BY AND BETWEEN
APPLE & EVE, LLC
FEBRUARY 22, 2005
TABLE OF CONTENTS
|PURCHASE AND SALE OF PURCHASED ASSETS||1|
|ARTICLE II||BASIC TRANSACTION||4|
|2.2||Purchase Price Adjustment||4|
|2.4||Allocation of Purchase Price||8|
|ARTICLE III||REPRESENTATIONS AND WARRANTIES OF THE COMPANY||9|
|3.1||Organization and Qualification||9|
|3.3||No Violation; Consents||10|
|3.4||Title to Purchased Assets; Condition of Assets||11|
|3.6||Legal Compliance; Permits||11|
|3.10||Trade Accounts Receivable||13|
|3.12||Major Customers and Suppliers||13|
|3.20||Limitations on Representations and Warranties||16|
|ARTICLE IV||REPRESENTATIONS AND WARRANTIES OF BUYER||17|
|4.1||Organization and Qualification||17|
TABLE OF CONTENTS
|ARTICLE V||FURTHER AGREEMENTS||18|
|5.3||Preservation of Books and Records||18|
|5.4||Further Actions; Filings||19|
|5.5||Employees; Employment and Benefit Arrangements||20|
|5.7||Assignment of Purchased Contracts||21|
|ARTICLE VI||[INTENTIONALLY LEFT BLANK]||22|
|ARTICLE VII||DEFINED TERMS||22|
|8.3||Provisions Regarding Indemnities||26|
|9.1||Definition of Confidential Information||28|
|9.2||Use of Confidential Information||29|
|9.4||Legal Requirement to Disclose||29|
|ARTICLE X||GENERAL PROVISIONS||30|
|10.4||Entire Agreement; Nonassignability; Parties in Interest||31|
|10.10||Governing Law; Waiver of Jury Trial||32|
|10.11||Rules of Construction||32|
|10.12||No Right of Offset||32|
|10.14||Deliveries to Buyer||32|
|10.15||No Third Party Beneficiaries||32|
|Exhibit A||– Form of Bill of Sale — Purchased Assets|
|Exhibit B||– Form of Assignment and Assumption Agreement for Assumed Liabilities|
|Exhibit C||– Form of Cranberry Concentrate Supply Agreement|
|Exhibit D||– Form of Transition Services Agreement|
|Exhibit E||– Form of Opinion of Company Counsel|
ThisASSET PURCHASE AGREEMENT (the Agreement) is made and enteredinto as of this February 22, 2005, by and between Apple & Eve, LLC, a Delaware limitedliability company (Buyer), on the one hand, and Northland Cranberries,Inc., a Wisconsin corporation (the Company) and NCI Foods, LLC, aWisconsin limited liability company (NCI), on the other hand.
WHEREAS,subject to the terms and conditions set forth herein, Buyer desires to purchase from theCompany (subject to the assumption of certain liabilities), and the Company desires tosell to Buyer (subject to the assumption of certain liabilities), certain of the assets ofthe Company for the consideration set forth herein.
NOW,THEREFORE, in consideration of the representations, warranties, covenants andagreements set forth herein, and for other good and valuable consideration, the receiptand sufficiency of which are hereby acknowledged, the parties agree as follows:
PURCHASE AND SALE OFPURCHASED ASSETS
(a) PurchasedAssets. On the terms and subject to the conditions set forth in this Agreement, Buyershall purchase from the Company, and the Company shall sell, convey, assign, transfer anddeliver to Buyer on the Closing Date, all of the Companys right, title and interestin and to the following assets, free and clear of all Liens, other than Permitted Liens(the Purchased Assets):
(i) Allinventories of raw materials (excluding inventories of fresh cranberries, frozencranberries and cranberry juice concentrate, but including dried and chocolate-coatedcranberries), work-in-process and finished goods held for sale by the Juice Division(excluding all Northland branded finished goods packaged in 64-ounce grip-bottlecontainers), together with all related labels, bottles and other bottling and packagingmaterials owned by the Company on the Closing Date and located in the facilitiesspecified in Schedule 1.1(a)(i) (the Inventory);
(ii) Allthe Companys and NCIs interest in the Trade Rights used or held for use inconnection with the business and operation of the Juice Division and set forth on Schedule1.1(a)(ii)attached hereto (the Juice Division Trade Rights),including without limitation those assignable Trade Rights assigned to Buyer pursuant tothe Trademark License Agreement, dated December 29, 1998, by and between the Company andSeneca Foods Corporation (the Seneca License Agreement) and thosetrademarks held in the name of NCI (the NCI Marks). As used herein, the termTrade Rights shall mean and include, with respect to those items listed on Schedule1.1(a)(ii): (i) trademark rights, business identifiers, trade dress, service marks,trade names, and brand names; (ii) copyrights and the underlying works of authorship;(iii) patents and all proprietary rights associated therewith; (iv) contracts oragreements granting any right, title, license or privilege under the intellectualproperty rights of any third party, to the extent assignable; and (v) all registrationsof any of the foregoing, all applications therefor and all goodwill associated with anyof the foregoing;
(iii) AllTrade Accounts Receivable of the Company related exclusively to the Juice Division;
(iv) thelist of those customers of the Juice Division set forth in Schedule 1.1(a)(iv) hereto(the Customer List) and all goodwill associated therewith;
(v) allof the Companys rights in, to and under all contracts, purchase orders and salesorders of the Company pertaining exclusively to the Juice Division, including withoutlimitation the contracts set forth in Schedule 1.1(a)(v) hereto (the PurchasedContracts);
(vi) thepersonal property set forth on Schedule 1.1(a)(vi) hereto;
(vii) allsales literature, promotional literature, catalogs and similar materials of Companyassociated exclusively with the Juice Division, including but not limited to signs,signage and product memorabilia relating to the Juice Division Trade Rights;
(viii) all transferable licenses, permits, approvals, certifications and listings of Company relating exclusively to the Juice Division; and
(ix) therecords and files of the Company relating exclusively to the aforementioned assets of theJuice Division, including, without limitation, transferring invoices, customer and vendorlists and operating and marketing plans, and all other documents, tapes, discs, programsor other embodiments of information of the Juice Division.
(b) ExcludedAssets. Notwithstanding the foregoing, all properties, assets and rights of theCompany other than the Purchased Assets (the Excluded Assets) areexpressly excluded from the purchase and sale contemplated hereby and, as such, are notincluded in the Purchased Assets, including, but not limited to: (i) all cash and cashequivalents; (ii) all of the marshes owned by the Company (including the improvements andequipment located thereon and any contractual rights related thereto); (iii) the freshcranberry, frozen cranberry and cranberry juice concentrate inventories of the Company;(iv) all certificates of deposit, shares of stock, securities, bonds, debentures,evidences of indebtedness, interests in joint ventures, partnerships, limited liabilitycompanies and other entities; (v) all personnel records other than Transferring EmployeeRecords, provided that the Company may, in its discretion, retain copies of any or all ofthe Transferring Employee Records; (vi) the consideration delivered by Buyer to theCompany pursuant to this Agreement; (vii) the Companys franchise to be acorporation, its articles of incorporation, corporate seal, stock books, minute books andother corporate records; (viii) all federal, state and local income and franchise taxcredits and tax refund claims and associated returns and records; (ix) all of theequipment, office supplies and personal property of the Company, including withoutlimitation those items listed in Schedule 1.1(b) hereto; and (x) all contracts notspecified in Schedule 1.1(a)(v) hereto.
1.2. AssumedLiabilities. Upon the terms and subject to the conditions of this Agreement, Buyeragrees to assume, satisfy, perform, pay and discharge all of the following Liabilities (AssumedLiabilities):
(a) allLiabilities and obligations associated with any open purchase orders and contracts withrespect to sales of juice products related to the Brands (excluding the cranberry juiceconcentrate, fresh cranberry and frozen cranberry inventories of the Company), which openpurchase orders and contracts are set forth on Schedule 1.2(a) hereto;
(b) allLiabilities and obligations associated with any open purchase orders and contracts withvendors and suppliers of raw materials related to the Juice Division Brands, which openpurchase orders and contracts are set forth on Schedule 1.2(b) hereto;
(c) allLiabilities and obligations associated with the Purchased Contracts and arising after theClosing Date;
(d) allTrade Accounts Payable;
(e) allLiabilities and obligations of the Company relating to coupons issued by the Companyprior to the Closing Date and validly redeemed on or after the date nine (9) weeks fromthe Closing Date (the Assumed Coupon Liabilities);
(f) allLiabilities and obligations of the Company associated with any product liability, breachof warranty or similar claim for injury to person or property asserted after the ClosingDate and related to the Juice Division, but only to the extent based on events occurringafter the Closing Date;
(g) allLiabilities and obligations associated with the Business Employees employed by the Buyerafter the Closing Date that arise after the Closing Date and relate to Buyersemployment of such employees, except as otherwise provided in and subject to theagreement of the parties set forth in Section 5.5 hereof;
(h) allLiabilities and obligations associated with the failure by Buyer, the Juice Division orthe Purchased Assets to comply with any law, regulation, statute, ordinance or treatyafter the Closing, subject to the agreement of the parties set forth in Section 5.4(c) hereof;and
(i) Liensthat are considered Permitted Liens.
Allother Liabilities (the Excluded Liabilities) shall remain with and bedischarged by the Company. For purposes of this Agreement Excluded Liabilities shallinclude without limitation all Liabilities and obligations relating to those couponsissued by the Company prior to the Closing Date which are redeemed in accordance withtheir terms before the date nine (9) weeks after the Closing Date, which coupons theCompany shall discharge and pay pursuant to the terms thereof. Anything to the contraryherein notwithstanding, Buyer shall be and remain liable for all coupons issued after theEffective Time.
(a) Theaggregate purchase price for the Purchased Assets (the Purchase Price)shall be: (i) an amount in cash equal to Nine Million Dollars ($9,000,000) (the BaseConsideration), subject to adjustment as provided in Section 2.2 below, and(ii) the assumption of the Assumed Liabilities. Of the Purchase Price, $500,000 shall beplaced in escrow for a period ending on August 31, 2005, such amount to be usedexclusively for the payment of any Final Adjustment (as defined below) requiring paymentto Buyer. The total escrow amount of $500,000 shall be held pursuant to the terms of theEscrow Agreement attached as Exhibit 2.1. The amount placed in escrow by the Companypursuant to this Section 2.1 shall constitute Buyers sole and exclusive remedy withrespect to any Final Adjustment to the Purchase Price under this Agreement. With respectto any upward Final Adjustment to the Purchase Price under this Agreement, Buyer shallpay to the Company an upward adjustment in an amount not to exceed $500,000, and suchpayment shall constitute the Companys sole and exclusive remedy with respect to anyFinal Adjustment to the Purchase Price under this Agreement.
2.2. PurchasePrice Adjustment.
(a) PreliminaryAdjustment. The Purchase Price shall be adjusted, on a dollar-for-dollar basis, bythe extent to which the Companys Working Capital attributable to the JuiceDivision, as reflected on the Preliminary Balance Sheet (as such terms are definedbelow), varies from Two Million Five Hundred Thousand Dollars ($2,500,000). At theClosing, either: (i) Buyer shall deduct from the Base Consideration the amount, if any,by which the Working Capital is less than $2,500,000, as reflected on the PreliminaryBalance Sheet; or (ii) Buyer shall pay to Company, in addition to the Base Consideration,the amount, if any, by which the Working Capital exceeds $2,500,000, as reflected on thePreliminary Balance Sheet. The amount of the adjustment, if any, made to the BaseConsideration pursuant to this Section 2.2(a) shall be referred to herein as thePreliminary Adjustment.
(b) FinalAdjustment. On the first (1st) business day following the finaldetermination of the Final Closing Balance Sheet (as hereinafter defined) (such datebeing hereinafter referred to as the Settlement Date), either: (i) theCompany shall pay to Buyer the amount, if any, by which the Working Capital as reflectedon the Final Closing Balance Sheet is less than the Working Capital as reflected on thePreliminary Balance Sheet, together with interest on such amount being paid from theClosing Date to the date of the payment at the Applicable Rate, or (ii) Buyer shall payto the Company the amount, if any, by which the Working Capital as reflected on the FinalClosing Balance Sheet exceeds the Working Capital as reflected on the Preliminary BalanceSheet, together with interest on such amount being paid from the Closing Date to the dateof the payment at the Applicable Rate. The amount, if any, paid by Buyer or the Companypursuant to this Section 2.2(b) shall be referred to herein as the FinalAdjustment. For example, if Working Capital is $50,000 below $2,500,000 on thePreliminary Balance Sheet, and ends up $50,000 above $2,500,000 on the Final ClosingBalance Sheet, Buyer will pay the Company $100,000 as a Final Adjustment (i.e., $50,000because of the Preliminary Adjustment of the Purchase Price downward and then another$50,000).
(c) Definitionof Working Capital. The term Working Capital shall mean, withoutduplication, the excess of: (i) all Trade Accounts Receivable and Inventory of theCompany attributable to the Juice Division over (ii) all Trade Accounts Payable of theCompany attributable to the Juice Division, in each case determined as of the ClosingDate in form and detail identical to, and in its accounting principles and policiesconsistent in every respect with, the Companys past practices, except asspecifically provided herein. As used herein, the following terms shall have thefollowing meanings:
(i) Inventoryshall be valued at the Companys standard cost and shall include overheadcapitalization, less an adjustment of $0.20 per case for finished goods, in each case asreflected in the bill of materials and the Companys other books and records as ofthe Closing Date, which books and records shall be in form and detail identical to, andin its accounting principles and policies consistent in every respect with, the Companyspast practices. Notwithstanding the immediately preceding sentence, the total Inventoryvalue shall, for purposes of determining Working Capital, be reduced by $150,000 in theaggregate, in both the Preliminary Balance Sheet and the Final Closing Balance Sheet. AllInventory which is fit for human consumption as of the Closing Date shall be valued, inboth the Preliminary Balance Sheet and the Final Closing Balance Sheet, at standard cost,less an adjustment of $0.20 per case for finished goods, and otherwise pursuant to theterms hereof as of the Closing Date.
(ii) Theterm Trade Accounts Receivable shall mean all amounts owing to Companyon accounts receivable related exclusively to the Juice Division, which shall includewithout limitation: (i) balances included on the Accounts Receivable Aging Report for the01 Grocery, 03 International and 04 Food Service categoriesas of the Closing Date, (ii) military receivable balances per the Dixon Marketing, Inc.Accounts Receivable Aging Report as of the Closing Date, (iii) a cash discount reserveequal to two percent (2%) of the net receivable balances, (iv) all prepaid expenses,which prepaid expenses shall be accounted for consistently in every respect with theCompanys past practices, and (v) a bad debt reserve equal to the amount of thoseTrade Accounts Receivables as of the Closing Date which are not collected within 75 daysof the Closing Date. The bad debt reserve referenced in subsection (v) above shall bereduced by amounts already reflected in the cash discount reserve and the invaliddeduction reserve.
(iii) Theterm Trade Accounts Payable shall mean the payables as set forth on Schedule2.2(c)(iii), which shall include accrued and unpaid market development funds andslotting fees (collectively, the MDF), vendor credits and accrued and unpaidcommissions related exclusively to the Juice Division as of the Closing Date. TradeAccounts Payable shall not include any accounting for coupons issued by the Company priorto Closing. Buyer covenants that it shall, on and after the Closing Date, usecommercially reasonable efforts, in consultation with the Company, to collect all MDFdeductions taken by customers of the Juice Division which are unauthorized under thetrade spending commitments set forth in Exhibit 1.1(a)(V)(C) attached to the CompanyDisclosure Schedule (the Trade Spending Commitments). Buyer shall,concurrently with the delivery of the Closing Balance Sheet, provide Company with awritten summary of all MDF deductions taken by customers of the Juice Division betweenthe Closing Date and the delivery of the balance sheet referred to in Section2.2(d)(ii) below. To the extent the Company reasonably believes such MDF deductionsare unauthorized under the Trade Spending Commitments, Buyer shall, and hereby does,transfer, assign and subrogate to Company all rights of reimbursement and collection withrespect to such Juice Division customers for all such unauthorized MDF deductions. Inseeking such reimbursement from Juice Division customers related to unauthorizeddeductions neither NCI nor its agents will represent themselves as affiliated with, or anagent of, the Buyer or the Juice Division.
(d) Determinationof Working Capital.
(i) PreliminaryBalance Sheet. For purposes of determining the Working Capital and the Purchase Pricepayable by the Buyer at the Closing, on or before the Closing Date, the Company hasdelivered to Buyer a balance sheet of the Juice Division (the PreliminaryBalance Sheet) as of the close of business on the business day immediatelyprior to the Closing Date (hereinafter the Effective Time), whichPreliminary Balance Sheet represents the Companys reasonable estimate of theWorking Capital as of the Effective Time, such balance sheet to be in form and detailidentical to, and in its accounting principles and policies consistent in every respectwith, the Companys past practices and accompanied by schedules setting forth inreasonable detail all assets and liabilities included therein. Such balance sheet or theaccompanying schedules contains sufficient detail of the Inventory, Trade AccountsReceivable and Trade Accounts Payable for the determination of Working Capital.
(ii) TheFinal Closing Balance Sheet shall be prepared as follows. Within seventy-five (75) daysafter the Closing Date, Buyer shall deliver to Company a balance sheet of the JuiceDivision as of the Effective Time, such balance sheet to be in form and detail identicalto, and in its accounting principles and policies consistent in every respect, with theCompanys past practices and accompanied by schedules setting forth in reasonabledetail all assets and liabilities included therein. The balance sheet shall beaccompanied by detailed schedules of the Inventory, Trade Accounts Receivable and TradeAccounts Payable, and by a report setting forth the amount of Working Capital reflectedin the balance sheet and the amount of any further adjustment to the Purchase Price to bepaid and by whom pursuant to Section 2.2(b) hereof. The Inventory as reflected onthe Final Closing Balance Sheet shall be as reflected on the Preliminary Balance Sheet,except to the extent the physical inventory taken by the parties on or about February 11,2005 diverges from the Preliminary Balance Sheet. The MDF shall reflect actually incurreddeductions or payments (provided that such payments are in accordance with the TradeSpending Commitments) in the time between the Preliminary and Closing Balance Sheet, plusany unused MDF from the Preliminary Balance Sheet. All actual MDF deductions are subjectto the unauthorized deductions of Section 2.2(c)(iii) above.
(iii) Withinthirty (30) days following the delivery of the balance sheet referred to in Section2.2(d)(ii) above, the Company may object to any of the information contained in saidbalance sheet or accompanying schedules which could affect the necessity or amount of anypayment by Buyer or the Company pursuant to Section 2.2(b) hereof. Any suchobjection shall be made in writing and shall state the Companys determination ofthe amount of the Working Capital as of the Effective Time.
(iv) Inthe event of a dispute or disagreement relating to the Final Closing Balance Sheet whichBuyer and the Company are unable to resolve, either party may elect to have all suchdisputes or disagreements resolved by Grant Thornton or, failing Grant Thorntonswillingness to so serve, such other independent accounting firm of nationally recognizedstanding as may be mutually selected by Buyer and the Company (the IndependentAccounting Firm). The parties agree to instruct the Independent Accounting Firmto calculate the Working Capital of the Juice Division as of the Effective Time and todetermine the amount of the Final Adjustment based on the books and records of theCompany existing as of the Effective Time (and not on any independent investigation bythe Independent Accounting Firm), and using accounting principles and policies consistentin every respect with the Companys past practices. The Independent Accounting Firmscalculation of the Working Capital and determination of the Final Adjustment shall befinal and binding on the parties for purposes hereof; provided, however, that,notwithstanding any provision to the contrary contained herein: the parties agree toinstruct the Independent Accounting Firm that the Working Capital as determined by theIndependent Accounting Firm shall be no less than the Working Capital as determined byBuyer pursuant to Section 2.2(d)(ii) above and no greater than the Working Capitalas determined by the Company pursuant to Section 2.2(d)(iii) above. TheIndependent Accounting Firm shall be instructed to use every reasonable effort to performits services within fifteen (15) days of submission of the balance sheet to it and, inany case, as soon as practicable after such submission.
(v) Buyeragrees to permit the Company, the Companys accountants, and their respectiverepresentatives, during normal business hours, to have reasonable access to, and toexamine and make copies of, all books and records of the Juice Division, including butnot limited to the books, records, schedules, work papers and audit programs of Buyer andBuyers accountants and access to representatives of Buyers accountants,necessary in order to review the balance sheet and Working Capital calculation deliveredby Buyer or otherwise used or useful in the preparation of the Final Closing BalanceSheet in accordance with this Agreement. Buyer agrees that, following the Closing throughthe date that the Working Capital becomes final and binding on the parties hereto inaccordance with the terms of this Agreement, it will not take any actions, or permit anyactions to be taken, with respect to any accounting books, records, policies orprocedures on or from which the Working Capital is to be based or derived that areinconsistent with the Companys past practice or that would impede or delay thepreparation of the Final Closing Balance Sheet or the determination of the WorkingCapital in the manner and utilizing the methods required by this Agreement. In addition,the Companys accountants shall have the opportunity to observe the taking of anyphysical inventory in connection with the preparation of such balance sheet.
(vi) Thefees and expenses of the Independent Accounting Firm shall be allocated to the parties asdetermined by the Accounting Firm based upon the relative success (in terms ofpercentages) of each partys claim. For example, if the Independent Accounting Firmscalculation of the Working Capital and determination of the Final Adjustment reflects a60-40 compromise of the parties claims, the Independent Accounting Firm wouldallocate expenses 40% to the party whose claim was determined to be 60% successful and60% to the party whose claim was determined to be 40% successful.
(vii) Asused in this Agreement, the term Final Closing Balance Sheet shallmean the balance sheet of the Juice Division as of the Effective Time as finallydetermined for purposes of this Article II, whether by acquiescence of theCompany in the figures supplied by Buyer in accordance with Section 2.2(d)(ii), bynegotiation and agreement of the parties or by the Independent Accounting Firm inaccordance with Section 2.2(d)(iv).
2.3. Closing. Theclosing of the transactions contemplated by this Agreement (the Closing)shall take place at the offices of Foley & Lardner LLP, 777 East Wisconsin Avenue,Milwaukee, Wisconsin on the date hereof, or at such other time and place as is mutuallyagreeable to the parties. The date on which the Closing shall occur is referred to hereinas the Closing Date.
2.4. Allocationof Purchase Price. The Company and Buyer shall jointly prepare anallocation of the Purchase Price among the Purchased Assets in accordance with InternalRevenue Code §1060 and Treasury regulations thereunder (and any similar provision ofstate, local or foreign law, as appropriate) within thirty (30) days after the finalWorking Capital Amount is finally determined pursuant to Section 2.2 hereof.The Company and Buyer shall report, act, and file Tax Returns (including, but not limitedto Internal Revenue Service Form 8594) in all respects and for all purposes consistentwith such allocation. Buyer and the Company shall timely and properly prepare, execute,file, and deliver all such documents, forms, and other information as the other party mayreasonably request in preparing such allocation. Neither the Company nor Buyer shall takeany position (whether in audits, tax returns, or otherwise) that is inconsistent withsuch allocation unless required to do so by applicable law.
(a) Deliveriesof the Company. The Company shall deliver to Buyer at the Closing:
(i) Abill of sale substantially in the form attached hereto as Exhibit A, dulyexecuted and acknowledged by the Company, conveying to Buyer all of the Companysright, title, and interest in the personal property included in the Purchased Assets;
(ii) Anassignment and assumption agreement (the Assignment and Assumption Agreement)substantially in the form attached hereto as Exhibit B, duly executed by theCompany, under which the Company assigns and Buyer assumes the Assumed Liabilities;
(iii) Anagreement for the supply of cranberry juice concentrate (the CranberryConcentrate Supply Agreement) substantially in the form attached hereto as Exhibit C,duly executed by the Company, under which the Company agrees to supply, and Buyer agreesto purchase, cranberry juice concentrate during the term thereof;
(iv) Anagreement for the provision of transition services (the Transition ServicesAgreement) substantially in the form attached hereto as Exhibit D,duly executed by the Company, under which the Company agrees to supply, and Buyer agreesto pay for, certain transition services during the term thereof;
(v) Anassignment and assumption agreement, duly executed by the Company, NCI Foods, LLC, aWisconsin limited liability company (NCI) and Seneca Foods Corporation, a NewYork corporation (Seneca), under which: (i) NCI assigns to Buyer and Buyerassumes all of NCIs rights under the Seneca License Agreement and (ii) Senecaconsents to the assignment of the Seneca License Agreement to Buyer;
(vi) Allof the consents set forth on Schedule 2.5(a)(vi) hereto (the MaterialConsents);
(vii) Acopy of the resolution of the board of directors of the Company authorizing theexecution, delivery and performance of this Agreement and the other documents andagreements contemplated hereby, and the consummation of the transactions contemplatedhereby and thereby, certified by the secretary or an assistant secretary of the Company;and
(viii) Theopinion of Company counsel, in the form attached hereto as Exhibit E.
(b) Deliveriesof Buyer. At the Closing, Buyer shall pay to the Company the Base Consideration, plusor minus the Preliminary Adjustment, such amounts payable by wire transfer of immediatelyavailable federal funds to such account or accounts at a bank or financial institution asthe Company may specify to Buyer in writing. Buyer shall also have delivered to theCompany at the Closing:
(i) Acopy of the resolution of the board of directors of Buyer authorizing the execution andperformance of this Agreement and the other documents and agreements contemplated hereby,certified by the secretary or an assistant secretary of Buyer;
(ii) TheAssignment and Assumption Agreement duly executed by Buyer;
(iii) TheCranberry Concentrate Supply Agreement duly executed by Buyer;
(iv) TheTransition Services Agreement, duly executed by Buyer.
REPRESENTATIONS ANDWARRANTIES OF THE COMPANY
TheCompany hereby represents and warrants to Buyer as of the date of this Agreement that thestatements contained in this Article III are true and correct, subject to theexceptions set forth in the disclosure schedule delivered by the Company to Buyerconcurrently with the execution of this Agreement and dated as of the date of thisAgreement (the Company Disclosure Schedule). The Company DisclosureSchedule shall be arranged according to specific sections in this Agreement and shallprovide exceptions to, or otherwise qualify in reasonable detail, the correspondingsection in this Agreement and any other section in this Agreement where it is reasonablyclear that the disclosure is intended to apply to such other section.
3.1. Organizationand Qualification. The Company is a corporation duly organized, validlyexisting and in active status under the laws of the state of Wisconsin and is qualifiedto do business and in good standing as a foreign corporation in each jurisdiction wherethe properties owned, leased or operated, or the business conducted, by it require suchqualification, except where failure to so qualify or be in good standing is notreasonably likely to have a Material Adverse Effect on the Company. The Company has thecorporate power and authority and all necessary governmental approvals to own, lease andoperate its properties and to carry on its business as it is now being conducted. TheCompany has heretofore made available to Buyer a complete and correct copy of itsarticles of incorporation (including all certificates of designation or the equivalentthereof) and bylaws, each as amended to the date hereof. Such articles of incorporationand bylaws, each as amended to date, are in full force and effect.
3.2. Authority. TheCompany has the necessary corporate power and authority to execute and deliver thisAgreement and perform its obligations hereunder and to consummate the transactionscontemplated hereby. The execution and delivery of this Agreement by the Company and theconsummation by the Company of the transactions contemplated hereby have been duly andvalidly authorized by all necessary corporate action on the part of the Company and noother corporate proceedings on the part of the Company, nor any stockholder vote orconsent, is necessary to authorize this Agreement or to consummate the transactionscontemplated hereby. This Agreement has been duly and validly executed and delivered bythe Company, and, assuming this Agreement constitutes a legal, valid and bindingobligation of Buyer, this Agreement constitutes a legal, valid and binding agreement ofthe Company, enforceable against the Company in accordance with its terms (except in allcases as such enforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium, or similar laws affecting the enforcement of creditorsrights generally and except that the availability of the equitable remedy of specificperformance or injunctive relief is subject to the discretion of any court before whichany proceeding may be brought).
3.3. NoViolation; Consents.
(a) Exceptas set forth on Section 3.3 of the Company Disclosure Schedule, and except withregard to the confidentiality provisions of those contracts listed on Section 3.3(a) ofthe Disclosure Schedule, neither the execution and delivery of this Agreement by theCompany nor the consummation by the Company of the transactions contemplated hereby willconflict with or constitute a breach or violation of any provision of the articles ofincorporation or bylaws of the Company, as amended, constitute a material breach,violation or default (or any event which, with notice or lapse of time or both, wouldconstitute a default) under, or result in the termination of or permit any other party toterminate, require the consent from or the giving of notice to any other party to, oraccelerate the performance required by, or result in the creation of any Lien upon any ofthe Purchased Assets under, any note, bond, mortgage, indenture, deed of trust, or anymaterial license, lease, agreement or other material instrument to which the Company, orby which it or any of the Purchased Assets, are bound, or conflict with or violate anymaterial order, judgment or decree, or any material law, statute, ordinance, rule orregulation applicable to the Company, or by which it or any of the Purchased Assets maybe bound or affected.
(b) Theexecution and delivery of this Agreement by the Company do not, and the performance ofthis Agreement by the Company and the transfer of the Purchased Assets to Buyer will not,require any consent, approval, authorization or permit of, or filing with or notificationto, any Governmental Entity, except where the failure to obtain any such consent,approval, authorization or permit, or to make any such filing or notification, would notprevent or materially delay consummation of the transactions contemplated hereby, orotherwise prevent or materially delay the Company from performing its obligations underthis Agreement and would not, individually or in the aggregate, have a Material AdverseEffect and would not materially impact the Buyers ability to commercially exploitthe Purchased Assets.
3.4. Titleto Purchased Assets; Condition of Assets.
(a) TheCompany has the power and the right to sell, assign and transfer and the Company will sell and deliver to Buyer, and upon consummation of the transactions contemplated by this Agreement, Buyer will acquire good and marketable title to the Purchased Assets, free and clear of all Liens otherthan Permitted Liens.
(b) Exceptas set forth on Section 3.4 of the Company Disclosure Schedule, theCompany has good and marketable title to, or a valid leasehold interest in thepersonal property included in the Purchased Assets.
3.5. BrokersFees. Except as set forth on Section 3.5 of the CompanyDisclosure Schedule, the Company has no liability or obligation to pay any fees orcommissions to any broker, finder, or agent with respect to the transactions contemplatedby this Agreement for which the Buyer would become liable or obligated. All obligationsfor fees or commissions owing to the Persons listed on Section 3.5 of theCompany Disclosure Schedule shall be the responsibility of the Company.
3.6. LegalCompliance; Permits.
(a) Exceptas set forth on Section 3.6 of the Company Disclosure Schedule, the Companyis and has been in compliance in all material respects with all applicable laws relatingto the Juice Division (including rules, regulations, codes, plans, injunctions,judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local,and foreign governments (and all agencies thereof), and the Company has not receivedwritten notice that any action, suit, proceeding, hearing, investigation, charge,complaint, claim, demand, or notice has been filed or commenced against the Companyalleging any failure so to comply.
(b) Exceptas disclosed in Section 3.6 of the Company Disclosure Schedule, the Company is inpossession of all franchises, grants, authorizations, licenses, permits, easements,variances, exceptions, consents, certificates, approvals and orders of any GovernmentalEntity necessary for the Company to own, lease and operate its properties or to carry onits business it is now being conducted with respect to the Juice Division (the CompanyPermits), except where the failure to obtain any such Company Permits would notprevent or materially delay consummation of the transactions contemplated hereby, orotherwise prevent or materially delay the Company from performing its obligations underthis Agreement and would not, individually or in the aggregate, have a Material AdverseEffect. As of the date hereof, no suspension or cancellation of any of the CompanyPermits is pending or, to the knowledge of the Company, threatened.
3.7. TradeRights. Schedule 1.1(a)(ii) lists all Juice Division Trade Rightswhich are Trade Rights of the type described in clauses (i), (ii) or (iii) of Section1.1(a)(ii) in which the Company or NCI now has any interest, specifying whether suchTrade Rights are owned, controlled, used or held (under license or otherwise) by theCompany or NCI, and also indicating which of such Trade Rights are registered. Except asset forth in Section 3.7 of the Disclosure Schedule, all Juice Division TradeRights shown as registered in Schedule 1.1(a)(ii) have been properly registered,all pending registrations and applications have been properly made and filed and allannuity, maintenance, renewal and other fees relating to registrations or applicationsare current. Except as set forth in Section 3.7 of the Disclosure Schedule, theCompany is not to its knowledge infringing and has not infringed any Trade Rights ofanother in the operation of the business of the Company and to the knowledge of theCompany, no other Person is infringing the Trade Rights of the Company. Except as setforth in Section 3.7 of the Company Disclosure Schedule, the Company has notgranted any license or made any assignment of any registered Juice Division Trade Rightlisted on Schedule 1.1(a)(ii), and no other Person has any right to use anyregistered Juice Division Trade Right owned or held by the Company. Except as set forthin Section 3.7 of the Company Disclosure Schedule, there is no Litigation pendingor, to the knowledge of the Company, threatened to challenge the Companys right,title and interest with respect to its continued use and right to preclude others fromusing any Juice Division Trade Rights of the Company. Except as set forth on Section3.7 of the Disclosure Schedule, all registered Juice Division Trade Rights of theCompany are valid, enforceable and in good standing, and there are no equitable defensesto enforcement based on any act or omission of the Company.
(a) TheCompany has filed all Tax Returns that it was required to file with respect to the JuiceDivision and has paid all Taxes shown thereon as owing. Except as set forth in Section3.8(a) of the Company Disclosure Schedule, the Company is not currently thebeneficiary of any extension of time within which to file any Tax Return with respect tothe Juice Division. There are no security interests on any of the assets of the Companyused in the Juice Division that arose in connection with any failure (or alleged failure)to pay any Tax.
(b) Thereis no dispute or claim concerning any Tax Liability with respect to the Juice Divisionclaimed or raised by any authority in writing. Section 3.8(b) of the CompanyDisclosure Schedule lists all federal, state, local, and foreign income Tax Returns filedwith respect to the Juice Division for taxable periods ended on or after August 31, 2002,and indicates those Tax Returns that have been audited, and indicates those Tax Returnsthat currently are the subject of audit.
(c) TheCompany has not waived any statute of limitations in respect of Taxes or agreed to anyextension of time with respect to a Tax assessment or deficiency with respect to theJuice Division.
(d) TheCompany is not a party to any Tax allocation or sharing agreement. The Company (i) hasnot been a member of an affiliated group filing a consolidated federal income Tax Return(other than a group the common parent of which was the Company) and (ii) does not haveany Liability for the Taxes or any Person under Treas. Reg. 1.1502-6 (or any similarprovision of state, local, or foreign law), as a transferee or successor, by contract, orotherwise.
3.9 Contracts. Theagreements listed in Schedule 1.1(a)(iii)constitute all of the agreementsrelating exclusively to the Juice Division which are material to the operation of theJuice Division. Except as set forth on Section 3.9of the Company DisclosureSchedule, the Company has delivered to the Buyer a correct and complete copy of eachwritten agreement listed in Schedule 1.1(a)(iii) (as amended to date) and awritten summary setting forth the material terms and conditions of each oral agreementreferred to in Schedule 1.1(a)(iii). Except as set forth in Section 3.9 ofthe Company Disclosure Schedule, with respect to each such agreement: (a) the agreementis a legal, valid, binding, and enforceable obligation of the Company enforceable inaccordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,moratorium, liquidation, fraudulent conveyance and other similar laws and principles ofequity affecting creditors rights and remedies generally; (b) neither the Companynor, to the knowledge of the Company, any other party thereto is in material breach ordefault, and no event has occurred which with notice or lapse of time would constitute amaterial breach or default, or permit termination, modification, or acceleration, underthe agreement; and (c) neither the Company nor, to the knowledge of the Company, anyother party thereto has repudiated any provision of the agreement.
3.10. TradeAccounts Receivable. All Trade Accounts Receivable reflected on the PreliminaryBalance Sheet, and as incurred in the normal course of business since the date thereof,represent arms length sales actually made in the ordinary course of business.
3.11. Inventory. Exceptas set forth on Section 3.11 of the Company Disclosure Schedule, all Inventoryreflected on the Preliminary Balance Sheet is fit for human consumption. Except as setforth on Section 3.11 of the Company Disclosure Schedule, all packaging, labelsand finished goods contained in the Inventory of the Juice Division are in compliance inall material respects as to content, labeling and packaging with applicable laws andregulations (including, without limitation, those of the U.S. Department of Agricultureand U.S. Food and Drug Administration).
3.12. MajorCustomers and Suppliers.
(a) Section3.12(a) of the Company Disclosure Schedule contains a list of the ten (10) largestcustomers, including distributors, of the Juice Division for each of the two (2) mostrecent fiscal years and for the five-month period ending January 31, 2005 (determined onthe basis of the total dollar amount of sales) showing the total dollar amount of salesto each such customer during each such year or period.
(b) Section3.12(b) of the Company Disclosure Schedule contains a list of the ten (10) largestsuppliers to the Juice Division for each of the two most recent fiscal years and for thefive-month period ending January 31, 2005 (determined on the basis of the total dollaramount of purchases) showing the total dollar amount of purchases from each such supplierduring each such year or period. Section 3.12(b) of the Company DisclosureSchedule also contains a true and correct list of all contracts for the purchase of fruitjuice concentrate in excess of $50,000.
(c) Section3.12(c) of the Company Disclosure Schedule contains a list by product line of allsales representatives and brokers of the Juice Division, together with representativecopies of all sales representative and broker contracts.
3.13. Litigation. Section 3.13ofthe Company Disclosure Schedule sets forth each instance in which the Company: (i) issubject to any outstanding injunction, judgment, order, decree, ruling, or charge relatedto the Purchased Assets or (ii) is a party or, to the knowledge of the Company, isthreatened to be made a party to any action, suit, proceeding, hearing, or investigationrelated to the Purchased Assets of, in, or before any court or quasi-judicial oradministrative agency of any federal, state, local, or foreign jurisdiction or before anyarbitrator. Except as described in Section 3.13 of the Company DisclosureSchedule, none of the actions, suits, proceedings, hearings, and investigations set forthin Section 3.13 of the Company Disclosure Schedule reasonably could beexpected to result in any Material Adverse Effect with respect to the Purchased Assets.
(a) Exceptas set forth in Section 3.14 of the Disclosure Schedule, (a) there are no materialcontroversies pending or, to the knowledge of the Company, threatened between the Companyor any Company Subsidiary and any Persons employed by the Juice Division, whichcontroversies would prevent or materially delay consummation of the transactioncontemplated hereby or otherwise prevent or materially delay the Company from performingits obligations under this Agreement or would, individually or in the aggregate, have aMaterial Adverse Effect; (b) neither the Company nor any Company Subsidiary is a party toany collective bargaining agreement or other labor union contract applicable to Personsemployed by the Juice Division of the Company or any Company Subsidiary, nor, to theknowledge of the Company, are there any activities or proceedings of any labor union toorganize any such employees; (c) neither the Company nor any Company Subsidiary hasbreached or otherwise failed to comply with any material provision of any such agreementor contract, and there are no grievances outstanding against the Company or any CompanySubsidiary under any such agreement or contract with respect to the Juice Division; (d)there are no unfair labor practice complaints pending against the Company or any CompanySubsidiary before the National Labor Relations Board or any current union representationquestions involving employees of the Company or any Company Subsidiary; and (e) there isno strike, slowdown, work stoppage or lockout, or, to the knowledge of the Company,threat thereof, by or with respect to any employees of the Company or any CompanySubsidiary with respect to the Juice Division.
(b) Exceptas set forth in Section 3.14(b) of the Company Disclosure Schedule, the Company and theCompany Subsidiaries are in compliance with all applicable laws relating to theemployment of labor, including those related to wages, hours, collective bargaining andthe payment and withholding of taxes and other sums as required by the appropriateGovernmental Entity and has withheld and paid to the appropriate Governmental Entity orare holding for payment not yet due to such Governmental Entity all amounts required tobe withheld from Persons employed by the Juice Division of the Company or any CompanySubsidiary and are not liable for any arrears of wages, taxes, penalties or other sumsfor failure to comply with any of the foregoing except for any non-compliance that wouldnot prevent or materially delay consummation of the transactions contemplated hereby orotherwise prevent or materially delay the Company from performing its obligations underthis Agreement and would not, individually or in the aggregate, have a Material AdverseEffect. The Company and the Company Subsidiaries have paid in full all employees of theJuice Division or adequately accrued for in accordance with U.S. GAAP consistentlyapplied all wages, salaries, commissions, bonuses, benefits and other compensation due toor on behalf of such employees and there is currently pending no material claim againstthe Company or any Company Subsidiary with respect to payment of wages, salary orovertime pay that has been asserted or, to the Companys knowledge, is now pendingor threatened before any Governmental Entity with respect to any persons currently orformerly employed by the Juice Division of the Company or any Company Subsidiary. Neitherthe Company nor any Company Subsidiary is a party to, or otherwise bound by, any consentdecree with, or citation by, any Governmental Entity relating to employees or employmentpractices. There is no charge or proceeding with respect to a material violation of anyoccupational safety or health standards that has been asserted or, to the Companysknowledge, is now pending or threatened with respect to the Company. There is currentlypending no charge of discrimination in employment or employment practices, for anyreason, including, without limitation, age, gender, race, religion or other legallyprotected category, which has been asserted or is now pending or to the Companysknowledge threatened before the United States Equal Employment Opportunity Commission, orany other Governmental Entity in any jurisdiction in which the Company or any CompanySubsidiary have employed or employ any person relating to the Juice Division.
3.15. PurchasedAssets. Except as set forth on Schedule 1.1(b), the Purchased Assets include all ofthe assets of the Company which are currently used in the operation of the Juice Divisioncurrently conducted by the Company as of the date hereof
3.16. EnvironmentalMatters. Except as described in Section 3.16 of the Company Disclosure Schedule andexcept as such relates to any real property of the Company (none of which is beingconveyed to Buyer hereunder), to the Companys knowledge and only as such relates tothe Juice Division, (a) the Company and the Company Subsidiaries have not materiallyviolated and are not in material violation of any Environmental Law (as defined below);(b) none of the properties currently or formerly owned, leased or operated by the Companyand the Company Subsidiaries (including, without limitation, soils and surface and groundwaters) are or were contaminated by the Company or the Company Subsidiaries with anyHazardous Substance (as defined below); (c) neither the Company nor the CompanySubsidiaries are liable for any off-site contamination by Hazardous Substances; (d) theCompany and the Company Subsidiaries are not liable under any Environmental Law(including, without limitation, pending or threatened liens); (e) the Company and theCompany Subsidiaries have all permits, licenses and other authorizations required underany Environmental Law (Environmental Permits); (f) the Company and theCompany Subsidiaries are in material compliance with their Environmental Permits; and (g)neither the execution of this Agreement nor the consummation of the transactionscontemplated herein will require any investigation, remediation or other action withrespect to Hazardous Substances, or any notice to or consent of Governmental Entities orthird parties, pursuant to any applicable Environmental Law or Environmental Permit.
EnvironmentalLaw means any applicable federal, state or local law in effect as of the datehereof relating to (A) releases or threatened releases of Hazardous Substances ormaterials containing Hazardous Substances; (B) the manufacture, handling, transport, use,treatment, storage or disposal of Hazardous Substances or materials containing HazardousSubstances; or (C) otherwise relating to pollution or protection of the environment,health, safety or natural resources.
HazardousSubstances means (i) those substances defined in or regulated under thefollowing federal statutes and their state counterparts in effect as of the date hereof,as each may be amended from time to time, and all regulations thereunder in effect as ofthe date hereof: the Hazardous Materials Transportation Act, the Resource Conservationand Recovery Act, the Comprehensive Environmental Response, Compensation and LiabilityAct, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the FederalInsecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (ii) petroleum andpetroleum products, including crude oil and any fractions thereof; (iii) natural gas,synthetic gas, and any mixtures thereof; (iv) polychlorinated biphenyls, asbestos andradon; (v) any other contaminant; and (vi) any substance, material or waste regulated byany federal, state, local or foreign Governmental Entity pursuant to any EnvironmentalLaw.
3.17. Insurance. Section3.17 of the Company Disclosure Schedule contains a list of all policies ofinsurance to which each of the Company and the Company Subsidiaries are a partyor are a beneficiary or named insured.
3.18. FinancialInformation. The Company has provided to Buyer the Preliminary Balance Sheet, as wellas its historical sales reports, costs of goods, coupon accruals, accrued and unpaidmarket development funds and slotting fees, commission accruals, cash discounts, freightand advertising expenses for the twelve (12) months ended August 31, 2004 and the five(5) months ended January 31, 2005 (together with the Preliminary Balance Sheet, the FinancialInformation). The Financial Information provided to Buyer was compiled from theCompanys consolidated financial statements and is complete and accurate in allmaterial respects. Buyer acknowledges and agrees that the Company does not maintainsegregated audited or unaudited financial statements specific to the Juice Division orthe Purchased Assets, and that as such all Financial Information provided hereunder isnot represented or warranted to comply or otherwise have been prepared in accordance withGAAP.
3.19. UndisclosedLiabilities. Except for those liabilities that are disclosed in Section 3.19 of theCompany Disclosure Schedule or are fully reflected or reserved against on the PreliminaryBalance Sheet, neither the Company nor any Company Subsidiary has outstanding anyliability or obligation of any nature whatsoever relating to the Juice Division (whetherabsolute, accrued, contingent or otherwise and whether due or to become due).
3.20. Limitationson Representations and Warranties. BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (a) EXCEPTAS EXPRESSLY SET FORTH IN ARTICLE III OF THIS AGREEMENT, THE COMPANY IS TRANSFERRING THEPURCHASED ASSETS AS IS, WHERE IS AND WITH ALL FAULTS AND (b) EXCEPT FOR THEREPRESENTATIONS AND WARRANTIES OF THE COMPANY EXPRESSLY SET FORTH IN ARTICLE III OF THISAGREEMENT, NEITHER THE COMPANY NOR ANY OTHER PERSON IS MAKING, AND BUYER IS NOT RELYINGON, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN,EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, AS TO ANY MATTER CONCERNING ANY OF THEPURCHASED ASSETS OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACCURACY OR COMPLETENESSOF ANY INFORMATION PROVIDED TO BUYER BY THE COMPANY OR ANY OTHER PERSON OR OTHERWISEOBTAINED BY BUYER CONCERNING ANY OF THE PURCHASED ASSETS OR THE TRANSACTIONS CONTEMPLATEDHEREBY, INCLUDING, BUT NOT LIMITED TO: (i) the quality, nature, merchantability, use,operation, value, marketability, adequacy or physical condition of any of the PurchasedAssets or any aspect or portion thereof; (ii) the magnitude or dimensions of any of thePurchased Assets; (iii) the development or income potential of, or rights of or relatingto the development or income potential of, any of the Purchased Assets, or the fitness,suitability, value or adequacy of any of the Purchased Assets for any particular purpose;(iv) the compliance of any of the Purchased Assets or their operation with any applicablecodes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions ofany authority or of any other Person; (v) the ability of Buyer to obtain any necessarygovernmental approvals, licenses or permits for the use or development of any of thePurchased Assets; or (vi) the likelihood that customers and suppliers of the JuiceDivision business will after Closing continue their relationship with the Juice DivisionBrands, maintain such relationship with the Juice Division at substantially the samelevel, or continue to purchase inventory of products relating to the Juice DivisionBrands.
REPRESENTATIONS ANDWARRANTIES OF BUYER
Buyerhereby represents and warrants to the Company as of the date of this Agreement that thestatements contained in this Article IV are true and correct.
4.1. Organizationand Qualification. Buyer is a limited liability company duly organized,validly existing and in good standing under the laws of the state of Delaware. Buyer hasthe limited liability company power and authority and all necessary governmentalapprovals to own, lease and operate its properties and to carry on its business as it isnow being conducted, except where the failure to have such power or authority andgovernmental approvals is not reasonably likely to have a Material Adverse Effect onBuyer. Buyer has heretofore made available a complete and correct copy of its certificateof formation, as amended to the date hereof. Such certificate of formation, as amended todate, is in full force and effect.
4.2. Authority. Buyerhas the corporate power and authority to execute and deliver this Agreement and toconsummate the transactions contemplated hereby. The execution and delivery of thisAgreement by Buyer and the consummation by Buyer of the transactions contemplated herebyhave been duly and validly authorized by all necessary corporate action on the part ofBuyer. This Agreement has been duly and validly executed and delivered by Buyer, and,assuming this Agreement constitutes a valid and binding obligation of the Company, thisAgreement constitutes a valid and binding agreement of Buyer, enforceable against Buyerin accordance with its terms (except in all cases as such enforceability may be limitedby applicable bankruptcy, insolvency, reorganization, moratorium, or similar lawsaffecting the enforcement of creditors rights generally and except that theavailability of the equitable remedy of specific performance or injunctive relief issubject to the discretion of any court before which any proceeding may be brought).
4.3. NoViolation. Neither the execution and delivery of this Agreement by Buyer nor theconsummation by Buyer of the transactions contemplated hereby will (i) constitute abreach or violation of any provision of its certificate of incorporation or bylaws, asamended, constitute a material breach, violation or default (or any event which, withnotice or lapse of time or both, would constitute a default) under, or result in thetermination of or permit any other party to terminate, or accelerate the performancerequired by, or result in the creation of any Lien upon any property or asset of Buyerunder, any note, bond, mortgage, indenture, deed of trust or any material license, lease,agreement or other material instrument to which Buyer or its properties or assets, arebound, or subject to the receipt of the requisite consents, approvals, or authorizationsof, or filings with Governmental Entities, conflict with or violate any material statute,ordinance, rule or regulation applicable to Buyer, or by which it or any of itsproperties or assets may be bound or affected. Neither the execution and delivery of thisAgreement by Buyer nor the consummation by Buyer of the transactions contemplated herebywill conflict with or violate any order, judgment or decree applicable to Buyer, or bywhich it or any of its properties or assets may be bound or affected.
4.4. FindersFees. No Person retained by Buyer or its Affiliates is or will be entitled to anycommission or finders or similar fee in connection with the transactionscontemplated by this Agreement.
4.5. Litigation. Thereis no suit, claim, proceeding or investigation pending or, to Buyers knowledge, threatened against Buyer which is reasonably likely to have a Material Adverse Effect on Buyer or would reasonably be expected to prevent or delay the consummation of the transactions contemplated by this Agreement.Buyer is not a party to or bound by any outstanding order, writ, injunction ordecree which is reasonably likely to have a Material Adverse Effect on Buyer orwould reasonably be expected to prevent or delay the consummation of thetransactions contemplated hereby.
4.6. Funding. Buyerhas and will have at Closing and upon the Settlement Date, cash sufficient toenable it to timely and fully perform all of its obligations hereunder, including without limitation the payment of the Base Consideration, the Preliminary Adjustment and any Final Adjustment payable to the Company.
4.7. CompanyStock. Buyer does not own, nor within the past three years has it owned (directly orindirectly, beneficially or of record), any capital stock of the Company and is not aparty to any agreement, arrangement, or understanding for the purpose of acquiring,holding, voting, or disposing of, in each case, any share of capital stock of theCompany.
5.1. Confidentiality. Theparties acknowledge that Buyer and the Company have previously executed a Confidentiality Agreement dated December 15, 2003, (the Confidentiality Agreement), which Confidentiality Agreement will terminate upon Closing and be replaced by the confidentiality provisions of this Agreement.
5.2. PublicDisclosure. Buyer and the Company agree that the initial press release with respectto the transactions contemplated hereby shall be in a form agreed to by and between Buyerand the Company; provided, however, that nothing contained in this Agreement shallprohibit the Company from making any disclosure of the transactions contemplated herebywhich the Company reasonably determines is required by applicable law.
5.3. Preservationof Books and Records. Buyer agrees that the Company may retain copies of all originalbooks and records in respect of the Business, and that Buyer shall preserve and keep, orcause to be preserved and kept, all original books and records in respect of the Businessin the possession of Buyer or its Affiliates for a period of six (6) years after theClosing Date (the Record Retention Period). The Company or itsrepresentatives, upon reasonable notice and for any reasonable business purpose, shallhave access during normal business hours to examine, inspect and copy such books andrecords. Buyer shall provide the Company or its representatives with, or cause to beprovided to the Company or its representatives, such original books and records of theBusiness as the Company or its representatives shall reasonably request in connectionwith any action to which the Company is a party or in connection with the requirements ofany law applicable to the Company or its representatives.
5.4. FurtherActions; Filings.
(a) Uponthe terms and subject to the conditions hereof, each of the parties hereto shall use itscommercially reasonable efforts to (i) take, or cause to be taken, all appropriate actionand do, or cause to be done, all things reasonably necessary, proper or advisable underapplicable law or otherwise to consummate and make effective the transactionscontemplated by this Agreement, including without limitation the execution and deliveryof any documents, certificates, agreements and other writings and the taking of suchother actions as may be reasonably necessary or desirable (but which shall not cause theCompany to incur any material expense) in order to vest in Buyer good title to thePurchased Assets, free and clear of all Liens, other than Permitted Liens, (ii) obtainfrom Governmental Entities any consents, licenses, permits, waivers, approvals,authorizations or orders required to be obtained or made by Buyer or the Company or anyof their subsidiaries in connection with the authorization, execution and delivery ofthis Agreement and the consummation of the transactions contemplated by this Agreementand (iii) respond to all inquiries and investigations, make all necessary filings, andthereafter make any other submissions, with respect to this Agreement, the transactionscontemplated by this Agreement that are required under (A) applicable federal andstate securities laws, (B) the HSR Act and foreign antitrust regulations, if any,applicable to the transactions contemplated by this Agreement and (C) any otherapplicable law. The parties hereto shall cooperate with each other in connection with themaking of all such filings.
(b) Eachparty shall promptly notify the other party in writing of any pending or, to theknowledge of such party, threatened inquiry, action, proceeding or investigation by anyGovernmental Entity or any other Person, whether arising prior to or after the Closing,(i) challenging or seeking damages in connection with this Agreement or the transactionscontemplated hereunder or (ii) seeking to restrain or prohibit or set aside theconsummation of the transactions contemplated by this Agreement or otherwise limit theright of Buyer or its subsidiaries to own or operate all or any portion of the PurchasedAssets of the Company. If a suit or other action is threatened or instituted by anyGovernmental Entity or other entity challenging the validity or legality, or seeking toenjoin or set aside the consummation of the transactions contemplated by this Agreement,the parties shall use commercially reasonable efforts to defend such suit or action, andshall pay their own costs incurred in connection with doing so.
(c) Notwithstandinganything to the contrary in this Agreement, including, without limitation, theindemnification provisions contained in Article VIII, each party shall beresponsible for the costs it and its officers, directors, employees, agents, advisors,representatives and Affiliates incur in connection with complying with the provisions ofthis Section 5.4 in connection with any such inquiry, action, proceeding orinvestigation initiated under any applicable antitrust law, rule or regulation.
5.5. Employees;Employment and Benefit Arrangements.
(a) Section 5.5 ofthe Company Disclosure Schedule sets forth the current, active employees of the Companywhose employment primarily relates to the Juice Division, including, without limitation,all full-time employees whose employment primarily relates to the Juice Division and anyinactive employees previously employed whose employment primarily related to the JuiceDivision who have a right of reemployment by the Company under applicable law(collectively, the Business Employees). Nothing contained in thisAgreement shall confer upon any Business Employee or any other employee or formeremployee of the Company any right to employment with Buyer or its Affiliates.
(b) Exceptas set forth in Section 5.5(c), below, the Company shall be responsible for allobligations due and Liabilities associated with the Business Employees of the Company inconnection with their employment prior to, on or after the Closing Date (except to theextent such Liabilities arise from the hiring of such Business Employees by Buyer on orafter the termination of their employment with the Company) or in connection with theirtermination from employment with the Company prior to, on or after the Closing Date,including, without limitation, any Liabilities in connection with bonuses, vacations,employment arrangements, termination or severance as set forth in Section 3.14.Except as otherwise provided in this Section 5.5, the Buyer shall be responsiblefor all obligations and Liabilities that arise following the Closing Date in connectionwith its employment of any employees of the Juice Division, it being understood that theemployees providing services under the Transition Agreement shall not be deemed employeesof Buyer.
(c) Inrespect of notices and payments relating to the Business Employees, the Company shall beresponsible for and assume all Liabilities for (and shall indemnify and hold Buyerharmless from and against) any and all notices, payments, fines or assessments due to anyGovernmental Entity or Business Employee, and all legal and other costs and expensesrelated thereto, pursuant to any applicable federal, state, local or foreign law, commonlaw, statute, rule, regulation or ordinance with respect to the employment, discharge orlayoff of Business Employees by the Company prior to, on or after the Closing Date,including, but not limited to the Worker Adjustment and Retraining Notification Act, theWisconsin Business Closing Law, and any rules or regulations as have been issued inconnection with the foregoing (jointly referred to throughout this Agreement as the WARNAct). The Company further agrees to defend, indemnify and hold Buyer harmlessfrom and against any and all Liabilities incurred by Buyer with respect to the Companysfailure to comply with its WARN Act obligations in respect of the Business Employees orwith respect to the Companys failure to comply with its obligations under Section5.5(b) above (except to the extent such Liabilities arise from the hiring of suchBusiness Employees by Buyer on or after the termination of their employment with theCompany). The indemnity in this Section 5.5(c) is to be provided without giving effect tothe limitations set forth in Section 8.3(c) below. In respect of notices and paymentsrelating to events occurring after the Effective Time, each party shall be responsiblefor, and shall indemnify and hold harmless the other against, any WARN Act obligations orLiabilities arising with respect to employees actually employed by such party after theClosing, it being understood that the employees providing services under the TransitionAgreement shall not be deemed employees of Buyer, unless such employees are hiredindependently by Buyer.
5.6. Funding. Buyeragrees that it has and will have at Closing and upon the Settlement Date, cashsufficient to enable it to timely and fully perform all of its obligations hereunder, including without limitation the payment of the Base Consideration, the Preliminary Adjustment and any Final Adjustment payable to the Company.
5.7. Assignmentof Purchased Contracts. To the extent that any Purchased Contract for whichassignment to Buyer as provided herein is not permitted without the consent of anotherparty or the confidentiality provisions of which prohibit the Companys disclosureof the contract or its terms, this Agreement shall not constitute an assignment or anattempted assignment thereof if such assignment, attempted assignment or disclosure wouldconstitute a breach thereof. The Company and Buyer agree to use commercially reasonableefforts (provided that such efforts shall not require additional cost or expense (otherthan incidental costs or expenses)) to obtain the consent of such other party to theassignment or disclosure of any such Purchased Contract to Buyer in all cases in whichsuch consent is or may be required for such assignment or disclosure. Until such consentis obtained or if it is not obtained, the Company shall cooperate with Buyer in anyreasonable arrangement (such as by agency or sublicense) designed to provide Buyer withthe economic benefits under such relevant contract; provided that to the extent thatBuyer requires the Company to undertake any services or take any action in furtherance ofthe performance of such Purchased Contract, any such services or actions shall be thesubject of a separate agreement that the parties shall, in good faith, negotiate aspromptly as possible and that shall be mutually acceptable to the parties. The PurchasePrice hereunder shall not be reduced by reason of the inability to transfer (byassignment, subcontract or otherwise) to Buyer any such Purchased Contract on or afterthe Closing Date. Each party shall be responsible for all of its internal costs andexpenses incurred by it in connection with the actions required by it under thissubsection.
5.8. TransitionPeriod. The Company will for a period of six (6) months after the Closing Date usecommercially reasonable efforts to maintain all systems, records and software programsrelating to the Juice Division, provide Buyer reasonable access thereto, and, to theextent reasonable practicable and so as not to violate any confidentiality or otherobligations of the Company, shall transition all such records to Buyer within 6 monthsafter the Closing Date (provided that no such actions shall not cause the Company toincur any expense).
5.9. CorporateName. Buyer hereby grants to Company a fully paid, exclusive, royalty free right andlicense to use the Corporate Name in connection with its continuing business operationsfor a period of two (2) years following the Closing; provided, however, that the Companycovenants and agrees that during such period it shall not use the Corporate Name inconnection with any business competitive with the retail sale or marketing of juice,juice drinks or cranberry related products, and provided, further, that Company agreesthat it shall promptly change its corporate name at the expiration of such two (2) yearterm. In using the name, Northland will adhere to the same quality standards as it didprior to the Closing Date. Any goodwill associated with the use of the name shall inureto the benefit of Buyer.
Thefollowing capitalized terms when used herein shall have the meaning indicated below.Definitions of certain other capitalized terms are set forth elsewhere in this Agreement.
Affiliateshallmean, with respect to a particular Person, Persons controlling, controlled by, or undercommon control with that Person.
ApplicableRate shall mean the prime rate of interest reported from time to time in TheWall Street Journal.
Brandsshallmean those brands associated with the Company Trade Rights set forth in Schedule1.1(a)(ii) hereto, together with those associated with the assignable Trade Rightsunder the Seneca License Agreement assigned to Buyer.
CompanyBenefit Plan means any employee benefit plan (as such term isdefined in Section 3(3) of ERISA) and any other material employee benefit plan,program or arrangement of any kind that is maintained, sponsored or contributed to by theCompany and with respect to which the Company has any Liability or potential Liabilitywith respect to any Business Employees.
Companysknowledge or knowledge of the Company or words of similarimport shall mean, with respect to any matter in question, the actual knowledge of JohnSwendrowski, Ricke Kress and Nigel Cooper.
ERISAmeansthe Employee Retirement Income Security Act of 1974, as amended.
GAAPmeansUnited States generally accepted accounting principles as in effect from time to time,consistently applied.
GovernmentalEntity shall mean any government or subdivision thereof, domestic, foreign orsupranational or any administrative, governmental or regulatory authority, agency,commission, tribunal or body, domestic, foreign or supranational.
HSRAct shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended.
JuiceDivision shall mean the Companys business of producing, packaging,marketing, distributing and selling fruit juices, juice blends, juice concentratespackaged for retail sale, dried cranberries and chocolate-coated cranberries under theBrands (but excluding the Companys business of producing, packaging, marketing,distributing and selling fresh and frozen cranberries, fresh fruit, cranberry sauce andcranberry juice concentrate).
Liabilitymeansany direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage,deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known orunknown, asserted or unasserted, due or undue, liquidated or unliquidated, secured orunsecured.
LienorLiens means any lien, security interest, pledge, charge, claim,mortgage, easement, restriction or any other encumbrance.
Lossesmeansall actions, suits, proceedings, hearings, investigations, charges, complaints, claims,demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,fines, costs, amounts paid in settlement, liabilities, obligations, losses, out-of-pocketexpenses, and fees, including court costs and reasonable attorneysfees andexpenses.
MaterialAdverse Effect shall mean, with respect to any Person, any effect thatindividually or taken together with other effects is materially adverse to: (i) thefinancial condition, or business of such Person and its subsidiaries, taken as a whole (provided,however, that, with respect to the representations and warranties made by theCompany, a Material Adverse Effect shall mean any effect that individually or takentogether with other effects is materially adverse to the financial condition of thePurchased Assets or to the Juice Division) or (ii) the ability of such Person toconsummate the transactions contemplated by this Agreement; provided, however,in no event shall any of the following be deemed to constitute, nor shall any of thefollowing be taken into account in determining whether there has been or will be, aMaterial Adverse Effect with respect to the Company: (a) events, changes, conditionsor effects disclosed in the exhibits, addenda and schedules hereto, including withoutlimitation the Company Disclosure Schedule; (b) events, changes, conditions oreffects consented to by Buyer in writing; (c) events, changes, conditions or effectsattributable to the acts or omissions of, or on behalf of, Buyer; (d) any change onor after the Closing Date in any law effecting the Purchased Assets, the AssumedLiabilities, the Juice Division, the Company or any of the Companys Subsidiaries orany interpretation thereof; (e) changes in the market price or trading volume ofCompanys Common Stock; (f) changes in the Company not related to the financialcondition or business of the Juice Division; (g) changes or developments in theconsumer food and beverage products industry in general; (h) changes or developmentsin the supply or availability of raw materials or packaging material, including withoutlimitation labels, bottles and other bottling and packaging materials, used in the JuiceDivision (i) changes or developments in financial or securities markets or theeconomy in general; (j) national or international political or social events, changes,conditions or effects, including without limitation those attributable to acts of war,terrorism or other conflicts; or (k) the announcement or public disclosure of thetransactions contemplated by this Agreement.
PermittedLiens shall mean: (i) Liens for Taxes not yet due and payable; (ii) Liensassociated with the Purchased Assets arising after the Closing Date.
Personshallmean an individual, corporation, partnership, joint venture, trust or unincorporatedorganization or association or other form of business enterprise or a GovernmentalEntity.
Subsidiaryshallmean any corporation, partnership, limited liability company, association or otherbusiness entity of which: (i) if a corporation, a majority of the total voting powerof shares of stock entitled (irrespective of whether, at the time, stock of any otherclass or classes of such corporation shall have or might have voting power by reason ofthe happening of any contingency) to vote in the election of directors, managers ortrustees thereof is at the time owned or controlled, directly or indirectly, by thatPerson or one or more of the other Subsidiaries of that Person or a combination thereof,or (ii) if a partnership, limited liability company, association or other businessentity, either (A) a majority of the partnership or other similar ownership interestthereof is at the time owned or controlled, directly or indirectly, by that Person or oneor more Subsidiaries of that Person or a combination thereof, or (B) such Person isa general partner, managing member or managing director of such partnership, limitedliability company, association or other entity.
Taxesshallmean all net income, capital gains, gross income, gross receipts, sales, use, transfer,ad valorem, franchise, profits, license, capital, withholding, payroll, employment,excise, goods and services, severance, stamp, occupation, premium, documentary,intangibles, property, assessments, or other governmental charges of any kind whatsoever,together with any interest, fines and any penalties, additions to tax or other additionalamounts incurred, accrued with respect thereto, assessed, charged or imposed underapplicable federal, state, local or foreign tax. References to the Company or anySubsidiary shall be deemed to include any predecessor to such Person from which theCompany or such Subsidiary incurs a liability for Taxes as a result of transfereeliability.
TaxReturns means any return, report, information return or other document(including schedules or any related or supporting information) filed or required to befiled with any Governmental Entity or other authority in connection with thedetermination, assessment or collection of any Tax or the administration of any laws,regulations or administrative requirements relating to any Tax.
Eachcapitalized term listed below is defined in the corresponding Section listed below.
|Assignment and Assumption Agreement||2.5(a)(ii)|
|Assumed Coupon Liabilities||1.2|
|Buyer Indemnified Party||8.1|
|Company Disclosure Schedule||Article III|
|Company Indemnified Party||8.2|
|Final Closing Balance Sheet||2.2(d)(iv)|
|Independent Accounting Firm||2.2(d)(iv)|
|Juice Division Trade Rights||1.1(a)(ii)|
|Preliminary Balance Sheet||2.2(d)|
|Record Retention Period||5.3|
|Seneca License Agreement||1.1(a)(ii)|
|Trade Accounts Payable||2.2(c)(iii)|
|Trade Accounts Receivable||2.2(c)(i)|
8.1. CompanysIndemnity. The Company covenants and agrees to defend, indemnify and hold harmlessBuyer, its officers, directors, employees, agents, advisers, representatives andAffiliates (each, a Buyer Indemnified Party) from and against, and payor reimburse each Buyer Indemnified Party for, any and all Losses actually sustained as aresult of:
(a) anyfailure by the Company to carry out, perform, satisfy and discharge any of its covenantsor agreements set forth in this Agreement;
(b) theExcluded Liabilities; and
(c) anybreach of the Companys representations and warranties contained in Section 3.2 (Authority),Section 3.3 (No Violation; Consents), Section 3.4 (Title to Purchased Assets),Section 3.6 (Legal Compliance; Permits), Section 3.7 (Trade Rights),Section 3.8 (Tax Matters), Section 3.9 (Contracts), Section 3.13 (Litigation),Section 3.17 (Insurance), Section 3.18 (Financial Information) and Section3.19 (Undisclosed Liabilities).
8.2. BuyersIndemnity. Buyer covenants and agrees to defend, indemnify and hold harmless Company,its officers, directors, employees, agents, advisers, representatives and Affiliates(each, a Company Indemnified Party) from and against, and pay orreimburse each Company Indemnified Party for, any and all Losses actually sustained as aresult of:
(a) anyfailure by Buyer to carry out, perform, satisfy and discharge any of its covenants oragreements set forth in this Agreement;
(b) theownership of the Purchased Assets after the Closing, subject to the agreement of theparties contained in Section 5.4(c) of this Agreement; and
(c) theAssumed Liabilities.
8.3. ProvisionsRegarding Indemnities.
(a) Notice;Third Party Claims. The indemnified party shall promptly notify the indemnifyingparty in reasonable detail of any claim, demand, action or proceeding for whichindemnification will be sought under Section 8.1 or Section 8.2 hereof,and if such claim, demand, action or proceeding is a third party claim, demand, action orproceeding, the indemnifying party will have the right at its expense to assume andcontrol the defense thereof using counsel reasonably acceptable to the indemnified party;provided, that, the indemnifying party shall continue to be entitled toassert any limitation on any claims contained herein. Should an indemnifying party soelect to assume the defense of a third party claim, the indemnifying party shall not beliable to the indemnified party for legal expenses subsequently incurred by theindemnified party in connection with the defense thereof. If the indemnifying partyassumes such defense, the indemnified party shall have the right to participate in thedefense thereof and to employ counsel, at its own expense, separate from the counselemployed by the indemnifying party, it being understood, however, that the indemnifyingparty shall control such defense. In connection with any such third party claim, demand,action or proceeding, the parties shall cooperate with each other and provide each otherwith reasonable access to relevant books and records in their possession. Theindemnifying party shall obtain the prior written consent of the indemnified party (whichconsent shall not be unreasonably withheld, conditioned or delayed) before entering intoany settlement of a claim or ceasing to defend such claim if, pursuant to or as a resultof such settlement or cessation, injunctive or other equitable relief will be imposedagainst the indemnified party or if such settlement does not expressly andunconditionally release the indemnified party from all liabilities and obligations withrespect to such claim, without prejudice except for payments that would be required to bepaid by indemnified party hereunder.
(b) TimeLimitation. Any claim or action brought under this Article VIII forbreach of a representation or warranty referenced in Section 8.1(c) above, or for breachof the Companys indemnity obligations under Section 5.5(c) above with respect tothe WARN Act, must be brought no later than August 31, 2005. Any claim or action broughtunder this Article VIII for a breach of a covenant contained herein must bebrought no later than August 31, 2005 or, in the case of the covenants contained in Section5.3, Section 5.9 and Section 9.1, no later than the expiration of thecovenants contained therein. Except for the representations and warranties of the Companydescribed in Section 8.1(c) above, all other representations and warranties containedherein shall expire on the Closing Date. The expiration of rights set forth in this Section8.3(b) shall not affect an indemnified partys right to prosecute to conclusionany claim made by such indemnified party in accordance with Article VIII hereofprior to the time that the relevant right of indemnity terminates or expires.
(i) Noindemnified party hereunder shall be entitled to receive any indemnification paymentsunder this Article VIII until the aggregate amount of Losses incurred by theindemnified party exceed $250,000 in the aggregate. If this limit is reached, all Lossesfrom the first dollar of Losses shall be recoverable.
(ii) Themaximum aggregate amount of indemnification payments under Section 8.1(a), 8.1(b) and8.1(c) (as such, in the case of payments under Section 8.1(c), relates to breaches of therepresentations or warranties contained in clauses (ii) and (iii) of Section 3.3 (NoViolation; Consents), Section 3.4(b) (Title to Purchased Assets), Section 3.6 (LegalCompliance; Permits), the second, third, fifth and sixth sentences of Section 3.7 (TradeRights), Section 3.9 (Contracts), Section 3.13 (Litigation), Section3.17 (Insurance), Section 3.18 (Financial Information) and Section 3.19 (UndisclosedLiabilities)) which Buyer shall be entitled to receive, upon the triggering of anyindemnification obligation hereunder, shall not in the aggregate exceed $450,000.
(iii) Themaximum aggregate amount of indemnification payments under Section 8.1(c), as suchrelates to breaches of the representations or warranties contained in Section 3.2 (Authority),clause (i) of Section 3.3 (No Violation; Consents), Section 3.4(a) (Title toPurchased Assets), the first and fourth sentences of Section 3.7 (Trade Rights)and Section 3.8 (Tax Matters)), which Buyer shall be entitled to receive, upon thetriggering of any indemnification obligation hereunder, shall not in the aggregate exceedthe Purchase Price.
(i) Buyeracknowledges and agrees that, from and after the Closing, its sole and exclusive remedyagainst the Company with respect to any and all claims (other than proven claims foractual fraud committed by the Company) relating (directly or indirectly) to thisAgreement or the transactions contemplated hereby shall be pursuant to the provisions setforth in this Article VIII. Buyer may not avoid the limitations on liabilityof the Company set forth herein by seeking damages for breach of contract, tort orpursuant to any other theory of liability. Notwithstanding anything contained to thecontrary in this Agreement, Buyer shall not be entitled to indemnification pursuant tothis Article VIIIwith respect to Losses or alleged Losses that are a resultof, or based upon or arising from, any claim or liability to the extent such claim orliability is taken into account in determining whether or not there will be an adjustmentto the Purchase Price pursuant to Section 2.2 hereof.
(ii) TheCompany acknowledges and agrees that, from and after the Closing, its sole and exclusiveremedy against Buyer with respect to any and all claims (other than proven claims foractual fraud by Buyer) relating (directly or indirectly) to this Agreement or thetransactions contemplated hereby shall be pursuant to the provisions set forth in this Article VIII.The Company may not avoid the limitations on liability of the Company Indemnified Partiesset forth herein by seeking damages for breach of contract, tort or pursuant to any othertheory of liability. Notwithstanding anything contained to the contrary in thisAgreement, the Company shall not be entitled to indemnification pursuant to this Article VIII withrespect to Losses or alleged Losses that are a result of, or based upon or arising from,any claim or liability to the extent such claim or liability is taken into account indetermining whether or not there will be an adjustment to the Purchase Price pursuant toSection 2.2 hereof.
(e) LostProfits. In no event shall any indemnified parties be entitled to recover or make aclaim for any amounts in respect of loss of business, lost profits, multiples of profits,multiples of earnings, multiples of cash flow, goodwill, business reputation,consequential damages or punitive damages in calculating the amount of any Losses.
9.1. Definitionof Confidential Information. The parties acknowledge that at or following theClosing, information will have been provided to, or will have come to the attention of,each party and its employees, agents, and representatives regarding the other party,which information is of value to the disclosing party and is not generally available tothe public. This information may include but is not limited to the formulations,specifications, product development histories, test results, ideas, marketing concepts,designs, drawings, techniques, personnel, technical and financial data, models, flowcharts, procedures, now-how, methods, inventions and forecasts (hereinafter collectivelyreferred to as Confidential Information). The parties furtheracknowledge that Confidential Information which primarily relates to the Purchased Assetsor the business conducted by the Company with the Purchased Assets prior to the Closingshall be considered Confidential Information of the Buyer following the Closing. However,Confidential Information does not include any information which: (i) was or becomesgenerally available to the public other than as a result of an unauthorized disclosure bythe receiving party, or (ii) comes into the possession of the receiving party afterthe date of the Closing on a nonconfidential basis from a source other than thedisclosing party or its agent, providedthat, insofar as is reasonably knownto the receiving party, the disclosure by such source does not violate anyconfidentiality agreement between such source and the disclosing party.
9.2. Useof Confidential Information. The receiving party shall use the disclosing partysConfidential Information only for the purpose of performing its obligations under thisAgreement or as contemplated in this Agreement or any agreements entered into pursuant tothis Agreement, and for no other purpose; provided, however, that the foregoingshall not prevent the Company or any successor in interest of the Company from using,without payment of any additional consideration to Buyer, that portion of BuyersConfidential Information that relates to the Purchased Assets or the business conductedby the Company with the Purchased Assets prior to the Closing to the extent necessary tocarry out its business following the Closing and provided, further, that Buyershall make available to the Company such records for use for the purposes of operatingthe Companys continuing businesses; corporate administration, record keeping andpreparation of reports required by insurers and taxing, regulatory and other governmentalauthorities; and enforcement, defense, dispute resolution and other matters concerningaccounts receivable, liabilities, claims and other matters which are, or are related to,assets other than the Purchased Assets, Assumed Liabilities, liabilities, contracts andrights and obligations not acquired or assumed by Buyer.
9.3. Confidentiality. Thereceiving party agrees to keep the disclosing partys Confidential Information confidential and shall not, without the prior written consent ofthe disclosing party, disclose such Confidential Information to any thirdparty, in whole or in part, other than for the purposes of performing itsobligations under this Agreement or any agreements entered into pursuant tothis Agreement and provided such third party has duly executed aconfidentiality agreement pursuant to which such third party has agreed tomaintain in confidence and no use or disclose such Confidential Informationother than for such purposes. The receiving party likewise shall not disclosesuch Confidential Information to any Affiliate except those who have an actualneed to know such Confidential Information for the purpose of performing thereceiving partys obligations under this Agreement or any agreementsentered into pursuant to this Agreement who are informed by the receiving partyof the confidential nature of such Confidential Information and who agree to bebound by this Agreement (Permitted Recipients). Thereceiving party shall be responsible for any breach of any provision of thisAgreement by its Permitted Recipients.
9.4. LegalRequirement to Disclose. In the event that the receiving party becomes legallycompelled to disclose any of the disclosing partys Confidential Information, thereceiving party shall provide the disclosing party with prompt notice, if lawful, so thatthe disclosing party may seek a protective order or other appropriate remedy and/or waivecompliance with the provisions of this Agreement. In the event such protective order orother remedy is not obtained, or the disclosing party waives compliance with theprovisions of this Agreement, the receiving party shall furnish only that portion of thedisclosing partys Confidential Information which the receiving party is advised byits counsel is legally required to be furnished, and the receiving party shall use itsbest efforts to obtain assurances that such Confidential Information shall be treatedconfidentially by the recipient thereof.
10.1. Notices. Allnotices, demands, consents, or other communications that are required or permitted hereunder or that are given with respect to this Agreement shall bein writing and shall be sufficient if personally delivered or sent byregistered or certified mail, facsimile message, or Federal Express or othernationally recognized overnight delivery service. Any notice shall be deemedgiven upon the earlier of the date when received at, or the fifth day after thedate when sent by registered or certified mail or the day after the date whensent by Federal Express or facsimile to, the address or facsimile number setforth below, unless such address or facsimile number is changed by writtennotice to the other parties in accordance with this Agreement:
|(a)||ifto Buyer, to:|
|Apple& Eve, LLC
2 Sea View Boulevard
Port Washington, NY11050-4634
Attn: Gordon Crane, Chief Executive Officer
Facsimile: (516) 625-9474
|Moses& Singer LLP
1301 Avenue of the Americas
New York,New York 10019
Attn: James Alterbaum, Esq.
Facsimile: (212) 554-7700
|(b)||ifto the Company, to:|
2321 West Grand Avenue
WisconsinRapids, WI 54495-8020
Attn: John Swendrowski, Chief Executive Officer
Facsimile: (715) 422-6844
|Foley& Lardner LLP
777 East Wisconsin Avenue
Attn: Steven R. Barth, Esq.
10.2 Interpretation. When a reference is made in this Agreementto exhibits or schedules, such reference shall be to an exhibit or schedule to thisAgreement unless otherwise indicated. The words include, includes andincluding when used herein shall be deemed in each case to be followed by thewords without limitation. The phrase made available in thisAgreement shall mean that the information referred to has been made available ifrequested by the party to whom such information is to be made available. The table ofcontents and headings contained in this Agreement are for reference purposes only andshall not affect in any way the meaning or interpretation of this Agreement.
10.3 Counterparts. This Agreement may be executed in one ormore counterparts, all of which shall be considered one and the same agreement and shallbecome effective when one or more counterparts have been signed by each of the partiesand delivered to the other parties, it being understood that all parties need not signthe same counterpart. Any counterpart may be executed and delivered by facsimilesignature and such facsimile signature shall be deemed an original.
10.4 Entire Agreement; Nonassignability; Parties in Interest.This Agreement, together with the exhibits and the schedules attached hereto, includingthe Company Disclosure Schedule: (a) constitute the entire agreement among the partieswith respect to the subject matter hereof and supersede all prior agreements andunderstandings, both written and oral, among the parties with respect to the subjectmatter hereof which shall continue in full force and effect, and shall survive anytermination of this Agreement or the Closing, in accordance with its terms; (b) are notintended to confer upon any other Person any rights or remedies hereunder; and (c) shallnot be assigned by operation of law or otherwise except as otherwise specificallyprovided.
10.5 Expenses. All costs and expenses incurred in connectionwith this Agreement and the transactions contemplated hereby (including, withoutlimitation, the fees and expenses of its advisers, accountants and legal counsel), shallbe paid by the party incurring such expense.
10.6 Tax Matters. All transfer, documentary, sales,use, stamp, registration and other such Taxes, and all conveyance fees, recording chargesand other fees and charges (including any penalties and interest) incurred in connectionwith the consummation of the transactions contemplated by this Agreement shall be borneby Buyer and shall be paid when due. The parties will file all necessary Tax Returns andother documentation with respect to all such Taxes, fees and charges, and, if required byapplicable law, the parties will, and will cause their Affiliates to, join in theexecution of any such Tax Returns and other documentation.
10.7 Amendment. Any provision of this Agreement may be amendedonly by the written consent of the Company and Buyer. Any agreement on the part of aparty to any amendment shall only be valid if set forth in an instrument in writingsigned on behalf of such party.
10.8 Severability. In the event that any provision of thisAgreement, or the application thereof, becomes or is declared by a court of competentjurisdiction to be illegal, void or unenforceable, the remainder of this Agreement willcontinue in full force and effect and the application of such provision to other Personsor circumstances will be interpreted so as reasonably to effect the intent of the partieshereto. The parties further agree to replace such void or unenforceable provision of thisAgreement with a valid and enforceable provision that will achieve, to the extentpossible, the economic, business and other purposes of such void or unenforceableprovision.
10.9 Remedies Cumulative. Except as otherwise provided herein,any and all remedies herein expressly conferred upon a party will be deemed cumulativewith and not exclusive of any other remedy conferred hereby, or by law or equity uponsuch party, and the exercise by a party of any one remedy will not preclude the exerciseof any other remedy.
10.10 Governing Law; Waiver of Jury Trial. This Agreement shallbe governed by and construed in accordance with the laws of the State of New York, otherthan those which would give effect to the substantive laws of another jurisdiction. EACHOF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTIONOR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTY IN RESPECT OF ITS, HIS OR HEROBLIGATIONS HEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.11 Rules of Construction. The parties hereto agree that theyhave been represented by counsel during the negotiation, preparation and execution ofthis Agreement and, therefore, waive the application of any law, regulation, holding orrule of construction providing that ambiguities in an agreement or other document will beconstrued against the party drafting such agreement or document.
10.12 No Right of Offset. Neither party shall have the right tooffset any amount owed to such party against any amount it owes pursuant to thisAgreement or the transactions contemplated hereby.
10.13 Further Assurances. Each of the parties to the Agreementshall use commercially reasonable efforts to effect the transactions contemplated hereby.Each party hereto, from and after the Closing, and at the reasonable request of anotherparty hereto, shall execute and deliver such other instruments, including withoutlimitation, stockholder consent to the transactions contemplated by this Agreement, anddo and perform such other acts and things, as may be necessary or desirable for effectingcompletely the consummation of this Agreement and the transactions contemplated hereby.
10.14 Deliveries to Buyer. Buyer agrees and acknowledges thatall documents or other items delivered to Buyers representatives (including,without limitation, Moses & Singer LLP and Buyers accountants) shall be deemedto be delivered to Buyer for all purposes hereunder.
10.15 No Third Party Beneficiaries. Except as expressly providedhrein, this Agreement shall not confer any rights or remedies upon any Person other thanthe parties hereto and their respective successors and permitted assigns, personalrepresentatives, heirs and estates, as the case may be.
INWITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement to beexecuted and delivered by their respective duly authorized officers as of the date firstwritten above.
APPLE & EVE, LLC, a
Delaware limited liability company
NORTHLAND CRANBERRIES, INC.,
a Wisconsin corporation
|By:||/s/ Jonathan Alpert
||By:||/s/ John Swendrowski
|Jonathan Alpert||John Swendrowski|
|Title||Chief Financial Officer
||Title||Chairman and Chief Executive Officer
|SOLELY WITH RESPECT TO THE
ASSIGNMENT OFOF THE NCI MARKS:
NCI FOODS, LLC, a Wisconsin
limited liability company
|By:||/s/ John Swendrowski
[Signature Page toAsset Purchase Agreement]