ASSET PURCHASE AGREEMENT
AMONG
XXXXXX INCORPORATED,
UNITED DISTILLERS GLENMORE, INC.,
SCHENLEY INDUSTRIES INC., MEDLEY DISTILLING COMPANY,
UNITED DISTILLERS MANUFACTURING, INC.,
AND
THE VIKING DISTILLERY, INC.
August 29, 1995
TABLE OF CONTENTS
Page
ARTICLE I
PURCHASE AND SALE OF ASSETS AND LICENSES
1.1. Purchase and Sale........................................................................... 1
1.2. Assets...................................................................................... 1
1.3. Excluded Assets............................................................................. 5
1.4. Licenses.................................................................................... 6
1.5. Assumption of Liabilities................................................................... 6
1.6. Excluded Liabilities........................................................................ 7
1.7. Purchase Price.............................................................................. 8
1.8. Closing Statement........................................................................... 9
1.9. Prorations.................................................................................. 12
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
2.1. Organization, Good Standing, and Power...................................................... 12
2.2. Authority................................................................................... 13
2.3. Compliance with Applicable Laws............................................................. 15
2.4. U.S. Trademarks............................................................................. 15
2.5. Foreign Trademarks.......................................................................... 16
2.6. Licensed Marks.............................................................................. 17
2.7. Other Intellectual Property................................................................. 19
2.8. Title to Certain Assets..................................................................... 20
2.9. Purchaser's Title to Assets................................................................. 20
2.10. Litigation.................................................................................. 21
2.11. Assigned Contracts.......................................................................... 21
2.12. Manufacturing Equipment..................................................................... 22
2.13. Title to Properties; Encumbrances........................................................... 23
2.14. Employees................................................................................... 25
2.15. Employee Benefits........................................................................... 26
2.16. Environmental and Safety Requirements....................................................... 28
2.17. Product Liability........................................................................... 29
2.18. Permits..................................................................................... 30
2.19. Conduct of Business......................................................................... 30
2.20. Rebate and Promotional Programs............................................................. 32
2.21. Salaries.................................................................................... 32
2.22. Shipments and Depletions.................................................................... 32
2.23. Product Profit and Loss Statements.......................................................... 33
2.24. Taxes....................................................................................... 33
2.25. Distributors................................................................................ 33
2.26. Suppliers and Customers..................................................................... 34
2.27. Accuracy of Information..................................................................... 34
2.28. Brokers..................................................................................... 34
2.29. No Implied Warranties....................................................................... 34
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1. Organization, Good Standing, and Power...................................................... 35
3.2. Authority................................................................................... 35
3.3. Litigation.................................................................................. 37
3.4. Funding..................................................................................... 37
3.5. Accuracy of Information..................................................................... 38
3.6. Brokers..................................................................................... 38
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
4.1. Accuracy of Representations and Compliance with Covenants and
Conditions.................................................................................. 38
4.2. Other Closing Documents..................................................................... 39
4.3. No Governmental Action...................................................................... 39
4.4. Xxxx-Xxxxx-Xxxxxx Waiting Period............................................................ 40
4.5. Required Consents Needed.................................................................... 40
4.6. Other Agreements............................................................................ 40
4.7. Licenses.................................................................................... 41
4.8. Governmental Filings........................................................................ 41
4.9. Title To Facilities......................................................................... 42
4.10. Financing................................................................................... 42
4.11. Damage or Destruction....................................................................... 42
4.12. No Material Adverse Change.................................................................. 42
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE SELLERS
5.1. Accuracy of Representations and Compliance with Covenants and
Conditions.................................................................................. 43
5.2. Other Closing Documents..................................................................... 44
5.3. No Governmental Action...................................................................... 44
5.4. Xxxx-Xxxxx-Xxxxxx Waiting Period............................................................ 44
5.5. Required Consents Needed.................................................................... 44
5.6. Other Agreements............................................................................ 44
5.7. Licenses.................................................................................... 45
5.8. Governmental Filings........................................................................ 45
ARTICLE VI
PRE- AND POST-CLOSING COVENANTS
6.1. Access to Information....................................................................... 45
6.2. Costs, Expenses, and Taxes.................................................................. 47
6.3. Bulk Sales.................................................................................. 47
6.4. Insurance................................................................................... 47
6.5. Bottles..................................................................................... 48
6.6. Operation in Ordinary Course................................................................ 48
6.7. Governmental Filings and Approvals.......................................................... 51
6.8. Additional Actions.......................................................................... 52
6.9. Distributors................................................................................ 53
6.10. Title Commitments and Surveys............................................................... 54
6.11. Employee Matters............................................................................ 54
6.12. Assistance In Collecting Certain Amounts.................................................... 60
6.13. Differentiation Between Products of the Sellers and the Purchaser........................... 61
6.14. Certain Financial Information............................................................... 61
6.15. Intangible Property......................................................................... 61
6.16. Rebate Programs............................................................................. 61
6.17. Use Up Rights............................................................................... 62
6.18. Required Consents........................................................................... 63
6.19. Name Change................................................................................. 63
6.20. Destroying Boiler House/Chimney Stack....................................................... 63
6.21. Customers and Suppliers..................................................................... 64
6.22. Other Agreements............................................................................ 64
ARTICLE VII
CLOSING
7.1. The Closing................................................................................. 64
7.2. Documents Delivered by the Sellers.......................................................... 65
7.3. Documents Delivered by Purchaser............................................................ 68
7.4. Delivery; Risk of Loss...................................................................... 69
ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification by the Sellers.............................................................. 70
8.2. Indemnification by the Purchaser............................................................ 73
8.3. Indemnification Procedure for Third Party Claims............................................ 74
8.4. Direct Claims............................................................................... 77
8.5. Failure to Give Timely Notice............................................................... 78
8.6. Reduction of Losses......................................................................... 78
8.7. Subrogation................................................................................. 79
8.8. Limitations on Indemnities.................................................................. 79
8.9. Survival of Representations, Warranties and Covenants; Time Limits
on Indemnification Obligations.............................................................. 81
8.10. Defense of Claims; Control of Proceedings................................................... 81
8.11. Fraud....................................................................................... 82
8.12. Knowledge Prior to Closing.................................................................. 82
8.13. Exclusivity................................................................................. 82
8.14. Environmental Matters....................................................................... 82
8.15. Contribution................................................................................ 85
ARTICLE IX
TERMINATION
9.1. Termination................................................................................. 86
9.2. Effect of Termination....................................................................... 87
ARTICLE X
DEFINITIONS
10.1. Defined Terms............................................................................... 87
ARTICLE XI
GENERAL PROVISIONS
11.1. Notices.....................................................................................107
11.2. Counterparts................................................................................108
11.3. Entire Agreement; No Third Party Beneficiaries..............................................108
11.4. Governing Law...............................................................................108
11.5. Publicity; Confidentiality..................................................................109
11.6. Assignment..................................................................................109
11.7. Section Headings............................................................................109
11.8. Partial Invalidity..........................................................................110
11.9. Waiver and Amendment........................................................................110
11.10. Jurisdiction, Venue, and Service of Process.................................................110
11.11. No Set-Off..................................................................................110
ASSET PURCHASE AGREEMENT dated as of August 29, 1995, among Xxxxxx
Incorporated, a Delaware corporation (the "Purchaser"), United Distillers
Glenmore, Inc., a Delaware corporation ("UDG"), and each of the entities listed
on Schedule I (UDG and such entities are collectively referred to as the
"Sellers" and individually, each a "Seller").
WHEREAS, the Sellers wish to sell to the Purchaser, and the Purchaser
wishes to purchase, certain assets, upon the terms and subject to the conditions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND LICENSES
SECTION 1.1. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date and at the Closing the Sellers
will sell, assign, transfer, convey, and deliver (in such manner as is
customary) to the Purchaser, and the Purchaser will purchase from the Sellers,
the Assets.
SECTION 1.2. Assets. Subject to Section 1.3, the term "Assets" means: (a)
all of the Sellers' rights, titles, and interests in the United States in and to
(i) the trademarks listed in Schedule 1.2(a)-1 and Schedule 1.2(a)-2, (ii) the
United States trademark registrations and trademark applications therefor, and
(iii) the other brand names listed in Schedule 1.2(a)-1 and Schedule 1.2(a)-2
(collectively, the "U.S. Trademarks"), in each case together with the goodwill
of the business symbolized thereby;
(b) all of the Sellers' rights, titles, and interests outside
of the United States, if any, in and to (i) the trademarks listed in
Schedule 1.2(a)-1, (ii) the foreign trademark registrations and
trademark applications therefor listed in Schedule 1.2(b), and (iii)
the other brand names listed in Schedule 1.2(a)-1 (collectively, the
"Foreign Trademarks"), in each case together with the goodwill of the
business symbolized thereby;
(c) all of the Sellers' rights under the Contracts listed on
Schedule 1.2(c)-1 (the "Chi-Chi's/Xxxxxxxxxxx'x Licenses"), including
without limitation all of the Sellers' rights under the
Chi-Chi's/Xxxxxxxxxxx'x Licenses with respect to (i) the trademarks
listed in Schedule 1.2(c)-2, (ii) the United States and foreign
trademark registrations and trademark applications therefor, and (iii)
the other brand names listed in Schedule 1.2(c)-2 (collectively, the
"Chi-Chi's/Xxxxxxxxxxx'x Trademarks"), together in each case with the
goodwill of the business symbolized thereby;
(d) all of the Sellers' formulae, recipes, and blending
instructions currently used in the production of the Products or
necessary to enable the Purchaser to produce such Products (the
"Formulae") (subject to the Sellers' continued rights to use the
Formulae for Light Rum and Dark Rum which have heretofore been used by
the Sellers in the production of products other than the Products);
(e) all of UDG's rights, title, and interest in and to the
Mr. Boston Copyright;
(f) all of the Sellers' rights, titles, and interests in and
to the real property, including the improvements thereon and fixtures
thereto, and tanks and related piping, in Owensboro, Kentucky and
Albany, Georgia, as more fully described in the legal
descriptions and plats of survey included on Schedule 1.2(f) (including
the improvements located on property leased under the Assigned
Contracts, the "Plants");
(g) the machinery, equipment, furnishings, change parts, and
other tangible property owned by the Sellers and listed on Schedule
1.2(g), wherever located, subject to such changes from such list
between the date hereof and the Closing Date as occur in the ordinary
course of business, and all other such assets located at the Plants and
all other tooling, repair parts, and similar equipment located at the
Plants (other than any such assets which are leased under the Assigned
Contracts) (the "Manufacturing Equipment");
(h) the inventories of finished goods of the Sellers related
to the Products and, to the extent owned by the Sellers or their
Affiliates, to the Heaven Hill Products as in existence at the Closing,
wherever located (the "Finished Goods Inventory");
(i) the inventories of raw materials (including barreled bulk
whiskey at the Plant in Albany, Georgia), labels, dry supplies, stores,
and work-in-progress (including tank inventories at the Plants) of the
Sellers related to the Products or the operation of the Plants
(including any such inventories of a type which are used in connection
with both Products and products to be produced by the Purchaser or a
Purchaser Subsidiary pursuant to the Bottling Agreement) and, to the
extent owned by the Sellers or their Affiliates, to the Heaven Hill
Products as in existence at the Closing, wherever located (the
"Materials Inventory");
(j) the types of advertising, promotional, and point of sale
materials of the Sellers (including, but not limited to, all drawings,
plans, artwork, slides, transparencies,
screen proofs, printing plates, and lithographs) listed on Schedule
1.2(j) and at the locations listed on Schedule 1.2(j), in the
quantities existing at the Closing, and all copies of the Mr. Boston
Official Bartender's and Party Guide owned by the Sellers at Closing
(collectively, the "Literature");
(k) all of the Sellers' rights, titles, and interests in any
copyrights, trade dress, label designs, bottle designs, and other
designs, trade secrets, inventions, models, manufacturing know-how, and
any other similar intellectual property rights relating solely to the
Products, in each case which are not otherwise conveyed or licensed to
the Purchaser hereunder, together with the goodwill of the business
symbolized thereby (the "Intellectual Property");
(l) all of the Sellers' rights, titles, and interests in any
label and formula approvals and price postings relating solely to the
Products (in each case, to the extent the Sellers have, and under Law
have the right to assign or sell, such rights, titles, and interests),
together with the goodwill of the business symbolized thereby;
(m) all rights of the Sellers under the Assigned Contracts,
including and without limitation the Assigned Contracts listed on
Schedule 1.2(m) (and including and without limitation Orders for dry
supplies);
(n) all of the Sellers' rights, titles, and interests, if any,
in the trade names listed on Schedule 1.2(n), along with the goodwill
of the business associated therewith (the "Trade Names");
(o) all prepaid expenses (including unamortized license
fees) related to the foregoing and listed on Schedule 1.2(o) (the
"Prepaid Expenses");
(p) all records relating solely to the Products or the
operation of the Plants of the types set forth on Schedule 1.2(p) (the
"Records"); and
(q) all of the Sellers' rights, if any, with respect to the
glass molds listed on Schedule 1.2(q) (the "Transferred Molds").
SECTION 1.3. Excluded Assets. Notwithstanding anything to the contrary
contained herein, the Assets shall not include any of the following
(collectively, the "Excluded Assets"): (a) any real property or interests
therein owned or leased by the Sellers other than the Plants; (b) any rights
outside the United States in the trademarks and brand names listed on Schedule
1.2(a)-2 or any non-United States trademark registrations or applications
related thereto; (c) any interest in brand names, trademarks, or trade names
owned or licensed by any of the Sellers other than the Trademarks, the
Chi-Chi's/Xxxxxxxxxxx'x Trademarks, and the Trade Names; (d) any cash, reserves,
bank balances, or other cash equivalents or similar investments of the Sellers;
(e) any accounts receivable of the Sellers; (f) any rights of the Sellers under
any Contract that is not an Assigned Contract; (g) any equipment or other assets
listed on Schedule 1.3(g), any other repair parts, tooling, stores, or similar
assets used solely in the business of Clarendon, the formulae for the products
produced by Clarendon, or any other intellectual property used solely in the
business of Clarendon, (h) any rights of the Sellers with respect to the
intellectual property subject to the Container Licenses, (i) any rights of the
Sellers in any glass molds other than the Transferred Molds and the rights to
use certain other molds as set forth in Section 6.5, (j) any rights with respect
to any tax refunds for periods ending on or before the Closing Date, (k) any
computer hardware or software other than as listed on Schedule 1.2(g) or
Schedule 1.2(m), or (l) any assets described on Schedule 1.3(l).
SECTION 1.4. Licenses. (a) In addition to the transfer of the Assets,
at the Closing UDG will execute and deliver to the Purchaser licenses, in all
substantive respects in the forms attached hereto as Exhibit 1.4(a), with
respect to rights in certain container patents and designs (the "Container
Licenses").
(b) In addition to payment of the Purchase Price and the assumption of
Assumed Liabilities, at the Closing the Purchaser will execute and deliver to
the Sellers a license, in all substantive respects in the form attached hereto
as Exhibit 1.4(b), with respect to the use of the "Schenley" Trademark for the
territories and product described in such license (the "Schenley License" and,
together with the Container Licenses, the "Licenses").
SECTION 1.5. Assumption of Liabilities. In partial consideration for
the transfer of the Assets and the grant of the Container Licenses, in addition
to payment of the Purchase Price as provided in Section 1.7 and Section 1.8, the
Purchaser will at the Closing assume only the following liabilities (the
"Assumed Liabilities"):
(a) all obligations for which the Purchaser is responsible
as provided in the first sentence of Section 1.9 or in Section 6.2
or Section 6.11;
(b) all of the obligations of the Sellers to be performed
under the Assigned Contracts after the Closing Date, exclusive of (i)
payments of money to be made by the Sellers after the Closing Date, the
obligation for which accrued on or prior to the Closing Date, (ii)
obligations of the Sellers to indemnify other parties to the Assigned
Contracts for acts or omissions of the Sellers or their Affiliates on
or prior to the Closing Date, and (iii) liabilities subject to
indemnification by the Sellers under Section 8.1(a);
(c) any liability arising from or relating to any (i) refusal
by the Purchaser to deal with any of the Distributors, (ii) termination
by the Purchaser after the Closing Date of any distributors who were,
or at or after the Closing became, distributors of products (including
the Products) sold by the Purchaser, (iii) withdrawal of Products from
any Distributor, or (iv) termination of or withdrawal of Products from
any Distributor deemed to have occurred as a result of the Sellers
having sold the Trademarks or assigned the Chi-Chi's/Xxxxxxxxxxx'x
Licenses to the Purchaser, provided that the Purchaser shall not assume
any liabilities under this Section 1.5(c) with respect to the
Distributor identified on Schedule 6.9(a) as excluded from this Section
1.5(c); and
(d) any liability for returns made by Distributors after the
Closing Date, except that the Sellers shall remain liable for, and the
Purchaser shall not assume liability for, any such returns of goods (i)
for which the Distributor gives notice within the 90 days commencing on
the Closing Date and are in accordance with the Sellers' policies
attached hereto as Schedule 1.5(d) or (ii) which were produced by the
Sellers prior to the Closing Date as part of a production run no part
of which is included in the Finished Goods Inventory at the Closing
Date (provided, that nothing in this Section 1.5(d) shall limit the
Sellers' obligations under Section 8.1(g)). SECTION 1.6. Excluded
Liabilities. The Assumed Liabilities shall not include, and the
Purchaser shall not, and as of the Closing will not, assume,
undertake, accept, or be bound by or in any way be liable or
responsible for, and the Sellers will be and remain liable for,
(a) any liabilities of the Sellers for
which the Sellers are responsible to indemnify the Purchaser
under Section 8.1(a) (without giving effect to the limitations imposed in
Sections 8.8 or 8.9); (b) any liabilities of the Sellers under Contracts other
than the Assigned Contracts; (c) any liabilities of the Sellers for indebtedness
for money borrowed or any guarantees thereof; (d) any Employee Plan; (e) all
obligations for which the Sellers are responsible as provided in the first
sentence of Section 1.9; or (f) any other liabilities of the Sellers not
expressly assumed herein (collectively, the "Excluded Liabilities").
SECTION 1.7. Purchase Price. (a) In consideration of the transfer to
the Purchaser of the Assets and the grant of the Container Licenses, the
Purchaser will pay to UDG for the benefit of the Sellers, in the manner provided
in this Section 1.7 and in Section 1.8, the sum (the "Purchase Price") of (i)
$144,312,522 (the "Estimated Purchase Price") and (ii) the Book Value
Adjustment.
(b) Set forth on Schedule 1.7(b) is the parties' calculation of the
Estimated Purchase Price. Not less than five business days prior to the Closing
Date, the Sellers shall deliver to the Purchaser an updated statement setting
forth the Sellers' good faith estimate of the Purchase Price (the "Closing
Amount"), including estimates of the Book Value Adjustment (the "Estimated Book
Value Adjustment") and of each of items (i)-(iii) in the definition of Book
Value Adjustment, together with reasonably detailed supporting documentation for
such estimate. At the Closing, the Purchaser shall pay to UDG, for the benefit
of the Sellers, the Closing Amount by wire transfer of immediately available
funds.
(c) The Purchase Price shall be allocated among the Assets and the
Container Licenses by each party consistently with the principles of Section
1060 of the Code and the regulations promulgated thereunder.
SECTION 1.8. Closing Statement. (a) Within 60 days after the Closing
Date, UDG shall deliver to the Purchaser a statement (the "Closing Statement")
setting forth the Closing Adjustment and the amounts of each of items (i)-(iii)
in the definition of Book Value Adjustment (the "Book Value Calculation"). The
Purchaser will provide to the Sellers and its representatives access at all
reasonable times to the Assets and any books and records related thereto for the
purposes of preparing the Closing Statement.
(b) The Purchaser may, by notice given to UDG within 60 days of receipt
of the Closing Statement, dispute the Closing Adjustment and Book Value
Calculation as set forth in the Closing Statement, including the reasons
therefor. If the Purchaser does not send such a notice, the Closing Statement
and the Closing Adjustment and Book Value Calculation as set forth therein shall
be final and binding. If the Purchaser should send such a notice, the Purchaser
and UDG shall seek in good faith to resolve any dispute. During such period of
time, UDG and the Sellers' Accountants shall use their commercially reasonable
efforts to cooperate with the Purchaser and the Purchaser's Accountants and
provide access to the work papers of the Sellers' Accountants relevant to the
Closing Statement.
(c)(i) If the Purchaser shall have disputed the Closing Statement and
the Purchaser and UDG shall not have reached written agreement as to the Closing
Adjustment and Book Value Calculation prior to the 90th calendar day after the
date of delivery of the Closing Statement, then either the Sellers or the
Purchaser may by notice to the other submit to the Unaffiliated Firm for
determination, in accordance with this Section 1.8(c), the amount of the Closing
Adjustment. Any such determination made by the Unaffiliated Firm shall be
conclusive and binding on all parties to this Agreement.
(ii) The "Unaffiliated Firm" shall be a "Big Six" accounting firm
(other than the Sellers' Accountants, the Purchaser's Accountants, or any other
such firm which, at the time of or within the three years prior to its
selection, shall have been regularly employed by or had any other material
business relationship with the Sellers, the Purchaser, or any of their
Affiliates) selected by lot. If no "Big Six" firm can or will accept such
engagement, the parties agree that the Unaffiliated Firm shall be selected by
agreement between the Sellers' Accountants and the Purchaser's Accountants.
(iii) Within 30 days after the giving of the notice under Section
1.8(c)(i) (or the selection of the Unaffiliated Firm, if later), the Purchaser
and the Sellers shall each propose a Closing Adjustment to the Unaffiliated
Firm, together with the reasons therefor, in writing.
(iv) The amount determined by the Unaffiliated Firm (acting as an
expert and not as an arbitrator) shall not be higher than the higher of the
proposed Closing Adjustment or lower than the lower of the proposed Closing
Adjustment. The Unaffiliated Firm shall render its decision within 30 days after
the last submission under Section 1.8(c)(iii). Notwithstanding the foregoing, if
the difference between the proposed Closing Adjustments shall be less than
$200,000, the Closing Adjustment shall be the average of the proposed Closing
Adjustments and the Unaffiliated Firm shall not render any decision.
(d) Promptly, but in any event not more than 15 days, after
determination of the Closing Adjustment, whether pursuant to the second sentence
of Section 1.8(b), by agreement of the parties, or by decision of the
Unaffiliated Firm, (A) if the Closing Adjustment is a negative amount, UDG shall
pay the absolute value of such amount to the Purchaser, and (B) if the Closing
Adjustment is a positive amount, the Purchaser shall pay such amount to UDG,
for the benefit of the Sellers, in either case together with simple interest on
the Closing Adjustment at the Prime Rate for the period from the Closing Date to
and through the date of payment. All payments made under this Section 1.8(d)
shall be made by wire transfer of immediately available funds.
(e) The fee of the Unaffiliated Firm for any determination under this
Section 1.8 shall be shared as follows: the Purchaser shall bear that portion of
such fee equal to the total fee multiplied by a fraction, the denominator of
which shall be the difference between the Closing Adjustment as initially
proposed to the Unaffiliated Firm by the Sellers and the Closing Adjustment as
initially proposed to the Unaffiliated Firm by the Purchaser, and the numerator
of which shall be the difference between the Closing Adjustment as determined by
the Unaffiliated Firm and the Closing Adjustment as initially proposed by the
Purchaser; and the Sellers shall bear the remainder of such fees.
(f) Nothing herein shall be construed to (i) authorize or permit the
Unaffiliated Firm to arbitrate or determine any question or matter whatever
under or in connection with this Agreement except the specific items in dispute
between the parties with respect to the amount of the Closing Adjustment to be
determined in accordance with the provisions of this Agreement or (ii) require
the Unaffiliated Firm to follow the rules of the American Arbitration
Association or any other body in making such determination.
(g) The accounting principles and procedures set forth in the
Accounting Methodology described on Schedule 1.8(g) have been and will be used
in calculating the Estimated Purchase Price, the Estimated Book Value
Adjustment, and the Book Value Adjustment.
SECTION 1.9. Prorations. With respect to the items listed on Schedule
1.9, for any period commencing before and ending after the Closing Date, the
Sellers and the Purchaser shall, except as may be otherwise provided herein,
make such arrangements as may be necessary such that the Sellers will bear such
obligations up to the Closing Date and the Purchaser will bear such obligations
thereafter. In addition, the parties will make such arrangements as may be
necessary so that UDG will receive the royalties under the Mr. Boston Contract
and other Contracts referred to on Schedule 1.9 for the period through the
Closing Date and the Purchaser will receive such royalties for the period after
the Closing Date. Prorations shall be made in the manner provided for each item
on Schedule 1.9 as is described on Schedule 1.9. The arrangements referred to in
this Section 1.9 will include a net payment from one party to the other as
described on Schedule 1.9 on the Closing Date and from time to time after the
Closing Date, if necessary.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, represent and warrant to, and agree
with, the Purchaser as follows:
SECTION 2.1. Organization, Good Standing, and Power. Each Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of its state of organization and has all requisite corporate power and
authority to conduct its business as it is now being conducted and to own or
hold under lease the Assets owned or held by it under
lease. All of the capital stock of each Seller (other than UDG) is owned,
directly or indirectly, by UDG.
SECTION 2.2. Authority. Each Seller and each Seller Affiliate has all
requisite corporate power and authority to execute and deliver whichever of this
Agreement, the Licenses, the Transfer Documents, and the Other Agreements to
which it is or will be a party, to consummate the transactions contemplated
hereby and thereby, and to perform its obligations hereunder and thereunder. The
execution, delivery, and performance of this Agreement, the Licenses, each Other
Agreement, and the Transfer Documents and the consummation of the transactions
contemplated hereby and thereby have been (or, in the case of the Sellers other
than UDG and the Seller Affiliates, prior to Closing will have been) duly
authorized by all necessary corporate action on the part of the Sellers and the
Seller Affiliates in accordance with applicable Law and their respective
certificates of incorporation and by-laws. This Agreement has been, and at the
Closing the Licenses, each Other Agreement, and each Transfer Document will be,
duly executed and delivered by the Sellers and each Seller Affiliate, each to
the extent it is a party thereto. This Agreement constitutes, and the Licenses,
each Other Agreement, and each Transfer Document when executed and delivered
will constitute, a valid and binding obligation of the Sellers or the Seller
Affiliate party thereto, as the case may be, enforceable against such Sellers or
Seller Affiliate in accordance with its terms, subject as to enforceability to
bankruptcy, reorganization, insolvency, moratorium, and other similar Laws and
general equitable principles from time to time in effect affecting the
enforceability of creditors' rights generally. Except for making the
Governmental Filings, and obtaining the other consents (if any) of Governmental
Entities, listed on Schedule 2.2 and for expiration of the waiting period
under the HSR Act, no consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any
Governmental Entity is required on the part of any of the Sellers or any Seller
Affiliate for the execution, delivery, or performance of this Agreement, the
Licenses, the Other Agreements, and the Transfer Documents by the Sellers and
the Seller Affiliates and the consummation of the transactions contemplated
hereby and thereby. Except for the Required Consents as listed on Schedule
1.2(m) and Schedule 2.2, and provided that the Purchaser meets (or the relevant
licensor waives) the Chi-Chi's Requirements as described on Schedule 1.2(c)-1,
no consent of any party to any Contract to which any of the Sellers or Seller
Affiliates, or to which any of the Sellers or Seller Affiliates or any of their
businesses, properties, or assets are subject, is required for the execution,
delivery, or performance by the Sellers and the Seller Affiliates of this
Agreement, the Licenses, the Other Agreements, and the Transfer Documents and
the consummation of the transactions contemplated hereby and thereby; the
execution, delivery, and performance of this Agreement, the Licenses, the Other
Agreements, and the Transfer Documents by the Sellers and the Seller Affiliates
will not (if the Required Consents are obtained prior to the Closing and the
Chi-Chi's Requirements are satisfied or waived) violate, result in the breach
of, or constitute a default under any of the Assigned Contracts or any other
Contract to which any of the Sellers is a party and which affects any of the
Assets, or violate or result in a breach of the certificate of incorporation or
by-laws of any of the Sellers or Seller Affiliates; and (if the waiting period
under the HSR Act has expired and all Governmental Filings and other consents of
Governmental Entities listed on Schedule 2.2 are obtained or made) the
execution, delivery, and performance of this Agreement, the Licenses, the Other
Agreements, and the Transfer
Documents by the Sellers and the Seller Affiliates will not violate, result in a
breach of, or conflict with any Law binding on any of the Sellers or Seller
Affiliates or to which any of the Assets are subject.
SECTION 2.3. Compliance with Applicable Laws. Except as set forth on
Schedule 2.3, (a) each of the Sellers has complied with all Laws pertaining to
the Business and no Seller has received any pending written or, to the Sellers'
Knowledge, oral notice of any alleged violation of or liability under any such
Laws and (b) without limiting the foregoing, each Seller has complied with all
applicable Laws relating to antitrust and trade regulations pertaining to the
Business; provided, that no representation is made in this Section 2.3 with
respect to Environmental and Safety Requirements or Laws relating to the
employment of labor. Any construction at the Plants since the effective date of
applicable provisions of the ADA has been performed in compliance with the
requirements of the ADA.
SECTION 2.4. U.S. Trademarks. Each U.S. Trademark identified with a
registration or application number on Schedule 1.2(a)-1 or Schedule 1.2(a)-2 is
owned by the Seller indicated on such schedule as owning such U.S. Trademark and
is registered or application for registration has been made, solely in the name
of such Seller (or in a prior name of such Seller), on the Principal or
Supplemental Register (as indicated on such schedule) of the United States
Patent and Trademark Office, under the registration or application numbers set
forth on such schedules; the status of each such application is set forth on
such schedules; each such registration indicated on such schedules as currently
in use is valid; except as set forth on such schedules, each such registration
is in full force and effect; and such Seller has authority to assign such U.S.
Trademarks and their associated goodwill and registrations or applications to
the Purchaser as contemplated by this Agreement. The Sellers have authority to
assign the Trade Names to the Purchaser as contemplated by this Agreement. The
U.S. Trademarks and the Trade Names are held by the Sellers free and clear of
all Liens except for the licenses included in the Assigned Contracts and
licenses granted to the Purchaser or its Affiliates. To the Knowledge of the
Sellers, no third party has acquired, or claims to have acquired, any right,
title, or interest in and to any U.S. Trademark or Trade Name on or in
connection with the Products by virtue of the registration or use of, or intent
to use, such U.S. Trademark or Trade Name on or in connection with the Products
in all or in any geographic areas of the United States, except for the licenses
included in the Assigned Contracts, licenses granted to the Purchaser or its
Affiliates, and the rights of third parties described on Schedule 2.4. None of
the Sellers is a party to any pending suit, dispute, or claim, nor has received
any pending written or, to the Sellers' Knowledge, oral notice of any threatened
suit, dispute, or claim, regarding the registration or use of, or intent to use,
the U.S. Trademarks or Trade Names. To the Knowledge of the Sellers, except as
set forth on Schedule 2.4, no trademark right of any third party will be
infringed by the use by the Purchaser in the United States of the U.S.
Trademarks or Trade Names which are in use in the United States as indicated on
Schedules 1.2(a)-1 and 1.2(a)-2, provided such use is not materially different
from the manner in which such U.S. Trademarks or Trade Names have been used by
the Sellers prior to the date of this Agreement.
SECTION 2.5. Foreign Trademarks. Each Foreign Trademark
identified with a registration or application number on Schedule 1.2(b) is owned
by the Seller indicated on Schedule 1.2(b) as owning such Foreign Trademark and
is registered or application for
registration has been made, solely in the name of such Seller (or in a prior
name of such Seller) under the registration or application numbers set forth on
Schedule 1.2(b), and such Seller has authority to assign such Foreign Trademarks
and their associated goodwill and registrations and applications to the
Purchaser as contemplated by this Agreement. To the Knowledge of the Sellers,
the Foreign Trademarks are held by the Sellers free and clear of all Liens,
except for the licenses included in the Assigned Contracts or granted pursuant
to the Terminated Foreign Distributor Agreements listed on Schedule 6.9(b). To
the Knowledge of the Sellers, without investigation, no third party has
acquired, or claims to have acquired, any right, title, or interest in and to
any Foreign Trademark or Trade Name on or in connection with the Products by
virtue of the registration or use of, or intent to use, such Foreign Trademark
or Trade Name on or in connection with the Products in all or in any geographic
areas outside of the United States in which such Foreign Trademark is registered
as shown on Schedule 1.2(b) or in which such Trade Name is used, except for the
licenses granted pursuant to such Terminated Foreign Distributor Agreements and
the rights of third parties described on Schedule 2.4. None of the Sellers is a
party to any pending suit, dispute, or claim, nor has received any pending
written notice of any threatened suit, dispute, or claim, regarding the
registration or use of, or intent to use, the Foreign Trademarks or Trade Names.
To the Knowledge of the Sellers without investigation, except as set forth on
Schedule 2.4, no trademark right of any third party will be infringed by the use
by the Purchaser of any Foreign Trademark in the geographic areas outside the
United States in which such Foreign Trademark has been used by the Sellers,
provided such use is not materially different from the manner in
which such Foreign Trademark has been used by the Sellers in such geographic
areas prior to the date of this Agreement.
SECTION 2.6. Licensed Marks. To the Knowledge of the Sellers (without
investigation, as to foreign registrations and Section 2.6(b)), (a) each
Chi-Chi's/Xxxxxxxxxxx'x Trademark identified with a registration number on
Schedule 1.2(c)-2 is owned by the respective Chi-Chi's/Xxxxxxxxxxx'x Licensor
and is registered, solely in the name of such Chi-Chi's/Xxxxxxxxxxx'x Licensor,
on the Principal or Supplemental Register of the United States Patent and
Trademark Office or on various foreign registries as set forth on such schedule
under the registration numbers set forth on Schedule 1.2(c)-2, each such United
States registration indicated on Schedule 1.2(c)-2 as currently in use is valid,
and each such United States registration is in full force and effect and (b) the
Chi-Chi's/Xxxxxxxxxxx'x Trademarks are held by the Chi-Chi's/Xxxxxxxxxxx'x
Licensors free and clear of all Liens except the Chi-Chi's/Xxxxxxxxxxx'x
Licenses. The Sellers have authority to assign the Chi-Chi's/Xxxxxxxxxxx'x
Licenses to the Purchaser as contemplated by this Agreement, provided the
Purchaser satisfies the Chi-Chi's Requirements or such requirements are waived.
The Sellers and, to the Knowledge of the Sellers without investigation, each
Chi-Chi's/Xxxxxxxxxxx'x Licensor, have complied in all material respects with
all Laws of the United States or any subdivision thereof applicable to or
affecting the Chi-Chi's/Xxxxxxxxxxx'x Trademarks and no Seller nor, to the
Knowledge of the Sellers without investigation, any Chi-Chi's/Xxxxxxxxxxx'x
Licensor has received any pending notice of any asserted violation of any such
Laws. To the Knowledge of the Sellers without investigation, except as may be
reflected in the Chi-Chi's/Xxxxxxxxxxx'x Licenses, no third party has acquired,
or claims to have
acquired, any right, title, or interest in or to any Chi-Chi's/Xxxxxxxxxxx'x
Trademark on or in connection with the Products by virtue of the registration or
use of, or intent to use, such Chi-Chi's/Xxxxxxxxxxx'x Trademark on or in
connection with the Products in all or in any geographic areas of the United
States or in all or in any geographic areas outside of the United States in
which such Chi-Chi's/Xxxxxxxxxxx'x Trademark is registered as shown on Schedule
1.2(c)-2. None of the Sellers nor, to the Knowledge of the Sellers without
investigation, any Chi-Chi's/Xxxxxxxxxxx'x Licensor is a party to any pending
suit, dispute, or claim, nor have any of the Sellers nor, to the Knowledge of
the Sellers without investigation, any Chi-Chi's/Xxxxxxxxxxx'x Licensor received
any pending written notice of any threatened suit, dispute, or claim, regarding
the registration and use of, or intent to use, any Chi-Chi's/Xxxxxxxxxxx'x
Trademark. No Seller, nor, to the Knowledge of the Sellers, any
Chi-Chi's/Xxxxxxxxxxx'x Licensor, is in breach or default under any
Chi-Chi's/Xxxxxxxxxxx'x License.
SECTION 2.7. Other Intellectual Property. There are no trademarks,
service marks, trade names, copyrights, patents, or other intellectual property
owned or licensed by the Sellers and used in the conduct of the Business, other
than (a) the Trademarks, the Chi-Chi's/Xxxxxxxxxxx'x Trademarks, the Trade
Names, and the intellectual property subject to the Container Licenses, (b) the
Mr. Boston Copyright and common law rights, if any, in the Formulae, the
Records, the Literature, and the Intellectual Property (the intellectual
property referred to in this Section 2.7(b) being the "Other Intellectual
Property"), and (c) customer lists and other intellectual property included in
the Excluded Assets. Except for the Mr. Boston Copyright and approvals or
registrations relating to the Formulae, none of the Other Intellectual
Property has been registered or filed with any Governmental Entity. The Other
Intellectual Property is owned by the Sellers free and clear of all Liens except
for the licenses included in the Assigned Contracts and licenses granted to the
Purchaser or its Affiliates. To the Knowledge of the Sellers, no third party has
acquired, or claims to have acquired, any right, title, or interest in and to
any Other Intellectual Property in connection with the Products by virtue of the
registration or use of, or intent to use, such Other Intellectual Property on or
in connection with the Products in all or in any geographic areas of the United
States, except for the licenses included in the Assigned Contracts, licenses
granted to the Purchaser or its Affiliates, and the rights of third-parties
described on Schedule 2.4. None of the Sellers is a party to any pending suit,
dispute, or claim, nor has received any pending written or, to the Sellers'
Knowledge, oral notice of any threatened suit, dispute, or claim, regarding the
use of, or intent to use, any Other Intellectual Property. To the Knowledge of
the Sellers, except as set forth on Schedule 2.4, no intellectual property right
of any third party will be infringed by the use by the Purchaser of the Other
Intellectual Property in the United States, provided such use is not materially
different from the manner in which such Other Intellectual Property has been
used by the Sellers.
SECTION 2.8. Title to Certain Assets. On the date of this Agreement (to
the extent in existence, with respect to Inventory) and on the Closing Date, the
Sellers own and will own, respectively, all right, title, and interest in and to
the Assets (other than the Trademarks, Trade Names, Other Intellectual Property,
Manufacturing Equipment, and Plants, as to which representations are made
elsewhere in this Agreement) free of Liens other than Permitted Encumbrances.
SECTION 2.9. Purchaser's Title to Assets. Upon consummation of the
transactions provided for in this Agreement in accordance with the terms hereof,
the Purchaser will be vested with good and (in the case of the Owned Property)
marketable title to all of the Assets (other than the Foreign Trademarks), free
and clear of all Liens other than Permitted Encumbrances. To the Knowledge of
the Sellers without investigation, upon consummation of the transactions
provided for in this Agreement in accordance with the terms hereof, the
Purchaser will be vested with good title to the Foreign Trademarks, free and
clear of all Liens other than Permitted Encumbrances and licenses granted
pursuant to the Terminated Foreign Distributor Agreements.
SECTION 2.10. Litigation. Except as set forth on Schedule 2.10, there
is no suit, action, litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending or, to the Knowledge
of the Sellers, threatened against any of the Sellers, or any of their officers,
directors, or employees with respect to the business of the Sellers, nor any
judgments, decrees, injunctions, or orders of any Governmental Entity against
any Seller or to which any Seller is otherwise a party, in each case which (a)
relates to the Assets (other than the Trademarks, Trade Names,
Chi-Chi's/Xxxxxxxxxxx'x Trademarks, Chi-Chi's/Xxxxxxxxxxx'x Licenses, or Other
Intellectual Property, and provided that no representation is made in this
Section 2.10 with respect to environmental, employee (including occupational
health and safety and employee benefits), or product liability matters, as to
which representations are made elsewhere in this Agreement) or (b) affects the
validity, binding nature, or enforceability of this Agreement, any License, any
Other Agreement, or any Transfer Document or otherwise affect the ability of the
Sellers to perform their obligations hereunder
or thereunder. Except as set forth in Schedule 2.10, no Seller is engaged in any
legal action to recover monies due it or for damages sustained by it which
relate to the Business.
SECTION 2.11. Assigned Contracts. The Sellers have delivered or made
available to the Purchaser true and complete copies (including all amendments,
modifications, or waivers) of all of the Assigned Contracts listed on Schedule
1.2(m). The Assigned Contracts listed on Schedule 1.2(m) and the Contracts
listed or described on Schedule 1.3(l) are all of the Material Contracts (other
than Orders). To the Knowledge of the Sellers, each of the Assigned Contracts
(other than Orders) is valid, binding, and in full force and effect. Each of the
Orders is or at Closing will be a valid and bona fide customer or purchase
order. Except as disclosed on Schedule 1.2(m), there is no default or event
which (with the giving of notice, lapse of time, or both) would constitute a
default by any Seller or, to the Knowledge of the Sellers, any other party under
any Assigned Contract (other than delays in performance which occur in the
ordinary course of business and which do not materially adversely affect any
party to any such Assigned Contract). No Seller has received written or, to the
Sellers' Knowledge, oral notice that any party to any Assigned Contract intends
to cancel, terminate, not renew, or exercise an option thereunder, whether in
connection with the transactions contemplated hereby or otherwise. Schedule 2.11
sets forth a true and complete list, as of a date or dates within three days of
the date of this Agreement as set forth thereon, of all Orders (as if such date
were the Closing Date) which have an unexpired term of one year or more or the
unsatisfied portion of which involves payments of $50,000 or more. Any copies of
such Orders furnished by the Sellers to the Purchaser are true, correct, and
complete copies thereof.
SECTION 2.12. Manufacturing Equipment. As of the Closing Date, the
Manufacturing Equipment and any items leased under the Assigned Contracts will
include all of the equipment, trade fixtures, trucks, forklifts, furnishings,
and other tangible personal property (other than data processing equipment used
by the Sellers or their Affiliates for or at locations other than the Plants and
other than the Excluded Assets) necessary to permit the operations at the Plants
to be conducted in substantially the same manner as such operations have
heretofore been conducted. The Manufacturing Equipment listed on Schedule 1.2(g)
is all of the Manufacturing Equipment (other than tooling, repair parts, stores,
and similar items not readily listable) in existence on the date hereof, except
for any such items which do not have a Book Value in excess of $1,000
individually or $50,000 in the aggregate. Except as set forth on Schedule 2.12,
the Manufacturing Equipment and the equipment leased under the Assigned
Contracts are in good operating condition (normal wear and tear excepted), and
fit for the purposes for which they are being used (excluding any Manufacturing
Equipment which has a Book Value of zero and is not in use or held for use). The
Sellers have good title to the Manufacturing Equipment, free and clear of any
Liens except Permitted Encumbrances. Except for equipment which is off-site for
repair, all of the Manufacturing Equipment and personal property leased under
the Assigned Contracts is located at the Plants.
SECTION 2.13. Title to Properties; Encumbrances. (a) The Sellers have
good and marketable fee simple title to the Owned Property, in each case free
and clear of all Liens except for Permitted Encumbrances.
(b) Except as reflected on Schedule 2.13(b) and except for the
Permitted Encumbrances:
(i) the Sellers have, and will transfer to the Purchaser at
Closing, all easements, real property licenses, and rights of way and
similar rights necessary to conduct business on the Owned Property;
(ii) no portion of any of the Owned Property is subject to any
pending condemnation proceeding or proceeding by any Governmental
Entity adverse to the Owned Property and, to the Sellers' Knowledge,
there is no threatened condemnation or proceeding with respect thereto;
(iii) the Plants, including, without limitation, the
buildings, improvements, structures, fixtures, heating, ventilation,
and air conditioning systems, roof, foundation, and floors, are in good
operating condition, normal wear and tear excepted, and are fit for the
purposes for which they are being used (except for the boiler
house/chimney stack referred to in Section 6.20);
(iv) the Sellers have not received any pending written or, to
the Sellers' Knowledge, oral notice that the Owned Property is in
violation of any covenants, restrictions, or documents of record;
(v) since the Statement Date, no written or, to the Sellers'
Knowledge, oral notice of any increase in the assessed valuation of the
Owned Property or of any contemplated special assessment has been
received by any Seller, nor, to the Sellers' Knowledge, has any special
assessment been threatened;
(vi) there are no leases, subleases, licenses, concessions,
or other agreements, written or, to the Knowledge of the Sellers,
oral, granting to any party or parties other
than the Sellers the right of use or occupancy of any portion of the
parcels of the Owned Property, except the Permitted Encumbrances;
(vii) there are no parties other than the Sellers in
possession of any portions of the parcels of the Owned Property;
(viii) all facilities located on any parcel of the Owned
Property are supplied with utilities and other services necessary for
the operation of such facilities in the manner in which they have been
operated immediately prior to the date of this Agreement, all of which
services are adequate to conduct that portion of the Business conducted
at each of such facilities in the manner in which they have been
operated immediately prior to the date of this Agreement;
(ix) no Seller is a party to any written or, to the Sellers'
Knowledge, oral agreements or undertakings with owners or users of
properties adjacent to any facility located on any parcel of Owned
Property relating to the use, operation, or maintenance of such
facility or any adjacent real property, except the Permitted
Encumbrances;
(x) all real estate taxes and assessments relating to the
Owned Property have been paid through December 31, 1994;
(xi) the Sellers have furnished the Purchaser with copies of
all unexpired and transferable improvement warranties relating to the
Plants; and
(xii) there are no pending or, to the Sellers' Knowledge,
threatened, requests, applications or proceedings to alter or restrict
the zoning or other use restrictions applicable to the Owned Property
and the Sellers do not have Knowledge of and have not received any
written notice from any Governmental Entity of any plans, studies, or
efforts by any Governmental Entity that would affect the present use
or zoning of any property or realign or relocate any adjacent street
or highway.
SECTION 2.14. Employees. Except as set forth on Schedule 2.14, on the
date of this on the Agreement there is not, and within the last three years
there has not been, (a) any pending or, to the Knowledge of the Sellers,
threatened strike, picketing, boycott, walkout, work stoppage or slowdown, or
other labor dispute, in each case at either of the Plants, or (b) any action,
litigation, arbitration, claim, allegation, grievance, charge, or complaint
against any Seller by any employee of the Sellers at the Plants, except workers'
compensation claims which did not involve, in any individual claim by a single
employee, payments exceeding $1,000. Except as set forth on Schedule 2.14, there
are no arbitration awards, court orders, orders of the National Labor Relations
Board, or private settlement agreements which in any way alter, amend, or
clarify any Collective Bargaining Agreement or which restrict or otherwise
affect the ability of the owner of a Plant to act with respect to the employees
covered by any Collective Bargaining Agreement in the future. Except as set
forth on Schedule 2.14, Schedule 2.15(c), or Schedule 2.16(a), the Sellers have
complied with all applicable Laws relating to the employment of labor at the
Plants, including provisions thereof relating to wages, hours, equal
opportunity, collective bargaining, and the payment of social security and other
taxes. No Seller is liable for any arrears of wages or any taxes or penalties
for failure to comply with any such Laws with respect to either Plant. To the
Sellers' Knowledge, no key employee listed as such on Schedule 2.14 has any
plans to terminate employment with any Seller at a Plant.
SECTION 2.15. Employee Benefits. (a) Except as set forth in Schedule
2.15(a), with respect to all Plant Employees, no Seller nor any Plan Affiliate
has within the past six years
participated in, made contributions to, or had any other liability (including
any potential liability) with respect to any Employee Plan which is a
"multiemployer plan" as defined in Section 4001 of ERISA, a "multiemployer plan"
within the meaning of Section 3(37) of ERISA, a "multiple employer plan" within
the meaning of Code Section 413(c) or a "multiple employer welfare arrangement"
within the meaning of Section 3(40) of ERISA which could result in the
Purchaser's, such Seller's, or any Plan Affiliate of the Purchaser or any Seller
having any current or future obligation to contribute to, or any other liability
(including any potential liability) with respect to, any such plan, and no
Seller, the Purchaser, nor any Plan Affiliate of any Seller or the Purchaser has
incurred (or could incur) any current or potential withdrawal liability as a
result of a complete or partial withdrawal (or potential partial withdrawal)
from any such plan.
(b) Except as set forth in Schedule 2.15(b), no Seller nor any Plan
Affiliate of any Seller has within the past six years maintained or contributed
to or obligated itself to make contributions to (or any other liability with
respect to) any funded or unfunded Employee Welfare Plan on behalf of or with
respect to any Plan Beneficiaries, whether or not terminated, which provides
medical, health, life insurance, or other welfare-type benefits for current or
future retirees or current or future former employees, their spouses or
dependents, or any other Persons (except for limited continued medical benefit
coverage for former employees, their spouses, and other dependents as required
to be provided under Section 4980B of the Code) which would give rise to any
Seller, the Purchaser, or any Plan Affiliate of any Seller or the Purchaser
having any obligation to maintain or contribute to (or having any other
liability or potential liability with respect to) any such plan as of the
Closing or at any time in the future.
(c) Except as set forth on Schedule 2.15(c), no Seller nor any Plan
Affiliate of any Seller has incurred any liability to the PBGC, the IRS, any
multiemployer plan, the Department of Labor, or otherwise with respect to any
Employee Plan currently or previously maintained by any Seller or any Plan
Affiliate of any Seller that has not been satisfied in full, and no condition
exists that presents a risk to any Seller, the Purchaser, or any Plan Affiliate
of any Seller or the Purchaser of incurring such a liability, other than
liability for premiums due the PBGC.
SECTION 2.16. Environmental and Safety Requirements. (a) Except as
disclosed in Schedule 2.16(a), (i) to the Knowledge of the Sellers, each Plant
is in compliance with all Environmental and Safety Requirements, except where
the failure to be in compliance, individually or in the aggregate, would result
in the payment of fines, penalties, and investigation, remediation, court, and
other similar costs of less than $25,000, and (ii) each Plant possesses all
Permits required by, and has filed in a timely manner all notices, applications,
reports, and disclosures required by, Environmental and Safety Requirements.
(b) Except as disclosed in Schedule 2.16(b): (i) to the Knowledge of
the Sellers, there are no Hazardous Materials present at, in, under, or upon any
Plant; (ii) there are no underground Hazardous Material storage tanks of any
kind located at the Plants; (iii) no Seller is subject to, or within the three
years preceding the date of this Agreement has received any written or, to the
Sellers' Knowledge, oral notice of, any private, administrative, or judicial
action relating to the presence or alleged presence of Hazardous Materials in,
under, or upon the Owned Property or relating to any other Person that has, at
any time, on behalf of the Sellers, disposed of or otherwise handled Hazardous
Materials generated by or the source of
which is any Plant; and (iv) there are no pending or, to the Knowledge of the
Sellers, threatened actions or proceedings (or written or, to the Knowledge of
the Sellers, oral notices of potential actions or proceedings) from any
Governmental Entity or any other entity regarding any matter described in
Section 2.16(b)(i).
(c) Schedule 2.16(c) sets forth, to the Knowledge of the Sellers, the
name and principal place of business of every off-site waste disposal
enterprise, and each of the haulers, transporters, or cartage enterprises,
utilized now or in the preceding ten years by each Seller or any of its
predecessors for the benefit of each Plant to treat, transport, store, recycle,
reclaim, or dispose of Hazardous Materials at any such off-site waste disposal
location.
(d) Except as set forth on Schedule 2.16(a), (b), (c), or (d), to the
Knowledge of the Sellers there are and have been no past or present events,
conditions, circumstances, activities, practices, incidents, or actions which
could reasonably be expected to interfere in a material respect with or prevent
continued compliance with any Environmental and Safety Requirements at either
Plant.
(e) The Sellers have furnished to the Purchaser copies of all
environmental audits, assessments, and reports, and have furnished or made
available to the Purchaser all sampling and testing results, relating to the
Plants which were prepared within the four years prior to the date of this
Agreement by or at the direction of the Sellers or are in the possession of the
Sellers or, to the Sellers' Knowledge, their accountants or counsel or, in the
case of audits, assessments, and reports only, consultants. To the Knowledge of
the Sellers, no environmental audits or assessments received by the Sellers from
any prior owner of any Seller or any of the Owned Property have been destroyed
or discarded.
(f) Nothing in this Section 2.16 shall limit the Sellers' obligations
under Section 8.1(d) or Section 8.14.
SECTION 2.17. Product Liability. Except as disclosed in Schedule 2.17,
there are no outstanding or to the Sellers' Knowledge threatened Product
Liability Claims and Liabilities, other than any Product Liability Claims and
Liabilities which, if adversely determined, would not be reasonably likely to
result in any individual case in liability in excess of $5,000. All of the
Products produced have been labeled in conformance with applicable Laws.
Schedule 2.17 lists all written warranties given by any Seller with respect to
the Products which are in effect. The Sellers' current insurance is adequate
(subject to deductibles and self-insured portions) to cover all pending or to
the Sellers' Knowledge threatened Product Liability Claims and Liabilities.
Schedule 2.17 lists the insurer for each current listed Product Liability Claim
and Liability covered by insurance or designates such Product Liability Claim
and Liability, or portion thereof, as uninsured and the applicable individual
and aggregate policy limits and deductibles. Schedule 2.17 sets forth all
completed Product Liability Claims and Liabilities to which any Seller was a
party during the three years preceding the date of this Agreement (other than
any Product Liability Claims and Liabilities which, if adversely determined,
would not have been reasonably likely to result in any individual case in
liability in excess of $5,000), the date such claim was made, and, for any claim
with respect to which more than $5,000 was paid, the nature of the resolution
thereof (including amounts paid in settlement or judgment).
SECTION 2.18. Permits. Schedule 2.18 is a true, correct, and complete
list as of the date of this Agreement of all Permits held by any Seller relating
to the Business or the Plants.
Each Seller possesses all rights under all Permits necessary to enable each
Seller to carry on the Business as presently conducted. All such Permits are
valid and in full force and effect. No Seller has received any pending written
or, to the Sellers' Knowledge, oral notice of any proceeding, action, or
investigation by any Governmental Entity to revoke or terminate any such Permit
prior to the normal expiration thereof or not to renew any such Permit on
customary terms.
SECTION 2.19. Conduct of Business. Since the Statement Date, each
Seller has conducted its portion of the Business only in the ordinary course
consistent with past custom and practices. Except as set forth on Schedule 2.19,
since the Statement Date there has not been any:
(a) event, nor has any condition arisen, which has resulted
in, or is reasonably likely to result in, a material adverse change in
the operating results, assets, or employee, customer or supplier
relations of the Business, provided that this Section 2.19(a) shall not
be deemed breached as a result of any supplier or customer having
informed the Sellers that it does not intend to do business with the
Purchaser following the Closing with respect to the Business;
(b) destruction or loss of any Manufacturing Equipment or
portion of any Plant necessary to the operation of the Business,
whether or not covered by insurance, having a replacement cost in
excess of $50,000;
(c) loan or advance pertaining to the Business by any Seller
to any party other than sales to customers on credit and employee
advances in the ordinary course of business consistent with past custom
and practices;
(d) cancellation, waiver, or release by any Seller of any
debts, rights, or claims pertaining to the Business, except in each
case in the ordinary course of business consistent with past custom and
practices;
(e) amendment or termination of any Assigned Contract to which
any Seller is a party, other than expiration of Contracts in accordance
with their terms and amendments listed on Schedule 1.2(m);
(f) adoption, amendment, or termination of any Employee
Plan, except as required by Law or the IRS; or
(g) increase in the benefits provided under any Employee
Plan
SECTION 2.20. Rebate and Promotional Programs. Schedule 2.20 lists all
Rebate Programs and Promotional Programs currently in effect or scheduled for
implementation during the remainder of calendar year 1995 or calendar year 1996.
SECTION 2.21. Salaries. Schedule 2.21 is a complete list as of the date
of this Agreement of the names and current compensation rates, titles/positions,
and dates of hire of all Union Employees and Non-Union Employees. Except as set
forth in Schedule 2.21 or as required pursuant to the Collective Bargaining
Agreements, since the Statement Date, (a) no Transferring Employee has received
any bonus or increase in compensation (other than increases of Union Employees
resulting from changes in position or grade), (b) there has been no "general
increase" in the compensation or rate of compensation payable to any
Transferring Employees, and (c) to the Sellers' Knowledge, there has not been
any promise made by the Sellers to any such employees of any bonus or increase
in compensation. The term "general increase" as used herein means any increase
generally applicable to a class or group of
employees that shall not include increases granted to individual employees for
merit, length of service, or change in position or responsibility made on the
basis of any Collective Bargaining Agreement or an established course of conduct
or policy of the pertinent Seller. There are no Contracts regarding employment
for any Transferring Employee other than the Collective Bargaining Agreements
and the employment Contract listed on Schedule 1.3(l).
SECTION 2.22. Shipments and Depletions. Schedule 2.22 is a true,
accurate, and complete listing of the Sellers' shipments, and the shipments of
the Sellers' customers in the United States (depletions) as reported to the
Sellers' by such customers, in each case in cases, by brand and state and for
the two twelve-month periods ended December 31, 1993 and 1994 and the period
from January 1, 1995 to June 30, 1995; provided, in the case of information for
the period from January 1, 1995 to June 30, 1995, that such information (a) may
not reflect all withdrawals from bailment in the final month of such period and
(b) includes estimates of depletions in each control state for the months
subsequent to the latest month for which reports have been received by the
Sellers from such state as of the date of this Agreement.
SECTION 2.23. Product Profit and Loss Statements. The Product profit
and loss statements attached hereto as Schedule 2.23 present fairly in all
material respects the information set forth therein for the periods indicated on
such statements, subject to the exceptions and qualifications indicated in the
notes to such statements. The Sellers' sales, cost of sales, and other expenses
set forth in such statements were not affected by any transaction between the
Sellers and, or payments made or costs incurred on behalf of the Sellers by,
other Affiliates or former Affiliates of the Sellers except for transactions,
payments, or costs incurred
which are described in the notes to such statements or otherwise are described
on Schedule 2.23.
SECTION 2.24. Taxes. The Sellers have filed all Tax Reports required to
be filed prior to the date of this Agreement. Each Tax Report filed by the
Sellers since January 1, 1992 was, when filed, true, complete, and accurate, and
the Sellers have paid all amounts due and owing with respect to such Tax
Reports. There are no pending or, to the Knowledge of the Sellers, threatened
actions or proceedings with respect to any duties or excise Taxes concerning the
Business.
SECTION 2.25. Distributors. Set forth on Schedule 2.25 is a true and
complete list of the Distributors.
SECTION 2.26. Suppliers and Customers. As of the date of this
Agreement, none of the suppliers or customers listed on Schedule 2.26 have
informed the Sellers, in writing or, to the Sellers' Knowledge, orally, that it
does not intend to do business with the Purchaser following the Closing with
respect to the Business, except as set forth on Schedule 2.26.
SECTION 2.27. Accuracy of Information. None of the representations and
warranties of the Sellers set forth in this Agreement (including the Schedules
hereto) or in any of the Transfer Documents or certificates to be delivered to
the Purchaser as contemplated by any provision hereof contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading. None of the material
information provided to the Purchaser by the Sellers as described in Section 6.1
has been designed intentionally to mislead the Purchaser in the negotiation of
the Purchase Price or this Agreement, any of the Licenses, or any of the Other
Agreements.
SECTION 2.28. Brokers. No Seller has incurred any liability to any
broker, finder, or agent and there are no claims against any Seller or any
Affiliate of any Seller for any brokerage fees, finder's fees, or commissions in
connection with the transactions contemplated by this Agreement.
SECTION 2.29. No Implied Warranties. THE PURCHASER ACKNOWLEDGES THAT,
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PURCHASER IS ACQUIRING THE
ASSETS WITHOUT ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO THE
FITNESS, MERCHANTABILITY, OR CONDITION OF THE ASSETS OR THE PRESENCE OR ABSENCE
OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to, and agrees with, the
Sellers as follows:
SECTION 3.1. Organization, Good Standing, and Power. The Purchaser is,
and each Purchaser Subsidiary is or at the Closing will be, a corporation duly
organized and validly existing under the laws of its state of organization and
has or will have all requisite corporate power and authority to conduct its
business as it is now being conducted and to execute and deliver whichever of
this Agreement, the Licenses, the Other Agreements, and the Purchaser Documents
to which it is or will be a party, to consummate the transactions contemplated
hereby and thereby, and to perform its obligations hereunder and thereunder. All
of the capital stock of each Purchaser Subsidiary is or will be owned, directly
or indirectly, by the Purchaser.
SECTION 3.2. Authority. The execution, delivery, and performance of
this Agreement, the Licenses, each Other Agreement, and the Purchaser Documents
and the consummation of the transactions contemplated hereby and thereby have
been (or, in the case of the Purchaser Subsidiaries, prior to Closing will have
been) duly authorized by all necessary corporate action on the part of the
Purchaser and the Purchaser Subsidiaries in accordance with applicable Law and
their respective certificates of incorporation and by-laws. This Agreement has
been, and at the Closing each License, each Other Agreement, and each Purchaser
Document will be, duly executed and delivered by the Purchaser and each
Purchaser Subsidiary, each to the extent it is a party thereto. This Agreement
constitutes, and each License, each Other Agreement, and each Purchaser Document
when executed and delivered will constitute, a valid and binding obligation of
the Purchaser or the Purchaser Subsidiary a party thereto, as the case may be,
enforceable against the Purchaser or such Purchaser Subsidiary in accordance
with its terms, subject as to enforceability to bankruptcy, reorganization,
insolvency, moratorium, and other similar Laws and general equitable principles
from time to time in effect affecting the enforceability of creditors' rights
generally. Except for making the Governmental Filings, and obtaining the
Approvals and other consents (if any) of Governmental Entities, listed on
Schedule 3.2 and for expiration of the waiting period under the HSR Act, no
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any Governmental Entity is required on the
part of the Purchaser or any Purchaser Subsidiary for the execution, delivery,
or performance of this
Agreement, the Licenses, the Other Agreements, and the Purchaser Documents by
the Purchaser and the Purchaser Subsidiaries and the consummation of the
transactions contemplated hereby and thereby. Except as set forth on Schedule
3.2, no consent of any party to any Contract to which the Purchaser or any
Purchaser Subsidiary, or to which the Purchaser or any Purchaser Subsidiary or
any of their businesses, properties, or assets are subject, is required for the
execution, delivery, or performance by the Purchaser and the Purchaser
Subsidiaries of this Agreement, the Licenses, the Other Agreements, and the
Purchaser Documents and the consummation of the transactions contemplated hereby
and thereby; the execution, delivery, and performance of this Agreement, the
Licenses, the Other Agreements, and the Purchaser Documents by the Purchaser and
the Purchaser Subsidiaries will not violate, result in the breach of, or
constitute a default under, any Contract to which the Purchaser or any Purchaser
Subsidiary is a party or by which the Purchaser or any Purchaser Subsidiary or
any of the Purchaser's or any Purchaser's Subsidiary's property is bound, or
violate or result in a breach of the articles of incorporation or by-laws of the
Purchaser or any Purchaser Subsidiary; and (if the waiting period under the HSR
Act has expired and all Governmental Filings, Approvals, and other consents of
Governmental Entities listed on Schedule 3.2 are obtained or made) the
execution, delivery, and performance of this Agreement, the Licenses, the Other
Agreements, and the Purchaser Documents by the Purchaser and the Purchaser
Subsidiaries will not violate, result in a breach of, or conflict with any Law
binding on the Purchaser or any Purchaser Subsidiary or to which the Purchaser
or any Purchaser Subsidiary or any of the Purchaser's or any Purchaser's
Subsidiary's business, properties, or assets are subject.
SECTION 3.3. Litigation. There is no suit, action, litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending or, to the Knowledge of the Purchaser, threatened with
respect to the Purchaser or any Purchaser Subsidiary or any of their officers,
directors, or employees with respect to their business or any of the Purchaser's
businesses, properties, or assets which may affect the validity, binding nature,
or enforceability of this Agreement, the Licenses, any Other Agreement, or any
Purchaser Document or otherwise affect the ability of the Purchaser and the
Purchaser Subsidiaries to perform their obligations hereunder or thereunder.
SECTION 3.4. Funding. The Purchaser has previously delivered to UDG a
true, correct, and complete copy of the Commitment Letter. The Commitment Letter
has been duly executed and delivered by the Purchaser or its Parent and the
Purchaser or its Parent has paid all fees and expenses required thereby or in
connection therewith. The Purchaser and its Parent, to the Knowledge of the
Purchaser, are capable of satisfying, and shall use their commercially
reasonable efforts to satisfy, all conditions to funding of the loan described
in the Commitment Letter which are within their sole control and the Purchaser
has no Knowledge that such loan will not be funded in connection with the
Closing. The Purchaser and its Parent will use their commercially reasonable
efforts to comply with all covenants and to satisfy all conditions to funding
which are in their sole control set forth in the Commitment Letter.
SECTION 3.5. Accuracy of Information. None of the representations and
warranties of the Purchaser set forth in this Agreement (including the Schedules
hereto) or in any of the Purchaser Documents or certificates to be delivered to
the Sellers as contemplated by any
provision hereof contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.
SECTION 3.6. Brokers. The Purchaser has not incurred any liability to
any broker, finder, or agent and there are no claims against the Purchaser or
any Affiliate of the Purchaser for any brokerage fees, finder's fees, or
commissions in connection with the transactions contemplated by this Agreement.
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser under this Agreement to consummate the
transactions contemplated hereby will be subject to the satisfaction at or prior
to the Closing Date of all of the following conditions, any one or more of which
may be waived at the option of the Purchaser:
SECTION 4.1. Accuracy of Representations and Compliance with Covenants
and Conditions. All representations and warranties of each Seller contained in
this Agreement shall be true and correct in all material respects when made and,
in addition, shall be true and correct in all material respects as of the
Closing as though such representations and warranties were then made in exactly
the same language by such Seller, except to the extent that the truth or
correctness of any of such representations or warranties is affected as a result
of the transactions contemplated hereby or by the Licenses or any of the Other
Agreements or any action by the Purchaser; and each Seller shall in all material
respects have performed and complied with all covenants and agreements and
satisfied all conditions required to be
performed and complied with by it at or before such time by this Agreement. For
purposes of this Section 4.1, breaches of representations, warranties,
covenants, and agreements shall be deemed "material" only if, in the aggregate,
the Losses which the Purchaser would be reasonably likely to suffer as a result
of or arising from such breaches exceed $500,000. Each Seller shall deliver at
the Closing Date a certificate certifying the fulfillment by it of the foregoing
conditions, as provided in Section 7.2.
SECTION 4.2. Other Closing Documents. The Sellers shall have delivered
or caused to be delivered to the Purchaser at or prior to the Closing the other
documents and instruments referred to in Section 7.2.
SECTION 4.3. No Governmental Action. No injunction, restraining order,
or other order or legal restraint or prohibition issued by any Governmental
Entity shall be in effect which would prevent the consummation of the
transactions contemplated by this Agreement or materially interfere with the
Purchaser's ability to own the Assets and operate the Business and no proceeding
brought by or before any Governmental Entity shall be pending, or threatened by
any Governmental Entity, which seeks any such injunction, order, restraint, or
prohibition.
SECTION 4.4. Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting
periods in respect of the transactions contemplated by this Agreement under the
HSR Act shall have expired or been terminated at or prior to the Closing.
SECTION 4.5. Required Consents Needed. All Material Required Consents
shall have been duly given or obtained.
SECTION 4.6. Other Agreements. Each of (a) the Xxxxxx Agreement between
the Purchaser or a Purchaser Subsidiary and UDG, in all substantive respects in
the form attached hereto as Exhibit 4.6(a) (the "Xxxxxx Agreement"), (b) the
Bottling Agreement between the Purchaser or a Purchaser Subsidiary and UDG, in
all substantive respects in the form attached hereto as Exhibit 4.6(b) (the
"Bottling Agreement"), (c) the Canadian Whisky Supply Agreement and the Canadian
New Fillings Agreement, each between the Purchaser or a Purchaser Subsidiary and
United Distillers Canada Inc., a Quebec corporation, in all substantive respects
in the forms attached hereto as Exhibit 4.6(c) (the "Canadian Whisky
Agreements"), (d) the Scotch Whisky Supply Agreement between the Purchaser or a
Purchaser Subsidiary and UDG, in all substantive respects in the form attached
hereto as Exhibit 4.6(d) (the "Scotch Whisky Agreement"), (e) the Barrel Storage
Agreement between the Purchaser or a Purchaser Subsidiary and UDG, in all
substantive respects in the form attached hereto as Exhibit 4.6(e) (the "Barrel
Agreement"), (f) the Clarendon Lease Agreement between the Purchaser or a
Purchaser Subsidiary and United Distillers Manufacturing, Inc., in all
substantive respects in the form attached hereto as Exhibit 4.6(f) (the
"Clarendon Lease"), (g) the Flavoring Supply Agreement between the Purchaser or
a Purchaser Subsidiary and UDG, in all substantive respects in the form attached
hereto as Exhibit 4.6(g) (the "Flavoring Supply Agreement"), (h) the California
Packaging Services Agreement between the Purchaser or a Purchaser Subsidiary and
UDG, in all substantive respects in the form attached hereto as Exhibit 4.6(h)
(the "California Agreement"), (i) the Medley Lease Agreement and the Medley
Barrel Storage Agreement, each between the Purchaser or a Purchaser Subsidiary
and Medley Distilling Company or UDG, respectively, in all substantive respects
in the forms attached hereto as
Exhibit 4.6(i) (the "Medley Agreements"), (j) the Services Agreements between
the Purchaser or a Purchaser Subsidiary and UDG, in all substantive respects in
the forms attached hereto as Exhibit 4.6(j) (the "Services Agreements"), (k) the
Guaranty of Guinness America, Inc., in all substantive respects in the form
attached hereto as Exhibit 4.6(k) (the "Guinness Guaranty"), (l) the Corn
Whiskey Agreement between the Purchaser or a Purchaser Subsidiary and UDG, in
all substantive respects in the form attached hereto as Exhibit 4.6(l) (the
"Corn Whiskey Agreement"), and (m) the Xxxxxx Guaranty shall have been duly
authorized, executed, and delivered by UDG or such Seller Affiliate, as the case
may be, at or prior to the Closing and at the Closing shall be in or come into
full force.
SECTION 4.7. Licenses. The Licenses shall have been duly authorized,
executed, and delivered by the appropriate Sellers at or prior to the Closing
and at the Closing shall be in or come into full force.
SECTION 4.8. Governmental Filings. The Sellers and the Purchaser shall
have made all Governmental Filings, and obtained all Approvals and other
consents of Governmental Entities, listed on Schedule 2.2 and Schedule 3.2
(excluding any not identified on such schedules as material).
SECTION 4.9. Title To Facilities. Subject to payment of applicable
premiums, the Purchaser shall have received a Title Policy for each parcel of
Owned Property pursuant to the Title Commitments, in the form and containing the
endorsements as set forth as Schedule T; any survey defect or encroachment or
violation of easements or building lines from or onto the Owned Property, other
than Permitted Encumbrances, shall have been cured or insured over pursuant to
an endorsement satisfactory to the Purchaser prior to the Closing; any Liens
which
are not Permitted Encumbrances shall have been deleted from the Title Policies;
and each such Title Policy shall be in an amount equal to the fair market value
of such Owned Property as reasonably specified by the Purchaser, insuring title
to such Owned Property to be in the Purchaser subject to the Permitted
Encumbrances.
SECTION 4.10. Financing. Chase or any other participating lenders shall
have funded the loan described in the Commitment Letter; provided, that the
Purchaser shall not be excused from performance of its obligations hereunder if
the failure to fund is due to any failure of the Purchaser or its Parent to
perform their obligations under Section 3.4.
SECTION 4.11. Damage or Destruction. From the date of this Agreement to
the Closing Date, there shall have been no material loss or destruction of any
Assets, nor any institution or threat of any material condemnation or other
proceedings to acquire or limit the use of any Assets, where "material," only
for purposes of this Section 4.11, shall mean a loss, casualty, or proceeding
which has resulted or is reasonably likely to result in a loss (regardless of
insurance) exceeding $500,000.
SECTION 4.12. No Material Adverse Change. From the date of this
Agreement to the Closing Date, no event shall have occurred which shall have
resulted in, or be reasonably likely to result in, a material adverse change in
the operating results or employee, customer, or supplier relations of the
Business, other than any such change described on or contemplated by Schedule
2.19 or which results from any supplier or customer having informed the Sellers
that it does not intend to do business with the Purchaser following the Closing
with respect to the Business.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers under this Agreement to consummate the
transactions contemplated hereby will be subject to the satisfaction at or prior
to the Closing Date of all of the following conditions, any one or more of which
may be waived at the option of the Sellers:
SECTION 5.1. Accuracy of Representations and Compliance with Covenants
and Conditions. All representations and warranties of the Purchaser contained in
this Agreement shall be true and correct in all material respects when made and,
in addition, shall be true and correct in all material respects as of the
Closing as though such representations and warranties were then made in exactly
the same language by the Purchaser; and the Purchaser shall in all material
respects have performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by it at or
before such time by this Agreement. For purposes of this Section 5.1, breaches
of representations, warranties, covenants, and agreements shall be deemed
"material" only if, in the aggregate, the Losses which the Sellers would be
reasonably likely to suffer as a result of or arising from such breaches exceed
$500,000. The Purchaser shall deliver at the Closing Date a certificate
certifying the fulfillment by it of the foregoing conditions, as provided in
Section 7.3.
SECTION 5.2. Other Closing Documents. The Purchaser shall have
delivered or caused to be delivered to the Sellers at or prior to the Closing
the other documents and instruments referred to in Section 7.3.
SECTION 5.3. No Governmental Action. No injunction, restraining order,
or other order or legal restraint or prohibition issued by any Governmental
Entity shall be in effect
which would prevent the consummation of the transactions contemplated by this
Agreement and no proceeding brought by or before any Governmental Entity shall
be pending, or threatened by any Governmental Entity, which seeks any such
injunction, order, restraint, or prohibition.
SECTION 5.4. Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting
periods in respect of the transactions contemplated by this Agreement under the
HSR Act shall have expired or been terminated at or prior to the Closing.
SECTION 5.5. Required Consents Needed. All Material Required Consents
shall have been duly given or obtained.
SECTION 5.6. Other Agreements. Each of (a) the Xxxxxx Agreement, (b)
the Bottling Agreement, (c) the Canadian Whisky Agreements, (d) the Scotch
Whisky Agreement, (e) the Barrel Agreement, (f) the Clarendon Lease, (g) the
Flavoring Supply Agreement, (h) the California Agreement, (i) the Medley
Agreements, (j) the Services Agreements, (k) the Corn Whiskey Agreement, (l) the
Guinness Guaranty, and (m) the Guaranty of the Purchaser, in all substantive
respects in the form attached hereto as Exhibit 5.6(m) (the "Xxxxxx Guaranty"),
shall have been duly authorized, executed, and delivered by the Purchaser or a
Purchaser Subsidiary, as the case may be, at or prior to the Closing and at the
Closing shall be in or come into full force.
SECTION 5.7. Licenses. The Licenses shall have been duly authorized,
executed, and delivered by the Purchaser or a Purchaser Subsidiary at or prior
to the Closing and at the Closing shall be in or come into full force.
SECTION 5.8. Governmental Filings. The Sellers and the Purchaser shall
have made all Governmental Filings, and obtained all Approvals and other
consents of Governmental Entities, listed on Schedule 2.2 and Schedule 3.2
(excluding any not identified on such schedules as material).
ARTICLE VI
PRE- AND POST-CLOSING COVENANTS
SECTION 6.1. Access to Information. (a) The Sellers have provided to
the Purchaser certain financial, sales, and other information which relates to
the Assets. Until the earlier of the Closing and the termination of this
Agreement, the Sellers will afford the Purchaser and its representatives
reasonable access to such information and other information in the possession of
the Sellers relating to the Assets; provided, that the Sellers shall have no
obligation to grant access to any document if disclosure of such document could
result in the loss of any attorney-client, attorney work product, or similar
privilege with respect to any documents; and provided further that the Purchaser
shall not until the Closing have any rights to access to (i) any Formulae which
are confidential or constitute trade secrets or (ii) any personnel records or
files. Notwithstanding anything in this Agreement to the contrary, all such
information shall be subject to the Confidentiality Agreement prior to and after
the Closing Date, which is hereby incorporated by reference herein. From and
after Closing, the Confidentiality Agreement shall terminate, except that it
shall survive with respect to any information which pertains to any assets or
business of the Sellers or their Affiliates other than the Assets and the
Business.
(b) Following the Closing, the Purchaser will retain the UD Records at
the Plants on UD's behalf for a period of not less than two years. Thereafter,
the Purchaser will not destroy or dispose of any UD Records without giving UDG
30 days' prior notice of intention to destroy or dispose of such UD Records. If,
within such 30 day period, UDG shall notify the Purchaser that UDG intends to
remove such records from the Plants, the Purchaser shall not destroy or dispose
of such records until 90 days after such notice from UDG to the Purchaser,
during which period UDG shall make arrangements to remove such records. UDG may,
at any time during the period the Purchaser retains the UD Records pursuant to
this Section 6.1(b), remove all or any part of the UD Records from the Plants,
provided that such removal does not interfere with the Purchaser's operation of
the Business or damage the Assets.
(c) Notwithstanding anything to the contrary in this Agreement, risk of
loss or damage for the UD Records after the Closing shall remain with the
Sellers and the Purchaser shall have no liability or responsibility therefor so
long as the Purchaser has acted in good faith to comply with its obligations
under this Section 6.1.
(d) UDG shall have access, during the Purchaser's regular business
hours at the Plants and on reasonable notice, to the UD Records and, to the
extent reasonably necessary in connection with the preparation of any tax or
financial reports or the defense or prosecution of any matters relating to the
Excluded Liabilities or any matters with respect to which the Sellers are
responsible to indemnify the Purchaser hereunder or with respect to the Excluded
Assets, to the Records. The Purchaser shall permit UDG to make copies of or
extracts from such Records at UDG's expense. During the applicable periods
following the Closing as provided in the Purchaser's records retention policy
(as previously furnished to the Sellers), the
Purchaser will use its good faith efforts to give UDG the same notice and
opportunity to remove as is provided above with respect to the UD Records prior
to any destruction or disposal of Records relating to Bureau of Alcohol, Tobacco
and Firearms, customs, quality control, or safety.
SECTION 6.2. Costs, Expenses, and Taxes. All costs and expenses
incurred in connection with this Agreement, the Licenses, the Other Agreements,
and the transactions contemplated hereby and thereby shall be paid by the party
incurring such cost or expense, except as otherwise provided in Schedule 6.2 or
elsewhere in this Agreement or in the Licenses or any Other Agreement.
SECTION 6.3. Bulk Sales. The Purchaser and the Sellers hereby waive
compliance with any bulk sales or similar Laws which may be applicable to the
transactions contemplated hereby.
SECTION 6.4. Insurance. For a period of five years from the Closing
Date, the Sellers (directly or through their parent companies) and the Purchaser
(directly or through its Parent) shall maintain, at their respective sole cost,
comprehensive General Liability Insurance including Contractual Liability
Insurance and Products Liability Insurance for an amount customary in the
industry from time to time for comparably sized companies, but not less than the
respective amounts set forth on Schedule 6.4. Each party shall have the right to
inspect the other's original policies. Each party shall be named during such
five-year period as an additional "insured" on the other's policies. Each
certificate of additional insured provided for herein may provide that such
additional insured's rights under such policy are limited to such additional
insured's rights under this Agreement as its interests appear hereunder. The
coverage
will be described as primary, and a certificate of insurance will be forwarded
to each party verifying that the other's policy coverages are in force and
stating that such party has been added as an additional insured and that the
insurer will use its commercially reasonable efforts to give such party 30 days'
prior written notice prior to cancelling such coverage.
SECTION 6.5. Bottles. From and after the Closing, the Sellers shall
permit the Purchaser to use the glass molds listed on Schedule 6.5 for any of
its products and shall give such instructions to the glass suppliers holding
such molds on behalf of the Sellers as be reasonably necessary to permit the
Purchaser to order glass from such suppliers using such molds. The Sellers shall
also give such instructions to the suppliers holding the Transferred Molds as
the Purchaser may reasonably request to effectuate the transfer to the Purchaser
of the Sellers' interests therein.
SECTION 6.6. Operation in Ordinary Course. Until the earlier of the
Closing and the termination of this Agreement:
(a) The Sellers will conduct the Business in the ordinary
and usual course in substantially the same manner as it is presently
operated, including the production, sale, and promotion of Products,
and not implement any Rebate Program or Promotional Program other than
those listed on Schedule 2.20.
(b) The Sellers will use their commercially reasonable
efforts to preserve their rights to, and the goodwill associated with,
the Trademarks, the Chi-Chi's/Xxxxxxxxxxx'x Trademarks, the Mr. Boston
Copyrights, the Trade Names, and the Intellectual Property.
(c) Except in the ordinary course of business or as required
by Law or contractual obligations or other understandings or
arrangements existing on the date of this Agreement, each Seller will
not (i) increase in any manner the base compensation of, or enter into
any new bonus or incentive agreement or arrangement with, any of the
Transferring Employees, (ii) pay or agree to pay any additional
pension, retirement allowance, or other employee benefit to any such
Transferring Employee, (iii) enter into any new employment, severance,
consulting, or other compensation agreement with any existing
Transferring Employee, or (iv) amend or enter into a new Employee Plan
(except as required by Law) or amend or enter into a new collective
bargaining agreement pertaining to a Transferring Employee.
(d) Subject to the terms and conditions of this Agreement,
each Seller will use its commercially reasonable efforts to keep
available the services of the Transferring Employees, and preserve the
goodwill, reputation, and present relationships of the Business with
its suppliers, customers, licensors, and others having such business
relations with the Business.
(e) Each Seller will (i) use its commercially reasonable
efforts to maintain the Owned Property in good repair, order, and
condition, normal wear and tear excepted, (ii) use its commercially
reasonable efforts to maintain and keep in full force existing
insurance or appropriate replacements therefor relating to the Assets,
(iii) maintain its records relating to the Assets in the usual,
regular, and ordinary manner on a basis consistent with past practices,
and (iv) use its commercially reasonable efforts to perform and comply
with its obligations under all Assigned Contracts. Except as
contemplated by this Agreement, no Seller shall make any material
alterations to the Owned Property without the prior written consent of
the Purchaser, which consent shall not be unreasonably withheld or
delayed.
(f) Except in the ordinary course of business or as otherwise
provided for in or contemplated by this Agreement, no Seller will (i)
sell, lease, transfer, or otherwise dispose of any of the Assets, (ii)
create or permit to exist any Lien on the Assets other than Permitted
Encumbrances, (iii) enter into any joint venture, partnership, or other
similar arrangement or form any other new arrangement for the operation
of the Assets, (iv) accelerate or delay the manufacture, shipment, or
sale of any Inventory in a manner inconsistent with past practices, or
(v) make any new commitments for capital expenditures at the Plants.
(g) The Sellers will use their commercially reasonable efforts
between the date of this Agreement and the Closing to secure
fulfillment of matters within their or their Affiliates' control which
are conditions precedent to the Purchaser's obligations hereunder, and
the Purchaser will use its commercially reasonable efforts between the
date of this Agreement and the Closing to secure fulfillment of matters
within its or its Affiliates' control which are conditions precedent to
the Sellers' obligations hereunder. The Sellers will use their
commercially reasonable efforts to obtain all Required Consents and the
Estoppel Certificates. Notwithstanding the foregoing, nothing in this
Agreement shall require any Seller or the Purchaser to pay any money
(other than amounts payable by the Purchaser or its Affiliates as
required or contemplated by the Commitment Letter) to, or enter into
any contractual or other obligation with, any other
party as a condition or inducement to obtain any Required Consent
(except as may be required by any Assigned Contract as a condition to
obtain any such Required Consent) or any Estoppel Certificate, except
that the Purchaser and the Sellers agree to pay the amounts described
on Schedule 6.2 with respect to the Required Consent referred to
therein.
(h) The Sellers shall use their commercially reasonable
efforts so that at the Closing Date the number of Depletion Days (as
defined in Schedule 6.6(h)) shall not exceed 60.
SECTION 6.7. Governmental Filings and Approvals. (a) Upon or as
promptly as practicable after the execution hereof (to the extent not heretofore
made or obtained), (i) each of the Sellers and the Purchaser shall make all
Governmental Filings and apply for such other consents of Governmental Entities
as are listed on Schedule 2.2 or Schedule 3.2, respectively, including but not
limited to a Notification and Report Form pursuant to the HSR Act, requesting
early termination of the applicable waiting period, and (ii) the Purchaser
shall, to the extent permitted by Law, apply for all Approvals, including
without limitation those listed on Schedule 3.2 or Schedule 6.7. To the extent
the Purchaser cannot, by Law, apply for any Approvals listed on Schedule 6.7
prior to the Closing, the Purchaser shall apply for such Approvals upon or as
promptly as practicable after the Closing.
(b) The Sellers and the Purchaser shall (i) provide such information as
each may reasonably request to make such filings and prepare such applications,
(ii) cooperate with each other and use their commercially reasonable efforts to
assist the other in making and pursuing such filings and applications, (iii)
respond as promptly as practicable to all requests for
additional information or documentation required in connection with such filings
and applications, and (iv) otherwise use their commercially reasonable efforts
to obtain all Required Consents and Approvals required for consummation of the
transactions contemplated by this Agreement.
SECTION 6.8. Additional Actions. Each Seller will use its commercially
reasonable efforts to facilitate and effect the transfer of the Assets as
contemplated hereby, including the implementation of the transfer of the Assets
to the Purchaser, and, for such purpose but without limitation, the Sellers
will, at and after the Closing, execute and deliver to the Purchaser such
assignments, bills of sale, consents, and other instruments to effect the
transfer of the Assets in all countries to the Purchaser as contemplated hereby,
as the Purchaser or its counsel may reasonably request as necessary or desirable
for such purpose. Prior to, at, and after the Closing, the Sellers will
cooperate with the Purchaser to enable the Purchaser to obtain all Approvals. At
and after the Closing, the Sellers will cooperate with the Purchaser (a) in
executing all documents necessary for the Purchaser to file transfers of the
registrations of the Trademarks and Intellectual Property in any country in the
world and the transfer of transferrable government label permits and approvals,
and (b) to enable the Purchaser to make use of and register its use of the Trade
Names, including executing and filing such instruments as may be necessary to
file in connection with, or to evidence, the discontinuation of the Sellers' use
of the Trade Names. Expenses in connection with compliance with this Section 6.8
shall be apportioned as provided on Schedule 6.2.
SECTION 6.9. Distributors. (a) On or before August 1, 1995 (except as
indicated on Schedule 6.9(a)), the Sellers gave notice to the Distributors
listed on Schedule 6.9(a),
terminating Contracts with such Distributors with respect to distribution of the
Products, effective as of or prior to the Closing (or, for Contracts which
require more than 30 days notice for such termination, as soon as allowable
thereafter). At or within five days after the Closing, the Sellers shall send
notices to all Distributors (and, where required, Governmental Entities), in
substantially the forms set forth as Exhibit 6.9(a), informing them of the
purchase and sale contemplated hereby, and of the Trademarks and rights to
Chi-Chi's/Xxxxxxxxxxx'x Trademarks (to the extent relevant to each Distributor
or Governmental Entity) so transferred.
(b) The Sellers shall, prior to or as promptly as practicable after the
Closing, give notice terminating each of the agreements listed on Schedule
6.9(b) (the "Terminated Foreign Distributor Agreements") upon the notice
required pursuant thereto. The Purchaser agrees to honor the license grants
provided pursuant to, and to otherwise assume the Sellers' obligations under,
each Terminated Foreign Distributor Agreement until the end of the notice period
required for terminating such Terminated Foreign Distributor Agreement.
(c) The Purchaser agrees that, concurrently with giving any notice
(written or oral) to any Distributor in the United States other than those
listed in Schedule 6.9(a) that the Purchaser does not intend to deal with, or is
terminating the distribution arrangement with, such Distributor with respect to
any Products, the Purchaser will give the Sellers notice of the Purchaser's
intentions to so refuse to deal with or terminate such Distributor. The covenant
set forth above in this Section 6.9(c) shall terminate at the date of
termination of UDG's obligations to perform the services described in part A of
Schedule I to the General Services Agreement. The Sellers shall keep such
information confidential with the same care they apply to their own confidential
information.
SECTION 6.10. Title Commitments and Surveys. With respect to each
parcel of Owned Property, UDG shall deliver all other documentation (including
FRPTA affidavits and title affidavits) which the Purchaser or the Title Company
may reasonably request for purposes of the Title Policies.
SECTION 6.11. Employee Matters. (a) Effective as of the Closing, the
Sellers shall assign and Purchaser shall assume all of the Sellers' obligations
to be performed or discharged after the Closing under the Collective Bargaining
Agreements (other than obligations which are excluded from the Assumed
Liabilities by the exclusions to Section 1.5(b)), and the Purchaser shall offer
employment pursuant to the terms thereof to all Union Employees.
(b) The Purchaser agrees to offer to all Non-Union Employees employment
with the Purchaser effective on the Closing at positions of comparable rank to
that held by, and at wages and salaries that are not less than the wages and
salaries being paid by the Sellers to, such employees immediately prior to the
Closing and otherwise on the terms and conditions set forth on Schedule 6.11(b).
(c) Without limiting the generality of the foregoing, the Purchaser
shall, for purposes of eligibility, vesting, and benefit entitlement under all
of the Purchaser's employee benefit plans and to the extent permitted by Law and
such plans, recognize the service of all New Employees (including awarding
credit under any defined contribution pension plans or other benefit plans
maintained by the Purchaser) for all service properly credited to the New
Employees under any of the Sellers' defined contribution pension plans or other
benefit plans as in existence on the date hereof, including all service with
predecessor employers as may have been properly granted under such benefit plans
of the Sellers. The Purchaser's defined
contribution pension plans and other benefit plans shall be amended to reflect
the foregoing. The Purchaser shall take such actions as may be necessary so that
(to the extent permitted by Law), (i) to the extent a New Employee or his or her
eligible spouse or dependent has satisfied the waiting period and/or
pre-existing condition limitations under the applicable Employee Welfare Plan,
such waiting period and/or pre-existing condition limitations will be regarded
as satisfied under each Employee Welfare Benefit Plan; (ii) to the extent a New
Employee has not satisfied the waiting period and/or pre-existing condition
limitation under the Employee Welfare Plan, properly credited service with the
Sellers shall be taken into account in applying waiting period and pre-existing
condition limitations under the Employee Welfare Benefit Plan; and (iii) all
amounts paid by the New Employee for the calendar year in which the Closing
occurs as deductibles or co-pay amounts or similar payments with respect to
benefits under the Employee Welfare Plans shall be credited as if so paid for
such calendar year with respect to the Employee Welfare Benefit Plans; provided,
however, that notwithstanding the foregoing, such crediting of payments shall be
contingent upon the Sellers providing the Purchaser as soon as practicable after
the Closing Date with documentation evidencing such payments made by New
Employees as well as such information as is reasonably necessary for proper
underwriting of such benefits.
(d) The Purchaser shall be liable for all claims for severance benefits
under the severance policy listed on Schedule 2.15(b) incurred with respect to
Transferring Employees on or after the Closing Date which arise as a result of
the transactions contemplated by this Agreement, and the Sellers shall be
responsible for any other claims for severance benefits (other than severance
benefits payable under policies instituted by the Purchaser, including the
policy described in the next sentence). If, within one year after the Closing
Date, a New Employee other than a Union Employee (other than one who retires
under the Sellers' retiree benefit programs) is terminated by the Purchaser or
its Affiliates other than for misconduct or unsatisfactory performance, the
Purchaser shall provide such terminated New Employee other than a Union Employee
with severance benefits as set forth on Schedule 6.11(d).
(e) The Sellers shall be liable for any vacation benefits payable under
the Sellers' applicable policies on or prior to the Closing Date to Union
Employees and the Purchaser shall be liable for any vacation benefits after the
Closing Date to Union Employees who become New Employees. The Sellers and the
Purchaser shall each be liable for 50% of all vacation benefits for calendar
year 1995 earned and not used as of the Closing Date by Non-Union Employees who
become New Employees.
(f) The Sellers shall make all (i) "matching contributions" under the
UDMI Plan with respect to contributions made by or on behalf of Union Employees
accrued as of the Closing Date that would normally be matched by the Sellers,
(ii) profit sharing contributions accrued as of the Closing Date, if any, under
the terms of the UDMI Plan with respect to Union Employees, and (iii) matching
contributions accrued as of the Closing Date, if any, under the Guinness 401(k)
Plan with respect to the Non-Union Employees. The Sellers shall cause the
Guinness 401(k) Plan and the UDMI Plan to be amended to provide that all New
Employees shall be vested in their account balances under each such plan through
the Closing Date.
(g) The Sellers shall cause the trustees of the UDMI Plan to transfer,
within the meaning of Department of Treasury Regulation Section 1.414(l)-1(o),
to the trust created under
the "employee pension benefit plan" (as defined in Section 3(2) of ERISA) as may
be established by the Purchaser pursuant to the Collective Bargaining
Agreements, liabilities and cash (or other assets acceptable to the funding
agent or trustees and the Sellers) in an amount equal to the value of such New
Employee's total account balance held under the UDMI Plan as of the date of the
transfer and as valued under the terms of the UDMI Plan and applicable Law on
the UDMI Plan's "valuation date" coincident with or next preceding the date of
the transfer.
(h) To the extent permitted by applicable Laws, each New Employee may
direct the trustee of the Guinness 401(k) Plan to transfer to the funding agent
or trustee of the Purchaser Plan by means of a rollover, either direct or
otherwise, within 90 days of the Closing Date cash and participant loan balances
equal to the value of such New Employee's total account balance held under the
Guinness 401(k) Plan as of the date of such rollover, whether direct or
otherwise and as valued under the terms of the Guinness 401(k) Plan and
applicable Law on the Guinness 401(k) Plan's valuation date of the rollover,
whether direct or otherwise. Such right of rollover to the Purchaser Plan shall
not limit any other rights which such New Employee has upon distribution from
the Guinness 401(k) Plan.
(i) The transfer of assets contemplated by Section 6.11(g) and the
direct rollover of the distributions contemplated by Section 6.11(h) are subject
to the prior delivery by the Purchaser to the Sellers of a legal opinion in form
and substance satisfactory to the Sellers from counsel acceptable to the Sellers
that such counsel is of the opinion that the Purchaser Plans meet the
qualification requirements of the Code. The Purchaser shall take all actions
necessary to obtain, or shall cause its Affiliates to obtain, on a timely basis,
a favorable
determination letter from the IRS with respect to the Purchaser Plans to the
effect that such Purchaser Plans are qualified under the Code. The Purchaser
shall make, or cause to be made, in a timely manner any amendments to the
Purchaser Plans which may be required by the IRS as a condition for the issuance
of such a letter, and to permit the rollovers contemplated by Section 6.11(h).
The Purchaser Plans shall provide, as of the date of such transfer or rollover,
as the case may be, an account balance for each New Employee with respect to
whom such transfer or rollover, as the case may be, was made which is equal to
his or her account balance under the UDMI Plan or the Guinness 401(k) Plan, as
the case may be, as of the date of such transfer or rollover, as the case may
be. The Purchaser Plans shall recognize for all plan purposes all service
properly recognized by the UDMI Plan or the Guinness 401(k) Plan, as the case
may be, as of the Closing Date with respect to New Employees to the same extent
as properly recognized by such plan and shall treat such service as if it had
been service with the Purchaser. The Sellers shall supply the Purchaser with
information regarding such service within a reasonable period of time after the
Closing Date.
(j) The Sellers and the Purchaser shall take such action as may be
necessary or desirable to accomplish the transfer of assets described in Section
6.11(g) and the rollovers contemplated by Section 6.11(h), including notifying
the IRS if required by Section 6058 of the Code of the contemplated transfers
(and notifying any other agency of the federal government which is required by
Law to such notice), and to provide such further information or documents as the
IRS (or any other agency) may require. Further, if required by applicable Law or
regulations, the Sellers and the Purchaser agree to use their commercially
reasonable
efforts to obtain any necessary IRS (or other United States federal government
agency) approval without material modification of the transactions contemplated
hereby.
(k) Notwithstanding anything to the contrary in this Agreement, the
Sellers shall remain liable for, and the Purchaser shall have no responsibility
for, any retiree medical, life or other welfare benefits arising under retiree
benefit programs of the Sellers or their predecessors.
(l) The Sellers and the Purchaser agree to provide on a correct and
timely basis such records and information as the Sellers or the Purchaser may
reasonably request to carry out their respective obligations under this Section
6.11.
(m) The Sellers shall be solely and exclusively liable for any and all
liabilities arising out of any obligation under any Law to offer or provide
continuation coverage under any Employee Welfare Plan to any Union Employee or
Non-Union Employee who is eligible for such coverage as a result of the
occurrence of an event on or before the Closing Date or an event after the
Closing with respect to any Union Employee or Non-Union Employee on leave of
absence as of the Closing Date, except that the Sellers shall have no liability
under this Section 6.11(m) with respect to any New Employee. The Sellers shall
be solely and exclusively liable for any and all liabilities arising out of any
obligation to provide notice of any such continuation rights for which the
Sellers are responsible hereunder.
(n) The Sellers shall remain liable for, and the Purchaser shall have
no responsibility for, all workers' compensation claims made by New Employees on
or before the Closing Date or arising from injuries or events occurring or
circumstances existing solely on or before the Closing Date. The Purchaser shall
be responsible for all workers' compensation claims made
by New Employees arising from injuries or events occurring or circumstances
existing solely after the Closing Date.
(o) No provision of this Section 6.11 shall create any third party
beneficiary rights in any employee or former employee (including any beneficiary
or dependent thereof) of the Sellers in respect of continued employment (or
resumed employment) or in respect of any benefits that may be provided, directly
or indirectly, under any of the Sellers' or the Purchaser's employee benefit
plans (as defined in Section 3(2) of ERISA).
(p) Notwithstanding anything to the contrary in this Agreement, the
Purchaser shall not be required to offer employment to the individual employed
pursuant to the employment Contract listed on Schedule 1.3(l), such individual
need not be listed on Schedule 2.21, and the Sellers shall be responsible for
all liabilities under such employment Contract.
SECTION 6.12. Assistance In Collecting Certain Amounts. The Purchaser
shall remit promptly to UDG, for the benefit of the Sellers, any payments or
other sums received by the Purchaser that relate to any sales, shipments, or
other matters occurring on or before the Closing Date or that otherwise are
properly for the account of the Sellers. If, after the Closing Date, the Sellers
shall wish to make a claim or otherwise take action under an Assigned Contract
with respect to a liability of the Sellers that is not an Assumed Liability, or
if the Sellers shall request the Purchaser's assistance in collecting accounts
receivable of the Sellers from the Distributors, the Purchaser shall assist,
cooperate, and consult with the Sellers with respect to such action and shall
remit promptly to UDG, for the benefit of the Sellers, any payments or other
sums received by the Purchaser that relate thereto. The Sellers shall remit
promptly to the Purchaser any payments or other sums received by the Sellers
after the Closing
Date that relate to any sales or shipments made by or are otherwise properly for
the account of the Purchaser.
SECTION 6.13. Differentiation Between Products of the Sellers and the
Purchaser. For a period of not less than 12 months after the Closing, the
Purchaser will code its products in the manner set forth on Schedule 6.13 or
another manner approved by the Sellers.
SECTION 6.14. Certain Financial Information. UDG shall provide or cause
to be provided to the Purchaser, or as described in Schedule 6.14 shall assist
the Purchaser in preparing, the audited and unaudited financial statements and
other information regarding the Assets described on Schedule 6.14, within the
time periods set forth on Schedule 6.14. The Sellers shall cause the Sellers'
Accountants to provide the Purchaser or its Affiliates such consents as may be
necessary for the Purchaser or its Affiliates to use such financial statements
in filings under the Securities Acts, to provide procedures letters as described
on Schedule 6.14, and to provide "comfort letters" as may be requested by the
Purchaser or its Affiliates and as are customarily given by accountants. All
expenses associated with providing the foregoing information, including expenses
associated with obtaining such consents, procedures letters, and comfort
letters, shall be paid by as provided in Schedule 6.2.
SECTION 6.15. Intangible Property. After Closing, the Sellers shall (a)
not infringe upon any of the Trademarks and (b) use their commercially
reasonable efforts to cooperate with the Purchaser at the Purchaser's expense in
the Purchaser's efforts after the Closing to maintain, protect, and enforce the
Purchaser's rights in the Trademarks and shall execute all documents reasonably
required to enable the Purchaser to accomplish such efforts.
SECTION 6.16. Rebate Programs. Following the Closing, the Sellers shall
discharge all of the obligations under Rebate Programs put into effect by the
Sellers prior to Closing. liabilities for any Rebate Program shall be
apportioned between the Purchaser and the Sellers in accordance with Schedule
1.9 as soon as practicable following the end of such Rebate Program. The
Purchaser shall have no liability for any Grant Programs instituted by the
Sellers.
SECTION 6.17. Use Up Rights. (a) For a period of one year following the
Closing Date, the Sellers shall cooperate with the Purchaser, at the Purchaser's
sole expense, in connection with the Purchaser's efforts to obtain "use-up"
rights with respect to labels and trade dress included in the Assets, including,
if so requested by the Purchaser, confirmation to federal and state alcoholic
beverage authorities that the Purchaser is authorized by the Sellers to use such
labels and trade dress.
(b) The Purchaser agrees that, following the Closing, UDG may continue
to use the name "Glenmore" in its corporate name, and may continue to conduct
business under that name, to December 31, 1997. UDG shall not use the "Glenmore"
name as a trademark or service xxxx. If the Closing occurs, UDG agrees to change
its name by such date to a name not using the name "Glenmore." From the Closing
until such date, the Purchaser shall cooperate with the Sellers, at the Sellers'
sole expense, in connection with the Sellers' efforts to obtain "use-up" rights
with respect to advertising and point-of-sale materials on which the "Glenmore"
name appears, including, if so requested by the Sellers, confirmation to federal
and state alcoholic beverage authorities that the Sellers are authorized by the
Purchaser to use such materials. The Sellers acknowledge that, following the
Closing, the Purchaser will have the
exclusive right, title, and interest in the Glenmore name and trademark. The
Sellers will not at any time do or cause to be done any act, directly or
indirectly, contesting or in any way impairing the Purchaser's right, title, and
interest in the Glenmore name and trademark. Every permitted use of the Glenmore
name shall inure to the benefit of the Purchaser.
SECTION 6.18. Required Consents. If any Required Consent relating to
any Contract is not obtained prior to Closing, and either (a) such Required
Consent is not a Material Required Consent or (b) such Required Consent is a
Material Required Consent but the parties waive the requirement to obtain such
Material Required Consent, then (c) the parties shall continue to use their
commercially reasonable efforts following the Closing to obtain such Required
Consent, (d) such Contract shall not be deemed assigned unless and until such
Required Consent is obtained, (e) the Sellers shall use their commercially
reasonable efforts to provide to the Purchaser the benefits which the Purchaser
would have received had such Required Consent has been obtained and cooperate in
any reasonable and lawful arrangement designed to provide such benefits to the
Purchaser, and (f) to the extent that the Purchaser is provided such benefits
pursuant to this Section 6.18, the Purchaser will perform for the benefit of the
other party or parties to such Contract the obligations of the Sellers, if any,
related thereto.
SECTION 6.19. Name Change. The Sellers shall not use the phrase "The
Viking Distillery Inc." or any derivation thereof from and after the Closing. On
the Closing Date, the Sellers shall cause a certificate for name change of The
Viking Distillery, Inc. to be filed.
SECTION 6.20. Destroying Boiler House/Chimney Stack. The Sellers will
use their commercially reasonable efforts to complete, prior to or as soon as
practicable after, the
Closing, and in compliance with all applicable Laws, including but not limited
to, Environmental and Safety Requirements, the destruction of the boiler
house/chimney stack located at the Owensboro, Kentucky Plant, including without
limitation removal from such Plant of the debris and materials generated by the
destruction for proper disposal off-site and in accordance with all applicable
Environmental and Safety Requirements and relocation of utilities and railroad
tracks so they may be used in the manner previously used in connection with the
Business. Costs and expenses relating to compliance with this Section 6.20 shall
be borne by the Sellers.
SECTION 6.21. Customers and Suppliers. (a) Not later than two days
prior to the Closing Date, the Sellers shall deliver to the Purchaser a true and
complete list, as of a date or dates within three days of such date of delivery
as set forth thereon, of all Orders (as if such date were the Closing Date)
which have an unexpired term of one year or more or the unsatisfied portion of
which involves payments of $50,000 or more.
(b) The Sellers shall notify the Purchaser prior to the Closing Date of
any supplier or customer listed on Schedule 2.26 which inform the Sellers, in
writing or, to the Sellers' Knowledge, orally, that it does not intend to do
business with the Purchaser following the Closing with respect to the Business.
SECTION 6.22. Other Agreements. The Sellers and the Purchaser shall
provide to each other the notices, estimates, orders, and other information to
be given prior to Closing as provided in the forms of the Other Agreements
attached hereto, at the times contemplated by such forms.
ARTICLE VII
CLOSING
SECTION 7.1. The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Xxxxxx,
Xxxxxxx & Xxxxx, 700 Midtown Tower, Rochester, New York, at 10:00 A.M., local
time, on September 1, 1995 or, if later, the first day of the month after the
month in which the conditions set forth in Sections 4.4, 4.5, 4.8, 5.4, 5.5, and
5.8 have been satisfied or waived (or, if such date would be less than five
business days following the occurrence of such event, the first day of the
following month), or at such other place, time or date as may be agreed upon by
the parties hereto (it being understood that the establishment of the foregoing
conditions as the predicates for the date of the Closing shall not limit the
effect of any other term of Article IV or V creating one or more conditions to
the Closing itself). The Closing shall be deemed to be effective as of 12:01
a.m. Eastern Time on the Closing Date. The Closing may occur at such different
place, such different time, or such different date or a combination thereof as
the Purchaser and UDG may agree in writing.
SECTION 7.2. Documents Delivered by the Sellers. At the Closing, the
Sellers will at their sole cost and expense execute and deliver or cause to be
executed and delivered to the Purchaser the following documents:
(a) A certificate signed by the President or a Vice President
of each Seller to the effect set forth in Section 4.1, in all
substantive respects in the form attached hereto as Exhibit 7.2(a).
(b) Opinions dated the Closing Date of Duane, Morris &
Xxxxxxxxx, Xxxxxx Ireland, Esq., Xxxxxx & Xxxxxxxx, Divine, Xxxxxx,
Xxxxxxxxx & Fields, and Robin, Blecker, Xxxxx & Xxxxxxxx, counsel to
the Sellers, in all substantive respects in the forms attached hereto
as Exhibit 7.2(b).
(c) One or more assignments, as the Purchaser may reasonably
request, of the Trademarks (other than the Chi-Chi's/Xxxxxxxxxxx'x
Trademarks) in all substantive respects in the form attached hereto as
Exhibit 7.2(c), or in such other form as may be reasonably necessary
with respect to the Foreign Trademarks, from and executed by each
applicable Seller.
(d) One or more assignments, as the Purchaser may reasonably
request, of the Assigned Contracts in all substantive respects in the
form attached hereto as Exhibit 7.2(d) (or such other form or
additional assignment as may be necessary under the terms of any
Assigned Contract), executed by each applicable Seller.
(e) One or more bills of sale, as the Purchaser may reasonably
request, for the Assets not otherwise conveyed, in all substantive
respects in the form attached hereto as Exhibit 7.2(e), executed by
each applicable Seller.
(f) General warranty deeds, in all substantive respects in the
forms attached hereto as Exhibits 7.2(f)-1 and 7.2(f)-2, executed by
the applicable Sellers, conveying marketable fee simple title to the
Owned Property to the Purchaser, subject only to the Permitted
Encumbrances.
(g) A Copyright Assignment, in all substantive respects in
the form attached hereto as Exhibit 7.2(g), executed by UDG, with
respect to the Mr. Boston Copyright.
(h) The Licenses and Other Agreements, executed by UDG or
the appropriate Seller or Seller Affiliate.
(i) Uniform Commercial Code lien searches in Connecticut,
Kentucky, and Georgia, reasonably satisfactory to counsel for the
Purchaser, showing that there were no Liens of record outstanding
against any of the Assets (other than Permitted Encumbrances) as of the
Closing or a date reasonably proximate to the Closing Date.
(j) Evidence that all Material Required Consents and Approvals
have been obtained by the Sellers, together with copies of any writings
evidencing any Required Consents or Approvals and of the Estoppel
Certificates, if obtained.
(k) A copy of resolutions of the Board of Directors of UDG and
each of the Sellers, certified by the secretary or assistant secretary
thereof as having been duly and validly adopted and in full force and
effect, authorizing the execution and delivery of this Agreement, the
Licenses, and the Other Agreements and performance of the transactions
contemplated hereby by the Sellers.
(l) An affidavit of residence, in all substantive respects
in the form attached hereto as Exhibit 7.2(l).
(m) The Records.
(n) The name change certificate identified in Section 6.19.
(o) A certificate signed by the President or a Vice
President of Guinness America, Inc., in all substantive respects in
the form attached hereto as Exhibit 7.2(o).
(p) Certificates of incorporation, certified by the
Secretary of State of each Seller's state of incorporation.
(q) Certificates of good standing (including tax status, where
available) with respect to each Seller (or such similar document, if
any, as is issued by the appropriate agencies of the states in which
the Sellers are organized).
(r) Such other documents as the Purchaser, its counsel, or
counsel for its Parent may reasonably request to consummate the
transactions contemplated hereby.
SECTION 7.3. Documents Delivered by Purchaser. At the Closing, the
Purchaser will and will cause the Purchaser Subsidiaries to, at their sole cost
and expense, execute and deliver or cause to be executed and delivered to UDG on
behalf of the Sellers the following documents:
(a) The Closing Amount by wire transfer as provided in
Section 1.7.
(b) A certificate signed by the President or a Vice
President of the Purchaser to the effect set forth in Section 5.2, in
all substantive respects in the form attached hereto as Exhibit
7.3(b).
(c) Opinions dated the Closing Date of Xxxxxx, Xxxxxxx &
Xxxxx, Fulton, Hubbard, & Xxxxxxx, and Xxxx X. Xxxxxxx, counsel to the
Purchaser, in all substantive respects in the forms attached hereto as
Exhibit 7.3(c).
(d) One or more assumptions of the Assumed Liabilities, in all
substantive respects in the form attached hereto as Exhibit 7.2(d) (or
such other form or additional instrument of assumption as may be
necessary under the terms of any Assigned Contract or for any specific
Assumed Liability), executed by the Purchaser.
(e) The Licenses and Other Agreements, executed by the
Purchaser or the appropriate Purchaser Subsidiary.
(f) Resale certificates with respect to the Inventory, in
all substantive respects in the forms attached hereto as Exhibit
7.3(f).
(g) Evidence that all Required Consents and Approvals have
been obtained by the Purchaser.
(h) A copy of a resolution of the Board of Directors of the
Purchaser and each of the Purchaser Subsidiaries, certified by the
secretary or assistant secretary thereof as having been duly and
validly adopted and in full force and effect, authorizing the execution
and delivery of this Agreement, the Licenses, and the Other Agreements
and performance of the transactions contemplated hereby by the
Purchaser and the Purchaser Subsidiaries.
(i) A certificate signed by the President or a Vice President
of the Purchaser, in all substantive respects in the form attached
hereto as Exhibit 7.3(i).
(j) Certificates of incorporation, certified by the
Secretary of State of the Purchaser's and each Purchaser Subsidiary's
state of incorporation.
(k) Certificates of good standing with respect to the
Purchaser and each Purchaser Subsidiary (or such similar document, if
any, as is issued by the appropriate agencies of the states in which
the Purchaser Subsidiaries are organized).
(l) Such other documents as the Sellers or their counsel may
reasonably request to consummate the transactions contemplated hereby.
SECTION 7.4. Delivery; Risk of Loss. On the Closing Date, the Sellers
shall deliver the Assets to the Purchaser or to Persons designated by the
Purchaser in such manner as is customary. The Sellers shall deliver to the
Purchaser actual possession of the Assets to the
extent actual possession of such Assets can reasonably be delivered. With
respect to any Assets that cannot actually be delivered to the Purchaser or its
designee because they are in possession of third parties, the Sellers will give
all necessary instructions to the parties in possession thereof, with copies
thereof to the Purchaser, that all of the Sellers' right, title, and interest in
and to the same have been vested and licensed in the Purchaser and that the same
are to be held for the Purchaser's exclusive use and benefit. The Sellers shall
deliver the Assets listed in items 2 and 4 of Schedule 1.2(j) to the Purchaser
as soon as practicable following the Closing, at such location or locations as
the Purchaser shall reasonably specify. The Sellers shall bear the risk of loss
to the Assets until transferred (actually or constructively) to the Purchaser on
the Closing Date (or, in the case of the Assets listed in items 2 and 4 of
Schedule 1.2(j), until delivered as provided in the preceding sentence), and the
Sellers shall be entitled to retain any insurance proceeds received, or any
other rights, as a result of any such loss.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Indemnification by the Sellers. From and after the
Closing, subject to the provisions of this Article VIII, the Sellers, jointly
and severally, agree to indemnify, defend, and save the Purchaser Indemnified
Parties harmless from and against, and to promptly pay to or reimburse a
Purchaser Indemnified Party for, all Losses sustained or incurred by any
Purchaser Indemnified Party relating to, resulting from, arising out of, or
otherwise by virtue of:
(a)(i) any breach of a representation or warranty made herein
by the Sellers, (ii) non-compliance with or breach by the Sellers of
any of the covenants or agreements contained in this Agreement to be
performed by the Sellers or any of their Affiliates, (iii) Third Party
Claims relating to the Assets or the Business, to the extent such Third
Party Claims relate to, result from, or arise out of events, acts,
omissions, circumstances, or conditions occurring or existing prior to
the Closing Date, other than (A) the liabilities assumed by the
Purchaser pursuant to Section 1.5 (without regard to Section
1.5(b)(iii)), (B) the liabilities with respect to which the Purchaser
indemnifies the Seller Indemnified Parties pursuant to Section 8.2(b),
(c), (d), (e), or (f), and (C) as described on Schedule 8.1(a), (iv)
the Sellers' failure to comply with bulk sales or similar Laws which
may be applicable to the transactions contemplated hereby, (v) any
Terminated Foreign Distribution Agreement, provided the Purchaser has
complied with its obligations relating thereto provided in Section 6.9,
and (vi) Taxes relating to the Assets arising or accruing in respect of
periods prior to the Closing;
(b) any bodily injury to, or illness or death of, a consumer
of any Inventory, which injury, illness, or death resulted directly
from such consumer's consumption of such Inventory and occurred (i) as
a result of such Inventory not being Fit for Consumption when delivered
to the Purchaser by the Sellers or their Affiliates and (ii) not as a
result of (A) any storage, shipment, processing, or handling of such
Inventory other than by the Sellers or (B) any misuse or abuse of
alcoholic beverages by such consumer;
(c) any bodily injury to, or illness or death of, a consumer
of any Products sold by the Sellers or their Affiliates prior to the
Closing (including the Sellers' liabilities to contribute to any Losses
relating to any such claim arising from any misuse or abuse of
alcoholic beverages by such consumer);
(d)(i) to the extent provided in Section 8.14, any Remedial
Work relating to any Sellers' Environmental Condition and any Losses
arising from the performance by the Sellers of any Remedial Work or
(ii) for Losses other than Remedial Work, any Sellers' Environmental
Condition;
(e) the Excluded Liabilities (except to the extent the
Purchaser is responsible to indemnify the Sellers pursuant to Section
8.2(c), (d), (e), or (f));
(f) any trademark right of any third party being infringed by
the use by the Purchaser in the United States of the
Chi-Chi's/Xxxxxxxxxxx'x Trademarks which are in use in the United
States as indicated on Schedule 1.2(c)-2 and are registered in the
United States, provided the relevant Chi-Chi's/Xxxxxxxxxxx'x License
remains in effect and such use is not materially different from the
manner in which such Chi-Chi's/Xxxxxxxxxxx'x Trademarks have been used
by the Sellers;
(g) any Finished Goods Inventory which does not comply with
requirements of fill height, proof content, or other Federal or state
laws relating to the production or sale of alcoholic beverages;
(h) Third Party Claims which arise from the inclusion by the
Parent or any of its Affiliates of the SEC Financials or the MD&A
Materials or any presentation derivative thereof in any filing required
to be made by any of them pursuant to the
requirements of the Securities Acts or any other disclosure or
communication made by any of them, provided that the Sellers shall not
have liability under this Section 8.1(h) unless (i) such Losses arise
from an untrue statement of a material fact, or omission of a material
fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading, in any of the
SEC Financials or MD&A Materials, (ii) in the case of the unaudited
statements contained in the SEC Financials, either (A) such statements
were not prepared in accordance with the Sellers' accounting policies
or (B) the Sellers had Knowledge, at the time such SEC Financials were
provided to the Purchaser, that such SEC Financials contained such
untrue statement or omission, and (iii) in the case of the MD&A
Materials, the Sellers did not prepare such MD&A Materials in good
faith; or
(i) any of the matters described on Schedule 8.1(i).
SECTION 8.2. Indemnification by the Purchaser. From and after the
Closing, subject to the provisions of this Article VIII, the Purchaser agrees to
indemnify, defend, and save the Seller Indemnified Parties harmless from and
against, and to promptly pay to or reimburse a Seller Indemnified Party for, all
Losses sustained or incurred by any Seller Indemnified Party relating to,
resulting from, arising out of, or otherwise by virtue of:
(a)(i) any breach of a representation or warranty made herein
by the Purchaser, (ii) non-compliance with or breach by the Purchaser
of any of the covenants or agreements contained in this Agreement to be
performed by the Purchaser or any of its Affiliates, (iii) Third Party
Claims relating to the Assets, to the extent such Third Party Claims
relate to, result from, or arise out of events, acts, or omissions
occurring, or
circumstances or conditions first arising, after the Closing Date,
other than (A) the liabilities with respect to which the Sellers
indemnify the Purchaser Indemnified Parties pursuant to Section
8.1(a)(ii), 8.1(a)(iii), 8.1(a)(iv), 8.1(a)(v), 8.1(a)(vi), 8.1(b),
8.1(c), 8.1(d), 8.1(e), 8.1(f), 8.1(g), 8.1(h), or 8.1(i) and (B) as
described on Schedule 8.1(a), and (iv) Taxes relating to the Assets
arising or accruing in respect of periods after the Closing;
(b) any bodily injury to, or illness or death of, a consumer
of any Inventory, which injury, illness, or death resulted directly
from such consumer's consumption of such Inventory, other than any such
Losses for which the Sellers are responsible to indemnify the Purchaser
pursuant to Section 8.1(b);
(c) any Environmental Condition except as provided in
Section 8.1(a)(i), Section 8.1(d), and Section 8.14;
(d) any failure of the Purchaser (or any Purchaser
Subsidiary to which the relevant Chi-Chi's/Xxxxxxxxxxx'x License is
assigned) to meet the Chi-Chi's Requirements;
(e) the Assumed Liabilities; or
(f) Third Party Claims which arise from the inclusion by the
Parent or any of its Affiliates of (i) the SEC Financials or any
presentation derivative thereof in any filing made by any of them
pursuant to the requirements of the Securities Acts or in any other
disclosure or communication, except to the extent the Sellers are
responsible to indemnify the Purchaser therefor pursuant to Section
8.1(h), or (ii) the MD&A Materials or any presentation derivative
thereof in any filing made by any of them
pursuant to the requirements of the Securities Acts or in any other
disclosure or communication, provided that the MD&A Materials were
prepared by the Sellers in good faith.
SECTION 8.3. Indemnification Procedure for Third Party Claims.
(a) In the event
that subsequent to the Closing any Person entitled to indemnification under this
Agreement (an "Indemnified Party") asserts a claim for indemnification or
receives notice of the assertion of any claim, issuance of any order, or the
commencement of any action or proceeding by any entity who is not a party to
this Agreement or an Affiliate of such a party (including, but not limited to
any Governmental Entity) against such Indemnified Party, or intends to conduct a
voluntary recall (which, if not made voluntarily, would be reasonably likely to
be required by a Governmental Entity under applicable Law) of any Finished Goods
Inventory (any of the foregoing being a "Third Party Claim"), in each case
against which a party to this Agreement is required to provide indemnification
under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give
written notice of such claim to the Indemnifying Party within 30 days after
learning of such claim (or within such shorter time as may be necessary to give
the Indemnifying Party a reasonable opportunity to respond to such claim),
together with a statement of any available information regarding such claim and
the counsel the Indemnified Party intends to employ in connection with such
claim. The Indemnifying Party shall have the right, upon written notice to the
Indemnified Party (the "Defense Notice") within 30 days after receipt from the
Indemnified Party of notice of such claim, which notice by the Indemnifying
Party shall specify the counsel it will appoint to defend such claim ("Defense
Counsel"), to conduct at its expense the defense against such claim in its own
name, or if necessary in the
name of the Indemnified Party; provided, however, that the Indemnified Party
shall have the right to approve the Defense Counsel, which approval shall not be
unreasonably withheld or delayed, and, in the event the Indemnifying Party and
the Indemnified Party cannot agree upon such counsel within ten days after the
Defense Notice is provided, then the Indemnifying Party shall propose an
alternate Defense Counsel, which shall be subject again to the Indemnified
Party's approval, which approval shall not be unreasonably withheld or delayed.
(b) In the event that the Indemnifying Party shall fail to give a
Defense Notice, it shall be deemed to have elected not to conduct the defense of
the subject Third Party Claim, and in such event the Indemnified Party shall
have the right to conduct such defense in good faith, but the Indemnified Party
shall not compromise, settle, default on, or admit liability with respect to
such Third Party Claim without prior consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. In such event, the
Indemnifying Party will be liable for all costs, expenses, settlement amounts,
or other Losses paid or incurred in connection with such Third Party Claim;
provided, that, if the Indemnified Party settles, compromises, defaults on, or
admits liability with respect to such Third Party Claim without the Indemnifying
Party's prior written consent (unless such consent is unreasonably withheld),
the Indemnified Party will be liable for all costs, expenses, settlement
amounts, or other Losses paid or incurred in connection therewith and the
Indemnifying Party shall have no obligation to indemnify the Indemnified Party
with respect thereto.
(c) In the event that the Indemnifying Party does elect to conduct the
defense of the subject Third Party Claim, the Indemnified Party will cooperate
with and make available to the Indemnifying Party such assistance and materials
as may be reasonably requested by it, all at
the expense of the Indemnifying Party. Regardless of which party defends a Third
Party Claim, the other party shall have the right at its expense to participate
in the defense assisted by counsel of its own choosing. The Indemnified Party
shall not compromise, settle, default on, or admit liability with respect to the
Third Party Claim without the prior written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld or delayed. Without the prior
written consent of the Indemnified Party, which shall not be unreasonably
withheld or delayed, the Indemnifying Party will not enter into any settlement
of any Third Party Claim or cease to defend against such claim if, pursuant to
or as a result of such settlement or cessation, (i) injunctive or other
equitable relief would be imposed against the Indemnified Party or (ii) such
settlement or cessation would lead to liability or create any financial or other
obligation on the part of the Indemnified Party for which the Indemnified Party
is not entitled to indemnification hereunder. If a firm offer is made to settle
a Third Party Claim, other than an offer the Indemnifying Party is not permitted
to accept pursuant to the preceding sentence, and the Indemnifying Party desires
to accept and agree to such offer, the Indemnifying Party will give written
notice to the Indemnified Party to that effect. If the Indemnified Party fails
to consent to such firm offer within 10 calendar days after its receipt of such
notice, the Indemnified Party may continue to contest or defend such Third Party
Claim and, in such event, the maximum liability of the Indemnifying Party as to
such Third Party Claim will not exceed the amount of such settlement offer, plus
costs and expenses paid or incurred by the Indemnified Party to the date of
delivery of such notice. If an Indemnified Party settles, compromises, defaults
on, or admits liability with respect to any Third Party Claim without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, the Indemnifying Party shall have no obligation to
indemnify the Indemnified Party under this Article VIII with respect to such
Third Party Claim.
(d) Any judgment entered or settlement agreed upon in the manner
provided herein shall be binding upon the Indemnifying Party, and shall
conclusively be deemed to be an obligation with respect to which the Indemnified
Party is entitled to prompt indemnification hereunder, subject to the
Indemnifying Party's right to appeal an appealable judgment or order.
SECTION 8.4. Direct Claims. It is the intent of the parties hereto that
all direct claims by an Indemnified Party against a party hereto not arising out
of Third Party Claims shall be subject to and benefit from the terms of this
Article VIII. Any claim under this Article VIII by an Indemnified Party for
indemnification other than indemnification against a Third Party Claim (a
"Direct Claim") will be asserted by giving the Indemnifying Party reasonably
prompt written notice thereof, and the Indemnifying Party will have a period of
30 calendar days within which to satisfy such Direct Claim. If the Indemnifying
Party does not so respond within such 30 calendar day period, the Indemnifying
Party will be deemed to have rejected such claim, in which event the Indemnified
Party will be free to pursue such remedies as may be available to the
Indemnified Party under this Article VIII.
SECTION 8.5. Failure to Give Timely Notice. A failure by an Indemnified
Party to give timely, complete, or accurate notice as provided in Sections 8.3
or 8.4 will not affect the rights or obligations of any party hereunder except
and only to the extent that, as a result of such failure, any party entitled to
receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise adversely affected or damaged as
a result of such failure to give timely, complete, and accurate notice.
SECTION 8.6. Reduction of Losses. The parties shall use their
commercially reasonable efforts to collect the proceeds of any insurance which
would have the effect of reducing any Losses (in which case such proceeds shall
reduce such Losses). To the extent any Losses of an Indemnified Party are
reduced by receipt of payment (a) under insurance policies which are not subject
to retroactive adjustment or other reimbursement to the insurer in respect of
such payment or (b) from third parties not affiliated with the Indemnified
Party, such payments (net of the expenses of the recovery thereof) shall be
credited against such Losses and, if indemnification payments shall have been
received prior to the collection of such proceeds, shall remit to the
Indemnifying Party the amount of such proceeds (net of the cost of collection
thereof) to the extent of indemnification payments received in respect of such
Losses.
SECTION 8.7. Subrogation. The Indemnifying Party shall be subrogated to
the Indemnified Party's rights of recovery to the extent of any Losses satisfied
by the Indemnifying Party. The Indemnified Party shall permit the Indemnifying
Party to use the name of the Indemnified Party and the names of the Indemnified
Party's Affiliates in any transaction or any proceeding to enforce such rights
and shall execute and deliver such instruments and papers as are necessary to
assign such rights and assist in the exercise thereof, including access to books
and records with respect to such Losses.
SECTION 8.8. Limitations on Indemnities. (a) The Purchaser shall not
have any liability pursuant to Section 8.2(a)(i) hereof unless and until the
aggregate amount of all Losses payable pursuant to Sections 8.2(a)(i) exceeds
the Threshold Amount, and then the Purchaser shall have liability only for the
amount of such Losses in excess of the Threshold Amount.
(b) Except as provided in Section 8.8(g), the Sellers shall not have
any liability pursuant to Section 8.1(a)(i) hereof unless and until the
aggregate amount of all Losses payable pursuant to Sections 8.1(a)(i) exceeds
the Threshold Amount, and then the Sellers shall have liability only for the
amount of such Losses in excess of the Threshold Amount.
(c) Except as provided in Section 8.8(g), any claims (including all
claims arising out of the same event) for indemnification under Section
8.1(a)(i) may be made only in respect of Losses for such claim or related claims
if such Losses exceed $3,000, in which event the Sellers shall, subject to this
Article VIII, be liable for all of such Losses. Any claims in respect of Losses
of less than $3,000 per such claim or related claims may not be applied toward
the Threshold Amount.
(d) The Sellers' liability for the Purchaser Indemnified Parties'
Losses subject to indemnification under Sections 8.1(a)(i) and 8.1(f) shall be
limited (i) for Losses relating to any group of Assets described on Schedule
8.8, to the amount set forth beside such group of Assets on Schedule 8.8, and
(ii) in the aggregate to the Purchase Price. The Sellers' liability to the
Purchaser Indemnified Parties under Section 8.1(g) for any Finished Goods
Inventory shall be limited to the Book Value of such Finished Goods Inventory
(provided, that this sentence shall not limit the Sellers' liability with
respect to Third Party Claims other than Third Party Claims to the extent
arising solely from returns of goods).
(e) The Purchaser's liability for Seller Indemnified Parties' Losses
subject to indemnification under Section 8.2(a)(i) shall be limited to the
Purchase Price.
(f) In no event shall either party be liable under this Article VIII
for indirect, consequential, special, or exemplary damages (provided, that this
Section 8.8(f) shall not limit
the Sellers' liability for (i) amounts paid by the Purchaser Indemnified Parties
in respect of Third Party Claims, including amounts payable with respect to
Third Party Claims as indirect, consequential, special, punitive, or exemplary
damages, or (ii) lost profits).
(g) If an Estoppel Certificate is not obtained from either
Chi-Chi's/Xxxxxxxxxxx'x Licensor, any claim for indemnification under Section
8.1(a)(i) with respect to a breach of a representation or warranty made in
Section 2.6 with respect to such Chi-Chi's/Xxxxxxxxxxx'x Licensor or the related
Chi-Chi's/Xxxxxxxxxxx'x License shall not be subject to Section 8.8(b) or
8.8(c).
SECTION 8.9. Survival of Representations, Warranties and Covenants;
Time Limits on Indemnification Obligations. All representations, warranties,
covenants, and agreements contained in this Agreement shall survive the
execution and delivery of this Agreement and the Closing hereunder and (a) with
respect to Indefinite Claims, shall survive indefinitely, (b) with respect to
any Special Claim, shall survive until, and shall expire on, the date that all
claims against any Purchaser Indemnified Party which could give rise to a
Special Claim are barred by all applicable statutes of limitations, and no
Special Claim may be made thereafter, (c) with respect to claims under Section
8.1(g), shall survive until, and shall expire on, the date which is 12 calendar
months following the Closing Date, and no such claim may be made thereafter, and
(d) with respect to General Claims, shall survive until, and shall expire on,
the date which is 18 calendar months following the Closing Date, and no General
Claim may be made thereafter; provided that Special Claims, claims under Section
8.1(g), and General Claims for which the party asserting such a claim shall have
given notice as provided in Section 8.3
on or prior to the expiration of the applicable period specified above hereof
shall survive indefinitely.
SECTION 8.10. Defense of Claims; Control of Proceedings.
Notwithstanding anything in Section 8.3 of this Agreement to the contrary, to
the extent any Losses subject to indemnification hereunder would exceed (after
giving effect to then outstanding or theretofore indemnified claims) limitations
on the Indemnifying Party's indemnity obligations under this Agreement, whether
pursuant to Section 8.9 or otherwise, the Indemnified Party shall be entitled to
control the defense of such claim or management of such proceeding with respect
to such Losses at the Indemnified Party's sole cost and expense.
SECTION 8.11. Fraud. In the case of fraud by any party in the making
of representations and warranties, the other parties shall have all remedies
available at law and at equity without giving effect to any of the limitations
set forth in Section 8.8 or Section 8.9.
SECTION 8.12. Knowledge Prior to Closing. For purposes of this Article
VIII, neither party hereto shall be deemed to have breached any representation
or warranty if (a) such party shall have notified the other party hereto in
writing, on or prior to the Closing Date, of such breach or of any facts or
circumstances constituting or resulting in such breach, (b) such party had
Knowledge of such breach, facts, or circumstances on or prior to the date of
this Agreement, and (c) as a result of all such breaches collectively, the
conditions to the other party's or parties' obligations to consummate the
Closing set forth in Section 4.1 or 5.1, as the case may be, are not satisfied.
SECTION 8.13. Exclusivity. The indemnification provided by this
Article VIII shall be the sole remedy (other than termination of this Agreement
pursuant to Article IX and except
as provided in Section 8.11) for any of the matters referred to in this Article
VIII; provided, that this Section 8.13 shall not prohibit injunctive relief if
available under applicable Law.
SECTION 8.14. Environmental Matters. (a) If any Purchaser Indemnified
Party shall become aware of any condition or circumstance which may require
Remedial Work relating to a Sellers' Environmental Condition, it shall give
prompt notice thereof (an "Environmental Claim Notice") to the Sellers as
contemplated by Section 8.3. Any Environmental Claim Notice must describe with
specificity the conditions or circumstances giving rise to such notice.
(b) Subject to the provisions of this Section 8.14, (i) the Sellers
shall be liable for all costs and expenses of Sellers' Remedial Work and any
Losses arising from the performance by the Sellers of any Remedial Work and (ii)
the Purchaser shall be liable for all Remedial Work relating to any Purchaser
Environmental Condition and for any Remedial Work relating to any Sellers'
Environmental Condition which does not constitute Sellers' Remedial Work.
(c) The Sellers shall have the right, by notice (the "Environmental
Defense Notice") given within 30 days of receipt of an Environmental Claim
Notice, to elect to conduct any Remedial Work relating to the matters set forth
in such Environmental Claim Notice; provided, that the giving of an
Environmental Defense Notice shall not constitute an admission that any such
Remedial Work is Sellers' Remedial Work. If the Sellers shall give an
Environmental Defense Notice, the Sellers shall promptly commence such Remedial
Work. If the Sellers do not give an Environmental Defense Notice within such
30-day period, the Purchaser shall promptly commence such Remedial Work. The
Sellers shall be deemed to have given hereby an Environmental Defense Notice
with respect to any Remedial Work currently on-going or related to the removal
of the boiler house/chimney stack as required by Section 6.20.
(d) The Sellers and their agents shall have reasonable access to the
Plants for the purpose of performing any Remedial Work to be performed by the
Sellers in accordance with this Section 8.14. The Sellers shall have the right
to bring such equipment and vehicles onto the Plants as are necessary for
efficient performance of such Remedial Work. The Purchaser shall not make any
alterations or additions to the Owned Property which would interfere with any
Remedial Work then being performed by the Sellers other than as may be required
by Law.
(e) The party performing any Remedial Work pursuant to this Section
8.14 (the "Performing Party") shall perform such Remedial Work in a commercially
reasonable manner, with contractors having appropriate experience in and all
necessary permits for such matters, in compliance with all Environmental and
Safety Requirements, and in compliance with this Section 8.14. If the Sellers
shall be the Performing Party, they shall perform such Remedial Work in such a
manner as to minimize, to the extent commercially practicable, interference with
the conduct of the Purchaser's business at the Plants.
(f) Each party shall provide the other with copies of all environmental
audits, sampling results, and assessments relevant to any Environmental Claim
Notice or Remedial Work. Prior to the commencement of any Remedial Work by a
Performing Party, the other party (the "Nonperforming Party") shall notify the
Performing Party of any conditions known to the Nonperforming Party which could
reasonably be expected to have a material effect on such Remedial Work.
(g) If a Performing Party shall conduct any Remedial Work, and it is
subsequently determined (by agreement between the parties or by a judgment not
subject to further appeal)
that the Nonperforming Party was responsible in accordance with this Section
8.14 for all or a portion of the Losses related thereto, the Nonperforming Party
shall pay such Losses with interest thereon (from the date the Performing Party
paid such amounts to the date of payment by the Nonperforming Party) at the
Prime Rate.
(h) The Purchaser shall control all communications with Governmental
Entities regarding Environmental Conditions at the Plants, except to the extent
the Sellers are required by Law to make such communications. Each party shall
provide to the other copies of all such written communications received from or
made to any Governmental Entity, except as may be required by Law. Prior to
making any such written communication to any Governmental Entity, each party
shall, to the extent reasonably practicable under the circumstances and required
response times and to the extent permitted by Law, provide drafts thereof to the
other party and shall in good faith consider the comments thereon of such other
party. In no case shall either party be liable for any Remedial Work to which
the other party, in any such communication, commits or admits liability, unless
such party has consented to such admission of liability (which consent shall not
be unreasonably withheld) or so committing or admitting liability was otherwise
commercially reasonable under the circumstances and after due consideration of
the objections thereto of the party not making such communication.
(i) The obligations set forth in this Section 8.14 shall not be subject
to Section 8.8 (except for Section 8.8(f)).
SECTION 8.15. Contribution. If the indemnification provided for in
Section 8.1(h) or 8.2(f) is unavailable to an Indemnified Party in respect of
any Losses referred to therein, then each Indemnifying Party which would
otherwise be liable under such Section 8.1(h) or
8.2(f), in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable to such Indemnified Party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of each
Indemnifying Party on the one hand and the Indemnified Party on the other hand
in connection with the statements or omissions which resulted in such Losses,
and any other relevant equitable considerations. The relative fault of each
Indemnifying Party on the one hand and the Indemnified Party on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statements of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by an Indemnifying
Party or such Indemnified Party and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission.
ARTICLE IX
TERMINATION
SECTION 9.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written consent executed by the Purchaser and
the Sellers;
(b) by either the Purchaser or the Sellers, in writing,
without liability to the terminating party on account of such
termination (providing the terminating party is not otherwise in
default or in breach of this Agreement) if (i) any of the conditions
to its obligations under Article IV or Article V of this Agreement, as
the case may be, shall
not have been satisfied or waived in writing by such party, (ii) the
other party shall have failed to perform in any respect its covenants
or agreements contained herein required to be performed prior to the
Closing, or shall have breached any of its representations or
warranties contained herein, in each instance exclusive of such
breaches which in the aggregate would not be reasonably likely to give
rise to Losses in excess of $500,000 (and provided that the terminating
party shall afford the other party at least five business days notice
of and opportunity to cure such breach), or (iii) if the Closing shall
not have occurred for any reason on or before November 1, 1995, unless
the failure of such conditions to be satisfied or the Closing to take
place on or before such time is attributable to the breach by the
terminating party of its obligations to consummate the transactions
contemplated hereby or of any of its other obligations hereunder; or
(c) by either party, in writing, without liability, if the
purchase of the Assets contemplated hereby shall violate any
non-appealable final order, decree, or judgment of any Governmental
Entity having competent jurisdiction or if there shall be a statute,
rule, or regulation that makes such purchase illegal or otherwise
prohibited.
SECTION 9.2. Effect of Termination. Upon any termination of this
Agreement pursuant to Section 9.1, neither of the parties shall have any
liability or obligation to the other arising out of this Agreement except for
any liability arising from a party's breach of this Agreement prior to such
termination (provided that, for purposes of this Section 9.2, no party shall be
deemed to have breached a representation or warranty if Sections 8.12(a) and (b)
have been satisfied with respect to such breach); provided that the provisions
of Sections 6.1 and
6.2, this Section 9.2, Article XI, and the Confidentiality Agreement shall
survive such termination.
ARTICLE X
DEFINITIONS
SECTION 10.1. Defined Terms. The following terms shall have the
following meanings as used in this Agreement:
"Accounting Methodology" shall mean the accounting principles and
procedures described on Schedule 1.8(g) hereto.
"ADA" shall mean the Americans with Disabilities Act, 42 USCA 1210, et
seq., and the rules and regulations promulgated thereunder.
"Affiliate" shall mean, as to a specified Person, any Person
controlling, controlled by, or under common control with such specified Person.
For purposes of this definition, "control," including the terms "controlling"
and "controlled," means the power to direct or cause the direction of the
management and policies of a Person, directly or indirectly, whether through the
ownership of securities of partnership or other ownership interests, by
contract, or otherwise.
"Agreement" shall mean this Asset Purchase Agreement and all Schedules
and Exhibits hereto.
"Approvals" means all permits, licenses, registrations, and approvals
of or from Governmental Entities necessary for the operation of the Plants and
sale of the Products as presently conducted, including, without limitation,
those listed on Schedules 2.2, 3.2, and 6.7.
"Assets" shall have the meaning specified in Section 1.2.
"Assigned Contracts" shall mean, collectively, the agreements listed on
Schedule 1.2(m), the Chi-Chi's/Xxxxxxxxxxx'x Licenses, the Customer Orders, and
the Purchase Orders.
"Assumed Liabilities" shall have the meaning specified in Section 1.5.
"Barrel Agreement" shall have the meaning specified in Section 4.6.
"Xxxxxx Guaranty" shall have the meaning specified in Section 5.6.
"Book Value" of any Assets, as of any date on or prior to the Closing
Date, shall mean the net value on such date of such Assets as determined in
accordance with generally accepted accounting principles consistently applied by
the Sellers (except as otherwise noted in the Accounting Methodology) on the
basis of the information contained in the internal books and records of the
Sellers.
"Book Value Adjustment" shall mean the sum of the Adjustments, where
"Adjustments" means (i) with respect to Plants and Manufacturing Equipment, (A)
the Book Value as of the Closing Date of any Manufacturing Equipment added
subsequent to the date of this Agreement in conformity with the representations
and covenants contained herein minus (B) the sum of the reductions for casualty,
loss, or disposition of such items and the per diem adjustments for depreciation
as set forth on Schedule 1.8(g), in each case from the date set forth on
Schedule 1.8(g) to the Closing Date, (ii) with respect to Prepaid Expenses, (A)
the cost of any Prepaid Expenses made subsequent to the date of this Agreement
in conformity with the representations and covenants contained herein minus (B)
the per diem adjustments for amortization as set forth on Schedule 1.8(g) from
the date set forth on Schedule 1.8(g) (or, in the case of Prepaid Expenses made
subsequent to the date of this Agreement, from the date made) to the Closing
Date, and (iii) with respect to Inventory, the value of such Inventory, based on
the values for each Merchantable unit established using the Accounting
Methodology minus $17,497,425.
The Book Value Adjustment may be a positive or a negative number.
"Book Value Calculation" shall have the meaning specified in Section
1.8(a).
"Bottling Agreement" shall have the meaning specified in Section 4.6.
"Xxxxxx Agreement" shall have the meaning specified in Section 4.6.
"Business" shall mean the manufacture, sale, and distribution of the
Products and the operation, ownership, and use of the Assets.
"California Agreement" shall have the meaning specified in Section 4.6.
"Canadian Whisky Agreements" shall have the meaning specified in
Section 4.6.
"Chase" shall mean The Chase Manhattan Bank (National Association).
"Chi-Chi's/Xxxxxxxxxxx'x Licenses" shall have the meaning specified in
Section 1.2(c).
"Chi-Chi's/Xxxxxxxxxxx'x Licensors" shall mean the licensors under the
Chi-Chi's/Xxxxxxxxxxx'x Licenses.
"Chi-Chi's/Xxxxxxxxxxx'x Trademarks" shall have the meaning specified
in Section 1.2(c).
"Chi-Chi's Requirements" shall mean the requirements for transfer of
the Chi-Chi's/Xxxxxxxxxxx'x License related to the "Chi-Chi's" trademarks, as
described on Schedule 1.2(c)-1.
"Clarendon" shall mean Clarendon Flavor Engineering, a division of
United Distillers Manufacturing, Inc.
"Clarendon Lease" shall have the meaning specified in Section 4.6.
"Closing" shall have the meaning specified in Section 7.1.
"Closing Adjustment" shall mean the Book Value Adjustment minus the
Estimated Book Value Adjustment. The Closing Adjustment may be a positive or
negative number.
"Closing Amount" shall have the meaning specified in Section 1.7(b).
"Closing Date" shall mean the date of the Closing.
"Closing Statement" shall have the meaning specified in Section 1.8(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
all regulations promulgated thereunder.
"Collective Bargaining Agreements" shall mean the Assigned Contracts
identified on Schedule 1.2(m) as collective bargaining agreements.
"Commitment Letter" shall mean the commitment letter from Chase to
provide financing for the Purchaser's payment of the Purchase Price as referred
to in Section 3.4.
"Confidentiality Agreement" shall mean the agreements dated October 18,
1994 and January 13, 1995 between UDG and the Purchaser.
"Container Licenses" shall have the meaning specified in Section 1.4.
"Contract" shall mean any written contract, agreement, instrument,
lease, or license. "Corn Whiskey Agreement" shall have the meaning specified in
Section 4.6.
"Customer Order" shall mean a bona fide order from an unaffiliated
customer evidenced by a purchase order given in accordance with the Sellers'
customary practices in the ordinary course of business.
"Defense Counsel" shall have the meaning specified in Section 8.3.
"Defense Notice" shall have the meaning specified in Section 8.3.
"Direct Claim" shall have the meaning specified in Section 8.4.
"Distributors" shall mean the distributors, wholesalers, and brokers of
the Products in the United States as sold by the Sellers.
"Employee Pension Plan" shall mean any (i) nonqualified deferred
compensation or retirement plans or arrangements which are "employee pension
benefit plans," as defined in Section 3(2) of ERISA, whether or not terminated,
including, but not limited to, any excess benefit plan, top hat plan, or
deferred compensation plan, or (ii) qualified defined contribution or defined
benefit arrangements which are employee pension benefit plans, in each case
which any Seller or any Plan Affiliate of any Seller has at any time within the
past six years maintained or made contributions to or had any other liability
with respect to, and in each case on behalf of or with respect to Plan
Beneficiaries.
"Employee Plan" shall mean any Employee Welfare Plan, Employee Pension
Plan, or Other Plan.
"Employee Welfare Benefit Plan" shall mean any plan or program
maintained or sponsored by the Purchaser which would be an Employee Welfare Plan
if maintained or sponsored by the Sellers.
"Employee Welfare Plan" shall mean any employee welfare benefit plan,
as defined in Section 3(1) of ERISA, whether or not terminated, including, but
not limited to, any severance agreement or plan, any material fringe benefit
plan or program, any medical plan, life insurance plan, short-term or long-term
disability plan, dental plan, personnel policy, vacation time, holiday pay,
bonus programs, service award, moving expense reimbursement program, tool
allowance, safety equipment allowance, and sick leave, which any Seller or any
Plan Affiliate
of any Seller has at any time within the past six years maintained, made
contributions to, obligated itself to make contributions to, or had any other
liability with respect to, in each case on behalf of or with respect to Plan
Beneficiaries.
"Environmental and Safety Requirements" shall mean all Laws relating to
public health and safety, worker health and safety, and pollution and protection
of the environment (including, but not limited to, soil, land surface and
subsurface, surface waters, ground water, drinking water supply, stream
sediments, ambient air, plant and animal life, and any other environmental
medium), all as amended or reauthorized, or hereafter amended or reauthorized.
"Environmental Claim Notice" shall have the meaning specified in
Section 8.14.
"Environmental Condition" shall mean any matter relating to the
presence, release, use, generation, discharge, storage, treatment, or disposal
of Hazardous Materials, at or affecting the Plants, or the transportation of
Hazardous Materials to or from the Plants, or the disposal of Hazardous
Materials generated or utilized by the Plants.
"Environmental Defense Notice" shall have the meaning specified in
Section 8.14.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Book Value Adjustment" shall have the meaning specified in
Section 1.7(b).
"Estimated Purchase Price" shall have the meaning specified in Section
1.7(a).
"Estoppel Certificates" shall mean estoppel certificates from each
Chi-Chi's/Xxxxxxxxxxx'x Licensor, in the forms previously provided by the
Purchaser to the Sellers, subject to such modifications as may be requested by
the respective Chi-Chi's/Xxxxxxxxxxx'x Licensor and are reasonably acceptable to
the Purchaser.
"Excluded Assets" shall have the meaning specified in Section 1.3.
"Excluded Liabilities" shall have the meaning specified in Section 1.6.
"Finished Goods Inventory" shall have the meaning specified in Section
1.2(h).
"Fit for Consumption" shall mean fit for human consumption as an
alcoholic beverage.
"Flavoring Supply Agreement" shall have the meaning specified in
Section 4.6.
"Foreign Trademarks" shall have the meaning specified in Section
1.2(b).
"Formulae" shall have the meaning specified in Section 1.2(d).
"FRPTA" shall mean the Foreign Investment Real Property Transfer Act.
"General Claim" shall mean any claim for indemnification under Section
8.1(a)(i) or Section 8.2(a)(i) other than a Special Claim or Indefinite Claim.
"Governmental Entity" shall mean any Federal, state, local, or other
governmental authority or administrative agency or any court or other tribunal,
domestic or foreign.
"Governmental Filings" shall mean such filings or recordings of the
assignments of the Trademarks and the rights in the Chi-Chi's/Xxxxxxxxxxx'x
Trademarks and such other filings as may be required to be made in connection
with this Agreement and the transactions contemplated hereby pursuant to
applicable Laws affecting the transactions contemplated hereby or relating to
the production, marketing, sale, and distribution of alcoholic beverages.
"Grant Programs" shall mean contracts, arrangements, or understandings
with Distributors regarding offers of special purchase allowances, post-offs,
other off-invoice discounts, depletion allowances, entity grants, or other
similar forms of promotional allowances, in each case with respect to the
Products.
"Guinness Guaranty" shall have the meaning specified in Section 4.6.
"Guinness 401(k) Plan" shall mean The Guinness America Employees
Savings Plan.
"Hazardous Materials" shall mean (i) hazardous substances or hazardous
wastes, as those terms are defined by the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. xx.xx. 9601 et seq. and the
regulations promulgated thereunder, the Resource Conservation and Recovery Act,
42 U.S.C. xx.xx. 6901 et seq. and the regulations promulgated thereunder, and
any other Environmental and Safety Requirements; (ii) any pollutant or
contaminant or hazardous, dangerous, or toxic chemical, waste, material, or
substance within the meaning or scope of any Environmental and Safety
Requirements; (iii) any petroleum product or by-product, including, without
limitation, crude oil or any fraction thereof which is liquid at standard
conditions of temperature and pressure (60 degrees Fahrenheit and 14.7 pounds
per square inch absolute); (iv) any radioactive material, including, without
limitation, any source, special nuclear, or by-product material as defined in 42
U.S.C. xx.xx. 2011 et seq.; (v) asbestos in any form or condition; and (vi)
polychlorinated biphenyls.
"Heaven Hill Products" shall mean the products manufactured by any
Seller or any of their Affiliates under the Viking Bottling Agreement, dated as
of January 29, 1993, between Guinness America, Inc., an Affiliate of the
Sellers, and Heaven Hill Distilleries, Inc.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the regulations promulgated thereunder.
"Indefinite Claim" shall mean any claim for indemnification under (i)
Section 8.1(a)(i) relating to any breach of any representation or warranty of
the Sellers relating to the Sellers' title to Assets, (ii) Section 8.1(a)(ii),
8.1(a)(iii), 8.1(a)(iv), 8.1(a)(v), 8.1(a)(vi), 8.2(a)(ii),
8.2(a)(iii), or 8.2(a)(iv), (iii) Section 8.1(b), 8.1(c), 8.1(d), 8.1(e),
8.1(f), 8.1(h), 8.1(i), or (iv) Section 8.2(b), 8.2(c), 8.2(d), 8.2(e), or
8.2(f) hereof, or (v) Section 8.14.
"Indemnified Party" shall have the meaning specified in Section 8.3.
"Indemnifying Party" shall have the meaning specified in Section 8.3.
"Intellectual Property" shall have the meaning specified in Section
1.2(k).
"Inventory" shall mean the Finished Goods Inventory, the Materials
Inventory, and the Literature, collectively.
"IRS" shall mean the Internal Revenue Service.
"Knowledge," "known to," or "aware of," or a similar phrase with
respect to (i) the Sellers shall mean the actual knowledge, after due inquiry
(except that, where Knowledge is stated to be without investigation, such
inquiry shall not include (A) any inquiry of persons other than employees,
agents, counsel, or accountants of the Sellers and their Affiliates or (B) any
Uniform Commercial Code, trademark, patent, or other searches of records of
Governmental Entities), as of the date of this Agreement or of any certificate
delivered pursuant hereto of the individuals listed on Schedule K-1, or any of
them individually (provided, that the knowledge of the persons listed as "key
employees" on Schedule 2.14 shall in no event be included as "Knowledge" of the
Sellers for purposes of the last sentence of Section 2.14), and (ii) the
Purchaser shall mean the actual knowledge, after due inquiry (except where
Knowledge is stated to be without investigation), as of the date of this
Agreement or of any certificate delivered pursuant hereto of the individuals
listed on Schedule K-2, or any of them individually.
"Laws" shall mean all laws, statutes, regulations, codes, ordinances,
rules, policies, guidelines, interpretations, directives, writs, injunctions,
decrees, and orders of or promulgated by any Governmental Entity.
"Licenses" shall have the meaning specified in Section 1.4.
"Lien" shall mean any lien, charge, claim, option, pledge,
hypothecation, assessment, license, mortgage, encumbrance, security interest,
easement, or similar restriction.
"Literature" shall have the meaning specified in Section 1.2(j).
"Losses" shall mean any losses, liabilities (whether contingent, fixed
or unfixed, liquidated or unliquidated), claims, damages, assessments, costs, or
expenses (including, without limitation, interest, fines, penalties, actual or
punitive damages, and reasonable legal and other professional fees and expenses
of investigating or defending any claims).
"Manufacturing Equipment" shall have the meaning specified in Section
1.2(g).
"Material Contract" shall mean any Contract pertaining to the Business
which requires or results in annual payments by or to the Sellers of more than
$50,000 or is not terminable on less than 90 days notice with payments of less
than $50,000.
"Material Required Consent" shall mean any Required Consent identified
as material on Schedule 1.2(m), Schedule 2.2, or Schedule 3.2.
"Materials Inventory" shall have the meaning specified in Section
1.2(i).
"MD&A Materials" shall mean the materials to be provided pursuant to
Section 6.14 which are identified as "MD&A Materials" on Schedule 6.14.
"Medley Agreements" shall have the meaning specified in Section 4.6.
"Merchantable" shall mean have the meaning set forth on Schedule
1.8(g).
"Mr. Boston Contract" shall mean the Agreement, dated as of January 1,
1993, as amended November 15, 1994, between UDG and Warner Books, Inc. relating
to the Mr. Boston Copyright.
"Mr. Boston Copyright" shall mean the copyrights for the Mr. Boston
Official Bartender's Guide and Mr. Boston Official Bartender's and Party Guide,
in all versions and media.
"New Employees" shall mean (i) all Union Employees and (ii) all active
Non-Union Employees of the Sellers at the Owensboro and Viking facilities who
become employees of the Purchaser immediately following the Closing and all
inactive Non-Union Employees of the Sellers at the Owensboro and Viking
facilities who become active employees of the Purchaser after the Closing and
who were inactive on the Closing for reasons of earned vacation, temporary
illness not constituting short or long term disability, leave of absence or
short or long term disability; provided, however, that in the case of a
Non-Union Employee who is not an active employee on the Closing due to short (as
provided pursuant to the United Distillers Manufacturing, Inc. Human Resources
Policies and Procedures) or long term disability, he or she becomes an active
employee of the Purchaser prior to the 91st day of such disability.
"Nonperforming Party" shall have the meaning specified in Section 8.14
"Non-Union Employees" shall mean the employees of the Sellers at the
Plants who are
not covered by the Collective Bargaining Agreements.
"Orders" shall mean all Customer Orders relating to the Products which
have been received by the Sellers but have not been shipped, and all Purchase
Orders relating to the
Products which have been given by the Sellers but have not been received, in
each case as of the Closing Date; provided, that Orders shall not include any
purchase orders for Scotch.
"Other Agreements" shall mean the agreements to be entered into at
Closing referred to in Section 4.6 or Section 5.6.
"Other Intellectual Property" shall have the meaning specified in
Section 2.7(b).
"Other Plan" shall mean any plan, policy, program, arrangement, or
agreement, including, but not limited to, any bonus or incentive plan, stock
options, restricted stock, stock bonus, deferred bonus plan, salary reduction
agreement, change-of-control agreement, employment agreement, or consulting
agreement with a former employee (in each case, which is not an Employee Pension
Plan or Employee Welfare Plan), which any Seller or any Plan Affiliate of any
Seller has at any time within the past six years maintained, made contributions
to, obligated itself to make contributions to, or had any other liability with
respect to, in each case for the benefit of or with respect to Plan
Beneficiaries.
"Owned Property" shall mean the real property at the Plants (other than
property leased under the Assigned Contracts), as described on Schedule 1.2(f).
"Parent" shall mean Canandaigua Wine Company, Inc., a Delaware
corporation, which directly or indirectly owns all of the capital stock of the
Purchaser.
"PBGC" shall mean Pension Benefit Guaranty Corporation.
"Performing Party" shall have the meaning specified in Section 8.14.
"Permits" shall mean notifications, licenses, permits (including,
without limitation, environmental, construction, and operation permits),
franchises, certificates, approvals,
exemptions, classifications, registrations, and other similar documents and
authorizations, and applications therefor, issued by, or submitted to, any
Governmental Entity.
"Permitted Encumbrance" shall mean any Liens (i) created under the
terms of, or by operation of law in connection with, any of the Assigned
Contracts, (ii) created by or through the Purchaser, (iii) relating to any taxes
or other governmental charges or levies that are not yet due and payable or
which are being contested in good faith by appropriate proceedings and which
have been or will be disclosed in writing to the Purchaser, (iv) the
encumbrances of the bailment of any state of the United States, (v) that is or
is related to one of the Assumed Liabilities, (vi) in the nature of easements or
restrictions on real property that in the aggregate do not materially detract
from the value or impair the use of the properties or assets subject thereto or
the operations of the Business, (vii) with respect to the Owned Property, are
set forth in Section II of Schedule B to either of the Title Commitments or on
either of the Surveys.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, limited liability partnership, joint venture, trust,
unincorporated association, corporation, or entity, including any Governmental
Entity.
"Plan Affiliate" of any Person shall mean any other Person with whom
such Person constitutes all or part of a controlled group, or which would be
treated with such Person as under common control, or whose employees would be
treated as employed by such Person, under Section 414 of the Code and any
regulations, administrative rulings, and case law interpreting the foregoing.
"Plan Beneficiaries" shall mean the Plant Employees and their
beneficiaries and dependents.
"Plants" shall have the meaning specified in Section 1.2(f).
"Plant Employee" means any current or former employee of the Sellers
at the Plants.
"Prepaid Expenses" shall have the meaning specified in Section 1.2(o).
"Prime Rate" shall mean the rate of interest announced from time to
time by Chase as its prime or base rate.
"Product Liability Claims and Liabilities" shall mean claims against or
liabilities of the Sellers relating to personal injury or property damage
involving the Products.
"Products" shall mean the products marketed as of the date of this
Agreement and as of the Closing under the Trademarks and the
Chi-Chi's/Xxxxxxxxxxx'x Trademarks.
"Promotional Programs" shall mean programs to provide special display,
packaging, or point-of-sale promotional materials to retailers of the Products.
"Purchase Order" shall mean a bona fide order to an unaffiliated
supplier evidenced by a purchase order given in accordance with the Sellers'
customary practices in the ordinary course of business.
"Purchase Price" shall have the meaning specified in Section 1.7(a).
"Purchaser" shall have the meaning specified in the preamble hereto.
"Purchaser Documents" shall mean the documents, instruments, and
agreements (other than the Licenses and the Other Agreements) to be executed and
delivered by the Purchaser pursuant to Section 7.3.
"Purchaser Environmental Condition" shall mean any Environmental
Condition which is not a Sellers' Environmental Condition.
"Purchaser Indemnified Parties" shall mean the Purchaser, its
Affiliates, its officers, directors, employees, and agents, and its fiduciaries,
plan administrators, and other parties dealing with its employee benefit plans.
"Purchaser Plan" shall mean the Xxxxxx Incorporated Employees'
Profit-Sharing and 401(k) Plan or, in the case of the Union Employees, such
"employee pension benefit plan" (as defined in Section 3(2) of ERISA) as may be
established by the Purchaser pursuant to the Collective Bargaining Agreements.
"Purchaser Subsidiary" shall mean any subsidiary of the Purchaser which
enters into any License or Other Agreement in accordance with Section 11.6.
"Purchaser's Accountants" shall mean Xxxxxx Xxxxxxxx LLP.
"Rebate Programs" shall mean programs offering to consumers of the
Products rebates, claimed by delivering to the Sellers (or, following the
Closing, the Purchaser) or their agents coupons or tickets and proofs of
purchase.
"Records" shall have the meaning specified in Section 1.2(p).
"Remedial Work" shall mean any remedial work, including any preliminary
investigation or analyses, removal, remediation, cleanup, or post-remedial
monitoring and reporting, required by any Environmental and Safety Requirements,
and the obtaining of any Permits.
"Required Consents" shall mean consents with respect to the Assigned
Contracts as indicated on Schedule 1.2(m) and such other consents as are listed
in Schedule 2.2.
"Schenley License" shall have the meaning specified in Section 1.4.
"Scotch Whisky Agreement" shall have the meaning specified in Section
4.6.
"SEC Financials" shall mean the materials to be provided pursuant to
Section 6.14 which are identified as "SEC Financials" on Schedule 6.14.
"Securities Acts" shall mean the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
"Seller" or "Sellers" shall have the meaning specified in the preamble
hereto.
"Seller Affiliates" shall mean the Affiliates of the Sellers which are
to execute and deliver Other Agreements.
"Seller Indemnified Parties" shall mean the Sellers, their Affiliates,
the Sellers' officers, directors, employees, and agents, and the Sellers'
fiduciaries, plan administrators, and other parties dealing with the Sellers'
employee benefit plans.
"Sellers' Accountants" shall mean Price Waterhouse LLP.
"Sellers' Environmental Condition" shall mean
(i) any matter referred to in Schedule 2.16(a), other than
item 3 on Schedule 2.16(a) (whether or not listed on Schedule 2.16(b)),
(ii) any violation of any Environmental and Safety
Requirements arising from the existence and operation prior to the
Closing Date of the tanks referred to in item 2 of Schedule 2.16(b);
(iii) item 5 of Schedule 2.16(b),
(iv) any asbestos which the Sellers have Knowledge is
friable at the Closing Date (whether or not listed on Schedule
2.16(b)),
(vi) any Environmental Condition not listed on Schedule
2.16(a) or Schedule 2.16(b) (A) of which the Sellers have Knowledge and
which constitutes a violation of
any Environmental and Safety Requirement, (B) which arises from any
operations or business prior to the Closing Date other than the
operation, by the Sellers or any predecessor owner or operator of
either Plant, of a business which manufactures liquor products, (C)
which arises from the release, discharge, storage, treatement,
transportation, or disposal prior to the Closing Date of Hazardous
Materials generated or used by the Plants, or (D) relates to a
property previously owned by the Sellers or their Affiliates or any of
their predecessors. "Sellers' Remedial Work" shall mean any Remedial
Work relating to any Sellers' Environmental Condition; provided, that
Sellers' Remedial Work shall not include any Remedial Work (i)
performed or committed to by any Purchaser Indemnified Party prior to
the expiration of the period in which the Sellers are entitled to give
an Environmental Defense Notice (other than Remedial Work which could
not reasonably have been delayed to the end of such period), (ii) if
performed by the Sellers, other than as needed to meet the minimum
standards of applicable Environmental and Safety Requirements, or
(iii) if performed by the Purchaser, other than as needed to meet the
standards of commercial reasonableness or applicable Environmental and
Safety Requirements.
"Services Agreements" shall have the meaning specified in Section 4.6.
"Special Claim" shall mean any claim for indemnification under Section
8.1(a)(i) relating to any breach of any representation or warranty of
the Sellers contained in Section 2.15 or 2.24.
"Statement Date" shall mean December 31, 1994.
"Surveys" shall mean the surveys of the Owned Property attached as
Schedule S.
"Taxes" shall mean all taxes of any kind, including, without
limitation, those on, or measured by or referred to as, income, gross receipts,
sales, use, ad valorem, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, or windfall
profits taxes, customs duties, or similar fees, assessments, or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax,
or additional amounts imposed by any taxing authority, domestic or foreign.
"Tax Reports" shall mean all tax reports relating to the Business
required to be filed under applicable Law, including, without limitation, all
such Federal, state, county, and city tax reports relating to spirits in bonded
warehouses, tangible personal property taxes, excise taxes, records of gauge for
tax determination and removal of bulk spirits from bond, claims for drawback,
monthly wine reports, monthly reports of distillers, rectifiers, or bottles,
customs duties, and income, business, occupation, sales, use, ad valorem,
vehicle, and similar taxes and duties.
"Terminated Foreign Distributor Agreements" shall have the meaning
specified in Section 6.9(b).
"Third Party Claim" shall have the meaning specified in Section 8.3.
"Threshold Amount" shall mean $1,000,000.
"Title Commitments" shall mean the title commitments with respect to
the Owned Property attached as Schedule T, including the endorsements thereto.
"Title Company" shall mean Chicago Title Insurance Company.
"Title Policies" shall mean title policies for the Owned Property
issued in accordance with and substantially in the form of the Title
Commitments.
"Trademarks" shall mean, collectively, the U.S. Trademarks and the
Foreign Trademarks.
"Trade Names" shall have the meaning specified in Section 1.2(n).
"Transfer Documents" shall mean the documents, instruments, and
agreements (other than the Licenses and the Other Agreement) to be executed and
delivered by the Sellers pursuant to Section 7.2.
"Transferred Molds" shall have the meaning specified in Section 1.2(q).
"Transferring Employees" shall mean those employees of the Sellers
employed by a Seller on the Closing Date and who are either listed on Schedule
2.21 or are current Union Employees and those additional employees who become
employed by a Seller in the ordinary course of business during the time period
from the date of this Agreement to the Closing (provided, that any such
additional employee which is a Non-Union Employee shall be a Transferring
Employee only if he or she was hired or assigned to the Plants as a replacement
for a Transferring Employee whose employment was terminated by such employee or
the Sellers and at compensation not materially greater than such terminated
employee received).
"UDG" shall have the meaning specified in the preamble hereto.
"UDMI Plan" shall mean the United Distillers Manufacturing, Inc.
401(k) Profit Sharing Plan.
"UD Records" shall mean all records of the Sellers at the Plants, other
than the Records, of the types listed on Schedule U.
"Unaffiliated Firm" shall mean the accounting firm selected in
accordance with Section 1.8.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
enacted in the respective jurisdictions in which the Assets or the Sellers are
located.
"Union Employees" shall mean the employees at the Plant who are covered
by the Collective Bargaining Agreements.
"United States" shall mean only the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx
Xxxxxxx and the District of Columbia.
"U.S. Trademarks" shall have the meaning specified in Section 1.2(a).
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.1. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, by
Federal Express, Express Mail, or similar overnight delivery or courier service,
or by confirmed telecopy, or mailed, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to the Purchaser, to
Xxxxxx Incorporated
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Vice President and
General Counsel
Facsimile: (000) 000-0000
with a copy to
Canandaigua Wine Company, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Executive Vice President,
General Counsel and
Secretary
Facsimile: (000) 000-0000
(b) if to the Sellers, to
United Distillers Glenmore, Inc.
Six Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxx X. XxXxxxxx
Senior Vice-President,
Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to
Duane, Morris & Heckscher
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Any notice or other communication given by certified mail or confirmed telecopy
shall be deemed given at the time of certification or confirmation thereof,
except for a notice changing a party's address which will be deemed given at the
time of receipt thereof. Any notice given by other means permitted by this
Section 11.1 shall be deemed given at the time of receipt thereof.
SECTION 11.2. Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
SECTION 11.3. Entire Agreement; No Third Party Beneficiaries. This
Agreement (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (b) except as provided in Section 6.21,
Article VIII, and Section 11.6, is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
SECTION 11.4. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York, without giving
effect to conflicts of laws.
SECTION 11.5. Publicity; Confidentiality. Neither the Sellers nor the
Purchaser shall issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated by this
Agreement or the terms of this Agreement without the consent of the other party,
which consent shall not be unreasonably withheld or delayed, and except as
required by applicable Law. In the event that the Sellers, the Purchaser, or
their respective Affiliates become legally compelled to disclose any information
concerning the transactions contemplated by this Agreement, the compelled party
shall provide the other with prompt written notice. Each party agrees to
disclose only that portion of the information which is legally required to be
disclosed and will exercise its commercially reasonable efforts to obtain
assurance that confidential treatment will be afforded such information to the
fullest extent possible.
SECTION 11.6. Assignment. Neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned by either party
hereto without the prior written consent of the other party; provided, that the
rights but not obligations of any party herein may
be assigned to one or more of such party's Affiliates; and provided further that
the Purchaser may assign any of its rights to purchase any Assets, and its
rights and obligations to enter into any of the Licenses or Other Agreements, to
any Purchaser Subsidiary. This Agreement will be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective permitted
successors and assigns.
SECTION 11.7. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 11.8. Partial Invalidity. If any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provisions
hereof.
SECTION 11.9. Waiver and Amendment. The waiver by the Sellers or the
Purchaser of any breach of, or failure to comply with, any provision of this
Agreement shall not be construed as or constitute a continuing waiver of such
provision or a waiver of any other breach of or failure to comply with any
provision of this Agreement. No waiver, amendment, or modification of any
provision of this Agreement shall be effective unless specifically made in
writing and signed by the party against whom the enforcement of such waiver,
amendment, or modification is sought.
SECTION 11.10. Jurisdiction, Venue, and Service of Process. Each party
hereto hereby irrevocably consents to the exclusive jurisdiction and venue of
the courts of the State of New York and of any Federal court located in such
State in connection with any action or proceeding arising out of or relating to
this Agreement, any document or instrument delivered
pursuant to, in connection with, or simultaneously with this Agreement, or a
breach of this Agreement or any such document or instrument.
SECTION 11.11. No Set-Off. Any payment required to be made
pursuant to this Agreement shall be paid without any set-off, counterclaim, or
deduction any party may have against the other.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized, all as of the date first
written above.
XXXXXX INCORPORATED
By:____/s/Xxxx X. Martell_____
Name: Xxxx X. Xxxxxxx
Title: Vice Pres.
UNITED DISTILLERS GLENMORE, INC.
By:___/s/ Xxxxx X. McMorrow___
Name: Xxxxx X. XxXxxxxx
Title: Sr. Vice Pres.
SCHENLEY INDUSTRIES INC.
By:___/s/ Xxxxx X. McMorrow___
Name: Xxxxx X. XxXxxxxx
Title: Vice Pres.
MEDLEY DISTILLING COMPANY
By:___/s/ Xxxxx X. McMorrow___
Name: Xxxxx X. XxXxxxxx
Title: Vice Pres.
UNITED DISTILLERS
MANUFACTURING, INC.
By:___/s/ Xxxxx X. McMorrow__
Name: Xxxxx X. XxXxxxxx
Title: Vice Pres.
THE VIKING DISTILLERY, INC.
By:___/s/ Xxxxx X. McMorrow___
Name: Xxxxx X. XxXxxxxx
Title: Vice Pres.
l
LIST OF SCHEDULES
Description
Schedule I Sellers
Schedule 1.2(a)-1 U.S. Trademarks Other than Inver House, El Toro,
and Schenley
Schedule 1.2(a)-2 Inver House, El Toro, and Schenley Trademarks
Schedule 1.2(b) Foreign Trademarks
Schedule 1.2(c)-1 Chi-Chi's/Xxxxxxxxxxx'x Licenses
Schedule 1.2(c)-2 Chi-Chi's/Xxxxxxxxxxx'x Trademarks
Schedule 1.2(f) Plants
Schedule 1.2(g) Manufacturing Equipment
Schedule 1.2(j) Literature
Schedule 1.2(m) Assigned Contracts
Schedule 1.2(n) Trade Names
Schedule 1.2(o) Prepaid Expenses
Schedule 1.2(p) Records
Schedule 1.2(q) Transferred Molds
Schedule 1.3(g) Clarendon Equipment
Schedule 1.3(l) Other Excluded Assets
Schedule 1.5(d) Returns Policy
Schedule 1.7(b) Estimated Purchase Price
Schedule 1.8(g) Accounting Methodology
Schedule 1.9 Prorations
Schedule 2.2 Sellers Governmental Filings and Other Required
Consents
Schedule 2.3 Compliance with Applicable Laws
Schedule 2.4 Third Party Rights
Schedule 2.10 Litigation
Schedule 2.11 Orders
Schedule 2.12 Manufacturing Equipment
Schedule 2.13(b) Owned Property - Exceptions
Schedule 2.14 Employees
Schedule 2.15(a) Multi-Employer Matters
Schedule 2.15(b) Welfare Plans
Schedule 2.15(c) Employee Plan Exceptions
Schedule 2.16(a) Environmental and Safety Requirements
Schedule 2.16(b) Hazardous Materials
Schedule 2.16(c) Off-Site Waste Disposals
Schedule 2.16(d) Environmental and Safety Events and Circumstances
Schedule 2.17 Product Liabilities
Schedule 2.18 Permits
Schedule 2.19 Adverse Changes
Schedule 2.20 Rebate and Promotional Programs
Description
Schedule 2.21 Employees
Schedule 2.22 Shipments and Depletion Data
Schedule 2.23 Brand Profit and Loss Statements
Schedule 2.25 Distributors
Schedule 2.26 Suppliers
Schedule 3.2 Purchaser's Approvals
Schedule 6.2 Costs and Expenses
Schedule 6.4 Insurance Amounts
Schedule 6.5 Glass Molds
Schedule 6.6(h) Depletion Days
Schedule 6.7 Approvals to be Applied for Post-Closing
Schedule 6.9(a) Terminated U.S. Distributors
Schedule 6.9(b) Terminated Foreign Distributor Agreements
Schedule 6.11(b) Employment Terms
Schedule 6.11(d) Severance Terms
Schedule 6.13 Product Differentiation
Schedule 6.14 Financial Statements
Schedule 8.1(a) Indemnification Matters
Schedule 8.1(i) Certain Liabilities
Schedule 8.8 Indemnification Limits
Schedule K-1 Sellers' Knowledge Persons
Schedule K-2 Purchaser's Knowledge Persons
Schedule S Surveys
Schedule T Title Commitments
Schedule U UD Records
LIST OF EXHIBITS
Description
Exhibit 1.4(a) Forms of Container Licenses
Exhibit 1.4(b) Form of Schenley License
Exhibit 4.6(a) Form of Xxxxxx Agreement
Exhibit 4.6(b) Form of Bottling Agreement
Exhibit 4.6(c) Forms of Canadian Whisky Agreements
Exhibit 4.6(d) Form of Scotch Whisky Agreement
Exhibit 4.6(e) Form of Barrel Agreement
Exhibit 4.6(f) Form of Clarendon Lease
Exhibit 4.6(g) Form of Flavoring Supply Agreement
Exhibit 4.6(h) Form of California Agreement
Exhibit 4.6(i) Form of Medley Agreements
Exhibit 4.6(j) Form of Services Agreements
Exhibit 4.6(k) Form of Guaranty
Exhibit 4.6(l) Form of Corn Whiskey Agreement
Exhibit 5.6(m) Form of Xxxxxx Guaranty
Exhibit 6.9(a) Forms of Notice to Distributors
Exhibit 7.2(a) Form of Sellers' Officer's Certificate
Exhibit 7.2(b) Forms of Sellers' Counsels' Opinion
Exhibit 7.2(c) Form of Trademark Assignment
Exhibit 7.2(d) Form of Assignment and Assumption
Exhibit 7.2(e) Form of Xxxx of Sale
Exhibit 7.2(f)-1 Form of Deed (Kentucky)
Exhibit 7.2(f)-2 Form of Deed (Georgia)
Exhibit 7.2(g) Form of Copyright Assignment
Exhibit 7.2(l) Form of Georgia Affidavit
Exhibit 7.2(o) Form of Guinness America, Inc. Officer's Certificate
Exhibit 7.3(b) Form of Purchaser's Officer's Certificate
Exhibit 7.3(c) Form of Purchaser's Counsels' Opinion
Exhibit 7.3(f) Forms of Resale Certificates
Exhibit 7.3(i) Form of Purchaser's Officer's Certificate
