STOCK PURCHASE AGREEMENT
by and among
CERTAIN SHAREHOLDERS OF GSV
collectively, as "Sellers",
GOLDEN STATE VINTNERS
as the "Company"
and
GOLDEN STATE ACQUISITION CORP.
as "Buyer"
Dated: April 27, 1995
TABLE OF CONTENTS
PAGE
----
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Defined Terms. . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PURCHASE AND SALE OF CAPITAL STOCK. . . . . . . . . . . . . . . . . . . . 7
2.1 Transfer of Capital Stock. . . . . . . . . . . . . . . . . . 7
2.2 Consideration for Capital Stock. . . . . . . . . . . . . . . 7
2.3 Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Purchase Price Reduction . . . . . . . . . . . . . . . . . . 7
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Documents to be Delivered. . . . . . . . . . . . . . . . . . 7
ARTICLE IVA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
REPRESENTATIONS AND WARRANTIES OF SELLER
AND THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4A.1 Organization of Sellers. . . . . . . . . . . . . . . . . . . 8
4A.2 Organization of the Company. . . . . . . . . . . . . . . . . 8
4A.3 Authorization. . . . . . . . . . . . . . . . . . . . . . . . 9
4A.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 9
4A.5 Absence of Certain Changes or Events . . . . . . . . . . . . 9
4A.6 Title to Assets, Etc.. . . . . . . . . . . . . . . . . . . .12
4A.7 Condition of Tangible Assets . . . . . . . . . . . . . . . .13
4A.8 Contracts and Commitments. . . . . . . . . . . . . . . . . .13
4A.9 No Conflict or Violation . . . . . . . . . . . . . . . . . .14
4A.10 Consents and Approvals . . . . . . . . . . . . . . . . . . .15
4A.11 Financial Statements . . . . . . . . . . . . . . . . . . . .15
4A.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . .15
4A.13 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . .15
4A.14 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . .16
4A.15 Compliance with Law. . . . . . . . . . . . . . . . . . . . .16
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TABLE OF CONTENTS
(CONTINUED)
4A.16 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . .16
4A.17 No Other Agreements to Sell the Assets or the Company. . . .16
4A.18 Proprietary Rights . . . . . . . . . . . . . . . . . . . . .16
4A.19 Employee Benefit Plans . . . . . . . . . . . . . . . . . . .17
4A.20 Transactions with Certain Persons. . . . . . . . . . . . . .18
4A.21 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . .19
4A.22 Severance Arrangements . . . . . . . . . . . . . . . . . . .20
4A.23 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . .20
4A.24 Accounts Receivable. . . . . . . . . . . . . . . . . . . . .20
4A.25 Inventories. . . . . . . . . . . . . . . . . . . . . . . . .00
0X.00 Xxxxxxxx Commitments and Outstanding Bids. . . . . . . . . .21
4A.27 Payments . . . . . . . . . . . . . . . . . . . . . . . . . .21
4A.28 Customers and Suppliers. . . . . . . . . . . . . . . . . . .21
4A.29 Compliance With Legislation Regulating Environmental
Quality. . . . . . . . . . . . . . . . . . . . . . . . . . .22
4A.30 Real Estate. . . . . . . . . . . . . . . . . . . . . . . . .22
4A.31 Misstatements Or Omissions . . . . . . . . . . . . . . . . .00
0X.00 Xxxxxxxx Arrangements. . . . . . . . . . . . . . . . . . . .25
ARTICLE IVB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
REPRESENTATIONS AND WARRANTIES OF THE LENDER SELLERS. . . . . . . . . . .26
4B.1 Organization of such Lender Seller . . . . . . . . . . . . .26
4B.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . .26
4B.3 No Conflict or Violation . . . . . . . . . . . . . . . . . .26
4B.4 Consents and Approvals . . . . . . . . . . . . . . . . . . .26
4B.5 No Other Agreements to Sell the Company. . . . . . . . . . .26
4B.6 Transactions with Certain Persons. . . . . . . . . . . . . .27
4B.7 Misstatements or Omissions . . . . . . . . . . . . . . . . .00
0X.0 Xxxxxxxx Arrangements. . . . . . . . . . . . . . . . . . . .27
ARTICLE V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . .27
5.1 Organization of Buyer . . . . . . . . . . . . . . . . . . . .27
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . .27
5.3 Consents and Approvals. . . . . . . . . . . . . . . . . . . .27
5.4 No Brokers. . . . . . . . . . . . . . . . . . . . . . . . . .28
5.5 No Conflict or Violation. . . . . . . . . . . . . . . . . . .28
ii
TABLE OF CONTENTS
(CONTINUED)
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
ACTIONS BY SELLERS, THE COMPANY AND
BUYER PRIOR TO THE CLOSING . . . . . . . . . . . . . . . . . . . . .28
6.1 Maintenance of Business . . . . . . . . . . . . . . . . . . .28
6.2 Certain Prohibited Transactions . . . . . . . . . . . . . . .28
6.3 Investigation by Buyer. . . . . . . . . . . . . . . . . . . .29
6.4 Consents and Best Efforts . . . . . . . . . . . . . . . . . .30
6.5 Notification of Certain Matters . . . . . . . . . . . . . . .30
6.6 No Mergers, Consolidations, Sale of Capital Stock, Etc. . . .31
6.7 Title Insurance, Surveys. . . . . . . . . . . . . . . . . . .31
6.8 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . .32
ARTICLE VII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
CONDITIONS TO SELLERS' OBLIGATIONS. . . . . . . . . . . . . . . . . . . .32
7.1 Representations, Warranties and Covenants . . . . . . . . . .33
7.2 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . .33
7.3 No Governmental Proceeding or Litigation. . . . . . . . . . .33
7.4 Certificates. . . . . . . . . . . . . . . . . . . . . . . . .33
7.5 Corporate Documents . . . . . . . . . . . . . . . . . . . . .33
7.6 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . .33
7.7 Other Agreements. . . . . . . . . . . . . . . . . . . . . . .33
7.8 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . .33
7.9 Employment Agreements . . . . . . . . . . . . . . . . . . . .33
7.10 Delivery of Documents . . . . . . . . . . . . . . . . . . . .34
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
CONDITIONS TO BUYER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . .34
8.1 Representations, Warranties and Covenants . . . . . . . . . .34
8.2 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . .34
8.3 No Governmental Proceeding or Litigation. . . . . . . . . . .34
8.4 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . .34
8.5 Certificates. . . . . . . . . . . . . . . . . . . . . . . . .34
8.6 Corporate Documents . . . . . . . . . . . . . . . . . . . . .35
8.7 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . .35
iii
TABLE OF CONTENTS
(CONTINUED)
8.8 Federal Alcohol Administration Act. . . . . . . . . . . . . .35
8.9 Financing . . . . . . . . . . . . . . . . . . . . . . . . . .35
8.10 Disclosure Schedules. . . . . . . . . . . . . . . . . . . . .35
8.11 Balance Sheet and Financial Statements. . . . . . . . . . . .35
8.12 Employment Agreements . . . . . . . . . . . . . . . . . . . .35
8.13 Estoppel Certificates . . . . . . . . . . . . . . . . . . . .35
8.14 Due Diligence . . . . . . . . . . . . . . . . . . . . . . . .36
8.15 Delivery of Documents . . . . . . . . . . . . . . . . . . . .36
8.16 FIRPTA Certificates . . . . . . . . . . . . . . . . . . . . .36
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
COVENANT NOT TO COMPETE . . . . . . . . . . . . . . . . . . . . . . . . .36
ARTICLE X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
ACTIONS BY SELLERS, THE COMPANY
AND BUYER AFTER THE CLOSING. . . . . . . . . . . . . . . . . . . . .37
10.1 Books and Records . . . . . . . . . . . . . . . . . . . . . .37
10.2 Further Assurances. . . . . . . . . . . . . . . . . . . . . .38
10.3 Compliance With Legislation Regulating Environmental
Quality . . . . . . . . . . . . . . . . . . . . . . . . . . .38
ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
11.1 Survival of Representations, Etc. . . . . . . . . . . . . . .38
11.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . .38
11.3 Indemnification Procedures. . . . . . . . . . . . . . . . . .39
11.4 No Right of Contribution. . . . . . . . . . . . . . . . . . .41
11.5 Characterization; Taxes . . . . . . . . . . . . . . . . . . .41
ARTICLE XII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECURITIES LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
12.1 Acquisition for Investment. . . . . . . . . . . . . . . . . .41
12.2 Legend. . . . . . . . . . . . . . . . . . . . . . . . . . . .41
iv
TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
13.1 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . .42
ARTICLE XIV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
14.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . .42
14.2 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . .43
14.3 Notices; Transfer of Funds. . . . . . . . . . . . . . . . . .43
14.4 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . .45
14.5 Entire Agreement; Amendments and Waivers. . . . . . . . . . .46
14.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .46
14.7 Invalidity. . . . . . . . . . . . . . . . . . . . . . . . . .46
14.8 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . .46
14.9 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . .46
14.10 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . .46
14.11 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . .46
14.12 Risk of Loss. . . . . . . . . . . . . . . . . . . . . . . . .47
14.13 Confidential Information. . . . . . . . . . . . . . . . . . .47
14.14 Liability of Lender Sellers . . . . . . . . . . . . . . . . .48
v
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of April 27, 1995, is entered
into by and among Golden State Acquisition Corp., a Delaware corporation
("Buyer"), Golden State Vintners, a California corporation (the "Company") and
certain shareholders of the Company (each, a "Seller" and, collectively,
"Sellers").
RECITALS
A. Sellers own no less than 90% of the shares of common stock, no
par value, of the Company (the "Common Stock"), and no less than 90% of the
shares of preferred stock, no par value, of the Company (the "Preferred Stock",
and together with the Common Stock, the "Capital Stock") constituting all of the
outstanding Capital Stock of the Company. The Company currently engages in,
among other things, (i) growing wine grapes on a long term contract basis, (ii)
processing, custom crushing and selling commodity and premium wine made from
both Xxxxx Xxxxx xxx Xxxxxxx Xxxxxx, Xxxxxxxxxx grapes, (iii) producing a line
of proprietary case goods, and (iv) bottling for unrelated third parties on a
contract basis (the foregoing, together with all other business and operations
of the Company and any of its subsidiaries or divisions shall hereinafter be
collectively referred to as the "Business"). For purposes of this Agreement,
"Capital Stock" shall also include certain warrants (which shall be treated as
if exercised) held by certain of the Sellers.
B. Buyer desires to purchase from Sellers, and Sellers desire to
transfer to Buyer, all of the Capital Stock subject to the terms and conditions
of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the terms below shall have the
following meanings:
"ADVERSE EFFECT" shall mean a materially adverse effect on any of the
Business, the Sale, the Capital Stock, liabilities, Assets, working capital,
earnings, financial condition, operating results, prospects, or employee,
customer or supplier relations of the Company, or the ability of the Company or
any Seller to perform its respective obligations under the Transaction
1
Documents or the ability of the Company or any Seller to conduct the Business as
presently conducted.
"AGREEMENT" shall mean this Stock Purchase Agreement, dated as of
April 27, 1995, by and among Buyer, Sellers and the Company, as such Agreement
may be amended from time to time.
"BALANCE SHEET" shall mean the audited Consolidated Balance Sheet of
the Company as of June 30, 1994 together with the notes thereon and the related
unqualified report of Deloitte & Touche, the Company's certified public
accountants, previously delivered to Buyer and attached hereto as Schedule 1.1.
"BALANCE SHEET DATE" shall mean June 30, 1994.
"BEST OF THE COMPANY'S KNOWLEDGE" shall mean the current actual
knowledge of X'Xxxxx, Xxxxxx Xxxxxx and Xxxxx Xxxxx, in each case after due
inquiry as to the subject matter involved, which inquiry is implicit in the use
of the "knowledge" qualifier.
"BUSINESS" shall have the meaning assigned to such term in Recital A
hereof.
"BUYER'S EXPENSES" shall mean all costs and expenses incurred by Buyer
in connection with the negotiation, preparation, execution and delivery of the
Transaction Documents and the consummation of the transactions contemplated
therein.
"CAPITAL STOCK" shall have the meaning assigned to such term in
Recital A hereof.
"CLOSING" shall have the meaning assigned to such term in Section 3.1.
"CLOSING DATE" shall mean the close of business on April 27, 1995, or
such other date as may be mutually agreed upon in writing by the Parties.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COMMON STOCK" shall have the meaning assigned to such term in Recital
A to this Agreement.
"COMMON STOCK SUBSCRIPTION AGREEMENT" shall mean that certain Common
Stock Subscription Agreement by and among the Buyer, FAC, Ltd., Exeter Equity
Partners, L.P., Exeter Venture Lenders, L.P. and SBIC Partners, L.P. attached
hereto as Exhibit 1.1(a).
"CONTRACTS" shall mean any of the agreements, contracts, commitments
or other documents described in Section 4A.8 (a)-(l) hereof.
2
"CONTROLLED GROUP" shall have the meaning assigned to such term in
Section 4A.19 hereof.
"DAMAGES" shall have the meaning assigned to such term in section 11.2
hereof.
"DISCLOSURE SCHEDULE" means a schedule executed and delivered by
Sellers to Buyer prior to the date hereof which sets forth exceptions to the
representations and warranties contained in Article IVA hereof and certain other
information called for by Article IVA hereof and other provisions of this
Agreement and which hereby is made a part of this Agreement and incorporated
herein by reference, as updated pursuant to Section 8.10.
"ENCUMBRANCES" shall mean any claim, mortgage, deed of trust,
restrictive covenant, reservations, lien, pledge, option, charge, easement,
security interest, right-of-way, encumbrance of any kind or other rights of
third parties, whether or not filed, recorded or otherwise perfected under
applicable law, as well as the interest of any vendor, vendee or lessor or
lessee under any conditional sale agreement, capital lease or other title
retention agreement.
"ERISA" shall have the meaning assigned to such term in Section 4A.19
hereof.
"ESCROW AGREEMENT" shall have the meaning assigned to such term in
Section 2.3 hereof.
"EQUITY INTERESTS" shall mean any capital stock or warrants, options
or other rights to acquire capital stock.
"EXCHANGEABLE PREFERRED STOCK" shall have the meaning assigned to such
term in Section 2.2 hereof.
"FAC" shall mean FAC, Ltd., a Cayman Islands corporation.
"FACILITIES" shall mean the plants, offices, wine processing and
bottling facilities, stores, warehouses, administration buildings, wineries,
tracts of land for growing grapes, tasting rooms, hospitality centers and all
other Real Estate, and related facilities which are owned or leased by the
Company or the Sellers on behalf of the Company.
"FINANCIAL STATEMENTS" shall mean the audited Consolidated Statements
of Income and Consolidated Statements of Stockholder's Equity for the Company
for the twelve month period ended as of the Balance Sheet Date together with the
notes thereon and the related unqualified report of Deloitte & Touche, the
Company's certified public accountants, previously delivered to Buyer and
attached hereto as Schedule 1.1.
"FIXTURES AND EQUIPMENT" shall mean all of the furniture, fixtures,
furnishings, machinery and equipment owned or leased by the Company or the
Sellers on behalf of the
3
Company and located in, at or upon the Facilities as of the Balance Sheet Date
plus all additions, replacements or deletions since the Balance Sheet Date to
the Closing Date.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"INDEBTEDNESS" shall mean, with respect to any Person, (a)
indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor or otherwise (other than trade payables and other current
liabilities incurred in the ordinary course of business and consistent with past
practices) and any commitment by which such Person insures a creditor against
loss, including contingent reimbursement obligations with respect to letters of
credit, (b) indebtedness guaranteed in any manner by such Person, including a
guarantee in the form of an agreement to repurchase or reimburse, (c)
obligations under capitalized leases in respect of which such Person is liable,
contingent ly or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person insures a creditor against loss, and (d) any
unsatisfied obligation of such Person for "withdrawal liability" to a
"multiemployer plan," as such terms are defined under ERISA.
"INVESTMENT" shall mean, with respect to any Person, (a) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or other ownership or beneficial interest
(including partnership interests and joint venture interests) of any other
Person, and (b) any capital contribution by such Person to any other Person.
"JUNIOR PREFERRED STOCK EXCHANGE AGREEMENT" shall mean that certain
Junior Preferred Stock Exchange Agreement by and among the Company and Sellers,
dated the Closing Date.
"OTHER PLANS" shall have the meaning assigned to such term in Section
4A.19 hereof.
"X'XXXXX" shall mean Xxxxxxx X. X'Xxxxx.
"X'XXXXX EMPLOYMENT AGREEMENT" shall have the meaning assigned to such
term in Section 7.9 hereof.
"PBGC" shall have the meaning assigned to such term in section 4A.19
hereof.
"PARTIES" shall mean the Buyer, the Company and each of the Sellers.
4
"PERSON" shall mean an individual, partnership, corporation,
association, joint stock company, trust, joint venture, unincorporated
organization, government entity or any other entity or organization of any kind
whatsoever.
"PREFERRED STOCK" shall have the meaning assigned to such term in
Recital A hereof.
"REAL ESTATE" shall mean all real property, whether owned or leased,
or any interest therein, and all plants, buildings and other improvements
located on such owned or leased property, and all easements, licenses, rights of
way, permits and all appurtenances to such owned or leased property, including,
without limitation, all appurtenant rights in and to public streets, whether or
not vacated.
"REPRESENTATIVE'' shall mean, with respect to any Person, any officer,
director, partner, principal, attorney, agent, employee or other authorized
representative of such Person.
"SALE" shall have the meaning assigned to such term in Section 2.1
hereof.
"SELLERS' EXPENSES" shall mean all costs and expenses incurred by the
Sellers in connection with the negotiation, preparation, execution and delivery
of the Transaction Documents and the consummation of the transactions
contemplated thereby.
"SUBSIDIARIES" shall mean any Person in which the Company either owns
capital stock or is a partner or is in some other manner affiliated through an
investment or participation in the equity or voting interests of such Person.
"TAX" or "TAXES" shall mean any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Sec. 59A), customs duties, capital stock, franchise, profits, withholding,
social security or similar, unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including without
limitation any interest, penalty, or addition thereto, whether disputed or not.
"TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"TRANSACTION DOCUMENTS" shall mean this Agreement and all other
agreements, instruments, certificates and other documents to be entered into or
delivered by any Person in connection with the transactions contemplated to be
consummated pursuant to any of the foregoing.
5
"TRANSFER TAXES" shall mean any and all sales, use, transfer, real
property transfer, recording, gains, stock transfer and other similar taxes and
fees.
1.2 OTHER DEFINED TERMS. The following terms shall have the
meanings assigned to such terms in the corresponding Sections of this Agreement
set forth below:
TERM SECTION
---- -------
Action 4A.12
Assets 4A.6
Buyer's Indemnitees 11.2
Closing 3.1
Closing Disclosure Schedule 8.10
Damages 11.2
Indemnification Claim Notice 11.2
Indemnified Party 11.3
Indemnifying Party 11.3
Interim Financial Statements 8.11
Personnel 4A.5
Proceeding 11.2
Purchase Price 2.2
Proprietary Rights 4A.18
Seller's Indemnitees 11.2
Survey 6.7
6
ARTICLE II
PURCHASE AND SALE OF CAPITAL STOCK
2.1 TRANSFER OF CAPITAL STOCK. Upon the terms and subject to the
conditions contained herein, Sellers will sell, convey, transfer, assign and
deliver to Buyer, and Buyer will acquire on the Closing Date, no less than 90%
of the shares of Capital Stock (the "Sale").
2.2 CONSIDERATION FOR CAPITAL STOCK. Upon the terms and subject
to the conditions contained herein, as consideration for the purchase of up to
100% of the shares of Capital Stock, Buyer shall (i) pay a purchase price (the
"Purchase Price") of $.104933 per share for an aggregate of up to Twenty Million
Eight Hundred Fifty-Two Thousand One-Hundred Eighteen Dollars and Fifty-Six
Cents ($20,852,118.56), payable by the delivery to Sellers of immediately
available funds and (ii) issue in escrow (in accordance with Section 2.3 hereof)
for the benefit of Sellers 523,980 shares of exchangeable 6% junior preferred
stock of the Buyer in the aggregate face amount of $2,619,900 (the "Exchangeable
Preferred Stock") subject to the terms and conditions of that certain Junior
Preferred Stock Exchange Agreement; PROVIDED, HOWEVER, that Buyer shall
substitute cash for Exchangeable Preferred Stock with respect to certain Sellers
entitled to receive Exchangeable Preferred Stock hereunder in an aggregate face
amount less than $47,266 at Closing, and such Sellers shall accept such cash
consideration in lieu of the Exchangeable Preferred Stock.
2.3 ESCROW. At the Closing, Sellers and Buyer will enter into an
escrow agreement (the "Escrow Agreement"), relating to certain indemnification
obligations of Sellers arising under Article XI of this Agreement.
2.4 PURCHASE PRICE REDUCTION. The Purchase Price shall be reduced
at Closing on a dollar for dollar basis, by the amount of any prepayments or
other penalties or fees payable or incurred in connection with the refinancing
of the Company's existing Indebtedness.
ARTICLE III
CLOSING
3.1 CLOSING. The closing of the transactions contemplated herein
(the "Closing") shall be held at 10 a.m. New York City time on the Closing Date
at the offices of Xxxxxxxx Kill Xxxxx & Xxxxxxxx, P.C., 1251 Avenue of the
Americas, New York, New York, unless the Parties hereto otherwise agree.
3.2 DOCUMENTS TO BE DELIVERED. To effect the transfer referred to
in section 2.1 and the delivery of the consideration described in Section 2.2
hereof, Sellers and Buyer shall, on the Closing Date, deliver the following:
7
(a) Sellers shall deliver to Buyer certificate(s) evidencing up to
100% of the shares of Capital Stock, free and clear of any Encumbrances of any
nature whatsoever, duly endorsed in blank for transfer or accompanied by stock
powers duly executed in blank.
(b) Sellers and Buyer shall each deliver all documents required to
be delivered pursuant to Articles VII and VIII hereof.
(c) Buyer shall deliver immediately available funds as provided in
Section 2.2.
(d) All instruments and documents executed and delivered to Buyer
pursuant hereto shall be in form and substance, and shall be executed in a
manner, reasonably satisfactory to Buyer. All instruments and documents
executed and delivered to Sellers pursuant hereto shall be in form and
substance, and shall be executed in a manner, reasonably satisfactory to
Sellers.
(e) Buyer shall deliver to an escrow account pursuant to the
Escrow Agreement certificates in Sellers' names evidencing the Exchangeable
Preferred Stock, free and clear of any Encumbrances (except with respect to the
indemnification obligations of Sellers set forth herein) of any nature
whatsoever.
ARTICLE IVA
REPRESENTATIONS AND WARRANTIES OF SELLERS
AND THE COMPANY
Except as otherwise set forth in the Disclosure Schedule, each of the
Sellers and the Company hereby represent and warrant to Buyer as follows:
4A.1 ORGANIZATION OF SELLERS. Each Seller, which is not an
individual, is duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation. Sellers own of record and
beneficially all of the outstanding Capital Stock of the Company free and clear
of all Encumbrances.
4A.2 ORGANIZATION OF THE COMPANY. The Company is duly organized,
validly existing and in good standing under the laws of the State of California,
has full corporate power and authority to conduct its Business as it is
presently being conducted and as proposed to be conducted and to own and lease
its properties and Assets. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is necessary or required under applicable law as a result of the
conduct of the Business or the ownership of its Assets or properties and the
failure to so qualify would have an Adverse Effect. Each jurisdiction in which
the Company is qualified to do business as a foreign corporation is listed on
the Disclosure Schedule. The Company has authorized 500,000,000 shares of
Common Stock, no par value, 4,187,515 shares of which are issued and outstanding
8
and 300,000,000 shares of Preferred Stock, no par value, 149,636,004 shares of
which are outstanding. The Capital Stock constitutes all of the Equity
Interests of the Company, and all of the Company's outstanding shares of Capital
Stock have been duly authorized and validly issued and are fully paid and
non-assessable.
4A.3 AUTHORIZATION. Each Seller has all necessary corporate or
other power and authority, as the case may be, to enter into the Transaction
Documents and has taken all corporate or other action necessary to consummate
the transactions contemplated thereby and to perform its respective obligations
thereunder. The Company has all necessary corporate power and authority to
enter into the Transaction Documents and has taken all corporate action
necessary to consummate the transactions contemplated thereby and to perform its
obligations thereunder. As of the Closing Date, each of the Transaction
Documents has been duly executed and delivered by each Seller and the Company
and each Transaction Document shall be a legal, valid and binding obligation of
each Seller and the Company enforceable against each Seller and the Company in
accordance with its respective terms.
4A.4 SUBSIDIARIES. The Disclosure Schedule sets forth a complete
and accurate list of all of the Subsidiaries, all of which are, directly or
indirectly, wholly-owned by the Company. All references herein to the Company,
unless the context indicates otherwise, shall be deemed to mean the Company and
its Subsidiaries. The Disclosure Schedule also contains the jurisdiction of
incorporation of each of the Subsidiaries, each jurisdiction in which such
Subsidiary is qualified to do business and the number of shares of such
Subsidiary outstanding. The outstanding shares of such Subsidiaries have been
duly and validly authorized and issued, are fully paid and non-assessable, and
were issued pursuant to, and within the limitations contained in, appropriate
and effective permits and consents of each governmental authority from whom any
permit or consent was required by law, and the outstanding shares owned by the
Company are owned free and clear of any Encumbrances. There are no
subscriptions, options, warrants, calls, commitments or other rights of any kind
outstanding for the purchase of, nor any securities convertible or exchangeable
for, any securities of any of the Subsidiaries. Each of the Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
jurisdiction of its incorporation, with full corporate power to own its assets
and properties and to conduct the Business as now being conducted and as
proposed to be conducted and is duly qualified and in good standing to transact
business in each jurisdiction (listed in the Disclosure Schedule) where, by
virtue of its business carried on or properties or assets owned, it is required
to be so qualified.
4A.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the Balance Sheet
Date, with respect to the Company there has not been any:
(a) significant change in the Company's condition (financial or
otherwise), Assets, liabilities, working capital, reserves, earnings, Business
or prospects, in each case, outside the ordinary course of business and
consistent with past practices;
9
(b) (i) except for normal periodic increases in the ordinary
course of business consistent with past practice, increase in the compensation
payable or to become payable by the Company to any of its officers, employees or
agents (collectively, "Personnel") whose total compensation for services
rendered to the Company is currently at an annual rate of more than $75,000,
(ii) any bonus, incentive compensation, service award or other like benefit
granted, made or accrued, contingently or otherwise, for or to the credit of any
of the Personnel, (iii) any employee welfare, pension, retirement,
profit-sharing or similar payment or arrangement made or agreed to by the
Company for any Personnel except pursuant to the existing plans and arrangements
described in the Disclosure Schedule or (iv) any new employment agreement to
which the Company is a party;
(c) addition to or modification of the employee benefit plans,
arrangements or practices described in the Disclosure Schedule affecting
Personnel other than (i) contributions made for 1994 in accordance with the
normal practices of the Company or (ii) the extension of coverage to other
Personnel who became eligible after the Balance Sheet Date;
(d) sale, assignment or transfer of any of the Assets, other than
in the ordinary course of business and consistent with past practices;
(e) cancellation of any Indebtedness owed to the Company or waiver
of any rights of substantial value to the Company, whether or not in the
ordinary course of business;
(f) amendment, cancellation or termination of any Contract,
license or other instrument material to the assets, sales, Business, prospects,
earnings or condition (financial or otherwise) of the Company;
(g) capital expenditure or execution of any lease or incurring of
liability therefor by the Company not in the ordinary course of business;
(h) failure to repay any obligation of the Company other than
those obligations disputed by the Company in good faith, which disputed
obligations have been listed on the Disclosure Schedule;
(i) failure to operate the Business in the ordinary course and
consistent with past practices and to preserve the Business intact, use its
commercially reasonable efforts to keep available to Buyer the services of
substantially all of the Personnel in a manner consistent with past practices,
or to preserve for Buyer the goodwill of the Company's suppliers, customers and
others having business relations with it;
(j) change in accounting methods or practices by the Company
affecting its assets, earnings, reserves, working capital, prospects,
liabilities or Business;
10
(k) revaluation by the Company of any of its Assets or properties,
including without limitation, writing off notes or accounts receivable other
than in the ordinary course of business and consistent with past practices;
(l) damage, destruction or loss (whether or not covered by
insurance) adversely affecting the Facilities, properties, assets, Business,
condition (financial or otherwise) or prospects of the Company in an amount
greater than $25,000;
(m) mortgage, pledge or other Encumbrance of any Assets or
properties of the Company other than in the ordinary course of business and
consistent with past practices;
(n) declaration, setting aside or payment of dividends or
distributions in respect of any Capital Stock or any redemption, purchase or
other acquisition of any Capital Stock;
(o) issuance by the Company of, or commitment of the Company to
issue, any shares of stock or other equity securities or obligations or
securities convertible into or exchangeable for shares of Capital Stock;
(p) Indebtedness incurred by the Company for borrowed money or any
commitment to borrow money entered into by the Company, or any loans made or
agreed to be made by the Company except in the ordinary course of business and
consistent with past practices.
(q) liabilities incurred not in the ordinary course of business
and consistent with past practice, or any increase or change in any assumptions
underlying or methods of calculating any bad debt, contingency or other
reserves;
(r) payment, discharge or satisfaction of any liabilities other
than the payment, discharge or satisfaction in the ordinary course of business
and consistent with past practice of liabilities reflected or reserved against
in the Balance Sheet or incurred in the ordinary course of business and
consistent with past practice since the Balance Sheet Date;
(s) activity which has resulted or may, to the Best of the
Company's Knowledge with respect to activities of third parties only, result
with the passage of time or the giving of notice or otherwise, result in the
acceleration or delay of the collection of its accounts or notes receivable or
any delay in the payment of its accounts payable, in each case as compared with
its custom and practice in the conduct of the Business immediately prior to the
Balance Sheet Date;
(t) loan or advance of any of the Company's funds or other
property to, or guarantee for the benefit of, or any Investment of any of its
funds or other property in, any other Person;
11
(u) receipt of any written notice by the Company or to the Best of
the Company's Knowledge any indication, whether in writing or otherwise (i) from
any of its suppliers to the effect that such supplier may stop, or decrease the
rate of, supplying products or services to the Company; (ii) from any of its
customers to the effect that such customer may stop, or decrease the rate of,
buying products or services from the Company; or (iii) with respect to any of
its significant suppliers or customers to the effect that any of such suppliers
or customers have or are reasonably likely to experience an event or condition
which may have an Adverse Effect on such suppliers or customers;
(v) other event or condition of any character outside the ordinary
course of business, which, in any one case or in the aggregate, has resulted in
an Adverse Effect or any event or condition known to the Company or any of the
Sellers which could, in any one case or in the aggregate, result in an Adverse
Effect;
(w) agreement by the Company or, to the Best of the Company's,
Knowledge, by any of its Representatives to do any of the foregoing.
4A.6 TITLE TO ASSETS, ETC.
(a) Except as set forth on the Disclosure Schedule, the Company
has good and marketable fee simple (where applicable) title to, or valid
leasehold interest in, all the assets reflected on the Balance Sheet or acquired
in the ordinary course of business since the Balance Sheet Date (the "Assets").
(b) None of the Assets are subject to any Encumbrances.
(c) The Assets constitute all of the assets and rights which are
necessary for the conduct of the Business as currently conducted. The Company
has performed all the obligations required to be performed by it with respect to
all Assets leased by it through the date hereof.
(d) The Company enjoys exclusive possession of all Facilities
owned or leased by it, and such Facilities are not subject to any Encumbrances,
encroachments, building or use restrictions, exceptions, reservations or
limitations which in any respect interfere with or impair the present and
continued use thereof in the usual and normal conduct of the Business.
(e) There are no pending or to the Best of the Company's
Knowledge, threatened condemnation proceedings relating to any of the
Facilities.
(f) The real property improvements (including leasehold
improvements), equipment and other tangible assets owned or used by the Company
at the Facilities are, to the Best of the Company's Knowledge, structurally
sound with no defects. None of said
12
improvements, equipment and other assets is subject to any commitment or other
arrangement for their sale or use by any affiliate of the Company or third
parties.
4A.7 CONDITION OF TANGIBLE ASSETS. The Facilities and Fixtures and
Equipment are to the Best of the Company's Knowledge in good operating condition
and repair and are in substantial compliance with all applicable laws,
ordinances, orders, regulations and other requirements (including applicable
zoning, environmental, motor vehicle safety or standards, occupational safety
and health laws and regulations) relating thereto currently in effect.
4A.8 CONTRACTS AND COMMITMENTS. Except as set forth on the
Disclosure Schedule, the Company is not a party to any written or oral:
(a) commitment, contract, note, loan, evidence of Indebtedness,
purchase order or letter of credit involving any obligation or liability on the
part of the Company of more than $75,000 and not cancelable (without liability)
within 60 days;
(b) lease of real property (the Disclosure Schedule indicates with
respect to each lease listed on the Disclosure Schedule the term, annual rent,
renewal options, approximate number of square feet leased);
(c) lease of personal property involving any annual expense in
excess of $25,000 and not cancelable (without liability) within 60 days (the
Disclosure Schedule indicates with respect to each lease listed on the
Disclosure Schedule a general description of the leased items, term, annual rent
and renewal options);
(d) governmental or regulatory licenses or permits required to
conduct the Business as presently conducted and as proposed to be conducted;
(e) contracts or agreements containing covenants limiting the
freedom of the Company to engage in any line of business or compete with any
Person;
(f) employment contracts, including without limitation, contracts
to employ executive officers and other contracts with officers or directors of
the Company, and contracts with independent contractors on a full-time,
part-time, consulting or other basis;
(g) pension, profit sharing, stock option, stock appreciation,
employee stock purchase or other plan or arrangement providing for deferred or
other compensation to employees or any other employee benefit, welfare or stock
plan or arrangement, or any contract with any labor union or any severance
agreement;
(h) contract pursuant to which it has advanced or loaned funds or
made any Investments of its funds or other property or Assets, or agreed to
advance or loan funds to any
13
other Person or to do any of the foregoing other than advances to growers in the
ordinary course of business;
(i) contract or indenture relating to the mortgaging, pledging, or
otherwise placing an Encumbrance on any Assets (other than any Encumbrance which
will be extinguished prior to the Closing Date);
(j) assignment, license, indemnification or other contract with
respect to any intangible property (including any Proprietary Right);
(k) independent or service representative or distributorship
agreement; or
(l) contracts or financial commitments of more than $50,000 and
not cancelable (without liability) within sixty days not otherwise described
above or listed in the Disclosure Schedule (including without limitation
purchase orders, franchise agreements and undertakings or commitments to any
governmental or regulatory authority) relating to the Business or otherwise
affecting the Business not in the ordinary course of business;
The Company has performed all obligations required to be performed by
it under each Contract and it is not (and, to the Best of the Company's
Knowledge, no other party is) in breach or violation of, or default under any of
the Contracts or other instruments, obligations, evidences of Indebtedness or
commitments described in (a)-(l) above. To the Best of the Company's Knowledge,
no event has occurred which, with the passage of time or the giving of notice
(or both), would result in a default, breach or event of noncompliance under any
obligation of the Company pursuant to any Contract. The Company does not have a
present expectation or intention of not fully performing any obligation pursuant
to any Contract. Each Contract described on the Disclosure Schedule is, to the
Best of the Company's Knowledge, legal, valid, binding and enforceable in
accordance with its terms.
With respect to each Contract which is a lease of personal property,
the Company holds a valid and existing leasehold interest under such lease for
the term set forth with respect to such lease an the Disclosure Schedule.
4A.9 NO CONFLICT OR VIOLATION. Neither the execution and delivery
of the Transaction Documents nor the consummation of the transactions
contemplated thereby will result in (a) a violation of or a conflict with any
provision of the Certificate of Incorporation or Bylaws of any Seller, which is
not an individual, or the Company, (b) a breach of, or a default under, any term
or provision of any Contract, agreement, Indebtedness, lease, Encumbrance,
commitment, license, franchise, permit, authorization or concession to which any
Seller or the Company is a party or by which any of the Assets are bound, (c) a
violation by Sellers or the Company of any statute, rule, regulation, ordinance,
code, order, judgment, writ, injunction, decree or award, or (d) an imposition
of any Encumbrance, restriction or charge on the Business, the Company or on any
of the Assets.
14
4A.10 CONSENTS AND APPROVALS. Except as set forth on the Disclosure
Schedule, no consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority, or any other Person
is required to be made or obtained by Sellers or the Company in connection with
the execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby.
4A.11 FINANCIAL STATEMENTS. Sellers have heretofore delivered to
Buyer the Balance Sheet and Financial Statements. Except as otherwise set forth
therein, the Financial Statements are complete, are in accordance with the books
and records of the Company, accurately reflect the assets, liabilities and
financial condition and results of operations indicated thereby in accordance
with generally accepted accounting principles consistently applied, and contain
and reflect all necessary adjustments for a fair representation of the Financial
Statements as of the dates and for the periods covered thereby.
4A.12 LITIGATION. Except as set forth on the Disclosure Schedule,
there is no action, order, writ, injunction, judgment or decree outstanding or
claim, suit, litigation, proceeding, labor dispute (other than routine grievance
procedures or routine, uncontested claims for benefits under any benefit plans
for Personnel), arbitral action or investigation (collectively, "Actions")
pending or anticipated by the Company or, to the Best of the Company's
Knowledge, threatened against, relating to or affecting (i) the Company, (ii)
any benefit plan for Personnel or any fiduciary or administrator thereof or
(iii) the transactions contemplated by the Transaction documents. The Company
is not in default with respect to any judgment, order, writ, injunction or
decree of any court or governmental agency, and there are no unsatisfied
judgments against the Company or the Business. Management of the Company
believes there is not a reasonable likelihood of an adverse determination of any
pending Actions which could, individually or in the aggregate, result in an
Adverse Effect.
4A.13 LABOR MATTERS. Except as set forth on the Disclosure
Schedule, the Company is not a party to any labor agreement with respect to its
employees with any labor organization, group or association. To the Best of the
Company's Knowledge since January 1, 1990, the Company has not experienced any
attempt by organized labor or its representatives to make the Company conform to
demands of organized labor relating to its employees or to enter into a binding
agreement with organized labor that would cover the employees of the Company.
The Company is in substantial compliance with all applicable laws respecting
employment practices, terms and conditions of employment and wages and hours and
is not engaged in any unfair labor practice. There is no unfair labor practice
charge or complaint against the Company pending before the National Labor
Relations Board or any other governmental agency arising out of the Company's
activities, and the Company has no knowledge of any facts or information which
would give rise thereto; there is no labor strike or labor disturbance pending
or threatened against the Company nor is any grievance currently being asserted;
and since January 1, 1990, the Company has not experienced a work stoppage or
other labor difficulty.
15
4A.14 LIABILITIES. To the Best of the Company's Knowledge, the
Company has no liabilities or obligations (absolute, accrued, contingent or
otherwise) except (i) liabilities which are reflected and adequately reserved
against on the Balance Sheet, (ii) liabilities incurred in the ordinary course
of business and consistent with past practice since the Balance Sheet Date, and
(iii) liabilities arising under Contracts, letters of credit, purchase orders,
licenses, permits, purchase agreements and other agreements, business
arrangements and commitments described in the Disclosure Schedule or which are
of the type described in Section 4A.8 but which, because of the dollar amount or
other qualifications, are not required to be listed in the Disclosure Schedule.
4A.15 COMPLIANCE WITH LAW. The Company and the conduct of the
Business are in substantial compliance with all applicable laws, statutes,
rules, ordinances and regulations, whether federal, state or local. The Company
has not received any written notice to the effect that, or to the Best of the
Company's Knowledge, otherwise been advised that, it is not in compliance with
any of such statutes, rules, regulations, orders, ordinances or other laws, and
the Company has no reason to anticipate that any presently existing
circumstances are likely to result in violations of any such laws, statutes,
rules, ordinances and regulations.
4A.16 NO BROKERS. Except for that certain fee to be paid by Buyer
to Lazard Freres & Co. as set forth in the Disclosure Schedule, neither the
Company nor any affiliate of the Company has entered into or will enter into any
Contract, agreement, arrangement or understanding with any Person which will
result in the obligation of Buyer to pay any finder's fee, brokerage commission
or similar payment in connection with the transactions contemplated by the
Transaction Documents.
4A.17 NO OTHER AGREEMENTS TO SELL THE ASSETS OR THE COMPANY.
Neither any of the Sellers nor the Company have any legal obligation, absolute
or contingent, to any other Person to sell the Assets, to sell any Capital Stock
or to effect any merger, consolidation or other reorganization of the Company or
to enter into any agreement with respect thereto.
4A.18 PROPRIETARY RIGHTS. All of the Company's (i) registrations of
trademarks and of other marks, trade names or other trade rights, and all
pending applications for any such registrations, (ii) patents and copyrights and
all pending applications therefor, and (iii) other trademarks and other marks,
trade names and other trade rights and all other trade secrets, designs, plans,
specifications and other proprietary rights, whether or not registered,
(collectively, "Proprietary Rights") are listed in the Disclosure Schedule. The
Proprietary Rights listed in the Disclosure Schedule are all those used in the
Business as presently conducted and as proposed to be conducted. No Person has
a right to receive a royalty or similar payment in respect of any Proprietary
Rights pursuant to any contractual arrangements entered into by the Company, and
no Person otherwise has a right to receive a royalty or similar payment in
respect of any such Proprietary Rights. The Company has no licenses granted by
or to it or no other agreements to which it is a party, relating in whole or in
part to any of the Proprietary Rights. The Company's use of the Proprietary
Rights is not infringing upon or otherwise violating the
16
rights of any third party in or to such Proprietary Rights, and no proceedings
have been instituted against or notices received by the Company that are
presently outstanding alleging that the Company's use of its Proprietary Rights
infringes upon or otherwise violates any rights of a third party in or to such
Proprietary Rights. To the Best of the Company's Knowledge, the Proprietary
Rights have not been infringed or misappropriated by any other Person.
Except as set forth on the Disclosure Schedule, the Company owns and
possesses all right, title and interest in and to (or as indicated on the
Disclosure Schedule, has the right to use pursuant to a valid and enforceable
license) all Proprietary Rights, in each case free and clear of all
Encumbrances, and to the Best of the Company's Knowledge, the Company has taken
all necessary actions to maintain and protect the Proprietary Rights which it
owns or uses. The consummation of the transactions contemplated by the
Transaction Documents will not have an adverse effect on any Proprietary Right.
4A.19 EMPLOYEE BENEFIT PLANS
(i) MULTIEMPLOYER PLANS. The Company does not have any obligation
to contribute to (or any other liability, including current or potential
withdrawal liability, with respect to) any "multiemployer plan" (as defined in
Section 3(37) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")).
(ii) RETIREE WELFARE PLANS. The Company does not maintain or have
any obligation to contribute to (or any other liability with respect to) any
plan or arrangement whether or not terminated, which provides medical, health,
life insurance or other welfare-type benefits for current or future retired or
terminated employees (except for limited continued medical benefit coverage
required to be provided under Section 4980B of the Code or as required under
applicable state law).
(iii) DEFINED BENEFIT PLANS. The Company does not maintain,
contribute to or have any liability under (or with respect to) any employee plan
which is a tax-qualified "defined benefit plan" (as defined in Section 3(35) of
ERISA), whether or not terminated.
(iv) DEFINED CONTRIBUTION PLANS. The Company does not maintain,
contribute to or have any liability under (or with respect to) any employee plan
which is a tax-qualified "defined contribution plan" (as defined in Section
3(34) of ERISA), whether or not terminated.
(v) OTHER PLANS. Except as set forth in the Disclosure Schedule,
the Company does not maintain, contribute to or have any liability under (or
with respect to) any plan or arrangement providing benefits to current or former
employees, including any bonus plan, plan for deferred compensation, employee
health or other welfare benefit plan or other arrangement, whether or not
terminated. Such plans and other arrangements are referred to herein as the
"Other Plans."
17
(vi) PAYMENTS AND ACCRUALS. With respect to the "defined
contribution plan" (as defined in Section 3(34) of ERISA) if any and the Other
Plans (the "PLANS"), all required payments, premiums, contributions,
reimbursements or accruals for all periods ending prior to or as of the Closing
Date shall have been made or properly accrued as of the Balance Sheet Date.
None of the plans has any material unfunded liabilities which are not reflected
on the Balance Sheet.
(vii) COMPLIANCE. The Plans and all related trusts, insurance
contracts and funds have been maintained, funded and administered in compliance
with the applicable provisions of ERISA, the Code and other applicable laws.
Each Plan which is intended to be qualified under Section 401(a) of the Code (i)
has been amended to reflect all requirements of the Tax Reform Act of 1986 ("TRA
86") and all subsequent legislation which is required to be adopted prior to the
end of the TRA 86 remedial amendment period and (ii) has received from the
Internal Revenue Service a favorable determination letter which considers the
terms of the Plan as amended for such tax law changes. Neither the Company nor
any trustee or administrator of the Plans has engaged in any transaction with
respect to the Plans which could subject the Company or to the Best of the
Company's Knowledge, any trustee or administrator of the Plans, or any party
dealing with any such Plan, nor do the transactions contemplated by this
Agreement constitute transactions which could subject any such party, to either
a civil penalty assessed pursuant to Section 502(i) of ERISA or the tax or
penalty on prohibited transactions imposed by Section 4975 of the Code. To the
Best of the Company's Knowledge no actions, suits or claims with respect to the
assets of the Plans (other than routine claims for benefits) are pending or
threatened which could result in or subject the Company to any liability, and
there are no circumstances which could give rise to or be expected to give rise
to any such actions, suits or claims.
(viii) CONTROLLED GROUP. Neither the Company nor the Sellers
incurred any liability to the Pension Benefit Guaranty Corporation ("PBGC"), the
Internal Revenue Service, any multiemployer plan or otherwise with respect to
any Plan or with respect to any employee pension benefit plan currently or
previously maintained by members of the controlled group of companies (as
determined in Sections 414(b) and (c) of the Code (the "CONTROLLED GROUP"))
which includes the Company and that has not been satisfied in full, and to the
Best of the Company's Knowledge, no condition exists that presents a risk to the
Company or any member of the Controlled Group of incurring such a liability for
premiums due to the PBGC.
(ix) CORRECT COPIES. The Sellers have provided the Buyer with true
and complete copies of all documents pursuant to which the Plans are maintained
and administered and the most recent annual reports (Form 5500 and attachments)
for the Plans.
4A.20 TRANSACTIONS WITH CERTAIN PERSONS. Neither any officer,
director or employee of Sellers or the Company nor any member of any such
person's immediate family is presently a Party to any transaction with the
Company relating to the Business, including without limitation, any contract,
agreement or other arrangement (i) providing for the furnishing of
18
services by, (ii) providing for the rental of real or personal property from, or
(iii) otherwise requiring payments to (other than for services as officers,
directors or employees of the Company) any such person or corporation,
partnership, trust or other entity in which any such person has a substantial
interest as a shareholder, officer, director, trustee or partner.
4A.21 TAX MATTERS. Except as set forth in the attached Disclosure
Schedule:
(i) the Company has filed all Tax Returns which are required to be
filed with respect to all periods ending at or prior to the Closing Date
and each such Tax Return is, to the Best of the Company's Knowledge,
correct and complete, the Company has paid all Taxes (whether or not shown)
due and owing by it as of the Closing Date (whether or not shown on any Tax
Return) and has withheld and paid over all Taxes which it is obligated to
withhold from amounts paid or owing to any employee, independent
contractor, shareholder, creditor or other third party;
(ii) no Tax audits are pending or being conducted with respect to
the Company;
(iii) no information related to Tax matters has been requested by
any Taxing authority, and the Company has not received notice indicating an
intent to open an audit or other review from any Taxing authority and
neither the Company nor any officer or director thereof expects or has
reason to expect any authority to assess any additional Taxes for any
period for which Tax Returns have been filed;
(iv) the Company has no knowledge of any asserted claim (whether in
writing or otherwise) by any Taxing authority concerning the Company's
liability for Taxes;
(v) no claim has ever been made by any jurisdiction in which the
Company does not file Tax Returns to the effect that the Company is or may
be subject to any Tax imposed by that jurisdiction;
(vi) the Company has not waived any statute of limitations in
respect of Taxes or agreed to an extension of time with respect to any Tax
assessment or deficiency;
(vii) the Company is not a party to any agreement that could
obligate it to make any payments that would not be deductible pursuant to
Section 28OG of the Code and the Company has not filed a consent pursuant
to section 341(f) of the Code;
(viii) the Company has delivered to Buyer correct and complete copies
of all federal, state and local income Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to by the
Company.
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(ix) the Company is not a party to any Tax sharing or allocation
agreement, and has no liability for the Taxes of any Person (other than the
Company) under Section 1.1502-6 of the Treasury Regulations (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise.
(x) the unpaid Taxes of the Company do not exceed, as of the
Balance Sheet Date, the reserve for Tax liabilities set forth on the
Balance Sheet and such unpaid taxes, as of the Closing Date, do not exceed
that reserve adjusted to take account of the passage of time through the
Closing Date in accordance with the Company's past custom and practice in
computing its Taxes and filing Tax Returns.
4A.22 SEVERANCE ARRANGEMENTS. The Company has not entered into any
written, or to the Best of the Company's Knowledge, oral severance or similar
arrangement in respect of any present or former Personnel that will result in
any obligation (absolute or contingent) of Buyer or the Company to make any
payment in excess of $30,000 to any present or former Personnel following
termination of employment.
4A.23 INSURANCE. The Disclosure Schedule contains a complete and
accurate list of all policies or binders of fire, casualty, liability, title,
worker's compensation, dram shop, liquor liability, earthquake, and other forms
of insurance (showing as to each policy or binder the carrier, policy number,
coverage limits, expiration dates, annual premiums and a general description of
the type of coverage provided) maintained by the Company on its Business,
Facilities, property, Assets or Personnel. All of such policies are sufficient
for compliance with all requirements of law and of all Contracts to which the
Company is a party. The Company is not in default under any of such policies or
binders, and the Company has not failed to give any notice or to present any
claim under any such policy or binder in a due and timely fashion nor, to the
Best of the Company's Knowledge, have any facts or events occurred which
necessitate the giving of notice or filing of a claim with respect to any such
policy. To the Best of the Company's Knowledge, there are no facts upon which
an insurer might be justified in reducing coverage or increasing premiums on
existing policies or binders. There are no outstanding unpaid claims under any
such policies or binders. Such policies and binders are in full force and
effect on the date hereof, and the Company shall use its best efforts to keep
such policies and binders in full force and effect through the Closing Date.
4A.24 ACCOUNTS RECEIVABLE. The accounts receivable reflected in the
Balance Sheet, and all accounts receivable arising since the Balance Sheet Date,
represent bona fide claims against debtors for sales, services performed or
other charges arising on or before the date hereof, and all the goods delivered
and services performed which gave rise to said accounts were delivered or
performed in substantial compliance with the applicable orders, Contracts or
customer requirements. Said accounts receivable are subject to no defenses,
counterclaims or rights of set off and are fully collectible in the ordinary
course of business without cost to the Company in collection efforts therefor
except, in the case of accounts receivable shown on the Balance Sheet, to the
extent of the appropriate reserves set forth on the Balance Sheet, and, in the
20
case of accounts receivable arising since the Balance Sheet Date, to a
reasonable allowance for bad debts which does not, to the Best of the Company's
Knowledge, reflect a rate of bad debts more than that reflected by the reserve
for bad debts on the Balance Sheet.
4A.25 INVENTORIES. The values at which inventories are shown on the
Balance Sheet have been determined in accordance with the normal valuation
policy of the Company, consistently applied and in accordance with generally
accepted accounting principles. The inventories (and items of inventory
acquired or manufactured subsequent to the Balance Sheet Date) consist only of
items of quality and quantity commercially usable and salable in the ordinary
course of business, except for any items of obsolete material or material below
standard quality, all of which have been written down to realizable market
value, or for which adequate reserves have been provided, and the present
quantities of all inventories are reasonable in the present circumstances of the
Business.
4A.26 PURCHASE COMMITMENTS AND OUTSTANDING BIDS. As of the date of
this Agreement, the aggregate of all accepted and unfulfilled orders for the
sale of merchandise entered into by the Company does not exceed the amount set
forth on the Disclosure Schedule, and the aggregate of all Contracts or
commitments for the purchase of supplies by it does not exceed the amount set
forth on the Disclosure Schedule, all of which orders, Contracts and commitments
were made in the ordinary course of business and consistent with past practices.
As of the date of this Agreement, there are no claims against the Company to
return merchandise by reason of alleged overshipments, defective merchandise or
otherwise, or of merchandise in the hands of customers under an understanding
that such merchandise would be returnable, in either such case, in excess of the
amount set forth on the Disclosure Schedule. To the Best of the Company's
Knowledge, no outstanding purchase or outstanding lease commitment of the
Company presently is in excess of the normal, ordinary and usual requirements of
its Business or was made at any price in excess of the now current market price
or contains terms and conditions more onerous than those usual and customary in
the Business. There is no outstanding bid, proposal, Contract or unfilled order
of the Company which will or could, if accepted, have an Adverse Effect.
4A.27 PAYMENTS. The Company has not, directly or indirectly, paid
or delivered any fee, commission or other sum of money or item or property,
however characterized, to any finder, agent, government official or other party,
in the United States or any other country, which is in any manner related to the
Business which Sellers or the Company knows, should know or has reason to
believe to have been illegal under any federal, state or local laws of the
United States or any other country having jurisdiction; and the Company has not
participated, directly or indirectly, in any boycotts or other similar practices
affecting any of its actual or potential customers.
4A.28 CUSTOMERS AND SUPPLIERS. The Disclosure Schedule contains a
complete and accurate list of (i) the ten (10) largest customers of the Company
in terms of sales during the Company's last fiscal year, showing the approximate
total sales by the Company to each such
21
customer during such fiscal year; (ii) the ten (10) largest suppliers of the
Company in terms of purchases during the Company's last fiscal year, showing the
approximate total purchases by the Company from each such supplier during such
fiscal year. Since the Balance Sheet Date, there has been no adverse change in
the business relationship of the Company with any of such ten largest customers
or suppliers referred to in clauses (i) and (ii) above.
4A.29 COMPLIANCE WITH LEGISLATION REGULATING ENVIRONMENTAL QUALITY.
There are no toxic wastes or other toxic or hazardous substances or materials
being stored or otherwise held on, under or about any of the Facilities by the
Company or, to the Best of the Company's Knowledge, by any other party. The
Facilities have been maintained in substantial compliance with all federal,
state, local and foreign environmental protection, occupational, health and
safety or similar laws, statutes, ordinances, restrictions, licenses and local
environmental protection, occupational, health and safety or similar laws,
statutes, ordinances, restrictions, licenses and regulations, including those
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous or
otherwise regulated materials, substances or wastes, chemical substances or
mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation,
and also including, but not limited to, the Federal Water Pollution Control Act
(33 U.S.C. Section 1251 ET SEQ.), Resource Conservation Recovery Act (42 U.S.C.
Section 6901 ET SEQ.), Safe Drinking Water Act (21 U.S.C. Sections 349, 42
U.S.C. Sections 201, 300f), Toxic Substances Control Act (15 U.S.C. Section 2601
ET SEQ.), Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
ET SEQ.), California Health & Safety Code (Section 25100 ET SEQ., Section 39000
ET SEQ.), and California Water Code (Section 13000 ET SEQ.). The Company has
not received any written notice, report or other information to the effect that,
or to the Best of the Company's Knowledge, otherwise been advised regarding any
liabilities or potential liabilities it may have (whether accrued, absolute,
contingent, unliquidated or otherwise), including any investigatory, remedial or
corrective obligations, arising under any environmental, health or safety
requirement.
4A.30 REAL ESTATE.
(a) OWNED PROPERTIES. The Disclosure Schedule lists and describes
briefly all Real Estate that the Company owns. Except as otherwise described on
the Disclosure Schedule or in the title reports or summaries and surveys
provided to Buyer by Sellers or pursuant to Section 6.7, with respect to each
such parcel (including the improvements thereon) of owned Real Estate:
(i) the Company owns such parcel in fee simple and such parcel is
free and clear of any Encumbrance;
(ii) there are no pending or, to the Best of the Company's
Knowledge, threatened condemnation proceedings, lawsuits,
violations of applicable
22
law or administrative actions relating to such parcel or other
matters affecting adversely the current use, occupancy, or
value of such parcel;
(iii) such parcel does not serve any adjoining property for any
purpose to the Best of the Company's Knowledge, inconsistent
with the current use of the land by the Company, and the
property is not located within any flood plain or subject to
any similar type of restriction for which any permits or
licenses necessary to the use thereof have not been obtained;
(iv) there are no leases, subleases, licenses, concessions, or
other agreements, written or, to the Best of the Company's
Knowledge, oral, granting to any Person the right of use or
occupancy of any portion of such parcel;
(v) there are no outstanding options or rights of first refusal to
purchase or lease such parcel, or any portion thereof or
interest therein;
(vi) no Person is in possession of such parcel;
(vii) the Company is not restricted in any adverse way in the
current use of its water rights, water supply or mineral
rights, and such water rights and supply are sufficient for
the current operation of the Business;
(viii) the buildings, improvements and other property thereon have
received all approvals of governmental authorities (including
certificates of occupancy, permits and licenses) required in
connection with the Business and have been operated and
maintained in compliance with all applicable legal
requirements; and
(ix) the buildings, improvements and other property thereon are
supplied with utilities and other services reasonably
necessary for the current operation of the Business with
respect thereto (including any necessary gas, electricity,
water (including without limitation, the use and right to a
water supply sufficient for the current operation of the
Business), irrigation, sanitary and storm sewer service).
(b) LEASED PROPERTIES. The Disclosure Schedule lists and
describes briefly all Real Estate that is used or occupied, but not owned, by
the Company (with respect to the Business) and the leases, subleases and
agreements by which such Real Estate is used and occupied. Except as otherwise
described on such Disclosure Schedule, with respect to each such parcel of
leased Real Property:
23
(i) the leases and subleases described on the Disclosure Schedule
constitute all of the leases, subleases and agreements under
which the Company holds any interest (other than a fee
interest) in any Real Estate;
(ii) each such lease, sublease or agreement is legal, valid,
binding, enforceable and in full force and effect, is fully
assignable to the Buyer without obtaining any required consent
or approval from any Person, and will continue to be legal,
valid, binding, enforceable and in full force and effect on
identical terms after the Closing other than by reason of a
change of law and except as such unenforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally;
(iii) the Company and, to its knowledge, any other party to any such
lease, sublease or agreement is not in breach or default
thereof, and to the Best of the Company's Knowledge, no
condition or circumstance exists or is threatened which, with
notice or the lapse of time, or both, would constitute such a
breach or default or permit termination, modification or
acceleration thereof or thereunder;
(iv) no party to any such lease, sublease or agreement has
repudiated any provision thereof;
(v) there are no disputes, oral agreements or forbearance programs
in effect with respect to the Company or, to the Best of the
Company's Knowledge, with respect to any third party, in
either case, as to any such lease, sublease or agreement;
(vi) no such lease, sublease or agreement has been modified in any
material respect, except to the extent disclosed in the
Disclosure Schedule;
(vii) the Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in any
leasehold or sub-leasehold;
(viii) the portions of buildings, improvements and other property
thereon leased by the Company have received all approvals of
governmental authorities (including certificates of occupancy,
permits and licenses) required in connection with the Business
as presently conducted and have been operated and maintained
in compliance with all applicable legal requirements;
(ix) the portions of buildings, improvements and other property
thereon leased by the Company are supplied with utilities and
other services reasonably
24
necessary for the Business as presently conducted with respect
thereto (including any necessary gas, electricity, water
(including without limitation, the use and right to a water
supply sufficient for the Business), irrigation, sanitary and
storm sewer service);
(x) there are no pending or, to the Best of the Company's
Knowledge, threatened condemnation proceedings, or
administrative actions relating thereto or other matters
affecting adversely the Company's current use, occupancy, or
value of such parcel;
(xi) as to each parcel, the land and improvements thereon does not
serve any adjoining property for any purpose to the Best of
the Company's Knowledge, inconsistent with the current use of
such land by the Company, and the property is not located
within any flood plain or subject to any similar type
restriction for which any permits or licenses necessary to the
use thereof have not been obtained; and
(xii) other than documents described on the Disclosure Schedule,
there are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any Person the
right of use or occupancy of any portion of such parcel which
the Company is entitled to occupy, and no Person (other than
the Company) is in possession of any such portion of any such
parcel.
4A.31 MISSTATEMENTS OR OMISSIONS. No representations or warranties
by any of Sellers or the Company in this Agreement, the Transaction Documents or
any exhibit, certificate or schedule furnished to Buyer pursuant hereto and
thereto, contains or will contain any untrue statement of fact, or omits or will
omit to state any fact necessary to make the statements or facts contained
therein not misleading. Sellers and the Company have disclosed all material
events, conditions and facts affecting the Business, assets, properties,
Facilities, earnings, prospects and condition (financial or otherwise) of the
Company as of the Closing Date.
4A.32 PURCHASE ARRANGEMENTS. Except for X'Xxxxx, none of the
Sellers possesses any specific knowledge of or information relating to the terms
of any supply or purchase arrangement, contract or similar commitment which the
Company has, at any time, entered or considered entering into with any customer
or supplier.
25
ARTICLE IVB
REPRESENTATIONS AND WARRANTIES OF THE LENDER SELLERS
Each of the parties listed on Schedule 14.14A hereto (collectively,
the "Lender Sellers") hereby represents and warrants to the Buyer as follows:
4B.1 ORGANIZATION OF SUCH LENDER SELLER. Such Lender Seller, to
the extent that it is not an individual, is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization. Such
Lender Seller owns of record the Capital Stock of the Company identified
opposite its name on Exhibit 14.14(A) free and clear of all Encumbrances.
4B.2 AUTHORIZATION. Such Lender Seller has all necessary corporate
or other power and authority, as the case may be, to enter into the Transaction
Documents to which it is a party and has taken all corporate or other action
necessary to consummate the transactions contemplated thereby and to perform its
respective obligations thereunder. As of the Closing Date, each of the
Transaction Documents to which such Lender Seller is a party has been duly
executed and delivered by each such Lender Seller and each such Transaction
Document to which Lender Seller is a party shall be a legal, valid and binding
obligation of such Lender Seller in accordance with its respective terms.
4B.3 NO CONFLICT OR VIOLATION. Neither the execution and delivery
of the Transaction Documents to which such Lender Seller is a party nor the
consummation of the transactions contemplated thereby will result in (a) if such
Lender Seller is a corporation, a violation of or a conflict with any provision
of such Lender Seller's certificate of incorporation, articles of incorporation
or bylaws, (b) a breach of, or a default under, any term or provision of any
contract, agreement, Indebtedness, lease, Encumbrance, commitment, license,
franchise, permit, authorization or concession to which such Lender Seller is a
party or (c) a violation by such Lender Seller of any statute, rule, regulation,
ordinance, code, order, judgment, writ, injunction, decree or award binding on
such Lender Seller.
4B.4 CONSENTS AND APPROVALS. Except as set forth on the Disclosure
Schedule, no consent, approval, authorization of, or declaration, filing or
registration with, any governmental or regulatory authority, or any other
Person, is required to be made or obtained by such Lender Seller in connection
with the execution, delivery or performance by such Lender Seller of the
Transaction Documents to which such Lender Seller is a party.
4B.5 NO OTHER AGREEMENTS TO SELL THE COMPANY. Such Lender Seller
has no legal obligation, absolute or contingent, to any other Person, to sell
any Capital Stock or to effect any merger, consolidation or other reorganization
of the Company or to enter into any agreement with respect thereto.
26
4B.6 TRANSACTIONS WITH CERTAIN PERSONS. No officer, director or
employee of such Lender Seller nor any Member of any such Person's immediate
family is presently a Party to any transaction with the Company relating to the
Business, including without limitation, any contract, agreement or other
arrangement (i) providing for the furnishing of services by, (ii) providing for
the rental of real or personal property from, or (iii) otherwise requiring
payments to (other than for services as officers, directors or employees of the
Company) any such Person or corporation, partnership, trust or other entity in
which any such Person has a substantial interest as a shareholder, officer,
director, trustee or partner.
4B.7 MISSTATEMENTS OR OMISSIONS. No representations or warranties
by such Lender Seller in the Transaction Documents or any exhibit, certificate
or schedule furnished by such Lender Seller to Buyer pursuant thereto, contains
or will contain any untrue statement of fact, or omits or will omit to state any
fact necessary to make the statements or facts contained therein not misleading.
4B.8 PURCHASE ARRANGEMENTS. Other than with respect to those
certain Xxxxx contracts as described Schedule 4B.8 hereto, such Lender Seller
possesses no specific knowledge of or information relating to the terms of any
supply or purchase arrangement, contract or similar commitment which the Company
has, at any time, entered or considered entering into with any customer or
supplier.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
5.1 ORGANIZATION OF BUYER. Buyer is duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to conduct its business and to own and lease
its properties.
5.2 AUTHORIZATION. Buyer has all necessary corporate authority to
enter into the Transaction Documents and has taken all necessary corporate
action to consummate the transactions contemplated thereby and to perform its
obligations thereunder. Each of the Transaction Documents has been duly
executed and delivered by Buyer and is a legal, valid and binding obligation of
Buyer enforceable against it in accordance with its terms.
5.3 CONSENTS AND APPROVALS. No consent, approval or authorization
of, or declaration, filing or registration with, any United States federal or
state governmental or regulatory authority is required to be made or obtained by
Buyer in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby other
than the filings required under the HSR Act, if any.
27
5.4 NO BROKERS. Except with respect to that certain fee payable
by Buyer to Lazard Freres & Co. and as otherwise set forth on the Disclosure
Schedule, neither Buyer nor any affiliate of Buyer has entered into or will
enter into any agreement, arrangement or understanding with any Person which
will result in the obligation of Sellers to pay any finder's fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby.
5.5 NO CONFLICT OR VIOLATION. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will result in (a) a violation of or a conflict with any provision of the
Certificate of Incorporation or bylaws of Buyer, (b) a breach of, or a default
under, any term or provision of any contract, agreement, Indebtedness, lease,
commitment, license, franchise, permit, authorization or concession to which
Buyer is a party or (c) a violation by Buyer of any statute, rule, regulation,
ordinance, code, order, judgment, writ, injunction, decree or award.
ARTICLE VI
ACTIONS BY SELLERS, THE COMPANY AND
BUYER PRIOR TO THE CLOSING
Sellers, the Company and Buyer, unless otherwise stated, covenant as
follows for the period from the date hereof through the Closing Date:
6.1 MAINTENANCE OF BUSINESS. The Company shall diligently carry
on the Business in the ordinary course consistent with past practice.
6.2 CERTAIN PROHIBITED TRANSACTIONS. The Company shall not
without the prior written approval of Buyer:
(a) incur any Indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other Person, or
make any loans or advances to any Person except in the ordinary course of
business and consistent with past practice;
(b) issue any shares of its Capital Stock or any other Equity
Interests or any other securities;
(c) pay or incur any obligation to pay any dividend on its Capital
Stock or make or incur any obligation to make any distribution or redemption
with respect to its Capital Stock;
(d) make any change to its Certificate of Incorporation or bylaws;
28
(e) mortgage, pledge or otherwise encumber any of its properties
or assets or sell, transfer or otherwise dispose of any of its properties or
assets or cancel, release or assign any Indebtedness owed to it or any claims
held by it, except in the ordinary course of business and consistent with past
practice;
(f) make any Investment of a capital nature either by purchase of
stock or securities, contributions to capital, property transfer or otherwise,
or by the purchase of any property or assets of any other Person, except in the
ordinary course of business and consistent with past practice;
(g) enter into or terminate any contract or agreement, or make any
material change in any of its leases and Contracts, other than in the ordinary
course of business and consistent with past practice;
(h) increase compensation payable to senior management employees
and any other employees or make any discretionary bonuses or promise to do any
of the foregoing, in any such case, outside of the ordinary course of business;
(i) enter into any transaction with any Person on terms other than
those which are on an arms-length basis;
(j) make any payments or engage in transactions with related or
affiliated Parties in each case other than in the ordinary course of business
and consistent with past practice; or
(k) do any other act which would cause any representation or
warranty of Sellers or the Company in this Agreement to be or become untrue.
6.3 INVESTIGATION BY BUYER. The obligations of the Parties shall
be contingent upon Buyer's completion of a business, environmental, financial
and legal investigation of the Company with the results being satisfactory to
Buyer in its sole and absolute discretion. Sellers and the Company shall allow
Buyer through Buyer's Representatives, to make such investigation of the
Business, properties, books and records of the Company, and to conduct such
examination of the condition of the Company, as Buyer deems necessary or
advisable to familiarize itself with such Business, properties, books, records,
condition and other matters, and to verify the representations and warranties of
Sellers and the Company hereunder.
Upon reasonable prior notice, Sellers and the Company shall afford
Buyer and authorized representatives of the Buyer reasonable access, at
reasonable times during business hours, to the Facilities for the purposes of
satisfying Buyer with respect to the representations, warranties and covenant of
Seller and the Company contained herein and the conditions precedent to the
Closing. In performing its examinations and inspections of the Facilities,
Buyer shall use reasonable efforts to minimize any interference with Seller's
use of the Facilities.
29
Buyer shall not conduct or allow any physically intrusive testing of, on or
under the Facilities without first obtaining Seller's written consent, which
shall not be unreasonably withheld or delayed, as to the timing and scope of the
work to be performed and, upon the request of the Seller, entering into an
access agreement in form and substance acceptable to Seller.
Subject to the provisions and limitations set forth in Article 11
hereof, Buyer shall indemnify, defend and hold Sellers and Company harmless from
and against all losses, costs, damages, actions, liabilities and expenses
arising from or in any way related to the gross negligence or willful misconduct
of Buyer or Buyer's Representatives in connection with such parties' entry upon,
inspection of or investigation of the Facilities or breach of this Section 6.3.
All environmental testing and inspections shall be at Buyer's sole cost and
expense, and Buyer agrees to keep the results of such testing and inspections
confidential, except to the extent that disclosure is required by law or legal
process (in which case, Buyer will notify Sellers and the Company prior to
making any such disclosure); provided, however, that such confidentiality
obligation shall terminate upon Closing.
6.4 CONSENTS AND BEST EFFORTS. Promptly after execution and
delivery of this Agreement, Buyer, Sellers and the Company shall make all
governmental filings required by each of them in connection with the
transactions to be consummated pursuant to the Transaction Documents, including
without limitation, filings under the HSR Act and the Federal Alcohol
Administration Act. Sellers shall use all of their commercially reasonable
efforts to cause the Company's stockholders to tender 100% of the shares of
Capital Stock to Buyer on the terms and conditions set forth herein. Sellers
and the Company will, as promptly as practicable, commence to take all action
required to obtain all consents, approvals and agreements of, and to give all
notices and make all other filings with, any third Parties, including
governmental authorities, necessary to authorize, approve or permit the full and
complete sale, conveyance, assignment or transfer of all of the Capital Stock;
PROVIDED, HOWEVER, that Buyer shall not be required to agree to any unfavorable
or commercially unreasonable modification of any existing contract or agreement
by Sellers or the Company in order to obtain any such consent. In addition,
subject to the terms and conditions herein provided, each of the Parties
covenants and agrees to use its best efforts to take, or cause to be taken, all
action or do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by the Transaction Documents and to cause the
fulfillment of the Parties' obligations hereunder.
6.5 NOTIFICATION OF CERTAIN MATTERS. Sellers shall give prompt
notice to Buyer, and Buyer shall give prompt notice to Sellers, of (i) the
occurrence or existence, or failure to occur or exist, of any fact, information
or event, which occurrence or existence or failure could cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate any time from the date hereof to the Closing Date and (ii) any
failure of Sellers, the Company or Buyer, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
hereunder, and each Party shall use its best efforts to remedy same.
30
6.6 NO MERGERS, CONSOLIDATIONS, SALE OF CAPITAL STOCK, ETC. The
Company and Sellers will not, directly or indirectly, solicit or participate in
any inquiries or proposals or enter into or continue any discussions,
negotiations or agreements relating to the sale or exchange of the Capital
Stock, the merger of the Company, or the direct or indirect disposition of a
significant amount of the Assets or Business to any Person other than Buyer or
provide any assistance or any information to or otherwise cooperate with any
other Person in connection with any such inquiry, proposal or transaction. In
the event that the Company or any of Sellers receive an unsolicited offer for
such a transaction or obtain or become aware of information that such an offer
is likely to be made, the Company or Sellers will immediately provide Buyer with
notice thereof, including the identity of the prospective purchaser or
soliciting party.
6.7 TITLE INSURANCE, SURVEYS.
(a) With respect to each parcel of Real Estate that the Company
owns, at Buyer's request, Sellers will obtain, at or prior to the Closing, at
Buyer's sole cost and expense, an ALTA Owner's Policy of Title Insurance Form
B-1970 (or equivalent policy acceptable to the Buyer and its lenders in their
sole and absolute discretion) issued as of the Closing Date by a title insurer
satisfactory to the Buyer and its lenders, in such amount as the Buyer and its
lenders determine to be the fair market value of such parcel (including all
improvements located thereon), insuring title to such Real Estate to be in the
Company as of the Closing, subject only to title exceptions which (i) do not
interfere with the operations of the Business, (ii) do not render title to the
property unmarketable, and (iii) are approved by the Buyer and its lenders. To
the extent required by Buyer and its lenders, each such title insurance policy
will (a) insure title to each owned parcel of Real Estate and all recorded
easements benefitting such parcel, (b) contain an "extended coverage
endorsement" insuring over the general exceptions contained customarily in such
policies, (c) contain an ALTA Zoning Endorsement 3.1 with Parking (or
equivalent), (d) contain an endorsement insuring that the parcel described in
such title insurance policy is the parcel shown on the Survey delivered with
respect to such parcel, (e) contain an endorsement insuring that each street
adjacent to such parcel is a public street and that there is direct and
unencumbered pedestrian and vehicular access to such street from such parcel,
(f) if the Real Estate covered by such policy consists of more than one record
parcel, contain a "contiguity" endorsement insuring that all of the record
parcels are contiguous to one another, (g) contain an owner comprehensive
endorsement, (h) contain a survey accuracy endorsement, and (i) contain a tax
parcel endorsement and such other endorsements as the Buyer may request. Any
escrow and/or closing fees, charges or expenses in connection with the
transactions contemplated herein shall be paid by Buyer.
(b) To the extent required by Buyer and its lenders, with respect
to each parcel of Real Estate that the Company owns, Sellers will obtain, at or
prior to the Closing, at Buyer's sole cost and expense, ALTA Lender's Policies
of Title Insurance, Form B-1970 (or equivalent policy acceptable to the Buyer
and its lenders in their sole and absolute discretion) issued as of the Closing
Date by a title insurer satisfactory to the Buyer and its lenders, in such
amount as the Buyer and its lenders determine to be the fair market value of
such parcel (including all
31
improvements located thereon), insuring the Lender's interest in the Real Estate
including the buildings and improvements located thereon, subject only to title
exceptions which (i) do not interfere with the operations of the Business, (ii)
do not render title to the property unmarketable, and (iii) are approved by the
Buyer and its lenders. To the extent required by Buyer and its lenders, each
such title insurance policy will (a) insure title to each owned parcel of Real
Estate and all recorded easements benefitting such parcel, (b) contain an
"extended coverage endorsement" insuring over the general exceptions contained
customarily in such policies, (c) contain an ALTA Zoning Endorsement 3.1 with
Parking (or equivalent), (d) contain an endorsement insuring that the parcel
described in such title insurance policy is the parcel shown on the Survey
delivered with respect to such parcel, (e) contain an endorsement insuring that
each street adjacent to such parcel is a public street and that there is direct
and unencumbered pedestrian and vehicular access to such street from such
parcel, (f) if the Real Estate covered by such policy consists of more than one
record parcel, contain a "contiguity" endorsement insuring that all of the
record parcels are contiguous to one another, (g) contain an owner comprehensive
endorsement, (h) contain a survey accuracy endorsement, and (i) contain a tax
parcel endorsement and such other endorsements as the Buyer may request. Any
escrow and/or closing fees, charges or expenses in connection with the
transactions contemplated herein shall be paid by Buyers.
(c) To the extent required by Buyer and its lenders, with respect
to each parcel of Real Estate that the Company owns, Sellers will procure, at
Buyer's sole cost and expense, in preparation for the Closing a current survey
of such parcel certified to the Buyer and/or its lender and their designees,
prepared by a licensed surveyor and conforming to current ALTA Minimum Detail
Requirements for Land Title Surveys, disclosing the location of all
improvements, easements, party walls, sidewalks, roadways, utility lines, and
other matters customarily shown on such surveys, and showing access
affirmatively to public streets and roads (a "Survey"). No Survey will disclose
any survey defect or encroachment from or onto any Real Estate which has not
been cured or insured over prior to the Closing.
6.8 EXPENSES. Except as otherwise provided herein, each of the
Sellers and Buyer shall pay their own expenses incurred in connection with the
transactions contemplated hereby, provided, however that, with respect to the
opinion to be provided by Sellers to Buyer pursuant to Section 8.4 hereof, Buyer
agrees to pay the reasonable attorney's fees incurred by Seller.
ARTICLE VII
CONDITIONS TO SELLERS' OBLIGATIONS
The obligations of Sellers to transfer the Capital Stock to Buyer on
the closing Date are subject, in the reasonable discretion of Sellers, to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions:
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7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of Buyer contained in this Agreement shall be
true and correct at and as of the Closing Date as if such representations and
warranties were made at and as of the Closing Date, and Buyer shall have
performed all agreements and covenants required hereby to be performed by it
prior to or at the Closing Date. There shall be delivered to Sellers a
certificate (signed by the President or a Vice President of Buyer) to the
foregoing effect.
7.2 CONSENTS. All consents, approvals and waivers from
governmental authorities and other Parties necessary to permit Sellers to
transfer the Capital Stock to Buyer as contemplated hereby shall have been
obtained, unless the failure to obtain any such consent, approval or waiver
would not result in a material adverse effect on Sellers.
7.3 NO GOVERNMENTAL PROCEEDING OR LITIGATION. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other Person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated by the Transaction
Documents and which could reasonably be expected to damage Sellers in any
material respect if the transactions contemplated thereunder are consummated.
7.4 CERTIFICATES. Buyer will furnish Sellers with such
certificates of its officers, directors and others to evidence compliance with
the conditions set forth in this Article VII as may be reasonably requested by
Sellers.
7.5 CORPORATE DOCUMENTS. Sellers shall have received from Buyer
resolutions adopted by the board of directors of Buyer approving the Transaction
Documents and the transactions contemplated thereby, certified by Buyer's
corporate secretary.
7.6 HSR ACT. The applicable waiting period, including any
extension thereof, under the HSR Act shall have expired.
7.7 OTHER AGREEMENTS. Buyer and Sellers shall have entered into
an Escrow Agreement, a Junior Preferred Stock Purchase Agreement, a Common Stock
Subscription Agreement and a Stockholders Agreement, each substantially in the
forms of Exhibits 7.7(a), 7.7(b) and 7.7(c) attached hereto.
7.8 OPINION OF COUNSEL. Buyer shall have delivered to Sellers an
opinion of counsel for Buyer acceptable to Sellers and the Company, dated the
Closing Date and substantially in the form set forth on Exhibit 7.8 attached
hereto.
7.9 EMPLOYMENT AGREEMENTS. X'Xxxxx and the Company shall have
entered into an employment agreement substantially in the form of Exhibit 8.12
attached hereto (the "X'Xxxxx Employment Agreement").
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7.10 DELIVERY OF DOCUMENTS. Buyer shall have delivered to Sellers
all documents required to be delivered by Buyer to Sellers pursuant to Section
3.2 hereof, including without limitation the Escrow Agreement and Common Stock
Subscription Agreement, and all such documents shall be in form and substance,
and shall be executed in a manner, reasonably satisfactory to Sellers.
ARTICLE VIII
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to purchase the Capital Stock as provided
hereby are subject, in the reasonable discretion of Buyer, to the satisfaction,
on or prior to the Closing Date, of each of the following conditions:
8.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of Sellers and the Company contained in this
Agreement shall be true and correct at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date, and
Sellers and the Company shall have performed all agreements and covenants,
including without limitation, title insurance, policies and surveys in the forms
contemplated by Section 6.7 hereof, required hereby to be performed by either of
them prior to or at the Closing Date. There shall be delivered to Buyer a
certificate (signed by the General Partner, President or a Vice President of
each of Sellers and the Company, in each case, as applicable) to the foregoing
effect.
8.2 CONSENTS. All consents, approvals and waivers from
governmental authorities and other Parties necessary to permit Sellers to
transfer the Capital Stock to Buyer as contemplated hereby shall have been
obtained.
8.3 NO GOVERNMENTAL PROCEEDING OR LITIGATION. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other Person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby.
8.4 OPINION OF COUNSEL. Sellers shall have delivered to Buyer an
opinion of counsel for Sellers and the Company acceptable to Buyer, dated the
Closing Date and substantially in the form set forth on Exhibit 8.4 attached
hereto.
8.5 CERTIFICATES. Sellers and the Company shall furnish Buyer
with such certificates of the respective officers of Sellers and the Company
(without qualification with respect to knowledge) and others to evidence
compliance with the conditions set forth in this Article VIII as may be
reasonably requested by Buyer.
34
8.6 CORPORATE DOCUMENTS. Buyer shall have received from Sellers
and the Company resolutions adopted by the respective boards of directors of
Sellers and the Company approving this Agreement and the transactions
contemplated hereby, certified by the corporate secretary of each of Sellers and
the Company. Buyer shall have also received the corporate minute books,
Certificates of Incorporation, bylaws and stock transfer books of the Company
and each of the Subsidiaries.
8.7 HSR ACT. The applicable waiting period, including any
extension thereof, under the HSR Act shall have expired.
8.8 FEDERAL ALCOHOL ADMINISTRATION ACT. Buyer shall have received
notice that Company's application for the "basic permit" (as defined in the
Federal Alcohol Administration Act) shall have been approved by the Secretary of
the Treasury.
8.9 FINANCING. Buyer shall have obtained any and all necessary
financing on terms and conditions satisfactory to Buyer in its sole and absolute
discretion to enable it to consummate the transactions contemplated hereby,
repay Indebtedness of the Company and to provide adequate working capital for
the Company.
8.10 DISCLOSURE SCHEDULES. The Company and Sellers shall deliver
to Buyer on the Closing Date a Disclosure Schedule (the "Closing Disclosure
Schedule") revised to reflect any changes in the information on the Disclosure
Schedule from the date hereof up to and including the Closing Date, which
Closing Disclosure Schedule shall be made a part of this Agreement and
incorporated herein by reference.
8.11 BALANCE SHEET AND FINANCIAL STATEMENTS. Sellers shall deliver
to Buyer each month as available from the Balance Sheet Date through the Closing
Date, in each case, promptly upon completion a monthly balance sheet and
financial statement, in each case in form and substance acceptable to Buyer
(collectively, the "Interim Financial Statements"). Such Interim Financial
Statements need not be audited, but shall be in accordance with generally
accepted accounting principles, consistently applied, subject to the lack of
footnote disclosure and changes resulting from normal year-end adjustments, none
of which changes would if properly presented, alone or in the aggregate, reflect
matters which have had or could be expected to have an Adverse Effect.
8.12 EMPLOYMENT AGREEMENTS. X'Xxxxx and the Company shall have
entered into the X'Xxxxx Employment Agreement substantially in the form of
Exhibit 8.12 attached hereto.
8.13 ESTOPPEL CERTIFICATES. Sellers shall have delivered to Buyer
an estoppel certificate from each lessor of Real Estate of which the Company is
a lessee and such estoppel certificate is necessary in the reasonable discretion
of Buyer to consummate the transactions contemplated hereby, in each case, in
form and substance satisfactory to the Buyer.
35
8.14 DUE DILIGENCE. Buyer shall have obtained from Sellers, the
Company and their respective Representatives copies of any and all corporate
documents, securities agreements, purchase contracts, sales contracts,
commercial loan agreements, litigation documents, audit reports, studies,
financial statements, governmental reports, insurance policies, employment
records, employee benefit plans, permits, licenses, applications for permits or
licenses and all other information or documents requested by Buyer and Buyer
shall, upon the review thereof, deem such items and information to Buyer's
reasonable discretion fully meet Buyer's satisfaction.
8.15 DELIVERY OF DOCUMENTS. Sellers shall have delivered to Buyer
all documents required to be delivered by Sellers to Buyer pursuant to Section
3.2 hereof, including without limitation no less than 90% of the shares of
Capital Stock, and all such documents shall be in form and substance, and shall
be executed in a manner, reasonably satisfactory to Buyer.
8.16 FIRPTA CERTIFICATES. Sellers shall have delivered to Buyer
appropriate affidavits for each Seller pursuant to Section 1445(b) of the Code
exempting Buyer from any obligation to withhold pursuant to Section 1445(a) of
the Code.
ARTICLE IX
COVENANT NOT TO COMPETE
Attached hereto as Schedule IXA is a list of transactions contemplated
or proposed by the Company as of the Closing which involve in excess of
$1,000,000 (the "Schedule IXA Transactions"). Attached hereto as Schedule IXB
is a complete list of all of the Seller's business interests that may be in
competition with or are substantially similar to the Business (the "Schedule IXB
Interests").
Sellers acknowledge and agree that the Business is conducted in the
State of California and that its reputation and goodwill are an integral part of
its business success throughout the areas where it conducts its business. If
Sellers deprive Buyer of any of the Company's goodwill or in any manner utilize
its reputation and goodwill in competition with the Company, Buyer will be
deprived of the benefits it has bargained for pursuant to this Agreement. This
covenant is necessary to transfer the Business and goodwill of the Company to
Buyer effectively. Accordingly, as an inducement for Buyer to enter into this
Agreement, Sellers agree that, for a period of five (5) years after the Closing,
no Seller shall, without Buyer's prior written consent, directly or indirectly,
(i) use or distribute any of the Company's financial information or information
relating to the purchase, supply or processing of grapes or the supply of wine
to customers; (ii) except for the Schedule IXB Interests, own, manage, operate,
join, control or participate in the ownership, management, operation or control
of, or be connected as a director, officer, employee, partner, consultant or
otherwise with any business entity that competes with the Company for the
Schedule IXA Transactions or (iii) in any manner induce or attempt to induce
X'Xxxxx, Xxxxxx Xxxxxx or Xxxxx Xxxxx to leave the Company or in any way
interfere with
36
the relationship between the Company and any of them, provided, however, if at
any time within the aforementioned five (5) year period, Buyer terminates the
employment of X'Xxxxx, Xxxxxx Xxxxxx or Xxxxx Xxxxx for any reason other than
cause or violation of any similar confidentiality or non-compete arrangements,
Seller may hire any such terminated employee no sooner than six (6) months from
the date of such termination. The Sellers further agree that for a period of
two (2) years after the Closing, no Seller shall, without Buyer's prior written
consent, directly or indirectly, (i) in any manner induce or attempt to induce
any employee, customer, supplier, licensee or other business relation of the
Company to leave or cease doing business with the Company or in any way (other
than participation in the bulk wine industry generally) interfere with the
relationship between the Company and any employee, customer, supplier, licensee
or other business relation thereof or (ii) offer employment to or hire any
person who was an employee of the Company at any time within 6 months prior to
the Closing Date, provided, however, if at any time within the aforementioned
two (2) year period, Buyer terminates the employment of such employees for any
reason other than cause or violation of any similar confidentiality or
non-compete arrangements, Seller may hire any such terminated employees no
sooner than six (6) months from the date of such termination, PROVIDED, HOWEVER,
that this Article IX shall not apply to any Sellers other than CGW Associates
Limited Partnership and Mid-State Horticultural Company.
Additionally, as consideration for the sale of shares of Common Stock
hereunder, X'Xxxxx shall have entered into the X'Xxxxx Employment Agreement with
the Company which agreement, including the applicable covenant not to compete
contained therein, is incorporated herein in by reference.
Sellers and X'Xxxxx acknowledge that a breach of the covenants
contained in this Article IX will cause irreparable damage to Buyer and the
Company, the exact amount of which will be difficult to ascertain, and that the
remedies at law for any such breach will be inadequate. Accordingly, Sellers
and X'Xxxxx agree that, if any Seller or X'Xxxxx breaches any of the covenants
contained in this Article IX in addition to any other remedy which may be
available at law or in equity, Buyer or the Company shall be entitled to
specific performance and injunctive relief, without posting bond or other
security.
ARTICLE X
ACTIONS BY SELLERS, THE COMPANY
AND BUYER AFTER THE CLOSING
10.1 BOOKS AND RECORDS. Sellers and Buyer agree that, so long as
any books, records and files relating to the Business, properties, Assets or
operations of the Company, to the extent that they pertain to the Business prior
to the Closing Date, remain in existence and available, Buyer shall have the
right to inspect and to make copies of the same at any time during business
hours for any proper purpose.
37
10.2 FURTHER ASSURANCES. On and after the Closing Date, Sellers,
the Company and Buyer will take all appropriate action and execute all
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out any of the provisions hereof, including
without limitation, putting Buyer in possession and operating control of the
Business.
10.3 COMPLIANCE WITH LEGISLATION REGULATING ENVIRONMENTAL QUALITY.
Buyer shall, from and after the Closing Date, maintain the Facilities in
substantial compliance with all federal, state, local and foreign environmental
protection, occupational, health and safety or similar laws, statutes,
ordinances, restrictions, licenses and local environmental protection,
occupational, health and safety or similar laws, statutes, ordinances,
restrictions, licenses and regulations, including those relating to the
presence, use, production, generation, handling, transport, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous or otherwise regulated
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, and also including, but
not limited to, the Federal Water Pollution Control Act (33 U.S.C. Section 1251
ET SEQ.), Resource Conservation & Recovery Act (42 U.S.C. Section 6901 ET SEQ.),
Safe Drinking Water Act (21 U.S.C. Section 349, 42 U.S.C. Sections 201, 300f),
Toxic Substances Control Act (15 U.S.C. Section 2601 ET SEQ.), Clean Air Act (42
U.S.C. Section 7401 ET SEQ.), Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601 ET SEQ.), California Health & Safety
Code (Section 25100 ET SEQ., & 39000 ET SEQ.), and California Water Code
(Section 13000 ET SEQ.).
ARTICLE XI
INDEMNIFICATION
11.1 SURVIVAL OF REPRESENTATIONS, ETC. All statements contained in
the Disclosure Schedule or in any certificate or instrument of conveyance
delivered by or on behalf of the Parties pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Parties hereunder. The representations
and warranties of Sellers, the Company and Buyer contained herein shall survive
the Closing Date until the date that is the third anniversary of the Closing
Date, without regard to any investigation made by any of the Parties hereto.
11.2 INDEMNIFICATION. (a) Except with respect to Sections 4A.1 and
4A.3 hereof (for which sections Sellers shall severally, but not jointly
indemnify Buyer and Buyer's Indemnitees (as hereinafter defined)) Sellers shall,
jointly and severally, indemnify Buyer and the Company and their respective
affiliates, stockholders, officers, directors, partners, employees, agents,
Representatives and permitted successors and assigns (collectively, the "Buyer's
Indemnitees") against, and hold each Buyer Indemnitee harmless from, any damage,
claim, liability or expense, including without limitation, interest, penalties
and reasonable attorneys'
38
fees and expenses (collectively "Damages"), arising out of a misrepresentation
or the breach of any warranty, covenant or agreement of Sellers or the Company
contained in this Agreement or, provided Buyer complies with applicable
statutory requirements and offers all shareholders of the Company a price per
share at least equal to the price per share payable to the Sellers pursuant to
Section 2.2 hereof, Damages arising out of any shareholder's dissenters rights
action or similar claim; PROVIDED, HOWEVER, that in all cases except for Damages
arising from or in connection with any of Sellers' fraud, Sellers' obligation
hereunder with respect to breaches of the Sellers' representations and
warranties contained in Article IVA herein shall not exceed in the aggregate
$2,619,900 and such indemnification obligation shall be offset dollar for dollar
against the Exchangeable Preferred Stock. Notwithstanding the foregoing,
Sellers will not be required to indemnify Buyer Indemnitees in respect of any
Damages except to the extent that the aggregate amount of all Damages exceeds
$145,000, in which case Seller will be required to indemnify Buyer Indemnitees
for the entire amount of such Damages, including the amounts up to $145,000.
(b) In addition to any other right or remedy available to Sellers
at law or in equity, Buyer shall indemnify and hold Sellers and its affiliates,
stockholders, policyholders, officers, directors, partner, employees, agents,
representatives and permitted successors and assigns, as applicable
(collectively, the "Sellers' Indemnitees") against, and hold each Sellers'
Indemnitee harmless from any Damages arising out of a misrepresentation or the
breach of any warranty, covenant or agreement of Buyer contained in this
Agreement; PROVIDED, however that Buyer's obligation hereunder with respect to
breaches of the Buyer's representations and warranties contained herein shall
not exceed in the aggregate $2,619,900. Notwithstanding the foregoing, Buyer
will not be required to indemnify Sellers' Indemnitees in respect of any Damages
except to the extent that the aggregate amount of all Damages exceeds $170,000,
in which case Buyer will be required to indemnify Sellers' Indemnitees for the
entire amount of such Damages, including the amounts up to $170,000.
The term "Damages" as used in this Section 11.2 is not limited to
matters asserted by third parties against Sellers, the Company or Buyer, but
includes Damages incurred or sustained by Sellers, the Company or Buyer in the
absence of third party claims.
11.3 INDEMNIFICATION PROCEDURES.
(a) NOTICE OF CLAIM. Any Person making a claim for
indemnification pursuant to Section 11.2 (an "Indemnified Party") must give any
Party hereto from whom indemnification is sought (an "Indemnifying Party")
written notice of such claim (an "Indemnification Claim Notice") promptly after
the Indemnified Party receives any written notice of any action, lawsuit,
proceeding, investigation or other claim (a "Proceeding") against or involving
the Indemnified Party by a government entity or other third party or otherwise
discovers the liability, obligation or facts giving rise to such claim for
indemnification; PROVIDED that the failure to notify or delay in notifying an
Indemnifying Party will not relieve any Indemnifying Party of its obligations
39
pursuant to Section 11.2, except to the extent that such failure actually xxxxx
the Indemnifying Party.
(b) CONTROL OF DEFENSE. With respect to the defense of any
Proceeding against or involving an Indemnified Party in which a government
entity or other third party in question seeks only the recovery of a sum of
money for which indemnification is provided, at its option an Indemnifying Party
may appoint as lead counsel of such defense any legal counsel selected by the
Indemnifying Party; PROVIDED that before the Indemnifying Party assumes control
of such defense it must first:
(i) enter into an agreement with the Indemnified Party (in form
and substance satisfactory to the Indemnified Party) pursuant
to which the Indemnifying Party agrees to be fully responsible
(with no reservation of any rights other than the right to be
subrogated to the rights of the Indemnified Party) for all
Damages relating to such Proceeding and unconditionally
guarantees the payment and performance of any liability or
obligation which may arise with respect to such Proceeding or
the facts giving rise to such claim for indemnification; and
(ii) furnish the Indemnified Party with evidence that the
Indemnified Party, in the Indemnified Party's sole judgment,
is and will be able to satisfy any such liability.
(c) CONTROL OF DEFENSE: EXCEPTIONS, ETC. Notwithstanding the
provisions of Section 11.3(b): (i) the Indemnified Party will be entitled to
participate in the defense of such claim and to employ counsel of its choice for
such purpose at its own expense (PROVIDED that the Indemnifying Party will bear
the reasonable fees and expenses of such separate counsel incurred prior to the
date upon which the Indemnifying Party effectively assumes control of such
defense), (ii) the Indemnifying Party will not be entitled to assume control of
the defense of such claim, and will pay the reasonable fees and expenses of
legal counsel retained by the Indemnified Party, if:
(A) the Indemnified Party reasonably believes that an adverse
determination of such Proceeding could be materially
detrimental or injurious to the Indemnified Party's reputation
or future business prospects,
(B) the Indemnified Party obtains an opinion of counsel to the
effect that there exists or could arise a conflict of interest
which, under applicable principles of legal ethics, could
prohibit a single legal counsel from representing both the
Indemnified Party and the Indemnifying Party in such
Proceeding, or
(C) a court of competent jurisdiction rules that the Indemnifying
Party has failed or is failing to prosecute or defend
vigorously such claim; and
40
(iii) the Indemnifying Party must obtain the prior written consent
of the Indemnified Party (which the Indemnified Party will not
unreasonably withhold) prior to entering into any settlement
of such claim or Proceeding or ceasing to defend such claim or
Proceeding.
11.4 NO RIGHT OF CONTRIBUTION. After the Closing, the Company
shall have no liability to indemnify either Buyer or Sellers on account of a
misrepresentation or the breach of any warranty or the nonfulfillment of any
covenant or agreement of Sellers or the Company; and Sellers shall have no right
of contribution against the Company. In addition to any other remedy which may
be available at law or in equity, Buyer or the Company shall be entitled to
specific performance and injunctive relief, without posting bond or other
security.
11.5 CHARACTERIZATION; TAXES. The Parties hereto intend that any
amount paid pursuant to the provisions of this Article XI be treated as an
adjustment of the Purchase Price prior to entering into any settlement of such
claim or proceeding or ceasing to defend such claim or proceeding.
ARTICLE XII
SECURITIES LAWS
12.1 ACQUISITION FOR INVESTMENT. Buyer hereby acknowledges that
the shares of Capital Stock to be purchased pursuant to the terms of this
Agreement shall be acquired in good faith for investment for its own account and
not with a view to a distribution or resale of any of such Capital Stock in
violation of applicable securities laws.
12.2 LEGEND. Each certificate representing shares of Capital Stock
sold pursuant to the provisions hereof, if deemed advisable by the Company,
shall bear the following legends:
"THE SECURITIES REPRESENTED HEREBY (A) HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF AN AVAILABLE EXEMPTION THEREFROM UNDER SAID ACT OR THE
RULES AND REGULATIONS PROMULGATED THEREUNDER, AND (B) ARE SUBJECT TO THE
PROVISIONS, INCLUDING THE LIMITATIONS ON TRANSFER, SET FORTH IN THAT
CERTAIN STOCKHOLDER AGREEMENT BY AND AMONG THE COMPANY AND THE SIGNATORIES
THERETO, AS AMENDED AND MODIFIED FROM TIME TO TIME. A COPY OF SUCH
STOCKHOLDER AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO
THE HOLDER HEREOF UPON WRITTEN REQUEST."
-and-
41
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."
ARTICLE XIII
13.1 TAX MATTERS. Sellers shall, jointly and severally, pay and be
responsible for all Taxes imposed on Sellers or the Company regardless of when
imposed for any period prior to and including June 30, 1994, including any Taxes
arising from the Sale and any Transfer Taxes. Sellers shall indemnify and hold
harmless Buyer and the Company from and against any liability with respect to
such Taxes, PROVIDED, HOWEVER, that Sellers' indemnification obligations
hereunder shall be subject to the limitations set forth in Sections 11.1 and
11.2 herein; PROVIDED, HOWEVER, that the three year period referred to in
Section 11.1 hereof shall be automatically extended for any periods coterminous
with any audits outstanding, pending or threatened on or prior to the third
anniversary of the Closing Date. Any Taxes of the Company in respect of the
period commencing after June 30, 1994 shall not be a liability of the Sellers.
ARTICLE XIV
MISCELLANEOUS
14.1 TERMINATION. This Agreement may be terminated:
(a) at any time prior to the Closing by written agreement of the
Buyer and Sellers,
(b) by the Buyer, at any time when Sellers are in breach of any of
their obligations pursuant to the Transaction Documents or if any representation
or warranty of Sellers contained therein is false or misleading (provided that
such condition is not the result of any breach of any covenant, representation
or warranty of the Buyer set forth in this Agreement or in any document executed
in connection with this Agreement),
(c) by Sellers, at any time when the Buyer is in breach of any of
its obligations pursuant to the Transaction Documents or if any representation
or warranty of the Buyer contained therein is false or misleading (provided that
such condition is not the result of any breach of any covenant, representation
or warranty of Sellers set forth in this Agreement or in any document executed
in connection with this Agreement), or
(d) by the Buyer or Sellers, at any time after May 1, 1995 or such
other date as is agreed to by Buyer and Sellers in writing.
42
Any termination of this Agreement pursuant to any of clauses (b) through (d)
will be effected by written notice from the terminating party to the Buyer (if
Sellers are the terminating party) or the Sellers (if the Buyer is the
terminating party). Any termination of this Agreement pursuant to clause (b),
(c) or (d) will not terminate the liability of any Party hereto for any breach
or default of any representation, warranty, covenant or other agreement set
forth in this Agreement or any Transaction Document which exists at the time of
such termination.
If this Agreement is terminated in accordance with clause (b) of this
Section 14.1, then Sellers will be, jointly and severally, responsible for (and,
in the case of the Buyer's Expenses, will reimburse Buyer for) all Buyer's
Expenses and Sellers' Expenses. If this Agreement is terminated in accordance
with clause (c) of this Section 14.1, then Buyer will be responsible for (and,
in the case of the Sellers' Expenses, will reimburse Sellers for) all Buyer's
Expenses and Sellers' Expenses.
14.2 ASSIGNMENT. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Sellers without the prior written
consent of Buyer. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their respective
successors and assigns, and no other Person shall have any right, benefit or
obligation hereunder.
14.3 NOTICES; TRANSFER OF FUNDS. Unless otherwise provided herein,
any notice, request, instruction or other document to be given hereunder by any
Party to the others shall be in writing and delivered in person or by courier,
telegraphed, telexed or by facsimile transmission or mailed by certified mail,
postage prepaid, return receipt requested (such mailed notice to be effective on
the date of such receipt is acknowledged), as follows:
If to Bank of America Illinois:
Bank of America Illinois
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
43
If to Massachusetts Mutual Life Insurance Company:
Massachusetts Mutual Life Insurance Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to MassMutual Participation Investors:
MassMutual Participation Investors
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to MassMutual Corporate Investors:
MassMutual Participation Investors
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to other Sellers, to:
c/o Ardshiel, Inc.
000 Xxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X.X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
44
If to the Company, to:
Golden State Vintners
00000 Xxxx 000
X.X. Xxx 00
Xxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Buyer, to:
Xxxxx XxXxxxxxx Xxxxx & Co., Inc.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. XxXxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx Kill Xxxxx & Xxxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other place and with such other copies as either Party may designate
as to itself by written notice to the others.
Payments to be made to Sellers hereunder shall be made by wire
transferred funds to be delivered to Sellers' in accordance with the
instructions to be delivered at Closing.
14.4 CHOICE OF LAW. This Agreement shall be construed, interpreted
and the rights of the Parties determined in accordance with the laws of the
State of New York, without regard to principles of conflicts of laws, except
with respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a Party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
45
Sellers irrevocably agree that any legal action or proceeding arising
out of or in connection with the Transaction Documents, or the transactions
contemplated thereby, shall be brought in the United States District Court for
the Southern District of New York. Any and all service of process and any other
notice in any such action, suit or proceeding shall be effective against any
Party if given personally or by registered or certified mail, return receipt
requested, or by any other means of mail that requires a signed receipt, postage
prepaid, mailed to such Party as herein provided.
14.5 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement,
together with all exhibits and schedules hereto, constitutes the entire
agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties. No supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the Party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
14.6 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.
14.7 INVALIDITY. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any other such instrument.
14.8 HEADINGS. The headings of the Articles and Sections herein
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
14.9 EXPENSES. Except as otherwise provided herein, Sellers and
Buyer will each be liable for its own, and Sellers shall be liable for the
Company's, costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of the Transaction Documents.
14.10 PUBLICITY. Neither Party shall issue any press release or
make any public statement regarding the transactions contemplated hereby,
without the prior approval of the other Party.
14.11 REMEDIES. Except for the limitations set forth under Article
11 and Section 14.14 hereof with respect to the representations and warranties
contained in Article IVA and IVB hereof, Buyer, Sellers and the Company
expressly reserve any and all rights and remedies available to either of them
relating to any actions, whether at law or in equity, with
46
respect to any provision, covenant, warranty, or agreement contained in this
Agreement. No failure to exercise, and no delay in exercising, any right,
remedy, power or privilege under this Agreement by any Party hereto will operate
as a waiver of such right, remedy, power or privilege, nor will any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise of such right, remedy, power or privilege
or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided pursuant to this Agreement are
cumulative and not exhaustive of any other rights, remedies, powers and
privileges which may be provided by law.
14.12 RISK OF LOSS. Until the Closing, all risk of loss with
respect to the Assets will remain with the Sellers. If prior to the Closing any
Asset is damaged, destroyed or lost, and the diminution in value to said Asset
is less than $500,000 then Buyer shall remain obligated to consummate the
transaction herein contemplated with a reduction in the Purchase Price by an
amount equal to the diminution in the fair market value (determined at the time
of the Closing) of such Asset by reason of such damage, destruction or loss. If
the diminution in value to any Asset exceeds $500,000 then at its option, the
Buyer may waive the failure of any condition set forth in Article VIII with
respect to such damage, destruction or loss and either
(a) reduce the Purchase Price by an amount equal to the diminution
in the fair market value (determined at the time of the Closing) of such
Asset by reason of such damage, destruction or loss or
(b) elect to have the Sellers retain such damaged, destroyed or
lost Asset and reduce the Purchase Price by the greater of the fair market
value or the net book value of such Asset (in each case determined
immediately prior to such damage, destruction or loss).
14.13 CONFIDENTIAL INFORMATION. The Parties acknowledge that the
transactions described herein are of a confidential nature and shall not be
disclosed except to consultants, advisors and affiliates, or as required by
applicable law, until such time as the Parties make a public announcement
regarding the transaction as provided in Section 14-10 or, if no such public
announcement is to be made, after the Closing Date. Neither Sellers nor Buyer
shall make any public disclosure of the specific terms of this Agreement, except
as required by applicable law or legal process. In connection with the
negotiation of the Transaction Documents and the preparation for the
consummation of the transactions contemplated thereby, each Party acknowledges
that it will have access to confidential information relating to the other
Party. Each Party shall treat such information as confidential, preserve the
confidentiality thereof and not duplicate or use such information, except to
Representatives, advisors, consultants and affiliates in connection with the
transactions contemplated thereby. Sellers, at a time and in a manner which it
reasonably determines and after prior notice to and consultation with and
consent of Buyer, may notify employees, unions and bargaining agents of the fact
of the subject transaction.
47
14.14 LIABILITY OF LENDER SELLERS. Notwithstanding any provision to
the contrary in any of the Transaction Documents, each of the Lender Sellers (i)
shall not be deemed a Seller for the purposes of Articles IVA, VI and IX hereof
(ii) acknowledge and agree to make the representations and warranties to the
Buyer as set forth in Article IVB, (iii) shall, jointly and severally, indemnify
Buyer and Buyer's Indemnitees against, and hold each Buyer Indemnitee harmless
from, (x) Damages arising out of a misrepresentation or the breach of any
warranty, covenant or agreement of Lender Sellers contained in Article IVB
herein and, provided Buyer complies with applicable statutory requirements and
offers all shareholders of the Company a price per share at least equal to the
price per share payable to the Lender Sellers pursuant to Section 2.2 hereof,
(y) Damages arising out of any shareholder's dissenters rights action or similar
claim; PROVIDED, HOWEVER, that in all cases except for Damages arising from or
in connection with such Lender Seller's fraud (with respect to which the
limitations on liability set forth in this Section 14.14 shall not apply), each
Lender Seller's obligation hereunder with respect to Damages shall not exceed
such Lender Seller's aggregate pro-rata share of the face value of the
Exchangeable Preferred Stock as of the date hereof and such indemnification
obligation shall be offset dollar for dollar against the Exchangeable Preferred
Stock held by such Lender Sellers, and (iv) acknowledges and agrees that its
indemnification obligation to Buyers pursuant to Article XI of this Agreement
extends to breaches of representations, warranties and covenants of the Company
or any other Seller, in each case, subject to the limitation on the
indemnification obligation amount set forth in clause (iii) of this sentence
above.
48
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement,
or have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
/s/ XXXXXXX X. X'XXXXX
------------------------------------
Xxxxxxx X. X'Xxxxx
ARDSHIEL, INC.
BY: /s/ XXXXX X.
-------------------------------
Name: Xxxxx X.
Its:
ARDSHIEL, INC., as attorney-in-fact for each of
the parties listed on Schedule A hereto
BY: /s/ XXXXX X.
-------------------------------
Name: Xxxxx X.
Its: Attorney-in-Fact
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
BY: /s/ XXXX X. XXXXX
-------------------------------
Name: Xxxx X. Xxxxx
Its: VICE PRESIDENT
The foregoing is executed on
behalf of MassMutual Participation
Investors, organized under a
Declaration of Trust, dated
April 7, 1998, as amended from
time to time. The obligations
of such Trust are not binding
upon, nor shall resort be had to
the property of, any of the
Trustees, shareholders, officers,
employees or agents of such Trust
individually, but the Trust's assets
and property only shall be bound.
49
The foregoing is executed on
behalf of MassMutual Corporate
Investors, organized under
Declaration of Trust, dated
September 10, 1985, as amended
from time to time. The obligations
of such Trust are not personally
binding upon, nor shall resort be
had to the property of, any of the
Trustees, shareholders, officers,
employees or agents of such Trust,
the Trust's property only shall be
bound.
MASSMUTUAL PARTICIPATION INVESTORS
BY: /s/ XXXX X. XXXXX
-------------------------------
Name: Xxxx X. Xxxxx
Its: VICE PRESIDENT
MASSMUTUAL CORPORATE INVESTORS
By: /s/ XXXX X. XXXXX
-------------------------------
Name: Xxxx X. Xxxxx
Its: VICE PRESIDENT
BANK OF AMERICA ILLINOIS
By: /s/ XXXXXXX X. XXXX
-------------------------------
Name: Xxxxxxx Xxxx
Its: Principal
MID-STATE HORTICULTURAL COMPANY
By: /s/ XXXXXX XXXXXXXXX
-------------------------------
Name: Xxxxxx Xxxxxxxxx
Its: President
CGW ASSOCIATES LIMITED PARTNERSHIP
By: Ardshiel, Inc., its general partner
By: /s/ XXXXX X.
-------------------------------
Name: Xxxxx X.
Its: Attorney-in-Fact
50
XXXXXXXXXXX X. XXXXX
By: /s/
-------------------------------
Xxxxxxxxxxx Xxxxx
XXXXXX X. XXXXXXX
By: /s/
-------------------------------
Xxxxxx X. Xxxxxxx
XXX X'XXXXX
By: /s/
-------------------------------
Xxx X'Xxxxx
FORD X. XXXXXXXXX
By: /s/ FORD X. XXXXXXXXX
-------------------------------
Ford X. Xxxxxxxxx
XXXXXXX X. XXXX
By: /s/ XXXXXXX X. XXXX
-------------------------------
Xxxxxxx X. Xxxx
XXXXXXX X. XXXXX
By: /s/ XXXXXXX X. XXXXX
-------------------------------
Xxxxxxx X. Xxxxx
XXXXXX X. XXX XXXX, XX.
By: /s/ XXXXXX X. XXX XXXX, XX.
-------------------------------
Xxxxxx X. Xxx Xxxx, Xx.
51
GOLDEN STATE VINTNERS
By:
-------------------------------
Name:
Its:
GOLDEN STATE ACQUISITION CORP.
By: /s/ XXXX X. XXXXXXXXX
-------------------------------
Name: Xxxx X. XxXxxxxxx
Its:
52
