SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) June 8, 1995
STOKELY-VAN CAMP, INC.
(Exact name of Registrant as specified in its charter)
Indiana 1-2944 35-0690290
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
Quaker Tower, P.O. Box 049001, Chicago, Illinois 60604-9001
(Address of principal executive offices)
312-222-7111
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
On June 8, 1995, The Quaker Oats Company, a New Jersey corporation ("Quaker")
and Stokely-Van Camp, Inc., an Indiana corporation, a wholly-owned subsidiary
of Quaker and the Registrant herein (the "Company"), completed the sale to
Hunt-Wesson, Inc., a Delaware corporation ("Hunt-Wesson") and a wholly-owned
subsidiary of ConAgra, Inc., of certain assets, liabilities and obligations of
its Van Camp canned bean business. The sale of the Company's Van Camp business
was part of the overall sale by Quaker of its bean, chili and related products
businesses (including the Company's Van Camp products and Quaker's Wolf Brand
products). The aggregate purchase price for such businesses was determined by
arms'-length negotiation between the Company, Quaker and Hunt-Wesson. Of the
aggregate purchase price for the businesses, $94.4 million has been allocated
to the sale of the Company's Van Camp business. The acquisition was made
pursuant to the Asset Purchase and Sale Agreement dated May 1, 1995, among the
Company, Quaker and Hunt-Wesson, as supplemented by Supplement No. 1 thereto
among such parties, dated June 8, 1995. The assets sold with respect to the
Company's Van Camp business included, among other things, machinery, equipment,
inventory, books and records, intellectual and intangible property, and the
Company's manufacturing facility in Newport, Tennessee. The liabilities
assumed consist primarily of employee vacation accruals. Major brands sold by
the Company include Van Camp's canned pork and beans and Beanee Weenee canned
beans and wieners.
Item 7. Financial Statements and Exhibits
(b) Unaudited pro forma combined financial information with respect to the
disposition of the Van Camp Business is attached as an exhibit to this Form 8-K.
(c) Exhibits (listed by numbers corresponding to the provisions of Item 601 of
Regulation S-K)
(2)(a) Asset Purchase and Sale Agreement dated May 1, 1995, among the
Company, Quaker and Hunt-Wesson.
(2)(b) Supplement No. 1 to Asset Purchase and Sale Agreement dated June 8,
1995, among the Company, Quaker and Hunt-Wesson.
(99) Unaudited pro forma combined financial information of the Company
with respect to the disposition of the Van Camp Business.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE QUAKER OATS COMPANY
By Thomas L. Gettings
Thomas L. Gettings
Vice President and
Corporate Controller
Date: June 23, 1995
3
EXHIBIT INDEX
Electronic (E) or
Exhibit Incorporated by
Number Exhibit Description Reference (IBRF)
(2)(a) Asset Purchase and Sale E
Agreement dated May 1,
1995, among the Company,
Quaker and Hunt-Wesson.
(2)(b) Supplement No. 1 to Asset E
Purchase and Sale Agreement
dated June 8, 1995, among
the Company, Quaker and
Hunt-Wesson.
(99) Unaudited pro forma combined E
financial information of the
Company with respect to the
disposition of the Van Camp
Business.
4
ASSET PURCHASE AND SALE AGREEMENT
AMONG
THE QUAKER OATS COMPANY,
STOKELY-VAN CAMP, INC.
and
HUNT-WESSON, INC.
Dated May 1, 1995
TABLE OF CONTENTS
Page No.
ARTICLE I PURCHASE OF CERTAIN ASSETS BY BUYER 1
1.1 Sale of Assets 1
1.2 Assumption of Obligations and Liabilities 4
1.3 Purchase Price and other Consideration 7
1.4 Inventory Adjustment 8
1.5 Final Settlement 9
1.6 The Closing 10
1.7 Allocation of the Purchase Price 10
1.8 Seller's Closing Obligations 11
1.9 Buyer's Closing Obligations 12
1.10 Prorations 12
1.11 Nonassignable Assumed Contracts and Permits 13
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER 14
2.1 Organization and Qualification of Seller 14
2.2 Authority of Seller 14
2.3 Litigation 15
2.4 Title to Subject Assets 15
2.5 Subject Assets Used In The Business 16
2.6 Taxes 16
2.7 Brokers and Finders 16
2.8 Environmental Compliance 16
2.9 Financial Statements 17
2.10 Contracts; Trade Deals 18
2.11 Absence of Certain Changes 18
2.12 Compliance with Laws 19
2.13 Insurance; Claims 20
2.14 Employee Benefit Plans 20
2.15 Labor Matters 20
2.16 Intellectual Property 21
2.17 Inventory 22
2.18 Customer Relations 22
2.19 [intentionally left blank] 22
2.20 Corporate Services 22
2.21 Software 22
2.22 Disclosure 22
2.23 No Other Representations or Warranties 23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER 23
3.1 Organization and Good Standing 23
3.2 Authority of Buyer 23
3.3 Brokers and Finders 24
3.4 Litigation 24
3.5 No Other Representations and Warranties 24
3.6 Disclosure 24
ARTICLE IV COVENANTS 25
4.1 Covenants of Seller 25
4.2 Covenants of Buyer 33
ARTICLE V EMPLOYEE MATTERS 34
5.1 Transferred Employees 34
5.2 Employee Benefit Transition 35
5.3 COBRA 36
5.4 Vacation 36
5.5 Disability and Workers' Compensation 36
5.6 Retiree Health 37
5.7 WARN Act 38
5.8 No Third Party Beneficiaries 38
5.9 Documents and Forms 38
ARTICLE VI CONDITIONS TO BUYER'S OBLIGATIONS 38
6.1 Accuracy of Representations and Warranties;
Performance of Agreements; Certificate
and Opinion of Counsel 38
6.2 HSR Act 39
6.3 No Proceeding or Litigation 39
6.4 Closing Deliveries 39
6.5 Secretary's Certificate 39
ARTICLE VII CONDITIONS TO SELLER'S OBLIGATIONS 40
7.1 Accuracy of Representations and Warranties;
Performance of Agreements; Certificate and
Opinion of Counsel 40
7.2 HSR Act 40
7.3 No Proceeding or Litigation 40
7.4 Closing Deliveries 41
7.5 Secretary's Certificate 41
ARTICLE VIII INDEMNIFICATION 41
8.1 Survival of Representations and Warranties and
Obligations 41
8.2 Indemnification by Seller 42
8.3 Indemnification by Buyer 43
8.4 Indemnification Procedures 44
8.5 Limits on Indemnification 45
8.6 Adjustment of Liability 45
8.7 Exclusive Remedy 46
ARTICLE IX MISCELLANEOUS 46
9.1 Termination of Agreement 46
9.2 Expenses 47
9.3 Waiver 47
9.4 Consents 47
9.5 Assignment; Parties In Interest 47
9.6 Further Assurances 48
9.7 Entire Agreement 48
9.8 Amendment 48
9.9 Limitations on Rights of Third Parties 48
9.10 Captions, Gender and "Person" 48
9.11 Counterparts; Facsimile Signatures 49
9.12 Notices 49
9.13 Governing Law and Jurisdiction 49
9.14 Bulk Sales Law 50
9.15 Transfer Taxes 50
9.16 Knowledge of Seller 50
9.17 Public Announcements 50
9.18 Schedules 50
9.19 Severability 51
9.20 Liability 51
INDEX OF EXHIBITS
Exhibits Description
1.1(h) Confidentiality and Use Restrictions
1.3 Escrow Agreement
1.8(a) Seller's Opinion
1.8(b) Form of Deed to Real Property
1.8(c-1) Assignment
1.8(c-2) Assignment of Intellectual Property
1.8(d) Bill of Sale
1.8(e) Production Agreement
1.8(h) Title Commitment
1.8(i) Transition Agreement
1.8(j) License Agreement
1.9(b) Assumption Agreement
1.9(c) Buyer's Opinion
1.9(i) Guaranty by ConAgra, Inc.
4.1(l)(i) Production Plan
4.1(l)(ii) Consolidation Budget
4.1(m) Cooperative Elevator Company Contract
INDEX OF SCHEDULES
Schedules Description
1.1(a) Real Property
1.1(b) Equipment Not on Real Property
1.1(c) Vehicles
1.1(g) Material Contracts to be Assumed
1.1(g)(i) Purchase Orders
1.1(ix) Excluded Assets
1.4(a) Inventory Valuation Procedures
1.7 Allocation of Purchase Price
1.11 Assumed Contracts and Permits Requiring Consent
2.3 Litigation
2.4(a) Permitted Liens
2.4(b) Material Equipment Not in Working Order/Subject
Assets Not Maintained
2.5 Other Assets Used in the Business
2.8 Environmental
2.9 Financial Statements
2.10(b) Material Contracts in Default or Invalid
2.10(c) Trade Deals
2.11 Absence of Certain Changes
2.12 Non-Compliance with Laws
2.13 Insurance Claims
2.14 Employee Benefit Plans
2.15 Labor Disputes Pending or Threatened
2.16 Intellectual Property
2.19 Production Consolidation
2.20 Corporate and Intercompany Services
2.21 Material Software
4.1(b) Conduct of Business
5.1 Transferred Employees
5.1.1 Benefits to be Provided to Salaried Transferred
Employees
5.6 Retiree Health Benefits and
Eligibility Requirements
9.16 Knowledge of Seller
EX-2.A
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (the
"Agreement") made and entered into this 1st day of May 1995,
among HUNT-WESSON, INC., a Delaware corporation "(Buyer"),
THE QUAKER OATS COMPANY, a New Jersey corporation ("Quaker")
and STOKELY-VAN CAMP, INC., an Indiana corporation and
wholly owned subsidiary of Quaker ("Stokely"; Quaker and
Stokely are together referred to herein as the "Seller").
W I T N E S S E T H:
WHEREAS, Seller has been and is engaged in the
business of manufacturing and selling certain bean, chili
and other products under the brand names "Van Camp's," "Wolf
Brand" and "Beanee Weenee" (such business and such products
being hereinafter referred to herein as the "Business" and
the "Products," respectively);
WHEREAS, Seller desires to sell and assign to
Buyer, and Buyer desires to purchase and assume from Seller,
certain assets and liabilities of the Business pursuant to
the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, on the basis of the respective
representations and warranties set forth herein, the
premises set forth above, and the covenants, agreements and
indemnities contained herein, the parties hereto agree as
follows:
I PURCHASE OF CERTAIN ASSETS BY BUYER
1.1 Sale of Assets.
Seller hereby agrees to sell,
assign, transfer, convey and deliver to Buyer, and Buyer
hereby agrees to purchase and accept from Seller at the
Closing (as defined in Section 1.6 hereof), all of Seller's
right, title and interest in and to the following described
assets (collectively, the "Subject Assets"):
(a) Real Property.
Fee simple title in and to the
parcels of land legally described in Schedule 1.1(a) hereto,
together with all privileges and easements appurtenant
thereto, and any and all buildings, plants, facilities,
installations, fixtures and other structures and
improvements situated or located thereon or attached thereto
(the "Real Property");
(b) Equipment.
All machinery, equipment, furniture,
tools, spare parts, maintenance equipment and supplies, and
other items of personal property (other than the Vehicles
and Inventories, which are separately referenced in Sections
1.1(c) and 1.1(d), respectively) located on the Real
Property, and also including those items listed or described
on Schedule 1.1(b) which are not located on the Real
Property, but excluding the Excluded Assets (the
"Equipment") and those items of equipment disposed of
pursuant to Section 4.1(b)(ii);
(c) Vehicles.
All Seller owned automobiles and other
Seller owned vehicles located on or about the Real Property,
including those automobiles and other vehicles described on
Schedule 1.1(c) (the "Vehicles"), but excluding the Excluded
Assets;
(d) Inventories.
All raw materials, ingredients, work-
in-process, finished goods and packaging materials
inventories located on the Real Property or at Seller's
distribution centers and owned by Seller as of the Closing
Date and used in connection with the Business (the
"Inventory");
(e) Books and Records.
All of Seller's right, title
and interest in and to all books, records and similar items
relating solely to the Business in whatever form, including,
without limitation, customer and supplier lists, market
information, records, marketing and sales plans,
correspondence and files; excluding, however, Seller's
corporate minute books and tax returns;
(f) Permits.
Subject to Section 1.11 hereof, all
permits held by Seller and relating to the operation of the
Subject Assets, to the extent assignable to Buyer (the
"Permits");
(g) Contracts.
(i) The agreement dated December 1,
1994 by and between Stokely-Van Camp, Inc., Plant and
Tennessee Distribution Center and the United Steelworkers of
America, AFL-CIO, Local Union No. 7198 (the "Union
Contract"), (ii) subject to Section 1.11 hereof, the
contracts listed in Schedule 1.1(g) hereto, (iii) the open
purchase orders having a term not in excess of 90 days or
involving payments not in excess of $100,000, which have
been entered into in the ordinary course of business and are
in effect as of the Closing Date, and all other purchase
orders which are described on Schedule 1.1(g)(i), (iv)
unfilled customer orders of the Business outstanding as of
the Closing Date and entered into in the ordinary course of
business, and (v) other written contracts and agreements
entered into in the ordinary course of business relating
solely to the Business or the operation of the Subject
Assets and which (A) are not capitalized leases, conditional
sale agreements or other similar agreements required to be
capitalized in accordance with U.S. generally accepted
accounting principles ("GAAP"), and (B) do not involve the
expenditure of money by Seller in excess of $50,000
individually, or $500,000 in the aggregate, and do not have
a remaining term in excess of 12 months. The contracts and
agreements referred to in clauses (i), (ii) and (iii) above
are hereinafter referred to as the "Material Contracts."
The foregoing contracts and agreements are hereinafter
referred to as the "Assumed Contracts";
(h) Intellectual Property.
All trademarks, trade
names, trade dress, copyrights, and patents and licenses
thereof or applications therefor relating to the Business,
including all Registered Intellectual Property (as defined
in Section 2.16 hereof) described in Schedule 2.16
(including, without limitation, all world-wide right, title
and interest of Seller (except as set forth in Section
4.1(g)) in and to the "Van Camp," "Wolf" and "Beanee Weenee"
names and marks), and all trade secrets, know-how,
technology, formulae, recipes and mixing instructions to the
extent relating to the Business, subject to the
confidentiality and use restrictions and obligations set
forth in Exhibit 1.1(h), excluding, however, the Excluded
Assets;
(i) Prepaid Expenses.
All prepaid expenses relating
to the Business or the Subject Assets other than allocated
corporate prepaid expenses (the "Prepaid Expenses");
(j) UPC Code.
The entire range of 10-digit UPC Codes
used with respect to the Wolf Brand Products, all UPC Codes
currently being used by Seller with respect to the Van Camp
Products, an additional 2,000 UPC Codes within the Van Camp
manufacturer code, and the related Van Camp family coupon
codes; and
(k) Goodwill.
All goodwill of the Business.
provided, however, that, without limitation, the Subject
Assets shall not include and Seller will retain and Buyer
will not acquire the following assets and property (the
"Excluded Assets"):
(i) cash and cash equivalents;
(ii) the accounts and notes receivable of the
Business, including any intercompany receivables;
(iii) tax refunds, tax, insurance and other
claims or rights to recoveries and similar benefits of the
Business;
(iv) rights accruing to Seller under this Agreement;
(v) the corporate seal, certificate of
incorporation, minute books, stock books, tax returns,
books of account or other records relating to the corporate
organization and governance of Quaker or Stokely;
(vi) insurance policies related to the Business;
(vii) any interest in the "Quaker" or the
"Stokely-Van Camp" name in its entirety or any similar trade
name or trademark, including Quaker's and Stokely's
corporate symbols;
(viii) any contract, agreement, commitment or
other binding arrangement, whether oral or written between
Quaker and Stokely, or between either Quaker or Stokely and
any affiliate of Quaker or Stokely; and
(ix) the assets, properties and rights
described in Schedule 1.1(ix) attached hereto.
1.2 Assumption of Obligations and Liabilities.
In partial consideration of the transfer to Buyer of the
Subject Assets, Buyer shall at the Closing assume, and shall
thereafter pay, fulfill, perform and otherwise discharge in
full when due, all of the following obligations and
liabilities of Seller related to the Business or to the
Subject Assets (collectively, the "Assumed Liabilities"):
(a) Assumed Contracts. All liabilities and
obligations accruing after the Closing Date under the
Assumed Contracts;
(b) Permits. All liabilities and obligations accruing
after the Closing Date under the Permits;
(c) Employee Matters. All liabilities and obligations
relating to employees, employee matters and employee
benefit, welfare and other plans as provided in Article V;
and
(d) Trade Deals.
(i) All off-invoice allowances
described in Schedule 2.10(c) to the extent related to
invoices issued by Buyer after the Closing Date and all
other off-invoice allowance programs established by Buyer;
(ii) all coupons issued by Seller with respect to Products
and described in Schedule 2.10(c) to the extent submitted to
the clearinghouse more than 90 days after the Closing Date;
(iii) all coupons issued by Buyer after the Closing Date
with respect to the Products; and (iv) bill-back or lump sum
allowances described in Schedule 2.10(c) with respect to
sales of Products by Buyer after the Closing Date and all
other bill-back or lump sum allowances established by Buyer.
Notwithstanding anything to the contrary above, except to
the extent otherwise provided herein, Buyer shall not assume
or in any way be liable or responsible for any other
liabilities or obligations of Seller, including any of the
following liabilities and obligations of Seller (the
"Excluded Liabilities"):
(i) any profit or loss derived from the sale
provided for by this Agreement;
(ii) any liability or obligation under any
contract, agreement, commitment or other binding
arrangement, whether oral or written, that is designated as
an Excluded Asset pursuant to the proviso to Section 1.1
and the Schedules referred to therein;
(iii) any liability or obligation relating to
any indebtedness for borrowed money or accounts payable owed
by Seller to any third party, other than payments due after
Closing pursuant to that certain Agreement dated June 1,
1980, between Stokely and Newport Utilities Board for the
Town of Newport, Tennessee;
(iv) any accounts payable of the Business as
of the Closing Date;
(v) except as provided in Article V, any
liability or obligation of Seller to Transferred Employees
(as defined in Section 5.1 hereof) arising prior to the
Closing Date or any liability or obligation to any other
employee or former employee of Seller;
(vi) all liabilities and obligations with
respect to any return, repair, replacement or warranties
relating to any Products which were manufactured or sold by
the Business prior to the Closing Date, except as set forth
in Section 4.2(d) and except for obligations with respect to
defects in Products caused by Buyer's negligence or
mishandling of such Products;
(vii) all liabilities and obligations for
personal injury, other injury to persons or property damage
resulting from, caused by or arising out of, use or exposure
to any of the Products which were manufactured or sold by
the Business prior to the Closing Date, except as set forth
in Section 4.2(d) and except for obligations with respect to
defects in Products caused by Buyer's negligence or
mishandling of such Products;
(viii) except as otherwise provided in this
Agreement, any liability or obligation of Seller for any
taxes (including interest and penalties thereon) imposed on
or measured by Seller's income or any liability or
obligation of Seller for any withholding taxes, Social
Security taxes, unemployment taxes, excise taxes, capital
stock taxes, sales taxes, use taxes, gross receipt taxes or
other federal, state or local taxes of any nature (including
all penalties) with respect to any time period;
(ix) except as otherwise provided in this
Agreement, any liability or obligation of Seller for any
lease agreement or any other contract or agreement or for
any trade or promotional programs, advertising, coupons or
similar programs;
(x) any liability or obligation of Seller
arising out of or resulting from any breach by Seller on or
prior to Closing of any lease, contract or other agreement
to which Seller is a party, whether or not such agreements
are assumed by Buyer hereunder;
(xi) any liability or obligation of Seller
arising out of or resulting from any violation of federal,
state or local laws or regulations, other than environmental
laws and regulations;
(xii) any liability or obligation of Seller
arising out of or resulting from any violation of any
federal, state or local environmental laws and regulations;
or
(xiii) any claims, actions, suits, proceedings,
arbitrations, or litigation set forth in Schedules 2.3 and
2.15.
1.3 Purchase Price and other Consideration. The aggregate cash
purchase price payable by Buyer to Seller for the Subject Assets is one hundred
sixty-five million six hundred fifty thousand and 00/100 dollars
($165,650,000.00) (subject to adjustment as provided in Sections 1.4
and 1.10)(the "Purchase Price"), and the assumption by Buyer of the
Assumed Liabilities pursuant to the assumption agreement in the form
attached hereto as Exhibit 1.9(b) (the "Assumption Agreement"). One
hundred sixty-three million seven hundred fifty thousand and 00/100
dollars ($163,750,000.00) of the Purchase Price will be payable to
Seller by Buyer on the Closing Date, by wire transfer of
immediately available U.S funds to a account designated in writing
by Quaker to Buyer not less than two business days prior to the
Closing Date and one million nine hundred thousand dollars ($1,900,000.00)
(the "Escrow Amount") of the Purchase Price shall be deposited by Buyer
with Harris Trust & Savings Bank (the "Escrow Agent") to be held and
released by the Escrow Agent pursuant to the Escrow Agreement
attached hereto as Exhibit 1.3 (the "Escrow Agreement"). The
balance of the Purchase Price, if any, shall be paid on
the Settlement Date. For purposes of this Agreement the term
"Estimated Payment" shall mean $165,650,000.
1.4 Inventory Adjustment.
(a) Within fifteen (15) days of the Closing Date,
Seller shall take a complete physical count of the Inventory
of the Business and shall adjust such physical count to the
Closing Date based on shipments, purchases and production
during such period. Such physical count and adjustment
shall be conducted pursuant to the procedures set forth in
Schedule 1.4(a) and Buyer and its accountants shall be
entitled to observe such physical count. Based on the
result of such physical count and such adjustment, within
thirty (30) days after the Closing Date, Seller shall
deliver to Buyer a statement (the "Preliminary Closing
Inventory Statement") indicating the actual value of the
Inventory transferred to Buyer as of the Closing Date (the
"Preliminary Closing Inventory Amount"). For purposes of
the Preliminary Closing Inventory Statement, Inventory shall
be valued in accordance with the procedures and principles
set forth on Schedule 1.4(a). Buyer and its representatives
shall have the right to review all work papers and
procedures used to prepare the Preliminary Closing Inventory
Statement and shall have the right to perform any other
reasonable procedures necessary to verify the accuracy
thereof. Each party shall bear its own expenses incurred in
connection with the above procedures.
(b) Unless Buyer, within thirty (30) days after
delivery to Buyer of the Preliminary Closing Inventory
Statement, notifies Seller in writing that it objects to the
Preliminary Closing Inventory Statement, and specifies the
basis for such objection, such Preliminary Closing Inventory
Statement shall become final, binding and conclusive upon
the parties for purposes of this Agreement. The parties
shall use their respective best efforts to resolve any
objections within thirty (30) days after receipt of such
notification, if given, and, if so given, the Preliminary
Closing Inventory Statement shall not be final until all
objections are resolved and such resolutions incorporated in
the Preliminary Closing Inventory Statement. In the event
that the Buyer and Seller are unable mutually to resolve
objections, if any, to the Preliminary Closing Inventory
Statement within such 30-day time period, Seller and Buyer
shall submit their objection(s) to the Preliminary Closing
Inventory Statement to Price Waterhouse & Co. or such other
independent auditor as mutually agreed to by the parties
(the "Arbitrator"). The Arbitrator shall review all matters
in dispute and render within sixty (60) days written
decisions resolving such matters, which decisions shall be
final and binding on the parties. The procedures for any
arbitration pursuant to this Section shall be governed by
the rules and regulations promulgated by the American
Arbitration Association; provided that all disputed matters
shall be resolved by the Arbitrator in accordance with the
provisions of this Section. A fraction of the fees and
disbursements of the Arbitrator, the numerator of which is
the amount by which Seller's valuation of the items in
dispute exceeds the Arbitrator's determination of the
valuation of the items in dispute, and the denominator of
which is the difference between Seller's and Buyer's
valuation of the items in dispute, shall be borne by Seller,
and the remainder of such fees and disbursements of the
Arbitrator shall be borne by Buyer. For purposes of this
Agreement, the "Final Closing Inventory Statement" shall
mean the Preliminary Closing Inventory Statement as adjusted
to reflect such resolutions, and the "Closing Inventory
Amount" shall mean the Inventory value as reflected in the
Final Closing Inventory Statement.
(c) If the value of the Closing Inventory Amount is
lower than $19,000,000, then the Purchase Price shall be
decreased dollar for dollar by the amount of the difference.
(d) If the value of the Closing Inventory Amount
exceeds $19,000,000, then the Purchase Price shall be
increased dollar for dollar by the amount of such excess.
1.5 Final Settlement.
The Settlement of the Purchase
Price shall take place within ten (10) days following
completion of the Final Closing Inventory Statement (the
"Settlement Date"). On the Settlement Date, Buyer shall pay
to Seller the amount (if any) by which the Closing Inventory
Amount exceeds $19,000,000 (and in the event of such excess,
Buyer and Seller shall cause the Escrow Agent to release to
Seller the Escrow Amount) or, alternatively, the Seller
shall pay (or cause the Escrow Agent to pay) to Buyer the
amount (if any) by which $19,000,000 exceeds the Closing
Inventory Amount and, after Buyer has been paid in full,
Buyer and Seller shall cause the Escrow Agent to release to
Seller the balance of the Escrow Amount; provided, however,
the amount of such payments shall be adjusted to reflect the
amount of any payments made pursuant to the last sentence of
this Section 1.5. All payments pursuant to this Section 1.5
shall be made by wire transfer of immediately available
funds and shall include interest on the amount due from the
Closing Date through the Settlement Date at an annual rate
of 7% calculated on the basis of a 360-day year, comprised
of twelve 30-day months (the "Agreed Rate"); it being hereby
acknowledged and agreed that Buyer shall not be obligated to
pay any separate interest in respect of funds held by the
Escrow Agent pursuant to the Escrow Agreement. Any
undisputed or resolved amounts under Section 1.4 shall be
payable (or released from escrow, as applicable) within five
(5) days of the date such amount is determined to be
undisputed or resolved, with interest at the Agreed Rate
(except as otherwise set forth in this Section 1.5), even if
other amounts continue to be disputed or unresolved.
1.6 The Closing.
The closing of the sale and purchase
contemplated herein (the "Closing") shall be effective and
shall take place on June 1, 1995, at the offices of The
Quaker Oats Company, 321 N. Clark St., Chicago, Illinois, or
as soon thereafter as practicable, but not later than three
days after all conditions to each party's obligation to
close hereunder shall have been satisfied or waived. The
day on which the Closing actually takes place is referred to
herein as the "Closing Date". The Closing shall be deemed
to have occurred on the close of business on the Closing
Date.
1.7 Allocation of the Purchase Price.
The Purchase
Price and the Assumed Liabilities shall be allocated among
the Subject Assets in accordance with the requirements of
Section 1060 of the Internal Revenue Code of 1986, as
amended (the "Code") and in the manner set forth in Schedule
1.7. Seller and Buyer shall make all appropriate tax
filings on a basis consistent with such allocation. The
parties shall exchange drafts of any information returns
required by Section 1060 of the Code, and all similar state
statutes, ten days prior to filing any such return.
1.8 Seller's Closing Obligations. At the Closing,
Seller shall deliver to Buyer the following:
(a) An opinion of counsel in the form attached hereto
as Exhibit 1.8(a).
(b) Duly executed deeds in the forms attached hereto
as Exhibit 1.8(b), transferring the Real Property to Buyer.
(c) A duly executed assignment of all of Seller's
right, title and interest under the Assumed Contracts and
the Permits, in the form of Exhibit 1.8(c-1) hereto, and a
duly executed assignment of all of Seller's right, title and
interest in the intellectual property, in the form of
Exhibit 1.8(c-2) hereto.
(d) A bill of sale in the form of Exhibit 1.8(d)
hereto transferring the other Subject Assets to Buyer.
(e) A duly executed counterpart original of the
Production Agreement in the form attached hereto as Exhibit
1.8(e) (the "Production Agreement").
(f) All documents necessary to transfer to Buyer title
to any motor vehicles that are included in the Subject
Assets.
(g) The officer's certificate referred to in Section
6.1(c).
(h) Title commitments in the amount of $20,000,000, in
the aggregate, attached hereto as Exhibit 1.8(h) marked down
to the date of Closing. As soon as practicable following
Closing, Seller shall cause the Policies (as defined in
Section 4.1(j), to be delivered to Buyer. The cost of such
Policies and the cost of the survey of the Real Property
shall be split equally between Seller and Buyer; provided,
however, that Seller alone shall bear the cost of additional
insurance to remove exceptions to the title commitment.
(i) A duly executed counterpart original of the
Transition Services Agreement in the form attached hereto as
Exhibit 1.8(i) (the "Transition Agreement").
(j) A duly executed counterpart original of the
License Agreement attached hereto as Exhibit 1.8(j) (the
"License Agreement").
(k) A duly executed counterpart original of the Escrow
Agreement.
1.9 Buyer's Closing Obligations. At the Closing,
Buyer shall deliver to Seller (or the Escrow Agent, as the
case may be) the following:
(a) The Estimated Payment referred to in Section 1.3
to the Escrow Agent and the Seller in the manner set forth
therein.
(b) A duly executed Assumption Agreement in the form
attached hereto as Exhibit 1.9(b).
(c) An opinion of counsel in the form attached hereto
as Exhibit 1.9(c).
(d) A duly executed counterpart original of the
Production Agreement.
(e) The officer's certificate referred to in Section
7.1(c).
(f) A duly executed counterpart original of the
Transition Agreement.
(g) A duly executed counterpart original of the
License Agreement.
(h) A duly executed counterpart original of the Escrow
Agreement.
(i) The Guaranty attached hereto as Exhibit 1.9(i)
executed by ConAgra, Inc.
1.10 Prorations.
Within 30 days after the Closing, all
items listed below relating to the Business and the Subject
Assets will be prorated as of the Closing Date, with Seller
liable to the extent such items relate to any time period up
to and including the Closing Date, and Buyer liable to the
extent such items relate to all periods subsequent to the
Closing Date: personal property, real estate, occupancy and
water taxes, if any, assessed for 1995 on or with respect to
the Business or the Subject Assets; rents, taxes and other
items due to Seller or payable by Seller under any Assumed
Contract; the amount of any license or registration fees
with respect to any licenses or registrations which are
being assigned or transferred hereunder; the amount of sewer
rents and charges for water, telephone, electricity and
other utilities and fuel; and any other items which are
normally prorated in connection with similar transactions,
Seller agrees to furnish Buyer with such documents and other
records as Buyer reasonably requests in order to confirm all
adjustments and proration calculations made pursuant to this
Section 1.10. The net aggregate amount of such prorations
shall be treated as an adjustment to the Purchase Price paid
by Buyer to Seller. Such proration and adjustment shall be
completed as soon as practicable following Closing. If
current payments with respect to items to be prorated
pursuant to this Section 1.10 are not ascertainable on or
before such proration settlement date, such payments shall
be prorated on the basis of the most recently ascertainable
bill therefor and shall be reprorated between Seller and
Buyer when the current bills with respect to such items have
been issued and a cash settlement shall be made promptly
thereafter on an item by item basis.
1.11 Nonassignable Assumed Contracts and Permits.
(a) To the extent that any Assumed Contract or Permit
is not capable of being assigned or transferred without the
consent or waiver of the other party thereto or any third
party (including a government or governmental unit), or if
such assignment or transfer or attempted assignment or
transfer would constitute a breach thereof or a violation of
any law, decree, order, regulation or other governmental
edict, this Agreement shall not constitute an assignment or
transfer thereof, or an attempted assignment or transfer of
any such Assumed Contract or Permit.
(b) Anything in this Agreement to the contrary
notwithstanding, Seller is not obligated to transfer to
Buyer (and Buyer is not required to assume) any of its
rights and obligations in and to any of the Assumed
Contracts or Permits without first having obtained all
necessary consents and waivers. Prior to the Closing Date,
Seller shall use its reasonable efforts (which shall not
require Seller to incur any financial or onerous obligation)
to obtain consents to those Assumed Contracts and Permits
listed in Schedule 1.11. Prior to and for a reasonable
period of time after the Closing Date, not to exceed ninety
(90) days, Seller shall cooperate with Buyer to assist Buyer
in obtaining any other consents and waivers under any
Assumed Contract or Permit which are reasonably requested by
Buyer.
(c) If any such consent cannot be obtained, Seller and
Buyer will cooperate in any reasonable arrangement desired
to obtain for Buyer all benefits and privileges of the
applicable lease, contract or other agreement while
protecting Seller from continuing liabilities or obligations
thereunder.
II REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as
follows:
2.1 Organization and Qualification of Seller.
Quaker is a corporation duly organized, validly existing and
in good standing under the laws of New Jersey. Stokely is a
corporation duly organized, validly existing and in good
standing under the laws of Indiana. Seller has full
corporate power, authority and qualification to own or lease
the Subject Assets and to conduct the Business in the manner
and in the places where the Subject Assets are owned or
leased or the Business is conducted by it, and to make this
Agreement and any other agreements contemplated hereby, and
to incur and perform its obligations hereunder and
thereunder.
2.2 Authority of Seller.
All necessary corporate
action has been taken by Seller to authorize the execution,
delivery and performance by Seller of this Agreement and the
transactions contemplated hereby, and this Agreement is and
will be after its execution by all of the parties hereto,
the legal, valid and binding obligation of Seller in
accordance with its terms. The execution, delivery and
performance of this Agreement and the transactions
contemplated hereby does not and will not violate, conflict
with or constitute a breach of (a) any provision of the
articles of incorporation, by-laws, charter or equivalent
organizational document of Quaker or Stokely, (b) subject to
receipt of consents to assignment of the Assumed Contracts
and Permits listed in Schedule 1.11, any provision of, or
result in a default under, any mortgage, lien, note, loan
agreement, debenture, contract or agreement, order,
arbitration award, judgment or decision of any court or
governmental authority to which Seller is a party or by
which it is now bound or will be bound as of the Closing
Date, other than immaterial defaults and breaches or (c)
subject to compliance with the HSR Act, any provision of
law, statute, rule or regulation to which Seller is subject.
2.3 Litigation.
Except as set forth in Schedule 2.3,
(a) there are no claims, product recalls, actions, suits,
proceedings or investigations pending or, to Seller's
knowledge, threatened by or against Seller that are material
with respect to (i) the Business, (ii) the Subject Assets,
or (iii) the transactions contemplated hereby, at law or in
equity, before or by any Federal, state, municipal, foreign
or other governmental department, commission, board, agency,
instrumentality or authority and (b) there are no orders,
decrees or judgments pending or in effect against Seller
that are material with respect to (i) the Business, (ii) the
Subject Assets, or (iii) the transactions contemplated
hereby or that will affect the conduct of the Business by
Buyer after the Closing. To the knowledge of Seller,
Schedule 2.3 sets forth a list and description of material
actions, suits, proceedings, product recalls or formal
investigations occurring within three (3) years prior to the
date hereof.
2.4 Title to Subject Assets.
Seller has fee simple
and marketable title to the Real Property, free and clear of
any liens, charges, pledges, security interests, easements,
encroachments, mortgages, restrictions or other encumbrances
(collectively, "Liens"), subject only to (i) matters
specifically set forth in Schedule 2.4(a); (ii) taxes which
are not yet due and payable; (iii) any existing applicable
building and zoning ordinances; and (iv) Liens disclosed, as
of the Closing Date, as exceptions on a Policy, an updated
title insurance commitment delivered on or before the
Closing Date, or the Distribution Center Survey which are
not cured or removed, pursuant to Section 4.1(j). Except
for intellectual property (as to which no representation or
warranty hereby is made in this Section 2.4), Seller has
good and valid title to all of the other Subject Assets free
and clear of any Liens except for that portion of the
Inventory and Equipment disposed of in a manner permitted or
contemplated by this Agreement. The exceptions to title
referred to above are collectively referred to herein as the
"Permitted Liens". Except as set forth in Schedule 2.4(b),
all material Equipment is in working order and the Subject
Assets have been maintained in all material respects in
accordance with reasonable business and maintenance
practices.
2.5 Subject Assets Used In The Business.
Except as
set forth in Schedule 2.5, the Subject Assets constitute all
of the assets currently used in the conduct of the Business.
Seller has not sold, assigned, moved or disposed of any
assets used in the Business in contemplation of the
transactions contemplated herein (other than the move of
assets from Dallas, Texas to Newport, Tennessee), other than
in the ordinary course of business.
2.6 Taxes.
There are no pending or, to Seller's
knowledge, threatened actions or proceedings, assessments or
collections of taxes of any kind with respect to the
Business that could subject Buyer to any liability for such
taxes for the period on or prior to the Closing Date or
could impair any of the Subject Assets.
2.7 Brokers and Finders.
Seller has not employed any
broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the
transactions contemplated by this Agreement.
2.8 Environmental Compliance. Except as set forth on
Schedule 2.8:
(a) Seller is conducting the Business on the Real
Property in material compliance with the federal, state, or
local laws, rules or regulations in effect as of the date of
this Agreement which are applicable to the Real Property and
relate to environmental matters, including the Comprehensive
Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), the Resource Conservation and Recovery Act
of 1976 ("RCRA"), the Federal Water Pollution Control Act,
the Clean Air Act, the Hazardous Materials Transportation
Act, the Toxic Substances Control Act, the Safe Drinking
Water Act, and any other Federal environmental laws, as such
environmental laws have been amended from time to time, and
similar state and local laws, and regulations in effect as
of the date of this Agreement which implement such laws
(collectively referred to as "Environmental Laws");
(b) Since January 1, 1993, Seller has not received any
written notice, or, to its knowledge, verbal notice, that it
is in non-compliance in any material respect with the
Environmental Laws relating to the Real Property or the
operations therefrom. To the extent that Seller has
received any such written or verbal notice for periods prior
to January 1, 1993, such condition has been remediated or
resolved;
(c) Since January 1, 1993, there has been no spill,
discharge, release, leak or disposal of Hazardous Materials
on or from the Real Property which would cause liability
under the Environmental Laws. For purposes of this
Agreement, "Hazardous Materials" shall mean (i) any
"hazardous waste" as defined by RCRA, (ii) any "hazardous
substance" as defined by CERCLA, (iii) any oil, petroleum
products, and their by-products and (iv) any other hazardous
substances or pollutants or contaminants governed by
applicable federal, state or local environmental law. To
the extent that there has been such a spill, discharge,
release, leak or disposal of Hazardous Materials by Seller
prior to January 1, 1993, the condition has been remediated
or resolved;
(d) There are no underground storage tanks located on
the Real Property and no underground storage tanks have been
removed from the Real Property since January 1, 1991; and
(e) The buildings and improvements on the Real
Property do not contain any asbestos or asbestos containing
material or any polychlorinated biphenyls.
2.9 Financial Statements.
Attached as Schedule 2.9
are the following financial statements of the Business:
Statement of Inventory and Net Property as of December 31,
1994, Financial Summary - Direct Contribution for the fiscal
years ended June 30, 1994, June 30, 1993, and June 30, 1992
and Financial Summary - Direct Contribution for the period
beginning July 1, 1994 and ending March 31, 1995 (the
"Financial Statements"). Except as noted in the Financial
Statements, or otherwise in Schedule 2.9, the Financial
Statements:
(a) were prepared from the books and records of
Seller;
(b) have been prepared in accordance with GAAP,
applied on a consistent basis for all periods presented,
have been prepared by means of following consistent
application of internal accounting practices in use by
Seller, and fairly present, in all material respects, the
inventory and net property of the Business as of the date
set forth therein and the direct contribution of the
Business for the periods indicated in accordance with GAAP;
and
(c) do not contain any items of special or
nonrecurring income or any other income not earned in the
ordinary course of business.
2.10 Contracts; Trade Deals.
(a) Schedule 1.1(g) discloses material contracts
relating to the Business, whether oral or written. True and
complete copies of each written material contract and true
and complete written summaries of each oral material
contract (together with any and all modifications,
amendments or supplements thereto) have been delivered to
Buyer prior to execution of this Agreement. The Equipment
situated at Seller's Newport, Tennessee plant is owned (and
not leased) by Seller, except as set forth in Schedule
1.1(g) and except for those leases which are not material
within the parameters set forth in Section 1.1(q)(v).
(b) Except as set forth in Schedule 2.10(b), all
Material Contracts are valid and in full force and effect,
except to the extent the enforceability thereof may be
affected by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting
creditors' rights and remedies generally, or general
principles of equity. To Seller's knowledge, except as set
forth in Schedule 2.10(b), no material default exists under
any Material Contract and there does not exist any event
that, with notice or lapse of time or both, would constitute
an event of default or result in a right to accelerate, or
loss of rights of Seller under any Material Contract.
(c) Except with respect to the trade deals which are
described (by customer and geography) in Schedule 2.10(c),
Seller is not a party to, has not issued, and is not
obligated with respect to, any off-invoice allowances,
coupons or bill-backs with respect to the Products. All
bill-backs are on a rate per case basis or as otherwise
described in Schedule 2.10(c).
2.11 Absence of Certain Changes.
Except as set forth
in Schedule 2.11, with respect to both the Business and
Subject Assets, Seller has not, since December 31, 1994:
(a) permitted or allowed any of the Subject Assets to
be mortgaged, pledged or subjected to any Lien, other than
Permitted Liens;
(b) changed its method of accounting for, or valuing,
inventory or prepaid expenses;
(c) sold, transferred or leased any of the Subject
Assets, other than sales of Inventory (including disposal of
obsolete, damaged or defective Inventory) in the ordinary
course of business and other than the disposition of
immaterial assets in the ordinary course of business;
(d) made any material changes in its accounting
systems, policies, or principles or practices;
(e) operated the Business other than in the ordinary
course;
(f) made any change in the rate or nature of the
compensation (including wages, salaries, bonuses or benefits
under employee benefit plans) which has been paid, or will
be paid or payable, to any employee of the Business other
than changes in the ordinary course of business consistent
with past practices;
(g) with respect to the Business, entered into any
transaction, contract or commitment which, by reason of its
size, nature or otherwise, is not in the ordinary course; or
(h) agreed, whether in writing or otherwise, to take
any of the actions set forth in this Section 2.11.
Since December 31, 1994, there has been no material adverse
change in or with respect to the financial condition,
operations, assets or results of operations of the Business,
other than changes resulting from general economic
conditions and other than general business changes reflected
in trends of the Business previously disclosed to Buyer by
Seller.
2.12 Compliance with Laws.
Except as set forth in
Schedule 2.12, Seller is conducting the Business in
compliance in all material respects with all statutes, laws,
rules, regulations, ordinances, decrees and orders
applicable to the ownership of the Subject Assets and the
operation of the Business which are in effect as of the date
hereof (excluding those relating to environmental matters
which are separately addressed in Section 2.8 above), and
has not received any written, or to its knowledge, oral
notice that it is in noncompliance with any such statutes,
laws, rules, regulations, ordinances, decrees or orders.
2.13 Insurance; Claims.
Seller has maintained a
reasonable and customary program of insurance (which may
have included self-insurance) with respect to the Subject
Assets. Schedule 2.13 contains a list of all property damage
and personal injury claims against Seller with respect to
the Business during the past two years involving any claim
in excess of $50,000.
2.14 Employee Benefit Plans.
Schedule 2.14 hereto
contains a true and complete list of each plan, contract,
program and arrangement, including, without limitation, each
pension, bonus, deferred compensation, incentive
compensation, stock purchase, supplemental retirement,
severance or termination pay, stock option, hospitalization,
medical, life insurance, dental, disability, salary
continuation, vacation, relocation benefits, special
compensation arrangements, expense reimbursements, supple
mental unemployment benefits, profit-sharing, retirement,
union contract and each other employee benefit plan,
program, policy or arrangement, maintained, contributed to,
or required to be contributed to, by Seller for the benefit
of any Transferred Employee described in Article V. No
Transferred Employee is entitled to vacation or sick leave
benefits "carried-over" from periods prior to January 1,
1995 except for (i) 58 days of vacation benefits "carried-
over" for certain salaried employees, and (ii) hourly
employees for vacation or sick leave benefits "carried-over"
for periods from the most recent anniversary of each
employee's respective date of hire.
2.15 Labor Matters.
The Business has not, within the
last three years, suffered any strike, slowdown, picketing
or work stoppage of a material nature by its employees.
Except as set forth on Schedule 2.15, there are no material
disputes relating to the Business pending or to the
knowledge of Seller, threatened, between Seller and any of
the current or past employees of the Business, including,
without limitation, any material disputes between Seller and
any union representing employees of the Business. Except
for the Union Contract, Seller is not a party to any
collective bargaining agreement relating to the Business.
2.16 Intellectual Property.
(a) Registered Intellectual Property. Schedule 2.16
contains a list and description of all of the registered
trademarks, trade names, copyrights, and patents and
applications therefor, which are owned by Seller and used in
the Business, including, without limitation, all trademark
registrations or applications therefor (whether U.S. or
foreign) for "Van Camp," "Wolf" and "Beanee Weenee" (or
combinations or derivations thereof) (the "Registered
Intellectual Property"). The U.S. Registered Intellectual
Property is owned by Seller free and clear of all Liens and,
except as set forth in Schedule 2.16, is not subject to any
license or similar arrangements. All U.S. federal trademark
registrations and, to Seller's knowledge, the foreign
trademark registrations with respect to Registered
Intellectual Property are valid and subsisting. Except as
set forth in Schedule 2.16, none of the U.S. Registered
Intellectual Property is the subject of any pending adverse
claim, or to the knowledge of Seller, any threatened
litigation or claim of infringement. To the knowledge of
Seller, and except as set forth in Schedule 2.16, there is
not any infringing use of the U.S. Registered Intellectual
Property by any person.
(b) Unregistered Intellectual Property. To the
knowledge of Seller, except as set forth in Schedule 2.16,
(i) no impediment exists to the Seller's use, ownership or
right to transfer of unregistered know-how, technology,
trade dress or other intellectual property (the
"Unregistered Intellectual Property"), (ii) Seller has not
sold, transferred, licensed, or otherwise assigned all or
any part of the Unregistered Intellectual Property, (iii)
the Unregistered Intellectual Property is not subject to any
Liens, and (iv) none of the Unregistered Intellectual
Property is the subject of any pending adverse claims, any
threatened litigation or claim of infringement and there is
no infringing use of the Unregistered Intellectual Property
by any person.
(c) Licenses. Seller has not licensed from any third
party any recipe, trademark, copyrights, trade dress,
patent, know-how, technology or other intellectual property
(except software) for use in the Business.
(d) Infringing Uses. To the knowledge of Seller,
neither the ownership or operation by Seller of the Business
or the Subject Assets, nor the production or sale of the
Products, infringes upon, or conflicts with, any
intellectual property rights of any third party.
2.17 Inventory.
Except to the extent "written down" or
"written off" in the Final Closing Inventory Statement, the
items of Inventory sold hereunder consist of products
manufactured in accordance with, or otherwise conforming to,
Seller's specifications and do not contain quality defects.
Such inventory has been manufactured, mixed, packaged and
labeled in accordance with applicable laws. Except to the
extent "written-down" or "written-off" in the Final Closing
Inventory Statement, the Inventory does not include any
obsolete items.
2.18 Customer Relations.
To the knowledge of Seller,
as of the date hereof, the relationship of the Business with
its largest 10 customers is satisfactory, and, to Seller's
knowledge, it has not received any notice of any intention
to terminate or materially modify any of such relations.
2.19 [intentionally left blank].
2.20 Corporate Services.
Schedule 2.20 describes
categorically all corporate and intercompany services
provided by Seller and its other divisions and subsidiaries
to the Business and material intercompany transactions
between the Business and Seller or its other divisions or
subsidiaries.
2.21 Software.
Set forth on Schedule 2.21 is a list of
all material software used by Seller in the Business.
Seller shall cooperate with Buyer in assisting with the
licensing by Buyer of any such software which Buyer intends
to use after the Closing Date. If any of such software is
owned by Seller, Seller shall grant a perpetual, royalty-
free, non-exclusive license to Buyer to use such software in
connection with the Business, together with any other
software owned by Seller and used in the Business.
2.22 Disclosure.
To the knowledge of Seller, the
representations and warranties of Seller contained herein,
and the information contained in the Exhibits and Schedules
hereto, are not false or misleading in any material respect
and do not contain any material misstatement of fact and do
not omit to state any material facts required to be stated
to make the statements therein not misleading in light of
the circumstances in which made.
2.23 No Other Representations or Warranties.
Except for
the representations and warranties contained in this Article
II, neither Seller nor any other person or entity makes any
other express or implied representation or warranty on
behalf of Seller or its affiliates, and Seller hereby
disclaims any such representation or warranty, with respect
to the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby or with
respect to the Subject Assets or the Business,
notwithstanding the delivery or disclosure to Buyer, any of
its officers, directors, employees, agents or
representatives of any documentation or other information by
or on behalf of Seller or any affiliate with respect to any
one or more of the foregoing, including, without limitation,
any projections or forecasts made by Seller or delivered to
Buyer by or on behalf of Seller.
III REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 Organization and Good Standing. Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of Delaware with full corporate
power, authority and qualification to make this Agreement
and any other agreements contemplated hereby, and to incur
and perform its obligations hereunder and thereunder.
3.2 Authority of Buyer. All necessary corporate
action has been taken by Buyer to authorize the execution,
delivery and performance by Buyer of this Agreement and the
transactions contemplated hereby, and this Agreement is and
will be after its execution by all of the parties hereto,
the legal, valid and binding obligation of Buyer in
accordance with its terms. The execution, delivery and
performance of this Agreement and the transactions
contemplated hereby does not and will not violate, conflict
with or constitute a breach of (a) any provision of the
articles of incorporation, bylaws, charter or equivalent
organizational documents of Buyer, (b) any provision of, or
result in a default under, any mortgage, lien, note, loan
agreement, debenture, contract or agreement, order,
arbitration award, judgment or decision of any court or
governmental authority to which Buyer is a party or by which
it is now bound or will be bound as of the Closing Date;
provided, however, no representation or warranty is made in
this clause (b) with respect to contracts or agreements to
be assumed by Buyer pursuant to this Agreement, or (c)
subject to compliance with the HSR Act, any provision of
law, statute, rule or regulation to which Buyer is subject.
3.3 Brokers and Finders. Except for Norman Chapman,
with respect to which Buyer shall be solely responsible,
Buyer has not employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated by
this Agreement.
3.4 Litigation. There is no claim, action, suit,
proceeding or investigation pending or, to Buyer's
knowledge, threatened by or against Buyer with respect to
the transactions contemplated hereby, at law or in equity,
before or by any Federal, state, municipal, foreign or other
governmental department, commission, board, agency,
instrumentality or authority, and there is no order, decree
or judgment pending or in effect against Buyer with respect
to the transactions contemplated hereby.
3.5 No Other Representations and Warranties. Except
for the representations and warranties contained in this
Article III, neither the Buyer nor any other person or
entity makes any other express or implied representation or
warranty on behalf of Buyer or its affiliates, and Buyer
hereby disclaims any such representation or warranty, with
respect to the execution and delivery to this Agreement or
the consummation of the transactions contemplated hereby,
notwithstanding the delivery or disclosure to Seller, any of
its officers, directors, employees, agents or
representatives of any documentation or other information by
or on behalf of Buyer or any affiliate with respect to any
one or more of the foregoing.
3.6 Disclosure. To the knowledge of Buyer, the
representations and warranties of Buyer contained herein are
not false or misleading in any material respect and do not
contain any material misstatement of fact and do not omit to
state any material facts required to be stated to make the
statements therein not misleading in light of the
circumstances in which made. Based on the actual knowledge
of Buyer, Buyer is not aware of any breaches of warranties
or misrepresentations by Seller pursuant to this Agreement.
IV COVENANTS
4.1 Covenants of Seller. Seller covenants and agrees
with Buyer as follows:
(a) Access; Confidential Information. From the date
hereof until the Closing Date, Seller shall furnish to Buyer
and its representatives all information relating to the
Business reasonably requested by Buyer and provide access to
any Subject Assets that Buyer may reasonably request at such
times as shall be mutually agreed upon. Any confidential
information provided to Buyer shall be subject to the terms
of that certain letter agreement dated December 27, 1994,
entered into between Quaker and Buyer (the "Confidentiality
Agreement"). The provisions of the Confidentiality
Agreement shall survive any termination of this Agreement.
(b) Conduct of Business. From the date hereof until
the Closing Date, except as set forth on Schedule 4.1(b),
without the written consent of Buyer (which consent shall
not be unreasonably withheld), Seller shall not:
(i) operate the Business other than in the
ordinary course of business;
(ii) make any sale, transfer, lease or other
disposition of any Subject Assets or mortgage, pledge or
otherwise create a security interest in any of the Subject
Assets, other than Permitted Liens and other than the
disposal of immaterial items of equipment in the ordinary
course of business and other than the disposal of equipment
that is replaced with equipment of similar value and utility
and other than sales of inventory in the ordinary course of
business;
(iii) fail to maintain the books, accounts and
records of the Business on a basis consistent with past
practices;
(iv) enter into, amend or cancel (a) any
contract involving payments in excess of $100,000 or which
is not terminable within 90 days' notice without premium or
penalty or (b) any Permit in respect of the Subject Assets
or the Business;
(v) fail to maintain the Subject Assets in
customary repair, order and condition;
(vi) perform, take any action or incur or permit
to exist any of the acts, transactions, events or
occurrences of the type described in Section 2.11;
(vii) issue any new off-invoice allowances,
coupons or bill-back allowances with respect to the Products
other than those described in Schedule 2.10(c); or
(viii) make any change in list pricing to the
trade, or trade deals, or brokerage compensation or
incentives that would or could reasonably be expected to
materially increase forward buying.
(c) Reasonable Efforts: Notifications. Seller shall
use reasonable efforts to fulfill its conditions to Closing
and otherwise to consummate the transactions contemplated by
this Agreement. Without limiting the foregoing, Seller
shall introduce Buyer to brokers used in the Business and
shall arrange and participate in one meeting between Buyer
and such brokers and, upon reasonable notice from Buyer
after the Closing Date, shall execute and deliver all
instruments of assignment of intellectual property
reasonably requested by Buyer in order to comply with
applicable intellectual property law. Prior to the Closing,
Seller shall as promptly as reasonably practicable notify
Buyer in writing of the occurrence of any event as to which
it obtains knowledge that is reasonably likely to result in
the failure of a condition specified in Article VI or VII
hereof.
(d) Antitrust Filing. As promptly as practicable
after the date hereof, Seller shall make all necessary
filings applicable to it under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder (the "HSR Act")
in connection with the transactions contemplated hereby, and
promptly make any amendments to such filings as may be
required, and Seller will cooperate with Buyer in connection
with HSR Act filings.
(e) Preservation of Records. Seller shall preserve
and, during regular business hours and upon reasonable
notice, use reasonable efforts to make available to Buyer
and its representatives for inspection and copying for
reasonable business purposes all material agreements,
records, books and other documents pertaining to the
Business or the Subject Assets (but excluding portions of
such materials that contain or reflect information relating
to any other business of Seller) for periods prior to and
including the Closing Date, wherever located for six (6)
years from the Closing Date; provided, however, Seller may,
prior to the expiration of such six (6) year period, destroy
all or part of such records if, prior to such destruction,
Seller gives Buyer notice of the records to be destroyed and
an opportunity to obtain, at its own expense, the records to
be destroyed.
(f) Stokely-Van Camp Name. The parties acknowledge
and agree that the Subject Assets shall not include the
"Stokely-Van Camp" trade name. With respect to such name,
Seller covenants and agrees from and after the Closing Date
and in perpetuity, as follows:
(i) Seller shall not use the "Stokely-
Van Camp" name for any purpose other than as a
corporate name for Stokely-Van Camp, Inc.
(ii) Seller shall not use the "Van Camp"
name alone or in combination with any other names
except as permitted in subpart (i) above.
(iii) Seller shall not use the term VAN
CAMP (alone or in combination with one or more other
terms) as a trademark or service mark;
(iv) Seller shall always use the term
VAN CAMP preceded by the term STOKELY;
(v) Seller shall use the term STOKELY with
equal prominence and emphasis as the term VAN CAMP;
and
(vi) Seller shall use the term STOKELY in
combination with VAN CAMP horizontally on the
same line.
(vii) Seller shall only use the term VAN
CAMP in connection with its beverage business.
(viii) Except as set forth in this Section
4.1(f), Seller agrees, from and after the Closing Date,
not to assert any rights in the
"Stokely Van Camp" name.
Seller further covenants and agrees that in the event (i)
Stokely is disposed of by Quaker by means of merger, sale of
stock or assets or otherwise, or (ii) Quaker sells, assigns
or otherwise transfers the name "Stokely Van Camp", Seller
shall cause the purchaser, assignee or other transferee, as
the case may be, of Stokely or the "Stokely-Van Camp" name
to covenant and agree, in the operative instruments of sale,
assignment or transfer, to the provisions set forth in this
Section 4.1(f).
(g) Canadian License. The parties acknowledge that
Seller is a party to a certain Agreement, dated July 16,
1983, between Stokley-Van Camp, Inc. and Carriere Foods.
Inc. ("Carriere") (as assignee of Stokely-Van Camp of
Canada, Inc.) pursuant to which Seller has licensed to
Carriere certain intellectual property for use in Canada and
certain other countries, including the "Van Camp" trademark
and certain product specifications, trade secrets and
technology relating to the Products (the "Carriere
Agreement"). Seller shall not amend, extend or otherwise
modify the Carriere Agreement without Buyer's prior written
consent, which consent shall not unreasonably be withheld.
Upon Buyer's request, to the extent assignable, Seller shall
assign to Buyer the Carriere Agreement. In addition, the
parties agree as follows:
All intellectual property subject to
the Carriere License (other than the
Canadian registered trademarks) shall be
included in the Subject Assets. Buyer
shall license to Seller all intellectual
property transferred to Buyer under this
Agreement solely for the purpose of
licensing such rights to Carriere pursuant
to the Carriere Agreement.
(h) Existing Inventory. Buyer shall have the right to
sell as it deems fit any Inventory acquired from Seller
hereunder using the existing trade dress, and may use
Seller's existing supply of labels and boxes in connection
with the Business.
(i) Forwarding of Certain Items. Seller shall with
reasonable promptness forward to Buyer any consumer
complaints or inquiries relating to the Business which it
receives for a period of one year after the Closing Date.
(j) Title Insurance and Survey. Seller shall provide
to Buyer an ALTA Owner's Form of Title Insurance Policy,
1987 version (Rev. 1990) (each a "Policy" and collectively,
the "Policies") with respect to each parcel of Real
Property. Each policy shall (i) be issued on the Closing
Date by Chicago Title Insurance Company (the "Title
Company"), (ii) be in such amount as Buyer reasonably may
determine to be the fair market value of such Real Property
(including all improvements located thereon) but not to
exceed $20,000,000 in the aggregate, and (iii) insure
Buyer's ownership of fee title with respect to each parcel
of Real Property (a) without any of the standard Schedule B
preprinted exceptions, other than taxes not yet due and
payable, (b) but subject to the Permitted Liens (as defined
in Section 2.4). Within 10 days following the date of this
Agreement, Seller shall cause to be delivered to Buyer a
final boundary and as built survey of the distribution
center Real Property performed and certified to a current
date by Barge, Wagner, Sumner and Cannon (the "Distribution
Center Survey"). If any Lien, other than the Permitted
Liens listed on Schedule 2.4(a), is disclosed as an
exception on a Policy, an updated title insurance commitment
delivered on or before the Closing Date, or the Distribution
Center Survey which, in Buyer's reasonable opinion, would
reasonably be expected to render title unmarketable or which
would reasonably be expected to materially adversely
interfere with how any Real Property is used, occupied or
operated as of the Closing Date, or if any of the Permitted
Liens specifically designated as requiring further curative
action by Seller under Schedule 2.4(a) have not been cured
or removed as required therein, then (a) Seller shall, at
its option, acting reasonably, either remove or cure such
Lien at Seller's sole expense but with Buyer's cooperation;
or (b) if not removed or cured prior to Closing, Seller
shall indemnify Buyer against all losses or damages which
may be incurred or suffered by Buyer as a result of any such
Lien which is not removed or cured, including, without
limitation, the cost of defending the title from the party
asserting the Lien, the cost of defending a quiet title
action or administrative action with respect to the Lien,
the cost, in the case of encroachments, of forced removal of
the encroachment and of restoring the remaining improvements
as nearly as possible to their condition, function and
capacity which existed prior to such removal (including
purchase of additional land if sufficient land is not
available on the Real Property adjoining the affected
improvement to restore or replace the capacity and function
thereof). If Seller indemnifies Buyer as aforesaid, Seller,
for a reasonable time after the Closing (not to exceed a
period of one (1) year, unless a quiet title action or
administrative proceeding is pending with respect thereto,
in which case that action or proceeding shall be prosecuted
to completion, including appeals), shall use commercially
reasonable efforts to remove such Lien at Seller's sole
expense, and Buyer shall cooperate with respect thereto.
Seller's indemnity shall be terminated or reduced as
appropriate upon removal of such Liens. Seller may elect to
furnish, at its sole expense, title insurance coverage over
any such Liens to Buyer which may be obtainable under a
Policy and, to the extent such coverage is provided, Buyer
agrees to look to such Policy to collect any loss or damage
it may suffer or incur as a result of the existence or
assertion of such Lien before seeking to recover such loss
or damage from Seller under the foregoing indemnity, and
Seller would only be liable to the extent Buyer's loss or
damage exceeds the amounts collected by Buyer under such
Policy. Nothing contained in this Section 4.1(j) shall in
any way reduce Buyer's rights under any other provision of
this Article IV.
(k) Non-Compete. Effective as of the Closing Date,
except as otherwise provided in the Transition Agreement or
as otherwise agreed to in writing by Buyer and Seller,
Seller shall not, and Seller shall cause its affiliates not
to, for a period of three years after the Closing Date,
directly or indirectly (whether as a partner, joint
venturer, employer, contractor, stockholder or otherwise)
engage in the marketing, manufacture, sale or distribution
of the Products, provided that Seller may (i) own as an
investment not more than 5% of the securities of a
corporation which engages in such competition if such
securities are listed (or admitted to unlisted trading
privileges) on a national securities exchange or included
for quotation through a U.S. inter-dealer quotation system
of a registered national securities association, (ii) own
as an investment not more than a 5% interest in any
partnership which engages in such competition, (iii) acquire
and maintain an ownership interest otherwise proscribed by
this Section 4.1(k) if such interest arises as a result of
the acquisition of a business not principally engaged in the
proscribed conduct; provided that Seller shall take all
action to cause the business permitted to be acquired under
this clause (iii), (x) not to materially expand the scope
and magnitude of its business or (y) to dispose of such
business within 18 months following the acquisition thereof,
(iv) be acquired by any person that engages in the
proscribed conduct, or (v) in connection with an employee
benefit plan (the assets of which are managed by an
independent investment advisor), invest in any corporation
or other entity which engages in such competition. A
business entity shall not be deemed to be principally
engaged in the proscribed conduct if its sales of the
Products constitute less than 25% of its gross sales. If
any court in which Buyer seeks to have the provisions of
this Section 4.1(k) specifically enforced determines that
the activities or time hereinabove specified are too broad,
such court may determine a reasonable activity, time or
geographic area and may specifically enforce this Section
for such activity, time and geographic area.
Notwithstanding the foregoing, nothing in this Section
4.1(k) is intended to limit or restrict the marketing,
manufacture, sale or distribution by Seller or its
affiliates of any of its existing food products or lines
after the Closing Date.
(l) Production Consolidation.
(i) Attached hereto as Exhibit 4.1(l)(i)
is a copy of Seller's production plan with respect to all
Van Camp and Wolf Brand Products to be manufactured at
Seller's Newport, Tennessee plant or otherwise pursuant to
co-packing arrangements, which plan sets forth for each day
through the period commencing April 24, 1995 and ending on
June 30, 1995, Seller's anticipated production of such
Products expressed in aggregate pounds as of each such date.
Seller shall produce through the Closing Date not less than
the aggregate poundage of Products indicated for such date
in item quantities consistent with changes in Seller's
forecasts and actual sales and requirements of the Business
(the "Aggregate Minimum Poundage"); it being hereby
acknowledged and agreed that other than with respect to the
Aggregate Minimum Poundage as of the Closing Date, Seller
makes no representation, warranty or commitment as to the
production of any particular product or the use of any
particular product line prior to the Closing. To the extent
that the Closing Date occurs after June 30, 1995, Buyer and
Seller shall agree upon the Aggregate Minimum Poundage for
each day thereafter until the Closing Date on a basis
consistent with past production and output requirements of
the Business. Seller will cooperate with Buyer to obtain co-
packer production, at Buyer's request and cost, in excess of
Aggregate Minimum Poundage.
(ii) Attached hereto as Exhibit 4.1(l)(ii)
is a copy of Seller's capital expenditure budget for that
certain equipment relocation project known to Seller and
Buyer as "Project Inferno" through May 31, 1995 (the
"Consolidation Budget"). Prior to the Closing Date, Seller
shall make all expenditures included in the Consolidation
Budget and otherwise shall use commercially reasonable
efforts to proceed toward completing Project Inferno.
(iii) During the Transition Period (as
hereinafter defined), Seller shall compensate Buyer at a
rate of $4.50 per case for each case of Product ordered by
customers that is not shipped by Seller within published
lead times, allowing for normal transit time, but only to
the extent that such aggregate unshipped cases exceed 3% of
product cases ordered, and the parties agree that Seller
shall not be required to compensate Buyer with respect to
(1) any aggregate excess cases (calculated on a monthly
basis or portion thereof as appropriate) ordered during the
Transition Period over the now existing Quarterly Business
Review sales forecast for the comparable period and (2) any
deficiency caused by Buyer's failure to produce Product as
scheduled by Seller through June 30, 1995 (but in no event
shall such schedule be in excess of daily aggregate pounds
as set forth in Exhibit 4.1(l)(i)), and thereafter in
quantities as jointly scheduled by Seller and Buyer, in SKUs
as reasonably directed by Seller. Buyer will cooperate with
Seller to obtain co-packer production, at Seller's request
during the Transition Period, in which event Seller will
reimburse Buyer for the cost of requested co-packer
production to the extent that actual cost exceeds the
standard costs used for closing inventory valuation
purposes. In conjunction with this Section 4.1(l)(iii),
Seller agrees not to take any action other than in the
ordinary course intended to reduce sales (e.g., allocate
product) without the prior approval of Buyer. "Transition
Period" shall mean the period during which Seller is
providing Buyer all (and not just some) of the services set
forth in the Transition Agreement.
(m) Beans Inventory.
(i) Prior to the date hereof, Seller reduced or
committed to reduce its existing "old crop beans inventory"
such that, as of the date hereof, such inventory does not
exceed 29,100,000 pounds in the aggregate. Seller
represents that such amount represents Seller's projection,
as of the date hereof, of the estimated requirements of
Seller's old crop bean usage through September 30, 1995,
plus 20 rail cars of beans, based upon Seller's current
production schedules through September 30, 1995.
(ii) With respect to that certain letter agreement
between Seller and Cooperative Elevator Company, annexed
hereto as Exhibit 4.1(m), to the extent that Buyer is
required to pay up to $.03 more than $.23 per pound for its
raw beans supply, Seller shall reimburse Buyer for such
additional cost. Buyer shall cooperate with Seller and take
all such action as Seller reasonably may request to reduce
such $.03 per pound excess cost exposure under such
agreement. Notwithstanding the foregoing, under no
circumstances shall Seller be required to pay Buyer in
excess of $180,000 pursuant to this Section 4.1(m).
4.2 Covenants of Buyer. Buyer covenants and agrees
with Seller as follows:
(a) Reasonable Efforts; Notifications. Buyer shall
use reasonable efforts to fulfill its conditions to Closing
and otherwise consummate the transactions contemplated by
this Agreement. Prior to Closing, Buyer shall as promptly
as reasonably practicable notify Seller in writing of the
occurrence of any event as to which it obtains knowledge
that is reasonably likely to result in the failure of a
condition specified in Article VI or VII hereof.
(b) Antitrust Filing. As promptly as is practicable
after the date hereof, Buyer shall make all necessary
filings applicable to it under the HSR Act in connection
with the transactions hereby, and promptly make any
amendments to such filings as may be required, and Buyer
will cooperate with Seller in connection with HSR Act
filings.
(c) Preservation of Records. Buyer shall preserve
and, during regular business hours and upon reasonable
notice, use reasonable efforts to make available to Seller
and its representatives for inspection and copying for
reasonable business purposes all material agreements,
records, books and other documents pertaining to the
Business or the Subject Assets for periods prior to and
including the Closing Date, wherever located for six (6)
years from the Closing Date; provided, however, Buyer may,
prior to the expiration of such six (6) year period, destroy
all or part of such records if, prior to such destruction,
Buyer gives Seller notice of the records to be destroyed and
an opportunity, at its own expense, to obtain the records to
be destroyed.
(d) Returns. Buyer shall accept, at no cost to
Seller, normal returns in the ordinary course of business
from purchasers of Products which were manufactured by the
Business prior to the Closing Date. Notwithstanding the
foregoing, Buyer shall not be responsible for recalls of
Products, or returns of Products relating to the negligence
or misconduct of Seller, in each case manufactured prior to
Closing.
V EMPLOYEE MATTERS
5.1 Transferred Employees. On or prior to the Closing
Date, Buyer shall assume the Union Contract and, with
respect to salaried employees, offer employment in
connection with the conduct of the Business effective after
the Closing Date to those employees of Seller set forth on
Schedule 5.1 (other than those employees that retire, die,
become disabled prior to Closing and are eligible for long-
term disability or otherwise terminate their employment with
Seller prior to Closing), on substantially the same wages
and salaries in effect immediately prior to the Closing Date
and with benefits as set forth in Schedule 5.1.1. Schedule
5.1 lists salaries or wages for each of the employees of
Seller set forth thereon, as applicable to such employee on
the date hereof. Effective as of the date next following
the Closing Date, all union and salaried employees who
accept Buyer's offer of employment will become employees of
Buyer (the "Transferred Employees"); it being hereby
acknowledged and agreed that if Seller terminates or reduces
production of Rice Cakes at the Newport, Tennessee plant on
or prior to the Closing Date, the term "Transferred
Employees" shall not include (i) employees who, immediately
preceding such termination or reduction, were engaged by
Seller in the production of Rice Cakes and who are not
otherwise employed by Buyer after the Closing, and (2)
employees who are terminated at the Newport Tennessee plant
as a result of another employee who was engaged in the
production of Rice Cakes exercising any seniority rights in
job selection (i.e., "bumping") such other employees. Buyer
shall not be responsible for any employees that do not
accept employment with Buyer. Seller shall not be
responsible for any Transferred Employees severed by Buyer
after the Closing Date, except as set forth in Section 5.6.
5.2 Employee Benefit Transition. With respect to each
Transferred Employee:
(a) Buyer shall waive all pre-existing condition and
eligibility requirements, evidence of insurability
provisions or any similar provisions under any employee
benefit plan or compensation arrangements maintained or
sponsored by or contributed to by Buyer for such individuals
after the Closing Date.
(b) Buyer shall not be responsible (and Seller shall
be responsible) for any covered health and accident claims
expenses incurred for Transferred Employees prior to the
Closing Date and, if a Transferred Employee does not work on
the day next following the Closing Date, then Buyer shall
not be responsible for any health and accident claims
expenses incurred by such employee until the first day on
which such employee commences active employment with Buyer.
Except as set forth in the immediately preceding sentence,
Buyer's plans shall provide coverage for all covered health
and accident claims expenses incurred by Transferred
Employees and their covered dependents after the Closing
Date.
(c) With respect to pension, savings, severance,
vacation, health and welfare, disability benefits, executive
compensation, incentive and bonus arrangements, Buyer shall
recognize for purposes of eligibility for participation and
vesting (but not for qualified pension plan benefit accrual)
under its employee benefit plans and compensation
arrangements all elapsed periods of service through the
Closing Date of any Transferred Employee with Seller. Also,
Seller shall take all action necessary (in accordance with
its existing pension and savings plans) to cause the
vesting, in full, of all rights and benefits of Transferred
Employees under Seller's pension and savings plans presently
in effect.
(d) On the Closing Date, or as soon as reasonably
practicable thereafter, Seller shall transfer to Buyer the
prorated account balances (prorated by reference to the
number of days in the calendar year 1995 that each employee
was employed by Seller, divided by 365), less claims paid
(as of the Closing Date), of the Transferred Employees with
respect to the flexible spending account plans listed in
Schedule 2.14 ("Flexible Spending Accounts"). Buyer shall
process the Flexible Spending Accounts throughout the
remainder of calendar year 1995. Seller shall provide Buyer
an accounting (including a year-to-date status report) with
respect to the Flexible Spending Accounts and will provide
assistance and information to the Buyer reasonably necessary
for the Buyer to administer the Flexible Spending Accounts
after the Closing Date.
5.3 COBRA. Seller will be responsible for satisfying
obligations under Section 601 et seq. of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
and Section 4980B of the Code, to provide continuation
coverage to or with respect to any Transferred Employee in
accordance with law with respect to any "qualifying event"
occurring on or before the Closing Date. Buyer will be
responsible for satisfying obligations under Section 601 et
seq., of ERISA and Section 4980B of the Code, to provide
continuation coverage to or with respect to any Transferred
Employee in accordance with law with respect to any
"qualifying event" which occurs following the Closing Date.
5.4 Vacation. As of the Closing Date with respect to
the vacation plans listed in Schedule 2.14, Buyer will
assume obligations of Seller to Transferred Employees for
vacation entitlements as set forth in Section 2.14.
5.5 Disability and Workers' Compensation. Seller
shall assume responsibility for all disability benefits
payable after the Closing Date with respect to those
employees of Seller who are entitled to benefits under
Seller's long-term disability plan as of the Closing Date.
Buyer shall be responsible for all workers' compensation
claims, occupational disease claims and employer liability
claims for Transferred Employees that relate to injuries or
diseases resulting from events occurring after the Closing
Date. To the extent that any Transferred Employee is
entitled to short-term disability benefits from the Seller
prior to the Closing and, subsequent to the Closing, becomes
entitled, without any interruption of such short-term
disability benefits, to long-term disability benefits
relating to the injury or illness that gave rise to the
short-term disability benefits, the Seller and Buyer shall
share equally the cost of such long-term disability
benefits. Seller shall be responsible for all workers'
compensation claims, occupational disease claims and
employer liability claims, whether reported or unreported on
the Closing Date, for Transferred Employees that relate to
injuries or diseases resulting from events occurring prior
to the Closing Date, except that Buyer agrees to be
responsible for any such claims to the extent that the event
giving rise to the injury or disease is not reported to
Seller or Seller's workers compensation carrier on or prior
to the first annual anniversary of the Closing Date (the
"Cut-off Date"). Buyer shall not generally encourage or
induce Transferred Employees, through announcements, notices
or similar methods to file claims with Seller prior to the
Cut-off Date. Buyer may, however, deal with individual
employee claims in a manner consistent with this Section 5.5
(including directing to Seller any individual employee
claims that, pursuant to this Section, are the
responsibility of Seller).
5.6 Retiree Health. Seller shall provide, pay and be
responsible for, and shall indemnify and hold Buyer harmless
from and against, the retiree health benefits listed on
Schedule 5.6 (the "Retiree Health Benefits") due to, or that
hereafter become due to, those Transferred Employees (and
their spouses) who, on the Closing Date, meet the
eligibility requirements set forth on Schedule 5.6
("Qualified Employees") regardless of when such Transferred
Employees (or such spouses) retire, or otherwise become
entitled to, such Retiree Health Benefits. Without limiting
the provisions of Section 5.1, Buyer will, however, provide
health benefits as provided herein to any Transferred
Employee in accordance with Buyer's health benefit plans in
effect during the tenure of such Transferred Employee's
employment with the Buyer, even though such Transferred
Employee would otherwise be entitled to Retiree Health
Benefits from the Seller (subject, however, to any changes
after the Closing Date in such plans and subject to any
changes after the Closing Date with respect to the employees
eligible to be covered by such plans). Buyer agrees that
under no circumstances will it generally encourage or induce
any Transferred Employee, through announcements, notices or
similar methods, to opt out of or waive coverage under any
of Buyer's health benefit plans. Buyer shall indemnify and
hold Seller harmless from and against Retiree Health
Benefits that hereafter become due to those Transferred
Employees (and their spouses) who, on the Closing Date, do
not meet the eligibility requirements set forth on Schedule
5.6.
5.7 WARN Act. Subject to the provisions of Section
2.2 of the Production Agreement, Buyer and Seller shall
cooperate and coordinate any notices or filings to the
extent required under the Workers Adjustment and Retraining
Notification Act of 1988, as amended (the "WARN Act"), with
respect to the Transferred Employees in connection with the
transactions contemplated by this Agreement, and shall each
bear one-half of any costs (including legal expenses and
disbursements) relating to the failure or alleged failure to
provide any such notices or filings. Seller shall be solely
responsible for any notices, costs or filings under the WARN
Act for other employees of Seller who are not Transferred
Employees.
5.8 No Third Party Beneficiaries. Except for the
provisions of Section 5.6, neither Buyer nor Seller intend
this Article V to create any rights or interest, except as
between Buyer and Seller, and no present or future employees
of either party (or any dependents of such employee) will be
treated as third party beneficiaries in or under this
Agreement. The parties intend that Qualified Employees
shall be third party beneficiaries of Section 5.6.
5.9 Documents and Forms. Seller and Buyer agree to
use their reasonable efforts to execute all necessary
documents, file all required forms with any governmental
agencies and to undertake all actions that may be necessary
or desirable to implement expeditiously any actions
contemplated herein.
VI CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer under this Agreement are
subject to the fulfillment, prior to or on the Closing Date,
of each of the following conditions, any of which may be
waived in whole or in part by Buyer:
6.1 Accuracy of Representations and Warranties;
Performance of Agreements; Certificate and Opinion of
Counsel.
(a) The representations and warranties of Seller
contained in this Agreement shall be true and correct in all
material respects on the date hereof and as of the Closing
Date with the same effect as though such representations and
warranties had been made or given again at and as of the
Closing Date (except for any representation or warranty
expressly stated to have been made or given as of a
specified date, which, at the Closing Date, shall be true
and correct in all material respects as of the date
expressly stated).
(b) Seller shall have performed and complied in all
material respects with all of its agreements, covenants and
conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing Date.
(c) Seller shall have delivered to Buyer (i) a
certificate of Quaker's President or any Vice President of
Quaker dated the Closing Date and certifying the fulfillment
of the conditions set forth in this Section 6.1 and (ii) an
opinion of the Vice President, General Corporate Counsel and
Secretary or the Associate General Counsel of Quaker dated
the Closing Date in the form attached hereto as Exhibit
1.8(a).
6.2 HSR Act. Any waiting period applicable to the
consummation of the transactions contemplated by this
Agreement under the HSR Act shall have expired or been
terminated.
6.3 No Proceeding or Litigation. No preliminary or
permanent injunction or other order shall have been issued
by any court of competent jurisdiction, or by any
governmental or regulatory body, nor shall any statute,
rule, regulation or executive order have been promulgated or
enacted by any governmental authority which prevents the
consummation of the transactions contemplated in this
Agreement.
6.4 Closing Deliveries. Seller shall have delivered
to Buyer all deliveries to be made to it pursuant to Section
1.7.
6.5 Secretary's Certificate. Each of Quaker and
Stokely shall have delivered to Buyer a certificate of a
Secretary or Assistant Secretary certifying (i) resolutions
of its Board of Directors adopting this Agreement and the
transactions contemplated hereby (together with an
incumbency and signature certificate regarding the officers
and other authorized representatives signing on its behalf)
and (ii) its certificate of incorporation and by-laws, in
each case as amended or restated.
VII CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller under this Agreement are
subject to the fulfillment, prior to or on the Closing Date,
of each of the following conditions, any of which may be
waived in whole or in part by Seller:
7.1 Accuracy of Representations and Warranties;
Performance of Agreements; Certificate and Opinion of
Counsel.
(a) The representations and warranties of Buyer contained
in this Agreement shall be true and correct in all material
respects on the date hereof and as of the Closing Date with
the same effect as though such representations and
warranties had been made or given again at and as of the
Closing Date (except for any representation or warranty
expressly stated to have been made or given as of a
specified date, which, at the Closing Date, shall be true
and correct in all material respects as of the date
expressly stated).
(b) Buyer shall have performed and complied in all
material respects with all of its agreements, covenants and
conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing Date.
(c) Buyer shall have delivered to Seller (i) a
certificate of its President or any Vice President dated the
Closing Date and certifying the fulfillment of the
conditions set forth in this Section 7.1 and (ii) an opinion
of Patrick Ryan, General Counsel of Hunt-Wesson, Inc., dated
the Closing Date in the form attached hereto as Exhibit
1.9(c).
7.2 HSR Act. Any waiting period applicable to the
consummation of the transactions contemplated by this
Agreement under the USR Act shall have expired or been
terminated.
7.3 No Proceeding or Litigation. No preliminary or
permanent injunction or other order shall have been issued
by any court of competent jurisdiction, or by any govern
mental or regulatory body, nor shall any statute, rule,
regulation or executive order have been promulgated or
enacted by any governmental authority which prevents the
consummation of the transactions contemplated in this
Agreement.
7.4 Closing Deliveries. Buyer shall have delivered to
Seller all deliveries to be made to it pursuant to Section
1.8.
7.5 Secretary's Certificate. Buyer shall have
delivered to Seller a certificate of Buyer's Secretary or
Assistant Secretary certifying (i) resolutions of the Board
of Directors of Buyer adopting the Agreement and the
transactions contemplated hereby (together with an
incumbency and signature certificate regarding the officers
and other authorized representatives signing on behalf of
Buyer) and (ii) its certificate of incorporation and by-laws
of Buyer, in each case as amended or restated.
VIII INDEMNIFICATION
8.1 Survival of Representations and Warranties and
Obligations. The representations and warranties of Seller
in Article II and Buyer in Article III and all other
obligations of the parties hereunder, shall survive the
Closing and, except for the Surviving Obligations (as
hereinafter defined) which shall continue in effect in
accordance with their respective terms, shall expire on the
first anniversary of the Closing Date, and thereafter,
except as provided in the next succeeding sentence, no claim
may be brought pursuant to this Agreement (including all
schedules, amendments and supplements hereto and thereto)
except for a breach by a party of its obligations under any
of the Surviving Obligations. If written notice of a claim
has been given by a party prior to the first anniversary of
the Closing Date, then the relevant representation, warranty
or other obligation shall survive as to such claim until the
claim has been finally resolved in accordance with this
Article VIII. For purposes of this Agreement, the term
"Surviving Obligations" shall refer to the obligations
contained in Sections 1.1, 1.2 (except in the case of the
Excluded Liabilities set forth in item (xi) of Section 1.2,
which shall survive four (4) years after the Closing Date
and item (xii) of Section 1.2, which shall survive five (5)
years after the Closing Date), 1.7, 1.11, 2.4 (other than
the last sentence of Section 2.4), 4.1(e), 4.1(f), 4.1(j),
4.2(c), 8.2(c), 8.3(c), 8.6, 8.7, Article V, the remaining
provisions of Article VIII insofar as it relates to
Surviving Obligations and Article IX. Surviving Obligations
shall survive without limitation, or in accordance with
their terms, as the case may be. Notwithstanding the
foregoing, the obligations under Section 2.8, Section 2.16,
Section 8.2(d) and Section 8.3(d) shall survive five (5)
years after the Closing Date, Section 2.12 shall survive
four (4) years after the Closing Date, Section 2.17 shall
survive two (2) years after the Closing Date, and Section
4.1(k) shall survive three (3) years after the Closing Date,
provided that if written notice of a claim has been given
prior to such expiration, then the relevant representation,
warranty or obligation shall survive as to such claim until
such claim has been finally resolved.
8.2 Indemnification by Seller. Except as otherwise
limited by this Article VIII, Buyer and its officers,
directors, employees, agents, successors and assigns shall
be indemnified and held harmless by Seller from any and all
liabilities, losses, damages, claims, costs and expenses,
interest, awards, judgments and penalties (including,
without limitation, reasonable legal costs and expenses)
actually suffered or incurred by it (hereinafter a "Buyer
Loss"), actually arising out of or resulting from:
(a) the breach of any representation or warranty by
Seller contained herein;
(b) the breach of any covenant or agreement by Seller
contained herein or in any document delivered hereunder at
the Closing;
(c) the failure of Seller to pay or otherwise
discharge the Excluded Liabilities (it being hereby agreed
and understood that in the case of the Excluded Liabilities
set forth in item (xi) of Section 1.2, said indemnification
obligation of Seller shall only apply four (4) years after
the Closing Date, and in the case of the Excluded
Liabilities set forth in item (xii) of Section 1.2, said
indemnification obligation shall only apply five (5) years
after the Closing Date, provided that if written notice of a
claim has been given prior to such expiration, then the
right to indemnification shall survive as to such claim
until such claim has been finally resolved); or
(d) any liability or obligation of Seller arising out
of or resulting from any violation of any federal, state or
local Environmental Laws or regulations or remediation of
conditions existing at the Closing which violate
Environmental Laws as of the Closing Date.
Buyer agrees that prior to taking any action which
reasonably could result in the assertion by Buyer of a claim
for indemnification in respect of environmental matters
hereunder, it promptly shall notify Seller of its intention
to take such action, shall consult with Seller as to the
necessity thereof and the most cost-efficient manner to
implement the action proposed to be taken, and shall not
implement any such remedial or other measures without the
prior written consent of Seller (such consent not
unreasonably to be withheld).
Buyer further agrees to provide Seller with copies
of all written reports, opinions, appraisals, findings,
results and surveys (collectively, "Reports") prepared by,
and reasonable access to, any environmental consultant,
engineer or appraiser engaged by Buyer to permit Seller (and
its agents and representatives) to reasonably monitor any
proposed treatment of environmental matters. Seller agrees
to maintain the confidentiality of all Reports in the manner
and to the extent set forth in Section 4.1(a).
8.3 Indemnification by Buyer. Except as otherwise
limited by this Article VIII, Seller and its officers,
directors, employees, agents, successors and assigns shall
be indemnified and held harmless by Buyer from any and all
liabilities, losses, damages, claims, costs and expenses,
interest, awards, judgments and penalties (including,
without limitation, reasonable legal costs and expenses)
actually suffered or incurred by it (hereinafter a "Seller
Loss"), actually arising out of or resulting from:
(a) the breach of any representation or warranty by
Buyer contained herein;
(b) the breach of any covenant or agreement by Buyer
contained herein or in any document delivered hereunder at
the Closing;
(c) the failure of Buyer to pay or otherwise discharge
the Assumed Liabilities;
(d) any liability or obligation of Buyer arising out
of or resulting from any violations of federal, state or
local Environmental Law or regulation resulting from
occurrences after the Closing Date or remediation of
conditions resulting from occurrences after the Closing Date
which violate the Environmental Laws.
(e) any product liability claims with respect to
Products manufactured and sold by Buyer after the Closing
Date.
8.4 Indemnification Procedures.
(a) For the purposes of this Section 8.4, the term
"Indemnitee" shall refer to the person indemnified, or
entitled, or claiming to be entitled to be indemnified,
pursuant to the provisions of Section 8.2 or 8.3, as the
case may be; the term "Indemnitor" shall refer to the person
having the obligation to indemnify pursuant to such
provisions; and "Losses" shall refer to "Seller Losses" or
"Buyer Losses", as the case may be.
(b) An Indemnitee shall give written notice (a "Notice
of Claim") to the Indemnitor promptly after the Indemnitee
has knowledge of any claim (including a Third Party Claim,
as hereinafter defined) which an Indemnitee has determined
has given or could give rise to a right of indemnification
under this Agreement. No failure to give such Notice of
Claim shall affect the indemnification obligations of the
Indemnitor hereunder, except to the extent such failure
materially prejudiced such Indemnitor's ability to
successfully defend the matter giving rise to the claim. The
Notice of Claim shall state the nature of the claim, the
amount of the Loss, if known, and the method of computation
thereof, all with reasonable particularity and containing a
reference to the provisions of this Agreement in respect to
which such right of indemnification is claimed or arises.
(c) The obligations and liabilities of an Indemnitor
under this Article VIII with respect to losses arising from
claims of any third party that are subject to the
indemnification provisions provided for in this Article VIII
("Third Party Claims") shall be governed by and contingent
upon the following additional terms and conditions: The
Indemnitee at the time it gives a Notice of Claim to the
Indemnitor of the Third Party Claim shall advise the
Indemnitor that it shall be permitted, at its option, to
assume and control the defense of such Third Party Claim at
its expense and through counsel of its choice if it gives
prompt notice of its intention to do so to the Indemnitee.
In the event the Indemnitor exercises its right to undertake
the defense against any such Third Party Claim as provided
above, the Indemnitee shall cooperate with the Indemnitor in
such defense and make available to the Indemnitor all
witnesses, pertinent records, materials and information in
its possession or under its control relating thereto as is
reasonably required by the Indemnitor and the Indemnitee may
participate by its own counsel and at its own expense in
defense of such Third Party Claim. Similarly, in the event
the Indemnitee is, directly or indirectly, conducting the
defense against any such Third Party Claim, the Indemnitor
shall cooperate with the Indemnitee in such defense and make
available to it all such witnesses, records, materials and
information in its possession or under its control relating
thereto as is reasonably required by the Indemnitee and the
Indemnitor may participate by its own counsel and at its own
expense in the defense of such third party action. Except
for the settlement of a Third Party Claim which involves the
payment of money only, no Third Party Claim may be settled
by the Indemnitor without the written consent of the
Indemnitee, which consent shall not be unreasonably withheld
or delayed. Similarly, no Third Party Claim may be settled
by the Indemnitee without the written consent of the
Indemnitor, which consent shall not be unreasonably withheld
or delayed unless the Indemnitor has failed to assume the
defense of such claim, and the Indemnitee has notified the
Indemnitor with 10 business days prior written notice of its
intent to so settle.
8.5 Limits on Indemnification. No claim may be made
against Seller for indemnification hereunder, or against
Buyer for indemnification hereunder, as the case may be,
unless and only to the extent the aggregate of all Buyer
Losses (or Seller Losses, as the case may be) incurred
exceed one million dollars ($1,000,000) (the "Basket") and
then only with respect to that portion of Buyer Losses (or
Seller Losses, as the case may be) which exceed the Basket,
provided that the foregoing shall not apply to claims with
respect to Sections 1.1, 1.2, 1.5, 1.7, 1.10, 2.4, 2.16,
2.17, 2.19, 2.21, 4.1(e), 4.1(f), 4.1(j), 4.1(k), 4.1(l),
4.1(m), 4.2(c), Article V, 1.11, 8.2(c), 8.2(d) (except to
the extent provided in the next sentence), 8.3(c), 8.3(d),
9.14 or 9.15. With respect to any Buyer Loss relating to
the indemnification under Section 8.2(d), one-half of such
Buyer Loss, not to exceed $250,000 in the aggregate, may be
included, at Seller's request, in the Basket to the extent
that the $1,000,000 limitation relating to the Basket has
not otherwise been reached. Seller shall not be required to
indemnify Buyer for Buyer Losses which in the aggregate
exceed one-half of the Purchase Price.
8.6 Adjustment of Liability. Any indemnifiable Seller
Loss or Buyer Loss, as the case may be, shall be reduced by
any tax benefit accruing to the indemnified party on account
of the indemnification payment. All indemnity payments
shall be treated as adjustments to the Purchase Price.
8.7 Exclusive Remedy. Except as set forth below, from
and after the Closing, neither party hereto shall be liable
or responsible in any manner whatsoever to the other party,
whether for indemnification or otherwise, except for
indemnity as expressly provided in this Article VIII and in
Article V, which provide the exclusive remedy and cause of
action of the parties hereto with respect to any matter
arising out of or in connection with this Agreement or any
Schedule or Exhibit hereto or any opinion or certificate
delivered in connection herewith. After the Closing, Buyer
shall not be entitled to a rescission of the sale of the
Subject Assets. Notwithstanding the foregoing, neither
Buyer nor Seller waives, releases or agrees not to make (and
shall be entitled to make) any claim or bring any
contribution, cost recovery or other action against the
other, or any of its respective successors or assigns or any
controlling person or other affiliate of such party, under
CERCLA or other comparable state environmental laws or under
any state or federal laws relating to fraud or fraudulent
misrepresentation. Buyer and Seller shall retain any rights
to seek contribution or indemnification against third
parties. Buyer acknowledges that it is acquiring the
Subject Assets on an "AS IS, WHERE IS" basis (except for
those representations and warranties expressly set forth in
this Agreement) without any representation or warranty as to
merchantability or fitness for a particular purpose and
without any implied warranties whatsoever (except as
expressly set forth In this Agreement).
IX MISCELLANEOUS
9.1 Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written consent of Buyer and Seller; or
(b) if the Closing shall not have occurred by July 31,
1995, provided, however, that the right to terminate this
Agreement under this Section 9.1(b) shall not be available
to any party whose failure to perform 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.
In the event of termination of this Agreement by either or
both of the parties pursuant to this Section 9.1, written
notice thereof shall forthwith be given to the other party
specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith
become void and of no effect and there shall be no liability
on the part of the parties hereto (or their respective
officers, directors or affiliates) except (a) as set forth
in Section 4.1(a), Section 9.2 and Section 9.17 hereof and
(b) nothing herein shall relieve either party from liability
for any breach hereof.
9.2 Expenses. All filing fees incurred, or to be
incurred, in connection with filings under the HSR Act shall
be split equally between Buyer and Seller. Except as
otherwise provided in this Section 9.2, all other costs and
expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses whether or not the
Closing shall have occurred.
9.3 Waiver. The accuracy of any representation or
warranty, the performance of any covenant or agreement of
the fulfillment of any condition of this Agreement by Buyer
on the other hand or Seller on the other, may be expressly
waived in writing by Buyer or Seller, as appropriate. Any
waiver hereunder shall be effective only in the specific
instance and for the purpose for which given. No failure or
delay on the part of Buyer or Seller in exercising any
right, power or privilege under this Agreement shall operate
as a waiver thereof, nor shalt any single or partial
exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege.
9.4 Consents. Whenever this Agreement requires a
permit or consent by or on behalf of either party hereto,
such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance
as set forth in Section 9.3.
9.5 Assignment; Parties In Interest. This Agreement
and all of the provisions hereof shall be binding upon and
inure to the benefit of, and be enforceable by, the parties
hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights,
interest or obligations herein shall be assigned, including
by operation of law or otherwise, by any party hereto
without the prior written consent of the other party.
9.6 Further Assurances. Each of the parties hereto
agrees that, from and after the Closing, upon the reasonable
request of any other party hereto and without further
consideration, such party will execute and deliver to such
other party such documents and further assurances and will
take such other actions (without cost to such party) as such
other party may reasonably request in order to carry out the
purpose and intention of this Agreement.
9.7 Entire Agreement. This Agreement and the
Schedules hereto, the Confidentiality Agreement and the
other writings referred to herein or delivered pursuant
hereto, which form an integral part hereof, set forth the
entire understanding of the parties with respect to the
subject matter hereof. This Agreement and the
Confidentiality Agreement supersede all prior agreements and
understandings relating to the transactions contemplated
hereunder.
9.8 Amendment. This Agreement may be amended or
modified in whole or in part only by a duly authorized
written agreement that refers to this Agreement and is
signed by the parties hereto or by their duly appointed
representatives or successors.
9.9 Limitations on Rights of Third Parties. Nothing
expressed or implied in this Agreement is intended or shall
be construed to confer upon or give any person other than
Buyer and Seller any rights or remedies under or by reason
of this Agreement or any transaction contemplated hereby.
9.10 Captions, Gender and "Person". The captions in
this Agreement are inserted for convenience of reference
only and shall not be considered a part of or affect the
construction or interpretation of any provision of this
Agreement. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to
include any other number, singular or plural, and any other
gender, masculine, feminine, or neuter, as the context
requires. Any reference to a "person" herein shall include
an individual firm, corporation, partnership, trust,
governmental authority or body, association, unincorporated
organization or any other entity.
9.11 Counterparts; Facsimile Signatures. 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. It shall not be
necessary in making proof of this Agreement to produce or
account for more than one such counterpart. A facsimile copy
of a signature hereto shall be fully effective as if an
original.
9.12 Notices. All notices, claims, certificates,
requests, demands and other communications hereunder shall
be in writing and will be deemed to have been duly given if
personally delivered or telecopied or on the date of receipt
indicated on the return receipt if delivered or mailed
(registered or certified mail, postage prepaid, return
receipt requested) as follows:
(a) If to Quaker
or Stokely: The Quaker Oats Company
P.O. Box 9001
Chicago, Illinois 60604-9001
Telecopy No.: 312-222-8315
Attention: Vice President,
General Corporate Counsel
and Secretary
(b) If to Buyer: Hunt-Wesson, Inc.
1645 West Valencia Drive
Fullerton, California 92633-3899
Telecopy No.: (714) 449-5199
Attention: Vice President and
General Counsel
with a copy to: ConAgra, Inc.
One ConAgra Drive
Omaha, Nebraska 68102
Telecopy No.: (402) 595-4075
Attention: Controller
or to such other address as the person to whom notice is to
be given may have previously furnished to the other in
writing in the manner set forth above.
9 .13 Governing Law and Jurisdiction. This Agreement
shall be governed by, and construed and enforced in
accordance with, the laws of the State of Illinois, without
regard to its provisions concerning conflicts or choice of
law.
9.14 Bulk Sales Law. Buyer waives compliance by Seller
with the provision of any applicable bulk sales laws.
Seller shall promptly pay and discharge when due or contest
or litigate all claims of creditors that are asserted
against Buyer by reason of non-compliance with such laws,
except with respect to any such claims that relate to the
Assumed Liabilities.
9.15 Transfer Taxes. All excise, sales, value added,
use, registration, stamp, transfer and similar taxes,
levies, charges and fees (including all real estate transfer
taxes) incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid one-half by
Seller and one-half by Buyer, whether imposed by law on
Seller or Buyer, and Seller shall indemnify, reimburse and
hold harmless Buyer in respect of the liability for payment
of or failure to pay any such taxes, levies, charges or
fees. Buyer and Seller shall cooperate in providing each
other appropriate resale exemption certificates and other
appropriate tax documentation.
9.16 Knowledge of Seller. As used in this Agreement,
"knowledge of Seller", to "Seller's knowledge" or words of
similar import shall mean the knowledge of those persons
listed in Schedule 9.16 after reasonable inquiry.
9.17 Public Announcements. All public announcements
relating to this Agreement or the transactions contemplated
hereby shall be made at such time and in such manner as the
parties hereto shall mutually agree, except that nothing in
this Agreement shall prevent a party hereto from making any
disclosure in connection with the transactions contemplated
by this Agreement to the extent required by law or to the
extent required by any securities exchange on which a party
has listed its securities, provided that prior notice of any
such disclosure is given to the other party.
9.18 Schedules. All of the Schedules and Exhibits
referred to in this Agreement are attached hereto and made a
part of this Agreement. Any item disclosed in the Schedules
or in any of the Exhibits attached hereto, under any
specific Section or Schedule number hereof, shall be deemed
to have been disclosed only for purposes of that specific
Section or Schedule, unless Buyer has actual knowledge that
such item should have been disclosed in connection with
another specific Section or Schedule in which case such item
shall be deemed disclosed for such Section or Schedule.
Seller may, from time to time prior to or at Closing, by
notice in accordance with the Agreement, supplement or amend
any Schedule to this Agreement with respect to immaterial
events occurring between the date hereof and Closing.
9.19 Severability. Nothing contained in this Agreement
shall be construed as requiring the commission of any act
contrary to law. Whenever there is any conflict between any
provision of this Agreement and any statute, law, ordinance
or regulation contrary to which the parties have no legal
right to contract, the latter shall prevail, but in such
event, the provisions of this Agreement thus affected shall
be curtailed and limited only to the extent necessary to
bring it within the requirement of such law. In the event
that any part, section, paragraph or clause of this
Agreement shall be held to be indefinite, invalid or
otherwise unenforceable, the balance of this Agreement shall
continue in full force and effect unless the severance of
the portion thus held unenforceable would unreasonably
frustrate the commercial purposes of this Agreement.
9.20 Liability. The liability of Quaker and Stokely
pursuant to this Agreement shall be joint and several.
IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered by the duly authorized officers of
Seller and Buyer as of the date first above written.
THE QUAKER OATS COMPANY
By:
Name:
Title:
STOKELY-VAN CAMP, INC.
By:
Name:
Title:
HUNT-WESSON, INC.
By:
Name:
Title:
Exhibit (99) to Form 8-K
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial information with respect to
the disposition of the Van Camp business should be read in conjunction with
historical financial statements contained in the Company's Annual Report on Form
10-K as of June 30, 1994 and the Quarterly Report on Form 10-Q as of March 31,
1995. The following pro forma information is presented for illustrative purposes
only and is not necessarily indicative of the operating results or financial
position that would have occurred had the disposition of the Van Camp business
been consummated in accordance with the assumptions set forth below, nor is it
necessarily indicative of future operating results or financial position.
Basis of Presentation
The unaudited pro forma combined balance sheet presents the consolidated
financial position assuming that the disposition of the Van Camp business
occurred on March 31, 1995. The unaudited pro forma combined income statements
for the year ended June 30, 1994 and for the nine months ended March 31, 1995
present the consolidated results of operations assuming that the disposition of
the Van Camp business occurred as of July 1, 1993. The Van Camp business
disposition was completed on June 8, 1995.
Pro Forma Adjustments
The amounts included in the Van Camp Business column on the following balance
sheet reflect the assets sold and written-off and liabilities assumed, including
inventories, prepaid assets, property, plant and equipment and accrued vacation
liability. Deferred income taxes have been reclassified to current liabilities.
The amounts included in the Van Camp Business column on the following income
statements reflect the direct activity of the business, including net sales
and direct cost of goods sold, advertising and merchandising expenses, and other
general direct expenses of the business. Pretax income has been tax effected at
the statutory rates for those periods.
The separate pro forma adjustments column on the balance sheet reflects the
estimated after-tax proceeds from the sale, $94.4 million less estimated income
taxes of $19.0 million, as an increase in amounts Due from The Quaker Oats
Company. This column also reflects the estimated after-tax gain on the sale of
the Van Camp business. The separate pro forma adjustments column on the income
statements reflects the increase in interest income as a result of the after-tax
proceeds on the sale increasing amounts Due from The Quaker Oats Company.
Interest income has been calculated using the the interest rate the Company
receives on amounts due from Quaker. If the interest rate were one-eighth of
one percent different, pro forma interest income would change by less than
$100,000 in both the year ended June 30, 1994 and the nine months ended
March 31, 1995.
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF MARCH 31, 1995
Stokely- Pro
Van Van Forma Pro
Camp, Camp Adjust- Forma
Inc. Business ments Combined
Dollars in Millions
<S>
Assets
<C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 16.7 $ $ $ 16.7
Due from The Quaker Oats Company 435.3 75.4 510.7
Trade accounts receivable -
net of allowances 88.9 88.9
Inventories 73.1 (13.1) 60.0
Other current assets 19.2 ( 0.4) 18.8
Total Current Assets 633.2 (13.5) 75.4 695.1
Other Assets 5.6 0.6 6.2
Property, plant and equipment 242.2 (60.2) 182.0
Less accumulated depreciation 78.4 (26.0) 52.4
Property - Net 163.8 (34.2) 129.6
Total Assets $802.6 $(47.1) $75.4 $830.9
<FN>
See accompanying notes to unaudited pro forma combined financial information.
<CAPTION>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF MARCH 31, 1995
Stokely- Pro
Van Van Forma Pro
Camp, Camp Adjust- Forma
Inc. Business ments Combined
Dollars in Millions
<S>
Liabilities and Shareholder's Equity
<C> <C> <C> <C>
Current Liabilities:
Trade accounts payable $ 46.2 $ $ $ 46.2
Other current liabilities 85.7 2.0 87.7
Total Current Liabilities 131.9 2.0 133.9
Long-term Debt 0.6 0.6
Other Liabilities 36.0 36.0
Deferred Income Taxes 2.1 (2.1) ---
Redeemable Preference and
Preferred Stock 15.3 15.3
Common Shareholders' Equity:
Common stock 3.6 3.6
Additional paid-in capital 68.7 68.7
Reinvested earnings 565.3 28.4 593.7
Treasury common stock ( 20.9) ( 20.9)
Total Common
Shareholders' Equity 616.7 28.4 645.1
Total Liabilities and
Shareholders' Equity $802.6 $(0.1) $28.4 $830.9
<FN>
See accompanying notes to unaudited pro forma combined financial information.
<CAPTION>
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED JUNE 30, 1994
Stokely- Pro
Van Van Forma Pro
Camp, Camp Adjust- Forma
Inc. Business ments Combined
Dollars in Millions
<S> <C> <C> <C> <C>
Net sales $1,077.0 $(143.8) $ $933.2
Cost of goods sold 553.4 ( 88.4) 465.0
Gross profit 523.6 ( 55.4) 468.2
Selling, general and
administrative expenses 406.6 ( 38.2) 368.4
Restructuring charges 9.4 ( 9.3) 0.1
Interest (income) - net ( 13.0) (4.7) ( 17.7)
Income before income taxes 120.6 ( 7.9) 4.7 117.4
Provision for income taxes 50.2 ( 3.2) 1.9 48.9
Net income $ 70.4 $( 4.7) $ 2.8 $ 68.5
<FN>
See accompanying notes to unaudited pro forma combined financial information.
<CAPTION>
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE NINE MONTHS ENDED MARCH 31, 1995
Stokely- Pro
Van Van Forma Pro
Camp, Camp Adjust- Forma
Inc. Business ments Combined
Dollars in Millions (Except Per Share Data)
<S> <C> <C> <C> <C>
Net sales $689.2 $(78.1) $ $611.1
Cost of goods sold 372.6 (48.8) 323.8
Gross profit 316.6 (29.3) 287.3
Selling, general and
administrative expenses 296.7 (20.7) 276.0
Interest (income) - net ( 15.6) (3.5) ( 19.1)
Income before income taxes
and cumulative effect of
accounting change 35.5 ( 8.6) 3.5 30.4
Provision for income taxes 12.8 ( 3.4) 1.4 10.8
Income before cumulative
effect of accounting change $ 22.7 $( 5.2) $ 2.1 $ 19.6
<FN>
See accompanying notes to unaudited pro forma combined financial information.
</TABLE>
EX-2.B
SUPPLEMENT NO. 1
TO
ASSET PURCHASE AND SALE AGREEMENT
THIS SUPPLEMENT NO. 1 TO ASSET PURCHASE AND SALE
AGREEMENT is made on the 8th day of June, 1995, among THE
QUAKER OATS COMPANY, a New Jersey corporation ("Quaker"),
STOKELY-VAN CAMP, INC., an Indiana corporation and
subsidiary of Quaker ("Stokely", and together with Quaker,
"Seller"), and HUNT-WESSON, INC., a Delaware corporation
("Buyer").
W I T N E S S E T H :
WHEREAS, Seller and Buyer are parties to that
certain Asset Purchase and Sale Agreement dated May 1,
1995 (the "Agreement"), pursuant to which Seller has
agreed to sell and assign to Buyer and Buyer has agreed to
purchase and assume from Seller certain assets and
liabilities of the Business (as defined in the Agreement)
upon the terms and subject to the conditions set forth
therein; all capitalized terms used and not defined in
this Supplement No. 1 having the respective meanings
assigned to them in the Agreement; and
WHEREAS, by means of the execution and delivery
hereof, Seller and Buyer desire to supplement, clarify and
amend certain provisions of the Agreement as hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual
covenants hereinafter set forth and set forth in the
Agreement, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. The prefatory paragraph of the Agreement is hereby
amended by deleting the words "wholly owned" appearing immediately
after the word "corporation" and next preceding
the word "subsidiary" in the fifth and sixth lines thereof.
2. Section 1.1 (g)(i) of the Agreement is hereby
amended by inserting next preceding the defined term "(the "Union
Contract")" appearing in the fourth and fifth line of such
Section, the following: ", but not including for purposes of this
Agreement, that certain voluntary separation agreement dated
May 17, 1995 (the "Voluntary Separation Agreement"), between Stokely
and the United Steelworkers of America, Local Union No. 7198."
3. Section 1.3 of the Agreement is hereby amended
by deleting the text thereof in its entirety and inserting in
lieu and stead thereof, the following:
"1.3 Purchase Price and Other Consideration.
The aggregate cash purchase price
payable by Buyer to Seller for the
Subject Assets is one hundred sixty-two
million six hundred fifty thousand and
00/100 dollars ($162,650,000.00)
(subject to adjustment as provided in
Sections 1.4 and 1.10) (the "Purchase
Price"), and the assumption by Buyer
of the Assumed Liabilities pursuant to
the assumption agreement in the form
attached hereto as Exhibit 1.9(b) (the
"Assumption Agreement"). One hundred
sixty million seven hundred fifty thousand
and 00/100 dollars ($160,750,000.00)
of the Purchase Price shall be payable
to Seller by Buyer on the Closing Date,
by wire transfer of immediately available
U.S. funds to an account designated in
writing by Quaker to Buyer not less
than two business days prior to the
Closing Date, and one million nine
hundred thousand and 00/100 dollars
($1,900,000.00) (the "Escrow Amount")
of the Purchase Price shall be
deposited by Buyer with Harris Trust &
Savings Bank (the "Escrow Agent") to
be held and released by the Escrow
Agent in accordance with the terms and
conditions of the Escrow Agreement
attached hereto as Exhibit 1.3 (the
"Escrow Agreement"). The balance of
the Purchase Price, if any, shall be
paid on the Settlement Date. For
purposes of this Agreement, the term
"Estimated Payment" shall mean $162,650,000.00."
4. Section 4.1(k) of the Agreement is hereby amended
by inserting immediately after the word "foregoing" and next
preceding the comma appearing in the second line of the last
sentence of such Section, the following:
"and other than with respect to the Products"
5. Section 4.1(l)(i) of the Agreement is hereby
amended by adding a new fifth sentence thereto to read in its
entirety, as follows:
"Notwithstanding the
foregoing, if Seller fails to produce as
of the Closing Date the Aggregate
Minimum Poundage (such insufficiency
hereinafter referred to as the
"Production Deficit"), (1) Seller
shall reimburse Buyer (promptly after
receipt by Seller of Buyer's written
request therefor, accompanied by a
detailed invoice) for the difference
between the cost of co-packed Products
that were purchased to remedy the
Production Deficit (the "Additional
Products") and the value of the
Additional Products had such
Additional Products been in existence
and included in the Inventory on the
Closing Date; it being hereby
acknowledged and agreed that such
value shall for purposes of this
Section 4.1(l)(i) be equal to the
value of similar Inventory
manufactured by Seller and existing on
the Closing Date as determined
pursuant to Schedule 1.4(a), and (2)
Buyer shall act reasonably in
arranging any required co-packing of
the Additional Products and
negotiating the terms (including,
without limitation, the price)
thereof."
6. Section 4.1(l)(ii) of the Agreement is hereby
amended by adding to the end of such section a new third sentence to
read in its entirety, as follows:
"Notwithstanding the foregoing,
if prior to the Closing Date
Seller fails to make all required
expenditures included in the
Consolidation Budget, (1) Seller shall
reimburse Buyer (promptly after
receipt by Seller of Buyer's written
request therefor, accompanied by a
detailed invoice) for expenses
incurred by Buyer, consistent with the
Consolidation Budget, to complete the
items set forth in the Consolidation
Budget, and (2) Buyer shall act
reasonably with respect to such
completion."
7. Section 4.2 of the Agreement is hereby amended by
adding a new subsection (e) thereto to read in its entirety,
as follows:
"(e) Newport, Tennessee Plant Wastewater
Treatment.
(i) Notwithstanding anything contained
in this Agreement (or the Schedules hereto) to
the contrary (including, without limitation, the
provisions of Sections 2.3, 2.8, 2.11, 2.12, and
4.1(b), and the provisions of Article VIII), Buyer
solely shall be responsible for, and shall bear
all fees, costs, expenses, duties, damages,
obligations and liabilities in respect of, Wastewater
Treatment arising out of or resulting from the operation
of the Newport, Tennessee plant after the Closing
Date. For purposes of this subsection (e), "Wastewater
Treatment" means the discharge, generation, migration,
release, spill, leaching, pouring, pumping, emission,
dumping, removal, clean-up, abatement, amelioration,
remediation, transportation, storage, disposal and/or
treatment or pre-treatment of wastewater relating to
biochemical oxygen demand ("BOD"), fats, oils and greases
("FOG"), and total suspended solids ("TSS"), including
all pre-treatment by-products with respect to FOG, BOD
and TSS.
(ii) Without limiting the generality of
clause (i) above, Buyer solely shall be responsible
for all capital and other expenditures incurred by it
or its affiliates after the Closing Date with respect
to (1) the design, engineering, expansion, construction,
site preparation, acquisition of equipment and materials,
installation, start-up and alloperating costs and expenses
(at or for the Newport, Tennessee plant) in respect of all
Wastewater Treatment after the Closing or any equalization
facilities, procedures, programs and equipment with respect
thereto, (2) all restrictions, limitations and requirements
mandated or recommended by the Newport, Tennessee
Utilities Board ("NUB") and/or any other comparable
federal, state or local public or governmental authority
with respect to Wastewater Treatment at or from the
Newport, Tennessee plant after the Closing Date, and (3)
the contribution of funds for the expansion of NUB's
treatment plant and headworks and/or the construction of
equalization tanks at NUB (or any other offsite location)
or at the Newport, Tennessee plant."
8. Section 5.1 of the Agreement is hereby amended
by inserting new sixth, seventh, eighth and ninth sentences at
the end of such Section to read in their entirety,
as follows:
"Anything in this Agreement to
the contrary notwithstanding, solely in
respect of those certain employees of
Seller who as of the Closing Date were
eligible to receive (but did not accept)
voluntary separation benefits pursuant
to the Voluntary Separation Agreement
(the "Junior Employees"), for the
twelvemonth period ending on the first
anniversary on the Closing Date,
Seller agrees to reimburse Buyer
(promptly after receipt of Buyer's
written request therefor, accompanied
by a detailed invoice) for Buyer's
cost of providing all health, dental
and life insurance benefits paid or
payable by Buyer to or on account of
such Junior Employees under existing
benefit plans for any period any such
Junior Employee is not actually
employed by Buyer, such reimbursement
obligation not to exceed a maximum of
six months in the aggregate with
respect to any such Junior Employee.
To the extent required after the
Closing Date with respect to the
discontinuation of Rice Cakes
operations at the Newport, Tennessee
plant and the subsequent removal and
dismantling of all equipment and other
assets used thereat to conduct such
operations, Seller shall have access
and be entitled to utilize, consistent
with the Union Contract, certain
employees of Buyer (which may include
Transferred Employees) to effect such
discontinuation, dismantling and
removal; it being hereby acknowledged
and agreed that Seller shall reimburse
Buyer (promptly after receipt of
Buyer's written request therefor,
accompanied by a detailed invoice) for
all wages and benefits paid by Buyer
to or on account of such employees for
the period and solely to the extent
such employees are used by Seller to
conduct such discontinuation,
dismantling and removal. Except as
otherwise expressly set forth in the
immediately preceding sentence or
elsewhere in this Agreement, nothing
contained in this Section 5.1 or
elsewhere in this Agreement is
intended to have or shall have the
effect of discharging Quaker's
obligations to Junior Employees under
the Voluntary Separation Agreement.
With respect to the Junior Employees,
Buyer shall be bound by and recognize
the call back rights specified in the
Union Contract and the Voluntary
Separation Agreement."
9. Buyer shall be entitled to use existing food
service UPC Codes for the Products for the six-month period next
following the Closing Date, to the extent such codes
historically were used by Seller prior to the Closing Date.
10. The Schedules to the Agreement are hereby
modified and superseded, as applicable, to the extent set forth
in Appendix A hereto.
11. All references to the "Agreement" in any
document, instrument or agreement described in, referred to,
annexed to, contemplated by or incorporated by reference in the Agreement
or this Supplement No. 1 shall be deemed to mean the Agreement as
supplemented by this Supplement No. 1.
12. This Supplement No. 1 shall be effective as of
the date hereof. Except as expressly modified by this Supplement No. 1,
the Agreement shall remain, in all respects, in full force and effect in
accordance with its terms.
13. This Supplement No. 1 may be executed in counterparts,
each of which shall constitute an original, but all of which taken together,
shall constitute but one and the same instrument.
14. This Supplement No. 1 shall be governed by and construed
and enforced in accordance with the internal laws of the State of Illinois,
applicable to instruments made, delivered and performed entirely within such
state.
IN WITNESS WHEREOF, the parties have duly executed
and delivered this Supplement No. 1 on the date first above
written.
THE QUAKER OATS COMPANY
By:
Name:
Title:
STOKELY-VAN CAMP, INC.
By:
Name:
Title:
HUNT-WESSON, INC.
By:
Name:
Title:
