STOCK PURCHASE AGREEMENT
BY AND AMONG
VLASIC FOODS INTERNATIONAL INC.,
MONEY'S FOODS (U.S.) LTD.
AND
MONEY'S MUSHROOMS LTD.
DECEMBER 17, 1999
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TABLE OF CONTENTS
Section Page
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1. Definitions................................................ 1
2. The Purchase and Sale of the Shares........................ 11
2.1 The Purchase and Sale of the Shares............... 11
2.2 Closing........................................... 11
2.3 Closing Deliveries................................ 11
2.4 Post-Closing Adjustment........................... 12
2.5 Deposit........................................... 13
2.6 Escrow............................................ 13
3. Representations and Warranties of the Seller............... 15
3.1 Corporate......................................... 15
3.2 Authorization..................................... 15
3.3 Validity of Contemplated Transactions............. 16
3.4 Capitalization and Stock Ownership................ 16
3.5 Financial Statements.............................. 17
3.6 Title to Assets and Related Matters............... 17
3.7 Real Property..................................... 18
3.8 Accounts Receivable............................... 20
3.9 Inventory......................................... 20
3.10 Absence of Undisclosed Liabilities................ 20
3.11 Taxes............................................. 20
3.12 Subsidiaries...................................... 21
3.13 Legal Proceedings and Compliance with Law......... 21
3.14 Contracts......................................... 22
3.15 Insurance......................................... 23
3.16 Intellectual Property............................. 24
3.17 Year 2000 Compliance Matters...................... 25
3.18 Employee Relations................................ 25
3.19 ERISA............................................. 26
3.20 Corporate Records................................. 28
3.21 Absence of Certain Changes........................ 28
3.22 Previous Sales; Warranties........................ 29
3.23 Customers and Suppliers........................... 29
3.24 Finder's Fees..................................... 29
3.25 Additional Information............................ 29
3.26 Environmental Matters............................. 30
4. Representations and Warranties of the Buyer................ 31
4.1 Corporate......................................... 31
4.2 Authorization..................................... 31
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4.3 Validity of Contemplated Transactions............. 31
4.4 Finder's Fees..................................... 32
4.5 Litigation........................................ 32
4.6 Financing......................................... 32
4.7 Supply Agreement.................................. 32
5. Mutual Covenants........................................... 32
5.1 Fulfillment of Conditions......................... 32
5.2 Consents.......................................... 32
5.3 HSR Filing........................................ 33
5.4 Disclosure of Certain Matters..................... 33
5.5 Public Announcements.............................. 34
5.6 Expenses.......................................... 34
6. Covenants of the Parties................................... 34
6.1 Restricted Actions................................ 34
6.2 Access............................................ 35
6.3 Subsequent Financial Information.................. 35
6.4 Acquisition Proposals............................. 35
6.5 Competition and Confidentiality................... 36
6.6 Tax Matters....................................... 37
6.7 Confidentiality................................... 42
6.8 Supply Agreement.................................. 42
6.9 Operation of the Buyer............................ 42
6.10 Nonsolicitation by the Buyer...................... 42
6.11 Collective Bargaining Agreements.................. 43
6.12 Certain Actions by Seller and Company............. 43
6.13 Uncollected Accounts Receivable................... 43
6.14 Collective Bargaining Negotiations................ 44
6.15 Transition Planning............................... 44
6.16 Trademark License................................. 44
6.17 Corporate Name Change............................. 45
6.18 Completion of Environmental Due Diligence......... 45
6.19 Employee Benefit Matters.......................... 46
6.20 Litigation........................................ 47
6.21 UPC............................................... 47
6.22 Real Property Liens............................... 47
6.23 Assignments....................................... 47
6.24 Direction of the Company.......................... 48
6.25 Guaranty.......................................... 48
7. Conditions Precedent to the Buyer's Obligations............ 48
7.1 Representations True at Closing................... 48
7.2 Performance of Covenants.......................... 48
7.3 Certificates...................................... 48
7.4 Litigation Affecting Closing...................... 48
7.5 Material Adverse Change........................... 48
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7.6 Governmental Approvals............................ 48
7.7 Consents.......................................... 48
7.8 Legal Opinion..................................... 49
7.9 Ancillary Documents............................... 49
7.10 Company Documents................................. 49
7.11 Assignment of Supply Agreement.................... 49
7.12 Release of Guarantees............................. 49
7.13 Release - CSC-TIA................................. 49
7.14 Resignations of Officers and Directors............ 49
7.15 Tax Opinion....................................... 49
7.16 Seller Plans...................................... 49
7.17 Surveys and Title................................. 49
8. Conditions Precedent to Obligations of the Seller.......... 50
8.1 Representations True at Closing................... 50
8.2 Performance of Covenants.......................... 50
8.3 Certificates...................................... 50
8.4 Litigation Affecting Closing...................... 50
8.5 Governmental Approvals............................ 50
8.6 Legal Opinion..................................... 51
8.7 Ancillary Documents............................... 51
9. Indemnification............................................ 51
9.1 General Indemnification........................... 51
9.2 Tax Indemnification............................... 52
9.3 Environmental Indemnification..................... 53
9.4 Procedure for Claims.............................. 54
9.5 Third Party Claims................................ 56
9.6 Effect of Investigation or Knowledge.............. 57
9.7 Conflicts......................................... 57
10. Termination................................................ 57
10.1 Grounds for Termination........................... 57
10.2 Effect of Termination............................. 58
11. General.................................................... 58
11.1 Governing Law..................................... 58
11.2 Further Assurances................................ 58
11.3 Binding Effect.................................... 58
11.4 Waivers........................................... 59
11.5 Waiver of Jury Trial.............................. 59
11.6 Exhibits.......................................... 59
11.7 Entire Agreement.................................. 59
11.8 Notices........................................... 59
11.9 Interpretation.................................... 61
11.10 Counterparts; Facsimile Signature................. 61
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For purposes of this Current Report on Form 8-K, the following exhibits have
been omitted but will be supplied to the Securities and Exchange Commission upon
request:
A Schedule of Exceptions to Permitted Encumbrances
C Form of Transitional Services Agreement
4.6 Financing Letters
6.1(a) Employees-Seller
6.1(b) Employees-Buyer
6.16 Vlasic Farms Marks
6.20 Assumed Litigation
7.7 Consents
7.15 Tax Opinion
7.15(a) CSC Acknowledgment
7.17 Acreage
A separate Disclosure Schedule has also been omitted and will be supplied to the
Securities and Exchange Commission upon request.
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 17th day of December 1999, by and
among Money's Foods (U.S.) Ltd., a Washington corporation (the "Buyer"), Money's
Mushrooms Ltd., a British Columbia corporation (the "Parent"), and Vlasic Foods
International Inc., a New Jersey corporation (the "Seller"). Certain other terms
are used herein as defined below in Section 1 or elsewhere in this Agreement.
Background
The Seller desires to sell to Buyer, and the Buyer desires to purchase
from Seller, all of the outstanding capital stock of Vlasic Farms, Inc., an Ohio
corporation (the "Company").
WITNESSETH:
In consideration of the mutual promises, representations and
warranties, covenants, payments and actions herein provided, the parties hereto,
each intending to be legally bound hereby, do agree as follows:
1. Definitions.
For convenience, certain terms used in this Agreement are listed in
alphabetical order and defined or referred to below (such terms as well as any
other terms defined elsewhere in this Agreement shall be equally applicable to
both singular and plural forms of the terms defined).
"Accounts Receivable" means, as of any date, any accounts receivable
(billed or unbilled) and notes receivable.
"Acquisition Proposal" is defined in Section 6.4(b).
"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504(a) or any similar group defined under a similar provision of
state, local or foreign law.
"Affiliates" means, with respect to a particular Party, any Persons
controlling, controlled by or under common control with that Party, as well as
any officers and directors of that Party and their immediate family members. For
the purposes of the foregoing, ownership, directly or indirectly, of greater
than 50% of the voting stock or other equity interest shall be deemed to
constitute control. Notwithstanding the foregoing, neither Campbell Soup Company
nor any of its subsidiaries shall be deemed to be an affiliate of Seller or the
Company for any purpose of this Agreement.
"Agreement" means this Agreement and the Exhibits and Disclosure
Schedule attached hereto.
"Annual Financial Statements" is defined in Section 3.5.
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"Assets" means all of the assets of every kind and description, real
and personal, tangible and intangible, that are owned by the Company.
"Balance Sheet" is defined in Section 3.5.
"Balance Sheet Date" is defined in Section 3.5.
"Benefit Plan" means any (a) "employee benefit plan" as defined in
Section 3(3) of ERISA and (b) supplemental retirement, bonus, deferred
compensation, severance, incentive plan, program or arrangement or other
employee fringe benefit plan, program or arrangement.
"Business" means the entire business and operations of the Company
relating to the production and sale of fresh mushrooms and the other Products
listed on Schedule A and the production of spawn and supplement relating
thereto, but excluding the business and customer service functions which are
being performed by Seller for the Company.
"Business Day" means any day other than a Saturday or Sunday, or a day
on which the banking institutions of the State of New Jersey are authorized or
obligated by law or executive order to close.
"Business Materials" is defined in Section 6.16(b).
"Buyer" is defined above in the preamble.
"Buyer Indemnified Party" is defined in Section 9.1(a).
"CSC TIA" is defined in Section 9.2.
"Charter Documents" means a Person's certificate or articles of
incorporation, certificate defining the rights and preferences of securities,
articles of organization, general or limited partnership agreement, certificate
of limited partnership, joint venture agreement or similar document governing
the entity.
"Claim Notice" is defined in Section 9.4(a).
"Closing" is defined in Section 2.2.
"Closing Date" is the date on which the Closing is held.
"Closing Statement" means the statement as of the Closing Date (or
January 30, 2000 if the Closing Date is January 31, 2000) of Net Working
Capital, Net Fixed Assets, non-current worker's compensation liabilities and
non-current capitalized lease obligations of the Company which the Seller
intends to produce from the pro-forma balance sheet prepared by the Seller. For
the avoidance of any doubt, the pro-forma balance sheet will be composed of the
accounts on the Company's Hyperion balance sheet with the addition of accounts
for capitalized lease assets net
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of accumulated depreciation, capitalized lease obligations, capitalized interest
and worker's compensation liability; and excluding the following accounts: cash
in banks control lock box, Giorgio inventory swap, intercompany clearing
accounts, VFI headquarters management fee, WIN bonus accrual, accrued US federal
income taxes, accrued state income taxes, and re-engineering reserve. The
Hyperion and the pro-forma balance sheets do not include pension,
post-retirement benefit liabilities, medical claim liabilities and deferred
income taxes.
"Closing Value" is defined in Section 2.4(b).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is defined above in the preamble.
"Concurrence Notice" is defined in Section 2.4(c).
"Confidential Information" is defined in Section 6.5(b).
"Contract" means any written or oral contract, agreement, lease,
instrument, or other document or commitment that is binding on any Person or its
property under any applicable Law.
"Court Order" means any judgment, decree, injunction, order or ruling
of any Governmental Authority that is binding on any person or its property
under applicable Law.
"Damages" is defined in Section 9.1(a).
"Default" means (a) a breach, default or violation or (b) the
occurrence of an event that with or without the passage of time or the giving of
notice, or both, would constitute a breach, default or violation or give rise to
a right of termination or acceleration or a right to receive damages or a
payment of penalties.
"Deferred Tax Benefit" is defined in Section 2.4(b).
"Deposit" is defined in Section 2.5.
"Disclosure Schedule" is defined in Section 3.
"Dispute Notice" is defined in Section 2.4(c).
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest, other
than Permitted Encumbrances.
"Environment" means all air, surface water, groundwater, or land,
including land surface or subsurface, including all fish, wildlife, biota and
all other natural resources.
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"Environmental Claim" means any and all administrative or judicial
actions, suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
written communication, whether criminal or civil (collectively, "Claims")
pursuant to or relating to any applicable Environmental Law by any Person
(including any Governmental Authority, private person and citizens' group) based
upon, alleging, asserting, or claiming any actual or potential (a) violation of
or Liability under any Environmental Law, (b) violation of any Environmental
Permit prior to Closing or (c) Liability for investigatory costs, cleanup costs,
removal costs, remedial costs, response costs, natural resource damages,
property damage, personal injury, fines, or penalties arising out of, based on,
resulting from, or related to the presence, Release, or threatened Release into
the Environment, of any Hazardous Materials at any location, including but not
limited to any off-Site location to which Hazardous Materials or materials
containing Hazardous Materials were sent for handling, storage, treatment, or
disposal.
"Environmental Clean-up Site" means any location which is listed or
proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or on any
similar state list of sites requiring investigation or cleanup.
"Environmental Condition" means any condition or circumstance existing
as of or prior to the Closing Date, including the presence of Hazardous
Materials, whether created by the Seller, the Company or a third party, at or
relating to any Site (a) caused by or relating to a violation of any
Environmental Law, or (b) that gives rise to any civil or criminal Liability
under any Environmental Law, and in either case of subparagraph (a) or (b) of
this definition of "Environmental Condition," which is required to be
compensated for, investigated, remediated, or corrected by any Governmental
Authority with jurisdiction over such condition or circumstance and for which
such Governmental Authority has issued a Court Order requiring such
compensation, investigation, remediation, or correction. "Environmental
Condition" shall not include any compensation, investigation, remediation, or
correction given or undertaken by any Buyer Indemnified Party or any other
Person not pursuant to a Court Order.
"Environmental Law" means any and all applicable federal, state, local,
provincial and foreign, civil and criminal laws, statutes, ordinances, orders,
codes, rules, regulations, Environmental Permits, policies, guidance documents,
judgments, decrees, injunctions, or agreements with any Governmental Authority,
relating to the protection of the Environment, or governing the handling, use,
generation, treatment, storage, transportation, disposal, manufacture,
distribution, formulation, packaging, labeling, or Release of Hazardous
Materials, in existence as of the Closing Date, including the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the
Hazardous Material Transportation Act 49 U.S.C. Section 1801 et seq.; the
Federal Insecticide, Fungicide and Rodenticide Act 7 U.S.C. Section 136 et seq.;
the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section
6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and the state
analogies thereto, prior to the Closing Date; and any common law doctrine in
existence as of the Closing Date, including but
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not limited to, negligence, nuisance, trespass, personal injury, or property
damage related to or arising out of the presence, Release, or exposure to a
Hazardous Material.
"Environmental Notice" is defined in Section 2.6(a).
"Environmental Permit" means any federal, state, local, provincial, or
foreign permits, licenses, approvals, consents or authorizations required by any
Governmental Authority under or in connection with any Environmental Law and
includes any and all orders, consent orders or binding agreements issued or
entered into by a Governmental Authority under any applicable Environmental Law.
"Environmental Remedial Costs" means the total cost of remediating any
condition or circumstance existing as of or prior to the Closing Date, including
the presence of Hazardous Materials, whether created by the Seller, the Company
or a third party, at or relating to any Site (a) caused by or relating to a
violation of any Environmental Law or (b) that may give rise to any civil or
criminal Liability under any Environmental Law, as identified in the Phase I
Site Assessments or by the Buyer as a result of the Phase II Work. Environmental
Remedial Costs shall be quantified by a qualified environmental consultant
selected at the sole discretion of the Buyer and shall include a reasonably
detailed description of the costs and work necessary to remedy any such
condition or circumstances in accordance with the standards set forth in Section
9.3(c)(i) and (ii) of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all regulations and rules issued thereunder, or any successor law.
"ERISA Affiliate" means any Person that, together with the Seller, is
treated as a single employer under Section 414 of the Code or Section 4001 of
ERISA.
"Escrow Agent" means the Escrow Agent, if any, named in the Escrow
Agreement.
"Escrow Agreement" means the escrow agreement by and among the Seller,
the Buyer and the Escrow Agent, to be negotiated among such Persons after the
date of this Agreement and prior to the Closing, if required pursuant to Section
2.6 or, after the Closing, if any dispute regarding the Final Environmental
Remedial Cost has not been conclusively resolved as of the Closing.
"Escrow Funds" means that amount, if any, that is determined in
accordance with Section 2.6 hereof that will be placed in escrow and
administered in accordance with the Escrow Agreement.
"Final Environmental Remedial Costs" means Environmental Remedial Costs
that are (i) not objected to by Seller, (ii) revised and agreed upon by Buyer
and Seller or (iii) as determined by Peter J. Gerbasi, P.E. of Roux Associates
Inc., pursuant to the terms set forth in Section 2.6 of this Agreement.
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"Final Escrow Amount" is defined in Section 2.6(b).
"GAAP" means generally accepted US accounting principles consistently
applied.
"GAAS" means generally accepted US auditing standards.
"Governmental Authority" means any court, tribunal, arbitrator,
authority, agency, regulatory body, commission or other instrumentality of the
US or Canada, or any US or Canadian state, province, county, city or other
political subdivision.
"Governmental Permits" means all governmental permits, licenses,
registrations, certificates of occupancy, approvals and other governmental
authorizations.
"Hazardous Material" means petroleum, petroleum hydrocarbons or
petroleum products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls; and
any other chemicals, materials, substances or wastes in any amount or
concentration which are now defined as or included in the definition of
"hazardous substances," "hazardous materials," "hazardous wastes," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "pollutants," "regulated substances," "solid wastes," or
"contaminants" or words of similar import, under any Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indemnified Parties" is defined in Section 9.1(b).
"Indemnifying Parties" is defined in Section 9.4(a).
"Independent Accountant" is defined in Section 2.4(c).
"Intellectual Property" means trademarks, service marks, trade names,
Internet domain names, logos, designs, slogans, and general intangibles of like
nature, together with all goodwill, registrations and applications related to
the foregoing; patents (including any registrations, continuations,
continuations-in-part, renewals and applications for any of the foregoing);
copyrights (including any registrations and applications for any of the
foregoing); software (whether in source code or object code form and all
documentation, including user manuals and training materials); databases;
technology, trade secrets and other confidential information, know-how,
proprietary processes, formulae, algorithms, models, and methodologies; in each
case, as used in or necessary for the conduct of the Business as conducted
during the one-year period prior to the Closing Date or as used in or necessary
for the conduct of the Business as presently conducted.
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"Inventory" means any inventory of the Company, including raw
materials, supplies, packaging supplies, work in process and finished goods,
excluding those items historically expensed or booked as prepaid expense.
"IP License Agreement" is defined in Section 3.16.
"IRS" means the US Internal Revenue Service.
"Law" means any statute, law, ordinance, regulation, order or rule of
any Governmental Authority in effect as of or prior to the Closing Date,
including those covering environmental, energy, safety, health, transportation,
bribery, record keeping, zoning, antidiscrimination, antitrust, wage and hour,
and price and wage control matters.
"Liability" means any liability, indebtedness, obligation, expense,
claim, loss, damage, guaranty of or by any Person, absolute or contingent,
accrued or unaccrued, due or to become due, liquidated or unliquidated.
"Litigation" means any lawsuit, action, arbitration, administrative,
quasi-administrative or other legal proceeding, criminal prosecution or, to the
Seller's knowledge, governmental investigation.
"Material Adverse Effect" means a material adverse effect on the
Company, Business, Assets or Liabilities or the results of operations or
financial condition of the Company, taken as a whole.
"Minor Contract" is defined in Section 3.14(a).
"Napolean Property Lease" means the lease agreement dated March 30,
1998 for the premises located at the Southwest Quarter of Section 17, T-5-N,
R-7-E, Harriston Township, Henry County, Ohio.
"Net Fixed Assets" means, as of January 30, 2000 (or such other date
mutually acceptable to the Parties if the Closing Date is not January 31, 2000),
the sum of the Company's cost of fixed assets, as shown in the Company's
accounting records for property, plant, equipment and machinery, capitalized
interest, capitalized lease assets, net of accumulated depreciation and
amortization, plus projects in process net of accumulated depreciation.
"Net Working Capital" means, as of January 30, 2000 (or such other date
mutually acceptable to the Parties if the Closing Date is not January 31, 2000),
the sum of the Company's cash and cash equivalents, Accounts Receivable (net of
reserves), Inventory (net of LIFO reserve), and prepaid expenses, less trade
accounts payable, accrued liabilities, the current portion of worker's
compensation liabilities, the current portion of capitalized lease obligations
and general reserves.
"Non-Competition Period" is defined in Section 6.5.
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"Ordinary course" or "ordinary course of business" means the ordinary
course of business for the Company that is consistent with its past practices.
"Parties" means the Buyer, the Parent and the Seller, collectively, and
"Party" means any of the Buyer, the Parent or the Seller individually.
"Permitted Encumbrances" means (i) those exceptions to title to the
assets of the Company listed in the title reports attached to and made part of
the Disclosure Schedule other than those Encumbrances identified by Buyer on
EXHIBIT A and those Encumbrances that the Buyer cannot reasonably assess in the
absence of a current survey, and which, once plotted, would interfere with or
impair Buyer's use of any of the properties for its current use or otherwise
materially diminish the value of any such properties; (ii) any state of facts
that a current survey of the Real Property would disclose except matters which
would interfere with or impair Buyer's use of any of the properties for its
current use or otherwise materially diminish the value of any such properties;
(iii) Encumbrances listed on the Disclosure Schedule; (iv) statutory liens for
current Taxes, assessments or other governmental charges not yet due or payable
or the validity of which is being contested in good faith by appropriate
proceedings and is listed on the Disclosure Schedule; (v) mechanics', carriers',
workers', repairers' and other similar liens arising or incurred in the ordinary
course of business relating to Liabilities which are not yet due and payable;
and (vi) zoning, entitlement, conservation restrictions and other land use and
environmental regulations by governmental authorities except any such matters
which would interfere with or impair Buyer's use of any of the properties for
its intended purpose or otherwise materially diminish the value of any such
properties.
"Person" means any natural person, business trust, corporation,
partnership, limited liability company, joint stock company, proprietorship,
association, trust, joint venture, unincorporated association or any other legal
entity of whatever nature.
"Phase I Site Assessments" means the reports prepared by Environmental
Resources Management for Seller for the purpose of identifying the presence of
Environmental Conditions at or relating to the Real Property and performed in
accordance with the American Society for Testing and Materials Standard Practice
E1527-97 for Phase I Environmental Site Assessments.
"Phase II Work" means any sampling, monitoring, analysis or other
physical inspection of any environmental media on, at, beneath or near the Real
Property.
"Prime Rate" means the prime lending rate as announced from time to
time in The Wall Street Journal.
"Products" means those products produced by the Company set forth on
Exhibit A.
"Real Estate Leases" is defined in Section 3.7(a).
"Real Property" is defined in Section 3.7(a).
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"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of a
Hazardous Material into the Environment.
"Required Consents" is defined in Section 3.3.
"Seller" is defined above in the preamble.
"Seller Plan" means (a) any pension plan, 401(k) plan, profit-sharing
plan, health or welfare plan, and any other employee benefit plan (within the
meaning of Section 3(3) of ERISA) that covers employees of the Company and is
maintained or sponsored by the Seller or to which the Seller contributes or for
which the Seller otherwise has any liability, either directly or as a result of
an ERISA Affiliate and (b) any other benefit arrangement, obligation, or
practice to provide benefits other than salary, as compensation for services
rendered, to one or more present or former employees, directors or independent
contractors, that covers employees of the Company and is maintained or sponsored
by the Seller or to which the Seller contributes or for which the Seller
otherwise has any liability, contingent or otherwise, either directly or as a
result of an ERISA Affiliate, including, without limitation, employment
agreements, severance policies or agreements, executive compensation
arrangements, incentive arrangements, sick leave, vacation pay, salary
continuation, consulting or other compensation arrangements, workers'
compensation, bonus plans, stock option, stock grant or stock purchase plans,
medical insurance, life insurance, tuition reimbursement programs or scholarship
programs, any plans subject to section 125 of the Code, and any plans providing
benefits or payments in the event of a change of ownership or control.
"Seller's Accountant" is defined in Section 2.4(a).
"Seller's knowledge" or "knowledge of the Seller" means the knowledge
of any of the following individuals: Mark McCallum, Don Stewart, Michael
Rushworth, Greg Sagan, Kathy McCarthy (solely with respect to Section 3.11
hereof), Linda Toepel (solely with respect to Section 3.16 hereof), Cary Metz,
William Fasel, Norma Carter, Jack McDaniel, Liz Shuttleworth or Frank Pelone.
"Seller's Environmental Remedial Costs" means the total cost of
remediating any condition or circumstance existing as of or prior to the Closing
Date, including the presence of Hazardous Materials, whether created by the
Seller, the Company or a third party, at or relating to any Site (a) caused by
or relating to a violation of any Environmental Law or (b) that may give rise to
any civil or criminal Liability under any Environmental Law, as identified in
the Phase I Site Assessments and/or by the Buyer as a result of the Phase II
Work. Seller's Environmental Remedial Costs shall be quantified by a qualified
environmental consultant selected at the sole discretion of the Seller and shall
include a reasonably detailed description of the costs and work necessary to
remedy any such condition or circumstances in accordance with the standards set
forth in Section 9.3(c)(i) and (ii) of this Agreement.
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"Shares" mean all of the issued and outstanding shares of capital
stock, no par value, of the Company.
"Site" means any of the real properties (a) currently or previously
owned, leased or operated by the Company, any predecessors of the Company or any
entities previously owned by the Company (b) any of the real properties at which
the Business is currently or previously has been conducted or (c) any premises
at which any Hazardous Material has been deposited by the Company or at the
behest of or on behalf of the Company, including all soil, subsoil, surface
waters and groundwater thereat.
"Supply Agreement" means the supply agreement by and between the Seller
and Campbell Soup Company dated as of March 30, 1998.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement filed or required to be filed with respect to
Taxes, including any schedule or attachment thereto, and including any amendment
thereof.
"Taxes" means any taxes, duties, charges, fees, levies or other
assessments imposed by any taxing authority including income, gross receipts,
value-added, excise, withholding, personal property, real estate, sale, use, ad
valorem, license, lease, service, severance, stamp, transfer, payroll,
employment, customs, duties, alternative, add-on minimum, estimated and
franchise taxes (including any interest, penalties or additions attributable to
or imposed on or with respect to any such assessment).
"Termination Date" means February 27, 2000.
"Transaction Documents" means this Agreement, the Escrow Agreement, if
any, and the Transitional Services Agreement.
"Transactions" means the purchase and sale of the Shares and the other
transactions contemplated by the Transaction Documents.
"Transfer Taxes" is defined in Section 6.6(l).
"Transitional Services Agreement" means the transitional services
agreement between the Seller and the Company attached as EXHIBIT "B."
"US" means the United States of America.
"Vlasic Farms Marks" is defined in Section 6.16.
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20 The Purchase and Sale of the Shares.
2.1 The Purchase and Sale of the Shares. At the Closing and
subject to the terms and conditions of this Agreement, the Seller shall sell the
Shares to the Buyer, and the Buyer shall buy the shares from the Seller, for an
aggregate purchase price of $50 million (the "Purchase Price"), less the amount
of any Deposit, which shall be payable in immediately available funds.
2.2 Closing. A closing for the Transaction (the "Closing") will be
held at the offices of Morgan, Lewis & Bockius LLP, 1701 Market Street,
Philadelphia, PA 19103, at 9:00 a.m. (Philadelphia time) on January 31, 2000 (or
at such other place and on such other date as Seller and the Buyer may agree in
writing) provided all of the conditions set forth in Sections 7 and 8 have been
satisfied or waived.
2.3 Closing Deliveries. At the Closing,
(a) the Seller shall deliver to the Buyer certificates for the
Shares, duly endorsed in blank or accompanied by appropriate stock powers, free
and clear of any Encumbrances;
(b) the Buyer shall pay the Purchase Price, net of any Escrow
Funds, to the Seller via wire transfer, pursuant to instructions delivered to
Buyer at least two Business Days prior to the Closing for such purposes;
(c) the Buyer shall deposit any Escrow Funds with the Escrow
Agent to be held by the Escrow Agent in accordance with the terms and conditions
of the Escrow Agreement; and
(d) the Parties shall each deliver to each other fully
executed counterparts of those Transaction Documents to which they are a party
and such other certificates, legal opinions and cross receipts as are reasonably
requested or required under Sections 7 and 8.
2.4 Post-Closing Adjustment.
(a) As soon as practicable after the Closing Date, but in no
event later than 75 days after the Closing Date, the Seller shall deliver to the
Parent the Closing Statement and a calculation of the post-closing purchase
price adjustment in accordance with Section 2.4(b), prepared on the same basis
as the Balance Sheet, together with the audit reports of PricewaterhouseCoopers
LLP (the "Seller's Accountants") whose audit will be conducted in accordance
with GAAS. The Seller shall also give the Parent and its representatives,
including KPMG LLP, access to all work papers and all other supporting
accounting documents of the Company related to the preparation of the Closing
Statement. In addition, the Parent and its representatives, including KPMG LLP,
shall be entitled to ask questions, receive answers and request such other data
and information from the Company, the Seller and the Seller's Accountant as
shall be reasonable under the circumstances; provided, however, that
notwithstanding the foregoing, all questions and requests to Seller's Accountant
shall be made
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solely by KPMG LLP. The Seller shall also cause the Seller's Accountants to
provide to KPMG LLP access to work papers prepared pursuant to the audit of the
Closing Statement, provided, however, that such access shall be in accordance
with GAAS and the policies of Seller's Accountants.
(b) If the sum of the pro-forma net assets shown on the
Closing Statement and the Deferred Tax Benefit of the Company, as conclusively
determined pursuant to this Section 2 .4 (collectively, the "Closing Value") is
less than 44,500,000, the Seller shall pay to the Buyer, by wire transfer of
immediately available funds, the amount by which the Closing Value is less than
$44,500,000. If the Closing Value is greater than $47,500,000, the Buyer shall
pay to the Seller, by wire transfer of immediately available funds, the amount
by which the Closing Value is greater than $47,500,000. For purposes of this
Section 2.4 (i) "Deferred Tax Benefit" shall mean 37.9% of the total worker's
compensation liabilities (current and non-current) of the Company included on
the Closing Statement, and (ii) the LIFO reserve will be designated at
$1,047,000 as of the date of the Closing Statement.
(c) The Parent may dispute any item set forth on the Closing
Statement. Alternatively, the Parent may elect not to dispute the Closing
Statement, in which case the Parent shall provide the Seller with notice (the
"Concurrence Notice") that it agrees with the Closing Statement. If the Parent
disagrees with any item set forth on the Closing Statement, it shall give the
Seller notice (the "Dispute Notice") of any disagreement that it may have with
such calculations within 45 days after the Parent is provided with the Closing
Statement. The Dispute Notice shall specify in reasonable detail the nature of
the disagreement. During the 15 days after the date on which the Dispute Notice
is given, the Seller and the Parent shall attempt, in good faith, to resolve
such dispute. If they fail to reach a written agreement regarding the dispute
within such 15-day period (or such longer period to which they may agree in
writing), the Parent and the Seller shall present the disputed items to a "big
five" accounting firm that is mutually acceptable to the Parent and Seller (the
"Independent Accountant") for resolution. If the Independent Accountant is
engaged, then (i) the Seller and the Parent shall submit to the Independent
Accountant in writing not later than 15 days after the Independent Accountant is
engaged their respective positions with respect to the Closing Statement
together with such supporting documentation as they deem necessary or as the
Independent Accountant requests and (ii) the Seller and the Parent shall request
the Independent Accountant to render its decision regarding the Closing
Statement as promptly as practical, which decision shall be final and binding
on, and nonappealable by, the Seller and the Parent, absent manifest error that
can only be corrected by the Independent Accounting Firm. The costs and expenses
of the Independent Accountant shall be shared equally by the Seller and the
Parent.
2.5 Deposit. The Buyer shall pay, via a wire transfer of
immediately available funds, to the Seller a deposit against the Purchase Price
in the amount of $500,000 (the "Deposit") within five Business Days after the
latest to occur of the following events (i) the delivery to counsel to the
Parent of all of the complete Phase I Site Assessments and (ii) the delivery to
counsel to the Parent of complete and current ALTA/ACSM land title surveys for
each of the Real Properties in accordance with Section 7.17.
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2.6 Escrow.
(a) Based on the results of the Phase II Work, Buyer shall
notify Seller and Seller's counsel of any Environmental Remedial Costs (the
"Environmental Notice"). Upon receipt of the Environmental Notice, Seller shall
have up to seven calendar days (the "Seller Review Period") to provide Buyer
with the Seller's Environmental Remedial Costs or to notify Buyer that it does
not have any objections to the Environmental Remedial Costs. The failure of the
Seller to provide the Seller's Environmental Remedial Costs or notification by
Seller to Buyer of no objection to the Environmental Remedial Costs by the end
of the Seller Review Period shall be deemed an agreement by the Seller to the
Environmental Remedial Costs and an election by the Seller to have funds
deposited under the Escrow Agreement in accordance with the terms set forth in
Section 2.6(b) of this Agreement. If Seller provides the Buyer with the Seller
Environmental Remedial Costs in a timely manner, Buyer and Seller shall
diligently work to agree upon Final Environmental Remedial Costs. If Buyer and
Seller are unable to agree upon Final Environmental Remedial Costs within two
calendar days of the date Seller delivers a statement of the Seller's
Environmental Remedial Costs, the matter shall be submitted to Peter J. Gerbasi,
P.E. of Roux Associates Inc. for review and a final determination of the Final
Environmental Remedial Costs. Such determination shall be final and binding upon
the Parties. Upon the final determination of the Final Environmental Remedial
Costs, funds shall either be deposited or released from escrow in accordance
with Section 2.6(b). The costs and expenses of such consultant shall be shared
equally by the Seller and Parent.
(b) If the Final Environmental Remedial Costs have been
determined prior to the Closing, the Buyer shall deposit at the Closing under
the Escrow Agreement, on Seller's behalf, (i) 50% of the first $2,000,000 of the
Final Environmental Remedial Costs and (ii) 100% of the Final Environmental
Remedial Costs in excess of $2,000,000. The funds deposited under the Escrow
Agreement pursuant to the formula in the preceding sentence are referred to as
the Final Escrow Amount. If prior to the Closing, the Environmental Notice has
been provided, the Seller Review Period has expired and the Final Environmental
Remedial Costs have not been conclusively determined pursuant to Section 2.6(a)
of this Agreement, the Buyer shall deposit at the Closing under the Escrow
Agreement an amount equal to the sum of (i) 50% of the first $2,000,000 of the
Seller's Environmental Remedial Costs, (ii) 100% of the Seller's Environmental
Remedial Costs in excess of $2,000,000 and (iii) 50% of the difference between
the Environmental Remedial Costs and the Seller's Environmental Remedial Costs.
If the Phase II Work has not been completed, the Environmental Notice has not
been provided or the Seller Review Period has not elapsed prior to the Closing
Date, then the amount of any Final Environmental Remedial Costs shall be
determined after the Closing in accordance with Section 2.6(a), and the Seller
shall deposit under the Escrow Agreement within three business days after such
conclusive determination an amount equal to the Final Escrow Amount. If an
amount was previously deposited under the Escrow Agreement prior to the
conclusive determination of the Final Environmental Remedial Costs pursuant to
Section 2.6(a), then within three business days after the Final Environmental
Remedial Costs are determined (i) the Seller shall deposit the amount by which
the Final Escrow Amount exceeds the amount previously deposited under the Escrow
Agreement, or (ii) the Seller shall be entitled to a refund to the extent that
the Final Escrow Amount is less than the amount previously deposited under the
Escrow Agreement.
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The Escrow Funds shall be withdrawn by the Buyer in accordance with the terms of
the Escrow Agreement solely for the purpose of addressing the Environmental
Conditions for which Seller has agreed herein to indemnify the Buyer Indemnified
Parties. Any interest earned on the amounts deposited under the Escrow Agreement
shall be paid to Seller as earned.
(c) The Escrow Agreement shall be terminated upon the earlier
of the following events: (i) the payment to Buyer of all Escrow Funds, or (ii)
the completion of all investigation, remediation, or corrective action for all
Environmental Conditions for which Seller has agreed to indemnify Buyer
Indemnified Parties under this Agreement and for which Escrow Funds are
deposited pursuant to this Section 2.6, in which latter case, all remaining
Escrow Funds shall be returned to Seller. Notwithstanding the preceding
sentence, with respect to any portion of the Final Escrow Amount relating to
Final Environmental Remedial Costs deposited under the Escrow Agreement which
have not met the requirements of the definition of Environmental Condition on or
before the fifth anniversary of the Closing Date, such amount shall be refunded
to Seller and the Escrow Agreement shall terminate if such refund reduces the
balance of the funds deposited under the Escrow Agreement (including interest on
such amount) to zero. The Parties acknowledge that the Escrow Funds, if any, are
meant to serve as a mechanism to fund the remediation of any Environmental
Conditions, but do not limit the rights of the Buyer Indemnified Parties under
Section 9.
30 Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Buyer as follows, as
of the date hereof and also at and as of the Closing Date as though then made
(except to the extent such representations and warranties speak as of an earlier
date or as expressly set forth on the disclosure schedule of Seller attached
hereto (the "Disclosure Schedule")):
3.1 Corporate.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Ohio and is
qualified to do business as a foreign corporation in the states of California,
Pennsylvania, Ohio, Illinois, Indiana, Georgia, Connecticut, Maine, Michigan,
Nevada and Texas, and in such other jurisdictions where it is required to be so
qualified, except where the failure to be qualified would not have a Material
Adverse Effect. The Company has delivered to the Buyer current and correct
copies of the Company's Charter Documents and bylaws, both of which are in full
force and effect. The Disclosure Schedule lists with respect to the Company its
jurisdiction of incorporation, officers and directors and states in which it is
qualified to do business as a foreign corporation.
(b) The Seller is a corporation duly organized, validly
existing and in good standing under the Laws of the State of New Jersey and is
qualified to do business as a foreign corporation in any jurisdiction where such
corporation is required to be so qualified, except for such failures that would
not have any Material Adverse Effect on the Company.
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3.2 Authorization.
(a) The Company has the requisite power and authority to lease
and operate its Assets and to carry on the Business. The Company has the
requisite power and authority to execute and deliver any of the respective
Transaction Documents to which it is or will at the Closing become a party and
to perform the Transactions to be performed by it. Such execution, delivery and
performance have respectively been duly authorized by all necessary corporate
action, including, when necessary, approval by the stockholders of the Company
under Ohio law. Each Transaction Document executed and delivered by the Company
has been duly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, reorganization, fraudulent conveyance,
moratorium, insolvency and other Laws now or hereafter in effect relating to or
affecting creditors' rights and general equitable principles.
(b) The Seller has the requisite power and authority to
execute and deliver any of the respective Transaction Documents to which it is
or will at the Closing become a party and to perform the Transactions to be
performed by it. Such execution, delivery and performance have respectively been
duly authorized by all necessary action of the Seller under New Jersey law. Each
Transaction Document executed and delivered by the Seller has been duly executed
and delivered by the Seller and constitutes a valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms, subject
to bankruptcy, reorganization, fraudulent conveyance, moratorium, insolvency and
other Laws now or hereafter in effect relating to or affecting creditors' rights
and general equitable principles.
3.3 Validity of Contemplated Transactions. Except for any filings,
consents or approvals specified on the Disclosure Schedule (the "Required
Consents") or except for any consents which solely relate to Seller's provision
of services under the Transition Services Agreement, and for compliance with the
HSR Act, neither the execution and delivery by the Company or the Seller of the
Transaction Documents to which it is or will be a party, nor the performance of
the Transactions performed or to be performed by the Company or the Seller will
require any filing, consent, or approval or constitute a Default under (a) any
Law or Court Order to which the Company is subject, (b) the Charter Documents or
by-laws of the Company or (c) any Contract, Governmental Permit or other
document to which the Company is a party or by which the Assets of the Company
may be subject.
3.4 Capitalization and Stock Ownership. The total authorized
capital stock of the Company is 100 shares of common stock, no par value. The
Shares are the only issued and outstanding Shares of capital stock of the
Company, all of which are owned beneficially and of record by the Seller, free
and clear of all Encumbrances except as set forth on the Disclosure Schedule.
There are no existing options, warrants, calls, commitments or other rights of
any character (including conversion or preemptive rights) relating to the
acquisition of any issued or unissued capital stock or other securities of the
Company. The Company complied with all applicable Laws in connection with the
issuance of the Shares, and none of the Shares were issued in violation of any
Contract binding upon the Company. The outstanding Shares are all duly and
validly authorized and issued, fully paid and non-assessable. Upon consummation
of
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the Transactions, the Buyer will have received valid title to the Shares,
free and clear of all Encumbrances.
3.5 Financial Statements: The Disclosure Schedule contains correct and
complete copies of unaudited financial statements for the Company consisting of
an actual and pro-forma balance sheet of the Company as of August 1, 1999 and
the related management statements of earnings before interest and income taxes
for the period then ended (the "Annual Financial Statements"). The Disclosure
Schedule contains correct and complete copies of the Company's unaudited balance
sheet as of October 31, 1999 on an actual and pro-forma basis and the related
management statements of earnings before interest and income taxes for the
three-month period then ended (the "Interim Financial Statements," and together
with the Annual Statements, the "Financial Statements"). The Financial
Statements are consistent in all material respects with the books and records of
the Company, and there have not been any material transactions, as defined by
GAAP, that have not been recorded in the accounting records underlying such
Financial Statements. The Financial Statements have been compiled from the
consolidating financial statements of Seller, which were prepared in accordance
with GAAP, and present fairly the financial position and the Assets and
Liabilities of the Company as of the dates thereof, and the results of its
operations for the periods then ended. The pro-forma balance sheet of the
Company as of October 31, 1999 that is included in the Financial Statements is
referred to herein as the "Balance Sheet," and the date thereof is referred to
as the "Balance Sheet Date." The Balance Sheet is consistent in all material
respects with the books and records of the Company, and there have not been any
material transactions, as defined by GAAP, that have not been recorded in the
accounting records underlying the Balance Sheet.
3.6 Title to Assets and Related Matters.
(a) The Company has good and marketable title to, valid
leasehold interests in or valid licenses to use, all of the Assets (other than
Real Property), free from any Encumbrances except for (a) those specified in the
Disclosure Schedule (b) Encumbrances to secure indebtedness reflected on the
Financial Statements or (c) Permitted Encumbrances. The use of the Assets does
not encroach on the property or rights of anyone else. Except as set forth on
the Disclosure Schedule, all tangible personal property (other than Inventory)
included in the Assets and currently used in the Business are suitable for the
purposes for which they are used, in good working condition, reasonable wear and
tear excepted.
(b) The liens set forth on the Disclosure Schedule which
indicate SMF, Inc. as the debtor are not obligations of the Company and do not
encumber any of the Assets.
3.7 Real Property.
(a) To Seller's knowledge, except as set forth in the
Disclosure Schedule, no portion of the Real Property lies within a flood hazard
area, flood plain or wetland.
(b) The Disclosure Schedule accurately describes all real
estate (whether owned or leased) used by the Company and the improvements
(including buildings and other
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structures) located thereon (collectively, the "Real Property"), and lists any
leases under which any such Real Property is possessed (the "Real Estate
Leases"). There are no Contracts permitting the use by any third parties of any
Real Property that are not terminable within 30 days and other than as set forth
on the Disclosure Schedule, there are no parties in possession of, or making any
use of any portion of the Real Property, other than Seller or the Company. All
of the Real Property currently being used in the operation of the Business is
usable in the ordinary course of business and is in good operating condition and
repair reasonable wear and tear excepted. Except as set forth on the Disclosure
Schedule, each Real Estate Lease is in full force and effect and has not been
assigned, modified, supplemented or amended and neither the tenant nor, to the
Seller's knowledge, the landlord under any such lease is in Default under any
such lease, and no circumstances or state of facts presently exists that, with
the giving of notice or passage of time, or both, would permit the tenant or, to
Seller's knowledge, the landlord to terminate any such lease, except that the
Napoleon Property Lease cannot be assigned to Buyer without the consent of the
landlord thereunder.
(c) Except as set forth on the Disclosure Schedule, there is
no condemnation or eminent domain proceeding pending with regard to any part of
the Real Property, and to the best of the Seller's knowledge, no such
proceedings are proposed.
(d) To the Seller's knowledge, there are no public
improvements, in the nature of off-site improvements, or otherwise, which have
been ordered to be made by Governmental Authorities or which have not heretofore
been assessed.
(e) The current use of the Real Property is free from any
restrictions which restrict or prevent the continued use of the Real Property in
such manner.
(f) Except as set forth on the Disclosure Schedule, adequate
utilities, including, useable public sanitary and storm sewers, public water
facilities, electric facilities and, if any, gas facilities (collectively, the
"Utilities"), are installed in, and are duly connected to, each parcel
comprising the Real Property, and can be used without charge except the normal
and usual metered utility charges and water and sewer charges. To the Seller's
knowledge, all Utilities required for the operation of the Real Property either
enter each parcel comprising the Real Property through adjoining public streets
or, if they pass through adjoining public land, do so in accordance with valid
public easements or private easements which will inure to the benefit of Buyer
at no cost to the owner of the Real Property. All of said Utilities are
installed and operating. All installation, connection and "tap-in" charges
heretofore due and payable have been paid for in full.
(g) The Company holds good and marketable, fee simple title to
the Real Property set forth on the Disclosure Schedule which is owned by it,
free and clear of all Encumbrances, other than the Permitted Encumbrances, which
title shall be insurable as such at customary rates by any reputable title
insurance company selected by Buyer. The Company holds good and marketable,
leasehold title to that portion of the Real Property which it leases, free and
clear of all Encumbrances, other than the Permitted Encumbrances, which
leasehold title shall be insurable as such at customary rates by any reputable
title insurance company selected by
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Buyer, provided Buyer shall accept an exception to coverage due to the absence
of memorandum, short form or notice of lease having been recorded.
(h) Except as set forth on the Disclosure Schedule, no work
has been performed by or for the account of the Company or the Seller or is in
progress at, and no materials have been furnished to the Real Property which
would, or may with the passage of time, give rise to construction, mechanic's,
materialmen's, or other liens against the Real Property or any portion thereof,
except that for which full and complete releases have been obtained.
(i) Any and all applicable charges, fees and assessments and
any and all other sums due under declarations, cross-easements and like
agreements to which the Real Property or any portion thereof may be subject,
have been paid, and no special assessments thereunder are pending, and all
consents and approvals required to be obtained under any such declarations,
cross-easements and like agreements have been obtained pursuant to the
requirements of such documentation.
(j) There are no outstanding agreements, options, rights of
first refusal, conditional sales agreements or other agreements or arrangements,
whether oral or written, regarding the purchase and sale of the Real Property or
any portion thereof.
(k) To Seller's knowledge, all curb cut and street opening
permits or licenses required for vehicular access to and from the Real Property
to any adjoining public street have been obtained and paid for by the Company
and shall be in full force and effect at the Closing.
(l) The Company is not a party to any development, tri-party
or any other agreements with county, municipal or other Governmental Authorities
respecting the ownership, development and operation of the Real Property and all
portions thereof.
(m) The Company holds good and marketable, fee simple title to
Evansville Farm A and B, Maiden Creek Road, Blandon, Berks County, Pennsylvania.
3.8 Accounts Receivable. Except as set forth on the Disclosure
Schedule, the Accounts Receivable are bona fide Accounts Receivable created in
the ordinary course of business and are good and collectible at the aggregate
recorded amounts thereof, net of the reserves for such items included on the
Balance Sheet.
3.9 Inventory. All Inventory of the Company is valued on the Company's
books and records at the lower of cost (with cost being computed by the LIFO
method) or market.
