ASSET PURCHASE AGREEMENT

Exhibit 2.1

ASSET PURCHASE AGREEMENT

by and between

GENERAL MILLS, INC.,

and

DIAMOND FOODS, INC.

made as of

August 13, 2008

Table of Contents

Table of Defined Terms

Exhibits

Exhibit A – Form of Transition Services Agreement
Exhibit B – Form of Bill of Sale
Exhibit C – Form of Assignment and Assumption Agreement
Exhibit D – Form of Limited Warranty Deed
Exhibit E – Form of Microwave Sciences Sublicense
Exhibit F – Form of Sucralose License
Exhibit G-1 – Form of Domain Name Transfer Agreement
Exhibit G-2 – Form of Patent Assignment Agreement
Exhibit G-3 – Form of Trademark Assignment Agreement

ASSET PURCHASE AGREEMENT

     This ASSET PURCHASE AGREEMENT (this “ Agreement ”), entered into as of August 13, 2008, is made by and between General Mills, Inc., a Delaware corporation (“ Seller ”), and Diamond Foods, Inc., a Delaware corporation (“ Buyer ”). Seller and Buyer are sometimes referred to herein collectively as the “ Parties ” and individually as a “ Party .”

      WHEREAS , Seller desires to sell, and Buyer desires to buy, certain assets of Seller related to the manufacturing (through third parties), producing (through third parties), marketing, selling and distribution of microwave popcorn under the brand name “Pop Secret,” (the “ Business ”), and Buyer is willing to assume certain specified liabilities of Seller, in each case, on the terms and subject to the conditions set forth in this Agreement.

      NOW, THEREFORE , in consideration of the foregoing premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows:

ARTICLE I. PURCHASE AND SALE

     1.01 Purchase and Sale of Assets.

          (a) Purchased Assets . At the Closing and on the terms and subject to the conditions set forth in this Agreement, Seller agrees to convey and sell, or cause its wholly-owned subsidiaries to convey and sell, to Buyer, free and clear of all Encumbrances other than Permitted Encumbrances, and Buyer agrees to buy from Seller, all of Seller’s right, title and interest in and to (i) the specified assets which are set forth on Schedule 1.01(a) to this Agreement and (ii) the Pre-Paid Assets to be purchased by Buyer from Seller pursuant to Section 6.03(c) (collectively, the “ Purchased Assets ”).

          (b) Excluded Assets . All assets of Seller not specifically set forth on Schedule 1.01(a) hereof shall be retained by Seller and are not being acquired by Buyer (the “ Excluded Assets ”), including, but not limited to, those Excluded Assets which are set forth on Schedule 1.01(b) to this Agreement.

          (c) Assumed Liabilities . Buyer shall assume, and agree to pay, perform and discharge when due, the liabilities and obligations of Seller which are set forth on Schedule 1.01(c) to this Agreement (the “ Assumed Liabilities ”).

          (d) Excluded Liabilities . Buyer is not assuming, and shall not be deemed to have assumed, any liability or obligation of Seller which is not set forth on Schedule 1.01(c) to this Agreement as an Assumed Liability (the “ Excluded Liabilities ”), including, but not limited to, the Excluded Liabilities which are set forth on Schedule 1.01(d) to this Agreement.

     1.02 Purchase Price . The aggregate consideration to be paid by Buyer to Seller shall equal one hundred ninety million United States Dollars ($190,000,000) (the “ Purchase Price ”), subject to the Adjustment as set forth in Section 1.04 . Notwithstanding anything to the contrary

in this Agreement, the Purchase Price shall not include any Pre-Paid Amounts to be paid from Buyer to Seller pursuant to Section 6.03(c) .

     1.03 The Closing .

          (a) The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Dorsey & Whitney LLP at 50 South Sixth Street, Minneapolis, Minnesota, upon the later of (i) five (5) business days after the date on which the conditions set forth in Article VII have been satisfied or (ii) at such other time or place as may be agreed to by Seller and Buyer. The date on which the Closing occurs is referred to herein as the “ Closing Date .” The Closing shall be deemed to be effective as of 12:01 a.m. CST on the Closing Date (the “ Effective Time ”).

          (b) At the Closing, the Parties shall deliver to each other the documents required to be delivered at the Closing pursuant to Article VII hereof.

     1.04 Purchase Price Adjustment . Following the Closing Date, the Purchase Price shall be adjusted, if at all, as set forth below:

          (a) Seller shall prepare and deliver to Buyer, within 45 days after the Closing Date, a statement of the Inventory Amount (as defined in Section 1.05(a) ) as of the Effective Time (the “ Inventory Statement ”) which shall set forth an adjustment amount determined by calculating (i) the Inventory Amount and (ii) the difference between the Inventory Amount and $9,000,000 (the “ Target Inventory Amount ”) (such difference (whether positive or negative) being hereinafter referred to as the “ Adjustment ”). The Inventory Statement, the Inventory Amount and the Adjustment shall be prepared in a manner consistent with the procedures set forth on Schedule 1.04 hereto. During the 45-day period following such initial 45-day period, Seller will provide Buyer with reasonable access to its books and records related to the Business, including records indicating the age of the finished goods inventory, to the extent necessary for Buyer to evaluate the Inventory Statement to determine whether to deliver an Objection Notice. Seller shall give Buyer five (5) business days notice before any physical count of the inventory, which physical count will occur on the Closing Date and at the locations identified on Schedule 1.04 hereto, underlying the Inventory Statement, and Buyer and its outside auditors shall have the right to be present at such physical count of the inventory.

          (b) On or prior to the 45 ^th day following Seller’s delivery of the Inventory Statement, Buyer may give Seller a written notice stating in reasonable detail Buyer’s objections (an “ Objection Notice ”) to the calculation of the Adjustment. Any Objection Notice shall specify in reasonable detail the dollar amount of any objection and the basis therefor. If Buyer does not give Seller an Objection Notice within such 45-day period, then the Inventory Statement will be conclusive and binding upon the Parties and the Adjustment will be final and binding upon the Parties for purposes of calculating the Purchase Price under this Agreement.

          (c) Following Seller’s receipt of any Objection Notice, Seller and Buyer shall negotiate in good faith to resolve such dispute as promptly as practicable. In the event that such negotiations result in a resolution of the dispute, Seller and Buyer shall agree in writing to an Adjustment that shall be binding as to all Parties. In the event that Seller and Buyer fail to agree

on any of Buyer’s proposed adjustments set forth in the Objection Notice within 30 days after Seller’s receipt of the Objection Notice (or such longer period as Seller and Buyer may mutually agree in writing), Seller and Buyer agree that a mutually acceptable accounting firm of nationally recognized standing (the “ Independent Auditors ”) shall, within the 30-day period immediately following referral of the Inventory Statement and Objection Notice to the Independent Auditors, make the final determination of the Adjustment in accordance with the terms of this Agreement. Seller and Buyer each shall provide the Independent Auditors with their respective determinations of the Adjustment and the Independent Auditors shall only review and rely upon those items set forth in the Objection Notice and any responses by Seller to such Objection Notice. The Independent Auditors shall make an independent determination of only those items set forth in the Objection Notice and not resolved by the mutual agreement of the Parties. Based on such determination, the Independent Auditors shall determine the resulting Adjustment that shall be final and binding on Seller and Buyer; provided that such independent determination shall be within the range created by Seller’s and Buyer’s proposals set forth in the Adjustment and the Objection Notice. If the Independent Auditors’ determination of any Adjustment is outside of the range proposed by Seller and Buyer in the Inventory Statement and the Objection Notice, then the Party whose proposed Adjustment was closer to that of the Independent Auditors shall be final and binding on Seller and Buyer.

          (d) Promptly after the Inventory Statement and the Adjustment are finally determined and become final and binding on the Parties under this Section 1.04 , Seller or the Independent Auditors (if applicable) shall recalculate the Purchase Price by adding such final and binding determination of the Adjustment (which for the avoidance of doubt may be positive or negative) to the Purchase Price (the result of such recalculation being referred to herein as the “ Final Purchase Price ”). If the Final Purchase Price exceeds the Purchase Price (i.e., because the Adjustment was positive) by an amount greater than $200,000, then Buyer shall pay to Seller, within seven (7) business days following the Settlement Date, an amount equal to the full amount by which the Final Purchase Price exceeds the Purchase Price. If the Purchase Price exceeds the Final Purchase Price (i.e., because the Adjustment was negative) by an amount greater than $200,000, then Seller shall pay to Buyer, within seven (7) business days following the Settlement Date, an amount equal to the full amount by which the Purchase Price exceeds the Final Purchase Price. If the difference between the Final Purchase Price and the Purchase Price is less than or equal to $200,000, whether positive or negative, then the Final Purchase Price shall be deemed to be equal to the Purchase Price for purposes of this Agreement and no further payment shall be due from any Party to the others under this Section 1.04 .

          (e) If a payment is made by any Party pursuant to Section 1.04(d) , the fees, costs and expenses of the Independent Auditors shall be paid by the Party making such payment. If no payment is due pursuant to Section 1.04(d) , one half of the fees, costs and expenses of the Independent Auditors shall be paid by each of Buyer and Seller.

     1.05 Certain Definitions . As used in this Agreement:

          (a) “ Encumbrance ” means, with respect to any asset, any mortgage, deed of trust, lien, pledge, charge, security interest, title retention device, conditional sale or other security arrangement, collateral assignment, claim, charge, adverse claim of title, ownership or right to use, restriction or other encumbrance of any kind in respect of such asset (including any

restriction on (i) the receipt of any income derived from such asset, (ii) the use of such asset, and (iii) the possession, exercise or transfer of any other attribute of ownership of such asset).

          (b) “ Guaranteed Corn Amount ” shall be included in the Purchase Price and shall mean an amount of raw material corn with a value, as of the Effective Time which approximates the amount of raw material corn necessary for one month of production in accordance with the past practices of the Business. The Guaranteed Corn Amount is set forth on Schedule 1.05 hereto. The value of the raw material corn, for purposes of calculating the Guaranteed Corn Amount, shall be based on the prices set forth in the 2007 Weaver Crop Contract and the amount of raw material corn shall be determined in a manner consistent with the procedures set forth on Schedule 1.04 .

          (c) “ Inventory Amount ” shall mean the physical quantity, determined as of the Effective Time, multiplied by the appropriate price therefor, of all raw materials ( including the Guaranteed Corn Amount, the appropriate price for which shall be the price set forth in the 2007 Weaver Crop Contract, but excluding the Pre-Paid Corn Amount), work in process, finished goods having at least 50% of the Standard Shelf Life for such finished goods and non-obsolete packaging materials of Seller relating to the Business and included in the Purchased Assets (the “ Inventory ”). The total value of the Inventory Amount shall be determined in a manner consistent with the procedures set forth on Schedule 1.04 hereto. The Inventory Amount shall not include any Pre-Paid Amounts to be paid by Buyer to Seller in accordance with Section 6.03(c) . As used herein, the “Standard Shelf Life” of finished goods shall be such shelf life identified in accordance with the Seller’s policies in effect as of the date of this Agreement. The Standard Shelf Life for all finished goods is set forth on Schedule 1.04 .

          (d) “ Knowledge of Seller ” or Seller’s “ Knowledge ” means the knowledge of the following persons, with respect to their respective areas of expertise except for those persons listed in clauses (xiii) through (xvi), whose knowledge shall not be limited any particular area with respect to Seller: (i) Kim Nelson (President of the division containing the Business), (ii) Beth Shuman (Director of Financial Operations of the division containing the Business), (iii) Billie Fienhage (Director of Operations of the division containing the Business), (iv) Howard Riebling (former Trade Director of the division containing the Business), (v) Greg Kaihoi (Seller’s Chief Trademark Counsel), (vi) Douglas Taylor (Seller’s Chief Patent Counsel), (vii) John O’Toole (Seller’s Senior Patent Counsel), (viii) Al Rodrigues (Director of Alliances), (ix) Steve Woo (corn sourcing and purchasing), (x) Mike Wrobel (other sourcing), (xi) Helen Kurtz (Director of Marketing), (xii) Judy Dudziak (Research & Development), (xiii) Cam Hoang (Counsel and Assistant Secretary), (xiv) Deborah Grocholski (Associate General Counsel), (xv) Laura Calhoun (Corporate Development) and (xvi) Clayton Rudolph (Corporate Development).

          (e) “ Material Adverse Effect ” means any change, development, occurrence, effect or condition that, individually or in the aggregate, has had, or is reasonably likely to have, a material and adverse effect on the Purchased Assets, Assumed Liabilities, financial condition or results of operations of the Business; provided that, none of the following shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Effect: any adverse change, event, development, or effect arising from or relating to (1) general business or economic conditions in the United States (to the extent that any such change, event, development or effect does not have a disproportionate effect on the

Business as compared to its competitors), (2) changes in the food industry in general (to the extent that any such change, event, development or effect does not have a disproportionate effect on the Business as compared to its competitors), (3) changes in laws, rules, regulations, orders, or other binding directives issued by any governmental authority (to the extent that any such change, is not applicable or binding uniquely or disproportionately on the Business), (4) the taking of any action contemplated or required to be taken by the terms of this Agreement and the other agreements contemplated hereby or otherwise taken at Buyer’s request and/or (5) the subsequent public announcement of the transactions contemplated by this Agreement or any of the other agreements contemplated hereby.

          (f) “ Pre-Paid Corn Amount ” shall not be included in the Purchase Price and shall mean the value, as of the Effective Time, of the raw material corn purchased by Seller under the 2007 Weaver Crop Contract (the “ Weaver Pre-Paid Corn ”), minus the Guaranteed Corn Amount. The value of the raw material corn, for purposes of calculating the Pre-Paid Corn Amount, shall be based on the prices set forth in the 2007 Weaver Crop Contract and the amount of raw material corn to be valued shall be determined in a manner consistent with the procedures set forth on Schedule 1.04 . The amount of Weaver Pre-Paid Corn and the calculation of the Prepaid Corn Amount are set forth on Schedule 1.05 . The Pre-Paid Corn Amount shall be paid by Buyer to Seller in accordance with Section 6.03(c) .

          (g) “ Settlement Date ” shall mean the date on which the Inventory Statement and Adjustment are finally determined pursuant to Section 1.04 .

     1.06 Allocation . Within sixty (60) days following the Closing Date, or, if the May 25, 2008 audited financial statements related to the Business (the “ Audited 2008 Financial Statements ”) have not been delivered by Seller to Buyer within the sixty (60) days following the Closing Date, then within five (5) days of delivery of the Audited 2008 Financial Statements by Seller to Buyer, Buyer and Seller shall in good faith agree upon an allocation of the Purchase Price among the Purchased Assets in accordance with Section 1060 of the Interval Revenue Code of 1986, as amended and the Treasury regulations thereunder (the “ Code ”) and any similar provision of state, local or foreign law, as applicable (the “ Allocation ”). In the event that Buyer and Seller cannot agree upon the Allocation within such period, all items of disagreement shall be submitted to an Independent Auditor for resolution, whose determination shall be provided with 30 days following submission and shall be final and binding on Seller and Buyer. The fees and expenses of the Independent Auditor shall be paid one-half each by Buyer and Seller in such event. In the event that that the Final Purchase Price has not been determined in accordance with Section 1.04 by the later of sixty (60) days following the Closing Date or five (5) days after the delivery of the Audited 2008 Financial Statements, the Allocation shall remain subject to adjustment. The Parties shall file their respective Tax returns (including, but not limited to, Internal Revenue Service Form 8594) in all respects and for all purposes consistent with the Allocation, and no party shall take any position (whether in audits, tax returns or otherwise) that is inconsistent with the Allocation unless required to do so by applicable law. Buyer and Seller each agree to provide the other a copy of their Form 8594 promptly after the filing thereof.

ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller hereby represents and warrants to Buyer that, except as set forth in the disclosure schedules delivered by Seller to Buyer (the “ Disclosure Schedules ”) (which Disclosure Schedules set forth the exceptions to the representations and warranties contained in this Article II under captions referencing the sections and subsections, if any, of this Agreement to which such exceptions apply; provided , however, that disclosure of any fact or item in the Disclosure Schedules shall, should the existence of such fact or item be reasonably applicable from the actual text of such disclosure to another section or subsection of this Agreement, such disclosure shall also be deemed disclosed with respect to such other section of this Agreement) (representations set forth in the Disclosure Schedules shall be deemed to be representations and warranties made under this Agreement for all purposes hereunder):

     2.01 Formation and Corporate Power . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has the requisite power and authority to enter into this Agreement and any other agreement, contract or instrument to be delivered and/or entered into in connection with the transactions contemplated by this Agreement (collectively, along with this Agreement, the “ Transaction Documents ”) to which it is a party and perform its obligations hereunder and thereunder.

     2.02 Execution, Delivery; Valid and Binding Agreement . The execution, delivery and performance by Seller of this Agreement and any other Transaction Document to which it is a party has been duly and validly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by Seller and this Agreement is, and each other Transaction Document to which Seller is a party, when executed and delivered by or on behalf of Seller and the other parties thereto, shall constitute the valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to any applicable bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent transfer or other similar law affecting creditors’ rights generally, and subject to principles of equity as would customarily be applied by a judicial body acting in equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, laches, election of remedies, estoppel and other similar doctrines affecting the enforceability of agreements generally, regardless of whether considered in a proceeding in equity or at law (the foregoing list of exceptions is hereinafter referred to as the “ Equitable Remedies Exception ”).

     2.03 No Breach . The execution, delivery and performance by Seller of this Agreement and any other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby or thereby do not conflict with or result in any breach of any of the provisions of, constitute a default under, result in a violation of, result in the creation of a right of termination or acceleration or any Encumbrance upon the Purchased Assets under the provisions of the certificate of incorporation or bylaws of Seller or any of its Affiliates, or any indenture, mortgage, lease, loan agreement, supply agreement or other agreement or instrument by which Seller is bound or affected, or any law, statute, rule or regulation or order, judgment or decree to which Seller, the Business (as operated by Seller), or a Purchased Asset is subject, except (i) as set forth on Section 2.03 of the Disclosure Schedules and (ii) as would not reasonably be expected to prohibit or materially delay the closing of the transactions contemplated by this Agreement.

     2.04 Governmental Authority; Consents . Seller is not required to submit any report or other filing with any governmental authority in connection with the execution or delivery by it of this Agreement or any other Transaction Document to which it is a party or the consummation of the transactions contemplated hereby or thereby, or performance of its obligations hereunder or thereunder, and no consent, approval or authorization of any governmental or regulatory authority is required to be obtained by Seller in connection with its execution, delivery and performance of this Agreement or any other Transaction Document to which it is a party or the transactions contemplated hereby or thereby, except (i) in connection with the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), or (ii) as would not reasonably be expected to prohibit or materially delay the closing of the transactions contemplated by this Agreement.

     2.05 Financial Statements; Absence of Certain Changes .

          (a) Attached as Section 2.05(a) of the Disclosure Schedules are copies of the audited statements of net assets and the related profit and loss statements relating to the Business as of May 28, 2006 and May 27, 2007 (the “ Audited Statements ”), and the unaudited profit and loss statements relating to the Business as of May 25, 2008 (the “ Latest P&L Statement ” and, together with the Audited Statements, the “ P&L Statements ”). The Audited Statements (i) are derived from the books and records of Seller, (ii) have been prepared in accordance with U.S. generally accepted accounting principles (“ GAAP ”), consistently applied by Seller and (iii) fairly present, in all material respects, the revenues and expenses of the Business (excluding income tax expenses and interest expense on corporate borrowings) for the periods indicated in such statements. The Latest P&L Statement (i) is derived from the books and records of Seller and (ii) fairly presents, in all material respects, the revenues and direct expenses of the Business (excluding income tax expenses and interest expense on corporate borrowings) for the periods indicated in such statement. The Latest P&L Statement does not include certain expenses related to the operation of the Business such as indirect or allocated corporate expenses.

          (b) Since May 26, 2008, Seller has conducted the Business only in the ordinary course consistent with past practice and (i) there has not occurred a Material Adverse Effect on the Business, (ii) the Business has not made or entered into any contract or letter of intent with respect to any acquisition, sale or transfer of any Purchased Asset other than in the ordinary course of the Business, (iii) except as required by GAAP, there has not occurred any change in accounting methods or practices (including any change in depreciation or amortization policies or rates or revenue recognition policies) by Seller in connection with the Business, (iv) Seller, in connection with the Business, has not entered into, amended or terminated any of the Purchased Contracts other than customer purchase orders, vendor purchase orders and Trade Programs and Consumer Programs, each of which may be entered into, amended or terminated in the ordinary course of the Business, and the supply agreement set forth on Section 2.05(b) of the Disclosure Schedules, which may be entered into on substantially the terms set forth on Section 2.05(b) of the Disclosure Schedules and there has not occurred any default under any of the Purchased Contracts, (v) Seller, in connection with the Business, has not made any material change in the manner in which it extends discounts, credits or warranties to customers or otherwise deals with its customers and (vi) there has been no material damage, destruction or loss with regard to the Purchased Equipment, whether or not covered by insurance.

     2.06 Title to Inventory and Purchased Equipment .

          (a) Except as described in Section 2.06 of the Disclosure Schedules, as of the date hereof, Seller or its wholly owned subsidiaries own good and marketable title to the Inventory, Weaver Pre-Paid Corn and Purchased Equipment, free of all Encumbrances, other than Permitted Encumbrances. As of the Closing Date, Seller or its wholly owned subsidiaries will own good and marketable title to the Inventory, Purchased Equipment and Building, free of all Encumbrances, other than Permitted Encumbrances.

     (b) Environmental Matters.

     (i) As used in this Agreement, the following terms shall have the meanings indicated below:

     (A) “ Building ” shall mean the facility located at 406 West Landess St., Van Buren, Indiana 46691.

     (B) “ Environmental Laws ” shall mean any federal, state or local laws, ordinances, codes, regulations, rules, policies and orders that are intended to assure the protection of the environment, or that classify, regulate, call for the remediation of, require reporting with respect to, or list or define air, water, groundwater, solid waste, hazardous or toxic substances, materials, wastes, pollutants or contaminants.

     (C) “ Hazardous Materials ” shall mean any toxic or hazardous substance, material or waste or any pollutant or contaminant, or infectious or radioactive substance, material or waste defined in or regulated under any Environmental Laws, but excludes office and janitorial supplies properly maintained.

     (ii) With respect to the Building, (i) as of the Effective Time, Seller will have good and marketable fee simple, title, free and clear of all Encumbrances other than Permitted Encumbrances, (ii) Seller has not leased or otherwise granted to any Person, other than Weaver Popcorn Company, Inc. (“ Weaver ”), the right to use or occupy the Building or any portion thereof, (iii) there are no outstanding options, rights of first offer or rights of first refusal to purchase the Building or any portion thereof or interest therein, and (iv) there is no condemnation or other proceeding in eminent domain pending or, to Seller’s Knowledge, threatened, affecting the Building or any portion thereof or interest therein.

     (iii) (A) To Seller’s Knowledge, all Hazardous Materials and wastes produced or used by the Business in the past three (3) years have been disposed of in accordance in all material respects with all Environmental Laws; (B) within the past three (3) years, Seller has not received any written notice of any noncompliance of the Building or its present operations with Environmental Laws; (C) to Seller’s Knowledge, no notices, administrative actions or suits are pending or threatened relating to an actual or alleged violation of any applicable Environmental Laws by Seller in connection with the Business; (D) to Seller’s Knowledge, Seller is not a potentially responsible party under

the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or any analogous state, local or foreign laws in connection with the Business; (E) to Seller’s Knowledge, there have not been in the past three (3) years, and are not now, any Hazardous Materials on, under or migrating to or from the Building; (F) to Seller’s Knowledge, there have not been in the past three (3) years, and are not now, any underground tanks or underground improvements at, on or under the Building, including treatment or storage tanks, sumps, or water, gas or oil wells; and (G) within the past three (3) years, to Seller’s Knowledge, the Building and Seller’s uses and activities therein have materially complied with all Environmental Laws

          (c) For purposes of this Agreement, “ Permitted Encumbrances ” means (i) Encumbrances for Taxes (and assessments and other governmental charges or levies) not yet due and payable or being contested in good faith by appropriate proceedings; (ii) warehousemen’s, mechanic’s, materialmen’s, landlord’s, carriers’ liens or other like Encumbrances (including such Encumbrances created by operation of law); (iii) any Encumbrances expressly created under the provisions of this Agreement or any other Transaction Document; and (iv) such other imperfections in title, charges, restrictions or other encumbrances which do not materially detract from, materially diminish the value of or materially interfere with the present use of the affected property.

     2.07 Contracts and Commitments .

          (a) Seller has delivered to Buyer a correct and complete copy of each Purchased Contract set forth on Schedule 1.01(a)(1) and a written summary of each oral Purchased Contract referred to in Schedule 1.01(a)(1) . With respect to each Purchased Contract:

     (i) the Purchased Contract is valid and enforceable against Seller, and, to the Knowledge of Seller, against each other individual, corporation, partnership, association, limited liability company, trust, unincorporated organization, other entity or group (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended) (each, a “ Person ”) party thereto, subject to the Equitable Remedies Exception;

     (ii) neither Seller nor, to the Knowledge of Seller, any other party is in material breach of any Purchased Contract; and

     (iii) Seller has not and, to its Knowledge, no other party has repudiated any provision of any Purchased Contract.

          (b) Except for customer purchase orders accepted in the ordinary course of the Business, Seller is not party to or bound by any material distributor, dealer, sales representative or other similar contract relating to the Business in the United States, other than those that can be terminated on thirty (30) days notice without penalty.

          (c) Except as set forth on Section 2.07(c) of the Disclosure Schedules, neither Seller nor any of its Affiliates is bound to or bound by any of the following contracts:

     (i) any contract material to the Business or Purchased Assets under which (A) any Intellectual Property licenses are granted to Seller or its Affiliates (other than licenses

to Seller of off-the-shelf software available at retail), (B) any covenants not to sue are granted to Seller or its Affiliates, or (C) any rights or options to acquire Intellectual Property (by license or otherwise) are granted to Seller or its Affiliates;

     (ii) any contract material to the Business or Purchased Assets under which (A) any Intellectual Property licenses are granted by Seller or its Affiliates (or are obligated to be granted by Seller or its Affiliates), (B) any covenants not to sue are granted by Seller or its Affiliates, or (C) any rights or options to acquire Intellectual Property (by license or otherwise) are granted by Seller or its Affiliates; and

     (iii) any contract (A) concerning nonsolicitation of customers of the Business; (B) that would limit the freedom, immediately after the Closing, of a purchaser of the Purchased Assets to engage, participate or compete with any other Person in any line of business, or to make use of any Purchased Intellectual Property in the United States and/or Canada; or (C) granting most favored nation pricing, exclusive sales, distribution, marketing or other exclusive rights, rights of refusal, rights of first negotiation or similar rights and/or terms to any Person in the United States and/or Canada, which terms would be applicable to a purchaser of the Purchased Assets immediately after the Closing.

     2.08 Intellectual Property Rights .

          (a) Schedule 1.01(a)(6)(a) , (b) , and (c) lists all United States, international and foreign patents, patent applications, registered trademarks and service marks, trademark and service mark applications, intent to use applications, or other applications or registrations related to trademarks and service marks, corporate names, registered copyrights, copyright applications and domain names owned by, filed in the name of, assigned to or applied for by, Seller that are used exclusively in connection with the Business, whether alone or jointly with any other Person, in each case listing, as applicable, (i) the jurisdiction where the registration is located, (ii) the patent or registration number, (iii) in the case of any jointly-owned Registered Intellectual Property, the name(s) of any other joint owner(s), and (iv) except as set forth on Section 2.08(a)(iv) of the Disclosure Schedules, there are no actions that must be taken by Buyer within ninety (90) days after the Effective Time for (A) the payment of any registration, maintenance or renewal fees or (B) the filing of any documents, applications or certificates for purposes of prosecuting, continuing (through the filing of a request for continued examination, continuation or continuation-in-part patent application), maintaining, perfecting or preserving or renewing any rights in the foregoing Intellectual Property (collectively, the “ Registered Intellectual Property ”). The Registered Intellectual Property and the Unregistered Intellectual Property together constitute the “ Purchased Intellectual Property .” The Purchased Intellectual Property is, to the Knowledge of Seller, valid and enforceable, subject to the Equitable Remedies Exception, by Seller (or in the case of applications, applied for). All necessary registration, maintenance and renewal fees due on or prior to the Effective Time in connection with the Registered Intellectual Property have been made and all necessary documents, recordations and certificates in connection with the Registered Intellectual Property have been filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of filing or maintaining such Registered Intellectual Property. No interference, opposition, reissue, reexamination, or other proceeding of any nature (other than prosecution by Seller of applications and registrations for Registered Intellectual Property before

the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions) is pending or, to Seller’s Knowledge, threatened, in which the scope, validity, or enforceability of any Registered Intellectual Property is being contested or challenged.

          (b) Seller exclusively owns all right, title and interest in and to the Purchased Intellectual Property, free and clear of all Encumbrances, except Permitted Encumbrances. Seller has not transferred ownership of any Purchased Intellectual Property to any other Person.

          (c) To the Knowledge of Seller, no Person is infringing or misappropriating any Purchased Intellectual Property. Neither Seller nor, to Seller’s Knowledge, any of its Affiliates has received written notice of any claim by any third party contesting the validity of any Purchased Intellectual Property which is currently outstanding. Neither Seller, nor, to Seller’s Knowledge, any of its Affiliates has received written notice of any claim of an infringement, misappropriation or violation by Seller or its Affiliates of any Intellectual Property rights of any third parties relating to the Business or the Purchased Assets. Neither Seller nor, to Seller’s Knowledge, any of its Affiliates has received written notice that Seller has infringed, misappropriated or otherwise violated any such Intellectual Property rights and, to Seller’s Knowledge, the operation of the Business as (i) currently conducted and (ii) planned to be conducted with respect to the items set forth on Section 2.08(c)(ii) of the Disclosure Schedules does not infringe or misappropriate any third party Intellectual Property right.

          (d) Seller has taken reasonable steps, consistent with the protections utilized by Seller to protect the same type of information in the ordinary course of Seller’s business, to protect their rights in the material confidential information and trade secrets constituting the Purchased Intellectual Property (“ Confidential Information ”). To the Knowledge of Seller, Seller has not experienced any material breach of security or otherwise unauthorized access by third parties to the Confidential Information, including any personally identifiable information, in the possession, custody or control of Seller.

          (e) There are no royalties, honoraria, fees or other payments payable by Seller or any of its Affiliates to any Person (other than salaries or other payments payable to employees, consultants or independent contractors not contingent on or related to use of their work product) as a result of the ownership, use, license-out, sale, marketing, advertising or disposition of any Purchased Intellectual Property.

          (f) Seller has complied, in all material respects, with all applicable Laws and Orders and their respective internal privacy policies relating to the use, collection, storage, disclosure and transfer of any personally identifiable information collected in connection with the Business by Seller or by third parties having authorized access to the records of Seller. The execution, delivery and performance of this Agreement and the Transaction Documents, will comply, in all material respects, with all applicable Laws and Orders relating to privacy and with Seller’s privacy policies.

          (g) For purposes of this Agreement, the term “ Intellectual Property ” means any or all of the following and all rights in, arising out of or associated therewith anywhere in the world: all patents (including all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof) and patent rights, trademarks and trademark

rights, trade names and trade name rights, service marks and service mark rights, utility models and utility model rights, copyrights, mask work rights, brand names, trade dress, product designs, product packaging, business and product names, logos, slogans, rights of publicity, trade secrets, inventions (whether patentable or not), invention disclosures, improvements, processes, formulae, industrial models, processes, designs, specifications, technology, methodologies, computer software (including all source code and object code), firmware, development tools, flow charts, annotations, all Web addresses, sites and domain names, all data bases and data collections and all rights therein, any other confidential and proprietary right or information, whether or not subject to statutory registration, and all related technical information, manufacturing, engineering and technical drawings, know how and all pending applications for and registrations of (and all rights to apply for and register) patents, utility models, trademarks, service marks and copyrights, and the right to sue for past infringement, if any, in connection with any of the foregoing.

     2.09 Litigation . Except as set forth on Section 2.09 of the Disclosure Schedules, Seller is not (a) a party to any litigation, proceeding or administrative investigation related to the Business or the Purchased Assets, and no such action is pending or, to the Knowledge of Seller, threatened against Seller that involves the Business or the Purchased Assets; and (b) subject to any outstanding order, writ, injunction, judgment or decree of any court, government, governmental or other regulatory body or arbitration against or affecting the Business, the Purchased Assets or the transactions contemplated by this Agreement or the Transaction Documents.

     2.10 Permits . The conduct of the Business as currently conducted does not require Seller to hold any material licenses, permits or certificates from any federal, state, local and foreign authorities (including, without limitation, federal and state agencies regulating occupational health and safety, and, to Seller’s Knowledge, permits for the ownership of the Building), except as disclosed in Section 2.10 of the Disclosure Schedules.

     2.11 Inventory . Except as set forth in Section 2.11 of the Disclosure Schedules, the Inventory and Weaver Pre-Paid Corn being purchased by Buyer from Seller pursuant to this Agreement consists of items of a quality and quantity usable and, with respect to finished goods only, saleable in each case, in the ordinary course of business. Except as set forth in Section 2.11 of the Disclosure Schedules, none of the Inventory or Weaver Pre-Paid Corn is obsolete, damaged or defective. Section 2.11 of the Disclosure Schedules identifies the amount of finished goods inventory having less than 50% of such inventory’s Standard Shelf Life as of the date of this Agreement. All of the Inventory and Weaver Pre-Paid Corn complies in all material respects with any and all applicable federal and state labeling requirements and may be shipped in interstate commerce in accordance with the Federal Food, Drug and Cosmetic Act, as amended.

     2.12 Brokerage . Except for Lehman Brothers Holdings, Inc., no third party shall be entitled to receive from Seller any brokerage commission, finder’s fee, fee for financial advisory services or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement, contract or agreement made by or on behalf of Seller.

     2.13 Product Recall . Except as set forth on Section 2.13 of the Disclosure Schedules, during the last five (5) years, Seller has not effected a recall or withdrawal of any of

its products related to the Business for health, safety or similar reasons, and to the Knowledge of Seller, no facts have existed that, if known by the applicable governmental authority, would have resulted in such a recall or withdrawal. All of the products sold by Seller in connection with the Business during the last five (5) years have been in material compliance with any and all applicable federal and state labeling requirements. Except as set forth on Section 2.13 of the Disclosure Schedules, none of the products sold by Seller in connection with the Business during the last five (5) years have been the subject of any material claim from a third party for personal injury allegedly due and owing as a result of the use, app