and there
exists no, dispute, claim, event of default or event which constitutes or would
constitute (with notice or lapse of time or both) a default by Seller or Parent
under any easement appurtenant to or otherwise benefiting the Real Property or
the buildings, fixtures, or improvements located thereon.
(h) The Real Property has not been classified under any designation
under applicable law to obtain a special low ad valorem tax rate or receive
either an abatement or deferment of ad valorem taxes which, in such case, will
result in any "green acres," catch-up or other deferred ad valorem taxes in
order to recover the amounts previously abated or deferred.
(i) Except as set forth in Schedules 2.1(b) and 4.20 no above-ground or
underground storage tanks or other containment facilities of any kind containing
any Hazardous Materials are or have ever been located on or under the Real
Property.
4.11 Equipment; Personal Property.
Schedule 2.1(d) sets forth a true, accurate and complete list of all of
the Equipment (i) having an original acquisition cost of US$1,000 or more, other
than items acquired by Seller in the ordinary course of business from the date
hereof through the Closing Date (and Seller will identify in writing to
Purchaser, prior to the Closing, each item so acquired having an original
acquisition cost of US$1,000 or more), and (ii) that is leased by Seller, Parent
or any of their Affiliates. All of the Equipment and all of the personal
property leased by Seller, Parent or any of their Affiliates are presently
utilized in the ordinary course of business. Seller has delivered to Purchaser
true, accurate and complete copies of all personal property leases as amended or
modified.
4.12 Inventory.
Except as set forth on Schedule 4.12(a), each item of the Inventory (i)
is saleable, is of merchantable quality and is fit and usable for its apparently
intended purpose in present condition and in the ordinary course of business,
(ii) is not obsolete, (iii) has not been pledged or otherwise given as
collateral, (iv) is not being held on assignment or consignment, (v) has not
been damaged during storage or handling by Seller, Parent or any of their
Affiliates or their respective agents or consignees, (vi) fully complies with
the Specifications, (vii) is not adulterated or misbranded within the meaning of
the Act and is not an article which may not, under the provisions of section
404, 405 or 512 of the Act, be introduced into interstate commerce, (viii)
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has been stored, under sanitary conditions (and, with respect to glass-packaged
inventory, under appropriate cold storage) and in strict compliance with all
United States, Mexican and other federal, state and local laws, regulations and
guidelines applicable to the production and distribution of food products, and
(ix) has adequate packaging for normal shipping and storage. The Inventory was
acquired by Seller directly from ICMOSA, and no other Person has ever owned such
Inventory. Schedule 2.1(c) sets forth a true, accurate and complete list of the
item number, description, value and location of all of the Inventory as of the
date hereof. Schedule 4.12(b) sets forth a true, accurate and complete list of
all of the Inventory that have expiration dates less than ninety (90) days after
the Closing Date.
4.13 Intellectual Property.
Schedule 2.1(a) sets forth a true, accurate and complete list of all
Owned Intellectual Property. Schedule 2.1(g) sets forth a true, accurate and
complete list of all licenses relating to, in whole or in part, the Owned
Intellectual Property. Schedule 4.13 sets forth a complete list of all
Intellectual Property licensed to Seller under such licenses (the "Licensed
Intellectual Property"). Except as set forth on Schedule 4.13:
(a) All of the Owned Intellectual Property is owned by Seller free and
clear of all Liens, and is not subject to any license, royalty or other
agreement, and Seller has not granted any license or agreed to pay or receive
any royalty in respect of any Owned Intellectual Property or, except as provided
in the Intellectual Property licenses set forth on Schedule 2.1(e), any Licensed
Intellectual Property;
(b) None of the Owned Intellectual Property or the Licensed
Intellectual Property has been or is the subject of any pending or, to the
knowledge of Seller and Parent, any threatened litigation or claim of
infringement or misappropriation and there is no basis for making any such
claim;
(c) No Intellectual Property license is in breach or default by Seller
or any other party thereto or the subject of any notice of termination given or
threatened;
(d) Seller has not made or threatened to make any claim that any
product or service sold or provided by any Person, or any process, method, part,
design, material or Intellectual Property employed by any Person, or any
marketing or use by any Person of any such product or service, violates,
infringes or misappropriates any Owned Intellectual Property or Licensed
Intellectual Property or confidential or proprietary rights of Seller;
(e) The products and services sold and provided by Seller, each
process, method, part, design, material or other Intellectual Property it
employs, and the marketing and use by Seller of any product, service or
Intellectual Property, in each case in connection with the Business, do not
violate, infringe or misappropriate any Intellectual Property or confidential or
proprietary rights of another Person, and Seller has not received any notice
making or threatening to make any claim of infringement or misappropriation of
any Intellectual Property of another Person or contesting Seller's right to
market or use any such product, service, process, method, part, design, material
or other Intellectual Property and there is no basis for making such a claim;
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(f) Seller currently owns or possesses adequate rights in and to all
Intellectual Property necessary to conduct the Business as presently conducted;
and
(g) Except as set forth on Schedule 4.13(g), Seller and Parent are not
aware of any infringement or any other use of any of the Intellectual Property
by any Person other than Seller.
4.14 Contracts.
Schedule 4.14 sets forth a true, accurate and complete list of all
Contracts and arrangements (whether oral or written) of the following types to
which Seller is a party or by which it is bound and which relate to, in whole or
in part, the Purchased Assets or which or are used or held for use in, or relate
principally to the Business, or to which any of the Purchased Assets is subject:
(a) any Contract of any kind that either (i) requires a payment by any
party in excess of, or a series of payments which in the aggregate exceed,
US$5,000, (ii) has a term, or requires the performance of any obligations by any
party over a period, in excess of 90 days, (iii) involves any director, officer,
stockholder or employee of Seller or any of the respective Affiliates of such
individuals, and (iv) any Contract or other arrangement of any kind with Parent
or any other Affiliate of Seller;
(b) any Contract with any Person for the purchase or sale of goods or
services for resale to end-user customers;
(c) any Contract with a customer that either (i) requires a payment by
any party in excess of, or a series of payments which in the aggregate exceed,
US$5,000, or (ii) has a term, or requires the performance of any obligations by
any party over a period, in excess of 90 days;
(d) any Contract pursuant to which Seller grants or is granted any
license or other rights to use any of the Purchased Assets or any rights of
joint use with respect to any of the Purchased Assets;
(e) any Contract with a sales representative, manufacturer's
representative, distributor, dealer, broker, sales agency, advertising agency or
other Person engaged in sales, distributing or promotional activities, or any
Contract to act as one of the foregoing on behalf of any Person;
(f) any Contract pursuant to which Seller has made or will make loans
or advances, or has or will have incurred debts or become a guarantor or surety
or pledged its credit on or otherwise become responsible with respect to any
undertaking of another Person, in each case, in an amount over US$5,000 (except
for the negotiation or collection of negotiable instruments in transactions in
the ordinary course of business);
(g) any indenture, loan agreement, note, mortgage, security agreement,
lease of real property or personal property or other Contract relating to the
borrowing of funds, an extension of credit or financing;
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(h) any Contract involving a partnership, joint venture or other
cooperative undertaking;
(i) any Contract involving any restrictions with respect to the
geographical area of operations or scope or type of business of Seller;
(j) any power of attorney or agency Contract with any Person pursuant
to which such Person is granted the authority to act for or on behalf of Seller,
or Seller is granted the authority to act for or on behalf of any Person;
(k) any Contract, whether or not fully performed, relating to any
acquisition or disposition of any material portion of the Purchased Assets or
the Business;
(l) any Contract not made in the ordinary course of business and
consistent with past practice and that is to be performed in whole or in part at
or after the date of this Agreement; and
(m) any Contract not specified above that is material to the Business.
Seller has delivered to Purchaser (i) true, accurate and complete
copies of each document set forth on Schedule 4.14 as amended or modified and
each of the Contracts included in the Acquired Contracts and Permits as amended
or modified (collectively, the "Identified Contracts") and (ii) a written
description of each oral arrangement so listed on Schedule 4.14. Except as set
forth on Schedule 4.14, all such Identified Contracts and arrangements have been
entered into by Seller in the ordinary course of business and are on terms that
are no less favorable to Seller than the terms which could be obtained from an
unrelated third party and, if canceled at any time, would not have a Material
Adverse Effect. Seller has delivered to Purchaser true, accurate and complete
copies of each form of agreement that has been used in the business and is in
effect with respect to any third party. Except for sales of assets in the
ordinary course of the operation of the Business, neither Seller nor any of its
Affiliates has any Contract or arrangement with respect to the sale or other
disposition of the Business or any of the Purchased Assets or capital stock of
Seller, except as set forth in this Agreement.
4.15 Permits. Schedule 4.15 sets forth a true, accurate and complete
list of all Permits held by Seller with respect to the Purchased Assets or the
Business. All such Permits are in full force and effect. Except for the Permits
set forth on Schedule 4.15, there are no Permits which are necessary for the
lawful ownership or use of the Purchased Assets or operation of the Business.
Schedule 4.15, sets forth a true, accurate and complete list of all Permits held
by Seller with respect to the Purchased Assets or the Business that are to be
transferred to Purchaser, and all such Permits may be transferred to Purchaser
pursuant to this Agreement and do not require any consents or permissions that
have not been obtained.
4.16 Insurance.
(a) Schedule 4.16 sets forth a true, accurate and complete list of all
insurance policies held by Seller or its Affiliates and applicable to any Asset
or the Business. All such policies are in full force and effect, all premiums
with respect thereto covering all periods up to and including the Closing Date
have been paid (or will be paid by Seller prior to the due dates therefor), and
no notice of cancellation or termination has been received with respect to any
such policy. Such
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policies are sufficient for compliance with (i) all requirements of Law and (ii)
all Contracts to which Seller is a party, and are valid, outstanding and
enforceable policies. Except as set forth on Schedule 4.16, Seller has not been
refused any insurance with respect to the Purchased Assets or the operation of
the Business, and its coverage with respect thereto has not been limited by any
insurance carrier to which it has applied for any such insurance or with which
it has carried insurance, during the last three years. Except as set forth on
Schedule 4.16, there are no outstanding written requirements or written
recommendations made by or on behalf of any insurance company that issued a
policy with respect to the Purchased Assets or the operations of the Business
requiring or recommending the taking of any action with respect to the Purchased
Assets or the operation of the Business.
(b) Schedule 4.16 sets forth a true, accurate and complete list of all
claims (other than health and related claims) which have been made by Seller
within the past three years under any workmen's compensation, general liability,
property or other insurance policy held by Seller or its Affiliates with respect
to the Purchased Assets or the operations of the Business. Except as set forth
on Schedule 4.16, there are no pending or, to the knowledge of Seller and
Parent, threatened claims under any insurance policy with respect thereto. Such
claim information includes the following information with respect to each
accident, loss or other event: (i) the identity of the claimant; (ii) the date
of the occurrence; (iii) the status as of the report date and (iv) the amounts
paid or expected to be paid or recovered.
4.17 Capital Improvements.
Schedule 4.17 sets forth a true, accurate and complete list of all of
the capital improvements and purchases and other capital expenditures in excess
of US$1,000, to which Seller has committed with respect to the Business or for
which it has contracted with respect to the Business and which in any event have
not been completed prior to the date hereof and the cost and expense reasonably
estimated to complete such work and purchases.
4.18 Taxes.
(a) All federal, state, local and foreign income, corporation and other
Tax Returns required to be filed as of the Closing Date with respect to the
Business have been timely filed by Seller or Parent and all other filings in
respect of Taxes relating to the Business have been made by Seller or Parent (or
will be filed or made prior to the due dates therefor) for all periods through
and including the Closing Date as required by applicable Law. All Taxes due with
respect to the periods covered by such Tax Returns and other filings have been
paid (or will be paid prior to the due dates therefor). Each such Tax Return and
filing is true, accurate and complete and neither Seller nor Parent has or will
have any additional liability for Taxes with respect to any Tax Return or other
filing heretofore filed or which was required by Law to be filed relating to the
Business, other than as reflected as liabilities on the Parent Financial
Statements. There are no Liens for Taxes (other than Permitted Exceptions) upon
any of the Purchased Assets. All Taxes that Seller or Parent is or was required
by Law to withhold or collect with respect to the Business, including sales and
use taxes, and amounts required to be withheld for Taxes of employees and other
withholding taxes, have been duly withheld or collected and, to the extent
required, have been timely paid over to the proper Governmental Authorities.
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(b) Seller is not a "foreign person" as defined in Section 1445(f)(3)
of the Code.
(c) Except as set forth on Schedule 4.18, none of the Purchased Assets
constitutes a joint venture, partnership or other arrangement or contract which
is treated as a partnership for Federal income tax purposes.
(d) Except as set forth on Schedule 4.18, none of the Purchased Assets
constitutes tax-exempt bond financed property or tax-exempt use property within
the meaning of Section 168 of the Code, and none of the Purchased Assets is
subject to a lease, safe harbor lease or other arrangement as a result of which
Seller is not treated as the owner for federal income tax purposes.
(e) Except as set forth on Schedule 4.18, neither Seller nor Parent has
waived or extended any applicable statute of limitations relating to the
assessment of Taxes which waiver is now in effect.
(f) No audit of any Tax Return of Seller or Parent is currently in
progress, nor has any notice of intention to audit any Tax Return of Seller been
received in writing, and no deficiencies have been assessed against Seller as a
result of any audit by the Internal Revenue Service or any other Governmental
Authority, which deficiencies remain unpaid. Schedule 4.18 sets forth those
taxable years for which the Tax Returns of Seller or Parent with respect to the
Business have been reviewed or audited by any Governmental Authority and those
tax years for which said Tax Returns have received clearances or other
indications of approval from the applicable Governmental Authority.
(g) Except as set forth on Schedule 4.18, none of the Assumed
Obligations is an obligation arising from any agreement, contract, arrangement
or plan that has resulted or would result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of Section
280G of the Code.
4.19 No Defaults or Violations.
Except as set forth on Schedule 4.19:
(a) Seller has not breached any provision of, nor is it in default
under the terms of, any Identified Contract and, to the knowledge of Seller and
Parent, no other party to any Identified Contract has breached any provision of,
or is in default under the terms of, any Identified Contract.
(b) The Business and each of the Purchased Assets is in compliance in
all material respects with, and no violation exists under, any and all Laws
applicable to the Business and the Purchased Assets.
(c) No written notice and no oral notice from any Governmental
Authority has been received by Seller or Parent with respect to the Business
claiming any violation of any Law (including any building, zoning or other
ordinance) or requiring any work, construction or expenditure, or asserting any
Tax, assessment or penalty.
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4.20 Environmental Matters.
Except as set forth on Schedule 4.20:
(a) Seller is in compliance in all material respects with all
Environmental and Health and Safety Laws with respect to the Purchased Assets
and the Business, and no condition exists or event has occurred which, with or
without notice or the passage of time or both, would constitute a violation in
any material respect of any Environmental and Health and Safety Law or give rise
to any Lien on any of the Purchased Assets under any Environmental and Health
and Safety Law;
(b) Seller is in possession of all Environmental Health and Safety
Permits required for the ownership, conduct or operation of the Purchased Assets
or the Business (or any part thereof) and is in compliance in all material
respects with all of the requirements and limitations included in such
Environmental Health and Safety Permits;
(c) Seller, Parent and their Affiliates have not used or stored any,
and to Seller's and Parent's knowledge there are no, Hazardous Materials in, on,
or at the Real Property, and no Hazardous Materials have been used in the
construction or repair of, or any alterations or additions to, any of the
Purchased Assets, except in each case for inventories of substances, including
fuel supplies, set forth on Schedule 4.20, which are or are to be used in the
ordinary course of business and consistent with past practices and stored and
used in accordance with all applicable Environmental Health and Safety Laws and
Environmental and Health and Safety Permits, including all so-called "Right To
Know Laws";
(d) Neither Seller nor Parent has received any written notice or
written information request or any oral notice or oral information request from
any Governmental Authority or any other Person that any aspect of the Business
or the operation thereof or any of the Purchased Assets is in violation of any
Environmental and Health and Safety Law or Environmental Health or Safety
Permit, or that Seller is responsible (or potentially responsible) for the
cleanup or remediation of any substances at the Real Property;
(e) Except in accordance with applicable Law, neither Seller nor Parent
has released, deposited or incorporated any Hazardous Materials into, on,
beneath or adjacent to any Real Property or any other property ever owned or
leased by Seller and used in the Business;
(f) Neither Seller nor Parent is subject to any pending or, to Seller's
and Parent's knowledge, threatened litigation or proceedings concerning any of
the Purchased Assets or the Business in any forum, judicial or administrative,
involving a demand for damages, response costs, injunctive relief, penalties, or
other potential liability with respect to violation of or liability under any
Environmental and Health and Safety Law concerning any of the Purchased Assets
or the Business;
(g) Seller has timely filed all reports and notifications required to
be filed and has generated and maintained all required material records and data
concerning the Purchased Assets or the Business under all applicable
Environmental and Health and Safety Laws or Environmental and Health and Safety
Permits; and
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(h) No condition has existed or event has occurred with respect to the
Real Property by Seller, or by any direct or indirect subsidiary that was at any
time owned by Seller, any predecessor to Seller or any Person that is or was an
Affiliate of Seller (including any property or subsidiary that has been sold,
transferred or disposed of or for which any lease has terminated) that in any
case could, with or without notice, passage of time or both, give rise to any
present or future liability of Seller pursuant to any Environmental and Health
and Safety Law.
4.21 Litigation.
(a) Except as set forth on Schedule 4.21, there are no claims, actions,
suits, mediation, arbitrations, regulatory proceedings or other litigation,
proceedings or governmental investigations pending or, to Seller's or Parent's
knowledge, threatened against or affecting Seller or any of its officers,
directors, employees or stockholders in their capacity as such with respect to
the Business or any of the Purchased Assets, and Seller and Parent are not aware
of any facts or circumstances which may give rise to any of the foregoing.
Except as set forth on Schedule 4.21, all of the proceedings pending or
threatened against Seller or Parent with respect to the Business or any of the
Purchased Assets are fully covered by insurance policies (or other
indemnification agreements with third parties) and are being defended by the
insurers (or such third parties), subject to such deductibles as are set forth
on such Schedule. Except as set forth on Schedule 4.21, Seller and Parent are
not subject, in connection with the Business or any of the Purchased Assets, to
any order, judgment, decree, injunction or stipulation of or with any court or
other Governmental Authority. Neither Seller nor Parent has entered into any
agreement to settle or compromise any proceeding pending or threatened against
it with respect to the Business or any of the Purchased Assets (i) which has
involved any obligation other than the payment of money that has been paid in
full prior to the date of this Agreement or (ii) for which Seller or Parent has
any continuing obligation.
(b) There are no claims, actions, suits, proceedings or investigations
pending or, to Seller's or Parent's knowledge, threatened by or against Seller
or Parent with respect to this Agreement or any of the Related Agreements, or in
connection with the transactions contemplated hereby or thereby, and Seller has
no reason to believe there is a valid basis for any such claim, action, suit,
proceeding or investigation.
4.22 Customers and Suppliers.
(a) Schedule 4.22 sets forth a true, accurate and complete list:
(i) of the 20 largest customers of the Business in terms of
revenue earned during each of the two most recently completed fiscal
years and the portion of the current fiscal year prior to the date of
this Agreement (collectively, the "Major Customers"), showing the total
revenue earned in each such period from each such customer; and
(ii) of the 20 largest suppliers of the Business in terms of
purchases during the two most recently completed fiscal years and the
portion of current fiscal year prior to the date of this Agreement
(collectively, the "Major Suppliers"), and showing the total purchases
in each such period from each such supplier.
(b) Since December 31, 1999, except as set forth on Schedule 4.22,
there has not been any Material Adverse Change in the business relationship, and
there has been no material
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dispute, between Seller, Parent or any of their Affiliates and any Major
Customer or Major Supplier, and, to Seller's and Parent's knowledge, there are
no indications that any Major Customer or Major Supplier intends to reduce its
purchases from, or sales to, Seller.
(c) Schedule 4.22 sets forth a true and accurate summary of the nature
and volume of all written distributor, customer and end-user complaints received
by Seller or Parent with respect to the Business during the 12 months prior to
the date hereof.
4.23 Information and Records.
The Information and Records are true, accurate and complete in all
material respects and, at Seller's expense, will be transferred to Purchaser at
or after the Closing promptly at Purchaser's request in such form and format
(including disaggregating such data from other data of Seller) as Purchaser
reasonably requests.
4.24 Product Warranties.
Except as set forth on Schedule 4.24, with respect to the Business
there are no claims against or liabilities of Seller or Parent (or any
predecessor of Seller) which in the aggregate exceed US$1,000 with respect to
the sale or distribution of defective products, and there is no basis for any
such claim on account of defective products heretofore sold or distributed.
Schedule 4.24 sets forth a summary of all product liability claims filed against
Seller, Parent and their Affiliates (or any predecessors thereof) with respect
to the Business within the past five years.
4.25 Employees.
Purchaser has been provided with a list of the names of all current
employees (including those on leave of absence or layoff status) of Seller,
Parent or any of their Affiliates engaged in the Business and located at the
Real Property (collectively, the "Employees"), their job title, employment date,
accrued vacation and current aggregate annual cash compensation, showing the
components thereof, and changes thereto since December 31, 1999, and other
material benefits, including severance benefits payable upon termination. Except
as set forth on Schedule 4.25, no material representations, warranties or
promises have been made to or agreements have been reached with any Employee
with respect to such Employee's employment, compensation or benefits. Schedule
4.25 sets forth a list of all of the following (to the extent not otherwise set
forth on any Schedule to this Agreement), true and complete copies of which,
together with such other related documents as Purchaser may reasonably request,
have been delivered to Purchaser:
(a) each management or employment contract or contract for personal
services between Seller, Parent or any of their Affiliates and any Employee;
(b) each defined benefit plan, multiple employer plan, or any plan
subject to the minimum funding provisions of the Code or the minimum funding or
termination insurance provisions of ERISA that Seller, Parent or any of their
Affiliates maintains, participates in, contributes to, has any obligation or any
liability with respect to or has had any obligation with respect to during the
six years immediately preceding the date of this Agreement;
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(c) each other plan, contract, or arrangement providing for bonuses,
pensions, deferred compensation, retirement plan payments, profit-sharing,
incentive pay, payments in connection with a change in control or in
anticipation of a business combination, severance, hospitalization or medical
expense, insurance for any Employee or members of their respective families
(other than those described on Schedule 4.26), whether or not issued;
(d) each policy regarding severance, vacations and sick time, and each
personnel manual; and
(e) any other material agreement which is applicable to any Employee.
4.26 Labor Relations; Compliance.
With respect to the Employees:
(a) neither Seller nor Parent is currently or has ever been a party to
any collective bargaining or other labor contract;
(b) except as set forth on Schedule 4.26, within the past three years
there has not been, and there is not presently pending or existing, and to the
knowledge of Seller and Parent, there is not threatened (a) any strike,
slowdown, picketing, work stoppage, or material employee grievance process or
labor dispute, (b) any proceeding against or affecting Seller or Parent which,
if adversely determined, would result in an Employee Liability, including any
charge or complaint filed by an employee or union with the National Labor
Relations Board, the Equal Employment Opportunity Commission, or any comparable
governmental body, organizational activity, or other labor or employment dispute
against or affecting Seller or Parent or their premises, or (c) any application
for certification of a collective bargaining agent or demands to negotiate any
collective bargaining contract;
(c) no event has occurred or circumstance exists that could provide the
basis for any work stoppage or other labor dispute; and
(d) Seller, Parent and all of their Affiliates have complied in all
material respects with each Law relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health (except for matters discovered during routine monthly safety
inspections that are not continuing or material), and plant closing.
4.27 Brokers.
Neither Seller, Parent nor any of their Affiliates have used any broker
or finder in connection with the transactions contemplated hereby, and neither
Purchaser nor any Affiliate of Purchaser has or shall have any liability or
otherwise suffer or incur any Loss as a result of or in connection with any
brokerage or finder's fee or other commission of any Person retained by Seller,
Parent or any of their Affiliates in connection with any of the transactions
contemplated by this Agreement or the Related Agreements.
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4.28 Accuracy of Statements.
Neither this Agreement nor any Related Agreement nor any schedule,
exhibit, statement, list, document, certificate or other information furnished
or to be furnished by or on behalf of Seller or Parent to Purchaser or any
representative or Affiliate of Purchaser in connection with this Agreement, any
Related Agreement or any of the transactions contemplated hereby or thereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
5.1 Due Incorporation.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of New York, with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as they are now owned, leased and operated.
5.2 Due Authorization.
Purchaser has full power and authority to execute, deliver and perform
this Agreement and its Related Agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Purchaser of this Agreement and its Related Agreements and the consummation by
Purchaser of the transactions contemplated hereby and thereby have been duly and
validly approved by Purchaser's board of directors and no other actions or
proceedings on the part of Purchaser are necessary to authorize the execution,
delivery and performance of this Agreement, its Related Agreements or the
transactions contemplated hereby and thereby. Purchaser has duly and validly
executed and delivered this Agreement and has duly and validly executed and
delivered (or prior to or at the Closing will duly and validly execute and
deliver) its Related Agreements. This Agreement constitutes legal, valid and
binding obligations of Purchaser, and Purchaser's Related Agreements upon
execution and delivery by Purchaser will constitute legal, valid and binding
obligations of Purchaser, in each case, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws which affect
the enforcement of creditors' rights generally, by equitable limitations on the
availability of specific remedies and by principles of equity.
5.3 Consents and Approvals: No Conflicts. etc.
(a) Except for the consents set forth on Schedule 5.3 (the "Purchaser
Consents"), no consent, authorization or approval of, or filing or registration
with, any Governmental Authority or any other Person not a party to this
Agreement is necessary in connection with the execution, delivery and
performance by Purchaser of this Agreement and its Related Agreements and the
consummation by Purchaser of the transactions contemplated hereby or thereby.
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(b) Except as set forth on Schedule 5.3, the execution, delivery and
performance by Purchaser of this Agreement and its Related Agreements and the
consummation by Purchaser of the transactions contemplated hereby and thereby do
not and will not (i) violate any Law applicable to Purchaser or any of its
properties or assets; or (ii) violate or conflict with any provision of the
certificate of incorporation or bylaws of Purchaser.
5.4 Financing.
Purchaser has, or has commitments for, the funds necessary to satisfy
its obligations hereunder, including, without limitation, the obligation to pay
the Purchase Price.
5.5 Brokers.
Purchaser has not used any broker or finder in connection with the
transactions contemplated hereby, and neither Seller nor any Affiliate of Seller
has or shall have any liability or otherwise suffer or incur any Loss as a
result of or in connection with any brokerage or finder's fee or other
commission of any Person retained by Purchaser in connection with any of the
transactions contemplated by this Agreement or the Related Agreements.
ARTICLE VI
COVENANTS OF SELLER AND PARENT
Seller and Parent agree to perform each of the following covenants:
6.1 Implementing Agreement.
Subject to the terms and conditions hereof, Seller shall take all
action required of it to fulfill its obligations under the terms of this
Agreement and shall otherwise use all commercially reasonable efforts to
facilitate the consummation of the transactions contemplated hereby. Except as
otherwise expressly permitted hereby, Seller agrees that it will not take any
action that would have the effect of preventing or impairing Seller's
performance of its obligations under this Agreement.
6.2 Consents and Approvals.
Seller shall use all commercially reasonable efforts to obtain all
consents, approvals, certificates and other documents required in connection
with the performance by it of its obligations under this Agreement and its
Related Agreements and the consummation by it of the transactions contemplated
hereby and thereby, including all such consents and approvals by each party to
any of the Contracts included in the Acquired Contracts and Permits. If a
consent or approval is required by any party under any of the Contracts included
in the Acquired Contracts and Permits and is not obtained on or before the
Closing, or if an attempted assignment is ineffective, Seller shall cooperate
with Purchaser at Seller's expense in any reasonable arrangement requested by
Purchaser to provide for Purchaser the benefits under any such Contracts. Seller
shall use all commercially reasonable efforts to obtain all required consents
and approvals (if any) to assign and transfer the Permits to Purchaser at
Closing and, to the extent that one or more of the Permits are not transferable,
to obtain replacements therefor. If certain Permits are not transferable or
replacements therefor are not obtainable on or before the Closing, but such
Permits are transferable or replacements therefor are obtainable after the
Closing, Seller shall continue to use such efforts at Seller's expense in
cooperation with Purchaser after the
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Closing as may be required to obtain all required consents and approvals to
transfer, or obtain replacements for, such Permits after Closing. Seller shall
make, or cause to be made, all filings, notices, applications, statements and
reports to all Governmental Authorities and other Persons that are required to
be made prior to the Closing Date by or on behalf of Seller or any of its
Affiliates pursuant to any applicable Law or Contract or Environmental and
Health and Safety Law or Permit in connection with this Agreement and its
Related Agreements and the transactions contemplated hereby and thereby and
shall cooperate with Purchaser in making all such filings, notices,
applications, statements and reports that are required to be made prior to the
Closing Date by or on behalf of Purchaser or any of its Affiliates pursuant to
any applicable Law in connection with this Agreement and its Related Agreements
and the transactions contemplated hereby and thereby.
6.3 Preservation of Business.
(a) Until the Closing, Seller shall incur and pay costs and otherwise
operate the Business only in the usual, regular and ordinary course and in a
manner consistent with past practice, and shall use its best efforts to (i)
preserve intact the present business organization and personnel of the Business,
(ii) preserve the goodwill and advantageous relationships of the Business with
customers, suppliers, independent contractors, employees and other Persons
material to the operation of the Business, (iii) prevent any event that could
have a Material Adverse Effect and (iv) not permit any action or omission that
would cause any of the representations or warranties of Seller contained herein
to become inaccurate or any of the covenants of Seller to be breached as of any
date after the date hereof.
(b) Without limiting the generality of clause (a), until the Closing,
except as set forth on Schedule 6.3 or with the prior written consent of
Purchaser, Seller shall not with respect to the Business or any of the Purchased
Assets:
(i) do any act or omit to do any act, or permit any act or
omission to act, which would cause a material breach of any of the
Acquired Contracts and Permits or any other Contract or obligation;
(ii) take any action, or enter into or authorize any Contract
or transaction or any amendment or modification to any Contract or
transaction, other than in the ordinary course of business and
consistent with past practice;
(iii) sell, transfer, convey, assign or otherwise dispose of
any of its assets, except sales of inventory in the ordinary course of
business and consistent with past practice;
(iv) except as set forth on Schedule 4.17, authorize or make
any capital improvements or purchases or other capital expenditures
that individually or in the aggregate are in excess of US$1,000;
(v) waive, release or cancel any claims against third parties
or debts owing to Seller, or any rights which have any value;
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(vi) make any changes in its accounting systems, policies,
principles or practices;
(vii) suffer or permit the creation of any Lien over any of
the Purchased Assets other than in the ordinary course of business and
consistent with past practice;
(viii) terminate, rescind, modify, amend or otherwise alter or
change any of the terms or provisions of any of the Acquired Contracts
and Permits, or reduce, discount, waive or forego any material payment
or right thereunder, or agree to any compromise or settlement with
respect thereto;
(ix) enter into any Contract or arrangement of any kind with
any director, officer or employee of Seller or any of the respective
Affiliates of such individuals, or any Contract or other arrangement of
any kind with any Affiliate of Seller;
(x) enter into any Contract or arrangement with any Person for
the purchase or sale of goods or services for resale to end-user
customers except in the ordinary course of business consistent with
past practice;
(xi) enter into any Contract or arrangement pursuant to which
Seller grants or is granted any license or other right to use any of
the Purchased Assets or any right of joint use with respect to any of
the Purchased Assets;
(xii) incur any obligation or enter into any Contract or
arrangement (except for sales of inventory in the ordinary course of
business), that either (i) requires a payment by any party in excess
of, or a series of payments which in the aggregate exceed, US$1,000 or
provides for the delivery of goods or performance of services, or any
combination thereof, having a value in excess of US$1,000 or (ii) has a
term, or requires the performance of any obligations by Seller over a
period, in excess of 30 days;
(xiii) enter into any Contract or arrangement with a sales
representative, manufacturer's representative, distributor, dealer,
broker, sales agency, advertising agency or other Person engaged in
sales, distributing or promotional activities, or any Contract to act
as one of the foregoing on behalf of any Person; or
(xiv) introduce any new products or services to customers.
(c) Without limiting the generality of clause (a), until the Closing,
except as set forth on Schedule 6.3, or with the prior written consent of
Purchaser, Seller shall:
(i) maintain its books, accounts and records in the usual,
regular and ordinary manner, and on a basis consistent with the Parent
Financial Statements, the Seller Financial Statements and past
practices;
(ii) continue to carry its existing insurance affecting the
Purchased Assets or Business through the Closing Date, and shall not
allow any breach, termination or cancellation of such insurance
policies to occur or exist;
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(iii) duly comply with all Laws applicable to the Purchased
Assets or Business or as may be required for the valid and effective
transfer and assignment of the Purchased Assets; and
(iv) in the event that, after the Closing Date, Seller
receives any payment related to the operations of the Business, Seller
shall forward such payment to Purchaser within three (3) Business Days.
(d) Any Contract or other obligation which requires the prior written
consent of Purchaser pursuant to Section 6.3(b) and which is entered into or
incurred with the prior written consent of Purchaser shall be, at the option of
Purchaser, in its sole discretion, included in or excluded from the Purchased
Assets and Permits, and the Schedules to this Agreement shall be deemed to have
been updated to include any such Contract. Any Contract or other obligation
entered into or incurred in violation of Section 6.3(b) shall not be included in
the Purchased Assets and Permits, and shall constitute an Excluded Obligation.
6.4 Access to Information and Facilities.
Prior to the Closing, Seller shall give Purchaser and Purchaser's
representatives unrestricted access during normal business hours to all of the
Contracts, books and records of the Business (including employment histories and
other information relating to employees), Real Property and remote locations
where any Information and Records are maintained or processed. Seller shall make
the officers and employees of Seller available to Purchaser and its
representatives as Purchaser and its representatives shall from time to time
reasonably request. Purchaser and its representatives shall be furnished with
any and all information concerning the Business and the Purchased Assets that
Purchaser or its representatives reasonably request. Without limiting the
foregoing, upon reasonable notice to Seller and during normal business hours,
Seller shall give Purchaser and its representatives access to the books and
records of the Business to perform auditing procedures and to the Real Property
to perform such environmental and other tests as Purchaser or its
representatives may reasonably determine, including constructing wells for
testing the location, nature or degree of any groundwater contamination. In
addition, Seller shall permit Purchaser to maintain a staff of observers at any
of the facilities of the Business or any remote location where any Information
and Records are maintained or processed for the purposes of training personnel,
gathering information about the Business and preparing for the transition of the
Business from Seller to Purchaser.
6.5 Supplemental Information.
From time to time prior to the Closing, Seller will promptly disclose
in writing to Purchaser any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement would have been required to be
disclosed to Purchaser on the Schedules hereto or which would render inaccurate
any of the representations, warranties or statements set forth in Article IV. No
information provided to Purchaser pursuant to this Section 6.5 shall be deemed
to cure any breach of any representation, warranty or covenant made in this
Agreement or in any Related Agreement. Purchaser shall, at its option, be
entitled to add any of the information disclosed pursuant to this Section 6.5 to
the Schedules hereto upon written notice to Seller, in which case such
information shall be deemed to have been disclosed to Purchaser from the date of
this Agreement.
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6.6 Tax Matters.
After the Closing, Seller shall make available to Purchaser (at
Seller's expense) such records which are in Seller's possession as Purchaser may
require for the preparation of any Tax Returns or other similar governmental
reports or forms required to be filed by Purchaser and such Business records as
Purchaser may require for the defense of any audit, examination, administrative
appeal or litigation of any such Tax Return or other similar governmental report
or form. Seller shall comply with the requirements of applicable Tax Laws
governing bulk sales of assets or sales of assets outside the ordinary course of
business and shall provide evidence to Purchaser prior to Closing that all
required filings have been made and certification from the relevant Governmental
Authorities that there is no Tax liability to which Purchaser may be subject
under such Laws. Seller shall undertake all necessary action to ensure that the
transactions contemplated hereby are structured such that all of the goodwill
acquired by Purchaser is tax deductible.
6.7 Cooperation.
Prior to the Closing, Seller shall cooperate with Purchaser and shall
take all actions reasonably requested by Purchaser to ensure a smooth transition
of the suppliers and customers of the Business from Seller to Purchaser,
including participating in joint marketing efforts, allowing access to
communications channels with such suppliers and customers and providing
information regarding such transition to such suppliers and customers.
6.8 Surveys and Title Insurance.
(a) Within 10 days after the date of this Agreement, Seller shall cause
to be delivered to Purchaser, at Seller's sole expense, a survey of the Real
Property, prepared by a Texas registered land surveyor, and meeting the "Minimum
Standard Detail Requirements" for ALTA/ACSM Land Title Surveys as adopted by the
American Land Title Association American Society and American Congress on
Surveying and Mapping in 1992, including Items 1, 2, 3, 4, 6, 7(a), 7(c), 8, 9,
10, 11, 13, 14 (if applicable), 15 (if applicable), and 17 of Table A thereof,
with the certificate of such surveyor dated not earlier than the date hereof and
running in favor of Purchaser.
(b) Within 10 days after the date of this Agreement, Seller shall cause
to be delivered to Purchaser, at Seller's expense, a commitment for a title
insurance policy for the Real Property.
(c) Purchaser shall disclose to Seller any exceptions to title which
are not Permitted Exceptions ("Unpermitted Exceptions") no later than 10 days
after receipt of the last of the surveys described in Section 6.8(a) and any
required title endorsements.
(d) Seller shall cure any Unpermitted Exceptions no later than 10
Business Days after Purchaser discloses Unpermitted Exceptions pursuant to
Section 6.8(c). Pending such cure, the Closing shall be postponed to the extent
necessary to accommodate such 10-Business Day time period. Upon such cure, the
Closing shall be held on the later of (i) the previously scheduled Closing Date,
and (ii) the second Business Day after the date such cure is completed (but in
no event later than September 30, 2000 as set forth in Section 12.1). If such
cure is not completed within such 10-day period, Purchaser shall have the option
to terminate this Agreement or waive one or more of its objections and proceed
to Closing. Notwithstanding the foregoing, if
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Purchaser determines that an Unpermitted Exception exists which is of a definite
and ascertainable character which may be removed by the payment of money, Seller
shall, at Purchaser's option, (i) cure such Unpermitted Exception effective as
of the Closing simultaneously with receipt of funds at the Closing or (ii) allow
Purchaser to withhold from the Purchase Price a reasonable amount sufficient to
discharge such Unpermitted Exception.
6.9 Destruction or Condemnation of Real Property.
Prior to the Closing, Seller shall give prompt written notice to
Purchaser of any damage or destruction to any of the improvements on the Real
Property or the threat or commencement of any condemnation proceedings against
any of the Real Property. If, prior to the Closing, any of the improvements on
the Real Property are damaged or destroyed such that the cost of repair is
reasonably likely not to exceed US$100,000, Seller shall promptly cause such
repairs to be made prior to the Closing at Seller's expense. If, prior to the
Closing, any of the improvements on the Real Property are damaged or destroyed
such that the aggregate cost of repair is reasonably likely to exceed
US$100,000, or a condemnation against any of the Real Property is threatened or
commenced, Purchaser shall elect by written notice to Seller given within 20
days after the receipt of notice thereof from Seller to either (a) terminate
this Agreement or (b) receive from Seller any insurance proceeds or awards or
condemnation awards to be paid to Seller in connection with such damage,
destruction or condemnation, in which case at the Closing Seller shall make an
assignment of such proceeds to Purchaser and Purchaser shall have the right to
deduct the amount of any deductible applicable to such damage or destruction
under Seller's casualty insurance from the Purchase Price. If Purchaser does not
make any election within such 20-day period, Purchaser shall be deemed to have
elected to proceed in accordance with the terms of clause (b) above.
6.10 No Shopping.
Unless and until this Agreement is terminated pursuant to the terms
hereof, neither Seller, Parent nor any of their Affiliates shall directly or
indirectly (i) encourage, solicit, initiate, or participate in any discussions
or negotiations with any Person other than Purchaser concerning any sale of the
Purchased Assets or the Business (whether as a sale of the assets, a merger, an
acquisition of the equity of an entity holding the Purchased Assets or Business
or any similar transaction that will interfere with the consummation of the
transactions contemplated by this Agreement or the Supply Agreement), or (ii)
disclose any Confidential Information to any Person other than Purchaser and its
employees, advisors and other representatives. If Seller or Parent receives an
offer or inquiry with respect to any of the foregoing types of transactions, it
shall promptly inform Purchaser thereof.
6.11 Use of Name.
Except as provided in the License Agreement, after the Closing, neither
Seller, Parent nor any of their Affiliates will use or claim any right to the
names "Sunfresh," "Fruits of Four Seasons," "Fruit Made Easy" or "Flavor Fresh"
and all variants thereof. If at any time after the date hereof, Seller, Parent
or any of their Affiliates has the right to acquire any interest to such names
or variants thereof from any third party, Seller shall, or Parent shall or shall
cause its other Affiliates in the Seller Group to, (i) use commercially
reasonable efforts to acquire such interest, (ii) not waive such right without
Purchaser's prior written consent, and (iii) notify Purchaser
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when such right arises. If Seller, Parent or any of their Affiliates acquires
any such interest, they will assign such interest to Purchaser without any
additional consideration.
6.12 Use of Specifications.
(a) Effective as of the Closing Date, Purchaser hereby grants Seller,
Parent and their controlled Affiliates as of the date hereof, subject to the
terms and conditions of this Section 6.12, (i) for a period of ten years after
the Closing Date, a personal, nonexclusive, royalty-free, limited license,
without the right to sublicense, subcontract or assign, to use the formulas,
recipes, Specifications, processes, know-how and show-how relating to the
Products included in the Purchased Assets to manufacture, process, package and
sell the Products in Mexico and outside of the Western Hemisphere so long as
such Products are not intended, directly or indirectly, for sale or consumption
within the Western Hemisphere (excluding Mexico) and so long as such Products
are not ultimately sold or consumed within the Western Hemisphere (excluding
Mexico), and (ii) a perpetual, personal, nonexclusive, royalty-free, limited
license, without the right to sublicense, subcontract or assign, to use the
formulas, recipes, Specifications, processes, know-how and show-how relating to
the Products included in the Purchased Assets with respect to the business
conducted by Seller, Parent or any of their Affiliates, wherever located, of
selling such products in their food service and industrial market segments
(other than through vending).
(b) Any formulas, recipes, Specifications, processes, know-how or
show-how provided to Seller, Parent and or any of their Affiliates by Purchaser
are proprietary and confidential information of Purchaser, shall not be used by
Seller, Parent or any of their Affiliates except in connection with the
manufacturing, processing, packaging, sampling, storing and shipping of the
Products for Purchaser under the Supply Agreement and except as permitted by
Section 14.1 hereof, and may not be changed or modified without Purchaser's
prior written consent.
(c) In addition to any other remedies available, the restrictions and
other provisions in this Section 6.12 may be enforced by Purchaser by specific
performance, injunctive relief or any other equitable relief, and if Seller,
Parent or any of their Affiliates breaches any of such restrictions or other
provisions, Purchaser may terminate the licenses granted in this Section 6.12
immediately upon written notice to Seller.
(d) If at any time after the date hereof, Seller, Parent or any of
their Affiliates has the right to acquire any interest to any formulas, recipes,
Specifications, processes, know-how or show-how relating to the Products
included in the Purchased Assets from any third party, Seller shall, or Parent
shall or shall cause its other Affiliates in the Seller Group to, (i) use
commercially reasonable efforts to acquire such interest, (ii) not waive such
right without Purchaser's prior written consent, and (iii) notify Purchaser when
such right arises. If Seller, Parent or any of their Affiliates acquires any
such interest, they will assign such interest to Purchaser without any
additional consideration.
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ARTICLE VII
COVENANTS OF PURCHASER
Purchaser agrees to perform each of the following covenants:
7.1 Implementation Agreement.
Subject to the terms and conditions hereof, Purchaser shall take all
action required of it to fulfill its obligations under the terms of this
Agreement and shall use all commercially reasonable efforts to facilitate the
consummation of the transactions contemplated hereby. Except as otherwise
expressly permitted hereby, Purchaser agrees that it will not take any action
that would have the effect of preventing or impairing Purchaser's performance of
its obligations under this Agreement.
7.2 Consents and Approvals.
Purchaser shall use all commercially reasonable efforts to obtain all
consents, approvals, certificates and other documents required in connection
with the performance by it of its obligations under this Agreement and its
Related Agreements and the consummation by it of the transactions contemplated
hereby and thereby. Purchaser shall make, or cause to be made, all filings,
notices, applications, statements and reports to all Governmental Authorities
and other Persons that are required to be made prior to the Closing Date by or
on behalf of Purchaser or any of its Affiliates pursuant to any applicable Law
or Contract in connection with this Agreement and its Related Agreements and the
transactions contemplated hereby and thereby and shall cooperate with Seller in
making all such filings, notices, applications, statements and reports that are
required to be made prior to the Closing Date by or on behalf of Seller or any
of its Affiliates pursuant to any applicable Law in connection with this
Agreement and its Related Agreements and the transactions contemplated hereby
and thereby.
7.3 Tax Matters.
After the Closing, Purchaser shall make available to Seller (at
Purchaser's expense) such Business records as Seller may require for the
preparation of any Tax Returns or other similar governmental reports or forms
required to be filed by Seller and such Business records as Seller may require
for the defense of any audit, examination, administrative appeal or litigation
of any such Tax Return or other similar governmental report or form.
7.4 Access.
For a period of five years after the Closing Date, Purchaser shall
permit Seller, Parent and their Affiliates, and their employees, advisors and
other representatives, reasonable access to the Information and Records for the
period prior to the Closing Date. If the information so obtained is Confidential
Information, neither Seller, Parent nor any of their Affiliates shall directly
or indirectly disclose such information to any Person other than Purchaser or
its Affiliates.
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ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under Articles II and III of this
Agreement are subject to the satisfaction or waiver by Purchaser of the
following conditions precedent on or before the Closing Date:
8.1 Warranties True as of Both Present Date and Closing Date.
The representations and warranties of Seller and Parent contained
herein and in their respective Related Agreements shall have been true, accurate
and correct in all material respects on and as of the date of this Agreement,
and shall also be true, accurate and correct in all material respects on and as
of the Closing Date with the same force and effect as though made by Seller and
Parent on and as of the Closing Date.
8.2 Compliance with Agreements and Covenants.
Seller and Parent shall have performed and complied in all material
respects with all of their respective covenants, obligations and agreements
contained in this Agreement (including their respective obligations under
Section 11.2) and in their respective Related Agreements to be performed and
complied with by them on or prior to the Closing Date.
8.3 Consents and Approvals.
Purchaser shall have received written evidence satisfactory to it that
(a) all Seller Consents and the Purchaser Consents have been obtained, and no
such consent or approval shall contain any terms which, in the reasonable
judgment of Purchaser, would have a Material Adverse Effect or would have a
material adverse effect on Purchaser or its operation of the Business after the
Closing and (b) all required filings with Governmental Authorities have been
made.
8.4 No Material Adverse Change.
No Material Adverse Change shall have occurred and no event shall have
occurred which, in the reasonable judgment of Purchaser, might have a Material
Adverse Effect.
8.5 Actions or Proceedings.
No action or proceeding by any Governmental Authority or other Person
shall have been instituted or threatened which (a) might have a Material Adverse
Effect or (b) could enjoin, restrain or prohibit, or could result in substantial
damages in respect of, any provision of this Agreement or any Related Agreement
or the consummation of the transactions contemplated hereby or thereby or any
integration of the Business with that of Purchaser and its Affiliates.
8.6 Financing.
The funding contemplated by the commitment referred to in Section 5.4
shall have occurred.
8.7 Environmental Report.
Purchaser shall have received an environmental report with respect to
the Real Property that is acceptable to Purchaser in its sole discretion.
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8.8 Title Commitment.
Purchaser shall have received a commitment for a title insurance policy
for the Real Property, in accordance with to Section 6.8(b) hereof, that is
acceptable to Purchaser in its sole discretion.
8.9 Removal of Signs.
Seller shall have removed from the Real Property any and all
billboards, signs and similar objects containing the name "UniMark."
8.10 Renewal of Agreement.
Purchaser shall have received evidence of a renewal of the operating
agreement for the 144 acre grapefruit grove located near ICMOSA's plant in
Montemorelos, Mexico, that is acceptable to Purchaser in its sole discretion
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND PARENT
The obligations of Seller and Parent under Article II of this Agreement
are subject to the satisfaction or waiver by Seller and Parent of the following
conditions precedent on or before the Closing Date:
9.1 Warranties True as of Both Present Date and Closing Date.
The representations and warranties of Purchaser contained herein and in
its Related Agreements shall have been true, accurate and correct in all
material respects on and as of the date of this Agreement, and shall also be
true, accurate and correct in all material respects on and as of the Closing
Date with the same force and effect as though made by Purchaser on and as of the
Closing Date.
9.2 Compliance with Agreements and Covenants.
Purchaser shall have performed and complied in all material respects
with all of its covenants, obligations and agreements contained in this
Agreement (including its obligations under Section 11.3) and in its Related
Agreements to be performed and complied with by it on or prior to the Closing
Date.
9.3 Actions or Proceedings.
No action or proceeding by any Governmental Authority or other Person
shall have been instituted or threatened which could enjoin, restrain or
prohibit, or could result in substantial damages in respect of, any provision of
this Agreement or any Related Agreement or the consummation of the transactions
contemplated hereby or thereby.
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ARTICLE X
EMPLOYEE MATTERS
10.1 Employees.
Purchaser shall be under no obligation to hire any of Seller's
employees or to assume any obligations to such employees in connection with the
transactions contemplated hereby. Purchaser shall have the right to offer
employment to any of the Employees on terms and conditions acceptable to
Purchaser, and each Employee hired by Purchaser shall be considered a "new
hire." Neither Seller nor Parent shall, and Parent shall cause its other
Affiliates not to, interfere with Purchaser's efforts to employ any of the
Employees. Notwithstanding anything in this Agreement to the contrary, neither
Purchaser nor any of its Affiliates shall assume or otherwise be liable in
respect of, or be deemed to have assumed or otherwise be liable in respect of,
any obligation or other liability whatsoever, including liabilities or
obligations relating to (i) compensation owed to Employees, including salaries,
wages, and bonuses, (ii) employment contracts, whether written or oral, (iii)
employee benefit plans, (iv) employee fringe benefits, (v) pension plans, (vi)
plant closings or mass layoffs, (vii) severance pay, (viii) vacation pay, or
(ix) workers' compensation, or any other Employee Liability, whether accrued or
contingent, known or unknown, relating to or arising from the employment prior
to the Closing Date of any Employee hired by Purchaser or relating to any
Employee not hired by Purchaser.
ARTICLE XI
CLOSING
11.1 Closing.
The Closing shall take place at the offices of Gibson, Dunn & Crutcher
LLP, 2100 McKinney Avenue, Suite 1100, Dallas, Texas at 10:00 a.m. (local time),
on August 31, 2000, or such other time or such other date as the parties shall
otherwise agree; provided that the Closing shall not be deemed to have been
completed until all of the closing conditions set forth in Articles VIII and IX
have been satisfied. The Closing, and all transactions to occur at the Closing,
shall be effective as of 12:01 A.M. on the first day after the Closing Date.
11.2 Deliveries by Seller and Parent.
At the Closing, Seller and Parent shall deliver to Purchaser the
following:
(a) The Assignment and Assumption Agreement duly executed by Seller and
Parent and a confirmatory assignment duly executed by the parties thereto;
(b) A bill of sale in the form set forth in Exhibit B duly executed by
Seller and Parent and a confirmatory assignment duly executed by the parties
thereto;
(c) A general warranty deed or deeds (subject only to the applicable
Permitted Exceptions) conveying the Real Property;
(d) Originals of, and duly executed assignments of (to the extent that
such assignment is not made pursuant to subsection (a)), all of the Acquired
Contracts and Permits;
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(e) Title insurance policies for each parcel of Real Property issued by
Title Insurer, dated the Closing Date, each of which such policies (i) shall be
in the full amount of the portion of the Purchase Price that Purchaser
reasonably allocates to each such parcel, (ii) shall be in the form of American
Land Title Association Owner's Policy, 1970 Form B, subject only to the standard
exclusions from coverage contained in such policy and the applicable Permitted
Exceptions with full extended coverage over all general exceptions and (iii)
shall contain such endorsements as Purchaser requested pursuant to Section 6.8.
(f) An affidavit stating Seller's U.S. taxpayer identification number
and that Seller is a "United States person," as defined by Sections 1445(f)(3)
and 7701(b) of the Code;
(g) An affidavit stating Parent's U.S. taxpayer identification number
and that Parent is a "United States person," as defined by Sections 1445(f)(3)
and 7701(b) of the Code;
(h) A written statement from each Person holding a Lien (other than
Permitted Exceptions) upon any of the Purchased Assets, confirming the repayment
of the indebtedness secured thereby and the documents necessary to release such
Lien as of the Closing Date;
(i) Other instruments of transfer reasonably required by Purchaser to
evidence the transfer of the Purchased Assets to Purchaser, including
assignments with respect to any Intellectual Property registered, recorded or
filed with any Governmental Authority, in form suitable for registration,
recordation or filing with such Governmental Authority, in each case duly
executed by Seller or Parent, as applicable;
(j) A certificate, dated the Closing Date, of Seller and Parent
certifying as to the compliance by Seller and Parent with Sections 8.1 and 8 2.
(k) A certificate of the secretary of Seller certifying resolutions of
the board of directors of Seller and of the sole stockholder of Seller approving
and authorizing the execution, delivery and performance of this Agreement and
its Related Agreements and the consummation by Seller of the transactions
contemplated hereby and thereby (together with an incumbency and signature
certificate regarding the officer(s) signing on behalf of Seller);
(l) A certificate of the secretary of Parent certifying resolutions of
the board of directors of Parent approving and authorizing the execution,
delivery and performance of this Agreement and its Related Agreements and the
consummation by Parent of the transactions contemplated hereby and thereby
(together with an incumbency and signature certificate regarding the officer(s)
signing on behalf of Parent);
(m) The long-form certificate of incorporation or similar instruments
of Seller certified by the Secretary of State or equivalent Person of the
jurisdiction of incorporation of Seller, and the bylaws or similar instruments
of Seller, certified by the secretary of Seller;
(n) The long-form certificate of incorporation or similar instruments
of Parent certified by the Secretary of State or equivalent Person of the
jurisdiction of incorporation of Parent, and the bylaws or similar instruments
of Parent, certified by the secretary of Parent;
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(o) A Certificate of Good Standing for Seller from the State of Texas
and from each other state in which Seller transacts or is qualified to transact
its business as of the Closing Date;
(p) A Certificate of Good Standing for Parent from the State of Texas
and from each other state in which Parent transacts or is qualified to transact
its business as of the Closing Date;
(q) An opinion, dated the Closing Date, of Jordaan & Riley, PLLC,
counsel for Seller and Parent, in form satisfactory to Purchaser and to the
effect set forth on Exhibit F;
(r) The License Agreement duly executed by Seller;
(s) The Supply Agreement duly executed by Seller and ICMOSA;
(t) The Transition Services Agreement duly executed by Seller; and
(u) Such other documents and instruments as may be required by any
other provision of this Agreement or as may reasonably be required to consummate
the transactions contemplated by this Agreement and the Related Agreements.
11.3 Deliveries by Purchaser.
At the Closing, Purchaser shall make the payment described in Section
3.1 and deliver to Seller and parent the following:
(a) The Assignment and Assumption Agreement duly executed by Purchaser;
(b) A certificate, dated the Closing Date, of Purchaser, certifying as
to compliance by Purchaser with Sections 9.1 and 9 2;
(c) A certificate of the secretary of Purchaser certifying resolutions
of the board of directors of Purchaser approving and authorizing this Agreement
and its Related Agreements and the consummation by Purchaser of the transactions
contemplated hereby and thereby (together with an incumbency and signature
certificate regarding the officer(s) signing on behalf of Purchaser);
(d) An opinion, dated the Closing Date, of Gibson, Dunn & Crutcher LLP,
counsel for Purchaser, in form satisfactory to Seller and to the effect set
forth on Exhibit G; and
(e) The License Agreement duly executed by Purchaser;
(f) The Supply Agreement duly executed by Purchaser; and
(g) The Transition Services Agreement duly executed by Purchaser.
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ARTICLE XII
TERMINATION
12.1 Termination.
This Agreement may be terminated at any time on or prior to the Closing
Date:
(a) By the mutual written consent of Seller and Purchaser;
(b) By Purchaser, if there shall have been a material breach of any
covenant, representation or warranty of Seller hereunder or under any of its
Related Agreements which has not been waived in writing by Purchaser;
(c) By Seller, if there shall have been a material breach of any
covenant, representation or warranty of Purchaser hereunder or under any of its
Related Agreements which has not been waived in writing by Seller; or
(d) By Seller or Purchaser, if the Closing shall not have taken place
on or before September 30, 2000; provided, that the right to terminate this
Agreement under this clause (d) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before such date; or
(e) By Purchaser, pursuant to the provisions of Sections 6.8, 6.9 or
6.10.
In the event of any termination pursuant to this Section 12.1 (other
than pursuant to clause (a)), written notice setting forth the reasons therefor
shall forthwith be given by the terminating party to the other party.
12.2 Effect of Termination.
If this Agreement is terminated pursuant to Section 12.1, all
obligations of the parties hereunder shall terminate, except for the obligations
set forth in Section 15.1, which shall survive the termination of this
Agreement, and except that no such termination shall relieve any party from
liability for any prior breach of this Agreement.
ARTICLE XIII
INDEMNIFICATION
13.1 Survival.
The representations and warranties of the parties hereto contained
herein shall survive the Closing for a period of three years, except that: (i)
Tax Warranties shall survive until the Tax Statute of Limitations Date; (ii)
Environmental Health and Safety Warranties shall survive the Closing without a
time limit; (iii) Product Warranties shall survive until the latter of (a) the
expiration of the applicable statutes of limitation or (b) the expiration or
termination of any guaranty, warranty, indemnity or other contractual obligation
relating to any Product Warranty to
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which Seller or any of its predecessors in interest is subject; and (iv) Title
and Authorization Warranties shall survive without a time limit.
13.2 Indemnification by Seller and Parent.
Seller and Parent shall jointly and severally indemnify Purchaser and
its Affiliates (each a "Purchaser Indemnified Party") against, and shall to hold
each of them harmless from, any and all Losses incurred or suffered by them
relating to or arising out of or in connection with any of the following:
(a) any breach of or any inaccuracy in (or any alleged breach of or
inaccuracy in) any representation or warranty made by Seller or Parent in this
Agreement or any Related Agreement or any document delivered by Seller at the
Closing; provided, that a notice of the Purchaser Indemnified Party's claim
shall have been given to Seller during the survival period provided in Section
13.1 for the affected such representations and warranty;
(b) any breach of or failure by Seller or Parent to perform any
covenant or obligation of Seller or Parent set out or contemplated in this
Agreement or any Related Agreement or any document delivered by Seller at the
Closing;
(c) any matters identified on Schedule 4.21;
(d) any Taxes incurred by Seller or Parent, including those described
in Section 4.18;
(e) any Inventory that (i) does not comply with all federal, state and
local laws and regulations applicable to the production and distribution of food
products, (ii) does not comply with the Specifications, (iii) is not wholesome,
merchantable, and fit for human consumption, or (iv) is not adequately packaged
for normal shipping and storage;
(f) any complaints, demands, claims or legal actions alleging illness,
injury, death or damage as a result of the consumption or use of any Inventory,
except for any illness, injury, death or damage attributable to defects in the
Inventory which investigation by an independent investigator selected or
approved by Purchaser determines originated after the Closing Date and was not
attributable to any act or omission by Seller, Parent or any of their Affiliates
on or prior to the Closing Date; or
(g) any Excluded Obligations, including any debt, claim, liability or
obligation (i) relating to any Environmental Claims and any of the matters
described on Schedule 4.20 and the attachments thereto, (ii) relating to any
Employee Liabilities, (iii) relating to any Product deemed unsaleable in the
possession of any retailer and returned by such retailer within three months
after the Closing Date, or (iv) relating to or arising from the ownership or use
of the Purchased Assets or the operation or conduct of the Business on or prior
to the Closing Date.
13.3 Limitations on Certain Claims for Indemnification.
Seller and Parent shall not be required to indemnify any Purchaser
Indemnified Party against, or hold it harmless from Losses incurred or suffered
by such Purchaser Indemnified Party relating to or arising out of or in
connection with a breach of any representation or warranty (pursuant to Section
13.2(a)) made by Seller or Parent in this Agreement or any Related
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Agreement or any document delivered by Seller at the Closing, until the
aggregate of all such Losses exceeds US$10,000 (and then Seller shall pay the
full amount of such Losses). Any limitation on indemnification provided in this
Section 13.3 shall not be applicable to any indemnification as may be applicable
under any other subsection or clause to which such limitation is not also
expressly applicable.
13.4 Indemnification by Purchaser.
Purchaser agrees to indemnify Seller and its Affiliates against, and
agrees to hold each of them harmless from, any and all Losses incurred or
suffered by them relating to or arising out of or in connection with any of the
following:
(a) any breach of or any inaccuracy in (or any alleged breach of or
inaccuracy in) any representation or warranty made by Purchaser in this
Agreement or any Related Agreement or any document delivered by Purchaser at the
Closing; provided that a notice of any claim under this Section 13.4(a) shall
have been given to Purchaser during the three years next following the Closing;
(b) any breach of or failure by Purchaser to perform any covenant or
obligation of Purchaser set out or contemplated in this Agreement or any Related
Agreement or any document delivered by Purchaser at the Closing; or
(c) except as to those matters for which Seller and Parent have
indemnification obligations under Section 13.2, any Inventory defect claim
resulting from an act of Purchaser after the Closing Date in the operation of
the Business.
13.5 Notice of Claims: Assumption of Defense.
As soon as is reasonably practicable after becoming aware of a claim
for indemnification under this Agreement or the commencement of any suit, action
or proceeding by any Person not a party hereto in respect of which indemnity may
be sought under this Agreement, the Indemnified Person shall promptly give
notice to the Indemnifying Person of such claim and the amount the Indemnified
Person will be entitled to receive hereunder from the Indemnifying Person;
provided, that the failure of the Indemnified Person to give notice shall not
relieve the Indemnifying Person of its obligations under this Article XIII
except to the extent (if any) that the Indemnifying Person shall have been
actually prejudiced thereby. If the Indemnifying Person does not object in
writing to such indemnification claim within thirty (30) days of receiving
notice thereof, the Indemnified Person shall be entitled to recover promptly
from the Indemnifying Person the amount of such claim, and no later objection by
the Indemnifying Person shall be permitted. If the Indemnifying Person agrees
that it has an indemnification obligation but objects that it is obligated to
pay only a lesser amount, the Indemnified Person shall nevertheless be entitled
to recover promptly from the Indemnifying Person the lesser amount, without
prejudice to the Indemnified Person's claim for the difference. The Indemnifying
Person may, at its own expense participate in the defense of any claim, suit,
action or proceeding. The Indemnifying Person also may, at its own expense,
assume the defense of any claim, suit, action or proceeding upon (a) the written
consent of the Indemnified Person which expressly allows the Indemnifying Person
to assume such defense while reserving its rights to challenge the Indemnified
Person's indemnification claim or (b) upon notice to the Indemnified
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Person and the Indemnifying Person's delivering to the Indemnified Person of a
written agreement that the Indemnified Person is entitled to indemnification
pursuant to Section 13.2 or 13.4 for all Losses arising out of such claim, suit,
action or proceeding, at any time during the course of any such claim, suit,
action or proceeding. The immediately two preceding sentences are subject to (i)
the Indemnifying Person's counsel being reasonably satisfactory to the
Indemnified Person and (ii) the Indemnifying Person thereafter consulting with
the Indemnified Person upon the Indemnified Person's reasonable request for such
consultation from time to time with respect to such claim, suit, action or
proceeding. If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the obligation) to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Person. If, however, the Indemnified Person
reasonably determines in its judgment that representation by the Indemnifying
Person's counsel of both the Indemnifying Person and the Indemnified Person
would present such counsel with a conflict of interest, then such Indemnified
Person may employ separate counsel to represent or defend it in any such claim,
action, suit or proceeding and the Indemnifying Person shall pay the fees and
disbursements of such separate counsel. Whether or not the Indemnifying Person
chooses to defend or prosecute any such claim, suit, action or proceeding, all
of the parties hereto shall cooperate in the defense or prosecution thereof.
13.6 Settlement or Compromise.
Any settlement or compromise made or caused to be made by the
Indemnified Person or the Indemnifying Person, as the case may be, of any such
claim, suit, action or proceeding of the kind referred to in Section 13.5 shall
also be binding upon the Indemnifying Person or the Indemnified Person, as the
case may be, in the same manner as if a final judgment or decree had been
entered by a court of competent jurisdiction in the amount of such settlement or
compromise; provided, that no obligation, restriction or Loss shall be imposed
on the Indemnified Person or the Indemnifying Person, as the case may be, as a
result of such settlement without its prior written consent. The Indemnified
Person will give the Indemnifying Person at least 30 days' notice of any
proposed settlement or compromise of any claim, suit, action or proceeding it is
defending, during which time the Indemnifying Person may reject such proposed
settlement or compromise; provided, that from and after such rejection, the
Indemnifying Person shall be obligated to assume the defense of and full and
complete liability and responsibility for such claim, suit, action or proceeding
and any and all Losses in connection therewith in excess of the amount of
unindemnifiable Losses which the Indemnified Person would have been obligated to
pay under the proposed settlement or compromise.
13.7 Failure of Indemnifying Person to Act.
If the Indemnifying Person does not elect to assume the defense of any
claim, suit, action or proceeding, then any failure of the Indemnified Person to
defend or to participate in the defense of any such claim, suit, action or
proceeding or to cause the same to be done, shall not relieve the Indemnifying
Person of its obligations hereunder.
13.8 Right of Set Off.
To the extent a Purchaser Indemnified Party is entitled to
indemnification hereunder, if Seller fails or refuses to promptly indemnify such
Purchaser Indemnified Party as provided herein then, in addition to any other
rights or remedies available to Purchaser, Purchaser may
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offset the full amount to which a Purchaser Indemnified Party is entitled
against any payment or payments, if any, owed to Seller, Parent or any of their
Affiliates by Purchaser or any of its Affiliates pursuant to this Agreement, the
Supply Agreement or otherwise.
13.9 Effect of Negligence.
THE INDEMNIFICATION PROVIDED IN THIS AGREEMENT SHALL BE APPLICABLE
WHETHER OR NOT NEGLIGENCE OR STRICT LIABILITY OF THE PERSON ENTITLED TO
INDEMNIFICATION HEREUNDER IS ALLEGED OR PROVEN.
ARTICLE XIV
COVENANT NOT TO COMPETE
14.1 Covenant.
Seller and Parent jointly and severally covenant and agree with
Purchaser that for a period of five years after the Closing Date, Seller, Parent
and their Affiliates will not, directly or indirectly, alone or in association
with any Person or Persons, in any capacity as partner, shareholder, agent or
other legal or beneficial owner or otherwise, without the prior written consent
of Purchaser:
(a) In the Territory, engage or assist or invest or otherwise support
or participate in any business or activity competitive with the Business as
conducted or carried on by Seller, Parent or any of their Affiliates as of and
during the 12-month period prior to the Closing Date;
(b) Sell or agree to sell, in the Territory, processed fruit products
(including the Products but excluding any juices), whether packaged in cans,
glass, plastic or any other container, for retail sale (including grocery,
health food, club, consumer merchandise and drug stores, military commissaries
and other similar channels) or through vending;
(c) Solicit, cater to or serve, or seek to solicit, cater to or serve,
in the Territory, any Customer with products or services, or in a manner,
competitive with the Products as offered as of the Closing Date;
(d) Divert or attempt to divert, for its direct or indirect benefit, or
for the benefit of any other Person, any Customer that purchases the Products or
any of the business or patronage of any such Customer for such Products;
(e) Influence or attempt to influence any Customer of the Business to
transfer its business or patronage for the Products, directly or indirectly, to
Seller or to any other Person;
(f) Assist in any way that is competitive with the Business, be or
become interested in or associated with, in any capacity, any Person that
solicits, serves or caters to any of the Customers of the Business;
(g) Disclose to any Person any confidential knowledge, trade secrets or
information of the Business, including the names, addresses, requirements of
other information relating to Customers of the Business or to the business,
processes, techniques or procedures of or used by
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the Business (including any formulae), the prices charged to Customers of the
Business or techniques used by the Business in serving such Customers or
otherwise; or
(h) In any other manner knowingly interfere with, disrupt or attempt to
disrupt the relationship of the Business with any of its Customers, suppliers or
employees, including any employment of any of the foregoing;
Notwithstanding the foregoing provisions of this Section 14.1, Seller,
Parent and their Affiliates shall be entitled to (i) sell, for a period of 6
months from the Closing Date, the processed fruit products listed in the
Supplier Agreement dated January 27, 1998, by and between Parent and FMS
America, Inc., only to the extent required by such Supplier Agreement and in
accordance with the terms of such Supplier Agreement, (ii) continue to engage in
any business (other than the Business) in which they are presently engaged,
including the business conducted by Seller, Parent or any of their Affiliates,
wherever located, of selling such products in their food service and industrial
market segments (other than through vending), (iii) own up to two percent of the
issued and outstanding shares of capital stock of any publicly traded company
which competes with the Business or Purchaser, and (iv) sell processed fruit
products to customers outside of the Territory.
14.2 Definition of "Customer".
For purposes of Section 14.1 the term "Customer" means any Person that
is a customer of the Business on the Closing Date or was a customer at any time
during the 12-month period prior to the Closing Date, including all Major
Customers.
14.3 Territory.
The "Territory" means the Western Hemisphere (i.e. North America,
Central America and South America), excluding Mexico only.
14.4 Enforceability.
In the event of a breach of any or all of the provisions of this
Article XIV by Seller, Parent or any of their Affiliates, Purchaser, as it may
elect, shall be entitled to an injunction restraining Seller, Parent and any of
their Affiliates from such act or conduct in addition to other remedies as may
be available to Purchaser for such breach.
14.5 Severability.
If a court of competent jurisdiction should declare this Article XIV
unenforceable because of any unreasonable restriction of scope, duration and/or
geographical area, or for any other reason, then each of Seller, Parent and
Purchaser hereby acknowledge and agree that such court shall have the express
authority to reform the provisions of this Article XIV, and such provisions
shall be deemed reformed, to provide for reasonable restrictions and/or to grant
Purchaser such other relief at Law or in equity as may be reasonably necessary
to protect the interests of Purchaser in the Purchased Assets being acquired
hereunder.
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ARTICLE XV
MISCELLANEOUS
15.1 Expenses.
Except as otherwise provided herein, each party hereto shall bear its
own expenses with respect to the transactions contemplated hereby. Seller shall
pay (a) all sales, use, stamp, transfer, vehicle use, service, recording, real
estate and like taxes or fees, if any, imposed by any Governmental Authority in
connection with the transfer and assignment of the Purchased Assets, (b) all
costs of obtaining surveys and title insurance and (c) all costs of transferring
the Information and Records to Purchasers.
15.2 Amendment.
This Agreement may be amended, modified or supplemented but only in
writing signed by Purchaser and Seller.
15.3 Notices.
Any notice, request, instruction or other document to be given
hereunder by a party hereto shall be in writing and shall be deemed to have been
given (a) when received if given in person or by courier or a courier service,
(b) on the date of transmission if sent by telex, facsimile or other wire
transmission (receipt confirmed) or (c) five Business Days after being deposited
in the mail, certified or registered, postage prepaid:
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If to Seller, addressed as follows:
UniMark Foods, Inc.
124 McMakin Road
Bartonville, Texas 76226
Attention:
Facsimile No.:
If to Parent, addressed as follows:
The UniMark Group, Inc.
P.O. Box 229
Bartonville, Texas 76226-0229
Attention: President
Facsimile No.: (817) 491-1272
with a copy to:
Jordaan & Riley, PLLC
300 Crescent Court, Suite 1660
Dallas, Texas 75201
Telecopy: (214) 756-6223
If to Purchaser, addressed as follows:
Del Monte Foods
One Market
P.O. Box 193575
San Francisco, California 94119-3575
Attention: William R. Sawyers, General Counsel
Facsimile No.: 415-247-3263
with a copy to:
Gibson, Dunn & Crutcher LLP
2100 McKinney Avenue, Suite 1100
Dallas, Texas 75201
Attention: Irwin F. Sentilles, III
Facsimile No.: 214-571-2956
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
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15.4 Effect of Investigation.
Any due diligence review, audit or other investigation or inquiry
undertaken or performed by or on behalf of Purchaser shall not limit, qualify,
modify or amend the representations, warranties or covenants of, or indemnities
by, Seller made or undertaken pursuant to this Agreement or any Related
Agreement, irrespective of the knowledge and information received (or which
should have been received) by Purchaser.
15.5 Waivers.
The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by a party of any condition or of any
breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
15.6 Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, that no
assignment of any rights or obligations shall be made by Seller without the
written consent of Purchaser or by Purchaser without the written consent of
Seller, except that Purchaser may assign any or all of its rights hereunder
without such consent to any Affiliate of Purchaser.
15.7 No Third Party Beneficiaries.
This Agreement is solely for the benefit of the parties hereto, and no
provision of this Agreement shall be deemed to confer upon any other third
parties any remedy, claim, liability, reimbursement, cause of action or other
right.
15.8 Publicity.
Prior to the execution of this Agreement, except as required by Law or
the rules of any stock exchange, no public announcement or other publicity
regarding the transactions referred to herein shall be made by Purchaser or
Seller or any of their respective Affiliates, officers, directors, employees,
representatives or agents, without the prior written agreement of Purchaser and
Seller, in any case, as to form, content, timing and manner of distribution or
publication; provided, that nothing in this Section 15.8 shall prevent such
parties from discussing such transactions with those Persons whose approval,
agreement or opinion, as the case may be, is required for consummation of such
transactions. After execution of this Agreement, the existence of this Agreement
shall no longer be confidential, provided that the contents of this Agreement,
particularly the Purchase Price, shall remain confidential.
15.9 Further Assurances.
Upon the reasonable request of Purchaser, Seller or Parent shall on and
after the Closing Date execute and deliver, or cause any of their Affiliates to
execute and deliver, to Purchaser such other documents, deeds, releases,
assignments and other instruments as may be required to effectuate completely
the transfer and assignment to Purchaser of, and to vest fully in Purchaser
title to, each of the Purchased Assets, and to otherwise carry out the purposes
of this Agreement.
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If, after the Closing, Purchaser discovers that any Excluded Asset or any other
asset of Seller, Parent or any of their Affiliates is (i) material to the
operation or preservation of the Purchased Assets or is necessary for the
Purchaser to defend a claim against the Purchased Assets, the Business or
Purchaser and (ii) of the kind of asset generally described in Section 2.1 but
is not specifically referred to therein, then, upon Purchaser's written request,
Seller and Parent will use commercially reasonable efforts to transfer or
assign, or cause any Affiliate to transfer or assign, the applicable Excluded
Asset or other asset of Seller, Parent or any of their Affiliates to the
Purchaser. Seller further agrees that, from and after the Closing Date, it will
cooperate in all reasonable efforts of Purchaser to enforce or preserve its
rights in and to all Intellectual Property conveyed to Purchaser pursuant to
this Agreement.
15.10 Severability.
If any provision of this Agreement shall be held invalid, illegal or
unenforceable, the validity, legality or enforceability of the other provisions
hereof shall not be affected thereby, and there shall be deemed substituted for
the provision at issue a valid, legal and enforceable provision as similar as
possible to the provision at issue.
15.11 Remedies Cumulative.
The remedies provided in this Agreement shall be cumulative and shall
not preclude the assertion or exercise of any other rights or remedies available
under law, in equity or otherwise.
15.12 Entire Understanding.
This Agreement and the Related Agreements set forth the entire
agreement and understanding of the parties hereto with respect to the
transactions contemplated hereby and supersede any and all prior agreements,
arrangements and understandings among the parties relating to the subject matter
hereof.
15.13 Applicable Law.
This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Texas without giving effect to
the principles of conflicts of law thereof that would apply any other law.
15.14 Counterparts.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
DEL MONTE CORPORATION
By:
--------------------------------------
Name:
---------------------------
Title:
--------------------------
UNIMARK FOODS, INC.
By:
--------------------------------------
Name:
---------------------------
Title:
--------------------------
THE UNIMARK GROUP, INC.
By:
--------------------------------------
Name:
---------------------------
Title:
--------------------------
