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EXHIBIT 10(k)
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
DEAN FOODS COMPANY
AND
AGRILINK FOODS, INC.
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JULY 24, 1998
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TABLE OF CONTENTS
PAGE
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1. Definitions..............................................................................................2
2. Purchase and Sale of Target Shares......................................................................10
(a) Basic Transaction.....................................................................10
(b) Purchase Price and Transfer of Consideration..........................................10
(c) Assumption of Certain Liabilities.....................................................10
(d) The Closing...........................................................................11
(e) Deliveries at the Closing.............................................................11
(f) Closing Date Adjusted Net Working Capital Adjustment..................................11
(i) Estimated Closing Date Adjusted Net Working
Capital......................................................................11
(ii) Closing Date Adjusted Net Working Capital............................11
3. Representations and Warranties of the Seller............................................................13
(a) Representations and Warranties Concerning the Seller, Dean
International and Holding Company............................................................13
(i) Organization.........................................................13
(ii) Authorization of Transaction.........................................13
(iii) Noncontravention.....................................................14
(iv) Holding Company Status...............................................14
(v) Brokers' Fees........................................................16
(vi) Seller's Target-Related Intellectual Property........................16
(vii) Seller's Target-Related Employee Benefits............................16
(b) Representations and Warranties Concerning the Targets.................................17
(i) Organization, Qualification, and Power...............................17
(ii) Target Shares........................................................17
(iii) Noncontravention.....................................................17
(iv) Subsidiaries.........................................................18
(v) Financial Statements.................................................18
(vi) Events Subsequent to Most Recent Fiscal Year End.....................18
(vii) Legal Compliance.....................................................20
(viii) Regulatory Matters...................................................20
(ix) Tax Matters..........................................................21
(x) Real Property........................................................22
(xi) Personal Property....................................................23
(xii) Intellectual Property................................................23
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(xiii) Sufficiency of Assets...............................................25
(xiv) Inventory...........................................................25
(xv) Contracts...........................................................25
(xvi) Notes and Accounts Receivable.......................................27
(xvii) Powers of Attorney..................................................27
(xviii) Insurance...........................................................27
(xix) Litigation..........................................................27
(xx) Arbitration.........................................................28
(xxi) Product Warranty....................................................28
(xxii) Employees...........................................................28
(xxiii) Top Customers.......................................................28
(xxiv) Employee Benefits...................................................28
(xxv) Guaranties..........................................................29
(xxvi) Environmental and Public Safety Matters.............................29
(xxvii) Certain Business Relationships With the Seller and Its
Affiliates................................................................30
(xxviii) Undisclosed Liabilities.............................................30
(xxix) Books and Records...................................................30
(xxx) Annual Incentive Bonus Plan.........................................31
(xxxi) Year 2000 Compliance................................................31
(xxxii) Disclosure..........................................................31
4. Representations and Warranties of the Buyer.............................................................31
(a) Organization of the Buyer.............................................................31
(b) Authorization of Transaction..........................................................31
(c) Noncontravention......................................................................31
(d) Brokers' Fees.........................................................................32
(e) Financing.............................................................................32
(f) Investment............................................................................32
5. Pre-Closing Covenants...................................................................................33
(a) General...............................................................................33
(b) Regulatory Matters and Approvals......................................................33
(c) Operation of Business of the Targets .................................................33
(d) Operation of Business of the Aseptic Business.........................................34
(e) Full Access to the Buyer..............................................................34
(f) Full Access to the Seller.............................................................34
(g) Notice of Developments................................................................34
(h) Exclusivity to the Buyer..............................................................34
(i) Exclusivity to the Seller.............................................................35
(j) ......................................................................................35
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6. Post-Closing Covenants..................................................................................35
(a) General...............................................................................35
(b) Section 338(h)(10) Election...........................................................35
(c) Allocation of Purchase Price..........................................................35
(d) Retention of and Access to Records....................................................36
(e) Employees and Employee Benefit Plans..................................................36
(f) DFVC Name Change. ....................................................................38
(g) Non-Compete...........................................................................38
(h) Post-Closing License of Seller's Dean Trademark.......................................39
(i) Settlement of Seller Group Payments...................................................40
(j) Release of IRB Guarantee. ...........................................................40
7. Conditions to Obligation to Close.......................................................................40
(a) Conditions to Obligation of the Buyer.................................................40
(b) Conditions to Obligation of the Seller................................................42
8. Indemnification.........................................................................................44
(a) General...............................................................................44
(b) Indemnification of Buyer Indemnitees..................................................44
(c) Indemnification of Seller Indemnitees.................................................45
(d) Limitation on Indemnification Obligations.............................................45
(e) Cooperation...........................................................................46
(f) Third Party Claims Subject to Indemnification.........................................46
(g) Exclusivity...........................................................................48
9. Tax Matters.............................................................................................48
(a) Preparation and Filing of Income Tax Returns..........................................48
(b) Income Tax Refunds and Benefits.......................................................49
(c) Cooperation on Tax Matters............................................................49
(d) Control Rights........................................................................50
(e) Expenses..............................................................................50
(g) Certain Taxes.........................................................................50
10. Termination.............................................................................................51
(a) Termination of Agreement..............................................................51
(b) Effect of Termination.................................................................52
11. Miscellaneous...........................................................................................52
(a) Press Releases and Public Announcements...............................................52
(b) No Third-Party Beneficiaries..........................................................52
(c) Expenses..............................................................................52
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(d) Entire Agreement......................................................................52
(e) Succession and Assignment.............................................................53
(f) Counterparts..........................................................................53
(g) Headings..............................................................................53
(h) Notices...............................................................................53
(i) Governing Law.........................................................................54
(j) Amendments and Waivers................................................................54
(k) Severability..........................................................................54
(l) Construction..........................................................................54
(m) Incorporation of Exhibits and Disclosure Schedules....................................55
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Exhibit A - Closing Date Birds Eye License Agreement
Exhibit B - Continued Employee Severance Pay and Benefits
Exhibit C - Certain Title Commitment Items
Exhibit D - Substance of Opinion of General Counsel of the Seller
Exhibit E - Substance of Opinion of Special Counsel to Birds Eye Mexico
Exhibit F - Substance of Opinion of Counsel to the Buyer
Seller Disclosure Schedule - Exceptions to Representations and Warranties
Buyer Disclosure Schedule - Exceptions to Representations and Warranties
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into on July 24,
1998, by and between Dean Foods Company, a Delaware corporation (the "Seller"),
and Agrilink Foods, Inc., a New York corporation (the "Buyer"). The Buyer and
the Seller are sometimes referred to herein as a "Party" and collectively as the
"Parties."
The Seller owns (i) directly, all of the outstanding capital stock of Dean
Foods Vegetable Company, a Wisconsin corporation ("DFVC"), and (ii) indirectly
through Dean Foods International Investments, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Seller ("Dean International"), all of the
outstanding capital stock of BEMSA Holding, Inc., a Delaware corporation and a
wholly-owned subsidiary of Dean International ("Holding Company"). DFVC and
Holding Company directly own all of the issued and outstanding capital stock of
Birds Eye de Mexico SA de CV, a limited liability company organized under the
laws of Mexico ("Birds Eye Mexico" and, together with DFVC, the "Targets"). The
Buyer owns and operates an aseptic business conducted out of its Benton Harbor,
Michigan facility (the "Aseptic Business").
This Agreement contemplates a transaction in which the Seller will sell or
cause to be sold to the Buyer and/or one or more subsidiaries of the Buyer, for
consideration comprised of cash and the Aseptic Business of the Buyer (or, under
certain circumstances, for consideration comprised solely of cash), all of the
outstanding capital stock of DFVC and Holding Company. If the consideration
includes the Aseptic Business, the transfer of the Aseptic Business to the
Seller will be effected pursuant to the Asset Transfer Agreement by and between
the Seller and the Buyer of even date herewith (the "Asset Transfer Agreement").
In connection with such transaction (i) the Seller will transfer to the Buyer
and/or one or more subsidiaries of the Buyer all of the Seller's right, title
and interest in the trademarks of the Seller that are used in the businesses of
the Targets, subject to a royalty-free three-year license back to the Seller of
one of such trademarks for certain uses, (ii) the Seller will assign to the
Buyer or a subsidiary of the Buyer Seller's rights as licensor under the
agreement pursuant to which it licenses Kraft General Foods, Inc. ("Kraft") to
use certain of such trademarks and (iii) if the consideration includes the
Aseptic Business, the Buyer will grant to the Seller a royalty-free perpetual
license of certain of the Buyer's trademarks used in the Aseptic Business for
certain uses. In connection with the sale of the capital stock of DFVC and
Holding Company, the transferee of Seller's rights under the agreement referred
to in clause (ii) of the preceding sentence will assume Seller's obligations
thereunder and the Buyer will undertake certain severance obligations related to
employees of the Targets.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
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1. Definitions.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of state,
local or foreign law.
"All Cash Alternative" has the meaning set forth in Section 2(b).
"Aseptic Business" has the meaning set forth in the preface.
"Asset Transfer Agreement" has the meaning set forth in the preface.
"Birds Eye Mexico" has the meaning set forth in the preface.
"Birds Eye Mexico Series A Stock" means the Series A Stock of Birds Eye
Mexico.
"Birds Eye Mexico Series B Stock" means the Series B Stock of Birds Eye
Mexico.
"Birds Eye Dips Trademark" means "BIRDS EYE" for dairy based dips and for
caramel dips, U.S. Reg. No. 1,982,485.
"Buyer" has the meaning set forth in the preface.
"Buyer Disclosure Schedule" means the schedule entitled "Buyer Disclosure
Schedule" heretofore delivered by the Buyer, which schedule is arranged in
sections corresponding to the lettered and numbered subsections contained in
Section 4.
"Buyer Indemnitee" has the meaning set forth in Section 8(b).
"CERCLA" has the meaning set forth in Section 3(b)(xxvi)(E).
"Closed Premises" means the DFVC facilities and related real estate located
at Brillion and Cedar Grove, Wisconsin, Bellingham, Washington, and McAllen,
Texas.
"Closing" has the meaning set forth in Section 2(d).
"Closing Date" has the meaning set forth in Section 2(d).
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"Closing Date Birds Eye License Agreement" means a license agreement in form
and substance as set forth in Exhibit A attached hereto between the transferee
of the Seller's rights in and to the Birds Eye Dips Trademark, as licensor, and
the Seller, as licensee.
"Closing Date Adjusted Net Working Capital" means the amount equal to the
excess of (i) all inventory and trade receivables of the Targets as of the close
of business on the day immediately preceding the Closing Date over (ii) all
trade accounts payable and inventory-related accruals of the Targets as of the
close of business on the day immediately preceding the Closing Date, as finally
determined in accordance with Section 2(f)(ii)(A). Items included in Closing
Date Adjusted Net Working Capital shall be valued on the basis for their
valuation set forth in the notes to the Most Recent Balance Sheet, except that
inventory shall be valued on a first-in, first-out basis. The quantities and
types of inventory included in Closing Date Adjusted Net Working Capital shall
be the Targets' book inventory as of the close of business on the day
immediately preceding the Closing Date (reflecting any subsequent postings as of
the close of business on the day immediately preceding the Closing Date made in
accordance with the Targets' past practices), and no physical inventory shall be
conducted.
"Closing Date Adjusted Net Working Capital Statement" has the meaning set
forth in Section 2(f)(ii)(A).
"Closing Date Adjusted Net Working Capital Target" means $155,188,000.
"COBRA" means the requirement of Part 6 of Subtitle B of Title I of ERISA
and Code Section 4980B.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Confidentiality Agreement" means the letter agreement, dated April 24, 1998
between the Buyer and the Seller.
"Consolidated Income Tax Returns" has the meaning set forth in Section
9(a)(i).
"Continued Employees" has the meaning set forth in Section 6(e).
"Controlled Group" has the meaning set forth in Section 3(b)(xxiv).
"Control Group Liability" means any joint and several liability imposed by
law on entities that are Affiliates of each other.
"Damages" means all liabilities, demands, claims, actions or causes of
action, regulatory, legislative or judicial proceedings or investigations,
assessments, levies, losses, fines, penalties,
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damages, costs and expenses, including, without limitation, reasonable fees and
expenses of attorneys, accountants and other professionals sustained or
incurred in connection with the defense or investigation of any claim.
"Dean International" has the meaning set forth in the preface.
"Delaware General Corporation Law" means the General Corporation Law of the
State of Delaware.
"DFVC" has the meaning set forth in the preface.
"DFVC Common Stock" means any share of the Common Stock, par value $0.01 per
share, of DFVC.
"DFVC Savings Plan" has the meaning set forth in Section 6(e)(iii).
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit
Plan or fringe benefit or other retirement, bonus, or incentive plan or program,
including without limitation any stock option or other equity-based plan or
severance plan or arrangement.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
"Environmental Requirements" means all federal, state, local and foreign
statutes, regulations, ordinances and similar provisions having the force or
effect of law, all judicial and administrative orders and determinations, and
all common law, concerning pollution or protection of the environment and public
health and safety, including without limitation all those relating to the
presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control or cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"Estimated Closing Date Adjusted Net Working Capital" has the meaning set
forth in Section 2(f)(i).
"Estimated Cash Purchase Price" means the amount of cash set forth in clause
(i) of the first sentence of Section 2(b), before any adjustment or increase
referred to in such clause, or, in the event the All Cash Alternative becomes
applicable, the amount of cash set forth in the penultimate sentence of Section
2(b), in either case increased by (i) any excess of Estimated Closing Date
Adjusted Net Working Capital over the Closing Date Adjusted Net Working Capital
Target or decreased by any excess of the Closing Date Adjusted Net Working
Capital Target over Estimated Closing Date Adjusted Net Working Capital and (ii)
the amount of the purchase price increase (if any) provided in Section 6(b).
"Existing Birds Eye License Agreement" means the Trademark License
Agreement, dated December 27, 1993, by and between the Seller and Kraft (a part
of Kraft's rights under which have been assigned by it to Orange-Co, Inc.).
"Farmers Processing" means Farmers Processing, Inc., a California
corporation.
"FDC Act" means the Federal Food, Drug and Cosmetic Act, as amended from
time to time.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Financial Statements" has the meaning set forth in Section 3(b)(v).
"Foreign Plans" has the meaning set forth in Section 3(b)(xxiv).
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Governmental Entities" has the meaning set forth in Section 3(b)(vii).
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended from time to time.
"Holding Company" has the meaning set forth in the preface.
"Holding Company Common Stock" means any share of the Common Stock, no par
value per share, of Holding Company.
"Income Tax" means any federal, state, local or foreign income tax,
including any interest, penalty, or addition thereto, whether disputed or not.
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"Income Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Income Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Indemnified Party" means a party that is entitled to indemnification from
another party pursuant to Section 8.
"Indemnifying Party" means a party that is required to provide
indemnification to another party pursuant to Section 8.
"Independent Firm" has the meaning set forth in Section 2(f)(ii)(A).
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"IRB" means the Village of Fairwater, Wisconsin, Tax Exempt Adjustable Mode
Industrial Development Refunding Revenue Bonds, Series 1990, for the benefit of
DFVC in the original principal amount of $2.45 million.
"IRB Guarantee" means the Guarantee Agreement, dated May 1, 1997, between
the Seller and Wachovia Bank of North Carolina with respect to the IRB.
"Knowledge of the Seller" means (i) the actual knowledge, without special
investigation, of William McManaman, the Vice President, Finance and Chief
Financial Officer of the Seller, or Jeffrey P. Shaw, Thomas E. Osetek, Richard
L. Claiborn or Byron Johnson, the President, Senior Vice President, Sales and
Marketing, Vice President, Finance and Vice President, Manufacturing,
respectively, of DFVC, and (ii) the actual knowledge, without independent
investigation, of the Seller which arises from the review of an executed
certificate of each of the Persons described above
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under (i) regarding the accuracy of the representations and warranties of the
Seller contained in Section 3 of the July 16, 1998 draft of this Agreement,
which certificates were distributed by the Seller prior to the date of this
Agreement to such Persons along with the representations and warranties of the
Seller contained in Section 3 of the July 16, 1998 draft of this Agreement and
the July 14, 1998 draft of the Seller Disclosure Schedule.
"Kraft" has the meaning set forth in the preface.
"Leased Premises" has the meaning set forth in Section 3(b)(x)(B).
"Mexican Premises" means the real property owned by Birds Eye Mexico and the
facilities thereon.
"Most Recent Balance Sheet" means the statement of assets and liabilities
with respect to the fiscal year ended May 31, 1998 contained in the Financial
Statements.
"Most Recent Fiscal Year End" has the meaning set forth in Section 3(b)(v).
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"Non-Compete Businesses" has the meaning set forth in Section 6(g).
"Non-Compete Period" has the meaning set forth in Section 6(g).
"Objection Notice" has the meaning set forth in Section 2(f)(ii)(A).
"Owned Premises" has the meaning set forth in Section 3(b)(x)(A).
"Parties" has the meaning set forth in the preface.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a Governmental Entity.
"Proprietary Information" means "Proprietary Information" as such term is
used in the Confidentiality Agreement.
"Purchase Price" has the meaning set forth in Section 2(b).
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"Records Retention Date" has the meaning set forth in Section 6(d).
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Section 338(h)(10) Election" has the meaning set forth in Section 6(b).
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's and similar
liens being contested in good faith if the related payment obligation is then
due and payable, (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith, (c) purchase money liens and liens
securing rental payments under capital lease arrangements, (d) other liens
arising in the ordinary course of business and not incurred in connection with
the borrowing of money and (e) solely with respect to owned real property, other
encumbrances which, in the aggregate, do not materially adversely affect the
value of such real property or the owner's ability to use such real property for
its intended purpose.
"Seller" has the meaning set forth in the preface.
"Seller Disclosure Schedule" means the schedule entitled "Seller Disclosure
Schedule" heretofore delivered by the Seller, which schedule is arranged in
sections corresponding to the lettered and numbered subsections contained in
Section 3.
"Seller Indemnitee" has the meaning set forth in Section 8(c).
"Seller Plans" has the meaning set forth in Section 3(b)(vii).
"Seller's Dean Trademark" means the bird-on-mailbox logo of the Seller, U.S.
Reg. Nos. 1,342,947, 1,343,368, 1,500,715, 1,519,979 and 1,953,924.
"Seller's Retirement Plan" has the meaning set forth in Section 6(e)(iv).
"Seller's Savings Plan" has the meaning set forth in Section 3(a)(vii).
"Seller's Target-Related Intellectual Property" has the meaning set forth in
Section 3(a)(vi).
"Silage-Related Litigation" means (i) Southern Michigan Beef Company and
Decaturland Investments vs. DFVC, Case No. 97-42-482-CK-H (State of Michigan in
the Circuit Court for the County of Van Buren), (ii) Steve Hovander and Star
Hovander d/b/a Hovander Farms vs. DFVC,
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No. 97-2-00707-7 (Superior Court of the State of Washington in and for the
County of Whatcom) and (iii) Richard J. Cipri vs. DFVC et al., File No.
92-37-137-CE-B (State of Michigan in the Circuit Court for the County of Van
Buren) and any other litigation arising out of the same facts and circumstances
as such litigation.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity.
"SWDA" has the meaning set forth in Section 3(b)(xxvi)(E).
"Targets" has the meaning set forth in the preface.
"Targets' Dean-Related Packaging/Labels" means all of the packaging and
label inventory (including label inventory affixed to finished goods) of the
Targets that exists (or which has been ordered by the Targets but not yet
delivered) at the Closing Date which bears the Seller's Dean Trademark.
"Targets' Intellectual Property" has the meaning set forth in Section
3(b)(xii)(B).
"Target Shares" means all of the outstanding DFVC Common Stock and Birds Eye
Mexico Series A Stock and Birds Eye Mexico Series B Stock.
"Taxes" means all taxes, charges, fees, premiums, levies, penalties or other
assessments imposed by any United States federal, state or local or foreign
taxing authority, including, but not limited to, Income Taxes, franchise or
capital stock taxes, sales taxes, use taxes, gross receipts taxes, real or
personal property taxes, excise taxes, transfer taxes, payroll, withholding,
social security or other taxes (including taxes or premiums for unemployment
insurance or similar governmental impositions), including any interest,
penalties or additions attributable thereto.
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"Third Party Claims" shall mean any claims for Damages which are asserted or
threatened by a Person, other than a Party or a successor or assign of a Party,
against any Indemnified Party or to which an Indemnified Party is subject from
such a Person.
"Threshold Amount" has the meaning set forth in Section 8(d)(ii).
"Title Insurance Commitments" has the meaning set forth in Section
3(b)(x)(D).
"WARN Act" has the meaning set forth in Section 6(e)(vi).
2. Purchase and Sale of Target Shares.
(a) Basic Transaction. On and subject to the terms and conditions of
this Agreement, the Buyer agrees that it will purchase from the Seller and Dean
International, and the Seller agrees that it will (and will cause Dean
International to) sell to the Buyer, for the consideration specified in Section
2(b), all of the outstanding capital stock of DFVC and Holding Company, and the
Seller agrees that in connection with such purchase and sale it will (i)
transfer all of the Seller's right, title and interest in and to Seller's
Target-Related Intellectual Property to the Buyer, subject to the Closing Date
Birds Eye License Agreement and (ii) assign to the Buyer Seller's rights as
licensor under the Existing Birds Eye License Agreement. It is expressly agreed
by the Parties that the Buyer may choose to have title to some or all of such
Target Shares and Seller's Target-Related Intellectual Property and/or the
Existing Birds Eye License Agreement conveyed to one or more Subsidiaries of the
Buyer rather than to the Buyer, provided that each such Subsidiary and the
particular assets to which it is to take title are identified to the Seller at
least 15 days prior to the Closing Date. In such event, except to the extent the
context otherwise requires, each of the references to the Buyer herein
(including without limitation in the representations and warranties of the Buyer
in Section 4) shall be a reference not only to the Buyer but also to each such
Subsidiary.
(b) Purchase Price and Transfer of Consideration. The consideration
referred to in Section 2(a) is (i) $390,000,000 in cash, adjusted as provided in
Section 2.2(f)(ii) and increased by the amount of the purchase price increase
(if any) provided in Section 6(b), and (ii) the Aseptic Business of the Buyer
(collectively, the "Purchase Price"). For the convenience of the Parties, any
cash payment will be made solely to the Seller, which will be responsible for
forwarding to Dean International its portion of such cash payment. It is
expressly agreed by the Parties that the Seller may choose to have the Aseptic
Business conveyed to one or more subsidiaries of the Seller rather than to the
Seller, provided that each such Subsidiary and the particular assets to which it
is to take title are identified to the Buyer at least 15 days prior to the
Closing Date. Notwithstanding the foregoing, unless the Closing has occurred
prior to September 22, 1998 or the Parties have otherwise agreed in writing (in
their respective sole discretion), and unless prior to such date all applicable
waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act
with respect to the transfer of the Aseptic Business to the Seller shall have
expired or otherwise been terminated (in
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17
either case without threat by any Governmental Entity of any action, suit or
proceeding described in Section 7(a)(iv) based on any antitrust statute,
regulation, rule or other restriction), then effective on such date the
consideration referred to in Section 2(a) and the "Purchase Price" shall each be
$523,000,000 in cash, adjusted as provided in Section 2.2(f)(ii) and increased
by the amount of the purchase price increase (if any) provided in Section 6(b)
(the "All Cash Alternative"). If the All Cash Alternative becomes applicable,
the Asset Transfer Agreement shall terminate in accordance with the terms
thereof.
(c) Assumption of Certain Liabilities. In connection with the purchase
and sale contemplated herein, the transferee of Seller's rights as licensor
under the Existing Birds Eye License Agreement shall assume Seller's obligations
thereunder (and, if such transferee is a Subsidiary of the Buyer, the Buyer
shall guarantee such Subsidiary's performance of the assumed obligations).
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Kirkland & Ellis in
Chicago, Illinois, commencing at 9:00 a.m. local time on the second business day
following the satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date and time as the Parties may mutually
determine (the date and time of the Closing, the "Closing Date").
(e) Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments and documents
referred to in Section 7(a), (ii) the Buyer will deliver to the Seller the
various certificates, instruments and documents referred to in Section 7(b),
(iii) the Seller and Dean International will deliver or cause to be delivered to
the Buyer stock certificates representing all of the Holding Company Common
Stock and all of the Target Shares owned by the Seller, endorsed in blank or
accompanied by duly executed assignment documents, (iv) the Buyer will pay to
the Seller in cash, by wire transfer or delivery of other immediately available
funds, an amount equal to the Estimated Cash Purchase Price and (v) if the All
Cash Alternative has not become applicable, the transfer of the Aseptic Business
to the Seller pursuant to the Asset Transfer Agreement shall be consummated.
(f) Closing Date Adjusted Net Working Capital Adjustment.
(i) Estimated Closing Date Adjusted Net Working Capital. At least
3 business days in advance of the Closing, the Seller shall prepare in
good faith and deliver to the Buyer an estimate of Closing Date
Adjusted Net Working Capital ("Estimated Closing Date Adjusted Net
Working Capital").
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18
(ii) Closing Date Adjusted Net Working Capital.
(A) Determination of Closing Date Adjusted Net Working
Capital. Within 45 days of the Closing Date, the Buyer and its
independent auditors shall deliver to the Seller a statement of
Closing Date Adjusted Net Working Capital (the "Closing Date
Adjusted Net Working Capital Statement"). The Buyer and its
auditors will (i) make available to the Seller and its agents,
attorneys and accountants upon reasonable advance notice all
records and work papers necessary to understand the Closing Date
Adjusted Net Working Capital Statement and to calculate Closing
Date Adjusted Net Working Capital and (ii) allow the Seller and
its agents, attorneys and accountants upon reasonable advance
notice to interview any Buyer or Target personnel or independent
auditor personnel significantly involved in the preparation of the
Closing Date Adjusted Net Working Capital Statement. If the Seller
disagrees with the computation of Closing Date Adjusted Net
Working Capital contained in the Closing Date Adjusted Net Working
Capital Statement, the Seller may, within 30 days after receipt of
the Closing Date Adjusted Net Working Capital Statement, deliver a
notice (the "Objection Notice") to the Buyer setting forth the
objections of the Seller and, to the extent reasonably possible,
Closing Date Adjusted Net Working Capital as determined by the
Seller. The Buyer and the Seller will use reasonable efforts to
resolve any disagreements as to the computation of Closing Date
Adjusted Net Working Capital, but if they do not obtain a final
resolution within 15 days after the Buyer has received the
Objection Notice, the Buyer and the Seller will jointly retain
Arthur Andersen LLP, or, if such firm is unwilling to serve,
another independent accounting firm of recognized national
standing that is not a public accountant of the Buyer, the Seller
or any of their respective Affiliates (an "Independent Firm") to
resolve any remaining disagreements. If the Buyer and the Seller
are unable to agree on the choice of an Independent Firm, the
choice will be selected by lot from those top five accounting
firms that are Independent Firms or, if no top five accounting
firm is an Independent Firm or is willing to serve, selected by
lot from those Independent Firms that are willing to serve. The
Buyer and the Seller will direct the chosen Independent Firm to
render a determination within 30 days of its retention and the
Buyer and the Seller and their respective agents will cooperate
with the chosen Independent Firm during its engagement. The chosen
Independent Firm will consider only those issues related to the
determination of Closing Date Adjusted Net Working Capital set
forth in the Objection Notice which the Buyer and the Seller have
been unable to resolve. The determination of the chosen
Independent Firm will be based on and consistent with the
definition of Closing Date Adjusted Net
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19
Working Capital included herein. The determination of the chosen
Independent Firm will be conclusive and binding upon the Buyer and
the Seller. In any proceeding described above in this paragraph,
all of the costs and expenses of the Buyer (including reasonable
attorneys' fees and expenses) shall be borne by the Buyer, all of
the costs and expenses of the Seller (including reasonable
attorneys' fees and expenses) shall be borne by the Seller and all
costs and expenses of the chosen Independent Firm shall be borne
by the Buyer in the event that the Closing Date Adjusted Net
Working Capital reflected in the Closing Date Adjusted Net Working
Capital Statement, as adjusted to reflect the resolution by the
Parties of any objections of the Seller to the Closing Date
Adjusted Net Working Capital Statement, is lower than Closing Date
Adjusted Net Working Capital; otherwise the Seller shall bear all
the costs and expenses of the chosen Independent Firm.
(B) Payment. If Closing Date Adjusted Net Working Capital
exceeds Estimated Closing Date Adjusted Net Working Capital, the
Buyer shall pay to the Seller within 5 business days of the final
determination of Closing Date Adjusted Net Working Capital the
amount of such excess, which shall be payable in cash by wire
transfer or delivery of other immediately available funds. If
Closing Date Adjusted Net Working Capital is less than Estimated
Closing Date Adjusted Net Working Capital, the Seller shall pay to
the Buyer within 5 business days of the final determination of
Closing Date Adjusted Net Working Capital the amount of such
deficit, which shall be payable in cash by wire transfer or
delivery of other immediately available funds. No interest shall
be paid with respect to any adjustment amount due and timely paid
pursuant to this subsection.
3. Representations and Warranties of the Seller.
(a) Representations and Warranties Concerning the Seller, Dean
International and Holding Company. The Seller represents and warrants to the
Buyer that, subject in the case of the representations and warranties in each
particular section below to the exceptions set forth in the corresponding
section of the Seller Disclosure Schedule:
(i) Organization. Each of the Seller, Dean International and
Holding Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Holding
Company is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is
required. Holding Company has corporate power and corporate
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20
authority to carry on the businesses in which it is engaged and to own
and use the properties owned or used by it.
(ii) Authorization of Transaction. The Seller has full corporate
power and corporate authority to execute and deliver this Agreement
and all other agreements contemplated hereby to which the Seller is or
is to be a party and to perform its obligations hereunder and
thereunder. The board of directors of the Seller has duly approved
this Agreement and all other agreements contemplated hereby to which
the Seller is or is to be a party and has duly authorized the Seller's
execution and delivery of this Agreement and all such other agreements
and the consummation of the transactions on the part of the Seller
contemplated hereby and thereby. This Agreement and all such other
agreements constitute the valid and legally binding obligations of the
Seller, enforceable in accordance with their respective terms, except
as enforceability may be limited by bankruptcy or other laws affecting
creditor's rights generally and limitations on the availability of
equitable remedies. Dean International has full corporate power and
corporate authority to sell the Target Shares of Holding Company as
contemplated by this Agreement. The board of directors of Dean
International, and the Seller as the sole stockholder of Dean
International, have duly approved such sale.
(iii) Noncontravention. Neither the execution and delivery of this
Agreement and the other agreements contemplated hereby to which the
Seller is or is to be a party, nor the consummation of the
transactions on the part of the Seller or Dean International
contemplated hereby and thereby, (i) violates any constitution,
statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge or other restriction of any government, governmental
agency or court to which the Seller, Dean International or Holding
Company is subject (except that no representation or warranty is made
with respect to any antitrust statute, regulation, rule or other
restriction) or any provision of the charter or bylaws of the Seller,
Dean International or Holding Company or (ii) conflicts with, results
in a breach of, constitutes a default under, results in the
acceleration of, creates in any party the right to accelerate,
terminate, modify or cancel, or requires any notice under, any
agreement, contract, lease, license, instrument or other arrangement
to which the Seller, Dean International or Holding Company is a party
or by which any of them is bound or to which any of their assets is
subject (or results in the imposition of any Security Interest upon
any of their assets). Neither the Seller, Dean International nor
Holding Company needs to give any notice to, make any filing with or
obtain any authorization, consent or approval of, any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, other than in connection
with the provisions of the Hart-Scott-Rodino Act and the
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21
Securities Exchange Act, and other than any other notice, filing, authorization,
consent or approval that has been given, made or obtained.
(iv) Holding Company Status.
(A) Holding Company was formed on June 4, 1998 solely for
the purpose of holding capital stock of Birds Eye Mexico. Holding
Company has no asset other than capital stock of Birds Eye Mexico
and cash, has conducted no business or operations, has incurred no
liabilities or obligations other than expenses related to its
incorporation and its continuing corporate existence and has not
had any employees.
(B) The entire authorized capital stock of Holding Company
consists of 200 shares of Holding Company Common Stock, 100 of
which are issued and outstanding and none of which are held in
treasury. Such outstanding shares are owned of record by Dean
International, free and clear of any restrictions on transfer
(other than any restrictions under the Securities Act and state
securities laws), Security Interests or purchase rights. Neither
the Seller, Dean International nor Holding Company is a party to
any option, warrant, purchase right or other contract or
commitment that could require any of them to issue, sell, transfer
or otherwise dispose of any capital stock of Holding Company
(other than this Agreement). Neither the Seller nor Dean
International is a party to any voting trust, proxy or other
agreement or understanding with respect to the voting of any
capital stock of Holding Company. The section of the Seller
Disclosure Schedule corresponding to this Section 3(a)(iv)(B)
lists the directors and officers of Holding Company.
(C) The section of the Seller Disclosure Schedule
corresponding to this Section 3(a)(iv)(C) lists all state, local
and foreign Income Tax Returns filed with respect Holding Company
since its formation, indicates which of those Income Tax Returns
have been audited, and indicates which of those Income Tax Returns
are currently the subject of audit. Holding Company is not a party
to any tax allocation or sharing agreement which allocates tax
liability to Holding Company independently of the allocation
elected under Treasury Regulation Section 1.1552-1. Since its
formation, Holding Company has not been a member of an Affiliated
Group filing a consolidated U.S. federal Income Tax Return (other
than a group the common parent of which was the Seller), and
Holding Company has no liability for the taxes of any Person
(other than any of the Seller and its Subsidiaries) under Reg.
Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or
otherwise.
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22
(D) Holding Company has timely filed all tax and information
returns required to be filed and has paid or has accrued on its
books and set up an adequate reserve for the payment of all Taxes
reflected on such returns required to be paid in respect of the
periods covered by such returns and has accrued on its books and
set up an adequate reserve for the payment of all Taxes
anticipated to be payable in respect of periods through the end of
the calendar month preceding the date hereof. Holding Company is
not delinquent in the payment of any Taxes, assessment or
governmental charge. No deficiencies for any Taxes have been
proposed, asserted or assessed against Holding Company that have
not been resolved or settled, and no requests for waivers of the
time to assess any Taxes against Holding Company are pending or
have been agreed to. Holding Company is not currently the subject
of an audit or examination of any of its tax returns by the
Internal Revenue Service or any state, municipal or other taxing
authority. Holding Company is not a party to any action or
proceeding by any Governmental Entities for the assessment or
collection of Taxes. Deferred taxes of Holding Company have been
accounted for in accordance with GAAP.
(v) Brokers' Fees. Neither the Seller nor any of its Subsidiaries
has any liability or obligation to pay any fees or commissions to any
broker, finder or agent with respect to the transactions contemplated
by this Agreement for which the Buyer or any of its Subsidiaries
(including the Targets and Holding Company subsequent to the Closing)
could become liable or obligated.
(vi) Seller's Target-Related Intellectual Property. The section of
the Seller Disclosure Schedule corresponding to this Section 3(a)(vi)
identifies each patent or trademark registration or pending application
which has been issued to or is filed by the Seller with respect to any
of the Seller's Intellectual Property, in each case that is used by
either Target in the conduct of its business ("Seller's Target-Related
Intellectual Property"). The Seller has made available to the Buyer
correct and complete copies of all such patents, registrations and
applications. No trade name or unregistered trademark owned by the
Seller is used by either of the Targets in connection with its
business. With respect to each item of Seller's Target-Related
Intellectual Property (in the case of each such item other than a
United States item, to the Knowledge of the Seller): (i) Seller
possesses all right, title and interest in and to the item, free and
clear of any Security Interest, license, agreement, consent or other
restriction which adversely affects the use or ownership of such item;
(ii) the item is not subject to any outstanding injunction, judgment,
order, decree, ruling or charge; and (iii) no action, suit, proceeding,
hearing, investigation, charge, complaint,
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23
claim or demand is pending or, to the Knowledge of the Seller,
threatened against the Seller or any of its Subsidiaries which
challenges the legality, validity, enforceability, use or ownership of
the item.
(vii) Seller's Target-Related Employee Benefits. The section of
the Seller Disclosure Schedule corresponding to this Section 3(a)(vii)
lists each Employee Benefit Plan that the Seller maintains (other than
any severance arrangement for which neither the Buyer nor any of its
Subsidiaries (including the Targets and Holding Company subsequent to
the Closing) could become liable or obligated) under which any employee
of either of the Targets is provided coverage (the "Seller Plans").
Seller has made available to Buyer true and correct copies of all such
Employee Benefit Plans. The Dean Foods Company Savings and Investment
Plan (the "Seller's Savings Plan") has previously received a
determination letter from the Internal Revenue Service that the plan is
qualified under Section 401(a) of the Code and nothing has occurred
since the date of such determination that would materially and
adversely affect the qualification of such plan. The Seller's Savings
Plan has been maintained and administered in compliance in all material
respects with ERISA and the Code.
(b) Representations and Warranties Concerning the Targets. The Seller
represents and warrants to the Buyer that, subject in the case of the
representations and warranties in each particular section below to the
exceptions set forth in the corresponding section of the Seller Disclosure
Schedule:
(i) Organization, Qualification, and Power. Each of the Targets
is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. Each of the Targets is duly
authorized to conduct business and is in good standing under the laws
of each other jurisdiction where such qualification is required. Each
of the Targets has corporate (or limited liability company, as
applicable) power and corporate (or limited liability company, as
applicable) authority to carry on the businesses in which it is engaged
and to own and use the properties owned or used by it. The section of
the Seller Disclosure Schedule corresponding to this Section 3(b)(i)
lists the directors and officers of each of the Targets.
(ii) Target Shares. The entire authorized capital stock of DFVC
consists of 3,000 shares of DFVC Common Stock, 1,000 of which are
issued and outstanding and none of which are held in treasury. The
entire authorized capital stock of Birds Eye Mexico consists of (x)
1,000 shares of Birds Eye Mexico Series A Stock, all of which are
issued and outstanding and none of which are held in treasury, and (y)
5,000 shares of Birds Eye Mexico Series B Stock, all of which are
issued and
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24
outstanding and none of which are held in treasury. Such outstanding
shares are owned of record as set forth in the section of the Seller
Disclosure Schedule corresponding to this Section 3(b)(ii), in each
case free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws),
Security Interests or purchase rights. Neither the Seller, Dean
International, Holding Company nor either of the Targets is a party to
any option, warrant, purchase right or other contract or commitment
that could require any of them to issue, sell, transfer, or otherwise
dispose of any capital stock of either of the Targets (other than this
Agreement). Neither the Seller, Dean International nor Holding Company
is a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any capital stock of either
of the Targets.
(iii) Noncontravention. The consummation of the transactions
contemplated by this Agreement do not (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge or other restriction of any government, governmental agency or
court to which either of the Targets is subject (except that no
representation or warranty is made with respect to any antitrust
statute, regulation, rule or other restriction) or any provision of the
charter or bylaws (or similar governing documents) of either of the
Targets or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify or cancel, or require any notice
under, any material agreement, contract, lease, license, instrument or
other arrangement to which either of the Targets is a party or by which
either of them is bound or to which any of their assets is subject (or
result in the imposition of any Security Interest upon any of their
assets). Neither of the Targets needs to give any notice to, make any
filing with or obtain any authorization, consent or approval of, any
government or governmental agency in order for the Parties to
consummate the transactions or perform the obligations contemplated by
this Agreement, other than in connection with the provisions of the
Hart-Scott-Rodino Act, and other than any notice, filing,
authorization, consent or approval that has been given, made or
obtained.
(iv) Subsidiaries. Neither of the Targets has any Subsidiary.
Neither of Targets owns any interest in any other corporation,
partnership, joint venture or other business entity, other than the
ownership by DFVC of shares of Birds Eye Mexico Series B Stock and of
one-half of the capital stock of Farmers Processing.
(v) Financial Statements. The financial statements previously
delivered to the Buyer (collectively, the "Financial Statements"),
consisting of an unaudited statement of assets and liabilities (and
notes thereto) as of May 31, 1998 (the "Most Recent Fiscal Year End")
and unaudited income and cash flows (and notes thereto)
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25
for the fiscal years ended May 31, 1998 and May 25, 1997 for the
Targets, have been derived from the internal books and records of the
Targets, which have been maintained in a manner consistent with the
accounting practices of the Seller, and the financial information
reflected in the Financial Statements is included in the Seller's
consolidated financial statements which are prepared in accordance
with GAAP consistently applied. The Seller makes no other
representation or warranty with respect to the Financial Statements.
(vi) Events Subsequent to Most Recent Fiscal Year End. Since the
Most Recent Fiscal Year End, there has not been any material adverse
change in the business, operations or financial condition of the
Targets taken as a whole. Without limiting the generality of the
foregoing, since that date:
(A) neither of the Targets has sold, leased, transferred or
assigned any material assets, tangible or intangible, except for
sales of inventory in the ordinary course of its business;
(B) no party (including either of the Targets) has
accelerated, terminated, made material modifications to or
canceled any material agreement, contract, lease or license to
which either of the Targets is a party or by which either of them
is bound;
(C) neither of the Targets has made any material capital
expenditures materially in excess of the budgeted amount for
capital expenditures previously provided to the Buyer by the
Seller;
(D) neither of the Targets has made any material capital
investment in, or any material loan to, any other Person;
(E) there has not been any increase in the obligations owed
by either of the Targets for borrowed money;
(F) neither of the Targets has mortgaged, pledged or
subjected to any Security Interest any of its assets or
properties;
(G) neither of the Targets has waived or released any of its
material rights;
(H) neither of the Targets has granted any license or
sublicense of any material rights under or with respect to any of
its Intellectual Property;
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26
(I) there has been no change made or authorized in the
charter or bylaws (or similar governing documents) of either of
the Targets;
(J) neither of the Targets has issued, sold or otherwise
disposed of any of its capital stock, or granted any options,
warrants or other rights to purchase or obtain (including upon
conversion, exchange or exercise) any of its capital stock;
(K) neither of the Targets has experienced any material
damage, destruction or loss (whether or not covered by insurance)
to its property;
(L) neither of the Targets has made any loan to, or entered
into any other transaction with, any of its directors or officers
other than the advance or reimbursement of reasonable business
expenses incurred or to be incurred in the ordinary course of
business;
(M) neither of the Targets has entered into any employment
contract with any of its directors or officers or any collective
bargaining agreement, written or oral, or modified the terms of
any existing such contract or agreement;
(N) neither of the Targets has granted any increase in the
compensation payable or to become payable to any of its directors
or officers, except for annual increases in the ordinary course of
business consistent with past practice;
(O) neither of the Targets has adopted, amended, modified or
terminated any bonus, profit-sharing, incentive, severance or
other plan, contract or commitment for the benefit of any of its
directors and officers (or taken any such action with respect to
any other Employee Benefit Plan);
(P) neither of the Targets has made any other material
change in employment terms for any of its directors or officers
outside the ordinary course of its business;
(Q) neither of the Targets has made any change in its
accounting principles for financial reporting;
(R) neither of the Targets has experienced any material
adverse change in its business, operations or financial condition;
and
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27
(S) neither of the Targets has committed to any of the
foregoing.
(vii) Legal Compliance. Each of the Targets has complied in all
material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings and charges thereunder) of federal, state, local and foreign
governments (and all departments, agencies and political subdivisions
thereof) (collectively, "Governmental Entities"). No material
investigation, review, inquiry or proceeding by any Governmental Entity
with respect to either of the Targets is pending or, to the Knowledge
of the Seller, threatened. None of the Targets currently is subject to
any agreement, contract or decree with any Governmental Entity arising
out of any current or previously existing violations or alleged
violations.
(viii) Regulatory Matters. Each of the Targets possesses all
regulatory permits, licenses and other governmental authorizations and
approvals which it is required by applicable law to obtain, all of
which have been duly obtained and are in full force and effect; each of
the Targets is in compliance in all material respects with the
respective terms and conditions thereof, and there are no material
proceedings pending or, to the Knowledge of the Seller, threatened
seeking to revoke, cancel or suspend, or to adversely modify, any
thereof. The consummation of the transactions contemplated hereby will
not result in the revocation, cancellation, suspension or adverse
modification of any thereof.
(ix) Tax Matters.
(A) The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(ix)(C) lists all state, local
and foreign Income Tax Returns filed with respect to either of the
Targets for taxable periods ended on or after May 28, 1995,
indicates which of those Income Tax Returns have been audited, and
indicates which of those Income Tax Returns are currently the
subject of audit.
(B) Neither of the Targets is a party to any tax allocation
or sharing agreement which allocates tax liability to the Targets
independently of the allocation elected under Treasury Regulation
Section 1.1552-1. With respect to taxable periods beginning on or
after January 1, 1988, neither of the Targets (A) has been a
member of an Affiliated Group filing a consolidated U.S. federal
Income Tax Return (other than a group the common parent of which
was the Seller) or (B) has any liability for the taxes of any
Person (other than any of the Seller and its Subsidiaries) under
Reg.
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28
Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract, or
otherwise.
(C) Each of DFVC and Holding Company is a member of a
selling consolidated group (within the meaning of Section
338(h)(10)(A)(i) of the Code) of which the Seller is the common
parent.
(D) The Targets have each timely filed all tax and
information returns required to be filed and paid (or the Seller
has paid or caused to be paid on behalf of the Targets), or have
accrued on their respective books and set up adequate reserves for
the payment of, all Taxes reflected on such returns or required to
be paid in respect of the periods covered by such returns and have
accrued on their respective books and set up an adequate reserve
for the payment of all Taxes anticipated to be payable in respect
of periods through the end of the calendar month preceding the
date hereof. Neither Target is delinquent in the payment of any
Taxes, assessment or governmental charge. No deficiencies for any
Taxes have been proposed, asserted or assessed against either
Target that have not been resolved or settled, and no requests for
waivers of the time to assess any Taxes against either Target are
pending or have been agreed to. Neither of Targets is currently
the subject of an audit or examination of any of its tax returns
by the Internal Revenue Service or any state, municipal or other
taxing authority. Neither Target is a party to any action or
proceeding by any Governmental Entity for the assessment or the
collection of Taxes. Deferred taxes of each Target have been
accounted for in accordance with GAAP.
(E) Each of the Targets has withheld amounts from its
employees and stockholders in compliance with the tax withholding
provisions of applicable federal, state and local laws, has filed
all federal, state and local returns and reports for all periods
for which such returns or reports are due with respect to income
tax withholding, social security, unemployment taxes, income and
other Taxes (and all payments or deposits with respect to such
taxes have been timely made) and has notified all employees and
stockholders of their obligations to file all forms, statements
and reports with it in accordance with applicable federal, state
and local tax laws and have taken reasonable steps to insure that
such employees and stockholders have filed all such forms,
statements and reports with it.
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(x) Real Property.
(A) The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(x)(A) lists all real property
that either of the Targets owns (the "Owned Premises"). With
respect to each such parcel of owned real property:
i. the identified owner has good and marketable title to
the parcel of real property, free and clear of any Security
Interest, easement, covenant or other restriction, except for
Security Interests, easements, covenants and other
restrictions which have been disclosed by the Title Insurance
Commitment for the respective real property and other
easements and restrictions existing generally with respect to
properties of a similar character which do not affect
materially and adversely the current use, occupancy or value,
or the marketability of title, of the property subject
thereto (provided that for purposes of indemnification
pursuant to Section 8 the representations and warranties
contained in this Section 3(b)(x)(A)(i) shall be deemed made
as if the items described on Exhibit C were not included in
the Title Commitments);
ii. there are no pending or, to the Knowledge of the
Seller, threatened condemnation proceedings, lawsuits or
administrative actions relating to the property or other
matters affecting materially and adversely the current use,
occupancy or value thereof;
iii. there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any
portion thereof or interest therein; and
iv. there are no parties (other than the respective
Target) in possession of the parcel of real property, other
than tenants under any leases disclosed in the section of the
Seller Disclosure Schedule corresponding to Section
3(b)(x)(B) who are in possession of space to which they are
entitled.
(B) The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(x)(B) lists all real property
leased or subleased to or by either of the Targets (the "Leased
Premises").
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(C) None of the businesses conducted by either of the
Targets on any of the Owned Premises or Leased Premises, and, to
the Knowledge of the Seller, none of the improvements included in
the Owned Premises or the Leased Premises, is in material
violation of any building line or use or occupancy restriction,
limitation, condition or covenant of record, any zoning or
building law, code or ordinance, or any public utility or other
easement.
(D) The Seller has delivered or caused to be delivered to
the Buyer (i) copies of recent ALTA (or equivalent) title
insurance commitments with respect to each of the Owned Premises,
other than the Mexican Premises and the Brillion, Cedar Grove and
Ft. Atkinson, Wisconsin facilities, committing to insure title in
such real estate, subject in each case only to the exceptions
contained therein (collectively, the "Title Insurance
Commitments"). The Seller has delivered or caused to be delivered
to the Buyer correct and complete copies of all existing title
insurance policies and surveys in the possession or control of the
Seller with respect to the Owned Premises.
(xi) Personal Property. Each of the Targets has good title to, or
a valid leasehold in, or a contractual or common law right to use, all
of the personal property it uses in the conduct of its business, free
and clear of all Security Interests.
(xii) Intellectual Property.
(A) Neither of the Targets has infringed upon,
misappropriated or violated any Intellectual Property rights of
third parties, nor has either of the Targets received any
complaint, claim, demand or notice alleging any such infringement,
misappropriation or violation (including any claim that either of
the Targets must license or refrain from using any Intellectual
Property rights of any third party). To the Knowledge of the
Seller, no third party has infringed upon, misappropriated or
violated any Intellectual Property rights of either of the Targets
in any respect.
(B) The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(xii)(B) identifies each patent
or registration which has been issued to either of the Targets
with respect to any of the Intellectual Property of the Targets
and identifies each pending patent application or application for
registration which either of the Targets has made with respect to
any of the Intellectual Property of the Targets (the "Targets'
Intellectual Property"). The section of the Seller Disclosure
Schedule corresponding to this Section 3(b)(xii)(B) also
identifies each license, agreement or other permission which
either of the Targets has granted to any third party with
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respect to any of the Targets' Intellectual Property (together
with any exceptions). The Seller has made available to the Buyer
correct and complete copies of all such patents, registrations,
applications, licenses, agreements and permissions (as amended to
date). The section of the Seller Disclosure Schedule corresponding
to this Section 3(b)(xii)(B) also identifies each trade name or
trademark of a third party used by either of the Targets in
connection with its business, other than any trade names or
trademarks of third parties used by either of the Targets under
private label arrangements for such third parties. With respect to
each item of the Targets' Intellectual Property required to be so
identified in the Seller Disclosure Schedule: (i) the relevant
Target possess all right, title and interest in and to the item,
free and clear of any Security Interest, license or other
restriction; (ii) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling or charge; (iii) no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the Knowledge of the
Seller, threatened against either of the Targets which challenges
the legality, validity, enforceability, use or ownership of the
item; and (iv) neither of the Targets has ever agreed to indemnify
any Person for or against any infringement, misappropriation or
other conflict with respect to the item.
(C) The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(xii)(C) identifies each item of
Intellectual Property that any third party (other than Seller)
owns or licenses as licensee and that either of the Targets uses
pursuant to license, sublicense, agreement or permission, other
than any trade names or trademarks of third parties used by either
of the Targets under private label arrangements for such third
parties. With respect to each item of Intellectual Property
required to be so identified in the Seller Disclosure Schedule,
neither of the Targets has granted any sublicense or similar right
with respect to the license, sublicense, agreement or permission.
(xiii) Sufficiency of Assets. The assets owned or leased by the
Targets or which the Targets have a contractual right to use, together
with Seller's Target-Related Intellectual Property, include all of the
assets necessary for the conduct of the Targets' businesses as
conducted on the date of this Agreement.
(xiv) Inventory. The inventory of each of the Targets is of a
quality and quantity which is usable or saleable in the ordinary course
of its business, except to the extent of the reserve for inventory
writedown reflected in the Most Recent Balance Sheet as adjusted in
accordance with past custom and practice for operations and
transactions through the Closing Date. Each ingredient and finished
product included in the inventory of each of the Targets: (i) complies
in all material respects
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with (x) the FDC Act and all acts amending or supplementing the FDC Act
(including, without limitation, the Food Additive Amendment of 1958),
and (y) the pure food and drug laws of each and all states of the
United States into which any such product would normally be shipped by
the respective Target, (ii) is not adulterated or misbranded within the
meaning of the FDC Act or such state laws, (iii) is not prohibited from
being introduced into interstate commerce under the provisions of
Sections 404 or 505 of the FDC Act, and (d) does not contain a
hazardous substance or a banned substance.
(xv) Contracts. The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(xv) lists the following contracts
and other agreements to which either of the Targets is a party:
(A) any partnership, joint venture or other similar
agreement or arrangement;
(B) any agreement concerning confidentiality or
noncompetition;
(C) any agreement with the Seller or an Affiliate of the
Seller (other than between the Targets);
(D) any employment agreement or change in control agreement
with any of its directors, officers or employees;
(E) any collective bargaining agreement;
(F) any indenture, mortgage, promissory note, loan
agreement, guaranty or other agreement or commitment for the
borrowing of money or any related security agreement;
(G) any agreement under which it has advanced or loaned any
amount to any of its directors, officers and employees other than
the advance or reimbursement of reasonable business expenses
incurred or to be incurred in the ordinary course of business;
(H) any agreement under which either of the Targets is
lessee or lessor of or holds or operates any real property;
(I) any agreement under which either of the Targets is
lessee or lessor of or holds or operates any material personal
property;
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(J) any warehouse agreement;
(K) any agreement for the sale or purchase of products or
services other than purchase or sale orders entered into in the
ordinary course of business;
(L) any agreement under which a sale of any of the Owned
Premises is pending;
(M) any environmental indemnity agreement for the benefit of
a party other than either of the Targets;
(N) any license, sublicense, agreement or permission (as
licensee or licensor) with respect to any of Targets' Intellectual
Property;
(O) any co-pack, tolling or supply agreement; or
(P) any other agreement or group of related agreements with
the same party involving more than $250,000 per year and not
terminable by the Target that is a party thereto on 6 months' or
less notice without penalty.
The Seller has made available to the Buyer a correct and complete copy of each
such contract or agreement. With respect to each such contract or agreement
(insofar as the following relates to any party thereto other than a Target, to
the Knowledge of the Seller): (i) the contract or agreement is in full force and
binding upon the parties thereto; (ii) no party is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default, or permit termination, modification or acceleration, under the
contract or agreement; and (iii) no party has repudiated any provision of the
contract or agreement. The Seller has also made available to the Buyer a written
summary of the significant terms (other than with respect to pricing and
specifications) of the letter agreement, dated June 15, 1998, by and between the
Seller and Ball Corporation (relating to the supply of cans to the Seller).
(xvi) Notes and Accounts Receivable. The notes and accounts
receivable of each of the Targets are reflected properly on its books
and records, are valid receivables subject to no setoffs or
counterclaims, are collectible at their aggregate face amount, except
to the extent of the allowances for deductions and the reserve for bad
debts reflected in the Most Recent Balance Sheet as adjusted in
accordance with past custom and practice for operations and
transactions through the Closing Date.
(xvii) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of either of the Targets.
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(xviii) Insurance. The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(xviii) contains a description of all
policies of fire, liability, workers' compensation and other forms of
insurance providing insurance coverage to or for either of the Targets,
and the name of the owner of each such policy. All premiums with
respect thereto have been paid when due and no notice of cancellation
or termination has been received with respect to any such policy. All
such policies and the coverage provided thereunder will continue to be
in full force and effect through the Closing Date (but, except in the
case of coverage under those policies owned solely by either of the
Targets, if any, the coverage provided to or for the Targets thereunder
may be canceled as of the Closing Date). No such insurer has any right
of payment, whether by way of set-off, indemnity or otherwise, of any
nature whatsoever, against either Target in respect of any recovery
under any such policy.
(xix) Litigation. The section of the Seller Disclosure Schedule
corresponding to this Section 3(b)(xix) sets forth each instance in
which either of the Targets: (i) is subject to any outstanding
injunction, judgment, order, decree, ruling or charge or (ii) is a
party to any action, suit, proceeding, hearing or investigation of, in
or before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction. The section of the
Seller Disclosure Schedule corresponding to this Section 3(b)(xix) also
sets forth all actions, suits, proceedings, hearings or investigations
of, in or before any court or quasi-judicial or administrative agency
of any federal, state, local or foreign jurisdiction with which, to the
Knowledge of the Seller, either of the Targets has been threatened.
(xx) Arbitration. Neither of the Targets is a party to, or bound
by, any decree, order or arbitration award (or agreement entered into
in any administrative, judicial or arbitration proceeding) with respect
to or affecting its properties, assets, personnel or business
activities.
(xxi) Product Warranty. Neither of the Targets has made any oral
or written warranties with respect to the quality or absence of defects
of its products which it has sold and which are in force as of the date
hereof. There are no claims pending or, to the Knowledge of the Seller,
anticipated or threatened against either of the Targets with respect to
the quality of or absence of defects in such products. Neither of the
Targets has paid or been required to pay direct, incidental or
consequential damages to any person in connection with any of such
products.
(xxii) Employees. To the Knowledge of the Seller, no executive,
key employee or significant group of employees plans to terminate
employment with
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35
either of the Targets during the next 12 months. Neither of the Targets
has experienced any strike or material grievance, claim of unfair labor
practice, or other collective bargaining dispute within the past two
years. To the Knowledge of the Seller, there is no organizational
effort presently being made or threatened by or on behalf of any labor
union with respect to employees of either of the Targets.
(xxiii) Top Customers. The section of the Seller Disclosure
Schedule corresponding to this Section 3(b)(xxiii) sets forth a
complete and correct list of the top 10 customers by dollar volume of
the Targets, taken as a whole, during the fiscal year ended May 31,
1998. Except in the ordinary course, to the Knowledge of the Seller
none of such customers intends to cease doing business with either of
the Targets or to significantly reduce the general level of business it
is currently doing with either of the Targets.
(xxiv) Employee Benefits. The section of the Seller Disclosure
Schedule corresponding to this Section 3(b)(xxiv) lists each Employee
Benefit Plan of either of the Targets in which the employees of the
Targets participate on the date hereof. The Seller has made available
to the Buyer true and correct copies (or summaries) of all such
Employee Benefit Plans. Except as set forth in the section of the
Seller Disclosure Schedule corresponding to this Section 3(b)(xxiv),
DFVC does not participate in or contribute to any Employee Benefit Plan
that is a Multiemployer Plan. DFVC has not incurred any liability to
the PBGC, the Internal Revenue Service, any Multiemployer Plan or
otherwise with respect to any Employee Pension Benefit Plan currently
or previously maintained by members of the controlled group of
companies (as defined in Sections 414(b) and (c) of the Code) that
includes the Seller (the "Controlled Group") that has not been
satisfied in full, and no condition exists that presents a material
risk to any member of the Controlled Group of incurring such a
liability, other than any liability for premiums due to the PBGC. The
Targets would not incur any withdrawal liability under any
Multiemployer Plan of the Targets if a complete withdrawal were to
occur under such Plan as of the Closing Date. No payment (excluding any
payment the right to which was created subsequent to the Closing Date)
that will be made by any Target to any DFVC Continued Employee after
the Closing Date on account of the transactions contemplated by this
Agreement will be non-deductible to the Targets or subject to excise
tax, under Code Section 280G or Code Section 4999, nor will any Target
be required to "gross up" any DFVC Continued Employee because of the
imposition of such excise tax. The Seller will make available to the
Buyer within 30 days after the date of this Agreement information
regarding the post-retirement medical benefits currently provided to
employees of the Targets and the obligations existing under FAS 106
with respect to such employees.
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Each Employee Benefit Plan which is maintained by Birds Eye Mexico (the "Foreign
Plans") has been maintained and administered in all material respects in
accordance with all applicable laws.
(xxv) Guaranties. Neither of the Targets is a guarantor or
otherwise is responsible for any liability or obligation (including
indebtedness) of any other Person.
(xxvi) Environmental and Public Safety Matters.
(A) Each of the Targets and, to the Knowledge of the Seller,
its predecessors has complied in all material respects and is in
compliance in all material respects with all Environmental
Requirements.
(B) Without limiting the generality of the foregoing, each
of the Targets has obtained, has complied in all material respects
with and is in compliance in all material respects with all
material permits, licenses and other authorizations required to be
obtained by it pursuant to Environmental Requirements applicable
to its Owned Premises and Leased Premises.
(C) Neither of the Targets has received any written or oral
notice, report or other information regarding any actual or
alleged violation of Environmental Requirements, or any actual or
alleged liabilities or potential liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, under any
Environmental Requirements, relating to any of the Owned Premises
or Leased Premises.
(D) None of the following exists at any of the Owned
Premises or Leased Premises: (1) underground storage tanks, (2)
asbestos-containing material in any friable and damaged form or
condition, (3) materials or equipment containing polychlorinated
biphenyls or other hazardous substances or (4) landfills, surface
impoundments or disposal areas.
(E) Neither of the Targets has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or
released any substance, including without limitation any hazardous
substance, or owned or operated any property or facility, in a
manner that has given or would give rise to any liability,
including any liability for response costs, corrective action
costs, personal injury, property damage, natural resources damages
or attorney fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or the
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Solid Waste Disposal Act, as amended ("SWDA"), or any other
Environmental Requirements; nor, to the Knowledge of the Seller,
has any predecessor of either of the Targets done so.
(F) This Section 3(b)(xxvi) contains the sole and exclusive
representations and warranties of the Seller with respect to
environmental and public safety matters, including without
limitation any arising under any Environmental Requirements, to
the exclusion among others of the Seller's representations and
warranties in Section 3(b)(vii).
(xxvii) Certain Business Relationships With the Seller and Its
Affiliates. Neither of the Targets has been involved in any business
arrangement or relationship (including without limitation any support
service arrangement) with the Seller or any of its Affiliates other
than the Targets within the past 12 months, and the Seller and such
Affiliates do not own any material asset, tangible or intangible (other
than Seller's Target-Related Intellectual Property), which is used in
the business of either of the Targets.
(xxviii) Undisclosed Liabilities. To the Knowledge of the Seller,
all of the obligations or liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise, whether due or to become due,
and regardless of when asserted) that would have been required to be
reflected, disclosed or reserved against in the Most Recent Balance
Sheet, in accordance with the accounting practices of the Seller, have
been so reflected, disclosed or reserved against in such Balance Sheet,
or in the notes thereto.
(xxix) Books and Records. The corporate records books, transfer
books and stock ledgers of the Targets are complete and accurate in all
material respects and reflect all meetings, consents and other material
actions of the organizers, incorporators, stockholders, boards of
directors, and committees of the boards of directors of each of the
Targets, and all transactions in their respective capital stocks, since
their respective inception.
(xxx) Annual Incentive Bonus Plan. The Seller's Annual Incentive
Bonus Plan for its 1999 fiscal year, insofar as it relates to employees
of the Targets, has been prepared in accordance with the Seller's past
practice and custom.
(xxxi) Year 2000 Compliance. To the Knowledge of the Seller, the
amounts budgeted by the Targets for fiscal year 1999 with respect to
ensuring that the computer systems (including all hardware, software,
firmware, operating systems and application programs) owned by the
Targets are year 2000 compliant are sufficient
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38
to bring the computer systems owned by the Targets as of the date of
this Agreement into year 2000 compliance.
(xxxii) Disclosure. No representation or warranty by the Seller in
this Agreement or in any document, written statement, certificate or
schedule required to be furnished to the Buyer pursuant hereto or in
connection with the transactions contemplated hereby, contains any
untrue statement of a material fact.
4. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller that, subject in the case of the representations and
warranties in each particular section below to the exceptions set forth in the
corresponding section of the Buyer Disclosure Schedule:
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Authorization of Transaction. The Buyer has full corporate power
and corporate authority to execute and deliver this Agreement and all other
agreements contemplated hereby to which the Buyer is or is to be a party and to
perform its obligations hereunder and thereunder. The board of directors of the
Buyer has duly approved this Agreement and all other agreements contemplated
hereby to which the Buyer is or is to be a party and has duly authorized the
Buyer's execution and delivery of this Agreement and all such other agreements
and the consummation of the transactions on the part of the Buyer contemplated
hereby and thereby. This Agreement and all such other agreements constitute the
valid and legally binding obligations of the Buyer, enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy or other laws affecting creditor's rights generally and limitations
on the availability of equitable remedies.
(c) Noncontravention. Neither the execution and delivery of this
Agreement and the other agreements contemplated hereby to which the Buyer is or
is to be a party, nor the consummation of the transactions on the part of the
Buyer contemplated hereby and thereby, (i) violates any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge or other
restriction of any government, governmental agency or court to which the Buyer
is subject (except that no representation or warranty is made with respect to
any antitrust statute, regulation, rule or other restriction) or any provision
of the charter or bylaws (or similar governing documents) of the Buyer or (ii)
conflicts with, results in a breach of, constitutes a default under, results in
the acceleration of, creates in any party the right to accelerate, terminate,
modify or cancel, or requires any notice under, any agreement, contract, lease,
license, instrument or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject (or results in the
imposition of any Security Interest upon any of its assets). The Buyer does not
need to give any notice to, make any filing with or obtain any authorization,
consent or approval of, any government or governmental agency in order for the
Parties to consummate the transactions
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39
contemplated by this Agreement, other than in connection with the provisions of
the Hart-Scott-Rodino Act.
(d) Brokers' Fees. Neither the Buyer nor any of its Subsidiaries has
any liability or obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this Agreement for
which the Seller or any of its Subsidiaries could become liable or obligated.
(e) Financing. The Buyer has furnished to the Seller correct and
complete copies of written confirmations from third parties which provide the
Buyer with adequate financing in connection with the transactions contemplated
by this Agreement (excluding any financing that would be required if the All
Cash Alternative becomes applicable), and the Buyer shall provide to the Seller
on or before August 10, 1998 correct and complete copies of (i) a written
agreement from a third party which provides the Buyer with adequate financing to
consummate the transactions contemplated by this Agreement (excluding any
financing that would be required if the All Cash Alternative becomes applicable)
and (ii) a highly confident letter with respect to financing the additional cash
consideration to be paid by the Buyer if the All Cash Alternative becomes
applicable (the form and substance of which written agreement and highly
confident letter shall be reasonably acceptable to the Seller).
(f) Investment. The Buyer understands that the capital stock of DFVC
and Holding Company has not been, and shall not be, registered under the
Securities Act, or under any state securities laws, and is being offered and
sold in reliance upon United States federal and state exemptions for
transactions not involving any public offering. The Buyer acknowledges that it
is acquiring the capital stock of DFVC and Holding Company solely for its own
account for investment purposes, and not with a view to, or intention to effect,
the distribution thereof in violation of the Securities Act or any applicable
state securities laws, and that the capital stock of DFVC and Holding Company
may not be disposed of in contravention of the Securities Act or any applicable
state securities laws. The Buyer represents that it is a sophisticated investor
with knowledge and experience in business and financial matters, is able to
evaluate the risks and benefits of the investment in the capital stock of DFVC
and Holding Company, has received certain information concerning each of the
Targets and has had the opportunity to obtain additional information as desired
in order to evaluate the merits of and the risks inherent in purchasing the
capital stock of DFVC and Holding Company.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties shall use its reasonable best efforts
to take all action and to do all things necessary, proper or advisable in order
to consummate and make effective, as soon as reasonably practicable, the
transactions contemplated by this Agreement (including
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satisfaction, but not waiver of, the closing conditions set forth in Section 7).
The Seller shall take such further action (including the execution and delivery
of such further instruments and documents) as the Buyer reasonably may request
in connection with (i) changing title to the name of DFVC with respect to any
real property which is owned by DFVC but the title to which is not in the name
of DFVC and (ii) removing any Security Interest listed on Exhibit C on any of
the Owned Premises, all at the sole cost and expense of the Seller.
(b) Regulatory Matters and Approvals. Each of the Parties shall (and
the Seller shall cause Dean International, Holding Company and each of the
Targets to) give any notices to, make any filings with, and use its reasonable
best efforts to obtain any authorizations, consents and approvals of,
governments and governmental agencies in connection with the matters referred to
in Sections 3(a)(iii), 3(b)(iii) and 4(c). Without limiting the generality of
the foregoing, the Buyer and the Seller shall each file any Notification and
Report Forms and related material that it may be required to file in connection
with the transactions contemplated by this Agreement with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the Hart-Scott-Rodino Act, shall each use its reasonable best efforts to
obtain an early termination of the applicable waiting period, and shall each
make any further filings pursuant thereto that may be necessary, proper or
advisable.
(c) Operation of Business of the Targets. The Seller shall cause each
of the Targets to conduct its business only in the ordinary course and
consistent with past practice, including causing each of the Targets to use all
commercially reasonable efforts to preserve intact its present business and
organization, to keep available the services of its current officers and
employees, to preserve its relationships with customers, suppliers and others
having business dealings with it and to maintain in full force and effect all
material contracts, documents and arrangements. The Seller shall also cause each
of the Targets to not make any material change to its inventory management
practices and to manage its inventories in accordance with past custom and
practice. The foregoing notwithstanding, the Parties expressly contemplate and
the restriction contained in the preceding sentence shall not apply to, and
Seller shall be permitted to engage in, the historical practice of the Seller to
sweep cash out of bank accounts of the Targets on a daily basis.
(d) Operation of Business of the Aseptic Business. The Buyer shall
cause the Aseptic Business to conduct its business only in the ordinary course
and consistent with past practice, including causing the Aseptic Business to use
all commercially reasonable efforts to preserve intact its present business and
organization, to keep available the services of its current officers and
employees, to preserve its relationships with customers, suppliers and others
having business dealings with it and to maintain in full force and effect all
material contracts, documents and arrangements. The Buyer shall also cause the
Aseptic Business to not make any material change to its inventory management
practices and to manage its respective inventories in accordance with past
custom and practice.
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(e) Full Access to the Buyer. The Seller shall cause each of the
Targets to permit representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere unreasonably with the
normal business operations of such Target, to all premises, properties,
personnel, books, records (including tax records and accounting work papers),
contracts and documents of or pertaining to such Target. The Buyer shall treat
and hold all information it receives from either of the Targets in the course of
the access contemplated by this Section 5(e) as Proprietary Information.
(f) Full Access to the Seller. The Buyer shall permit representatives
of the Seller to have full access at all reasonable times, and in a manner so as
not to interfere unreasonably with the normal business operations of the Aseptic
Business, to all premises, properties, personnel, books, records (including tax
records and accounting work papers), contracts and documents of or pertaining to
the Aseptic Business. The Seller shall treat and hold all information it
receives from the Buyer in the course of the access contemplated by this Section
5(f) as Proprietary Information.
(g) Notice of Developments. Each Party shall give prompt written
notice to the other in the event its own representations and warranties are
discovered to be untrue as of the time made or in the event such Party
determines that such representations and warranties shall be untrue as if made
at and as of the Closing Date. No disclosure by any Party pursuant to this
Section 5(g), however, shall be deemed to amend or supplement the Seller
Disclosure Schedule or the Buyer Disclosure Schedule or to cure any
misrepresentation or breach of warranty.
(h) Exclusivity to the Buyer. After the execution and delivery of this
Agreement, the Seller shall not (and shall not cause or permit Dean
International, Holding Company or either of the Targets to) solicit, initiate,
participate in discussions of or encourage the submission of any proposal or
offer from any Person relating to any or all of the capital stock of either of
the Targets or of Holding Company or to the acquisition of all or substantially
all of the assets of either of the Targets or of Holding Company (including any
acquisition structured as a merger, consolidation or share exchange). The Buyer
acknowledges that prior to the execution and delivery of this Agreement, the
Seller has solicited indications of interest in and/or bids regarding such
transactions.
(i) Exclusivity to the Seller. After the execution and delivery of
this Agreement, the Buyer shall not solicit, initiate, participate in
discussions of or encourage the submission of any proposal or offer from any
Person relating to the acquisition of all or substantially all of the Aseptic
Business (including any acquisition structured as a merger, consolidation or
share exchange).
(j) Title Insurance Commitments. The Seller will use its commercially
reasonable efforts to obtain and cause to be delivered to the Buyer prior to the
Closing an ALTA (or equivalent) title insurance commitment with respect to each
of the Brillion, Cedar Grove and Ft. Atkinson, Wisconsin Owned Premises and a
certificate of a Governmental Entity of Mexico regarding liens with respect to
the Mexican Premises.
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6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action
is necessary to carry out the purposes of this Agreement, each of the Parties
will take such further action (including the execution and delivery of such
further instruments and documents) as the other Party reasonably may request,
all at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Section 8). Each of the
Parties shall, and shall cause its officers, directors, employees and
accountants, and each of its Subsidiaries, to assist and cooperate fully with
the other Party and its officers, employees, accountants, counsel, financial
advisors and other representatives (as reasonably requested), in connection with
the preparation of any reports, schedules and other documents required to be
filed as a result of the transactions contemplated hereunder pursuant to the
requirements of federal and state securities laws, including for illustrative
purposes only, the preparation of audited financial statements and pro forma
financial information in connection with any reporting obligation under Section
13 or 15(d) of the Securities Exchange Act and Form 8-K.
(b) Section 338(h)(10) Election. At the option of the Buyer, and
provided written request is made of the Seller by the Buyer on or before the
Closing, the Seller will join with the Buyer in making an election under Section
338(h)(10) of the Code (and any corresponding elections under state or local tax
law) (collectively a "Section 338(h)(10) Election") with respect to the purchase
and sale of the capital stock of DFVC and Holding Company hereunder, and if such
Election is made by the Buyer, the Purchase Price and the Estimated Cash
Purchase Price shall automatically be increased by an amount equal to exactly
$13,200,000. Any such request to the Seller shall constitute Buyer's
representation and warranty that it is eligible to make the Section 338(h)(10)
Election.
(c) Allocation of Purchase Price. The Parties agree that for tax
purposes: (i) the Seller's Target-Related Intellectual Property will be valued
at $105 million; and (ii) the balance of the Purchase Price will be allocated to
the Holding Company Common Stock and to the Target Shares owned by the Seller
(or, in the event there is a timely Section 338(h)(10) Election, will be
allocated, together with the liabilities of DFVC and other relevant items, to
the assets of Holding Company and DFVC (including the Birds Eye Mexico Series A
Stock and Series B Stock held by Holding Company and DFVC) as the Buyer
determines consistent with the Code and applicable rules and regulations
thereunder). In the event the Purchase Price includes the Aseptic Business, the
value of the Aseptic Business for purposes of the foregoing will be determined
by appraisal as provided in the Asset Transfer Agreement. The Buyer will notify
the Seller of its allocations pursuant to (ii) above no later than 60 days after
the Closing Date. The Seller will have 30 days to review and approve such
allocations, such approval not to be unreasonably withheld or delayed. The
Seller and the Buyer agree to report the allocation of the Purchase Price in a
manner entirely
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consistent with such valuations and allocations and agree to act in accordance
with such valuations and allocations in the preparation of financial statements
and filing of all tax returns (including, without limitation, filing Form 8594
(or Form 8023 in the event a Section 338(h)(10) Election is made by the Buyer
and the Seller) with its Federal income tax return for the taxable year that
includes the date of the Closing) and in the course of any tax audit, tax review
or tax litigation relating thereto.
(d) Retention of and Access to Records. Until the seventh anniversary
of the Closing Date (the "Records Retention Date"), the Buyer shall (and shall
cause each of its Subsidiaries, including the Targets, to) permit the Seller and
its attorneys, accountants, agents and designees such access to, and right to
copy, the records and documents of Holding Company and each of the Targets which
exist at the Closing (regardless of whether such documents or records are in the
possession of Holding Company, a Target, the Buyer or an Affiliate of the Buyer)
as the Seller may deem reasonably necessary or reasonably desirable. Any such
examination and copying shall be at the expense of the Seller, shall be
performed at the place where such records and documents are regularly maintained
and shall not unreasonably interfere with the normal business activities of the
furnishing party. In the event that the Buyer (or any of its Affiliates) intends
to destroy any of such records or documents prior to the Records Retention Date,
it shall so notify the Seller in writing at least 90 days before taking such
action (and the Seller shall have the right to review and remove at its expense
any of such records or documents to be destroyed).
(e) Employees and Employee Benefit Plans.
(i) Subject to the succeeding provisions of this Section 6(e),
the Buyer will cause the Targets to continue in employment immediately
following the Closing Date (or, in the case of an employee within
clause (ii) of this sentence, immediately following the date of his or
her commencement of or return to active employment) (i) each employee
on the Targets' active payroll on the Closing Date and (ii) each
employee of the Targets not on the Targets' active payroll on the
Closing Date on account of an approved leave of absence, disability
leave or layoff if such employee returns to active employment with the
respective Target immediately upon the conclusion of any such leave or
layoff, or within the period required by law or any applicable
collective bargaining agreement (all employees continuing such
employment being referred to herein as "Continued Employees"). Such
continued employment and the benefits to be provided to the Continued
Employees shall recognize the date of hire and time of service with the
respective Target and its Affiliates (and their respective
predecessors) for all purposes except as otherwise expressly provided
in this Section 6(e). Nothing contained in this (i) shall confer upon
any Continued Employee the right to continued employment by the
respective Target for any period of time after immediately after the
Closing Date (or date of commencement of or return to active
employment, as applicable) which is not
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otherwise required by law or the terms of any applicable collective
bargaining agreement. The Targets shall continue to be bound by, and
the Buyer will cause the Targets to honor the terms of, each collective
bargaining agreement which applies to the Continued Employees. The
Buyer shall cause DFVC, at its sole expense, to provide each Continued
Employee with any severance pay and benefits applicable to such
Continued Employee pursuant to Exhibit B.
(ii) Effective as of the Closing Date, the Continued Employees
shall cease to be covered under the employee benefit plans of the
Seller, if any, and shall participate under the employee benefit plans,
programs and policies maintained or established by the respective
Target. Each employee benefit plan, program or policy maintained or
established by either Target with respect to any Continued Employees
shall credit the Continued Employees covered thereby for all purposes
(unless such crediting would result in a duplication of benefits) with
the service that was recognized immediately prior to the Closing Date
under the comparable plan of the Seller or the comparable plan of the
respective Target maintained immediately prior to the Closing and, with
respect to each plan that is an Employee Welfare Benefit Plan, the
Continued Employees shall be covered without regard to any waiting
period or pre-existing condition restriction and shall receive credit
for all deductibles, co-payments and other out-of-pocket expenses
incurred under the Seller's plans during the portion of the applicable
plan year that precedes the Closing Date. The Seller shall use its
reasonable best efforts (i) to assign or otherwise transfer to DFVC any
group policy or contract governing welfare benefits for the DFVC
Continued Employees that is maintained on a stand-alone basis for such
employees and (ii) if requested by the Buyer, in the case of a group
policy or contract governing welfare benefits for DFVC Continued
Employees and other employees of the Seller, to assign or otherwise
transfer to DFVC the portion of the policy or contract covering the
DFVC Continued Employees.
(iii) Effective as of the Closing Date, the Buyer shall cause DFVC
to establish for the DFVC Continued Employees a defined contribution
plan, or make the DFVC Continued Employees eligible for an existing
defined contribution plan of the Buyer, that is qualified under Section
401(a) of the Code (the "DFVC Savings Plan"). Upon the Seller's receipt
of evidence satisfactory to it relative to the establishment or the
availability of the DFVC Savings Plan and that such Plan is qualified
under Section 401(a) of the Code, the Seller shall cause the trustee of
the Seller's Savings Plan to transfer the account balances of the
Continued Employees in the Seller's Savings Plan to the DFVC Savings
Plan, including without limitation, any outstanding participant loans.
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(iv) Effective as of the Closing Date, the Continued Employees
shall cease active participation in the Dean Foods Company Retirement
Plan (the "Seller's Retirement Plan"). The Seller shall retain all
assets of the Seller's Retirement Plan and the liabilities for benefits
of the Continued Employees accrued through the Closing Date under the
Seller's Retirement Plan. Each Continued Employee will be entitled to a
distribution of his or her benefits accrued as of the Closing Date
under the Seller's Retirement Plan after the employee, in addition to
satisfying the otherwise applicable requirements for commencement of
his or her benefits under the terms of such Plan, has retired or is
terminated from employment with DFVC.
(v) The Seller agrees that it shall be solely responsible for the
provision of health care continuation coverage required pursuant to the
terms of COBRA for those former employees of DFVC whose entitlement to
such continuation coverage occurred before the Closing Date. The Buyer
shall cause DFVC, to the extent required, to offer "continuation
coverage" under its group health plans to all Continued Employees and
to comply with all notice and other requirements under COBRA or similar
state statue so that the Seller shall have no liability or obligation
under COBRA or a similar state statue to the Continued Employees as a
result of the transactions contemplated by this Agreement.
(vi) The Buyer shall cause DFVC, for a period of 90 days after the
Closing Date, not to cause any of the Continued Employees to suffer
"employment loss" for purposes of the Worker Adjustment and Retraining
Notification Act and related regulations (the "WARN Act"), if such
employment loss could create any liability for the Seller.
(f) DFVC Name Change. Immediately following the Closing, the Buyer
shall change the name of DFVC to a name which is different from and not
confusingly similar to "Dean Foods Vegetable Company" and which does not contain
the word "Dean." The Buyer acknowledges that, subject to (h) below, neither it
nor Holding Company nor either of the Targets will have any right, title or
interest in or to the name "Dean" or any variation thereof subsequent to the
Closing Date.
(g) Non-Compete. The Seller agrees not to (and to cause its
Subsidiaries not to), during the period of 5 years following the Closing (the
"Non-Compete Period"), directly or indirectly own any interest in, manage,
control, participate in, consult with, render services for or in any manner
engage in, any business engaged in the manufacture or sale of frozen or canned
vegetable products (other than vegetable dips, snack dips, guacamole dips,
pickles or pickle-related products), within any geographical area in which, at
the Closing Date, either of the Targets engages in such business (the
"Non-Compete Businesses"); provided that nothing herein shall prohibit the
Seller and its Subsidiaries from: (i) acquiring any interest in any Person
which, directly or indirectly, engages
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in any of the Non-Compete Businesses and subsequently managing, controlling,
participating in, consulting with or rendering services for such Person or
engaging through such Person in any of the Non-Compete Businesses, so long as
(x) the sale of the products which relate to the Non-Compete Businesses on a
worldwide basis does not account for more than the lesser of (1) $50,000,000 in
sales on an annual basis and (2) 5% of the sales of such Person either
immediately before or after such acquisition or (y) if within 270 days of such
acquisition the Seller disposes of to a Person which is not an Affiliate of the
Seller, or enters into a definitive agreement with a Person which is not an
Affiliate of the Seller to dispose of, that portion of the acquired business
that engages in the Non-Compete Businesses; or (ii) owning less than 20% of the
equity securities or other interest in any Person, provided such ownership is
passive other than the exercise of shareholder rights. If, at the time of
enforcement of this Section, a court holds that the restrictions stated herein
are unreasonable under circumstances then existing, the Buyer and the Seller
agree that the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area. The
Parties agree that money damages would not be an adequate remedy for any breach
of this Section. Therefore, in the event of a breach or threatened breach of
this Section, the Buyer or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce, or prevent any violation of, the provisions hereof (without posting
a bond or other security). Seller agrees that the restrictions contained in this
Section are reasonable.
(h) Post-Closing License of Seller's Dean Trademark. Subject to the
terms and conditions of this Section, the Seller grants to the Buyer and the
Targets, for a period of up to 2 years from the Closing Date, the right to use
the Targets' Dean-Related Packaging/Labels on frozen or canned vegetable
products sold by the Targets subsequent to the Closing in accordance with the
past custom and practice of the Targets. The Buyer shall cause any such product
on which any of the Targets' Dean-Related Packaging/Labels is used to be of a
character and quality substantially equivalent to the character and quality of
such product manufactured and sold, or caused to be manufactured and sold, by
the Targets before the Closing Date. The Buyer shall cause the Targets to not
use any other mark, name, style or design in association with any of the
Targets' Dean-Related Packaging/Labels or to in any way alter or modify any of
the Targets' Dean-Related Packaging/Labels (including without limitation any
Seller's Dean Trademark thereon) without the prior written consent of the
Seller. The Buyer shall cause the Targets to destroy and not use any damaged or
imperfect Targets' Dean-Related Packaging/Labels. From time to time upon
reasonable notice, the Seller shall have the right, at its expense, to conduct
inspections during normal business hours of the manufacturing operations of the
Targets to ensure that the Targets are complying with the foregoing obligations.
(i) Settlement of Seller Group Payments. The Seller shall
periodically pay over to the Buyer all payments received by the Seller or any of
its Subsidiaries subsequent to the Closing Date which relate to the receivables
of either of the Targets, net of any deductions taken against the
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47
receivables of the Seller or any of its Affiliates attributable to either of the
Targets. The amounts of such payments and related deductions attributable to the
Targets shall be as specified by the party making the payment; provided that the
amount of any such payments and deductions not specified by the party making the
payment as relating to either of the Targets shall be determined by the Seller
in good faith subject to the reasonable approval of the Buyer.
(j) Release of IRB Guarantee. Not later than the first anniversary
of the Closing Date, the Buyer shall either (i) cause the Seller to be fully and
forever released in a writing satisfactory to the Seller from all obligations
under the IRB Guarantee or (ii) fully satisfy and discharge all indebtedness to
which the IRB Guarantee relates and provide the Seller with evidence thereof
satisfactory to the Seller.
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties of the Seller set forth
in Section 3 shall be true and correct in all material respects at and
as of the Closing Date as if made at and as of the Closing Date, except
for the effects of actions contemplated herein or permitted hereunder;
(ii) if the All Cash Alternative has not become applicable, the
representations and warranties of the Seller set forth in Section 4 of
the Asset Transfer Agreement shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of the
Closing Date, except for the effects of actions contemplated herein or
permitted hereunder or contemplated in or permitted under the Asset
Transfer Agreement;
(iii) the Seller shall have performed and complied in all
material respects with all of its covenants hereunder (and under the
Asset Transfer Agreement unless the All Cash Alternative has become
applicable) that are to be performed or complied with prior to the
Closing;
(iv) no action, suit or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling or charge would
(A) prevent consummation of any of the transactions contemplated by
this Agreement (excluding the transfer of the Aseptic Business to the
Seller if the All Cash Alternative has become applicable), (B) cause
any of the transactions contemplated by this Agreement (excluding the
transfer of the
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Aseptic Business to the Seller if the All Cash Alternative has
become applicable) to be rescinded following consummation, (C) affect
materially and adversely the right of the Buyer to own the capital
stock of DFVC and Holding Company and to control Holding Company and
the Targets, (D) affect materially and adversely the right of Holding
Company or DFVC to own the capital stock of Birds Eye Mexico owned by
it or (E) affect materially and adversely the right of the Targets
(taken as a whole) to own their assets and to operate their businesses
(and no such injunction, judgment, order, decree, ruling or charge
shall be in effect);
(v) the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above in Section
7(a)(i)-(iv) is satisfied;
(vi) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act with respect to the
transactions contemplated by this Agreement (excluding the transfer of
the Aseptic Business to the Seller if the All Cash Alternative has
become applicable) shall have expired or otherwise been terminated and
the Parties, Dean International and the Targets shall have received
all other material authorizations, consents, and approvals of
governments and governmental agencies referred to in Sections
3(a)(iii), 3(b)(iii) and 4(c) and in the sections of the Seller
Disclosure Schedule and Buyer Disclosure Schedule corresponding
thereto;
(vii) the Buyer shall have received from the Seller intellectual
property transfer documents in recordable form with respect to the
transfer of the Seller's Target-Related Intellectual Property;
(viii) the Buyer shall have received from the Seller a duly
executed assignment document with respect to the Existing Birds Eye
License Agreement;
(ix) the Buyer shall have received from the General Counsel of
the Seller an opinion as to the respective matters set forth in Exhibit
D attached hereto, based on customary reliance and subject to customary
qualifications and, insofar as such opinion relates to matters of
Wisconsin law, subject to the assumption that Wisconsin law does not
differ from Illinois law to any extent material to such opinion,
addressed to the Buyer, and dated as of the Closing Date;
(x) the Buyer shall have received from special counsel to
Birds Eye Mexico an opinion as to the respective matters set forth in
Exhibit E attached hereto, based on customary reliance and subject to
customary qualifications, addressed to the Buyer, and dated as of the
Closing Date;
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(xi) the Buyer shall have received from each person who is,
immediately prior to the Closing, a director or officer of Holding
Company or either of the Targets and who has been identified to the
Seller by the Buyer in writing at least 20 days prior to the Closing as
being subject to this condition, his written resignation, effective as
of the Closing, from each position as a director or officer of each of
the Targets; and
(xii) all actions to be taken by the Seller, Dean International,
Holding Company and the Targets in connection with consummation of the
transactions contemplated hereby and all certificates, opinions,
instruments and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory to the Buyer.
The Buyer may waive any condition specified in this Section 7(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties of the Buyer set forth
in Section 4 shall be true and correct in all material respects at and
as of the Closing Date as if made at and as of the Closing Date,
except for the effects of actions contemplated herein or permitted
hereunder;
(ii) if the All Cash Alternative has not become applicable, the
representations and warranties of the Buyer set forth in Section 3 of
the Asset Transfer Agreement shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of the
Closing Date, except for the effects of actions contemplated herein or
permitted hereunder or contemplated in or permitted under the Asset
Transfer Agreement;
(iii) the Buyer shall have performed and complied in all
material respects with all of its covenants hereunder (and under the
Asset Transfer Agreement unless the All Cash Alternative has become
applicable) that are to be performed or complied with prior to the
Closing;
(iv) no action, suit or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling or charge would
(A) prevent consummation of any of the transactions contemplated by
this Agreement (excluding the transfer of the Aseptic
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50
Business to the Seller if the All Cash Alternative has become
applicable), (B) cause any of the transactions contemplated by this
Agreement (excluding the transfer of the Aseptic Business to the
Seller if the All Cash Alternative has become applicable) to be
rescinded following consummation or (C) unless the All Cash
Alternative has become applicable, affect materially and adversely the
right of the Seller to own and control the Aseptic Business and to
operate its businesses (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(v) the Buyer shall have delivered to the Seller a certificate
to the effect that each of the conditions specified above in Section
7(b)(i)-(iv) is satisfied;
(vi) the Seller shall have procured all third party
authorizations, consents and approvals required under its credit
facilities identified in the section of the Seller Disclosure Schedule
corresponding to Section 3(a)(iii);
(vii) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act with respect to the
transactions contemplated by this Agreement (excluding the transfer of
the Aseptic Business to the Seller if the All Cash Alternative has
become applicable) shall have expired or otherwise been terminated and
the Parties, Dean International and the Targets shall have received all
other material authorizations, consents, and approvals of governments
and governmental agencies referred to in Sections 3(a)(iii), 3(b)(iii)
and 4(c) and in the sections of the Seller Disclosure Schedule and
Buyer Disclosure Schedule corresponding thereto;
(viii) the Seller and the transferee of its rights in and to the
Birds Eye Dips Trademark shall have entered into the Closing Date Birds
Eye License Agreement;
(ix) the Seller shall have received from the transferee of
Seller's rights as licensor under the Existing Birds Eye License
Agreement a duly executed assumption document with respect to such
License Agreement (and, if applicable, the related guarantee
contemplated in Section 2(c));
(x) the Seller shall have received from special counsel to
the Buyer an opinion as to the respective matters set forth in Exhibit
F attached hereto, based on customary reliance and subject to
customary qualifications, addressed to the Seller, and dated as of the
Closing Date; and
(xi) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and
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51
other documents required to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to the
Seller.
The Seller may waive any condition specified in this Section 7(b) if it executes
a writing so stating at or prior to the Closing.
8. Indemnification.
(a) General. From and after the Closing, the Parties shall be
indemnified as provided in this Section 8. For the purposes of this Section 8,
each Party shall be deemed to have remade all of its representations and
warranties contained in this Agreement at the Closing with the same effect as if
originally made at the Closing; provided that for purposes thereof the Seller
Disclosure Schedule shall be deemed amended to reflect any changes therein
furnished to the Buyer by the Seller in writing in connection with the Closing
that are contemplated herein or permitted herein.
(b) Indemnification of Buyer Indemnitees. The Seller shall
indemnify, save and keep the Buyer and its successors and permitted assigns, and
their respective directors, officers, employees and agents, and the heirs,
executors and personal representatives of each of the foregoing (each a "Buyer
Indemnitee" and collectively the "Buyer Indemnitees"), harmless against and from
all Damages sustained or incurred by any Buyer Indemnitee as a result of or
arising out of:
(i) any inaccuracy in or breach of any representation
and warranty made by the Seller to the Buyer herein or in any other
document executed in connection with the Closing;
(ii) any breach by the Seller of, or failure of the
Seller to comply with, any of the covenants or obligations under
this Agreement to be performed by the Seller (including, without
limitation, the obligations of the Seller under this Section 8);
(iii) any Control Group Liability of the Seller or any
of its Affiliates arising out of events occurring or circumstances
existing prior to the Closing Date which is not directly attributable
to Holding Company or either of the Targets;
(iv) any judgment rendered in, or settlement approved by
the Seller of, the Silage-Related Litigation;
(v) any Income Taxes of Holding Company or the Targets
for which the Seller is responsible under Section 9(a); or
(vi) the Seller's failure to satisfy its obligations
under any Seller Plan.
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52
(c) Indemnification of Seller Indemnitees. The Buyer shall
indemnify, save and keep the Seller and Dean International and their respective
successors and permitted assigns, and their respective directors, officers,
employees and agents, and the heirs, executors and personal representatives of
each of the foregoing (each a "Seller Indemnitee" and collectively the "Seller
Indemnitees"), harmless against and from all Damages sustained or incurred by
any Seller Indemnitee as a result of or arising out of:
(i) any inaccuracy in or breach of any representation and
warranty made by the Buyer to the Seller herein or in any other
document executed in connection with the Closing;
(ii) any breach by the Buyer, or failure of the Buyer to comply
with, any of the covenants or obligations under this Agreement to be
performed by the Buyer (including, without limitation, the obligations
of the Buyer under this Section 8);
(iii) the operations, acts, omissions or status of Holding
Company or either of the Targets, except to the extent the Seller is
required to provide indemnification under Section 8(b) with respect to
any Damages as a result of or arising out of events occurring or
circumstances existing prior to the Closing Date; or
(iv) the IRB Guarantee.
(d) Limitation on Indemnification Obligations.
(i) All representations and warranties of the Seller and the
Buyer contained in this Agreement, other than any intentional
misrepresentation (which shall not be subject to any survival period),
the representations and warranties of the Seller in Sections 3(b)(ix)
and 3(a)(vii) and any representation and warranty of the Buyer pursuant
to Section 6(b), shall survive the Closing and continue in full force
and effect for a period of 18 months thereafter. Each of the
representations and warranties of the Seller contained in Section
3(b)(ix) and any representation and warranty of the Buyer pursuant to
Section 6(b) shall survive the Closing and continue in full force and
effect until thirty days after the expiration of the statute of
limitations applicable to the subject thereof. Each of the
representations and warranties of the Seller contained in Section
3(a)(vii) shall survive the Closing and continue in full force and
effect thereafter. A claim by a Buyer Indemnitee or a Seller
Indemnitee for indemnification under Section 8(b)(i) or 8(c)(i),
respectively, shall be ineffective unless such Person delivers a
written claim for indemnification within the survival period specified
in this Section 8(d)(i) as applicable to the representation or
warranty that is the subject of such claim.
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(ii) Notwithstanding anything to the contrary contained herein,
(A) the Buyer Indemnitees shall only be entitled to indemnification
pursuant to Section 8(b)(i) once the aggregate amount otherwise payable
to the Buyer Indemnitees pursuant to such Section exceeds an amount
equal to $5,000,000 (the "Threshold Amount"), and after such aggregate
amount exceeds such dollar amount the Buyer Indemnitees shall be
entitled to seek indemnification only for indemnification claims above
the Threshold Amount, and (B) the indemnification to which the Buyer
Indemnitees are entitled pursuant to Section 8(b)(i) shall be subject
to an aggregate ceiling equal to $125,000,000; provided that such
Threshold Amount and such ceiling shall not apply to any breaches of
representation and warranties contained in Sections 3(b)(ix) or
3(a)(vii) or to any intentional misrepresentation.
(e) Cooperation. Subject to the provisions of Section 8(f), the
Indemnifying Party shall have the right, at the Indemnifying Party's own
expense, to participate in the defense of any Third Party Claim, and if said
right is exercised, the Indemnifying Party and the Indemnified Party shall
cooperate in the investigation and defense of said Third Party Claim.
(f) Third Party Claims Subject to Indemnification.
(i) Promptly following the receipt of notice of a Third Party
Claim for which it may seek indemnification hereunder, the party
receiving the notice of the Third Party Claim shall notify the
Indemnifying Party of such Third Party Claim. The failure to give such
notice shall not relieve the Indemnifying Party of its obligations
under this Agreement except to the extent that the Indemnifying Party
is prejudiced as a result of the failure to give such notice. Within 15
business days after receipt of the notice by the Indemnifying Party
pursuant to the preceding sentence, the Indemnifying Party shall notify
the Indemnified Party whether it elects to undertake the defense of the
Third Party Claim. If the Indemnifying Party elects to undertake the
defense of such Third Party Claim, it shall do so at its own expense
with counsel of its own choosing and it shall acknowledge in writing
its indemnification obligations as provided in this Agreement to the
Indemnified Party as to such Third Party Claim. If the Indemnifying
Party elects not to defend such Third Party Claim or fails to pursue
the defense of such Third Party Claim diligently, the Indemnified Party
shall have the right to undertake the defense of such Third Party Claim
through counsel of its own choosing. The Party that defends the Third
Party Claim shall keep the other Party fully advised of the progress
and disposition of such claim.
(ii) In the event the Indemnifying Party elects not to
undertake the defense of a Third Party Claim or fails to pursue
diligently the defense of such claim and the
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Indemnified Party litigates or otherwise contests or settles the Third
Party Claim, then, provided that and to the extent that a final
determination has been made that the Indemnified Party is entitled to
indemnification therefor hereunder, the Indemnifying Party shall
promptly reimburse the Indemnified Party for amounts paid to litigate
or otherwise contest or settle such claim and all amounts paid in
satisfaction of a judgment against the Indemnified Party in contesting
such claim and in providing its right to indemnification hereunder,
all in accordance with the provisions of this Section 8.
(iii) No Third Party Claim will be settled by the Indemnifying
Party or the Indemnified Party without the consent of the other, which
consent will not be unreasonably withheld or delayed; provided,
however, that if such claim asserts that the Indemnifying Party is
jointly and severally liable and the Indemnified Party shall be fully
released from all liability relating to such Third Party Claim in
connection with such settlement, the Indemnifying Party shall not be
required to obtain the consent of the Indemnified Party. If, however,
the Indemnified Party refuses to consent to a bona fide offered
settlement which the Indemnifying Party wishes to accept, the
Indemnified Party shall be required to continue to defend such Third
Party Claim free of any participation by the Indemnifying Party, at the
sole expense of the Indemnified Party. In such event, the Indemnifying
Party shall pay to the Indemnified Party the amount of the offer of
settlement which the Indemnified Party refused to accept, plus the
costs and expenses incurred by the Indemnified Party prior to the date
the Indemnifying Party notifies the Indemnified Party of the offer of
settlement for which the Indemnified Party is entitled to
indemnification, all in accordance with the terms of this Section 8,
and, upon the payment or receipt of such amount, as the case may be,
the Indemnifying Party shall have no further liability with respect to
such Third Party Claim. The Indemnifying Party shall be entitled to
recover from the Indemnified Party any additional expenses incurred by
the Indemnifying Party as a result of the decision of the Indemnified
Party to pursue the matter.
(iv) In lieu of the provisions set forth above, the following
provisions shall apply with respect to the Silage-Related Litigation.
The Seller shall assume and control the defense of the Silage-Related
Litigation with counsel of its own choice. The Seller shall have the
exclusive right to settle any such Litigation. The Buyer and DFVC shall
have no right to participate in the defense of the Silage-Related
Litigation or in connection with any settlement discussions related
thereto or to make any decision or determination in connection
therewith. However, the Buyer will, and will cause DFVC to, cooperate
with the Seller and its counsel in the contest or defense of such
Litigation, including making available their personnel and providing
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such testimony and access to their books and records as shall be
reasonably requested by the Seller, at the sole cost and expense of
the Seller.
(g) Exclusivity.
(i) Except to the extent such limitation is prohibited by law
and such prohibition is not waivable by the Buyer Indemnitees, the
indemnification provisions of this Section 8 shall constitute the
exclusive remedy of the Buyer Indemnitees in connection with this
Agreement or the transactions contemplated herein, including without
limitation for any of the matters described in Sections 8(b). To the
maximum extent permitted by law, each of the Buyer Indemnitees waives
the benefit of any such prohibition.
(ii) Except to the extent such limitation is prohibited by law
and such prohibition is not waivable by the Seller Indemnitees, the
indemnification provisions of this Section 8 shall constitute the
exclusive remedy of the Seller Indemnitees in connection with this
Agreement or the transactions contemplated herein, including without
limitation for any of the matters described in Sections 8(c). To the
maximum extent permitted by law, each of the Seller Indemnitees waives
the benefit of any such prohibition.
9. Tax Matters.
(a) Preparation and Filing of Income Tax Returns.
(i) The Seller will include the income of DFVC (including any
deferred income triggered into income by Reg. Section 1.1502-13 and any
excess loss accounts taken into income under Reg. Section 1.1502-19) on
the Seller's federal consolidated or applicable consolidated or
combined state or local Income Tax return (collectively, "Consolidated
Income Tax Returns") for all periods through the Closing Date and pay
any Income Taxes attributable to such income. For purposes of preparing
all such Consolidated Income Tax Returns, the income of DFVC will be
apportioned to the period up to and including the Closing Date and the
period after the Closing Date by closing the books of DFVC as of the
end of the day on which the Closing occurs.
(ii) The Seller shall prepare or cause to be prepared and file
or cause to be filed all Income Tax returns (other than Consolidated
Income Tax Returns) for the Targets for all periods ending on or prior
to the Closing Date which are filed after the Closing Date and shall
pay all Income Taxes attributable to the taxable income reported on
such Income Tax returns. All such Income Tax returns shall be prepared
and filed in a manner consistent with past practice of the Seller.
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(iii) The Buyer shall prepare or cause to be prepared and file
or cause to be filed any Income Tax returns (other than Consolidated
Income Tax Returns) of the Targets for Tax periods which begin before
the Closing Date and end after the Closing Date. The Buyer shall submit
each such Income Tax return to the Seller for the Seller's review and
approval at least 20 days prior to the due date for filing such Income
Tax return. The Seller shall pay to the Buyer within 10 days after the
date on which Taxes are paid with respect to such periods an amount
equal to the portion of such Taxes which relates to the portion of such
Tax period ending at the end of the day on which the Closing occurs.
(iv) Notwithstanding the foregoing, the Seller shall have no
obligation to pay any Income Taxes of either Target that are
attributable to any transaction not in the ordinary course of business
occurring subsequent to the Closing Date. For purposes of this Section
9(a), the income of the Targets will be apportioned to the period up to
and including the end of the day on which the Closing occurs and the
period thereafter by closing the books of the Targets as of the end of
such day. Any credits relating to a Tax period that begins before and
ends after the end of the day on which the Closing occurs shall be
taken into account as though the relevant Tax period ended at the end
of such day. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with the
prior practice of the respective Target.
(b) Income Tax Refunds and Benefits. Any Income Tax refunds that are
received by the Buyer or either of the Targets, and any amounts credited against
Income Tax to which the Buyer or either of the Targets becomes entitled, that
relate to Tax periods or portions thereof ending on or before the end of the day
on which the Closing occurs shall be for the account of the Seller, and the
Buyer shall pay over to the Seller any such refund or the amount of any such
credit within 10 days after receipt thereof or entitlement thereto. The Buyer
will, and will cause the Targets to, cooperate with the Seller in obtaining such
refunds (or reduction in Income Tax liability), including through the filing of
amended Income Tax returns or refund claims. The Seller agrees to reimburse the
Buyer and the Targets for any Income Taxes resulting from the disallowance of
such Income Tax refund or credit on audit or otherwise.
(c) Cooperation on Tax Matters. The Buyer and the Seller shall, and
the Buyer shall cause the Targets to, cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing of all
Tax returns pursuant to this Section 9 and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include (i) the
retention and (upon the other party's request) provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding, (ii) making available, on a mutually convenient basis, personnel
(including officers, directors, employees and agents) to provide
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additional information and explanation of any material provided hereunder and
(iii) making available, on a mutually convenient basis, personnel reasonably
required as witnesses or for purposes of providing information or documents in
connection with any administrative or judicial proceeding relating to taxes. The
Buyer and the Seller agree, and the Buyer agrees to cause the Targets, (i) to
retain all books and records (including Income Tax Returns and work papers) with
respect to Tax matters pertinent to the Targets relating to any Tax period
beginning before the Closing Date until the expiration of the statute of
limitations (and, to the extent notified by the Buyer or the Seller, any
extensions thereof) for the respective Tax periods, and to abide by all record
retention agreements entered into with any taxing authority, and (ii) to give
the other party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other party so requests, to
allow the other party to take possession of such books and records. The Buyer
and the Seller further agree, upon request, to provide the other party with all
information that either party may be required to report pursuant to Section 6043
of the Code and all Treasury Department Regulations promulgated thereunder.
(d) Control Rights. The party responsible under this Agreement for
filing the relevant Income Tax Return shall control any audits by, disputes
with, and administrative, judicial or other proceedings by or against taxing
authorities related thereto. Subject to the preceding sentence, in the event an
adverse determination may result in each party having responsibility for any
amount of Income Taxes under this Agreement, each party shall be entitled to
fully participate in that portion of the proceedings relating to the Income
Taxes with respect to which it may incur liability hereunder. For purposes of
this Section 9(d), the term "participation" shall include (i) participation in
conferences, meetings or proceedings with any tax authority, the subject matter
of which includes an item for which such party may have liability hereunder,
(ii) participation in appearances before any court or tribunal, the subject
matter of which includes an item for which a party may have liability hereunder
and (iii) with respect to the matters described in clauses (i) and (ii),
participation in the submission and determination of the content of the
documentation, protests, memoranda of fact and law, briefs and the conduct of
oral arguments and presentations.
(e) Expenses. The Buyer and the Seller shall bear their own expenses
incurred in connection with audits and other administrative or judicial
proceedings relating to Income Taxes for which such party and its Affiliates are
liable under this Agreement.
(f) Post-Closing Transactions not in the Ordinary Course. The Buyer
and the Seller agree to report all transactions not in the ordinary course of
business occurring after the day on which the Closing occurs on Buyer's federal
income tax return to the extent permitted by Reg. ss.1.1502-76(b)(1)(B). The
Buyer agrees to indemnify the Seller and its Affiliates for any additional
Income Tax owed by the Seller (including Income Tax owed by the Seller due to
this indemnification payment) resulting from any transaction described in the
preceding sentence.
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(g) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (including any New York
State Gains Tax, New York City Transfer Tax and any similar tax imposed in other
states or subdivisions), shall be paid by the Buyer when due, and the Buyer
will, at its own expense, file all necessary Tax returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp, registration
and other Taxes and fees, and, if required by applicable law, the Seller will,
and will cause its Affiliates to, join in the execution of any such Tax returns
and other documentation.
10. Termination.
(a) Termination of Agreement. Either or both of the Parties may
terminate this Agreement with the prior authorization of its or their board(s)
of directors as provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing: (A) in the event
the Seller has breached its representations, warranties, covenants or
agreements contained in this Agreement, in any respect material to the
transactions contemplated by this Agreement, the Buyer has notified the
Seller of the breach, and the breach has continued without cure for a
period of 30 days after such notice; (B) if the Closing shall not have
occurred on or before October 15, 1998 by reason of the failure of any
condition precedent under Section 7(a) (unless the failure results
primarily from the Buyer breaching any representation, warranty,
covenant or agreement contained in this Agreement or, unless the All
Cash Alternative has become applicable, in the Asset Transfer
Agreement); or (C) a court of competent jurisdiction or a governmental
regulatory or administrative agency or commission shall have issued an
order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement (excluding the transfer of the Aseptic
Business to the Seller if the All Cash Alternative has become
applicable) and such order, decree, ruling or other action shall have
become final and non-appealable; and
(iii) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing: (A) in the event
the Buyer has breached its representations, warranties, covenants or
agreements contained in this Agreement or, unless the All Cash
Alternative has become applicable, in the Asset Transfer Agreement in
any respect material to the transactions contemplated by this
Agreement, the Seller has notified the Buyer of the breach, and the
breach has
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continued without cure for a period of 30 days after such notice; (B)
if the Closing shall not have occurred on or before October 15, 1998
by reason of the failure of any condition precedent under Section 7(b)
(unless the failure results primarily from the Seller breaching any
representation, warranty or covenant contained in this Agreement or,
unless the All Cash Alternative has become applicable, in the Asset
Transfer Agreement); or (C) a court of competent jurisdiction or a
governmental regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement (excluding the transfer of
the Aseptic Business to the Seller if the All Cash Alternative has
become applicable) and such order, decree, ruling or other action
shall have become final and non-appealable.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 10(a), all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party (except
for any liability of any Party then in breach and except for rights and
obligations under the Confidentiality Agreement, which shall survive any such
termination).
11. Miscellaneous.
(a) Press Releases and Public Announcements. Neither Party (nor any
of its Affiliates) shall issue any press release or make any public announcement
or disclosure relating to the subject matter of this Agreement without the prior
written approval of the other Party, which approval shall not be unreasonably
withheld or delayed, unless such disclosure is required by applicable law or
governmental regulation or by order of a court of competent jurisdiction (in
which case prior to making such disclosure the Party which proposes to make such
disclosure shall give written notice to the other Party, describing in
reasonable detail the proposed content of such disclosure, and shall permit the
other Party to review and comment upon the form and substance of such
disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns; provided, however, that the
provisions of Section 8 concerning indemnification are intended for the benefit
of the Indemnified Parties and their respective heirs, executors, personal
representatives, successors and assigns.
(c) Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the Party incurring such expenses; provided that (i) the Buyer shall promptly
pay all out-of-pocket expenses incurred by the Seller or any of its
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Subsidiaries in connection with any assistance or cooperation requested by the
Buyer pursuant to the second sentence of Section 6(a) and (ii) the Seller shall
promptly pay all out-of-pocket expenses incurred by the Buyer or any of its
Subsidiaries in connection with any assistance or cooperation requested by the
Buyer pursuant to the second sentence of Section 6(a).
(d) Entire Agreement. This Agreement, the Asset Transfer Agreement
and the Confidentiality Agreement constitute the entire agreement between the
Parties and supersede any prior understandings, agreements or representations by
or between the Parties, written or oral, to the extent they related in any way
to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other Party.
(f) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but which together shall constitute
one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be sent by registered or certified mail,
return receipt requested, postage prepaid and addressed to the intended
recipient as set forth below:
If to the Seller:
Dean Foods Company
3600 N. River Road
Franklin Park, IL 60131-2185
Attention: President
With a copy (which shall not constitute notice to the Seller)
to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, IL 60601
Attention: Brian D. Hogan, Esq.
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If to the Buyer:
Agrilink Foods, Inc.
90 Linden Place
Rochester, NY 14625
Attn: Dennis M. Mullen, Chief Executive Officer
With a copy (which shall not constitute notice to the
Buyer) to:
Harris Beach & Wilcox, LLP
130 East Main Street
Rochester, NY 14604
Attn: David M. Mehalick, Esq.
or by any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail or electronic mail). No such notice,
request, demand, claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims and
other communications to it hereunder are to be delivered by giving the other
Party notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Illinois without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois.
(j) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Closing with the prior
authorization of their respective boards of directors. No amendment of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by the Parties. No waiver by any Party of any default, misrepre
sentation or breach of warranty or covenant hereunder shall, unless expressly so
provided therein, be deemed to extend to any prior or subsequent default,
misrepresentation or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
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(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean "including, without limitation." As used in this
Agreement (including any amendments hereto), the masculine, feminine or neuter
gender and the singular or plural number shall be deemed to include the others
whenever the context so requires. For purposes of this Agreement, the Targets
shall be deemed to be Affiliates of the Seller prior to the Closing Date and
Affiliates of the Buyer after the Closing Date.
(m) Incorporation of Exhibits and Disclosure Schedules. The Exhibits
identified in this Agreement, the Seller Disclosure Schedule and the Buyer
Disclosure Schedule are incorporated herein by reference and made a part hereof.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
AGRILINK FOODS, INC.
By: __________________________________
Title: _______________________________
DEAN FOODS COMPANY
By: __________________________________
Title: _______________________________
64
EXHIBIT A
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (including Schedule A hereto, this "Agreement") is
made on [_____________], 1998, by and between Agrilink Foods, Inc., a New York
corporation ("Licensor"), and Dean Foods Company, a Delaware corporation
("Licensee"). Certain capitalized terms used herein are defined in Section 1.
Recitals:
Pursuant to the Stock Purchase Agreement, dated July 24, 1998, by and
between Licensee and Licensor (the "Stock Purchase Agreement"), Licensee is
transferring to Licensor all of Licensee's right, title and interest in the
trademark set forth on Schedule A attached hereto (the "Trademark").
Licensee is engaged in the vegetable dip, snack dip and guacamole dip
business (the "Continuing Business") and utilizes the Trademark in connection
therewith.
As provided in the Stock Purchase Agreement, Licensee is transferring the
Trademark to Licensor subject to a royalty-free three-year license back to
Licensee of the Trademark for use in the Continuing Business.
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which the parties acknowledge, the parties agree as follows:
1. Definitions
In this Agreement, the following terms shall have the following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Confidential Information" means and includes all information relating to
Dip Products, together with all information concerning any party's business
activities, processes, technology, know-how of every kind, customers, suppliers,
contracts, finances, personnel, research, plans, policies and intentions,
including matters which, though technically not confidential or trade secrets,
might prove prejudicial to the relevant party if disclosed to others.
Confidential Information shall not include information which (a) is or becomes
publicly known otherwise than by a breach of this or any other agreement, (b) is
already known to the disclosing party prior to disclosure by the party
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claiming the information was Confidential Information, (c) is disclosed to the
disclosing party by a third party who has a legal right to make the disclosure
or (d) is required to be disclosed to the public by applicable law. The parties
acknowledge that any party shall be permitted to disclose Confidential
Information required to be disclosed by law to certain governmental authorities
and, in such circumstances, the disclosing party shall take all reasonable steps
to protect the confidentiality of such Confidential Information.
"Dean Logo" means the bird-on-mailbox logo of Licensee, U.S. Reg. Nos.
1,519,979 and 1,342,947.
"Dip Product" means a vegetable dip, snack dip or guacamole dip product
which is presently or hereafter manufactured, distributed or sold by Licensee or
any of its Affiliates.
"Permitted Use" means use of the Trademark in association with the sale of
a Dip Product.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity (or any
department, agency or political subdivision thereof).
"Promotional and Advertising Material" means labels, packages, advertising
brochures, catalogues and other written or graphic material, all media
advertising including television, radio, newspaper and other media advertising
and all other materials upon which the Trademark is placed.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Term" means a term commencing as of the date hereof and ending upon the
third anniversary of the date of this Agreement.
"Territory" means anywhere in the United States or Canada.
2. Grant of Rights
2.1. Subject to the terms and conditions of this Agreement, Licensor
grants to Licensee an exclusive right (including without limitation as against
Licensor) to use the Trademark for any Permitted Use in the Territory during the
Term.
2.2. Licensor shall maintain at its expense the registration of the
Trademark currently in effect as described on Schedule A attached hereto.
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3. No Royalty
3.1. Licensee will have the right to use the Trademark for any Permitted
Use during the Term of this Agreement on a royalty-free basis. Licensee shall
have no obligation to use the Trademark or to sell or attempt to sell any Dip
Products in association with the Trademark.
4. Rights of Ownership
4.1. Licensee acknowledges that:
(a) the Trademark is the exclusive property of Licensor;
(b) nothing in this Agreement gives Licensee any right,
title or interest in or to the Trademark by itself or in
combination with any other words, except in accordance with
this Agreement; and
(c) all use and any goodwill generated through the use of the
Trademark shall enure exclusively to the benefit of
Licensor.
5. Standards
5.1. Dip Products manufactured and sold, or caused to be sold, by
Licensee in association with the Trademark shall be of a character or quality
substantially equivalent to the respective standards, specifications and
operating procedures relating to Dip Products manufactured and sold, or caused
to be sold, by Licensee before the date of this Agreement.
5.2. Licensee shall use the Trademark only for a Permitted Use.
5.3. Licensee shall not use any other mark, name, style or design (other
than the Dean Logo on the back panel of product packaging) in association with
the Trademark without the written consent of Licensor, which consent shall not
be unreasonably withheld. Licensee shall not add to or modify the Trademark
without the prior written consent of Licensor.
5.4. Licensee shall not register or attempt to register the Trademark or
any other mark, name, style or design which is confusingly similar to the
Trademark, but shall fully cooperate with Licensor by providing any and all
information and materials and executing whatsoever documents as may be
reasonably necessary to facilitate the registration, renewal or maintenance of
the Trademark or the enforcement of the Trademark against infringement, as may
be requested by Licensor at the expense of Licensor; and Licensee shall have no
obligation to maintain the Trademark other than providing such information and
materials and executing such documents.
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6. Right to Inspect
6.1. Licensee shall maintain a vigorous quality control and safety
assurance program with respect to Dip Products. From time to time during the
Term and upon reasonable notice, Licensor shall have the right to appoint at its
expense an independent quality inspector or other representative or professional
to conduct inspections during normal business hours of the manufacturing
operations of Licensee for Dip Products on which Licensee uses the Trademark and
to ensure that Licensee is complying with its obligations under this Agreement.
In addition, from time to time during the Term, Licensor shall have the right to
request and receive samples of Licensee's Promotional and Advertising Material
for Dip Products, and to approve of any material changes therein or thereof from
the versions used by the Seller prior to the Closing Date, which approval shall
not be unreasonably withheld or delayed. Licensor shall cause any inspector or
other representative or professional appointed pursuant to this Section to
execute a confidentiality agreement in favor of Licensee, the form of such
confidentiality agreement to be acceptable to Licensee in its reasonable
judgment.
7. Infringement
7.1. Licensee shall promptly notify Licensor of any conflicting use or
any act of infringement, passing-off or unfair competition involving the
Trademark or any marks which may be confusingly similar to the Trademark which
come to Licensee's attention.
7.2. Licensor, at its own expense, shall have the exclusive right to
institute, defend and settle any litigation or proceedings involving the
Trademark. At Licensor's expense, Licensee shall cooperate with Licensor and
shall supply such information and do such acts as are reasonably requested by
Licensor or desirable in relation to any such litigation or proceedings.
Notwithstanding the foregoing, if Licensor fails to pursue or diligently pursue
a claim or action against a third party which is infringing on the Trademark
(each of such determinations to be made in the good faith judgment of Licensee),
Licensee shall have the right to commence litigation or take any other action
against such third party, with counsel of its own choice, at the sole cost and
expense of (and with any recovery for the sole benefit of) Licensee. In such
event, Licensee shall keep Licensor fully advised of the progress and
disposition of such litigation or action. Licensor shall have no right to
participate in any such litigation or other action or in connection with any
settlement discussions related thereto or to make any decision or determination
in connection therewith. Licensor shall cooperate with Licensee and its counsel
as reasonably requested by Licensee, at the sole cost and expense of Licensee.
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8. Indemnity and Recalls
8.1. Licensee shall indemnify Licensor and its successors and assigns,
and their respective directors, officers, employees and agents, and the heirs,
executors and personal representatives of each of the foregoing (the
"Indemnified Parties") in respect of any and all claims, costs, damages, fines,
penalties, expenses and liabilities, including without limitation all economic
losses and all legal and other professional costs, which may be suffered or
incurred by any Indemnified Party, in connection with a claim, demand, action,
suit or proceeding brought by a Person and arising out of or relating to (a) the
manufacture, sale or distribution of any Dip Product bearing the Trademark, (b)
the use or distribution by Licensee or its agents of Promotional and Advertising
Material bearing the Trademark or (c) any product liability matter relating to
any Dip Product bearing the Trademark or any alleged defect or failure or
impurity in any Dip Product or its packaging bearing the Trademark including,
without limitation, all costs of any product recall in connection with any Dip
Product bearing the Trademark and any loss of property, economic loss, bodily
injury or death of any Person relating to any such Dip Product or its packaging;
provided, however, that such indemnification shall not extend to claims that the
Trademark used in accordance with this Agreement infringes the trademark or
copyright rights of third parties. Licensor shall not settle any such matter
without obtaining Licensee's prior written consent to the terms of settlement,
such consent not to be unreasonably withheld.
8.2. The need for any product recall of any Dip Product bearing the
Trademark and the manner in which such product recall shall occur shall be
determined by senior executive officers of Licensee in consultation with senior
executive officers of Licensor. Licensee shall pay the costs of all product
recalls relating to any Dip Product bearing the Trademark. Licensee shall handle
all aspects of any such product recall relating to any Dip Product bearing the
Trademark. In the event of a product recall, Licensor and Licensee shall
mutually agree upon the manner in which all consumer queries and complaints are
to be handled, and Licensee hereby agrees to expressly disclaim, in each
communication required as part of such recall, any association between such
recall and Licensor's vegetable business which uses the Trademark.
9. Termination
9.1. If one party is in material default of its obligations under this
Agreement, the other party may give notice in writing to the defaulting party
requiring the defaulting party to remedy the default within 30 days. If the
defaulting party fails to remedy the default within 30 days, the other party may
terminate this Agreement by notice in writing to the defaulting party effective
on the date of delivery of the written notice in accordance with this Agreement.
9.2. If Licensee files a petition under any federal or state bankruptcy
or insolvency law seeking reorganization, arrangement or any other relief
thereunder, or a petition is filed against Licensee under any federal or state
bankruptcy or insolvency law, or Licensee makes an assignment
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for the benefit of creditors or seeks or consents to the appointment of a
receiver, liquidator or trustee, or a receiver, liquidator or trustee is
appointed for Licensee or its property, or Licensee otherwise demonstrates an
inability to pay its debts as they become due, then this Agreement shall
terminate automatically.
9.3. This Agreement shall terminate at the end of the Term.
10. Consequences of Termination
10.1. Upon termination of this Agreement, Licensee shall:
(a) immediately cease all use of the Trademark and thereafter
shall not sell any products bearing the Trademark; and
(b) immediately cease use of the Promotional and Advertising
Material which is in Licensee's possession, power or
control.
11. Disclosure of Confidential Information
11.1. The parties agree that they shall not, directly or indirectly, at
any time either during the continuance of this Agreement or at any time
following the termination hereof, disclose or use any Confidential Information
which they acquire or learn by reason of this Agreement.
11.2. The parties acknowledge that a breach of this Section of this
Agreement by any party may cause irreparable harm and in the event of such a
breach, the nondefaulting party may seek immediate equitable and other relief
from a court of competent jurisdiction upon proof of such breach.
12. Amendments and Waivers
The parties may mutually amend any provision of this Agreement. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by the parties. No waiver by any party of any
default, misrepresentation or breach of warranty or covenant hereunder shall,
unless expressly so provided therein, be deemed to extend to any prior or subse
quent default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
occurrence.
13. Headings
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
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14. Governing Law
This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Illinois without giving effect to any choice
or conflict of law provision or rule (whether of the State of Illinois or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Illinois.
15. Notices
All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other
communication hereunder shall be sent by registered or certified mail, return
receipt requested, postage prepaid and addressed to the intended recipient as
set forth below:
If to Licensor:
Agrilink Foods, Inc.
90 Linden Place
Rochester, NY 14625
Attn: Mr. Dennis M. Mullen, Chief Executive Officer
With a copy (which shall not constitute notice to Licensor)
to:
Harris Beach & Wilcox, LLP
130 East Main Street
Rochester, NY 14604
Attn: David M. Mehalick, Esq.
If to Licensee:
Dean Foods Company
3600 N. River Road
Franklin Park, IL 60131-2185
Attention: President
With a copy (which shall not constitute notice to Licensee)
Kirkland & Ellis
200 E. Randolph Drive
Chicago, IL 60601
Attention: Brian D. Hogan, Esq.
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or by any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail or electronic mail). No such notice,
request, demand, claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims and
other communications to it hereunder are to be delivered by giving the other
party notice in the manner herein set forth.
16. Independent Contractors
The relationship between the parties is that of independent contractors.
Nothing contained in this Agreement shall be deemed to create a partnership,
association, joint venture or agency between the parties.
17. Extended Meanings
The use of the singular in this Agreement shall include the plural and vice
versa.
18. Entire Agreement
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes any prior understandings,
agreements or representations by or between the parties, written or oral, to the
extent they relate in any way to such subject matter.
19. Other Limitations
Notwithstanding anything to the contrary contained in this Agreement,
Licensor shall be excused from its obligations under Section 2 of this Agreement
to the extent that there is any infirmity in the Trademark or its registration
listed on Schedule A attached hereto as of the date of this Agreement or the use
of the Trademark by Licensee as of the date of this Agreement or thereafter
infringes the rights of any third party.
20. Severability
Any term or provision of this Agreement that is invalid or unenforceable in
any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
21. Assignment
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Either party may assign this Agreement in connection with the transfer or
sale of all or substantially all of its business to which the Trademark relates,
with the prior written consent of the other party, or the merger or
consolidation of that party with or into another entity, without the prior
written consent of the other party. In addition, Licensee may assign this
Agreement, or sublicense any of its rights under this Agreement, to any of its
Affiliates, and shall promptly thereafter notify the Licensor of any such
assignment. This Agreement shall be binding upon any permitted assignee or
successor of either party and any permitted sublicensee of Licensee. No
assignment by either party or sublicense by Licensee shall relieve the assignor
or sublicensor from its obligations hereunder.
22. Counterparts
This Agreement may be executed in counterparts, each of which shall be
deemed an original but which together shall constitute one and the same
instrument.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
AGRILINK FOODS, INC.
By ___________________________________
Title: _______________________________
DEAN FOODS COMPANY
By ___________________________________
Title: _______________________________
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SCHEDULE A
TRADEMARK
MARK REGISTRATION NO.
"BIRDS EYE" U.S. Reg. No. 1,982,485
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EXHIBIT B
Continued Employee Severance Pay and Benefits
1. Entitlement to Severance Benefits. An Employee shall be entitled
to the Benefits set forth in Section 2 below (a) upon any involuntary
termination of his or her employment with DFVC at or subsequent to the Closing
Date, unless such termination is due to his or her death or is a termination by
DFVC for Cause or Disability, or (b) upon any voluntary termination of his or
her employment with DFVC at or subsequent to the Closing Date (other than
voluntary retirement) that is for Good Reason; provided in either case that the
termination occurs, with respect to any VP Employee, within two years after the
Closing Date and, with respect to any other Employee, within one year after the
Closing Date.
2. Amount of Severance Benefits. The Benefits payable to each VP
Employee under the circumstances set forth in Section 1 shall be equal to:
(a) an amount equal to 2 times Compensation, which amount
shall be payable in cash in equal monthly installments
over the 24 month period beginning in the first month
immediately following such termination;
(b) continued DFVC-provided medical, dental and life insurance
coverage for two years after the date employment ends, on
the same basis the VP Employee received such coverage
immediately prior thereto (or, if more favorable to the VP
Employee, on the same basis the VP Employee received such
coverage immediately prior to the Closing Date); and
(c) prompt reimbursement of out-placement fees up to $10,000.
The Benefits payable to each Optionee Employee under the
circumstances set forth in Section 1 shall be equal to:
(a) an amount equal to 1 times Compensation, which amount
shall be payable in cash in equal monthly installments
over the 24 month period beginning in the first month
immediately following such termination; and
(b) continued DFVC-provided medical, dental and life insurance
coverage for one year after the date employment ends, on
the same basis the Optionee Employee received such
coverage immediately
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prior thereto (or, if more favorable to the Optionee
Employee, on the same basis the Optionee Employee received
such coverage immediately prior to the Closing Date).
The Benefits payable to each Other Employee under the circumstances set
forth in Section 1 shall be equal to:
(a) an amount equal to 1.5 times Weekly Compensation times the
number of completed years of service with DFVC (and
related companies) and its predecessors as of the date of
termination, which amount shall be payable in cash in
equal monthly installments over the 24 month period
beginning in the first month immediately following such
termination.
In addition to the foregoing, under the circumstances set forth in
Section 1, the Buyer will also cause DFVC to pay in cash to each Employee who
immediately prior to the Closing Date is a participant in the Seller's Annual
Incentive Bonus Plan an amount equal to (a) the pro rata portion (based on days
elapsed since the next preceding last Saturday in May) of the target bonus for
such Employee under any incentive bonus plan in which such Employee participates
at the time of such termination or (b) if such termination occurs on or prior to
May 29, 1999, and if such amount is greater than the amount described in (a),
the amount accrued for the Seller's 1999 fiscal year under the Seller's Annual
Incentive Bonus Plan as of the Closing Date with respect to such Employee, which
amount shall be payable promptly following May 29, 1999; provided that if the
employment of any such Employee is terminated prior to May 29, 1999 for any
reason other than by a Target for Cause, such bonus payment shall be made
immediately following such termination.
3. Voluntary Termination for Good Reason. Voluntary termination by
the Employee for Good Reason means termination due to the occurrence of one or
more of the following events:
(a) a material adverse change in the Employee's duties or job
responsibilities without the Employee's express written
consent;
(b) a reduction in the Employee's base salary or target
incentive compensation without the Employee's express
written consent;
(c) a material reduction, in the aggregate, in the kind or
level of employee benefits or fringe benefits to which the
Employee was entitled immediately prior to the Closing
Date, other than under equity purchase or equity awards
plans and provided that the substitution of a nonqualified
plan
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or arrangement for a qualified plan or arrangement in and
of itself shall not be deemed to involve a change in
benefits; or
(d) the Buyer or DFVC requiring the Employee to relocate the
Employee's office to a place more than fifty miles from
its present location, without the Employee's express
written consent.
4. Definitions.
"Cause" means with respect to an Employee (i) the Employee's
conviction of a felony or a crime involving moral turpitude; (ii) the Employee's
conviction of a fraud; (iii) the Employee's commission of any act involving
dishonesty or disloyalty with respect to DFVC (or any related entity); (iv)
intentional conduct by the Employee tending to bring DFVC (or any related
entity) into substantial public disgrace or disrepute; (v) the Employee`s gross
negligence or willful misconduct with respect to DFVC (or any related entity);
or (vi) the Employee's abandonment of employment with DFVC (or any related
entity) other than as a result of death or Disability.
"Compensation" means the Employee's base annual salary as of the
Closing Date, or as of the date of termination, if greater, plus the amount of
the targeted incentive compensation bonus that would be payable for the year in
which the termination occurs under any such incentive plan in which the Employee
participates. "Weekly Compensation" is determined by dividing Compensation by
52.
"Disability" means termination under the circumstances set forth
in the applicable disability policies in effect immediately prior to the Closing
Date.
"Employee" means each Continued Employee other than any
Continued Employee employed only on a seasonal basis and any Continued Employee
covered by a collective bargaining agreement.
"VP Employee" means each Employee who is a President or Vice
President of DFVC at any time at or after the Closing Date.
"Optionee Employee" means each Employee, other than a VP
Employee, who has received an option under the Dean Foods Company 1989 Stock
Awards Plan at any time prior to the Closing Date.
"Other Employee" means each Employee who is not a VP Employee or
an Optionee Employee.
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EXHIBIT C
CERTAIN TITLE COMMITMENT ITEMS
SEE ATTACHED.
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EXHIBIT D
Substance of Opinion of General
Counsel to the Seller *
1. Each of the Seller, Holding Company and DFVC is a corporation existing and
in good standing under the laws of the jurisdiction of its incorporation.
2. The Board of Directors of the Seller has adopted by requisite vote the
resolutions necessary to authorize the execution, delivery and performance
of this Agreement, the Asset Transfer Agreement (and the License Agreement
contemplated thereby), the Closing Date Birds Eye License Agreement and the
assignment document with respect to the Existing Birds Eye License
Agreement by the Seller. No approval of this Agreement, the Asset Transfer
Agreement (or the License Agreement contemplated thereby), the Closing Date
Birds Eye License Agreement or the assignment document with respect to the
Existing Birds Eye License Agreement by the stockholders of the Seller is
required.
3. The Board of Directors and stockholders of Dean International have adopted
by requisite vote the resolutions necessary to authorize the sale of
Holding Company Common Stock as contemplated by this Agreement.
4. The Seller has corporate power to enter into and perform its obligations
under this Agreement, the Asset Transfer Agreement (and the License
Agreement contemplated thereby), the Closing Date Birds Eye License
Agreement and the assignment document with respect to the Existing Birds
Eye License Agreement. The Seller has duly executed and delivered this
Agreement, the Asset Transfer Agreement (and the License Agreement
contemplated thereby), the Closing Date Birds Eye License Agreement and the
assignment document with respect to the Existing Birds Eye License
Agreement. Each of this Agreement, the Asset Transfer Agreement (and the
License Agreement contemplated thereby), the Closing Date Birds Eye License
Agreement and the assignment document with respect to the Existing Birds
Eye License Agreement is the valid and binding obligation of the Seller and
is enforceable against the Seller in accordance with its terms.
5. Dean International has corporate power to sell the Holding Company Common
Stock as contemplated by this Agreement.
6. The Seller owns beneficially and of record all of the outstanding stock of
DFVC. The issuance of all such stock has been duly authorized and all of
such stock has been validly issued and is fully paid and nonassessable.
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7. Dean International owns beneficially and of record all of the outstanding
stock of Holding Company. The issuance of all such stock has been duly
authorized and all of such stock has been validly issued and is fully paid
and nonassessable.
* If the License Agreement contemplated by the Asset Purchase Agreement is
to be entered into by a Subsidiary of the Seller, opinions corresponding to
those described above as appropriate shall also be given with respect to
such Subsidiaries.
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EXHIBIT E
Substance of Opinion of
Special Counsel to Birds Eye Mexico
1. Birds Eye Mexico is a limited liability company existing and in good
standing under the laws of Mexico.
2. The authorized capital stock of Birds Eye Mexico consists of (i) 1,000
shares of Birds Eye Mexico Series A Stock and (ii) 5,000 shares of Birds
Eye Mexico Series B Stock. 1,000 shares of Birds Eye Mexico Series A Stock
and 5,000 shares of Birds Eye Mexico Series B Stock are outstanding and no
shares of Birds Eye Mexico Series A Stock or Series B Stock are held in
treasury. The issuance of all such outstanding shares was duly authorized
and all of such outstanding shares have been validly issued and are fully
paid and nonassessable. All of the shares of Birds Eye Mexico Series A
Stock are held of record by Holding Company. 4,999 shares and 1 share of
Birds Eye Mexico Series B Stock are held of record by Holding Company and
DFVC, respectively.
3. The consummation of the transactions contemplated by this Agreement does
not violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which Birds Eye Mexico is
subject or any provision of the charter or bylaws (or similar governing
documents) of Birds Eye Mexico. Birds Eye Mexico does not need to obtain
any authorization, consent or approval of its directors or stockholders, or
to give any notice to, make any filing with or obtain any authorization,
consent or approval of, any government or governmental agency, in order for
the Parties to consummate the transactions contemplated by this Agreement,
other than any notice, filing, authorization, consent or approval that has
been given, made or obtained.
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EXHIBIT F
Substance of Opinion of Counsel
to the Buyer*
1. The Buyer is a corporation existing and in good standing under the laws of
the jurisdiction of its incorporation.
2. The Board of Directors of the Buyer has adopted by requisite vote the
resolutions necessary to authorize the execution, delivery and performance
of this Agreement, the Asset Transfer Agreement (and the License Agreement
contemplated thereby), the Closing Date Birds Eye License Agreement and the
assumption document with respect to the Existing Birds Eye License
Agreement by the Buyer. No approval of this Agreement, the Asset Transfer
Agreement (or the License Agreement contemplated thereby), the Closing Date
Birds Eye License Agreement or the assumption document with respect to the
Existing Birds Eye License Agreement by the stockholders of the Buyer is
required.
3. The Buyer has corporate power to enter into and perform its obligations
under this Agreement, the Asset Transfer Agreement (and the License
Agreement contemplated thereby), the Closing Date Birds Eye License
Agreement and the assumption document with respect to the Existing Birds
Eye License Agreement. The Buyer has duly executed and delivered this
Agreement, the Asset Transfer Agreement (and the License Agreement
contemplated thereby), the Closing Date Birds Eye License Agreement and the
assumption document with respect to the Existing Birds Eye License
Agreement. This Agreement, the Asset Transfer Agreement (and the License
Agreement contemplated thereby), the Closing Date Birds Eye License
Agreement and the assumption document with respect to the Existing Birds
Eye License Agreement are the valid and binding obligation of the Buyer and
are enforceable against the Buyer in accordance with their respective
terms.
* If any of the Target Shares, the Seller's Target-Related Intellectual
Property or the Existing Birds Eye License Agreement is conveyed to one or
more Subsidiaries of the Buyer rather than to the Buyer, opinions
corresponding to those described above shall also be given with respect to
the Subsidiaries which are the recipients and, if applicable, with respect
to the guarantee contemplated in Section 2(c).
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