1
EXHIBIT 2.1
AGREEMENT OF SALE AND PLAN OF MERGER
BY AND AMONG
AHP SUBSIDIARY HOLDING CORPORATION
AMERICAN HOME PRODUCTS CORPORATION
AMERICAN HOME FOOD PRODUCTS, INC.
AND
AHFP HOLDING CORPORATION
AND
AHFP ACQUISITION CORPORATION
DATED AS OF SEPTEMBER 5, 1996
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
ARTICLE 2
THE ACQUISITION AND MERGER . . . . . . . . . . . . . . . . . . . . . . . . -11-
2.1 PRECLOSING ACTIONS . . . . . . . . . . . . . . . . . . . . . -11-
2.2 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . -12-
2.3 EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . . . . -12-
2.4 EFFECT OF THE MERGER . . . . . . . . . . . . . . . . . . . . -12-
2.5 CERTIFICATE OF INCORPORATION; BY-LAWS . . . . . . . . . . . -12-
2.6 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . -12-
2.7 MERGER CONSIDERATION; CONVERSION AND CANCELLATION
OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . -13-
2.8 REDEMPTION OF OLD AHFP SHARES . . . . . . . . . . . . . . . -13-
ARTICLE 3
CLOSING; PURCHASE PRICE ADJUSTMENT . . . . . . . . . . . . . . . . . . . . -14-
3.1 THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . -14-
3.2 CLOSING ACTIONS BY BUYER . . . . . . . . . . . . . . . . . . -14-
3.3 CLOSING ACTIONS BY SELLERS . . . . . . . . . . . . . . . . . -15-
3.4 CONTEMPORANEOUS EFFECT . . . . . . . . . . . . . . . . . . . -16-
3.5 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . -17-
3.6 CLOSING STATEMENT . . . . . . . . . . . . . . . . . . . . . -17-
3.7 ADJUSTMENT OF PURCHASE PRICE . . . . . . . . . . . . . . . . -19-
3.8 ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . -20-
ARTICLE 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
REPRESENTATIONS AND WARRANTIES
OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
4.1 ORGANIZATION, GOOD STANDING, POWER, ETC. . . . . . . . . . . -20-
4.2 CAPITALIZATION OF THE COMPANIES . . . . . . . . . . . . . . -22-
4.3 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . -23-
4.4 EFFECT OF AGREEMENT . . . . . . . . . . . . . . . . . . . . -23-
4.5 FINANCIAL DATA AND NET ASSET VALUE . . . . . . . . . . . . . -23-
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . . . -24-
4.7 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
4.8 REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . -26-
4.9 GOOD TITLE TO AND CONDITION OF ASSETS; CONDUCT OF
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
4.10 CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . -27-
4.11 INTELLECTUAL PROPERTY RIGHTS . . . . . . . . . . . . . . . . -28-
4.12 LITIGATION AND CLAIMS . . . . . . . . . . . . . . . . . . . -30-
4.13 COMPLIANCE WITH LAW; APPLICABLE PERMITS . . . . . . . . . . -31-
4.14 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . -31-
4.15 AGREEMENTS REGARDING EMPLOYEES . . . . . . . . . . . . . . . -32-
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4.16 BENEFIT PLANS . . . . . . . . . . . . . . . . . . . . . . . -33-
4.17 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . -35-
4.18 INTERCOMPANY TRANSACTIONS . . . . . . . . . . . . . . . . . -35-
4.19 LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . -35-
4.20 BROKER'S FEES . . . . . . . . . . . . . . . . . . . . . . . -37-
4.21 NO OTHER REPRESENTATIONS OR WARRANTIES . . . . . . . . . . . -37-
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB . . . . . . . . . . -37-
5.1 CORPORATE ORGANIZATION . . . . . . . . . . . . . . . . . . . -37-
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . . . -38-
5.3 BROKER'S FEES . . . . . . . . . . . . . . . . . . . . . . . -38-
5.4 CONSENTS AND APPROVALS; NO VIOLATIONS . . . . . . . . . . . -38-
5.5 FINANCIAL CAPABILITY . . . . . . . . . . . . . . . . . . . . -39-
5.6 SECURITIES ACT . . . . . . . . . . . . . . . . . . . . . . . -39-
5.7 CAPITALIZATION AND ORGANIZATION OF . . . . . . . . . . . . -39-
5.8 NO OTHER REPRESENTATIONS OR WARRANTIES . . . . . . . . . . . -39-
ARTICLE 6
CONDUCT OF BUSINESS PENDING THE CLOSING . . . . . . . . . . . . . . . . . . -40-
6.1 CONDUCT OF BUSINESS PENDING THE CLOSING . . . . . . . . . . -40-
6.2 PERMITTED ACTIONS . . . . . . . . . . . . . . . . . . . . . -42-
6.3 CHANGE OF CORPORATE NAMES . . . . . . . . . . . . . . . . . -42-
ARTICLE 7
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-
7.1 NO TRANSFER OF SHARES . . . . . . . . . . . . . . . . . . . -43-
7.2 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . -43-
7.3 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . -43-
7.4 ACCESS TO INFORMATION . . . . . . . . . . . . . . . . . . . -44-
7.5 FILINGS AND AUTHORIZATIONS . . . . . . . . . . . . . . . . . -44-
7.6 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . -45-
7.7 INTERCOMPANY AND OTHER ARRANGEMENTS . . . . . . . . . . . . -50-
7.8 BULK SALES LAWS . . . . . . . . . . . . . . . . . . . . . . -50-
7.9 USE OF NAME . . . . . . . . . . . . . . . . . . . . . . . . -50-
7.10 NO SOLICITATION . . . . . . . . . . . . . . . . . . . . . . -50-
7.11 CERTAIN PROHIBITED ACTIONS . . . . . . . . . . . . . . . . . -50-
7.12 INDEBTEDNESS; CHANGE IN CONTROL PAYMENTS. . . . . . . . . . -51-
7.13 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . -51-
7.14 SALES OF OLD AHFP SHARES AND TAG ALONG. . . . . . . . . . . -51-
7.15 CERTAIN RIGHTS OF SELLERS. . . . . . . . . . . . . . . . . -53-
7.16 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . -54-
ARTICLE 8
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
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8.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT . . . . . . . . . -54-
8.2 CONDITIONS TO THE OBLIGATION OF SELLERS . . . . . . . . . . -54-
8.3 CONDITIONS TO THE OBLIGATION OF BUYER . . . . . . . . . . . -55-
ARTICLE 9
AGREEMENTS WITH RESPECT TO EMPLOYEES
AND EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . -56-
9.1 POST-CLOSING OBLIGATIONS TO EMPLOYEES . . . . . . . . . . . . -56-
9.2 SEVERANCE WITH RESPECT TO EMPLOYEES IN THE UNITED STATES . . -57-
9.3 SEVERANCE WITH RESPECT TO EMPLOYEES IN CANADA. . . . . . . . -58-
9.4 BENEFIT PLANS WITH RESPECT TO EMPLOYEES . . . . . . . . . . -59-
9.5 WARN ACT . . . . . . . . . . . . . . . . . . . . . . . . . . -63-
9.6 NO THIRD PARTY BENEFICIARIES. . . . . . . . . . . . . . . . -64-
ARTICLE 10
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . -64-
10.1 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . -64-
10.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . -65-
ARTICLE 11
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -65-
11.1 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . -65-
11.2 PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . -67-
11.3 LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . -68-
11.4 INDEMNIFICATION AS SOLE REMEDY . . . . . . . . . . . . . . . -69-
ARTICLE 12
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . -69-
12.1 PUBLIC STATEMENTS . . . . . . . . . . . . . . . . . . . . . -69-
12.2 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . -69-
12.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . -70-
12.4 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . -71-
12.5 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . -71-
12.6 PARTIES IN INTEREST . . . . . . . . . . . . . . . . . . . . -71-
12.7 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . -71-
12.8 ACCESS TO RECORDS AFTER EFFECTIVE TIME . . . . . . . . . . . -72-
12.9 MITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . -73-
12.10 RETURN OF INFORMATION . . . . . . . . . . . . . . . . . . . -73-
12.11 DIRECTORS, OFFICERS AND STOCKHOLDER LIABILITY . . . . . . . -73-
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AGREEMENT OF SALE AND PLAN OF MERGER
This AGREEMENT OF SALE AND PLAN OF MERGER dated as of September
5, 1996 (this "Agreement"), by and among AHP SUBSIDIARY HOLDING CORPORATION, a
Delaware corporation ("Holding"), AMERICAN HOME PRODUCTS CORPORATION, a
Delaware corporation ("AHP" and, together with Holding, each a "Seller" and
collectively, "Sellers"), American Home Food Products, Inc., a Delaware
corporation ("AHFP"), and AHFP Holding Corporation, a Delaware corporation
("Buyer"), and AHFP Acquisition Corporation, a Delaware corporation ("Merger
Sub").
W I T N E S S E T H:
WHEREAS, Sellers, Whitehall (as defined herein) and the Companies
(as defined herein) conduct a business which manufactures, markets and sells
specialty food products;
WHEREAS, (x) Holding owns and has the legal right and authority
to sell, transfer, assign and deliver (i) 1000 shares (the "AHFP Shares") of
common stock, no par value, of AHFP, (ii) 100 shares (the "Luck's Shares") of
common stock, no par value, of LUCK'S, INCORPORATED, a Delaware corporation
("Luck's"), and (iii) 25,000 shares (the "AHF Shares") of common stock, $1.00
par value per share, of American Home Foods, Inc., a Delaware corporation
("AHF"), and (y) AHP owns and has the legal right and authority to sell,
transfer, assign and deliver 98,895 common shares and 12,261,650 Class A shares
(collectively, the "CHP Shares") of Canadian Home Products Limited, a Canadian
corporation ("CHP");
WHEREAS, the CHP Shares, the AHFP Shares, the Luck's Shares
and the AHF Shares (collectively, the "Shares") constitute all of the issued
and outstanding shares of capital stock of CHP, AHFP, Luck's and AHF;
WHEREAS, certain Assets (as defined herein) relating to the
Business are held by AHP and its Affiliates (as defined herein);
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law"), Merger Sub will merge with and into AHFP (the
"Merger");
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WHEREAS, it is contemplated that prior to the Closing (as defined
herein) either (X) Sellers shall transfer, or shall cause, the Assets, the
Luck's Shares, the AHF Shares and the CHP Shares to be transferred to AHFP or
(Y) Sellers shall transfer, or shall cause, the Assets (other than XXX Assets
(as defined herein)), the Luck's Shares and the CHP Shares to be transferred to
AHFP and in such case at the Closing the Surviving Corporation (as defined
herein) shall purchase the XXX Assets and AHF Shares as applicable;
WHEREAS, at the Closing it is contemplated that AHFP shall redeem
a portion of the AHFP Shares;
NOW, THEREFOR, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, unless otherwise clearly
indicated by the context, the terms defined below shall have the indicated
meanings:
1.1 "Accountant" shall have the meaning set forth in Section 3.6(c).
1.2 "Affiliate" shall mean, with respect to any Person, any Person
which directly or indirectly through stock ownership or through other
arrangements either controls, is controlled by or is under common control with
such Person; provided, however, that for purposes of this Agreement the term
"Affiliate" shall not include subsidiaries or other entities in which a Person
owns a majority of the ordinary voting power to elect a majority of the board
of directors or other governing board but is restricted from electing such
majority by contract or otherwise, until such time as such restrictions are no
longer in effect.
1.3 "Aggrieved Party" shall have the meaning set forth in Section
11.2(a)(i).
1.4 "Agreement" shall mean this Agreement and any supplements,
amendments, exhibits and schedules hereto.
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1.5 "AHF" shall have the meaning set forth in the second WHEREAS
clause of this Agreement.
1.6 "AHF Shares" shall have the meaning set forth in the second
WHEREAS clause of this Agreement.
1.7 (a) "AHF Share Purchase Price" shall mean such amount as may be
determined by the Buyer.
1.8 "AHFP" shall have the meaning set forth in the preamble clause of
this Agreement. After the merger, the term AHFP shall also include the
Surviving Corporation.
1.9 "AHFP Shares" shall have the meaning set forth in the second
WHEREAS clause of this Agreement.
1.10 "AHP" shall have the meaning set forth in the preamble of this
Agreement.
1.11 "AHP Assets" shall mean those assets set forth in Section 1.11 of
the Disclosure Schedule, which are owned by AHP and relate primarily to the
Business.
1.12 "Allocation Schedule" shall have the meaning set forth in Section
3.8.
1.13 "Xxxxxxxx" shall mean Xxxxxx Xxxxxxxx LLP.
1.14 "Applicable Laws" shall mean all statutes, regulations,
judgments, injunctions and writs of any Governmental Authority having
jurisdiction over the Companies, the Assets or the Assumed Liabilities, as may
be in effect on or prior to the Closing.
1.15 "Applicable Permits" shall mean any waiver, exemption, variance,
permit, authorization, license or similar approval required to be obtained or
maintained under Applicable Laws in connection with the Companies or the
Assets.
1.16 "Assets" shall mean, collectively, the AHP Assets, the Holding
Assets and the Whitehall Assets.
1.17 "Assumed Contracts" shall mean the leases, rental agreements,
insurance policies, sales orders, collective bargaining agreements, union
agreements, licenses, agreements, employee plans, distribution agreements,
broker or similar agreements, purchase orders, instruments of indebtedness,
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guarantees and any and all other contracts or other binding arrangements, in
each case included in the Assets.
1.18 "Assumed Liabilities" shall mean the liabilities relating to the
Assets including, but not limited to, the Assumed Contracts.
1.19 "Audited Financial Statements" shall have the meaning set forth
in Section 4.5(a).
1.20 "Base Net Asset Value" shall have the meaning set forth in
Section 3.7(a).
1.21 "Benefit Plans" shall have the meaning set forth in Section
4.16(a).
1.22 "Books and Records" shall mean the books and records of the
Companies (or the Sellers and Whitehall to the extent those portions of such
books and records relate primarily to the Assets).
1.23 "Business" shall refer collectively to the business of the
Companies (including their business utilization of the Assets), which
manufactures, markets and sells specialty food products, it being understood
that Sellers and their Affiliates manufacture and/or sell other food and food-
related products (including, but not limited to, an infant nutritional business
and no stick cooking spray business operated in Argentina) not included in the
Business.
1.24 "CHP" shall have the meaning set forth in the second WHEREAS
clause of this Agreement.
1.25 "CHP Shares" shall have the meaning set forth in the second
WHEREAS clause of this Agreement.
1.26 "Closing" shall have the meaning set forth in Section 3.1.
1.27 "Closing Date" shall have the meaning set forth in Section 3.1.
1.28 "Closing Net Asset Value" shall have the meaning set forth in
Section 3.6(a).
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1.29 "Closing Statement" shall have the meaning set forth in Section
3.6(a).
1.30 "Code" shall mean the United States Internal Revenue Code of
1986, as amended. All references to the Code, U.S. Treasury regulations or
other governmental pronouncements shall be deemed to include reference to any
applicable successor regulations or amending pronouncement.
1.31 "Commonly Controlled Entity" shall have the meaning set forth in
Section 4.16(k).
1.32 "Companies" shall mean, collectively, AHFP, AHF, Luck's, Polaner
and CHP.
1.33 "Company" shall mean, individually, AHFP, AHF, Luck's, Polaner or
CHP.
1.34 "Company Group" shall mean any "affiliated group" (as defined in
Section 1504(a)(1) and (a)(2) of the Code without regard to the limitations
contained in Section 1504(b) of the Code) that, at any time on or before the
Closing Date, includes or has included the subject entity or any predecessor of
or successor to the subject entity.
1.35 "Competition Laws" shall mean all Applicable Laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade.
1.36 "Contracts" shall mean the Assumed Contracts and all leases,
rental agreements, insurance policies, sales orders, collective bargaining
agreements, union contracts, licenses, agreements, employee plans, distribution
agreements, broker or similar agreements, purchase orders, instruments of
indebtedness, guarantees and any and all other contracts or other binding
arrangements of any of the Companies.
1.37 "Costs" shall have the meanings set forth in Section 11.1(a).
1.38 "Delaware Law" shall have the meaning set forth in the fifth
WHEREAS clause of this Agreement.
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1.39 "Disclosure Schedule" shall mean that certain schedule identified
as such and delivered by Sellers to Buyer pursuant to the Agreement.
1.40 "Effective Time" shall have the meaning set forth in Section 2.3.
1.41 "Employees" shall mean (i) all individuals who, on the Closing
Date, are actively employed by one of the Companies and (ii) all individuals
who are absent from active employment on the Closing Date because of short-term
disability leave, authorized leave of absence from any such Company, military
service or lay-off with recall rights as of such date and who offer to return
to work pursuant to such leave, military service or recall rights.
1.42 "Encumbrances" shall mean all claims, security interests, liens,
pledges, charges, escrows, options, proxies, rights of first refusal,
preemptive rights, mortgages, hypothecation, prior assignments, title retention
agreements, indentures, security agreements or any other encumbrances of any
kind.
1.43 "Environmental Laws" shall mean all Applicable Laws relating to
the protection or pollution of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended (42 U.S.C.
Section 9601 et seq.) ("CERCLA"), the Emergency Planning and Community Right
to Know Act of 1986, the Federal Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act and the Hazardous and Solid Waste
Amendments thereto, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the Safe Drinking Water Act, and any similar or
analogous statutes, regulations and decisional law of any Governmental
Authority, as each of the foregoing exist on the date hereof.
1.44 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.45 "Final Net Asset Value" shall have the meaning set forth in
Section 3.6(c).
1.46 "Forward Split" shall have the meaning set forth in Section
2.1(a).
1.47 "GAAP" shall mean United States generally accepted accounting
principles.
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1.48 "Governmental Authority" shall mean any governmental department,
commission, board, bureau, agency, court or other instrumentality of the United
States or any other country or any jurisdiction, municipality or other
political subdivision thereof where a Company is now operating or has operated.
1.49 "HSR Act" shall have the meaning set forth in Section 7.5.
1.50 "Hazardous Substance" shall mean (i) any hazardous substance as
that term is defined in CERCLA and its implementing regulations and (ii)
petroleum, including crude oil or any fraction thereof, and natural gas in its
various forms, including natural gas liquids, liquefied natural gas, synthetic
gas usable for fuel, and mixtures of natural gas and such synthetic gas, and
(iii) any pollutant or contaminant whose storage, handling, or disposal is
regulated under Environmental Law.
1.51 "Holding" shall have the meaning set forth in the preamble clause
of this Agreement.
1.52 "Holding Assets" shall mean those assets set forth in Section
1.52 of the Disclosure Schedule, which are owned by Holding and relate
primarily to the Business.
1.53 "Indemnifying Party" shall have the meaning set forth in Section
11.2(a)(i).
1.54 "Intellectual Property" shall mean all (i) Patents, (ii) Know-
how, (iii) Trademarks and (iv) copyrights, copyright registrations and
applications for registration, inventions, designs, industrial and utility
models (including registrations and applications for registration thereof),
trade secrets and all other intellectual property rights, whether registered or
not, licensed to or owned by any of the Companies (or the Sellers to the extent
included in the Assets).
1.55 "Know-how" shall mean all product formulas, specifications,
processes, product designs, plans, ideas, concepts, manufacturing, engineering
and other manuals and drawings, technical information, data, research records,
all promotional literature, customer and supplier lists and similar data and
information and all other confidential or proprietary technical and business
information.
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1.56 "Leased Real Property" shall mean all real property relating to
the Business leased by any of the Companies, including any buildings,
structures, fixtures and improvements thereon or appurtenances thereto.
1.57 "Luck's" shall have the meaning set forth in the second WHEREAS
clause of this Agreement.
1.58 "Luck's Shares" shall have the meaning set forth in the second
WHEREAS clause of this Agreement.
1.59 "Material Adverse Change" shall mean a change that has had a
Material Adverse Effect.
1.60 "Material Adverse Effect" shall mean an effect that (x) is
materially adverse to the financial condition, operations or properties of the
Business taken as a whole, or (y) materially adversely impairs the ability of
Sellers or AHFP to perform their respective obligations under this Agreement or
the agreements contemplated hereby, taken as a whole.
1.61 "Material Contract" shall have the meaning set forth in Section
4.10.
1.62 "Merger" shall have the meaning set forth in the fifth WHEREAS
clause of this Agreement.
1.63 "Merger Sub Common Stock" shall have the meaning set forth in
Section 2.7(a).
1.64 "Merger Equity" shall have the meaning set forth in Section
3.2(a).
1.65 "Minimum Loss" shall have the meaning set forth in Section
11.3(a).
1.66 "Net Assets" shall mean the Assets and the combined net assets of
the Companies excluding intangible assets, cash, intercompany assets and
liabilities, Tax Assets and Tax Liabilities, reserves for litigation, workers'
compensation and self-insurance and Sellers' medical and pension programs, and
certain financial assets and liabilities unrelated to the operation of the
Companies consisting of commercial paper issued by AHFP and preferred stock of
an Affiliate of Sellers held by AHFP.
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1.67 "New AHFP Shares" shall have the meaning set forth in Section
2.7(a).
1.68 "Old AHFP Shares" shall have the meaning set for the in Section
2.7(b).
1.69 "Operating Profits" shall mean, with respect to the Companies
(and Sellers and Whitehall to the extent related to the Assets), net sales less
cost of goods sold, marketing, selling, storage, packing and shipping expenses,
administrative and general expenses and other miscellaneous expenses, excluding
charges for corporate overhead and other corporate expenses, amortization of
goodwill arising from acquisitions, all costs associated with current retiree
benefits and certain income and finance charges unrelated to the Business or
the operation of the Companies.
1.70 "Owned Real Property" shall mean the real property included in
the Assets or owned by any of the Companies, including any buildings,
structures, fixtures and improvements thereon or appurtenances thereto.
1.71 "XXX Assets" shall mean all Assets or other assets of the
Business owned by Sellers, Whitehall or any Company (other than AHFP) related
primarily to the manufacture and distribution of Xxx, including real and
personal property (both tangible and intangible).
1.72 "XXX Asset Purchase Price" shall mean such amount as may be
determined by the Buyer.
1.73 "Patents" shall mean all patents and patent applications
(including, without limitation, all reissues, divisions, continuations,
continuations-in-part, renewals and extensions of the foregoing) owned by the
Companies (or the Sellers or Whitehall to the extent included in the Assets).
1.74 "Permitted Encumbrances" shall have the meaning set forth in
Section 4.9(b).
1.75 "Person" shall mean an individual, a corporation, a partnership,
an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
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1.76 "PBGC" shall have the meaning set forth in Section 4.16(d).
1.77 "Polaner" shall mean X. Xxxxxxx, Inc., a Delaware corporation,
and a wholly-owned subsidiary of AHFP.
1.78 "Purchase Price" shall have the meaning set forth in Section 2.8.
1.79 "Real Property" shall mean the Owned Real Property and the Leased
Real Property.
1.80 "Redemption Price" shall have the meaning set forth in Section
2.8.
1.81 "Registration Rights Agreement" shall mean the registration
rights agreement between the Surviving Corporation, Sellers or their Affiliates
and Buyer to be entered into at Closing based on the terms contained in the
term sheet set forth on Exhibit A hereto.
1.82 "Release" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal or leaching of a
Hazardous Substance into the environment.
1.83 "Section 338(h)(10) Elections" shall have the meaning set forth
in Section 7.6(e).
1.84 "Section 338(h)(10) Taxes" shall mean any income taxes that would
not have been imposed but for the Section 338(h)(10) Elections or any elections
under state, local or other Tax law that are required to be made or deemed to
have been made as a result of any Section 338(h)(10) Election.
1.85 "Securities Act" shall mean the Securities Act of 1933, as
amended.
1.86 "Shares" shall have the meaning set forth in the third WHEREAS
clause of this Agreement.
1.87 "Straddle Period" shall mean any taxable year or period beginning
before and ending after the Closing Date.
1.88 "Surviving Corporation" shall have the meaning set forth in
Section 2.2.
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1.89 "Tax Assets" shall mean all assets comprising receivables or
deferred assets or prepayments for Taxes, including, without limitation, that
portion of receivables representing goods and services taxes, value added taxes
and similar taxes.
1.90 "Taxes" (and with correlative meanings, "Tax," "Taxes" and
"Taxable") shall mean all taxes with respect to the Companies of any kind
imposed by a federal, territorial, state, local or foreign Governmental
Authority, and any payments made to another party pursuant to a Tax Sharing
Arrangement, indemnity or other similar arrangement, including but not limited
to those on, or measured by or referred to, as income, gross receipts,
financial operation, sales, use, ad valorem, goods and services, value added,
franchise, profits, license, withholding, payroll (including all contributions
or premiums pursuant to industry or governmental social security laws or
pursuant to other tax laws and regulations), employment, excise, severance,
stamp, occupation, premium, property, environmental, transfer or windfall
profits taxes, customs, duties or similar fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax
or additional amounts imposed by such Governmental Authority with respect to
such amounts.
1.91 "Tax Liabilities" shall mean all liabilities for Taxes imposed on
the Companies or otherwise with respect to the Business.
1.92 "Tax Returns" shall mean all reports, returns, schedules and any
other documents required to be filed with respect to Taxes and all claims for
refunds of Taxes.
1.93 "Tax Sharing Arrangement" shall mean any written or unwritten
agreement or arrangement for the allocation or payment of Tax Liabilities or
payment for Tax benefits with respect to a consolidated, combined or unitary
Tax Return which Tax Return includes a Company.
1.94 "Third Party Claim" shall have the meaning set forth in Section
11.2(a)(i).
1.95 "Trademarks" shall mean (i) trademarks, service marks, trade
names, trade dress, labels, logos and all other names and slogans associated
with any products or embodying the goodwill of the Business, whether or not
registered, and any applications or
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registrations therefor and (ii) any associated goodwill incident thereto owned
by the Companies (or the Sellers to the extent included in the Assets).
1.96 "Transitional Services Agreement" shall mean the agreement
related to certain administrative, technical and other similar services, and
the lease of office space, to be provided by Sellers or their Affiliates to the
Surviving Corporation or its Affiliates, to be entered into at the Closing
based on the terms contained in the term sheet set forth on Exhibit B hereto.
1.97 "Whitehall" shall mean Whitehall, a French corporation, and a
wholly-owned subsidiary of AHP.
1.98 "Whitehall Assets" shall mean those assets set forth on Section
1.98 of the Disclosure Schedule, which are owned by Whitehall and relate
primarily to the Business.
ARTICLE 2
THE ACQUISITION AND MERGER
2.1 PRECLOSING ACTIONS. Prior to the Closing Date, the Sellers shall
cause the following to occur:
(a) As may be requested by Buyer, the Certificate of
Incorporation of AHFP shall be amended, in a form and substance reasonably
acceptable to Buyer, so as to (i) increase the amount of AHFP's authorized
common stock, no par value, by such amount as Buyer may request, (ii) effect a
subdivision of the existing outstanding AHFP Shares into such greater number of
shares as Buyer may request (the "Forward Split") or (iii) provide for the
exculpation from liability of the directors of AHFP to the full extent
permissible under Delaware Law;
(b) The Assets, the Luck's Shares, the AHF Shares and the CHP
Shares shall be transferred to AHFP by means of such instruments of assignment
and transfer, in form and substance reasonably acceptable to Buyer, as may be
necessary to effect such transfer; provided that Buyer shall have the right to
request that the XXX Assets and the AHF Shares, as applicable, not be so
transferred to AHFP and in such case the Surviving Corporation shall purchase
the XXX Assets and the AHF Shares, as applicable, at Closing as provided for in
Section 3.2(c); and
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(c) AHFP shall assume all of the Assumed Liabilities
attributable to the Assets transferred and contributed to AHFP pursuant to
Section 2.1(b) pursuant to such instruments of assumption, in form and
substance reasonably acceptable to Buyer, as may be necessary to effect such
assumption.
2.2 THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with Delaware Law, at the Effective Time,
Merger Sub shall be merged with and into AHFP. As a result of the Merger, the
separate corporate existence of Merger Sub shall cease and AHFP shall continue
as the surviving corporation of the Merger (the "Surviving Corporation"). The
name of the Surviving Corporation shall be "American International Foods, Inc."
or subject to Section 6.3, such other name as may be designated by Buyer. By
their execution and delivery of this Agreement, Holdings hereby consents as the
sole stockholder of AHFP Shares in favor of the Merger and Buyer hereby
consents as the sole stockholder of Merger Sub Common Stock in favor of the
Merger.
2.3 EFFECTIVE TIME. At the Closing, the Merger shall be consummated by
filing a Certificate of Merger with the Secretary of State of Delaware, in such
form as is required by, and executed in accordance with the relevant provisions
of, Delaware Law (the date and time of the completion of such filing being the
"Effective Time").
2.4 EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the foregoing, subject to the applicable provisions of
Delaware Law, at the Effective Time, all property, rights, privileges, powers
and franchises of Merger Sub and AHFP shall vest in the Surviving Corporation.
2.5 CERTIFICATE OF INCORPORATION; BY-LAWS. At the Effective Time, the
Certificate of Incorporation and by-laws of AHFP, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation and by-
laws of the Surviving Corporation; provided that the Certificate of
Incorporation shall be amended so as to provide that the name of the Surviving
Corporation shall be "American International Foods, Inc." or subject to Section
6.3, such other name as may be designated by Buyer.
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2.6 DIRECTORS AND OFFICERS. The directors of Merger Sub immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
at the Effective Time, each to hold office in accordance with the Certificate
of Incorporation and by-laws of the Surviving Corporation, and the officers of
Merger Sub immediately prior to the Effective Time shall be the officers of the
Surviving Corporation at the Effective Time, in each case until their
respective successors are duly elected or appointed and qualified.
2.7 MERGER CONSIDERATION; CONVERSION AND CANCELLATION OF SECURITIES.
At the Effective Time, by virtue of the Merger and without any action on the
part of AHFP, Merger Sub or any other party, the following shall occur;
(a) Subject to the provisions of Section 2.7(c), each share of
common stock, par value $0.01 per share of Merger Sub (the "Merger Sub Common
Stock") issued and outstanding immediately prior to the Effective Time shall by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into .232 of a share of common stock, no par value, of the
Surviving Corporation (the "New AHFP Shares");
(b) With respect to all AHFP Shares issued and outstanding
immediately prior to the Effective Time, .232 of each such shares shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into the right to receive in cash from Buyer at the Effective Time
its pro rata share of the Merger Equity (based upon the number of such issued
and outstanding shares held by Sellers; and it is acknowledged that such
converted shares shall be converted in the aggregate into the right to receive
an amount in cash equal to 100% of the Merger Equity) and to the extent not so
converted pursuant to the foregoing each share of the AHFP Shares issued and
outstanding immediately prior to the Effective Time shall remain outstanding
after the Merger (the "Old AHFP Shares"); and
(c) Notwithstanding the foregoing, if as contemplated by Section
2.1(a), subsequent to the date of this Agreement and prior to the Effective
Time the outstanding AHFP Shares shall have been subdivided pursuant to a
Forward Split into a greater number of shares, then the number of New AHFP
Shares to be issued pursuant to the Merger in respect of a share of the Merger
Sub Common Stock pursuant to Section 2.7(a) and the number of Old AHFP Shares
to be redeemed pursuant to Section 2.8 shall be correspondingly adjusted to
reflect such subdivisions.
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2.8 REDEMPTION OF OLD AHFP SHARES. At the Closing, the Surviving
Corporation shall cause the financing contemplated herein to be funded by the
lenders thereof in such amount as may be necessary, when added to the amount of
the Merger Equity, to equal the amount of $1,275,000,000 minus the product of
25% times the Merger Equity (the "Purchase Price"). It is acknowledged that
the total amount to be received in cash by Sellers at Closing in respect of the
transactions contemplated herein shall in no event be less than $1,202,000,000.
Subject to the provisions of Section 2.7(c), at the Closing the Surviving
Corporation shall redeem 710 shares of the Old AHFP Shares at an aggregate
redemption amount equal to the Purchase Price minus the sum of the amount of
the Merger Equity and the amount, if any, of the XXX Asset Purchase Price and
the AHF Share Purchase Price paid at the Closing pursuant to Section 3.2(c)
(the "Redemption Price").
ARTICLE 3
CLOSING; PURCHASE PRICE ADJUSTMENT
3.1 THE CLOSING. Unless this Agreement shall have been terminated,
on the terms and subject to the conditions of this Agreement, the consummation
of the transactions contemplated by Article 2 (other than Section 2.1) and this
Article 3 (the "Closing") shall take place at the offices of American Home
Products Corporation, Five Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 on the
second succeeding business day on which the last to be fulfilled or waived of
the conditions set forth in Article 8 shall be fulfilled or waived in
accordance with this Agreement or at such other time, date or place as the
parties may mutually agree upon in writing (the "Closing Date").
3.2 CLOSING ACTIONS BY BUYER. At the Closing, Buyer shall perform
the following:
(a) Pursuant to the Merger, Buyer shall pay to Sellers
$292,000,000 or such lesser amount as Buyer may determine (the "Merger
Equity");
(b) Buyer shall cause Merger Sub to take all action necessary
for it to effect the Merger;
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(c) If pursuant to Buyer's request the XXX Assets or the AHF
Shares have not been transferred to AHFP pursuant to Section 2.1(b), then Buyer
shall cause the Surviving Corporation to purchase the XXX Assets and the AHF
Shares, as applicable, and, as may be applicable, to pay to the Sellers in
respect of the XXX Assets if so purchased the XXX Asset Purchase Price or in
respect of the AHF Shares if so purchased the AHF Share Purchase Price;
(d) Buyer shall cause the Surviving Corporation to effect the
redemption contemplated by Section 2.8;
(e) Buyer shall cause the Surviving Corporation to pay the
Redemption Price and, if applicable, the XXX Asset Purchase Price and the AHF
Share Purchase Price to the Sellers in cash payable by wire transfer in
immediately available funds to a bank account of Sellers (which account shall
be designated by Sellers no fewer than two business days prior to the Closing
Date);
(f) Buyer shall cause the Surviving Corporation to execute and
deliver to Sellers a Registration Rights Agreement and a Transitional Services
Agreement;
(g) Buyer shall deliver to Sellers and the Surviving
Corporation a Registration Rights Agreement executed by Buyer;
(h) Buyer shall deliver to the Sellers a certificate signed by
an authorized officer of Buyer as required to be delivered pursuant to Section
8.2(c);
(i) Buyer shall deliver to the Sellers a certificate, signed
by an authorized officer of Buyer and Merger Sub, certifying to (i) the due
organization and good standing of Buyer and Merger Sub, (ii) the corporate
resolutions of Buyer and Merger Sub authorizing the transactions contemplated
by this Agreement and (iii) the incumbency of officers of Buyer and Merger Sub
executing this Agreement and the other agreements, instruments or certificates
delivered at the Closing; and
(j) Buyer shall execute and deliver such other instruments and
documents, in form and substance reasonably acceptable to Sellers, as may be
necessary to effect the Closing.
3.3 CLOSING ACTIONS BY SELLERS. At the Closing, Sellers shall
perform the following:
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(a) Sellers shall cause AHFP to take all action necessary for it
to effect the Merger;
(b) If pursuant to Buyer's request the AHF Shares have not been
transferred to AHFP pursuant to Section 2.1(b), then Sellers shall cause to be
delivered to the Surviving Corporation certificates representing the AHF Shares
duly endorsed for transfer to the Surviving Corporation or accompanied by stock
powers duly executed in blank;
(c) If pursuant to Buyer's request the XXX Assets have not been
transferred to AHFP pursuant to Section 2.1(b), then Sellers shall cause to be
delivered to the Surviving Corporation such assignments, deeds, bills of sale
and any other appropriate instruments of sale and conveyance, in form and
substance reasonably acceptable to Buyer, transferring under Applicable Laws
all real property, personal property and Intellectual Property included in the
XXX Assets to the Surviving Corporation. The Surviving Corporation shall
prepare any and all individual assignment documents required in the respective
countries and record them in the national patent and trademark and other
government offices, as applicable;
(d) The Sellers shall deliver or shall cause to be delivered to
the Surviving Corporation for cancellation the certificates representing the
Old AHFP Shares converted pursuant to the Merger or redeemed pursuant to
Section 2.8;
(e) Sellers shall deliver to Buyer a certificate signed by an
authorized officer of each of the Sellers as required to be delivered pursuant
to Section 8.3(c);
(f) Sellers shall deliver to Buyer, a certificate, signed by
an authorized officer of each of the Sellers and AHFP, certifying to (i) the
due organization and good standing of Sellers and AHFP, (ii) the corporate
resolutions of each of Sellers and AHFP authorizing the transactions
contemplated by this Agreement and (iii) the incumbency of officers of the
Sellers and AHFP executing this Agreement and the other agreements, instruments
or certificates delivered at the Closing;
(g) Sellers shall deliver to the Surviving Corporation the
stock books, stock ledgers, minute books, corporate seals and financial records
and statements of the Companies;
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(h) Sellers shall deliver to Buyer all documents and
instruments evidencing the transfers, contributions and assumptions made
pursuant to Sections 2.1(b) and (c);
(i) Sellers shall deliver or shall cause to be delivered to
Buyer, such other instruments and documents, in form and substance reasonably
acceptable to Buyer, as may be necessary to effect the Closing;
(j) Sellers shall deliver to the Surviving Corporation a
Transitional Services Agreement executed by Sellers or their Affiliates;
(k) Sellers shall deliver to Buyer and the Surviving
Corporation a Registration Rights Agreement executed by Sellers or their
Affiliates.
3.4 CONTEMPORANEOUS EFFECT. For purposes of this Agreement, each and
every event referred to in Article 2 (other than Section 2.1) and this Article
3 that is to occur on the Closing Date shall be deemed to have occurred
contemporaneously.
3.5 FURTHER ASSURANCES. (a) From time to time, at Buyer's or
Sellers' request, whether at or after the Closing Date, Buyer or Sellers, as
the case may be, shall, and shall cause their respective Affiliates to, execute
and deliver such further instruments of conveyance, transfer and assignment,
cooperate and assist in providing information for making and completing
regulatory filings, and take such other actions as Buyer or Sellers, as the
case may be, may reasonably require of the other party to more effectively
effect the transactions contemplated by this Agreement.
(b) To the extent that the assignment of any Assumed Contract
to AHFP (or the Surviving Corporation) hereunder shall require the consent of
the other party thereto, this Agreement shall not constitute an agreement to
assign the same if an attempted assignment would constitute a breach thereof.
Sellers will use their diligent efforts to obtain the consent of the other
parties to such Assumed Contracts for the assignment thereof to AHFP (or the
Surviving Corporation); provided, however, that Sellers shall not be obligated
to make any payment, make any commitments, incur any liabilities or take any
other detrimental action to obtain any such consent. If any such consent is
not obtained, Sellers shall cooperate with Buyer in any arrangement reasonably
requested by Buyer to provide for AHFP
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(or the Surviving Corporation) the benefits under any such Assumed Contract,
including the enforcement at the cost of and for the benefit of AHFP (or the
Surviving Corporation) of any and all rights thereunder of Sellers or the
respective Affiliate against the other party thereto.
3.6 CLOSING STATEMENT. (a) As promptly as practicable, but no later
than 90 days after the Closing Date, Sellers will cause to be prepared and
delivered to Buyer two statements (the "Closing Statements"), one such
statement (the "Closing Date Statement") setting forth the value of the Net
Assets as of the close of business on the Closing Date (the "Closing Net Asset
Value") and the other such statement (the "Average Value Statement") setting
forth the average month end value of the Net Assets for the 12 months ended
immediately prior to the Closing Date (the "Average Net Asset Value"). The
Closing Statement shall include line items and notes substantially consistent
with those of the 1995 audited combined statement of adjusted Net Assets
included in the Audited Financial Statements and the June 30, 1996 combined
statement of adjusted Net Assets included in the Audited Financial Statements;
provided however, that the amount of cash or cash equivalents remaining in the
Company as of the close of business on the Closing Date that is in excess of
the amount required to cover checks of the Company outstanding as of the close
of business on the Closing Date, shall be reflected on the Closing Statements.
Buyer shall cause the Companies and their respective employees to assist
Sellers in the preparation of the Closing Statements, including the taking of a
physical inventory, and shall provide Sellers and their independent auditors,
Xxxxxxxx, access at all reasonable times to the personnel, properties, books
and records of the Companies for such purpose and, insofar as such books and
records pertain to the Business, any of Buyer's Affiliates for such purpose.
The Closing Date Statement shall be accompanied by an audit report from
Xxxxxxxx stating that in its opinion such statement presents fairly, in all
material respects, the combined Net Assets as of the Closing Date, in
conformity with GAAP (except as set forth in the notes thereto) applied
consistently with the accounting principles applied in the Audited Financial
Statements and the Average Value Statement shall be accompanied by a review
report from Xxxxxxxx stating that in its opinion nothing has come to its
attention which would cause them to believe such statement was not prepared on
a consistent basis with those of December 31, 1995 and June 30, 1996.
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(b) If Buyer believes that either of the Closing Statements
does not present fairly in all material respects the Closing Net Asset Value or
the Average Net Asset Value, as the case may be, Buyer may, within 30 days
after delivery of the Closing Statements, deliver a notice to Sellers
specifying those items or amounts as to which Buyer disagrees, and the basis
therefor. Buyer shall be deemed to have agreed with all other items and
amounts contained in the Closing Statements and the calculation of Closing Net
Asset Value and Average Net Asset Value delivered pursuant to Section 3.6(a).
(c) If a notice of disagreement shall be duly delivered
pursuant to Section 3.6(b), the parties shall, during the 15 days following
such delivery, use their diligent efforts to reach agreement on the disputed
items or amounts in order to determine, as may be required, the amount of
Closing Net Asset Value or Average Net Asset Value, as the case may be, which
amount in either case shall not be more than the amount thereof shown in
Sellers' calculation delivered pursuant to Section 3.6(a) nor less than the
amount thereof shown in Buyer's calculation delivered pursuant to Section
3.6(b). If, during such period, the parties are unable to reach agreement,
they shall promptly thereafter select a firm of independent nationally
recognized public accountants chosen and mutually accepted by both parties (the
"Accountant") promptly to review this Agreement, the appropriate books and
records of the Companies and the disputed items or amounts for the purpose of
calculating Closing Net Asset Value and Average Net Asset Value. In making
such calculation, the Accountant shall consider only those items or amounts in
the Closing Statements or Sellers' calculation of Closing Net Asset Value or
Average Net Asset Value as the case may be, as to which Buyer has disagreed and
other adjustments directly related thereto. The Accountant shall deliver to
Sellers and Buyer, as promptly as practicable, a report setting forth such
calculation. Such report shall be final and binding upon the parties hereto.
The cost of such review and report shall, in the case of each report, be borne
(i) by the party whose calculation or calculations, taken together, were
furthest from that of the Accountants, and (ii) otherwise equally by Sellers
and Buyer if the calculations, taken together, are equally apart. "Final Net
Asset Value" means (A) Closing Net Asset Value as shown in Sellers' calculation
delivered pursuant to Section 3.6(a) if no notice of disagreement with respect
thereto is delivered, (B) the amount agreed upon by the parties pursuant to
this Section 3.6(c) or (C) in the absence of such agreement, the amount as
shown in the Accountant's calculation
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delivered pursuant to this Section 3.6(c); provided that Final Net Asset Value
shall not in any event be more than Sellers' calculation of Closing Net Asset
Value delivered pursuant to Section 3.6(a) nor less than Buyer's calculation of
Closing Net Asset Value delivered pursuant to Section 3.6(b). "Final Average
Net Asset Value" means the definitive Average Net Asset Value determined in a
manner similar to the manner for determining Final Net Asset Value in the
preceding sentence (which shall be applicable mutatis mutandis).
3.7 ADJUSTMENT OF PURCHASE PRICE.
(a) For purposes of this paragraph, "Base Net Asset Value" means the the
higher of (i) $256,530,000 or (ii) an amount equal to the Final Average Net
Asset Value minus $13 million. If the Base Net Asset Value exceeds Final Net
Asset Value, Sellers shall pay to Buyer, in the manner and with interest as
provided in Section 3.7(b), the amount of such excess. If Final Net Asset
Value exceeds the Base Net Asset Value, Buyer shall pay to Sellers, in the
manner and with interest as provided in Section 3.7(b), the amount of such
excess. Any such payment pursuant to this Section 3.7(a) shall be made at a
mutually convenient time and place (i) within 30 days after Sellers' delivery
of the documents referred to in Section 3.6(a) if no notice of disagreement is
duly delivered pursuant to Section 3.6(b), or (ii) if a notice of disagreement
is duly delivered pursuant to Section 3.6(b), then within 10 days after the
earlier of (A) agreement between the parties pursuant to Section 3.6(c) or (B)
delivery of the calculation of Final Net Asset Value and Final Average Net
Asset Value referred to in Section 3.6(c).
(b) Any payment made pursuant to this Section 3.7 shall be
made by wire transfer or by delivery to the payee of the required amount in
immediately available funds to such account as the payee designates for such
purpose at least two (2) days prior to the date of the required payment (or, if
not so designated, by certified or official bank check payable in immediately
available funds to the order of the payee in such amount). The amount to be
paid under this section shall bear interest from and including the Closing Date
to the date immediately preceding the date of payment at a rate per annum equal
to the rate publicly announced by Chase Manhattan Bank NA in New York, New York
as its prime rate in effect on the Closing Date. Interest shall be calculated
daily on the basis of a year of 365 days and the actual number of days for
which interest is due.
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3.8 ALLOCATION. Buyer and Sellers shall agree to a reasonable
allocation of the price at which each asset of AHFP is deemed to have been sold
within 30 days following the date of payment of the adjustment payment
specified in Section 3.7(b). The allocation shall be made as of the Closing
Date. A schedule (the "Allocation Schedule") shall be prepared by Sellers
conforming to the allocation as agreed to by Buyer and Sellers. Each of
Sellers and Buyer shall be bound by the Allocation Schedule for purposes of
determining any Taxes, shall prepare and file, and cause its Affiliates to
prepare and file, its Tax Returns on a basis consistent with the Allocation
Schedule, and shall take no position, and cause its Affiliates to take no
position, inconsistent with the Allocation Schedule on any applicable Tax
Return or in any proceeding before any Governmental Authority. In the event
that the Allocation Schedule is disputed by any Governmental Authority, the
party receiving notice of the dispute shall promptly notify the other party
hereto concerning resolution of the dispute. Sellers and Buyer acknowledge
that the Allocation Schedule will be set on an arm's length basis upon a good
faith determination of the fair market value of the Assets and the assets of
the Companies.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF SELLERS
Sellers hereby jointly and severally represent and warrant to
Buyer the following:
4.1 ORGANIZATION, GOOD STANDING, POWER, ETC. (a) Each Company is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Each Company has the requisite
corporate power and authority to own, operate or lease the properties that it
purports to own, operate or lease and to carry on its business as it is now
being conducted and is duly licensed or qualified as a foreign corporation in
each domestic or foreign jurisdiction in which the nature of the business
conducted by it or the character or location of the properties owned or leased
by it makes such licensing or qualification necessary, except where the failure
to be so licensed or qualified, individually or in the aggregate, would not be
reasonably expected to have a Material Adverse Effect. Copies of the
Certificate of Incorporation (or other similar charter document) and by-laws of
the Companies, including
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all amendments thereto, heretofore delivered to Buyer or its representatives by
Sellers, are true and complete as of the date hereof, and copies of the minute
books of the Companies, heretofore delivered to Buyer or its representatives by
Sellers, are true and complete as of the date hereof in all material respects.
On or prior to the Closing Date, Sellers shall deliver to Buyer a true and
complete copy of each Company's stock transfer books. Each of such Certificate
of Incorporation (or other similar charter document) and by-laws is in full
force and effect, and each Company is not in violation or breach of any of the
provisions of its Certificate of Incorporation (or other similar charter
document) or by-laws.
(b) Each of the Sellers is a corporation duly organized,
validly existing and in good standing under the laws of Delaware. Each of the
Sellers and AHFP has the requisite corporate power and authority to execute and
deliver this Agreement and the other agreements contemplated hereby, and the
Sellers, Whitehall and AHFP have all requisite corporate power to consummate
the transactions contemplated hereby and thereby. The execution and delivery
of this Agreement by Sellers and AHFP, the execution and delivery by Sellers,
Whitehall and AHFP of the other agreements contemplated hereby, and the
consummation by Sellers and AHFP of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Sellers
and AHFP and no other or further corporate proceedings will be necessary for
the execution and delivery of such agreements by Sellers and AHFP, the
performance by Sellers, Whitehall and AHFP of their respective obligations
hereunder and the consummation by Sellers, Whitehall and AHFP of the
transactions contemplated hereby. This Agreement and the other agreements
contemplated hereby have been duly executed and delivered by each of the
Sellers and AHFP that is a party hereto and thereto and constitutes a legal,
valid and binding obligation of each of the Sellers and AHFP enforceable
against Sellers and AHFP in accordance with their respective terms, except as
the same may be limited by bankruptcy, insolvency, moratorium, reorganization
or other laws of general applicability relating to or affecting the enforcement
of creditors' rights and general principles of equity.
4.2 CAPITALIZATION OF THE COMPANIES. (a) The authorized capital
stock of (i) CHP consists of an unlimited number of Common Shares, an unlimited
number of Class A Shares, and an unlimited number of Class B shares; (ii)
subject to any amendment
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contemplated by Section 2.1(a), AHFP consists of 1,000 shares of Common Stock,
no par value; (iii) Luck's consists of 500 shares of Common Stock, no par
value; (iv) AHF consists of 25,000 shares of Common Stock, $1.00 par value; and
(v) Polaner consists of 1,000 shares of Common Stock, no par value. 98,895 CHP
Common Shares and 12,261,650 CHP Class A Shares, 1,000 shares of AHFP Common
Stock, 100 shares of Luck's Common Stock, 25,000 shares of AHF Common Stock,
and 1,000 shares of Polaner Common Stock are issued and outstanding, all of
which are validly issued, fully paid and non-assessable. Except as may be
contemplated by this Agreement, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character obligating any of the
Companies to issue or sell any shares of capital stock of or other equity
interests in any of the Companies, or any securities or obligations convertible
into or exchangeable or exercisable for any shares of capital stock of any of
the Companies or other equity interests in any of the Companies obligating any
of the Companies to grant, extend or enter into any such right, agreement,
arrangement or commitment.
(b) Except as contemplated by this Agreement, there are no
outstanding agreements, arrangements or commitments of any character whatsoever
of any of the Companies to repurchase, redeem or otherwise acquire any
outstanding shares of capital stock of, or other ownership interests in, any of
the Companies, or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any other entity.
(c) The Shares constitute all of the issued and outstanding
shares of capital stock of CHP, AHFP, Luck's and AHF. AHP, either directly or
indirectly through Holding, has good, valid and marketable title to all of the
Shares, free and clear of any Encumbrances and any preemptive or subscription
rights of any Person. There are no restrictions on the transferability of the
Shares except as provided by Applicable Law, and there are no agreements,
arrangements or commitments of any character whatsoever relating to the voting
rights associated with any of the Shares.
(d) AHFP has good, valid and marketable title to all of the
issued and outstanding shares of common stock of Polaner, free and clear of any
Encumbrances and any preemptive or subscription rights of any Person. There
are no restrictions on the transferability of the shares of common stock of
Polaner except as provided by Applicable Law, and there are no
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agreements, arrangements or commitments of any character whatsoever relating to
the voting rights associated with the common stock of Polaner.
(e) The New AHFP Shares issued pursuant to the Merger will be
duly authorized, validly issued and nonassessable shares, free and clear of any
Encumbrances and any preemptive or subscription rights of a Person.
4.3 SUBSIDIARIES. Except as set forth in Section 4.3 of the
Disclosure Schedule, and except with respect to Polaner, which is a wholly-
owned subsidiary of AHFP, none of the Companies owns any equity interest in any
entity and none of the Companies is a partner, trustee or other participant in
any partnership, joint venture, trust or other entity with any third party,
including any Affiliate of Sellers.
4.4 EFFECT OF AGREEMENT. The execution, delivery and performance by
Sellers and AHFP of this Agreement and the other agreements contemplated hereby
and the consummation by Sellers, Whitehall and AHFP of the transactions
contemplated hereby and thereby will not require any notice to, filing with, or
the consent, approval or authorization of any Person or Governmental Authority,
except as contemplated in Section 7.5 hereof or as set forth in Section 4.4 of
the Disclosure Schedule, except for such consents, approvals or authorizations
the failure of which to obtain or make, individually or in the aggregate, would
not be reasonably expected to have a Material Adverse Effect. Except as
contemplated in Section 7.5 hereof or as set forth in Section 4.4 of the
Disclosure Schedule, neither the execution and delivery of this Agreement or of
the other agreements contemplated hereby nor the consummation of the
transactions contemplated hereby or thereby will (i) violate, conflict with or
result in a breach or result in the acceleration or termination of, or the
creation in any third party of the right to accelerate, terminate, modify or
cancel, any material indenture, contract, lease, sublease, loan agreement, note
or other material obligation or liability to which any of the Companies is a
party or is bound or to which any of the Companies' assets or the Assets are
subject, (ii) conflict with, violate or result in a breach of any provision of
the corporate charter documents or by-laws of the Sellers or any of the
Companies, or (iii) conflict with or violate any Applicable Laws or court
orders in any material respect.
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4.5 FINANCIAL DATA AND NET ASSET VALUE. (a) Sellers have delivered
to Buyer or its representatives (i) audited combined statements of adjusted
Operating Profit for the two years ended December 31, 1995 and the six months
ended June 30, 1996 (including notes thereto) and combined statements of
adjusted Net Assets as of December 31, 1994, December 31, 1995 and June 30,
1996, which combined adjusted financial statements contain a report from
Xxxxxxxx reporting thereon (collectively, the "Audited Financial Statements").
(b) Each of the audited combined statements of adjusted Net
Assets included in the Audited Financial Statements fairly presents, in all
material respects, the combined Net Assets of the Companies (and of the Sellers
and Whitehall to the extent related to the Assets) as of its date and each of
the audited combined statements of adjusted Operating Profit included in the
Audited Financial Statements fairly presents, in all material respects, the
combined Operating Profit of the Companies (and the Sellers and Whitehall to
the extent related to the Assets) for the periods set forth therein, in each
case in accordance with GAAP, except in each case as set forth in the Notes
therein.
(c) There exist no liabilities or obligations of the
Companies, and Sellers to the extent of the Assumed Liabilities, that are
material to the Business, whether accrued, absolute, contingent or threatened,
which are required to be reflected, reserved for or disclosed under GAAP in
financial statements of the Business as of and for the period ended on the date
of this representation and warranty, other than (i) liabilities or obligations
which are adequately reflected, reserved for or disclosed in the Audited
Financial Statements or (ii) liabilities or obligations incurred in the
ordinary course of business of the Business since June 30, 1996.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except (x) with respect to
the transactions provided for in this Agreement, (y) for the Contracts entered
into since June 30, 1996 that are required to be listed in Section 4.10 of the
Disclosure Schedule, or (z) for matters listed in Section 4.6 of the Disclosure
Schedule, since June 30, 1996, (i) the Companies have operated in the ordinary
course in a manner consistent with past practice and (ii) there has not been
(A) any Material Adverse Change or the occurrence of any event that would be
reasonably expected to cause a Material Adverse Change or (B) any damage,
destruction,
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loss or claim, whether or not covered by insurance, or condemnation or other
taking adversely affecting in any material respect the Companies' assets and
the Assets taken as a whole or the Business taken as a whole, and (iii) except
as set forth in Section 4.6 of the Disclosure Schedule, the Sellers, Whitehall
and the Companies have not (A) engaged in any conduct that is proscribed during
the period from the execution of this Agreement by the Sellers, the Companies
and Polaner to the Closing by Section 6.1 or (B) agreed in writing or otherwise
during such period prior to the execution of this Agreement by the Sellers to
engage in any such conduct.
4.7 TAXES. Except as disclosed in Section 4.7 of the Disclosure
Schedule (i) except where failure to file would not have a Material Adverse
Effect, the Companies have filed on or before the date hereof (or will timely
file) all Tax Returns due to be filed on or before the date hereof (or the
Closing Date); (ii) except where failure to pay would not have a Material
Adverse Effect, all such Tax Returns are (or will be) complete and accurate and
disclose all Taxes required to be paid by the Companies for the periods covered
thereby and all Taxes shown to be due on such Tax Returns have been or will be
timely paid; (iii) except for failures to pay as would not reasonably be
expected to have a Material Adverse Effect, all Taxes (whether or not shown on
any Tax Return) owed by the Companies and required to be paid on or before the
Closing Date have been (or will be) timely paid or are being contested in good
faith; (iv) the Tax Returns referred to in clause (i) have been examined by the
Internal Revenue Service or the appropriate state, local, territorial or
foreign taxing authority or the period for assessment of the Taxes in respect
of which such Tax Returns were required to be filed has expired; (v) there is
no action, suit, investigation, audit, claim or assessment or competent
authority proceeding pending or proposed or to the knowledge of Sellers
threatened with respect to Taxes of any of the Companies; (vi) all
deficiencies asserted or assessments made as a result of any examination of the
Tax Returns referred to in clause (i) have been paid in full or are being
contested in good faith; (vii) all Tax Sharing Arrangements and tax indemnity
arrangements will terminate prior to the Closing Date and the Companies will
have no liability thereunder on or after the Closing Date; (viii) there are no
liens for Taxes upon the assets of the Companies or the Assets except liens
relating to current Taxes not yet due or being contested in good faith through
appropriate proceedings; (ix) except where failure would not be reasonably
expected to
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have a Material Adverse Effect, all Taxes which the Companies or any of its Tax
Affiliates is required by law to withhold or to collect for payment have been
duly withheld and collected and have been paid or accrued, reserved against and
entered on the appropriate Books and Records; (x) all outstanding intercompany
obligations (as described in Treas. Reg. Section 1.1502-13(g)) of the
Companies and any other member of any Company Group will be settled prior to
Closing; and (xi) none of the Companies has made any payments or is obligated
to make any payments under any agreement that will not be deductible under
Section 280G of the Code.
4.8 REAL PROPERTY.
(a) Owned Real Property. Section 4.8(a) of the Disclosure
Schedule sets forth a list of all Owned Real Property. Except as set forth in
Section 4.8(a)(i) of the Disclosure Schedule and except for Permitted
Encumbrances, (i) one of the Companies (or Sellers or Whitehall to the extent
related to the Assets) has good, valid and marketable fee simple title to each
parcel of Owned Real Property, (ii) none of the Owned Real Property is subject
to any lease, and (iii) at the Closing the Surviving Corporation will receive
or will have good, valid and marketable fee simple title to each parcel of
Owned Real Property included in the Assets.
(b) Section 4.8(b) of the Disclosure Schedule lists all Leased
Real Property material to the Business. Sellers have made available to Buyer
or its representatives copies of all leases thereto. One of the Companies (or
Sellers to the extent related to the Assets) has a valid leasehold interest in
each parcel of Leased Real Property set forth in Section 4.8(b) of the
Disclosure Schedule and each of such leases is in full force and effect in
accordance with its terms in all material respects.
4.9 GOOD TITLE TO AND CONDITION OF ASSETS; CONDUCT OF BUSINESS. (a)
Except as set forth in Section 4.9(a) of the Disclosure Schedule, and except
for the services to be provided pursuant to the Transitional Services
Agreement, and the assets relating to the services provided by Sellers or their
Affiliates not primarily relating to the Business and not included in the
purchase and sale herein generally described in Section 4.9(a) of the
Disclosure Schedule, the assets of the Companies, together with the Assets,
constitute all the assets currently used (or held for use) to conduct the
Business in all material respects as
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currently conducted and all such Assets and assets, taken as a whole, are in
good operating condition and repair and are suitable for their current uses.
(b) The Companies have good title to, or a valid and binding
leasehold interest in, the assets of the Companies and the Sellers or Whitehall
have good title to the Assets, in each case, free and clear of all
Encumbrances, except (i) as set forth in Section 4.9(b) of the Disclosure
Schedule, (ii) any Encumbrances specifically disclosed in the Financial
Statements or Section 4.9(b) of the Disclosure Schedule, (iii) liens for Taxes,
assessments and other governmental charges not yet due and payable, (iv)
mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like
liens arising or incurred in the ordinary course of business, and equipment
leases with third parties entered into in the ordinary course of business, (v)
with respect to Real Property (A) easements, quasi-easements, licenses,
covenants, rights-of-way, and other similar restrictions, including without
limitation, any other agreements, conditions or restrictions, in each case
which are a matter of public record, (B) any conditions that are shown by any
survey which has been made available for Buyer's review prior to the date
hereof or physical inspection and (C) zoning, building or similar restrictions
pursuant to Applicable Laws, (vi) other Encumbrances arising from obligations
which, individually, or in the aggregate, are not material and would not be
required to be disclosed or reflected in a combined balance sheet of the
Companies or the notes thereto prepared in accordance with GAAP and the Assets,
and (vii) other Encumbrances which, individually and in the aggregate, are not
material in amount, do not interfere with, and are not violated by, the
consummation of the transactions contemplated by this Agreement and do not
materially impair the existing use of or the property affected by such
Encumbrances (all items included in (i) through (vii) are referred to
collectively herein as the "Permitted Encumbrances").
4.10 CONTRACTS. Section 4.10(i) of the Disclosure Schedule sets forth
a list, as of the date hereof, of each of the following Contracts relating to
the Business other than purchase orders entered into in the ordinary course of
business ("Material Contracts"): (i) each Contract for the purchase of
inventories or for the furnishing of services to the Business extending beyond
one year or requiring financial commitments in excess of $250,000; (ii) each
Contract for the sale of inventories or for the furnishing of services by the
Business with firm commitments
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involving revenues in excess of $250,000 other than the sale of inventories or
the furnishing of services in the ordinary course of business; (iii) each
exclusive distributor or agency Contract extending by its terms beyond one year
or requiring financial commitments in excess of $250,000; (iv) each Contract
relating to the acquisition or disposition of any assets having an aggregate
value in excess of $250,000 in each case other than the sale or purchase of
inventories in the ordinary course of business; (v) any agency, representation
or broker agreement with any Person which is not terminable without penalty
upon not more than ninety (90) days' notice; (vi) any agreement, contract or
commitment with any Person containing any covenant limiting the freedom of any
Company to engage in any line of business or to compete with any Person; (vii)
any partnership, joint venture or profit sharing agreement with any Person;
(viii) any agreement, contract, commitment, indenture or other instrument
relating to the borrowing of money in a principal amount of $250,000 or more or
any direct or indirect guarantee of any obligation of any other Person for, or
agreement to service the repayment of, borrowed money in a principal amount of
$250,000 or more; (ix) any lease (A) with annual rental payments aggregating
$250,000 or more that is not terminable without premium or penalty on ninety
(90) days or less notice or (B) of assets exceeding $250,000 fair market value;
or (x) any agreement, contract or commitment relating to the disposition or
acquisition of any investment in any Person if such investment has a book value
of, or the disposition or acquisition price of such investment or interest is,
$250,000 or more.
Except as set forth in Section 4.10(ii) of the Disclosure Schedule, each
Material Contract is a valid and binding agreement and is in full force and
effect. Except as otherwise provided in Section 4.10(iii) of the Disclosure
Schedule, (a) there has been no material default by Sellers or any Company, and
(b) Sellers have no knowledge of any material default by any other party, in
each case under any Material Contract which default has not been cured or
waived, except for such defaults as would not be reasonably expected to have a
Material Adverse Effect. To Sellers' knowledge, there is no assertion by any
third party of any claim of material default or breach under any Material
Contract except for such claim as would not be reasonably expected to have a
Material Adverse Effect.
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4.11 INTELLECTUAL PROPERTY RIGHTS. Except to the extent that the
failure of the following would not be reasonably expected to, individually or
in the aggregate, have a Material Adverse Effect:
(a) Section 4.11(a) of the Disclosure Schedule sets forth a listing of
(i) all Patents, registered Trademarks and applications therefor, registered
copyrights and applications for copyright registration, industrial and utility
model registrations and applications therefor, and design registrations and
applications therefor, included in the Intellectual Property that are owned by
the Companies or owned by Sellers or Whitehall and included in the Assets, (ii)
(x) all Contracts under which any of the Companies is licensed or otherwise
permitted to use Intellectual Property relating to the Business and (y) all
Contracts under which any of Sellers or Whitehall is licensed or otherwise
permitted to use Intellectual Property comprising a portion of the Assets, and
(iii) all Contracts under which a Company or a Seller licenses or otherwise
permits any party (other than a Company) to use Intellectual Property;
provided, however, that the right to use the name "American Home Food
Products", "Canadian Home Products" or any derivatives or anything imitative of
or which resembles or is confusingly similar thereof, or any rights to use
"American Home" or "Canadian Home" or any derivative or anything imitative of
or which resembles or is confusingly similar thereof, are prohibited and such
assets are expressly excluded from the purchase and sale hereunder;
(b) Each Company, Whitehall or a Seller has good title, free and
clear of all Encumbrances, to each item of Intellectual Property owned by one
of the Companies (or by Whitehall or a Seller to the extent included in the
Assets);
(c) As of the date hereof, for each issued Patent or application
for Patent owned by one of the Companies (or by a Seller or Whitehall to the
extent included in the Assets), all maintenance fees and renewal fees required
to be paid to avoid abandonment have been timely paid, and any applicable
working requirements have been timely met as to any Patent or application for
Patent, to the best of Sellers' knowledge, as of the Closing Date;
(d) For each registered Trademark owned by one of the Companies
as of the date hereof (or by a Seller or Whitehall to the extent included in
the Assets), all appropriate affidavits
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necessary to show continued use of a registered Trademark, and all renewals of
a registered Trademark, have been timely filed and appropriate fees paid with
the appropriate administrative or governmental office subject to the rules and
regulations governing filing of affidavits of continuous use and renewal of a
registered trademark;
(e) As of the date hereof, each pending application for Patent,
each pending application for registration of Trademark, and each application
for registration of copyright, owned by one of the Companies (or by a Seller or
Whitehall to the extent included in the Assets), remains pending and has not
been abandoned;
(f) Each Contract, under which any of the Companies is licensed
or otherwise permitted to use Intellectual Property relating to the Business,
to the best of Sellers' knowledge, remains in full force and effect, and for
each such Contract, the applicable Company has a paid-up, royalty-free,
perpetual license, except for any royalty obligations, other payment
obligations, or terminable license disclosed in Section 4.11(a) of the
Disclosure Schedule and for each such Contract, no restrictions exist that
would impair the ability of Sellers or Whitehall to transfer to Buyer any
Intellectual Property rights or other rights granted to a Company under a
Contract, except as set forth in Section 4.11(f) of the Disclosure Schedule;
(g) Each Contract, under which a Company, a Seller or Whitehall
licenses or otherwise currently permits any party (other than a Company) to use
Intellectual Property owned or used by the Company and used primarily in the
Business, to the best of Sellers' knowledge, is in full force and effect;
(h) Except as set forth in Section 4.11(h) of the Disclosure
Schedule, no current product used, sold or manufactured by any of the Companies
(or the Sellers or Whitehall to the extent related to the Assets), nor the
conduct of the Business as it is currently conducted is known by Sellers to
infringe on or otherwise known to violate the patent, design patent, trademark,
copyright, industrial model, utility model, trade secret, or other intellectual
property rights of any other Person;
(i) Except as set forth in Section 4.11(i) of the Disclosure
Schedule, no Person is challenging or, to the best of Sellers' knowledge,
infringing or otherwise violating the
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Intellectual Property owned by one of the Companies (or by a Seller or
Whitehall to the extent included in the Assets);
(j) Except as set forth in Section 4.11(j) of the Disclosure
Schedule, no Person, to the best of Sellers' knowledge, is challenging or
infringing or otherwise violating the Intellectual Property under which any of
the Companies (or Sellers or Whitehall) is licensed or otherwise permitted to
use; and
(k) Except as set forth in Schedule 4.11(k) of the Disclosure
Schedule, there are no restrictions that would materially impair the use of the
Trademarks by Buyer or the transfer of the Trademarks to Buyer.
4.12 LITIGATION AND CLAIMS. (a) Except as set forth in
Section 4.12(a) of the Disclosure Schedule, and except for matters under
Environmental Laws or relating to the environmental condition of the Real
Property (as to which no representation or warranty is being made except as set
forth in Section 4.14), there is no material civil, criminal, arbitral,
administrative or other action, suit, hearing, proceeding or investigation
(including product liability claims) pending or, to the knowledge of Sellers,
threatened (other than any such matters that are not material to the Business)
against the Companies (or the Sellers or Whitehall to the extent involving the
Assets).
(b) Except as set forth in Section 4.12 of the Disclosure
Schedule, and except for matters under Environmental Laws or relating to the
environmental conditions of the Real Property (as to which no representation or
warranty is being made except as set forth in Section 4.14), none of the
Companies (nor the Sellers or Whitehall to the extent related to the Assets) is
subject to any material order, writ, judgment, award, injunction, or decree of
any court or Governmental Authority or any arbitrator or arbitrators.
4.13 COMPLIANCE WITH LAW; APPLICABLE PERMITS. Except as set forth in
Sections 4.12 or 4.13 of the Disclosure Schedule, and except for matters
relating to Taxes which are addressed in Section 4.7, and except for matters
under Environmental Laws or relating to the environmental condition of the Real
Property (as to which no representation or warranty is being made except as set
forth in Section 4.14), the Business is being and since January 1, 1994 has
been conducted in compliance with all Applicable Laws, except for failures so
to comply that,
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individually or in the aggregate, would not be reasonably expected to have a
Material Adverse Effect. The Companies (and the Sellers and Whitehall to the
extent relating to the Assets) have all Applicable Permits necessary to conduct
the Business as currently conducted, other than those the absence of which,
individually or in the aggregate, would not be reasonably expected to have a
Material Adverse Effect. There are no proceedings pending or, to the knowledge
of Sellers, threatened which may result in the revocation, cancellation or
suspension of any such Applicable Permits, except those the absence of which,
individually or in the aggregate, would not be reasonably expected to have a
Material Adverse Effect. The Companies have duly and validly filed or caused
to be filed all reports, statements, documents, registrations, filings, or
submissions that were required by Applicable Law to be filed with any
Government Authority, other than those which, if not so filed, would not be
reasonably expected to have a Material Adverse Effect; all such filings
complied in all material respects with Applicable Laws when filed and, to
Sellers' knowledge, no material deficiencies have been asserted by any
Governmental Authority with respect to such filings.
4.14 ENVIRONMENTAL MATTERS. Except as disclosed in Section 4.14 of
the Disclosure Schedule:
(a) the Companies have obtained all environmental Applicable
Permits required under Environmental Laws for the operation of the Business,
other than those the absence of which would not reasonably be expected to have
a Material Adverse Effect, and are in compliance with such permits and other
requirements of applicable Environmental Laws, except where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect;
(b) the Companies have not received any written notice of any
claims by any Governmental Authority alleging a violation of any Environmental
Laws which would reasonably be expected to have a Material Adverse Effect and,
to Sellers' knowledge, no such claims are threatened;
(c) the Real Property does not contain any underground storage
tanks, surface impoundments containing any Hazardous Substance or PCB-
containing materials the presence of which would reasonably be expected to have
a Material Adverse Effect;
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(d) (i) to the knowledge of Sellers as to any Hazardous
Substances that have been delivered by a Company to a non affiliated Person
(who is regularly engaged and who is recognized as competent in the business of
transporting and disposing of Hazardous Substances), and (ii) as to any
Hazardous Substances transported, disposed of or released by a Company, there
is no liability to any third party under any Environmental Law with respect to
the disposal or treatment at any facility or real property of Hazardous
Substances from the Assets or the assets or operations of the Companies that
would be reasonably expected to have a Material Adverse Effect, and no Seller,
Whitehall or Company has received any notice, claim, or request for information
relating to any such alleged disposal or treatment; and
(e) there has been no Release of any Hazardous Substance at or
on Real Property that would reasonably be expected to have a Material Adverse
Effect.
4.15 AGREEMENTS REGARDING EMPLOYEES.
(a) Section 4.15(a) of the Disclosure Schedule contains a
complete list of each management, employment, consulting or other agreement,
contract or commitment between a Company or any of its subsidiaries and any
employee, officer or director thereof (A) providing for the employment or
retention of management, executive or consulting services, (B) providing for an
obligation to pay or accrue compensation of $75,000 or more per annum, or (C)
providing for the payment or accrual of any compensation or severance upon (i)
a change in control of that Company or (ii) any termination of such employment
or consulting relationship.
(b) Except as set forth in Section 4.15(b) of the Disclosure
Schedule, neither Sellers nor the Companies are a party to or bound by any
collective bargaining agreement or any material labor agreement with respect to
the Employees.
4.16 BENEFIT PLANS.
(a) Section 4.16(a) of the Disclosure Schedule lists all
pension plans, practices, policies or arrangements, profit sharing plans,
bonus, deferred compensation, supplemental executive retirement plans, excess
benefit plans, stock options, stock appreciation or other forms of incentive or
other
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compensation plans or arrangements (including, without limitation, all
"employee pension benefit plans" as defined in Section 3(2) of ERISA, and all
welfare, severance, vacation, and other employee fringe benefit plans,
including, without limitation, all "employee welfare benefit plans" as defined
in Section 3(1) of ERISA) maintained, or contributed to, by Sellers or the
Companies for the benefit of the Employees or former employees of any of the
Companies (all the foregoing being herein called "Benefit Plans").
(b) With respect to each Benefit Plan, Sellers have provided
or made available to Buyer a true and complete copy of the applicable plan
document and related trust, summary plan description and the most recent report
on Form 5500.
(c) Except as disclosed on Section 4.16(c) of the Disclosure
Schedule each Benefit Plan has been maintained in substantial compliance with
its terms and Applicable Laws and the Sellers and the Companies have
substantially performed all material obligations required to be performed by
them prior to the Closing Date in connection with the Benefit Plans.
(d) All contributions to the Benefit Plans that have been
required to be made in accordance with Section 302 of ERISA or Section 412 of
the Code or the terms of the Benefit Plans have been made. No Benefit Plan
subject to Section 412 of the Code has applied for or received a waiver of the
minimum funding standards imposed by such Section, and no such Benefit Plan has
an "accumulated funding deficiency" within the meaning of such Section, as of
the most recent plan year, no liability to the Pension Benefit Guaranty
Corporation ("PBGC") has been incurred (other than for routine premiums), and
the assets of the AHF, Inc. Pension Plan (Highspire, PA.) equal or exceed, or
will on the Closing Date, equal or exceed, the actuarial present value of the
benefit liabilities under such plan based upon reasonable actuarial assumptions
and the asset valuation principles established by the PBGC.
(e) No non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code or Section 406 of ERISA) has occurred which could
subject a Company to a material Tax or penalty on prohibited transactions
imposed by Section 4975 of the Code or Section 502(i) of ERISA. None of the
Benefit Plans that are employee pension benefit plans subject to ERISA has been
terminated and no notice to terminate any such Benefit Plan has been given, the
Pension Benefit Guaranty Corporation has not
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instituted proceedings to terminate any such plan, nor, except as disclosed on
Section 4.16(e) of the Disclosure Schedule, has there been any "reportable
event" (as defined in Section 4043 of ERISA and the regulations thereunder)
with respect thereto, other than reportable events for which the requirement to
give notice has been waived.
(f) Except as disclosed in Section 4.16(f) of the Disclosure
Schedule, at no time during the five year period preceding the Closing Date has
a Seller or a Company been required to contribute to any "multiemployer plan"
(as defined in Section 4001(a)(3) of ERISA) for the benefit of Employees or
former employees of any of the Companies. Except as set forth in Section
4.16(f) of the Disclosure Schedule, neither the Seller nor any Company is
subject to withdrawal liability under Title IV of ERISA.
(g) Each of the Benefit Plans which is intended to be
"qualified" within the meaning of Section 401(a) of the Code is the subject of
a favorable determination letter from the Internal Revenue Service stating that
it is so qualified and has not, since receipt of the most recent favorable
determination letter, been amended other than as required by the terms of any
such letter or to comply with Applicable Law. Sellers have furnished or caused
to be furnished to Buyer copies of the most recent Internal Revenue Service
determination letters with respect to each such plan.
(h) Except as disclosed in Section 4.16(h) of the Disclosure
Schedule, or as may be triggered by Buyer's failure to fulfill any of its
obligation to Employees under Article 9, the Companies do not have any
obligations to make payments to any of the Employees pursuant to the terms of
the Benefit Plans by reason of the transactions contemplated hereby, or to make
a larger contribution to, or pay greater benefits under, any Benefit Plan by
reason of the transactions contemplated hereby.
(i) Except as disclosed in Section 4.16(i) of the Disclosure
Schedule, no Benefit Plan provides post-retirement medical or health benefits
to Employees of the Companies other than (i) coverage mandated by Applicable
Laws, (ii) death benefits or retirement benefits under any Benefit Plan
intended to meet the requirements of Section 401(a) of the Code, or (iii)
benefits the full cost of which is borne by the participants.
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(j) Except as disclosed in Section 4.16(j) to the Disclosure
Schedule, there are no actions, suits or claims pending (other than routine
claims for benefits) or, to the knowledge of Sellers, threatened against, or
with respect to, any Benefit Plan or its assets, and there is no matter pending
(other than routine qualification filings) with respect to any Benefit Plan
before the Internal Revenue Service, Department of Labor, or the PBGC.
(k) With respect to any employee benefit plan, within the
meaning of Section 3(3) of ERISA, which is not listed in Section 4.16(a) of the
Disclosure Schedule but which is sponsored, maintained or contributed to, or
has been sponsored, maintained or contributed to within six years prior to the
Closing Date, by any corporation, trade, business or entity under common
control with the Sellers or any Company, within the meaning of Section 414(b),
(c) or (m) of the Code or Section 4001 of ERISA ("Commonly Controlled Entity"),
(A) no withdrawal liability, within the meaning of Section 4201 of ERISA, has
been incurred by a Commonly Controlled Entity, which liability has not been
satisfied, (B) no accumulated funding deficiency, whether or not waived, within
the meaning of Section 302 of ERISA or Section 412 of the Code has been
incurred, and (C) all contributions (including installments) to such plan
required by Section 302 of ERISA and Section 412 of the Code have been timely
made.
4.17 INSURANCE. All of the policies of insurance and bonds presently
in force with respect to the Companies including, without limitation, fire,
liability and other insurance, are listed in Section 4.17 of the Disclosure
Schedule. All such insurance is in full force and effect and is with
financially sound insurers and, in light of the Business, is in amounts and
provides coverage that is reasonable and customary for Persons in similar
businesses.
4.18 INTERCOMPANY TRANSACTIONS. Except as reflected in the Audited
Financial Statements or Section 4.18 of the Disclosure Schedule, no agreement
or arrangements exist between the Companies on the one hand, and Sellers and
their Affiliates (other than the Companies) on the other hand that are related
to the Assets or the assets of the Companies.
4.19 LABOR MATTERS.
(a) Except as set forth in Section 4.19 (a) of the Disclosure
Schedule, no present or former employee of a Company
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or party representing said employees or former employees has claims, charges,
investigations, complaints, proceedings, suits, demands or actions which are
pending or have been asserted or threatened in writing against such Company
for, including without limitation: (i) overtime pay; (ii) wages, salaries or
profit-sharing; (iii) vacations, time off or pay in lieu of vacation or time
off; (iv) any violation of any statute, ordinance, contract regulations
relating to minimum wages or maximum hours of work; (v) discrimination against
employees; (vi) unlawful or wrongful employment or termination practices; (vii)
breach of contract or other claim arising under a collective bargaining or
individual employment agreement or any other employment covenant whether
express or implied; (viii) any violation of occupation safety and health
standards; or (ix) any violation of immigration, workers' compensation,
disability, unemployment compensation, whistle blower laws or other employment
or labor relations law, in each case except for those claims, charges,
investigations, complaints, proceedings, suits, demands or actions which would
not be reasonably expected to have a Material Adverse Effect.
(b) Except as set forth in Section 4.19 (b) of the Disclosure
Schedule, there is no labor strike or labor dispute, slow down or stoppage
actually pending or threatened against or affecting a Company, and each Company
has not experienced any labor strikes or material labor disputes, slowdowns or
stoppages since 1994.
(c) Except as set forth in Section 4.19(c) of the Disclosure
Schedule, no grievance, arbitration or other proceeding material to the
Business arising, or asserted to arise, out of or under a collective bargaining
agreement, relating to employees or former employees of a Company is pending
and to the knowledge of the Seller no basis therefor exists.
(d) Except as set forth in Section 4.19(d) of the Disclosure
Schedule, no collective bargaining agreement or individual agreements relating
to employees of a Company are being negotiated and all collective bargaining
agreements have been duly ratified.
(e) Except as set forth in Section 4.19(e) of the Disclosure
Schedule, no Company is party to any agreements or arrangements or subject to
any requirement that in any manner requires or may restrict a Company from
relocating, consolidating, merging or closing, in whole or in part, any portion
of the Business subject to applicable law.
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(f) Except as set forth in Section 4.19(f) of the Disclosure
Schedule, no Company is subject to any settlement or consent decree with any
present or former employee, employee representative or any governmental body
relating to claims or unfair labor practices, employment discrimination, or
other claims in respect to employment practices and policies and no government
body has issued a judgment, order, decree or finding with respect to the labor
and employment practices of a Company which has had a Material Adverse Effect
(or would be reasonably expected to have a Material Adverse Effect).
(g) Except as set forth in Section 4.19(g) of the Disclosure
Schedule, no Company has been issued any deficiency letters by any Governmental
Authority or entered into any settlement agreements, conciliation agreements or
letters of commitment with any governmental body which have had or would
reasonably be expected to have a Material Adverse Effect.
4.20 BROKER'S FEES. Except for the retention of X.X. Xxxxxx
Securities Inc., the fees and expenses with respect to which will be paid by
Sellers pursuant to Section 7.2, neither the Companies nor Sellers have
employed any broker, finder or investment banker or incurred any liability for
any brokerage, finder's or other similar fee or commission in connection with
the transactions contemplated by this Agreement.
4.21 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties of Sellers expressly set forth in this
Agreement, neither Sellers nor any other Person makes any other express or
implied representation or warranty on behalf of Sellers, or otherwise in
respect of the Business.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB
Buyer and Merger Sub jointly and severally represent and warrant
to Sellers the following:
5.1 CORPORATE ORGANIZATION. Buyer and Merger Sub each is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware. Each of Buyer and Merger Sub has the requisite corporate
power and authority to own, operate
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or lease the properties that it purports to own, operate or lease and to carry
on its business as it is now being conducted and is duly licensed or qualified
as a foreign corporation in each domestic or foreign jurisdiction in which the
nature of the business conducted by it or the character or location of the
properties owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would not be
reasonably expected to have a material adverse effect on the business,
operations or financial condition of Buyer and its subsidiaries, taken as a
whole.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer and Merger Sub each
has the requisite corporate power and authority to execute and deliver this
Agreement and the other agreements contemplated hereby and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Buyer and Merger Sub of this Agreement and the other agreements contemplated
hereby and the consummation by Buyer and Merger Sub of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Buyer and Merger Sub and no other corporate
proceeding is necessary for the execution and delivery of this Agreement or
such other agreements by Buyer and Merger Sub, the performance by Buyer and
Merger Sub of their respective obligations hereunder or thereunder and the
consummation by Buyer and Merger Sub of the transactions contemplated hereby
and thereby. This Agreement has been duly executed and delivered by Buyer and
Merger Sub and constitutes a legal, valid and binding obligation of each of
them, enforceable against each of them in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, moratorium, reorganization
or other laws of general applicability relating to or affecting the enforcement
of creditor's rights and general principles of equity.
5.3 BROKER'S FEES. Except for the fees payable under the
Committment Letters or in connection with alternative financing obtained to
finance the transactions contemplated herein and the retention of Hicks, Muse,
Xxxx & Xxxxx Incorporated and Affiliates thereof, the fees and expenses of
which will be paid by the Surviving Corporation, none of Buyer and Merger Sub
has employed any broker, finder or investment banker or incurred any liability
for any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement.
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5.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as contemplated by
Section 7.5 hereof, no filing with, and no permit, authorization, consent or
approval of, any Governmental Authority is necessary for the consummation by
Buyer and Merger Sub of the transactions contemplated by this Agreement or the
other agreements which Buyer and Merger Sub will execute pursuant to the terms
of this Agreement. The execution and delivery of this Agreement and such other
agreements and the consummation of the transactions contemplated hereby and
thereby will not (x) conflict with or result in a breach of any of the
provisions of the respective Certificate of Incorporation or by-laws of Buyer
or Merger Sub, or (y) be subject to the making of the filings and the obtaining
of the governmental and other consents referred to herein, contravene any law,
rule or regulation of any state, the United States or any foreign country or
any order, writ, judgment, injunction, decree, determination or award currently
in effect that is binding upon Buyer, Merger Sub or any of their respective
Affiliates or any of their respective properties.
5.5 FINANCIAL CAPABILITY. Buyer has received the commitment letters,
copies of which have been provided to Sellers, (the "Commitment Letters") to
provide financing of sufficient funds (when added to the funds to be provided
by the Buyer) to fund the Purchase Price on the terms and subject to the
conditions contemplated by this Agreement.
5.6 SECURITIES ACT. Buyer is acquiring the New AHFP Shares solely
for the purpose of investment and not with a view to, or for sale in connection
with, any distribution thereof in violation of the Securities Act, any
applicable state securities laws or applicable foreign securities laws. Buyer
acknowledges that the New AHFP Shares are not registered under the Securities
Act or any applicable state or foreign securities law, and that such New AHFP
Shares may not be transferred or sold except pursuant to the registration
provisions of the Securities Act or applicable foreign securities laws or
pursuant to an applicable exemption therefrom and pursuant to state securities
laws and regulations as applicable.
5.7 CAPITALIZATION AND ORGANIZATION OF MERGER SUB.
(a) The authorized capital stock of Merger Sub consists of 1,000 shares
of Merger Sub Common Stock all of which are issued and outstanding, and all of
such shares are validly issued, fully paid and non-assessable. Except as may
be contemplated by this Agreement or the Commitment Letters, there are no
options,
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warrants or other rights, agreements, arrangements or commitments of any
character obligating Merger Sub to issue or sell any shares of capital stock or
other equity interests or any securities or obligations convertible into or
exchangeable or exercisable for any shares of capital stock of Merger Sub or
other equity interests obligating Merger Sub to grant, extend or enter into any
such right, agreement, arrangement or commitment.
(b) Merger Sub was formed on September 3, 1996 solely for the purpose
of engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
5.8 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties of Buyer and Merger Sub expressly set forth in
this Agreement, neither Buyer, Merger Sub nor any other Person makes any other
express or implied representation or warranty on behalf of either Buyer or
Merger Sub.
ARTICLE 6
CONDUCT OF BUSINESS PENDING THE CLOSING
6.1 CONDUCT OF BUSINESS PENDING THE CLOSING. Except as disclosed in
Section 6.1 of the Disclosure Schedule and subject to Section 6.2, Sellers and
Buyer agree that, prior to the Closing, unless Buyer shall otherwise consent in
writing (which consent Buyer shall not unreasonably withhold) or as otherwise
expressly contemplated by this Agreement:
(a) The Business shall be conducted in the ordinary course of
business and consistent with past practices;
(b) The Sellers will use, and will cause the Companies and their
subsidiaries to use, all commercially reasonable efforts to preserve intact the
Business, including (i) preserving the organization and reputation of the
Business, (ii) keeping available the services of the present officers and key
employees of the Companies, (iii) maintaining all material licenses,
qualifications, and authorizations to do business in each jurisdiction where
the character of the Business requires such licenses, qualifications and
authorizations, (iv) maintaining in full force and effect all Material
Contracts in accordance with their respective terms, (v) maintaining all assets
of the Business in good working order and condition, ordinary wear and
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tear excepted, and (vi) conducting the Business' marketing programs relating to
the products in the ordinary course.
(c) Sellers shall cause each of the Companies not to: (i)
authorize for issuance, issue, sell, pledge, deliver, or agree or commit to
issue, sell, pledge or deliver (whether through the issuance or grant of
options, warrants, commitments, subscriptions, rights to purchase or otherwise)
any capital stock of the Companies or securities or rights convertible into or
exchangeable or exercisable for, shares of capital stock or securities
convertible into or exchangeable or exercisable for such shares; (ii) pledge or
encumber any of its assets; (iii) except pursuant to Section 2.1(a), amend or
propose to amend its Certification of Incorporation or by-laws; (iv) except
pursuant to Section 2.1(a), split, combine or reclassify any shares of its
capital stock; or (v) except pursuant to Section 2.8, redeem, purchase or
otherwise acquire or offer to redeem, purchase or otherwise acquire any capital
stock; provided, however, that Sellers shall continue to have the right to
withdraw cash and cash equivalents from the Companies as contemplated by
Section 7.7 or otherwise;
(d) Except for the Merger, Sellers shall cause each of the
Companies not to (i) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof or make any investment either by purchase of stock or
securities, contributions to capital, property transfer or purchase of any
amount of property or assets of any other Person; (ii) acquire any assets for a
value in excess of $500,000 other than inventory in the ordinary course of
business; (iii) dispose of any assets with a value in excess of $500,000 other
than inventory in the ordinary course of business; (iv) incur any indebtedness
for borrowed money or issue any debt securities or assume, guarantee, endorse
or otherwise as an accommodation become responsible for, the obligations of any
other Person other than the Companies, make any loans or advances or enter into
any other transaction, except in the ordinary course of business; or (v)
authorize, recommend or propose any change in its capitalization;
(e) Except as otherwise contemplated by this Agreement,
Sellers shall not adopt or amend any Benefit Plan in a manner which affects
Employees, or increase, or pay any benefit to Employees not required by any
existing Benefit Plan or increase any salaries or wages payable to Employees,
other than increases to non-management personnel made in the ordinary course
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of business and consistent with past practices or as may be required by a
Governmental Authority;
(f) The Companies shall not fail to take all action as may be
necessary to be taken pursuant to the terms of Section 6 of that certain
Amended and Restated Jams Manufacturing agreement, dated as of January 21, 1994
by and between AHFP and Roseland Manufacturing, Inc. as may be necessary to
extend the term of such agreement for an additional period of two years;
(g) The Companies (and the Sellers with respect to the Assets)
shall not waive, release, grant or transfer any Intellectual Property or modify
or change in any material respect any existing material license, distribution
agreement, lease, or other document other than in the ordinary course of
business;
(h) The Sellers will cause the books and records of each of the
Companies to be maintained in the usual and customary manner consistent with
past practice and will not permit a material change in any underwriting,
investment, actuarial, financial reporting, or accounting practice or policy or
in any assumption underlying such practice or policy (including any method of
calculating reserves for inventory and accounts receivable);
(i) The Sellers will cause insurance coverage to be maintained in
full force and effect in substantially the same levels set forth in Section
4.17 to the Disclosure Schedule;
(j) The Sellers will cause the Companies to comply, in all
material respects, with all Applicable Laws;
(k) The Sellers will cause the Companies to not amend or enter
into (i) any employment, consulting or other agreement, contract or commitment
with any employee, officer or director thereof or (ii) any agreement, contract
or commitment providing for the payment or accrual of any additional
compensation upon a change in control of that Company or upon any termination
of such employment or consulting relationship; and
(l) The Sellers will not, and will cause the Companies to not,
authorize or propose any of the foregoing or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
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6.2 PERMITTED ACTIONS. Notwithstanding any other provisions herein
to the contrary, as contemplated by Section 7.7(c), prior to the Closing,
Sellers shall (i) cause each of the Companies to transfer by way of dividend or
otherwise to Holding or AHP, as the case may be, any cash or cash equivalents
held by such Company from time to time up to and including the Closing Date
except to the extent of the amount of all checks of the Companies outstanding
as of the close of business on the Closing Date (and in connection therewith
Sellers shall cause the Companies to have at the close of business on the
Closing Date sufficient cash to cover all outstanding checks), (ii) except to
the extent otherwise agreed between Sellers and Buyer, extinguish all
intercompany receivables and other intercompany assets, and intercompany
payables and other intercompany liabilities (including without limitation all
intercompany Tax and equity accounts), and (iii) repay obligations for borrowed
money, whether pursuant to the issuance of commercial paper or otherwise. For
purposes of this Section 6.2, intercompany receivables, intercompany assets,
intercompany payables and intercompany liabilities shall mean receivables,
assets, payables and liabilities between any of the Companies and any of their
Affiliates.
6.3 CHANGE OF CORPORATE NAMES. Prior to the Closing, Sellers shall be
permitted to change the corporate name of AHFP and AHF to delete any reference
to "American Home Food(s)" or "American Home" and shall further be permitted to
change the corporate name of CHP to delete any reference to "Canadian Home".
Notwithstanding the foregoing or any other provision contained herein to the
contrary, after the Closing, Surviving Corporation and its Affiliates shall be
entitled to use the name "American International Foods, Inc."
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1 NO TRANSFER OF SHARES. Sellers agree that from the date of this
Agreement through the earlier of the Closing Date or the termination of this
Agreement, they shall not transfer, sell, hypothecate, or otherwise assign any
interest in the Shares except as otherwise contemplated by this Agreement.
7.2 EXPENSES. Except as provided in Section 5.3, all expenses,
including the fees of any attorneys, accountants,
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investment bankers or others engaged by a party, incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses whether or not the transactions contemplated by
this Agreement are consummated; provided that any such expenses incurred by a
Company shall be paid by the Sellers and shall not be borne by a Company. All
such expenses incurred by Merger Sub shall be paid by Buyer and shall not be
borne by Merger Sub.
7.3 ADDITIONAL AGREEMENTS. (a) Subject to the terms and conditions
herein provided, each of the parties hereto agrees (i) to use all reasonable
efforts to do, or cause to be done, all things necessary, proper or advisable
to consummate the transactions contemplated by this Agreement and to cooperate
with each other in connection with the foregoing, (ii) to defend all lawsuits
or other legal proceedings challenging this Agreement or the consummation of
the transactions contemplated hereby, (iii) to use all reasonable efforts to
lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions
contemplated hereby, and (iv) to use all reasonable efforts to effect all
necessary registrations and filings and submissions of information required or
requested by Governmental Authorities.
(b) Neither Buyer nor Merger Sub shall take any actions or permit any
actions to be taken that would cause the representations and warranties set
forth in Section 5.7(a) to be breached in any respect as of the Closing Date.
(c) Buyer shall use all reasonable efforts to promptly arrange and
complete the financing contemplated by the Commitment Letters or other suitable
financing to be provided at Closing and shall keep Sellers informed of the
status of its efforts to arrange and complete such financing, including making
reports with respect to significant developments. Buyer will notify Sellers as
soon as practicable of any determination made by Buyer that it is unable to
arrange any of such financing.
7.4 ACCESS TO INFORMATION.
(a) Prior to the Closing, Sellers shall, and shall cause the
Companies to, afford the officers, employees and agents of Buyer reasonable
access to the facilities, properties, records (including any environmental
studies or reports covering all or any part of the Assets or assets of a
Company that have been prepared subsequent to December 31, 1991) and employees
of the
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Companies during normal business hours and in a manner that will not
unreasonably disrupt the operation of the Business. In connection therewith,
the parties will comply with the terms of the Confidentiality Agreement dated
June 17, 1996 between an Affiliate of Buyer and X.X. Xxxxxx Securities Inc., as
agent to AHP (the "Confidentiality Agreement"), which agreement shall survive
the termination of this Agreement.
(b) All information provided to Buyer by or on behalf of Sellers
or their Affiliates in connection with this Agreement or the transactions
contemplated hereby will be held by Buyer and its Affiliates, agents and
representatives as "Information" as defined in and pursuant to the terms of the
Confidentiality Agreement; provided that effective as of the Closing the
Confidentiality Agreement shall be terminated and be of no force and effect.
(c) Notwithstanding the foregoing or any other provision of
this Agreement, before Closing Buyer shall not have access to (x) personnel
records of Employees relating to individual performance or evaluation records,
medical histories or other information which in Sellers' good faith opinion is
sensitive or the disclosure of which could subject Sellers to risk of
liability, or (y) such price and other competitive information as may involve
antitrust or other similar restrictions.
7.5 FILINGS AND AUTHORIZATIONS. The ultimate parent entities of the
Companies and Buyer have filed or supplied or will, as promptly as practicable,
file or supply, or cause to be filed or supplied, all notifications and
information required to be filed or supplied pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the
regulations promulgated thereunder and, if necessary, any other Competition
Laws, in connection with the transactions contemplated by this Agreement.
Sellers and Buyer, as promptly as practicable, (a) will make, or cause to be
made, all such other filings and submissions under laws, rules and regulations
applicable to them, or to their Affiliates, as may be required for them to
consummate the transactions contemplated hereby in accordance with the terms of
this Agreement, and (b) will use reasonable efforts to obtain, or cause to be
obtained, all authorizations, approvals, consents and waivers from all
Governmental Authorities necessary to be obtained by them, or their Affiliates,
in order for them so to consummate such transactions.
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7.6 TAX MATTERS. (a) Liability for Taxes. (i) Sellers shall be
jointly and severally liable for, and shall indemnify and hold harmless each
member of Buyer's Company Group (including the Surviving Corporation and the
other Companies) against, all (A) Taxes imposed on a Company or for which a
Company may otherwise be liable for any taxable year or period that ends on or
before the Closing Date and, with respect to any Straddle Period, the portion
of such Straddle Period ending on and including the Closing Date (including,
without limitation, any liability from any deferred intercompany taxes or gain
described in Treas. Reg. Section 1.502-13 and any obligation to contribute to
the payment of a Tax determined on a consolidated, combined or unitary basis
with respect to the Companies, (B)Section 338(h)(10) Taxes and (C) all Costs
resulting from a breach of Section 4.7.
(ii) The Surviving Corporation or a Company shall be liable
for, and shall indemnify Sellers against, Taxes imposed on a Company or
Buyer for any taxable year or period that begins after the Closing Date
and with respect to any Straddle Period, the portion of such Straddle
Period beginning after the Closing Date (including, without limitation,
any obligation to contribute to the payment of a Tax determined on a
consolidated, combined or unitary basis with respect to Buyer's Company
Group and any Taxes resulting from a Company ceasing to be a member of
Buyer's Company Group).
(iii) For purposes of paragraphs (a)(i) and (a)(ii) above,
whenever it is necessary to determine the liability for Taxes of a
Company based on income or gross receipts for a Straddle Period, the
determination of the Taxes of a Company for the portion of the Straddle
Period ending on, and the portion of the Straddle Period beginning
after, the Closing Date shall be determined by assuming that the
Straddle Period consisted of two taxable years or periods, one which
ended at the close of business on the Closing Date and the other which
began at the beginning of the day following the Closing Date, and items
of a Company for the Straddle Period shall be allocated between such two
taxable years or periods on a "closing of the books basis" by assuming
that the books of the Company were closed at the close of business on
the Closing Date and in the case of Taxes not based on income or gross
receipts, the liability for Taxes shall be allocated between the two
taxable years
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based on the ratio of the number of days in each taxable year to the
total number of days in the Straddle Period.
(iv) For purposes of paragraphs (a)(i) and (a)(ii), where,
under Applicable Law, a taxable year or period ends as a result of the
purchase of the Shares pursuant to this Agreement, items of income,
gain, deduction, loss or credit shall be allocated between such taxable
year or period and the following taxable year or period in a manner
consistent with the rules in Treas. Reg. Section 1.1502-76(b);
provided, however, that Sellers shall in all events be liable for any
Section 338(h)(10) Taxes.
(v) Sellers shall be liable for any real property transfer or
gains tax, sales tax, use tax, stamp tax, stock transfer tax, or other
similar tax imposed on the transactions contemplated by this Agreement,
provided that any value added tax or goods and services tax shall be the
obligation of the Surviving Corporation to the extent the Surviving
Corporation is entitled to credit for such value added tax or goods and
services tax.
(vi) If Sellers become entitled to a refund or credit of Taxes
for which they are liable under paragraph (a)(i) above to indemnify
Buyer's Company Group (including the Surviving Corporation or a Company
and the other Companies), and such Taxes are attributable solely to the
carryback of losses, credit or similar items from a taxable year or
period that begins after the Closing Date, or for that portion of any
Straddle Period which relates to a period after the Closing Date, and
are attributable to a Company, Sellers shall promptly pay to the
Surviving Corporation or a Company, at Buyer's option, the amount of
such refund or credit together with any interest thereon received by
Sellers. In the event that any refund or credit of Taxes for which a
payment has been made to the Surviving Corporation or a Company is
subsequently reduced or disallowed, the Surviving Corporation or a
Company shall indemnify and hold harmless Sellers for any Tax assessed
against Sellers and interest thereon by reason of the reduction or
disallowance. If the Surviving Corporation or a Company receives or
becomes entitled to a refund or credit of Taxes relating to the
Companies for any periods ending on or before the Closing Date, or for
that portion of any Straddle Period which relates to a period through
Closing Date, the Surviving Corporation or a Company shall promptly
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pay to Sellers the amount of such refund or credit together with any
interest thereon received by the Surviving Corporation or a Company, or
any Affiliate of the Surviving Corporation (other than Sellers). In the
event that any refund or credit of Taxes for which a payment has been
made to Sellers is subsequently reduced or disallowed, Sellers shall
indemnify and hold harmless Buyer, the Surviving Corporation and the
other Companies for any Tax assessed against Buyer, the Surviving
Corporation and the other Companies, including interest thereon by
reason of the reduction or disallowance.
(vii) Sellers have made available to Buyer, true and complete
copies, to the extent available, of: (A) all income tax Returns of the
Companies (or, with respect to consolidated, combined or unitary
returns, the portion thereof relating to the Companies); and (B) any
other Tax Returns as may be relevant to the Companies' assets or
operations thereof. In addition, Sellers will make available any
workpapers or other supporting data reasonably requested by Buyer, the
Surviving Corporation and the other Companies relating to "income taxes
payable" reflected in the books and records of a Company as of December
31, 1995, relating to Tax Returns made available pursuant to (A) or (B)
or relating to Tax Returns referred to in (A) or (B) not yet filed.
(b) Tax Returns. Sellers shall file or cause to be filed when
due all Tax Returns that are required to be filed by or with respect to the
Companies for taxable years or periods ending on or before the Closing Date and
Sellers shall remit (or cause to be remitted) to the appropriate Governmental
Authority any Taxes due in respect of such Tax Returns, and Buyer shall file or
cause to be filed when due all Tax Returns that are required to be filed by or
with respect to the Companies for taxable years or periods ending after the
Closing Date and Buyer shall remit (or cause to be remitted by the Surviving
Corporation) to the appropriate Governmental Authority any Taxes due in respect
of such Tax Returns. Buyer shall allow Sellers (or cause the Surviving
Corporation to allow Sellers) to review, comment upon and reasonably approve
without undue delay any Tax Return relating to a Straddle Period at any time
during the 45 day period immediately preceding the filing of such Tax Return.
Sellers or the Surviving Corporation (or a Company) shall reimburse the other
party the Taxes for which Sellers or the Surviving Corporation (or a Company)
is liable pursuant to
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paragraph (a) of this Section 7.6 but which are payable with any Tax Return to
be filed by the other party pursuant to the previous sentence upon written
request of the party entitled to reimbursement setting forth in detail the
computation of the amount owed by Sellers or the Surviving Corporation (or a
Company), as the case may be, but in no event less than 10 days prior to the
due date for the filing of such Tax Return. All Tax Returns which either
Sellers or the Surviving Corporation or the Companies are required to file or
cause to be filed shall be prepared and filed in a manner consistent with past
practice in preparing and filing similar tax returns and they shall not amend
any Tax Return to take positions inconsistent with past practice.
(c) Contest Provisions. Buyer shall notify Sellers in writing
within a reasonable period following receipt by Buyer, any of its Affiliates,
or the Companies of a written notice of any pending federal, state, local or
foreign Tax audits or assessments which Buyer reasonably believes will
materially affect the Tax liabilities of the Companies for which Sellers would
be required to indemnify Buyer or Buyer's Company Group (including the
Surviving Corporation and the other Companies or their Affiliates) pursuant to
paragraph (a) of this Section 7.6. Sellers shall not take any position in any
settlement context that is inconsistent with Sellers' past practice and Buyer's
representatives shall be permitted to be present at any such audit or
proceeding. Prior to settlement of any claim for Taxes which would adversely
affect the liability for Taxes of Buyer, the Surviving Corporation or the other
Companies, Sellers shall consult in good faith with Buyer concerning such
settlement.
Sellers shall have the sole right to represent the Companies'
interests in any Tax audit or administrative or court proceeding relating to
taxable periods ending on or before the Closing Date, and to employ counsel of
its choice at its expense, provided, however, that Buyer's representatives
shall be permitted, at Buyer's expense, to be present at any such audit or
proceeding.
(d) Cooperation. To the extent not inconsistent with Section
7.6(c) above and subject to the provisions of Section 12.8, Buyer and Sellers
agree to, and Buyer shall cause the Surviving Corporation and the other
Companies to, cooperate and share all required information on a timely basis in
order to timely file all Tax Returns and for the preparation of any audit, and
for the prosecution or defense of any claim, suit or proceeding relating to any
proposed adjustment. Buyer and
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Sellers agree and Buyer shall cause the Surviving Corporation and the other
Companies to retain or cause to be retained all books and records pertinent to
the Companies until the applicable period for assessment under Applicable Law
(giving effect to any and all extensions or waivers) has expired, and to abide
by or cause the abidance with all record retention agreements entered into with
any Governmental Authority. After the Closing, Buyer will give or will cause
the Surviving Corporation or a Company to give Sellers reasonable notice prior
to transferring, discarding or destroying any such books and records relating
to Tax matters and, if Sellers so request, Buyer will allow or will cause the
Surviving Corporation and the other Companies to allow Sellers to take
possession of such books and records. Buyer shall (or shall cause Surviving
Corporation to) and Sellers shall cooperate or cause cooperation with each
other in the conduct of any audit or other proceedings involving the Companies
for any Tax purposes and each shall execute and deliver such powers of attorney
and other documents as are necessary and appropriate to carry out the intent of
this subsection.
(e) Election Under Section 338(h)(10). Sellers and Buyer
shall make or cause to be made a joint election for the Companies under Section
338(h)(10) of the Code and under any applicable similar provisions of state law
with respect to the purchase of the Shares (collectively, the "Section
338(h)(10) Elections"). Buyer shall be responsible for, and control the
preparation and filing of, all federal, state and local forms needed to make
the Section 338(h)(10) Elections requested by Buyer and shall be responsible
for any defects in such election. Sellers represent that an election under
Section 338(h)(10) of the Code is available for the Companies. If the Section
338(h)(10) Elections are made, Sellers and Buyer shall, within 10 days after
receipt of the Allocation Schedule, exchange completed and executed copies of
Internal Revenue Service Form 8023-A, required schedules thereto, and any
similar state forms. If any changes are required in these forms as a result of
information which is first available after these forms are prepared or
otherwise, the parties will promptly agree on such changes, and Sellers shall
take such steps as are reasonably requested by Buyer to effectuate or cure any
defect in the Section 338(h)(10) Elections. Notwithstanding the provision of
this Section 7.6(e) no election pursuant to Section 338 of the Code shall be
made with respect to CHP.
(f) Adjustment to Purchase Price. Any payment by Buyer (or
the Surviving Corporation or a Company) or Sellers to
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each other under this Section 7.6 will be an adjustment to the Purchase Price.
(g) Survival of Obligations. Notwithstanding anything to the
contrary in this Agreement, and notwithstanding Section 11.3 of this Agreement,
the obligations of the parties set forth in this Section 7.6 shall be
unconditional and absolute and shall remain in effect until the expiration of
the applicable statute of limitations.
(h) Procedures. With respect to claims relating to Taxes
addressed in this Section 7.6, the party seeking indemnification shall submit
to the other party a notice of the fact and amounts along with adequate and
sufficient supporting details and the other party shall remit payment within 30
days of receipt of such notice.
7.7 INTERCOMPANY AND OTHER ARRANGEMENTS. Notwithstanding any provision
herein to the contrary, on or prior to the Closing (a) Sellers will cause the
Companies to repay, satisfy or extinguish any intercompany loans outstanding
from Sellers and their Affiliates, (b) Sellers will cause other Affiliates
(other than the Companies) to repay, satisfy or extinguish any intercompany
loans outstanding from the Companies; and (c) except to the extent of the
amount of all checks of the Company outstanding as of the close of business on
the Closing Date, each Company may transfer any and all cash and cash
equivalents by way of dividend or otherwise to Sellers and their Affiliates.
7.8 BULK SALES LAWS. Buyer acknowledges that Sellers and the Companies
have not taken, and do not intend to take, any action required to comply with
any applicable bulk sales or bulk transfer or similar laws.
7.9 USE OF NAME. Subject to Section 6.3, the Surviving Corporation
shall, within a period of six months after the Closing Date, remove all
references to the names "American Home Food Products, Inc.", "American Home
Foods, Inc.", "Canadian Home Products Limited" and "American Home Products
Corporation" and any derivatives or combination thereof, from labels, signs and
other printed material or matter used by the Surviving Corporation in
connection with the Business, and the Surviving Corporation shall clearly
identify to third parties after the Closing that the Business is owned and
operated by the Surviving Corporation.
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7.10 NO SOLICITATION. The Sellers shall not, prior to Closing,
directly or indirectly, through any officer, director, agent or otherwise,
solicit, initiate or encourage the submission of any proposal or offer from any
Person (other than the Buyer) relating to (i) any acquisition or purchase of
all or any material portion of the Shares, the Assets or any of the assets of
the Business or (ii) any merger, consolidation, share exchange, business
combination or similar transaction involving any Company, or participate in any
negotiations regarding, or furnish any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, or facilitate
or encourage, any effort or attempt by any other Person to do or seek any of
the foregoing.
7.11 CERTAIN PROHIBITED ACTIONS. Prior to the Closing, neither Buyer
nor any of its Affiliates will enter into any arrangements, or take any other
actions, to purchase an interest in, or become affiliated with, any Person
engaged in a business competitive with the Business if such action would be
reasonably likely to adversely affect the obtention of approvals of Government
Authorities with respect to Competition Laws.
7.12 INDEBTEDNESS; CHANGE IN CONTROL PAYMENTS. Upon request, the
Sellers shall promptly pay to the Buyer (i) an amount equal to any indebtedness
for borrowed money of the Companies existing immediately prior to the Effective
Time, including any accrued interest thereon and any prepayment penalties
incurred in connection therewith, and (ii) an amount equal to any contractual
obligations of the Companies arising out of or based upon the change in control
of the Companies contemplated by this Agreement.
7.13 ADDITIONAL AGREEMENTS. As soon as reasonably practicable
following the date hereof, Sellers and Buyer will endeavor in good faith to
agree upon the forms of the Registration Rights Agreement and Transition
Services Agreement to be entered into at the Closing.
7.14 SALES OF OLD AHFP SHARES AND TAG ALONG.
(a) From the Closing Date until the earlier of (x) the fifth anniversary
of the Closing Date and (y) the date on which a third party acquires control of
the Surviving Corporation without the consent of the Buyer, Sellers shall not
sell or otherwise dispose of all or any portion of the Old AHFP Shares to an
unaffiliated third party other than pursuant to (i) a registration statement
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filed pursuant to the Securities Act or (ii) Rule 144 under the Securities Act,
unless the Sellers comply with the procedures set forth in Section 7.14(b)
below. A sale to an Affiliate of Sellers shall not be subject to the
restrictions set forth herein provided that such Affiliate enters into an
agreement for the benefit of Buyer to be bound by this Section 7.14.
(b) The procedures referred to in Section 7.14(a) above shall require
that, in the event that Sellers desire to sell all or a portion of the Old AHFP
Shares other than pursuant to a registration statement filed pursuant to the
Securities Act or sales pursuant to Rule 144 under the Securities Act, Sellers
shall notify the Buyer in writing of the number of shares Sellers desire to
sell (the "Offered Shares"); provided however that Sellers shall not have the
right to make any such sale or other disposition until after the first
anniversary of the Closing Date. The Buyer shall have the option for 15 days
from the date of such notice to make a written offer to purchase all but not
less than all of the Offered Shares including the purchase price per share (the
"Offer") and, if the Buyer makes an Offer, Sellers shall have 30 days to accept
or reject the Offer. In the event that Sellers reject such Offer, Sellers
shall be permitted to sell all or not less than 90% of the Offered Shares to a
third party on per share terms no less favorable to Sellers than those set
forth in the Offer, provided, however, that, prior to selling such shares at a
price per share less than 110% of the price per share set forth in the Offer,
Sellers shall offer to sell such shares to the Buyer at such higher price per
share and the Buyer shall have five days in which to accept such offer after
which period (if the Offer is not accepted) Sellers shall be permitted to sell
such shares to such third party at such price. If the Buyer does not make an
Offer to Purchase the Offered Shares, Sellers may sell all of the Offered
Shares to a third party within 120 days after the 15 day period without
restriction with respect to price.
(c) If Sellers accept an Offer or Buyer matches a third party offer
pursuant to Section 7.14(b), the closing of such purchase shall occur within 20
days after acceptance of the Offer by Sellers or such matching acceptance by
Buyer. Upon such acceptance, Sellers and Buyer shall be legally obligated to
consummate the purchase contemplated thereby.
(d) In connection with any sale or potential sale of the Old AHFP Shares
pursuant to Section 7.14(b), Sellers may disclose confidential information
concerning the Surviving Corporation to
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a potential third party purchaser, provided that such potential purchaser shall
execute a confidentiality agreement in a form reasonably acceptable to the
Surviving Corporation and enforceable by the Surviving Corporation.
(e) If Buyer or an Affiliate thereof proposes to sell or dispose of
any New AHFP Shares or other common stock of AHFP for value (such Buyer or
Affiliate being referred to herein as a "Transferor"), but excluding (i) a sale
which is pursuant to a public offering registered under the Securities Act,
(ii) a sale which is made in accordance with Rule 144 under the Securities Act
(or any similar successor provision), (iii) a sale or other disposition to an
Affiliate of such Transferor, and (iv) a sale or sales which are effected by
such Transferor or a group of which such Transferor is a member, in a single
transaction or a series of related transactions, and which in the aggregate do
not involve more than 10% of the outstanding common stock of AHFP, then such
Transferor shall offer (the "Participation Offer") to include in the proposed
sale or disposition a number of shares of AHFP common stock designated by
Sellers, not to exceed the number of shares equal to the product of (A) the
aggregate number of shares to be sold by the Transferor to the proposed
transferee and (B) a fraction with a numerator equal to the sum of the number
of shares of AHFP common stock held by Sellers and their Affiliates and a
denominator equal to the number of shares of common stock held by the
Transferor and its Affiliates and the number of shares of common stock held by
Sellers and their Affiliates. The Transferor shall give written notice to
Sellers of the Participation Offer (the "Transferor's Notice") at least 20 days
prior to the proposed sale. The Transferor's Notice shall specify the proposed
transferee, the number of shares to be sold to such transferee, the amount and
type of consideration to be received therefor, and the place and date on which
the sale is to be consummated. If Sellers wish to include shares in the
proposed sale in accordance with the terms of this Section 7.14(e), Sellers
shall so notify the Transferor not more than 10 days after the date of the
Transferor's Notice. The Participation Offer shall be conditioned upon the
Transferor's sale of shares of common stock pursuant to the transactions
contemplated in the Transferor's Notice with the transferee named therein. If
the Sellers accept the Participation Offer, the Transferor shall reduce to the
extent necessary the number of shares of common stock it otherwise would have
sold in the proposed sale so as to permit the Sellers to sell the number of
shares of common stock that they are entitled to sell under this Section
7.14(e), and the Transferor and Sellers shall sell the
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number of shares specified in the Participation Offer to the proposed
transferee in accordance with the terms of such sale set forth in the
Transferor's Notice (which shall include the terms and conditions of any
applicable purchasing agreement). Notwithstanding any provision contained
herein to the contrary, (X) the rights of the Sellers arising, under this
Section 7.14(e) shall not be assignable to or exercisable by any person who is
not an Affiliate of Sellers and (Y) in the event the consideration to be
received by the transferor in the proposed sale or disposition is securities
issued or sold in a transaction not registered under the Securities Act, then
the rights of the Sellers arising under this Section 7.14(e) shall not be
exercisable unless the exercising party is an "accredited" investor as defined
in Regulation D of the Securities Act.
7.15 CERTAIN RIGHTS OF SELLERS. Following the Closing and for so long
as Sellers beneficially own at least five (5%) of the issued and outstanding
common stock of the Surviving Corporation, (i) at the request of Sellers, the
Buyer and the Surviving Corporation shall use all reasonable efforts to cause
there to be nominated and elected as a member of the Board of Directors of the
Surviving Corporation a designee of Sellers; provided, however, that in the
event that, at any time or times, Sellers do not designate an individual to
serve as a director of the Surviving Corporation, the Surviving Corporation
shall promptly provide Sellers with (x) the right to have a representative
attend all meetings of the Board of Directors and committees thereof, and (y)
all materials provided to the members of the Surviving Corporation's Board of
Directors and committees thereof (except in either case for any such material
or portions of meetings which, in the opinion of counsel to the Surviving
Corporation, is or are subject to the attorney-client privilege and cannot be
provided to or attended by such representative without waiving such privilege,
which material or portions of meetings shall be generally described to
Sellers), and (ii) the Surviving Corporation shall promptly provide Sellers
with (x) all materials provided to banks and other third party lenders, and (y)
such other information, if any, reasonably requested by Sellers in connection
with the preparation of their financial reports and public filings. All
material and information provided to Sellers pursuant to this Section 7.15
shall be maintained by Sellers subject to and in accordance with the provisions
of Section 12.8(c). Sellers acknowledge their obligations requiring the use of
such information under the federal securities laws.
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7.16 TRANSACTIONS WITH AFFILIATES. The Surviving Corporation will not
enter into any transaction, including, without limitation, the purchase, sale
or exchange of property or the receipt of any services, with any Affiliate of
the Surviving Corporation except pursuant to the reasonable requirements of the
business of the Surviving Corporation and upon fair and reasonable terms no
less favorable to the Surviving Corporation than would be obtained in a
comparable arm's length transaction with a person that is not an Affiliate of
the Surviving Corporation.
ARTICLE 8
CONDITIONS
8.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. The obligation of each party to effect the
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing of the following conditions:
(a) all governmental consents and approvals, if any, necessary
to permit the consummation of the transactions contemplated by this Agreement
shall have been obtained and any waiting period (and any extension thereof)
applicable to the consummation of such transaction under the HSR Act or under
other Competition Laws shall have expired or been terminated; and
(b) no preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
Governmental Authority nor any Applicable Law shall be in effect that would
restrain or otherwise prevent the consummation of the transactions contemplated
by the Agreement.
8.2 CONDITIONS TO THE OBLIGATION OF SELLERS. The obligation of
Sellers to effect the transactions contemplated by this Agreement is subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a) Buyer shall have performed in all material respects each
obligation and agreement and complied in all material respects with each
covenant to be performed and complied with by it hereunder at or prior to the
Closing;
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(b) the representations and warranties of Buyer in this
Agreement to the extent qualified as to materiality shall be accurate in all
respects, and, to the extent not so qualified, shall be true and correct in all
material respects, as of the Closing Date with the same force and effect as
though made at such time, except for changes contemplated by this Agreement;
(c) Buyer shall have furnished to Sellers a certificate, dated
as of the Closing Date, signed by a duly authorized officer of Buyer to the
effect that all conditions set forth in Sections 8.2(a) and (b) have been
satisfied;
(d) All legal or financial opinions and/or letters regarding
the recapitalization, solvency of legal entities holding the assets of the
Business subsequent to the Closing, and any redemptions, dividends and
incurrence of debt incurred pursuant to the transactions contemplated hereby,
addressed to Buyer or its Affiliates in connection therewith shall also be
addressed and delivered to Sellers; provided in any event (i) any copies of the
above obtained by Buyer or its Affiliates addressed to a third party shall also
be delivered to Sellers, and (ii) Buyer shall cause to be addressed to and
delivered to Sellers an opinion regarding the solvency of the legal entities
holding the assets of the Business subsequent to the Closing;
(e) The Buyer shall have entered into the Registration Rights
Agreement; and
(f) At the Closing the Sellers shall have received no less
than $1,202,000,000 in immediately available funds, and in the manner described
in Articles 2 and 3.
8.3 CONDITIONS TO THE OBLIGATION OF BUYER. The obligation of Buyer to
effect the transactions contemplated by this Agreement is subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Sellers shall have performed in all material respects each
obligation and agreement and complied in all material respects with each
covenant to be performed and complied with by them hereunder at or prior to the
Closing;
(b) the representations and warranties of Sellers in this
Agreement to the extent qualified as to materiality shall be accurate in all
respects, and, to the extent not so qualified, shall be true and correct in all
material respects, as of the
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Closing Date with the same force and effect as though made at such time, except
for changes contemplated by this Agreement;
(c) Sellers shall have furnished to Buyer a certificate, dated
as of the Closing Date, signed by duly authorized officers of Sellers to the
effect that all conditions set forth in Sections 8.3(a) and (b) have been
satisfied;
(d) the Buyer shall have received the proceeds of the
financing contemplated by each of the Commitment Letters; and
(e) the Sellers shall have entered into the Registration
Rights Agreement and the Transitional Services Agreement.
ARTICLE 9
AGREEMENTS WITH RESPECT TO EMPLOYEES
AND EMPLOYEE BENEFITS
9.1 POST-CLOSING OBLIGATIONS TO EMPLOYEES. Effective immediately
after the Closing, Buyer will continue (or will cause the Surviving Corporation
and the Companies to continue) to employ all the Employees in comparable
positions, at the same or greater pay. Effective immediately after the Closing
Date and for the period ending one year after the Closing Date, Buyer will
provide (or cause the Surviving Corporation and the Companies to provide)
Employees (other than Employees covered by collective bargaining agreements)
with benefits under (i) Buyer's Welfare Plans, and (ii) Buyer's Defined
Contribution Plan which are substantially equivalent in the aggregate to those
provided to such Employees pursuant to such plans, programs and arrangements of
the Companies in effect at the date hereof including Seller's Defined Benefit
Plan in effect at the date hereof, and will provide Employees and former
employees of the Companies covered by collective bargaining agreements such
benefits as shall be required under the terms of any applicable collective
bargaining agreement; provided, however, that for purposes of providing
Employees with benefits that are substantially equivalent in the aggregate,
Buyer (or the Surviving Corporation and the Companies) may utilize defined
contribution plans in lieu of Seller's Defined Benefit Plan but nothing herein
shall eliminate Buyer's (or the Surviving Corporation's or the Companies')
obligations to comply with any applicable collective bargaining agreement or
the
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obligations contained in Section 9.4(b)(i). This Section shall not be
construed as guaranteeing employment to any particular Employee for a period
greater than otherwise required by any Applicable Law.
9.2 SEVERANCE WITH RESPECT TO EMPLOYEES IN THE UNITED STATES. The
following provisions of this Section 9.2 do not apply with respect to Employees
of CHP.
(a) Except as otherwise provided in Section 9.2(b), Buyer shall
make (or shall cause the Surviving Corporation or a Company to make) or cause
there to be made a severance payment to any Employee whose employment is
terminated because of a reduction in the work force or job elimination at any
time during the two year period following the Closing Date. For exempt and
non-exempt Employees, the payment will be calculated on the basis of two weeks
base pay for each full year of service to the Companies, Seller, or its
Affiliates, with a minimum payment of twelve weeks and a maximum payment of
fifty-two weeks; provided, however, that for the individuals listed on Section
9.2 of the Disclosure Schedule, the minimum severance payment will be nine
months and, provided further that, for Employees who earn greater than U.S.
$75,000 a year, the minimum severance payment will be six months. No such
severance payment shall be made if an employee is terminated for "Cause" which
for purposes of this Section 9.2(a) shall be defined as (i) fraud, embezzlement
against the Surviving Corporation or its Affiliates, falsification of records
or other similar acts, (ii) gross neglect of or a gross failure to perform
substantial job duties, (iii) commission of a felony crime, or (iv)
demonstrated substance abuse. Severance payments will also be made if an
Employee resigns from employment with Buyer or its Affiliates because (x) there
is a reduction in his/her base salary or wages (other than for Cause), (y)
there is a clear, substantial diminution of duties or other similar change in
the nature and extent of his/her job responsibilities other than for Cause, or
(z) a condition of continued employment is a relocation of principal work place
of greater than 50 miles.
(b) In the event that after the Closing Buyer or its Affiliates
terminates the employment of any Employee who is covered by a collective
bargaining agreement, Buyer shall pay (or shall cause the Surviving Corporation
or a Company to pay) severance benefits in accordance with the applicable
collective bargaining agreement.
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(c) For a period the lesser of (i) six months following the
termination of employment of an Employee which triggers a severance payment
under Section 9.2(a) or (b) above, and (ii) the amount of weeks following the
termination of an Employee that is used to calculate a terminated Employee's
severance under Section 9.2(a) or (b) above, Buyer will also extend (or will
cause the Surviving Corporation or a Company to extend) coverage under its
basic life insurance, medical and prescription drug plans to such terminated
Employees. Additionally, any Employee listed on Section 9.2 of the Disclosure
Schedule whose termination triggers such a severance payment will be offered
outplacement benefits and educational assistance benefits, following
termination having a value of not less than $10,000 per employee and provided
through a firm acceptable to Sellers with a program reasonably acceptable to
Sellers.
9.3 SEVERANCE WITH RESPECT TO EMPLOYEES IN CANADA. The following
provisions of this Section 9.3 apply solely with respect to Employees of CHP.
(a) Except as otherwise provided in Section 9.3(b), Buyer
shall make (or cause the Surviving Corporation or a Company to make) a
severance payment to any Employee whose employment is terminated because of a
reduction in the work force or job elimination at any time during the two year
period following the Closing Date. For exempt and non-exempt Employees, the
payment will be calculated on the basis of two weeks base pay for each year of
service to CHP, Sellers, or their Affiliates, with a minimum payment of twelve
weeks and a maximum payment of fifty-two weeks; provided, however, that for the
President and Vice Presidents of CHP, the minimum severance payment will be
nine months and provided further, that for Employees who earn greater than CDN
$75,000 a year, the minimum severance payment will be six months. No such
severance payment shall be made if an Employee is terminated for "Cause" which
for purposes of this Section 9.3(a) shall be defined as (i) fraud or
embezzlement against the Surviving Corporation or its Affiliates, falsification
of records or other similar acts, (ii) gross neglect of or gross failure to
perform substantial job duties, (iii) commission of a felony crime,or (iv)
demonstrated substance abuse. Severance payments will also be made if an
Employee resigns from employment with CHP because (x) there is a reduction in
his base salary or wages (other than for Cause), (y) there is a clear
diminution of duties or other similar substantial change in the nature and
extent of his/her job responsibilities other
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than for Cause or (z) a condition of continued employment is a relocation of
principal work place of greater than 50 miles.
(b) In the event that after Closing Buyer or its Affiliates
terminates the employment of any Employee who is covered by a collective
bargaining agreement, Buyer shall pay ( or shall cause the Surviving
Corporation or a Company to pay) severance benefits in accordance with the
applicable collective bargaining agreement.
(c) For the period the lesser of (i) six months following the
termination of employment of an Employee which triggers a severance payment
under Section 9.3(a) or (b) above, and (ii) the amount of weeks following the
termination of an Employee that is used to calculate a terminated Employee's
severance under Section 9.3(a) or (b) above, Buyer will also extend (or will
cause the Surviving Corporation or a Company to extend) coverage under its
basic life insurance, medical and prescription drug plans to such terminated
Employees. Additionally, any Employee set forth on Section 9.2 of the
Disclosure Schedule whose termination triggers such a severance payment will be
offered outplacement benefits and educational assistance benefits following
termination having a value of not less than $10,000 CDN per employee and
provided through a firm acceptable to Sellers with a program reasonably
acceptable to Sellers.
Notwithstanding the previous provisions of Sections 9.2 and 9.3, if,
during the one year period following the Closing, (i) Sellers receive notice
from Buyer or its Affiliates of its intention to terminate any of the Employees
set forth in Section 9.2 of the Disclosure Schedule not later than ten business
days prior to termination, and (ii) Sellers employ such Employee within 60 days
of such termination, then Surviving Corporation shall not have any severance
obligations to such Employee pursuant to the terms of this Article 9.
9.4 BENEFIT PLANS WITH RESPECT TO EMPLOYEES.
The obligations set forth under Section 9.4 shall be in furtherance of
and not by way of limitation on Buyer's obligations under Section 9.1.
(a) (i) Effective immediately after the Closing, all Employees
who are non-union employees shall be eligible to participate in a defined
contribution plan adopted by Buyer (or
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by the Surviving Corporation and/or the Companies) ("Buyer's Defined
Contribution Plan") in accordance with the terms of such plan. Service
completed by the Employees while employed by a Company, Sellers or their
Affiliates shall be recognized for purposes of determining eligibility for
participation and vesting of benefits, but not for benefit computation purposes
under Buyer's Defined Contribution Plan.
(ii) Sellers maintain a qualified defined benefit pension plan,
the American Home Products Corporation Retirement Plan -- United States and a
related supplemental benefits plan ("Sellers' Retirement Plans").
(iii) Sellers agree to amend Sellers' Retirement Plans to provide
that, with respect to benefits accrued under Sellers' Retirement Plans through
the Closing Date, the Employees' period of service with the Buyer (or the
Surviving Corporation and/or the Companies) shall be taken into account for
purposes of determining eligibility for subsidized early retirement benefits
and vesting of benefits under Sellers' Retirement Plans.
(b) (i) Promptly after the Closing Date if required under the
terms of the collective bargaining agreements covering Employees other than
Employees of CHP, Buyer shall adopt or cause the Companies to adopt new defined
benefit pension plan(s) and establish trust(s) thereunder (or make provision
for the use of existing plans or trusts of Buyer) to provide benefits no less
favorable than the benefits provided under Sellers' Coordinated Bargaining
Retirement Plan--United States ("Sellers' Union Pension Plan") for the benefit
of all Employees who are covered under Sellers' Union Pension Plan.
"Continuous service" recognized and defined in Sellers' Union Pension Plan
shall be recognized for purposes of determining eligibility for participation,
eligibility for subsidized early retirement benefits and vesting of benefits,
but not for benefit computation purposes under such new defined benefit pension
plan(s).
(ii) Sellers agree to amend Sellers' Union Pension Plans to
provide that, with respect to benefits accrued under Sellers' Union Pension
Plan through the Closing Date on behalf of all Employees, such Employees'
continuous service recognized under the new defined benefit pension plan(s)
shall be taken into account for purposes of determining eligibility for
participation, eligibility for subsidized early retirement benefits and vesting
of benefits, but not for benefit computation purposes under Sellers' Union
Pension Plan.
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(c) (i) Buyer maintains (or will adopt, or cause the Surviving
Corporation and/or the Companies to adopt, before Closing) a tax-qualified
savings plan ("Buyer's Savings Plan"). Immediately after the Closing Date, all
non-union Employees, other than the Employees of CHP, shall be eligible to
participate in Buyer's Savings Plan in accordance with the terms of such plan.
Service completed by the Employees while employed by a Company, Sellers or
their Affiliates shall be recognized for purposes of determining eligibility to
participate and vesting of benefits under Buyer's Savings Plan. As soon as
practicable after the Closing Date, Sellers shall cause matching contributions
to be made to the Sellers' Savings Plan with respect to all contributions by or
on behalf of Employees relating to compensation paid to Employees through the
Closing Date. As soon as practicable after the Closing Date (and after such
matching contributions have been made), Sellers shall cause the assets held in
trust under the Sellers' Savings Plan (as defined below) in respect of the
aggregate benefits accrued by the Employees who were participants in Sellers'
Savings Plan immediately prior to such date to be valued and transferred to the
trust under Buyer's Savings Plan; provided, however, that Sellers shall first
have provided Buyer with an opinion of counsel reasonably satisfactory to Buyer
or the Surviving Corporation that the Sellers' Savings Plan is qualified in
form under Section 401(a) of the Code, and Buyer shall first have provided
Sellers with an opinion of counsel reasonably satisfactory to Sellers that the
Buyer's Savings Plan is qualified in form under Section 401(a) of the Code.
The assets to be transferred from the trust under the Sellers' Savings Plan
pursuant to this Section 9.4(c) shall be in cash or, to the extent mutually
agreed to by Sellers and Buyer, a combination of cash, securities and other
property; provided, however, any participant loans shall be transferred in
kind. The amount transferred from the trust under the Sellers' Savings Plan
shall be adjusted to reflect any distributions properly attributable to such
Plan during the period prior to the transfer date. At the time the assets that
are held in the trust with respect to the Sellers' Savings Plan on behalf of
the Employees are paid to the trust under the Buyer's Savings Plan, the Buyer's
Savings Plan shall assume all liabilities of the Sellers' Savings Plan for the
transferred benefits thereunder, and such transfer shall be in full discharge
of all obligations of the Sellers' Savings Plan in respect of the accounts
being transferred. During the period following the Closing Date and preceding
the transfer of assets and liabilities pursuant to this Section 9.4(c), Buyer
and Seller will cooperate with and assist each other in the continued
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administration of the Sellers' Savings Plan and in the filing of documents
required by the transfer of assets and liabilities herein. Notwithstanding the
above, the amount transferred to the Plan shall be in no event less than the
amount necessary to satisfy the requirements of Section 414(1) of the Code.
(ii) Sellers maintain a qualified savings plan, the American
Home Products Corporation Savings Plan ("Sellers' Savings Plan"). Sellers
shall amend the Sellers' Savings Plan to provide that all Employees who are
non-union employees shall be fully vested in any Matching Contributions to such
employee's accounts in the Sellers' Savings Plan upon the Closing.
(d) To the extent permitted under Applicable Law, Sellers will
make amendments similar to those set forth in Section 9.4(a)(iii), 9.4(b)(ii)
and 9.4(c)(ii) to the American Home Products Corporation Coordinated Bargaining
Retirement Plan -- Canada and the American Home Products Corporation Retirement
Savings Plan - Canada, and Buyer shall (or shall cause the Surviving
Corporation or a Company to) cover and make provisions for the Canadian
Employees covered under Buyer's (or the Surviving Corporation's) pension and
savings plans for Canadian Employees in a manner consistent with the provisions
of subsections (a), (b) and (c) above.
(e) Buyer shall assume (or shall cause the Surviving
Corporation or a Company to assume) the sponsorship of, and discharge all
liabilities under, or to cause its Affiliates to continue to sponsor and
discharge all liabilities under, the AHF, Inc. Pension Plan - Highspire, PA.
("Highspire Retirement Plan") maintained by American Home Food Products, Inc.
pursuant to a collective bargaining agreement with Local 330 - American
Federation of Grain Millers.
(f) Buyer maintains (or will adopt or will cause the Surviving
Corporation or the Companies to adopt) medical, dental, prescription drug,
vacation, death, accidental death and dismemberment, short-term disability and
long-term disability benefit plans ("Buyer's Welfare Plans") for its employees.
Upon implementation Employees shall be eligible to participate in Buyer's
Welfare Plans in accordance with the terms of such plans and employment with
the Companies, Sellers and their Affiliates shall be taken into account for
purposes of determining eligibility for participation and benefits under
Buyer's Welfare Plans; provided, however, that the Employees shall participate
in the Buyer's Welfare Plans without any waiting periods and without
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any evidence of insurability; and Buyer shall (or shall cause the Surviving
Corporation or the Companies to) count claims arising on or prior to the
Closing Date for purposes of satisfying deductibles, out-of-pocket maximums and
other similar limitations.
(g) Sellers agree that any claims for welfare benefits arising
on or before the Closing Date with respect to any Employees or former
employees of the Companies (or their covered dependents or beneficiaries) shall
be the responsibility of Sellers or the insurers of Sellers' welfare plans and
Buyer agrees that any claims for welfare benefits and worker's compensation
arising subsequent to the Closing Date with respect to any Employees (or their
covered dependents or beneficiaries) shall be the responsibility of the
Surviving Corporation and the Companies or the insurers of Buyer's Welfare
Plans. Except as otherwise provided below, a claim is deemed to have arisen
when services relating to the condition that is the subject of the claim were
performed. In the case of an individual who is hospitalized on the Closing
Date, all claims relating to such hospitalization (including, without
limitation, hospital charges and physician fees) shall be deemed to be claims
arising on or before the Closing Date. With respect to worker's compensation
claims which are single - accident specific, a claim is deemed to have arisen
on the date of occurrence. With respect to all other worker's compensation
claims, a claim is deemed to have arisen on the date the worker's compensation
award is made. With respect to life insurance or other death-related benefits,
a claim is deemed to have arisen when the death of the Employee or covered
dependent occurred.
(h) Buyer maintains (or will adopt or will cause the Surviving
Corporation or the Companies to adopt) for a period of not less than one year
following the Closing Date a program of medical, prescription drugs and life
insurance benefits for certain retired employees substantially similar to
Sellers' programs for retired employees ("Buyer's Retiree Welfare Plans").
Sellers currently maintains programs of medical, prescription drugs and life
insurance benefits for certain retired employees ("Sellers' Retiree Medical
Plan"). All Employees who as of the Closing Date have reached age 55 and have
earned at least 10 years of continuous service under Sellers' Retirement Plan
shall be covered by Sellers' Retiree Medical Plans as in effect from time to
time from and after the date that such employees are no longer covered by a
medical plan maintained by Buyer or its Affiliates that provides coverage for
active employees. For
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employees not described in the preceding sentence, continuous service under
Sellers' Retirement Plan and credited as of the Closing Date shall be taken
into account in determining eligibility for coverage under Buyer's Retiree
Welfare Plans, as in effect from time to time.
(i) Sellers shall be responsible for any legally-mandated
continuation of health care coverage for Employees and/or their covered
dependents who have a loss of health care coverage due to a "qualifying event"
(as defined in Section 4980B of the Code or any successor thereto) that occurs
on or before the Closing Date. Buyer shall be (or shall cause the Surviving
Corporation or the Companies to be) responsible for any legally-mandated
continuation of health care coverage for Employees and/or their covered
dependents who have a loss of health coverage due to a qualifying event that
occurs after the Closing Date.
9.5 WARN ACT. After the Closing Date, all obligations to employees or
former employees of any of the Companies under the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. Sections 2101, et. seq., shall be sole
obligation of the Surviving Corporation and the Companies.
9.6 NO THIRD PARTY BENEFICIARIES. No provision of this Agreement shall
create any third party beneficiary or other rights in any Employee or former
employee (including any beneficiary or dependent thereof) in respect of
continued employment with any Company, with Sellers, or with any of their
respective Affiliates and no provisions of this Agreement shall create any such
rights in any such persons in respect of any benefits that may be provided,
directly or indirectly, under any Benefit Plan or any plan or arrangement which
may be established by Buyer or any of its Affiliates. No provision of this
Agreement shall constitute a limitation on rights to amend, modify or terminate
before or after the Closing Date any such plans or arrangements of Sellers, any
Company, Buyer or any of their respective Affiliates (provided that neither the
Sellers nor any Company may amend any such plans to increase benefits
thereunder prior to the Closing Date), or the rights of Buyer, any Company or
any Affiliates of Buyer, any Company or any Affiliates of Buyer to terminate
any Employee at will.
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ARTICLE 10
TERMINATION, AMENDMENT AND WAIVER
10.1 TERMINATION. This Agreement may be terminated at any time prior
to the Closing Date:
(a) by mutual consent of Buyer and Sellers;
(b) by Buyer or Sellers if the Closing shall not have occurred
on or prior to December 10, 1996, provided, however, that the right to
terminate under this Section 10.1(b) shall not relieve any party whose failure
to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such date of any
liability of such party to the remaining party hereunder for such failure; and
(c) Subject to Section 7.5(b), by Buyer or Sellers if a court
of competent jurisdiction or Governmental Authority shall have issued an order,
decree or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
by this Agreement, and such order, decree, ruling or other action shall have
become final and nonappealable.
The date on which this Agreement is terminated pursuant to any of
the foregoing subsections of this Section 10.1 is herein referred to as the
"Termination Date."
10.2 EFFECT OF TERMINATION. Except as set forth in Sections 7.2 and
7.4 upon the termination of this Agreement pursuant to Section 10.1, this
Agreement shall forthwith become null and void, except that nothing herein
shall relieve any party from liability for breach of this Agreement prior to
such termination.
ARTICLE 11
INDEMNIFICATION
11.1 INDEMNIFICATION. (a) Except with respect to any claim related
to Taxes, for which Section 7.6 of this Agreement shall provide the sole and
exclusive basis of indemnity to Buyer, the Surviving Corporation and the
Companies and subject to Section 11.3, Sellers shall jointly and severally
indemnify, defend and
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hold harmless Buyer and its respective Affiliates (which after the Closing
shall include the Surviving Corporation, CHP, Lucks, AHF and Polaner),
officers, directors, employees and controlling Persons from any liability,
damage, deficiency, loss, judgments, penalties, assessments, cost or expense,
including reasonable attorneys' fees and costs of investigating and defending
against lawsuits, complaints, actions or other pending or threatened
litigation, as such may be incurred (being hereafter referred to in this
Article 11 as "Costs"), arising from or attributable to:
(i) the breach of any representation or warranty made by
Sellers in this Agreement;
(ii) any failure of Sellers duly to perform or observe any
covenant or agreement to be performed or observed by Sellers pursuant to
this Agreement;
(iii) the pending litigation matters listed as numbers in Section
4.12 of the Disclosure Schedule;
(iv) any personal injury to any Person caused by any products
manufactured or produced by the Business prior to the Closing Date except to
the extent such injuries are attributable to the negligence of Buyer or its
Affiliates or its distributors in the handling, storage or shipment of products
after the Closing Date;
(v) the withdrawal by the Surviving Corporation from the
multiemployer plans set forth in Section 4.16(f) of the Disclosure Schedule to
the extent of the amount, if any, of the unfunded liability allocated to the
Surviving Corporation as of December 31, 1996, as determined as soon as
reasonably practicable following such date by an actuary experienced in such
determinations and reasonably acceptable to Sellers and the Buyer; provided
that Sellers have received notice of the withdrawal of the Surviving
Corporation from any such plans and the incurrence of such withdrawal liability
within three years from the Closing Date; and
(vi) the "reportable event" listed in Section 4.16(e) of the
Disclosure Schedule.
(b) Except with respect to any claim related to Taxes, for
which Section 7.6 of this Agreement shall provide the sole and exclusive basis
of indemnity to Seller, Buyer, the Surviving
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Corporation and the Companies shall jointly and severally indemnify and hold
harmless each Seller, its officers, directors and employees from Costs arising
from or attributable to:
(i) the breach of any representation or warranty made by Buyer
in this Agreement;
(ii) any failure of Buyer duly to perform or observe any
covenant or agreement to be performed or observed by Buyer pursuant to
this Agreement;
(iii) except for matters set forth in Sections 11.1(a) and 7.6,
the liabilities of the Companies (and the Surviving Corporation) and the
Assumed Liabilities;
(iv) any noncompliance by any of the Companies, first occurring
after the Closing Date, with any Environmental Laws, any Release,
threatened Release or presence of any Hazardous Substance at the Real
Property first occurring after the Closing Date or any disposal or
arrangement therefor or any Hazardous Substance first generated by the
Companies after the Closing Date;
(v) any personal injury to a Person caused by any products
manufactured or produced by the Business after the Closing Date or
manufactured or produced prior to the Closing, to the extent such
injuries are attributable to the negligence of Buyer or its Affiliates
or distributors in handling, storage or shipment of any products after
the Closing Date;
(vi) except for the matters set forth in Sections 11.1(a) and
7.6, any other liabilities of the Companies and all liabilities arising
out of, or relating primarily to, the Business; and
(vii) the transactions described in Sections 2.1 and 2.8.
11.2 PROCEDURES. (a)(i) In order for a party (the "Aggrieved Party")
to be entitled to any indemnification provided for under this Agreement (other
than under Section 7.6) in respect of, arising out of or involving a claim or
demand made by any Person or Governmental Authority against the Aggrieved Party
(a "Third Party Claim"), such Aggrieved Party must notify the indemnifying
party (the "Indemnifying Party"), in writing, and in reasonable
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detail, of the Third Party Claim within 10 business days after receipt by such
Aggrieved 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 such failure or delay impairs the
Indemnifying Party's ability to contest any such Third Party Claim (except that
the Indemnifying Party shall not be liable for any expenses incurred during the
period in which the Aggrieved Party failed to give such notice). Thereafter,
the Aggrieved Party shall deliver to the Indemnifying Party, within five
business days after the Aggrieved Party's receipt thereof, copies of all
notices and documents (including court papers) received by the Aggrieved Party
relating to the Third Party Claim.
If a Third Party Claim is made against an Aggrieved Party, the
Indemnifying Party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party and reasonably satisfactory to the Aggrieved Party. Should
the Indemnifying Party so elect to assume the defense of a Third Party Claim,
the Indemnifying Party will not be liable to the Aggrieved Party for legal
expenses subsequently incurred by the Aggrieved Party in connection with the
defense thereof, unless (x) the Indemnifying Party has authorized the
employment of legal counsel by the Aggrieved Party or (y) the Aggrieved Party
and the Indemnifying Party are each named parties to such action (including
impleaded parties) and shall have been advised in writing by its legal counsel
that there may be conflicting interests between the Aggrieved Party and the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to assume the defense of such Third Party Claim on behalf of the
Aggrieved Party provided that, in such event, legal counsel selected by the
Aggrieved Party shall be required to cooperate fully with legal counsel for the
Indemnifying Party). If the Indemnifying Party assumes such defense, the
Aggrieved Party shall have the right to consult in the defense thereof and to
employ counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party, it being understood that the Indemnifying Party shall
control such defense. The Indemnifying Party shall be liable for the
reasonable fees and expenses of counsel employed by the Aggrieved Party for any
period during which the Indemnifying Party has not assumed (or is not entitled
to assume hereunder) the defense thereof (other than during any period in which
the Aggrieved Party shall have failed to give notice of the Third Party Claim
as provided above). If the Indemnifying Party chooses to defend or prosecute
any Third Party
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Claim, all of the parties hereto shall cooperate in the defense or prosecution
thereof. Such cooperation shall include the retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party of
records and information which 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.
Whether or not the Indemnifying Party shall have assumed the defense of a Third
Party Claim, the Aggrieved 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.)
(ii) If there shall be any conflicts between the provisions of this
Section 11.2 and Section 7.6, the provisions of Section 7.6 shall control with
respect to Tax matters.
11.3 LIMITATIONS. (a) An Aggrieved Party shall not be entitled to
recover any Costs under Sections 11.1(a)(i) or 11.1(b)(i) (other than in
respect of Sections 4.2, 4.16(d), 4.16(f), 4.18, 4.20, 5.3 and 5.7 as to which
this clause (a) of Section 11.3 shall not apply) until the aggregate amount of
the Costs suffered by the Aggrieved Party thereunder shall exceed $10 million
(the "Minimum Loss"), at which time the indemnification provided under Sections
11.1(a)(i) or 11.1(b)(i) shall apply to all Costs in excess of the Minimum
Loss, and (b) the maximum liability under Section 11.1 (other than in respect
of Sections 4.2, 4.18 4.20, 5.3 and 5.7 as to which this clause (b) of Section
11.3 shall not apply) for an Indemnifying Party shall not exceed $300 million
in the aggregate. For purposes of determining the aggregate amount of Minimum
Loss suffered by an Aggrieved Party, each representation, warranty, covenant
and agreement contained in this Agreement for which indemnification can be or
is sought hereunder shall be read without regard to any materiality (including
Material Adverse Effect) or knowledge qualifications that may be contained
therein. Notwithstanding anything to the contrary contained herein, a party
shall not be entitled to indemnification under Article 11 with respect to any
matter to the extent a purchase price adjustment has been made with respect to
such matter pursuant to Section 3.6. Notwithstanding the foregoing provisions
to the contrary, the limitations set forth in this Section 11.3 shall not apply
to any indemnities with respect to Taxes, under clause (iii) of Section
11.1(a).
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11.4 INDEMNIFICATION AS SOLE REMEDY. Except as provided in Section
7.6 and except with respect to fraudulent or intentional conduct, the
indemnification provided in this Article 11, subject to the limitations set
forth herein, shall be the exclusive post-Closing remedy for damages available
to any Aggrieved Party. Notwithstanding the foregoing or any other provision
of this Agreement, Buyer shall have the right to seek all available equitable
remedies or relief in the event of a breach of this Agreement by the Sellers.
ARTICLE 12
GENERAL PROVISIONS
12.1 PUBLIC STATEMENTS. So long as this Agreement is in effect, none
of the parties hereto shall issue or cause the publication of any press release
or other announcement with respect to this Agreement or the transactions
contemplated hereby without consulting with and obtaining the consent of the
other party; provided, however, that such consent shall not be required where
such release or announcement is required by Applicable Law.
12.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally,
mailed by reputable overnight courier or certified mail (return receipt
requested) or sent by telecopier (confirmed thereafter by such overnight
courier or certified mail) to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice:
(a) if to Sellers:
c/o American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Senior Executive Vice President
Telecopier Number: (000) 000-0000
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with a copy to:
Xxxxx X. Xxxxxx, Xx.
Senior Vice President and General Counsel
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telecopier Number: (000) 000-0000
(b) if to Buyer:
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Managing Director & Principal
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxx
Xxxxxx & Xxxxxx L.L.P.
3700 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Telecopier Number: (000) 000-0000
Notice so given shall (in the case of notice so given by mail) be
deemed to be given and received on the third calendar day after mailing or the
next business day if sent by a reputable overnight courier and (in the case of
notice so given by telecopier or personal delivery) on the date of actual
transmission or (as the case may be) personal delivery.
12.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNITIES. The
respective representations and warranties of the parties hereto shall survive
the Closing and shall remain in full force and effect, provided, however, that
(a) the representations and warranties contained in Section 4.1, 4.2 and 4.7
shall survive until the applicable statute of limitations has run (including
any and all periods of extension or tolling thereof) for the particular subject
matter of such Sections, (b) the representations and warranties contained in
Section 4.11 shall expire on the third anniversary of the Closing Date, (c)
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the representations and warranties contained in Section 4.14 shall expire on
the fifth anniversary of the Closing Date, and (c) all other representations
and warranties shall expire on the eighteen month anniversary of the Closing
Date. Notwithstanding the foregoing, with respect to any matter as to which
any Aggrieved Party has notified the Indemnifying Party in accordance with this
Agreement on or prior to the date that the indemnification obligation of the
Indemnifying Party would otherwise terminate in accordance with this Section
12.3, the indemnification obligation of the Indemnifying Party shall continue
until the liability of the Indemnifying Party shall have been determined
pursuant to this Agreement, and the Indemnifying Party shall have reimbursed
the Aggrieved Party for the full amount of such Costs for which the
Indemnifying Party is responsible under this Agreement. Covenants to be
performed under this Agreement shall survive until performed in accordance with
the terms of this Agreement.
12.4 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
12.5 WAIVER. At any time prior to the Closing, any term, provision or
condition of this Agreement may be waived in writing (or the time for
performance of any of the obligations or other acts of the parties hereto may
be extended) by the party that is entitled to the benefits thereof.
12.6 PARTIES IN INTEREST. This Agreement may not be assigned by a
party without the prior written consent of the other parties hereto; provided
that the Buyer shall have the right without the prior consent of any party
hereto to assign in all or in part its rights under this Agreement to any
Affiliate thereof or to any Person providing financing for purposes of funding
the transactions contemplated by this Agreement and provided further that, from
and after the Closing, Buyer shall have the right without the prior consent of
any party hereto to assign in all or part its rights under this Agreement to
any Person. This Agreement shall not run to the benefit of or be enforceable
by any Person, including, without limitation, an Employee, other than a party
to this Agreement and its successors and assigns.
12.7 MISCELLANEOUS. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and
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undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof; is not intended to confer upon any other
person any rights or remedies hereunder; and shall be governed in all respects,
including validity, interpretation and effect, by the internal laws of the
State of New York without giving effect to the principles of conflicts of laws
thereunder. For purposes of this Agreement, "Sellers knowledge" and "knowledge
of Sellers" shall mean the actual knowledge of Sellers or the individuals
listed in Section 12.7 of the Disclosure Schedule. This Agreement may be
executed in one or more counterparts which together shall constitute a single
agreement. If any provisions of this Agreement shall be held to be illegal,
invalid or unenforceable under any applicable law, then such contravention or
invalidity shall not invalidate the entire Agreement. Such provision shall be
deemed to be modified to the extent necessary to render it legal, valid and
enforceable, and if no such modification shall render it legal, valid and
enforceable, then this Agreement shall be construed as if not containing the
provision held to be invalid, and the rights and obligations of the parties
shall be construed and enforced accordingly.
12.8 ACCESS TO RECORDS AFTER EFFECTIVE TIME. (a) For a period of six
years after the Closing Date, Sellers and their representatives shall have
reasonable access to all of the books and records of the Surviving Corporation
with respect to periods prior to the Closing Date to the extent that such
access may reasonably be required by Sellers in connection with matters
relating to or affected by the operations of the Companies prior to the Closing
Date. The Surviving Corporation shall afford such access upon receipt of
reasonable advance notice and during normal business hours. Sellers shall be
solely responsible for any costs or expenses incurred by it pursuant to this
Section 12.8(a). If the Surviving Corporation shall desire to dispose of any
of such books and records prior to the expiration of such six-year period, the
Surviving Corporation shall, prior to such disposition, give Sellers a
reasonable opportunity, at Sellers' expense, to segregate and remove such books
and records as Sellers may elect.
(b) For a period of six years after the Closing Date, Buyer,
the Surviving Corporation and their respective representatives shall have
reasonable access to all of the books and records relating to the Surviving
Corporation or the Business which Sellers or any of their Affiliates may retain
after the Closing Date. Such access shall be afforded by Sellers and their
Affiliates upon receipt of reasonable advance notice and during normal business
hours. Buyer or the Surviving Corporation, as
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the case may be, shall be solely responsible for any costs and expenses
incurred by it pursuant to this Section 12.8(b). If Sellers or any of their
Affiliates shall desire to dispose of any of such books and records prior to
the expiration of such six-year period, Sellers shall, prior to such
disposition, give Buyer and the Surviving Corporation a reasonable opportunity,
at Buyer's or the Surviving Corporation's expense, to segregate and remove such
books and records as Buyer or the Surviving Corporation may elect.
(c)(A) Sellers, the Surviving Corporation and Buyer covenant and
agree that any confidential information disclosed pursuant to Section 12.8(a)
or Section 12.8(b) hereof shall be kept confidential by the receiving party and
shall not be disclosed to any third parties other than the receiving party's
employees, advisors or counsel for a period for three years form the date of
disclosure unless the receiving party is required to disclose such information
to a Governmental Authority (specifically including, but not limited to, the
U.S. Internal Revenue Service or similar Governmental Authority) or by other
requirements of law or applicable legal process. Confidential information
described above shall not include information which (i) is or becomes publicly
known other than through a breach of this agreement by the receiving party;
(ii) can be proven to have been in the receiving party's possession, without
obligation of secrecy tot he disclosing party and was not previously acquired
directly or indirectly from the disclosing party; or (iii) is subsequently
disclosed to the receiving party by a third party who did not to the receiving
party's knowledge receive it under any obligation of confidentiality to the
disclosing party. If a receiving party is required to disclose any of the
confidential information to a Governmental Authority, it shall give prompt
notice to the disclosing party of such requirement
12.9 MITIGATION. An Aggrieved Party and a party seeking
indemnification under Section 7.6, shall take all responsible steps necessary
to mitigate Costs upon becoming aware of any event that could reasonably be
expected to give rise thereto.
12.10 RETURN OF INFORMATION. If for any reason whatsoever the
transactions contemplated by this Agreement are not consummated, Buyer shall
promptly return to Sellers all books and records furnished by Sellers or their
Affiliates or their respective agents, employees or representatives, and all
copies, summaries and extracts thereof shall be destroyed (with such
destruction confirmed in writing to Sellers) and shall not used or disclosed
for any purpose or make such information available to any Person.
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12.11 DIRECTORS, OFFICERS AND STOCKHOLDER LIABILITY. The directors,
officers and stockholders of the Buyer and its Affiliates (other than Merger
Sub or any other Affiliate who becomes a party hereunder) shall not have any
personal liability or obligation arising under this Agreement (including any
claims that the Surviving Corporation or other Companies may assert) other than
as an assignee of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
AMERICAN HOME PRODUCTS CORPORATION
By:/s/ XXXXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
AHP SUBSIDIARY HOLDING CORP.
By: /s/ XXXX X. XXXXXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
AMERICAN HOME FOOD PRODUCTS, INC.
By: /s/ XXXX X. XXXXXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
AHFP HOLDING CORPORATION
By: /s/ XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President, Treasurer and
Secretary
AHFP ACQUISITION CORPORATION
By: /s/ XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President, Treasurer and
Secretary
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Exhibit A
EXHIBIT A
TERMS OF THE REGISTRATION RIGHTS AGREEMENT
The Registration Rights Agreement shall provide the following terms and
provisions:
1. Demand Rights
Sellers and Buyer shall each have three demand registration
rights (the "Demand Rights") in respect of the common stock of
the Surviving Corporation that they own after the Closing Date
("Registrable Securities") that are exercisable commencing six
months after the date on which the Surviving Corporation
consummates its initial underwritten public offering of its
common stock (an "IPO"). The Demand Rights may only be exercised
with respect to a number of Registrable Securities that is at
least equal to the lesser of (a) Registrable Securities
representing 5% or more of the then outstanding shares of common
stock of the Surviving Corporation or (b) Registrable Securities
having an estimated aggregate offering price of at least $20
million. The Surviving Corporation may defer the filing of any
registration statement related to a Demand Right if at the time
(a) the Surviving Corporation is engaged in confidential business
activities that would be required to be disclosed in such
registration statement, (b) the Surviving Corporation is then
proceeding with fulfilling another Demand request, (c) the
Surviving Corporation is then proceeding with a registered
offering for its own account. The Demand Rights may not be
exercised within 90 days after the closing of an underwritten
public equity offering by the Surviving Corporation made on its
behalf or on behalf of any holder of Demand Rights.
2. Piggy-Back Rights
During the period ending ten years after the Closing Date,
Sellers and Buyer shall each have seven piggy-back registration
rights (the "Piggy-Back Rights") in
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respect of the Registrable Securities. The Piggy-Back Rights may
be exercised with respect to any registration statement filed
with the Securities and Exchange Commission (the "Commission") by
the Surviving Corporation with respect to its common stock
(including a registration statement filed in connection with an
IPO), other than a registration statement (i) on Form S-4 or Form
S-8 or any similar successor forms adopted by the Commission (ii)
filed in connection with an offering solely to existing security
holders of the Surviving Corporation or (iii) pursuant to an
exercise of a Demand Right. To exercise a Piggy-Back Right in
connection with an underwritten public offering, the requesting
holder of Registrable Securities must accept the terms of the
underwriting agreement between the Surviving Corporation and the
managing underwriters. If the underwriters, acting in good
faith, advise the Surviving Corporation that the total amount of
securities, including Registrable Securities, to be included in
an offering is sufficiently large to materially and adversely
affect price or likely success of such offering, then the size of
the offering shall be reduced with the securities to be included
in the offering to be allocated first to the Surviving
Corporation, and then proportionately to the holders of
Registrable Securities on the basis of Registrable Securities
owned; provided, however that if the shares proposed to be
included on behalf of the Sellers or their affiliates pursuant to
the exercise of a Demand Right is reduced by 25% or more, Sellers
shall have one additional Demand Right.
3. Lock-Ups
If requested by the Surviving Corporation or an underwriter,
Holdings and Buyer shall each agree not to effect any public sale
or distribution of Registrable Securities, including a sale
pursuant to Rule 144 under the Securities Act of 1933, during the
period beginning 20 days before and ending not later than 120
days after the effective date of any registration statement filed
by the Surviving Corporation, except as part of such registration
statement.
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4. Expenses
The Surviving Corporation will pay all expenses (including out-
of-pocket expenses of the holders of Registrable Securities)
associated with a registered offering except for underwriting
fees, discounts or commissions attributable to Registrable
Securities.
5. Miscellaneous
The agreement will contain other provisions customary in
registration rights agreements, including provisions regarding
indemnification against claims arising out of or based upon any
untrue statement in or omission from a registration statement and
provisions for cooperation in connection with affecting any
offering contemplated by the agreement. The Agreement will also
provide that rights thereunder may be assigned to any purchaser
of the Registrable Securities that enters into a counterpart of
such agreement and that Buyer and its Affiliates shall not
receive any registration rights in addition to those granted to
Sellers pursuant to this Agreement.
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EXHIBIT B
TERMS OF THE TRANSITION SERVICES AGREEMENT
The Transition Services Agreement shall provide the following terms and
provisions.
1. Facilities and Related Services
During the period ending six months after the Closing Date, to
the extent requested by the Buyer, AHP and its Affiliates shall
agree to provide to the Surviving Corporation and its Affiliates
the use of the space currently used and occupied by Surviving
Corporation at 0 Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx, and services
incidental thereto, including telecommunication, mail, courier,
shipping, receiving, security, utilities, maintenance, parking
and janitorial services, all of the foregoing to the extent
provided before the Closing Date. These facilities and services
will be provided for $75,000 per month.
2. Legal Services Related to Intellectual Property
During the period ending six months after the Closing Date, to
the extent requested by the Buyer, AHP and its Affiliates shall
provide to the Surviving Corporation and its Affiliates legal
services related to the establishment and maintenance of their
intellectual property rights to the same extent provided before
the Closing Date. These services will be provided at Sellers'
cost.
3. Marketing and Advertising Services
During the period ending six months after the Closing Date, to
the extent requested by the Buyer, AHP and its Affiliates shall
provide to the Surviving Corporation and its Affiliates services
related to the purchasing of marketing and advertising services
in both the electronic and print media. These services will be
provided at the historical allocated cost.
4. Prior to Closing, AHP will assist the Buyer in setting up Buyer's
Welfare Plans with the Surviving Corporation
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and the Companies as the sponsor(s) thereof. In addition, AHP
shall for a period of up to 90 days assist in the administration
of such plans and will receive compensation for services provided
and reimbursement for any actual out of pocket costs associated
with the administration and maintenances of such plans (all
calculated in accordance with past practices.)
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