EXHIBIT 2.2
AGREEMENT
This Agreement is made as of the 1st day of May, 1998 (the "Effective
Date") by and between NUTRITION MEDICAL, INC., a Minnesota corporation,
(hereinafter referred to as the "Seller"), with offices at 0000 00xx Xxxxxx
X., Xxxxxxxxxxx, XX 00000, and AGRILINK FOODS, INC., a New York corporation
(hereinafter called the "Buyer") with offices at 00 Xxxxxx Xxxxx, Xxxxxxxxx,
XX 00000.
WHEREAS, Seller and Buyer are in the retail adult liquid nutritional
supplement products business;
WHEREAS, Seller desires to transfer the retail adult liquid nutritional
supplement products portion of its business (the "Business") to Buyer;
WHEREAS, Buyer and Seller desire to enter into this Agreement under the
terms of which Seller will sell the Business to Buyer and Buyer will purchase
the Business from Seller, all subject to the provisions herein below set
forth.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties do
hereby agree as follows:
SECTION 1. SALE OF PROPERTY
SECTION 1.1. Seller shall at the Closing (as hereinafter defined), for
the consideration provided in Section 2 hereof, convey, sell, transfer,
assign and deliver to Buyer, and Buyer shall at the Closing purchase from
Seller, the following:
(a) INVENTORY. Finished goods or bright stock inventory of the
Business as of the Effective Date; provided, however, that (i)
such inventory shall not exceed 2500 cases in total, (ii) such
inventory shall not exceed three
(3) months worth of product for any one (1) customer of Seller,
and (iii) such inventory shall have remaining shelf life dating
of twelve (12) months or more.
(b) LABELS. Unused labels of the Business as of the Effective Date;
provided, however, that (i) Buyer shall not purchase labels
except for customers of Seller as of the Effective Date and (ii)
Buyer shall not purchase labels for customers of Seller who will
change to the Xxxxxxx Xxxxx Foods formula for product.
SECTION 1.2. RETAINED ASSETS AND BUSINESS.
(b) Seller shall retain the accounts receivable of the Business as of
the Effective Date which Seller shall collect for its own
account.
(c) Seller shall retain it business of selling adult nutritional
supplement products to its international customers and Seller
shall retain all of its current business except for the Business
specifically sold hereunder.
SECTION 2. PURCHASE PRICE; PAYMENTS
SECTION 2.1 PURCHASE PRICE AND PAYMENT. Buyer shall pay to Seller at
the Closing the following:
(b) Cash for the inventory purchased under Section 1.1(a) equivalent
to Seller's cost for such inventory.
(b) Cash for the labels purchased under Section 1.1(b) equivalent to
Seller's cost for such labels.
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(c) Cash in the amount of Eighteen Thousand Dollars ($18,000) for
Seller's label development costs.
SECTION 3. CLOSING
SECTION 3.1. PLACE OF CLOSING. The Closing under this Agreement and
all deliveries to be made at the Closing shall take place at the law firm of
Xxxxxx Beach & Xxxxxx, LLP, 130 East Main Street, Rochester, New York, or at
such other place or in such other manner (including by facsimile) as the
parties may agree, on the Effective Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer
represents and warrants to Seller as follows:
(b) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York and has
full corporate power to purchase the Business and to enter into
and perform its obligations under this Agreement.
(c) Neither the execution nor the performance of this Agreement will:
(i) Violate any judgment, writ, injunction, decree or order of
any court or other governmental authority relating to
Buyer;
(ii) Violate any indenture, contract, other commitment or
restriction to which Buyer is a party or by which it is
bound;
(iii) Be in conflict with, or result in or constitute a
breach or default (or an occurrence which by the passage of
time and/or the giving of notice would constitute a breach
or default), on the part of
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Buyer, under any such indenture, contract, other commitment
or restriction;
(iv) Result in the creation of imposition of any lien, charge or
encumbrance of any nature whatsoever upon the Property.
(d) The execution and delivery of this Agreement have been duly and
validly authorized and approved by proper corporate action of
Buyer, and this Agreement, when executed and delivered, will
constitute a valid and binding obligation of Buyer, enforceable
in accordance with its terms, subject however, to the application
of laws affecting creditors' rights generally and the
availability of equitable remedies.
SECTION 4.2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to the Buyer as follows:
(b) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota and has
full corporate power to sell and assign the Business and to enter
into and perform its obligations under this Agreement.
(c) Seller has full power and authority to carry on its business in
the manner heretofore carried on by it, and Seller is not in
violation of any laws, regulations or orders applicable to the
operations of its business in any manner which would or could
result in Buyer not being permitted to continue to operate said
business after the Closing hereunder.
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(d) Neither the execution nor the performance of this Agreement will:
(i) Violate any judgment, writ, injunction, decree or order of
any court or other governmental authority relating to
Seller;
(ii) Violate any indenture, contract, other commitment or
restriction to which Seller is a party or by which it is
bound;
(iii) Be in conflict with, or result in or constitute a
breach or default (or an occurrence which by the passage of
time and/or the giving of notice would constitute a breach
or default), on the part of Seller, under any such
indenture, contract, other commitment or restriction;
(iv) Result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon the Property.
(e) The execution and delivery of this Agreement have been duly and
validly authorized and approved by proper corporate
action of Seller, and this Agreement, when executed and
delivered, will constitute a valid and binding obligation
of Seller, enforceable in accordance with its terms,
subject however, to the application of laws affecting
creditors' rights generally and the availability of
equitable remedies.
(f) Seller had good, marketable and insurable title to and
rightful possession of all property and assets being
transferred to Buyer, free and clear of all liens and
encumbrances.
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SECTION 5. FURTHER AGREEMENTS
SECTION 5.1. SUPPLY. Buyer agrees for a period of seven (7) months
after the Effective Date to offer current customers of the Seller the option
of purchasing product produced for Buyer by O-AT-KA, which currently produces
product for Seller for customers of the Business. Seller grants Buyer a
non-exclusive license to use Seller's formulas for the production of such
product by O-AT-KA, through December 31, 1998, the end of such seven-month
period. Buyer agrees to indemnify and hold harmless Seller for any claims
relating to any product produced for Buyer by O-AT-KA after the Effective
Date.
SECTION 5.2. ROYALTY. In addition to the purchase price and payment
under Section 2.1, Buyer agrees to pay a royalty payment of $(*) per case on
all case sales to customers of the Business as of the Effective Date made
during the two (2) year period commencing on the Effective Date. Such
royalty payment shall be paid on a quarterly basis within twenty-five (25)
days after the end of each calendar quarter.
SECTION 5.3. BROKERS. Buyer agrees to honor Seller's existing broker
relationships through December 31, 1998, and acknowledges that commissions
are between (*)% and (*)%. Notwithstanding the foregoing, Seller
acknowledges that Buyer is not assuming such broker relationships.
SECTION 5.4. BEST EFFORTS. Seller shall use its reasonable best
efforts to transfer its retail and food service customers to Buyer.
SECTION 5.5. NO SOLICITATION. Buyer shall not solicit or accept
orders from any current customer of Seller (other than any customers who is
currently also a customer of Buyer) prior to the Effective Date, without the
prior written consent of Seller.
(*) Confidential information has been omitted and filed separately with the
Commission pursuant to Rule 24b-2.
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SECTION 5.6. SUPPLY TO SELLER (INTERNATIONAL). Buyer shall supply
Seller with adult nutrition supplements for international customers of Seller
at $(*) per case for regular product and $(*) per case for plus product, FOB
plant and upon such further terms as Buyer and Seller shall agree; provided,
however, that Buyer may reasonably adjust such prices, beginning January 1,
1999, to reflect market conditions and costs. Seller shall be responsible
for labels for any product produced pursuant to this Section 5.6
SECTION 5.7. SUPPLY TO SELLER (CRITICAL CARE NUTRITION PRODUCTS). For
a period of three (3) years after the Effective Date, Buyer shall supply
Seller with critical care nutritional products at prices generally consistent
with current market pricing, subject to reasonable adjustment to reflect
market conditions and costs, and upon such further terms as the parties shall
agree.
SECTION 5.8. NON-COMPETE. Seller and Xxxxxxx X. Xxxx agree to enter
into covenants not to compete with Buyer in the retail adult liquid
nutritional supplement products business in North America for a period of
three (3) years after the Effective Date, without the prior written consent
of Buyer.
SECTION 6. GENERAL PROVISIONS
SECTION 6.1. NOTICES. Any notice or other communication required or
permitted to be given to Buyer under this Agreement shall be deemed to have
been given upon deposit in the United States mail, first class postage
prepaid, or registered mail. Any notice or other communication required or
permitted to be given to Seller under this Agreement shall be deemed to have
been given upon deposit in the United States mail, first class postage
prepaid, or registered mail.
(*) Confidential information has been omitted and filed separately with the
Commission pursuant to Rule 24b-2.
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SECTION 6.2. MERGER; AMENDMENTS. This Agreement embodies all of the
representations, warranties, agreements and conditions in relation to the
subject matter hereof, and no representations, warranties, understanding or
agreements, oral or otherwise, in relation thereto exist between the parties
except as herein expressly set forth. This Agreement may not be amended or
terminated orally but only by an instrument in writing duly executed by the
parties hereto.
SECTION 6.3. PARTIES. This Agreement and the various rights and
obligations arising hereunder shall inure only to the benefit of and be
binding upon the parties hereto and their respective heirs, successors and
assigns.
SECTION 6.4. INVALIDITY. The invalidity or enforceability of any term
or provision of this Agreement or the application of such term or provision
to any person or circumstance shall not impair or affect the remainder of
this Agreement, and its application to other persons and circumstances, and
the remaining terms and provisions hereof shall not be invalidated but shall
remain in full force and effect.
SECTION 6.5. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
without reference to principles of conflict of laws.
SECTION 6.6. WAIVER. No waiver shall be deemed to be made by any
party of any of its rights hereunder unless the same shall be in writing, and
each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the waiving party
or the obligations of the other parties in any other respect at any other
time.
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SECTION 6.7. COUNTERPARTS. This Agreement may be executed by the
parties in two or more counterparts, each of which shall be considered an
original.
SECTION 6.8. CAPTIONS. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
duly authorized officers of both Seller and Buyer as of the day and year
first above written.
NUTRITION MEDICAL, INC.
By: /s/ Xxxxxxx X. Xxxx
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AGRILINK FOODS, INC.
By: /s/ Xxx Xxxxx
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