**Exhibit 10.1**

 

**EXECUTION VERSION**

 

 

**ASSETPURCHASE AGREEMENT**

 

**BYAND AMONG**

 

**SARALEE CORPORATION,**

 

**SARAMAR,LLC**

 

**AND**

 

**FARMERBROS. CO.**

 

**DECEMBER2, 2008**

 

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**TABLE OF CONTENTS**

** **
| ** **                                           | ** **                                                        | **Page** |
|------------------------------------------------------|-------------------------------------------------------------------|----------|
|                                                 |                                                              |     |
| ARTICLE I. PURCHASED ASSETS; ASSUMED LIABILITIES     | 1                                                                 |
|                                                 |                                                              |
| 1.1.                                                 | Purchased Assets                                                  | 1        |
| 1.2.                                                 | Limitations on Assignability                                      | 5        |
| 1.3.                                                 | Excluded Assets                                                   | 5        |
| 1.4.                                                 | Assumption of Liabilities                                         | 8        |
| 1.5.                                                 | Excluded Liabilities                                              | 9        |
| 1.6.                                                 | DISCLAIMER OF WARRANTIES                                          | 9        |
|                                                 |                                                              |     |
| ARTICLE II. PURCHASE PRICE                           | 10                                                                |
|                                                 |                                                              |     |
| 2.1.                                                 | Purchase Price                                                    | 10       |
| 2.2.                                                 | Allocation                                                        | 11       |
| 2.3.                                                 | Prorations                                                        | 11       |
| 2.4.                                                 | Income Taxes                                                      | 12       |
| 2.5.                                                 | Closing Costs, Transfer Taxes and Fees                            | 12       |
| 2.6.                                                 | Post-Closing Consumable Inventory and Prepaid  Expense Adjustment | 13       |
| 2.7.                                                 | Promotional Expense Proration                                     | 15       |
|                                                 |                                                              |     |
| ARTICLE III. CLOSING                                 | 16                                                                |
|                                                 |                                                              |     |
| 3.1.                                                 | The Closing                                                       | 16       |
| 3.2.                                                 | Seller Parties’ Closing Deliveries                           | 16       |
| 3.3.                                                 | Buyer’s Closing Deliveries                                   | 19       |
|                                                 |                                                              |     |
| ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER | 20                                                                |
|                                                 |                                                              |     |
| 4.1.                                                 | Corporate Organization                                            | 20       |
| 4.2.                                                 | No Violation                                                      | 21       |
| 4.3.                                                 | Authority                                                         | 21       |
| 4.4.                                                 | Realty                                                            | 22       |
| 4.5.                                                 | Compliance with Laws                                              | 22       |
| 4.6.                                                 | Financial Statements and Condition                                | 22       |
| 4.7.                                                 | Consents and Approvals                                            | 23       |
| 4.8.                                                 | Absence of Certain Changes or Events                              | 23       |
| 4.9.                                                 | Payment of Taxes                                                  | 23       |
| 4.10.                                                | Owned Real Property                                               | 24       |
| 4.11.                                                | Leased Real Property                                              | 24       |
| 4.12.                                                | Tangible Personal Property                                        | 25       |

 

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| 4.13.                                              | Vehicles; Routes; Personal Property Leases; Prepaid  Expenses; Promotional Accruals | 25     |
|----------------------------------------------------|-------------------------------------------------------------------------------------|--------|
| 4.14.                                              | Litigation                                                                          | 26     |
| 4.15.                                              | Intellectual Property                                                               | 26     |
| 4.16.                                              | Permits                                                                             | 27     |
| 4.17.                                              | Contracts                                                                           | 27     |
| 4.18.                                              | No Other Agreement                                                                  | 29     |
| 4.19.                                              | Employee Plans                                                                      | 30     |
| 4.20.                                              | Labor and Employee Matters                                                          | 31     |
| 4.21.                                              | Hazardous Substances                                                                | 32     |
| 4.22.                                              | Brokers’ Fees and Commissions                                                  | 33     |
| 4.23.                                              | Consumable Inventory                                                                | 33     |
| 4.24.                                              | Certain Payments                                                                    | 33     |
| 4.25.                                              | Customers                                                                           | 34     |
| 4.26.                                              | LOI Compliance                                                                      | 34     |
|                                               |                                                                                |   |
| ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER | 34                                                                                  |
|                                               |                                                                                |   |
| 5.1.                                               | Corporate Organization                                                              | 34     |
| 5.2.                                               | Authority                                                                           | 34     |
| 5.3.                                               | No Violation                                                                        | 35     |
| 5.4.                                               | Consents and Approvals                                                              | 35     |
| 5.5.                                               | Brokers’ Fees and Commissions                                                  | 35     |
| 5.6.                                               | Litigation                                                                          | 35     |
| 5.7.                                               | Investigation By Buyer                                                              | 35     |
| 5.8.                                               | Availability of Financing                                                           | 36     |
|                                               |                                                                                |   |
| ARTICLE VI. COVENANTS                              | 36                                                                                  |
|                                               |                                                                                |   |
| 6.1.                                               | Conduct of DSD Business Prior to the Closing                                        | 36     |
| 6.2.                                               | Employees and Employee Benefits                                                     | 37     |
| 6.3.                                               | Access to Information                                                               | 40     |
| 6.4.                                               | Historical Financial Statements                                                     | 40     |
| 6.5.                                               | Public Announcements                                                                | 42     |
| 6.6.                                               | Supplements to Schedules                                                            | 42     |
| 6.7.                                               | Mixed Use Contracts                                                                 | 43     |
| 6.8.                                               | Release of Certain Obligations                                                      | 44     |
| 6.9.                                               | Access to Records; Facilities                                                       | 44     |
| 6.10.                                              | Buyer’s Insurance                                                              | 44     |
| 6.11.                                              | Confidentiality Agreement                                                           | 45     |
| 6.12.                                              | Tax Matters                                                                         | 46     |
| 6.13.                                              | Use of Names                                                                        | 47     |
| 6.14.                                              | Negative Covenant                                                                   | 47     |

 

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| 6.15.                                                                         | IT Carve Out                                    | 48     |
|-------------------------------------------------------------------------------|-------------------------------------------------|--------|
| 6.16.                                                                         | Brew Equipment Service; DSD Referral            | 48     |
| 6.17.                                                                         | Shared Customers                                | 49     |
| 6.18.                                                                         | Limited Non-Competition                         | 49     |
| 6.19.                                                                         | Nonsolicitation of Certain Employees            | 49     |
| 6.20.                                                                         | Accounts Receivable                             | 50     |
| 6.21.                                                                         | Removal of Brew Equipment Inventory             | 51     |
| 6.22.                                                                         | Return of Consumable Inventory                  | 51     |
| 6.23.                                                                         | Further Assurances                              | 51     |
| 6.24.                                                                         | Buyer’s Pre-Closing Conduct                | 52     |
| 6.25.                                                                         | Labor Contracts                                 | 52     |
| 6.26.                                                                         | Embodiments of DSD Intellectual Property        | 52     |
| 6.27.                                                                         | Authorized Information                          | 53     |
| 6.28.                                                                         | Buyer Financing                                 | 53     |
|                                                                          |                                            |   |
| ARTICLE VII. CONDITIONS TO CLOSING                                            | 54                                              |
|                                                                          |                                            |   |
| 7.1.                                                                          | Conditions to Obligations of Buyer              | 54     |
| 7.2.                                                                          | Conditions to Obligations of the Seller Parties | 55     |
|                                                                          |                                            |   |
| ARTICLE VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES  AND INDEMNIFICATION | 55                                              |
|                                                                          |                                            |
| 8.1.                                                                          | Survival of Representations and Warranties      | 55     |
| 8.2.                                                                          | Seller’s Indemnification                   | 56     |
| 8.3.                                                                          | Buyer’s Indemnification                    | 57     |
| 8.4.                                                                          | Indemnification Procedures                      | 58     |
| 8.5.                                                                          | Nature of Other Liabilities                     | 60     |
| 8.6.                                                                          | Indemnification Limits and Restrictions         | 60     |
| 8.7.                                                                          | Additional Limitations of Liability             | 61     |
| 8.8.                                                                          | Exclusive Remedy                                | 62     |
|                                                                          |                                            |   |
| ARTICLE IX. TERMINATION AND ABANDONMENT                                       | 62                                              |
|                                                                          |                                            |   |
| 9.1.                                                                          | Methods of Termination                          | 62     |
| 9.2.                                                                          | Procedure and Effect of Termination             | 63     |
|                                                                          |                                            |   |
| ARTICLE X. MISCELLANEOUS                                                      | 63                                              |
|                                                                          |                                            |   |
| 10.1.                                                                         | Notices                                         | 63     |
| 10.2.                                                                         | Amendments; Waivers                             | 64     |
| 10.3.                                                                         | Successors and Assigns                          | 64     |
| 10.4.                                                                         | Construction; Interpretation; Certain Terms     | 64     |
| 10.5.                                                                         | Severability                                    | 65     |

 

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| 10.6.                     | Counterparts                                  | 65     |
|---------------------------|-----------------------------------------------|--------|
| 10.7.                     | Entire Agreement                              | 65     |
| 10.8.                     | Governing Law; Consent to Jurisdiction; Venue | 65     |
| 10.9.                     | Expenses                                      | 65     |
| 10.10.                    | Third-Party Beneficiaries                     | 65     |
| 10.11.                    | Knowledge                                     | 66     |
| 10.12.                    | Title; Risk of Loss                           | 66     |
| 10.13.                    | Waivers of Trial by Jury                      | 66     |
|                      |                                          |   |
| ARTICLE XI. DEFINED TERMS | 66                                            |

 

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**SCHEDULESAND EXHIBITS**

 
| Schedule                                               |   |
|--------------------------------------------------------|--------|
|                                                   |   |
| Schedule 1.1(a)-1: Certain DSD Business Marks          |   |
|                                                   |   |
| Schedule 1.1(a)-2: Certain DSD Business Marks          |   |
|                                                   |   |
| Schedule 1.1(c): Brew Equipment Inventory  Methodology |   |
|                                                   |   |
| Schedule 1.1(f): Personal Property Leases              |   |
|                                                   |   |
| Schedule 1.1(g)-1: Certain Included Contracts          |   |
|                                                   |   |
| Schedule 1.1(g)-2: Labor Contracts                     |   |
|                                                   |   |
| Schedule 1.3(w): Other Excluded Assets                 |   |
|                                                   |   |
| Schedule 2.1: Wire Transfer Instructions               |   |
|                                                   |   |
| Schedule 2.6(a): Historic Inventory Statement          |   |
|                                                   |   |
| Schedule 4.2: Consents                                 |   |
|                                                   |   |
| Schedule 4.4: Realty                                   |   |
|                                                   |   |
| Schedule 4.5: Compliance with Laws                     |   |
|                                                   |   |
| Schedule 4.6-1: Seller’s Accounting Principles    |   |
|                                                   |   |
| Schedule 4.6-2: Financial Statements Exceptions        |   |
|                                                   |   |
| Schedule 4.6-3: DSD Business Definition                |   |
|                                                   |   |
| Schedule 4.7: Consents and Approvals                   |   |
|                                                   |   |
| Schedule 4.8(a): Certain Developments                  |   |
|                                                   |   |
| Schedule 4.8(b): Ordinary Course                       |   |
|                                                   |   |
| Schedule 4.9: Payment of Taxes                         |   |
|                                                   |   |
| Schedule 4.10(b): Subleasing Arrangements              |   |
|                                                   |   |
| Schedule 4.11: Leased Real Property                    |   |

 

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| Schedule 4.12-1: Tangible Personal Property Liens            |   |
|--------------------------------------------------------------|--------|
|                                                         |   |
| Schedule 4.12-2: Certain Tangible Personal Property          |   |
|                                                         |   |
| Schedule 4.13-1: Routes                                      |   |
|                                                         |   |
| Schedule 4.13-2: Owned Vehicles                              |   |
|                                                         |   |
| Schedule 4.13-3: Certain Personal Property Leases            |   |
|                                                         |   |
| Schedule 4.13-4: Certain Personal Property Lease  Exceptions |   |
|                                                         |   |
| Schedule 4.13-5: Prepaid Expenses                            |   |
|                                                         |   |
| Schedule 4.13-6: Promotional Accruals                        |   |
|                                                         |   |
| Schedule 4.14: Litigation; Claims                            |   |
|                                                         |   |
| Schedule 4.15: Intellectual Property                         |   |
|                                                         |   |
| Schedule 4.16-1: Permits                                     |   |
|                                                         |   |
| Schedule 4.16-2: Compliance with Permits                     |   |
|                                                         |   |
| Schedule 4.17(a): Material Contracts                         |   |
|                                                         |   |
| Schedule 4.17(b): Enforceable Contracts                      |   |
|                                                         |   |
| Schedule 4.19(a): Employee Plans                             |   |
|                                                         |   |
| Schedule 4.19(c): Qualified Plans                            |   |
|                                                         |   |
| Schedule 4.20(a): Labor Issues                               |   |
|                                                         |   |
| Schedule 4.20(b): Information about Hired Personnel          |   |
|                                                         |   |
| Schedule 4.21: Hazardous Substances                          |   |
|                                                         |   |
| Schedule 4.21(b): Third Party Reports                        |   |
|                                                         |   |
| Schedule 4.23: Consumable Inventory                          |   |
|                                                         |   |
| Schedule 4.26: LOI Compliance                                |   |
|                                                         |   |
| Schedule 6.7: Mixed Use Contracts                            |   |

 

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| Schedule 7.1(d): Permitted Exceptions |   |
|---------------------------------------|--------|
|                                  |   |
| Schedule 7.1(e): Required Consents    |   |

 
| **Exhibit** | ** ** | **Description**                                                |
|-------------|------------|----------------------------------------------------------------|
|        |       |                                                           |   |
| A           |       | Facilities                                                     |   |
| B           |       | Form of Note                                                   |   |
| C           |       | Form of Security Agreement                                     |   |
| D           |       | Form of Seller Trademark License Agreement                     |   |
| E           |       | Form of Buyer Trademark License Agreement                      |   |
| F           |       | Form of Superior Trademark License Agreement                   |   |
| G           |       | Form of Seller Transition Services Agreement                   |   |
| H           |       | Form of Cappuccino and Cocoa Transition Agreement              |   |
| I           |       | Form of Buyer Co-Pack Agreement                                |   |
| J           |       | Form of Seller Co-Pack Agreement                               |   |
| K           |       | Form of Liquid Coffee Distribution Agreement                   |   |
| L           |       | Form of Green Coffee and Tea Purchase Agreement                |   |
| M           |       | Form of Formula License Agreement                              |   |
| N           |       | Form of Foreign Investment in Real Property Tax Act  Affidavit |   |
| O           |       | Form of Option Agreement                                       |   |
| P           |       | Historical Financial Statements                                |   |

 

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**ASSETPURCHASE AGREEMENT**

 

This Asset Purchase Agreement (“*Agreement*”), dated December 2, 2008,is made by and among Sara Lee Corporation, a Maryland corporation (“*Seller*”), Saramar, LLC, a Delaware limitedliability company (“*Saramar*”) (Seller and Saramar are sometimesherein collectively referred to as the “*SellerParties*” and each as a “*SellerParty*”), and Farmer Bros. Co., a Delaware corporation (“*Buyer*”).  Capitalizedterms used herein have the definitions referred to, or set forth in, Article XI.

 

**RECITALS:**

 

A.            TheSeller Parties are engaged in, among other things, the DSD Business.

 

B.            Sellerowns, directly or indirectly, one hundred percent (100%) of the issued andoutstanding ownership interests of Saramar.

 

C.            On October 24,2008, Seller formed SL Realty, LLC, a wholly owned subsidiary in the State ofDelaware (“*Realty*”). Seller formed Realty for the sole purpose of transferring to Realty, andcausing Realty to lease and operate the Leased Real Property which Sellerwishes to transfer, and Buyer wishes to acquire, as part of the transactionscontemplated by this Agreement.

 

D.            Sellerengages in the manufacturing, processing, packaging, marketing, distributingand selling of coffee, tea and related products through its DSD Business, NSOBusiness and other businesses, each of which uses different methods todistribute product (which in some instances is the same or similar product) tocustomers, many of which purchase product from more than one of thesebusinesses.

 

E.             TheSeller Parties desire to sell to Buyer, and Buyer desires to purchase from theSeller Parties, the assets of the DSD Business identified in Section 1.1,and the Seller Parties desire to delegate to Buyer and Buyer desires to assumethe Assumed Liabilities, in each case on the terms and subject to theconditions hereinafter set forth.

 

Accordingly, for good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties,intending to be legally bound, hereby agree as follows.

 

**ARTICLE I.PURCHASED ASSETS; ASSUMED LIABILITIES**

 

1.1.          Purchased Assets.  At the Closing and in reliance upon therepresentations, warranties and agreements and subject to the conditions setforth in this Agreement, the Seller Parties shall sell, assign, transfer,convey and deliver to Buyer, free and clear of all liens, Claims, options,charges, security interests, pledges, rights, mortgages or other encumbranceswhatsoever (collectively, “*Liens*”),other than Permitted Liens, and Buyer shall purchase from the Seller Parties,for the Purchase Price, all of the Seller Parties’ right, title and interest inthe following 

 

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items, other than anyExcluded Assets (all of such assets, properties and rights being acquiredhereby are collectively called the “*PurchasedAssets*”):

 

(a)           DSD Intellectual Property.  (i) The Trademarks and Trade Nameslisted on Schedule 1.1(a)-1 attached hereto, including domain namesincorporating the same, in each case whether registered or not, and whereversuch rights exist, subject to the terms of the Buyer Trademark LicenseAgreement and the Superior Trademark License Agreement, together with the rightto recover for any past infringement thereof; (ii) all Seller Parties’rights in the United States to the Trademarks and Trade Names listed on Schedule 1.1(a)-2attached hereto, whether registered or not, together with the right to recoverfor any past infringement thereof (clauses (i) and (ii) being collectivelycalled the “*DSD Business Marks*”), (iii) the Houston Software,and (iv) all Other Intellectual Property of the Seller Parties thatrelates only to the DSD Business or the DSD Business Marks, whether registeredor not, the right to recover for any past infringement thereof, and the rightto protection of interests therein (clauses (i) through (iv) beingcollectively called the “*DSD Intellectual Property*”);

** **

(b)           Tangible P&E.  (i) All Owned Vehicles, (ii) allfurniture, fixtures, equipment, machinery, spare parts, tools, supplies andother tangible personal property, other than Owned Vehicles, owned by Sellerwhich at Closing are located at, or in transit to, the Transferred Facilitiesor on the Vehicles, (iii) all desktop computers which at Closing are locatedat or in transit to the Transferred Facilities, and all laptop computers andhand held computer devices which at Closing are in the possession of HiredPersonnel, and (iv) the AS 400 computer server located at the HoustonPlant (all of the foregoing, other than Consumable Inventory and BrewEquipment, whether or not exclusively related to the DSD Business, beingcollectively called the “*Tangible P&E*”).  For the avoidance of doubt, Tangible P&Eshall not include desktop computers located at Seller’s Downers Grove, ILlocation;

 

(c)           Brew Equipment Inventory.  (i) All Brew Equipment Inventorydistributed by the DSD Business to DSD Customers and in the control of or intransit to such customers as of the Closing; (ii) twenty-one percent (21%)(or such greater percentage as Seller may choose to provide to Buyer) of theBrew Equipment Inventory related to Liquid Coffee (it being agreed that suchBrew Equipment Inventory shall include both new Machines and Machines which areused/awaiting refurbishment in such proportion as Seller owns such Machinesimmediately prior to the Closing), which shall consist of (A) 100% of suchBrew Equipment Inventory located on the Vehicles as of the Closing and (B) theremainder of such Brew Equipment Inventory to be selected from such BrewEquipment Inventory that is located at or in transit to the Facilities andSeller’s Washington, PA Facility as of the Closing, and (iii) forty-twopercent (42%) (or such greater percentage as Seller may choose to provide toBuyer) of the Brew Equipment Inventory that is not related to Liquid Coffee (itbeing agreed that such Brew Equipment Inventory shall include both new Machinesand Machines which are used/awaiting refurbishment in such proportion as Sellerowns such Machines immediately prior to the Closing), which shall consist of (A) 100%of such Brew Equipment Inventory located on the Vehicles as of the Closing and (B) theremainder of such Brew Equipment Inventory to be selected from such BrewEquipment 

 

2

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Inventory that is locatedat or in transit to the Facilities and Seller’s Washington, PA Facility as ofthe Closing.  Any Brew EquipmentInventory to be selected from the Facilities or Seller’s Washington, PAFacility as of the Closing shall be selected based upon the methodology setforth in Schedule 1.1(c). Upon signing this Agreement, Seller is providing Buyer with a listmaintained by Seller in the ordinary course of the DSD Business of the BrewEquipment Inventory located at DSD Customers as of October 2, 2008; *provided*, Seller makes no representation or warrantyregarding the accuracy of such list;

 

(d)           Consumable Inventory.  All Consumable Inventory at Closing (i) locatedat the Transferred Facilities, Buyer Sites or, except for green coffee and tea,in transit to the Transferred Facilities or Buyer Sites regardless of whetherrelated exclusively to the DSD Business; and (ii) in transit to thelocations of DSD Customers pursuant to DSD Business transactions (the “*Purchased Consumable Inventory*”);

 

(e)           Real Estate.  One hundred percent (100%) of the equityinterest of Realty (being all of the equity of Realty) and each parcel of theOwned Real Property;

 

(f)            Personal Property Leases.  (i) The leases listed on Schedule 1.1(f),but only to the extent relating to the Leased Vehicles listed on Schedule 1.1(f),including all Seller’s rights with respect to such Leased Vehicles, (ii) theleases of other personal property used exclusively by the DSD Business,including all Seller’s rights with respect to the underlying personal property,and (iii) the leases of personal property listed on Schedule 4.13-3,to the extent related to the DSD Business, including all Seller’s rights withrespect to the underlying personal property to the extent related to the DSDBusiness (clauses (i) through (iii) being collectively called the “*Personal Property Leases*”);

 

(g)           Contracts.  All Contracts to which either of the SellerParties or Realty is a party or is bound which (i) relate exclusively tothe DSD Business or the other Purchased Assets (excluding any individualemployment contracts, collective bargaining agreements, employee welfare andpension plans, severance plans and related documents); (ii) are Contracts listed in Schedule 1.1(g)-1, such schedule to include the Sauce SupplyAgreement; or (iii) to the extent related to the Hired Personnel, arecollective bargaining agreements and other contracts listed on Schedule 1.1(g)-2(“*Labor Contracts*”) (clauses(i) through (iii) being called the “*DSD Contracts*”) (saidDSD Contracts, together with the Real Property Leases and the PersonalProperty Leases, being collectively called the “*Purchased Contracts*”);

 

(h)           Permits.  All Permits relating exclusively to the DSDBusiness and all Permits relating exclusively to the Transferred Facilities(regardless of whether the Transferred Facilities relate exclusively to the DSDBusiness), to the extent such Permits are transferable and to the extent nottransferred to Realty prior to the Closing;

 

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(i)            Mixed Use Contracts.  The benefits arising after the Closing Dateunder the Mixed Use Contracts to the extent such benefits are related to theDSD Business, all pursuant to the terms and conditions of Section 6.7;

 

(j)            Books and Records.  All (i) business records, tangible data,documents, files, DSD Customer lists, supplier lists, sales records (but in thecase of Shared Customers, relating only to DSD Business transactions), businessand marketing plans, creative materials, advertising, promotional materials,price lists, returned goods records, blueprints, specifications, designs,drawings, plans, operation or maintenance manuals, bids, invoices, salesliterature, and all other books and records (collectively, “*Information*”), in each case which relateexclusively to the DSD Business or DSD Business transactions (but excluding(A) all Tax returns and all worksheets, notes, files or documentsprimarily related thereto, wherever located, (B) all documents prepared inconnection with the transactions contemplated by this Agreement and all minutebooks and corporate records of the Seller Parties, (C) all Information ofthe Seller Parties which is not related exclusively to the DSD Business or DSDBusiness transactions, it being agreed, however, that (i) all Informationrelating to Shared Customers to the extent such Information relates to DSDBusiness transactions shall be included in the Purchased Assets, and (ii) tothe extent any Seller Party possesses Information which relates to the DSDBusiness and any other business operated by such Seller Party, Buyer shall haveaccess to the portion of such Information relating exclusively to the DSDBusiness or DSD Business transactions to the extent set forth in Section 6.9(b),(D) all Information which is more than three (3) years old other thanany blueprints, specifications, designs, drawings, plans and operation ormaintenance manuals related exclusively to the Tangible P&E or theTransferred Facilities; it being agreed, however, that Buyer shall have accessto such Information to the extent set forth in Section 6.9(b), and (E) allmanagement information systems (other than the Houston Software and the assetsdescribed in Section 1.1(b), subject to Buyer’s right to use thesystems as described in Section 6.15) and (ii) personnelrecords relating to Hired Personnel who become employees of Buyer at Closing(collectively, the “*Books and Records*”);

 

(k)           Telephone Numbers.  All telephone numbers, facsimile numbers, andwhite- and yellow-page listings related only to the Transferred Facilitiesand cell phone accounts of the Hired Personnel maintained by Seller;

 

(l)            Goodwill.  All goodwill associated with the DSD Businessand DSD Intellectual Property (including goodwill generated both with ExclusiveCustomers and Shared Customers to the extent related to DSD Businesstransactions);

 

(m)          Prepaid Expenses.  All prepaid expenses related solely to theDSD Business and characterized as such on the Books and Records in a mannerconsistent with Seller’s past practices and the Accounting Principles,including deposits held under Purchased Contracts (“*PrepaidExpenses*”), subject to adjustment under Section 2.1;

 

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(n)           Warranties.  To the extent assignable to Buyer and subjectto Section 1.3(u) below, all of the Seller Parties’ rightsunder or pursuant to all product and service warranties solely to the extentrelating to or arising in connection with the Purchased Assets or operation ofthe DSD Business; and

 

### (o)           Closing Routes.  The Closing Routes.

 

1.2.          Limitations on Assignability.  Subject to Section 1.4(b), to theextent that any of the Purchased Assets are not assignable without the consentof a third party, neither this Agreement, nor any of the instruments ordocuments executed and delivered in connection herewith or contemplated hereby,shall constitute an assignment or assumption thereof, or attempted assignmentor attempted assumption thereof, if such assignment or attempted assignment, orassumption or attempted assumption, would constitute a breach thereof.  If there are assignment consents that are notobtained by the Seller Parties by the Closing Date, the Seller Parties shalluse commercially reasonable efforts (but Seller Parties shall not be requiredto pay any third party in exchange for such consent) to obtain all suchconsents as soon as reasonably practicable after the Closing Date andthereafter assign to Buyer such non-assignable Purchased Assets.  Following any such assignment, such assetsshall be deemed Purchased Assets and the liabilities thereunder (to the extentprovided herein) shall be deemed Assumed Liabilities for purposes of thisAgreement.  After the Closing and priorto obtaining any required consent, the Seller Parties shall cooperate withBuyer in any reasonable arrangement designed to provide Buyer with the benefitsof the non-assignable Purchased Assets and Buyer shall perform allcorresponding liabilities and obligations of Seller Parties relating thereto tothe extent the same would have been Assumed Liabilities hereunder had theconsent been obtained as of the Closing.

 

1.3.          Excluded Assets.  The “*ExcludedAssets*” shall consist of all assets, properties, rights andinterests not included in the definition of the term “Purchased Assets.”  Without limiting the foregoing, and withoutcreating any implication that an asset or property would be a Purchased Assetif not set forth below, the Excluded Assets shall include the following,together with any assets, Claims, causes of action, choses in action, rights ofrecovery or rights of set-off of any kind against any Person arising out of orrelating to any of the following:

 

(a)           Retained Coffee Food ServiceBusiness.  The Coffee Food ServiceBusiness other than the DSD Business;

 

(b)           Liquid Coffee Concentrate Business.  Seller’s business of manufacturing,processing, packaging, marketing, distributing and selling to any customer, byany means of delivery or distribution, coffee in the form of liquid coffeeconcentrate and related products, including milk and chocolate (such liquidcoffee concentrate and related products being called “*LiquidCoffee*” and said business being called the “*LiquidCoffee Business*”), including the Douwe Egberts brand and relatedproducts (other than liquid coffee Machines distributed in DSD Businesstransactions); *provided* that Buyer will beentitled to distribute and sell Liquid Coffee pursuant to the terms of theLiquid Coffee Distribution Agreement;

 

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(c)           Certain Tangible Personal Property.  All furniture, fixtures, equipment, desktopcomputers, machinery, spare parts, tools, supplies and other tangible personalproperty which at Closing are not located at or in transit to a TransferredFacility or on any Vehicle (other than (A) the Owned Vehicles, (B) laptopcomputers and hand held computer devices which at Closing are in the possessionof any Hired Personnel, and (C) the AS 400 computer server located at theHouston Plant, it being understood that the items in clauses (A) through (C) hereofshall be included in the Purchased Assets);

 

(d)           Certain Brew Equipment Inventory.  All Brew Equipment Inventory which is notpart of the Purchased Assets.

 

(e)           Excluded Contracts.  All Contracts, including Mixed Use Contracts(other than those which are specifically Purchased Contracts) and Contracts forthe purchase of green coffee, tea, liquid coffee concentrate, cappuccino andcocoa products, Machines and Spare Parts, and Contracts relating to softwareand information technology services or products, and Contracts marked with anasterisk (*) on Schedule 4.17(a) (it being understood that thisclause (e) shall not limit the rights of Buyer under Section 1.1(i));

 

(f)            Cash and Cash Equivalents andDeposits.  All cash, bank accounts,cash equivalents and other similar types of investments, certificates ofdeposit, U.S. Treasury bills and other marketable securities and all advancesand deposits other than Prepaid Expenses included within the meaning of thePurchased Assets;

 

(g)           Receivables; Etc.  All accounts receivable and otherreceivables, billed and unbilled, and all negotiable instruments, or otherinstruments and chattel paper, as are payable to any Seller Party, and allClaims for refund or credit, including Tax refunds and any other Claims notpart of the Purchased Assets;

 

(h)           Insurance.  All insurance policies, programs, reservesand related bonds of any nature (and any dividends or claims payable in respectthereof), including those covering the DSD Business prior to the Closing;

 

(i)            Permits.  All Permits not relating exclusively to theDSD Business (other than Permits exclusively relating to the TransferredFacilities, regardless of whether such Transferred Facilities are exclusivelyrelated to the DSD Business) and all Permits not transferable to Buyer.  Permits that are Excluded Assets shallinclude all franchise, Tax, sales and use Permits of the Seller Parties;

 

(j)            DSD Management Systems.  Other than the Houston Software and theassets related to the management information systems described in Section 1.1(b),(all of which constitute part of the Purchased Assets), the managementinformation systems and related services utilized at any of the Facilities(subject to Buyer’s right to use the systems described in Section 6.15)(it being understood, however, that Seller shall have obligations to providecertain 

 

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IT services to Buyerfollowing the Closing Date pursuant to the terms of the Seller TransitionServices Agreement);

 

(k)           Centralized Services.  All administrative and corporate services ofSeller, all services related to any business or operation of Seller or any ofits Affiliates in addition to the DSD Business (it being understood, however,that Seller has obligations to provide certain services to Buyer following theClosing Date pursuant to the terms of the Seller Transition ServicesAgreement);

 

(l)            Employee Plans.  All Employee Plans and all rights andinterests under (including those of sponsor and administrator, as applicable),and all assets of, any employee benefit plan maintained by Seller or any of itsAffiliates for the benefit of employees which include, but are not limited to,the Hired Personnel;

 

(m)          Cappuccino and Cocoa; Formulas andBlends.  The cappuccino and cocoarecipes and all coffee and other formulas and blends of products sold by theDSD Business; *provided* that Buyer will beentitled to distribute and sell certain of Seller’s cocoa and cappuccinoproducts pursuant to the terms of the Cappuccino and Cocoa TransitionAgreements and shall have the right to use certain coffee, tea and otherrelated product formulas set forth on Exhibit A of the FormulaLicense Agreement which were used by Seller in the DSD Coffee Business ormanufactured in the Houston Plant prior to the Closing Date, pursuant to theterms of the Formula License Agreement;

 

(n)           Sauce Business.  The Sauce Business other than the DSD SauceBusiness;

 

(o)           Retained Claims.  Any and all Claims and rights to recovery ofthe Seller Parties against any Person, whether now existing or arising in thefuture, to the extent related to or arising from or in connection with the DSDBusiness prior to the Closing Date (other than as provided in Section 1.1(a)),the Excluded Assets, or the Excluded Liabilities;

 

(p)           Agreement Rights.  The Seller Parties’ rights under thisAgreement and any Additional Documents;

 

(q)           Real Property.  The property which is subject to the OptionAgreement and all Facilities other than Transferred Facilities;

 

(r)            Excluded Intellectual Property.  All Trademarks, Trade Names and OtherIntellectual Property including rights to recover for past infringementthereof, to the extent that such Trademarks, Trade Names and Other IntellectualProperty are not DSD Intellectual Property. Without limiting the foregoing, (i) the Douwe Egberts Trade Name,related Trademarks and related Other Intellectual Property, and (ii) theSuntipt Trade Name, related Trademarks, and related Other Intellectual Propertyoutside of the United States as well as domain names relating to the SuntiptTrade Name;

 

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(s)           Excluded Goodwill.  All goodwill associated with the businessesof Seller other than the DSD Business and DSD Intellectual Property (includinggoodwill generated with Shared Customers to the extent not related to DSDBusiness transactions);

 

(t)            Websites.  All of Seller’s websites, including each suchsite’s content, look and feel, verbiage and images, but not including anydomain names or DSD Intellectual Property (subject to the Buyer TrademarkLicense Agreement and the Superior Trademark License Agreement) which are partof the Purchased Assets, it being understood that Buyer operates or willoperate one or more websites using the domain names owned by Buyer which maycontain information of a similar subject matter as one or more of Seller’swebsites;

 

(u)           Certain Warranty Rights.  All rights under or pursuant to all productand service warranties relating to or arising in connection with (i) anyExcluded Liability, or (ii) the ownership of the Purchased Assets oroperation of the DSD Business on or prior to the Closing Date;

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### (v)           CertainConsumable Inventory.  All ConsumableInventory located at Seller’s Bensenville, IL distribution center and all greencoffee and tea in transit to the Transferred Facilities and Buyer Sites; and

 

(w)          Other Excluded Assets.  The assets listed on Schedule 1.3(w).

 

1.4.          Assumption of Liabilities.  At the Closing, Buyer shall assume and agreeto discharge and perform when due the following Liabilities of the SellerParties (the “*Assumed Liabilities*”).

 

(a)           Permitted Liens.  All Liabilities relating to the PermittedLiens;

 

(b)           Executory Liabilities.  Notwithstanding Section 1.2 tothe contrary, obligations arising after the Closing Date for future performanceand any Liabilities arising from or relating to such future performance undereach of the Purchased Contracts and those obligations arising after the ClosingDate for future performance and any Liabilities arising from or relating tosuch future performance under the portion of each of the Mixed Use Contractsrequired to be assumed or performed pursuant to Section 6.7; *provided*, *however*,Assumed Liabilities shall not include any Liabilities (i) for or resultingfrom a breach by any Seller Party of any Purchased Contracts or any Mixed UseContracts occurring on or prior to the Closing Date (other than any breacharising on account of a transfer pursuant to this Agreement of any PurchasedContact or Mixed Use Contract without the receipt of any necessary consent orwaiver), or (ii) under any Mixed Use Contracts (or portion thereof) notrequired to be assumed or performed by Buyer pursuant to Section 6.7;

 

(c)           Environmental Liabilities.  Environmental Liabilities related to theTransferred Facilities, subject to any indemnification obligation of Seller forbreach of any of the representations and warranties set forth in Section 4.21;

 

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(d)           Pension Liabilities.  Pension liabilities under Multiemployer Planswith respect to the employees of the DSD Business to be hired by Buyer atClosing; *provided*, *however*,that if Buyer discontinues operations at the Hayward, CA Facility during the180-day period following the Closing, Seller will indemnify and hold Buyerharmless for any withdrawal liability in excess of $60,000.00 which is incurredby Buyer under the Multiemployer Plans related to said Facility on account ofsuch shutdown.  Notwithstanding the foregoing,any Liability under the Multiemployer Plans for contributions required to bepaid for a period prior to Closing (but only for the dollar amount ofcontributions, charges or increases required to have been made by Seller on orprior to Closing and not for any contributions, charges or increases requiredto be paid after Closing or for any other adjustments to contribution amountsafter the Closing), or for a withdrawal or partial withdrawal occurring priorto the Closing shall not be an Assumed Liability;

 

(e)           Advertising and Trade PromotionExpenses.  All Liabilities foradvertising, trade promotions and customer rebates relating exclusively to theDSD Business (collectively, “*Promotional Expenses*”)with respect to the period after the Closing Date; *provided*,*however*, that in the case of PromotionalExpenses that relate to periods that extend both before and after the ClosingDate, the parties shall allocate such Promotional Expenses based upon therelative benefits received by Seller Parties prior to the Closing Date (suchamount to be an Excluded Liability) and the benefits received by Buyerfollowing the Closing Date (such amount to be an Assumed Liability) inaccordance with Section 2.7. The parties shall share with one another all relevant information tomake this allocation in accordance with such relative benefits;

 

(f)            Utilities, Taxes, Etc.  Pursuant to Section 2.3, apro-rated portion of (i) the real property Taxes for Owned Real Property, (ii) inthe case of the Houston Plant and the Oklahoma City Plant, water, gas,electricity and other utilities relating to such plants, and (iii) in thecase of all the Purchased Assets, personal property Taxes, plus any additionalamounts which may be due based on actual bills versus amounts estimatedpursuant to Section 2.3 (it being agreed that if Seller paid morethan its pro rata portion based on such estimates, Buyer shall have no refundobligation to Seller); and

 

(g)           Accrued Vacation.  Subject to Section 6.2(a),accrued vacation as of the Closing Date for Hired Personnel.

 

Assumption by Buyer of the Assumed Liabilities shallnot in any way enlarge any of the rights of any third parties relating to anysuch Assumed Liability.

 

1.5.          Excluded Liabilities.  The “*ExcludedLiabilities*” shall consist of all Liabilities of the Seller Partiesother than the Assumed Liabilities, except the foregoing shall not limit in anyway Buyer’s indemnity obligation under Section 8.3(b).

 

1.6.          DISCLAIMER OF WARRANTIES.  EXCEPT AS SET FORTH IN ARTICLE IV, THEPURCHASED ASSETS ARE SOLD “AS IS”, “WHERE IS” AND NO 

 

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SELLER PARTY MAKES OR HASMADE ANY REPRESENTATION OR WARRANTY REGARDING THE PURCHASED ASSETS.  WITHOUT LIMITING THE FOREGOING, EXCEPT ASEXPRESSLY SET FORTH IN THIS AGREEMENT, NO SELLER PARTY MAKES ANY REPRESENTATIONOR WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OFANY PURCHASED ASSETS OR ANY OTHER REPRESENTATIONS OR WARRANTIES ARISING BYSTATUTE OR OTHERWISE IN LAW, FROM A COURSE OF DEALING OR USAGE OF TRADE, OROTHERWISE.  ALL SUCH OTHERREPRESENTATIONS AND WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED BY THE SELLERPARTIES.

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**ARTICLE II.PURCHASE PRICE**

 

2.1.          PurchasePrice.

 

(a)           Theaggregate purchase price (the “*PurchasePrice*”) to be paid by Buyer for the Purchased Assets shall be$45,390,000.00, as adjusted pursuant to this Article II.  In accordance with Sections2.1(b) and3.1, the Buyer shall pay to Seller an amount (“*ClosingPayment*”) equal to $45,390,000.00, plus the amount of the VacationReimbursement, if any, plus the balance of any amounts owed to Seller by Buyerpursuant to Sections 6.4 and 6.15, plus or minus thefollowing:  the amount of any EstimatedInventory and Prepaid Excess shall be added and the amount of any EstimatedInventory and the Prepaid Shortfall shall be subtracted.  In order to calculate the Closing Payment,Seller shall deliver to Buyer at least two (2) business days before theClosing Date an estimated calculation, which shall be prepared by Seller ingood faith, of the value of the Consumable Inventory to be reflected on theClosing Inventory Statement and the Prepaid Expenses (itemizing each PrepaidExpense) which are part of the Purchased Assets (the “*EstimatedInventory and Prepaid Value*”). The amount by which the Estimated Inventory and Prepaid Value exceeds$22,000,000.00 shall be called the “*Estimated Inventory andPrepaid Excess*” and the amount by which the Estimated Inventory andPrepaid Value is less than $22,000,000.00 shall be called the “*Estimated Inventory and Prepaid Shortfall*”.  The Estimated Inventory and Prepaid Valueshall be prepared, with respect to Consumable Inventory in accordance with theValuation Methodology described in Section 2.6(a), and with respectto the Prepaid Expenses which are part of the Purchased Assets, in accordancewith Seller’s Accounting Principles.

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(b)           TheClosing Payment shall be paid by wire transfer of same day funds to the accountset forth in Schedule 2.1 at Closing, except that if Buyer has notconsummated the Bank Financing as of the Closing Date, then Buyer shall havethe right to pay up to $20,000,000 of the Closing Payment in the form of asecured promissory note, said note to be payable to Seller in the form attachedhereto as Exhibit B (the “*Note*”).  The Note shall be secured by the collateralset forth in that certain Continuing Security Agreement dated the Closing Date,duly executed and delivered to Seller by Buyer in the form of Exhibit C(the “*Security Agreement*”).

 

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2.2.          Allocation.  The Purchase Price shall be allocated amongthe Purchased Assets as agreed to by the parties; provided that such allocationshall be subject to necessary adjustments, to be completed and reflected insuch allocation within ten (10) days following the issuance of the FinalClosing Statements, on account of the final Consumable Inventory and PrepaidExpense Valuation under Section 2.6.  The parties shall file Internal RevenueService Form 8594 with the Internal Revenue Service (“*IRS*”) reflecting such allocation in accordancewith Section 1060 of the Code, and shall agree and ensure that allfederal, state, local and foreign Tax returns which they file reflect suchallocation.  Each party shall promptlyprovide the other party with any other information required to complete IRS Form 8594.

 

2.3.          Prorations.

 

(a)           Onthe Closing Date, (i) the real property Taxes relating to the Owned RealProperty, (ii) in the case of the Houston Plant and the Oklahoma CityPlant, the water, gas, electricity and other utilities, and (iii) in thecase of all the Purchased Assets wherever located, personal property Taxes,shall each be prorated between Buyer and Seller effective as of the ClosingDate.  To the extent practicable, utilitymeter readings for the Houston Plant and the Oklahoma City Plant shall bedetermined as of the Closing Date and, if not available, will be estimated bythe parties.  If the final real propertyTax rate or final assessed value for the current Tax year is not established bythe Closing Date, the prorations shall be made on the basis of ninety-fivepercent (95%) of the rate or assessed value in effect for the most currentascertainable Tax year.  Prorations shallbe made on the principle that Seller shall be responsible for real propertyTaxes relating to the Owned Real Property, utilities relating to the HoustonPlant and the Oklahoma City Plant, and personal property Taxes related to thePurchased Assets allocable to the periods or portions of periods ending on orprior to the Closing Date, and Buyer shall be responsible for real propertyTaxes relating to the Owned Real Property, utilities relating to the HoustonPlant and the Oklahoma City Plant and personal property Taxes related to thePurchased Assets allocable to the period or portions of periods beginning afterthe Closing Date.

 

(b)           Withrespect to each personal property tax return required to be filed on or priorto the Closing Date, Seller shall prepare and file each such tax returnconsistent with its past practice.  Theallocation of personal property Taxes between the parties shall be made atClosing (i) based upon the value of the Purchased Assets (and no otherproperty) as reflected in the applicable personal property tax return in thecase of returns filed for the year in which the Closing occurs, or (ii) inthe case of returns not yet filed for the year in which the Closing occurs,based upon the value of the Purchased Assets (and no other property) determinedby Seller consistent with its past practices in filing personal property taxreturns (which in no event shall take into account the Purchase Price or anycontrary methodologies advanced by Buyer).

 

(c)           Theprorations and allocations required by this Section 2.3 shall bemade and paid by the parties at the Closing.

 

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2.4.          IncomeTaxes.  All Taxes in respect of theincome of the DSD Business for the period or portions of periods ending on orprior to the Closing Date shall be borne by the Seller Parties.  All Taxes in respect of the income of the DSDBusiness for the period or portions of periods beginning after the Closing Dateshall be borne by Buyer.

 

2.5.          ClosingCosts, Transfer Taxes and Fees.

 

(a)           Buyerand Seller shall each pay fifty percent (50%) of the cost of any transferTaxes, sales, use or other Taxes or fees imposed by reason of the transfer ofthe Purchased Assets (provided that in no event shall Buyer be liable for anyTax in respect of income imposed on any of the Seller Parties resulting fromtheir sale of the Purchased Assets to Buyer), costs of applying for new permitsand obtaining the transfer of existing permits, all fees and costs of recordingor filing all conveyancing instruments, all fees and costs of obtaining titleinsurance on the Owned Real Property as set forth in Section 7.1(d) herein,including the costs and surveys necessary to delete the standard printed formTitle Policy exception for matters shown by survey (which title insurance feesand costs shall not exceed $50,000.00 in the aggregate, it being agreed thatBuyer shall be liable for one hundred percent (100%) of title insurance feesand costs in excess of $50,000.00), and the fees and costs of recording orfiling all UCC termination statements and other releases of Liens other thanPermitted Liens (but not the amount of such Liens).  For the avoidance of doubt, Buyer and Sellershall each pay fifty percent (50%) of the cost of any transfer, sales, use orother Taxes or fees imposed by reason of the transfer of the Leased RealProperty to Realty.  Notwithstandinganything to the contrary herein, Seller shall not be liable for theadministrative cost of transferring title (tags only) imposed in connectionwith registering any Vehicles with any Governmental Authority in the name ofBuyer following the Closing, it being understood, however, that the costs ofall other transfer Taxes, sales, use or other Taxes or fees imposed by reasonof the transfer of the Vehicles on the Closing Date shall be paid fifty percent(50%) by Seller and fifty percent (50%) by Buyer.  The sales, use and transfer Tax returnsrequired by reason of said transfer shall be timely prepared and filed by theparty normally obligated by Applicable Law to make such filing.  The parties agree to cooperate with eachother in connection with the preparation and filing of such returns, inobtaining all available exemptions from such sales, use and transfer Taxes, andin timely providing each other with resale certificates and any other documentsnecessary to satisfy any such exemptions.

 

(b)           Ifany party (or any of its Affiliates) pays any Tax or fee required to be sharedby the parties or paid by the other party under Section 2.5(a), theowing party shall promptly (within twenty (20) days) reimburse the paying partyfor the amounts so owed.  If any party(or any of its Affiliates) receives any refund or credit of any Tax or fee towhich another party is entitled under Section 2.5(a), the receivingparty shall promptly (within twenty (20) days) pay such amounts to the partyentitled thereto.

 

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2.6.          Post-ClosingConsumable Inventory and Prepaid Expense Adjustment.

 

(a)           Schedule 2.6(a) is a statement settingforth the type and value of the Consumable Inventory of the DSD Business ownedby Seller as of June 28, 2008, which statement was prepared by Seller in amanner consistent with past practices used by Seller to value Inventory of theDSD Business (said statement being called “*Historic InventoryStatement*”).  Two (2) businessdays before the Closing Date, Seller shall cause a physical count of theConsumable Inventory constituting part of the Purchased Assets at both theTransferred Facilities and Buyer Sites (subject only to additions and deletionsmade by Seller in the ordinary course of the DSD Business from the time of thephysical inventory to the Closing Date). Representatives of both parties and their respective agents, includingauditors, may be present during the inventory count and each party shall beresponsible for its costs, including fees of its auditors and Representatives.  Based upon this physical inventory, Sellershall prepare and deliver to Buyer, within sixty (60) days following theClosing Date, a statement setting forth the type and value of the ConsumableInventory as of the Closing Date (“*Closing InventoryStatement*”), which shall be prepared in a manner consistent with theHistoric Inventory Statement, meaning that the valuation of ConsumableInventory as of the Closing Date shall be determined first, in accordance withthe valuation principles articulated in the Historic Inventory Statement;second, if not articulated, then in accordance with valuation principlesapplied by Seller in the valuation of Inventory reflected in the HistoricInventory Statement; and third, if not reflected in the Historic InventoryStatement, in accordance with valuation principles used by Seller in a mannerconsistent with Seller’s past practices in valuing Inventory of the DSDBusiness (all of said valuation principles being collectively called the “*Valuation Methodology*” and none of which are inconsistentwith Seller’s Accounting Principles). Buyer shall provide to Seller and its auditors and Representatives uponreasonable advance notice and during normal business hours access to the booksand records, any other information, including work papers of its auditors, andto any employees of Buyer reasonably necessary for Seller to prepare theClosing Inventory Statement, to respond to Buyer’s Objection (as defined below)and to prepare materials for presentation to the CPA Firm (as defined below) inconnection with Section 2.6(c). At the time Seller delivers the Closing Inventory Statement, Sellershall also deliver a statement of the Prepaid Expenses which were part of thePurchased Assets as of the Closing Date (the “*Prepaid Statement*”and, together with the Closing Inventory Statement being called “*Closing Statements*”).

 

(b)           Buyershall, within thirty (30) days after the delivery by Seller of the ClosingStatements, complete its review thereof. After delivery of the Closing Statements, Seller shall make available toBuyer its auditors and Representatives, upon reasonable advance notice andduring normal business hours, all books, records, work papers, personnel(including their accountants and employees) and other materials and sourcesused by Seller to prepare the Closing Statements.  The Closing Statements shall be binding andconclusive upon, and deemed accepted by, Buyer unless Buyer shall have notifiedSeller in writing within thirty (30) days after delivery of the Closing Statementsof any good faith objection thereto (the “*Buyer’s Objection*”).  The Buyer’s Objection shall set forth adescription of the basis of Buyer’s Objection and the adjustments to the valueof Purchased Consumable Inventory reflected on the Closing Statements oradjustments to the Prepaid Expenses reflected on the Prepaid Statement whichBuyer believes 

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should be made.  Any items notdisputed during the foregoing thirty (30) day period shall be deemed to havebeen accepted by Buyer.

 

(c)           IfSeller and Buyer are unable to resolve all of their disputes with respect tothe Closing Statements within thirty (30) days following Seller’s receipt ofBuyer’s Objection to such Closing Statements pursuant to Section 2.6(b),they shall refer their remaining differences to a nationally recognized firm ofindependent public accountants as to which Seller and Buyer mutually agree (the“*CPA Firm*”) for decision, which decisionshall be final and binding on the parties.  Any expenses relating to the engagement of theCPA Firm shall be shared equally by Seller, on the one hand, and Buyer, on theother hand.  Seller and Buyer shall eachbear the fees of their respective auditors incurred in connection with thedetermination and review of the Closing Statements.  Buyer and Seller shall instruct the CPA Firmnot to assign a value to any item in dispute greater than the greatest valuefor such item assigned to it by Buyer, on the one hand, or Seller, on the otherhand, or less than the smallest value for such item assigned to it by Buyer, onthe one hand, or Seller, on the other hand. Buyer and Seller shall also instruct the CPA Firm to make itsdetermination based solely on the presentations of Buyer and Seller that are inaccordance with the guidelines and procedures set forth in this Section 2.6(i.e., not on the basis of an independent review).

 

(d)           TheClosing Statements shall become final and binding on the parties upon theearliest of (i) if no Buyer’s Objection has been given, the expiration ofthe period within which Buyer must make its objection pursuant to Section 2.6(b) hereof,(ii) the date of an agreement in writing by Seller and Buyer that theClosing Statements, together with any modifications thereto agreed by Sellerand Buyer, shall be final and binding, and (iii) the date on which the CPAFirm shall issue its written determination with respect to any dispute relatingto such Closing Statements.  The ClosingStatements, as submitted by Seller if no timely Buyer’s Objection has beengiven or as adjusted pursuant to any agreement between the parties or asdetermined pursuant to the decision of the CPA Firm, when final and binding onall parties, is herein referred to as the “*Final Closing Statements*.”

 

(e)           Withinfive (5) business days following issuance of the Final Closing Statements,the net adjustment payment payable pursuant to this Section 2.6(e) (the“*Adjustment Payment*”) and interestthereon at the rate of three percent (3%) per annum shall be paid by wire transferof immediately available funds to a bank account designated by Seller or Buyer,as the case may be, except that if the Note is outstanding at the time anyAdjustment Payment is owed to Buyer, then in lieu of a wire transfer of theAdjustment Payment to Buyer, the Note shall be reduced by the amount of suchAdjustment Payment plus any accrued interest thereon as required by this Section 2.6(e),said reduction to be applied first to the accrued and unpaid interest and thenthe balance to the principal amount of the Note.  The Adjustment Payment shall be thedifference, if any, between (x) the value of Purchased ConsumableInventory and Prepaid Expenses, as reflected on the Final Closing Statements,minus (y) the Estimated Inventory and Prepaid Value.  The Adjustment Payment, if any, shall bepayable by Buyer to Seller, if positive, and by Seller to Buyer, if negative.

 

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2.7.          PromotionalExpense Proration.

 

(a)           Nolater than fifteen (15) days after Buyer notifies Seller of a PromotionalExpense that relates to periods that extend both before and after the ClosingDate (a “*Shared Promotional Expense*”), Buyer andSeller shall meet to determine the amount of such Shared Promotional Expenseallocable to the period on or prior to the Closing Date (a “*Seller Expense Reimbursement*”).  Seller and Buyer shall cooperate in goodfaith in an effort to reach agreement upon the amount of a Seller ExpenseReimbursement within ten (10) days of the initial meeting of Buyer andSeller with respect to such Seller Expense Reimbursement.  The Seller Expense Reimbursement due withrespect to any Shared Promotional Expense shall be computed by multiplying (A) theratio of the Seller’s Promotional Sales over the Total Promotional Sales by (B) theShared Promotional Expense in question. For purposes of this Section 2.7, the term “*Seller’s Promotional Sales*” means the sales of the DSDBusiness on or prior to the Closing Date that were attributable to the SharedPromotional Expense in question, and the term “*TotalPromotional Sales*” means the total sales for the period attributableto the Shared Promotional Expense in question.

 

(b)           Inthe event that Seller and Buyer are unable to reach an agreement on the SellerExpense Reimbursement within twenty (20) days of the initial meeting of Buyerand Seller with respect to such Seller Expense Reimbursement, they shall referthe calculation of the Seller Expense Reimbursement to the CPA Firm fordecision, which decision shall be final and binding on the parties.  Any expenses relating to the engagement ofthe CPA Firm shall be shared equally by Seller, on the one hand, and Buyer, onthe other hand.  Seller and Buyer shalleach bear the fees of their respective auditors and other representatives incurredin connection with the determination and review of the Seller ExpenseReimbursement.  Buyer and Seller shallinstruct the CPA Firm not to assign a value to the Seller Expense Reimbursementgreater than the greatest value for such item assigned to it by Buyer, on theone hand, or Seller, on the other hand, or less than the smallest value forsuch item assigned to it by Buyer, on the one hand, or Seller, on the otherhand.  Buyer and Seller shall alsoinstruct the CPA Firm to make its determination based solely on thepresentations of Buyer and Seller that are in accordance with the guidelinesand procedures set forth in this Section 2.7 (i.e., not on thebasis of an independent review).

 

(c)           Withinfive (5) business days following the determination of a Seller ExpenseReimbursement pursuant to clause (a) or (b) above,Seller shall pay such Seller Expense Reimbursement to Buyer by wire transfer ofimmediately available funds to a bank account designated by Buyer, except thatif the Note is outstanding at the time any Seller Expense Reimbursement is owedto Buyer, then in lieu of a wire transfer of the Seller Expense Reimbursementto Buyer, the Note shall be reduced by the amount of such Seller ExpenseReimbursement, said reduction to be applied first to the accrued and unpaidinterest and then the balance to the principal amount of the Note.  In the event that Seller fails to timely payany Seller Expense Reimbursement to Buyer, such Seller Expense Reimbursement shallaccrue interest at the rate of three percent (3%) per annum.  If Seller paid Buyer an amount in excess ofthe Seller 

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Expense Reimbursement prior to the resolution of such amount asprovided in this Section 2.7, then Buyer shall pay such excess toSeller by wire transfer of immediately available funds to a bank accountdesignated by Seller, together with accrued interest from the date ofdetermination of the Seller Expense Reimbursement pursuant to clauses (a) or(b) above.

 

**ARTICLE III.CLOSING**

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3.1.          TheClosing.  Subject to Article VII,the exchange of documents required to consummate the transactions contemplatedby this Agreement shall take place at 10:00 a.m., central standard time,on Friday, January 30, 2009, at the offices of Sonnenschein Nath &Rosenthal LLP, located in Chicago, but consummation of the transaction (the “*Closing*”)shall be effective as of 11:59 p.m., eastern standard time, on Saturday, January 31,2009 (the “*Closing Date*”); *provided,however*, that the cash portion of the Closing Payment (determinedpursuant to Section 2.1) shall be tendered by Buyer to Seller bywire transfer of same day funds at such time as federally insured financialinstitutions open for business on Monday, February 2, 2009, in New York,New York, and the Note, if applicable, shall be physically tendered to Selleror its representatives by 9:00 a.m., central standard time, on Monday, February 2,2009, at the offices of Sonnenschein Nath & Rosenthal LLP, located inChicago; *provided further*, *however*,that such transactions may occur on such other dates, times or places as agreedto in writing by Buyer and Seller.

 

3.2.          SellerParties’ Closing Deliveries.  Subjectto the conditions set forth in this Agreement and to Section 1.2,at the Closing, simultaneous with Buyer’s deliveries hereunder, the SellerParties shall deliver or cause to be delivered to Buyer the followingdocuments, certificates and instruments, all in form and substance reasonablysatisfactory to Buyer and its counsel.

 

(a)           RealtyEquity Interests.  Assignment ofmembership interests (and a certificate issued in the name of Buyer in theevent that such membership interests are certificated) evidencing the transferof all the right, title and interest in and to all of the equity interest inRealty to Buyer.

 

(b)           Instrumentsof Transfer.  Duly-executed bills ofsale, assignments of DSD Intellectual Property, vehicle title certificates andall such other instruments of sale, assignment and transfer as are necessary orappropriate to sell, assign and transfer to Buyer and to vest in Buyer all ofthe Seller Parties’ right, title and interest in the Purchased Assets, free andclear of all Liens other than Permitted Liens.

 

(c)           Releasesof Liens.  Any necessary instrumentor certificate, duly executed and in recordable form, to discharge or release,or cause to be discharged or released, any Lien, other than a Permitted Lienagainst the Purchased Assets or Lien related to any Assumed Liabilities.

 

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(d)           OperationalAgreements.  The followingagreements, in each case duly executed by Seller Parties, it being agreed thatonly the agreement described in clause (viii) has been finalized by theparties and that the other agreements are to be negotiated and modified in amanner mutually satisfactory to the parties based upon the parties’ discussionsand understandings as of the execution of this Agreement (collectively, the “*Operational Agreements*”):

 

(i)            A Trademark LicenseAgreement pursuant to which the Seller Parties grant to Buyer the right to usethe Trademarks and Trade Names specified therein on the terms set forth therein(the “*Seller Trademark License Agreement*”), substantially in the formattached hereto as Exhibit D;

 

(ii)           A Trademark License Agreementpursuant to which Buyer grants to Seller the right to use the DSD BusinessMarks for the purposes and on the terms set forth therein (“*Buyer Trademark License Agreement*”), substantially in theform attached hereto as Exhibit E;

 

(iii)          A Trademark LicenseAgreement pursuant to which Buyer grants to Seller the right to use theTrademarks and Trade Names specified therein in Canada and Mexico on the termsset forth therein (the “*Superior Trademark LicenseAgreement*”), substantially in the form attached hereto as Exhibit F.

 

(iv)          A Seller TransitionServices Agreement (the “*Seller TransitionServices Agreement*”)substantially in the form attached hereto as Exhibit G;

 

(v)           A Cappuccino and CocoaTransition Agreement with each of Seller’s two manufacturers pursuant to whichSeller’s designees may supply to Buyer certain cappuccino and cocoa products onthe terms set forth therein (each a “*Cappuccino and CocoaTransition Agreement*”), substantially in the form attached hereto asExhibit H (and subject to any reasonable modifications required bysaid manufacturers);

 

(vi)          A Co-Pack Agreementpursuant to which Buyer will co-pack for Seller at the Houston Plant, forSeller’s NSO Business, certain varieties of Sara Lee Foodservice roast andground coffee, tea and related products presently produced at the HoustonPlant, whether or not related to the DSD Business, on the terms set forththerein (“*Buyer Co-Pack Agreement*”), substantiallyin the form attached hereto as Exhibit I;

 

(vii)         A Co-Pack Agreementpursuant to which Seller will co-pack for Buyer at the St. Louis Park,Moonachie and Harahan Facilities to be retained by Seller, for Buyer’soperation of the DSD Business, certain varieties of roast and ground coffee andrelated products presently produced at those Facilities for the DSD Business,on the terms set forth therein (“*Seller Co-Pack Agreement*”),substantially in the form attached hereto as Exhibit J;

 

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(viii)        A Liquid CoffeeDistribution Agreement pursuant to which Seller will sell Douwe Egberts brandLiquid Coffee concentrate and related products to Buyer and Buyer willdistribute such Liquid Coffee concentrate and related products on the termstherein (“*Liquid Coffee Distribution Agreement*”),substantially in the form attached hereto as Exhibit K;

 

(ix)           A Green Coffee and TeaPurchase Agreement pursuant to which Seller will purchase and supply to Buyergreen coffee and tea on the terms therein (“*Green Coffee and TeaPurchase Agreement*”), substantially in the form attached hereto as Exhibit L;and

 

(x)            A Formula LicenseAgreement pursuant to which Seller will license to Buyer certain coffee, teaand other related product formulas set forth on Exhibit A to suchagreement which were used by Seller in the DSD Coffee Business or manufacturedin the Houston Plant prior to the Closing Date (“*FormulaLicense Agreement*”), substantially in the form attached hereto as Exhibit M.

 

(e)           TitleDocuments.  The following documents,in each case duly executed by Seller:

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(i)            a Foreign Investmentin Real Property Tax Act Affidavit in substantially the form of Exhibit N;

 

(ii)           with respect to OwnedReal Property, such affidavits and documents as may be reasonably required bythe Title Company in connection with issuing the Title Policies covering suchOwned Real Property;

 

(iii)          such other documents andinstruments reasonably necessary for the Title Company to issue any TitlePolicy (e.g., good standing certificates, authorizing resolutions, etc.); and

 

(iv)          a special warranty deedconveying fee simple title to each parcel of the Owned Real Property to Buyer,duly executed by Seller or Seller’s Affiliate as to any parcel owned by anAffiliate of Seller.

 

(f)            Certificate.  The following certificates:

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(i)            a certificate executedby an officer of each Seller Party and Realty certifying in such officer’sofficial capacity and not in his or her individual capacity, the organizationaldocuments and resolutions of the board of directors (or equivalent managingbody, as applicable) authorizing the execution and delivery of this Agreement,Additional Documents and the consummation of transactions contemplated herebyand thereby;

 

(ii)           an incumbencycertificate from each Seller Party and Realty;

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(iii)          a certificate certifyingthe existence and good standing of each Seller Party and Realty issued by theirrespective states of incorporation or organization as of a date not more thanten (10) days prior to the Closing Date; and

 

(iv)          a certificate executedby an officer of each Seller Party certifying in such officer’s officialcapacity and not in his or her individual capacity, that (i) therepresentations and warranties of the Seller Parties contained herein are trueand correct in all material respects (except those qualified by materiality,which are true and correct in all respects) on and as of the Closing Date,subject to any Changes reflected in updates to the Schedules (the effect ofsuch Changes and updates shall be as set forth in Section 6.6(a)),and (ii) the Seller Parties have performed and complied in all materialrespects with all of the agreements and covenants to be performed or compliedwith by them prior to and as of the Closing Date.

 

(g)           Rightof First Opportunity.  An agreementin the form of Exhibit O duly executed by Seller, pursuant to whichBuyer has the opportunity to acquire certain parcels of real property adjacentto the Houston Plant (“*Option Agreement*”).

 

(h)           DSDEmployee Information:  Seller shalldeliver (i) a listing setting forth the number, if any, of formerfull-time DSD Employees, by location of each such employee’s service, who leftthe employ of Seller within the ninety (90) day period preceding the ClosingDate, whether the termination was voluntary or involuntary to the employee; and(ii) a list setting forth the accrued and unused vacation for DSDEmployees as of a date no earlier than fourteen (14) days prior to the ClosingDate.

 

(i)            RealProperty Lease Assignment.  AnAssumption and Assignment duly executed by Seller assigning the Real PropertyLeases to Realty and accepted by Realty.

 

(j)            SecurityAgreement.  A counterpart of theSecurity Agreement, if applicable, executed by Seller.

 

3.3.          Buyer’sClosing Deliveries.  Subject to theconditions set forth in this Agreement, at the Closing, simultaneous with theSeller Parties’ deliveries hereunder, Buyer shall deliver or cause to bedelivered to Seller all of the following funds, documents and instruments, allin form and substance reasonably satisfactory to Seller and its counsel.

 

(a)           ClosingPayment.  The Closing Payment,including, if applicable, the Note, in the form permitted under Section 2.1(b) andpaid to Seller as set forth under Section 3.1.

 

(b)           OperationalAgreements.  The Operational Agreements,in each case duly executed by Buyer.

 

(c)           Officer’sCertificate.  A certificate executedby an officer of Buyer certifying in such officer’s official capacity and notin his or her individual capacity, the Organizational 

 

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Documents and resolutionsof the Board of Directors of Buyer authorizing the execution and delivery ofthis Agreement and the Additional Documents, and the consummation oftransactions contemplated hereby and thereby.

 

(d)           Bring-DownCertificate.  A certificate executedby an officer of Buyer certifying in such officer’s official capacity and notin his or her individual capacity, that (i) the representations andwarranties of Buyer contained herein are true and correct in all materialrespects (except those qualified by materiality, which are true and correct inall respects) on and as of the Closing Date, and (ii) Buyer has performedand complied in all material respects with all of the agreements and covenantsto be performed or complied with by it prior to and as of the Closing Date.

 

(e)           IncumbencyCertificate.  An incumbencycertificate from Buyer.

 

(f)            InsuranceCertificate.  A certificate issued byBuyer’s insurance carrier (or its agent) evidencing that the insurancecoverages described in Section 6.10 are in full force and effect.

 

(g)           Assumptionof Liabilities Agreement.  Anagreement whereby Buyer assumes and agrees to pay, defend, discharge andperform when due each of the Assumed Liabilities.

 

(h)           Rightof First Opportunity.  The OptionAgreement, duly executed by Buyer.

 

(i)            SecurityAgreement.  A counterpart of theSecurity Agreement, if applicable, duly executed by Buyer, together with allinstruments, transfer powers and other items required to be delivered inconnection therewith.

** **

**ARTICLE IV.REPRESENTATIONS AND WARRANTIES OF SELLER**

** **

Subject to the disclosures set forth in the Schedulesto this Agreement, Seller hereby represents and warrants to Buyer as set forthbelow as of the date hereof and, subject to Permitted Stipulated Updatespursuant to Section 6.6(a), as of the Closing Date.  The disclosure of information in any Scheduleshall qualify all representations and warranties to the extent such informationis sufficiently clear to communicate the representations and warranties whichit qualifies.  The disclosure of any itemor information in any Schedule shall not be construed as an admission that suchitem or information is required to be disclosed or is material to the DSD Businessor any representation or warranty made by Seller.  Information may be set forth in Schedules forinformational purposes only and the Schedules do not necessarily include othermatters of a similar nature.

 

4.1.          CorporateOrganization.  Each Seller Party andRealty is duly organized, validly existing and in good standing under the lawsof the state of its organization and in each other jurisdiction in which theownership and leasing of its properties and assets or the conduct of its 

 

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business requires suchqualification, except where such failure to qualify, in the case of each otherjurisdiction, would not have a Material Adverse Effect, with all requisiteorganizational power and authority to own, lease and operate its properties andassets and to conduct its business as now, or then, being conducted.  Neither Seller Party has any direct orindirect stock or other ownership interest (whether controlling or not) in anyPerson which engages in the United States in a business utilizing such Person’snetwork of facilities and vehicles to deliver coffees and teas directly tocustomer locations where such products are consumed.

 

4.2.          NoViolation.  The execution, deliveryand performance by either Seller Party of this Agreement and the other AdditionalDocuments to which it is a party and the consummation of the transactionscontemplated hereby and thereby do not and will not, (a) conflict with orresult in any violation of, or constitute a breach of any provision of thecharter document or bylaws or operating or limited liability company agreementof such Seller Party or Realty, (b) except for consents and approvals setforth in Schedule 4.2, conflict with, result in a violation of orconstitute a breach or default (or an event which, with notice or lapse of timeor both, would constitute a default) under, result in the acceleration of,create in any party the right to accelerate, terminate, modify or cancel,require notice under, or permit the termination of any Material Contract orReal Property Lease, (c) violate any Applicable Law, or (d) imposeany Lien, restriction or charge on the Purchased Assets, including theTransferred Facilities or the DSD Business, except for Liens, restrictions orcharges that would not, individually or in the aggregate, result in a MaterialAdverse Effect.

 

4.3.          Authority.  Each Seller Party has full power andauthority to enter into this Agreement and the other Additional Documents towhich it is a party and to consummate the transactions contemplated hereby andthereby, and to perform its obligations hereunder and thereunder.  The execution and delivery of this Agreement,the Additional Documents to which it is a party, the consummation of thetransactions contemplated hereby and thereby and the performance of SellerParties’ obligations hereunder and thereunder have been duly authorized by theSeller Parties, and no other proceedings on the part of Seller Parties arenecessary to authorize such execution, delivery and performance.  This Agreement and the other AdditionalDocuments to which any Seller Party is a party have been or will be duly andvalidly executed and delivered by each such Seller Party and, assuming the dueexecution and delivery of this Agreement and the Additional Documents by theother parties thereto, constitute or will constitute valid and binding legalobligations of each Seller Party to the extent a party thereto, enforceableagainst each such Seller Party to the extent a party thereto in accordance withtheir respective terms, except to the extent enforceability may be limited bybankruptcy, insolvency, reorganization, moratorium or other similar lawsaffecting the enforcement of creditors’ rights in general and subject togeneral principles of equity and the discretion of courts in granting equitableremedies.

 

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4.4.          Realty.

 

(a)           Uponconsummation of the transactions contemplated by this Agreement, Buyer willacquire good and valid title free and clear of all Liens to the equityinterests of Realty, which represents 100% of the equity of Realty.  The membership interests of Realty have beenduly authorized and validly issued and are fully paid and non-assessable.  There are no outstanding options, warrants orother rights exercisable for the purchase of, or securities convertible into,any equity interests of Realty or any agreements, contracts or commitmentsrelating to the issuance, sale, transfer, redemption, acquisition or voting ofany equity interests of Realty.  Themembership interests of Realty to be transferred to Buyer hereunder are theonly issued and outstanding equity interests of Realty.  Schedule 4.4 sets forth a true,correct and complete statement of the capitalization of Realty.

 

(b)           Realtyhas not engaged in any business other than owning the Real Property Leases andoperating the Leased Real Property and has no Liabilities other than thosewhich constitute Assumed Liabilities in Section 1.4.

 

4.5.          Compliancewith Laws.  Except as set forth on Schedule 4.5,to Seller’s knowledge, the DSD Business and the Transferred Facilities arebeing, and during the thirty-six (36) month period prior to the date hereofhave been, conducted and operated, and the Consumable Inventory has beenproduced, in compliance with all Applicable Laws, except for those failures tocomply which would not, individually or in the aggregate, have a MaterialAdverse Effect or those failures that have been cured by Seller.  During the thirty-six (36) month period priorto the date hereof, neither Seller Party has received written notification fromany Governmental Authority asserting that the conduct of the DSD Business, theoperation of the Transferred Facilities or the production of the ConsumableInventory is not in compliance with any Applicable Law, except for thosefailures to comply which would not, individually or in the aggregate, have aMaterial Adverse Effect or any instances of noncompliance which have been curedby Seller.

 

4.6.          FinancialStatements and Condition.  Seller hasdelivered to Buyer a copy of the unaudited pro forma statements of operationsof the DSD Business for the twelve (12) month period ended June, 28, 2008, andthe three (3) month period ended September 27, 2008(collectively, the “*Financial Statements*”). The DSD Business is not a separately reported unit of Seller.  As a result, the Financial Statements werenot prepared as part of Seller’s normal reporting process.  Instead, the Financial Statements have beencompiled by management of the DSD Business from source documentation subject tothe controls and procedures of Seller’s accounting systems.  This source documentation was prepared inaccordance with accounting principles set forth on Schedule 4.6-1(the “*Accounting Principles*”) except that no allocation of costhas been made to reflect Seller’s corporate overhead, general andadministrative expenses and services. Except as set forth on Schedule 4.6-2 or in the FinancialStatements, the Financial Statements (a) have been prepared in conformity,in all material respects, with the Accounting Principles, and (b) presentfairly, in all material respects, the results of operations of the DSD Business(other than the Excluded Assets and the Excluded Liabilities) for the timeperiod specified therein.  Except as setforth on Schedule 4.6-3, the definition of the term “*DSD*

 

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*Business*” set forth in Article XIof this Agreement accurately reflects and is consistent with the business ofSeller reflected in the Financial Statements for the periods covered thereby.

 

4.7.          Consentsand Approvals.  Except as set forthon Schedule 4.7, no filing or registration with, no notice to andno permit, authorization, consent, approval or waiver, of any GovernmentalAuthority is necessary to be made by any of the Seller Parties or Realty inconnection with the execution, delivery or performance of this Agreement or theAdditional Documents by Seller Parties or the consummation by Seller Parties ofthe transactions contemplated by this Agreement or the Additional Documents.

 

4.8.          Absence of Certain Changes orEvents.

 

(a)           Except(i) with respect to matters relating to the proposed sale of the PurchasedAssets and the DSD Business, (ii) for general economic conditions andconditions which affect the coffee, beverage or food service industry generally(and are not specific to the DSD Business), (iii) for any Banking Change,and (iv) as set forth in Schedule 4.8(a), since September 27, 2008,there has not been, nor does any Seller Party have knowledge of anydevelopment, individually or in the aggregate, which would reasonably beexpected to cause, any material adverse change in the financial condition,business, assets, liabilities, results or operations of the DSD Business, takenas a whole, or the ability of any Seller Party to execute, deliver and performthis Agreement and the other Additional Documents to which it is a party(collectively, “*Material Adverse Effect*”).  For the avoidance of doubt, and withoutlimiting the foregoing, Material Adverse Effect shall not include continuationof the downward trend in sales and financial performance of the DSD Business ina manner consistent with historic trends during the past three (3) years.

 

(b)           Withoutlimiting the foregoing, except as set forth in Schedule 4.8(b) andexcept with respect to matters not inconsistent with this Agreement and theAdditional Documents relating to the proposed sale of the Purchased Assets andthe DSD Business (including the separation of the DSD Business from the otherbusinesses of the Seller Parties), since September 27, 2008, (i) theSeller Parties have conducted the DSD Business in the ordinary course, and (ii) therehas not been any sale or other disposition, except in the ordinary course ofthe DSD Business, of any assets of the DSD Business, or any Liens (other thanPermitted Liens) placed on the assets of the DSD Business.

 

4.9.          Paymentof Taxes.  Except as set forth on Schedule 4.9,Seller has filed all Business Returns required to be filed (or obtained anextension with respect thereto) with respect to the DSD Business, except forthose failures to file or obtain an extension which would not, individually orin the aggregate, have a Material Adverse Effect.  Except as set forth on Schedule 4.9,Seller has timely paid, or made adequate provision for the payment of, allTaxes shown to be due on such Business Returns, all Tax assessments related tosuch Business Returns received, and all Taxes related to such Business Returnswhich have or may become due under Applicable Law with respect to all periodsor portions thereof ending on or prior to the Closing 

 

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Date, and, with respect to all periods through September 27, 2008,adequate provision therefor is reflected in the Financial Statements.  Except as set forth on Schedule 4.9,Seller has not requested an extension of time within which to file any suchBusiness Return which has not since been filed. Except as set forth on Schedule 4.9, Seller has not receivedwritten notice of any claim by any Taxing Authority in any jurisdiction whereit does not file Tax returns or pay Taxes that it is or may be subject to Taxby that jurisdiction solely as a result of its ownership or operation of theDSD Business.

 

4.10.        OwnedReal Property.

 

(a)           Acopy (including copies of all documents related to the exceptions listedtherein) of a preliminary report with respect to each parcel of Owned RealProperty (the “*Title Report*”) has beenpreviously provided to Buyer.  There isno pending or, to Seller’s knowledge, threatened condemnation or other form ofeminent domain proceeding against all or any portion of the Owned RealProperty.  None of the Owned RealProperty is subject to any commitment, right of first refusal or otherarrangement for the sale, transfer or lease thereof to any third party.

 

(b)           Thestructures, related improvements and fixtures located on the Owned RealProperty and Leased Real Property (i) to Seller’s knowledge, have nomaterial defects, and (ii) are in a condition sufficient for the operationof the DSD Business as presently conducted, subject to maintenance, repairs andimprovements to address normal wear and tear. No Seller Party is a sublessor or sublessee of any of the Owned RealProperty or the Leased Real Property except as set forth in Schedule 4.10(b).

 

4.11.        LeasedReal Property.  Schedule 4.11sets forth an accurate and complete list of all Real Property Leases.  Sellerhas provided Buyer with correct and complete copies of all Real Property Leasesand all amendments thereto.  Seller is inpeaceable possession of the Leased Real Property.  Except as set forth in Schedule 4.2or Schedule 4.11, with respect to each of the Real Property Leases:

 

(a)           atClosing such Real Property Lease will be valid and binding upon Realty and, tothe knowledge of Seller, enforceable against the other parties thereto inaccordance with its terms;

 

(b)           noneof the Seller Parties, Realty or the DSD Business is in breach of or defaultunder such Real Property Lease and, except for breaches or defaults caused bythe sale of the Purchased Assets to Buyer and Seller’s performance hereunder,no event has occurred or circumstance exists which, with the delivery ofnotice, the passage of time or both, would constitute such a breach or default,or permit the termination, modification or acceleration of rent under such RealProperty Lease, except where such breach or default would not, individually orin the aggregate, have a Material Adverse Effect;

 

(c)           noneof the Seller Parties, Realty or the DSD Business owes, or will owe in thefuture, any brokerage commissions or finder’s fees with respect to such RealProperty Lease;

 

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(d)           theother party to such Real Property Lease is not an Affiliate of any of theSeller Parties;

 

(e)           noneof the Seller Parties or Realty has subleased, licensed or otherwise grantedany person or entity the right to use or occupy such Leased Real Property orany portion thereof;

 

(f)            noneof the Seller Parties or Realty has collaterally assigned or granted any Lienin such Real Property Lease or any interest therein; and

 

(g)           tothe knowledge of Seller, no other party to any Real Property Lease is in breachthereof or default thereunder.

 

4.12.        TangiblePersonal Property.  The tangiblepersonal property, including the Tangible P&E and the Owned Vehicles,included in the Purchased Assets is owned by Seller, free and clear of allLiens other than Permitted Liens and Liens set forth in Schedule 4.12-1,all of which Liens, except for Permitted Liens, shall be fully released priorto Closing.  Schedule 4.12-2contains an accurate and complete list of each item of Tangible P&E (otherthan any Owned Vehicles) located at the Transferred Facilities as of October 9, 2008,having a fair market value on Seller’s books and records of at least $25,000.00as of such date.

 

4.13.        Vehicles;Routes; Personal Property Leases; Prepaid Expenses; Promotional Accruals.

 

(a)           Schedule 4.13-1sets forth an accurate and complete list of all routes used in the DSD Businessas of October 9, 2008 (collectively, the “*Routes*”).  An accurate and complete list of the OwnedVehicles used in the DSD Business as of October 24, 2008, is attachedas Schedule 4.13-2.  Since September 27, 2008,other than in the ordinary course of the DSD Business, Seller has not changedroutes of the DSD Business or disposed of any Vehicles.  The Routes, as changed by Seller prior to theClosing Date in the ordinary course of the DSD Business in accordance with Section 6.1,shall be referred to as the “*Closing Routes*”.

 

(b)           Schedule 4.13-3is an accurate and complete list of each Personal Property Lease involving thepayment by Seller of lease payments that in the aggregate exceed $25,000 percalendar year.  Seller has provided Buyerwith correct and complete copies of all Personal Property Leases listed on Schedule 4.13-3.  Except as set forth onSchedule 4.13-4, (i) each Personal Property Lease is valid andbinding upon the Seller Party who is a party thereto, and, to the knowledge ofSeller, enforceable against the other parties thereto in accordance with its terms,except where the failure of such Personal Property Lease to be valid, bindingor enforceable would not, individually or in the aggregate, have a MaterialAdverse Effect or such failures that have been cured by Seller, (ii) tothe knowledge of Seller, none of the Seller Parties or the DSD Business is inbreach of or default under such Personal Property Lease, and, except forbreaches or defaults caused by the acquisition of the Purchased Assets by Buyerand Seller’s performance under this Agreement, no event has occurred orcircumstance exists which, with the delivery of notice, the passage of time orboth, would constitute such a breach or default by 

 

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Seller, or permit the termination, modification or acceleration of anyobligation of Seller under such Personal Property Lease, except where suchbreach or default would not, individually or in the aggregate, have a MaterialAdverse Effect, and (iii) to the knowledge of Seller, no other party toany Personal Property Lease is in breach thereof or default thereunder, exceptwhere such breach or default would not, individually or in the aggregate, havea Material Adverse Effect.

 

(c)           Schedule 4.13-5contains an accurate and complete list of the Prepaid Expenses as of June 28,2008.

 

(d)           Schedule 4.13-6contains an accurate and complete list of Promotional Accruals relatingexclusively to the DSD Business as of June 28, 2008.

 

4.14.        Litigation.  Except as set forth in Schedule 4.14,there are no claims, actions, suits, governmental audits or investigations, orproceedings, including Products Liability Claims (collectively, “*Claims*”),pending or, to the knowledge of Seller, threatened, before any GovernmentalAuthority, or before any arbitrator of any nature, brought by or against anySeller Party or Realty involving, affecting or relating to (a) the DSDBusiness, the Purchased Assets, or the transactions contemplated by thisAgreement or the other Additional Documents, (b) seeking to enjoin orrescind the transactions contemplated by this Agreement or the AdditionalDocuments or (c) otherwise preventing Seller Parties from complying withthe terms and provisions of this Agreement and the Additional Documents.  None of the DSD Business or the PurchasedAssets is subject to any Judgment.  ToSeller’s knowledge, none of the Claims set forth in Schedule 4.14are expected to have a Material Adverse Effect.

 

4.15.        IntellectualProperty.  To Seller’s knowledge, noDSD Intellectual Property has been registered with any Governmental Authorityother than as set forth on Schedule 4.15.  For each registered DSD Business Mark, Schedule4.15 lists the jurisdiction of registration and the applicable application,registration or serial number.  Except asset forth on Schedule 4.15, the Seller Parties own all right, titleand interest in and to all of the DSD Business Marks in the United States freeand clear of all Liens (other than the Permitted Liens).  Except as set forth on Schedule 4.15,no Seller Party receives and no Person has a right to receive any royalty orsimilar payment in respect of the DSD Business Marks.  Except as set forth on Schedule 4.15,neither Seller Party has licensed, sublicensed or given permission to anyone touse any of the DSD Business Marks. Except as set forth on Schedule 4.15, no Seller Party issubject to any Judgment, nor have any of them entered into or become a party toany Contract, in either case which restricts or impairs the ability of anySeller Party to use, exploit, assert or enforce any of the DSD Business Marksanywhere in the United States.  To theknowledge of Seller, the DSD Intellectual Property has not interfered with,infringed (directly, contributorily, by inducement or otherwise), misappropriated,or otherwise violated, and, to the knowledge of Seller, the DSD IntellectualProperty does not infringe (directly, contributorily, by inducement orotherwise), misappropriate or otherwise violate any Proprietary Rights of anythird party.  Seller Parties have notreceived any written charge, complaint, claim, demand or notice alleging anysuch interference, infringement, misappropriation or violation (including anyclaim that the DSD 

 

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Business must license or refrain from using any Proprietary Rights ofany third party).  Except with respect tothe unauthorized registered use by third parties of domain names, SellerParties and the DSD Business have taken all reasonable and prudent steps in theUnited States to protect the DSD Business Marks from infringement in the UnitedStates by any other firm, corporation, association or Person and will continueto maintain and protect all of the DSD Business Marks in the United Statesprior to Closing so as not to adversely affect the validity or enforceabilitythereof.  Except as set forth on Schedule 4.15,to the knowledge of Seller, no Person in the United States has or is infringingon (directly, contributorily, by inducement or otherwise), interfering with,misappropriating or violating the DSD Business Marks and no Seller Party hasreceived any written notice of the same. No interference, opposition, reissue, reexamination or other proceedingis pending or, to the Seller Parties’ knowledge, is threatened, whichchallenges the scope, legality, validity, enforceability, use or ownership ofany item of the DSD Business Marks in the United States.  All of Seller’s rights with respect to theDSD Business Marks are valid and enforceable rights of Seller Parties and willnot cease to be valid and in full force and effect in the United States byreason of the execution, delivery and performance of this Agreement and theAdditional Documents or the consummation of the transactions contemplatedhereby and thereby.  Except as set forthon Schedule 4.15, no Seller Party has ever agreed to indemnify anyPerson for or against any interference, infringement or misappropriation, withrespect to any DSD Intellectual Property outside the ordinary course of the DSDBusiness.  To Seller’s knowledge, noSeller Party possesses a registration for any domain name using the DSDBusiness Marks listed on Schedule 1.1(a)-1 except for those domain namesset forth on Schedule 4.15. For purposes of this Section 4.15, the term “DSDIntellectual Property” does not include any copyright which is not material.

 

4.16.        Permits.  To Seller’s knowledge, Seller or Realtypossess the Permits set forth on Schedule 4.16-1.  To the knowledge of Seller, the Permits setforth on Schedule 4.16-1 include all of the Permits necessary forSeller and Realty to own and operate the DSD Business as conducted by them asof the Closing Date, except for those Permits the failure of which to possesswould not, individually or in the aggregate, have a Material Adverse Effect.  The DSD Business and the TransferredFacilities are operated in compliance with, all Permits, except for thosefailures to comply which would not, individually or in the aggregate, have aMaterial Adverse Effect.  All of thePermits listed on Schedule 4.16-1 are in full force and effect, andno Seller Party has received during the past three (3) years any writtennotice to the contrary except as set forth on Schedule 4.16-2.

 

4.17.        Contracts.

 

(a)           Setforth in Schedule 4.17(a) is an accurate and complete list ofall Material Contracts other than those specifically identified in anotherSchedule to this Agreement.  The SellerParties have delivered or made available to Buyer a correct and complete copyof each Material Contract and all amendments thereto.  The term “*MaterialContract*” means each of the following Contracts relating to the DSDBusiness which are either Purchased Contracts or Mixed Use Contracts (otherthan Contracts for the purchase by Seller of green coffee, tea, Liquid Coffee 

 

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concentrate, cocoa and cappuccino products, Machines and Spare Parts,and Contracts relating to software and information technology services orproducts) to which a Seller Party or Realty is a party or is bound:

 

(i)            Any Contract (or group of relatedContracts) for the purchase or sale of commodities, supplies, products or otherpersonal property, or for the furnishing or receipt of services, theperformance of which will extend over a period of more than one year or thatinvolves expenditures or receipts of the DSD Business in excess of $87,500annually and which cannot be terminated on sixty (60) or less days noticewithout penalty;

 

(ii)           Any Contract not made in the ordinarycourse of the DSD Business;

 

(iii)          Any distribution, franchise, license, salesor commission Contract related to the DSD Business;

** **

(iv)          Any Contract that contains covenantsthat in any way purport to restrict the business activity of the DSD Business(or any part thereof) or limit the freedom of the DSD Business (or any part thereof)to engage in any line of business or to compete with any Person;

 

(v)           Any Contract (or group of relatedContracts) involving annual revenues of more than $87,500 under which Sellerhas granted price protection provisions;

 

(vi)          Any Contract with an indemnityobligation not made in the ordinary course of the DSD Business;

 

(vii)         Any purchase, supply or other Contractimposing on Seller confidentiality covenants not made in the ordinary course ofthe DSD Business;

 

#### (viii)        Any purchase, supply or other Contract,other than service Contracts, imposing on Seller nonsolicitation covenants;

 

(ix)           Any purchase, supply or otherContract (or group of related Contracts) which provides for warranties orreturn of product, rebates, sharing of fees, grant of discounts or similararrangements involving annual sales by Seller in excess of $87,500 or whichprovides a grant of exclusivity by Seller to another contracting party;

 

(x)            Any Contract (or group of relatedContracts) which provides for consignment or similar arrangement of tangibleassets having a fair market value in excess of $87,500;

 

(xi)           Any collective bargaining agreementrelating to the DSD Business;

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(xii)          Any Contract for the employment of anyindividual on a full-time, part-time or other basis or providing severancebenefits or any consulting agreement providing annual compensation in excess of$87,500;

 

(xiii)         Any Contract under which it hasadvanced or loaned any amount to any of the employees of the DSD Businessoutside the ordinary course of the DSD Business;

 

(xiv)        Any Contract which is a “futures”contract committing the DSD Business (or any part thereof) to purchase, oraccept delivery of, product at future times at fixed prices;

 

(xv)         Any Contract that is a joint ventureagreement;

 

(xvi)        Any Contract (or group of relatedContracts) that involves receivables of the DSD Business in excess of $87,500annually which contains a “most favored customer” or “most favored nation”clause in favor of any customer of the DSD Business; and

 

(xvii)       Any Contract that is an amendment,supplement or modification (whether oral or written) in respect of any of theforegoing.

 

(b)           Exceptas set forth on Schedule 4.17(b), with respect to each of the DSDContracts, (i) such DSD Contract is valid and binding upon the SellerParty who is a party thereto or Realty, as the case may be, and, to theknowledge of Seller, enforceable against the other parties thereto inaccordance with its terms, except to the extent that any failure of such DSDContract to be valid, binding or enforceable would not, individually or in theaggregate, have a Material Adverse Effect, (ii) none of the Seller Partiesor Realty is in breach of or default under such DSD Contract and, except forbreaches or defaults caused by the sale of the Purchased Assets to Buyer andSeller’s performance hereunder, no event has occurred or circumstance existswhich, with the delivery of notice, the passage of time or both, wouldconstitute a breach or default, or permit the termination, modification oracceleration of any obligation under such DSD Contract, except where suchbreach or default would not, individually or in the aggregate, have a MaterialAdverse Effect, and (iii) to the knowledge of Seller, no other party toany DSD Contract is in breach thereof or default thereunder, except to theextent that any such breach would not, individually or in the aggregate, have aMaterial Adverse Effect.

 

4.18.        NoOther Agreement.  Other than forsales of assets in the ordinary course of the DSD Business, none of the SellerParties or Realty, or any of their respective Affiliates or Representatives,has any commitment or legal obligation, absolute or contingent, to any otherPerson other than Buyer, to sell, assign, transfer or effect a sale or otherdisposition of any of the Purchased Assets or the DSD Business.

 

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4.19.        EmployeePlans.

 

(a)           Schedule 4.19(a) listseach material plan, agreement, arrangement or policy providing forcompensation, bonuses, profit-sharing, stock option or other stock relatedrights or other forms of incentive or deferred compensation, vacation benefits,insurance (including any self-insured arrangements), health or medicalbenefits, employee assistance program, disability or sick leave benefits,workers’ compensation, supplemental unemployment benefits, change in controlbenefits, severance benefits and post-employment or retirement benefits(including compensation, pension, health, medical or life insurance benefits),or other employee benefits, in each case, which is either maintained,administered, sponsored or contributed to by a Seller Party or their ERISAAffiliates for the benefit of any Hired Personnel (each, individually, an “*Employee Plan*” and collectively, the “*EmployeePlans*”).

 

(b)           Withrespect to each of the Employee Plans that is not a Multiemployer Plan, Sellerhas made available to Buyer:  (i) atrue, correct and complete copy of such Employee Plan, (ii) the mostrecent Annual Report (Form 5500 Series) and accompanying schedule, if any,and (iii) the most recent determination letter from the IRS, if any.  Seller has also made available to Buyer thecurrent summary plan description and any material modifications thereto foreach Employee Plan that is not a Multiemployer Plan in respect of which thereexists a summary plan description.

 

(c)           Schedule 4.19(c) identifieseach Employee Plan intended to be a “qualified plan” within the meaning of Section 401(a) ofthe Code (“*Qualified Plans*”).  Each Qualified Plan has received a favorabledetermination letter from the IRS or is a prototype plan that has received afavorable opinion letter from the IRS, and any such IRS letter has not beenrevoked.

 

(d)           Exceptas would not reasonably be expected to have a Material Adverse Effect, Sellerhas timely made or accrued all contributions required with respect to anyQualified Plan.

 

(e)           Exceptas would not be reasonably expected to have a Material Adverse Effect, theSeller Parties and their ERISA Affiliates have performed and complied with allof their obligations under or with respect to the Employee Plans and eachEmployee Plan that is not a Multiemployer Plan has been operated in allmaterial respects in accordance with its terms and in compliance with allApplicable Laws including the Code and ERISA, and to Seller’s knowledge, eachMultiemployer Plan has been operated in all material respects in accordancewith its terms and in compliance with all Applicable Laws including the Codeand ERISA.  There are no pending or, toSeller’s knowledge, threatened claims or proceedings relating to the EmployeePlans that are not Multiemployer Plans, other than routine claims for benefitsthat have not resulted in any pending or, to Seller’s knowledge, threatenedlitigation.  Neither the Seller Partiesnor their ERISA Affiliates have engaged in a transaction with respect to anyEmployee Plan that, assuming the taxable period of such transaction expired asof the date hereof, would be reasonably expected to subject Seller to a tax orpenalty imposed by Sections 4975 through 4980 of the Code orSections 502(i) or 502(l) of ERISA in an amount which would havea Material Adverse Effect.  There are nomaterial audits, inquiries or proceedings pending or, to Seller’s 

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knowledge, threatened by the IRS, Department of Labor, or any otherGovernmental Authority with respect to any Employee Plan.

 

4.20.        Laborand Employee Matters.

 

(a)           Exceptas set forth in Schedule 4.20(a), Seller is not a party to, orotherwise bound by, a collective bargaining agreement (or any other agreementwith any labor organization), which covers any of the Hired Personnel.  To Seller’s knowledge, no labor unions orother organizations have filed a petition within the last 6 months with theNational Labor Relations Board or any other Governmental Authority seekingcertification as the collective bargaining representative of any employees ofthe DSD Business.  To Seller’s knowledge,no labor union or organization is currently engaged in any organizing activitywith respect to any employees of the DSD Business.  During the past two (2) years, the DSDBusiness has not experienced any material work stoppage, labor dispute,grievance, slowdown, lockout or strike, and to the knowledge of Seller, nonehas been threatened against the DSD Business. To Seller’s knowledge, except as set forth in Schedule 4.20(a),there is no unfair labor practice charge or complaint against the DSD Businesspending before the National Labor Relations Board or any other GovernmentalAuthority.

 

(b)           Schedule 4.20(b) listsall DSD Employees as of October 27, 2008, and for each such employeethe:  (i) job position; (ii) joblocation; (iii) classification as full-time or part-time as of November 13,2008; (iv) classification as exempt or non-exempt under applicable stateor federal overtime regulations; (v) current hourly rate of compensationor base salary (as applicable); (vi) eligible vacation; and (vii) theoriginal date of hire.  The last payreview day for DSD employees not covered by a Labor Contract is September 1,2008.  For DSD Employees covered by aLabor Contract, the applicable Labor Contract includes the effective date ofany pay rate changes.  Schedule 4.20(b) describesSeller’s policies for scheduling hours of work per week for DSD Employees whoare non-exempt and part-time employees.  Schedule4.19(a) lists the Employee Plans that provide to DSD Employees othercompensation or allowance and target incentive compensation (commission and/orbonus, as applicable).  In addition, tothe extent any DSD Employees are on leaves of absence as of October 27,2008, Schedule 4.20(b) indicates the category of such leave ofabsence and an estimate of each such employee’s anticipated date of return toactive employment.  To Seller’sknowledge, no executive, key employee or group of DSD Employees listed on Schedule 4.20(b) hasindicated any plans to terminate employment with the Seller before or withBuyer promptly after the Closing.  Schedule4.20(b) shall be updated and provided to Buyer as of the Closing Dateand the information provided by Seller to Buyer as described in Section 3.2(h)(i) aboveshall be accurate as of the Closing Date with respect to the DSD Employees asof such date.

 

(c)           Duringthe 90 days prior to the Closing, Seller has not effectuated (i) a “plantclosing” (as defined in the Worker Adjustment and Retraining Notification Act(the “*WARN Act*”) (or any similar state orlocal law)) affecting any Transferred Facility or (ii) a “mass layoff” 

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(as defined in the WARN Act (or any similar state or local law))affecting any Transferred Facility.

 

(d)           Sellerhas provided Buyer with access to copies of all manuals, written policies orsimilar documents of the Seller Parties which are material to the DSD Businessregarding compensation, benefits, perquisites, and personnel matters.  Except for the Sara Lee Corporation SeverancePay Plan and the Sara Lee Corporation Severance Pay Plan for A & BLevel Executives or as provided under any Labor Contract in which HiredPersonnel participate (the “*Severance Plans*”),the DSD Business has no oral or written severance policy or other severanceobligation.

 

4.21.        HazardousSubstances.  Except as set forth in Schedule 4.21:

 

(a)           ToSeller’s knowledge, the DSD Business is, and during the past five (5) yearshas been, in compliance and the Transferred Facilities are, and during the pastfive (5) years have been, operated and maintained by Seller in compliancewith all Environmental Laws including laws relating to Hazardous Substances,except where non-compliance would not, individually or in the aggregate, have aMaterial Adverse Effect.  Seller has, andduring the past five (5) years has had, all Permits required under anyEnvironmental Law and the DSD Business and the Facilities are, and at all timeshave been in compliance with such Permits, except where non-compliance wouldnot, individually or in the aggregate, have a Material Adverse Effect.  During the five (5) years preceding theClosing, Seller has not received any written notice that the DSD Business orthe Transferred Facilities is or were claimed to be in violation of theprovisions of any Environmental Law or in non-compliance with the conditions ofany Permit, and there are no Claims pending or, to the knowledge of Seller,threatened to that effect.  To Seller’sknowledge, during the past five (5) years there have been no HazardousSubstance Releases at the Transferred Facilities which were reportable underApplicable Laws.

 

(b)           Sellerhas delivered true, complete and correct copies of (i) all written reportsof all environmental investigations, assessments, studies, audits, and testresults, which have been conducted at any Transferred Facility within the pastfive (5) years by any outside attorney, environmental consultant orengineer engaged by Seller for such purpose, and (ii) to the knowledge ofSeller, all Permits, reports, and filings required by any applicableEnvironmental Laws, OSHA safety complaints or other similar documentationrequired by law to be filed with any Governmental Authority during the pastfive (5) years relating to the ownership or operation of the TransferredFacilities in the possession of Seller. All such documents referenced in the foregoing clauses (i) and (ii) arelisted on Schedule 4.21(b).

 

(c)           Thereare no underground storage tanks currently used or operated on, in or under anyof the Transferred Facilities, and, to Seller’s knowledge, no undergroundstorage tanks currently exist on, in or under any of the TransferredFacilities.

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(d)           Tothe Seller’s knowledge, there are no asbestos, asbestos containing materials orany PCB containing equipment or fixtures which would require remediation,decommissioning, decontamination, abatement or removal for continued operationsat the Transferred Facilities.

 

(e)           Thereare no Judgments by any Governmental Authority or quasi-governmental entityrelating to any Environmental Law which regulate, obligate, bind or in any wayaffect the DSD Business or the Transferred Facilities.

 

(f)            ToSeller’s knowledge, there is not and has not been during the past five yearsany Hazardous Substance used, generated, treated, stored, transported, disposedof, handled or otherwise existing on, under or about any Transferred Facility,except for quantities of any such Hazardous Substances stored or otherwise heldon, under or about any such Transferred Facility in compliance with allEnvironmental Laws.

 

(g)           ToSeller’s knowledge, Seller has at all times used, generated, treated, stored,transported, disposed of or otherwise handled its Hazardous Substances insubstantial compliance with all Environmental Laws and in a manner that willnot result in liability of Seller or Buyer under any Environmental Law.

 

(h)           ToSeller’s knowledge, there are no present or past Environmental Conditions (asdefined below) in any way related to the DSD Business or the TransferredFacilities which would have a Material Adverse Effect.  “*Environmental Conditions*”means the introduction into the soil, groundwater or environment of theTransferred Facilities (through leak, spill, release, discharge, escape,emission, dumping, disposal or otherwise) of any pollution, including withoutlimitation any contaminant, irritant or pollutant or Hazardous Substance (uponthe property of the DSD Business and only where such pollution constituted atthe time thereof a violation of any Environmental Law).

 

4.22.        Brokers’Fees and Commissions.  None of theSeller Parties or any of their respective Affiliates or Representatives hasengaged any investment banker, broker or finder in connection with thetransactions contemplated hereby.

 

4.23.        ConsumableInventory.  The Consumable Inventoryshall not at the time of Closing (a) be adulterated or misbranded withinthe meaning of the Federal Food, Drug and Cosmetic Act, as amended, andincluding its food and coloring additive amendments and the regulationspromulgated thereunder (collectively the “*Federal Act*”), (b) beadulterated or misbranded within the meaning of any Applicable Law, or (c) bean article which, under the provisions of Sections 405 and 505 of theFederal Act, would not be able to be introduced into interstate commerce in theUnited States.  Except as provided on Schedule 4.23,all Consumable Inventory produced in any Facility operated by Seller wasproduced in accordance with Good Manufacturing Practice (as that term isdefined in the Federal Act).

 

4.24.        CertainPayments.  Since September 27,2008, neither the Seller Parties nor any Affiliate of the Seller Parties, anyRepresentative of the Seller Parties or such Affiliate nor any

 

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other Person associatedwith or acting for or on behalf of the Seller Parties has in connection withthe DSD Business, directly or indirectly, made any contribution, gift, bribe,rebate, payoff, influence payment, kickback, or other payment to any Person,private or public, regardless of form, whether in money, property, or services (a) toobtain favorable treatment in securing business, (b) to pay for favorabletreatment for business secured, (c) to obtain special concessions or forspecial concessions already obtained, for or in respect of any Seller Party, or(d) in violation of any Applicable Law.

 

4.25.         Customers.  Seller has provided to Buyer an accurate andcomplete list prepared by the management of the DSD Business identifying thosecustomers who, during the period from July 1, 2007 to June 28, 2008,either ceased to do business with the DSD Business and transferred their salesof coffee, tea and related products to Seller’s NSO Business, or ceased to dobusiness with the NSO Business and transferred their sales of coffee, tea andrelated products to Seller’s DSD Business (collectively “*PriorCustomers*”).  During theperiod from June 29, 2008, to the Closing Date, the net loss of grossmargin to the DSD Business due to the transfer of business by Prior Customersfrom the NSO Business to the DSD Business and from the DSD Business to the NSOBusiness shall not exceed the amount determined by prorating $2.5 million basedon the number of days from and including June 29, 2008 through andincluding the Closing Date divided by 365 days. The fluctuations in purchases by Shared Customers from the DSD Businessand the NSO Business are not covered by the representations and warranties madein this Section 4.25.

 

4.26.        LOICompliance.  On November 24th,25th, and 26th, 2008, Seller asked each of the individuals listed on Schedule4.26 whether, since August 20, 2008, such individuals took any actionintended to induce conversion of (a) exclusive DSD Customers to SharedCustomers or customers of the NSO Business, or (b) Shared Customers tocustomers solely of Seller’s NSO Business. The form of inquiry made and the results of such inquiries are noted on Schedule4.26.

 

**ARTICLE V.REPRESENTATIONS AND WARRANTIES OF BUYER**

 

Buyer hereby represents and warrants to the SellerParties as of the date hereof and as of the Closing Date as set forth below.

 

5.1.          Corporate Organization.  Buyer is a corporation, duly organized,validly existing and in good standing under the laws of the state of Delaware.

 

5.2.          Authority.  Buyer has the corporate power and authorityto enter into this Agreement and the other Additional Documents to which it isa party and to consummate the transactions contemplated hereby and thereby, andto perform its obligations hereunder and thereunder.  The execution and delivery of this Agreement,the other Additional Documents to which it is a party, the consummation of thetransactions contemplated hereby and thereby and the performance of Buyer’sobligations hereunder and thereunder have been duly authorized by Buyer, and noother proceedings on the part of Buyer are necessary to authorize suchexecution, 

 

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delivery andperformance.  This Agreement and theother Additional Documents to which Buyer is a party have been or will be dulyand validly executed and delivered by Buyer and assuming the due execution anddelivery of this Agreement and the Additional Documents by the other partiesthereto, constitutes or will constitute valid and binding legal obligations ofBuyer to the extent a party, enforceable against Buyer to the extent a partythereto in accordance with their respective terms, except to the extentenforceability may be limited by bankruptcy, insolvency, reorganization,moratorium or other similar laws affecting the enforcement of creditors’ rightsin general and subject to general principles of equity and the discretion ofcourts in granting equitable remedies.

 

5.3.          No Violation.  The execution, delivery and performance byBuyer of this Agreement and the other Additional Documents to which it is aparty and the consummation by Buyer of the transactions contemplated hereby andthereby, do not violate any Applicable Law, do not and will not conflict withor result in any violation of, or constitute a breach of or default under(whether with or without notice or a lapse of time or both) any provision ofthe charter document or bylaws of Buyer or of any other agreement or obligationto which it is a party, the breach of which would impair Buyer’s ability toconsummate such transactions.

 

5.4.          Consents and Approvals.  No filing or registration with, no notice toand no permit, authorization, consent, approval or waiver of any GovernmentalAuthority or other Person is necessary to be made by Buyer for the execution,delivery or performance of this Agreement or the Additional Documents by Buyeror the consummation by Buyer of the transactions contemplated hereby orthereby.

 

5.5.          Brokers’ Fees and Commissions.  None of Buyer or its Representatives hasengaged any investment banker, broker or finder in connection with thetransactions contemplated hereby other than Kerlin Capital Group, LLC, whosefees will be paid by Buyer.

 

5.6.          Litigation.  There are no Claims pending or, to theknowledge of Buyer, threatened before any Governmental Authority, or before anyarbitrator of any nature, against Buyer which seek to enjoin or rescind thetransactions contemplated by this Agreement and the Additional Documents orotherwise prevent Buyer from complying with the terms and provisions of thisAgreement and the Additional Documents.

 

5.7.          Investigation By Buyer.  Buyer acknowledges that (a) Buyer hasmade such investigation of the business, assets, financial condition andliabilities of the DSD Business, and has been offered the opportunity to asksuch questions of appropriate representatives of Seller relating to theforegoing, as Buyer deems appropriate to enter into the transactionscontemplated hereby, and (b) except for the representations and warrantiesof the Seller Parties in this Agreement, Buyer is not relying on anyrepresentation or warranty by the Seller Parties or any other Person inentering into the transactions contemplated hereby (and will not rely on anyother representation or warranty in effecting the Closing).  Buyer acknowledges that neither any Seller 

 

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Party nor any otherPerson has made any representation or warranty as to the future prospects(financial or otherwise), profitability, sales levels or independent operationof the DSD Business.

 

5.8.          Availability of Financing.  Except for the amount of the Closing Paymentthat Buyer may pay pursuant to the Note as set forth in Section 2.1(b),Buyer currently has, and as of Closing will have, all funds necessary toperform its obligations hereunder, including to pay the Purchase Price at theClosing.

 

**ARTICLE VI.COVENANTS**

 

6.1.          Conduct of DSD Business Prior tothe Closing.  During the period fromthe date of this Agreement until the Closing, except as expressly contemplatedor permitted by this Agreement or arising in the ordinary course of the DSDBusiness, or to the extent that Buyer shall otherwise consent, the SellerParties shall use commercially reasonable efforts to preserve the Purchased Assetsand DSD Business intact, including its present operations, TransferredFacilities, working conditions and relationships with lessors, licensors,suppliers, customers and employees, and carry on the DSD Business in such amanner so that the representations and warranties contained in Article IVshall continue to be true and correct in all material respects on and as of theClosing Date as if made on the Closing Date. Without limiting the foregoing, except as expressly contemplated orpermitted by this Agreement or to the extent that Buyer shall otherwiseconsent, Seller Parties shall operate the DSD Business in the ordinary course,and Seller Parties shall not take any action in breach of this Agreement.  Without limiting the generality of theforegoing, Seller Parties shall not, except as specifically contemplated bythis Agreement:

 

(a)           enterinto any agreements, adopt promotions or otherwise conduct the DSD Business inany way which would reasonably be likely to materially and adversely affect thesales or results of operations of the DSD Business, including taking any actionintended to influence or induce the conversion of (i) Exclusive Customersto Shared Customers or customers solely of Seller’s NSO Business, or (ii) SharedCustomers to customers solely of Seller’s NSO Business, or to otherwise reducethe purchases of DSD Customers from the DSD Business.  It is understood and agreed that certaincustomers transfer their transactions and certain other customers fluctuatetheir levels of purchases of coffee, tea and other products from the DSDBusiness to the NSO Business and from the NSO Business to the DSD Business inthe ordinary course of the DSD Business without any conduct on the part ofSeller intended to induce or influence customers, and that transfers ofcustomers and transactions at the levels as described in Section 4.25are consistent with the ordinary course of the DSD Business;

 

(b)           enterinto, extend, materially modify, terminate or renew any Material Contract orReal Property Lease, except in the ordinary course of the DSD Business;

 

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(c)           sell,assign, transfer, convey, lease, mortgage, pledge or otherwise dispose of orencumber any of the Purchased Assets, or any interests therein, except in theordinary course of the DSD Business;

 

(d)           failto pay, when due, accounts payable, debts and other Liabilities of the DSDBusiness, except in the ordinary course of the DSD Business and in the case ofbona fide disputes regarding the same;

 

(e)           removeany Tangible P&E from the Transferred Facilities, except for removals ordispositions of damaged or obsolete Tangible P&E, or sales or otherdispositions in the ordinary course of the DSD Business; *provided*that Seller shall be permitted to remove the Brew Equipment Inventory from theTransferred Facilities that are not part of the Purchased Assets as a result ofthe allocation process of Section 1.1(c); or

 

(f)            reconfigureRoutes except in the ordinary course of the DSD Business.

 

6.2.          Employeesand Employee Benefits.

 

(a)           Subjectto the Labor Contracts, at the Closing Buyer shall offer employment on anat-will basis, effective as of the Closing Date, to all DSD Employees who areemployed by the Seller (or one of its Affiliates) immediately prior to theClosing (the individuals who either accept Buyer’s offer of employment or aresubject to the Labor Contracts are collectively referred to herein as the “*Hired Personnel*”), in each case (A) at an ApprovedLocation (and Buyer agrees not to move Hired Personnel to a different locationfor a period of ninety (90) days after the Closing Date) in a substantiallysimilar capacity in which they were employed by Seller immediately prior to theClosing Date, (B) at the same or a substantially similar cash salary andcash bonus level paid or payable to such Hired Personnel as was paid or payableimmediately prior to the Closing Date, (C) providing each such Person whois a Hired Personnel not covered by a Labor Contract and their eligibledependents, comparable employee benefits as are currently available tosimilarly situated employees of Buyer or each such Person who is a HiredPersonnel covered by a Labor Contract and their eligible dependents suchbenefits and other terms and conditions required by any Labor Contracts, (D) consistentwith the terms of Buyer’s benefit plans, Buyer will provide each such HiredPersonnel full service credit (equal at least to the level existing immediatelyprior to the Closing Date) for vesting, eligibility and severance purposes (butnot for purposes of benefit accruals under any defined benefit plans of Buyer)under any employee benefit or severance plan in force as of the Closing foremployees of Buyer (“*Buyer Employee Plans*”)and Buyer shall amend (including by board resolution) the terms of the Buyer’sEmployee Plans to reflect this service credit, (E) providing that withrespect to any medical, dental or other welfare benefits that are provided atany time under Buyer Employee Plans, any applicable pre-existing conditionexclusions (to the extent satisfied under the comparable Employee Planimmediately prior to the Closing Date) be waived, and any expenses incurredbefore such time under the comparable Employee Plan be taken into account undersuch Buyer Employee Plan for purposes of satisfying applicable deductible,coinsurance and 

 

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maximum out-of-pocket provisions, and (F) providing paid vacationin an amount equivalent to each such Hired Personnel’s accrued and unusedvacation with Seller at Closing except that, with respect to the HiredPersonnel whose vacation pay becomes payable under Applicable Law by Seller asa consequence of the Acquisition, Buyer will pay to Seller, in addition to thePurchase Price, the amount of vacation pay paid by Seller to such Persons (the “*Vacation Reimbursement*”), provided that the total amount ofthe Vacation Reimbursement and accrued and unused vacation liability assumed byBuyer under this Agreement shall not exceed $300,000.00.  Buyer shall provide to each Hired Personnelwho receives vacation pay from Seller under clause (F) of the priorsentence unpaid vacation time in an amount equivalent to such Hired Personnel’saccrued vacation with Seller as of the Closing.

 

(b)           Buyeragrees that it shall enter into a participation or similar arrangement witheach Assumed Multiemployer Plan and union to the extent each such AssumedMultiemployer Plan requires such an arrangement in order for the Buyer to makethe contributions necessary to comply with the requirements of ERISA Section 4204.

 

(c)           Asof the Closing Date, Buyer and its ERISA Affiliates shall be responsible forany legally mandated continuation of health care coverage under federal orstate law for all qualified beneficiaries associated with any Hired Personnel(including their dependents) who have or have had a loss of health carecoverage due to a qualifying event (as defined in Section 4980B of theCode and Part 6 of Title 1 of ERISA (“*COBRA*”), orunder any Applicable Law) that occurs on or after the Closing Date.

 

(d)           TheBuyer shall be solely responsible for as of the Closing Date all contributionobligations (including any charges, increases or adjustments required underApplicable Law or otherwise, or pursuant to any funding plan in relationthereto) due after the Closing Date with respect to the coverage of employeesof the DSD Business under the Multiemployer Plans of the Seller and its ERISAAffiliates (individually, an “*Assumed Multiemployer Plan*”and collectively, the “*Assumed MultiemployerPlans*”).  In addition, thefollowing provisions shall apply with respect to any Assumed Multiemployer Plansubject to Title IV of ERISA, so that the sale of the Purchased Assets shall becovered under Section 4204 of ERISA and shall not be deemed a complete orpartial withdrawal under Title IV of ERISA.

 

(i)            The Buyer shall make contributions(including any charges, increases or adjustments to contributions requiredunder Applicable Law or otherwise, or pursuant to any funding plan in relationthereto) to such Assumed Multiemployer Plans with respect to the DSD Businessfor substantially the same number of contribution base units for which theSeller and its ERISA Affiliates have an obligation to contribute with respectto the DSD Business immediately prior to the Closing Date.

 

(ii)           Buyer and the Seller Parties shallinform each such Assumed Multiemployer Plan in writing of their intention thatthe sale of assets hereunder be covered by Section 4204 of ERISA, and usetheir best efforts to demonstrate to the 

 

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satisfaction of each such Assumed Multiemployer Planthat no Buyer’s bond or escrow is required under Section 4204 of ERISA andthe regulations promulgated thereunder. In making such demonstration, neither Buyer nor the Seller, however,shall be required to disclose non-public information to the AssumedMultiemployer Plans.  If after reasonableefforts Buyer and the Seller are unable to so demonstrate to the satisfactionof such Assumed Multiemployer Plan, for a period of five plan years commencingwith the first plan year beginning after the Closing Date, the Buyer, at itsexpense, shall provide to such Assumed Multiemployer Plan a bond issued by acorporate surety company that is an acceptable surety for purposes of ERISA Section 412,or an amount held in escrow by a bank or similar financial institutionsatisfactory to such Assumed Multiemployer Plan, in an amount equal to thegreater of:

 

(A)          the average annual contributionrequired to be made by the Seller and its ERISA Affiliates with respect to theoperations of the DSD Business under such Assumed Multiemployer Plan for thethree plan years preceding the plan year in which the Closing Date occurs, or

 

(B)           the annual contribution that the Sellerand its ERISA Affiliates were required to make with respect to the operationsof the DSD Business under such Assumed Multiemployer Plan for the last planyear before the plan year in which the Closing Date occurs.

 

The bond or escrow shall be paid to such AssumedMultiemployer Plan if the Buyer withdraws from such plan, or fails to make acontribution to such plan when due, at any time during the first five planyears beginning after the Closing Date.

 

(iii)          If, during the first five (5) planyears beginning after the Closing Date, the Buyer withdraws in a completewithdrawal, or in partial withdrawal with respect to the operations of the DSDBusiness covered by any such Assumed Multiemployer Plan, the Seller and itsERISA Affiliates (determined following the Closing) shall be secondarily liablefor any withdrawal liability they would have had to such Assumed MultiemployerPlan with respect to such operations (but for ERISA Section 4204) if theLiability of the Buyer with respect to such Assumed Multiemployer Plan is notpaid; provided, however, that this subsection (iii) shall be of no forceand effect if Buyer and/or the Seller demonstrate to the satisfaction of suchAssumed Multiemployer Plan that no Buyer’s bond or escrow is required under Section 4204of ERISA.  In lieu of incurring suchsecondary Liability the Seller shall have the right in its discretion to payany such withdrawal liability of Buyer or its ERISA Affiliates in the event itdeems it in its best interests to do so. Buyer shall indemnify Seller for any Liability incurred by Seller onaccount of any withdrawal liability or any secondary Liability of Buyer arisingfrom or in connection with Buyer’s complete or partial withdrawal from anAssumed Multiemployer Plan.

 

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6.3.          Access to Information.

 

(a)           Betweenthe date of this Agreement and the Closing Date, upon reasonable notice and atreasonable times, Seller will give Buyer and its Representatives access topersonnel, facilities and books and records of the Seller Parties to the extentrelating to the DSD Business and will permit Buyer to make copies thereof andwill cooperate with regard to such inspections as it may reasonably request andwill furnish Buyer such financial and operating data and other information tothe extent relating to the DSD Business, the Purchased Assets and AssumedLiabilities which Buyer may from time to time reasonably request.  All access hereunder shall be afforded duringnormal business hours, and Buyer and its Representatives shall conduct anyreview and inspection in such a manner so that the DSD Business’s normalbusiness activities shall not be unduly or unnecessarily disrupted.  The foregoing notwithstanding, without firstobtaining the prior approval of Seller, neither Buyer nor any of itsRepresentatives shall tour or visit the DSD Business Facilities or contact anyof its employees, customers or suppliers, it being understood that any customercontacts by Buyer or any of its Representatives shall, if approved by Seller,include a Representative of Seller. Buyer acknowledges and agrees that Buyer and its Representatives shallnot be afforded access to any employee records or other records or informationthe disclosure of which would be prohibited by any Applicable Law.  Buyer shall conduct all such inspections,testing and other information gathering described in this Section 6.3(a):  (i) at Buyer’s sole cost and expense,and (ii) with a standard of care that would be utilized by a reasonableand prudent person and that Buyer utilizes in the ordinary course ofbusiness.  Buyer shall not conduct anyenvironmental testing at the Transferred Facilities following execution of thisAgreement.

 

(b)           Anyand all information gathered by Buyer as a result of, or in connection with,the information gathering described in Section 6.3(a) orconducted prior to the execution of this Agreement shall be kept strictlyconfidential and shall not be revealed to, or discussed with, any person otherthan the Representatives of Buyer who agree to comply with the ConfidentialityAgreement and the provisions of this Section 6.3(b), except that asof the Closing Date, Buyer and its Representatives shall cease to have any suchconfidentiality obligation.  In the eventthe Closing is not consummated, such information shall be returned to theSeller or destroyed in accordance with this Agreement and the ConfidentialityAgreement.

 

6.4.          HistoricalFinancial Statements.

 

(a)           Priorto the Closing, Seller shall cause the preparation of and deliver to Buyer thefinancial statements identified on Exhibit P (the “*Historical Financial Statements*”).

 

(b)           Subjectto subparagraph (c) below, Buyer shall reimburse Seller for fiftypercent (50%) of the out-of-pocket costs incurred by Seller in preparing theHistorical Financial Statements, including the out-of-pocket costs incurred inpreparing a valuation report reflecting the value of the BrewEquipment Inventory at DSD Customer locations as of the Closing Date (the“*Accounting Costs*”), regardless of whetherthe Acquisition is consummated; *provided*, 

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* *

*however*, (i) if the failureto consummate the Acquisition is due to the breach of any of the provisions ofthis Agreement by any Seller Party, but only to the extent that the act(s) oromission(s) resulting in such breach were in the control of such SellerParty, Buyer shall not have any obligation to reimburse Seller for any portionof the Accounting Costs, and (ii) if the failure to consummate the Acquisitionis due to the breach of any of the provisions of the Purchase Agreement byBuyer, but only to the extent that the act(s) or omission(s) resultingin such breach were in the control of Buyer, Buyer shall reimburse Seller forone hundred percent (100%) of the Accounting Costs.  Buyer shall reimburse Seller for Buyer’sportion of the Accounting Costs due under this Section 6.4(b) onthe date that is the earlier of (y) the Closing, or (z) the date thatis five (5) days following the termination of this Agreement under Article IX.  In the event that Seller pays or incurs anyAccounting Costs after the date that is the earlier of (y) or (z) ofthe previous sentence, Buyer shall reimburse Seller for its portion of suchAccounting Costs due to Seller under this Section 6.4(b) withinfive (5) days of Buyer’s receipt of any invoice for such Accounting Costs,it being understood and agreed, however, that following the date that is theearlier of (y) or (z) Seller shall not incur any additionalAccounting Costs other than pursuant to paragraph (e) below.

 

(c)           The partiesshall cooperate with one another and cause their respective accounting firms tocooperate with one another toward the objective of reducing the AccountingCosts, including Buyer’s submission to the SEC, as soon as reasonablypracticable a waiver request seeking authorization to use abbreviated financialstatements (which are more closely aligned with the transaction set forthherein).  Buyer shall be entitled to acredit for fifty percent (50%) of the expenses incurred by Buyer arising fromthe preparation of the waiver request (“*Waiver Request Costs*”),including attorneys’ fees and the costs of its appraiser, against Buyer’s shareof the Accounting Costs; *provided*, *however*, if Buyer is not obligated to reimburse Seller forany portion of the Accounting Costs because of a failure to consummate theAcquisition described in Section 6.4(b), then Seller shallreimburse Buyer for one hundred percent (100%) of the Waiver Request Costswithin five (5) days of Seller’s receipt of an invoice for such WaiverRequest Costs;  provided further, if theAcquisition is not consummated due to a breach by Buyer of any of theprovisions of this Agreement, but only to the extent that the act(s) oromission(s) resulting in such breach were in the control of the Buyer,then Buyer shall receive no credit against the Accounting Costs under this Section 6.4(c) withrespect to the Waiver Request Costs.

 

(d)           If before Closing the SEC requires historical financialstatements of the DSD Business other than those set forth in Exhibit P,Seller shall use commercially reasonable efforts to cause the preparation ofsuch statements, provided that the out of pocket costs incurred to prepare anysuch additional statements shall be shared equally between Seller and Buyer *provided further*, *however*, (i) ifthe failure to consummate the Acquisition is due to the breach of any of theprovisions of this Agreement by any Seller Party, but only to the extent thatthe act(s) or omission(s) resulting in such breach were in thecontrol of such Seller Party, Buyer shall not have any obligation to reimburseSeller for any portion of such out of pocket costs, and (ii) if thefailure to consummate the Acquisition is due to the breach of any of theprovisions of this Agreement by Buyer, but only to the extent that the act(s) oromission(s) resulting in such breach 

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were in the control of Buyer, Buyer shallreimburse Seller for one hundred percent (100%) of such out of pocket costs.

 

(e)           If afterClosing the SEC requires historical financial statements of the DSD Businessother than those provided pursuant to this Section 6.4 beforeClosing, Seller shall use commercially reasonable efforts to cause the preparationof such statements, *provided* thatthe out of pocket costs incurred to prepare any such additional statementsshall be shared equally between Seller and Buyer.

 

6.5.          PublicAnnouncements.  None of the partiesto this Agreement shall issue or make, before or after Closing, any pressrelease or other public statements or otherwise announce the transactionsdescribed herein to employees, customers or suppliers except and unless suchrelease, statement or announcement has been approved by both Seller and Buyer(which approval shall not be unreasonably withheld or delayed), except as maybe required by Applicable Law including applicable stock exchange or NASDAQregulations, provided in such cases the parties shall cooperate in making suchannouncement, including giving the other party a good faith opportunity toreview and comment on such announcement.

 

6.6.          Supplementsto Schedules.

 

(a)           Fromthe date hereof to the Closing Date, Seller may supplement or amend theSchedules delivered in connection herewith with respect to any matter which, ifexisting, occurring or known at the date of this Agreement, would have beenrequired to be set forth or described in any such Schedule or which isnecessary to correct any information in any such Schedule which has been renderedinaccurate thereby, whether or not such matter is material (“*Changes*”). No such Changes will be considered or taken into account for the purposeof determining satisfaction of the conditions set forth in Section 7.1(a) hereofor the compliance by the Seller Parties with the covenant set forth in Section 6.1hereof; *provided*, *however*, that by consummating thetransactions contemplated hereby, Buyer waives any right or claim it may haveor have had on account of or relating to such failure to satisfy conditions orcomply with covenants or on account of or relating to any such breach ofrepresentation or warranty of any Seller Party. Notwithstanding the previous sentence, if a Change constitutes aPermitted Stipulated Update, then the Permitted Stipulated Update shall beconsidered for purposes of determining satisfaction of the conditions set forthin Section 7.1(a) hereof or the compliance by any Seller Partywith the covenant set forth in Section 6.1 and Buyer shall berequired to consummate the transactions contemplated hereby subject tosatisfaction of the other conditions set forth in Section 7.1.  The term “*PermittedStipulated Update*” means Changes relating to matters occurring afterthe execution of this Agreement (and which did not exist on the date hereof),which do not have a Material Adverse Effect, and which do not arise from abreach of any covenant in this Agreement, and which (A) relate to mattersarising in the ordinary course of business which give rise to neither acasualty nor a third party claim against either Seller Party, (B) reflectmodifications (whether due to casualty or otherwise) to the Service Trucksand/or Route Trucks but do not decrease the number of such types of Vehiclesbeing transferred to 

 

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Buyer below the number set forth in Section 6.6(b), or (C) arenot described in clauses (A) or (B) above and are necessary tocorrect any representation or warranty made by Seller in this Agreement,including the Schedules hereto, which has been rendered inaccurate thereby andwhich, individually or in the aggregate, do not result in Losses to which Buyeris entitled to indemnity pursuant to Section 8.2 in excess of onepercent (1)% of the Purchase Price (without regard to the Basket orMini-Basket) (the Changes referred to in this clause (C) beingcollectively called “*Unanticipated Changes*”).  If Seller makes a Permitted Stipulated Updateto reflect an Unanticipated Change, Buyer shall retain its right to seekindemnification pursuant to Section 8.2 following the Closing Datewith respect to such Unanticipated Change regardless of any other provision ofthis Section 6.6(a), and to the extent that such indemnification pertainsto a casualty at the Houston Plant or the Oklahoma City Plant which involvesLosses of one percent (1%) of the Purchase Price or less, Buyer’s right toindemnification on account of such Permitted Stipulated Update or on account ofa breach of Section 4.10(b) if there has been no PermittedStipulated Update shall not be subject to the Basket or Mini-Basket.

 

(b)           Notwithstandinganything in this Agreement to the contrary, at the Closing, Seller shallconvey, or assign its leasehold interest, as applicable, to Buyer not less than220 Route Trucks and 81 Service Trucks.

 

6.7.          Mixed Use Contracts.

 

(a)           AtClosing, Seller shall provide to Buyer the benefits under, or assign to Buyerits rights under, or obtain a separate contract to be included in the PurchasedContracts for, the portion of the non-customer Mixed Use Contracts relatingexclusively to the DSD Business, as set forth on Schedule 6.7, and Buyershall assume the Liabilities of Seller with respect to such portions of suchMixed Use Contracts.  To the extent thata third party’s consent is required to assign any portion of a non-customerMixed Use Contract which is to be assigned and assumed pursuant to Schedule6.7, Seller will use commercially reasonable efforts (which shall notinclude the expenditure of any money to any third party in exchange for suchconsent) to obtain such consent.  If sucha required consent is not obtained, then subject to Section 1.2,Seller shall provide Buyer the benefits and Buyer shall assume the****Liabilities, in each case relating exclusively to theportions of each such Mixed Use Contract pertaining to the DSD Business.  In no event shall Seller be required toprovide Buyer the benefits of (i) any non-customer Mixed Use Contract atany time after the date that is two (2) years after the Closing Date, or (ii) anyMixed Use Contracts relating to the purchase by Seller of green coffee, tea,Liquid Coffee concentrate, cocoa and cappuccino products, Machines and SpareParts, and Contracts relating to software and information technology servicesor products; provided however, that the foregoing shall not limit the rights ofthe Buyer under any of the Operational Agreements.

 

(b)           Withrespect to each Mixed Use Contract which relates to sales to a Shared Customerpursuant to both the DSD Business and the NSO Business, the parties agree that promptlyfollowing the Closing, Seller shall introduce Buyer to each such customer andthe parties shall work together to obtain separate contracts with each suchcustomer as soon as 

 

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practicable (but neither party shall have any obligation to spend anymoney to obtain the customer’s consent to the foregoing).  During the period that the parties seek toseparate such Mixed Use Contracts, Buyer shall have the right to operate underthe portion of each such Contract to the extent related exclusively to sales ofthe DSD Business provided that Buyer assumes the Liabilities relatedthereto.  Notwithstanding the foregoing,nothing shall prohibit either party from competing with the other for sales tosuch Shared Customers, it being understood that Buyer shall have the right toseek to preserve and increase DSD Business sales to each such Shared Customerand Seller shall have the right to preserve and increase NSO Business sales toeach such Shared Customer.

 

6.8.          Release of Certain Obligations.  Following the Closing, in the event thatSeller’s rights under any Contract or Real Property Lease are assigned toBuyer, Buyer shall request a release of Seller’s obligations (whether absolute,contingent or otherwise) under such Contract or Real Property Lease (the “*Release*”). Seller and Buyer agree that this Section 6.8 shall notobligate Buyer to take any action other than to request a Release.

 

6.9.          Access to Records; Facilities.

 

(a)           Sellershall be entitled, for any lawful purpose, until the sixth (6th) anniversary ofthe filing of its U.S. Tax return for the year in which the Closing occurs,upon reasonable notice and during the regular business hours of Buyer, to haveaccess to and to make copies of all financial information and Tax records ofthe DSD Business which relate to periods prior to the Closing.  Subject to Section 6.12, Buyershall retain such records for the period following the Closing described above,after which time Buyer may destroy or otherwise dispose of such businessrecords without Seller’s consent.

 

(b)           Duringthe one (1) year period following the Closing, in the event that Buyerneeds Information related to the operation of the DSD Business that is not partof the Purchased Assets, Seller shall use its commercially reasonable effortsto provide to Buyer copies of such Information which is not part of the Booksand Records due to the provisions of clauses (C) or (D) of Section 1.1(j) promptlyafter Buyer’s reasonable request therefor; *provided*, *however*, that Seller shall have no obligation to provideBuyer with information which Seller reasonably deems to be competitive with theNSO Business or any information regarding Mixed Use Contracts with respect towhich Buyer is not assuming Liabilities under this Agreement.

 

(c)           Sellerand its agents shall have access, upon reasonable advance notice and duringbusiness hours, (i) to the Transferred Facilities for one hundred twenty(120) days following the Closing Date for purposes of removing from such premisesall property which does not constitute Purchased Assets and Buyer shallcooperate reasonably with Seller to accomplish such removal; and (ii) tothe Books and Records and to Buyer’s employees as reasonably required by Sellerto prepare its financial statements and satisfy other financial reportingobligations.

 

6.10.        Buyer’s Insurance.  For a period ending no sooner than the fifth(5th) anniversary of the Closing Date, Buyer agrees to carry and maintain infull force and effect general liability 

 

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(including productsliability) insurance covering the DSD Business with an insurance company havinga rating by A.M. Best and Company of at least A- with annual limits of notless than Five Million Dollars ($5,000,000.00) per occurrence and Five MillionDollars ($5,000,000.00) in the annual aggregate, provided all or part of Buyer’sinsurance may be carried under a blanket policy or by means of a so-called “Umbrella”policy, which insurance shall name the Seller Parties as additional insuredsand which shall provide Seller with at least thirty (30) days’ prior writtennotice of any termination or non-renewal thereof, and may have such deductiblesas applies to Buyer’s general liability insurance generally.

 

6.11.        Confidentiality Agreement.

 

(a)           Buyershall remain obligated under the provisions of that certain ConfidentialityAgreement, dated March 26, 2008 (the “*ConfidentialityAgreement*”), between Buyer and Seller, the terms of which areincorporated herein by reference; provided, however, that the obligationscontained in this Section 6.11(a) shall terminate at theClosing.

 

(b)           Followingthe Closing, Seller agrees to treat and hold confidentially, in the same manneras Seller treats and holds its own confidential information, and refrain fromusing any Information which Seller, in operating the DSD Business, treated andmaintained as confidential; *provided*, *however*, that Seller’s obligation under this Section 6.11(b) shallnot apply to the extent that such confidential Information pertains to Seller’sNSO Business or is or becomes part of the public domain through no breach ofthis Agreement by Seller or its Affiliates. Nothing in this Section 6.11(b) shall restrict or limitSeller or any of its direct or indirect wholly-owned subsidiaries fromsoliciting customers or competing with Buyer (including by means of the use ofcustomer lists, pricing, preferences and purchase patterns of the DSD Businessor the use of the Trademarks and Trade Names licensed to Seller under the BuyerTrademark License Agreement and the Superior Trademark License Agreement)except as provided in Section 6.18, and Buyer shall not assert anyclaim against Seller or any of its direct or indirect wholly-owned subsidiarieson account of Seller’s or any of its wholly owned subsidiaries’ use of suchcustomer lists, pricing, preferences and purchase patterns or such Trademarksand Trade Names in connection with Seller’s (or any of its direct or indirectwholly-owned subsidiaries’) solicitation of customers and competition withBuyer.  Further, Seller shall not remainobligated under this Section 6.11(b) to the extent anyInformation is disclosed in connection with litigation between the parties oris required to be disclosed pursuant to Applicable Law; provided, that Sellershall provide Buyer with prompt notice of the need to disclose Informationpursuant to Applicable Law so that Buyer may seek a protective order or otherappropriate remedy.  In the event thatsuch protective order or other remedy is not obtained, Seller shall furnishonly that portion of the Information which is legally required and shallexercise its commercially reasonable efforts to obtain confidential treatmentof the Information.

 

(c)           The parties shalltreat confidentially, and shall not disclose to any person or entity, otherthan their respective employees and representatives who are informed of, andagree to maintain the confidentiality required by, this Section 6.11(c),the Confidential Operating

 

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Agreement Terms.  “*Confidential Operating Agreement Terms*”**shall mean the pricing, length of termand other provisions of the Operating Agreement which Buyer and Seller mutuallyidentify as requiring confidential treatment in order to protect the competitiveinterests of one or both of them.  In theevent of litigation between the parties, or any requirement of disclosure underApplicable Law, including Buyer’s filing of Operating Agreements with theSecurities and Exchange Commission or other applicable regulatory body, theparties shall seek to redact from any public filing and obtain confidentialtreatment of all Confidential Operating Agreement Terms; provided, however,that if either party is required to disclose Confidential Operating AgreementTerms pursuant to Applicable Law, such party shall seek to obtain a protectiveorder (and in the case of securities law compliance and filings, seekconfidential treatment) and shall provide the other party with prompt writtennotice of the need to disclose so that the other party may also seek aprotective order or other appropriate remedy, or comment upon anyconfidentiality request.  In the eventthat such protective order, other remedy or request is not obtained, the disclosingparty shall furnish only that portion of the Confidential Operating AgreementTerms which it is legally required to disclose and shall exercise itscommercially reasonable effort to obtain confidential treatment of the balanceof such Terms.  Without limiting thegenerality of the foregoing, to the extent that Buyer concludes, afterconsultation with securities counsel, that any of the Operating Agreements isrequired to be filed with the SEC under applicable law, Buyer will(i) prepare a confidential treatment request letter and redacted form ofagreement (that does not include any Confidential Operating Agreement Terms) inaccordance with SEC rules and regulations, (ii) provide Seller a copyof such drafts for its review and comment not less than five business days inadvance of the intended filing date, (iii) give due consideration to andmake commercially reasonable efforts to implement all reasonable comments ofSeller, and (iv) keep Seller apprised of status of such submission andpromptly furnish Seller with any SEC comments provided to Buyer with respectthereto and promptly furnish Seller with copies of all correspondence to andfrom any regulatory authority with respect thereto.

 

6.12.        TaxMatters.  Seller and Buyer shall(i) each provide the other with such assistance as may reasonably berequested by any of them in connection with the preparation of any return,audit, or other examination by any Taxing Authority or judicial oradministrative proceedings relating to Liability for Taxes, (ii) eachretain and provide the other with any records or other information that may berelevant to such return, audit or examination, proceeding or determination, and(iii) each provide the other with any final determination of any suchaudit or examination, proceeding, or determination that affects any amountrequired to be shown on any Tax return of the other for any period.  Without limiting the generality of theforegoing, Buyer and Seller shall each retain, until the applicable statutes oflimitations (including any extensions) have expired, copies of all Tax returns,supporting work schedules, and other records or information that may berelevant to such returns for all Tax periods or portions thereof ending on orbefore the Closing Date.

 

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6.13.        Use of Names.

 

(a)           Otherthan the DSD Business Marks, the Seller Parties are not conveying ownershiprights or, except as expressly provided in the Operational Agreements, grantingBuyer a license to use any of the Trademarks of Seller or any Affiliate ofSeller, including the Trademarks or Trade Names “Sara Lee,” “Pickwick,”“Paradise,” “Douwe Egberts,” “Kayo,” “Maryland Club,” “Laurentis,” “Butternut,”“Java Coast,” “La Touraine” or any mark or name that is similar in sound orappearance to the “Sara Lee” mark or name or any other marks or names mentionedabove (collectively, the “*Retained Names andMarks*”) and, after the Closing, Buyer shall not, and shall notpermit any of its Affiliates to, use in any manner the Retained Names and Marksor any mark confusingly similar to the Retained Names and Marks, except asprovided in the Operational Agreements and this Section 6.13.  In the event Buyer or any Affiliate of Buyerviolates any of its obligations under this Section 6.13 (and doesnot limit its use of the Retained Names and Marks as provided pursuant to anyof the Operational Agreements), Seller and its Affiliates may proceed againstit in law or in equity for such damages or other relief as a court may deemappropriate.  Buyer acknowledges that aviolation of this Section 6.13 may cause Seller and its Affiliatesirreparable harm which may not be adequately compensated for by moneydamages.  Buyer therefore agrees that inthe event of any actual or threatened violation of this Section 6.13,Seller and each of its Affiliates shall be entitled, in addition to otherremedies that they may have, to a temporary restraining order and topreliminary and final injunctive relief against Buyer or such Affiliate ofBuyer to prevent any violations of this Section 6.13.

 

(b)           Exceptas expressly provided in the Operational Agreements, Buyer shall, and shallcause each of its Affiliates to, cease promptly, but in no event later than one(1) year after the Closing Date, using any (i) existing advertisingor promotional materials, including brochures, catalogs, websites and othersimilar items, and (ii) existing stationery, business cards, businessforms, packaging and other similar items, in each case that contain anywherethereon any of the Retained Names and Marks; *provided*,*however*, that Buyer shall, whenusing items referred to in clause (ii) in the context of entering into orconducting contractual relationships, make reasonably clear to all otherapplicable parties that Buyer or such Affiliate of Buyer, rather than Seller orany Affiliate of Seller, is the party entering into or conducting thecontractual relationship; and *provided*,*further*, that Buyer shall ensurethat personnel of the DSD Business using such items shall not, and shall haveno authority to, hold themselves out as officers, employees or agents of Selleror any Affiliate of Seller.

 

(c)           Buyershall have the right to exhaust all existing inventories of finished productsand existing work in progress that contain as part of the physical productsthemselves any of the Retained Names and Marks, *provided* that Buyer shall use its reasonable efforts todispose of such finished products within a reasonable period not to exceed six(6) months after the Closing Date.

 

6.14.        Negative Covenant.  Upon execution of this Agreement, the SellerParties shall, and shall cause each of their respective Affiliates andRepresentatives (including, without limitation, investment bankers, attorneysand accountants) to, immediately discontinue any 

 

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negotiations ordiscussions with any Person (other than Buyer) relating to any businesscombination transaction involving the DSD Business Realty, or the PurchasedAssets (regardless of form) other than the sale of control of Seller or thesale of inventory in the ordinary course of the DSD Business.  The Seller Parties shall not, and shall causetheir Affiliates and Representatives not to, at any time after the execution ofthis Agreement and until the earlier of the Closing Date or the termination ofthis Agreement pursuant to Section 9.1, take any action to:  (a) solicit, encourage, initiate orfacilitate the making of any Acquisition Proposal; (b) enter into anagreement with respect to any Acquisition Proposal; (c) participate indiscussions or negotiations with, (d) respond to any inquiries orproposals by, (e) distribute any information about the DSD Business to, or(f) otherwise cooperate in any other way with any third party with respectto, or in connection with, any Acquisition Proposal.  An “*AcquisitionProposal*” means any inquiry, proposal or offer from any third partyrelating to any direct or indirect acquisition or purchase of Realty or all orsubstantially all of the assets of the DSD Business other than Inventory in theordinary course of the DSD Business.

 

6.15.        IT Carve Out.  Prior to the Closing, Seller shall carve out,in form reasonably satisfactory to Buyer and Seller, all data and systemsrelated to the DSD Business to enable them to run separately as of the Closing(the “*IT Carve Out*”).  The IT Carve Out shall include a number ofkey reports (e.g., those related to Route and customer optimization models) tobe agreed upon by the parties.  Buyeragrees that regardless of whether the Acquisition is consummated, Buyer shallreimburse Seller for all reasonable costs that Seller or any of Seller’sAffiliates incur in performing the IT Carve Out as set forth in this Section 6.15(the “*IT Carve Out Costs*”); *provided*, however, if the failure toconsummate the Acquisition is due to the breach of any of the provisions ofthis Agreement by any Seller Party, but only to the extent that theact(s) or omission(s) resulting in such breach were in the control ofsuch Seller Party, Buyer shall have no obligation to reimburse Seller for anyportion of the IT Carve Out Costs.  It isexpressly understood and agreed that Seller may engage third-party contractorsto perform the IT Carve Out and that the costs of such contractors shall beincluded as part of the IT Carve Out Costs. Following the Closing, Buyer shall have the right to utilize the ITCarve Out pursuant to the terms of the Seller Transition Services Agreement butshall not acquire any ownership or other rights with respect thereto except tothe extent included in the Purchased Assets hereunder.  Buyer shall reimburse Seller for the IT CarveOut Costs on the date that is the earlier of (y) the Closing, or(z) the date that is five (5) days following the termination of thisAgreement under Article IX.

 

6.16.        Brew Equipment Service; DSD Referral.  The Seller Parties and Buyer shall usecommercially reasonable efforts to cooperate with each other following theClosing such that any brew and liquid coffee equipment at the locations ofShared Customers are serviced by Buyer in the case of brew and liquid coffeeequipment included in the Purchased Assets and by Seller in the case of allother brew and liquid coffee equipment at the locations of Shared Customers; *provided*, *however*,that Seller will not be required to provide Buyer with any benefits or use ofSeller’s computer equipment system which track service of brew equipment.  For the six (6) month period followingthe Closing, the Seller Parties shall use commercially reasonable efforts 

 

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to refer all customerinquiries that relate to DSD Business, other than inquiries relating to thefunctions of the DSD Business retained by the Seller Parties (e.g., accountsreceivables and payables), to Buyer.

 

6.17.        Shared Customers.  Seller shall use commercially reasonableefforts to introduce Buyer to the Shared Customers and assist in the transitionof the DSD Business accounts of such Shared Customers to Buyer prior toClosing; *provided* that nothing inthis Agreement shall restrict Seller’s ability to compete for any SharedCustomers or any other customers following the Closing, except to the extent ofthe restrictions set forth in Section 6.18.

 

6.18.        Limited Non-Competition.  For a period of three (3) years from andafter the Closing Date, neither Seller nor any Affiliate of Seller shall, inthe Prohibited Areas, directly or indirectly, either alone or as a stockholder,partner, consultant, owner, agent, creditor (other than a trade creditor in theordinary course of business consistent with past practices), coventurer of anyother Person, or in any other capacity own, manage, operate, join, engage,control or participate in the ownership, management, operation or control of,in connection with, any profit or non-profit business or organization engagedin the business utilizing a network of facilities and vehicles to delivercoffees and teas directly to customer locations where such products areconsumed (the “*Prohibited Business*”);*provided*, *however*, nothing in this Section 6.18shall restrict Seller or any Affiliate of Seller from engaging in the NSOBusiness so long as the NSO Business is not conducted through the foregoingmethod of distribution or from acquiring a Prohibited Business as part of alarger transaction where such Prohibited Business represents sales of tenpercent (10%) or less for the most recently completed fiscal year of thebusiness being acquired by Seller or such Affiliate in such acquisition.  The term “*ProhibitedArea*” shall mean the Las Vegas, Nevada, and Atlantic City, NewJersey, metropolitan statistical areas. Seller acknowledges that a breach of the covenants contained in this Section 6.18may cause irreparable damage to Buyer, the exact amount of which may bedifficult to ascertain, and that the remedies at law for such breach may beinadequate.  Accordingly, Seller agreesthat if Seller breaches the covenant contained in this Section 6.18,in addition to any other remedy which may be available at law or in equity,Buyer shall be entitled to seek specific performance and injunctive relief.

 

6.19.        Nonsolicitation of Certain Employees.  For a period beginning on the Closing Dateand ending on the second anniversary of the Closing Date,

 

(a)           neitherthe Seller Parties nor any Affiliate of any Seller Party shall solicit foremployment or hire any Hired Personnel without the prior written consent ofBuyer; *provided* that SellerParties and their Affiliates shall not be prohibited from employing any suchPerson who contacts the Seller Parties or their Affiliates in response to anygeneral solicitation or advertising not directed at any such employee or groupof employees.  Each Seller Partyacknowledges that a breach of the covenants contained in this Section 6.19(a) maycause irreparable damage to Buyer, the exact amount of which may be difficultto ascertain, and that the remedies at law for such breach may beinadequate.  Accordingly, each SellerParty agrees 

 

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that if such Seller Party breaches the covenant contained in this Section 6.19(a),in addition to any other remedy which may be available at law or in equity,Buyer shall be entitled to seek specific performance and injunctive relief; and

 

(b)           neitherBuyer nor any of its Affiliates shall solicit for employment or hire any Person(other than a Person listed on Schedule 4.20(b)) who is an employeeof Seller Parties or their Affiliates as of the Closing Date whom Buyer meetsor becomes aware of in connection with the Acquisition without the priorwritten consent of Seller; *provided*that Buyer and its Affiliates shall not be prohibited from employing any suchPerson who contacts Buyer or its Affiliates in response to any generalsolicitation or advertising not directed at any such employee or group ofemployees.  Buyer acknowledges that abreach of the covenants contained in this Section 6.19(b) maycause irreparable damage to the Seller Parties, the exact amount of which maybe difficult to ascertain, and that the remedies at law for such breach may beinadequate.  Accordingly, Buyer agreesthat if Buyer breaches the covenant contained in this Section 6.19(b),in addition to any other remedy which may be available at law or in equity, theSeller Parties shall be entitled to seek specific performance and injunctiverelief.

 

6.20.        Accounts Receivable.  Concurrent with the Closing, the parties areentering into the Seller Transition Services Agreement pursuant to which Sellerwill provide cash collection services to Buyer. Accordingly, the following terms of this Section 6.20 shallbe subject to the Seller Transition Services Agreement notwithstanding anyprovision below to the contrary:

 

(a)           Giventhat Seller is retaining all accounts receivable arising from transactions ofthe DSD Business on or prior to the Closing Date (“*Seller Receivables*”) the parties agree to cooperate with oneanother in the collection of Seller Receivables on the terms set forth in this Section 6.20.  All collections from DSD Customers receivedby either Seller or Buyer from the Closing Date forward shall be applied to theoldest receivable first unless otherwise specified in writing by such customer(and then only if such customer has not been induced by Buyer to make suchspecification) or unless such older receivable is under dispute by the DSD Customer.  In addition, the parties agree that(a) Seller shall provide to Buyer on or promptly following the Closing alist of all Seller Receivables existing as of the Closing Date (“*DSD Collection Customers*”), which listshall set forth for each Seller Receivable the name of the debtor, the date ofthe invoice and the balance due, (b) the parties shall exchange with oneanother records of all payments received from the DSD Collection Customers,(c) for a period of 30 days after the Closing, Buyer shall instruct itsemployees to wire to Seller’s designated bank account (as set forth in writingby Seller, the “*Collection Account*”)all money received by them during said 30 day period from DSD CollectionCustomers and also shall instruct DSD Collection Customers to continue payingmoneys owed for DSD Product to Seller’s Collection Account for said 30 dayperiod; (d) commencing on the 31st day after the Closing, the partiesshall exchange with one another at least monthly the collections received bythem from DSD Collection Customers and true up payments that either party mayowe the other until the Seller Receivables are paid in full.  In the event that Seller receives money inSeller’s Collection Account from DSD 

 

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Collection Customers that is not associated with Seller Receivables orother amounts due Seller from such customers, Seller shall remit such monies toBuyer.

 

(b)           Buyer,as Seller’s agent for collection, agrees to use the same effort in the collectionof Seller Receivables as Buyer uses for its own accounts receivable (which mayinclude referral to a collection agency); provided, that (i) Buyer shallnot be required or permitted, without the prior written approval of Seller, tocommence litigation, employ legal counsel or make any other extraordinarycollection efforts, and (ii) Buyer’s obligation to act as Seller’s agentin the collection of the Seller Receivables under this Section 6.20shall terminate one hundred twenty (120) days after the Closing Date (the “*Collection Period*”).  During the Collection Period, neither Sellernor any of its Affiliates shall engage in any collection efforts against theDSD Collection Customers.  At the end ofthe Collection Period, Buyer shall return to Seller all files concerning thecollection or attempts to collect the Seller Receivables and Buyer’sresponsibility for the collection of the Seller Receivables shall cease; *provided*, Buyer shall promptly pay over toSellers any amounts received with respect to the Seller Receivables after theCollection Period, and Seller shall continue to be obligated to promptly payover to Buyer any amounts with respect to receivables arising from DSD Businesstransactions after the Closing Date.

 

6.21.        Removal of Brew Equipment Inventory.  Buyer shall cause the removal of all BrewEquipment Inventory acquired by Buyer and located at Seller’s Washington, PAFacility to be removed from said Facility within twenty (20) business daysafter the Closing.  Seller shall havesuch Brew Equipment Inventory segregated and identified as Buyer’s property asof the Closing Date.

 

6.22.        Return of Consumable Inventory.  If this Agreement is terminated prior toClosing for any reason whatsoever, Buyer shall, at its cost and expense, returnto Seller, at the Facility from which the Consumable Inventory was shipped bySeller, all Consumable Inventory transferred by Seller to any Buyer Site priorto the Closing (regardless of whether such Consumable Inventory was received byor is in transit to the Buyer Site prior to the Closing).  During the period of time prior to Closingthat any Consumable Inventory is in Buyer’s possession at a Buyer Site,(a) Buyer shall store and maintain such Consumable Inventory in the samecondition as such Consumable Inventory was in upon receipt by Buyer (it beingagreed that Buyer shall not use, consume, sell, move, manufacture or alter suchConsumable Inventory in any manner whatsoever prior to the Closing Date),(b) Buyer shall not own or have any right, title or interest in suchConsumable Inventory unless and until the consummation of the Acquisition,(c) Buyer shall designate all Consumable Inventory received by Seller asproperty of Seller and shall hold such property as a bailee, and (d) Buyershall consent to Seller or Seller’s designee(s) entering the BuyerSite(s) where such Consumable Inventory is stored to conduct the physicalcount of Consumable Inventory contemplated by Section 2.6(a) herein.

 

6.23.        Further Assurances.  Upon the terms and subject to the conditions containedherein, each of the parties hereto agrees (i) before the Closing, to useall reasonable efforts to 

 

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take, or cause to betaken, all actions and to do, or cause to be done, all things necessary, properor advisable to consummate and make effective the transactions contemplated bythis Agreement and the Additional Documents (including satisfaction, but notwaiver, of the Closing conditions set forth in Article VII below),(ii) after the Closing, to execute any documents, instruments orconveyances of any kind which may be necessary to carry out any of thetransactions contemplated hereunder or thereunder, and (iii) before andafter the Closing, to cooperate with each other in connection with the foregoing,including using reasonable efforts to effect all necessary registrations andfilings, including without limitation submissions of information requested byGovernmental Authorities. Notwithstanding the foregoing, except as set forth in Section 7.1(e),no Seller Party shall be required to obtain any waivers, consents or approvalsfrom other parties to the Purchased Contracts; or obtain any Permits (or anyconsents, waivers or approvals related thereto) that Buyer may require tooperate the DSD Business.  In addition tothe foregoing, not later than fifteen (15) days following the Closing Date,Buyer shall cause the Seller’s United States Department of Transportationnumber located on each of the Vehicles to be removed or concealed.  To the extent that Seller seeks to assert anywarranty Claim retained by Seller pursuant to Section 1.3 (u) with respectto a warranty that is part of the Purchased Assets, Buyer shall reasonablycooperate with Seller in the effort to recover such Claim.

 

6.24.        Buyer’s Pre-Closing Conduct.  During the period from the date of thisAgreement until the Closing, neither Buyer nor any of its Representatives shalltake any action to influence or induce Seller’s employees to encourage SharedCustomers to shift their purchases of coffee, tea and related products fromnon-DSD sources (such as Seller’s NSO Business) to purchases from the DSDBusiness.

 

6.25.        Labor Contracts.  With respect to the Labor Contracts listed onSchedule 1.1(g)-2, Buyer and Seller shall each use commercially reasonableefforts to obtain separate agreements with the unions who are parties theretopromptly following the Closing.

 

6.26.        Embodiments of DSD IntellectualProperty.  Following the Closing,Seller shall use commercially reasonable efforts to provide to Buyer alltangible embodiments of the DSD Intellectual Property identified by Seller inany materials relating solely to the DSD Business.  After the Closing, Seller Parties shall not,and shall not permit any of their Affiliates to, use in any manner the DSDIntellectual Property or any mark confusing similar to the DSD Business Marks,except as provided in the Operational Agreements.  In the event Seller Parties or any of theirAffiliates violate any of their obligations under this Section 6.26(and does not limit its use of the DSD Business Marks as provided pursuant toany of the Operational Agreements), Buyer and its Affiliates may proceedagainst it in law or in equity for such damages or other relief as a court maydeem appropriate.  Seller Parties acknowledgethat a violation of this Section 6.26 may cause Buyer and itsAffiliates irreparable harm which may not be adequately compensated for bymoney damages.  Seller Parties thereforeagree that in the event of any actual or threatened violation of this Section 6.26,Buyer and each of its Affiliates shall be entitled, in addition to otherremedies that they may have, to a temporary restraining order and to 

 

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preliminary and finalinjunctive relieve against Seller Parties or such Affiliate of Seller Partiesto prevent any violations of this Section 6.26.

 

6.27.        Authorized Information.  Buyer shall not induce or authorize anyPerson to divulge or use information which is confidential information of Sellerunless such information becomes part of the public domain through no act oromission by Buyer, its Affiliates or its employees, except that the foregoingshall not apply to Buyer’s right to obtain Authorized Information from theHired Personnel (who Seller agrees may disclose such Authorized Information toBuyer following the Closing) or to Buyer’s use of Authorized Information aspermitted in this Section 6.27. The term “*Authorized Information*”means the customer lists, pricing, preferences and purchase patterns ofSeller’s NSO Business.  Nothing in this Section 6.27shall restrict or limit Buyer or its direct or indirect wholly-ownedsubsidiaries from soliciting customers or competing with Seller (including bymeans of use of Authorized Information or the use of the Trademarks and TradeNames licensed to Buyer under the Seller Trademark License Agreement), andSeller shall not assert any claim against Buyer or any of its direct orindirect wholly-owned subsidiaries on account of Buyer’s (or any of its director indirect wholly-owned subsidiaries’) use of Authorized Information inconnection with Buyer’s (or any of its direct or indirect wholly-ownedsubsidiaries’) solicitation of customers and competition with Seller and theuse of Authorized Information; provided, however, that given Seller’sconfidentiality obligations to its NSO customers, Buyer, its Affiliates and itsemployees shall maintain the confidentiality of such AuthorizedInformation.  Further, Buyer shall notremain obligated under this Section 6.27 to the extent anyinformation is disclosed to the public in connection with litigation betweenthe parties or is required to be disclosed pursuant to Applicable Law;provided, that Buyer shall provide Seller with prompt notice of the need todisclose information pursuant to Applicable Law so that Seller may seek aprotective order or other appropriate remedy. In the event that such protective order or other remedy is not obtained,Buyer shall furnish only that portion of the information which is legallyrequired and shall exercise its commercially reasonable efforts to obtainconfidential treatment of the information. Seller shall retain the right to assert any claim against Buyer, itsAffiliates, and employees, including the Hired Personnel if any of thembreaches this Section 6.27.

 

6.28.        Buyer Financing.  Buyer agrees (i) prior to the Closing,to continue to diligently use its commercially reasonable efforts to obtainBank Financing from banks or other commercial lenders in an amount not less than$20,000,000, and (ii) to the extent that the Note is used to satisfy anyportion of the Purchase Price, to continue to diligently use its commerciallyreasonable efforts to obtain Bank Financing in an amount sufficient to satisfyall amounts owing to Seller under the Note and to use such financing to payoffall such amounts outstanding as quickly as practicable following the Closing.

 

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**ARTICLE VII.CONDITIONS TO CLOSING**

 

7.1.          Conditions to Obligations of Buyer.  All obligations of Buyer under this Agreementare subject to the fulfillment, at or prior to the Closing, of the followingconditions, any of which may be waived by Buyer, in its sole discretion:

 

(a)           Allrepresentations and warranties made by the Seller Parties in this Agreement, asamended to account for any Permitted Stipulated Updates, shall be true andcorrect in all material respects (other than those qualified by materialitywhich shall be true and correct in all respects) as of the date of thisAgreement and as of the Closing Date, as though made at and as of the ClosingDate, except to the extent that such representations and warranties speak as ofa specific date, without giving effect to any supplements or amendments to theSchedules made by any Seller Party after the date hereof through the ClosingDate, and the Seller Parties shall have delivered all documents and agreementsdescribed in Section 3.2 and the Seller Parties shall haveotherwise performed in all material respects all covenants, obligations andconditions required under this Agreement to be performed by it on or prior tothe Closing Date.

 

(b)           ThePurchased Assets shall be free and clear of all Liens, other than PermittedLiens.

 

(c)           Noaction, suit, or proceeding shall be pending before any Governmental Authorityor before any arbitrator wherein an unfavorable injunction, Judgment, decree,restraining order or other ruling or order is reasonably likely to besuccessful that would (i) prevent the consummation of any of thetransactions contemplated by this Agreement or the Additional Documents, (ii) causeany of the transactions contemplated by this Agreement or the AdditionalDocuments to be rescinded following consummation, or (iii) materially andadversely affect the right of Buyer to own the Purchased Assets and to operatethe DSD Business and to control Realty, and no such injunction, Judgment,decree, restraining order or other ruling or order shall be in effect.

 

(d)           Buyershall have received from Chicago Title Insurance Company (the “*Title Company*”) ALTA 2006 owner’s policiesor equivalent TLTA policies of title insurance (each, a “*Title Policy*”) in an amount for eachparcel of the Owned Real Property which shall be the amount that is equal tothe fair market value for the parcel based on Buyer’s valuation for the parcel,subject to the Title Company’s approval, insuring title to each such parcel inthe name of Buyer, subject only to the Permitted Encumbrances and AssumedLiabilities.

 

(e)           Buyershall have received all third-party (governmental and non-governmental)consents, permits and approvals listed on Schedule 7.1(e) (whichconsents or approvals shall also release Seller and its Affiliates from any obligationsthereunder).

 

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(f)            Theparties shall have entered into each of the Operational Agreements and theOption Agreement, and each of the manufacturers shall have duly executed anddelivered the Cappuccino and Cocoa Transition Agreement, as applicable.

 

(g)           TheIT Carve Out shall have been completed as contemplated by Section 6.15.

 

(h)           TheHistorical Financial Statements described on Exhibit P and anyothers required by the SEC as contemplated by Section 6.4(d) shallhave been delivered to Buyer.

 

(i)            SinceSeptember 27, 2008, except as provided in Schedule 4.8(a) (withouttaking into account any Permitted Stipulated Update or other supplement to Schedule4.8(a)), no event or circumstance that results in or will result in aMaterial Adverse Effect shall have occurred.

 

7.2.          Conditionsto Obligations of the Seller Parties. All obligations of the Seller Parties under this Agreement are subjectto the fulfillment, at or prior to the Closing, of the following conditions,any of which may be waived by Seller, in its sole discretion:

 

(a)           Allrepresentations and warranties made by Buyer in this Agreement shall be trueand correct in all material respects (other than those qualified by materialitywhich shall be true and correct in all respects) as of the date of thisAgreement and as of the Closing Date as though made at and as of the ClosingDate, except to the extent that such representations and warranties speak as ofa specific date, and Buyer shall have delivered all funds, documents andagreements described in Section 3.3 and otherwise performed in allmaterial respects all covenants, obligations and conditions required under thisAgreement to be performed by it on or prior to the Closing Date.

 

(b)           Noaction, suit, or proceeding shall be pending before any Governmental Authorityor before any arbitrator wherein an unfavorable injunction, Judgment, decree,restraining order or other ruling or order is reasonably likely to besuccessful that would (i) prevent the consummation of any of thetransactions contemplated by this Agreement or the Additional Documents, (ii) causeany of the transactions contemplated by this Agreement or the AdditionalDocuments to be rescinded following consummation, or (iii) materially andadversely affect the right of Buyer to own the Purchased Assets and to operatethe DSD Business and to control Realty, and no such injunction, Judgment,decree, restraining order or other ruling or order shall be in effect.

 

(c)           Theparties shall have entered into each of the Operational Agreements.

 

**ARTICLE VIII.SURVIVAL OF REPRESENTATIONS AND WARRANTIESAND INDEMNIFICATION**

 

8.1.          Survivalof Representations and Warranties. No party or other Person entitled to indemnification under this Article VIIIshall make or assert any Indemnity Claim under 

 

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Section 8.2(a) or 8.3(a) belowdue to any inaccuracy or breach of any representation or warranty in thisAgreement after the eighteen (18) month anniversary of the Closing Date.  Notwithstanding the foregoing, the eighteen(18) month cut off period described above shall not apply to (a) anyIndemnity Claim arising under Sections 4.1 (CorporateOrganization), 4.2(a) (No Violation), 4.3 (Authority), Section 4.9(Payment of Taxes), 4.12 (but only the first sentence thereof) (TangiblePersonal Property), 4.15 (but only the third sentence thereof) (IntellectualProperty), 5.1 (Corporate Organization) or 5.2 (Authority), itbeing agreed that the representations and warranties in those Sections shallsurvive through the period of the applicable statute of limitations (includingall waivers and extensions thereof); and (b) any Indemnity Claim arisingunder Section 4.21 (Hazardous Substances), it being agreed that therepresentations and warranties in Section 4.21 shall continue untilthe three (3) year anniversary of the Closing Date.

 

Any party or other Person shall be entitled to itsindemnification rights under this Article VIII only to the extentthat such party or Person asserted in writing a specific Indemnity Claim priorto the date by which an Indemnity Claim relating to the representations andwarranties in question must be commenced pursuant to this Section 8.1,in which event the relevant representations and warranties shall continue ineffect and remain a basis for indemnity with respect to each such assertedIndemnity Claim until such Indemnity Claim is finally resolved (pursuant to anon-appealable order by a court of competent jurisdiction or agreement of theSeller and Buyer) and all obligations with respect thereto are fully satisfied.

 

8.2.          Seller’sIndemnification.  Subject to thefurther provisions of this Article VIII, Seller shall indemnify,defend and hold harmless Buyer and its Affiliates and their respectiveRepresentatives (collectively, “*Buyer Indemnified Parties*”), fromand against and in respect of any and all Losses, net of any insurance proceedsor Tax benefits actually recovered or recoverable by any Buyer IndemnifiedParty (it being agreed that each Buyer Indemnified Party shall use commerciallyreasonable efforts to seek and obtain such recoveries), resulting from, inconnection with or arising out of:

 

(a)           anyinaccuracy or breach of any representation or warranty made by any Seller Partyin Article IV of this Agreement;

 

(b)           thefailure of any Seller Party to comply with any of the covenants in thisAgreement;

 

(c)           inthe event that Buyer discontinues operations at the Hayward, CA Facility duringthe 180-day period following the Closing, withdrawal liabilities in excess of$60,000.00 incurred by Buyer under the Multiemployer Plans related to saidFacility on account of such shutdown;

 

(d)           anyExcluded Liability, including any Excluded Liability asserted against Buyer byreason of Buyer’s status as a transferee or successor of the DSD Business orthe Purchased 

 

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Assets and Liabilities of Seller under Section 6.7 relatingto Mixed Use Contracts to be performed by Seller; and

 

(e)           anyLiability to the extent relating to the ownership or use of the PurchasedAssets or the operation of the DSD Business on or prior to the Closing, exceptthe Assumed Liabilities.

 

8.3.          Buyer’sIndemnification.  Subject to thefurther provisions of this Article VIII, Buyer shall indemnify, defend andhold harmless Seller and its Affiliates and their respective Representatives(collectively, “*Seller Indemnified Parties*”)from and against and in respect of any and all Losses, net of any insuranceproceeds or Tax benefits actually recovered or recoverable by any SellerIndemnified Party (it being agreed that each Seller Indemnified Party shall usecommercially reasonable efforts to seek and obtain such recoveries), resultingfrom, in connection with, or arising out of:

 

(a)           anyinaccuracy or breach of any representation or warranty made by Buyer in Article Vof this Agreement;

 

(b)           thefailure of Buyer to comply with any of the covenants in this Agreement;

 

(c)           anyAssumed Liability, including Liabilities of Buyer under Section 6.7relating to Mixed Use Contracts to be performed by Buyer;

 

(d)           anyLiability to the extent relating to the operation by Buyer or Buyer’sAffiliates, successors or assigns of the Purchased Assets or the DSD Businessafter the Closing, including any obligations of Buyer to the Hired Personnel ortheir representatives under the National Labor Relations Act, as amended fromtime to time;

 

(e)           anyclaim made by any employee or former employee of the DSD Business at any timeunder any Buyer Employee Plan for benefits, compensation, bonus, severance,salary or benefits continuation, or retention pay;

 

(f)            anybreach by Buyer of the covenant in Section 6.2(d) and anywithdrawal liability or secondary Liability (or payments relating thereto)incurred by Seller on or after the Closing as set forth in Section 1.4(d) inrelation to any Assumed Multiemployer Plan and as set forth in Section 6.2(d);

 

(g)           anyLiabilities incurred by Seller under the WARN Act and any state WARN statutesas a result of any layoffs by Buyer at any Transferred Facility following theClosing, except to the extent attributable to any inaccuracy of the listprovided by Seller under Section 3.2(h)(i);

 

(h)           anyLiability arising under the WARN Act or any applicable state WARN statutearising out of or relating to the sale transaction as provided herein,including any Liability 

 

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resulting from any employment losses initiated by the Buyer after theClosing Date, except to the extent attributable to any inaccuracy of the listprovided by Seller under Section 3.2(h)(i);

 

(i)            anyclaims for and Liabilities under the Severance Plans to the extent suchLiabilities arise from (i) the termination by Seller of the employment ofa Person to whom Buyer is obligated to offer employment under Section 6.2(a) byreason of an alleged failure of Buyer to provide benefits comparable to thoseprovided by Seller immediately prior to the Closing, or (ii) terminationby Seller by reason of Buyer’s breach of Section 6.2(a);

 

(j)            anyLiability for which Buyer is obligated pursuant to Section 1.2;

 

(k)           Buyer’sfailure to assume and comply with the Labor Contracts; and

 

(l)            Buyer’srelocation of any Hired Personnel during the 90-day period following the Closingto any location other than an Approved Location.

 

8.4.          IndemnificationProcedures.

 

(a)           ProceduresRelating to Indemnification.  In theevent that a third party files a lawsuit, enforcement action or otherproceeding against a party entitled to indemnification under this Article VIII(an “*Indemnified Party*”) or theIndemnified Party receives notice of, or becomes aware of a condition or eventwhich may entitle such party to the benefit of any indemnity hereunder inconnection with a claim by a third party (a “*ThirdParty Claim*”), the Indemnified Party shall give written noticethereof (the “*Claim Notice*”)promptly to each party obligated to provide indemnification pursuant to this Article VIII(an “*Indemnifying Party*”).  The Claim Notice shall describe in reasonabledetail the nature of the claim, including an estimate, if practicable, of theamount of damages that have been or may be suffered or incurred by theIndemnified Party attributable to such claim and the basis of the IndemnifiedParty’s request for indemnification under this Agreement.  Notwithstanding the foregoing, failure by anIndemnified Party to provide notice on a timely basis of a Third Party Claimshall not relieve the Indemnifying Party of its obligations hereunder, unless,and then solely to the extent that, the Indemnifying Party is prejudicedthereby.

 

(b)           Conductof Defense.  If a Third Party Claimis made against an Indemnified Party, the Indemnifying Party shall have theright, upon written notice to the Indemnified Party (the “*DefenseNotice*”) within fifteen (15) days of its receipt from theIndemnified Party of the Claim Notice, to conduct at its expense the defenseagainst such Third Party Claim in its own name, or, if necessary, in the nameof the Indemnified Party; provided, however, that if (A) such claim seeksinjunctive or other equitable relief involving the Indemnified Party or any ofits Affiliates, (B) any insurance carrier for the Indemnified Party or anyof its Affiliates requires, as a condition to such Person’s eligibility torecover insurance proceeds on account of any such claim, that such carriercontrol the defense of any such claim, or (C) the Indemnifying Partynotifies the Indemnified Party that it is not required to provideindemnification for such claim, then, in any such case, the Indemnified Partyshall be entitled to conduct the defense against such claim, at 

 

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the expense of the Indemnifying Party. When the Indemnifying Party conducts the defense, the Indemnified Partyshall have the right to approve the defense counsel representing theIndemnifying Party in such defense, which approval shall not be unreasonablywithheld or delayed, and in the event the Indemnifying Party and theIndemnified Party cannot agree upon such counsel within ten (10) daysafter the Defense Notice is provided, then the Indemnifying Party shall proposean alternate defense counsel, which shall be subject again to the IndemnifiedParty’s approval, which approval shall not be unreasonably withheld ordelayed.  If the Indemnifying Partyassumes the defense of any Third Party Claim made against the IndemnifiedParty, the Indemnifying Party shall notify the Indemnified Party in writing atthe point that the Indemnifying Party determines that it is not required toprovide indemnification to the Indemnified Party under this Article VIII.

 

(c)           Conductby Indemnified Party.  In the eventthat the Indemnifying Party shall fail to give the Defense Notice within thetime and as prescribed by Section 8.4(b), or if the IndemnifyingParty does not have the right to defend such Third Party Claim pursuant to Section 8.4(b),then in either such event, the Indemnified Party shall have the right toconduct such defense in good faith with counsel reasonably acceptable to theIndemnifying Party, but the Indemnified Party (or any insurance carrierdefending such Third Party Claim on the Indemnified Party’s behalf) shall beprohibited from compromising or settling the Claim without the prior writtenconsent of the Indemnifying Party, which consent shall not be unreasonablywithheld or delayed.  Failure at any timeof the Indemnifying Party to diligently defend a Third Party Claim as requiredherein shall entitle the Indemnified Party to assume the defense and settlementof such Third Party Claim as if the Indemnifying Party had never elected to doso as provided in this Section. Notwithstanding anything contained in this Article VIII to thecontrary, the Indemnified Party may, by prior written notice to the IndemnifyingParty, assume the defense of any Third Party Claim if the Indemnified Partyshall have been advised by counsel that there are one or more legal defensesavailable to the Indemnified Party which are different from or in addition tothose available to the Indemnifying Party, and, in the reasonable opinion ofthe Indemnified Party and its counsel, counsel for the Indemnifying Party couldnot adequately represent the interests of the Indemnified Party because suchinterests would be in conflict with those of the Indemnifying Party.

 

(d)           Cooperation.  In the event that the Indemnifying Party doesdeliver a Defense Notice and thereby elects to conduct the defense of suchThird Party Claim in accordance with Section 8.4(b), theIndemnified Party will cooperate with and make available to the IndemnifyingParty such assistance, personnel, witnesses and materials that are reasonablyrelevant to such Third Party Claim as the Indemnifying Party may reasonablyrequest.  Each Indemnified Party shallreasonably consult and cooperate with each Indemnifying Party with a viewtowards mitigating Losses in connection with claims for which a party seeksindemnification under this Article VIII.

 

(e)           Settlements.  Without the prior written consent of theIndemnified Party (which shall not be unreasonably withheld or delayed), theIndemnifying Party (or any insurance carrier 

 

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defending such Third Party Claim on the Indemnifying Party’s behalf)will not enter into any settlement of any Third Party Claim if, pursuant to oras a result of such settlement, such settlement could lead to Liability orcreate any financial or other obligation on the part of the Indemnified Partyfor which the Indemnified Party is not entitled to indemnificationhereunder.  If the Indemnifying Partyreceives a firm offer to settle a Third Party Claim (other than a Third PartyClaim seeking injunctive or other nonmonetary relief affecting the IndemnifiedParty) which releases the Indemnified Party completely in connection with suchThird Party Claim, which offer the Indemnifying Party is permitted to settleunder this Section 8.4, and the Indemnifying Party desires toaccept such offer, the Indemnifying Party will give written notice to theIndemnified Party to that effect.  If theIndemnified Party objects to such firm offer within ten (10) days afterits receipt of such notice, the Indemnified Party may continue to contest ordefend such Third Party Claim and, in such event, the maximum Liability of theIndemnifying Party as to such Third Party Claim will not exceed the amount ofsuch settlement offer, plus costs and expenses paid or incurred by theIndemnified Party up to the point such notice had been delivered.  Notwithstanding anything contained herein tothe contrary, the Indemnifying Party (or any insurance carrier defending suchThird Party Claim on the Indemnifying Party’s behalf) shall not agree, withoutthe Indemnified Party’s consent, to the entry of any Judgment or settlement,compromise or decree that provides for injunctive or other nonmonetary reliefaffecting the Indemnified Party.

 

(f)            BindingObligations.  Any Judgment entered orsettlement agreed upon in the manner provided herein shall be binding upon theIndemnifying Party, and shall be conclusively deemed to be an obligation withrespect to which the Indemnified Party is entitled to prompt indemnificationhereunder, subject to the Indemnifying Party’s right to appeal an appealableJudgment or order.

 

8.5.          Natureof Other Liabilities.  In the eventany Indemnified Party should have a claim against any Indemnifying Partyhereunder which does not involve a Third Party Claim, the Indemnified Partyshall transmit to the Indemnifying Party a written notice (the “*Indemnity Notice*”) describing inreasonable detail the nature of the claim and the basis of the IndemnifiedParty’s request for indemnification under this Agreement.  If the Indemnifying Party does not notify theIndemnified Party within forty-five (45) days from its receipt of the IndemnityNotice that the Indemnifying Party disputes such claim (a “*Dispute Notice*”), the claim specified bythe Indemnified Party in the Indemnity Notice shall, subject to the furtherprovisions of this Article VIII, be deemed a Liability of the IndemnifyingParty under this Article VIII.

 

8.6.          IndemnificationLimits and Restrictions.

 

(a)           Noneof Buyer or any other Buyer Indemnified Party shall be entitled to anyindemnity under Section 8.2(a) unless and until all IndemnityClaims by the Buyer Indemnified Parties exceed one percent (1%) of the PurchasePrice in the aggregate (“*Basket*”),at which time the Person(s) seeking indemnification shall be entitled torecover all Losses in excess of the Basket; provided, however, that in no eventshall the Seller Parties, individually or in the 

 

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aggregate, be liable for Losses pursuant to Section 8.2(a) inexcess of ten percent (10%) of the Purchase Price, and further provided that inno event shall any Indemnified Party assert an Indemnity Claim whichindividually seeks recovery of less than $5,000.00 (“*Mini Basket*”).  Notwithstanding anything herein to thecontrary, (i) the Basket shall not apply to any Losses resulting from theinaccuracy or breach of any of the representations and warranties set forth in Sections 4.1(Corporate Organization), 4.3 (Authority), 4.9 (Payment of Taxes), 4.12 (butonly the first sentence thereof) (Ownership of Tangible Personal Property),4.15 (but only the third sentence thereof) (Intellectual Property) and 4.22(Brokers’ Fees and Commissions), and any Losses resulting from the commissionof fraud by any Seller Party, and (ii) with respect to Losses that resultfrom the inaccuracy or breach by a Seller Party of any representation or warrantypursuant to Section 4.21 (Hazardous Substances), in no event shallthe Seller Parties, individually or in the aggregate, be liable for such Lossespursuant to Section 8.2(a) in excess of fifteen percent (15%)of the Purchase Price. ** **For purposes of calculating theBasket, Claims which may not be asserted because of the Mini Basket shall notbe counted.  For the avoidance of doubt,no Excluded Liability is subject to any basket or cap even if the liability isalso the subject of a representation or warranty by the Seller Parties.

 

(b)           Inno case shall Losses include (a) any incidental, consequential, indirector special losses or damages (including, without limitation, lost profits, lostrevenues and loss of business), whether foreseeable or not, whether occasionedby any failure to perform or the breach of any representation, warranty,covenant or other obligation under this Agreement or any Additional Documentfor any cause whatsoever, or (b) fees and expenses of more than onecounsel with respect to any Indemnity Claim or Claims arising out of the samegeneral allegations or circumstances.

 

(c)           Allindemnification payments under Sections 8.2(a) or 8.3(a) shallbe deemed adjustments to the Purchase Price.

 

8.7.          AdditionalLimitations of Liability.  Notwithstandinganything in this Article VIII to the contrary:

 

(a)           Sellershall have no Liability to Buyer Indemnified Parties (for indemnification orotherwise) for any inaccuracy or breach of any representation or warranty tothe extent that Buyer had knowledge at or prior to the time of Closing of suchinaccuracy or breach.

 

(b)           Subjectto Section 8.6(b), Buyer Indemnified Parties may not recover Lossesmore than once for any specific facts, omissions or circumstancesnotwithstanding the fact that such facts, omissions or circumstances mayconstitute the breach of more than one representation or warranty; *provided*, *however*, thatthe parties recognize that there may be different types of Losses that arisefrom the same facts, omissions or circumstances.

 

(c)           Inthe event that Seller pays any amount to any Buyer Indemnified Party or otherPerson pursuant to Section 8.2, or incurs any costs or expenses indefending any Third Party Claim for which Seller has no Liability eitherpursuant to Section 8.2 or because of the 

 

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application of the Basket and, pursuant to the provisions of this Article VIII,Seller is not required to pay such amount or incur such cost or expense becauseSeller has no Liability either pursuant to Section 8.2 or becauseof the application of the Basket, Buyer shall, promptly following Seller’srequest therefor, reimburse Seller (i) for all such amounts paid orincurred in the case of any cost or expense for which Seller has no Liabilitypursuant to Section 8.2, or (ii) up to the amount of theBasket in the case of any cost or expense for which Seller has no Liabilitybecause of the application of the Basket.

 

(d)           Tothe extent that any Material Contract required to be listed in any Schedule isnot so listed, but Buyer accepts the benefits of such Material Contract afterthe Closing, Seller shall have no Liability to Buyer Indemnified Parties withrespect to any Losses resulting from any breach of a representation or warrantyas a result of such failure so to disclose such Material Contract except to theextent that Buyer is not aware, at any time prior to its acceptance of suchbenefits, of the material burdens imposed upon it by such Material Contract.

 

(e)           Noparty shall exercise any right of set off or recoupment with respect to anyLosses to which it claims a right of indemnity pursuant to this Article VIII,including, without limitation, in the case of Buyer, any right of setoffagainst amounts owed by Buyer under the Note, except that if Seller has anyindemnity obligation under this Article VIII or otherwise under thisAgreement, Seller shall have the right of set off such amount against the Note,such amount to be applied first to the accrued and unpaid interest and then thebalance to the principal amount of the Note.

 

8.8.          ExclusiveRemedy.  Except in the case of fraudand as provided in Section 6.13 and to the extent that any provision of this Agreement expresslyprovides for specific performance or injunctive relief, the rights and obligationsof the parties under this Article VIII are the exclusive rights andobligations of the parties with respect to any breach of any representation,warranty, covenant or agreement in this Agreement or any Additional Document(other than the Operational Agreements) and shall be in lieu of any otherrights or remedies to which the party entitled to indemnification hereunderwould otherwise be entitled as a result of such breach.

 

**ARTICLE IX.TERMINATION AND ABANDONMENT**

 

9.1.          Methodsof Termination.  Subject to theprovisions of Section 3.1 relating to the deferral of the ClosingDate, this Agreement may be terminated and the transactions contemplated herebymay be abandoned at any time prior to the Closing:

 

(a)           bymutual written consent of Buyer and Seller;

 

(b)           byeither Buyer or Seller:

 

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(i)            if the other party shall have failedto comply with any of its obligations or agreements contained in this Agreementrequired to be complied with or performed prior to the date of suchtermination, which failure to comply has not been cured within ten (10) businessdays following receipt by such other party of written notice of such failure tocomply;

 

(ii)           if there has been a breach by theother party of any representation or warranty made in this Agreement and suchbreach has not been cured within ten (10) business days following receiptby the breaching party of written notice of the breach;

 

(iii)          if a Governmental Authority shall haveissued an order, decree or ruling or taken any other action, in each case,permanently restraining, enjoining or otherwise prohibiting the transactionscontemplated by this Agreement, and such order, decree, ruling or other actionshall have become final and nonappealable; or

 

(iv)          if the Closing Date shall not haveoccurred on or before March 28, 2009,

 

provided, however, thatthe right to terminate this Agreement shall not be available to any party whosebreach of this Agreement has been the cause of, or resulted in, the failure ofthe Closing to occur on or before such date.

 

9.2.          Procedureand Effect of Termination.  In theevent of termination of this Agreement by either Buyer or Seller, as providedin Section 9.1, this Agreement shall immediately become void andthere shall be no Liability hereunder on the part of any party except thatnothing contained in this Section shall relieve any party hereto from anyLiability for any breach of a representation, warranty or covenant contained inthis Agreement.

 

**ARTICLE X.MISCELLANEOUS**

 

10.1.        Notices.  All notices and other communications requiredor permitted to be made under this Agreement shall be in writing and shall bedeemed duly given for all purposes (a) on the date of delivery, ifdelivered personally or by confirmed telecopier transmission, (b) on thenext business day after delivery by a recognized overnight carrier, or (c) onthe date of receipt or refusal of delivery, if sent by United States certifiedmail, return receipt requested, postage prepaid, and addressed as follows (orat such other address as any party shall provide to the other parties by noticegiven pursuant to this Section 10.1):

 

If to any Seller Party:

 

Sara Lee Corporation3500 Lacey RoadDowners Grove, IL  60015Attention:  General CounselFax No.:  630-598-6951

 

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If to Buyer:

 

Farmer Bros. Co.20333 South Normandie AvenueTorrance, CA  90502Attention:  Chief Executive OfficerFax No.:  (310) 320-2430

 

With a copy to:

 

Anglin, Flewelling, Rasmussen, Campbell &Trytten LLP199 S. Los Robles Avenue, Suite 600Pasadena, CA 91101Attention:  John M. Anglin, Esq.Fax No.:  (626) 577-7764

 

10.2.        Amendments;Waivers.  Any provision of thisAgreement may be amended or waived if, and only if, such amendment or waiver isin writing and is duly executed, in the case of an amendment, by Buyer andSeller Parties, or, in the case of a waiver, by the party against whom thewaiver is to be enforced.  No failure ordelay by any party in exercising any right, power or privilege under thisAgreement shall operate as a waiver thereof nor shall any single or partialwaiver or exercise thereof preclude the enforcement of any other right, poweror privilege.

 

10.3.        Successorsand Assigns.  This Agreement shall bebinding upon and inure to the benefit of the parties and their respectivesuccessors and permitted assigns.  Noparty may assign or delegate or otherwise transfer any of its rights orobligations hereunder without the prior written consent of the other party; *provided* that either party may assign its rights under thisAgreement to any Affiliate of such party or any successor or transferee of suchparty as a result of any business combination (in any or all of which casessuch party nonetheless shall remain responsible for the performance of all ofits obligations under this Agreement).

 

10.4.        Construction;Interpretation; Certain Terms.  Theheadings contained in this Agreement, the Additional Documents and theschedules and exhibits hereto and thereto are for reference purposes only andshall not affect in any way the meaning or interpretation of thisAgreement.  Article, section, schedule,exhibit, recital and party references are to this Agreement unless otherwisestated; the exhibits and schedules attached hereto are part of this Agreementas if fully set forth herein.  Allreferences to singular or plural or masculine or feminine shall include theother as the context may require.  Thewords “hereof,” “herein,” “hereunder” and words of similar import shall referto this Agreement as a whole and not to any particular Section orprovision of this Agreement, and reference to a particular Section of thisAgreement shall include all subsections thereof.  No party, nor its counsel, shall be deemedthe drafter of this 

 

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Agreement for purposes of construing the provisions of this Agreement,and all provisions of this Agreement shall be construed in accordance withtheir fair meaning, and not strictly for or against any party.  The term “including” as used in thisAgreement shall mean including, without limitation, and shall not be deemed toindicate an exhaustive enumeration of the items at issue.  Any reference to any federal, state, local orforeign statute or law shall be deemed also to refer to all rules andregulations promulgated thereunder, unless the context requires otherwise.  The parties intend that each representation,warranty and covenant contained herein shall have independent significance.  If any party has breached any representation,warranty or covenant contained herein in any respect, then subject to Section 8.7(b),the fact that there exists another representation, warranty or covenantrelating to the same subject matter (regardless of the relative levels of specificity)which the party has not breached shall not detract from or mitigate the factthat the party is in breach of the first representation, warranty or covenant.

 

10.5.        Severability.  Any term or provision of this Agreement thatis or becomes invalid or unenforceable shall be ineffective to the extent ofsuch invalidity or unenforceability without rendering invalid or unenforceablethe remaining terms or provisions of this Agreement.

 

10.6.        Counterparts.  This Agreement may be executed in any numberof counterparts with the same effect as if all parties hereto had signed thesame document.

 

10.7.        EntireAgreement.  This Agreement, togetherwith the Exhibits and Schedules and Additional Documents, constitutes theentire agreement among the parties pertaining to the subject matter hereof andthereof, and supersede all prior and contemporaneous, oral and written,agreements and understandings pertaining thereto.

 

10.8.        GoverningLaw; Consent to Jurisdiction; Venue. This Agreement shall be governed by and construed in accordance with thelaws of the State of Illinois, without giving effect to conflict of lawprinciples.  Each party hereto herebyagrees that any proceeding relating to this Agreement, the Additional Documentsand the transactions contemplated hereby or thereby shall be brought solely inthe state or federal court located in Chicago, Illinois.  Each party hereto hereby consents to personaljurisdiction in any such action brought in any such state or federal court,consents to service of process by registered mail made upon such party, waivesany objection to venue in any such state or federal court and any claim thatany such state or federal court is an inconvenient forum.

 

10.9.        Expenses.  Except as otherwise specifically provided inthis Agreement, Buyer shall pay all costs and expenses incurred by or on itsbehalf and Seller shall pay all costs and expenses incurred by or on behalf ofSeller Parties.

 

10.10.      Third-PartyBeneficiaries.  Nothing hereinexpressed or implied is intended to or shall be construed to confer upon orgive any Person, other than the parties hereto and their respective successorsand permitted assigns, any rights or remedies under or by reason of thisAgreement.

 

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10.11.      Knowledge.  All references to “knowledge”, or phrases ofsimilar import (such as “known” or “knows”), shall mean the actual (not imputedor implied), conscious knowledge, at the time of execution of this Agreement orClosing, as applicable, by

 

(a)           inthe case of Seller:  George MichaelKnowles, Sally MacDonald, Daniel Hickman, Tom Hayes, Heidi Modaro, Dan Schoberand Phil Lawrence; and

 

### (b)           in the case ofBuyer:  Roger M. Laverty III, Drew Webband John E. Simmons.

 

10.12.      Title; Risk of Loss.  Title and risk of loss with respect to thePurchased Assets shall pass to Buyer at the Closing.

 

10.13.      Waivers of Trial by Jury.  THE SELLER PARTIES AND BUYER HEREBYIRREVOCABLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER ADDITIONALDOCUMENTS, AND CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS ISDEEMED APPROPRIATE BY THE COURT.

 

**ARTICLE XI.**

**DEFINED TERMS**

 

“***Accounting Costs***”shall have the meaning set forth in Section 6.4(b).

 

“***Accounting Principles***”shall have the meaning set forth in Section 4.6.

 

“***Acquisition***”shall mean the acquisition of the Purchased Assets by Buyer pursuant to theterms and conditions of this Agreement.

 

“***Acquisition Proposal***”shall have the meaning set forth in Section 6.14.

 

“***Additional Documents***”means, collectively, the agreements, certificates, instruments and otherdocuments to be executed and delivered in connection with this Agreement,including the Operational Agreements.

 

“***Adjustment Payment***”shall have the meaning set forth in Section 2.6(e).

 

“***Affiliate***”means with respect to any Person (a) any Person who, directly orindirectly, controls, or is controlled by or under common control with, thePerson in question, or (b) any person who is a director or executiveofficer of such Person.  For purposes ofthis definition, “*control*”of a Person shall mean the power, direct or indirect, to vote or direct thevoting of fifty percent (50%) or more of the outstanding voting securities of suchPerson or to direct or cause the direction of the management and policies ofsuch Person, whether through ownership of voting securities, veto rights orotherwise.

 

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“***Agreement***”shall have the meaning set forth in the Preamble.

 

“***Applicable Law***”means, with respect to any Person, any domestic or foreign, federal, state orlocal statute, law, constitution, code, edict, proclamation, treaty, ruling,pronouncement, decision, opinion, interpretation, ordinance, rule, regulation,order, writ, injunction, directive, Judgment, permit, license, decree or otherrequirement issued, enacted, adopted, passed, approved, promulgated, made,implemented or otherwise put into effect by or under the authority of any GovernmentalAuthority applicable to such Person or any of its Affiliates or any of theirrespective properties, assets, officers, directors, employees, consultants oragents (in connection with such officer’s, director’s, employee’s, consultant’sor agent’s activities on behalf of such Person or any of its Affiliates).

 

“***Approved Location***”shall mean (a) in the case of Hired Personnel who were employed at aTransferred Facility immediately prior to Closing, such Transferred Facility atwhich the Hired Personnel were employed immediately prior to Closing or anyother facility of Buyer which is located not more than twenty (20) miles fromsuch Transferred Facility, and (b) in the case of Hired Personnel who,immediately prior to Closing, were not employed at a Transferred Facility, anyfacility of Buyer which is located not more than twenty (20) miles from thelocation of the facility of Seller at which such Hired Personnel workedimmediately prior to the Closing Date.

 

“***Aramark’s Office Coffee Service Business***”means Aramark’s business of supplying offices and businesses with coffee, tea,and related products for on-site consumption at such offices and businesses byemployees and visitors.  For theavoidance of doubt, Aramark’s Office Coffee Service Business does not includeany other parts of Aramark’s business, even those parts that may include thesale of coffee, tea and related products as part of Aramark’s business ofmanaging food service operations in business offices and other locations.

 

“***Assumed Liabilities***”shall have the meaning set forth in Section 1.4.

 

“***Assumed Multiemployer Plan***”shall have the meaning set forth in Section 6.2(d).

 

“***Authorized Information***”shall have the meaning set forth in Section 6.27.

*** ***

***“Bank Financing”*** means the closing of a loan to Buyer of aprincipal sum of not less than $20,000,000 substantially on the terms (orbetter terms) set forth in that certain bank proposal, dated November 13,2008, delivered by or on behalf of Buyer to Seller.

 

“***Banking Change***”shall mean (a) any additional material restrictions not in force as of thedate hereof shall have been imposed upon trading in securities generally by anyGovernmental Authority or by any national securities exchange, (b) ageneral banking moratorium shall have been established by Federal, Illinois,Maryland or New York authorities, or (c) a war involving the United Statesshall have been declared, or any conflict involving the armed forces of theUnited States shall have escalated, or any other national emergency related to 

 

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the effective operationof government or the financial community shall have occurred, which couldreasonably be expected to materially and adversely affect the DSD Business.

 

“***Basket***” shallhave the meaning set forth in Section 8.6(a).

 

“***Books and Records***”shall have the meaning set forth in Section 1.1(j).

 

“***Brew Equipment Inventory***”means Machines and Spare Parts.

 

“***Business Returns***”shall mean all Tax returns required to be filed with respect to the DSDBusiness other than those consolidated, unitary or combined, Tax returns filedby Seller with respect to both the DSD Business and other businesses owned oroperated by Seller and its Affiliates.

 

“***Buyer***” shallhave the meaning set forth in the Preamble.

 

“***Buyer Co-Pack Agreement***”shall have the meaning set forth in Section 3.2(d)(vi).

 

“***Buyer Employee Plans***”shall have the meaning set forth in Section 6.2(a).

 

“***Buyer Indemnified Parties***”shall have the meaning set forth in Section 8.2.

 

“***Buyer Site(s)***”shall mean any plant, warehouse or facility or other location of Buyer to whichSeller delivers Consumable Inventory, or to which Consumable Inventory is intransit, at or prior to Closing.

 

“***Buyer Trademark LicenseAgreement***” shall have the meaning set forth in Section 3.2(d)(ii).

 

“***Buyer’s Objection***”shall have the meaning set forth in Section 2.6(b).

 

“***Cappuccino and CocoaTransition Agreement***” shall have the meaning set forth in Section 3.2(d)(v).

 

***“Changes”*** shall have the meaning set forth in Section 6.6(a).

 

“***Claim Notice***”shall have the meaning set forth in Section 8.4(a).

 

“***Claims***” shallhave the meaning set forth in Section 4.14.

 

“***Closing***” and “***Closing Date***”shall have the respective meanings set forth in Section 3.1.

 

“***Closing InventoryStatement***” shall have the meaning set forth in Section 2.6(a).

 

“***Closing Payment***”shall have the meaning set forth in Section 2.1(a).

 

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“***Closing Routes***”shall have the meaning set forth in Section 4.13(a).

 

“***Closing Statements***”shall have the meaning set forth in Section 2.6(a).

 

“***COBRA***”shall have the meaning set forth in Section 6.2(c).

 

“***Code***” meansthe Internal Revenue Code of 1986, as amended.

 

“***Coffee Food Service Business***”shall mean the sale of coffee, tea and related products to (i) customerswho offer or provide (whether pursuant to a sale or otherwise) coffee, tea andrelated products to consumers only after preparation into a beverage, (ii) customerswho distribute coffee, tea and related products only to third parties (who arenot consumers) who offer or provide (whether pursuant to a sale or otherwise)such coffee, tea or related products to customers only after preparation into abeverage, (iii) customers engaged in the business of supplying coffee, teaand related products to businesses and other persons and entities who in turnoffer or provide (whether pursuant to a sale or otherwise) brewed coffee or teaby the cup (i.e., office coffee supply), (iv) customers who supply orprovide coffee, tea or related products only to vending machines, and (v) customersengaged in the business of selling coffee, tea and related products directly tocustomers other than through a retail establishment.

 

“***Collection Account***”shall have the meaning set forth in Section 6.20(a).

 

“***Collection Period***”shall have the meaning set forth in Section 6.20(b).

 

“***Confidentiality Agreement***”shall have the meaning set forth in Section 6.11(a).

 

“***Confidential Operating Agreement Terms***” shall have the meaning set forth in Section 6.11(c).

 

“***Consumable Inventory***”shall mean green coffee, tea, spices and other food products, raw materials,work in process, finished goods, packaging, wrapping, supply items, alldisposable products (meaning products that are customarily disposed of aftertheir use), and all other similar items, that are classified as inventoryconsistent with Seller’s customary accounting practices, the FinancialStatements and the Historical Financial Statements.

 

“***Contract(s)***”shall mean any agreement, contract, license, obligation, promise,understanding, arrangement, commitment or undertaking of any nature that islegally binding, whether oral or written and whether express or implied (otherthan leases).

 

“***CPA Firm***”shall have the meaning set forth in Section 2.6(c).

 

“***Defense Notice***”shall have the meaning set forth in Section 8.4(b).

 

“***Dispute Notice***”shall have the meaning set forth in Section 8.5.

 

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“***DSD Business***”means collectively, the DSD Coffee Business and DSD Sauce Business.

 

“***DSD Business Marks***”shall have the meaning set forth in Section 1.1(a).

 

“***DSD Business transactions***”shall mean transactions reflected on Seller’s books and records as transactionsof the DSD Business in a manner consistent with Seller’s past practices.

 

“***DSD Coffee Business***”shall mean (i) Seller’s business of manufacturing, processing, packaging,marketing, distributing and selling coffee, tea, and related products in theUnited States through Seller’s network of Facilities and Vehicles such that theproducts are delivered by Seller directly to customer locations where suchproducts are consumed, (ii) Seller’s business of selling coffee, tea, andrelated products in the United States to customers in sales transactionsprocured by sales personnel employed by the direct store delivery portion ofthe Sara Lee foodservice business which are reflected in Seller’s books andrecords as DSD Business transactions, (iii) Seller’s business in theUnited States of marketing, distributing and selling coffee, tea and relatedproducts under the Trade Names “Cain’s” and “McGarvey” to grocers andretailers, (iv) Seller’s business in the United States of marketing,distributing and selling coffee, tea, and related products in the United Statesthrough Seller’s network of Facilities and Vehicles to Aramark’s Office CoffeeService Business, but only to the extent that such products are ordered bythese entities in connection with their business of supplying other businesseswith such products for on-site consumption, (v) the distribution, sale,service and maintenance of Machines in connection with the business activitiesdescribed in items (i) through (iv), and (vi) any other businesswhich Seller internally designated as part of the United States DSD CoffeeBusiness for the periods covered by the Financial Statements, subject, however,to changes in customers as described in this Agreement.  For the avoidance of doubt, the DSD CoffeeBusiness shall not include any part of Seller’s business with Aramark otherthan Aramark’s Office Coffee Service Business.

 

“***DSD Collection Customers***”shall have the meaning set forth in Section 6.20(a).

 

“***DSD Contracts***” orshall have the meaning set forth in Section 1.1(g).

 

“***DSD Customers***”shall mean the Exclusive Customers and the Shared Customers.

 

***“DSD Employees”***means allindividuals, including all individuals covered by a Labor Contract, employed bySeller on the applicable date who perform services for, and are considered bySeller as employees of, the DSD Business (including service personnel of Sellerassigned to the DSD Business who Buyer has advised Seller that Buyer wishes tohire).

 

“***DSD Intellectual Property***” shall have the meaning setforth in Section 1.1(a).

 

“***DSD Sauce Business***” shall mean Seller’sbusiness of marketing, distributing and selling (but not manufacturing,processing or packaging) sauces and dressings in the United 

 

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States through Seller’snetwork of Facilities and Vehicles such that the products are delivered or soldby Seller to customers of the DSD Coffee Business.

 

“***Employee Plans***”shall have the meaning set forth in Section 4.19(a).

 

“***Environmental Conditions***”shall have the meaning set forth in Section 4.21(h).

 

“***Environmental Laws***”shall mean all federal, state, and local laws, statutes, regulations,ordinances and other provisions having the force of law, and all judicial andadministrative orders concerning pollution or protection of the environment,including without limitation, all those relating to the presence, use,production, generation, handling, transportation, treatment, storage, disposal,distribution, labeling, testing, processing, discharge, release, threatenedrelease, control or cleanup of any Hazardous Substances, as amended and as nowor hereafter in effect, including but not limited to, the ComprehensiveEnvironmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601et seq.), as amended by the Superfund Amendments and Reauthorization Act of1986 (“CERCLA”), the Federal Water Pollution Control Act (33 U.S.C. Section 1251et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the SafeDrinking Water Act (42 U.S.C. (S)3808 et seq.), the Resource Conservation andRecovery Act (42 U.S.C. Section 6901 et seq.), as amended by the Hazardousand Solid Waste Amendments of 1984 (“RCRA”), the Toxic Substances Control Act(15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act(29 U.S.C. Section 651 et seq.), the Hazardous Materials TransportationAct (49 U.S.C. Section 1801 et seq.), the Clean Water Act (33 U.S.C. Section 1321et seq.), and any similar federal, state or local laws, ordinances orregulations implementing such laws.

 

“***Environmental Liability***”means any Liability arising from or related to (a) the storage, handlingor disposal of any Hazardous Substances from, to, at, in, on or under theTransferred Facilities, or (b) any violation of any Environmental Law withrespect to the Transferred Facilities.

 

“***ERISA***” shallmean the Employee Retirement Income Security Act of 1974, as amended.

 

“***ERISA Affiliates***” means any Person required atany relevant time to be aggregated with any entity related to such Person underSections 414(b), (c), (m), or (o) of the Code and any relatedTreasury regulation.

 

“***Estimated Inventory andPrepaid Excess***” shall have the meaning set forth in Section 2.1.

 

“***Estimated Inventory andPrepaid Value***” shall have the meaning set forth in Section 2.1.

 

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“***Estimated Inventory andPrepaid Shortfall***” shall have the meaning set forth in Section 2.1.

 

“***Excluded Assets***”shall have the meaning set forth in Section 1.3.

 

“***Excluded Liabilities***”shall have the meaning set forth in Section 1.5.

 

“***Exclusive Customers***”shall mean Seller’s customers who purchase and receive the Products solelythrough the DSD Business.

 

“***Facilities***”shall mean the distribution centers, warehouses and local depots listed on Exhibit Ahereof.

 

“***Federal Act***”shall have the meaning set forth in Section 4.23.

 

“***Final Closing Statements***”shall have the meaning set forth in Section 2.6(d).

 

“***Financial Statements***”shall have the meaning set forth in Section 4.6.

 

***“Formula License Agreement”*** shall have the meaning set forth in Section 3.2(d)(x).

 

“***Governmental Authority***”means any foreign, domestic, federal, territorial, state or local governmentalauthority, tribal authority, quasi-governmental authority, instrumentality,court, government or self-regulatory organization, commission, tribunal ororganization or any regulatory, administrative or other agency, or anypolitical or other subdivision, department or branch of any of the foregoing.

 

“***Green Coffee and TeaPurchase Agreement***” shall have the meaning set forth in Section 3.2(d)(ix).

 

“***Harahan***”shall mean that certain facility located at 11201 Edwards Avenue, Harahan,Louisiana on Exhibit A.

 

“***Hazardous Substance***”means any substance regulated under any Environmental Law as a hazardousmaterial, hazardous or toxic waste, or hazardous, toxic or radioactivesubstance, including, without limitation petroleum or petroleum products.

 

“***Hazardous SubstanceRelease***” shall mean and include any spilling, leaking, pumping,pouring, emitting, emptying, discharging, injecting, escaping, migrating,leaching, dumping or disposing into the environment or the workplace of anyHazardous Substance, and otherwise as defined in any Environmental Law.

 

“***Hired Personnel***”shall have the meaning set forth in Section 6.2(a).

 

“***Historic InventoryStatement***” shall have the meaning set forth in Section 2.6(a).

 

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“***Historical FinancialStatements***” shall have the meaning set forth in Section 6.4(a).

 

“***Houston Plant***”shall mean those certain parcels of real estate commonly known as 202 and 235N. Norwood, Houston, TX on Exhibit A.

 

“***Houston Software***”shall mean the Business Planning and Control System Software (BPCS) which runson an AS 400 computer server located at the Houston Plant.

 

“***including***”shall have the meaning set forth in Section 10.4.

 

“***Indemnified Party***”shall have the meaning set forth in Section 8.4(a).

 

“***Indemnifying Party***”shall have the meaning set forth in Section 8.4(a).

 

“***Indemnity Claim***”means a claim for Losses, net of any insurance proceeds and Tax benefitsrecovered or recoverable by the Person(s) seeking indemnification relatedthereto, asserted pursuant to Article VIII.

 

“***Indemnity Notice***”shall have the meaning set forth in Section 8.5.

 

“***Information***”shall have the meaning set forth in Section 1.1(j).

 

“***Inventory***”shall mean inventory held for sale or distribution to customers and all rawmaterials, work in process, finished products, wrapping, supply items,packaging items and similar items.

 

“***IRS***” shallhave the meaning set forth in Section 2.2.

 

“***IT Carve Out***”shall have the meaning set forth in Section 6.15.

 

“***IT Carve Out Costs***”shall have the meaning set forth in Section 6.15.

 

“***Judgment***” shall include any judgment, order,writ, injunction, decree or award of any Governmental Authority.

 

“***Know-how***”means specialized, proprietary knowledge (including product knowledge and useand application knowledge), recipes, formulae, product formulations, processes,product designs, specifications, quality control, procedures, manufacturing,engineering and other drawings, computer data bases and software, technology,other intangibles, technical information, safety information, engineering dataand design and engineering specifications, research records, market surveys andall promotional literature, customer and supplier lists and similar data.

 

“***knowledge***”shall have the meaning as set forth in Section 10.11.

 

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“***Labor Contact***”shall have the meaning set forth in Section 1.1(g).

 

“***Leased Miscellaneous Vehicles***” means thevehicles identified on Schedule 1.1(f) as “LeasedMiscellaneous Vehicles”, as such schedule may be amended by Seller to reflectdispositions of any such Vehicles in the ordinary course of the DSD Business,including dispositions as a result of lease terminations, casualties,obsolescence or the like.

 

“***LeasedReal Property***”shall mean the Transferred Facilities listed in Exhibit A anddesignated therein as leased by Seller and transferred to Realty, including allleasehold or subleasehold estates and other rights to use or occupy any land,buildings, structures, improvements, fixtures or other interest in realproperty held by Realty.

 

“***Leased Route Trucks***”means the route trucks identified on Schedule 1.1(f) as“Leased Route Trucks”, as such schedule may be amended by Seller, subject to Section 6.6(b),to reflect dispositions of any such Vehicles in the ordinary course of the DSDBusiness, including dispositions as a result of lease terminations, casualties,obsolescence or the like.

 

“***Leased Sales Vehicles***” means the vehiclesidentified on Schedule 1.1(f) as “Leased Sales Vehicles”, assuch schedule may be amended by Seller to reflect dispositions of any suchVehicles in the ordinary course of the DSD Business, including dispositions asa result of lease terminations, casualties, obsolescence or the like.

 

“***Leased Service Trucks***”means the service trucks and other vehicles identified on Schedule 1.1(f) as “Leased ServiceTrucks”, as such schedule may be amended by Seller, subject to Section 6.6(b),to reflect dispositions of any such Vehicles in the ordinary course of the DSDBusiness, including dispositions as a result of lease terminations, casualties,obsolescence or the like.

 

“***Leased Vehicles***”means the Leased Route Trucks, Leased Sales Vehicles, Leased Service Trucks andLeased Miscellaneous Vehicles.

 

“***Liability***”shall mean any obligation or liability (including accounts payable) of any kindor nature, absolute or contingent, known or unknown, liquidated orunliquidated, asserted or unasserted, whether accrued or unaccrued, whether dueor to become due and regardless of when or by whom asserted, including anyLiability for Taxes.

 

“***Lien***” shallhave the meaning set forth in Section 1.1.

 

“***Liquid Coffee***”shall have the meaning set forth in Section 1.3(b).

 

“***Liquid Coffee Business***”shall have the meaning set forth in Section 1.3(b).

 

“***Liquid Coffee DistributionAgreement***” shall have the meaning set forth in Section 3.2(d)(viii).

 

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“***Losses***”shall mean all damages, penalties, interest, fines, costs, amounts paid insettlement, obligations, losses, expenses and fees (including court costs,costs of investigation and reasonable attorneys’ fees and expenses) or otherLiabilities relating to any actions (whether in law, equity or in analternative proceeding), suits, proceedings, hearings, investigations, charges,complaints, claims, demands, injunctions, Judgments, orders, decrees or rulingsof any nature (whether or not involving a third party claim).

 

“***Machines***”means brewed and liquid coffee equipment, including coffee brewers andgrinders, cocoa and cappuccino dispensing machines, and similar machines.

 

“***Material Adverse Effect***”shall have the meaning set forth in Section 4.8(a).

 

“***Material Contracts***”shall have the meaning set forth in Section 4.17(a).

 

“***Mini Basket***”shall have the meaning set forth in Section 8.6(a).

 

“***Mixed Use Contracts***”shall mean each of the Contracts (other than Purchased Contracts) which arelegally binding to which any Seller Party is a party or is bound and whichrelate not only to the DSD Business, but also to other products or businessesof the Seller Parties, but shall not include any Contracts that are ExcludedAssets.

 

“***Moonachie***”shall mean that certain facility located at Moonachie, NJ in Exhibit A.

 

“***Multiemployer Plan***”shall mean any multiemployer plan as defined in Section 3(37) of ERISA, Section 4001(a)(3) ofERISA or Section 414(f) of the Code.

 

“***Note***” shallhave the meaning set forth in Section 2.1(b).

 

“***NSO Business***” shall mean Seller’s businessof manufacturing, processing, packaging, marketing, distributing and selling ofcoffee, tea and related products through Seller’s national sales organizationfood service business.

 

***“Oklahoma City Plant”*** shall mean those certain parcels of real estatecommonly known as 1313 N. Broadway Ext., Oklahoma City, OK on Exhibit A.

 

“***Operational Agreements***”shall have the meaning set forth in Section 3.2(d).

 

“***Option Agreement***”shall have the meaning set forth in Section 3.2(g).

 

“***OSHA***” shallhave the meaning set forth in Section 4.10(b).

 

“***Other******IntellectualProperty***” means,except for Trademarks, Trade Names and domain names, all of the following thatrelate exclusively to the DSD Business, wherever such rights exist, includingthe right to recover for any past infringement: (i) Know-how, but only to the extent used in the United States, (ii) proprietaryrights in trade dress and packaging with respect 

 

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to the Trademarks andTrade Names set forth on Schedules 1.1(a)-1 and 2, (iii) shoprights; (iv) copyrightable works, registered copyrights, and applications,registrations and renewals in connection therewith, (v) inventions(whether patentable or unpatentable and whether or not reduced to practice) andall improvements thereto, (vi) Patents, (vii) trade secrets, but onlyto the extent used in the United States, and (viii) all other intellectualproperty rights of the Seller Parties that relate exclusively to the DSDBusiness and are used in the United States, but not Seller’s right or licenseto refer to product as “100% Columbian Coffee”.

 

“***Owned MiscellaneousVehicles***” means thevehicles used exclusively by Hired Personnel who are hired by Buyer atClosing, and all other vehicles owned by Seller and located at the TransferredFacilities at the Closing and not constituting Owned Route Trucks or OwnedService Trucks, as identified on Schedule 4.13-2as “Owned Miscellaneous Vehicles”, as such schedule may be amended by Seller toreflect dispositions of any such Vehicles in the ordinary course of the DSDBusiness, including dispositions as a result of casualties, obsolescence or thelike.

 

“***Owned Real Property***”shall mean the Transferred Facilities listed in Exhibit A anddesignated as owned by Seller, together with all rights, rights of way,easements, appurtenances, improvements, fixtures, etc. in any manner belongingto, or pertaining to such tract(s) or parcel(s) of land.

 

“***Owned Route Trucks***” means the routetrucks owned by Seller and identifiedon Schedule 4.13-2 as “Owned Route Trucks”, as such schedule may beamended by Seller, subject to Section 6.6(b), to reflectdispositions of any such Vehicles in the ordinary course of the DSD Business,including dispositions as a result of casualties, obsolescence or the like.

 

“***Owned Service Trucks***”means the service trucks and other vehicles owned by Seller and identified on Schedule 4.13.2 as“Owned Service Trucks”, as such schedule may be amended by Seller, subject to Section 6.6(b),to reflect dispositions of any such Vehicles in the ordinary course of the DSDBusiness, including dispositions as a result of casualties, obsolescence or thelike.

 

“***Owned Vehicles***”means the Owned Route Trucks, Owned Service Trucks and Owned MiscellaneousVehicles.

 

“***Patents***” means patents (including allreissues, reexaminations, divisions, continuations, continuations in part,revisions, renewals and extensions thereof), utility models, provisional patentapplications, patent applications and patent disclosures.

 

“***Permits***”shall mean licenses, permits, franchises, approvals, authorizations, consents,registrations, certificates, variances, or orders of, or filings with, anyGovernmental Authority, whether federal, state or local, necessary for the pastor present conduct of, or relating to the past or present operation of, the DSDBusiness.

 

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“***Permitted Encumbrances***”shall mean with respect to each parcel of Owned Real Property:  (a) all real estate taxes andassessments, both general and special, not yet due or payable; (b) zoningand building ordinances and subdivision and land use regulations; (c) allinstruments recorded in the real estate records of the jurisdiction in whichsuch Real Property is located that affect the status of title to the Owned RealProperty; and (d) all matters of survey and all other matters with respectto such Owned Real Property which are set forth on Schedule 7.1(d).

 

“***Permitted Liens***”means (i) mechanics’, carriers’, workers’ warehouseman’s, materialman’s,repairman’s, landlords’, or other Liens arising or incurred in the ordinarycourse of the DSD Business with respect to charges not yet due and payable, (ii) securityinterests of equipment lessors to evidence title retention; (iii) statutoryliens for current Taxes or assessments not yet due or payable, and (iv) withrespect to the Owned Real Property only, Permitted Encumbrances.

 

“***Permitted Stipulated Updates***”shall have the meaning set forth in Section 6.6(a).

 

“***Person***” meansany individual, Governmental Authority, corporation, association, partnership(general or limited), joint venture, trust, estate, limited liability companyor other legal entity or organization.

 

“***Personal Property Leases***”shall have the meaning set forth in Section 1.1(f).

 

“***Prepaid Expenses***”shall have the meaning set forth in Section 1.1(m).

 

“***Prepaid Statement***”shall have the meaning set forth in Section 2.6(a).

 

“***Prior Customers***”shall have the meaning set forth in Section 4.25.

 

“***Product Liability Claim***”means Claims against Seller relating to any product of the DSD Businessprocessed, manufactured, marketed, labeled or sold by Seller or any of itsAffiliates and alleged to have been defective, or improperly processed,manufactured, marketed, labeled or sold.

 

“***Products***”means Seller’s products distributed and sold through the DSD Business includingcoffee, tea, and related products and sauces and dressings.

 

“***Prohibited Area***”shall have the meaning set forth in Section 6.18.

 

“***Prohibited Business***”shall have the meaning set forth in Section 6.18.

 

“***Promotional Expenses***”shall have the meaning set forth in Section 1.4(e).

 

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“***Proprietary Rights***”shall mean (i) Patents, (ii) Trademarks, (iii) Trade Names, (iv) Know-how,(v) proprietary rights in trade dress and packaging, (vi) shoprights, (v) copyrightable works, copyrights, and applications,registrations and renewals in connection therewith, (vi) inventions(whether patentable or unpatentable and whether or not reduced to practice) andall improvements thereto, (vii) trade secrets, (viii) websites anddomain names, (ix) computer software (including source code, executablecode, applets, interfaces, scripts, screen designs, menus and menu structures,design and programming tools, data, databases and related documentation), and (x) allother intellectual property rights of the applicable Person, in each casewhether registered or not and in each case wherever such rights existthroughout the world and including the right to recover for any pastinfringement.

 

“***Purchase Price***”shall have the meaning set forth in Section 2.1(a).

 

“***Purchased Assets***”shall have the meaning set forth in Section 1.1.

 

“***Purchased ConsumableInventory***” shall have the meaning set forth in Section 1.1(d).

 

“***Purchased Contracts***”shall have the meaning set forth in Section 1.1(g).

 

“***Qualified Plans***”shall have the meaning set forth in Section 4.19(c).

 

“***Real Property Leases***”shall mean all leases, subleases, licenses, concessions and other agreements(written or oral), including all amendments, extensions, renewals, guarantiesand other agreements with respect thereto, pursuant to which Realty hold anyLeased Real Property, including the right to all security deposits and otheramounts and instruments deposited by or on behalf of any Seller Party or Realtythereunder.

 

“***Realty***”shall have the meaning set forth in the Preamble.

 

“***Release***”shall have the meaning set forth in Section 6.8.

 

“***Representatives***”shall mean any officer, director, principal, attorney, agent, employee or otherrepresentative.

 

“***Retained Names and Marks***”shall have the meaning set forth in Section 6.13(a).

 

“***Route Trucks***”means Owned Route Trucks and Leased Route Trucks.

 

“***Routes***”shall have the meaning set forth in Section 4.13(a).

 

“***St. Louis Park***”shall mean that certain facility located at St. Louis Park, MN in Exhibit A.

 

“***Saramar***” shallhave the meaning set forth in the Preamble.

 

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“***Sauce Business***”shall mean the business that Richelieu Foods, Inc., acquired from Sellerof manufacturing, processing, packaging, marketing, selling, and distributingsauces and dressing (collectively, “Sauces”) (and not for sale through retailchannels to end user consumers, whether sauces and dressings are soldindividually or as part of any other product manufactured, processed, sold ordistributed to retailers for sale to consumers).

 

“***Sauce Supply Agreement***”shall mean the agreement with Richelieu Foods, Inc. relating to the supplyof sauces and dressings distributed and sold as part of the DSD Sauce Business,and as set forth in Section 3.2(d)(ix).

 

“***Sauces***”shall have the meaning set forth in the definition of Sauce Business.

 

“***Schedule***”shall mean all schedules attached to the Agreement.

 

“***SEC***” meansthe Securities and Exchange Commission.

 

“***Security Agreement***”shall have the meaning set forth in Section 2.1(b).

 

“***Seller***” shallhave the meaning set forth in the Preamble.

 

“***Seller Co-Pack Agreement***”shall have the meaning set forth in Section 3.2(d)(vii).

 

“***Seller ExpenseReimbursement***” shall have the meaning set forth in Section 2.7(a).

 

“***Seller Indemnified Parties***”shall have the meaning set forth in Section 8.3.

 

“***Seller Party***” or“***Seller Parties***” or shall have themeaning set forth in the Preamble.

 

“***Seller Receivables***”shall have the meaning set forth in Section 6.20.

 

“***Seller Trademark LicenseAgreement***” shall have the meaning set forth in Section 3.2(d)(i).

 

“***Seller Transition Services Agreement***”shall have the meaning set forth in Section 3.2(d)(iv).

 

“***Seller’s Promotional Sales***”shall have the meaning set forth in Section 2.7(a).

 

“***Service Trucks***”means Owned Service Trucks and Leased Service Trucks.

 

“***Severance Plans***”shall have the meaning set forth in Section 4.20(d).

 

“***Shared Customers***”means the customers of the DSD Business who purchase and receive the Productsthrough both the DSD Business and NSO Business.

 

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“***Shared Promotional Expense***”shall have the meaning set forth in Section 2.7(a).

 

“***Spare Parts***”shall mean all of the spare parts relating to any Machines.

 

“***Tangible P&E***”shall have the meaning ascribed to it in Section 1.1(b).

 

“***Tax***” or “***Taxes***” means all taxes imposed of anynature including, without limitation, federal, state, local or foreign incometax, alternative or add-on minimum tax, profits or excess profits tax,franchise tax, gross income, adjusted gross income or gross receipts tax,employment-related tax (including, without limitation, employee withholding oremployer payroll tax, FICA or FUTA), real or personal property tax or advalorem tax, sales or use tax, excise tax, windfall profits tax, customsduties, capital stock tax, transfer tax, registration tax, estimated tax, stamptax or duty, any withholding or back up withholding tax, value added tax,severance tax, prohibited transaction tax, premiums tax or occupation tax,together with any interest or any penalty, addition to tax or additional amountimposed by any Governmental Authority responsible for the imposition of any suchtax, whether disputed or not.

 

“***Taxing Authority***”means any Governmental Authority responsible for the imposition of any Tax.

 

“***Third Party Claim***”shall have the meaning set forth in Section 8.4(a).

 

“***Title Company***”shall have the meaning set forth in Section 7.1(d).

 

“***Title Policy***”shall have the meaning set forth in Section 7.1(d).

 

“***Title Report***”shall have the meaning set forth in Section 4.10(a).

 

“***Total Promotional Sales***”shall have the meaning set forth in Section 2.7(a).

 

“***Trademarks***”shall mean trademarks, service marks, brand marks, registrations thereof,pending applications for registration thereof and such unregistered rights withrespect thereto which are used in the business of the applicable Person.

 

“***Trade Names***”shall mean (i) trade names, (ii) brand names, (iii) productnames; and (iv) logos and all other related names and slogans,registrations thereof and such unregulated rights with respect thereto whichare used in the business of the applicable Person.

 

“***Transferred Facilities***”shall mean the Owned Real Property or Leased Real Property to be transferred toBuyer as designated on Exhibit A.

 

***“Unanticipated Changes”***shall have the meaning set forth in Section 6.6(a).

 

“***Vacation Reimbursement***”shall have the meaning set forth in Section 6.2(a).

 

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“***Valuation Methodology***”shall have the meaning set forth in Section 2.6(a).

 

“***Valuation Report Costs***”shall have the meaning set forth in Section 6.4(d).

 

“***Vehicles***”means the Owned Vehicles and Leased Vehicles.

 

“***WARN Act***”shall have the meaning set forth in Section 4.20(c).

 

“***Waiver Request Costs***”shall have the meaning set forth in Section 6.4(c).

 

**(SIGNATURES ON NEXT PAGE)**

 

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The parties hereto have caused this Asset PurchaseAgreement to be duly executed as of the day and year first above written.

** **
| ** ** | **SARA LEE CORPORATION**                         |
|------------|--------------------------------------------------|
| ** ** | ** **                                       |
| ** ** | ** **                                       |
|       | By:                                              |  /s/ Aaron E. Alt |
|       | Name: Aaron E. Alt                               |
|       | Title: Senior Vice  President                    |
|       |                                             |
| ** ** | **SARAMAR, LLC**                                 |
| ** ** | ** **                                       |
| ** ** | ** **                                       |
|       | By:                                              |  /s/ Mark S. Silver |
|       | Name: Mark S. Silver                             |
|       | Title: Vice President  and Assistant Secretary   |
|       |                                             |
| ** ** | **FARMER BROS. CO.**                             |
| ** ** | ** **                                       |
| ** ** | ** **                                       |
|       | By:                                              |  /s/ Roger M. Laverty III |
|       | Name: Roger M. Laverty  III                      |
| ** ** | **Title: President and Chief Executive Officer** |

 

*Signature Page of Sara Lee AssetPurchase Agreement*

 

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**EXHIBIT A**

 

**Facilities**

 

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**EXHIBIT B**

 

**Form of Note**

 

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**EXHIBIT C**

 

**Form of Security Agreement**

 

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**EXHIBIT D**

 

**Form of Seller Trademark LicenseAgreement**

 

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**EXHIBIT E**

 

**Form of Buyer Trademark LicenseAgreement**

 

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**EXHIBIT F**

 

**Form of Superior Trademark LicenseAgreement**

 

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**EXHIBIT G**

 

**Form of Seller Transition ServicesAgreement**

 

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**EXHIBIT H**

 

**Form of Cappuccino and Cocoa TransitionAgreement**

 

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**EXHIBIT I**

 

**Form of Buyer Co-Pack**

 

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**EXHIBIT J**

 

**Form of Seller Co-Pack**

 

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**EXHIBIT K**

 

**Form of Liquid Coffee DistributionAgreement**

 

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**EXHIBIT L**

 

**Form of Green Coffee and Tea PurchaseAgreement**

 

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**EXHIBIT M**

 

**Form of Formula License Agreement**

 

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**EXHIBIT N**

 

**Form of Foreign Investment in RealProperty Tax Act Affidavit**

 

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**EXHIBIT O**

 

**Form of Option Agreement**

 

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**EXHIBIT P**

 

**Historical Financial Statements**

 

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