EXHIBIT 10.2
------------
ASSET PURCHASE AGREEMENT
between
XXXX X. XXXXXXX,
as Chapter 11 Trustee for the Estate of
FLEER CORP.,
and
CONCORD CONFECTIONS INC.
Dated as of May 8, 1998
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is dated as of this
8th day of May, 1998, by and between XXXX X. XXXXXXX, Chapter 11 trustee
("Trustee") for the estate of FLEER CORP., a Delaware corporation, d.b.a.
FLEER/SKYBOX INTERNATIONAL OR FLEER CONFECTIONS ("Seller"), and CONCORD
CONFECTIONS INC. ("Buyer"), an Ontario corporation.
WHEREAS, Seller is engaged in the business, among other things, of the
manufacture, sale, marketing and distribution of gum and other confectionery
products; and
WHEREAS, on December 27, 1996, (the "Petition Date") Seller commenced
Case No. 96-2071 (the "Fleer Proceeding") under Chapter 11, Title 11 of the
United States Code, 11 U.S.C. xx.xx. 101, et seq. (the "Bankruptcy Code"), in
the United States Bankruptcy Court for the District of Delaware; and
WHEREAS, the Fleer Proceeding was administratively consolidated with
other Chapter 11 proceedings of certain related entities filed the same date;
and
WHEREAS, on December 4, 1997, an order was entered by the United
States District Court for the District of Delaware ("District Court")
withdrawing the reference of the jointly administered Chapter 11 proceedings,
including the Fleer Proceeding, which is now pending in District Court as Civil
Action No. 97-CV-638 (RRM);
WHEREAS, on December 22, 1997, the United States Trustee for the
District Court appointed the Trustee as trustee for Seller's estate under
Chapter 11 of the Bankruptcy Code; and
WHEREAS, the Trustee and Seller desire to sell, transfer and assign,
and Buyer desires to purchase, pursuant to Section 363 of the Bankruptcy Code
and subject to the Consent of the District Court, all of Seller's right, title
and interest in the assets and properties defined in Section 1.1 below, for the
consideration and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises herein made, Buyer and Seller and Trustee hereby agree as
follows:
1. PURCHASE AND SALE
1.1 PURCHASED ASSETS. Subject to the terms and conditions of this
Agreement, Trustee and Seller shall, on the Closing Date, sell, assign,
transfer and set over to Buyer, and Buyer shall purchase or acquire from
Trustee and Seller all right, title and interest of Seller in those certain
assets, rights and properties of the Seller which are used in the Seller's
domestic confections operations and Foreign Assets (as defined in Section
2.3(b)), as specifically set forth in Schedule 1.1 ("Purchased Assets").
1.2 PURCHASED ASSETS PURCHASED FREE OF LIENS. All of the Purchased
Assets shall be sold, assigned, transferred, conveyed and delivered to Buyer as
of the Closing Date, free
and clear of all liens, encumbrances, or claims (as "claim" is defined in
section 101(5) of the Bankruptcy Code), whether arising prior to or subsequent
to the date of the filing of the Chapter 11 petition of Seller, in accordance
with, and pursuant to, sections 363(f) and 365 of the Bankruptcy Code, except
for the Assumed Liabilities (defined in Section 1.3), and specifically
including, but not limited to: (A) all liens, encumbrances and claims of Seller
set forth in the schedules filed with the District Court with respect to the
Fleer Proceeding (the "court Schedules"), (B) Seller's financing subsequent to
the Petition Date, and (C) all claims of Co-Debtors as defined and set forth in
Exhibit H to the Court Schedules. Notwithstanding the foregoing, Trustee and
Seller shall sell, assign, transfer, convey and deliver to Buyer as of the
Closing Date, whatever right, title and interest Seller may have in and to the
Trademarks (as defined and set forth in Schedule 1.1), whether or not subject
to consent decrees, claims of possession, or other encumbrances on title.
1.3 ASSUMED LIABILITIES. Subject to Section 1.2 and other terms and
conditions of this Agreement, Buyer shall execute and deliver an Agreement of
Assignment and Assumption, attached hereto as Exhibit 1.3, and Trustee and
Seller shall, on the Closing Date, assign, transfer and set over to Buyer, and
Buyer shall assume or acquire from Trustee and Seller those certain debts,
liabilities and obligations of the Seller's Confection Operations as set forth
on Schedule 1.3 ("Assumed Liabilities").
1.4 SELLER MAKES NO WARRANTY. Buyer and Seller agree that Seller is
not making any representation or warranty as to the Purchased Assets or the
Assumed Liabilities. Buyer acknowledges that it has had a reasonable due
diligence period to review and inspect the Purchased Assets, and the Assumed
Liabilities prior to execution of this Agreement, and shall have the right to
inspect the Purchased Assets and the Assumed Liabilities prior to the Closing.
The Purchased Assets to be sold and transferred hereunder are to be sold and
transferred and are to be accepted by Buyer in an "AS IS" physical condition,
without any representation or warranty whatsoever. SELLER MAKES NO
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE PURCHASED
ASSETS, INCLUDING, BUT NOT LIMITED TO, ANY REPRESENTATION OR WARRANTY AS TO THE
MERCHANTABILITY OF THE PURCHASED ASSETS OR AS TO THE USEFULNESS OR FITNESS OF
THE PURCHASED ASSETS FOR ANY PARTICULAR PURPOSE.
2. PURCHASE PRICE
2.1 PURCHASE PRICE AMOUNT. The purchase price paid by Buyer to Trustee
and Seller for the Purchased Assets shall be the aggregate sum of Thirteen
Million Dollars ($13,000,000) plus Assumed Liabilities (the "Purchase Price"),
the cash portion of which amount shall be paid as follows:
(a) A deposit in the amount of One Million ($1,000,000.00) Dollars
(the "Deposit"), payable by wire transfer of immediately available funds upon
execution of this Agreement. Buyer shall make such good faith Deposit with
counsel to Trustee, who will hold the Deposit in escrow in an interest bearing
account. Interest will be credited to Buyer. Upon Closing, the Deposit shall be
payable to an escrow account of Trustee's counsel, to be distributed only in
-2-
accordance with an Order of the District Court. If this Agreement is terminated
pursuant to Section 9 hereof, then the Deposit shall be returned to Buyer, with
interest, or payable to Trustee's counsel, to be distributed only in accordance
with an Order of the District Court, in accordance with the terms and
provisions of Section 9.4.
(b) Twelve Million ($12,000,000.00) Dollars, payable at Closing by
wire transfer of immediately available funds to an escrow account of Trustee's
counsel, to be distributed only in accordance with an Order of the District
Court.
2.2 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Purchased Assets in accordance with an allocation schedule
to be prepared by Buyer and Seller prior to the Closing Date and attached
hereto as Exhibit 2.2. Such allocation exhibit shall be prepared in accordance
with section 1060 of the Internal Revenue Code of 1986, as amended (the "Code")
and shall be agreeable to Buyer and Seller. The parties will each report the
federal, state and local and other tax consequences of the purchase and sale
contemplated hereby (including the filing of Internal Revenue Service Form
8594) in a manner consistent with such allocation schedules.
2.3 ADJUSTMENT TO PURCHASE PRICE. The Purchase Price shall be
adjusted, dollar for dollar, based on the difference between the net book value
of the Confection Operations as of the Closing Date ("Closing Net Book Value")
from the net book value as of February 28, 1998 of the Confection Operations
("February Net Book Value") as follows:
(a) The Closing Net Book Value shall be determined in accordance with
Sections 2.3(b) and (d). If the Closing Net Book Value exceeds the February Net
Book Value, Buyer shall pay to Trustee and Seller the amount of such
difference. If the Closing Net Book Value is less than the February Net Book
Value, Trustee and Seller shall pay Buyer the amount of such difference. Any
such payments shall be made within two (2) business days after the Closing Net
Book Value is reasonably determined by Seller, after consultation with and
subject to review by Buyer, as provided in Sections 2.3 (b) and (c) and shall
be binding on Buyer. Payment will be made by a wire transfer or certified or
bank check.
(b) Seller shall prepare a balance sheet of the Confection Operations
as of the Closing Date, (the "Closing Date Balance Sheet") including only
Purchased Assets and Assumed Liabilities, and specifically not including the
assets or liabilities of Fleer GmbH, Fleer Espanola, SA and Dr. Torrents, SA
(the "Foreign Assets") in accordance with methods consistent with the
determination of the February Net Book Value . The Closing Net Book Value shall
be determined by Seller within 10 business days following the Closing Date.
Seller, by the eleventh business day following the Closing Date, shall provide
Buyer with the Closing Net Book Value and work papers of the Seller's detailing
its calculation of the Closing Net Book Value. If Buyer does not notify Seller
of Buyer's objection to the Closing Net Book Value within two (2) business days
after Buyer's receipt of Seller's calculation of the Closing Net Book Value and
related workpapers, Seller's calculation of Closing Net Book Value shall be
final and binding on all parties hereto after the expiration of such objection
period. Buyer's notification to Seller of Buyer's objections to
-3-
Seller's calculation of Closing Net Book Value must be in writing and detail
the basis for such objection. In such event the provisions of Section 2.3(c)
shall apply.
(c) Disputes with respect to the calculation of the Closing Net Book
Value shall be resolved as follows: Buyer and Seller shall each have their
respective certified public accountants review Seller's calculations. If such
certified public accountants of Buyer and Seller are unable to resolve the
dispute within the ten (10) business days after Buyer's notification to Seller
of objection to the Closing Net Book Value calculated by Seller, the parties
hereto shall select by mutual agreement a nationally recognized certified
public accounting firm, who is not rendering (and during the preceding two-year
period has not rendered) services to either Seller or Buyer to serve as the
arbitrating accountant to settle such dispute (the "Arbitrating Accountant").
In connection with the resolution of any dispute, the Arbitrating Accountant
shall have access to all documents, records, work papers, facilities and
personnel necessary to perform its function as arbitrator. The Arbitrating
Accountant's function shall be to calculate the Closing Net Book Value. The
arbitration before the Arbitrating Accountant shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association.
The Arbitrating Accountant's award with respect to any dispute shall be final
and binding upon the parties hereto, and judgment may be entered on the award.
The fees and expenses of the Arbitrating Accountant with respect to any dispute
shall be paid by Buyer; however, if the Closing Net Book Value calculated by
Seller is five (5%) percent or more greater than the Closing Net Book Value
calculated by the Arbitrating Accountant, the fees and expenses of the
Arbitrating Accountant shall be paid by Seller.
(d) Attached hereto as Exhibit 2.3(d) is the pro forma balance sheet
of the Confection Operations as of February 28, 1998 which includes the assets
of the Confection Operations which are Purchased Assets and the liabilities of
the Confection Operations which constitute Assumed Liabilities, but does not
include Foreign Assets. The positive difference obtained by subtracting the
Assumed Liabilities from the Purchased Assets on the balance sheet of the
Confection Operations as of February 28, 1998, is the February Net Book Value
or Nine Million Four Hundred Seventy-Nine Thousand Dollars ($ 9,479,000). The
Closing Net Book Value shall be the positive difference obtained by subtracting
the Assumed Liabilities from the Purchased Assets (also not including Foreign
Assets") as reflected on the Closing Date Balance Sheet.
3. CLOSING
3.1 TIME AND PLACE. The closing of the sale of the Purchased Assets
and assumptions of Assumed Liabilities (the "Closing") shall be held at the
offices of Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C., Xxx
Xxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000-0000 and shall occur on
the next business day immediately following the entry of the sale order by the
District Court, in form and substance reasonably satisfactory to Buyer and
Seller, approving this Agreement and Contemplated Transactions (the "Sale
Order"). The date on which the Closing is actually held hereunder is referred
to herein as the "Closing Date."
3.2 CLOSING DELIVERIES. At the Closing:
-4-
(a) Seller shall deliver to Buyer:
(i) a xxxx of sale (the "Xxxx of Sale") in the form of
Exhibit 3.2(a)(i);
(ii) Notarial Deeds or other evidence of ownership, if any,
of Fleer GmbH held by Seller;
(iii) stock certificates or other evidence of ownership by
Seller in Fleer Espanola, SA and Dr. Torrents, SA, or an assignment, by means
of the Xxxx of Sale, of any and all of Seller's right, title and interest in
and to any and all proceeds from the sale of such ownership interest to the
other shareholders in Fleer Espanola, SA or Dr. Torrents, SA, as determined
pursuant to the By-Laws of Fleer Espanola, SA or Dr.
Torrents, SA;
(iv) a renewal of the Technical Assistance and Trademark
License Agreement by and between Seller and Fleer Espanola, SA listed on
Schedule 1.1;
(v) such other endorsements, certificates of title and other
instruments of assignment or transfer with respect to the Purchased Assets as
Buyer may reasonably request and as may be necessary to vest in Buyer all of
Seller's right, title and interest in and to the Purchased Assets and shall
deliver possession of the Purchased Assets (excluding Trademarks) free and
clear of all liens, encumbrances and claims as set forth in Section 1.2 and in
accordance with and pursuant to Section 363 of the Bankruptcy Code;
(b) Buyer shall deliver to Seller:
(i) the Purchase Price as provided in Section 2 hereof to be
distributed only pursuant to orders entered by the District Court;
(ii) an instrument by which Buyer assumes the Assumed
Liabilities in the form of Exhibit 1.3;
(iii) Certificate of Good Standing of Buyer;
(iv) opinion letter from legal counsel for Buyer in the form
of Exhibit 3.2(b)(iv);
(v) Certificate of the President of Buyer regarding the
accuracy of Buyer's representations and warranties herein and performance
covenants in this Agreement to be performed by Buyer;
(vi) Certificate of the President of Buyer listing any
consents, waivers, approvals, authorizations, registrations, filings or
notifications of the character referred to in Section 4.3 which are necessary,
to which shall be attached evidence, satisfactory to Seller, that the same has
been obtained or made and in full force and effect, or stating that none is
necessary;
-5-
(vii) Certified corporate resolution of the directors or
shareholders of Buyer authorizing the execution and performance of this
Agreement and the Contemplated Transaction.
(c) Buyer and Seller shall execute and deliver:
(i) the Collateral Agreements;
(ii) a Notarial Transfer Agreement, in the form of Exhibit
3.2(c)(ii), evidencing the transfer of Seller's ownership interest in Fleer
GmbH;
(iii) such other certificates, documents and third party
consents, as may be required to effectuate the transactions contemplated by
this Agreement or as may be reasonably requested by Buyer or Seller, as the
case may be;
(iv) an Assignment of Trademarks Agreement, substantially in
the form of Exhibit 3.2(c)(iv), attached hereto.
3.3 ALLOCATION OF COSTS. The parties agree that they shall allocate
and pay, within thirty (30) days following the Closing Date, their portion of
the costs of the utilities, real estate leases, equipment leases, maintenance
agreements, advertising, software license fees and other costs associated with
the Purchased Assets or Assumed Liabilities of the Confection Operations where
such costs related to a period which includes the Closing Date, such that
Seller pays such amounts related to such a period up to the Closing Date and
Buyer pays such amounts related to such period on or after the Closing Date.
3.4 TAXES.
(a) All excise, sales, use, value added, registration, stamp,
recording, documentary, conveyancing, franchise, property, transfer, gains and
similar taxes, levies, charges and fees (collectively the "Transfer Taxes")
incurred in connection with the transactions contemplated by this Agreement
shall be borne by Buyer. The party that is required by applicable law to make
the filings, reports, or returns with respect to any applicable Transfer Taxes
shall do so, and the other party shall cooperate with respect thereto as
necessary.
(b) All real property taxes, personal property taxes and similar ad
valorem obligations levied with respect to the Purchased Assets and Assumed
Liabilities for a tax period that includes (but does not end on) the Closing
Date shall be apportioned between Seller and Buyer based on the number of days
of such tax period included in the tax period prior to and including the
Closing Date ("Pre-Closing Tax Period") and the number of days of such Tax
period after the Closing Date (the "Post-Closing Tax Period"). Seller shall be
liable for the proportionate amount of such taxes that is attributable to the
Pre-Closing Tax Period and Buyer shall be liable for the proportionate amount
of such taxes that is attributable to the Post-Closing Tax Period. Upon receipt
of any xxxx for such taxes, Seller or Buyer, as the case may be, shall present
a statement to the other party setting forth the amount of reimbursement to
which each is entitled under this
-6-
Section 3.4(b), together with such supporting evidence as is reasonably
necessary to calculate the proration amount.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
4.1 AUTHORIZATION. Buyer has the power and authority to execute and
deliver this Agreement and each of the Collateral Agreements to which it is a
party, to perform fully its obligations thereunder, and to consummate the
Contemplated Transaction. The execution and delivery by Buyer of this Agreement
and the Collateral Agreements to which it is a party, and the Contemplated
Transactions, have been duly authorized by all requisite action of Buyer. Buyer
has duly executed and delivered this Agreement and each of the Collateral
Agreements to which it is a party. This Agreement is, and on the Closing Date
each of the Collateral Agreements to which Buyer is a party will be, legal,
valid and binding obligations of Buyer, enforceable against it in accordance
with their respective terms.
4.2 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to
carry on its business and to own or lease and to operate its properties as and
in the places where such business is conducted and such properties are owned,
leased or operated.
4.3 NO CONFLICTS, ETC. The execution, delivery and performance by
Buyer of this Agreement and each of the Collateral Agreements to which it is a
party, and the Contemplated Transactions, do not and will not conflict with or
result in a violation of or a default under (with or without the giving of
notice or the lapse of time or both) (i) any Applicable Law applicable to
Buyer, or (ii) the Certificate of Incorporation or By-laws of Buyer. Except as
specified in Schedule 4.3, no Governmental Approval or other Consent is
required to be obtained or made by Buyer in connection with the execution and
delivery of this Agreement and the Collateral Agreements or the consummation of
the Contemplated Transactions.
4.4 COMPLIANCE WITH LAWS. Except as disclosed in Schedule 4.4, Buyer
has complied in all material respects with all Applicable Laws applicable to
its business, and Buyer has not received any notice alleging any such conflict,
violation, breach or default.
4.5 LITIGATION. Except as set forth on Schedule 4.5, there is no
action, claim, suit, or proceeding pending, or to Buyer's knowledge, after due
inquiry, threatened, against or relating to Buyer or its business or against or
relating to the Contemplated Transactions or any of the Collateral Agreements
which would impair Buyer's ability to enter into this Agreement.
4.6 BROKERS, FINDERS. All negotiations relating to this Agreement, the
Collateral Agreements, and the transactions contemplated thereby, have been
carried on without the participation of any Person acting on behalf of Buyer in
such manner as to give rise to any valid claim against Seller for any brokerage
or finder's commission, fee or similar compensation, or for any bonus payable
to any officer, director, employee, agent or sales representative of or
consultant to Buyer upon consummation of the transactions contemplated hereby
or thereby.
-7-
5. COVENANTS OF SELLER
Seller hereby covenants and agrees to comply with the following:
5.1 ACCESS AND INVESTIGATION. From the date hereof until the Closing,
upon reasonable notice, Seller will:
(a) afford Buyer reasonable access to the books and records
of Seller related to the Purchased Assets and the Assumed
Liabilities; and
(b) furnish Buyer and its representatives with such financial
and operating data, and other information with respect to
the Confection Operations relating, directly or
indirectly, to the Purchased Assets and the Assumed
Liabilities as Buyer or its representatives shall from
time to time reasonably request.
In connection with this Section 5.1, Buyer and its representatives
shall be privileged to contact and communicate with persons having business
dealings with Seller. It is understood that all such access, investigations and
contacts to be conducted by Buyer and its representatives shall be conducted in
such manner as not to interfere unduly with the normal conduct of business.
5.2 OPERATION OF THE CONFECTION OPERATIONS. Between the date of this
Agreement and the Closing Date, and except with respect to the possible sale by
Seller of all or some portion of the Excluded Assets and except with respect to
the liabilities of Seller which are not Assumed Liabilities, Seller will:
(a) conduct its Confection Operations only in the ordinary
course of business, within the meaning of the Bankruptcy
Code, including hiring and compensation practices; and
(b) preserve intact its current Confection Operations
organization, keep available the services of its current
officers, employees, and agents, and maintain the
relations and good will with its suppliers, customers,
landlords, employees, agents, and others having business
relationships with it; and
(c) make no material acquisition or disposition of Fixed
Assets which are Purchased Assets; and
(d) not, without prior consultation with and approval of
Buyer, enter into any single transaction which would
constitute a capital expenditure or result in
indebtedness over $25,000.
5.3 REQUIRED APPROVALS; CONSENTS. Between the date of this Agreement
and the Closing Date, upon request, Seller will assist Buyer to obtain the
consents of third parties to the Contemplated Transactions which Seller must
obtain, including the consent to the assignment of the Assumed Contracts and
the Assumed Leases.
-8-
5.4 FLEER TRADEMARK.
(a) Domestic License. At Closing, Seller shall grant to Buyer a
non-exclusive, limited license to use, free of fees, the "Fleer" name and
derivations thereof including, Fleer Corp., Fleer Confections, and Xxxxx X.
Xxxxx Corp., (the "Fleer Trademark") in connection with the use of the
Trademarks (as specifically listed in Schedule 1.1), being transferred
hereunder as Purchased Assets, within the confines of the United States of
America, its territories and possessions, and Canada and only in conjunction
with the sale, distribution and marketing of Inventory for such limited
duration of time until the Inventory transferred hereunder and containing the
Fleer Trademark has been exhausted, but in no event later than June 30, 1999,
in accordance with the terms and conditions of the Fleer License Agreement
attached hereto as Exhibit 5.4.
(b) International License. At Closing, Seller shall grant to Buyer a
non-exclusive, limited license to use, free of fees, the Fleer Trademark
outside of North America for a period of five (5) years and only in conjunction
with the sale, distribution and marketing of confectionery products, in
accordance with the terms and conditions of the Fleer License Agreement
attached hereto as Exhibit 5.4.
5.5 MARVEL LICENSE. Seller shall use its Best Efforts to assist Buyer
in entering into a License Agreement with Marvel Characters, Inc. whereby Buyer
would have a limited, non-exclusive license to use, free of fees, the "Marvel"
Name and Characters (as defined in the Marvel License Agreement), but only in
conjunction with the sale, distribution and marketing of Inventory, for such
limited duration of time until the Inventory transferred hereunder and
containing the Marvel Name and Characters has been exhausted, but in no event
later than June 30, 1999, in accordance with the terms and conditions of the
Marvel License Agreement attached hereto as Exhibit 5.5.
5.6 SUBSEQUENT INQUIRIES BY BUYER. Seller agrees to provide historical
information relating to the collection of accounts receivable, disposition of
net credit balances and payment of accounts payable to the degree such
information is available to Seller and reasonably necessary.
5.7 EMPLOYMENT MATTERS.
(a) All Transferred Employees (as defined in Section 6.5(a)(i)) who
accept Buyer's offer of employment (see Section 6.5 below) who participate in
the Marvel Entertainment Group, Inc. Savings Plan and/or the Fleer/SkyBox
International Retirement Plan (the "Plans") effective as of the Closing Date,
shall be entitled to receive such benefits as are available to such Transferred
Employees pursuant to the terms of such Plans, in accordance with Legal
Requirements, including the qualification requirements of the Code.
(b) In connection with the implementation of this Section 5.7, the
Seller and Buyer shall cooperate in the preparation and filing of all
documentation which may be necessary or
-9-
advisable to file with the Internal Revenue Service, the Department of Labor,
or any other applicable governmental authority.
5.8 TAX ABATEMENT. Seller shall cooperate with Buyer in Buyer's
efforts to have an ad valorum tax abatement granted by the City of Byhalia,
Mississippi extended for the benefit of Buyer. Seller makes no representation
or warranty as to the transferability of the ad valorum tax abatement.
5.9 TRADEMARKS. Seller covenants that it shall abandon, by filing a
Express Notice of Abandonment with any applicable Governmental Authority,
promptly following the expiration of the respective terms of the Fleer License
Agreement for licenses in Territory I and Territory II (as both are defined in
the Fleer License Agreement), those trademarks specifically set forth on
Schedule 5.9, attached hereto. Seller covenants that it shall in no way object
to or oppose any efforts of Buyer to register any similiar trademarks to those
set forth in Schedule 5.9, as long as such trademarks do not incorporate the
Fleer Trademark (as defined in Section 5.4(a)). Seller further covenants that
it shall at no time after the Closing Date, make use of, or claim any rights
with respect to, any trademark incorporating "Dubble Bubble" or other
confusingly similiar term.
6. COVENANTS OF BUYER
Buyer hereby covenants and agrees to comply with the following:
6.1 APPROVALS OF GOVERNMENTAL BODIES AND THIRD PARTIES. Between the
date of this Agreement and the Closing Date, Buyer will cooperate with Seller
with respect to all filings and consents that Seller is required by Legal
Requirements to make or are otherwise required in connection with the
Contemplated Transactions.
6.2 FURTHER ASSURANCES. Following the Closing, Buyer shall, from time
to time, execute and deliver such additional instruments, documents,
conveyances or assurances and take such other actions as shall be necessary, or
otherwise reasonably requested by Seller, to confirm and assure the rights and
obligations provided for in this Agreement and render effective the
consummation of the Contemplated Transactions. Following the Closing, Buyer
shall deliver Seller a copy of its filing of United States Department of
Commerce Form BE-13, if such Form is required by any Legal Requirement.
6.3 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Buyer will use its Best Efforts to cause the conditions in Sections 7 and
8 to be satisfied.
6.4 SUBSEQUENT INQUIRIES BY SELLER. Buyer agrees to provide to Seller,
subsequent to Closing, any financial information that is reasonably necessary
or required to resolve discrepancies relating to accounts payable or accounts
receivable of the Seller.
6.5 EMPLOYEE MATTERS.
(a) Transferred Employees.
-10-
(i) As of the Closing Date, Buyer shall offer to hire, at a rate of
pay at least equal to their rate of pay with Seller as of the Closing Date, all
employees of Seller's Confection Operations, a complete listing of which,
including the date of hire and rate of pay on the Closing Date for each
employee, is set forth on Schedule 6.5(a)(i), (the "Transferred Employees"),
and shall cause all of the Transferred Employees to be eligible to participate
in all Employee Benefit Plans of Buyer in which similarly situated employees of
Buyer are eligible to participate.
(ii) Upon Closing, if Buyer does not offer the Transferred Employees
employment that is similar in responsibility, pay and location to their current
status, then Buyer shall be responsible for the full payment of any severance
payments due such Transferred Employees under any plan or program of Buyer or
Seller (such severance entitlements of Transferred Employees are set forth in
Schedule 6.5(a)(ii) attached hereto).
(iii) Buyer shall be responsible for any and all claims, liabilities,
obligations, costs and expenses arising from or relating to the employment of
the Transferred Employees from and after the Closing Date, as set forth on
Schedule 1.3, including the severance entitlements set forth on Schedule
6.5(a)(ii), or which may arise as a result of Buyer's failure to comply with
any of its obligations under this Section 6.5.
(b) Benefit Plans. Effective as of the Closing Date, Buyer shall: (i)
perform the duties required of an employer with respect to providing group
health coverage required of Buyer or Seller by Section 4980B of the Code and
Sections 600-609 of ERISA ("Continuation Coverage") required for any
Transferred Employee, or a dependent or spouse of such Transferred Employee,
and who had or has a "qualifying event" (as defined under Code Section 4980B)
at any time (an "Eligible Person"); (ii) waive, with respect to all Transferred
Employees or Eligible Persons, any waiting provision or preexisting condition
limitation or exclusion under the health plans in which such persons will
participate, to the extent such persons are not subject to similar provisions,
limitations, or exclusions as of the Closing Date under any health plans of the
Seller. Buyer shall reimburse Seller for all costs and expenses for performing
these obligations.
(c) WARN Act Compliance. Effective as of the Closing Date, Buyer shall
perform the duties required of an employer under the Worker Adjustment and
Retraining Notification Act (the "WARN Act") and shall indemnify, defend and
hold harmless Seller from any liabilities, costs, expenses or penalties arising
under the WARN Act incurred in connection with the performance of this
Agreement and the Contemplated Transactions.
(d) Employee Data. Seller will provide Buyer with access to
information, prior to or at Closing, regarding Transferred Employees,
including, without limitation, compensation, bonuses, performance evaluations,
personnel files, medical records and other information maintained by Seller in
the ordinary course of business.
(e) Additional Documents. In connection with the implementation of
this Section 6.5, Seller and Buyer shall cooperate in the preparation and
filing of all documentation which may be necessary or advisable to file with
the Internal Revenue Service, the Department of Labor, or any other applicable
Governmental Authority. Seller shall assist, in whatever
-11-
manner deemed necessary and advisable in gaining any required consents or
waivers required under Legal Requirements from Transferred Employees.
6.6 REQUIRED APPROVALS; CONSENTS. Between the date of this Agreement
and the Closing Date, Buyer will cooperate with Seller with respect to Seller's
prompt filing of a motion for approval and/or Seller's filing for the obtaining
of a District Court Order in connection with the Contemplated Transaction. Upon
request, Buyer will assist Seller to obtain the consents of third parties to
the Contemplated Transactions which it must obtain, including the consent to
the assignment of the Assumed Contracts and the Assumed Leases.
7. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
The obligation of Seller to consummate the Closing shall be subject to
the satisfaction at or prior to the Closing of each of the following conditions
(to the extent noncompliance is not waived in writing by Seller in Seller's
sole and absolute discretion), unless the failure of any such condition to be
satisfied shall be the fault of Seller:
7.1 BUYER'S PERFORMANCE. All of the covenants and obligations that
Buyer is required to perform or to comply with pursuant to this Agreement at or
prior to the Closing Date must have been performed and complied with in all
material respects.
7.2 NO INJUNCTION. There must not be in effect any Legal Requirement
or any injunction or other Order that prohibits the sale of the Purchased
Assets or assignment of Assumed Liabilities by Seller to Buyer.
7.3 COLLATERAL AGREEMENTS. Buyer shall have executed on or prior to
the Closing Date the Collateral Agreements.
7.4 APPROVAL BY DISTRICT COURT. The District Court shall have issued a
Sale Order which approves this Agreement and the Contemplated Transaction,
which approval shall contain provisions confirming the sale of the Purchased
Assets and confirming that the transfer of the Assumed Liabilities to Buyer,
free and clear of all liens, security interests, claims and other encumbrances.
7.5 COMPETING BIDS. Seller shall not have received any higher or
better offers by the conclusion of the District Court hearing on the approval
of a Contemplated Transaction (the "Sale Hearing"); provided, however, that any
bids must be made subject to bidding procedures approved by order of the
District Court. To be considered a higher and better offer, competing bids made
at the Sale Hearing must satisfy all of the following: (i) as a prerequisite to
making an offer, each bidder (except Buyer) must provide to counsel for the
Trustee no later than the business day before the Sale Hearing, a deposit in
the amount of $1,300,000 (10% of the cash portion of the Purchase Price) in
available funds, plus financial information to the Trustee evidencing, in the
Trustee's judgment, that such bidder has the ability to comply with the terms
and conditions of this Agreement as it may be modified at the Sale Hearing (the
"Modified Agreement"), including but not limited to the Successful Bidder's
ability to (1) pay, at Closing of the Modified Agreement, the full balance of
the consideration specified in the Modified
-12-
Agreement, and (2) consummate the transaction contemplated by the Modified
Agreement on the Closing Date of the Modified Agreement; (ii) the initial
competing bid at the Sale Hearing (the "Initial Bid") must be in an amount at
least $1,500,000 (inclusive of the Break Up Fee as defined in Section 9.4) more
than the cash portion of the Purchase Price (i.e., $14,500,000); (iii) if an
Initial Bid is accepted by the Trustee, each bid thereafter must be in an
amount no less than $500,000 more than the last bid accepted by the Trustee;
(iv) other than the cash portion of the Purchase Price, each bid must conform
to all terms and conditions of the Modified Agreement, including with respect
to Assumed Liabilities and Excluded Assets; (v) the maker of the last bid (1)
accepted by the Trustee after no further offers are received, and (2) approved
by the District Court, shall be the Successful Bidder, and shall stipulate and
agree on the record in open court at the Sale Hearing to be bound by all the
terms of the Modified Agreement. Any offer that fails to meet these factors, as
they may be modified by the District Court, shall be deemed to be not a higher
and better offer.
7.6 GOVERNMENTAL APPROVALS. All applicable approvals of governmental
regulatory authorities of the United States of America and any applicable
foreign jurisdiction, or any state or political subdivision thereof, required
to consummate the Contemplated Transactions shall have been obtained.
8. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
The obligation of Buyer to consummate the Closing shall be subject to
the satisfaction at or prior to the Closing of each of the following conditions
(to the extent noncompliance is not waived in writing by Buyer in Buyer's sole
and absolute discretion), unless the failure of any such condition to be
satisfied shall be the fault of Buyer:
8.1 APPROVAL BY DISTRICT COURT. The District Court shall have issued a
Sale Order which approves this Agreement and the Contemplated Transaction,
which approval shall contain provisions confirming the sale of the Purchased
Assets and confirming that the transfer of the Assumed Liabilities to Buyer,
free and clear of all liens, security interests, claims and other encumbrances.
8.2 GOVERNMENTAL APPROVALS. All applicable approvals of governmental
regulatory authorities of the United States of America, or any state or
political subdivision thereof, required to consummate the Contemplated
Transactions shall have been obtained, including any applicable Commerce
Department or Food and Drug Administration approvals.
8.3 SELLER'S PERFORMANCE. All of the covenants and obligations that
Seller is required to perform or to comply with pursuant to this Agreement at
or prior to the Closing must have been duly performed and complied with in all
material respects.
8.4 ADDITIONAL DOCUMENTS. Seller must have caused such other documents
as Buyer may reasonably request to be delivered to Buyer for the purpose of
transferring the Purchased Assets and Assumed Liabilities to Buyer.
-13-
8.5 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
8.6 INJUNCTION. There must not be in effect any Legal Requirement or
any injunction or other Order that prohibits or restrains Buyer's acquisition
of the Purchased Assets and assumption of the Assumed Liabilities.
8.7 COLLATERAL AGREEMENTS. Seller shall have delivered to Buyer at the
Closing Date the Collateral Agreements.
8.8 FLEER TRADEMARK. Seller shall have delivered an executed License
Agreement in accordance with the provisions of Section 5.4 of this Agreement.
9. TERMINATION.
9.1 TERMINATION BY MUTUAL AGREEMENT. This Agreement and the
Contemplated Transactions may be abandoned by the mutual agreement in writing
of the parties hereto at any time prior to the Closing.
9.2 TERMINATION BY BUYER. This Agreement and any obligations of Buyer
hereunder may be terminated upon written notice to that effect by Buyer at any
time prior to or at the Closing, if (a) Seller shall have breached or failed to
perform in any material respect any of its covenants or obligations under this
Agreement; (b) any material condition precedent to Buyer's performance of its
obligations under this Agreement (outside the control of Buyer), as set forth
in Section 8 of this Agreement, is not capable of being met; (c) the Sale Order
shall not have been issued or the Closing shall not have been consummated by
June 1, 1998, and the failure to consummate the Contemplated Transactions on or
before such date did not result from the failure by Buyer to fulfill any
undertaking or commitment provided for herein that is required to be fulfilled
by it prior to Closing; or (d) any court of competent jurisdiction in the
United States or any other United States governmental body shall have issued an
Order restraining, enjoining or otherwise prohibiting the Contemplated
Transactions and such Order shall have become final and non-appealable.
9.3 TERMINATION BY SELLER. This Agreement and any obligations of
Seller hereunder may be terminated upon written notice to that effect by Seller
at any time prior to or at the Closing if (a) Buyer shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or obligations under this Agreement; (b) any material
condition precedent to Seller's performance of its obligations under this
Agreement (outside the control of Seller), as set forth in Section 7 of this
Agreement, is not capable of being met; (c) the Sale Order shall not have been
issued or Closing shall not have been consummated by June 1, 1998, and the
failure to consummate the Contemplated Transactions on or before such date did
not result from the failure by Seller to fulfill any undertaking or commitment
provided for herein that is required to be fulfilled by it prior to Closing; or
(d) any court of competent jurisdiction in
-14-
the United States or any other United States governmental body shall have
issued an Order restraining, enjoining or otherwise prohibiting the
Contemplated Transactions and such Order shall have become final and
non-appealable.
9.4 EFFECT OF TERMINATION. In the event of the termination of this
Agreement, this Agreement shall forthwith become null and void and have no
further force and effect, and none of the parties hereto nor any of their
respective directors, officers, shareholders, affiliates, representatives or
advisors shall have any further obligation or liability under the provisions of
this Agreement, except:
(a) In the event of termination by Seller pursuant to Section 9.3(a)
hereof, Seller's sole remedy shall be the retention of the Deposit as Seller's
damages.
(b) In the event of termination by Buyer pursuant to Section 9.2(a)
hereof, Buyer's sole remedy shall be the return of the Deposit as Buyer's
damages.
(c) In the event a competing bid for substantially the same assets and
liabilities as are being purchased and assumed herein as the Purchased Assets
and Assumed Liabilities from a person other than Buyer is approved by an Order
of the District Court and consummated by Seller (a "Competing Bid"), Buyer
shall be paid an amount equal to Two Hundred Sixty Thousand ($260,000.00)
Dollars (the "Break Up Fee"), or as otherwise approved by the District Court in
its Bidding Procedures Order dated May 1998, to compensate Buyer for
the costs and expenses Buyer shall have incurred in seeking to become the
purchaser of the Purchased Assets. The Break Up Fee shall be an expense of
administration of Seller's Chapter 11 case. If a Successful Bidder qualifies
with a higher and better competing bid pursuant to Section 7.5, the Break Up
Fee shall be due and payable promptly following the Sale Hearing or as
otherwise established by the District Court. The Break Up Fee and return of
Deposit shall be the sole remedies and sole recoveries by Buyer in the event of
the consummation of a transaction pursuant to a Competing Bid.
10. MISCELLANEOUS.
10.1 CONFIDENTIALITY. Unless the Closing has been consummated or until
May 1, 2003, or the date which confidential information becomes publicly
available through no fault of Buyer's, whichever is sooner, Buyer will hold,
and shall cause its counsel, independent certified public accountants,
appraisers and investment bankers and other persons receiving confidential
information to hold in confidence any confidential data or information made
available to Buyer in connection with this Agreement with respect to the
Confection Operations using the same standard of care to protect such
confidential data or information as is used to protect Buyer's confidential
information. If the transactions contemplated by this Agreement are not
consummated, Buyer agrees that it shall return or cause to be returned to the
Seller all written materials that were supplied to Buyer by the Seller and all
copies thereof and extracts thereof that contain any such confidential data or
information and to keep confidential any such information. This obligation will
not apply to information previously known to Buyer or which becomes
-15-
publicly available through no fault of Buyer. This Section 10.1 shall survive
the termination of this Agreement.
10.2 PAYMENTS RECEIVED. Seller and Buyer each agree that after the
Closing they will hold and will promptly transfer and deliver to the other,
from time to time as and when received by them, any cash, checks with
appropriate endorsements (using their best efforts not to convert such checks
into cash), or other property that they may receive on or after the Closing
which properly belongs to the other party, including without limitation any
insurance proceeds, and will account to the other for all such receipts.
10.3 PRESS RELEASES. Except as required by applicable law, neither
Seller nor Buyer shall give notice to third parties or otherwise make any
public statement or releases concerning this Agreement or the Contemplated
Transactions except for such written information as shall have been approved in
writing as to form and content by each party
10.4 ACCESS TO RECORDS. In order to facilitate the resolution of any
claims or causes of actions made by or against Seller, Seller's chapter 11
estate, and/or the creditors' committee thereof, for a period of three (3)
years after Closing, Buyer shall, upon reasonable notice, forward to Seller and
the creditors' committee of Seller's Chapter 11 estate, copies of records
acquired by the Buyer as set forth in Section 1.1 that may be reasonably
requested by Seller.
10.5 NOTICES. All notices, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered by hand, (b) sent by telecopier (with receipt confirmed),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by overnight mail or other express
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate as to itself by notice to the other
parties):
If to Trustee or Seller:
Xxxx X. Xxxxxxx, Esq.
Chapter 11 Trustee
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Telephone No.:(000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, President and COO
Fleer Corp.
Executive Plaza
0000 Xxxxx 00
-00-
Xx. Xxxxxx, Xxx Xxxxxx 00000
Telephone No.:(000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Telephone No.:(000) 000-0000
Facsimile No.: (000) 000-0000
If to Buyer:
Concord Confections Inc.
000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X0X0
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxx, Esq.
Xxxx Xxxxxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx LLP
000 0xx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
10.6 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Delaware or the United States District Court for the District of Delaware
and each of the parties hereby consents to the jurisdiction of such courts (and
of the appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in
the world, whether within or without the State of Delaware.
10.7 FURTHER ASSURANCES. The parties hereto agree (i) to furnish upon
request to each other such further information, (ii) to execute and deliver to
each other such other documents and (iii) to do such other acts and things, all
as the other party hereto may at any time reasonably request for the purpose of
carrying out the intent of this Agreement and the Contemplated Transactions.
-17-
10.8 WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay on the
part of any party in exercising any right, power or privilege under this
Agreement or the Collateral Agreements shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law,
(i) no claim or right arising out of this Agreement or the documents referred
to herein can be discharged by one party hereto, in whole or in part, by a
waiver or renunciation of the claim or right unless in writing signed by the
other party hereto; (ii) no waiver which may be given by a party hereto shall
be applicable except in the specific instance for which it is given; and (iii)
no notice to or demand on one party hereto shall be deemed to be a waiver of
any obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the Collateral Agreements.
10.9 ENTIRE AGREEMENT AND MODIFICATIONS. This Agreement supersedes all
prior agreements among the parties with respect to its subject matter as a
complete and exclusive statement of the terms of the agreement among the
parties with respect thereto. This Agreement may not be changed or terminated
except by a written agreement executed by Buyer and Seller.
10.10 ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS. This
Agreement shall apply to and be binding in all respects upon, and shall inure
to the benefit of, the successors and assigns of the parties hereto. Nothing
expressed or referred to in this Agreement is intended or shall be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement, or any
provision hereof, being the intention of the parties hereto that this Agreement
and all of its provisions and conditions are for the sole and exclusive benefit
of the parties to this Agreement and their respective successors and assigns,
and for the benefit of no other Person.
10.11 SEVERABILITY. In the event any provisions of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provisions
hereof. Any provision of this Agreement held invalid or unenforceable only in
part or degree shall remain in full force and effect to the extent no held
invalid or unenforceable.
10.12 SECTION HEADINGS, CONSTRUCTION. The headings of Sections
contained in this Agreement are provided for convenience only. They form no
part of this Agreement and shall not affect its construction or interpretation.
All references to Sections in this Agreement refer to the corresponding
Sections of this Agreement. All words used herein shall be construed to be of
such gender or number as the circumstances require. Unless otherwise
specifically noted, the words "herein," "hereof," "hereby," "hereinabove,"
"hereinbelow," "hereunder," and words of similar import, refer to this
Agreement as a whole and not to any particular Section, subsection, paragraph,
clause or other subdivision hereof.
-18-
10.13 GOVERNING LAW. This Agreement shall be governed by, and
construed under, the laws of the State of New Jersey and the provisions of the
Bankruptcy Code without regard to the conflicts of laws principles thereof, all
rights and remedies being governed by such laws.
10.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement, and all of which, when taken together, shall be deemed to constitute
but one and the same agreement.
10.15 EXPENSES. Except as otherwise set forth in this Agreement, each
party to this Agreement shall bear its respective expenses incurred in
connection with the preparation, execution and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel and accountants, whether or not this Agreement and the
Contemplated Transactions are consummated.
10.16 XXXXX X. XXXXX CORP.'S TRADEMARKS. Buyer and Seller hereby
acknowledge, and Xxxxx X. Xxxxx Corp., by and through its Trustee, Xxxx X.
Xxxxxxx, hereby agrees to sell, assign, transfer and set over, all of its
right, title and interest in those trademarks set forth on Schedule 1.1.
10.17 REMOVAL OF PURCHASED ASSETS. Buyer shall be permitted to retain
the Purchased Assets being purchased hereunder located at Seller's Mt. Laurel,
New Jersey facility at such facility for up to sixty (60) days, free from rent.
11. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings specified or referred to in this Section 11.
"ASSUMED LIABILITIES" shall have the meaning given it in Section 1.3.
"BEST EFFORTS" means the efforts that a prudent Person desirous of
achieving a result would use under similar circumstances to ensure that such
result is achieved.
"BREAK UP FEE" shall have the meaning given it in Section 9.4(c).
"CLOSING DATE" shall have that meaning given to it in Section 3.1.
"CLOSING DATE BALANCE SHEET" shall have the meaning given it in
Section 2.3(b).
"CLOSING NET BOOK VALUE" shall have the meaning given to it in Section
2.3.
"COLLATERAL AGREEMENTS" means Agreement of Assignment and Assumption,
Fleer License Agreement, Assignment of Trademarks Agreement, and Notarial
Transfer Agreement.
"COMPETING BID" shall have the meaning given it in Section 9.4(c).
-19-
"CONSENTS" means any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order of
registration, certificate, declaration or filing with, or report or notice to,
any Person, including but not limited any Governmental Authority.
"CONFECTION OPERATIONS" means the domestic confections operations of
Seller.
"CONTEMPLATED TRANSACTIONS" means all of the transactions contemplated
by this Agreement.
"COURT SCHEDULES" shall have the meaning given it in Section 1.2.
"EMPLOYEE BENEFIT PLAN" means all plans, funds, programs, policies,
arrangements, practices providing benefits of economic value to any employee,
former employee, or present or former beneficiary, dependent or assignee of any
such employee or former employee other than regular salary, wages, or
commissions paid substantially concurrently with the performance of the
services for which paid. Without limitation, the term "Employee Benefit Plan"
shall also include all employee welfare benefit plans or pension benefit plans
within the meaning of Section 3(1) or 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
"EXCLUDED ASSETS" shall have the meaning given it in Schedule 1.1
"FEBRUARY NET BOOK VALUE" shall have the meaning given it in Section
2.3.
"FOREIGN ASSETS" shall have the meaning given it in Section 2.3(b).
"GOVERNMENTAL APPROVAL" means any Consent of, with or to any
Governmental Authority, necessary for, or otherwise material to, the conduct of
the Business or necessary for the consummation of the transactions contemplated
hereby, including, but not limited to, approval (i) of the Contemplated
Transaction by Sale Order of the District Court in Seller's pending Chapter 11
cases, pursuant to 11 U.S.C. ss. 363(b)(1) and (f), as applicable; (ii) by Sale
Order of the District Court of the assumption and assignment by Seller to Buyer
of Seller's interests in any and all Assumed Liabilities subject to the
Contemplated Transaction, pursuant to 11 U.S.C. ss. 365, both of which Orders
shall be in form and substance reasonably satisfactory to Buyer; and (iii) of
the Bidding Procedures by Sale Order of the District Court.
"GOVERNMENTAL AUTHORITY" means any federal, state, local or other
governmental or administrative authority or agency having regulatory authority
over Seller and/or Buyer.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, franchise,
approval, consent, ratification, permission, confirmation, endorsement, waiver,
certification, registration, qualification or other authorization issued,
granted, given or otherwise made available by or under the authority of any
Governmental Authority or pursuant to any Legal Requirement.
-20-
"LEGAL REQUIREMENT" means any federal, state, local, municipal, or
other law, statute, constitution, ordinance, code, rule or regulation issued,
enacted, adopted, promulgated, or implemented by or under the authority of any
Governmental Authority.
"ORDER" means any order, judgment, injunction, ruling, pronouncement,
determination, decision, opinion, subpoena, writ or award issued, made, entered
or rendered by any court or Governmental Authority or by any arbitrator.
"PERSON" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
company, joint venture, estate, trust, cooperative, foundation, union,
syndicate, league, consortium, coalition, committee, society, firm, company or
other enterprise, association, organization or other entity or Governmental
Authority.
"PROCEEDING" means any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding or any informal proceeding), prosecution, hearing,
inquiry, examination or investigation commenced, brought, conducted or heard by
or before, or otherwise involving, any Governmental Authority or arbitrator.
"PURCHASED ASSETS" shall have the meaning given to it in Section 1.1.
"SALE ORDER" shall have the meaning given it in Section 3.1.
"TAX" or "TAXES" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under the
Internal Revenue Code of 1986, as amended from time to time, or any successor
law (the "Code")), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TRANSFERRED EMPLOYEE" shall have the meaning given to it in Section
6.5(a)(i).
-21-
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the day and year first written above.
BUYER:
CONCORD CONFECTIONS INC.
By:
------------------------------------------
Xxxxxx X. Xxxxxxxxxxxx, President
SELLER:
FLEER CORP., d.b.a. FLEER/SKYBOX INTERNATIONAL
or FLEER CONFECTIONS
By:
------------------------------------------
Xxxxxx X. Xxxxxx, President and C.O.O.
TRUSTEE:
FLEER CORP., d.b.a. FLEER/SKYBOX INTERNATIONAL
or FLEER CONFECTIONS
By:
------------------------------------------
Xxxx X. Xxxxxxx, as Chapter 11 Trustee for the
Estate of Seller, Fleer Corp., d.b.a.
Fleer/SkyBox International or Fleer Confections
XXXXX X. XXXXX CORP.
By:
------------------------------------------
Xxxx X. Xxxxxxx, as Chapter 11 Trustee for the
Estate of Xxxxx X. Xxxxx Corp., as to Section
10.16
By:
------------------------------------------
Xxxxxx X. Xxxxxx, President, as to Section
10.16
-22-
SCHEDULE 1.1
PURCHASED ASSETS
All right, title and interest of Seller in those certain assets,
rights and properties of the Seller which are used in the Seller's confections
operations and attached hereto, including:
(a) All of Seller's ownership interest, evidenced by Notarial Deeds,
of Fleer GmbH;
(b) All of Seller's ownership interest in Fleer Espanola, SA and Dr.
Torrents, SA, being a fifty (50%) percent interest in each corporation or, to
the extent such ownership interest is required to be sold to the other
shareholders in Fleer Espanola, SA or Dr. Torrents, SA, pursuant to the By-Laws
of Fleer Espanola, SA or Dr. Torrents, SA, any and all proceeds from such sale
thereof as determined under said By-Laws;
(c) All of the fixed assets owned by Seller and used in connection
with the Confection Operations, including, without limitation, machinery,
equipment, computer equipment and hardware, furniture, fixtures, leasehold
improvements, office furnishings, telephone systems, office supplies and other
equipment wherever located (collectively, the "Fixed Assets") as specifically
set forth in this Schedule 1.1;
(d) All tradenames, tradename rights, trademarks (including
registrations and applications therefor), trademark rights, logos, trade dress,
and goodwill associated therewith, of Seller and Xxxxx X. Xxxxx Corp.
(collectively, the "Trademarks") as specifically set forth on this Schedule
1.1;
(e) All unexpired leases of the Confection Operations, including
equipment leases and any rights to occupy real property, which Buyer shall have
assumed in accordance with the applicable provisions of the Bankruptcy Code and
thereupon assigned to Buyer pursuant to this Agreement, (collectively, the
"Assumed Leases") as specifically set forth on this Schedule 1.1;
(f) All of the accounts, royalties and trade receivables of the
Confection Operations, outstanding as of the Closing Date, excluding any
intercompany or related company accounts (collectively, the "Accounts
Receivable"), accounts receivable as of February 28, 1998, are set forth on
this Schedule 1.1;
(g) All inventory owned by Seller in connection with, or used to
operate, the Confection Operations, including goods, finished goods, raw
materials, packaging, supplies and personal property, wherever located on the
Closing Date (collectively, the "Inventory"), the types of Inventory as of
February 28, 1998 are set forth on this Schedule 1.1;
(h) All technology, know-how, processes, projects in development,
product formulations, lists of materials and suppliers, manufacturing methods
and procedures, quality control standards and methods, computer software
modifications, source codes, enhancements
-23-
and derivative works, intellectual property rights, patents, patent
applications, patent rights, inventions (whether or not patentable), trade
secrets, copyrights (including registrations and applications therefor) and
other proprietary information of the Confection Operations which can readily be
expressed in written documents (collectively, the "Technical Information");
(i) All books and records, files, documentation, correspondence,
customer lists, all advertising, packaging and promotional materials, business
records, financial, tax, manufacturing and purchase records, customers and
suppliers lists, repair and warranty records, manuals, literature, production
and inventory records, sales records, programs and software related to the
Confection Operations, documents relating to the ownership, use, maintenance,
or repair of any of the Purchased Assets, cost records, inventory records, and
copies of all financial, tax, and other books and records that Buyer, in its
good faith judgment, determines to be necessary for the operation of the
Confection Operations by Buyer after the Closing Date;
(j) All executory oral or written contracts and agreements, including
all of Seller's contract rights with respect to the Purchased Assets, sales and
purchase orders, and purchased product service and warranty agreements, all of
which Seller shall have assumed in accordance with the applicable provisions of
the Bankruptcy Code and thereupon assigned to Buyer pursuant to this Agreement,
(collectively, the "Assumed Contracts") as specifically set forth on this
Schedule 1.1;
(k) Whatever rights, title and interest Seller has in any licenses,
certificates, permits, computer software and programs including source codes
(subject to the rights of third party licensors) and 800 telephone numbers
relating to the Confection Operations to the extent the same are transferable;
(l) All advertising and promotional programs relating to the
Confection Operations as in effect on the Closing Date;
(m) All goodwill and other intangible property of the Confection
Operations;
(n) All other assets, including prepaid expenses and other assets, as
set forth on the February 28, 1998 balance sheet (attached to the Agreement as
Exhibit 2.3(d)) and/or the Closing Date Balance Sheet of the Confection
Operations.
All other assets, properties and rights of Seller which are not
specifically set forth in this Schedule 1.1 as Purchased Assets shall be
retained by Seller and not transferred hereunder (the "Excluded Assets"),
including, but not limited to, the following:
(v) Cash on hand, cash equivalents and bank deposits of the Confection
Operations on hand as of the Closing Date;
-24-
(w) All rights and remedies of Seller arising pursuant to Chapter 5 of
the Bankruptcy Code and other causes of action, claims and rights belonging to
the Confection Operations arising under federal or state law ("Causes of
Action");
(x) All insurance policies of the Confection Operations;
(y) Any asset of the Confection Operations sold or otherwise disposed
of in the ordinary course of business and not in violation of any of the
provisions of this Agreement between the date hereof and the Closing Date;
(z) Any and all real property of Seller in the United States,
including a parcel of real property contiguous to the property of the Byhalia,
Mississippi facility.
-25-
SCHEDULE 1.3
ASSUMED LIABILITIES
All of those certain debts, liabilities and obligations of the Seller
as attached hereto, including:
(a) All obligations and liabilities, arising after the Closing Date,
with respect to the Assumed Leases or Assumed Contracts, as set forth in
Schedule 1.1, including any obligations and liabilities under the open purchase
orders of the Confection Operations; and
(b) Debts, liabilities, obligations or costs associated with severance
of the Transferred Employees, including those listed on Schedule 6.5(a)(ii),
and any potential WARN Act liabilities; and
(c) All liabilities listed on the February 28, 1998 proforma balance
sheet (attached to the Agreement as Exhibit 2.3(d)) and/or the Closing Date
Balance Sheet of the Confection Operations, including, but not limited to,
liabilities incurred in the ordinary course of business;
(d) All liabilities and obligations to customers of Seller with net
credit balances, as specifically set forth on this Schedule 1.3;
(e) All unlisted liabilities totaling less than $25,000 to trade
creditors incurred in connection with the operation of the Confection
Operations prior to Closing.
-26-
