Exhibit 99.30
[EXECUTION COPY]
ASSET PURCHASE AGREEMENT
BY AND AMONG
AMERISERVE FOOD DISTRIBUTION, INC.,
THE OTHER SELLERS NAMED HEREIN
AND
XXXXXX COMPANY, INC.,
AS BUYER
August 18, 2000
[EXECUTION COPY]
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS................................................1
1.1 DEFINITIONS................................................1
1.2 TERMS GENERALLY............................................8
ARTICLE II PURCHASE AND SALE..........................................8
2.1 THE SALE...................................................8
2.2 EXCLUDED ASSETS...........................................10
2.3 ASSUMED OBLIGATIONS.......................................11
2.4 EXCLUDED LIABILITIES......................................12
2.5 CERTAIN LEASES AND CONTRACTS..............................12
ARTICLE III PURCHASE PRICE............................................13
3.1 PURCHASE PRICE............................................13
3.2 PURCHASE PRICE DEPOSIT; PAYMENT OF DEPOSIT UPON
TERMINATION OR CLOSING..................................13
3.3 PRE-CLOSING DETERMINATION OF PURCHASED INVENTORY..........13
3.4 PRE-CLOSING DETERMINATION OF ASSUMED PAYABLES.............14
3.5 ALLOCATION OF PURCHASE PRICE..............................14
3.6 TRANSFER TAXES............................................14
3.7 BASIC PRORATIONS; UTILITIES; TAXES........................15
ARTICLE IV THE CLOSING...............................................15
4.1 TIME AND PLACE OF CLOSING.................................15
4.2 PAYMENT OF PURCHASE PRICE.................................15
4.3 DELIVERIES BY THE SELLERS.................................15
4.4 DELIVERIES BY THE BUYER...................................17
4.5 AGREEMENTS WITH RESPECT TO TRICON AND TRICON
FRANCHISEES...............................................17
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLER..............18
5.1 ORGANIZATION; QUALIFICATION...............................18
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT......................18
5.3 CONSENTS AND APPROVALS; NO VIOLATION......................19
5.4 SELLER REPORTS; FINANCIAL STATEMENTS......................19
5.5 TITLE TO ASSETS...........................................20
5.6 LEASES....................................................20
5.7 ENVIRONMENTAL MATTERS.....................................21
5.8 LABOR MATTERS.............................................22
5.9 ERISA; BENEFIT PLANS......................................25
5.10 CERTAIN CONTRACTS AND ARRANGEMENTS........................26
i
5.11 LEGAL PROCEEDINGS AND JUDGMENTS...........................27
5.12 PERMITS...................................................27
5.13 COMPLIANCE WITH LAWS......................................27
5.14 TAXES.....................................................27
5.15 PERSONAL PROPERTY.........................................28
5.16 INTELLECTUAL PROPERTY.....................................29
5.17 AFFILIATE RELATIONS.......................................31
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BUYER...............31
6.1 ORGANIZATION..............................................31
6.2 AUTHORITY RELATIVE TO THIS AGREEMENT......................31
6.3 CONSENTS AND APPROVALS; NO VIOLATION......................31
6.4 AVAILABILITY OF FUNDS.....................................32
ARTICLE VII COVENANTS OF THE PARTIES..................................32
7.1 CONDUCT OF BUSINESS.......................................32
7.2 ACCESS TO INFORMATION.....................................34
7.3 EXPENSES; TRANSITION FUNDING AGREEMENT....................35
7.4 FURTHER ASSURANCES........................................35
7.5 PUBLIC STATEMENTS.........................................36
7.6 CONSENTS AND APPROVALS....................................36
7.7 FEES AND COMMISSIONS......................................37
7.8 TAX MATTERS...............................................37
7.9 SCHEDULES; SUPPLEMENTS TO SCHEDULES.......................37
7.10 TRANSFERRED EMPLOYEES; SEVERANCE..........................38
7.11 LITIGATION SUPPORT........................................41
7.12 NOTIFICATION..............................................41
7.13 SUBMISSION FOR BANKRUPTCY COURT APPROVAL..................42
7.14 RELEASE OF LIENS..........................................43
7.15 NO SOLICITATION OF TRANSACTIONS...........................43
7.16 TITLE COMMITMENT AND TITLE REVIEW.........................43
ARTICLE VIII CONDITIONS TO CLOSING.....................................44
8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT
THE CLOSING...............................................44
8.2 CONDITIONS TO OBLIGATIONS OF THE BUYER....................45
8.3 CONDITIONS TO OBLIGATIONS OF THE SELLERS..................46
ARTICLE IX INDEMNIFICATION...........................................47
9.1 INDEMNIFICATION...........................................47
9.2 DEFENSE OF CLAIMS.........................................48
ii
ARTICLE X TERMINATION AND ABANDONMENT...............................50
10.1 TERMINATION...............................................50
10.2 NOTICE OF TERMINATION.....................................52
10.3 EFFECT OF TERMINATION.....................................52
ARTICLE XI MISCELLANEOUS PROVISIONS..................................53
11.1 AMENDMENT AND MODIFICATION................................53
11.2 WAIVER OF COMPLIANCE; CONSENTS............................53
11.3 SURVIVAL..................................................53
11.4 NOTICES...................................................54
11.5 ASSIGNMENT................................................54
11.6 GOVERNING LAW.............................................55
11.7 COUNTERPARTS..............................................55
11.8 INTERPRETATION............................................55
11.9 SCHEDULES AND EXHIBITS....................................55
11.10 ENTIRE AGREEMENT..........................................55
11.11 BULK SALES OR TRANSFER LAWS...............................55
11.12 PARTIAL INVALIDITY AND SEVERABILITY.......................56
11.13 HEADINGS..................................................56
11.14 SUBMISSION TO JURISDICTION................................56
iii
[EXECUTION COPY]
EXHIBITS
EXHIBIT A - Form of Xxxx of Sale
EXHIBIT B - Form of Instrument of Assumption
EXHIBIT C - Form of Limited Warranty Deed
EXHIBIT D - Form of Bid Procedures Order
EXHIBIT E - Form of Sale Order
EXHIBIT F - Form of Assignment of Leases
EXHIBIT G - Form of Intellectual Property Assignment
EXHIBIT H - Transition Services Agreement Term Sheet
EXHIBIT I - Form of Deposit Escrow Agreement
EXHIBIT J - Form of Tricon Extension
EXHIBIT K - Form of Pizza Hut/KFC Franchisee Agreement Amendment and
Form of Taco Xxxx Franchisee Agreement Amendment
EXHIBIT L - Form of Transition Funding Agreement
EXHIBIT M - Form of Landlord Estoppel Certificate
EXHIBIT 8.2(I) - 365 Order Provisions
SCHEDULES
SCHEDULE 2.1(A) - Real Estate
SCHEDULE 2.1(B) - Inventory
SCHEDULE 2.1(C) - Purchased Assets (Equipment, ETC.)
SCHEDULE 2.1(D) - Purchased Assets (Assumed Agreements)
SCHEDULE 2.1(F) - Purchased Assets (Intellectual Property)
SCHEDULE 2.1(N) - Purchased Assets (Excluded Insurance Proceeds)
SCHEDULE 2.2(G) - Other Excluded Assets
SCHEDULE 2.3(D) - Other Assumed Obligations
SCHEDULE 2.5 - Certain Assumed Agreements
SCHEDULE 3.5 - Allocation of Purchase Price
SCHEDULE 5.1 - Organization and Qualification of Sellers
SCHEDULE 5.3 - Consents and Approvals; No Violation
SCHEDULE 5.4(B) - Seller Reports; Financial Statements
IV
SCHEDULE
SCHEDULE 5.5 - Title to Assets
SCHEDULE 5.6 - Leases
SCHEDULE 5.7(A) - Environmental Matters
SCHEDULE 5.8 - Labor Matters
SCHEDULE 5.9 - Benefit Plans
SCHEDULE 5.10 - Certain Contracts and Arrangements
SCHEDULE 5.11 - Legal Requirements and Judgments
SCHEDULE 5.12 - Permits and Environmental Permits
SCHEDULE 5.14 - Taxes
SCHEDULE 5.15 - Personal Property
SCHEDULE 5.16 - Intellectual Property
SCHEDULE 5.17 - Affiliate Relations
SCHEDULE 6.3 - Consents and Approvals; No Violations
SCHEDULE 7.1 - Conduct of Business
SCHEDULE 7.2(A) - List of Recipients of Landlord Estoppel Certificates
V
[EXECUTION COPY]
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT"), is made as of August
18, 2000 by and among AmeriServe Food Distribution, Inc., a Delaware corporation
("AFDI"); AmeriServe Transportation, Inc., a Nebraska corporation; NEBCO XXXXX
Holding Company, a Delaware corporation; Xxxxxxx Warehouse Properties, Inc., a
Delaware corporation; Delta Transportation, Ltd., a Wisconsin corporation; PSC
Services of Florida, Inc., a Florida corporation; Northland Transportation
Services, Inc., a Nebraska corporation; NAVC Corp., a Nevada corporation; North
American Vantix Corp., a Delaware corporation; ASNSC, Inc., a Delaware
corporation; Vantix Logistics, L.P., a Texas limited partnership ("VANTIX"); and
PSD Transportation Services, Inc., a Nevada corporation (collectively, the
"SELLERS"); and XxXxxx Company, Inc., a Texas corporation (the "BUYER").
WHEREAS, the Buyer desires to purchase from the Sellers, and the
Sellers desire to sell to the Buyer, the Purchased Assets (as hereinafter
defined) upon the terms and conditions hereinafter set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. (a) As used in this Agreement, the following terms
have the meanings specified in this Section 1.1(a).
"ACQUISITION" means either (a) a merger, consolidation, share exchange
or other business combination pursuant to which the Business is acquired by
another Person, (b) the sale by the Sellers to any Person of (i) the Business,
(ii) all or substantially all of the Purchased Assets (other than any sale or
sales of the Sellers' assets as part of a Chapter 7 liquidation), (iii) control
of any of the Sellers or (iv) a recapitalization or plan of reorganization that
precludes the consummation of the transactions contemplated by this Agreement.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.
"ALTERNATIVE OFFER" means any proposal or offer to any Seller from any
Person other than the Buyer or its Affiliates for an Acquisition.
[EXECUTION COPY]
"ASSIGNMENT OF LEASES" means the assignment to be executed and
delivered by AFDI at the Closing, substantially in the form of EXHIBIT F hereto.
"ASSUMED AGREEMENTS" means, subject to Sections 2.2(h) and 2.2(i), any
contract, agreement, real or personal property lease, commitment, understanding
or instrument (including all amendments to any of the foregoing) to which any
Seller is a party or by which any Seller is bound which relates to the Business
or the Purchased Assets and which is listed or described on SCHEDULE 2.1(d). For
the avoidance of doubt, Sellers and Buyer acknowledge and agree that if Buyer
determines not to accept conveyance of any agreement pursuant to Section 2.2(h)
or Section 2.2(i), then such agreement shall not be deemed to be Assumed
Agreements. Furthermore, for the avoidance of doubt, and notwithstanding the
listing of any of the following agreements on SCHEDULE 2.1(d), (i) no agreement
with any franchisee of any of the Concepts shall be an Assumed Agreement unless
such franchisee has executed and delivered the Pizza Hut/KFC Franchise Agreement
Amendment or the Taco Xxxx Franchise Agreement Amendment, as the case may be, or
Buyer and AFDI mutually agree that such agreement shall be an Assumed Agreement,
and (ii) the Tricon Agreement shall not be an Assumed Agreement unless Tricon
has executed and delivered the Tricon Extension.
"BALANCE SHEET" means the June 10, 2000 balance sheet of the Business
as set forth on SCHEDULE 1.1(a)(1).
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
District of Delaware or such other court having jurisdiction over the case
commenced by the Sellers under Chapter 11 of Title 11 of the United States Code.
"XXXX OF SALE" means the Xxxx of Sale to be executed and delivered by
the Sellers at the Closing, substantially in the form of EXHIBIT A hereto.
"BUSINESS" means the activities carried on by the Sellers (other than
with respect to the CCC Business and the Equipment Business) for the purpose of
distributing to its customers a wide variety of food items, paper goods and
cleaning supplies and related primarily to the distribution of such items to
franchisees and franchisors of the Concepts in the continental United States of
America.
"BUSINESS DAY" means any day other than Saturday, Sunday and any day
which is a legal holiday or a day on which banking institutions in Dallas, Texas
are authorized by law or other governmental action to close.
"BUYER REPRESENTATIVES" means the Buyer's accountants, employees,
counsel, environmental consultants, financial advisors and other authorized
representatives.
"CCC BUSINESS" means the activities carried on by AFDI's subsidiary,
Chicago Consolidation Corporation, an Illinois corporation, for the purpose of
conducting its redistribution business.
2
[EXECUTION COPY]
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act, as amended.
"CHAPTER 11 CASE" means the Sellers' case commenced under Chapter 11 of
Title 11 of the United States Code.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended and set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONCEPTS" means restaurants or stores denominated as Taco Xxxx, Pizza
Hut, Kentucky Fried Chicken, KFC or Long Xxxx Xxxxxxx in the 48 contiguous
states of the United States of America.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement, dated
April 26, 2000, as amended on May 4, 2000 and on July 10, 2000, between AFDI and
Buyer.
"CONTAMINANTS" shall mean any substance, gas, liquid, product, element,
radiation, vibration or matter included in any definition of toxic substance,
hazardous waste, extremely hazardous waste, restricted hazardous waste,
contaminant, pollutant, toxic pollutant, deleterious substance, or words of
similar import under any Environmental Law.
"EMPLOYMENT LAWS" means the Occupational Safety and Health Act, as
amended, and all regulations related to the foregoing, and all other federal,
state or local laws, statutes, ordinances, rules, regulations, codes, and orders
relating to employment and labor, including, without limitation, those relating
to wages, hours, employment, or labor standards generally, pay equity,
employment equity, workers' compensation, workplace safety and insurance,
occupational health and safety, employer health tax, employment or unemployment
insurance, and income tax withholdings applicable to persons employed in
connection with the Business.
"ENCUMBRANCES" means any mortgages, pledges, liens, claims, charges,
security interests, conditional and installment sale agreements, activity and
use limitations, conservation easements, deed restrictions, encumbrances and
charges of any kind.
"ENVIRONMENTAL LAWS" means all federal, state and local laws, statutes,
regulations, rules, rules of common law, ordinances, codes, decrees, judgments,
directives, or judicial or administrative orders relating to pollution or
protection of the environment, natural resources or human health and safety,
including, without limitation, CERCLA and laws relating to Releases or
threatened Releases of Contaminants, as hereinafter defined (including, without
limitation, into ambient air, surface water, groundwater, land, surface and
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release, transport or handling of
Contaminants.
3
[EXECUTION COPY]
"EQUIPMENT BUSINESS" means the activities carried on by AFDI for the
purpose of selling restaurant equipment and smallwares.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any entity which is treated as a single
employer with any Seller for purposes of Section 414 of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GAAP" means United States generally accepted accounting principles, as
in effect on the date hereof.
"GOVERNMENTAL ENTITY" means any federal, state, foreign or local
governmental or regulatory authority, department, agency, commission, taxing
authority, body or other governmental entity.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"INCOME TAX" means any federal, state, local or foreign Tax (a) based
upon, measured by or calculated with respect to net income, profits or receipts
(including, without limitation, capital gains Taxes and minimum Taxes) or (b)
based upon, measured by or calculated with respect to multiple bases (including,
without limitation, corporate franchise taxes) if one or more of the bases on
which such Tax may be based, measured by or calculated with respect to, is
described in clause (a), in each case together with any interest, penalties, or
additions to such Tax.
"INSTRUMENT OF ASSUMPTION" means the Instrument of Assumption to be
executed and delivered by the Buyer at Closing, substantially in the form of
EXHIBIT B hereto.
"INTELLECTUAL PROPERTY" means: (a) United States, international and
foreign patents, patent applications, inventions and invention disclosures, and
statutory invention registrations, including reissues, divisions, continuations,
continuations in part, extensions and reexaminations thereof, all rights therein
provided by international treaties or conventions, and all improvements thereto;
(b) trademarks, service marks, trade dress, logos, trade names, corporate names,
domain names and other source identifiers (and the goodwill associated with the
foregoing), whether or not registered, including all common law rights, and
registrations and applications for registration thereof, all rights therein
provided by international treaties or conventions, and all renewals of any of
the foregoing; (c) copyrightable works, copyrights, whether or not registered,
and registrations and applications for registration thereof, mask works, and all
rights therein provided by international treaties or conventions; (d)
confidential and proprietary information, including trade secrets and know-how;
(e) Software; (f) all rights to register and file applications for registration
thereof with applicable authorities and registries throughout the world; and (g)
all rights to xxx and recover damages and
4
[EXECUTION COPY]
royalties and to seek injunctive relief for past, present and future
infringement, misappropriation, dilution or violation thereof.
"INTELLECTUAL PROPERTY ASSIGNMENT" shall mean the Intellectual Property
Assignment to be executed and delivered by the Sellers named therein at the
Closing, substantially in the form of EXHIBIT G attached hereto.
"LIMITED WARRANTY DEED" means the limited warranty deed to be executed
and delivered by AFDI at the Closing with respect to the facility located in
Orlando, Florida, substantially in the form of EXHIBIT C attached hereto.
"MATERIALS" has the meaning specified in the Confidentiality Agreement.
"MATERIAL ADVERSE EFFECT" means any change or changes in, or effect on,
the Business or the Purchased Assets that is individually, or in the aggregate
are, or would reasonably be expected to be materially adverse to the financial
condition or results of operations of the Business taken as a whole, other than
any materially adverse change in or effect on the Business which is cured to the
satisfaction of the Buyer (including by the payment of money) by the applicable
Sellers before the Termination Date.
"PERMITTED ENCUMBRANCES" means (a) those Encumbrances set forth in
SCHEDULE 1.1(A)(3); (b) those exceptions to title to the Purchased Assets listed
in SCHEDULE 5.5; (c) statutory liens for current taxes or assessments not yet
due or delinquent or the validity or amount of which is being contested in good
faith by appropriate proceedings, none of which contested matters is material;
(d) zoning, entitlement, conservation restriction and other land use and
environmental regulations by governmental authorities which do not materially
interfere with the present use of the Purchased Assets; and (d) all exceptions,
encroachments, restrictions, easements, charges, rights of way and other
Encumbrances set forth in any state, local or municipal franchise under which
the Business is conducted which do not materially interfere with the present use
of the Purchased Assets nor, individually or in the aggregate, create a Material
Adverse Effect.
"PERSON" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization or any
Governmental Entity.
"PRIME RATE" means, for any day, the per annum rate of interest quoted
as the "Bank Prime Rate" rate for the most recent weekday for which such rate is
quoted in the statistical release designated as H.15(519), or any successor
publication, published from time to time by the Board of Governors of the
Federal Reserve System.
"RELEASE" shall mean any release, spill, leak, emission, pumping,
injection, deposit, discharge, dispersal, leaching, migration, spraying,
abandonment, pouring, emptying, throwing, dumping, placing or disposal into the
environment.
5
[EXECUTION COPY]
"SALE HEARING" means the hearing of the Bankruptcy Court during which
the Bankruptcy Court issues the Sale Order.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER LICENSED INTELLECTUAL PROPERTY" means, collectively, all
Intellectual Property that a third party licenses to any Seller for use in the
Business.
"SELLER LICENSES" means, collectively, all (a) licenses of Intellectual
Property by any Seller to third parties, (b) licenses of any Seller Licensed
Intellectual Property by third parties to such Seller, and (c) agreements
governing the rights between any Seller and third parties relating to the
development or use of Intellectual Property, the development or transmission of
data, or the use, modification, or other practices with respect to any of the
Sellers' web sites.
"SELLER OWNED INTELLECTUAL PROPERTY" means all Intellectual Property
owned by any Seller and used in the Business.
"SELLER SOFTWARE" means, collectively, all Software developed,
manufactured, distributed, sold, licensed or marketed by any Seller, and
material to the operation of the Business, including all such Software operated
by such Seller on its web sites or used by such Seller in connection with
processing customer orders, storing customer information, or storing or
archiving data.
"SELLERS' REPRESENTATIVES" means the Sellers' accountants, employees,
counsel, environmental consultants, financial advisors and other authorized
representatives.
"SOFTWARE" means all computer software, programs, databases, source
code, object code and related documentation in any form used in the Business.
"SUBSIDIARY," when used in reference to any other Person, means any
Person of which outstanding securities having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
of such Person are owned directly or indirectly by such other Person.
"TAX AFFILIATE" means, with respect to any Person, any other Person
that is a member of an affiliated group of corporations (within the meaning of
section 1504(a) of the Code) filing a consolidated U.S. federal income Tax
Return, and a group of corporations filing a consolidated or combined Tax Return
for state, local or foreign purposes (each a "CONSOLIDATED GROUP"), if the first
Person could be held liable for the Taxes of such other Person or Consolidated
Group.
6
[EXECUTION COPY]
"TAX" and "TAXES" means all taxes, charges, fees, levies, penalties or
other assessments imposed by any Governmental Entity or political subdivision
thereof, including, but not limited to, income, excise, property, sales, use,
transfer, franchise, payroll, windfall or other profits, alternative minimum,
gross receipts, intangibles, capital stock, estimated, employment, unemployment
compensation or net worth, ad valorem, stamp, value added or gains taxes,
registration and documentation fees, custom duties, tariffs and similar charges,
withholding, social security or other taxes (including any fee, assessment or
other charge in the nature of or in lieu of any tax), including any interest,
penalties or additions attributable thereto.
"TAX RETURN" means any return, report, information return or other
document (including any related or supporting information) required to be
supplied to any Governmental Entity with respect to Taxes.
"TRANSFERRING EMPLOYEE RECORDS" means all personnel files related to
the Transferred Employees.
"TRICON" means Tricon Global Restaurants, Inc., a North Carolina
corporation.
"TRICON AGREEMENT" means that certain Amended and Restated Sales and
Distribution Agreement, dated as of the 1st day of November, 1998, by and among
AFDI, Tricon, and the other parties signatory thereto.
"WARN ACT" means the Worker Adjustment Retraining and Notification Act
of 1988, as amended.
Each of the following terms has the meaning specified in the Section
set forth opposite such term:
TERM SECTION
Assumed Obligations 2.3
Benefit Plans 5.9(a)
Buyer Material Adverse Effect 6.3
Buyer Required Regulatory Approvals 6.3
Closing 4.1
Closing Date 4.1
Deposit Escrow Agreement 3.3
Direct Claim 9.2(c)
Environmental Permits 5.7(a)
Excluded Assets 2.2
7
[EXECUTION COPY]
TERM SECTION
Excluded Obligations 2.4
Final Order 8.2(c)
Indemnifiable Loss 9.1(a)
Indemnifying Party 9.1(d)
Indemnitee 9.1(c)
Permits 5.12
Purchased Assets 2.1
Purchase Price 3.1
Real Estate 2.1(a)
Sale Order 7.13(b)
Seller Reports 5.4(a)
Seller Required Regulatory Approvals 5.3
Termination Date 10.1(b)
Third Party Claim 9.2(a)
Transferable Permits 2.1(e)
1.2 TERMS GENERALLY. (a) Words in the singular shall include the plural
and vice versa, and words of one gender shall include the other genders as the
context requires, (b) the terms "hereof," "herein," and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement and not to any particular provision of this Agreement, and Article,
Section, paragraph, Exhibit and Schedule references are to the Articles,
Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise
specified, (c) the word "including" and words of similar import when used in
this Agreement shall mean "including, without limitation," unless otherwise
specified, (d) the word "or" shall not be exclusive, and (e) provisions shall
apply, when appropriate, to successive events and transactions.
ARTICLE II
PURCHASE AND SALE
2.1 THE SALE. Upon the terms and subject to the satisfaction of the
conditions contained in this Agreement, at the Closing, the Sellers will sell,
assign, convey, transfer and deliver to the Buyer, and the Buyer will purchase
and acquire from the Sellers, free and clear of all Encumbrances (except for
Permitted Encumbrances), all of the Sellers' right, title and interest in, to
and under the assets used primarily in connection with the Business (other than
the Excluded Assets) (collectively, the "PURCHASED ASSETS") including, without
limitation, the following:
8
[EXECUTION COPY]
(a) the Owned Real Estate and the Leased Real Estate described
on SCHEDULE 2.1(a) (collectively the "REAL ESTATE");
(b) the Purchased Inventory (as hereinafter defined);
(c) the machinery, equipment, vehicles, furniture and other
tangible personal property listed on SCHEDULE 2.1(c);
(d) the Assumed Agreements listed on SCHEDULE 2.1(d) (subject
to SECTIONS 2.2(h) and (i));
(e) the Permits and Environmental Permits listed on SCHEDULE
5.12, in each case, to the extent the same are assignable (the "TRANSFERABLE
PERMITS");
(2) except to the extent rejected in the Chapter 11 Case with
the consent of the Buyer, all Intellectual Property of the Sellers, all of which
are listed on SCHEDULE 2.1(f);
(f) originals or copies of all Transferring Employee Records,
books, operating records, operating, safety and maintenance manuals, engineering
design plans, blueprints and as-built plans, specifications, procedures and
similar items of any Seller relating to the Business or the Purchased Assets,
including books of account, all customer lists, billing records and other
customer correspondence relating to the Business, all regulatory filings and
other books and records relating to the rates and services provided by the
Sellers in connection with the operation of the Business or the Purchased
Assets; and copies of all relevant portions of any such records or other items
that are commingled with documents, records or files of other businesses of any
Seller or any Affiliate of any Seller;
(3) all of the rights, claims or causes of action of any
Seller against a third party related to the Purchased Assets, the Business or
the Assumed Obligations arising out of transactions occurring prior to the
Closing Date; to the extent such rights, claims or causes of action relate to
both Assumed Obligations and Excluded Obligations, Buyer and each Seller shall
share such rights, claims or causes of action in the same proportion as their
respective liabilities bear to the total liability relating to those rights,
claims or causes of action;
(g) any assets purchased or to be purchased by any Seller
pursuant to Section 7.4(d);
(4) the goodwill relating to the Business;
9
[EXECUTION COPY]
(5) all sales and promotional literature, customer lists,
customer files and other sales-related materials related to the Business;
(6) security deposits relating to Assumed Agreements;
(7) all customer deposits and advances and prepaid and other
current assets relating to the Business; and
(8) except as set forth on SCHEDULE 2.1(n), all insurance
proceeds with respect to any Purchased Assets which have been damaged or
destroyed prior to the Closing Date to the extent an adjustment therefor has
been made.
2.2 EXCLUDED ASSETS. Notwithstanding any provision herein to the
contrary, the Purchased Assets shall not include the following property or
assets of the Sellers, any property or assets of the Sellers not described in
Section 2.1, or any property or assets of the Sellers which are specifically
identified on the schedules to Section 2.1 as Excluded Assets (collectively, the
"EXCLUDED ASSETS"):
(a) cash, cash equivalents and bank deposits;
(b) certificates of deposit, shares of stock, securities,
bonds, debentures, evidences of indebtedness (including all accounts receivable
of Sellers outstanding as of the Closing Date), and interests in any Person
owned by any Seller, including, but not limited to, ProSource Distribution
Services, Ltd., AmeriServe of Canada, Ltd., PFS de Mexico S.A. de C.V., Services
AmeriServe S.A. de C.V. and Chicago Consolidated Corporation;
(c) properties and assets used exclusively in the conduct of
the Equipment Business, the CCC Business and the other businesses of the Sellers
conducted in locations other than the continental states of the United States of
America.
(d) subject to Section 3.7 hereof, any refund or credit (i)
related to Taxes paid prior to the Closing Date in respect of the Purchased
Assets and related to a period prior to the Closing Date, or (ii) arising under
the Assumed Agreements and relating to a period prior to the Closing Date;
(9) the Sellers' causes of action and rights of recovery
pursuant to Sections 544 through 550 and Section 553 and any other avoidance
actions under any other applicable provisions of the Bankruptcy Code;
(e) subject to Section 7.2, any books, records or the like of
any Seller other than those books, records, and the like specifically described
in Section 2.1(g);
(f) certain assets and interests described or referred to in
SCHEDULE 2.2;
10
[EXECUTION COPY]
(10) any agreement with any franchisee with respect to any
Concept which would otherwise be an Assumed Agreement but for the fact that the
franchisee under such agreement has not entered into the amendments and/or
modifications of such agreement contemplated by Section 4.5(b) or (c), as
applicable, and Buyer, in its sole discretion, has determined not to accept the
conveyance of such agreement by giving written notice of such non-acceptance to
the applicable Seller not less than one day prior to the Closing;
(11) any agreement which would otherwise be an Assumed
Agreement but for the fact that Buyer, in its sole discretion, has determined
not to accept the conveyance of such agreement by giving written notice of such
non-acceptance to AFDI not less than three (3) Business Days prior to the Sale
Hearing; and
(g) the rights of each Seller under this Agreement.
2.3 ASSUMED OBLIGATIONS. On the Closing Date, the Buyer shall deliver
to AFDI the Instrument of Assumption pursuant to which the Buyer shall assume
and agree to discharge all of the following liabilities and obligations (the
"ASSUMED OBLIGATIONS"):
(a) all liabilities and obligations of any Seller under the
Assumed Agreements and the Transferable Permits in accordance with the terms
thereof, except, in each case, to the extent such liabilities and obligations,
but for a breach or default by such Seller, would have been paid, performed or
otherwise discharged on or prior to the Closing Date or to the extent the same
arise out of any such breach or default by any Seller prior to the Closing;
(12) all liabilities and obligations relating to any customer
deposits and customer advances of the Business which are part of the Purchased
Assets;
(b) any liability, obligation or responsibility under or
related to former, current or future Environmental Laws, whether such liability
or obligation or responsibility is known or unknown, contingent or accrued,
arising as a result of or in connection with (i) any violation or alleged
violation of any Environmental Law after the Closing Date, with respect to the
ownership of the Purchased Assets or the operation of the Business after the
Closing Date; (ii) loss of life, injury to persons or property or damage to
natural resources caused (or allegedly caused) by the (A) off-site disposal,
storage, transportation, discharge, recycling, or the arrangement for such
activities, of Contaminants after the Closing Date, in connection with the
ownership of the Purchased Assets or the operation of the Business after the
Closing Date, or (B) the Release of Contaminants at, on, in, under, adjacent to
or migrating from any of the Purchased Assets after the Closing Date; or (iii)
the investigation
11
[EXECUTION COPY]
or remediation of contaminants that have been Released after the Closing Date
at, on, in, under, adjacent to or migrating from any of the Purchased Assets;
(13) the Assumed Payables (as hereinafter defined); and
(c) all liabilities which are described on SCHEDULE 2.3(e).
2.4 EXCLUDED LIABILITIES. The Buyer shall not assume or be obligated to
pay, perform or otherwise discharge any liabilities or obligations of any Seller
other than the Assumed Obligations (collectively, the "EXCLUDED OBLIGATIONS").
2.5 CERTAIN LEASES AND CONTRACTS. The 365 Order shall provide for the
assumption by the applicable Sellers and assignment to the Buyer, effective upon
the Closing, of the Assumed Agreements. At the Closing, the applicable Sellers
shall assume and such Sellers shall assign to the Buyer the Assumed Agreements.
The Assumed Agreements shall also be identified by the date of the Assumed
Agreement (if available), and the other party to the contract or lease (and the
address of such party) on an exhibit attached to a Motion for Order Authorizing
the Assumption and Assignment of Executory Contracts and Unexpired Leases. Such
exhibit shall set forth the amounts necessary to cure defaults under each of
such Assumed Agreements as determined by the applicable Seller and agreed to by
Buyer, based on the applicable Sellers' books and records. Except with respect
to such Assumed Agreements set forth on SCHEDULE 2.5 (it being acknowledged,
understood and agreed that, with respect to the Assumed Agreements set forth on
SCHEDULE 2.5, (i) Buyer shall be entitled to negotiate with the applicable
lessor or other third party with respect to such agreements and that the Sellers
hereby permit such lessors/third parties to retain or receive the benefit of all
letters of credit proceeds (to the extent drawn or drawable, and which AFDI
represents and warrants aggregate $14,511,812) with respect to such Assumed
Agreements, (ii) Buyer may retain or receive the benefit of all letter of credit
proceeds to the extent not required to remain with such lessors/third parties,
(iii) subject to Section 3.7, Buyer shall be solely responsible for any
pre-petition cure amounts with respect to such Assumed Agreements (including
without limitation accrued Taxes, which AFDI represents and warrants aggregate
$302,000) associated with such Assumed Agreements, and (iv) to the full extent
that any such pre-petition cure amounts are asserted against any Seller, Buyer
agrees to pay such amounts and to fully indemnify for and hold such Seller
harmless from any costs, expenses or other liabilities resulting from such
assertion), to the extent that any Assumed Agreement is subject to a cure
amount, the applicable Seller shall be responsible for paying or providing for
such cure amount. Notwithstanding the foregoing, with respect to the WP Xxxxx
Leases, Buyer shall be responsible for the LESSER OF (x) $800,000 and (y) fifty
percent (50%) of the EXCESS OF (A) the amount required by Sellers to pay to the
landlords under the WP Xxxxx Leases in order to cause such landlords to permit
the assumption and assignment of the WP Xxxxx Leases governing the facilities
other than the facility located in Grand Rapids, Michigan OVER (B) $8,750,000
(it being understood and agreed that Buyer and the Sellers shall permit the
landlords under the WP Xxxxx Leases to retain or receive the benefit of the
$8,750,000 letter of credit associated with the WP Xxxxx Leases). "WP XXXXX
LEASES" means the leases to which AFDI is
12
currently a party and which govern AFDI's facilities located in Grand Rapids
(Michigan), Manassas (Virginia), Shawnee (Kansas) and Burlington (New Jersey).
ARTICLE III
PURCHASE PRICE
3.1 PURCHASE PRICE. The purchase price for the Purchased Assets shall
be an amount equal to the SUM of $110 million, PLUS the purchase price for the
Purchased Inventory, as finally determined in accordance with Section 3.3, MINUS
the amount of Assumed Payables as finally determined in accordance with Section
3.4, MINUS the aggregate liability (if any) contemplated by SCHEDULE 2.3(e), as
Buyer and AFDI mutually and finally modify SCHEDULE 2.3(e) prior to the Closing
Date (the "PURCHASE PRICE").
3.2 PURCHASE PRICE DEPOSIT; PAYMENT OF DEPOSIT UPON TERMINATION OR
CLOSING. Within three (3) Business Days of the entering by the Bankruptcy Court
of the Bid Procedures Order (as hereinafter defined), Buyer shall deposit
$10,000,000 of the Purchase Price (the "DEPOSIT") by wire funds transfer of
immediately available funds to an interest-bearing account with Chase Manhattan
Bank (or such other nationally recognized banking institution mutually selected
by AFDI and Buyer), as Escrow Agent (the "DEPOSIT ESCROW AGENT") under the
Deposit Escrow Agreement substantially in the form attached hereto as EXHIBIT K
(the "DEPOSIT ESCROW AGREEMENT"). Upon any termination of this Agreement, the
Deposit shall be delivered to Buyer or AFDI (on behalf of the Sellers), as the
case may be, in accordance with Section 10.3 below. If a Closing occurs, the
Deposit will be delivered to AFDI (on behalf of the Sellers) in accordance with
Section 4.2 below.
3.3 PRE-CLOSING DETERMINATION OF PURCHASED INVENTORY. The inventory
owned by Sellers to be purchased by Buyer consists of (x) Long Xxxx Xxxxxxx
inventory, (y) "common items", and (z) promotional items (including but not
limited to food, paper, point-of-purchase and premium items) related to future
promotions, provided that, in the case of each item of inventory described in
each of clauses (x), (y) and (z), such item (A) is saleable in the ordinary
course of business, (B) has a remaining shelf life consistent with industry
standards and (C) except in the case of the promotional items, does not exceed a
90 days supply as of the Closing Date (collectively, the "90-DAY PURCHASED
INVENTORY "). Inventory which is in excess of 90 days supply but which would
otherwise be 90-Day Purchased Inventory shall be referred to herein as "90-PLUS
PURCHASED INVENTORY", and, collectively with the 90-Day Purchased Inventory, the
"PURCHASED INVENTORY ". With respect to the 90-Plus Purchased Inventory, AFDI
(on behalf of the Sellers) shall elect in its sole discretion to (1) sell all of
it to Buyer on the Closing Date at twenty-five percent (25%) of Landed Cost, (2)
salvage all of it, or (3) cause Buyer to purchase all of it on the Closing Date
for Landed Cost so long as the Sellers guarantee (to the reasonable satisfaction
of Buyer) the repurchase of the 90-Plus Purchased Inventory at Landed Cost PLUS
standard xxxx-up PLUS reasonable carrying costs (including cost of debt and
reasonable handling fees). The purchase price for each item of 90-Day Purchased
Inventory shall be equal to the Landed Cost of each item, it being understood
and agreed that the aggregate purchase price for the Purchased Inventory shall
be determined based on the existing perpetual inventory
13
records of the Sellers as of 12:01 AM on the Closing Date and based on review
procedures mutually established by AFDI and Buyer. The purpose of the review
procedures will be to determine the accuracy of the quantity, value and quality
of the Purchased Inventory, and it is understood and agreed by Buyer and AFDI
that the process outlined by the review procedures will be completed no fewer
than two (2) and not more than ten (10) days prior to the anticipated Closing
Date and that the resulting adjustments will be agreed to not less than two (2)
days prior to the Closing Date. For purposes of this Section 3.3, "LANDED COST"
shall mean (i) the original invoice cost, PLUS (ii) standard freight incurred in
delivering such inventory to Sellers' facilities, LESS (iii) any active deals
and allowances. For the avoidance of doubt, there shall be no post-Closing
adjustment with respect to the Purchased Inventory.
3.4 PRE-CLOSING DETERMINATION OF ASSUMED PAYABLES. The Sellers shall
assign to Buyer, and the Buyer shall assume and pay as and when due, accounts
payable of the Sellers relating to (x) Long Xxxx Xxxxxxx, (y) Vantix and (z)
"common items" which are owned by the Sellers and specifically identified in a
listing (printed as of 12:01 AM on the Closing Date) (the "PAYABLES LISTING")
delivered to Buyer by Sellers (collectively, the "ASSUMED PAYABLES"). The
Payables Listing will reflect those Assumed Payables which the Sellers believe
to be complete and accurate as of the Closing Date. Any account payable not
specifically identified on the Payables Listing shall remain the obligation of
the applicable Seller. Each Assumed Payable will be valued at the gross amount
of the Assumed Payable from the vendor (prior to adjustments for cash discount,
freight differentials earned by Vantix, and/or other discounts or adjustments
due from the applicable payee). For the avoidance of doubt, there shall be no
post-Closing adjustment with respect to the Assumed Payables.
3.5 ALLOCATION OF PURCHASE PRICE. The Buyer and the Sellers agree upon
the allocation among the Purchased Assets of the sum of the Purchase Price and
the Assumed Obligations set forth on SCHEDULE 3.5, which is consistent with
Section 1060 of the Code and the Treasury Regulations thereunder and which will
be supplemented by Buyer (and approved by AFDI, which approval will not be
unreasonably withheld or delayed) on an asset-by-asset basis within thirty (30)
days after the Closing Date. Each of the Buyer and each Seller shall report the
transactions contemplated by this Agreement for federal Income Tax and all other
tax purposes in a manner consistent with the allocation determined pursuant to
this Section 3.5. Each of the Buyer and the Sellers agree to provide the other
promptly with any other information required to complete Form 8594. Each of the
Buyer and the Sellers shall notify and provide the other with reasonable
assistance in the event of an examination, audit or other proceeding regarding
the agreed upon allocation of the Purchase Price.
3.6 TRANSFER TAXES. To the extent not addressed by the Bankruptcy Court
in the Sale Order, all transfer, documentary, sales, use, stamp, registration
and other such taxes and recording, filing and other fees (including any
penalties and interest) incurred in connection with this Agreement and as a
result of the conveyance of the Purchased Assets by the Sellers to the Buyer
shall be paid as follows: fifty percent (50%) by AFDI (on behalf of the Sellers)
and fifty percent (50%) by the Buyer, in each case when due, and the Buyer will,
at its own expense, file all necessary Tax Returns and other documentation with
respect to all such transfer, documentary, sales, use, stamp,
14
registration and other taxes and fees, and, if required by applicable law, and
the Sellers will join in the execution of any such Tax Returns and other
documentation.
3.7 BASIC PRORATIONS; UTILITIES; TAXES. On the Closing Date, minimum
rent, percentage rent, water, gas, electricity and other utilities, common area
maintenance reimbursements to lessors, taxes and other similar periodic charges
or expenses relating to the Real Estate shall be prorated as of the Closing
Date. Utility meter readings for the Real Estate shall be determined as of the
Closing Date.
ARTICLE IV
THE CLOSING
4.1 TIME AND PLACE OF CLOSING. Upon the terms and subject to the
satisfaction of the conditions contained in Article VIII of this Agreement, the
closing of the sale of the Purchased Assets contemplated by this Agreement (the
"CLOSING") will take place at such place as is mutually agreeable to the parties
beginning at 10:00 A.M. (local time) no later than the fifth Business Day after
the date on which the conditions set forth in Article VIII have been satisfied
or waived; or at such other place or time as the parties may agree; PROVIDED
THAT each of Buyer and AFDI (on behalf of the Sellers) shall have the right to
extend the Closing until November 30, 2000. The date and time at which the
Closing actually occurs is hereinafter referred to as the "CLOSING DATE."
4.2 PAYMENT OF PURCHASE PRICE. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, in consideration of
the aforesaid sale, assignment, conveyance, transfer and delivery of the
Purchased Assets and the assumption of the Assumed Obligations, the Buyer will
pay or cause to be paid to AFDI (on behalf of the Sellers) at the Closing the
Purchase Price by wire transfer of immediately available funds (either from
Buyer directly or by release of the Deposit to AFDI (on behalf of the Sellers))
or by such other means as are agreed upon by AFDI and the Buyer. AFDI shall
provide wire transfer instructions to Buyer and the Deposit Escrow Agent under
the Deposit Escrow Agreement not less than two (2) Business Days prior to the
Closing Date.
4.3 DELIVERIES BY THE SELLERS. At or prior to the Closing, the
applicable Sellers will deliver the following to the Buyer, or the Escrow Agent,
as applicable:
(a) the Xxxx of Sale, duly executed by the applicable Sellers,
for the personal property included in the Purchased Assets;
(b) all consents, waivers or approvals obtained by any Seller
with respect to the Purchased Assets, the transfer of any Transferable Permit,
or the consummation of the transactions connected to the sale of the Purchased
Assets contemplated by this Agreement, to the extent required hereunder;
15
(1) the certificate contemplated by Section 8.2;
(c) the deed of conveyance of the Owned Real Estate to the
Buyer, in substantially the form of the Limited Warranty Deed, duly executed and
acknowledged by AFDI and in recordable form and assignments of the leases and
subleases of the Leased Real Estate, substantially in the form of the Assignment
of Leases, duly executed and acknowledged by AFDI and in recordable form;
(d) all such other instruments of assignment or conveyance as
shall, in the reasonable opinion of the Buyer and its counsel, be necessary to
transfer to the Buyer the Purchased Assets, in accordance with this Agreement;
(2) certificates of title for certificated motor vehicles or
other titled Purchased Assets, or other evidences of the right to use the
Purchased Assets, duly executed by the applicable Seller and in form reasonably
satisfactory to Buyer;
(3) all terminations and releases of Encumbrances on the
Purchased Assets, other than the Permitted Encumbrances;
(e) a receipt for the Purchase Price;
(4) originals (or, to the extent originals are not available,
copies) of all Assumed Agreements to be assumed by the Buyer; and all
amendments, supplements or modifications thereto;
(f) all of the Sellers' books and records constituting a part
of the Purchased Assets;
(5) the Deposit Escrow Agreement duly executed by the Sellers
(and AFDI shall cause the Deposit Escrow Agent to duly execute and deliver the
Deposit Escrow Agreement);
(6) at AFDI's expense, owner's polices of title insurance for
the Owned Real Estate, issued by a title company reasonably satisfactory to the
Buyer and insuring Buyer's fee simple estate (in an amount equal to the fair
market value of such property, said amount to be agreed upon in good faith by
AFDI and Buyer) subject to no exceptions other than the Permitted Encumbrances,
any other exceptions reasonably requested by AFDI and approved by Buyer pursuant
to Section 7.16;
(g) a definitive Transition Services Agreement, incorporating,
among other things, the terms set forth in the Transition Services Agreement
Term Sheet attached hereto as
16
EXHIBIT H (the "TRANSITION SERVICES TERM SHEET") and such definitive agreement
(the "TRANSITION SERVICES AGREEMENT") shall be duly executed by the applicable
Sellers;
(h) such other agreements, documents, instruments and writings
as are reasonably required to be delivered by the Sellers at or prior to the
Closing Date pursuant to this Agreement; and
(7) FIRPTA certificate.
4.4 DELIVERIES BY THE BUYER. At or prior to the Closing, the Buyer, or
the Deposit Escrow Agent, as applicable, will deliver the following to AFDI, or
the Deposit Escrow Agent, as applicable:
(a) the Purchase Price, LESS the Deposit, by wire transfer of
immediately available funds or such other means as are agreed upon by AFDI and
the Buyer;
(b) the Instrument of Assumption with respect to the Assumed
Obligations, duly executed by the Buyer;
the certificate contemplated by Section 8.3;
(c) all such other instruments of assumption as shall, in the
reasonable opinion of AFDI and its counsel, be necessary for the Buyer to assume
the Assumed Obligations in accordance with this Agreement;
(9) the Transition Services Agreement, duly executed by the
Buyer;
(d) the Deposit (which shall be delivered by the Deposit
Escrow Agent), and
(e) such other agreements, documents, instruments and writings
as are reasonably required to be delivered by the Buyer at or prior to the
Closing Date pursuant to this Agreement.
4.5 AGREEMENTS WITH RESPECT TO TRICON AND TRICON FRANCHISEES. The
parties hereto acknowledge that it is an integral component of this transaction
that a satisfactory resolution of certain issues be reached among AFDI, the
Buyer, Tricon and the franchisees of certain of the Concepts. The parties,
therefore, agree as follows:
(a) Tricon shall enter into an agreement in form and substance
substantially the same as that attached hereto as EXHIBIT J (the "TRICON
EXTENSION").
(b) Franchisees that collectively franchise at least
eighty-five percent (85%) of the United States Pizza Hut and KFC restaurants
under written contract with AFDI or any of AFDI's Affiliates as of the date of
this Agreement shall enter into agreements in form and substance
17
substantially the same as that attached hereto as EXHIBIT K (the "PIZZA HUT/KFC
FRANCHISEE AGREEMENT AMENDMENT").
(c) Franchisees that collectively franchise at least
eighty-five percent (85%) of the United States Taco Xxxx restaurants under
written contract with AFDI or any of AFDI's Affiliates as of the date of this
Agreement shall enter into agreements in form and substance substantially the
same as that attached hereto as EXHIBIT K (the "TACO XXXX FRANCHISEE AGREEMENT
AMENDMENT").
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, each Seller with respect to
itself represents and warrants to the Buyer as follows:
5.1 ORGANIZATION; QUALIFICATION. Seller is a corporation (or, in the
case of Vantix, a limited partnership) duly organized, validly existing and in
good standing under the laws of the State set forth opposite such Seller's name
on SCHEDULE 5.1 attached hereto and has all requisite corporate (or in the case
of Vantix, limited partnership) power and authority to own, lease, and operate
the Purchased Assets and to carry on the Business as is now being conducted. As
related to the operation of the Business, such Seller is duly qualified or
licensed to do business as a foreign corporation (or, in the case of Vantix, a
limited partnership) and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except in each case in those
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not reasonably be expected to have a Material Adverse Effect.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Such Seller has all corporate
(or, in the case of Vantix, a limited partnership) power and authority necessary
to execute and deliver this Agreement and the other agreements contemplated
herein and, after giving effect to the entry of the Sale Order, to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the other agreements contemplated herein and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors of such Seller and no other corporate (or,
in the case of Vantix, limited partnership) proceedings on the part of such
Seller are necessary to authorize this Agreement and the other agreements
contemplated herein or to consummate the transactions contemplated hereby and
thereby. This Agreement has been, and the other agreements contemplated herein
upon execution will be, duly and validly executed and delivered by such Seller,
and assuming that this Agreement and the other agreements contemplated herein
constitute valid and binding agreements of the Buyer, and subject to the receipt
of the governmental consents set forth in SCHEDULE 5.3, constitute valid and
binding agreements of such Seller, enforceable against such Seller in accordance
with their terms, except that
18
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally or general principles of equity.
5.3 CONSENTS AND APPROVALS; NO VIOLATION. Except as set forth in
SCHEDULE 5.3 (such items being referred to as the "REQUIRED CONSENTS"), neither
the execution and delivery of this Agreement or the other agreements
contemplated herein by such Seller nor the sale by such Seller of the Business
and the Purchased Assets pursuant to this Agreement will (i) conflict with or
result in any breach of any provision of the Certificate or Articles of
Incorporation, Bylaws, Certificate of Limited Partnership or Limited Partnership
Agreement of such Seller, (ii) require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entity (the
"SELLER REQUIRED REGULATORY APPROVALS"), except (A) where the failure to obtain
such consent, approval, authorization or permit, or to make such filing or
notification, would not, individually or in the aggregate, have a Material
Adverse Effect or prevent or delay the consummation of the transactions
contemplated by this Agreement or (B) for those requirements which become
applicable to such Seller as a result of the specific regulatory status of the
Buyer (or any of its Affiliates) or as a result of any other facts that
specifically relate to the business or activities in which the Buyer (or any of
its Affiliates) is or proposes to be engaged; (iii) after giving effect to the
entry of the 365 Order, result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation by which such Seller or any of the Purchased Assets may
be bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which would not, individually or in the aggregate, have a Material Adverse
Effect or prevent or materially delay the consummation of the transactions
contemplated by this Agreement; (iv) after giving effect to the entry of the 365
Order, violate any order, writ, injunction, decree, statute, rule or regulation
applicable to such Seller, or any of its assets, which violation, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect; or (v) after giving effect to the entry of the 365 Order, require any
consent, approval, authorization, or any filing with or notice to any Person,
firm, or other entity pursuant to or under any indenture, note, mortgage, bond,
security agreement, loan agreement, guaranty, pledge, or other instrument,
contract, agreement, lease, or commitment by which such Seller is a party and
relates to the Business or the Purchased Assets or by which any of the Purchased
Assets is subject or bound.
5.4 SELLER REPORTS; FINANCIAL STATEMENTS.
(a) AFDI has delivered to the Buyer the Balance Sheet
(including any amendments to such reports, the "SELLER REPORTS"). With respect
to the financial information expressly identified as relating to the Business or
the Purchased Assets, each of the consolidated balance sheets included in or
incorporated by reference into the Seller Reports (including any related notes
and schedules) has been prepared in accordance with GAAP, consistently applied,
and fairly presents the consolidated financial position of AFDI and its
subsidiaries as of its date and each of the consolidated statements of income
and cash flow included in or incorporated by reference into the Seller Reports
(including any related notes and schedules) has been prepared in accordance with
19
GAAP, consistently applied, and fairly presents the results of operations,
retained earnings and cash flow, as the case may be, of AFDI and its
subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments, none of
which shall be material, either individually or in the aggregate), in each case
in accordance with GAAP during the periods involved, except as may be noted
therein. The Balance Sheet (i) presents fairly in all material respects the
Business as of June 10, 2000, and (ii) was prepared in accordance with the books
and records of AFDI. Since the date of the Balance Sheet, there has been no
material and adverse change with respect to the Business or the Purchased Assets
which would reasonably be expected to result in a Material Adverse Effect.
(10) Except for liabilities and obligations (i) incurred since
the date of the Balance Sheet in the ordinary course of business and consistent
with past practice, or (ii) disclosed in SCHEDULE 5.4(b), such Seller has no
material liabilities or obligations of any kind whatsoever related to the
Business or the Purchased Assets (whether direct, indirect, accrued, or
contingent), and there is no existing condition or situation that would
reasonably be expected to result in any such liabilities or obligations.
5.5 TITLE TO ASSETS. Except as set forth in SCHEDULE 5.5 and except for
Permitted Encumbrances, such Seller has good and marketable title to all
Purchased Assets (other than those which have been disposed of since the date
hereof in the ordinary course of business), free and clear of all Encumbrances.
Except as set forth on SCHEDULE 5.5, the Purchased Assets constitute all of the
assets, properties, rights, and interests (including, without limitation, real
property and tangible and intangible property) necessary for the conduct of the
Business as it is currently being conducted.
5.6 LEASES.
(a) SCHEDULE 5.6 lists, as of the date of this Agreement, all
real property leases under which such Seller is a lessee or lessor and which (i)
are to be transferred and assigned to the Buyer on the Closing Date and (ii)
relate to the Business or the Purchased Assets. Except as set forth in SCHEDULE
5.6, all such leases are valid, binding and enforceable in accordance with their
terms, and are in full force and effect. All copies of the leases set forth on
SCHEDULE 5.6 are true, correct, and complete and include any and all
modifications thereof. There is not under any leases, except in relation to the
Chapter 11 Case or as disclosed on SCHEDULE 5.6 (A) any material default (or, to
the knowledge of such Seller, any claimed material defaults by such Seller) or
event which with notice or lapse of time, or both, would constitute a default by
such Seller which remains uncured), or (B) to the knowledge of such Seller, any
existing material default by any other party to any of the leases or any event
which with notice or lapse of time, or both, would constitute a default by any
other party to any of the leases.
(b) All of the Real Estate is free from any use or occupancy
restrictions, except those imposed by applicable zoning laws, ordinances, and
regulations, and from all special taxes or assessments and as provided in the
Assumed Agreements. No assessment for public improvement
20
or otherwise which is due from such Seller and remains unpaid has been made
against the Real Estate other than the Permitted Encumbrances and such Seller,
to such Seller's knowledge, is not aware of any currently proposed or pending
assessment for public improvements or otherwise. No options have been granted to
others to purchase, lease, or otherwise acquire any interest in such Seller's
Owned Real Estate. To the knowledge of the Seller, there exists no conflict or
dispute with any regulatory authority or other person relating to any Real
Estate or the activities thereon. To the knowledge of the Seller, all buildings,
structures and improvements on the Owned Real Estate are located within the lot
lines (and within the mandatory set-backs from such lot lines established by
zoning ordinance or otherwise) and not over areas subject to easements or rights
of way.
(c) To the knowledge of such Seller, the present use of and
buildings, structures, and improvements on the Real Estate are in conformity
with all applicable laws, rules, regulations, and ordinances, including, without
limitation, all applicable zoning laws, ordinances, regulations and with all
registered restrictions of record, and such Seller has no knowledge of any
proposed change therein that would affect any of the Real Estate or its use and
such Seller has not received any notice of violation thereof.
(11) To the knowledge of such Seller, all requisite
certificates of occupancy and other permits or approvals required with respect
to the buildings, structures, and improvements on any of the Real Estate, and
the occupancy and use thereof have been obtained and are currently in effect.
There are no expropriation or condemnation proceedings pending against the Real
Estate and, to such Sellers' knowledge, there are no expropriation or
condemnation proceedings threatened or proposed against the Real Estate.
(12) To such Seller's knowledge, the plumbing and heating,
electrical and air conditioning systems, elevator systems and other mechanical
systems and equipment at the Real Estate are in working order and repair, except
for ordinary wear and tear.
5.7 ENVIRONMENTAL MATTERS.
(a) Except as set forth in SCHEDULE 5.7(a):
(i) such Seller has complied and is in compliance in
all material respects with all applicable Environmental Laws;
(ii) such Seller has obtained all material permits,
licenses, registrations, exemptions, certificates of approval, and other
authorizations which are required under applicable Environmental Laws for the
ownership, use, and operation of the Purchased Assets and the Business (the
"ENVIRONMENTAL PERMITS"); all such Environmental Permits are in effect; no
appeal nor any other action is pending or to such Seller's knowledge, threatened
to revoke any such Environmental Permit; such Seller has applied in a timely
fashion for any renewal for such Environmental Permits
21
that have expired; and such Seller is in compliance in all material respects
with all terms and conditions of all such Environmental Permits;
(iii) there have been no Releases (as hereinafter defined),
discharges, or spills of Contaminants (as hereinafter defined) by such Seller
or, to the knowledge of such Seller, by others, individually or in the
aggregate, in excess of any amount permitted by any Environmental Laws at such
time at, on, under or from the Real Estate, or, to the knowledge of such Seller,
migrating to the Real Estate from adjacent properties in either case that are
reasonably likely to subject such Seller or Buyer to any material liability
under applicable Environmental Laws, including, but not limited to, material
liability for corrective action, restoration, remediation, compliance actions,
response costs, natural resource damages, or tort damages;
(iv) neither such Seller nor, to the knowledge of such Seller,
any of such Seller's predecessors have disposed of, transported, recycled,
treated, handled, generated, or stored any Contaminants at any off-site
location, or arranged for the same, in a manner that will or would reasonably be
expected to result in any material liability to such Seller or Buyer under
applicable Environmental Laws, including, but not limited to, material liability
for corrective action, restoration, remediation, compliance actions, response
costs, natural resource damages, or tort damages;
(v) there are no litigation, investigations, inquiries,
rulings, orders, inspections, or citations pending, or to the knowledge of such
Seller, threatened or contemplated by any Governmental Entity or other Persons
with respect to the Purchased Assets, such Seller, or, to the knowledge of such
Seller, prior owners, lessees, licensees, or other occupants, that allege that
such Seller or any predecessors are in violation or otherwise would reasonably
be expected to have material liability pursuant to Environmental Laws or in
connection with Contaminants; and
(vi) none of the Purchased Assets has been or is being used by
such Seller, or to the knowledge of such Seller, prior owners, lessees,
licensees, or other occupants as a landfill or waste disposal site.
(b) AFDI has heretofore delivered to Buyer true and complete
copies of all material environmental studies, audits, or assessments, which, to
AFDI's knowledge, have been conducted or caused to be conducted whether
internally or externally, or studies, audits, or assessments of occupational
health and safety which have been made in the last five (5) years (and which are
in AFDI's possession or control) relating to the Real Estate.
(c) The representations and warranties made in this Section
5.7 are the Sellers' exclusive representations and warranties relating to
environmental matters.
22
5.8 LABOR MATTERS.
(a) SCHEDULE 5.8 lists all employees of such Seller, who on the date
hereof perform services with respect to the Purchased Assets on a full-time or
part-time basis (the "PURCHASED ASSET EMPLOYEES"), together with particulars of
their salary, bonuses, commissions, position, location of employment, and length
of service with such Seller, and if such employee is absent on workers'
compensation or insurance, sick leave, short term disability or long term
disability, pregnancy, maternity, parental, family responsibility, bereavement,
education and training, or adoption leave, or any other approved or statutory
leave of absence or layoff. SCHEDULE 5.8(a) indicates whether such employee's
employment is subject to a written agreement.
(13) Except to the extent set forth in SCHEDULE 5.8:
(i) such Seller is not a party to or bound by any
collective bargaining agreement covering Purchased Asset Employees with any
labor or trade union, labor organization, local or foreign organization or
association of employees, or local or foreign branch of a national or
international organization or association of employees that has as one of its
purposes the regulation of relations between employers and employees through
collective bargaining, or any other representative of employees ("UNION");
(ii) no Union claims to represent or has been
certified as bargaining agent for any Purchased Asset Employees;
(iii) such Seller has no knowledge of any current
Union organizing activities among the Purchased Asset Employees. There are no
outstanding applications for certification or any other proceedings in which a
Union is claiming or seeking exclusive authority to bargain collectively for any
Purchased Asset Employees, nor, to the knowledge of Seller, have there been any
such activities within the past twelve (12) months;
(iv) there is no unfair labor practice charge or
complaint with respect to the Purchased Asset Employees outstanding, pending, or
to the knowledge of the Seller, threatened against or affecting such Seller,
before the National Labor Relations Board or any similar state or foreign
agency;
(v) there is no material grievance arising out of any
collective bargaining agreement or other grievance procedure applying to any
Purchased Asset Employees;
(vi) there is no Labor Disturbance (as hereinafter
defined) outstanding, pending, or, to the knowledge of such Seller, threatened
against, or affecting the Business or the Purchased Assets and there has not
been any such Labor Disturbance during the past twelve (12) months;
(vii) neither such Seller nor any person acting on
behalf of or as a bargaining agent for such Seller, has received or sent notice
to commence collective bargaining for
23
the purposes of bargaining a collective bargaining agreement or revision or
renewal of same, nor agreed to conduct collective bargaining with any Union on
behalf of any Purchased Asset Employees;
(viii) there are no written personnel policies,
rules, or procedures applicable to Purchased Asset Employees, other than those
set forth in SCHEDULE 5.8, true and correct copies of which have heretofore been
delivered or made available to Buyer;
(ix) such Seller has at all times been in material
compliance with all obligations under any Employment Laws applicable to the
Purchased Asset Employees. Such Seller is not liable for any material
assessments, penalties or other sums for failure to comply with any Employment
Laws with respect to any Purchased Asset Employees;
(x) such Seller has not received notice of the intent
of any federal, state, local, or foreign agency responsible for the enforcement
of any Employment Laws to conduct an investigation with respect to or relating
to the Purchased Asset Employees and, to such Seller's knowledge, no such
investigation is in progress;
(xi) there are no claims outstanding, pending,
affecting, or, to the knowledge of such Seller, threatened against the Seller
with respect to any Purchased Asset Employees before any other similar state or
federal agency responsible for the prevention of discriminatory or unlawful
employment practices;
(xii) with respect to the Purchased Assets, there are
no Claims outstanding, pending, affecting, or, to the knowledge of such Seller,
threatened against such Seller, in any forum, by or on behalf of any present or
former employee of such Seller, any applicant for employment, or classes of the
foregoing, alleging breach of any actual, express or implied contract of
employment, any Employment Laws, wrongful dismissal, or any other
discriminatory, wrongful, or tortious conduct in connection with the employment
relationship;
(xiii) there are no outstanding loans or advances
made or granted by such Seller to any Transferred Employee (as hereinafter
defined), except for normal travel advances or in the ordinary course consistent
with practice, all of which do not exceed $10,000;
(xv) the consummation of the transactions
contemplated by this Agreement and the other agreements contemplated herein will
not entitle any Transferred Employee to pay in lieu of notice of termination,
termination pay, severance pay, retirement allowance, retirement benefit, or any
other payment under any written or oral agreement with such Seller;
(xvi) to the knowledge of such Seller, no current or
former Purchased Asset Employees have suffered any illness, disease, injury, or
death by reason of having handled or becoming exposed to or otherwise having
been harmed by any Contaminants or any substances
24
which are designated substances, hazardous materials, or regulated biological
chemical or physical agents pursuant to the Occupational Safety and Health Act
or any regulations thereunder which may at any time up to the date hereof have
been present at the workplace in the course of their employment by such Seller;
(xvii) all obligations of such Seller, whether
arising by operation of law, contract, past custom, or otherwise, for wages,
salaries, remuneration, compensation bonuses, commissions, vacation and holiday
pay, sick pay or leave, termination or severance pay or pay in lieu of notice of
termination, and any other form of compensation payable to any current or former
persons employed in the Business in respect of the services rendered by any of
them have been paid or accrued; and
(xviii) such Seller has withheld all amounts required
by law to be withheld from payments made by it with respect to all current and
former Purchased Asset Employees, including, without limitation, those with
respect to income tax withholdings and employment or employment insurance
premiums, and have remitted such amounts to the appropriate authorities within
the times required by law.
(14) Except as set forth in SCHEDULE 5.8 there are no written
employment agreements or contracts, services, agency or consulting agreements,
retention agreements, bonus arrangements, or termination or severance agreements
with any Transferred Employee or any independent contractors or outside vendors.
Except as provided for by general principles of applicable law, to the knowledge
of such Seller there are no oral employment agreements or contracts with any
Transferred Employee which are not terminable by such Seller upon providing that
period of notice (or at such Sellers' option, pay in lieu of notice) required by
the applicable labor or employment standards legislation or by providing
reasonable notice under common law.
5.9 ERISA; BENEFIT PLANS. With respect to each employee benefit plan
(as such term is defined in section 3(3) of ERISA) and each other material
employee benefit plan, program or arrangement maintained, contributed to, or
required to be contributed to by such Seller or any ERISA Affiliate as of the
date hereof on account of current or former employees of the Business or with
respect to which such Seller or any ERISA Affiliate, has any liability (each, a
"BENEFIT PLAN"), except as disclosed in SCHEDULE 5.9:
(a) Each Benefit Plan that is intended to be qualified under
section 401(a) of the Code has received a determination from the Internal
Revenue Service that such Benefit Plan is so qualified, and to the knowledge of
such Seller nothing has occurred since the date of such determination that would
adversely affect the qualified status of such Benefit Plan.
(15) No Benefit Plan is or has been subject to Section 412 of
the Code or Section 302 of ERISA. Such Seller has no obligation to contribute
to, has not ever contributed to and does not have any other liability (now or
that may arise) under or with respect to any
25
multiemployer plan (as such term is defined in section 3(37) of ERISA) with
respect to any current or former employee of the Business. Neither such Seller
nor any ERISA Affiliate has any liability or potential liability under Title IV
of ERISA or to the Pension Benefit Guaranty Corporation that would become a
liability of the Buyer.
(16) Such Seller has no obligation to provide retiree medical
or life insurance benefits to any currently retired or future retired or former
employee of the Business other than pursuant to COBRA.
(17) Neither such Seller nor any ERISA Affiliate maintains a
plan or other arrangement which would be reasonably expected to result in
liability to Buyer for the payment to any employee or former employee of Seller
or any ERISA Affiliate of any money or other property or rights or accelerate or
provide any other rights or benefits to any employee or former employee of such
Seller or any ERISA Affiliate as a result of the transactions contemplated by
this Agreement, whether or not such payment would constitute a parachute payment
within the meaning of Section 280G of the Code.
(18) For each Benefit Plan which is a multiemployer plan (as
defined in Section 3(37) of ERISA) (which includes each welfare benefit plan
which, pursuant to its trust agreement, contract, or otherwise, imposes any
post-withdrawal liability or contribution obligations upon employers withdrawing
from such plan) to which such Seller or any ERISA Affiliate has or has had, an
obligation to contribute, such Seller has provided Buyer with a copy of the most
recent letter from the administrator of the multiemployer plan (as defined in
Section 3(37) of ERISA) setting forth the estimated withdrawal liability which
would be imposed by the Benefit Plan if the Business, such Seller or any ERISA
Affiliate were to withdraw from such Benefit Plan in a complete withdrawal, as
of the most recently-available information, and the factors used to determine
such estimate.
(b) Neither the Business, such Seller, nor any ERISA
Affiliate, (i) has incurred a withdrawal (either complete or partial) (as
defined in Section 4203 or 4205 of ERISA) from any multiemployer plan (as
defined in Section 3(37) of ERISA), or (ii) has incurred a decline in
contributions to any multiemployer plan (as defined in Section 4203 or 4205 of
ERISA) such that, if the current rate of contributions continues, a
seventy-percent decline in contributions (as defined in Section 4205 of ERISA)
will occur within the next three plan years.
5.10 CERTAIN CONTRACTS AND ARRANGEMENTS.
(a) Except for contracts, agreements, personal property
leases, commitments, understandings or instruments which (i) are listed in
SCHEDULE 5.6 or SCHEDULE 5.10, or (ii) have been entered into in the ordinary
course of business and do not involve obligations in excess of $25,000
individually, such Seller is not, as of the date hereof, a party to any written
contract, agreement, personal property lease, commitment, understanding or
instrument which is material to the Business
26
or the Purchased Assets. Except as disclosed in SCHEDULE 5.10, each Assumed
Agreement constitutes a valid and binding obligation of such Seller and
constitutes a valid and binding obligation of the other parties thereto, is in
full force and effect, and may be transferred to the Buyer pursuant to this
Agreement and will continue in full force and effect thereafter, in each case
without breaching the terms thereof or resulting in the forfeiture or impairment
of any rights thereunder. Except as set forth in SCHEDULE 5.10, no Assumed
Agreement has been modified or otherwise amended or, other than pursuant to its
terms, terminated, extended or renewed.
(b) Such Seller is not in material breach of, or default
under, any Assumed Agreement, except for any default or defaults of the type
described in Section 365(b)(2) of the Bankruptcy Code. True and correct copies
of the Assumed Agreements have been delivered to the Buyer, including all
amendments or modifications thereto. SCHEDULE 5.10 contains a description of all
material oral amendments or modifications of all of the Assumed Agreements which
Assumed Agreements involve aggregate obligations on the part of the Seller in
excess of $100,000.
(19) Except as disclosed in SCHEDULE 5.10, there is no
contract, agreement or other arrangement granting any Person any preferential
right to purchase any of the Purchased Assets.
(20) Except as disclosed in SCHEDULE 5.10, to such Sellers'
knowledge, no other party to any Assumed Agreement is in material breach thereof
or material default thereunder. Such Seller has not received any notice, nor
does such Seller otherwise have knowledge, that any party to any Assumed
Agreement intends to cancel, terminate or refuse to renew such Assumed Agreement
or to exercise or decline to exercise any option or right thereunder.
5.11 LEGAL PROCEEDINGS AND JUDGMENTS. Except as set forth in SCHEDULE
5.11, there are no claims, actions, proceedings or investigations pending or
threatened against or relating to such Seller or any of the Purchased Assets
before any court or other Governmental Entity acting in an adjudicative
capacity. Except as set forth in SCHEDULE 5.11, such Seller is not subject to
any outstanding judgment, rule, order, writ, injunction or decree of any court
or other Governmental Entity.
5.12 PERMITS. Such Seller has all material permits, licenses,
franchises and other governmental authorizations, consents and approvals, other
than with respect to Environmental Laws which are addressed in Section 5.7
(collectively, "PERMITS") necessary for the operation of the Business as
presently conducted. SCHEDULE 5.12 sets forth a list of all Permits and
Environmental Permits held by such Seller as of the date hereof and necessary
for the operation of the Business as presently conducted (true and correct
copies of which have been delivered to the Buyer).
5.13 COMPLIANCE WITH LAWS. Such Seller is in compliance with all
Permits, laws, statutes, orders, rules, regulations, ordinances, or judgments of
any Governmental Entity applicable to it.
27
5.14 TAXES. Except as disclosed in SCHEDULE 5.14:
(21) such Seller and each of such Seller's Affiliates have
duly and timely filed all Tax Returns with respect to the Business and/or the
Purchased Assets that they were required to file, and have paid all Taxes shown
thereon as owing and all other Taxes otherwise due (including, without
limitation, those relating to income, profits, franchise, sales, use,
occupation, property, excise, ad valorem and payroll). All Tax Returns required
to be filed by such Seller with respect to the Business and/or the Purchased
Assets are true, correct, and complete. All monies required to be withheld by
such Seller and each of such Seller's Affiliates (including from employees of
the Business for income Taxes and social security and other payroll Taxes) with
respect to the Business and/or the Purchased Assets have been collected or
withheld, and either paid to the respective taxing authorities, set aside in
accounts for such purpose, or accrued, reserved against and entered upon the
books of the Business. There are no liens with respect to Taxes upon the
Purchased Assets, except for statutory liens with respect to Taxes not yet due.
No tax deficiencies have been determined nor proposed tax assessments charged
relating to the Business and/or the Purchased Assets. No Internal Revenue
Service or other governmental taxing authority audit relating to the Business or
the Purchased Assets is pending or, to such Seller's knowledge, threatened, and
the results of any completed audits are properly reflected in the Seller
Reports. Neither such Seller nor any of such Seller's Affiliates have waived,
extended or been requested to waive or extend any statute of limitations in
respect of Taxes associated with the Business and/or the Purchased Assets.
(22) None of the Purchased Assets is (i) an asset or property
that is or will be required to be treated as being owned by any other person
pursuant to the so-called "safe harbor lease" provisions of former Section
168(f)(8) of the Internal Revenue Code of 1986, as amended and in effect
immediately before the enactment of the Tax Reform Act of 1986, or (ii)
tax-exempt use property within the meaning of Section 168(h)(1) of the Code.
(23) Such Seller is not a person other than a United States
person within the meaning of the Code.
(24) Such Seller, with respect to the Business or the
Purchased Assets, has not made any payments, is not obligated to make any
payments and is not a party to any agreement that could obligate it to make any
payments, that will not be fully deductible under Sections 162(m) or 280G of the
Code (or any similar provision of foreign, state or local law).
5.15 PERSONAL PROPERTY. Except as set forth in SCHEDULE 5.15, all of
the machinery, equipment, vehicles, and other tangible personal property which
constitute personal property and are a part of the Purchased Assets, or which
are leased by such Seller pursuant to an Assumed Agreement, are (i) in the
exclusive possession and control of such Seller; (ii) in compliance with the
material terms and conditions of all Assumed Agreements relating thereto; (iii)
in good operating condition and repair for assets of their type, usage, and age,
free from any material defects, and are
28
usable in the ordinary course of business, except for ordinary wear and tear;
and (iv) are operated in all material respects in conformity with all applicable
laws, rules, regulations, and ordinances, including, without limitation, all
applicable building and zoning laws, ordinances, and regulations.
5.16 INTELLECTUAL PROPERTY.
(a) SCHEDULE 5.16 sets forth a true and complete list of all
(i) patents and patent applications, registered trademarks and trademark
applications, registered copyrights and copyright applications and domain names
included in the Seller Owned Intellectual Property; (ii) in summary form, Seller
Software; (iii) material Seller Licenses, other than licenses of commercial
off-the-shelf, shrink-wrap or click-wrap software; and (iv) in summary form,
other material Intellectual Property included in the Seller Owned Intellectual
Property. Except as set forth in SCHEDULE 5.16, the Seller has not granted any
license or other right to any third party with respect to the material Seller
Owned Intellectual Property or the material Seller Licensed Intellectual
Property, other than licenses of Seller Software to its customers for use in the
ordinary course of business.
(25) Except as disclosed in SCHEDULE 5.16, such Seller is the
owner of the entire and unencumbered right, title, and interest in and to each
material item of the Seller Owned Intellectual Property, subject only to the
terms of the Seller Licenses. Such Seller is entitled to use the Seller Owned
Intellectual Property and the Seller Licensed Intellectual Property in the
operation of the Business as currently conducted in a manner consistent with
past practices. The material Seller Owned Intellectual Property and, to the
knowledge of such Seller, the material Seller Licensed Intellectual Property
have not been adjudged invalid or unenforceable in whole or part. The
consummation of the transactions contemplated by this Agreement and the other
agreements contemplated herein will not result in the termination or impairment
of any material Seller Owned Intellectual Property or material Seller Licensed
Intellectual Property.
(26) Except as disclosed in SCHEDULE 5.16, (i) the operation
of the Business as currently conducted and the use of the Seller Owned
Intellectual Property and the Seller Licensed Intellectual Property in
connection therewith does not conflict with, infringe, misappropriate or
otherwise violate the Intellectual Property of any third party; (ii) no actions
have been asserted, are pending or, to the knowledge of such Seller, are
threatened against such Seller (A) alleging any of the foregoing, (B) based upon
or challenging or seeking to deny or restrict the use by such Seller of any of
the Seller Owned Intellectual Property or the Seller Licensed Intellectual
Property, or (C) alleging that the Seller Licenses are in conflict with the
terms of any license or other agreement; and (iii) to the knowledge of such
Seller, no third party is engaging in any activity that infringes,
misappropriates or otherwise violates the Seller Owned Intellectual Property or
the Seller Licensed Intellectual Property.
(27) Except as disclosed in SCHEDULE 5.16, such Seller has
delivered to the Buyer correct and complete copies of all the material
agreements included in the Seller Licenses,
29
other than licenses of commercial off-the-shelf, shrink-wrap or click-wrap
software. With respect to each such agreement:
(i) such agreement is valid and binding and in full
force and effect and represents the entire agreement between the respective
parties with respect to the subject matter of such agreement;
(ii) such agreement will not cease to be valid and
binding and in full force and effect on terms identical to those currently in
effect as a result of the consummation of the transactions contemplated by this
Agreement and the other agreements contemplated herein, nor will the
consummation of the transactions contemplated by this Agreement and the other
agreements contemplated herein constitute a breach or default under such
agreement or otherwise give the other party to such agreement a right to
terminate, materially modify or accelerate such agreement;
(iii) such Seller has not (A) received any notice of
termination or cancellation under such agreement, (B) received any notice of
breach or default under such agreement, which breach has not been cured, or (C)
granted to any other third party any rights, adverse or otherwise, under such
agreement that would constitute a breach of such agreement; and
(iv) such Seller is not and, to the knowledge of such
Seller, no other party to such agreement is in breach or default thereof in any
material respect, and no event has occurred that, with notice or lapse of time,
would constitute such a breach or default or permit termination, modification or
acceleration under such agreement.
(28) Except as would not reasonably be expected to have a
Material Adverse Effect, (i) such Seller has taken steps in accordance with
normal industry practice to maintain the confidentiality of its trade secrets
and other confidential Intellectual Property; and (ii) to the knowledge of such
Seller, (A) there has been no misappropriation of any trade secrets or other
confidential Intellectual Property of such Seller by any person, (B) no
employee, independent contractor or agent of such Seller has misappropriated any
trade secrets of any other person in the course of such performance as an
employee, independent contractor or agent, and (C) no employee, independent
contractor or agent of such Seller is in default or breach of any term of any
employment agreement, non-disclosure agreement, assignment of inventions
agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of Intellectual Property.
(29) Except as would not reasonably be expected to have a
Material Adverse Effect, all Seller Systems are Year 2000 Compliant. For
purposes hereof, "SELLER SYSTEMS" shall mean all computer, hardware, Software,
systems, and equipment (including embedded microcontrollers in non-computer
equipment) that are embedded within or required to operate the equipment and
current products of the Seller, or are material or necessary to carry on the
Business as currently conducted. For purposes hereof, "YEAR 2000 COMPLIANT"
means that the Seller Systems
30
provide uninterrupted millennium functionality in that the Seller Systems will
record, store, process and present calendar dates falling in year 2000
(including, without limitation, February 29, 2000), in the same manner and with
the same accuracy and functionality as the Seller Systems record, store,
process, and present calendar dates falling on or before December 31, 1999.
5.17 AFFILIATE RELATIONS. Except as set forth in SCHEDULE 5.17, no
officer, director, stockholder, Affiliate, or associate of such Seller has any
direct, indirect, or beneficial ownership of any real or personal property which
is in any way involved with or related to the conduct of the Business or the
Purchased Assets to be conveyed pursuant to the terms of this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As an inducement to Sellers to enter this Agreement and to consummate
the transactions contemplated hereby, the Buyer represents and warrants to the
Sellers as follows:
6.1 ORGANIZATION. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as is now being conducted.
6.2 AUTHORITY RELATIVE TO THIS AGREEMENT. The Buyer has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of the Buyer and except for the
approval of the Board of Directors of Wal-Mart Stores, Inc. (which approval the
Buyer has obtained prior to the date hereof) no other corporate proceedings on
the part of the Buyer are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Buyer, and assuming that this Agreement
constitutes a valid and binding agreement of the Sellers, constitutes a valid
and binding agreement of the Buyer, enforceable against the Buyer in accordance
with its terms, except that such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally or general principles of equity.
6.3 CONSENTS AND APPROVALS; NO VIOLATION. Except as set forth in
SCHEDULE 6.3, and other than obtaining the governmental consents and approvals
required to be obtained pursuant to Section 8.2(c), neither the execution and
delivery of this Agreement by the Buyer nor the purchase by the Buyer of the
Purchased Assets and the assumption by the Buyer of the Assumed Obligations
pursuant to this Agreement will (i) conflict with or result in any breach of any
provision of the Articles of Incorporation or By-Laws (or other similar
governing documents) of the Buyer, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any
31
Governmental Entity (the "BUYER REQUIRED REGULATORY APPROVALS"), except for such
consents, approvals, orders or authorizations, licenses or permits, filings or
notices the failure of which to obtain would not have a Buyer Material Adverse
Effect, (iii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any material note, bond, mortgage, indenture, agreement, lease or other
instrument or obligation to which the Buyer is a party or by which any of their
respective assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained, and except for such breaches or defaults that would
not have a material adverse effect on Buyer's ability to consummate the
transactions contemplated hereby (a "BUYER MATERIAL ADVERSE EFFECT ").
6.4 AVAILABILITY OF FUNDS. The Buyer will have sufficient funds
available to it on the Closing Date to pay the Purchase Price.
ARTICLE VII
COVENANTS OF THE PARTIES
7.1 CONDUCT OF BUSINESS. Except as described in SCHEDULE 7.1 and except
as required by the Bankruptcy Court or contemplated by the Transition Funding
Agreement, during the period from the date of this Agreement to the Closing
Date, the Sellers will operate the Purchased Assets and the Business in the
usual, regular and ordinary course and shall use all commercially reasonable
efforts to preserve intact the Business and the Purchased Assets (taking into
account each of the Seller's current status as a filer under Chapter 11 of the
Bankruptcy Code), and endeavor to preserve the goodwill and relationships with
customers, suppliers and others having business dealings with the Business.
Without limiting the generality of the foregoing, and, except as contemplated in
this Agreement or as described in SCHEDULE 7.1, prior to the Closing Date,
without the prior consent of the Buyer (which consent shall not be unreasonably
withheld), no Seller shall with respect to the Purchased Assets or the Business:
(i) except for Permitted Encumbrances, create, incur,
assume or suffer to exist any Encumbrance upon any of the Purchased Assets;
(1) assume, guarantee, endorse or otherwise become directly
liable or responsible (whether directly or indirectly, contingently or
otherwise) for the obligations of any Person;
(ii) make any material change in the levels of
inventory customarily maintained by such Seller with respect to the Business, or
allow any material change in the level of inventory held by Tricon for use in
the Business;
(iii) sell, lease (as lessor), transfer or otherwise
dispose of, any of the Purchased Assets, other than in the ordinary course of
business;
32
(2) other than in the ordinary course of business and except
as provided in Subsection 7.1(xiii), terminate, extend, renew or otherwise amend
any of the Assumed Agreements or waive any material default by, or release,
settle or compromise any material claim against, any other party thereto;
(3) xxxxx xxxxxxxxx or termination pay to any present or
former director, officer or employee which would be the responsibility of the
Buyer;
(4) enter into any collective bargaining agreement;
(5) establish or increase any bonus, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including the
granting of stock options, stock appreciation rights, performance awards or
restricted stock awards), stock purchase or other employee benefit plan, or
otherwise increase the compensation payable to or to become payable to any
officers, directors or employees of such Seller, except (A) in the case of
salary, in the ordinary course of business, (B) in the case of bonuses, any
retention bonus for which such Seller is currently seeking (or prior to Closing
begins to seek) Bankruptcy Court approval or (C) in any other case described
above as may be required by applicable law or applicable employment agreement in
existence as of the date hereof;
(6) assign or reject any Assumed Agreement;
(iv) hire, or enter into any employment agreement
with, any employee, except for any employee who receives a salary not in excess
of $70,000;
(v) fail to take any action or make any payment
necessary to prevent the loss or abandonment of any material Seller Owned
Intellectual Property or Seller Licenses, and shall not authorize any activities
or consent to any matters that limit or modify rights in the same;
(vi) enter into any written or oral contract,
agreement, commitment or arrangement with respect to any of the transactions set
forth in the foregoing paragraphs (i) through (xi); or
(vii) terminate, modify, extend, renew or otherwise
amend, or permit pursuant to its terms to be amended, terminated, extended or
renewed, any Assumed Agreement; PROVIDED, that, if such action is taken with the
written consent of the Buyer, then all of the benefits and obligations arising
from that action will be apportioned equitably between such Seller and Buyer
such that the benefits and obligations attributable to Buyer and such Seller
relate to the period of time that the Business is owned by Buyer or such Seller
during the time that such Assumed Agreement, as modified, extended, renewed or
otherwise amended, is in effect.
33
7.2 ACCESS TO INFORMATION. (a) Between the date of this Agreement and
the Closing Date, each Seller will, during ordinary business hours and upon
reasonable notice and at the Buyer's request (i) give the Buyer and the Buyer
Representatives reasonable access to all books, records, plants, offices and
other facilities and properties constituting the Business or the Purchased
Assets; (ii) permit the Buyer to make such reasonable inspections thereof as the
Buyer may reasonably request; (iii) furnish the Buyer with such financial and
operating data and other information with respect to the Business or the
Purchased Assets; (iv) furnish the Buyer a copy of each material report,
schedule or other document filed or received by such Seller with respect to the
Business or the Purchased Assets; PROVIDED, HOWEVER, that (A) any such
investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the Business, (B) such Seller shall not be
required to take any action which would constitute a waiver of the
attorney-client privilege and (C) such Seller need not supply the Buyer with any
information which such Seller is under a legal obligation not to supply. Seller
agrees that the Buyer shall have the right to attempt to obtain from the
landlords identified on SCHEDULE 7.2(a) the Landlord Estoppel Certificate
attached hereto as Exhibit O (the "LANDLORD ESTOPPEL CERTIFICATE").
(b) The Buyer and AFDI acknowledge that each is subject to the
Confidentiality Agreement. All information furnished to or obtained by the Buyer
and the Buyer Representatives pursuant to this Section 7.2 shall be subject to
the provisions of the Confidentiality Agreement and shall be treated as
Materials or Highly Confidential Materials (as the case may be) for all purposes
of the Confidentiality Agreement.
(c) For a period of twenty-four (24) months after the Closing
Date (the "TRANSITION PERIOD"), each party and their representatives shall have
reasonable access to, and each shall have the right to photocopy, all of the
books and records relating to the Business or the Purchased Assets, including
all Transferring Employee Records or other personnel and medical records
required by law, legal process or subpoena, in the possession of the other party
to the extent that such access may reasonably be required by such party in
connection with the Assumed Obligations or the Excluded Obligations, or other
matters relating to or affected by the operation of the Business and the
Purchased Assets. During the Transition Period, and only to the extent that
Buyer's operation of the Business is not interrupted in any material respect,
the Buyer agrees to provide the Sellers and any Seller Representatives, during
ordinary business hours and upon reasonable notice and at any Seller's request,
with reasonable access to employees of the Buyer for purposes of winding down
the estates of the Sellers. Such access shall be afforded by the party in
possession of such books and records upon receipt of reasonable advance notice
and during normal business hours; PROVIDED, HOWEVER, that (A) any such
investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of any party or its affiliates,
(B) no party shall be required to take any action which would constitute a
waiver of the attorney-client privilege and (C) no party need supply the other
party with any information which such party is under a legal obligation not to
supply. The party exercising this right of access shall be solely responsible
for any costs or expenses incurred by it pursuant to this Section 7.2(c). If the
party in possession of such books and records shall desire to dispose of any
such books and records
34
upon or prior to the expiration of such period, such party shall, prior to such
disposition, give the other party a reasonable opportunity at such other party's
expense, to segregate and remove such books and records as such other party may
select.
7.3 EXPENSES; TRANSITION FUNDING AGREEMENT. Except to the extent
specifically provided herein, whether or not the transactions contemplated
hereby are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by the party
incurring such costs and expenses. Notwithstanding the foregoing, Buyer and AFDI
agree that as soon as practicable after the date hereof (but in no event later
than the date on which the Bid Procedures Order is entered), the Buyer and AFDI
shall enter into a Transition Funding Agreement in form and substance
substantially the same as that attached hereto as EXHIBIT M.
7.4 FURTHER ASSURANCES. (a) Subject to the terms and conditions of this
Agreement, each of the parties hereto will use commercially reasonable efforts
(in the case of each Seller, taking into account its status as a filer under
Chapter 11 of the Bankruptcy Code) to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the sale of the Business and the Purchased Assets
pursuant to this Agreement, including, without limitation, using commercially
reasonable efforts to ensure satisfaction of the conditions precedent to each
party's obligations hereunder. None of the parties hereto will, without prior
written consent of the other parties, take any action which would reasonably be
expected to prevent or materially impede, interfere with or delay the
transactions contemplated by this Agreement or the other agreements contemplated
herein. From time to time on or after the Closing Date, each Seller will, at its
own expense, execute and deliver such documents to the Buyer as the Buyer may
reasonably request in order to more effectively vest in the Buyer such Seller's
title to the Purchased Assets subject to Permitted Encumbrances and SCHEDULE
5.5. From time to time after the date hereof, the Buyer will, at its own
expense, execute and deliver such documents to the Seller as such Seller may
reasonably request in order to more effectively consummate the sale of the
Business and, at such Sellers' expense, the Purchased Assets and the assumption
of the Assumed Obligations pursuant to this Agreement and such Seller's
preparation of Tax Returns.
(b) In the event that any Purchased Asset shall not have been
conveyed to the Buyer at the Closing, each Seller shall, subject to Section
7.4(c), use commercially reasonable efforts (taking into account such Seller's
status as a filer under Chapter 11 of the Bankruptcy Code) to convey such asset
to the Buyer as promptly as is practicable after the Closing.
(c) Subject to the Bankruptcy Code and the terms set forth in
the Sale Order, to the extent that any Sellers' rights under any Assumed
Agreement may not be assigned without the consent of another Person, which
consent has not been obtained, this Agreement shall not constitute an agreement
to assign the same if an attempted assignment would constitute a breach thereof
or be unlawful and such Seller shall use its commercially reasonable efforts
(without being required to make any payment to any third party or to incur any
economic burden and taking into account such Sellers' status as a filer under
Chapter 11 of the Bankruptcy Code) to obtain any such required
35
consent(s) as promptly as possible, and the Buyer agrees to cooperate with such
Seller in its efforts to obtain any such consent (including the submission of
such financial or other information concerning the Buyer and the execution of
any assumption agreements or similar documents reasonably requested by a third
party) without being required to make any payment to any third party or to incur
any economic burden. If such consents are not obtained, each applicable Seller
shall at the Closing enter into such arrangements as Buyer may reasonably
request (taking into account such Seller's status as a filer under Chapter 11 of
the Bankruptcy Code) in order to fairly compensate Buyer for the loss of, or to
provide the Buyer the benefit of, any such Assumed Agreement.
7.5 PUBLIC STATEMENTS. Prior to the Closing Date, the parties shall
consult with each other prior to issuing any public announcement, statement or
other disclosure with respect to this Agreement or the transactions contemplated
hereby and shall not issue any such public announcement, statement or other
disclosure prior to such consultation, except as may be required by law or stock
exchange rules and except that the parties may make public announcements,
statements or other disclosures with respect to this Agreement and the
transactions contemplated hereby to the extent and under the circumstances in
which the parties are expressly permitted by the Confidentiality Agreement to
make disclosures of Materials.
7.6 CONSENTS AND APPROVALS. (a) As soon as is reasonably practicable
following the date of this Agreement, AFDI and the Buyer shall each file or
cause to be filed with the Federal Trade Commission and the United States
Department of Justice any notifications required to be filed under the HSR Act
and the rules and regulations promulgated thereunder with respect to the
transactions contemplated hereby. The parties shall consult with each other as
to the appropriate time of filing such notifications and shall use their
commercially reasonable best efforts to make such filings at the agreed upon
time, to respond promptly to any requests for additional information made by
either of such agencies, and to cause the waiting periods under the HSR Act to
terminate or expire at the earliest possible date after the date of filing.
(b) AFDI and the Buyer shall cooperate with each other and use
commercially reasonable efforts to (i) promptly prepare and file all necessary
documentation, (ii) effect all necessary applications, notices, petitions and
filings and execute all agreements and documents, (iii) obtain the transfer or
reissuance to the Buyer of all necessary Transferable Permits, consents,
approvals and authorizations of all Governmental Entities, including, but not
limited to, taking all structural corporate actions necessary to consummate the
transaction in a timely manner and (iv) obtain all necessary consents, approvals
and authorizations of all other parties, in the case of each of the foregoing
clauses (i), (ii) and (iii), necessary or advisable to consummate the
transactions contemplated by this Agreement (including, without limitation, the
Seller Required Regulatory Approvals and the Buyer Required Regulatory
Approvals) or required by the terms of any note, bond, mortgage, indenture, deed
of trust, license, franchise, permit, concession, contract, lease or other
instrument to which AFDI or the Buyer is a party or by which any of them is
bound. AFDI and the Buyer each shall have the right to review in advance all
characterizations of the information
36
relating to it or the transactions contemplated by this Agreement which appear
in any filing made in connection with the transactions contemplated hereby.
(c) AFDI and the Buyer shall cooperate with each other and
promptly prepare and file notifications with, and request Tax clearances from,
state and local taxing authorities in jurisdictions in which a portion of the
Purchase Price may be required to be withheld or in which the Buyer would
otherwise be liable for any Tax liabilities of AFDI pursuant to such state and
local Tax law.
7.7 FEES AND COMMISSIONS. Each of the Sellers and the Buyer will pay to
the others or otherwise discharge, and will indemnify and hold the others
harmless from and against, any and all claims or liabilities for all brokerage
fees, commissions and finder's fees incurred by reason of any action taken by
such party.
7.8 TAX MATTERS. The Buyer and the Sellers shall provide the other with
such assistance as may reasonably be requested by the other parties in
connection with the preparation of any Tax Return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each will retain and provide
the requesting party with any records or information which may be relevant to
such return, audit or examination, proceedings or determination. Buyer and
Sellers will each provide the other parties with any final determination of any
such audit or examination, proceeding or determination that affects any amount
required to be shown on any Tax Return of the other party for any period.
Without limiting the generality of the foregoing, each of Buyer and each Seller
will retain, until the expiration of the applicable statutes of limitation
(including any extensions thereof) copies of all Tax Returns, supporting work
schedules and other records relating to Tax periods or portions thereof ending
on or prior to the Closing Date. Any information obtained pursuant to this
Section 7.8 or pursuant to any other Section hereof providing for the sharing of
information or review of any Tax Return or other schedule relating to Taxes
shall be kept confidential by the parties hereto.
7.9 SCHEDULES; SUPPLEMENTS TO SCHEDULES. The listing of any item on any
particular disclosure schedule shall be effective as a disclosure on any other
relevant disclosure schedule (whether or not specifically listed on such other
disclosure schedule) and therefore as an exception or modification of any
representation and warranty pertaining to such other disclosure schedule but
only if it is reasonably apparent that such disclosed item also pertains to the
subject matter relating to such other disclosure schedule, provided that the
applicable Seller made a good faith effort to accurately list on each schedule
any relevant items and to carefully cross-reference where appropriate. At all
times prior to and including the Closing Date, the applicable Seller shall
promptly provide Buyer with written notification of any event, occurrence, or
other information of any kind whatsoever which in any material way affects the
continued truth, correctness, or completeness of any representation or warranty
made by such Seller in this Agreement, the Schedules, the Appendices or the
Exhibits hereto, or would cause any of the conditions to any party's obligations
to consummate the transactions contemplated by this Agreement and the other
agreements
37
contemplated herein not to be fulfilled ("SCHEDULE UPDATES"). All such written
notifications shall specifically identify any and all of the representations or
warranties affected by the event, occurrence, or information that necessitated
the giving of such notice. Notwithstanding the foregoing, the Schedule Updates
shall not be given effect for the purpose of determining the truth and accuracy
of the representations and warranties contained herein or the satisfaction of
the conditions precedent to the obligations of Buyer contained in Article 8 of
this Agreement.
7.10 TRANSFERRED EMPLOYEES; SEVERANCE.
(a)(i) Immediately prior to the Closing Date, all employees of
any Seller relating to the Purchased Assets who are to be hired by Buyer shall
have their employment terminated by such Seller, and Buyer shall offer
employment with Buyer, conditional upon the Closing, to such of the
hourly/non-exempt and salaried exempt employees relating to the Purchased Assets
as determined by Buyer in its sole discretion, and listed on Appendix 7.10
(which shall be delivered by Buyer to Seller at least fifteen (15) days prior to
Closing Date). Prior to the Closing Date, letters which have been approved by
AFDI and its counsel will be distributed to such active employees inviting them
to apply for consideration for employment and said letters will generally
describe wages, benefits, and other terms and conditions offered by Buyer.
(ii) Employees relating to the Purchased Assets to whom Buyer
offers employment and who accept Buyer's offer of employment are hereinafter
referred to collectively as "Transferred Employees," and individually as a
"Transferred Employee."
(iii) Following the Closing Date, the Transferred Employees
shall become employees of Buyer immediately as of the date such Transferred
Employee accepts an offer of employment from Buyer. Nothing in this Agreement is
intended to, nor does it, confer any rights and privileges upon any person not a
party to this Agreement.
(b) (i) Subject to Section 9.1(a), and except in such cases as
are caused by the actions or omissions of the Buyer, each Seller shall be solely
responsible for all losses, and shall indemnify and hold harmless Buyer from all
losses to the extent arising from or attributable to periods on or before or
relating to any inquiries, investigations, claims, lawsuits, or actions of any
kind or any other proceedings which occur on or before the Closing Date or which
relate to or are incurred or attributable to periods on or before the Closing
Date (whether by any person or any Governmental Entity) (a "CLAIM" or "CLAIMS")
by or on behalf of any person who at or prior to the Closing are or were
employees of such Seller or any ERISA Affiliate, whether such losses are
asserted or paid before or after the Closing Date (but, for the avoidance of
doubt, only to the extent such losses are incurred on or attributable to periods
prior to the Closing Date), in respect of:
(A) any matter regarding wages, salaries, bonuses,
commissions, hours of work, vacations or vacation pay, holidays or holiday pay,
sick leave, personal days, pension or other employee benefits, worker's
compensation, income tax withholdings, employment or unemployment
38
insurance, employer health tax, human rights, pay equity, occupational health
and safety, employment standards, employment equity, or arising under any
Employment Laws provision generally (collectively, a "LABOR RELATIONS MATTER"),
to the extent incurred on or attributable to periods prior to the Closing Date;
(B) any strike, cessation of work, refusal to work or to
continue to work by employees in combination or in concert, or in accordance
with a common understanding, or a slow-down or other concerted activity on the
part of employees designed to restrict or limit output, or any lock-out, closing
of place of employment, suspension of work or refusal by such Seller to continue
to employ any employees, or any other disturbance or dispute involving employees
(collectively, "LABOR DISTURBANCE") which occurs on or is attributable to
periods prior to the Closing Date;
(C) severance pay and similar obligations (but not including
liabilities for accrued vacation days and accrued personal days with respect to
Transferred Employees, which liabilities the Buyer and the Sellers acknowledge
are Assumed Obligations) (collectively, "TERMINATION COSTS") relating to the
termination of any employee's employment, any break in service, or any other
event entitling someone to payment for such benefits (a "TERMINATION") in any
case arising from a Termination on or prior to the Closing Date; and
(D) severance, retention, termination, indemnity, and payments
in lieu of notice and related payments (including continuation of benefits),
payable to any Transferred Employee arising by reason of any termination or
constructive termination of such Transferred Employee by the Seller, including
any of the foregoing, based upon any Transferred Employee's service prior to and
after the Closing Date pursuant to any arrangement entered into by any Seller
(but for the avoidance of doubt, not including any of the foregoing based upon
any Transferred Employee's service prior to or after the Closing Date pursuant
to any agreements or arrangements made by Buyer with any Transferred Employee
prior to, on or after the Closing Date).
(ii) Without limiting the generality of the foregoing, each Seller
covenants and agrees that:
(A) in the event that Buyer incurs any losses with respect to
any Claims relating or attributable to any Employment Law or is required to
reinstate any current or former employee who made or filed such a Claim relating
to periods at or prior to the Closing Date, such Seller shall reimburse Buyer
for all losses associated with such Claims and the resolution thereof, whether
by settlement or adjudication, of same; and
(B) in the event that Buyer incurs any losses of any kind in
connection with any Labor Disturbance or Labor Relations Matter to the extent
relating or attributable to periods at or prior to the Closing Date regarding
any current or former employee of the Seller, Seller shall reimburse Buyer for
all losses of any kind associated with such Labor Disturbances or Labor
39
Relations Matter relating or attributable to periods at or prior to Closing and
the resolution of same, whether by settlement or adjudication, of same.
(c) Buyer covenants and agrees that, subject to the Closing,
it shall be solely responsible for and shall indemnify and hold harmless Seller
from:
(i) all liabilities, obligations, or costs with respect to
each Transferred Employee to the extent such liabilities, obligations, or costs
attributable to periods of employment after the Closing Date; and
(ii) except as set forth in Section 7.10(b)(i)(C) and (D)
above, all Termination Costs which are incurred after the Closing Date in
respect of any Transferred Employee.
(d) No assets or liabilities with respect to Transferred
Employees shall be transferred, as a result of this Agreement, from any of the
Benefit Plans applicable to employees in the Business to any plan established by
Buyer, and Seller shall retain all obligations to fund or otherwise provide
benefits accrued by Transferred Employees under such Benefit Plans for periods
on or prior to the Closing Date.
(e) Except as otherwise provided in this Agreement, each
Seller shall retain and remain fully responsible for, and Buyer shall not
assume, any liabilities and obligations of such Seller to the extent relating to
employee benefits attributable to periods on or prior to the Closing Date.
Without limiting the generality of the foregoing, Seller shall retain, and Buyer
shall not assume, obligations and liabilities with respect to any Benefit Plans
listed on SCHEDULE 5.9 and any agreements, arrangements, or contracts listed on
SCHEDULE 5.10 relating to the Transferred Employees, or with respect to any
other employee benefit plans, programs, or arrangements for any other present,
former, or retired employees of Seller, including, without limitation,
liabilities and obligations for retiree benefits.
(f) Nothing in this Agreement shall impair Buyer's right to
hire employees other than the Transferred Employees.
(g) After the Closing Date, each Transferred Employee shall
become eligible to be a participant in such employee benefit plans or
arrangements as may be provided by Buyer (such plans, programs, and
arrangements, the "BUYER PLANS") and for which such Transferred Employee is
eligible under the terms and conditions of such Buyer Plans. The Buyer Plans,
which are pension plans (as defined in Section 3(2) of ERISA), shall consider
Transferred Employees' service with the Seller prior to the Closing Date as
employment with the Buyer for purposes of eligibility and vesting, but not for
purposes of benefit accrual. In addition, the Buyer Plans which are "employee
welfare benefit plans" (as such term is defined in Section 3(1) of ERISA) shall
waive any limitations as to preexisting conditions to the extent required by the
Health Insurance and Portability and Accountability Act of 1996, as amended.
Buyer Plans which provide vacation, sick leave or paid
40
personal day benefits shall recognize the Transferred Employees' service with
the Seller determined as of the Closing Date for the purposes of determining
eligibility for and entitlement to such benefits. Except as otherwise provided
in this Agreement, Seller shall remain fully responsible for providing benefits
under any of its Benefit Plans, including benefits with respect to all claims
incurred, arising out of or attributable to events or circumstances to the
extent occurring on or before the Closing. Without limiting the generality of
the foregoing, with respect to any disability benefits, Seller shall remain
responsible for payment and shall indemnify Buyer for (i) any and all benefits
(regardless of whether payment is required to be made after the Closing) for any
individual other than a Transferred Employee, and (ii) any losses incurred by
Buyer arising out of Buyer's not employing any employee.
(h) Notwithstanding anything contained herein, Buyer shall not
be obligated to provide retiree health or other benefits to any retired employee
of Seller.
(30) Each Seller agrees to timely perform and discharge all
requirements under the WARN Act to the extent applicable and under applicable
state and local laws and regulations for the notification of its employees
arising from the sale of the Purchased Assets and the Business to the Buyer up
to and including the Closing Date for those employees who will become
Transferred Employees effective as of the Closing Date. After the Closing Date,
the Buyer shall be responsible for performing and discharging all requirements
under the WARN Act and under applicable state and local laws and regulations for
the notification of its employees with respect to the Purchased Assets and the
Business.
(31) Each Seller shall be responsible for all COBRA
obligations related to employees of Seller or any ERISA Affiliate who do not
become Transferred Employees, and with respect to Transferred Employees who
elect COBRA coverage under any Benefit Plans.
7.11 LITIGATION SUPPORT. In the event and for so long as any party is
actively contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or any of the other agreements
contemplated herein or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving any
Seller or the Purchased Assets, the other parties will reasonably cooperate with
the contesting or defending party and its counsel in the contest or defense,
make available its personnel, and provide such testimony and access to its books
and records as shall be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending party
(unless the contesting or defending party is entitled to indemnification
therefor under Section 9.1 hereof).
7.12 NOTIFICATION. Each Seller shall notify Buyer and keep it advised
of the occurrence of (i) any litigation or administrative proceeding pending or,
to the knowledge of such Seller, threatened against such Seller; (ii) any
material damage or destruction of any of the Purchased Assets; and (iii) any
Material Adverse Effect. Buyer shall notify AFDI and keep it advised of the
occurrences, of any
41
Buyer Material Adverse Change or any material adverse change in the financial
condition, result of operations, assets, business of Buyer.
7.13 SUBMISSION FOR BANKRUPTCY COURT APPROVAL.
(a) No later than two (2) Business Days after AFDI receives
satisfactory evidence that (i) the requisite number of franchisees have executed
and delivered the Pizza Hut/KFC Franchisee Agreement Amendment and, as
applicable, the Taco Xxxx Franchisee Agreement Amendment and (ii) Tricon has
executed and delivered the Tricon Extension, AFDI (on behalf of the Sellers)
shall file with the Bankruptcy Court a motion, supporting papers, notices, and a
proposed procedures order, substantially in the form of the order attached
hereto as EXHIBIT D, seeking the Bankruptcy Court's approval of this Agreement
(including, without limitation, the Termination Payment (as hereinafter
defined)), and observance and performance of such terms by Sellers and Buyer
during the pendency of the Chapter 11 Case (the "BID PROCEDURES ORDER"). The
parties hereto shall use their respective best efforts to obtain the entry of
the Bid Procedures Order within fourteen (14) days after the motion with respect
thereto is filed with the Bankruptcy Court. The Sellers' obligations pursuant to
this Section 7.13 shall not be affected by its receipt, on or prior to any
hearing before the Bankruptcy Court or the Bid Procedures Order, of an
Alternative Offer.
(1) As soon as is practicable after the date hereof and most
likely in connection with the filing of the Bid Procedures Order, AFDI (on
behalf of the Sellers) shall file with the Bankruptcy Court a motion, supporting
papers, notices, and a form of sale order, substantially in the form of the
order attached hereto as EXHIBIT E (or a Confirmation Order incorporating the
terms of such form of sale order) seeking the Bankruptcy Court's approval of
this Agreement, Sellers' performance under this Agreement, assumption and
assignment of the Assumed Agreements and Assumed Obligations, and Sellers'
retention of the Excluded Assets (the "SALE ORDER"). Subject to the provisions
of the Bid Procedures Order, AFDI shall attempt to obtain entry of the Sale
Order as soon as practicable, it being agreed and understood that AFDI shall
have the right in its sole discretion to extend the entry of the Sale Order
until November 15, 2000.
(2) AFDI shall provide Buyer with copies of all motions,
applications, and supporting papers prepared by AFDI (including forms of orders
and notices to interested parties) relating to Buyer or the transactions
contemplated by this Agreement and the other agreements contemplated herein
prior to the filing thereof in the Chapter 11 Case.
(3) AFDI shall give appropriate notice, and provide
appropriate opportunity for hearing, to all parties entitled thereto, of all
motions, orders, hearings, or other proceedings relating to this Agreement or
the transactions contemplated hereby.
7.14 RELEASE OF LIENS. The parties acknowledge and agree that (i) the
sale and transfer of the Purchased Assets shall be a sale under Section 363 of
the Bankruptcy Code, free and clear of all Encumbrances (except for Permitted
Encumbrances), with all such Encumbrances attaching to the
42
proceeds of such sale pursuant to Section 363 of the Bankruptcy Code, and (ii)
that the Sale Order shall provide that upon the consummation of the sale
transaction contemplated by this Agreement, the Purchased Assets shall have been
transferred to the Buyer free and clear of all Encumbrances (other than
Permitted Encumbrances). Notwithstanding the foregoing, each Seller shall use
its commercially reasonable efforts to cause the Purchased Assets to be
released, as of the Closing, from all Encumbrances (other than Permitted
Encumbrances), guaranties and guaranty obligations, including filing and
recording appropriate documentation evidencing such releases. Subject to Section
9.1(a), the applicable Sellers agree to indemnify Buyer, its Affiliates and any
of their successors or assigns for losses incurred by Buyer, its Affiliates and
any of their successors or assigns arising out of any such Encumbrances (other
than Permitted Encumbrances), guaranties, or guaranty obligations, if any.
7.15 NO SOLICITATION OF TRANSACTIONS. Prior to the entry of the Bid
Procedures Order, and except as otherwise required by this Agreement or by the
Bankruptcy Code, no Seller shall participate in negotiations regarding any
Alternative Offer, regardless of whether such offer was unsolicited. Subsequent
to the entry of the Bid Procedures Order, no Seller shall, directly or
indirectly, through any officer, director, employee or advisor, solicit any
Alternative Offer or participate in any negotiations with respect to any
Alternative Offer; PROVIDED, HOWEVER, that if, at any time, the Seller
determines in good faith, based upon the advice of outside counsel, that it is
prudent to do so in light of its fiduciary duties, such Seller may, in response
to an Alternative Offer, participate in negotiations regarding such Alternative
Offer and enter into a definitive agreement with respect to such Alternative
Offer after giving the Buyer three (3) Business Days' notice of its intention to
do so and promptly providing Buyer with copies of all correspondence, term
sheets and draft agreements delivered or received by such Seller in connection
with such Alternative Offer; PROVIDED that such Seller shall not furnish any
non-public information with respect to such Seller, the Business or the
Purchased Assets to any third party that expresses an unsolicited bona fide
interest in making a potential Alternative Offer unless (i) such non-public
information is provided pursuant to a customary confidentiality agreement (with
terms regarding the protection of confidential information at least as
restrictive as such terms in the Confidentiality Agreement) and (ii) such
non-public information has been delivered or previously made available to the
Buyer. No Seller shall release any Person from, or waive any provisions of, any
such confidentiality agreement with respect to the Buyer to which such Seller is
a party.
7.16 TITLE COMMITMENT AND TITLE REVIEW. Within fifteen (15) days of the
entry of the Bid Procedures Order, AFDI shall cause to be prepared and delivered
to Buyer, at AFDI's expense, the commitment for title insurance for the parcel
of Owned Real Estate prepared by a title company reasonably satisfactory to the
Buyer, accompanied by legible copies of all recorded documents affecting the
Real Estate and listed as title exceptions on the title commitment (to the
extent available), insuring fee simple ownership in the property subject only to
Permitted Encumbrances. Prior to the Closing, AFDI shall deliver to Buyer
current as-built survey for the Real Estate reflecting the total area of the
relevant parcel of the Owned Real Estate, the location of all improvements,
recorded easements located thereon and all building and set back lines and
plottable
43
matters of record with respect thereto and not disclosing any survey defect
which would have a Material Adverse Effect on the operation of the Business.
Buyer shall have twenty (20) days (the "TITLE REVIEW PERIOD") after the receipt
of the title commitments, legible copies of all instruments referred to therein
and the surveys, to notify AFDI, in writing, of such reasonable objections as
Buyer may have to anything contained in the title commitment or the surveys. In
the event Buyer shall notify AFDI of objections to title prior to the expiration
of the Title Review Period, AFDI shall have ten (10) days after receipt of
notification of such objections, or such greater period of time as may be
mutually acceptable to Buyer and AFDI (the "CURE PERIOD"), within which AFDI may
(but shall not be required to) cure or remove such objection. If AFDI fails
either to cure or remove any such objection to the reasonable satisfaction of
Buyer prior to the expiration of the Cure Period and such item or items which
are the subject of such objection would reasonably be expected to result in a
Material Adverse Effect, Buyer may either terminate this Agreement by written
notice to AFDI or waive such objection and accept such title as AFDI is able to
convey without any reduction in the Purchase Price, with the exception that the
Purchase Price shall be reduced by the amount (including penalties and interest,
if any) required to satisfy any lien or encumbrance against such portion of
Owned Real Estate.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE CLOSING. The
respective obligations of each party to effect the sale and purchase of the
Purchased Assets shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions:
(a) The waiting period (and any extension thereof) under the
HSR Act applicable to the consummation of the sale of the Purchased Assets
contemplated hereby shall have expired or been terminated; and
(4) No preliminary or permanent injunction or other order or
decree by any federal or state court which prevents the consummation of the sale
of a material part of the Purchased Assets contemplated hereby shall have been
issued and remain in effect (each party agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted) and no statute,
rule or regulation shall have been enacted by any state or federal government or
governmental agency in the United States which prohibits the consummation of the
sale of the Purchased Assets.
8.2 CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligation of the Buyer
to effect the purchase of the Purchased Assets contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
44
(a) Each Seller shall have performed and complied in all
respects with the covenants and agreements contained in this Agreement which are
required to be performed and complied with by such Seller on or prior to the
Closing Date and the representations and warranties of such Seller which are set
forth in this Agreement shall be true and correct in all respects as of the date
of this Agreement and as of the Closing Date as though made at and as of the
Closing Date (except to the extent that any such representation or warranty
speaks as of a particular date, in which case such representation and warranty
shall be true and correct as of such date), unless the failure of such Seller to
so perform and comply and the failure of such representations and warranties of
such Seller to be true and correct in all material respects would not, in the
aggregate, reasonably be expected to create a Material Adverse Effect;
(b) The Buyer shall have received certificates from authorized
officers of AFDI (on behalf of the Sellers) dated the Closing Date, to the
effect that the conditions set forth in Sections 8.2(a) through 8.2(g) have been
satisfied;
(c) All federal, state and local government consents and
approvals required for the consummation of the sale of the Purchased Assets, the
operation of the Business by Buyer, the Seller Required Regulatory Approvals and
the Buyer Required Regulatory Approvals, shall have been obtained or become
final orders (a "FINAL ORDER"), which for all purposes of this Agreement means a
final order (whether or not any rehearing or appeal thereof is pending) that has
not been revised, stayed, enjoined, set aside, annulled or suspended, with
respect to which any required waiting period has expired; and as to which all
conditions to effectiveness prescribed therein or otherwise by law, regulation
or order have been satisfied), unless the failure to obtain the required
consents and approvals would not, in the aggregate, reasonably be expected to
create a Material Adverse Effect;
(d) All consents and approvals for the consummation of the
sale of the Purchased Assets contemplated hereby required under the terms of any
note, bond, mortgage, indenture, contract or other agreement to which any Seller
is a party shall have been obtained, unless the failure to obtain such consents
and approvals would not, in the aggregate, reasonably be expected to create a
Material Adverse Effect;
(5) All Transferable Permits shall have been transferred to
Buyer or reissued to Buyer, unless the failure to effectuate such transfers
would not, in the aggregate, reasonably be expected to create a Material Adverse
Effect;
(6) The Buyer and Tricon shall close the sale and purchase of
all salable inventory of goods and supplies that are owned by Tricon and
intended for use in the Business (the "TRICON CLOSING"), pursuant to the terms
of a purchase agreement to be executed by and between the Buyer and Tricon (the
"TRICON PURCHASE AGREEMENT"), it being understood and agreed by Buyer that the
pricing formulas and inventory methodology with respect to Buyer's purchase of
Tricon-owned
45
inventory shall be substantially similar to the pricing formulas and inventory
methodology employed in determining the purchase price with respect to the
Purchased Inventory under this Agreement.
(7) All of the following shall occur prior to or
simultaneously with the Closing: (i) the execution and delivery of the Tricon
Extension, (ii) the execution and delivery of the Pizza Hut/KFC Franchise
Agreements Amendments, and (iii) the execution and delivery of the Taco Xxxx
Franchise Agreements Amendments;
(8) Since the date of this Agreement, there shall not have
been any event or occurrence that has, or with the passage of time would
reasonably be expected to have, a Material Adverse Effect;
(9) On or before October 1, 2000, the Bankruptcy Court shall
have entered the Bid Procedures Order and on or before November 30, 2000 the
Bankruptcy Court shall have entered the Sale Order, neither of which shall
become subject to any stay. The Sale Order shall have authorized Sellers to (i)
convey to Buyer all of their right, title, and interest in and to the Purchased
Assets and the Business free and clear of all Encumbrances (other than Permitted
Encumbrances) of any nature whatsoever, which Encumbrances shall attach to the
proceeds of the sale under section 363 of the Bankruptcy Code, and (ii)
distribute portions of the consideration to Tricon pursuant to the Tricon
Purchase Agreement. Simultaneously with the entry of the Sale Order, all Assumed
Agreements shall have been assumed by Sellers and the Bankruptcy Court shall
have approved such assumption and the assignment of the Assumed Agreements
thereof by the Sellers pursuant to Section 365 of the Bankruptcy Code by an
order in form and substance reasonably acceptable to Buyer (the "365 ORDER"),
which may be the Sale Order and will include provisions substantially similar to
those set forth on EXHIBIT 8.2(i). The 365 Order shall provide that the Assumed
Agreements will be transferred to, and remain in full force and effect for the
benefit of, Buyer, notwithstanding any provision in such Assumed Agreement
(including those described in Sections 365(b)(2) and (f) of the Bankruptcy Code)
that prohibits such assignment or transfer;
(10) Buyer shall have received the other items to be delivered
pursuant to Section 4.3;
8.3 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligation of each
Seller to effect the sale of the Purchased Assets contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
(a) The Buyer shall have performed and complied with in all
material respects with the covenants and agreements contained in this Agreement
which are required to be performed and complied with by the Buyer on or prior to
the Closing Date and the representations and warranties of the Buyer which are
set forth in this Agreement shall be true and correct in all material respects
(except that where any statement in a representation or warranty expressly
includes a standard of materiality, such statements shall be true and correct in
all respects) as of the date of this
46
Agreement and as of the Closing Date as though made at and as of the Closing
Date (except to the extent that any such representation or warranty speaks as of
a particular date, in which case such representation and warranty shall be true
and correct as of such date);
(b) AFDI shall have received (on behalf of the Sellers)
certificates from authorized officers of the Buyer, dated the Closing Date, to
the effect that the conditions set forth in Section 8.3(a) have been satisfied;
(11) All consents and approvals for the consummation of the
sale of the Purchased Assets contemplated hereby required under the terms of any
note, bond, mortgage, indenture, contract or other agreement to which the Buyer
is a party shall have been obtained;
(12) on or before November 30, 2000, the Bankruptcy Court
shall have entered the Sale Order;
(13) the Bid Procedures Order shall be in full force and
effect and shall not have been modified, vacated or reversed in any manner; and
(14) Each Seller shall have received the other items to be
delivered to it pursuant to Section 4.4.
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNIFICATION.
(15) From and after the Closing, the Sellers will jointly and
severally indemnify, defend and hold harmless the Buyer from and against any and
all claims, demands or suits (by any Person), losses, liabilities, damages,
obligations, payments, costs and expenses (including, without limitation, the
costs and expenses of any and all actions, suits, proceedings, assessments,
judgments, settlements and compromises relating thereto and reasonable
attorneys' fees and reasonable disbursements in connection therewith) (each, an
"INDEMNIFIABLE LOSS"), asserted against or suffered by the Buyer to the extent
relating to, resulting from or arising out of (i) any material breach by any
Seller of any covenant or agreement of any Seller contained in this Agreement;
(ii) the Excluded Obligations or Excluded Assets, (iii) any Taxes relating to
the Purchased Assets or the Business with respect to any Tax year or portion
thereof ending on or prior to the Closing Date (or for any Tax year beginning
before and ending after the Closing Date to the extent allocable to the portion
of such period beginning before and ending on the Closing Date), or (iv) the
ownership, use, possession, enjoyment or operation of the Purchased Assets or
the Business prior to the Closing Date, including, without limitation, causes of
action, demands and claims for personal injury or property damage relating to
any occurrence prior to the Closing Date (which shall
47
specifically include all general liability claims arising out of or relating to
occurrences of any nature relating to the Business or the Purchased Assets prior
to the Closing Date), whether such claims are asserted prior to or after the
Closing. Buyer and Sellers agree that the sole and exclusive remedy for
Indemnifiable Losses suffered by Buyer to the extent arising from or relating to
this Agreement or the transactions contemplated hereby shall be pursuant to this
Section 9.1.
(16) From and after the Closing, the Buyer will indemnify,
defend and hold harmless each Seller from and against any and all Indemnifiable
Losses asserted against or suffered by such Seller to the extent relating to,
resulting from or arising out of (i) any material breach by the Buyer of any
covenant or agreement of Buyer contained in this Agreement, (ii) any material
breach of any representation or warranty of Buyer contained in this Agreement,
(iii) the Assumed Obligations or (iv) any liabilities or obligations relating to
the ownership, use, possession, enjoyment or operation of the Business or the
Purchased Assets incurred after Closing; PROVIDED that the Buyer shall not be
responsible to indemnify the Sellers under Section 9.1(b)(ii) with respect to
the first $100,000 of Indemnifiable Losses (in the aggregate); PROVIDED FURTHER
that the aggregate liability of Buyer pursuant to Section 9.1(b)(ii) shall in no
event exceed the amount of $15 million. Subject to Section 10.3, the Buyer and
the Sellers agree that the sole and exclusive remedy for Indemnifiable Losses
suffered by Sellers arising from or relating to this Agreement or the
transactions contemplated hereby shall be pursuant to this Section 9.1.
(17) The amount of any Indemnifiable Loss shall be reduced to
the extent that any Person entitled to receive indemnification under this
Agreement (an "INDEMNITEE") receives any insurance proceeds with respect to an
Indemnifiable Loss.
(18) The expiration, termination or extinguishment of any
covenant or agreement shall not affect the parties' obligations under this
Section 9.1 if the Indemnitee provided the Person required to provide
indemnification under this Agreement (the "INDEMNIFYING PARTY") with notice of
the claim or event for which indemnification is sought prior to such expiration,
termination or extinguishment.
(19) No Indemnitee shall be entitled to recover any special,
consequential or exemplary damages under this Article IX in addition to any
Indemnifiable Loss.
9.2 DEFENSE OF CLAIMS. (a) If any Indemnitee receives notice of the
assertion of any claim or of the commencement of any claim, action, or
proceeding made or brought by any Person who is not a party to this Agreement or
any Affiliate of a party to this Agreement (a "THIRD PARTY CLAIM") with respect
to which indemnification is to be sought from an Indemnifying Party, the
Indemnitee will give such Indemnifying Party reasonably prompt written notice
thereof, but in any event not later than 10 Business Days after the Indemnitee's
receipt of notice of such Third Party Claim, or within 10 Business Days prior to
the date on which an answer or reply, if any, to such claim is due, whichever is
earlier. Such notice shall describe the nature of the Third Party Claim in
reasonable detail and will indicate the estimated amount, if practicable, of the
Indemnifiable Loss that has been
48
or may be sustained by the Indemnitee. The Indemnifying Party will have the
right to participate in or, by giving written notice to the Indemnitee, to elect
to assume the defense of any Third Party Claim at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel, and the Indemnitee will
cooperate in good faith in such defense at such Indemnitee's own expense.
(b) If within 10 Business Days after an Indemnitee provides
written notice to the Indemnifying Party of any Third Party Claim the Indemnitee
receives written notice from the Indemnifying Party that such Indemnifying Party
has elected to assume the defense of such Third Party Claim as provided in the
last sentence of Section 9.2(a), the Indemnifying Party will not be liable for
any legal expenses subsequently incurred by the Indemnitee in connection with
the defense thereof; PROVIDED, HOWEVER, that if the Indemnifying Party fails to
take reasonable steps necessary to defend diligently such Third Party Claim
within 20 calendar days after receiving notice from the Indemnitee that the
Indemnitee believes the Indemnifying Party has failed to take such steps, the
Indemnitee may assume its own defense, and the Indemnifying Party will be liable
for all reasonable expenses thereof. Without the prior written consent of the
Indemnitee, the Indemnifying Party will not enter into any settlement of any
Third Party Claim (other than a settlement involving only the payment of money).
If a firm offer is made to settle a Third Party Claim which the Indemnifying
Party desires to accept and which acceptance requires the consent of the
Indemnitee pursuant to the immediately preceding sentence, the Indemnifying
Party will give written notice to the Indemnitee to that effect. If the
Indemnitee fails to consent to such firm offer within 10 Business Days after its
receipt of such notice and such determination is not based, at least in part, on
the Indemnitee's good faith decision that such a settlement may be prejudicial
in any material respect as a precedent to the business, prospects, properties,
condition or results of operation of the Indemnitee, the Indemnitee may continue
to contest or defend such Third Party Claim and, in such event, the maximum
liability of the Indemnifying Party as to such Third Party Claim will be the
amount of such settlement offer, plus reasonable costs and expenses paid or
incurred by the Indemnitee up to the date of such notice for which the
Indemnifying Party is otherwise liable.
(c) Any claim by an Indemnitee on account of an Indemnifiable
Loss which does not result from a Third Party Claim (a "DIRECT CLAIM") will be
asserted by giving the Indemnifying Party reasonably prompt written notice
thereof, stating the nature of such claim in reasonable detail and indicating
the estimated amount, if practicable, but in any event not later than 20
calendar days after the Indemnitee becomes aware of such Direct Claim, and the
Indemnifying Party will have a period of 20 calendar days within which to
respond to such Direct Claim. If the Indemnifying Party does not respond within
such 20 calendar day period, the Indemnifying Party will be deemed to have
accepted such claim. If the Indemnifying Party rejects such claim, the
Indemnitee will be free to seek enforcement of its rights to indemnification
under this Agreement.
(d) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an indemnity payment in respect thereof, is reduced
by recovery, settlement or otherwise under or pursuant to any insurance
coverage, or pursuant to any claim, recovery, settlement or payment by or
against any other Person, the amount of such reduction, less any costs, expenses
or
49
premiums incurred in connection therewith (together with interest thereon from
the date of payment thereof at the Prime Rate then in effect), will promptly be
repaid by the Indemnitee to the Indemnifying Party. Upon making any indemnity
payment, the Indemnifying Party will, to the extent of such indemnity payment,
be subrogated to all rights of the Indemnitee against any third party in respect
of the Indemnifiable Loss to which the indemnity payment relates; PROVIDED,
HOWEVER, that (i) the Indemnifying Party will then be in compliance with its
obligations under this Agreement in respect of such Indemnifiable Loss and (ii)
until the Indemnitee recovers full payment of its Indemnifiable Loss, any and
all claims of the Indemnifying Party against any such third party on account of
said indemnity payment is hereby made expressly subordinated and subjected in
right of payment to the Indemnitee's rights against such third party. Without
limiting the generality or effect of any other provision hereof, each such
Indemnitee and Indemnifying Party will duly execute upon request all instruments
reasonably necessary to evidence and perfect the above described subrogation and
subordination rights, and otherwise cooperate in the prosecution of such claims
at the direction of the Indemnifying Party. Nothing in this Section 9.2(d) shall
be construed to require any party hereto to obtain or maintain any insurance
coverage.
(e) A failure to give timely notice as provided in this
Section 9.2 will not affect the rights or obligations of any party hereunder
except if, and only to the extent that, as a result of such failure, the party
which was entitled to receive such notice was actually prejudiced as a result of
such failure.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 TERMINATION.
(20) This Agreement may be terminated at any time prior to the
Closing Date by mutual written consent of AFDI and the Buyer.
(21) This Agreement may be terminated by AFDI or the Buyer if
the Closing contemplated hereby shall have not occurred on or before November
30, 2000 (the "TERMINATION DATE"); PROVIDED that the right to terminate this
Agreement under this Section 10.1(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such date
(including any Seller with respect to termination by AFDI).
(22) This Agreement may be terminated by either AFDI or the
Buyer if (i) any Governmental Entity, the consent of which is a condition to the
obligations of any Seller and the Buyer to consummate the Closing shall have
determined not to grant its consent and all appeals of such determination shall
have been taken and have been unsuccessful, (ii) one or more courts of competent
jurisdiction in the United States or any state shall have issued an order,
judgment or decree permanently restraining, enjoining or otherwise prohibiting
the Closing, and such order,
50
judgment or decree shall have become final and nonappealable or (iii) any
statute, rule or regulation shall have been enacted by any state or federal
government or governmental agency in the United States which prohibits the
consummation of the Closing; PROVIDED that the right to terminate this Agreement
under this Section 10.1(c) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the occurrence of any of the items set forth in (i), (ii) or (iii) above
(including any Seller with respect to termination by AFDI).
(23) This Agreement may be terminated by either AFDI or the
Buyer (provided that the terminating party (nor any other Seller, with respect
to termination by AFDI) is not then in material breach of any representation,
warranty, covenant, or other agreement contained herein), if there shall have
been a material breach of any of the representations, warranties or covenants
set forth in this Agreement on the part of any Seller (with respect to
termination by the Buyer) or the Buyer (with respect to termination by AFDI),
which breach is not cured within thirty (30) days following written notice to
the party committing such breach, or which breach, by its nature, cannot be
cured prior to the Closing, and which breach, individually or together with all
other such breaches, would not reasonably be expected to have a Material Adverse
Effect, in the case of breaches by the Sellers, or a material adverse effect on
the Sellers' ability to consummate the transactions contemplated hereby, in the
case of breaches by Buyer.
(24) This Agreement may be terminated:
(i) by the Buyer or AFDI, if any Seller executes and delivers
a definitive agreement with respect to an Alternative Offer;
(ii) by the Buyer or AFDI, if any Seller seeks or supports
Bankruptcy Court approval of an Alternative Offer or an Acquisition (other than
to or by the Buyer);
(iii) by the Buyer or AFDI, if the Bankruptcy Court enters an
order approving any Alternative Offer or Acquisition other than the sale of the
Business and the Purchased Assets to the Buyer; or
(iv) by :
(A) the Buyer (provided that the Buyer is not in material
breach of any representation, warranty or covenant or other agreement of Buyer
contained herein), if the Bidding Procedures Order shall not have been entered
by the Bankruptcy Court on or prior to September 30, 2000; or
(B) the Buyer or AFDI (provided that the terminating party
(nor any other Seller, with respect to termination by AFDI) is not in material
breach of any representation, warranty or covenant or other agreement of such
party contained herein), if the Sale Order or the 365 Order shall not have been
entered by the Bankruptcy Court on or prior to November 30, 2000.
51
(25) Notwithstanding any other provision contained in this
Agreement, Buyer may terminate this Agreement, in its sole discretion and for
reasons other than those provided in this Section 10.1 or for no reason at all,
by giving written notice to AFDI on or prior to November 19, 2000.
10.2 NOTICE OF TERMINATION. In the event of termination of this
Agreement and abandonment of the transactions contemplated hereby by either or
both of the parties pursuant to Section 10.1, written notice thereof shall
forthwith be given by the terminating party to the other party.
10.3 EFFECT OF TERMINATION.
(26) GENERAL. In the event of a termination of this Agreement
pursuant to Section 10.1, this Agreement will become void and of no further
force and effect, except for the provisions of Sections 7.3, 10.4 (to the extent
applicable), 11.4, 11.6 and this Section 10.3; PROVIDED, HOWEVER, nothing in
this Section 10.3 will be deemed to release Buyer or any Seller from any
liability for breach by such Seller of the terms and provisions of this
Agreement.
(27) DISPOSITION OF DEPOSIT UPON TERMINATION. If this
Agreement is terminated (i) pursuant to Section 10.1(a), (ii) by Buyer pursuant
to Section 10.1(b), Section 10.1(c), Section 10.1(d), Section 10.1(e), or (iii)
by AFDI (on behalf of all Sellers) pursuant to Sections 10.1(b), 10.1(c) or
10.1(e), the Deposit shall be returned by the Deposit Escrow Agent to the Buyer
to an account designated by Buyer in its notice of termination pursuant to
Section 10.2. If this Agreement is terminated by AFDI (on behalf of the Sellers)
pursuant to Section 10.1(d) on or after November 20, 2000, the Deposit shall be
retained by the Deposit Escrow Agent in accordance with the Deposit Escrow
Agreement, it being understood and agreed that the Sellers shall retain all
remedies against the Buyer, whether arising at law or in equity, with respect to
such termination. If this Agreement is terminated by Buyer pursuant to Section
10.1(f) or by AFDI (on behalf of all Sellers) pursuant to Section 10.1(d) on or
prior to November 19, 2000, the Deposit, as Seller's sole and exclusive remedy
and as liquidated damages with respect to a termination under Section 10.1(d)
and as a termination fee with respect to a termination under Section 10.1(f)
(each Seller hereby waiving all other remedies, whether arising at law or in
equity) shall be paid over by the Deposit Escrow Agent to AFDI (on behalf of the
Sellers) to an account designated by AFDI in its notice of termination pursuant
to Section 10.2.
(28) TERMINATION FEES.
(i) In the event that this Agreement is terminated pursuant to
Section 10.1(e)(i), (ii) or (iii), then the Sellers shall immediately pay to
Buyer, by wire transfer of immediately available funds, to such account as Buyer
shall designate, an amount equal to $4.0 million (the "TERMINATION FEE"), and
the Buyer shall not be entitled to receive from any Seller any other amounts
including reimbursement for costs and expenses.
52
(ii) In the event that this Agreement is terminated (x) by
AFDI for any reason other than those set forth in Sections 10.1(a), 10.1(b),
10.1(c), 10.1(d), 10.1(e)(i), 10.1(e)(ii), or 10.1(e)(iii), or (y) by Buyer
pursuant to Section 10.1(d), then the Sellers shall immediately pay to Buyer, by
wire transfer of immediately available funds to such account as Buyer shall
designate, an amount equal to the LESSER of (A) the actual costs and expenses
incurred by Buyer in connection with this Agreement, and the transactions
contemplated hereby, including, but not limited to, professional services
(including, but not limited to, investment banking, accounting, and legal
services) and the actual out-of-pocket costs and expenses incurred as a result
of buyer's breaching its agreement to occupy space in or near Addison, Texas and
(B) $3,000,000 (the "EXPENSE REIMBURSEMENT").
(29) Sellers' obligation to pay the Termination Fee or the
Expense Reimbursement shall survive termination of this Agreement and shall
constitute an administrative expense (which shall be a superpriority
administrative expense claim senior to all other administrative expense claims)
of Sellers under sections 503(b) and 507(a)(1) of the Bankruptcy Code.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by written agreement of AFDI (on behalf of the
Sellers) and the Buyer.
11.2 WAIVER OF COMPLIANCE; CONSENTS. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
11.3 SURVIVAL. The representations and warranties of the Sellers
contained in this Agreement shall expire, terminate and extinguish on the
Closing Date and shall be of no further force or effect thereafter, and the
representations and warranties of the Buyer contained in this Agreement shall
expire, terminate and extinguish one hundred twenty (120) days after the Closing
Date and shall be of no further force or effect thereafter. All covenants and
agreements of the parties contained in this Agreement shall survive the
consummation of the transactions contemplated by this Agreement indefinitely,
unless otherwise specifically provided herein, it being agreed and understood
that there will be no post-Closing adjustment (whether to the Buyer's benefit or
the Seller's benefit) or right of indemnity with respect to the value of the
Purchased Assets.
53
11.4 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by facsimile
transmission, telexed or mailed by overnight courier or registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice; PROVIDED that notices of a change of address shall be effective
only upon receipt thereof):
(30) If to any Seller, to:
AmeriServe Food Distribution, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esquire
Xxxxxx X. Xxxxxxx, P.C.
(31) if to the Buyer, to:
XxXxxx Company, Inc.
0000 XxXxxx Xxxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxxxxx, General Counsel
with copies to:
Jenkens & Xxxxxxxxx, P.C.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxx, Esq.
11.5 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns,
54
but neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto, including by operation of law
without the prior written consent of the other party, nor is this Agreement
intended to confer upon any other Person except the parties hereto any rights or
remedies hereunder; PROVIDED, HOWEVER that the Buyer may assign this Agreement,
and any or all of its rights, interests or obligations hereunder, to a
wholly-owned subsidiary of the Buyer; PROVIDED, FURTHER, HOWEVER, that such
assignment shall not relieve Buyer of any of its obligations hereunder.
Notwithstanding the foregoing, no provision of this Agreement shall create any
third party beneficiary rights in any employee or former employee of any Seller
(including any beneficiary or dependent thereof) in respect of continued
employment or resumed employment, and no provision of this Agreement shall
create any rights in any such Persons in respect of any benefits that may be
provided, directly or indirectly, under any employee benefit plan or arrangement
except as expressly provided for thereunder.
11.6 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware (regardless of the laws
that might otherwise govern under applicable Delaware principles of conflicts of
law) as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
11.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.8 INTERPRETATION. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
11.9 SCHEDULES AND EXHIBITS. All Exhibits, Schedules and Appendices
referred to herein are intended to be and hereby are specifically made a part of
this Agreement.
11.10 ENTIRE AGREEMENT. This Agreement, the Confidentiality Agreement
and the Exhibits, Schedules, Appendices, documents, certificates and instruments
referred to herein or therein, embody the entire agreement and understanding of
the parties hereto in respect of the transactions contemplated by this
Agreement. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein or therein. It is expressly acknowledged and agreed that there are no
restrictions, promises, representations, warranties, covenants or undertakings
contained in any material made available to the Buyer pursuant to the terms of
the Confidentiality Agreement. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such transactions other
than the Confidentiality Agreement.
11.11 BULK SALES OR TRANSFER LAWS. The Buyer hereby waives compliance
by the Sellers with the provisions of the bulk sales or transfer laws of all
applicable jurisdictions.
55
11.12 PARTIAL INVALIDITY AND SEVERABILITY. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid, and
enforceable. If any term of this Agreement, or part hereof, not essential to the
commercial purpose of this Agreement shall be held to be illegal, invalid, or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof, or part hereof, shall constitute their
agreement with respect to the subject matter hereof and all such remaining
terms, or parts thereof, shall remain in full force and effect. To the extent
legally permissible, any illegal, invalid, or unenforceable provision of this
Agreement shall be replaced by a valid provision that will implement the
commercial purpose of the illegal, invalid, or unenforceable provision.
11.13 HEADINGS. The headings of particular provisions of this Agreement
are inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.
11.14 SUBMISSION TO JURISDICTION. The parties hereby agree that any and
all claims, actions, causes of action, suits, and proceedings relating to this
Agreement or the other agreements contemplated herein shall be filed and
maintained only in the Bankruptcy Court, and the parties hereby consent to the
jurisdiction of such court.
[END OF AGREEMENT]
56
[EXECUTION COPY]
IN WITNESS WHEREOF, the Sellers and the Buyer have caused this
agreement to be signed by their respective duly authorized officers as of the
date first above written.
SELLERS:
AMERISERVE FOOD DISTRIBUTION, INC.
By:
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
AMERISERVE TRANSPORTATION, INC.
By:
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NEBCO XXXXX HOLDING COMPANY
By:
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
XXXXXXX WAREHOUSE PROPERTIES, INC.
By: AmeriServe Food Distribution, Inc.
Its: Shareholder
By:
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
By: NEBCO XXXXX Holding Company
Its: Shareholder
By:
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
[SIGNATURE PAGES CONTINUE]
57
[EXECUTION COPY]
DELTA TRANSPORTATION, LTD.
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
PSC SERVICES OF FLORIDA, INC.
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
NORTHLAND TRANSPORTATION SERVICES, INC.
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NAVC CORP.
By:
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
NORTH AMERICAN VANTIX CORP.
By:
---------------------------------------
Name: Xxxx Xxxxxx xx Xxxxxxx
Title: Vice President
ASNSC, INC.
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
[SIGNATURE PAGES CONTINUE]
58
[EXECUTION COPY]
VANTIX LOGISTICS, L.P.
By: North American Vantix Corp.
Its: General Partner
By:
----------------------------------------
Name: Xxxx Xxxxxx xx Xxxxxxx
Title: Vice President
PSD TRANSPORTATION SERVICES, INC.
By:
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
BUYER:
XXXXXX COMPANY, INC.
By:
----------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
[END OF SIGNATURE PAGES TO THE ASSET
PURCHASE AGREEMENT]
59
[EXECUTION COPY]
60
[EXECUTION COPY]
61
EXHIBIT H
TRANSITION SERVICES AGREEMENT TERM SHEET
Buyer agrees to provide, or cause its affiliates to provide, to Sellers from and
after Closing the services (the "SERVICES") described below:
1. Payroll processing and related administration and support;
2. IT Infrastructure, applications and support; and
3. Data Administration
Buyer, and/or its affiliates, shall perform the Services in a workmanlike and
commercially reasonable manner.
All charges for the Services to be rendered by Buyer, or its affiliate, to
Sellers shall be commercially reasonable and, in any event, shall be fair and
reasonable.
Nothing in the Transition Services Agreement will require Buyer to violate any
of their software licenses.
Buyer, or its affiliate, shall provide the Services to Sellers for such period
of time as Sellers request, up to a maximum of two (2) years after Closing.
62
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1, effective as of September 19, 2000, is made by and among
AmeriServe Food Distribution, Inc., a Delaware corporation; AmeriServe
Transportation, Inc., a Nebraska corporation; NEBCO XXXXX Holding Company, a
Delaware corporation; Xxxxxxx Warehouse Properties, Inc., a Delaware
corporation; Delta Transportation, Ltd., a Wisconsin corporation; PSC Services
of Florida, Inc., a Florida corporation; Northland Transportation Services,
Inc., a Nebraska corporation; NAVC Corp., a Nevada corporation; North American
Vantix Corp., a Delaware corporation; ASNSC, Inc., a Delaware corporation;
Vantix Logistics, L.P., a Texas limited partnership; and PSD Transportation
Services, Inc., a Nevada corporation (collectively, the "SELLERS"); and XxXxxx
Company, Inc., a Texas corporation (the "BUYER").
The Sellers and Buyer are parties to an Asset Purchase Agreement, dated as of
August 18, 2000 (the "PURCHASE AGREEMENT"). Pursuant to SECTION 11.1 of the
Purchase Agreement, the Sellers and Buyer desire to amend the Purchase
Agreement. Each capitalized term that is not otherwise defined in this Amendment
shall have the meaning which the Purchase Agreement assigns to such term.
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Sellers and Buyer agree as follows:
1. The Purchase Agreement is hereby amended to add the following
language at the end of Section 7.10(i): "Notwithstanding anything to
the contrary, Buyer covenants that it will, at or before the Closing
Date, provide substantially comparable job offers, as of the Closing
Date, to sufficient numbers of Sellers' current employees at each work
site so as not to give rise to any obligations or liabilities under the
WARN Act and similar state or local laws or regulations as a result of
any terminations which result from the Closing. Sellers will not,
without Buyer's prior written consent, do anything to materially
increase (a) the number of employees that Buyer is required to make job
offers to under the preceding sentence, from (b) the required number of
job offers that Buyer would have been required to make under the
preceding sentence had the closing date of the sale hereunder been
September 1, 2000. Sellers will, upon request from Buyer from time to
time, provide Buyer with employee data necessary to calculate the
number of employee job offers required to be made by Buyer hereunder."
Except as it is expressly amended or modified by this Amendment, the Purchase
Agreement remains in full force and effect. This Amendment may be executed in
any number of counterparts, any one of which need not contain the signatures of
more than one party, but all of such counterparts together shall constitute one
amendment.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be signed as of the date first above written.
SELLERS:
AMERISERVE FOOD DISTRIBUTION, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
AMERISERVE TRANSPORTATION, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NEBCO XXXXX HOLDING COMPANY
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
XXXXXXX WAREHOUSE PROPERTIES, INC.
By: AmeriServe Food Distribution, Inc.
Its: Shareholder
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
By: NEBCO XXXXX Holding Company
Its: Shareholder
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
DELTA TRANSPORTATION, LTD.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
[SIGNATURE PAGES CONTINUE]
PSC SERVICES OF FLORIDA, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
NORTHLAND TRANSPORTATION SERVICES, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NAVC CORP.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
NORTH AMERICAN VANTIX CORP.
By:
------------------------------------
Name: Xxxx Xxxxxx xx Xxxxxxx
Title: Vice President
ASNSC, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
VANTIX LOGISTICS, L.P.
By: North American Vantix Corp.
Its: General Partner
By:
------------------------------------
Name: Xxxx Xxxxxx xx Xxxxxxx
Title: Vice President
PSD TRANSPORTATION SERVICES, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
[SIGNATURE PAGES CONTINUE]
BUYER:
XXXXXX COMPANY, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
[END OF SIGNATURE PAGES TO THE ASSET PURCHASE AGREEMENT]
AMENDMENT NO. 2
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 2, effective as of October 26, 2000, is made by and
among AmeriServe Food Distribution, Inc., a Delaware corporation; AmeriServe
Transportation, Inc., a Nebraska corporation; NEBCO XXXXX Holding Company, a
Delaware corporation; Xxxxxxx Warehouse Properties, Inc., a Delaware
corporation; Delta Transportation, Ltd., a Wisconsin corporation; PSC Services
of Florida, Inc., a Florida corporation; Northland Transportation Services,
Inc., a Nebraska corporation; NAVC Corp., a Nevada corporation; North American
Vantix Corp., a Delaware corporation; ASNSC, Inc., a Delaware corporation;
Vantix Logistics, L.P., a Texas limited partnership; and PSD Transportation
Services, Inc., a Nevada corporation (collectively, the "SELLERS"); and XxXxxx
Company, Inc., a Texas corporation (the "BUYER").
The Sellers and Buyer are parties to an Asset Purchase Agreement, dated
as of August 18, 2000 (the "PURCHASE AGREEMENT"). Pursuant to SECTION 11.1 of
the Purchase Agreement, the Sellers and Buyer desire to amend the Purchase
Agreement. Each capitalized term that is not otherwise defined in this Amendment
shall have the meaning which the Purchase Agreement assigns to such term.
The parties hereto agree as follows:
1. TERMINATION. The Purchase Agreement is hereby amended to eliminate
Section 10.1(f).
2. EFFECT OF TERMINATION. The Purchase Agreement is hereby amended such
that Section 10.3(b) reads, in its entirety, as follows: "If this Agreement is
terminated (i) pursuant to Section 10.1(a), (ii) by Buyer pursuant to Section
10.1(b), Section 10.1(c), Section 10.1(d), Section 10.1(e), or (iii) by AFDI (on
behalf of all Sellers) pursuant to Sections 10.1(b), 10.1(c) or 10.1(e), the
Deposit shall be returned by the Deposit Escrow Agent to the Buyer to an account
designated by Buyer in its notice of termination pursuant to Section 10.2. If
this Agreement is terminated by AFDI (on behalf of the Sellers) pursuant to
Section 10.1(d), the Deposit shall be retained by the Deposit Escrow Agent in
accordance with the Deposit Escrow Agreement, it being understood and agreed
that the Sellers shall retain all remedies against the Buyer, whether arising at
law or in equity, with respect to such termination."
Except as it is expressly amended or modified by this Amendment, the
Purchase Agreement remains in full force and effect. This Amendment may be
executed in any number of counterparts, any one of which need not contain the
signatures of more than one party, but all of such counterparts together shall
constitute one amendment.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be signed as of the date first above written.
SELLERS:
AMERISERVE FOOD DISTRIBUTION, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
AMERISERVE TRANSPORTATION, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NEBCO XXXXX HOLDING COMPANY
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
XXXXXXX WAREHOUSE PROPERTIES, INC.
By: AmeriServe Food Distribution, Inc.
Its: Shareholder
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
By: NEBCO XXXXX Holding Company
Its: Shareholder
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
DELTA TRANSPORTATION, LTD.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
[SIGNATURE PAGES CONTINUE]
PSC SERVICES OF FLORIDA, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
NORTHLAND TRANSPORTATION SERVICES, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NAVC CORP.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
NORTH AMERICAN VANTIX CORP.
By:
------------------------------------
Name: Xxxx Xxxxxx xx Xxxxxxx
Title: Vice President
ASNSC, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
VANTIX LOGISTICS, L.P.
By: North American Vantix Corp.
Its: General Partner
By:
------------------------------------
Name: Xxxx Xxxxxx xx Xxxxxxx
Title: Vice President
PSD TRANSPORTATION SERVICES, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
[SIGNATURE PAGES CONTINUE]
BUYER:
XXXXXX COMPANY, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
[END OF SIGNATURE PAGES TO THE AMENDMENT NO. 2]
