STOCK PURCHASE AGREEMENT
by and between
FLEMING COMPANIES, INC.
and
FRANZ HANIEL & CIE. GmbH
Dated as of July 15, 1994
TABLE OF CONTENTS
PAGE
ARTICLE I SALE OF SHARES . . . . . . . . . . . . . . . .
1
1.01 Closing . . . . . . . . . . . . . . . . . . .
1
1.02 Delivery of the Shares by Seller . . . . . . .
1
1.03 Delivery of the Consideration by Buyer . . . .
2
1.04 Letter of Credit . . . . . . . . . . . . . . .
2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER . . .
2
2.01 Ownership of Shares; Equity Capital
Structure . . . . . . . . . . . . . . . . . .
2
2.02 Organization; Authorization; Valid and
Binding Agreement . . . . . . . . . . . . . .
4
2.03 No Violation . . . . . . . . . . . . . . . . .
5
2.04 Financial Statements . . . . . . . . . . . . .
6
2.05 No Undisclosed Liabilities . . . . . . . . . .
7
2.06 Absence of Certain Changes . . . . . . . . . .
8
2.07 Certain Tax Matters . . . . . . . . . . . . .
11
2.08 Title to Properties; Encumbrances. . . . . . .
15
2.09 Inventory. . . . . . . . . . . . . . . . . . .
16
2.10 Receivables . . . . . . . . . . . . . . . . .
17
2.11 Proprietary Rights . . . . . . . . . . . . . .
17
2.12 Litigation . . . . . . . . . . . . . . . . . .
18
2.13 Insurance . . . . . . . . . . . . . . . . . .
19
2.14 Employee Benefit Plans . . . . . . . . . . . .
19
2.15 Contracts and Commitments . . . . . . . . . .
23
2.16 Labor Relations . . . . . . . . . . . . . . .
24
2.17 No Breach . . . . . . . . . . . . . . . . . .
25
2.18 Compliance with Applicable Law . . . . . . . .
26
2.19 Hazardous Materials . . . . . . . . . . . . .
26
2.20 Assets Necessary to Business . . . . . . . . .
28
2.21 Disclosure . . . . . . . . . . . . . . . . . .
28
2.22 Brokers . . . . . . . . . . . . . . . . . . .
28
2.23 Note Sales/Purchase Program . . . . . . . . .
29
2.24 Corporate Books and Records . . . . . . . . .
29
2.25 Environmental and Other Permits . . . . . . .
29
2.26 Customers . . . . . . . . . . . . . . . . . .
29
2.27 Key Employees. . . . . . . . . . . . . . . . . 30
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER . . .
30
3.01 Organization . . . . . . . . . . . . . . . . .
30
3.02 Authorization . . . . . . . . . . . . . . . .
30
3.03 Valid and Binding Agreement . . . . . . . . .
30
3.04 No Violation . . . . . . . . . . . . . . . . .
30
3.05 Disclosure . . . . . . . . . . . . . . . . . .
31
3.06 Purchase for Investment . . . . . . . . . . .
31
3.07 Brokers . . . . . . . . . . . . . . . . . . .
31
ARTICLE IV CERTAIN OBLIGATIONS OF THE PARTIES . . . . . .
31
4.01 Conduct of Business Pending the Closing . . .
31
4.02 Other Obligations of Seller Pending the
Closing . . . . . . . . . . . . . . . . . . .
34
(a) Access . . . . . . . . . . . . . . . . .
34
(b) Other Transactions. . . . . . . . . . . . 35
(c) Insurance . . . . . . . . . . . . . . . .
35
(d) Interim Financial Statements . . . . . .
35
4.03 Public Announcements . . . . . . . . . . . . .
35
4.04 HSR Act . . . . . . . . . . . . . . . . . . .
36
4.05 Other Action . . . . . . . . . . . . . . . . .
36
4.06 Consents and Best Efforts . . . . . . . . . .
36
4.07 Indebtedness . . . . . . . . . . . . . . . . .
37
4.08 Confidentiality . . . . . . . . . . . . . . .
37
4.09 Satisfaction of Certain Obligations . . . . .
38
4.10 Notification of Certain Matters . . . . . . .
38
4.11 Environmental Matters . . . . . . . . . . . .
39
4.12 Funded Debt . . . . . . . . . . . . . . . . .
39
4.13 Release of Indemnity Obligations . . . . . . .
39
4.14 Liability under the Multiemployer Plans. . . .
39
4.15 Insurance. . . . . . . . . . . . . . . . . . .
40
4.16 Change of Name . . . . . . . . . . . . . . . .
40
4.17 Tax Records. . . . . . . . . . . . . . . . . .
40
4.18 Fairness Opinion . . . . . . . . . . . . . . .
41
ARTICLE V CONDITIONS TO OBLIGATIONS OF THE PARTIES . . .
41
5.01 HSR Act . . . . . . . . . . . . . . . . . . .
41
5.02 No Injunction or Litigation . . . . . . . . .
41
ARTICLE VI CONDITIONS TO OBLIGATIONS OF BUYER . . . . . .
41
6.01 Representations and Warranties . . . . . . . .
41
6.02 Performance . . . . . . . . . . . . . . . . .
42
6.03 Consents . . . . . . . . . . . . . . . . . . .
42
6.04 Funded Debt . . . . . . . . . . . . . . . . .
42
6.05 Officers' Certificates . . . . . . . . . . . .
42
6.06 Opinions of Counsel to Seller . . . . . . . .
42
6.07 Resolutions of Seller. . . . . . . . . . . . .
42
6.08 Incumbency Certificate of Seller . . . . . . .
42
6.09 Seller's Obligations . . . . . . . . . . . . .
43
6.10 Environmental Matters. . . . . . . . . . . . .
43
6.11 Resignations of Directors. . . . . . . . . . .
43
6.12 Organizational Documents . . . . . . . . . . .
43
6.13 Minute Books . . . . . . . . . . . . . . . . .
43
6.14 Affidavit. . . . . . . . . . . . . . . . . . .
43
6.15 Good Standing; Qualification To Do Business. .
44
6.16 Release of Indemnity Obligations . . . . . . .
44
6.17 Letter of Credit . . . . . . . . . . . . . . .
44
6.18 Documents. . . . . . . . . . . . . . . . . . .
44
6.19 No Material Adverse Change . . . . . . . . . .
44
6.20 NationsBank Waiver . . . . . . . . . . . . . .
44
6.21 Employment Agreement . . . . . . . . . . . . .
44
6.22 The Trust. . . . . . . . . . . . . . . . . . .
45
6.23 Scrivner Shares. . . . . . . . . . . . . . . .
45
ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLER . . . . .
45
7.01 Representations and Warranties . . . . . . . .
45
7.02 Performance . . . . . . . . . . . . . . . . .
45
7.03 Officers' Certificates . . . . . . . . . . . .
45
7.04 Opinion of Counsel to Buyer . . . . . . . . .
45
7.05 Consents . . . . . . . . . . . . . . . . . . .
46
7.06 Documents . . . . . . . . . . . . . . . . . .
46
7.07 Resolutions of Buyer . . . . . . . . . . . . .
46
7.08 Incumbency Certificate of Buyer. . . . . . . .
46
7.09 NationsBank Waiver . . . . . . . . . . . . . .
46
7.10 Scrivner Shares. . . . . . . . . . . . . . . .
46
ARTICLE VIII SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION .
46
8.01 Survival of Representations . . . . . . . . . .
46
8.02 Statements as Representations . . . . . . . . .
47
8.03 Agreement to Indemnify . . . . . . . . . . . .
47
8.04 Limitation of Liability . . . . . . . . . . . .
47
8.05 Conditions of Indemnification . . . . . . . . .
50
8.06 Security for Seller's Indemnification . . . . .
51
8.07 Officers' and Directors' Insurance;
Indemnification . . . . . . . . . . . . . . . .
52
8.08 Remedies Exclusive . . . . . . . . . . . . . .
53
ARTICLE IX TERMINATION; AMENDMENT AND WAIVER . . . . . . .
53
9.01 Termination of Agreement . . . . . . . . . . .
53
9.02 Effect of Termination . . . . . . . . . . . . .
53
9.03 Amendment, Extension and Waiver . . . . . . . .
54
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . .
54
10.01 Commissions . . . . . . . . . . . . . . . . . .
54
10.02 Expenses; Taxes . . . . . . . . . . . . . . . .
54
10.03 Governing Law; Submission to Jurisdiction,
Waiver of Jury Trial. . . . . . . . . . . . . .
54
10.04 Assignment. . . . . . . . . . . . . . . . . . .
55
10.05 Entire Agreement . . . . . . . . . . . . . . .
55
10.06 Headings . . . . . . . . . . . . . . . . . . .
55
10.07 Notices . . . . . . . . . . . . . . . . . . . .
55
10.08 Counterparts . . . . . . . . . . . . . . . . .
57
10.09 Specific Performance . . . . . . . . . . . . .
57
10.10 Severability. . . . . . . . . . . . . . . . . .
57
10.11 Certain Definitions . . . . . . . . . . . . . .
57
10.12 Cut Off Date. . . . . . . . . . . . . . . . . .
58
10.13 Scrivner Employees. . . . . . . . . . . . . . .
58
EXHIBITS
Exhibit A Letter of Credit
Exhibit B The Sites
Exhibit C-1 Opinion of Milbank, Tweed, Hadley & McCloy
Exhibit C-2 Opinion of Martin von Gehren
Exhibit C-3 Opinion of James V. Barwick
Exhibit C-4 Opinion of Counsel to the Bank
Exhibit C-5 Opinion of Counsel to General Partnership
Exhibit D Opinion of McAfee & Taft A Professional
Corporation
INDEX TO SCHEDULES
Volume
Schedule 2.01 Subsidiaries
1
Schedule 2.02 Jurisdictions
1
Schedule 2.03 No Violations
1
Schedule 2.04 Financial Statements
1
Schedule 2.05A Undisclosed Liabilities
1
Schedule 2.05B Funded Debt
1
Schedule 2.06 Absence of Certain Changes
1
Schedule 2.07 Taxes
2
Schedule 2.08 Permitted Liens, Real Property and Leases
3
Schedule 2.09 Inventory
3
Schedule 2.10 Receivables
3
Schedule 2.11 Proprietary Rights
3
Schedule 2.12 Litigation
4
Schedule 2.13 Insurance
4
Schedule 2.14 Employee Benefit Plans
4
Schedule 2.15 Contracts
5
Schedule 2.16 Labor Relations
6
Schedule 2.17 No Breach
6
Schedule 2.18 Compliance with Laws
6
Schedule 2.19 Hazardous Materials
6
Hazardous Materials (cont'd)
7
Schedule 2.20 Assets Necessary to Business
7
Schedule 2.25 Permits
7
Schedule 2.26 Customers
7
Schedule 2.27 Key Employees
7
Schedule 4.01 Conduct of Business
7
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of the 15th day of
July, 1994 (the "Agreement"), between Fleming Companies, Inc., an
Oklahoma corporation (the "Buyer"), and Franz Haniel & Cie. GmbH,
a corporation organized under the laws of the Federal Republic of
Germany (the "Seller").
WHEREAS, Seller owns all of the issued and outstanding
shares of the common stock, par value $100.00 per share (the
"Shares"), of Haniel Corporation, a Delaware corporation (the
"Company"); and
WHEREAS, the Company is the owner of all of the issued
and outstanding shares of capital stock of Scrivner, Inc.
("Scrivner"), a Delaware corporation; and
WHEREAS, Seller desires to sell to Buyer, and Buyer
desires to purchase from Seller, the Shares.
NOW, THEREFORE, in consideration of the foregoing and
the
respective representations, warranties, covenants, agreements and
conditions set forth herein, the parties agree as follows:
ARTICLE I
SALE OF SHARES
1.01 Closing. Upon the terms and subject to the
conditions of this Agreement, the sale and purchase of the Shares
contemplated by this Agreement shall take place at a closing (the
"Closing") to be held at the offices of Milbank, Tweed, Hadley &
McCloy, One Chase Manhattan Plaza, New York, New York at 10:00
A.M.
New York time on the later to occur of (i) July 19, 1994 and (ii)
the first Tuesday that is at least three Business Days following
satisfaction of the conditions set forth in Section 5.01,
provided
all of the other conditions to the obligations the parties set
forth in Section 5.02 and in Articles VI and VII have been
satisfied or waived, or at such other place or at such other time
or on such other date as Seller and Buyer may mutually agree upon
in writing. The date of the Closing is sometimes referred to
herein as the "Closing Date."
1.02 Delivery of the Shares by Seller. At the
Closing,
Seller will deliver or cause to be delivered to Buyer the follow-
ing:
(a) A stock certificate or certificates
represent-
ing all of the Shares, accompanied by stock powers duly executed
in
blank, and otherwise in form acceptable to Buyer for transfer on
the books of the Company;
(b) The resignations of such officers and
members
of the board of directors of the Company and the Subsidiaries (as
defined herein) that Buyer may request which resignations shall
not
prejudice such officers' rights under any employment agreement;
(c) The stock books, stock ledgers, minute books
and corporate seals of the Company;
(d) A receipt for the Purchase Price (as defined
herein) as provided in Section 1.03 below; and
(e) All other documents, instruments or writings
required to be delivered by Seller at or prior to the Closing
pursuant to this Agreement or otherwise required in connection
herewith or reasonably requested by Buyer to be delivered by
Seller
at or prior to the Closing.
1.03 Delivery of the Consideration by Buyer. At the
Closing, Buyer will deliver or cause to be delivered to Seller
the
following:
(a) Immediately available funds to an account to
be designated by Seller (such designation to occur not later than
two Business Days prior to Closing) in a total amount equal to
$388
million (U.S.) or $776.00 (U.S.) per share (the "Purchase
Price").
(b) All other documents, instruments or writings
required to be delivered by Buyer at or prior to the Closing
pursuant to this Agreement or otherwise required in connection
herewith or reasonably requested by Seller to be delivered by
Buyer
at or prior to the Closing.
1.04 Letter of Credit. Buyer and Seller agree that as
security for Seller's indemnification provided in Article VIII of
this Agreement, Seller shall deliver to Buyer at Closing an
irrevocable letter of credit from Morgan Guaranty Trust Company
of
New York (the "Bank") substantially in the form of Exhibit A
annexed hereto and made a part hereof (the "Letter of Credit").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as
follows:
2.01 Ownership of Shares; Equity Capital Structure.
(a) Seller is the record and beneficial owner
of,
and upon consummation of the transactions contemplated hereby
Buyer
will acquire, good, valid and marketable title to, the Shares,
free
and clear of all liens, claims, options, pledges, security
interests, charges, encumbrances, equities, agreements and
restrictions whatsoever and, except as set forth in Schedule 2.01
delivered to Buyer by Seller upon the execution of this
Agreement,
the Company is the record and beneficial owner of, and upon
consummation of the transactions contemplated hereby the Company
will have good, valid and marketable title to all of the issued
and
outstanding capital stock of each of the Subsidiaries either
directly or indirectly through one or more of the Subsidiaries.
(b) The authorized capital stock of the Company
consists solely of 500,000 shares of common stock, par value
$100.00 per share, all of which shares are issued and
outstanding.
The Shares constitute all of the issued and outstanding shares of
capital stock of the Company. The authorized capital stock of
Scrivner consists of 17,200 shares of class B common stock, par
value $1,000 per share all of which shares are issued and
outstand-
ing and owned by the Company (the "Scrivner Shares") and 100
shares
of class A common stock, $1.00 par value, and 100 shares of
preferred stock, no par value, none of which has been issued.
All
of the Shares and the Scrivner Shares have been duly authorized
and
are validly issued and outstanding, fully paid and nonassessable
and are not subject to and were not issued in violation of any
preemptive rights.
(c) Except as set forth above, there are not
now,
and at the Closing there will not be, any shares of capital stock
of the Company or Scrivner issued or outstanding or any subscrip-
tions, options, warrants, calls, rights, convertible securities
or
other rights or other agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock or
other securities of the Company or Scrivner, or otherwise obli-
gating the Company or Scrivner to issue, transfer or sell any of
its respective securities or other instruments convertible into
or
exchangeable or exercisable for any securities of the Company or
Scrivner. All of the outstanding shares of capital stock of each
of the Subsidiaries other than Scrivner have been duly authorized
and are validly issued and are fully paid and non-assessable, are
not subject to and were not issued in violation of any preemptive
rights and, except as set forth in Schedule 2.01, are owned by
either the Company or another of the Subsidiaries free and clear
of
all liens, charges, claims or encumbrances. Each of the Partner-
ship Interests is owned free and clear of all liens, charges,
claims or encumbrances. Schedule 2.01 sets forth the name,
jurisdiction of incorporation and number of outstanding shares
and
the ownership of such shares of the Company and each of the
Subsidiaries including Scrivner. Schedule 2.01 sets forth the
general partnership in which the Company or any of the
Subsidiaries
holds an interest, the percentage ownership and the name of the
other partners. Except as set forth in Schedule 2.01, neither
the
Company nor any of the Subsidiaries has any investment in any
corporation, association, partnership, joint venture or other
entity or is obligated to make any such investment. Except as
set
forth in Schedule 2.01, there are not now, and at the Closing
there
will not be, any subscriptions, options, warrants, calls, rights,
convertible securities or other rights or other agreement,
arrangements or commitments of any character relating to the
issued
or unissued capital stock or other securities of any of the
Subsidiaries, or otherwise obligating the Company or any
Subsidiar-
ies to issue, transfer or sell any such securities or other
instruments convertible into or exchangeable or exercisable for
any
securities of the Subsidiaries. Except as set forth on Schedule
2.01, there are no, and at the Closing there will not be, any
voting trusts or other agreements or understandings to which
Seller, the Company, Scrivner or any of the other Subsidiaries is
a party or is bound with respect to the voting or transfer of the
capital stock of the Company or any of the Subsidiaries other
than
this Agreement. There are no outstanding contractual or other
obligations of the Company or any of the Subsidiaries to repur-
chase, redeem or otherwise acquire any shares of the Company or
Scrivner or any of the other Subsidiaries.
2.02 Organization; Authorization; Valid and Binding
Agreement.
(a) Seller is a corporation duly organized,
validly existing and in good standing under the laws of the
Federal
Republic of Germany. The Company and Scrivner are corporations
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Seller has the corporate power
and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
(b) Seller has duly authorized the execution and
delivery of this Agreement and the consummation of the
transactions
contemplated hereby. No further corporate actions on the part of
Seller are necessary to authorize the execution of this Agreement
or to consummate the transactions contemplated hereby.
(c) This Agreement constitutes a valid and
binding
agreement of Seller, enforceable against Seller in accordance
with
its terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium, and similar laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity.
(d) The Company and each of the Subsidiaries is
a
corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation
and
each of the general partnerships described in Schedule 2.01 is
organized and each of them has the corporate or partnership power
and authority, as the case may be, to carry on its business as
presently conducted, and to own, lease and operate the properties
and other assets (of every kind, nature, character and
description,
whether real, personal or mixed, whether tangible or intangible,
whether accrued, contingent or otherwise and wherever situated),
goodwill and business as a going concern which it owns, leases,
or
operates.
(e) Except as set forth in Schedule 2.02
delivered
by Seller to Buyer upon the execution of the Agreement, the
Company
and each of the Subsidiaries which is a corporation is duly
licensed or qualified to do business as a foreign corporation,
and
is in good standing, in each jurisdiction wherein the character
of
the assets or properties owned, leased or operated by it, or the
nature of its business, makes such licensing or qualification to
do
business necessary, except where failure to be so qualified would
not have a material adverse effect on the business, financial
position and results of operations of the Company and the Major
Subsidiaries (as herein defined) taken as a whole. Schedule 2.02
contains a complete list of each jurisdiction in which the
Company
and each of the Subsidiaries is qualified or registered to do
business.
2.03 No Violation. Except as set forth in Schedule
2.03
delivered by Seller to Buyer upon the execution of this
Agreement,
and except for compliance with the notice filing requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") which requirements have been met and the
waiting period provided for therein expired, neither the
execution
and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (a) violate or conflict
with
any statute, law, ordinance, rule, regulation, order, writ,
injunction, judgment or decree applicable to Seller, the Company
or
any of the Subsidiaries or by which any of their properties may
be
bound or affected, (b) violate or conflict with any provisions of
the respective Certificates of Incorporation or By-Laws (or other
comparable charter documents or partnership agreements relating
to
the Partnership Interests) of Seller, the Company or any of the
Subsidiaries, (c) constitute a violation of or a default or
breach
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the termination of,
accelerate the performance required by, or give rise to any right
of termination, acceleration, cancellation, or amendment under,
or
result in the creation of any mortgages, pledges, liens, security
interests, conditional sale agreements, encumbrances,
restrictions,
charges or claims of any kind (whether absolute, accrued, contin-
gent or otherwise) (collectively, "Liens") upon Seller, the
Company, any of the Subsidiaries or any of their assets or have
any
other adverse effect under, any term or provision of any
contract,
commitment, understanding, arrangement, agreement or restriction
of
any kind or character to which Seller, the Company or any of the
Subsidiaries is a party or by which any of them or any of their
respective assets or properties may be bound, subject or
affected,
or (d) cause, or give any person grounds to cause (with or
without
notice, the passage of time, or both), the maturity of any debt,
liability or obligation of the Company or any of the Subsidiaries
to be accelerated or increase any such liability or obligation of
the Company or any of the Subsidiaries except, in the case of
(a),
(c) or (d), where such violations, terminations, conflicts,
accelerations, defaults, breaches or grounds and rights of
termination, cancellation, acceleration and amendment would not
have a material adverse effect on the Company or any of the Major
Subsidiaries so affected or prevent or materially delay the
consummation of the transactions contemplated hereby. Except for
compliance with the notice filing requirements of the HSR Act
which
have been satisfied, and except as set forth in Schedule 2.03, no
filing with, notification to, and no permit, consent, approval,
authorization or action by any federal, state, local, foreign or
other governmental agency, instrumentality, commission,
authority,
board or body (collectively, a "Governmental Agency") is required
in connection with the execution, delivery and performance by
Seller, the Company or any of the Subsidiaries of this Agreement,
or the consummation by Seller, the Company or any of the Subsid-
iaries, as the case may be, of the transactions contemplated
hereby, except where the failure to make such filing, give notice
to or to obtain such permit, consent, approval, authorization or
action would not have a material adverse effect on the Company
and
the Major Subsidiaries taken as a whole or prevent or materially
delay the consummation of the transactions contemplated hereby.
Schedule 2.03 lists and describes all consents, approvals,
authorizations or orders of any Governmental Agency or other
third
party necessary for the authorization, execution and delivery by
Seller of this Agreement, and the consummation of the
transactions
contemplated hereby, except where the failure to obtain such
consent, approval, authorization or order would not have a
material
adverse effect on the Company and the Major Subsidiaries taken as
a whole or prevent or materially delay the consummation of the
transactions contemplated hereby. Neither the execution and
delivery of this Agreement nor the consummation of the
transactions
contemplated hereby will constitute a tortious interference by
the
Company, the Subsidiaries or the Buyer with any contract or
business relationship to which Seller or any of its subsidiaries
is
a party.
2.04 Financial Statements. Attached hereto as
Schedule
2.04 delivered by Seller to Buyer upon the execution of this
Agreement, are (i) the audited consolidated balance sheets of the
Company and Subsidiaries as of December 31, 1993 (the "Company
Balance Sheet"), December 31, 1992 and December 31, 1991, (ii)
the
related consolidated statements of income, stockholders
investment
and cash flows of the Company and Subsidiaries for the years then
ended, (iii) the unaudited balance sheet of the Company and
Subsidiaries as of March 19, 1994 (the "Interim Balance Sheet")
and
(iv) the related consolidated statements of income, stockholders
investment and cash flows of the Company and Subsidiaries (the
financial statements referred to in the preceding clauses (i) and
(ii) are collectively referred to as the "Audited Financial
Statements" and shall be presented together with all related
notes
and schedules thereto, and accompanied by the reports thereon of
the Company's independent accountants; the financial statements
referred to in the preceding clauses (iii) and (iv) are
collective-
ly referred to as the "Unaudited Financial Statements". Except
as
otherwise disclosed therein, all such balance sheets (and the
footnotes and schedules thereto) (w) were prepared in accordance
with the books of account and other financial records of the
Company and the Subsidiaries, (x) fairly present the consolidated
financial position of the Company and Subsidiaries as of the
respective dates thereof and (y) have been prepared in accordance
with GAAP (as herein defined) applied on a consistent basis,
except
in the case of the Unaudited Financial Statements for the
omission
of all footnote disclosures and for normal year end adjustments.
Except as otherwise disclosed therein, all such statements of
income fairly present the results of operations of the Company
and
Subsidiaries for the respective periods indicated, in accordance
with GAAP applied on a consistent basis, except in the case of
the
Unaudited Financial Statements for the omission of all footnote
disclosures and for normal year end adjustments. Except for
updating the footnotes to the Audited Financial Statements, such
footnotes are applicable to the Unaudited Financial Statements
without additions or deletions other than a footnote relating to
this Agreement.
The Company represents in value less than one third of
the total fair market value of all of the assets of Seller and
its
affiliates determined immediately prior to Closing.
2.05 No Undisclosed Liabilities. The Company and the
Subsidiaries do not have any liabilities or obligations, except
(i)
as and to the extent of the amounts reflected or reserved against
in the Company Balance Sheet or in the notes thereto or in the
Interim Balance Sheet, (ii) as set forth in Schedule 2.05A
delivered by Seller to Buyer upon the execution of this
Agreement,
(iii) liabilities and obligations incurred in the ordinary course
of business and consistent with past practices since December 31,
1993, or (iv) for such liabilities or obligations as are not
material to the Company or any of the Major Subsidiaries. Except
as provided in the preceding sentence, Seller knows of no reason-
able basis for the assertion against the Company or any of the
Subsidiaries of any liability or obligation not fully reflected
or
reserved against in the Company Balance Sheet or in the notes
thereto or in the Interim Balance Sheet or incurred in the
ordinary
course of business and consistent with past practice since the
date
thereof.
Schedule 2.05B, delivered by Seller to Buyer upon the
execution of this Agreement, contains a description of all of the
Funded Debt and all other indebtedness of the Company and Subsid-
iaries, including obligor, obligee, amount owed, amount
outstanding
(principal and accrued interest), interest rate, scheduled
maturity, whether secured or unsecured, whether voluntarily
prepayable, whether the execution and delivery of this Agreement
and the performance of the transactions contemplated hereby gives
the obligee the right to declare a default and/or accelerate
payment and whether there are any prepayment penalties. Schedule
2.05B also contains the same information with respect to any
property or facility, where the Company or any Subsidiary is the
primary tenant, which property or facility was financed through
the
use of Industrial Development Bonds or Industrial Revenue Bonds
issued by a governmental authority.
2.06 Absence of Certain Changes. Except as set forth
in
Schedule 2.06 delivered by Seller to Buyer upon the execution of
this Agreement, since December 31, 1993 the businesses of the
Company and the Subsidiaries have been operated in the usual and
ordinary course, consistent with past practices. As
amplification
and not limitation of the foregoing, except as set forth in
Schedule 2.06, since December 31, 1993, there has not been:
(a) any material change in the business, opera-
tions or financial position of the Company or any of the Major
Subsidiaries from that reflected in the Audited Financial Stat-
ements or the Unaudited Financial Statements, other than those
occurring as a result of the general economic conditions or other
developments which are not unique to the Company or the
Subsidiar-
ies but also affect other persons who are engaged in the lines of
business in which the Company and the Subsidiaries are engaged;
(b) any damage, destruction or other casualty
loss
(whether or not covered by insurance) materially affecting the
business, operations or financial position of the Company or any
of
the Major Subsidiaries;
(c) any amendment, modification or termination
of
any existing, or entry into any new, contract, agreement, plan,
lease, license, permit or franchise which is, either individually
or in the aggregate, material to the business, operations or
financial position of the Company or any of the Major
Subsidiaries,
except for the amendment, modification or termination of
existing,
and the entry into of, new contracts, agreements, plans, leases,
licenses, permits or franchises in the ordinary course of
business;
(d) (A) any increase granted, promised or
announced in the wages, salaries, compensation, bonuses, in-
centives, pension or other benefits payable by the Company or any
Subsidiary to any of its employees, including, without
limitation,
any increase or change pursuant to any Benefit Plan or (B) any
increase established or promised of any benefits under any
Benefit
Plan, in either case except as required by Law (as herein
defined)
or any collective bargaining agreement or involving ordinary
increases consistent with the past practices of the Company or
such
Subsidiary;
(e) any disposition of any asset of the Company
or
any of the Subsidiaries which had a fair market or net book value
at the time of disposition of $100,000 or more;
(f) any labor dispute material to the business,
operations or financial position of the Company or any of the
Subsidiaries;
(g) any incurrence of any liabilities or obliga-
tions (whether absolute, accrued, contingent or otherwise and
whether due or to become due) by the Company or any of the
Subsidiaries except to the extent incurred in the ordinary course
of business and consistent with past practice; or any increase
of,
or any experience of any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other
reserves;
(h) any payment, discharge or satisfaction of
any
material claims, liabilities or obligations (whether absolute,
accrued, contingent or otherwise and whether due or to become
due)
of the Company or any of the Subsidiaries other than the payment,
discharge or satisfaction in the ordinary course of business and
consistent with past practice, including liabilities and obliga-
tions (i) reflected or reserved against in the Company Balance
Sheet, (ii) incurred in the ordinary course of business and
consistent with past practice since the date of the Company
Balance
Sheet, or (iii) incurred prior to the date of the Company Balance
Sheet in the ordinary course of business and consistent with past
practices;
(i) any mortgage, pledge, lien, security
interest,
encumbrance, restriction or charge of any kind, except for liens
for current taxes not yet due or other statutory liens for
obligations not yet due, placed, permitted or, if not in
existence
on December 31, 1993, allowed to exist on any property or assets
(real, personal or mixed, tangible or intangible) of the Company
or
any of the Subsidiaries;
(j) any write-off as uncollectible of any note
or
account receivable of the Company or any of the Subsidiaries,
except for write-offs in the ordinary course of business and
consistent with past practice;
(k) any cancellation of debts other than in the
ordinary course of business and consistent with past practice or
waiver of any claims or rights of more than $100,000 in value of
the Company or any of the Subsidiaries;
(l) any capital expenditure or commitment for
capital expenditures by the Company or any of the Subsidiaries
which individually per item exceeds $75,000 for replacements of
and
additions to property, plant, equipment or intangible capital
assets;
(m) any payment, loan or advance of any amount
by
the Company or any of the Subsidiaries to, or sale, transfer or
lease of any properties or assets (real, personal or mixed,
tangible or intangible) by the Company or any of the Subsidiaries
to, or any agreement or arrangement by the Company or any of the
Subsidiaries with, Seller or any of its affiliates or associates
(other than the Company or any of the Subsidiaries);
(n) any failure to replace or replenish
inventory
as such inventory may have been depleted from time to time,
collect
accounts receivable, pay accounts payable or otherwise manage its
working capital accounts in the ordinary course of business and
in
a manner consistent with past practices;
(o) any failure to pay any creditor any amount
owed to such creditor when due, other than in the ordinary course
of business consistent with past practice or except for matters
being contested in good faith;
(p) any redemption of any of the capital stock
or
any declaration or payment of any dividends or distributions
(whether in cash, securities or other property) to the holders of
capital stock of the Company or any Subsidiary or otherwise,
other
than dividends, distributions and redemptions declared, made or
paid by any Subsidiary solely to the Company or any other
Subsidi-
ary;
(q) any merger or consolidation with, or any
acquisition of an interest of 5% or more in, any entity or of a
substantial portion of the assets or business of any entity or
any
division or line of business thereof, or any other acquisition of
any material assets other than in the ordinary course of business
consistent with past practice;
(r) any issuance or sale of capital stock,
notes,
bonds or other securities, or options, warrants or other rights
to
acquire the same, of, or any other interest in, the Company or
any
Subsidiary;
(s) any agreement, arrangement or transaction
with
any directors, officers, employees or shareholders of the Company
or any Subsidiary (or with any relative, beneficiary, spouse or
affiliate of such person) except for (A) director's fees and
compensation to officers and employees of the Company or any of
the
Subsidiaries at rates not exceeding the rates of compensation in
effect as of the date hereof, or (B) advances made to employees
of
the Company and Subsidiaries for travel and other business
expenses
in reasonable amounts consistent with past practice or (C)
transactions pursuant to arrangements disclosed in Schedule 2.15;
(t) any writedown or writeup of (or failure to
write down or write up in accordance with GAAP consistent with
past
practice) the value of any inventories or receivables or revalua-
tion of any assets of the Company or any Subsidiary other than in
the ordinary course of business consistent with past practice and
in accordance with GAAP;
(u) any change in any method of accounting or
accounting practice or policy used by the Company or any Subsid-
iary, other than such changes required by GAAP;
(v) any failure to maintain the material assets
of
the Company and the Subsidiaries in accordance with good business
practice and in good operating condition and repair, ordinary
wear
and tear excepted;
(w) any lapse or termination of any material
Permit (as herein defined) that was issued or relates to the
Company or any Subsidiary or otherwise relates to any asset of
the
Company or Subsidiary or any failure to renew such Permit or
Environmental Permit or any insurance policy that is scheduled to
terminate or expire within 45 calendar days after the Closing
Date;
(x) any termination, discontinuation, closure or
disposition of any plant, facility or other business operation,
or
any layoff of any employees (other than layoffs of less than 50
employees in any six-month period in the ordinary course of
business consistent with past practice) or any implementation of
early retirement, separation or program providing early
retirement
window benefits within the meaning of Section 1.401(a)-4 of the
Treasury Regulations or any announcement of or plan regarding any
such action or program for the future;
(y) any charitable contribution in an amount
exceeding $1,000;
(z) any express or deemed election or settlement
or compromise of any liability with respect to Taxes of the
Company
or any Subsidiary (other than retail sales or retail use Taxes);
or
(aa) any agreement, whether in writing or other-
wise, to take or refrain from taking any action which, if taken
or
omitted to be taken subsequent to December 31, 1993, would render
any of the representations or warranties set forth in this
Section
2.06 untrue or incorrect.
2.07 Certain Tax Matters.
(a) The Company, and each of the Subsidiaries
has,
or shall cause to be prior to Closing, properly prepared and
filed
(and Seller has, or shall cause to be properly prepared and filed
prior to Closing, with respect to consolidated or combined
returns
in which the Company and any of the Subsidiaries are members of
the
same Affiliated Group (as defined below)), with the appropriate
governmental or taxing agency or authority ("Taxing Authority"),
all Tax Returns (as defined below) which are or were required to
be
filed by the Company or the Subsidiaries prior to Closing with
respect to all taxable years or the taxable periods which have
ended or end on or prior to the Closing Date. Except as set
forth
in Schedule 2.07 delivered by Seller to Buyer upon the execution
of
this Agreement, the Company and each of the Subsidiaries has
paid,
or shall cause to be paid, when due and payable, all Taxes (as
defined below) that are shown to be due and payable on the Tax
Returns described above. The reserves and allowances for Taxes
required by Section 2.07(e) hereof shall include all Taxes
payable
with respect to any Tax Returns of the Company or any Subsidiary
not due prior to the Closing but relating to tax periods (i)
ending
on or prior to the Closing, or (ii) commencing before but ending
after the Closing.
(b) Except as set forth on Schedule 2.07: (i) no
adjustment or deficiency relating to any Tax Return described in
Section 2.07(a) hereof has been proposed by any Taxing Authority
(insofar as either relates to the activities or income of the
Company or any Subsidiary or could result in liability of the
Company or any Subsidiary on the basis of joint and/or several
liability); (ii) there are no pending or, to the knowledge of
Seller, the Company and Subsidiaries threatened actions or
proceedings for the assessment or collection of Taxes against the
Company or any Subsidiary or (insofar as either relates to the
activities or income of the Company or any Subsidiary or could
result in liability of the Company or any Subsidiary on the basis
of joint and/or several liability) any corporation that was
included in the filing of a Tax Return with the Company or any
Subsidiary on a consolidated or combined basis; (iii) no
accelera-
tion of the vesting schedule for any property that is
substantially
unvested within the meaning of the regulations under Section 83
of
the Internal Revenue Code of 1986, as amended (the "Code") will
occur in connection with the transactions contemplated by this
Agreement; (iv) no adjustment or deficiency has been proposed by
any Taxing Authority relative to any Tax Return filed or required
to be filed by any partnership or joint venture of which the
Company or any Subsidiary is a member or any trust of which the
Company or any Subsidiary holds a beneficial interest; (v)
neither
the Company nor any Subsidiary is or has been a United States
real
property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code; and (vi) neither the
Company
nor any Subsidiary is subject to any accumulated earnings tax
penalty or personal holding company tax.
(c) Except as disclosed with reasonable
specific-
ity on Schedule 2.07: (i) there are no outstanding waivers or
agreements extending the statute of limitations for any period
with
respect to any Tax which the Company or any Subsidiary may be
subject; (ii) neither the Company nor any Subsidiary (A) has an
unrecaptured overall foreign loss within the meaning of Section
904(f) of the Code or (B) has participated in or cooperated with
an
international boycott within the meaning of Section 999 of the
Code; (iii) neither the Company nor any Subsidiary has any
income,
gain, loss or deduction reportable for a period ending after the
Closing Date but attributable to a transaction (e.g., an install-
ment sale) occurring in, or a change in accounting method made
for,
a period ending on or prior to the Closing Date which resulted in
a deferred reporting of income, gain, loss or deduction from such
transaction or from such change in accounting method; (iv)
neither
the Company nor any Subsidiary is obligated under any agreement
with respect to industrial development bonds or similar obliga-
tions, with respect to which the excludibility from gross income
of
the holder for federal income tax purposes could be affected by
the
transactions contemplated hereunder; and (v) no power of attorney
that is currently in force has been granted with respect to any
matter relating to Taxes that could affect the Company or a
Subsidiary.
(d) Schedule 2.07 lists and describes with
reasonable specificity: (i) all Tax Returns filed with respect to
the Company or any Subsidiary for the most recent taxable periods
ended on or before Closing, indicating (A) the jurisdictions to
which the Tax Returns relate, (B) the most recent Tax Return for
each relevant jurisdiction for which an audit has been completed
or
the statute of limitations has lapsed, and (C) all Tax Returns
that
currently are the subject of audit; (ii) the amount of any unused
net operating loss, net capital loss, foreign tax credit, other
tax
credits, or excess charitable contribution allocable to the
Company
or any Subsidiary, and the tax periods to which those losses,
credits, and contributions relate in each case as shown on any
Tax
Return; and (iii) any partnership or joint venture of which the
Company or any Subsidiary has been a member, or any trust in
which
the Company or any Subsidiary has had a beneficial interest,
during
any tax period for which the statute of limitation for assessment
of Taxes has not expired prior to the Closing.
(e) On the Company Balance Sheet, reserves and
allowances have been provided, and on the books of account and on
the Interim Balance Sheet and on any other balance sheet required
to be delivered by Seller to Buyer hereunder reserves and
allowanc-
es will be provided, in each case adequate to satisfy all
liabili-
ties for Taxes relating to the Company and the Subsidiaries for
periods through the Closing Date (without regard to the
materiality
thereof).
(f) Except as set forth in Schedule 2.07, the
Company has filed a consolidated Tax Return for federal income
tax
purposes since 1977, as common parent corporation of an
"affiliated
group" (within the meaning of Section 1504(a) of the Code which
included all Subsidiaries that met the definition of an
"includible
corporation" (within the meaning of Section 1504(b) of the Code)
for such period.
(g) Except as set forth in Schedule 2.07, no
deficiency for Taxes has been assessed against the Company or any
of the Subsidiaries which has not been paid in full.
(h) None of Seller, the Company or any of the
Subsidiaries has filed a consent pursuant to Section 341(f) of
the
Code with respect to the Company and any of the Subsidiaries, or
agreed to have Section 341(f)(2) of the Code apply to any
disposi-
tion of a subsection (f) asset (as such term is defined in
Section
341(f)(4) of the Code) owned by the Company or any of its Subsid-
iaries.
(i) Except as set forth on Schedule 2.07, there
are no liens for Taxes upon the assets of the Company or any of
the
Subsidiaries except for liens for Taxes not yet due.
(j) Except as set forth on Schedule 2.07, at the
Closing Date none of Seller, the Company nor any of the
Subsidiar-
ies is or will be a party to or have any liabilities or
obligations
under any agreement providing for the allocation, sharing or
indemnification of Taxes among any of them other than pursuant to
this Agreement.
(k) Except as set forth in Schedule 2.07,
neither
the Company nor any of the Subsidiaries is required to include in
income any adjustment pursuant to Section 481(a) of the Code by
reason of a voluntary change in accounting method initiated by
the
Company, the Subsidiaries, or any Affiliated Group or as a result
of the Tax Reform Act of 1986.
(l) Neither the Company nor any of the Subsid-
iaries is a party to any agreement, contract or arrangement that
would result, separately or in the aggregate, in the payment by
the
Company or any of the Subsidiaries of any "excess parachute
payment" within the meaning of Section 280G of the Code.
(m) Except as set forth in Schedule 2.07, no
property of the Company or any of its Subsidiaries is property
that
the Company or any of its Subsidiaries is or will be required to
treat as being owned by another person pursuant to Section
168(f)(8) of the Code (prior to its amendment by the Tax Reform
Act
of 1986) or is "tax-exempt use property" within the meaning of
Section 168(h) of the Code.
(n) The term "Tax Return," as used in this
Agreement, shall include any report, return, rendition or other
document or information required to be supplied to a federal,
state, local or foreign Taxing Authority in connection with
Taxes.
(o) The term "Affiliated Group," as used in this
Agreement, shall mean any group of corporations which heretofore
has filed or is currently filing a consolidated federal income
tax
return or a combined or consolidated tax return for state tax
purposes and of which the Company and/or any of the Subsidiaries
are or have been members.
(p) The term "Taxes," as used in this Agreement,
shall mean all taxes, charges, fees, levies or other assessments
including, without limitation, income, net worth, gross receipts,
excise, business and/or occupation, property, real property
transfer, use, service, license, payroll, franchise, sales,
withholding or employment taxes imposed by the United States or
any
state, local or foreign government or subdivision or agency
thereof
whether computed on a separate, consolidated, unitary, combined
or
any other basis, including all interest, additions, and penalties
thereon.
2.08 Title to Properties; Encumbrances.
(a) The Company or a Subsidiary has good, valid
and marketable title to all the material assets, rights and
property, real, personal or mixed, tangible or intangible, owned,
used or useful in the operations of the Company and the Subsid-
iaries, including, without limitation, (i) all the material
assets
reflected in the Company Balance Sheet (except for assets
disposed
of since December 31, 1993 by the Company and the Subsidiaries)
and
(ii) all tangible and intangible material assets, agreements,
leases, licenses, and permits used by or useful to the Company
and
the Subsidiaries which exist or are in effect as of the date
hereof
or at any time through the Closing, including the leasehold
estates
covering assets leased to the Company or the Subsidiaries and
assets acquired between the date hereof and the Closing Date free
and clear of all Liens, except (w) as set forth in Schedule 2.08
delivered by Seller to Buyer upon the execution of this
Agreement,
(x) Liens for current taxes not yet delinquent and taxes for
which
adequate provision is made in the Company Balance Sheet, (y)
statutory liens for obligations not yet due and (z) minor
imperfec-
tions of title and encumbrances, if any, which are not
substantial
in amount, do not materially detract from the value of the
property
subject thereto and do not impair the use of such properties and
assets or the business and operations of the Company and the
Subsidiaries (such Liens referred to in clauses (w), (x), (y) and
(z) of this sentence are hereinafter referred to as "Permitted
Liens").
(b) Except as set forth on Schedule 2.08, to the
knowledge of Seller, the Company's and the Subsidiaries' struc-
tures, plants and equipment are structurally sound, in good
operating condition and repair, ordinary wear and tear excepted,
and not in need of repair, other than ordinary and routine
repairs
and adjustments.
(c) Schedule 2.08 contains a list of all real
property owned by the Company or a Subsidiary and material real
property leases and subleases to which the Company or a
Subsidiary
is a party.
2.09 Inventory. The inventory of the Company and the
Subsidiaries, whether reflected in the Company Balance Sheet or
Interim Balance Sheet or otherwise, consists of a quality and
quantity usable and salable in the ordinary course of business
without discount or reduction except in the ordinary course of
business consistent with past practices and subject to normal and
customary allowances in the food wholesale and retail industry
for
spoilage, damage and outdated items. The quantities of the
Company's and the Subsidiaries' inventory are reasonable and
warranted in the present and anticipated circumstances of their
businesses. Subject to amounts reserved therefor on the Company
Balance Sheet, the values at which all inventories are carried on
the Company Balance Sheet reflect the historical inventory
valuation policy of the Company and the Subsidiaries of stating
such inventories at the lower of cost (determined as respects the
majority of the inventory on the last-in, first-out method) or
market value and all inventories are valued such that the Company
and the Subsidiaries will earn their customary gross margins
thereon. Except as set forth on Schedule 2.09 delivered by
Seller
to Buyer upon the execution of this Agreement, the Company or a
Subsidiary, as the case may be, has good and marketable title to
the inventories free and clear of all encumbrances. The invento-
ries of the Company and the Subsidiaries do not consist of, in
any
material amount, items that are obsolete, damaged or slow-moving.
The inventories reflected in the Company Balance Sheet or the
Interim Balance Sheet or in the books of account of the Company
or
the Subsidiaries do not consist of any items held on consignment.
Neither the Company nor any Subsidiary is under any obligation or
liability with respect to accepting returns of inventory or
merchandise in the possession of their customers other than in
the
ordinary course of business consistent with past practice. No
clearance or extraordinary sale of the inventories has been
conducted since December 31, 1993 other than in the ordinary
course
of business consistent with past practices. Neither the Company
nor any Subsidiary has acquired or committed to acquire inventory
for sale which is not of a quality and quantity usable in the
ordinary course of business within a reasonable period of time
and
consistent with past practice, nor has the Company or any Subsid-
iary changed the price of any inventory except for (i) price
reductions to reflect any reduction in the cost thereof to the
Company or any such Subsidiary, (ii) reductions and increases
responsive to normal competitive conditions and consistent with
the
Company's or such Subsidiary's past sales practices and (iii)
increases to reflect any increase in the cost thereof to the
Company or such Subsidiary. Schedule 2.09 is a complete list of
the addresses of all warehouses and other facilities in which the
inventories are located and the name and the chief executive
office
address of the Company or Subsidiary owning such warehouse or
other
facility. To the knowledge of Seller, the Company and the
Subsidiaries, all of the inventory of the Company and the Subsid-
iaries: (a) comply with the Federal Food, Drug and Cosmetic Act,
as
amended (the "FDA Act"), the Nutrition Labeling and Education Act
Amendments of 1993, and with the pure food and drug laws of each
of
the states of the United States into which any product would be
shipped by the Company, (b) are not adulterated or misbranded
within the meaning of the FDA Act or such state laws, (c) are not
prohibited from introduction into interstate commerce under
Section
404 or 505 of the FDA Act and (d) do not contain a misbranded
hazardous substance or a banned hazardous substance.
2.10 Receivables. Schedule 2.10, delivered by Seller
to
Buyer upon the execution of this Agreement, sets forth an aged
list
of the wholesale receivables of the Company and the Subsidiaries
as
of May 14, 1994 showing separately those trade receivables for
wholesale operations that as of such date have been outstanding
(i)
7 days or less, (ii) 8 to 14 days, (iii) 15 to 21 days, and (iv)
more than 21 days and showing separately all other miscellaneous
wholesale receivables (e.g. coupon redemptions, vendor charge
backs, etc.) that as of such date have been outstanding (i) 29
days
or less, (ii) 30 to 59 days, (iii) 60 to 89 days and (iv) more
than
89 days . Except as disclosed in Schedule 2.10 or to the extent,
if any, reserved for on the Company Balance Sheet or the Interim
Balance Sheet, all receivables reflected on the Company Balance
Sheet arose from, and the receivables existing on the Closing
Date
will have arisen from, the sale of inventory or services to
persons
not affiliated with Seller, the Company or any Subsidiary and in
the ordinary course of their business consistent with past
practice. Except as reserved against on the Company Balance
Sheet
or the Interim Balance Sheet, the receivables referred to in the
preceding sentence constitute or will constitute, as the case may
be, valid receivables, and to the knowledge of Seller such
receivables are undisputed claims of the Company or a Subsidiary
not subject to valid claims of set-off or other defenses or
counterclaims other than normal cash discounts accrued in the
ordinary course of their business consistent with past practice.
All receivables reflected on the Company Balance Sheet or arising
from the date thereof until the Closing (subject to the reserve
for
bad debts reflected on the books and records of the Company and
the
Subsidiaries as of the Closing Date plus $5 million, and except
as
disclosed in Schedule 2.10) are or will be good and have been
collected or are or will be collectible through the utilization
of
collection efforts in the ordinary course of business consistent
with past practice.
2.11 Proprietary Rights. Schedule 2.11 delivered by
Seller to Buyer upon the execution of this Agreement, contains a
complete list and an accurate description of all trademarks,
trade
names, assumed names, service marks, logos, patents, patent
applications, copyrights and copyright registrations, and all
applications therefor, inventions, trade secrets, confidential
processes and formulae, and all other similar rights (other than
customer lists) presently owned or held by the Company or any of
the Subsidiaries, or with respect to which the Company or any of
the Subsidiaries owns or holds any license or other direct or
indirect interest or with respect to which Seller holds title for
the benefit of the Company and the Subsidiaries and which are
listed as such on Schedule 2.11 (collectively, the "Proprietary
Rights"); and no other Proprietary Rights are used in or are
necessary for the conduct of the Company's and the Subsidiaries'
businesses as presently conducted. To the knowledge of Seller,
except as so designated on Schedule 2.11, no Proprietary Rights
used by the Company or any of the Subsidiaries conflict with or
infringe any similar rights of any other person in the states
where
the Company and the Subsidiaries do business. To the knowledge
of
Seller, the Company and the Subsidiaries, no claims have been
asserted by any person with respect to the ownership, validity,
license or use of the Proprietary Rights by the Company or any of
the Subsidiaries, and, to the knowledge of Seller, the Company
and
the Subsidiaries, there is no basis for any such claim. The
consummation of the transactions contemplated hereby will not
alter
or impair any of the Proprietary Rights. Except as set forth on
Schedule 2.11, Seller does not know of any reasonable basis for
the
denial of any pending applications to register trademarks,
service
marks or copyrights or any pending patent applications from being
granted.
2.12 Litigation. Except as set forth in Part I of
Schedule 2.12 (which, with respect to each item of Litigation (as
herein defined) disclosed herein, sets forth the parties, nature
of
the proceeding, date and method commenced, amount of damages or
other relief sought, and if applicable, paid or granted)
delivered
by Seller to Buyer upon the execution of this Agreement, none of
the Litigation which is not Insured (as herein defined) would, if
determined adversely to the Company or the Subsidiaries, as the
case may be, individually or in the aggregate, have a material
adverse effect on the business, financial position or results or
operations of the Company or any of the Major Subsidiaries. To
Seller's knowledge, Part II of Schedule 2.12 lists all Litigation
with respect to the Company and the Subsidiaries that is not
Insured. Part III of Schedule 2.12 lists all Litigation with
respect to the Company and the Subsidiaries that is Insured.
Except as set forth on Schedule 2.12, to the knowledge of Seller,
there is no valid basis for any Litigation not described on
Schedule 2.12. As used herein, the term "Litigation" shall mean
any claims, actions, suits, proceedings, arbitrations or
investiga-
tions pending or, to the knowledge of Seller, threatened, by or
against the Company or any of the Subsidiaries or any properties
or
rights of any of them before any court, arbitrator or administr-
ative, governmental or regulatory body. As used herein, the term
"Insured" when used with respect to any Litigation shall mean
Litigation covered by the policies listed on Schedule 2.13 and
described in Section 2.13 below or any policies covering earlier
periods, without regard to whether amounts incurred for legal
fees
and expenses and amounts incurred for indemnity with respect to
any
Litigation falls within the deductibles or self-insured
retentions
under any of the policies and without regard to whether any such
amounts incurred are otherwise charged back to Seller, the
Company
or the Subsidiaries in any manner or to any extent by any insurer
under any such policies.
2.13 Insurance. (a) Schedule 2.13 delivered by
Seller
to Buyer upon the execution of this Agreement, sets forth a
complete description (name of the insurer, policy number,
premiums,
type of insurance, etc.) with respect to all policies of fire,
liability, product liability, worker's compensation, health,
property, casualty and bond and surety arrangements and other
forms
of insurance presently in effect with respect to the Company and
the Subsidiaries (true and complete copies of policies with
respect
to the Company and the Subsidiaries have heretofore been
delivered
to Buyer) under which the Company or any Subsidiary has been an
insured, a named insured or otherwise the principal beneficiary
of
coverage at any time within the past three years.
(b) With respect to each insurance policy: (i)
the
policy is legal, valid, binding and enforceable in accordance
with
its terms and, except for policies that have expired under their
terms in the ordinary course, is in full force and effect; (ii)
neither the Company nor any Subsidiary is in breach or default
(including any breach or default with respect to the payment of
premiums or the giving of notice), and no event has occurred
which,
with notice or the lapse of time, would constitute such a breach
or
default or permit termination or modification, under the policy;
and (iii) no party to the policy has repudiated, or given notice
of
an intent to repudiate, any provision thereof.
(c) No insurance policy listed on Schedule 2.13
will cease to be legal, valid, binding, enforceable in accordance
with its terms and in full force and effect on terms identical to
those in effect as of the date hereof as a result of the consum-
mation of the transactions contemplated by this Agreement.
2.14 Employee Benefit Plans. Except as otherwise set
forth on Schedule 2.14 delivered by Seller to Buyer upon the
execution of this Agreement:
(a) The Company and the Subsidiaries do not
currently sponsor, maintain or participate in and are not
required
to contribute to any employee benefit plan, as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974 as
amended ("ERISA"), any multiemployer plan ("Multiemployer
Plans")as
defined in Section 3(37)(A) or (D) of ERISA, any incentive
compensation plan, bonus plan, deferred compensation agreement or
arrangement, stock option, stock bonus and stock purchase plan or
to any other employee benefit plan (whether or not subject to
ERISA), program or arrangement of any kind whatsoever which
provides or is obligated to provide any kind of benefit (such
plans, benefit programs and agreements (excluding Multiemployer
Plans) are collectively referred to herein as the "Benefit
Plans").
For the purpose of this Section 2.14, references to the Company
and
its Subsidiaries shall also include any entity affiliated with
the
Company or its Subsidiaries under Sections 414(b), (c) or (m) of
the Code or Section 4001(b)(1) of ERISA (excluding any foreign
affiliate of the Company).
(b) All material obligations of the Company and
the Subsidiaries, whether arising by operation of law, by
contract
or by past custom, for payments to trusts or other funds or to
any
governmental agency or to any Benefit Plans or Multiemployer
Plans
have been paid, or adequate accruals for such payments have been
made by the Company and the Subsidiaries on their respective
books
of account as of December 31, 1993 and prior to June 11, 1994,
except accruals for such payments attributable solely to events
occurring subsequent to December 31, 1993, all of which material
accruals will have been made by the Company and each Subsidiary
on
its books of account as of June 11, 1994.
(c) All reports relating to the Benefit Plans
required to be filed with or furnished to any governmental body,
agency or court, and to the knowledge of Seller, the Company or
the
Subsidiaries to the participants or beneficiaries prior to the
date
hereof have been timely filed or furnished in accordance with
applicable law.
(d) There are no actions, suits or claims
pending
(other than routine claims for benefits), or to the knowledge of
the Company and its Subsidiaries , threatened against any of the
Benefit Plans or against the assets of any of such Benefit Plans.
(e) The Benefit Plans and related trust agree-
ments, if any, are valid and in full force and effect. Other
than
in respect of qualification requirements still subject to the
remedial amendment period under Section 401(b) of the Code, the
Internal Revenue Service has issued a favorable determination
with
respect to each Benefit Plan (and all amendments thereto) which
may
be and is intended to be qualified under Section 401(a) of the
Code
and no event has occurred since such favorable determinations
which, to the knowledge of the Company or its Subsidiaries,
adversely affects any such prior determination.
(f) Each Benefit Plan which is a "welfare
benefit
plan" (as defined in Section (3)(1) of ERISA) is either (i)
unfunded or (ii) funded through insurance contracts.
(g) Neither the Company nor any Subsidiary
participates in any Multiemployer Plan or in any employee Benefit
Plan which provides health and welfare benefits, and based upon
information provided to the Company by the applicable
Multiemployer
Plan sponsors, neither the Company nor any Subsidiary has as of
the
respective dates of the information provided, any withdrawal
liability with respect to any such Benefit Plan or Multiemployer
Plan and neither the Seller, the Company nor any Subsidiary has
any
knowledge that would render such representation inaccurate.
Neither the Company, Scrivner, nor any of the Subsidiaries has
committed any act or acts prior to Closing which has effected, or
could be reasonably expected to effect a partial or complete
withdrawal as such terms are defined under ERISA from any Multi-
employer Plan or Benefit Plan.
(h) Neither the Company nor any Subsidiary (i)
has
experienced any reportable event within the meaning of ERISA or
other event or condition which presents a material risk of the
termination of any pension Benefit Plan by the Pension Benefit
Guaranty Corporation ("PBGC"); (ii) has had any tax imposed on it
by the Internal Revenue Service for any violation under Section
4975 of the Code; or (iii) has engaged in any transaction which
could reasonably be expected to subject the Company or any of the
Subsidiaries or any such Benefit Plan to any liability for any
such
tax under Section 4975 of the Code.
(i) The terms of all Benefit Plans comply
substantially with ERISA, the Code and all applicable statutes,
orders or governmental rules and regulations. None of the
Benefit
Plans, nor any trust created thereunder has engaged in any non-
exempt material "prohibited transaction" as such term is defined
in
Section 4975 of the Internal Revenue Code and Section 406 of
ERISA
which involves the Company or any of its Subsidiaries.
(j) As to each Benefit Plan for which an Annual
Report (IRS Form 5500), including schedules, was filed by the
Company or any of the Subsidiaries under ERISA or the Code, no
material liabilities with respect to any such Benefit Plan
existed
on the date of the financial statements contained in the most
recent Annual Report except as disclosed therein, and no material
adverse change has occurred with respect to the financial state-
ments covered by such Annual Report since the date thereof.
(k) To the knowledge of the Company, there is no
issue relating to any Benefit Plan maintained or established for
employees of the Company or the Subsidiaries which is pending
before the Internal Revenue Service, the Department of Labor or
any
other governmental agency or court.
(l) As of the last day of the last plan year for
which the Company has received such information, the aggregate
fair
market value of the assets of the Benefit Plans which are defined
benefit pension plans under ERISA (excluding for these purposes
any
accrued but unpaid contributions) equalled or exceeded the
present
value of all benefits accrued under such employee pension plans
determined on an ongoing basis and on a termination basis using
the
assumptions established by the PBGC as in effect on such date.
(m) As to any Benefit Plan subject to Title IV
of
ERISA, (i) there has been no event or condition that presents the
risk of termination of any such Benefit Plan, (ii) no accumulated
funding deficiency, whether or not waived, within the meaning of
Section 302 of ERISA or Section 412 of the Code has been
incurred,
(iii) no reportable event within the meaning of Section 4043 of
ERISA (for which the disclosure requirements of Regulation Section
2615.3
promulgated by the PBGC have not been waived) has occurred, (iv)
no
notice of intent to terminate the Benefit Plan has been given
under
Section 4041 of ERISA, (v) no proceeding has been instituted
under
Section 4042 of ERISA to terminate any such Benefit Plan, (vi) no
liability to the PBGC has been incurred (other than PBGC
insurance
premiums), and, (vii) as to any such Benefit Plan intended to be
qualified under Section 401 of the Code, to the knowledge of the
Company there has been no termination or partial termination of
any
such Benefit Plan within the meaning of Section 411(d)(3) of the
Code.
(n) To the knowledge of the Company, no act,
omission or transaction has occurred which could result in
imposition on the Company or its Subsidiaries of (i) a breach of
fiduciary duty liability under Section 409 of ERISA, or (ii) a
civil penalty assessed pursuant to subsections (c), (i) or (l) of
Section 502 of ERISA.
(o) There have been no payments made or agree-
ments entered into with respect to any individual employed by the
Company or any Subsidiary which as a result of this transaction
would result in the imposition of the sanctions imposed under
Sections 280G and 4999 of the Code.
(p) Neither the Company nor any Subsidiary has
any
liabilities or other obligations, whether actual or contingent,
with respect to the Benefit Plans, including, without limitation,
liability for post-retirement medical benefits, post-retirement
life insurance benefits or severance benefits excluding routine
premiums due under any Benefit Plan that is an employee welfare
benefit plan as defined in Section 3(l) of ERISA.
(q) Seller has listed in Schedule 2.14 and made
available to Buyer, or will make available to Buyer prior to the
Closing, true, complete and correct copies of (i) all Benefit
Plans
(including amendments), (ii) all summary plan descriptions
(whether
or not required to be furnished under ERISA), (iii) all latest
Annual Report forms filed with respect to any such employee
benefit
plan, (iv) substantially all former employees who have elected as
of June 1, 1994 COBRA continuation coverage, and (v) the most
recent actuarial valuation and determination letters received
from
the Internal Revenue Service with respect to any such Benefit
Plan.
(r) Neither the Company nor any of its
Subsidiar-
ies is a party to any written or oral deferred or incentive
compensation, employment, severance, consulting or other similar
contract, arrangement or policy or labor contracts or collective
bargaining agreements relating to its employees which would
result
in any material adverse effect on the Company or any of its Major
Subsidiaries.
2.15 Contracts and Commitments. Except as set forth
in
Schedule 2.15 delivered by Seller to Buyer upon the execution of
this Agreement:
(a) Neither the Company nor any of the Subsid-
iaries is a party to any contract, commitment, arrangement or
understanding, written or oral, which (i) involves payments or
the
disbursements of money by or to the Company or the Subsidiaries
in
excess of $250,000 that is not cancelable on thirty (30) days
notice with other than a nominal penalty, (ii) has a duration of
twelve (12) months or more and involves transfers by or to the
Company or the Subsidiaries in excess of $25,000 per annum, (iii)
is a financing document, loan agreement, repurchase agreement,
credit accommodation (other than accounts receivable or accounts
payable resulting from the purchase or sale of inventory and
customer financing documents, in each case incurred and entered
into in the ordinary course of business and consistent with past
practices provided, however all loans or other extensions of
credit
to customers shall not be excluded) or agreement providing for
the
guarantee of the obligations of any party other than the Company
or
a Subsidiary, (iv) requires the purchase or sale of a required
amount of product not terminable on thirty (30) days or less
notice
with other than a nominal penalty or (v) involves both (A) the
Company or the Subsidiaries and (B) Seller or its affiliates
(other
than the Company and the Subsidiaries);
(b) Subject to obtaining any requisite consents
of
third parties as specified in Section 2.03 hereof, the legal
enforceability of the contracts, commitments, arrangements and
understandings referred to in Section 2.15(a) hereof (the "Con-
tracts") after the Closing will not be affected in any manner by
the execution and delivery of this Agreement or the consummation
of
the transactions contemplated hereby;
(c) No purchase commitment of the Company or any
of the Subsidiaries, or by which the Company or any of the
Subsidiaries is bound, is in excess of the normal, ordinary and
usual requirements of the Company and the Subsidiaries;
(d) Neither the Company nor any of the Subsid-
iaries is a party to or bound by (i) any outstanding contracts
with
officers, employees, agents, consultants, advisors, salesmen,
sales
representatives, distributors or dealers that are not cancelable
by
the Company or any of the Subsidiaries, as the case may be, on
notice of not longer than thirty (30) days and without liability,
penalty or premium or (ii) any agreements that contain any
severance or termination pay, liabilities or obligations or
change
of control provisions; and
(e) True and correct copies of all written
contracts, commitments, arrangements and understandings set forth
in Schedule 2.15 and true and correct summaries of all unwritten
contracts, commitments, arrangements and understandings set forth
in Schedule 2.15 have heretofore been delivered by or made
available to Buyer by Seller or the Company.
2.16 Labor Relations. Except as and to the extent set
forth in Schedule 2.16 delivered by Seller to Buyer upon the
execution of this Agreement:
(a) no collective bargaining agreement presently
covers (nor has any, in the past five years), covered, any
employees of the Company or any of the Subsidiaries, nor is any
currently being negotiated by the Company or any of the
Subsidiar-
ies and, to the knowledge of Seller, the Company and the
Subsidiar-
ies, no attempt to organize any group or all of the employees of
the Company or any of the Subsidiaries has been made or proposed
and is currently outstanding;
(b) to the knowledge of Seller there are no
controversies (other than controversies in respect of labor
contract negotiations arising in the ordinary course of
business),
strikes, slowdowns or work stoppages (other than isolated
individu-
al cases) pending or, to the knowledge of Seller, threatened
between the Company or any Subsidiary and any of their respective
employees, and neither the Company nor any Subsidiary has experi-
enced such controversy, strike, slowdown or work stoppage within
the past three years;
(c) neither the Company nor any Subsidiary has
breached or otherwise failed to comply with the material
provisions
of any collective bargaining or union contract and, to the
knowledge of Seller, there are no grievances outstanding against
the Company or any Subsidiary under any such agreement or
contract
which could reasonably be expected to have a material adverse
effect upon the Company, the Major Subsidiaries or their
business-
es;
(d) there are no unfair labor practice
complaints
pending against the Company or any Subsidiary before the National
Labor Relations Board or any Governmental Authority or any
current
union representation questions involving employees of the Company
or any Subsidiary which could have a material adverse effect upon
the Company, the Major Subsidiaries or their businesses;
(e) to the knowledge of Seller, the Company and
each Subsidiary is currently substantially in compliance with all
applicable Laws relating to the employment of labor, including
those related to wages, hours, collective bargaining and the
payment and withholding of taxes and other sums as required by
the
appropriate Governmental Authority and has withheld and paid to
the
appropriate Governmental Authority or is holding for payment not
yet due to such Governmental Authority all amounts required to be
withheld from employees of the Company or any Subsidiary and is
not
liable for any arrears of wages, taxes, penalties or other sums
for
failure to comply with any of the foregoing;
(f) the Company and each Subsidiary has paid in
full to all their respective employees or adequately accrued for
in
accordance with GAAP all wages, salaries, commissions, bonuses,
benefits and other compensation due to or on behalf of such
employees;
(g) there is no claim with respect to payment of
wages, salary or overtime pay that has been asserted and is now
pending or, to the knowledge of Seller, threatened before any
Governmental Authority with respect to any persons currently or
formerly employed by the Company or any Subsidiary;
(h) neither the Company nor any Subsidiary is a
party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Authority relating to employees or
employment practices;
(i) there is no charge or proceeding with
respect
to a violation of any occupational safety or health standards
that
has been asserted and is now pending or, to the knowledge of
Seller, threatened with respect to the Company or any Subsidiary;
and
(j) there is no charge of discrimination in
employment or employment practices, for any reason, including,
without limitation, age, gender, race, religion or other legally
protected category, which has been asserted and is now pending
or,
to the knowledge of Seller, threatened before the United States
Equal Employment Opportunity Commission, or any other
Governmental
Authority in any jurisdiction in which the Company or any Subsid-
iary has employed or currently employs any person.
2.17 No Breach. Each Contract is, except as specifi-
cally indicated herein or in Schedule 2.17 delivered by Seller to
Buyer upon the execution of this Agreement describing such
arrange-
ment, in full force and effect in all material respects. Except
as
specified in Schedule 2.17, there are no outstanding disputes
under
the Contracts, or, to the knowledge of Seller, the Company and
the
Subsidiaries, threatened cancellations of the Contracts and
neither
the Company nor any of the Subsidiaries has breached any
provision
of, nor does there exist any default in any material respect of,
or
event (including the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby) which
with the giving of notice or the passage of time or both would
become a breach or default in any material respect of, the terms
of
any Contract by the Company and the Subsidiaries except for such
breaches and defaults as would not, in the aggregate, have a
material adverse effect on the business, operations or financial
position of the Company or any of the Major Subsidiaries.
2.18 Compliance with Applicable Law. Except as set
forth in Schedule 2.18 delivered by Seller to Buyer upon the
execution of this Agreement, the Company and the Subsidiaries
have
in the past five years duly complied, and are presently duly
complying, in all material respects, with respect to each of
their
operations, real property, equipment and all other property,
leases, practices and all other aspects of each of their busi-
nesses, with all applicable laws (whether statutory or
otherwise),
rules, regulations, orders, ordinances, judgments or decrees of
all
governmental authorities (federal, state, local, foreign or
otherwise) (collectively, "Laws"), including, without limitation,
the Federal Occupational Safety and Health Act, ERISA, the
Americans With Disabilities Act of 1990, the Civil Rights Act of
1991 and all Laws relating to the safe conduct of business and
all
Laws relating to environmental protection and conservation.
Except
as described in Schedule 2.18, none of Seller, the Company or any
of the Subsidiaries has, in the past five years, received any
notification of any asserted present or past failure of the
Company
or any of the Subsidiaries to comply with any of such Laws except
for such failures as would not have a material adverse effect on
the business, operations or financial position of the Company and
the Subsidiaries taken as a whole.
2.19 Hazardous Material. (a) Except as set forth in
Schedule 2.19 delivered by Seller to Buyer upon the execution of
this Agreement, (i) any handling, transportation, storage,
treatment or usage of Hazardous Material (as defined below) that
has occurred on any tract of real property owned by the Company
or
any Subsidiary or real property covered by any real property
lease
to which the Company or a Subsidiary is a party, has been in
compliance with all applicable laws relating to the protection of
the environment (including without limitation, ambient air and
surface and subsurface soil and water), natural resources,
wildlife
or human health (the "Environmental Laws"), (ii) no leak, spill,
release, discharge, emission or disposal of any Hazardous
Material
has occurred on any such tract which would subject the property
to
remedial action under any Environmental Laws, (iii) each such
tract
is in substantial compliance with applicable Environmental Laws,
and (iv) each underground storage tank located on any such tract,
has been registered, maintained and operated in accordance with
all
applicable Environmental Laws. Schedule 2.19 lists and Seller
has
provided Buyer with full, accurate and complete copies of any and
all reports, studies, tests and other information in its
possession
or in the possession of the Company or any Subsidiary relating to
the presence or suspected presence of any Hazardous Material on
any
such tract or relating to the existence of any underground
storage
tank thereon and agrees that it will, promptly following its or
the
Company's or any Subsidiary's receipt thereof, furnish to Buyer
full, accurate and complete copies of any such reports, studies,
tests and other information hereafter obtained by Seller or the
Company or any Subsidiary on or prior to the Closing Date.
"Hazardous Material" means asbestos, petroleum (including without
limitation, oil, used oil, waste oil, gasoline, diesel and
petroleum based fuels), petroleum products and by-products,
petroleum wastes, petroleum contaminated soils, and any
substance,
material or waste which is regulated as "hazardous", "toxic" or
under any other similar designation by any local, state or
federal
governmental authority. Such term includes, without limitation,
(i) any material, substance or waste defined as a "hazardous
waste"
pursuant to Section 1004 of the Resource Conservation and
Recovery
Act (42 U.S.C. Section 6901, et seq.) ("RCRA"), (ii) any material,
substance or waste defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response Compensa-
tion and Liability Act (42 U.S.C. Section 9601, et seq.) ("CERCLA") or
(iii) any material, substance or waste defined as a "regulated
sub-
stance" pursuant to Subchapter IX of the Solid Waste Disposal Act
(42 U.S.C. Section 6991, et seq.).
(b) Except as disclosed in Schedule 2.19 (i)
Hazardous Materials have not been generated, used, treated,
handled
or stored on, or transported to or from, or released or disposed
on
or from any tract of real property owned by the Company or any
Subsidiary or any real property covered by any real property
lease
to which the Company or a Subsidiary is a party in violation of
any
Environmental Law, or, to the knowledge of Seller, any property
adjoining any such tract; (ii) the Company and the Subsidiaries
have disposed of all wastes, including those wastes containing
Hazardous Materials, in compliance with all applicable
Environmen-
tal Laws and Permits; (iii) there are no past, pending or, to the
knowledge of Seller, threatened actions against the Company or
any
Subsidiary relating to compliance with Environmental Laws or
asserting damages or injury to natural resources, wildlife or the
environment; (iv) no such tract or, to the knowledge of Seller,
any
property adjoining such tract, is listed or proposed for listing
on
the National Priorities List under CERCLA or on the Comprehensive
Environmental Response, Compensation and Liability Act
Information
System ("CERCLIS"), the Facility Index System ("FINDS"), RCRA,
Hazardous Waste Registrations Listing Report ; and (v) to the
knowledge of Seller, neither the Company nor any Subsidiary has
transported or arranged for the transportation of any Hazardous
Materials to any location that is listed or proposed for listing
on
the National Priorities List under CERCLA or on the CERCLIS or
FINDS or which is the subject of any environmental claim.
(c) Schedule 2.19 also contains a list of all
underground storage tanks including the street address and owner
thereof located on real property owned or leased by the Company
or
any of the Subsidiaries.
2.20 Assets Necessary to Business. Except as set
forth
in Schedule 2.20 delivered by Seller to Buyer upon the execution
of
this Agreement, the Company and each of the Subsidiaries has
good,
valid and marketable title to all properties and assets, real,
personal and mixed, tangible and intangible, individually or in
the
aggregate material to the operation of their respective
businesses,
and is a party to all leases, licenses and other agreements, and
holds such authorizations, permits and approvals of Governmental
Agencies and other third parties, as is reasonably necessary to
permit it lawfully to carry on its businesses as presently
conducted, and, upon the Closing, the Company and the
Subsidiaries
will have all such assets and rights necessary to conduct their
respective businesses substantially as conducted immediately
prior
to Closing. Except as set forth in Schedule 2.20, there is no
material usage by either the Company or any of the Subsidiaries
of
any assets, operations, services or personnel of Seller or any
affiliate of Seller and there is no material usage by Seller or
any
affiliate of Seller (other than the Company and the Subsidiaries)
of the assets, operations, services or personnel of the Company
or
any of the Subsidiaries.
2.21 Disclosure. No representation or warranty made
to
Buyer contained in this Agreement, and no statement contained in
any of the Schedules or any certificate, document or instrument
delivered by Seller, the Company or any Subsidiary pursuant
hereto
contains any untrue statement of a material fact or omits to
state
a material fact, necessary in order to make the statements
contained herein or therein, in light of the circumstances under
which they were made, not misleading.
2.22 Brokers. Other than the arrangement among
Seller,
the Company and J.P. Morgan Securities, Incorporated ("J.P.
Morgan"), neither the Seller nor any affiliate of the Seller
including the Company and Scrivner have entered into or will
enter
into any agreement, arrangement or understanding with any person
or
firm which will result in the obligation of Buyer or the Company,
Scrivner or any of their respective Subsidiaries to pay any
finder's fee, brokerage commission or similar payment in
connection
with the transactions contemplated hereby. The parties hereby
acknowledge the arrangement with respect to the transaction
contemplated by this Agreement between the Seller, the Company
and
J.P. Morgan, with respect to which all fees due J.P. Morgan will
be
paid by the Company or Scrivner.
2.23 Note Sales/Purchase Program. The execution and
delivery of this Agreement and the performance of the terms and
provisions hereof by Seller will not cause Company or Scrivner to
breach any of the agreements governing the Company's Note Sales/
Purchase Program.
2.24 Corporate Books and Records. The minute books of
the Company and the Subsidiaries contain accurate records in all
material respects of all meetings and accurately reflect in all
material respects all other actions taken by the stockholders,
Boards of Directors and all committees of the Boards of Directors
of the Company and the Subsidiaries. Complete and accurate
copies
of all such minute books and of the stock register of the Company
and each Subsidiary have been made available by Seller to Buyer.
2.25 Environmental and Other Permits. (a) Except as
disclosed on Schedule 2.25 delivered by Seller to Buyer upon the
execution of this Agreement, the Company and the Subsidiaries
currently hold all the health and safety, environmental and other
permits, licenses, authorizations, certificates, exemptions and
approvals of Governmental Authorities including without
limitation,
those issued under Environmental Laws (collectively, "Permits"),
necessary or proper for the current use, occupancy and operation
of
each material asset of the Company and the Subsidiaries and the
conduct of their business, and all such Permits are in full force
and effect. To the knowledge of Seller, none of Seller, the
Company or any Subsidiary has received any notice from any
Governmental Authority revoking, cancelling, rescinding,
materially
modifying or refusing to renew any Permit or providing written
notice of violations under any Environmental Law. Except as
disclosed on Schedule 2.25, the Company and each Subsidiary is in
all material respects in compliance with the Permits and the
requirements of the Permits. Schedule 2.25 identifies all
Permits
which will require the consent of any Governmental Authority in
the
event of the consummation of the transactions contemplated by
this
Agreement.
2.26 Customers. Listed on Schedule 2.26, delivered by
Seller to Buyer upon the execution of this Agreement, are the
names
and addresses of the ten most significant independent customers
(by
revenue) of the Company and the Subsidiaries considered as a
whole
for the twelve-month period ended May 14, 1994 and the amount for
which each such customer was invoiced during such period. Except
as disclosed on Schedule 2.26, none of Seller, the Company or any
Subsidiary has received any written notice, nor to the knowledge
of
Seller, is there any reason to believe that any of such customers
has since May 14, 1994 ceased, or will in the reasonably foresee-
able future cease, to use the products or services of the Company
or any Subsidiary, or has since May 14, 1994 substantially
reduced,
or will in the reasonably foreseeable future substantially
reduce,
the use of such products or services.
2.27 Key Employees. Schedule 2.27, delivered by
Seller
to Buyer upon the execution of this Agreement, lists the name,
place of employment, the current annual salary rates, bonuses,
deferred or contingent compensation, pension, accrued vacation,
"golden parachute" (as defined in Section 280G of the Code) and
other like benefits paid or payable (in cash or otherwise) in
1993
and 1994, the date of employment and a description of position
and
job function of each current salaried employee, officer, director
or consultant of the Company or any Subsidiary whose annual
compensation exceeded (or, in 1994, is expected to exceed)
$100,000.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as
follows:
3.01 Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws
of
the State of Oklahoma. Buyer has the corporate power and
authority
to enter into this Agreement and to consummate the transactions
contemplated hereby.
3.02 Authorization. Buyer has duly authorized the
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby. No further corporate
actions
on the part of Buyer are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby.
3.03 Valid and Binding Agreement. This Agreement
constitutes a valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms subject to applicable
bankruptcy, reorganization, insolvency, moratorium, and similar
laws affecting creditors' rights generally from time to time in
effect and to general principles of equity.
3.04 No Violation. Except for compliance with the
notice filing requirements of the HSR Act which have been satis-
fied, neither the execution and delivery of this Agreement nor
the
consummation by Buyer of the transactions contemplated hereby
will
(a) violate or conflict with any Law applicable to Buyer or by
which any of its properties may be bound or affected, or (b)
violate or conflict with any provisions of the Certificate of
Incorporation or By-Laws of Buyer. Except for compliance with
the
notice filing requirements of the HSR Act which have been satis-
fied, no filing with, notification to, and no permit, consent,
approval, authorization or action by, any Governmental Agency is
required in connection with the execution, delivery and
performance
by Buyer of this Agreement or the consummation by Buyer of the
transactions contemplated hereby except where the failure to make
such filing, give notice to or obtain such permit, consent,
approval, authorization or action would not have a material
adverse
effect on the Buyer and its material subsidiaries taken as a
whole,
or prevent or delay the consummation of the transactions contem-
plated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will constitute a tortious interference by Seller with any
contract or business relationship to which Buyer is a party.
3.05 Disclosure. No representation or warranty made
to
Seller contained in this Agreement, and no statement contained in
any certificate, document or instrument delivered by Buyer,
pursuant hereto contains any untrue statement of a material fact
or
omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circum-
stances under which they were made, not misleading.
3.06 Purchase for Investment. Buyer is purchasing the
Shares for investment and not with a view toward distribution,
except in compliance with applicable securities laws.
3.07 Brokers. Other than the arrangement between
Buyer
and Merrill Lynch & Co. ("Merrill Lynch"), neither Buyer nor any
affiliate of Buyer has entered into or will enter into any
agreement, arrangement or understanding with any person or firm
which will result in the obligation of Seller or any affiliate of
Seller to pay any finder's fee, brokerage commission or similar
payment in connection with the transactions contemplated hereby.
The parties hereby acknowledge the arrangement with respect to
this
transaction between Buyer and Merrill Lynch, with respect to
which
all fees due Merrill Lynch will be paid by Buyer.
ARTICLE IV
CERTAIN OBLIGATIONS OF THE PARTIES
4.01 Conduct of Business Pending the Closing. Seller
agrees that, except as provided in Schedule 4.01 delivered by
Seller to Buyer upon the execution of this Agreement, from the
date
hereof until the Closing, unless otherwise consented to by Buyer
in
writing:
Seller will cause the Company and each of the Subsid-
iaries to conduct their respective businesses in the ordinary
course and consistent with past practice. Seller will cause the
Company and each of the Subsidiaries to use commercially
reasonable
efforts to preserve intact their business, operations, organiza-
tion, goodwill and work force in a manner consistent with past
practices. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement or as
set
forth on a Schedule or with the prior written consent of Buyer,
from the date hereof to the Closing, Seller will not permit the
Company or any of the Subsidiaries to:
(a) Incur any obligations or liabilities
(whether
absolute, accrued, contingent or otherwise and whether due or to
become due), except items incurred in the ordinary course of
business and consistent with past practice.
(b) Pay, discharge or satisfy any Lien or
liability (whether absolute, accrued, contingent or otherwise and
whether due or to become due), other than Liens or liabilities
discharged or satisfied in the ordinary course of business and
consistent with past practices.
(c) Permit or allow any of the properties or
assets (whether real, personal or mixed, tangible or intangible)
of
the Company or any of the Subsidiaries to be mortgaged, pledged
or
subjected to any lien, encumbrance, restriction or charge of any
kind except Permitted Liens.
(d) Write off as uncollectible any of its notes
or
accounts receivable or any portion thereof, except for write offs
in the ordinary course of business, consistent with past practice
and at a rate and amount no greater than during the twelve months
ended December 31, 1993.
(e) Cancel or release any other debts or claims,
or waive any rights of value in excess of $100,000, or sell,
transfer or convey any of the properties or assets (whether real,
personal or mixed, tangible or intangible) of the Company or any
of
the Subsidiaries, except in the ordinary course of business and
consistent with past practice.
(f) Dispose of, permit to lapse, or otherwise
fail
to preserve any material Proprietary Rights (except for any right
not by its terms renewable), dispose of or permit to lapse any
material license, permit or other form of authorization (except
for
any such licenses, permits or other authorizations not by its
terms
renewable), dispose of or disclose to any person, other than
authorized representatives of Buyer, any trade secret, formula,
process or know-how or dispose of or fail to use its best efforts
not to disclose to any person, other than authorized representa-
tives of Buyer, any customer list.
(g) Grant any increase in the compensation of
any
director, officer or employee of the Company or any of the
Subsidiaries (including, without limitation, any increase
pursuant
to any bonus, pension, profit sharing or other plan or
commitment),
institute or adopt any new Plan for directors, officers or
employees of the Company or any of the Subsidiaries, or modify,
amend or terminate any existing Plan other than increases in the
ordinary course of business, consistent with past practice or as
required by law or agreements in effect on the date hereof.
(h) Make any pension, retirement, profit
sharing,
bonus, severance or other employee welfare or benefit payment to
any officer or employee of the Company or any of the
Subsidiaries,
except in the ordinary course of business and consistent with
past
practice or as required by law or agreements in effect on the
date
hereof.
(i) Declare, pay or make, or set aside for
payment
or making, any dividend or other distribution in respect of the
capital stock of the Company or any of the Subsidiaries (other
than
to the Company or any of its Subsidiaries), or directly or
indirectly redeem, purchase or otherwise acquire any of their
capital stock or other securities.
(j) Issue, authorize, or propose the issuance of
any shares of the capital stock of the Company or any of the
Subsidiaries or securities convertible into, or rights, warrants
or
options to acquire, any such shares or other convertible securi-
ties.
(k) Make any capital expenditure or commitment
for
capital expenditures which individually per item exceeds $75,000
or
in the aggregate exceeds $500,000, for replacements or additions
to
property, plant, equipment or intangible capital assets.
(l) Make any change in any method of financial
or
tax accounting or accounting practice for financial or tax
accounting purposes (except as required by Law and disclosed in
writing to Buyer), or permit any change in any assumptions
underlying or methods of calculating any bad debt, contingency or
other reserves.
(m) Pay, loan or advance any amount to or in
respect of, or sell, transfer or lease any properties, assets
(whether real, personal or mixed, tangible or intangible) or
services to, or enter into any agreement, arrangement or transac-
tion with, Seller, any of the officers or directors of Seller,
the
Company or any of the Subsidiaries, any affiliate or associate of
Seller, the Company or any of the Subsidiaries or of any of
Seller's or the Company's or any Subsidiaries officers or direc-
tors, or any business or entity in which Seller, the Company or
any
of the Subsidiaries, any officer or director of Seller, the
Company
or any of the Subsidiaries, or any affiliate or associate of any
such persons, has any direct or indirect interest, except for (A)
directors' fees and compensation to officers and employees of the
Company or any of the Subsidiaries at rates not exceeding the
rates
of compensation in effect as of the date hereof (as may be
adjusted
in accordance with Section 4.01(f) hereof), or (B) advances made
to
employees of the Company and Subsidiaries for travel and other
business expenses in reasonable amounts consistent with past
practice or (C) transactions pursuant to agreements disclosed in
Schedule 2.15.
(n) Enter into any lease of real or personal
property involving the annual expenditure of more than $50,000,
individually, or $200,000, in the aggregate.
(o) Terminate or amend or suffer the termination
or amendment of, or fail to perform in all material respects all
of
its obligations or suffer or permit any default to exist, under
any
contract, lease, agreement or license except for defaults and
failures to perform obligations which would not, in the
aggregate,
have a material adverse effect on the business operations or
financial position of the Company or any of the Major
Subsidiaries.
(p) (i) Discontinue its advertising and
promotion-
al activities or its pricing and purchasing policies, in either
case in any material respect; (ii) shorten or lengthen the
customary payment cycles for any of its payables or receivables;
(iii) exercise any rights of renewal pursuant to the terms of any
of the leases or subleases set forth on Schedule 2.08 which by
their terms would otherwise expire except only after notice to
Buyer and receipt of Buyer's prior written approval (which
approval
shall not be unreasonable withheld or delayed); and (iv) engage
in
any practice, take any action, fail to take any action or enter
into any transaction which could reasonably be expected to cause
any representation or warranty made by Seller to be untrue or
result in a breach of any covenant made by Seller in this Agree-
ment.
(q) Agree, whether in writing or otherwise, to
take any action prohibited in this Section 4.01.
4.02 Other Obligations of Seller Pending the Closing.
Seller agrees that from the date hereof until the Closing, unless
otherwise consented to by Buyer in writing:
(a) Access. Seller will, and will cause the
Company and the Subsidiaries to, permit Buyer, its agents,
financial advisors and attorneys and their representatives (the
"Buyer's Representatives") and Buyer's financing sources (the
"Buyer's Banks") full access, during normal business hours,
throughout the period prior to the Closing, to all of Seller's
(to
the extent solely related to the Company and the Subsidiaries),
the
Company's and the Subsidiaries' officers, directors, employees,
agents, accountants and counsel who have any knowledge relating
to
the Company or any Subsidiary or their business, property, books,
contracts, commitments and records and will furnish Buyer, the
Buyer's Representatives and the Buyer's Banks during such period
with all information concerning Seller's (to the extent solely
related to the Company and the Subsidiaries), the Company's and
the
Subsidiaries' businesses and their operations, assets,
liabilities
and prospects as Buyer, the Buyer's Representatives, and the
Buyer's Banks may reasonably request. Pending the Closing, Buyer
agrees to keep all such information confidential except that
Buyer
may deliver and disclose the same to Buyer's Representatives and
the Buyer's Banks, and to instruct Buyer's Representatives and
the
Buyer's Banks to keep such information confidential, all in
accordance with the Confidentiality Agreement between Buyer and
J.P. Morgan on behalf of the Company and Scrivner dated March 29,
1994 (the "Confidentiality Agreement").
(b) Other Transactions. Seller and its
affiliates
will not, and will cause the Company, each of the Subsidiaries,
and
their directors, officers, employees, agents and affiliates not
to,
directly or indirectly, solicit or initiate the submission of
proposals or offers from, or solicit, encourage, entertain or
enter
into any agreement, arrangement or understanding with, or engage
in
any discussions with, or furnish any information to, any person
or
entity, other than Buyer or Buyer's Representatives or Buyer's
Banks, with respect to (i) the acquisition of all or any part of
the Company or any of the Subsidiaries or their businesses, (ii)
any business combination with the Company or any of the Subsid-
iaries or (iii) any other extraordinary business transaction
involving or otherwise relating to the Company of any Subsidiary.
Should Seller, the Company or any of the Subsidiaries or any of
their respective affiliates or representatives, during such
period,
receive any offer or inquiry relating to such a transaction, or
obtain information that such an offer is likely to be made,
Seller
will provide Buyer with immediate notice thereof, which notice
will
include the identity of the prospective offeror and the price and
terms of any offer.
(c) Insurance. Seller will use its best
efforts
to maintain the insurance coverage specified in Schedule 2.13, or
policies providing substantially equivalent coverage, in full
force
and effect.
(d) Interim Financial Statements. As promptly
as
practicable after the end of each four week accounting period
prior
to the Closing, and including the period ending next before the
Closing Date, Seller will make available to Buyer such unaudited
interim financial statements of the Company and the Subsidiaries
as
of the end of such four week accounting period as are prepared by
the Company and the Subsidiaries consistent with past practice.
4.03 Public Announcements. Buyer, on the one hand,
and
Seller, on the other hand, agree that they will consult with each
other before issuing any press releases or otherwise making any
public statements with respect to this Agreement or the transac-
tions contemplated hereby and shall not issue any press release
or
make any public statement prior to such consultation, except as
may
be required by law or any listing agreements with a national
securities exchange.
4.04 HSR Act. Buyer and Seller agree that as of
11:59
p.m. July 1, 1994 the waiting period under the HSR Act expired.
4.05 Other Action. Each of the parties hereto shall
use
its best efforts to cause the fulfillment at the earliest practi-
cable date of all of the conditions to their respective
obligations
to consummate the transactions contemplated by this Agreement.
4.06 Consents and Best Efforts. (a) Subject to the
terms and conditions herein provided, the parties hereto agree to
use their respective best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this
Agreement. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of
this
Agreement, the proper officers and directors of each party to
this
Agreement shall, at the expense of the requesting party, take all
such necessary action and will execute any additional instruments
necessary to consummate the transactions contemplated hereby.
(b) Buyer and Seller shall, and Seller shall
cause
the Company and Scrivner to, as soon as practicable, commence to
use their respective best efforts required to (i) obtain all
waivers, consents, estoppel certificates (as requested),
approvals
and agreements of, and to give all notices and make all other
filings with, any third parties, including governmental
authorities, necessary and appropriate to authorize, approve or
permit the transaction contemplated by this Agreement and (ii)
defend and cooperate with each other in defending any lawsuits,
including appeals, whether individual or administrative and
whether
brought derivatively or on behalf of third parties (including
governmental agencies or officials) challenging this Agreement or
the consummation of the transactions contemplated hereby. The
Buyer will furnish to the Seller, and the Seller will furnish to
the Buyer, such necessary information and reasonable assistance
as
Seller, or Buyer, as the case may be, may request in connection
with its or their preparation of all necessary filings with any
third parties, including governmental authorities. The Buyer
will
furnish to the Seller, and the Seller will furnish to the Buyer,
copies of all correspondence, filings or communications (or
memoranda setting forth the substance thereof) between Buyer, or
the Seller or Buyer, or any of their respective representatives,
on
the one hand, and any governmental agency or authority, on the
other hand, with respect to this Agreement.
(c) Prior to the Closing Date, the Seller and
the
Buyer shall each use its respective best efforts to obtain the
consent or approval of each person whose consent or approval
shall
be required in order to permit the Seller and the Buyer, as the
case may be, to consummate the transaction contemplated by this
Agreement, including, without limitation, consents or waivers
from
the third parties identified on Schedule 2.03 hereof.
(d) Upon the terms and subject to the conditions
contained herein, each of the parties hereto covenants and agrees
to use its best efforts to take, or cause to be taken, all action
or do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated hereby.
(e) Notwithstanding anything to the contrary
contained herein, neither Seller nor Buyer shall be required to
expend any significant sum of money or suffer a significant
economic detriment in the fulfillment of its respective
obligations
under this Section 4.06.
4.07 Indebtedness. Seller will take such actions as
are
necessary to insure that, as of the Closing Date, the Company and
the Subsidiaries will not have Funded Debt in excess of the
amount
set forth in Section 6.04 of this Agreement provided, however,
that
Funded Debt may exceed the amount set forth in Section 6.04 by
ten
(10) percent (%) if such excess is the result of and has been
used
by the Company or its Subsidiaries to purchase inventory as
described in Section 2.09 necessary and requisite for the
business
operation of the Company and its Subsidiaries. Seller further
agrees to notify Buyer as soon as it shall become evident that
the
Funded Debt will exceed the amount set forth in Section 6.04 and
the amount of such excess.
4.08 Confidentiality. Seller acknowledges that Buyer
would be irreparably damaged if confidential information about
the
business of the Company or the Subsidiaries were disclosed to or
utilized on behalf of any person, firm, corporation or other
business organization which is in competition in any material
respect with any line or lines of business of the Company or any
of
the Subsidiaries. Seller covenants and agrees that it will not
and
will cause its agents, affiliates, investment bankers and legal
advisors (collectively, the "Seller's Representatives") not to,
at
any time, without the prior written consent of Buyer, use or
disclose any such confidential information, except to Buyer's
Representatives or Buyer's Banks, for a period of two (2) years
from the Closing in the same manner and to the same extent Buyer
and Buyer's Representatives are restricted from disclosing
"Evaluation Material" in the Confidentiality Agreement the terms,
provisions, restrictions and exceptions of which are incorporated
herein by reference.
4.09 Satisfaction of Certain Obligations.
(a) Buyer shall provide funds sufficient to
cause
the Company and Scrivner, contemporaneously with the Closing, to
satisfy in full (i) such of the Company's and Scrivner's Funded
Debt and other obligations as Buyer shall provide in writing to
Seller two (2) Business Days prior to Closing, and (ii) the fees
and expenses of the Company in connection with the transaction
contemplated hereby, including the fees of J.P. Morgan in the sum
of $4,950,000 (less the $675,000 of such fees previously paid
prior
to the date hereof) and J.P. Morgan's reasonable out of pocket
expenses.
(b) It is understood and agreed by Seller and
Buyer that any prepayment or other penalty obligation incurred in
respect of the Senior Notes due 2001 (Series A), the Senior Notes
due 2001 (Series B) and the Senior Subordinated Notes due 2001 by
Scrivner to The Prudential Insurance Company of America and
certain
other institutional holders in connection with or resulting from
the transaction contemplated hereby will be for the account of
Buyer if such transaction is consummated.
(c) It is further understood and agreed by
Seller
and Buyer that any prepayment or other penalty obligation
incurred
with respect to the consummation of the transaction contemplated
hereby or as the result of the prepayment by the Company or
Scrivner with funds provided by Buyer as contemplated by Section
4.09(a) under (i) the term bank loan with Bayerische Hypotheken-
und-Wechsel Bank Aktiengesellschaft, New York Branch, (ii) the
term
bank loan with Norddeutsche Landesbank Girozentrale, and (iii)
any
other obligations for borrowed money under which a LIBOR tranche
that has a maturity subsequent to the Closing of the transaction
described herein shall be for the account of Seller and shall be
paid by Seller to Scrivner prior to Closing.
(d) Seller covenants and agrees that prior to
Closing it will obtain a waiver from NationsBank of Texas, N.A.
with respect to acceleration of the notes purchased by it from
Scrivner under Scrivner's Note Purchase Program and resulting
from
the transactions contemplated by this Agreement.
4.10 Notification of Certain Matters. The Seller and
the Company shall give prompt notice to Buyer, and Buyer shall
give
prompt notice to Seller and the Company, of (i) the occurrence,
or
failure to occur, of any event which occurrence or failure would
be
likely to cause any representation or warranty of the notifying
parties contained in this Agreement to be untrue or inaccurate in
any material respect any time from the date hereof to the Closing
Date, and (ii) any material failure of the Company, Buyer or
Seller, as the case may be, to comply with or satisfy any
covenant,
condition or agreement to be complied with or satisfied by the
notifying parties hereunder. Any matters discovered by Buyer in
the course of its due diligence review or disclosed to Buyer by
Seller other than through this Agreement or in a Schedule, will
not
be deemed to cure any breach of any representation or warranty
made
in this Agreement whether made herein or at Closing. For all
purposes (including but not limited to Seller's indemnification
obligations under Article VIII hereof) the accuracy of the
representations and warranties made by Seller in this Agreement
shall be determined by reference to this Agreement and the
Schedules.
4.11 Environmental Matters. Seller shall cause to be
conducted Phase I Environmental Assessments ("Assessments") at
the
distribution centers, convenience store locations and other
locations listed on Exhibit B annexed hereto and made a part
hereof
(the "Environmental Assessment Sites" or "Sites") in accordance
with the specifications attached to Exhibit B as Appendix I (the
"Specifications"). The Assessments will be performed by DPRA
Incorporated, St. Paul, MN 55101 ("DPRA") and Environmental
Materials, Inc., Dallas, Texas 75240 ("EMI") and will include at
least one hand augured soil core sample from each Environmental
Assessment Site where an underground storage tank exists and
other
surface and subsurface soil and ground water samplings requested
by
Buyer. DPRA will be responsible for the Assessments at the
convenience store Sites and some distribution centers and EMI
will
be responsible for the Assessments at the remaining distribution
center Sites and other Sites set forth on Exhibit B. Seller
shall
deliver to Buyer a report of each Environmental Assessment Site
(the "Reports") listed on Exhibit B as required by and described
in
the Specifications on or before five (5) Business Days prior to
the
Closing. Each Report shall be addressed to Seller and Buyer.
4.12 Funded Debt. Seller shall cause the Company to
use
its best efforts to assist Buyer with the negotiations toward the
prepayment at Closing of the Funded Debt and the other
obligations
listed on Schedule 2.05B selected by Buyer.
4.13 Release of Indemnity Obligations. Seller
covenants
and agrees, on or prior to the Closing, to execute and deliver to
the Company, for the benefit of the Company and each Subsidiary,
a
general release and discharge, in form and substance satisfactory
to Buyer releasing and discharging the Company and each
Subsidiary
from any and all obligations to indemnify Seller or otherwise
hold
it harmless pursuant to any agreement or other arrangement
entered
into prior to the Closing.
4.14 Liability Under the Multiemployer Plans. To the
extent requested by Buyer, Seller shall use its reasonable best
efforts to obtain from the relevant plan sponsors and the
Multiemp-
loyer Plans and provide Buyer with a list of the amount of
liability of the Company and its Subsidiaries under any
Multiemplo-
yer Plan as defined in Section 2.14 hereof at least two (2)
Business days prior to Closing.
4.15 Insurance. At the time of Closing, all insurance
policies described in Schedule 2.13 shall be outstanding and duly
in force and effect unless the failure to maintain such policies
or
any of them is not within the control of the Company or one or
more
of the Subsidiaries.
4.16 Change of Name. From and after the Closing,
neither Buyer, the Company nor any of their Subsidiaries or
affiliates will use the name "Haniel", or any confusingly similar
name, in any business conducted by any of them, without the prior
written consent of Seller, and in furtherance thereof, Seller
shall, as of the Closing Date cause an amendment to the Company's
or any Subsidiary's Certificate (Articles) of Incorporation to
become effective changing the name of the Company or the
Subsidiary
to delete the name "Haniel" and Buyer shall, as soon after the
Closing Date as shall be practicable but in no event later than
fifteen (15) days following the Closing, remove, strike over or
otherwise obliterate all references to the name "Haniel" from all
materials constituting the property or assets of Buyer, the
Company
or any Subsidiary or affiliate, including, without limitation,
any
business cards, schedules, stationery, displays, signs,
advertising
material, manuals, forms and other materials, if such materials
are
distributed or made available or proposed to be distributed or
made
available to third parties.
4.17 Tax Records. With respect to the Company, any
Subsidiary, any partnership or joint venture of which the Company
or any Subsidiary is a member, or any trust of which the Company
or
any Subsidiary has a beneficial interest, the Company shall
maintain in its possession or control through the Closing: (i)
correct and complete copies of all Tax Returns, examination
reports, and statements of proposed adjustments or deficiencies
assessed against or agreed to by the Company or any Subsidiary
relating to any period for which the statute of limitations for
assessment of Taxes has not expired prior to Closing; (ii) a true
and complete copy of any tax-sharing or allocation agreement or
arrangement involving the Company or any Subsidiary and a true
and
complete description of any such unwritten or informal agreement
or
arrangement; (iii) depreciation schedules describing with reason-
able specificity the historical cost or other basis, adjusted tax
basis, depreciation method and accumulated depreciation of all
assets and properties of the Company and any Subsidiary as of the
most recent practical date, including, to the extent available,
the
adjusted tax basis of the Company in each Subsidiary in its stock
(or the amount of any excess loss account); and (iv) to the
extent
available, complete and correct copies of all pro forma federal
income Tax Returns of the Subsidiaries, prepared in connection
with
the Company's or any other consolidated federal income Tax
Return,
accompanied by a schedule reconciling the items in the pro forma
Tax Return to the items as included in the consolidated Tax
Return
for all taxable years for which the statute of limitations for
assessment of Taxes has not expired prior to Closing.
4.18 Fairness Opinion. Simultaneously upon the
execution of this Agreement, Merrill Lynch, Pierce, Fenner and
Smith Incorporated has delivered to Buyer a fairness opinion to
the
effect that the Purchase Price plus the Funded Debt (including
the
additional amount, if any, described in Section 4.07) plus the
prepayment of penalties or other penalty payments with respect to
certain senior notes of Scrivner, to be paid or assumed by Buyer
through the acquisition of the equity capital stock of the
Company
is fair to the Buyer from a financial point of view.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The respective obligations of Buyer and Seller
hereunder
are subject to the fulfillment, prior to the Closing, of each of
the following conditions, neither of which may be waived:
5.01 HSR Act. All waiting periods applicable to this
Agreement and the transactions contemplated hereby under the HSR
Act shall have expired which Seller and Buyer recognizes has
occurred effective as of 11:59 p.m., July 1, 1994.
5.02 No Injunction or Litigation. There shall not be
in
effect on the Closing Date any judgment, order, injunction or
decree of any court enjoining, prohibiting or otherwise making
illegal consummation of the transaction (or any material portion
thereof) contemplated by this Agreement or any pending litigation
with respect to which there is a substantial likelihood that such
litigation could have a material adverse effect on the business,
operation or financial position of any of Seller, Buyer or the
Company and its Subsidiaries taken as a whole.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the
fulfillment, prior to or at the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part
by Buyer):
6.01 Representations and Warranties. The representa-
tions and warranties made by Seller in this Agreement and the
statements of Seller contained in the Schedules, or in any other
agreement, instrument or certificate delivered by Seller pursuant
to this Agreement which are made subject to the qualification
that
they are true and correct in all material respects, shall be true
and correct when made and at and as of the Closing Date as though
made at and as of the Closing Date, and all other representations
and warranties made by Seller shall be true and correct in all
material respects when made and at and as of the Closing Date as
though such representations and warranties were made at and as of
such date.
6.02 Performance. Seller shall have performed and
complied with, in all material respects, all agreements,
covenants,
obligations and conditions required by this Agreement to be so
performed or complied with by Seller prior to or at the Closing.
6.03 Consents. Buyer shall have received copies of
all
consents, approvals, authorizations and orders necessary to
consummate the transactions contemplated hereby, including those
listed in Schedule 2.03, all of which shall be in form and
substance satisfactory to Buyer and shall continue to be in full
force and effect, unless the failure to obtain such consent,
approval, authorization or order, other than those listed on
Schedule 2.03, would not have a materially adverse effect on the
Company and the Subsidiaries taken as a whole or would not
prevent
or materially delay consummation of the transactions contemplated
hereby.
6.04 Funded Debt. As of the Closing, subject to the
exception set forth in Section 4.07, Funded Debt shall not exceed
the total sum of $662 million.
6.05 Officers' Certificates. Seller shall have
delivered to Buyer a certificate, dated the Closing Date and
executed by two (2) members of managing board of Seller,
certifying
as to the fulfillment of the conditions set forth in Sections
6.01,
6.02, 6.03 and 6.04 hereof.
6.06 Opinions of Counsel to Seller. Buyer shall have
received an opinion of Milbank Tweed Hadley & McCloy, special
United States counsel to Seller, an opinion from Martin von
Gehren,
inhouse legal counsel to Seller, an opinion from James V.
Barwick,
Vice President, General Counsel and Secretary of Scrivner, an
opinion from counsel to the Bank regarding the Letter of Credit
and
an opinion or opinions from counsel to the general partnerships
described on Schedule 2.01, each dated the Closing Date, in the
form of Exhibits C-1, C-2, C-3, C-4 and C-5 respectively, annexed
hereto.
6.07 Resolutions of Seller. Buyer shall have received
a true and complete copy, certified by the Chairman of the
Supervisory Board of Seller, of the resolutions duly and validly
adopted by the Supervisory Board of Seller evidencing its
authori-
zation of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
6.08 Incumbency Certificate of Seller. Buyer shall
have
received a duly notarized certified excerpt of the Commercial
Register of the District Court of Duisburg, Germany certifying
the
names of the persons authorized to sign this Agreement and the
other documents to be delivered hereunder on behalf of Seller and
appropriate evidence of the signatures of all persons signing
documents on behalf of Seller and delivered hereunder.
6.09 Seller's Obligations. Seller shall have provided
Buyer evidence reasonably satisfactory to Buyer that Seller has
complied with the provisions of Sections 4.09 (c)(i) and (ii) and
4.09(d) hereof and that Seller has appointed CT Corporation as
its
service agent in accordance with Section 10.03 hereof.
6.10 Environmental Matters. Seller shall have
delivered
to Buyer the Reports described in Section 4.11 hereof and the
Reports shall not have revealed the existence or reasonably
suspected existence of any fact that would render the
representations and warranties contained in Sections 2.19 and
2.25
hereof untrue.
6.11 Resignations of Directors. Buyer shall have
received the resignations, effective as of the Closing, of all
the
directors and officers of the Company and each Subsidiary which
is
a corporation, except for such persons as shall have been
designat-
ed in writing prior to the Closing by Buyer to Seller. Buyer
agrees that such resignations will not prejudice such director's
or
officer's rights under any written employment agreement disclosed
to Buyer under this Agreement.
6.12 Organizational Documents. Buyer shall have
received a copy of (i) the Certificates of Incorporation, as
amended (or similar organizational documents), of the Company and
of each Subsidiary which is a corporation, certified by the
secretary of state of the jurisdiction in which each such entity
is
incorporated or organized, as of a date not earlier than five
Business Days prior to the Closing Date (unless available only at
an earlier date) and accompanied by a certificate of the
Secretary
or Assistant Secretary of each such entity, dated as of the
Closing
Date, stating that no amendments have been made to such
Certificate
of Incorporation (or similar organizational documents) since such
date, and (ii) the Bylaws (or similar organizational documents)
of
the Company and of each Subsidiary, certified by the Secretary or
Assistant Secretary of each such entity.
6.13 Minute Books. Buyer shall have received a copy
of
the minute books and stock register of the Company and each
Subsidiary which is a corporation, certified by their respective
Secretaries or Assistant Secretaries as of the Closing Date and
all
of the issued and outstanding shares of capital stock of the
Company and the Subsidiaries as reflected in Schedule 2.01.
6.14 Affidavit. Buyer shall have received an
affidavit
from the Seller and an affidavit from the Company (which complies
with Section 1445(b)(3) of the Code), stating that the Company is
not and has not been a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during
the applicable period specified in Section 897(c)(1)(A)(ii) of
the
Code.
6.15 Good Standing; Qualification To Do Business.
Buyer
shall have received good standing certificates for the Company
and
for each Subsidiary which is a corporation from the secretary of
state of the jurisdiction of its incorporation and from each
jurisdiction in which each such entity is duly licensed or
qualified to do business as a foreign corporation, and in each
jurisdiction wherein the character of the assets or properties
make
such licensing or qualification to do business necessary, except
where failure to be so qualified would not have a material
adverse
effect on the business, financial position and results of opera-
tions of the Company and Major Subsidiaries taken as a whole, in
each case dated as of a date as close as practicable prior to the
Closing date.
6.16 Release of Indemnity Obligations. Buyer shall
have
received the general release and discharge from Seller referred
to
in Section 4.13 in form and substance satisfactory to Buyer in
its
sole and absolute discretion.
6.17 Letter of Credit. Seller shall have caused the
Letter of Credit (Exhibit A) to be issued and delivered to Buyer.
6.18 Documents. All documents to be delivered by
Seller
to Buyer at the Closing shall be in form and substance reasonably
satisfactory to Buyer.
6.19 No Material Adverse Change. Since the date of
this
Agreement, there shall not have occurred a material adverse
change
in the business, operations or financial position of the Company
and the Subsidiaries taken as a whole, other than those occurring
as a result of general economic conditions or other developments
which are not unique to the Company or the Subsidiaries but also
affect other persons who are engaged in the lines of business in
which the Company and the Subsidiaries are engaged.
6.20 NationsBank Waiver. The waiver described in
Section 4.09(d) shall be in full force and effect.
6.21 Employment Agreement. Simultaneously with the
Closing the Cancellation Agreement between Jerry D. Metcalf,
Chairman and Chief Executive Officer of Scrivner and Scrivner of
even date with the Agreement shall be in full force and effect
and
shall have closed in accordance with the terms and provisions
thereof.
6.22 The Trust. The Trust Agreement dated July 1,
1981,
among the Company, Seller and the trustees named therein (the
"Trust") shall have been terminated and all of the outstanding
shares of capital stock of the Company shall have been issued to
Buyer, free and clear of the Trust.
6.23 Scrivner Shares. Buyer and Seller shall have
received a letter of indemnification from First Chicago Trust
Company of New York agreeing to defend, indemnify and hold the
Company, the Seller and Scrivner harmless from and against any
and
all claims and demands, costs, damages and expenses (including
reasonable attorney's fee), which may, at any time, be made
against
any of them directly relating to the loss or destruction of the
original stock certificate representing 17,200 shares of
Scrivner,
Inc. Class B Common Stock.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller hereunder are subject to the
fulfillment, prior to or at the Closing, of each of the following
conditions (all or any of which may be waived in whole or in
part
by Seller):
7.01 Representations and Warranties. The representa-
tions and warranties made by Buyer in this Agreement, and the
statements of Buyer contained in any agreement, instrument or
certificate delivered by Buyer pursuant to this Agreement which
are
made subject to the qualification that they are true and correct
in
all material respects, shall be true and correct when made and at
and as of the Closing Date as though made at and as of the
Closing
Date, and all other representations and warranties made by Buyer
shall be true and correct in all material respects when made and
at and as of the Closing Date as though such representations and
warranties were made at and as of such date.
7.02 Performance. Buyer shall have performed and
complied with, in all material respects, all agreements,
covenants,
obligations and conditions required by this Agreement to so be
performed or complied with by it prior to or at the Closing.
7.03 Officers' Certificates. Buyer shall have
delivered
to Seller a certificate, dated the Closing Date and executed by
Buyer's Chairman, President and CEO or Vice Chairman, or one of
its
Executive or Senior Vice Presidents and Secretary, certifying as
to
the fulfillment of the conditions set forth in Sections 7.01 and
7.02 hereof.
7.04 Opinion of Counsel to Buyer. Seller shall have
received an opinion of McAfee & Taft A Professional Corporation,
counsel to Buyer, dated the Closing Date, in the form of Exhibit
D
annexed hereto.
7.05 Consents. Seller shall have received copies of
all
consents, approvals, authorizations and orders necessary to
consummate the transactions contemplated hereby, including those
listed in Schedule 2.03, all of which shall be in form and
substance satisfactory to Seller and shall continue to be in full
force and effect; provided, however, that the failure to obtain
any
such consent, approval, authorization or order shall not be a
condition to Seller's obligations hereunder unless Seller has
used
its best efforts to obtain such consent, approval, authorization
or order.
7.06 Documents. All documents to be delivered by
Buyer
to Seller at the Closing shall be in form and substance
reasonably
satisfactory to Seller.
7.07 Resolutions of Buyer. Seller shall have received
a true and complete copy, certified by the Secretary or an
Assistant Secretary of Buyer, of the resolutions duly and validly
adopted by the Board of Directors of Buyer evidencing its
authori-
zation of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
7.08 Incumbency Certificate of Buyer. Seller shall
have
received a certificate of the Secretary or an Assistant Secretary
of Buyer certifying the names and signatures of the officers of
Buyer authorized to sign this Agreement and the other documents
to
be delivered hereunder.
7.09 NationsBank Waiver. The waiver described in
Section 4.09(d) shall be in full force and effect.
7.10 Scrivner Shares. Buyer and Seller shall have
received a letter of indemnification from First Chicago Trust
Company of New York agreeing to defend, indemnify and hold the
Company, the Seller and Scrivner harmless from and against any
and
all claims and demands, costs, damages and expenses (including
reasonable attorney's fee), which may, at any time, be made
against
any of them directly relating to the loss or destruction of the
original stock certificate representing 17,200 shares of
Scrivner,
Inc. Class B Common Stock.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.01 Survival of Representations. Subject to Section
8.04 hereof, the representations and warranties made by Seller
contained in this Agreement (the "Surviving Seller Representa-
tions") and the representations and warranties made by Buyer
contained in this Agreement (the "Surviving Buyer
Representations")
and the covenants and agreements of each of Seller and Buyer (the
"Seller's Agreements" and the "Buyer's Agreements" respectively)
set forth in Article IV of this Agreement, shall survive the
Closing and any investigation at any time made by or on behalf of
any party. The representations and warranties herein shall be
deemed to be remade as of the Closing, as if made on the date
thereof.
8.02 Statements as Representations. All statements
contained in this Agreement, the Schedules, or any other
agreement,
instrument or certificate delivered pursuant hereto, shall be
deemed representations and warranties for all purposes of this
Agreement, including, without limitation, the references to
representations and warranties in Sections 6.01 and 7.01 hereof.
8.03 Agreement to Indemnify. (a) Subject to the terms
and conditions of this Article VIII, Seller hereby agrees to
indemnify, defend and hold harmless Buyer and its subsidiaries
(of
which it owns directly or through subsidiaries, 50% or more of
(x)
the stock of any class having power under ordinary circumstances
to
vote for the election of directors or (y) the capital, right to
profits or equity, however named), and each officer and director
of
Buyer, and their successors and assigns (collectively, the "Buyer
Group"), from and against all claims, actions or causes of
action,
assessments, demands, losses, damages, judgments, settlements,
liabilities, costs and expenses, including, without limitation,
interest, penalties and reasonable attorneys', accountants' and
consultants' fees and expenses of any nature whatsoever (but
excluding consequential damages) (collectively, "Damages"),
asserted against, resulting to, imposed upon or incurred by any
member of the Buyer Group, by reason of or resulting from a
breach
of any Surviving Seller Representation or any Seller Agreement;
(collectively, the "Buyer's Claims").
(b) Subject to the terms and conditions of this
Article VIII, Buyer hereby agrees to indemnify, defend and hold
harmless Seller and its subsidiaries, and each officer and
director
of Seller or of any of its subsidiaries (of which it owns
directly
or through subsidiaries, 50% or more of (x) the stock of any
class
having power under ordinary circumstances to vote for the
election
of directors or (y) the capital, right to profits or equity,
however named) and their successors and assigns (collectively,
the
"Seller Group"), from and against all Damages, asserted against,
resulting to, imposed upon or incurred by any member of the
Seller
Group, by reason of or resulting from a breach of any Surviving
Buyer Representation or any Buyer Agreement (collectively, the
"Seller Claims").
8.04 Limitation of Liability. The obligations and
liabilities of Seller with respect to Buyer Claims under Section
8.03 hereof to the Buyer Group and Buyer with respect to Seller
Claims under Section 8.03 hereof to the Seller Group shall be
subject to the following limitations:
(a) No indemnification shall be required to be
made by Seller under this Article VIII with respect to any
Buyer's
Claims, except to the extent that the aggregate amount of Damages
with respect to all of such claims incurred by the Buyer Group
exceeds $2 million (the "Seller's Cushion"). Notwithstanding the
foregoing, Seller shall not have any liability under this Section
8.04(a) for any single loss resulting in Damages of less than
$75,000 ("De Minimis Losses") provided, however, Damages arising
directly or indirectly from a breach of any covenant, representa-
tion or warranty contained in Sections 2.01, 2.07, 2.14, 4.09(c)
and 4.09(d) shall not be subject to the provision for De Minimis
Losses or Seller's Cushion (the "Excluded Damages") and Seller
shall, subject to Section 8.04(g), be required to indemnify the
Buyer Group in full for all Excluded Damages pursuant to this
Article VIII.
(b) No indemnification shall be required to be
made by Buyer under this Article VIII with respect to any
Seller's
Claims, except to the extent that the aggregate amount of Damages
with respect to all such claims incurred by the Seller group
exceeds $2 million (the "Buyer's Cushion"). Notwithstanding the
foregoing, Buyer shall not have any liability under this Section
8.04(b) for any De Minimis Losses.
(c) Seller shall be obligated to indemnify the
Buyer Group only for those Buyer's Claims as to which the Buyer
Group has given Seller written notice thereof on or prior to
eighteen (18) months following the Closing (subject to Section
8.04(h) below, whether or not such Buyer's Claims have then
actually been sustained), except those Buyer's Claims relating to
the covenants, representations, warranties and agreements set
forth
in Sections 2.14 and 2.19 hereof as to which the Buyer Group has
given written notice thereof on or prior to three (3) years
following the Closing and except those Buyer's Claims relating to
the covenants, representations, warranties and agreements
contained
in Sections 2.01 and 2.07 hereof as to which the Buyer Group has
given Seller written notice thereof on or prior to the expiration
of the applicable statute of limitation.
(d) Buyer shall be obligated to indemnify the
Seller Group only for the Seller's Claims, as to which the Seller
Group has given Buyer written notice thereof prior to eighteen
(18)
months following the Closing (subject to Section 8.04(h) below,
whether or not such Seller Claims have actually been sustained).
(e) The amount of Damages any party is required
to
pay to indemnify any other party pursuant to Section 8.03 as a
result of any Buyer's Claim or Seller's Claim shall be reduced to
the extent of any amounts actually received by the party seeking
indemnification after the Closing Date pursuant to the terms of
the
insurance policies or other contractual arrangements (if any)
covering such claim which the party seeking indemnification shall
in good faith seek to collect (without the requirement that it
resort to litigation or undue expense) before seeking to obtain
payment from the indemnifying party.
(f) The amount of Damages payable by the Seller
pursuant to Section 8.03 as a result of any Buyer's Claim shall
(i)
be reduced by the amount of any tax benefit actually realized by
any member of the Buyer Group as a result of such Buyer's Claim,
and (ii) to the extent required in accordance with applicable
law,
be reported as an adjustment to the Purchase Price, but, to the
extent required by law to be reported as taxable income by the
Buyer, the reduced amount (referred to in clause (i) hereof)
shall
be increased by the amount of any Taxes actually payable by any
member of the Buyer Group as a result of Seller's payment of
Damages for such Buyer's Claim.
(g) No indemnification shall be required to be
made by Seller under this Article VIII to the extent the
aggregate
amount of Damages incurred by the Buyer Group exceeds $30
million,
except for indemnification for Buyer's Claims relating to the
covenants, representations, warranties and agreements contained
in
Section 2.01 and Section 2.07(b)(v), hereof with respect to which
there shall be no limitation.
(h) No payment shall be required to be made by
any
party under this Article VIII with respect to any claim for
indemnification hereunder unless written notice of such claim,
setting forth in reasonable detail the specific facts and
circumstances which the party seeking indemnity believes in good
faith have resulted or can reasonably be expected to result in a
valid claim for indemnification under this Article VIII, shall
have
been delivered to the party from whom indemnification is sought
as
soon as practicable following the time that the indemnified party
discovered such claim, and in any event prior to the termination
of
the applicable period set forth in Sections 8.04(c) or (d) above.
(i) No indemnification shall be required to be
made by the Seller under this Article VIII for an assessment of
Taxes to the extent that: (x) the assessment reduces the
"deferred
tax liability" or the assessment creates or increases a "deferred
tax asset" (as those terms are defined in SFAS 109) but in the
case
of the deferred tax liability, only to the extent it is included
in
the reserves and allowances for Taxes required by Section
2.07(e);
(y) the assessment relates to Taxes Paid or payable with respect
to
(A) Tax returns not due prior to the Closing for periods ending
on
or prior to the Closing, or (B) the pre-Closing portion of a tax
period commencing before but ending after the Closing, but in the
case of (A) or (B) only to the extent that such Taxes represent
income taxes (exclusive of penalties for underpayment of
estimated
income taxes) attributable to taxable income that is derived from
1994 earnings determined in accordance with GAAP; or (z) the
aggregate after-tax cost of assessments of Taxes, increased by
the
after-tax cost of any reasonable expenses and fees paid to
attorneys and accountants, incurred with respect to such assess-
ments of Taxes, after reduction for $7,175,400 paid to the
Internal
Revenue Service prior to Closing with respect to the 1983 through
1987 tax periods and exclusive of any assessments of Taxes
described in clauses (x) and (y) of this Section 8.04(i), is less
than or equal to $10,854,739, increased by the amount of any
overpayments reflected in the 1993 income tax returns filed
subsequent to Closing.
8.05 Conditions of Indemnification. The obligations
and
liabilities of Seller to indemnify the Buyer Group and Buyer to
indemnify the Seller Group under Section 8.03 hereof with respect
to Buyer's Claims and Seller's Claims, respectively, resulting
from
the assertion of liability by third parties shall be subject to
the
following terms and conditions:
(a) The indemnified party shall give the
indemni-
fying party prompt notice of any such claim, and the indemnifying
party shall undertake the defense, compromise or settlement
thereof
by representatives of its own choosing reasonably satisfactory to
the indemnified party, provided that failure to provide such
notice
will not relieve the indemnifying party of its obligations
hereunder unless it is actually prejudiced by such failure to
receive such notice. If the indemnifying party, within ten (10)
Business Days after notice of any such claim, fails to commence
the
defense of such claim, the indemnified party will (upon further
notice to the indemnifying party) have the right to undertake the
defense, compromise or settlement of such claim on behalf of and
for the account and risk of indemnifying party; provided that the
failure by the indemnifying party to undertake the defense of any
such claim shall not be deemed an admission that such party has
an
obligation to indemnify the indemnified party pursuant to Section
8.03; provided that the indemnified party shall not settle any
such
claim as to which the indemnifying party has failed to undertake
the defense thereof without the consent of the indemnifying
party,
the consent shall not be unreasonably withheld or delayed, unless
the indemnified party waives its rights under Section 8.03 with
respect to such claim.
(b) Anything in this Section 8.05 to the
contrary
notwithstanding, (i) an indemnified party shall have the right,
at
its own cost and expense, to participate in the defense,
compromise
or settlement of such claim, (ii) the indemnifying party shall
not,
without the written consent of the indemnified party, settle or
compromise any claim or consent to the entry of any judgment (x)
which does not include as an unconditional term thereof the
giving
by the claimant or the plaintiff to the indemnified party a
release
from all liability in respect of such claim or (y) as a result of
which injunctive or other equitable relief would be imposed
against
the indemnified party and (iii) the indemnified party shall have
the right, at its own cost and expense, to control the defense or
settlement of that portion of any claim which seeks an order,
injunction or other equitable relief against the indemnified
party
which, if successful, could materially interfere with the
business,
operations, assets, financial condition or prospects of the
indemnified party; provided, however, that in connection with the
defense or settlement of the portion of such claim which seeks
equitable relief, the indemnified party shall cooperate with the
indemnifying party and use its reasonable best efforts to limit
any
liability that may arise from the damages portion of such claim.
8.06 Security for Seller's Indemnification. As
security
for performance of its indemnification obligations under this
Article VIII, Seller shall deliver the Letter of Credit (Exhibit
A)
in the initial amount of $30 million issued by the Bank naming
Buyer as beneficiary. Buyer, on behalf of itself or any member
of
the Buyer Group shall be able to draw on the Letter of Credit (i)
in an amount equal to the amount of any final nonappealable
judgment obtained by Buyer or any member of the Buyer Group
against
Seller on claims for Damages recoverable in accordance with this
Article VIII or (ii) with the written consent of Seller. The
Letter of Credit shall be for a term of three (3) years plus an
additional period of time that the Buyer Group or any member
thereof (a "Claimant") is pursuing to final judgment in good
faith
any Buyer's Claim of which Seller has been given written notice
in
accordance with Sections 8.04(c) and 8.04(h) prior to the end of
such three (3) year period (a "Contested Claim"). If the Bank
elects not to extend the Letter of Credit beyond the additional
one
(1) year period or beyond any six (6) month extension as
described
in the Letter of Credit and provides Buyer and Seller with the
Termination Notice as provided for therein, and provided that the
Claimant continues to pursue such Contested Claims to final
judgment in good faith, Seller shall either (a) deliver to Buyer
a
replacement letter of credit issued by the Bank or another bank
reasonably acceptable to Buyer in an initial amount equal to the
amount then available to be drawn under the Letter of Credit in
respect of such Contested Claims and which contains such other
terms as are consistent with those then in effect under the
Letter
of Credit, or (b) deposit with an escrow agent, pursuant to an
escrow agreement, reasonably acceptable to Buyer and Seller an
amount equal to the amount then available to be drawn under the
Letter of Credit in respect of such Contested Claims on terms
reasonably satisfactory to Buyer and Seller; provided, however,
that if Seller fails within twenty (20) days prior to the expira-
tion of the Letter of Credit to either (x) provide Buyer with a
replacement letter of credit as described herein or (y) establish
an escrow as described herein, Buyer shall be entitled to draw on
the Letter of Credit to the extent of any Contested Claims prior
to
the expiry date thereof, in which event Buyer shall forthwith
deposit such funds with an escrow agent, pursuant to an escrow
agreement, reasonably acceptable to Buyer and Seller to be held
and
administered pending final resolution of all Contested Claims.
8.07 Officers' and Directors' Insurance; Indemnificat-
ion.
(a) For a period of four (4) years from and
after
the Closing Date Buyer shall, or shall cause the Company and
Scrivner to, indemnify and hold harmless each present and former
director and officer of the Company and the Subsidiaries (the
"Indemnified Parties") against any expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and
reasonable incurred by such Indemnified Party in connection with
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative to which
each Indemnified Party was made, or threatened to be made, a
party
by reason of the fact that such Indemnified Party was or is a
director, officer, employee or agent of the Company or a Subsid-
iary, or was serving at the request of the Company or a
Subsidiary
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise and which
arises out of or pertains to any action or omission occurring
prior
to the Closing Date (including, without limitation, any which
arise
out of or relate to the transactions contemplated by this Agree-
ment) to the full extent permitted under the Delaware Law (and
each
person will be advanced expenses to the full extent so
permitted);
provided, that any determination required to be made with respect
to whether an Indemnified Party's conduct complied with the
standards set forth in the Delaware Law shall be made by indepen-
dent counsel selected by such Indemnified Party and reasonably
satisfactory to the Buyer (which shall pay such counsel's fees
and
expenses). In the event any such claim, action, suit, proceeding
or investigation is brought against any Indemnified Party
(whether
arising before or after the Closing Date, (a) the Indemnified
Parties may retain counsel satisfactory to them and the Company
and
the Buyer, (b) Buyer shall, or shall cause the Company and
Scrivner
to, pay all fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received, and (c)
Buyer
shall cause the Company or Scrivner to use its best efforts to
assist in the defense of any such matter, provided, that neither
the Company nor the Buyer shall be liable for any such settlement
effected without their written consent, which consent, however,
shall not be unreasonably withheld. Any Indemnified Party
wishing
to claim indemnification under this Section 8.07 upon learning of
any such claim, action, suit proceeding or investigation, shall
notify the Company, Scrivner or the Buyer thereof and shall
deliver
to the Company, Scrivner or the Buyer an undertaking to repay any
amounts advanced pursuant thereto in the event a court of
competent
jurisdiction shall ultimately determine, after exhaustion of all
avenues of appeal, that such Indemnified Party was not entitled
to
indemnification under this Section. The Indemnified Parties as a
group may retain only one law firm in each jurisdiction to
represent them with respect to any such matter unless there is,
under applicable standards of professional conduct, a conflict on
any significant issue between the positions of any two or more
Indemnified Parties.
(b) For four (4) years after the Closing Date,
the
Buyer shall use its best efforts to provide officers' and direc-
tors' liability insurance covering the Indemnified Parties who
are
currently covered by the Company's Officers' and directors'
liability insurance policy (a copy of which has heretofore been
delivered to Buyer) on terms substantially similar to those of
such
policy in terms of coverage and amounts.
(c) This Section 8.07 shall survive the
consumma-
tion of the transactions contemplated by this Agreement. Subject
to Delaware Law, the Certificate of Incorporation and Bylaws of
the
Company shall not be amended in a manner which adversely affects
the rights of the Indemnified Parties under this Section 8.07.
8.08 Remedies Exclusive. Except for the remedy of
specific performance and except as otherwise provided herein, the
remedies provided herein shall be exclusive and shall preclude
the
assertion by either party hereto of any other rights or the
seeking
of any other remedies against the other party hereto.
ARTICLE IX
TERMINATION; AMENDMENT AND WAIVER
9.01 Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing:
(a) By mutual written agreement of Buyer and
Seller:
(b) By either Buyer or Seller if the Closing
shall
not have occurred on or before August 31, 1994, unless such
failure
to close shall be due to a material breach of this Agreement by
the
party seeking to terminate the Agreement pursuant to this
Section;
or
(c) If a United States court of competent
jurisdiction shall permanently enjoin the consummation of the
transactions contemplated hereby and such injunction shall be
final
and nonappealable.
9.02 Effect of Termination. In the event of
termination
of this Agreement as provided above, this Agreement shall
forthwith
become void and there shall be no liability on the part of any
party hereto (or any of their respective officers or directors),
except based upon obligations set forth in Sections 10.01 and
10.02
hereof and the confidentiality provisions of Section 4.02(a).
Nothing contained in this Section 9.02 shall relieve any party
from
liability for any breach of this Agreement.
9.03 Amendment, Extension and Waiver. Buyer and
Seller
may amend this Agreement at any time by an instrument in writing
signed on behalf of such parties. Any agreement on the part of a
party hereto to any waiver of compliance with any of the
agreements
or conditions contained herein shall be valid only if set forth
in
an instrument in writing signed by the party to be bound thereby.
ARTICLE X
MISCELLANEOUS
10.01 Commissions. Buyer, on the one hand, and
Seller,
on the other hand, represent and warrant that there are no known
claims for brokerage commissions or finder's fees in connection
with the transactions contemplated by this Agreement except as
set
forth in this Agreement.
10.02 Expenses; Taxes. Buyer, on the one hand, and
the
Company on behalf of the Seller, on the other hand, will pay all
fees and expenses incurred by it in connection with this Agree-
ment. All sales and transfer taxes and fees (including all
sales,
transfers, stamp, real estate transfer and recording fees, if
any)
incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the Company and the Company
shall file all necessary documentation with respect to such taxes
and make all payments on a timely basis. All gains and similar
taxes incurred as a result of the sale of the Shares contemplated
hereby shall be borne by the Seller.
10.03 Governing Law; Submission to Jurisdiction,
Waiver
of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF
SELLER AND BUYER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT; PROVIDED, HOWEVER,
THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE
REFERRED TO IN THIS SECTION AND SHALL NOT BE DEEMED TO BE A
GENERAL
SUBMISSION TO THE JURISDICTION OF SAID COURTS OR IN THE STATE OF
NEW YORK OTHER THAN FOR SUCH PURPOSE. EACH OF SELLER AND BUYER
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH COURT
AND ANY CONTENTION THAT ANY SUCH PROCEEDING BROUGHT IN SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
TO
THE TRANSACTIONS CONTEMPLATED HEREBY.
At or before the Closing, Seller shall appoint the CT
Corporation System, 1633 Broadway, New York, New York 10019 (the
"CT Corporation") as its service agent for the purpose of
accepting
service of process on Seller for all legal proceedings arising
out
of or relating to this Agreement or the transactions contemplated
hereby. Such appointment of the CT Corporation by Seller shall
be
irrevocable until the later of (i) the third anniversary of the
Closing Date or (ii) the expiration of the Letter of Credit (in
either event, the "Appointment Period"). The expense of the
appointment of CT Corporation for the entire Appointment Period
shall be borne by the Seller and shall be paid in advance.
Seller
further agrees that in the event Buyer brings legal proceedings
against Seller arising out of or relating to this Agreement or
the
transactions contemplated hereby and obtains service of process
on
Seller by serving the CT Corporation, Seller shall not object to
such service of process.
10.04 Assignment. This Agreement and all the
provisions
hereof shall be binding upon and inure to the benefit of the
parties hereto and in the case of Sections 6.11 and 8.07, the
directors and officers of the Company referred to therein, and
their respective successors and permitted assigns. Neither this
Agreement nor any of the rights hereunder shall be assigned by
either of the parties hereto without the prior written consent of
the other party, except that (i) Buyer may assign all or any part
of its rights or obligations hereunder to any subsidiary or
corporate affiliate of Buyer provided that no such assignment
shall
relieve Buyer of its obligations hereunder and (ii) Buyer and any
assignee described in clause (i) above may grant a security
interest in this Agreement to Buyer's Banks.
10.05 Entire Agreement. This Agreement and the
Schedules and the other agreements, instruments and writings
referred to herein or delivered pursuant hereto contain the
entire
understanding of the parties with respect to its subject matter.
This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter, including
the Letter of Intent dated May 31, 1994 except that the
Confidenti-
ality Agreement shall survive until the Closing. The parties
agree
that the provisions of Section 4.08 shall survive for a period of
two (2) years following the Closing.
10.06 Headings. The Article and Section headings
contained in this Agreement are for reference purposes only and
will not affect in any way the meaning or interpretation of this
Agreement.
10.07 Notices. All notices, claims, certificates,
requests, demands and other communications hereunder will be in
writing (whether by letter, telecopy, telex or other commercially
reasonable means of written communication) and will be deemed to
have been duly given upon receipt as follows:
(a) If to Buyer:
Fleming Companies, Inc.
6301 Waterford Blvd.
P.0. Box 26647
Oklahoma City, Oklahoma 73126
Attention: R. Randolph Devening,
Vice Chairman
FAX: 405/840-7266
with a copy to:
David R. Almond, Esq.
Senior Vice President and General Counsel
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
FAX: 405/841-8504
and
McAfee & Taft A Professional Corporation
Tenth Floor
Two Leadership Square
Oklahoma City, Oklahoma 73102
Attention: John M. Mee, Esq.
FAX: 405/235-0439
(b) If to Seller:
Franz Haniel & Cie. GmbH
Franz-Haniel-Platz 1
D-47119 Duisburg-Ruhrort
Federal Republic of Germany
Attention: Dr. Ernst Alers
FAX: 011-49-203-806-689
with a copy to:
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
Attention: Robert S. Reder, Esq.
FAX: 212/530-5219
or to such other address as the person to whom notice is to be
given may have previously furnished to the other in writing in
the
manner set forth above.
10.08 Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the
same instrument.
10.09 Specific Performance. Seller and Buyer each
acknowledge that Buyer and Seller would not have an adequate
remedy
at law for money damages in the event that this Agreement were
not
performed in accordance with its terms, and therefore agree that
Buyer and Seller each shall be entitled to specific enforcement
of
the term hereof in addition to any other remedy to which it may
be
entitled, at law or in equity.
10.10 Severability. If any term, provision, covenant
or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of this
Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
10.11 Certain Definitions. As used in this Agreement:
(a) "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in New York City are
authorized or required by law to close.
(b) "Funded Debt" means (i) long term debt
(including the current portion) and (ii) capitalized lease
obligations (including the current portion) of the Company and
Subsidiaries.
(c) "GAAP" means generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of
Certified
Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements
by
such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circum-
stances as of the date of determination.
(d) "Governmental Authorities" shall mean all
federal, state, county, municipal and local governments and all
departments, commissions, boards, bureaus and offices thereof.
(e) "Knowledge" or "to the knowledge of" means
in
the case of Seller, the Company or the Subsidiaries or any
combination of the foregoing, matters known to Jerry D. Metcalf,
Bill Bishop, Larry W. Kordisch, Jim Mills, Rudy Comchoc, Leon
Halbrook, Tom Arledge, Dave Brumley, Arlyn Larson, Jim Demme, and
James V. Barwick and in the case of Buyer, matters known to
Robert
E. Stauth, R. Randolph Devening, Gerald G. Austin, E. Stephen
Davis, Robert G. Dolan, Jr., David R. Almond, Donald N. Eyler,
Robert W. Smith, Stephen G. Mangold, Bill C. Zumwalt and Gary S.
Capshaw.
(f) "Major Subsidiaries" means Scrivner, Inc.,
Food Holdings, Inc., Scrivner-Food Holdings, Inc., Gateway Foods,
Inc., Scrivner of Kansas, Inc., Scrivner of North Carolina, Inc.,
Scrivner of Illinois, Inc., Scrivner of New York, Inc., Scrivner
of
Iowa, Inc., and Scrivner of Pennsylvania, Inc.
(g) "Partnership Interests" means the interests
of 109 West Main Street, Inc., Route 219, Inc., Route 16, Inc.,
Route 417, Inc. and Scrivner of Kansas, Inc. in the general
partnerships described in Schedule 2.01.
(h) "Permit" has the meaning set forth in
Section
2.25.
(i) "Subsidiaries" means all corporations
including without limitation Scrivner and other entities of which
the Company or another Subsidiary of the Company owns 50 percent
or
more of (x) the stock of any class having power under ordinary
circumstances to vote for the election of directors or (y) the
capital, right to profits or equity, however named.
10.12 Cutoff Date The parties agree that for tax and
accounting purposes, the cutoff date for the Company and its
Subsidiaries shall be the close of business July 9, 1994,
notwith-
standing that the representations, warranties and covenants of
the
parties shall run through the Closing Date.
10.13 Scrivner Employees. Subsequent to the Closing
and
in the event Buyer offers employment to any of the employees of
the
Company or any of the Subsidiaries, Buyer agrees, to the extent
permitted by the Code and the Internal Revenue Service
regulations
promulgated thereunder, that it will recognize the service of any
such hired Company or Subsidiary employee for the purpose of
determining eligibility to enter any of Buyer's employee benefit
plans (as defined in Section 3(3) of ERISA), and Buyer's vacation
and sick pay policies, and for purposes of vesting of benefits
under such plans assuming such employee otherwise meets the
eligibility requirements for participation, provided, however, in
no event shall the recognition of prior service be included for
purposes of calculating the amount or level of benefits the
employee would be entitled to receive under such benefit plans.
Nothing herein contained shall prohibit Buyer at any time in its
sole and absolute discretion from amending, modifying or
terminat-
ing any benefit plan which it may offer any of such employees of
the Company or any of the Subsidiaries. Further, regardless of
the
provisions of this Section 10.12 or any other provision of this
Agreement (except as provided in Section 10.04) there are no
third-
party beneficiaries of this Agreement. For the purpose of this
Section 10.13, the term "Buyer" shall also include Buyer's
subsidiaries.
IN WITNESS WHEREOF, this Agreement has been duly
executed
and delivered by the duly authorized officers of Seller and Buyer
as of the date first above written.
FLEMING COMPANIES, INC.
/s/ Robert E. Stauth
Name:
Robert E. Stauth
Title: Chairman, President and
Chief Executive Officer
FRANZ HANIEL & CIE. GmbH
/s/ Ernst Alers
Name:
Ernst Alers
Title: Member of the Managing
Board
/s/ Jerry D. Metcalf
Name: Jerry D. Metcalf
Title: Member of the Managing
Board
EXHIBIT A
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
IRREVOCABLE TRANSFERABLE LETTER
OF CREDIT NO.
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126-0647
Ladies and Gentlemen:
We hereby establish, at the request and for the account
of Franz Haniel & Cie. GmbH ("Franz Haniel"), our Irrevocable
Tran-
sferable Letter of Credit No. in your favor in the
amount of Thirty Million U.S. Dollars (U.S. $30,000,000).
We hereby irrevocably authorize you to draw on us, in
accordance with the terms and conditions contained herein, in one
or more drawings by your draft, payable at sight on a day other
than (a) a Saturday or a Sunday, (b) a legal holiday or the
equiva-
lent on which banking institutions generally are authorized or
required to close in New York, New York, or (c) a day on which
the
New York Stock Exchange is closed (a "Business Day"), and accom-
panied by your written and completed certificate signed by you in
the form of Annex A attached hereto, an aggregate amount not to
exceed the amount of this Letter of Credit set forth above.
Each draft submitted hereunder shall be dated the date
of
its presentation and shall be presented at our office located at
, Attn:
(or by fax to ( ) - , Attn:
) and shall be signed by one who states therein that he
is
your duly authorized officer or agent. If we receive any of your
drafts at such office, together with the required certificate,
not
later than 11:00 a.m. ( time) on a
Business Day prior to the termination hereof, we will honor the
same on such Business Day in accordance with your payment
instruc-
tions. If we receive any of your Drafts at such office, together
with the required certificate, after 11:00 a.m. (
time) on a Business Day prior to the termination hereof, we
will honor the same by the next succeeding Business Day in
accordance with your payment instructions. If requested by you,
payment under this Letter of Credit may be made by wire transfer
of
immediately available funds to your account in a bank on the
Federal Reserve wire system or by deposit of same day funds into
a
designated account that you maintain with us.
Multiple drawings may be made hereunder, provided that
(a) each drawing honored by us hereunder shall pro tanto reduce
the
amount available under this Letter of Credit, and (b) drawings
hereunder honored by us shall not, in the aggregate, exceed the
amount set forth above.
The initial term of this Letter of Credit will expire
at
2:00 p.m, New York, New York, on , 1997
(the
"Initial Expiration Date"), unless not more than twenty (20) and
not less than ten (10) days before such date (an "Extension
Notice
Period") you give us written notice in the form of Annex B
attached
hereto of each claim under Article VIII of the Stock Purchase
Agr-
eement by and between you and Franz Haniel dated ,
1994
(the "Stock Purchase Agreement") against Franz Haniel (a "Claim")
which is being diligently prosecuted. In such event, this Letter
of Credit shall automatically be extended for one (1) year from
the
Initial Expiration Date (the last day of which shall be referred
to
as the "Second Expiration Date"). Thereafter, this Letter of
Cred-
it shall be extended for successive six (6) month periods (the
last
day of each such six (6) month period being referred to herein as
a "Subsequent Expiration Date"); provided that, during each
related
Extension Notice Period, you shall have delivered written notice
in
the form of Annex C attached hereto identifying each previously
identified claim which is still being diligently prosecuted.
Not-
withstanding the foregoing sentence, this Letter of Credit shall
not be extended for six (6) month periods if, at least sixty (60)
days prior to the Second Expiration Date or the then current
Subse-
quent Expiration Date, as the case may be, we notify you and
Franz
Haniel in writing, delivered by facsimile, to be followed by
hand,
registered mail or courier, to the effect that the expiry date of
this Letter of Credit will not be extended (the "Termination No-
tice").
This Letter of Credit is transferable to any pledgee to
which you have granted a security interest in the Stock Purchase
Agreement. We shall not be obligated to recognize any transfer
of
this Letter of Credit until an executed transfer form is filed
with
us and notice thereof is endorsed by us. You shall not be
obligat-
ed to pay any fees or charges to us in connection with any
transfer
of this Letter of Credit. A form for filing transfer
instructions
is attached hereto as Annex D.
We hereby agree with you and the drawers, endorsers,
and
bona fide holders of all drafts drawn under and in conformity
with
the terms of this Letter of Credit that such drafts will be duly
honored by us upon presentation within the validity period. This
Letter of Credit sets forth in full the terms of our undertaking
and such undertaking shall not in any way be amended, modified,
amplified or limited by reference to any document, instrument or
agreement referred to herein or in which this Letter of Credit is
referred to or to which this Letter of Credit relates (other than
the annexes attached hereto), and any such reference shall not be
deemed to incorporate herein by reference any document,
instrument
or agreement. We hereby waive the right to defer the honor of
such
drafts presented by you or by any drawer, endorser, or bona fide
holder of any such drafts.
On the day that is eighteen (18) months after the date
hereof, the aggregate amount available to be drawn under this
Let-
ter of Credit will automatically decrease by an amount equal to
$15,000,000 less (i) the sum of the aggregate amount of any draw-
ings on this Letter of Credit paid to you by us and (ii) the
amount
of any unpaid Claims as of the last day of such period of which
we
have received written notice from you, but in no event more than
$15,000,000. On the day that is twenty-four (24) months after
the
date hereof the amount available to be drawn under this Letter of
Credit will automatically decrease by an amount equal to
$7,500,000
less (i) the sum of the aggregate amount of any drawings on this
Letter of Credit paid to you by us during the prior six (6) month
period and (ii) the amount of any unpaid Claims as of the last
day
of such period of which we have received written notice from you,
but in no event more than $7,500,000. On the day that is thirty-
six (36) months after the date hereof, the amount available to be
drawn under the Letter of Credit will automatically decrease to
an
amount equal to the aggregate amount of any unpaid Claims as of
the
last day of such period and of which we have received notice from
you during the initial Extension Notice Period. On the Second
Expiration Date and each Subsequent Expiration Date the amount
which may be drawn under this Letter of Credit shall
automatically
decrease to an amount equal to the aggregate amount of any
remain-
ing unpaid Claims as of the last day of such period and of which
we
have received notice from you during the related Extension Notice
Period.
Except as specifically otherwise set forth herein, this
Letter of Credit shall be governed by and construed in accordance
with the "Uniform Customs and Practice for Documentary Credits"
(1993 Revision, International Chamber of Commerce Publication No.
500 (hereinafter, the "Uniform Customs")). This Letter of Credit
shall be deemed to be a contract made under the laws of the State
of New York and shall, as to matters not governed by the Uniform
Customs, be governed by and construed in accordance with the laws
of said state.
Communications to us with respect to this Letter of
Cred-
it shall be in writing and be addressed to us at
(Attention:
), specifically referring to the number of this
Letter
of Credit. Communications to you with respect to this Letter of
Credit shall be in writing and be addressed to you at 6301
Waterford Boulevard, Post Office Box 26647, Oklahoma City,
Oklahoma
73126-0647 (Attention:
).
Morgan Guaranty Trust Company of
New York
By
ANNEX A
[Date]
Attention:
Re: Irrevocable Transferable Letter
of
Credit No.
Ladies and Gentlemen:
Fleming Companies, Inc. (the "Beneficiary") hereby
certi-
fies to you with reference to Irrevocable Transferable Letter of
Credit No. that:
1. The Beneficiary is the beneficiary under the
Letter
of Credit.
2. The Beneficiary is entitled under Article VIII of
the Stock Purchase Agreement dated , 1994 by and between
Fleming Companies, Inc. and Franz Haniel & Cie. GmbH to draw
under
the Letter of Credit.
3. The Beneficiary demands payment of U.S. $
under the Letter of Credit.
4. A copy of this certificate has been delivered to
Franz Haniel & Cie. GmbH at least three (3) business days prior
to
the date thereof.
IN WITNESS WHEREOF, the Beneficiary has executed and
de-
livered this certificate by its duly authorized officer as of the
day of , 199 .
FLEMING COMPANIES, INC.
By
Its:
cc: Franz Haniel & Cie. GmbH.
ANNEX B
NOTICE OF PENDING CLAIM
TO:
RE: Irrevocable Transferable Letter of Credit
No.
DATE:
Ladies and Gentlemen:
Please be advised that a claim relating to
and
in the amount of $ has been asserted against Franz
Haniel
& Cie. GmbH under Article VIII of the Stock Purchase Agreement
dated , 1994, by and between Franz Haniel & Cie. GmbH
and
Fleming Companies, Inc. and that such claim is being diligently
prosecuted by the undersigned.
A copy of this notice has been delivered to Franz
Haniel
& Cie. GmbH.
Dated the day and year first written above.
FLEMING COMPANIES, INC.
By
cc: Franz Haniel & Cie. GmbH
ANNEX C
NOTICE OF CLAIM
TO:
RE: Irrevocable Transferable Letter of Credit
No.
DATE:
Ladies and Gentlemen:
Please be advised that each of the claims identified
below, in the aggregate amount of $ , were asserted
again-
st Franz Haniel & Cie. GmbH under Article VIII of the Stock Pur-
chase Agreement dated , 1994, by and between Franz
Haniel
& Cie. GmbH and Fleming Companies, Inc., were previously
identified
to you in our initial notice dated , and remain
unpaid.
Subject of Claim Amount
A copy of this notice has been delivered to Franz
Haniel
& Cie. GmbH.
Dated the day and year first written above.
FLEMING COMPANIES, INC.
By
cc: Franz Haniel & Cie. GmbH
ANNEX D
NOTICE OF TRANSFER
TO:
RE: Irrevocable Transferable Letter of Credit
No.
DATE:
Ladies and Gentlemen:
Please be advised that the undersigned, the current
named
beneficiary of the above-referenced Irrevocable Transferable
Letter
of Credit, has transferred the Letter of Credit to:
and we hereby certify that such transferee is a pledgee to which
we
have granted a security interest in the Stock Purchase Agreement
referred to in the Letter of Credit.
A copy of this notice of transfer has been delivered to
Franz Haniel & Cie. GmbH.
Dated the day and year first written above.
Beneficiary:
FLEMING COMPANIES, INC.
By
cc: Franz Haniel & Cie. GmbH
EXHIBIT C-1
[Form of Opinion of Milbank, Tweed, Hadley & McCoy]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
Ladies and Gentlemen:
We have acted as special United States counsel to Franz
Haniel & Cie. GmbH,a German Corporation ("Seller"), in connection
with the Stock Purchase Agreement dated as of July , 1994
(the
"Stock Purchase Agreement"), by and between Fleming Companies,
Inc., an Oklahoma corporation, and Seller and the transactions
contemplated thereby. Capitalized terms used but not defined
herein shall have the respective meanings given to such terms in
the Stock Purchase Agreement.
In rendering the opinions expressed below, we have
examined (a) the Stock Purchase Agreement and the Trust Agreement
entered into as of the 1st day of July 1981 between Seller,
Hanamerica, Inc. (now Haniel Corporation, a Delaware
corporation),
and the trustees named therein for the benefit of Seller, the
Company and the Haniel Shareholders (as defined therein)(the
"Trust
Agreement") and (b) corporate records of Seller, the Company and
the Subsidiaries and such other documents as we have deemed
necessary as a basis for the opinions expressed below. In our
examination, we have assumed the genuineness of all signatures,
the
authenticity of all documents submitted to us as originals and
the
conformity with the authentic original documents of all documents
submitted to us as copies. When relevant facts were not inde-
pendently established, we have relied upon certificates of
government officials and of Seller, the Company and the Subsidi-
aries and their respective officers and upon representations and
warranties made in or pursuant to the Stock Purchase Agreement.
In rendering the opinions expressed below, we have
assumed that all of the documents referred to in this opinion
have
been duly authorized by, have been duly executed and delivered
by,
and (other than as to Seller) constitute legal, valid, binding
and
enforceable obligations of, all of the parties to such documents.
We have also assumed that all signatories to such documents have
been duly authorized and that all such parties are duly organized
and validly existing and have the power and authority (corporate
or
other) to execute, deliver and perform such documents.
With respect to paragraph 1 below, we are expressing no
opinion as to the enforceability of (a) the provisions of Section
10.12 of the Agreement or (b) waiver of the right to trial by
jury
as provided in Section 10.04 of the Agreement.
Based upon and subject to the foregoing, and having
considered such questions as law as we deemed necessary as a
basis
for the opinions expressed below, we are of the opinion that:
1. The Stock Purchase Agreement constitutes a valid
and
binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as may be limited by
bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and
except as the enforceability of the Stock Purchase Agreement is
subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at
law), including without limitations (i) the possible
unavailability
of specific performance, injunctive relief or any other equitable
remedy and (ii) concepts of materiality, reasonableness, good
faith
and fair dealing.
2. Each of the Company and Scrivner is a corporation
duly incorporated, validly existing and in good standing under
the
laws of the State of Delaware, and has the corporate power and
authority to carry on its business as presently conducted, and to
own, lease and operate its properties and other assets.
3. Assuming that Buyer acquires the Shares in good
faith and without notice of any adverse claim within the meaning
of
Section 8-302 of the New York Uniform Commercial Code, the
delivery
of the certificate or certificates representing the Shares in the
manner provided in Section 1.02 of the Stock Purchase Agreement
will transfer to Buyer good and valid title to the Shares, free
of
any adverse claims.
4. Except as set forth in Schedule 2.03 delivered by
Seller to Buyer upon the execution of the Stock Purchase
Agreement,
and except for compliance with the notice filing requirements of
the HSR Act, the execution and delivery by Seller of the Stock
Purchase Agreement did not, and the consummation of the transac-
tions contemplated thereby will not (a) violate or conflict with
any statute, law, ordinance, rule or regulation applicable to
Seller, the Company or any Subsidiary or by which any of their
properties may be bound of affected or (b) violate or conflict
with
any provisions of the respective Certificates of Incorporation or
By-Laws of the Company or Scrivner.
5. Under the laws of the State of New York relating
to
submission of jurisdiction, assuming the validity of such action
under German law, Seller has, pursuant to Section 10.03 of the
Stock Purchase Agreement, validly submitted to the nonexclusive
personal jurisdiction of the United States District Court for the
Southern District of New York sitting in New York City for
purposes
of all legal proceedings arising out of or relating to the Stock
Purchase Agreement, has validly and irrevocably waived any
objection to the laying of venue of any such proceeding in such
court, and has validly and irrevocably appointed CT Corporation
System as its agent for service of process as described in
Section
10.03 of the Stock Purchase Agreement; and service of process
effected on such agent in the manner set forth in Section 10.03
of
the Stock Purchase Agreement will be effective to confer valid
personal jurisdiction over Seller.
6. The trust created pursuant to the Trust Agreement
has been validly terminated as of the Closing Date in accordance
with the terms thereof.
The foregoing opinions are limited to matters involving
the laws of the State of New York, the General Corporation Law of
the State of Delaware and the Federal laws of the United States
of
America, and we do not express any opinion as to the laws of any
other jurisdiction.
At the request of our client, this opinion is being
provided to you pursuant to Section 6.06 of the Stock Purchase
Agreement, and this opinion may not be relied upon by any other
person or for any other purpose other than in connection with the
transactions contemplated by the Stock Purchase Agreement
without,
in each instance, our prior written consent, except that a copy
of
this opinion may be delivered by you to Morgan Guaranty Trust
Company of New York, as Agent, in connection with the Credit
Agreement dated July , 1994, among Buyer, the banks listed
therein, the Co-Agents listed therein and the Agent and such
person
may rely upon this opinion as if it were addressed to and had
been
delivered to such person on the date hereof.
Very truly yours,
EXHIBIT C-2
[Form of Opinion of Martin von Gehren]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
Ladies and Gentlemen:
I have acted as inhouse legal counsel to Franz Haniel
&
Cie. GmbH, a German corporation, ("Seller"), in connection with
the
Stock Purchase Agreement dated as of July , 1994 (the "Stock
Purchase Agreement"), by and between Fleming Companies, Inc., an
Oklahoma corporation, and Seller and the transactions
contemplated
thereby. Capitalized terms used but not defined herein shall
have
the respective meanings given to such terms in the Stock Purchase
Agreement.
In rendering the opinions expressed below, I have
examined (a) the Stock Purchase Agreement and the Trust Agreement
entered into as of the 1st day of July 1981 between Seller,
Hanamerica, Inc. (now Haniel Corporation, a Delaware
corporation),
and the trustees named therein for the benefit of Seller, the
Company and the Haniel Shareholders (as defined therein)(the
"Trust
Agreement") and (b) corporate records of Seller and such other
documents as I have deemed necessary as a basis for the opinions
expressed below. In my examination, I have assumed the
genuineness
of all signatures (other than those of officers of Seller), the
authenticity of all documents submitted to me as originals and
the
conformity with the authentic original documents of all documents
submitted to me as copies. When relevant facts were not inde-
pendently established, I have relied upon certificates of govern-
ment officials and of Seller and its officers and upon
representa-
tions and warranties made in or pursuant to the Stock Purchase
Agreement.
Based upon and subject to the foregoing, and having
considered such questions of law as I deemed necessary as a basis
for the opinions expressed below, I am of the opinion that:
1. Seller is a corporation duly organized and validly
existing under the laws of the Federal Republic of Germany.
Seller
has the corporate power and authority to enter into the Stock
Purchase Agreement and to consummate the transactions
contemplated
thereby.
2. Seller has duly authorized (a) the execution and
delivery of the Stock Purchase Agreement and the consummation of
the transactions contemplated thereby and (b) the termination of
the Trust Agreement. No further corporate actions on the part of
Seller are necessary to authorize (c) the execution of the Stock
Purchase Agreement or to consummate the transactions contemplated
thereby or (d) the termination of the Trust Agreement.
3. The Stock Purchase Agreement has been duly and
validly executed and delivered by Seller. The notice dated July
11, 1994 terminating the Trust Agreement as of the Closing Date
has
been duly and validly executed and delivered by Seller.
4. To my knowledge, the Shares are owned by Seller
free
and clear of any liens, encumbrances, equities and claims.
5. Except as set forth in Schedule 2.03 delivered by
Seller to Buyer upon the execution of the Stock Purchase
Agreement,
the execution and delivery by Seller of the Stock Purchase
Agreement did not, and the consummation of the transactions
contemplated thereby will not (a) violate or conflict with any
statute, law, ordinance, rule or regulation of the Federal
Republic
of Germany or any order, writ, injunction, judgment or decree,
applicable to Seller or by which any of its properties may be
bound
or affected, (b) violate or conflict with any provisions of the
constituent documents of Seller, (c) constitute a violation of or
a default or breach (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in
the
termination of, accelerate the performance required by, or give
rise to any right of termination, acceleration, cancellation, or
amendment under, or result in any Liens upon Seller or any of its
assets or have any other adverse effect under, any term or
provision of any contract, commitment, understanding,
arrangement,
agreement or restriction of any kind or character to which Seller
is a party or by which any of its assets or properties may be
bound, subjected or affected.
6. Under the laws of the Federal Republic of Germany
relating to submission of jurisdiction, assuming the validity of
such action under the laws of the State of New York, Seller has,
pursuant to Section 10.03 of the Stock Purchase Agreement,
validly
submitted to the nonexclusive personal jurisdiction of the United
States District Court for the Southern District of New York
sitting
in New York City for purposes of all legal proceedings arising
out
of or relating to the Stock Purchase Agreement, has validly and
irrevocably waived any objection of venue of a proceeding in such
court, and has validly and irrevocably appointed CT Corporation
System as its agent for service of process as described in
Section
10.03 of the Stock Purchase Agreement; and service of process
effected on such agent in the manner set forth in Section 10.03
of
the Stock Purchase Agreement will be effective to confer valid
personal jurisdiction over Seller.
The foregoing opinions are limited to matters involving
the laws of the Federal Republic of Germany, and I do not express
any opinion as to the laws of any other jurisdiction.
This opinion is being provided to you pursuant to
Section
6.06 of the Stock Purchase Agreement, and this opinion may not be
relied upon by any other person or for any purpose other than in
connection with the transactions contemplated by the Stock
Purchase
Agreement without, in each instance, my prior written consent.
Notwithstanding the foregoing, copy of this opinion may be
delivered by you to Morgan Guaranty Trust company of New York, as
Agent, in connection with the Credit Agreement dated July ,
1994,
among Buyer, the banks listed therein,
and
as Co-Agents and Agent, provided that
none
of such persons may rely on this opinion. No expansion or
interpretation of the opinions herein may be made by implication
or
otherwise. The opinions herein are based on the law and facts in
existence on the date of this letter and I assume no
responsibility
or obligation to monitor any change in such law or facts
hereafter
or to modify or update this opinion as a result thereof.
Very truly yours,
Martin von Gehren
Inhouse Legal Counsel for
Franz Haniel & Cie. GmbH
EXHIBIT C-3
[Form of Opinion of James V. Barwick]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
P. O. Box 26647
Oklahoma City, Oklahoma 73127
Ladies and Gentlemen:
I am Vice President, General Counsel and Secretary of
Scrivner, Inc., a Delaware corporation, and I am rendering this
opinion in such capacity, pursuant to the request of Seller in
connection with the Stock Purchase Agreement dated as of July ,
1994 (the "Stock Purchase Agreement"), by and between Fleming
Companies, Inc., an Oklahoma corporation ("Buyer"), and Franz
Haniel & Cie. GmbH, a German corporation ("Seller"), and the
transactions contemplated thereby. Capitalized terms used but
not
defined herein shall have the respective meanings given to such
terms in the Stock Purchase Agreement or the Accord referenced
below.
This opinion letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications, excep-
tions, definitions, limitations on coverage and other
limitations,
all as more particularly described in the Accord, and this
opinion
letter should be read in conjunction therewith. Furthermore,
reference herein to the phrase "to my knowledge," shall have the
same meaning as the term "Actual knowledge" is defined in the
Accord.
In rendering the opinions expressed below, I have
examined (a) the Stock Purchase Agreement and (b) corporate
records
of the Company and the Subsidiaries and such other documents as I
have deemed necessary as a basis for the opinions expressed
below.
In my examination, I have assumed the genuineness of all signa-
tures, the authenticity of all documents submitted to me as
originals and the conformity with the authentic original
documents
of all documents submitted to me as copies. When relevant facts
were not independently established or known, I have relied solely
upon information from and/or certificates of governmental
officials
and of or from the Company and the Subsidiaries and their respec-
tive officers or employees and upon the representations and
warranties made in or pursuant to the Stock Purchase Agreement.
Based upon and subject to the assumptions, qualifica-
tions, exceptions and limitations contained in or referred to
herein, and having considered such questions of law as I deemed
necessary as a basis for the opinions expressed below, I am of
the
opinion that:
1. Each of the Company and Subsidiaries is a corpora-
tion duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and has the
corporate power and authority to carry on its business as
presently
conducted, and to own, lease and operate its properties and other
assets. Except as set forth in Schedule 2.02 delivered by Seller
to Buyer upon the execution of the Stock Purchase Agreement, each
of the Company and Subsidiaries which is a corporation is duly
licensed or qualified to do business as a foreign corporation,
and
is in good standing, in each jurisdiction wherein the character
of
the assets or properties owned, leased or operated by it, or the
nature of its business, makes such licensing or qualification
necessary, except where failure to be so licensed or qualified
and
in good standing would not have a material adverse effect on the
Company and the Subsidiaries taken as a whole.
2. Schedule 2.01 delivered by Seller to Buyer upon
the
execution of the Stock Purchase Agreement correctly lists for the
Company and each Subsidiary which is a corporation the amount of
its authorized capital stock, the amount of its outstanding
capital
stock and the record owners of such outstanding capital stock.
Except as disclosed on Schedule 2.01, all of the outstanding
shares
of capital stock of the Company and each Subsidiary which is a
corporation owned by Seller, the Company or any Subsidiary and,
to
my knowledge, by any other person, have been validly issued, are
fully paid and nonassessable, and to my knowledge are owned by
the
Company or Subsidiaries as stated in Schedule 2.01, free and
clear
of any liens, encumbrances, equities and claims. To my
knowledge,
except as disclosed in Schedule 2.01, there are no outstanding
options, warrants or rights convertible into or exercisable or
shares of capital stock of the Company or any of the Subsidiaries
which is a corporation.
3. Except as set forth in Schedule 2.03 delivered by
Seller to Buyer upon the execution of the Stock Purchase
Agreement,
and except for compliance with the notice filing requirements of
the HSR Act, the execution and delivery of the Stock Purchase
Agreement did not, and the consummation of the transactions
contemplated thereby will not, as to the Company or any
Subsidiary
(a) violate or conflict with any statute, law, ordinance, rule or
regulation of the State of Oklahoma applicable to the Company or
any Subsidiary or any order, writ, injunction, judgment or decree
applicable to the Company or any Subsidiary which is a
corporation
or by which any of their properties may be bound or affected or
to
my knowledge any order, writ, injunction, judgment or decree
applicable to any Subsidiary that is not a corporation or by
which
any of its properties may be bound or affected, (b) violate or
conflict with any provisions of the respective certificates of
Incorporation or By-Laws (or other comparable charter documents)
of
the Company or any Subsidiary, or (c) to my knowledge, constitute
a violation of or a default or breach (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, or result in or give rise to, any right of termination,
acceleration, cancellation, or amendment under or result in any
Liens upon the Company, any Subsidiary or any of their assets or
have any other adverse effect under any term or provision of any
Contract of the Company or any Subsidiary, except in the case of
(a), or (c), where such violations, terminations, conflicts,
accelerations, defaults, breaches or grounds and rights of
termination, cancellation, acceleration and amendment would not
have a material adverse effect on the Company or any of the
Subsidiaries taken as a whole so effected or prevent or
materially
delay the consummation of the transactions contemplated by the
Stock Purchase Agreement.
4. Schedule 2.12 delivered by Seller to Buyer upon
execution of the Stock Purchase Agreement, to my knowledge, lists
all of the Litigation which is Insured and not Insured with
respect
to the Company and the Subsidiaries.
In addition to the qualifications, exceptions, defini-
tions, limitations on coverage and other limitations described
herein or in the Accord, this Opinion Letter is limited by,
subject
to or based on the following:
a. I express no opinion in paragraph 3 as to any
violation of law, statute, ordinance, rule or regulation of the
State of Oklahoma (i) which may have become applicable to the
Company or any Subsidiary as a result of the involvement by Buyer
and Seller in the transactions contemplated by the Stock Purchase
Agreement because of their legal or regulatory status or because
of
any other facts specifically pertaining to the Seller or Buyer;
(ii) which does not have any material adverse effect on the Buyer
and does not deprive the Buyer of any material benefit under the
Stock Purchase Agreement or (iii) which can be readily cured
without significant delay or expense to the Buyer or loss of any
material benefit under the Stock Purchase Agreement and without
any
material adverse effect on the Buyer during the period of such
violation.
Please be advised that I am a member of the Bar of the
State of Oklahoma and not admitted to practice in any other
state,
and I do not purport to be an expert on, or to express any
opinion
herein concerning, any law of any jurisdiction, including without
limitation the jurisdictions of incorporation of the Company or
any
Subsidiary (other than the laws of the State of Oklahoma).
This opinion is being provided to you pursuant to
Section
6.06 of the Stock Purchase Agreement, and this opinion may not be
used or relied upon by any other person or for any purpose other
than in connection with the transactions contemplated by the
Stock
Purchase Agreement without, in each instance, my prior written
consent. Notwithstanding the foregoing, a copy of this opinion
may
be delivered by you to Morgan Guaranty Trust Company of New York,
as Agent, in connection with the Credit Agreement dated July ,
1994, among Buyer, the banks listed therein, theCo-Agents listed
therein and the Agent; provided that none of such persons may
rely
on this opinion. No expansion or interpretation of the opinions
herein may be made by implication or otherwise. The opinions
herein are based on the law and facts in existence on the date of
this letter and I assume no responsibility or obligation to
monitor
any change in such law or facts hereafter or to modify or update
this opinion as a result thereof.
Very truly yours,
James V. Barwick
Vice President, General Counsel,
and Secretary
EXHIBIT C-4
[Form of Legal Opinion for
Letter of Credit Issued by MGT]
, 199
Dear Sirs:
This opinion is furnished to you in connection with
Letter of Credit No. (the "Letter of Credit") issued by
Morgan Guaranty Trust Company of New York (the "Bank") for the
account of . Terms defined in the Letter of
Credit and used but not defined herein have the meanings given to
them in the Letter of Credit.
I am Vice President and Assistant General Counsel of
[the
Bank][J.P. Morgan & Co. Incorporated] and have represented the
Bank
in connection with issuance of the Letter of Credit. In
connection
with the delivery of this opinion, I have examined (a) a copy of
the Letter of Credit and (b) copies, certified or otherwise
identified to my satisfaction, of such documents, corporate
records, certificates of public officials and other instruments,
and have conducted such investigation of fact and law, as I have
deemed necessary or appropriate for the opinions expressed
herein.
In rendering the opinions expressed below, (a) I have
assumed and have not verified that the signatures (other than
signatures of officers of the Bank) on all documents that I have
examined are genuine and (b) I have assumed that no draft or
certificate presented under the Letter of Credit will be forged
or
fraudulent and that there is no fraud in the transaction within
the
meaning of Section 5-114 of the Uniform Commercial Code as in
effect in the State of New York.
Based on the foregoing, I am of the opinion that:
(1) The Bank is a corporation, duly organized, validly
existing and in good standing under the laws of the State of New
York.
(2) The Bank has full corporate power and authority to
execute and deliver the Letter of Credit and to perform its
obligations thereunder and the Letter of Credit has been duly
authorized, executed and delivered by the Bank.
(3) No consents, authorizations or approvals are
required for the execution and delivery by the Bank of the Letter
of Credit and the performance of its obligations thereunder, and
no
other action by, and no notice to or filing with, any
governmental
authority or regulatory body is required for such execution,
delivery or performance.
(4) The execution, delivery and performance by the
Bank
of the Letter of Credit do not and will not contravene any law or
governmental regulation or order presently binding on the Bank or
its articles of incorporation or bylaws or contravene any
provision
of or constitute a default under any indenture, contract or other
instrument to which the Bank is a party or by which the Bank is
bound.
(5) The Letter of Credit constitutes the legal, valid
and binding obligation of the Bank enforceable in accordance with
its terms (except as enforcement thereof may be limited by
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally).
I call your attention to the inherent equitable powers
of
Bankruptcy Courts. No opinion is expressed as to the
availability
to any person of any equitable or injunctive relief.
I am a member of the bar of the State of New York and
the
opinions expressed herein are limited to the laws of the State of
New York and the Federal Laws of the United States of America.
I am furnishing this letter to you in my capacity as
Counsel for the Bank and this opinion may not be relied upon by
or
furnished to any other person without my prior written consent.
Very truly yours,
EXHIBIT C-5
[Form of Opinion of Counsel to General Partnership]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
Ladies and Gentlemen:
We have acted as special counsel to , a
general partnership organized under the laws of the State of
(the "Partnership") and we are rendering this opinion in such
capacity pursuant to the request of Franz Haniel & Cie. GmbH, a
German corporation ("Seller") in connection with the Stock
Purchase
Agreement dated as of July , 1994 (the "Stock Purchase Agree-
ment"), by and between Fleming Companies, Inc., an Oklahoma
corporation, and Seller, and the transactions contemplated
thereby.
Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Stock Purchase
Agreement or the Accord referenced below.
The opinion is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord, (the "Accord") of the
ABA Section of Business Law, (1991). As a consequence, it is
subject to a number of qualifications, exceptions, definitions,
limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion letter
should be read in conjunction therewith.
In rendering the opinions expressed below, we have
examined (a) the Stock Purchase Agreement, (b) the Partnership
Agreement dated as of , 19 with respect to the
Partnership
(the "Partnership Agreement") and (c) records to the Partnership
and such other documents as we have deemed necessary as a basis
for
the opinions expressed below. In our examination, we have
assumed
the genuineness of all signatures, the authenticity of all
documents submitted to me as originals and the conformity with
the
authentic original documents of all documents submitted to me as
copies. When relevant facts were not independently established
or
known, we have relied solely upon information from and/or
certifi-
cates of government officials and of or from a general partner of
the Partnership and its respective officers or employees and upon
the representations and warranties made in or pursuant to the
Stock
Purchase Agreement.
In rendering the opinions expressed below, we have
assumed that all of the documents referred to in this opinion
have
been duly authorized by, have been duly executed and delivered
by,
and constitute legal, valid, binding and enforceable obligations
of, all of the parties to such documents, that all signatures to
such documents have been duly authorized and that all such
parties
are duly organized and validly existing and have the power and
authority (corporate or other) to execute, deliver and perform
such
documents.
Based upon and subject to the assumptions, qualifica-
tions, exceptions and limitations contained in or referred to
herein, and having considered such questions of law as we deemed
necessary as a basis for the opinions expressed below, we are of
the opinion that:
1. The Partnership is properly organized under the
laws
of the state of its organization, and has the authority to carry
on
its business as presently conducted, and to own, lease and
operate
its properties and other assets.
2. The execution and delivery of the Stock Purchase
Agreement did not, and the consummation of the transactions
contemplated thereby will not, violate or conflict with the
Partnership Agreement.
The foregoing opinions are limited matters involving
the
laws of the State of , and we do not express any
opinion
as to the laws of any other jurisdiction.
This opinion is being provided to you pursuant to
Section
6.06 of the Stock Purchase Agreement, and this opinion may not be
relied upon by any other person or for any other purpose other
then
in connection with the transactions contemplated by the Stock
Purchase Agreement without, in each instance, our prior written
consent. Notwithstanding the foregoing, a copy of this opinion
may
be delivered by you to Morgan Guaranty Trust Company of New York,
as Agent, in connection with the Credit Agreement dated July ,
1994, among Buyer, the banks listed therein, the Co-Agents listed
therein and the Agent; provided that none of such persons may
rely
on this opinion. No expansion or interpretation of the opinion
herein may be made by implication or otherwise. The opinions
herein are based on the law and facts in existence on the date of
this letter and we assume no responsibility or obligation to
monitor any change in such law or facts hereafter or to modify or
update this opinion as a result thereof.
Very truly yours,
EXHIBIT D
[McAfee & Taft A Professional Corporation]
, 1994
Franz Haniel & Cie. GmbH
Franz - Haniel - Platz 1
D-47119 Duisburg - Ruhrort
Re: Stock Purchase Agreement by and
between Fleming Companies, Inc.
and Franz Haniel & Cie. GmbH
Ladies and Gentlemen:
We have acted as counsel to Fleming Companies, Inc.
(the
"Buyer") in connection with the preparation of the Stock Purchase
Agreement dated July , 1994 (the "Agreement"), between Buyer
and
Franz Haniel & Cie. GmbH (the "Seller") and have participated on
Buyer's behalf in connection with the acquisition by Buyer of all
of the issued and outstanding shares of common stock of Haniel
Corporation, a Delaware corporation (the "Company"). This
Opinion
Letter is provided to you at the request of Buyer pursuant to
Sec-
tion 7.04 of the Agreement. Except as otherwise indicated
herein,
capitalized terms used in this Opinion Letter are defined as set
forth in the Agreement or the Accord (see below).
This Opinion Letter is governed by, and shall be inter-
preted in accordance with, the Legal Opinion Accord (the
"Accord")
of the ABA Section of Business Law (1991). As a consequence, it
is
subject to a number of qualifications, exceptions, definitions,
limitations on coverage and other limitations, all as more
particu-
larly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law covered by the opinions
expressed herein is limited to the Federal Law of the United
States
and the Law of the State of Oklahoma.
Subject to the exceptions, qualifications and
limitations
contained herein, we are of the opinion that:
1. Buyer is a corporation duly organized, validly ex-
isting and in good standing under the laws of the State of
Oklaho-
ma. Buyer has the corporate power and authority to enter into
the
Agreement and to consummate the transactions contemplated
thereby.
2. Buyer has duly authorized the execution and
delivery
of the Agreement and the consummation of the transactions contem-
plated thereby. No further corporate actions on the part of
Buyer
are necessary to authorize the Agreement or to consummate the
tran-
sactions contemplated thereby.
3. The Agreement is enforceable against the Buyer.
4. Execution and delivery by Buyer of, and
performance
of its agreements in, the Agreement do not (i) violate the
Constit-
uent Documents of Buyer or (ii) breach or otherwise violate any
existing obligation of Buyer under any order, writ, injunction,
judgment or decree applicable to Buyer or by which any of its
prop-
erties may be bound or affected.
5. Execution and delivery by Buyer of, and
performance
by Buyer of its agreements in, the Agreement do not violate pro-
visions of statutory law and regulation.
In addition to the qualifications, exceptions, defini-
tions, limitations on coverage and other limitations described in
the Accord, this opinion is limited by, subject to or based on
the
following:
(a) With respect to paragraph 3, we are expressing no
opinions as to (i) the enforceability of provisions that purport
to
(a) establish any evidentiary standard, (b) specify any
interpreta-
tion or standard of interpretation, (c) specify the scope or
effect
of any waiver or any omission or delay of enforcement of any
remedy
or (d) dictate severance or reformation of contractual remedies,
or
(ii) the enforceability of Sections 8.08, 10.03, 10.09 and 10.12
of
the Agreement. Furthermore, our opinion as to the enforceability
of the Agreement which is governed by state law other than
Oklahoma
means that if the Agreement had reference to Oklahoma law rather
than the law of another state as the governing law, or if an
Okla-
homa court having jurisdiction were to decide that,
notwithstanding
the reference to the law of another state, such document shall be
construed in accordance with, and governed by Oklahoma law, then
such document would be enforceable.
(b) We express no opinion in paragraph 5 as to any
vio-
lation of law or regulation (i) which may have become applicable
to
Buyer as a result of the involvement of Seller in the
transactions
contemplated by the Agreement because of its legal or regulatory
status or because of any other facts specifically pertaining to
Seller; (ii) which does not have any material adverse effect on
you
and does not deprive you of any material benefit under the Agree-
ment; or (iii) which can be readily cured without significant
delay
or expense to you of any material benefit under the Agreement and
without any material adverse effect on you during the period of
such violation or the period such permit, consent, approval,
autho-
rization or action was not obtained or effected.
This Opinion Letter may be relied upon by you only in
connection with the transactions contemplated by the Agreement
and
may not be used or relied upon by you or any other person for any
purpose whatsoever, except to the extent authorized in the
Accord,
without in each instance our prior written consent.
Very truly yours,