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DISTRIBUTION AGREEMENT
AMONG
CULBRO CORPORATION,
CULBRO LAND RESOURCES, INC.
AND
GENERAL CIGAR HOLDINGS, INC.
-----------------------
FEBRUARY , 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01 GENERAL....................................................... 1
Section 1.02 TERMS DEFINED ELSEWHERE IN AGREEMENT.......................... 8
ARTICLE II
TRANSFER OF ASSETS
Section 2.01 TRANSFER OF REAL ESTATE TO GENERAL CIGAR...................... 9
Section 2.02 TRANSFER OF REAL ESTATE TO CLR................................ 9
Section 2.03 TRANSFER OF ASSETS TO HOLDINGS................................ 9
Section 2.04 TRANSFER OF ASSETS TO CLR..................................... 10
Section 2.05 RELATED AGREEMENTS; MERGER AGREEMENT.......................... 10
Section 2.06 TRANSFERS NOT EFFECTED PRIOR TO THE DISTRIBUTION.............. 10
Section 2.07 NO REPRESENTATIONS OR WARRANTIES; CONSENTS.................... 11
Section 2.08 CONVEYANCING AND ASSUMPTION INSTRUMENTS....................... 11
Section 2.09 BUSINESS OPERATIONS........................................... 12
ARTICLE III
ASSUMPTION AND SATISFACTION OF LIABILITIES
Section 3.01 ASSUMPTION AND SATISFACTION OF LIABILITIES.................... 13
ARTICLE IV
THE DISTRIBUTION
Section 4.01 COOPERATION PRIOR TO THE DISTRIBUTION......................... 13
Section 4.02 CULBRO BOARD ACTION; CONDITIONS PRECEDENT TO THE DISTRIBUTION. 14
Section 4.03 THE DISTRIBUTION.............................................. 14
ARTICLE V
INDEMNIFICATION
Section 5.01 INDEMNIFICATION BY CULBRO..................................... 14
Section 5.02 INDEMNIFICATION BY CLR........................................ 15
Section 5.03 INSURANCE PROCEEDS............................................ 15
Section 5.04 PROCEDURE FOR INDEMNIFICATION................................. 15
Section 5.05 REMEDIES CUMULATIVE........................................... 17
Section 5.06 SURVIVAL OF INDEMNITIES....................................... 17
ARTICLE VI
CERTAIN ADDITIONAL MATTERS
Section 6.01 CLR BOARD..................................................... 17
Section 6.02 RESIGNATIONS.................................................. 17
Section 6.03 CERTIFICATE AND BYLAWS........................................ 18
ARTICLE VII
POST-DISTRIBUTION TRANSFERS
Section 7.01 MERGER........................................................ 18
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PAGE
Section 7.02 CERTAIN POST-DISTRIBUTION TRANSACTIONS........................ 18
ARTICLE VIII
ACCESS TO INFORMATION AND SERVICES
Section 8.01 PROVISION OF CORPORATE RECORDS................................ 19
Section 8.02 ACCESS TO INFORMATION......................................... 19
Section 8.03 PRODUCTION OF WITNESSES....................................... 19
Section 8.04 REIMBURSEMENT................................................. 20
Section 8.05 RETENTION OF RECORDS.......................................... 20
Section 8.06 CONFIDENTIALITY............................................... 20
Section 8.07 PRIVILEGED MATTERS............................................ 20
ARTICLE IX
INSURANCE
Section 9.01 POLICIES AND RIGHTS INCLUDED WITHIN THE CLR ASSETS............ 22
Section 9.02 POST-ASSET TRANSFER DATE CLAIMS............................... 22
Section 9.03 ADMINISTRATION................................................ 22
Section 9.04 AGREEMENT FOR WAIVER OF CONFLICT AND SHARED DEFENSE........... 23
ARTICLE X
MISCELLANEOUS
Section 10.01 COMPLETE AGREEMENT; CONSTRUCTION.............................. 23
Section 10.02 EXPENSES...................................................... 23
Section 10.03 GOVERNING LAW................................................. 23
Section 10.04 NOTICES....................................................... 23
Section 10.05 AMENDMENTS.................................................... 23
Section 10.06 SUCCESSORS AND ASSIGNS........................................ 24
Section 10.07 TERMINATION................................................... 24
Section 10.08 SUBSIDIARIES.................................................. 24
Section 10.09 NO THIRD-PARTY BENEFICIARIES.................................. 24
Section 10.10 TITLES AND HEADINGS........................................... 24
Section 10.11 EXHIBITS AND SCHEDULES........................................ 24
Section 10.12 LEGAL ENFORCEABILITY.......................................... 24
Section 10.13 CONSENT OF PARTIES............................................ 24
ii
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.01(a) CLR Financing Obligations
Schedule 1.01(b) Culbro Financing Obligations
Schedule 1.01(c) Commercial Real Estate
Schedule 1.01(d) Nursery Real Estate
Schedule 1.01(e) Tobacco Real Estate
Schedule 1.01(f) Shared Policies
Schedule 2.08 Conveyance and Assumption Instruments
Schedule 4.01 Required Consents
Exhibit A Culbro Pro Forma Consolidated Balance Sheet
Exhibit B CLR Pro Forma Consolidated Balance Sheet
Exhibit C Form of CLR Bylaws
Exhibit D Form of CLR Certificate of Incorporation
Exhibit E Form of Agriculture Lease between CLR and General Cigar
Exhibit F Form of Benefits and Employment Matters Allocation
Agreement between Culbro and CLR
Exhibit G Form of Services Agreement between Culbro and CLR
Exhibit H Form of Tax Sharing Agreement between Culbro and CLR
Exhibit I Form of Merger Agreement between Culbro and Holdings
iii
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (this "Agreement") is made this ___ day of
February, 1997 among Culbro Corporation, a New York corporation ("Culbro"),
Culbro Land Resources, Inc., a Delaware corporation and a wholly-owned
subsidiary of Culbro ("CLR"), and General Cigar Holdings, Inc., a Delaware
corporation and a wholly-owned subsidiary of Culbro ("Holdings").
RECITALS
WHEREAS, Culbro, directly and through subsidiaries, (i) manufactures
and markets cigars and grows, processes and sells cigar wrapper tobacco (the
"Cigar Business"), (ii) cultivates for sale container and field grown nursery
products principally to nursery centers and mass merchandisers, and owns and
operates wholesale nursery sales and service centers (the "Nursery Business")
and (iii) owns, builds and manages commercial and industrial properties and
develops residential subdivisions on real estate in Connecticut and
Massachusetts (the "Real Estate Business") (which Nursery Business and Real
Estate Business are more specifically defined herein as the "CLR Business");
WHEREAS, the Board of Directors of Culbro has determined that it is in
the best interests of Culbro to separate the Cigar Business on the one hand, and
the CLR Business on the other hand, and, in order to effect such separation, to
transfer to CLR the stock of certain Culbro subsidiaries principally engaged in
the CLR Business and certain other assets relating principally to the CLR
Business (as more specifically defined herein, the "Asset Transfers"), and
thereafter to distribute all of the outstanding shares of common stock of CLR to
the holders of Culbro common stock (the "Distribution");
WHEREAS, subsequent to the Asset Transfers and prior to the
Distribution, Holdings intends to consummate an initial public offering of its
shares of common stock, par value $0.01 per share.
WHEREAS, following the Distribution, subject to certain conditions set
forth herein, Culbro intends to merge with and into Holdings (the "Merger").
WHEREAS, in connection with the Distribution, Culbro and CLR have
determined that it is necessary and desirable to set forth the principal
corporate transactions required to effect the Asset Transfers, the Distribution
and the Merger, and to set forth the agreements that will govern certain matters
following the Distribution and the Merger.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
01 GENERAL. As used in this Agreement, the following terms shall
have the following meanings:
387 PAS: 387 PAS Corporation, a New York corporation and holder of a
99% interest in 387 PAS Enterprises.
387 PAS ENTERPRISES: 387 PAS Enterprises, a partnership organized
under the laws of the State of New York.
387 PAS MINORITY INTEREST: Culbro's 1% interest in 387 PAS
Enterprises.
ACTION: Any action, claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
AFFILIATE: With respect to any specified Person, means any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person. For purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" shall have meanings correlative to
the foregoing. Notwithstanding the foregoing, (i) the Affiliates of Culbro
shall not include CLR, the CLR Subsidiaries or any other Person that would be an
Affiliate of Culbro by reason of Culbro's ownership of the capital stock of CLR
prior to the Distribution or the fact that any officer or director of CLR or any
of the CLR Subsidiaries shall also serve as an officer or director of Culbro or
any of the Retained Subsidiaries, and (ii) the Affiliates of CLR shall not
include Culbro, the Retained Subsidiaries or any other Person that would be an
Affiliate of CLR by reason of Culbro's ownership of the capital stock of CLR
prior to the Distribution or the fact that any officer or director of CLR or any
of the CLR Subsidiaries shall also serve as an officer or director of Culbro or
any of the Retained Subsidiaries.
AGENT: The distribution agent appointed by Culbro to distribute the
CLR Common Stock pursuant to the Distribution.
AGRICULTURE LEASE: The Agriculture Lease between CLR and General
Cigar, which agreement shall be entered into on or before the Asset Transfer
Date, substantially in the form of Exhibit E attached hereto.
AIRPLANE: That certain Israel Astra 1125, FAA registration number
N387PAS, owned by Culbro prior to the Asset Transfers.
ASSET TRANSFER DATE: The date all of the Asset Transfers set forth in
Sections 2.01 through 2.04 herein have been completed, which date shall be prior
to the Consummation of the IPO.
CENTAUR: Centaur Communications Limited, a company incorporated under
the laws of England and Wales, a privately held publisher of business magazines
in the United Kingdom.
CENTAUR INTEREST: Culbro's ownership of 4,928,194 ordinary shares of
Centaur, representing a 25% equity interest in Centaur.
CLR BALANCE SHEET: The Pro Forma Consolidated Balance Sheet for CLR
as of November 30, 1996 (the end of its most recent fiscal year) attached hereto
as Exhibit B.
CLR BOARD: The Board of Directors of CLR.
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CLR BOOKS AND RECORDS: The books and records (including computerized
records, ledgers, files and software) of CLR and the CLR Subsidiaries and all
books and records owned by Culbro and its Subsidiaries that relate to the CLR
Business or are necessary to operate the CLR Business including, without
limitation, all such books and records relating to CLR Employees, all files
relating to any Action being assumed by CLR as part of the CLR Liabilities,
original corporate minute books, stock ledgers and certificates and corporate
seals, and all licenses, leases, agreements and filings relating to CLR, the CLR
Subsidiaries or the CLR Business (but not including the Culbro Books and
Records, provided that CLR shall have access to, and have the right to obtain
duplicate copies of, the Culbro Books and Records in accordance with the
provisions of Article VIII).
CLR BUSINESS: The businesses conducted by CLR and the CLR
Subsidiaries and the businesses conducted pursuant to or utilizing the CLR
Assets, including the Nursery Business and the Real Estate Business and the
ownership of the Centaur Interest (but excluding the ownership and operation of
387 PAS Enterprises).
CLR BYLAWS: The Bylaws of CLR, substantially in the form of Exhibit C
attached hereto, to be in effect at the Distribution Date.
CLR CERTIFICATE: The Certificate of Incorporation of CLR,
substantially in the form of Exhibit D attached hereto, to be in effect at the
Distribution Date.
CLR COMMON STOCK: The common stock, par value $1.00 per share, of
CLR.
CLR EMPLOYEES: The persons employed by the CLR Group on the Asset
Transfer Date; provided that no Retained Employee who performs services for the
CLR group after the Asset Transfer Date pursuant to the CLR Services Agreement
shall be deemed to be a CLR Employee.
CLR FINANCING OBLIGATIONS: The Financing Obligations to be assumed or
retained by the CLR Group set forth on Schedule 1.01(a) hereto.
CLR GROUP: CLR and the CLR Subsidiaries, collectively.
CLR INITIAL CASH BALANCE: $7,000,000.
CLR LIABILITIES: (i) All of the Liabilities of the CLR Group under,
or to be retained or assumed by CLR or any of the CLR Subsidiaries pursuant to,
this Agreement or any of the Related Agreements, including without limitation
all liabilities retained or assumed pursuant to the Tax Sharing Agreement and
the Employee Benefits Allocation Agreement, (ii) all Liabilities under the CLR
Financing Obligations, (iii) all Liabilities relating to Xxx Xxxx (including the
bankruptcy proceedings related thereto) and (iv) all other Liabilities arising
out of or in connection with any of the CLR Assets or the CLR Business,
determined on a basis consistent with the determination of the Liabilities of
CLR included on the CLR Balance Sheet.
CLR POLICIES: All Policies, current or past, which are owned or
maintained by or on behalf of Culbro or any of its Affiliates or predecessors,
that relate to the CLR Business but do not relate to the Retained Business, and
which Policies are either maintained by the CLR Group or assignable to the CLR
Group.
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CLR SERVICES AGREEMENT: The Services Agreement, which shall be
entered into between CLR and Culbro on or prior to the Asset Transfer Date,
substantially in the form of Exhibit G attached hereto.
CLR SUBSIDIARIES: The CLR Transferred Subsidiaries, and all direct
and indirect Subsidiaries of CLR and the CLR Transferred Subsidiaries as of the
Asset Transfer Date.
CLR TRANSFERRED SUBSIDIARIES: Imperial, Xxx Xxxx and General Xxxx
Receivables Corp.
CLR TRANSFERRED SUBSIDIARY STOCK: All of the issued and outstanding
capital stock of the CLR Transferred Subsidiaries owned by Culbro as of the date
of this Agreement.
CLUB MACANUDO: Club Macanudo, Inc., a wholly-owned subsidiary of
Culbro.
CLUB MACANUDO (CHICAGO): Club Macanudo (Chicago), Inc., a wholly-
owned subsidiary of Culbro.
CODE: The Internal Revenue Code of 1986, as amended.
COMMERCIAL REAL ESTATE: The real property set forth on Schedule
1.01(c) hereto.
COMMISSION: The Securities and Exchange Commission.
CONVEYANCING AND ASSUMPTION INSTRUMENTS: Collectively, the various
agreements, instruments and other documents to be entered into to effect the
Asset Transfers and the assumption of Liabilities in the manner contemplated by
this Agreement and the Related Agreements.
CULBRO BOARD: The Board of Directors of Culbro.
CULBRO BOOKS AND RECORDS: The books and records (including
computerized records, ledgers, files and software) of Culbro and the Retained
Subsidiaries and all books and records owned by Culbro and its Subsidiaries
which relate to the Retained Business, are necessary to operate the Retained
Business, or are required by law to be retained by Culbro, including, without
limitation, all such books and records relating to Retained Employees, all files
relating to any Action pertaining to the Retained Liabilities, original
corporate minute books, stock ledgers and certificates and corporate seals, and
all licenses, leases, agreements and filings, relating to Culbro, the Retained
Subsidiaries or the Retained Business (not including the CLR Books and Records,
provided that Culbro shall have access to, and shall have the right to obtain
duplicate copies of, the CLR Books and Records in accordance with the provisions
of Article VIII).
CULBRO COMMON STOCK: The common stock, par value $1.00 per share, of
Culbro.
CULBRO GROUP: Culbro and the Retained Subsidiaries, collectively.
CULBRO BALANCE SHEET: The Pro Forma Consolidated Balance Sheet for
Culbro, after giving effect to the Asset Transfers and the Distribution, as of
November 30, 1996 (the end of its most recent fiscal year) attached hereto as
Exhibit A.
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CULBRO FINANCING OBLIGATIONS: The Financing Obligations to be
retained or assumed by the Culbro Group as set forth on Schedule 1.01(b) hereto.
CULBRO LEASEHOLD: The leasehold for the headquarters of Culbro
located at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, and all improvements
therein.
CULBRO PERSONAL PROPERTY: All personalty owned by Culbro, including
but not limited to all vehicles, all office machinery and equipment located at
the Culbro Leasehold, all office furniture and fixtures located at the Culbro
Leasehold, and all works of art and other non-depreciable assets located at the
Culbro Leasehold.
DISTRIBUTION DATE: The date determined by the Culbro Board as the
date on which the Distribution shall be effected.
DISTRIBUTION RECORD DATE: The date established by the Culbro Board as
the date for taking a record of the Holders of Culbro Common Stock entitled to
participate in the Distribution.
XXX XXXX: The Xxx Xxxx Company, a Delaware corporation, in which
Culbro has a 50.1% common stock interest and which has issued certain corporate
debt and mortgaged certain real property to Culbro.
XXX XXXX NOTES: Certain indebtedness of Xxx Xxxx to Culbro
representing (i) a junior mortgage note from Xxx Xxxx to Culbro bearing a
principal amount of $2,000,000, plus interest, secured by a mortgage on certain
real property owned by Xxx Xxxx and (ii) an unsecured note bearing a principal
amount of $5,000,000, plus interest, issued by Xxx Xxxx to Culbro, and in both
cases together with all security interests related thereto of any kind.
EMPLOYEE BENEFITS ALLOCATION AGREEMENT: The Benefits and Employment
Matters Allocation Agreement between Culbro and CLR, which agreement shall be
entered into on or prior to the Asset Transfer Date, substantially in the form
of Exhibit F attached hereto.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
FINANCING OBLIGATIONS: All (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, notes, debentures or similar instruments, (iii)
obligations under capitalized leases and deferred purchase arrangements, (iv)
reimbursement or other obligations relating to letters of credit or similar
arrangements, and (v) obligations to guarantee, directly or indirectly, any of
the foregoing types of obligations on behalf of others.
GENERAL CIGAR: General Cigar Co., Inc., a Delaware corporation.
HOLDERS: The holders of record of Culbro Common Stock as of the
Distribution Record Date.
HOLDINGS PROPERTY: The Airplane, the Culbro Leasehold and the Culbro
Personal Property.
HOLDINGS TRANSFERRED SUBSIDIARIES: General Cigar, 387 PAS, Club
Macanudo, Club Macanudo (Chicago), Xxxxxxxxx Y Cia, Ltd., Xxxxxxxxx Free Zone,
Ltd., Gradiaz Xxxxx of Jamaica, Ltd., Gradiaz Xxxxx & Co., Inc., Culbro Tobacco
Sales Corporation, Culbro X.X. Xxxxxxx, X.X., Xxxxxxxxxx Xxxxxxxxx
0
& Properties Inc., Xxxx Xxxxxxxxx & Co., Macanudo Cigar Company, Inc., Partagas
Cigar Company, Inc., Culbro International U.K. Ltd., Culbro International, S.A.,
Xxxx Tool & Plastics Corp. and Helmetta Realty Corp.
HOLDINGS TRANSFERRED SUBSIDIARY STOCK: All of the issued and
outstanding capital stock of the Holdings Transferred Subsidiaries owned by
Culbro as of the date of this Agreement.
HSR ACT: The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
IMPERIAL: Imperial Nurseries, Inc., a Delaware corporation and a
wholly-owned subsidiary of Culbro.
INSURANCE ADMINISTRATION: With respect to each Policy, the accounting
for premiums, retrospectively rated premiums, defense costs, adjuster's fees,
indemnity payments, deductibles and retentions as appropriate under the terms
and conditions of such Policy; and the reporting to excess insurance carriers of
any losses or claims in accordance with Policy provisions, and the distribution
of Insurance Proceeds as contemplated by this Agreement.
INSURANCE PROCEEDS: Those moneys (i) received by an insured from an
insurance carrier or (ii) paid by an insurance carrier on behalf of an insured,
in either case net of any applicable premium adjustment, retrospectively-rated
premium, deductible, retention, cost or reserve paid or held by or for the
benefit of such insured.
INSURED CLAIMS: Those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Policies,
whether or not subject to deductibles, co-insurance, uncollectability or
retrospectively rated premium adjustments, but only to the extent that such
Liabilities are within applicable Policy limits, including aggregates.
IPO: The initial public offering of the common stock of Holdings.
IPO COMMENCEMENT DATE: The date the IPO is commenced through
distribution of a "red xxxxxxx" prospectus.
LIABILITIES: Any and all debts, liabilities and obligations, absolute
or contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, including all costs and expenses
relating thereto, and including, without limitation, those debts, liabilities
and obligations arising under any law, rule, regulation, Action, threatened
Action, order or consent decree of any governmental entity or any award of any
arbitrator of any kind, and those arising under any contract, commitment or
undertaking.
MERGER AGREEMENT: The Merger Agreement between Culbro and Holdings,
which agreement shall be entered into on or prior to the Distribution Date,
substantially in the form of Exhibit I attached hereto.
NASDAQ: The National Association of Securities Dealers Automated
Quotations System.
NURSERY REAL ESTATE: The real property set forth on Schedule 1.01(d)
hereto.
6
PERSON: Any individual, corporation, partnership, association, trust,
estate or other entity or organization, including any governmental entity or
authority.
POLICIES: Insurance policies and insurance contracts of any kind
(each, a "Policy") relating to the CLR Business or the Retained Business as
conducted prior to the Asset Transfer Date, including, without limitation,
primary and excess policies, comprehensive general liability policies, and
automobile and workers' compensation insurance policies, together with the
rights, benefits and privileges thereunder.
PRIVILEGED INFORMATION: All information as to which Culbro, CLR or
any of their Subsidiaries are entitled to assert the protection of a Privilege.
PRIVILEGES: All privileges that may be asserted under applicable law
including, without limitation, privileges arising under or relating to the
attorney-client relationship (including but not limited to the attorney-client
and work product privileges), the accountant-client privilege, and privileges
relating to internal evaluative processes.
RELATED AGREEMENTS: All of the agreements, instruments,
understandings, assignments or other arrangements which are entered into in
connection with the transactions contemplated hereby and which are set forth in
a writing, including, without limitation, the Conveyancing and Assumption
Instruments, the Agriculture Lease, the Employee Benefits Allocation Agreement,
the Tax Sharing Agreement and the Services Agreement.
RETAINED ASSETS: The assets of Culbro other than the CLR Assets,
including without limitation (i) the capital stock of the Retained Subsidiaries,
(ii) assets relating to the Retained Business, determined on a basis consistent
with the determination of assets included on the Culbro Balance Sheet, (iii) all
other assets expressly allocated to Culbro or any of the Retained Subsidiaries
under this Agreement or the Related Agreements, and (iv) any other assets of
Culbro and its Affiliates relating to the Retained Business.
RETAINED BUSINESS: The businesses conducted by Culbro and its
Affiliates other than the CLR Business, including the Cigar Business.
RETAINED EMPLOYEES: All of the persons employed by the Culbro Group
on the Asset Transfer Date, which shall be substantially all of the persons
employed by the Culbro Group immediately prior to the Asset Transfer Date;
provided that no CLR Employee shall be deemed to be a Retained Employee.
RETAINED LIABILITIES: (i) All of the Liabilities arising out of or in
connection with the Retained Assets or the Retained Business determined on a
basis consistent with the determination of the Liabilities of Culbro included on
the Culbro Balance Sheet, (ii) all other Liabilities of Culbro under, or to be
retained or assumed by Culbro or any of the Retained Subsidiaries pursuant to,
this Agreement or any of the Related Agreements, including without limitation
all Liabilities retained or assumed pursuant to the Tax Sharing Agreement and
the Employee Benefits Agreement, (iii) the Culbro Financing Obligations, (iv)
any Liabilities arising out of the settlement of lawsuits relating to the
Distribution (other than those Liabilities that constitute CLR Liabilities), (v)
all expenses relating to consummation of the Asset Transfers, the IPO, the
Distribution and the Merger (including without limitation all transfer taxes,
legal, accounting and investment bank fees and expenses) and (vi) all other
Liabilities of Culbro not constituting CLR Liabilities.
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RETAINED POLICIES: All Policies, current or past, that are owned or
maintained by or on behalf of any member of the Culbro Group (or any of its
predecessors) which relate to the Retained Business but do not relate to the CLR
Business.
RETAINED SUBSIDIARIES: All direct and indirect Subsidiaries of
Culbro, including but not limited to (i) Holdings, (ii) General Cigar, 387 PAS,
Club Macanudo, Club Macanudo (Chicago) and GCH Transportation, Inc., (iii)
Villazon & Co., Inc., Honduras American Tabaco, S.A. de C.V., Xxxxxxxxx Y Cia,
Ltd., Xxxxxxxxx Free Zone, Ltd., Gradiaz Xxxxx of Jamaica, Ltd., Gradiaz Xxxxx &
Co., Inc., Culbro Tobacco Sales Corporation, Culbro X.X. Tobacco, S.A. and
Industrial Buildings & Properties Inc. and (iv) Xxxx Xxxxxxxxx & Co., Macanudo
Cigar Company, Inc., Partagas Cigar Company, Inc., Culbro International U.K.
Ltd., Culbro International, S.A., Xxxx Tool & Plastics Corp., Helmetta Realty
Corp. and Twenty-Seventh & Park, Inc.; PROVIDED, HOWEVER, that "Retained
Subsidiaries" shall exclude CLR and the CLR Subsidiaries.
SECURITIES ACT: The Securities Act of 1933, as amended.
SHARED POLICIES: All Policies, current or past, that are owned or
maintained by or on behalf of Culbro or any of its Subsidiaries or their
respective predecessors that relate to both the Retained Business and the CLR
Business, and all other Policies not constituting Retained Policies or CLR
Policies, in each case including, but not limited to, the Policies specified on
Schedule 1.01(f) hereto.
SUBSIDIARY: With respect to any Person, (a) any corporation of which
at least a majority in interest of the outstanding voting stock (having by the
terms thereof voting power under ordinary circumstances to elect a majority of
the directors of such corporation, irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned or controlled by such Person, by one or more
Subsidiaries of such Person, or by such Person and one or more of its
Subsidiaries; PROVIDED that Xxx Xxxx shall not constitute a Subsidiary of Culbro
or any of its affiliates, or (b) any non-corporate entity in which such Person,
one or more Subsidiaries of such Person, or such Person and one or more
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest.
TAX RULING: The private letter ruling to be issued by the Internal
Revenue Service to the effect that the proposed Distribution constitutes a
tax-free spin-off under the Code.
TAX SHARING AGREEMENT: The Tax Sharing Agreement between Culbro and
CLR, which agreement shall be entered into on or prior to the Asset Transfer
Date, substantially in the form of Exhibit H attached hereto.
TOBACCO REAL ESTATE: The real property set forth on Schedule 1.01(e)
hereto.
02 TERMS DEFINED ELSEWHERE IN AGREEMENT.
Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
---- -------
Asset Transfers Recitals
Cigar Business Recitals
8
CLR Recitals
CLR Assets 2.04
CLR Indemnifiable Losses 5.01
CLR Indemnitees 5.01
Culbro Recitals
Culbro Indemnifiable Losses 5.02
Culbro Indemnitees 5.02
Distribution Recitals
Form 10 Registration Statement 4.01
Holdings Assets 2.03
Indemnifiable Losses 5.02
Indemnifying Party 5.03
Indemnitee 5.03
Information 8.02
Merger Proxy 4.01
Nursery Business Recitals
Real Estate Business Recitals
Required Consents 4.01
Third-Party Claim 5.04
ARTICLE II
TRANSFER OF ASSETS
03 TRANSFER OF REAL ESTATE TO GENERAL CIGAR. Prior to the IPO
Commencement Date, Culbro shall take or cause to be taken all actions necessary
to cause the transfer, assignment, delivery and conveyance to General Cigar or
any subsidiary thereof of all of Culbro's and its Subsidiaries' right, title and
interest in the Tobacco Real Estate.
04 TRANSFER OF REAL ESTATE TO CLR. Prior to the IPO Commencement
Date, Culbro shall take or cause to be taken all actions necessary to cause the
transfer, assignment, delivery and conveyance to CLR or any Subsidiary thereof
of all of Culbro's and its Subsidiaries' right, title and interest in the
Nursery Real Estate and in the Commercial Real Estate.
05 TRANSFER OF ASSETS TO HOLDINGS. Prior to the IPO Commencement
Date, Culbro shall take or cause to be taken all actions necessary to cause the
transfer, assignment, delivery and conveyance to Holdings or the Retained
Subsidiaries, as the case may be, of all of Culbro's and its Subsidiaries'
right, title and interest in the Holdings Assets, and Holdings shall take or
cause to be taken all actions necessary to cause the assumption by Holdings or
the Retained Subsidiaries of the Retained Liabilities. The "Holdings Assets"
shall consist of the following assets:
(i) the Holdings Transferred Subsidiary Stock;
(ii) the 387 PAS Minority Interest;
(iii) the Holdings Property;
9
(iv) licenses and permits relating to the Retained
Business, to the extent such licenses and permits
are transferable;
(v) all accounts receivable, prepaid expenses,
reserves and other current assets relating to the
Retained Business (except that no cash shall
constitute Holdings Assets except to the extent
provided in Section 2.09 below);
(vi) the Retained Policies and the Shared Policies; and
(vii) all of the other assets to be assigned to Holdings
under this Agreement or the Related Agreements.
06 TRANSFER OF ASSETS TO CLR. Prior to the consummation of the IPO,
Culbro shall take or cause to be taken all actions necessary to cause the
transfer, assignment, delivery and conveyance to CLR or the CLR Subsidiaries of
all of Culbro's and its Subsidiaries' right, title and interest in the CLR
Assets, and CLR shall take or cause to be taken all actions necessary to cause
the assumption by CLR or the CLR Subsidiaries of the CLR Liabilities. The "CLR
Assets" shall consist of the following assets:
(i) the CLR Transferred Subsidiary Stock;
(ii) the Centaur Interest;
(iii) the Xxx Xxxx Notes;
(iv) the CLR Books and Records;
(v) licenses and permits relating to the CLR Business,
to the extent such licenses and permits are
transferable;
(vi) all of the other assets to be assigned to CLR
under this Agreement or the Related Agreements;
(vii) all accounts receivable, prepaid expenses,
reserves and other current assets relating to the
CLR Business (except that no cash shall constitute
CLR Assets except to the extent provided in
Section 2.09 below);
(viii) the CLR Policies; and
(ix) all other assets relating to the CLR Business,
determined on a basis consistent with the
determination of the assets included on the CLR
Balance Sheet.
07 RELATED AGREEMENTS; MERGER AGREEMENT.
On or prior to the Asset Transfer Date, Culbro, Holdings and CLR (or
their respective Subsidiaries, as applicable) shall enter into the Related
Agreements and Culbro and Holdings shall enter into the Merger Agreement.
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08 TRANSFERS NOT EFFECTED PRIOR TO THE DISTRIBUTION.
To the extent that any transfers contemplated by this Article II shall
not have been fully effected on the Asset Transfer Date, the parties shall
cooperate to effect such transfers as promptly as shall be practicable following
the Asset Transfer Date. Nothing herein shall be deemed to require the transfer
of any assets or the assumption of any Liabilities that by their terms or
operation of law cannot be transferred or assumed; PROVIDED, HOWEVER, that
Culbro on the one hand and Holdings or CLR, as the case may be, on the other
hand, and their respective Subsidiaries and Affiliates shall cooperate in
seeking to obtain any necessary consents or approvals for the transfer of all
assets and Liabilities contemplated to be transferred pursuant to this Article
II. In the event that any such transfer of assets or Liabilities has not been
consummated as of the Asset Transfer Date, the party retaining such asset or
Liability shall thereafter hold such asset in trust for the use and benefit of
the party entitled thereto (at the expense of the party entitled thereto) and
retain such Liability for the account of the party by whom such Liability is to
be assumed pursuant hereto, and take such other actions as may be reasonably
required in order to place the parties, insofar as reasonably possible, in the
same position as would have existed had such asset been transferred or such
Liability been assumed as contemplated hereby. As and when any such asset or
Liability becomes transferable, such transfer and assumption shall be effected
forthwith. The parties agree that, except as described in this section, as of
the Asset Transfer Date, each party hereto shall be deemed to have acquired
complete and sole beneficial ownership over all of the assets, together with all
rights, powers and privileges incidental thereto, and shall be deemed to have
assumed in accordance with the terms of this Agreement all of the Liabilities,
and all duties, obligations and responsibilities incidental thereto, which such
party is entitled to acquire or required to assume pursuant to the terms of this
Agreement.
09 NO REPRESENTATIONS OR WARRANTIES; CONSENTS. Each of the parties
hereto understands and agrees that no party hereto is, in this Agreement or in
any other agreement or document contemplated by this Agreement or otherwise,
representing or warranting in any way (i) as to the value or freedom from
encumbrance of, or any other matter concerning, any assets of such party or (ii)
as to the legal sufficiency to convey title to any asset transferred pursuant to
this Agreement or any Related Agreement, including, without limitation, any
Conveyancing or Assumption Instruments. It is also agreed and understood that
there are no warranties, express or implied, as to the merchantability or
fitness of any of the assets either transferred to or retained by the parties,
as the case may be, and all such assets shall be "as is, where is" and "with all
faults", including without limitation all environmental liabilities (provided,
however, that the absence of warranties shall have no effect upon the allocation
of Liabilities under this Agreement). Similarly, each party hereto understands
and agrees that no party hereto is, in this Agreement or in any other agreement
or document contemplated by this Agreement or otherwise, representing or
warranting in any way that the obtaining of any consents or approvals, the
execution and delivery of any amendatory agreements and the making of any
filings or applications contemplated by this Agreement will satisfy the
provisions of any or all applicable laws or judgments or other instruments or
agreements relating to such assets. Notwithstanding the foregoing, the parties
shall use their good faith efforts to obtain all consents and approvals, to
enter into all reasonable amendatory agreements and to make all filings and
applications which may be reasonably required for the consummation of the
transactions contemplated by this Agreement, and shall take all such further
reasonable actions as shall be reasonably necessary to preserve for each of the
Culbro Group and the CLR Group, to the greatest extent feasible, the economic
and operational benefits of the allocation of assets and Liabilities provided
for in this Agreement. In case at any time after the Asset Transfer Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary or desirable action.
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010 CONVEYANCING AND ASSUMPTION INSTRUMENTS. In connection with the
Asset Transfers and the assumptions of Liabilities contemplated by this
Agreement, the parties shall execute or cause to be executed by the appropriate
entities the Conveyancing and Assumption Instruments in such forms as the
parties shall reasonably agree, including but not limited to the assignment of
franchise rights and the assignment and assumption of existing agreements as set
forth in Schedule 2.08 hereto. The transfer of capital stock shall be effected
by means of delivery of stock certificates and executed stock powers and
notation on the stock record books of the corporation or other legal entities
involved and, to the extent required by applicable law, by notation on public
registries.
011 BUSINESS OPERATIONS.
(a) CASH ALLOCATION ON THE ASSET TRANSFER DATE. To satisfy the
business needs for cash of CLR as of the close of business on the Asset Transfer
Date, (i) CLR shall be allocated, out of all cash bank balances and short-term
investments of Culbro and its Subsidiaries ("Cash"), an amount of Cash equal to
the CLR Initial Cash Balance and (ii) Culbro shall transfer all other Cash to
Holdings. To the extent practicable, the parties shall use their reasonable
best efforts to take all necessary action to cause the Cash balances of CLR and
its Subsidiaries immediately prior to consummation of the Asset Transfers to be
equal to the CLR Initial Cash Balance. In the event the actual Cash balances of
CLR and its Subsidiaries as of the Asset Transfer Date are less than the CLR
Initial Cash Balance, the amount of the deficiency shall be recorded in the
accounts of CLR as of the Asset Transfer Date as a payable from Holdings to CLR
(which payable will be paid as promptly as practicable following the Asset
Transfer Date); and in the event the actual Cash balances of CLR and its
Subsidiaries as of the Asset Transfer Date exceeds the CLR Initial Cash Balance,
the amount of such excess shall be recorded in the accounts of Holdings and CLR
as of the Asset Transfer Date as a payable from CLR to Holdings (which payable
will be paid as promptly as practicable following the time it is determinable).
(b) CASH MANAGEMENT AFTER THE ASSET TRANSFER DATE. CLR shall
separate from Culbro, and establish and maintain a separate cash management
system and accounting records with respect to the CLR Business effective as of
12:01 a.m. on the day following the Asset Transfer Date; thereafter, (i) any
payments by Culbro or its Retained Subsidiaries on behalf of CLR or the CLR
Subsidiaries in connection with the CLR Business shall be recorded in the
accounts of the CLR Group as a payable from the CLR Group to the Culbro Group;
(ii) any payments by CLR or the CLR Subsidiaries on behalf of Culbro or its
Retained Subsidiaries in connection with the Retained Business shall be recorded
in the accounts of the Culbro Group as a payable from the Culbro Group to the
CLR Group; (iii) any cash payments received by Culbro and the Retained
Subsidiaries relating to the CLR Business or the CLR Assets shall be recorded in
the accounts of the Culbro Group as a payable from the Culbro Group to the CLR
Group; (iv) any cash payments received by CLR or the CLR Subsidiaries relating
to the Retained Business or the Retained Assets shall be recorded in the
accounts of the CLR Group as a payable from the CLR Group to the Culbro Group;
(v) CLR and Culbro shall make adjustments for late deposits, checks returned for
not sufficient funds and other post-Asset Transfer Date transactions as shall be
reasonable under the circumstances consistent with the purpose and intent of
this Agreement; and (vi) the net balance due to the Culbro Group or the CLR
Group, as the case may be, in respect of the aggregate amounts of clauses (i),
(ii), (iii), (iv) and (v) shall be paid by CLR or Culbro, as appropriate, as
promptly as practicable. For purposes of this Section 2.09(b), the parties
contemplate that the Retained Business and the CLR Business, including but not
limited to the administration of accounts payable and accounts receivable, will
be conducted in the normal course.
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(c) SEPARATE OPERATIONS. From and after the Asset Transfer Date, the
CLR Business shall be operated as a stand-alone business. Culbro agrees that
unless and until the Distribution is abandoned pursuant to Section 10.07 below,
Culbro will not cause CLR to make any distribution, in cash or otherwise, to
Culbro.
(d) AUDIT AND DISPUTES. All transactions contemplated in this
Section 2.09 shall be subject to audit by the parties, and any dispute
thereunder shall be resolved by an independent firm of certified public accounts
mutually acceptable to Culbro and CLR, whose decision shall be final and
unappealable.
ARTICLE III
ASSUMPTION AND SATISFACTION OF LIABILITIES
012 ASSUMPTION AND SATISFACTION OF LIABILITIES. Except as set forth
in the Tax Sharing Agreement, the Employee Benefits Allocation Agreement, the
Services Agreement, the Agriculture Lease or other Related Agreements, effective
as of and after the Asset Transfer Date, (a) Holdings shall, and/or shall cause
the Holdings Transferred Subsidiaries to, assume, pay, perform, and discharge in
due course all of the Retained Liabilities and (b) CLR shall, and/or shall cause
the CLR Subsidiaries to, assume, pay, perform, and discharge in due course all
of the CLR Liabilities.
ARTICLE IV
THE DISTRIBUTION
013 COOPERATION PRIOR TO THE DISTRIBUTION.
(a) Culbro and CLR shall prepare, and CLR shall file with the
Commission, a Form 10 registration statement with respect to the registration
under the Exchange Act of the CLR Common Stock (the "Form 10 Registration
Statement").
(b) Each of Culbro, Holdings and CLR shall cooperate in preparing,
filing with the Commission and causing to become effective any registration
statements or amendments thereto which are appropriate to reflect the
establishment of, or amendments to, any employee benefit plans and other plans
contemplated by this Agreement.
(c) Culbro shall file a "no-action" letter with the Commission with
respect to the Distribution, shall use its best efforts to receive a no-action
position from the Commission that the Distribution will not require registration
under the Securities Act and shall take all other action as may be necessary and
appropriate (including registration of the CLR Common Stock under the Securities
Act) to obtain approval under federal securities laws for the Distribution.
(d) Culbro shall prepare and file with the Commission a registration
statement on Form S-4 and related proxy materials (collectively, the "Merger
Proxy") with respect to effectuating the Merger, and shall take all other action
as may be necessary to consummate the Merger.
(e) Each of Culbro, Holdings and CLR shall take all such action as
may be necessary or appropriate under the securities or blue sky laws of states
or other political subdivisions of the United States in connection with the
transactions contemplated by this Agreement and the Related Agreements.
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(f) Culbro and CLR shall prepare, and CLR shall file and pursue, an
application to permit the listing of CLR Common Stock on NASDAQ.
(g) Culbro, Holdings and CLR, as the case may be, shall make any
requisite filings under the HSR Act.
(h) Each of Culbro, Holdings and CLR shall use all reasonable efforts
to obtain any third-party consents or approvals necessary or desirable in
connection with the transactions contemplated hereby, including without
limitation the consents or approvals set forth on Schedule 4.01 hereto
(collectively, the "Required Consents").
(i) Each of Culbro, Holdings and CLR shall use all reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary or desirable under applicable law, to consummate the
transactions contemplated under this Agreement.
S1 CULBRO BOARD ACTION; CONDITIONS PRECEDENT TO THE DISTRIBUTION.
The Culbro Board shall, in its discretion, establish the Distribution Record
Date and the Distribution Date and any appropriate procedures in connection with
the Distribution. In no event shall the Distribution occur unless the following
conditions shall have been satisfied:
(i) the Tax Ruling shall have been granted in form and substance
satisfactory to the Culbro Board, in its sole discretion, or the Culbro Board
shall have received an opinion of Xxxxxx & Xxxxxxx (or, in the event of a
conflict, of another national law firm mutually acceptable to the parties
hereto) in form and substance satisfactory to it in its sole discretion to the
effect that the proposed Distribution constitutes a tax-free spin-off under the
Code.
(ii) Culbro and Holdings shall have entered into the Merger
Agreement and the Holders of Culbro Common Stock shall have approved the Merger;
(iii) Culbro and CLR shall have obtained all approvals from
government authorities (including the Commission), the failure of which to
obtain would, in the determination of the Culbro Board, have a material adverse
effect on Culbro or CLR; and
(iv) Culbro and CLR shall have entered into the Related
Agreements;
PROVIDED, HOWEVER, that (i) any such condition may be waived by the Culbro Board
in its sole discretion upon the advice of counsel and (ii) the satisfaction of
such conditions shall not create any obligation on the part of Culbro or any
other party hereto to effect the Distribution or in any way limit Culbro's power
of termination set forth in Section 10.07 or alter the consequences of any such
termination from those specified in such Section.
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015 THE DISTRIBUTION. On the Distribution Date, subject to the
conditions and rights of termination set forth in this Agreement, Culbro shall
deliver to the Agent a share certificate representing all of the then
outstanding shares of CLR Common Stock owned by Culbro and shall instruct the
Agent to distribute, on or as soon as practicable following the Distribution
Date, such CLR Common Stock to the Holders. CLR agrees to provide all share
certificates that the Agent shall require in order to effect the Distribution.
ARTICLE V
INDEMNIFICATION
016 INDEMNIFICATION BY CULBRO.
Except as otherwise expressly set forth in a Related Agreement, Culbro
and Holdings shall indemnify, defend and hold harmless CLR and each of the CLR
Subsidiaries, and each of their respective directors, officers, employees,
agents and Affiliates and each of the heirs, executors, successors and assigns
of any of the foregoing (the "CLR Indemnitees") from and against the Retained
Liabilities and any and all losses, Liabilities, damages, including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions (collectively, "CLR Indemnifiable Losses" and, individually, a "CLR
Indemnifiable Loss") of the CLR Indemnitees arising out of or due to the failure
or alleged failure of Culbro or any of its Affiliates to (i) pay, perform or
otherwise discharge in due course any of the Retained Liabilities or (ii) comply
with the provisions of Section 5.04.
017 INDEMNIFICATION BY CLR. Except as otherwise expressly set forth
in a Related Agreement, CLR shall indemnify, defend and hold harmless Culbro and
each of the Retained Subsidiaries, and each of their directors, officers,
employees, agents and Affiliates and each of the heirs, executors, successors
and assigns of any of the foregoing (the "Culbro Indemnitees") from and against
the CLR Liabilities and any and all losses, Liabilities, damages, including,
without limitation, the costs and expenses of any and all Actions, threatened
Actions, demands, assessments, judgments, settlements and compromises relating
thereto and attorneys' fees and any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any such Actions or
threatened Actions (collectively, "Culbro Indemnifiable Losses" and,
individually, a "Culbro Indemnifiable Loss") of the Culbro Indemnitees arising
out of or due to the failure or alleged failure of CLR or any of its Affiliates
to (i) pay, perform or otherwise discharge in due course any of the CLR
Liabilities or (ii) comply with the provisions of Section 5.04. The "CLR
Indemnifiable Losses" and the "Culbro Indemnifiable Losses" are collectively
referred to as the "Indemnifiable Losses."
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018 INSURANCE PROCEEDS. The amount that any party (an "Indemnifying
Party") is or may be required to pay to any other Person (an "Indemnitee")
pursuant to Section 5.01 or Section 5.02 shall be reduced (including, without
limitation, retroactively) by any Insurance Proceeds or other amounts actually
recovered by or on behalf of such Indemnitee in reduction of the related
Indemnifiable Loss. If an Indemnitee shall have received the payment required
by this Agreement from an Indemnifying Party in respect of an Indemnifiable Loss
and shall subsequently actually receive Insurance Proceeds, or other amounts in
respect of such Indemnifiable Loss as specified above, then such Indemnitee
shall pay to such Indemnifying Party a sum equal to the amount of such Insurance
Proceeds or other amounts actually received.
019 PROCEDURE FOR INDEMNIFICATION.
(a) Except as may be set forth in a Related Agreement, if an
Indemnitee shall receive notice or otherwise learn of the assertion by a Person
(including, without limitation, any governmental entity) who is not a party to
this Agreement or to any of the Related Agreements of any claim or of the
commencement by any such Person of any Action (a "Third-Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to this Agreement, such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after becoming aware of such
Third-Party Claim; PROVIDED, that the failure of any Indemnitee to give notice
as required by this Section 5.04 shall not relieve the Indemnifying Party of its
obligations under this Article V, except to the extent that such Indemnifying
Party is prejudiced by such failure to give notice. Such notice shall describe
the Third-Party Claim in reasonable detail, and shall indicate the amount
(estimated if necessary) of the Indemnifiable Loss that has been or may be
sustained by such Indemnitee.
(b) An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third-Party Claim, provided that the Indemnifying Party
must confirm in writing that it agrees that Indemnitee is entitled to
indemnification hereunder in respect of such Third-Party Claim. Within 30 days
of the receipt of notice from an Indemnitee in accordance with Section 5.04(a)
(or sooner, if the nature of such Third-Party Claim so requires), the
Indemnifying Party shall notify the Indemnitee of its election whether to assume
responsibility for such Third-Party Claim (provided that if the Indemnifying
Party does not so notify the Indemnitee of its election within 30 days after
receipt of such notice from the Indemnitee, the Indemnifying Party shall be
deemed to have elected not to assume responsibility for such Third-Party Claim),
and such Indemnitee shall cooperate in the defense or settlement or compromise
of such Third-Party Claim. After notice from an Indemnifying Party to an
Indemnitee of its election to assume responsibility for a Third-Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article V for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; PROVIDED, that if the defendants in any
such claim include both the Indemnifying Party and one or more Indemnitees and
in such Indemnitees' reasonable judgment a conflict of interest between such
Indemnitees and such Indemnifying Party exists in respect of such claim, such
Indemnitees shall have the right to employ separate counsel and in that event
the reasonable fees and expenses of such separate counsel (but not more than one
separate counsel reasonably satisfactory to the Indemnifying Party) shall be
paid by such Indemnifying Party. If an Indemnifying Party elects not to assume
responsibility for a Third-Party Claim (which election may be made only in the
event of a good faith dispute that a claim was inappropriately tendered under
Section 5.01 or 5.02, as the case may be) such Indemnitee may defend or (subject
to the following sentence) seek to compromise or settle such Third-Party Claim.
Notwithstanding the foregoing, an Indemnitee may not settle or compromise any
claim without prior written notice to the
16
Indemnifying Party, which shall have the option within ten days following the
receipt of such notice (i) to disapprove the settlement and assume all past and
future responsibility for the claim, including reimbursing the Indemnitee for
prior expenditures in connection with the claim, or (ii) to disapprove the
settlement and continue to refrain from participation in the defense of the
claim, in which event the Indemnifying Party shall have no further right to
contest the amount or reasonableness of the settlement if the Indemnitee elects
to proceed therewith, or (iii) to approve the amount of the settlement,
reserving the Indemnifying Party's right to contest the Indemnitee's right to
indemnity, or (iv) to approve and agree to pay the settlement. In the event the
Indemnifying Party makes no response to such written notice from the Indemnitee,
the Indemnifying Party shall be deemed to have elected option (ii) above.
(c) If an Indemnifying Party chooses to defend or to seek to
compromise any Third-Party Claim, the Indemnitee shall make available to such
Indemnifying Party any personnel and any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense.
(d) Notwithstanding anything else in this Section 5.04 to the
contrary, an Indemnifying Party shall not settle or compromise any Third-Party
Claim unless such settlement or compromise contemplates as an unconditional term
thereof the giving by such claimant or plaintiff to the Indemnitee of a written
release from all liability in respect of such Third-Party Claim (and provided
further that such settlement may not provide for any non-monetary relief by
Indemnitee without the written consent of Indemnitee). In the event the
Indemnitee shall notify the Indemnifying Party in writing that such Indemnitee
declines to accept any such settlement or compromise, such Indemnitee may
continue to contest such Third-Party Claim, free of any participation by such
Indemnifying Party, at such Indemnitee's sole expense. In such event, the
obligation of such Indemnifying Party to such Indemnitee with respect to such
Third-Party Claim shall be equal to (i) the costs and expenses of such
Indemnitee prior to the date such Indemnifying Party notifies such Indemnitee of
the offer to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) PLUS (ii) the lesser of (A) the amount of any
offer of settlement or compromise which such Indemnitee declined to accept or
(B) the actual out-of-pocket amount such Indemnitee is obligated to pay
subsequent to such date as a result of such Indemnitee's continuing to pursue
such Third-Party Claim.
(e) Any claim on account of an Indemnifiable Loss which does not
result from a Third-Party Claim shall be asserted by written notice given by the
Indemnitee to the applicable Indemnifying Party. Such Indemnifying Party shall
have a period of 15 days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such 15-day
period, such Indemnifying Party shall be deemed to have refused to accept
responsibility to make payment. If such Indemnifying Party does not respond
within such 15-day period or rejects such claim in whole or in part, such
Indemnitee shall be free to pursue such remedies as may be available to such
party under applicable law or under this Agreement.
(f) In addition to any adjustments required pursuant to Section 5.03,
if the amount of any Indemnifiable Loss shall, at any time subsequent to the
payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
(g) In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Third-Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or
17
claim relating to such Third-Party Claim against any claimant or plaintiff
asserting such Third-Party Claim. Such Indemnitee shall cooperate with such
Indemnifying Party in a reasonable manner, and at the cost and expense of such
Indemnifying Party, in prosecuting any subrogated right or claim.
020 REMEDIES CUMULATIVE. The remedies provided in this Article V
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
021 SURVIVAL OF INDEMNITIES. The obligations of each of CLR and
Culbro under this Article V shall survive the Merger and the sale or other
transfer by it of any assets or businesses or the assignment by it of any
Liabilities, with respect to any Indemnifiable Loss of the other related to such
assets, businesses or Liabilities.
ARTICLE VI
CERTAIN ADDITIONAL MATTERS
022 CLR BOARD. CLR and Culbro shall take all actions which may be
required to constitute, effective as of the Distribution Date, the following
persons as the directors of CLR: Xxxxx Xxxxxxx, Xx., Xxxxx Xxxxxxx, Xx.,
Xxxxxxxxx X. Xxxxxxxx, Xxxx X. Xxxxx and Xxxx Xxxxxxxx.
023 RESIGNATIONS.
(a) CLR shall cause all of its directors and all CLR Employees to
resign, effective as of the Distribution Date, from all boards of directors or
similar governing bodies of Culbro or any of its Retained Subsidiaries on which
they serve, and from all positions as officers or employees of Culbro or any of
its Retained Subsidiaries in which they serve, except (i) Xxxxx X. Xxxxxxx, Xx.
shall serve as Chairman of the Board of Culbro and of Holdings and as Chairman
of the Board of CLR, (ii) Xxxxx X. Xxxxxxx, Xx. shall serve as a director and as
President and Chief Executive Officer of Culbro and of Holdings and as a
director of CLR, (iii) Xxxx X. Xxxxx shall serve as a director of Culbro and of
Holdings and as a director of CLR and (iv) as set forth in the Services
Agreement. Culbro shall cause all of its directors and the Retained Employees
to resign from all boards of directors or similar governing bodies of CLR and of
any of its Subsidiaries on which such directors and Retained Employees serve,
and from all positions as officers or employees of CLR or any of its
Subsidiaries in which they serve, except to the extent specified in the
preceding sentence.
024 CERTIFICATE AND BYLAWS. On or prior to the Distribution Date,
CLR shall adopt the CLR Certificate and the CLR Bylaws, and shall file the CLR
Certificate with the Secretary of State of the State of Delaware.
ARTICLE VII
POST-DISTRIBUTION TRANSFERS
025 MERGER. Following the Distribution, and as promptly as
practicable after the date six months following consummation of the IPO (or such
earlier date as determined by the Culbro Board after receiving the consent of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and the approval of the
merger by the Culbro stockholders), Culbro and Holdings shall consummate the
Merger in accordance
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with the Merger Agreement. From and after the Merger, all rights and
obligations of Culbro hereunder shall survive and shall be vested in Holdings.
026 CERTAIN POST-DISTRIBUTION TRANSACTIONS.
(a) CLR. CLR shall, and shall cause each of the CLR Subsidiaries to,
comply with each representation and statement made, or to be made, to any taxing
authority in connection with any ruling obtained, or to be obtained, by Culbro,
Holdings and CLR acting together, from any such taxing authority with respect to
any transaction contemplated by this Agreement; and until the second anniversary
of the Distribution Date, neither CLR nor any of the CLR Subsidiaries shall take
or omit any action inconsistent therewith, unless (i) required to do so by law,
(ii) permitted to do so by the prior written consent of Culbro, (iii) pursuant
to a favorable supplemental ruling letter reasonably satisfactory to Culbro that
such act or omission would not adversely affect the tax consequences of the
Distribution to Culbro or to the stockholders of Culbro, as set forth in any
ruling issued by any taxing authority or (iv) pursuant to an opinion of Xxxxxx &
Xxxxxxx (or, in the event of a conflict, of another national law firm mutually
acceptable to the parties hereto) reasonably satisfactory to Culbro that such
act or omission would not adversely affect the tax consequences of the
Distribution to Culbro or to the stockholders of Culbro. Neither CLR nor any of
the CLR Subsidiaries has a present intention to take or omit any such action.
(b) CULBRO. Culbro shall, and shall cause each of the Retained
Subsidiaries to, comply with each representation and statement made, or to be
made, to any taxing authority in connection with any ruling obtained, by Culbro,
Holdings and CLR acting together, from any such taxing authority with respect to
any transaction contemplated by this Agreement; and until the second anniversary
of the Distribution Date, neither Culbro nor any of the Retained Subsidiaries
shall take or omit any action inconsistent therewith, unless (i) required to do
so by law, (ii) permitted to do so by the prior written consent of CLR, (iii)
pursuant to a favorable supplemental ruling letter reasonably satisfactory to
CLR that such act or omission would not adversely affect the tax consequences of
the Distribution to CLR or to the stockholders of CLR, as set forth in any
ruling issued by any taxing authority or (iv) pursuant to an opinion of Xxxxxx &
Xxxxxxx (or, in the event of a conflict, of another national law firm mutually
acceptable to the parties hereto) reasonably satisfactory to Culbro that such
act or omission would not adversely affect the tax consequences of the
Distribution to Culbro or to the stockholders of Culbro. Neither Culbro nor any
of the Retained Subsidiaries has a present intention to take or omit any such
action.
ARTICLE VIII
ACCESS TO INFORMATION AND SERVICES
027 PROVISION OF CORPORATE RECORDS.
(a) Except as may otherwise be provided in a Related Agreement,
Culbro shall arrange as soon as practicable following the Distribution Date, to
the extent not previously delivered in connection with the transactions
contemplated in Article II, for the transportation to CLR of the CLR Books and
Records in its possession, except to the extent such items are already in the
possession of CLR or a CLR Subsidiary. Such CLR Books and Records shall be the
property of CLR, but shall be available to Culbro for review and duplication
until Culbro shall notify CLR in writing that such records are no longer of use
to Culbro.
19
(b) Except as otherwise provided in a Related Agreement, CLR shall
arrange as soon as practicable following the Distribution Date, to the extent
not previously delivered in connection with the transactions contemplated in
Article II, for the transportation to Culbro of the Culbro Books and Records in
its possession, except to the extent such items are already in the possession of
Culbro. The Culbro Books and Records shall be the property of Culbro, but shall
be available to CLR for review and duplication until CLR shall notify Culbro in
writing that such records are no longer of use to CLR.
028 ACCESS TO INFORMATION.
Except as otherwise provided in a Related Agreement, from and after
the Distribution Date, Culbro shall afford to CLR and its authorized
accountants, counsel and other designated representatives reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data, software and systems
and other data and information relating to pre-Distribution operations
(collectively, "Information") within Culbro's possession insofar as such access
is reasonably required by CLR for the conduct of its business, subject to
appropriate restrictions for classified or Privileged Information. Similarly,
except as otherwise provided in a Related Agreement, CLR shall afford to Culbro
and its authorized accountants, counsel and other designated representatives
reasonable access (including using reasonable efforts to give access to persons
or firms possessing information) and duplicating rights during normal business
hours to Information within CLR's possession, insofar as such access is
reasonably required by Culbro for the conduct of its business, subject to
appropriate restrictions for classified or Privileged Information. Information
may be requested under this Article VIII for the legitimate business purposes of
either party, including without limitation, audit, accounting, claims (including
claims for indemnification hereunder), litigation and tax purposes, as well as
for purposes of fulfilling disclosure and reporting obligations and for
performing this Agreement and the transactions contemplated hereby.
029 PRODUCTION OF WITNESSES. At all times from and after the
Distribution Date, each of Culbro and CLR shall use reasonable efforts to make
available to the others, upon written request, its and its subsidiaries'
officers, directors, employees and agents as witnesses to the extent that such
persons may reasonably be required in connection with any Action.
030 REIMBURSEMENT. Except to the extent otherwise contemplated in
any Related Agreement, a party providing Information or witness services to the
other party under this Article VIII shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments of such amounts,
relating to supplies, disbursements and other out-of-pocket expenses (at cost)
and direct and indirect expenses of employees who are witnesses or otherwise
furnish assistance (at cost), as may be reasonably incurred in providing such
Information or witness services.
031 RETENTION OF RECORDS. Except as otherwise required by law or
agreed to in a Related Agreement or otherwise in writing, each of Culbro and CLR
may destroy or otherwise dispose of any of the Information (including
information that is material Information and is not contained in other
Information retained by Culbro or CLR, as the case may be) at any time after the
tenth anniversary of this Agreement, provided that, prior to such destruction or
disposal, (a) it shall provide no less than 90 or more than 120 days prior
written notice to the other, specifying in reasonable detail the Information
proposed to be destroyed or disposed of and (b) if a recipient of such notice
shall request in writing prior to the scheduled date for such destruction or
disposal that any of the Information proposed to be destroyed or disposed of be
delivered to such requesting party, the party proposing the destruction or
disposal shall
20
promptly arrange for the delivery of such of the Information as was requested at
the expense of the party requesting such Information.
032 CONFIDENTIALITY. Each of Culbro and its Subsidiaries on the one
hand, and CLR and its Subsidiaries on the other hand, shall hold, and shall
cause its consultants and advisors to hold, in strict confidence, all
Information concerning the other in its possession or furnished by the other or
the other's representatives pursuant to this Agreement (except to the extent
that such Information has been (i) in the public domain through no fault of such
party or (ii) later lawfully acquired from other sources by such party), and
each party shall not release or disclose such Information to any other person,
except its auditors, attorneys, financial advisors, rating agencies, bankers and
other consultants and advisors, unless compelled to disclose by judicial or
administrative process or, as reasonably advised by its counsel, by other
requirements of law, or unless such Information is reasonably required to be
disclosed in connection with (x) any litigation with any third-parties or
litigation between the Culbro Group and the CLR Group, (y) any contractual
agreement to which the Culbro Group or the CLR Group are currently parties or
(z) in exercise of either parties' rights hereunder.
033 PRIVILEGED MATTERS. Culbro and CLR recognize that legal and
other professional services that have been and will be provided prior to the
Distribution Date have been and will be rendered for the benefit of both the
Culbro Group and the CLR Group and that both the Culbro Group and the CLR Group
should be deemed to be the client for the purposes of asserting all Privileges.
To allocate the interests of each party in the Privileged Information, the
parties agree as follows:
(a) Culbro shall be entitled, in perpetuity, to control the assertion
or waiver of all Privileges in connection with Privileged Information which
relates solely to the Retained Business, whether or not the Privileged
Information is in the possession of or under the control of Culbro or CLR.
Culbro shall also be entitled, in perpetuity, to control the assertion or waiver
of all Privileges in connection with Privileged Information that relates solely
to the subject matter of any claims constituting Retained Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by Culbro, whether or not the Privileged
Information is in the possession of or under the control of Culbro or CLR.
(b) CLR shall be entitled, in perpetuity, to control the assertion or
waiver of all Privileges in connection with Privileged Information which relates
solely to the CLR Business, whether or not the Privileged Information is in the
possession of or under the control of Culbro or CLR. CLR shall also be
entitled, in perpetuity, to control the assertion or waiver of all Privileges in
connection with Privileged Information which relates solely to the subject
matter of any claims constituting CLR Liabilities, now pending or which may be
asserted in the future, in any lawsuits or other proceedings initiated against
or by CLR, whether or not the Privileged Information is in the possession of CLR
or under the control of Culbro or CLR.
(c) Culbro and CLR agree that they shall have a shared Privilege,
with equal right to assert or waive, subject to the restrictions in this Section
8.07, with respect to all Privileges not allocated pursuant to the terms of
Sections 8.07(a) and (b). (All Privileges relating to any claims, proceedings,
litigation, disputes, or other matters which involve both Culbro and CLR in
respect of which Culbro and CLR retain any responsibility or liability under
this Agreement, shall be subject to a shared Privilege.)
(d) No party may waive any Privilege which could be asserted under
any applicable law, and in which the other party has a shared Privilege, without
the consent of the other party, except to the extent
21
reasonably required in connection with any litigation with third-parties or as
provided in subsection (e) below. Consent shall be in writing, or shall be
deemed to be granted unless written objection is made within twenty (20) days
after notice upon the other party requesting such consent.
(e) In the event of any litigation or dispute between a member of the
Culbro Group and a member of the CLR Group, either party may waive a Privilege
in which the other party has a shared Privilege, without obtaining the consent
of the other party, provided that such waiver of a shared Privilege shall be
effective only as to the use of Information with respect to the litigation or
dispute between the Culbro Group and the CLR Group, and shall not operate as a
waiver of the shared Privilege with respect to third-parties.
(f) If a dispute arises between the parties regarding whether a
Privilege should be waived to protect or advance the interest of either party,
each party agrees that it shall negotiate in good faith, shall endeavor to
minimize any prejudice to the rights of the other party, and shall not
unreasonably withhold consent to any request for waiver by the other party.
Each party specifically agrees that it will not withhold consent to waiver for
any purpose except to protect its own legitimate interests.
(g) Upon receipt by any party of any subpoena, discovery or other
request which arguably calls for the production or disclosure of Information
subject to a shared Privilege or as to which the other party has the sole right
hereunder to assert a Privilege, or if any party obtains knowledge that any of
its current or former directors, officers, agents or employees have received any
subpoena, discovery or other requests which arguably calls for the production or
disclosure of such Privileged Information, such party shall promptly notify the
other party of the existence of the request and shall provide the other party a
reasonable opportunity to review the Information and to assert any rights it may
have under this Section 8.07 or otherwise to prevent the production or
disclosure of such Privileged Information.
(h) The transfer of the CLR Books and Records and the Culbro Books
and Records and other Information between Culbro and its Subsidiaries and CLR
and its Subsidiaries, is made in reliance on the agreement of Culbro and CLR, as
set forth in Sections 8.06 and 8.07, to maintain the confidentiality of
Privileged Information and to assert and maintain all applicable Privileges.
The access to information being granted pursuant to Sections 8.01 and 8.02
hereof, the agreement to provide witnesses and individuals pursuant to Section
8.03 hereof and the transfer of Privileged Information between Culbro and its
Subsidiaries and CLR and its Subsidiaries pursuant to this Agreement shall not
be deemed a waiver of any Privilege that has been or may be asserted under this
Agreement or otherwise.
22
ARTICLE IX
INSURANCE
034 POLICIES AND RIGHTS INCLUDED WITHIN THE CLR ASSETS. Without
limiting the generality of the definition of the CLR Assets set forth in Section
2.04 or the effect of Section 2.04, the CLR Assets shall include (a) any and all
rights of an insured party under each of the Shared Policies, specifically
including rights of indemnity and the right to be defended by or at the expense
of the insurer, with respect to all injuries, losses, liabilities, damages and
expenses incurred or claimed to have been incurred on or prior to the Asset
Transfer Date by any party in or in connection with the conduct of the CLR
Business or, to the extent any claim is made against CLR or any of its
subsidiaries, the Retained Business, and which injuries, losses, liabilities,
damages and expenses may arise out of insured or insurable occurrences or events
under one or more of the Shared Policies; PROVIDED, HOWEVER, that nothing in
this clause shall be deemed to constitute (or to reflect) the assignment of the
Shared Policies, or any of them, to CLR and (b) the CLR Policies.
035 POST-ASSET TRANSFER DATE CLAIMS. If, subsequent to the Asset
Transfer Date, any person, corporation, firm or entity shall assert a claim
against CLR or any CLR Subsidiary with respect to any injury, loss, liability,
damage or expense incurred or claimed to have been incurred prior to the Asset
Transfer Date in or in connection with the conduct of the CLR Business or, to
the extent any claim is made against CLR or any of its Subsidiaries or the CLR
Business, and which injury, loss, liability, damage or expense may arise out of
insured or insurable occurrences or events under one or more of the Shared
Policies, Culbro shall at the time such claim is asserted be deemed to assign,
without need of further documentation, to CLR any and all rights of an insured
party under the applicable Shared Policy with respect to such asserted claim,
specifically including rights of indemnity and the right to be defended by or at
the expense of the insurer; PROVIDED, HOWEVER, that nothing in this sentence
shall be deemed to constitute (or to reflect) the assignment of the Shared
Policies, or any of them, to CLR.
036 ADMINISTRATION.
(a) INSURANCE PREMIUMS. Culbro shall have the right but not the
obligation to pay the premiums, to the extent that CLR does not pay premiums
with respect to CLR Liabilities (retrospectively-rated or otherwise), with
respect to Shared Policies and the Retained Policies, as required under the
terms and conditions of the respective Policies, whereupon CLR shall forthwith
reimburse Culbro for that portion of such premiums paid by Culbro as are
attributable to the CLR Liabilities. Unless otherwise agreed by the parties
hereto, Culbro shall purchase (subject to a 50% reimbursement by CLR within 15
days of its receipt of invoice) continued coverage under its director and
officer liability insurance policy for a period no longer than 180 days
following the Asset Transfer Date for claims relating to periods prior to the
Asset Transfer Date.
(b) ALLOCATION OF INSURANCE PROCEEDS. Insurance Proceeds received
with respect to claims, costs and expenses under the Policies shall be paid to
CLR with respect to the CLR Liabilities and to Culbro with respect to the
Retained Liabilities. Payment of the allocable portions of indemnity costs of
Insurance Proceeds resulting from the liability policies will be made to the
appropriate party upon receipt from the insurance carrier. In the event that
the aggregate limits on any Shared Policies are exceeded, the parties agree to
provide an equitable allocation of Insurance Proceeds received after the Asset
Transfer Date based upon their respective bona fide claims. The parties agree
to use their best efforts to cooperate with respect to insurance matters.
23
037 AGREEMENT FOR WAIVER OF CONFLICT AND SHARED DEFENSE. In the
event that Insured Claims of both CLR and Culbro exist relating to the same
occurrence, CLR and Culbro agree to jointly defend and to waive any conflict of
interest necessary to the conduct of that joint defense. Nothing in this
paragraph shall be construed to limit or otherwise alter in any way the
indemnity obligations of the parties to this Agreement, including those created
by this Agreement, by operation of law or otherwise.
ARTICLE X
MISCELLANEOUS
038 COMPLETE AGREEMENT; CONSTRUCTION. This Agreement, including the
Schedules and Exhibits and the Related Agreements and other agreements and
documents referred to herein, shall constitute the entire agreement between the
parties with respect to the subject matter hereof and thereof and shall
supersede all previous negotiations, commitments and writings with respect to
such subject matter. Notwithstanding any other provisions in this Agreement to
the contrary, in the event and to the extent that there shall be a conflict
between any provision of this Agreement and any provision of a Related
Agreement, then the provision in the applicable Related Agreement shall control.
039 EXPENSES. All costs and expenses in connection with the
preparation, execution, delivery and implementation of this Agreement, the
Distribution, the Merger, the IPO and the Asset Transfers and with the
consummation of the transactions contemplated thereby shall be paid by Culbro.
040 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
principles of conflicts of laws thereof.
041 NOTICES. All notices and other communications hereunder shall be
in writing and shall be delivered by hand or mailed by registered or certified
mail (return receipt requested) to the parties at the following addresses (or at
such other addresses for a party as shall be specified by like notice) and shall
be deemed given on the date on which such notice is received:
To Culbro and Holdings:
Culbro Corporation / General Cigar Holdings, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Xx.
To CLR:
Culbro Land Resources, Inc.
0 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx
042 AMENDMENTS. This Agreement may not be modified or amended except
by an agreement in writing signed by the parties.
24
043 SUCCESSORS AND ASSIGNS. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, and from and after the Merger,
Holdings shall succeed to all of Culbro's rights and obligations under this
Agreement and the Related Agreements.
044 TERMINATION. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the Culbro Board without the approval of CLR. In the event
of such termination, no party shall have any liability to any other party
pursuant to this Agreement.
045 SUBSIDIARIES. Each of the parties hereto shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party
which is contemplated to be a Subsidiary of such party on and after the
Distribution Date.
046 NO THIRD-PARTY BENEFICIARIES. Except for the provisions of
Article V relating to Indemnities, this Agreement is solely for the benefit of
the parties hereto and their respective Subsidiaries and Affiliates and should
not be deemed to confer upon third-parties any remedy, claim, Liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
047 TITLES AND HEADINGS. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
048 EXHIBITS AND SCHEDULES. The Exhibits and Schedules shall be
construed with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein.
049 LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to
any rights or remedies otherwise available to any party hereto, each party
hereto acknowledges that damages would be an inadequate remedy for any breach of
the provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
050 CONSENT OF PARTIES. The Parties hereby consent to the
jurisdiction of the New York Supreme Court, Nassau County, or the United States
District Court for the Eastern District of New York, for all purposes.
25
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
CULBRO CORPORATION
By:
------------------------------------
Name:
Title:
CULBRO LAND RESOURCES, INC.
By:
------------------------------------
Name:
Title:
GENERAL CIGAR HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
26
SCHEDULE 1.01(a)
CLR Financing Obligations
3. Promissory note and mortgage to First Union Bank, as successor to Center
Bank, with respect to certain parcels of land and improvements thereon
located in the State of Connecticut.
4. Promissory note and mortgage to ______________ with respect to certain
parcels of land and improvements thereon located in the State of
Connecticut.
SCHEDULE 1.01(b)
Culbro Financing Obligations
5.Leasehold for office space at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx,
dated October 20, 1983.
6.Leasehold for office and hangar space at Teterboro Airport, 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx, dated July 1, 1996.
7.Promissory note and mortgage to General Electric Capital Corporation with
respect to the Airplane.
8.Promissory note and mortgage to The Chase Manhattan Bank, as successor to
Manufacturers Hanover Trust Company, with respect to the land and
improvements located at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx.
0.Xxxxxxx lease of Xxxx Tool & Plastics Corp., dated December 23, 1988.
10.Guarantee of capital lease of Xxxx Tool & Plastics Corp., dated December
23, 1988.
11.Guarantee of leasehold of Club Macanudo at 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, dated August 7, 1995.
12.Guarantee of leasehold of Club Macanudo (Chicago) at 00 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx, dated October 1, 1996.
13.Reserves held in escrow with respect to that certain Environmental Fund
and Security Agreement, dated as of November 14, 1990, among Xxxxx &
Xxxxxxxxxx Tobacco Corporation, Culbro, General Cigar and The Chase
Manhattan Bank, as successor to Manufacturers Hanover Trust Company.
SCHEDULE 1.01(c)
Commercial Real Estate
14.Approximately 0.83 acres situated in one parcel located at 000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx, 00000.
15.Approximately 45.35 acres situated in one parcel located at 00 Xxxxxxx
Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxx, 00000.
16.Approximately 11.98 acres historically known as "Home Xxxxx" and
situated in one parcel located at Xxxx Xxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, 00000.
17.Approximately 43.20 acres historically known as "Home Xxxxx" and
situated in one parcel located at Xxx #0, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, 00000.
18.Approximately 4.00 acres historically known as "Home Xxxxx" and
situated in one parcel located at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, 00000.
19.Approximately 7.50 acres historically known as "Home Xxxxx" and
situated in one parcel located at Xxxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, 00000.
20.Approximately 11.80 acres historically known as "Home Xxxxx" and
situated in one parcel located at Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx,
00000.
21.Approximately 5.0 acres historically known as "Home Xxxxx" and
situated in one parcel located at Xxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, 00000.
22.Approximately 74.75 acres historically known as "Xxxxxxx Farm" and
situated in two parcels located at Xxx Xxxx Xxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, 00000.
23.Approximately 13.25 acres historically known as "Xxxxx Lot #8" and
situated in one parcel located at 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, 00000.
24.Approximately 19.9 acres historically known as "Indianhead Farm" and
situated in one parcel at 103 & 000 Xxxxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxxxxxxxx, 00000.
25.Approximately 15.0 acres historically known as "Indianhead Farm" and
situated in one parcel at Xxxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxxxxxx,
00000.
26.Approximately 275.37 acres historically known as "Floydville" and
situated in two parcels located at Xxxx 0, 0 & 00, Xxxxxxx Xxxx and
"Lordship", Xxxx Xxxxxx, Xxxxxxxxxxx, 00000.
27.Approximately 117.10 acres historically known as "Floydville" and
situated in twelve parcels located at Lots 1, 8, 11, 13, 17 and 00,
Xxxxxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxxx, 00000.
28.Approximately 36.90 acres historically known as "Xxxxxxxxx" and situated
in one parcel at Xxx #00, Xxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxxx, 00000.
SCHEDULE 1.01(c)(continued)
29.Approximately 82.90 acres historically known as "Spoonville" and
situated in one parcel at Xxxxxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxxx, 00000.
30.Approximately 262.69 acres historically known as "Imperial Farm" and
situated in two parcels at 00-00 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx,
00000.
31.Approximately 4.00 acres historically known as "Imperial Corporate
Headquarters" and situated in one parcel at 00 Xxxxxx Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxx, 00000.
32.Approximately 11.84 acres historically known as "Manitook Camp" and
situated in four parcels at 456, 456A, 456B and 000 Xxxxxx Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxx, 00000.
33.Approximately 15.00 acres historically known as "Xxxxxxx Lots" and
situated in one parcel at 268 000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx,
00000.
34.Approximately 79.00 acres historically known as "Consolidated Lots" and
situated in two parcels at 69 85 and 000X Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxx, 00000.
35.Approximately 9.79 acres historically known as "Airport Lot" and
situated in one parcel at 00 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
36.Approximately 2.80 acres historically known as "Asparagus Lot" and
situated in one parcel at 000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
37.Approximately 271.35 acres historically known as "Asparagus Lot" and
situated in one parcel at X-0 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
38.Approximately 45.80 acres historically known as "Bed Lot" and situated
in one parcel at 00 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
39.Approximately 195.92 acres historically known as "Hall Ketchen Lot"
and situated in one parcel at Xxxxxxx Xxxx xxx Xxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx, 00000.
40.Approximately 101.50 acres historically known as "Hall Ketchen Lot"
and situated in three parcels at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, 00000.
41.Approximately 60.40 acres historically known as "Hoskins Lot" and
situated in two parcels at 45 & 00 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx,
00000.
42.Approximately 47.20 acres historically known as "Moses Lot" and situated
in two parcels at 000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
43.Approximately 14.25 acres historically known as "Railroad Lots" and
situated in two parcels at 56 & 00 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx,
00000.
SCHEDULE 1.01(c)(continued)
44.Approximately 109.84 acres historically known as "Xxxxxxxxxx Lot" and
situated in four parcels at Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
45.Approximately 103.00 acres historically known as "Rye Street" and
situated in two parcels at 000 Xxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxx,
00000.
46.Approximately 53.98 acres situated in one parcel located at Xxxxxx Xxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
47.Approximately 78.20 acres situated in two parcels located at Xxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
48.Approximately 176.55 acres situated in three parcels located at 3683 and
0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
49.Approximately 44.30 acres situated in one parcel located at Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
50.Approximately 258.00 acres situated in two parcels located at 911 and
0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
51.Approximately 159.84 acres situated in six parcels located at 380, 490,
872, 890, 957 and 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
52.Approximately 130.09 acres situated in five parcels located at 1, 21,
25T, 29 and 00 Xxxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
53.Approximately 14.54 acres situated in one parcel located at 0 Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
54.Approximately 30.07 acres situated in one parcel located at 00 Xxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
55.Approximately 1.82 acres situated in two parcels located at 1995 and
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
56.Approximately 10.07 acres situated in three parcels located at 20, 30
and 00 Xxxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
57.Approximately 286.07 acres situated in six parcels located at 1T, 2T,
3T, 4T, 998T and 000X Xxxxxxxxxxxxx Xxxxx (Xxxx), Xxxxxxx, Xxxxxxxxxxx,
00000.
58.Approximately 0.63 acres situated in one parcel located at 000 Xxxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
SCHEDULE 1.01(c)(continued)
59.Approximately 20.14 acres situated in three parcels located at 660, 691
and 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
60.Approximately 38.43 acres situated in three parcels located at 2600,
2619 and 0000 Xxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
61.Approximately 169.20 acres situated in one parcel located at 000 Xxx
Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
62.Approximately 29.70 acres situated in one parcel located at 000 Xxxxxxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
63.Approximately 75.60 acres situated in two parcels located at 701 and 000
Xxxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
64.Approximately 249.54 acres historically known as "Xxxxxx Farm" and
situated in two parcels located at 56 & 00 Xxxxx Xxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx, 00000.
65.Approximately 76.66 acres historically known as "Xxxxxx/Xxxxx Farm" and
situated in three parcels located at 66R, 66 & 00 Xxxxxxx Xxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx, 00000.
66.Approximately 99.00 acres historically known as "Moriarti Farm" and
situated in one parcel located at 000 Xxxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx, 00000.
67.Approximately 1.28 acres situated in one parcels located at Point Grove
Road and Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, 00000.
SCHEDULE 1.01(d)
Nursery Real Estate
68.Approximately ______ acres situated in ___ parcels located at 000 Xxxxxx
Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000, as such parcels are more
specifically described by metes and bounds in a warranty deed dated as of
_____________, to "General Cigar Co., Inc.," the predecessor of Culbro
Corporation covering the same.
69.Approximately 1212.1 acres situated in six parcels located at Federal
and Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx 00000, as such parcels are more
specifically described by metes and bounds in a warranty deed dated as of
June 4, 1968, to "General Cigar Co., Inc.," the predecessor of Culbro
Corporation covering the same.
70.Approximately 152.8 acres situated in one parcel located at Federal and
Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx 00000, as such parcel is more specifically
described by metes and bounds in a corrective warranty deed dated as of
June 14, 1977, to "Culbro Corporation" covering the same.
71.Approximately 152.8 acres situated in one parcel located at Federal and
Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx 00000, as such parcel is more specifically
described by metes and bounds in a warranty deed dated as of June 7, 1977,
to "Culbro Corporation" covering the same.
72.Approximately 24.183 acres situated in one parcel located at 0000
Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx, 00000, as such parcel is
more specifically described by metes and bounds in a warranty deed dated as
of January 5, 1988, to "Culbro Corporation" covering the same.
73.Approximately 16.55 acres situated in one parcel located at 0000 Xxxxxxx
Xxxx, Xxxxx, Xxxxxxxxxxxx, 00000, as such parcel is more specifically
described by metes and bounds in a warranty deed dated as of December 6,
1982, to "Culbro Corporation" covering the same.
74.Approximately _______ acres situated in one parcel located at 000 Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx, 00000, as such parcel is more specifically
described by metes and bounds in a warranty deed dated as of
________________ to "Culbro Corporation" covering the same.
75.Approximately 15.0996 acres situated in one parcel located at 0000
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000, and appurtenant easement, as such
parcel and easement are more specifically identified by plat described in a
warranty deed dated as of September 12, 1985, to "Imperial Nurseries, a
Division of Culbro Corporation" covering the same.
76.Approximately 6.42346 acres situated in one parcel located at 0000
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000, as such parcel is more specifically
described by metes and bounds in a warranty deed dated as of May 16, 1990,
to "Imperial Nurseries, a division of Culbro Corporation" covering the
same.
77.Approximately 2.700 acres situated in one parcel located at 0000 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxx, as such parcel is more specifically described by
metes and bounds in a warranty deed dated as of April 20, 1987, to
"Imperial Nurseries, Division of Culbro Corporation" covering the same.
SCHEDULE 1.01(d) (continued)
78.Approximately 10.728 acres situated in one parcel located at 00000
Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx, 00000, as such parcel is more
specifically described by metes and bounds in a warranty deed dated as of
December 28, 1987, to "Culbro Corporation" covering the same.
79.Approximately 19.788 acres situated in one parcel located at 0000
Xxxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxx 00000, as such parcel is more
specifically described by metes and bounds in a warranty deed dated as of
July 15, 1986, to "Culbro Corporation" covering the same.
SCHEDULE 1.01(e)
Tobacco Real Estate
80.Approximately 449.30 acres historically known as "Indianhead Farm" and
situated in three parcels located at Xxx #00, Xxxxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxxxxxxxx, 00000.
81.Approximately 202.95 acres historically known as "Xxxxx Farm" and
situated in two parcels located at 00 Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx,
00000 and 00 Xxxxx Xxxx, Xxxxxxxxx, Connecticut, 06029.(1)
82.Approximately 204.80 acres historically known as "Southwick Farm" and
situated in three parcels located at 642 Xxxxx Road, Suffield, Connecticut,
06078.(2)
-----------------------
(1) CLR owns approximately 1.3 acres situated in a single parcel located
at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx, 00000, which is adjacent
to the Xxxxx Farm properties described in item 2 above. CLR will
transfer this parcel to General Cigar independently of the Asset
Transfers.
(2) For the avoidance of doubt, the approximately 254.51 acres
historically known as "Southwick Farm" and situated in two parcels
located at 00 Xxxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, 00000,
and 000X Xxxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, 00000, which
together comprise part of the Southwick Farm referred to in item 3
above, were owned directly by General Cigar prior to the Asset
Transfers.
SCHEDULE 1.01(f)
Shared Policies
83.Liberty Mutual General Liability Account: 00 42 32
Sub Account: 2096
Policy No.: RG2-621-004232-116
Office: New York City (202)
Contact: Xxxxx (8844)
84.Liberty Mutual Automobile Liability Account: 00 42 32
Sub Account: 2096
Policy No.: AS2-621-004232-196
Office: New York City (202)
Contact: Xxxxx (8844)
85.Liberty Mutual Workers' Compensation Account: 00 42 32
Sub Account: 2096
Policy Nos.: WA2-62D-004232-186
WC2-621-004232-026
Office: New York City (202)
Contact: Xxxxx (8844)
86.Liberty Mutual Workers' Compensation Account: 00 42 32
Excess Indemnity Sub Account: 2096
Policy No.: EH2-621-004232-216
Office: New York City (202)
Contact: Xxxxx (8844)
87.Arkwright Mutual Property Damage/ Policy No.: 230552
Business Interruption Contact: Xxxxxx
88.Xxxxxxxxx Mutual Fidelity & Crime Policy No.: 230552
Contact: Xxxxxx
89.AIU Insurance Commercial Umbrella Policy No.: BE 000-00-00
Broker: Xxxxxxx & Xxxxxxx
SCHEDULE 2.08
Conveyancing and Assumption Instruments
90.Stock Power by Culbro to Holdings for General Cigar, 387 PAS, Club
Macanudo and Club Macanudo (Chicago), and appropriate stock certificates
registered in the name of Holdings, as available.
91.Stock Power by Culbro to General Cigar for Xxxxxxxxx Y Cia, Ltd.,
Xxxxxxxxx Free Zone, Ltd., Gradiaz Xxxxx of Jamaica, Ltd., Gradiaz Xxxxx &
Co., Inc., Culbro Tobacco Sales Corporation, Industrial Buildings &
Properties Inc., Culbro X.X. Xxxxxxx, X.X., Xxxx Xxxxxxxxx & Xx., Xxxxxxxx
Xxxxx Company, Inc., Partagas Cigar Company, Inc., Culbro International U.K.
Ltd., Culbro International, S.A., Xxxx Tool & Plastics Corp. and Helmetta
Realty Corp., and appropriate stock certificates registered in the name of
General Cigar, as available.
92.Stock Power by Culbro to CLR for Imperial, Xxx Xxxx, the Centaur Interest
and General Xxxx Receivables Corp., and appropriate stock certificates
registered in the name of CLR, as available.
93.Assignment by Culbro to Holdings of the 387 PAS Minority Interest;
94.Quit-claim deed by Culbro to CLR or any CLR Subsidiary covering all
Commercial Real Estate.
95.Quit-claim deed by Culbro to Imperial covering all Nursery Real Estate.
96.Quit-claim deed by Culbro to General Cigar covering all Tobacco Real
Estate.
97.Quit-claim deed by CLR to General Cigar for certain real property
described in Note (1) on Schedule 1.01(e).
98.Omnibus xxxx of sale by Culbro to General Cigar covering all Holdings
Personal Property.
99.FAA Civil Aviation Registry AC Form 8050-1, Aircraft Registration
Application and accompanying FAA Xxxx of Sale to effect transfer of title in
the Airplane and registration of GCH Transportation, Inc. as owner of the
Airplane with the FAA Registry.
100.UCC-1 Financing Statements to be filed in New York and New Jersey with
respect to GECC's security interest in the Airplane after transfer to GCH
Transportation, Inc.
101.Assignment of the Xxx Xxxx Notes by Culbro to CLR.
102.Assignment of mortgage and promissory note of Xxx Xxxx, as mortgagor, in
favor of Culbro, as mortgagee, by Culbro to CLR, as mortgagee.
103.Assignment of escrow account by Culbro to Holdings with respect to that
certain Environmental Fund and Security Agreement, dated as of November 14,
1990, among Xxxxx & Xxxxxxxxxx Tobacco Corporation, Culbro, General Cigar and
The Chase Manhattan Bank, as successor to Manufacturers Hanover Trust
Company.
SCHEDULE 2.08 (continued)
104.Assignment of lease between 387 PAS Corp. (lessor) and Culbro (lessee),
dated as of October 20, 1983, in favor of Holdings as lessee.
105.Assignment of lease between Atlantic Aviation Corporation (lessor) and
Culbro (lessee), dated as of July 1, 1996, in favor of GCH Transportation,
Inc., as lessee.
106.Assumption of mortgage and promissory note by GCH Transportation, Inc.,
as mortgagor, and release of Culbro as mortgagor, with respect to that
certain aircraft chattel mortgage, dated as of December 30, 1993, between
Culbro and GECC, as mortgagee, and the accompanying mortgage note.
107.Assumption of guarantee by Holdings in favor of Leonori Investment
Associates, as lessor, and release of Culbro as guarantor, with respect to
that certain lease, dated as of August 7, 1995, between Club Macanudo and
lessor.
108.Assumption of guarantee by Holdings in favor of Chicago Title and Trust
Company, as lessor, and release of Culbro as guarantor, with respect to that
certain lease, dated as of October 1, 1996, between Club Macanudo (Chicago)
and lessor.
109.Omnibus assumption of liabilities by CLR (including but not limited to
(i) accounts payable to vendors, (ii) amounts reported on a balance sheet as
accrued, reserved, or otherwise attributable to liabilities relating to
taxes, insurance, salaries, employee benefits and pensions, (iii) liabilities
relating to the capital stock of CLR, if any, and (iv) all miscellaneous
liabilities that appear on the CLR Balance Sheet).
110.Omnibus assumption of liabilities by Holdings (including but not limited
to (i) accounts payable to vendors, (ii) amounts reported on a balance sheet
as accrued, reserved, or otherwise attributable to liabilities relating to
taxes, insurance, salaries, employee benefits and pensions, (iii) liabilities
relating to the capital stock of Culbro or Holdings, if any, and (iv) all
miscellaneous liabilities that appear on the Culbro Balance Sheet).
111.Proof of Claim by CLR for Xxx Xxxx bankruptcy proceedings.
112.Change of name on account to effect transfer of cash on hand/bank
accounts to Holdings.
113.Entry of an account payable on the consolidated balance sheet of the
Culbro Group in favor of CLR in an amount equal to the CLR Initial Cash
Balance.
114.Change of name on Policies to name the CLR Group, as appropriate, as the
insured and as beneficiary under the CLR Policies.
115.Change of name on Policies to name both the CLR Group and Culbro Group,
as appropriate, as the insured and as beneficiaries under the Shared
Policies.
SCHEDULE 4.01
Required Consents
116.The consent of each of 387 PAS and The Chase Manhattan Bank ("Chase") is
required for the transfer of the headquarters lease at 387 PAS from Culbro
Corporation to Holdings. A lease between 387 PAS Corp. (lessor) and Culbro
(lessee) dated as of October 20, 1983, had an initial term of 10 years and
two 5-year renewal terms. Pursuant to Article 11 of the lease, the lease
cannot be assigned without the prior written consent of the lessor. Lessee
must submit to lessor a written request for lessor's consent, whereupon
lessor can either terminate the lease or consent to the assignment. If the
lessor consents, lessee will reimburse lessor for any costs incurred by
lessor in connection with the assignment. Lessee also will give lessor a
copy of the assignment within 10 days of its execution, and the assignee must
execute and deliver to lessor an agreement, in recordable form, whereby
assignee agrees unconditionally to be personally bound by the lease.
Notwithstanding assignment of the lease, the lessee (Culbro) will remain
joint and severally liable on the lease for rent. The lessor assigned the
lease to the Manufacturers Hanover Trust Company, the survivor of which is
Chase, which holds a mortgage on the property at 387 PAS. Pursuant to this
assignment, Chase has been assigned all of lessor's rights and power to
modify the lease or to waive or release the tenants under any lease from any
obligation on the leases. The assignment expires upon repayment of the
mortgage, which remains outstanding.
117.The consent of Chase is required for the transfer of the 387 PAS Minority
Interest. The mortgage between 387 PAS Enterprises and Chase described in
item 1 above, dated as of October 20, 1983, covers the building at 000 Xxxx
Xxxxxx Xxxxx. Pursuant to paragraph 9 of the mortgage, it is an event of
default if there is any change in the "identity of the partners in Mortgagor
or the controlling shareholders in any partner in Mortgagor unless consented
to in writing by the Mortgagee, which consent shall not be unreasonably
withheld or delayed." Because a partner in Mortgagor is being changed to
Holdings upon transfer of the 387 PAS Minority Interest, and because the
controlling shareholder of 387 PAS Corp. will become Holdings, Chase must
consent to avoid an event of default under the mortgage.
118.The consent of General Electric Capital Corporation ("GECC") is required
for the transfer of the airplane. Culbro owns an airplane that will be
transferred to GCH Transportation, Inc. as part of the Asset Transfers. GECC
is the mortgagee under a mortgage on the airplane.
119.The consent of Leonori Investment Associates is required for a change in
guarantor. Culbro is a guarantor of the lease for the property used by Club
Macanudo. Leonori Investment Associates must release Culbro as guarantor on
the lease in exchange for a guarantee by Holdings. To that end, (i) Culbro
must inform the landlord of the transfer of Club Macanudo to Holdings, (ii)
Holdings must execute a guarantee in substantially the same form as that
executed by Culbro and (iii) Culbro must obtain a written release from its
guarantee from Leonori Investment Associates.
120.The consent of Chicago Title and Trust Company is required for a change
in guarantor. Culbro is a guarantor of the lease for the property used by
Club Macanudo (Chicago). Chicago Title and Trust Company must release Culbro
as guarantor on the lease in exchange for a guarantee by Holdings. To that
end, (i) Culbro must inform the landlord of the transfer of Club Macanudo
(Chicago) to Holdings, (ii) Holdings must execute a guarantee in
substantially the same
form as that executed by Culbro and (iii) Culbro must obtain a written
release from its guarantee from Chicago Title and Trust Company.
121.For the avoidance of doubt, the consent of GECC IS NOT required for a
change in guarantor. Culbro is a guarantor of a certain capital lease, dated
as of December 23, 1988, between GECC and Xxxx Tool & Plastics Corp., a
subsidiary of Culbro ("Xxxx Tool"). Xxxx Tool subsequently sold its assets
to an unrelated third party which forwards payments to GECC through Xxxx
Tool. The capital lease expires in 2000, and it is not contemplated that
GECC will release Culbro as guarantor of the lease.