Document:

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Exhibit 10.2
------------

                        PATIENT PORTAL TECHNOLOGIES, INC.
                        RESTRICTED STOCK GRANT AGREEMENT

         RESTRICTED STOCK GRANT AGREEMENT (the "Agreement"), dated February 6,
2009, between Patient Portal Technologies, Inc., a Delaware corporation (the
"Company"), and Auspicium, LLC, a New York limited liability company (the
"Grantee").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Grantee is a key consultant to the Company; and

         WHEREAS, the Company desires to issue and grant to the Grantee, and the
Grantee desires to accept, shares of the Company's Common Stock, $.001 par value
("Common Shares"), upon the terms and subject to the conditions herein set
forth;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:

1. Grant of Restricted Stock. In recognition of the Grantee's commitment to the
continued growth and financial success of the Company, the Company hereby grants
to the Grantee 2,000,000 (restricted) Common Shares (the "Restricted Stock").
Such Grantee shall have the same rights of any other holder of shares of common
stock of the Company, including the right to receive dividends and to vote the
shares. Simultaneously with the execution and delivery of this Agreement by the
parties hereto, the Company shall deliver to the Grantee a stock certificate (or
certificates) representing the shares of the Restricted Stock, which
certificate(s) shall (a) be registered on the Company's stock transfer books in
the name of the Grantee and (b) bear (in addition to any other legends required
by applicable law) the following legend (or a legend substantially similar
thereto):

         "This certificate and the shares represented hereby are subject to, and
         shall be transferable only in accordance with, the provisions of a
         certain Restricted Stock Grant Agreement dated February 6, 2009 between
         Patient Portal Technologies, Inc. and Auspicium, LLC."

2. Removal of Restricted Stock Legend. Promptly after shares of the Restricted
Stock issued to the Grantee hereunder have become vested, the Company shall
cause the transfer agent for the Common Shares to issue separate Certificates
representing the Common Shares which are free of restrictions and without the
legend referred to above.

3.       Vesting.
         -------

         (a) Beneficial ownership of the restricted stock shall vest in the
Grantee according to the following schedule: One hundred percent (100%) of the
Stock shall vest on the five-year anniversary of this Agreement.

         Notwithstanding the foregoing, 100% beneficial ownership of the
aforementioned shares of Restricted Stock shall vest immediately, without any
action on the part of the Company (or its successor as applicable) or the
Grantee, if any of the following events occur:

                                       1
<PAGE>

              (i)    the death of the Grantee; or

              (ii)   the occurrence of a "Change-in-Control" of the Company (as
                     hereinafter defined).

         (b) For all purposes of this Agreement, the following terms shall have
the following respective meanings:

              (i)    "Change-in-Control" of the Company shall be deemed to have
                     occurred if (A) any "person", (as such term is used in
                     Section 13(d) and 14(d)(2) of the Exchange Act) (but
                     excluding any Grantee benefit plan of the Company and
                     excluding any person who is an Owning Person) is or becomes
                     the "beneficial owner" (as defined in Rule 13d-3 under the
                     Exchange Act), directly or indirectly, of securities of the
                     Company representing 30% or more of the combined voting
                     power of the Company's outstanding securities then entitled
                     ordinarily (and apart from rights accruing under special
                     circumstances) to vote generally for the election of
                     directors; (B) the Board shall approve a sale of all or
                     substantially all of the assets of the Company and its
                     subsidiaries (taken as a whole); or (C) the Board shall
                     approve any merger, consolidation, or like business
                     combination transaction or reorganization of the Company,
                     the consummation of which would result in the occurrence of
                     any event described in clause (A) through (B) above.

              (ii)   "Owning Person" means any person who, on the date of this
                     Agreement, is the beneficial owner of, or, upon the
                     exercise on the date hereof of rights, warrants or options
                     held by such person (and irrespective of whether such
                     rights, warrants or options are then exercisable) would be
                     on the date hereof the beneficial owner of, 5% or more of
                     the Common Stock.

         (c) Upon an event of vesting, the Company shall redeem forty percent of
the shares of stock from the Grantee (800,000), the net proceeds of which will
be adequate to cover any state and / or federal incomes taxes that may be due as
a result of the vesting. The redeemed shares will be valued at the greater of
the then market price of the stock or the price paid by the acquiring entity.

4. Non-Transferability of Restricted Stock. Except as expressly provided in
Section 3 hereof, prior to the vesting date, none of the then unvested shares of
the Restricted Stock (nor any interest therein) may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, shall not be
assignable by operation of law and shall not be subject to execution,
attachment, or similar process. Any attempted sale, assignment, transfer,
pledge, hypothecation or other disposition of any unvested shares of the
Restricted Stock contrary to the provisions hereof shall be null and void and
without effect. The Grantee agrees to the Company and the transfer agent
imposing stop transfer restrictions to enforce this Section 4.

                                       2
<PAGE>

5.       Forfeiture.
         ----------

         (a) Upon the Grantee's voluntary termination of its engagement with the
Company or any of its subsidiaries, or upon the termination of the Grantee's
engagement with the Company or any of its subsidiaries for Cause, which event
occurs, in either case, on a date prior to the vesting date, beneficial
ownership of the unvested shares of the Restricted Stock shall be deemed to have
been forfeited by the Grantee to the Company (a "Forfeiture") without any
consideration therefore. "Cause" shall mean (A) the conviction of the Grantee
for the commission of a felony; or (B) willful and gross misconduct by the
Grantee, that results in material and demonstrable damage to the business or
reputation of the Company. No act or failure to act on the part of Grantee shall
be considered "willful" unless it is done, or omitted to be done, by him in bad
faith or without reasonable belief that its action or omission was in the best
interests of the Company. Any act or failure to act that is based upon authority
given pursuant to a resolution duly adopted by the Board of Directors of the
Company (the "Board"), or the advice of counsel for the Company, shall be
conclusively presumed to be done, or omitted to be done, by the Grantee in good
faith and in the best interests of the Company. The Grantee shall not be deemed
to have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by a majority of the Board
of Directors of the Company at a meeting of such Board of Directors duly called
and held for the purpose of determining whether, in the good faith judgment of a
majority of the Board of Directors of the Company, the Company has "cause" to
terminate the Grantee's engagement pursuant to these provisions.

         (b) Upon the occurrence of a Forfeiture, the Grantee shall, within ten
(10) business days thereafter, transfer and deliver to the Company all stock
certificates representing all shares of the Restricted Stock, together with
stock powers duly executed in blank by the Grantee. From and after the
occurrence of such Forfeiture, the Grantee shall have no rights to or interests
in any shares of the forfeited Restricted Stock or under this Agreement (other
than the obligation to transfer and deliver all stock certificates representing
all shares of the Restricted Stock pursuant to this Section 5(b)).

6. Stock Splits, Etc. If, from time to time during the term of this Agreement:
(i) there is any stock dividend or liquidating dividend of cash and/or property,
stock split or other change in the character or amount of any of the outstanding
securities of the Company, except in the ordinary course of business of issuing
warrants or additional shares of stock to individuals for the purpose of
assisting the company with achieving its business plans or the issuance4 of
shares under a private placement transaction; or (ii) there is any
consolidation, merger or sale of all, or substantially all, of the assets of the
Company; then, in such event, any and all new, substituted or additional
securities or other property to which Grantee is entitled by reason of Grantee's
ownership of the Restricted Stock shall be immediately subject to this Agreement
and be included in the word "Stock" for all purposes with the same force and
effect as the shares of Restricted Stock currently subject to the other terms of
this Agreement.

7.       Registration Rights.
         -------------------

         (a) Piggy Back Registration Rights. If at any time after the vesting
date the Company shall determine to register for its own account or the account
of others under the Securities Act of 1933, as amended (the "Securities Act")
any of its equity securities, other than on Form S-8 or Form S-4 or their then
equivalents relating to shares of Common Stock to be issued solely in connection
with any acquisition of any entity or business or shares of Common Stock
issuable in connection with stock option or other employee benefit plans, it

                                       3
<PAGE>

shall send to the Grantee written notice of such determination and, if within 15
days after receipt of such notice, the Grantee shall so request in writing, the
Company shall use its best efforts to include in such registration statement all
or any part of the Restricted Stock, except that if, in connection with any
offering involving an underwriting of the Company's Common Stock to be issued by
the Company, the managing underwriter shall impose a limitation on the number of
shares of such Common Stock which may be included in the registration statement
because, in its judgment, such limitation is necessary to effect an orderly
public distribution, then the Company shall be obligated to include in such
registration statement only such limited portion of the Restricted Stock with
respect to which the Grantee has requested inclusion hereunder. Any exclusion of
the Restricted Stock shall be made pro rata among all holders of the Company's
Common Stock with similar registration rights seeking to include such shares, in
proportion to the number of such shares sought to be included by such holders.
No incidental right under this Section 7(a) shall be construed to limit any
registration required under Section 7(b). The obligations of the Company under
this Section 7(a) may be waived at any time upon the written consent of the
Grantee and shall expire on the 6th anniversary of this Agreement.

         (b) S-3 Registration Rights. In addition to the rights provided the
Grantee and other holders of the Company's Common Stock with registration rights
in Section 7(a) above, if the registration of the Company's Common Stock under
the Securities Act can be effected on Form S-3 (or any similar form promulgated
by the Commission that permits secondary offerings of securities), then upon the
written request of the Grantee after the vesting date, the Company will, as
expeditiously as possible, use its best efforts to effect registration under the
Securities Act on Form S-3 of all or such portion of the Restricted Stock as the
Grantee shall specify; provided, however, that the Company shall not be required
to effect more than one registration during any 12-month period pursuant to this
Section 7(b).

         (c) The Company will use its best efforts to maintain the effectiveness
for up to 90 days (or such shorter period of time as the underwriters need to
complete the distribution of the registered offering, or one year in the case of
a "shelf" registration statement on Form S-3) of any registration statement
pursuant to which any of the Restricted Stock is being offered, and from time to
time will amend or supplement such registration statement and the prospectus
contained therein to the extent necessary to comply with the Securities Act and
any applicable state securities statute or regulation. The Company will also
provide the Grantee with as many copies of the prospectus contained in any such
registration statement as he may reasonably request.

8. Other Rights. In the event that the Company consummates a transaction for the
sale of a majority of the Common Stock of the Company to a third party, the
Company agrees, upon Grantee's request, to cause Grantee's Restricted Stock to
be acquired by such third party as part of such transaction.

9. Representations and Warranties of Grantee. The Grantee hereby represents and
warrants to the Company as follows:

         (a) The Grantee has the legal right and capacity to enter into this
Agreement and it fully understands the terms and conditions of this Agreement.

                                       4
<PAGE>

         (b) The Grantee is acquiring the Restricted Stock for investment
purposes only and not with a view to, or in connection with, the public
distribution thereof in violation of the Securities Act.

         (c) The Restricted Stock has not been registered with the Securities
and Exchange Commission, is for investment purposes only, and may not be resold
unless registered or pursuant to an exemption from registration. The Restricted
Stock is being issued pursuant to the exemption from registration provided by
Regulation "D" promulgated under the Securities Act of 1933, as amended. The
Restricted Stock is being offered to accredited investors as defined in
Regulation "D", Section 501, and to a limited number of additional investors.
These securities may not be resold or transferred except pursuant to an
effective registration statement under the Act or in accordance with the
provisions of Rule 144. Rule 144 is only available for the Company's stock if a
public trading market exists for the Company's Common Stock. The Company's
Common Stock is presently traded on the OTC Bulletin Board under trading symbol
PPRG. Assuming the continuance of a public market, there can be no assurance as
to the price of the Common Stock of the Company. There is no assurance that the
Company will be in compliance with the requirements of Rule 144 at such time as
Grantee hereunder may be eligible to and may desire to sell their securities, or
that a Registration Statement filed by the Company with respect to such
securities will be declared effective.

10. Notices. Any notice required or permitted hereunder shall be deemed given
only when delivered personally or when deposited in a United States Post Office
as certified mail, postage prepaid, addressed, as appropriate, if to the
Grantee, at 5109 Waterford Wood Way, Fayetteville, NY 13066 or such other
address as he may designate in writing to the Company, and, if to the Company,
at 8276 Willett Parkway, Suite 200, Baldwinsville, NY 13027, or such other
address as the Company may designate in writing to the Grantee.

11. Failure to Enforce Not a Waiver. The failure of the Company to enforce at
any time any provision of this Agreement shall in no way be construed to be a
waiver of such provision or of any other provision hereof.

12. Amendment: Termination. This Agreement may not be amended or terminated
unless such amendment or termination is in writing and duly executed by each of
the parties hereto.

13. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
but one and the same instrument.

14. Benefit and Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Company, its successors and assigns, and the
Grantee, his executors, administrators, personal representatives and heirs. In
the event that any part of this Agreement shall be held to be invalid or
unenforceable, the remaining parts hereof shall nevertheless continue to be
valid and enforceable as though the invalid portions were not a part hereof.

15. Entire Agreement. This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, discussions and understandings with respect to such subject
matter.

                                       5
<PAGE>

16. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal substantive laws of the State of New
York, without giving effect to principles and provision thereof relating to
conflict or choice of laws.

                  [remainder of page intentionally left blank]

                                       6
<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

PATIENT PORTAL TECHNOLOGIES, INC.,              AUSPICIUM, LLC, a New York
a Delaware corporation                          limited liability company

By:  /s/ Kevin J. Kelly                         By:  /s/ Michael J. Lorenz
   --------------------------------                 ----------------------------

Title:  Chief Executive Officer                 Title:  Chief Executive Officer
      -----------------------------                    -------------------------

                                       7

--------------------------------------------------------------------------------Exhibit 10.1

 

EXECUTION VERSION

 

 

ASSET
PURCHASE AGREEMENT

 

BY
AND AMONG

 

SARA
LEE CORPORATION,

 

SARAMAR,
LLC

 

AND

 

FARMER
BROS. CO.

 

DECEMBER
2, 2008

 

 

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

  

 

i

 

	
  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

  

 

ii

 

	
  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

  

 

iii

 

	
  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

  

 

iv

 

SCHEDULES
AND 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

  	
   

  

 

v

 

	
  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

  	
   

  

 

vi

 

	
  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

  	
   

  

 

vii

 

ASSET
PURCHASE 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 limited
liability company (“Saramar”) (Seller and Saramar are sometimes
herein collectively referred to as the “Seller
Parties” and each as a “Seller
Party”), and Farmer Bros. Co., a Delaware corporation (“Buyer”).  Capitalized
terms used herein have the definitions referred to, or set forth in, Article XI.

 

RECITALS:

 

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

 

B.            Seller
owns, directly or indirectly, one hundred percent (100%) of the issued and
outstanding ownership interests of Saramar.

 

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

 

D.            Seller
engages in the manufacturing, processing, packaging, marketing, distributing
and selling of coffee, tea and related products through its DSD Business, NSO
Business and other businesses, each of which uses different methods to
distribute product (which in some instances is the same or similar product) to
customers, many of which purchase product from more than one of these
businesses.

 

E.             The
Seller Parties desire to sell to Buyer, and Buyer desires to purchase from the
Seller 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 assume
the Assumed Liabilities, in each case on the terms and subject to the
conditions hereinafter set forth.

 

Accordingly, for good and valuable consideration, the
receipt 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 the
representations, warranties and agreements and subject to the conditions set
forth 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 encumbrances
whatsoever (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 in
the following 

 

 

items, other than any
Excluded Assets (all of such assets, properties and rights being acquired
hereby are collectively called the “Purchased
Assets”):

 

(a)           DSD Intellectual Property.  (i) The Trademarks and Trade Names
listed on Schedule 1.1(a)-1 attached hereto, including domain names
incorporating the same, in each case whether registered or not, and wherever
such rights exist, subject to the terms of the Buyer Trademark License
Agreement and the Superior Trademark License Agreement, together with the right
to 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)-2
attached hereto, whether registered or not, together with the right to recover
for any past infringement thereof (clauses (i) and (ii) being collectively
called the “DSD Business Marks”), (iii) the Houston Software,
and (iv) all Other Intellectual Property of the Seller Parties that
relates only to the DSD Business or the DSD Business Marks, whether registered
or not, the right to recover for any past infringement thereof, and the right
to protection of interests therein (clauses (i) through (iv) being
collectively called the “DSD Intellectual Property”);

 

(b)           Tangible P&E.  (i) All Owned Vehicles, (ii) all
furniture, fixtures, equipment, machinery, spare parts, tools, supplies and
other tangible personal property, other than Owned Vehicles, owned by Seller
which at Closing are located at, or in transit to, the Transferred Facilities
or on the Vehicles, (iii) all desktop computers which at Closing are located
at or in transit to the Transferred Facilities, and all laptop computers and
hand held computer devices which at Closing are in the possession of Hired
Personnel, and (iv) the AS 400 computer server located at the Houston
Plant (all of the foregoing, other than Consumable Inventory and Brew
Equipment, whether or not exclusively related to the DSD Business, being
collectively called the “Tangible P&E”).  For the avoidance of doubt, Tangible P&E
shall not include desktop computers located at Seller’s Downers Grove, IL
location;

 

(c)           Brew Equipment Inventory.  (i) All Brew Equipment Inventory
distributed by the DSD Business to DSD Customers and in the control of or in
transit 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 the
Brew Equipment Inventory related to Liquid Coffee (it being agreed that such
Brew Equipment Inventory shall include both new Machines and Machines which are
used/awaiting refurbishment in such proportion as Seller owns 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) the
remainder of such Brew Equipment Inventory to be selected from such Brew
Equipment Inventory that is located at or in transit to the Facilities and
Seller’s Washington, PA Facility as of the Closing, and (iii) forty-two
percent (42%) (or such greater percentage as Seller may choose to provide to
Buyer) of the Brew Equipment Inventory that is not related to Liquid Coffee (it
being agreed that such Brew Equipment Inventory shall include both new Machines
and Machines which are used/awaiting refurbishment in such proportion as Seller
owns 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) the
remainder of such Brew Equipment Inventory to be selected from such Brew
Equipment 

 

2

 

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

 

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

 

(e)           Real Estate.  One hundred percent (100%) of the equity
interest of Realty (being all of the equity of Realty) and each parcel of the
Owned 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) the
leases 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 with
respect to the underlying personal property to the extent related to the DSD
Business (clauses (i) through (iii) being collectively called the “Personal Property Leases”);

 

(g)           Contracts.  All Contracts to which either of the Seller
Parties or Realty is a party or is bound which (i) relate exclusively to
the DSD Business or the other Purchased Assets (excluding any individual
employment contracts, collective bargaining agreements, employee welfare and
pension plans, severance plans and related documents); (ii) are Contracts listed in Schedule 1.1(g)-1, such schedule to include the Sauce Supply
Agreement; or (iii) to the extent related to the Hired Personnel, are
collective bargaining agreements and other contracts listed on Schedule 1.1(g)-2
(“Labor Contracts”) (clauses
(i) through (iii) being called the “DSD Contracts”) (said
DSD Contracts, together with the Real Property Leases and the Personal
Property Leases, being collectively called the “Purchased Contracts”);

 

(h)           Permits.  All Permits relating exclusively to the DSD
Business and all Permits relating exclusively to the Transferred Facilities
(regardless of whether the Transferred Facilities relate exclusively to the DSD
Business), to the extent such Permits are transferable and to the extent not
transferred to Realty prior to the Closing;

 

3

 

(i)            Mixed Use Contracts.  The benefits arising after the Closing Date
under the Mixed Use Contracts to the extent such benefits are related to the
DSD 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 the
case of Shared Customers, relating only to DSD Business transactions), business
and marketing plans, creative materials, advertising, promotional materials,
price lists, returned goods records, blueprints, specifications, designs,
drawings, plans, operation or maintenance manuals, bids, invoices, sales
literature, and all other books and records (collectively, “Information”), in each case which relate
exclusively to the DSD Business or DSD Business transactions (but excluding
(A) all Tax returns and all worksheets, notes, files or documents
primarily related thereto, wherever located, (B) all documents prepared in
connection with the transactions contemplated by this Agreement and all minute
books and corporate records of the Seller Parties, (C) all Information of
the Seller Parties which is not related exclusively to the DSD Business or DSD
Business transactions, it being agreed, however, that (i) all Information
relating to Shared Customers to the extent such Information relates to DSD
Business transactions shall be included in the Purchased Assets, and (ii) to
the extent any Seller Party possesses Information which relates to the DSD
Business and any other business operated by such Seller Party, Buyer shall have
access to the portion of such Information relating exclusively to the DSD
Business 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 than
any blueprints, specifications, designs, drawings, plans and operation or
maintenance manuals related exclusively to the Tangible P&E or the
Transferred Facilities; it being agreed, however, that Buyer shall have access
to such Information to the extent set forth in Section 6.9(b), and (E) all
management information systems (other than the Houston Software and the assets
described in Section 1.1(b), subject to Buyer’s right to use the
systems as described in Section 6.15) and (ii) personnel
records relating to Hired Personnel who become employees of Buyer at Closing
(collectively, the “Books and Records”);

 

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

 

(l)            Goodwill.  All goodwill associated with the DSD Business
and DSD Intellectual Property (including goodwill generated both with Exclusive
Customers and Shared Customers to the extent related to DSD Business
transactions);

 

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

 

4

 

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

 

(o)           Closing Routes.  The Closing Routes.

 

1.2.          Limitations on Assignability.  Subject to Section 1.4(b), to the
extent that any of the Purchased Assets are not assignable without the consent
of a third party, neither this Agreement, nor any of the instruments or
documents executed and delivered in connection herewith or contemplated hereby,
shall constitute an assignment or assumption thereof, or attempted assignment
or attempted assumption thereof, if such assignment or attempted assignment, or
assumption or attempted assumption, would constitute a breach thereof.  If there are assignment consents that are not
obtained by the Seller Parties by the Closing Date, the Seller Parties shall
use commercially reasonable efforts (but Seller Parties shall not be required
to pay any third party in exchange for such consent) to obtain all such
consents as soon as reasonably practicable after the Closing Date and
thereafter assign to Buyer such non-assignable Purchased Assets.  Following any such assignment, such assets
shall be deemed Purchased Assets and the liabilities thereunder (to the extent
provided herein) shall be deemed Assumed Liabilities for purposes of this
Agreement.  After the Closing and prior
to obtaining any required consent, the Seller Parties shall cooperate with
Buyer in any reasonable arrangement designed to provide Buyer with the benefits
of the non-assignable Purchased Assets and Buyer shall perform all
corresponding liabilities and obligations of Seller Parties relating thereto to
the extent the same would have been Assumed Liabilities hereunder had the
consent been obtained as of the Closing.

 

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

 

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

 

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

 

5

 

(c)           Certain Tangible Personal Property.  All furniture, fixtures, equipment, desktop
computers, machinery, spare parts, tools, supplies and other tangible personal
property which at Closing are not located at or in transit to a Transferred
Facility or on any Vehicle (other than (A) the Owned Vehicles, (B) laptop
computers and hand held computer devices which at Closing are in the possession
of any Hired Personnel, and (C) the AS 400 computer server located at the
Houston Plant, it being understood that the items in clauses (A) through (C) hereof
shall be included in the Purchased Assets);

 

(d)           Certain Brew Equipment Inventory.  All Brew Equipment Inventory which is not
part of the Purchased Assets.

 

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

 

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

 

(g)           Receivables; Etc.  All accounts receivable and other
receivables, billed and unbilled, and all negotiable instruments, or other
instruments and chattel paper, as are payable to any Seller Party, and all
Claims for refund or credit, including Tax refunds and any other Claims not
part of the Purchased Assets;

 

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

 

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

 

(j)            DSD Management Systems.  Other than the Houston Software and the
assets related to the management information systems described in Section 1.1(b),
(all of which constitute part of the Purchased Assets), the management
information 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 provide
certain 

 

6

 

IT services to Buyer
following the Closing Date pursuant to the terms of the Seller Transition
Services Agreement);

 

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

 

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

 

(m)          Cappuccino and Cocoa; Formulas and
Blends.  The cappuccino and cocoa
recipes and all coffee and other formulas and blends of products sold by the
DSD Business; provided that Buyer will be
entitled to distribute and sell certain of Seller’s cocoa and cappuccino
products pursuant to the terms of the Cappuccino and Cocoa Transition
Agreements and shall have the right to use certain coffee, tea and other
related product formulas set forth on Exhibit A of the Formula
License Agreement which were used by Seller in the DSD Coffee Business or
manufactured in the Houston Plant prior to the Closing Date, pursuant to the
terms of the Formula License Agreement;

 

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

 

(o)           Retained Claims.  Any and all Claims and rights to recovery of
the Seller Parties against any Person, whether now existing or arising in the
future, to the extent related to or arising from or in connection with the DSD
Business 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 this
Agreement and any Additional Documents;

 

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

 

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

 

7

 

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

 

(t)            Websites.  All of Seller’s websites, including each such
site’s content, look and feel, verbiage and images, but not including any
domain names or DSD Intellectual Property (subject to the Buyer Trademark
License Agreement and the Superior Trademark License Agreement) which are part
of the Purchased Assets, it being understood that Buyer operates or will
operate one or more websites using the domain names owned by Buyer which may
contain information of a similar subject matter as one or more of Seller’s
websites;

 

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

 

(v)           Certain
Consumable Inventory.  All Consumable
Inventory located at Seller’s Bensenville, IL distribution center and all green
coffee 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 agree
to discharge and perform when due the following Liabilities of the Seller
Parties (the “Assumed Liabilities”).

 

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

 

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

 

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

 

8

 

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

 

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

 

(f)            Utilities, Taxes, Etc.  Pursuant to Section 2.3, a
pro-rated portion of (i) the real property Taxes for Owned Real Property, (ii) in
the case of the Houston Plant and the Oklahoma City Plant, water, gas,
electricity and other utilities relating to such plants, and (iii) in the
case of all the Purchased Assets, personal property Taxes, plus any additional
amounts which may be due based on actual bills versus amounts estimated
pursuant to Section 2.3 (it being agreed that if Seller paid more
than its pro rata portion based on such estimates, Buyer shall have no refund
obligation 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 shall
not in any way enlarge any of the rights of any third parties relating to any
such Assumed Liability.

 

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

 

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

 

9

 

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

 

ARTICLE II.

PURCHASE PRICE

 

2.1.          Purchase
Price.

 

(a)           The
aggregate purchase price (the “Purchase
Price”) 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 Sections  2.1(b) and
3.1, the Buyer shall pay to Seller an amount (“Closing
Payment”) equal to $45,390,000.00, plus the amount of the Vacation
Reimbursement, if any, plus the balance of any amounts owed to Seller by Buyer
pursuant to Sections 6.4 and 6.15, plus or minus the
following:  the amount of any Estimated
Inventory and Prepaid Excess shall be added and the amount of any Estimated
Inventory 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 the
Closing Date an estimated calculation, which shall be prepared by Seller in
good faith, of the value of the Consumable Inventory to be reflected on the
Closing Inventory Statement and the Prepaid Expenses (itemizing each Prepaid
Expense) which are part of the Purchased Assets (the “Estimated
Inventory and Prepaid Value”). 
The amount by which the Estimated Inventory and Prepaid Value exceeds
$22,000,000.00 shall be called the “Estimated Inventory and
Prepaid Excess” and the amount by which the Estimated Inventory and
Prepaid Value is less than $22,000,000.00 shall be called the “Estimated Inventory and Prepaid Shortfall”.  The Estimated Inventory and Prepaid Value
shall be prepared, with respect to Consumable Inventory in accordance with the
Valuation Methodology described in Section 2.6(a), and with respect
to the Prepaid Expenses which are part of the Purchased Assets, in accordance
with Seller’s Accounting Principles.

 

(b)           The
Closing Payment shall be paid by wire transfer of same day funds to the account
set forth in Schedule 2.1 at Closing, except that if Buyer has not
consummated the Bank Financing as of the Closing Date, then Buyer shall have
the right to pay up to $20,000,000 of the Closing Payment in the form of a
secured promissory note, said note to be payable to Seller in the form attached
hereto as Exhibit B (the “Note”).  The Note shall be secured by the collateral
set 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”).

 

10

 

2.2.          Allocation.  The Purchase Price shall be allocated among
the Purchased Assets as agreed to by the parties; provided that such allocation
shall be subject to necessary adjustments, to be completed and reflected in
such allocation within ten (10) days following the issuance of the Final
Closing Statements, on account of the final Consumable Inventory and Prepaid
Expense Valuation under Section 2.6.  The parties shall file Internal Revenue
Service Form 8594 with the Internal Revenue Service (“IRS”) reflecting such allocation in accordance
with Section 1060 of the Code, and shall agree and ensure that all
federal, state, local and foreign Tax returns which they file reflect such
allocation.  Each party shall promptly
provide the other party with any other information required to complete IRS Form 8594.

 

2.3.          Prorations.

 

(a)           On
the Closing Date, (i) the real property Taxes relating to the Owned Real
Property, (ii) in the case of the Houston Plant and the Oklahoma City
Plant, the water, gas, electricity and other utilities, and (iii) in the
case of all the Purchased Assets wherever located, personal property Taxes,
shall each be prorated between Buyer and Seller effective as of the Closing
Date.  To the extent practicable, utility
meter readings for the Houston Plant and the Oklahoma City Plant shall be
determined as of the Closing Date and, if not available, will be estimated by
the parties.  If the final real property
Tax rate or final assessed value for the current Tax year is not established by
the Closing Date, the prorations shall be made on the basis of ninety-five
percent (95%) of the rate or assessed value in effect for the most current
ascertainable Tax year.  Prorations shall
be made on the principle that Seller shall be responsible for real property
Taxes relating to the Owned Real Property, utilities relating to the Houston
Plant and the Oklahoma City Plant, and personal property Taxes related to the
Purchased Assets allocable to the periods or portions of periods ending on or
prior to the Closing Date, and Buyer shall be responsible for real property
Taxes relating to the Owned Real Property, utilities relating to the Houston
Plant and the Oklahoma City Plant and personal property Taxes related to the
Purchased Assets allocable to the period or portions of periods beginning after
the Closing Date.

 

(b)           With
respect to each personal property tax return required to be filed on or prior
to the Closing Date, Seller shall prepare and file each such tax return
consistent with its past practice.  The
allocation of personal property Taxes between the parties shall be made at
Closing (i) based upon the value of the Purchased Assets (and no other
property) as reflected in the applicable personal property tax return in the
case of returns filed for the year in which the Closing occurs, or (ii) in
the 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) determined
by Seller consistent with its past practices in filing personal property tax
returns (which in no event shall take into account the Purchase Price or any
contrary methodologies advanced by Buyer).

 

(c)           The
prorations and allocations required by this Section 2.3 shall be
made and paid by the parties at the Closing.

 

11

 

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

 

2.5.          Closing
Costs, Transfer Taxes and Fees.

 

(a)           Buyer
and Seller shall each pay fifty percent (50%) of the cost of any transfer
Taxes, sales, use or other Taxes or fees imposed by reason of the transfer of
the Purchased Assets (provided that in no event shall Buyer be liable for any
Tax in respect of income imposed on any of the Seller Parties resulting from
their sale of the Purchased Assets to Buyer), costs of applying for new permits
and obtaining the transfer of existing permits, all fees and costs of recording
or filing all conveyancing instruments, all fees and costs of obtaining title
insurance 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 form
Title Policy exception for matters shown by survey (which title insurance fees
and costs shall not exceed $50,000.00 in the aggregate, it being agreed that
Buyer shall be liable for one hundred percent (100%) of title insurance fees
and costs in excess of $50,000.00), and the fees and costs of recording or
filing all UCC termination statements and other releases of Liens other than
Permitted Liens (but not the amount of such Liens).  For the avoidance of doubt, Buyer and Seller
shall each pay fifty percent (50%) of the cost of any transfer, sales, use or
other Taxes or fees imposed by reason of the transfer of the Leased Real
Property to Realty.  Notwithstanding
anything to the contrary herein, Seller shall not be liable for the
administrative cost of transferring title (tags only) imposed in connection
with registering any Vehicles with any Governmental Authority in the name of
Buyer following the Closing, it being understood, however, that the costs of
all other transfer Taxes, sales, use or other Taxes or fees imposed by reason
of 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 returns
required by reason of said transfer shall be timely prepared and filed by the
party normally obligated by Applicable Law to make such filing.  The parties agree to cooperate with each
other in connection with the preparation and filing of such returns, in
obtaining all available exemptions from such sales, use and transfer Taxes, and
in timely providing each other with resale certificates and any other documents
necessary to satisfy any such exemptions.

 

(b)           If
any party (or any of its Affiliates) pays any Tax or fee required to be shared
by the parties or paid by the other party under Section 2.5(a), the
owing party shall promptly (within twenty (20) days) reimburse the paying party
for the amounts so owed.  If any party
(or any of its Affiliates) receives any refund or credit of any Tax or fee to
which another party is entitled under Section 2.5(a), the receiving
party shall promptly (within twenty (20) days) pay such amounts to the party
entitled thereto.

 

12

 

2.6.          Post-Closing
Consumable Inventory and Prepaid Expense Adjustment.

 

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

 

(b)           Buyer
shall, within thirty (30) days after the delivery by Seller of the Closing
Statements, complete its review thereof. 
After delivery of the Closing Statements, Seller shall make available to
Buyer its auditors and Representatives, upon reasonable advance notice and
during normal business hours, all books, records, work papers, personnel
(including their accountants and employees) and other materials and sources
used by Seller to prepare the Closing Statements.  The Closing Statements shall be binding and
conclusive upon, and deemed accepted by, Buyer unless Buyer shall have notified
Seller in writing within thirty (30) days after delivery of the Closing Statements
of any good faith objection thereto (the “Buyer’s Objection”).  The Buyer’s Objection shall set forth a
description of the basis of Buyer’s Objection and the adjustments to the value
of Purchased Consumable Inventory reflected on the Closing Statements or
adjustments to the Prepaid Expenses reflected on the Prepaid Statement which
Buyer believes 

 

13

 

should be made.  Any items not
disputed during the foregoing thirty (30) day period shall be deemed to have
been accepted by Buyer.

 

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

 

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

 

(e)           Within
five (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 interest
thereon at the rate of three percent (3%) per annum shall be paid by wire transfer
of 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 any
Adjustment Payment is owed to Buyer, then in lieu of a wire transfer of the
Adjustment Payment to Buyer, the Note shall be reduced by the amount of such
Adjustment 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 then
the balance to the principal amount of the Note.  The Adjustment Payment shall be the
difference, if any, between (x) the value of Purchased Consumable
Inventory and Prepaid Expenses, as reflected on the Final Closing Statements,
minus (y) the Estimated Inventory and Prepaid Value.  The Adjustment Payment, if any, shall be
payable by Buyer to Seller, if positive, and by Seller to Buyer, if negative.

 

14

 

2.7.          Promotional
Expense Proration.

 

(a)           No
later than fifteen (15) days after Buyer notifies Seller of a Promotional
Expense that relates to periods that extend both before and after the Closing
Date (a “Shared Promotional Expense”), Buyer and
Seller shall meet to determine the amount of such Shared Promotional Expense
allocable to the period on or prior to the Closing Date (a “Seller Expense Reimbursement”).  Seller and Buyer shall cooperate in good
faith in an effort to reach agreement upon the amount of a Seller Expense
Reimbursement within ten (10) days of the initial meeting of Buyer and
Seller with respect to such Seller Expense Reimbursement.  The Seller Expense Reimbursement due with
respect to any Shared Promotional Expense shall be computed by multiplying (A) the
ratio of the Seller’s Promotional Sales over the Total Promotional Sales by (B) the
Shared Promotional Expense in question. 
For purposes of this Section 2.7, the term “Seller’s Promotional Sales” means the sales of the DSD
Business on or prior to the Closing Date that were attributable to the Shared
Promotional Expense in question, and the term “Total
Promotional Sales” means the total sales for the period attributable
to the Shared Promotional Expense in question.

 

(b)           In
the event that Seller and Buyer are unable to reach an agreement on the Seller
Expense Reimbursement within twenty (20) days of the initial meeting of Buyer
and Seller with respect to such Seller Expense Reimbursement, they shall refer
the calculation of the Seller Expense Reimbursement to the CPA Firm for
decision, which decision shall be final and binding on the parties.  Any expenses relating to the engagement of
the CPA Firm shall be shared equally by Seller, on the one hand, and Buyer, on
the other hand.  Seller and Buyer shall
each bear the fees of their respective auditors and other representatives incurred
in connection with the determination and review of the Seller Expense
Reimbursement.  Buyer and Seller shall
instruct the CPA Firm not to assign a value to the Seller Expense Reimbursement
greater than the greatest value for such item assigned to it by Buyer, on the
one hand, or Seller, on the other hand, or less than the smallest value for
such item assigned to it by Buyer, on the one hand, or Seller, on the other
hand.  Buyer and Seller shall also
instruct the CPA Firm to make its determination based solely on the
presentations of Buyer and Seller that are in accordance with the guidelines
and procedures set forth in this Section 2.7 (i.e., not on the
basis of an independent review).

 

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

 

15

 

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

 

ARTICLE III.

CLOSING

 

3.1.          The
Closing.  Subject to Article VII,
the exchange of documents required to consummate the transactions contemplated
by 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 (determined
pursuant to Section 2.1) shall be tendered by Buyer to Seller by
wire transfer of same day funds at such time as federally insured financial
institutions open for business on Monday, February 2, 2009, in New York,
New York, and the Note, if applicable, shall be physically tendered to Seller
or its representatives by 9:00 a.m., central standard time, on Monday, February 2,
2009, at the offices of Sonnenschein Nath & Rosenthal LLP, located in
Chicago; provided further, however,
that such transactions may occur on such other dates, times or places as agreed
to in writing by Buyer and Seller.

 

3.2.          Seller
Parties’ Closing Deliveries.  Subject
to the conditions set forth in this Agreement and to Section 1.2,
at the Closing, simultaneous with Buyer’s deliveries hereunder, the Seller
Parties shall deliver or cause to be delivered to Buyer the following
documents, certificates and instruments, all in form and substance reasonably
satisfactory to Buyer and its counsel.

 

(a)           Realty
Equity Interests.  Assignment of
membership interests (and a certificate issued in the name of Buyer in the
event that such membership interests are certificated) evidencing the transfer
of all the right, title and interest in and to all of the equity interest in
Realty to Buyer.

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

(v)           A Cappuccino and Cocoa
Transition Agreement with each of Seller’s two manufacturers pursuant to which
Seller’s designees may supply to Buyer certain cappuccino and cocoa products on
the terms set forth therein (each a “Cappuccino and Cocoa
Transition Agreement”), substantially in the form attached hereto as
Exhibit H (and subject to any reasonable modifications required by
said manufacturers);

 

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

 

(vii)         A Co-Pack Agreement
pursuant to which Seller will co-pack for Buyer at the St. Louis Park,
Moonachie and Harahan Facilities to be retained by Seller, for Buyer’s
operation of the DSD Business, certain varieties of roast and ground coffee and
related 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;

 

17

 

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

 

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

 

(x)            A Formula License
Agreement pursuant to which Seller will license to Buyer certain coffee, tea
and other related product formulas set forth on Exhibit A to such
agreement which were used by Seller in the DSD Coffee Business or manufactured
in the Houston Plant prior to the Closing Date (“Formula
License Agreement”), substantially in the form attached hereto as Exhibit M.

 

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

 

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

 

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

 

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

 

(iv)          a special warranty deed
conveying 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 an
Affiliate of Seller.

 

(f)            Certificate.  The following certificates:

 

(i)            a certificate executed
by an officer of each Seller Party and Realty certifying in such officer’s
official capacity and not in his or her individual capacity, the organizational
documents and resolutions of the board of directors (or equivalent managing
body, as applicable) authorizing the execution and delivery of this Agreement,
Additional Documents and the consummation of transactions contemplated hereby
and thereby;

 

(ii)           an incumbency
certificate from each Seller Party and Realty;

 

18

 

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

 

(iv)          a certificate executed
by an officer of each Seller Party certifying in such officer’s official
capacity and not in his or her individual capacity, that (i) the
representations and warranties of the Seller Parties contained herein are true
and 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 of
such Changes and updates shall be as set forth in Section 6.6(a)),
and (ii) the Seller Parties have performed and complied in all material
respects with all of the agreements and covenants to be performed or complied
with by them prior to and as of the Closing Date.

 

(g)           Right
of First Opportunity.  An agreement
in the form of Exhibit O duly executed by Seller, pursuant to which
Buyer has the opportunity to acquire certain parcels of real property adjacent
to the Houston Plant (“Option Agreement”).

 

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

 

(i)            Real
Property Lease Assignment.  An
Assumption and Assignment duly executed by Seller assigning the Real Property
Leases to Realty and accepted by Realty.

 

(j)            Security
Agreement.  A counterpart of the
Security Agreement, if applicable, executed by Seller.

 

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

 

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

 

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

 

(c)           Officer’s
Certificate.  A certificate executed
by an officer of Buyer certifying in such officer’s official capacity and not
in his or her individual capacity, the Organizational 

 

19

 

Documents and resolutions
of the Board of Directors of Buyer authorizing the execution and delivery of
this Agreement and the Additional Documents, and the consummation of
transactions contemplated hereby and thereby.

 

(d)           Bring-Down
Certificate.  A certificate executed
by an officer of Buyer certifying in such officer’s official capacity and not
in his or her individual capacity, that (i) the representations and
warranties of Buyer contained herein are true and 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, and (ii) Buyer has performed
and complied in all material respects with all of the agreements and covenants
to be performed or complied with by it prior to and as of the Closing Date.

 

(e)           Incumbency
Certificate.  An incumbency
certificate from Buyer.

 

(f)            Insurance
Certificate.  A certificate issued by
Buyer’s insurance carrier (or its agent) evidencing that the insurance
coverages described in Section 6.10 are in full force and effect.

 

(g)           Assumption
of Liabilities Agreement.  An
agreement whereby Buyer assumes and agrees to pay, defend, discharge and
perform when due each of the Assumed Liabilities.

 

(h)           Right
of First Opportunity.  The Option
Agreement, duly executed by Buyer.

 

(i)            Security
Agreement.  A counterpart of the
Security Agreement, if applicable, duly executed by Buyer, together with all
instruments, transfer powers and other items required to be delivered in
connection therewith.

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Subject to the disclosures set forth in the Schedules
to this Agreement, Seller hereby represents and warrants to Buyer as set forth
below as of the date hereof and, subject to Permitted Stipulated Updates
pursuant to Section 6.6(a), as of the Closing Date.  The disclosure of information in any Schedule
shall qualify all representations and warranties to the extent such information
is sufficiently clear to communicate the representations and warranties which
it qualifies.  The disclosure of any item
or information in any Schedule shall not be construed as an admission that such
item or information is required to be disclosed or is material to the DSD Business
or any representation or warranty made by Seller.  Information may be set forth in Schedules for
informational purposes only and the Schedules do not necessarily include other
matters of a similar nature.

 

4.1.          Corporate
Organization.  Each Seller Party and
Realty is duly organized, validly existing and in good standing under the laws
of the state of its organization and in each other jurisdiction in which the
ownership and leasing of its properties and assets or the conduct of its 

 

20

 

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

 

4.2.          No
Violation.  The execution, delivery
and performance by either Seller Party of this Agreement and the other Additional
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby do not and will not, (a) conflict with or
result in any violation of, or constitute a breach of any provision of the
charter document or bylaws or operating or limited liability company agreement
of such Seller Party or Realty, (b) except for consents and approvals set
forth in Schedule 4.2, conflict with, result in a violation of or
constitute a breach or default (or an event which, with notice or lapse of time
or 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 or
Real Property Lease, (c) violate any Applicable Law, or (d) impose
any Lien, restriction or charge on the Purchased Assets, including the
Transferred Facilities or the DSD Business, except for Liens, restrictions or
charges that would not, individually or in the aggregate, result in a Material
Adverse Effect.

 

4.3.          Authority.  Each Seller Party has full power and
authority to enter into this Agreement and the other Additional Documents to
which it is a party and to consummate the transactions contemplated hereby and
thereby, 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 the
transactions contemplated hereby and thereby and the performance of Seller
Parties’ obligations hereunder and thereunder have been duly authorized by the
Seller Parties, and no other proceedings on the part of Seller Parties are
necessary to authorize such execution, delivery and performance.  This Agreement and the other Additional
Documents to which any Seller Party is a party have been or will be duly and
validly executed and delivered by each such Seller Party and, assuming the due
execution and delivery of this Agreement and the Additional Documents by the
other parties thereto, constitute or will constitute valid and binding legal
obligations of each Seller Party to the extent a party thereto, enforceable
against each such Seller Party to the extent a party thereto in accordance with
their respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights in general and subject to
general principles of equity and the discretion of courts in granting equitable
remedies.

 

21

 

4.4.          Realty.

 

(a)           Upon
consummation of the transactions contemplated by this Agreement, Buyer will
acquire good and valid title free and clear of all Liens to the equity
interests of Realty, which represents 100% of the equity of Realty.  The membership interests of Realty have been
duly authorized and validly issued and are fully paid and non-assessable.  There are no outstanding options, warrants or
other rights exercisable for the purchase of, or securities convertible into,
any equity interests of Realty or any agreements, contracts or commitments
relating to the issuance, sale, transfer, redemption, acquisition or voting of
any equity interests of Realty.  The
membership interests of Realty to be transferred to Buyer hereunder are the
only issued and outstanding equity interests of Realty.  Schedule 4.4 sets forth a true,
correct and complete statement of the capitalization of Realty.

 

(b)           Realty
has not engaged in any business other than owning the Real Property Leases and
operating the Leased Real Property and has no Liabilities other than those
which constitute Assumed Liabilities in Section 1.4.

 

4.5.          Compliance
with Laws.  Except as set forth on Schedule 4.5,
to Seller’s knowledge, the DSD Business and the Transferred Facilities are
being, and during the thirty-six (36) month period prior to the date hereof
have been, conducted and operated, and the Consumable Inventory has been
produced, in compliance with all Applicable Laws, except for those failures to
comply which would not, individually or in the aggregate, have a Material
Adverse Effect or those failures that have been cured by Seller.  During the thirty-six (36) month period prior
to the date hereof, neither Seller Party has received written notification from
any Governmental Authority asserting that the conduct of the DSD Business, the
operation of the Transferred Facilities or the production of the Consumable
Inventory is not in compliance with any Applicable Law, except for those
failures to comply which would not, individually or in the aggregate, have a
Material Adverse Effect or any instances of noncompliance which have been cured
by Seller.

 

4.6.          Financial
Statements and Condition.  Seller has
delivered to Buyer a copy of the unaudited pro forma statements of operations
of the DSD Business for the twelve (12) month period ended June, 28, 2008, and
the 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 were
not prepared as part of Seller’s normal reporting process.  Instead, the Financial Statements have been
compiled by management of the DSD Business from source documentation subject to
the controls and procedures of Seller’s accounting systems.  This source documentation was prepared in
accordance with accounting principles set forth on Schedule 4.6-1
(the “Accounting Principles”) except that no allocation of cost
has been made to reflect Seller’s corporate overhead, general and
administrative expenses and services. 
Except as set forth on Schedule 4.6-2 or in the Financial
Statements, the Financial Statements (a) have been prepared in conformity,
in all material respects, with the Accounting Principles, and (b) present
fairly, in all material respects, the results of operations of the DSD Business
(other than the Excluded Assets and the Excluded Liabilities) for the time
period specified therein.  Except as set
forth on Schedule 4.6-3, the definition of the term “DSD 

 

22

 

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

 

4.7.          Consents
and Approvals.  Except as set forth
on Schedule 4.7, no filing or registration with, no notice to and
no permit, authorization, consent, approval or waiver, of any Governmental
Authority is necessary to be made by any of the Seller Parties or Realty in
connection with the execution, delivery or performance of this Agreement or the
Additional Documents by Seller Parties or the consummation by Seller Parties of
the transactions contemplated by this Agreement or the Additional Documents.

 

4.8.          Absence of Certain Changes or
Events.

 

(a)           Except
(i) with respect to matters relating to the proposed sale of the Purchased
Assets and the DSD Business, (ii) for general economic conditions and
conditions 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 any
development, individually or in the aggregate, which would reasonably be
expected to cause, any material adverse change in the financial condition,
business, assets, liabilities, results or operations of the DSD Business, taken
as a whole, or the ability of any Seller Party to execute, deliver and perform
this Agreement and the other Additional Documents to which it is a party
(collectively, “Material Adverse Effect”).  For the avoidance of doubt, and without
limiting the foregoing, Material Adverse Effect shall not include continuation
of the downward trend in sales and financial performance of the DSD Business in
a manner consistent with historic trends during the past three (3) years.

 

(b)           Without
limiting the foregoing, except as set forth in Schedule 4.8(b) and
except with respect to matters not inconsistent with this Agreement and the
Additional Documents relating to the proposed sale of the Purchased Assets and
the DSD Business (including the separation of the DSD Business from the other
businesses of the Seller Parties), since September 27, 2008, (i) the
Seller Parties have conducted the DSD Business in the ordinary course, and (ii) there
has not been any sale or other disposition, except in the ordinary course of
the DSD Business, of any assets of the DSD Business, or any Liens (other than
Permitted Liens) placed on the assets of the DSD Business.

 

4.9.          Payment
of Taxes.  Except as set forth on Schedule 4.9,
Seller has filed all Business Returns required to be filed (or obtained an
extension with respect thereto) with respect to the DSD Business, except for
those failures to file or obtain an extension which would not, individually or
in 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, all
Taxes shown to be due on such Business Returns, all Tax assessments related to
such Business Returns received, and all Taxes related to such Business Returns
which have or may become due under Applicable Law with respect to all periods
or portions thereof ending on or prior to the Closing 

 

23

 

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 such
Business Return which has not since been filed. 
Except as set forth on Schedule 4.9, Seller has not received
written notice of any claim by any Taxing Authority in any jurisdiction where
it does not file Tax returns or pay Taxes that it is or may be subject to Tax
by that jurisdiction solely as a result of its ownership or operation of the
DSD Business.

 

4.10.        Owned
Real Property.

 

(a)           A
copy (including copies of all documents related to the exceptions listed
therein) of a preliminary report with respect to each parcel of Owned Real
Property (the “Title Report”) has been
previously provided to Buyer.  There is
no pending or, to Seller’s knowledge, threatened condemnation or other form of
eminent domain proceeding against all or any portion of the Owned Real
Property.  None of the Owned Real
Property is subject to any commitment, right of first refusal or other
arrangement for the sale, transfer or lease thereof to any third party.

 

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

 

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

 

(a)           at
Closing such Real Property Lease will be valid and binding upon Realty and, to
the knowledge of Seller, enforceable against the other parties thereto in
accordance with its terms;

 

(b)           none
of the Seller Parties, Realty or the DSD Business is in breach of or default
under such Real Property Lease and, except for breaches or defaults caused by
the sale of the Purchased Assets to Buyer and Seller’s performance hereunder,
no event has occurred or circumstance exists which, with the delivery of
notice, the passage of time or both, would constitute such a breach or default,
or permit the termination, modification or acceleration of rent under such Real
Property Lease, except where such breach or default would not, individually or
in the aggregate, have a Material Adverse Effect;

 

(c)           none
of the Seller Parties, Realty or the DSD Business owes, or will owe in the
future, any brokerage commissions or finder’s fees with respect to such Real
Property Lease;

 

24

 

(d)           the
other party to such Real Property Lease is not an Affiliate of any of the
Seller Parties;

 

(e)           none
of the Seller Parties or Realty has subleased, licensed or otherwise granted
any person or entity the right to use or occupy such Leased Real Property or
any portion thereof;

 

(f)            none
of the Seller Parties or Realty has collaterally assigned or granted any Lien
in such Real Property Lease or any interest therein; and

 

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

 

4.12.        Tangible
Personal Property.  The tangible
personal property, including the Tangible P&E and the Owned Vehicles,
included in the Purchased Assets is owned by Seller, free and clear of all
Liens 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 prior
to Closing.  Schedule 4.12-2
contains an accurate and complete list of each item of Tangible P&E (other
than 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 $25,000.00
as of such date.

 

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

 

(a)           Schedule 4.13-1
sets forth an accurate and complete list of all routes used in the DSD Business
as of October 9, 2008 (collectively, the “Routes”).  An accurate and complete list of the Owned
Vehicles used in the DSD Business as of October 24, 2008, is attached
as Schedule 4.13-2.  Since September 27, 2008,
other than in the ordinary course of the DSD Business, Seller has not changed
routes of the DSD Business or disposed of any Vehicles.  The Routes, as changed by Seller prior to the
Closing 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 4.13-3
is an accurate and complete list of each Personal Property Lease involving the
payment by Seller of lease payments that in the aggregate exceed $25,000 per
calendar year.  Seller has provided Buyer
with correct and complete copies of all Personal Property Leases listed on Schedule 4.13-3.  Except as set forth on
Schedule 4.13-4, (i) each Personal Property Lease is valid and
binding upon the Seller Party who is a party thereto, and, to the knowledge of
Seller, enforceable against the other parties thereto in accordance with its terms,
except where the failure of such Personal Property Lease to be valid, binding
or enforceable would not, individually or in the aggregate, have a Material
Adverse Effect or such failures that have been cured by Seller, (ii) to
the knowledge of Seller, none of the Seller Parties or the DSD Business is in
breach of or default under such Personal Property Lease, and, except for
breaches or defaults caused by the acquisition of the Purchased Assets by Buyer
and Seller’s performance under this Agreement, no event has occurred or
circumstance exists which, with the delivery of notice, the passage of time or
both, would constitute such a breach or default by 

 

25

 

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

 

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

 

(d)           Schedule 4.13-6
contains an accurate and complete list of Promotional Accruals relating
exclusively 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, or
proceedings, including Products Liability Claims (collectively, “Claims”),
pending or, to the knowledge of Seller, threatened, before any Governmental
Authority, or before any arbitrator of any nature, brought by or against any
Seller Party or Realty involving, affecting or relating to (a) the DSD
Business, the Purchased Assets, or the transactions contemplated by this
Agreement or the other Additional Documents, (b) seeking to enjoin or
rescind the transactions contemplated by this Agreement or the Additional
Documents or (c) otherwise preventing Seller Parties from complying with
the terms and provisions of this Agreement and the Additional Documents.  None of the DSD Business or the Purchased
Assets is subject to any Judgment.  To
Seller’s knowledge, none of the Claims set forth in Schedule 4.14
are expected to have a Material Adverse Effect.

 

4.15.        Intellectual
Property.  To Seller’s knowledge, no
DSD Intellectual Property has been registered with any Governmental Authority
other than as set forth on Schedule 4.15.  For each registered DSD Business Mark, Schedule
4.15 lists the jurisdiction of registration and the applicable application,
registration or serial number.  Except as
set forth on Schedule 4.15, the Seller Parties own all right, title
and interest in and to all of the DSD Business Marks in the United States free
and 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 or
similar 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 to
use any of the DSD Business Marks. 
Except as set forth on Schedule 4.15, no Seller Party is
subject to any Judgment, nor have any of them entered into or become a party to
any Contract, in either case which restricts or impairs the ability of any
Seller Party to use, exploit, assert or enforce any of the DSD Business Marks
anywhere in the United States.  To the
knowledge 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 Intellectual
Property does not infringe (directly, contributorily, by inducement or
otherwise), misappropriate or otherwise violate any Proprietary Rights of any
third party.  Seller Parties have not
received any written charge, complaint, claim, demand or notice alleging any
such interference, infringement, misappropriation or violation (including any
claim that the DSD 

 

26

 

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

 

4.16.        Permits.  To Seller’s knowledge, Seller or Realty
possess the Permits set forth on Schedule 4.16-1.  To the knowledge of Seller, the Permits set
forth on Schedule 4.16-1 include all of the Permits necessary for
Seller and Realty to own and operate the DSD Business as conducted by them as
of the Closing Date, except for those Permits the failure of which to possess
would not, individually or in the aggregate, have a Material Adverse Effect.  The DSD Business and the Transferred
Facilities are operated in compliance with, all Permits, except for those
failures to comply which would not, individually or in the aggregate, have a
Material Adverse Effect.  All of the
Permits listed on Schedule 4.16-1 are in full force and effect, and
no Seller Party has received during the past three (3) years any written
notice to the contrary except as set forth on Schedule 4.16-2.

 

4.17.        Contracts.

 

(a)           Set
forth in Schedule 4.17(a) is an accurate and complete list of
all Material Contracts other than those specifically identified in another
Schedule to this Agreement.  The Seller
Parties have delivered or made available to Buyer a correct and complete copy
of each Material Contract and all amendments thereto.  The term “Material
Contract” means each of the following Contracts relating to the DSD
Business which are either Purchased Contracts or Mixed Use Contracts (other
than Contracts for the purchase by Seller of green coffee, tea, Liquid Coffee 

 

27

 

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

 

(i)            Any Contract (or group of related
Contracts) for the purchase or sale of commodities, supplies, products or other
personal property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one year or that
involves expenditures or receipts of the DSD Business in excess of $87,500
annually and which cannot be terminated on sixty (60) or less days notice
without penalty;

 

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

 

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

 

(iv)          Any Contract that contains covenants
that 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 related
Contracts) involving annual revenues of more than $87,500 under which Seller
has granted price protection provisions;

 

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

 

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

 

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

 

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

 

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

 

(xi)           Any collective bargaining agreement
relating to the DSD Business;

 

28

 

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

 

(xiii)         Any Contract under which it has
advanced or loaned any amount to any of the employees of the DSD Business
outside 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, or
accept delivery of, product at future times at fixed prices;

 

(xv)         Any Contract that is a joint venture
agreement;

 

(xvi)        Any Contract (or group of related
Contracts) that involves receivables of the DSD Business in excess of $87,500
annually 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 the
foregoing.

 

(b)           Except
as set forth on Schedule 4.17(b), with respect to each of the DSD
Contracts, (i) such DSD Contract is valid and binding upon the Seller
Party who is a party thereto or Realty, as the case may be, and, to the
knowledge of Seller, enforceable against the other parties thereto in
accordance with its terms, except to the extent that any failure of such DSD
Contract to be valid, binding or enforceable would not, individually or in the
aggregate, have a Material Adverse Effect, (ii) none of the Seller Parties
or Realty is in breach of or default under such DSD Contract and, except for
breaches or defaults caused by the sale of the Purchased Assets to Buyer and
Seller’s performance hereunder, no event has occurred or circumstance exists
which, with the delivery of notice, the passage of time or both, would
constitute a breach or default, or permit the termination, modification or
acceleration of any obligation under such DSD Contract, except where such
breach or default would not, individually or in the aggregate, have a Material
Adverse Effect, and (iii) to the knowledge of Seller, no other party to
any DSD Contract is in breach thereof or default thereunder, except to the
extent that any such breach would not, individually or in the aggregate, have a
Material Adverse Effect.

 

4.18.        No
Other Agreement.  Other than for
sales of assets in the ordinary course of the DSD Business, none of the Seller
Parties or Realty, or any of their respective Affiliates or Representatives,
has any commitment or legal obligation, absolute or contingent, to any other
Person other than Buyer, to sell, assign, transfer or effect a sale or other
disposition of any of the Purchased Assets or the DSD Business.

 

29

 

4.19.        Employee
Plans.

 

(a)           Schedule 4.19(a) lists
each material plan, agreement, arrangement or policy providing for
compensation, bonuses, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation, vacation benefits,
insurance (including any self-insured arrangements), health or medical
benefits, employee assistance program, disability or sick leave benefits,
workers’ compensation, supplemental unemployment benefits, change in control
benefits, 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 ERISA
Affiliates for the benefit of any Hired Personnel (each, individually, an “Employee Plan” and collectively, the “Employee
Plans”).

 

(b)           With
respect to each of the Employee Plans that is not a Multiemployer Plan, Seller
has made available to Buyer:  (i) a
true, correct and complete copy of such Employee Plan, (ii) the most
recent 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 the
current summary plan description and any material modifications thereto for
each Employee Plan that is not a Multiemployer Plan in respect of which there
exists a summary plan description.

 

(c)           Schedule 4.19(c) identifies
each Employee Plan intended to be a “qualified plan” within the meaning of Section 401(a) of
the Code (“Qualified Plans”).  Each Qualified Plan has received a favorable
determination letter from the IRS or is a prototype plan that has received a
favorable opinion letter from the IRS, and any such IRS letter has not been
revoked.

 

(d)           Except
as would not reasonably be expected to have a Material Adverse Effect, Seller
has timely made or accrued all contributions required with respect to any
Qualified Plan.

 

(e)           Except
as would not be reasonably expected to have a Material Adverse Effect, the
Seller Parties and their ERISA Affiliates have performed and complied with all
of their obligations under or with respect to the Employee Plans and each
Employee Plan that is not a Multiemployer Plan has been operated in all
material respects in accordance with its terms and in compliance with all
Applicable Laws including the Code and ERISA, and to Seller’s knowledge, each
Multiemployer Plan has been operated in all material respects in accordance
with its terms and in compliance with all Applicable Laws including the Code
and ERISA.  There are no pending or, to
Seller’s knowledge, threatened claims or proceedings relating to the Employee
Plans that are not Multiemployer Plans, other than routine claims for benefits
that have not resulted in any pending or, to Seller’s knowledge, threatened
litigation.  Neither the Seller Parties
nor their ERISA Affiliates have engaged in a transaction with respect to any
Employee Plan that, assuming the taxable period of such transaction expired as
of the date hereof, would be reasonably expected to subject Seller to a tax or
penalty imposed by Sections 4975 through 4980 of the Code or
Sections 502(i) or 502(l) of ERISA in an amount which would have
a Material Adverse Effect.  There are no
material audits, inquiries or proceedings pending or, to Seller’s 

 

30

 

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

 

4.20.        Labor
and Employee Matters.

 

(a)           Except
as set forth in Schedule 4.20(a), Seller is not a party to, or
otherwise bound by, a collective bargaining agreement (or any other agreement
with any labor organization), which covers any of the Hired Personnel.  To Seller’s knowledge, no labor unions or
other organizations have filed a petition within the last 6 months with the
National Labor Relations Board or any other Governmental Authority seeking
certification as the collective bargaining representative of any employees of
the DSD Business.  To Seller’s knowledge,
no labor union or organization is currently engaged in any organizing activity
with respect to any employees of the DSD Business.  During the past two (2) years, the DSD
Business has not experienced any material work stoppage, labor dispute,
grievance, slowdown, lockout or strike, and to the knowledge of Seller, none
has 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 Business
pending before the National Labor Relations Board or any other Governmental
Authority.

 

(b)           Schedule 4.20(b) lists
all DSD Employees as of October 27, 2008, and for each such employee
the:  (i) job position; (ii) job
location; (iii) classification as full-time or part-time as of November 13,
2008; (iv) classification as exempt or non-exempt under applicable state
or federal overtime regulations; (v) current hourly rate of compensation
or base salary (as applicable); (vi) eligible vacation; and (vii) the
original date of hire.  The last pay
review day for DSD employees not covered by a Labor Contract is September 1,
2008.  For DSD Employees covered by a
Labor Contract, the applicable Labor Contract includes the effective date of
any pay rate changes.  Schedule 4.20(b) describes
Seller’s policies for scheduling hours of work per week for DSD Employees who
are non-exempt and part-time employees.  Schedule
4.19(a) lists the Employee Plans that provide to DSD Employees other
compensation or allowance and target incentive compensation (commission and/or
bonus, as applicable).  In addition, to
the extent any DSD Employees are on leaves of absence as of October 27,
2008, Schedule 4.20(b) indicates the category of such leave of
absence and an estimate of each such employee’s anticipated date of return to
active employment.  To Seller’s
knowledge, no executive, key employee or group of DSD Employees listed on Schedule 4.20(b) has
indicated any plans to terminate employment with the Seller before or with
Buyer promptly after the Closing.  Schedule
4.20(b) shall be updated and provided to Buyer as of the Closing Date
and the information provided by Seller to Buyer as described in Section 3.2(h)(i) above
shall be accurate as of the Closing Date with respect to the DSD Employees as
of such date.

 

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

 

31

 

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

 

(d)           Seller
has provided Buyer with access to copies of all manuals, written policies or
similar documents of the Seller Parties which are material to the DSD Business
regarding compensation, benefits, perquisites, and personnel matters.  Except for the Sara Lee Corporation Severance
Pay Plan and the Sara Lee Corporation Severance Pay Plan for A & B
Level Executives or as provided under any Labor Contract in which Hired
Personnel participate (the “Severance Plans”),
the DSD Business has no oral or written severance policy or other severance
obligation.

 

4.21.        Hazardous
Substances.  Except as set forth in Schedule 4.21:

 

(a)           To
Seller’s knowledge, the DSD Business is, and during the past five (5) years
has been, in compliance and the Transferred Facilities are, and during the past
five (5) years have been, operated and maintained by Seller in compliance
with all Environmental Laws including laws relating to Hazardous Substances,
except where non-compliance would not, individually or in the aggregate, have a
Material Adverse Effect.  Seller has, and
during the past five (5) years has had, all Permits required under any
Environmental Law and the DSD Business and the Facilities are, and at all times
have been in compliance with such Permits, except where non-compliance would
not, individually or in the aggregate, have a Material Adverse Effect.  During the five (5) years preceding the
Closing, Seller has not received any written notice that the DSD Business or
the Transferred Facilities is or were claimed to be in violation of the
provisions of any Environmental Law or in non-compliance with the conditions of
any Permit, and there are no Claims pending or, to the knowledge of Seller,
threatened to that effect.  To Seller’s
knowledge, during the past five (5) years there have been no Hazardous
Substance Releases at the Transferred Facilities which were reportable under
Applicable Laws.

 

(b)           Seller
has delivered true, complete and correct copies of (i) all written reports
of all environmental investigations, assessments, studies, audits, and test
results, which have been conducted at any Transferred Facility within the past
five (5) years by any outside attorney, environmental consultant or
engineer engaged by Seller for such purpose, and (ii) to the knowledge of
Seller, all Permits, reports, and filings required by any applicable
Environmental Laws, OSHA safety complaints or other similar documentation
required by law to be filed with any Governmental Authority during the past
five (5) years relating to the ownership or operation of the Transferred
Facilities in the possession of Seller. 
All such documents referenced in the foregoing clauses (i) and (ii) are
listed on Schedule 4.21(b).

 

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

 

32

 

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

 

(e)           There
are no Judgments by any Governmental Authority or quasi-governmental entity
relating to any Environmental Law which regulate, obligate, bind or in any way
affect the DSD Business or the Transferred Facilities.

 

(f)            To
Seller’s knowledge, there is not and has not been during the past five years
any Hazardous Substance used, generated, treated, stored, transported, disposed
of, handled or otherwise existing on, under or about any Transferred Facility,
except for quantities of any such Hazardous Substances stored or otherwise held
on, under or about any such Transferred Facility in compliance with all
Environmental Laws.

 

(g)           To
Seller’s knowledge, Seller has at all times used, generated, treated, stored,
transported, disposed of or otherwise handled its Hazardous Substances in
substantial compliance with all Environmental Laws and in a manner that will
not result in liability of Seller or Buyer under any Environmental Law.

 

(h)           To
Seller’s knowledge, there are no present or past Environmental Conditions (as
defined below) in any way related to the DSD Business or the Transferred
Facilities which would have a Material Adverse Effect.  “Environmental Conditions”
means the introduction into the soil, groundwater or environment of the
Transferred Facilities (through leak, spill, release, discharge, escape,
emission, dumping, disposal or otherwise) of any pollution, including without
limitation any contaminant, irritant or pollutant or Hazardous Substance (upon
the property of the DSD Business and only where such pollution constituted at
the time thereof a violation of any Environmental Law).

 

4.22.        Brokers’
Fees and Commissions.  None of the
Seller Parties or any of their respective Affiliates or Representatives has
engaged any investment banker, broker or finder in connection with the
transactions contemplated hereby.

 

4.23.        Consumable
Inventory.  The Consumable Inventory
shall not at the time of Closing (a) be adulterated or misbranded within
the meaning of the Federal Food, Drug and Cosmetic Act, as amended, and
including its food and coloring additive amendments and the regulations
promulgated thereunder (collectively the “Federal Act”), (b) be
adulterated or misbranded within the meaning of any Applicable Law, or (c) be
an article which, under the provisions of Sections 405 and 505 of the
Federal Act, would not be able to be introduced into interstate commerce in the
United States.  Except as provided on Schedule 4.23,
all Consumable Inventory produced in any Facility operated by Seller was
produced in accordance with Good Manufacturing Practice (as that term is
defined in the Federal Act).

 

4.24.        Certain
Payments.  Since September 27,
2008, neither the Seller Parties nor any Affiliate of the Seller Parties, any
Representative of the Seller Parties or such Affiliate nor any

 

33

 

other Person associated
with or acting for or on behalf of the Seller Parties has in connection with
the 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) to
obtain favorable treatment in securing business, (b) to pay for favorable
treatment for business secured, (c) to obtain special concessions or for
special 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 and
complete list prepared by the management of the DSD Business identifying those
customers who, during the period from July 1, 2007 to June 28, 2008,
either ceased to do business with the DSD Business and transferred their sales
of coffee, tea and related products to Seller’s NSO Business, or ceased to do
business with the NSO Business and transferred their sales of coffee, tea and
related products to Seller’s DSD Business (collectively “Prior
Customers”).  During the
period from June 29, 2008, to the Closing Date, the net loss of gross
margin to the DSD Business due to the transfer of business by Prior Customers
from the NSO Business to the DSD Business and from the DSD Business to the NSO
Business shall not exceed the amount determined by prorating $2.5 million based
on the number of days from and including June 29, 2008 through and
including the Closing Date divided by 365 days. 
The fluctuations in purchases by Shared Customers from the DSD Business
and the NSO Business are not covered by the representations and warranties made
in this Section 4.25.

 

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

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer hereby represents and warrants to the Seller
Parties 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 authority
to enter into this Agreement and the other Additional Documents to which it is
a party and to consummate the transactions contemplated hereby and thereby, and
to 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 the
transactions contemplated hereby and thereby and the performance of Buyer’s
obligations hereunder and thereunder have been duly authorized by Buyer, and no
other proceedings on the part of Buyer are necessary to authorize such
execution, 

 

34

 

delivery and
performance.  This Agreement and the
other Additional Documents to which Buyer is a party have been or will be duly
and validly executed and delivered by Buyer and assuming the due execution and
delivery of this Agreement and the Additional Documents by the other parties
thereto, constitutes or will constitute valid and binding legal obligations of
Buyer to the extent a party, enforceable against Buyer to the extent a party
thereto in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights
in general and subject to general principles of equity and the discretion of
courts in granting equitable remedies.

 

5.3.          No Violation.  The execution, delivery and performance by
Buyer of this Agreement and the other Additional Documents to which it is a
party and the consummation by Buyer of the transactions contemplated hereby and
thereby, do not violate any Applicable Law, do not and will not conflict with
or 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 of
the charter document or bylaws of Buyer or of any other agreement or obligation
to which it is a party, the breach of which would impair Buyer’s ability to
consummate such transactions.

 

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

 

5.5.          Brokers’ Fees and Commissions.  None of Buyer or its Representatives has
engaged any investment banker, broker or finder in connection with the
transactions contemplated hereby other than Kerlin Capital Group, LLC, whose
fees will be paid by Buyer.

 

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

 

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

 

35

 

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

 

5.8.          Availability of Financing.  Except for the amount of the Closing Payment
that 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 to
perform its obligations hereunder, including to pay the Purchase Price at the
Closing.

 

ARTICLE VI.

COVENANTS

 

6.1.          Conduct of DSD Business Prior to
the Closing.  During the period from
the date of this Agreement until the Closing, except as expressly contemplated
or permitted by this Agreement or arising in the ordinary course of the DSD
Business, or to the extent that Buyer shall otherwise consent, the Seller
Parties shall use commercially reasonable efforts to preserve the Purchased Assets
and DSD Business intact, including its present operations, Transferred
Facilities, working conditions and relationships with lessors, licensors,
suppliers, customers and employees, and carry on the DSD Business in such a
manner so that the representations and warranties contained in Article IV
shall continue to be true and correct in all material respects on and as of the
Closing Date as if made on the Closing Date. 
Without limiting the foregoing, except as expressly contemplated or
permitted by this Agreement or to the extent that Buyer shall otherwise
consent, 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 the
foregoing, Seller Parties shall not, except as specifically contemplated by
this Agreement:

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

6.2.          Employees
and Employee Benefits.

 

(a)           Subject
to the Labor Contracts, at the Closing Buyer shall offer employment on an
at-will basis, effective as of the Closing Date, to all DSD Employees who are
employed by the Seller (or one of its Affiliates) immediately prior to the
Closing (the individuals who either accept Buyer’s offer of employment or are
subject to the Labor Contracts are collectively referred to herein as the “Hired Personnel”), in each case (A) at an Approved
Location (and Buyer agrees not to move Hired Personnel to a different location
for a period of ninety (90) days after the Closing Date) in a substantially
similar capacity in which they were employed by Seller immediately prior to the
Closing Date, (B) at the same or a substantially similar cash salary and
cash bonus level paid or payable to such Hired Personnel as was paid or payable
immediately prior to the Closing Date, (C) providing each such Person who
is a Hired Personnel not covered by a Labor Contract and their eligible
dependents, comparable employee benefits as are currently available to
similarly situated employees of Buyer or each such Person who is a Hired
Personnel covered by a Labor Contract and their eligible dependents such
benefits and other terms and conditions required by any Labor Contracts, (D) consistent
with the terms of Buyer’s benefit plans, Buyer will provide each such Hired
Personnel full service credit (equal at least to the level existing immediately
prior to the Closing Date) for vesting, eligibility and severance purposes (but
not 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 for
employees of Buyer (“Buyer Employee Plans”)
and Buyer shall amend (including by board resolution) the terms of the Buyer’s
Employee Plans to reflect this service credit, (E) providing that with
respect to any medical, dental or other welfare benefits that are provided at
any time under Buyer Employee Plans, any applicable pre-existing condition
exclusions (to the extent satisfied under the comparable Employee Plan
immediately prior to the Closing Date) be waived, and any expenses incurred
before such time under the comparable Employee Plan be taken into account under
such Buyer Employee Plan for purposes of satisfying applicable deductible,
coinsurance and 

 

37

 

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

 

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

 

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

 

(d)           The
Buyer shall be solely responsible for as of the Closing Date all contribution
obligations (including any charges, increases or adjustments required under
Applicable Law or otherwise, or pursuant to any funding plan in relation
thereto) due after the Closing Date with respect to the coverage of employees
of the DSD Business under the Multiemployer Plans of the Seller and its ERISA
Affiliates (individually, an “Assumed Multiemployer Plan”
and collectively, the “Assumed Multiemployer
Plans”).  In addition, the
following provisions shall apply with respect to any Assumed Multiemployer Plan
subject to Title IV of ERISA, so that the sale of the Purchased Assets shall be
covered under Section 4204 of ERISA and shall not be deemed a complete or
partial withdrawal under Title IV of ERISA.

 

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

 

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

 

38

 

satisfaction of each such Assumed Multiemployer Plan
that no Buyer’s bond or escrow is required under Section 4204 of ERISA and
the regulations promulgated thereunder. 
In making such demonstration, neither Buyer nor the Seller, however,
shall be required to disclose non-public information to the Assumed
Multiemployer Plans.  If after reasonable
efforts Buyer and the Seller are unable to so demonstrate to the satisfaction
of such Assumed Multiemployer Plan, for a period of five plan years commencing
with the first plan year beginning after the Closing Date, the Buyer, at its
expense, shall provide to such Assumed Multiemployer Plan a bond issued by a
corporate 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 institution
satisfactory to such Assumed Multiemployer Plan, in an amount equal to the
greater of:

 

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

 

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

 

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

 

(iii)          If, during the first five (5) plan
years beginning after the Closing Date, the Buyer withdraws in a complete
withdrawal, or in partial withdrawal with respect to the operations of the DSD
Business covered by any such Assumed Multiemployer Plan, the Seller and its
ERISA Affiliates (determined following the Closing) shall be secondarily liable
for any withdrawal liability they would have had to such Assumed Multiemployer
Plan with respect to such operations (but for ERISA Section 4204) if the
Liability of the Buyer with respect to such Assumed Multiemployer Plan is not
paid; provided, however, that this subsection (iii) shall be of no force
and effect if Buyer and/or the Seller demonstrate to the satisfaction of such
Assumed Multiemployer Plan that no Buyer’s bond or escrow is required under Section 4204
of ERISA.  In lieu of incurring such
secondary Liability the Seller shall have the right in its discretion to pay
any such withdrawal liability of Buyer or its ERISA Affiliates in the event it
deems it in its best interests to do so. 
Buyer shall indemnify Seller for any Liability incurred by Seller on
account of any withdrawal liability or any secondary Liability of Buyer arising
from or in connection with Buyer’s complete or partial withdrawal from an
Assumed Multiemployer Plan.

 

39

 

6.3.          Access to Information.

 

(a)           Between
the date of this Agreement and the Closing Date, upon reasonable notice and at
reasonable times, Seller will give Buyer and its Representatives access to
personnel, facilities and books and records of the Seller Parties to the extent
relating to the DSD Business and will permit Buyer to make copies thereof and
will cooperate with regard to such inspections as it may reasonably request and
will furnish Buyer such financial and operating data and other information to
the extent relating to the DSD Business, the Purchased Assets and Assumed
Liabilities which Buyer may from time to time reasonably request.  All access hereunder shall be afforded during
normal business hours, and Buyer and its Representatives shall conduct any
review and inspection in such a manner so that the DSD Business’s normal
business activities shall not be unduly or unnecessarily disrupted.  The foregoing notwithstanding, without first
obtaining the prior approval of Seller, neither Buyer nor any of its
Representatives shall tour or visit the DSD Business Facilities or contact any
of its employees, customers or suppliers, it being understood that any customer
contacts 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 shall
not be afforded access to any employee records or other records or information
the 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 reasonable
and prudent person and that Buyer utilizes in the ordinary course of
business.  Buyer shall not conduct any
environmental testing at the Transferred Facilities following execution of this
Agreement.

 

(b)           Any
and all information gathered by Buyer as a result of, or in connection with,
the information gathering described in Section 6.3(a) or
conducted prior to the execution of this Agreement shall be kept strictly
confidential and shall not be revealed to, or discussed with, any person other
than the Representatives of Buyer who agree to comply with the Confidentiality
Agreement and the provisions of this Section 6.3(b), except that as
of the Closing Date, Buyer and its Representatives shall cease to have any such
confidentiality obligation.  In the event
the Closing is not consummated, such information shall be returned to the
Seller or destroyed in accordance with this Agreement and the Confidentiality
Agreement.

 

6.4.          Historical
Financial Statements.

 

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

 

(b)           Subject
to subparagraph (c) below, Buyer shall reimburse Seller for fifty
percent (50%) of the out-of-pocket costs incurred by Seller in preparing the
Historical Financial Statements, including the out-of-pocket costs incurred in
preparing a valuation report reflecting the value of the Brew
Equipment Inventory at DSD Customer locations as of the Closing Date (the
“Accounting Costs”), regardless of whether
the Acquisition is consummated; provided, 

 

40

 

however, (i) if the failure
to consummate the Acquisition is due to the breach of any of the provisions of
this Agreement by any Seller Party, but only to the extent that the act(s) or
omission(s) resulting in such breach were in the control of such Seller
Party, Buyer shall not have any obligation to reimburse Seller for any portion
of the Accounting Costs, and (ii) if the failure to consummate the Acquisition
is due to the breach of any of the provisions of the Purchase Agreement by
Buyer, but only to the extent that the act(s) or omission(s) resulting
in such breach were in the control of Buyer, Buyer shall reimburse Seller for
one hundred percent (100%) of the Accounting Costs.  Buyer shall reimburse Seller for Buyer’s
portion of the Accounting Costs due under this Section 6.4(b) on
the date that is the earlier of (y) the Closing, or (z) the date that
is five (5) days following the termination of this Agreement under Article IX.  In the event that Seller pays or incurs any
Accounting Costs after the date that is the earlier of (y) or (z) of
the previous sentence, Buyer shall reimburse Seller for its portion of such
Accounting Costs due to Seller under this Section 6.4(b) within
five (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 the
earlier of (y) or (z) Seller shall not incur any additional
Accounting Costs other than pursuant to paragraph (e) below.

 

(c)           The parties
shall cooperate with one another and cause their respective accounting firms to
cooperate with one another toward the objective of reducing the Accounting
Costs, including Buyer’s submission to the SEC, as soon as reasonably
practicable a waiver request seeking authorization to use abbreviated financial
statements (which are more closely aligned with the transaction set forth
herein).  Buyer shall be entitled to a
credit for fifty percent (50%) of the expenses incurred by Buyer arising from
the preparation of the waiver request (“Waiver Request Costs”),
including attorneys’ fees and the costs of its appraiser, against Buyer’s share
of the Accounting Costs; provided, however, if Buyer is not obligated to reimburse Seller for
any portion of the Accounting Costs because of a failure to consummate the
Acquisition described in Section 6.4(b), then Seller shall
reimburse Buyer for one hundred percent (100%) of the Waiver Request Costs
within five (5) days of Seller’s receipt of an invoice for such Waiver
Request Costs;  provided further, if the
Acquisition is not consummated due to a breach by Buyer of any of the
provisions of this Agreement, but only to the extent that the act(s) or
omission(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) with
respect to the Waiver Request Costs.

 

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

 

41

 

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

 

(e)           If after
Closing the SEC requires historical financial statements of the DSD Business
other than those provided pursuant to this Section 6.4 before
Closing, Seller shall use commercially reasonable efforts to cause the preparation
of such statements, provided that
the out of pocket costs incurred to prepare any such additional statements
shall be shared equally between Seller and Buyer.

 

6.5.          Public
Announcements.  None of the parties
to this Agreement shall issue or make, before or after Closing, any press
release or other public statements or otherwise announce the transactions
described herein to employees, customers or suppliers except and unless such
release, statement or announcement has been approved by both Seller and Buyer
(which approval shall not be unreasonably withheld or delayed), except as may
be required by Applicable Law including applicable stock exchange or NASDAQ
regulations, provided in such cases the parties shall cooperate in making such
announcement, including giving the other party a good faith opportunity to
review and comment on such announcement.

 

6.6.          Supplements
to Schedules.

 

(a)           From
the date hereof to the Closing Date, Seller may supplement or amend the
Schedules delivered in connection herewith with respect to any matter which, if
existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in any such Schedule or which is
necessary to correct any information in any such Schedule which has been rendered
inaccurate thereby, whether or not such matter is material (“Changes”). 
No such Changes will be considered or taken into account for the purpose
of determining satisfaction of the conditions set forth in Section 7.1(a) hereof
or the compliance by the Seller Parties with the covenant set forth in Section 6.1
hereof; provided, however, that by consummating the
transactions contemplated hereby, Buyer waives any right or claim it may have
or have had on account of or relating to such failure to satisfy conditions or
comply with covenants or on account of or relating to any such breach of
representation or warranty of any Seller Party. 
Notwithstanding the previous sentence, if a Change constitutes a
Permitted Stipulated Update, then the Permitted Stipulated Update shall be
considered for purposes of determining satisfaction of the conditions set forth
in Section 7.1(a) hereof or the compliance by any Seller Party
with the covenant set forth in Section 6.1 and Buyer shall be
required to consummate the transactions contemplated hereby subject to
satisfaction of the other conditions set forth in Section 7.1.  The term “Permitted
Stipulated Update” means Changes relating to matters occurring after
the 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 a
breach of any covenant in this Agreement, and which (A) relate to matters
arising in the ordinary course of business which give rise to neither a
casualty nor a third party claim against either Seller Party, (B) reflect
modifications (whether due to casualty or otherwise) to the Service Trucks
and/or Route Trucks but do not decrease the number of such types of Vehicles
being transferred to 

 

42

 

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

 

(b)           Notwithstanding
anything in this Agreement to the contrary, at the Closing, Seller shall
convey, or assign its leasehold interest, as applicable, to Buyer not less than
220 Route Trucks and 81 Service Trucks.

 

6.7.          Mixed Use Contracts.

 

(a)           At
Closing, Seller shall provide to Buyer the benefits under, or assign to Buyer
its rights under, or obtain a separate contract to be included in the Purchased
Contracts for, the portion of the non-customer Mixed Use Contracts relating
exclusively to the DSD Business, as set forth on Schedule 6.7, and Buyer
shall assume the Liabilities of Seller with respect to such portions of such
Mixed Use Contracts.  To the extent that
a third party’s consent is required to assign any portion of a non-customer
Mixed Use Contract which is to be assigned and assumed pursuant to Schedule
6.7, Seller will use commercially reasonable efforts (which shall not
include the expenditure of any money to any third party in exchange for such
consent) to obtain such consent.  If such
a 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 the
portions of each such Mixed Use Contract pertaining to the DSD Business.  In no event shall Seller be required to
provide Buyer the benefits of (i) any non-customer Mixed Use Contract at
any time after the date that is two (2) years after the Closing Date, or (ii) any
Mixed Use Contracts relating to the purchase by Seller of green coffee, tea,
Liquid Coffee concentrate, cocoa and cappuccino products, Machines and Spare
Parts, and Contracts relating to software and information technology services
or products; provided however, that the foregoing shall not limit the rights of
the Buyer under any of the Operational Agreements.

 

(b)           With
respect to each Mixed Use Contract which relates to sales to a Shared Customer
pursuant to both the DSD Business and the NSO Business, the parties agree that promptly
following the Closing, Seller shall introduce Buyer to each such customer and
the parties shall work together to obtain separate contracts with each such
customer as soon as 

 

43

 

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

 

6.8.          Release of Certain Obligations.  Following the Closing, in the event that
Seller’s rights under any Contract or Real Property Lease are assigned to
Buyer, 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 not
obligate Buyer to take any action other than to request a Release.

 

6.9.          Access to Records; Facilities.

 

(a)           Seller
shall be entitled, for any lawful purpose, until the sixth (6th) anniversary of
the 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 have
access to and to make copies of all financial information and Tax records of
the DSD Business which relate to periods prior to the Closing.  Subject to Section 6.12, Buyer
shall retain such records for the period following the Closing described above,
after which time Buyer may destroy or otherwise dispose of such business
records without Seller’s consent.

 

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

 

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

 

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 in
full force and effect general liability 

 

44

 

(including products
liability) insurance covering the DSD Business with an insurance company having
a rating by A.M. Best and Company of at least A- with annual limits of not
less than Five Million Dollars ($5,000,000.00) per occurrence and Five Million
Dollars ($5,000,000.00) in the annual aggregate, provided all or part of Buyer’s
insurance 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 insureds
and which shall provide Seller with at least thirty (30) days’ prior written
notice of any termination or non-renewal thereof, and may have such deductibles
as applies to Buyer’s general liability insurance generally.

 

6.11.        Confidentiality Agreement.

 

(a)           Buyer
shall remain obligated under the provisions of that certain Confidentiality
Agreement, dated March 26, 2008 (the “Confidentiality
Agreement”), between Buyer and Seller, the terms of which are
incorporated herein by reference; provided, however, that the obligations
contained in this Section 6.11(a) shall terminate at the
Closing.

 

(b)           Following
the Closing, Seller agrees to treat and hold confidentially, in the same manner
as Seller treats and holds its own confidential information, and refrain from
using any Information which Seller, in operating the DSD Business, treated and
maintained as confidential; provided, however, that Seller’s obligation under this Section 6.11(b) shall
not apply to the extent that such confidential Information pertains to Seller’s
NSO Business or is or becomes part of the public domain through no breach of
this Agreement by Seller or its Affiliates. 
Nothing in this Section 6.11(b) shall restrict or limit
Seller or any of its direct or indirect wholly-owned subsidiaries from
soliciting customers or competing with Buyer (including by means of the use of
customer lists, pricing, preferences and purchase patterns of the DSD Business
or the use of the Trademarks and Trade Names licensed to Seller under the Buyer
Trademark License Agreement and the Superior Trademark License Agreement)
except as provided in Section 6.18, and Buyer shall not assert any
claim against Seller or any of its direct or indirect wholly-owned subsidiaries
on account of Seller’s or any of its wholly owned subsidiaries’ use of such
customer lists, pricing, preferences and purchase patterns or such Trademarks
and Trade Names in connection with Seller’s (or any of its direct or indirect
wholly-owned subsidiaries’) solicitation of customers and competition with
Buyer.  Further, Seller shall not remain
obligated under this Section 6.11(b) to the extent any
Information is disclosed in connection with litigation between the parties or
is required to be disclosed pursuant to Applicable Law; provided, that Seller
shall provide Buyer with prompt notice of the need to disclose Information
pursuant to Applicable Law so that Buyer may seek a protective order or other
appropriate remedy.  In the event that
such protective order or other remedy is not obtained, Seller shall furnish
only that portion of the Information which is legally required and shall
exercise its commercially reasonable efforts to obtain confidential treatment
of the Information.

 

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

 

45

 

Agreement Terms.  “Confidential Operating Agreement Terms”  shall mean the pricing, length of term
and other provisions of the Operating Agreement which Buyer and Seller mutually
identify as requiring confidential treatment in order to protect the competitive
interests of one or both of them.  In the
event of litigation between the parties, or any requirement of disclosure under
Applicable Law, including Buyer’s filing of Operating Agreements with the
Securities and Exchange Commission or other applicable regulatory body, the
parties shall seek to redact from any public filing and obtain confidential
treatment of all Confidential Operating Agreement Terms; provided, however,
that if either party is required to disclose Confidential Operating Agreement
Terms pursuant to Applicable Law, such party shall seek to obtain a protective
order (and in the case of securities law compliance and filings, seek
confidential treatment) and shall provide the other party with prompt written
notice of the need to disclose so that the other party may also seek a
protective order or other appropriate remedy, or comment upon any
confidentiality request.  In the event
that such protective order, other remedy or request is not obtained, the disclosing
party shall furnish only that portion of the Confidential Operating Agreement
Terms which it is legally required to disclose and shall exercise its
commercially reasonable effort to obtain confidential treatment of the balance
of such Terms.  Without limiting the
generality of the foregoing, to the extent that Buyer concludes, after
consultation with securities counsel, that any of the Operating Agreements is
required to be filed with the SEC under applicable law, Buyer will
(i) prepare a confidential treatment request letter and redacted form of
agreement (that does not include any Confidential Operating Agreement Terms) in
accordance with SEC rules and regulations, (ii) provide Seller a copy
of such drafts for its review and comment not less than five business days in
advance of the intended filing date, (iii) give due consideration to and
make commercially reasonable efforts to implement all reasonable comments of
Seller, and (iv) keep Seller apprised of status of such submission and
promptly furnish Seller with any SEC comments provided to Buyer with respect
thereto and promptly furnish Seller with copies of all correspondence to and
from any regulatory authority with respect thereto.

 

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

 

46

 

6.13.        Use of Names.

 

(a)           Other
than the DSD Business Marks, the Seller Parties are not conveying ownership
rights or, except as expressly provided in the Operational Agreements, granting
Buyer a license to use any of the Trademarks of Seller or any Affiliate of
Seller, 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 or
appearance to the “Sara Lee” mark or name or any other marks or names mentioned
above (collectively, the “Retained Names and
Marks”) and, after the Closing, Buyer shall not, and shall not
permit any of its Affiliates to, use in any manner the Retained Names and Marks
or any mark confusingly similar to the Retained Names and Marks, except as
provided in the Operational Agreements and this Section 6.13.  In the event Buyer or any Affiliate of Buyer
violates any of its obligations under this Section 6.13 (and does
not limit its use of the Retained Names and Marks as provided pursuant to any
of the Operational Agreements), Seller and its Affiliates may proceed against
it in law or in equity for such damages or other relief as a court may deem
appropriate.  Buyer acknowledges that a
violation of this Section 6.13 may cause Seller and its Affiliates
irreparable harm which may not be adequately compensated for by money
damages.  Buyer therefore agrees that in
the event of any actual or threatened violation of this Section 6.13,
Seller and each of its Affiliates shall be entitled, in addition to other
remedies that they may have, to a temporary restraining order and to
preliminary and final injunctive relief against Buyer or such Affiliate of
Buyer to prevent any violations of this Section 6.13.

 

(b)           Except
as expressly provided in the Operational Agreements, Buyer shall, and shall
cause each of its Affiliates to, cease promptly, but in no event later than one
(1) year after the Closing Date, using any (i) existing advertising
or promotional materials, including brochures, catalogs, websites and other
similar items, and (ii) existing stationery, business cards, business
forms, packaging and other similar items, in each case that contain anywhere
thereon any of the Retained Names and Marks; provided,
however, that Buyer shall, when
using items referred to in clause (ii) in the context of entering into or
conducting contractual relationships, make reasonably clear to all other
applicable parties that Buyer or such Affiliate of Buyer, rather than Seller or
any Affiliate of Seller, is the party entering into or conducting the
contractual relationship; and provided,
further, that Buyer shall ensure
that personnel of the DSD Business using such items shall not, and shall have
no authority to, hold themselves out as officers, employees or agents of Seller
or any Affiliate of Seller.

 

(c)           Buyer
shall have the right to exhaust all existing inventories of finished products
and existing work in progress that contain as part of the physical products
themselves any of the Retained Names and Marks, provided that Buyer shall use its reasonable efforts to
dispose 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 Seller
Parties shall, and shall cause each of their respective Affiliates and
Representatives (including, without limitation, investment bankers, attorneys
and accountants) to, immediately discontinue any 

 

47

 

negotiations or
discussions with any Person (other than Buyer) relating to any business
combination transaction involving the DSD Business Realty, or the Purchased
Assets (regardless of form) other than the sale of control of Seller or the
sale of inventory in the ordinary course of the DSD Business.  The Seller Parties shall not, and shall cause
their Affiliates and Representatives not to, at any time after the execution of
this Agreement and until the earlier of the Closing Date or the termination of
this Agreement pursuant to Section 9.1, take any action to:  (a) solicit, encourage, initiate or
facilitate the making of any Acquisition Proposal; (b) enter into an
agreement with respect to any Acquisition Proposal; (c) participate in
discussions or negotiations with, (d) respond to any inquiries or
proposals by, (e) distribute any information about the DSD Business to, or
(f) otherwise cooperate in any other way with any third party with respect
to, or in connection with, any Acquisition Proposal.  An “Acquisition
Proposal” means any inquiry, proposal or offer from any third party
relating to any direct or indirect acquisition or purchase of Realty or all or
substantially all of the assets of the DSD Business other than Inventory in the
ordinary 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 systems
related 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 of
key reports (e.g., those related to Route and customer optimization models) to
be agreed upon by the parties.  Buyer
agrees that regardless of whether the Acquisition is consummated, Buyer shall
reimburse Seller for all reasonable costs that Seller or any of Seller’s
Affiliates 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 to
consummate the Acquisition is due to the breach of any of the provisions of
this Agreement by any Seller Party, but only to the extent that the
act(s) or omission(s) resulting in such breach were in the control of
such Seller Party, Buyer shall have no obligation to reimburse Seller for any
portion of the IT Carve Out Costs.  It is
expressly understood and agreed that Seller may engage third-party contractors
to perform the IT Carve Out and that the costs of such contractors shall be
included as part of the IT Carve Out Costs. 
Following the Closing, Buyer shall have the right to utilize the IT
Carve Out pursuant to the terms of the Seller Transition Services Agreement but
shall not acquire any ownership or other rights with respect thereto except to
the extent included in the Purchased Assets hereunder.  Buyer shall reimburse Seller for the IT Carve
Out 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 this
Agreement under Article IX.

 

6.16.        Brew Equipment Service; DSD Referral.  The Seller Parties and Buyer shall use
commercially reasonable efforts to cooperate with each other following the
Closing such that any brew and liquid coffee equipment at the locations of
Shared Customers are serviced by Buyer in the case of brew and liquid coffee
equipment included in the Purchased Assets and by Seller in the case of all
other 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 of
Seller’s computer equipment system which track service of brew equipment.  For the six (6) month period following
the Closing, the Seller Parties shall use commercially reasonable efforts 

 

48

 

to refer all customer
inquiries that relate to DSD Business, other than inquiries relating to the
functions of the DSD Business retained by the Seller Parties (e.g., accounts
receivables and payables), to Buyer.

 

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

 

6.18.        Limited Non-Competition.  For a period of three (3) years from and
after the Closing Date, neither Seller nor any Affiliate of Seller shall, in
the Prohibited Areas, directly or indirectly, either alone or as a stockholder,
partner, consultant, owner, agent, creditor (other than a trade creditor in the
ordinary course of business consistent with past practices), coventurer of any
other 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 engaged
in the business utilizing a network of facilities and vehicles to deliver
coffees and teas directly to customer locations where such products are
consumed (the “Prohibited Business”);
provided, however, nothing in this Section 6.18
shall restrict Seller or any Affiliate of Seller from engaging in the NSO
Business so long as the NSO Business is not conducted through the foregoing
method of distribution or from acquiring a Prohibited Business as part of a
larger transaction where such Prohibited Business represents sales of ten
percent (10%) or less for the most recently completed fiscal year of the
business being acquired by Seller or such Affiliate in such acquisition.  The term “Prohibited
Area” shall mean the Las Vegas, Nevada, and Atlantic City, New
Jersey, metropolitan statistical areas. 
Seller acknowledges that a breach of the covenants contained in this Section 6.18
may cause irreparable damage to Buyer, the exact amount of which may be
difficult to ascertain, and that the remedies at law for such breach may be
inadequate.  Accordingly, Seller agrees
that 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 Date
and ending on the second anniversary of the Closing Date,

 

(a)           neither
the Seller Parties nor any Affiliate of any Seller Party shall solicit for
employment or hire any Hired Personnel without the prior written consent of
Buyer; provided that Seller
Parties and their Affiliates shall not be prohibited from employing any such
Person who contacts the Seller Parties or their Affiliates in response to any
general solicitation or advertising not directed at any such employee or group
of employees.  Each Seller Party
acknowledges that a breach of the covenants contained in this Section 6.19(a) may
cause irreparable damage to Buyer, the exact amount of which may be difficult
to ascertain, and that the remedies at law for such breach may be
inadequate.  Accordingly, each Seller
Party agrees 

 

49

 

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)           neither
Buyer 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 employee
of Seller Parties or their Affiliates as of the Closing Date whom Buyer meets
or becomes aware of in connection with the Acquisition without the prior
written consent of Seller; provided
that Buyer and its Affiliates shall not be prohibited from employing any such
Person who contacts Buyer or its Affiliates in response to any general
solicitation or advertising not directed at any such employee or group of
employees.  Buyer acknowledges that a
breach of the covenants contained in this Section 6.19(b) may
cause irreparable damage to the Seller Parties, the exact amount of which may
be difficult to ascertain, and that the remedies at law for such breach may be
inadequate.  Accordingly, Buyer agrees
that 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, the
Seller Parties shall be entitled to seek specific performance and injunctive
relief.

 

6.20.        Accounts Receivable.  Concurrent with the Closing, the parties are
entering into the Seller Transition Services Agreement pursuant to which Seller
will provide cash collection services to Buyer. 
Accordingly, the following terms of this Section 6.20 shall
be subject to the Seller Transition Services Agreement notwithstanding any
provision below to the contrary:

 

(a)           Given
that Seller is retaining all accounts receivable arising from transactions of
the DSD Business on or prior to the Closing Date (“Seller Receivables”) the parties agree to cooperate with one
another in the collection of Seller Receivables on the terms set forth in this Section 6.20.  All collections from DSD Customers received
by either Seller or Buyer from the Closing Date forward shall be applied to the
oldest receivable first unless otherwise specified in writing by such customer
(and then only if such customer has not been induced by Buyer to make such
specification) 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 a
list of all Seller Receivables existing as of the Closing Date (“DSD Collection Customers”), which list
shall set forth for each Seller Receivable the name of the debtor, the date of
the invoice and the balance due, (b) the parties shall exchange with one
another records of all payments received from the DSD Collection Customers,
(c) for a period of 30 days after the Closing, Buyer shall instruct its
employees to wire to Seller’s designated bank account (as set forth in writing
by Seller, the “Collection Account”)
all money received by them during said 30 day period from DSD Collection
Customers and also shall instruct DSD Collection Customers to continue paying
moneys owed for DSD Product to Seller’s Collection Account for said 30 day
period; (d) commencing on the 31st day after the Closing, the parties
shall exchange with one another at least monthly the collections received by
them from DSD Collection Customers and true up payments that either party may
owe the other until the Seller Receivables are paid in full.  In the event that Seller receives money in
Seller’s Collection Account from DSD 

 

50

 

Collection Customers that is not associated with Seller Receivables or
other amounts due Seller from such customers, Seller shall remit such monies to
Buyer.

 

(b)           Buyer,
as Seller’s agent for collection, agrees to use the same effort in the collection
of Seller Receivables as Buyer uses for its own accounts receivable (which may
include referral to a collection agency); provided, that (i) Buyer shall
not be required or permitted, without the prior written approval of Seller, to
commence litigation, employ legal counsel or make any other extraordinary
collection efforts, and (ii) Buyer’s obligation to act as Seller’s agent
in the collection of the Seller Receivables under this Section 6.20
shall terminate one hundred twenty (120) days after the Closing Date (the “Collection Period”).  During the Collection Period, neither Seller
nor any of its Affiliates shall engage in any collection efforts against the
DSD Collection Customers.  At the end of
the Collection Period, Buyer shall return to Seller all files concerning the
collection or attempts to collect the Seller Receivables and Buyer’s
responsibility for the collection of the Seller Receivables shall cease; provided, Buyer shall promptly pay over to
Sellers any amounts received with respect to the Seller Receivables after the
Collection Period, and Seller shall continue to be obligated to promptly pay
over to Buyer any amounts with respect to receivables arising from DSD Business
transactions after the Closing Date.

 

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

 

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

 

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

 

51

 

take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement and the Additional Documents (including satisfaction, but not
waiver, of the Closing conditions set forth in Article VII below),
(ii) after the Closing, to execute any documents, instruments or
conveyances of any kind which may be necessary to carry out any of the
transactions contemplated hereunder or thereunder, and (iii) before and
after the Closing, to cooperate with each other in connection with the foregoing,
including using reasonable efforts to effect all necessary registrations and
filings, including without limitation submissions of information requested by
Governmental 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 approvals
from other parties to the Purchased Contracts; or obtain any Permits (or any
consents, waivers or approvals related thereto) that Buyer may require to
operate the DSD Business.  In addition to
the foregoing, not later than fifteen (15) days following the Closing Date,
Buyer shall cause the Seller’s United States Department of Transportation
number located on each of the Vehicles to be removed or concealed.  To the extent that Seller seeks to assert any
warranty Claim retained by Seller pursuant to Section 1.3 (u) with respect
to a warranty that is part of the Purchased Assets, Buyer shall reasonably
cooperate with Seller in the effort to recover such Claim.

 

6.24.        Buyer’s Pre-Closing Conduct.  During the period from the date of this
Agreement until the Closing, neither Buyer nor any of its Representatives shall
take any action to influence or induce Seller’s employees to encourage Shared
Customers to shift their purchases of coffee, tea and related products from
non-DSD sources (such as Seller’s NSO Business) to purchases from the DSD
Business.

 

6.25.        Labor Contracts.  With respect to the Labor Contracts listed on
Schedule 1.1(g)-2, Buyer and Seller shall each use commercially reasonable
efforts to obtain separate agreements with the unions who are parties thereto
promptly following the Closing.

 

6.26.        Embodiments of DSD Intellectual
Property.  Following the Closing,
Seller shall use commercially reasonable efforts to provide to Buyer all
tangible embodiments of the DSD Intellectual Property identified by Seller in
any 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 DSD
Intellectual 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 their
Affiliates violate any of their obligations under this Section 6.26
(and does not limit its use of the DSD Business Marks as provided pursuant to
any of the Operational Agreements), Buyer and its Affiliates may proceed
against it in law or in equity for such damages or other relief as a court may
deem appropriate.  Seller Parties acknowledge
that a violation of this Section 6.26 may cause Buyer and its
Affiliates irreparable harm which may not be adequately compensated for by
money damages.  Seller Parties therefore
agree 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 other
remedies that they may have, to a temporary restraining order and to 

 

52

 

preliminary and final
injunctive relieve against Seller Parties or such Affiliate of Seller Parties
to prevent any violations of this Section 6.26.

 

6.27.        Authorized Information.  Buyer shall not induce or authorize any
Person to divulge or use information which is confidential information of Seller
unless such information becomes part of the public domain through no act or
omission by Buyer, its Affiliates or its employees, except that the foregoing
shall not apply to Buyer’s right to obtain Authorized Information from the
Hired Personnel (who Seller agrees may disclose such Authorized Information to
Buyer following the Closing) or to Buyer’s use of Authorized Information as
permitted in this Section 6.27. 
The term “Authorized Information”
means the customer lists, pricing, preferences and purchase patterns of
Seller’s NSO Business.  Nothing in this Section 6.27
shall restrict or limit Buyer or its direct or indirect wholly-owned
subsidiaries from soliciting customers or competing with Seller (including by
means of use of Authorized Information or the use of the Trademarks and Trade
Names licensed to Buyer under the Seller Trademark License Agreement), and
Seller shall not assert any claim against Buyer or any of its direct or
indirect wholly-owned subsidiaries on account of Buyer’s (or any of its direct
or indirect wholly-owned subsidiaries’) use of Authorized Information in
connection with Buyer’s (or any of its direct or indirect wholly-owned
subsidiaries’) solicitation of customers and competition with Seller and the
use of Authorized Information; provided, however, that given Seller’s
confidentiality obligations to its NSO customers, Buyer, its Affiliates and its
employees shall maintain the confidentiality of such Authorized
Information.  Further, Buyer shall not
remain obligated under this Section 6.27 to the extent any
information is disclosed to the public in connection with litigation between
the parties or is required to be disclosed pursuant to Applicable Law;
provided, that Buyer shall provide Seller with prompt notice of the need to
disclose information pursuant to Applicable Law so that Seller may seek a
protective 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 legally
required and shall exercise its commercially reasonable efforts to obtain
confidential treatment of the information. 
Seller shall retain the right to assert any claim against Buyer, its
Affiliates, and employees, including the Hired Personnel if any of them
breaches 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 obtain
Bank 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 any
portion of the Purchase Price, to continue to diligently use its commercially
reasonable efforts to obtain Bank Financing in an amount sufficient to satisfy
all amounts owing to Seller under the Note and to use such financing to payoff
all such amounts outstanding as quickly as practicable following the Closing.

 

53

 

ARTICLE VII.

CONDITIONS TO CLOSING

 

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

 

(a)           All
representations and warranties made by the Seller Parties in this Agreement, as
amended to account for any Permitted Stipulated Updates, shall be true and
correct in all material respects (other than those qualified by materiality
which shall be true and correct in all respects) as of the date of this
Agreement and as of the Closing Date, as though made at and as of the Closing
Date, except to the extent that such representations and warranties speak as of
a specific date, without giving effect to any supplements or amendments to the
Schedules made by any Seller Party after the date hereof through the Closing
Date, and the Seller Parties shall have delivered all documents and agreements
described in Section 3.2 and the Seller Parties shall have
otherwise performed in all material respects all covenants, obligations and
conditions required under this Agreement to be performed by it on or prior to
the Closing Date.

 

(b)           The
Purchased Assets shall be free and clear of all Liens, other than Permitted
Liens.

 

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

 

(d)           Buyer
shall have received from Chicago Title Insurance Company (the “Title Company”) ALTA 2006 owner’s policies
or equivalent TLTA policies of title insurance (each, a “Title Policy”) in an amount for each
parcel of the Owned Real Property which shall be the amount that is equal to
the 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 in
the name of Buyer, subject only to the Permitted Encumbrances and Assumed
Liabilities.

 

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

 

54

 

(f)            The
parties shall have entered into each of the Operational Agreements and the
Option Agreement, and each of the manufacturers shall have duly executed and
delivered the Cappuccino and Cocoa Transition Agreement, as applicable.

 

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

 

(h)           The
Historical Financial Statements described on Exhibit P and any
others required by the SEC as contemplated by Section 6.4(d) shall
have been delivered to Buyer.

 

(i)            Since
September 27, 2008, except as provided in Schedule 4.8(a) (without
taking into account any Permitted Stipulated Update or other supplement to Schedule
4.8(a)), no event or circumstance that results in or will result in a
Material Adverse Effect shall have occurred.

 

7.2.          Conditions
to Obligations of the Seller Parties. 
All obligations of the Seller Parties under this Agreement are subject
to 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)           All
representations and warranties made by Buyer in this Agreement shall be true
and correct in all material respects (other than those qualified by materiality
which shall be true and correct in all respects) as of the date of this
Agreement and as of the Closing Date as though made at and as of the Closing
Date, except to the extent that such representations and warranties speak as of
a specific date, and Buyer shall have delivered all funds, documents and
agreements described in Section 3.3 and otherwise performed in all
material respects all covenants, obligations and conditions required under this
Agreement to be performed by it on or prior to the Closing Date.

 

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

 

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

 

ARTICLE VIII.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

AND INDEMNIFICATION

 

8.1.          Survival
of Representations and Warranties. 
No party or other Person entitled to indemnification under this Article VIII
shall make or assert any Indemnity Claim under 

 

55

 

Section 8.2(a) or 8.3(a) below
due to any inaccuracy or breach of any representation or warranty in this
Agreement 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) any
Indemnity Claim arising under Sections 4.1 (Corporate
Organization), 4.2(a) (No Violation), 4.3 (Authority), Section 4.9
(Payment of Taxes), 4.12 (but only the first sentence thereof) (Tangible
Personal Property), 4.15 (but only the third sentence thereof) (Intellectual
Property), 5.1 (Corporate Organization) or 5.2 (Authority), it
being agreed that the representations and warranties in those Sections shall
survive through the period of the applicable statute of limitations (including
all waivers and extensions thereof); and (b) any Indemnity Claim arising
under Section 4.21 (Hazardous Substances), it being agreed that the
representations and warranties in Section 4.21 shall continue until
the three (3) year anniversary of the Closing Date.

 

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

 

8.2.          Seller’s
Indemnification.  Subject to the
further provisions of this Article VIII, Seller shall indemnify,
defend and hold harmless Buyer and its Affiliates and their respective
Representatives (collectively, “Buyer Indemnified Parties”), from
and against and in respect of any and all Losses, net of any insurance proceeds
or Tax benefits actually recovered or recoverable by any Buyer Indemnified
Party (it being agreed that each Buyer Indemnified Party shall use commercially
reasonable efforts to seek and obtain such recoveries), resulting from, in
connection with or arising out of:

 

(a)           any
inaccuracy or breach of any representation or warranty made by any Seller Party
in Article IV of this Agreement;

 

(b)           the
failure of any Seller Party to comply with any of the covenants in this
Agreement;

 

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

 

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

 

56

 

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

 

(e)           any
Liability to the extent relating to the ownership or use of the Purchased
Assets or the operation of the DSD Business on or prior to the Closing, except
the Assumed Liabilities.

 

8.3.          Buyer’s
Indemnification.  Subject to the
further provisions of this Article VIII, Buyer shall indemnify, defend and
hold 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 insurance
proceeds or Tax benefits actually recovered or recoverable by any Seller
Indemnified Party (it being agreed that each Seller Indemnified Party shall use
commercially reasonable efforts to seek and obtain such recoveries), resulting
from, in connection with, or arising out of:

 

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

 

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

 

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

 

(d)           any
Liability to the extent relating to the operation by Buyer or Buyer’s
Affiliates, successors or assigns of the Purchased Assets or the DSD Business
after the Closing, including any obligations of Buyer to the Hired Personnel or
their representatives under the National Labor Relations Act, as amended from
time to time;

 

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

 

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

 

(g)           any
Liabilities incurred by Seller under the WARN Act and any state WARN statutes
as a result of any layoffs by Buyer at any Transferred Facility following the
Closing, except to the extent attributable to any inaccuracy of the list
provided by Seller under Section 3.2(h)(i);

 

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

 

57

 

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

 

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

 

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

 

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

 

(l)            Buyer’s
relocation of any Hired Personnel during the 90-day period following the Closing
to any location other than an Approved Location.

 

8.4.          Indemnification
Procedures.

 

(a)           Procedures
Relating to Indemnification.  In the
event that a third party files a lawsuit, enforcement action or other
proceeding against a party entitled to indemnification under this Article VIII
(an “Indemnified Party”) or the
Indemnified Party receives notice of, or becomes aware of a condition or event
which may entitle such party to the benefit of any indemnity hereunder in
connection with a claim by a third party (a “Third
Party Claim”), the Indemnified Party shall give written notice
thereof (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 reasonable
detail the nature of the claim, including an estimate, if practicable, of the
amount of damages that have been or may be suffered or incurred by the
Indemnified Party attributable to such claim and the basis of the Indemnified
Party’s request for indemnification under this Agreement.  Notwithstanding the foregoing, failure by an
Indemnified Party to provide notice on a timely basis of a Third Party Claim
shall not relieve the Indemnifying Party of its obligations hereunder, unless,
and then solely to the extent that, the Indemnifying Party is prejudiced
thereby.

 

(b)           Conduct
of Defense.  If a Third Party Claim
is made against an Indemnified Party, the Indemnifying Party shall have the
right, upon written notice to the Indemnified Party (the “Defense
Notice”) within fifteen (15) days of its receipt from the
Indemnified Party of the Claim Notice, to conduct at its expense the defense
against such Third Party Claim in its own name, or, if necessary, in the name
of the Indemnified Party; provided, however, that if (A) such claim seeks
injunctive or other equitable relief involving the Indemnified Party or any of
its Affiliates, (B) any insurance carrier for the Indemnified Party or any
of its Affiliates requires, as a condition to such Person’s eligibility to
recover insurance proceeds on account of any such claim, that such carrier
control the defense of any such claim, or (C) the Indemnifying Party
notifies the Indemnified Party that it is not required to provide
indemnification for such claim, then, in any such case, the Indemnified Party
shall be entitled to conduct the defense against such claim, at 

 

58

 

the expense of the Indemnifying Party. 
When the Indemnifying Party conducts the defense, the Indemnified Party
shall have the right to approve the defense counsel representing the
Indemnifying Party in such defense, which approval shall not be unreasonably
withheld or delayed, and in the event the Indemnifying Party and the
Indemnified Party cannot agree upon such counsel within ten (10) days
after the Defense Notice is provided, then the Indemnifying Party shall propose
an alternate defense counsel, which shall be subject again to the Indemnified
Party’s approval, which approval shall not be unreasonably withheld or
delayed.  If the Indemnifying Party
assumes the defense of any Third Party Claim made against the Indemnified
Party, the Indemnifying Party shall notify the Indemnified Party in writing at
the point that the Indemnifying Party determines that it is not required to
provide indemnification to the Indemnified Party under this Article VIII.

 

(c)           Conduct
by Indemnified Party.  In the event
that the Indemnifying Party shall fail to give the Defense Notice within the
time and as prescribed by Section 8.4(b), or if the Indemnifying
Party 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 to
conduct such defense in good faith with counsel reasonably acceptable to the
Indemnifying Party, but the Indemnified Party (or any insurance carrier
defending such Third Party Claim on the Indemnified Party’s behalf) shall be
prohibited from compromising or settling the Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed.  Failure at any time
of the Indemnifying Party to diligently defend a Third Party Claim as required
herein shall entitle the Indemnified Party to assume the defense and settlement
of such Third Party Claim as if the Indemnifying Party had never elected to do
so as provided in this Section. 
Notwithstanding anything contained in this Article VIII to the
contrary, the Indemnified Party may, by prior written notice to the Indemnifying
Party, assume the defense of any Third Party Claim if the Indemnified Party
shall have been advised by counsel that there are one or more legal defenses
available to the Indemnified Party which are different from or in addition to
those available to the Indemnifying Party, and, in the reasonable opinion of
the Indemnified Party and its counsel, counsel for the Indemnifying Party could
not adequately represent the interests of the Indemnified Party because such
interests would be in conflict with those of the Indemnifying Party.

 

(d)           Cooperation.  In the event that the Indemnifying Party does
deliver a Defense Notice and thereby elects to conduct the defense of such
Third Party Claim in accordance with Section 8.4(b), the
Indemnified Party will cooperate with and make available to the Indemnifying
Party such assistance, personnel, witnesses and materials that are reasonably
relevant to such Third Party Claim as the Indemnifying Party may reasonably
request.  Each Indemnified Party shall
reasonably consult and cooperate with each Indemnifying Party with a view
towards mitigating Losses in connection with claims for which a party seeks
indemnification under this Article VIII.

 

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

 

59

 

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 or
as a result of such settlement, such settlement could lead to Liability or
create any financial or other obligation on the part of the Indemnified Party
for which the Indemnified Party is not entitled to indemnification
hereunder.  If the Indemnifying Party
receives a firm offer to settle a Third Party Claim (other than a Third Party
Claim seeking injunctive or other nonmonetary relief affecting the Indemnified
Party) which releases the Indemnified Party completely in connection with such
Third Party Claim, which offer the Indemnifying Party is permitted to settle
under this Section 8.4, and the Indemnifying Party desires to
accept such offer, the Indemnifying Party will give written notice to the
Indemnified Party to that effect.  If the
Indemnified Party objects to such firm offer within ten (10) days after
its receipt of such notice, the Indemnified Party may continue to contest or
defend such Third Party Claim and, in such event, the maximum Liability of the
Indemnifying Party as to such Third Party Claim will not exceed the amount of
such settlement offer, plus costs and expenses paid or incurred by the
Indemnified Party up to the point such notice had been delivered.  Notwithstanding anything contained herein to
the contrary, the Indemnifying Party (or any insurance carrier defending such
Third Party Claim on the Indemnifying Party’s behalf) shall not agree, without
the Indemnified Party’s consent, to the entry of any Judgment or settlement,
compromise or decree that provides for injunctive or other nonmonetary relief
affecting the Indemnified Party.

 

(f)            Binding
Obligations.  Any Judgment entered or
settlement agreed upon in the manner provided herein shall be binding upon the
Indemnifying Party, and shall be conclusively deemed to be an obligation with
respect to which the Indemnified Party is entitled to prompt indemnification
hereunder, subject to the Indemnifying Party’s right to appeal an appealable
Judgment or order.

 

8.5.          Nature
of Other Liabilities.  In the event
any Indemnified Party should have a claim against any Indemnifying Party
hereunder which does not involve a Third Party Claim, the Indemnified Party
shall transmit to the Indemnifying Party a written notice (the “Indemnity Notice”) describing in
reasonable detail the nature of the claim and the basis of the Indemnified
Party’s request for indemnification under this Agreement.  If the Indemnifying Party does not notify the
Indemnified Party within forty-five (45) days from its receipt of the Indemnity
Notice that the Indemnifying Party disputes such claim (a “Dispute Notice”), the claim specified by
the Indemnified Party in the Indemnity Notice shall, subject to the further
provisions of this Article VIII, be deemed a Liability of the Indemnifying
Party under this Article VIII.

 

8.6.          Indemnification
Limits and Restrictions.

 

(a)           None
of Buyer or any other Buyer Indemnified Party shall be entitled to any
indemnity under Section 8.2(a) unless and until all Indemnity
Claims by the Buyer Indemnified Parties exceed one percent (1%) of the Purchase
Price in the aggregate (“Basket”),
at which time the Person(s) seeking indemnification shall be entitled to
recover all Losses in excess of the Basket; provided, however, that in no event
shall the Seller Parties, individually or in the 

 

60

 

aggregate, be liable for Losses pursuant to Section 8.2(a) in
excess of ten percent (10%) of the Purchase Price, and further provided that in
no event shall any Indemnified Party assert an Indemnity Claim which
individually seeks recovery of less than $5,000.00 (“Mini Basket”).  Notwithstanding anything herein to the
contrary, (i) the Basket shall not apply to any Losses resulting from the
inaccuracy 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 (but
only 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 commission
of fraud by any Seller Party, and (ii) with respect to Losses that result
from the inaccuracy or breach by a Seller Party of any representation or warranty
pursuant to Section 4.21 (Hazardous Substances), in no event shall
the Seller Parties, individually or in the aggregate, be liable for such Losses
pursuant to Section 8.2(a) in excess of fifteen percent (15%)
of the Purchase Price.  For purposes of calculating the
Basket, Claims which may not be asserted because of the Mini Basket shall not
be counted.  For the avoidance of doubt,
no Excluded Liability is subject to any basket or cap even if the liability is
also the subject of a representation or warranty by the Seller Parties.

 

(b)           In
no case shall Losses include (a) any incidental, consequential, indirect
or special losses or damages (including, without limitation, lost profits, lost
revenues and loss of business), whether foreseeable or not, whether occasioned
by any failure to perform or the breach of any representation, warranty,
covenant or other obligation under this Agreement or any Additional Document
for any cause whatsoever, or (b) fees and expenses of more than one
counsel with respect to any Indemnity Claim or Claims arising out of the same
general allegations or circumstances.

 

(c)           All
indemnification payments under Sections 8.2(a) or 8.3(a) shall
be deemed adjustments to the Purchase Price.

 

8.7.          Additional
Limitations of Liability.  Notwithstanding
anything in this Article VIII to the contrary:

 

(a)           Seller
shall have no Liability to Buyer Indemnified Parties (for indemnification or
otherwise) for any inaccuracy or breach of any representation or warranty to
the extent that Buyer had knowledge at or prior to the time of Closing of such
inaccuracy or breach.

 

(b)           Subject
to Section 8.6(b), Buyer Indemnified Parties may not recover Losses
more than once for any specific facts, omissions or circumstances
notwithstanding the fact that such facts, omissions or circumstances may
constitute the breach of more than one representation or warranty; provided, however, that
the parties recognize that there may be different types of Losses that arise
from the same facts, omissions or circumstances.

 

(c)           In
the event that Seller pays any amount to any Buyer Indemnified Party or other
Person pursuant to Section 8.2, or incurs any costs or expenses in
defending any Third Party Claim for which Seller has no Liability either
pursuant to Section 8.2 or because of the 

 

61

 

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 because
Seller has no Liability either pursuant to Section 8.2 or because
of the application of the Basket, Buyer shall, promptly following Seller’s
request therefor, reimburse Seller (i) for all such amounts paid or
incurred in the case of any cost or expense for which Seller has no Liability
pursuant to Section 8.2, or (ii) up to the amount of the
Basket in the case of any cost or expense for which Seller has no Liability
because of the application of the Basket.

 

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

 

(e)           No
party shall exercise any right of set off or recoupment with respect to any
Losses to which it claims a right of indemnity pursuant to this Article VIII,
including, without limitation, in the case of Buyer, any right of setoff
against amounts owed by Buyer under the Note, except that if Seller has any
indemnity obligation under this Article VIII or otherwise under this
Agreement, 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 the
balance to the principal amount of the Note.

 

8.8.          Exclusive
Remedy.  Except in the case of fraud
and as provided in Section 6.13 
and to the extent that any provision of this Agreement expressly
provides for specific performance or injunctive relief, the rights and obligations
of the parties under this Article VIII are the exclusive rights and
obligations 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 other
rights or remedies to which the party entitled to indemnification hereunder
would otherwise be entitled as a result of such breach.

 

ARTICLE IX.

TERMINATION AND ABANDONMENT

 

9.1.          Methods
of Termination.  Subject to the
provisions of Section 3.1 relating to the deferral of the Closing
Date, this Agreement may be terminated and the transactions contemplated hereby
may be abandoned at any time prior to the Closing:

 

(a)           by
mutual written consent of Buyer and Seller;

 

(b)           by
either Buyer or Seller:

 

62

 

(i)            if the other party shall have failed
to comply with any of its obligations or agreements contained in this Agreement
required to be complied with or performed prior to the date of such
termination, which failure to comply has not been cured within ten (10) business
days following receipt by such other party of written notice of such failure to
comply;

 

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

 

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

 

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

 

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

 

9.2.          Procedure
and Effect of Termination.  In the
event of termination of this Agreement by either Buyer or Seller, as provided
in Section 9.1, this Agreement shall immediately become void and
there shall be no Liability hereunder on the part of any party except that
nothing contained in this Section shall relieve any party hereto from any
Liability for any breach of a representation, warranty or covenant contained in
this Agreement.

 

ARTICLE X.

MISCELLANEOUS

 

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

 

If to any Seller Party:

 

Sara Lee Corporation

3500 Lacey Road

Downers Grove, IL  60015

Attention:  General Counsel

Fax No.:  630-598-6951

 

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If to Buyer:

 

Farmer Bros. Co.

20333 South Normandie Avenue

Torrance, CA  90502

Attention:  Chief Executive Officer

Fax No.:  (310) 320-2430

 

With a copy to:

 

Anglin, Flewelling, Rasmussen, Campbell &
Trytten LLP

199 S. Los Robles Avenue, Suite 600

Pasadena, CA 91101

Attention:  John M. Anglin, Esq.

Fax No.:  (626) 577-7764

 

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

 

10.3.        Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns.  No
party may assign or delegate or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the other party; provided that either party may assign its rights under this
Agreement to any Affiliate of such party or any successor or transferee of such
party as a result of any business combination (in any or all of which cases
such party nonetheless shall remain responsible for the performance of all of
its obligations under this Agreement).

 

10.4.        Construction;
Interpretation; Certain Terms.  The
headings contained in this Agreement, the Additional Documents and the
schedules and exhibits hereto and thereto are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.  Article, section, schedule,
exhibit, recital and party references are to this Agreement unless otherwise
stated; the exhibits and schedules attached hereto are part of this Agreement
as if fully set forth herein.  All
references to singular or plural or masculine or feminine shall include the
other as the context may require.  The
words “hereof,” “herein,” “hereunder” and words of similar import shall refer
to this Agreement as a whole and not to any particular Section or
provision of this Agreement, and reference to a particular Section of this
Agreement shall include all subsections thereof.  No party, nor its counsel, shall be deemed
the drafter of this 

 

64

 

Agreement for purposes of construing the provisions of this Agreement,
and all provisions of this Agreement shall be construed in accordance with
their fair meaning, and not strictly for or against any party.  The term “including” as used in this
Agreement shall mean including, without limitation, and shall not be deemed to
indicate an exhaustive enumeration of the items at issue.  Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations 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 covenant
relating 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 fact
that the party is in breach of the first representation, warranty or covenant.

 

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

 

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

 

10.7.        Entire
Agreement.  This Agreement, together
with the Exhibits and Schedules and Additional Documents, constitutes the
entire agreement among the parties pertaining to the subject matter hereof and
thereof, and supersede all prior and contemporaneous, oral and written,
agreements and understandings pertaining thereto.

 

10.8.        Governing
Law; Consent to Jurisdiction; Venue. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois, without giving effect to conflict of law
principles.  Each party hereto hereby
agrees that any proceeding relating to this Agreement, the Additional Documents
and the transactions contemplated hereby or thereby shall be brought solely in
the state or federal court located in Chicago, Illinois.  Each party hereto hereby consents to personal
jurisdiction in any such action brought in any such state or federal court,
consents to service of process by registered mail made upon such party, waives
any objection to venue in any such state or federal court and any claim that
any such state or federal court is an inconvenient forum.

 

10.9.        Expenses.  Except as otherwise specifically provided in
this Agreement, Buyer shall pay all costs and expenses incurred by or on its
behalf and Seller shall pay all costs and expenses incurred by or on behalf of
Seller Parties.

 

10.10.      Third-Party
Beneficiaries.  Nothing herein
expressed or implied is intended to or shall be construed to confer upon or
give any Person, other than the parties hereto and their respective successors
and permitted assigns, any rights or remedies under or by reason of this
Agreement.

 

65

 

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

 

(a)           in
the case of Seller:  George Michael
Knowles, Sally MacDonald, Daniel Hickman, Tom Hayes, Heidi Modaro, Dan Schober
and Phil Lawrence; and

 

(b)           in the case of
Buyer:  Roger M. Laverty III, Drew Webb
and John E. Simmons.

 

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

 

10.13.      Waivers of Trial by Jury.  THE SELLER PARTIES AND BUYER HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER ADDITIONAL
DOCUMENTS, AND CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED 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 the
terms 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 other
documents 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 or
indirectly, controls, or is controlled by or under common control with, the
Person in question, or (b) any person who is a director or executive
officer of such Person.  For purposes of
this definition, “control”
of a Person shall mean the power, direct or indirect, to vote or direct the
voting of fifty percent (50%) or more of the outstanding voting securities of such
Person or to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting securities, veto rights or
otherwise.

 

66

 

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

 

“Applicable Law”
means, with respect to any Person, any domestic or foreign, federal, state or
local statute, law, constitution, code, edict, proclamation, treaty, ruling,
pronouncement, decision, opinion, interpretation, ordinance, rule, regulation,
order, writ, injunction, directive, Judgment, permit, license, decree or other
requirement issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any Governmental
Authority applicable to such Person or any of its Affiliates or any of their
respective properties, assets, officers, directors, employees, consultants or
agents (in connection with such officer’s, director’s, employee’s, consultant’s
or 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 a
Transferred Facility immediately prior to Closing, such Transferred Facility at
which the Hired Personnel were employed immediately prior to Closing or any
other facility of Buyer which is located not more than twenty (20) miles from
such Transferred Facility, and (b) in the case of Hired Personnel who,
immediately prior to Closing, were not employed at a Transferred Facility, any
facility of Buyer which is located not more than twenty (20) miles from the
location of the facility of Seller at which such Hired Personnel worked
immediately 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 by
employees and visitors.  For the
avoidance of doubt, Aramark’s Office Coffee Service Business does not include
any other parts of Aramark’s business, even those parts that may include the
sale of coffee, tea and related products as part of Aramark’s business of
managing 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 a
principal sum of not less than $20,000,000 substantially on the terms (or
better 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 the
date hereof shall have been imposed upon trading in securities generally by any
Governmental Authority or by any national securities exchange, (b) a
general banking moratorium shall have been established by Federal, Illinois,
Maryland or New York authorities, or (c) a war involving the United States
shall have been declared, or any conflict involving the armed forces of the
United States shall have escalated, or any other national emergency related to 

 

67

 

the effective operation
of government or the financial community shall have occurred, which could
reasonably be expected to materially and adversely affect the DSD Business.

 

“Basket” shall
have 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 DSD
Business other than those consolidated, unitary or combined, Tax returns filed
by Seller with respect to both the DSD Business and other businesses owned or
operated by Seller and its Affiliates.

 

“Buyer” shall
have 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 which
Seller delivers Consumable Inventory, or to which Consumable Inventory is in
transit, at or prior to Closing.

 

“Buyer Trademark License
Agreement” 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 Cocoa
Transition 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” shall
have the meaning set forth in Section 4.14.

 

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

 

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

 

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

 

68

 

“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” means
the Internal Revenue Code of 1986, as amended.

 

“Coffee Food Service Business”
shall mean the sale of coffee, tea and related products to (i) customers
who offer or provide (whether pursuant to a sale or otherwise) coffee, tea and
related products to consumers only after preparation into a beverage, (ii) customers
who distribute coffee, tea and related products only to third parties (who are
not consumers) who offer or provide (whether pursuant to a sale or otherwise)
such coffee, tea or related products to customers only after preparation into a
beverage, (iii) customers engaged in the business of supplying coffee, tea
and related products to businesses and other persons and entities who in turn
offer or provide (whether pursuant to a sale or otherwise) brewed coffee or tea
by the cup (i.e., office coffee supply), (iv) customers who supply or
provide coffee, tea or related products only to vending machines, and (v) customers
engaged in the business of selling coffee, tea and related products directly to
customers 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, all
disposable products (meaning products that are customarily disposed of after
their use), and all other similar items, that are classified as inventory
consistent with Seller’s customary accounting practices, the Financial
Statements and the Historical Financial Statements.

 

“Contract(s)”
shall mean any agreement, contract, license, obligation, promise,
understanding, arrangement, commitment or undertaking of any nature that is
legally binding, whether oral or written and whether express or implied (other
than 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.

 

69

 

“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 transactions
of 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 the
United States through Seller’s network of Facilities and Vehicles such that the
products are delivered by Seller directly to customer locations where such
products are consumed, (ii) Seller’s business of selling coffee, tea, and
related products in the United States to customers in sales transactions
procured by sales personnel employed by the direct store delivery portion of
the Sara Lee foodservice business which are reflected in Seller’s books and
records as DSD Business transactions, (iii) Seller’s business in the
United States of marketing, distributing and selling coffee, tea and related
products under the Trade Names “Cain’s” and “McGarvey” to grocers and
retailers, (iv) Seller’s business in the United States of marketing,
distributing and selling coffee, tea, and related products in the United States
through Seller’s network of Facilities and Vehicles to Aramark’s Office Coffee
Service Business, but only to the extent that such products are ordered by
these entities in connection with their business of supplying other businesses
with such products for on-site consumption, (v) the distribution, sale,
service and maintenance of Machines in connection with the business activities
described in items (i) through (iv), and (vi) any other business
which Seller internally designated as part of the United States DSD Coffee
Business 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 Coffee
Business shall not include any part of Seller’s business with Aramark other
than Aramark’s Office Coffee Service Business.

 

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

 

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

 

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

 

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

 

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

 

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

 

70

 

States through Seller’s
network of Facilities and Vehicles such that the products are delivered or sold
by 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 and
administrative 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, threatened
release, control or cleanup of any Hazardous Substances, as amended and as now
or hereafter in effect, including but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601
et seq.), as amended by the Superfund Amendments and Reauthorization Act of
1986 (“CERCLA”), the Federal Water Pollution Control Act (33 U.S.C. Section 1251
et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Safe
Drinking Water Act (42 U.S.C. (S)3808 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), as amended by the Hazardous
and 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 Transportation
Act (49 U.S.C. Section 1801 et seq.), the Clean Water Act (33 U.S.C. Section 1321
et seq.), and any similar federal, state or local laws, ordinances or
regulations implementing such laws.

 

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

 

“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended.

 

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

 

“Estimated Inventory and
Prepaid Excess” shall have the meaning set forth in Section 2.1.

 

“Estimated Inventory and
Prepaid Value” shall have the meaning set forth in Section 2.1.

 

71

 

“Estimated Inventory and
Prepaid 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 solely
through the DSD Business.

 

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

 

“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 governmental
authority, tribal authority, quasi-governmental authority, instrumentality,
court, government or self-regulatory organization, commission, tribunal or
organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.

 

“Green Coffee and Tea
Purchase 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 hazardous
material, hazardous or toxic waste, or hazardous, toxic or radioactive
substance, including, without limitation petroleum or petroleum products.

 

“Hazardous Substance
Release” 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 any
Hazardous Substance, and otherwise as defined in any Environmental Law.

 

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

 

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

 

72

 

“Historical Financial
Statements” 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 235
N. Norwood, Houston, TX on Exhibit A.

 

“Houston Software”
shall mean the Business Planning and Control System Software (BPCS) which runs
on 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 benefits
recovered or recoverable by the Person(s) seeking indemnification related
thereto, 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 raw
materials, work in process, finished products, wrapping, supply items,
packaging items and similar items.

 

“IRS” shall
have 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 use
and 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 data
and design and engineering specifications, research records, market surveys and
all promotional literature, customer and supplier lists and similar data.

 

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

 

73

 

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

 

“Leased Miscellaneous Vehicles” means the
vehicles identified on Schedule 1.1(f) as “Leased
Miscellaneous Vehicles”, as such schedule may be amended by Seller to reflect
dispositions 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.

 

“Leased
Real Property”
shall mean the Transferred Facilities listed in Exhibit A and
designated therein as leased by Seller and transferred to Realty, including all
leasehold or subleasehold estates and other rights to use or occupy any land,
buildings, structures, improvements, fixtures or other interest in real
property 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 DSD
Business, including dispositions as a result of lease terminations, casualties,
obsolescence or the like.

 

“Leased Sales Vehicles” means the vehicles
identified on Schedule 1.1(f) as “Leased Sales Vehicles”, as
such schedule may be amended by Seller to reflect dispositions 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.

 

“Leased Service Trucks”
means the service trucks and other vehicles identified on Schedule 1.1(f) as “Leased 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 DSD
Business, 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 and
Leased Miscellaneous Vehicles.

 

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

 

“Lien” shall
have 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 Distribution
Agreement” shall have the meaning set forth in Section 3.2(d)(viii).

 

74

 

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

 

“Machines”
means brewed and liquid coffee equipment, including coffee brewers and
grinders, 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 are
legally binding to which any Seller Party is a party or is bound and which
relate not only to the DSD Business, but also to other products or businesses
of the Seller Parties, but shall not include any Contracts that are Excluded
Assets.

 

“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) of
ERISA or Section 414(f) of the Code.

 

“Note” shall
have the meaning set forth in Section 2.1(b).

 

“NSO Business” shall mean Seller’s business
of manufacturing, processing, packaging, marketing, distributing and selling of
coffee, tea and related products through Seller’s national sales organization
food service business.

 

“Oklahoma City Plant” shall mean those certain parcels of real estate
commonly 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” shall
have the meaning set forth in Section 4.10(b).

 

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

 

75

 

to the Trademarks and
Trade Names set forth on Schedules 1.1(a)-1 and 2, (iii) shop
rights; (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) and
all improvements thereto, (vi) Patents, (vii) trade secrets, but only
to the extent used in the United States, and (viii) all other intellectual
property rights of the Seller Parties that relate exclusively to the DSD
Business and are used in the United States, but not Seller’s right or license
to refer to product as “100% Columbian Coffee”.

 

“Owned Miscellaneous
Vehicles” means the
vehicles used exclusively by Hired Personnel who are hired by Buyer at
Closing, and all other vehicles owned by Seller and located at the Transferred
Facilities at the Closing and not constituting Owned Route Trucks or Owned
Service Trucks, as identified on Schedule 4.13-2
as “Owned Miscellaneous Vehicles”, as such schedule may be amended by Seller to
reflect dispositions of any such Vehicles in the ordinary course of the DSD
Business, including dispositions as a result of casualties, obsolescence or the
like.

 

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

 

“Owned Route Trucks” means the route
trucks owned by Seller and identified
on Schedule 4.13-2 as “Owned 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 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 DSD
Business, including dispositions as a result of casualties, obsolescence or the
like.

 

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

 

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

 

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

 

76

 

“Permitted Encumbrances”
shall mean with respect to each parcel of Owned Real Property:  (a) all real estate taxes and
assessments, both general and special, not yet due or payable; (b) zoning
and building ordinances and subdivision and land use regulations; (c) all
instruments recorded in the real estate records of the jurisdiction in which
such Real Property is located that affect the status of title to the Owned Real
Property; and (d) all matters of survey and all other matters with respect
to 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 ordinary
course of the DSD Business with respect to charges not yet due and payable, (ii) security
interests of equipment lessors to evidence title retention; (iii) statutory
liens for current Taxes or assessments not yet due or payable, and (iv) with
respect to the Owned Real Property only, Permitted Encumbrances.

 

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

 

“Person” means
any individual, Governmental Authority, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company
or 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 Business
processed, manufactured, marketed, labeled or sold by Seller or any of its
Affiliates 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 including
coffee, 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).

 

77

 

“Proprietary Rights”
shall mean (i) Patents, (ii) Trademarks, (iii) Trade Names, (iv) Know-how,
(v) proprietary rights in trade dress and packaging, (vi) shop
rights, (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) and
all improvements thereto, (vii) trade secrets, (viii) websites and
domain names, (ix) computer software (including source code, executable
code, applets, interfaces, scripts, screen designs, menus and menu structures,
design and programming tools, data, databases and related documentation), and (x) all
other intellectual property rights of the applicable Person, in each case
whether registered or not and in each case wherever such rights exist
throughout the world and including the right to recover for any past
infringement.

 

“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 Consumable
Inventory” 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, guaranties
and other agreements with respect thereto, pursuant to which Realty hold any
Leased Real Property, including the right to all security deposits and other
amounts and instruments deposited by or on behalf of any Seller Party or Realty
thereunder.

 

“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 other
representative.

 

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

 

78

 

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

 

“Sauce Supply Agreement”
shall mean the agreement with Richelieu Foods, Inc. relating to the supply
of 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” means
the Securities and Exchange Commission.

 

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

 

“Seller” shall
have the meaning set forth in the Preamble.

 

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

 

“Seller Expense
Reimbursement” 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 the
meaning set forth in the Preamble.

 

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

 

“Seller Trademark License
Agreement” 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 Products
through both the DSD Business and NSO Business.

 

79

 

“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 any
nature including, without limitation, federal, state, local or foreign income
tax, 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 or
employer payroll tax, FICA or FUTA), real or personal property tax or ad
valorem tax, sales or use tax, excise tax, windfall profits tax, customs
duties, capital stock tax, transfer tax, registration tax, estimated tax, stamp
tax 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 amount
imposed by any Governmental Authority responsible for the imposition of any such
tax, 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 with
respect thereto which are used in the business of the applicable Person.

 

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

 

“Transferred Facilities”
shall mean the Owned Real Property or Leased Real Property to be transferred to
Buyer 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).

 

80

 

“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)

 

81

 

The parties hereto have caused this Asset Purchase
Agreement 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 Asset
Purchase Agreement

 

 

EXHIBIT A

 

Facilities

 

 

EXHIBIT B

 

Form of Note

 

 

EXHIBIT C

 

Form of Security Agreement

 

 

EXHIBIT D

 

Form of Seller Trademark License
Agreement

 

 

EXHIBIT E

 

Form of Buyer Trademark License
Agreement

 

 

EXHIBIT F

 

Form of Superior Trademark License
Agreement

 

 

EXHIBIT G

 

Form of Seller Transition Services
Agreement

 

 

EXHIBIT H

 

Form of Cappuccino and Cocoa Transition
Agreement

 

 

EXHIBIT I

 

Form of Buyer Co-Pack

 

 

EXHIBIT J

 

Form of Seller Co-Pack 

 

 

EXHIBIT K

 

Form of Liquid Coffee Distribution
Agreement

 

 

EXHIBIT L

 

Form of Green Coffee and Tea Purchase
Agreement 

 

 

EXHIBIT M

 

Form of Formula License Agreement 

 

 

EXHIBIT N

 

Form of Foreign Investment in Real
Property Tax Act Affidavit 

 

 

EXHIBIT O

 

Form of Option Agreement

 

 

EXHIBIT P

 

Historical Financial Statements

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