Exhibit 2.1
ASSET PURCHASE AND SALE AGREEMENT
BY AND AMONG
GENERAL XXXXX, INC.,
THE PILLSBURY COMPANY
AND
INTERNATIONAL MULTIFOODS CORPORATION
DATED AS OF FEBRUARY 4, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS.................................................................................2
1.1 Certain Definitions.......................................................2
ARTICLE 2
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES.....................................12
2.1 Purchase and Sale of Assets..............................................12
2.2 Allocation of Purchase Price.............................................12
2.3 Assets...................................................................13
2.4 Excluded Assets..........................................................14
2.5 Assumption of Liabilities................................................15
2.6 Excluded Liabilities.....................................................16
2.7 Modification.............................................................18
2.8 Rescission...............................................................18
2.9 Closing Inventory Statement..............................................19
2.10 Conversion Date Inventory................................................20
2.11 Contract Performance.....................................................22
2.12 Nonassignability of Contracts............................................22
2.13 Dividable Contracts......................................................24
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EACH SELLER..............................................25
3.1 Seller's Authority; No Conflicts; Governmental Consents..................25
3.2 Title to Tangible Assets.................................................26
3.3 Intellectual Property....................................................27
3.4 Actions and Proceedings..................................................29
3.5 Contracts................................................................29
3.6 Compliance with Applicable Laws..........................................30
3.7 Brokers..................................................................30
3.8 Inventory................................................................30
3.9 Recent Events............................................................31
3.10 Liabilities..............................................................31
3.11 Financial Information....................................................31
3.12 Labor Matters............................................................32
3.13 Suppliers and Customers..................................................32
3.14 Universal Product Codes..................................................32
3.15 Recalls..................................................................32
3.16 Affiliate Transactions and Shared Services...............................33
3.17 Equipment................................................................33
3.18 Trade Programs; Prepayments..............................................33
3.19 Toledo Plant.............................................................33
3.20 Warranties...............................................................34
3.21 Slotting Allowances......................................................34
3.22 Windmill.................................................................34
3.23 No Other Representations or Warranties...................................34
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER....................................................35
4.1 Authority; No Conflicts; Governmental Consents...........................35
4.2 Actions and Proceedings..................................................35
4.3 Availability of Funds....................................................36
4.4 Brokers..................................................................36
4.5 Qualified Plan Status....................................................36
ARTICLE 5
COVENANTS OF EACH SELLER...................................................................36
5.1 Access...................................................................36
5.2 Ordinary Conduct of the Business.........................................37
5.3 Delivery.................................................................38
5.4 Accounts Receivable......................................................38
5.5 Payments.................................................................38
5.6 Confidential Information.................................................38
5.7 Notices..................................................................39
5.8 Employees................................................................39
5.9 Transfer of Equipment to and Conversion of Toledo Plant..................41
5.10 Non-Use of Name..........................................................41
5.11 Non-Interference.........................................................41
5.12 Financial Statements.....................................................41
5.13 No Shopping..............................................................42
ARTICLE 6
COVENANTS OF BUYER.........................................................................42
6.1 Confidentiality..........................................................42
6.2 Accounts Receivable......................................................43
6.3 Employees................................................................43
ARTICLE 7
MUTUAL COVENANTS OF THE PARTIES............................................................46
7.1 Cooperation and Transition Services......................................46
7.2 Publicity................................................................47
7.3 Tax Matters..............................................................47
7.4 Access to Information....................................................49
7.5 Bulk Sales Waiver........................................................50
7.6 Expenses.................................................................50
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7.7 Further Assurances.......................................................50
7.8 Collateral Agreements....................................................50
7.9 Shared Services..........................................................50
7.10 Employee Welfare Benefits................................................50
7.11 Toledo Defined Benefit Plan Transfer of Assets and Liabilities...........51
7.12 Xxxxx Xxxx...............................................................52
7.13 Xxxxx Xxxx Inventory.....................................................53
7.14 Manufacturer Codes.......................................................55
ARTICLE 8
CLOSING....................................................................................55
8.1 Closing..................................................................55
8.2 Buyer's Conditions to Closing............................................56
8.3 Sellers' Conditions to Closing...........................................58
ARTICLE 9
INDEMNIFICATION............................................................................59
9.1 Survival.................................................................59
9.2 Indemnification by Sellers...............................................59
9.3 Indemnification by Buyer.................................................60
9.4 Exclusive Remedy.........................................................60
9.5 Losses Net of Insurance..................................................61
9.6 Procedures Relating to Indemnification...................................61
9.7 Indemnification Amounts..................................................63
ARTICLE 10
TERMINATION................................................................................64
10.1 Bases for Termination....................................................64
10.2 Notice of Termination; Return of Documents; Continuing Confidentiality
Obligation ..............................................................64
10.3 Effect of Termination....................................................64
ARTICLE 11
GENERAL PROVISIONS.........................................................................65
11.1 Assignment; Successors and Assigns.......................................65
11.2 No Third-Party Beneficiaries.............................................65
11.3 Amendments...............................................................65
11.4 Waiver of Compliance.....................................................65
11.5 Notices..................................................................65
11.6 Interpretation...........................................................67
11.7 Counterparts.............................................................67
11.8 Severability.............................................................67
11.9 Governing Law............................................................67
11.10 Actions and Proceedings..................................................67
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11.11 Exhibits and Schedules...................................................68
11.12 Specific Performance.....................................................68
11.13 Entire Agreement.........................................................68
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EXHIBITS
Exhibit A-1 Retail Trademark License Agreement
Exhibit A-2 Food Service Trademark License Agreement
Exhibit B-1 Omnibus Patent Assignment
Exhibit B-2 Omnibus Trademark Assignment
Exhibit C Transition Services Agreement
Exhibit D Co-Pack Agreement
Exhibit E-1 Retail Patent and Technology License Agreement
Exhibit E-2 Food Service Patent and Technology License Agreement
Exhibit F Toledo Plant Lease Agreement
Exhibit G Xxxxxx Xxxxx Trademark License Agreement
Exhibit H Hungry Xxxx Trademark License Agreement
Exhibit I Grant Back Patent and Technology License Agreement
SCHEDULES
Schedule 1.1(a)(i) Products
Schedule 1.1(a)(ii) Xxxxx Xxxx Products
Schedule 1.1(b) General Xxxxx' Knowledge
Schedule 1.1(c) Pillsbury's Knowledge
Schedule 1.1(d) Windmill Intellectual Property
Schedule 2.2 Fair Market Value of the Stock
Schedule 2.3(c)(i) Registered Trademarks and Patents and Universal Product Codes
Schedule 2.3(c)(ii) Xxxxx Xxxx
Schedule 2.3(f) Assigned Contracts
Schedule 2.3(g) Equipment
Schedule 2.5(e) Trade Promotions
Schedule 2.5(g) Customer Deductions
Schedule 2.9(a) Inventory Standards
Schedule 2.13 Dividable Contracts
Schedule 3.3(a) Intellectual Property
Schedule 3.3(b) Intellectual Property Litigation and Third-Party Rights
Schedule 3.4 Litigation
Schedule 3.5 Contracts
Schedule 3.6 Compliance with Applicable Laws
Schedule 3.9 Recent Events
Schedule 3.11 Financial Information
Schedule 3.12 Labor Matters
Schedule 3.13 Suppliers and Customers
Schedule 3.15 Recalls
Schedule 3.16 Affiliate Transactions
Schedule 3.17 Exceptions to Equipment Representation
Schedule 3.18 Trade Coupons, Programs, Prepayments
Schedule 3.20 Warranties
Schedule 4.1(b) Buyer Conflicts
Schedule 5.8(a)(i) Toledo Employees
Schedule 5.8(a)(ii) Closing Date Employees
Schedule 5.8(e) Defined Contribution Plans
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Schedule 5.8(f) Defined Benefit Plans
Schedule 5.10 Non-Use
Schedule 8.1(a) Wire Instructions
Schedule 8.2(j) Third Party Consents
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THIS ASSET PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
February 4, 2001, is by and among General Xxxxx, Inc., a Delaware corporation
("General Xxxxx"), The Pillsbury Company, a Delaware corporation ("Pillsbury"
and, together with General Xxxxx, the "Sellers" and each, a "Seller"), and
International Multifoods Corporation, a Delaware corporation ("Buyer").
W I T N E S S E T H:
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WHEREAS, Pillsbury, a subsidiary of Diageo plc ("Diageo"), is engaged
in, among other businesses, the business of manufacturing, marketing, selling
and distributing (1) dessert and baking mix products and flour products through
retail channels primarily under the brand names Pillsbury (along with the
Barrelhead logo) and Xxxxxx Xxxxx ("Xxxxxxxxx Dessert and Baking Mix Retail
Business"), (2) potato products, dry breakfast mix products and syrup products
through retail channels primarily under the brand name Hungry Xxxx (the "Hungry
Xxxx Business" and along with the Pillsbury Dessert and Baking Mix Retail
Business, the "Pillsbury Retail Business"), and (3) non-custom dry mix food
service products in boxes of seven pounds and less primarily under the brand
name Pillsbury (along with the Barrelhead logo) (the "Pillsbury Food Service
Business");
WHEREAS, General Xxxxx is engaged in, among other businesses, the
business of manufacturing, marketing, selling and distributing flour products in
the United States through retail and food service channels under the brand name
Xxxxx Xxxx (the "Xxxxx Xxxx Business");
WHEREAS, General Xxxxx, Diageo and Pillsbury have entered into an
Agreement and Plan of Merger (the "Merger Agreement"), dated as of July 16,
2000, by and among General Xxxxx, General Xxxxx North American Businesses, Inc.
("Merger Sub"), Diageo and Pillsbury, pursuant to which General Xxxxx will
acquire certain food businesses of Diageo through (i) the merger (the "Merger")
of Merger Sub with and into Pillsbury, with Pillsbury surviving as a wholly
owned subsidiary of General Xxxxx, and (ii) the purchase by certain subsidiaries
of General Xxxxx of the stock of Diageo subsidiaries (and the equity interests
owned by Diageo subsidiaries in other related entities) that conduct certain
non-United States food business of Diageo (the "Subsidiary Purchases" and
collectively with the Merger, the "Acquisition");
WHEREAS, in connection with and subject to obtaining regulatory
approvals of the Acquisition under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), General Xxxxx and Diageo will enter
into a provisional consent decree (the "Provisional Consent Decree") with the
U.S. Federal Trade Commission (the "FTC") providing for, among other things, the
sale of certain assets in accordance with, and in the manner contemplated by,
this Agreement;
WHEREAS, Sellers desire to sell, transfer and assign to Buyer, and
Buyer desires to purchase from Sellers, all of Sellers' right, title and
interest in and to certain assets of the Business (as defined herein) and the
Xxxxx Xxxx Business (as defined herein), and Buyer is willing to assume certain
liabilities of the Business and the Xxxxx Xxxx Business, all as more
specifically provided herein; and
WHEREAS, by entering into this Agreement, neither Sellers nor Diageo
nor any of them concede or acknowledge that the Merger would tend to restrain
competition in any relevant market or otherwise contravene any provision of any
antitrust or competition law of any jurisdiction;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. For all purposes of this Agreement, except as
expressly provided or unless the context otherwise requires, the following
definitions shall apply:
"Accrued Paid Time Off" shall have the meaning assigned thereto in Section
2.5(j).
"Acquisition" shall have the meaning assigned thereto in the recitals.
"Acquisition Proposal" shall have the meaning assigned thereto in Section
5.13.
"Adjustment Payment" shall have the meaning assigned thereto in Section
2.9(e).
"Affiliate" shall mean, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such other
Person at any time during the period for which the determination of affiliation
is being made. For purposes of this definition, the term "control" (including
the correlative meanings of the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of management
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agreement" shall have the meaning assigned thereto in the preamble.
"Allocation" shall have the meaning assigned thereto in Section 2.2.
"Assets" shall have the meaning assigned thereto in Section 2.3.
"Assigned Contracts" shall have the meaning assigned thereto in Section
2.3(f).
"Assigned Patents" shall have the meaning assigned thereto in Section
2.3(c).
"Assigned Trademarks" shall have the meaning assigned thereto in Section
2.3(c).
"Assumed Liabilities" shall have the meaning assigned thereto in Section
2.5.
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"Basket" shall have the meaning assigned thereto in Section 9.7.
"Books and Records" shall have the meaning assigned thereto in Section
2.3(d).
"Business" shall mean the manufacture, marketing, sale and distribution of
the Products in the Territory.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banks in New York or Minnesota are authorized or obligated by law or
executive order to close.
"Business Employees" shall mean Closing Date Employees and Toledo
Employees.
"Buyer" shall have the meaning assigned thereto in the preamble.
"Buyer DC Plan" shall have the meaning assigned thereto in Section
6.3(g)(ii).
"Buyer's Conversion Date Objection" shall have the meaning assigned thereto
in Section 2.10(b).
"Buyer's Objection" shall have the meaning assigned thereto in Section
2.9(b).
"Buyer's Xxxxx Xxxx Transfer Date Objection" shall have the meaning
assigned thereto in Section 7.13(b).
"Closing" shall have the meaning assigned thereto in Section 8.1.
"Closing Date" shall have the meaning assigned thereto in Section 8.1.
"Closing Date Employees" shall mean (i) employees of Pillsbury or its
Subsidiaries who primarily provide services to the Business at the Minneapolis
headquarters and are listed on SCHEDULE 5.8(a)(ii), and, (ii) field sales
employees of Sellers or their Subsidiaries who are listed on SCHEDULE
5.8(a)(ii), in each case to the extent the employment of such employees is not
terminated prior to the Closing Date. To the extent any new employees are hired
for the Business at the Minneapolis headquarters between the date hereof and the
Closing Date, Sellers shall make additions to SCHEDULE 5.8(a)(ii) to reflect
such employees.
"Closing Date Interest Rate" shall mean the rate per annum equal to the
prime commercial lending rate quoted as of the Closing Date by Xxxxxx Guaranty
Trust Company of New York.
"Closing Inventory Statement" shall have the meaning assigned thereto in
Section 2.9(a).
"COBRA" shall mean Section 601 ET SEQ. of ERISA and Section 4980B of the
Code and any similar applicable state laws.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
"Collateral Agreements" shall have the meaning assigned thereto in Section
7.8.
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"Confidential Information" shall have the meaning assigned thereto in
Section 5.6.
"Confidentiality Agreement" shall have the meaning assigned thereto in
Section 6.1.
"Contracts" shall mean the contracts and agreements set forth on SCHEDULE
3.5 hereto, each, a "Contract."
"Controlling Party" shall have the meaning assigned thereto in Section
9.6(c).
"Conversion Date" shall mean the date on which the conversion of the Toledo
Plant is certified as complete pursuant to the Conversion Plan Agreement (as
defined herein).
"Conversion Date Interest Rate" shall mean the rate per annum equal to the
prime commercial lending rate quoted as of the Conversion Date by Xxxxxx
Guaranty Trust Company of New York.
"Conversion Date Inventory" shall have the meaning assigned thereto in
Section 2.10(a).
"Conversion Date Inventory Statement" shall have the meaning assigned
thereto in Section 2.10(a).
"Conversion Date Payment" shall have the meaning assigned thereto in
Section 2.10(e).
"Conversion Plan Agreement" shall mean the plan for the conversion of the
Toledo Plant attached as Exhibit C to the Toledo Plant Lease Agreement.
"Co-Pack Agreement" shall mean the agreement, to be entered into at
Closing, in the form attached hereto as EXHIBIT D, pursuant to which General
Xxxxx shall provide (or cause to be provided) certain co-pack services to Buyer
for a period from the Closing through the Conversion Date.
"CPA Firm" shall have the meaning assigned thereto in Section 2.9(c).
"DB Transfer" shall have the meaning assigned thereto in Section 7.11.
"Diageo" shall have the meaning assigned thereto in the recitals.
"Dividable Contracts" shall mean the contracts and agreements referred to
in SCHEDULE 2.13 and other contracts, if any, that are material to the Business
and that do not relate to the services and arrangements that are referenced in
or will otherwise be addressed by this Agreement or any of the Collateral
Agreements, including the Transition Services Agreement (as defined herein), the
Toledo Plant Lease Agreement (as defined herein), the Conversion Plan Agreement
and the Co-Pack Agreement.
"Equipment" shall have the meaning assigned thereto in Section 2.3(g) and
shall also include, without additional charge to Buyer, such other equipment, if
any, as is reasonably necessary to complete the conversion of the Toledo Plant
in accordance with the standards and specifications set forth in the Conversion
Plan.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" shall have the meaning assigned thereto in Section 2.4.
"Excluded Liabilities" shall have the meaning assigned thereto in Section
2.6.
"Excluded Taxes" shall mean (1) any Taxes attributable to the Business, the
Assets, or of Windmill (other than Property Taxes attributable to the
Equipment), for any Pre-Closing Tax Periods (including any Tax liability of
Windmill for such period arising as a result of the application of Treasury
Regulation section 1.1502-6 or any similar provision of any applicable state or
local Tax law or attributable to settlement of intercompany indebtedness of
Windmill to Sellers), (2) (A) any Taxes of Sellers that are not attributable to
the Business, the Assets, the Xxxxx Xxxx Business, the Special Inventory, the
Xxxxx Xxxx Assets, Windmill, or any other assets, property, franchise, service
or business to be, directly or indirectly, acquired by, or provided to, Buyer or
any of its Affiliates under this Agreement or any of the Collateral Agreements,
and (B) any Taxes of Sellers attributable to any assets, property, franchise or
business (other than the Assets, the Business, the Xxxxx Xxxx Business, the
Special Inventory, the Xxxxx Xxxx Assets, Windmill, or any other assets,
property, franchise, service or business to be, directly or indirectly, acquired
by, or provided to, Buyer or any of its Affiliates under this Agreement or any
of the Collateral Agreements), (3) any Property Taxes of Sellers that are not
attributable to the Equipment, (4) any Taxes attributable to the Conversion Date
Inventory or Property Taxes attributable to the Equipment, in each case, for any
Tax period (or portion thereof) ending on or before the Conversion Date and (5)
any Taxes attributable to the Xxxxx Xxxx Business, the Xxxxx Xxxx Transfer Date
Inventory or the Xxxxx Xxxx Assets for any Tax period (or portion thereof)
ending on or before the Xxxxx Xxxx Transfer Date; PROVIDED, HOWEVER, that
Excluded Taxes shall not include, and Sellers shall not be responsible for, (A)
any Taxes which are passed through to Buyer or any of its Affiliates (or for
which Buyer or any of its Affiliates are otherwise responsible) under the
Co-Pack Agreement or any of the Collateral Agreements or any lease or any
similar agreement between or among Buyer, any of the Sellers or any of their
respective Affiliates, (B) any Taxes attributable to actions, other than in the
ordinary course of business, taken by Buyer on the Closing Date after the
Closing to the extent such actions cause the amount of Taxes for the Pre-Closing
Tax Period to exceed the amount of Taxes that would otherwise be payable for
such Pre-Closing Tax Period in the absence of such actions by Buyer and (C)
Transfer Taxes. For purposes of this Agreement, in the case of any Straddle
Period with respect to Taxes attributable to the Business, the Assets, the Xxxxx
Xxxx Business, the Special Inventory or the Xxxxx Xxxx Assets, or of Windmill,
the portion of such Taxes that shall be allocable to the portion of the Tax
period ending on the Relevant Date (or in the case of Property Taxes
attributable to the Equipment, ending on the Conversion Date) shall (i) in the
case of income Taxes and other Taxes based on or related to receipts, be
computed as if such Tax period ended as of the close of business on the Relevant
Date, (ii) in the case of Taxes (other than Property Taxes attributable to the
Equipment, income Taxes and Taxes based on or related to receipts), be equal to
the amount of such Taxes for the entire Straddle Period multiplied by a
fraction, the numerator of which is the number of calendar days in the Straddle
Period up to and including the Relevant Date and the denominator of which is the
number of calendar days in the entire Straddle Period, and (iii) in the case of
Property Taxes attributable to the Equipment, be equal to the amount of such
Property Taxes for the entire Straddle Period that are attributable to
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the Equipment multiplied by a fraction, the numerator of which is the number of
calendar days in the Straddle Period up to and including the Conversion Date and
the denominator of which is the number of calendar days in the entire Straddle
Period. Clause (ii) of the preceding sentence shall be applied with respect to
Taxes of Windmill, if any, for such Tax period relating to capital (including
net worth or long-term debt) or intangibles by reference to the level of such
items on the Closing Date.
"Expiration Date" shall have the meaning assigned thereto in Section 9.1.
"Final Closing Inventory Statement" shall have the meaning assigned thereto
in Section 2.9(d).
"Final Conversion Date Inventory Statement" shall have the meaning assigned
thereto in Section 2.10(d).
"Final Xxxxx Xxxx Transfer Date Inventory Statement" shall have the meaning
assigned thereto in Section 7.13(d).
"Financial Statements" shall have the meaning assigned thereto in Section
3.11.
"Financing Commitment" shall have the meaning assigned thereto in Section
4.3.
"Food, Drug and Cosmetics Act" shall mean the Federal Food, Drug and
Cosmetics Act, as amended, and the rules and regulations promulgated thereunder.
"Food Service Patent and Technology License Agreement" shall have the
meaning assigned thereto in the definition of Patent and Technology License
Agreements.
"Food Service Trademark License Agreement" shall have the meaning assigned
thereto in the definition of Trademark License Agreements.
"Formulations" shall mean (i) the formulations, recipes, trade secrets and
know-how for each Product (including those that are not in use as of the Closing
Date but are contained within the Xxxxxxxxx XXX database for the Products) and
each Xxxxx Xxxx Product, as applicable, and (ii) all formulations in process as
of the date of this Agreement or the Closing Date under research and development
projects related primarily to the Business or the Xxxxx Xxxx Business.
"FTC" shall have the meaning assigned thereto in the recitals.
"GAAP" shall mean generally accepted accounting principles in the United
States, consistently applied.
"General Xxxxx" shall have the meaning assigned thereto in the preamble.
"General Xxxxx Toledo Plan" shall have the meaning assigned thereto in
Section 3.6(b).
"Governmental Entity" shall mean any federal, state, political subdivision
or other governmental agency, court or instrumentality, foreign or domestic.
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"Grant Back Patent and Technology License Agreement" shall mean the
agreement providing for the license to General Xxxxx to use certain patents,
Formulations, Processing Instructions and Specifications assigned to Buyer
pursuant to the provisions of Section 2.3(c), on the terms set forth therein, to
be entered into at Closing, in the form attached hereto as EXHIBIT I.
"HSR Act" shall have the meaning assigned thereto in the recitals.
"Hungry Xxxx Business" shall have the meaning assigned thereto in the
recitals.
"Hungry Xxxx Trademark License Agreement" shall mean the agreement
providing for the license to General Xxxxx to use the "Hungry Xxxx" trademark on
the terms set forth therein, to be entered into at Closing, in the form attached
hereto as EXHIBIT H.
"Intellectual Property" shall have the meaning assigned thereto in Section
2.3(c).
"Inventory" shall have the meaning assigned thereto in Section 2.3(a).
"Inventory Standards" shall have the meaning assigned thereto in Section
2.9(a).
"IRS" shall mean the Internal Revenue Service.
"Lemelson Patents" shall mean all patents owned or claimed by Lemelson
Medical, Education & Research Foundation, Limited Partnership.
"Licensed Trademarks and Patents" shall mean those trademarks, patents,
patent applications, trade secrets, "know-how" and other rights licensed to
Buyer under the Trademark License Agreements and the Patent and Technology
License Agreements.
"Liens" shall have the meaning assigned thereto in Section 3.2.
"Loss" shall have the meaning assigned thereto in Section 9.2.
"Xxxxxx Plant" shall mean the facility located at 0000 Xxxx Xxxxxx, Xxxxxx,
Xxxx, and all improvements, facilities and fixtures located thereon, owned by
Pillsbury and located in Martel, Ohio (it being understood that Buyer will have
no rights in any thereof except as expressly set forth herein or in the
Collateral Agreements).
"Xxxxxx Xxxxx Trademark License Agreement" shall mean the agreement
providing for the license to General Xxxxx to use the "Xxxxxx Xxxxx" trademark
on the terms set forth therein, to be entered into at Closing, in the form
attached hereto as EXHIBIT G.
"Material Adverse Effect" shall mean a material adverse effect on the
financial condition of the Business or the operation or results of operation of
the Business taken as a whole.
"Materiality Qualifiers" shall have the meaning assigned thereto in Section
9.7.
"Merger" shall have the meaning assigned thereto in the recitals.
"Merger Agreement" shall have the meaning assigned thereto in the recitals.
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"Merger Sub" shall have the meaning assigned thereto in the recitals.
"Multifoods Plan" shall have the meaning assigned thereto in Section 4.5.
"Non-Controlling Party" shall have the meaning assigned thereto in Section
9.6(c).
"Omnibus Patent Assignment" shall mean the agreements entered into between
Buyer and Sellers (or Subsidiaries of Sellers) pursuant to which Sellers (or
Subsidiaries of Sellers) assign, transfer and convey to Buyer all right, title
and interest in and to the Assigned Patents (as such term is defined in Section
2.3(c) hereof), along with certain related rights, to be entered into at
Closing, in the form attached hereto as EXHIBIT B-1.
"Omnibus Trademark Assignment" shall mean the agreements entered into
between Buyer and Sellers (or Subsidiaries of Sellers) pursuant to which Sellers
(or Subsidiaries of Sellers) assign, transfer and convey to Buyer all right,
title and interest in and to the Assigned Trademarks (as such term is defined in
Section 2.3(c) hereof), along with the accompanying goodwill associated
therewith and certain related rights, to be entered into at Closing, in the form
attached hereto as EXHIBIT B-2.
"Patent and Technology License Agreements" shall mean the agreements (the
"Retail Patent and Technology License Agreement" and the "Food Service Patent
and Technology License Agreement") providing for the use of certain patents,
"know-how" and trade secrets, as more fully set forth therein, to be entered
into at Closing, in the forms attached hereto as EXHIBIT E-1 and EXHIBIT E-2,
respectively.
"Permitted Liens" shall have the meaning assigned thereto in Section 3.2.
"Person" shall mean an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization, a
government or any agency or political subdivision thereof or any other entity or
organization.
"Pillsbury" shall have the meaning assigned thereto in the preamble.
"Pillsbury Dessert and Baking Mix Retail Business" shall have the meaning
assigned thereto in the recitals.
"Pillsbury Food Service Business" shall have the meaning assigned thereto
in the recitals.
"Pillsbury Retail Business" shall have the meaning assigned thereto in the
recitals.
"Pre-Closing Tax Period" shall mean any Tax period (or portion thereof)
ending on or before the Closing Date.
"Processing Instructions" shall mean (i) the processing instructions
(including manufacturing methodologies and engineering data and designs) for
each Product (including those that are not in use as of the Closing Date but are
contained within the Xxxxxxxxx XXX database for the Products) and each Xxxxx
Xxxx Product, as applicable, and (ii) all processing
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instructions in process as of the date of this Agreement or the Closing Date
under research and development projects related primarily to the Business or the
Xxxxx Xxxx Business.
"Products" shall mean the products manufactured in the Territory or Canada
and sold in the Territory and listed or described on SCHEDULE 1.1(a)(i) hereto,
each a "Product."
"Property Taxes" shall mean personal property Taxes.
"Provisional Consent Decree" shall have the meaning assigned thereto in the
recitals.
"PTO" means the U.S. Patent and Trademark Office.
"Purchase Orders" shall have the meaning assigned thereto in Section
2.3(b).
"Purchase Price" shall have the meaning assigned thereto in Section 2.1.
"Relevant Date" shall mean the Closing Date, except that (a) in the case of
the Conversion Date Inventory and Property Taxes on the Equipment, "Relevant
Date" shall mean the Conversion Date and (b) in the case of the Xxxxx Xxxx
Business, the Xxxxx Xxxx Transfer Date Inventory, and the Xxxxx Xxxx Assets,
"Relevant Date" shall mean the Xxxxx Xxxx Transfer Date.
"Research Resources Patent" means patent Re 36335, which patent is claimed
by Research Resources, Inc.
"Retail Patent and Technology License Agreement" shall have the meaning
assigned thereto in the definition of Patent and Technology License Agreements.
"Retail Trademark License Agreement" shall have the meaning assigned
thereto in the definition of Trademark License Agreements.
"Return" shall mean any return, statement, report or form, including in
each case any amendments thereto, required to be filed with any Taxing Authority
by or with respect to Taxes or any claim for refund.
"Xxxxx Xxxx Assets" shall have the meaning assigned thereto in Section
7.12(a).
"Xxxxx Xxxx Business" shall have the meaning assigned thereto in the
recitals.
"Xxxxx Xxxx Products" shall mean the products manufactured in the Territory
or Canada and sold in the Territory and listed or described on SCHEDULE
1.1(a)(ii) hereto, each a "Xxxxx Xxxx Product."
"Xxxxx Xxxx Transfer Date" shall mean the date on which Buyer takes over
the Xxxxx Xxxx Business.
"Xxxxx Xxxx Transfer Date Inventory" shall have the meaning assigned
thereto in Section 7.13(a).
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"Xxxxx Xxxx Transfer Date Inventory Statement" shall have the meaning
assigned thereto in Section 7.13(a).
"Xxxxx Xxxx Transfer Date Payment" shall have the meaning assigned thereto
in Section 7.13(e).
"Seller's Knowledge" shall mean, as to General Xxxxx, the actual knowledge
of the individuals listed on SCHEDULE 1.1(b) and, as to Pillsbury, the actual
knowledge of the individuals listed on SCHEDULE 1.1(c).
"Sellers" shall have the meaning assigned thereto in the preamble.
"Special Inventory" shall mean the Conversion Date Inventory and the Xxxxx
Xxxx Transfer Date Inventory.
"Specifications" shall mean (i) the raw materials, manufacturing,
packaging, labeling and quality assurance specifications for each Product
(including those that are not in use as of the Closing Date but are contained
within the Xxxxxxxxx XXX database for the Products) and each Xxxxx Xxxx Product,
as applicable, and (ii) all specifications in process as of the date of this
Agreement or the Closing Date under research and development projects related
primarily to the Business or the Xxxxx Xxxx Business.
"Stock" shall mean all of the issued and outstanding shares of Series A
Common Stock and Series B Common Stock, in each case, par value $0.01 per share,
of Windmill.
"Straddle Period" shall mean (1) in the case of Taxes attributable to the
Conversion Date Inventory or any Property Taxes attributable to the Equipment,
any complete Tax period that includes but does not end on the Conversion Date,
(2) in the case of Taxes of Windmill, any complete Tax period of Windmill that
includes but does not end on the Closing Date, (3) in the case of the Xxxxx Xxxx
Business, the Xxxxx Xxxx Transfer Date Inventory, or the Xxxxx Xxxx Assets, any
complete Tax period that includes but does not end on the Xxxxx Xxxx Transfer
Date, and (4) otherwise, any complete Tax period that includes but does not end
on the Closing Date.
"Subsidiary" shall mean, when used with respect to any Person, any
corporation, partnership, limited liability company, or other organization,
whether incorporated or unincorporated, of which such Person owns or controls,
directly or indirectly, 50% or more of the voting power of the outstanding
equity securities (or equivalent voting interests) or has the power to appoint
50% or more of the members of the board of directors or other governing body.
"Subsidiary Purchases" shall have the meaning assigned thereto in the
recitals.
"Tax" shall mean all income, profits, franchise, gross receipts, capital,
net worth, sales, use, withholding, turnover, value added, ad valorem,
registration, general business, employment, social security, disability,
occupation, real property, personal property (tangible and intangible), stamp,
transfer (including real property transfer or gains), conveyance, severance,
production, excise and other taxes, withholdings, duties, levies, imposts,
license and registration fees and other similar charges and assessments
(including any and all fines, penalties and additions
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attributable to or otherwise imposed on or with respect to any such taxes,
charges, fees, levies or other assessments, and interest thereon and any
liability arising pursuant to the application of Treasury Regulation section
1.1502-6 or any similar provision of any applicable state or local Tax law)
imposed by or on behalf of any Governmental Entity.
"Tax Claim" shall have the meaning assigned thereto in Section 9.6(c).
"Taxing Authority" shall mean any governmental or regulatory authority,
body or instrumentality exercising any authority to impose, regulate or
administer the imposition of Taxes.
"Tennessee Plant" shall mean the facility located at 000 Xxxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxx, and all improvements, facilities and fixtures located
thereon, owned by Pillsbury and located in Murfreesboro, Tennessee (it being
understood that Buyer will have no rights in any thereof except as expressly set
forth herein or in the Collateral Agreements).
"Territory" shall mean the United States of America, including its
territories, possessions, commonwealths, trusteeships, and retail outlets in
non-domestic United States government installations and facilities, but
excluding Puerto Rico, PROVIDED that to the extent that Buyer sells to
U.S.-based mass merchandisers and club store customers who at Closing or
thereafter have stores in Mexico or Canada, Buyer may grant to such mass
merchandisers and club store customers the right to ship Branded Products (as
defined in the Trademark License Agreements) to such stores and to sell such
Branded Products in such stores located in Mexico and Canada. To the extent that
Buyer grants such rights to such customers, Buyer also shall have the right to
ship Branded Products directly to such stores.
"Third-Party Claim" shall have the meaning assigned thereto in Section
9.6(a).
"Toledo Employees" shall mean employees of General Xxxxx or its
Subsidiaries at the Toledo Plant who would primarily provide services to the
Business if the Business were conducted on the date hereof at the Toledo Plant
as contemplated by the Toledo Plant Lease Agreement, which employees are listed
on SCHEDULE 5.8(a)(i), to the extent the employment of such employees is not
terminated prior to the Conversion Date. The Toledo Employees consist solely of
the Toledo Salaried Employees and the Toledo Wage Employees. To the extent any
new employees are hired for the Toledo Plant prior to the Conversion Date who
would have been listed on SCHEDULE 5.8(a)(i) had such employee been employed at
the Toledo Plant on the date hereof, Sellers shall make additions to SCHEDULE
5.8(a)(i) to reflect such employees.
"Toledo Plant" shall mean the facility located at 0000 Xxxxxx Xxxx, Xxxxxx,
Xxxx, and all improvements, facilities and fixtures located thereon, owned by
General Xxxxx, directly or indirectly, and located in Toledo, Ohio.
"Toledo Plant Lease Agreement" shall mean the lease agreement providing for
the leasing of certain portions of the Toledo Plant by Buyer from General Xxxxx
Operations, Inc. as more fully set forth therein, to be entered into and
effective at Closing, in the form attached hereto as EXHIBIT F.
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"Toledo Salaried Employees" shall mean those Toledo Employees so identified
on SCHEDULE 5.8(a)(i).
"Toledo Wage Employees" shall mean those Toledo Employees so identified on
SCHEDULE 5.8(a)(i).
"Trademark License Agreements" shall mean, collectively, a retail trademark
license agreement (the "Retail Trademark License Agreement") and a food service
trademark license agreement (the "Food Service Trademark License Agreement"),
each providing for the license to use certain trademarks in the Territory, to be
entered into at Closing, in the forms attached hereto as EXHIBIT A-1 and EXHIBIT
A-2, respectively.
"Transfer Taxes" shall have the meaning assigned thereto in Section 7.3(a).
"Transition Services Agreement" shall mean the agreement, to be entered
into at Closing, in the form attached hereto as EXHIBIT C, pursuant to which
General Xxxxx shall provide (or cause to be provided) certain transition
services to Buyer for the periods set forth therein.
"Treasury Regulation" shall mean the U.S. treasury regulations pursuant to
the Code.
"WARN Act" shall mean the Worker Adjustment and Retraining Notification
Act, as amended, and the rules and regulations promulgated thereunder.
"Welfare Benefits" shall have the meaning assigned thereto in Section 7.10.
"Windmill" shall mean Windmill Holdings Corp., a California corporation,
and a direct wholly owned subsidiary of Pillsbury.
"Windmill Intellectual Property" shall mean, subject to the Xxxxxx Xxxxx
Trademark License Agreement, all the intellectual property held, directly or
indirectly, by Windmill, including that referred to in SCHEDULE 1.1(d).
ARTICLE 2
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 PURCHASE AND SALE OF ASSETS. Upon the terms and subject to the
conditions of this Agreement, including the provisions of Section 7.12(b), on
the Closing Date, Sellers will sell, convey, transfer and assign, or cause to be
sold, conveyed, transferred and assigned, to Buyer, and Buyer will purchase, the
Assets (as defined in Section 2.3) for an aggregate cash purchase price of
three-hundred four million five hundred eighty-nine thousand United States
Dollars ($304,589,000), as adjusted pursuant to Section 5.8(c) and, to the
extent applicable, Section 2.9(e) (the "Purchase Price"), payable as set forth
in Article 8.
2.2 ALLOCATION OF PURCHASE PRICE. Within one hundred eighty (180) days
after the Closing, Buyer shall obtain an appraisal of the fair market values of
the Assets (exclusive of the Stock) from a nationally recognized appraisal firm
for purposes of allocating the purchase price among the Assets (exclusive of the
Stock), and shall prepare an allocation (the "Allocation")
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based on such appraisal and consistent with the provisions of Section 1060 of
the Code and the Treasury Regulations thereunder. Neither Buyer nor Sellers, nor
any of their respective Affiliates, shall take any position on any Return or
audit inconsistent with such Allocation unless required to do so by applicable
law. Sellers and Buyer shall each provide to the other for review a copy of its
report with respect to this transaction pursuant to Section 1060 of the Code at
least ten (10) Business Days prior to its submission to the IRS. Such reports
shall be consistent with the Allocation. Notwithstanding the foregoing, Buyer
and Sellers agree that the fair market value of the Stock is the amount set
forth on SCHEDULE 2.2 and that neither Buyer nor Sellers nor any of their
respective Affiliates shall take any position on any Return or audit
inconsistent with such agreement, unless required to do so by a "determination"
within the meaning of Section 1313 of the Code.
2.3 ASSETS. The capitalized term "Assets" shall mean all right, title
and interest of each Seller in and to the following enumerated assets:
(a) except as otherwise expressly provided herein, all inventory of the
Business that (i) are finished goods held for sale by such Seller or any of its
Affiliates in the ordinary course of operating the Business as of the Closing
Date, or (ii) are finished goods, raw materials, packaging, work-in-process or
other inventory held by third parties under co-pack agreements for producing
Products for sale by the Business and to which Pillsbury or its Affiliates holds
title as of the Closing Date (collectively, the "Inventory");
(b) all commitments and orders (subject to the terms and conditions of
such commitments and orders) made by the Business for the purchase of Products
from such Seller and its Affiliates for Products that have not been shipped as
of the Closing Date and under purchase orders by such Seller and its Affiliates
made on behalf of the Business (collectively, the "Purchase Orders");
(c) (i) the trademarks, trade names, logos, trade dress and service
marks listed on SCHEDULE 2.3(c)(i) and SCHEDULE 2.3(c)(ii) for the products
and/or services and territories set forth on SCHEDULE 2.3(c)(i) and SCHEDULE
2.3(c)(ii) (subject, in the case of the trademark "Hungry Xxxx," to the Hungry
Xxxx Trademark License Agreement), together with the goodwill, applications,
registrations, renewals and other rights associated therewith, and remedies
against infringements, violations and dilutions thereof (the "Assigned
Trademarks"), (ii) the patents listed on SCHEDULE 2.3(c)(i) together with all
reissues associated therewith, and all remedies against infringement and
pre-issuance royalties thereof, subject to the Grant Back Patent and Technology
License Agreement (the "Assigned Patents"), (iii) registered copyrights and
applications therefor listed on SCHEDULE 2.3(c)(i), (iv) the domain names, URLs
and web sites listed on SCHEDULE 2.3(c)(i), (v) except as provided in the
Trademark License Agreements and Patent and Technology License Agreements, all
Formulations, Specifications and Processing Instructions of the Pillsbury Retail
Business, and remedies against infringements or violations thereof, subject to
the Grant Back Patent and Technology License Agreement, (vi) except as provided
in the Trademark License Agreements, the Hungry Xxxx Trademark License
Agreement, the Xxxxxx Xxxxx Trademark License Agreement and Patent and
Technology License Agreements, all package designs, unregistered copyrights,
universal product codes and 1-800 telephone numbers for customer use, in each
case that are exclusively related to the Business, and remedies against
infringements or violations thereof, and (vii) the rights of Buyer
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provided in the Trademark License Agreements and Patent and Technology License
Agreements (collectively, the "Intellectual Property");
(d) all existing product literature, advertising materials, promotional
materials, studies, ledgers, files (including customer files) and reports
(including test reports), manufacturing and engineering drawings, process
controls, material standards and other books and records (except each Seller's
corporate records) in each case that are primarily related to the Business,
including all customer lists and customer data and databases (including
correspondence and records of 1-800 quality calls), supplier lists and supplier
data (including correspondence), price lists, records relating to the
Intellectual Property, accounting records and records of past sales and
inventory data in each case that are primarily related to the Business
(collectively, the "Books and Records"), except that a Seller may retain copies
of such Books and Records to the extent relating to Intellectual Property with
respect to which a Seller has any rights (including licensing rights) after
Closing (but only so long as such Seller retains such rights), to the extent a
Seller is required by law to retain the same or to the extent such information
is necessary for Seller to prepare Tax Returns, financial statements or other
legally required filings;
(e) all governmental licenses, permits, approvals, registrations and
similar rights issued to Sellers or either of them that are primarily related to
the Business to the extent their transfer is permitted by law;
(f) the contracts listed on SCHEDULE 2.3(f), as well as the contracts
and agreements not listed on SCHEDULE 2.3(f) but nevertheless primarily related
to the Business (such contracts and agreements, together with the contracts
listed on SCHEDULE 2.3(f), the "Assigned Contracts") but excluding from the
Assigned Contracts any contract or agreement that is an Excluded Asset;
(g) the equipment listed on SCHEDULE 2.3(g) (the "Equipment"), which
Schedule also sets forth the location of such Equipment;
(h) each warranty or guaranty primarily related to the Assets made or
issued by any manufacturer, grower, supplier or other predecessor transferor of
any of the Assets, to the extent that such assignment is not prohibited by the
terms of such warranty or guaranty; and
(i) the Stock.
2.4 EXCLUDED ASSETS. The Assets shall not include any assets other than
the assets specifically listed or described in Section 2.3, and, without
limiting the generality of the foregoing, shall expressly exclude (1) all real
property, improvements and fixtures, including the Tennessee Plant, the Xxxxxx
Plant and the Toledo Plant, together with any manufacturing, warehouse, research
and development, office, distribution and other facilities owned, leased or
subleased or otherwise used or occupied by either Seller, and any equipment,
fixtures, furnishings, machinery, vehicles and other real or personal property
used in the operation of the Business (other than pursuant to Sections 2.3(g),
the Conversion Plan Agreement and the Toledo Plant Lease Agreement and as
otherwise expressly included in the definition of "Assets" set forth in Section
2.3); (2) subject to the Trademark License Agreements and Omnibus Trademark
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Assignment, any trademarks, trade names and trade designations previously or
currently used by either Seller in its businesses, and, subject to the Patent
and Technology License Agreements and Omnibus Patent Assignment, any patents,
trade secrets, technology or "know-how" previously or currently used by either
Seller in its businesses, in each case unless listed or described in Section 2.3
(including the Schedules thereto); and (3) all accounts receivable, cash and
cash equivalents relating to Products shipped on or prior to the Closing Date
and Xxxxx Xxxx Products shipped on or prior to the Xxxxx Xxxx Transfer Date
(collectively, the "Excluded Assets").
2.5 ASSUMPTION OF LIABILITIES. Upon the terms and subject to the
conditions of this Agreement, Buyer shall assume on the Closing Date and shall
pay, perform and discharge when due the following obligations, liabilities and
commitments of each Seller (collectively, the "Assumed Liabilities"):
(a) all obligations, liabilities and commitments of each Seller in
respect of any and all Products shipped by Buyer or in respect of the
operation of the Business at any time after the Closing Date except where
such Products constituted finished products as of the Closing Date and such
liabilities, obligations or commitments of Sellers constituted product
liabilities or recall liabilities, unless (and to the extent that) the
liabilities, obligations or commitments were caused by Buyer's negligence in
the storage or transportation of such Products after the Closing or Buyer's
failure after the Closing to employ quality control standards of at least the
standards employed by Sellers prior to the Closing;
(b) except as otherwise expressly provided in Section 7.12, all
liabilities and obligations for manufacturer's coupons relating to Products,
which coupons are received by the clearinghouse for reimbursement for all
periods beginning sixty (60) days after the Closing Date, regardless of when
such coupons were issued;
(c) all obligations, liabilities and commitments of each Seller and
its Affiliates to the extent accruing, in accordance with the terms thereof,
after the Closing Date, under Purchase Orders;
(d) all liabilities, obligations and commitments of each Seller and
its Affiliates to the extent accruing, in accordance with the terms thereof,
after the Closing Date, under the Assigned Contracts;
(e) all liabilities and obligations for trade promotions arising
from (i) trade promotion activities or events primarily related to the
Business that are committed to after the Closing Date and occur at any time
following the Closing Date or (ii) trade promotion activities or events
primarily related to the Business that occur following the Closing Date and
that were committed to before the Closing Date, except to the extent any such
single activity or promotion was not disclosed, on SCHEDULE 2.5(e) or
otherwise, to Buyer by Sellers and the liability and obligation per customer
buying group related to such activity or promotion exceeds $100,000 unless
such activity or promotion was committed to by Sellers in the ordinary course
consistent with past practice;
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(f) all refund and replacement obligations relating to Products
shipped prior to Closing and returned after the date that is thirty (30) days
after the Closing Date and for retail unsaleables in all periods beginning
thirty (30) days after the Closing Date;
(g) all liabilities and obligations for customer deductions (which
shall not include liabilities and obligations for coupons, trade promotions
or refund and replacement obligations or retail unsaleables, which are
addressed by paragraphs (b), (e) and (f) of this Section 2.5) attributable to
invoices with respect to Products shipped after the Closing Date; PROVIDED
that, for those customer deductions relating to Products for which it cannot
be specifically determined whether the sale was after the Closing Date,
Sellers and Buyer shall be responsible for liabilities and obligations for
such customer deductions in accordance with the prorated percentages for the
applicable time periods set forth in SCHEDULE 2.5(g);
(h) all liabilities for Taxes attributable to the Business, the
Assets, the Xxxxx Xxxx Business, the Special Inventory or the Xxxxx Xxxx
Assets (provided that Buyer shall not assume liability for any Excluded
Taxes);
(i) all liabilities, obligations and commitments of each Seller for
Inventory ordered by each Seller in the ordinary course of business prior to
the Closing Date and delivered to Buyer after the Closing Date, PROVIDED that
such Inventory has not been included in the Closing Inventory Statement or
the Conversion Date Inventory Statement and been given effect in any
adjustment to the Purchase Price or credit under the Co-Pack Agreement under
Section 2.9 or resulted in a Conversion Date Payment pursuant to Section
2.10; and
(j) liabilities for vacation and paid time off for Business
Employees employed by Buyer to the extent accrued by Sellers to the date of
hire by Buyer ("Accrued Paid Time Off"), PROVIDED that Buyer is reimbursed or
credited by Sellers pursuant to Section 5.8(c) for such Accrued Paid Time Off.
Without limiting any rights provided to Buyer in Article 9, Buyer's obligations
under this Section 2.5 shall not be subject to offset or reduction by reason of
any actual or alleged breach of any representation, warranty or covenant
contained in this Agreement or any document delivered in connection herewith or
any right or alleged right to indemnification hereunder arising from such actual
or alleged breach.
2.6 EXCLUDED LIABILITIES. Notwithstanding any other provision of this
Agreement, Buyer shall not assume, or in any way be liable for the payment,
performance or discharge of, any liabilities, obligations or commitments of
Sellers or any of their Affiliates that do not constitute Assumed Liabilities,
whether or not related to the Business or the Xxxxx Xxxx Business and of
whatever kind and nature, whether primary or secondary, direct or indirect,
absolute or contingent, known or unknown, or accrued or unaccrued (collectively,
the "Excluded Liabilities"). Except for the Assumed Liabilities, Sellers shall
be solely liable for all liabilities, obligations or commitments of Sellers or
any of their Affiliates resulting from or arising from the ownership or
condition of the Assets on or prior to Closing, the operation of the Business on
or prior to Closing, and incidents, occurrences or events relating to the
Business or the Assets to the extent occurring or in existence on or prior to
Closing, whether or not reflected in the books and records of Sellers, or on the
Closing Date to the extent not occurring or in existence as a result of
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any act or omission by Buyer. Without limiting the generality of the immediately
preceding sentences, Buyer shall not assume any of the following liabilities or
obligations:
(a) the accounts payable relating to the Business accrued on or
prior to the Closing Date or relating to the Xxxxx Xxxx Business accrued on
or prior to the Xxxxx Xxxx Transfer Date;
(b) any product or recall liability relating to Products or Xxxxx
Xxxx Products shipped by Sellers;
(c) any liabilities, obligations or commitments for manufacturer's
coupons issued prior to, or by either Seller on, the Closing Date and
relating to Products, which coupons are received by the clearinghouse for
reimbursement prior to the date that is sixty (60) days after the Closing
Date;
(d) any refund or replacement obligations relating to Products
shipped on or prior to the Closing Date and returned prior to the date that
is thirty (30) days after the Closing Date or relating to Xxxxx Xxxx Products
shipped on or prior to the Xxxxx Xxxx Transfer Date;
(e) except as otherwise expressly provided in Section 2.5, all
obligations relating to Products shipped on or prior to the Closing Date or,
except as otherwise expressly provided in Sections 7.12 and 7.13, all
obligations relating to Xxxxx Xxxx Products shipped on or prior to the Xxxxx
Xxxx Transfer Date;
(f) any liabilities for Excluded Taxes;
(g) any liabilities or obligations arising out of or relating to the
Excluded Assets;
(h) any debts, liabilities, obligations or commitments, whenever
arising, to the extent not related to the Business or the Xxxxx Xxxx Business
and to the extent not otherwise related to the Assets;
(i) any liabilities, obligations or commitments (including
obligations in default) of Sellers and their Affiliates, to the extent
accrued in accordance with the terms thereof on or prior to the Closing Date,
under any contract or agreement (including Assigned Contracts and Purchase
Orders);
(j) any indebtedness of Sellers for money borrowed or purchase money
indebtedness;
(k) any liability, obligation or commitment of Sellers for costs and
expenses incurred in connection with the preparation and execution of this
Agreement and the Collateral Agreements or the consummation of the
transactions contemplated hereby and thereby;
(l) any liability, obligation or commitment of, or undertaken by,
Sellers pursuant to this Agreement or any other Collateral Agreement;
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(m) except as otherwise provided in this Agreement, any liability,
obligation or commitment to employees of Sellers (including any liability for
wages, salaries, bonuses, benefits or severance or under the WARN Act) based
upon their employment by either Seller prior to the Closing Date (in the case
of Closing Date Employees) or prior to the Conversion Date (in the case of
Toledo Employees), including with respect to employment termination in
connection with the consummation of this Agreement or the Conversion Plan
Agreement, other than Accrued Paid Time Off for Business Employees employed
by Buyer to the extent Buyer is reimbursed or credited by Sellers hereunder
for such Accrued Paid Time Off;
(n) except as otherwise expressly provided herein or in any
Collateral Agreement, any liability or obligation of Sellers arising from any
cause of action, litigation, suit, arbitration, proceeding or investigation
to the extent based upon any action or omission or alleged action or omission
occurring prior to the Closing, including any infringement or alleged
infringement of intellectual property rights of other Persons or any
violation or alleged violation of any law, rule, regulation or code
(including those relating to protection of the environment and food and drug
regulation), in each case, to the extent such action or omission or alleged
action or omission occurs prior to the Closing;
(o) except as otherwise expressly provided herein or in any
Collateral Agreement, any liability or obligation of Sellers with respect to
the Tennessee Plant or the Xxxxxx Plant, including those relating to or
arising from any pre-Closing or post-Closing operations of such plants or any
pre-Closing operation of the Equipment or any shutdown or conversion of such
plants or the removal of Equipment therefrom; and
(p) except as otherwise expressly provided herein or in any
Collateral Agreement, any liability or obligation with respect to the Toledo
Plant prior to the Conversion Date, including those relating to or arising
from any operations of, or the shut down or conversion of, the Toledo Plant
prior to the Conversion Date.
2.7 MODIFICATION. In the event that the FTC conditions its approval of
the Provisional Consent Decree on, or otherwise requires, modification of this
Agreement or any Collateral Agreement, Buyer and Sellers agree to use their
reasonable best efforts to make or cause to be made such required modifications,
subject to Section 2.8; PROVIDED, HOWEVER, that Buyer shall not be required to
make or cause to be made any such required modifications if such required
modifications would reasonably be expected to have a material adverse effect on
Buyer or a Material Adverse Effect, and Sellers shall not be required to make or
cause to be made any such required modifications if such required modifications
would reasonably be expected to have a material adverse effect on either Seller.
2.8 RESCISSION. In the event that the FTC withdraws or conditions its
final approval of the Provisional Consent Decree in a manner, or otherwise
requires changes to this Agreement or any Collateral Agreements, that taken as a
whole are or would reasonably be expected to be materially adverse to any party
hereto, such party shall have the right to require that the transactions
consummated pursuant to this Agreement be rescinded and this Agreement and the
Collateral Agreements be terminated. If such party elects to rescind the
transactions, Sellers shall refund to Buyer the Purchase Price plus interest
from the Closing Date to the date of
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rescission at the Closing Date Interest Rate, and Buyer shall promptly take all
necessary steps to return title to and possession of the Assets to Sellers.
2.9 CLOSING INVENTORY STATEMENT.
(a) The target inventory of Sellers for purposes of this Agreement
is $51,500,000. Within thirty (30) days following the Closing Date, Sellers
shall prepare and deliver to Buyer a statement (the "Closing Inventory
Statement") setting forth the type and value, as of the Closing Date, of the
Inventory transferred to Buyer on the Closing Date pursuant to Sections 2.1
and 2.3(a), which statement shall be derived from a physical taking of such
Inventory as of the Closing Date and shall be prepared in a manner consistent
with the standards (the "Inventory Standards") set forth on SCHEDULE 2.9(a).
Buyer and its representatives shall have such opportunity as Buyer reasonably
deems appropriate to observe the taking and reconciliation of such Inventory
(which may begin prior to the Closing Date) in connection with the
preparation of the Closing Inventory Statement. Buyer shall provide Sellers
and their accountants full access to the books and records, to any other
information, including working papers of its accountants, and to any
employees of Buyer, in each case as may be reasonably necessary for Sellers
to prepare the Closing Inventory Statement, to respond to the Buyer's
Objection (as defined herein) and to prepare materials for presentation to
the CPA Firm (as defined herein) in connection with the matters contemplated
by Section 2.9(c).
(b) Buyer shall, within thirty (30) days after the delivery by
Sellers of the Closing Inventory Statement, complete its review thereof.
After delivery of the Closing Inventory Statement, Sellers shall provide
Buyer and its accountants full access to all books and records, to any other
information, including working papers of its accountants, and to any
employees of Seller, in each case used in the preparation of the Closing
Inventory Statement or as may otherwise be reasonably necessary for Buyer to
prepare the Buyer's Objection and to prepare materials for presentation to
the CPA Firm in connection with the matters contemplated by Section 2.9(c).
The Closing Inventory Statement shall be binding and conclusive upon, and
deemed accepted by, Buyer unless Buyer shall have notified Sellers in writing
within thirty (30) days after delivery of the Closing Inventory Statement of
any objection thereto (the "Buyer's Objection"). The Buyer's Objection shall
set forth a description of the basis of the Buyer's Objection and the
adjustments to the value of Inventory reflected on the Closing Inventory
Statement that Buyer believes should be made. Any items not disputed during
the foregoing thirty (30) day period shall be deemed to have been accepted by
Buyer.
(c) If Sellers and Buyer are unable to resolve all of their disputes
with respect to the Closing Inventory Statement within thirty (30) days
following Sellers' receipt of the Buyer's Objection to such Closing Inventory
Statement pursuant to Section 2.9(b), they shall refer their remaining
differences to Ernst & Young or, if such firm declines to act or at such time
has a significant ongoing relationship with either Seller, Buyer or any of
their respective Affiliates, an internationally recognized firm of
independent public accountants as to which Sellers and Buyer mutually agree
(the "CPA Firm") for decision, which decision shall be made consistent with
the Inventory Standards within forty-five (45) days and shall be final and
binding on the parties, PROVIDED that the CPA Firm's determination as to any
item set forth in Buyer's Objection shall not be more beneficial to Sellers
than the determination of that item by Sellers in the Closing Inventory
Statement or more beneficial to Buyer than the determination of that item
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in Buyer's Objection. Any expenses relating to the engagement of the CPA Firm
shall be shared equally by Sellers, on one hand, and Buyer, on the other hand.
Sellers and Buyer shall each bear the fees of their respective auditors incurred
in connection with the determination and review of the Closing Inventory
Statement.
(d) The Closing Inventory Statement shall become final and binding on
the parties upon the earliest of (i) if no Buyer's Objection has been given, the
expiration of the period within which Buyer must make its objection pursuant to
Section 2.9(b) hereof, (ii) agreement in writing by Sellers and Buyer that the
Closing Inventory Statement, together with any modifications thereto agreed to
by Sellers and Buyer, shall be final and binding and (iii) the date on which the
CPA Firm shall issue its written determination with respect to any dispute
relating to such Closing Inventory Statement. The Closing Inventory Statement,
as submitted by Sellers if no timely Buyer's Objection has been given or as
adjusted pursuant to any agreement between the parties or as determined pursuant
to the decision of the CPA Firm, when final and binding on all parties, is
herein referred to as the "Final Closing Inventory Statement."
(e) Within ten (10) Business Days following issuance of the Final
Closing Inventory Statement, the net adjustment payment payable pursuant to
this Section 2.9(e) (the "Adjustment Payment") and interest thereon shall be
paid by wire transfer of immediately available funds to a bank account or
bank accounts designated in writing by Sellers or Buyer, as the case may be;
PROVIDED, HOWEVER, that if the Adjustment Payment shall be payable by Sellers
to Buyer, in lieu of payment, Sellers may elect to credit the Adjustment
Payment against the initial payments required to be made by Buyer under the
Co-Pack Agreement; and PROVIDED, FURTHER, that if the Adjustment Payment
shall be payable by Buyer to Sellers, in lieu of payment, Buyer may elect to
add such payment to the payments due to Seller under the Co-Pack Agreement as
if an amount of Inventory equal to the Adjustment Payment were sold pursuant
to the Co-Pack Agreement. The Adjustment Payment shall be the difference, if
any, between (x) the value of Inventory, as reflected on the Final Closing
Inventory Statement, minus (y) $51,500,000. The Adjustment Payment shall be
payable by Buyer to Sellers, if positive, and by Sellers (who shall be
jointly and severally so obligated) to Buyer, if negative. The Adjustment
Payment shall bear interest from the Closing Date to the date of payment at
the Closing Date Interest Rate, which interest shall be calculated on the
basis of a 365-day year and the actual number of days elapsed and such
interest shall be paid on the same date and in the same manner as such
Adjustment Payment, PROVIDED that such interest shall not be imposed on
Sellers if they elect to credit the Adjustment Payment against the Co-Pack
Agreement and shall not be imposed on Buyer if it elects to add the
Adjustment Payment to the Payments due under the Co-Pack Agreement.
2.10 CONVERSION DATE INVENTORY.
(a) On the Conversion Date, General Xxxxx shall sell, convey,
transfer and assign to Buyer, or cause its Affiliates to sell, convey,
transfer and assign to Buyer, all inventory (including raw materials,
packaging and work-in-process) held by General Xxxxx at the Toledo Plant for
use of the Business (the "Conversion Date Inventory"). Within thirty (30)
days following the Conversion Date, General Xxxxx, on behalf of Sellers,
shall prepare and deliver to Buyer a statement setting forth the type and
value of such Conversion Date Inventory, as of the
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Conversion Date, to be transferred and assigned to Buyer on the Conversion
Date, which statement shall be derived from a physical taking of such
Conversion Date Inventory as of the Conversion Date and shall be prepared in a
manner consistent with the Inventory Standards (the "Conversion Date Inventory
Statement"). Buyer and its representatives shall have such opportunity as Buyer
reasonably deems appropriate to observe the taking and reconciliation of such
Conversion Date Inventory (which may begin prior to the Conversion Date) in
connection with the preparation of the Conversion Date Inventory Statement.
Buyer shall provide General Xxxxx and its accountants full access to the books
and records, to any other information, including work papers of its accountants,
and to any employees of Buyer, in each case as may be reasonably necessary for
General Xxxxx to prepare the Conversion Date Inventory Statement, to respond to
the Buyer's Conversion Date Objection (as defined herein) and to prepare
materials for presentation to the CPA Firm in connection with the matters
contemplated by Section 2.10(c).
(b) Buyer shall, within thirty (30) days after the delivery by General
Xxxxx of the Conversion Date Inventory Statement, complete its review thereof.
After delivery of the Conversion Date Inventory Statement, General Xxxxx shall
provide Buyer and its accountants full access to all books and records, to any
other information, including working papers of its accountants, and to any
employees of Sellers, in each case used in the preparation of the Conversion
Date Inventory Statement or as may otherwise be reasonably necessary for Buyer
to prepare the Buyer's Conversion Date Objection and to prepare materials for
presentation to the CPA Firm in connection with the matters contemplated by
Section 2.10(c). The Conversion Date Inventory Statement shall be binding and
conclusive upon, and deemed accepted by, Buyer unless Buyer shall have notified
General Xxxxx in writing within thirty (30) days after delivery of the
Conversion Date Inventory Statement of any objection thereto (the "Buyer's
Conversion Date Objection"). The Buyer's Conversion Date Objection shall set
forth a description of the basis of the Buyer's Conversion Date Objection and
the adjustments to the value of such Conversion Date Inventory reflected on the
Conversion Date Inventory Statement that Buyer believes should be made. Any
items not disputed during the foregoing thirty (30) day period shall be deemed
to have been accepted by Buyer.
(c) If General Xxxxx and Buyer are unable to resolve all of their
disputes with respect to the Conversion Date Inventory Statement within thirty
(30) days following General Xxxxx' receipt of the Buyer's Conversion Date
Objection to such Conversion Date Inventory Statement pursuant to Section
2.10(b), they shall refer their remaining differences to the CPA Firm for
decision, which decision shall be made consistent with the Inventory Standards
within forty-five (45) days and shall be final and binding on the parties,
PROVIDED that the CPA Firm's determination as to any item set forth in Buyer's
Conversion Date Objection shall not be more beneficial to General Xxxxx than the
determination of that item by General Xxxxx in the Conversion Date Inventory
Statement or more beneficial to Buyer than the determination of that item in
Buyer's Conversion Date Objection. Any expenses relating to the engagement of
the CPA Firm shall be shared equally by General Xxxxx, on the one hand, and
Buyer, on the other hand. General Xxxxx and Buyer shall each bear the fees of
their respective auditors incurred in connection with the determination and
review of the Conversion Date Inventory Statement.
(d) The Conversion Date Inventory Statement shall become final and
binding on the parties upon the earliest of (i) if no Buyer's Conversion Date
Objection has been given,
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the expiration of the period within which Buyer must make its objection pursuant
to Section 2.10(b) hereof, (ii) agreement in writing by General Xxxxx and Buyer
that the Conversion Date Inventory Statement, together with any modifications
thereto agreed to by General Xxxxx and Buyer, shall be final and binding and
(iii) the date on which the CPA Firm shall issue its written determination with
respect to any dispute relating to such Conversion Date Inventory Statement. The
Conversion Date Inventory Statement, as submitted by General Xxxxx if no timely
Buyer's Conversion Date Objection has been given or as adjusted pursuant to any
agreement between the parties or as determined pursuant to the decision of the
CPA Firm, when final and binding on all parties, is herein referred to as the
"Final Conversion Date Inventory Statement."
(e) Within ten (10) Business Days following issuance of the Final
Conversion Date Inventory Statement, the payment payable pursuant to this
Section 2.10(e) (the "Conversion Date Payment") and interest thereon shall be
paid by Buyer to General Xxxxx by wire transfer of immediately available funds
to a bank account or bank accounts designated in writing by General Xxxxx. The
Conversion Date Payment shall be equal to the value of the Conversion Date
Inventory as reflected on the Final Conversion Date Inventory Statement. The
Conversion Date Payment shall bear interest from the Conversion Date to the date
of payment at the Conversion Date Interest Rate, which interest shall be
calculated on the basis of a 365-day year and the actual number of days elapsed
and such interest shall be paid on the same date and in the same manner as such
Conversion Date Payment.
2.11 CONTRACT PERFORMANCE. With respect to any Assigned Contracts providing
for payments based upon performance over a time period that includes but does
not end on the Closing Date, such payments shall be prorated as between
Sellers, on the one hand, and Buyer, on the other hand, based on the number of
days in such period occurring on or prior to the Closing Date and the number of
days occurring after the Closing Date; PROVIDED, HOWEVER, that in the event that
performance under any such Assigned Contracts is to be effected
disproportionately over the period including but not ending on the Closing Date,
payments with respect to such Assigned Contracts shall be prorated as between
Sellers, on the one hand, and Buyer, on the other hand, based on the expected
portion of performance to be effected by Sellers, on the one hand, and Buyer, on
the other hand; PROVIDED, FURTHER, HOWEVER, that Sellers shall be responsible
for any payments for performance required to be performed as of the Closing with
respect to which Sellers shall have underperformed as of Closing.
2.12 NONASSIGNABILITY OF CONTRACTS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the sale, assignment, transfer, conveyance or
delivery to Buyer of any Assigned Contract or any claim or right or any benefit
arising thereunder or resulting therefrom is prohibited by applicable law or
would require any governmental or third-party authorizations, approvals,
consents or waivers, and such authorizations, approvals, consents or waivers
shall not have been obtained prior to the Closing, the Closing shall (subject to
the satisfaction or waiver of the conditions set forth in Article 8) proceed
without the sale, assignment, sublease, transfer, conveyance or delivery of such
Assigned Contract and this Agreement shall not constitute a sale, assignment,
sublease, transfer, conveyance or delivery of such Assigned Contract or an
attempt thereof. In the event that the Closing proceeds without the transfer,
sublease or assignment of such Assigned Contract, then following the Closing,
the parties shall use their reasonable best
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efforts, and cooperate with each other, to obtain promptly such authorizations,
approvals, consents or waivers; PROVIDED, HOWEVER, that neither Sellers nor
Buyer shall be required to pay any consideration for any such authorization,
approval, consent or waiver. Pending such authorization, approval, consent or
waiver, the parties shall cooperate with each other in any mutually agreeable,
reasonable and lawful arrangements (to the extent any such arrangements are
feasible) designed to provide to Buyer the benefits of such Assigned Contract
and to Sellers the benefits that they would have obtained had the Assigned
Contract been conveyed to Buyer at the Closing. To the extent that Buyer is
provided the benefits pursuant to this Section 2.12(a) of any Assigned Contract,
Buyer shall perform for the benefit of the other Persons that are parties
thereto the obligations of Sellers thereunder and any related liabilities that,
but for the lack of an authorization, approval, consent or waiver to assign such
liabilities to Buyer, would be Assumed Liabilities. Once authorization,
approval, consent or waiver for the sale, assignment, sublease, transfer,
conveyance or delivery of any such Assigned Contract not sold, assigned,
subleased, transferred, conveyed or delivered at the Closing is obtained,
Sellers shall assign, transfer, convey and deliver such Assigned Contract to
Buyer at no additional cost to Buyer. To the extent that any such Assigned
Contract cannot be transferred following the Closing pursuant to this Section
2.12(a), then Buyer and Sellers shall cooperate reasonably in an effort to find
and enter into mutually agreeable arrangements (including subleasing,
sublicensing or subcontracting), if feasible, to provide the parties the
economic (taking into account Tax costs and benefits) and operational
equivalent, to the extent permitted, of obtaining such authorization, approval,
consent or waiver and the performance by Buyer of the obligations thereunder.
Sellers shall hold in trust for and pay to Buyer promptly upon receipt thereof,
all income, proceeds and other monies received by Sellers in respect of Buyer's
performance of any such Assigned Contract (net of any Taxes and any other costs
imposed upon Sellers) in connection with the arrangements under this Section
2.12(a). Nothing stated in Section 2.12 shall modify in any respect the
conditions set forth in Article 8.
(b) If any such Assigned Contract is sold, assigned, transferred,
conveyed to Buyer at or after the Closing, Buyer shall use its reasonable best
efforts thereafter to assist (including providing to Sellers access to any
applicable information and records) in the transfer to Sellers of such portion,
if any, of any such Assigned Contract or of the benefits thereof, that does not
relate to the Business on terms that, taken as a whole, for all such transfers
are not materially less advantageous to Sellers than would exist if such
transferred portions were stand alone contracts. Upon any such transfer, Sellers
shall assume any liabilities and obligations related to the transferred portion
of such Assigned Contract.
(c) To the extent the transfer to Sellers of such portion of any such
Assigned Contract that does not relate to the Business pursuant to Section
2.12(b) is prohibited by applicable law or would require any governmental or
third-party authorizations, approvals, consents or waivers, the parties shall
use their reasonable best efforts, and cooperate with each other, to obtain
promptly such authorizations, approvals, consents or waivers; PROVIDED, HOWEVER,
that neither Sellers nor Buyer shall be required to pay any consideration for
any such authorization, approval, consent or waiver. Pending such authorization,
approval, consent or waiver, the parties shall cooperate with each other in any
mutually agreeable, reasonable and lawful arrangements (to the extent any such
arrangements are feasible) designed to provide to Sellers the benefits of such
portion of any such Assigned Contract that does not relate to the Business. To
the extent that Sellers are provided the benefits pursuant to this Section
2.12(c) of
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any portion of any such Assigned Contract, Sellers shall perform for the
benefit of the other Persons that are parties thereto the obligations of
Buyer thereunder and any related liabilities that, but for the lack of an
authorization, approval, consent or waiver to assign such liabilities to
Sellers, would have become liabilities of Sellers by virtue of the transfer
of such portion of such Assigned Contract. Once authorization, approval,
consent or waiver for the transfer of any such portion of any such Assigned
Contract is obtained, Buyer shall transfer such portion of any such Assigned
Contract to Sellers at no additional cost to Sellers. To the extent that any
such portion of any such Assigned Contract cannot be transferred pursuant to
this Section 2.12(c) to Sellers, then Buyer and Sellers shall cooperate
reasonably in an effort to find and enter into mutually agreeable
arrangements (including subleasing, sublicensing or subcontracting), if
feasible, to provide the parties the economic (taking into account Tax costs
and benefits) and operational equivalent, to the extent permitted, of
obtaining such authorization, approval, consent or waiver and the performance
by Sellers of the obligations thereunder. Buyer shall hold in trust for and
pay to Sellers promptly upon receipt thereof, all income, proceeds and other
monies received by Buyer in respect of Sellers' performance of any such
portion of any such Assigned Contract (net of any Taxes and any other costs
imposed upon Buyer) in connection with the arrangements under this Section
2.12(c).
2.13 DIVIDABLE CONTRACTS.
(a) Sellers shall use their reasonable best efforts to assist in the
transfer to Buyer of such portion of each Dividable Contract or the benefits
thereof that relates to the Business on terms that, taken as a whole, for all
such transfers are not materially less advantageous to Buyer than would exist
if such transferred portions were stand alone contracts. Upon such transfer,
Buyer shall assume any liabilities and obligations related to the transferred
portion of such Dividable Contract. Reasonable best efforts shall include a
written reasoned recommendation in favor of such transfer to the customer or
supplier that is the other party to such Dividable Contract, the provision to
Buyer of all information and records available to Sellers relating to
customers or suppliers, as the case may be, with respect to such portion of
such Dividable Contract, the provision to Buyer of available customer or
supplier contact data and information on the customer or supplier decision
maker(s) with respect to such portion of such Dividable Contract and, if
Buyer so requests in accordance with reasonable commercial practice, the
organization of joint visits with Buyer and Sellers to such customers or
suppliers, subject, in each case, to any applicable confidentiality
agreements or obligations of Sellers or any of their Affiliates.
(b) Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the transfer to Buyer of the portion of any
Dividable Contract that relates to the Business or any claim or right or any
benefit arising thereunder or resulting therefrom, is prohibited by
applicable law or would require any governmental or third-party
authorizations, approvals, consents or waivers, and such authorizations,
approvals, consents or waivers shall not have been obtained prior to the
Closing, the Closing shall (subject to the satisfaction or waiver of the
conditions set forth in Article 8) proceed without the transfer of any such
portion of any such Dividable Contract and this Agreement shall not
constitute a transfer of such portion of any such Dividable Contract or an
attempt thereof. In the event that the Closing proceeds without the transfer
of any such portion of any such Dividable Contract, then following the
Closing, the parties shall use their reasonable best efforts, and cooperate
with each other, to obtain promptly
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such authorizations, approvals, consents or waivers; PROVIDED, HOWEVER, that
neither Sellers nor Buyer shall be required to pay any consideration for any
such authorization, approval, consent or waiver. Pending such authorization,
approval, consent or waiver, the parties shall cooperate with each other in
any mutually agreeable, reasonable and lawful arrangements (to the extent any
such arrangements are feasible) designed to provide to Buyer the benefits of
such portion of any such Dividable Contract, with respect to the portion of
such Dividable Contract applicable to the Business, and to Sellers the
benefits that they would have obtained had such portion of such Dividable
Contract been transferred to Buyer at the Closing. To the extent that Buyer
is provided the benefits pursuant to this Section 2.13 of any portion of any
such Dividable Contract, Buyer shall perform for the benefit of the other
Persons that are parties thereto the obligations of Sellers thereunder and
any related liabilities that, but for the lack of an authorization, approval,
consent or waiver to assign such liabilities to Buyer, would have become
liabilities of Buyer by virtue of the transfer of such portion of such
Dividable Contract. Once authorization, approval, consent or waiver for the
transfer of any such portion of any such Dividable Contract not transferred
at the Closing is obtained, Sellers shall transfer such portion of any such
Dividable Contract to Buyer at no additional cost to Buyer. To the extent
that any such portion of any such Dividable Contract cannot be transferred
following the Closing pursuant to this Section 2.13, then Buyer and Sellers
shall cooperate reasonably in an effort to find and enter into mutually
agreeable arrangements (including subleasing, sublicensing or
subcontracting), if feasible, to provide the parties the economic (taking
into account Tax costs and benefits) and operational equivalent, to the
extent permitted, of obtaining such authorization, approval, consent or
waiver and the performance by Buyer of the obligations thereunder. Sellers
shall hold in trust for and pay to Buyer promptly upon receipt thereof, all
income, proceeds and other monies received by Sellers in respect of Buyer's
performance of any such portion of any such Dividable Contract (net of any
Taxes and any other costs imposed upon Sellers) in connection with the
arrangements under this Section 2.13. Nothing stated in Section 2.13 shall
modify in any respect the conditions set forth in Article 8.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EACH SELLER
Each Seller, severally, for itself hereby represents and warrants to Buyer as
follows:
3.1 SELLER'S AUTHORITY; NO CONFLICTS; GOVERNMENTAL CONSENTS.
(a) Such Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and such Seller
further represents and warrants that Windmill is a corporation duly
organized, validly existing and in good standing under the laws of
California. Such Seller (and, to the extent applicable, each of such Seller's
Subsidiaries) has all requisite corporate power and authority to enter into
this Agreement and the Collateral Agreements, as applicable, to consummate
the transactions contemplated hereby and thereby, to own the Assets or the
Xxxxx Xxxx Assets owned by it and to carry on the portion of the Business and
the Xxxxx Xxxx Business presently conducted by it, and such Seller further
represents and warrants that Windmill has all requisite corporate power and
authority to own the assets owned by Windmill. Each Seller (or Seller's
applicable Subsidiaries) is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which Assets or Xxxxx Xxxx Assets
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owned by it or the Business and the Xxxxx Xxxx Business otherwise conducted
by it (and such Seller further represents and warrants that Windmill is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which its ownership of assets or conduct of business) would
legally require such qualification or license, except where the failure to be
so qualified or licensed or in good standing, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect. All corporate acts and other proceedings required to be taken by such
Seller (or Seller's applicable Subsidiaries) to authorize the execution,
delivery and performance of this Agreement and the Collateral Agreements and
the consummation of the transactions contemplated hereby and thereby have
been (or, in the case of the applicable Subsidiaries, will be) duly and
properly taken. This Agreement has been (and the Collateral Agreements, as
applicable, at the Closing will be) duly executed and delivered by such
Seller (or Seller's applicable Subsidiaries) and, assuming the due execution
hereof (and thereof) by Buyer, this Agreement constitutes (and each of the
Collateral Agreements, as applicable, when executed and delivered, will
constitute) the valid and binding obligation of such Seller (or Seller's
applicable Subsidiaries) enforceable against such Seller (or Seller's
applicable Subsidiaries) in accordance with its terms, except as enforcement
hereof or thereof may be limited by applicable bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and by general
equitable principles. Such Seller further represents and warrants that such
Seller has delivered to Buyer true and correct copies of the charter, bylaws,
minutes of all shareholder, board of director and committee meetings and
written actions in lieu thereof, and stock records of Windmill, together with
a list of all current directors and officers thereof.
(b) The execution, delivery and performance by such Seller (or
Seller's applicable Subsidiaries) of this Agreement and the Collateral
Agreements, as applicable, will not (i) violate or conflict with any
provision of such Seller's (or such Subsidiary's) certificate of
incorporation or bylaws; (ii) violate or conflict with any provision of, or
be an event that is (or with the passage of time will result in) a violation
of, or require any notice, consent or increase in payments under, or result
in the acceleration, termination, modification or cancellation of or entitle
any party to accelerate, terminate, modify or cancel (whether after the
giving of notice or lapse of time or both) any obligation under, or result in
the imposition of any lien upon or the creation of a security interest in any
of the Assets or the Xxxxx Xxxx Assets pursuant to, any Assigned Contract,
Purchase Order, Lien, lease, agreement, instrument, order, arbitration award,
judgment, injunction, order or decree or any governmental approval, license
or permit to which such Seller (or Seller's applicable Subsidiaries) is a
party or to or by which it or any Assets or the Xxxxx Xxxx Assets owned by it
is subject or bound; or (iii) violate or conflict with any statute, rule or
regulation of any Governmental Entity applicable to such Seller or any of its
properties or assets or any other material restriction of any kind or
character to which such Seller (or Seller's applicable Subsidiaries) or any
Assets or the Xxxxx Xxxx Assets owned by it is subject, except, in the case
of clauses (ii) and (iii), for violations, accelerations, terminations,
modifications, cancellations, notices, consents, impositions, conflicts,
restrictions or breaches that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect or prohibit or
materially impair the ability of such Seller (or Seller's applicable
Subsidiaries) to consummate the transactions hereunder.
3.2 TITLE TO TANGIBLE ASSETS. Such Seller (or Seller's applicable
Subsidiaries) has good and marketable title to the tangible Assets and Xxxxx
Xxxx Assets purported to be owned by such Seller (or Seller's applicable
Subsidiaries), free and clear of all mortgages, liens, security
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interests or encumbrances of any nature whatsoever ("Liens"), except inchoate
mechanics', carriers', workmen's, repairmen's or other like Liens that are
not delinquent arising or incurred in the ordinary course of business or
liens for Taxes that are not due and payable or that are due but not
delinquent (collectively, the "Permitted Liens"). All of the Stock is validly
issued, fully paid and nonassessable and was not issued in violation of any
preemptive rights. There is a total of 8,000 shares of Series A Common Stock
and Series B Common Stock of Windmill outstanding, constituting the only
outstanding capital stock of Windmill. No options, warrants or other rights
to purchase capital stock of Windmill or of any securities convertible into
or exchangeable for capital stock of Windmill, and no securities convertible
for or exchangeable into capital stock of Windmill, are outstanding. There
are no outstanding rights to purchase outstanding stock of Windmill other
than this Agreement and such Seller (and any applicable Subsidiary of Seller)
has not granted any voting rights with respect to the Stock. As of the
Closing Date, all of the Stock shall be owned, directly or indirectly, by
such Seller (or Seller's applicable Subsidiaries), free and clear of any
Liens except Permitted Liens.
3.3 INTELLECTUAL PROPERTY.
(a) Except as disclosed on SCHEDULE 3.3(a), such Seller (or Seller's
applicable Subsidiaries), directly or indirectly, is the registered owner of
the Assigned Trademarks, Assigned Patents, other Intellectual Property and
Licensed Trademarks and Patents and Windmill Intellectual Property and that
are purported to be owned by such Seller (or Seller's applicable
Subsidiaries), and has good and marketable title to such Assigned Trademarks,
Assigned Patents, other Intellectual Property and Licensed Trademarks and
Patents and Windmill Intellectual Property. Except as disclosed on SCHEDULE
3.3(a), the Licensed Trademarks and Patents and Intellectual Property and
Windmill Intellectual Property purported to be owned by such Seller (or
Seller's applicable Subsidiaries) are free and clear of all material
restrictions, security interests, court orders, injunctions, decrees, writs
or other Liens, whether by written agreement or otherwise. Except as
disclosed on SCHEDULE 3.3(a), no Person other than such Seller (or Seller's
applicable Subsidiaries) owns or has been granted any material right in the
Intellectual Property and Windmill Intellectual Property purported to be
owned by such Seller (or Seller's applicable Subsidiaries) or, to the extent
it would interfere with Sellers' license thereof to Buyer under the Trademark
License Agreements or the Patent and Technology License Agreements or
adversely affect the value of such license, the Licensed Trademarks and
Patents. Except as to infirmities arising from non-use as disclosed on
SCHEDULE 3.3(a), all Assigned Trademarks, Assigned Patents, other
Intellectual Property and Licensed Trademarks and Patents and Windmill
Intellectual Property purported to be owned by such Seller (or Seller's
applicable Subsidiaries) are subsisting and such Seller (or Seller's
applicable Subsidiary) has taken all action reasonably necessary to maintain
and protect the Intellectual Property and the Licensed Trademarks and Patents
and Windmill Intellectual Property purported to be owned by such Seller (or
Seller's applicable Subsidiaries). Except as disclosed on SCHEDULE 3.3(a),
the "Pillsbury," "Hungry Xxxx," and "Xxxxxx Xxxxx" trademarks, and the
"Barrelhead" logo, and trade secrets included within the Intellectual
Property and Windmill Intellectual Property, in each case purported to be
owned by such Seller (or Seller's applicable Subsidiaries), are valid, and
all other Assigned Trademarks, Assigned Patents, other Intellectual Property
and Licensed Trademarks and Patents and Windmill Intellectual Property
purported to be owned by such Seller (or Seller's applicable Subsidiaries)
are, to such Seller's Knowledge, valid. Except as disclosed on SCHEDULE
3.3(a), there are no actions that must be taken within one hundred fifty
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(150) days after the date hereof, including the payment of any registration,
maintenance, annuity, or renewal fees or the filing of any responses to PTO
actions, in order to register, maintain or renew any of the Assigned
Trademarks, Assigned Patents or Windmill Intellectual Property. Except as
disclosed on SCHEDULE 3.3(a), the use of the "Pillsbury," "Hungry Xxxx," and
"Xxxxxx Xxxxx" trademarks, and the "Barrelhead" logo, and trade secrets
included within the Intellectual Property, in each case purported to be owned
by such Seller (or Seller's applicable Subsidiaries), and, to such Seller's
Knowledge, the use of all other Intellectual Property and the Licensed
Trademarks and Patents and Windmill Intellectual Property, in each case
purported to be owned by such Seller (or Seller's applicable Subsidiaries),
in the Business and the Xxxxx Xxxx Business and the conduct of the Business
and the Xxxxx Xxxx Business as presently conducted by such Seller do not
infringe on or violate the rights of any other party in a manner that would
have a Material Adverse Effect. Except as disclosed on SCHEDULE 3.3(a), such
Seller has not received any written claim or notice alleging any such
infringement or violation during the past 24 months (including any written
claim that such Seller must license or refrain from using the intellectual
property rights of any third party) nor, to such Seller's Knowledge, is there
any threatened claim or any reasonable basis for any such claim. The Assigned
Trademarks, Assigned Patents, other Intellectual Property and Licensed
Trademarks and Patents and Windmill Intellectual Property are all of the
intellectual property necessary to conduct the Business immediately after the
Closing as it is currently conducted by Sellers, subject to any limits on
Territory or distribution channels contemplated by the Trademark License
Agreements and the Patent and Technology License Agreements; provided,
however, that any intellectual property provided to Buyer pursuant to the
Transition Services Agreement or Co-Pack Agreement is being provided to Buyer
only for the applicable term of the Transition Services Agreement or Co-Pack
Agreement, as the case may be.
(b) Except as specified on SCHEDULE 3.3(b), there is no litigation
or proceeding (judicial or administrative) pending, or, to such Seller's
Knowledge, threatened by or against such Seller or any of its applicable
Subsidiaries challenging the registration, grant, validity, enforceability or
use of the Intellectual Property or Windmill Intellectual Property, or, to
the extent it would in any way interfere with such Seller's or any of its
applicable Subsidiaries' license of the Licensed Trademarks and Patents to
Buyer under the Trademark License Agreements or the Patent and Technology
License Agreements or adversely affect the value of the license thereof to
Buyer, challenging the registration, grant, validity, enforceability or use
of the Licensed Trademarks and Patents; and no litigation or proceeding is
otherwise pending by or against such Seller or any of its applicable
Subsidiaries alleging infringement or violation with respect to the use, or
challenging the validity or enforceability, of any of the Intellectual
Property or Windmill Intellectual Property or, to the extent it would
interfere with such Seller's or any of its applicable Subsidiaries' license
thereof to Buyer or adversely affect the value of that license, the Licensed
Trademarks and Patents, or with regard to the infringement of or violation by
the Business or the Xxxxx Xxxx Business of any rights of third parties, nor,
to such Seller's Knowledge, is there any such litigation or proceeding
threatened or any reasonable basis for any such litigation or proceeding. To
such Seller's Knowledge, no Person is infringing upon or violating the
Intellectual Property or Windmill Intellectual Property or infringing upon or
violating the Licensed Trademarks and Patents in a manner that would
adversely affect the value of the license to Buyer of the Licensed Trademarks
and Patents. Except in connection with co-manufacturing or other agreements
relating to the manufacture of the Products, and except as specified on
SCHEDULE 3.3(b), no Person has been granted any license or other right or
interest by
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such Seller to any of the Intellectual Property or Windmill Intellectual
Property or to the Licensed Trademarks and Patents that would be materially
inconsistent with or in any way materially interfere with or impair Buyer's
use thereof or the transactions contemplated by this Agreement and no Person
has been granted any license to or other right or interest by such Seller or
any of its applicable Subsidiaries in any Assigned Trademarks, Assigned
Patents or Windmill Intellectual Property.
3.4 ACTIONS AND PROCEEDINGS. Except as set forth on SCHEDULE 3.4,
there are no (a) outstanding judgments, orders, writs, injunctions or decrees
of any court, other Governmental Entity or arbitration tribunal relating to
the Business, the Xxxxx Xxxx Business, the Assets, the Xxxxx Xxxx Assets, any
Product or any Xxxxx Xxxx Product that has had or would reasonably be
expected to have a Material Adverse Effect, or to prohibit or materially
impair the ability of such Seller to consummate the transactions hereunder or
(b) actions, suits, claims or legal, administrative or arbitration
proceedings or investigations pending or, to such Seller's Knowledge,
threatened against such Seller (or its applicable Subsidiaries) which relate
to the Business, the Xxxxx Xxxx Business, the Assets, the Xxxxx Xxxx Assets,
any Product or any Xxxxx Xxxx Product or which seek any injunctive relief
that would reasonably be expected to have a Material Adverse Effect or
prohibit or materially impair the ability of such Seller to consummate the
transactions hereunder. To such Seller's Knowledge, there are no
investigations by any Governmental Entity pending or threatened which relate
to the Business, the Xxxxx Xxxx Business, the Assets, the Xxxxx Xxxx Assets,
any Product or any Xxxxx Xxxx Product.
3.5 CONTRACTS. Such Seller has delivered to Buyer current and
complete copies of the documents constituting all Contracts to which such
Seller (or its applicable Subsidiaries) is subject (and summaries of oral
Contracts). Except for such Contracts, there are no contracts or agreements
(written or verbal) exclusively or primarily relating to the Business: (a)
involving annual payments in excess of $100,000, (b) with a term in excess of
one year, (c) that constitute a joint venture or partnership, (d) which are
terminable by, or result in materially increased payments or obligations to,
the other party upon assignment to Buyer, (e) that are a lease or sublease of
any real property or material personal property, (f) with any officer,
director or employee of such Seller or any Affiliate of such Seller, (g) that
are a private label, supply, co-pack, broker, advertising, promotional or
marketing agreement, (h) that are requirements contracts, sole source
contracts or otherwise provide for exclusivity, (i) that grant a license by
or to Seller (or its applicable Subsidiaries), (j) with any Governmental
Entity or contractor or subcontractor to a Governmental Entity, or (k) that
are otherwise material to the Business and entered into not in the ordinary
course. Except as otherwise specified on SCHEDULE 3.5, each Contract and each
Purchase Order, whether or not constituting a Contract, is a valid and
binding obligation of such Seller (or its applicable Subsidiaries), to the
extent such Seller (or its applicable Subsidiaries) is a party thereto, and,
to such Seller's Knowledge, of each other party thereto in accordance with
its respective terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles. Such Seller or one of its Subsidiaries has performed all
obligations required to be performed by it to date under such Contracts or
Purchase Orders, and neither such Seller or any of its Subsidiaries, nor, to
such Seller's Knowledge, any other party to such Contracts or Purchase Orders
is (with or without the lapse of time or the giving of notice, or both) in
breach or default thereunder, except for failures to perform or breaches and
defaults that, individually or in the aggregate, would not reasonably be
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expected to have a Material Adverse Effect or prohibit or materially impair
the ability of such Seller to consummate the transactions hereunder. Except
as set forth in SCHEDULE 3.5, neither such Seller nor any of its applicable
Subsidiaries is prohibited or limited by any contract or other agreement from
using, manufacturing, producing, packaging or selling the Inventory,
Conversion Date Inventory or any Product and is restricted by agreement or
otherwise as to competition with respect to the Business, including as to the
geographical area in which it may sell Inventory, Conversion Date Inventory
or Products or the type of products relating to the Business that it may
sell, except for restrictions that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect, nor is such
Seller or any of its applicable Subsidiaries subject to any such agreement
with respect to the Xxxxx Xxxx Business, Xxxxx Xxxx Transfer Date Inventory
or the Xxxxx Xxxx Products that would be binding on Buyer as a result of the
transactions contemplated hereby, except for restrictions that, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.
3.6 COMPLIANCE WITH APPLICABLE LAWS.
(a) Except as disclosed on SCHEDULE 3.6, since January 1,
1999, the Business has been conducted in compliance with all applicable
statutes, laws, ordinances, rules, orders and regulations of all Governmental
Entities (including the Food, Drug and Cosmetics Act and those relating to
environmental protection and occupational safety and health), except for any
such noncompliance as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect or prohibit or materially
impair the ability of such Seller to consummate the transactions hereunder.
Except as set forth in SCHEDULE 3.6, all governmental approvals, permits and
licenses required to conduct the Business have been obtained and are in full
force and effect and are being complied with in all respects except for such
failures to have approvals, permits and licenses or such non-compliance
which, individually or in the aggregate, would not have a Material Adverse
Effect.
(b) The Internal Revenue Service has issued a favorable
determination letter with respect to the Retirement Plan of General Xxxxx,
Inc. and the Bakery, Confectionary, Tobacco and Grain Millers (BCTGM) (the
"General Xxxxx Toledo Plan") and the related trust that has not been revoked,
and to such Seller's Knowledge, there are no existing circumstances, and no
events have occurred, that could adversely affect the qualified status of the
plan or the related trust under Section 401(a) of the Code.
3.7 BROKERS. There is no broker or other Person who would have any
valid claim against Buyer for a finder's fee or broker's fee or commission in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by or on behalf of such
Seller. Such Seller shall be solely responsible for all fees and expenses of
Xxxxxxxxx & Co. LLC and any other broker, finder or other Person engaged by
or on behalf of it or otherwise claiming through it in connection with the
transactions contemplated by this Agreement.
3.8 INVENTORY. At the Closing, the Conversion Date or the Xxxxx Xxxx
Transfer Date, as applicable, the Inventory, the Conversion Date Inventory
and the Xxxxx Xxxx Transfer Date Inventory, respectively, will (A) be
current, non-obsolete, neither damaged nor defective, saleable in the
ordinary course and merchantable and fit for the purpose for which it was
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procured or manufactured, and (B) meet applicable manufacturing
specifications and be suitable for use in the Business or the Xxxxx Xxxx
Business, as applicable. Without limiting the foregoing, at such dates, none
of the Inventory, the Conversion Date Inventory or the Xxxxx Xxxx Transfer
Date Inventory will be defective, infested, adulterated or otherwise
misbranded (within the meaning of the Food, Drug and Cosmetics Act or within
the meaning of any other applicable food and drug law), improperly packed or
stored or physically damaged, bear product expiration code dates on or prior
to the Closing Date, the Conversion Date or the Xxxxx Xxxx Transfer Date, as
applicable, or on or prior to the date such Inventory, Conversion Date
Inventory or Xxxxx Xxxx Transfer Date Inventory is expected to be sold or
used in the ordinary course of business or constitute articles which may not,
under the provisions of the Food, Drug and Cosmetics Act, be introduced into
interstate commerce. At the Closing, the Inventory will be at levels
sufficient for Buyer to conduct the Business in the ordinary course
consistent with past practice, taking into account the arrangements under
this Agreement and the Collateral Agreements, including the Co-Pack
Agreement. Since January 1, 1999, such Seller has purchased Inventory in the
ordinary course and in all material respects consistent with such Seller's
past practices.
3.9 RECENT EVENTS. Except as disclosed in SCHEDULE 3.9, from June
30, 2000 to the date hereof, such Seller (and each applicable Subsidiary of
Seller) has conducted the Business conducted by it in the ordinary and usual
course and has not, with respect to the Business or the Xxxxx Xxxx Business:
(a) sold, assigned, pledged, granted a security interest in, or otherwise
transferred or disposed of any of the assets used in the Business or the
Xxxxx Xxxx Business that, but for any disposition, would constitute Assets or
Xxxxx Xxxx Assets, other than sales in the ordinary course of business of
finished goods inventory, dispositions of equipment that is obsolete and
Permitted Liens; (b) terminated or materially amended any contract or
agreement that is material to the Business, taken as a whole; (c) suffered
any material damage, destruction or other casualty loss (whether or not
covered by insurance), and there has been no other condition, circumstance,
event or occurrence which would be reasonably likely to have a Material
Adverse Effect; (d) made any change in its accounting methods or principles
applicable to the Business; (e) made any material change in its practices
with respect to the manner and timing of payment of trade payables relating
to the Business or the collection of receivables relating to the Business;
(f) entered into any agreement or arrangement relating to the Business, other
than with respect to the Excluded Assets, with any Affiliate of such Seller;
(g) made any material change in the selling, pricing, advertising or
promotional practices of the Business inconsistent with prior practice; (h)
increased or decreased in any material respects the total number of Business
Employees or increased the compensation, bonuses or benefits payable or to
become payable to the Business Employees except for such increases in the
ordinary course of business consistent with past practice; (i) sold,
assigned, pledged, granted a security interest in, or otherwise transferred
or disposed of any of the Windmill Intellectual Property or assets that, but
for such disposition, would constitute Windmill Intellectual Property; or (j)
entered into any agreement to do any of the foregoing.
3.10 LIABILITIES. To such Seller's Knowledge, such Seller has no
liabilities with respect to which Buyer will become liable hereunder, except
for the Assumed Liabilities.
3.11 FINANCIAL INFORMATION. SCHEDULE 3.11 sets forth the audited
schedules of direct product contribution of each of the Pillsbury Food
Service Business and the Pillsbury Retail
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Business for the fiscal years ended June 30, 1998, 1999 and 2000, and the
unaudited schedules of direct product contribution of each of the Pillsbury
Food Service Business and Pillsbury Retail Business for the six months ended
December 31, 2000 (the "Financial Statements"). The Financial Statements
fairly present in all material respects the results of operations of such
portions of the Business for the periods set forth therein. The Financial
Statements have been prepared in accordance with GAAP consistently applied
during the periods involved, except the unaudited schedules of direct product
contribution of each of the Pillsbury Food Service Business and Pillsbury
Retail Business for the six months ended December 31, 2000 or as may be noted
therein. The Financial Statements do not include any direct product
contribution attributable to sales of Products outside of the Territory or
distribution channels of the Business.
3.12 LABOR MATTERS. SCHEDULE 3.12 hereto sets forth, as of the date
hereof, all agreements by such Seller with labor unions or associations
representing Business Employees. As of the date hereof, no strike, walkout or
other work stoppage or unionizing effort by or respecting the Business
Employees of such Seller is pending or, to such Seller's Knowledge,
threatened. Except as disclosed on SCHEDULE 3.12, such Seller is not involved
in or, to such Seller's Knowledge, threatened with any labor dispute,
arbitration, unfair labor practice claim, lawsuit or administrative
proceeding relating to labor matters involving Business Employees of such
Seller that would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect or prohibit or materially impair the
ability of such Seller to consummate the transactions hereunder.
3.13 SUPPLIERS AND CUSTOMERS. Except as disclosed in SCHEDULE 3.13,
to such Seller's Knowledge, none of the ten largest suppliers or customers of
the Business (by dollar volume) for the two most recent fiscal years, and no
other material supplier or customer of the portion of the Business conducted
by such Seller during such time period, has cancelled, or otherwise modified
in any manner which is materially adverse to such Seller, its business or
relationship with such Seller with respect to the Business or notified such
Seller of any intent to cancel or materially reduce its business with the
Business or otherwise materially change its relationship with the Business.
Such Seller has delivered to Buyer true, correct and complete copies of
reports prepared by Xxxxxxx reflecting such Seller's percent of all
nationwide commodity volume for all general retail stores and mass
merchandisers selling over $2 million per year by product by month for the
last two fiscal years and will deliver such reports for each month end prior
to Closing.
3.14 UNIVERSAL PRODUCT CODES. SCHEDULE 2.3(c)(i) and SCHEDULE
2.3(c)(ii) contain universal product codes of such Seller currently used in
the Business or the Xxxxx Xxxx Business. Such Seller is not using any such
ten-digit universal product code, taken as a whole, in any other business
other than the Business or the Xxxxx Xxxx Business; provided, however, that
to the extent such Seller is using any such ten-digit universal product code,
taken as a whole, in any other business other than the Business or the Xxxxx
Xxxx Business, then such Seller will cease such usage within 90 days after
the Closing.
3.15 RECALLS. Except as disclosed on SCHEDULE 3.15, since January 1,
1999, no products related to the Business or the Xxxxx Xxxx Business
conducted by such Seller have been recalled voluntarily or involuntarily or
have been "adulterated" or "misbranded" within the meaning of the Food, Drug
and Cosmetics Act, and no recall of any of such products is currently
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being considered by such Seller or, to such Seller's Knowledge, has been
requested, ordered or threatened by any Governmental Entity or other
authority or consumer group, and, to such Seller's Knowledge, there is no
reasonable basis therefor.
3.16 AFFILIATE TRANSACTIONS AND SHARED SERVICES. Except as disclosed
in SCHEDULE 3.16 and except with respect to services and arrangements that
are referenced in or will otherwise be addressed by this Agreement or any of
the Collateral Agreements, including the Transition Services Agreement, the
Toledo Plant Lease Agreement, the Conversion Plan Agreement and the Co-Pack
Agreement, (i) no Affiliate of such Seller or officer or director of either
such Seller or any Affiliate of such Seller provides or causes to be provided
to the Business any material assets, services or facilities or owns any
Assets and (ii) the Business does not provide or cause to be provided to any
such Affiliate, officer or director any material assets, services or
facilities. Except as disclosed in SCHEDULE 3.16 and except with respect to
services and arrangements that are referenced in or will otherwise be
addressed by this Agreement or any of the Collateral Agreements, including
the Transition Services Agreement, Toledo Plant Lease Agreement, the
Conversion Plan Agreement and the Co-Pack Agreement, the Business does not
share any material facilities or equipment with any other businesses of such
Seller or any Affiliate of such Seller and neither such Seller nor any
Affiliate of such Seller purchases material assets or services for, or
provides material products or services from, both the Business and any other
business conducted by such Seller or any Affiliate of such Seller pursuant to
any contract, agreement or otherwise.
3.17 EQUIPMENT. Except as disclosed in SCHEDULE 3.17 and except for
equipment with respect to the Xxxxx Xxxx Business, the Equipment, including
the Equipment to be transferred from the Tennessee Plant and the Xxxxxx Plant
to the Toledo Plant, constitutes all of the Equipment necessary to convert
raw materials into Products currently manufactured at the Tennessee Plant and
the Xxxxxx Plant in the manner in which the Business is currently conducted
and as contemplated under the Toledo Plant Lease Agreement and the Conversion
Plan Agreement. The Equipment is in good condition and repair (ordinary wear
and tear excepted), and none of the Equipment contains any substances or
materials defined as "hazardous" or "toxic" under any federal, state or local
law regulating or dealing with the protection of human health or the
environment.
3.18 TRADE PROGRAMS; PREPAYMENTS. Except as set forth in SCHEDULE
3.18, since January 1, 1999, such Seller has not, other than in the ordinary
course consistent with past practices, instituted or agreed to institute, or
been affected by, any coupon redemption, trade allowance, billback, award,
discount or other promotional incentive, rebate, volume guaranty,
non-employee performance bonus or other program with respect to the Business
for which such Seller has any actual or contingent unpaid liability. Except
as disclosed on SCHEDULE 3.18, neither such Seller nor any of its applicable
Subsidiaries has received any prepayments under any Contract, Purchase Order
or other contract or agreement relating to the Business with respect to
Products or services to be shipped or performed after the Closing.
3.19 TOLEDO PLANT. To such Seller's knowledge (i) since January 1,
1999, the Toledo Plant, and the business conducted thereat, has not received
any form of governmental assistance from the State of Ohio or any political
subdivision thereof, and there are no development or other agreements in
place with the State of Ohio or any political subdivision thereof, that would
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subject the occupant of the Toledo Plant to minimum Taxes or limit such
occupant's ability to protest Taxes, or subject such occupant to affirmative
action, living wage or other requirements or restrictions that Buyer would
not be subject to but for such assistance or agreements and (ii) there is no
circumstance or condition that would reasonably be expected to prevent the
transfer of Equipment from the Tennessee Plant and the Xxxxxx Plant and the
timely conversion of the Toledo Plant, including any required governmental
permits, authorizations or zoning waivers.
3.20 WARRANTIES. Except as set forth in SCHEDULE 3.20, such Seller
has not provided any form of express warranty to any customer with respect to
any of the Products or Xxxxx Xxxx Products since January 1, 1999.
3.21 SLOTTING ALLOWANCES. Since January 1, 1999, such Seller has not
paid any additional slotting allowances (generally defined in the grocery
industry as lump sum payments made by manufacturers to retailers in
connection with product introductions), or made payments pursuant to the
Pillsbury Introductory Merchandising Funds Policy, for placement of seasonal
cake mix and ready-to-spread frosting products packaged and sold for retail
placement of limited duration (I.E., products packaged and sold in connection
with holidays). To such Seller's Knowledge, no customers have notified Seller
of plans to change their policies with respect to slotting allowances. To
such Seller's Knowledge, the transactions contemplated hereby will not result
in any new or increased charges for slotting allowances for the Products
after the Closing Date or for the Xxxxx Xxxx Products after the Xxxxx Xxxx
Transfer Date. Subject to Section 7.14, Buyer shall be permitted to use such
Seller's existing universal product codes following the Closing with respect
to all Products, and following the Xxxxx Xxxx Transfer Date, with respect to
all Xxxxx Xxxx Products.
3.22 WINDMILL. Windmill has no employees, Subsidiaries or
investments in any other Person. Windmill owns no material assets other than
the Windmill Intellectual Property and conducts no business that is unrelated
to the Windmill Intellectual Property. For purposes of this Article 3 only,
all assets of Windmill shall be deemed to constitute Assets, notwithstanding
that the Stock, and not the assets of Windmill, will be transferred directly
to Buyer at Closing. As of the Closing Date, Windmill will have no material
liabilities, no indebtedness for borrowed money and no purchase money
indebtedness and will not be a party to any agreements or contracts of any
nature.
3.23 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Agreement (including the
Schedules and Exhibits hereto), neither such Seller nor any of its agents,
Affiliates or representatives, nor any other Person, makes or shall be deemed
to make any representation or warranty to Buyer, express or implied, at law
or in equity, on behalf of such Seller, and such Seller hereby disclaims any
such representation or warranty whether by such Seller or any of its or the
Business' respective officers, directors, employees, agents or
representatives or any other Person, with respect to the Business or the
execution and delivery of any of this Agreement or the transactions
contemplated hereby, notwithstanding the delivery or disclosure to Buyer or
any of its officers, directors, employees, agents or representatives or any
other Person of any documentation or other information by such Seller or any
of their or the Business' respective officers, directors, employees, agents
or representatives or any other Person with respect to any one or more of the
foregoing. Buyer hereby acknowledges and agrees that, except to the extent
specifically set forth in this
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Agreement (including the Schedules and Exhibits hereto), Buyer is purchasing
the Assets on an "as is, where is" basis. Without limiting the generality of
the foregoing, such Seller makes no representation or warranty regarding any
assets other than the Assets and any liabilities other than the Assumed
Liabilities, and none shall be implied at law or in equity.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
4.1 AUTHORITY; NO CONFLICTS; GOVERNMENTAL CONSENTS.
(a) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Buyer has all
requisite corporate power and authority to enter into this Agreement and the
Collateral Agreements and to consummate the transactions contemplated hereby
and thereby. All corporate acts and other proceedings required to be taken by
Buyer to authorize the execution, delivery and performance of this Agreement
and the Collateral Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly and properly taken. This
Agreement has been (and the Collateral Agreements at the Closing will be)
duly executed and delivered by Buyer and, assuming the due execution hereof
(and thereof) by the other parties thereto, this Agreement constitutes (and
each of the Collateral Agreements, when executed and delivered, will
constitute) the valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, except as enforcement hereof or thereof
may be limited by applicable bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and by general equitable principles.
(b) The execution, delivery and performance by Buyer of this
Agreement and the Collateral Agreements will not (i) violate or conflict with
any provision of the certificate of incorporation or by-laws of Buyer; (ii)
except as disclosed in SCHEDULE 4.1(b), violate, conflict with any provision
of, or be an event that is (or with the passage of time will result in) a
violation of, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or lapse of time or both) any
obligation under, or result in the imposition of any lien upon or the
creation of a security interest in any of Buyer's assets or properties
pursuant to, any mortgage, Lien, lease, agreement, instrument, order,
arbitration award, judgment, injunction or decree to which Buyer is a party
or by which Buyer is bound; or (iii) violate or conflict with any statute,
rule or regulation of any Governmental Entity applicable to Buyer or any of
its properties or assets or any other material restriction of any kind or
character to which Buyer is subject, except, in the case of clauses (ii) and
(iii), for violations, accelerations, impositions, conflicts, restrictions or
breaches that, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the financial condition of
Buyer or the ability of Buyer to consummate the transactions hereunder.
4.2 ACTIONS AND PROCEEDINGS. There are no (a) outstanding judgments,
orders, writs, injunctions or decrees of any court, other Governmental Entity
or arbitration tribunal against Buyer that would reasonably be expected to
have a material adverse effect on the financial condition of Buyer or the
ability of Buyer to consummate the transactions contemplated hereby;
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or (b) actions, suits or claims or legal, administrative or arbitration
proceedings or investigations pending or, to the knowledge of Buyer,
threatened against Buyer, that would reasonably be expected to have a
material adverse effect on the financial condition of Buyer or prohibit or
materially impair the ability of Buyer to consummate the transactions
contemplated hereunder.
4.3 AVAILABILITY OF FUNDS. Buyer has delivered to Sellers commitment
letters from Canadian Imperial Bank of Commerce and CIBC World Markets Corp.
for the aggregate amount of $650 million (the "Financing Commitment"), which
amount is sufficient to enable Buyer to consummate the transactions
contemplated by this Agreement. Buyer, based on conditions that are now
prevailing and that have been brought to Buyer's attention, knows of no
circumstance or condition that would prevent the availability at the Closing
of the requisite financing to consummate the transactions contemplated by
this Agreement on the terms set forth herein, as provided in the Financing
Commitment.
4.4 BROKERS. There is no broker or other Person who would have any
valid claim against Sellers for a finder's fee or broker's fee or commission
in connection with this Agreement or the transactions contemplated hereby as
a result of any agreement, understanding or action by or on behalf of Buyer.
Buyer shall be solely responsible for all fees and expenses of U.S. Bancorp
Xxxxx Xxxxxxx Inc. and any other broker, finder or other Person engaged by or
on behalf of it or otherwise claiming through it in connection with the
transactions contemplated by this Agreement.
4.5 QUALIFIED PLAN STATUS. The Internal Revenue Service has issued a
favorable determination letter with respect to the Retirement Plan of
International Multifoods Corporation for Specified Union-Represented
Employees (the "Multifoods Plan") and the related trust that has not been
revoked, and Buyer knows of no existing circumstances, and no events have
occurred, that could adversely affect the qualified status of the plan or the
related trust under Section 401(a) of the Code.
ARTICLE 5
COVENANTS OF EACH SELLER
Each Seller, severally, for itself, covenants and agrees as follows:
5.1 ACCESS. From the date of this Agreement and through the Closing,
such Seller will grant to, or cause to be granted to, Buyer and its
representatives, employees, counsel, accountants and prospective lenders
reasonable access, during normal business hours and upon reasonable notice,
to the personnel, properties, books and records of such Seller relating
primarily to the Business and the Assets and the transition of the Business
and the Assets to Buyer; PROVIDED that such access does not unreasonably
interfere with the normal operations of such Seller or the Business and Buyer
complies with any policies of the Business with respect to plant visits, and
PROVIDED FURTHER, that all requests for access through the Closing shall be
directed to Xxxxxx Xxxxxxx at Xxxxxxxxx & Co., LLC, 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000, or such other Person as such Seller shall
designate from time to time. Following the Closing, Buyer shall have similar
reasonable access, for legitimate business purposes (including the
preparation of financial statements and Tax returns), to the books and
records relating to the
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Business or the Toledo Plant that are retained by such Seller, but each
Seller may excise from such books and records made available to Buyer any
information that does not relate to the Business or the conversion of the
Toledo Plant under the Toledo Plant Lease Agreement (except to the extent
Buyer shall be entitled to such information under the Toledo Plant Lease
Agreement).
5.2 ORDINARY CONDUCT OF THE BUSINESS. Except as expressly
contemplated by the terms of this Agreement, from the date hereof to the
Closing, such Seller will cause the portion of the Business owned by such
Seller or any Subsidiary of such Seller to be conducted in the ordinary and
usual course and use reasonable best efforts to preserve the properties,
business and relationships of the Business with suppliers and customers of
the Business. Except as provided in this Agreement and without limiting the
foregoing, such Seller shall not, and shall not permit any Subsidiary of such
Seller to, without the prior written consent of Buyer:
(a) sell, assign or otherwise transfer or dispose of or abandon
any of the assets used in the Business or the Xxxxx Xxxx Business that, but
for any disposition, would constitute Assets or Xxxxx Xxxx Assets (except for
sales of finished goods inventory), or any assets that, but for any
disposition, would constitute Windmill Intellectual Property;
(b) pledge or grant any security interest in any of the Assets
or Xxxxx Xxxx Assets, or any of the Windmill Intellectual Property, in
connection with the borrowing of money or for the deferred purchase of any
property, or otherwise permit the imposition of a Lien on any of the Assets
or Xxxxx Xxxx Assets, or any of the Windmill Intellectual Property, other
than Permitted Liens;
(c) make any material changes in any coupon programs, trade
promotion activities, discount, rebate, incentive, volume guaranty,
non-employee performance policies or programs or similar programs, policies
or activities related to the Business, institute any new coupon programs,
trade promotion activities or discount, rebate, incentive, volume guaranty,
non-employee performance policies or programs or similar programs, policies
or activities pertaining to the Business, or otherwise make any material
change in the selling, pricing, advertising or promotional practices of the
Business, in each case, inconsistent with prior practice;
(d) make any material change in its practices with respect to
the manner and timing of payment of trade payables relating to the Business;
(e) make any material change in its practices with respect to
the collection of receivables relating to the Business;
(f) enter into any contracts or agreements relating to the
Business except in the ordinary course of business consistent with past
practice or any lease of any real property applicable to the Business;
terminate or materially amend any Contract; or enter into any agreement or
arrangement relating to the Business, other than with respect to the Excluded
Assets, with any Affiliate of such Seller;
(g) except as disclosed in SCHEDULE 3.9, increase in any manner
the compensation, bonuses or benefits payable or to become payable by such
Seller to any of the
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Business Employees other than in the ordinary course of business consistent
with past practice or enter into any employment or severance agreement with
or grant any severance or termination pay to any Business Employee other than
in accordance with existing policies;
(h) enter into agreements or arrangements for purchases of
Inventory not in the ordinary course or materially inconsistent with Seller's
past practices;
(i) make any material change in its accounting methods or
principles applicable to the Business, except as required by GAAP or
applicable law;
(j) make any material changes in any, or institute any new,
coupon programs or trade promotion activities related to the Xxxxx Xxxx
Business;
(k) make any new (or change any current) Tax election that is
specific and unique to Windmill with respect to Taxes affecting Windmill
(PROVIDED that nothing in this Section 5.2(k) shall prevent Sellers from
making (or changing) any Tax election generally applicable to members of a
consolidated, combined or unitary group of which Windmill is a member); or
(l) agree or commit to do any of the foregoing.
5.3 DELIVERY. Notwithstanding anything contained in this Agreement
to the contrary, at the Closing such Seller shall transfer to Buyer, and
shall cause its applicable Subsidiaries to transfer to Buyer, in each case
subject to any rights provided in any Collateral Agreement, the Formulations,
Specifications and Processing Instructions of the Pillsbury Retail Business,
and will license to Buyer, pursuant to the Food Service Patent and Technology
License Agreement, the Formulations, Specifications and Processing
Instructions of the Pillsbury Food Service Business and the Xxxxx Xxxx
Business.
5.4 ACCOUNTS RECEIVABLE. Such Seller shall promptly forward or cause
to be forwarded to Buyer any and all proceeds from accounts receivable
relating to the Products that are received by such Seller or its Subsidiaries
after the Closing Date with respect to receivables that arose from sales made
after the Closing Date and relating to the Xxxxx Xxxx Products that arose
from sales by Buyer after the Xxxxx Xxxx Transfer Date.
5.5 PAYMENTS. In the event that this Agreement is terminated (or
rescinded pursuant to Section 2.8) for any reason other than as a result of
any breach or failure to perform a covenant or other agreement hereof by
Buyer, then the Sellers shall pay Buyer an amount equal to the actual
documented out-of-pocket fees and expenses incurred by Buyer in connection
with this Agreement and the transactions contemplated hereby (including
commitment fees and expense reimbursement obligations incurred by Buyer in
connection with the Financing Commitment and the proposed financing described
therein) up to, in the event of termination of this Agreement prior to
Closing, a maximum of $7,000,000 or, in the event of rescission pursuant to
Section 2.8, a maximum of $23,000,000. Any such amounts shall be shared
equally by General Xxxxx, on the one hand, and Pillsbury, on the other hand.
5.6 CONFIDENTIAL INFORMATION. Except as otherwise provided herein or
in the Collateral Agreements, after the Closing Date, such Seller (i) shall,
and shall cause its
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Subsidiaries to, keep secret and retain in strictest confidence, and shall
not, and shall cause its Subsidiaries not to, use for the benefit of others,
and (ii) shall, and shall cause its Subsidiaries to, use reasonable best
efforts to not use for the benefit of such Seller or its Subsidiaries, in
each case, all confidential information to the extent relating to the
Business (or provided to it by Buyer pursuant to the Collateral Agreements),
except to the extent of the rights retained by such Seller or its
Subsidiaries pursuant to other provisions of this Agreement and the
Collateral Agreements and except that such Seller and its Subsidiaries shall
be permitted to use such confidential information for the benefit of such
Seller or its Subsidiaries in connection with other businesses currently
conducted by such Seller or its Subsidiaries in which such confidential
information is presently used (the "Confidential Information"), including
Formulations, Specifications and Processing Instructions, "know-how"
(including manufacturing methodologies, engineering data and designs,
historic and in-progress research and development), trade secrets, customer
lists, details of client or consultant contracts and other Assigned Contracts
and Purchase Orders, pricing policies, marketing plans or strategies, product
development techniques or plans, business acquisition plans, designs and
design projects, inventions and research projects, in each case to the extent
relating to the Business, the Assets or the Assumed Liabilities, and shall
not disclose such Confidential Information to anyone outside of Buyer except
with Buyer's express written consent. After the Closing Date, such Seller
shall also use all reasonable best efforts to keep secret and retain in
strictest confidence all trade secrets and other applicable information
provided to it by Buyer and its Affiliates as provided in the Collateral
Agreements, and shall not use for the benefit of others, and shall not
disclose, such information to anyone outside of Buyer except with Buyer's
express written consent. The parties agree that Sellers and their
Subsidiaries shall be deemed in compliance with this Section 5.6 so long as
they treat such Confidential Information in accordance with the applicable
policies and procedures for the maintenance of their own confidential and
proprietary information of the same type as in effect on the date hereof.
5.7 NOTICES. Subject to Section 7.1, such Seller will give all
notices to third parties, and will use its reasonable best efforts to obtain
any required third-party consents that Buyer reasonably may request in
connection with the transactions contemplated by this Agreement; PROVIDED
that neither Seller shall be obligated to incur any expenses (other than
incidental expenses) with respect to such notices and efforts.
5.8 EMPLOYEES.
(a) OFFERS OF EMPLOYMENT. Such Seller shall permit Buyer to make
offers of employment to the Closing Date Employees, effective as of the
Closing Date, and, except as otherwise provided in this Section 5.8(a), to
make offers of employment to the Toledo Employees, effective as of the
Conversion Date. Such Seller will take such steps as are reasonably necessary
to facilitate such offers of employment and the transition of Business
Employees who accept employment with Buyer, including providing Buyer with
reasonable access to Business Employees employed by such Seller or its
Affiliates for purposes of interviewing, offering employment, completing
pre-employment documents, explaining Buyer's employment-related rules and
benefits and other similar purposes. Closing Date Employees who accept offers
of employment from Buyer shall become employees of Buyer as of the Closing
Date. Toledo Employees who accept offers of employment from Buyer shall
become employees of Buyer as of the Conversion Date. Such Seller shall not
interfere with Business Employees'
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accepting employment with Buyer or seek to induce any Business Employee to
decline employment with Buyer.
(b) CONDUCT PRIOR TO CONVERSION DATE. Between the Closing Date
and the Conversion Date, General Xxxxx will use commercially reasonable
efforts to maintain the services and goodwill of Toledo Employees, including
continuing to employ such Toledo Employees, without layoffs or reductions in
compensation or benefits (other than any reductions applicable to the
similarly situated employees of Buyer), PROVIDED that nothing herein shall
limit the right of General Xxxxx to terminate Toledo Employees for
performance reasons or for cause in the ordinary course of business
consistent with past practice.
(c) ACCRUED PAID TIME OFF. At the Conversion Date, General Xxxxx
will provide Buyer with a schedule of Accrued Paid Time Off for Toledo
Employees who become employed by Buyer as of such date and will wire transfer
the dollar value of such Accrued Paid Time Off to the bank account designated
by Buyer. At the Closing Date, General Xxxxx will provide Buyer with a
schedule of Accrued Paid Time Off for Closing Date Employees who become
employed by Buyer as of such date and will provide for a credit against the
Purchase Price payable by Buyer equal to the dollar value of such Accrued
Paid Time Off.
(d) NO-HIRE PERIOD. Such Seller agrees that for a two-year
period after the Closing Date, with respect to Closing Date Employees, and
the Conversion Date, with respect to Toledo Employees, neither such Seller
nor any of its Affiliates shall hire any Business Employee who has become an
employee of Buyer or any of its Affiliates. Notwithstanding the foregoing,
the no-hire provision of this Section 5.8 shall not apply to any employee of
Buyer who is involuntarily terminated or laid off by Buyer or any of its
Affiliates.
(e) DEFINED CONTRIBUTION PLANS. Such Seller agrees that
effective as of the Conversion Date, all Toledo Employees who become employed
by Buyer as of such date shall be fully vested in their account balances in
the General Xxxxx VIP 401(k) Plan, and effective as of the Closing Date, all
Closing Date Employees who become employed by Buyer as of such date shall be
fully vested in their account balances in the defined contribution plan(s)
listed on SCHEDULE 5.8(e).
(f) DEFINED BENEFIT PLANS. Such Seller agrees that effective as
of the Conversion Date, all Toledo Employees who become employed by Buyer as
of such date shall be fully vested in their accrued benefits in the defined
benefit plan(s) listed on SCHEDULE 5.8(f), and effective as of the Closing
Date, all Closing Date Employees who become employed by Buyer as of such date
shall be fully vested in their accrued benefits in the defined benefit
plan(s) listed on SCHEDULE 5.8(f).
(g) COBRA. Such Seller understands that Sellers will be
responsible, to the extent applicable, for satisfying obligations under
COBRA, to provide continuation coverage to or with respect to any Business
Employee (employed by such Seller) in accordance with law with respect to any
"qualifying event" that occurs before such employee becomes an employee of
Buyer.
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(h) FLEXIBLE SPENDING PLANS. Such Seller understands that
Sellers shall maintain in effect any flexible spending plans in which
Business Employees maintain accounts until the close of the calendar year in
which such Business Employees are hired by Buyer. Each Business Employee
shall continue to seek reimbursement under the flexible spending plan of
Pillsbury or General Xxxxx, as applicable, throughout the close of the
calendar year in which the Business Employee is hired by Buyer.
5.9 TRANSFER OF EQUIPMENT TO AND CONVERSION OF TOLEDO PLANT. Each
Seller agrees to convert, at its sole responsibility and expense, all
portions of the Toledo Plant that are to be leased to Buyer under the Toledo
Plant Lease Agreement in accordance with the conversion plans and
specifications set forth in the Conversion Plan Agreement. Without limiting
the foregoing, each Seller, at its sole cost and expense, shall be
responsible for transferring to the Toledo Plant any Equipment purchased
pursuant hereto by Buyer from the Tennessee Plant and the Xxxxxx Plant and
for installing and making operational such Equipment in accordance with the
Conversion Plan Agreement. The parties agree that, while title to the
Equipment will pass to Buyer at the Closing Date, each Seller shall continue
to insure in accordance with its standard practices all Equipment that
remains in such Seller's possession until the Conversion Date as if such
Seller continued to own the Equipment. Sellers jointly and severally agree to
indemnify and hold Buyer harmless from any loss, damage or destruction to
such Equipment prior to the Conversion Date. Each Seller further agrees to
consult with Buyer regarding the conversion and to take such steps as Buyer
may reasonably request to implement the Conversion Plan (as defined in the
Conversion Plan Agreement) in accordance with its terms.
5.10 NON-USE OF NAME. From and after the Closing or, with respect to
the brand name "Xxxxx Xxxx," the Xxxxx Xxxx Transfer Date, neither Seller
shall use or permit any Affiliate of such Seller to use the brand names set
forth on SCHEDULE 5.10 or any derivative form thereof, in any business
conducted by either Seller or any of its Affiliates, except pursuant to the
Xxxxxx Xxxxx Trademark License Agreement or the Hungry Xxxx Trademark License
Agreement; PROVIDED, HOWEVER, that with respect to the brand name "Xxxxx
Xxxx," such Seller and its Affiliates may use such brand name or any
derivative form thereof with respect to inventory with respect to the Xxxxx
Xxxx Business necessary for General Xxxxx to fill purchase orders as set
forth more fully in Section 7.13(a).
5.11 NON-INTERFERENCE. Except as otherwise expressly contemplated by
this Agreement or the Collateral Agreements, prior to the Closing, neither
Seller will take, and each Seller will use its reasonable best efforts to
cause its Subsidiaries not to take, any action that is intended to discourage
any customer, supplier or other business associate of such Seller (or any of
its applicable Subsidiaries) with respect to the Business from maintaining
substantially the same business relationships with Buyer with respect to the
Business after the Closing as it maintained with such Seller (or any of its
applicable Subsidiaries) prior to the Closing.
5.12 FINANCIAL STATEMENTS. Twenty days after the date hereof,
Sellers shall deliver to Buyer (1) the audited balance sheets of each of the
Pillsbury Food Service Business and Pillsbury Retail Business as of each of
June 30, 1999 and 2000, (2) the unaudited balance sheet of each of the
Pillsbury Food Service Business and Pillsbury Retail Business as of December
31, 2000, (3) the unaudited statements of income of each of the Pillsbury
Food Service Business and Pillsbury Retail Business for the twelve months
ended March 31, 2000, (4) the unaudited
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statements of income of each of the Pillsbury Food Service Business and the
Pillsbury Retail Business for the six months ended December 31, 1999 and
2000, and the nine months and twelve months ended December 31, 2000, and (5)
the audited statements of income of each of the Pillsbury Food Service
Business and Pillsbury Retail Business for the fiscal years ended June 30,
1998, 1999 and 2000, each of which statements Pillsbury represents and
warrants to Buyer shall (i) fairly present in all material respects the
financial position of such portions of the Business as of their dates and the
results of operations of such portions of the Business for the periods set
forth therein (subject to normal year-end audit adjustments that will not be
material in amount or effect), (ii) have been prepared in accordance with
GAAP consistently applied during the periods involved and (iii) not deviate
in any material respects from the information of the same nature in the
financial statements delivered to Buyer heretofore to the extent such
financial statements delivered heretofore cover the same periods and material
covered in the financial statements being delivered.
5.13 NO SHOPPING. Prior to the Closing or any termination of this
Agreement in accordance with Article 10, neither Seller will, and each Seller
will cause its Affiliates not to, directly or indirectly, solicit, encourage,
facilitate, participate or engage in (including by way of furnishing any
nonpublic information concerning the business, properties, assets or books or
records of the Business or providing access to facilities at which Products
are produced), any Acquisition Proposal (as defined below). Each Seller
agrees to notify Buyer promptly if any Acquisition Proposal is received by
such Seller or any Affiliate of such Seller (including the identity of the
Person making such Acquisition Proposal and the terms of the Acquisition
Proposal). As used in this Agreement, "Acquisition Proposal" shall mean any
proposal (or inquiry relating to a possible proposal) received by such Seller
or any Affiliate of such Seller from a Person, other than Buyer or an
Affiliate of Buyer, for the acquisition, directly or indirectly, of a
substantial portion of the Business or the Assets (other than for the
acquisition of finished goods Inventory in the ordinary course of business of
such Seller consistent with past practice).
ARTICLE 6
COVENANTS OF BUYER
6.1 CONFIDENTIALITY. Buyer acknowledges that all information
provided to it by either Seller and its Affiliates, agents and
representatives is subject to the terms of a confidentiality agreement
between Buyer and Pillsbury (the "Confidentiality Agreement"), the terms of
which are incorporated herein by reference. Effective upon, and only upon,
the Closing, the Confidentiality Agreement will terminate only with respect
to information provided to Buyer or its Affiliates to the extent related to
the Business or the Xxxxx Xxxx Business, the Assets, the Xxxxx Xxxx Assets
and the Assumed Liabilities; and Buyer acknowledges that any and all
information provided to it by either Seller concerning either Seller (other
than information to the extent primarily related to the Business or the Xxxxx
Xxxx Business, the Assets, the Xxxxx Xxxx Assets and the Assumed Liabilities)
shall remain subject to the terms and conditions of the Confidentiality
Agreement after the date of the Closing. After the Closing Date, Buyer shall
also use all reasonable best efforts to keep secret and retain in strictest
confidence all trade secrets and other applicable information provided to it
by either Seller and its Affiliates as provided in the
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Collateral Agreements, and shall not use for the benefit of others, and shall
not disclose, such information to anyone outside of Sellers except with
Sellers' express written consent. The parties agree that Buyer shall be
deemed in compliance with this Section 6.1 so long as it treats such
Confidential Information in accordance with the applicable policies and
procedures for the maintenance of its own confidential and proprietary
information of the same type as in effect on the date hereof.
6.2 ACCOUNTS RECEIVABLE. Buyer shall promptly forward or cause to be
forwarded to General Xxxxx any and all proceeds from accounts receivable
relating to the Products sold on or prior to the Closing Date that are
received by Buyer after the Closing Date and that were outstanding as of the
Closing Date. Buyer shall promptly forward or cause to be forwarded to
General Xxxxx any and all proceeds from accounts receivable relating to the
Xxxxx Xxxx Products sold on or prior to the Xxxxx Xxxx Transfer Date that are
received by Buyer after the Xxxxx Xxxx Transfer Date and that were
outstanding as of the Xxxxx Xxxx Transfer Date or relating to Xxxxx Xxxx
Products sold after the Xxxxx Xxxx Transfer Date in connection with purchase
orders with respect to the Xxxxx Xxxx Business existing as of the Xxxxx Xxxx
Transfer Date, which purchase orders were filled by Sellers.
6.3 EMPLOYEES.
(a) OFFERS OF EMPLOYMENT TO CLOSING DATE EMPLOYEES. Buyer shall
offer employment, as of the Closing Date, to each Closing Date Employee to
whom Buyer wishes to offer employment, and will take such steps as are
reasonably necessary to facilitate the transition of each Closing Date
Employee who accepts employment with Buyer.
(b) OFFERS OF EMPLOYMENT TO TOLEDO EMPLOYEES. Buyer shall offer
employment, as of the Conversion Date, to each Toledo Employee to whom Buyer
wishes to offer employment, and will take such steps as are reasonably
necessary to facilitate the transition of each Toledo Employee who accepts
employment with Buyer.
(c) COLLECTIVE BARGAINING AGREEMENTS. Buyer agrees to negotiate
in good faith to provide Toledo Wage Employees (who are employed by Buyer)
with a collective bargaining or other labor agreement, effective as of the
Conversion Date, or as soon as reasonably practicable thereafter, that
contains terms and conditions no less favorable, in the aggregate, than those
applicable to such Toledo Wage Employees immediately prior to their
employment by Buyer pursuant to the agreements set forth at SCHEDULE 3.12. If
a collective bargaining agreement or other labor agreement described in the
immediately preceding sentence is not effective on the Conversion Date, the
initial terms and conditions of employment established by Buyer shall be no
less favorable, in the aggregate, than those applicable to the Toledo Wage
Employees immediately prior to their employment by Buyer pursuant to the
agreements set forth at SCHEDULE 3.12.
(d) CREDITING OF SERVICE FOR CLOSING DATE EMPLOYEES. From and
after the Closing Date, Buyer shall treat all service by Closing Date
Employees with Sellers and their respective predecessors prior to the Closing
Date for all purposes (including determination of seniority) as service with
Buyer (except for purposes of benefit accrual under defined benefit pension
plans or to the extent such treatment would result in duplicative accrual on
or after the
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Closing Date of benefits for the same period of service), and, with respect
to any medical or dental plan in which the Closing Date Employees participate
after the Closing Date, Buyer shall waive or cause to be waived any
pre-existing condition exclusions and actively-at-work requirements
(PROVIDED, HOWEVER, that no such waiver shall apply to a pre-existing
condition of any Closing Date Employee who was, as of the Closing Date,
excluded from participation in a comparable employee benefit plan of either
Seller due to a pre-existing condition), and shall provide that any covered
expenses incurred on or before the Closing Date during the plan year of the
applicable Seller plan in which the Closing Date occurs by a Closing Date
Employee or a Closing Date Employee's covered dependent shall be taken into
account after the Closing Date for purposes of satisfying applicable
deductible, coinsurance and maximum out-of-pocket provisions, as well as such
employee's annual benefit limits, if any (until the first anniversary of the
commencement of the plan year of the applicable Seller plan in which the
Closing Date occurs), in each case to the same extent that such expenses are
taken into account with respect to similarly situated employees of Buyer and
subsidiaries of Buyer.
(e) CREDITING OF SERVICE FOR TOLEDO EMPLOYEES. Except (with
respect solely to Toledo Wage Employees) to the extent otherwise agreed by
the union representing the Toledo Wage Employees, consistent with applicable
law , from and after the Conversion Date, Buyer shall treat all service by
Toledo Wage Employees and Toledo Salaried Employees with Sellers and their
respective predecessors prior to the Conversion Date for all purposes
(including determination of seniority) as service with Buyer (except, with
respect solely to the Toledo Salaried Employees, for purposes of benefit
accrual under defined benefit pension plans or to the extent such treatment
would result in duplicative accrual on or after the Conversion Date of
benefits for the same period of service), and, with respect to any medical or
dental plan in which the Toledo Employees participate after the Conversion
Date, Buyer shall waive or cause to be waived any pre-existing condition
exclusions and actively-at-work requirements (PROVIDED, HOWEVER, that no such
waiver shall apply to a pre-existing condition of any Toledo Employee who
was, as of the Conversion Date, excluded from participation in a comparable
employee benefit plan of either Seller due to a pre-existing condition), and
shall provide that any covered expenses incurred on or before the Conversion
Date during the plan year of the applicable Seller plan in which the
Conversion Date occurs by a Toledo Employee or a Toledo Employee's covered
dependent shall be taken into account after the Conversion Date for purposes
of satisfying applicable deductible, coinsurance and maximum out-of-pocket
provisions, as well as such employee's annual benefit limits, if any (until
the first anniversary of the commencement of the plan year of the applicable
Seller plan in which the Conversion Date occurs), to the same extent that
such expenses are taken into account for the benefit of similarly situated
employees of Buyer and subsidiaries of Buyer.
(f) LIABILITY IN RESPECT OF OFFERS OF EMPLOYMENT. Buyer shall be
liable for and shall indemnify Seller for any claims made by Business
Employees in connection with any actions taken by Buyer pursuant to the first
sentence of Section 5.8(a) that (i) relate to claims of unlawful interviewing
or information gathering practices with respect to Business Employees, or
unlawful discrimination with respect to the Business Employees offered
employment (or denied offers of employment) with Buyer, or (ii) result in any
liability under the WARN Act (unless such WARN Act liability arises solely as
a result of Buyer's failure to extend any offer of employment to 50 or more
Toledo Employees).
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(g) DEFINED CONTRIBUTION PLANS.
(i) Except (with respect solely to Toledo Wage Employees)
to the extent otherwise agreed by the union
representing the Toledo Wage Employees consistent with
applicable law, as of the Conversion Date, Buyer shall
have established or designated a defined contribution
plan for the benefit of Toledo Wage Employees and
Toledo Salaried Employees who become employed by Buyer
as of the Conversion Date or thereafter, and Buyer
shall take all necessary action, if any, to qualify
such plan under the applicable provisions of the Code,
and to make any and all filings and submissions to the
appropriate Governmental Entities required to be made
by it in connection with such establishment or
designation. As soon as practicable following the
Closing Date, Buyer shall establish or designate a
defined contribution plan for the benefit of the
Closing Date Employees who become employed by Buyer as
of the Closing Date or thereafter, and Buyer shall take
all necessary action, if any, to qualify such plan
under the applicable provisions of the Code, and to
make any and all filings and submissions to the
appropriate Governmental Entities required to be made
by it in connection with such establishment or
designation.
(ii) Except (with respect solely to Toledo Wage Employees)
to the extent otherwise agreed by the union
representing the Toledo Wage Employees consistent with
applicable law, Buyer shall cause the appropriate
defined contribution plan described in Section
6.3(g)(i) (the "Buyer DC Plan") to accept, as of the
Closing Date (for Closing Date Employees) and as of the
Conversion Date (for Toledo Employees), all direct or
indirect rollovers by Closing Date Employees employed
by Buyer as of the Closing Date and all direct or
indirect rollovers by Toledo Employees employed by
Buyer as of the Conversion Date, of such employees'
eligible rollover distributions from Sellers' defined
contribution plans; PROVIDED, that such employees have
elected to make such rollovers and meet all
requirements of Sellers and the Code with respect to
such rollovers. In the event that a Business Employee
with an outstanding loan from a Seller defined
contribution plan elects a direct rollover (within the
meaning of Section 401(a)(31) of the Code) of his or
her eligible rollover distribution to the Buyer DC
Plan, the portion of the Business Employee's eligible
rollover distribution represented by the outstanding
loan shall be rolled over to the Buyer DC Plan;
PROVIDED, HOWEVER, that in the event that Buyer does
not offer the Buyer DC Plan to the Toledo Wage
Employees it employs after the Conversion Date, Buyer
shall enable any Toledo Wage Employee in its employ to
make payments with respect to any outstanding loan such
employee retains under a Seller defined contribution
plan through the use of regular payroll deductions that
would be transferred to the appropriate Seller.
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Buyer and each Seller shall each bear their own
expenses in connection with such rollovers.
(h) DEFINED BENEFIT PLANS. As of the Conversion Date, Buyer
shall have established or designated a defined benefit plan for the benefit
of Toledo Salaried Employees who become employed by Buyer as of the
Conversion Date or thereafter, and Buyer shall take all necessary action, if
any, to qualify such plan under the applicable provisions of the Code, and to
make any and all filings and submissions to the appropriate Governmental
Entities required to be made by it in connection with such establishment or
designation. As soon as practicable following the Closing Date, Buyer shall
establish or designate a defined benefit plan for the benefit of the Closing
Date Employees who become employed by Buyer as of the Closing Date or
thereafter, and Buyer shall take all necessary action, if any, to qualify
such plan under the applicable provisions of the Code, and to make any and
all filings and submissions to the appropriate Governmental Entities required
to be made by it in connection with such establishment or designation.
(i) ACCRUED PAID TIME OFF. Buyer shall use any funds wire
transferred to it in respect of Accrued Paid Time Off for Toledo Employees
pursuant to Section 5.8(c) to cover expenses relating to Accrued Paid Time
Off for Toledo Employees who become employed by Buyer as of the Conversion
Date. Buyer shall use any credit against the Purchase Price provided to Buyer
in respect of Accrued Paid Time Off for Closing Date Employees pursuant to
Section 5.8(c) to cover expenses relating to Accrued Paid Time Off for
Closing Date Employees who become employed by Buyer as of the Closing Date.
ARTICLE 7
MUTUAL COVENANTS OF THE PARTIES
Each Seller and Buyer covenants and agrees as follows:
7.1 COOPERATION AND TRANSITION SERVICES.
(a) Each of the parties will give any notices to, make any
filings with, and use its respective reasonable best efforts to obtain any
authorizations, consents and approvals of Government Entities in connection
with the transactions contemplated by this Agreement. Buyer and Sellers shall
reasonably cooperate with one another and shall use their reasonable best
efforts to obtain FTC approval of Buyer as an acceptable purchaser of the
Assets and to assist in causing the Provisional Consent Decree to become
final without adverse modification.
(b) In addition to the specific obligations created by the
Collateral Agreements, to the extent consistent with applicable law, Buyer
and Sellers shall reasonably cooperate with each other and shall cause their
officers, employees, agents and representatives to reasonably cooperate with
each other for the periods contemplated by the Co-Pack Agreement and the
Transition Services Agreement to ensure the orderly transition of the
Business, the Assets and the Assumed Liabilities to Buyer, to minimize the
disruption to the respective businesses of the parties hereto (including the
parties' relationships with customers and suppliers) resulting from the
transactions contemplated hereby and, in connection with Buyer's
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efforts to obtain the financing contemplated by the Financing Commitment, to
reasonably cooperate with each other, and to cause their officers, employees,
agents and representatives to reasonably cooperate with each other, and to
make disclosures required by law related thereto. Except as otherwise
provided in this Agreement, Buyer, on the one hand, and Sellers, on the other
hand, shall reimburse the other for reasonable out-of-pocket costs and
expenses incurred at the request of the other party in assisting the other
pursuant to this Section 7.1(b).
7.2 PUBLICITY. Sellers and Buyer agree that, from the date hereof
through the Closing Date, no public release or announcement concerning the
transactions contemplated hereby shall be issued by a party without the prior
written consent of the other parties (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by law or
the rules or regulations of any Governmental Entity or any United States or
foreign securities exchange, in which case advance notice and an opportunity
to comment on the proposed release or other announcement shall be given to
the other party, to the extent reasonably practicable. Sellers and Buyer
agree to keep the terms of this Agreement and the Collateral Agreements
confidential, except to the extent required by applicable law, rules or
regulations and except that the parties may disclose such terms to their
respective accountants and other representatives as necessary in connection
with the ordinary conduct of their respective businesses (so long as such
Persons agree to keep the terms of this Agreement and the Collateral
Agreements confidential) and to the FTC and other antitrust regulatory
agencies.
7.3 TAX MATTERS.
(a) TRANSFER TAXES. Buyer shall pay all sales, use, value-added,
business, goods and services, transfer, documentary, conveyancing or similar
Taxes or expenses and all recording fees that may be imposed as a result of
the sale and transfer of the Assets, Xxxxx Xxxx Assets or the Special
Inventory, or any other assets, property, franchise, service or business to
be, directly or indirectly, acquired by, or provided to, Buyer or any of its
Affiliates under this Agreement or any of the Collateral Agreements
(including any stamp duty or other Tax chargeable in respect of any
instrument transferring property and any Taxes (other than income Taxes)
payable in connection with the sale and transfer of the Intellectual
Property), together with any and all penalties, interest and additions to Tax
with respect thereto ("Transfer Taxes"), and Sellers and Buyer shall
cooperate in timely making all filings, returns, reports and forms as may be
required to comply with the provisions of such Tax laws.
(b) COOPERATION. Buyer and Sellers shall, and shall cause their
respective subsidiaries and Affiliates to, cooperate with respect to Tax
matters. Buyer and Sellers shall provide one another with such information as
is reasonably requested in order to enable the requesting party to complete
and file all Returns which it may be required to file with respect to the
Business, the Assets, the Xxxxx Xxxx Business, the Special Inventory, the
Xxxxx Xxxx Assets, and Windmill or to respond to audits, inquiries or other
proceedings by any Taxing Authority and otherwise to satisfy Tax
requirements. Such cooperation shall further include (i) provision of powers
of attorney to Sellers (or their designees) relating to Tax matters to
satisfy Sellers' obligations under Section 7.3 and Article 9 of this
Agreement, (ii) promptly forwarding copies of appropriate notices, forms or
other communications received from or sent to any Taxing Authority, and (iii)
promptly providing reasonably requested copies of all relevant Returns
together with accompanying schedules and related workpapers, documents
relating to
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rulings, audits or other determinations by any Taxing Authority and records
concerning the ownership and tax basis of property, in each case only to the
extent such materials relate to the Business, the Assets, the Xxxxx Xxxx
Business, the Special Inventory, the Xxxxx Xxxx Assets, or Windmill.
(c) FILING RESPONSIBILITY. Sellers shall prepare and file or
shall cause Windmill, as the case may be, to prepare and file, all Returns
with respect to Taxes attributable to the Assets, the Business, the Xxxxx
Xxxx Business, the Special Inventory or the Xxxxx Xxxx Assets, or of
Windmill, required to be filed (taking into account extensions therefor)
prior to the Closing Date. Sellers shall prepare and file, or shall cause to
be prepared and filed, any consolidated, combined or unitary Return that
includes Sellers or any of their Affiliates (and any Return that relates in
whole or in part to Taxes (or Tax items) described in clause (2) or (3) of
the definition of Excluded Taxes). To the extent that any such Tax Returns
filed by Sellers after the Closing Date pertain to Windmill, they shall be
prepared in accordance with past practice (unless contrary position is
required by law). Buyer shall file or cause to be filed all Returns
attributable to the Assets, the Business, the Xxxxx Xxxx Business, the
Special Inventory or the Xxxxx Xxxx Assets, or of Windmill, for which Sellers
do not have filing responsibility pursuant to this Section 7.3(c); PROVIDED,
HOWEVER, that in the case of any Returns required to be filed after the
Closing Date for which Buyer has filing responsibility pursuant to this
Section 7.3(c) and for which Sellers could have liability under this
Agreement (including any Return for Property Taxes attributable to the
Equipment for any Tax period or portion thereof ending on or prior to the
Conversion Date and any Straddle Period Tax Return of Windmill, in each case,
for which Buyer has filing responsibility pursuant to this Section 7.3(c)),
Buyer (i) shall prepare all such Returns in accordance with past practice
(unless contrary position is required by law), (ii) shall provide Sellers
with a draft of Buyer's proposed Return at least 30 days prior to the due
date (including extensions) for Sellers' review, and (iii) shall revise such
Return prior to filing (and file the Return as so revised) to reflect any
good faith comments of Sellers given to Buyer within 15 days of Sellers'
receipt of the draft Return (PROVIDED, HOWEVER, that to the extent that Buyer
does not agree with Sellers' comments, the parties shall endeavor in good
faith to resolve such disagreement and, failing that, a neutral CPA firm
mutually selected by Sellers and Buyer shall resolve the disagreement prior
to the due date, including extensions, and the Return shall be filed in the
manner determined by such CPA firm). Buyer shall discharge all Tax
liabilities shown on Returns that Buyer is required to file pursuant to this
Section 7.3(c); PROVIDED, HOWEVER, that no later than one (1) Business Day
prior to the filing of any such Return, the Sellers shall pay to the Buyer an
amount equal to the amount of Taxes shown due on such Return for which
Sellers are responsible with respect to such Return less any estimated Taxes
paid for such Taxes prior to the Closing Date.
(d) TIMING DIFFERENCES. If as the result of any adjustment to an
Excluded Tax made in an audit or other Tax proceeding, the Sellers are
required to make an additional Tax payment (either directly to a Taxing
Authority or as an indemnity payment under Section 9.2 of this Agreement), or
suffer a reduction in any refund or credit, and, due to such Tax payment (or
reduction in refund or credit, or adjustment giving rise to such payment or
reduction in such refund or credit), the Buyer or Windmill or any of their
Affiliates obtains a Tax benefit, the Buyer shall pay to the Sellers an
amount equal to the actual Tax benefit so derived. The amount of any such Tax
benefit shall be equal to the amount of the actual reduction in Taxes (or
increase in refund or credit) reflected on any Return of the Buyer or
Windmill or any of their Affiliates
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(net of any resulting increases in Taxes borne by Buyer on any such other
filed Return) for such period (or any earlier period) as compared to the
amount that would have been reflected on such Return in the absence of the
additional Tax payment by (or reduction in refund or credit of) Sellers. Any
adjustment not resulting in a Tax benefit to the period to which it relates
or any earlier period shall be carried forward to succeeding taxable years
until used to the extent permitted by law. All payments to Sellers pursuant
to this Section 7.3(d) shall be made within 15 days after the filing of the
applicable Return for the period in which the Tax benefit is realized by
Buyer or Windmill and shall be accompanied by supporting calculations in a
form reasonably acceptable to the Sellers documenting the Tax benefit to
which the payment relates. If the Buyer or Windmill makes a payment to
Sellers pursuant to this Section 7.3(d) and the actual Tax benefit (or
portion thereof) is eventually not realized (or another Tax benefit of Buyer
is not utilized because of the prior use of a Tax benefit for which payment
has been made under this Section 7.3(d)), the Buyer shall promptly notify the
Sellers (with documents reasonably acceptable to Sellers supporting the loss
of Tax benefit) and, upon receipt of such notice, the Sellers shall promptly
refund such payment (or allocable portion thereof) to the Buyer or Windmill
(PROVIDED that in no case shall Sellers, in respect of any payment a refund
of which is sought under this sentence, be required to refund an amount in
excess of such payment previously received by Sellers from Buyer).
(e) REFUNDS. (i) Sellers shall be entitled to any refunds or
credits of or against any Excluded Taxes (plus any interest received with
respect thereto) and Buyer shall file, or cause to be filed, any claims for
such refunds or credits reasonably requested by Sellers; (ii) except to the
extent set forth in Section 7.3(d) or 7.3(e)(i) above, Buyer shall be
entitled to any refunds or credits of Taxes attributable to the Business, the
Assets, the Xxxxx Xxxx Business, the Special Inventory, the Xxxxx Xxxx
Assets, or of Windmill (plus any interest received with respect thereto);
(iii) Buyer shall promptly forward to Sellers or reimburse Sellers for any
refund or credits due Sellers (pursuant to the terms of this Article 7) after
receipt thereof, and Sellers shall promptly forward to Buyer or reimburse
Buyer for any refunds or credits due Buyer (pursuant to the terms of this
Article 7) after receipt thereof; (iv) refunds or credits for a Straddle
Period shall be allocated in the manner set forth in the definition of
"Excluded Taxes"; (v) the Buyer and Windmill shall prepare and timely file an
irrevocable election under Treasury Regulation section 1.1502-21(b)(3)(ii)(B)
for Buyer's consolidated group to relinquish all consolidated net operating
losses allocable to Windmill for that portion of the loss carryback period
during which Windmill was a member of a Seller's consolidated group; and (vi)
Buyer shall not elect to carry back any item of loss, deduction or credit of
Buyer, Windmill or any of their Affiliates which arises in any Tax period or
portion thereof ending after the Closing Date into any Tax period or portion
thereof ending on or before the Closing Date.
(f) TAX-SHARING AGREEMENTS. Any tax-sharing agreement or similar
arrangement between Sellers, on the one hand, and Windmill, on the other
hand, shall be terminated with respect to Windmill prior to the Closing.
7.4 ACCESS TO INFORMATION. After the Closing, upon reasonable
notice, and subject to Sections 5.6 and 6.1, Buyer and Sellers agree to
furnish or cause to be furnished to each other and their representatives,
employees, counsel and accountants access, during normal business hours, to
such information (including records pertinent to the Business) and assistance
relating to the Business as are reasonably necessary for financial reporting
and accounting matters or
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verifying such party's obligations hereunder, the preparation and filing of
any Tax returns, reports or forms or the defense of any Tax Claim or
assessment or other claim; PROVIDED, HOWEVER, that such access and assistance
do not unreasonably disrupt the normal operations of Buyer or Sellers.
7.5 BULK SALES WAIVER. Buyer and Sellers hereby waive compliance
with the terms and conditions of any applicable bulk sales law or similar
laws that may be applicable to the sale or transfer of the Assets or the
Xxxxx Xxxx Assets.
7.6 EXPENSES. Except as contemplated by that certain letter
agreement dated December 17, 2000 by and among Sellers and Buyer, or as
otherwise expressly provided herein, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby will
be paid by the party incurring such costs and expenses, whether or not the
transactions contemplated hereby are consummated.
7.7 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use all reasonable best efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to satisfy all conditions to, and to consummate, the transactions
contemplated by this Agreement and the Collateral Agreements and to carry out
the purposes hereof, including causing any Subsidiaries of such party to
execute the Collateral Agreements, as applicable, and to carry out the
purposes thereof; PROVIDED that notwithstanding anything to the contrary
stated in this Agreement, no party hereto shall be required to pay any
consideration for any third-party consent or waiver. Buyer agrees to use its
reasonable best efforts to satisfy, or cause to be satisfied, all conditions
set forth in the Financing Commitment and to consummate the financing
thereunder.
7.8 COLLATERAL AGREEMENTS. At the Closing, each Seller, as
applicable, and Buyer shall execute and deliver (i) the Trademark License
Agreements, (ii) the Omnibus Patent Assignment and the Omnibus Trademark
Assignment, (iii) the Patent and Technology License Agreements, (iv) the
Transition Services Agreement, (v) the Co-Pack Agreement, (vi) the Toledo
Plant Lease Agreement, (vii) the Xxxxxx Xxxxx Trademark License Agreement and
the Hungry Xxxx Trademark License Agreement and the Grant Back Patent and
Technology License Agreement, and (viii) the Conversion Plan Agreement
(collectively, the "Collateral Agreements").
7.9 SHARED SERVICES. Buyer and Sellers shall cooperate reasonably
with respect to the services and arrangements contemplated by the Transition
Services Agreement, the Co-Pack Agreement and the other Collateral Agreements
and other shared services and arrangements with the intent of ensuring that,
as of the Closing Date, and taking into account all such services and
arrangements together with the purchase and sale of the Assets hereunder,
Buyer will have the ability to continue to operate the Business on terms that
are not, taken as a whole, materially less advantageous to Buyer than the
terms on which the Business is presently conducted.
7.10 EMPLOYEE WELFARE BENEFITS. Sellers shall be solely responsible
for: (a) claims for the type of benefits described in Section 3(1) of ERISA
(whether or not covered by ERISA) ("Welfare Benefits") and for workers'
compensation, in each case that are incurred by or with respect to any
Business Employee prior to the date such employee becomes employed by the
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Buyer, PROVIDED, in the case of a disability or workers compensation claim,
the Buyer shall have the right to enforce this provision against the Sellers
only with respect to such a claim that is actually filed on or before (x)
with respect to Closing Date Employees, the first anniversary of the Closing
Date, and (y) with respect to Toledo Employees, the first anniversary of the
Conversion Date (or, in the case of a claim for a disability benefits under
the General Xxxxx Toledo Plan, the date of the DB Transfer); (b) claims
relating to COBRA Coverage attributable to "qualifying events" with respect
to any Business Employee and his or her beneficiaries and dependents that
occur before the date such Business Employee becomes employed by Buyer; and
(c) claims for Welfare Benefits and for workers' compensation, in each case
that are incurred by or with respect to any Business Employee who does not
become employed by Buyer, whether incurred before, on or after the Closing
Date (in the case of the Closing Date Employees) or the Conversion Date (in
the case of the Toledo Employees). Buyer shall be solely responsible for: (a)
claims for Welfare Benefits and for workers' compensation, in each case that
are incurred by or with respect to Business Employees from and after the date
they become employees of Buyer; and (b) claims relating to COBRA Coverage
attributable to "qualifying events" with respect to Business Employees who
become employees of Buyer, and their beneficiaries and dependents, that occur
after such employees become employees of Buyer. For purposes of the
foregoing, a disability or workers' compensation claim shall be considered
incurred at the time the injury or condition giving rise to the claim occurs,
and a medical/dental claim shall be considered incurred when the services are
rendered or the supplies are provided, and not when the condition arose;
PROVIDED that claims relating to a hospital confinement that begins before
the date a Business Employee becomes employed by Buyer shall be deemed to
have occurred before such employee became employed by Buyer.
7.11 TOLEDO DEFINED BENEFIT PLAN TRANSFER OF ASSETS AND LIABILITIES.
With respect to Toledo Wage Employees who become employees of Buyer as of the
Conversion Date, General Xxxxx shall cause a transfer of assets and
liabilities (the "DB Transfer") to be made from the trust under the General
Xxxxx Toledo Plan to the trust under the Multifoods Plan, as soon as
reasonably practicable after the Conversion Date and following the later of
(a) the earlier of delivery to General Xxxxx of a favorable determination
letter from the Internal Revenue Service, or an opinion of counsel or
indemnity, reasonably satisfactory to General Xxxxx relating to the qualified
status of the Multifoods Plan (as amended to the date of transfer), or (b)
the delivery to Buyer of a favorable determination letter from the Internal
Revenue Service, or an opinion of counsel or indemnity, reasonably
satisfactory to Buyer relating to the qualified status of the General Xxxxx
Toledo Plan (as amended to the date of transfer). Subject to section 414(l)
of the Code, the fair market value of the assets to be transferred in the DB
Transfer shall equal the present value as of the Conversion Date of the
accumulated benefit obligations of the Toledo Wage Employees who become
employees of Buyer as of the Conversion Date, less the amount of any payments
made from the General Xxxxx Toledo Plan with respect to such employees
following the Conversion Date and prior to the date of transfer, with such
present value to be determined using assumptions consistent with those used
to determine the pension expense for the current year, except for the
discount rate. The discount rate will be determined using the Xxxxxxx Xxxxx
10 year plus high quality corporate bond index on the Conversion Date. Buyer
shall cause the Multifoods Plan to accept the assets transferred in the DB
Transfer and to assume the liability for all benefits accrued by such Toledo
Wage Employees under the General Xxxxx Toledo Plan as of the Conversion Date.
The calculations shall be performed by the actuary for the General Xxxxx
Toledo Plan with review by the actuary for the Multifoods Plan. If the
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actuaries disagree, a third independent actuary shall be engaged (with the
costs shared equally by the Sellers and Buyer), and the determination of such
third independent actuary shall be binding. The DB Transfer shall not take
place prior to the 31st day following the filing of all Internal Revenue
Service Forms 5310 required in connection therewith. General Xxxxx and Buyer
shall use best efforts to expedite the DB Transfer, including promptly
providing or filing any documents, forms, or other information necessary to
effectuate the DB Transfer, and communicating and cooperating as necessary to
expedite the DB Transfer. Notwithstanding anything to the contrary in this
Section 7.11, in the event that the union representing the Toledo Wage
Employees agrees, pursuant to Section 6.3(e), that such employees shall not
participate in a defined benefit plan of Buyer following the Conversion Date,
the DB Transfer shall not occur.
7.12 XXXXX XXXX.
(a) Sellers shall not be under any obligation to provide any
transition services following the Closing to Buyer with respect to the Xxxxx
Xxxx Business. Instead, Buyer and Sellers agree that after the Closing,
General Xxxxx will be entitled to continue to conduct the Xxxxx Xxxx
Business, for its own account and as presently conducted in the ordinary
course consistent with past practice, until such time as Buyer provides
written notice to General Xxxxx of Buyer's intention to take over the Xxxxx
Xxxx Business (and, at the same time, if Buyer desires, to activate its
rights under the Co-Pack Agreement with respect to the Xxxxx Xxxx Business).
(b) On the Xxxxx Xxxx Transfer Date, General Xxxxx shall sell,
convey, transfer and assign to Buyer, or cause its applicable Subsidiaries to
sell, convey, transfer and assign to Buyer, (i) Intellectual Property to the
extent specified in Section 2.3(c) and customer lists, packaging supplier
lists and price lists, universal product codes, package designs and
copyrights, in each case exclusively related to the Xxxxx Xxxx Business (the
"Xxxxx Xxxx Assets") and (ii) the "Xxxxx Xxxx Transfer Date Inventory" as
contemplated by Section 7.13. Following the Xxxxx Xxxx Transfer Date, Buyer
shall assume all responsibility for the its operation of the Xxxxx Xxxx
Business except as otherwise expressly provided herein. Notwithstanding
anything to the contrary herein, it is agreed and understood that any Xxxxx
Xxxx Asset, Xxxxx Xxxx Transfer Date Inventory or any other asset relating to
the Xxxxx Xxxx Business that, pursuant to this Agreement will be transferred
to Buyer, shall be transferred on the Xxxxx Xxxx Transfer Date.
(c) Prior to, on or after the Xxxxx Xxxx Transfer Date, Buyer
shall not assume, or in any way be liable for the payment, performance or
discharge of, any liabilities, obligations or commitments of Sellers or any
of their Affiliates for manufacturer's coupons issued prior to, or by either
Seller on, the Xxxxx Xxxx Transfer Date and relating to Xxxxx Xxxx Products
with respect to the Xxxxx Xxxx Business.
(d) On the Xxxxx Xxxx Transfer Date, Buyer shall assume and
shall pay, perform and discharge when due all liabilities and obligations for
trade promotions arising from (i) trade promotion activities or events
primarily related to the Xxxxx Xxxx Business that are committed to after the
Xxxxx Xxxx Transfer Date and occur at any time following the Xxxxx Xxxx
Transfer Date or (ii) trade promotion activities or events primarily related
to the Xxxxx Xxxx Business that occur following the Xxxxx Xxxx Transfer Date
and that were committed to
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before the Xxxxx Xxxx Transfer Date, except to the extent any such single
activity or promotion was not disclosed to Buyer by Sellers and the liability
and obligation per customer buying group related to such activity or
promotion exceeds $100,000 unless such activity or promotion was committed to
by Sellers in the ordinary course consistent with past practice.
(e) After the Xxxxx Xxxx Transfer Date, Buyer shall pay, perform
and discharge when due (i) all obligations, liabilities and commitments of
each Seller in respect of any and all Xxxxx Xxxx Products shipped by Buyer or
in respect of the operation of the Xxxxx Xxxx Business by Buyer at any time
after the Xxxxx Xxxx Transfer Date except where such Xxxxx Xxxx Products
constituted finished products as of the Xxxxx Xxxx Transfer Date and such
liabilities, obligations or commitments of Sellers constituted product
liabilities or recall liabilities, unless (and to the extent that) the
liabilities, obligations or commitments were caused by Buyer's negligence in
the storage or transportation of such Xxxxx Xxxx Products after the Xxxxx
Xxxx Transfer Date or Buyer's failure after the Xxxxx Xxxx Transfer Date to
employ quality control standards of at least the standards employed by
Sellers prior to the Xxxxx Xxxx Transfer Date, (ii) all refund and
replacement obligations relating to Xxxxx Xxxx Products shipped after the
Xxxxx Xxxx Transfer Date, and (iii) all liabilities and obligations for
customer deductions attributable to invoices issued by Buyer with respect to
Xxxxx Xxxx Products shipped after the Xxxxx Xxxx Transfer Date.
7.13 XXXXX XXXX INVENTORY.
(a) On the Xxxxx Xxxx Transfer Date, General Xxxxx shall sell,
convey, transfer and assign to Buyer, or cause its Affiliates to sell,
convey, transfer and assign to Buyer, all dedicated finished goods inventory
and packaging held by General Xxxxx for use of the Xxxxx Xxxx Business (the
"Xxxxx Xxxx Transfer Date Inventory"), except for an amount of such inventory
with respect to the Xxxxx Xxxx Business necessary for General Xxxxx to fill
purchase orders with respect to the Xxxxx Xxxx Business existing as of the
Xxxxx Xxxx Transfer Date, which inventory Buyer hereby permits General Xxxxx
to retain in order to fill such orders and which inventory shall not be
deemed to be Xxxxx Xxxx Transfer Date Inventory for purposes of this
Agreement. Within thirty (30) days following the Xxxxx Xxxx Transfer Date,
General Xxxxx shall prepare and deliver to Buyer a statement setting forth
the type and value of such Xxxxx Xxxx Transfer Date Inventory, as of the
Xxxxx Xxxx Transfer Date, to be transferred and assigned to Buyer on the
Xxxxx Xxxx Transfer Date, which statement shall be derived from a physical
taking of such Xxxxx Xxxx Transfer Date Inventory as of the Xxxxx Xxxx
Transfer Date and shall be prepared in a manner consistent with the Inventory
Standards (the "Xxxxx Xxxx Transfer Date Inventory Statement"). Buyer and its
representatives shall have such opportunity as Buyer reasonably deems
appropriate to observe the taking and reconciliation of such Xxxxx Xxxx
Transfer Date Inventory (which may begin prior to the Xxxxx Xxxx Transfer
Date) in connection with the preparation of the Xxxxx Xxxx Transfer Date
Inventory Statement. Buyer shall provide General Xxxxx and its accountants
full access to the books and records, to any other information, including
work papers of its accountants, and to any employees of Buyer, in each case
as may be reasonably necessary for General Xxxxx to prepare the Xxxxx Xxxx
Transfer Date Inventory Statement, to respond to the Buyer's Xxxxx Xxxx
Transfer Date Objection (as defined herein) and to prepare materials for
presentation to the CPA Firm in connection with the matters contemplated by
Section 7.13(c).
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(b) Buyer shall, within thirty (30) days after the delivery by
General Xxxxx of the Xxxxx Xxxx Transfer Date Inventory Statement, complete
its review thereof. After delivery of the Xxxxx Xxxx Transfer Date Inventory
Statement, General Xxxxx shall provide Buyer and its accountants full access
to all books and records, to any other information, including working papers
of its accountants, and to any employees of Sellers, in each case used in the
preparation of the Xxxxx Xxxx Transfer Date Inventory Statement or as may
otherwise be reasonably necessary for Buyer to prepare the Buyer's Xxxxx Xxxx
Transfer Date Objection and to prepare materials for presentation to the CPA
Firm in connection with the matters contemplated by Section 7.13(c). The
Xxxxx Xxxx Transfer Date Inventory Statement shall be binding and conclusive
upon, and deemed accepted by, Buyer unless Buyer shall have notified General
Xxxxx in writing within thirty (30) days after delivery of the Xxxxx Xxxx
Transfer Date Inventory Statement of any objection thereto (the "Buyer's
Xxxxx Xxxx Transfer Date Objection"). The Buyer's Xxxxx Xxxx Transfer Date
Objection shall set forth a description of the basis of the Buyer's Xxxxx
Xxxx Transfer Date Objection and the adjustments to the value of such Xxxxx
Xxxx Transfer Date Inventory reflected on the Xxxxx Xxxx Transfer Date
Inventory Statement that Buyer believes should be made. Any items not
disputed during the foregoing thirty (30) day period shall be deemed to have
been accepted by Buyer.
(c) If General Xxxxx and Buyer are unable to resolve all of
their disputes with respect to the Xxxxx Xxxx Transfer Date Inventory
Statement within thirty (30) days following General Xxxxx' receipt of the
Buyer's Xxxxx Xxxx Transfer Date Objection to such Xxxxx Xxxx Transfer Date
Inventory Statement pursuant to Section 7.13(b), they shall refer their
remaining differences to the CPA Firm for decision, which decision shall be
made consistent with the Inventory Standards within forty-five (45) days and
shall be final and binding on the parties, PROVIDED that the CPA Firm's
determination as to any item set forth in Buyer's Xxxxx Xxxx Transfer Date
Objection shall not be more beneficial to General Xxxxx than the
determination of that item by General Xxxxx in the Xxxxx Xxxx Transfer Date
Inventory Statement or more beneficial to Buyer than the determination of
that item in Buyer's Xxxxx Xxxx Transfer Date Objection. Any expenses
relating to the engagement of the CPA Firm shall be shared equally by General
Xxxxx, on the one hand, and Buyer, on the other hand. General Xxxxx and Buyer
shall each bear the fees of their respective auditors incurred in connection
with the determination and review of the Xxxxx Xxxx Transfer Date Inventory
Statement.
(d) The Xxxxx Xxxx Transfer Date Inventory Statement shall
become final and binding on the parties upon the earliest of (i) if no
Buyer's Xxxxx Xxxx Transfer Date Objection has been given, the expiration of
the period within which Buyer must make its objection pursuant to Section
7.13(b) hereof, (ii) agreement in writing by General Xxxxx and Buyer that the
Xxxxx Xxxx Transfer Date Inventory Statement, together with any modifications
thereto agreed to by General Xxxxx and Buyer, shall be final and binding and
(iii) the date on which the CPA Firm shall issue its written determination
with respect to any dispute relating to such Xxxxx Xxxx Transfer Date
Inventory Statement. The Xxxxx Xxxx Transfer Date Inventory Statement, as
submitted by General Xxxxx if no timely Buyer's Xxxxx Xxxx Transfer Date
Objection has been given or as adjusted pursuant to any agreement between the
parties or as determined pursuant to the decision of the CPA Firm, when final
and binding on all parties, is herein referred to as the "Final Xxxxx Xxxx
Transfer Date Inventory Statement."
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(e) Within ten (10) Business Days following issuance of the
Final Xxxxx Xxxx Transfer Date Inventory Statement, the payment payable
pursuant to this Section 7.13(e) (the "Xxxxx Xxxx Transfer Date Payment") and
interest thereon shall be paid by Buyer to General Xxxxx by wire transfer of
immediately available funds to a bank account or bank accounts designated in
writing by General Xxxxx. The Xxxxx Xxxx Transfer Date Payment shall be equal
to the value of the Xxxxx Xxxx Transfer Date Inventory as reflected on the
Final Xxxxx Xxxx Transfer Date Inventory Statement. The Xxxxx Xxxx Transfer
Date Payment shall bear interest from the Xxxxx Xxxx Transfer Date to the
date of payment at the Xxxxx Xxxx Transfer Date Interest Rate, which interest
shall be calculated on the basis of a 365-day year and the actual number of
days elapsed and such interest shall be paid on the same date and in the same
manner as such Xxxxx Xxxx Transfer Date Payment.
7.14 MANUFACTURER CODES. If after the Closing Date or the Xxxxx Xxxx
Transfer Date, as applicable, General Xxxxx requests in writing that Buyer
use reasonable best efforts to change the portion of universal product codes
constituting manufacturer codes with respect to the Business and the Xxxxx
Xxxx Business, Buyer shall use such reasonable best efforts to change such
manufacturer codes. To the extent Buyer incurs any direct, reasonable
documented out-of-pocket costs as a result of the change in such manufacturer
codes (including new or additional slotting allowances or similar charges),
Buyer shall be liable for the first $300,000 of such costs and General Xxxxx
shall be liable for any amount in excess thereof.
ARTICLE 8
CLOSING
8.1 CLOSING. The closing (the "Closing") of the purchase and sale of
the Assets and of the transactions contemplated by this Agreement shall be
held at the offices of Faegre & Xxxxxx LLP, 2200 Xxxxx Fargo Center, 00 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, as promptly as practicable following
the satisfaction or waiver of the conditions to Closing set forth in Sections
8.2 and 8.3 (except for those conditions to be satisfied on the Closing
Date), but in any event no later than the fifth Business Day following such
satisfaction or waiver, or on such other date, time and place as may be
mutually agreed in writing by Sellers and Buyer. The date on which the
Closing shall occur is hereinafter referred to as the "Closing Date." Buyer
and Sellers shall also deliver, or cause to be delivered, as applicable, the
following:
(a) At the Closing, Buyer shall deliver to Sellers (i) by wire
transfer to the bank account or bank accounts per the wire transfer
instructions on SCHEDULE 8.1(a) hereto, immediately available funds in an
aggregate amount equal to the Purchase Price (before giving effect to any
adjustments pursuant to Sections 2.9(e) and 5.8(c)); (ii) appropriately
executed instruments of assumption in form and substance reasonably
satisfactory to Sellers and their counsel evidencing and effecting the
assumption by Buyer of the Assumed Liabilities and such other documents as
are specifically required by this Agreement (it being understood that such
instruments shall not require Buyer or any other Person to make any
additional representations, warranties or covenants, express or implied, not
contained in this Agreement); and (iii) the certificate required pursuant to
Section 8.3(a)(iii).
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(b) At the Closing, each Seller, as applicable, shall deliver
and cause its applicable Subsidiaries to deliver to Buyer (i) appropriately
executed instruments of sale, assignment, transfer and conveyance in form and
substance reasonably satisfactory to Buyer and its counsel evidencing and
effecting the sale and transfer to Buyer of the Assets and such other
documents as are specifically required by this Agreement (it being understood
that such instruments shall not require either Seller, their Subsidiaries or
any other Person to make any additional representations, warranties or
covenants, express or implied, not contained in this Agreement); (ii) the
certificate required pursuant to Section 8.2(a)(iii); (iii) a Schedule of
Accrued Paid Time Off for Business Employees who have been employed by Buyer
at the Closing Date, to the extent practicable; and (iv) stock certificates
representing the Stock, with appropriate properly signed stock powers
suitable to transfer the Stock to Buyer, with stamps attached, if any.
(c) At the Closing, the Buyer and each Seller, as applicable
shall deliver, and Sellers shall cause their applicable Subsidiaries to
deliver, the executed Collateral Agreements to which they are parties.
(d) At the Closing, (i) each Seller shall deliver certificates
of the Secretary or an Assistant Secretary of such Seller, dated the Closing
Date, (A) as to the incumbency and signatures of the officers or
representatives of such Seller executing this Agreement and the Collateral
Agreements, as applicable, together with evidence of incumbency of such
Secretary or Assistant Secretary, and (B) certifying attached resolutions of
the Board of Directors of such Seller that authorize the execution, delivery
and performance of this Agreement and the Collateral Agreements, and (ii)
each Seller shall deliver a good standing certificate, dated no more than two
(2) Business Days prior to the Closing, of such Seller.
(e) At the Closing, (i) Buyer shall deliver certificates of the
Secretary or an Assistant Secretary of Buyer, dated the Closing Date, (A) as
to the incumbency and signatures of the officers or representatives of Buyer
executing this Agreement and the Collateral Agreements, together with
evidence of incumbency of such Secretary or Assistant Secretary, and (B)
certifying attached resolutions of the Board of Directors of Buyer that
authorize the execution, delivery and performance of this Agreement and the
Collateral Agreements, and (ii) Buyer shall deliver a good standing
certificate, dated no more than two (2) Business Days prior to the Closing,
of Buyer.
(f) General Xxxxx on behalf of itself, and Pillsbury on behalf
of itself, shall deliver to Buyer a duly executed and acknowledged affidavit
dated the Closing Date in form and substance reasonably acceptable to Buyer,
certifying facts that would exempt the transactions contemplated hereby from
the provisions of the Foreign Investors Real Property Tax Act.
8.2 BUYER'S CONDITIONS TO CLOSING. The obligation of Buyer to
purchase and pay for the Assets and assume the Assumed Liabilities, and to
consummate the other transactions contemplated hereby, is subject to the
satisfaction (or waiver by Buyer) as of the Closing of the following
conditions:
(a) (i) each of the representations and warranties of Sellers
contained in this Agreement shall be true and correct except for such
failures to be true and correct (without
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giving effect to any Materiality Qualifiers) that, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect or prohibit or materially impair the ability of each
Seller to consummate the transactions hereunder, in each case on and as of
the Closing Date, as though made on and as of the Closing Date (unless and to
the extent any such representation or warranty speaks specifically as of an
earlier date, in which case, as of such earlier date); (ii) each Seller shall
have performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by such
Seller by the time of the Closing; and (iii) Sellers shall have delivered to
Buyer a certificate dated the Closing Date and signed by a duly authorized
officer of each Seller confirming the foregoing;
(b) no injunction or order, writ, decree or judgment of any
Governmental Entity of competent jurisdiction shall be in effect as of the
Closing that makes illegal, restrains or prohibits the purchase and sale of
the Assets or the consummation of the other material transactions
contemplated by this Agreement;
(c) the Provisional Consent Decree shall have been accepted for
public comment by the FTC;
(d) the Provisional Consent Decree that shall have been accepted
for public comment by the FTC shall name Buyer as an acceptable purchaser of
the Business or Buyer's acquisition of the Business otherwise shall been
approved by the FTC;
(e) each Seller or its Affiliates, as applicable, shall have
executed and delivered to Buyer each of the Collateral Agreements and all
other documents and instruments required to be delivered by such Seller to
Buyer hereunder;
(f) since the date of this Agreement, there shall not have been
any condition, circumstance, event or occurrence occurring or existing that,
individually or in the aggregate, has resulted or would reasonably be
expected to result in a Material Adverse Effect;
(g) the provisions of Section 7.9 shall have been implemented in
such a manner that Buyer shall have the ability to continue to operate the
Business on terms that are, taken as a whole, not materially less
advantageous to Buyer than the terms on which the Business is presently
conducted;
(h) the proceeds of the financing contemplated by the Financing
Commitment, or such lesser amount as may be necessary to consummate the
transactions contemplated by this Agreement on the terms set forth herein and
to provide Buyer with at least $75,000,000 of working capital and other
post-Closing financing, shall be available to Buyer;
(i) Buyer shall have received all consents, licenses,
authorizations, certificates and permits required by Governmental Entities to
consummate the transactions contemplated by this Agreement, except for
failures to receive such consents, licenses, authorizations, certificates and
permits that, individually or in the aggregate, and taking into account the
availability of the arrangements contemplated by the Transition Services
Agreement, the Co-Pack Agreement and the other Collateral Agreements, would
not reasonably be expected
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to have a Material Adverse Effect or prohibit or materially impair the
ability of Buyer to consummate the transactions hereunder;
(j) Buyer shall have received consents from, or modifications to
or new agreements or arrangements with, the Persons identified in SCHEDULE
8.2(j) in such a manner that Buyer shall have the ability to continue to
operate the Business on terms that are, taken as a whole, not materially less
advantageous to Buyer than the terms on which the Business is presently
conducted, which modifications or new agreements, to the extent SCHEDULE
8.2(j) contemplates specific terms, shall be on substantially the terms
contemplated by such Schedule; and
(k) the Acquisition shall have been consummated.
8.3 SELLERS' CONDITIONS TO CLOSING. The obligation of each Seller to
sell and deliver or cause to be sold and delivered the Assets to Buyer, and
to consummate the other transactions contemplated hereby, is subject to the
satisfaction (or waiver by such Seller) as of the Closing of the following
conditions:
(a) (i) each of the representations and warranties of Buyer
contained in this Agreement shall be true and correct except for such
failures to be true and correct (without giving effect to any Materiality
Qualifiers) that, individually or in the aggregate, have not had and would
not reasonably be expected to have a material adverse effect on the financial
condition of Buyer or the ability of Buyer to consummate the transactions
hereunder, in each case on and as of the Closing Date, as though made on and
as of the Closing Date (unless and to the extent any such representation or
warranty speaks specifically as of an earlier date, in which case, as of such
earlier date); (ii) Buyer shall have performed or complied in all material
respects with the obligations and covenants required by this Agreement to be
performed or complied with by Buyer by the time of the Closing; and (iii)
Buyer shall have delivered to Sellers a certificate dated the Closing Date
and signed by a duly authorized officer of Buyer confirming the foregoing;
(b) no injunction or order, writ, decree or judgment of any
Governmental Entity of competent jurisdiction shall be in effect as of the
Closing that makes illegal or restrains or prohibits the purchase and sale of
the Assets or the consummation of the other transactions contemplated by this
Agreement;
(c) the Provisional Consent Decree shall have been accepted for
public comment by the FTC;
(d) the Provisional Consent Decree that shall have been accepted
for public comment by the FTC shall name Buyer as an acceptable purchaser of
the Business or Buyer's acquisition of the Business otherwise shall have been
approved by the FTC;
(e) Buyer shall have executed and delivered to Sellers each of
the Collateral Agreements and all other documents and instruments required to
be delivered by Buyer to such Seller hereunder;
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(f) Buyer shall have delivered to Sellers properly executed resale
exemption certificates containing the requisite tax registration numbers for
the Inventory being transferred by Sellers pursuant to this Agreement; and
(g) the Acquisition shall have been consummated.
ARTICLE 9
INDEMNIFICATION
9.1 SURVIVAL. The representations and warranties of the parties hereto
in this Agreement shall survive the execution and delivery hereof and the
delivery of all of the documents executed in connection herewith and shall
continue in full force and effect after the date hereof and after the Closing
Date for a period of eighteen (18) months after the Closing Date, except that
the representations and warranties of Sellers pursuant to Sections 3.1(a), 3.2,
3.3(a), the last sentence of Section 3.3(b) and Section 3.7 and of Buyer
pursuant to Sections 4.1(a) and 4.4 and claims based upon any party's fraudulent
misrepresentations shall survive until the expiration of the relevant statute of
limitations (including any extensions thereto) (the "Expiration Date"). No
action or proceeding may be brought with respect to any of the representations
and warranties unless written notice thereof, setting forth in reasonable detail
the claimed misrepresentation or breach of warranty, shall have been delivered
to the party alleged to have breached such representation or warranty prior to
the applicable Expiration Date.
9.2 INDEMNIFICATION BY SELLERS. From and after the Closing Date,
subject to the provisions of this Article 9, Sellers shall jointly and severally
indemnify Buyer, its Affiliates and each of their respective officers,
directors, employees, agents and representatives, against and hold them harmless
from any loss, claim, damage, liability, cost or expense (including reasonable
fees and expenses of lawyers, accountants, investigators, experts and other
professionals) (collectively, a "Loss") suffered or incurred by any such
indemnified party to the extent arising from (i) any breach of any
representation or warranty of either Seller contained in this Agreement or in
any certificate delivered pursuant to Sections 8.1 and 8.2, (ii) any
nonfulfillment of or failure to comply with any covenant or agreement of Sellers
or any of them contained in this Agreement or any Collateral Agreement, (iii)
the Excluded Liabilities, (iv) without limiting the generality of the foregoing,
any liability, obligation or commitment resulting or arising from the ownership,
operation or condition of the Business or the Assets on or prior to the Closing
Date (except to the extent arising from Buyer's operation on the Closing Date),
or from the ownership, operation or condition of the Xxxxx Xxxx Business on or
prior to the Xxxxx Xxxx Transfer Date (except to the extent arising from Buyer's
operation on the Xxxxx Xxxx Transfer Date), in each case other than Assumed
Liabilities or other obligations which Buyer has expressly agreed to pay
pursuant to this Agreement or the Collateral Agreements, (v) any liability or
obligation resulting from any failure of Sellers or Buyer to comply fully with
any applicable bulk transfer laws or any Tax laws relating to the obligations of
a buyer of assets in bulk transfer, except to the extent they constitute Assumed
Liabilities, Transfer Taxes or other obligations which Buyer has expressly
agreed to pay pursuant to this Agreement or the Collateral Agreements; (vi) the
failure of Sellers to have the right prior to Closing (or of Buyer to have the
right after Closing if Buyer conducts the applicable operations of the Business
in substantially the same manner as Sellers conducted such applicable operations
prior to Closing) to use the
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Lemelson Patents or the Research Resources Patent or any of them or any
intellectual property subject thereto in connection with the Business or the
Xxxxx Xxxx Business; PROVIDED, HOWEVER, that Buyer shall use its reasonable best
efforts promptly following the Closing to settle any claim related to the
Lemelson Patents or the Research Resources Patent with respect to the Business
with Sellers' consent (which consent shall not be unreasonably withheld or
delayed); (vii) any additional Taxes (calculated as set forth in Section 9.6(e))
of the Buyer or Windmill (or successors thereto) for Tax periods (or portions
thereof) beginning after the Closing Date that would not have arisen but for an
increase in the fair market value of the Stock above the amount set forth on
SCHEDULE 2.2 as a result of any adjustment by a Taxing Authority made in an
audit or other Tax proceeding; and (viii) any liability, obligation or
commitment of Windmill or Buyer arising out of Windmill's existence, operations
or ownership of assets on or prior to the Closing Date (except to the extent
arising from Buyer's operation on the Closing Date) or the ownership of the
Stock prior to Closing (provided that Tax liabilities and obligations shall not
be governed by the above provisions of this clause (viii) and shall instead be
governed by Section 2.6(f), the definition of "Excluded Taxes" and clause (vii)
of this Section 9.2).
9.3 INDEMNIFICATION BY BUYER. From and after the Closing Date, Buyer
shall indemnify Sellers, their Affiliates and each of their respective officers,
directors, employees, agents and representatives against and hold them harmless
from any Loss suffered or incurred by any such indemnified party to the extent
arising from (i) any breach of any representation or warranty of Buyer contained
in this Agreement or in any certificate delivered pursuant to Sections 8.1 and
8.3; (ii) any non-fulfillment of or failure to comply with any covenant or
agreement of Buyer contained in this Agreement or any Collateral Agreement;
(iii) the Assumed Liabilities; (iv) any Taxes of Windmill (other than Excluded
Taxes); and (v) without limiting the generality of the foregoing, any liability,
obligation or commitment resulting from the ownership, operation or condition of
the Business, the Assets, Conversion Date Inventory, or Windmill following the
Closing, or of the Xxxxx Xxxx Business, the Xxxxx Xxxx Transfer Date Inventory
or the Xxxxx Xxxx Assets following the Xxxxx Xxxx Transfer Date, in each case
other than Excluded Liabilities or other obligations which Sellers have
expressly agreed to pay pursuant to this Agreement or the Collateral Agreements;
PROVIDED, HOWEVER, that with respect to any such liability, obligation or
commitment that would not have resulted but for a breach of either Seller's
representations, warranties, covenants or agreements contained herein that is
covered by Sellers' indemnification obligations under Section 9.2, Buyer's
indemnification obligations under this clause (v) shall not apply to the extent
of (but only to the extent of) the indemnification obligations of Sellers for
such breach pursuant to Section 9.2.
9.4 EXCLUSIVE REMEDY. Buyer and Sellers each acknowledge and agree
that, from and after the Closing, their sole and exclusive remedy, with respect
to any and all claims relating to breaches of representations and warranties
(but, for the avoidance of doubt, not covenants or fraud) in this Agreement,
shall be pursuant to the indemnification provisions set forth in this Article 9.
In furtherance of the foregoing, Buyer and Sellers hereby waive, from and after
the Closing, to the fullest extent permitted under applicable law, any and all
rights, claims and causes of action they may have against each other relating to
breaches of representations and warranties (but, for the avoidance of doubt, not
covenants or fraud) in this Agreement arising under or based upon any federal,
state or local statute, law (including common law), ordinance, rule or
regulation or otherwise.
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9.5 LOSSES NET OF INSURANCE. The amount of any Loss for which
indemnification is provided under this Article 9 shall be net of any amounts
recovered by the indemnified party under its insurance policies with respect to
such Loss after giving effect to any impact of such claims on the indemnifying
party's premiums and other costs of insurance. Each party hereby waives, to the
extent permitted under its applicable insurance policies, any subrogation rights
that its insurer may have with respect to any indemnified Loss. Any payments
made pursuant to this Article 9 shall be treated as an adjustment to the
Purchase Price for Tax purposes, unless a final determination (which shall
include the execution of a Form 870-AD or successor form) with respect to the
indemnified party causes such payment not to constitute an adjustment to the
Purchase Price for federal income Tax purposes.
9.6 PROCEDURES RELATING TO INDEMNIFICATION.
(a) In order for an indemnified party to be entitled to any
indemnification provided for under this Article 9 in respect of, arising out
of or involving a claim or demand made by any person, firm, Governmental
Entity or corporation against the indemnified party (a "Third-Party Claim"),
such indemnified party must notify the indemnifying party in writing, and in
reasonable detail, of the Third-Party Claim as promptly as reasonably
possible after receipt by such indemnified party of written notice of the
Third-Party Claim; PROVIDED, HOWEVER, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent
the indemnifying party shall have been actually prejudiced as a result of
such failure. Thereafter, the indemnified party shall deliver to the
indemnifying party, within five (5) Business Days after the indemnified
party's receipt thereof, copies of all notices and documents (including court
papers) received by the indemnified party relating to the Third-Party Claim;
PROVIDED, HOWEVER, that failure to make such deliveries shall not affect the
indemnification provided hereunder except to the extent the indemnifying
party shall have been actually prejudiced as a result of such failure.
(b) If a Third-Party Claim is made against an indemnified party, the
indemnifying party will be entitled to participate in the defense thereof
and, if it so elects in writing within ten (10) days of receipt of written
notice from the indemnified party and acknowledges its obligation to
indemnify the indemnified party therefor, to assume the defense thereof with
counsel, accountants or other designee selected by the indemnifying party and
reasonably satisfactory to the indemnified party, PROVIDED that the
indemnifying party conducts the defense actively and diligently thereafter.
Should the indemnifying party so elect to assume the defense of a Third-Party
Claim, the indemnifying party will not be liable to the indemnified party for
legal or accounting expenses subsequently incurred by the indemnified party
in connection with the defense thereof, absent any conflict of interest
between such parties. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof
and to employ counsel, at its own expense, unless a conflict of interest
would arise if counsel to the indemnifying party also represented the
indemnified party, separate from the counsel employed by the indemnifying
party, it being understood that the indemnifying party shall control such
defense, except to the extent of any such conflict of interest between such
parties. The indemnifying party shall be liable for the fees and expenses of
counsel employed by the indemnified party for any period during which the
indemnifying party has not assumed the defense thereof or in the event of any
conflict of interest between the indemnified party and the indemnifying
party. All the parties hereto shall cooperate in the
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defense or prosecution of any Third-Party Claim. Such cooperation shall include
the retention and (upon the other party's request) the provision to the other
party of records and information that are reasonably relevant to such
Third-Party Claim, and making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder, at the reasonable expense of the indemnifying party. Whether or not
the indemnifying party shall have assumed the defense of a Third-Party Claim,
the indemnified party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third-Party Claim without the indemnifying party's
prior written consent (which consent shall not be unreasonably withheld). The
indemnifying party shall not, without the prior written consent of the
indemnified party, enter into any settlement of any Third-Party Claim that would
result in the imposition of a consent order, injunction or decree which would
materially restrict or otherwise materially adversely affect the future activity
or conduct of the indemnified party or any Affiliate thereof, or without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld) that does not include, as an unconditional term thereof,
the release of the indemnified party from all liability in respect of such
Third-Party Claim except the liability satisfied by the indemnifying party.
(c) Notwithstanding the foregoing in this Section 9.6, if a
Third-Party Claim for a Straddle Period includes or could reasonably be
expected to include both a claim for Taxes that are Excluded Taxes and a
claim for Taxes that are Assumed Liabilities, and such claim for Taxes that
are Excluded Taxes is not separable from such claim for Taxes that are
Assumed Liabilities, the Sellers (if the claim for Taxes that are Excluded
Taxes exceeds or reasonably could be expected to exceed in amount the claim
for Taxes that are Assumed Liabilities) or otherwise Buyer (Sellers, on the
one hand, or Buyer, on the other hand, as the case may be, the "Controlling
Party") shall be entitled to control the defense of such Third-Party Claim
(such Third-Party Claim, a "Tax Claim"). In such case, the other party (the
"Non-Controlling Party") shall be entitled to participate fully (at the
Non-Controlling Party's sole expense) in the conduct of such Tax Claim and
the Controlling Party shall not settle such Tax Claim without the consent of
such Non-Controlling Party (which consent shall not be unreasonably
withheld). The costs and expenses of conducting the defense of such Tax Claim
shall be reasonably apportioned based on the relative amounts of the claim
for Taxes that are Excluded Taxes and the claim for Taxes that are Assumed
Liabilities. For purposes of this Section 9.6(c), the term "Assumed
Liabilities" shall include any Taxes of Windmill (other than Excluded Taxes).
(d) Notwithstanding any other provision, (a) Sellers shall be
entitled to control in all respects, and neither Buyer nor any of its
Affiliates shall be entitled to participate in, any Tax audit or other
proceeding with respect to any consolidated, combined or unitary Return that
includes any of the Sellers or any of their Affiliates; PROVIDED, HOWEVER,
that Sellers may not settle or otherwise resolve the portion, if any, of any
such Tax audit or other proceeding that pertains to income, gain, loss,
deduction or credit of Windmill (other than any such portion that could
impact an indemnification by the Sellers under clause (vii) of Section 9.2 of
this Agreement) without the consent of Buyer, which consent shall not be
unreasonably withheld, (b) except as set forth in clause (c) below, Buyer
shall be entitled to control in all respects, and neither Sellers nor any of
their Affiliates shall be entitled to participate in, any Tax audit or other
proceeding with respect to any consolidated, combined or unitary Return that
includes the Buyer or any of its Affiliates, (c) if a Tax audit or other
proceeding (including but not limited to a Tax audit or other proceeding
relating to a consolidated, combined or unitary Return) could give rise
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to an indemnification by the Sellers under clause (vii) of Section 9.2 of
this Agreement, Sellers shall have the right to control in all respects,
including as to settlement, at Sellers' expense, the conduct of the portion of
such Tax audit or other proceeding which could give rise to such an
indemnification, and with respect to such portion, Buyer (A) shall promptly
notify Sellers upon receipt of notice of the Tax audit or other proceeding or
any proposed assessment, (B) shall thereafter promptly forward to Sellers copies
of any communications received from or sent to any Taxing Authority by Buyer,
Windmill or any of their Affiliates and (C) shall facilitate to the extent
reasonably required by the Sellers, and shall not impede, Seller's control over,
such Tax audit or proceeding, and (d) none of the Sellers shall have any
obligation whatsoever pursuant to clause (vii) of Section 9.2 or pursuant to
Section 9.6(e) of this Agreement if Buyer fails to comply with any of the
covenants set forth in clauses (A), (B) and (C) of clause (c) above and Sellers
are actually prejudiced as a result of such failure.
(e) If and to the extent that Sellers are required to indemnify
Buyer pursuant to clause (vii) of Section 9.2 of this Agreement, within
thirty (30) days of receipt from Buyer of notification (together with
supporting documentation reasonably acceptable to Sellers) of a
"determination" within the meaning of Section 1313 of the Code or other final
agreement negotiated by Sellers with the relevant Taxing Authority, but in no
case sooner than one (1) Business Day prior to the date on which Buyer is
obligated to pay the applicable Taxing Authority, Sellers shall pay to Buyer
an amount equal to the sum of (1) the net present value (assuming a nine and
one-half percent (9.5%) discount rate) of forty percent (40%) of the excess
of (x) the amount allocated to the Stock pursuant to the determination over
(y) the amount set forth in SCHEDULE 2.2 hereto, amortized over fifteen (15)
years, and (2) any interest and penalties incurred by Buyer that would not
have been incurred but for such determination.
9.7 INDEMNIFICATION AMOUNTS. Notwithstanding anything to the contrary
stated in this Article 9, no indemnifying party shall have liability under
Section 9.2(i) or 9.3(i), as the case may be, for breaches of representations
and warranties (other than those set forth in Section 3.1(a), 3.2, 3.3(a), the
last sentence of Section 3.3(b), and Sections 3.7, 4.1(a) or 4.4 or fraudulent
misrepresentations) (a) for any individual Loss less than $20,000 or until the
aggregate amount of Losses (excluding any Loss less than $20,000) that the
indemnifying party would, but for this Section 9.7, be liable exceeds on a
cumulative basis an amount equal to three million dollars ($3,000,000) (the
"Basket"), and then only to the extent that the aggregate of all Losses exceeds
the Basket or (b) for Losses in excess of fifteen (15) percent of the Purchase
Price. Buyer and Sellers agree that certain representations and warranties
contained in this Agreement are qualified by materiality references or by
matters having or not having a Material Adverse Effect (collectively, the
"Materiality Qualifiers"). Buyer and Sellers agree that for purposes of Sections
9.2 and 9.3 hereof and for purposes of calculating the Basket and the amount of
Losses, the Materiality Qualifiers shall be ignored and the representations and
warranties shall be construed without regard to any Materiality Qualifiers
therein contained.
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ARTICLE 10
TERMINATION
10.1 BASES FOR TERMINATION. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(a) by mutual written consent of Sellers and Buyer;
(b) by Buyer if any of the conditions set forth in Section 8.2 shall
have become incapable of fulfillment and shall not have been waived by Buyer;
(c) by either Seller if any of the conditions set forth in Section
8.3 shall have become incapable of fulfillment and shall not have been waived
by such Seller;
(d) by any party hereto, if the FTC shall have determined not to
approve of Buyer as an acceptable purchaser of the Assets or if the FTC
otherwise conditions its approval of this Agreement and the Collateral
Agreements in a manner that would reasonably be expected to be materially
adverse to such party;
(e) by either Seller or Buyer if the Closing does not occur on or
prior to April 30, 2001; or
(f) by either Seller if the Merger Agreement is terminated.
PROVIDED, HOWEVER, that the party seeking termination pursuant to clause (b),
(c), or (e) is not in material breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
10.2 NOTICE OF TERMINATION; RETURN OF DOCUMENTS; CONTINUING
CONFIDENTIALITY OBLIGATION. In the event of termination by either Seller or
by Buyer pursuant to this Article 10, written notice thereof shall forthwith
be given to the other parties and the transactions contemplated by this
Agreement shall be terminated, without further action by any party. If the
transactions contemplated by this Agreement are terminated or rescinded as
provided herein:
(a) Buyer shall return all documents and copies and other material
received from Sellers relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to Sellers; and
(b) all confidential information received by Buyer with respect to
the Business shall be treated in accordance with the Confidentiality
Agreement, which shall remain in full force and effect notwithstanding the
termination of this Agreement.
10.3 EFFECT OF TERMINATION. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in this Article
10, this Agreement shall become void and of no further force and effect,
except for the provisions of (a) Section 5.5 relating to reimbursement of
expenses, (b) Section 6.1 relating to the obligation of Buyer to keep
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confidential certain information and data obtained by it, (c) Section 7.6
relating generally to expenses, (d) Section 7.2 relating to publicity, (e)
Sections 3.7 and 4.4 relating to finders' fees and brokers' fees or commissions,
and (f) Section 10.2 and this Section 10.3. Nothing in this Article 10 shall be
deemed to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement or to impair the right of any party
to compel specific performance by another party of its obligations under this
Agreement.
ARTICLE 11
GENERAL PROVISIONS
11.1 ASSIGNMENT; SUCCESSORS AND ASSIGNS. Except as set forth below,
this Agreement and the rights and obligations hereunder shall not be assignable
or transferable by Buyer or Sellers (including by operation of law in connection
with a merger or sale of substantially all the assets of Buyer or Sellers)
without the prior written consent of each of the other parties hereto. Buyer may
assign or delegate its rights, obligations or liabilities under this Agreement
in whole or in part to one or more subsidiaries of Buyer or to the lender or
lenders providing to it the financing to consummate the transactions
contemplated hereby, in each case without the consent of Sellers (provided that
a pledge of Buyer's rights, obligations or liabilities under this Agreement to
such lender or lenders shall not constitute an assignment hereunder until such
time as any such lender exercises its rights under the pledge agreement or other
applicable agreement or document); PROVIDED, HOWEVER, that in any such event,
Buyer shall remain fully liable for the fulfillment of all its obligations
hereunder. Any attempted assignment or delegation in contravention hereof shall
be null and void. This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the parties hereto.
11.2 NO THIRD-PARTY BENEFICIARIES. Except for Persons entitled to
indemnification under Article 9 hereof, this Agreement is for the sole
benefit of the parties hereto, and nothing herein express or implied shall
give or be construed to give to any Person or entity, other than the parties
hereto, any legal or equitable rights hereunder.
11.3 AMENDMENTS. No amendment to this Agreement shall be effective unless
it shall be in writing and signed by each party hereto.
11.4 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled
to the benefits thereof only by a written instrument signed by the party,
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Any consent given by any party pursuant to this Agreement shall be
valid only if contained in a written consent signed by such party.
11.5 NOTICES. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or
sent by telecopy, or by postage prepaid, registered, certified or express
mail or by reputable overnight courier service and shall be deemed given when
delivered by hand or telecopied, three days after mailing (one (1)
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Business Day in the case of guaranteed overnight express mail or guaranteed
overnight courier service), as follows (or at such other address or to such
other fax for a party as shall be specified by like notice):
(i) If to General Xxxxx or if to Pillsbury after the
Acquisition:
General Xxxxx, Inc.
Number Xxx Xxxxxxx Xxxxx Xxxx.
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn.: General Counsel
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
(ii) If to Pillsbury before the Acquisition:
Diageo plc
0 Xxxxxxxxx Xxxxx
Xxxxxx Xxxxxxx X0X0XX
Attn.: Group General Counsel
Fax: 000-00000-000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(iii)If to Buyer:
International Multifoods Corporation
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
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with a copy to:
Faegre & Xxxxxx LLP
2200 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
11.6 INTERPRETATION. The headings contained in this Agreement, in any
Exhibit or Schedule hereto and in the table of contents to this Agreement, are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa. This Agreement shall
be construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted. When a reference is made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of or Exhibit or Schedule to
this Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The phrases "the date of this
Agreement," "the date hereof" and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to the date set forth in the first
paragraph of this Agreement. The words "hereof," "hereby," "herein," "hereunder"
and similar terms in this Agreement shall refer to this Agreement as a whole and
not to any particular Section or Article in which such words appear. All
references to dollar amounts shall be deemed to be references to U.S. Dollars.
11.7 COUNTERPARTS. This Agreement and any amendments hereto may be
executed by facsimile and in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered
to the other party.
11.8 SEVERABILITY. If any provision of this Agreement or the application
of any such provision to any Person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
11.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota applicable to agreements
made and to be performed entirely within such State, without regard to the
choice of law principles of such State.
11.10 ACTIONS AND PROCEEDINGS. Sellers and Buyer hereby irrevocably
consent to the exclusive jurisdiction and venue of the Courts of the State of
Minnesota and the United States District Court for the District of Minnesota,
in connection with any action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. Buyer hereby
irrevocably appoints Buyer's General Counsel as its authorized agent upon
whom process may be served in any such action or proceeding instituted in any
such court and waives any objections to personal jurisdiction with respect
thereto. Sellers hereby irrevocably appoint General Xxxxx' General Counsel as
their authorized agent (PROVIDED that until the Acquisition is consummated,
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Pillsbury appoints its General Counsel as its authorized agent) upon whom
process may be served in any such action or proceeding instituted in any such
court and waives any objections to personal jurisdiction with respect thereto.
11.11 EXHIBITS AND SCHEDULES. All Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. If a matter is disclosed in any
Schedule to this Agreement, it shall be deemed to have been disclosed with
respect to all Schedules to this Agreement for which its relevance is evident
from the disclosure made, PROVIDED that the disclosure in such Schedule is
sufficient to reasonably inform the non-disclosing party of the information
required to be disclosed in another Schedule to avoid a misrepresentation
under the counterpart section or paragraph of this Agreement. For the
avoidance of doubt, the mere listing in any Schedule to this Agreement of a
document or other item shall be deemed adequate to disclose an exception to a
representation or warranty made herein only if such listing of the document
or item in the Schedule is sufficient to reasonably inform Buyer of such
exception to such representation or warranty. Inclusion of any matter in any
Schedule does not imply that such matter would, under the provisions of this
Agreement, have to be included in such Schedule.
11.12 SPECIFIC PERFORMANCE. Buyer and each Seller hereby acknowledge,
recognize and agree that (a) the Business, the Xxxxx Xxxx Business, the
Assets and the Xxxxx Xxxx Assets are unique property that cannot be
duplicated and (b) irreparable injury may result to the non-breaching party
and its business if the other party or parties breach any provision of this
Agreement such that money damages alone would not be sufficient remedy for
any such breach. Each party hereto therefore agrees that if it should engage,
or cause or permit any other Person to engage, in any act in violation of any
provision hereof, the other party or parties shall be entitled, in addition
to such other remedies, damages and relief as may be available under this
Agreement or applicable law, to an injunction prohibiting the breaching party
from engaging in any such act or specifically enforcing this Agreement, as
the case may be.
11.13 ENTIRE AGREEMENT. Except to the extent otherwise contemplated
herein, this Agreement (including the Schedules and Exhibits attached hereto
and the Collateral Agreements) contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and, except to the extent specifically set forth herein, supersedes
all prior agreements and understandings relating to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
GENERAL XXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
THE PILLSBURY COMPANY
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President Strategy and
Business Development
INTERNATIONAL MULTIFOODS
CORPORATION
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman of the Board, President and
Chief Executive Officer
