FIRST AMENDED AND RESTATED
STOCK & ASSET PURCHASE AGREEMENT
This FIRST AMENDED AND RESTATED STOCK & ASSET PURCHASE AGREEMENT (this
"First Amended Agreement"), dated as of February 12, 2002, is entered into by
and among IMPERIAL SUGAR COMPANY, a Texas corporation ("Imperial"), SAVANNAH
FOODS & INDUSTRIES, INC., a Delaware corporation ("SFI" or "Seller"), MICHIGAN
SUGAR COMPANY, a Michigan corporation (the "Company"), XXXXX HOLDINGS, INC., a
Delaware corporation ("Xxxxx"), and MICHIGAN SUGAR BEET GROWERS, INC., a
Michigan Agricultural Cooperative ("Buyer").
Background Statement
The parties hereto initially entered into a Stock and Asset Purchase
Agreement (the "Agreement") dated as of August 6, 2001, and the parties desire
to amend and replace the Agreement by entering into this First Amended
Agreement; therefore, the parties hereby enter into this First Amended Agreement
for the purpose of replacing and superceding the Agreement in its entirety,
making the Agreement null and void.
The parties acknowledge: that Shareholder, the Company, and other related
entities were part of a consolidated group of debtors in cases (hereinafter
collectively referred to as the "Bankruptcy Case") instituted on January 16,
2001 (the "Petition" date) under Chapter 11 of the United States Bankruptcy Code
(Title 11 of the United States Code, (S)(S) 101, et seq.) before the United
States Bankruptcy Court for the District of Delaware (the "Court"); that said
consolidated group of debtors emerged from bankruptcy as of August 29, 2001; and
that no Court approval is required for the parties to enter into this First
Amended Agreement for the purpose of replacing the Agreement.
WITNESSETH:
WHEREAS, Imperial, SFI, the Company, Xxxxx and Buyer agree that the terms
and conditions of this First Amended Agreement shall supercede and replace the
Agreement and any other agreements between the parties that may conflict with
the First Amended Agreement;
WHEREAS, Imperial owns all of the issued and outstanding capital stock of
SFI, SFI owns all of the issued and outstanding capital stock of the Company,
and the Company owns all of the issued and outstanding stock of Great Lakes
Sugar Company, an Ohio corporation ("Great Lakes"); and
WHEREAS, Imperial owns all of the issued and outstanding capital stock of
Xxxxx, and Xxxxx owns certain intellectual property which is licensed to, and
used in the operations of, the Company; and
WHEREAS, SFI desires to sell to Buyer all of the issued and outstanding
capital stock of the Company and Great Lakes, and Buyer desires to purchase all
of the issued and outstanding capital stock of the Company and Great Lakes upon
the terms and subject to the conditions set
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forth herein (hereinafter, the purchase of such stock of the Company and stock
of Great Lakes is sometimes referred to collectively as the "Stock
Acquisition"); and
WHEREAS, in connection with and after said Stock Acquisition, Xxxxx desires
to license and eventually sell to Buyer certain intellectual property licensed
to and used in the operations of the Company, and Buyer desires to purchase said
property (the "Xxxxx Assets"), upon the terms and subject to the conditions set
forth herein (hereinafter, such purchase is sometimes referred to as the "Xxxxx
Assets Acquisition"); and
WHEREAS, in connection with the purchases and sales contemplated hereby,
the Buyer has entered into certain ancillary agreements with Imperial and/or
certain subsidiaries of Imperial concerning the post-closing operations of the
Company, all on the terms and conditions as set forth hereinafter;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
In addition to terms used and otherwise defined herein, as used in this
First Amended Agreement (including the Schedules and Exhibits hereto), the
following definitions shall apply:
1.01 "Affiliate" of a specified Person means a Person that directly or
indirectly controls or is controlled by, or is under common control with, the
Person specified.
1.02 "Ancillary Agreements" means, collectively, the "Marketing Agreement"
attached hereto as Exhibit A; the "Facility Lease Agreement" attached hereto as
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Exhibit B; and, the "Factories Management Agreement" attached hereto as Exhibit
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C.
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1.03 RESERVED
1.04 RESERVED.
1.05 "Beet Processing Facilities" means the sugarbeet processing
facilities located in Caro, Carrollton, Croswell, and Sebewaing, Michigan.
1.06 "Business" means the business conducted by the Company immediately
prior to the Closing relating to the processing of sugar beets and the
manufacturing of sugar and related by-products.
1.07 "Business Know-How" means manufacturing and other know-how, trade
secrets, formulas, processes, Product formulations and specifications,
ingredient lists, packaging and labeling specifications, business information,
including customer lists, and all books and records relating to any of the
foregoing. Business Know-How shall not include the Xxxxx Assets, or any
intellectual property associated therewith. Business Know-How shall not include
a method of
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processing water devised by the Company, "Caro Water Processing Process" (See
Schedule 8.3).
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1.08 "Code" means the Internal Revenue Code of 1986, as amended, and any
reference to any particular Code provision shall be interpreted to include any
revision of or successor to such provision regardless of how numbered or
classified.
1.09 RESERVED.
1.10 RESERVED.
1.11 RESERVED.
1.12 RESERVED.
1.13
1.13 RESERVED.
1.14 "Liability" means any liability, obligation, debt, undertaking or
commitment of any nature, whether known or unknown, accrued, absolute,
contingent or otherwise, and whether due or to become due.
1.15 "Person" means any individual, corporation, partnership, limited
liability company, business trust, joint stock company, trust unincorporated
organization, joint venture, firm or other entity, or a government or any
political subdivision or agency, department or instrumentality thereof.
1.16 RESERVED.
1.17 "Products" means the products identified on Schedule 1.17 attached
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hereto.
1.18 RESERVED.
1.19 "Senior Secured Lenders" means the senior secured lenders of Imperial
and/or any of its Affiliates listed on attached Schedule 1.19.
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1.20 "Trademarks" means any words, names, logos, symbols, designs or
devices or any combination thereof, whether or not registered, used to identify
and distinguish the Products from those manufactured or sold by others and to
indicate the source of the goods. Trademarks shall not include the Xxxxx Assets
(as described in Schedule 4.1) or any intellectual property associated
therewith.
1.21 "Transfer Taxes" means any tax, and all sales and use, excise, value
added, transfer, stamp, recording, documentary, registration, conveyancing or
similar taxes, duties or other expenses related to the transactions contemplated
by this First Amended Agreement.
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ARTICLE 2
PURCHASE AND SALE OF THE
STOCK OF THE COMPANY AND OF GREAT LAKES
2.1 Purchase and Sale of Stock. On the terms and subject to the
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conditions of this First Amended Agreement and at the Closing, SFI shall sell,
convey, transfer and assign to Buyer, and Buyer shall purchase from SFI, all of
the issued and outstanding stock of the Company and of Great Lakes.
2.1.1 Excluded Assets/Liabilities. Buyer and Seller acknowledge and
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agree that any benefits or receivables due to Imperial, and any liabilities or
obligations of Imperial, under the Facility Lease Agreement, Factories
Management Agreement and Marketing Agreement are excluded from the transfer of
stock from Seller to Buyer.
2.2 Consideration Paid by Buyer. Buyer shall pay to SFI the "Closing Date
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Purchase Price" which shall include the following:
2.2.1 Buyer shall pay to SFI at Closing $29,000,000 in immediately
available certified funds by federal reserve wire transfer as directed by SFI;
and
2.2.2 Buyer shall pay to SFI a sum equal to $15,000,000, said amount
to be financed by Imperial as a term loan (hereinafter the "Term A Loan") in
accordance with the terms and conditions of the loan agreement entered into by
Buyer and Imperial as of the Closing Date (hereinafter the "Credit Agreement"),
including the notes pertaining thereto, substantially in the form attached
hereto as Exhibit D; and
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2.2.3 Buyer shall pay to SFI a sum equal to $1,000,000, said amount
to be financed by Imperial as a term loan (hereinafter the "Term B Loan") ") in
accordance with the terms and conditions of the Credit Agreement, including the
notes pertaining thereto, substantially in the form attached hereto as Exhibit
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D.
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2.3 Xxxxxxx Money Deposit. SFI acknowledges that Buyer has paid to SFI a
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non-refundable xxxxxxx money deposit of Five Hundred Thousand Dollars
($500,000). If Closing occurs on or before March 1, 2002, the deposit shall be
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applied against the portion of the purchase price due to be paid by Buyer to SFI
at Closing under Section 2.2.1. If Closing does not occur on or before March 1,
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2002, then the xxxxxxx money deposit shall remain the property of SFI.
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ARTICLE 3
RESERVED.
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ARTICLE 4
USE AND SALE OF THE XXXXX ASSETS POST-CLOSING
4.1 Use of the Xxxxx Assets Post-Closing.
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4.1.1 Effective upon the consummation of the Closing on the Closing
Date, Xxxxx hereby grants to Buyer for no additional consideration an exclusive
license to the Company to use the Xxxxx Assets described on attached Schedule
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4.1.1 in connection with the Company's marketing, sale and distribution of the
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Company's Products (the "Xxxxx License"), said Xxxxx License to be granted for
the period ending as of the expiration date of the first term of the Marketing
Agreement (Exhibit A); provided, however, that the Xxxxx License shall terminate
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in the event that Buyer violates any of the terms and conditions of the Credit
Agreement, including any notes pertaining thereto, which violation has not been
timely cured as provided in the Credit Agreement.
4.1.2 The Xxxxx License and the Marketing Agreement shall be
coterminous; however, the parties agree that, in the event the Marketing
Agreement terminates by reason of breach by the Buyer, any attending termination
of the Xxxxx License shall not operate to cause the Xxxxx Assets to be
transferred to the Buyer.
4.2 Sale of the Xxxxx Assets Post-Closing. Xxxxx shall transfer good and
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marketable title to the Xxxxx Assets to Buyer for the total consideration of One
Dollar ($1.00) upon the expiration of the first term of the Marketing Agreement
unless the Xxxxx License is terminated in accordance with Section 4.1.1 herein,
in which case Xxxxx shall transfer good and marketable title to the Xxxxx Assets
to Buyer for the consideration of One Dollar ($1.00) only upon the Buyer's
satisfaction of, or Imperial's waiver of, the terms and conditions of the Credit
Agreement, including any notes pertaining thereto. The date that the Xxxxx
Assets are transferred to Seller hereunder shall be the "Xxxxx Transfer Date."
4.3 Allocation of Purchase Price. The purchase price paid for the Xxxxx
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Assets shall be as reasonably determined by Buyer. Neither Buyer nor SFI, nor
any Affiliate of either, unless required to do so by applicable law, shall
knowingly take any position (whether in financial statements, audits, tax
returns or otherwise) which is inconsistent with the allocation under this
Section 4.3. Buyer and SFI shall exchange drafts of any information returns
required by Section 1060 of the Code, and any similar state statute that is
applicable, at least 60 days prior to filing such returns and shall discuss any
modification by the receiving party.
4.4 No Liability Assumed in Connection with Sale of the Xxxxx Assets.
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Buyer shall not assume any Liability associated with the business and operations
of Xxxxx.
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ARTICLE 5
OTHER AGREEMENTS
5.1 Marketing. Imperial and Buyer have entered into a Marketing
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Agreement, attached as Exhibit A, under which Imperial agrees to handle sales
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and marketing of all sugar for Buyer for a period of ten (10) years at a
marketing management fee and on the terms set forth in said agreement. Said
Marketing Agreement shall operate separately and independently from this First
Amended Agreement, and shall survive any termination or expiration of this First
Amended Agreement.
5.2 By-Products. As of the Closing date, Buyer shall retain ownership of
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and shall be responsible for the sales and marketing of all by-products of the
sugar refining process commencing with the 2001 sugarbeet crop, subject to
marketing contracts which are in effect as of April 1, 2001, and subject to such
marketing contracts as the Buyer shall establish.
5.3 Year 2000 Crop Payment / Repair and Maintenance.
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5.3.1 April, 2001 Payment under the Year 2000 Grower Contract: Buyer
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acknowledges that the Company has caused to be paid to each grower who
contracted with the Company for the 2000 sugarbeet crop a sum equal to Two and
One-Half Dollars ($2.50) per ton of such grower's sugarbeets. Between now and
the date of Closing, the Company shall apply an amount equal to Two and One-Half
Dollars ($2.50) per ton of sugarbeets toward the "Year 2001 Repair and
Maintenance Costs" (as described in Schedule V of the Facility Lease Agreement
attached as Exhibit B) incurred after March 22, 2001. Buyer acknowledges, on
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behalf of the Buyer and no other person or entity, that the payment to growers
and the application of monies by the Company towards the Year 2001 Repair and
Maintenance Costs provided for in this Section 5.3.1 together constitute full
satisfaction of the Company's obligations for, or related to, the April, 2000
payment due or to become due under the "Year 2000 Grower Contract". The "Year
2000 Grower Contract" as used herein is defined as the contracts entered into by
the Company and the growers for the purchase of sugar beets for processing at
the Company's facilities for the fiscal year 2000.
5.3.2 October, 2001 Payment under the Year 2000 Grower Contract: Buyer
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acknowledges that the Company applied an amount equal to Two and One-Half
Dollars ($2.50) per ton of sugarbeets toward the Year 2001 Repair and
Maintenance Costs incurred after March 2001, and Buyer acknowledges, on behalf
of the Buyer and no other person or entity, that this application of these
monies satisfies the Company's obligations for, or related to, the October 2001
payment due or to become due under the Year 2000 Grower Contract.
ARTICLE 6
OPERATIONS OF THE COMPANY & GREAT LAKES PENDING CLOSING
6.1 Operations by the Company Pending Closing. SFI has caused the Company
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to
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operate in keeping with its normal business practices from August 10, 2001
through Closing, subject to the conditions set forth in this Article 6 and
elsewhere in this First Amended Agreement:
6.1.1 The Company shall not have been obligated to operate any one of
the Beet Processing Facilities at a projected operating level which would
produce a loss at normal operating levels and in keeping with past practices of
the Company; provided, however, that, prior to materially changing the operating
levels at a factory, the Company conferred with the Buyer and provides ten (10)
day's notice to the Buyer and an opportunity to cover such loss.
6.1.2 Operations during the period between March 22, 2001 and October
1, 2001 reflected the Repair and Maintenance and grower payments as set forth in
Section 5.3 hereof provided that, if the Buyer does not close the Proposed
Transaction by February 28, 2002, Buyer shall reimburse to the Company the
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amounts the Company applied to the Repair and Maintenance Costs as described in
Section 5.3 no later than April 1, 2002.
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6.1.3 The ownership of harvested beets and refined sugar and by-
products shall be retained by the Buyer. The Company has leased certain assets
of the Company to Buyer upon the terms set forth in the Facility Lease
Agreement, attached as Exhibit B, which allows Buyer to place the sugar under
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CCC loans. The Company, as agent for Buyer, and in a manner set forth in the
Factories Management Agreement, attached as Exhibit C, has agreed to manage the
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assets and process and market the sugar at the expense of Buyer together with a
management fee of Four Dollars ($4.00) per ton of beets delivered, which expense
and fee shall be withheld from the proceeds of the sale of sugar before
remitting the balance to the Buyer provided, however, that the proceeds are
deposited in a separate account as set forth in the Marketing Agreement, Exhibit
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A. There shall not be a separate sales and marketing fee while a management fee
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due to the Company is applicable under the Factories Management Agreement. The
Facility Lease Agreement, Factories Management Agreement and Marketing Agreement
shall operate separately and independently from this First Amended Agreement and
shall survive any termination or expiration of this First Amended Agreement.
On the Closing Date, the Buyer and Imperial shall have entered into a the Credit
Agreement and a Guarantee and Collateral Agreement (hereinafter "Security
Agreement"), in addition to any notes and other agreements pertinent thereto,
which Security Agreement has been incorporated into, and made a part hereof as
Exhibit E.
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ARTICLE 7
CLOSING OF SALE OF THE STOCK OF THE COMPANY AND THE STOCK OF GREAT LAKES;
CLOSING CONDITIONS
7.1 Closing.
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7.1.1 The closing (the "Closing") of the purchase of the stock of the
Company and the stock of Great Lakes shall be held at the offices of Michigan
Sugar Company in Saginaw, Michigan, at 10:00 a.m., local time, February 12,
2002. The date on which the Closing
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shall occur is hereinafter referred to as the "Closing Date," and the Closing
shall be deemed effective as of the close of business on the Closing Date. The
parties have agreed to enter into a Closing Memorandum mutually agreeable to the
parties as of the Closing Date to memorialize the Closing and understandings of
the parties regarding post-closing activities.
7.1.2 At the Closing, subject to and on the terms and conditions set
forth in this First Amended Agreement, Buyer shall deliver to SFI (a) by federal
reserve wire transfer to U.S. bank accounts designated in writing by SFI
immediately available funds in an aggregate amount equal to the cash portion of
the Closing Date Purchase Price, (b) certified copies of resolutions duly
adopted by Buyer's board of directors authorizing the execution, delivery and
performance of this First Amended Agreement, the Ancillary Agreements and the
other agreements contemplated hereby, (c) a certificate of the Secretary or an
Assistant Secretary of Buyer as to the incumbency of the officer(s) of Buyer
(who shall not be such Secretary or Assistant Secretary) executing this First
Amended Agreement and the Ancillary Agreements (d) a short-form certificate of
good standing of Buyer, certified by the Secretary of State of Buyer's state of
incorporation as of a date not more than three business days prior to the
Closing Date; and (e) a fully executed Credit Agreement and Security Agreement,
including any notes and other agreements pertaining thereto.
7.1.3 At the Closing, subject to and on the terms and conditions set
forth in this First Amended Agreement, SFI shall deliver or cause to be
delivered to Buyer (a) such appropriately executed instruments of sale,
assignment, transfer and conveyance in form and substance reasonably
satisfactory to Buyer evidencing and effecting the sale and transfer to Buyer of
the stock of the Company and the stock of Great Lakes (it being, understood,
however, that such instruments shall not require SFI, Imperial, any affiliate or
any other Person to make any additional substantive representations, warranties
or covenants, express or implied, not contained in this First Amended Agreement)
and such other documents (including duly executed Ancillary Agreements) as are
specifically required by this First Amended Agreement, (b) certified copies of
resolutions duly adopted by SFI's board of directors authorizing the execution,
delivery and performance of this First Amended Agreement, the Ancillary
Agreements and the other agreements contemplated hereby, (c) a certificate of
the Secretary or an Assistant Secretary of SFI as to the incumbency of the
officer(s) of SFI (who shall not be such Secretary or Assistant Secretary)
executing this First Amended Agreement and the Ancillary Agreements (d) a short-
form certificate of good standing of SFI, certified by the Secretary of State of
the state of its incorporation as of a date not more than three business days
prior to the Closing Date; and (e) a fully executed Credit Agreement and
Security Agreement, including any notes and other agreements pertaining thereto.
7.1.4 Except as provided in Section 12.7, at the Closing Date, SFI
shall, and shall cause the Company to, deliver possession to Buyer all of the
Company's tangible and intangible assets, except with respect to the Xxxxx
Assets. Prior to the Closing, except as otherwise provided herein, SFI and
Buyer shall agree on reasonable procedures to transfer possession of said assets
to Buyer at Closing, or with the prior agreement of Buyer, as soon as
practicable on or after the Closing.
7.2 RESERVED.
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7.3 Conditions to Closing.
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7.3.1 Buyer's Obligation. The obligation of Buyer to purchase and
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pay for the stock of the Company and the stock of Great Lakes is subject to the
satisfaction (or waiver by Buyer) as of the Closing of the following conditions:
7.3.1.1 The representations and warranties of SFI made in this
First Amended Agreement shall be true and correct as of the Closing Date, except
for representations and warranties that speak as of a specific date or time
(which need only be true and correct as of such date or time), and SFI shall
have performed or complied with all obligations and covenants required by this
First Amended Agreement to be performed or complied with by SFI by the time of
the Closing;
7.3.1.2 No injunction or order of any court or administrative
agency of competent jurisdiction shall be threatened, pending or in effect as of
the Closing which (a) restrains or prohibits the purchase and sale of the stock
of the Company or the stock of Great Lakes, (b) restricts or would restrict
Buyer in the operation of the Business or any Business operated by Buyer as of
such date as a result of the Closing, (c) seeks to invalidate or render
unenforceable any material provision of this First Amended Agreement or any of
the Ancillary Agreements, or (d) imposes or seeks to impose a material fine or
other damage on Buyer as a result of the transactions contemplated by this First
Amended Agreement, and there shall not be any action taken, or any statute,
rule, regulation, judgment, order or injunction enacted, entered, enforced,
promulgated, issued or deemed applicable to the transactions contemplated hereby
by any federal, state or foreign court, government or governmental authority or
agency, which would reasonably be expected to result, directly or indirectly, in
any of the foregoing;
7.3.1.3 SFI shall have obtained, or caused to be obtained, the
Required Consents (as defined in Section 12.1.1);
7.3.1.4 SFI shall have, or shall cause to be, removed,
satisfied, released, discharged and otherwise extinguished, with no liability to
Buyer or its affiliates, all mortgages, liens, security interests or other
encumbrances of any nature on or affecting the stock of the Company, the stock
of Great Lakes, the Business and the related assets, including any lien in favor
of Xxxxxx Trust but excluding Permitted Encumbrances (as defined herein), and
SFI shall provide Buyer with such evidence of such removal satisfaction, release
or extinguishment as Buyer may reasonably request;
7.3.1.5 SFI shall have executed and delivered to Buyer the
Ancillary Agreements and the other certificates, documents and instruments
required to be delivered by SFI pursuant to Section 7.1.3;
7.3.1.6 RESERVED.
7.3.1.7 Buyer shall have obtained commitments for financing
satisfactory to complete the transaction contemplated herein;
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7.3.1.8 RESERVED.
7.3.1.9 All necessary permits, regulatory approvals and
consents shall have been obtained;
7.3.1.10 Buyer shall be reasonably satisfied with the results
of due diligence investigations (including financial, operational, environmental
and title matters) relating to the stock of the Company, the Business to be
acquired, the Great Lakes Assets and the Xxxxx Assets, all said due diligence to
be completed prior to Closing; and
7.3.1.11 The Credit Agreement, including the notes pertaining
thereto, substantially in the form attached hereto as Exhibit D, and the
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Security Agreement, including any documents pertaining thereto, substantially in
the form attached as Exhibit E, shall have been executed by all parties
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thereto.
7.3.2 SFI's Obligation. The obligation of SFI to sell and deliver or
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cause to be sold and delivered the stock of the Company and the stock of Great
Lakes to Buyer is subject to the satisfaction (or waiver by SFI) as of the
Closing of the following conditions:
7.3.2.1 The representations and warranties of Buyer made in
this First Amended Agreement shall be true and correct as of the Closing Date,
except for representations and warranties that speak as of a specific date or
time (which need only be true and correct as of such date or time), and Buyer
shall have performed or complied with the obligations and covenants required by
this First Amended Agreement to be performed or complied with by Buyer by the
time of the Closing;;
7.3.2.2 No injunction or order of any court or administrative
agency of competent jurisdiction shall be in threatened, pending or effect as of
the Closing which (a) restrains or prohibits the purchase and sale of the stock
of the Company and the stock of Great Lakes, (b) seeks to invalidate or render
unenforceable any material provision of this First Amended Agreement or any of
the Ancillary Agreements or (c) imposes or seeks to impose a material fine or
other damage on SFI as a result of the transactions contemplated by this First
Amended Agreement, and there shall not be any action taken, or any statute,
rule, regulation, judgment, order or injunction enacted, entered, enforced,
promulgated, issued or deemed applicable to the transactions contemplated hereby
by any federal, state or foreign court, government or governmental authority or
agency, which would reasonably be expected to result, directly or indirectly, in
an of the foregoing;
7.3.2.3 Buyer shall have executed and delivered to SFI the
Ancillary Agreements, the other certificates, documents and instruments required
to be delivered by Buyer pursuant to Section 7.1.2, the Credit Agreement,
including the notes pertaining thereto, substantially in the form attached
hereto as Exhibit D and the Security Agreement, including any documents
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pertaining thereto, substantially in the form attached as Exhibit E; and
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7.4 RESERVED.
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7.5 Conditions to the Transfer of the Xxxxx Assets.
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7.5.1 Conditions to Each Party's Obligations. Neither Xxxxx nor
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Buyer shall be subject on the Xxxxx Transfer Date to any order, decree or
injunction of a court of competent jurisdiction that enjoins or prohibits the
consummation of the transactions contemplated by this First Amended Agreement
relating to the Xxxxx Assets, nor shall there be pending a suit or proceeding by
any Governmental Authority that seeks injunctive or other relief in connection
with such transactions.
7.5.2 Conditions to the Obligations of Buyer. The obligations of
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Buyer to purchase the Xxxxx Assets contemplated hereby shall be subject to the
following conditions, any one or more of which may be waived by Buyer: (a) all
representations and warranties of Xxxxx contained in Article 8 with respect to
the Xxxxx Assets shall be true and correct in all material respects as of the
Xxxxx Transfer Date as though made as of such date, except for matters that do
not individually or in the aggregate have a material adverse effect on the Xxxxx
Assets; and (b) Xxxxx shall have performed and complied in all material respects
with all covenants and agreements contained in this First Amended Agreement
required to be performed and complied with by Xxxxx with respect to the sale and
transfer of the Xxxxx Assets at or prior to the Xxxxx Transfer Date.
7.5.3 Conditions to the Obligations of Xxxxx. The obligations of
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Xxxxx to effect the transactions contemplated hereby shall be subject to the
following conditions, any one or more of which may be waived by SFI: (a) all
representations and warranties of Buyer contained in this First Amended
Agreement shall be true and correct in all material respects as of the Xxxxx
Transfer Date as though made as of such date, except for matters that do not
materially impair the ability of Buyer to perform its obligations under this
First Amended Agreement; and (b) Buyer shall have performed and complied in all
material respects with all covenants and agreements contained in this First
Amended Agreement required to be performed and complied with by it at or prior
to the Xxxxx Transfer Date.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF IMPERIAL, SFI AND XXXXX
8.1 Authority; No Conflicts.
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8.1.1 Imperial represents and warrants, as of the Closing Date, that
(i) Imperial is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; (ii) subject to
approval of the Board of Directors of Imperial, General Electric Capital
Corporation ("GECC") and the Senior Secured Lenders, Imperial has all requisite
corporate power and authority to enter into this First Amended Agreement and the
Ancillary Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby; (iii) Imperial has all requisite corporate
power and authority and all authorizations, licenses, permits and certificates
necessary to carry on its business now being
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conducted and to own, lease and operate its assets; (iv) all requisite corporate
action required to be taken by Imperial to authorize the execution, delivery and
performance of this First Amended Agreement and the Ancillary Agreements to
which it is a party and the consummation of the transactions contemplated hereby
and thereby has been taken; (v) all requisite corporate action required to be
taken by Imperial to authorize the performance of this First Amended Agreement
and the consummation of the transactions contemplated hereby has been taken;
(vi) Imperial has duly executed and delivered this First Amended Agreement and
the Ancillary Agreements to which it is a party; (vii) subject to the approval
of the Board of Directors of Imperial, GECC and the Senior Secured Lenders, this
First Amended Agreement and the Ancillary Agreements to which Imperial is a
party constitute, or will constitute, as applicable, valid and binding
obligations of Imperial, enforceable against it in accordance with their
respective terms; and (viii) the execution and delivery by Imperial of this
First Amended Agreement and the Ancillary Agreements to which it is a party do
not, and the consummation by Imperial of the transactions contemplated hereby
and thereby and compliance by Imperial with the terms hereof and thereof will
not, conflict with, or result in any violation of or default under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
loss of a benefit under, or result in the creation of any lien, claim,
encumbrance, security interest, option, charge or restriction of any kind upon
any of the assets or stock being sold hereunder (including but not limited to
the stock of the Company and the stock of Great Lakes) under, or require any
consent, authorization, approval or action by or notice to any third party or
court or governmental body under (a) any provision of the articles of
incorporation, bylaws or other organization documents of Imperial, (b) any note,
bond, mortgage, indenture, deed of trust, license, lease, contract, commitment,
agreement or arrangement to which Imperial may be a party or by which Imperial
or its assets are bound or affected, other than those contracts set forth in
Schedule 8.1.1 with respect to which the approval, exemption, authorization or
--------------
consent of a third party is required (the "Imperial Contracts"), or (c) any
judgment, order or decree or any statute, law, ordinance, rule or regulation
applicable to Imperial, other than any such conflicts, violations, defaults,
rights or liens, claims, encumbrances, security interests, options, charges or
restrictions that, individually or in the aggregate, would not materially and
adversely affect the ability of Imperial to consummate the transactions
contemplated hereby.
8.1.2 SFI represents and warrants, as of the Closing Date, as
follows: (i) each of SFI, the Company, and Great Lakes (collectively, the "SFI
Companies") is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; (ii) SFI owns,
directly or indirectly, all of the issued and outstanding stock of the Company,
and the Company owns all of the issued and outstanding capital stock of Great
Lakes; (iii) subject to approval of the Board of Directors of each of the SFI
Companies, and the Senior Secured Lenders, each of the SFI Companies has all
requisite corporate power and authority to enter into this First Amended
Agreement and the Ancillary Agreements to which it is a party, and to consummate
the transactions contemplated hereby and thereby; (iv) each of the SFI Companies
has all requisite corporate power and authority and all authorizations,
licenses, permits and certificates necessary to carry on its respective business
now being conducted and to own, lease and operate its respective assets; (v) all
12
requisite corporate action required to be taken by each of the SFI Companies to
authorize the execution, delivery and performance of this First Amended
Agreement and the Ancillary Agreements to which each such entity may be a party
and the consummation of the transactions contemplated hereby and thereby has
been taken; (vi) all requisite corporate action required to be taken by each of
the SFI Companies to authorize the performance of this First Amended Agreement
and the consummation of the transactions contemplated hereby has been taken;
(vii) each of the SFI Companies has duly executed and delivered this First
Amended Agreement and the Ancillary Agreements to which each such entity may be
a party; (viii) subject to the approval of the Board of Directors of each of the
SFI Companies and the Senior Secured Lenders, this First Amended Agreement and
the Ancillary Agreements constitute, or will constitute, as applicable, valid
and binding obligations of each of the SFI Companies a party thereto,
enforceable against each such party in accordance with their respective terms;
and (ix) the execution and delivery by each of the SFI Companies of this First
Amended Agreement and the Ancillary Agreements to which each such entity may be
a party do not, and the consummation by each such entity a party thereto of the
transactions contemplated hereby and thereby and compliance by each such entity
with the terms hereof and thereof will not, conflict with, or result in any
violation of or default under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
result in the creation of any lien, claim, encumbrance, security interest,
option, charge or restriction of any kind upon any of the assets or stock being
sold hereunder (including but not limited to the stock of the Company and the
stock of Great Lakes) under, or require any consent, authorization, approval or
action by or notice to any third party or court (except for the bankruptcy
Court) or governmental body under (a) any provision of the articles of
incorporation, bylaws or other organization documents of each of the SFI
Companies, (b) any note, bond, mortgage, indenture, deed of trust, license,
lease, contract, commitment, agreement or arrangement to which any of the SFI
Companies or Great Lakes may be a party or by which any of the SFI Companies or
their respective assets are bound or affected, other than those contracts of SFI
set forth in Schedule 8.1.2 with respect to which the approval, exemption,
--------------
authorization or consent of a third party is required (the "SFI Contracts"),
those contracts of the Company set forth in Schedule 8.1.2 with respect to which
--------------
the approval, exemption, authorization or consent of a third party is required
(the "Company Contracts"), and those contracts of Great Lakes set forth in in
Schedule 8.1.2 with respect to which the approval, exemption, authorization or
--------------
consent of a third party is required (the "Great Lakes Contracts"), or (c) any
judgment, order or decree or any statute, law, ordinance, rule or regulation
applicable to either of the SFI Companies, other than any such conflicts,
violations, defaults, rights or liens, claims, encumbrances, security interests,
options, charges or restrictions that, individually or in the aggregate, would
not materially and adversely affect the ability of any of the SFI Companies to
consummate the transactions contemplated hereby.
8.1.3 Xxxxx represents and warrants that, as of the Closing Date, (i)
Xxxxx is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation; (ii) subject to approval of
the Board of Directors of Xxxxx and the Senior Secured Lenders, Xxxxx has all
requisite corporate power and authority to enter into this First Amended
Agreement to which it is a party and to consummate the transactions contemplated
hereby and thereby; (iii) Xxxxx has all requisite corporate power and authority
and all authorizations, licenses, permits and certificates necessary to carry on
its business now being conducted and to own, lease and operate its assets; (iv)
all requisite corporate action required to be taken by Xxxxx to authorize the
execution, delivery and performance of this First Amended Agreement to which it
is a party and the consummation of the transactions contemplated hereby and
thereby has been taken; (v) all requisite corporate action required to be taken
by Xxxxx to
13
authorize the performance of this First Amended Agreement and the consummation
of the transactions contemplated hereby has been taken; (vi) Xxxxx has duly
executed and delivered this First Amended Agreement to which it is a party;
(vii) subject to the approval of the Board of Directors of Xxxxx and the Senior
Secured Lenders, this First Amended Agreement to which Xxxxx is a party
constitute, or will constitute, as applicable, valid and binding obligations of
Xxxxx, enforceable against it in accordance with their respective terms; and
(viii) the execution and delivery by Xxxxx of this First Amended Agreement to
which it is a party do not, and the consummation by Xxxxx of the transactions
contemplated hereby and thereby and compliance by Xxxxx with the terms hereof
and thereof will not, conflict with, or result in any violation of or default
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a benefit under, or result in the creation of any
lien, claim, encumbrance, security interest, option, charge or restriction of
any kind upon any of the assets or stock being sold under, or require any
consent, authorization, approval or action by or notice to any third party or
court or governmental body under (a) any provision of the articles of
incorporation, bylaws or other organization documents of Xxxxx, (b) any note,
bond, mortgage, indenture, deed of trust, license, lease, contract, commitment,
agreement or arrangement to which Xxxxx may be a party or by which Xxxxx or its
assets are bound or affected, other than those contracts set forth in Schedule
--------
8.1.3 with respect to which the approval, exemption, authorization or consent of
-----
a third party is required (the "Xxxxx Contracts"), or (c) any judgment, order or
decree or any statute, law, ordinance, rule or regulation applicable to Xxxxx,
other than any such conflicts, violations, defaults, rights or liens, claims,
encumbrances, security interests, options, charges or restrictions that,
individually or in the aggregate, would not materially and adversely affect the
ability of Xxxxx to consummate the transactions contemplated hereby.
8.2 Title to the Stock and Assets.
-----------------------------
8.2.1 The Stock of the Company and of Great Lakes. SFI represents
-------------------------------------------
and warrants that SFI has good and indefeasible title to all the stock of the
Company and, through the Company, the stock of Great Lakes, all free and clear
of all mortgages, liens, security interests or encumbrances of any nature
whatsoever.
8.2.2 The Company's Assets. SFI represents and warrants that the
--------------------
Company has good and indefeasible title to all of its tangible and intangible
assets, free and clear of all mortgages, liens, security interests or
encumbrances of any nature whatsoever, except (i) mechanics', carriers',
workmen's, repairmen's or other like liens arising or incurred in the ordinary
course of business, and liens for taxes and other governmental charges which are
not yet due and payable and will not be due and payable prior to the Closing;
(ii) other imperfections of title, restrictions and encumbrances, if any, which
imperfections of title, restrictions or encumbrances are not material in amount
or do not, individually or in the aggregate, impair the continued use and
operation of the assets to which they relate in any material respect in the
operation of the Business as currently conducted; and (iii) those liens and
other matters of record set forth on Schedule 8.2.2 attached (collectively, the
--------------
"Company Permitted Encumbrances").
8.2.3 RESERVED.
--------
8.2.4 The Great Lake Assets. SFI represents and warrants that, at
---------------------
the Closing
14
Date, Great Lakes will have, good and indefeasible title to all of its tangible
and intangible assets, free and clear of all mortgages, liens, security
interests or encumbrances of any nature whatsoever, except (i) mechanics',
carriers', workmen's, repairmen's or other like liens arising or incurred in the
ordinary course of business, and liens for taxes and other governmental charges
which are not yet due and payable and will not be due and payable and will not
be due and payable prior to the Closing; (ii) other imperfections of title,
restrictions and encumbrances, if any, which imperfections of title,
restrictions or encumbrances are not material in amount or do not, individually
or in the aggregate, impair the continued use and operation of the assets to
which they relate in any material respect in the operation of the Business as
currently conducted; and (iii) those liens and other matters of record set forth
on Schedule 8.2.4 attached (collectively, the "Great Lakes Permitted
--------------
Encumbrances").
8.2.5 The Xxxxx Assets. Xxxxx represents and warrants that, at the
----------------
Xxxxx Transfer Date, Xxxxx will have, good and indefeasible title to all of its
tangible and intangible assets, free and clear of all mortgages, liens, security
interests or encumbrances of any nature whatsoever, except for those liens,
imperfections of title, restrictions and encumbrances, if any, set forth on
Schedule 8.2.5 attached (collectively, the "Xxxxx Permitted Encumbrances").
--------------
8.3 Intellectual Property. SFI represents and warrants as follows: (a)
---------------------
except for the intellectual property rights disclosed on Schedule 8.3 (which
------------
includes but is not limited to the Xxxxx Assets and Caro Water Processing
Process), the Company owns or has the right to use, without payment to any other
party, all patents, Trademarks (registered or unregistered), trade names, trade
dress, packaging service marks, applications therefor, copyrights, trade
secrets, designs, plans, specifications, technical information and other
proprietary rights which the Company currently uses in its business
(collectively, the "Intellectual Property"); (b) except as disclosed on Schedule
--------
8.3, no claims are pending or, to the best of the knowledge of the Company,
---
threatened in writing against the Company by any Person with respect to the
Company's ownership or use of any of the Intellectual Property; (c) except as
disclosed on Schedule 8.3, no licenses, sublicenses or agreements pertaining to
------------
any of the Intellectual Property have been granted or entered into by or on
behalf of the Company, other than any intercompany licenses among one or more of
the entities part of Imperial's consolidated group, all of which intercompany
licenses will be terminated as of the Closing; and (d) except as disclosed on
Schedule 8.3: (i) no actions, suits or claims made pending or, to the knowledge
------------
of the Company, threatened in writing alleging that the manufacture, sale, or
use of any of the Products or the use by the Company of any of the Intellectual
Property infringes any intellectual property rights (including any patents) of a
third party, or infringes upon or otherwise violates any rights of a third
party; (ii) the Company is not subject to any judgment, order, writ, injunction
or decree of any court or any federal, state, local or other governmental
department, agency or instrumentality, domestic or foreign, or any arbitrator,
or is a party to any contract or agreement that restricts or impairs the
validity, enforceability or use of any of the Intellectual Property as currently
used in the Business; (iii) no Person has a right to receive a royalty or a
similar payment in respect of any Intellectual Property other than Xxxxx; (iv)
all registrations of the Trademarks that are included in the Intellectual
Property have been maintained in all material respects and are validly existing;
and (v) neither the development, manufacture, distribution, marketing, use or
sale of any Product nor the use of any Intellectual Property by the Company
infringes the intellectual property rights of any third party. At Closing, SFI
shall grant Buyer, for
15
no additional consideration, a Royalty Free Patent License to use the Caro Water
Processing Process in a form substantially similar to the form attached as
Exhibit F.
---------
8.4 Contracts of the Company and Great Lakes. SFI represents and warrants
----------------------------------------
as follows:
8.4.1 Schedule 8.4.1 lists the following agreements, contracts,
--------------
commitments, and undertaking, whether oral or written, to which the Company or
Great Lakes is a party, which are in effect as of the date hereof, and which
relate to the operation of the business or the assets of the Company or Great
Lakes, other than contracts entered into in the ordinary course of the business
of the Company or Great Lakes: (i) written contracts for the employment of an
Employee or other Person on a full-time or consulting basis or relating to
severance pay for any such Person; (ii) written confidentiality agreement
binding upon or inuring to the benefit of the Company; (iii) written agreement
or indenture mortgaging, pledging or otherwise placing a lien on any assets;
(iv) contract or group of related contracts with the same party with a value in
excess of $25,000.00 for the purchase of products or services, including
contracts with third parties for the research, development, manufacture or
packaging of the Products or for the supply of raw materials, ingredients,
packaging materials or other supplies; (v) contract or group of related
contracts with the same party for the sale of Products or services, including
contracts with customers; (vi) contract or group of related contracts with the
same party (other than any contract or group of related contracts for the
purchase or sale of products or services) continuing over a period of more than
six months from the date or dates thereof, not terminable by it on 30 days' or
less notice without penalty and having a value in excess of $10,000.00; (vii)
contract which prohibits the Company or Great Lakes from freely engaging in the
Business anywhere in the world; (viii) contract with a value in excess of
$10,000.00 for the distribution, marketing, advertising or promotion of any of
the Products, including any distributor, sales, consulting, advertising,
marketing, promotional or merchandising contracts; and (ix) license agreement or
agreement providing for the payment or receipt of royalties or other
compensation by any party in connection with the Intellectual Property.
8.4.2 Each agreement, contract, commitment and undertaking required
to be disclosed in Schedule 8.4.1 and to which the Company is a party is a valid
--------------
and binding obligation of the Company and is in full force and effect. Each
agreement, contract, commitment and undertaking required to be disclosed in
Schedule 8.4.1 and to which Great Lakes is a party is a valid and binding
--------------
obligation of Great Lakes and is in full force and effect. Except as disclosed
on Schedule 8.4.2, as the case may be, and, to the knowledge of the Company with
--------------
respect to those agreements, contracts, commitments and undertakings to which
the Company is a party, each other contracting party has performed all material
obligations required to be performed by it to date under each agreement,
contract, commitment and undertaking required to be disclosed in Schedule 8.4.1
--------------
and is not in breach or default in any material respect thereunder. Except as
disclosed on Schedule 8.4.2, as the case may be, and, to the knowledge of Great
--------------
Lakes with respect to those agreements, contracts, commitments and undertakings
to which Great Lakes is a party, each other contracting party has performed all
material obligations required to be performed by it to date under each
agreement, contract, commitment and undertaking required to be disclosed in
Schedule 8.4.1 and is not in breach or default in any material respect
--------------
thereunder.
16
8.4.3 Prior to the date of this First Amended Agreement, except as
disclosed in Schedule 8.4.1, Buyer has been provided an opportunity to review a
--------------
true and correct copy of each written contract or commitment, and a written
description of each oral contract or commitment, referred to in Schedule 8.4.1,
--------------
together with all amendments, waivers or other changes thereto.
8.5 Litigation; Decrees. Except as provided on Schedule 8.5 attached
------------------- ------------
hereto, SFI represents and warrants that (a) there are no legal, administrative,
arbitration or other proceedings or governmental investigations, lawsuits,
actions or claims relating to the Company, pending or, to the knowledge of the
Company, threatened in writing against the Company, at law or in equity, or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign that
could reasonably be expected to have a material and adverse effect on Buyer's
operation of the Business following Closing, and (b) there are no legal,
administrative, arbitration or other proceedings or governmental investigations,
lawsuits, actions or claims relating to Great Lakes, pending or, to the
knowledge of Great Lakes, threatened in writing against Great Lakes, at law or
in equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign that could reasonably be expected to have a material and adverse effect
on Buyer's operation of Great Lakes following the Closing Date.
8.6 Absence of Changes or Events. SFI represents and warrants that,
----------------------------
except as set forth on Schedule 8.6, since March 31, 2001, taken as a whole,
------------
there has been no material adverse change in the business or the operating
results, customer, employee or supplier relations or business condition of the
Company or of Great Lakes, other than changes relating to the manufacture,
marketing and sale of the Products and the sugar business in general and not
specifically relating to either the Company's business or Great Lakes' business.
8.7 Compliance with Applicable Laws. SFI represents and warrants as
-------------------------------
follows:
8.7.1 Except as set forth on Schedule 8.7.1, the respective
--------------
businesses of the Company and Great Lakes each has been conducted in compliance
in all material respects with all applicable statutes, laws, ordinances, rules,
orders and regulations of any governmental authority or instrumentality,
including, but not limited to, federal, state, local and foreign statutes, laws,
ordinances, rules, orders, regulations and other requirements pertaining to
product labeling and food and consumer products safety. Except as set forth on
Schedule 8.7.1, or on some other Schedule hereto, since September 30, 1999,
-------------- ------------------
neither the Company nor Great Lakes has received any written communication from
a governmental authority that alleges that any of the businesses of the Company
or Great Lakes, including the sale of the Products, is not in compliance with
applicable federal, state, foreign or local laws, rules and regulations.
8.7.2 Each of the Company and Great Lakes has in full force and
effect all licenses, permits and certificates, from federal, state, local and
foreign authorities (including, without limitation, federal and state agencies
regulating food safety) necessary to conduct the Business. Schedule 8.7.2 sets
--------------
forth a correct and complete list of such licenses, permits and certificates
other than business licenses and secretary or department of state certificates
applicable to all businesses generally. Each of the Company and Great Lakes has
conducted its
17
respective businesses in compliance with all material terms and conditions of
such licenses, permits and certificates, except as provided on Schedule 8.7.2.
--------------
8.8 Taxes. Except as set forth on Schedule 8.8, all federal, state,
----- ------------
local, foreign and other tax returns, reports and declarations of every nature
required to be filed by or on behalf of the Company or Great Lakes (either
separately or as part of a consolidated group) prior to the Closing Date have
been or will be timely filed on or before the due date thereof, including any
permissible extension periods, and such returns, reports and declarations as so
filed are complete and accurate and disclose all taxes required to be paid for
the periods covered thereby and all such taxes have been or will be timely paid
in full by the due date thereof, including any permissible extension periods.
Except as set forth on Schedule 8.8, there are no liens for taxes levied against
------------
the Company or Great Lakes, except liens for taxes that are not yet due and
payable and that will not be due and payable prior to the Closing, including any
permissible extension periods.
8.9 Products. SFI represents and warrants as follows:
--------
8.9.1 Schedule 1.17 sets forth a true and complete list of all
-------------
Products of the Company.
8.9.2 Each of the Products and/or its ingredients prepared,
manufactured, and sold by the Company (including Products in process and in
inventory on the Closing Date) have been, or will have been, prepared,
manufactured, and sold by the Company in compliance, in all material respects,
with the United States Food, Drug and Cosmetic Act, as amended (the "Food and
Drug Act"), and all rules and regulations promulgated thereunder and all
applicable federal, state and municipal laws and regulations governing the
purity of food sold for human consumption and nutritional labeling requirements
(all together the "Food Acts"). To the best of the knowledge of the Company, all
Products and/or its ingredients (including Products in process and in inventory
on the Closing Date) manufactured for the Company by a third party were
manufactured by such third party in compliance, in all material respects, with
the Food Acts. No Products of the Company sold before the Closing Date have been
or will be "adulterated" or "contaminated" within the meaning of the Foods Acts
or have constituted an article prohibited from introduction into interstate
commerce under the Food Acts. No Products in process or in inventory of the
Company on the Closing Date will be "adulterated" or "contaminated" within the
meaning of the Foods Acts or, based on its condition on the Closing Date with
respect to the Company, will constitute an article prohibited from introduction
into interstate commerce under the Food Acts when introduced after the Closing
Date.
8.9.3 To the knowledge of the Company, all the ingredients in each of
the Products of the Company generally are available on the open market and the
Company is unaware of any imminent or threatened shortage of supply.
8.9.4 The Company has not, whether voluntarily or as a result of any
action by any governmental or regulatory authority or trade or consumer group,
recalled or withdrawn a product for any reason, including any manufacturing or
labeling defect, impurity or adulteration, or issued any press release or public
statements containing any statement advising its trade
18
customers or consumers of the products to treat such products in any manner,
other than any such action taken in the ordinary course.
8.9.5 Except for any guaranty or warranty implied by law, the Company
has not given any guaranty or warranty or made any representation in respect of
products or services supplied or agreed to be supplied by the Company, or has
accepted any liability or obligation in respect of any such products or services
which would apply after any such products or services have been supplied, except
for such guaranties and warranties made in the ordinary course.
8.10 Inventory. SFI represents and warrants that, with respect to each of
---------
the Company and Great Lakes, such entity's inventory consists of raw products,
packaging, and materials relating to the products that are usable in the
ordinary course of such entity's business as now conducted.
8.11 Employees. Prior to Closing, SFI provided Buyer with a list of each
----------
employee who performs functions exclusively in connection with the Business of
the Company and the position, title, remuneration (including any scheduled
salary or remuneration increases), date of employment and accrued vacation pay
of each such employee (the "Company Employees") and a list of each employee who
performs functions exclusively in connection with the business of Great Lakes
and the position, title, remuneration (including any scheduled salary or
remuneration increases), date of employment and accrued vacation pay of each
such employee (the "Great Lakes Employees"). Upon being provided by SFI, the
list provided pursuant to this Section 8.11 shall be annexed as Schedule 8.11 of
--------------
this First Amended Agreement.
8.12 Labor and Employee Benefits. SFI represents and warrants as follows:
---------------------------
(a) as of the date of this First Amended Agreement, factory hourly workers at
the Carrollton, MI, Caro, MI, Sebewaing, MI and Croswell, MI factories are
represented by the Bakery, Confectionary, Tobacco Workers & Grain Millers, AFL-
CIO-CLC and its Locals No. 259G (Carrollton, MI), 260G (Caro, MI), 261G
(Sebewaing, MI) and 262G (Croswell, MI) under collective bargaining agreement
effective August 1, 1998 through July 31, 2001 (the "Current Michigan Union
Contract"); (b) as of the date of this First Amended Agreement, factory hourly
workers at the Great Lakes facility are represented by the Bakery,
Confectionary, Tobacco Workers & Grain Millers, AFL-CIO-CLC and its Local No.
294 - G, under a collective bargaining agreement effective June 1, 1999 through
May 31, 2002 (the "Current Ohio Union Contract"); (c) other than the current
Michigan Union Contract and the Current Ohio Union Contract, neither the Company
nor Great Lakes is aware of any additional attempt by any union to organize
either the Company Employees or the Great Lakes Employees; (d) no employee of
the Company or Great Lakes is employed under a written employment agreement,
except for Xxxx Xxxxxxxxxxxx who is party to an employment agreement with
Imperial; (e) the employee pension benefit plans and employee welfare benefit
plans of the Company and Great Lakes in which their respective employees are
participants have been administered in accordance with their terms and comply in
all material respects with Employee Retirement Income Security Act of 1974, as
amended, and the Code; and (f) prior to the Closing, SFI shall contribute the
amount necessary to cause the market value of the assets under any employee
pension benefit plan maintained by Company pursuant to a collective bargaining
agreement (other than a multiemployer plan within the meaning of Section 3(37)
of ERISA) to equal or exceed the present value of all vested accrued
19
liabilities thereunder determined in accordance with the assumptions used for
funding standard account purposes on the Form 5500 Schedule B for 1999.
8.13 Broker's or Finder's Fees. Buyer will not, directly or indirectly,
-------------------------
have any liability or expense as a result of undertakings or agreements of any
of the Imperial Companies for brokerage fees, finder's fees, attorneys fees,
agent's commissions or similar forms of compensation in connection with this
First Amended Agreement, the Ancillary Agreements, or any agreement or
transaction contemplated hereby or thereby.
8.14 Liabilities of the Company at Closing. At the Closing, the Company
-------------------------------------
shall have no liabilities or obligations, either accrued, absolute, contingent
or otherwise, which, with respect to the financial position of the Company as of
the Closing, are in the aggregate material, except any matter fitting into any
one or more of the following categories: (a) to the extent such liabilities and
obligations are reflected in the financial statements attached as part of
Schedule 8.14 and not paid or discharged prior to the Closing, (b) those
-------------
liabilities or obligations incurred in or as a result of the normal and ordinary
course of the Company's business since the effective date of said financial
statements, or (c) those contracts, agreements, liabilities and obligations
either disclosed anywhere on the schedules attached hereto or not required to be
disclosed on said schedules.
8.15 Liabilities of Great Lakes at the Closing Date. At the Closing Date,
----------------------------------------------
Great Lakes shall have no liabilities or obligations, either accrued, absolute,
contingent or otherwise, which, with respect to the financial position of the
Company as of the Closing Date, are in the aggregate material, except any matter
fitting into any one or more of the following categories: (a) to the extent such
liabilities and obligations are reflected in the financial statements attached
as part of Schedule 8.15 and not paid or discharged prior to the Closing, (b)
-------------
those liabilities or obligations incurred in or as a result of the normal and
ordinary course of Great Lake's business since the effective date of said
financial statements, or (c) those contracts, agreements, liabilities and
obligations either disclosed anywhere on the schedules attached hereto or not
required to be disclosed on said schedules.
ARTICLE 9
COVENANTS OF THE COMPANY
9.1 RESERVED.
9.2 Operations of the Company pending Closing. Except as permitted by the
------------------------------------------
terms of this First Amended Agreement or as set forth in Schedule 9.2, from
------------
August 10, 2001 to the Closing, SFI has ensured that the Company has caused its
business to be conducted, and the Great Lakes business to be conducted, in the
ordinary course consistent with past practice, and did not do any of the
following without the prior written consent of Buyer:
9.2.1 make any material change in the conduct of its business, except
as specifically contemplated by this First Amended Agreement;
20
9.2.2 sell, lease, license or otherwise dispose of, or agree to sell,
lease, license or otherwise dispose of, any interest in its assets, except for
sales of Products and inventory in the ordinary course of business, the sale of
salvage equipment not necessary to the operation of the Great Lakes Assets which
are currently listed for sale, and the transfer of the stock of Great Lakes to
SFI at or before Closing;
9.2.3 amend or terminate any of the contracts listed on Schedule
--------
8.4.1, other than in the ordinary course of business or as necessary for the
-----
maintenance of property relating to the Business;
9.2.4 fail to use commercially reasonable efforts to preserve intact
the reputation of its business and the goodwill of suppliers, customers and
others having business relations with it; or
9.2.5 fail to use commercially reasonable efforts to maintain good
relations with its employees or take any action with respect to the grant of any
bonuses, salary increases, severance or termination pay for any of its employees
or with respect to any increase of benefits payable in effect on the date hereof
to any of its employees.
9.3 RESERVED.
--------
9.4 Notices. With regard to the period between August 10, 2001 and the
-------
Closing, SFI has promptly notified Buyer of (a) any material adverse change in
the Business; (b) any governmental complaints, investigations or hearings as to
the Business of which SFI has been advised in writing, or the institution of any
litigation, involving the Business, (c) any notice or other written
communication received by SFI or the Company alleging the existence of any
default or event which with notice or lapse of time or both would become a
default under any of the contracts listed on Schedule 8.4.1; or (d) any
--------------
development or event causing a material breach of any of the representations or
warranties contained in Article 8 of this First Amended Agreement.
9.5 No-Shop. Except as required by the fiduciary duty of any of the
-------
officers or directors of Imperial or any of the Imperial Affiliates from and
after the date hereof until the Closing (unless this First Amended Agreement is
otherwise terminated as provided for herein), (i) SFI has not, and caused its
Affiliates and its and their employees and representatives not to, directly or
indirectly, solicit or initiate discussions or negotiations with any Person
other than the Buyer with respect to the acquisition of the Business, the stock
of the Company, or the stock of Great Lakes, whether by way of merger, purchase
of capital stock, purchase of assets or otherwise (a "Possible Acquisition") it
being understood that if a Person other than Buyer initiates such discussions or
negotiations, SFI could have responded to, and may in the future respond to and
enter into discussions or negotiations with such Person, and (ii) unless this
First Amended Agreement is terminated and SFI has complied with the terms of
Section 14.5 hereof, SFI will not enter into a transaction with any Person other
than the Buyer with respect to a Possible Acquisition.
21
9.6 Noncompetition and Nonsolicitation.
----------------------------------
9.6.1 During the two-year period commencing on the Closing Date, SFI
and its Affiliates (excluding Affiliates who are natural persons) shall not
directly or indirectly in the geographic area within one hundred (100) miles of
the state of Michigan (a) engage in the sugar beet processing business or (b)
disturb or attempt to disturb any exclusive business relationship between any
third party and Buyer or its Affiliates. SFI understands that Buyer would not
have agreed to purchase the stock of the Company and the stock of Great Lakes
without having received this noncompetition covenant from SFI, and SFI
acknowledges that it has entered into this noncompetition covenant as a material
inducement to Buyer to consummate the transactions contemplated hereby.
9.6.2 During the two-year period commencing on the Closing Date, SFI
and its Affiliates shall not (excluding Affiliates who are natural persons)
solicit or encourage any officer or employee employed by Buyer or its Affiliates
in connection with the Business to leave the employ of Buyer or its Affiliates,
nor solicit or offer for hire any individual who has been employed by SFI or the
Company in connection with the Business at any time during the two-month period
prior to the date hereof.
9.7 Confidentiality. SFI and its Affiliates acknowledge that all
---------------
"Evaluation Materials" (as defined in the Confidentiality Agreement defined
below) provided to any of it and its Affiliates, agents and representatives by
Buyer and its Affiliates, agents and representatives is subject to the terms of
a confidentiality agreement earlier executed between SFI and Buyer (or one of
their Affiliates or other beneficial owners) (the "Confidentiality Agreement"),
attached hereto as Exhibit G, the terms of which are hereby incorporated herein
---------
by reference. SFI acknowledges that any and all information provided or made
available to it and its Affiliates, agents and representatives by or on behalf
of Buyer concerning Buyer and its Affiliates shall remain subject to the terms
and conditions of the Confidentiality Agreement after the Closing Date in
accordance with the terms of the Confidentiality Agreement. Except to the
extent mutually agreed upon by both parties or as expressly required by
applicable law, SFI shall, and shall cause its Affiliates to, keep secret and
confidential, for a period of five (5) years from the date of this First Amended
Agreement, the terms of this First Amended Agreement and the Ancillary
Agreements and the transactions contemplated hereby and thereby and not disclose
the same, either directly or indirectly, to any other Person, or use the same in
any way.
9.8 RESERVED.
--------
9.9 RESERVED.
--------
9.10 RESERVED.
--------
9.11 Systems of the Company and Great Lakes.
--------------------------------------
9.11.1 Except as may conflict with or be prohibited by any applicable
licenses or agreements, SFI shall provide sufficient time after Closing to allow
the computer, telephone and other similar systems of the Company which are
integrated with such systems maintained in
22
Sugar Land, Texas, or Savannah, Georgia, by or for Imperial and/or one or more
of its various subsidiaries and affiliates to be separated into a stand-alone
system to be operated independently by Buyer under the umbrella of the Company
after Closing. Except as may conflict with or be prohibited by any applicable
licenses or agreements, the time provided by SFI shall not extend beyond ninety
(90) days after Closing, or the end of the 2001-2002 Campaign, whichever is
longer. Notwithstanding anything to the contrary contained in this First Amended
Agreement, (i) only the computer software listed on Schedule 9.11.1(i) is owned
------------------
by the Company, and, after Closing, neither Buyer nor the Company shall have any
right or license to own or use any other software which may now be utilized by
of for the benefit of the Company other than as permitted above in this Section
9.11.1, and (ii) all computer hardware used by the Company and located in the
Company's offices in Saginaw, Michigan shall remain the property of the Company
through and at the Closing, except for those items listed on Schedule
--------
9.11.1(ii).
----------
9.11.2 Except as may conflict with or be prohibited by any applicable
licenses or agreements, SFI shall provide sufficient time after the Closing Date
to allow the computer, telephone and other similar systems of Great Lakes which
are integrated with such systems maintained in Sugar Land, Texas, or Savannah,
Georgia, by or for Imperial and/or one or more of its various subsidiaries and
affiliates to be separated into a stand-alone system to be operated
independently by Buyer under the umbrella of the Company or Great Lakes after
the Closing Date. Except as may conflict with or be prohibited by any
applicable licenses or agreements, the time provided by SFI shall not extend
beyond ninety (90) days after the Closing Date. Notwithstanding anything to the
contrary contained in this First Amended Agreement, the software listed on
Schedule 9.11.2 is not owned by the Company or Great Lakes, and, after the
---------------
Closing Date, neither Buyer, the Company nor Great Lakes shall have any right or
license to use such software other than as permitted above in this Section
9.11.2. Notwithstanding anything to the contrary contained in this First
Amended Agreement, (i) only the computer software listed on Schedule 9.11.2(i)
------------------
is owned by Great Lakes, and, after the Closing Date, neither Buyer nor Great
Lakes shall have any right or license to own or use any other software which may
now be utilized by of for the benefit of Great Lakes other than as permitted
above in this Section 9.11.1, and (ii) all computer hardware used by Great Lakes
and located in Great Lake's offices in Fremont, Ohio shall remain the property
of Great Lakes or the Company through and at the Closing Date, except for those
items listed on Schedule 9.11.2(ii).
-------------------
ARTICLE 10
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to SFI as follows:
10.1 Authority; No Conflicts.
-----------------------
10.1.1 Buyer is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation. Buyer has all
requisite corporate power and authority to enter into this First Amended
Agreement and the Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby. All requisite corporate action
23
required to be taken by Buyer to authorize the execution, delivery and
performance of this First Amended Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby has been taken.
This First Amended Agreement has been duly executed and delivered by Buyer, and
the Ancillary Agreements have been duly and validly executed and delivered by
both parties. This First Amended Agreement and the Ancillary Agreements
constitute, or will constitute, as applicable, valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their terms, except to the
extent that enforceability of the terms and provisions of this First Amended
Agreement and Ancillary Agreements is subject to the effect of applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
10.1.2 The execution and delivery by Buyer of this First Amended
Agreement and the Ancillary Agreements do not, and the consummation by Buyer of
the transactions contemplated hereby and thereby and compliance by Buyer with
the terms hereof, and thereof will not, conflict with, or result in any
violation of or default under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
require any consent, authorization, approval or action by or notice to any third
party or court or governmental body under any provision of (a) the certificate
of incorporation or bylaws of Buyer, (b) any note, bond, mortgage, indenture,
deed of trust, license, lease, contract, commitment, agreement or arrangement to
which Buyer is a party, or (c) any material judgment, order or decree, or any
material statute, law, ordinance, rule or regulation applicable to Buyer or its
property or assets, other than any such conflicts, violations, defaults or
rights that, individually or in the aggregate, would not effect the ability of
Buyer to consummate the transactions contemplated hereby.
10.2 Actions and Proceedings, etc. There are no (i) outstanding judgments,
----------------------------
orders, writs, injunctions or decrees of any court, governmental agency or
arbitration tribunal against Buyer which have or would reasonably be expected to
have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby or (ii) actions, suits, claims or legal,
administrative or arbitration proceedings or investigations pending or, to the
knowledge of Buyer, threatened against Buyer, which directly relate to the
transactions contemplated hereby.
10.3 Availability of Funds. Buyer has at Closing sufficient cash or other
---------------------
sources of immediately available funds, or irrevocable commitments from
financial institutions (true and correct copies of which have been or will be
delivered at Closing, to SFI), to enable it to consummate the transactions
contemplated by this First Amended Agreement.
10.4 Broker's or Finder's Fees. Neither Imperial, nor any of the Imperial
-------------------------
Affiliates, will, directly or indirectly, have any liability or expense as a
result of undertakings or agreements of Buyer, for brokerage fees, attorneys'
fees, finder's fees, agent's commissions or similar forms of compensation in
connection with this First Amended Agreement, the Ancillary Agreements, or any
agreement or transaction contemplated hereby or thereby.
24
ARTICLE 11
COVENANTS OF BUYER
Buyer covenants as follows:
11.1 Confidentiality. Buyer acknowledges that all "Evaluation Materials"
---------------
(as defined in the Confidentiality Agreement, attached as Exhibit G) provided to
---------
any of it and its Affiliates, agents and representatives by SFI and its
Affiliates, agents and representatives is subject to the terms of the
Confidentiality Agreement earlier executed between SFI and Buyer (or one of
their Affiliates or other beneficial owners) the terms of which are hereby
incorporated herein by reference. Buyer acknowledges that any and all
information provided or made available to it and its Affiliates, agents and
representatives by or on behalf of SFI concerning SFI and its Affiliates shall
remain subject to the terms and conditions of the Confidentiality Agreement
after the Closing Date in accordance with the terms of the Confidentiality
Agreement. Except to the extent mutually agreed upon by both parties or as
expressly required by applicable law, Buyer shall, and shall cause its
Affiliates to, keep secret and confidential, for a period of five (5) years from
the date of this First Amended Agreement, the terms of this First Amended
Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby and not disclose the same, either directly or indirectly, to any
other Person, or use the same in any way.
11.2 No Additional Representations. Buyer acknowledges that neither any of
-----------------------------
the Imperial Companies nor any other Person or entity has made any
representation or warranty, express or implied, except as expressly set forth in
this First Amended Agreement, including but not limited to any implied
representation or warranty as to the maintenance, repair, condition, quality,
suitability, design, marketability, merchantability, fitness for a particular
purpose or conformity to models or samples of any asset and that, EXCEPT FOR THE
EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS FIRST AMENDED
AGREEMENT, BUYER TAKES THE STOCK OF THE COMPANY AND THE STOCK OF GREAT LAKES AND
ASSETS PURCHASED OR TO BE PURCHASED HEREUNDER ON AN "AS IS" AND "WHERE IS"
BASIS, WITH ALL FAULTS, AND THE IMPERIAL COMPANIES EXPRESSLY DISCLAIM ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE MAINTENANCE, REPAIR,
CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF ANY STOCK OR ASSETS
BEING SOLD HEREUNDER, AND FURTHER DISCLAIM ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, OR MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
CONFORMITY TO MODELS OR SAMPLES OF ANY OF THE ASSETS BEING SOLD HEREUNDER.
Buyer further agrees that neither any of the Imperial Affiliates nor any other
Person or entity will have or be subject to any Liability to Buyer or any other
Person resulting from the distribution to Buyer, or Buyer's use of, any
information, document, or material made available to Buyer in any "data rooms,"
management presentations or supplemental due diligence information provided to
Buyer, in connection with discussions or access to management of the businesses
of the Company or Great Lakes or in any other form in expectation of the
transactions contemplated by this First Amended Agreement, except to the extent
that any of the foregoing information is specifically included in, the subject
25
of or incorporated into, a representation or warranty contained in this First
Amended Agreement.
11.3 Nonsolicitation. During the two-year period commencing on the Closing
---------------
Date, Buyer and its Affiliates (excluding Affiliates who are natural persons)
shall not solicit or encourage any officer or employee employed by SFI or its
Affiliates in connection with the Business (other than the Employees who are
offered employment and who accept such employment in accordance with Section
12.10 hereof) to leave the employ of SFI, or its Affiliates.
11.4 License. With respect to any and all Intellectual Property
-------
constituting manufacturing know-how and processes of the Company or Great Lakes
that does not relate exclusively to any of the Products or the Business (the
"Manufacturing I/P"), Buyer agrees that, after the Closing Date and upon SFI's
request for, and identification of, such Manufacturing I/P, Buyer will grant, or
will cause the Company and/or Great Lakes to grant, to SFI or any Affiliate of
SFI, without any further consideration, a non-exclusive, fully-paid up,
perpetual license for such Manufacturing I/P identified by SFI in such request.
11.5 Industrial Development Bonds. Buyer agrees that, after the Closing,
----------------------------
it will timely pay and satisfy in full, or will cause the Company to timely pay
and satisfy in full, those industrial development bonds (collectively the "IDB")
relating to the Company having a face value of approximately Eighteen Million
Five Hundred Thousand Dollars ($18,500,000.00) in accordance with the payment
terms and other conditions set forth in the agreements governing the IDB
(collectively the "IDB Agreement"), or on such other terms and conditions as may
be made by Buyer in lieu of the terms and conditions set forth in the IDB
Agreement. Notwithstanding anything to the contrary in this First Amended
Agreement, this covenant shall survive the Closing until such time as all of
said bonds have been paid in full in accordance with the payment terms and other
conditions set forth in the plan or reorganization filed, or to be filed, in the
Cases, or on such other terms and conditions as may be made by Buyer. Buyer
further agrees that any default of the IDB Agreement (as existing or hereafter
duly amended) that is caused by the Buyer shall also be deemed to be a default
under the Credit Agreement, said default entitling Imperial to seek any and all
remedies available under the Credit Agreement and applicable law.
ARTICLE 12
MUTUAL COVENANTS
SFI and Buyer covenant and agree as follows:
12.1 Consents, etc.
-------------
12.1.1 Buyer acknowledges that, as a result of the transfer of the
stock of the Company and/or change in control of the Company, the transfer of
the stock of Great Lakes and/or a change in control of Great Lakes, and/or the
transfer of the Xxxxx Assets, certain consents may be required from parties to
the Imperial Contracts, the SFI Contracts, the Company
26
Contracts, the Great Lakes Contracts, and the Xxxxx Contracts and such consents
have not been obtained as of the date hereof. SFI agrees to use its commercially
reasonable best efforts to obtain the consents, approvals, exemptions or
authorizations to the Imperial Contracts disclosed on Schedule 8.1.1 and 8.1.2
------------------------
and required for the closing of the sale and transfer of the stock of the
Company and the stock of Great Lakes. Xxxxx agrees to use its commercially
reasonable best efforts to obtain prior to the Xxxxx Transfer Date the consents,
approvals, exemptions or authorizations to the Xxxxx Contracts disclosed on
Schedule 8.1.3 and required for the closing of the sale and transfer of the
--------------
Xxxxx Assets. Each of the consents, approvals, exemptions or authorizations to
the Imperial Contracts, the SFI Contracts, the Company Contracts, the Great
Lakes Contracts or the Xxxxx Contracts are referred to individually as a
"Required Consent" and collectively as the "Required Consents".
12.1.2 With respect to any of the Company Contracts or the Great
Lakes Contracts which have provisions prohibiting a change in control and with
respect to which a consent to such change in control may not be obtained from
parties to the contract (individually, a "Nontransferable Contract" and
collectively the "Nontransferable Contracts"), Buyer shall have the right to
require that SFI enter into such alternative arrangements and agreements with
Buyer as are reasonably practicable in order to permit Buyer to realize, receive
and enjoy substantially the full economic and legal rights and benefits,
including performing any such Nontransferable Contract, to the extent it relates
to the Business, as agent for an for the account of Buyer, for a period up to
twelve months following the Closing Date with respect to Nontransferable
Contracts of the Company and Great Lakes.; provided, that, Buyer shall defend,
indemnify, hold harmless, and reimburse SFI for any and all claims, costs,
expenses, losses and liabilities incurred in connection with such alternative
arrangements and agreements.
12.2 Cooperation. Buyer and SFI shall cooperate with each other and shall
-----------
cause their respective officers, employees, agents and representatives to
cooperate with each other for a period of six months after the Closing to
provide for an orderly transition of the businesses and assets conveyed
hereunder to Buyer and to minimize the disruption to the respective businesses
of the parties hereto resulting from the transactions contemplated hereby.
12.3 Publicity. Except as required by the Court or applicable law, SFI and
---------
Buyer agree that, through the close of the Closing Date, no public release or
announcement concerning the transactions contemplated hereby shall be issued or
made by any party without the prior consent of the other party (which consent
shall not be unreasonably withheld), except as such release or announcement may
be required by law or the rules or regulations of any United States securities
exchange, in which case the party required to make the release or announcement,
to the extent practicable, shall allow the other party reasonable time to
comment on such release or announcement in advance of such issuance. SFI and
Buyer also shall coordinate announcements to employees of SFI and/or the Company
upon signing of this First Amended Agreement. Notwithstanding the foregoing,
SFI and Buyer shall cooperate to prepare a joint press release to be issued on
the Closing Date and, upon the request of either SFI or Buyer. SFI and Buyer
agree to keep the terms of this First Amended Agreement confidential, except to
the extent required by applicable law or for financial reporting purposes and
except that the parties may disclose such terms to their respective accountants
and other representatives as necessary in connection with the ordinary conduct
of their respective businesses (so long as such Persons agree to keep the
27
terms of this First Amended Agreement confidential). It is understood that the
essential terms of this First Amended Agreement may be disclosed by Buyer to the
growers who are prospective members of Buyer.
12.4 Efforts to Close. Subject to the terms of this First Amended
----------------
Agreement, each party shall use commercially reasonable efforts to cause the
Closing to occur, including taking all commercially reasonable actions necessary
or desirable to cause the conditions to Closing set forth in Section 7.3 hereof
to be satisfied.
12.5 Compliance. Buyer and SFI shall each file or cause to be filed any
----------
notifications or applications required to be filed with respect to the
transactions contemplated hereby, and any other acts, statutes, legislation or
regulations as may be applicable with respect to the transactions contemplated
hereby. Buyer and SFI shall bear the costs and expenses of their respective
filings. Buyer and SFI shall each use commercially reasonable efforts to make
such filings promptly following the date hereof, to respond to any requests for
additional information made by any applicable agencies.
12.6 Sales and Transfer Taxes, etc. Buyer shall pay all Transfer Taxes
-----------------------------
that may be imposed upon Buyer or SFI as a result of the sale and transfer of
the stock of the Company, the stock of Great Lakes, and/or any of the assets to
be transferred hereunder (including without limitation any taxes, filing or
recording fees or expenses payable in connection with the sale and transfer, and
recordation of such transfer, of the Intellectual Property, and any stamp,
documentary, duty or other tax or fee chargeable in respect of any instrument
transferring property), together with any and all penalties, interest and
additions to tax with respect thereto, and SFI and Buyer shall cooperate in
timely making all filings, returns, reports and forms, as may be required to
comply with the provisions of such tax laws. Buyer and SFI shall also cooperate
in providing each other with appropriate resale exemption certifications and
other similar tax and fee documentation.
12.7 Books and Records. Buyer and SFI agree that SFI may maintain copies
-----------------
of any books and records and other financial data (collectively, the "Records")
of the Company and/or Great Lakes. Buyer agrees to give SFI and its
representatives reasonable cooperation, as needed, during normal business hours
and upon reasonable notice, with respect to the Records of the Company and/or
Great Lakes which the Buyer shall, directly or indirectly, obtain as a result of
the transactions contemplated hereby, and SFI agrees to give Buyer and its
representatives reasonable cooperation, as needed, during normal business hours
and upon reasonable notice, with respect to the books and records and other
financial data relating to the businesses and assets transferred hereunder and
retained by SFI, in each ease as may be necessary for general business purposes,
including the preparation of tax returns and financial statements and the
management and handling of tax audits; provided, that, such cooperation, access
-------- ----
and assistance does not unreasonably disrupt the normal operations of Buyer or
SFI. All such copies of Records and any information obtained by either party in
connection with the foregoing shall be treated as confidential information under
the terms of Sections 9.7 and 11.1 hereof.
12.8 Ancillary Agreements. Buyer and SFI recognize that binding Ancillary
--------------------
Agreements have been duly executed by all necessary parties, and that such
Ancillary
28
Agreements operate separately and independently from this First Amended
Agreement, and shall survive any termination or expiration of this First Amended
Agreement.
12.9 Use of Trademarks. SFI agrees that Buyer shall be permitted, for the
-----------------
term of the Marketing Agreement to use, without any further consideration,
exclusively on and in connection with the manufacture, packaging, distribution,
marketing and sale of the Products, the existing packaging materials and labels
included in the inventory that bear any of the trademarks listed or described on
Schedule 8.3 and any of SFI's Universal Product Codes or similar bar codes
------------
relating to the Products.
12.10 Buyer's Covenants as to Employees.
---------------------------------
12.10.1 Buyer shall cause the Company and Great Lakes, each when
acquired, to honor the Current Michigan Union Contract (as defined hereinabove)
and the Current Ohio Union Contract (as defined hereinabove), as such may be
amended. SFI shall cause the Company and/or Great Lakes to use their best
efforts to negotiate a one (1) year extension to the existing union contracts,
and Buyer shall use its best efforts to cooperate with SFI in connection with
said negotiations.
12.10.2 Buyer understands and acknowledges that a number of
employees integral to the operation of the Company and/or Great Lakes were,
prior to the Closing Date, employed by Imperial Distributing, Inc. ("IDI"), a
list of which employees was provided to the Buyer prior to Closing (the "IDI
Employees"). Said IDI Employees have been transferred to the payroll of the
Company, and Buyer agrees to extend, or to cause the Buyer to extend, on the
Closing Date offers of employment to each of the IDI Employees for positions
substantially similar to such employees' positions immediately prior to Closing
and at salary or wages, as the case may be, at least as great as the salary or
wages such employee had immediately prior to Closing, which employment would
begin on the Closing Date. A list of employees who have performed work for the
Company in the past but who shall remain IDI Employees after the Closing is
provided at Schedule 12.10.2.
----------------
12.10.3 Buyer shall also provide, or shall cause the Company to
provide, to the IDI Employees specific employee benefit plans and arrangements
as provided in this Section. For those IDI employees who accept employment with
Buyer or the Company and those employees employed by the Company at Closing,
Buyer shall offer, or shall cause the Company to offer, immediately following
the Closing, to such employees employee benefits that, in the aggregate, are
substantially comparable to those employee benefits (including but not limited
to group health insurance and other insurance plans) which such employees were
provided with when employed by Imperial, SFI, IDI or the Company immediately
prior to the Closing.
12.10.4 With respect to those IDI Employees who accept employment
with Buyer or the Company at or after Closing, Buyer shall be, or shall cause
the Company to be, solely responsible for all severance and benefit claims
related to the such employees while employed by Buyer or the Company, and SFI
shall be, or shall cause IDI to be, solely responsible for all severance and
benefit claims related to the such employees while employed by IDI. With respect
to those IDI Employees who do not accept employment with Buyer or the
29
Company at or after Closing, SFI shall be, or shall cause IDI to be, solely
responsible for all severance and benefit claims related to the such employees
for time periods while employed by IDI. Buyer shall immediately reimburse SFI
for any expenses incurred by SFI and/or IDI which are the responsibility of
Buyer or the Company pursuant to this Section 12.10, and SFI shall immediately
reimburse Buyer for any expenses incurred by Buyer or the Company which are the
responsibility of SFI or IDI pursuant to this Section 12.10.
12.10.5 With respect to those IDI Employees who accept employment
with Buyer or the Company and are on disability leave, authorized leave of
absence, military service, or lay-off at the time of Closing shall continue to
be employed by Buyer or the Company at least to the same extent, if any, as IDI
would be required to offer or continue employment in accordance with applicable
Law.
12.10.6 Buyer shall cooperate with SFI and/or IDI in making any
notices required by the Workers Adjustment Retraining Notification Act or other
Federal or state laws, if applicable.
12.10.7 For all IDI Employees and all employees of the Company,
Buyer shall grant service credit under Buyer's or the Company's employee benefit
plans for eligibility and for vesting purposes equal to years of service with
SFI, IDI or the Company, as the case may be.
12.10.8 IDI Employees, the Company's employees, and their dependents
shall be entitled to participate in Buyer's or the Company's employee benefit
plans as of and after the Closing Date and Buyer will contact Buyer's benefit
providers and use its reasonable efforts to attempt to obtain waivers as to any
preexisting conditions and restrictions under Buyer's employee welfare benefit
plans to the extent these conditions and restrictions have been waived under
Imperial's applicable plans and will use its reasonable efforts to attempt to
induce said benefit providers to honor any deductible and out-of-pocket expenses
incurred by Employees and their dependents under Imperial's plans during the
portion of the calendar year preceding the Closing Date.
12.10.9 SFI shall retain and be responsible for, and shall indemnify
and hold harmless Buyer and the Company against all liabilities in connection
with claims incurred prior to the Closing Date by employees of the Company and
other current and former employees of the Company associated with the Company
prior to Closing Date and their eligible dependents under any of the employee
welfare benefit plans (as described in Section 3(1) of ERISA) which covered said
employees and dependents, including claims incurred prior to the Closing Date
filed following the Closing Date. Buyer and the Company shall be responsible
for all liabilities in connection with claims incurred on and after the Closing
Date by employees or their dependents under any of Buyer's or the Company's
employee welfare benefit plans (as defined in Section 3(1) of ERISA) covering
such employees or dependents. For purposes of this Section, a claim shall be
incurred on the date treatment or service is first rendered.
12.10.10 At and after Closing, Buyer will, or will cause the Company
to, assume and pay, or make available, to each IDI Employee and each employee of
the Company,
30
all vacation earned and accrued but not paid prior to the Closing Date. At and
after Closing, IDI Employees and the employees of the Company shall commence
accruing vacation pursuant to Buyer's or the Company's vacation policies
existing at the Closing Date. At and after Closing, Buyer will, or will cause
the Company to, honor all personal and sick days accrued by IDI Employees and
employees of the Company prior to the Closing Date to the same extent required
to be honored under such employee's plans, programs, policies and arrangements
as of the Closing Date.
12.10.11 Effective as of the Closing Date, the accrual of benefits
by the IDI Employees or the Company's employees under Imperial's or its
Affiliates pension plans ("Imperial's Pension Plans") by the IDI Employees and
the Company's employees shall cease. SFI shall thereafter cause to be paid to
the IDI Employees and the Company Employees the benefits vested and accrued
under Imperial's Pension Plans when the same shall be payable pursuant to the
terms thereof.
12.10.12 SFI shall retain and be responsible for, and shall
indemnify and hold harmless Buyer and the Company against all liabilities in
connection with claims arising out of or in connection with a breach of
fiduciary duty or violation of the applicable requirements of ERISA, the Code
and other applicable laws occurring prior to the Closing Date with respect to
each employee benefit plan covering employees of the Company and occurring prior
to the Closing Date with respect to each employee benefit plan covering
employees of Great Lakes. Likewise, Buyer and the Company shall be responsible
for, and shall indemnify and hold Imperial, SFI and their respective Affiliates
harmless, from and against all liabilities in connection with claims arising out
of or in connection with a breach of fiduciary duty or violation of the
applicable requirements of ERISA, the Code, or any other applicable laws
occurring after the Closing Date with respect to each of Buyer's or the
Company's employee benefit plans and after the Closing Date with respect to each
of Great Lake's employee benefit plans.
12.10.13 Within 90 days of the Closing Date, Buyer shall extend to
the IDI Employees hired by the Buyer or the Company at Closing, and to the
Company's employees, coverage under Buyer's defined contribution plan qualified
under Section 401(k) of the Code ("Buyer's Savings Plan"). Within 180 days
after the receipt (i) by SFI of a copy of Buyer's Savings Plan and either the
most recent IRS determination letter received by Buyer in respect of Buyer's
Savings Plan or an opinion of Buyer's counsel stating that the form of Buyer's
Savings Plan meets in all material respects the qualification requirements under
Section 401(a) of the Code and (ii) by Buyer of a copy of SFI's savings plan and
either the most recent IRS determination letter received by SFI in respect of
SFI's savings plan or an opinion of SFI's counsel stating that the form of SFI's
savings plan meets in all material respects the qualification requirements under
Section 401(a) of the Code, whichever is later, SFI shall cause the Trustees of
SFI's savings plan to transfer to the Trustees of Buyer's Savings Plan an amount
in cash equal to the aggregate account balances of said employees.
12.10.14 Buyer and SFI agree to cooperate with one another and to
exchange such records and other information as may be necessary from time to
time to effectuate the agreements set forth in this Section 12.10.
31
12.10.15 Not later than 21 days prior to Closing, Buyer shall
deliver to SFI the terms and conditions of employment, including but not limited
to the terms of all employee benefits, which will apply to the IDI Employees and
the Company's employees following Closing. Not later than 21 days prior to
Closing, Buyer shall deliver to SFI the terms and conditions of employment,
including but not limited to the terms of all employee benefits, which will
apply to the Great Lake's employees following the Closing.
12.10.16 Buyer acknowledges that all of the Company's and Great
Lakes' employee benefit plans are maintained by Imperial for Imperial and some
or all of its various affiliates, rather than solely by the Company and/or Great
Lakes, with the exception of the Company's group health insurance plans which
are maintained by the Company for the Company and Great Lakes. Accordingly,
Buyer acknowledges that, at the Closing, the Company's participation in all
employee benefit plans not maintained solely by the Company shall terminate, and
Buyer shall be solely responsible for providing any successor or alternate
plans.
12.10.17 Prior to the Closing, SFI shall contribute the amount
necessary, if any, to each employee pension benefit plan maintained by Company
pursuant to a collective bargaining agreement (other than a multiemployer plan
within the meaning of Section 3(37) of ERISA) such that after such contribution
the market value of the assets under such plan equals or exceeds the present
value of all vested liabilities thereunder determined in accordance with the
assumptions used for funding standard account purposes on the Form 5500 Schedule
B for 1999. The market value of assets used for this calculation shall not be
less than the market value as of December 31, 2001 adjusted for contributions
and disbursements through the Closing. SFI shall indemnify and hold harmless the
Buyer and the Company against any funding shortfall existing in such plan as of
the Closing.
12.10.18 Buyer covenants and agrees that, as of the Closing, Buyer
assumes all obligations relating to post-retirement welfare plans covering
employees or former employees of the Company or its subsidiaries, which
obligation is summarized in the attached Schedule 12.10.18.
-----------------
12.11 Further Assurances. From time to time, as when requested by any
------------------
party hereto, the other party hereto shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions, as such other party may
reasonably deem necessary or desirable to consummate the transactions
contemplated by this First Amended Agreement.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification.
----------------
13.1.1 Indemnification by SFI: SFI shall indemnify Buyer, its
----------------------
Affiliates and each
32
of their respective officers, directors, employees and agents and hold them
harmless from any loss, Liability, damage or expense (including reasonable legal
fees and expenses) including, but not limited to, environmental liabilities not
disclosed by Seller to Buyer ("Losses") suffered or incurred by any such
indemnified party to the extent arising from (i) any breach of any
representation or warranty of SFI contained in this First Amended Agreement or
(ii) any breach of any covenant of SFI contained in this First Amended
Agreement; provided, however, that, SFI shall not have any liability under
clauses (i) and (ii) above unless the aggregate of all Losses relating thereto
for which SFI would, but for this proviso, be jointly and severally liable
exceeds on a cumulative basis an amount equal to $250,000.00 in the aggregate
(the "SFI Basket Amount"), in which case SFI shall be obligated, to indemnify
any such indemnified party for the entire amount of all such Losses without
deduction; provided further, however, that the aggregate liability of SFI under
clauses (i) and (ii) of above shall in no event exceed $20,000,000 (the "SFI Cap
Amount"). In the event SFI fails to perform its obligations under this Section
13.1.1 and, upon written notice to Imperial by Buyer within 15 days of such
failure to perform by SFI, Imperial shall indemnify Buyer under the terms of
this 13.1.1, provided that the aggregate liability of Imperial under Section
13.1.1 shall not exceed $10,000,000.
13.1.2 Indemnification by Xxxxx: Xxxxx shall indemnify Buyer, its
------------------------
Affiliates and each of their respective officers, directors, employees and
agents and hold them harmless from all Losses suffered or incurred by any such
indemnified party to the extent arising from (i) any breach of any
representation or warranty of Xxxxx contained in this First Amended Agreement or
(ii) any breach of any covenant of Xxxxx contained in this First Amended
Agreement; provided, however, that, Xxxxx shall not have any liability under
clauses (i) and (ii) above unless the aggregate of all Losses relating thereto
for which Xxxxx would, but for this proviso, be jointly and severally liable
exceeds on a cumulative basis an amount equal to $10,000.00 in the aggregate
(the "Xxxxx Basket Amount"), in which case Xxxxx shall be obligated, to
indemnify any such indemnified party for the entire amount of all such Losses
without deduction; provided further, however, that the aggregate liability of
Xxxxx under clauses (i) and (ii) of above shall in no event exceed $250,000 (the
"Xxxxx Cap Amount").
13.1.3 Indemnification by Imperial: Imperial shall indemnify Buyer,
---------------------------
its Affiliates and each of their respective officers, directors, employees and
agents and hold them harmless from any loss, Liability, damage or expense
(including reasonable legal fees and expenses) ("Losses") suffered or incurred
by any such indemnified party to the extent arising from (i) any breach of any
representation or warranty of Imperial contained in this First Amended Agreement
or (ii) any breach of any covenant of Imperial contained in this First Amended
Agreement; provided, however, that, Imperial shall not have any liability under
clauses (i) and (ii) above unless the aggregate of all Losses relating thereto
for which Imperial would, but for this proviso, be jointly and severally liable
exceeds on a cumulative basis an amount equal to $100,000.00 in the aggregate
(the "Imperial Basket Amount"), in which case Imperial shall be obligated, to
indemnify any such indemnified party for the entire amount of all such Losses
without deduction; provided further, however, that the aggregate liability of
Imperial under clauses (i) and (ii) of above shall in no event exceed
$1,000,000.00 (the "Imperial Cap Amount").
13.2 Exclusive Remedy. Except as otherwise expressly provided in the
----------------
Ancillary
33
Agreements, each party acknowledges and agrees that, from and after the Closing,
its sole and exclusive remedy with respect to any and all claims relating to the
subject matter of this First Amended Agreement shall be pursuant to the
indemnification provisions set forth in this Article 13. In furtherance of the
foregoing, each party hereby waives, from and after the Closing, to the fullest
extent permitted under applicable law, any and all rights, claims and causes of
action (other than tort claims of, or causes of action arising from, fraudulent
misrepresentation or fraudulent breach) it may have against the other party or
its Affiliates relating to the subject matter of this First Amended Agreement
arising under or based upon any federal, state, local or foreign statute, law,
ordinance, rule or regulation or otherwise.
13.3 Indemnification by Buyer. Buyer shall indemnify Imperial, SFI, Xxxxx
------------------------
and their respective Affiliates, officers, directors, employees, attorneys, and
agents against and hold them harmless from any Losses suffered or incurred by
any such indemnified party to the extent arising from (i) any breach of any
representation or warranty of Buyer contained in this First Amended Agreement,
or (ii) any breach of any covenant of Buyer contained in this First Amended
Agreement, specifically including but not limited to the timely payment and
satisfaction in full of the IDB's as set forth in Section 11.5; provided,
--------
however, that, Buyer shall not have any liability under clauses (i) and (ii)
-------
above unless the aggregate of all Losses relating thereto for which Buyer would,
but for this proviso, be liable exceeds on a cumulative basis the SFI Basket
Amount, in which case Buyer shall be obligated to indemnify any such indemnified
party for the entire amount of all such Losses without deduction; provided
--------
further, however, that the aggregate liability of Buyer under clauses (i) and
------- -------
(ii) of above shall in no event exceed the SFI Cap Amount.
-----
13.4 Calculation of Losses. The amount of any and all Losses under this
---------------------
Article 13 shall be determined net of any amounts recovered by the indemnified
party under any third-party insurance policies (but not self-insurance policies)
that may be in effect with respect to such Losses. Any indemnity payment under
this First Amended Agreement shall be treated as an adjustment to the Purchase
Price for tax purposes. Notwithstanding anything contained in this First
Amended Agreement to the contrary, no party hereto shall be entitled to make a
claim against any other party to this First Amended Agreement for, or recover
from any other party to this First Amended Agreement, lost profits or any
consequential, indirect or punitive damages.
13.5 Termination of Indemnification. The obligations to indemnify and hold
------------------------------
harmless a party hereto pursuant to Sections 13.1 or 13.3 shall terminate with
respect to a breach of a representation or warranty when any such representation
or warranty terminates pursuant to Section 14.4 and shall terminate with respect
to a breach of a covenant 12 months after the period of performance of any such
covenant has expired; provided, however, that such obligations to indemnify and
hold harmless shall not terminate with respect to any representation, warranty
or covenant as to which the Person to be indemnified or the related party
thereto shall have, prior to the expiration of the termination of the applicable
period, previously made a claim by delivering a written notice (stating in
reasonable detail the nature of, and factual basis for, any such claim for
indemnification, and the provisions of this First Amended Agreement upon which
such claim for indemnification is made) to the indemnifying party.
34
13.6 Procedures Relating to Indemnification.
--------------------------------------
13.6.1 In order for a party to be entitled to any indemnification
provided for under this Article 13 in respect of, arising out of or involving a
claim or demand made by any Person against the indemnified party (a "Third Party
Claim"), such indemnified party must notify the indemnifying party in writing,
and in reasonable detail, of the Third Party Claim as promptly as reasonably
possible after receipt by such indemnified party of notice of the Third Party
Claim but in no event later than twenty (20) days; provided, however, that
-------- -------
failure to give such notification on a timely basis shall not affect the
indemnification provided hereunder except to the extent the indemnifying party
shall have been actually prejudiced as a result of such failure. Thereafter,
the indemnified party shall deliver to the indemnifying party, as soon as
practicable after the indemnified party's receipt thereof copies of all notices
and documents (including court papers) received by the indemnified party
relating to the Third Party Claim.
13.6.2 If a Third Party Claim is made against an indemnified
party, the indemnifying party shall be entitled to participate in the defense
thereof and, if it so chooses and acknowledges its indemnification
responsibility hereunder, to assume the defense thereof with counsel selected by
the indemnifying party and reasonably satisfactory to the indemnified party.
Notwithstanding any acknowledgment made pursuant to the immediately preceding
sentence, the indemnifying party shall continue to be entitled to assert any
limitation on its indemnification responsibility contained in the provisos to
Section 13.1 or Section 13.3, as applicable. Should the indemnifying party so
elect to assume the defense of a Third Party Claim, the indemnifying party shall
not be liable to the indemnified party for legal expenses subsequently incurred
by the indemnified party in connection with the defense thereof, unless at the
request of the indemnifying party. If the indemnifying party assumes such
defense, the indemnified party shall have the right to participate in the
defense thereof and to employ counsel, at its own expense (which expense shall
not constitute a Loss unless the indemnified party reasonably determines that
the indemnifying party is not adequately representing or, because of a conflict
of interest, may not adequately represent, any interests of the indemnified
party, and only to the extent that such expenses are reasonable), separate from
the counsel employed by the indemnifying party, it being understood, however,
that the indemnifying party shall control such defense. The indemnifying party
shall be liable for the fees and expenses of counsel employed by the indemnified
party for any period during which the indemnifying party has not assumed the
defense thereof. If the indemnifying party chooses to defend any Third Party
Claim, all the parties hereto shall cooperate in the defense or prosecution of
such Third Party Claim. Such cooperation shall include the retention and (upon
the indemnifying party's request) the provision to the indemnifying party of
records and information which are reasonably relevant to such Third Party Claim,
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. In
connection with any Third Party Claim which the indemnifying party has elected
to defend, the indemnifying party shall not, in defense of such Third Party
Claim, except with the prior written consent of the indemnified party, consent
to the entry of any judgment or enter into any settlement which provides for any
relief other than the payment of monetary damages to be paid solely by the
indemnifying party and which does not include as an unconditional term thereof
the giving to the indemnified party by the claimant or plaintiff of such Third
Party Claim of a release from all liability in respect thereof. Whether or not
the indemnifying party shall have assumed the
35
defense of a Third Party Claim, the indemnified party shall not admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the indemnifying party's prior written consent (which consent
shall not be unreasonably withheld).
ARTICLE 14
MISCELLANEOUS
14.1 Assignment. Except as set forth below, this First Amended Agreement
----------
and any rights and obligations hereunder shall not be assignable or transferable
by any party hereto without the prior written consent of all other parties
hereto, which may be withheld for any or no reason, and any purported assignment
without such consent shall be void and without effect; provided that, with
respect to any assignment by Buyer which is approved with the prior written
consent of SFI, Buyer shall not be relieved of any of Buyer's obligations or
liabilities hereunder, and Buyer shall remain primarily liable hereunder for all
obligations and liabilities of Buyer, whether due or arising before or after any
such assignment.
14.2 No Third-Party Beneficiaries. This First Amended Agreement is for the
----------------------------
sole benefit of the parties hereto and their permitted assigns and nothing
herein express or implied shall give or be construed to give to any Person,
including any employee of a party hereto, other than the parties hereto and such
permitted assigns, any legal or equitable rights hereunder.
14.3 Termination.
-----------
14.3.1 Anything contained herein to the contrary notwithstanding this
First Amended Agreement may be terminated and the transactions contemplated
hereby abandoned at anytime prior to the Closing:
14.3.1.1 by mutual written consent of SFI and Buyer;
14.3.1.2 by SFI if any of the conditions set forth in Section 7.3.2
shall have become incapable of fulfillment and shall not have been waived by
SFI; provided, however, that the party seeking termination pursuant to this
subparagraph is not in breach of any of its representations, warranties,
covenants or agreements contained in this First Amended Agreement;
14.3.1.3 by Buyer if any of the conditions set forth in Section
7.3.1.1, Section 7.3.1.2, Section 7.3.1.3, Section 7.3.1.4, or Section 7.3.1.5
shall have become incapable of fulfillment, and shall not have been waived by
Buyer provided, however, that the party seeking termination pursuant to this
subparagraph is not in breach of any of its representations, warranties,
covenants or agreements contained in this First Amended Agreement;
14.3.1.4 by SFI or Buyer if the Closing does not occur on or prior to
February 28, 2002; provided, however, that the party seeking termination
-----------------
pursuant to this Section 14.3.1.4 is not in breach of any of its
representations, warranties, covenants or
36
agreements contained in this First Amended Agreement;
14.3.1.5 by Buyer if SFI breaches its covenants contained in Section
9.1 and fails to cure such breach within ten days after receiving written notice
therefrom from Buyer;
14.3.2 In the event of termination by SFI or Buyer pursuant to Section
14.3.1, written notice thereof shall forthwith be given to the other party and
the transactions contemplated by this First Amended Agreement shall be
terminated, without further action by any party. If the transactions
contemplated by this First Amended Agreement are terminated as provided herein:
14.3.2.1 Buyer shall return all documents and copies and other
materials received from or on behalf of SFI relating to the transactions
contemplated hereby, whether obtained before or after the execution hereof, to
SFI;
14.3.2.2 All confidential information received by Buyer with respect
to the Assets, the Assumed Liabilities and the Business shall be treated in
accordance with the Confidentiality Agreement, which shall remain in full force
and effect notwithstanding the termination of this First Amended Agreement;
14.3.2.3 If this First Amended Agreement is terminated and the
transactions contemplated hereby are abandoned as described in this Section
14.3, this First Amended Agreement shall become void and of no further force and
effect, except for the provisions of (i) Sections 9.7 and 11.1 relating to
confidentiality, (ii) Section 12.3 relating to publicity, (iii) Section 14.5
relating to certain expenses, (iv) Section 14.18 relating to dispute resolution,
(v) this Section 14.3, (vi) the Facility Lease Agreement, (vii) the Marketing
Agreement, (viii) the Factories Management Agreement; and (ix) and the Security
Agreement. Nothing in this Section 14.3 shall be deemed to release any party
from any liability for any breach by such party of the terms and provisions of
this First Amended Agreement prior to the date of termination or, solely with
respect to Sections 9.5, 9.6, 9.7 and 11.1, to impair the right of any party to
compel specific performance by another party of its obligations under such
Sections.
14.4 Survival of Representations. The representations and warranties in
---------------------------
this First Amended Agreement shall survive the Closing and shall terminate at
the close of business on the 15-month anniversary of the Closing Date; provided,
however, that the representations and warranties provided in (i) Article 8 which
specifically and expressly concern Xxxxx shall survive the Closing and shall
terminate at the close of business on the 15-month anniversary of the Xxxxx
Transfer Date, (ii) Section 8.2 with respect to title to assets and Section 8.3
with respect to Intellectual Property survive the Closing for a period of three
(3) years and (ii) Section 8.8 with respect to taxes shall survive Closing for
the period of the applicable statute of limitations for actions by a taxing
authority against a taxpayer.
14.5 Expense Reimbursement and Topping Fee. In the event that (i) Buyer
-------------------------------------
terminates this First Amended Agreement under Section 14.3.1.3 or Section
14.3.1.4 and SFI enters into a definitive agreement to sell or otherwise
transfer the stock of the Company to a Person other than Buyer within 12 months
of such termination, except in situations where Buyer has not been able to
obtain financing adequate to cover the purchase contemplated in this First
Amended
37
Agreement on or before February 28, 2002; or (ii) Buyer or SFI terminates this
First Amended Agreement under Section 14.3.1.6; then SFI shall pay to Buyer an
amount equal to (x) the amount of Buyer's reasonable, actual out-of-pocket costs
and expenses actually incurred in connection with this First Amended Agreement
and the transactions contemplated hereby (including, without limitation,
reasonable expenses of counsel, expenses of financial advisors, expenses of
consultants not to exceed $500,000 (the amount of (x), the "Expense
Reimbursement Amount") plus (y) a fee in the amount of $3,000,000 (the amount
(y), the "Topping Fee"). In the event that this First Amended Agreement is
terminated under any of the circumstances described in clauses (i) or (ii) of
the preceding sentence, SFI shall pay the Expense Reimbursement Amount after
this First Amended Agreement is terminated and within fifteen (15) days after
written request therefore from Buyer which includes an itemized statement
setting forth with reasonable specificity the costs, expenses and fees
comprising the Expense Reimbursement Amount, and SFI shall pay the Topping Fee
at and only upon a closing of a sale or transfer of the stock of the Company for
aggregate consideration to SFI that is greater than the Closing Date Purchase
Price.
14.6 Expenses. Whether or not the transactions contemplated hereby are
--------
consummated, and except as otherwise specifically provided in Section 12.6 or
elsewhere in this First Amended Agreement, all costs and expenses incurred in
connection with this First Amended Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs or expenses.
14.7 Amendment and Waiver. This First Amended Agreement may be amended, or
--------------------
any provision of this First Amended Agreement may be waived; provided that any
such amendment or waiver shall be binding only if set forth in a writing
instrument executed by all parties hereto referring specifically to the
provision alleged to have been amended or waived. No course of dealing between
or among any Persons having any interest in this First Amended Agreement shall
be deemed effective to modify, amend or discharge any part of this First Amended
Agreement or any rights or obligations of any Person under or by reason of this
First Amended Agreement.
14.8 Notices. All notices or other communications required or permitted to
-------
be given hereunder shall be in writing and shall be delivered by hand or sent by
telecopy (with confirming copy sent by registered, certified or express mail or
reputable overnight courier service), or sent, postage prepaid, by registered,
certified or express mail, or reputable overnight courier service and shall be
deemed given when so delivered by hand, telexed, cabled or telecopied, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
if to Buyer,
Michigan Sugar Beet Growers, Inc.
000 Xxxxx Xxxxx
0000 Xxxxxxx Xxxxxx Xxxx.
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
38
Fax: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxx
Jones, Waldo, Xxxxxxxx & XxXxxxxxx
000 Xxxxx Xxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
if to SFI,
Imperial Sugar Company
0000 Xxxxxxx 00X, X.X. Xxx 0
Xxxxx Xxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx,
Executive Vice President and General Counsel
Fax: 000-000-0000
with a copy to:
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxxx
Ellis, Painter, Xxxxxxxxx & Xxxx LLP
0 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
14.9 Interpretation. The headings and captions contained in this First
--------------
Amended Agreement, in any Exhibit or Schedule hereto and in the table of
contents to this First Amended Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this First Amended
Agreement. Any capitalized terms used in any Schedule or Exhibit and not
otherwise defined therein shall have the meanings set forth in this First
Amended Agreement. The use of the word "including" herein shall mean "including
without limitation."
14.10 No Strict Construction. Notwithstanding the fact that this First
----------------------
Amended Agreement has been drafted or prepared by one of the parties, both Buyer
and SFI confirm that both they and their respective counsel have reviewed,
negotiated and adopted this First Amended Agreement as the joint agreement and
understanding of the parties, and the language used in this First Amended
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any Person.
14.11 Counterparts. This First Amended Agreement may be executed in any
------------
number of identical multiple counterparts and may be delivered by facsimile
transmission (including by means of telecopied signature pages), all of which
shall be considered one and the same agreement, and shall become effective when
signed by each of the parties and delivered to the
39
other party.
14.12 Entire Agreement. This First Amended Agreement and the other
----------------
agreements referred to herein (including, but not limited to, the Ancillary
Agreements and the Confidentiality Agreement) contain the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings, whether written or
oral, relating to such subject matter.
14.13 Schedules. The disclosures in the Schedules hereto are to be taken
---------
as relating to the representations and warranties of each and all of the
Imperial Parties. The inclusion of information in the Schedules hereto shall
not be construed as an admission that such information is material to the
transactions contemplated hereby. In addition, matters reflected in the
Schedules are not necessarily limited to matters required by this First Amended
Agreement to be reflected in such Schedules. Such additional matters are set
forth for informational purposes only and do not necessarily include other
matters of a similar nature.
14.14 Representation by counsel; Interpretation. The parties hereto each
-----------------------------------------
acknowledges that it has been represented by counsel in connection with this
First Amended Agreement and the transactions contemplated hereby. Accordingly,
any rule of law or any legal decision that would require interpretation of any
claimed ambiguities in this First Amended Agreement against the party that
drafted it has no application and is expressly waived.
14.15 Severability. Whenever possible, each provision of this First
------------
Amended Agreement shall be interpreted in such manner as to be valid and
effective under applicable law, but if any provision of this First Amended
Agreement or the application of any such provision to any Person or circumstance
shall be held invalid, illegal or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision hereof.
14.16 Governing Law. This First Amended Agreement shall be governed by
-------------
and construed in accordance with the internal laws of the State of Delaware
(without giving effect to its conflict of law principles).
14.17 Exhibits and Schedules. All Exhibits and Schedules annexed hereto
----------------------
or referred to herein are hereby incorporated in and made a part of this First
Amended Agreement as if set forth in full herein.
14.18 Dispute Resolution.
------------------
14.18.1 Negotiation. In the event of any dispute or disagreement
-----------
between the parties hereto as to the interpretation of any provision of this
First Amended Agreement (or the performance of obligations hereunder), the
matter, upon written request of any party, shall be referred to legal
representatives of the parties for decision, each party being represented by a
lawyer of its choice (the "Representatives"). The Representatives shall
promptly meet in an agreed upon fashion in good faith effort to resolve the
dispute. If the Representatives do not agree upon a decision within 30 calendar
days after reference of the matter to them, each party
40
shall be free to exercise the remedies available to it under Section 14.18.2.
14.18.2 Arbitration. Any controversy, dispute or claim arising out
-----------
of or relating in any way to this First Amended Agreement or the other
agreements contemplated hereby or the transactions arising hereunder or
thereunder (the "Dispute") that cannot be resolved by negotiation pursuant to
Section 14.18.1 shall, except as otherwise provided in Section 7.2 with respect
to matters to be settled pursuant to the procedure set forth in said Section
7.2, be settled exclusively by arbitration in the City of Chicago, Illinois,
except in the event the parties elect for the dispute to be governed by the
Court, as provided for in Section 14.18.3. Such arbitration will apply the laws
of the State of Delaware and the Commercial Arbitration Rules of the American
Arbitration Association to resolve the dispute. Such arbitration shall be
conducted by three independent and impartial arbitrators, one of whom shall be
appointed by SFI and one of whom shall be appointed by Buyer. The arbitrators
shall render an opinion setting forth findings of fact and conclusions of law
with the reasons therefor stated. A transcript of the evidence adduced, at the
hearing shall be made and shall, upon request, be made available to either
party. The fees and expenses of the arbitrators shall be shared equally by the
parties and advanced by them from time to time as required; provided that at the
conclusion of the arbitration, the arbitrators may award costs and expenses
(including the costs of the arbitration previously advanced and the fees and
expenses of attorneys, accounts and other experts). No pre-arbitration
discovery shall be permitted, except that the arbitrators shall have the power
in their sole discretion, on application by either party, to order pre-
arbitration examination of the witnesses and documents that the other party
intends to introduce in its case-in-chief at the arbitration hearing. The
arbitrators shall render their award within 90 days of the conclusion of the
arbitration hearing. The arbitrators shall not be empowered to award to either
party any punitive damages in connection with any dispute between them arising
out of or relating in any way to their Agreement or the other agreements
contemplated hereby or the transactions arising hereunder or thereunder, and
each party hereby irrevocably waives any right to recover such damages. To the
extent possible, the arbitration hearings and award shall be maintained in
confidence. Notwithstanding anything to the contrary provided in this Section
14.18.2 and without prejudice to the above procedures, either party may apply to
any court of competent jurisdiction for temporary injunctive or other
provisional judicial relief or to specifically enforce the terms of this First
Amended Agreement if such action is necessary to avoid irreparable damage or to
preserve the status quo until such time as the arbitration panel is convened and
available to hear such party's request for temporary relief. The award rendered
by the arbitrators shall be final and not subject to judicial review and
judgment thereon may be entered in any court of competent jurisdiction.
[The remainder of this page is intentionally left blank - the next pages are
signature pages]
41
IN WITNESS WHEREOF, the parties have caused this First Amended Agreement to
be duly executed as of the date first written above.
IMPERIAL SUGAR COMPANY
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
-------------------
Title: V.P. and Treasurer
------------------
SAVANNAH FOODS & INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
-------------------
Title: Treasurer
------------------
MICHIGAN SUGAR COMPANY
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
-------------------
Title: Treasurer
------------------
XXXXX HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
-------------------
Title: Treasurer
------------------
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signature page]
42
MICHIGAN SUGAR BEET GROWERS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
43
