DRAFT #8
DATED 05/20/98
DRAFT
ASSET PURCHASE AGREEMENT
BY AND AMONG
NORTHLAND CRANBERRIES, INC.,
MINOT FOOD PACKERS, INC.
AND
XXXXXXX X. XXXXXXX
MAY 20, 1998
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
1. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . 2
1.1. Assets to be Transferred. . . . . . . . . . . . . . . . . . . . 2
1.2. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . 4
2. ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . . . . . 5
2.1. Liabilities to be Assumed . . . . . . . . . . . . . . . . . . . 6
2.2. Liabilities Not to be Assumed . . . . . . . . . . . . . . . . . 7
3. PURCHASE PRICE - PAYMENT. . . . . . . . . . . . . . . . . . . . . . . 9
3.1. Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2. Payment of Purchase Price . . . . . . . . . . . . . . . . . . . 9
3.3. Allocation of Purchase Price. . . . . . . . . . . . . . . . . . 10
4. REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDER . . . . . . 11
4.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3. No Violation. . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4. Financial Statements. . . . . . . . . . . . . . . . . . . . . . 12
4.5. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.6. Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . 14
4.7. Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.8. Absence of Certain Changes. . . . . . . . . . . . . . . . . . . 15
4.9. Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . 16
4.10. No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11. Compliance With Laws and Orders . . . . . . . . . . . . . . . . 17
4.12. Title to and Condition of Properties. . . . . . . . . . . . . . 19
4.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.14. Contracts and Commitments . . . . . . . . . . . . . . . . . . . 22
4.15. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.16. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . 24
4.17. Employment Compensation . . . . . . . . . . . . . . . . . . . . 28
4.18. Trade Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.19. Major Customers and Suppliers . . . . . . . . . . . . . . . . . 29
4.20. Product Warranty and Product Liability. . . . . . . . . . . . . 30
4.21. Affiliates' Relationships to Company. . . . . . . . . . . . . . 31
4.22. Assets Necessary to Business. . . . . . . . . . . . . . . . . . 31
4.23. Computer Software and Database. . . . . . . . . . . . . . . . . 31
4.24. No Brokers or Finders . . . . . . . . . . . . . . . . . . . . . 31
4.25. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . 32
5.1. Corporate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.2. Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.3. Northland Stock. . . . . . . . . . . . . . . . . . . . . . . . . 32
5.4. No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . . 32
5.5. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.6. SEC Filing; Financial Statements . . . . . . . . . . . . . . . . 33
5.7. Environmental Audits . . . . . . . . . . . . . . . . . . . . . . 33
5.8. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6. EMPLOYEES - EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . 34
6.1. Buyer's Responsibilities; Affected Employees . . . . . . . . . . 34
6.2. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . 34
6.3. Payroll Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4. Termination Benefits . . . . . . . . . . . . . . . . . . . . . . 34
7. OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.1. Title Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 35
7.2. Surveys. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.3. Securities Law Matters . . . . . . . . . . . . . . . . . . . . . 36
7.4. Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . 36
7.5. Employment Agreement . . . . . . . . . . . . . . . . . . . . . . 36
7.6. Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.7. Confidential Information . . . . . . . . . . . . . . . . . . . . 37
7.8. General Release. . . . . . . . . . . . . . . . . . . . . . . . . 38
7.9. HSR Act Filings. . . . . . . . . . . . . . . . . . . . . . . . . 38
7.10. Inventory Purchase Contract. . . . . . . . . . . . . . . . . . . 39
7.11. Registration Rights Agreement. . . . . . . . . . . . . . . . . . 39
7.12. Cooperation Regarding Financial Statements . . . . . . . . . . . 39
7.13. Use of Company's Name. . . . . . . . . . . . . . . . . . . . . . 39
7.14. Sales Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . 39
7.15. Unemployment Compensation. . . . . . . . . . . . . . . . . . . . 40
7.16. Access and Records Retention . . . . . . . . . . . . . . . . . . 40
7.17. Co-Pack Agreement. . . . . . . . . . . . . . . . . . . . . . . . 40
7.18. Adjustment for Tax Dividends . . . . . . . . . . . . . . . . . . 40
7.19. Cooperation in Litigation. . . . . . . . . . . . . . . . . . . . 40
7.20. Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.21. Other Action . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8. FURTHER COVENANTS OF COMPANY AND THE SHAREHOLDER. . . . . . . . . . . 41
8.1. Access to Information and Records. . . . . . . . . . . . . . . . 41
8.2. Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.3. Conduct of Business Pending the Closing. . . . . . . . . . . . . 42
8.4. Change of Corporate Name . . . . . . . . . . . . . . . . . . . . 44
8.5. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.6. Union Contract Negotiations. . . . . . . . . . . . . . . . . . . 44
8.7. Estoppel Certificates. . . . . . . . . . . . . . . . . . . . . . 44
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8.8. Employee Covenant Agreements . . . . . . . . . . . . . . . . . . 44
8.9. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS . . . . . . . . . . . . . 44
9.1. Representations and Warranties True on the Closing Date . . . . 45
9.2. Compliance With Agreement . . . . . . . . . . . . . . . . . . . 45
9.3. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . 45
9.4. Acquisition of Bridgeton Freezer. . . . . . . . . . . . . . . . 45
9.5. Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . 45
9.6. Xxxx-Xxxxx-Xxxxxx Waiting Period. . . . . . . . . . . . . . . . 45
9.7. Section 1445 Affidavit. . . . . . . . . . . . . . . . . . . . . 46
9.8. ISRA Compliance . . . . . . . . . . . . . . . . . . . . . . . . 46
9.9. Investor Representation Letter. . . . . . . . . . . . . . . . . 46
9.10. Tax Division Notification . . . . . . . . . . . . . . . . . . . 46
9.11. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10. CONDITIONS PRECEDENT TO COMPANY'S AND THE SHAREHOLDER'S OBLIGATIONS . 46
10.1. Representations and Warranties True on the Closing Date . . . . 46
10.2. Compliance With Agreement . . . . . . . . . . . . . . . . . . . 47
10.3. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . 47
10.4. Xxxx-Xxxxx-Xxxxxx Waiting Period. . . . . . . . . . . . . . . . 47
10.5. Acquisition of Bridgeton Freezer. . . . . . . . . . . . . . . . 47
11. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 47
11.2. By Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.3. Indemnification of Third-Party Claims . . . . . . . . . . . . . 48
11.4. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.5. Indemnification for Environmental Matters . . . . . . . . . . . 50
11.6. Limitations on Indemnification. . . . . . . . . . . . . . . . . 51
11.7. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.1. Documents to be Delivered by Company and the Shareholder. . . . 52
12.2. Documents to be Delivered by Buyer and Fargo. . . . . . . . . . 54
13. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
13.1. Right of Termination Without Breach . . . . . . . . . . . . . . 56
13.2. Termination for Breach. . . . . . . . . . . . . . . . . . . . . 56
14. RESOLUTION OF DISPUTES. . . . . . . . . . . . . . . . . . . . . . . . 57
14.1. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . 57
14.2. Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . 58
14.3. Procedures; No Appeal . . . . . . . . . . . . . . . . . . . . . 58
14.4. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
14.5. Entry of Judgment . . . . . . . . . . . . . . . . . . . . . . . 58
14.6. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 58
14.7. Continued Performance . . . . . . . . . . . . . . . . . . . . . 58
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14.8. Tolling . . . . . . . . . . . . . . . . . . . . . . . . . . 58
14.9. Escrow Agent Unnecessary. . . . . . . . . . . . . . . . . . 59
15. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
15.1. Disclosure Schedule . . . . . . . . . . . . . . . . . . . . 59
15.2. Further Assurance . . . . . . . . . . . . . . . . . . . . . 59
15.3. Disclosures and Announcements . . . . . . . . . . . . . . . 59
15.4. Assignment; Parties in Interest . . . . . . . . . . . . . . 59
15.5. Equitable Relief. . . . . . . . . . . . . . . . . . . . . . 60
15.6. Law Governing Agreement . . . . . . . . . . . . . . . . . . 60
15.7. Amendment and Modification. . . . . . . . . . . . . . . . . 60
15.8. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
15.9. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 62
15.10. No Recording. . . . . . . . . . . . . . . . . . . . . . . . 63
15.11. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 63
15.12. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 63
15.13. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.14. Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.15. Glossary of Terms . . . . . . . . . . . . . . . . . . . . . 64
DISCLOSURE SCHEDULES
Schedule 1.1.(a) - Owned Real Property
Schedule 1.1.(b) - Leased Real Property
Schedule 1.1.(e) - Personal Property Leases
Schedule 1.2.(d) - Cranberry Supply Contracts
Schedule 1.2.(e) - Other Excluded Contracts and Agreements
Schedule 1.2.(f) - Personal Assets
Schedule 1.2.(g) - Life Insurance Policies
Schedule 1.2.(h) - Lawsuit Rights of Recovery
Schedule 2.1.(b)(i) - Assumed Contracts (Not Otherwise Scheduled)
Schedule 2.1.(e) - Assumed Debt Obligations
Schedule 2.2.(f) - Identified Releases
Schedule 2.2.(j) - Liabilities to Affiliates
Schedule 4.1.(c) - Foreign Corporation Qualification
Schedule 4.3 - Violation, Conflict, Default
Schedule 4.4 - Financial Statements, Exceptions, Debt Obligations
Schedule 4.5.(b) - Tax Returns (Exceptions to Representations)
Schedule 4.5.(c) - Tax Audits
Schedule 4.5.(e) - Tax, Other
Schedule 4.6 - Accounts Receivable (Aged Schedule), Exceptions
Schedule 4.7 - Inventory, Off Premises, Exceptions, Customer
Inventory
Schedule 4.8 - Certain Changes
Schedule 4.9 - Off-Balance Sheet Liabilities
Schedule 4.10 - Litigation Matters
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Schedule 4.11.(a) - Non-Compliance with Laws
Schedule 4.11.(b) - Licenses and Permits
Schedule 4.11.(c) - Environmental Matters (Exceptions to
Representations)
Schedule 4.12.(a)(i) - Pre-Closing Liens
Schedule 4.12.(a)(ii) - Post-Closing Liens
Schedule 4.12.(b) - Known Defects
Schedule 4.12.(c) - Exceptions to Real Property
Schedule 4.13 - Insurance
Schedule 4.14.(e) - Contracts for Services
Schedule 4.14.(g) - Collective Bargaining Agreements
Schedule 4.14.(h) - Loan Agreements, etc.
Schedule 4.14.(i) - Guarantees
Schedule 4.14.(k) - Burdensome Contracts
Schedule 4.14.(l) - Material Contracts
Schedule 4.14.(m) - Defaults
Schedule 4.15.(b) - Labor Disputes
Schedule 4.16.(a) - Employee Plans/Agreements
Schedule 4.16.(b) - Employee Plans/Agreements Exceptions
Schedule 4.16.(d) - Underfunding
Schedule 4.16.(e) - Controlled Group
Schedule 4.16.(f) - Employee Plans/Agreements Payments and Compliance
Schedule 4.16.(g) - Post-Retirement Benefits
Schedule 4.17 - Employment Compensation
Schedule 4.18 - Trade Rights
Schedule 4.19.(a) - Major Customers
Schedule 4.19.(b)(i) - Cranberry Supply Contracts
Schedule 4.19.(b)(ii) - Other Suppliers
Schedule 4.19.(c) - Dealers and Distributors
Schedule 4.20 - Product Warranty, Warranty Expense and Liability
Claims
Schedule 4.21.(a) - Contracts with Affiliates
Schedule 4.21.(b) - Affiliated Interests
Schedule 4.21.(c) - Obligations of and to Affiliates
Schedule 4.23 - Computer Software and Database
Schedule 4.24 - Company's and the Shareholder's Brokers and
Finders
Schedule 5.4 - Buyer's Brokers and Finders
Schedule 5.5 - Violations
Schedule 14.4.(c) - Purchase Commitments
EXHIBITS
Exhibit A - Escrow Agreement
Exhibit B - Employment Agreement
Exhibit C - General Release
Exhibit D - Inventory Purchase Agreement
Exhibit E - Registration Rights Agreement
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Exhibit F - Investor Representation Letter
Exhibit G - Opinion Letter of Seller
Exhibit H - Opinion Letter of Buyer
Exhibit I - Environmental Indemnity Agreement
Exhibit J - Co-Pack Agreement
Exhibit K - Plan Assumption Agreement
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DRAFT #8
DATED 05/20/98
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement") dated May 20, 1998, by and
among NORTHLAND CRANBERRIES, INC., a Wisconsin corporation ("Buyer"), MINOT FOOD
PACKERS, INC., a New Jersey corporation ("Company") and XXXXXXX X. XXXXXXX, the
sole shareholder of Company ("Shareholder").
RECITALS
A. Company is engaged in the business of producing, packaging,
marketing, distributing and selling under the Company's brand and customers'
private labels (i) cranberry-based products, cranberry sauces, cranberry-juice
cocktails, blended cranberry drinks, (ii) apple juice and cider products and
(iii) other shelf-stable juices and drinks and is engaged in the co-packing of
such products for other branded producers (the "Business"). Shareholder owns
all of the issued and outstanding capital stock of Company.
B. Company's facilities consist of an approximately 130,000 square
foot manufacturing, cold storage, warehouse and office facility, and an
approximately 92,000 square foot warehouse building located in Bridgeton, New
Jersey (the "Facilities").
C. Buyer desires to purchase from Company, Company desires to sell
to Buyer, and the Shareholder desires to cause Company to sell to Buyer the
Business and substantially all of the property and assets of Company. Buyer
intends to assign certain of its rights and obligations under this Agreement
prior to the Closing hereof to a newly formed, wholly-owned subsidiary to be
incorporated under the laws of the State of New Jersey under the initial name of
"Fargo Acquisition Corp." ("Fargo").
D. Company currently contracts for freezer and cold storage space
from Bridgeton Freezer Co., L.L.C., a New Jersey limited liability company
("BFC"), in an approximately 100,000 square foot cold-storage, warehouse and
processing facility owned by BFC (the "Bridgeton Freezer"). Buyer desires to
acquire the Bridgeton Freezer, and Shareholder and Company have arranged for the
acquisition of the Bridgeton Freezer pursuant to a contract for the purchase and
sale of real estate dated May 1, 1998, between BFC, as seller, and Company, as
purchaser (the "Bridgeton Freezer Purchase Contract") for a cash purchase price
in the amount of $3,000,000 (the "Bridgeton Freezer Purchase Price") and to
provide for the conveyance thereof to Buyer as part of the transactions
contemplated by this Agreement.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. PURCHASE AND SALE OF ASSETS
1.1. ASSETS TO BE TRANSFERRED. Subject to the terms and conditions of
this Agreement, on the Closing Date (as hereinafter defined) Company shall, and
Shareholder shall cause Company to, sell, transfer, convey, assign, and deliver
to Buyer (or upon Buyer's request, to Fargo), free and clear of all liens and
encumbrances, and Buyer shall purchase and accept all of the business, rights,
claims and assets (of every kind, nature, character and description, whether
real, personal or mixed, whether tangible or intangible, whether accrued,
contingent or otherwise, and wherever situated) of Company, together with all
rights and privileges associated with such assets and with the business of the
Company, other than the Excluded Assets (as hereinafter defined) (collectively
the "Purchased Assets"). The Purchased Assets shall include, but not be limited
to, the following:
1.1.(a) OWNED REAL PROPERTY. All of the real property, including
fixtures, buildings, improvements, and all appurtenant rights owned by
Company, including the real property described on Schedule 1.1.(a) and to
be acquired pursuant to the Bridgeton Freezer Purchase Contract, as more
particularly described in Section 9.4 hereof (collectively, the "Owned Real
Property"). Specifically, for purposes of the representations and
warranties of Company and Shareholder in this Agreement, the Bridgeton
Freezer shall be deemed to be Owned Real Property with the Bridgeton
Freezer to be conveyed directly to Buyer at Closing as set forth in Section
9.4 hereof.
1.1.(b) LEASED REAL PROPERTY. All of the leases of real property
with respect to real property leased by Company, including the leases (the
"Real Property Leases") described on Schedule 1.1.(b) with respect to the
real property described thereon (the "Leased Real Property").
1.1.(c) PERSONAL PROPERTY. All machinery, equipment, vehicles,
tools, supplies, spare parts, furniture and all other personal property
(other than Excluded Assets and personal property leased pursuant to
Personal Property Leases as hereinafter defined) owned, utilized or held
for use by Company on the Closing Date.
1.1.(d) INVENTORY. All inventories of raw materials,
work-in-process and finished goods (including all such in transit), and
service and repair parts, supplies and components held for resale by
Company on the Closing Date, together with related labels and packaging
materials (collectively the "Inventory").
1.1.(e) PERSONAL PROPERTY LEASES. All leases of machinery,
equipment, vehicles, furniture and other personal property leased by
Company, including all such leases (the "Personal Property Leases")
described in Schedule 1.1(e).
1.1.(f) TRADE RIGHTS. All Company's interest in any Trade Rights.
As used herein, the term "Trade Rights" shall mean and include: (i) all
trademark rights, business identifiers, trade dress, service marks, trade
names, and brand names; (ii) all
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copyrights and all other rights associated therewith and the underlying
works of authorship; (iii) all patents and all proprietary rights
associated therewith; (iv) all contracts or agreements granting any
right, title, license or privilege under the intellectual property
rights of any third party; (v) all inventions, mask works and mask work
registrations, know-how, discoveries, improvements, designs, trade
secrets, shop and royalty rights, employee covenants and agreements
respecting intellectual property and non-competition (other than the
employee agreements set forth on Schedule 1.2(e)) and all other types of
intellectual property; and (vi) all registrations of any of the
foregoing, all applications therefor, all goodwill associated with any
of the foregoing, and all claims for infringement or breach thereof.
1.1.(g) CONTRACTS. All Company's rights in, to and under all
contracts, purchase orders and sales orders (hereinafter "Contracts") of
Company, including, without limitation, the Bridgeton Freezer Purchase
Contract, but excluding the contracts, agreements and insurance policies
described in Sections 1.2(d), 1.2(e) and 1.2(g). To the extent that any
Contract for which assignment to Buyer is provided herein is not assignable
without the consent of another party, this Agreement shall not constitute
an assignment or an attempted assignment thereof if such assignment or
attempted assignment would constitute a breach thereof. The Shareholder,
Company and Buyer agree to use their "Reasonable Best Efforts" (without any
requirement on the part of Buyer to agree to any change in the terms of any
such Contract) to obtain the consent of such other party to the assignment
of any such Contract to Buyer in all cases in which such consent is or may
be required for such assignment. For purposes of this Agreement,
"Reasonable Best Efforts" shall mean the taking or performing of all
commercially reasonable efforts, actions or other measures, provided that
it shall not require that additional costs or expenses be incurred (other
than incidental costs or expenses). If any such consent shall not be
obtained, the Shareholder, Company and Buyer agree to cooperate with each
other in any reasonable arrangement designed to provide for the transfer of
obligations under such Contract to Buyer and provide for Buyer the benefits
intended to be assigned to Buyer under the relevant Contract, including
enforcement at the cost and for the account of Buyer of any and all rights
of Company against the other party thereto arising out of the breach or
cancellation thereof by such other party or otherwise. If and to the
extent that such arrangement cannot be made, Buyer, upon notice to Company,
shall have no obligation pursuant to Section 2.1 or otherwise with respect
to any such Contract and any such Contract shall not be deemed to be a
Purchased Asset hereunder. Notwithstanding anything in the foregoing to
the contrary, any contract that is not an Assumed Contract under Section
2.1(b) below shall not be deemed to be a Purchased Asset hereunder.
1.1.(h) COMPUTER SOFTWARE. All computer source codes, programs and
other software of Company, including all machine readable code, printed
listings of code, documentation and related property and information of
Company.
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1.1.(i) LITERATURE. All sales literature, promotional literature,
catalogs and similar materials of Company.
1.1.(j) RECORDS AND FILES. All records and files of Company of
every kind including, without limitation, invoices, customer and vendor
lists, blueprints, specifications, designs, drawings, and operating and
marketing plans, and all other documents, tapes, discs, programs or other
embodiments of information of Company.
1.1.(k) CASH, CASH EQUIVALENTS AND INVESTMENTS. All cash, cash
equivalents and investments of Company.
1.1.(l) NOTES AND ACCOUNTS RECEIVABLE. All notes, drafts and
accounts receivable of Company, including, without limitation, any notes,
drafts, accounts receivable or other obligations owed to Company by any
Affiliate of Company. For purposes of this Agreement, the term "Affiliate"
shall mean the Shareholder and all directors and officers of Company; the
spouse of any such person; any person who would be the heir or descendant
of any such person if he or she were not living (not more remote than first
cousin); and any entity in which any of the foregoing has a significant
ownership or financial interest (except through ownership of less than 5%
of the outstanding shares of any entity whose securities are listed on a
national securities exchange or traded in the over-the-counter market).
1.1.(m) PLAN ASSETS. All rights in and with respect to the assets
associated with the Assumed Employee Plans/Agreements as in Section
4.16(a).
1.1.(n) LICENSES; PERMITS. All licenses, permits, approvals,
certifications and listings of Company.
1.1.(o) CORPORATE NAME. The name "Minot Food Packers" and all other
trade names of Company relating to the Business, and all rights to use or
allow others to use such name.
1.1.(p) GENERAL INTANGIBLES. All goodwill, all prepaid expenses,
advances and deposits, all causes of action arising out of occurrences
before or after the Closing and all other intangible rights and assets,
except for the Lawsuit Rights of Recovery described in Section 1.2(h)
hereof.
1.2. EXCLUDED ASSETS. The provisions of Section 1.1 notwithstanding,
Company shall not sell, transfer, assign, convey or deliver to Buyer, and Buyer
will not purchase or accept the following assets of Company (collectively the
"Excluded Assets"):
1.2.(a) CONSIDERATION AND CERTAIN RIGHTS. The consideration
delivered by Buyer to Company pursuant to this Agreement and the rights of
Company and
4
Shareholder under this Agreement and under the documents to be
delivered by Company or Shareholder at the Closing.
1.2.(b) TAX CREDITS AND RECORDS. Federal, state and local income
and franchise tax credits and tax refund claims and associated returns and
records. Buyer shall have reasonable access to such returns and records
and may make excerpts therefrom and copies thereof.
1.2.(c) CORPORATE FRANCHISE. Company's franchise to be a
corporation, its certificate of incorporation, corporate seal, stock books,
minute books and other corporate records having principally to do with the
corporate organization and capitalization of Company. Buyer shall have
reasonable access to such books and records and may make excerpts therefrom
and copies thereof.
1.2.(d) CRANBERRY SUPPLY CONTRACTS. All cranberry supply contracts,
agreements or commitments of Company providing for the purchase by Company
of raw, processed or frozen cranberries or cranberry concentrate, including
without limitation, the cranberry supply contracts described on Schedule
1.2.(d) (the "Cranberry Supply Contracts").
1.2.(e) OTHER EXCLUDED CONTRACTS AND AGREEMENTS. The contracts and
agreements that are listed on Schedule 1.2(e).
1.2.(f) OTHER ASSETS. The personal assets of the Shareholder that
are listed and described on Schedule 1.2.(f).
1.2.(g) LIFE INSURANCE POLICIES. The life insurance policies
insuring the life of the Shareholder that are listed on Schedule 1.2(g).
1.2.(h) LAWSUIT RIGHTS OF RECOVERY. All rights of recovery
pertaining to claims asserted by Company or the Shareholder in the
Litigation described in Schedule 1.2.(h).
1.2.(i) TREASURY SHARES. Shares of Company held in its treasury or
otherwise purchased or re-purchased by Company prior to the Closing Date.
1.2.(j) THIRD PARTY CONFIDENTIAL INFORMATION. All proprietary
information of third parties which Company has agreed not to disclose,
disseminate or transfer to others under confidentiality agreements to which
Company is bound, including but not limited to third party processes,
methodologies and formulae relating to the co-packing of products for other
branded producers (the "Third Party Confidential Information").
2. ASSUMPTION OF LIABILITIES
5
2.1. LIABILITIES TO BE ASSUMED. As used in this Agreement, the term
"Liability" shall mean and include any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown, asserted or
unasserted, liquidated or unliquidated, secured or unsecured. Subject to the
terms and conditions of this Agreement, on the Closing Date, Buyer shall assume
and agree to perform and discharge the following, and only the following
Liabilities of Company (collectively the "Assumed Liabilities"):
2.1.(a) BALANCE SHEET CURRENT LIABILITIES. The accounts payable and
accrued current Liabilities (other than Assumed and Excluded Debt
Obligations) reflected or reserved against on the Recent Balance Sheet (as
defined in Section 4.4).
2.1.(b) CONTRACTUAL LIABILITIES. Company's Liabilities under and
pursuant to the following Contracts and BFC Liabilities under the Contract
described in Schedule 2.1.(b)(i):
(i) All Contracts described in any of Schedules 1.1.(b),
1.1.(e), 2.1(b)(i), 4.14.(g); 4.14(i) and 4.14(l) (other than the
Contracts set forth on Schedule 1.2(e)).
(ii) The Union Contracts, as defined in Section 4.15(a).
(iii) Every other Contract entered into by Company in the
ordinary course of its business (other than contracts described in
Section 2.2(a)(i) and (ii)) which does not involve consideration or
other expenditure by Company payable or performable on or after the
Closing Date in excess of $75,000 or performance over a period of more
than 12 months.
(iv) Any other Contract not described in Section 2.1(b)(i)
through (iii) that Buyer elects to assume by written notice to Company
and Shareholder.
The Contracts described in subsections 2.1.(b)(i) through (iii) above are
hereinafter collectively described as the "Assumed Contracts."
2.1.(c) LIABILITIES UNDER PERMITS AND LICENSES. Company's
Liabilities under any permits or licenses listed in Schedule 4.11.(b) and
assigned to Buyer at the Closing.
2.1.(d) ASSUMED ENVIRONMENTAL LIABILITIES. Company's Liabilities,
if arising in connection with any Environmental Action (as defined below)
which are related in any way to the Company's ownership, operation or
occupancy of the Business or the Facilities and Purchased Assets being
transferred to Buyer, except to the extent that such liabilities relate to
(i) Identified Releases as defined in Section 2.2(f); and/or (ii) to the
6
extent Sellers retain responsibility therefor pursuant to the
indemnification in Section 11 of the Agreement. As used herein,
"Environmental Action" means any pollution, threat to the environment, or
exposure to, or manufacture, processing, distribution, use, treatment,
generation, existence, transport, handling, presence, disposal, emission,
discharge, storage, escape, seepage, leakage, or release of, or threatened
release of, any Hazardous Substance (as defined below) in any location. As
used herein,"Hazardous Substance" means pollutants, contaminants,
chemicals, compounds or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes, waste waters or byproducts, including
without limitation asbestos, polychlorinated biphenyls or urea
formaldehyde, and any other substances subject to regulation under any
applicable Environmental Law (as defined in Section 4.11(c)). The
Liabilities described in this Section 2.1(d) include, without limitation,
Liabilities arising under any applicable Federal or State Environmental Law
(as defined in Section 4.11(c)) including, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601, et seq. ("CERCLA").
2.1.(e) LIABILITIES ARISING IN THE ORDINARY COURSE OF BUSINESS.
Company's Liabilities, other than Excluded Liabilities, arising out of the
operations of the Business in the ordinary course or through the ownership
of the Purchased Assets prior to the Closing Date.
2.1.(f) ASSUMED DEBT OBLIGATIONS. Company's Liabilities for
principal and accrued interest as of the Closing Date under those certain
loans identified as "Assumed Debt Obligations" in Schedule 2.1(f) ("Assumed
Debt Obligations"). The principal and accrued and unpaid interest on the
Assumed Debt Obligations in the aggregate as of the close of business on
April 30, 1998, was $12,500,830, as more particularly described in Schedule
2.1(f).
2.1.(g) PRODUCT LIABILITY. Any Liability of Company arising out of
or in any way relating to or resulting from any product manufactured,
assembled or sold on or before the Closing Date (including any Liability of
Company for claims made for injury to persons, damage to property or other
damage, whether made in product liability, tort, breach of warranty or
otherwise), except any Liability for which Sellers retain responsibility
therefor pursuant to the indemnification provisions of Section 11 of this
Agreement arising out of a breach of the representations of Sellers in
Section 4.20.
2.1.(h) PLAN LIABILITIES. All Liabilities in and with respect to
the Assumed Employee Plans/Agreements, as defined in Section 4.16.(a),
except as specifically provided in Sections 2.2(g) or 2.2(i) below.
2.2. LIABILITIES NOT TO BE ASSUMED. Except as and to the extent
specifically set forth in Section 2.1, Buyer is not assuming any Liabilities of
Company and all such Liabilities shall be and remain the responsibility of
Company. Notwithstanding the provisions of Section
7
2.1, Buyer is not assuming and Company shall not be deemed to have transferred
to Buyer the following Liabilities of Company (the "Excluded Liabilities"):
2.2.(a) CERTAIN CONTRACTS. The Liabilities of Company under and
pursuant to the following contracts and leases:
(i) All Cranberry Supply Contracts.
(ii) The Contracts identified on Schedules 1.2(e) and 1.2(g).
(iii) Any other Contract that is not assumed by Buyer
pursuant to the provisions of Section 2.1(b) above.
2.2.(b) TAXES ARISING FROM TRANSACTION. Any taxes applicable to the
Company, imposed upon or arising out of the sale or transfer of the
Purchased Assets to Buyer and the other transactions contemplated by this
Agreement, including but not limited to any income, transfer, sales, use,
gross receipts or documentary stamp taxes.
2.2.(c) INCOME AND FRANCHISE TAXES. Any Liability of Company for
Federal income taxes and any state or local income, profit or franchise
taxes (and any penalties or interest due on account thereof).
2.2.(d) INSURED CLAIMS. Any Liability of Company insured against by
the Company, to the extent such Liability is or will be paid by an insurer.
2.2.(e) DEBT OBLIGATIONS. The prepayment penalties, if any, on the
Assumed Debt Obligations that are to be repaid by Buyer at Closing
("Assumed Debt Prepayment Penalties") and any long or short-term debt
obligations of Company (other than the principal, overdrafts and accrued
interest of and with respect to the Assumed Debt Obligations as of Closing
Date) for money borrowed.
2.2.(f) IDENTIFIED RELEASES. Liabilities arising in connection with
the environmental contamination identified on Schedule 2.2(f) (the
"Identified Release") and covered by the Environmental Indemnity Agreement
attached hereto as Exhibit I and/or (ii) to the extent Sellers retain
responsibility therefor pursuant to the indemnification in Section 11 of
this Agreement. The Liabilities described in this Section 2.2(f) include,
without limitation, Liabilities arising under any applicable federal or
state Environmental Law, including, without limitation, the CERCLA.
2.2.(g) LITIGATION MATTERS. Any Liability of Company with respect
to any action, suit, proceeding, arbitration, investigation or inquiry,
whether civil, criminal or administrative ("Litigation"), whether or not
described in Schedule 4.10, with the exception of items (a) (except to the
extent provided in Section 2.2(d)), (b) and (c) under Paragraph 1 of
Schedule 4.10.
8
2.2.(h) TRANSACTION EXPENSES. All Liabilities incurred by Company
in connection with this Agreement and the transactions contemplated herein
on or after November 30, 1997 for expenses for which Company and
Shareholder are responsible pursuant to Sections 15.9(a) and (c)
("Transaction Expenses").
2.2.(i) LIABILITY FOR BREACH. Liabilities of Company for any breach
or failure to perform any of Company's covenants and agreements contained
in, or made pursuant to, this Agreement, or, prior to the Closing, any
known breach or failure to perform any of Company's covenants and
agreements contained in any other contract, whether or not assumed
hereunder, including any known breach or failure to perform under any
Employe Plan/Agreement (as defined in Section 4.16(a)) and any breach
arising from assignment of contracts hereunder without consent of third
parties, but not including such liabilities relating to product return or
warranty obligations incurred in the ordinary course of Company's business.
2.2.(j) LIABILITIES TO AFFILIATES. Liabilities of Company to its
present or former Affiliates, including those described in Schedule 2.2(j),
except obligations for compensation for services rendered as an employee
pursuant to plans or practices disclosed in Schedule 4.16.(a), payment
obligations under the Bridgeton Freezer Purchase Contract described in
Section 9.4 and any accrued expenses and liabilities relating to the rental
and operation of the Bridgeton Freezer.
3. PURCHASE PRICE - PAYMENT
3.1. PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Purchased Assets shall be the sum of the following: (i) $24,994,256, payable in
cash as provided in Section 3.2(b) below, (ii) Northland Class A Common Stock,
$0.01 par value ("Northland Stock"), with a value of $2,000,000 on the Closing
Date as determined in Section 3.2(e) below, and (iii) the assumption of the
Assumed Liabilities.
3.2. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by Buyer
as follows:
3.2.(a) ASSUMPTION OF LIABILITIES.
(i) REPAYMENT OF ASSUMED DEBT OBLIGATIONS. At the Closing, the
Buyer shall pay all principal and accrued interest due on
the Assumed Debt Obligations and the amount of any Assumed
Debt Prepayment Penalties; and
(ii) ASSUMPTION OF OTHER ASSUMED LIABILITIES. At the Closing,
Buyer shall deliver to Company such documents and
instruments as are reasonably
9
required to evidence the assumption of the Assumed
Liabilities.
3.2.(b) DEPOSIT WITH ESCROW AGENT. At the Closing, Buyer shall
deliver to the Escrow Agent, under the Escrow Agreement (as defined in
Section 7.4), cash in the amount of $3,000,000 and shall issue in Company's
name and shall deliver to the Escrow Agent that number of shares of
Northland Stock that is equal to $2,000,000 divided by the "Northland Stock
Value" as of the Effective Time, as determined in Section 3.2(e) below.
3.2.(c) CASH TO COMPANY. At the Closing, Buyer shall deliver to
Company cash in an amount equal to (i) $24,994,256, less (ii) the amount
paid in cash to the Escrow Agent pursuant to Section 3.2(b) above, less
(iii) the amount of the Bridgeton Freezer Purchase Price to be paid
pursuant to the Bridgeton Freezer Purchase Contract (before any adjustments
to such purchase price made pursuant to such contract) in accordance with
Sections 3.2(d) and 9.4 of this Agreement, and (iv) less the amount of any
Transaction Expenses paid by Company on or after November 30, 1997; and (v)
less the amount of any Assumed Debt Prepayment Penalties.
3.2.(d) CASH TO BFC. At the Closing, Buyer shall deliver to BFC
cash in an amount equal to the Bridgeton Freezer Purchase Price payable
pursuant to the Bridgeton Freezer Purchase Contract, plus or minus, as
the case may be, any adjustments to such purchase price made pursuant
to such contract.
3.2.(e) NORTHLAND STOCK VALUE. For purposes of this Agreement,
Northland Stock Value shall mean the average of the last reported sale
price (regular way) on the National Association of Securities Dealers
Automated Quotations System ("Nasdaq") exchange for the seven trading days
ending two business days prior to the Closing Date. Notwithstanding
anything contained herein, the Northland Stock Value shall not be less than
$13.66 per share nor greater than $23.66 per share.
3.2.(f) METHOD OF PAYMENT. All payments under this Section 3.2
shall be made in the form of certified or bank cashier's check payable to
the order of the recipient or, at the recipient's option, by wire transfer
of immediately available funds to an account designated by the recipient
not less than 48 hours prior to the time for payment specified herein.
3.3. ALLOCATION OF PURCHASE PRICE. The aggregate Purchase Price
(including the assumption by Buyer of the Assumed Liabilities) shall be
allocated among the Purchased Assets for tax purposes as agreed to in writing
prior to Closing by Buyer and Company, provided, that the allocation of Purchase
Price to inventory shall be based on a physical inventory taken by Buyer's
independent accountants as of the Effective Time and provided, further, that
Company's inventories of raw, processed and frozen cranberries and cranberry
concentrate shall be valued at $70.00 per barrel (or its equivalent) and the
allocation of the Purchase Price to machinery and
10
equipment shall not exceed the net book value thereof as reflected on
Company's Recent Balance Sheet. Company and Buyer will follow and use such
allocation in all tax returns, filings or other related reports made by them
to any governmental agencies. To the extent that disclosures of this
allocation are required to be made by the parties to the Internal Revenue
Service ("IRS") under the provisions of Section 1060 of the Internal Revenue
Code of 1986, as amended (the "Code") or any regulations thereunder, Buyer
and Company will disclose such reports to the other prior to filing with the
IRS.
4. REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDER
Company and the Shareholder, jointly and severally, make the following
representations and warranties to Buyer, each of which is true and correct on
the date hereof, shall remain true and correct to and including the Closing
Date, shall be unaffected by any investigation heretofore or hereafter made by
Buyer, or any knowledge of Buyer other than as specifically disclosed in the
Disclosure Schedule delivered to Buyer at the time of the execution of this
Agreement, and shall survive the Closing of the transactions provided for
herein.
4.1. CORPORATE.
4.1.(a) ORGANIZATION. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of New
Jersey.
4.1.(b) CORPORATE POWER. Company has all requisite corporate power
and authority to own, operate and lease its properties, to carry on its
business as and where such is now being conducted, to enter into this
Agreement and the other documents and instruments to be executed and
delivered by Company pursuant hereto and to carry out the transactions
contemplated hereby and thereby.
4.1.(c) QUALIFICATION. Company is duly licensed or qualified to do
business as a foreign corporation, and is in good standing, in each
jurisdiction wherein the character of the properties owned or leased by it,
or the nature of its business, makes such licensing or qualification
necessary, except where the failure so to qualify would not have a material
adverse effect upon (i) the Purchased Assets, (ii) the business, operations
or financial condition of the Business, or (iii) the ability of Company or
Shareholder to consummate the transactions contemplated hereby (any of the
foregoing "Material Adverse Effect"). The states in which Company is
licensed or qualified to do business are listed in Schedule 4.1.(c).
4.1.(d) NO SUBSIDIARIES. Company does not own any interest in any
corporation, partnership or other entity.
4.2. AUTHORITY. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Company pursuant
hereto and the consummation
11
of the transactions contemplated hereby and thereby have been duly authorized
by the Board of Directors of Company and the Shareholder. No other or
further corporate act or proceeding on the part of Company is necessary to
authorize this Agreement or the other documents and instruments to be
executed and delivered by Company pursuant hereto or the consummation of the
transactions contemplated hereby and thereby. This Agreement constitutes,
and when executed and delivered, the other documents and instruments to be
executed and delivered by Company pursuant hereto will constitute, valid
binding agreements of Company, enforceable in accordance with their
respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally, and by
general equitable principles.
4.3. NO VIOLATION. Except as set forth on Schedule 4.3, neither the
execution and delivery of this Agreement or the other documents and instruments
to be executed and delivered by Company pursuant hereto, nor the consummation by
Company of the transactions contemplated hereby and thereby (a) will violate any
applicable Law or Order, (b) except for applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), will
require any authorization, consent, approval, exemption or other action by or
notice to any Government Entity (including, without limitation, under any
"plant-closing" or similar law), or (c) subject to obtaining the consents
referred to in Schedule 4.3, will violate or conflict with, or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or will result in the termination of, or accelerate
the performance required by, or result in the creation of any Lien (as defined
in Section 4.12.(a)) upon any of the assets of Company under, any term or
provision of the Certificate of Incorporation or By-laws of Company or of any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Company is a party or by which Company or any of
its assets or properties may be bound or affected.
4.4. FINANCIAL STATEMENTS. Included as Schedule 4.4 are true and complete
copies of the financial statements of Company consisting of (i) balance sheets
of Company as of June 30, 1997 and 1996, and the related statements of income
and cash flows for the year ended June 30, 1997 (including the notes contained
therein or annexed thereto), which financial statements were reported on, and
are accompanied by, the signed, unqualified opinion of BDO Xxxxxxx, LLP,
independent auditors for Company with respect thereto, and (ii) an unaudited
balance sheet of Company as of February 28, 1998 (the "Recent Balance Sheet"),
and the related unaudited statement of income for the eight months then ended.
Except as disclosed on Schedule 4.4, all of such financial statements (including
all notes and schedules contained therein or annexed thereto) are true, complete
and accurate, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, for the
absence of footnote disclosure) applied on a consistent basis, have been
prepared in accordance with the books and records of Company, and fairly
present, in accordance with generally accepted accounting principles, the
assets, liabilities and financial position, the results of operations and cash
flows of Company as of the dates and for the years and periods indicated. The
principal and accrued interest owed by Company on the Assumed Debt obligations
was $12,500,830.00
12
as of the close of business on April 30, 1998 and $12,630,744 as of the close
of business on May 13, 1998, as more specifically described on Schedule
2.1(f) attached hereto.
4.5. TAX MATTERS.
4.5.(a) PROVISION FOR TAXES. The provision made for taxes on the
Recent Balance Sheet is sufficient for the payment of all federal, state,
foreign, county, local and other income, ad valorem, excise, profits,
franchise, occupation, property, payroll, sales, use, gross receipts and
other taxes (and any interest and penalties) and assessments, whether or
not disputed at the date of the Recent Balance Sheet, and for all years and
periods prior thereto. No provision for taxes has been made because
Company is an S corporation for federal income tax purposes and because
Company has sufficient net operating loss carryforwards for New Jersey tax
purposes to offset any New Jersey income taxes on current year's income as
of the date of the Recent Balance Sheet. Since the date of the Recent
Balance Sheet, Company has not incurred any taxes other than taxes incurred
in the ordinary course of business consistent in type and amount with past
practices of Company.
4.5.(b) TAX RETURNS FILED. Except as set forth on Schedule 4.5.(b),
all federal, state, foreign, county, local and other tax returns required
to be filed by or on behalf of Company have been timely filed and when
filed were true and correct in all material respects, and the taxes shown
as due thereon were paid or adequately accrued. Company has duly withheld
and paid all taxes which it is required to withhold and pay relating to
salaries and other compensation heretofore paid to the employees of
Company.
4.5.(c) TAX AUDITS. Except as provided in Schedule 4.5(c), the
federal and state income tax returns of Company for the past five fiscal
years have not been audited by the IRS and appropriate state taxing
authorities for the periods and to the extent set forth in Schedule
4.5.(c), and Company has not received from the IRS or from the tax
authorities of any state, county, local or other jurisdiction any notice of
underpayment of taxes or other deficiency which has not been paid nor any
objection to any return or report filed by Company. There are outstanding
no agreements or waivers extending the statutory period of limitations
applicable to any tax return or report.
4.5.(d) CONSOLIDATED GROUP. Since 1993, Company has not been a
member of an affiliated group of corporations that filed a consolidated
income tax return.
4.5.(e) OTHER. Company has, since July 1, 1987, continuously
maintained the status and qualification of an S corporation pursuant to
section 1361 ET. SEQ. of the Code for federal income tax purposes. Except
as set forth in Schedule 4.5.(e), since June 30, 1991, Company has not (i)
filed any consent or agreement under Section 341(f) of the Code, (ii)
applied for any tax ruling, (iii) entered into a closing agreement with any
taxing authority, (iv) filed an election under Section 338(g) or Section
338(h)(10) of the Code (nor has a deemed election under Section 338(e) of
the
13
Code occurred), (v) made any payments, or been a party to an agreement
(including this Agreement) that under any circumstances could obligate it
to make payments that will not be deductible because of Section 280G of the
Code, or (vi) been a party to any tax allocation or tax sharing agreement.
4.6. ACCOUNTS RECEIVABLE. Except as described in Schedule 4.6, all
accounts receivable of Company reflected on the Recent Balance Sheet, and as
incurred in the normal course of business since the date thereof, represent
arm's length sales actually made in the ordinary course of business; are
collectible (net of the reserves shown on the Recent Balance Sheet for doubtful
accounts) in the ordinary course of business without the necessity of commencing
legal proceedings; are subject to no counterclaim or setoff; and are not in
dispute. Schedule 4.6 contains an aged schedule of accounts receivable included
in the Recent Balance Sheet. All accounts receivable of Company as of the
Closing Date will represent arm's length sales actually made in the ordinary
course of business and will be collected (net of the reserve as of the Closing
Date for doubtful accounts) in the ordinary course of business without the
necessity of commencing legal proceedings and will be subject to no counterclaim
or set-off, except for the customary adjustments and discounts reflected on
Schedule 4.6.
4.7. INVENTORY. Except as described in Schedule 4.7, all inventory of
Company reflected on the Recent Balance Sheet consists of a quality and quantity
usable and saleable in the ordinary course of business had a commercial value at
least equal to the value shown on such balance sheet and is valued in accordance
with generally accepted accounting principles at the lower of cost (on a FIFO
basis) or market. All inventory purchased since the date of such balance sheet
consists of a quality and quantity usable and saleable in the ordinary course of
business. Except as set forth in Schedule 4.7, all inventory of Company at
April 30, 1998, is located on premises owned or leased by Company as reflected
in this Agreement. Except as set forth on Schedule 4.7, the cost of finished
goods contained in inventory constitutes items produced (i) pursuant to
contracts or open orders taken in the ordinary course of business, from regular
customers of Company with no recent history of credit problems with respect to
Company or (ii) as floor stock produced in the ordinary course of business;
neither Company nor, to the knowledge of Company and Shareholder, any such
customer is in material breach of the terms of any obligation to the other, and,
to the knowledge of Company and the Shareholder, no valid grounds exist for any
set-off of amounts billable to such customers for the finished goods, except for
the customary adjustments and discounts reflected on Schedule 4.6. All finished
goods are of a quality ordinarily produced in accordance with the requirements
of specifications of customers, are fit for human consumption, are saleable
based on Company's normal sales experience prior to the expiration of their
shelf life, if any, and will require no rework with respect to services
performed prior to Closing in excess of normal reserves established therefor.
Schedule 4.7 sets forth a description of all finished goods that have been
reworked by Company during the previous six months (on a monthly basis). The
term "rework" shall not include relabelling of products in the ordinary course
of business consistent with past practices. All packaging, labels and finished
goods contained in inventory are in compliance in all material respects as to
content, labeling and packaging with applicable laws and regulations (including,
without limitation, those of the U.S. Department of Agriculture and U.S. Food
and
14
Drug Administration). Schedule 4.7 contains a list of all inventory supplied
to Company by customers as of May 2, 1998.
4.8. ABSENCE OF CERTAIN CHANGES. Except as and to the extent set forth in
Schedule 4.8, since the date of the Recent Balance Sheet there has not been:
4.8.(a) NO ADVERSE CHANGE. Any change in the financial condition,
assets, Liabilities, business, prospects or operations of Company which has
had or could reasonably be expected to have a Material Adverse Effect on
Company;
4.8.(b) NO DAMAGE. Any loss, damage or destruction, whether covered
by insurance or not, affecting Company's business or properties which has
had or could reasonably be expected to have a Material Adverse Effect on
Company;
4.8.(c) NO INCREASE IN COMPENSATION. Any increase in the
compensation, salaries or wages payable or to become payable to any
employee or agent of Company (including, without limitation, any increase
or change pursuant to any bonus, pension, profit sharing, retirement or
other plan or commitment), or any bonus or other employee benefit granted,
made or accrued, except for bonuses and other special compensation
arrangements for employees that will be paid by Company after Closing or
for which Buyer will be reimbursed or credited with at the Closing;
4.8.(d) NO LABOR DISPUTES. Any labor dispute or disturbance, other
than routine individual grievances which are not material individually or
in the aggregate to the business, financial condition or results of
operations of Company;
4.8.(e) NO NONORDINARY COMMITMENTS. Any commitment or transaction
by Company (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business consistent with
past practice;
4.8.(f) NO DIVIDENDS. Any declaration, setting aside, or payment of
any dividend or any other distribution in respect of Company's capital
stock, except distributions to the Shareholder in the aggregate amount of
$80,000; any redemption, purchase or other acquisition by Company of any
capital stock of Company, or any security relating thereto; or any other
payment to any shareholder of Company as such a shareholder.
4.8.(g) NO DISPOSITION OF PROPERTY. Any sale, lease or other
transfer or disposition of any material properties or assets of Company,
except for the sale of inventory items in the ordinary course of business;
15
4.8.(h) NO INDEBTEDNESS. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company other than advances and draws
for working capital purposes under the Company's existing credit
facilities;
4.8.(i) NO LIENS. Any Lien made on any of the properties or assets
of Company;
4.8.(j) NO AMENDMENT OF CONTRACTS. Any entering into, amendment or
termination by Company of any contract (other than the Cranberry Supply
Contracts), or any waiver of material rights thereunder (including, without
limitation, requesting or accepting of any delivery prior to the Closing
Date under the Ocean Spray Contract described in Schedule 2.2(a)(i) in
advance of or in addition to the normal or regularly scheduled deliveries
thereunder), other than in the ordinary course of business consistent with
past practice or as contemplated by this Agreement or the Inventory
Purchase Agreement (as defined in Section 7.10);
4.8.(k) NO LOANS OR ADVANCES. Any loan or advance (other than
advances to employees in the ordinary course of business for travel and
entertainment in accordance with past practice) to any person including,
but not limited to, any officer, director or employee of Company, or the
Shareholder or Affiliate;
4.8.(l) CREDIT. Any grant of credit to any customer or distributor
on terms or in amounts more favorable than those which have been extended
to such customer or distributor in the past, any write-off, compromise or
other satisfaction of any receivable at less than the face value thereof,
any other change in the terms of any credit heretofore extended, or any
other change of Company's policies or practices with respect to the
granting of credit, (except for routine write-offs or credits to customers
granted in the ordinary course of Company's business consistent with past
practices as described in Schedule 4.6);
4.8.(m) NO ACCOUNTING CHANGES. Any write-off or write-down of any
balance sheet account, or any establishment of or increase or adjustment in
the amount of any reserve (other than in the ordinary course of Company's
business consistent with past practices) or any change in any method of
accounting or accounting practice;
4.8.(n) NO CRANBERRY PURCHASE COMMITMENTS. Any contract or
commitments for the purchase of raw, processed or frozen cranberries,
cranberry juice or cranberry juice concentrate; or
4.8.(o) NO UNUSUAL EVENTS. Any other material event or condition
not in the ordinary course of business of Company which had or would have a
Material Adverse Effect on Company.
16
4.9. ABSENCE OF UNDISCLOSED LIABILITIES. Except as and to the
extent specifically disclosed in the Recent Balance Sheet, or in
Schedule 4.9, Company does not have any Liabilities other than
commercial liabilities and obligations incurred since the date of the
Recent Balance Sheet in the ordinary course of business and consistent
in amount and nature with past practice and none of which has or will
have a Material Adverse Effect on the business, financial condition or
results of operations of Company. Except as and to the extent described
in the Recent Balance Sheet or in Schedule 4.9, neither Company nor the
Shareholder has knowledge of any basis for the assertion against Company
of any Liability and there are no circumstances, conditions, happenings,
events or arrangements, contractual or otherwise, known to the Company
or the Shareholder, which may give rise to Liabilities, except
commercial liabilities and obligations incurred in the ordinary course
of Company's business and consistent in amount and nature with past
practice.
4.10. NO LITIGATION. Except as set forth in Schedule 4.10, there
is no Litigation pending or to the knowledge of Company and the
Shareholder, threatened against Company, its directors (in such
capacity), its business or any of its assets, nor does Company or the
Shareholder know, or have grounds to know, of any basis for any
Litigation. Schedule 4.10 also identifies all Litigation to which
Company or any of its directors (in such capacity) have been parties
since July 1, 1992. Except as set forth in Schedule 4.10, neither
Company nor its business or assets is subject to any Order.
4.11. COMPLIANCE WITH LAWS AND ORDERS.
4.11.(a) COMPLIANCE. Except as set forth in Schedule
4.11.(a), Company (including each and all of its operations,
practices, properties and assets) is in compliance in all material
respects with all applicable statutes, laws, common laws,
ordinances, rules or regulations in effect as of the date hereof or
as of the Closing Date (collectively, "Laws") or any order, writ,
injunction, judgment, plan or decree (collectively, "Orders") of
any court, arbitrator, department, commission, board, bureau,
agency, authority, instrumentality or other body, whether federal,
state, municipal, foreign or other (collectively "Governmental
Entities"), including, without limitation, those applicable to
discrimination in employment, occupational safety and health, trade
practices, competition and pricing, product warranties, zoning,
building and sanitation, employment, retirement and labor
relations, product advertising and the Environmental Laws as
hereinafter defined. Except as set forth in Schedule 4.11.(a),
since 1991 Company has not received notice of any violation or
alleged violation of, and is subject to no Liability for past or
continuing violation of, any Laws or Orders. All reports and
returns required to be filed by Company with any Government Entity
have been filed, and were accurate and complete when filed.
Without limiting the generality of the foregoing:
(i) The operation of Company's business as it is
now conducted does not, nor does any condition existing at any
of the Facilities, in any manner constitute a nuisance or
other tortious interference with the
17
rights of any person or persons in such a manner as to give
rise to or constitute the grounds for a non-frivolous suit,
action, claim or demand by any such person or persons seeking
compensation or damages or seeking to restrain, enjoin or
otherwise prohibit any aspect of the conduct of such business
or the manner in which it is now conducted.
(ii) Company has made all required payments to its
unemployment compensation reserve accounts with the
appropriate governmental departments of the states where it is
required to maintain such accounts.
(iii) Company has delivered to Buyer copies of all
reports of Company for the past five years required under the
federal Occupational Safety and Health Act of 1970, as
amended, and under all other applicable health and safety laws
and regulations. The deficiencies, if any, noted on such
reports have been corrected.
4.11.(b) LICENSES AND PERMITS. Company has all material licenses,
permits, approvals, authorizations and consents of all Government
Entities and all certification organizations required for the conduct of
the business (as presently conducted) and operation of the Facilities.
All such licenses, permits, approvals, authorizations and consents are
described in Schedule 4.11.(b) and are in full force and effect. Except
as set forth in Schedule 4.11.(b), since 1991 Company (including its
operations, properties and assets) is and has been in compliance in all
material respects with all such permits and licenses, approvals,
authorizations and consents.
4.11.(c) ENVIRONMENTAL MATTERS. The applicable Laws relating to
pollution or protection of the environment, including Laws relating to
emissions, discharges, generation, storage, releases or threatened
releases of Hazardous Substances into the environment (including,
without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Substances including, without limitation, the
Clean Water Act, the Clean Air Act, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act and CERCLA, as amended,
and their state and local counterparts are herein collectively referred
to as the "Environmental Laws". Without limiting the generality of the
foregoing provisions of this Section 4.11(c), and except as set forth on
Schedule 4.11(c), Company is in full compliance with all material
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws or contained in any regulations, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. Except as set forth in Schedule
4.11.(c), there is no Litigation nor any demand, claim, hearing or
notice of violation pending or threatened against Company relating in
any way to the Environmental Laws or any Order issued, entered,
18
promulgated or approved thereunder. Except as set forth in Schedule
4.11.(c), there are no past or present (or, to the best of Company's and
the Shareholder's knowledge, future) events, conditions, circumstances,
activities, practices, incidents, actions, omissions or plans which may
interfere with or prevent compliance or continued compliance with the
Environmental Laws or with any Order issued, entered, promulgated or
approved thereunder, or which may give rise to any Liability, including,
without limitation, Liability under CERCLA or similar state or local
Laws, or otherwise form the basis of any Litigation, hearing, notice of
violation, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Hazardous Substance.
4.12. TITLE TO AND CONDITION OF PROPERTIES.
4.12.(a) MARKETABLE TITLE. Company has good and marketable title
to all the Purchased Assets (other than the Bridgeton Freezer), and BFC
has good and marketable title to the Bridgeton Freezer. Such Purchased
Assets are held free and clear in each case of all mortgages, liens
(statutory or otherwise), security interests, claims, pledges, licenses,
equities, options, conditional sales contracts, assessments, levies,
easements, covenants, reservations, restrictions, rights-of-way,
exceptions, limitations, charges or encumbrances of any nature
whatsoever (collectively, "Liens") except those described in Schedule
4.12.(a)(i); and, in the case of Real Property, the following
("Permitted Real Property Liens"): Liens for taxes not yet due or which
are being contested in good faith by appropriate proceedings (and which,
as of the date of the Recent Balance Sheet, have been sufficiently
accrued or reserved against in the Recent Balance Sheet), matters that
would be disclosed by an accurate survey of the Real Property, municipal
and zoning ordinances and easements for public utilities, none of which
interfere with the use of the property as currently utilized and those
matters set forth on Schedule 4.12(a)(ii). None of the Purchased Assets
are subject to any restrictions with respect to the transferability
thereof, except that certain contracts may require the consent to
assignment thereof and certain licenses and permits may not be
assignable. Company has complete and unrestricted power and right to
sell, assign, convey and deliver the Purchased Assets to Buyer as
contemplated hereby. At Closing, Buyer will receive good and marketable
title to all the Purchased Assets, free and clear of all Liens of any
nature whatsoever except those described in Schedule 4.12.(a)(i) and
Permitted Real Property Liens.
4.12.(b) CONDITION. Except as set forth on Schedule 4.12(b), all
tangible assets (real and personal) constituting Purchased Assets
hereunder are in good operating condition and repair, free from any
defects (except for reasonable wear and tear and such defects which are
not significant as do not interfere with the use thereof in the conduct
of the normal operations of Company), and, as of the date of this
Agreement and the Closing Date are, or will then be, sufficient to carry
on the business of Company as conducted during the preceding 12 months.
Except as set forth on Schedule 4.12(b), all
19
buildings, plants and other structures owned or otherwise utilized by
Company are in good condition and repair and have no structural defects
or defects (except for reasonable wear and tear and such defects which
are not significant as do not interfere with the use thereof in the
conduct of the normal operations of Company) affecting the plumbing,
electrical, sewerage, or heating, ventilating or air conditioning
systems.
4.12.(c) REAL PROPERTY. Schedules 1.1.(a) and 1.1.(b) set forth
all real property owned, used or occupied by Company, or to be acquired
by Company (the "Real Property"), including a description of all land,
and all encumbrances, easements or rights of way of record (or, if not
of record, of which Company has notice or knowledge) granted on or
appurtenant to or otherwise affecting such Real Property, the zoning
classification thereof, and all plants, buildings or other structures
located thereon. Schedule 1.1.(b) also sets forth, with respect to each
parcel of Real Property which is leased, the duration, size of premises,
rental rate, and renewal, termination, expansion and purchase options of
such lease. There are now in full force and effect duly issued
certificates of occupancy permitting the Real Property and improvements
located thereon to be legally used and occupied as the same are now
constituted. All of the Real Property has permanent rights of access to
dedicated public streets. No fact or condition exists which would
prohibit or adversely affect the ordinary rights of access to and from
the Real Property from and to the existing highways and roads and there
is no pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress. Except as disclosed on
Schedule 4.12(c), there is not (i) any claim of adverse possession or
prescriptive rights involving any of the Real Property, (ii) any
structure located on any Real Property which encroaches on or over the
boundaries of neighboring or adjacent properties or (iii) any structure
of any other party which encroaches on or over the boundaries of any of
such Real Property. Except (a) as disclosed on Schedule 4.12(c) or (b)
as may be disclosed by an accurate survey of the Real Property to the
extent that it does not materially interfere with the operation of the
business of the Real Property as currently operated by Company, none of
the Real Property is located in a flood plain, flood hazard area,
wetland or lakeshore erosion area within the meaning of any Law. No
public improvements have been commenced and, to Company's and
Shareholder's knowledge, none are planned which in either case may
result in special assessments against or otherwise materially adversely
affect any Real Property. No portion of any of the Real Property has
been used as a landfill or for storage (other than temporary storage in
the ordinary course of Company's business) or landfill of Hazardous
Substances. Except as disclosed on Schedule 4.12(c), neither Company
nor the Shareholder has notice or knowledge of any (i) planned or
proposed increase in assessed valuations of any Real Property, (ii)
Order requiring repair, alteration, or correction of any existing
condition affecting any Real Property or the systems or improvements
thereat, (iii) condition or defect which could give rise to an order of
the sort referred to in "(ii)" above, or (iv) underground storage tanks,
or any structural, mechanical, or other defects of material significance
affecting any Real Property or the systems or improvements thereat
(including, but not limited to, inadequacy for normal use of mechanical
systems or disposal or water systems at or serving the Real Property).
20
4.12.(d) NO CONDEMNATION OR EXPROPRIATION. Neither the whole nor
any portion of the property or any other assets of Company is subject to
any Order to be sold or is being condemned, expropriated or otherwise
taken by any Government Entity with or without payment of compensation
therefor nor, to the best of Company's and Shareholder's knowledge, has
any such condemnation, expropriation or taking been proposed.
4.12.(e) NO CERTIFIED SURVEY MAP REQUIRED. No certified survey
map or other state, municipal, or other governmental approval regarding
the division, platting, or mapping of real estate is required as a
prerequisite to the conveyance by Company to Buyer (or as a prerequisite
to the recording of any conveyance document) of any Owned Real Property
or Leased Real Property pursuant to the terms hereof.
4.13. INSURANCE. Set forth in Schedule 4.13 is a complete and accurate
list and description of all policies of fire, liability, product liability,
workers compensation, health and other forms of insurance presently in effect
with respect to the business and properties of Company, true and correct
copies of which have heretofore been delivered to Buyer. Schedule 4.13
includes, without limitation, the carrier, a summary description of coverage,
the limits of coverage, retention or deductible amounts, amount of annual
premiums, date of expiration with respect to each such policy, and any
pending claims in excess of $5,000. All such policies are valid, outstanding
and enforceable policies and provide insurance coverage for the properties,
assets and operations of Company, of the kinds, in the amounts and against
the risks customarily maintained by organizations similarly situated; and no
such policy (nor any previous policy) is subject to any currently enforceable
retroactive rate or premium adjustment, loss sharing arrangement or other
actual or contingent liability arising wholly or partially out of events
arising prior to the date hereof. Schedule 4.13 indicates each policy as to
which (a) the coverage limit has been reached or (b) the total incurred
losses to date equal 75% or more of the coverage limit. No notice of
cancellation or termination has been received with respect to any such
policy, and neither Company nor the Shareholder has knowledge of any act or
omission of Company which could result in cancellation of any such policy
prior to its scheduled expiration date. Company has not been refused any
insurance with respect to any aspect of the operations of the business nor
has its coverage been limited by any insurance carrier to which it has
applied for insurance or with which it has carried insurance during the last
three years. Company has duly and timely made all claims it has been entitled
to make under each policy of insurance. Since July 1, 1991, all products
liability and general liability policies maintained by or for the benefit of
Company have been "occurrence" policies and not "claims made" policies.
There is no claim by Company pending under any such policies as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies, and neither Company nor the Shareholder knows of any basis for
denial of any claim under any such policy. Company has not received any
written notice from or on behalf of any insurance carrier issuing any such
policy that insurance rates therefor will hereafter be substantially
increased (except to the extent that insurance rates may be increased for all
similarly situated risks) or that there will hereafter be a cancellation or
an increase in a deductible (or an increase in premiums in order to maintain
an existing deductible) or nonrenewal of any such policy. Such policies are
sufficient in all
21
material respects for compliance by Company with all requirements of law and
with the requirements of all material contracts to which Company is a party.
4.14. CONTRACTS AND COMMITMENTS.
4.14.(a) REAL PROPERTY LEASES. Except as set forth in Schedule
1.1.(b), Company has no leases of real property.
4.14.(b) PERSONAL PROPERTY LEASES. Except as set forth in Schedule
1.1.(e), Company has no leases of personal property involving consideration
or other expenditure in excess of $10,000 or involving performance over a
period of more than six months.
4.14.(c) PURCHASE COMMITMENTS. Except for the Cranberry Supply
Contracts, Company has no purchase commitments for inventory items or
supplies that, together with amounts on hand, constitute in excess of 12
months normal usage, or which are at an excessive price, nor does Company
have any purchase commitments for equipment with a price in excess of
$50,000, except as set forth on Schedule 14.4(c).
4.14.(d) SALES COMMITMENTS. Company has no sales contracts or
commitments to customers or distributors which aggregate in excess of
$50,000 to any one customer or distributor (or group of affiliated
customers or distributors), other than with respect to sales of inventory
in the ordinary course of business. Company has no sales contracts or
commitments except those made in the ordinary course of business, at arm's
length, and no such contracts or commitments (taken as a whole with respect
to any one customer or distributor) are for a sales price which would
result in a loss to the Company based on conditions and circumstances
existing on the date of this Agreement.
4.14.(e) CONTRACTS FOR SERVICES. Except as disclosed on Schedule
4.14(e), Company has no agreement, understanding, contract or commitment
(written or oral) with any officer, employee, agent, consultant,
distributor, dealer or franchisee that is not cancelable by Company
on notice of not longer than 30 days without liability, penalty or premium
of any nature or kind whatsoever.
4.14.(f) POWERS OF ATTORNEY. The Company has not given a power of
attorney, which is currently in effect, to any person, firm or
corporation for any purpose whatsoever.
4.14.(g) COLLECTIVE BARGAINING AGREEMENTS. Except as set forth in
Schedule 4.14.(g), Company is not a party to any collective bargaining
agreements with any unions, guilds, shop committees or other collective
bargaining groups. Copies of all such agreements have heretofore been
delivered to Buyer.
22
4.14.(h) LOAN AGREEMENTS. Except as set forth in Schedule
4.14.(h), Company is not obligated under any loan agreement, promissory
note, letter of credit, or other evidence of indebtedness as a
signatory, guarantor or otherwise.
4.14.(i) GUARANTEES. Except as set forth on Schedule 4.14.(i),
Company has not guaranteed the payment or performance of any person,
firm or corporation, agreed to indemnify any person or act as a surety,
or otherwise agreed to be contingently or secondarily liable for the
obligations of any person.
4.14.(j) CONTRACTS SUBJECT TO RENEGOTIATION. Company is not a
party to any contract with any governmental body which is subject to
renegotiation.
4.14.(k) BURDENSOME OR RESTRICTIVE AGREEMENTS. Except as set
forth on Schedule 4.14(k), Company is not a party to nor is it bound by
any agreement, deed, lease or other instrument which is so burdensome as
to materially affect or impair the operation of Company. Without
limiting the generality of the foregoing, Company is not a party to nor
is it bound by any agreement requiring Company to assign any interest in
any trade secret or proprietary information, or prohibiting or
restricting Company from competing in any business or geographical area
or soliciting customers or otherwise restricting it from carrying on its
business anywhere in the world.
4.14.(l) OTHER MATERIAL CONTRACTS. Company has no lease, license,
contract or commitment of any nature involving consideration or other
expenditure in excess of $75,000, or involving performance over a period
of more than 12 months, or which is otherwise individually material to
the operations of Company, except as explicitly described in Schedule
4.14.(l) or in any other Schedule.
4.14.(m) NO DEFAULT. Except as set forth on Schedule 4.14(m),
Company is not in default under any lease, contract or commitment, nor
has any event or omission occurred which through the passage of time or
the giving of notice, or both, would constitute a default thereunder or
cause the acceleration of any of Company's obligations or result in the
creation of any Lien on any of the assets owned, used or occupied by
Company. To the knowledge of Company and Shareholder, no third party is
in default under any lease, contract or commitment to which Company is a
party, nor has any event or omission occurred which, through the passage
of time or the giving of notice, or both, would constitute a default
thereunder or give rise to an automatic termination, or the right of
discretionary termination, thereof.
23
4.15. LABOR MATTERS.
4.15.(a) UNION CONTRACTS. Company is a party to collective
bargaining agreements with the United Food & Commercial Workers Union,
Local 56 ("UFCW Union"), and the International Brotherhood of Teamsters,
Local Union No. 676 ("Teamsters Union"), which are each effective
through May 14, 1998, with respect to certain employees of Company
located at Company's facility in Bridgeton, New Jersey (the "Union
Contracts"). A copy of the Union Contracts, together with all other
agreements and understandings with the unions referenced therein, have
previously been provided by Company to Buyer. Company is not in
violation or breach of the Union Contracts or any of such other
agreements.
4.15.(b) LABOR DISPUTES. Except as set forth in Schedule
4.15.(b), within the last five years Company has not experienced any
labor disputes or any work stoppage due to labor disagreements in
connection with its business. Except to the extent set forth in
Schedule 4.15.(b), (a) Company is in compliance with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and is not engaged in any unfair labor
practice; (b) there is no unfair labor practice charge or complaint
against Company pending or, to the knowledge of Company and Shareholder,
threatened; (c) there is no labor strike, dispute, slowdown or stoppage
actually pending or, to the knowledge of Company and Shareholder,
threatened against or affecting Company nor any secondary boycott with
respect to products of Company; (d) there is no representation of the
employees of Company (other than the employees covered by the Union
Contracts) by any labor organization and there are no union organizing
activities among the employees of Seller and, to the knowledge of
Company and Shareholder, no question concerning representation has been
raised or is threatened respecting the employees of Company; (e) no
grievance which might have a material adverse effect on Company, nor any
arbitration proceeding arising out of or under collective bargaining
agreements, is pending and, to the knowledge of Company and Shareholder,
no such claim therefor exists; (f) there are no administrative charges
or court complaints against Company concerning alleged employment
discrimination or other employment related matters pending or, to the
knowledge of Company and Shareholder, threatened before the U.S. Equal
Employment Opportunity Commission or any Government Entity; and (g)
except for the Union Contracts or as set forth on Schedule 4.15.(b), no
representation has been made to any employee regarding longevity of
employment.
4.16. EMPLOYEE BENEFIT PLANS.
4.16.(a) DISCLOSURE. Schedule 4.16.(a) sets forth all pension,
thrift, savings, profit sharing, retirement, incentive bonus or other
bonus, medical, dental, life, accident insurance, benefit, employee
welfare, disability, group insurance, stock purchase, stock option,
stock appreciation, stock bonus, executive or deferred compensation,
hospitalization and other similar fringe or employee benefit plans,
24
programs and arrangements, and any employment or consulting contracts,
"golden parachutes," collective bargaining agreements, severance
agreements or plans, vacation and sick leave plans, programs,
arrangements and policies, including, without limitation, all "employee
benefit plans" (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all employee
manuals, and all written or binding oral statements of policies,
practices or understandings relating to employment, which are sponsored,
maintained or contributed to or are required to be contributed to by
Company and are provided to, for the benefit of, or relate to, any
persons ("Company Employees") employed by Company. The items described
in the foregoing sentence (other than any "multiemployer plan", as
defined in Section 4001 of ERISA (a "Multiemployer Plan") are
hereinafter sometimes referred to collectively as "Employee
Plans/Agreements," and each individually as an "Employee
Plan/Agreement." True and correct copies of all written Employee
Plans/Agreements, including all amendments thereto, have heretofore been
provided to Buyer. Each of the Employee Plans/Agreements is identified
on Schedule 4.16.(a), to the extent applicable, as one or more of the
following: an "employee pension benefit plan" (as defined in Section
3(2) of ERISA), a "defined benefit plan" (as defined in Section 414 of
the Code), an "employee welfare benefit plan" (as defined in Section
3(1) of ERISA), and/or as a plan intended to be qualified under Section
401 of the Code. Except as identified on Schedule 4.16(a), none of the
items described in the first sentence of this Section 4.16(a) is a
Multiemployer Plan, and neither the Company, nor any member of its
current or any prior controlled group (as defined in Section 4001 of
ERISA), has ever contributed or been obligated to contribute to any
Multiemployer Plan. The Employee Plans/Agreements to be assumed by
Buyer pursuant to Section 6.2 are hereinafter sometimes referred to
collectively as the "Assumed Employee Plans/Agreements" and each
individually as an "Assumed Employee Plan Agreement."
4.16.(b) TERMINATIONS, PROCEEDINGS, PENALTIES, ETC. With respect
to each employee benefit plan (including, without limitation, the
Employee Plans/Agreements) that is subject to the provisions of Title IV
of ERISA, other than a Multiemployer Plan, and with respect to which the
Company or any of its assets may, directly or indirectly, be subject to
any Liability, contingent or otherwise, or the imposition of any Lien,
except as specified on Schedule 4.16(b):
(i) no such plan has been terminated so as to subject,
directly or indirectly, any assets of Company to any Liability or the
imposition of any Lien under Title IV of ERISA;
(ii) no proceeding has been initiated or threatened by any
person (including the Pension Benefit Guaranty Corporation ("PBGC"))
to terminate any such plan;
(iii) no condition or event currently exists or currently is
expected to occur that could subject, directly or indirectly, any
assets of
25
Company to any Liability or the imposition of any Lien under
Title IV of ERISA, whether to the PBGC or to any other person or
otherwise on account of the termination of any such plan;
(iv) if any such plan were to be terminated as of the
Closing Date, no assets of Company would be subject, directly or
indirectly, to any Liability or the imposition of any Lien under
Title IV of ERISA;
(v) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred with respect to any such plan; and
(vi) no such plan which is subject to Section 302 of ERISA
or Section 412 of the Code has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the
Code, respectively), whether or not waived.
4.16.(c) PROHIBITED TRANSACTIONS, ETC. There have been no
"prohibited transactions" within the meaning of Section 406 or 407 of ERISA
or Section 4975 of the Code for which a statutory or administrative
exemption does not exist with respect to any Employee Plan/Agreement, and
except as disclosed in Schedule 4.16(f) and (g), no event or omission has
occurred in connection with which the Company or any of its assets or any
Assumed Employee Plan/Agreement, directly or indirectly, could be subject
to any Liability under ERISA, the Code or any other Law or Order applicable
to any Assumed Employee Plan/Agreement, or under any agreement, instrument,
Law or Order pursuant to which Company is required to indemnify any person
against liability incurred under any such Law or Order.
4.16.(d) FULL FUNDING. Except to the extent set forth on Schedule
4.16.(d), (as the date of most recent actuarial report) the funds available
under each Assumed Employee Plan/Agreement that is subject to Article IV of
ERISA or Section 412 of the Code, equal or exceed the amounts required to
be paid, or which would be required to be paid if such Plan were terminated
on such date, on account of rights vested or accrued as of the Closing Date
(using the actuarial methods and assumptions then used by Company's
actuaries for such purposes).
4.16.(e) CONTROLLED GROUP; AFFILIATED SERVICE GROUP; LEASED
EMPLOYEES. Except as set forth on Schedule 4.16(e), Company is not and
never has been a member of a controlled group of corporations as defined in
Section 414(b) of the Code or in common control with any unincorporated
trade or business as determined under Section 414(c) of the Code; Company
is not and never has been a member of an "affiliated service group" within
the meaning of Section 414(m) of the Code; and there are not and never have
been any leased employees within the meaning of Section 414(n) of the Code
who perform services for Company, and no individuals are expected to become
leased employees prior to the Closing Date.
26
4.16.(f) PAYMENTS AND COMPLIANCE. Except as set forth on Schedule
4.16(f), with respect to each Assumed Employee Plan/Agreement, (i) all
payments due from Company to date have been made and all amounts properly
accrued to date as Liabilities of Company which have not been paid have
been properly recorded on the books of Company and are reflected in the
Recent Balance Sheet; (ii) Company has complied with, and each such
Employee Plan/Agreement conforms in form and operation to, all applicable
laws and regulations, including but not limited to ERISA and the Code, in
all material respects and all reports and information relating to such
Employee Plan/Agreement required to be filed with any governmental entity
have been timely filed; (iii) all reports and information relating to each
such Employee Plan/Agreement required to be disclosed or provided to
participants or their beneficiaries have been timely disclosed or provided;
(iv) each such Employee Plan/Agreement which is intended to qualify under
Section 401 of the Code has received a favorable determination letter from
the IRS with respect to such qualification, its related trust has been
determined to be exempt from taxation under Section 501(a) of the Code,
and, to the knowledge of Company and the Shareholder, nothing has occurred
since the date of such letter that has or is likely to adversely affect
such qualification or exemption; (v) there are no actions, suits or claims
pending (other than routine claims for benefits) or threatened with respect
to such Employee Plan/Agreement or against the assets of such Employee
Plan/Agreement; (vi) no such Employee Plan/Agreement is a plan which is
established and maintained outside the United States primarily for the
benefit of individuals substantially all of whom are nonresident aliens;
and (viii) other than short-term salary continuation or disability benefits
for periods not in excess of six months and the payment of medical claims
not in excess of the attachment points under a stop-loss insurance
contract, the benefits under each Assumed Employee Plan/Agreement that
provides medical, dental, disability, life, accidental death and
dismemberment, travel accident or similar welfare benefit coverage or
benefits on behalf of current or former employees of the Company, are
provided through (or the Company is entitled to reimbursement under) one or
more insurance contracts (including stop-loss insurance contracts) that
have at all times been validly in effect, with respect to which all
required premiums have been paid and with respect to which Company is not
subject to a retroactive premium charge.
4.16.(g) POST-RETIREMENT BENEFITS. Except as set forth on Schedule
4.16(g), no Employee Plan/Agreement provides benefits, including, without
limitation, death or medical benefits (whether or not insured) with respect
to current or former Company Employees beyond their retirement or other
termination of service other than (i) coverage mandated by applicable law,
(ii) death or retirement benefits under any Employee Plan/Agreement that is
an employee pension benefit plan, (iii) deferred compensation benefits
accrued as liabilities on the books of the Company (including the Recent
Balance Sheet), (iv) disability benefits under any Employee Plan/ Agreement
that is an employee welfare benefit plan and which are fully provided for
by insurance or (v) benefits in the nature of severance pay.
27
4.16.(h) NO TRIGGERING OF OBLIGATIONS. The consummation of the
transactions contemplated by this Agreement, in and of itself, will not (i)
entitle any current or former employee of Company to severance pay,
unemployment compensation or any other payment, except as expressly
provided in this Agreement, (ii) accelerate the time of payment or vesting,
or increase the amount of compensation due to any such employee or former
employee or (iii) result in any prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code for which an exemption is not
available.
4.16.(i) DELIVERY OF DOCUMENTS. There has been delivered to Buyer,
with respect to each Employee Plan/Agreement:
(i) a copy of the last two annual reports filed with the IRS,
if required under ERISA, with respect to each such Employee
Plan/Agreement;
(ii) a copy of the summary plan description, together with each
summary of material modifications if required under ERISA with respect
to such Employee Plan/Agreement, all material employee communications
relating to such Employee Plan/Agreement, and, unless the Employee
Plan/Agreement is embodied entirely in an insurance policy to which
Company is a party, a true and complete copy of such Employee
Plan/Agreement;
(iii) if the Employee Plan/Agreement is funded through a trust or
any third party funding vehicle (other than an insurance policy), a
copy of the trust or other funding agreement and the latest financial
statements, if any, with respect thereto; and
(iv) the most recent determination letter received from the IRS
with respect to each such Employee Plan/Agreement that is intended to
be a "qualified plan" under Section 401 of the Code.
With respect to each Employee Plan/ Agreement for which an annual report
has been filed with the IRS and delivered to Buyer pursuant to clause (i)
of this Section 4.16.(i), no material adverse change has occurred with
respect to the matters covered by the latest such annual report since the
date thereof.
4.16.(j) FUTURE COMMITMENTS. Company has no announced plan or
legally binding commitment to create any additional Employee
Plans/Agreements or to amend or modify any existing Employee
Plan/Agreement.
4.17. EMPLOYMENT COMPENSATION. Schedule 4.17 contains a true and correct
list of all employees to whom the Company is paying compensation, including
bonuses and incentives, for services rendered or otherwise; and in the case of
salaried employees such list identifies the
28
current annual rate of compensation for each employee and in the case of
hourly or commission employees identifies certain reasonable ranges of rates
and the number of employees falling within each such range.
4.18. TRADE RIGHTS. Schedule 4.18 lists all Trade Rights of the type
described in clauses (i), (ii), (iii) or (iv) of Section 1.1.(f) in which
Company now has any interest, specifying whether such Trade Rights are owned,
controlled, used or held (under license or otherwise) by Company, and also
indicating which of such Trade Rights are registered. All Trade Rights shown as
registered in Schedule 4.18 have been properly registered, all pending
registrations and applications have been properly made and filed and all
annuity, maintenance, renewal and other fees relating to registrations or
applications are current. In order to conduct the business of Company, as such
is currently being conducted or proposed to be conducted, Company does not
require any Trade Rights that it does not already have. To the knowledge of
Company and the Shareholder, Company is not infringing and has not infringed any
Trade Rights of another in the operation of the business of Company and to the
knowledge of Company and Shareholder, no other person is infringing the Trade
Rights of Company. Company has not granted any license or made any assignment
of any Trade Right listed on Schedule 4.18, and no other person has any right to
use any Trade Right owned or held by Company. Company does not pay any
royalties or other consideration for the right to use any Trade Rights of
others. There is no Litigation pending or, to the knowledge of Company and
Shareholder, threatened to challenge Company's right, title and interest with
respect to its continued use and right to preclude others from using any Trade
Rights of Company. To the knowledge of Company and the Shareholder, all Trade
Rights of Company are valid, enforceable and in good standing, and there are no
equitable defenses to enforcement based on any act or omission of Company.
4.19. MAJOR CUSTOMERS AND SUPPLIERS.
4.19.(a) MAJOR CUSTOMERS. Schedule 4.19.(a) contains a list of the
15 largest customers, including distributors, of Company for each of the
two most recent fiscal years and for the eight-month period ended February
28, 1998 (determined on the basis of the total dollar amount of net sales)
showing the total dollar amount of net sales to each such customer during
each such year. Neither Company nor the Shareholder has any knowledge or
information of any facts indicating, nor any other reason to believe, that
any of the customers listed on Schedule 4.19.(a) will not continue to be
customers of the business of Company after the Closing at substantially the
same level of purchases as heretofore (other than (i) Ocean Spray
Cranberries, Inc., for co-packing services, (ii) as a result of normal
changes in business demand, or (iii) customers who will not continue to be
customers principally for the reason that Northland will be the owner of
the Business).
4.19.(b) MAJOR SUPPLIERS.
(i) CRANBERRY SUPPLY CONTRACTS. Schedule 4.19(b)(i) contains
complete and correct copies of all Company's contractual arrangements
for the
29
purchase or raw, processed or frozen cranberries, cranberry
juice and cranberry juice concentrate.
(ii) OTHER SUPPLIERS. Schedule 4.19(b)(ii) contains a list of
the 15 largest suppliers to Company for each of the two most recent
fiscal years and for the eight-month period ended February 28, 1998
(determined on the basis of the total dollar amount of purchases)
showing the total dollar amount of purchases from each such supplier
during each such year. Schedule 4.19(b)(ii) also contains a true and
correct list of all contracts for the purchase of fruits, vegetables,
fruit juices and fruit juice concentrate (other than contracts for the
purchase of cranberry products described in Schedule 4.19(b)(i)), in
each case identifying in reasonable detail the term, approximate
quantities, price and payment terms. Neither Company nor the
Shareholder has any knowledge or information of any facts indicating,
nor any other reason to believe, that any of the suppliers listed on
Schedule 4.19.(b)(ii) will not continue to be suppliers to the
business of Company after the Closing and will not continue to supply
the business with substantially the same quantity and quality of goods
at competitive prices (other than suppliers who will not continue to
be suppliers principally for the reason that Northland will be the
owner of the Business).
4.19.(c) SALES REPRESENTATIVES. Schedule 4.19.(c) contains a list by
product line of all sales representatives, dealers, distributors and
franchisees of Company, together with representative copies of all sales
representative, dealer, distributor and franchise contracts and policy
statements, and a description of all substantial modifications or
exceptions.
4.20. PRODUCT WARRANTY AND PRODUCT LIABILITY. Schedule 4.20 contains a
true, correct and complete copy of Company's standard warranty or warranties for
sales of Products (as defined below) and, except as stated therein, there are no
warranties, commitments or obligations with respect to the return, repair or
replacement of Products. Schedule 4.20 sets forth the estimated aggregate
annual cost to Company of performing product return or warranty obligations for
customers for each of the three preceding fiscal years and the current fiscal
year to the date of the Recent Balance Sheet. Schedule 4.20 contains a
description of all product liability claims and similar Litigation relating to
Products manufactured or sold, or services rendered, which are presently pending
or which to Company's or the Shareholder's knowledge are threatened, or which
have been asserted or commenced against Company within the last three years, in
which a party thereto either requests injunctive relief or alleges damages in
excess of $10,000 (whether or not covered by insurance). To the knowledge of
Company and Shareholder, there are no defects in design, construction or
manufacture of Products which would adversely affect quality or create an
unusual risk of injury to persons or property. Except as set forth on Schedule
4.20, none of the Products has been the subject of any replacement or recall
30
campaign within the past five years and, to knowledge of Company and the
Shareholder, no facts or conditions exist which could reasonably be expected to
result in such a recall campaign. Schedule 4.20 identifies each Form 483 issued
by the U.S. Food and Drug Administration to Company during the last three fiscal
years and the current fiscal year and a description of the circumstances leading
to the issuance of each. To the knowledge of Company and the Shareholder, the
Products have been designed and manufactured so as to meet and comply with all
governmental standards and specifications currently in effect, and have received
all governmental approvals necessary to allow their sale and use. As used in
this Section 4.20, the term "Products" means any and all products currently, or
at any time within the past five years, produced, manufactured, distributed or
sold by Company, or by any predecessor of Company under any brand name or xxxx
under which products are or have been manufactured, distributed or sold by
Company.
4.21. AFFILIATES' RELATIONSHIPS TO COMPANY.
4.21.(a) CONTRACTS WITH AFFILIATES. All leases, contracts,
agreements or other arrangements between Company and any Affiliate are
described on Schedule 4.21.(a).
4.21.(b) NO ADVERSE INTERESTS. Except as set forth on Schedule
4.21.(b), no Affiliate has any direct or indirect interest in (i) any
entity which does business with Company or is competitive with Company's
business, or (ii) any property, asset or right which is used by Company in
the conduct of its business.
4.21.(c) OBLIGATIONS. All obligations of any Affiliate to Company,
and all obligations of Company to any Affiliate, are listed on Schedule
4.21.(c).
4.22. ASSETS NECESSARY TO BUSINESS. The Purchased Assets include all
property and assets (except for the Excluded Assets), tangible and intangible,
and all leases, licenses and other agreements, which are necessary to permit
Buyer to carry on, or currently used or held for use in, the business of Company
as presently conducted.
4.23. COMPUTER SOFTWARE AND DATABASE. Schedule 4.23 identifies and
describes the functions of all computer software and databases owned, licensed,
leased, internally developed or otherwise used in connection with the Business.
4.24. NO BROKERS OR FINDERS. Except as set forth in Schedule 4.24, neither
Company nor any of its directors, officers, employees, the Shareholder or agents
have retained, employed or used any broker or finder in connection with the
transactions provided for herein or the negotiation thereof.
4.25. DISCLOSURE. No representation or warranty by Company and/or the
Shareholder in this Agreement, nor any statement, certificate, schedule,
document or exhibit hereto furnished or to be furnished by or on behalf of
Company or the Shareholder pursuant to this Agreement or in Volumes I through XI
of the due diligence response binders delivered to Buyer, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact
31
necessary to make the statements contained therein not misleading. All
statements and information contained in any such certificate, instrument,
Disclosure Schedule or document delivered by or on behalf of Company and/or the
Shareholder shall be deemed representations and warranties by Company and the
Shareholder.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to Company and the
Shareholder, each of which is true and correct on the date hereof, shall remain
true and correct to and including the Closing Date, shall be unaffected by any
investigation heretofore or hereafter made by Company or any notice to Company,
and shall survive the Closing of the transactions provided for herein.
5.1. CORPORATE.
5.1.(a) ORGANIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Wisconsin.
5.1.(b) CORPORATE POWER. Buyer has all requisite corporate power to
enter into this Agreement and the other documents and instruments to be
executed and delivered by Buyer and to carry out the transactions
contemplated hereby and thereby.
5.2. AUTHORITY. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by the Board of Directors of Buyer. No other
corporate act or proceeding on the part of Buyer or its shareholders is
necessary to authorize this Agreement or the other documents and instruments to
be executed and delivered by Buyer pursuant hereto or the consummation of the
transactions contemplated hereby and thereby. This Agreement constitutes, and
when executed and delivered, the other documents and instruments to be executed
and delivered by Buyer pursuant hereto will constitute, valid and binding
agreements of Buyer, enforceable in accordance with their respective terms,
except as such may be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally, and by general equitable principles.
5.3. NORTHLAND STOCK. The shares of Northland Stock to be issued to the
Shareholder hereunder pursuant to Section 3.2(d) hereof have been duly
authorized for issuance by Buyer and, upon such issuance by Buyer, such shares
will be validly issued, fully paid and nonassessable (except for any statutory
liabilities for unpaid wage claims and other liabilities of employees under
Wisconsin Statutes Section 180.0622(2)(b)). Northland Stock has never been
assessed under Section 180.0622(2)(b) of the Wisconsin Statutes. The Northland
Stock is listed on the Nasdaq National Market under the symbol "CBRYA."
32
5.4. NO BROKERS OR FINDERS. Except as set forth on Schedule 5.4, neither
Buyer nor any of its directors, officers, employees or agents have retained,
employed or used any broker or finder in connection with the transactions
provided for herein or the negotiation thereof.
5.5. NO VIOLATION. Except as set forth on Schedule 5.5 attached hereto,
neither the execution and delivery of the Agreement, nor the consummation by
Buyer of the transactions contemplated hereby (a) will violate any statute or
law or any rule, regulation, order, writ, injunction or decree of any court or
governmental authority; (b) subject to obtaining any consents, approvals or
authorizations required under the HSR Act, will require any authorization,
consent, approval, exemption or other action by or notice to any court,
administrative or governmental agency, instrumentality, commission, authority,
board or body; or (c) will violate or conflict with, or constitute a default (or
an event which, with notice or lapse or time, or both, would constitute a
default) under, or will result in the termination of, or accelerate the
performance required by, or result in the creation of any Lien upon any of the
assets of Buyer or under any term or provision of (i) the articles of
incorporation or bylaws of Buyer or (ii) of any contract, commitment, agreement
or restriction of any kind or character to which Buyer is a party or by which
Buyer or any of its assets or properties may be bound or affected, other than
contracts, commitments, agreements and the like which, if violated or breached,
would not individually or in the aggregate have a Material Adverse Effect on
Buyer.
5.6. SEC FILING; FINANCIAL STATEMENTS. Buyer has made available to the
Shareholder complete copies of each report, schedule, registration statement and
definitive proxy statement filed by Buyer with the Securities and Exchange
Commission ("Commission") since January 1, 1996 (as such documents have since
the time of their filing been amended, the "Northland SEC Documents") which are
all the documents (other than preliminary material) that Buyer was required to
file with the Commission since such date. As of their respective dates, the
Northland SEC Documents complied in all material respects with the requirements
of the Securities Act and the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder applicable to such Northland SEC Documents
and none of the Northland SEC Documents at the time of filing contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Buyer included in the Northland SEC Documents complied as to form
in all material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the Commission)
and present fairly (subject, in the case of the unaudited statements, for
year-end adjustments of a normal recurring nature) the consolidated financial
position of Buyer and its consolidated subsidiary as at the dates thereof and
the consolidated results of operations and cash flows for the periods then
ended.
5.7. ENVIRONMENTAL AUDITS. Buyer has delivered to Company and
Shareholder a copy of all reports, studies and similar due diligence reviews
conducted by Buyer with respect to
33
environmental and occupational health and safety compliance pertaining to the
operations of Company and the real estate occupied by Company.
5.8. DISCLOSURE. No representation or warranty by Buyer in this
Agreement, nor any statement, certificate, schedule, document or exhibit hereto
furnished or to be furnished by or on behalf of Buyer pursuant to this Agreement
or in connection with transactions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statements contained therein not misleading. All
statements and information contained in any such certificate, schedule,
document, instrument or exhibit delivered by or on behalf of Buyer shall be
deemed representations and warranties by Buyer.
6. EMPLOYEES - EMPLOYEE BENEFITS
6.1. BUYER'S RESPONSIBILITIES; AFFECTED EMPLOYEES. Except with respect to
those employees identified in a written notice from Buyer to Company prior to
Closing and approved by Company, which approval shall not be unreasonably
withheld, Buyer agrees to offer employment, in similar positions, with
comparable compensation and benefits in the aggregate (subject to any agreement
with the Unions identified in Section 4.15(a) as to the modification or
termination of the provisions of the Union Contracts), to all employees of the
Business, including those employees on leave of absence or layoff, as of the
Closing Date, and Company shall use its Reasonable Best Efforts to have the
employees accept such offers. Employees of the Company who accept such offers
and who are employed by Buyer immediately after the Closing shall be referred to
herein as "Affected Employees." Nothing in this Section 6.1 shall be deemed to
require Buyer to employ any such person for any period of time after the Closing
Date or to continue after the Closing Date to maintain any specific benefit plan
except as required by the Union Contracts or under applicable law.
6.2. EMPLOYEE BENEFIT PLANS. Company shall transfer sponsorship to Buyer
and Buyer shall assume sponsorship of, and the assets of and any and all
obligations and liabilities arising under or in connection with the Assumed
Employee Plans/Agreements identified as such on Schedule 4.16(a). Company and
Buyer agree to take all actions as may be necessary or appropriate in order to
effectuate such transfer, including the execution of a Plan Assumption Agreement
in the form of Exhibit K attached hereto.
6.3. PAYROLL TAX. Company, with the cooperation of Buyer, agrees to make
a clean cut-off of payroll and payroll tax reporting with respect to the
Affected Employees paying over to the federal, state and city governments those
amounts respectively withheld or required to be withheld for periods ending on
or prior to the Effective Time. Company and Buyer agree to utilize the
alternate procedure set forth in Revenue Procedures 76-60 for purposes of
forwarding Forms W-2 to the Affected Employees. Under this procedure, Buyer
shall assume the Company's Form W-2 reporting obligations for the Affected
Employees. Buyer shall be responsible for all payroll and payroll tax
obligations after the Effective Time for Affected Employees.
34
6.4. TERMINATION BENEFITS. Buyer shall be solely responsible for, and
shall pay or cause to be paid, severance payments and other termination
benefits, if any, to Affected Employees who may become entitled to such benefits
by reason of any events occurring after Closing. If any action on the part of
Company prior to the Closing, or if the sale to Buyer of the business and assets
of Company pursuant to this Agreement or the transactions contemplated hereby,
or, provided that Buyer shall have complied with its responsibilities under
Section 6.1 above, if the failure by Buyer to hire as a permanent employee of
Buyer any employee of Company shall directly or indirectly result in any
Liability (i) for severance payments or termination benefits or (ii) by virtue
of any state, federal or local "plant-closing" or similar law, such Liability
shall be the sole responsibility of Company, and Company and the Shareholder
shall, jointly and severally, indemnify and hold harmless Buyer against such
Liability.
6.5. DELIVERY OF RECORDS. Company shall deliver to Buyer not less than ten
days prior to the Closing Date, with respect to each Assumed Employee
Plan/Agreement, information adequate to determine the liability thereunder,
whether or not contingent, to any Affected Employee or other employee or former
employee who is or was employed by Company and with respect to whom Buyer may
have any liability, and any beneficiary or dependent of any such Affected
Employee, employee or former employee, together with data, records and other
documentation adequate to determine the existence and amount of such liability.
Delivery of such data, records and other documentation shall be made in machine
readable form, if existing, and shall be made by Company or any other person at
the time providing or who has provided services with respect to such Employee
Plan/Agreement. Company or persons designated by Company prior to the Closing
Date will have reasonable access after the Closing Date to such items.
6.6. NO THIRD-PARTY RIGHTS. Nothing in this Agreement, express or implied,
is intended to confer upon any of Company's employees, former employees,
collective bargaining representatives, job applicants, any association or group
of such persons or any Affected Employees any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement, including, without
limitation, any rights of employment.
7. OTHER MATTERS
7.1. TITLE INSURANCE. At least five business days prior to Closing,
Company, at Buyer's expense, shall provide to Buyer title insurance commitments,
issued by a title insurance company or companies reasonably satisfactory to
Buyer, agreeing to issue to Buyer standard form owner's (or lessee's, as the
case may be) policies of title insurance with respect to all Owned Real
Property, together with a copy of each document to which reference is made in
such commitments. In the case of Owned Real Property, such policies shall be
standard ALTA Form 1990 owner's policies in the full amount of that portion of
the Purchase Price to be allocated respectively to each subject parcel of Owned
Real Property under Section 3.3 hereof, insuring good and marketable title
thereto (expressly including all easements and other appurtenances). All
policies shall insure title in full accordance with the representations and
warranties set forth
35
herein and shall be subject only to Permitted Real Property Liens, and such
other conditions and exceptions as shall be reasonably acceptable to Buyer,
and shall contain such endorsements as Buyer shall reasonably request to the
extent available under applicable insurance regulations in New Jersey
(including, but not limited to, an endorsement over rights of creditors, if
requested by Buyer or Buyer's lender).
7.2. SURVEYS. At least five business days prior to Closing, Company, at
Buyer's expense, shall provide to Buyer surveys of all Owned Real Property
prepared in accordance with ALTA/ASCM standards, each dated no more than 90 days
prior to the Closing and each detailing the legal description, the perimeter
boundaries, all improvements located thereon, all easements and encroachments
affecting each such parcel of Owned Real Property and such other matters as may
be reasonably requested by Buyer or the title insurance companies, each
containing a surveyor certificate reasonably acceptable to Buyer and the title
insurance companies, and each prepared by a registered land surveyor
satisfactory to Buyer.
7.3. SECURITIES LAW MATTERS:
7.3.(a) BUYER SEC DOCUMENTS. Buyer shall deliver to Company and
Shareholder (in accordance with the notice provisions of Section 15.8)
concurrently with transmission to its stockholders, one copy of each
financial statement, report, notice or proxy statement sent by Buyer to
stockholders generally and, promptly after filing, one copy of each regular
or periodic report and any registration statement or prospectus filed by
Buyer with any securities exchange or with the Commission.
7.3.(b) COMPLIANCE WITH COMMISSION REGULATIONS AND THE SECURITIES
ACT. Buyer shall take all such reasonable steps and actions that may be
required to maintain its status as a "reporting company" not in default of
the requirements of the Securities Act, the Exchange Act and regulations of
the Commission, as long as the Company or the Shareholder hold shares of
Northland Stock that have not been registered under the Securities Act.
7.3.(c) MAINTAIN LISTING. Buyer shall take all such reasonable
steps and actions that may be required to maintain the listing and posting
for trading of its Class A Common Stock on NASDAQ.
7.4. ESCROW AGREEMENT. At the Closing, Company, Fargo and Buyer shall
execute and deliver an Escrow Agreement (the "Escrow Agreement") in the form of
Exhibit A attached hereto.
7.5. EMPLOYMENT AGREEMENT. At the Closing, Shareholder, Fargo and Buyer
shall execute and deliver an Employment Agreement in the form of Exhibit B
hereto.
7.6. NONCOMPETITION. Subject to the Closing, and as an inducement to
Buyer to execute this Agreement and complete the transactions contemplated
hereby, and in order to preserve the
36
goodwill associated with the business of Company being acquired pursuant to
this Agreement, and in addition to and not in limitation of any covenants
contained in any agreement executed and delivered pursuant to Section 7.5
hereof, Company and the Shareholder hereby covenant and agree that for a
period of five years from the Closing Date, they will not, directly or
indirectly:
(i) engage in, continue in or carry on any business which
competes with the Business or is substantially similar thereto,
including owning or controlling any financial interest in any
corporation, partnership, firm or other form of business organization
which is so engaged;
(ii) consult with, advise or assist in any way, whether or not
for consideration, any corporation, partnership, firm or other
business organization which is now or becomes a competitor of Buyer in
any aspect with respect to the Business including, but not limited
to, advertising or otherwise endorsing the products of any such
competitor; soliciting customers or otherwise serving as an
intermediary for any such competitor; loaning money or rendering any
other form of financial assistance to or engaging in any form of
business transaction on other than an arm's length basis with any such
competitor;
(iii) hire, offer to hire, or solicit for employment any Affected
Employee or any person who, at any time during such five-year period,
has been an employee of Buyer engaged in the Business, without the
prior consent of Buyer, until such person has been separated from
employment by the Buyer for at least 180 days; or
(iv) engage in any practice the purpose of which is to evade the
provisions of this covenant not to compete.
provided, however, that the foregoing shall not prohibit the ownership of
securities of corporations which are listed on a national securities
exchange or traded in the national over-the-counter market in an amount
which shall not exceed 5% of the outstanding shares of any such
corporation. The parties agree that the geographic scope of this covenant
not to compete shall extend to all of the United States and the Dominion of
Canada, which is the geographic area in which Company has operated the
Business at some time during the two years preceding the date of this
Agreement. The parties agree that Buyer may sell, assign or otherwise
transfer this covenant not to compete, in whole or in part, to any person,
corporation, firm or entity that purchases all or substantially all of the
business or the Purchased Assets being acquired by Buyer hereunder. In the
event a court of competent jurisdiction determines that the provisions of
this covenant not to compete are excessively broad as to duration,
geographical scope or activity, it is expressly agreed that this covenant
not to compete shall be construed so that the remaining provisions shall
not be affected, but shall remain in full force and effect, and any such
over broad provisions shall be deemed, without further action on the part
of any
37
person, to be modified, amended and/or limited, but only to the
extent necessary to render the same valid and enforceable in such
jurisdiction.
7.7. CONFIDENTIAL INFORMATION. Neither Company nor the Shareholder shall
at any time subsequent to the Closing, except as explicitly requested by Buyer
or consistent with the performance by Shareholder of his responsibilities under
the Employment Agreement, use for any purpose, disclose to any person, or keep
or make copies of documents, tapes, discs, programs or other information storage
media ("records") containing, any confidential information concerning the
Business, the Purchased Assets, or the Assumed Liabilities, all such information
being deemed to be transferred to the Buyer hereunder. For purposes hereof,
"confidential information" shall mean and include, without limitation, all Trade
Rights in which Company has an interest, all customer and vendor lists and
related information, all information concerning Company's processes, products,
costs, prices, sales, marketing and distribution methods, properties and assets,
liabilities, finances, employees, all privileged communications and work
product, and any other information not previously disclosed to the public
directly by Company. The foregoing provisions shall not apply to any
information which is an "Excluded Asset" as defined in Section 1.2, or which
relates solely to one or more Excluded Assets. In connection with the
transactions contemplated by this Agreement, Buyer shall cooperate and assist
Company and the Shareholder in the development and implementation of appropriate
procedures to maintain the confidentiality, and avoid any disclosure, use or
transfer, of third party confidential information in breach of confidentiality
obligations of Company to third parties. If at any time after Closing Company
or the Shareholder should discover that it is in possession of any records
containing the confidential information of Buyer, then the party making such
discovery shall immediately turn such records over to Buyer, which shall upon
request make available to the surrendering party any information contained
therein which is not confidential information. Company and the Shareholder
severally agree that they will not assert a waiver or loss of confidential or
privileged status of the information based upon such possession or discovery.
Company hereby consents to Buyer's consultation with legal, accounting and other
professional advisors to Company concerning advice rendered to Company prior to
the Closing regarding the Business, the Purchased Assets or the Assumed
Liabilities, excluding, however, the negotiation and drafting of this Agreement
and the transactions entered into pursuant hereto.
7.8. GENERAL RELEASE. At the Closing, the Shareholder shall deliver a
general release to Buyer, in the form attached hereto as Exhibit C, releasing
Company and the directors, officers, agents and employees of Company from all
Liabilities to the Closing Date, except as may be described in written contracts
disclosed in the Disclosure Schedule and expressly described and excepted from
such releases.
7.9. HSR ACT FILINGS. To the extent such filings have not been completed
prior to the execution of this Agreement, each of Company and Buyer shall, in
cooperation with the other, file any reports or notifications that may be
required to be filed by it under the HSR Act, with the Federal Trade Commission
and the Antitrust Division of the Department of Justice, and shall furnish to
the other all such information in its possession as may be necessary for the
completion of the reports or notifications to be filed by the other. Such
filings with the Federal Trade
38
Commission and the Antitrust Division shall be made promptly after the
execution of this Agreement and the parties hereto mutually agree to request
early termination of the review thereof. Prior to making any communication,
written or oral, with the Federal Trade Commission, the Antitrust Division of
the federal Department of Justice or any other governmental agency or
authority or members of their respective staffs with respect to this
Agreement or the transactions contemplated hereby, the parties agree to
consult with the other.
7.10. INVENTORY PURCHASE AGREEMENT. At the Closing, Company and Buyer
shall execute and deliver an Inventory Purchase Agreement (the "Inventory
Purchase Agreement") in the form of Exhibit D attached hereto.
7.11. REGISTRATION RIGHTS AGREEMENT. At the Closing, the Shareholder and
Buyer shall execute and deliver a Registration Rights Agreement (the
"Registration Rights Agreement") in the form of Exhibit E attached hereto.
7.12. COOPERATION REGARDING FINANCIAL STATEMENTS. Company and Shareholder
acknowledge that Buyer will be required to incorporate Company's audited June
30, 1997 Financial Statements into a filing on Form S-3 with the Commission and
that Buyer intends to file such Form S-3 promptly following the execution of
this Agreement. Company and Shareholder agree to cooperate with Buyer, Buyer's
Accountant and BDO Xxxxxxx, LLP in connection with such filing and other SEC
filings and reports, including without limitation, by providing such management
letters, representations and certificates regarding the Company's Financial
Statements as may be requested or required. Company and Shareholder acknowledge
that Buyer has provided them with a reasonable opportunity to review the draft
of such Form S-3 dated April 30, 1998, and Buyer agrees to provide Company and
Shareholder with a reasonable opportunity to review any material modifications
or additions to such Form S-3 prior to its filing with the SEC.
7.13. USE OF COMPANY'S NAME. Following the Closing, neither Company nor
any Affiliate shall, without the prior written consent of Buyer, make any use of
the name "Minot Food Packers" or any other name confusingly similar thereto,
except as may be necessary for Company to pay its liabilities, prepare tax
returns and other reports, and to otherwise wind up and conclude its business.
7.14. SALES TAX MATTERS. Company, Shareholder and Buyer agree that Buyer
shall be entitled to provide notice of the transactions contemplated by this
Agreement to the New Jersey Division of Taxation (the "Division") in accordance
with the requirements of N.J.S.A. 54:32B-22. Company, Shareholder and Buyer
further agree that, should the Division notify Buyer that Buyer should withhold
from the Purchase Price any amount of money as an escrow against any possible
tax liability of Company or the Shareholder, Buyer shall be entitled to withhold
such sum from the proceeds to be paid to or for the benefit of Company at the
Closing, with the withheld sum to be held in a third party escrow until such
time as Company shall deliver to Buyer an original certificate from the Division
authorizing Buyer to release the escrowed sums to Company. Buyer shall be
entitled to deliver the escrowed sum to the Division instead of to
39
Company to the extent that the Division provides written direction to Buyer
to do so. Buyer shall notify the Division of the pending transactions
contemplated by this Agreement within four business days after the execution
of this Agreement.
7.15. UNEMPLOYMENT COMPENSATION. Company shall, upon the request of Buyer,
cooperate with Buyer in any efforts by Buyer to obtain the transfer of Company's
portion of the New Jersey unemployment compensation fund applicable to Affected
Employees, to the extent Buyer elects to transfer and assume such amounts. In
connection therewith, Company will execute such documents as Buyer may
reasonably request in order to effectuate such transfer.
7.16. ACCESS AND RECORDS RETENTION. Company and Buyer shall each permit
authorized representatives of the other, at all reasonable times after the
Closing, access to their offices, records and accounts which relate to Company
prior to the Closing for the purpose of obtaining any information necessary or
desirable for the preparation and filing of any tax returns or other reports to
any governmental agency for any period or for any other purpose reasonably
related to the rights or obligations of the parties under this Agreement.
Company and Buyer shall each retain such records as the other may reasonably
request, including those which shall be necessary to permit preparation and
filing of federal and state tax returns, for reasonable periods (not less than
those during which additional taxes may be assessed and collected) consistent
with their record retention policies.
7.17. CO-PACK AGREEMENT. Simultaneous with the execution of this
Agreement, Buyer and Company shall enter into an agreement that will provide for
the co-packing of certain quantities of Buyer's branded juice production for up
to a three-year term (the "Co-Pack Agreement").
7.18. ADJUSTMENT FOR TAX DIVIDENDS. Within 45 days following the Closing
Date, Company's Accountants shall certify to Buyer and Company the amount of
Company's taxable income for federal income tax purposes for the period
commencing July 1, 1997, and ending on the date prior to the Closing Date
(determined by a closing of Company's books as of such date and without regard
to the transactions contemplated by this Agreement ("Pre-Sale Taxable Income")).
Within 10 business days thereafter, either (a) Buyer shall pay to Company the
excess, if any, of (i) an amount equal the Company's Pre-Sale Taxable Income
multiplied by 39.6% over (ii) the aggregate amount of dividends distributed by
Company to the Shareholder in the current fiscal year as contemplated by
Sections 4.8(f) and 8.3(e) of this Agreement, or (b) the Company shall pay to
Buyer the excess, if any, of (i) the aggregate amount of dividends distributed
by Company to the Shareholder in the current fiscal year as contemplated by
Sections 4.8(f) and 8.3(e) of this Agreement over (ii) an amount equal to the
Company's Pre-Sale Taxable Income multiplied by 39.6%.
7.19. COOPERATION IN LITIGATION. Each party agrees to fully cooperate with
the other in the defense or prosection of any litigation or proceeding already
instituted or which may be instituted hereafter against or by such party
relating to or arising out of the conduct of the business of the Company prior
to the Closing Date (other than litigation arising out of the
40
transactions contemplated by this Agreement). The party requesting such
cooperation shall pay the out-of-pocket expenses (including reasonable legal
fees and disbursements) of the party providing such cooperation and, if
applicable, of its officers, directors, employees and agents reasonably
incurred in connection with providing such cooperation, but shall not be
responsible to reimburse the party providing such cooperation for the
salaries or costs of fringe benefits or other similar expenses paid by the
party providing such cooperation to its officers, directors, employees and
agents while assisting in the defense or prosecution of any such litigation
or proceeding. Further, Buyer and Fargo agree to fully cooperate in the
defense or prosecution of any such litigation described in this Section 7.19
by allowing reasonable access to the records of Fargo acquired from Company,
reasonable use of the copy machines of Fargo for copying documents related to
such litigation, and reasonable access to and use of the time of its
employees as witnesses at trial, court or any judicial, administrative or
other proceeding, at the expense of the Shareholder to be billed by Fargo and
paid by the Shareholder provided such expenses are reasonable.
7.20. FINANCING. Buyer will use all commercially reasonable efforts to
obtain the financing necessary to enable Buyer to pay the Purchase Price at the
Closing as required by Section 3 as promptly as possible, as described below:
(i) Buyer will file a Form S-3 registration statement with the
SEC not later than one business day after the date hereof and use all
commercially reasonable efforts as promptly as possible to register
and publicly sell that number of shares of Northland Stock necessary
to provide net proceeds to Buyer not less than the cash portion of the
Purchase Price to be paid by Buyer (or deposited with the Escrow
Agent) at the Closing pursuant to Section 3.2; provided, however, that
Buyer shall not be required to sell such shares at an offer price of
less than $10.00 per share; or
(ii) If such public offering cannot be accomplished, Buyer will
use all commercially reasonable efforts to provide the financing
necessary to consummate the Closing by a private placement of
Northland Stock, a debt financing or a combination of such
transactions as promptly as possible. Buyer acknowledges that time is
of the essence to complete the financing and consummate the Closing.
7.21. OTHER ACTION. Company, the Shareholder and Buyer shall use their
respective Reasonable Best Efforts to cause the fulfillment at the earliest
practicable date of all of the conditions to the parties' obligations to
consummate the transactions contemplated in this Agreement.
8. FURTHER COVENANTS OF COMPANY AND THE SHAREHOLDER
Company and the Shareholder covenant and agree as follows:
41
8.1. ACCESS TO INFORMATION AND RECORDS. During the period prior to the
Closing:
8.1.(a) Company shall, and shall cause its officers, employees,
agents, independent accountants and advisors to, furnish to Buyer, its
officers, employees, agents, independent accountants and advisors, at
reasonable times and places, all information in their possession concerning
Company as may be requested, and give such persons access to all of the
properties, books, records, contracts and other documents of or pertaining
to Company that Company or its officers, employees, agents, independent
accountants or advisors shall have in their custody, except documents
pertaining to the representation of Company and Shareholder in connection
with the transactions contemplated by this Agreement.
8.1.(b) With the prior consent of Company in each instance (which
consent shall not be unreasonably withheld), Buyer and its officers,
employees, agents, independent accountants and advisors, shall have access
to vendors, customers, and others having business dealings with Company for
the purpose of performing Buyer's due diligence investigation. Company
shall have the right to have a representative of Company participate in any
communication or meeting between Buyer (or its officers, employees, agents,
independent accountants and advisors) and vendors, customers and others
having business dealings with the Company.
8.2. BANK ACCOUNTS. Not less than ten days prior to the Closing, Company
shall provide to Buyer a list of each bank in which Company has an account or
safe deposit box, the name and number of each such account or box and the names
of all persons authorized to draw thereon or who have access thereto, with the
amounts they are authorized to draw.
8.3. CONDUCT OF BUSINESS PENDING THE CLOSING. From the date hereof until
the Closing, except as otherwise approved in writing by the Buyer:
8.3.(a) NO CHANGES. Company will carry on its business diligently
and in the same manner as heretofore and will not make or institute any
material changes in its methods of purchase, sale, management, accounting
or operation.
8.3.(b) MAINTAIN ORGANIZATION. Company will take such action as may
be reasonably necessary to maintain, preserve, renew and keep in favor and
effect the existence, rights and franchises of Company and will use its
Reasonable Best Efforts to preserve the business organization of Company
intact, to keep available to Buyer the present officers and employees, and
to preserve for Buyer its present relationships with suppliers and
customers and others having business relationships with Company.
8.3.(c) NO BREACH. Company and the Shareholder will not do or omit
any act, or permit any omission or act by any Affiliate, which may cause a
material breach of any material contract, commitment or obligation, or any
breach of any representation, warranty, covenant or agreement made by
Company and/or the
42
Shareholder herein, or which would have required disclosure on Schedule
4.8 had it occurred after the date of the Recent Balance Sheet and prior
to the date of this Agreement.
8.3.(d) NO MATERIAL CONTRACTS. No contract or commitment will be
entered into, and no purchase of raw materials or supplies and no sale of
goods or services (real, personal, or mixed, tangible or intangible) will
be made, by or on behalf of Company, except contracts, commitments and
non-material modifications thereof, purchases or sales which are in the
ordinary course of business and consistent with past practice, are not
material to the Company (individually or in the aggregate) and would not
have been required to be disclosed on Schedule 1.1(b) or the Schedules to
Section 4.14 in the Disclosure Schedule had they been in existence on the
date of this Agreement.
8.3.(e) NO CORPORATE CHANGES. Company shall not amend its
Certificate of Incorporation or By-laws or make any changes in authorized
or issued capital stock. Company shall not declare, set aside or pay any
dividend or any other distribution in respect of the capital stock of
Company; redeem, purchase or otherwise acquire any stock of Company or any
security relating thereto; or make any other payment to the Shareholder in
his capacity as a shareholder; provided, however that Company shall be
entitled to declare and pay one or more dividend distributions to the
Shareholder on or before the Closing Date of an amount equal to Company's
projected Pre-Sale Taxable Income multiplied by 39.6%, less the sum of all
prior distributions to the Shareholder since July 1, 1997 with respect to
Company's projected Pre-Sale Taxable Income. Company shall furnish Buyer
with a schedule setting forth the determination of the amount of such
distribution at least five days prior to the declaration thereof.
8.3.(f) MAINTENANCE OF INSURANCE. Company shall maintain all of the
insurance in effect as of the date hereof.
8.3.(g) MAINTENANCE OF PROPERTY. Company shall use, operate,
maintain and repair all property of Company in a normal business manner.
8.3.(h) INTERIM FINANCIALS. Company will provide Buyer with interim
monthly financial statements and other management reports promptly as and
when they are available.
8.3.(i) NO NEGOTIATIONS. Neither Company nor the Shareholder will
directly or indirectly (through a representative or otherwise) solicit or
furnish any information to any prospective buyer, commence, or conduct
presently ongoing, negotiations with any other party or enter into any
agreement with any other party concerning the sale of Company, Company's
assets or business or any material part thereof or any equity securities of
Company (an "Acquisition Proposal"), and Company
43
and the Shareholder shall immediately advise Buyer of the receipt of any
Acquisition Proposal.
8.4. CHANGE OF CORPORATE NAME. Concurrently with the Closing, Company
shall change its corporate name to a new name bearing no resemblance to its
present name so as to permit the use of its present name by Buyer and Fargo.
8.5. CONSENTS. Company and the Shareholder will use their Reasonable Best
Efforts prior to Closing to obtain all consents necessary for the consummation
of the transactions contemplated hereby.
8.6. UNION CONTRACT NEGOTIATIONS. Company and Shareholder will use their
Reasonable Best Efforts to obtain an extension or continuance from the UFCW and
Teamsters Unions of the Union Contracts expiring May 14, 1998 upon terms and
conditions not materially less favorable to the Company in the aggregate than
the current Union Contracts. In the event that negotiations shall commence with
respect to the Union Contracts, Company and Shareholder agree to consult on a
regular and continuous basis with Buyer during such negotiations and to not
agree to any increase in wages or benefits, including retirement benefits,
without the prior written consent of Buyer.
8.7. ESTOPPEL CERTIFICATES. Company and Shareholder shall use their
Reasonable Best Efforts to obtain and deliver to Buyer on or prior to the
Closing Date an estoppel certificate or status letter from the landlord under
each lease of real property, which estoppel certificate or status letter shall
certify (i) the lease is valid and in full force and effect; (ii) the amounts
payable by Company under the lease and the date to which the same have been
paid; (iii) whether there are, to the knowledge of said landlord, any defaults
thereunder, and, if so, specifying the nature thereof; and (iv) that the
transactions contemplated by this Agreement will not constitute default under
the lease and that the landlord consents to the assignment of the lease to
Buyer.
8.8. EMPLOYEE COVENANT AGREEMENTS To the extent such contracts are not
terminated or otherwise amended prior to Closing, Company agrees to consent in
writing to the employment by Buyer of each of the employees covered by the
employee non-competition agreements described in Schedule 1.2(e) hereof and to
waive the provisions therein barring employment by Buyer following a termination
of their employment with Company.
8.9. DISCLOSURE. Company and the Shareholder shall have a continuing
obligation to promptly notify Buyer in writing with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Disclosure Schedule, but no such disclosure shall cure any breach of any
representation or warranty which is inaccurate.
44
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of each of the
following conditions:
9.1. REPRESENTATIONS AND WARRANTIES TRUE ON THE CLOSING DATE. Each of the
representations and warranties made by Company and the Shareholder in this
Agreement, and the statements contained in the Disclosure Schedule or in any
instrument, list, certificate or writing delivered by Company pursuant to this
Agreement, shall be true and correct in all material respects when made and
shall be true and correct in all material respects at and as of the Closing Date
as though such representations and warranties were made or given on and as of
the Closing Date, except for any changes permitted by the terms of this
Agreement or consented to in writing by Buyer; provided, however, that this
Section 9.1 shall not be a condition to Closing unless the failure to satisfy
this condition would have a Material Adverse Effect on Buyer.
9.2. COMPLIANCE WITH AGREEMENT. Company and the Shareholder shall have in
all material respects performed and complied with all of their agreements and
obligations under this Agreement which are to be performed or complied with by
them prior to or on the Closing Date, including the delivery of the closing
documents specified in Section 12.1.
9.3. ABSENCE OF LITIGATION. No Litigation shall have been commenced or
threatened by a party other than Buyer or an affiliate of Buyer, and no
investigation by any Government Entity shall have been commenced, against Buyer,
Company or any of the affiliates, officers or directors of any of them, with
respect to the transactions contemplated hereby, provided that the obligations
of Buyer shall not be affected unless, upon the written advice of Buyer's
counsel, based on a reasonable assessment of the consequence of such Litigation,
it would be inadvisable for Buyer to proceed with the transactions contemplated
by this Agreement; provided, however, that this Section 9.3 shall not be a
condition to Closing unless the failure to satisfy this condition would have a
Material Adverse Effect on Buyer.
9.4. ACQUISITION OF BRIDGETON FREEZER. Simultaneous with the Closing,
Company shall have assigned to Buyer the Bridgeton Freezer Purchase Contract
providing for the purchase of all right, title and interest in the Bridgeton
Freezer, free and clear of all liens and encumbrances, except for Permitted Real
Property Liens, and Company shall have performed all its obligations and
satisfied all conditions to the obligations of BFC under such contract other
than the payment of the purchase price due at Closing under the contract. Upon
payment by Buyer of the Bridgeton Freezer Purchase Price at the Closing, the
Bridgeton Freezer shall be deemed part of the Purchased Assets and Owned Real
Property for all purposes under this Agreement, including, without limitation,
Sections 1.1(a), 4.12, 7.1 and 7.2.
9.5. TITLE INSURANCE. Buyer shall have obtained good and valid title
insurance policies or, in final form, irrevocable title insurance binders, dated
as of the Effective Time, conforming to the specifications set forth in Section
7.1 hereof.
45
9.6. XXXX-XXXXX-XXXXXX WAITING PERIOD. All applicable waiting periods
related to the HSR Act shall have expired.
9.7. SECTION 1445 AFFIDAVIT. Company shall have delivered to Buyer an
affidavit, in form satisfactory to Buyer, to the effect that Company is not a
"foreign person," "foreign corporation," "foreign partnership," "foreign trust,"
or "foreign estate" under Section 1445 of the Code, and containing all such
other information as is required to comply with the requirements of such
Section.
9.8. ISRA COMPLIANCE. Company and Shareholder shall have received from the
Industrial Site Evaluation element or its successor ("Element") of the New
Jersey Department of Environmental Protection and Energy or its successor
("NJDEPE"), and delivered to Buyer, on or before the Closing Date, either: (i) a
non-applicability letter (or an opinion of Xxxxxx, Xxxxx & Bockius LLP to the
same effect, based on SIC Codes which Company advises are applicable to
Company); (ii) a DE MINIMIS quantity exemption; or (iii) an unconditional
approval of Company's negative declaration; or cleanup plan approval or an
executed remediation agreement for which Company shall promptly apply pursuant
to ISRA.
9.9. INVESTOR REPRESENTATION LETTER. At or prior to Closing, the
Shareholder shall deliver to Buyer an Investor Representation Letter (the
"Investor Representation Letter") in substantially the form of Exhibit F
attached hereto.
9.10. TAX DIVISION NOTIFICATION. Buyer shall notify the Division of the
pending transactions contemplated by this Agreement within four business days
after the execution of this Agreement and at least 10 days shall have elapsed
after the date on which Buyer notifies the Division of the pending transactions
contemplated by this Agreement.
9.11. FINANCING. Buyer shall have obtained the financing for the cash
portion of the Purchase Price as described in Section 7.20 hereof.
10. CONDITIONS PRECEDENT TO COMPANY'S AND THE SHAREHOLDER'S OBLIGATIONS
Each and every obligation of Company and the Shareholder to be performed on
the Closing Date shall be subject to the satisfaction prior to or at the Closing
of the following conditions:
10.1. REPRESENTATIONS AND WARRANTIES TRUE ON THE CLOSING DATE. Each of the
representations and warranties made by Buyer in this Agreement or in any
instrument, list, certificate or writing delivered by Buyer pursuant to this
Agreement, shall be true and correct in all material respects when made and
shall be true and correct in all material respects at and as of the Closing Date
as though such representations and warranties were made or given on and as of
the Closing Date, except for any changes permitted by the terms of this
Agreement or
46
consented to in writing by Company; provided, however, that this Section 10.1
shall not be a condition to Closing unless the failure to satisfy this
condition would have a Material Adverse Effect on Buyer.
10.2. COMPLIANCE WITH AGREEMENT. Buyer shall have in all material respects
performed and complied with all of Buyer's agreements and obligations under this
Agreement which are to be performed or complied with by Buyer prior to or on the
Closing Date, including the delivery of the closing documents specified in
Section 12.2.
10.3. ABSENCE OF LITIGATION. No Litigation shall have been commenced or
threatened, and no investigation by any Government Entity shall have been
commenced, against Buyer, Company or any of the affiliates, officers or
directors of any of them, with respect to the transactions contemplated hereby;
provided that the obligations of Company shall not be affected unless there is a
reasonable likelihood that as a result of such action, suit, proceeding or
investigation Company will be unable to retain substantially all the
consideration to which it is entitled under this Agreement.
10.4. XXXX-XXXXX-XXXXXX WAITING PERIOD. All applicable waiting periods
related to the HSR Act shall have expired.
10.5. ACQUISITION OF BRIDGETON FREEZER. Simultaneous with the Closing and
subject to compliance by Company with Section 9.4 hereof, Buyer shall (i) agree
to assume the Bridgeton Freezer Purchase Contract, (ii) agree to purchase the
Bridgeton Freezer pursuant to such contract, (iii) agree to pay the Bridgeton
Freezer Purchase Price to BFC at the Closing and (iv) at the request of Company,
agree to assume the Ocean Spray Freezer Storage Contract identified on Schedule
2.1(b)(i).
11. INDEMNIFICATION
11.1. BY COMPANY AND THE SHAREHOLDER. Subject to the terms and conditions
of this Article 11, Company and the Shareholder, jointly and severally, hereby
agree to indemnify, defend and hold harmless Buyer, and its directors, officers,
employees and controlled and controlling persons (hereinafter "Buyer's
Affiliates"), from and against all Claims asserted against, resulting to,
imposed upon, or incurred by Buyer, Buyer's Affiliates or the business and
assets transferred to Buyer pursuant to this Agreement, directly or indirectly,
by reason of, arising out of or resulting from
(a) the inaccuracy or breach of any representation or warranty of
Company or the Shareholder contained in or made pursuant to this Agreement
(regardless of whether such breach is deemed "material");
(b) the breach of any covenant of Company or the Shareholder
contained in this Agreement (regardless of whether such breach is deemed
"material");
47
(c) any Claim brought by or on behalf of any broker or finder
retained, employed or used by Company or any of its directors, officers,
employees, the Shareholder or agents in connection with the transactions
provided for herein or the negotiation thereof, whether or not disclosed
herein; or
(d) any Claim of or against Company, the Purchased Assets or the
business of Company not specifically assumed by Buyer pursuant hereto.
As used in this Article 11, the term "Claim" shall include (i) all Liabilities;
(ii) all losses, damages, judgments, awards, penalties and settlements; (iii)
all demands, claims, suits, actions, causes of action, proceedings and
assessments, whether or not ultimately determined to be valid; and (iv) all
costs and expenses (including, without limitation, interest (including
prejudgment interest in any litigated or arbitrated matter), court costs and
fees and expenses of attorneys and expert witnesses) of investigating, defending
or asserting any of the foregoing or of enforcing this Agreement.
11.2. BY BUYER. Subject to the terms and conditions of this Article 11,
Buyer hereby agrees to indemnify, defend and hold harmless Company, its
directors, officers, employees and controlling persons, and the Shareholder from
and against all Claims asserted against, resulting to, imposed upon or incurred
by any such person, directly or indirectly, by reason of or resulting from (a)
the inaccuracy or breach of any representation or warranty of Buyer contained in
or made pursuant to this Agreement (regardless of whether such breach is deemed
"material"); (b) the breach of any covenant of Buyer contained in this Agreement
(regardless of whether such breach is deemed "material"); (c) all Claims of or
against Company specifically assumed by Buyer pursuant hereto; or (d) conduct of
the Business by Buyer after the Closing.
11.3. INDEMNIFICATION OF THIRD-PARTY CLAIMS. The following provisions
shall apply to any Claim subject to indemnification which is (i) a suit, action
or arbitration proceeding filed or instituted by any third party, or (ii) any
other form of proceeding or assessment instituted by any Government Entity:
11.3.(a) NOTICE AND DEFENSE. The party or parties to be indemnified
(whether one or more, the "Indemnified Party") will give the party from
whom indemnification is sought (the "Indemnifying Party") prompt written
notice of any such Claim, and the Indemnifying Party will undertake the
defense thereof by representatives chosen by it. The assumption of defense
shall constitute an admission by the Indemnifying Party of its
indemnification obligation hereunder with respect to such Claim, and its
undertaking to pay directly all costs, expenses, damages, judgments,
awards, penalties and assessments incurred in connection therewith.
Failure to give such notice shall not affect the Indemnifying Party's duty
or obligations under this Article 11, except to the extent the Indemnifying
Party is prejudiced thereby. So long as the Indemnifying Party is
defending any such Claim actively and in good faith, the Indemnified Party
shall not settle such Claim. The Indemnified Party shall make available to
the Indemnifying Party or its representatives all records and other
materials
48
required by them and in the possession or under the control of the
Indemnified Party, for the use of the Indemnifying Party and its
representatives in defending any such Claim, and shall in other respects
give reasonable cooperation in such defense.
11.3.(b) FAILURE TO DEFEND. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to defend such Claim
actively and in good faith, the Indemnified Party will (upon further
notice) have the right to undertake the defense, compromise or settlement
of such Claim or consent to the entry of a judgment with respect to such
Claim, on behalf of and for the account and risk of the Indemnifying Party,
and the Indemnifying Party shall thereafter have no right to challenge the
Indemnified Party's defense, compromise, settlement or consent to judgment.
11.3.(c) INDEMNIFIED PARTY'S RIGHTS. Anything in this Article 11 to
the contrary notwithstanding, (i) if there is a reasonable probability that
a Claim may materially and adversely affect the Indemnified Party other
than as a result of money damages or other money payments, the Indemnified
Party shall have the right to defend, compromise or settle such Claim, and
(ii) the Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any Claim or consent to the entry
of any judgment which does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party of a
release from all Liability in respect of such Claim.
11.4. PAYMENT.
11.4.(a) GENERAL. Except as provided in Section 11.4(b), the
Indemnifying Party shall promptly pay the Indemnified Party any amount due
under this Article 11, which payment may be accomplished in whole or in
part, at the option of the Indemnified Party, by the Indemnified Party
setting off any amount owed to the Indemnifying Party by the Indemnified
Party. To the extent set-off is made by an Indemnified Party in
satisfaction or partial satisfaction of an indemnity obligation under this
Article 11 that is disputed by the Indemnifying Party, upon a subsequent
determination by final judgment not subject to appeal that all or a portion
of such indemnity obligation was not owed to the Indemnified Party, the
Indemnified Party shall pay the Indemnifying Party the amount which was set
off and not owed together with interest from the date of set-off until the
date of such payment at an annual rate equal to the prime lending rate then
being published by money center banks. Except as provided in Section
11.4(b), upon judgment, determination, settlement or compromise of any
third party Claim subject to indemnification hereunder, the Indemnifying
Party shall pay promptly on behalf of the Indemnified Party, and/or to the
Indemnified Party in reimbursement of any amount theretofore required to be
paid by it, the amount so determined by judgment, determination, settlement
or compromise and all other Claims of the Indemnified Party with respect
thereto, unless in the case of a judgment an appeal is made from the
judgment. If the Indemnifying Party desires to appeal from an adverse
49
judgment, then the Indemnifying Party, if required by law, shall post and
pay the cost of the security or bond to stay execution of the judgment
pending appeal. Upon the payment in full by the Indemnifying Party of such
amounts, the Indemnifying Party shall succeed to the rights of such
Indemnified Party, to the extent not waived in settlement, against the
third party who made such third party Claim.
11.4.(b) PAYMENT THROUGH ESCROW. Notwithstanding the provisions of
Section 11.4(a), Company and the Shareholder shall have indemnification
liabilities under this Article 11 only to the extent of the Escrow Fund (as
defined in the Escrow Agreement) and the sole recourse of Buyer shall be as
a claim, in whole or in part, against the Escrow Fund (exclusive of any
extension thereof past its regular term which occurs solely as a result of
a Claim being made thereunder, other than with respect to such Claim),
provided, however, that following the termination of the Escrow Fund,
Company and Shareholder shall continue to have indemnification liabilities
under this Article 11 for Claims for which the time period described in
11.6 has not expired, but only to the extent of the amount of the Escrow
Fund distributed to Company and/or Shareholder upon the termination
thereof. If Company and/or the Shareholder is determined to owe a Claim
amount pursuant to the procedures set forth in Section 11.4(a), then the
amount due Buyer hereunder shall be satisfied or partially satisfied by the
delivery to the Buyer pursuant to the Escrow Agreement of Northland Stock
or of cash from the Escrow Fund, as determined pursuant to the Escrow
Agreement, in the amount of the Claim to be so satisfied (or, if the amount
of the Escrow Fund is less than the Claim amount, by delivery of the entire
Escrow Fund), and the Claim shall be deemed paid and satisfied upon receipt
by the Buyer of the proper amount. The limitation set forth in this
Section 11.4(b) shall not be applicable with respect to the Excluded
Liabilities, fraud or any intentional, bad faith misrepresentation of
Company or the Shareholder.
11.4.(c) VALUATION OF NORTHLAND STOCK. The per share value of Escrow
Stock for this purpose shall be equal to the average closing price (last
sale price, regular way) of Northland Stock on the Nasdaq exchange (or
other principal exchange or market on which Northland Stock is then listed
or traded) for the seven consecutive trading days immediately preceding a
date determined as follows: (i) in the event Company or Shareholder is
electing to utilize Northland Stock pursuant to Article 2 of the Escrow
Agreement to satisfy a Claim, the date of Company's or the Shareholder's
written notice to the Escrow Agent of such election, (ii) in the event
Company or the Shareholder has failed to elect either to utilize cash or
Northland Stock to satisfy a Claim and Buyer has elected to have Northland
Stock to satisfy the Claim pursuant to Article 2 of the Escrow Agreement,
the date of Buyer's written notice to the Escrow Agent of such election, or
(iii) in the event of the disposition of the Escrow Fund pursuant to
Article 4 of the Escrow Agreement and the retention of a portion of the
Escrow Fund to satisfy pending Claims, November 30, 1999.
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11.5. INDEMNIFICATION FOR ENVIRONMENTAL MATTERS. Without limiting the
generality of the foregoing, Company and the Shareholder, jointly and severally
(hereinafter collectively referred to in this Section 11.5 jointly and severally
as "Sellers"), agree to indemnify, reimburse, hold harmless and defend Buyer
for, from, and against all Claims asserted against, imposed on, or incurred by
Buyer, directly or indirectly, in connection with any Identified Releases to the
extent provided in the Environmental Indemnity Agreement to be entered into
pursuant to Section 2.2(f).
11.6. LIMITATIONS ON INDEMNIFICATION. Except for fraud or any intentional,
bad faith misrepresentation, as to which claims may be brought without
limitation as to time or amount:
11.6.(a) TIME LIMITATION. No claim or action shall be brought under
this Article 11 for breach of a representation or warranty after November
30, 1999. Regardless of the foregoing, however, or any other provision of
this Agreement:
(i) There shall be no time limitation on claims or actions
brought for breach of any representation or warranty made in or
pursuant to Sections 4.1, 4.2 and the first sentence of 4.12(a), and
Company and the Shareholder hereby waive all applicable statutory
limitation periods with respect thereto.
(ii) Any claim or action brought for breach of any
representation or warranty made in or pursuant to Section 4.5 may be
brought at any time until the underlying tax obligation is barred by
the applicable period of limitation under federal and state laws
relating thereto (as such period may be extended by waiver).
(iii) Any claim made by a party hereunder by a demand for
arbitration in accordance with Article 14 hereof for breach of a
representation or warranty prior to the termination of the survival
period for such claim shall be preserved despite the subsequent
termination of such survival period.
(iv) If any act, omission, disclosure or failure to disclosure
shall form the basis for a claim for breach of more than one
representation or warranty, and such claims have different periods of
survival hereunder, the termination of the survival period of one
claim shall not affect a party's right to make a claim based on the
breach of representation or warranty still surviving.
(v) There shall be no time limitation on Claims brought pursuant
to Section 11.5 and the Environmental Indemnity Agreement and Company
and the Shareholder waive all applicable statutory limitation periods
with respect thereto.
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11.6.(b) AMOUNT LIMITATION. Except with respect to claims for
breaches of representations or warranties contained in Sections 4.24 or
5.4, an Indemnified Party shall not be entitled to indemnification under
this Article 11 for breach of a representation or warranty unless the
aggregate of the Indemnifying Party's indemnification obligations to the
Indemnified Party pursuant to this Article 11 (but for this Section
11.6.(b)) exceeds $400,000; and in such event, the Indemnifying Party shall
be liable for indemnification only to the extent of the excess.
11.6.(c) INSURANCE OFFSET. The obligation of an Indemnifying Party
to indemnify any Claim under this Article 11 shall be reduced by any
amounts actually and irrevocably recovered by the Indemnified Party with
respect to such Claim or the underlying facts under insurance policies, (i)
net of any increase that will occur, or is reasonably likely to occur, in
insurance premiums payable by the Indemnified Party, whether by
retrospective premium adjustments or any other premium increase under the
policy or policies under which the claim is made or any other policy, where
the increase results directly from filing the insurance claim and (ii)
less, dollar for dollar, the amount by which the insurance claim when filed
or at any time during the applicable policy period, either singly or in the
aggregate with all other claims made under the applicable policy or
policies, exceeds the policy coverage limit; provided, however, that this
subsection shall apply only if this provision does not constitute an
improper waiver of the insurer's rights of subrogation against the
Indemnifying Party. Nothing contained in this Section 11.6.(c) shall be
deemed to create an obligation of any party hereto to maintain any form or
level of insurance after the Closing, to name any other party as an
additional insured or to obtain approval for any waiver of rights of
subrogation, except as otherwise expressly provided in this Agreement.
11.7. NO WAIVER. The closing of the transactions contemplated by this
Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has knowledge of the breach, violation or failure of condition
constituting the basis of the Claim at or before the Closing, and regardless of
whether such breach, violation or failure is deemed to be "material".
12. CLOSING
The closing of this transaction ("xxx Xxxxxxx") shall take place at the
offices of Xxxxxx, Xxxxx & Bockius LLP at 9:00 A.M. on a date no later than ten
days following the date on which all of the conditions to the parties'
obligations to close contained in Articles 9 and 10 hereof have been satisfied
(or, if the last such condition is satisfied on or after June 15, 1998, within
five business days thereafter) or at such other time and place as the parties
hereto shall agree upon. Such date is referred to in this Agreement as the
"Closing Date".
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12.1. DOCUMENTS TO BE DELIVERED BY COMPANY AND THE SHAREHOLDER. At the
Closing, Company and the Shareholder shall deliver to Buyer and Fargo the
following documents, in each case duly executed or otherwise in proper form:
12.1.(a) DEEDS, BILLS OF SALE. Bargain and Sale deeds (with
covenants against grantor acts) to real estate and bills of sale and such
other instruments of assignment, transfer, conveyance and endorsement as
will be sufficient in the opinion of Buyer and its counsel to transfer,
assign, convey and deliver to Fargo the Purchased Assets as contemplated
hereby.
12.1.(b) COMPLIANCE CERTIFICATE. A certificate signed by the chief
executive officer of Company that each of the representations and
warranties made by Company and the Shareholder in this Agreement is true
and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any changes permitted by
the terms of this Agreement or consented to in writing by Buyer), and that
Company and the Shareholder have performed and complied with all of
Company's and the Shareholder's obligations under this Agreement which are
to be performed or complied with on or prior to the Closing Date.
12.1.(c) OPINION OF COUNSEL. A written opinion of Xxxxxx, Xxxxx &
Bockius LLP, counsel to Company and the Shareholder, dated as of the
Closing Date, addressed to Buyer and Fargo substantially in the form of
Exhibit G hereto, and a reliance letter from such counsel authorizing
Buyer's financing sources to rely on such opinion.
12.1.(d) EMPLOYMENT AGREEMENT. The Employment Agreement referred to
in Section 7.5, duly executed by the Shareholder.
12.1.(e) INVENTORY PURCHASE CONTRACT. The Inventory Purchase
Contract referred to in Section 7.10, duly executed by Company.
12.1.(f) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement referred to in Section 7.11, duly executed by the Shareholder.
12.1.(g) MORTGAGE AND SECURITY RELEASES. Releases of mortgages,
liens and/or financing statements to the extent necessary to terminate any
liens against, or security interests in, any of the Purchased Assets.
12.1.(h) CERTIFIED RESOLUTIONS. A certified copy of the resolutions
of the Board of Directors and the Shareholder of Company authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
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12.1.(i) ESCROW AGREEMENT; STOCK POWERS. The Escrow Agreement duly
executed by Company Shareholder and the Escrow Agent in the form of Exhibit
A hereto and stock powers executed in blank by Company for the certificate
or certificates for the shares of Northland Stock to be delivered to Escrow
Agent pursuant to Section 3.2(b) hereof.
12.1.(j) CERTIFICATE OF INCORPORATION; BY-LAWS. A copy of the
By-laws of Company certified by the secretary of Company, and a copy of the
Certificate of Incorporation of Company certified by the Secretary of State
of the state of New Jersey.
12.1.(k) INCUMBENCY CERTIFICATE. Incumbency certificates relating to
each person executing any document executed and delivered to Buyer pursuant
to the terms hereof.
12.1.(l) GENERAL RELEASE. The General Release referred to in Section
7.8, duly executed by the Shareholder.
12.1.(m) BRIDGETON FREEZER PURCHASE CONTRACT. An assignment of the
Bridgeton Freezer Purchase Contract to Buyer, together with the duly
executed consent of BFC to such assignment, such certificates and other
evidence of compliance by Company of its obligations under the Contract and
satisfaction of the conditions to BFC's obligations thereunder satisfactory
to Buyer's counsel, and the bargain and sale deeds, bills of sale and such
other instruments of conveyance required to be delivered by BFC under the
Bridgeton Freezer Purchase Contract at the closing of the transaction
contemplated therein.
12.1.(n) PLAN ASSUMPTION AGREEMENT. The Plan Assumption Agreement
referred to in Section 6.2, duly executed by Company.
12.1.(o) OTHER DOCUMENTS. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as Buyer may reasonably request.
12.2. DOCUMENTS TO BE DELIVERED BY BUYER AND FARGO. At the Closing, Buyer
and Fargo shall deliver to Company the following documents, in each case duly
executed or otherwise in proper form:
12.2.(a) CASH PURCHASE PRICE. To Company's lenders, a wire transfer
as required by Section 3.2(a)(i) hereof, to Company a certified or bank
cashier's check (or wire transfer) as required by Section 3.2.(c) hereof,
and to the Escrow Agent, a certified or bank cashier's check (or wire
transfer) as required by Section 3.2.(b) hereof, and to BFC, a certified or
bank cashier's check (or wire transfer) as required by Section 3.2(a)
hereof.
54
12.2.(b) NORTHLAND STOCK. To Escrow Agent, a certificate or
certificate for the number of shares of Northland Stock to be issued by
Buyer as required by Section 3.2(b) hereof.
12.2.(c) ASSUMPTION OF LIABILITIES. Such undertakings and
instruments of assumption as will be reasonably sufficient in the opinion
of Company and its counsel to evidence the assumption of Company
Liabilities as provided for in Article 2 and the assumption of the Ocean
Spray Freezer Contract, if requested by Company.
12.2.(d) COMPLIANCE CERTIFICATE. A certificate signed by the chief
executive officers of Buyer and Fargo that the representations and
warranties made by Buyer in this Agreement are true and correct on and as
of the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date (except for
any changes permitted by the terms of this Agreement or consented to in
writing by Company), and that Buyer and Fargo have performed and complied
with all of Buyer's obligations under this Agreement which are to be
performed or complied with on or prior to the Closing Date.
12.2.(e) OPINION OF COUNSEL. A written opinion of Xxxxx & Xxxxxxx,
counsel to Buyer and Fargo, dated as of the Closing Date, addressed to
Company, in substantially the form of Exhibit H hereto.
12.2.(f) CERTIFIED RESOLUTIONS. Certified copies of the resolutions
of the Board of Directors of, Buyer and Fargo authorizing and approving
this Agreement and the consummation of the transactions contemplated by
this Agreement.
12.2.(g) ESCROW AGREEMENT. The Escrow Agreement duly executed by
Buyer, Fargo and the Escrow Agent in the form of Exhibit A hereto.
12.2.(h) EMPLOYMENT AGREEMENT. The Employment Agreement referred to
in Section 7.5, duly executed by Buyer and Fargo.
12.2.(i) INVENTORY PURCHASE AGREEMENT. The Inventory Purchase
Agreement referred to in Section 7.10, duly executed by Buyer.
12.2.(j) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement described in Section 7.11, duly executed by Buyer.
12.2.(k) INCUMBENCY CERTIFICATE. Incumbency certificates relating to
each person executing any document executed and delivered to Company by
Buyer pursuant to the terms hereof.
12.2.(l) PLAN ASSUMPTION AGREEMENT. The Plan Assumption Agreement
described in Section 6.2, duly executed by Buyer and Fargo.
55
12.2.(m) ASSIGNMENT AND ASSUMPTION OF AGREEMENT. An agreement for
the assignment and assumption (but not novation) of Buyer's rights and
obligations under this Agreement to Fargo, in accordance with Section 15.4
hereof, in form and substance reasonably acceptable to counsel for Company
and Shareholder.
12.2.(n) OTHER DOCUMENTS. All other documents, instruments or
writings required to be delivered to Company at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as Company may reasonably request.
13. TERMINATION
13.1. RIGHT OF TERMINATION WITHOUT BREACH. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:
13.1.(a) by mutual written agreement of Buyer, Company and the
Shareholder, or
13.1.(b) by either Buyer or Company if the Closing shall not have
occurred on or before September 30, 1998, provided that Company and
Shareholder may extend such date to December 31, 1998, by written notice to
Buyer not later than September 20, 1998 provided the terminating party has
not, through breach of a representation, warranty or covenant, prevented
the Closing from occurring on or before such date.
13.2. TERMINATION FOR BREACH.
13.2.(a) TERMINATION BY BUYER. If (i) there has been a material
violation by Company of any of the agreements of Company in this Agreement
which is continuing after five business days' prior notice which has not
been waived in writing by Buyer, or (ii) Company shall have attempted to
terminate this Agreement under this Article 13 or otherwise without grounds
to do so, then Buyer may, by written notice to Company at any time prior to
the Closing that such violation or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in Section
13.2.(c) hereof.
13.2.(b) TERMINATION BY COMPANY. If (i) there has been a failure of
satisfaction of a condition to the obligations of Company which has not
been waived in writing by Buyer, or (ii) Buyer shall have attempted to
terminate this Agreement under this Article 13 or otherwise without grounds
to do so, then Company may, by written notice to Buyer at any time prior to
the Closing that such violation, breach, failure or wrongful termination
attempt is continuing, terminate this Agreement with the effect set forth
in Section 13.2.(c) hereof.
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13.2.(c) EFFECT OF TERMINATION. Termination of this Agreement
pursuant to this Section 13.2 shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other
party which has violated, breached or failed to satisfy any of the
representations, warranties, covenants, agreements, conditions or other
provisions of this Agreement prior to termination hereof. Company and
Shareholder acknowledge that the Business and Purchased Assets are of a
special, unique and extraordinary character and damages are inadequate to
compensate any breach of this Agreement. Accordingly, in the event Company
shall have attempted to terminate this Agreement under this Article 13 or
otherwise without valid grounds to do so, or shall have otherwise failed or
refused to perform its covenants, agreements and obligations hereunder,
then Buyer, at its sole election and in addition to any other remedy
available to it, may seek a decree of specific performance requiring
Company and Shareholder to fulfill their obligations under this Agreement
and Company and Shareholder agree to waive any defense that an adequate
remedy at law exists. In addition to the right of any party under common
law to redress for any such breach or violation, each party whose breach or
violation has occurred prior to termination shall jointly and severally
indemnify each other party for whose benefit such representation, warranty,
covenant, agreement or other provision was made ("indemnified party") from
and against all losses, damages (including, without limitation,
consequential damages), costs and expenses (including, without limitation,
interest (including prejudgment interest in any litigated matter),
penalties, court costs, and attorneys fees and expenses) asserted against,
resulting to, imposed upon, or incurred by the indemnified party, directly
or indirectly, by reason of, arising out of or resulting from such breach
or violation. Subject to the foregoing, the parties' obligations under
Section 15.9 of this Agreement shall survive termination.
14. RESOLUTION OF DISPUTES
14.1. ARBITRATION. After the Closing, any dispute, controversy or claim
arising out of or relating to this Agreement or the negotiation hereof or entry
hereunto or any contract or agreement entered into pursuant hereto or the
performance by the parties of its or their terms shall be settled by binding
arbitration held in Chicago, Illinois in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect, except
as specifically otherwise provided in this Article 14. This Article 14 shall be
construed and enforced in accordance with the Federal Arbitration Act,
notwithstanding any other choice of law provision in this Agreement.
Notwithstanding the foregoing:
14.1.(a) Buyer may, in its discretion, apply to a court of competent
jurisdiction for equitable relief as provided in Section 15.5. Such an
application shall not be deemed a waiver of the right to compel arbitration
pursuant to this Article.
14.1.(b) No party shall be required to submit to arbitration
hereunder unless all persons who are not parties to this Agreement, but who
are necessary parties to a complete resolution of the controversy, submit
to the arbitration process on the same
57
terms as the parties hereto. Without limiting the generality of the
foregoing, no claim under Article 11 for the indemnification of a
third-party claim shall be subject to arbitration under this Article
14 unless the third party bringing such claim against the indemnitee
shall agree in writing to the application of this Article 14 of the
resolution of such claim.
14.1.(c) Without the express written consent of all parties, this
Article 14 shall not apply where the amount in controversy, excluding
attorney fees and expenses, exceeds $1,000,000.
14.2. ARBITRATORS. If the matter in controversy (exclusive of attorney
fees and expenses) shall appear, as at the time of the demand for arbitration,
to exceed $500,000, then the panel to be appointed shall consist of three
neutral arbitrators; otherwise, one neutral arbitrator.
14.3. PROCEDURES; NO APPEAL. The arbitrator(s) shall allow such
discovery as the arbitrator(s) determine appropriate under the circumstances
and shall resolve the dispute as expeditiously as practicable, and if
reasonably practicable, within 120 days after the selection of the
arbitrator(s). The arbitrator(s) shall give the parties written notice of
the decision, with the reasons therefor set out, and shall have 30 days
thereafter to reconsider and modify such decision if any party so requests
within 10 days after the decision. Thereafter, the decision of the
arbitrator(s) shall be final, binding, and nonappealable with respect to all
persons, including (without limitation) persons who have failed or refused to
participate in the arbitration process.
14.4. AUTHORITY. The arbitrator(s) shall have authority to award relief
under legal or equitable principles, including interim or preliminary relief,
and to allocate responsibility for the costs of the arbitration and to award
recovery of attorneys fees and expenses in such manner as is determined to be
appropriate by the arbitrator(s).
14.5. ENTRY OF JUDGMENT. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having in personam and subject matter
jurisdiction. Company, Buyer and the Shareholder hereby submit to the in
personam jurisdiction of the Federal and State courts in Chicago, Illinois, for
the purpose of confirming any such award and entering judgment thereon.
14.6. CONFIDENTIALITY. All proceedings under this Article 14, and all
evidence given or discovered pursuant hereto, shall be maintained in confidence
by all parties and by the arbitrators.
14.7. CONTINUED PERFORMANCE. The fact that the dispute resolution
procedures specified in this Article 14 shall have been or may be invoked shall
not excuse any party from performing its obligations under this Agreement and
during the pendency of any such procedure all parties shall continue to perform
their respective obligations in good faith, subject to any rights to terminate
this Agreement that may be available to any party and to the right of setoff
provided in Section 11.4 hereof.
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14.8. TOLLING. All applicable statutes of limitation shall be tolled while
the procedures specified in this Article 14 are pending. The parties will take
such action, if any, required to effectuate such tolling.
14.9. ESCROW AGENT UNNECESSARY. The parties agree that the escrow agent
under and as identified in the Escrow Agreement is not a necessary party to and
shall not be joined in or made party to any arbitration proceeding commenced
under this Article 14.
15. MISCELLANEOUS
15.1. DISCLOSURE SCHEDULE. Information set forth in the Disclosure
Schedule specifically refers to the article and section of this Agreement to
which such information is responsive and such information shall not be deemed to
have been disclosed with respect to any other article or section of this
Agreement or for any other purpose. Nothing in the Disclosure Schedule shall be
deemed adequate to disclose an exception to a representation or warranty made
herein unless the Disclosure Schedule identifies the exception with reasonable
particularity.
15.2. FURTHER ASSURANCE. From time to time, at any party's request and
without further consideration, any other party will execute and deliver to such
party such documents, instruments and consents and take such other action as
such party may reasonably request in order to consummate more effectively the
transactions contemplated hereby, to discharge the covenants of the parties
hereunder and to vest in Buyer good, valid and marketable title to the business
and assets being transferred hereunder.
15.3. DISCLOSURES AND ANNOUNCEMENTS. Both the timing and the content of
all disclosure to third parties and public announcements concerning the
transactions provided for in this Agreement by either Company or Buyer shall be
subject to the approval of the other in all essential respects, except that
Company's approval shall not be required as to any statements and other
information which Buyer may submit to the Securities and Exchange Commission or
Buyer's stockholders or be required to make pursuant to any rule or regulation
of the Securities and Exchange Commission or NASDAQ, etc., or otherwise required
by law; provided that Buyer shall consult with Company to the extent possible
prior to any such submission or statements.
15.4. ASSIGNMENT; PARTIES IN INTEREST.
15.4.(a) ASSIGNMENT. Except as expressly provided herein, the rights
and obligations of a party hereunder may not be assigned, transferred or
encumbered without the prior written consent of the other parties.
Notwithstanding the foregoing, Buyer may, without consent of any other
party, cause one or more subsidiaries of Buyer to carry out all or part of
the transactions contemplated hereby; provided, however, that Buyer shall,
nevertheless, remain liable for all of its obligations, and those of any
such subsidiary, to Company hereunder.
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15.4.(b) PARTIES IN INTEREST. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective successors
and permitted assigns of the parties hereto. Nothing contained herein
shall be deemed to confer upon any other person any right or remedy under
or by reason of this Agreement.
15.5. EQUITABLE RELIEF. Company and the Shareholder agree that any breach
of the Company's obligation to consummate the sale of the Purchased Assets on
the Closing Date, any breach of any noncompetition obligation imposed by Section
7.6 hereof or by any agreement delivered to Buyer pursuant to Section 7.5
hereof, or any breach by Company or the Shareholder of its or their obligations
imposed by Section 7.7 hereof, will result in irreparable injury to Buyer for
which a remedy at law would be inadequate; and that, in addition to any relief
at law which may be available to Buyer for such breach and regardless of any
other provision contained in this Agreement, Buyer shall be entitled to
injunctive and other equitable relief as a court may grant. This Section 15.5
shall not be construed to limit Buyer's right to obtain equitable relief for
other breaches of this Agreement under general equitable standards.
15.6. LAW GOVERNING AGREEMENT. This Agreement shall be construed and
interpreted according to the internal laws of the State of New Jersey, excluding
any choice of law rules that may direct the application of the laws of another
jurisdiction. Process and pleadings mailed to a party at the address provided
in Section 15.8 shall be deemed properly served and accepted for all purposes.
15.7. AMENDMENT AND MODIFICATION. Buyer, Company and the Shareholder may
amend, modify and supplement this Agreement in such manner as may be agreed upon
by them in writing.
15.8. NOTICE. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service.
The respective addresses to be used for all such notices, demands or requests
are as follows:
(a) If to Buyer, to:
Northland Cranberries, Inc.
000 Xxxxx Xxxxxx Xxxxx
P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
Attention: Xxxx Xxxxxxxxxxx
Facsimile: (000) 000-0000
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(with a copy to)
Xxxxxxx X. Xxxxx
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
or to such other person or address as Buyer shall furnish to Company in writing.
(b) If to Company or the Shareholder, to:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Minot Food Packers, Inc.
Penn and Xxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(with a copy to)
Xxxx X. Xxxxx, III, Esq.
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
or to such other person or address as Company shall furnish to Buyer in writing.
If personally delivered, such communication shall be deemed delivered upon
actual receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this paragraph, such communication shall be deemed delivered
upon receipt; and if sent by U.S. mail pursuant to this paragraph, such
communication shall be deemed delivered as of the date of delivery indicated on
the receipt issued by the relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of the date of such failure or refusal. Any
party to this Agreement may change its address for the purposes of this
Agreement by giving notice thereof in accordance with this Section.
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15.9. EXPENSES. Except as provided in Section 15.9.(f), regardless of
whether or not the transactions contemplated hereby are consummated:
15.9.(a) EXPENSES TO BE PAID BY COMPANY. Company shall pay, and
shall indemnify, defend and hold Buyer harmless from and against, each of
the following:
(i) TRANSFER TAXES. Any sales, use, excise, transfer or other
similar tax imposed with respect to the transactions provided for in
this Agreement, and any interest or penalties related thereto.
(ii) PROFESSIONAL FEES. All fees and expenses of Company's
legal, accounting, investment banking and other professional counsel
in connection with the transactions contemplated hereby, including the
restatement of Company's June 30, 1997, audited financial statements,
except to the extent provided in Section 15.9(b)(iii) and (v) below.
(iii)APPRAISAL FEES. One-half of the fees and expenses for the
appraisal of the Purchased Assets to be obtained pursuant to Section
3.3.
15.9.(b) EXPENSES TO BE PAID BY BUYER. Buyer shall pay, and shall
indemnify, defend and hold Company and Shareholder harmless from and
against each of the following:
(i) HSR FEES. All filing fees for the Xxxx-Xxxxx-Xxxxxx
application filed pursuant to Section 7.9 hereof.
(ii) ENVIRONMENTAL AUDIT. The fees and other expenses relating
to the environmental audit performed pursuant to Section 7.3 hereof.
(iii) TITLE INSURANCE PREMIUMS AND SURVEY FEES. All premiums for
the issuance of the title insurance policies issued pursuant to
Section 9.5 hereof, and the cost of surveys performed pursuant to
Section 7.2.
(iv)APPRAISAL FEES. One-half of the fees and expenses for the
appraisal of the Purchased Assets to be obtained pursuant to Section
3.3.
(v) CERTAIN ACCOUNTING FEES. Fees of BDO Xxxxxxx pertaining to
the review of the financial statements described in Section 4.4 in
connection with the proposed filings of such statements with the
Commission.
15.9.(c) OTHER. Except as otherwise provided herein, each of the
parties shall bear its own expenses and the expenses of its counsel and
other agents in connection with the transactions contemplated hereby.
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15.9.(d) COSTS OF LITIGATION. The parties agree (subject to the
discretion, in an arbitration proceeding, of the arbitrator as set forth in
Section 14.4) that the prevailing party in any action brought with respect
to or to enforce any right or remedy under this Agreement shall be entitled
to recover from the other party or parties all reasonable costs and
expenses of any nature whatsoever incurred by the prevailing party in
connection with such action, including without limitation attorneys' fees
and prejudgment interest.
15.9.(e) BROKERAGE. Except as to any broker or finder described on
Schedule 4.24, who shall be paid by Company, and except as to any broker
or finder described on Schedule 5.4, who shall be paid by Buyer, Company
and Shareholder and Buyer have each represented and warranted to each other
that there is no broker or finder involved or in any way connected with the
transfer provided for herein on their behalf respectively and each agrees
to hold the others harmless from and against all other claims for brokerage
commissions or finder's fees in connection with the execution of this
Agreement or the transactions provided for herein.
15.9.(f) REIMBURSEMENT OF COMPANY EXPENSES. In the event that the
Agreement is terminated pursuant to Section 13.1 hereof by reason of
Buyer's failure or inability (despite all reasonable commercial efforts) to
obtain the financing for the Purchase Price as described in Section 7.20,
Buyer shall promptly reimburse Company for all expenses incurred by Company
in connection with the transactions contemplated by this Agreement, up to a
maximum total of $300,000.
15.10. NO RECORDING. The parties agree that no party hereto shall record
this Agreement.
15.11. ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and there have been and are no agreements, representations or warranties between
the parties other than those set forth or provided for herein.
15.12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.13. HEADINGS. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
15.14. KNOWLEDGE. References in the Agreement to the "knowledge of
Company" or similar language shall mean the actual knowledge of Xxxxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxxxx Xxxxx or Xxxxx Xxxx.
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15.15. GLOSSARY OF TERMS. The following sets forth the location of
definitions of capitalized terms defined in the body of this Agreement:
"AFFECTED EMPLOYEES" - Section 6.1
"AFFILIATE" - Section 1.1(l)
"ASSUMED CONTRACTS" - Section 2.1.(b)
"ASSUMED DEBT OBLIGATIONS" - Section 2.1.(f)
"ASSUMED DEBT PREPAYMENT PENALTIES" - Section 2.2.(e)
"ASSUMED EMPLOYEE PLANS/AGREEMENT - Section 4.16(a)
"ASSUMED LIABILITIES" - Section 2.1
"BFC" - Recitals
"BRIDGETON FREEZER" - Recitals
"BRIDGETON FREEZER PURCHASE CONTRACT" - Recitals
"BRIDGETON FREEZER PURCHASE PRICE" - Recitals
"BUYER'S ACCOUNTANTS" - Section 3.3.(c)
"BUYER'S AFFILIATES" - Section 11.1
"CERCLA" - Section 2.2.(g)
"CLAIM" - Section 11.1
"CLOSING" - Preamble to Article 12
"CLOSING DATE" - Section 12
"CODE" - Section 3.3
"COMMISSION" - Section 5.6
"COMPANY EMPLOYEES" - Section 4.16.(a)
"COMPANY'S ACCOUNTANTS" - Section 3.3.(c)(ii)
"CONTRACTS" - Section 1.1.(g)
"CURRENT ASSETS: - Section 3.3(a)
"DEBT OBLIGATIONS" - Section 2.2.(8)
"DISCLOSURE SCHEDULE" - Article 15.1
"EFFECTIVE TIME" - Section 3.3.(b)
"EMPLOYMENT AGREEMENT" - Section 7.5
"EMPLOYEE PLANS/AGREEMENTS" - Section 4.16.(a)
"ENVIRONMENTAL INDEMNITY AGREEMENT" - Exhibit I
"ENVIRONMENTAL LAWS" - Section 4.11.(c)
"ERISA" - Section 4.16.(a)
"ESCROW AGREEMENT" - Section 7.4
"ESTIMATED CLOSING BALANCE SHEET" - Section 3.3.(b)
"EXCLUDED ASSETS" - Section 1.2
"FACILITIES" - Recitals
"FARGO" - Recitals
"FINAL CLOSING BALANCE SHEET" - Section 3.3.(c)(iii)
"GOVERNMENT ENTITIES" - Section 2.2.(m)
"HAZARDOUS SUBSTANCES" - Section 2.2.(g)
"HSR ACT" - Section 4.3
"IRS" - Section 3.3
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"INDEMNIFIED PARTY" - Section 11.3.(a)
"INDEMNIFYING PARTY" - Section 11.3.(a)
"INVENTORY" - Section 1.1.(d)
"INVENTORY PURCHASE AGREEMENT" - Section 7.10
"INVESTOR REPRESENTATION LETTER" - Section 9.9
"LAWS" - Section 4.11(a)
"LEASED REAL PROPERTY" - Section 1.1.(b)
"LIABILITY" - Section 2.1
"LIEN" - Section 4.12.(a)
"LITIGATION" - Section 2.2.(h)
"MATERIAL ADVERSE EFFECT" - Section 4.1(c)
"ORDERS" - Section 4.11(a)
"OWNED REAL PROPERTY" - Section 1.1.(a)
"PBGC" - Section 4.16.(b)(ii)
"PERMITTED REAL PROPERTY LIENS" - Section 4.12.(a)
"PERSONAL PROPERTY LEASES" - Section 1.1.(e)
"PRE-SALE TAXABLE INCOME" - Section 7.18
"PRODUCTS" - Section 4.20
"PURCHASED ASSETS" - Section 1.1
"PURCHASE PRICE" - Section 3.1
"REAL PROPERTY" - Section 4.12.(c)
"REAL PROPERTY LEASES" - Section 1.1.(b)
"REASONABLE BEST EFFORTS" - Section 1.1(g)
"RECENT BALANCE SHEET" - Section 4.4
"REGISTRATION RIGHTS AGREEMENT" - Section 7.11
"SETTLEMENT DATE" - Section 3.2.(e)
"TRADE RIGHTS" - Section 1.1.(f)
Where any group or category of items or matters is defined collectively in the
plural number, any item or matter within such definition may be referred to
using such defined term in the singular number.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
NORTHLAND CRANBERRIES, INC.
By:
------------------------------------
Xxxx Xxxxxxxxxxx
Chairman and CEO
MINOT FOOD PACKERS, INC.
By:
-----------------------------------
Xxxxxxx X. Xxxxxxx
President
--------------------------------------
Xxxxxxx X. Xxxxxxx
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