SALE AND PURCHASE OF SHARES AND ASSETS

Exhibit 10.25 PURCHASE AGREEMENT BY AND AMONG INTERNATIONAL MULTIFOODS CORPORATION, MULTIFOODS BRANDS, INC., FANTASIA CONFECTIONS, INC., ROBIN HOOD MULTIFOODS CORPORATION, THE J.M. SMUCKER COMPANY, VALUE CREATION PARTNERS INC., BEST BRANDS CORP., AND IMCB CORP. DATED AS OF JANUARY 13, 2005 TABLE OF CONTENTS

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Exhibits Exhibit 1.02(a) U.S. Owned Real Property Exhibit 1.02(b) U.S. Leased Real Property Exhibit 1.02(c) Equipment Exhibit 1.02(k) Assigned Contracts Exhibit 1.03(i) Certain Excluded Contracts Exhibit 1.03(j) Certain Excluded Assets Exhibit 1.07 Dividable Contracts Exhibit 2.01 Allocation of Purchase Price between the Shares and the Assets Exhibit 2.02(ii) Form of Note Purchase Agreement Exhibit 2.04(g)(i) Certain Net Working Capital Principles Exhibit 2.04(g)(ii) Detailed Accounting of Net Working Capital Exhibit 2.06 Allocation of Purchase Price among the Assets Exhibit 3.02(a)(iii) Form of Bill of Sale Exhibit 3.02(a)(iv) Form of Lease Assignment Exhibit 3.02(a)(v) Forms of Limited Warranty Deeds Exhibit 3.02(a)(vi) Forms of Intellectual Property Assignment Exhibit 3.02(a)(viii) Requested Subordination, Nondisturbance Agreements Exhibit 3.02(a)(ix) Requested Estoppel Certificates Exhibit 3.02(a)(x) Form of Seller's Affidavit Exhibit 3.02(a)(xi) Lemelson Instrument of Transfer Exhibit 5.01(f) Form of Accredited Investor Certificate Exhibit 6.03(a) Form of Trademark License Agreement Exhibit 6.03(d) Form of Grant-Back Technology License Agreement Exhibit 6.08(a) Form of Supply Agreement Exhibit 6.08(b) Form of Baking Mix Agreement Exhibit 6.09 Form of Transition Services Agreement Exhibit 6.10 Form of Co-Pack Agreement Exhibit 6.17 Form of Patent License Agreement Exhibit 7.01(i) Certain Consents iii PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (this "Agreement") is made as of January 13, 2005, by and among INTERNATIONAL MULTIFOODS CORPORATION, a corporation organized under the laws of Delaware ("IMC"), MULTIFOODS BRANDS, INC., a corporation organized under the laws of Delaware ("MBI"), FANTASIA CONFECTIONS, INC., a corporation organized under the laws of California ("FCI"; IMC, MBI and FCI are sometimes hereinafter referred to individually as a "U.S. Seller" and collectively as the "U.S. Sellers"), ROBIN HOOD MULTIFOODS CORPORATION, an unlimited company amalgamated under the laws of Nova Scotia ("Robin Hood"; the U.S. Sellers and Robin Hood are sometimes hereinafter referred to individually as a "Seller" and collectively as the "Sellers"), THE J. M. SMUCKER COMPANY, a corporation organized under the laws of Ohio ("Smucker"), VALUE CREATION PARTNERS INC., a corporation organized under the laws of Delaware ("VCP"), BEST BRANDS CORP., a corporation organized under the laws of Delaware ("BBC"), and IMCB CORP., a corporation organized under the laws of Delaware (hereinafter referred to as "Buyer"; VCP, BBC and Buyer are sometimes hereinafter referred to individually as a "Buyer Entity" and collectively as the "Buyer Entities") and a wholly-owned subsidiary of VCP. WHEREAS, the U.S. Sellers are engaged in, among other businesses, the business of manufacturing, marketing, selling and distributing (1) baking mix and baking ingredient foodservice products primarily under the brand names Multifoods and Pillsbury and distributor and customer labels in the in-store bakery, foodservice and wholesale/retail bakery channels in the continental United States and Puerto Rico and (2) frozen bakery products primarily under the brand names Fantasia, Gourmet Baker and Multifoods and distributor and customer labels in the in-store bakery, retail bakery and foodservice channels in the continental United States and Puerto Rico (the "U.S. Business"); and WHEREAS, Robin Hood owns (1) all of the issued and outstanding shares of capital stock (the "Gourmet Baker Shares") of Gourmet Baker Inc., a corporation organized under the laws of Ontario ("Gourmet Baker"), and (2) all of the issued and outstanding shares of capital stock (the "980964 Shares" and together with the Gourmet Baker Shares, the "Shares") of 980964 Ontario Limited, a corporation organized under the laws of Ontario ("980964") (Gourmet Baker together with 980964 are sometimes hereinafter collectively referred to as the "Companies" and individually as a "Company"); and WHEREAS, the Companies are engaged in the business of manufacturing, marketing, selling and distributing frozen bakery products primarily under the brand name Gourmet Baker and distributor and customer labels in the in-store bakery and foodservice channels in Canada and the continental United States (the "Canadian Business" and together with the U.S. Business, the "Business"); and WHEREAS, the U.S. Sellers desire to sell, transfer and assign to Buyer, and Buyer desires to purchase and assume from the U.S. Sellers, on the terms and subject to the conditions set forth in this Agreement, certain assets and liabilities relating to the U.S. Business; and 1 WHEREAS, Robin Hood desires to sell, transfer and assign to Buyer, and Buyer desires to purchase from Robin Hood, on the terms and subject to the conditions set forth in this Agreement, the Shares. NOW, THEREFORE, in consideration of the premises and the covenants and agreements herein contained and for other good and valuable consideration, the parties, intending to be legally bound, hereby agree as follows: ARTICLE I SALE AND PURCHASE OF SHARES AND ASSETS; ASSUMPTION OF LIABILITIES 1.01 SALE AND PURCHASE OF SHARES. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing (as hereinafter defined) Robin Hood shall sell, transfer, assign and convey to Buyer, and Buyer shall purchase from Robin Hood, the entire right, title and interest of Robin Hood in and to the Shares. 1.02 SALE AND PURCHASE OF ASSETS. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the U.S. Sellers shall sell, transfer, assign and convey to Buyer, and Buyer shall purchase and acquire from the U.S. Sellers, all of the U.S. Sellers' right, title and interest, as of the Closing, in and to all of the following assets and properties described in this Section 1.02 (the "Assets"): (a) the real property described in Exhibit 1.02(a) hereto, together with all improvements (including improvements in progress), fixtures and easements, rights-of-way, spur tracks, docks, piers and other appurtenances thereto (such as appurtenant rights in and to public streets, alleys and thoroughfares) (the "U.S. Owned Real Property"); (b) the leasehold and subleasehold interests of each U.S. Seller in and to the real property leases listed on Exhibit 1.02(b) hereto (the "Leases") with respect to the real property listed on Exhibit 1.02(b) hereto (collectively, the "U.S. Leased Real Property" and, together with the U.S. Owned Real Property, referred to herein as the "U.S. Real Property"), together with all interests of the U.S. Sellers in all improvements (including improvements in progress), fixtures and easements, rights-of-way, spur tracks, docks, piers and other appurtenances thereto (such as appurtenant rights in and to public streets, alleys, and thoroughfares) (collectively with the U.S. Leased Real Property, the "Leasehold Interests"); (c) all machinery, equipment, spare parts, furniture, automobiles, trucks, tractors, trailers, computer hardware, tools and other tangible personal property listed in Exhibit 1.02(c) hereto (the "Equipment"); (d) all inventories of ingredients and raw materials, work in process, finished goods, bagging, packaging and other containers, and other goods (whether located at the U.S. Sellers' premises or third parties' (including co-packers') facilities) held for sale to customers in the ordinary course of business, in each case exclusively related to the U.S. Business, and the "TreatToppers" inventory at the Sedalia, Missouri plant (the "Inventory"); 2 (e) all accounts receivable for goods sold or services rendered by each U.S. Seller in the ordinary course of business, in each case exclusively related to the U.S. Business, other than those payable by an affiliate of the U.S. Sellers (collectively, the "Receivables"); (f) all purchase orders made by customers for the purchase of products of the U.S. Business or by any of the U.S. Sellers for the purchase of goods or services, in each case exclusively related to the U.S. Business (the "Purchase Orders"); (g) the Owned Business Intellectual Property (as defined in Section 4.01(n)) owned by a U.S. Seller that is exclusively related to the U.S. Business (the "Intellectual Property"); (h) all books, records and other documents and information exclusively related to the U.S. Business, including all customer, prospect, broker and distributor lists, sales literature, price lists, quotes and bids, promotional programs, product catalogs and brochures, inventory records, product data, purchase orders and invoices, sales orders and sales order log books, commission records, customer information, personnel records (to the extent permitted by law) and correspondence, in each case exclusively related to the U.S. Business (the "Books and Records"); (i) all pre-paid expenses and deposits made by the U.S. Sellers, in each case exclusively related to the Assets and the U.S. Business (the "Prepaid Expenses"); (j) all governmental licenses, permits, approvals and other authorizations held by the U.S. Sellers exclusively related to the Assets and the U.S. Business, to the extent their transfer is permitted by law (the "Licenses"); (k) the licenses, contracts and agreements listed on Exhibit 1.02(k) hereto, together with each other contract or agreement exclusively related to the U.S. Business not required to be listed on Section 4.01(o) of the Disclosure Schedule (as defined in Section 4.01) (other than Excluded Contracts (as defined in Section 1.03(i)) (together with the Leases, the "Assigned Contracts"); (l) each warranty or guarantee by any manufacturer, supplier or other predecessor or transferor of any of the Assets, to the extent such assignment is not prohibited by the terms of such warranty or guarantee (the "Warranties"); (m) all Tax (as defined in Section 4.01(i)) refunds and credits related to Taxes that are not Excluded Taxes; (n) the portions of the Dividable Contracts (as defined in Section 1.07(a)) that are assigned to Buyer pursuant to this Agreement; (o) (i) the $4,805,000 Industrial Revenue Bonds, Series 1999, (ii) the $1,532,000 Industrial Revenue Bonds, Series 2000, and (iii) the $3,624,000 Industrial Revenue Bonds, Series 2001, in each case issued by the City of Bonner Springs, Kansas (the "Industrial Revenue Bonds"); and (p) all goodwill to the extent exclusively related to the U.S. Business. 3 1.03 EXCLUDED ASSETS. The U.S. Sellers are not selling, and Buyer is not purchasing from the U.S. Sellers, any property or assets not expressly described in Section 1.02 hereof (the "Excluded Assets"). Without limiting the generality of the foregoing, the following properties and assets of the U.S. Sellers constitute Excluded Assets, notwithstanding anything to the contrary provided in Section 1.02: (a) all cash, cash equivalents, securities (whether or not marketable), investments and bank accounts; (b) the corporate charter, minute books, stock records, qualifications to do business as a foreign corporation, taxpayer and other identification numbers, Tax Returns (as defined in Section 4.01(i)) (although copies of Tax Returns for Taxes that are not Excluded Taxes shall be provided to Buyer for periods beginning on or after January 1, 2001) and similar records and documents of each U.S. Seller; (c) all Tax (as defined in Section 4.01(i)) refunds or credits related to Excluded Taxes; (d) all insurance policies of the U.S. Sellers and all rights of the U.S. Sellers (including rights to receive dividends, refunds or proceeds) under or arising out of such insurance policies; (e) all of the U.S. Sellers' interests or rights in real property, except for the U.S. Real Property; (f) all intellectual property of each U.S. Seller, except for the Intellectual Property and any intellectual property rights licensed to any U.S. Seller pursuant to an Assigned Contract or the applicable portions of any Dividable Contracts assigned to Buyer pursuant to this Agreement; (g) Licenses that are not transferable or are transferable but only with the consent of the government or a governmental agency and with respect to which the requisite consent is not received at or prior to the Closing; (h) assets held in the U.S. Sellers' Plans (as defined in Section 4.01(r)); (i) the contracts and agreements listed on Exhibit 1.03(i) hereto, all collective bargaining agreements or other agreements with a labor or trade union, and all contracts to which any U.S. Seller is a party pursuant to which an employee of such U.S. Seller is entitled to a "success bonus" (the "Success Bonus Agreements") if the transactions contemplated by this Agreement are consummated and the employee remains employed through the date of such consummation (collectively, the "Excluded Contracts"); and (j) the assets and properties listed in Exhibit 1.03(j). 1.04 ASSUMPTION OF LIABILITIES. At the Closing, upon the terms and subject to the conditions set forth in this Agreement, Buyer shall assume and hereby agrees to pay, perform, 4 observe and discharge fully and timely, effective as of the Closing, all liabilities, obligations and commitments, known or unknown, asserted or unasserted, absolute or contingent, of each U.S. Seller to the extent exclusively related to or arising out of the U.S. Business or the Assets, whether arising before, at or after the Closing, other than liabilities, obligations or commitments constituting Excluded Liabilities (as defined in Section 1.05) (collectively, the liabilities, obligations and commitments so assumed being referred to as the "Assumed Liabilities"). To the extent that any U.S. Seller or any affiliate of any U.S. Seller pays any Assumed Liability following the Closing, Buyer shall reimburse IMC for any amount so paid immediately upon demand. Without limiting the generality of the foregoing, except to the extent such liabilities, obligations, and/or commitments constitute Excluded Liabilities, the following liabilities, obligations and commitments constitute Assumed Liabilities: (a) all liabilities, obligations and commitments of each U.S. Seller under or in respect of the U.S. Real Property, Leasehold Interests, Equipment, Inventory, Assigned Contracts, Purchase Orders, Licenses, Intellectual Property, the Industrial Revenue Bonds and Warranties and the applicable portions of each Dividable Contract; (b) all unpaid accounts payable of each U.S. Seller to the extent exclusively related to the U.S. Business and all accrued expenses of each U.S. Seller to the extent exclusively related to the U.S. Business; (c) without limiting Article VIII hereof, (i) all liabilities, obligations and commitments of each U.S. Seller to Employees (as defined in Section 8.01) and (to the extent accrued on the Final Closing Statement (as defined in Section 2.04(d)) persons formerly on the payroll of the U.S. Business (or any predecessor payroll) relating to compensation, commissions, incentive payments, and bonuses (except to the extent arising from the Success Bonus Agreements), (ii) all liabilities, obligations and commitments of the U.S. Sellers to Employees for severance pay resulting from the termination of employment with a U.S. Seller in connection with the transactions contemplated by this Agreement (including severance obligations arising out of the collective bargaining agreements relating to the Lockport, New York or Elyria, Ohio plants to which a U.S. Seller is a party), and (iii) all liabilities, obligations and commitments of each U.S. Seller for severance pay to persons formerly on the payroll of the U.S. Business (or any predecessor payroll) to the extent accrued on the Final Closing Statement. (d) all liabilities, obligations and commitments arising from litigation, arbitration, administrative and other proceedings (other than workers' compensation and health insurance/benefit claims) pending or threatened against the U.S. Business or the Assets and all performance obligations under any product recall or any non-financial settlement obligation exclusively related to the U.S. Business; (e) all liabilities, obligations and commitments arising from any workers' compensation and health insurance/benefit claims related to the U.S. Business asserted on or after the Closing Date (as defined in Section 3.01) (regardless, in the case of workers' compensation claims, of when the alleged injuries were incurred) other than (i) workers' compensation claims asserted by persons employed at the Lockport, New York plant (the "Lockport Plant") that relate to injuries incurred prior to the Closing Date, (ii) workers' 5 compensation claims resulting from accidents occurring prior to the Closing Date that cause death or loss of limbs or other severe physical injuries (e.g., broken backs or other physical injuries requiring hospitalization other than on an outpatient basis), and (iii) health insurance/benefit claims asserted by persons employed by the U.S. Sellers at the Lockport Plant (except to the extent any such persons are employed by Buyer, in which case Buyer shall be liable for such health insurance/benefit claims in accordance with the terms of Section 8.06), each of which shall be the sole responsibility of the U.S. Sellers; (f) any claims (including product liability and infringement claims, liabilities for customer deductions and refund and replacement obligations with respect to products) relating to goods sold or services provided by the U.S. Business before, on or after the Closing Date; (g) any claims (other than claims retained by the U.S. Sellers pursuant to Section 1.05(e) and Section 1.05(j)) asserted by Employees, by persons formerly on the payroll of the U.S. Business (or any predecessor payroll), or by dependents of such Employees or former employees, for acts or omissions occurring on or before the Closing Date; (h) all liabilities, obligations and commitments relating to the ownership, operation or condition of the tangible Assets (including environmental conditions) before, on or after the Closing Date or arising from the transfer of the Assets to Buyer; (i) vacation, personal time off and sick time accrued by the U.S. Sellers as of the Closing Date for all Employees hired by Buyer ("Accrued Vacation"); (j) all liabilities for Taxes attributable to the U.S. Business or the Assets, other than Excluded Taxes (as defined in Section 4.01(i)), the U.S. Sellers' share of prorated Taxes under Section 2.03 and the U.S. Sellers' share of Transfer Taxes pursuant to Section 3.03; (k) any liability, obligation or commitment of any U.S. Seller to pay or perform any liability, obligation or commitment (i) pursuant to any guaranty or obligation or Lien (as defined in Section 4.01(k)) on, or in respect of, any collateral of any U.S. Seller (other than the Assets) to ensure performance given or made by any such U.S. Seller to the extent exclusively in connection with the U.S. Business (including pursuant to a letter of credit or surety bond), or (ii) that otherwise arises as a matter of law or contract to the extent exclusively in connection with the U.S. Business, but in no event shall the provisions of this subsection include any obligation to repay any borrowed money; and (l) all liabilities, obligations and commitments of the U.S. Sellers reflected on the Final Closing Statement. 1.05 EXCLUDED LIABILITIES. Notwithstanding anything to the contrary provided in Section 1.04 hereof, the Assumed Liabilities shall not include the following liabilities, obligations and commitments of the U.S. Sellers (or any of them) (the "Excluded Liabilities"): (a) any liability, obligation or commitment for borrowed money; 6 (b) any liability for Excluded Taxes, the U.S. Sellers' share of prorated Taxes under Section 2.03 or the U.S. Sellers' share of Transfer Taxes pursuant to Section 3.03; (c) any liability, obligation or commitment for costs and expenses (other than Transfer Taxes, as defined in Section 3.03) in connection with the negotiation and execution of this Agreement or the consummation of the transactions contemplated hereby (other than severance costs and liabilities referred to in Exhibit 2.04(g)(i)); (d) any liability, obligation or commitment of the U.S. Sellers under this Agreement or under any other agreement between one or more of the U.S. Sellers and Buyer entered into on or after the date of this Agreement in accordance with the terms hereof; (e) any liability, obligation or commitment relating to any of the U.S. Sellers' Plans, except to the extent Buyer is assuming such liabilities, obligations and commitments pursuant to Section 1.04(c); (f) any intercompany accounts between the U.S. Sellers and their affiliates; (g) claims relating to COBRA (as defined in Section 8.08) coverage, to the extent provided in Section 8.08; (h) any liability, obligation or commitment primarily related to the Excluded Assets (except to the extent provided in Section 1.04(c), Section 1.06 and Section 1.07 hereof) and any other assets of the U.S. Sellers not transferred to and not purchased by Buyer; (i) any liability, obligation or commitment of each U.S. Seller for severance pay to persons formerly on the payroll of the U.S. Business (or any predecessor payroll) to the extent not accrued on the Final Closing Statement; (j) (i) any liability, obligation or commitment arising from workers' compensation claims or health insurance/benefit claims (to the extent provided in Section 8.06) related to the U.S. Business that are asserted prior to the Closing Date, (ii) workers' compensation claims resulting from accidents occurring prior to the Closing Date that cause death or loss of limbs or other severe physical injuries (e.g., broken backs or other physical injuries requiring hospitalization other than on an outpatient basis), and (iii) in the case of claims asserted by persons employed at the Lockport Plant, (A) workers' compensation claims asserted by such persons at any time that relate to injuries incurred prior to the Closing Date and (B) health insurance/benefit claims asserted by persons employed by the U.S. Sellers at the Lockport Plant (except to the extent any such persons are employed by Buyer, in which case Buyer shall be liable for such health insurance/benefit claims in accordance with the terms of Section 8.06); and (k) any liability, obligation, or commitment set forth in Section 1.05(k) of the Disclosure Schedule. 1.06 ASSIGNMENT AND ASSUMPTION OF ASSIGNED CONTRACTS. Notwithstanding any other provision of this Agreement, if (i) any Assigned Contract is not permitted to be sold, assigned, transferred or conveyed without the approval, consent or waiver of another party 7 thereto, and (ii) all necessary approvals, consents and waivers of all parties to such Assigned Contract have not been obtained at or prior to the Closing, then Buyer shall not be obligated to assume such Assigned Contract and such Assigned Contract shall not be included in the Assets transferred to Buyer on the Closing Date, provided that Buyer will assume the obligations and liabilities of the U.S. Sellers under such Assigned Contract (but not such Assigned Contract itself), in which event the claims, rights and benefits of the U.S. Sellers arising under such Assigned Contract or resulting therefrom (but not such Assigned Contract itself) shall be included in the Assets and transferred to Buyer hereunder, and the U.S. Sellers shall, following the Closing, use reasonable efforts to assist Buyer in attempting to obtain the necessary approvals, consents and waivers with respect to such Assigned Contract (but in no event shall the U.S. Sellers be required to pay money or grant any accommodations to obtain any such approval, consent or waiver). Each U.S. Seller that is a party thereto shall promptly transfer such Assigned Contract to Buyer if such approvals, consents and waivers are obtained (provided, that no U.S. Seller shall be obligated to make any representations or warranties with respect thereto beyond those expressly required by this Agreement) and upon such transfer Buyer shall assume all liabilities, obligations and commitments of the applicable U.S. Seller(s) arising under such Assigned Contract. Nothing stated in this Section 1.06 shall modify in any respect the conditions set forth in Article VII. 1.07 DIVIDABLE CONTRACTS. (a) The U.S. Sellers shall use their reasonable efforts to assist in the transfer to Buyer of such portion of each Dividable Contract or the benefits thereof that relates to the U.S. Business on terms that, taken as a whole, for all such transfers are not materially less advantageous to Buyer than would exist if such transferred portions were stand alone contracts. Upon such transfer, Buyer shall assume any liabilities and obligations of the applicable U.S. Seller related to the transferred portion of such Dividable Contract. "Dividable Contracts" means the contracts and agreements referred to in Exhibit 1.07 hereto. (b) Notwithstanding anything to the contrary contained in this Agreement, to the extent that the transfer to Buyer of the portion of any Dividable Contract that relates to the U.S. Business or any claim or right or any benefit arising thereunder or resulting therefrom would require any approvals, consents or waivers by another person, and such approvals, consents or waivers shall not have been obtained prior to the Closing, the Closing shall (subject to the satisfaction or waiver of the conditions set forth in Article VII) proceed without the transfer of any such portion of any such Dividable Contract and this Agreement shall not constitute a transfer of such portion of any such Dividable Contract or an attempt thereof. In the event that the Closing proceeds without the transfer of any such portion of any such Dividable Contract, then following the Closing, the U.S. Sellers shall use their reasonable efforts to assist Buyer in attempting to obtain promptly such approvals, consents or waivers; provided, however, that neither Sellers nor Buyer shall be required to pay any consideration for any such approval, consent or waiver or grant any accommodations. Pending such approval, consent or waiver, the parties shall cooperate with each other in any mutually agreeable, reasonable and lawful arrangements (to the extent any such arrangements are feasible) designed to provide to Buyer the benefits of such portion of any such Dividable Contract and to the U.S. Sellers the benefits that they would have obtained had such portion of such Dividable Contract been transferred to Buyer 8 at the Closing. To the extent that Buyer is provided the benefits pursuant to this Section 1.07 of any portion of any such Dividable Contract, Buyer shall perform the obligations of the U.S. Sellers thereunder. Once approval, consent or waiver for the transfer of any such portion of any such Dividable Contract not transferred at the Closing is obtained, the U.S. Sellers shall transfer such portion of any such Dividable Contract to Buyer (provided, that no U.S. Seller shall be obligated to make any representations or warranties with respect thereto beyond those expressly required by this Agreement) and Buyer shall assume the corresponding obligations of each U.S. Seller thereunder. Nothing stated in this Section 1.07 shall modify in any respect the conditions set forth in Article VII. ARTICLE II PURCHASE PRICE AND PAYMENT 2.01 PURCHASE PRICE. The aggregate purchase price to be paid by Buyer to Sellers for the Shares and the Assets shall be an amount equal to the sum of (i) $43,000,000 (the "Base Purchase Price"), plus or minus (as applicable) (ii) the amount by which Final Closing Net Working Capital, as determined in the manner set forth below in Section 2.04, exceeds or is less than $15,552,000 (the Base Purchase Price, as so adjusted, being referred to as the "Purchase Price", as such amount may be further adjusted after Closing as otherwise provided in this Agreement (including pursuant to Section 2.05)). The Purchase Price shall be allocated between the Shares, on the one hand, and the Assets, on the other hand, as set forth on Exhibit 2.01. 2.02 PAYMENT. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Base Purchase Price shall be payable as follows: Buyer shall (i) pay to Sellers, by wire transfer to the bank accounts designated in writing by Sellers prior to the Closing, immediately available United States funds in the aggregate amount of $33,000,000 (the "Closing Cash Payment"), with Buyer to pay such portion of the Closing Cash Payment to each such account as may be directed by Sellers, and (ii) a promissory note of Buyer (the "Buyer Note") in the form attached as Exhibit 1 to the Note Purchase Agreement (the "Note Purchase Agreement") attached as Exhibit 2.02(ii) hereto, dated the Closing Date, in the principal amount of $10,000,000, bearing interest at the rate of 8% per annum, payable on the dates and containing the other terms set forth in Exhibit 1 to the Note Purchase Agreement. 2.03 PRORATIONS. The following prorations relating to the Assets will be made as of the Closing Date, with the U.S. Sellers liable to the extent such items relate to any time period up to the day immediately preceding the Closing Date and Buyer liable to the extent that such items relate to periods on or after the Closing Date. The net amount of all such prorations will be settled and paid by the U.S. Sellers to Buyer or Buyer to the U.S. Sellers, as the case may be, on the Closing Date by wire transfer of immediately available funds to an account designated in writing by Buyer or the U.S. Sellers, as applicable, provided, however, that if any item cannot be prorated with specificity as of the Closing Date (including real estate taxes and assessments resulting from, among other things, any proposed or actual change in valuation prior to the Closing Date to the extent such changes affect Taxes in the period up to and including the Closing Date) due to final bills not being issued as of the Closing Date, the parties will calculate the prorations with respect to such items as soon as practicable after the actual bills are issued, 9 and the net amount shall be paid by the responsible party to the other(s) by wire transfer of immediately available funds promptly thereafter: (a) rents, additional rents, taxes and other items payable by the U.S. Sellers under any lease to be assigned to or assumed by Buyer pursuant to the terms of this Agreement; (b) the amount of rents and charges for sewer, water, fuel, telephone, electricity and other utilities, including Taxes thereon; provided, however, that no deposits or prepaid amounts will be prorated, but will be included in the Assets; and (c) real estate and personal property Taxes and installments of assessments, if any, on or with respect to the Assets. Notwithstanding the foregoing, Buyer shall be liable for and pay such items set forth in clauses (a), (b) and (c) above to the extent such items are included as liabilities on the Final Closing Statement. (d) The U.S. Sellers will use commercially reasonable efforts to cause all utility bills of the U.S. Sellers to be closed and billed by their respective utility companies as of the day immediately preceding the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. If any such utility charges are not separately billed, they will be prorated presuming that such charges were uniformly incurred during the period in question. 2.04 DETERMINATION OF CLOSING NET WORKING CAPITAL. (a) Within 60 days after the Closing Date, Sellers shall prepare a statement (the "Closing Statement") setting forth Net Working Capital (as defined in clause (g) below) as of the close of business on the day immediately preceding the Closing Date ("Closing Net Working Capital"). The value of the inventory shown on the Closing Statement shall be equal to the value of inventory as of the close of business on the day immediately preceding the Closing Date reflected on the perpetual inventory records maintained by the U.S. Sellers and the Companies in the ordinary course of business (the "Closing Perpetual Inventory Value"), and such value shall be final and binding for purposes of this Section 2.04, but shall be subject to adjustment after Closing pursuant to Section 2.05 hereof. Buyer shall, and shall cause the Companies to, reasonably assist Sellers and their representatives in the preparation of the Closing Statement and shall provide Sellers and their representatives access at all reasonable times to the personnel, properties and books and records of the Business and the Companies for such purpose. (b) Buyer shall, within 45 days after the delivery by Sellers of the Closing Statement, complete its review thereof. After delivery of the Closing Statement, Sellers shall provide Buyer and its representatives access at all reasonable times to their personnel, properties and books and records, in each case used or involved in the preparation of the Closing Statement. The Closing Statement shall be binding and conclusive upon, and deemed accepted by, Buyer unless Buyer shall have notified Sellers in writing within 45 days after delivery of the Closing Statement of any objection thereto (the "Buyer's Objection"). The Buyer's Objection shall set forth a 10 description of the basis of the Buyer's Objection and the adjustments to Closing Net Working Capital reflected on the Closing Statement that Buyer believes should be made. Any items not disputed during the foregoing 45-day period shall be deemed to have been accepted by Buyer. If the Closing Net Working Capital set forth in the Closing Statement exceeds the Closing Net Working Capital set forth in Buyer's Objection (if any) by $100,000 or less, then Final Closing Net Working Capital (as defined below) shall be equal to one-half the sum of (x) the Closing Net Working Capital set forth in Buyer's Objection, plus (y) the Closing Net Working Capital set forth in the Closing Statement, which amount shall be final and binding and not subject to any post-Closing adjustment except as may be necessary to correct manifest computational errors. If the Closing Net Working Capital set forth in the Closing Statement exceeds the Closing Net Working Capital set forth in Buyer's Objection (if any) by more than $100,000, then Sellers and Buyer shall attempt to resolve their disputes. (c) If Sellers and Buyer are unable to resolve all of their disputes with respect to the Closing Statement within 45 days following Sellers' receipt of the Buyer's Objection to such Closing Statement pursuant to Section 2.04(b), they shall refer their remaining differences for decision to a nationally recognized independent accounting firm (other than Ernst & Young or KPMG) agreed upon by Buyer and Sellers (such agreed upon firm being hereinafter referred to as the "Arbitrator"). The Arbitrator's decision shall be made consistent with this Section 2.04 and the methods and principles used in the preparation of the Closing Statement, shall be made within 45 days and shall be final and binding on the parties; provided, that the Arbitrator's determination as to any item set forth in Buyer's Objection shall not be more beneficial to Sellers than the determination of that item by Sellers in the Closing Statement or more beneficial to Buyer than the determination of that item in Buyer's Objection. (d) The Closing Statement shall become final and binding on the parties upon the earliest of (i) if no Buyer's Objection has been given, the expiration of the period within which Buyer must make its objection pursuant to Section 2.04(b) hereof, (ii) agreement in writing by Sellers and Buyer that the Closing Statement, together with any modifications thereto agreed to by Sellers and Buyer, shall be final and binding, or (iii) the date on which the Arbitrator shall issue its written determination with respect to any dispute relating to such Closing Statement. The Closing Statement, when final and binding on all parties, is herein referred to as the "Final Closing Statement" and the amount of Net Working Capital reflected thereon shall be referred to as the "Final Closing Net Working Capital"; provided, that Final Closing Net Working Capital shall be the amount determined pursuant to the second to last sentence of Section 2.04(b) if such sentence is applicable, with the Closing Statement related thereto being the Final Closing Statement. (e) Within 10 business days following issuance of the Final Closing Statement, the net adjustment payment payable pursuant to this Section 2.04(e) (the "Adjustment Payment") and interest thereon shall be paid by wire transfer of immediately available United States funds to a bank account or bank accounts designated in writing by Sellers or Buyer, as the case may be. The Adjustment Payment shall be the difference, if any, between (x) the Final Closing Net Working Capital, minus (y) $15,552,000. The Adjustment Payment shall be payable by Buyer to Sellers, if positive, and by Sellers to Buyer, if negative. If the Adjustment Payment is payable to Sellers, it shall be allocated and paid to such of the Sellers to whose business the adjustment 11 relates. The Adjustment Payment shall bear interest from the Closing Date to the date of payment at the rate per annum equal to the prime commercial lending rate quoted as of the Closing Date by Wells Fargo Bank, N.A. (the "Closing Date Interest Rate"), which interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed and such interest shall be paid on the same date and in the same manner as such Adjustment Payment. (f) If the Final Closing Net Working Capital is determined by the Arbitrator pursuant to Section 2.04(c), the Non-Prevailing Party (as defined below) shall pay its own expenses incurred with respect to the submission to such Arbitrator and shall pay a percentage of (i) the fees and expenses of such Arbitrator plus (ii) the reasonable out-of-pocket expenses (including reasonable attorneys' fees) of the other party incurred with respect to the submission, which percentage shall be calculated by dividing (1) an amount equal to the difference between the Non-Prevailing Party's determination of Closing Net Working Capital, as submitted to such Arbitrator, and such Arbitrator's determination of Closing Net Working Capital by (2) an amount equal to the difference between the parties' respective determinations of Closing Net Working Capital, as submitted to such Arbitrator. The other party shall pay the remainder of the fees and expenses of such Arbitrator and its own expenses not required to be paid by the Non-Prevailing Party hereunder. A party is the "Non-Prevailing Party" if such Arbitrator's determination of Closing Net Working Capital is closer to the other party's determination of Closing Net Working Capital, as submitted to such Arbitrator, than it is to that party's determination of Closing Net Working Capital, as submitted to such Arbitrator. For purposes of this Section 2.04, Sellers collectively shall be treated as one party. (g) As used in this Section 2.04, "Net Working Capital" means the current assets (net of appropriate reserves and excluding cash and cash equivalents), less the current liabilities, of the Business as determined in a manner consistent with the methods, standards and principles used in the preparation of the Unaudited Consolidated Statement of Net Investment Assets of the Business as of September 25, 2004 referred to in Section 4.01(h), as modified and/or elaborated on by the principles set forth on Exhibit 2.04(g)(i) hereto. Net Working Capital as reflected on the Unaudited Consolidated Statement of Net Investment Assets of the Business as of September 25, 2004 was $16,352,000 as shown in the detailed accounting of Net Working Capital set forth on Exhibit 2.04(g)(ii). All amounts denominated in Canadian dollars that are part of the calculation of Closing Net Working Capital shall be converted into U.S. dollars using the currency exchange rate therefor as of the Closing Date published in The Wall Street Journal (the "Closing Date Exchange Rate"). For the avoidance of doubt, "Net Working Capital" shall not include any Excluded Liabilities or Excluded Assets. 2.05 INVENTORY ADJUSTMENT. (a) Within 30 days after the Closing Date, Sellers shall prepare and deliver to Buyer a statement (the "Closing Inventory Statement") setting forth the type and value, as of the close of business on the day immediately preceding the Closing Date, of the inventory of the Business, which statement shall be derived from a physical taking of such inventory as of such date and shall value inventory on the basis of the lower of cost or market value utilizing a first-in, first-out method in a manner consistent with Sellers' and the Companies' past practices and the standards and principles used in the preparation of the Unaudited Consolidated Statement of Net 12 Investment Assets of the Business as of September 25, 2004 and shall otherwise be prepared in a manner consistent with Sellers' and the Companies' past practices with respect to perpetual inventory records; provided, that all amounts denominated in Canadian dollars that are part of the calculation of the value of inventory pursuant to this Section 2.05 shall be converted into U.S. dollars using the Closing Date Exchange Rate. Buyer and its representatives shall have such opportunity as Buyer reasonably deems appropriate to observe the taking and reconciliation of such inventory (which may begin prior to the Closing Date) in connection with the preparation of the Closing Inventory Statement. Buyer shall provide Sellers and their accountants, upon reasonable notice, such access to the books and records, to any other information, including working papers of Buyer's accountants, and to any employees of Buyer and its affiliates, in each case as may be reasonably necessary for Sellers to take such physical inventory, prepare the Closing Inventory Statement, respond to the Buyer's Inventory Objection (as defined in Section 2.05(b)) and prepare materials for presentation to the Arbitrator in connection with the matters contemplated by Section 2.05(c). If necessary, Buyer shall, after Closing, also provide or cause to be provided to Sellers and their designees such access as such persons may reasonably request to all facilities at which inventory of the Business is located in order to conduct such physical inventory. For the avoidance of doubt, the inventory of the Business to be valued pursuant to this Section 2.05 consists of the Inventory and all inventory of the Companies. (b) Buyer shall, within 20 days after the delivery by Sellers of the Closing Inventory Statement, complete its review thereof. After delivery of the Closing Inventory Statement, Sellers shall provide Buyer and its accountants, upon reasonable notice, such access to the books and records, to any other information, including working papers of Sellers' accountants, and to any employees of Sellers and their affiliates, in each case used in the preparation of the Closing Inventory Statement or as may otherwise be reasonably necessary for Buyer to prepare the Buyer's Inventory Objection and to prepare materials for presentation to the Arbitrator in connection with the matters contemplated by Section 2.05(c). The Closing Inventory Statement shall be binding and conclusive upon, and deemed accepted by, Buyer unless Buyer shall have notified Sellers in writing within 20 days after delivery to Buyer of the Closing Inventory Statement of any objection thereto (the "Buyer's Inventory Objection"). The Buyer's Inventory Objection shall set forth a description of the basis of the Buyer's Inventory Objection and the adjustments to the value of inventory reflected on the Closing Inventory Statement that Buyer believes should be made. Any items not disputed during the foregoing 20-day period shall be deemed to have been accepted by Buyer. (c) If Sellers and Buyer are unable to resolve all of their disputes with respect to the Closing Inventory Statement within 30 days following Sellers' receipt of the Buyer's Inventory Objection, they shall refer their remaining differences to the Arbitrator for decision, which decision shall be made consistent with the principles set forth in this Section 2.05 within 30 days and shall be final and binding on the parties, provided that the Arbitrator's determination as to any item set forth in the Buyer's Inventory Objection shall not be more beneficial to Sellers than the determination of that item by Sellers in the Closing Inventory Statement or more beneficial to Buyer than the determination of that item in the Buyer's Inventory Objection. Any expenses relating to the engagement of the Arbitrator shall be shared equally by Sellers, on the one hand, and Buyer, on the other hand. 13 (d) The Closing Inventory Statement shall become final and binding on the parties upon the earliest of (i) if no Buyer's Inventory Objection has been given, the expiration of the period within which Buyer must make its objection pursuant to Section 2.05(b) hereof, (ii) agreement in writing by Sellers and Buyer that the Closing Inventory Statement, together with any modifications thereto agreed to by Sellers and Buyer, shall be final and binding, or (iii) the date on which the Arbitrator shall issue its written determination with respect to any dispute relating to such Closing Inventory Statement. The Closing Inventory Statement, as submitted by Sellers if no timely Buyer's Inventory Objection has been given or as adjusted pursuant to any agreement between the parties or as determined pursuant to the decision of the Arbitrator, in each case pursuant to this Section 2.05, is herein referred to as the "Final Closing Inventory Statement." (e) Within five business days following issuance of the Final Closing Inventory Statement, Sellers or Buyer, as applicable, shall pay, as an adjustment to the Purchase Price, the net adjustment payment payable pursuant to this Section 2.05(e) (the "Inventory Adjustment Payment") (if any) and interest thereon by wire transfer of immediately available funds to a bank account or bank accounts designated in writing by Sellers or Buyer, as applicable. If the aggregate value of inventory reflected on the Final Closing Inventory Statement exceeds the Closing Perpetual Inventory Value, the Inventory Adjustment Payment shall be made by Buyer and shall equal the amount of such excess. If the aggregate value of inventory reflected on the Final Closing Inventory Statement is less than the Closing Perpetual Inventory Value, the Inventory Adjustment Payment shall be made by Sellers and shall equal the amount of such shortfall. The Inventory Adjustment Payment (if any) shall bear interest from the Closing Date to the date of payment at the Closing Date Interest Rate, which interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed and such interest shall be paid on the same date and in the same manner as such Inventory Adjustment Payment. 2.06 ALLOCATION OF PURCHASE PRICE AMONG THE ASSETS. The portion of the Purchase Price attributable to the Assets shall be allocated among the Assets for all Tax purposes as set forth on Exhibit 2.06. Buyer and Sellers shall follow the allocation set out in Exhibit 2.06 in determining and reporting their liabilities for any Taxes and shall prepare their respective applicable Tax Returns in accordance with such allocation. Further, neither Buyer nor Sellers, nor any of their respective affiliates, shall take any position on any Tax Return inconsistent with such allocation unless required to do so by any Taxing authority. ARTICLE III CLOSING, CLOSING DELIVERIES AND CERTAIN TAXES 3.01 CLOSING AND CLOSING DATE. The closing of the sale and purchase of the Shares and the Assets pursuant to this Agreement (the "Closing") shall take place at the offices of Faegre & Benson LLP, 2200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota, on February 16, 2005, at 9:00 a.m., Minneapolis time, or such other place, date and time as is mutually agreed by the parties. Notwithstanding the immediately preceding sentence, if on February 16, 2005, one or more of the conditions set forth in Article VII to the obligations of the parties to consummate the transactions contemplated by this Agreement shall not have 14 been satisfied or waived by the party or parties entitled to waive the condition, the Closing shall be delayed until the second business day following the satisfaction or waiver of all such conditions (subject to the parties' respective rights to terminate this Agreement pursuant to Article XI hereof). The date on which the Closing shall occur is hereinafter referred to as the "Closing Date" and the Closing shall for all purposes be considered effective as of 12:01 a.m., Minneapolis time, on the Closing Date. 3.02 CLOSING DELIVERIES. (a) At the Closing, subject to the terms and conditions contained in this Agreement, Robin Hood and the U.S. Sellers (as applicable) agree to deliver to Buyer the following: (i) certificates representing the Shares, duly endorsed by Robin Hood for transfer to Buyer or accompanied by stock powers duly executed by Robin Hood in proper form for transfer to Buyer; (ii) the resignations required pursuant to Section 4.02(g) of this Agreement; (iii) a bill of sale, assignment and assumption agreement in substantially the form attached hereto as Exhibit 3.02(a)(iii) (the "Bill of Sale"), dated the Closing Date and duly executed by each U.S. Seller; (iv) a lease assignment and assumption agreement for each Lease in substantially the form attached hereto as Exhibit 3.02(a)(iv) (each, a "Lease Assignment"), dated the Closing Date and duly executed by the applicable U.S. Seller; (v) limited warranty deeds for all U.S. Owned Real Property in substantially the forms attached hereto as Exhibit 3.02(a)(v), dated the Closing Date and duly executed by the applicable U.S. Seller, with the limited warranties expiring at such times as are consistent with the survival periods for the corresponding representations and warranties in this Agreement; (vi) an instrument of assignment with respect to each registered trademark, patent and copyright constituting Intellectual Property and each trademark application constituting Intellectual Property in substantially the forms attached hereto as Exhibit 3.02(a)(vi), dated the Closing Date and duly executed by the applicable U.S. Seller; (vii) a certificate, in form and substance reasonably satisfactory to counsel for Buyer, duly executed by the applicable U.S. Sellers and certifying facts that would exempt the transactions contemplated hereby from the provisions of the Foreign Investors Real Property Tax Act, as amended; (viii) such subordination, non-disturbance and attornment agreements, in the form prepared by the Buyer Entities, with the holders of fee mortgages or deeds of trust on each Leased Real Property listed on Exhibit 3.02(a)(viii) as Robin Hood and the U.S. Sellers shall have received, if any, after submission of a request for same made promptly after the date hereof; 15 (ix) such estoppel certificates, in the form prepared by the Buyer Entities, from the landlords on each Leased Real Property listed on Exhibit 3.02(a)(ix) as Robin Hood and the U.S. Sellers shall have received, if any, after submission of a request for same made promptly after the date hereof; (x) a seller's affidavit for the Canadian Owned Real Property in favor of the issuer of the title commitment relating thereto in substantially the form of Exhibit 3.02(a)(x); (xi) an instrument of transfer with respect to that certain Agreement, effective as of April 1, 2002, by and between Lemelson Medical, Education and Research Foundation, Limited Partnership and IMC in substantially the form attached hereto as Exhibit 3.02(a)(xi), dated the Closing Date and duly executed by IMC; and (xii) each other item required by this Agreement to be delivered by Sellers or any of them at Closing, it being understood that no instrument required to be delivered by Sellers or any of them under this Agreement shall require any Seller, any of their respective affiliates or any other person to make any additional representations, warranties or covenants, express or implied, not contained in this Agreement. (b) At the Closing, subject to the terms and conditions contained in this Agreement, the Buyer Entities agree to deliver to Sellers the following: (i) the Closing Cash Payment, payable as provided in Section 2.02; (ii) the Buyer Note, duly authorized, executed and issued by Buyer; (iii) the Note Purchase Agreement, duly executed by the Buyer Entities and completed as contemplated therein; (iv) guaranties in the forms attached to the Note Purchase Agreement as Exhibit 2 (the "Guaranties" and each a "Guaranty"), duly authorized, executed and issued by each of BBC and VCP, guaranteeing the obligations of Buyer under the Buyer Note; (v) the Bill of Sale, duly executed by Buyer; (vi) each Lease Assignment, duly executed by Buyer; (vii) resale and occasional-sale exemption certificates with respect to the Assets, in form and substance reasonably satisfactory to the U.S. Sellers, dated the Closing Date and duly executed by Buyer; and (viii) each other item required by this Agreement to be delivered by the Buyer Entities at Closing. 16 3.03 TRANSFER TAXES AND RECORDING FEES. Buyer, on the one hand, and Sellers, on the other hand, shall each be responsible for one-half of any sales, use, value-added, business transfer, goods and services, transfer, documentary, conveyancing or similar Taxes or expenses and all recording fees that may be imposed as a result of the sale and transfer of the Shares and the Assets to Buyer under this Agreement (including any stamp, duty or other Tax chargeable in respect of any instrument transferring property), together with any and all fines, penalties, interest and additions to Tax with respect thereto ("Transfer Taxes"), and Sellers and Buyer shall cooperate in timely making all filings, returns, reports and forms as may be required to comply with the provisions of laws related to Transfer Taxes. ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLERS AND SMUCKER 4.01 REPRESENTATIONS AND WARRANTIES OF SELLERS AND SMUCKER. "Material Adverse Effect" means any change or effect (other than those set forth in the Disclosure Schedule) that, individually or when taken together with all such changes or effects, has a material adverse effect on the business, operations, results of operations, properties or financial condition of the Business, taken as a whole (other than (i) incidents, occurrences, events, or conditions generally applicable to the industry in which the Business operates or changes in general economic conditions, (ii) changes or effects resulting from the public announcement of this Agreement, or (iii) changes or effects resulting from compliance with the terms of this Agreement) or materially impairs the ability of Sellers, taken as a whole, to consummate the transactions contemplated by this Agreement. Smucker and Sellers, jointly and severally, hereby represent and warrant to Buyer, except as set forth in the Disclosure Schedule accompanying this Agreement (the "Disclosure Schedule"), as follows: (a) Organization and Authority of Sellers. (i) Robin Hood is an unlimited company amalgamated, organized and subsisting under the laws of Nova Scotia. IMC and MBI are corporations organized, validly existing and in good standing under the laws of the State of Delaware. FCI is a corporation organized, validly existing and in good standing under the laws of the State of California. Each Seller has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All corporate acts and proceedings required to be taken to authorize the execution, delivery, and performance by each Seller of this Agreement and the consummation by such Seller of the transactions contemplated hereby have been properly taken. This Agreement has been duly executed and delivered by each Seller and, assuming due authorization, execution, and delivery of this Agreement by the Buyer Entities, constitutes a valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, and other similar laws affecting creditors' rights generally and by general principles of equity. 17 (ii) Each U.S. Seller has all requisite corporate power and authority to enable it to own, lease, or otherwise hold its properties and assets and to operate the U.S. Business (to the extent it operates the U.S. Business) as presently conducted, except where the failure to have such power and authority does not have a Material Adverse Effect. Robin Hood has all requisite corporate power and authority to enable it to own, lease or otherwise hold its properties and assets and to operate its business as presently conducted, except where the failure to have such power and authority does not have a Material Adverse Effect. Each U.S. Seller is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which Assets owned by it or the U.S. Business otherwise conducted by it requires such qualification and good standing, except where the failure to be so qualified or in good standing has no Material Adverse Effect (b) Organization and Authority of the Companies. Each of the Companies is a corporation incorporated, organized and subsisting under the laws of Ontario. Each of the Companies has all requisite corporate power and authority to enable it to own, lease or otherwise hold its properties and assets and to operate its business as presently conducted, except where the failure to have such power and authority does not have a Material Adverse Effect. Each of the Companies is licensed or qualified to do business in the jurisdictions set forth in Section 4.01(b) to the Disclosure Schedule, which is each jurisdiction in which the nature of its business or the ownership, leasing or holding of its properties makes such qualifications necessary, except such jurisdictions where the failure to be so licensed or qualified does not have a Material Adverse Effect. IMC has made available to Buyer true and complete copies of the articles, as amended to date, and the by-laws, as in effect on the date hereof, of each of the Companies. The minutes of the meetings of the shareholders and directors of each of the Companies made available by IMC to Buyer are correct and complete in all material respects. (c) The Shares. Robin Hood is, and immediately prior to the Closing will be, the registered and beneficial owner of all of the Shares, free and clear of any claims, liens, encumbrances, security interests, options, charges and rights of third parties except for rights of Buyer under this Agreement. The Shares consist of two common shares of Gourmet Baker and one common share of 980964. The Shares are not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such contract, agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting, dividend rights or disposition of the Shares, other than this Agreement. (d) Capital Stock of the Companies. The authorized capital stock of Gourmet Baker consists of an unlimited number of common shares of which two shares are duly authorized, validly issued and outstanding and fully paid and nonassessable. The authorized capital stock of 980964 consists of an unlimited number of preference shares and an unlimited number of common shares, of which one common share is duly authorized, validly issued and outstanding and fully paid and nonassessable. Such outstanding shares of capital stock of the Companies have not been issued in violation of any preemptive or similar rights. Except as set forth above in this Section 4.01(d), there are no shares of capital stock of the Companies outstanding. There are no outstanding warrants, options, agreements, convertible or exchangeable securities or other commitments pursuant to which any of Robin Hood, Gourmet Baker or 980964 is or may 18 become obligated to issue, sell or otherwise dispose of, or purchase, return, redeem or otherwise acquire, any shares of capital stock of the Companies other than this Agreement, and no capital stock of the Companies is reserved for issuance for any purpose. (e) Equity Interests. Neither Gourmet Baker nor 980964 directly or indirectly owns, or is a party to any contract or agreement to acquire, any capital stock of or other equity interests in any corporation, partnership or other entity. (f) Canadian Resident. Robin Hood is not a non-resident of Canada for purposes of Section 116 of the Income Tax Act (Canada). (g) No Conflicts. Subject to other applicable provisions of this Agreement, the execution, delivery, and performance by each Seller of this Agreement do not, and the consummation by such Seller of the transactions contemplated hereby will not (i) conflict with, or result in any violation of, any provision of the charter or bylaws of such Seller or either Company, or (ii) conflict with, result in any violation of, or constitute a default under, any instrument, contract, commitment, agreement, or arrangement to which such Seller or either Company is a party or by which it or any of its properties or assets is bound, or any judgment, order, writ, injunction, or decree to which such Seller or either Company has been specifically identified as subject, or any statute, law, ordinance, rule, or regulation applicable to it or any of its properties or assets (except in the case of this clause (ii) where such conflict, violation, or default has no Material Adverse Effect). No material consent, approval, license, permit, order, or authorization of, or registration, declaration, or filing with, any court, administrative agency or commission, or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by any Seller in connection with the execution, delivery, and performance by such Seller of this Agreement or the consummation by such Seller of the transactions contemplated hereby other than compliance with and filings under (w) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (x) the Competition Act (Canada), as amended (the "Competition Act"), (y) the Investment Canada Act (Canada), as amended (the "Investment Canada Act"), and (z) Canadian federal or provincial securities laws, if applicable. Notwithstanding any other provision of this Agreement, no representation is made as to whether any new licenses, permits or other approvals from any government or governmental agency (or any consents, approvals or waivers from any government or governmental agency with respect to the Licenses or the governmental licenses, permits, approvals or other authorizations held by the Companies) will be required as a result of the sale of Assets or the Shares to Buyer in order for Buyer to continue to conduct the U.S. Business and operate the Assets following the Closing in the manner in which the U.S. Business was conducted and the Assets were operated prior to Closing or for the Companies to continue to conduct their businesses and operate their assets following the Closing in the manner in which such businesses were conducted and such assets were operated prior to Closing. (h) Financial Information. Section 4.01(h) of the Disclosure Schedule sets forth (i) the Unaudited Consolidated Income Statements of the Business for fiscal year 2003, fiscal year 2004 and fiscal year 2005 year-to-date through September 25, 2004, and (ii) the Unaudited Consolidated Statements of Net Investment Assets of the Business as of the end of fiscal year 2003, the end of fiscal year 2004 and fiscal year 2005 year-to-date through September 25, 2004 19 (collectively, the "Financial Statements"). Except as expressly disclosed therein and for exclusions of the nature described therein, the Financial Statements fairly present, in all material respects, the assets and liabilities of the Business as of their dates and the results of operations of the Business for the periods set forth therein (subject, in the case of interim statements, to normal year-end and quarter-end adjustments) and have been prepared on a basis consistent with the principles historically applied in the preparation of the financial information of the Multifoods Foodservice and Bakery Products segment of Smucker that is included in Smucker's filings with the Securities and Exchange Commission (except for such adjustments thereto as are set forth in Section 4.01(h) of the Disclosure Schedule). Except as expressly provided in this Section 4.01(h), no representation is made by any Seller as to any financial information provided to the Buyer Entities, including any financial information set forth in the Confidential Information Memorandum provided to the Buyer Entities by Sellers' Banker (as defined in Section 4.01(ee)). Without limiting the generality of the foregoing, no representation is made as to the accuracy, fairness or reasonableness of any projections provided to the Buyer Entities or the assumptions used in preparing the same, or as to the likelihood that such projections will be achieved. (i) Taxes of the U.S. Sellers. (i) For purposes of this Agreement, (A) "Tax" or "Taxes" means all federal (U.S. and Canadian), state, provincial, local, municipal and foreign taxes and assessments and withholding obligations of any nature whatsoever and however denominated (including all duties, levies, assessments, reassessments, premiums, imposts or other governmental charges and all sales, profits, capital, use, occupancy, real or personal property, import, excise, payroll, health, franchise and goods and services taxes) including all interest, penalties, and additions imposed with respect to such amounts whether computed on a separate, combined, unitary, consolidated or any other basis; (B) "Code" means the Internal Revenue Code of 1986, as amended, and the regulations thereunder; (C) "Tax Return" or "Tax Returns" means returns, reports, information statements, elections and other documentation (including any additional or supporting material) filed or maintained, or required to be filed or maintained, in connection with the calculation, determination, assessment, or collection of any Tax; (D) "Pre-Closing Tax Period" means any tax period ending on or before the Closing Date, and with respect to a Straddle Period, any portion thereof ending on the Closing Date; (E) "Straddle Period" means any complete tax period of the parties that includes but does not end on the Closing Date; (F) "Income Taxes" means all Taxes based upon or measured by gross or net receipts or gross, net or taxable income or franchise Taxes imposed in lieu of such Taxes, including Taxes in the nature of minimum taxes, tax preference items, and alternative minimum taxes, and Taxes on capital or net worth or capital stock (other than any Taxes that are in the nature of sales, use, property, Transfer, recording and similar Taxes); and (G) "Excluded Taxes" means (i) any Income Taxes, sales and use Taxes, employment and payroll Taxes (including withholding) and value added Taxes of Sellers, (ii) any Income Taxes of the Companies for the Pre-Closing Tax Period and sales and use Taxes, employment and payroll Taxes (including withholding) and value added Taxes of the Companies for the Pre-Closing Tax Period, other than any such Tax incurred on the Closing Date in the ordinary course of business or as a result of transactions occurring after the transfer of the Shares on the Closing Date, (iii) any other Taxes of the U.S. 20 Sellers to the extent not attributable to the U.S. Business or the Assets, (iv) any liability of Sellers for Taxes arising in connection with the consummation of the transactions contemplated by this Agreement, (v) any and all Taxes of any person imposed on any Seller or either Company as a transferee or successor, by contract or pursuant to any law which relate to an event or transaction occurring before the Closing Date; and (vi) any liability of Sellers for the Taxes of any other person under Treasury Regulation 1.1502-6 (or any similar provision of state, local or foreign law). (ii) Each U.S. Seller, and any affiliated group (within the meaning of Section 1504 of the Code) of which any U.S. Seller is or has been a member, has filed or caused to be filed in a timely manner (within any applicable extension periods) all Income, sales, use, value-added and other Tax Returns that it has been required to file in accordance with applicable law. All Taxes that are required to be paid by the U.S. Sellers (whether or not reflected on such Tax Returns) have been paid in full or will be paid in full before the Closing Date. (iii) No U.S. Seller is currently a beneficiary of any extension of time to file a Tax Return with respect to the Assets. No Tax Returns filed by any U.S. Seller are the subject of pending audits, actions or proceedings as of the date of this Agreement nor, to the knowledge of any U.S. Seller, have any audits, actions or proceedings been proposed or threatened. No U.S. Seller has received, prior to the date of this Agreement, a notice of deficiency or assessment of additional Taxes, which notice or assessment remains unresolved. No U.S. Seller has extended the period for assessment or payment of any Tax, which has not since expired, nor has any U.S. Seller agreed to extend the statutory period of limitations on any Tax Return. (iv) No U.S. Seller has been a real property holding company within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. (v) None of the U.S. Sellers is a "foreign person" within the meaning of Section 1445 of the Code. (vi) There are no Liens for Taxes on the Assets. There are no Tax deficiencies of any kind assessed against or relating to the Assets with respect to any taxable period ending on or before the Closing Date. (vii) From January 1, 2000 to the date of this Agreement, no claim has been made by a Tax authority in any jurisdiction where a U.S. Seller does not file a Tax Return that it is, or may be, subject to taxation in that jurisdiction with respect to the Assets. (viii) Each U.S. Seller has complied in all material respects with all applicable laws, regulations and rules relating to the payment and withholding of Taxes and each U.S. Seller has, within the time required by law, withheld and paid over to the proper authorities, all amounts required to be so withheld and paid over under applicable laws. 21 (ix) There are no Tax sharing agreements or similar arrangements (whether oral or written) that include a U.S. Seller with respect to the Assets and no U.S. Seller has any liability to any Person with respect to any previously terminated Tax sharing agreement or similar arrangement involving the Assets. (j) Taxes of the Companies. (i) For purposes of this Agreement, "Canadian Tax Act" shall mean the Income Tax Act (Canada), as amended, and the regulations thereunder. (ii) The Companies have filed or will file when due all Income, sales, use, value-added, and other Tax Returns required to be filed by them on or before the date immediately preceding the Closing Date for Pre-Closing Tax Periods in accordance with applicable law. All Taxes that are required to be paid by the Companies before the Closing Date have been paid in full or will be paid in full before the Closing Date (whether or not reflected on such Tax Returns). All such Tax Returns are true, accurate and complete in all material respects. (iii) The Companies have withheld from each payment made to any of their present or former employees, officers and directors, and to all persons who are non-residents of Canada for the purposes of the Canadian Tax Act all amounts required by law to be withheld, and furthermore, have remitted such withheld amounts within the prescribed periods to the appropriate governmental body or have included any unremitted amounts withheld in the determination of Closing Net Working Capital. The Companies have remitted all Canada Pension Plan contributions, provincial pension plan contributions, employment insurance premiums, employer health taxes and other Taxes payable by the Companies in respect of their employees to the proper governmental body within the time required under the applicable legislation or have included any unremitted amounts in the determination of Closing Net Working Capital. The Companies have charged, collected and remitted on a timely basis all Taxes as required under applicable legislation on any sale, supply or delivery whatsoever, made by the Companies. (iv) No Tax Returns filed by the Companies are the subject of pending audits, proceedings or actions as of the date of this Agreement and, to the knowledge of the Companies, no audits, proceedings or actions have been proposed or threatened as of the date of this Agreement. The Companies have not received, prior to the date of this Agreement, a material notice of assessment or reassessment, which notice of assessment or reassessment remains unresolved. The Companies have not extended the period for assessment or payment of any Tax, which has not since expired. (v) From January 1, 2000 to the date of this Agreement, no claim has been made by a Tax authority in any jurisdiction that a Company does not file a Tax Return that it is, or may be, subject to taxation in that jurisdiction. 22 (vi) Section 4.01(j)(vi) of the Disclosure Schedule sets forth all jurisdictions in which the Companies have filed, or will file, Tax Returns for each taxable period, or portion thereof, ending on or before the Closing Date. (k) Title to Tangible Personal Property. A U.S. Seller has good and valid title, and will have good and valid title as of the Closing Date (except to the extent of dispositions of Assets not prohibited under Section 4.02(b) prior to Closing), to all Assets that are tangible personal property, and each Company has good and valid title, and will have good and valid title as of the Closing Date (except to the extent of dispositions of assets not prohibited under Section 4.02(b) prior to Closing), to all of its tangible personal property, in each case free and clear of all liens, security interests, restrictions and other encumbrances ("Liens"), except (i) mechanics', materialmen's, carriers', workmen's, warehousemen's, repairmen's, landlord's or other like Liens securing obligations that are not delinquent, (ii) Liens for Taxes and other governmental charges which are not due and payable or which may be paid without penalty, (iii) Liens evidenced by any mortgage, deed of trust, security agreement, financing statement, purchase money agreement, conditional sales contract, capital lease, operating lease or license which is described in the Disclosure Schedule or the non-disclosure of which therein does not constitute a misrepresentation under Section 4.01(o) of this Agreement, and (iv) imperfections of title and encumbrances which do not, individually or in the aggregate, materially impair the value or the continued use and operation in the current manner of the Assets or either Company's assets to which they relate or the Business as currently conducted (the Liens and other encumbrances described in clauses (i) through (iv) above (whether the same relate to real or personal property) being referred to collectively as "Permitted Liens"). (l) Real Property. Exhibit 1.02(a) sets forth a true and complete list of the U.S. Owned Real Property. Exhibit 1.02(b) sets forth a true and complete list of the Leases and the U.S. Leased Real Property. Section 4.01(l) of the Disclosure Schedule sets forth a complete list of all real property owned by the Companies (the "Canadian Owned Real Property"), and all real property leased by the Companies (the "Canadian Leased Real Property"; the U.S. Owned Real Property and the Canadian Owned Real Property are referred to collectively as the "Owned Real Property", and the U.S. Leased Real Property and the Canadian Leased Real Property are referred to collectively as the "Leased Real Property"; the Owned Real Property and the Leased Real Property are collectively referred to as the "Real Property"). None of the U.S. Sellers or either Company has done anything to encumber or imperil title to any of the Owned Real Property purported to be owned by it or to encumber or imperil its leasehold estate in any of the Leased Real Property purported to be leased by it, in each case from the date of acquisition of such title or estate by such person, respectively, except (x) Permitted Liens and (y) (A) mortgages, deeds of trust, security interests, easements, restrictive covenants, rights-of-way, encroachments and other Liens on any Real Property as disclosed by the Title Commitments (as defined in Section 7.01(f)) or any endorsement thereto or as disclosed by the documents and information made available by Sellers to Buyer in the electronic data room hosted by IntraLinks, in each case as of the date of this Agreement, (B) any conditions that may be shown by a current, accurate survey or physical inspection of the Real Property, (C) platting, subdivision, zoning, building and other similar restrictions, (D) unrecorded easements, restrictive covenants, rights-of-way, encroachments and other similar Liens on any Owned Real Property as disclosed by the Title Commitments or any endorsement thereto or as disclosed by the documents and information made available by Sellers 23 to Buyer in the electronic data room hosted by IntraLinks, in each case as of the date of this Agreement, and (E) reservations of coal, oil, gas, minerals and mineral interests, none of which items set forth in this clause (y) individually or in the aggregate materially interferes with the continued use and operation of the Real Property to which it relates substantially in the manner in which such Real Property is currently used and operated. There are no eminent domain or expropriation proceedings pending (with respect to which any Seller has been served or otherwise notified in writing) or, to the knowledge of any Seller, threatened in writing against any Real Property or any portions thereof. (i) Each U.S. Seller and Company has obtained all occupancy permits that are required by applicable laws with respect to the Real Property; (ii) the fixed or minimum rent set forth in each Lease (as amended and/or supplemented) is the actual fixed or minimum rent being paid by the applicable U.S. Seller or Company, and there are no separate agreements or understandings with respect to the same; and (iii) from January 1, 2002 to the date of this Agreement, no written notice of a material violation of any applicable laws affecting the Real Property or relating to the use or occupancy thereof by the Business has been given to Sellers or the Companies, nor does any Seller have knowledge of any such violation which has not been corrected. (m) Condition of the Assets and Canadian Assets. The facilities constituting a part of the Real Property, the other tangible Assets, and the tangible assets of the Companies are physically in operating condition (reasonable wear and tear and depreciation excepted), except where the failure to be in operating condition has no Material Adverse Effect or where the responsibility for correction, or for payment of the costs of correction, of the condition is the responsibility of the landlord or a tenant of any U.S. Seller or either Company. Except as expressly provided in this Section 4.01(m) and in Section 4.01(u), no further representation is made concerning the physical condition of any of the Real Property, any other Assets or any assets of either Company, all of which are being accepted "AS IS AND WHERE IS" as of the Closing (including all environmental aspects thereof, except as otherwise provided in Section 4.01(u)). All material tangible Assets and the material tangible assets of the Companies are in the possession of the U.S. Sellers or the Companies (as applicable) or under their control; provided, that at any given time, inventory is held by third parties, including co-packers and warehouses. (n) Intellectual Property. (i) The term "Business Intellectual Property" means all of the following that is owned by or licensed to a Company or a U.S. Seller which is used in the Business as currently conducted: (A) all currently subsisting material patents, patent applications, common law trademarks, trademark applications, trademark registrations, trade names, trade dress, common law service marks, service mark applications, service mark registrations, logos, together with all goodwill associated therewith, and copyright registrations and Internet domain names; (B) all material trade secrets and confidential 24 information (including customer lists, know-how, formulae, formulae in process or under research and development, recipes, recipes in process or under research and development, manufacturing and production processes, research, financial business information and marketing plans); and (C) information technologies (including software programs, data and related documentation); provided, however, that the term "Business Intellectual Property" shall not include any (x) information technologies licensed to a Company or a U.S. Seller under non-negotiated, non-exclusive licenses granted to end-user customers by third parties in the ordinary course of such third parties' businesses; and (y) intellectual property which is embedded in equipment or fixtures and which is licensed to a Company or a U.S. Seller under non-negotiated, non-exclusive licenses granted to customers by third parties in the ordinary course of such third parties' businesses. The term "Owned Business Intellectual Property" means all Business Intellectual Property owned by a Company or a U.S. Seller, and the term "Licensed Business Intellectual Property" means all Business Intellectual Property licensed to a Company or a U.S. Seller from a third party. Section 4.01(n)(i) of the Disclosure Schedule sets forth a complete and accurate list of all Owned Business Intellectual Property set forth in clause (A) of this Section 4.01(n)(i). (ii) (A) A Company or a U.S. Seller owns all of the Owned Business Intellectual Property; (B) a Company or a U.S. Seller has a valid and enforceable license to all of the material Licensed Business Intellectual Property pursuant to a contract a copy of which has been made available to Buyer; (C) from January 1, 2002 to the date of this Agreement, to the knowledge of Sellers, no written claim by any third party contesting the validity, enforceability or use by a Company or a U.S. Seller or ownership by (or, if applicable, license to) a Company or a U.S. Seller of any of the Business Intellectual Property has been made, is currently outstanding or is threatened (other than challenges by governmental intellectual property office examiners as part of the application process); (D) as of the date of this Agreement, to the knowledge of Sellers, no third party is infringing or misappropriating any of the Owned Business Intellectual Property or any of the Licensed Business Intellectual Property that is licensed to a Company or a U.S. Seller on an exclusive basis; (E) as of the date of this Agreement, to the knowledge of each Seller, neither any Company nor any U.S. Seller nor the conduct of the Business as currently conducted infringes, misappropriates or otherwise conflicts with any intellectual property rights or other rights of any third parties; and (F) as of the date of this Agreement, to the knowledge of each Seller, the continued operation by Buyer and the Companies immediately following the Closing of the Business as currently conducted (but subject to Section 6.03(c)) will not infringe, misappropriate or otherwise conflict with any intellectual property rights or other rights of any third parties except to the extent resulting from any failure to obtain all consents referred to in Section 6.01 or from the failure otherwise to satisfy all conditions to the transfer of all Assigned Contracts (or the applicable portions of the Dividable Contracts) to Buyer; in each of cases (A) through (F) except to the extent that exceptions to any of the foregoing, individually or in the aggregate, do not have a Material Adverse Effect. (iii) (A) A Company or a U.S. Seller, as the case may be, has taken all reasonably prudent actions necessary to maintain and protect the Owned Business 25 Intellectual Property so as to not materially adversely diminish or compromise the validity or enforceability of the Owned Business Intellectual Property; and (B) with respect to the Licensed Business Intellectual Property licensed from General Mills, Inc. and The Pillsbury Company to a U.S. Seller, the applicable U.S. Seller has taken all reasonably prudent actions, within the constraints of the applicable license agreement from General Mills, Inc. and The Pillsbury Company, necessary to maintain and protect such Licensed Business Intellectual Property so as to not materially adversely diminish or compromise the validity or enforceability of such Licensed Business Intellectual Property. (o) Contracts. Section 4.01(o) of the Disclosure Schedule describes all of the following agreements or contracts in effect as of the date of this Agreement to which either Company is a party or that are exclusively related to the U.S. Business and to which any U.S. Seller is a party (other than the Excluded Contacts): (i) an employment agreement, employment contract or severance agreement that is not terminable at will or upon not more than 30 days' notice by such U.S. Seller or such Company without penalty; (ii) a covenant not to compete or non-solicitation agreement that restricts such U.S. Seller or such Company in the operation of the Business as presently conducted; (iii) an agreement or contract with any affiliate of such U.S. Seller or such Company or any current or former officer or director of such U.S. Seller or such Company or of any affiliate of such U.S. Seller or such Company, other than (A) employment agreements, employment contracts or severance agreements covered by Section 4.01(o)(i) above, (B) U.S. Sellers' Plans, and (C) agreements relating to intercompany loans or advances; (iv) an operating lease (as lessor or lessee) of any Leased Real Property or any other real or tangible personal property calling for annual payments in excess of $25,000 per