PURCHASE AGREEMENT BY AND AMONG KARL J. BREYER, MARSHALL E. EISENBERG AND THOMAS J. PRITZKER NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEES, GP INVESTOR, L.L.C., REYNOLDS AMERICAN INC. AND PINCH ACQUISITION CORPORATION DATED AS OF April 24, 2006
NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEES,
ARTICLE I — DEFINITIONS | 2 | |||||||
Section 1.1 | Definitions |
2 | ||||||
Section 1.2 | Cross Reference |
12 | ||||||
ARTICLE II — THE CLOSING TRANSACTIONS | 14 | |||||||
Section 2.1 | Purchase of Shares |
14 | ||||||
Section 2.2 | Preliminary Transactions |
14 | ||||||
Section 2.3 | Closing Transactions |
15 | ||||||
ARTICLE III — CONDITIONS TO CLOSING | 16 | |||||||
Section 3.1 | Conditions to the Purchaser’s Obligations |
16 | ||||||
Section 3.2 | Conditions to Sellers’ Obligations |
19 | ||||||
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF SELLERS | 20 | |||||||
Section 4.1 | Ownership of Shares |
21 | ||||||
Section 4.2 | Authority and Binding Effect |
21 | ||||||
Section 4.3 | Organization of the Company |
21 | ||||||
Section 4.4 | Capitalization; Ownership of Company Shares |
22 | ||||||
Section 4.5 | Acquired Companies |
23 | ||||||
Section 4.6 | No Violations |
24 | ||||||
Section 4.7 | Consents and Approvals |
24 | ||||||
Section 4.8 | Financial Statements; Books and Records |
25 | ||||||
Section 4.9 | Absence of Changes |
27 | ||||||
Section 4.10 | Title to Assets; Real Property and Related Matters |
30 | ||||||
Section 4.11 | Litigation. |
32 | ||||||
Section 4.12 | Compliance With Law; Permits |
33 | ||||||
Section 4.13 | Environmental Matters |
33 | ||||||
Section 4.14 | Brokers and Finders |
34 | ||||||
Section 4.15 | Contracts |
34 | ||||||
Section 4.16 | Intellectual Property |
37 | ||||||
Section 4.17 | Tax Matters |
39 | ||||||
Section 4.18 | Employee Benefit Plans |
41 |
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Section 4.19 | Insurance |
47 | ||||||
Section 4.20 | Transactions with Directors, Officers and Affiliates |
47 | ||||||
Section 4.21 | Inventory |
47 | ||||||
Section 4.22 | Labor and Employment. |
48 | ||||||
Section 4.23 | Customers and Suppliers |
48 | ||||||
ARTICLE V — REPRESENTATIONS AND WARRANTIES OF PURCHASER | 48 | |||||||
Section 5.1 | Organization |
48 | ||||||
Section 5.2 | Authority and Binding Effect |
49 | ||||||
Section 5.3 | No Violations |
49 | ||||||
Section 5.4 | Consents and Approvals |
50 | ||||||
Section 5.5 | Brokers and Finders |
50 | ||||||
Section 5.6 | Absence of Proceedings |
50 | ||||||
Section 5.7 | Capital Resources |
50 | ||||||
Section 5.8 | Non-Reliance |
51 | ||||||
ARTICLE VI — COVENANTS BEFORE CLOSING | 52 | |||||||
Section 6.1 | Affirmative Pre-Closing Covenants of Sellers |
52 | ||||||
Section 6.2 | Negative Pre-Closing Covenants of Sellers |
52 | ||||||
Section 6.3 | Cooperation; Consents |
53 | ||||||
Section 6.4 | Access |
54 | ||||||
Section 6.5 | Intercompany Accounts, Affiliate Agreements |
55 | ||||||
Section 6.6 | 55 | |||||||
Section 6.7 | Confidentiality Matters |
56 | ||||||
Section 6.8 | Letter Ruling |
57 | ||||||
ARTICLE VII — GENERAL COVENANTS | 57 | |||||||
Section 7.1 | Employee Benefits |
57 | ||||||
Section 7.2 | Directors’, Managers’ and Officers’ Indemnification; Release from Liability |
62 | ||||||
Section 7.3 | Notice of Certain Matters |
65 | ||||||
Section 7.4 | Publicity |
65 | ||||||
Section 7.5 | Post-Closing Access |
66 |
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Section 7.6 | Agreement Not to Compete |
66 | ||||||
Section 7.7 | Closing Net Working Capital |
68 | ||||||
Section 7.8 | Insurance Proceeds |
68 | ||||||
Section 7.9 | Performance Guarantee |
68 | ||||||
ARTICLE VIII — TERMINATION | 69 | |||||||
Section 8.1 | Termination |
69 | ||||||
Section 8.2 | Effect of Termination |
70 | ||||||
ARTICLE IX — TAX MATTERS | 70 | |||||||
Section 9.1 | Prohibited Tax Election |
70 | ||||||
Section 9.2 | Tax Returns |
70 | ||||||
Section 9.3 | Tax Cooperation |
71 | ||||||
Section 9.4 | Tax Indemnification. |
72 | ||||||
Section 9.5 | Procedures Relating to Indemnification of Tax Claims |
74 | ||||||
Section 9.6 | Coordination With Article X |
76 | ||||||
Section 9.7 | Transfer Taxes |
76 | ||||||
ARTICLE X — INDEMNIFICATION | 76 | |||||||
Section 10.1 | Survival of Representations and Warranties and Covenants |
76 | ||||||
Section 10.2 | Obligation to Indemnify |
77 | ||||||
Section 10.3 | Claims Notice |
83 | ||||||
Section 10.4 | Right to Contest Claims of Third Parties |
83 | ||||||
Section 10.5 | Indemnification Payments |
84 | ||||||
Section 10.6 | Satisfaction of Remainco Indemnification Obligations |
85 | ||||||
Section 10.7 | Exclusivity |
85 | ||||||
ARTICLE XI — MISCELLANEOUS | 85 | |||||||
Section 11.1 | Notices |
85 | ||||||
Section 11.2 | Applicable Law |
86 | ||||||
Section 11.3 | Consent to Jurisdiction; Venue |
86 | ||||||
Section 11.4 | Waiver of Jury Trial |
86 | ||||||
Section 11.5 | Attorneys’ Fees |
87 | ||||||
Section 11.6 | Transaction Expenses |
87 |
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Section 11.7 | Entire Agreement |
87 | ||||||
Section 11.8 | Waivers and Amendments; Non Contractual Remedies; Preservation of Remedies |
87 | ||||||
Section 11.9 | Severability |
87 | ||||||
Section 11.10 | Binding Effect; Assignment |
88 | ||||||
Section 11.11 | Interpretation |
88 | ||||||
Section 11.12 | No Third Party Beneficiaries |
89 | ||||||
Section 11.13 | Trustee Exculpation |
89 | ||||||
Section 11.14 | Counterparts |
89 | ||||||
Section 11.15 | Headings |
89 | ||||||
Section 11.16 | Available Remedies |
89 |
Exhibits and Schedules | ||||
Exhibit
|
A | Asworth Accounting Procedures and Sample Statement of Net Working Capital | ||
Exhibit
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B | Escrow Agreement | ||
Exhibit
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C | Joinder Agreement | ||
Schedule
|
1 | Trusts | ||
Schedule
|
2 | Preliminary Transactions | ||
Schedule
|
3 | Acquired Companies | ||
Schedule
|
1.1(i) | Excluded Assets | ||
Schedule
|
1.1(ii) | Excluded Liabilities | ||
Schedule
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1.1(iii) | Knowledge of the Purchaser | ||
Schedule
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1.1(iv) | Knowledge of Sellers | ||
Schedule
|
1.1(v) | Non-Tobacco Employees | ||
Schedule
|
2.1 | Purchase of Shares | ||
Schedule
|
3.1(j) | Phase I Environmental Site Assessments | ||
Schedule
|
4.4(a) | Capital Interests of Old Asworth Corporation |
||
Schedule
|
4.4(b) | Capital Interests of New Asworth Corporation | ||
Schedule
|
4.5 | Acquired Companies | ||
Schedule
|
4.6 | No Violations | ||
Schedule
|
4.7 | Consents and Approvals | ||
Schedule
|
4.8(b) | Financial Statements | ||
Schedule
|
4.8(c) | Liabilities | ||
Schedule
|
4.8(f) | Indebtedness | ||
Schedule
|
4.9 | Absence of Changes | ||
Schedule
|
4.10(a) | Title to Assets | ||
Schedule
|
4.10(b) | Leased Real Property |
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Schedule
|
4.10(c) | Owned Real Property | ||
Schedule
|
4.10(e) | Leases, Easements, Contracts and Licenses | ||
Schedule
|
4.11 | Litigation | ||
Schedule
|
4.12 | Permits | ||
Schedule
|
4.13 | Environmental Matters | ||
Schedule
|
4.15 | Scheduled Contracts | ||
Schedule
|
4.15(a)(xi) | Loans and Advances | ||
Schedule
|
4.16(a) | Intellectual Property | ||
Schedule
|
4.16(b) | Licensed Intellectual Property | ||
Schedule
|
4.17 | Tax Matters | ||
Schedule
|
4.18(a) | Employee Benefit Plans | ||
Schedule
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4.18(b) | Noncompliance with Employee Benefit Plans | ||
Schedule
|
4.18(d) | Benefit Obligations for Employee Benefit Plans | ||
Schedule
|
4.18(f) | IRS Determination Letters | ||
Schedule
|
4.18(g) | Multiemployer Plan or “Defined Benefit Plan” | ||
Schedule
|
4.18(h) | Post-Employment Health or Life Benefits | ||
Schedule
|
4.18(j) | Retroactive Rate Adjustment | ||
Schedule
|
4.18(l) | Agreed Upon Employee Plans | ||
Schedule
|
4.19 | Insurance | ||
Schedule
|
4.20 | Related Party Transactions | ||
Schedule
|
4.23 | Customers and Suppliers | ||
Schedule
|
6.1 | Affirmative Pre-Closing Covenants of Sellers | ||
Schedule
|
6.2 | Negative Pre-Closing Covenants of Sellers | ||
Schedule
|
6.5 | Intercompany Accounts | ||
Schedule
|
7.1(b) | Defined Benefit Pension Plans | ||
Schedule
|
7.1(d) | Welfare Benefit Plans | ||
Schedule
|
7.1(f)(i) | Management Incentive Plans | ||
Schedule
|
7.1(f)(ii) | Sales Incentive Plans | ||
Schedule
|
7.1(g) | Key Employee Bonus Policy | ||
Schedule
|
7.1(h) | Post-Retirement Welfare Benefits for Retirees and Beneficiaries | ||
Schedule
|
7.1(j) | Deferred Compensation Plans | ||
Schedule
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7.2(b) | D&O Released Parties | ||
Schedule
|
10.6 | Remainco Covenants |
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3
4
5
6
7
8
9
10
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Term | Section | |
Acquired Companies
|
Recitals | |
Applied For and Registered Intellectual
Property
|
4.16(a) | |
Audited Financial Statements
|
4.8(a)(i) | |
Benefit Protection Period
|
7.1(b) | |
Budget
|
4.9(a) | |
Claims Notice
|
10.3 | |
Closing
|
2.3(a) | |
Closing Date
|
2.3(a) | |
Commitment Letter
|
5.7 | |
Company Employees
|
7.1(a) | |
Conwood Companies
|
4.8(a)(i) | |
Debt Financing
|
5.7 | |
Disclosure Schedules
|
Article IV | |
D&O Indemnitees
|
7.2(a) | |
D&O Indemnitors
|
7.2(a) | |
D&O Released Parties
|
7.2(b) | |
Employee Benefits Liability
|
4.18(o) | |
Extended Survival Period
|
10.1(b) | |
Financial Statements
|
4.8(a)(ii) | |
General Survival Period
|
10.1(c) | |
HSR Act
|
3.1(c) | |
Improvements
|
4.10(h) | |
Indemnified Party
|
10.3 |
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Term | Section | |
Indemnifying Party
|
10.3 | |
Latest Balance Sheet
|
4.8(a)(i) | |
Letter Ruling
|
3.1(k) | |
Licensed Intellectual Property
|
4.16(b) | |
LLC Seller
|
Introduction | |
Merger
|
Recitals | |
MSA
|
Article IV | |
New Asworth
|
Recitals | |
Non-Competition Area
|
7.6(a)(i) | |
Old Asworth
|
Recitals | |
Outside Date
|
8.1(b) | |
Owned Real Property
|
4.10(c) | |
Parent
|
Introduction | |
Party/Parties
|
Introduction | |
Per Diem Taxes
|
9.4(c)(i) | |
Plans
|
4.18(a) | |
Preliminary Transactions
|
Recitals | |
Proceeding
|
4.11(a) | |
Purchase Price
|
2.1 | |
Purchaser
|
Introduction | |
Purchaser Indemnitees
|
10.2(a) | |
Purchaser Taxes
|
9.4(a) | |
Releasing Parties
|
7.2(b) | |
Remainco
|
Recitals | |
Retirees
|
7.1(h) | |
Scheduled Consents
|
4.7 | |
Scheduled Contracts
|
4.15(a) | |
Seller Indemnitees
|
10.2(c) | |
Seller Retiree Welfare Benefits
|
7.1(h) | |
Sellers
|
Introduction | |
Severance Plans
|
7.1(e) | |
Shares
|
Recitals | |
Survival Period
|
10.1(c) | |
Survival Periods
|
10.1(c) | |
Tax Claim
|
9.5(a) | |
Third Party Claim
|
10.4(a) | |
Third Party Claimant
|
10.4(a) | |
Threshold
|
10.2(d) | |
Transfer Taxes
|
9.7 | |
Trusts
|
Introduction | |
Unaudited Financial Statements
|
4.8(a)(ii) |
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a. | Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, commencing at 10:00 a.m. on the third Business Day following the satisfaction or waiver of all conditions to the obligations of the applicable Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself), or at such other place or time or on such other date as may be mutually agreed in writing by the Purchaser and the Trust Sellers. The date and time of the Closing are herein referred to as the “Closing Date.” | ||
b. | Closing Transactions. At the Closing: |
i. | Sellers shall deliver to the Purchaser, free and clear of any Liens, certificates representing the Shares, duly endorsed in blank or accompanied by stock powers, duly executed in blank, and bearing or accompanied by all requisite stock transfer stamps; | ||
ii. | the Purchaser shall pay an aggregate amount equal to the Purchase Price, less the Escrow Amount, in cash in the amounts set forth opposite each Shareholder’s name on Schedule 2.1 by wire transfer of immediately available funds to such bank account(s) as Sellers shall designate in writing at least five (5) Business Days prior to the Closing Date; | ||
iii. | the Purchaser shall deliver to the Escrow Agent the Escrow Amount, in cash by wire transfer of immediately available funds to the account designated by the Escrow Agent, to be held and disbursed in accordance with the Escrow Agreement; and | ||
iv. | each Party shall deliver the certificates and other documents and instruments required to be |
15
delivered by or on behalf of such Party under Article III. |
a. | The representations and warranties set forth in Article IV shall be true and correct at and as of the Closing Date as though then made (other than such representations and warranties that specifically relate to a specific date, which need only be true and correct as of such date), without giving effect to any schedule updates thereto pursuant to Section 7.3, except in all cases where the failure to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect”) would not reasonably be expected to have a Material Adverse Effect; | ||
x. | Xxxxxxx shall have performed and complied in all material respects with all of the covenants and agreements required to be performed by them under this Agreement on or before the Closing; | ||
c. | All Governmental Consents that are required for the consummation of the transactions contemplated hereby shall have been duly sought and obtained (and, without limiting the generality of the foregoing, all applicable waiting periods (and any extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the “HSR Act”), shall have expired or otherwise been terminated); | ||
d. | There shall be no Applicable Law or final, nonappealable order of any Governmental Authority or arbitral body of competent jurisdiction that is in effect that prohibits the consummation of any of the transactions contemplated hereby; | ||
e. | Except as otherwise specified in writing by the Purchaser to Sellers prior to the Closing Date, all of the directors and officers of New Asworth and each Acquired Company shall have resigned from such |
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positions and such resignations shall be effective as of the Closing Date; | |||
f. | On or before the Closing Date, Sellers shall have delivered to the Purchaser all of the following: |
i. | a certificate from the Trust Sellers, on behalf of the Sellers, in a form reasonably satisfactory to the Purchaser, dated the Closing Date, stating that the conditions specified in Sections 3.1(a), (b) and (g) have been satisfied; | ||
ii. | a copy of the resolutions or other evidence of action of Sellers approving the transactions contemplated by this Agreement to be performed by Sellers; | ||
iii. | all minute books, stock books, ledgers and registers, corporate seals and other corporate records relating to the organization, ownership and maintenance of New Asworth and each Acquired Company; | ||
iv. | copies of the Governmental Consents described in Section 3.1(c) to the extent applicable to New Asworth, any Acquired Company and/or the Business; | ||
v. | copies of the resignations described in Section 3.1(f); | ||
vi. | such other documents or instruments as the Purchaser may reasonably request to effect the transactions contemplated hereby; and | ||
vii. | releases of the Purchaser, in a form reasonably acceptable to Sellers and the Purchaser, executed by each Seller; |
g. | The Preliminary Transactions, as described on Schedule 2, shall have been effected in all material respects in accordance with Section 2.2; | ||
x. | Xxxxxxx and the Escrow Agent shall have entered into and delivered to the Purchaser the Escrow Agreement; | ||
i. | Remainco shall have entered into a joinder agreement, in substantially the form attached as Exhibit C |
17
hereto, pursuant to which Remainco shall agree to become a party to this Agreement for the purposes set forth in Articles IX and X hereof; | |||
j. | The Purchaser (at the Purchaser’s sole cost) shall have received Phase I and, to the extent applicable, Phase II Environmental Site Assessments for each location identified on Schedule 3.1(j), performed in accordance with the provisions of Section 6.4. Such Phase I and Phase II Environmental Site Assessments shall be reasonably satisfactory to the Purchaser. For purposes of this Section 3.1(j), the Phase I and Phase II Environmental Site Assessments shall be deemed “reasonably satisfactory” to the Purchaser unless they identify Recognized Environmental Conditions (as defined in the ASTM standard specified in Section 6.4): (i) constituting, or reasonably likely, individually or in the aggregate, to result in, a Material Adverse Effect, or (ii) that constitute current or former hazardous waste (as defined by the Resource Conservation and Recovery Act, as amended, 42 U.S.C., § 6901 et seq.) disposal sites or pesticide (as defined by the Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C., § 136 et seq.) formulation, blending, mixing, storing or manufacturing operations that are reasonably likely, individually or in the aggregate, under subparagraph (a) of the definition of Remedial Action, to have a Remedial Action cost in excess of $10 million, as reasonably estimated by the Purchaser’s consultants who performed the Phase I and II work, taking into consideration the qualifications and limitations set forth in Section 10.2(k); provided, however, the Purchaser will waive the condition in this Section 3.1(j)(ii) upon Sellers’ adjustment of the Purchase Price in an appropriate amount based on the good faith estimate by the Purchaser’s consultants, after discussion with Sellers, of the reasonable cost of the Remedial Action; and | ||
k. | Old Asworth shall have received a letter ruling (the “Letter Ruling”) from the IRS, in form and substance reasonably satisfactory to the Purchaser, granting the rulings requested in Old Asworth’s ruling request dated March 31, 2006. |
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a. | The representations and warranties set forth in Article V shall be true and correct in all material respects (except that the representations and warranties which are qualified as to “materiality” shall be true and correct) at and as of the Closing Date as though then made (other than such representations and warranties that specifically relate to a specific date, which need only be true and correct in all material respects as of such date); | ||
b. | The Purchaser shall have performed and complied in all material respects with all of the covenants and agreements required to be performed by it under this Agreement on or before the Closing; | ||
c. | All Governmental Consents that are required for the consummation of the transactions contemplated hereby shall have been duly sought and obtained (and, without limiting the generality of the foregoing, all applicable waiting periods (and any extensions thereof) under the HSR Act shall have expired or otherwise been terminated); | ||
d. | There shall be no Applicable Law or final, nonappealable order of any Governmental Authority or arbitral body of competent jurisdiction that is in effect that prohibits the consummation of any of the transactions contemplated hereby; | ||
e. | On or before the Closing Date, the Purchaser shall have delivered to the Trust Sellers, on behalf of the Sellers, all of the following: |
i. | a certificate from the Purchaser in a form reasonably satisfactory to the Trust Sellers, on behalf of the Sellers, dated the Closing Date, stating that the conditions specified in Sections 3.2(a) and (b) have been satisfied; | ||
ii. | a copy of the resolutions of the board of directors, board of managers or other governing body, as applicable, of the Purchaser approving |
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the transactions contemplated by this Agreement to be performed by the Purchaser; | |||
iii. | copies of the Governmental Consents described in Section 3.2(c) to the extent applicable to the Purchaser; and | ||
iv. | such other documents or instruments as Sellers may reasonably request to effect the transactions contemplated hereby; |
f. | The Purchaser and the Escrow Agent shall have entered into and delivered to Sellers the Escrow Agreement; and | ||
g. | Old Asworth shall have received a Letter Ruling from the IRS, in form and substance reasonably satisfactory to Sellers, granting the rulings requested in Old Asworth’s ruling request dated March 31, 2006. |
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a. | As of the date hereof, Old Asworth is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to own its properties and through the Acquired Companies to carry on the Business as it is now being conducted, and Old Asworth is duly licensed or qualified to do business and is in good standing as a foreign corporation in |
21
each jurisdiction in which the nature of the Business or ownership of its properties makes such qualification necessary, except where the failure to have such power or authority, to be in good standing or to be duly qualified to transact business would not reasonably be expected to have a Material Adverse Effect. Sellers have made available to the Purchaser correct and complete copies of Old Asworth’s articles of incorporation and by-laws, which documents reflect all amendments made thereto at any time on or prior to the date hereof. As of the date hereof, Old Asworth is not in default under or in violation of any provision of its certificate of incorporation or by-laws. | |||
b. | As of immediately following consummation of the Preliminary Transactions and as of the Closing Date, New Asworth shall be a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and shall have all requisite corporate power and authority to own its properties and through the Acquired Companies to carry on the Business as it is now being conducted, and New Asworth shall be duly licensed or qualified to do business and in good standing as a foreign corporation in each jurisdiction in which the nature of the Business or ownership of its properties makes such qualification necessary, except where the failure to have such power or authority, to be in good standing or to be duly qualified to transact business would not reasonably be expected to have a Material Adverse Effect. As of the Closing Date and as of immediately following consummation of the Preliminary Transactions, New Asworth shall not be in default under or in violation of any provision of its certificate of incorporation or by-laws. New Asworth will be formed by Sellers solely for the purpose of engaging in the transactions contemplated hereby. As of immediately following consummation of the Preliminary Transactions and as of the Closing Date, except as contemplated hereby, the capital stock of New Asworth will be owned 100% by Sellers. |
a. | The authorized and issued Capital Interests of Old Asworth as of the date hereof are set forth on Schedule 4.4(a). As of the date hereof, all of the |
22
issued and outstanding Capital Interests of Old Asworth have been duly authorized, validly issued and are fully paid, nonassessable and free of preemptive rights. | |||
b. | The authorized and issued Capital Interests of New Asworth as of the Closing and as of immediately following consummation of the Preliminary Transactions shall be as set forth on Schedule 4.4(b). At the Closing, the Shares will constitute all of the issued and outstanding Capital Interests of New Asworth. At the Closing, all of the issued and outstanding Shares shall have been duly authorized, validly issued and shall be fully paid, nonassessable and free of preemptive rights. Except for this Agreement and the transactions contemplated hereby, at the Closing, there will be no outstanding options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require New Asworth to issue, sell, or otherwise cause to become outstanding any Capital Interests of New Asworth. At the Closing, there will be no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to New Asworth. |
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a. | Sellers have made available to the Purchaser: |
i. | the audited combined balance sheets of Conwood Company, L.P., Conwood Sales Company, L.P., Rosswil, LLC and Xxxxx Tobacco, LLC (collectively, the “Conwood Companies”) as of December 31, 2005, 2004 and 2003, and the related combined statements of income, stockholders’ equity and cash flows for the years then ended (collectively, the “Audited Financial Statements”). The audited combined balance sheet of the Conwood Companies as of December 31, 2005 shall be referred to as the “Latest Balance Sheet”; and | ||
ii. | the unaudited combined balance sheets of the Conwood Companies as of March 31, 2006, and the related combined statements of income, stockholders’ equity and cash flows for the three-month period then ended (collectively, the “Unaudited Financial Statements”). The Unaudited Financial Statements and the Audited Financial Statements are collectively referred to herein as the “Financial Statements.” |
b. | Except as set forth on Schedule 4.8(b), each Financial Statement has been prepared in accordance with GAAP consistently applied throughout the periods covered by such Financial Statement(except for any changes in application set forth in the notes to any such Financial Statement), and presents fairly, in all material respects, the consolidated or combined financial position of the subject company or companies as of such dates and the results of operations and cash flows for the respective periods then ended, as applicable, subject to, in the case of the Unaudited Financial Statements, the absence of notes and schedules and normal year end adjustments. |
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c. | Except for the Excluded Liabilities, New Asworth and the Acquired Companies do not have any Liabilities required by GAAP to be reflected on a balance sheet except: (i) Liabilities reflected or reserved against on the Latest Balance Sheet; (ii) Liabilities which have arisen after the date of the Latest Balance Sheet in the Ordinary Course of Business or otherwise incurred in connection with the transactions contemplated by this Agreement; (iii) Liabilities disclosed as such elsewhere in this Agreement or the Disclosure Schedules and/or Exhibits hereto (including on Schedule 4.8(c)); and (iv) Liabilities that would not reasonably be expected to have a Material Adverse Effect. As of immediately following consummation of the Preliminary Transactions and as of the Closing Date, except for obligations or Liabilities incurred in connection with its formation and the transactions contemplated thereby and hereby, including without limitation, the Preliminary Transactions, New Asworth will not have incurred, directly or indirectly through any Affiliate, any obligations or Liabilities or engaged in any business or activities of any type or kinds whatsoever or entered into any arrangements with any Person. Sellers will take all action necessary to ensure that New Asworth does not at any time prior to the Closing Date own any asset other than the Capital Interests in (i) the Acquired Companies that were transferred to New Asworth in connection with consummation of the Preliminary Transactions or (ii) Remainco. | ||
d. | Except as disclosed therein, the Financial Statements have been prepared from the books, records and accounts of the Company and each Acquired Company. The books, records and accounts of the Company and each Acquired Company (i) have been maintained in accordance with reasonable business practices, and (ii) fairly reflect in all material respects the transactions related to the assets and properties of the Company and each Acquired Company. | ||
e. | The Company and each Acquired Company have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary (x) to |
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permit preparation of financial statements in accordance with GAAP or any other criteria applicable prior to the Closing Date to such statements and (y) to maintain accountability for assets; and (iii) the amount recorded for assets on the Company’s and each Acquired Company’s books and records is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. To the Knowledge of Sellers, during the past three (3) years, there has not been any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s or any Acquired Company’s internal controls. | |||
f. | As of the Closing Date, neither the Company nor any Acquired Company will have any Indebtedness other than as set forth on Schedule 4.8(f). |
a. | commenced or entered into arrangements for capital expenditures in excess of $1,000,000 individually, or $5,000,000 in the aggregate, that were not in the budget of the Business previously made available to the Purchaser (the “Budget”); | ||
b. | disposed of any capital assets that had a book value or fair market value in excess of $1,000,000 individually, or $5,000,000 in the aggregate, or incurred, created or assumed any Lien on any capital asset(s) with a book value or fair market value in excess of $1,000,000 individually, or $5,000,000 in the aggregate, other than Permitted Liens; |
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c. | entered into any Contract (other than raw material, supply or procurement Contracts entered into in the Ordinary Course of Business) that involves the payment of in excess of $1,000,000 per year, or $5,000,000 over the life of the contract, or incurred or guaranteed any Indebtedness in excess of $1,000,000; | ||
d. | increased the salary, wage, compensation and benefits, commission, bonus or other direct or indirect remuneration payable to, or other compensation of, any employees, officers or directors of the Company or any Acquired Company or entered into any Contract in respect of any such increase (except for increases as may be required by (i) written agreements existing and in effect on the date hereof, copies of which have been made available to Purchaser, (ii) Applicable Law or (iii) salary or wage increases granted in the Ordinary Course of Business), amended, adopted or terminated any material employment agreement, retention agreement, severance agreement or similar agreement or any Plan, entered into any collective bargaining agreement covering the Company or any Acquired Company’s employees or granted any equity or equity-based awards or any severance or termination pay to any current or former directors, officers or employees; | ||
e. | amended in any material respect any Scheduled Contract that would materially and adversely affect the use and enjoyment thereof by the Purchaser, terminated any Scheduled Contract other than pursuant to its terms or defaulted in the performance of any covenant or obligation thereunder which default was not cured within any applicable grace period; | ||
f. | made any material change in any accounting principle, practice, policy or method, other than as required by GAAP or any Applicable Law; | ||
g. | merged with or into or consolidated with any other Person or acquired any business or assets (other than inventory) of any other Person; | ||
h. | amended its articles of incorporation, by-laws or similar organizational documents; |
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i. | purchased or entered into any other agreement or obligation to purchase any Capital Interests in any Person; | ||
j. | issued or sold any Capital Interests; | ||
k. | made any material elections with respect to Taxes of the Business (other than with respect to an Excluded Asset or Excluded Liability), or entered into any settlement or compromise regarding any material Tax Liability or refund of the Business (other than with respect to an Excluded Asset or Excluded Liability), or taken any other action with respect to Taxes that would reasonably be expected to have a Material Adverse Effect; | ||
l. | experienced any damage, destruction or other casualty loss (whether or not covered by insurance) materially affecting the Business; | ||
m. | made any payments of cash or property to or on behalf of any officer, employee or director of the Company or any of the Acquired Companies or any of their respective Affiliates or family members other than salary and expense reimbursements reflected in the Financial Statements or made since the date of the Latest Balance Sheet in the Ordinary Course of Business; | ||
n. | compromised, paid, settled, discharged, released, waived or satisfied any material claim, Liability, obligation or Proceeding, except for such of the foregoing not in excess of $500,000 in the aggregate; | ||
o. | waived or relinquished any material rights, claims or authority, or given any material consents to action or inaction, under any Scheduled Contract; | ||
p. | made any material changes to its practices relating to the collection of accounts receivable, acquisition or disposition of inventory or payment of accounts payable; or | ||
q. | agreed or committed to do any of the foregoing. |
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a. | Except as set forth on Schedule 4.10(a) or for any exceptions which would not reasonably be expected to have a Material Adverse Effect, the Company and the Acquired Companies have good and valid title to, or a valid right to use, the assets of the Business to be acquired pursuant to this Agreement, free and clear of all Liens other than Permitted Liens. | ||
b. | Schedule 4.10(b) lists all Leased Real Property. The Company or an Acquired Company holds good and valid leasehold title to the Leased Real Property, in each case, in accordance with the provisions of the applicable Real Property Lease and free and clear of all Liens, except for Permitted Liens. Other than such exceptions as would not reasonably be expected to have a Material Adverse Effect, and except as set forth on Schedule 4.10(b): (i) all of the Real Property Leases to which the Company and/or any Acquired Company is a party are in full force and effect and grant the leasehold estates or rights of occupancy or use they purport to grant; (ii) to the Knowledge of Sellers, the occupancy by the Company or an Acquired Company under each Real Property Lease is in compliance with all Applicable Laws relating to such occupancy; and (iii) to the Knowledge of Sellers, there are no pending or threatened condemnation or other Proceedings with respect to the Leased Real Property. Except as identified on Schedule 4.10(b) or for such occurrences or defaults that would not reasonably be expected to have a Material Adverse Effect, there are no existing defaults on the part of the Company or any Acquired Company or, to the Knowledge of Sellers, any other party under any Real Property Lease, and no event has occurred which, with notice, lapse of time or both, would constitute a default on the part of the Company or any Acquired Company or, to the Knowledge of Sellers, any other party under any Real Property Lease. Neither the Company nor any Acquired Company has sublet, assigned, licensed or otherwise conveyed any rights in the material Leased Real Property to any other Person. | ||
c. | Schedule 4.10(c) lists all real property (other than Excluded Assets) owned by the Company or any Acquired Company (the “Owned Real Property”). Either the |
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Company or an Acquired Company holds good and valid title to the Owned Real Property free and clear of all Liens, except for Permitted Liens. There are no leases, subleases, licenses, concessions, or other agreements granting to any third party or parties the right of use or occupancy of any portion of the Owned Real Property. There are no outstanding options, contracts to sell, transfer or otherwise dispose of, rights of first refusal or other agreements to purchase the Owned Real Property, or any portion thereof or interest therein. To the Knowledge of Sellers, the Owned Real Property and all buildings and structures located thereon and the conduct of the Business presently conducted at the Owned Real Property are in compliance with, and the use thereof in the manner in which currently used is not adversely affected by, any Applicable Law and no notifications alleging any such violation have been received, other than such non-compliance, violations or circumstances which would not be reasonably expected to have a Material Adverse Effect. To the Knowledge of Sellers, there are no condemnation or other similar Proceedings pending or threatened with respect to the Owned Real Property. | |||
d. | The assets of the Business listed on the Latest Balance Sheet and otherwise owned or leased by the Company or any Acquired Company and those acquired thereafter are sufficient in all material respects to operate the Business in the manner heretofore operated. Since December 31, 2005, no asset, other than cash, that is necessary for the operation of the Business in the Ordinary Course of Business, or for any planned expansion or projected growth of the Business, was transferred out of the Company or any Acquired Company except for the Excluded Assets and otherwise in connection with the Preliminary Transactions. | ||
e. | The operation of the Business in the Ordinary Course of Business as is now conducted is not dependent upon the right to use the property of Persons other than the Company or any Acquired Company except such property as is leased, covered by an easement, license or other contract or agreement for the use thereof, which leases, easements, contracts, agreements and |
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licenses, to the extent material, are listed on Schedule 4.10(e). | |||
f. | All tangible personal property of the Company and each of the Acquired Companies is usable, subject to normal wear and tear, except for such personal property the failure to be in such condition would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. | ||
g. | None of the Acquired Companies is conducting or has conducted or engaged in any business other than the Business. None of the Company or any of its subsidiaries or Affiliates other than the Acquired Companies is or was engaged in the business of researching, developing, manufacturing, selling, distributing, advertising and marketing smokeless tobacco products. None of Sellers, the Company or any of its or their subsidiaries or Affiliates other than the Acquired Companies owns or has rights to use the assets or properties necessary for the operation of the Business in the Ordinary Course of Business. | ||
h. | To the Knowledge of Sellers, all material buildings, structures, improvements, fixtures, building systems and equipment, and all components thereof, included in the Owned Real Property identified on Schedule 4.10(c) (the “Improvements”) are sufficient for the operation of the Business as currently conducted. To the Knowledge of Sellers, there are no facts or conditions affecting any of the Improvements which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. |
a. | Except as set forth on Schedule 4.11 and except for matters that are the subject of the representations or warranties in Sections 4.10, 4.13, 4.16, 4.17, 4.18 and 4.22, as of the date hereof, to the Knowledge of Sellers, there is no action, claim, suit, arbitration or legal, administrative or other proceeding (a “Proceeding”) pending or threatened, whether by or before any Governmental Authority, against Sellers, the Company and/or any Acquired Company other than any Proceeding (i) related to the Non-Tobacco Business, an Excluded Asset or an Excluded Liability; or (ii) that |
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would not reasonably be expected to have a Material Adverse Effect. | |||
b. | To the Knowledge of the Sellers, the Company and the Acquired Companies, and the assets, business or property of each, are not subject to any judgment, order, decree or settlement made or entered into in respect of any lawsuit or Proceeding which would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. |
a. | Each of the Company and each of the Acquired Companies has (i) complied with, and is in compliance in all material respects with, all applicable Environmental and Safety Requirements and (ii) obtained and complied with and currently possesses and is in compliance in all respects with all Permits which are required under all applicable Environmental and Safety Requirements for the current operation of the Business, in each case except for such noncompliance that would not reasonably be expected to have a Material Adverse Effect. |
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b. | Neither the Company nor the Acquired Companies, is subject to any pending Environmental Claim and to the Knowledge of Sellers, no such Environmental Claim is threatened against the Company or any Acquired Company. | ||
c. | There are no past or present actions, activities, circumstances, conditions, events or incidents, including the Release or threatened Release of any Hazardous Substances, that would reasonably be expected to form the basis of any Environmental Claim against the Company or any Acquired Company, or against any Person or entity whose Liability for any Environmental Claim the Company or any Acquired Company has retained or assumed either contractually or by operation of Applicable Law, except for such Environmental Claim that would not reasonably be expected to have a Material Adverse Effect. | ||
d. | To the Knowledge of Sellers, Sellers have delivered or otherwise made available for inspection to Purchaser true, complete and correct copies and results of any material reports, studies, analyses, tests or monitoring possessed or initiated by or for the benefit of Sellers or their Affiliates, the Company or any Acquired Company pertaining to Hazardous Substances in, on, beneath or adjacent to any property currently or formerly owned, operated or leased by the Company or any Acquired Company, or regarding the Company’s or any Acquired Company’s compliance with applicable Environmental and Safety Requirements. |
i. | Except as set forth in this Section 4.13, no representations or warranties are being made with respect to environmental matters. |
a. | Except for (i) Contracts relating to the Preliminary Transactions, (ii) Contracts that are Excluded Assets |
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or Excluded Liabilities and (iii) Contracts set forth on Schedule 4.15, true and complete copies of which have been made available to Purchaser, (the “Scheduled Contracts”), neither the Company nor any Acquired Company is a party to: |
i. | any Contract (other than any raw material, supply or procurement Contract entered into in the Ordinary Course of Business) that involves the purchase or sale of goods or services with a value, or involving payments by or to the Company or any Acquired Company, of more than $1,000,000 per year and that is not terminable by the Company or an Acquired Company upon less than twelve (12) months’ notice; | ||
ii. | any employment or consulting agreement having a remaining term of at least one (1) year and requiring payments of base salary in excess of $100,000 per year or aggregate payments under any such agreement in excess of $100,000; | ||
iii. | any stock option, equity based, share purchase, profit sharing, deferred compensation, bonus or other incentive compensation Contract or plan; | ||
iv. | any note, mortgage, indenture or other obligation or agreement or other instrument for or relating to indebtedness for borrowed money (including capitalized lease obligations), or any guarantee of third party obligations, of more than $1,000,000 in the aggregate, but excluding intercompany indebtedness solely between or among the Company and one or more of the Acquired Companies; | ||
v. | any collective bargaining agreement with any labor unions or associations representing employees of the Company or any Acquired Company; | ||
vi. | any Real Property Lease, lease of personal property or license or other agreement granting a right to use any such property as lessee having a remaining term of at least one (1) year and with an annual base rental obligation of more than $1,000,000 or a total remaining rental obligation of more than $1,000,000; |
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vii. | any agreement pursuant to which the Company or any Acquired Company has licensed as licensee third party software material to the Business, except for widely available third party software which is of an “off-the-shelf” nature and not modified or customized; | ||
viii. | any material license, assignment, transfer or similar Contract pursuant to which any third party has rights to use or own any material Applied for and Registered Intellectual Property or material Proprietary Rights of the Company or any Acquired Company; | ||
ix. | other than the organizational documents of the Acquired Companies, any limited liability company, joint venture or partnership agreement; | ||
x. | any agreement limiting the freedom of the Company or any Acquired Company from engaging in any line of business in any geographic area or to compete with any Person; | ||
xi. | except as set forth on Schedule 4.15(a)(xi), any agreement which provides for an outstanding loan or advance (excluding advances for travel and entertainment expenses made in accordance with customary policies for such advances), in any amount in excess of $100,000 and to any shareholder, director, member of the board of managers, or officer or employee of the Company, any Acquired Company or any trustee, beneficiary, or Affiliate of any Seller; | ||
xii. | any agreement with any Seller or any Affiliate of any Seller which is not an Acquired Company; | ||
xiii. | any agreement with suppliers (including raw material, supply and procurement Contracts entered into in the Ordinary Course of Business), or any distribution or sale contract, which involves payments in excess of $1,000,000 per year and which is not terminable by the Company or an Acquired Company party thereto upon less than twelve (12) months’ notice; | ||
xiv. | any requirements or “take or pay” contracts; |
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xv. | any agreement for capital expenditures or the acquisition or construction of fixed assets which requires aggregate future payments in excess of $1,000,000; or | ||
xvi. | any agreement relating to cleanup, abatement, monitoring or other actions in connection with any Liability related to Environmental and Safety Requirements which requires aggregate future payments in excess of $1,000,000. |
b. | Except as set forth on Schedule 4.15, and except as would not reasonably be expected to have a Material Adverse Effect: (i) all of the Scheduled Contracts are in full force and effect and constitute legal and binding obligations of the Company or an Acquired Company party thereto, as the case may be, and (ii) neither the Company nor any Acquired Company party thereto nor, to the Knowledge of Sellers, any other party is in breach of or default under, and, to the Knowledge of Sellers, no event has occurred which with notice or lapse of time, or both, would become a breach of or default under, any Scheduled Contract. |
a. | Schedule 4.16(a) lists all Proprietary Rights that are applied for and registered trademarks, service marks, copyrights and domain names owned and/or used with respect to the Business (collectively, the “Applied For and Registered Intellectual Property”), including, where applicable, an indication of each jurisdiction in the world in which there is a registration or application for registration thereof and all the respective registration and application numbers and dates of filing and/or issuance. Except as set forth on Schedule 4.16(a), (i) the Company and/or any Acquired Company owns and possesses all right, title and interest in and to, or as of the Closing, will own and possess all right, title and interest in and to, free and clear of all Liens, except for Permitted Liens, all the Applied For and Registered Intellectual Property used with respect to the Business, (ii) the Company and/or any Acquired Company has the exclusive right to use the Applied For and Registered Intellectual Property used with respect to the Business, and (iii) the consummation of the transactions contemplated hereby will not conflict with, alter or impair any Applied For and Registered Intellectual Property rights in any material respect. |
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The Company and/or the Acquired Companies have taken all necessary action to maintain and protect the Applied For and Registered Intellectual Property that is material to the Business so as to not adversely affect the validity or enforceability of such intellectual property. To the Knowledge of Sellers, there are no claims or proceedings pending or threatened against the Company and/or any Acquired Company by any person or entity with respect to the ownership, validity, enforceability, or use of any Applied For and Registered Intellectual Property owned or otherwise used in the Business. Except as set forth on Schedule 4.16(a), no notice of infringement or any cease and desist order has been received by the Company and/or any Acquired Company. To the Knowledge of Sellers, the Company and/or any Acquired Company have not infringed and/or misappropriated any intellectual property rights or other property rights of any person. To the Knowledge of Sellers, there is no infringement, misappropriation or conflict that will occur as a result of the continued operation of the Business by the Purchaser. | |||
b. | Schedule 4.16(b) sets forth a true and complete list of Proprietary Rights licensed to the Company or any Acquired Company and necessary for, and material to, the conduct of the Business (the “Licensed Intellectual Property”). Except as set forth on Schedule 4.16(b),(i) the Company and/or any Acquired Company holds a good and valid license with respect to each of the Licensed Intellectual Property, free and clear of all Liens, except for Permitted Liens, (ii) to the Knowledge of Sellers, there are no claims pending or threatened against the Company and/or any Acquired Company by any person or entity with respect to the Company’s and/or any Acquired Company’s use or continued use of any of the Licensed Intellectual Property and (iii) the consummation of the transactions contemplated hereby will not conflict with, alter or impair any such rights in the Licensed Intellectual Property in any material respect. | ||
c. | The Company and the Acquired Companies have taken all commercially reasonable actions to protect their trade secrets. | ||
d. | Except with respect to this Section 4.16, no representations or warranties are being made with respect to intellectual property. |
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a. | The Company has been a validly electing S Corporation within the meaning of Code Sections 1361 and 1362 at all times on and after January 1, 2002, and the Company will be an S Corporation up to and including the day prior to the Closing Date in accordance with Treasury Regulation § 1.1502-76(b)(1)(ii)(A)(2); and the QSSS Companies have been valid Qualified Subchapter S Subsidiaries under the Code at all times on and after January 1, 2002 and will continue to be valid Qualified Subchapter S Subsidiaries under the Code up to and including the day prior to the Closing Date in accordance with Treasury Regulation § 1.1502-76(b)(1)(ii)(A)(2); | ||
b. | In states that require separate state-level elections to be treated as an S Corporation and Qualified Subchapter S Subsidiary, as those terms are used for federal tax purposes, the Company, the QSSS Companies and the Shareholders have made all necessary separate state-level elections validly and timely under applicable state law, and those separate state-level elections will be valid under applicable state law up to and including the day prior to the Closing Date; | ||
c. | The Company has satisfied (or will satisfy when due) any Taxes pursuant to Code Sections 1374 or 1375 that arose from the effective date of its S Election on January 1, 2002 through the Closing Date; | ||
d. | The Company and the Acquired Companies have filed with the appropriate Governmental Authorities all Tax Returns required to be filed by them through the date hereof, all such Tax Returns are true and correct in all material respects. All Taxes shown as due on such Tax Returns have been paid, and all such Tax Returns and Taxes that are due between the date hereof and the Closing Date will be filed and paid. Neither the Company nor any Acquired Company has requested any extension of time within which to file any such Tax Returns which is currently in effect. Sellers have made available to the Purchaser copies of all Income Tax Returns of Old Asworth and each of the Acquired Companies for all “open” Tax Periods for which Tax Returns were required to be filed; |
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e. | All Taxes that any of the Company or any Acquired Company has been required to collect or withhold have been duly collected or withheld and to the extent required when due, have been or will be duly paid to the proper Governmental Authority, and all registrations required to be made for Tax purposes by the Company and the Acquired Companies have been made; | ||
f. | There are no Liens for Taxes (other than for current Taxes not yet due and payable or being disputed in good faith) upon the assets of the Company or any Acquired Company; | ||
g. | There is no dispute, audit, investigation, Proceeding or claim concerning any Liability for Taxes of the Company or any Acquired Company pending or, being conducted or, to the Knowledge of Sellers, threatened by a Governmental Authority; | ||
h. | None of the Company, its Affiliates, or the Shareholders has waived any statute of limitations in respect of the Company’s or any Acquired Companies’ Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. Neither the Company, any Acquired Company, nor any of their respective shareholders has executed any power of attorney with respect to any Tax, other than powers of attorney that are no longer in force. No closing agreements, private letter rulings, technical advice memoranda or other agreements or rulings relating to Taxes has been entered into or issued by any Governmental Authority with or in respect of the Company or any Acquired Company that impacts in any way an “open” Tax Period or any Post-Closing Tax Period; | ||
i. | All statutes of limitation for the assessment of additional Taxes for the Company and each of the Acquired Companies are closed with respect to Taxes relating to Tax Returns for Tax Periods ending on or prior to December 31, 2001; | ||
j. | After December 31, 2001, neither the Company nor any Acquired Company is required or has been required to make any adjustment pursuant to Code Section 481(a) (or any predecessor provision) or any similar provision of state, local or foreign Tax law that impacts in any way an “open” Tax Period or any Post- |
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Closing Tax Period by reason of any change in any accounting methods, or will be required to make such an adjustment as a result of the Preliminary Transactions, and there is no application pending with any Governmental Authority requesting permission for any changes in any of its accounting methods for Tax purposes. To the Knowledge of Sellers, no Governmental Authority has proposed any such adjustment or change in accounting method; | |||
k. | Neither the Company nor any Acquired Company is a party to or bound by any binding Tax sharing, Tax indemnity or Tax allocation agreement or other similar arrangement with any Person other than any such agreement or arrangement by or between the Company and the Acquired Companies or by or between the Acquired Companies. Any such obligations, if in existence, and any agreements pursuant to which the Company is obligated to file or is liable in connection with Tax Returns that include any Liabilities of Sellers will be terminated prior to the Closing Date and, on or after the Closing Date, the Company and the Acquired Companies shall not be bound by any such obligation or have any Liability thereunder; and | ||
l. | From January 1, 2000 through the Closing Date, Rosswil LLC, Xxxxx Tobacco LLC, Conwood-1 LLC, and Conwood-2 LLC, have been and will be properly classified as “eligible entities” that are “disregarded entities” for federal tax purposes within the meaning of Treasury Regulation § 301.7701-3. From January 1, 2000 through the Closing Date, neither the Company nor any of its Affiliates has made or will make an election under Treasury Regulation § 301.7701-3 to treat Rosswil LLC, Xxxxx Tobacco LLC, Conwood-1 LLC or Conwood-2 LLC as an association taxable as a corporation. |
a. | Schedule 4.18(a) identifies all “employee benefit plans” (as defined in Section 3(3) of ERISA) and any other bonus, deferred or incentive compensation, profit sharing, retirement, stock option, stock purchase or other equity compensation, health, life or other employee insurance, Code Section 125 cafeteria plan or flexible benefit arrangement, sick leave, hospitalization, change in control or severance plan, |
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arrangement, agreement or program, and material fringe benefit plan, arrangement, agreement or program relating to the Business (whether formal or informal, whether funded or unfunded, written, oral, qualified or nonqualified), that (i) benefits a current or former employee, director, leased employee, independent contractor or officer of the Company or any Acquired Company other than a current or former employee, director or officer associated with the Non-Tobacco Business and (ii) is sponsored, maintained or contributed to, or required to be contributed to, by the Company or any Acquired Company and relates to the Business or any ERISA Affiliate (collectively, the “Plans"). Except as set forth on Schedule 4.18(a), Sellers have furnished or made available to the Purchaser, with respect to each such Plan, the following documents as applicable: all relevant plan documents; the most recent summary plan description and any summaries of material modifications thereto; Forms series 5500 as filed with the United States Department of Labor for the two most recent Plan years with any required schedules and audited financial statements, if applicable; all trust agreements; all group annuity contracts and the most recent IRS determination letter (if any) for all plans qualified under Code Section 401(a); and actuarial reports for each Plan for which a report was required or prepared. | |||
b. | Except as set forth on Schedule 4.18(b), each Plan sponsored or maintained by the Company or any Acquired Company has been maintained, operated and administered in all material respects in compliance with its terms and the applicable provisions of ERISA, the Code and all other Applicable Laws. Except for any act or failure to act that would not reasonably be expected to have a Material Adverse Effect, none of the Plans nor any fiduciary of any Plan has (i) engaged in any transaction prohibited by ERISA or the Code or (ii) engaged in any transaction as a result of which the Company or any Acquired Company would be subject to any Liability pursuant to ERISA Sections 502(i) or 502(l) or a tax imposed pursuant to Code Section 4975. With respect to each Plan sponsored or maintained by the Company or any Acquired Company that is a group health plan, the Company or an Acquired Company has complied in all material respects with the continuation coverage requirements of Code Section |
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4980B and Part 6 of Subtitle B of Title I of ERISA. Except for any act or failure to act that would not reasonably be expected to have a Material Adverse Effect, no fiduciary (within the meaning of Section 3(21) of ERISA) of any Plan has any Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any such Plan. Except for any action that would not reasonably be expected to have a Material Adverse Effect, no action has been taken with respect to any Plan to either terminate any Plan or to cause distributions, other than in the Ordinary Course of Business and in accordance with the terms of the Plan, to participants under such Plan. No Proceedings with respect to a Plan (other than routine claims for benefits) are pending, or, to the Knowledge of Sellers, threatened which would reasonably be expected to result in or subject any of the Company or any Acquired Company to any material Liability. There are no audits, investigations, or examinations pending by the IRS, the United States Department of Labor, the PBGC or any other Governmental Authority with respect to any Plan sponsored or maintained by the Company or any Acquired Company and, to the Knowledge of Sellers, no such audit, investigation or examination is threatened. | |||
c. | All contributions (including all employer contributions and employee salary reduction contributions) and other payments required by and due from the Company or any Acquired Company under the terms of each Plan, ERISA or the Code have been made and all contributions for any period ending on or before the Closing Date which are not yet due have been made to each such Plan or properly accrued on the Latest Balance Sheet. All premiums or other payments for all periods ending before the Closing Date that are due on or before such Closing Date from the Company or any Acquired Company have been, or will be, paid with respect to each Plan before the Closing Date. | ||
d. | With respect to each Plan subject to Code Section 412 or ERISA Section 302: (i) such Plan uses a funding method permissible under ERISA and the actuarial assumptions used in connection therewith are reasonable individually and in the aggregate; (ii) no |
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such Plan has incurred an accumulated funding deficiency, whether or not waived; and (iii) except as disclosed on Schedule 4.18(d), as of the last day of the plan year immediately preceding the Closing Date, the fair market value of the assets of such Plan will exceed or equal the “projected benefit obligation” (as defined in Statement of Financial Accounting Standard No. 87). | |||
e. | With respect to each Plan that is subject to Title IV of ERISA, no such Plan has been terminated, no filing of a notice of intent to terminate such Plan has been made, and the PBGC has not initiated any Proceeding to terminate any such Plan. Within the six-year period prior to the Closing Date, no reportable event within the meaning of ERISA Section 4043 has occurred with respect to any Plan. | ||
f. | Except as set forth on Schedule 4.18(f), each Plan which is intended to be qualified under Code Section 401(a) has received from the IRS a favorable determination letter which addresses compliance with the Uruguay Round Agreements Act (GATT), the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), the Small Business Job Protection Act of 1996 (SBJPA) and the Taxpayer Relief Act of 1997. No event has occurred since the date of any such determination (other than the effective date of certain amendments to the Code the remedial amendment period for which has not expired) that would reasonably be expected to result in the revocation of such determination. | ||
g. | Neither the Company nor any Acquired Company currently has any unsatisfied Liability to the PBGC (other than non-delinquent premium payments) or otherwise under Title IV of ERISA. Except as set forth on Schedule 4.18(g), no corporation or other entity which is under common control with the Company or any Acquired Company within the meaning of Section 4001(b)(1) of ERISA maintains, contributes to, or has any Liability under any “multiemployer plan” as defined in Section 3(37) of ERISA or Section 414(f) of the Code or a “multiple employer plan” within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code or any employee benefit plan which is a “defined benefit plan” (as defined in ERISA Section 3(35)) that is subject to Title IV of ERISA, whether or not |
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terminated, which will result in Liability to the Company or any Acquired Company. | |||
h. | Except as required by Applicable Law or as set forth on Schedule 4.18(h), there are no Plans that provide post-employment health or life benefits to current or former Company Employees. | ||
i. | No Plan is, or within the six-year period preceding the Closing, was, funded through a “welfare benefit fund” as defined in Section 419(e) of the Code, and no benefits under any Plan are or within the six-year period preceding the Closing, have been provided through a voluntary employees’ beneficiary association (within the meaning of Section 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code). | ||
j. | With respect to any insurance policy that has provided, or does provide, funding for benefits under any Plan, to the Knowledge of Sellers (i) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or any similar Proceeding and no such Proceedings with respect to any insurer are imminent and (ii) except as set forth on Schedule 4.18(j), there is no material Liability of the Company or any Acquired Company in the nature of a retroactive rate adjustment, loss sharing arrangement or other actual or contingent material Liability, nor would there be any such material Liability if such insurance policy was terminated. | ||
k. | The execution, delivery and performance of this Agreement and the Transaction Documents by the Sellers will not (i) constitute a stated triggering event under any arrangement, agreement or program, other than the Conwood Executive Retention Plan and the Conwood Employee Severance Plan (assuming all other plan triggers are met), that will result in any payment (whether of severance pay or otherwise) becoming due from the Company or any Acquired Company to any current or former officer, employee, director or consultant of the Company or any Acquired Company with respect to the Business (or dependents of such Persons) or (ii) accelerate the time of payment or vesting or increase the amount of compensation due to any current or former officer, employee, director or consultant of the Company or any Acquired Company with |
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respect to the Business (or dependents of such Persons). | |||
l. | Except as set forth on Schedule 4.18(l), neither the Company nor any Acquired Company has agreed or committed to institute any plan, program, arrangement or agreement for the benefit of employees of the Company or any Acquired Company with respect to the Business other than the Plans, or to make any amendments to any of the Plans. | ||
m. | No Plan, contract, program, fund or arrangement provides for the payment of any retention bonus or severance pay to any employee of the Company or any Acquired Company with respect to the Business on or after the consummation of the transactions contemplated by this Agreement, other than the Conwood Executive Retention Plan and the Conwood Employee Severance Plan. | ||
n. | No Plan provides benefits to any Person who is not a current or former employee of the Company or any Acquired Company with respect to the Business or the dependents or other beneficiaries of any such current or former employee. | ||
o. | No amount that could be received (whether in cash or property or the vesting of property) as a result of any of the transactions contemplated by this Agreement by any employee, officer or director of the Company or any Acquired Company with respect to the Business who is a “disqualified individual” (as such term is defined in proposed Treasury Regulation Section 1.280G-1) under any employment, severance or termination agreement, other compensation arrangement or Plan currently in effect, would be characterized as an “excess parachute payment” (as such term is defined in Section 280G(b)(1) of the Code). | ||
p. | There does not exist, nor, to the Knowledge of Sellers, do any circumstances exist that would reasonably be expected to result in, any Employee Benefits Liability that would reasonably be expected to result in a Material Adverse Effect. “Employee Benefits Liability” means any Liability of any ERISA Affiliate under (i) Sections 302, 405 and 409 or Title IV of ERISA, (ii) Sections 412, 4971 and 4975 of the Code, (iii) Part 6 of Subtitle B of Title I of ERISA |
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and Section 4980B and Sections 9801 et seq. of the Code or (iv) any corresponding or similar provision of any applicable Federal, state, local or non-U.S. laws, rules or regulations. |
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a. | conduct the Business only in the Ordinary Course of Business; | ||
b. | keep in full force and effect the organizational existence of the Company and each Acquired Company; | ||
c. | use their commercially reasonable efforts to keep the Business substantially intact, including its present operations, physical facilities and employees and the material relationships of each thereof with lessors, licensors, suppliers, customers, and others having material business relations with each thereof, respectively; | ||
d. | continue all current marketing, research and development activities relating to the Business; and | ||
e. | maintain the financial books, accounts and records of the Company and each Acquired Company consistent with GAAP and the Asworth Accounting Procedures. |
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a. | deliver to the Purchaser no later than five (5) Business Days before the Closing Date an audited carve-out combined balance sheet, and the related combined statements of income, stockholders’ equity and cash flows, of the Conwood Companies, together with Conwood-1 LLC, Conwood-2 LLC and Conwood LLC, as of and for the year ended December 31, 2005, prepared in accordance with GAAP; and | ||
b. | use reasonable efforts to cooperate, and will cause their officers, directors, employees, agents and other representatives and advisors to use reasonable efforts to cooperate, with the Purchaser and its financing sources in connection with the arrangement of the Debt Financing as may be reasonably requested by the Purchaser, including (i) participation (upon reasonably advance notice) in meetings, presentations, drafting sessions and due diligence sessions, (ii) furnishing the Purchaser and its financing sources with financial and other pertinent information regarding the Company, the Acquired Companies and the Business in the form reasonably requested by the Purchaser (provided that such information shall be subject to the terms of the Confidentiality Agreement), (iii) assisting the Purchaser and its financing sources in the preparation of an offering document for any debt raised to consummate the Debt Financing as well as in the preparation of materials for road shows and rating agency presentations, (iv) taking commercially reasonable actions to cause their |
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a. | Sellers, the Company and the Acquired Companies will and will cause each of their Affiliates, subsidiaries, trustees, officers, directors, employees, agents, advisors and representatives to, request that any Persons who were provided due diligence materials in connection with the sale of the Company and the Acquired Companies before the date of this Agreement promptly return or destroy (and in such case certify the destruction of any materials) in their possession relating to the Business, the Company or any Acquired Company. | ||
x. | Xxxxxxx, the Company and the Acquired Companies will not and will cause each of their Affiliates, subsidiaries, trustees, officers, directors, employees, agents, advisors and representatives not to, amend, waive or terminate, or otherwise release any Person from, a standstill, confidentiality or similar agreement relating to the Business, the Company or any Acquired Company. |
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a. | Crediting of Service. Parent agrees that effective as of the Closing Date it will credit the service of each employee of the Company and/or an Acquired Company who is employed in the Business as of the Closing Date (the “Company Employees”) that was recognized by the Company or an Acquired Company (including service with a predecessor employer) under the terms of any Plan, for purposes of determining each Company Employee’s eligibility to participate in and eligibility for benefits (including, without limitation, vesting and eligibility for optional forms of benefits, but specifically excluding the amount of any benefit) consistent with and under the terms and conditions of each of Parent’s or its Affiliate’s benefit plans (whether or not any such plan, program or arrangement is described in ERISA Section 3(3)), to the extent participation in such benefit plans is extended to Company Employees. In addition, Parent agrees to recognize the service of each Company Employee with the Business (with the Company and/or an Acquired Company) that was recognized for such Company Employee by the Company or an Acquired Company (including service with a predecessor employer) under the terms of any vacation or other paid time off policies of the Company or an Acquired Company for purposes of determining the amount of vacation and other paid time off to which such employee will be entitled under Parent’s vacation and other paid time off policy or policies. | ||
b. | Defined Benefit Pension Plans. Parent agrees that, for a period beginning on the Closing Date and ending at the end of the plan year following the plan year in which the Closing occurs (the “Benefit Protection Period”), it shall maintain, or shall cause to be maintained, for the benefit of the Company Employees, the Plans set forth on Schedule 7.1(b). | ||
c. | Defined Contribution Pension Plans. Parent agrees that, for the Benefit Protection Period, it shall provide, or shall cause to be provided, to the Company Employees benefits under a tax-qualified defined contribution pension plan that provides (i) employer contributions and (ii) the opportunity for employee |
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contributions that both are no less favorable to the Company Employees than those provided under the defined contribution pension plan maintained for such Company Employees immediately prior to the Closing Date. | |||
d. | Health and Welfare Benefit Plans. Parent agrees that, for the Benefit Protection Period, it shall provide, or shall cause to be provided, to the Company Employees benefits under one or more employee welfare benefit plans (as defined in ERISA Section 3(1)) that are substantially similar to the benefits provided by the Plans set forth on Schedule 7.1(d), provided, however, that the foregoing shall not prevent Parent or any of its Affiliates from amending or modifying any such benefits to the extent required by Applicable Law or as required by any insurer providing the funding medium for such benefits. Following the Benefit Protection Period, Parent shall not reduce the benefits provided to Company Employees in a manner disproportionate with reductions in coverage made under welfare benefit plans provided to similarly situated employees of Parent. | ||
x. | Xxxxxxxxx. Parent shall maintain, or shall cause one of its Affiliates to maintain, sponsorship of the Conwood Executive Retention Plan and the Conwood Employee Severance Plan as those plans shall be adopted by Old Asworth, with the approval of Parent, which approval shall not be unreasonably withheld (the “Severance Plans”). Parent shall provide, or shall cause to be provided, severance benefits to Company Employees in accordance with the terms of such Severance Plans as of the Closing Date so long as the Company Employees are employed by Parent or one of its Affiliates (but not beyond the time period required by the Severance Plans as of the Closing Date). Neither Parent nor any of its Affiliates shall amend or terminate either of the Severance Plans except as provided under the terms of such Severance Plans as of the Closing Date. Any severance costs which arise in connection with the transactions contemplated herein shall be the sole responsibility of Parent. | ||
f. | Management Incentive Plan. Parent shall: |
i. | maintain, or shall cause to be maintained, the Management Incentive Plan (as described on |
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Schedule 7.1(f)(i)) as in effect on the Closing Date through the end of the fiscal year which contains the Closing Date. Parent shall establish, or shall cause to be established, a bonus pool in an amount equal to 5% of the combined pre-tax profit for the fiscal year ending December 31, 2006 of the Acquired Companies (as presently constituted), as determined prior to any reduction due to the formation of this bonus pool and otherwise determined in accordance with GAAP and the practices customarily followed by the Acquired Companies prior to the Closing Date. The entire bonus pool established under the Management Incentive Plan shall be distributed to Company Employees in accordance with the terms of such plan. Except to the extent required to satisfy the requirements of Code Section 409A or any other Applicable Law, no amendment made to the Management Incentive Plan prior to the end of the fiscal year which contains the Closing Date will adversely affect participants of such plan. Any costs which arise in connection with payments made under the Management Incentive Plan after the Closing Date shall be the sole responsibility of Parent; and | |||
ii. | maintain, or shall cause to be maintained, the Sales Incentive Plan (as described on Schedule 7.1(f)(ii)) in place as of the Closing Date through the end of the fiscal year which contains the Closing Date. Parent shall establish, or shall cause to be established, a bonus pool in an amount equal to 1% of the adjusted net income of the Acquired Companies (as presently constituted), as determined prior to any reduction due to the formation of this bonus pool and otherwise determined in accordance with GAAP and the practices customarily followed by the Acquired Companies prior to the Closing Date. The entire bonus pool established under the Sales Incentive Plan shall be distributed to Company Employees in accordance with the terms of such plan. No amendment made to the Sales Incentive Plan prior to the end of the fiscal year which contains the Closing Date will adversely affect participants of such plan. Any costs which arise |
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g. | Key Employee Bonus Policy. Parent shall maintain, or shall cause to be maintained, the Key Employee Bonus Policy (as described on Schedule 7.1(g)) in place as of the Closing Date through the end of the fiscal year which contains the Closing Date. Any costs which arise in connection with the payments made under the Key Employee Bonus Plan after the Closing Date shall be the sole responsibility of Parent. | ||
h. | Post-Retirement Welfare Benefits for Retirees and Beneficiaries. Parent agrees that, for the Benefit Protection Period, it shall provide, or shall cause to be provided, to retirees of the Business (including Company Employees who retired during the Benefit Protection Period) and their beneficiaries (collectively “Retirees”) post-retirement health, life and other welfare benefits that are substantially similar to the benefits provided by the Plans set forth on Schedule 7.1(h); provided, however, that the foregoing shall not prevent Parent or any of its Affiliates from amending or modifying any such benefits to the extent required by Applicable Law or as required by any insurer providing the funding medium for such benefits (such benefits, as they may be so amended or modified, the “Seller Retiree Welfare Benefits”). Following the Benefit Protection Period, Parent shall not reduce the Seller Retiree Welfare Benefits in a manner that is disproportionate with any reductions in coverage provided to similarly situated retirees of Parent under welfare benefit plans. | ||
i. | Coordination of Coverage. With respect to each Company Employee who begins participation in a health plan maintained by Parent or one of its Affiliates during the calendar year in which the Closing Date occurs, Parent shall, or shall cause such Affiliate to, take into account expenses incurred by such Company Employee (during the calendar year in which the Closing Date occurs) under the health plan in which Company Employees are participants for purposes of determining deductibles and out-of-pocket limits under Parent’s or its Affiliate’s health plans for the remainder of the calendar year. Parent shall waive, or shall cause its Affiliate to waive, all limitations |
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as to pre-existing condition exclusions and waiting periods with respect to participation and coverage requirements applicable to Company Employees. | |||
j. | Deferred Compensation Plans. Parent shall maintain, or shall cause to be maintained, the deferred compensation plans listed on Schedule 7.1(j) solely for the benefit of those individuals who have amounts payable to them thereunder as of the Closing Date, through the end of the calendar year which contains the Closing Date. | ||
k. | No Amendment or Termination. Parent agrees that during the Benefit Protection Period, it will not make, and will not permit to be made, any amendment to a Plan or take any other action, that adversely affects a Company Employee, unless such amendment is required by Applicable Law or permitted by this Section 7.1. An amendment includes the termination of a benefit or a Plan. | ||
l. | Required Contributions. On or prior to the Closing Date, Sellers shall make, or shall cause to be made, (i) all contributions (including, without limitation, all employer matching or other contributions and employee salary reduction contributions) to and payments from any Plan in respect of any Company Employees or Retirees (except those distributions to be made from a trust qualified under Section 401(a) of the Code) that pursuant to the Plans or in accordance with Sellers’ past practice and in the ordinary course, become due or would normally be paid prior to the Closing Date, and (ii) the contributions to the Plans set forth on Schedule 7.1(b) to be made for the 2005 plan year of such Plans, regardless of whether in accordance with Sellers’ past practice and in the ordinary course such contributions would be paid after the Closing Date. |
a. | From and after the Closing Date for a period of six years, the provisions of the certificates of incorporation, by-laws, limited liability company operating agreements and other constitutive documents of the Company or any of the Acquired Companies concerning the elimination of liability and |
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b. | Effective upon the Closing, Parent and New Asworth and/or any Acquired Company, and each of their respective representatives, successors and assigns (collectively, the “Releasing Parties”), shall be deemed to have remised, released and forever discharged the individuals set forth on Schedule 7.2(b) (collectively, the “D&O Released Parties”) of and from any and all claims which the Releasing Parties, or any of them, now have, ever had, or at the Closing may have, or hereafter can, shall or may have, against the D&O Released Parties, or any of them, for, upon or by reason of any matter, cause or thing whatsoever, from the beginning of time through the Closing Date; provided, however, that the Releasing Parties shall not be deemed to release any Company Employee who is a D&O Released Party for any claims arising out of any misconduct, including any violation of Applicable Law, breach of contract, breach of fiduciary duty and/or any other willful, reckless or wanton conduct by such Company Employee. |
c. | Parent, on behalf of each of the Releasing Parties (which with respect to New Asworth and the Acquired Companies relates only to after the Closing), hereby represents, warrants and covenants to each D&O Released Party that there has not been and will not be any assignment or other transfer of any right or interest in any claims that any Releasing Party ever had, has or may have against the D&O Released Parties, and hereby agrees to indemnify and hold each D&O Released Party harmless from any claims and Losses |
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directly or indirectly incurred by any of the D&O Released Parties as a result of any Person asserting any right or interest pursuant to any such purported assignment or transfer of any such right or interest. | |||
d. | Parent, on behalf of each of the Releasing Parties, hereby agrees that if any Releasing Party hereafter commences (which with respect to New Asworth and the Acquired Companies relates only to any such actions taken from and after the Closing), joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any of the claims released hereunder, or in any manner asserts again any D&O Released Party any of the claims released hereunder, then such Releasing Parties will pay to such D&O Released Party, in addition to any other Losses, direct or indirect, all attorneys’ fees incurred in defending or otherwise responding to such suit or claims. | ||
e. | The provisions of this Section 7.2 are (i) intended to be for the benefit of, and shall be enforceable by each D&O Indemnitee, D&O Released Party and each such Person’s heirs, representatives, successors or assigns, it being expressly agreed that such Persons shall be third party beneficiaries of this Section 7.2, and (ii) in addition to, and not in substitution for, any other right to indemnification or contribution that any such D&O Indemnitee or D&O Released Party may have by contract or otherwise. Following the Closing, neither Parent nor any of New Asworth and/or any Acquired Company shall (A) amend the provisions of this Section 7.2 in a manner that would adversely affect any such third party beneficiary without the prior written consent of such third party beneficiary or (B) enter into, or permit any of its Affiliates to enter into, any merger, consolidation or similar transaction unless Parent shall have ensured that the surviving or resulting entity is creditworthy and will assume the obligations imposed by this Section 7.2. With respect to any claim by a third party beneficiary under this Section 7.2, no Releasing Party may assert by way of defense, set-off, or counterclaim, any claim against, or Losses owing by, Seller or another third party beneficiary. | ||
f. | Parent agrees to, at Closing and from time to time thereafter, to cause New Asworth and/or any Acquired |
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a. | Sellers hereby acknowledge and recognize the highly competitive nature of the Business, and accordingly, agree that, during and for a period of five (5) years commencing on the Closing Date, none of Sellers shall: |
i. | be engaged, directly or indirectly, either for its own account, as an investor or otherwise (except as a passive investor owning less than five percent (5%) of the equity or holding less than five percent (5%) of a debt instrument in an entity) by any person, firm, corporation or enterprise engaged in the business of manufacturing, developing, selling, distributing, advertising and marketing smokeless tobacco products in the contiguous United States of America (the “Non-Competition Area”); |
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ii. | provide financial (except as a passive investor owning less than five percent (5%) of the equity or holding less than five percent (5%) of a debt instrument in an entity) assistance to any person, firm, corporation, or enterprise engaged in the business of manufacturing, developing, selling, distributing, advertising and marketing smokeless tobacco products in the Non-Competition Area; | ||
iii. | directly or indirectly contact, solicit or induce any person, corporation or other entity who or which, as of the Closing Date, is a customer, supplier or distributor of the Company or any Acquired Company to become a customer, supplier or distributor of smokeless tobacco products in the Non-Competition Area for any person or entity other than New Asworth, an Acquired Company or the Purchaser; or | ||
iv. | directly or indirectly solicit, induce or encourage any employee or officer of the Company or any Acquired Company, who is employed on the Closing Date, to leave the employ of the Company, any Acquired Company or the Purchaser, or to seek, obtain or accept employment with any person other than New Asworth, any Acquired Company or the Purchaser; provided, however, that the foregoing shall not apply to the solicitation or hiring of any employee or officer of the Company or any Acquired Company who (i) is terminated after the Closing by the Company or any Acquired Company or (ii) responds to a general advertisement for employment by Sellers or any Affiliate thereof. |
x. | Xxxxxxx acknowledge and agree that money damages would not be an adequate remedy for any breach of the agreements contained in this Section 7.6 and that in addition to any other remedies available to the Purchaser, the Purchaser will be entitled to the remedies of injunctive relief, specific performance and other equitable relief for any threatened or actual breach of the agreements contained in this Section 7.6 without any requirement that the Purchaser post a bond. The Parties hereto agree that the provisions of this |
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a. | by the mutual written agreement of the Parties; | ||
b. | by either Party by giving written notice of such termination to the other Party, if the Closing shall not have occurred on or prior to September 24, 2006 (the “Outside Date”); provided that the right to terminate this Agreement under this clause (b) shall not be available to any Party whose failure to fulfill |
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any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; | |||
c. | by either Party if (i) any Applicable Law of a Governmental Authority of competent jurisdiction shall have been enacted, entered or promulgated prohibiting the consummation of the transactions contemplated hereby or (ii) as a result of a Proceeding a Party shall have been permanently restrained, enjoined or otherwise prohibited from consummating the transactions contemplated hereby, and such Proceeding shall have become final and non-appealable; provided that the Party seeking to terminate this Agreement pursuant to this clause (c) shall have used commercially reasonable efforts to remove the effects of such Applicable Law or Proceeding, and such Party shall have complied with its obligations under Section 6.3; | ||
d. | by either Party upon a material breach by the other Party of any of its obligations under this Agreement, which breach has not been cured within twenty (20) days after written notice thereof has been provided to such other Party; provided that there shall be no right to terminate if such breach was caused, in whole or in part, by a material breach by the Party seeking to terminate this Agreement pursuant to this clause (d); | ||
e. | by Sellers, if the condition set forth in Section 3.2(a) shall have become incapable of fulfillment and is not cured within thirty (30) days after written notice thereof has been provided by the Purchaser to Sellers; or | ||
f. | by the Purchaser, if the condition set forth in Section 3.1(a) shall have become incapable of fulfillment and is not cured within thirty (30) days after written notice thereof has been provided by Sellers to the Purchaser. |
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a. | Subject to the terms and conditions of this Article IX, from and after the Closing, Sellers shall cause Remainco to enter into a joinder agreement at the Closing pursuant to which Remainco shall agree to become a party to this Agreement to indemnify, defend and hold harmless the Purchaser Indemnitees as provided in Section 10.6 from and against all Liability for (i) Taxes of the Company or the Acquired Companies (other than Purchaser Taxes) for all Pre-Closing Tax Periods, including, without limitation, (ii) any Taxes of the Company or the Acquired Companies imposed under Sections 1374 or 1375 of the Code, (iii) Taxes arising from or relating to the Preliminary Transactions, (iv) without duplication, any Losses resulting from any breach of any of the representations and warranties contained in Sections 4.9(k) and 4.17 (determined for purposes of this Section 9.4 without reference to any qualification in such representation or warranty of materiality, Material Adverse Effect, substantial compliance or dollar threshold) and (v) without duplication, all Losses arising from a breach by the Sellers of any covenant contained in this Article IX. Such Taxes shall not include Taxes or the amount of such Taxes paid by the Company and the Acquired Companies at or prior to the Closing or paid by Sellers or any of their Affiliates (other than the Company or the Acquired Companies) at any time. Notwithstanding anything to the contrary in this Agreement, neither Sellers nor Remainco shall be liable for or pay for (i) any Taxes that are imposed on the Company or any Acquired Company as a result of actions taken or elections made by the Purchaser, the Company or any Acquired Company after the Closing Date (collectively, “Purchaser Taxes”), including elections under Section 338(g) of the Code or Treasury Regulation § 301.7701-3 or (ii) any Taxes subject to indemnification by the Purchaser under this Section 9.4. Liability for Taxes includes any Tax payment as a result of a settlement, |
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agreed order, closing agreement, or other similar compromise. | |||
b. | Subject to the terms and conditions of this Article IX, from and after the Closing Date, the Purchaser shall indemnify, defend and hold harmless the Seller Indemnitees from and against all Liability for (i) Taxes of the Company and each Acquired Company for any Post-Closing Tax Period; (ii) Purchaser Taxes; and (iii) all Losses arising from a breach by the Purchaser or its Affiliates of any covenant contained in this Article IX. | ||
c. | In the case of any Straddle Period: |
i. | With respect to taxes that are levied on a per diem basis (“Per Diem Taxes”), the amount of such Taxes that will be treated as attributable to a Pre-Closing Tax Period shall be equal to the amount of such Per Diem Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that are in the Pre-Closing Tax Period and the denominator of which is the total number of days in the Straddle Period; and | ||
ii. | With respect to all Taxes other than Per Diem Taxes, the amount of such Taxes that will be treated as attributable to a Pre-Closing Tax Period shall be equal to the amount of such Tax that would have been due if the relevant Straddle Period ended as of the day immediately prior to the Closing Date, and such date was the last day of a hypothetical Tax period ending on such date. |
d. | Taxes relating to a Pre-Closing Tax Period that include a penalty for failure to participate in a Tax amnesty program, any voluntary compliance program, or failure to report any reportable or listed transaction required by any Governmental Authority, or any similar program or requirement, shall be reimbursed, paid, and indemnified to the Purchaser by Sellers. | ||
e. | The indemnity under this Article IX shall be payable solely by Remainco as set forth in Section 10.6. |
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a. | If an inquiry, an audit or a claim shall be initiated by any Tax authority which, if successful, might result in an indemnity payment pursuant to Section 9.4, the Indemnified Party shall notify the Indemnifying Party within ten (10) Business Days of such claim (a “Tax Claim”); provided, however, that the failure to give such notice shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party has actually been prejudiced as a result of such failure, and the amount of reimbursement to which the Indemnified Party is entitled shall be reduced by the amount, if any, by which the Indemnified Party’s Losses would have been less had such notice of Tax Claim been timely delivered. |
i. | With respect to any Tax Claim relating to a Pre-Closing Tax Period (other than a Pre-Closing Period that is a part of a Straddle Period), Sellers shall have the exclusive right, subject to Purchaser’s opportunity to review and comment, to control all inquiries, audits or Proceedings and may make all decisions taken in connection with such Tax Claim, including all decisions to grant or deny any waiver or extension of the applicable statute of limitation. Sellers’ direction of these proceedings shall be at Sellers’ own expense; provided, however, that Sellers may not settle, compromise or take any other action with respect to a Tax Claim that results in any increased Tax Liability or reduction of any Tax Asset of the Purchaser or the Purchaser’s tax group without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld or delayed. | ||
ii. | The Purchaser shall control all Proceedings with respect to any Tax Claim relating to any Straddle Period and any other Post-Closing Tax Period (whether or not it is part of a Straddle Period). Sellers shall have the right to participate in the defense of any Tax Claim relating to a Straddle Period for which they have an indemnity obligation under Articles IX or X, and shall have the right to employ professional advisors and |
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counsel, at Seller’s own expense, separate from the professional advisors and counsel employed by the Purchaser. Both the Purchaser and Sellers shall in good faith cooperate with one another with respect to any such Tax Claims, and the Purchaser shall not unreasonably reject any suggestions made by Sellers with respect to such Tax Claims. Such cooperation shall include the retention and (upon Sellers’ request) the provision to Sellers of records and information that are reasonably relevant to such Tax Claims (including copies of all protests, pleadings, briefs, filings, correspondence and similar materials relative to such Tax Claims), making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and cooperating and assisting in the investigation, defense and resolution of such Tax Claims. The Purchaser’s direction of these Proceedings shall be at the Purchaser’s own expense; provided however, that the Purchaser may not settle, compromise or tax any other action with respect to a Tax Claim that results in any increased Tax Liability or reduction of any Tax Asset of the Sellers without the prior written consent of Sellers, which shall not be unreasonably withheld or delayed. | |||
iii. | The Persons bearing the Liability or obligation to indemnify for any Taxes described under Section 9.4 shall be entitled to any refunds or credits of such Taxes. The Purchaser shall cause the Company and the Acquired Companies to promptly pay to Sellers any refunds or credits that are received or used in any manner by the Purchaser, the Company and/or the Acquired Companies and are due to Sellers pursuant to the terms of this Section 9.5(a)(iii), and the Sellers shall promptly pay to the Purchaser any refunds or credits that are received or used by Sellers and are due the Purchaser pursuant to the terms of this Section 9.5(a)(iii). |
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a. | the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4 and 4.5 shall survive the Closing indefinitely; | ||
b. | the representations and warranties set forth in Sections 4.9(k), 4.13, 4.17 and 4.18, and the indemnities provided in Sections 9.4 and 9.5, shall survive the Closing until the date three months after |
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the later of expiration of the statute of limitations relevant to the applicable representation or the conclusion of any challenge by a Governmental Authority (the “Extended Survival Period”); and | |||
c. | all other representations, warranties, covenants and agreements set forth in this Agreement shall survive the Closing until the second anniversary of the Closing unless, in the case of covenants or agreements, a specified survival period is otherwise set forth in this Agreement(in which case such specified date will control)(the “General Survival Period” and the Extended Survival Period, each a “Survival Period” and collectively the “Survival Periods”). |
a. | Subject to the limitations set forth in this Article X, if the Closing occurs, the LLC Seller agrees, and the Trust Sellers agree to cause each Trust, jointly and severally, to indemnify, defend and hold harmless the Purchaser and its directors, officers, employees, Affiliates, successors, permitted assigns, agents and representatives (collectively, the “Purchaser Indemnitees”) from and against all Losses resulting from: (i) any breach of any of the representations and warranties contained in Article IV (other than the representations and warranties in Sections 4.9(k) and 4.17; provided, however, that in determining whether and the extent to which the Purchaser Indemnitees are entitled to indemnification, all references in any representation or warranty to materiality, Material Adverse Effect, substantial compliance or dollar threshold shall be ignored and, provided, further, that Sections 4.9(k) and 4.17 are only subject to the indemnification provisions of Sections 9.4 and 9.5; |
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and (ii) any breach of any of the covenants and agreements of Sellers contained in this Agreement; provided, however, that no Shareholder shall be liable for any Losses arising out of a breach of the representation and warranty contained in Section 4.1 relating to the Shares of another Shareholder. The indemnification obligations of the Shareholders for Losses pursuant to clauses (a)(i) and (a)(ii) of this Section 10.2 shall be payable by the Shareholders solely out of the Escrow Amount pursuant to the Escrow Agreement, which shall be the sole and exclusive source of payment for any such indemnification obligation, except for any Loss resulting from the breach of a representation or warranty set forth in Sections 4.1, 4.2, 4.3, 4.4 and 4.5 which, after the entire Escrow Amount has been disbursed pursuant to the Escrow Agreement, shall also entitle a Purchaser Indemnitee to indemnification from Remainco as provided in Section 10.6 hereof. | |||
b. | Subject to the limitations set forth in this Article X, if the Closing occurs, Sellers shall cause Remainco to enter into a joinder agreement at the Closing pursuant to which Remainco shall agree to become a party to this Agreement solely to indemnify, defend and hold harmless the Purchaser Indemnitees as provided in Section 10.6 from and against all Losses resulting from (i) any Excluded Assets or Excluded Liabilities (other than Taxes for Pre-Closing Tax Periods that constitute Excluded Liabilities, which Taxes are the subject of Sections 9.4 and 9.5) and (ii) any Indebtedness, to the extent not taken into account in calculating the Net Working Capital pursuant to Section 7.7. | ||
c. | Subject to the limitations set forth in this Article X, and except as otherwise provide in Sections 9.4 and 9.5 with respect to Taxes, if the Closing occurs, the Purchaser agrees to indemnify, defend and hold harmless each Seller, the Trusts and their Affiliates as well as their respective directors, officers, employees, successors, permitted assigns, agents and representatives (collectively, the “Seller Indemnitees”), from and against all Losses resulting from: (i) any breach of any of the representations and warranties contained in Article V; provided, however, that in determining whether and the extent to which |
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the Seller Indemnitees are entitled to indemnification, all references in any representation or warranty to materiality, material adverse effect, substantial compliance or dollar threshold shall be ignored; (ii) any breach of any of the covenants and agreements of the Purchaser contained in this Agreement; and (iii) the operations of New Asworth or the Acquired Companies after the Closing Date. | |||
d. | Except with respect to breaches of Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.9(k), and 4.17, the aggregate amount for which the Shareholders shall be liable under Section 10.2(a)(i) shall in no event exceed the Escrow Amount. Except with respect to breaches of Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.9(k) and 4.17, the Shareholders shall be required to indemnify the Purchaser Indemnitees pursuant to Section 10.2(a)(i) only if the aggregate Losses incurred by the Purchaser Indemnitees in connection with such subsection exceeds $15,000,000 (the “Threshold”), in which event, the Purchaser Indemnitees shall be indemnified to the full extent of their Losses. For the avoidance of doubt, none of the restrictions set forth in this Section 10.2 shall apply to the indemnification obligations of Seller set forth in Section 10.2(b)(ii). In calculating the amount of Losses of the Purchaser Indemnitees, all Losses which individually total less than $50,000 shall be excluded in their entirety (and such items shall not be aggregated for purposes of calculating the Threshold), and the Purchaser Indemnitees shall not have any recourse against the Shareholders for such Losses. | ||
e. | The aggregate amount for which the Purchaser shall be liable under Section 10.2(c)(i) hereof shall in no event exceed $150,000,000. The Purchaser shall be required to indemnify the Seller Indemnitees pursuant to Section 10.2(c)(i) hereof only if the aggregate Losses incurred by the Seller Indemnitees in connection with such subsection exceeds the Threshold, in which event, the Seller Indemnitees shall be indemnified to the full extent of their Losses. In calculating the amount of Losses of the Seller Indemnitees, all Losses which individually total less than $50,000 shall be excluded in their entirety (and such items shall not be aggregated for purposes of the prior sentence), and the Seller Indemnitees shall not |
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have any recourse against the Purchaser for such Losses. | |||
f. | Notwithstanding anything herein to the contrary, no Person shall, in any event, be liable under Sections 9.4 or 9.5 or this Article X to any other Person for any consequential, incidental, indirect, special or punitive damages of such other Person, including loss of future revenue, income or profits, diminution of value or loss of business reputation or opportunity relating to the breach or alleged breach hereof. | ||
g. | The Shareholders and Remainco shall have no Liability under Sections 9.4 or 9.5 or this Article X to the Purchaser Indemnitees in respect of any Losses to the extent that: |
i. | provision or reserve in respect of any Liability or other matter giving rise to the Loss (or any part thereof) was made in the Audited Financial Statements or the Unaudited Financial Statements; | ||
ii. | the Loss (or any part thereof) would not have arisen but for an act, omission or transaction on the part of or carried out by the Purchaser or any Affiliate of the Purchaser (including New Asworth and the Acquired Companies after the Closing); | ||
iii. | the Loss in question arises, or is increased, as a result of a change after the Closing in any accounting policy, any Tax reporting practice or the length of any accounting period for Tax purposes of New Asworth or the Acquired Companies; or | ||
iv. | the Loss (or any part thereof) in question arises from or relates to (a) any product Liability arising from the research, development, manufacture, sale, advertising, distribution, consuming, marketing or use of smokeless tobacco products or (b) the MSA. |
h. | The amount of any Losses under Sections 9.4 or 9.5 or this Article X sustained by a Purchaser Indemnitee or a Seller Indemnitee shall be reduced by any amount received by such Purchaser Indemnitee or Seller Indemnitee with respect thereto under any insurance |
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coverage or from any other Party alleged to be responsible therefor, and by the amount of any Tax benefit actually realized with respect to the Loss. The Purchaser Indemnitees and the Seller Indemnitees shall use commercially reasonable efforts to collect any amounts available under such insurance coverage and from such other Party alleged to have responsibility with respect to the Loss. If a Purchaser Indemnitee or Seller Indemnitee realizes a Tax benefit or receives an amount under insurance coverage or from such other Party with respect to Losses sustained at any time subsequent to any indemnification payment pursuant to Sections 9.4 or 9.5 or this Article X, then such Purchaser Indemnitee or Seller Indemnitee shall promptly reimburse the applicable Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification up to such amount realized or received by the Purchaser Indemnitee or Seller Indemnitee, as applicable. | |||
i. | Upon making any indemnification payment under Sections 9.4 or 9.5 or this Article X, the Indemnifying Party will, to the extent of such payment, be subrogated to all rights of the Indemnified Party against any third party in respect of the Loss to which the payment relates; provided, however, that until the Indemnified Party recovers full payment of its Loss, any and all claims of the Indemnifying Party against any such third party on account of said payment are hereby made expressly subordinated and subjected in right of payment to the Indemnified Party’s rights against such third party. Without limiting the generality of any other provision hereof, each such Indemnified Party and Indemnifying Party shall duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation and subordination rights. | ||
j. | Neither Sellers or Remainco, on the one hand, nor the Purchaser, on the other hand, shall have any right to set off any Losses under Sections 9.4 or 9.5 or this Article X against any payments to be made by such Party or Parties pursuant to this Agreement or any other agreement among the Parties. | ||
k. | Notwithstanding anything to the contrary in this Agreement, Sellers’ indemnification obligation under |
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Article X in respect of Remedial Action is subject to the provisions of this Section 10.2(k). Sellers shall be responsible for the cost of Remedial Action only to the extent necessary to reasonably comply with the remediation or compliance standard consistent with the industrial/commercial use of the property as intended to be used as of the Closing Date, which standard will be reasonable if acceptable to the applicable Governmental Authorities. Sellers shall not be responsible for those costs incurred in connection with a Remedial Action to the extent such costs arise from or are exacerbated by actions of Purchaser after the Closing Date. Further, Sellers shall not be responsible for costs incurred in connection with a Remedial Action unless such Remedial Action is (i) required by a Governmental Authority acting pursuant to Environmental and Safety Requirements; (ii) required to respond to a judgment or an order in a third party claim or action; (iii) required to respond to a condition discovered in connection with the normal day-to-day operation of a facility or a facility expansion or demolition actually implemented by Purchaser where such Remedial Action is necessary to permit such operation, expansion or demolition; or (iv) required to respond to a condition which presents a substantial endangerment to human health; provided that Sellers shall have no Liability or responsibility for any of the matters described in the immediately preceding clauses (i) through (iv) to the extent that such matter arises from product Liability due to the research, development, manufacture, sale, advertising, distribution, consuming, marketing or use of smokeless tobacco products. | |||
l. | The provisions of this Section 10.2 are (i) intended to be for the benefit of, and shall be enforceable by each of the Purchaser Indemnitees or Seller Indemnitees, as applicable, and each such Person’s heirs, representatives, successors or assigns, it being expressly agreed that such Persons shall be third party beneficiaries of this Section 10.2. |
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a. | Except as provided in Article IX, the Indemnifying Party shall have the right, but not the obligation, upon written notice to the Indemnified Party within twenty (20) Business Days following receipt of notice thereof, to investigate, contest, assume the defense of or settle any claim or demand made, or any action, Proceeding or investigation instituted, by any Person not a party to this Agreement (a “Third Party Claimant”) that may result in a Loss with respect to which the Indemnified Party would be entitled to indemnification pursuant to this Article X (a “Third Party Claim”); provided that the Indemnified Party may, at its option and at its own expense, participate in the investigation, contesting, defense or settlement of any such Third Party Claim through representatives and counsel of its own choosing; and, provided further, that the Indemnifying Party shall not settle any Third Party Claim unless (i) such settlement is on exclusively monetary terms and the Indemnifying Party shall pay or cause to be paid all amounts arising out of such settlement either concurrently or with the effectiveness thereof, (ii)such settlement includes a complete and irrevocable general release executed by all Persons who brought such Third Party Claim, which release shall release the Indemnified Party from any Liability, or (iii) the Indemnified Party shall have consented in writing to the terms of such settlement, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the |
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Indemnified Party for any period during which the Indemnifying Party has failed to assume the defense thereof and for any period during which the interests of the Indemnifying Party and Indemnified Party may conflict, giving rise to the right of the Indemnified Party to employ counsel of its own choosing. Whether or not the Indemnifying Party shall have assumed the defense of such Third Party Claim, the Indemnified Party shall not settle, compromise or pay any Third Party Claim for which it seeks indemnification hereunder without the prior written consent of the Indemnifying Party. | |||
b. | The Indemnifying Party shall be entitled to participate in (but not to control) the defense of any Third Party Claim which it has not elected to assume the defense of with its own counsel and at its own expense. | ||
c. | The Purchaser and each Seller or Remainco, as applicable, shall make mutually available to each other all relevant information in their possession relating to any Third Party Claim (except to the extent that such action would result in a loss of attorney client privilege) and shall cooperate with each other in the defense thereof. |
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a. | if to Sellers or for purposes of Article X, Remainco: | ||
c/o The Pritzker Organization, LLC 00 X. Xxxxxx Xxxxx, Xxxxx 0000 Xxxxxxx, XX 00000 Attn: Xxxx Xxxxxxxx Telecopier No.: (000) 000-0000 email: xxxxxxxxx@xxxxxxxxxxx.xxx |
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With a concurrent copy to: | |||
Xxxxxx & Xxxxxxx LLP 000 Xxxxx Xxxxxx, Xxxxx 0000 Xxx Xxxx, XX 00000 Attn: Xxxxx X. Xxxxx, Esq. Telecopier No.: (000) 000-0000 email: xxxxx.xxxxx@xx.xxx |
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b. | If to Parent or the Purchaser: | ||
Xxxxxxxx American Inc. 000 Xxxxx Xxxx Xxxxxx Xxxxxxx-Xxxxx, XX 00000 Attn: General Counsel Telecopier No.: (000) 000-0000 email: xxxxxx@xxxx.xxx |
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With a concurrent copy to: |
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000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
email: xxxxxxxxx@xxxxxxxx.xxx
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a. | For purposes of this Agreement, the words “hereof,” “herein,” “hereby” and other words of similar import refer to this Agreement as a whole unless otherwise indicated. Whenever the singular is used herein, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. All terms defined herein in the singular shall have the same meaning when used in the plural; all terms defined herein in the plural shall have the same meaning when used in the singular. | ||
b. | With regard to each and every term and condition of this Agreement, the Parties understand and agree that the same have or has been mutually negotiated, prepared and drafted, and that if at any time the Parties desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration shall be given to the issue of which Party actually prepared, drafted or requested any term or condition of this Agreement. | ||
c. | All references herein to Articles, Sections, subsections, paragraphs, subparagraphs and clauses shall be deemed references to such parts of this Agreement, unless the context shall otherwise require. | ||
d. | All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. | ||
e. | The words “include” and “including” and variations thereof shall not be deemed terms of limitation, but rather shall be deemed to be followed by the words “without limitation.” | ||
f. | All financial accounting terms not specifically defined herein shall be construed in accordance with GAAP. |
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g. | For purposes of this agreement, the word “primarily” shall mean used for the specified purpose to a greater extent than for any other purpose. |
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The Trusts Identified on Schedule 1, attached hereto |
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By: | /s/ Xxxxxx X. Xxxxxxxx | |||
Xxxxxx X. Xxxxxxxx, not individually, but solely as co-trustee of each of those separate and distinct trusts listed on Schedule 1 | ||||
By: | /s/ Xxxxxxxx X. Xxxxxxxxx | |||
Xxxxxxxx X. Xxxxxxxxx, not individually, but solely as co-trustee of each of those separate and distinct trusts listed on Schedule 1 | ||||
By: | /s/ Xxxx X. Xxxxxx | |||
Xxxx X. Xxxxxx, not individually, but solely as | ||||
co-trustee of each of those separate and distinct trusts listed on Schedule 1 | ||||
GP INVESTOR, L.L.C. |
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By: | FLP Trust #10, its sole member | |||
By: | /s/ Xxxxxx X. Xxxxxxxx | |||
Xxxxxx X. Xxxxxxxx, not individually, but solely as co-trustee of FLP Trust #10 | ||||
By: | /s/ Xxxxxxxx X. Xxxxxxxxx | |||
Xxxxxxxx X. Xxxxxxxxx, not individually, but solely as co-trustee of FLP Trust #10 | ||||
By: | /s/ Xxxx X. Xxxxxx | |||
Xxxx X. Xxxxxx, not individually, but solely as | ||||
co-trustee of FLP Trust #10 | ||||
XXXXXXXX AMERICAN INC. |
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By: | /s/ Xxxxxxx X. Xxxxx | |||
Name: | Xxxxxxx X. Xxxxx | |||
Title: | Executive Vice President, General Counsel and Assistant Secretary | |||
PINCH ACQUISITION CORPORATION |
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By: | /s/ Xxxxxxx X. Xxxxx | |||
Name: | Xxxxxxx X. Xxxxx | |||
Title: | President | |||