Exhibit 2.1
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ASSET PURCHASE AGREEMENT
among
XXXXXX FOODS CORPORATION,
BFC INVESTMENTS, L.P.
and
EAGLE FAMILY FOODS, INC.
Dated as of November 24, 1997
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TABLE OF CONTENTS
Page
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1 SALE OF ASSETS AND ASSUMPTION OF LIABILITIES......................... 2
1.1 Sale of Assets.................................................. 2
1.2 Assets.......................................................... 3
1.3 Excluded Assets................................................. 8
1.4 Assumed Liabilities............................................. 11
1.5 Excluded Liabilities............................................ 12
2 PURCHASE PRICE AND ADJUSTMENTS....................................... 15
2.1 Purchase Price.................................................. 15
2.2 Inventory Adjustments........................................... 17
2.3 Proration of Payroll and Real and Personal Property Taxes....... 19
3 REPRESENTATIONS AND WARRANTIES OF BFC................................ 20
3.1 Corporate Existence............................................. 20
3.2 Corporate Authority............................................. 21
3.3 Governmental Approvals; Consents................................ 22
3.4 Financial Statements............................................ 22
3.5 Absence of Changes.............................................. 23
3.6 Real and Personal Properties.................................... 25
3.7 Contracts....................................................... 29
3.8 Litigation, Agencies............................................ 30
3.9 Intangible Property Rights...................................... 31
3.10 Insurance....................................................... 35
3.11 Tax Matters..................................................... 35
3.12 Employment and Benefits......................................... 36
3.13 Compliance with Laws............................................ 38
3.14 Finders; Brokers................................................ 39
3.15 Environmental Matters........................................... 39
3.16 Product Guaranty................................................ 42
3.17 Machinery....................................................... 43
3.18 Product Recalls................................................. 43
3.19 Customers and Suppliers......................................... 43
3.20 [Intentionally Omitted]......................................... 44
3.21 No Undisclosed Liabilities...................................... 44
3.22 Entire Business................................................. 44
3.23 No Other Representations or Warranties.......................... 45
3.24 Expiration of Representations and Warranties.................... 45
4 REPRESENTATIONS OF BUYER............................................. 45
4.1 Corporate Existence............................................. 45
4.2 Corporate Authority............................................. 46
4.3 Governmental Approvals; Consents................................ 47
4.4 Finders; Brokers................................................ 47
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4.5 Financial Capacity.............................................. 47
4.6 No Other Representations or Warranties.......................... 48
4.7 Expiration of Representations and Warranties.................... 48
5 AGREEMENTS OF BUYER.................................................. 48
5.1 Operation of the Business....................................... 48
5.2 Investigation of Business....................................... 51
5.3 Mutual Cooperation; No Inconsistent Action...................... 52
5.4 Public Disclosures.............................................. 53
5.5 Access to Records and Personnel................................. 54
5.6 License Agreements and Transactions............................. 55
5.7 Employee Relations and Benefits................................. 56
5.8 Product Shipment and Inventory Reconciliation................... 63
5.9 "As Is" Condition............................................... 64
5.10 Non-Solicitation................................................ 64
5.11 [Intentionally Omitted]......................................... 65
5.12 Financing....................................................... 65
5.13 Consumer Claims and Complaints.................................. 66
5.14 Promotion/Pricing Allowance..................................... 66
5.15 Administration of Accounts; Customer Inquiries.................. 67
5.16 Services Agreement.............................................. 68
5.17 Puerto Rico Distributor Agreement............................... 68
5.18 Canadian Copack and Distribution Agreements..................... 69
5.19 Covenant Not to Compete......................................... 69
5.20 Confidentiality................................................. 73
5.21 Acquisition of Rights to Confidentiality........................ 74
5.22 Certain Restrictions............................................ 74
6 CONDITIONS........................................................... 75
6.1 Conditions Precedent to Obligations of Buyer, BFC and BFC
Investments..................................................... 75
6.2 Conditions Precedent to Obligation of BFC and BFC Investments... 75
6.3 Conditions Precedent to Obligation of Buyer..................... 77
7 CLOSING.............................................................. 79
7.1 Closing Date.................................................... 79
7.2 Buyer Deliveries................................................ 79
7.3 BFC Deliveries.................................................. 79
8 INDEMNIFICATION...................................................... 80
8.1 Indemnification by BFC.......................................... 80
8.2 Indemnification by Buyer........................................ 84
8.3 Indemnification Calculations.................................... 86
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9 TERMINATION.......................................................... 88
9.1 Termination Events.............................................. 88
9.2 Effect of Termination........................................... 89
10 ALTERNATIVE DISPUTE RESOLUTION....................................... 89
11 MISCELLANEOUS AGREEMENTS OF THE PARTIES.............................. 90
11.1 Notices........................................................ 90
11.2 Bulk Transfers................................................. 91
11.3 Transaction Taxes.............................................. 91
11.4 Further Assurances; Asset Returns.............................. 92
11.5 Other Covenants................................................ 92
11.6 Expenses....................................................... 93
11.7 Non-Assignability.............................................. 93
11.8 Amendment; Waiver.............................................. 93
11.9 Schedules and Exhibits......................................... 94
11.10 Third Parties.................................................. 95
11.11 Governing Law.................................................. 95
11.12 Consent to Jurisdiction........................................ 95
11.13 Certain Definitions............................................ 96
11.14 Entire Agreement............................................... 97
11.15 Specific Performance........................................... 97
11.16 Section Headings; Table of Contents............................ 97
11.17 Severability................................................... 98
11.18 Counterparts................................................... 98
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Exhibits
EXHIBIT A - Financing Letters and Equity Letter
EXHIBIT B-1 - Form of BFC Investments Assignment
EXHIBIT B-2 - Form of BFC Assignment
EXHIBIT C - Form of Xxxxxx License Agreement
EXHIBIT D - Form of Buyer's License Agreement
EXHIBIT E - Form of Services Agreement
EXHIBIT F - Form of Puerto Rico Distributor Agreement
EXHIBIT G - Term Sheets for Canadian Agreements
EXHIBIT H - Form of Assumption Agreement
EXHIBIT I - Form of Opinion of Xxxxxxx Xxxx & Xxxxxxxxx
EXHIBIT J - Form of Xxxx of Sale
EXHIBIT K - Form of Opinion of General Counsel of BFC
EXHIBIT L - Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement, dated as of November 24, 1997 (hereinafter
"Agreement"), among XXXXXX FOODS CORPORATION, a Delaware corporation ("BFC"),
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EAGLE FAMILY FOODS, INC., a Delaware corporation ("Buyer"), and, solely for
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purposes of Sections 1.1(b), 1.2(b), 1.3(b), 1.4, 1.5, 2.1, 5.4, 5.6, 6.2, 7.3
and 11.4 hereof, BFC INVESTMENTS, L.P., a Delaware limited partnership ("BFC
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Investments").
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W I T N E S S E T H:
WHEREAS, BFC and BFC Investments, directly or through their affiliates, are
collectively engaged, in part, in the business of developing, manufacturing,
marketing, distributing and selling in the United States (excluding Puerto Rico)
and Canada sweetened condensed milk sold under the Eagle Brand name, powdered
non-dairy xxxxxxx sold under the Cremora brand name, canned egg nog sold under
the Xxxxxx brand name, shelf-stable juice sold under the ReaLemon/ReaLime brand
names, mincemeat sold under the None Such brand name, and acid-neutralized
instant coffee sold under the Kava brand name and, in the case of certain of the
foregoing brands, under other related names (which business is hereinafter
referred to as the "Business") (provided that, subject to the terms and
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conditions of this Agreement and the license agreements referred to herein, the
foregoing definition of the Business shall not be deemed to be a limitation on
Buyer's ability to expand the Business outside of the United States and Canada);
and
WHEREAS, Buyer desires to purchase from BFC and BFC Investments, and BFC
and BFC Investments desire to sell or to cause their affiliates to sell to
Buyer, the BFC Assets
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and the BFC Investments Assets (each as defined below), and in connection
therewith Buyer is willing to assume the Assumed Liabilities (as defined below)
(collectively, the "Purchase"), upon the terms and subject to the conditions of
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this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the parties hereby agree as follows:
1 SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
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1.1 Sale of Assets.
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(a) Sale of BFC Assets. Subject to the satisfaction or waiver of the
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conditions set forth in this Agreement, at the Closing and as of the Closing
Date, as these terms are defined in Section 7.1 hereof, BFC shall, and shall
cause its affiliates to, sell, assign, transfer, convey and deliver to Buyer
free and clear of any lien or other encumbrance other than Permitted Liens (as
hereinafter defined), and Buyer shall purchase, all of the assets, rights,
properties, claims, contracts and business of BFC and its affiliates which are
principally utilized in the Business as of the Closing Date, of every kind,
nature, character and description, tangible and intangible, real, personal or
mixed, wherever located, other than the Excluded BFC Assets (as defined in
Section 1.3(a) hereof) (the "BFC Assets"), provided, however, that the BFC
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Assets shall not include any BFC Investments Assets (as defined in Section
1.1(b)). As of the Closing, risk of loss as to the BFC Assets shall pass from
BFC and its affiliates to Buyer.
(b) Sale of BFC Investments Assets. Subject to the satisfaction or waiver
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of the conditions set forth in this Agreement, at the Closing and as of the
Closing Date, BFC Investments shall sell, assign, transfer, convey and deliver
to Buyer free and clear of any lien or other encumbrance other than Permitted
Liens, and Buyer shall purchase, all of the assets, rights, properties, claims,
contracts and business of BFC Investments which are principally
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utilized in the Business as of the Closing Date, of every kind, nature,
character and description, tangible and intangible, real, personal or mixed,
wherever located, other than the Excluded BFC Investment Assets (as defined in
Section 1.3(b) hereof) (the "BFC Investments Assets"; and together with the BFC
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Assets, the "Assets"). As of the Closing, risk of loss as to the BFC
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Investments Assets shall pass from BFC Investments to Buyer.
1.2 Assets.
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(a) BFC Assets. The BFC Assets to be purchased by Buyer at the Closing
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include, without limitation, the following:
(i) BFC Real Property. All BFC Real Property (as defined in Section
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3.6(b)) described on Part 1 of Schedule 3.6(a)(i) hereto, including all
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buildings, structures and other improvements situated thereon (individually
referred to as a "Facility" and collectively, the "Facilities"), and all of
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BFC's right, title and interest in all easements, privileges, rights-of-way,
riparian and other water rights, lands underlying any adjacent streets or roads
and appurtenances pertaining to or accruing to the benefit of such property, in
each case subject to the exceptions described on Schedule 3.6(a)(ii) hereto.
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(ii) Machinery and Equipment. All machinery (including Tetrapak
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machinery and laboratory equipment), vehicles, computers, equipment, furniture,
fixtures, supplies and other items of personal property reflected in the balance
sheet included within the 1997 Audited Financial Statements (as defined in
Section 3.4(b)), with additions thereto in the ordinary course of business (net
of dispositions, (x) prior to the date hereof, which do not cause Section 3.5 to
be untrue and (y) on or after the date hereof, which do not violate Section
5.1(b)), and all replacements for any of the foregoing, which are located at the
Facilities on the Closing Date or otherwise principally used in or related to
the Business as of
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the Closing Date, whether or not such assets have a book value (the
"Machinery"), and all warranties and guarantees, if any, express or implied,
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existing for the benefit of BFC in connection with the Machinery, to the extent
transferable.
(iii) Intangible Property.
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(A) Patent Rights. All right, title and interest of BFC and
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its affiliates in all patentable inventions, discoveries, improvements, ideas
and know-how and all unexpired domestic and foreign patents and patent
applications, as well as all reissues, divisionals, continuations and
continuation-in-part applications and any patents issuing thereon and all
renewals and extensions thereof, and all license agreements and other agreements
which relate to inventions and discoveries and any patent applications and
patents thereon, as well as improvements therein, used principally in connection
with the Business and described on Schedule 3.9(a)(i) hereto in all territories
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worldwide other than, in the case of any such right, title or interest relating
to powdered non-dairy xxxxxxx sold under the Cremora brand name and related
names, in those territories set forth on Schedule 1.3(a)(i), and claims or
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causes of action arising out of or related to infringement or misappropriation
of any Patent Rights (as defined in Section 3.9(a));
(B) Trademark Rights. All right, title and interest of BFC and
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its affiliates in (i) all trademarks, service marks and all registrations and
applications pertaining thereto (including all documents or files pertaining
thereto), trade names and any logos associated therewith; (ii) any and all
licenses or other rights to use trademarks owned by others and (iii) any trade
dress associated with the Business, and any translations, adaptations,
derivations or combinations of any of the items indicated in clauses (i) and
(ii) above, in each case described in clauses (i) through (iii) as used
principally in connection with the Business
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and described on Schedule 1.2(a)(iii)(B) or Schedule 3.9(b)(i) hereto in all
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territories worldwide other than, in the case of any such right, title or
interest relating to powdered non-dairy xxxxxxx sold under the Cremora brand
name and related names, in those territories set forth on Schedule 1.3(a)(i),
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together with the goodwill associated therewith and claims or causes of action
arising out of or related to infringement or misappropriation of any Trademark
Rights (as defined in Section 3.9(b));
(C) Copyrights. All right, title and interest of BFC and its
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affiliates in all copyrights, copyright registrations, copyright applications
(pertaining thereto) and all licenses or other rights to use the copyrights of
others, in each case used principally in connection with the Business and
described on Schedule 3.9(c)(i) hereto in all territories worldwide other than,
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in the case of any such right, title or interest relating to powdered non-dairy
xxxxxxx sold under the Cremora brand name and related names, in those
territories set forth on Schedule 1.3(a)(i), and claims or causes of action
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arising out of or related to infringement or misappropriation of any Copyright
Rights (as defined in Section 3.9(c));
(D) Technology. All right, title and interest of BFC and its
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affiliates in the Technology (as defined in Section 3.9(a)) as of the Closing
Date other than, in the case of any such right, title or interest relating to
powdered non-dairy xxxxxxx sold under the Cremora brand name and related names,
in those territories set forth on Schedule 1.3(a)(i);
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(E) Other. All right, title and interest of BFC and its
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affiliates in all material domain names and registrations or applications for
registration thereof used principally in connection with the Business and
described on Schedule 3.9(d) hereto in all territories worldwide and claims or
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causes of action arising out of or related to infringement or misappropriation
of any Internet Rights (as defined in Section 3.9(d)); and
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(F) New Products. All right, title and interest of BFC and
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its affiliates in all products in development as of the Closing Date, including
all right, title and interest of BFC and its affiliates in all intangible rights
associated therewith, relating principally to or arising principally out of the
Business.
(iv) Contracts. All Contracts (as defined in Section 3.7(a)) to
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which BFC is a party or by which BFC is bound, as of the Closing Date,
including, without limitation, the BFC Leases (as defined in Section 3.6(b)).
(v) Licenses and Permits. To the extent transferable, all Licenses
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and Permits (as defined in Section 3.13) owned or used by BFC as of the Closing
Date and which relate principally to the operation of the Business.
(vi) Inventories. The finished products (other than finished
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products that have been billed and are being held for customers' accounts)
principally related to the Business and owned or shipped (to the extent owned)
by BFC on the Closing Date and all work-in-process, raw materials and packaging
materials used in connection therewith, principally related to the Business and
owned by BFC on the Closing Date, including returns of inventory following the
Closing Date, provided, however, that BFC shall remain liable for any and all
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credits or refunds due to customers that return any inventory to the extent
specified in Section 1.5(f).
(vii) Business Information; Files and Records. All business
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information, management systems (to the extent transferable), books, archival
materials, files and records, whether in hard copy or magnetic format, but only
to the extent still in existence, relating principally to the operation of the
Business, including, without limitation, advertising, print and radio/television
commercials, sales promotion materials, point of sale and shelf
7
merchandising materials, marketing and sales programs, market research,
technical research, business and strategic plans, customer, supplier/alternative
supplier and co-packer files and lists, consumer communications, equipment
maintenance records and warranty information, plant plans, specifications and
drawings, product and raw material specifications, manufacturing procedures and
processes, recipes (both for manufacturing and home or end-user use of
products), trade secrets and customer specifications and all files relating to
Transferred Employees, correspondence with federal, state and local governmental
agencies relating to the operation of the Business and related files and records
of BFC, other than tax returns and correspondence relating to Taxes.
(viii) Phone Numbers, etc. To the extent transferable, all telephone
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numbers (e.g., toll free numbers), fax numbers and similar numbers or addresses
relating principally to the Business.
(ix) Other BFC Assets. All other assets (other than Excluded BFC
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Assets) principally utilized in the Business and owned by BFC included in (A)
the Financial Statements (as defined in Section 3.4), to the extent still in
existence on the Closing Date, and (B) the Closing Statement (as defined in
Section 2.2(c)) including, in each case, all goodwill associated with any of the
items listed in (i) through (viii) above and clauses (A) and (B) of this clause
(ix).
(b) BFC Investments Assets. The BFC Investments Assets to be
----------------------
purchased by Buyer at the Closing consist of all of BFC Investments' right,
title and interest in (i) all trademarks, service marks and all registrations
and applications pertaining thereto (including all documents or files pertaining
thereto), trade names and any logos associated therewith; (ii) any and all
licenses or other rights to use trademarks owned by others and (iii) any trade
8
dress associated with the Business and any translations, adaptations,
derivations or combinations of any of the items indicated in clauses (i) or (ii)
above, in each case described in clauses (i) through (iii) as used principally
in connection with the Business and described on Schedule 3.9(b)(i) hereto in
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all territories worldwide other than, in the case of any such right, title or
interest relating to powdered non-dairy xxxxxxx sold under the Cremora brand
name and related names, those set forth on Schedule 1.3(a)(i), together with the
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goodwill associated therewith and claims or causes of action arising out of or
related to infringement or misappropriation thereof.
1.3 Excluded Assets.
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(a) Excluded BFC Assets. It is expressly agreed that BFC will
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retain and Buyer will not acquire the following assets (the "Excluded BFC
------------
Assets"):
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(i) Non-Acquired Assets. The assets utilized by BFC principally in
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connection with businesses other than the Business or used principally by BFC at
plants or distribution facilities which are not owned or used by BFC principally
in the operation of the Business.
(ii) Cash and Cash Equivalents. Cash and cash equivalents,
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including, without limitation, bank deposits, investments in so-called "money
market" funds, commercial paper funds, certificates of deposit, Treasury Bills
and accrued interest thereon, other than any of the foregoing to the extent
arising out of the operation of the Business on or after the Closing Date.
(iii) Tax Refunds. Any refunds or credits (including interest
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thereon or claims therefor) with respect to any Taxes (as defined in Section
3.11) that are Excluded Liabilities.
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(iv) Insurance Contracts. Any contracts of insurance in respect of
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the Business; and any reimbursement for, or other benefit associated with
prepaid insurance, and any rights associated with any prepaid expense for which
Buyer will not receive the benefit after the Closing Date, including without
limitation any insurance proceeds with respect to events occurring prior to the
Closing Date, to the extent BFC assumes or retains the cost of any such event or
indemnifies Buyer with respect to such event.
(v) Excluded Information Systems. Any information systems of the
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Business identified in Schedule 1.3 (a)(v).
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(vi) Employee Benefit Assets. Any assets relating to the Benefit
-----------------------
Plans (as defined in Section 3.12(b)).
(vii) Transferred or Disposed Assets. Any assets transferred or
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otherwise disposed of by BFC in the ordinary course of the Business prior to the
Closing and not in violation of this Agreement, or with Buyer's prior written
consent.
(viii) BFC Trademarks. (i) All trademarks, service marks and trade
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names of BFC and its affiliates incorporating the word "Xxxxxx", "Meadow Gold"
or "Xxxxx" and any logos related thereto or used in connection therewith
including; (ii) any translations, adaptations, derivations or combinations of
any of the items indicated in (i); and (iii) all goodwill associated with any of
the items indicated in (i) and (ii).
(ix) Certain Cremora Assets. All of BFC's right, title and interest
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in the intangible property described in Section 1.2(a)(iii) relating to powdered
non-dairy xxxxxxx sold under the Cremora brand name and related names in those
territories set forth on Schedule 1.3(a)(i).
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(x) Excluded Receivables. The accounts receivables and other
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receivables of the Business including without limitation, the receivables set
forth on Schedule 1.3(a)(x), but excluding the accounts receivables and other
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receivables of the Business arising on or after the Closing Date.
(xi) Affiliate Contracts. All Contracts between BFC and any
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affiliate of BFC (other than any portfolio company of an investment fund
organized by Kohlberg Kravis Xxxxxxx & Co., except Xxxxxx, Inc. ("Xxxxxx")),
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except for Contracts contemplated by this Agreement, Contracts listed on
Schedule 1.3(a)(xi) or Contracts for the purchase of inventory or raw materials.
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(xii) UPC Number. Any manufacturer's identification number included
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in a Universal Product Code number, provided, however, that Buyer shall be able
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to sell finished goods inventory existing as of the Closing Date, use any
packaging existing as of the Closing Date or resell any returned inventory
containing the manufacturer's identification number used by BFC.
(xiii) Other Excluded BFC Assets. Such other specific assets used
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in the Business as are listed on Schedule 1.3(a)(xiii).
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(b) Excluded BFC Investments Assets. It is expressly agreed that BFC
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Investments will retain and Buyer will not acquire (except pursuant to the
License Agreement referred to in Section 5.6(a)) any interest in (i) all
trademarks, service marks and trade names of BFC Investments and its affiliates
incorporating the word "Xxxxxx", "Meadow Gold" or "Xxxxx" and any logos related
thereto or used in connection therewith including; (ii) any translations,
adaptations, derivations or combinations of any of the items indicated in (i);
and
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(iii) all goodwill associated with any of the items indicated in (i) and (ii)
(the "Excluded BFC Investments Assets"; and together with the Excluded BFC
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Assets, the "Excluded Assets").
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1.4 Assumed Liabilities. On the Closing Date, Buyer assumes and agrees to
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pay, perform and discharge when due, all debts, liabilities and obligations
whatsoever, other than Excluded Liabilities (as defined below) of BFC and BFC
Investments, arising out of or pertaining principally to the Business or the
Assets whether arising before or after the Closing, and whether known or
unknown, fixed or contingent, to the extent the same are unpaid, undelivered or
unperformed on the Closing Date, including, but not limited to, the following:
(a) all liabilities of the Business (other than Excluded Liabilities)
included in the Financial Statements, to the extent they are still in
existence on the Closing Date including the notes thereto, and all
liabilities incurred in the ordinary course of the Business subsequent to
the date of the most recent Financial Statements;
(b) all debts, obligations and liabilities in respect of the Business
or the Assets arising or incurred by Buyer on and after the Closing Date;
(c) all debts, obligations and liabilities which arise on account of
Buyer's operation of the Business, the use of the Assets, and/or sale of
any products manufactured and/or sold by Buyer on and after the Closing
Date;
(d) all liabilities with respect to all actions, suits, proceedings,
disputes, claims or investigations arising out of or related principally to
the Business or that otherwise arise out of or are related to the Assets;
(e) all obligations and liabilities of BFC and BFC Investments under
the Contracts including the BFC Leases and Licenses and Permits, but only
to the extent
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the foregoing are validly assigned to Buyer, provided, that Contracts set
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forth on Schedule 3.7(b) shall not be assigned to Buyer without Buyer's
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consent (which may be withheld in Buyer's sole discretion);
(f) all workers' compensation, product liability, automobile
liability and general liability claims of BFC relating principally to the
Business which occurred prior to the Closing Date, or any incident arising
prior to the Closing Date which results in any such claims after the
Closing Date;
(g) all obligations and liabilities of BFC arising as a result of at
anytime being the owner, occupant of, or the operator of the activities
conducted at any of the BFC Real Properties, including all obligations and
liabilities relating to personal injury, property damage and Environmental
Liability (as defined in Section 3.15);
(h) all obligations and liabilities assumed by Buyer pursuant to
Section 5.7 hereof;
(i) all obligations and liabilities of BFC and BFC Investments for
Taxes owed in respect of the Business assumed by Buyer pursuant to Sections
2.3 or 11.3 hereof; and
(j) all other liabilities and obligations of BFC and BFC Investments
arising principally out of or related principally to the Business or the
Assets (the debts, liabilities and obligations described in this Section
1.4, collectively, the "Assumed Liabilities").
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1.5 Excluded Liabilities.
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It is expressly agreed that BFC and BFC Investments will retain and Buyer
shall not assume, or in any way be liable or responsible for, any of the
following liabilities of BFC or the Business (the "Excluded Liabilities"):
--------------------
(a) all obligations and liabilities principally arising out of or
relating to the Excluded Assets;
(b) all debts, liabilities or obligations of BFC and BFC Investments
that do not arise out of or are not principally related to the Business;
(c) all obligations and liabilities of BFC retained pursuant to
Section 5.7 hereof;
(d) all trade payables, trade promotion or pricing allowances (other
than liabilities relating to returns and coupons and sales incentives payable to
brokers and Sun Hing, but including slotting allowances) and all liabilities for
broker commissions earned based on sales prior to the Closing Date, in each case
which would be reflected as a liability on a balance sheet of BFC prepared in
accordance with generally accepted accounting principles as of the Closing Date,
provided, however, that with respect to any particular trade promotion or
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pricing allowance, such liability shall be an Excluded Liability only if BFC
shall have shipped inventory to the applicable customer in connection with such
trade promotion or pricing allowance prior to the Closing Date;
(e) all liabilities relating to coupons "dropped" by BFC prior to the
earlier of the Closing Date and January 1, 1998, but only to the extent such
coupons are received by Buyer for redemption prior to June 30, 1998;
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(f) any liability for credits or refunds due to customers resulting
from any bona fide return of inventory prior to the 60th day following the
Closing Date (or, in the case of returns of mincemeat or egg nog, June 30,
1998), provided, however, that the amount of the liability which is an Excluded
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Liability shall be limited to the amount in excess of inventory standard cost
with respect to any such saleable inventory (x) with an expiration date that is
more than 90 days following the date such inventory is returned (or, in the case
of returns of mincemeat or egg nog, with an expiration date that is after
December 31, 1998) and (y) which, when combined with Buyer's then existing
inventory, does not constitute an amount of inventory in excess of the amount
reasonably expected to be sold during the 12 month period following such return
date;
(g) all obligations and liabilities relating to sales incentives
payable to brokers to the extent based on sales prior to January 1, 1998 and all
obligation and liabilities relating to sales volume incentives under BFC's
arrangements with Sun Hing to the extent based on sales prior to January 1,
1998;
(h) any liability or obligation of BFC owing to any stockholder,
subsidiary or affiliate thereof (other than any portfolio company of an
investment fund organized by Kohlberg Kravis Xxxxxxx & Co., except Xxxxxx),
other than liabilities or obligations for the purchase of inventory or raw
materials;
(i) any liabilities related to (i) income Taxes of any of BFC or BFC
Investments (ii) except to the extent provided under Sections 2.3 or 11.3, Taxes
attributable to the transfer of the Assets pursuant to this Agreement, (iii) all
other Taxes relating to the Business and attributable to periods ending prior to
the Closing Date, (iv) all other Taxes not
15
attributable to the Business and (v) Taxes of any other Person pursuant to an
agreement or otherwise; and
(j) any other obligations and liabilities for which BFC and BFC
Investments have expressly assumed responsibility pursuant to this Agreement.
2 PURCHASE PRICE AND ADJUSTMENTS
------------------------------
2.1 Purchase Price.
--------------
(a) The total consideration to be paid by Buyer for the Business
pursuant to this Agreement shall be:
(i) Forty Million Dollars ($40,000,000), subject to the
adjustments as provided in Section 2.2, payable to BFC in respect of the
BFC Assets (other than goodwill, going concern value and other intangibles)
(the "BFC Purchase Price");
------------------
(ii) Three Hundred Forty-Seven Million Five Hundred Thousand
Dollars ($347,500,000) payable to BFC (for itself and as agent for BFC
Investments, Xxxxxx, BDH Two, Inc. ("BDH") and/or Xxxxxx Foods Investments
---
Corporation), in respect of (A) the BFC Investments Assets, (B) the
Assignments (as defined in Section 5.6(a)) by BFC Investments and BFC,
respectively, of their rights under the Trademark License Agreement dated
October 1, 1996, between Xxxxxx and BFC Investments and the Trademark
License Agreement dated October 1, 1996, between BFC Investments and BFC
(collectively, the "Existing License Agreements") relating to the
---------------------------
trademarks listed in the appendices to the Xxxxxx License Agreement (as
defined in Section 5.6(a)), (C) subsequent to the termination of the
Existing License Agreements (as to the portions thereof which shall have
been assigned pursuant to the Assignments), the execution and delivery of
the Xxxxxx License Agreement, (D) the covenants contained in
16
Sections 5.19(a) and 5.19(b) below and (E) goodwill, going concern value
and other intangibles (the "IP Purchase Price" and, together with the BFC
-----------------
Purchase Price, the "Purchase Price"); and
--------------
(iii) the assumption by Buyer of the Assumed Liabilities.
Buyer, BFC and BFC Investments agree to allocate the Purchase Price in
accordance with the rules under Section 1060 of the Internal Revenue Code
of 1986, as amended (the "Code"), and the Treasury Regulations promulgated
----
thereunder and to cooperate in good faith with each other to allocate the
Purchase Price among the Assets to the extent necessary to comply with all
other applicable laws, including, without limitation, the transfer tax laws
applicable to the transfer of any of the BFC Real Properties. BFC and
Buyer agree to act in accordance with such allocations (including any
modifications thereto reflecting any post-closing adjustments) in any
relevant Tax returns or filings, including any forms or reports required to
be filed pursuant to Section 1060 of the Code, the Treasury Regulations
promulgated thereunder or any provisions of local, state and foreign law
("1060 Forms"), and to cooperate in the preparation of any 1060 Forms and
------------
to file such 1060 Forms in the manner required by applicable law. Buyer
and BFC Investments recognize that the Purchase Price does not include
Buyer's acquisition expenses and that Buyer will allocate such expenses
appropriately.
(b) Payment of Purchase Price. The BFC Purchase Price shall be
-------------------------
payable in immediately available federal funds to such bank accounts, in the
United States, as shall be designated by BFC not less than two business days
prior to Closing, and the IP Purchase
17
Price shall be payable in immediately available federal funds to such bank
accounts, in the United States, as shall be designated by BFC not less than two
business days prior to Closing.
2.2 Inventory Adjustments.
---------------------
(a) Calculation of the Inventory Adjustments. The BFC Purchase Price
----------------------------------------
shall be increased or decreased, on a dollar-for-dollar basis, by the amount by
which the Closing inventory as defined in Schedule 2.2(a) (the "Closing
--------------- -------
Inventory") of the Business is finally determined, accepted, deemed accepted or
---------
agreed pursuant to Section 2.2(d) below to be greater or less than $25,000,000
(the "Target Inventory").
----------------
(b) Closing Estimate. At least three business days prior to Closing,
----------------
BFC shall deliver to Buyer its good faith estimate of the Closing Inventory (the
"Closing Estimate"). Such estimate shall be based on the books and records of
----------------
the Business and the valuation principles set forth in Section 2.2(c) to be used
to prepare the Closing Statement (as defined in Section 2.2(c)). If the Closing
Estimate is greater than the Target Inventory, then Buyer shall pay to BFC the
amount of such excess at the Closing in the manner described in Section 2.1(b).
If the Closing Estimate is less than the Target Inventory, then the BFC Purchase
Price payable by Buyer at the Closing shall be reduced by the amount of such
deficiency.
(c) Closing Inventory. Within sixty (60) days after the Closing,
-----------------
Buyer will prepare and deliver to BFC a calculation of the Closing Inventory of
the Business dated as of the Closing Date (the "Closing Statement"). The
-----------------
Closing Statement shall be prepared by Buyer in accordance with Schedule 2.2(a)
---------------
and otherwise in accordance with generally accepted accounting principles
applied on a basis consistent with the 1997 Audited Financial Statements (as
defined in Section 3.4(b)). Notwithstanding anything to the contrary contained
18
herein, the Closing Inventory shall not include (i) any finished goods inventory
with an expiration date during the 90 day period commencing on the Closing Date
(or, in the case of mincemeat or egg nog, with an expiration date prior to
January 1, 1999) or (ii) any finished goods inventory, work in process, raw
materials, packaging, packaging materials or shipping containers in excess of
amounts reasonably expected to be sold or used in production during the 12 month
period commencing on the Closing Date.
(d) Closing Calculation. BFC shall be entitled to full access to the
-------------------
relevant records and working papers prepared by or for Buyer to aid in its
review of the calculation of Closing Inventory set forth on the Closing
Statement. If BFC believes that the Closing Inventory calculation (hereinafter
the "Closing Calculation") has not been properly calculated in accordance with
-------------------
the calculation methodologies set forth in this Section 2.2, it shall, within
thirty (30) days after receipt of the Closing Calculation, give written notice
(the "Objection") to Buyer, setting forth the basis of its belief in reasonable
---------
detail and to the extent practicable the adjustments to the Closing Calculation
which BFC believes should be made. Failure to so notify Buyer shall constitute
acceptance and approval of the Closing Calculation. If Buyer agrees that any
change proposed by BFC is appropriate, the change shall be made to the Closing
Calculation. If any proposed change is disputed by Buyer, then BFC and Buyer
shall negotiate in good faith to resolve such dispute as expeditiously as
possible. If, after a period of thirty (30) days following the date on which BFC
delivers the Objection, there remains any dispute as to the Closing Calculation,
then, the New York City office of Ernst & Young or another major accounting firm
jointly selected by BFC and Buyer and with no ties to either Buyer or BFC (the
"Neutral Accounting Firm"), shall be engaged to resolve any remaining disputes.
-----------------------
The Neutral Accounting Firm shall act as an arbitrator to determine only those
19
issues still in dispute. The Neutral Accounting Firm's determination, based upon
the calculation methodologies set forth in this Section 2.2, shall be made
within thirty (30) days following the date on which the dispute is submitted,
shall be set forth in a written statement delivered to BFC and Buyer, and shall
be final, binding and conclusive. The fees and any expenses of the Neutral
Accounting Firm shall be shared equally by BFC and Buyer.
(e) Payment of BFC Purchase Price Adjustment. If the Closing
----------------------------------------
Inventory is greater than the Closing Estimate, then Buyer shall pay to BFC the
amount of such excess. If the Closing Inventory is less than the Closing
Estimate, then BFC shall pay to Buyer the amount of such deficiency. Any such
payment shall be made by wire transfer to an account designated by BFC or Buyer,
as the case may be, in United States Dollars, in immediately available federal
funds within three (3) business days after (i) the Closing Calculation has been
accepted or deemed accepted by BFC pursuant to Section 2.2(d) or (ii) any
proposed changes have been agreed upon by BFC and Buyer pursuant to Section
2.2(d) or (iii) following delivery to BFC and Buyer of the determination by the
Neutral Accounting Firm as described in Section 2.2(d) together with interest
from the Closing Date to the date of payment at the "base rate" of Citibank,
N.A. or any successor thereto in New York, New York on the Closing Date, based
on a 360-day year.
2.3 Proration of Payroll and Real and Personal Property Taxes. Payroll
---------------------------------------------------------
related taxes (including unemployment and FICA taxes) and real and personal
property Taxes and assessments on the Assets for any taxable period commencing
prior to the Closing Date and ending after the Closing Date shall be prorated on
a per diem basis between Buyer, on the one hand, and BFC and BFC Investments, on
the other hand, as of the Closing Date. All such prorations shall be allocated
so that items relating to time periods ending prior to the
20
Closing Date shall be allocated to BFC and BFC Investments, and items relating
to time periods beginning on or after the Closing Date shall be allocated to
Buyer, provided, however, that the parties shall allocate any real property Tax
in accordance with Section 164(d) of the Code. The amount of all such
prorations shall be settled and paid on the Closing Date, provided that final
payments with respect to prorations that are not able to be calculated as of the
Closing Date shall be calculated and paid as soon as practicable thereafter. If
any of the tax rates for payroll-related taxes or real or personal property
taxes for the current taxable period are not established by the Closing Date,
the prorations shall be made on the basis of the rate in effect for the
preceding taxable period, and such proration shall be adjusted upon presentation
of written evidence by BFC or Buyer, as the case may be, that the actual taxes
paid differ from the amount assumed on the Closing Date.
3 REPRESENTATIONS AND WARRANTIES OF BFC
-------------------------------------
BFC represents and warrants to Buyer that:
3.1 Corporate Existence.
-------------------
BFC is a corporation duly organized and validly existing and in good
standing under the laws of the jurisdiction of its incorporation and BFC
Investments is a limited partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and each of
BFC and BFC Investments has the requisite power and authority to own, lease and
operate the properties and assets used in the Business being sold hereunder and
to carry on the Business as the same is now being conducted. BFC and BFC
Investments are each duly authorized, qualified or licensed to do business as a
foreign corporation or a limited partnership and are each in good standing in
every jurisdiction wherein, by reason of the nature of the Business or the
character of the Assets, the failure to be so qualified would
21
have an effect on or result in a change in the Business, that individually or in
the aggregate, is materially adverse to the assets (other than Excluded Assets),
results of operations, condition (financial or otherwise) or business of the
Business taken as a whole or on the ability of BFC and BFC Investments to
consummate the transactions contemplated hereby (a "Material Adverse Effect").
-----------------------
BFC is the sole general partner of BFC Investments. BFC Investments, X.X.X.
Xxxxxxxxxx, X.X., Xxxxxx, XXX and The Xxxxxx Company, Limited are each
affiliates of BFC.
3.2 Corporate Authority.
-------------------
This Agreement and the other agreements delivered by BFC and BFC
Investments hereunder (collectively, the "Transaction Documents"), and the
---------------------
consummation of all of the transactions provided for herein and therein have
been duly authorized by the Board of Directors of BFC and, where appropriate, by
BFC Investments, and by all requisite corporate, shareholder, partnership or
other action, and each of BFC and, where applicable, BFC Investments has full
power and authority to execute and deliver the Transaction Documents and to
perform its obligations hereunder and thereunder. This Agreement has been duly
executed and delivered by BFC and, where applicable, BFC Investments and
constitutes a valid and legally binding obligation of BFC and, where applicable,
BFC Investments enforceable in accordance with its terms except as
enforceability may be (i) limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditor's rights, or (ii) subject to general
principles of equity. The execution and delivery of the Transaction Documents
by BFC and, where applicable, BFC Investments and the consummation by BFC and,
where applicable, BFC Investments of the transactions contemplated hereby and
thereby will not (x) violate or conflict with any provision of the Certificate
of Incorporation or
22
By-Laws of BFC nor the partnership agreement or certificate of limited
partnership of BFC Investments or (y) result in any breach or constitute any
default under any contract, indenture, mortgage, lease, note or other agreement
or instrument to which BFC or BFC Investments is subject or is a party, except,
in the case of clause (y), for any such breach or default which would not have a
Material Adverse Effect.
3.3 Governmental Approvals; Consents.
--------------------------------
BFC and BFC Investments are not subject to any order, judgment or decree
which would prevent the consummation of the transactions contemplated hereby.
No claim, legal action, suit, arbitration, governmental investigation, action,
or other legal or administrative proceeding is pending or, to the knowledge of
BFC, threatened against BFC or BFC Investments which would be reasonably likely
to enjoin or delay the transactions contemplated hereby. Except as set forth in
Schedule 3.3 hereto, no consent, approval, order or authorization of, license or
------------
permit from, notice to or registration, declaration or filing with, any
governmental authority or entity, domestic or foreign, or of any third party, is
or has been required on the part of BFC or BFC Investments in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby except for such consents, approvals, orders or
authorizations of, licenses or permits, filings or notices the failure of which
to obtain or make would not have a Material Adverse Effect.
3.4 Financial Statements. (a) Schedule 3.4 contains a copy of (i) the
-------------------- ------------
audited combined balance sheet of the Business as of December 31, 1996 and the
audited combined statements of operations and cash flows relating to the
Business for the twelve months ended December 31, 1996 and December 31, 1995,
including any related notes, together with the report thereon of Deloitte &
Touche L.L.P., the independent public accountants of the
23
Business (collectively, "Annual Audited Financial Statements"), and (ii) the
-----------------------------------
audited combined balance sheet of the Business as of September 27, 1997 and the
related audited combined statements of income and cash flows relating to the
Business, including any related notes, for the nine months ended September 27,
1997, together with the report thereon of such independent public accountants
(the "1997 Audited Financial Statements" and, together with the Annual Audited
---------------------------------
Financial Statements, the "Financial Statements"). The Financial Statements
--------------------
have been prepared from the books and records relating to the Business. Each of
the balance sheets included in the Financial Statements, in all material
respects, fairly presents the combined financial position of the Business as of
its date, and the other related statements included in the Financial Statements,
in all material respects, fairly present the combined financial position of the
Business for the periods presented therein, subject to normal year-end
adjustments in the case of the 1997 Audited Financial Statement which will not
be material in amount, and in each case in accordance with generally accepted
accounting principles, applied on a consistent basis during the periods
involved, except as otherwise noted therein.
(b) All of the Financial Statements are qualified by the fact that the
Business has not operated as a separate "stand-alone" entity within BFC. As a
result, the Business received certain allocated charges and credits as discussed
more fully in the notes accompanying the Financial Statements. Such charges and
credits, while believed by BFC to be reasonable, do not necessarily reflect the
amounts which would have resulted from arms-length transactions.
3.5 Absence of Changes.
------------------
Except as otherwise disclosed in the Schedules hereto or as contemplated by
this Agreement, since September 30, 1997, (i) the Business has been conducted in
all material respects in the ordinary course consistent with past practice and
(ii) there has not been any
24
change in the Business or its financial condition, other than seasonal changes,
changes relating to the economy in general or changes relating to the industry
in which the Business operates in general, which has had a Material Adverse
Effect. Since September 30, 1997, except as otherwise disclosed in the Schedule
--------
3.5 or the other Schedules hereto or as contemplated by this Agreement, BFC has
---
not:
(a) failed to pay any creditor any amount owed to such creditor when
due (after the expiration of applicable grace periods) arising from the
operation of the Business, other than in the ordinary course of business
consistent with past practice or amounts being contested in good faith and
for which adequate reserves have been provided;
(b) failed to discharge or satisfy any lien on any of the Assets
other than Permitted Liens;
(c) mortgaged, pledged or subjected to any lien, any of the Assets,
except for Permitted Liens;
(d) sold or otherwise transferred any of the assets of the Business
material to the Business or cancelled any debts or claims material to the
Business or waived any rights material to the Business, except, in each
case described in this clause (d), in the ordinary course of business
consistent with past practice;
(e) disposed of any patents, trademarks or copyrights or any patent,
trademark, or copyright applications used principally in the operations of
the Business;
(f) defaulted on any material obligation relating to the operations
of the Business;
25
(g) written down the value of any inventory specifically relating to
the Business except in the ordinary course of business consistent with past
practice;
(h) granted any allowances or sold inventory significantly in excess
of reasonably anticipated consumption for the near term (commonly referred
to as "trade loading") other than in the ordinary course of business;
(i) granted any increase in the compensation or benefits of Eligible
Employees (as defined in Section 5.7(a)), other than increases in
accordance with past practice and not exceeding 5% of annual compensation,
as a result of collective bargaining or as required by any Benefit Plan, or
entered into any employment or severance agreement or arrangement with any
of them; or
(j) entered into any agreement or made any commitment to do any of
the foregoing.
3.6 Real and Personal Properties.
----------------------------
(a) Schedule 3.6(a)(i)(1) lists the real property owned in fee by BFC
---------------------
related to the Business (each, a "BFC Owned Real Property", and collectively,
-----------------------
the "BFC Owned Real Properties"). BFC owns good and marketable, fee simple
-------------------------
title to the BFC Owned Real Properties and owns all of the improvements located
thereon free and clear of all liens, charges and other encumbrances, except (i)
as set forth on Schedule 3.6(a)(ii); (ii) as disclosed in the Financial
-------------------
Statements; (iii) liens for taxes, assessments and other governmental charges
not yet due and payable or, if due, (A) not delinquent or (B) being contested in
good faith by appropriate proceedings during which collection or enforcement
against the property is stayed and for which adequate reserves have been
provided for in the Financial Statements; (iv) with respect to real property,
(A) easements, licenses, covenants, rights-of-way and other
26
similar restrictions, including, without limitation, any other agreements or
restrictions which would be shown by a current title report, (B) any conditions
that may be shown by a current survey, title report or physical inspection and
(C) zoning, building and other similar restrictions, provided that same are not
materially violated by the existing improvements, so long as none of (A), (B) or
(C) restrict the use of such real property substantially as currently used; and
(v) other liens, charges or other encumbrances that do not, individually or in
the aggregate, interfere materially with the use, operation or enjoyment of any
of the Assets as presently being used (such liens, charges and encumbrances
described in clauses (i)-(v) hereof are referred to herein as "Permitted
---------
Liens"), provided, however, that none of the foregoing materially interfere with
----- -------- -------
access to or use of such real property as the same is presently being used or
occupied. The BFC Owned Real Properties constitute all of the real property
owned by BFC and primarily used in the Business. Except as set forth on
Schedule 3.6(a)(ii), none of the BFC Owned Real Properties is subject to any
-------------------
right or option of any other person to purchase or lease or otherwise obtain
title to, or an interest in, such BFC Owned Real Properties. No person other
than BFC has any right to use, occupy or lease any of the BFC Owned Real
Properties.
(b) Schedule 3.6(a)(i)(2) lists all of the leases, subleases, and
---------------------
occupancy agreements, as well as the consent required, if any, in order to
assign the lease or sublet the subject premises, of real properties leased,
subleased or occupied by BFC relating principally to the Business (whether
entered into as lessor, lessee, sublessor or sublessee) together with any
modifications, amendments, extensions and renewals of the same (collectively,
the "BFC Leases"; the real property leased by BFC pursuant to a BFC Lease, the
----------
"BFC Leased Real Properties"; the BFC Owned Real Properties and the BFC Leased
--------------------------
Real Properties,
27
collectively, the "BFC Real Properties"). True and complete copies of the BFC
-------------------
Leases have been made available by BFC to Buyer. BFC has a valid leasehold
interest in the BFC Leased Properties and each of the BFC Leases is valid and
binding and in full force and effect and has not been modified or amended except
as indicated in the lease documents made available to Buyer. Except as set
forth on Schedule 3.6(a)(ii), neither BFC nor, to BFC's best knowledge, any
-------------------
other party, is in default under any of the BFC Leases and no event exists
which, with the giving of notice or lapse of time or both, would become a
default on the part of any party under any BFC Lease. No person other than BFC
has any right to use, occupy or lease any of the BFC Leased Real Properties.
(c) Except as disclosed on Schedule 3.6(a)(ii), the leasehold interests
-------------------
relating to the BFC Leases are free and clear of all mortgages, deeds of trust,
liens, pledges, leases, subleases, licenses, occupancy agreements and any
charges or security interests in or on the BFC Real Properties and any interest
of a vendor or a lessor under any conditional sale agreement, capital lease or
title retention agreement relating to the BFC Real Properties, other than the
Permitted Liens.
(d) No eminent domain, condemnation, incorporation, annexation or
moratorium or similar proceeding has been commenced or, to BFC's knowledge,
threatened by an authority having the power of eminent domain to condemn any
part of the BFC Real Properties or any improvements thereon.
(e) There is no violation of a condition or agreement contained in any
easement, restrictive covenant or any similar instrument or agreement affecting
any of the BFC Owned Real Properties. None of the BFC Owned Real Properties is
located in any conservation or historic district, or is historically certified,
subject to historic preservation rules, regulations,
28
requirements or designated as a landmark. No application or proceeding for any
such certification or designation is pending or, to BFC's knowledge, is
threatened. Except as set forth on Schedule 3.6(e), none of the building
---------------
improvements on the BFC Owned Real Properties are located in an area that has
been identified as having special flood hazards. Each of the BFC Real
Properties, is designated as a separate tax lot.
(f) To BFC's knowledge, there are no proposed reassessments of any of the
BFC Real Properties by any taxing authority and there are no threatened or
pending special assessments or other actions or proceedings that could give rise
to an increase in real property taxes or assessments against any of the BFC Real
Properties, provided, however, that this representation shall not be applicable
to any reassessment resulting from the Purchase.
(g) Each of the BFC Real Properties is an independent unit which does not
now rely on any facilities located on any property which is not part of the BFC
Real Properties.
(h) The improvements at the BFC Real Properties are in materially good
condition and repair, ordinary wear and tear excepted, and have not suffered any
casualty or other material damage which has not been repaired in all material
respects. To the knowledge of BFC, there is no material structural, mechanical
or other significant defect or deficiency in the improvements located on any of
the BFC Owned Real Properties.
(i) Immediately following consummation of the Purchase, BFC will not own
or lease any real property contiguous or adjacent to any of the BFC Real
Properties.
(j) BFC has not received any notice of any material violation of any
applicable building, zoning, land use or other similar statutes, laws,
ordinances, regulations, permits or other requirements, including, without
limitation, the Americans With Disabilities Act, with respect to the BFC Real
Properties, and no such violations exist. Except as set forth on
29
Schedule 3.6(j), BFC has no knowledge and has not received any notice of any
---------------
pending or contemplated rezoning proceeding affecting any of the BFC Owned Real
Properties.
(k) BFC has not received any notice from the utility company or
municipality of any fact or condition which could result in the discontinuation
of presently available or otherwise necessary sewer, water, electric, gas,
telephone or other utilities or services for any of the Owned BFC Real
Properties.
(l) BFC has paid or will pay prior to Closing all brokerage and finders
fees and commissions due from BFC with respect to any of the BFC Real
Properties.
(m) BFC is not a "foreign person" within the meaning of Section 1445(f) of
the Code.
3.7 Contracts.
---------
(a) Except as otherwise disclosed in Schedule 3.7, as of the date of
------------
this Agreement there are no outstanding commitments, contracts, indentures and
agreements, written or oral, to which BFC or BFC Investments is a party to or by
which BFC or BFC Investments is bound that relate principally to the Business
including, without limitation, personal property leases, purchase orders for
inventory, service or maintenance agreements, broker agreements, sales
representative agreements and license agreements (hereinafter "Contracts") that
---------
(i) involve commitments by BFC or BFC Investments for terms of twelve (12)
months or longer and involve payment of more than $50,000; (ii) involve payment
of more than $100,000; (iii) have been entered into with salesmen, commissioned
agents, or other sales representatives, or with distributors, dealers or
customers and involve payment of more than $50,000 (other than purchase orders
in the ordinary course); (iv) involve employment or consulting agreements; (v)
involve contracts relating to any indebtedness (as defined under generally
accepted accounting principles) or the mortgaging, pledging or
30
otherwise placing a lien on any Asset (other than Permitted Liens or liens on
equipment in connection with equipment leases); (vi) involve contracts with any
affiliate of BFC or BFC Investments involving payments of more than $50,000; or
(vii) involve contracts that would prohibit the Buyer from freely engaging in
the Business anywhere in the United States and Canada, or, to the knowledge of
BFC, any other country, and in each case described in clauses (i) through (vii),
are not terminable by their terms, without penalty, on thirty (30) days or less
notice. Contracts disclosed in Schedule 3.7 are hereafter referred to as the
------------
"Disclosed Contracts".
-------------------
(b) BFC has furnished or made available to Buyer a true and correct
copy of each Disclosed Contract, other than the Disclosed Contracts set forth on
Schedule 3.7(b). Each Contract which is to be assigned to Buyer pursuant to
---------------
this Agreement is valid and in full force and effect according to its terms, and
BFC is not, and to BFC's knowledge, no other party thereto is in material
default or breach under any such Contract and there are no claims affecting the
same of any kind pending as of which BFC has notice except where such failure to
be valid or in full force or effect or such breach or claim would not have a
Material Adverse Effect; and
(c) Except as listed in Schedule 3.7, all Disclosed Contracts to be
------------
assigned to Buyer in accordance with this Agreement are assignable without the
requirement of consent from any other party thereto except for those Disclosed
Contracts the failure to be assignable would not have a Material Adverse Effect.
3.8 Litigation, Agencies.
--------------------
Except as set forth in Schedule 3.8, there are no claims, actions, suits,
------------
proceedings (whether adjudicatory, rulemaking, licensing, or otherwise) or
investigations pending or, to the
31
knowledge of BFC, threatened in law or in equity, or before any governmental
agency which, if determined or resolved adversely or in accordance with the
plaintiff's demands would reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 3.8, BFC and BFC Investments are not in
------------
default under any judgment, order, injunction or decree of any court or
government agency relating to the Business or the Assets.
3.9 Intangible Property Rights.
--------------------------
(a) Schedule 3.9(a)(i) lists all material unexpired domestic and
------------------
foreign patents and patent applications, as well as all material reissues,
divisionals, continuations and continuation-in-part applications and any patents
issuing thereon and all renewals and extensions thereof, and all material
license agreements and other agreements which relate to inventions and
discoveries and any patent applications and patents thereon, as well as
improvements therein used principally in connection with the Business (the
"Patent Rights"). Except as set forth in Schedule 3.9(a)(ii) and except as
------------- -------------------
would not have a Material Adverse Effect, (i) BFC and its affiliates own, are
licensed or have the right to use the Patent Rights and the Technology (as
defined below) (x) in the United States and Canada and (y) to the knowledge of
BFC, outside the United States and Canada, in each case (but only to the
knowledge of BFC in cases described in clause (y)) free and clear of all liens,
encumbrances, equities and other restrictions; (ii) there are no pending claims
challenging the validity or ownership of the Patent Rights or Technology owned
by BFC and its affiliates or the right of BFC and its affiliates to use or
transfer the Patent Rights or Technology in the United States or Canada or, to
the knowledge of BFC, outside the United States and Canada; (iii) the issued
U.S. and Canadian patents under the Patent Rights owned by BFC and its
affiliates are valid and subsisting and, to BFC's knowledge, any patents issued
outside the United States and
32
Canada under the Patent Rights owned by BFC and its affiliates are valid and
subsisting, and to BFC's knowledge, none of the claims of the foregoing patents
is now being infringed by others; (iv) there are no licenses or sublicense
agreements now in effect regarding the use by BFC and its affiliates of the
Patent Rights or Technology in the United States and Canada, or to the knowledge
of BFC, outside of the United States and Canada; and (v) to BFC's knowledge, (x)
BFC and its affiliates are not infringing any U.S. or foreign patent owned by
third parties in the current operation of the Business and (y) no claim is now
pending or is threatened to such effect. No ingredient, including, without
limitation, any ingredient used in the recipes relating to the Business, is
owned or procurable solely through BFC or any of its controlled affiliates. As
used in this Agreement, the term "Technology" shall mean the patterns, plans,
----------
designs, research data, trade secrets and other proprietary know-how, formulae
and manufacturing procedures and processes, new material and product
specifications, recipes (both for manufacturing as well as for home or end-user
use of products), flavors, ingredients, operating manuals, drawings, technology,
manuals, data, business information and files and records, procedures, research
and development records, computer programs, software and databases (including
source code, object code, development documentation, programming tools,
drawings, specifications and data) and all licenses or other rights to use any
such technical information and know-how of others developed, relating to or used
principally in connection with the Business.
(b) Schedule 3.9(b)(i) lists (i) all material trademarks and service
------------------
marks and all registrations and applications pertaining thereto (including all
documents or files pertaining thereto) and trade names; (ii) any and all
material licenses or other rights to use trademarks or service marks owned by
others and (iii) any material trade dress associated therewith, in each
33
case used principally in connection with the Business (the "Trademark Rights").
----------------
Except as set forth in Schedule 3.9(b)(ii) and except as would not have a
-------------------
Material Adverse Effect, (i) BFC and its affiliates own, are licensed or have
the full right to use and transfer the United States federal and Canadian
Trademark Rights and trade dress, and, to the knowledge of BFC, the state
Trademark Rights and the Trademark Rights in countries other than the United
States and Canada; (ii) (x) except with respect to those items noted with two
asterisks on Schedule 3.9(b)(i), all registered United States federal and
------------------
Canadian Trademark Rights and trade dress owned by BFC and its affiliates are
valid and subsisting, (y) to the knowledge of BFC, registered state Trademark
Rights and trade dress owned by BFC and its affiliates are valid and subsisting
and (z) to the knowledge of BFC, any registered Trademark Rights and trade dress
owned by BFC and its affiliates outside the United States and Canada are valid
and subsisting, in each case (but only to the knowledge of BFC in cases
described in clauses (y) and (z)), free and clear of any encumbrances or rights
of third parties which would restrict Buyer's exclusive right to use or transfer
the registered Trademark Rights and trade dress; (iii) to BFC's knowledge, none
of the Trademark Rights infringe the trademark rights of third parties; and (iv)
no claim by third parties with regard to the use in the United States or Canada
(or to BFC's knowledge, in any other country) of any of the Trademark Rights and
trade dress owned by BFC and its affiliates is pending or, to BFC's knowledge,
has been made or is threatened, and, to BFC's knowledge, none of the Trademark
Rights is being infringed by others. BFC represents that, as soon as is
practicable after the date hereof, but in no event later than 90 days after the
date hereof, it will refrain from using and will seek to cancel all trademark
registrations in its name or in the name of its affiliates that combine, in
34
whole or in any material portion, trademarks described on Schedule
--------
1.2(a)(iii)(B) or Schedule 3.9(b)(i) with the Licensed Trademarks (as defined in
-------------- ------------------
the Xxxxxx License Agreement).
(c) Schedule 3.9(c)(i) lists all material copyrights and copyright
------------------
registrations and copyright applications (pertaining thereto) and all material
licenses or other rights to use the copyrights of others, in each case used
principally in connection with the Business (the "Copyright Rights"). Except as
----------------
disclosed in Schedule 3.9(c)(ii) and except for those claims that would not have
-------------------
a Material Adverse Effect, (i) BFC and its affiliates own, are licensed or have
the full right to use and transfer the United States and Canadian Copyright
Rights and, to the knowledge of BFC, the Copyright Rights in countries outside
the United States and Canada; (ii) (x) all registered United States and Canadian
Copyright Rights owned by BFC and its affiliates are valid and subsisting and
(y) to the knowledge of BFC, any registered Copyright Rights owned by BFC and
its affiliates outside the United States and Canada are valid and subsisting, in
each case (but only to the knowledge of BFC in cases described in clause (y)),
free and clear of any encumbrances or rights of third parties which would
restrict Buyer's exclusive right to use or transfer the registered Copyright
Rights; (iii) to BFC's knowledge, none of the Copyright Rights infringe the
copyright rights of third parties; and (iv) no claim by third parties with
regard to the use in the United States or Canada (or to BFC's knowledge, in any
other country) of any of the Copyright Rights owned by BFC and its affiliates is
pending or, to BFC's knowledge, has been made or is threatened and, to BFC's
knowledge, none of such Copyright Rights is being infringed by others.
(d) To the best of BFC's knowledge, Schedule 3.9(d) lists all
---------------
material domain names and registrations or applications for registration thereof
used by BFC and its affiliates principally in connection with the Business (the
"Internet Rights"). Except as
---------------
35
disclosed in Schedule 3.9(d), to the knowledge of BFC, (i) BFC and its
---------------
affiliates own, are licensed or have the full right to use and transfer the
Internet Rights; (ii) all such Internet Rights are valid and subsisting, free
and clear of any encumbrances or rights of third parties which would restrict
Buyer's exclusive right to use or transfer such Internet Rights; (iii) none of
the Internet Rights infringe the Internet rights of third parties and (iv) no
claim by third parties with regard to the use of any of such Internet Rights is
pending or has been made or threatened, no valid basis exists for any such claim
and none of such Internet Rights is being infringed by others.
3.10 Insurance.
---------
Schedule 3.10 lists the aggregate coverage amounts and type and generally
-------------
applicable deductibles of all policies of title, liability, fire, casualty
business interruption, workers' compensation and other forms of insurance
insuring the Business and the Assets (excluding self-insurance). BFC has
furnished a true, complete and accurate copy of all such policies to Buyer. All
such policies are in full force and effect. BFC is not in material default
under any provisions of any such policy of insurance nor has received notice of
cancellation of any such insurance. No material claim is pending as of the date
of this Agreement under any such policies as to which BFC has been advised or
been given notice that coverage has been denied or disputed by the underwriter
of such policy.
3.11 Tax Matters.
-----------
(a) BFC and BFC Investments have withheld from employee salaries,
wages and other compensation of Eligible Employees all material Taxes related to
the Business and required to be so withheld, for all periods for which the
statutory period of limitations for the assessment of Tax has not yet expired.
36
(b) None of the Assets is subject to any liens for Taxes (other than
Permitted Liens).
(c) None of the Assets is "tax-exempt use property" within the
meaning of Section 168(h) of the Code.
(d) For purposes of this Agreement, "Taxes" shall mean any federal,
-----
state, provincial, local, territorial and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, property, real estate, excise,
value added, estimated, stamp, alternative or add-on minimum, environmental,
withholding and any other taxes, duties or assessments, together with all
interest, penalties and additions imposed with respect to such amounts.
3.12 Employment and Benefits.
-----------------------
(a) Labor Controversies. Except as described on Schedule 3.12(a) and
------------------- ----------------
except as would not have a Material Adverse Effect, in respect of the Business,
(i) BFC is in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, (ii) there is no unfair labor practice charge or
complaint against BFC pending or, to BFC's knowledge, threatened before the
National Labor Relations Board ("NLRB"), (iii) there is no labor strike,
----
dispute, slowdown, lockout or stoppage actually pending or, to the knowledge of
BFC, threatened against or affecting BFC, (iv) within the past 5 years, BFC has
not experienced any strike, work stoppage or other labor difficulty, (v) to the
knowledge of BFC, there is no representation claim or petition pending before
the NLRB or any similar foreign agency and no question concerning representation
exists relating to the Eligible Employees, (vi) to the knowledge of BFC, there
are no charges with respect to or relating to the Business pending before the
Equal Employment Opportunity Commission or any state, local or foreign agency
37
responsible for the prevention of unlawful employment practices, nor have there
been any findings of such violations within the past three years, (vii) BFC has
not received any notice from any federal, state, local or foreign agency
responsible for the enforcement of labor or employment laws of an intention to
conduct an investigation of BFC with respect to the Business and no such
investigation is in progress and (viii) BFC is not a party to, or subject to, a
collective bargaining agreement relating to the Eligible Employees, and no
collective bargaining agreement relating to the Eligible Employees is currently
being negotiated. BFC has furnished to Buyer complete and correct copies of all
collective bargaining agreements and ancillary memoranda of understanding
relating to the Eligible Employees.
(b) Employee Benefit Plans. (i) For purposes of this Agreement,
----------------------
"Benefit Plans" shall mean all "employee benefit plans" (within the meaning of
-------------
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including, without limitation, "multiemployer plans" within the
-----
meaning of Sections 3(37) and 4001(a)(3) of ERISA), retirement savings, stock
purchase, stock option, severance, employment, change-in-control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation and all
other employee benefit plans, agreements, programs, policies or other
arrangements, whether or not subject to ERISA, (A) under which any employee or
former employee of the Business has any present or future right to benefits and
(B) under which BFC or any of its affiliates has any present or future
liability. Schedule 3.12(b)(i) sets forth a list of each material Benefit Plan.
-------------------
(ii) Except with respect to Benefit Plans for which Buyer is not
assuming any obligations or liabilities thereunder, true, correct and complete
copies of the following documents, with respect to each material Benefit Plan
(but only if applicable), have
38
been made available to Buyer: (A) the plan and its related trust document,
including any amendments thereto, (B) the most recent annual report filed on
Form 5500 filed with the Internal Revenue Service, (C) summary plan description,
and (D) the most recent actuarial report.
(iii) Except with respect to Benefit Plans for which Buyer is not
assuming any obligations or liabilities thereunder and except where a failure to
do so would not have a Material Adverse Effect, each material Benefit Plan has
been established and administered in accordance with its terms and in compliance
with the applicable provisions of ERISA, the Code and other applicable laws.
(c) Employees. With respect to each of the Eligible Employees set
---------
forth on Schedule 5.7(a)(ii), Schedule 3.12(c) lists each such Eligible Employee
------------------- ----------------
earning more than $75,000 annually in cash compensation as of September 30,
1997, including each such employee's name, total period of employment and
current position or job classification. No Eligible Employee is entitled to a
bonus from BFC as a result of the consummation of the Purchase, except that
certain Eligible Employees hold equity interests or equity equivalents in BFC
and affiliated entities which may be repurchased or cashed-out in connection
with or following the Purchase.
3.13 Compliance with Laws.
--------------------
Except as disclosed on Schedule 3.13 and except for those failures to have,
-------------
to be in full force in effect, to file, retain and maintain and to comply, in
each case, that would not have a Material Adverse Effect, (i) with respect to
the Business, BFC and BFC Investments have all licenses, permits or franchises
issued by any United States or foreign, federal, state, provincial, municipal or
local authority or regulatory body and other governmental
39
certificates, authorizations and approvals (collectively "Licenses and Permits")
--------------------
required by every United States or foreign, federal, state, provincial,
municipal and local governmental or regulatory body for the operation of the
Business and the use of the Assets; (ii) with respect to the Business, all such
Licenses and Permits are in full force and effect and no action, claim or
proceeding is pending, nor to the knowledge of BFC is threatened, to suspend,
revoke, revise, limit, restrict or terminate any of the Licenses and Permits or
declare any of the Licenses and Permits invalid; (iii) with respect to the
Business, BFC and BFC Investments have filed all necessary reports and
maintained and retained all necessary records pertaining to such Licenses and
Permits; and (iv) with respect to the Business, BFC and BFC Investments have
otherwise complied with all of the laws, ordinances, regulations and orders
applicable to its existence, financial condition, operations, properties or
Business, and BFC has not received any notice to the contrary.
3.14 Finders; Brokers.
----------------
With the exception of fees and expenses payable to Credit Suisse First
Boston Corporation, which shall be BFC's sole responsibility, BFC is not a party
to any agreement with any finder or broker, or in any way obligated to any
finder or broker for any commissions, fees or expenses in connection with the
origin, negotiation, execution or performance of this Agreement.
3.15 Environmental Matters.
---------------------
Except as disclosed on Schedule 3.15:
-------------
(a) BFC is in compliance, and the Assets comply, and at all times
have complied with all Environmental Laws (as defined below) applicable to
the Business
40
and the Assets, except for violations of Environmental Laws that would not
have a Material Adverse Effect;
(b) BFC holds, is in compliance, and at all times has complied with
all Licenses, Permits, decrees, orders or agreements required or issued
under Environmental Laws necessary for the ownership or operation of the
Business or the Assets, except for the absence of, or noncompliance with,
such Licenses, Permits, decrees, orders or agreements that would not have a
Material Adverse Effect;
(c) prior to the date of this Agreement, BFC has not been subject to,
nor received any written notice of the institution or pendency of, any
lawsuit, action, judicial or administrative proceeding, investigation,
order, judgment, settlement or claim by any person alleging any
Environmental Liability arising from or relating to the Business or the
Assets or any properties or assets formerly owned, operated or otherwise
controlled by BFC and used in the conduct of the Business, except for all
such cases that would not reasonably be expected to have a Material Adverse
Effect;
(d) To the best of BFC's knowledge, no Hazardous Substance has been
released, spilled, discharged, dumped, disposed of, or otherwise came to be
located in, at or beneath any of the Assets or any properties or assets
formerly owned, operated or otherwise controlled by BFC and used in the
conduct of the Business (i) in violation of any Environmental Law, or (ii)
in such manner as would reasonably be expected to cause an Environmental
Liability of BFC, except for all such cases described in this clause (d)
that would not have a Material Adverse Effect;
(e) No Environmental Lien (as defined below) has attached to any of
the Assets, except for those that do not have a Material Adverse Effect;
and
41
(f) BFC, in the operation of the Business, has not disposed of,
arranged for the disposal of, treated, or arranged for the treatment of,
any Hazardous Substance at any location at which there exists a release or
threatened release of a Hazardous Substance which would reasonably be
expected to result in an Environmental Liability to BFC that would
reasonably be expected to have a Material Adverse Effect.
(g) As used herein:
"Environmental Laws" means any domestic, foreign, federal, state,
------------------
interstate or local statute, law, regulation, order, rule, ordinance,
injunction, judgment, decree, common law or other enforceable requirement
of any governmental entity relating to human health or safety (as relating
to the environment or Hazardous Substances) or the protection of the
environment as are in effect as of the date of this Agreement, including
any of the foregoing related to: (i) Remedial Actions; (ii) the reporting,
licensing, permitting, or investigating of the emission, discharge, release
or threatened release of Hazardous Substances into the air, surface water,
groundwater or land; (iii) the manufacture, release, distribution, use,
generation, treatment, storage, disposal, transport or handling, reporting,
disclosure or indemnification of Hazardous Substances; (iv) any cause of
action based on common law theories, including but not limited to nuisance,
trespass and strict liability; or (v) work place or worker safety and
health, provided, however, that the Occupational Safety and Health Act
-------- -------
shall not be deemed to be an Environmental Law.
"Environmental Liability" means any liability or obligation arising
-----------------------
under Environmental Laws in connection with the Assets or the Business.
42
"Environmental Lien" means any lien in favor of any governmental
------------------
authority for any (i) liability under any Environmental Law, or (ii)
damages arising from, or costs incurred by, such governmental authority in
response to a release or threatened release of a Hazardous Substance into
the environment.
"Hazardous Substance" means (i) any substance or material regulated or
-------------------
identified under Environmental Laws, (ii) gasoline, diesel fuel or other
petroleum hydrocarbons or polychlorinated biphenyls or asbestos or (iii)
any pollutant, contaminant, hazardous substance, hazardous waste or toxic
substance.
"Remedial Action" means any response action, removal action, remedial
---------------
action, corrective action, notification, disclosure, monitoring program,
sampling program, investigation or other activity pertaining to any
Hazardous Substance, violation of Environmental Laws or compliance with
Environmental Laws.
3.16 Product Guaranty.
----------------
To the best of BFC's knowledge, except as disclosed in Schedule 3.16 and
-------------
except for adulterations, misbranding and violations of the Federal Food, Drug &
Cosmetic Act, as amended (the "FD&C Act"), that would not have a Material
--------
Adverse Effect, no shipment or other delivery of Products made or to be made by
BFC on or prior to the Closing Date was or as of the Closing Date will be, and
no food or food ingredients in inventory on the Closing Date will be as of the
Closing Date (i) adulterated or misbranded within the meaning of the FD&C Act;
(ii) an article which may not under the provisions of Sections 404 or 505 of the
FD&C Act be introduced into interstate commerce; or (iii) adulterated or
misbranded within the meaning of any pure food laws or ordinances of any state,
province or city to which such articles are shipped or to be shipped. All
finished goods inventories delivered to Buyer
43
hereunder are products which, under the provisions of such laws, can be shipped
and/or sold in interprovincial or foreign commerce and which conform in all
respects to the requirements of such laws and the regulations issued pursuant
thereto except where noncompliance of such laws and regulations would not have a
Material Adverse Effect.
3.17 Machinery.
---------
Except as set forth in Schedule 3.17 and for Permitted Liens, BFC has good
-------------
title to the Machinery, free and clear of all title defects and objections and
liens. Except as set forth in Schedule 3.17, BFC holds good and transferable
-------------
leaseholds in all of the Machinery leased by it, in each case under valid and
enforceable leases. The Machinery is sufficient and adequate to carry on the
Business as presently conducted, and all items thereof are in good operating
condition and repair, ordinary wear and tear excepted.
3.18 Product Recalls.
---------------
Except as disclosed in Schedule 3.18, there has not been, since January 1,
-------------
1995 through the date of this Agreement, any product recall of any product
manufactured, shipped or sold by the Business and from and after the date of
this Agreement until the Closing Date there will not be any such recall that
will have a Material Adverse Effect.
3.19 Customers and Suppliers.
-----------------------
Set forth on Schedule 3.19 is a list of the eight largest U.S. customers of
-------------
the Business and the eight largest suppliers to the Business, in each case based
on dollar volumes during 1996. Except as set forth on Schedule 3.19, as of the
-------------
date of this Agreement none of such customers or suppliers has terminated, or to
the knowledge of BFC, has an intention to terminate, its relationship with the
Businesss.
44
3.20 [Intentionally Omitted].
-----------------------
3.21 No Undisclosed Liabilities.
--------------------------
Except as disclosed on the Schedules to this Agreement and for liabilities
that would not have a Material Adverse Effect, BFC does not have any
indebtedness or liabilities (absolute or contingent, known or unknown) relating
to the Business, other than liabilities (a) reflected or reserved against or the
1997 Audited Financial Statements, (b) incurred since September 27, 1997 in the
ordinary course of business and not in violation of this Agreement, (c) relating
to executory obligations pursuant to leases or contracts listed on Schedules
---------
3.6(a)(i) or 3.7 or leases or contracts entered into in the ordinary course of
----------------
business which are not required to be listed on such Schedules, or (d) relating
to obligations to employees pursuant to Benefit Plans listed on Schedule
--------
3.12(b)(i) or obligations to employees not required to be listed pursuant to
----------
Section 3.12. Except as disclosed on Schedule 3.21 or as reflected on the 1997
-------------
Audited Financial Statements, BFC is not directly or indirectly liable upon or
with respect to (by discount, repurchase agreements or otherwise), or obliged in
any other way to provide funds in respect of, or to guarantee or assume, any
debt, obligation or dividend of any person in connection with the Business,
except endorsements in the ordinary course of business in connection with the
deposit, in banks or other financial institutions, of items for collection.
3.22 Entire Business.
---------------
Except for the Excluded Assets and except as set forth in Schedule 3.22,
-------------
the Assets together with the rights and services made available in the Services
Agreement (as defined in Section 5.16) and the Xxxxxx License Agreement (as
defined in Section 5.6(a)), constitute all
45
the assets, properties and rights necessary to conduct the Business in all
material respects as currently conducted.
3.23 No Other Representations or Warranties.
--------------------------------------
Except for the representations and warranties contained in Sections 3.1
through 3.22, including, without limitation, in the Schedules attached hereto to
the extent such Schedules relate to such Sections, neither BFC, nor any other
person makes any other express or implied representation or warranty on behalf
of BFC, including, without limitation, as to the probable success or
profitability of the ownership, use or operation of the Business, and the Assets
by Buyer after the Closing.
3.24 Expiration of Representations and Warranties.
--------------------------------------------
Each of the representations and warranties of BFC set forth in Sections 3.1
through 3.22 shall be deemed repeated and remade by BFC at the Closing as if
made at such time and shall, notwithstanding any investigation on the part of
the Buyer, survive the Closing until October 31, 1999 (provided, however, that
the representations and warranties set forth in Section 3.15 shall survive the
Closing until the five year anniversary of the Closing Date) whereupon all
representations and warranties of BFC contained herein shall be terminated and
extinguished, and thereafter BFC shall have no liability whatsoever with respect
to any such representation or warranty.
4 REPRESENTATIONS OF BUYER
------------------------
Buyer represents and warrants that:
4.1 Corporate Existence.
-------------------
Buyer is a corporation duly organized and validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite power and authority to
46
own, lease and operate the properties and assets used in the Business being
purchased hereunder and to carry on the Business as the same is now being
conducted. Buyer is duly authorized, qualified or licensed to do business as a
foreign corporation and is in good standing in every jurisdiction wherein, by
reason of the nature of the Business or the character of the Assets, the failure
to be so qualified would have a material adverse effect on the ability of Buyer
to consummate the transactions contemplated hereby (a "Buyer Material Adverse
----------------------
Effect").
------
4.2 Corporate Authority.
-------------------
This Agreement and the other agreements delivered by Buyer hereunder
(collectively, the "Buyer Transaction Documents") and the consummation of all of
---------------------------
the transactions provided for herein and therein have been duly authorized by
the Board of Directors of Buyer and by all requisite corporate, shareholder, or
other action, and Buyer has full power and authority to execute and deliver the
Buyer Transaction Documents and to perform its obligations hereunder and
thereunder. This Agreement has been duly executed and delivered by Buyer, and
constitutes a valid and legally binding obligation of Buyer, enforceable in
accordance with its terms except as enforceability may be (i) limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditor's rights, or (ii) subject to general principles of equity. The
execution and delivery of the Buyer Transaction Documents by Buyer or the
consummation by Buyer of the transactions contemplated hereby and thereby will
not (x) violate or conflict with any provision of the Certificate of
Incorporation or By-Laws of Buyer, or (y) result in any breach or constitute any
material default under any contract, indenture, mortgage, lease, note or other
agreement or instrument to which Buyer is subject or is a
47
party, except, in the case of clause (y), for any such breach or default which
would not have a Buyer Material Adverse Effect.
4.3 Governmental Approvals; Consents.
--------------------------------
Buyer is not subject to any order, judgment or decree which would prevent
the consummation of the transactions contemplated hereby. No claim, legal
action, suit, arbitration, governmental investigation, action, or other legal or
administrative proceeding is pending or, to the knowledge of Buyer, threatened
against Buyer which would be reasonably likely to enjoin or delay the
transactions contemplated hereby. No consent, approval, order or authorization
of, license or permit from, notice to or registration, declaration or filing
with, any governmental authority or entity, domestic or foreign, or of any third
party, is or has been required on the part of Buyer in connection with the
execution and delivery of this Agreement or any of the transactional documents,
or the consummation of the transactions contemplated hereby and thereby except
for such consents, approvals, orders or authorizations of, licenses or permits,
filings or notices the failure of which to obtain or make would not have a Buyer
Material Adverse Effect.
4.4 Finders; Brokers.
----------------
Buyer is not a party to any agreement with any finder or broker, or in any
way obligated to any finder or broker for any commissions, fees or expenses, in
connection with the origin, negotiation, execution or performance of this
Agreement.
4.5 Financial Capacity.
------------------
Buyer has binding commitment letters relating to a senior secured credit
facility and "highly confident" letters relating to a Rule 144A senior
subordinated note offering (the "Financing Letters"), and a binding joint equity
-----------------
commitment letter from Warburg, Xxxxxx
48
Ventures, L.P. and GE Investment Private Placement Partners II, A Limited
Partnership relating to subscriptions for common and preferred stock of Buyer
(the "Equity Letter"), each of which is currently in effect and true and correct
-------------
copies of which are attached hereto as Exhibit A. The Financing Letters and the
Equity Letter together provide all funds necessary to enable Buyer to consummate
the transactions described in this Agreement and to fund all disbursements of
the Business on the Closing Date (the "Financing").
---------
4.6 No Other Representations or Warranties.
--------------------------------------
Except for the representations and warranties contained in Sections 4.1
through 4.5, including, without limitation, in the Schedules attached hereto to
the extent such Schedules relate to such Sections, neither Buyer nor any other
person makes any other express or implied representation or warranty on behalf
of Buyer.
4.7 Expiration of Representations and Warranties.
--------------------------------------------
Each of the representations and warranties of Buyer set forth in Sections
4.1 through 4.5 shall be deemed repeated and remade by Buyer at the Closing as
if made at such time and shall, notwithstanding any investigation on the part of
BFC, survive the Closing until October 31, 1999 whereupon all representations
and warranties of Buyer contained herein shall be terminated and extinguished,
and thereafter Buyer shall have no liability whatsoever with respect to any such
representation or warranty.
5 AGREEMENTS OF BUYER AND BFC
---------------------------
5.1 Operation of the Business.
-------------------------
(a) Except as otherwise contemplated by this Agreement or as disclosed
in Schedule 5.1, BFC covenants that until the Closing it will, and it will cause
------------
BFC Investments to, use all reasonable best efforts to continue, in a manner
consistent with the past practices of
49
the Business: (i) to conduct, maintain and preserve intact the Business, (ii)
to maintain the ordinary and customary relationships of the Business with its
suppliers, customers and others having business relationships with it, (iii) to
incur capital expenditures, advertising, trade promotion and consumer promotion
expenditures as set forth on Schedule 5.1 and (iv) to finalize the sales plan
------------
(including volume and trade spending) for the first six months of 1998, commence
execution thereof and make presentations thereof to customers, in each case
described in clauses (i) through (iv) with a view toward preserving for Buyer to
and after the Closing Date the Business, the Assets and the goodwill associated
therewith.
(b) Until the Closing Date, BFC shall, and BFC shall cause BFC
Investments to, continue to operate and conduct the Business in the ordinary
course, and maintain its books and records in accordance with past practices and
will not and shall cause BFC Investments not to, without the prior written
approval of Buyer or as otherwise contemplated by this Agreement or Schedule 5.1
------------
take any of the following actions with respect to the Business:
(i) sell, transfer or otherwise dispose of or encumber any of its
properties or assets pertaining to the Business, other than (A) in the ordinary
course of business and (B) any obsolete inventory or equipment which is not
material to the results of operations, financial condition or business of the
Business taken as a whole;
(ii) terminate or amend, modify, renew or extend any BFC Lease,
except for non-material amendments in the ordinary course of business;
(iii) cancel any debts or waive any claims or rights, in each case
pertaining to the Business and material to the Business, except in the ordinary
course of business;
50
(iv) grant any increase in the compensation of Eligible Employees,
except for increases (A) in the ordinary course of business and consistent with
past practice which do not exceed 5% of annual compensation, (B) as a result of
collective bargaining or (C) as required by any Benefit Plan;
(v) make any capital expenditure or commitment or grant any trade
discounts pertaining to the Business, other than (A) in the ordinary course of
business, (B) as contemplated by Schedule 5.1, or (C) which is not material to
------------
the results of operations, financial condition or business of the Business taken
as a whole;
(vi) except with respect to endorsement of negotiable instruments in
the ordinary course of its Business, incur, assume or guarantee any indebtedness
for borrowed money that would cause the representations and warranties of BFC to
be untrue other than (A) purchase money borrowings, (B) indebtedness for
borrowed money incurred in the ordinary course of business in accordance with
existing credit arrangements, (C) refundings of existing indebtedness, (D)
indebtedness to BFC or an affiliate of BFC and (E) other indebtedness for
borrowed money which is not material to the results of operations, financial
condition, or business of the Business taken as a whole;
(vii) pay or lend or advance any amount to, or sell, transfer or
lease any properties or assets to, or enter into any agreement or arrangement
with, any of its affiliates, in each case except in the ordinary course of
business consistent with past practices;
(viii) make any change in any method of accounting or accounting
principle, method or practice except for any such change required by reason of a
concurrent change in generally accepted accounting principles, or write down the
value of any inventory except in the ordinary course of business consistent with
past practice;
51
(ix) settle, release or forgive any claim or litigation or waive any
right thereto, in each case pertaining to the Business and material to the
Business, except in the ordinary course;
(x) modify, amend in any material respect or terminate any Disclosed
Contract, enter into any contract that would be a Disclosed Contract if such
contract were in effect as of the date of this Agreement or enter into any
license agreement relating to Trademark Rights; or
(xi) agree, whether in writing or otherwise, to do any of the
foregoing.
5.2 Investigation of Business.
-------------------------
Buyer may, prior to the Closing Date, make or cause to be made such
investigation of the business and properties of the Business and of its
financial and legal condition as Buyer deems necessary or advisable. BFC will
permit Buyer and its authorized agents or representatives, including its counsel
and independent accountants, to have full access to the properties, books and
records of the Business (excluding access to perform any environmental audit or
assessment, other than Phase I environmental site assessments, at Buyer's sole
expense, as may be undertaken directly on behalf of Buyer's financing sources
and which shall be performed by an environmental professional reasonably
acceptable to BFC) at reasonable hours to review information and documentation
relative to the properties, books, contracts, commitments and other records of
the Business; provided, however, that Buyer shall not have access to customer
lists (or other customer-specific information) prior to Closing; provided,
further, that no investigation pursuant to this Section 5.2 shall qualify any
representation or warranty of BFC or the conditions to the obligations of Buyer.
Buyer and its representatives will hold in confidence all confidential
information obtained from BFC, its
52
officers, agents, representatives or employees in accordance with the provisions
of the letter dated May 30, 1997 between General Electric Investment Corporation
("GE Investments") and BFC and the related agreement dated July 18, 1997 between
--------------
GE Investments and X.X. Xxxxxxx, Xxxxxx & Co., LLC (collectively, the
"Confidentiality Letter").
----------------------
5.3 Mutual Cooperation; No Inconsistent Action.
------------------------------------------
(a) Subject to the terms and conditions hereof, BFC and Buyer agree
to use their reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including all of the following (i) obtain prior to Closing all licenses,
certificates, permits, approvals, authorizations, qualifications and orders of
governmental authorities as are necessary for the consummation of the
transactions contemplated hereby, including but not limited to such consents and
approvals as may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "Xxxx-Xxxxx Act"), as set forth below and any
--------------
similar foreign legislation; (ii) effect all necessary registrations and
filings; and (iii) satisfy the conditions to Closing. BFC and Buyer shall
cooperate fully with each other to the extent reasonable in connection with the
foregoing.
(b) Buyer and BFC shall timely and promptly make all filings which
may be required by each of them in connection with the consummation of the
transactions contemplated hereby under the Xxxx-Xxxxx Act and any similar
foreign legislation. Each party shall furnish to each other such necessary
information and assistance as the other party may reasonably request in
connection with the preparation of any necessary filings or submissions
53
by it to any U.S. or foreign governmental agency, including, without limitation,
any filings necessary under the provisions of the Xxxx-Xxxxx Act.
(c) Each of BFC and Buyer shall notify and keep the other advised as
to (a) any litigation or administrative proceeding pending and known to such
party, or to its knowledge threatened, which challenges the transactions
contemplated hereby and (b) any event or circumstance which would constitute a
breach of their respective representations and warranties in this Agreement
provided, that the failure of BFC or Buyer to comply with clause (b) shall not
--------
subject BFC or Buyer to any liability hereunder except as and to the extent BFC
or Buyer would be responsible for a breach of such representations and
warranties pursuant to Section 8.1 or 8.2, as applicable (including, without
limitation, the limitations on recovery and the time periods for bringing claims
thereunder). Subject to the provisions of Section 10, hereof, BFC and Buyer
shall not take any action inconsistent with their obligations under this
Agreement or which would materially hinder or delay the consummation of the
transactions contemplated by this Agreement.
5.4 Public Disclosures.
------------------
Prior to the Closing Date, no party to this Agreement will issue any press
release or make any other public disclosures concerning this transaction or the
contents of this Agreement without the prior written consent of the other party.
Notwithstanding the above, nothing in this Section 5.4 will preclude any party
from making any disclosures required by law or regulation or necessary and
proper in conjunction with the filing of any tax return or other document
required to be filed with any federal, state or local governmental body,
authority or agency; provided, that the party required to make the release or
--------
statement shall
54
allow the other party reasonable time to comment on such release or statement in
advance of such issuance.
5.5 Access to Records and Personnel.
-------------------------------
(a) The parties shall retain the books, records, documents,
instruments, accounts, correspondence, writings, evidences of title and other
papers relating to the Business and the Assets in their possession (the "Books
-----
and Records") for the period of time set forth in their respective records
-----------
retention policies on the Closing Date or for such longer period as may be
required by law or any applicable court order;
(b) The parties will allow each other reasonable access to such Books
and Records, and to personnel having knowledge of the whereabouts and/or
contents of such Books and Records, for legitimate business reasons, such as the
preparation of tax returns or the defense of litigation. Each party shall be
entitled to recover its out-of-pocket costs (including, without limitation,
copying costs) incurred in providing such records and/or personnel to the other
party. The requesting party will hold in confidence all confidential
information identified as such by, and obtained from, the disclosing party, any
of its officers, agents, representatives or employees, provided, however, that
information (i) which was in the public domain; (ii) was in fact known to the
requesting party prior to disclosure by the disclosing party, its officers,
agents, representatives or employees; or (iii) becomes known to the requesting
party from or through a third party not under an obligation of non-disclosure to
the disclosing party, shall not be deemed to be confidential information.
(c) At the request of BFC, Buyer shall allow any person who is
contemplating the direct or indirect acquisition of all or a substantial portion
of the common stock of BFC to perform, at such person's expense and at such time
or times as are
55
reasonably acceptable to Buyer, Phase I environmental site assessments of the
Assets (to the extent then owned by Buyer or its affiliates), which assessments
shall be conducted by an environmental professional reasonably acceptable to
Buyer.
5.6 License Agreements and Transactions.
-----------------------------------
(a) On the Closing Date, Buyer, BFC, BFC Investments, Xxxxxx and BDH
shall enter into the following transactions in the following order (the "License
-------
Transactions"):
------------
(i) (x) BFC Investments shall execute and deliver an
assignment of BFC Investments' rights under the Existing License Agreement
between Xxxxxx and BFC Investments and (y) BFC shall execute and deliver an
assignment of BFC's rights under the Existing License Agreement between BFC
Investments and BFC, each substantially in the form attached as Exhibits B-
1 and B-2 hereto, respectively (collectively, the assignments referred to
in clauses (x) and (y) above, the "Assignments"); and
-----------
(ii) immediately after the execution and delivery of the
Assignments, the Existing License Agreements shall be terminated (as to the
portions thereof which shall have been assigned pursuant to the
Assignments), and immediately thereafter Buyer, Xxxxxx and BDH shall
execute and deliver a license agreement substantially in the form of the
license agreement set forth in Exhibit C hereto (the "Xxxxxx License
--------------
Agreement").
---------
(b) On the Closing Date, Buyer and BFC shall execute and deliver a
license agreement, substantially in the form of Exhibit D hereto (the "Buyer's
-------
License Agreement"), pursuant to which Buyer shall grant to BFC a license to use
-----------------
the ReaLemon, ReaLime,
56
RealPrune and RealFig trademarks in the territories outside the United States
set forth on Schedule 5.6(b).
---------------
(c) On the Closing Date, BFC shall execute and deliver an assignment
to Buyer, which shall be reasonably acceptable to Buyer, assigning all of BFC's
right, title and interest in the Trademark License Agreement dated as of
September 4, 1997 BFC and Southern Foods Group, L.P. relating to the Meadow Gold
trademark.
5.7 Employee Relations and Benefits
-------------------------------
(a) Offer to Hire. Effective as of the Closing Date Buyer (i) may
-------------
offer employment to any employee of BFC employed at BFC's headquarters in
Columbus, Ohio who Buyer wishes to hire at comparable positions and rates of pay
(provided that (x) Buyer shall not offer employment to any person set forth on
Schedule 5.7(a)(i) and (y)(1) for each position set forth on Schedule 5.7(a)(ii)
------------------ -------------------
under the caption "Positions", Buyer may offer employment only to the persons
whose names are set forth under such caption and (2) with respect to positions
set forth on such Schedule under the caption "No Eligible Employees", Buyer
shall not, without the prior written consent of BFC, offer employment with
respect to such position to any employee of BFC) and (ii) shall offer to hire
all employees (whether or not on disability or otherwise on leave of absence)
primarily involved in the conduct of the Business and who are employed at or
report to the Facilities at comparable positions and rates of pay or subject to
the terms and conditions of the collective bargaining agreements applicable to
any such employees (subject to Section 5.7(e)) (the persons to whom offers may
be made pursuant to clause (i) and the persons described in clause (ii),
collectively, the "Eligible Employees" and the persons to whom offers are made
------------------
pursuant to clause (i) and the
57
persons described in clause (ii), collectively, the "Offer Employees").
---------------
Eligible Employees shall not include those persons who are former or retired
employees of BFC or its affiliates.
With respect to an Offer Employee described in clause (i) of Section 5.7(a),
unless such person expressly accepts Buyer's offer of employment as of the
Closing Date, such person shall be deemed to have declined Buyer's offer of
employment and shall not become an employee of Buyer as of the Closing Date.
With respect to an Offer Employee described in clause (ii) of Section 5.7(a),
unless such person expressly declines Buyer's offer of employment as of the
Closing Date, such person shall be deemed to have accepted Buyer's offer of
employment and shall become an employee of Buyer as of the Closing Date. Buyer
shall be responsible for any obligations or liabilities to the Transferred
Employees (as defined below) under the Worker Adjustment and Retraining
Notification Act ("WARN") to the extent WARN thresholds are exceeded as a result
----
of actions taken by Buyer after the Closing with respect to Transferred
Employees. Buyer shall not, at any time prior to 90 days after the Closing
Date, effectuate a "plant closing" or "mass layoff", as those terms are defined
in WARN, affecting in whole or in part any site of employment, facility,
operating unit or employee, without notifying BFC in advance and without
complying with the notice requirements and other provisions of WARN.
(b) Transferred Employees. The Offer Employees described in clause (ii) of
---------------------
Section 5.7(a) who accept or are deemed to accept Buyer's offer of employment
and who are covered by a collective bargaining agreement with BFC shall be
referred to herein as "Transferred Union Employees". The Offer Employees (x)
---------------------------
described in clause (ii) of Section 5.7(a) who accept or are deemed to accept
Buyer's offer of employment and who are not covered by a collective bargaining
agreement with BFC and (y) described in clause (i) of
58
Section 5.7(a) who expressly accept Buyer's offer of employment pursuant to
Section 5.7(a) shall be referred to herein as "Transferred Non-Union Employees".
-------------------------------
Collectively, the Transferred Union Employees and the Transferred Non-Union
Employees shall be referred to herein as the "Transferred Employees". The
---------------------
Transferred Employees shall cease participation in the Benefit Plans as of the
Closing Date.
(c) Terms of Employment. For the period ending one year after the Closing
-------------------
Date, Buyer will provide Transferred Non-Union Employees with benefits under
Buyer's employee benefit plans which are substantially comparable in the
aggregate to the Benefit Plans set forth in Schedule 3.12(b)(i) (other than the
-------------------
BFC post-retirement welfare plans and BFC's nonqualified deferred compensation
plan for executive employees), and, subject to Section 5.7(e), will provide
Transferred Union Employees with such benefits as shall be required under the
terms of any applicable collective bargaining agreement covering such employees
on and after the Closing Date; provided, however, that this Section shall not be
-------- -------
construed as guaranteeing employment to any particular employee for a period
greater than otherwise required by any applicable law; provided, further, that
-------- -------
nothing in this Section shall require Buyer to sponsor a defined benefit plan
for the Transferred Employees following the Closing Date. Except as provided
otherwise in this Section 5.7 or as required by the terms of any collective
bargaining agreements, the terms of the Transferred Employees' employment with
Buyer shall be upon such terms and conditions as Buyer, in its sole discretion,
shall determine.
(d) Past Service Credit. Transferred Employees shall receive credit for
-------------------
all periods of employment prior to the Closing Date, to the extent taken into
account by BFC under the terms of any analogous Benefit Plan maintained by BFC,
under all employee benefit plans as
59
are adopted or implemented for Transferred Employees by Buyer for purposes of
eligibility, vesting and for purposes of satisfying any service requirements for
early retirement.
(e) Collective Bargaining Agreements. Effective as of the Closing Date,
--------------------------------
Buyer shall assume the collective bargaining agreements listed on Schedule
--------
3.12(a) in respect of the Transferred Union Employees, and shall be solely
-------
responsible for discharging all liabilities arising thereunder on and after the
Closing Date, however, Buyer shall be free to negotiate in good faith with
recognized collective bargaining agents of the Transferred Union Employees to
attempt to obtain such representative's agreement to modify such assumed
collective bargaining agreements with respect to the benefit plans, programs and
policies to be provided by Buyer for the Transferred Union Employees as of the
Closing Date.
(f) COBRA. Buyer shall have sole responsibility for "continuation
-----
coverage" benefits provided on or after the Closing Date under Buyer's group
health plans to all Transferred Employees, and "qualified beneficiaries" of
Transferred Employees, for whom a "qualifying event" has occurred on or after
the Closing Date. Subject to the preceding sentence, BFC shall have sole
responsibility for "continuation coverage" benefits provided under BFC's group
health plans to all current and former BFC employees, and "qualified
beneficiaries" of current and former BFC employees, for whom a "qualifying
event" has occurred, whether prior to, on or after the Closing Date. The terms
"continuation coverage," "qualified beneficiaries" and "qualifying event" shall
have the meanings ascribed to them under Section 4980B of the Code and Sections
601 through 608 of ERISA.
(g) Post-Retirement Benefits. BFC shall remain solely responsible and
------------------------
liable for all obligations arising or relating to all current and former
employees of the Business under
60
all Benefit Plans that are post-retirement welfare benefit plans and Buyer shall
have no obligation or liability with respect to any such plans.
(h) Non-Union Nonqualified Retirement Plans. BFC currently maintains non
---------------------------------------
qualified retirement plans (collectively, the "BFC Nonqualified Plans") which
----------------------
provide certain retirement benefits for certain eligible employees of BFC,
including certain Transferred Non-Union Employees. BFC will remain solely
responsible for making all contributions to and the payment of all benefits
under the BFC Nonqualified Plans with respect to the Transferred Employees, and
neither Buyer nor any of its affiliates will have any obligation or liability
with respect to BFC Nonqualified Plans. Effective as of the Closing, BFC will
take all necessary and appropriate action to cause the BFC Nonqualified Plans to
expressly provide that Transferred Non-Union Employees who were participants in
the BFC Nonqualified Plans prior to the Closing Date will have their service
with Buyer and its affiliates credited for benefit eligibility (including early
retirement subsidies) and vesting purposes, but not for benefit accrual or
compensation history purposes.
(i) Vacation. Each Transferred Employee will be credited by Buyer with any
--------
unused vacation earned as of the Closing Date under the vacation policy of BFC
applicable to such Transferred Employee, and BFC shall have no liability
therefor following the Closing Date. Buyer agrees that it will allow the
Transferred Employees to use such credited vacation to the same extent that such
Transferred Employees could have used such credited vacation under the Benefit
Plans. Buyer shall recognize service by each Transferred Employee with BFC for
purposes of determining eligibility and entitlement to vacation leave following
the Closing Date under the applicable vacation policy of Buyer; provided,
however, that this Section 5.7(i) shall not be construed so as to entitle any
Transferred Employee to be credited
61
with additional vacation benefits under Buyer's vacation policy for periods of
employment prior to the Closing Date.
(j) Severance Benefits. Buyer agrees that, in the event any Transferred
------------------
Non-Union Employee is terminated by Buyer during the one-year period immediately
following the Closing Date, Buyer will provide such Transferred Employee with a
severance benefit which is not less than the cash separation payment that would
have been provided for by BFC's severance pay policy (as set forth on Schedule
--------
5.7(j) hereto) had such Employee been terminated under the same circumstances by
------
BFC immediately prior to the Closing Date.
(k) Bonus Plans. BFC shall pay the Transferred Employees any annual
-----------
incentive or sales bonus earned for calendar year 1997 and Buyer shall pay the
Transferred Employees any annual incentive or sales bonus for periods commencing
on or after January 1, 1998.
(l) No Rights Conferred on Employees. Nothing herein, expressed or
--------------------------------
implied, shall confer upon any employee or former employee of BFC or Buyer or
any of their affiliates (including, without limitation, the Transferred
Employees), any rights or remedies (including, without limitation, any right to
employment or continued employment for any specified period) of any nature or
kind whatsoever, under or by reason of this Agreement.
(m) Employee Welfare Benefit Plans. Other than with respect to workers'
------------------------------
compensation, BFC shall retain responsibility for and continue to pay all
hospital, medical, life insurance, disability (including, but not limited to,
long-term disability benefits) and other welfare benefit plan expenses and
benefits, and for all unemployment compensation and other government mandated
benefits (collectively referred to herein as "Welfare Type Plans") for claims
------------------
covered by such plans which are incurred by Transferred Employees and their
dependents prior to the Closing Date. Buyer shall be responsible for all claims
incurred on or
62
after the Closing Date by Transferred Employees and their dependents under all
Welfare Type Plans, including, without limitation, those plans that are
maintained by Buyer for the Transferred Employees and their dependents. For
purposes of this Section 5.7(m), a claim shall be deemed to have been incurred:
(i) with respect to a death or dismemberment claim, on the actual
date on which such death or dismemberment occurs;
(ii) with respect to a disability or salary continuation claim, on
the date on which the claimant is unable as a result of injury or sickness
to perform the functions of his or her job;
(iii) with respect to a hospitalization, medical, drug or dental
claim, on the date on which the service was received or the supply was
purchased by the claimant; provided, however, that a claim relating to a
-------- -------
claimant's hospital stay shall be deemed to be incurred on the first day of
his or her confinement for that stay; provided, further, that any claims
-------- -------
related to a claimant's hospital stay other than the hospitalization itself
(including, but not limited to, physician's services) shall be deemed to be
incurred on the date on which the relevant service was received or the
relevant supply was consumed;
(iv) with respect to unemployment compensation or other governmental
claims, on the date the incident giving rise to the claim occurred.
Transferred Non-Union Employees shall participate under all Welfare Type Plans
sponsored by Buyer following the Closing Date without any waiting periods,
without any evidence of insurability and without the application of any
preexisting physical or mental condition restrictions (except to the extent
applicable under the Welfare Type Plans sponsored by BFC),
63
and Buyer shall provide credit for all claims incurred by the Transferred
Employees prior to the Closing Date for purposes of applying deductibles, co-
payments, out-of-pocket maximums and benefit maximums. Notwithstanding anything
to the contrary herein, Buyer shall be responsible for all obligations and
liabilities relating to workers' compensation with respect to the Transferred
Employees (whether arising before, on or after the Closing Date).
(n) Notwithstanding anything to the contrary herein, with respect to
Transferred Employees who have incurred a claim for long-term disability
benefits (as defined in Section 5.7(m) herein) prior to the Closing Date, (i)
until such persons are no longer "disabled" within the meaning of the Xxxxxx,
Inc. Total Family Protection Plan (along with any successor plan, the "TFPP"),
----
such persons shall continue to participate in the TFPP on and after the Closing
Date for purposes of medical and disability coverage only and (ii) Buyer shall
not be responsible for any medical or disability claims incurred by such persons
on or after the Closing Date until such time as such persons are actively
employed by Buyer and covered by Buyer's group medical and disability plans.
(o) BFC shall be responsible for all obligations and liabilities relating
to the Transferred Employees with respect to their employment with BFC prior to
the Closing Date and not expressly allocated to Buyer pursuant to this Section
5.7.
5.8 Product Shipment and Inventory Reconciliation.
---------------------------------------------
Within ninety (90) days after Closing, Buyer will remove the Inventory (as
defined below) from any non-public warehouses set forth on Schedule 5.8 which
------------
continue to be owned and/or leased by BFC and its subsidiaries. Buyer shall be
responsible for any warehouse storage charges incurred by BFC with respect to
the Inventory of the Business on and after the Closing Date. Where such
Inventories are stored in a public warehouse, BFC
64
will provide any necessary authorization to permit Buyer to remain or withdraw
from such public warehouse. Any removal Inventories shall be transported, at
Buyer's expense, to warehouse locations designated by Buyer. Buyer shall also
be responsible for removing, at its sole expense and risk, all equipment and
other items constituting Assets acquired by Buyer hereunder which are located at
any of BFC and its subsidiaries facilities not acquired by Buyer hereunder and
set forth on Schedule 5.8. Buyer shall promptly reimburse BFC for any out-of-
------------
pocket costs, fees and expenses incurred by BFC and its subsidiaries in
connection with the removal of the Assets from the premises of BFC and its
subsidiaries or elsewhere where such Assets may be located. For purposes of
this Section 5.8, the term "Inventory" shall mean all finished products (other
---------
than finished products that have been billed and are being held for customers'
accounts) of the Business on the Closing Date and all work-in-process, raw
materials and packaging materials used in connection therewith, principally
related to the Business.
5.9 "As Is" Condition.
-----------------
Except as otherwise specifically provided by BFC in the representations and
warranties of BFC set forth herein, and subject to the limitations with respect
to such representations and warranties contained in this Agreement, Buyer agrees
that it shall accept all Assets in an "As Is" "Where Is" condition at the
Closing Date.
5.10 Non-Solicitation.
----------------
Until the Closing shall actually have occurred, Buyer acknowledges that it
remains subject to paragraph 7 of the Confidentiality Letter; provided that
--------
Buyer and its affiliates shall be entitled to make offers of employment to
Eligible Employees pursuant to Section 5.7(a)
65
above; provided, further that such offers shall be conditioned upon the
-------- -------
occurrence of the Closing.
5.11 [Intentionally Omitted].
-----------------------
5.12 Financing.
---------
(a) Buyer shall use its reasonable best efforts to obtain financing
to consummate the transactions contemplated by this Agreement within 60 days of
the date of this Agreement. If for any reason Buyer cannot obtain such financing
by such date on the terms set forth in the Financing Letters, Buyer shall use
its reasonable best efforts to obtain such financing by such date from other
sources; provided, however, the reasonable best efforts shall not be deemed to
--------
include acceptance of financial or other terms that are not, taken as a whole,
at least as favorable in all material respects to Buyer as the terms contained
in the Financing Letter. Buyer shall use its reasonable best efforts to satisfy
at or before the Closing all requirements which are conditions to its closing
all transactions constituting the Financing and to its drawing down the cash
proceeds thereunder.
(b) BFC shall cooperate with Buyer in all reasonable respects to
enable Buyer to obtain the Financing including using its reasonable efforts to
(i) obtain consents of its independent public accountants and comfort letters,
when required, with respect to each of the Financial Statements, at Buyer's sole
cost and expense, so that the Financial Statements can be used in Rule 144A
offering memoranda and registration statements filed under the Securities Act of
1933, as amended, and reports under the Securities Exchange Act of 1934, as
amended (the "Public Filings"), issued or filed by Buyer, (ii) cooperate with
--------------
Buyer so Buyer can obtain information sufficient for Buyer to comply with the
requirements for the Management's Discussion and Analysis portion of the Public
Filings, (iii) compile the
66
requisite financial information, including supplying financial information for
purposes of comfort letters to be issued in connection with the Public Filings,
(iv) request the independent public accountants of the Business to give full and
complete access to Buyer and its agents to its work papers and any other
supporting information relating to the Financial Statements, subject to
customary agreements sought by independent public accountants in connection with
giving such access, (v) sign customary management representation letters
relating to the Financial Statements, (vi) cooperate in the preparation of
financial statements for the Business that are suitable for inclusion by Buyer
in the Public Filings, including compliance with the applicable provisions of
Regulation S-X, and (vii) provide such personnel as are reasonably requested by
Buyer to participate in roadshow, rating agency and lender presentations and
meetings relating to such Financing so long as such participation does not
interfere with the normal functioning of the Business.
(c) Effective at the opening of business on the Closing Date, Buyer
shall be responsible for funding all disbursements of the Business. Any cash,
cash equivalents, similar investments, certificates of deposit, Treasury bills
and other marketable securities held by the Business at the Closing shall be
treated by the parties consistent with Section 1.3.
5.13 Consumer Claims and Complaints.
------------------------------
The parties shall assure that their respective consumer affairs departments
cooperate and assist each other to assure the expeditious handling of consumer
claims and complaints.
5.14 Promotion/Pricing Allowance.
---------------------------
In the event that customers of the Business xxxx Buyer or make deductions
against Buyer's otherwise valid invoices for trade promotion or pricing
allowances (such as slotting allowances, returns, retailer or distributor ads,
store display allowances, coupons, trade
67
deductions and similar items) applicable to any of BFC's businesses other than
the Business, Buyer will promptly forward such xxxx or a xxxx for such
deductions, as the case may be, with commercially reasonable supporting
documentation, to BFC which will, in turn, promptly pay all valid claims
supported by such documentation. In the event customers of the Business xxxx
BFC or make deductions against BFC's otherwise valid invoices for any such trade
promotion or pricing allowances applicable to the Business and incurred on or
after the Closing Date, BFC will promptly forward such xxxx or a xxxx for such
deductions, as the case may be, with commercially reasonable supporting
documentation, to Buyer which will, in turn, promptly pay all valid claims
supported by such documentation. With respect to any such trade promotion or
pricing allowances applicable to the Business and incurred prior to the Closing
Date, to the extent the liability for any such allowance is an Assumed Liability
or an Excluded Liability, BFC (in the case of Assumed Liabilities) or Buyer (in
the case of Excluded Liabilities) will promptly forward such xxxx or a xxxx for
such deductions, as the case may be, with commercially reasonable supporting
documentation, to the other party which will, in turn, promptly pay all valid
claims supported by such documentation. If either party contests the validity
of any such claims and the parties hereto cannot resolve the issue of validity
after good faith attempts to do so, then either party may make a claim for
indemnity under Sections 8.1 or 8.2, as applicable.
5.15 Administration of Accounts; Customer Inquiries.
----------------------------------------------
(a) All payments and reimbursements made in the ordinary course of
business by any third party in the name of or to BFC or any affiliate thereof in
connection with or arising out of the Assets or Assumed Liabilities after the
Closing Date shall be held by such person in trust for the benefit of Buyer and,
immediately upon receipt by such person
68
of any such payment or reimbursement, such person shall pay over to Buyer the
amount of such payment or reimbursement without right of set off.
(b) All payments and reimbursements made in the ordinary course of
business by any third party in the name of or to Buyer or any affiliate thereof
in connection with or arising out of the Excluded Assets or Excluded Liabilities
after the Closing Date shall be held by such person in trust for the benefit of
BFC and, immediately upon receipt by such person of any such payment or
reimbursement, such person shall pay over to BFC the amount of such payment or
reimbursement without right of set off.
(c) BFC covenants and agrees that it will, and will cause BFC
Investments to, promptly forward to Buyer any mail (physical, electronic or
otherwise), facsimile or telephone inquiries of actual or potential clients,
customers, suppliers and vendors of or relating to the Business, including,
without limitation, customer orders.
5.16 Services Agreement.
------------------
On the Closing Date, Buyer and BFC shall execute and deliver an agreement,
substantially in the form attached hereto as Exhibit E (the "Services
--------
Agreement"), pursuant to which BFC shall agree to provide certain transition
---------
services on the terms and subject to the conditions set forth therein.
5.17 Puerto Rico Distributor Agreement.
---------------------------------
On or prior to the Closing Date, Buyer shall, and BFC shall cause Xxxxxx
Foods Puerto Rico, Inc., a Delaware corporation and a subsidiary of BFC ("Xxxxxx
------
Puerto Rico"), to execute and deliver a six-month distributor agreement,
-----------
substantially in the form attached hereto as Exhibit F (the "Puerto Rico
-----------
Distributor Agreement"). If the Puerto Rico Distributor Agreement shall be
---------------------
terminated in accordance with its terms, BFC shall cause Xxxxxx Puerto
69
Rico not to assert Dealer's Contract Law, Law 75 of June 24, 1964 (101PRA (S)
278) ("Law 75") or to contest the exclusive jurisdiction and governing law
------
provisions of such agreement; provided, however, that BFC's obligations under
-------- -------
this sentence shall be terminated if BFC shall transfer all or substantially all
of the stock of Xxxxxx Puerto Rico to a third party and if, in connection with
such transfer, such third party shall agree to assume BFC's obligations under
this sentence; and provided, further, that if the third party which acquires all
-------- -------
or substantially all of the stock of Xxxxxx Puerto Rico is a Puerto Rican
person, then such Puerto Rican person shall agree, in a document subject to the
law and exclusive jurisdiction of a jurisdiction other than Puerto Rico, to
indemnify and hold harmless Buyer against any breach of such Puerto Rican
person's agreement, in connection with a termination of the Puerto Rico
Distributor Agreement in accordance with its terms, to cause Xxxxxx Puerto Rico
not to assert Law 75 or to contest the exclusive jurisdiction and governing law
provisions of such agreement
5.18 Canadian Copack and Distribution Agreements.
-------------------------------------------
Following the date hereof, Buyer and BFC (on behalf of itself and/or a
Canadian affiliate) shall negotiate in good faith a co-pack agreement, a
distribution agreement and sales agency agreements (collectively, the "Canadian
--------
Agreements") substantially on the terms set forth on Exhibit G hereto and
----------
otherwise on such customary terms as Buyer and BFC shall mutually agree.
5.19 Covenant Not to Compete. (a) BFC and BFC Investments acknowledge
-----------------------
that the agreements and covenants contained in this Section 5.19 are essential
to protect the value of the Business being acquired by Buyer. Therefore, BFC
agrees that for the period commencing on the Closing Date and ending on the
fifth (5th) anniversary of the Closing
70
Date (such period is hereinafter referred to as the "Restricted Period"),
-----------------
neither BFC nor any of its subsidiaries shall in the territory set forth under
the caption "Territory" on Schedule 5.19 participate or engage, directly or
--------- -------------
indirectly, whether as an employee, agent, officer, consultant, director,
shareholder, partner, joint venturer, investor or otherwise, in developing,
manufacturing, marketing, distributing and selling (i) sweetened condensed milk,
(ii) liquid or powdered non-dairy coffee xxxxxxx, (iii) canned egg nog, (iv)
lemon or lime, shelf-stable juice or lemon or lime juice concentrate, (v) liquid
or frozen pie filling (including mincemeat), whether or not shelf stable and
however packaged, and (vi) acid-neutralized instant coffee. Notwithstanding the
foregoing, BFC may (i) own equity securities of a public company in an amount
not to exceed 5% of the issued and outstanding equity securities of such
company, (ii) engage in a transaction whereby, directly or indirectly, it
acquires (whether by merger, stock purchase, purchase of assets or otherwise),
any person or business, or any interest in any person or business, engaged at
the time of such acquisition in the manufacture or sale of any of the foregoing
products, provided that no more than 17.5% of such person's or business's
--------
revenues result from the manufacture or sale of such products, provided,
--------
further, that if at the time of such acquisition such revenues exceed 17.5%,
-------
this Section 5.19(a) shall not be deemed to be violated if such revenues do not
exceed 17.5% within one year following the consummation of such acquisition or
(iii) participate or engage, directly or indirectly, whether as an employee,
agent, officer, consultant, director, shareholder, partner, joint venturer,
investor or otherwise, in developing, manufacturing, marketing, distributing and
selling the products listed under the caption "Excluded Products" on Schedule
----------------- --------
5.19.
----
(b) BFC acknowledges that the value to Buyer of the transactions
contemplated by this Agreement would be substantially diminished if BFC or any
controlled
71
affiliate were to solicit the employment of any Transferred Employee (other than
an hourly worker or an employee who serves in a clerical function).
Accordingly, BFC agrees that, for a period of two years following the Closing
Date, neither BFC nor any subsidiary of BFC shall solicit the employment of any
employee or employ any person who is an employee of Buyer (other than an hourly
worker or an employee who serves in a clerical function); provided, however,
-------- -------
that the foregoing provision will not prevent BFC from hiring any Transferred
Employee (i) who responds to a public advertisement placed by BFC, (ii) who has
not been employed by Buyer during the preceding six months or (iii) who has been
terminated by Buyer.
(c) Buyer acknowledges that the value to BFC of the transactions
contemplated by this Agreement would be substantially diminished if Buyer or any
controlled affiliate were to solicit the employment of any employee of BFC or
its affiliates (other than pursuant to Section 5.7(a) prior to the Closing Date,
other than as set forth in the following paragraph and other than an hourly
worker or an employee who serves in a clerical function). Accordingly, Buyer
agrees that, for a period of two years following the Closing Date (subject to
the provisions of the following paragraph), neither Buyer nor any subsidiary of
Buyer shall solicit the employment of any employee or employ any person who is
an employee of BFC or any of its affiliates (other than an hourly worker or an
employee who serves in a clerical function); provided, however, that the
-------- -------
foregoing provision will not prevent Buyer from hiring any employee of BFC or
any of its affiliates (i) who responds to a public advertisement placed by
Buyer, (ii) who has not been employed by BFC during the preceding six months or
(iii) who has been terminated by BFC.
72
Notwithstanding the foregoing, during the period commencing on the
Closing Date and ending on the earlier of the 60th day following the Closing
Date and February 28, 1998, Buyer may offer employment to any employee of BFC
employed at BFC's headquarters in Columbus, Ohio who Buyer wishes to hire at
comparable positions and rates of pay, subject to (1) compliance with the
provisos set forth in clause (i) of Section 5.7(a) and (2) the condition that
Buyer may not make any such offer to any person who shall have been designated
in good faith by BFC pursuant to a notice delivered to Buyer not more than five
days prior to the Closing Date as being ineligible to be hired by Buyer pursuant
to this sentence, provided, that, BFC shall only be permitted to designate (i)
--------
persons who BFC would like to employ to fill the positions listed under the
caption "Positions" and "No Eligible Employees" on Schedule 5.7(a)(ii) (or
-------------------
comparable positions with BFC to the extent any positions listed on such
Schedule relate to the Business but not to BFC's retained businesses and (ii) an
additional 40 persons. Upon express acceptance by any BFC employee to whom
Buyer is permitted to make offers pursuant to the preceding sentence of any such
offer (such date of acceptance, the "Acceptance Date"), for purposes of Section
---------------
5.7, (i) such employee shall be deemed to be a Transferred Non-Union Employee as
of the Acceptance Date and (ii) for purposes of allocating all obligations and
liabilities under Section 5.7 with respect to such person, the references in
Section 5.7 to the Closing Date and the Closing shall be deemed to be references
to the Acceptance Date.
(d) BFC and Buyer agrees that a monetary remedy for a breach of the
agreements set forth in Section 5.19(a), (b) or (c) hereof will be inadequate
and impracticable and further agrees that such a breach would cause irreparable
harm, and that the non-breaching party shall be entitled to temporary and
permanent injunctive relief without the
73
necessity of proving actual damages. In the event of such a breach, the
breaching party agrees that the non-breaching party shall be entitled to such
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions as a court of competent jurisdiction shall
determine.
(e) If any provision of this Section 5.19 is invalid in part, it
shall be curtailed, as to time, location or scope, to the minimum extent
required for its validity under the laws of the United States and shall be
binding and enforceable with respect to BFC as so curtailed.
(f) The parties agree that $5,000,000 of the Purchase Price will be
allocated to the covenants contained in Section 5.19(a) and the covenants
contained in Section 5.19(b).
5.20 Confidentiality. BFC and BFC Investment each recognizes that by
---------------
reason of its ownership of the Assets, it has acquired confidential information
and trade secrets concerning the operation of the Business, the use or
disclosure of which could cause the Buyer or its affiliates substantial loss and
damages that could not be readily calculated and for which no remedy at law
would be adequate. Accordingly, each of BFC and BFC Investments covenants and
agrees with Buyer that it will not at any time, except in performance of its
obligations to Buyer or with the prior written consent of Buyer, directly or
indirectly, disclose any proprietary, material non-public secret or confidential
information relating to the Business that it may learn or has learned by reason
of its ownership of the Assets, unless (i) such information becomes known to the
public generally through no fault of BFC or BFC Investments or (ii) disclosure
is required in the opinion of counsel to BFC or BFC Investments, by applicable
law, regulation or legal process. The parties agree that the covenant contained
in this Section imposes a reasonable restraint on BFC and BFC
74
Investments, and their respective applicable employees, in light of the
activities and business of Buyer proposed to be conducted on and after the
Closing Date, assuming the completion of the transactions contemplated hereby,
and the current plans of the Buyer.
5.21 Acquisition of Rights to Confidentiality. At the Closing, BFC shall
----------------------------------------
assign, grant and convey to Buyer all their respective rights under
confidentiality agreements between it and persons other than the Buyer that were
entered into in connection with or relating to a possible sale of the Business
or any part thereof (collectively, the "Other Confidentiality Letters"),
-----------------------------
including the right to enforce all terms of the Other Confidentiality Letters,
but only to the extent the other Confidentiality Letters relate to the Business
or any part thereof and are assignable. At the Closing, BFC shall deliver to
Buyer copies of the Other Confidentiality Letters to the extent permitted by the
terms thereof, provided that if any Other Confidentiality Agreement shall not be
--------
assignable, BFC shall disclose to Buyer the parties to such agreement, but only
to the extent such disclosure is not prohibited by the terms thereof.
5.22 Certain Restrictions. Buyer agrees that it shall not, in any
--------------------
territory set forth on Schedule 1.3(a)(i), use or seek to register any trademark
------------------
or service xxxx or trade name incorporating the word "Cremora" or any logo
related thereto or used in connection therewith, including any translations,
adaptations or derivations thereof. Any person to whom BFC or any of its
affiliates transfers any trademarks or service marks or trade names
incorporating the word "Cremora" not being sold pursuant to this Agreement shall
be entitled to enforce the provisions of this Section as a third party
beneficiary hereof, but only if and to the extent such person agrees in writing
to a reciprocal provision for Buyer's benefit.
75
6 CONDITIONS
----------
6.1 Conditions Precedent to Obligations of Buyer, BFC and BFC Investments.
---------------------------------------------------------------------
The respective obligations of Buyer, BFC and BFC Investments to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
at or prior to the Closing Date of the following conditions:
(a) No Injunction, etc. At the Closing Date, there shall be no
-------------------
injunction, restraining order or decree of any nature of any court or
governmental agency or body of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Purchase or the transfer to Buyer
by BFC or BFC Investments of any Assets.
(b) Regulatory Authorizations. All consents, approvals,
-------------------------
authorizations and orders of federal, state and foreign governmental and
regulatory authorities as are necessary in connection with the transfer of the
Assets (the "Required Consents") shall have been obtained, except for Required
-----------------
Consents the failure to obtain which, individually or in the aggregate, are not
material to the operations of the Business taken as a whole or the failure of
which to obtain would not subject the Buyer, BFC, or BFC Investments, or any
officer, director, or agent of any such person to civil or criminal liability;
provided that for purposes of this clause (b) applicable waiting periods
--------
specified under the HSR Act with respect to the transactions contemplated by
this Agreement shall have lapsed or been terminated.
6.2 Conditions Precedent to Obligation of BFC and BFC Investments.
-------------------------------------------------------------
The obligation of BFC and BFC Investments to consummate the transactions
provided for in this Agreement is subject to fulfillment of each of the
following conditions:
(a) Accuracy of Buyer's Representations and Warranties; Covenants of
----------------------------------------------------------------
Buyer. The representations and warranties of Buyer contained in this Agreement
-----
(except as
76
affected by the transactions contemplated in this Agreement) that are qualified
as to materiality shall be true and correct and the representations and
warranties of Buyer set forth in this Agreement and that are not so qualified
shall be true and correct in all material respects, in each case on the date of
this Agreement (except to the extent cured prior to the Closing Date) and on the
Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly speak as of an earlier date; Buyer
shall have complied in all material respects with all covenants contained in
this Agreement to be performed by it prior to Closing; and BFC shall have
received a certificate signed by an officer of Buyer to such effect;
(b) License Agreements. Buyer shall have executed the Xxxxxx License
------------------
Agreement and the Buyer's License Agreement;
(c) Services Agreement. Buyer shall have executed the Services
------------------
Agreement;
(d) Puerto Rico Distributor Agreement. Buyer shall have executed the
---------------------------------
Puerto Rico Distributor Agreement.
(e) Canadian Agreements. Buyer shall have executed the Canadian
-------------------
Agreements;
(f) Assumption Agreement. Buyer shall have executed an undertaking
--------------------
(the "Assumption Agreement") substantially in the form of Exhibit H pursuant to
--------------------
which Buyer agrees to assume the Assumed Liabilities; and
(g) Opinion of Counsel. BFC shall have received a favorable opinion,
------------------
dated as of the Closing Date, from Xxxxxxx Xxxx & Xxxxxxxxx, counsel to Buyer,
in form and
77
substance reasonably satisfactory to BFC and its counsel substantially to the
effect as set forth on Exhibit I hereto.
6.3 Conditions Precedent to Obligation of Buyer.
-------------------------------------------
The obligation of Buyer to consummate the transactions provided for in this
Agreement is subject to fulfillment of each of the following conditions:
(a) Accuracy of Representations and Warranties of BFC; Covenants of
---------------------------------------------------------------
BFC. The representations and warranties of BFC contained in this Agreement
---
(except as affected by the transactions contemplated in this Agreement) that are
qualified as to materiality shall be true and correct and the representations
and warranties of BFC and BFC Investments set forth in this Agreement and that
are not so qualified shall be true and correct in all material respects, in each
case on the date of this Agreement (except to the extent cured prior to the
Closing Date) and on the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly speak as of an
earlier date; BFC shall have complied in all material respects with all
covenants contained in this Agreement to be performed by it prior to Closing;
and Buyer shall have received a certificate signed by an officer of BFC to such
effect;
(b) License Agreements and the Assignments. BFC Investments and BFC
--------------------------------------
shall each have executed an Assignment, BFC, Xxxxxx and BFC Investments shall
have executed the Xxxxxx License Agreement and BFC shall have executed the
Buyer's License Agreement;
(c) Services Agreement. BFC shall have executed the Services
------------------
Agreement;
(d) Puerto Rico Distributor Agreement. Xxxxxx Puerto Rico shall have
---------------------------------
executed the Puerto Rico Distributor Agreement;
78
(e) Canadian Agreements. BFC shall have executed the Canadian
-------------------
Agreements;
(f) Xxxx of Sale. BFC shall have executed a general conveyance,
------------
assignment and xxxx of sale, substantially in the form of Exhibit J hereof;
(g) Consents and Approvals. All consents, waivers, authorizations and
----------------------
approvals of any person (other than those of any federal, state and foreign
governmental and regulatory authorities which shall be covered by Section
6.1(b)), required in connection with the execution, delivery and performance of
this Agreement (including without limitation the consents and approvals
identified on Schedule 3.3, but excluding consents and approvals of any party to
------------
any of the equipment leases to which BLC/City Corp. is a party listed under the
caption "Personal Property Leases" on such Schedule) shall have been duly
obtained and shall be in full force and effect on the Closing Date, except for
consents, waivers, authorizations and approvals the failure to obtain which,
individually or in the aggregate, would not have a Material Adverse Effect.
(h) No Material Adverse Change. During the period from the date
--------------------------
hereof to the Closing Date, there shall not have been any material adverse
change in the assets, properties, business, prospects, results of operations or
condition (financial or otherwise) of the Business taken as a whole.
(i) Opinions of Counsel. Buyer shall have received (x) a favorable
-------------------
opinion addressed to Buyer and, if requested by Buyer, Buyer's lenders, dated as
of the Closing Date, from the General Counsel of BFC, in form and substance
reasonably satisfactory to Buyer and its counsel substantially to the effect as
set forth on Exhibit K hereto and (y) a favorable opinion addressed to Buyer,
dated as of the Closing Date, from Xxxxxxx Xxxxxxx & Xxxxxxxx,
79
in form and substance reasonably satisfactory to Buyer and its counsel
substantially to the effect as set forth on Exhibit L hereto.
(j) Financing. Buyer shall have received the proceeds of the
---------
financings necessary to consummate the transactions contemplated by this
Agreement.
7 CLOSING
-------
7.1 Closing Date.
------------
(a) Unless this Agreement shall have been terminated and the
transactions herein shall have been abandoned pursuant to Section 9 hereof, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
-------
take place at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, at 10:00 a.m., New York
City time, on the date on which, or within two business days after the date on
which, all of the conditions to the Closing set forth in Section 6 hereof are
satisfied or waived, or such other date, time and place as shall be agreed upon
by BFC and Buyer (the actual date and time being herein called the "Closing
-------
Date").
----
7.2 Buyer Deliveries.
----------------
At the Closing, Buyer shall deliver (i) the BFC Purchase Price and the IP
Purchase Price as provided in Section 2.1(b) hereof, (ii) the documents
described in Section 6.2 hereof, (iii) such other documents and instruments as
counsel for Buyer and BFC mutually agree to be reasonably necessary to
consummate the transactions described herein.
7.3 BFC Deliveries.
--------------
At the Closing, BFC and/or BFC Investments shall deliver or cause one or
more of its affiliates to deliver to Buyer the following executed instruments in
such form and substance as indicated in any applicable Schedule hereto, or as is
reasonably acceptable to Buyer:
(a) the documents described in Section 6.3 hereof;
80
(b) bargain and sale deed with covenant against grantor's acts (or
local equivalent) to each of the BFC Owned Real Properties;
(c) a Non-Foreign Affidavit duly executed and acknowledged stating
that BFC is not a "foreign person" within the meaning of Section 1445(f);
(d) an omnibus assignment, reasonably acceptable to Buyer,
transferring to Buyer all of BFC's right, title and interest in and to the BFC
Owned Real Properties, the improvements located thereon and rights related
thereto;
(e) duly executed and acknowledged title affidavits and/or
certificates as the Title Company (as defined in Section 11.6) shall deem
necessary or desirable in form and substance satisfactory to such title company;
provided, that any such affidavit or certificate shall be in the usual and
--------
customary form and shall not increase the retained liability of BFC beyond that
specifically provided for in this Agreement in any material respect;
(f) to the extent available to BFC, all plans and specifications,
surveys, guarantees, warranties, operating manuals and keys related to or used
in connection with any of the BFC Real Properties;
(g) physical possession and control of the BFC Owned Real Properties
free and clear of all leases, licenses and occupancy agreements, tenants or
other occupants; and
(h) Such other documents and instruments as counsel for Buyer and BFC
mutually agree to be reasonably necessary to consummate the transactions
described herein.
8 INDEMNIFICATION
---------------
8.1 Indemnification by BFC.
----------------------
(a) BFC shall defend, indemnify and hold Buyer and its affiliates harmless
from and against and in respect of any and all actual losses, liabilities,
damages, judgments,
81
settlements and expenses, including reasonable attorneys', consultants' and
experts' fees and expenses, incurred directly by Buyer and its affiliates
(hereinafter "Buyer Losses") which arise out of (i) any breach of any of the
------------
representations and warranties contained in Sections 3.1 through 3.22 (other
than Section 3.15), (ii) any breach of any of the representations and warranties
contained in Section 3.15, (iii) any breach by BFC of any of its covenants
(other than the covenant set forth in clause (b) of the first sentence of
Section 5.3(d)) in this Agreement which survive the Closing, (iv) the matters
set forth on Schedule 8.1, (v) the ownership, operation or use of any of the
------------
Excluded Assets or (vi) Excluded Liabilities. Buyer shall give BFC prompt
written notice of any third party claim which may give rise to any indemnity
obligation under this Section, together with the estimated amount of such claim,
and BFC shall have the right to assume the defense of any such claim through
counsel of its own choosing, by so notifying Buyer within thirty (30) days of
receipt of Buyer's written notice; provided, however, that BFC's counsel shall
be reasonably satisfactory to Buyer. Buyer's failure to give prompt notice
shall not affect the indemnification obligations hereunder except to the extent
such failure materially prejudices BFC. If Buyer desires to participate in any
such defense assumed by BFC, it may do so at its sole cost and expense. If BFC
declines to assume any such defense, it shall be liable for all reasonable costs
and expenses of defending such claim incurred by Buyer, including reasonable
fees and disbursements of counsel, consultants and experts and any settlement or
judgment resulting therefrom. Neither party shall, without the prior written
consent of the other party, which shall not be unreasonably withheld, settle,
compromise or offer to settle or compromise any such claim or demand on a basis
which would result in the imposition of a consent order, injunction, deed
restriction or decree which would restrict the future activity or conduct of the
82
other party or any subsidiary or affiliate thereof or if such settlement or
compromise does not include an unconditional release of the other party for any
liability arising out of such claim or demand or any related claim or demand.
(b) The foregoing obligation to indemnify Buyer and its affiliates set
forth in Section 8.1(a) shall be subject to each of the following limitations:
(i) BFC's indemnification obligation for any Buyer Losses under
clauses (i) or (ii) of Section 8.1(a) shall survive only to the extent
specified in Section 3.24 and thereafter all such representations and
warranties of BFC under this Agreement shall be extinguished. No claim for
recovery of Buyer Losses referred to in clauses (i) or (ii) of Section
8.1(a) may be asserted by Buyer after the applicable period referred to in
Section 3.24; provided, however, that claims first asserted in writing with
-------- -------
specificity within such period shall not thereafter be barred;
(ii) No reimbursement for Buyer Losses asserted against BFC under
clause (i) of Section 8.1(a) shall be required unless and until the
cumulative aggregate amount of such Buyer Losses equals or exceeds
$2,500,000 (the "Threshold") and then only to the extent that the
---------
cumulative aggregate amount of Buyer Losses, as finally determined, exceeds
the Threshold; provided that in calculating the Threshold, any Buyer Losses
--------
which individually total less than $25,000 each ("De Minimis Buyer Losses")
-----------------------
shall be excluded in their entirety and BFC in any event shall have no
liability hereunder to Buyer and its affiliates for any such De Minimis
Buyer Losses; provided, further, that such De Minimis Buyer Losses may not
-------- -------
exceed one million dollars ($1,000,000) in the aggregate;
83
(iii) No reimbursement for Buyer Losses asserted against BFC under
clause (ii) of Section 8.1(a) shall be required unless and until the
cumulative aggregate amount of such Buyer Losses equals or exceeds $500,000
(the "Environmental Threshold") and then only to the extent that the
-----------------------
cumulative aggregate amount of Buyer Losses, as finally determined, exceeds
the Environmental Threshold; and
(iv) BFC's aggregate liability to Buyer and its affiliates under
clauses (i), (ii) and (iv) of Section 8.1(a) for Buyer Losses shall not
exceed 50% of the Purchase Price.
(c) The indemnities provided in this Section 8.1 shall survive the
Closing. Absent fraud, the indemnity provided in this Section 8.1 and injunctive
relief shall be the sole and exclusive remedies of the indemnified party against
the indemnifying party at law or equity for any matter covered by Sections
8.1(a) and (b).
(d) In no event shall BFC be liable to Buyer or its affiliates for
special, indirect, incidental, consequential or punitive damages.
(e) For purposes of clauses (i) or (ii) of Section 8.1(a), in determining
whether there has been a breach of any representation or warranty contained in
Sections 3.1 through 3.22 (other than in the first sentence of Section 3.5) or
the amount of any Buyer Losses resulting from any such breach, such
representations and warranties shall be read without regard to any "Material
Adverse Effect" qualifier contained therein.
(f) Notwithstanding any other provision of this Agreement to the contrary,
a Remedial Action that would otherwise be subject to indemnification under this
Agreement shall be subject to indemnification only to the extent that (i) the
Remedial Action is required by order of a governmental entity pursuant to
Environmental Laws or undertaking the
84
Remedial Action is otherwise reasonable under the totality of the circumstances
(but without regard to the availability of indemnification pursuant to this
Agreement) and (ii) the Remedial Action is performed in the most cost-effective
manner reasonable under the totality of the circumstances; provided, however,
-------- -------
that any Remedial Action required by order of a governmental authority shall be
deemed cost-effective.
8.2 Indemnification by Buyer.
------------------------
(a) Buyer shall defend, indemnify and hold BFC and its affiliates harmless
from and against and in respect of any and all actual losses, liabilities,
damages, judgements, settlements and expenses, including reasonable attorney's,
consultants' and experts' fees and expenses, incurred directly by BFC and its
affiliates (hereinafter "Seller Losses"; together with Buyer Losses, "Losses")
------------- ------
arising out of or relating to (i) any breach of any of the representations and
warranties contained in Sections 4.1 through 4.5 hereof, (ii) any breach by
Buyer of any of its covenants (other than the covenant set forth in clause (b)
of the first sentence of Section 5.3(e)) in this Agreement which survives the
Closing, (iii) the ownership, operation or use of the Assets on or after the
Closing Date or (iv) all Assumed Liabilities. BFC shall give Buyer prompt
written notice of any third party claim which may give rise to any indemnity
obligation under this Section, together with the estimated amount of such claim,
and Buyer shall have the right to assume the defense of any such claim through
counsel of its own choosing, by so notifying BFC within thirty (30) days of
receipt of BFC's written notice; provided, however, that Buyer's counsel shall
be reasonably satisfactory to BFC. BFC's failure to give prompt notice shall
not affect the indemnification obligations hereunder except to the extent such
failure materially prejudices Buyer. If BFC desires to participate in any such
defense assumed by Buyer it may do so at its sole cost and expense.
85
If Buyer declines to assume any such defense, it shall be liable for all costs
and expenses of defending such claim incurred by BFC and BFC Investments,
including reasonable fees and disbursements of counsel, consultants and experts
and any settlement or judgment resulting therefrom. Neither party shall,
without the prior written consent of the other party, which shall not be
unreasonably withheld, settle, compromise or offer to settle or compromise any
such claim or demand on a basis which would result in the imposition of a
consent order, injunction, deed restriction or decree which would restrict the
future activity or conduct of the other party or any subsidiary or affiliate
thereof or if such settlement or compromise does not include an unconditional
release of the other party for any liability arising out of such claim or
demand.
(b) The foregoing obligation to indemnify BFC and its affiliates set forth
in Section 8.2(a) shall be subject to each of the following limitations:
(i) Buyer's indemnification obligation for Seller Losses under clause
(i) of Section 8.2(a) shall survive only to the extent specified in Section
4.7 and thereafter all such representations and warranties of Buyer under
this Agreement shall be extinguished. No claim for the recovery of such
Seller Losses referred to in clause (i) of Section 8.2(a) may be asserted
by BFC and BFC Investments after the period specified in Section 4.7;
provided, however, that claims first asserted in writing with specificity
-------- -------
within such period shall not thereafter be barred;
(ii) No reimbursement for Seller Losses asserted against Buyer under
clause (i) of Section 8.2(a) shall be required unless and until the
cumulative aggregate amount of such Seller Losses equals or exceeds
$2,500,000 (the "Buyer Threshold") and then only to the extent that the
---------------
cumulative aggregate amount of Seller Losses, as
86
finally determined, exceeds said Buyer Threshold; provided that in
--------
calculating such Threshold any Seller Losses which individually total less
than $25,000 each ("De Minimis Seller Losses") shall be excluded in their
------------------------
entirety and Buyer in any event shall have no liability hereunder to BFC
and its affiliates for any such De Minimis Seller Losses; provided,
--------
further, that such De Minimis Seller Losses may not exceed one million
-------
dollars ($1,000,000) in the aggregate.
(iii) Buyer's liability to BFC and its affiliates under clause (i) of
Section 8.2(a) for Seller Losses shall not exceed 50% of the Purchase
Price.
(c) The indemnities provided in this Section 8.2 shall survive the
Closing. Absent fraud, the indemnity provided in this Section 8.2 and injunctive
relief shall be the sole and exclusive remedies of the indemnified party against
the indemnifying party at law or equity for any matter covered by Sections
8.2(a) and (b).
(d) In no event shall Buyer be liable to BFC or its affiliates for
special, indirect, incidental, consequential or punitive damages.
(e) For purposes of clause (i) of Section 8.2(a), in determining whether
there has been a breach of any representation or warranty contained in Sections
4.1 through 4.5 or the amount of any Seller Losses resulting from any such
breach, such representations and warranties shall be read without regard to any
"Material Adverse Effect" qualifier contained therein.
8.3 Indemnification Calculations.
----------------------------
(a) The amount of any Seller Losses or Buyer Losses for which
indemnification is provided under this Section 8.1 or 8.2, as applicable, shall
be computed net of any insurance proceeds received by the indemnified party in
connection with such Losses.
87
If the amount with respect to which any claim is made under Section 8.1 or 8.2,
as applicable (an "Indemnity Claim") gives rise to an actual Tax Benefit (as
---------------
defined below) to the party making the claim, the indemnity payment shall be
reduced by the amount of the Tax Benefit available to the party making the
claim. To the extent such Indemnity Claim does not give rise to an actual Tax
Benefit, if the amount with respect to which any Indemnity Claim is made gives
rise to a subsequently realized Tax Benefit to the party that made the claim,
such party shall refund to the indemnifying party the amount of such Tax Benefit
when, as and if realized. For the purposes of this Agreement, any subsequently
realized Tax Benefit shall be treated as though it were a reduction in the
amount of the initial Indemnity Claim, and the liabilities of the parties shall
be redetermined as though both occurred at or prior to the time of the indemnity
payment. For purposes of this Section 8.3, a "Tax Benefit" means an amount by
-----------
which the tax liability of the party (or group of corporations including the
party) is reduced (including, without limitation, by deduction, reduction of
income by virtue of increased tax basis or otherwise, entitlement to refund,
credit or otherwise) plus any related interest received from the relevant taxing
authority. Where a party has other losses, deductions, credits or items
available to it, the determination of any Tax Benefit shall be calculated by
comparing the tax liability of the indemnified party, computed without regard to
any losses, deductions, credits or items relating to the indemnity claim, to the
tax liability of the indemnified party, computed after taking into account any
losses, deductions, credits or items relating to the indemnity claim. In the
event that there should be a determination disallowing the Tax Benefit, the
indemnifying party shall be liable to refund to the indemnified party the amount
of any related reduction previously allowed or payments previously made to the
indemnifying party pursuant to this Section 8.3. The amount of the
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refunded reduction or payment shall be deemed a payment under this Section 8.3
and thus shall be paid subject to any applicable reductions under this Section
8.3.
(b) The parties agree that any Losses for which indemnification is
provided under Section 8.1 and 8.2 and indemnification payments made pursuant to
this Agreement shall be treated for tax purposes as an adjustment to the
Purchase Price, unless otherwise required by applicable law.
9 TERMINATION
-----------
9.1 Termination Events.
------------------
This Agreement may be terminated and the transactions contemplated herein
may be abandoned:
(a) by mutual consent of the parties hereto;
(b) by BFC, in its sole discretion, after the later of (i) January
31, 1998 or (ii) forty-five days following the Financial Statement Date (as
defined below), if Buyer shall not have received, subject only to the
satisfaction of the conditions to Buyer's obligations to consummate the Purchase
set forth in Section 6.1 and 6.3 (other than Section 6.3(k)), all of the
proceeds of the Financing, and, at BFC's request, provided evidence thereof to
BFC, which evidence shall be in form and substance reasonably satisfactory to
BFC. The "Financial Statement Date" shall mean the date on which the Financial
------------------------
Statements shall be deemed, for purposes of this Agreement, to be in compliance
with the applicable provisions of Regulation S-X. The Financial Statement Date
shall be deemed to have occurred on the seventh day following the date of this
Agreement unless Buyer shall have provided BFC with a notice setting forth
Buyer's belief that the Financial Statements are not in compliance with
Regulation S-X and the basis of its belief in reasonable detail. Upon receipt of
any such
89
notice within such time period, BFC and Buyer shall cooperate in the preparation
of financial statements for the Business for inclusion by Buyer in the Public
Filings that comply with the applicable provisions of Regulation S-X, and the
date on which such financial statements so comply, in the reasonable judgment of
the parties acting in good faith, shall be deemed to be the Financial Statement
Date.
(c) by BFC or Buyer, by notice to the other, if the Closing shall not
have been consummated on or before March 2, 1998, unless extended by written
agreement of the parties hereto, so long as the party terminating this Agreement
shall not be in default or breach hereunder.
(d) by BFC or Buyer, by notice to the other, if the other shall have
committed a material breach of this Agreement, and such breach is not cured
within sixty (60) days after delivery of a written notice to the breaching party
specifying such default.
9.2 Effect of Termination. In the event of any termination of the
---------------------
Agreement as provided in Section 10.1 above, this Agreement shall forthwith
become wholly void and of no further force and effect and there shall be no
liability on the part of Buyer or BFC Investments or BFC, except that (i) the
obligations of Buyer and BFC under Sections 6.2, 6.11 and 12.6 of this Agreement
shall remain in full force and effect and (ii) termination shall not preclude
either party from suing the other party for breach of this Agreement.
10 ALTERNATIVE DISPUTE RESOLUTION
------------------------------
The parties shall attempt in good faith to resolve any dispute arising out
of or relating to this Agreement promptly by negotiations between executives who
have authority to settle the controversy. Any party may give the other
party(ies) written notice of any dispute not resolved in the normal course of
business. Within twenty (20) days after delivery of said
90
notice, executives of both parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the dispute. If the matter has
not been resolved within sixty (60) days of the disputing party's original
notice, or if the parties fail to meet within twenty (20) days, either party may
initiate legal proceedings to resolve the controversy or claim. If a party's
negotiator intends to be accompanied at a meeting by an attorney, the other
party's negotiator shall be given at least three (3) working days' notice of
such intention and may also be accompanied by an attorney. All negotiations
pursuant to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence and state
rules of evidence.
11 MISCELLANEOUS AGREEMENTS OF THE PARTIES
---------------------------------------
11.1 Notices.
-------
All communications provided for hereunder shall be in writing and shall be
deemed to be given when delivered in person or by private courier with receipt,
when telefaxed and received, or three (3) days after being deposited in the
United States mail, first-class, registered or certified, return receipt
requested, with postage paid and,
If to Buyer: c/o GE Investment Private Placement Partners II,
a Limited Partnership
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxxx
Fax: 000-000-0000
and
c/o Warburg Pincus Ventures, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxx
Fax: 000-000-0000
91
With a Copy to: Xxxxxxx Xxxx & Xxxxxxxxx
One Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax: 000-000-0000
If to BFC or BFC
Investments: Xxxxx X. Xxxxx
Vice President,
Legal and Corporate Affairs
Xxxxxx Foods Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Fax: 000-000-0000
With a Copy to: Xxxxxxx X. Xxxxx
Senior Vice President and
General Counsel
Xxxxxx Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Fax: 000-000-0000
or to such other address as any such party shall designate by written notice to
the other parties hereto.
11.2 Bulk Transfers.
--------------
Buyer waives compliance with the provisions of all applicable laws relating
to bulk transfers in connection with this sale of assets.
11.3 Transaction Taxes.
-----------------
BFC and Buyer agree to each pay one-half of all sales and transfer taxes,
if any, which may be payable with respect to the consummation of the
transactions contemplated by this Agreement and to the extent any exemptions
from such taxes are available Buyer and BFC shall cooperate to prepare any
certificates or other documents necessary to claim such exemptions.
92
11.4 Further Assurances; Asset Returns.
---------------------------------
Upon request from time to time, BFC shall execute or cause BFC Investments
to execute and deliver all documents, take all rightful oaths, and do all other
acts that may be reasonably necessary or desirable, in the reasonable opinion of
counsel for Buyer, to perfect or record the title of Buyer, or any successor of
Buyer, to the Assets transferred or to be transferred under this Agreement, or
to aid in the prosecution, defense, or other litigation of any rights arising
from said transfer (provided that Buyer shall reimburse BFC and/or BFC
Investments for all out of pocket costs and expenses resulting from any such
request). In the event that Buyer receives any assets of BFC that are not
intended to be transferred pursuant to the terms of this Agreement, whether or
not related to the Business, Buyer agrees to promptly return such assets to BFC
at BFC's expense.
11.5 Other Covenants.
---------------
To the extent that any consents needed to assign to Buyer any of the Assets
have not been obtained on or prior to the Closing Date this Agreement shall not
constitute an assignment or attempted assignment thereof if such assignment or
attempted assignment would constitute a breach thereof. If any such consent
shall not be obtained on or prior to the Closing Date, then (i) BFC and Buyer,
if required under applicable law, shall use their reasonable efforts in good
faith to obtain such consent as promptly as practicable thereafter and (ii) if
in the reasonable judgment of Buyer such consent may not be obtained, the
parties shall use reasonable efforts in good faith to cooperate, and to cause
each of their respective affiliates to cooperate, in any lawful arrangement
designed to provide for Buyer the benefits under any such Assets.
93
11.6 Expenses.
--------
Subject to Section 11.3, BFC and Buyer shall each pay their respective
expenses (such as legal, investment banker and accounting fees) incurred in
connection with the origination, negotiation, execution and performance of this
Agreement and the agreements relating to Buyer's financing arrangements in
connection herewith, except that (i) Buyer shall be responsible for the payment
of any filing fee under the Xxxx-Xxxxx Act and (ii) BFC shall pay one-half of
the amount paid by Buyer to obtain title commitments and surveys relating to the
BFC Owned Properties provided, that BFC shall not be required to pay more than
--------
$40,000 pursuant to this clause (ii) and BFC shall have no liability under this
clause (ii) unless the title insurance order is placed with a title company (the
"Title Company") through a title agent recommended by BFC.
-------------
11.7 Non-Assignability.
-----------------
This Agreement shall inure to the benefit of and be binding on the parties
hereto and their respective successors and permitted assigns. This Agreement
shall not be assigned by either party hereto without the express prior written
consent of the other party, and any attempted assignment, without such consents,
shall be null and void, provided, that Buyer may assign its rights hereunder to
-------- ----
an affiliate and to any party providing financing in connection with the
transactions contemplated hereby, provided, further, that no such assignment
-------- -------
shall relieve Buyer of any of its obligations hereunder.
11.8 Amendment; Waiver.
-----------------
This Agreement may be amended, supplemented or otherwise modified only by a
written instrument executed by the parties hereto. No waiver by either party of
any of the provisions hereof shall be effective unless explicitly set forth in
writing and executed by the
94
party so waiving. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties,
covenants, or agreements contained herein, and in any documents delivered or to
be delivered pursuant to this Agreement and in connection with the Closing
hereunder. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
11.9 Schedules and Exhibits.
----------------------
All exhibits and schedules hereto are hereby incorporated by reference and
made a part of this Agreement. All statements contained in schedules, exhibits,
certificates and other instruments attached hereto or delivered or furnished on
behalf of BFC and BFC Investments pursuant hereto or in connection with the
transactions contemplated hereby, shall be deemed representations and warranties
by BFC. Any fact or item which is clearly disclosed on any Schedule or Exhibit
to this Agreement or in the Financial Statements in such a way as to make its
relevance to a representation or representations made elsewhere in this
Agreement or to the information called for by another Schedule or other
Schedules (or Exhibit or other Exhibits) to this Agreement readily apparent
shall be deemed to be an exception to such representation or representations or
to be disclosed on such other Schedule or Schedules (or Exhibit or Exhibits), as
the case may be, notwithstanding the omission of a reference or cross-reference
thereto. Any fact or item disclosed on any Schedule or Exhibit hereto shall not
by reason only of such inclusion be deemed to be material and shall not be
employed as a point of reference in determining any standard of materiality
under this Agreement.
95
11.10 Third Parties.
-------------
Except as provided in Section 5.22, this Agreement does not create any
rights, claims or benefits inuring to any person that is not a party hereto nor
create or establish any third party beneficiary hereto.
11.11 Governing Law.
-------------
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, except for the BFC Real Property which shall be
governed by the laws of the jurisdictions where such properties are located.
11.12 Consent to Jurisdiction.
-----------------------
Each of the parties hereto, irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York located in the borough of Manhattan in the City of New York, or if such
court does not have jurisdiction, the Supreme Court of the State of New York,
New York County, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby. Each of
the parties hereto, further agrees that service of any process, summons, notice
or document by U.S. registered mail to such party's respective address set forth
in Section 11.1 shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding sentence. Each of
the parties hereto, irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby in (a) the United States District Court
for the Southern District of New York or (b) the Supreme Court of the State of
New York, New York County, and hereby further irrevocably and unconditionally
waives and agrees not to
96
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
11.13 Certain Definitions.
-------------------
For purposes of this Agreement, the term:
(i) "affiliate" of a person means a person that directly or
---------
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first mentioned person;
(ii) "person" means an individual, corporation, partnership,
------
association, trust, incorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act);
(iii) "subsidiary" or "subsidiaries" of Buyer, BFC or any
---------- ------------
other person means any corporation, partnership, joint venture or other
legal entity of which Buyer, BFC or such other person, as the case may be
(either alone or through or together with any other subsidiary), owns,
directly or indirectly, 50% or more of the stock or other equity interests
the holder of which is generally entitled to vote for the election of the
board of directors or other governing body of such corporation or other
legal entity; and
(iv) "the knowledge of" or "the best knowledge of" a party
---------------- ---------------------
hereto when modifying any representation and warranty shall mean that such
party has no knowledge that such representation and warranty is not true
and correct to the same extent as provided in the applicable representation
and warranty, and that:
(A) such party has made appropriate investigations and
inquiries of its officers and responsible employees; and
97
(B) nothing has come to its attention in the course of such
investigation and inquiries or otherwise which would cause such
party, in the exercise of due diligence, to believe that such
representation and warranty is not true and correct in all material
respects.
BFC shall be deemed to have satisfied the requirements of Subsection
11.13(iv) above by making appropriate investigations and inquiries of the
officers and employees of BFC and BFC Investments listed on Schedule 11.13, and
--------------
no knowledge of any other officer or employee of BFC or BFC Investments shall be
imputed to the persons listed on Schedule 11.13 or to BFC.
--------------
11.14 Entire Agreement.
----------------
This Agreement, and the Schedules and Exhibits hereto set forth the entire
understanding of the parties hereto and no modifications or amendments to this
Agreement shall be binding on the parties unless in writing and signed by the
party or parties to be bound by such modification or amendment.
11.15 Specific Performance.
--------------------
The parties agree that if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at law would exist and
damages would be difficult to determine, and that the parties shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at
law or equity.
98
11.16 Section Headings; Table of Contents.
-----------------------------------
The section headings contained in this Agreement and the Table of Contents
to this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
11.17 Severability.
------------
If any provision of this Agreement shall be declared by any court of
competent jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement shall not be affected and shall remain in full
force and effect.
11.18 Counterparts.
------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall be deemed to
be one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
XXXXXX FOODS CORPORATION
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President, General
Counsel and Secretary
EAGLE FAMILY FOODS, INC.
By: /s/ Xxxx O'C Xxxxxx
-------------------------------------
Name: Xxxx O'C Xxxxxx
Title:President and Chief Executive Officer
The undersigned joins in this Agreement for purposes of Sections 1.1(b), 1.2(b),
1.3(b), 1.4, 1.5, 2.1, 5.4, 5.6, 6.2, 7.3 and 11.4 hereunder.
BFC INVESTMENTS, L.P.
By: Xxxxxx Foods Corporation, its
General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Secretary
