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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
CHIQUITA BRANDS INTERNATIONAL, INC.
AND
PERFORMANCE FOOD GROUP COMPANY
FEBRUARY 22, 2005
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TABLE OF CONTENTS
Page
----
ARTICLE 1. PURCHASE AND SALE OF
SHARES........................................1
1.1 Transfer of
Shares......................................1
ARTICLE 2.
CONSIDERATION......................................................1
2.1 Purchase
Price..........................................1
2.2 Other
Payments..........................................1
2.3 EBITDA
Adjustment.......................................4
ARTICLE 3. CLOSING; OBLIGATIONS OF THE
PARTIES................................5
3.1 Closing
Date............................................5
3.2 Obligations of the Parties at the
Closing...............5
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF
SELLER...........................6
4.1 Corporate
Status........................................6
4.2
Authority...............................................7
4.3 No
Conflict.............................................7
4.4
Capitalization..........................................7
4.5 Financial
Statements....................................9
4.6 Real
Property..........................................10
4.7
Assets.................................................11
4.8 Material
Contracts.....................................11
4.9 Intellectual
Property..................................13
4.10 Litigation, Claims and
Proceedings.....................14
4.11 Environmental and Safety and Health
Matters............14
4.12 Compliance with
Law....................................16
4.13 Employee Matters and Benefit
Plans.....................17
4.14 Taxes18
4.15 Absence of Undisclosed
Liabilities.....................20
4.16 Absence of Certain
Changes.............................20
4.17 Labor
Matters..........................................20
4.18 Customers and
Suppliers................................21
4.19 Accounts
Receivable....................................22
4.20 Affiliated
Transactions................................22
4.21
Insurance..............................................22
4.22
Payments...............................................22
4.23 Finder's
Fee...........................................23
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF
PURCHASER.......................23
5.1 Corporate
Status.......................................23
5.2
Authority..............................................23
5.3 No
Conflict............................................23
5.4 Compliance with
Law....................................24
5.5 Sufficient
Funds.......................................24
5.6 Finder's
Fee...........................................24
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5.7 No
Reliance............................................24
5.8 Investment
Intent......................................25
ARTICLE 6. COVENANTS 25
6.1 Interim Operations of the
Companies....................25
6.2
Consents...............................................26
6.3
Publicity..............................................27
6.4 Access to Records and
Properties.......................28
6.5 Further
Action.........................................30
6.6
Expenses...............................................31
6.7 Notification of Certain
Matters........................31
6.8 Employee Benefit
Plans.................................31
6.9 Non-Competition, Non-Solicitation and
Non-Disclosure...34
6.10 Intercompany
Indebtedness..............................35
6.11 Debt and
Guarantees....................................36
6.12 Supplements to Disclosure
Schedule.....................36
6.13
Non-Solicitation.......................................36
6.14 Obligations with Respect to Certain Insurance
Claims...37
6.15 Obligation with Respect to Fresh
Advantage.............38
ARTICLE 7. CLOSING
CONDITIONS................................................38
7.1 Conditions to Obligations of Seller and
Purchaser to Consummate the Transaction................38
7.2 Additional Conditions to Obligations of
Purchaser......38
7.3 Additional Conditions to Obligations of
Seller.........40
ARTICLE 8. CERTAIN TAX
MATTERS...............................................41
8.1 Responsibility for Filing Tax
Returns..................41
8.2 Cooperation on Tax
Matters.............................41
8.3 Tax Sharing
Agreements.................................42
8.4 Tax
Indemnifications...................................42
8.5 Certain Non-income
Taxes...............................43
8.6 Section 338(h)(10)
Election............................44
ARTICLE 9. ADDITIONAL
INDEMNIFICATION........................................44
9.1
Survival...............................................44
9.2 Additional
Indemnification.............................44
9.3 Indemnification
Procedures.............................46
9.4 Indemnification
Limitations............................47
ARTICLE 10.
TERMINATION......................................................48
10.1
Termination............................................48
10.2 Effect of Termination and
Abandonment..................49
ARTICLE 11.
MISCELLANEOUS....................................................49
11.1 Intentionally
Deleted..................................49
11.2
Notices................................................49
11.3 Certain Definitions;
Interpretation....................50
11.4
Severability...........................................55
11.5 Entire Agreement; No Third-Party
Beneficiaries.........55
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11.6 Amendment;
Waiver......................................55
11.7 Binding Effect;
Assignment.............................55
11.8 Disclosure
Schedule....................................55
11.9 Governing Law;
Jurisdiction............................56
11.10
Enforcement............................................56
11.11
Construction...........................................56
11.12
Counterparts...........................................56
[The Disclosure Schedule is not included herewith. A copy of the
Disclosure
Schedule will be furnished supplementally to the Securities and
Exchange
Commission upon request.]
iii
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INDEX OF DEFINED TERMS
Term Section
338(h)(10)
Entity.........................................................8.6
Accountants.......................................................2.2(d)(iii)
Accounts
Receivable......................................................4.19
Acquisition
Proposal.....................................................6.13
Action.............................................................11.3(a)(i)
Actual Payment
Amount..................................................2.2(a)
Adjustment
Amount......................................................2.2(c)
affiliate.........................................................11.3(a)(ii)
Affiliated
Group.................................................11.3(a)(iii)
Agreement............................................................Recitals
Assets....................................................................4.7
Audited
Statements.....................................................6.4(b)
Average Working
Capital................................................2.2(b)
Business...............................................................4.4(d)
Cause..................................................................6.8(d)
CBAs..................................................................4.17(a)
Clayton County
Arrangements........................................11.3(a)(v)
Cleanup............................................................11.3(a)(v)
Closing...................................................................3.1
Closing
Date..............................................................3.1
Closing Date Financial
Statements...................................2.2(d)(i)
Closing Date Working
Capital........................................2.2(d)(i)
Code..............................................................11.3(a)(vi)
Commitment
Letter.........................................................5.5
Companies............................................................Recitals
Companies Covered
Employees............................................6.8(b)
Companies Owned Intellectual
Property..................................4.9(b)
Companies Used Intellectual
Property...................................4.9(b)
Company
Plans.........................................................4.13(a)
Company
Release..................................................11.3(a)(vii)
Confidential
Material..................................................6.9(c)
Confidentiality
Agreement..............................................6.4(a)
Contract............................................................4.8(a)(i)
control.........................................................11.3(a)(viii)
DOJ....................................................................6.2(a)
EBITDA............................................................11.3(a)(ix)
Effective
Time............................................................3.1
Encumbrances..............................................................4.3
Environmental
Claim................................................11.3(a)(x)
Environmental
Law.....................................................4.11(a)
ERISA.............................................................11.3(a)(xi)
ERISA
Affiliate.......................................................4.13(f)
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Estimated
Payment......................................................2.2(a)
Estimated Payment Adjustment
Amount....................................2.2(a)
Financial
Statements...................................................4.5(a)
FTC....................................................................6.2(a)
GAAP...................................................................4.5(b)
Goldman
Fee..............................................................4.23
Governmental
Authority...........................................11.3(a)(xii)
Governmental
Order..............................................11.3(a)(xiii)
Guarantees...............................................................6.11
Hazardous
Substance...................................................4.11(a)
HSR
Act...................................................................4.3
Indemnified
Party......................................................9.3(a)
Indemnifying
Party.....................................................9.3(a)
Intercompany
Notes...............................................11.3(a)(xiv)
Key Customers and
Suppliers..............................................4.18
Key
Employees.........................................................4.13(h)
knowledge.........................................................11.3(a)(xv)
Law..............................................................11.3(a)(xvi)
Leased Real
Property...................................................4.6(c)
Losses.................................................................9.2(a)
Material
Contracts.....................................................4.8(a)
Merrill Lynch
Fee........................................................4.23
Monthly
Statements..................................................2.2(d)(i)
Owned Real
Property....................................................4.6(b)
Permit..........................................................11.3(a)(xvii)
Permitted
Encumbrances.................................................4.6(b)
Person.........................................................11.3(a)(xviii)
PICL.....................................................................6.14
Pre-Closing
Claims.......................................................6.14
Preliminary EBITDA
Statement...........................................2.3(a)
Purchase
Price............................................................2.1
Purchaser............................................................Recitals
Purchaser Indemnified
Parties..........................................9.2(a)
Purchaser Material Adverse
Effect................................11.3(a)(xix)
Purchaser's 401(k)
Plan................................................6.8(e)
Real
Property..........................................................4.6(c)
Real Property
Leases...............................................4.6(a)(ii)
Reference Balance
Sheet................................................4.5(a)
Related
Parties..........................................................4.20
Representatives........................................................6.9(c)
Seller...............................................................Recitals
Seller Indemnified
Parties.............................................9.2(b)
Seller Material Adverse
Effect...................................11.3(a)(xxi)
Seller
Plans..........................................................4.13(a)
Seller
Release....................................................11.3(a)(xx)
Shares....................................................................1.1
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Straddle
Period...................................................8.4(a)(iii)
Subsidiary......................................................11.3(a)(xxii)
Survival
Period...........................................................9.1
Tax
Return.......................................................11.3(a)(xxv)
Taxes..........................................................11.3(a)(xxiii)
Taxing
Authority................................................11.3(a)(xxiv)
Termination
Date......................................................10.1(b)
Third-Party
Claim......................................................9.3(a)
Threshold
Amount..........................................................9.4
WC Adjustment
Amount...................................................2.2(b)
Working
Capital........................................................2.2(b)
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<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made this 22nd
day of
February, 2005, by and between Chiquita Brands International,
Inc., a New
Jersey corporation ("Purchaser"), and Performance Food Group
Company, a
Tennessee corporation ("Seller").
WHEREAS, Seller owns all of the issued and outstanding shares of
the
capital stock of Fresh International Corp., a Delaware
corporation, Fresh
Advantage, Inc., a Virginia corporation, Redi-Cut Foods, Inc.,
an Illinois
corporation, and K.C. Salad Holdings, Inc., a Missouri
corporation
(collectively, the "Companies"); and
WHEREAS, Purchaser desires to acquire from Seller, and Seller
desires
to sell to Purchaser, all of the issued and outstanding shares
of the capital
stock of the Companies upon and subject to the terms and
conditions contained
in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and
agreements herein contained, the parties agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF SHARES
1.1 TRANSFER OF SHARES. Subject to all of the terms and
conditions of
this Agreement, at the Closing, Seller hereby agrees to sell,
transfer and
convey to Purchaser, and Purchaser agrees to purchase and
acquire from Seller,
free and clear of all Encumbrances (as defined in Section 4.3),
100 shares of
common stock, no par value, of Fresh International Corp., 1,000
shares of
common stock, par value $0.01 per share, of Fresh Advantage,
Inc., 1,000 shares
of Class A common stock, no par value, of Redi-Cut Foods, Inc.,
and 1,000
shares of common stock, par value $0.01 per share, of K.C. Salad
Holdings,
Inc., which constitute all of the issued and outstanding shares
of capital
stock of the Companies (collectively, the "Shares").
ARTICLE 2.
CONSIDERATION
2.1 PURCHASE PRICE. The purchase price (the "Purchase Price")
for the
Shares shall be $855,000,000, subject to adjustment pursuant to
Section 2.3, if
applicable. At the Closing (as defined below), Purchaser shall
deliver the
Purchase Price to Seller by wire transfer of immediately
available funds
pursuant to the wire transfer instructions provided by
Seller.
2.2 OTHER PAYMENTS.
(a) Payment of Cash and Outstanding Checks in Excess of
Deposits.
Purchaser agrees that it will pay to Seller at Closing an amount
equal
to the estimated amount of the following balance sheet line
items (i)
cash; and (ii) "outstanding checks (issued by Seller in payment
of
obligations of the Companies
<PAGE>
and Subsidiaries) in excess of deposits" as of the most
recently
completed four or five-week fiscal period prior to the Closing
Date
for which financial statements of the Companies and their
Subsidiaries
prepared in accordance with GAAP consistently applied with
the
Financial Statements are available (the "Estimated Payment").
The
"Estimated Payment Adjustment Amount" (which may be a positive
or
negative number) will be equal to the amount determined by
subtracting
the actual amount of (i) cash; and (ii) "outstanding checks
(issued by
Seller in payment of obligations of the Companies and
Subsidiaries) in
excess of deposits" as of the Closing Date as set forth in
the
applicable line items in the Closing Date Financial Statements
(the
"Actual Payment Amount") from the Estimated Payment.
(b) Working Capital Adjustment Amount. "Working Capital" as of
a
given date shall mean the amount calculated by subtracting the
current
liabilities of the Companies and their Subsidiaries
(including
"outstanding checks (issued by Seller in payment of obligations
of the
Companies and Subsidiaries) in excess of deposits," but
excluding (i)
liabilities for income taxes, (ii) capital lease obligations,
(iii)
interest payable, (iv) the current portion of long-term debt,
(v)
intercompany payables owing to Seller or its Subsidiaries and
(vi) any
Seller insurance allocation accrual), as of that date from the
current
assets of the Companies and their Subsidiaries (other than (i)
cash,
(ii) current deferred income tax assets, (iii) any other income
Tax
assets and (iv) intercompany receivables owed by Seller or
its
Subsidiaries) as of that date; provided, that, for the avoidance
of
doubt, calculations of inventory and accounts receivable shall
be net
of the applicable reserve. The "Average Working Capital" of
the
Companies and their Subsidiaries shall be equal to the average
of the
Working Capital as of the last day of each of the 12 most
recently
completed four or five-week fiscal periods prior to the Closing
Date
for which internally prepared financial statements of the
Companies
and their Subsidiaries prepared in accordance with GAAP
consistently
applied with the Financial Statements are available. The "WC
Adjustment Amount" (which may be a positive or negative number)
will
be equal to the amount determined by subtracting the Closing
Date
Working Capital (as defined below) from the Average Working
Capital.
For the avoidance of doubt, Seller shall be fully responsible
for the
payment of, and shall make payment when due on, any
"outstanding
checks in excess of deposits" as of the Closing Date to the
extent
such amount has been included in the Estimated Payment and the
Actual
Payment Amount. An example of the internally prepared
financial
statements and calculation of Working Capital as of January 1,
2005 is
attached as Section 2.2(b) of the Disclosure Schedule.
(c) Post-Closing Payment. The Estimated Payment Adjustment
Amount
and the WC Adjustment Amount when added together (which may be
a
positive or negative number) shall collectively be referred to
as the
"Adjustment Amount." If the Adjustment Amount is positive,
the
Adjustment Amount shall be paid by wire transfer by Seller to
an
account specified by Purchaser. If the Adjustment Amount is
negative,
the Adjustment Amount (treated as if it were a positive number)
shall
be paid by wire transfer by Purchaser to an account
2
<PAGE>
specified by Seller. All payments shall be made together with
interest
at a rate of 3% per annum, which interest shall begin accruing
on the
Closing Date and end on the date that the payment is made.
Within
three business days after the calculation of the Actual Payment
Amount
and Closing Date Working Capital becomes binding and conclusive
on the
parties pursuant to Section 2.2(d), Seller or Purchaser, as the
case
may be, shall make the wire transfer payment provided for in
this
Section 2.2(c).
(d) Adjustment Procedure.
(i) Seller shall prepare financial statements (including a
combined balance sheet as of the Closing Date and a combined
statement of operations from January 2, 2005 through the
Closing
Date) (the "Closing Date Financial Statements") of the
Companies
and their Subsidiaries as of the Closing Date in accordance
with
GAAP consistently applied with the Financial Statements.
Seller
shall then determine (A) the Actual Payment Amount and the
Working Capital as of the Closing Date (the "Closing Date
Working
Capital") based upon the Closing Date Financial Statements
and
(B) the Average Working Capital based on the financial
statements
of the Companies and their Subsidiaries prepared in
accordance
with GAAP consistently applied with the Financial Statements
for
each of the 12 most recently completed four or five-week
fiscal
periods prior to the Closing Date for which internally
prepared
financial statements of the Companies and their Subsidiaries
prepared in accordance with GAAP consistently applied with
the
Financial Statements are available (the "Monthly
Statements").
Seller shall deliver the Closing Date Financial Statements,
the
Monthly Statements and its determination of the Actual
Payment
Amount, the Average Working Capital and the Closing Date
Working
Capital (which shall include a description in reasonable
detail
of the components and amounts thereof) to Purchaser within
thirty
(30) days following the Closing Date.
(ii) If within thirty (30) days following delivery of the
Closing Date Financial Statements, the Monthly Statements and
the
calculation of the Actual Payment Amount, the Average
Working
Capital and the Closing Date Working Capital, Purchaser has
not
given Seller written notice of its objection as to the
Actual
Payment Amount, the Average Working Capital and/or the
Closing
Date Working Capital calculation (which notice shall state
in
reasonable detail the basis of Purchaser's objection), then
the
Actual Payment Amount, the Average Working Capital and
Closing
Date Working Capital calculated by Seller shall be binding
and
conclusive on the parties and be used in computing the
Estimated
Payment Adjustment Amount and the WC Adjustment Amount,
respectively.
(iii) If Purchaser duly gives Seller such notice of
objection, and if Seller and Purchaser fail to resolve the
issues outstanding with respect to
3
<PAGE>
the Closing Date Financial Statements and the calculation of
the
Actual Payment Amount, the Average Working Capital and/or
the
Closing Date Working Capital within thirty (30) days of
Seller's
receipt of Purchaser's objection notice, Seller and
Purchaser
shall submit the issues remaining in dispute to Deloitte &
Touche
LLP, independent public accountants (the "Accountants"), for
resolution in accordance with the terms of the Agreement and
in
compliance with GAAP consistently applied with the Financial
Statements. If issues are submitted to the Accountants for
resolution, (i) Seller and Purchaser shall furnish or cause to
be
furnished to the Accountants such work papers and other
documents
and information relating to the disputed issues as the
Accountants may request and are available to that party or
its
agents and shall be afforded the opportunity to present to
the
Accountants any material relating to the disputed issues and
to
discuss the issues with the Accountants; (ii) the
determination
by the Accountants, as set forth in a notice to be delivered
to
both Seller and Purchaser within sixty (60) days of the
submission to the Accountants of the issues remaining in
dispute,
shall be final, binding and conclusive on the parties and
shall
be used in the calculation of the Actual Payment Amount, the
Average Working Capital and/or the Closing Date Working
Capital,
as applicable; and (iii) Seller and Purchaser will each bear
fifty percent (50%) of the fees and costs of the Accountants
for
such determination.
2.3 EBITDA ADJUSTMENT.
(a) Concurrently with the delivery to Purchaser of the
Audited
Statements, Seller shall deliver to Purchaser a preliminary
statement
("Preliminary EBITDA Statement") of the EBITDA based on the
Audited
Statements (which shall include a description in reasonable
detail of
the components and amounts thereof).
(b) If within ten (10) days following delivery of the
Preliminary
EBITDA Statement, Purchaser has not given Seller written notice
of its
objection as to the calculation of EBITDA (which notice shall
state in
reasonable detail the basis of Purchaser's objection), then the
EBITDA
calculated by Seller shall be binding and conclusive on the
parties
and be used in computing any adjustment of the Purchase Price
pursuant
to this Section 2.3.
(c) If Purchaser duly gives Seller such notice of objection,
and if Seller and Purchaser fail to resolve the issues
outstanding
with respect to the Preliminary EBITDA Statement and the
calculation
of the EBITDA within ten (10) days of Seller's receipt of
Purchaser's objection notice, Seller and Purchaser shall submit
the
issues remaining in dispute to the Accountants for resolution
in
accordance with the terms of the Agreement and consistent with
the
definition of EBITDA set forth herein. If issues are submitted
to
the Accountants for resolution: (i) Seller and Purchaser
shall
furnish or cause to be furnished to the Accountants such work
papers
and other documents and information relating to the disputed
issues
as the Accountants may request and are available to that party
or
its agents and shall be afforded the opportunity to present to
the
Accountants any material relating to
4
<PAGE>
the disputed issues and to discuss the issues with the
Accountants;
(ii) the determination by the Accountants, as set forth in a
notice to
be delivered to both Seller and Purchaser within ten (10) days
of the
submission to the Accountants of the issues remaining in
dispute,
shall be final, binding and conclusive on the parties and shall
be
used in the calculation of any adjustment of the Purchase
Price
pursuant to this Section 2.3; and (iii) Seller and Purchaser
will each
bear fifty percent (50%) of the fees and costs of the
Accountants for
such determination.
(d) In the event the amount of EBITDA set forth in Section
2.3(d)
of the Disclosure Schedule (which shall include a description
in
reasonable detail of the components and amounts thereof,
including the
amount of any corporate allocation charge and any insurance
allocation
charge) exceeds by more than $4,000,000 the amount of EBITDA
based on
the Audited Statements as finally determined pursuant to this
Section
2.3, the Purchase Price shall be reduced by an amount equal to
the
product of (i) the difference between the amount of EBITDA set
forth
in Section 2.3(d) of the Disclosure Schedule and the amount of
EBITDA
based on the Audited Statements as finally determined pursuant
to this
Section 2.3 and (ii) 8.65. For the avoidance of doubt, an
example of
the calculation of EBITDA for the year ended January 1, 2005 is
set
forth in Section 2.3(d) of the Disclosure Schedule.
ARTICLE 3
CLOSING; OBLIGATIONS OF THE PARTIES
3.1 CLOSING DATE. The closing (the "Closing") shall take place
at
10:00 a.m., local time, at the offices of Bass, Berry & Sims
PLC, Nashville,
Tennessee, on the later of (i) five (5) business days following
satisfaction or
waiver of all conditions to Closing set forth in Article 7
hereof (other than
those conditions that by their nature have to be satisfied at
Closing (but
subject to the satisfaction or waiver of those conditions)) or
(ii) 45 days
after the date of Purchaser's receipt of the Audited Statements
(as defined in
Section 6.4(b)) (the "Closing Date"). The transfer shall be
deemed to have
become effective at 12:01 a.m., California time on the Closing
Date (the
"Effective Time").
3.2 OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, Purchaser shall deliver to Seller:
(i) the Purchase Price as specified in Section 2.1,
plus the Estimated Payment;
(ii) a copy of resolutions of the Board of Directors
of Purchaser, certified by Purchaser's Secretary,
authorizing the execution, delivery and performance of this
Agreement and the other documents
5
<PAGE>
referred to herein to be executed by Purchaser, and the
consummation of the transactions contemplated hereby; and
(iii) a duly executed copy of the Company Release.
(b) At the Closing, Seller will deliver to Purchaser:
(i) stock certificates for the Shares, which certificates
shall be duly endorsed to Purchaser or accompanied by duly
executed stock powers;
(ii) a copy of resolutions of the Board of Directors of
Seller, certified by Seller's Secretary, authorizing the
execution, delivery and performance of this Agreement and
the
other documents referred to herein to be executed by Seller,
and
the consummation of the transactions contemplated hereby;
(iii) a duly executed copy of the Seller Release;
(iv) written resignations, effective as of the Closing
Date, from any directors, officers or managing members of
the
Companies and the Subsidiaries requested by Purchaser to
resign
as of the Closing;
(v) an opinion of Bass, Berry & Sims PLC in form and
substance reasonably satisfactory to Purchaser, or, with
respect
to certain matters, opinions of local counsel reasonably
satisfactory to Purchaser or of the general counsel of the
Seller
or the Companies; and
(vi) such other certificates, documents and instruments as
Purchaser may reasonably request in connection with the
consummation of the transactions contemplated hereby.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
4.1 CORPORATE STATUS. Each of the Companies and each Subsidiary
of the
Companies is duly organized, validly existing and in good
standing under the
laws of the jurisdiction of its incorporation or organization
and each (a) has
all requisite corporate or limited liability company power and
authority to
own, operate or lease its properties and assets and to carry on
its business as
it is now being conducted, and (b) is duly qualified to do
business and is in
good standing in each of the jurisdictions listed on Section 4.1
of the
Disclosure Schedule, which includes each jurisdiction in which
the ownership,
operation or leasing of its properties and assets and the
conduct of its
business requires it to be so qualified, licensed or authorized,
except where
the failures to have such power and authority or to be so
qualified, licensed
or authorized would not have a Seller Material Adverse Effect.
Seller has made
available to Purchaser a copy of the certificate
6
<PAGE>
of incorporation and bylaws (or similar organization documents),
as amended, of
the Companies and each of their Subsidiaries, each as in effect
on the date
hereof.
4.2 AUTHORITY. Seller has all requisite corporate power and
authority
to enter into this Agreement and to consummate the transactions
contemplated
hereby. The execution and delivery of this Agreement by Seller
and the
consummation of the transactions contemplated hereby have been
duly and validly
authorized by the Board of Directors of Seller and no other
corporate
proceedings are necessary to authorize this Agreement or to
consummate the
transactions contemplated hereby. This Agreement has been duly
executed and
delivered by Seller, and (assuming due authorization and
delivery by Purchaser)
this Agreement constitutes a legal, valid and binding obligation
of Seller
enforceable against it in accordance with its terms, subject to
general
principles of equity and except as the enforceability thereof
may be limited by
applicable bankruptcy, insolvency, reorganization or other
similar laws of
general application relating to creditors' rights.
4.3 NO CONFLICT. Except as set forth in Section 4.3 of the
Disclosure
Schedule and except for the notification requirements of the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules
and regulations
promulgated thereunder (the "HSR Act"), the execution, delivery
and performance
of this Agreement by Seller and the consummation by Seller of
the transactions
contemplated hereby will not (a) violate, conflict with or
result in the breach
of any term or provision of the charter or bylaws (or similar
organizational
documents) of Seller, any of the Companies or any of the
Subsidiaries, (b)
conflict with or violate any Law applicable to Seller, the
Companies or any
Subsidiary or any of their respective assets, properties or
businesses, (c)
result in the creation of any Encumbrance (as defined below) on
the Shares, (d)
require any action, consent, approval or authorization by, or
any other order
of, filing with or notification to, any Governmental Authority
or (e) conflict
with or violate, result in the breach of any term or provision
of, or
constitute a default (or event which with the giving of notice
or lapse of
time, or both, would become a default) under, or give to others
any rights of
termination, amendment, acceleration, suspension, revocation or
cancellation
of, or result in the creation of any mortgage, pledge,
hypothecation, claim,
security interest, encumbrance, interest, option, lien or other
restriction
(collectively, "Encumbrances") on any of the assets or
properties of Seller,
the Companies or any Subsidiary pursuant to, in the case of
clause (e), any
material agreement or arrangement to which Seller is a party or
by which it is
bound or any Material Contract, except for immaterial
violations, conflicts,
breaches or defaults or violations, conflicts, breaches or
defaults which would
occur as a result of the business or activities in which
Purchaser is or
proposes to be engaged or as a result of any acts or omissions
by, or the
status of any facts pertaining to, Purchaser.
4.4 CAPITALIZATION.
(a) The authorized and outstanding capital stock of the
Companies is set forth in Section 4.4(a) of the Disclosure
Schedule.
All of the Companies' issued and outstanding stock is duly
authorized, validly issued, fully paid, nonassessable, free of
any
preemptive rights, have been issued in compliance with
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<PAGE>
applicable Law and is held of record and beneficially by Seller,
free
and clear of any Encumbrance. The Shares constitute all of the
issued
and outstanding capital stock of the Companies.
(b) Except as set forth in Section 4.4(b) of the Disclosure
Schedule, there are (i) no outstanding obligations, options,
warrants,
convertible securities or other rights, agreements, arrangements
or
commitments of any kind relating to the capital stock of the
Companies
or obligating the Companies to issue or sell or otherwise
transfer any
shares of capital stock of, or any other interest in, the
Companies,
(ii) no outstanding obligations of the Companies to repurchase,
redeem
or otherwise acquire any shares of their respective capital
stock or
to provide funds to, or make any investment (in the form of a
loan,
capital contribution or otherwise) in, any other Person or (iii)
no
voting trusts, stockholder agreements, proxies or other
agreements or
understandings in effect with respect to the voting or transfer
of any
of their respective capital stock.
(c) Section 4.4(c) of the Disclosure Schedule sets forth a
true
and complete list of all Subsidiaries of the Companies, listing
for
each Subsidiary its name, its jurisdiction of organization,
the
percentage of stock or other equity interest of each subsidiary
owned
by the Companies or a Subsidiary and the authorized and
outstanding
capital stock of each such Subsidiary. Other than the
Subsidiaries or
as otherwise set forth in Section 4.4(c) of the Disclosure
Schedule,
there are no other corporations, partnerships, joint
ventures,
associations or other similar entities in which the Companies
own, of
record or beneficially, any direct or indirect equity or other
similar
interest or any right (contingent or otherwise) to acquire the
same.
All of the issued and outstanding shares (or voting securities)
of
each of the Subsidiaries are validly issued, fully paid,
nonassessable, and free of any preemptive rights. Except as set
forth
in Section 4.4(c) of the Disclosure Schedule, (i) the Companies
own
beneficially and of record all of the outstanding shares of
capital
stock (or voting securities) of each Subsidiary free and clear
of any
Encumbrances, (ii) there are no outstanding obligations,
options,
warrants, convertible securities or other rights, agreements
or
commitments of any kind relating to the capital stock of any
Subsidiary or obligating the Companies or any Subsidiary to
issue or
sell or otherwise transfer any shares of capital stock of, or
any
other interest in, any Subsidiary, (iii) there are no
outstanding
obligations of the Subsidiaries to repurchase, redeem or
otherwise
acquire any shares of their respective capital stock or to
provide
funds to, or make any investment (in the form of a loan,
capital
contribution or otherwise) in, any other Person, and (iv) there
are no
voting trusts, stockholder agreements, proxies or other
agreements or
understandings in effect with respect to the voting or transfer
of any
of their respective capital stock.
(d) Except as set forth on Section 4.4(d) of the Disclosure
Schedule, the "Fresh Cut" business of Seller as such business
is
described in Seller's public filings with the United States
Securities
and Exchange Commission (the "Business") is conducted
exclusively by
the Companies and the Subsidiaries. At Closing, the assets
and
properties of the Companies and the Subsidiaries will
8
<PAGE>
constitute substantially all of the tangible and intangible
property
historically used by them.
4.5 FINANCIAL STATEMENTS.
(a) Seller has made available to Purchaser true and complete
copies of (i) the audited combined balance sheets as of January
3,
2004 and December 28, 2002 and related audited combined
statements of
earnings, cash flows and Seller's net investment for the
Companies and
their Subsidiaries for the fiscal years then ended, and (ii)
the
unaudited combined balance sheet as of January 1, 2005 and
related
unaudited combined statements of earnings and statement of cash
flows
for the Companies and their Subsidiaries for the year ended
January 1,
2005 (collectively, the "Financial Statements"). The January 1,
2005
balance sheet is referred to herein as the "Reference Balance
Sheet."
(b) The Financial Statements (i) have been prepared based on
the
books and records of the Companies and their Subsidiaries in
accordance with United States generally accepted accounting
principles
("GAAP") and the Companies' normal accounting practices,
consistent
with past practice (except as may be indicated therein or in the
notes
or schedules thereto), (ii) except with respect to the
unaudited
Financial Statements described under Section 4.5(a)(ii), are
in
accordance with Regulation S-X of the Securities Exchange Act of
1934,
as amended, and (iii) present fairly, in all material respects,
the
combined financial condition, combined results of operations
and
combined statements of cash flow of the Companies and their
Subsidiaries as of the dates indicated or for the periods
indicated.
(c) Seller's internal control over financial reporting is
sufficient in all material respects to provide reasonable
assurance
(i) that transactions of the Companies and the Subsidiaries
are
recorded as necessary to permit preparation of financial
statements in
conformity with GAAP, (ii) that receipts and expenditures of
the
Companies and the Subsidiaries are being made only in accordance
with
the authorization of management, and (iii) regarding prevention
or
timely detection of the unauthorized acquisition, use or
disposition
of the Assets that could materially affect the combined
financial
statements of the Companies and the Subsidiaries. Based on
information
available and Seller's internal control review conducted through
the
date hereof, Seller has no knowledge of any significant
deficiencies
or material weaknesses in the design or operation of Seller's
internal
control over financial reporting with respect to the Companies,
the
Subsidiaries or the Business. The books and records of the
Companies
and the Subsidiaries, all of which have been made available
to
Purchaser, are complete and accurate in all material respects
and at
the Closing will be in their possession.
(d) The matters relating to Seller and certain of its
Subsidiaries subject to an informal inquiry by the Securities
and
Exchange Commission and under investigation by Seller's
Audit
Committee do not involve or affect the financial
9
<PAGE>
reporting, financial statements or internal controls relating to
the
Business or any of the Companies or Subsidiaries.
(e) Section 4.5(e) of the Disclosure Schedule sets forth
Seller's
good faith calculation of excess raw product costs, fruit
start-up
costs, excess insurance allocation costs, executive severance
costs
and bonus costs, in each case, of the Companies and the
Subsidiaries
for the fiscal year ended January 1, 2005.
4.6 REAL PROPERTY.
(a) Section 4.6(a) of the Disclosure Schedule sets forth a
true
and complete list of all of the real property owned or leased by
the
Companies or any Subsidiary, including any on which one of
the
Companies' or their Subsidiaries' operating facilities is
located, as
delineated therein, including:
(i) with respect to the owned real property, (a) if
available, the street address of each parcel of owned real
property, and (b) the current owner of each such parcel of
owned
real property, and
(ii) with respect to the leased real property, (a) if
available, the street address of each parcel of leased real
property, (b) the identity of the lessor and lessee of each
such
parcel of leased real property, (c) the term of the lease
pertaining to each such parcel of leased real property and (d)
a
list of all leases, as amended (the "Real Property Leases").
(b) Except as otherwise set forth in Section 4.6(b) of the
Disclosure Schedule, (i) the Companies or one of their
Subsidiaries
have good and marketable fee simple title to all of the real
property
owned by them (the "Owned Real Property"), free and clear of
all
Encumbrances, except (x) to the extent of liens reserved against
in
the Financial Statements for the applicable property, (y) liens
for
taxes not yet due and payable or which are being contested in
good
faith, or (z) liens that individually or in the aggregate would
not
have a Seller Material Adverse Effect (collectively,
"Permitted
Encumbrances"), (ii) there are no leases, subleases,
licenses,
concessions or other agreements granting to any Person the right
to
use or occupy the Owned Real Property, and (iii) there are
no
outstanding options, rights of first offer or rights of first
refusal
to purchase the Owned Real Property or any portion thereof or
interest
therein.
(c) The Companies and/or the Subsidiaries have a valid and
subsisting leasehold estate in and the right to quiet enjoyment
of the
material real properties leased by it as lessee (the "Leased
Real
Property" and, together with the Owned Real Property, the
"Real
Property") under the Real Property Leases related to such Leased
Real
Property. The improvements on the Real Property listed in
Section
4.6(c) of the Disclosure Schedule are in all material respects
in good
operating condition and in a state of good maintenance and
repair,
ordinary wear and tear excepted, are adequate and suitable for
the
purposes for which they are presently being used and there are
no
condemnation or appropriation proceedings
10
<PAGE>
pending or threatened against any of such real property or
the
improvements thereon.
4.7 ASSETS. Except as disclosed in Section 4.7 of the
Disclosure
Schedule, either one of the Companies or a Subsidiary, as the
case may be, owns
or leases all the properties and assets, including, without
limitation, the
Companies Intellectual Property (defined in Section 4.9) and the
assets
reflected in the Reference Balance Sheet (except for inventory
or other assets
disposed of in the ordinary course of business consistent with
past practice),
but excluding the Real Property, used or held for use by the
Companies or a
Subsidiary in the conduct of the Business (all such properties
and assets being
the "Assets"), except where the failures to own or lease such
Assets would not
have a Seller Material Adverse Effect. Either one of the
Companies or a
Subsidiary, as the case may be, has good and valid title to, or
in the case of
leased or subleased Assets, valid and subsisting leasehold
interests in, all
the Assets, free and clear of all Encumbrances, except (a) as
disclosed in
Section 4.7 of the Disclosure Schedule, (b) for Permitted
Encumbrances and (c)
where the failure to have good and valid title to or valid or
subsisting
leasehold interests in the Assets would not have a Seller
Material Adverse
Effect. Except as set forth in Section 4.7 of the Disclosure
Schedule, the
Assets, together with the Real Property, are sufficient for the
conduct of the
Business as currently conducted by the Companies and
Subsidiaries. The
equipment used or held for use by the Companies and Subsidiaries
is in all
material respects in good operating condition and in all
material respects in a
state of good maintenance and repair, ordinary wear and tear
excepted.
4.8 MATERIAL CONTRACTS.
(a) Section 4.8(a) of the Disclosure Schedule sets forth a
true
and complete list of all the Material Contracts to which any of
the
Companies or their Subsidiaries is a party or by which it is
expressly
bound. As used herein, "Material Contracts" means all of the
following:
(i) each agreement or arrangement to which any of the
Companies or any Subsidiary is party or by which it is bound
(a
"Contract") that was not entered into in the ordinary course
of
business consistent with past practice;
(ii) each agreement with any Key Customer or Key Supplier;
(iii) each agreement, indenture or other instrument
relating to the borrowing of money, or guaranteeing, or
providing
security for, indebtedness, in an amount in excess of One
Million
Dollars ($1,000,000) or otherwise restricting, in any
material
respect, the ability of the Companies or Subsidiaries to
incur
indebtedness or provide security for indebtedness;
11
<PAGE>
(iv) each partnership, material joint venture or material
other similar agreement to which any of the Companies or any
Subsidiary is a party or by which any of them is otherwise
expressly bound;
(v) each agreement, arrangement, contract or commitment
restricting or otherwise affecting the ability of the
Companies
or Subsidiaries to engage in any business or compete in any
jurisdiction or otherwise solicit customers;
(vi) each material Real Property Lease, each agreement
covering Companies Used Intellectual Property and each lease
of
material equipment or other material Assets;
(vii) each agreement, arrangement, contract or commitment
with a third party for the benefit of any of the Companies
or
Subsidiaries or the Business restricting or otherwise
affecting
the ability of the third party to engage in the Business or
compete or solicit customers of the Business in any
jurisdiction;
(viii) each Contract with exclusive supply or requirements
obligations;
(ix) each employment agreement of any of the Companies or
any of their Subsidiaries pursuant to which any employee is
entitled to receive base salary in excess of $100,000 in any
one
year and each material consulting Contract;
(x) each agreement for the sale or other transfer of a
material Asset or Owned Real Property that has not yet been
consummated and was not entered into in the ordinary course
of
business consistent with past practice;
(xi) each Contract with Seller or any other affiliate of
Seller;
(xii) each Contract providing for any "earn out" type
arrangements to any Person;
(xiii) each other existing agreement, not otherwise
covered by clauses (i) through (xii), that requires payments
by
or to any of the Companies or any Subsidiary in excess of
One
Million Dollars ($1,000,000) during any one year and has not
been
entered into in the ordinary course of business consistent
with
past practice;
(b) Except as disclosed in Section 4.8(b) of the Disclosure
Schedule:
(i) neither any of the Companies nor any Subsidiary
party to any Material Contract, nor, to the knowledge of
Seller, any other party thereto, is in breach thereof or
default thereunder except where such
12
<PAGE>
breach or default would not have a Seller Material Adverse
Effect, or has given notice of breach or default to any
other
party thereunder; and
(ii) each Material Contract is valid and binding on each
of the relevant Companies and their relevant Subsidiaries and,
to
the knowledge of Seller, each respective counterparty
thereto,
and each Material Contract is in full force and effect and
is
enforceable in accordance with its terms, subject to general
principles of equity and except as the enforceability thereof
may
be limited by applicable bankruptcy, insolvency,
reorganization
or other similar laws of general application relating to
creditors' rights. No third party to any Material Contract
has
notified Seller or any of the Companies or Subsidiaries that
it
intends to terminate or otherwise alter any Material
Contract.
(c) Except as required by Law or as set forth on Section
4.8(c)
of the Disclosure Schedule, there are no outstanding
material
warranties, other than those made in the ordinary course of
business
consistent with past practices, made by the Companies or
Subsidiaries
and there have been no material warranty claims within the past
two
(2) years and there are no material unresolved claims
thereunder.
(d) Seller has made available to Purchaser each Material
Contract, other than as indicated on Section 4.8(a) of the
Disclosure
Schedule.
4.9 INTELLECTUAL PROPERTY.
(a) Section 4.9 of the Disclosure Schedule sets forth a true
and
complete list of all (i) intellectual property registrations
and
applications, Internet domain names and material
unregistered
intellectual property owned by the Companies or any Subsidiary
and (ii)
material intellectual property licensed by the Companies or
any
Subsidiary (whether as licensee or licensor) (excluding
"clickwrap" or
"shrinkwrap" agreements, agreements contained in or pertaining
to
"off-the-shelf" software, and the terms of use or service for
any
website, to the extent each is commercially available to
consumers on
nondiscriminatory pricing terms). There are no pending actions
against
any of the Companies or any Subsidiary of which the Companies or
any
Subsidiary have been given written notice that assert that
the
Companies or any Subsidiary violate or infringe or unlawfully
use the
intellectual property rights of others or challenging the
Companies' or
any Subsidiary's ownership or use of, or the validity,
enforceability
or registrability of any intellectual property. To the knowledge
of
Seller, neither any of the Companies nor any Subsidiary
violates,
infringes upon or unlawfully uses any intellectual property
owned by
another Person. Neither any of the Companies nor any Subsidiary
has
received any written notice alleging any violation, infringement
upon
or unlawful use of any intellectual property rights of others
or
challenging the Companies' or any Subsidiary's ownership or use
of, or
13
<PAGE>
the validity, enforceability or registrability of any
intellectual
property that remains unresolved on the date hereof. Except as
set
forth in Section 4.9(a) of the Disclosure Schedule, neither
the
Companies nor any Subsidiary has brought or threatened any
Action
against another Person involving intellectual property, and to
the
knowledge of Seller, there is no basis for any Action regarding
the
foregoing.
(b) Except as set forth in Section 4.9(b) of the Disclosure
Schedule, the Companies or a Subsidiary solely and exclusively
owns
all intellectual property owned by the Companies or a
Subsidiary
("Companies Owned Intellectual Property") and has the valid
and
enforceable right to use all other material intellectual
property used
or held for use by the Companies or any Subsidiary ("Companies
Used
Intellectual Property"), free and clear of all material
Encumbrances.
(c) The Companies Owned Intellectual Property and, to the
knowledge of Seller, any Companies Used Intellectual Property,
(i) has
been duly maintained, (ii) is subsisting, in full force and
effect and
(iii) has not been cancelled, expired or abandoned.
4.10 LITIGATION, CLAIMS AND PROCEEDINGS. Except as set forth
in
Section 4.10 of the Disclosure Schedule, there are no Actions
that have been
brought by or against any Governmental Authority or any other
Person pending
or, to the knowledge of Seller, threatened against or by the
Companies, any
Subsidiary of the Companies, the Business, any Assets, or any of
their Owned
Real Property or Leased Real Property, which, if adversely
determined, would
result in liabilities in excess of Three Million Dollars
($3,000,000) or
material injunctive or equitable relief, or would have a Seller
Material
Adverse Effect. There are no existing Governmental Orders naming
the Companies
or any Subsidiary as an affected party. Seller makes no
representation in this
Section 4.10 as to any matter the subject matter of which is
specifically
covered by Sections 4.9, 4.11, 4.13 or 4.14 of this
Agreement.
4.11 ENVIRONMENTAL AND SAFETY AND HEALTH MATTERS. Except as
disclosed
in Section 4.11 of the Disclosure Schedule:
(a) The Companies and their Subsidiaries have obtained all
material Permits that are required under any Environmental Law
for
the operation of their businesses as currently being conducted.
To
Seller's knowledge, all such Permits are valid and in full
force
and effect, and will survive the Closing without material
modification. "Environmental Law" means any applicable Law
relating to (i) the protection, investigation or restoration
of
the environment or natural resources, (ii) the protection of
human
health and safety as it pertains to exposure to Hazardous
Substances, or (iii) the handling, use, presence, disposal,
treatment, storage, release or threatened release of any
Hazardous
Substance, and includes, without limitation, the
Comprehensive
Environmental Response, Compensation and Liability Act, the
Federal
Water Pollution Control Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Occupational Safety and
Health
14
<PAGE>
Act, the Hazardous Materials Transportation Act, the Safe
Drinking
Water Act, the Federal Insecticide, Fungicide & Rodenticide
Act, the
National Environmental Policy Act, the Emergency Planning &
Community
Right-to Know Act, and any similar or analogous state
statutes.
"Hazardous Substance" means any substance that is (i)
listed,
classified or regulated pursuant to any Environmental Law, (ii)
any
petroleum product or by-product, (iii) any asbestos-containing
material
and (iv) any other substance which is the subject of regulatory
action
by any Governmental Authority pursuant to any Environmental Law
or
which may result in liability pursuant to any Environmental
Law.
(b) The Companies and their Subsidiaries are in material
compliance with all material Permits required under all
Environmental
Laws that are used in the operation of their businesses as
currently
being conducted. The Companies and their Subsidiaries have
historically been in compliance with all Permits required under
all
Environmental Laws, except where the failures to comply would
not have
a Seller Material Adverse Effect. To the knowledge of Seller,
no
circumstances exist which could cause any material Permit to
be
revoked, modified or rendered non-renewable upon payment of the
permit
fee.
(c) The Companies, their Subsidiaries and their Real Property
are
in material compliance with all Environmental Laws. The
Companies,
their Subsidiaries and the Real Property have historically been
in
material compliance with all Environmental Laws, except where
the
failure to comply would not, individually or in the aggregate,
have a
Seller Material Adverse Effect. To Seller's knowledge, no
Hazardous
Substance is located on any of the Real Property, except in
material
compliance with all Environmental Laws. To Seller's knowledge,
no
facts or circumstances exist which would reasonably be expected
to
involve any of the Companies or any Subsidiary in any
environmental
litigation, or impose upon the Purchaser or the Companies or
their
Subsidiaries any environmental liability which would have a
Seller
Material Adverse Effect.
(d) To Seller's knowledge, neither any of the Companies nor
any
Subsidiary, nor, any other Person, has had a material disposal
or
release of any Hazardous Substances on, under, in, from,
adjacent to
or about the Real Property.
(e) None of the Companies nor any Subsidiary has disposed or
arranged for the disposal of Hazardous Substances on any third
party
property that has subjected or, to the knowledge of Seller,
may
subject the Companies or their Subsidiaries to material
liability
under any Environmental Law.
(f) To Seller's knowledge, there has been no discharge or
release at any property formerly owned, used, leased or
occupied
by the Companies or any Subsidiary which has subjected or is
expected to subject the Companies or their Subsidiaries to
material liability under any Environmental Law.
(g) None of the Companies nor their Subsidiaries have
received any written notice, demand, letter, claim or
request
for information alleging violation
15
<PAGE>
of or liability under any Environmental Law and neither the
Companies nor their Subsidiaries are party to any written
proceedings, actions, orders, decrees or injunctions
alleging
material liability under any Environmental Law.
(h) None of the Companies or their Subsidiaries have entered
into any agreement that may require them to pay to,
reimburse,
guarantee, pledge, defend, indemnify or hold harmless any
person
from or against any liabilities or costs arising in
connection
with or relating to Environmental Laws.
(i) Seller has delivered or made available to Purchaser
copies of all environmental assessments, audits, studies and
other
environmental reports in its possession relating to the
Companies,
their Subsidiaries and the Real Property.
(j) Except for such expenditures that have been included in
the
projected budgets for the Companies or its Subsidiaries, which
have
been provided to Purchaser, to Seller's knowledge, none of
the
Companies nor their Subsidiaries is required to make any capital
or
other expenditures to comply with applicable Environmental
Law
exceeding $500,000.
4.12 COMPLIANCE WITH LAW. Except as disclosed in Section 4.12 of
the
Disclosure Schedule, to the knowledge of Seller, the Companies
and the
Subsidiaries have conducted and are currently conducting their
business in
accordance with all Laws and Governmental Orders applicable to
the Companies or
any Subsidiary or any of the Assets, the Real Property or their
business,
except where the violation of such Laws or Governmental Orders
would not have a
Seller Material Adverse Effect. Neither the Companies nor any
Subsidiary has
received any outstanding or uncured written notice alleging any
default or
violation of any Law or Governmental Order nor to Seller's
knowledge is there
any reasonable basis for any such allegation, which, if true,
would have a
Seller Material Adverse Effect. The Companies and the
Subsidiaries have each
Permit required by Law for the operation of the Business, except
where the
failure to have any such Permit would not have a Seller Material
Adverse
Effect. Each Permit is valid, binding and in full force and
effect and none of
the Companies or Subsidiaries is in default thereunder (or would
be with the
giving of notice or lapse of time or both) except for such
defaults as would
not have a Seller Material Adverse Effect. Seller makes no
representation in
this Section 4.12 as to any matter the subject matter of which
is specifically
covered by Section 4.9, 4.11, 4.13 or 4.14 of this
Agreement.
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<PAGE>
4.13 EMPLOYEE MATTERS AND BENEFIT PLANS.
(a) Section 4.13(a)(i) of the Disclosure Schedule identifies
each
employment, bonus, deferred compensation, pension, stock option,
stock
appreciation right, profit-sharing or retirement plan,
arrangement or
practice, each medical, vacation, retiree medical, severance pay
plan,
and each other agreement or fringe benefit plan, arrangement
or
practice, of the Seller which affects or covers any current
employee
of the Companies or a Subsidiary, including all "employee
benefit
plans" as defined by Section 3(3) of ERISA (collectively, the
"Seller
Plans"). Purchaser will have no liabilities or obligations under
any
Seller Plan, except as specifically provided in this
Agreement.
Section 4.13(a)(ii) of the Disclosure Schedule identifies
each
employment, bonus, deferred compensation, pension, stock option,
stock
appreciation right, profit-sharing or retirement plan,
arrangement or
practice, each medical, vacation, retiree medical, severance pay
plan,
and each other agreement or fringe benefit plan, arrangement
or
practice, of the Seller, the Companies or any Subsidiary which
affects
or covers any current employee of the Companies or a
Subsidiary,
including all "employee benefit plans" as defined by Section
3(3) of
ERISA (collectively, the "Company Plans").
(b) Except as set forth on Section 4.13(b) of the Disclosure
Schedule, for each Company Plan, correct and complete copies of
the
plan documents and summary plan descriptions, the most recent
Form
5500 annual report, the most recent favorable determination
letter (if
applicable), and all related trust agreements, insurance
contracts and
funding agreements which implement each such Company Plan, have
been
made available to Purchaser.
(c) Neither the Companies nor any Subsidiary has any
commitment,
whether formal or informal, (i) to create any additional such
Company
Plan; (ii) to modify or change any such Company Plan; or (iii)
to
maintain for any period of time any such Company Plan, except
as
described in Section 4.13 of the Disclosure Schedule.
(d) Except as disclosed in Section 4.13 of the Disclosure
Schedule, (i) neither the Companies, any Subsidiary, nor, to
the
knowledge of Seller, any Company Plan or any trustee,
administrator,
fiduciary or sponsor of any Company Plan has engaged in any
prohibited
transactions as defined in Section 406 of ERISA or Section 4975
of the
Code for which there is no statutory exemption under Section 408
of
ERISA or Section 4975 of the Code; (ii) all material filings,
reports
and descriptions as to all Company Plans (including Form 5500
annual
reports, summary plan descriptions, and summary annual
reports)
required to have been made or distributed to participants,
the
Internal Revenue Service, the United States Department of Labor
and
other governmental agencies have been made in a timely manner or
will
be made in a timely manner on or prior to the Closing Date;
(iii)
there is no material litigation, disputed claim,
governmental
proceeding or investigation pending or, to the knowledge of
Seller,
threatened with respect to any Company Plan, the related trusts,
or
any fiduciary, trustee, administrator or sponsor of any Company
Plan;
and (iv) all Company Plans have been established,
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maintained and administered in all material respects in
accordance
with their governing documents and applicable provisions of
ERISA and
the Code.
(e) Except as disclosed in Section 4.13 of the Disclosure
Schedule, none of the Company Plans provide for continuing
benefits or
coverage after termination or retirement from employment, except
for
COBRA rights under a "group health plan" as defined in
Section
4980B(g) of the Code and Section 607 of ERISA.
(f) Except for the Midwest Pension Plan (contributed to
pursuant
to the collective bargaining agreement between Redi-Cut Foods,
Inc.
and Manufacturing, Production and Service Workers Union, Local
24),
neither the Companies, any Subsidiary, nor any entity required
to be
aggregated with the Companies or any Subsidiary under Section
414(b),
(c), (m) or (o) of the Code ("ERISA Affiliate") has ever
sponsored,
participated in, or contributed to (or been required to
contribute to)
either a plan subject to Title IV of ERISA, or a multiemployer
plan as
defined in Section 4001(a)(3) of ERISA. Neither the Companies,
any
Subsidiary nor any ERISA Affiliate has ever withdrawn from such
a
multiemployer plan nor incurred any liability as a result of
any
partial or complete withdrawal by any employer from a
multiemployer
plan as described under Sections 4201, 4203, or 4205 of ERISA.
No
event has occurred that presents a material risk of a
partial
withdrawal from the Midwest Pension Plan. The aggregate
withdrawal
liability of the Companies, Subsidiaries and ERISA
Affiliates,
computed as if a complete withdrawal by the Companies,
Subsidiaries
and ERISA Affiliates had occurred under the Midwest Pension Plan
on
the date hereof, would not exceed $50,000.
(g) Each Company Plan that is intended to be qualified within
the
meaning of Section 401(a) of the Code has received a
determination
letter from the Internal Revenue Service that it is so
qualified, and
no fact or event has occurred since the date of such
determination
letter that could adversely affect the qualified status of any
such
Company Plan.
(h) As of the date hereof, Seller has not received any
notification or other direct indication from any employee listed
in
Section 4.8(h) of the Disclosure Schedule (collectively,
"Key
Employees") that such employee intends to terminate his or
employment
with any of the Companies.
4.14 TAXES. Except as set forth in Section 4.14 of the
Disclosure
Schedule:
(a) Each of the Companies and the Subsidiaries has filed, or
Seller has filed on behalf of each of them, all Tax Returns
required to
be filed on or before the date of this Agreement, except where
the
failure to file such Tax Returns or to pay such Taxes shown
thereon as
owing would not have a Seller Material Adverse Effect, all such
Tax
Returns are true, correct and complete in all material respects
and all
Taxes shown due with respect to the periods covered by such Tax
Returns
have been paid. True and correct copies of all federal, state
and local
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income Tax Returns filed by or on behalf of each of the
Companies and
the Subsidiaries for all periods since December 31, 2001, have
been
heretofore made available to Purchaser except for such returns
where
Seller files a consolidated return that includes any Company or
any
Subsidiary. Except as set forth in Section 4.14 of the
Disclosure
Schedule, all Taxes not yet due and payable by the Companies and
the
Subsidiaries have been properly accrued on the books of account
of the
Companies in accordance with GAAP.
(b) There are no (i) examinations, audits, actions,
proceedings,
investigations or disputes pending of which Seller or any of
the
Companies or their Subsidiaries have been notified in writing,
(ii)
claims asserted in writing for Taxes, (iii) waivers or
extensions of
statutes of limitation with respect to Taxes currently in
effect, or
(iv) closing agreements, or similar agreements entered into or
issued
by any Taxing Authority, in each case with respect to any
Company or
Subsidiary, that may, in each case, increase any Taxes of such
Company
or Subsidiary by a material amount.
(c) No Taxing Authority has asserted that any of the Companies
or
any Subsidiary is subject to Tax or obligated to file a Tax
Return in
a jurisdiction in which such Company or Subsidiary does not pay
Tax or
file a Tax Return.
(d) None of the Companies nor any Subsidiary is a party to
any
Tax allocation or sharing agreement.
(e) There are no liens for Taxes upon the Assets or properties
of
the Companies or any Subsidiary (whether real, personal or
mixed,
tangible or intangible) except for statutory liens for Taxes not
yet
due or payable.
(f) None of the Seller, any of the Companies nor any of
their
Subsidiaries is a "foreign person" within the meaning of Section
1445
of the Code.
(g) None of the Companies nor any Subsidiary has been a
United
States real property holding corporation within the meaning of
Code
Section 897(c)(2) during the applicable period specified in
Code
Section 897(c)(1)(A)(ii).
(h) Except with respect to any Affiliated Group of which the
Seller, the Companies or a Subsidiary is the common parent, none
of
the Companies nor any Subsidiary (i) has been a member of an
Affiliated Group or (ii) has any liability to pay,
reimburse,
indemnify, or otherwise bear the Taxes of any Person under
Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local or
foreign
law), as a transferee or successor, by contract or
otherwise.
(i) Each Affiliated Group has filed all Tax Returns that it
was
required to file for each taxable period during which any of
the
Companies or any Subsidiary was a member of that Affiliated
Group, and
has paid all Taxes shown thereon as owing, except where the
failure to
file such Tax Returns or pay such Taxes would not have a
Seller
Material Adverse Effect.
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<PAGE>
(j) Each of the Companies and their Subsidiaries has
withheld
and/or paid all Taxes required to have been withheld and/or paid
in
connection with amounts paid or owed to any employee,
independent
contractor, creditor, stockholder, member or other third
party.
(k) No Company or Subsidiary has reported, and Seller has
not
reported with respect to any Company or Subsidiary, any
"reportable
transaction" as defined in Treasury Regulation Section 1.6011-4
or any
transaction that is required to be reported to any Taxing
Authority
pursuant to any corresponding or similar provision of state,
local or
foreign Law.
4.15 ABSENCE OF UNDISCLOSED LIABILITIES. Except for liabilities
or
obligations which are accrued or reserved against in the
Reference Balance Sheet
(or reflected in the notes thereto) or in connection with the
transactions
contemplated by this Agreement, the Companies and their
Subsidiaries do not have
any liabilities or obligations (contingent or absolute) which
would constitute a
Seller Material Adverse Effect. Seller makes no representation
in this Section
4.15 as to any matter the subject matter of which is
specifically covered by
Sections 4.9, 4.11, 4.13 or 4.14 of this Agreement.
4.16 ABSENCE OF CERTAIN CHANGES. Except as (a) disclosed on
the
Reference Balance Sheet; (b) disclosed in Section 4.16 of the
Disclosure
Schedule; or (c) expressly contemplated by this Agreement, since
the date of
the Reference Balance Sheet, neither the Companies nor their
Subsidiaries have:
(i) suffered any change constituting a Seller Material Adverse
Effect; (ii)
split, combined or reclassified their capital stock; (iii)
materially changed
their accounting principles, practices or methods, except as
required by GAAP
or applicable Law; (iv) declared or paid any dividend or other
distribution of
cash or other assets or made any payments to Seller or its
affiliates (in each
case, on a net basis), or released any claims against Seller or
its affiliates,
except for (A) participation in Seller's cash management program
pursuant to
which cash collected by the Companies and their Subsidiaries is
swept by Seller
to reduce amounts outstanding under the Intercompany Notes and
expenditures
made by the Companies and the Subsidiaries are paid with funds
provided by
Seller increasing the balances of the Intercompany Notes,
consistent with past
practice, and (B) the payment of any accounts payable to Seller
or its
affiliates arising from the sale in the ordinary course of
business of food or
other products or services to the Companies and the Subsidiaries
by Seller or
such affiliates consistent with past practice; (v) materially
increased any
compensation or expanded any perquisites of employees; (vi) paid
any
liabilities or collected any receivables other than in the
ordinary course of
business based on the normal terms thereof and consistent with
past practice;
(vii) sold or otherwise transferred any material asset of the
Companies or the
Subsidiaries; or (viii) otherwise operated the business other
than in the
ordinary course consistent with past practices.
4.17 LABOR MATTERS.
(a) Section 4.17(a) of the Disclosure Schedule lists each
collective bargaining agreement, work rule or practice, or
other
labor-related Contract (collectively, "CBAs") to which any of
the
Companies or one of their Subsidiaries
20
<PAGE>
is a party or by which it is bound, or which pertain to any of
the
employees of the Companies or the Subsidiaries. There is no
material
arbitration, material grievance, labor dispute, strike, slowdown
or
stoppage in progress or pending or, to the knowledge of
Seller,
threatened, against or involving the Companies or any
Subsidiary. Since
December 28, 2002, neither the Companies nor any Subsidiary
has
experienced any material arbitration, material grievance,
labor
dispute, strike, lockout, slowdown or stoppage. Seller has no
knowledge
of any labor union organizing activities or proceedings with
respect to
any employees of the Companies or their Subsidiaries. Since
December
28, 2002, there has been no request for collective bargaining or
for a
representation election from, or any demand for recognition
or
certification by, any employee, union, labor organization,
works
council or the National Labor Relations Board or any other
labor
relations tribunal or authority, and there are no representation
or
certification proceedings or petitions seeking a
representation
proceeding presently pending or threatened in writing to be
brought or
filed with the National Labor Relations Board or any other
labor
relations tribunal or authority.
(b) Since December 28, 2002 and except as set forth in
Section
4.17(b) of the Disclosure Schedule, the Companies and the
Subsidiaries
have not received notice of (i) any unfair labor practice charge
or
complaint pending or threatened before the National Labor
Relations
Board or any other Governmental Authority, (ii) any
complaints,
grievances or arbitrations arising out of any CBAs or otherwise,
(iii)
any charge or complaint with respect to or relating to them
pending
before the Equal Employment Opportunity Commission or any
other
Governmental Authority responsible for the prevention of
unlawful
employment practices, (iv) the intent of any Governmental
Authority
responsible for the enforcement of labor, employment, child
lab
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