EXHIBIT 2.4
EXECUTION COPY
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AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
BY AND AMONG
XXXXXX RUBBERMAID INC.,
NEWELL HOLDINGS DELAWARE, INC.
(F/K/A ANCHOR HOCKING CORPORATION),
ANCHOR HOCKING INC.
(F/K/A MENAGERIE CORPORATION),
XXXXXX OPERATING COMPANY
AND
LIBBEY INC.
DATED AS OF JANUARY 21, 2002
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TABLE OF CONTENTS
PAGE
Article I. PURCHASE AND SALE......................................................................................9
Section 1.1 Purchase and Sale of Shares............................................................9
Section 1.2 Closing Payment........................................................................9
Section 1.3 Estimated Closing Balance Sheet........................................................9
Section 1.4 Post-Closing Adjustments..............................................................10
Section 1.5 Closing...............................................................................13
Section 1.6 Closing Deliveries by Seller..........................................................14
Section 1.7 Closing Deliveries by Purchaser.......................................................15
Article II. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT..................................................15
Section 2.1 Organization..........................................................................15
Section 2.2 Authority; Enforceability.............................................................16
Section 2.3 Non-Contravention.....................................................................16
Section 2.4 Governmental Consents.................................................................17
Section 2.5 Capital Stock of Newco and AHCGC......................................................17
Section 2.6 Subsidiaries..........................................................................17
Section 2.7 Financial Information.................................................................17
Section 2.8 No Undisclosed Liabilities............................................................20
Section 2.9 Absence of Certain Changes or Events..................................................20
Section 2.10 Contracts.............................................................................20
Section 2.11 Compliance with Law...................................................................22
Section 2.12 Permits...............................................................................22
Section 2.13 Litigation............................................................................23
Section 2.14 Employee Benefits.....................................................................23
Section 2.15 Properties............................................................................25
Section 2.16 Intellectual Property.................................................................27
Section 2.17 Environmental Matters.................................................................29
Section 2.18 Intercompany Contracts, Transactions and Services; Outside Assets; Shared
Assets................................................................................31
Section 2.19 Taxes.................................................................................32
Section 2.20 Newco's Operations....................................................................33
Section 2.21 Brokers...............................................................................33
Section 2.22 Title to Assets.......................................................................33
Section 2.23 Tangible Assets.......................................................................34
Section 2.24 Solvency of Seller....................................................................34
Section 2.25 Accounts Receivable...................................................................34
Section 2.26 Insider Interests.....................................................................35
Section 2.27 Investments...........................................................................35
Section 2.28 Labor and Employees...................................................................35
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Article III. REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................................................36
Section 3.1 Organization..........................................................................36
Section 3.2 Authority; Enforceability.............................................................36
Section 3.3 Non-Contravention.....................................................................36
Section 3.4 Governmental Consents.................................................................36
Section 3.5 Purchase for Investment...............................................................37
Section 3.6 Financial Capability..................................................................37
Section 3.7 Brokers...............................................................................37
Article IV. ADDITIONAL AGREEMENTS................................................................................37
Section 4.1 Conduct of Business Prior to the Closing..............................................37
Section 4.2 Access to Information.................................................................40
Section 4.3 Further Assurances; Monthly Meetings..................................................43
Section 4.4 Xxxx-Xxxxx-Xxxxxx Act Filings, Cooperation, Control...................................43
Section 4.5 Notice of Development.................................................................45
Section 4.6 Insurance; Risk of Loss...............................................................46
Section 4.7 Surveys...............................................................................47
Section 4.8 Corporate Names.......................................................................47
Section 4.9 Domain Names/Internet Sites...........................................................48
Section 4.10 Intercompany Accounts, Agreements and Transactions....................................48
Section 4.11 Resignations..........................................................................49
Section 4.12 Books and Records.....................................................................49
Section 4.13 Labor Negotiations....................................................................49
Section 4.14 Covenant Not to Compete...............................................................50
Section 4.15 No Solicitation.......................................................................53
Section 4.16 Asset Transfer Transactions...........................................................53
Section 4.17 Canadian Asset Acquisition............................................................57
Section 4.18 Financial Statements..................................................................57
Section 4.19 Auditors Consent and Cooperation......................................................60
Section 4.20 Financing.............................................................................61
Section 4.21 Consents, Notices and Approvals Generally.............................................61
Section 4.22 Company Expenses......................................................................63
Section 4.23 Release...............................................................................63
Section 4.24 Confidentiality.......................................................................63
Section 4.25 Release of Liens......................................................................64
Section 4.26 1995 Restructuring....................................................................65
Section 4.27 Capital Expenditures in 2002..........................................................65
Section 4.28 Release of Guarantors.................................................................65
Section 4.29 Pre-Closing Disclosures...............................................................65
Section 4.30 Material Contracts Prior To Closing...................................................66
Section 4.31 Kitchen Essentials Trademark License..................................................66
Section 4.32 Purchase Orders.......................................................................66
Section 4.33 Foodservice Business..................................................................67
Section 4.34 Non-Solicitation of Foodservice Employees.............................................69
Section 4.35 Repair of Monaca Furnace..............................................................69
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Section 4.36 Transfer of Salaried Employees........................................................70
Section 4.37 Foodservice Business Transition.......................................................70
Article V. EMPLOYEE MATTERS......................................................................................72
Section 5.1 Company Benefit Plans.................................................................72
Section 5.2 Defined Benefit Plans.................................................................72
Section 5.3 Defined Contribution Plans............................................................75
Section 5.4 Retiree Health........................................................................75
Section 5.5 Welfare Plans.........................................................................76
Section 5.6 Compensation and Bonus Plans..........................................................76
Section 5.7 Purchaser's Plans.....................................................................77
Section 5.8 Severance.............................................................................77
Section 5.9 Cooperation...........................................................................77
Section 5.10 Salaried and Transition Employees.....................................................77
Section 5.11 No Third Party Beneficiaries..........................................................79
Article VI. TAX MATTERS..........................................................................................79
Section 6.1 Section 338(h)(10) Election...........................................................79
Section 6.2 Preparation of Tax Returns and Filings................................................80
Section 6.3 Filing of Amended Tax Returns.........................................................81
Section 6.4 Tax Refunds...........................................................................81
Section 6.5 Carrybacks............................................................................82
Section 6.6 Cooperation in Tax Matters............................................................82
Section 6.7 Transfer Taxes........................................................................82
Section 6.8 Treatment of Indemnification Payments.................................................83
Article VII. CONDITIONS TO CLOSING...............................................................................83
Section 7.1 Conditions to Obligations of Seller...................................................83
Section 7.2 Conditions to Obligations of Purchaser................................................84
Article VIII. INDEMNIFICATION....................................................................................86
Section 8.1 Survival..............................................................................86
Section 8.2 Indemnification other than for Tax Matters............................................86
Section 8.3 Limits on Indemnification.............................................................94
Section 8.4 Tax Indemnification...................................................................95
Section 8.5 Exclusivity of Indemnification Remedy.................................................98
Article IX. TERMINATION AND WAIVER...............................................................................98
Section 9.1 Termination...........................................................................98
Section 9.2 Effect of Termination................................................................100
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Article X. DEFINITIONS..........................................................................................100
Section 10.1 Certain Defined Terms................................................................100
Section 10.2 Other Defined Terms..................................................................110
Section 10.3 Other Interpretive Provisions........................................................114
Article XI. GENERAL PROVISIONS..................................................................................114
Section 11.1 Expenses.............................................................................114
Section 11.2 Notices..............................................................................115
Section 11.3 Public Announcements.................................................................116
Section 11.4 Headings; Table of Contents..........................................................116
Section 11.5 Severability.........................................................................116
Section 11.6 Entire Agreement.....................................................................116
Section 11.7 Assignment...........................................................................117
Section 11.8 No Third Party Beneficiaries.........................................................117
Section 11.9 Amendment............................................................................117
Section 11.10 Waiver...............................................................................117
Section 11.11 Governing Law; Jurisdiction..........................................................117
Section 11.12 Waiver of Jury Trial.................................................................118
Section 11.13 Disclosure Schedule..................................................................118
Section 11.14 Specific Performance.................................................................118
Section 11.15 Counterparts.........................................................................119
Section 11.16 Currency.............................................................................119
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SCHEDULES
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Schedule Title
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SCHEDULE 1.3(b) Net Working Capital Schedule (Target Net
Working Capital Amounts)
SCHEDULE 3.3 Non-Contravention
SCHEDULE 3.4 Governmental Consents
SCHEDULE 7.2(c)(ii) Required Consents
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EXHIBITS
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EXHIBIT TITLE
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EXHIBIT 3.6 Commitment
EXHIBIT 4.14(b) Post-Closing Exempt Employees List
EXHIBIT 4.14(d)(i) Non-Competition Matters
EXHIBIT 4.14(e) Map of the Western Hemisphere
EXHIBIT 4.15(b) Pre-Closing Exempt Employees List
EXHIBIT 4.18(f) Form of Special Procedures Report
EXHIBIT 4.32 Specified Purchaser Order Terms
EXHIBIT 4.33(a)(i) Certain Specified Foodservice IP Assets
EXHIBIT 4.33(a)(ii) Certain Specified Foodservice IP Assets
EXHIBIT 4.33(a)(iii) Foodservice Contracts
EXHIBIT 4.33(a)(iv) Foodservice Molds
EXHIBIT 4.33(a)(v) Foodservice Employees
EXHIBIT 4.37(a) Minimum Inventory Amounts
EXHIBIT 7.1(f) Form of Opinion of Xxxxxx & Xxxxxxx
EXHIBIT 7.2(h) Form of Opinion of Xxxxxx Xxxxxx & Xxxxx
EXHIBIT 10.1-FI-1 List and Procedures Regarding Certain Foodservice Inventory
EXHIBIT 10.1-FI-2 List and Procedures Regarding Certain Foodservice Inventory
Sourced from Third-Party Manufactures
EXHIBIT 10.1-K Knowledge List
EXHIBIT 10.1-L License Agreement
EXHIBIT 10.1-M Mold Equipment
EXHIBIT 10.1-T Transition Services Agreement
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT dated as of
January 21, 2002 is by and among Newell Holdings Delaware (f/k/a Anchor Hocking
Corporation), a Delaware corporation ("SELLER"), Xxxxxx Rubbermaid Inc., a
Delaware corporation ("PARENT"), Xxxxxx Operating Company, a Delaware
corporation ("OPERATING COMPANY"), Anchor Hocking Inc. (f/k/a Menagerie
Corporation), a Delaware corporation ("NEWCO", together with Seller and AHCGC,
collectively the "COMPANIES" and each individually a "COMPANY") and Libbey Inc.,
a Delaware corporation ("Purchaser").
WITNESSETH:
WHEREAS, Seller owns all outstanding shares of capital stock
of Newco (the "SHARES") and all of the outstanding shares of capital stock of
AHCGC;
WHEREAS, on or prior to the Closing and in accordance with the
terms and conditions of this Agreement, (i) Seller shall, and Parent shall cause
Seller to convey to Newco and Newco shall accept all right, title and interest
in and to the Seller Assets (including all of the issued and outstanding capital
stock of AHCGC) and Newco shall assume the Assumed Seller Liabilities and (ii)
Seller shall and Parent and Seller shall cause their Affiliates to convey to
Newco or AHCGC, as designated by Purchaser, all right, title and interest in and
to the Outside Assets (together with the transactions described in SECTION 4.16
of this Agreement, the "ASSET TRANSFER TRANSACTIONS");
WHEREAS, on or prior to the Closing and in accordance with the
terms and conditions of this Agreement, Seller shall complete the transfer and
conveyance of all rights, title and interest in the assets that were to be
transferred to AHCGC in the 1995 Restructuring Transaction (together with the
transactions described in SECTION 4.26 of this Agreement, the "ASSET DROP-DOWN
TRANSFERS" and with the Asset Transfer Transactions (the "INITIAL TRANSFERS");
WHEREAS, the parties desire for Parent or its Affiliates to
retain and not sell the Companies' Foodservice Business and to continue to
conduct the Foodservice Business (the "RETENTION");
WHEREAS, it is the intent of the parties that Purchaser and
its Affiliates will continue following the consummation of the transactions
contemplated by this Agreement to Participate in the design, development,
manufacture, distribution, sale and marketing of glass products in all channels,
including the Foodservice Channel;
WHEREAS, on the Closing, Seller desires to sell and Purchaser
desires to purchase, the Shares, upon the terms and subject to the conditions
set forth in this Agreement (the "SHARE PURCHASE");
WHEREAS, concurrently with the execution and delivery of this
Agreement, Xxxxxx Industries Canada Inc., an Ontario corporation ("CANADIAN
SELLER"), Purchaser and Parent have entered into the Canadian Purchase Agreement
with the Canadian Purchaser pursuant to which all right, title and interest in
and to the Canadian Assets and the Canadian Liabilities will be transferred to
the Canadian Purchaser (the "CANADIAN ASSET Acquisition"); and
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WHEREAS, the parties desire to amend and restate their Stock
Purchase Agreement dated as of June 17, 2001 (the "ORIGINAL PURCHASE AGREEMENT")
as hereinafter set forth to give effect to the Retention and certain other
agreements and understandings of the parties.
NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants, agreements and premises contained herein
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto mutually agree to amend and restate
in its entirety the Original Purchase Agreement as follows:
ARTICLE I.
PURCHASE AND SALE
SECTION 1.1 PURCHASE AND SALE OF SHARES.
(a) Upon the terms and subject to the conditions of this Agreement, at
the Closing, Parent shall cause Seller to and Seller shall sell, transfer,
convey, assign and deliver to Purchaser, free and clear of any Encumbrance and
Purchaser shall purchase, acquire and accept from Seller, all of Seller's right,
title and interest in and to all of the Shares.
(b) Upon the terms and subject to the conditions of this Agreement, in
consideration for the transfer of all of the Shares, Purchaser shall, on the
Closing Date, pay to Seller the Closing Payment pursuant to SECTION 1.2 hereof,
as adjusted pursuant to SECTION 1.3 hereof.
SECTION 1.2 CLOSING PAYMENT. On the Closing Date, Purchaser shall pay
to Seller an aggregate amount of Two Hundred and Seventy Five Million and Five
Hundred Thousand Dollars (USD 275,500,000.00) in cash LESS the Estimated Working
Capital Adjustment Amount, if any (the "CLOSING PAYMENT") (together with the
Canadian Purchase Price (as defined in the Canadian Purchase Agreement) and as
finally adjusted pursuant to SECTION 1.4 and SECTION 5.2, the "PURCHASE PRICE").
Purchaser shall deliver the Closing Payment to Seller by wire transfer of
immediately available funds to Seller Bank Account.
SECTION 1.3 ESTIMATED CLOSING BALANCE SHEET. At least five (5) Business
Days prior to the Closing Date Seller shall:
(a) Prepare the Estimated Closing Date Balance Sheet and deliver it to
Purchaser.
(b) Prepare and deliver to Purchaser a written estimate, based on the
Estimated Closing Date Balance Sheet, of the Net Working Capital of the New
Group as of the Closing Date (the "ESTIMATED CLOSING NET WORKING CAPITAL"). If
the Target Net Working Capital exceeds the Estimated Closing Net Working
Capital, such difference shall be the "ESTIMATED WORKING CAPITAL ADJUSTMENT
AMOUNT" (which shall otherwise be zero). "NET WORKING CAPITAL" shall have the
meaning set forth and be determined pursuant to the methodologies set forth on
SCHEDULE 1.3(b) of this Agreement.
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(c) The Estimated Closing Date Balance Sheet and the calculations made
pursuant to SECTION 1.3 (b) above shall be certified to Purchaser by the Chief
Financial Officer of Parent as having been prepared in good faith.
SECTION 1.4 POST-CLOSING ADJUSTMENTS.
(a) CLOSING DATE BALANCE SHEET. Within sixty (60) days following the
Closing Date, Purchaser shall, solely for the purpose of this Agreement, (i)
prepare or cause to be prepared and delivered to Seller an unaudited
consolidated balance sheet of the New Group as of the Closing Date in accordance
with GAAP consistent with the accounting principles and practices applied in
preparation of the 2000 Audited Financial Statements (the "CLOSING DATE BALANCE
SHEET") and (ii) prepare or cause to be prepared from the Closing Date Balance
Sheet a Schedule of Net Working Capital of the New Group as of the Closing Date
(the "CLOSING NET WORKING CAPITAL") prepared in accordance with SCHEDULE 1.3(b)
and (iii) shall cause a copy of the Schedule of Net Working Capital to be
delivered to Seller together with a report thereon of Purchaser's accountants
stating that the Closing Net Working Capital was determined in accordance with
the methodologies set forth on SCHEDULE 1.3(b) hereof.
(b) STATEMENT OF OBJECTIONS. Unless Seller provides written notice to
Purchaser setting forth in reasonable detail its good faith objection to any
portion of the Closing Date Balance Sheet relating to the calculation of the
Closing Net Working Capital on the basis that such portion shall not have been
prepared in accordance with GAAP consistent with the accounting principles and
practices applied in preparation of the 2000 Audited Financial Statements and/or
that the Closing Net Working Capital was not calculated in accordance with the
methodologies set forth on SCHEDULE 1.3(b) of this Agreement (the "STATEMENT OF
OBJECTIONS") prior to the close of business on the forty-fifth (45th) day
following the receipt by Seller of the Closing Date Balance Sheet from Purchaser
(the "OBJECTION PERIOD"), the Closing Date Balance Sheet (and the Closing Net
Working Capital reflected in and calculated from such Closing Date Balance
Sheet) shall thereafter be binding upon Seller and its Affiliates and Purchaser
for purposes of the post-closing adjustments set forth in this SECTION 1.4. If
Seller delivers to Purchaser a Statement of Objections before the expiration of
the Objection Period, then those elements of the Closing Net Working Capital
objected to in the Statement of Objections shall not thereafter be binding on
Seller or its Affiliates until resolved in accordance with this SECTION 1.4.
(c) RESOLUTION OF OBJECTIONS.
(i) Seller and Purchaser shall discuss the objections set forth in
the Statement of Objections in good faith and shall attempt to resolve such
objections. If Seller and Purchaser reach agreement with respect to any
objection, such agreement shall be reflected in a written amendment to the
Closing Date Balance Sheet by Seller and Purchaser and shall be conclusive,
final and binding on the parties hereto. The Closing Date Balance Sheet, as
amended finally by the parties, and, if necessary, by the Accounting Expert, is
referred to herein as the "FINAL CLOSING DATE BALANCE SHEET" (and the resultant
Closing Net Working Capital as reflected in and calculated from such Final
Closing Date Balance Sheet is referred to herein as the "FINAL CLOSING NET
WORKING CAPITAL") and shall become binding upon Seller, its Affiliates and
Purchaser for purposes of the post-closing adjustments set forth in this SECTION
1.4.
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(ii) If Seller and Purchaser do not reach such written agreement
by the close of business on the fourteenth (14th) day following delivery to
Purchaser of the Statement of Objections, Purchaser and Seller will jointly
select the Chicago office of one of the three (3) largest United States
independent certified public accountants (other than Ernst & Young LLP and
Xxxxxx Xxxxxxxx LLP) (the "ACCOUNTING EXPERT"), which, acting as an expert and
not as an arbitrator, shall resolve those matters in dispute with respect to the
Closing Date Balance Sheet and the Closing Net Working Capital. If Purchaser and
Seller fail to agree on an Accounting Expert within fifteen (15) days after the
receipt by Purchaser of the Statement of Objections, either Purchaser or Seller
may request the American Arbitration Association to appoint an Accounting Expert
(or another accounting firm if all three (3) accounting firms decline to accept
or are disqualified from accepting the dispute), and such appointment shall be
conclusive and binding upon Seller and its Affiliates and Purchaser.
(iii) Within ten (10) days after the engagement of the Accounting
Expert, Seller and Purchaser shall provide the Accounting Expert with copies of
(A) this Agreement, (B) the schedule setting forth the Target Net Working
Capital, (C) the Closing Date Balance Sheet and the Schedule of Closing Net
Working Capital, (D) any amendments to the Closing Date Balance Sheet, (E) the
Subsequent Audited Financial Statements, (F) the Final Stub Period Financial
Statements (if then available), (G) the Statement of Objections and (H) a
written submission from each of Seller and Purchaser setting forth their
respective positions with respect to each item remaining in dispute that was
also described in the Statement of Objections or, in the case of Purchaser,
other matters arising directly out of such remaining items in the Statement of
Objections.
(iv) The Accounting Expert's engagement will be limited to (A)
reviewing the items placed in dispute pursuant to clause (iii)(H) above, (B)
reviewing the written submissions provided by Seller and Purchaser pursuant to
clause (iii)(H) above, (C) determining the appropriate and correct amounts for
any item in dispute in the Closing Net Working Capital in accordance with
SECTION 1.4(a) hereof; PROVIDED, that in resolving a disputed item, the
Accounting Expert may not assign a value of any particular item greater than the
greatest value of such item claimed by either party or less than the smallest
value for such item claimed by either party, in each case as presented to the
Accounting Expert and (D) preparing the Final Closing Date Balance Sheet and
calculating the Final Closing Net Working Capital, which will include those
amounts in the Closing Date Balance Sheet accepted by Seller pursuant to SECTION
1.4(b), those amounts agreed to by Seller and Purchaser in any written amendment
to the Closing Date Balance Sheet and those amounts determined by the Accounting
Expert pursuant to subclause (C) of this clause (iv).
(v) The Accounting Expert shall complete its preparation of the
Final Closing Date Balance Sheet as soon as practicable and in any event within
forty-five (45) days after its engagement (or such other time as Purchaser and
Seller shall agree in writing), and shall deliver a copy of the Final Closing
Date Balance Sheet (and the associated calculation of the Final Closing Net
Working Capital) to Seller and to Purchaser, together with a report setting
forth each disputed adjustment, the Accounting Expert's determination with
respect thereto and a statement of the Accounting Expert's reasons for such
determination. The Final Closing Date Balance Sheet prepared by the Accounting
Expert and the Final Closing Net Working Capital
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calculated by the Accounting Expert shall be conclusive and binding on Seller
and its Affiliates and Purchaser and its Affiliates.
(vi) Notwithstanding any other provision of this Agreement,
including, but not limited to, any provision stating that remedies shall be
cumulative and not exclusive, this SECTION 1.4 provides the sole and exclusive
method for resolving any and all disputes of each and every nature whatever that
may arise between or among the parties with respect to the Closing Net Working
Capital and the Closing Date Balance Sheet. All parties hereto hereby
irrevocably waive, relinquish and surrender all rights to, and agree that they
will not attempt to resolve any such dispute or disputes in any manner other
than as set forth in this SECTION 1.4(c), including, but not limited to,
litigation. All parties hereto further agree that if one or more of them should
initiate any attempt to resolve any such dispute or disputes in any manner other
than the sole and exclusive manner set forth in THIS SECTION 1.4(c), such
initiator or initiators shall pay and reimburse all fees, costs and expenses
incurred by any other party hereto as a result of, in connection with or related
to said attempt or attempts. The parties hereto intend their respective
agreements in this SECTION 1.4(c) to be binding on all of their respective
Affiliates and Representatives that seek to assert any claim or action in their
name or on their behalf.
(d) NET WORKING CAPITAL ADJUSTMENT.
(i) If (A) the Target Net Working Capital exceeds the Final
Closing Net Working Capital and (B) the Estimated Closing Net Working Capital
exceeds the Final Closing Net Working Capital, Seller shall pay to Purchaser an
amount equal to (x) the Target Net Working Capital MINUS the Estimated Working
Capital Adjustment Amount (if any), MINUS (y) the Final Closing Net Working
Capital.
(ii) If (A) the Target Net Working Capital exceeds or equals the
Final Closing Net Working Capital and (B) the Estimated Closing Net Working
Capital is less than the Final Closing Net Working Capital, Purchaser shall pay
to Seller an amount equal to (x) the Final Closing Net Working Capital MINUS (y)
the Estimated Closing Net Working Capital.
(iii) If (A) the Final Closing Net Working Capital exceeds the
Target Net Working Capital by at least $2.5 million and (B) the Closing occurs
during a Two-Way Adjustment Period as set forth on the table in Section D of
SCHEDULE 1.3(b) hereof, Purchaser shall pay to Seller an amount equal to (x)
one-half (1/2) of the lesser of (1) (I) the Final Closing Net Working Capital
minus the Target Net Working Capital, minus (II) $2.5 million, or (2) $2.5
million, plus (y) the Estimated Working Capital Adjustment Amount (if any).
(iv) If (A) the Final Closing Net Working Capital exceeds the
Target Net Working Capital, but the excess is less than $2.5 million, and (B)
the Closing occurs during a Two-Way Adjustment Period as set forth on the table
in SECTION D of SCHEDULE 1.3(b) hereof, Purchaser shall pay to Seller an amount
equal to the Estimated Working Capital Adjustment Amount (if any).
(v) If (A) the Final Closing Net Working Capital exceeds the
Target Net Working Capital and (B) the Closing occurs during a One-Way
Adjustment Period as set
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forth on the table in SECTION D of SCHEDULE 1.3(b) hereof, Purchaser shall pay
to Seller an amount equal to the Estimated Working Capital Adjustment Amount (if
any).
(vi) Any payment required to be made pursuant to this SECTION
1.4(d) shall be paid by Seller to Purchaser, or by Purchaser to Seller, as the
case may be, within five (5) Business Days of the final determination of the
Final Closing Net Working Capital.
(e) PAYMENT OF ADJUSTMENT AMOUNTS. All payments under this SECTION 1.4
shall be made in cash by wire transfer of immediately available funds to a bank
account or bank accounts designated by Purchaser or Seller, as appropriate, in
writing. Any amount payable under this SECTION 1.4 shall be paid within five (5)
Business Days of the time such amounts are finally determined and become binding
on the parties hereto pursuant to this Section 1.4, such final determination to
be evidenced by a written acknowledgment of Purchaser and Seller to such effect
or, in the absence thereof, a written determination pursuant to SECTION 1.4(c)
of this Agreement by the Accounting Expert.
(f) FEES OF ACCOUNTING EXPERT. In the event any dispute is submitted to
the Accounting Expert for resolution as provided in SECTION 1.4(c) of this
Agreement, Seller and Purchaser shall each be responsible for 50% of the fees,
charges and expenses of the Accounting Expert and any arbitrator appointed
pursuant to this SECTION 1.4, if applicable.
(g) ACCESS TO INFORMATION. Purchaser and its accountants and Parent and
its accountants will make the work papers and back-up materials used in
preparing the Balance Sheet and the Closing Date Balance Sheet, and the books,
records and financial staff of the Companies, available to the other party and
their accountants and other Representatives, and to the Accounting Expert at
reasonable times and upon reasonable notice at any time during (i) the
preparation by Purchaser of the Closing Date Balance Sheet, (ii) the review by
Seller of the Closing Date Balance Sheet, and (iii) the resolution by the
parties hereto and the Accounting Expert of any objections thereto. If
requested, Purchaser and its Affiliates' and Purchaser's accountants will sign a
customary accountants' letter required by Parent's accountants prior to a review
of work papers and Parent and its Affiliates and Parent's accountants will sign
a customary accountants' letter required by Purchaser's accountants prior to a
review of work papers.
(h) ALLOCATION OF CANADIAN PURCHASE PRICE. The net book value (in USD)
of the inventories and accounts receivable which are included in the Canadian
Assets LESS the Canadian Liabilities (each, as reflected in the Final Closing
Date Balance Sheet) plus $100,000 shall be deemed for all purposes of this
Agreement and the Canadian Purchase Agreement to be the "CANADIAN PURCHASE
PRICE" (as defined in the Canadian Purchase Agreement), and if such amount is
greater or less than the Canadian Purchase Price initially established in the
Canadian Purchase Agreement, the initial Purchase Price of $275,500,000
hereunder shall be deemed to have been decreased or increased by a corresponding
amount.
SECTION 1.5 CLOSING. Upon the terms and subject to the conditions of
this Agreement, unless previously terminated in accordance with ARTICLE IX of
this Agreement, the closing of the transactions contemplated hereby (the
"CLOSING") shall be held at the offices of Xxxxxx & Xxxxxxx, 000 X. Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx (a) on the
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later of: (i) April 1, 2002 and (ii) the last day of the month of the date on
which all conditions to the obligations of the parties set forth in ARTICLE VII
of this Agreement (other than conditions which are not capable of being
satisfied until the Closing Date) have been satisfied or waived (the
"SATISFACTION DATE") (except if the Satisfaction Date is April 1, 2002, the
Closing shall occur on April 1, 2002), PROVIDED, HOWEVER, that if such day is
not a Business Day, the Closing shall be on the first Business Day of the
following month, (b) or at such other place or at such other time as Seller and
Purchaser may agree upon in writing (the day on which the Closing takes place
being the "CLOSING DATE"). For purposes of this Agreement, the time of the
Closing shall be deemed to be at 6:59 a.m., local time in Monaca, Pennsylvania,
regardless of the actual time of Closing on the Closing Date.
SECTION 1.6 CLOSING DELIVERIES BY SELLER. At the Closing, Seller shall
deliver to Purchaser each of the following deliverables:
(a) STOCK CERTIFICATES. Certificates evidencing (i) the Shares, duly
endorsed in blank or accompanied by stock powers duly executed in blank, in form
reasonably satisfactory to Purchaser and with any required stock transfer tax
stamps affixed and (ii) all equity interests in AHCGC.
(b) RECEIPT. A receipt for the Closing Payment.
(c) OFFICER'S CERTIFICATE. A certificate signed by an appropriate
officer of Parent to the effect that each of the conditions specified in
SECTIONS 7.2(a) and (b) hereof has been satisfied.
(d) SECRETARY'S CERTIFICATE. A certificate executed by the Secretary or
an Assistant Secretary of each of Parent, Operating Company and each of the
Companies certifying as of the Closing Date (a) a true and complete copy of the
certificate of incorporation of each of the Companies; (b) a true and complete
copy of the bylaws of each of the Companies; (c) a true and correct copy of the
resolutions of the board of directors of Parent, Seller, Operating Company
(including as a stockholder of Seller), Canadian Seller and Newco authorizing
the execution, delivery and performance by Parent, Seller, Operating Company,
Canadian Seller and Newco of this Agreement and the Ancillary Agreements to
which each is a party and the consummation of the transactions contemplated by
this Agreement; (d) true and complete written consents (in lieu of a meeting) of
Operating Company, as shareholder of Seller, approving the transactions
contemplated by this Agreement and (e) incumbency matters.
(e) ANCILLARY AGREEMENTS. Executed Ancillary Agreements to which
Parent, the Companies or any of their respective Affiliates is a party.
(f) GOOD STANDING CERTIFICATES. Certificates of the appropriate
Secretary of State or Governmental Authority certifying the good standing of
Parent, Canadian Seller and each of the Companies in its respective state or
jurisdiction of incorporation and each of the Companies' good standing, to the
extent applicable, in the states of Ohio and Pennsylvania.
(g) ASSET TRANSFER DOCUMENTS. Executed Asset Transfer Documents, in
form and substance reasonably satisfactory to Purchaser.
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(h) FIRPTA CERTIFICATE. A statement (in form and substance reasonably
satisfactory to Purchaser) that satisfies Purchaser's obligations under
Regulation Section 1.1445-2(b)(2).
(i) CUSTOMER BUYBACKS. A list of all Contracts with respect to which
any of the Companies may be obligated to, during the twelve (12) months
following the Closing, repurchase $50,000 or more of products from customers
pursuant to "buyback" or similar repurchase commitments in such Contracts.
(j) FOODSERVICE ASSET TRANSFER DOCUMENTS. Executed Foodservice Asset
Transfer Documents, in form and substance reasonably satisfactory to Purchaser.
SECTION 1.7 CLOSING DELIVERIES BY PURCHASER. At the Closing, Purchaser
shall deliver to Seller each of the following deliverables:
(a) CLOSING PAYMENT. The Closing Payment by wire transfer in
immediately available funds to Seller Bank Account.
(b) RECEIPT. A receipt for the Shares.
(c) OFFICER'S CERTIFICATE. A certificate signed by an appropriate
officer of Purchaser as to the effect that each of the conditions specified
above in SECTIONS 7.1(a) and (b) hereof has been satisfied.
(d) SECRETARY'S CERTIFICATE. A certificate executed by the Secretary or
an Assistant Secretary of Purchaser and Canadian Purchaser certifying as of the
Closing Date a true and correct copy of the resolutions of the board of
directors of Purchaser and Canadian Purchaser authorizing the execution,
delivery and performance by Purchaser and its Affiliates of this Agreement and
the Ancillary Agreements to which each is a party and the consummation of the
transactions contemplated by this Agreement.
(e) ANCILLARY AGREEMENTS. Executed Ancillary Agreements to which
Purchaser or any of its Affiliates is a party.
(f) GOOD STANDING CERTIFICATE. A certificate of the Secretary of State
or other Governmental Authority certifying the good standing of Purchaser and
Canadian Purchaser in their respective states or jurisdictions of incorporation.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
Seller and Parent, jointly and severally, represent and warrant to
Purchaser as follows:
SECTION 2.1 ORGANIZATION. Each of the Companies is a corporation, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, has all requisite power to own its properties and
to carry on its business as it is now being conducted and is duly licensed or
qualified to do business in each jurisdiction in which the nature
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of its business or the ownership or leasing of its properties makes such license
or qualification necessary, except where the failure to be so licensed or
qualified would not materially and adversely affect such Company's rights or
privileges in Ohio or Pennsylvania or otherwise have a Material Adverse Effect.
Complete and correct copies of the certificate of incorporation and bylaws of
each of the Companies have been made available to Purchaser. The minute books
(containing the records of meetings of the stockholders, the board of directors,
and any committees of the board of directors), the stock certificate books and
the stock record books of the Companies have been made available to Purchaser
and such materials are correct and complete with respect to Newco and correct in
all material respects with respect to AHCGC.
SECTION 2.2 AUTHORITY; ENFORCEABILITY. Each of Parent, Operating
Company, Seller and Newco have the requisite corporate power and authority to
execute and deliver this Agreement and the Ancillary Agreements to which each is
or will be a party and to perform their respective obligations hereunder and
thereunder and to consummate the transactions contemplated by this Agreement.
The execution and delivery by Parent, Operating Company, Seller and Newco of
this Agreement and the Ancillary Agreements to which each is or will be a party
and the performance by Parent, Operating Company, Seller and Newco of their
respective obligations hereunder and thereunder have been duly authorized by all
necessary corporate action on the part of Parent, Operating Company, Seller and
Newco. The Agreement and the Canadian Purchase Agreement have been and each of
the other Ancillary Agreements will be executed and delivered, by Parent,
Operating Company, Seller and Newco, each to the extent party thereto, and,
assuming due authorization, execution and delivery by Purchaser or its Affiliate
party thereto, constitute, or upon execution will constitute, a legal, valid and
binding agreement of Parent, Seller, Newco and Operating Company, each to the
extent party thereto, enforceable against such party in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
SECTION 2.3 NON-CONTRAVENTION. Except as set forth in SECTION 2.3 of
the Disclosure Schedule attached hereto (the "DISCLOSURE SCHEDULE"), the
execution, delivery and performance by Parent, Operating Company, Canadian
Seller and each of the Companies of this Agreement and the Ancillary Agreements
to which each of the foregoing are or will be a party and the consummation of
the transactions contemplated by this Agreement do not and will not (a) violate,
conflict with or result in the breach of any provision of the certificate of
incorporation or by-laws of Parent, Operating Company, Canadian Seller or the
Companies, (b) violate any Law or Governmental Order applicable to Parent,
Operating Company, Canadian Seller, the Companies or any of their respective
assets or properties, which violation would be reasonably likely (i) to affect
or limit materially and adversely the ownership, use or operation of (I) any Key
Facility or material portion thereof, (II) any Asset material to the operation
of the Business as presently conducted or (III) any material aspect of the
Business or (ii) to result in a penalty or fine in excess of $10,000 or (iii) to
result in any criminal liability or (iv) to have a Material Adverse Effect, (c)
result in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require any
Consent under (other than Consents from Governmental Authorities, which are
subject to SECTION 2.4), or give to others any rights of termination, amendment
or acceleration of any Material Contract, or
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(d) result in the creation of any material Encumbrance on any of the Shares or
on any Asset material to the operation of the Business as presently conducted.
SECTION 2.4 GOVERNMENTAL CONSENTS. Except for (a) the Consents set
forth in SECTION 2.4 of the Disclosure Schedule, (b) filings required under the
HSR Act or similar competition or antitrust Laws of any foreign jurisdiction and
(c) filings that may be required under the Exchange Act, no Consent is required
to be obtained by Parent, Operating Company or the Companies or any Affiliate
thereof, and no notice or filing is required to be given by or made by Parent or
the Companies or any of their respective Affiliates with, any Governmental
Authority in connection with the execution, delivery and performance by Parent,
Operating Company or the Companies of this Agreement or any Ancillary Agreements
to which any of them is or will be a party or the consummation of the
transactions contemplated by this Agreement or any Ancillary Agreement, which if
not obtained would be reasonably likely (i) to affect or limit materially and
adversely the ownership, use or operation of (I) any Key Facility or material
portion thereof, (II) any Asset material to the operation of the Business as
presently conducted or (III) any material aspect of the Business or (ii) to
result in a penalty or fine in excess of $10,000 or (iii) to result in any
criminal liability or (iv) to have a Material Adverse Effect.
SECTION 2.5 CAPITAL STOCK OF NEWCO AND AHCGC. Set forth on SECTION 2.5
of the Disclosure Schedule is the number of authorized, issued and outstanding
shares of capital stock of each of Newco and AHCGC. All of the Shares have been
validly issued, are fully paid and nonassessable and have not been issued in
violation of any preemptive or similar rights or any Law. There are no
outstanding options, warrants, calls, rights or any other agreements relating to
the sale, issuance or voting of any shares of the capital stock of Newco or
AHCGC, or any securities or other instruments convertible into, exchangeable for
or evidencing the right to purchase any shares of capital stock of Newco or
AHCGC. There are no outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to AHCGC or Newco. The
transfer and delivery of the Shares by Seller to Purchaser as contemplated by
this Agreement will transfer good and valid title to the Shares to Purchaser,
free and clear of all Encumbrances.
SECTION 2.6 SUBSIDIARIES. Except as set forth on SECTION 2.6 of the
Disclosure Schedule, there is no Person in which any of the Companies directly
or indirectly owns any equity or other ownership interest other than Newco and
AHCGC. All of the shares of capital stock of Newco and AHCGC are owned
beneficially and of record by Seller, free and clear of any Encumbrances and
upon the consummation of the Asset Transfer Transaction, all of the shares of
capital stock of AHCGC will be owned, free and clear of any Encumbrances by
Newco.
SECTION 2.7 FINANCIAL INFORMATION.
(a) INITIAL FINANCIAL STATEMENTS. Section 2.7(i) of the Disclosure
Schedule contains true, correct and complete copies of the (i) the unaudited
consolidated balance sheet of the Division at December 31, 2000 (the "BALANCE
SHEET," and the date of such Balance Sheet, the "BALANCE SHEET DATE") and the
unaudited consolidated statements of income, cash flows and stockholders equity
of the Division for the year ended December 31, 2000 (the "2000 UNAUDITED
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FINANCIAL STATEMENTS") and (ii) unaudited consolidated balance sheet of the
Division at March 31, 2001 and the unaudited consolidated statements of income,
cash flows and stockholders equity of the Division for the three month period
ended March 31, 2001 (all of the financial statements referred to in clauses (i)
and (ii) are collectively referred to herein as the "INITIAL FINANCIAL
STATEMENTS"). The Initial Financial Statements (A) except as set forth in
SECTION 2.7(ii) of the Disclosure Schedule, each fairly present in all material
respects the consolidated financial condition, results of operations, cash flows
and stockholders equity of the Division as of the dates thereof or for the
periods covered thereby and are consistent in all material respects with the
Books and Records of Parent and its Affiliates (as so consolidated) and (B) have
been prepared in accordance with GAAP consistent with the accounting principles
and practices applied in preparation of the 2000 Unaudited Financial Statements,
applied on a consistent basis throughout the periods indicated (except as may be
clearly and specifically indicated in the notes to the 2000 Unaudited Financial
Statements), subject, in the case of the unaudited consolidated financial
statements for the three month period ended March 31, 2001, to normal and
recurring year-end adjustments that are not expected to be material in amount.
The foregoing representation as to the Initial Financial Statements shall
terminate upon waiver or expiration of the termination right of Purchaser set
forth in SECTION 9.1(c) or, if no such termination right shall ever arise upon
the delivery of the Audited Financial Statements to Purchaser pursuant to
SECTION 4.18.
(b) AUDITED FINANCIAL STATEMENTS. The (i) audited consolidated balance
sheet of the Division at December 31, 2000, and the audited consolidated
statement of income, cash flows and stockholders equity of the Division for the
year ended December 31, 2000 (the "2000 AUDITED FINANCIAL STATEMENTS") and (ii)
the audited consolidated balance sheets of the Division at December 31, 1999 and
December 31, 1998 and the audited consolidated statements of income, cash flows
and stockholders equity of the Division for the years ended December 31, 1999
and 1998 (all of the financial statements referred in clauses (i) and (ii) are
collectively referred to herein as the "AUDITED FINANCIAL STATEMENTS") and (iii)
unaudited consolidated balance sheet and statement of income, cash flows and
stockholders equity at and for the three month period ended March 31, 2001 (the
"INTERIM FINANCIAL STATEMENTS," which together with the Audited Financial
Statements, are collectively referred to herein as the "SUBSEQUENT FINANCIAL
STATEMENTS") shall (A) except as set forth in SECTION 2.7(ii) of the Disclosure
Schedule as of the Execution Date, each fairly present in all material respects
the consolidated financial condition, results of operations, cash flows and
stockholders equity of the Division as of the dates thereof or for the periods
covered thereby and shall be consistent in all material respects with the Books
and Records of Parent and its Affiliates (as so consolidated) and (B) have been
prepared in accordance with (x) GAAP consistent with the accounting principles
and practices applied in preparation of the 2000 Unaudited Financial Statements,
applied on a consistent basis throughout the periods indicated (except as may be
clearly and specifically indicated in the notes to the Audited Financial
Statements), subject, in the case of the Interim Financial Statements, to normal
and recurring year-end adjustments that are not expected to be material in
amount and (y) Regulation S-X.
(c) FINAL STUB PERIOD FINANCIAL STATEMENTS. The unaudited consolidated
balance sheets and year to date statements of income, cash flows and
stockholders equity of the Division at and for the most recently ended year to
date quarterly period between December 31,
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2001 and the Closing Date (the "FINAL STUB PERIOD FINANCIAL STATEMENTS") when
provided pursuant to SECTION 4.18(b) will (A) except as set forth in SECTION
2.7(ii) of the Disclosure Schedule as of the Execution Date, fairly present in
all material respects the consolidated financial condition, results of
operations, cash flows and stockholders equity of the Division as of the date
thereof or for the period covered thereby and shall be consistent in all
material respects with the Books and Records of Parent and its Affiliates (as so
consolidated) and (B) have been prepared in accordance with (x) GAAP consistent
with the accounting principles and practices applied in preparation of the 2000
Audited Financial Statements, applied on a consistent basis throughout the
periods indicated, subject to normal and recurring year-end adjustments that are
not expected to be material in amount and (y) Regulation S-X.
(d) 2001 AUDITED FINANCIAL STATEMENTS. The audited consolidated balance
sheet of the Division at December 31, 2001 and the audited consolidated
statements of income, cash flows and stockholders equity of the Division for the
year ended December 31, 2001 (the "2001 AUDITED FINANCIAL STATEMENTS") when
provided will (A) except as set forth in SECTION 2.7(ii) of the Disclosure
Schedule as of the Execution Date, fairly present in all material respects the
consolidated financial condition, results of operations, cash flows and
stockholders equity of the Division as of the date thereof or for the period
covered thereby and shall be consistent in all material respects with the Books
and Records of Parent and its Affiliates (as so consolidated) and (B) have been
prepared in accordance with (x) GAAP consistent with the accounting principles
and practices applied in preparation of the 2000 Audited Financial Statements,
applied on a consistent basis throughout the periods indicated (except as may be
clearly and specifically indicated in the notes to the 2001 Audited Financial
Statements) and (y) Regulation S-X.
(e) FOODSERVICE STATEMENTS. The allocations and estimates, including
without limitation, the allocation of revenues and expenses and assets and
liabilities, which are to be reflected in each of (i) the Foodservice Annual Pro
Forma Statements and (ii) the Foodservice Stub Period Pro Forma Statements, will
be reasonable and will be made in good faith and in accordance with the
methodologies set forth in the footnotes of each such statement and will be
accompanied by an Independent Public Accountants' Report on Applying Agreed-Upon
Procedures. Such methodologies (A) with respect to the Foodservice Annual Pro
Forma Statements, shall be consistently, in all material respects, applied
across all of the periods which are the subject of the Foodservice Annual Pro
Forma Statements, and (B) with respect to the Foodservice Final Stub Period Pro
Forma Statements, will in all material respects utilize and consistently apply
the procedures and methodologies utilized in preparation of the Foodservice
Annual Pro Forma Statements, except for such changes that may be made to
appropriately reflect the actual Retention and the transactions contemplated by
SECTIONS 4.33 and 4.37 herein. Such Independent Public Accountants' Reports on
Applying Agreed-Upon Procedures, will apply such methodologies consistently
across all such periods, in all material respects, except as otherwise expressly
provided therein and except for such changes that may be made to appropriately
reflect the actual Retention and the transactions contemplated by SECTIONS 4.33
and 4.37 herein. The allocations and estimates which are to be reflected in the
Foodservice 2001 Quarterly Period Pro Forma Statements, will be reasonable and
will be made in good faith and in accordance with the procedures and
methodologies set forth in the footnotes of each such referenced statements,
which will be applied, in all material respects, in a manner consistent with
those utilized in the preparation of the Foodservice Annual Pro Forma
Statements.
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(f) ADJUSTED DIVISION STATEMENTS. The allocations and estimates which
are to be reflected in each of (i) the Adjusted Division 2000 and 1999 Pro Forma
Statements, (ii) the Adjusted Division 2001 Pro Forma Statements, (iii) the
Adjusted Division Final Stub Period Pro Forma Statements, and (iv) the Adjusted
Division 2001 Quarterly Period Pro Forma Statements, will be reasonable and will
be made in good faith and in accordance with the procedures and methodologies
set forth in the footnotes of the respective statements and such procedures and
methodologies will be applied consistently, in all material respects, across all
such periods.
SECTION 2.8 NO UNDISCLOSED LIABILITIES. Except as set forth in SECTION
2.8 of the Disclosure Schedule, the Business has no Liabilities of the type
required by GAAP to be set forth on a balance sheet, other than Liabilities (a)
reflected or reserved against on the Balance Sheet or (b) incurred since the
Balance Sheet Date in the Ordinary Course of Business.
SECTION 2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
2000 through the Execution Date, except as set forth in SECTION 2.9 of the
Disclosure Schedule, the Companies and the Canadian Seller have conducted the
Business in the Ordinary Course of Business and, since December 31, 2000, there
has not been (a) any event, occurrence, change, circumstance or development that
has had or would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, or (b) any action taken by the Companies or with
respect to the Business during the period from December 31, 2000 through the
Execution Date that, if taken during the period from the Execution Date through
the Closing Date, would constitute a breach of SECTION 4.1 hereof (excluding
subparts (ii), (v), (xvii) and (xxv) of SECTION 4.1), other than as expressly
provided hereunder or described in SECTION 2.9 the Disclosure Schedule.
SECTION 2.10 CONTRACTS.
(a) SECTION 2.10 of the Disclosure Schedule sets forth a true, complete
and correct list of the following Contracts relating to the Business or to which
AHCGC is a party (excluding in every case any Foodservice Contracts) which are
in effect as of the Execution Date (the "MATERIAL CONTRACTS" which term shall
include the Contracts required to be disclosed pursuant to SECTION 2.16(c),
SECTION 2.16(d) and SECTION 2.15(b)), other than (1) the Ancillary Agreements,
(2) the Contracts included in the Excluded Seller Assets and (3) those Contracts
required to be listed or described in SECTIONS 2.14(a), 2.15(b), 2.16(c)(i),
2.16(c)(ii), 2.16(d), 2.16(e), 2.18(a) or 2.28(c) of the Disclosure Schedule:
(i) any Contract containing covenants limiting the freedom of any
of the Companies after the Execution Date to engage in any line of business in
any geographic area or to compete with any Person;
(ii) any Contract establishing a partnership, limited liability
company or joint venture;
(iii) any Contract relating to the obligation of any of the
Companies to officers or directors (other than in their capacity as an Employee)
of any of the Companies or any Affiliate thereof;
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(iv) any Contract with any Company relating to the creation,
incurrence, assumption or guarantee of indebtedness for borrowed money
(including capitalized lease obligations);
(v) any Contract for the lease of personal property to or from any
Person providing for lease payments (individually or in the aggregate under any
master or universal lease agreement) in excess of $100,000 per annum with
respect to the Business;
(vi) any Encumbrance on the Assets (other than Permitted
Encumbrances);
(vii) any guaranty of performance or any guaranty of Liabilities
of any Person other than a Company;
(viii) any Contract (other than one subject to clause (ix) below)
relating to the purchase or disposition of any assets, properties or business
involving consideration or assets having a fair market value in excess of
$500,000 with respect to the Business;
(ix) any Contract (or series of related Contracts) (other than
customer Contracts which are subject to clause (xvii) below) for the purchase of
raw materials, commodities, supplies, products, or other personal property, or
for the furnishing or receipt of services, the performance of which is
reasonably anticipated to extend over a period of more than twelve (12) months
or involve consideration in excess of $500,000 with respect to the Business from
one supplier, excluding those which are cancelable by the applicable Company
within ninety (90) days after notice without premium, penalty or a termination
payment;
(x) any Contracts for capital expenditures in excess of $500,000
individually with respect to the Business;
(xi) any hedging arrangements with respect to the Business;
(xii) any written Contract (other than a Company Benefit Plan and
other than Contracts that are Excluded Seller Assets and Excluded Seller
Liabilities) concerning the employment of any Person on a full-time, part-time,
consulting, or other basis whose compensation, including bonuses paid in the
past twelve (12) months and excluding benefits under Company Benefit Plans, is
in excess of $75,000 per annum;
(xiii) any Contract for the advance or loan of any amount to any
director, officer or employee of the Companies other than for reimbursement of
expenses in the Ordinary Course of Business;
(xiv) any Contract with a distributor or sales representative for
the distribution or sale of products, materials or supplies for which payments
in excess of $500,000 per annum have been made or received, which Contract is
not cancelable by the Company within ninety (90) days after notice without
premium, penalty or a termination payment;
(xv) any Contract (other than any Contract listed or described in
SECTION 2.10 of the Disclosure Schedule or the Contracts required to be listed
or described in SECTIONS
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2.14(a), 2.15(b), 2.16(c)(i), 2.16(c)(ii), 2.16(d), 2.16(e), 2.18(a) or 2.28(c)
of the Disclosure Schedule), with respect to which the consequences of an
Adverse Event would be reasonably expected to have a Material Adverse Effect;
(xvi) any Contract (other than an Excluded Seller Asset) with any
Governmental Authority;
(xvii) any Contract (or series of related Contracts) for the sale
to customers of products of the Business, the performance of which is reasonably
anticipated to extend over a period of more than twelve (12) months; or
(xviii) any other Contracts involving payments of $250,000 with
respect to the Business in any twelve (12) month period, entered into outside
the Ordinary Course of Business.
(b) Seller has delivered or made available to Purchaser a correct and
complete copy of each Material Contract. Except as set forth on SECTION 2.10(B)
of the Disclosure Schedule, with respect to each of the Material Contracts, (i)
such Material Contract is legal, valid and binding on the Company that is party
to such Contract and, to Seller's Knowledge, each other party thereto, and is in
full force and effect as to each Company party thereto and, to Seller's
Knowledge, each other party thereto, (ii) such Material Contract is enforceable
against each Company party thereto and, to Seller's Knowledge, each other party
thereto; (iii) none of Seller, Parent, the Companies or any of their Affiliates
is in breach or default thereunder and, to Seller's Knowledge (A) no other party
is in material breach or default thereunder, and (B) no event has occurred which
with notice or lapse of time would constitute a material breach or default, or
permit termination, material modification, or acceleration thereunder and (iv)
to Seller's Knowledge, there are no pending renegotiations of any material
provisions thereof outside the Ordinary Course of Business.
SECTION 2.11 COMPLIANCE WITH LAW. Except as disclosed on SECTION 2.11
of the Disclosure Schedule, each of the Companies is in compliance in all
material respects with all Laws and Governmental Orders applicable to it or the
Business. This SECTION 2.11 shall not apply to compliance matters which are the
subject of SECTION 2.14(d) or SECTION 2.17.
SECTION 2.12 PERMITS. Except as disclosed in SECTION 2.12 of the
Disclosure Schedule, (i) Seller and AHCGC possess, and upon consummation of the
transactions contemplated by this Agreement Newco, AHCGC and Canadian Purchaser
will possess, all of the Material Permits; (ii) each of the Material Permits is
in full force and effect in all material respects in accordance with its terms;
(iii) none of the Companies or Canadian Seller has received any written notice
of any violation of any Material Permit and no proceeding is pending or, to
Seller's Knowledge, threatened, which could result in the revocation,
termination or material limitation of any Material Permit; (iv) the Companies
and Canadian Seller are in compliance in all material respects with the
requirements of each Material Permit and (v) neither the execution of this
Agreement or the Ancillary Agreements, nor the consummation of the transactions
contemplated by this Agreement will cause or result in an Adverse Event as to a
Material Permit.
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SECTION 2.13 LITIGATION. Except as disclosed in SECTION 2.13(i) of the
Disclosure Schedule, there is no action, suit, arbitration, hearing or
proceeding by or before any Governmental Authority or arbitral body pending or,
to Seller's Knowledge, threatened against the Companies or any of their
respective officers or directors in their capacities as officers or directors of
a Company. None of the Companies is a party to, nor is any Company or the
Business subject to or in default under, any Governmental Order. To Seller's
Knowledge, no pending investigations exist that could give rise to any Action
against any of the Companies or any of their respective officers or directors or
the Business which would be reasonably likely to have a Material Adverse Effect.
To Seller's Knowledge, SECTION 2.13(ii) of the Disclosure Schedule lists all
legal proceedings (other than legal proceedings relating to workers'
compensation or collective bargaining) initiated, pending, settled or otherwise
concluded (whether or not subject to appeal) within the period between October
1, 1998 and the Execution Date involving or relating to the Companies or the
Business (including all legal proceeding initiated by current or former
employees of the Companies or initiated by a Governmental Authority) that (a)
have sought equitable relief being granted with respect to the Companies or the
Business, (b) have sought any damages of $100,000 or more in any claim or an
aggregate of $100,000 or more in any series of related claims or (c) were class
actions or sought certification or other recognition as such.
SECTION 2.14 EMPLOYEE BENEFITS.
(a) SECTION 2.14(a) of the Disclosure Schedule identifies each of the
Company Benefit Plans in effect on the Execution Date. As used herein, "COMPANY
BENEFIT PLANS" shall mean each "employee benefit plan", as defined in Section
3(3) of ERISA (other than any plan described in SECTION 4(b)(4) of ERISA), each
severance or termination, supplemental unemployment or deferred compensation
plan or arrangement and each other material employee fringe benefit plan or
arrangement that is currently maintained by, or otherwise contributed to for the
benefit of the Employees or terminated or retired Employees of the Companies (or
any of their eligible beneficiaries and dependents).
(b) Seller has delivered or otherwise made available to Purchaser true,
correct and complete copies of (i) each Company Benefit Plan listed on SECTION
2.14(a) of the Disclosure Schedule (or, if not written, a written summary of its
material terms), including all plan documents and all amendments thereto, (ii)
all summaries and summary plan descriptions, including any summary of material
modifications, (iii) the most recent actuarial report and other financial
statements relating to each Company Benefit Plan listed on SECTION 2.14(a) of
the Disclosure Schedule and (iv) the most recent determination or opinion
letter, if any, issued by the IRS with respect to any Company Benefit Plan
listed on SECTION 2.14(a) of the Disclosure Schedule and any pending request for
such a determination letter.
(c) (i) none of the Employees of any of the Companies is covered by a
"multiemployer plan" (as defined in Section 3(37) of ERISA) ("MULTIEMPLOYER
PLAN") and (ii) except as set forth on SECTION 2.14(c) of the Disclosure
Schedule, none of the Company Benefit Plans provides or promises post-retirement
health or life benefits to current or former Employees of the, except to the
extent required under any applicable state law or under Section 601 of ERISA.
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(d) Other than with respect to the Company Benefit Plans listed on
SECTION 2.14(a) of the Disclosure Schedule, none of Parent, Operating Company or
the Companies has incurred any cost, fee, expense, Liability, claim, suit,
obligation or other damage under Title IV of ERISA that could give rise to the
imposition of any liability, cost, fee, expense or obligation which would be
reasonably expected to become a liability of Purchaser or any of its Affiliates
and, to Seller's Knowledge, no facts or circumstances exist that could give rise
to any such cost, fee, expense, Liability, claim, suit, obligation or other
damage, which would be reasonably expected to become a liability of Purchaser or
any of its Affiliates. Each Company Benefit Plan which is an "employee pension
benefit plan" as defined in Section 3(2) of ERISA ("COMPANY PENSION PLAN") has
been administered in all material respects in accordance with its terms and all
applicable Laws, including ERISA and the Code, and contributions required to be
made on behalf of Employees under the terms of any of Company Benefit Plans as
of the Execution Date have been timely made or, if not yet due, have been
properly reflected on the Initial Financial Statements of the Division at March
31, 2001.
(e) Except as disclosed on SECTION 2.14(e) of the Disclosure Schedule:
(i) each Company Pension Plan that is intended to qualify under Section 401(a)
of the Code has either received a favorable determination letter from the IRS as
to its qualified status or the remedial amendment period for such Company
Pension Plan has not yet expired, and each trust established in connection with
any Company Pension Plan which is intended to be exempt from federal income
taxation under Section 501(a) of the Code is so exempt, and to Seller's
Knowledge, no fact or event has occurred that could adversely affect the
qualified status of any such Company Pension Plan or the exempt status of any
such trust; (ii) to Seller's Knowledge, there has been no prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code and
other than a transaction that is exempt under a statutory or administrative
exemption) with respect to any Company Pension Plan that could result in a
material Liability to the Companies, (iii) no material Liability under Title IV
of ERISA has been incurred by the Companies, Parent, the Operating Company or
any of their respective Affiliates or any entity required to be combined with
any of the foregoing entities under Section 414(b), Section 414(c), Section
414(m), or Section 414(o) of the Code (an "ERISA AFFILIATE") that has not been
satisfied in full, and no condition exists that presents a material risk to the
Companies or any ERISA Affiliate of incurring or being subject (whether
primarily, jointly or secondarily) to a material Liability thereunder and (vii)
none of the Companies has any Liability under ERISA Section 502.
(f) With respect to each Company Pension Plan that is subject to Title
IV or Part 3 of Title I of ERISA or Section 412 of the Code (other than a
Multiemployer Plan), (i) no filing has been made or is required by law to have
been made with the Pension Benefit Guaranty Corporation ("PBGC") and no
proceeding has been commenced by the PBGC to terminate any Company Pension Plan
and no condition exists which could constitute grounds for the termination of
any such Company Pension Plan by the PBGC and (ii) all premiums (and interest
charges and penalties for late payment, if applicable) have been paid to the
PBGC.
(g) (i) Each Company Benefit Plan can be amended, terminated or
otherwise discontinued at any time in accordance with its terms, without a
material Liability (other than Liability for ordinary administrative expenses
typically incurred in a termination event to the Companies and (ii) no suit,
administrative proceeding, action or other litigation involving
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benefits attributable to any Employee has been brought, or to Seller's
Knowledge, is threatened, against or with respect to any such Company Benefit
Plan, including any audit or inquiry by the IRS or United States Department of
Labor (other than routine benefits claims).
(h) Except as set forth on SECTION 2.14(h) of the Disclosure Schedule,
no amount that could be received (whether in cash or property or the vesting of
property) as a result of the consummation of the transactions contemplated by
this Agreement by any Employee, officer or director of the Companies who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any Company Benefit Plan could be
characterized as an "excess parachute payment" (as defined in Section 280G(b)(1)
of the Code).
(i) The Companies are in material compliance with (i) the requirements
of the applicable health care continuation and notice provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and the
regulations (including proposed regulations) thereunder and any similar state
law and (ii) the applicable requirements of the Health Insurance Portability and
Accountability Act of 1996, as amended, and the regulations (including the
proposed regulations) thereunder
(j) The only employees of AHCGC are Employees.
SECTION 2.15 PROPERTIES.
(a) SECTION 2.15 of the Disclosure Schedule lists and describes by
reference to the owner and common street address all real property owned legally
or beneficially by Seller and used in the Business or owned legally or
beneficially by AHCGC or which is an Outside Asset ("OWNED PROPERTIES"). Except
as described in SECTION 2.15(a) of the Disclosure Schedule, with respect to each
of the parcels constituting the Owned Properties:
(i) the identified owner is the sole beneficial and (where its
interests are registerable) the sole registered owner of its respective parcel
of such Owned Properties, and has good and marketable title to its respective
parcel of such Owned Properties in fee simple, free and clear of any
Encumbrance, except for Permitted Encumbrances;
(ii) there are no pending or, to Seller's Knowledge, threatened
expropriation or condemnation proceedings relating to any of the Owned
Properties which in the aggregate would materially and adversely affect the
current use, occupancy, value or marketability of any of the Owned Properties;
(iii) there are no material structural defects in any of the
buildings or material improvements situated on any of the Owned Properties;
(iv) the building systems (including HVAC systems, plumbing,
electrical, security, utility and fire systems), structures, fixtures or
improvements, owned, leased or used on the Owned Properties are in all material
respects in satisfactory condition and working order (reasonable wear and tear
excepted) and, assuming customary maintenance, repair and rebuilding, adequate
for the operation of the Business as presently conducted;
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(v) other than tenants under any leases, concession agreements,
licenses and the like disclosed in SECTION 2.15(b) of the Disclosure Schedule
who are in possession of space to which they are entitled, there are no leases,
subleases, licenses, concessions, or other agreements (including, with respect
to food services, parking and other concessions), written or oral, granting to
any party or parties the right of use or occupancy of any portion of the parcels
of the Owned Properties;
(vi) there are no outstanding options to purchase, lease or use,
or rights of first refusal to purchase any of the Owned Properties or any
portions thereof or interests therein or contracts relating to the right to
receive any portion of the income or profits from the sale, operation or
development thereof;
(vii) no default or breach exists under any recorded easement,
agreement, covenant or restriction affecting any of the Owned Properties which
would materially detract from the occupancy, marketability or value of the Owned
Property, or materially impair the use of the Owned Properties by the Company in
the operation of the Business as presently conducted;
(viii) there are no parties other than the Companies (or Seller,
Parent and their Affiliates, to the extent any of the Owned Properties is part
of the Outside Assets) in possession of or having a right to occupy any of the
Owned Properties, other than tenants under any leases, concession agreements,
licenses and the like disclosed in SECTION 2.15(b) of the Disclosure Schedule
who are in possession of space to which they are entitled; and
(ix) all Facilities located on the Owned Properties are serviced
and supplied with utilities and other services necessary for the operation of
such facilities, as currently operated.
(b) SECTION 2.15(b) of the Disclosure Schedule lists, as of the
Execution Date, all Leased Properties and indicates the entity which is the
lessee, sublessee or licensee thereof. As used herein, "LEASED PROPERTIES" shall
mean all real property leased, subleased or licensed in connection with the
Business or by AHCGC (the Owned Properties and the Leased Properties are
together the "COMPANY PROPERTIES"). Seller has delivered or made available to
Purchaser correct and complete copies of the leases and subleases listed in
SECTION 2.15(b) of the Disclosure Schedule (as amended to the Execution Date).
With respect to each lease and sublease for a Leased Property:
(i) to the extent the Companies are a subtenant under a sublease,
to Seller's Knowledge, neither the sublessor nor the master landlord is in
breach or default of the master lease and no event has occurred which, with
notice or lapse of time, would constitute a breach or default or permit
termination by either party under the master lease;
(ii) to Seller's Knowledge, there are no disputes, oral
agreements, or forbearance programs in effect as to any lease or sublease;
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(iii) to Seller's Knowledge, with respect to each sublease, the
representations and warranties set forth in subsections (i) and (ii) above are
true and correct with respect to the master lease;
(iv) no tenant or subtenant, as the case may be, has repudiated in
writing any material provision thereof;
(v) there are no material rent deposits not reflected on the
Balance Sheet;
(vi) none of the Companies (and none of Seller, Parent and their
Affiliates, to the extent it relates to the Outside Assets or the Canadian
Assets) has assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the leasehold or subleasehold (except as otherwise
contemplated by the terms of this Agreement);
(vii) to Seller's Knowledge, there are no material structural
defects in any of the buildings or material improvements situated on the Leased
Properties;
(viii) to Seller's Knowledge, the building systems (including HVAC
systems, plumbing, electrical, utility and fire), structures, fixtures or
improvements used by the Companies or Canadian Seller on the Leased Properties
are in all material respects in satisfactory condition and working order
(reasonable wear and tear excepted) and, assuming customary maintenance, repair
and rebuilding, are adequate for the operation of the Business as presently
conducted;
(ix) all Facilities leased or subleased thereunder are supplied
and serviced with utilities and other services necessary for the operation of
said Facilities as currently operated; and
(x) peaceful and undisturbed possession of all of the Leased
Properties are enjoyed by the Company, Parent or Affiliates, indicated as the
lessee, sublessee or licensee on SECTION 2.15(b) of the Disclosure Schedule.
SECTION 2.16 INTELLECTUAL PROPERTY.
(a) Except as set forth in SECTION 2.16(a) of the Disclosure Schedule,
all Intellectual Property necessary for or used in connection with the conduct
of the Business (other than the Excluded Seller Assets and the Foodservice IP
Assets) as presently conducted is owned or licensed for use by the Companies.
(b) SECTION 2.16(b) of the Disclosure Schedule sets forth, as of the
Execution Date, a complete and correct list of all patents, registered
copyrights, registered trademarks and service marks, tradenames, Internet domain
names and all applications for any of the foregoing, owned by the Companies or
any of their Affiliates and necessary for or used in connection with the conduct
of the Business (other than the Excluded Seller Assets and the Foodservice IP
Assets) as presently conducted, and all such Intellectual Property is owned by
the Companies or their Affiliates free and clear of all Encumbrances, and except
for fees and costs required to
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prosecute and maintain such Intellectual Property in effect, none of the
Companies are obligated to make any payments of any kind in respect thereof. The
Companies or their Affiliates have properly maintained and renewed all
registrations and related filings with respect to any registered Intellectual
Property owned by the Companies or any of their Affiliates and necessary for or
used in connection with the conduct of the Business as presently conducted
(other than the Excluded Seller Assets and the Foodservice IP Assets), and have
used commercially reasonable efforts to enforce their rights therein against
infringement or dilution by third parties.
(c) SECTION 2.16(c)(i) of the Disclosure Schedule sets forth a complete
list of all licenses granted by any of the Companies with respect to any
Intellectual Property. SECTION 2.16(c)(ii) of the Disclosure Schedule sets
forth, as of the Execution Date, a complete list of all licenses granted to any
of the Companies with respect to any Intellectual Property (other than computer
software and the Excluded Seller Assets and the Foodservice IP Assets) necessary
for or used in connection with the conduct of the Business as presently
conducted. All Intellectual Property (other than the Excluded Seller Assets and
the Foodservice IP Assets) licensed to any of the Companies and necessary for or
used in connection with the conduct of the Business as presently conducted is
licensed, leased or otherwise used, but not owned by, the Companies pursuant to
terms of a binding Contract (with a Person other than Parent or its Affiliates)
under which the Companies have the right to use such Intellectual Property as
currently used or intended to be used in the Business and there are no royalty
or other fees associated with any such Intellectual Property, at the Execution
Date, except as set forth in written Contracts listed on SECTION 2.16(c)(ii) of
the Disclosure Schedule.
(d) "DESKTOP SOFTWARE" means any third party computer software that is
licensed for use on desktop or laptop "PC-class" computers or related local area
network servers other than by a written agreement executed by the licensee.
Desktop Software includes, but is not limited to, software licensed by shrink
wrap or click wrap licenses, the Microsoft Windows class of operating system
software, and Microsoft Office or similar office productivity software
(including individual programs contained therein). SECTION 2.16(d) of the
Disclosure Schedule contains a complete and accurate list, as of the Execution
Date, of all Licensed Software. As used herein, "LICENSED SOFTWARE" shall mean
all computer software necessary for the operation of the Business as presently
conducted, that is used by and is licensed or leased to the Companies (or as to
which the Companies have otherwise obtained the right to use) excluding Desktop
Software, computer software and firmware in or used to control or operate any of
the machinery or equipment of the Business, and any software constituting part
of the Excluded Seller Assets. Prior to the Execution Date, except as otherwise
disclosed in SECTION 2.16(d) of the Disclosure Schedule, Parent and Seller have
delivered or made available to Purchaser true and complete copies of all
agreements under which the Companies have the right to use the Licensed
Software. The Companies are in compliance in all material respects with all
provisions of any license, lease or other similar agreement pursuant to which
the Companies have rights to use the Licensed Software. To Seller's knowledge,
the Companies are in compliance in all material respects with all provisions of
any license, lease or other similar agreement pursuant to which the Companies
have rights to use the Desktop Software.
(e) SECTION 2.16(e) of the Disclosure Schedule contains a list, as of
the Execution Date, of all Owned Software. As used herein, "OWNED SOFTWARE"
shall mean all computer software that is owned by the Companies and is necessary
for or material to the
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conduct of the Business as presently conducted. The Owned Software together with
the Licensed Software is referred to as the "COMPANIES' SOFTWARE." To Seller's
Knowledge, (i) none of Seller, Parent or the Companies are infringing or
diluting any Intellectual Property rights of any other Person with respect to
the Companies' Software, and (ii) no other Person is infringing any Intellectual
Property rights of the Companies with respect to the Companies' Software.
(f) To the extent that any material Intellectual Property (excluding
Excluded Seller Assets and the Foodservice IP Assets) necessary for the conduct
of the Business as presently conducted was created for the Companies or Parent
or any of its Affiliates by or with the aid or assistance of a non-employee,
consultant or independent contractor, the Companies have received all necessary
written assignments to the rights, title and interest in such Intellectual
Property to obtain for the Companies all rights, title and interest in such
Intellectual Property.
(g) None of Seller, Parent or the Companies or any of their Affiliates
are currently in receipt of any written or, to Seller's Knowledge, oral notice
that the conduct of the Business violates the Intellectual Property rights of
any other Person. To Seller's Knowledge, (i) none of the Companies are violating
any Person's Intellectual Property rights, (ii) the use by the Companies, Parent
or any of their Affiliates of any Intellectual Property used in connection with
the Business is not violating any other Person's Intellectual Property rights
and (iii) no Person has threatened or claimed that the use by the Companies,
Parent or its Affiliates of any Intellectual Property in connection with the
Business is violating such Person's Intellectual Property rights. To Seller's
Knowledge, no Person has claimed or is threatening to claim the right to use or
license any of the Intellectual Property of the Companies except in accordance
with the licenses granted by the Companies as provided in SECTION 2.16(c).
SECTION 2.17 ENVIRONMENTAL MATTERS.
(a) Except as disclosed on SECTION 2.17(a) of the Disclosure Schedule,
the Companies are in compliance with all Environmental Laws in all material
respects. Except as disclosed on SECTION 2.17(a) of the Disclosure Schedule,
none of Parent, Operating Company or the Companies have received any notice to
the effect that, nor does Seller have Knowledge that, (i) any of the Companies
is not in compliance in all material respects with, or is in violation in any
material respect of, any Environmental Laws or (ii) any currently existing
circumstances are reasonably likely to result in a failure of any of the
Companies to comply with, or a violation by any of the Companies of, any
Environmental Laws. Except as disclosed on SECTION 2.17(a) of the Disclosure
Schedule, the Companies have not received any written notice during the previous
five (5) years of any alleged failure to comply with any Environmental Laws.
(b) Except as disclosed in SECTION 2.17(b) of the Disclosure Schedule,
there are no existing or, to Seller's Knowledge, threatened, Environmental
Claims against any of the Companies. Except as disclosed in SECTION 2.17(b) of
the Disclosure Schedule, none of Parent or the Companies has received any
written notification, nor does Seller have Knowledge, of any allegation of any
actual, or potential responsibility for, or any inquiry or investigation
regarding, any disposal, release or threatened release of any Hazardous
Substance either generated at or transported from any Facility or Former
Property. Except as disclosed in SECTION 2.17(b) of the Disclosure Schedule,
none of Parent or the Companies has, in the past ten (10) years, received, and
to Seller's Knowledge there has not in such period been, any claim, demand, suit
or cause of
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action alleging any form of bodily injury, sickness or disease, including but
not limited to asbestosis, silicosis or any form of cancer, arising from any
exposure to or contact with any materials or substances at any time either
present at any Facility or Former Property or contained within any products or
materials transported from any Facility or Former Property.
(c) Except as disclosed in SECTION 2.17(c) of the Disclosure Schedule,
(i) no underground tank or other underground storage receptacle for Hazardous
Substances is currently or, to Seller's Knowledge, has in the past been located
at any of the Facilities, or to Seller's Knowledge, the Former Properties, and
there have been no releases of any Hazardous Substances from any such current,
or to Seller's Knowledge, former underground tank or related piping; (ii) there
have been no current or, to Seller's Knowledge, past releases (i.e., any past or
present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing, or dumping) of Hazardous
Substances in quantities exceeding those authorized by Environmental Laws
required thereunder, upon or into the Facilities, or to Seller's Knowledge, the
Former Properties; (iii) there are no polychlorinated biphenyls (PCBs) or
asbestos located at or on the Facilities or to Seller's Knowledge, at or on the
Former Properties, except in compliance with Environmental Laws, (iv) to
Seller's Knowledge, no PCBs or asbestos have been used in the manufacturing
processes of, or contained in products manufactured at, the Facilities, or, to
Seller's Knowledge, the Former Properties, (v) to Seller's Knowledge, no part of
the Facilities or to Seller's Knowledge, the Former Properties has been used as
a landfill or for the disposal of Hazardous Substances.
(d) Except as disclosed in SECTION 2.17(d) of the Disclosure Schedule,
none of the Companies is a party, whether as a direct signatory or as successor,
assign or third-party beneficiary, or otherwise bound, to any lease or other
Contract (excluding insurance policies disclosed on the Schedules) under which
any of the Companies is obligated by or entitled to the benefits of, directly or
indirectly, any representation, warranty, indemnification, covenant, restriction
or other undertaking concerning Environmental Conditions.
(e) None of the Companies has released any other Person from any claim
under any Environmental Law or waived any rights concerning any Environmental
Condition except in connection with a complete release of liability of the
Company in all associated matters.
(f) Complete and accurate copies of the Environmental Reports, as well
as all other written environmental reports, audits or assessments which have
been conducted, by any of Parent, Seller or the Companies or any of their
respective Affiliates, or any Person engaged by Parent, Seller or the Companies
or any of their respective Affiliates for such purpose, with respect to any
Facility or Former Property have been made available to Purchaser and its
Representatives and a list, as of the Execution Date, of all such reports,
audits and assessments prepared by any third party, including any Governmental
Authority, contractor, consultant or laboratory or prepared or received by the
department of Environmental Affairs of Parent is set forth on SECTION 2.17(f) of
the Disclosure Schedule.
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SECTION 2.18 INTERCOMPANY CONTRACTS, TRANSACTIONS AND SERVICES; OUTSIDE
ASSETS; SHARED ASSETS.
(a) SECTION 2.18(a) of the Disclosure Schedule sets forth each material
written Contract in effect as of the Execution Date between any of the
Companies, on the one hand, and Parent or its Affiliates (other than Newco or
AHCGC) on the other hand, which affects or relates to the Companies or the
Business.
(b) SECTION 2.18(b) of the Disclosure Schedule lists (x) the categories
of material services that Parent or its Affiliates (other than Newco or AHCGC)
provide to the Companies in connection with the operation of the Business as
presently conducted and (y) the categories of goods bought or sold between
Parent or its Affiliates (other than Newco or AHCGC) on the one hand, and the
Companies on the other hand, other than in the case of (x) and (y), (i) the
services described in Exhibit A to the form of Transition Services Agreement and
(ii) the services provided under the Contracts listed or described in SECTION
4.16(b) of the Disclosure Schedule.
(c) SECTION 2.18(c) of the Disclosure Schedule provides (i) a
reasonably detailed listing of the assets that are used primarily or held
primarily for use in the operation of the Business as presently conducted which
are not owned by the Companies, other than (A) those used or held for use by the
Companies pursuant to Contracts (with a Person other than Parent or its
Affiliates) included in the Assets, (B) the Canadian Assets and (C) the Excluded
Seller Assets and (ii) identifies the owner or holder of such assets. The assets
listed in SECTION 2.18(c) of the Disclosure Schedule are referred to herein as
the "OUTSIDE ASSETS."
(d) SECTION 2.18(d) of the Disclosure Schedule identifies any asset,
right, privilege, Contract, Permit or arrangement which materially benefits the
Companies or the Business and as to which none of the Companies would have a
direct ownership or Contract right (with a Person other than Parent or its
Affiliates) to continue use or ownership thereof, upon the terms in effect on
the Execution Date (as modified in the Ordinary Course of Business after the
Execution Date), following consummation of the transactions contemplated by this
Agreement, other than (i) the assets, rights, privileges, Permits and Contracts
listed on SECTION 4.16(b) of the Disclosure Schedule, (ii) the assets (x) owned,
leased or licensed and used by Parent or its Affiliates (other than Seller or
AHCGC) in providing services that are listed in SECTION 2.18(b) of the
Disclosure Schedule and (y) not located at any Facility, (iii) the working
capital assets and other financial assets provided by Parent and its Affiliates
(other than Newco or AHCGC) which are not included in the definition of Net
Working Capital, (iv) the assets (x) owned, leased or licensed that will be used
by Parent or its Affiliates (other than Seller or AHCGC) to provide services to
Purchaser and the New Group under the Transition Services Agreement and (y) not
located at any Facility, (v) the capital stock and other equity interests of any
Person other than AHCGC and Newco held by Seller, (vi) the Former Properties and
(vii) the Foodservice Assets. The assets, rights, privileges, Contracts and
Permits listed in SECTION 2.18(d) of the Disclosure Schedule are collectively
referred to herein as the "SHARED ASSETS".
(e) Notwithstanding anything to the contrary contained in the
foregoing, none of Parent, Seller, Operating Company or Newco shall have any
liability under SECTION 2.18(a), 2.18(b) or 2.18(d) for failing to disclose any
service or Contract that is required thereby to be
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listed on SECTION 2.18(a), 2.18(b) or 2.18(d), as applicable, of the Disclosure
Schedule if either (i) Purchaser currently provides such service in the
operation of its business to its existing business units, or has a Contract with
a third-party vendor with respect to the services provided to the Business under
such Contract and such service of Purchaser or provided by the third-party
vendor can be adapted without material burden to perform such service for the
Business or (ii) the New Group is able to obtain (after using commercially
reasonable efforts) such products or services on substantially equivalent terms
and conditions (as to the Business) from a no less qualified third-party vendor.
SECTION 2.19 TAXES. Except as set forth on SECTION 2.19 of the
Disclosure Schedule:
(a) All material Tax Returns required to be filed by or with respect to
each of the Companies, either separately or as a member of a group of
corporations, have been filed with the appropriate Taxing Authorities. All such
Tax Returns are accurate, true and complete in all material respects. Parent has
made available to Purchaser complete and accurate copies of all such Tax Returns
(or, in the case of consolidated, combined or unitary Tax Returns, the portions
thereof relating to the Companies) relating to any open Tax Periods of any of
the Companies.
(b) Each of the Companies has timely paid or made provision for the
payment of all Taxes that are shown as due on the Tax Returns filed with the
appropriate Tax Authorities or that may become due with respect to Tax Periods
(or portions thereof) ending on or before the Execution Date. The accruals and
reserves with respect to such Taxes (other than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) provided
in the Balance Sheet are adequate (determined in accordance with GAAP) to cover
all Taxes accruing or payable with respect to Tax Periods (or portions thereof)
ending on or before the Execution Date. All material Taxes (including sales and
use and employment Taxes) that any of the Companies is or was required by Law to
withhold or collect have been duly withheld or collected and, to the extent
required, have been timely paid to the proper Taxing Authority.
(c) There are no liens for Taxes (other than for current Taxes not yet
due and payable) upon any of the Assets.
(d) There are currently no deficiencies for Taxes that have been
claimed, proposed or assessed by any Taxing Authority against any of the
Companies that have been received in writing by Parent, Operating Company,
Seller or the other Companies or any of their respective Affiliates, or to
Seller's Knowledge have otherwise been claimed, proposed or assessed. There are
no pending or, to Seller's Knowledge, threatened audits, investigations or
claims for or relating to any liability of the Companies in respect of Taxes,
and as of the Execution Date, there are no matters under discussion with any
Taxing Authority with respect to Taxes of the Companies. SECTION 2.19(d) of the
Disclosure Schedule sets forth for each of the Companies the Tax Returns which
have been audited within the three (3) years prior to the Execution Date by the
relevant Taxing Authority for each period set forth on SECTION 2.19(d) of the
Disclosure Schedule. No power of attorney has been executed by or on behalf of
any of the Companies with respect to any matters relating to Taxes that is
currently in force. No extension or waiver of a statute of limitations relating
to Taxes is in effect with respect to any of the Companies. Set forth in SECTION
2.19(d) of the Disclosure Schedule for each Company are the
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jurisdictions in which such Company has filed Tax Returns within the three (3)
tax years prior to the Execution Date. No claim has been made within the three
(3) years prior to the Execution Date by a Taxing Authority in a jurisdiction
where a Company does not file Tax Returns that such Company may be subject to
taxation in that jurisdiction.
(e) None of the Companies is a party to any Tax sharing, indemnity,
allocation or similar agreement. The Companies have no contractual obligations
to indemnify any other Person with respect to Taxes.
(f) None of the Companies is subject to any joint venture, partnership
or other agreement, arrangement, or contract that is treated as a partnership
for Tax purposes.
(g) To Seller's Knowledge, none of Parent, Operating Company, Seller or
the other Companies or any of their respective Affiliates has requested or
received any ruling from any Taxing Authority, or signed any binding agreement
with any Taxing Authority (including any advance pricing agreement) that would
materially impact the amount of Tax Liability of any of the Companies after the
Closing Date.
(h) Parent is the common parent of an affiliated group of corporations
that includes each of the Companies, and such affiliated group files a
consolidated Tax Return for Federal income tax purposes that includes each of
the Companies as members.
SECTION 2.20 NEWCO'S OPERATIONS. Newco was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement and has
not engaged in any business activities or conducted any operations, and has not
incurred, directly or indirectly, any obligations or liabilities or entered into
any agreement or arrangements with any Person other than (a) as contemplated by
SECTION 4.16, (b) the operation of the Business after the consummation of the
transactions contemplated by SECTION 4.16 and (c) as expressly provided by this
Agreement.
SECTION 2.21 BROKERS. Except for Xxxxxx X. Xxxxx & Co. Incorporated, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent or Seller.
Parent is solely responsible for the fees and expenses of Xxxxxx X. Xxxxx & Co.
Incorporated.
SECTION 2.22 TITLE TO ASSETS.
(a) TITLE TO ASSETS PRIOR TO ASSET TRANSFERS.
(i) The Companies and Canadian Seller own or have a leasehold or
license interest in, or rights to all of the rights, properties and other assets
necessary to operate the Business as presently conducted, except for (A) the
Outside Assets and (B) the Excluded Seller Assets.
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(ii) The Assets are free and clear of Encumbrances, except for (A)
Encumbrances identified in SECTION 2.22(a) of the Disclosure Schedule and (B)
Permitted Encumbrances.
(iii) Parent and its Affiliates have good and valid title to all
of the Assets not leased or licensed.
(b) TITLE TO ASSETS UPON CLOSING.
(i) At the Closing, Newco, AHCGC or Canadian Purchaser will own or
have a valid and enforceable (other than due to failure to obtain a Consent in
connection with transactions contemplated by this Agreement) leasehold or
license interest in, or other valid and enforceable (other than due to failure
to obtain a Consent in connection with transactions contemplated by this
Agreement) rights to all of the Assets, which constitute all of the assets,
rights and privileges (1) reflected on the Final Closing Date Balance Sheet or
(2) necessary to run or operate the Business as presently conducted, except in
the case of clause (2) for the Excluded Seller Assets and the Foodservice
Assets.
(ii) The Assets will be free and clear of Encumbrances, except for
(x) Encumbrances identified in SECTION 2.22(a) of the Disclosure Schedule and
(y) Permitted Encumbrances.
(iii) At the Closing, Newco, AHCGC or Canadian Purchaser will have
good and valid title to all Assets not leased or licensed.
(c) All of the AHCGC Assets relate to or are used in connection with
the design, development, manufacture, distributions, servicing, sale or
marketing of consumer or specialty glass products, except for the Excluded
Seller Assets.
SECTION 2.23 TANGIBLE ASSETS. Except as set forth in SECTION 2.23 of
the Disclosure Schedule, excluding Inventory and all Company Properties, each
tangible Asset (other than the Excluded Seller Assets) material to the Business
as presently conducted or material to the operation or use, as presently
conducted, of any Key Facility or any material portion thereof is free of
material defects, has been maintained in accordance with normal industry
practice, is in satisfactory operating condition and repair (subject to normal
wear and tear), and is adequate for the purposes for which it presently is used
and presently proposed to be used. SECTION 2.23 of the Disclosure Schedule sets
forth a true and correct copy of the Companies' capital budget plan for the year
2001 (the "2001 CAPITAL BUDGET PLAN").
SECTION 2.24 SOLVENCY OF SELLER. After giving effect to the
consummation of the transactions contemplated by this Agreement, (i) Seller will
be able to satisfy all Liabilities of Seller existing or likely to arise at or
in the period following the Closing and (ii) Seller will not be insolvent.
SECTION 2.25 ACCOUNTS RECEIVABLE. All accounts receivable of the
Companies reflected in the Final Closing Date Balance Sheet will represent bona
fide claims against debtors for sales made, services performed or other charges
arising on or before the Closing Date, and all
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of the goods delivered and services performed that give rise to such accounts
were delivered or performed in accordance with applicable orders, Contracts or
customer requirements.
SECTION 2.26 INSIDER INTERESTS. To Seller's Knowledge and except as set
forth in SECTION 2.26 of the Disclosure Schedule, no officer or director of any
of the Companies, Operating Company or Parent owns, directly or indirectly, any
material interest in any Person that is engaged in business, other than on an
arm's-length basis, as a competitor, lessor, lessee, customer or supplier of the
Companies.
SECTION 2.27 INVESTMENTS. Except as set forth in SECTIONS 2.6 OR 2.27
of the Disclosure Schedule, the Companies do not own or have the right to
acquire, directly or indirectly, (i) any interest or investment (whether equity
or debt) in any Person or (ii) any assets of any Person, other than trade
payables in the Ordinary Course of Business.
SECTION 2.28 LABOR AND EMPLOYEES.
(a) Except as set forth in SECTION 2.28(a) of the Disclosure Schedule,
(i) as of the Execution Date, none of the employment terms of the Employees are
subject to the terms of a collective bargaining agreement or a collective
bargaining agreement under negotiation, (ii) none of Parent or the Companies has
received written notice of any complaint against or arbitration proceeding
involving any of the Companies which is pending before the National Labor
Relations Board or the Equal Employment Opportunity Commission or before any
analogous entity in any country with respect to any Employee or former Employee
or, to Seller's Knowledge, threatened against any of the Companies or affecting
the Facilities and (iii) there are no labor strikes, disputes, material
grievances pending under any collective bargaining agreements, slowdowns, work
stoppages or other labor disturbances or difficulties pending or to Seller's
Knowledge, threatened against the Companies and in the past five (5) years the
Companies have not experienced a labor strike or dispute, slowdown, work
stoppage or other labor disturbance or difficulty.
(b) None of the Companies is delinquent in any material payments to any
of the Employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed for it or amounts required to be
reimbursed to such Employees. The Companies are not liable for any arrears of
wages in excess of $50,000. The Companies have made all required payments to any
trust or other fund or to any Governmental Authority with respect to
unemployment compensation benefits, social security or other benefits or
obligations for employees, other than payments which do not exceed $100,000
individually or in the aggregate. To Seller's Knowledge, no Employees are in any
material respect in violation of any term of any employment contract,
non-disclosure agreement, non-competition agreement or any restrictive covenant
to a former employer relating to the right of any such Employee to be employed
by the Companies because of the nature of the business conducted or presently
proposed to be conducted by the Companies or to the use of trade secrets or
proprietary information of others.
(c) Parent has identified on SECTION 2.28(c) of the Disclosure Schedule
and has made available to Purchaser true and complete copies of (i) all
severance agreements with directors, officers and Employees of the Companies in
effect as of the Execution Date or which,
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as of the Execution Date, the Companies intend to enter into prior to the
Closing; (ii) all severance programs and policies applicable to the Employees in
effect as of the Execution Date; (iii) all plans, programs, agreements and other
arrangements with or relating to directors, officers, Employees or consultants
of the Companies which contain change in control provisions as of the Execution
Date; and (iv) any written material relating to the material personnel policies
of the Companies in effect as of the Execution Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller and Parent
as follows:
SECTION 3.1 ORGANIZATION. Purchaser is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
SECTION 3.2 AUTHORITY; ENFORCEABILITY. Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements to which it is or will be party and to perform its
obligations hereunder and thereunder. The execution and delivery by Purchaser of
this Agreement and the Ancillary Agreements to which it is or will be party and
the performance by Purchaser of its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action on the part of Purchaser.
This Agreement and the Ancillary Agreements to which it is party have been or
will be duly executed and delivered by Purchaser and each constitutes a legal,
valid and binding agreement of Purchaser, enforceable against Purchaser in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar Laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
SECTION 3.3 NON-CONTRAVENTION. Except as set forth in SCHEDULE 3.3, the
execution, delivery and performance by Purchaser of this Agreement and the
Ancillary Agreements to which it is or will be a party do not and will not (a)
violate or result in the breach of any provision of the certificate of
incorporation or bylaws of Purchaser, (b) violate any Law or Governmental Order
applicable to Purchaser or any of its assets or properties, or (c) result in any
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under or give to others any
rights of termination, amendment or acceleration of, or result in the creation
of any Encumbrance on any of the assets or properties of Purchaser pursuant to
any Contract to which Purchaser is a party or by which any of its assets or
properties is bound or affected.
SECTION 3.4 GOVERNMENTAL CONSENTS. Except as described in SCHEDULE 3.4
and for (a) filings required under the HSR Act or similar competition or
antitrust Laws of any foreign jurisdiction and (b) filings that may be required
under the Exchange Act, no Consent is required to be obtained by Purchaser, and
no notice or filing is required to be given by Purchaser or any Affiliate
thereof or made by Purchaser or any Affiliate thereof with, any Governmental
Authority or other Person in connection with the execution, delivery and
performance by Purchaser of this Agreement or any Ancillary Agreements to which
it will be a party, nor are any Consents required under any Contracts to which
Purchaser is a party as a result of the
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consummation of the transactions contemplated by this Agreement, except for such
Consents as to which the failure to obtain such Consent will not have a material
adverse effect on the Purchaser or its ability to timely effect the consummation
of the transactions contemplated hereby.
SECTION 3.5 PURCHASE FOR INVESTMENT.
(a) Purchaser acknowledges that the sale of the Shares contemplated
hereby has not been registered under the Securities Act or qualified under
securities or "blue sky" Laws of applicable states, Parent having advised
Purchaser of its reliance upon exemptions from registration or qualification
thereunder.
(b) Purchaser (i) is not an underwriter as such term is defined under
the Securities Act, (ii) is acquiring the Shares for its own account solely for
investment with no present intention to subdivide or distribute any of the
Shares to any Person other than an Affiliate and (iii) will not sell, offer,
transfer, assign, pledge, hypothecate or otherwise dispose of any of the Shares,
except in compliance with the registration requirements or exemption provisions
of the Securities Act and any other applicable federal or state securities Laws.
SECTION 3.6 FINANCIAL CAPABILITY. Purchaser has received a fully
executed written commitment, a copy of which is attached as EXHIBIT 3.6 hereto,
from the Persons indicated thereon (the "COMMITMENT") to provide, in the
aggregate, monies sufficient to fund the entire Closing Payment (and adjustments
thereto), transaction fees and expenses and the ongoing working capital needs of
the Companies (the "FINANCING"). As of the Execution Date, (i) the Commitment
has not been amended or modified from that attached as EXHIBIT 3.6 hereto and
(ii) there is no breach or default by Purchaser, or, to Purchaser's Knowledge,
by the counterparty, existing under the Commitment.
SECTION 3.7 BROKERS. Except for Bear, Xxxxxxx & Co. Inc. and Banc of
America Securities LLC, no broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser. Purchaser shall be solely responsible for payment of the
fees and expenses of Bear, Xxxxxxx & Co. Inc. and Banc of America Securities
LLC.
ARTICLE IV.
ADDITIONAL AGREEMENTS
SECTION 4.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING.
(a) Except as contemplated by this Agreement and except as set forth on
SECTION 4.1 of the Disclosure Schedule, pending the Closing, Seller shall cause
each of the Companies and Canadian Seller (as to the Business) to conduct the
Business in the Ordinary Course of Business, to use commercially reasonable
efforts to preserve substantially intact the business organization of the
Business, and to use commercially reasonable efforts to preserve the business
relationships of the Business (as of the Execution Date). Without limiting the
generality of the foregoing, except as contemplated by this Agreement and except
as set forth in
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SECTION 4.1 of the Disclosure Schedule, Seller shall not permit any of the
Companies to do any of the following without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld or delayed):
(i) sell, lease, transfer, or assign any material Asset, other
than in the Ordinary Course of Business (but specifically excluding any of the
Owned Property);
(ii) enter into any Contract (other than customer Contracts or
Foodservice Contracts) (or series of related Contracts, other than customer
Contracts) either involving consideration in excess of $500,000 under each such
Contract or series of related Contracts (other than the renewal of existing
Contracts on generally similar terms) or outside the Ordinary Course of
Business, excluding those Contracts which are intended to be fully performed by
the applicable Company within ninety (90) days after the date entered into or
which are cancelable by the applicable Company within ninety (90) days after
notice without penalty, premium or a termination payment;
(iii) accelerate, terminate, materially modify or cancel any
Contract (other than Foodservice Contracts) (or series of related Contracts)
involving consideration in excess of $500,000 under each such Contract or series
of related Contracts to which any of the Companies is a party or by which any of
them is bound, except as effected in the Ordinary Course of Business as to
Contracts relating to sales of products or Contracts relating to licensing of
Intellectual Property rights of third parties permitting the sale of products by
the Companies bearing such licensed Intellectual Property;
(iv) merge or consolidate with, or make any capital investment in,
any loan to, or any acquisition of the securities or assets of, any other
Person;
(v) issue any note, bond, or other debt security or create, incur,
assume, or guaranty any indebtedness for borrowed money;
(vi) delay or postpone the payment of accounts payable and other
Liabilities outside the Ordinary Course of Business;
(vii) cancel, compromise, waive or release any right or claim (or
series of related rights and claims) either involving more than $500,000 in the
aggregate or outside the Ordinary Course of Business;
(viii) grant any license or sublicense of any rights under or with
respect to any Intellectual Property (other than the Foodservice IP Assets so
long as such license is not inconsistent with the rights and obligations set
forth in the License Agreement) other than in the Ordinary Course of Business;
(ix) enter into any hedging arrangement or forward purchase
agreement for a period greater than twelve (12) months or extend any existing
hedging arrangement or forward purchase agreement for a period greater than
twelve (12) months;
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(x) issue, sell, or otherwise dispose of any of its capital stock
or grant any options, warrants or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of its capital stock;
(xi) declare, set aside or pay any dividend or make any
distribution with respect to its capital stock (other than cash dividends) or
redeem, purchase, or otherwise acquire any of its capital stock;
(xii) make any loan to, or enter into any other transaction with,
any of its directors, officers or Employees outside the Ordinary Course of
Business;
(xiii) enter into any written Employment Agreement or materially
modify the terms of any such existing Employment Agreement, other than to extend
or renew an existing Employment Agreement on generally similar terms as in
effect on the Execution Date or to hire an employee in the Ordinary Course of
Business;
(xiv) except in the Ordinary Course of Business or as required by
Law or the terms of any existing Contract, increase the salary, wage, rate of
compensation, commission, bonus or other direct or indirect remuneration payable
to, or other compensation of any salaried or hourly Employees (excluding
Employees subject to collective bargaining), independent contractor or officer
of the Companies or enter into any Contract or other binding commitment in
respect of such increase, but in no event shall aggregate increases under this
clause (xiv) exceed 5% of the Companies' current payroll costs for base wages
for such salaried or hourly Employees (excluding Employees subject to collective
bargaining), in the aggregate;
(xv) except as required by Law or by the terms of this Agreement,
adopt, amend, modify, or terminate any Company Benefit Plan as it pertains to
Employees (excluding amendments and modifications to Company Benefit Plans
resulting directly from collective bargaining);
(xvi) pledge to make any charitable or other capital contribution
outside the Ordinary Course of Business;
(xvii) mortgage, pledge or encumber any of the Assets, other than
pursuant to Permitted Encumbrances;
(xviii) make any commitment for any capital expenditure in excess
of $500,000 individually or $2,000,000 in the aggregate, except as to the
categories of items set forth in the 2001 Capital Budget Plan or which shall be
set forth in the 2002 Capital Budget Plan, provided that Seller shall not permit
any of the Companies to make any capital commitments or expenditures with
respect to the Business in excess of $20 million in the aggregate for the year
ending December 31, 2002;
(xix) amend its certificate of incorporation or by-laws;
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(xx) make any change in any material accounting practices
customarily followed by it, excluding any standard cost revisions effected as of
January 1, 2002 in the Ordinary Course of Business or changes required by GAAP;
(xxi) make any changes in its sales practices or procedures other
than in the Ordinary Course of Business;
(xxii) fail to maintain the material Assets in substantially their
current state of repair, excepting normal wear and tear, or fail to replace
(consistent with the Companies' past practice) inoperable, worn-out or obsolete
material Assets, or fail to repair, replace, or refurbish any material Asset
which has been damaged or destroyed after the Execution Date (whether or not
insured);
(xxiii) make any election with respect to Taxes that may
materially increase the amount of Tax liability of any of the Companies after
the Closing Date (but Purchaser's consent shall be deemed to be provided if such
election is consistent with past practices and custom of the Companies or the
requirements of applicable Law);
(xxiv) enter into any closing agreement or settlement or agreement
to settle any claim or assessment for Taxes entered into on a basis that may
materially increase the amount of Tax liability of any of the Companies after
the Closing Date (but Purchaser's consent shall be deemed to be provided if such
agreement or settlement is consistent with the past practices and custom of the
Companies or the requirements of applicable Law);
(xxv) enter into any Contract described in clauses (i), (ii) or
(xvi) of SECTION 2.10(a);
(xxvi) enter into any customer Contract in which the "buyback"
commitment or similar repurchase commitment, with respect to such Contract,
would be reasonably likely to exceed 20% of the estimated first year sales under
such Contract;
(xxvii) enter into or materially modify any collective bargaining
agreement other than in the Ordinary Course of Business; or
(xxviii) enter into any contract or other agreement to do any of
the foregoing.
(b) For purposes of this Agreement, the term "commercially reasonable
efforts" shall not be deemed to require any Person to give any guarantee or
other consideration of any nature, including in connection with obtaining any
consent or waiver or to consent to any change in the terms of any Contract.
SECTION 4.2 ACCESS TO INFORMATION.
(a) From the Execution Date until the Closing, Seller and Parent shall
cause the Companies and Canadian Seller to promptly afford Purchaser and its
Representatives, at Purchaser's sole expense, with reasonable access, during
normal business hours and upon reasonable advance notice, to the offices,
properties, facilities, Books and Records, Tax Returns
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(including Tax records) or other information reasonably requested by Purchaser
and related to the Business, as Purchaser reasonably deems necessary or
advisable, and to those employees and personnel of the Companies, Operating
Company, Canadian Seller and Parent to whom Purchaser reasonably requests
access, including access to personnel to facilitate the transition at Closing of
functions relating to general ledger, accounts payable, payroll, purchasing and
information systems relating to the Business, PROVIDED, HOWEVER, that (i) Seller
and Parent may limit access to information, materials or data that relate to
matters which it advises Purchaser in writing it has reasonably and in good
faith determined, based upon advice of outside counsel, the disclosure thereof
would violate any Laws and commercially reasonable arrangements cannot be
effected to resolve such concerns of Law; (ii) neither Purchaser nor any of its
Representatives shall unreasonably disrupt the personnel or operations of
Parent, Operating Company or the Companies, (iii) until such time as the
condition set forth in SECTIONS 7.1(e) and 7.2(j) hereof has been satisfied,
Seller and Parent may reasonably limit access to customer pricing information
and related terms, the disclosure of which would be reasonably likely to result
in material competitive harm to the Business if the transactions contemplated by
this Agreement are not completed, (iv) Seller and Parent may limit access to
information and materials which are subject to a third party confidentiality
agreement which would prohibit the disclosure of the information or materials
which has been requested by Purchaser PROVIDED that, upon request of Purchaser,
Parent shall, and shall cause its Affiliates to, use commercially reasonable
efforts to obtain a waiver to such confidentiality agreement from the other
party thereto to permit such disclosure; and (v) Seller and Parent may
reasonably limit access to Books and Records (or portions thereof) to the extent
such Books and Records (or portions thereof) do not relate in any manner to the
Business; PROVIDED, that with respect to clause (v), Seller and Parent shall use
their reasonable best efforts to separate or extricate such data and materials
which relate to the Business from the data and materials which do not relate to
the Business and provide Purchaser with such data or materials relating to the
Business in usable electronic or hard copy form. The access and production of
information and materials provided for in this SECTION 4.2(a) shall be
coordinated by Xxxxxx X. Xxxxx, Vice President - Corporate Development at Parent
(the "COORDINATOR") or by such other person as the Coordinator designates from
time to time and Purchaser and its Affiliates and Representatives will contact
the Coordinator or persons designated by the Coordinator with respect to
coordinating and obtaining such access or information and materials. No
information or knowledge obtained in any investigation pursuant to this SECTION
4.2 shall affect or be deemed to modify any representation or warranty contained
in the Agreement or the conditions to the obligations of the parties to
consummate the transactions contemplated by this Agreement. All documents and
information supplied to Purchaser by the Companies, Seller and Parent under this
SECTION 4.2 shall be kept confidential in accordance with the Confidentiality
Agreement and SECTION 4.24 hereof; PROVIDED, that Purchaser's obligations under
the Confidentiality Agreement with respect to the Confidential Information (as
defined in the Confidentiality Agreement), which relates solely to the Business,
Newco or AHCGC, shall terminate upon Closing.
(b) In order to facilitate the resolution of any claims made by or
against or incurred by Operating Company, Canadian Seller, Parent or the
Companies prior to the Closing or for any other reasonable purpose (excluding
any Action among the parties hereto), for a period of five (5) years following
the Closing (or, with respect to any Books and Records necessary for the
preparation and filing of any Tax Returns, reports or forms or the defense of
any Tax audit,
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claim or assessment, until ninety (90) days after the expiration of the
applicable statute of limitations period), the New Group shall, and Purchaser
shall cause the New Group to (i) retain the Books and Records of the Companies
relating to periods prior to the Closing and (ii) upon reasonable notice, afford
Seller and its Representatives reasonable access (including the right to make
photocopies, at Seller's or Parent's expense), during normal business hours, to
such Books and Records; provided that Seller shall reimburse Purchaser promptly
upon demand for all out-of-pocket expenses incurred by Purchaser in connection
therewith.
(c) In order to facilitate the resolution of any claims made by or
against or incurred by Purchaser, Newco, AHCGC or Canadian Purchaser after the
Closing or for any other reasonable purpose (excluding any Action among the
parties hereto), for a period of five (5) years following the Closing (or, with
respect to any Books and Records necessary for the preparation and filing of any
Tax Returns, reports or forms or the defense of any Tax audit, claim or
assessment, until ninety (90) days after the expiration of the applicable
statute of limitations period), Seller, Operating Company and Parent shall each
respectively (i) retain the Books and Records of Seller, Operating Company and
Parent, as applicable, which relate to the Companies for periods prior to the
Closing and which shall not otherwise have been delivered to Purchaser or the
New Group and (ii) upon reasonable notice, afford Purchaser, Newco, AHCGC or
Canadian Purchaser or any of their respective Representatives reasonable access
(including the right to make photocopies, at the expense of Purchaser), during
normal business hours, to such Books and Records; provided that Purchaser shall
reimburse Seller or Parent promptly upon demand for all out-of-pocket expenses
incurred by Seller or Parent in connection therewith.
(d) In the event and for so long as Purchaser, Newco, AHCGC or Canadian
Purchaser actively is contesting or defending against any Action, investigation,
charge, complaint, claim, or demand in connection with any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving New Group or the Companies (other than matters subject to Article VIII
hereof), Seller and Parent will use commercially reasonable efforts to
cooperate, and shall use commercially reasonable efforts to cause their
Affiliates to cooperate, with Purchaser and its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their Books and Records as shall be necessary in connection with the contest
or defense, all at the sole cost and expense of Purchaser (except to the extent
Purchaser is entitled to indemnification therefor under Article VIII hereof).
(e) In the event and for so long as Parent or Seller actively is
contesting or defending against any Action, investigation, charge, complaint,
claim, or demand in connection with any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving the
Companies or the Business or the Foodservice Business (other than matters
subject to ARTICLE VIII hereof), Purchaser will use commercially reasonable
efforts to cooperate, and shall use commercially reasonably efforts to cause the
New Group and its other Affiliates to cooperate, with Parent and Seller and
counsel for Parent or Seller in the contest or defense, make available the
personnel of Purchaser, the New Group and Purchaser's other Affiliates, and
provide such testimony and access to their Books and Records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of Parent and Seller.
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SECTION 4.3 FURTHER ASSURANCES; MONTHLY MEETINGS.
(a) Upon the terms and subject to the conditions contained herein, the
parties hereto agree, both before and after the Closing, (i) to use all
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including, all actions necessary to satisfy the conditions to Closing set forth
in ARTICLE VII hereof, (ii) to execute any documents, instruments or conveyances
of any kind which may be reasonably necessary or advisable to carry out any of
the transactions contemplated by this Agreement, and (iii) to cooperate with
each other in connection with the foregoing.
(b) Subject to the limitations set forth in SECTION 4.2 hereof, key
management personnel for the Companies and to the extent reasonably requested by
Purchaser, key management personnel of Parent who are involved in managing any
material aspect of the Business, shall meet with management personnel of
Purchaser on a monthly basis prior to Closing to discuss the financial and
operational results, condition, plans and prospects of the Business and the
Companies. Each meeting will be held at a time and location mutually agreeable
to the parties hereto. As part of such meetings, subject to the limitations of
SECTION 4.2, Purchaser shall be permitted to inquire as to, and management of
the Companies and Parent shall undertake commercially reasonable efforts to
respond to, all material matters relating to the Business, including: the
information provided pursuant to SECTION 4.18(d) and variations from budgets and
forecasts; material transactions relating to the Business which have been
entered into or have been proposed to be entered into (including any Material
Contracts relating to the Business); and plans for and the status and results of
the rebuild of any furnaces at the Key Facilities (and, independent of such
meetings, the Companies and Parent shall undertake commercially reasonable
efforts to promptly provide to Purchaser all material plans and proposals
regarding any such furnace rebuild).
SECTION 4.4 XXXX-XXXXX-XXXXXX ACT FILINGS, COOPERATION, CONTROL.
(a) Each of Purchaser, Seller and Parent shall, and Seller shall cause
the Companies to (i) make or cause to be made the filings required of such party
or any of its Affiliates under the HSR Act and any other applicable Antitrust
Laws with respect to the Share Purchase and the other transactions contemplated
by this Agreement as promptly as is reasonably practicable and in any event with
respect to the HSR Act within five (5) Business Days after the Execution Date,
(ii) comply at the reasonably earliest practicable date with any request under
the HSR Act or other Antitrust Laws for additional information, documents or
other materials received by such party or any of its Affiliates from the Federal
Trade Commission or the Department of Justice or any other Governmental
Authority in respect of such filings or the Share Purchase and the other
transactions contemplated by this Agreement, and (iii) cooperate with the other
parties hereto in connection with making any filing under the HSR Act or other
Antitrust Laws (including, with respect to the party making a particular filing,
giving due consideration to all reasonable additions, deletions or changes
suggested in connection therewith) and in connection with any filings,
conferences or other submissions related to resolving any investigation or other
inquiry by any such Governmental Authority under any Antitrust Laws with respect
to the Share Purchase and the other transactions contemplated by this Agreement.
Each of Seller, Parent and Purchaser shall, and shall cause their respective
Affiliates to, furnish
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to the other all information necessary or desirable for any application or other
filing to be made pursuant to any Antitrust Law in connection with the Share
Purchase and the other transactions contemplated by this Agreement. Each of
Seller, Parent and Purchaser shall promptly inform the other of any
communication with, and any proposed understanding, undertaking or agreement
with, any Governmental Authority regarding any such filings or any such
transaction. In the event a party intends to independently participate in any
meeting with any Governmental Authority in respect of any such filings,
investigation or other inquiry that party shall give the other party reasonable
prior notice of such meeting. Subject to the provisions of the joint defense and
confidentiality agreement previously entered into among counsel to the parties,
the parties hereto will consult and cooperate with one another in connection
with any analyses, appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any party hereto in
connection with all meetings, actions and proceedings under or relating to the
HSR Act or other Antitrust Laws.
(b) Each of Purchaser and Parent shall, and shall cause their
respective Subsidiaries (including the Companies) to, use their reasonable best
efforts to (i) cause the expiration of the notice periods under the HSR Act or
other Antitrust Laws with respect to the Share Purchase and the other
transactions contemplated by this Agreement as promptly as is reasonably
practicable after the execution of this Agreement and (ii) resolve such
objections, if any, as may be asserted by any Governmental Authority with
respect to the Share Purchase or any other transactions contemplated by this
Agreement under the Antitrust Laws, all subject to the limitations set forth in
this SECTION 4.4(b). In connection therewith, if any administrative or judicial
action or proceeding is instituted (or threatened to be instituted) challenging
the Share Purchase or any other transaction contemplated by this Agreement as
violative of any Antitrust Law, each of Parent, Seller and Purchaser shall, and
shall cause their respective Subsidiaries to, cooperate and use their reasonable
best efforts to contest and resist, except insofar as Parent and Purchaser may
otherwise agree, any such action or proceeding, including any action or
proceeding that seeks a temporary restraining order or preliminary injunction
that would prohibit, prevent or restrict consummation of the Share Purchase or
any other transaction contemplated by this Agreement; PROVIDED, HOWEVER, that
Parent and Purchaser shall have no obligation to contest or resist any action or
proceeding after issuance of a preliminary injunction under the Antitrust Laws
by any United States federal court. Should any preliminary or permanent
injunction or similar order granting injunctive relief (other than a temporary
restraining order) under the Antitrust Laws be issued by any United States
federal court, Purchaser may elect (upon written notice within five (5) Business
Days after issuance), but (notwithstanding any provision of this SECTION 4.4)
shall not be required, to seek to have such preliminary injunction, order or
stay vacated, lifted or otherwise set aside, but in the event Purchaser so
elects, Purchaser, Seller and Parent shall be obligated to use their reasonable
best efforts to contest and resist thereafter until such time, if any, as
Purchaser decides (and it shall be entitled in its sole discretion to so decide)
to cease contesting or resisting such preliminary injunction, order or stay or
termination of this Agreement and has notified Parent of its determination
pursuant to SECTION 4.4(d) hereof. Under no circumstances shall Purchaser or
Parent or any of their respective Affiliates be required to hold separate
(including by trust or otherwise) or divest or dispose of any of its businesses
or assets or waive any of the conditions to the Share Purchase or the other
transactions contemplated by this Agreement set forth in Article VII of this
Agreement as they apply to such party, nor shall Purchaser or any of its
Affiliates be
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required to hold separate (including by trust or otherwise) or divest or dispose
of any of the Assets or any portion of the Business.
(c) Notwithstanding any other provisions of this SECTION 4.4, Purchaser
shall make all strategic and tactical decisions as to the manner in which to
contest, resist or respond to all inquiries, investigations, actions or
proceedings (or threatened investigations, actions or proceedings) under or
relating to the HSR Act or other Antitrust Laws, including all decisions with
respect to: (i) communicating with Governmental Authorities, (ii) whether or not
to continue contesting and resisting any action or proceeding after issuance of
any preliminary injunction under the Antitrust Laws by any United States federal
or state court, and (iii) on what terms Purchaser and Parent shall resolve any
objection, or any action or proceeding instituted (or threatened to be
instituted) under any Antitrust Law challenging the Share Purchase or any of the
transactions contemplated by this Agreement. Seller and Parent shall, and shall
direct their counsel and other Representatives to, cooperate with Purchaser and
act in accordance with any direction given by Purchaser in connection with any
action to be taken under SECTION 4.4(b) or under this SECTION 4.4(c) of which
Seller and Parent has received notice under this SECTION 4.4(c), unless Seller
and Parent shall conclude, after consultation with its legal counsel, that a
particular action or failure to act would likely violate an applicable legal
duty or prohibition.
(d) Purchaser shall promptly advise Seller and Parent in writing if it
determines pursuant to this SECTION 4.4 to cease contesting and resisting
actions relating to the Antitrust Laws. The preceding sentence shall not be
construed to afford Purchaser any right to cease actions under SECTION 4.4,
which rights shall solely be established under SECTION 4.4(a)-(c). All
directions, requests, notices and other communications by Purchaser to Seller
and Parent under this SECTION 4.4 shall be in writing and shall set forth in
reasonable specificity the subject direction, request or notice.
(e) Any factual information, documents, opinions, strategies or other
materials exchanged or communicated by Seller and Parent to Purchaser, or by
Purchaser to Seller and Parent, in the course of the parties' negotiations,
respective due diligence or joint defense efforts related to the subject matter
hereunder shall be subject to the terms of a joint defense and confidentiality
agreement previously entered into among counsel to the parties.
(f) As used in this Agreement, the term "ANTITRUST LAWS" means the HSR
Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the Federal Trade
Commission Act, as amended, and any other federal, state or foreign statutes,
rules, regulations, orders, decrees, administrative or judicial doctrines or
other laws that are designed to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade or otherwise
denominated as competition laws of the particular jurisdiction.
SECTION 4.5 NOTICE OF DEVELOPMENT. Between the Execution Date and the
Closing, the Companies or Seller and/or Parent, as applicable, on the one hand,
and Purchaser, on the other hand, shall give prompt notice to the other of any
event, or the failure of a party hereto or any Affiliate of any party hereto to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder, which occurrence or failure would be reasonably
likely to make the satisfaction of the conditions of ARTICLE VII impossible or
unlikely; PROVIDED, HOWEVER, that such disclosure shall not be deemed to modify
or amend the
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representations or warranties made by Seller, Parent or Purchaser herein for any
purpose under this Agreement, including the satisfaction of the conditions to
Closing under ARTICLE VII or Seller's, Parent's or Purchaser's indemnification
obligations under ARTICLE VIII, except as otherwise provided by SECTION 8.3(g)
hereof, or to cure any breach of a representation or warranty when made or any
covenant or agreement or to satisfy any condition herein. Without limiting the
foregoing, between the Execution Date and the Closing, Purchaser shall give
prompt notice to Seller and Parent of any amendment, modification or termination
of the Commitment. Purchaser shall also (i) respond, from time to time, to
reasonable inquiries of Parent as to the status of the Financing contemplated by
the Credit Agreement and (ii) promptly notify Seller and Parent upon receipt of
written notice from the lenders that (A) a condition to funding under the Credit
Agreement has become incapable of being satisfied (beyond any applicable cure
period, if any), (B) the commitments under the Credit Agreement have lapsed or
(C) the commitments under the Credit Agreement have been terminated by the
lenders under the Credit Agreement.
SECTION 4.6 INSURANCE; RISK OF LOSS.
(a) To the extent that, after the Closing Date, the Companies or Seller
or Parent require any information regarding claim data, payroll or other
information in order to make filings with insurance carriers, Seller shall
promptly supply such information to the New Group and Purchaser shall cause the
New Group to promptly to supply such information to Seller or Parent.
(b) Parent will cause the Companies to obtain the following title
insurance commitments, policies, riders and endorsements in preparation for the
Closing and will cause Seller to deliver such documents and materials to
Purchaser at Closing: with respect to each parcel of Owned Property which is
listed in SECTION 2.15(a) of the Disclosure Schedule, an extended coverage ALTA
Owner's Policy of Title Insurance (or equivalent policy reasonably acceptable to
Purchaser if the real property is located in a state in which ALTA Owner's
Policy of Title Insurance is not available), dated as of the Closing, issued by
Chicago Title Insurance Company or other commercially equivalent title insurer
reasonably satisfactory to Purchaser, in such amount as Purchaser and Seller
reasonably may determine to be the fair market value of such real property
(including all improvements located thereon), insuring fee title to such real
property to be in the applicable Companies as of the Closing (subject only to
title exceptions which are Permitted Encumbrances).
(c) To the extent available in the applicable jurisdiction, and without
the requirement that Parent or any of its Affiliates provide any indemnification
or affidavits to the title insurance company (other than ALTA "Owner's
Affiliates", gap indemnities and mechanics' lien indemnities), each title
insurance policy delivered under SECTION 4.6(b) above shall not include a
creditor's rights exception and shall (i) insure title to the real property and
all recorded easements benefiting such real property, (ii) contain an "extended
coverage endorsement" insuring over the general exceptions contained customarily
in such policies, (iii) contain an ALTA Zoning Endorsement 3.1 (or equivalent),
(iv) contain an endorsement insuring that the real property described in the
title insurance policy is the same real estate as shown on the Survey delivered
with respect to such property, (v) contain an endorsement insuring that each
street adjacent to the real property is a public street and that there is direct
and unencumbered pedestrian and vehicular access to such street from the real
property, (vi) if the real property
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consists of more than one record parcel, contain a "contiguity" endorsement
insuring that all of the record parcels are contiguous to one another, (vii)
contain a "non-imputation" endorsement to the effect that title defects known to
the officers, directors, and stockholders of the owner prior to the Closing
shall not be deemed "facts known to the insured" for purposes of the policy,
(viii) contain any owner's comprehensive, tax parcel and plat and subdivision
endorsements, (ix) contain affirmative coverage over failure of closure of the
legal description to the Owned Property and (x) contain such other endorsements
and coverages as may be reasonably requested by Purchaser. Purchaser shall be
responsible for all of the costs and expenses associated with purchasing the
title insurance policies and endorsements contemplated above, PROVIDED, HOWEVER,
that Seller shall pay any title fees or charges for the preliminary title
commitments or other appropriate evidence of title as if the title insurance
policies are not actually purchased and the costs and expenses associated with
obtaining the surveys required pursuant to SECTION 4.7 hereof.
SECTION 4.7 SURVEYS. With respect to each of the Owned Properties as to
which a title insurance policy is to be procured pursuant to SECTION 4.6(b)
above, Parent will cause the Companies to procure in preparation for the Closing
(and in time for the preparation and issuance of the title policies required at
Closing by SECTION 4.6 hereof) and will cause Seller to deliver at Closing, a
current survey of the real property certified to Purchaser, prepared by a
licensed surveyor and conforming to current ALTA Minimum Detail Requirements for
Land Title Surveys or similar local criteria, disclosing the location of all
improvements, easements, party walls, sidewalks, roadways, utility lines, and
other matters shown customarily on such surveys, and showing access
affirmatively to public streets and roads and showing that the improvements
(including, all building and loading docks and packaging lots appurtenant
thereto) are entirely located on the Owned Properties (the "SURVEY"). The Survey
shall not disclose any Encumbrance which is not a Permitted Encumbrance.
SECTION 4.8 CORPORATE NAMES.
(a) To the extent the trademarks, service marks, brand names, logos or
trade, corporate or business names of Parent, Seller or of any of Parent's
Affiliates ("PARENT'S IP") are not included in the Assets but are used by the
Business on packaging or printed advertising and promotional materials,
Inventories or like materials (collectively, the "PACKAGING") included in the
Assets, Purchaser and the New Group may use such Packaging or sell such
Inventories after the Closing Date (without altering or modifying such Packaging
and Inventories) until such Packaging is exhausted and in any event no more than
two (2) years after the Closing Date. Parent, Seller and Affiliates, as
applicable, hereby grant to Purchaser a non-exclusive, nontransferable,
non-sublicensable (except to Purchaser's Affiliates) license to use Parent IP in
such countries as Parent, Seller or their Affiliates, as applicable, have rights
in such Parent IP, during such period as the Packaging is being used up by the
New Group. In the event that the New Group manufactures or produces products
after the Closing Date for use with Packaging, Seller may reasonably request,
and the New Group shall provide, samples of such products to examine and ensure
that such products are of a quality level not materially different from the
existing Inventory at Closing. In the event that the products used with the
Packaging are of materially inferior quality, Seller may request that the New
Group raise the quality of the products being manufactured for use with the
Packaging. If the New Group has not, within forty-five (45) days of such notice
by Seller to the New Group, provided Seller with evidence
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that the quality of its products used in connection with Packaging is
substantially similar in level to the products manufactured prior to Closing,
the New Group shall cease to use such Packaging in connection with such
products.
(b) Prior to Closing, Parent shall cause Newco to change its corporate
name to "Anchor Hocking Inc." No later than two (2) Business Days after the
Closing, Seller shall, and Parent shall cause Seller to, change its corporate
name from "Anchor Hocking Corporation" to another corporate name and none of
Parent or its Affiliates shall use the name "Anchor Hocking" or any name similar
thereto or derivative thereof, as a corporate name or business alias at any time
after the second Business Day following the Closing.
SECTION 4.9 DOMAIN NAMES/INTERNET SITES.
(a) Notwithstanding SECTION 4.8 and except as expressly provided herein
and the License Agreement, Parent agrees that neither it nor its Affiliates
shall at any time adopt or use any domain names, URLs, e-mail addresses, meta
tags, search terms for Internet portals or search engines and the like
containing any item set forth in SECTION 2.16(b) of the Disclosure Schedule or
any term confusingly similar to any of the foregoing.
(b) Within thirty (30) days after the Closing Date, Parent shall and
shall cause Seller and each of its Affiliates to transfer, convey and assign to
Purchaser all of Parent's, Seller's and their respective Affiliates' right,
title and interest in and to the domain names listed in SECTION 2.16(b) of the
Disclosure Schedule.
(c) Effective as of the Closing Date, Parent and Seller shall, and
shall cause their respective Affiliates to, transfer to Purchaser all of the
Internet and Intranet web sites, web pages and site content (including, but not
limited to, software, scripts, HTML pages, file structures, artwork, drawings,
illustrations, photographs, videos, logos, text, slogans, mechanicals,
transparencies, data, data structures, data paths, system specifications and
configurations, and related information and documentation) operated or
maintained by or on behalf of the Companies ("Internet Content"), but only to
the extent such materials and contents relate to the Business ("BUSINESS
INTERNET CONTENT"). Parent and Seller further agree to remove, and to cause
their respective Affiliates to remove, all such Business Internet Content from
any Internet or Intranet sites they operate or have operated for themselves or
their Affiliates within fifteen (15) days after the Closing. In connection with
such transfer, Purchaser shall as promptly as practicable, no later than fifteen
(15) days after the Closing, remove all Seller, Parent and other non-Business
trademarks, brandnames and logos from such materials. To the extent that the
Business Internet Content includes any Internet Content relating exclusively to
the Foodservice Business, Purchaser agrees to remove, and to cause its
Affiliates to remove, all such Internet Content from the internet sites included
in the Business Internet Content within fifteen (15) days after the Closing.
SECTION 4.10 INTERCOMPANY ACCOUNTS, AGREEMENTS AND TRANSACTIONS. Parent
and Seller shall cause all Contracts and arrangements between or among Parent,
Seller or any of their Affiliates (other than Newco and AHCGC), on the one hand,
and any of the Companies (other than Seller), on the other hand, including (a)
all inter-company notes and (b) all Contracts
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and arrangements set forth on SECTION 2.18(a) of the Disclosure Schedule, to be
terminated immediately prior to the Closing with no further Liabilities on the
part of any party thereto.
SECTION 4.11 RESIGNATIONS. On the Closing Date, Parent and Seller shall
use commercially reasonably efforts to cause to be delivered to Purchaser duly
signed resignations, effective at the time of Closing, of all directors and
officers of Newco and AHCGC other than the persons identified in writing by
Purchaser within ten (10) days prior to Closing.
SECTION 4.12 BOOKS AND RECORDS.
(a) After the Closing, upon reasonable written notice, Purchaser and
Parent shall furnish or cause to be furnished to each other and their respective
Representatives reasonable access, during normal business hours, to such
information and assistance relating to the Companies as is reasonably necessary
for financial reporting, accounting matters and personnel management, the
preparation and filing of any Tax Returns, reports or forms or the defense of
any Tax audit, claim or assessment. Each party shall reimburse the other for
reasonable out-of-pocket costs and expenses incurred in assisting the other
pursuant to this SECTION 4.12(a).
(b) As soon as reasonably practical after the Closing Date, Seller and
Parent shall deliver or cause to be delivered to Purchaser all of the Books and
Records in the possession of Seller, Parent or their Affiliates relating
primarily to the Business; PROVIDED, HOWEVER, that:
(i) Purchaser recognizes that certain Books and Records may relate
primarily to Parent or to subsidiaries or divisions of Parent other than the
Companies and that Parent may retain such Books and Records; PROVIDED, Parent
shall use its reasonable best efforts to separate or extricate such data and
materials which relate to the Business from the data and materials which do not
relate to the Business and provide Purchaser with such data or materials
relating to the Business in usable electronic or hard copy form upon Purchaser's
request; and
(ii) Parent may retain any Tax Returns, reports or forms, and
Purchaser shall be provided with copies of such Tax Returns (or relevant
portions thereof), reports or forms only to the extent that they relate to
separate Tax Returns (including relevant portions of such Tax Returns that are
included in part of a consolidated, combined or unitary Tax Return relating to
Parent and its Affiliates) or separate Tax liability of any of the Companies;
PROVIDED that in no event shall Purchaser or any of the Companies be denied
access to any information necessary for the preparation and filing of any Tax
Returns that include any of the Companies after the Closing Date.
SECTION 4.13 LABOR NEGOTIATIONS. Parent, Seller and the Companies agree
to keep Purchaser apprised of the status of any and all negotiations with its
collective bargaining units on any new collective bargaining agreement and
material contacts pertaining thereto (including all material proposals made or
received and all documents pertinent thereto), including, at least ten (10) days
prior to the commencement of any negotiation, by advising Purchaser of its
financial and other negotiation objectives and strategies in the areas of pay,
active and retiree health and welfare benefits, pension benefits, severance,
work rules and material contract modifications. Parent shall use commercially
reasonable efforts to provide
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Purchaser with updated information on the bargaining effort on a weekly basis or
more frequently as material developments arise, including its intent to accept
any alterations to the collective bargaining agreement which are materially
different from the objectives provided to Purchaser.
SECTION 4.14 COVENANT NOT TO COMPETE
(a) For a period of five (5) years from and after the Closing Date (the
"NON-COMPETE PERIOD"), Parent and Parent's Affiliates shall not, and Parent
shall cause its Affiliates not to, Participate anywhere in the Western
Hemisphere in a Competing Business, except with respect to the services to be
provided to the New Group and Purchaser pursuant to the Transition Services
Agreement or as permitted below.
(b) For a period of two (2) years from and after the Closing Date and
except as provided in SECTIONS 4.33(a)(iv), 4.36 and 5.10, Parent and its
Affiliates shall not, and Parent shall cause its Affiliates not to, directly or
indirectly solicit or seek to induce any of the employees of the New Group, or
any of the employees of Purchaser who were former Employees, on or after the
Closing Date to leave their employment or positions with the New Group or
Purchaser, PROVIDED, HOWEVER, that "solicit or seek to induce" shall not
include, and none of Parent or any of its Affiliates shall be prohibited from
(A) advertising employment opportunities in any national newspaper, trade
journal or other publication in a major metropolitan area, e.g. Columbus, Ohio
or Pittsburgh, Pennsylvania, or any third party Internet website posting, or
negotiating with, offering employment to or employing such persons contacted
through such medium, (B) participating in any third party hiring fair or similar
event open to the public or negotiating with, offering employment to or
employing such persons contacted through such medium, (C) soliciting,
negotiating with, offering employment to or employing a former employee of the
New Group at any time (x) following the six-month anniversary of the termination
by such employee of his or her employment with the New Group or (y) at any time
after the termination by Purchaser or the New Group of such employee's
employment with the New Group or (D) soliciting, negotiating with or offering
employment to the Persons listed on EXHIBIT 4.14(b) prior to the Closing Date
and the Foodservice Employees prior to the end of the Transition Period,
PROVIDED, HOWEVER, such Persons shall not be hired by or transferred to Parent
or any of its Affiliates (other than Seller or AHCGC) prior to the Closing Date.
Parent shall be responsible for any violation of this covenant by any of its
Affiliates or employees.
(c) During the Transition Period, Parent and its Affiliates shall not,
and Parent shall cause its Affiliates not to, directly or indirectly solicit or
seek to induce any of the Salaried Employees retained by Parent in accordance
with SECTIONS 4.36 and 5.10 hereof to (x) leave their employment or positions
with respect to the Business or (y) not to be employed by the New Group at any
time during or at the end of the expiration of the Transition Period, PROVIDED,
HOWEVER, that "solicit or seek to induce" shall not include, and none of Parent
or any of its Affiliates shall be prohibited from (A) advertising employment
opportunities in any national newspaper, trade journal or other publication in a
major metropolitan area, e.g. Columbus, Ohio or Pittsburgh, Pennsylvania, or any
third party Internet website posting, or negotiating with, offering employment
to or employing such persons contacted through such medium, (B) participating in
any third party hiring fair or similar event open to the public or negotiating
with,
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offering employment to or employing such persons contacted through such medium
or (C) soliciting, negotiating with or offering employment to the Foodservice
Employees prior to the end of the Transition Period. Parent shall be responsible
for any violation of this covenant by any of its Affiliates or employees.
(d) Nothing in the foregoing provisions of this SECTION 4.14 shall:
(i) restrict the activities described in EXHIBIT 4.14(d)(i)
hereof;
(ii) prohibit, restrict or limit in any manner the design,
development, distribution, servicing, sale or marketing by Parent or any of its
Affiliates of any products that contain, use or include glass parts as
components of products that are not primarily made of glass (e.g., a glass lid
for a metal frying pan), PROVIDED that such glass components are not
manufactured by Parent or any of its Affiliates (other than at the Exempt
Facilities);
(iii) prohibit any Person not previously an Affiliate of Parent
that becomes a controlling Affiliate of Parent following the Closing Date, by
way of a bonafide third-party acquisition of Parent (by way of merger, asset
sale or other combination or otherwise not intended to be a device for the
purpose of avoiding these covenants herein), from continuing to engage in a
Competing Business in which it is engaged at the time it becomes such a
controlling Affiliate of Parent, so long as the management of Parent, Operating
Company or Seller are not involved in such Competing Business;
(iv) prohibit Parent or any of its Affiliates from acquiring
equity interests in, or the assets of, a Person (such Person, together with any
Affiliate (or portion of any Affiliate) acquired with such Person, the "ACQUIRED
PERSON"), PROVIDED (A) if the revenues of such Acquired Person (or generated
from such Acquired Person's acquired assets) and any Affiliates of Parent from
the Competing Business in the Western Hemisphere in the last twelve (12) full
months prior to such acquisition are greater than $10 million in such period,
Parent shall, and Parent shall cause such Acquired Person and such Affiliates of
Parent to, divest itself or themselves of the assets and operations of such
Acquired Person and such Affiliates of Parent that relate to the Competing
Business in the Western Hemisphere within twelve (12) months following the date
of such acquisition and (B) if the revenues of such Acquired Person (or
generated from such Acquired Person's acquired assets) and any Affiliates of
Parent from the Competing Business in the Western Hemisphere in the last twelve
(12) full months prior to such acquisition are less than $10 million, and after
the acquisition, the revenues of such Acquired Person (or generated from the
acquired assets of such Acquired Person) and any Affiliates of Parent from the
Competing Business in the Western Hemisphere shall in any twelve (12) month
period during the Non-Compete Period exceed $15 million, Parent shall, and
Parent shall cause such Acquired Person and such Affiliates of Parent to, divest
itself or themselves of the assets and operations of such Acquired Person and
such Affiliates of Parent that relate to the Competing Business in the Western
Hemisphere within twelve (12) months following the end of the period in which
the $15 million revenue threshold was exceeded;
(v) prohibit the sale of the glass products purchased from Seller
(the "AH PRODUCTS") in the Ordinary Course of Business by Xxxxxx International,
a division of Operating Company, and Xxxxxx Limited; PROVIDED, that (A) such AH
Products may be sold only
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for use or resale outside North America and (B) the AH Products may be sold and
delivered by Xxxxxx International, a division of Operating Company, and Xxxxxx
Limited only for a period of one hundred eighty (180) days after the Closing
Date; or
(vi) require Parent or its Affiliates to prohibit the resale in the
Western Hemisphere by any customer not affiliated with Parent or Seller of
products manufactured at the Exempt Facilities, PROVIDED none of Parent or
Seller or their respective Affiliates may solicit any customer in the Western
Hemisphere relating to the Competing Business or have a branch office in the
Western Hemisphere relating to a Competing Business (other than as otherwise
permitted under subclause (vii) below).
(e) As used in this SECTION 4.14, (i) "COMPETING BUSINESS" shall mean
the design, development, manufacture, distribution, servicing, sale or marketing
of glass products (other than Foodservice Channel Activities) that have been
manufactured or sold by the Companies within the two (2) year period prior to
the Closing and any other glass products similar in design or function; (ii)
"FOODSERVICE CHANNEL ACTIVITIES" shall mean (A) the design, development,
manufacture, distribution, servicing, sale or marketing of glass products in
each case solely in or for the Foodservice Channel anywhere in the world and (B)
selling any such glass products that were originally intended to be sold into
the Foodservice Channel to liquidators anywhere in the world; (iii)
"PARTICIPATE" and "PARTICIPATING" shall mean to have any direct or indirect
interest (economic or otherwise) in any enterprise, whether as a manufacturer,
distributor, reseller, officer, director, employee, partner, stockholder,
member, sole proprietor, agent, representative, independent contractor,
consultant, franchiser, franchisee, creditor, owner or otherwise and including
sales (whether direct or to a Person who directly or indirectly resells in the
Western Hemisphere), but shall not include the ownership of less than one
percent (1%) of the stock of a publicly-held corporation whose stock is traded
on a national securities exchange or listed with the Nasdaq Stock Market and
(iv) "WESTERN HEMISPHERE" shall mean the geographic area set forth on the map
attached hereto as EXHIBIT 4.14(e), including Xxxxx Xxxxxxx, Xxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx, the Caribbean islands and the Hawaiian islands.
(f) If the final judgment of a court of competent jurisdiction declares
that any term or provision of this SECTION 4.14 is invalid or unenforceable, the
parties hereto agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or area of
the term or provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
(g) Seller and Parent agree that the New Group and Purchaser and its
Affiliates may suffer irreparable harm from a breach of any of the covenants
and/or agreements contained in this SECTION 4.14. In the event of an alleged or
threatened breach by Parent or any of its Affiliates of any of the provisions of
this SECTION 4.14, the New Group or Purchaser or their Affiliates or its
successors and assigns may, in addition to all other rights and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof (including the extension of the
Non-Compete Period by a period equal to the length of the
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violation of this SECTION 4.14). In the event an alleged breach or violation by
Parent or any of its Affiliates of any of the provisions of this SECTION 4.14,
the Non-Compete Period shall be tolled if such alleged breach or violation is
resolved against Parent or its Affiliates.
(h) The parties hereto acknowledge that the covenants in this SECTION
4.14 are intended to benefit Purchaser, the New Group and any Affiliates of
Purchaser from and after the Closing.
SECTION 4.15 NO SOLICITATION.
(a) From the Execution Date through the Closing, Parent, Operating
Company, Canadian Seller and the Companies and their respective Representatives
shall not, directly or indirectly, enter into, solicit or initiate any
discussions or negotiations with, or encourage or respond to any inquiries or
proposals by, or participate in any negotiations with, or provide any
information to, or otherwise cooperate in any other way with, any Person, other
than Purchaser and its Representatives, concerning any sale of all or any
material portion of the Business, or of the Shares or any equity securities of
the Companies, or any merger, consolidation, liquidation, dissolution or similar
transaction involving the Companies or any material portion of the Assets (a
"PROPOSED ACQUISITION"). Parent and Seller agree that they will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties (other than Purchaser) heretofore conducted, or
the provision by Parent or its Affiliates, including the Companies or any of
their respective Representatives of information to any party (other than
Purchaser) to which information heretofore has been provided with respect to a
Proposed Acquisition. If, after the Execution Date, Parent or its Affiliates,
including the Companies or any of their respective Representatives receives any
such inquiry or proposal or request for information, or offer to discuss or
negotiate with respect to any Proposed Acquisition, Parent and Seller will, and
Parent shall cause its Affiliates, including the Companies and Canadian Seller,
to (i) not respond to any such inquiry or proposal or request and (ii)
immediately provide notice thereof to Purchaser, including all material terms of
the Proposed Acquisition and the identity of the proposing party or parties.
(b) From the Execution Date through the Closing, Parent shall not, and
shall cause its Affiliates and Parent's and such Affiliates' respective
employees not to, (i) directly or indirectly solicit or seek to induce any
Employee to leave his or her employment or positions with the Companies or (ii)
hire or transfer or permit any hire or transfer of any Employee or any person
who was an Employee within the ninety (90) days prior to the date of such hire
or transfer to positions or employment with Parent or any of its Affiliates,
PROVIDED, Parent and its Affiliates may solicit, offer employment to and employ
the persons set forth on EXHIBIT 4.15(b) and the Foodservice Employees hereof
and may offer employment to the Salaried Employees prior to Closing and during
the Transition Period in accordance with SECTIONS 4.36 and 5.10 hereof.
SECTION 4.16 ASSET TRANSFER TRANSACTIONS.
(a) SELLER ASSETS. Prior to the Closing, Seller shall, in accordance
with all applicable Laws, transfer, convey and deliver to Newco, and Newco shall
accept and assume, all right, title and interest of Seller in and to (i) (1) all
tangible assets located at the Facilities, (2) all tangible assets not located
at the Facilities which are used primarily or held for use primarily in
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connection with, or that relate primarily to, the design, development,
manufacture, distribution, servicing, sale or marketing of consumer or specialty
glass products, (3) all the software and firmware embedded in or used to control
or operate the tangible assets described in clauses (1) or (2) above, (4) all
intangible assets (including all rights, privileges, Permits and Contracts) not
described in clause (3) above primarily used or held for use or used primarily
in connection with, or that relate primarily to, the design, development,
manufacture, distribution, servicing, sale or marketing of consumer or specialty
glass products, (5) all Employees of the Companies (other than (I) Canadian
Employees, (II) the employees listed on EXHIBIT 4.15(b) and the Foodservice
Employees and (III) if hired by or transferred to Parent or any of its
Affiliates effective as of the Closing, the employees listed on EXHIBIT 4.14(b))
and (6) all assets reflected on the Final Closing Date Balance Sheet, and (ii)
without limiting the foregoing, the Specified Seller Assets (collectively, the
"SELLER ASSETS"). Notwithstanding the foregoing, the Seller Assets shall not
include any of the Excluded Seller Assets, or after the date hereof, the
Foodservice Assets. "SPECIFIED SELLER ASSETS" shall mean (A) all of the Company
Properties not owned or leased by AHCGC, (B) all Contracts set forth on SECTION
4.16(a)(B) of the Disclosure Schedule, (C) all Intellectual Property set forth
on SECTION 4.16(a)(C) of the Disclosure Schedule, (D) certain other assets set
forth on SECTION 4.16(a)(D) of the Disclosure Schedule and (E) all of the issued
and outstanding capital stock of AHCGC.
(b) EXCLUDED SELLER ASSETS. Notwithstanding any other provision of this
Agreement, Parent and its Affiliates shall retain, and shall not transfer to
Newco hereunder or otherwise, and if held by AHCGC, shall cause AHCGC to
transfer to Seller or another Affiliate of Parent (other than Newco), as
directed by Parent, (i) the assets, rights, privileges, Permits and Contracts
listed on SECTION 4.16(b) of the Disclosure Schedule, (ii) the assets which are
both (x) owned, leased or licensed and used by Parent or its Affiliates (other
than Seller or AHCGC) in providing services that are listed in SECTION 2.18(b)
of the Disclosure Schedule and (y) if a tangible asset, not located at any
Facility, (iii) the working capital assets and other financial assets provided
by Parent and its Affiliates (other than Newco or AHCGC) which are not included
in the definition of Net Working Capital, (iv) the assets (x) owned, leased or
licensed that will be used by Parent or its Affiliates (other than Seller or
AHCGC) to provide services to Purchaser and the New Group under the Transition
Services Agreement and (y) are not located at any Facility, (v) the capital
stock and other equity interests of any Person other than AHCGC and Newco held
by Seller, (vi) the Former Properties, and (vii) the Shared Assets (the
privileges, assets, rights, Permits and Contracts described in clauses (i)-(vii)
above are collectively referred to herein as the "EXCLUDED SELLER Assets").
Notwithstanding the foregoing, the Excluded Seller Assets shall not include any
Specified Seller Asset.
(c) ASSUMPTION OF SELLER LIABILITIES. Subject to CLAUSE (d) below,
prior to the Closing, Parent and its Affiliates shall transfer to Newco and
Newco shall assume and thereafter pay, honor and discharge when due, (i) all
Liabilities (other than (A) Tax Liabilities, (B) Liabilities to be cancelled
pursuant to SECTION 4.10 or 4.23 hereof, (C) all Liabilities associated with or
relating to the Excluded Seller Assets) of Seller relating exclusively to the
Business, (ii) all Liabilities relating exclusively to the Outside Assets, (iii)
all Liabilities related to collective bargaining grievances including those
grievances set forth in SECTION 2.28(a)(iii) of the Disclosure Schedule and (iv)
all Liabilities reflected in the Final Closing Net Working Capital
(collectively, and excluding the Excluded Seller Liabilities, the "ASSUMED
SELLER LIABILITIES").
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Notwithstanding anything to the contrary contained herein, Purchaser shall be
responsible for and shall pay, to the extent applicable, (1) all fees and
expenses that need to be paid in connection with any change-in-control or
similar provisions contained in the Trademark License Agreements, and (2) all
(x) other fees or amounts to be paid to obtain the consent of the other party to
the Trademark License Agreements to transfer the agreements at or prior to the
Closing or to permit the consummation of the transaction contemplated hereby
without violation of such agreements and (y) liabilities arising out of or
relating to the failure to obtain such consent of the other parties to the
Trademark License Agreements, and all of the foregoing shall be Assumed Seller
Liabilities; PROVIDED, HOWEVER, that all liabilities or obligations for any
breach of, or amount due under, any Trademark License Agreement arising or
occurring or relating to periods prior to the Closing and not triggered by the
transactions contemplated hereby shall be Seller Retained Liabilities.
(d) EXCLUDED SELLER LIABILITIES. Notwithstanding any other provision of
this Agreement, Newco shall not assume, incur or otherwise be responsible for
any Liabilities of Seller, other than the Assumed Seller Liabilities and other
than as provided for in ARTICLE VIII, whether actual or contingent, matured or
unmatured, liquidated or unliquidated, or known or unknown, whether arising out
of the occurrences prior to, at or after the Execution Date (and in no event,
whether or not included within the definition of Assumed Seller Liabilities,
shall Newco assume, incur or otherwise be responsible for (i) any Seller
Retained Liability, (ii) any Liability arising out of a matter described in
clauses (vii), (ix), (xi), (xii) or (xiii) of SECTION 8.2(a), (iii) any
Liability associated with or relating to any Excluded Seller Asset or (iv) to
the extent relating to the Foodservice Business (provided, if prior to the date
of this Agreement Newco shall have assumed Liabilities described in this clause
(iv), this covenant shall not be deemed breached if Newco subsequently complies
with its covenants in SECTION 4.33)) (collectively, the "EXCLUDED SELLER
LIABILITIES").
(e) OUTSIDE ASSETS. Prior to the Closing, Parent shall and Parent shall
cause its Affiliates to, in accordance with all applicable Law, effect the
assignment and transfer of all of their right, title and interest in and to the
Outside Assets to Newco or AHCGC, as designated in writing by Purchaser within
twenty (20) Business Days after the Execution Date.
(f) INSTRUMENTS OF ASSIGNMENT AND ASSUMPTION.
(i) ASSIGNMENT OF SELLER ASSETS. To effect the assignment of the
Seller Assets and the assumption of the Assumed Seller Liabilities contemplated
by this SECTION 4.16, Parent will, and Parent will cause Seller and Newco to
execute and deliver to one another prior to Closing the following documents,
each of which will be reasonably satisfactory in form and substance to
Purchaser:
(A) a xxxx of sale conveying to Newco all of Seller's personal
property included in the Seller Assets;
(B) assignments of all Contracts included in the Seller Assets
which shall assign to Newco all of Seller's right, title and interest
therein and thereto;
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(C) assignments of patents and trademarks and other
Intellectual Property rights included in the Seller Assets in
recordable form to the extent necessary to assign such rights to Newco;
(D) a special warranty deed with respect to each parcel of
Owned Property, together with any necessary transfer declarations or
other filings;
(E) an assignment of lease with respect to each lease included
in the Company Properties, together with any necessary transfer
declarations;
(F) certificates of title to all motor vehicles included in
the Seller Assets, duly endorsed for transfer to Newco; and
(G) such other instruments and documents as are necessary to
properly transfer and assign the Seller Assets to Newco in accordance
with the provisions of this SECTION 4.16.
(ii) ASSUMPTION OF ASSUMED LIABILITIES. Prior to Closing, Newco
shall deliver to Parent and Seller an instrument of assumption evidencing
Newco's assumption of the Assumed Seller Liabilities, in form and substance
reasonably satisfactory to Purchaser.
(iii) OUTSIDE ASSETS. All assignment and assumption instruments
and documents used to transfer the Outside Assets to Newco or AHCGC prior to
Closing shall be reasonably satisfactory in form and substance to Purchaser.
(iv) ASSET TRANSFER DOCUMENTS. Each of the transfer, assignment
and assumption documents required for the Asset Transfer Transactions and
described in this SECTION 4.16(f) shall be referred to herein as the "ASSET
TRANSFER DOCUMENTS."
(g) FURTHER ACTIONS. To the extent that time does not permit proper
recordation of such assignments contemplated by this SECTION 4.16, as for
example in the case of certain assignments of Intellectual Property, Seller
shall cause the assignment of beneficial title therein to be effected prior to
the Closing and, subsequent to the Closing, will provide all assistance and
cooperation as is necessary to effectuate recordable assignment of such assets.
If for a period of twenty-four (24) months after the Closing Date, it is
discovered by either of the parties hereto that (i) certain assets and
properties of the Business were not properly included in the Outside Assets and
assigned to the New Group or (ii) certain assets and properties of Seller which
relate to the Business were not properly included in the Seller Assets and
assigned to Newco or (iii) certain assets and properties of Canadian Seller
which were required to be transferred to Canadian Purchaser pursuant to the
Canadian Purchase Agreement and were not properly transferred to Canadian
Purchaser at Closing, Seller shall promptly and Parent shall cause its
Affiliates (including Operating Company, Seller and Canadian Seller) to promptly
take all actions necessary to effect the proper assignment and transfer of all
right, title and interest in all such assets and properties to Newco or AHCGC,
as designated by Purchaser, PROVIDED that Contracts that were not properly
assigned shall be subject to the limitations set forth in SECTION 4.21 hereof.
If for a period of twenty-four (24) months after the Closing Date, it is
discovered by
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either of the parties hereto that (i) any Excluded Seller Asset was improperly
assigned to Newco or retained by or assigned to AHCGC or (ii) any Assumed Seller
Liability was not properly assumed by Newco prior to the Closing or (iii) any
Canadian Liability (other any Excluded Canadian Liability, as such term is
defined in the Canadian Purchase Agreement) which was required to be assumed by
Canadian Purchaser pursuant to the Canadian Purchase Agreement and was not
properly assumed by Canadian Purchaser at the Closing, Purchaser shall, and
Purchaser shall cause its Affiliates to, take all actions necessary to effect
the assignment back to Parent or one of its Affiliates, as designated by Parent,
of such Excluded Seller Assets, or the assumption by Purchaser or one of its
Affiliates, as designated by Purchaser, of such Assumed Seller Liabilities or
Canadian Liabilities, as the case may be.
SECTION 4.17 CANADIAN ASSET ACQUISITION. Subject to the terms and
conditions hereto, Parent shall cause Canadian Seller to and Purchaser shall
cause Canadian Purchaser to consummate the transactions contemplated by the
Canadian Purchase Agreement effective upon the Closing.
SECTION 4.18 FINANCIAL STATEMENTS.
(a) AUDITED FINANCIAL STATEMENTS. Within fifteen (15) days after the
Execution Date, Parent shall (i) prepare, and shall cause its auditors to
provide a report with respect to the Audited Financial Statements and deliver
such financial statements and an associated unqualified opinion of Parent's
auditors to Purchaser and (ii) prepare the Interim Financial Statements and
deliver to Purchaser such financial statements and cause Parent's auditors to
provide an associated review report under SAS 71.
(b) FINAL STUB PERIOD FINANCIAL STATEMENTS. Parent shall also prepare
the Final Stub Period Financial Statements and shall cause its auditors to
provide an associated review report under SAS 71, both of which shall be
provided to Purchaser within forty-five (45) days after the end of the
applicable calendar quarter (whether or not such 45th day is after the Closing
Date).
(c) QUARTERLY PERIOD FINANCIAL STATEMENTS. Parent shall also prepare
unaudited consolidated balance sheets, three month and year-to-date statements
of income, cash flows and stockholders equity of the Division at and for each of
the calendar quarters ending between the Execution Date and the Closing Date
(collectively the "QUARTERLY PERIOD FINANCIAL STATEMENTS") which Quarterly
Period Financial Statements shall be provided to Purchaser within thirty (30)
days of the end of each applicable calendar quarter (other than, if applicable,
the calendar quarter ending December 31, 2001). Each of the Quarterly Period
Financial Statements shall (A) except as set forth in SECTION 2.7(ii) of the
Disclosure Schedule as of the Execution Date, fairly present in all material
respects the consolidated financial condition, results of operations, cash flows
and stockholders equity of the Division as of the date thereof or for the period
covered thereby and shall be consistent in all material respects with the Books
and Records of Parent and its Affiliates (as so consolidated) and (B) have been
prepared in accordance with GAAP consistent with the accounting principles and
practices applied in preparation of the 2000 Audited Financial Statements,
applied on a consistent basis throughout the periods indicated, subject to
normal and recurring year-end adjustments that are not expected to be material
in amount. Except as provided in SECTION 2.7(c), none of Parent or its
Affiliates
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makes any representation or warranty, express or implied, as to the Quarterly
Period Financial Statements.
(d) BLUE BOOK REPORTS. Between the Execution Date and Closing, Parent
shall provide Purchaser monthly "blue book" reports (including the accompanying
analysis and reports) with respect to the Companies and the Business (excluding,
at Parent's option, data specific to the Foodservice Business) within three (3)
Business Day after such report is produced at the Companies. None of Parent or
its Affiliates makes any representation or warranty, express or implied, as to
the blue book reports.
(e) 2001 AUDITED FINANCIAL STATEMENTS. Parent shall also prepare, and
cause its auditors to provide an associated unqualified opinion with respect to,
the 2001 Audited Financial Statements, which 2001 Audited Financial Statements
shall be provided to Purchaser within fifty (50) days of the end of calendar
year 2001.
(f) FOODSERVICE ANNUAL PRO FORMA STATEMENTS. Within five (5) Business
Days after the date hereof, Parent shall deliver to Purchaser unaudited pro
forma statements of certain assets and liabilities of the Foodservice Business
at December 31, 2001 and December 31, 2000 and unaudited pro forma statements of
income and expense of the Foodservice Business for the years ended December 31,
2001, 2000 and 1999 (collectively, the "FOODSERVICE ANNUAL PRO FORMA
STATEMENTS"), which shall be accompanied by Parent's Independent Public
Accountants' Report on Applying Agreed-Upon Procedures in all material respects
in the form and of the substance attached hereto as EXHIBIT 4.18(f) (the
"SPECIAL PROCEDURES REPORT").
(g) FOODSERVICE FINAL STUB PERIOD PRO FORMA STATEMENTS. Parent shall
prepare for the most recently ended year to date quarterly period between
December 31, 2001 and the Closing Date (the "FINAL FOODSERVICE STUB PERIOD") (x)
unaudited pro forma statements of certain assets and liabilities of the
Foodservice Business as of the last day of the Final Foodservice Stub Period and
(y) unaudited pro forma statements of income and expense of the Foodservice
Business for the Final Foodservice Stub Period (collectively, the "FOODSERVICE
FINAL STUB PERIOD PRO FORMA STATEMENTS"), which shall be accompanied by Parent's
Independent Public Accountants' Report on Applying Agreed-Upon Procedures, which
report shall in all material respects utilize and consistently apply the
procedures and methodologies of the Special Procedures Report (except as
otherwise expressly provided therein and except for such changes that may be
made to appropriately reflect the actual effecting of the Retention and the
transactions contemplated by SECTIONS 4.33 and 4.37 herein), all of which shall
be provided to Purchaser within forty-five (45) days after the end of the Final
Foodservice Stub Period.
(h) FOODSERVICE 2001 QUARTERLY PERIOD PRO FORMA STATEMENTS. Parent
shall prepare, utilizing and consistently applying, in all material respects,
the methodologies and procedures utilized in preparation of the Foodservice
Annual Pro Forma Statements, at and for each of the first, second and third
calendar quarters of calendar year 2001) (x) unaudited pro forma statements of
certain assets and liabilities of the Foodservice Business as of the last day of
each such calendar quarter (y) unaudited pro forma statements of income and
expense of the Foodservice Business for each such calendar quarters
(collectively the "FOODSERVICE 2001 QUARTERLY PERIOD PRO FORMA Statements"),
which shall be provided to Purchaser within ten (10) Business Days after the
date hereof.
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(i) ADJUSTED DIVISION 2000 AND 1999 PRO FORMA STATEMENTS. Parent shall
prepare (i) unaudited pro forma statements of certain assets and liabilities
reflecting (x) the audited consolidated balance sheets of the Division as of
December 31, 2000 MINUS (y) the unaudited statements of certain assets and
liabilities of the Foodservice Business as of December 31, 2000, included in the
Foodservice Annual Pro Forma Statements; and (ii) unaudited pro forma statements
of income and expense reflecting (x) the audited consolidated statements of
income of the Division for the years ended December 31, 2000 and 1999 MINUS (y)
the unaudited statements of income and expense of the Foodservice Business for
the years ended December 31, 2000 and 1999, respectively, included in the
Foodservice Annual Pro Forma Statements (collectively, the "ADJUSTED DIVISION
2000 AND 1999 PRO FORMA Statements"), which shall be provided to Purchaser
within five (5) Business Days of the date hereof.
(j) ADJUSTED DIVISION 2001 PRO FORMA STATEMENTS. Parent shall prepare
(x) an unaudited pro forma statement of certain assets and liabilities
reflecting (1) the audited consolidated balance sheet of the Division included
in the 2001 Audited Financial Statements, MINUS (2) the unaudited statement of
certain assets and liabilities of the Foodservice Business as of December 31,
2001 included in the Foodservice Annual Pro Forma Statements; and (y) an
unaudited pro forma statement of income and expense reflecting (1) the audited
consolidated statement of income and expense of the Division included in the
2001 Audited Financial Statements, MINUS (2) the unaudited statement of income
and expense of the Foodservice Business for the year ended December 31, 2001
included in the Foodservice Annual Pro Forma Statements (collectively, the
"ADJUSTED DIVISION 2001 PRO FORMA STATEMENTS"), which shall be provided to
Purchaser within fifty (50) days of the end of calendar year 2001.
(k) ADJUSTED DIVISION FINAL STUB PERIOD PRO FORMA STATEMENTS. Parent
shall prepare (x) an unaudited pro forma statement of certain assets and
liabilities reflecting (1) the consolidated balance sheet of the Division
included in the Final Stub Period Financial Statements, MINUS (2) the unaudited
statement of certain assets and liabilities of the Foodservice Business included
in the Foodservice Final Stub Period Pro Forma Statements; and (y) an unaudited
pro forma statement of income and expense reflecting (1) the unaudited
consolidated statement of income of the Division included in the Final Stub
Period Financial Statements, MINUS (2) the unaudited statement of income and
expense of the Foodservice Business included in the Foodservice Final Stub
Period Pro Forma Statements (collectively, the "ADJUSTED DIVISION FINAL STUB
PERIOD PRO FORMA STATEMENTS"), which shall be provided to Purchaser within
forty-five (45) days after the end of the Final Foodservice Stub Period (whether
or not such 45th day is after the Closing Date).
(l) ADJUSTED DIVISION 2001 QUARTERLY PERIOD PRO FORMA STATEMENTS.
Parent shall also prepare for each of the first, second and third calendar
quarters of the year 2001 (x) an unaudited pro forma statement of certain assets
and liabilities reflecting (1) the consolidated balance sheet of the Division
included in the Quarterly Period Financial Statements for each such calendar
quarter, MINUS (2) the unaudited statement of certain assets and liabilities of
the Foodservice Business included in the Foodservice 2001 Quarterly Period Pro
Forma Statements for each such calendar quarter, respectively; and (y) an
unaudited pro forma statement of income and expense reflecting (1) the unaudited
consolidated statement of income of the Division included in the Quarterly
Period Financial Statements for each such calendar quarter, MINUS (2) the
unaudited statement of income and expense of the Foodservice Business included
in the
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Foodservice 2001 Quarterly Period Pro Forma Statements for each such calendar
quarter, respectively (collectively, the "ADJUSTED DIVISION 2001 QUARTERLY
PERIOD PRO FORMA STATEMENTS"), each of which shall be provided to Purchaser
within ten (10) Business Days after the date hereof.
SECTION 4.19 AUDITORS CONSENT AND COOPERATION.
(a) Simultaneously with the execution and delivery of the Subsequent
Financial Statements, Parent shall cause Xxxxxx Xxxxxxxx LLP ("XXXXXX XXXXXXXX")
to deliver to Purchaser a duly executed letter in which Xxxxxx Xxxxxxxx: (i)
acknowledges that it understands that Purchaser intends to file the Audited
Financial Statements and the Final Stub Period Financial Statements (as required
by the Securities Exchange Commission (the "SEC") pursuant to the Securities Act
and the Exchange Act ("SEC FILINGS")), and the 2001 Audited Financial Statements
in statements and reports required to be filed by Purchaser and its successors
from time to time with the SEC pursuant to SEC Filings, (ii) subject to its
usual procedures and professional standards and after being given reasonable
opportunity to review such SEC Filings and documents incorporated by reference
therein, agrees that it shall consent to the inclusion of any of its audit
reports on the Audited Financial Statements and, if provided, the 2001 Audited
Financial Statements in any SEC Filing, until such financial statements and
consents are no longer required to be included in such SEC Filing by the
Securities Act or the Exchange Act and (iii) acknowledges that Purchaser will be
providing the Subsequent Financial Statements, the Final Stub Period Financial
Statements and if provided prior to the Closing, the 2001 Audited Financial
Statements, to potential lenders for the transactions contemplated hereby,
including those under the Commitment and the Credit Agreement. Parent shall use
commercially reasonably efforts to cause Xxxxxx Xxxxxxxx, including by providing
customary representation letters and other customary documents and instruments,
(I) to consent to the inclusion of any of its audit reports on the Audited
Financial Statements, and if provided, the 2001 Audited Financial Statements, in
any SEC Filing and (II) to issue customary comfort letters (concerning matters
which are the subject of (w) the Audited Financial Statements, (x) the Final
Stub Period Financial Statements, (y), if provided, the 2001 Audited Financial
Statements or (z) the pro forma adjustments reflected (without alteration or
adjustment) in the Foodservice Annual Pro Forma Statements or the Foodservice
Final Stub Period Pro Forma Statements) that may be required in connection with
any offering of debt or equity securities by Purchaser or its successors (after
being given reasonable opportunity to review such offering documents).
(b) If Xxxxxx Xxxxxxxx fails, for any reason whatsoever, to consent to
the inclusion of any such audit reports on the Audited Financial Statements and
the 2001 Audited Financial Statements in any SEC Filing or to provide such
comfort letters, Parent shall, and shall cause Seller to, (i) provide
Purchaser's Representatives access to its Books and Records and personnel
commensurate with what it provided Xxxxxx Xxxxxxxx in connection with its audit
of the Audited Financial Statements and, the 2001 Audited Financial Statements
and its review of the Final Stub Period Financial Statements so that Purchaser
may expeditiously cause any or all of such financial statements to be reaudited,
again reviewed or to be so confirmed by "comfort" letters as the case may be,
(ii) use commercially reasonable efforts to cause Xxxxxx Xxxxxxxx to cooperate
with the auditors engaged by Purchaser to conduct such audit or review and (iii)
provide customary representation letters and other customary documents and
instruments. Seller and Parent acknowledge that if Xxxxxx Xxxxxxxx fails to
consent to the inclusion of any such
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audit reports in any SEC Filing and Purchaser or any of its successors is denied
in any manner whatsoever the access provided for in this SECTION 4.19(b),
Purchaser and its successors (if any) will suffer irreparable injury and damage.
Therefore, Seller and Parent agree that if Purchaser or its successors is denied
access provided for in this SECTION 4.19(b) in any manner whatsoever, Purchaser
and its successors (if any) will be entitled to, in addition to all other
remedies available to it, injunctive relief and specific performance to prevent
the breach of and to secure the enforcement of this SECTION 4.19(b).
SECTION 4.20 FINANCING.
(a) Purchaser agrees to use all commercially reasonable efforts to
obtain the funding under the Credit Agreement and renew the commitment of the
lenders under the Credit Agreement if terminated, expired or lapsed. In
particular, Purchaser agrees to use all commercially reasonable efforts to
obtain all necessary consents, opinions, certificates and other documentation
necessary to obtain funding under the Credit Agreement.
(b) Prior to the Closing Date, Parent agrees to use all commercially
reasonably efforts to provide and to cause any of its Affiliates (including
Seller) and their respective Representatives to provide all necessary
cooperation in connection with arrangement of Financing in respect of the
transactions contemplated by this Agreement, including participating in
meetings, due diligence sessions, preparation of any financing documents or
other reasonably requested certificates or documents.
SECTION 4.21 CONSENTS, NOTICES AND APPROVALS GENERALLY
(a) Parent shall (and to the extent necessary, shall cause its
Affiliates to) use all commercially reasonable efforts to obtain all Consents of
all Governmental Authorities and all other Persons (i) that are necessary for
that party's execution and delivery of, and the performance of its obligations
pursuant to this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated by this Agreement, (ii) that are required with
respect to any Material Permits, Material AHCGC Permits or Material Contracts,
(iii) that are required with respect to a Contract or Permit listed on SCHEDULE
7.2(c)(ii) or (iv) as may be reasonably requested by Purchaser in writing in a
timely manner and will cooperate with the other parties hereto in promptly
seeking to obtain all such Consents; PROVIDED that (x) with respect to all
antitrust matters, such matters shall be governed by SECTION 4.4 hereof and (y)
to the extent expenses and costs associated with obtaining such Consents are
established or required by the terms of the Contract (other than the Trademark
License Agreements) or the Permit, they shall be solely for the account of and
paid by Parent. Parent's and Purchaser's obligations under this SECTION 4.21(a)
shall terminate one (1) year after the Closing. Except to the extent notices
must be given by Purchaser alone, Parent shall or shall cause its Affiliates to
give all required notices to third parties (including Governmental Authorities,
except to the extent such notice is not required by Law). Purchaser shall
cooperate and use commercially reasonable efforts to assist Parent and the
Companies in giving such notices and obtaining such Consents.
(b) Notwithstanding anything in this Agreement to the contrary, to the
extent that any Contract to be transferred pursuant to the terms of this
Agreement or any Ancillary Agreement may not be properly transferred without the
Consent of a third-party (including any
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Governmental Authority), or if the transfer or attempted transfer would
constitute a violation or breach thereof or a violation of any Law, nothing in
this Agreement will constitute a transfer or an attempted transfer thereof and,
except as provided for in SECTION 4.21(d) below and except for the Trademark
License Agreements, Purchaser and the New Group shall not be deemed to assume
any Liabilities thereunder until properly transferred.
(c) To the extent that the Consents described in SECTION 4.21(a) or
that are otherwise necessary to assign, transfer, sublease or sublicense any of
the Assets to Newco, AHCGC, Canadian Purchaser or to Purchaser are not obtained
prior to Closing, Parent and its Affiliates shall, commencing on the Closing
Date and continuing for the shorter of (x) the duration (without giving effect
to any termination right arising out of the transactions contemplated by this
Agreement) of each such Asset (subject to extensions thereof as requested by
Purchaser to the extent expressly provided for under such Contract or Permit),
or (y) the period ending upon Parent's receipt of written notice (or, if later,
the effective time of such termination set forth in such notice) from Purchaser
that Purchaser no longer desires such Asset, use commercially reasonable efforts
(which shall not be deemed to include a guarantee of performance by Parent or
Seller) to (A) provide to Purchaser and its Affiliates the benefits of any such
Asset not assigned, transferred, subleased or sublicensed due to Parent's or its
Affiliates' failure or inability to obtain such Consent, (B) cooperate with
Purchaser and its Affiliates to reach a reasonable and lawful arrangement
designed to provide such benefits to Purchaser and its Affiliates during such
period and (C) enforce at the request of Purchaser, or allow Purchaser and its
Affiliates to enforce (and, solely for such purpose, Parent hereby constitutes
and appoints Purchaser or the subject Affiliate as its true and lawful
attorney-in-fact), any rights of Parent and its Affiliates under any such Asset
against the issuer thereof or the other party or parties thereto (including the
right to elect to terminate such of the foregoing in accordance with the terms
thereof upon the request of Purchaser); PROVIDED, HOWEVER, that the reasonable
costs and expenses (including reasonable professional fees and expenses)
incurred by Parent or its Affiliates at Purchaser's request, and incurred by
Purchaser or its Affiliates, in each case, with respect to any of the actions
contemplated under (C) above, shall be borne equally by Purchaser and Seller.
The failure or inability to obtain any Consent subject to this SECTION 4.21
shall not be a breach of this Agreement so long as Parent and its Affiliates
have carried out their obligations under this SECTION 4.21, PROVIDED, the
foregoing shall not limit the conditions to Closing set forth in ARTICLE VII
hereof.
(d) To the extent that Purchaser or its Affiliates are provided the
benefits of any Asset pursuant to clause (c) of this SECTION 4.21, Purchaser or
such Affiliate shall perform for the benefit of the issuer thereof, or the other
party or parties thereto, the obligations of Parent or its relevant Affiliate,
as the case may be, thereunder or in connection therewith, but only to the
extent (i) that such action by Purchaser would not result in any default
thereunder or in connection therewith and (ii) such performance pertains to the
benefits provided to Purchaser or its Affiliates; PROVIDED, HOWEVER, that if
Purchaser or its Affiliate shall fail to perform to the extent required herein
and such failure continues for ten (10) Business Days following notice thereof
to Purchaser, Parent and its Affiliates shall (A) thereafter cease to be
obligated under this SECTION 4.21 to provide Purchaser or its Affiliates with
any benefits in respect of the Asset which is the subject of such failure to
perform unless and until such situation is remedied or, (B) at the sole option
of Parent (provided such Contract was (x) a Material Contract or (y) (1) a
non-
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Material Contract as to which Parent had at Closing notified Purchaser was to be
subject to this SECTION 4.21 and (2) within ten (10) Business Days after
Closing, Purchaser had not notified Parent of its desire not to be transferred
such Contract), Purchaser shall promptly pay or reimburse Parent to remedy such
failure to perform during such period of failure of performance for the shorter
of the periods set forth in subpart (x) or (y) of SECTION 4.21(c) above.
SECTION 4.22 COMPANY EXPENSES. Seller and Parent hereby represent and
covenant that all amounts payable by the Companies to financial advisors,
attorneys, accountants and other professionals in connection with the
transactions contemplated by this Agreement, are not and shall not be
Liabilities of the Companies and have been or will be fully paid by Seller or
Parent.
SECTION 4.23 RELEASE. Seller, agrees, on its own behalf and on behalf
of its Affiliates and successors and assigns, (i) to waive all rights of
indemnification from AHCGC and (ii) to release AHCGC from any and all
indemnification obligations under the Transfer Agreement, dated as of December
10, 1995, between Seller and AHCGC (the "1995 TRANSFER AGREEMENT"), under the
Assumption of Liabilities Agreement, dated as of December 31, 1995, between
Seller and AHCGC and under any other agreement associated with the 1995
Restructuring, effective as of the Closing.
SECTION 4.24 CONFIDENTIALITY.
(a) Each of Parent, Operating Company and Seller shall (and in each
case shall cause their respective Representatives and Affiliates to) keep
confidential prior to and after Closing, and shall not (and in each case shall
cause their respective Representatives not to) disclose to any Person, any
Confidential Information (as defined below) of Purchaser which may be or may
have been provided or disclosed to Parent or its Affiliates or their
Representatives in connection with the due diligence process or in the process
of negotiation of the transactions contemplated by this Agreement. Seller,
Parent and Operating Company shall (and in each case shall cause their
respective Representatives and Affiliates to) keep confidential prior to and
after the Closing, and shall not (and in each case shall cause their respective
Representatives not to) disclose to any Person, any Confidential Information to
the extent it relates to the Business. For purposes of this Agreement,
"CONFIDENTIAL INFORMATION" expressly includes, but is not limited to, any and
all non-public information, whether written or oral, including sales and
marketing information, financial information, customer lists, projections,
plans, proposals, compensation information, manufacturing processes and
technologies, balance sheets, marketing strategies, information regarding
suppliers, customers and sales personnel, income statements, Contracts,
documents, and all other materials which are not publicly available. With
respect to the Confidential Information of Purchaser, the term Confidential
Information does not include information which (i) is or becomes generally
available to the public other than as a result of a disclosure by Parent or any
of its Affiliates or any person acting on behalf of Parent or any of its
Affiliates or (ii) becomes available to Parent or its Affiliates on a
non-confidential basis from a source other than the Companies or their Employees
or former employees, PROVIDED that such source was not bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to Purchaser or its Affiliates with respect to
such information relating to the Purchaser. With respect to the Confidential
Information which relates to the Business which Parent and its Affiliates
possess, the term Confidential Information does not
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include information which (i) is or becomes generally available to the public
other than as a result of a disclosure by Parent or any of its Affiliates or any
person acting on behalf of Parent or any of its Affiliates or (ii) becomes
available to Parent or its Affiliates on a non-confidential basis from a source
other than the Companies or their Representatives or former employees, PROVIDED
that such source was not bound by a confidentiality agreement with, or other
contractual, legal or fiduciary obligation of confidentiality to Purchaser or
its Affiliates with respect to such information relating to the Business.
(b) Purchaser shall (and shall cause its Representatives and Affiliates
to) keep confidential prior to and after Closing, and shall not (and in each
case shall cause its Representatives and Affiliates not to) disclose to any
Person, any Confidential Information (i) of Parent or its Affiliates (other than
as relates to the Business) or (ii) to the extent relating to the Foodservice
Business, which may be or may have been provided or disclosed to Purchaser or
its Affiliates or Representatives in connection with the due diligence process
or in the process of negotiation of the transaction contemplated by this
Agreement. With respect to the Confidential Information of Parent or its
Affiliates (other than as relates to the Business), the term Confidential
Information does not include information which (i) is or becomes generally
available to the public other than as a result of a disclosure by Purchaser or
any of its Affiliates or any person acting on behalf of Purchaser or any of its
Affiliates or (ii) becomes available to Purchaser or its Affiliates on a
non-confidential basis from a source other than Parent or its Affiliates or
Representatives or former employees, provided that such source was not bound by
a confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to Parent or its Affiliates (other than as relates
to the Business) with respect to such information.
(c) The obligations of Purchaser, Parent, Seller, Operating Company and
their respective Affiliates under this SECTION 4.24 shall terminate on the five
(5) year anniversary of the Closing Date.
(d) If a party hereto is requested or becomes legally compelled to
disclose any of the Confidential Information, such party shall provide, or cause
the provision of, prompt written notice of such request or legal compulsion to
the other parties hereto so that such other parties hereto may seek a protective
order or other remedy or waive compliance with this SECTION 4.24 of the
Agreement. The party from whom the Confidential Information is being requested
shall reasonably cooperate in obtaining such protective order or other remedy
upon such other party's request and at such other party's expense. If, in the
absence of a protective order or the receipt of a waiver hereunder, the party
from whom the Confidential Information has been requested is nonetheless
compelled to disclose Confidential Information to or at the direction of any
tribunal or other Governmental Authority or else stand liable for contempt or
suffer other censure, penalty or adverse consequences, such compelled party may
disclose such specifically requested Confidential Information to or at the
direction of such tribunal or other Governmental Authority only after first
notifying the other parties hereto.
SECTION 4.25 RELEASE OF LIENS. Prior to or upon the Closing, Seller
shall use commercially reasonable efforts to deliver to Purchaser releases, in
form and substance reasonably satisfactory to Purchaser, effective to release
all Encumbrances (other than (i) subparts (a), (c) and (d) of the Permitted
Encumbrances definition and (ii) the Encumbrances
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listed on SECTION 2.22(a) of the Disclosure Schedule) in favor of any Person on
or relating to AHCGC or Newco, the shares of capital stock of Newco or AHCGC or
any of the Assets, including UCC termination statements and releases of any and
all mortgages or other liens on any Assets.
SECTION 4.26 1995 RESTRUCTURING. Prior to or upon the Closing, Seller
and Parent shall, and Parent shall cause its Affiliates to, (a) enter into all
agreements and make all filings, as to which Parent or its Affiliates are the
only signatories thereto, necessary to complete the proper documentation and the
proper transfer and conveyance of all of the rights, title and interest to the
Assets in accordance with all applicable Law that were to be transferred to
AHCGC by Seller pursuant to the 1995 Transfer Agreement and agreements
associated therewith (the "UNTRANSFERRED ASSETS") and (b) undertake all
commercially reasonable efforts to obtain all Consents relating to the issuance
or proper transfer and assignment, to the extent they constitute Untransferred
Assets, (i) of each Material AHCGC Permit and (ii) of each Material Contract
from Seller to AHCGC. All such filings, agreements and Consents (the "ASSET
DROP-DOWN DOCUMENTS") shall be in form and substance reasonably satisfactory to
Purchaser.
SECTION 4.27 CAPITAL EXPENDITURES IN 2002. Upon preparation thereof,
but no later than November 30, 2001, Parent shall promptly provide a copy of the
Business' capital budget plan for the calendar year 2002 (the "2002 CAPITAL
BUDGET PLAN"), in form similar to the 2001 Capital Budget Plan attached hereto
in SECTION 2.23 of the Disclosure Schedule.
SECTION 4.28 RELEASE OF GUARANTORS. Purchaser agrees to use all
commercially reasonable efforts to release and remove as promptly as practicable
after the Closing Date Parent and its Affiliates (other than Newco or AHCGC) as
guarantors under any Contract which is part of the Assets.
SECTION 4.29 PRE-CLOSING DISCLOSURES.
(a) Between the Execution Date and five (5) Business Days prior to the
Closing Date, Parent may elect to notify (the "PARENT LIABILITIES NOTICE")
Purchaser of the occurrence of any events, circumstances or conditions which
first arise after the Execution Date and prior to the Closing which could cause
any representation or warranty set forth in ARTICLE II hereof to be breached as
of the Closing Date. The Parent Liabilities Notice shall (i) describe such
event, circumstance or condition, (ii) indicate the representations and
warranties that would be reasonably likely to be breached thereby and Parent's
good faith estimate of the amount of the potential Liabilities associated
therewith and (iii) identify, to Seller's Knowledge, all third-parties which are
involved in the potential or actual Liabilities identified by Parent. Parent
agrees to make available to Purchaser all information (whether then or later
available) regarding the actual or potential Liabilities described in the Parent
Liabilities Notice and to use commercially reasonable efforts to provide access
to all personnel of Parent and its Affiliates and third parties involved in the
Liabilities described in the Parent Liabilities Notice.
(b) Purchaser shall provide Parent notice within two (2) Business Days
prior to the Closing Date stating whether Purchaser agrees to limit the
aggregate indemnifiable Damages with respect to the breaches identified in the
Parent Liabilities Notice to Twenty Seven Million Seven Hundred Fifty Thousand
Dollars (USD27,750,000). If Purchaser agrees to so
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limit the indemnifiable Damages, the notice referred to in the first sentence
hereof shall be referred to herein as the "LIMITATION OF INDEMNIFICATION
NOTICE", and Parent shall have no right to terminate this Agreement pursuant
SECTION 9.1(I). However, if Purchaser does not so agree to limit such
indemnifiable Damages, Parent shall have the right to exercise its termination
rights set forth in SECTION 9.1(i) hereof.
(c) No disclosure pursuant to this SECTION 4.29 shall be deemed to
modify or amend the representations or warranties made by Seller or Parent
herein for any purpose under this Agreement, including the satisfaction of the
conditions to Closing under ARTICLE VII or Seller's, Parent's or Purchaser's
indemnification obligations under ARTICLE VIII, except as otherwise contemplated
by SECTION 8.3(g) hereof, or to cure any breach of a representation or warranty
when made or any covenant or agreement.
SECTION 4.30 MATERIAL CONTRACTS PRIOR TO CLOSING. To the extent the
Companies enter into any Material Contract between the Execution Date and the
Closing, which would require the Consent of a third-party to avoid an Adverse
Event as to such Material Contract in connection with the transactions
contemplated by this Agreement (a "PRE-CLOSING MATERIAL CONTRACT"), Parent
agrees to promptly notify Purchaser in writing of such Pre-Closing Material
Contract (the "MATERIAL CONTRACT NOTICE"). Each Material Contract Notice shall
have attached a copy of such Pre-Closing Material Contract. Within five (5)
Business Days of receipt of such Material Contract Notice, Purchaser shall
notify Parent in writing whether Purchaser requests that such Pre-Closing
Material Contract be added to the list of Required Consents, thereby requiring
that obtaining such Consent be a condition to Closing (the "PURCHASER REQUIRED
CONSENT NOTICE"). If Purchaser so requests, Parent shall, within five (5)
Business Days of receipt of such Purchaser Required Consent Notice, notify
Purchaser in writing of its agreement to either: (A) add such Contract to the
list of Required Consents or (B) not have such Consent be added to the list of
Required Consents, in which case Parent shall be deemed to have agreed to
indemnify Purchaser pursuant to Section 8.2(a)(x) hereof as to such Contract.
SECTION 4.31 KITCHEN ESSENTIALS TRADEMARK LICENSE. If Target
Corporation or any of its Affiliates agrees to sublicense to Purchaser or any of
its Affiliates with respect to glass products, the "Kitchen Essentials" or
"Essentials" trademarks or any trademarks derivative thereof to the extent
licensed to Target Corporation, and Target Corporation or any of its Affiliates
notifies Parent or its Affiliates regarding such matter and seeks to obtain
Parent's or its Affiliates consent with respect to such sublicense, Parent
hereby agrees that it will consent, and will cause its applicable Affiliates to
consent, to such sublicense between Target Corporation or any of its Affiliates
and Purchaser or any of its Affiliates.
SECTION 4.32 PURCHASE ORDERS.
For a period of nine (9) months after the Closing Date, (a) Mirro
Company, an Affiliate of Parent, may from time to time issue Purchase Orders to
AHCGC for the products set forth in Exhibit 4.32 at the prices set forth in
Exhibit 4.32, provided that (1) notwithstanding the other terms set forth in
such Purchase Orders, the terms set forth under "Other Terms" in Exhibit 4.32
shall control, and (2) the minimum quantity of products to be supplied under
each Purchase Order shall be as set forth by Mirro Company and reasonably agreed
to by AHCGC in the applicable Purchase Order, and (b) Purchaser shall cause
AHCGC to honor and perform
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AHCGC's obligations under such Purchase Orders in accordance with the terms of
this Section 4.32 and Parent shall cause Mirro Company to honor and perform its
obligations under such Purchase Order in accordance with the term of this
Section 4.32. Following the nine (9) month anniversary of the Closing Date,
either Mirro Company or Purchaser may terminate the agreements contemplated by
this Section 4.32 at any time after thirty (30) days notice to the other party.
SECTION 4.33 FOODSERVICE BUSINESS.
(a) FOODSERVICE ASSETS. Prior to the Closing Date, Newco and AHCGC
shall, in accordance with all applicable Laws, transfer, convey and deliver to
Parent or an Affiliate of Parent (other than Newco, AHCGC or Seller), and Parent
or such Affiliate shall accept and assume, all right, title and interest of
Newco or AHCGC in and to all (i) Intellectual Property used exclusively in the
Foodservice Business, provided that the only registered trademarks, tradenames
and patents to be transferred are listed on EXHIBIT 4.33(a)(i), (ii)
Intellectual Property listed on EXHIBIT 4.33(a)(ii), (iii) the Contracts
relating exclusively to the Foodservice Business, including without limitation,
the Contracts set forth on EXHIBIT 4.33(a)(iii) (the "FOODSERVICE CONTRACTS"),
(iv) the Molds set forth on EXHIBIT 4.33(a)(iv) together with the Intellectual
Property rights therein, exclusive of the Specified Seller Assets and the
Intellectual Property set forth on SECTION 2.16(b) of the Disclosure Schedule
(the "FOODSERVICE MOLDS"), (v) the employees listed on EXHIBIT 4.33(a)(v) (the
"FOODSERVICE EMPLOYEES"), (vi) the Foodservice Inventories and surrounding
packaging, (vii) all private label packaging relating exclusively to the
Foodservice Business, (viii) all accounts receivable relating exclusively to the
Foodservice Business and (ix) all catalogs denoted as foodservice catalogs and
all books, records and other documents (or, to the extent applicable, portions
thereof) relating exclusively to the Foodservice Business, including pricing and
customer lists (with terms of sale), marketing and market research materials,
artwork and photography (all of the assets denoted in clauses (i) through (ix)
above are collectively referred to as the "FOODSERVICE ASSETS"). Notwithstanding
the foregoing, the Foodservice Assets shall not include any of the Section
4.33(b) Assets. "FOODSERVICE IP ASSETS" shall mean the Intellectual Property
denoted in clause (i), (ii) and (iv) above but excluding any Specified Seller
Assets. "SPECIFIED FOODSERVICE ASSETS" shall mean (A) the Foodservice Contracts,
(B) the Foodservice IP Assets and (C) the Foodservice Molds.
(b) SECTION 4.33(b) FOODSERVICE ASSETS. Notwithstanding any other
provision of this Agreement, Newco and AHCGC shall retain, and shall not
transfer to Parent hereunder or otherwise, (i) all manufacturing assets other
than the Foodservice Molds (the assets described in clauses (i) are collectively
referred to herein as the "SECTION 4.33(b) ASSETS") and (ii) the Specified
Seller Assets. Notwithstanding the foregoing, the Section 4.33(b) Assets shall
not include any Specified Foodservice Assets.
(c) ASSUMPTION OF FOODSERVICE LIABILITIES. Prior to the Closing Date,
Newco and AHCGC shall transfer to Parent or an Affiliate of Parent (other than
Newco, AHCGC or Seller) and Parent or such Affiliate shall assume and thereafter
pay, honor and discharge when due, all Liabilities of Newco and AHCGC to the
extent (i) related to the Foodservice Business and (ii) arising on or prior to
the Closing Date or arising out of an event, circumstance or condition existing
prior to the Closing Date, but excluding in each case any Liability expressly
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indemnified by Purchaser pursuant to SECTION 8.2(b) hereof (the "ASSUMED
FOODSERVICE LIABILITIES").
(d) INSTRUMENTS OF ASSIGNMENT AND ASSUMPTION.
(i) ASSIGNMENT OF FOODSERVICE ASSETS. To effect the assignment of
the Foodservice Assets and the assumption of the Assumed Foodservice Liabilities
contemplated by this SECTION 4.33, Parent will, and Parent will cause Newco and
AHCGC to execute and deliver to one another prior to the Closing Date the
following documents, each of which will be reasonably satisfactory in form and
substance to Purchaser:
(A) assignments of all of the Foodservice Contracts, which
shall assign to Parent or an Affiliate of Parent (other than Newco,
AHCGC or Seller) all of AHCGC's or Newco's right, title and interest
therein and thereto;
(B) assignments of patents and trademarks and other
Intellectual Property rights included in the Foodservice Assets in
recordable form to the extent necessary to assign such rights to Parent
or an Affiliate of Parent (other than Newco, AHCGC or Seller);
(C) a xxxx of sale conveying to Parent or an Affiliate of
Parent (other than Newco, AHCGC or Seller) all of the Foodservice
Molds; and
(D) such other instruments and documents as are necessary to
properly transfer and assign the Foodservice Assets to Parent or an
Affiliate of Parent (other than Newco, AHCGC or Seller) in accordance
with the provisions of this SECTION 4.33.
(ii) ASSUMPTION OF ASSUMED FOODSERVICE LIABILITIES. Prior to
Closing Date, Parent shall deliver to AHCGC and Newco an instrument of
assumption evidencing Parent's or a Parent Affiliate's assumption of the Assumed
Foodservice Liabilities, in form and substance reasonably satisfactory to
Purchaser.
(iii) FOODSERVICE ASSET TRANSFER DOCUMENTS. Each of the transfer,
assignment and assumption documents required for the transfer of the Foodservice
Assets and the Assumed Foodservice Liabilities described in this SECTION 4.33(d)
shall be referred to herein as the "FOODSERVICE ASSET TRANSFER DOCUMENTS."
(e) FURTHER ACTIONS. To the extent that time does not permit proper
recordation of such assignments contemplated by this SECTION 4.33, as for
example in the case of certain assignments of Intellectual Property, Newco and
AHCGC shall cause the assignment of beneficial title therein to be effected
prior to the Closing Date and, subsequent to the Closing, will provide all
assistance and cooperation as is necessary to effectuate recordable assignment
of such assets. If for a period of twenty-four (24) months after the Closing
Date, it is discovered by either of the parties hereto that certain assets of
the Foodservices Business were not properly included in the Foodservices Assets
and assigned to Parent or an Affiliate of Parent (other than Newco, AHCGC or
Seller), Newco and AHCGC shall promptly and Purchaser shall cause its
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Affiliates (including AHCGC and Newco) to promptly take all actions necessary to
effect the proper assignment and transfer of all right, title and interest in
all such assets to Parent or an Affiliate of Parent (other than Newco, AHCGC or
Seller), as designated by Parent. If for a period of twenty-four (24) months
after the Closing Date, it is discovered by either of the parties hereto that
(i) any asset of the Business was improperly assigned to Parent or an Affiliate
of Parent (other than Newco, AHCGC or Seller) pursuant to this SECTION 4.33 or
(ii) any Assumed Foodservice Liability was not properly assumed by Parent or an
Affiliate of Parent (other than Newco, AHCGC or Seller) prior to the Closing
Date, Parent or such Affiliate shall, and Parent shall cause its Affiliates to,
take all actions necessary to effect (x) the assignment back to AHCGC or Newco
or one of their Affiliates, as designated by Purchaser, of such assets of the
Business, or (y) the assumption by Parent or one of its Affiliates, as
designated by Parent, of such Assumed Foodservice Liabilities.
SECTION 4.34 NON-SOLICITATION OF FOODSERVICE EMPLOYEES.For a period of
two (2) years from and after the Closing Date, Purchaser and its Affiliates
shall not, and Purchaser shall cause its Affiliates not to, directly or
indirectly solicit or seek to induce any of the Foodservice Employees to leave
their employment or positions with Parent or any Affiliates of Parent operating
in the Foodservice Business, provided, however, that "solicit or seek to induce"
shall not include, and none of Purchaser or any of its Affiliates shall be
prohibited from (A) advertising employment opportunities in any national
newspaper, trade journal or other publication in a major metropolitan area, e.g.
Columbus, Ohio or Pittsburgh, Pennsylvania, or any third party Internet website
posting, or negotiating with, offering employment to or employing such persons
contacted through such medium, (B) participating in any third party hiring fair
or similar event open to the public or negotiating with, offering employment to
or employing such persons contacted through such medium or (C) soliciting,
negotiating with, offering employment to or employing a former Foodservice
Employee at any time (x) following the six-month anniversary of the termination
by such Foodservice Employee of his or her employment with Parent or any
Affiliate of Parent or (y) at any time after the termination by Parent or any
Affiliate of Parent of such employee's employment with Parent or any Affiliate
of Parent. Purchaser shall be responsible for any violation of this covenant by
any of its Affiliates or employees.
SECTION 4.35 REPAIR OF MONACA FURNACE. Parent agrees to fully repair
and cause its Affiliates to fully repair, the partially collapsed regenerator of
the glass melting furnace at the facility in Monaca, Pennsylvania prior to the
Closing Date, such that it is in satisfactory operating condition and repair
(subject to normal wear and tear) and is adequate for the purposes for which it
is presently used and presently proposed to be used. Notwithstanding anything to
the contrary in this Agreement, all costs and expenses, including, without
limitation, all consultant cost, materials and labor costs and engineering fees
and expenses, associated, or incurred in connection, with the repairing of the
partially collapsed regenerator of the glass melting furnace at the facility in
Monaca, Pennsylvania (the "MONACA FURNACE EXPENSES"), are not and shall not be
Liabilities of the New Group or Purchaser and have been or will be fully paid by
Seller or Parent. Parent shall have the right to retain all payments received by
it under insurance policies covering such repairs to the partially collapsed
regenerator of the glass melting furnace at the facility in Monaca, Pennsylvania
and if such insurance proceeds are received by the New Group or Purchaser, such
insurance proceeds shall be promptly paid over to
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Parent; provided, Parent and Seller have fully complied with their payment
obligations regarding the Monaca Furnace Expenses hereunder. If Parent and
Seller have not fully complied with their payment obligations hereunder,
Purchaser shall have the right to deduct and retain a portion of the insurance
proceeds which represents such unpaid Monaca Furnace Expenses and promptly pay
over the remaining portion of such insurance proceeds to Parent.
SECTION 4.36 TRANSFER OF SALARIED EMPLOYEES
Prior to the Closing, Newco and AHCGC shall, in accordance with all
applicable Laws, transfer the employment of all Salaried Employees to Parent or
an Affiliate of Parent (other than Newco or AHCGC), and Parent or such Affiliate
shall accept and assume, all duties and obligations of Newco or AHCGC as the
employer of the Salaried Employees. Prior to the Closing, Newco and AHCGC shall
also transfer to Parent or an Affiliate of Parent (other than Newco or AHCGC)
and Parent or such Affiliate shall assume and thereafter pay, honor and
discharge when due, all Liabilities of Newco and AHCGC to the extent related to
Salaried Employees, but excluding any Liability expressly indemnified by
Purchaser pursuant to Section 8.2(b) hereof (the "ASSUMED SALARIED EMPLOYEES
LIABILITIES"). To effect the transfer of the Salaried Employees and the
assumption of the Assumed Salaried Employees Liabilities, Parent will, and will
cause Newco and AHCGC to execute and deliver such instruments and documents, in
form and substance reasonably satisfactory to Purchaser, as are necessary (i) to
properly transfer and assign the Salaried Employees to Parent or any Affiliate
of Parent (other than AHCGC and Newco) and (ii) to properly evidence Parent's or
a Parent's Affiliate's assumption of the Assumed Salaried Employees Liabilities.
SECTION 4.37 FOODSERVICE BUSINESS TRANSITION.
(a) PRE-CLOSING ACTIONS. Notwithstanding Seller's obligation to conduct
the Business in the Ordinary Course of Business pursuant to SECTION 4.1(a),
prior to the Closing, the Companies shall have the right (i) to manufacture
Foodservice Inventories and reasonably designate finished goods inventories as
Foodservice Inventories on the Books and Records of the Companies in such
amounts as Parent reasonably deems necessary for Parent to continue to operate
the Foodservice Business on and after the Closing Date and to take all actions
requisite to such increased production (to the extent reasonably necessary for
such increased production), including increased purchases of raw materials,
increased accounts payable, temporary increases in labor requirements and
decreased manufacturing of finished goods Inventory for the Business, (ii) to
hold such Foodservice Inventories at Facilities, (iii) to ship such Foodservice
Inventories to customers in the Foodservice Channel, to liquidators (to the
extent such products were originally intended to be sold into the Foodservice
Channel) or to such Parent (or third party) facility or facilities (which do not
constitute Facilities) as Parent may determine, in its sole discretion, from
time to time and (iv) to provide such services and share such information
relating to the Foodservice Business as Parent reasonably deems necessary or
advisable to permit Parent and its Affiliates (other than Newco and AHCGC) to
retain and to continue to operate the Foodservice Business on and after the
Closing Date; provided that none of such activities or actions shall result in a
violation of the terms of any of clauses (i) - (xxviii) of SECTION 4.1(a);
PROVIDED, HOWEVER, that, subject to the following proviso, Parent shall, and
shall cause the Companies to, use commercially reasonable efforts to have
available in inventory for the New Group at Closing the minimum finished goods
inventory amounts for each of the products set
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forth on EXHIBIT 4.37(a), which amounts are set forth next to each product
listed on EXHIBIT 4.37(a), PROVIDED, FURTHER, that "commercially reasonable
efforts," as used in the foregoing proviso, shall take into account, among other
things, (1) available production capacity, production schedules, production run
length and customer demand and (2) that, pursuant to SECTION 1.4(d)(v) hereof,
Seller will not be compensated for any Final Closing Net Working Capital
delivered at Closing (which would otherwise include the inventory referenced in
the foregoing proviso) in excess of the Target Net Working Capital.
(b) SHIPMENT OF FOODSERVICE INVENTORIES. To the extent that any
Foodservice Inventories are present in a Facility on the Closing Date, Purchaser
shall, upon notice from Parent, promptly cause such Foodservice Inventories to
be shipped from each such Facility to a Parent (or third party) facility or
facilities as directed by Parent, on such date or dates as Parent and Purchaser
shall agree; PROVIDED, that Purchaser shall request the shipment of all of the
Foodservice Inventory such that the last of such shipments shall occur no later
than sixty (60) days following the Closing Date. All reasonable and normal costs
of loading and shipping such Foodservice Inventories shall be paid by Parent,
and possession and risk of loss shall pass at the time of shipping. Parent shall
not be charged any fee for the storage of Foodservice Inventories at any of the
Facilities for the first fifteen (15) after the Closing Date. Parent shall pay a
monthly (based on a 30 day month) Foodservice Inventories storage fee of 0.5% of
standard cost (pro rated for any partial period based on days) for all
Foodservice Inventories stored at any of the Facilities from the 16th day
through the 60th day after the Closing Date, which amount shall be increased to
1.5% of standard cost (pro rated for any partial period base on days) per month
after such 60th day until all such Foodservice Inventories have been removed
from the Facilities in accordance with the terms of this provision. In each case
the Foodservice Inventories shall be rigged and transported by a nationally
recognized freight carrier reasonably selected by Parent (an "APPROVED
CARRIER"), or transported by such other method as Parent and Purchaser shall
agree. Purchaser agrees to use commercially reasonable efforts to avoid causing
any damage to the Foodservice Inventories (i) while the Foodservice Inventories
are located at the Facilities following the Closing and (ii) in connection with
the shipping of the Foodservice Inventories from the Facilities to Parent's
designated facilities as contemplated hereby; PROVIDED, HOWEVER, that except for
such damage or loss, if any, caused as a direct result of the willful misconduct
or gross negligence of Purchaser or any of its employees or agents, if any item
of Foodservice Inventories shall be lost, stolen, destroyed or irreparably
damaged for any cause whatsoever following the Closing, Parent shall bear the
risk of loss associated therewith and shall hold Purchaser harmless with respect
thereto.
(c) SHIPMENT OF FOODSERVICE MOLDS. To the extent that any Foodservice
Molds are present in a Facility on the Closing Date, Purchaser shall, upon
notice from Parent, promptly cause all such Foodservice Molds to be shipped from
each such Facility to a facility or facilities as directed by Parent, on such
date or dates as Parent and Purchaser shall agree; PROVIDED, that Purchaser
shall request the shipment of all of the Foodservice Molds such that the last of
such shipments shall occur no later than sixty (60) days following the Closing
Date. All reasonable and normal costs of preparing such Foodservice Molds for
shipment and loading and shipping such Foodservice Molds shall be paid by
Parent, and possession and risk of loss shall pass at the time of shipping. The
Foodservice Molds will be shipped in an "as is" condition, consistent with prior
practice of the Companies and Purchaser. The Foodservice Molds shall be
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rigged and transported by an Approved Carrier, or transported by such other
method as Parent and Purchaser shall agree. Purchaser agrees to use commercially
reasonable efforts to avoid causing any damage to the Foodservice Molds (i)
while the Foodservice Molds are located at the Facilities following the Closing
and (ii) in connection with the shipping of the Foodservice Molds from the
Facilities to Parent's designated facilities as contemplated hereby; PROVIDED,
HOWEVER, that except for such damage or loss, if any, caused as a direct result
of the willful misconduct or gross negligence of Purchaser or any of its
employees or agents, if any Foodservice Mold shall be lost, stolen, destroyed or
irreparably damaged for any cause whatsoever following the Closing, Parent shall
bear the risk of loss associated therewith and shall hold Purchaser harmless
with respect thereto.
(d) ASSIGNMENT. Notwithstanding SECTION 11.7, Parent may assign its
rights and obligations under this SECTION 4.37 to any Affiliate of Parent which
is engaged in the Foodservice Business; PROVIDED, that in the event Parent
assigns all or a portion of its rights and obligations under this SECTION 4.37,
Parent hereby unconditionally and irrevocably guarantees to the other parties
hereto the prompt and full discharge by such Affiliate of all of Parent's
obligations under this SECTION 4.37 in accordance with the terms hereof.
ARTICLE V.
EMPLOYEE MATTERS
SECTION 5.1 COMPANY BENEFIT PLANS. Except as otherwise provided in this
ARTICLE V, as of the Closing Date, Parent, Operating Company and the Companies
shall take such action as is necessary such that the Companies shall cease being
"participating employers" and shall cease any co-sponsorship and participation
in each Company Benefit Plan that is jointly adopted, sponsored or maintained by
Parent, Operating Company and the Companies and in which any current, terminated
or retired Employee participates. Except as otherwise provided in SECTIONS 5.2,
5.3, 5.4 and 5.10 after the Closing Date the Companies (other than Seller) shall
have no further Liability and Seller shall retain all Liabilities for claims
under such Plans, whether such claims are made on or after the Closing Date.
SECTION 5.2 DEFINED BENEFIT PLANS.
(a) Parent or the Operating Company, as applicable, shall spin-off and
transfer all pension obligations and liabilities of the Xxxxxx Rubbermaid
Pension Plan for Factory and Distribution Hourly Paid Employees ("PARENT'S
HOURLY PLAN") and the Xxxxxx Rubbermaid Pension Plan for Salaried and Clerical
Employees ("PARENT'S SALARIED PLAN" and collectively with Parent's Hourly Plan
the "PARENT'S HOURLY AND SALARIED PLANS") attributable to Company Employees
(which, for purposes of this Section 5.2, shall include active, terminated and
retired Company Employees) to new pension plans to be established for hourly and
salaried Company Employees (individually the "NEW HOURLY PLAN" and the "NEW
SALARIED PLAN" and collectively the "NEW HOURLY AND SALARIED PLANS"). Each such
spin-off and transfer shall be accomplished as set forth in this SECTION 5.2 and
in accordance with Section 414(l) of the Code.
(b) The New Hourly and Salaried Plans will provide that (i) Company
Employees' accrued benefits under Parent's Hourly and Salaried Plans will be
transferred to and
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credited under the New Hourly and Salaried Plans, as applicable; and (ii) such
Company Employees' periods of service credited under Parent's Hourly or Salaried
Plans will be credited for purposes of determining benefit accrual, vesting and
eligibility under the New Hourly or Salaried Plans, as applicable. The New
Hourly and Salaried Plans shall at Closing provide, with respect to service with
the Companies before Closing, benefits, rights and features that are identical
in all respects to those provided by Parent's Hourly and Salaried Plans to the
Company Employees as of the Closing Date. The Company Employees shall
participate in the New Hourly and Salaried Plans, as applicable, as of the
Closing Date.
(c) The date on which the plan liabilities of Parent's Hourly and
Salaried Plans are calculated shall be called the "TRANSFER DATE" and shall be
effected as soon as practicable following the end of the Transition Period. The
plan liabilities of the Parent's Hourly Plan to be transferred to the New Hourly
Plan (the "HOURLY PENSION LIABILITIES") shall be the actuarial present value of
the accrued plan benefits of Company Employees who are participants in the
Parent's Hourly Plan as of the Transfer Date calculated pursuant to Section
414(l) of the Internal Revenue Code using the following actuarial assumptions:
(i) for determining the present value of benefit liabilities, an interest rate
equal to the rate prescribed by the PBGC for terminating pension plans for the
month in which the Transfer Date occurs, as set forth in ERISA Section 4044 and
PBGC Regulation Section 4044.52 and Appendix B to Part 4044; (ii) the mortality
table, as set forth in Treasury Regulation Section 4044.53 and Appendix A to
Part 4044 (Part 4022 as of March 17, 2000); (iii) the PBGC's expected retirement
ages as set forth in PBGC Regulation Section 4044.55 and Appendix D to Part
4044, Table II-A, II-B or II-C, as applicable based on (A) an unreduced
retirement age equal to the earliest age at which the entire benefit can
commence on an unreduced basis, and (B) an earliest retirement age equal to the
earliest age at which the entire benefit can be commenced; (iv) the loading
assumptions set forth in PBGC Regulation Section 4044.52(e) and Appendix C to
Part 4044; and (v) for purposes of determining eligibility for retirement
subsidies such calculations shall be based upon service as of the Transfer Date
and age as of the applicable expected retirement age as determined pursuant to
clause (iii) above. As soon as practicable following the Transfer Date, pursuant
to SECTION 5.2(g) below, Parent shall cause assets of Parent's Hourly Plans
equal to either (i) the Hourly Pension Liabilities or (ii) the amount required
by Code Section 414(l) if the funded status of Parent's Hourly Plan as of the
Transfer Dates determined using the foregoing actuarial assumption would
prohibit the transfer of assets equal to the Hourly Plan Liabilities (the
"HOURLY PENSION ASSETS") plus interest at the rate of 6% per annum from the
Transfer Date to the date the Hourly Pension Assets are actually conveyed, to be
conveyed in cash to the New Hourly Plan. Until the Hourly Pension Assets are
transferred to the New Hourly Plan, Parent or the Operating Company, as
applicable, will continue to process distributions required to be made to
Company Employees under Parent's Hourly Plan on and after the Closing Date in
accordance with its terms and procedures.
(d) The plan liabilities of the Parent's Salaried Plan to be
transferred to the New Salaried Plan (the "SALARIED PENSION LIABILITIES") shall
be the actuarial present value of the accrued plan benefits of Company Employees
who are participants in the Parent's Salaried Plan as of the Transfer Date
calculated pursuant to Section 414(l) of the Internal Revenue Code using the
following actuarial assumptions: (i) for determining the present value of
benefit liabilities, an interest rate equal to the rate prescribed by the PBGC
for terminating pension plans for the
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month in which the Transfer Date occurs, as set forth in ERISA Section 4044 and
PBGC Regulation Section 4044.52 and Appendix B to Part 4044; (ii) the mortality
table, as set forth in Treasury Regulation Section 4044.53 and Appendix A to
Part 4044 (Part 4022 as of March 17, 2000); (iii) the PBGC's expected retirement
ages as set forth in PBGC Regulation Section 4044.55 and Appendix D to Part
4044, Table II-A, II-B or II-C, as applicable based on (A) an unreduced
retirement age equal to the earliest age at which the entire benefit can
commence on an unreduced basis, and (B) an earliest retirement age equal to the
earliest age at which the entire benefit can be commenced; (iv) the loading
assumptions set forth in PBGC Regulation Section 4044.52(e) and Appendix C to
Part 4044; and (v) for purposes of determining eligibility for retirement
subsidies such calculations shall be based upon service as of the Transfer Date
and age as of the applicable expected retirement age as determined pursuant to
clause (iii) above. As soon as practicable following the Transfer Date, Parent
shall cause assets of Parent's Salaried Plan equal to either (i) the Salaried
Pension Liabilities or (ii) the amount required by Code Section 414(l) if the
funded status of Parent's Salaried Plan as of the Transfer Date determined using
the foregoing actuarial assumption would prohibit the transfer of assets equal
to the Salaried Plan Liabilities (the "SALARIED PENSION ASSETS") plus interest
at the rate of 6% per annum from the Transfer Date to the date the Salaried
Pension Assets are actually conveyed, to be conveyed in cash to the New Salaried
Plan. Until the Salaried Pension Assets are transferred to the New Salaried
Plan, Parent or the Operating Company, as applicable, will continue to process
distributions required to be made to Company Employees under Parent's Salaried
Plan or after the Closing Date, in accordance with its terms and procedures.
(e) If as of the Transfer Date the aggregate amount of Hourly Pension
Assets to be transferred from Parent's Hourly Plan to the New Hourly Plan as
determined under SECTION 5.2(c) hereof do not equal or exceed the amount of the
Hourly Pension Liabilities also to be transferred under SECTION 5.2(c) hereof,
then Seller shall pay Purchaser the difference between the Hourly Pension
Liabilities and the Hourly Pension Assets, plus interest at the rate of 6% per
annum from the Transfer Date to the date the Hourly Pension Assets are actually
conveyed in cash to Purchaser. Such payment shall be made no later than five (5)
Business Days after the amount of the Hourly Pension Assets and the Hourly
Pension Liabilities to be transferred are finally determined under SECTION
5.2(g) hereof.
(f) If as of the Transfer Date the aggregate amount of Salaried Pension
Assets to be transferred from Parent's Salaried Plan to the New Salaried Plan as
determined under SECTION 5.2(d) hereof do not equal or exceed the amount of the
Salaried Pension Liabilities also to be transferred under SECTION 5.2(d) hereof,
then Seller shall pay Purchaser the difference between the Salaried Pension
Liabilities and the Salaried Pension Assets, plus interest at the rate of 6% per
annum from the Transfer Date to the date the Salaried Pension Assets are
actually conveyed in cash to Purchaser. Such payment shall be made no later than
five (5) Business Days after the amount of the Salaried Pension Assets and the
Hourly Pension Liabilities to be transferred are finally determined under
SECTION 5.2(g) hereof.
(g) Parent's actuary shall deliver a report to Parent setting forth the
determination of the values of each the Hourly Pension Liabilities and the
Salaried Pension Liabilities using the assumptions set forth in SECTIONS 5.2(c)
and (d), and Parent shall provide a copy to Purchaser. Purchaser shall have
fourteen (14) days to notify Parent in writing of any objections regarding the
determination of the Hourly Pension Liabilities and Salaried Pension
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Liabilities. If Purchaser timely notifies Parent of any objections that Parent
and Purchaser cannot resolve within thirty (30) days thereafter, Parent and
Purchaser shall appoint an actuarial firm satisfactory to both parties (the cost
of which shall be paid evenly by both parties) to resolve such objections, which
resolution shall be final and binding on both parties. In the event that
Purchaser shall object to the determination of the Hourly Pension Liabilities
and/or Salaried Pension Liabilities and such objections have not been resolved
by the Transfer Date, then Parent may in its discretion transfer to, and
Purchaser shall accept in, the New Hourly and Salaried Plans assets in the form
of cash from Parent's Hourly and Salaried Plans as specified in SECTION 5.2(c)
and 5.2(d) based on the determination of the Hourly Pension Liabilities and the
Salaried Pension Liabilities made by Parent's actuary. If Purchaser's objections
regarding the determination of the Hourly Pension Liabilities and/or Salaried
Pension Liabilities are later resolved in favor of Purchaser and the amount of
the Hourly Pension Liabilities and/or Salaried Pension Liabilities are
increased, then Parent shall cause assets of Parent's Hourly Plan and/or
Parent's Salaried Plan in the form of cash which reflect such adjustment in the
Hourly Pension Liabilities and/or Salaried Pension Liabilities as of the
Transfer Date, to be transferred in accordance with SECTIONS 5.2(c) and (d) to
the New Hourly Plan and/or New Salaried Plan, plus interest from the Transfer
Date to the date such additional assets are actually conveyed in cash at the
rate of 6% per annum on such additional assets.
(h) The benefits to be provided to salaried and non-union hourly
Company Employees under the New Hourly and Salaried Plans for a period of
12-months after the Closing shall not be less than either (i) those provided to
such Company Employees under Parent's Hourly and Salaried Plans, as applicable,
immediately prior to the Closing Date or (ii) those provided under Purchaser's
defined benefit pension plans from time to time during such 12-month period to
similarly situated employees of Purchaser; PROVIDED, HOWEVER, that nothing
herein shall prohibit Purchaser from amending its defined benefit pension plan
or the New Hourly and Salaried Plans at any time following the Closing.
SECTION 5.3 DEFINED CONTRIBUTION PLANS. As soon as practicable
following the end of the Transition Period, Parent or Operating Company, as
applicable, shall spin-off and transfer the account balances of each Company
Employee who is a participant in the Xxxxxx Rubbermaid 401(k) Savings Plan (the
"PARENT'S 401(k) PLAN") to a 401(k) Plan established or maintained by Purchaser
(the "NEW 401(k) PLAN") in a trustee to trustee transfer in accordance with
Section 414(l) of the Code. The transfer of the account balance liability and
related assets shall include a trustee-to-trustee transfer of all participant
loan accounts and liabilities under Parent's 401(k) Plan. The level of
contributions to be provided to salaried and non-union Company Employees under
the New 401(k) Plan shall not be less than those provided to similarly situated
employees of Purchaser. Nothing contained in this Agreement shall be deemed to
obligate Purchaser to continue any level of contribution for union Company
Employees. The New 401(k) Plan will provide that Company Employees' periods of
service credited under Parent's 401(k) Plan will be credited for purposes of
determining participation, vesting and eligibility for any other benefit right
or feature of the New 401(k) Plan which is available based upon service.
SECTION 5.4 RETIREE HEALTH. On and after the Closing Date, Purchaser
shall establish for Company Employees a retiree health and life insurance plan
and Purchaser shall assume all Liabilities with respect to the Employees under
the Xxxxxx Medical Plan for Retirees
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("PARENT'S RETIREE PLAN"). Purchaser shall not assume any Liabilities with
respect to any retiree health and life insurance benefits of any Salaried
Employees or any Transition Employees who do not become Company Employees
pursuant to Section 5.10 and any such benefits shall continue to be provided
under Parent's Retiree Plan.
SECTION 5.5 WELFARE PLANS.
(a) Parent shall retain all liability for claims incurred under the
Company Benefit Plans that are welfare benefit plans within the meaning of
Section 3(1) of ERISA and all severance plans or arrangements, whether or not
such plans or arrangements are "welfare benefit plans" within the meaning of
Section 3(1) of ERISA (the "PARENT'S WELFARE PLANS") on and prior to the Closing
Date. For this purpose claims under any medical, dental, vision, or prescription
drug plan, generally will be deemed to be incurred on the date that the service
giving rise to such claim is performed and not when such claim is made;
PROVIDED, HOWEVER, that with respect to claims relating to hospitalization the
claim will be deemed to be incurred on the first day of such hospitalization and
not on the date that such services are performed. Claims for disability under
any long or short term disability plan shall be incurred on the date the
Employee or former Employee is first absent from work because of the condition
giving rise to such disability and not when the Employee or former Employee is
determined to be eligible for benefits under the applicable Parent's Welfare
Plan. Seller shall provide under Parent's Welfare Plans any continuation
coverage required under Section 4980B of the Code, Part 6 of Title I of ERISA or
applicable state law ("COBRA") to each "qualified beneficiary" as that term is
defined in COBRA whose first "qualifying event" (as defined in COBRA) occurs on
or prior to the Closing Date.
(b) Notwithstanding the foregoing, as soon as practicable after the
Closing Date, Parent or the Operating Company, as applicable, shall spin-off and
transfer all of the accounts of its Section 125 flexible spending plan
attributable to Company Employees and their dependents and beneficiaries to a
new Section 125 flexible spending plan established by the Purchaser. Neither the
Operating Company nor Seller shall have any liability with respect to the
Purchaser's Section 125 flexible spending plan after the Closing Date, including
liability for any Claims incurred prior to the Closing Date.
SECTION 5.6 COMPENSATION AND BONUS PLANS. For twelve (12) months
following the Closing Date, Purchaser shall not reduce the base salary or base
hourly wage rate of any Company Employee below the rate in effect immediately
prior to the Closing Date. As soon as practicable after the Closing Date, Parent
shall pay all bonuses and incentive compensation, if any, earned by the
Employees under the Company Benefit Plans which are bonus and or incentive
compensation plans. For purposes of determining the amount of any such bonus or
whether any performance targets or goals entitling Employees to any such bonuses
Parent shall treat the Closing Date as the last day of the applicable period for
determining bonuses and shall, if applicable, annualize any financial or other
performance results. If an Company Employee participates in a bonus plan of
Parent, Seller, the Operating Company or a Company as of the Closing Date, then
Purchaser shall make a bonus plan at the same potential bonus levels available
to such Company Employee for the remainder of the calendar year in which the
Closing Date occurs; PROVIDED, HOWEVER, that Purchaser in its sole discretion
may establish the criteria for receiving any such bonuses.
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SECTION 5.7 PURCHASER'S PLANS. Effective as of the Closing Date,
Purchaser shall provide welfare benefits to Company Employees under welfare
benefit plans maintained by Purchaser (the "PURCHASER'S WELFARE PLANS").
Purchaser's Welfare Plans shall provide Company Employees with either (a)
welfare benefits substantially similar to those provided under Parent's Welfare
Plans immediately prior to the Closing or (b) welfare benefits that are
substantially similar to those provided to Purchaser's similarly situated
employees. Purchaser will credit the Company Employees for their service with
Parent, its Affiliates, the Companies (and any predecessors) for purposes of
eligibility, benefit accruals, waiting periods or other qualification or
eligibility for any benefit or privilege, under Purchaser's Welfare Plans in
which Company Employees are allowed to participate after the Closing, and any
applicable vacation or severance policies or programs, but not to the extent
such credit would result in a duplication of benefits. The Company Employees
will be allowed by Purchaser to participate in Purchaser's Plans without being
subject to any waiting periods or any restrictions or limitations for
pre-existing conditions, except to the extent any such Company Employee has not
satisfied any corresponding applicable waiting period, or limitation under the
Company Benefit Plans. Purchaser's Welfare Plans shall credit each Company
Employee (including any spouses and dependents) with the amount, if any, paid
during the calendar year in which the Closing Date occurs or, if applicable, the
end of the Transition Period, under the Company Benefit Plans towards
deductibles, co-pays and out-of-pocket maximums.
SECTION 5.8 SEVERANCE. Except as provided in SECTION 5.10, if during
the nine (9) month period following the Closing Date, any Company Employee would
be eligible for severance under Purchaser's severance plan set forth on SECTION
5.8-1 hereof of the Disclosure Schedule (or would be eligible for such severance
but for the fact that such Company Employee is a non-union hourly employee)
Purchaser shall provide such Company Employee severance benefits equal to the
severance benefits set forth on SECTION 5.8-2 of the Disclosure Schedule.
SECTION 5.9 COOPERATION. Seller and Parent shall cooperate with
Purchaser in providing such employee records, data and information necessary in
order for Purchaser to perform its obligations and responsibilities under the
Purchaser's Plans as required by this ARTICLE V.
SECTION 5.10 SALARIED AND TRANSITION EMPLOYEES
(a) Upon receipt of all governmental approvals necessary to permit the
consummation of the transactions contemplated by this Agreement, Parent will
promptly provide to Purchaser a list of the Salaried Employees (together with
related organizational charts available at the time), which list shall set forth
name and job title of each Salaried Employee. Within two (2) Business Days after
receipt of such list of Salaried Employees by Purchaser, Purchaser shall
designate in writing to Parent those Salaried Employees who will be Transition
Employees, provided, the list of Transition Employees previously provided to
Parent by Purchaser shall be deemed the designation of such Transition Employees
if Purchaser does not provide a revised list of Transition Employees prior to
the end of such two (2) Business Day period. Neither Parent nor any Affiliate
thereof shall terminate the employment of a Salaried Employee (except for
performance related reasons or with the consent of Purchaser) prior to the
expiration of the period beginning on the Closing Date and ending on the 90th
day following the Closing Date (the "TRANSITION PERIOD"). Neither Parent nor any
Affiliate thereof shall increase
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the base salary of any Salaried Employee during the Transition Period. Parent
shall be responsible for all salary and employee benefits (upon the same terms
and at the same level of benefits provided to similarly situated employees of
Parent or its Affiliates, as applicable) for Salaried Employees during the
Transition Period while employed by Parent or any Affiliate thereof, except as
otherwise provided in this SECTION 5.10. During the Transition Period, Parent
shall provide the services of the Salaried Employees to Purchaser as provided in
the Transition Services Agreement.
(b) At any time during the Transition Period, Purchaser or any
Affiliate thereof may offer employment to a Salaried Employee (other than
Foodservice Employees) upon the terms and conditions that such Salaried Employee
would have enjoyed if such Salaried Employee were a Company Employee on the
Closing Date. Upon expiration of the Transition Period, Purchaser shall offer
employment to each Salaried Employee who is not a Transition Employee upon the
same terms and conditions that such Salaried Employee would have enjoyed if such
Salaried Employee were a Company Employee on the Closing Date. Upon expiration
of the Transition Period, Purchaser may, but is not obligated to hire any
Transition Employee. At any time during the Transition Period, Purchaser may
indicate to Parent that it does not desire to continue using the services of any
Transition Employee. In such case Parent or any Affiliate of Parent may continue
to employ such Transition Employee (for any period of time including after the
Transition Period) or terminate such Transition Employee's employment and pay
such Transition Employee severance benefits in accordance with SECTION 5.10(c).
Purchaser shall be responsible for the salary and employee benefits for each
Salaried Employee for all periods commencing on and after the date the Purchaser
hires any such Salaried Employee. If Purchaser or any Affiliate thereof employs
a Transition Employee at anytime prior to the twenty-four (24) months following
the Closing Date, and upon employment of each other Salaried Employee (other
than a Transition Employee), then Purchaser and all Affiliates thereof shall
treat such Salaried Employee (including the Transition Employees) as Company
Employees for purposes of the provisions of this ARTICLE V.
(c) If a Transition Employee is either (i) not employed by Purchaser
or an Affiliate thereof during or at the end of the Transition Period and is
terminated by Parent and all Affiliates thereof in connection with Purchaser's
not offering employment to such Transition Employee, or (ii) employed by
Purchaser or an Affiliate thereof during or at the end of the Transition Period
and such Transition Employee's employment is terminated at any time prior to ten
(10) months following the expiration of the Transition Period, then Parent shall
be responsible for and shall provide the severance benefits described in this
SECTION 5.10(c) below (except that such severance benefits shall not be paid to
any Transition Employee terminated for cause), up to an aggregate amount of
$1,000,000 for all such Transition Employees who become entitled to such
severance benefits. Purchaser shall be responsible for any severance benefits
payable to Transition Employees under the provisions of this SECTION 5.10(c) in
excess of $1,000,000. Purchaser shall reimburse Parent for any severance paid by
Parent with respect to any Transition Employee hired by Purchaser or an
Affiliate thereof within twenty-four (24) months following the Closing Date. The
severance benefits to be provided to Transition Employees under this SECTION
5.10(c) shall be the severance benefits set forth on SECTION 5.8-2 of the
Disclosure Schedule. In addition, Transition Employees who are employed in a
non-executive capacity shall be entitled as severance benefits to outplacement
services for a period of
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three (3) months. The cost of the severance benefits provided pursuant to this
SECTION 5.10(c) shall include the amount of the cash severance payments and the
cost of continued benefits based on (i) the average per-employee cost of
providing medical and dental benefits for the purposes of determining COBRA
premiums under the health plan maintained for the benefit of its employees by
Operating Company, (ii) the actual costs incurred by Parent under the car
allowance program, and (iii) the actual costs of outplacement.
SECTION 5.11 NO THIRD PARTY BENEFICIARIES. The parties hereto
acknowledge and agree that all provisions contained in this Agreement with
respect to employee benefits or employee compensation are included for the sole
benefit of the respective parties hereto and shall not create any right in any
other Person, including any Employees, former Employees, any participant in any
Company Benefit Plan or any beneficiary thereof. Nothing contained herein shall
interfere with Purchaser's right to amend or terminate the Companies Hourly and
Salaried Plans or any Purchaser Plan after the Closing.
ARTICLE VI
TAX MATTERS
SECTION 6.1 SECTION 338(h)(10) ELECTION.
(a) With respect to the Share Purchase and the deemed sale for Tax
purposes of the shares of AHCGC, subject to SECTIONS 6.1(b)-(d), Parent (and, to
the extent necessary, its Affiliates) will join with Purchaser (and, to the
extent necessary, its Affiliates) to make irrevocable elections under Section
338(h)(10) of the Code and, if permissible, similar elections under any
applicable state or local Tax laws (collectively, the "ELECTIONS"). Purchaser
and Parent (and their Affiliates) shall report the transaction consistently with
the Elections and agree not to take any action that could cause such Elections
to be invalid, and shall take no position contrary thereto unless required to do
so pursuant to a determination (as defined in Section 1313(a) of the Code or any
similar state or local Tax provision).
(b) Within six months after the Closing Date, Purchaser (and, to the
extent necessary, its Affiliates) shall prepare any and all forms necessary to
effectuate the Elections (including Internal Revenue Service Form 8023 and any
similar forms under applicable state and local tax laws (collectively, the
"SECTION 338 FORMS")) and shall provide copies thereof to Parent. Purchaser and
Parent (and, to the extent necessary, their Affiliates) shall each cause the
Section 338 Forms to be duly executed by an authorized person and Purchaser
shall duly and timely file the Section 338 Forms in accordance with applicable
Tax laws and the terms of this Agreement. Parent (and, to the extent necessary,
its Affiliates) (i) shall include a copy of Form 8023 with its income and
franchise Tax Returns for any tax period that includes the Closing Date, (ii)
shall, as specifically and reasonably instructed by the Purchaser, take all
actions necessary and appropriate (including filing such additional forms, Tax
Returns, elections, schedules and other documents as may be required by
applicable Law, and as timely prepared by Purchaser and delivered to Parent in a
timely fashion) to effect and preserve the Elections in accordance with the
provisions of Regulation Section 1.338(h)(10)-1 (and comparable provisions of
each applicable state and local Tax law) or any successor provisions
(collectively, the "SECTION 338 ACTS"), and (iii) if notified by any Taxing
Authority that any Section 338 Acts are necessary for an Election to be valid or
if otherwise aware of any Section 338 Acts that are
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necessary for an Election to be valid, shall in good faith attempt to complete
the Section 338 Acts.
(c) In no event later than five (5) months after the Closing Date,
Purchaser shall prepare an initial allocation of the aggregate deemed sales
price of the assets of Newco and AHCGC resulting from the Elections (as required
pursuant to Section 338(h)(10) of the Code and the Regulations promulgated
thereunder) among such assets in accordance with the parameters set forth in
SECTION 6.1(d) and among the assets in each Class (as provided in Regulation
Section 1.338-6(b) or any successor provision) in accordance with an appraisal
(the "APPRAISAL") prepared by a qualified M.A.I. or other Person with
professional competence in conducting appraisals of this nature (the "SECTION
338 ALLOCATION"), and Purchaser shall submit to Parent copies of the Section 338
Allocation and the Appraisal. The cost of the Appraisal shall be borne by
Purchaser. Purchaser and Parent (and their Affiliates) shall file all Tax
Returns consistently with the Section 338 Allocation, and shall not voluntarily
take any action inconsistent therewith upon examination of any Tax Returns, in
any refund claim, in any litigation, or otherwise with respect to such Tax
Returns unless required to pursuant to a determination (as defined in Section
1313(a) of the Code or any similar state or local Tax provision).
(d) Purchaser and Parent agree that (i) thirty percent (30%) to
thirty-five percent (35%) of the aggregate deemed sales price (as described in
SECTION 6.1(c)) shall be allocated to the Newco assets (other than the stock of
AHCGC) and sixty-five percent (65%) to seventy percent (70%) shall be allocated
to the AHCGC assets and (ii) no less than forty-five percent (45%) or more than
sixty-five percent (65%) of the aggregate deemed sales price allocated to the
assets of each of Newco and AHCGC will be allocated to accounts receivable,
Inventory, property, plant and equipment, prepaid and other non-intangible
assets.
SECTION 6.2 PREPARATION OF TAX RETURNS AND FILINGS.
(a) Subject to SECTION 6.5, for any Taxable Period of the Companies
that ends on or before the Closing Date, Parent shall timely prepare, consistent
with past practices and custom (unless a contrary position is required by Law)
and file with the appropriate Taxing Authority all required consolidated,
combined or unitary Tax Returns that include any of the Companies and shall pay
all Taxes shown due on such Tax Returns.
(b) Subject to SECTION 6.5, for any Taxable Period of the Companies
that ends on or before the Closing Date, Parent shall timely prepare, consistent
with past practices and custom (unless a contrary position is required by Law)
and file with the appropriate Taxing Authority all other Tax Returns of the
Companies and shall pay all Taxes shown due on such Tax Returns. Parent shall
provide Purchaser the opportunity to review and comment upon such Tax Returns,
and if the filing of such Tax Returns may cause a material increase in the Tax
Liability of any of Newco or AHCGC for a Post-Closing Tax Period, Parent shall
not file any such Tax Returns without Purchaser's consent (which consent shall
not be unreasonably withheld and shall be deemed to be provided if such Tax
Return is prepared consistently with past practices and custom of the Companies
or the requirements of applicable Law).
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(c) Purchaser shall provide Parent the opportunity to review and
comment upon, and Purchaser shall timely prepare and file with the appropriate
Taxing Authority, all Newco and AHCGC Tax Returns relating to a Straddle Period
required to be filed and shall pay all Taxes due with respect to such Tax
Returns; PROVIDED, HOWEVER, that Purchaser will prepare such Tax Returns
consistent with past practices and custom of the Companies (unless a contrary
position is required by Law) to the extent such Tax Returns relate to the Taxes
of Newco or AHCGC for a Pre-Closing Tax Period and Purchaser shall not file any
such Tax Return without Parent's consent (which consent shall not be
unreasonably withheld). Seller or Parent shall pay Purchaser (in accordance with
the procedures set forth in SECTION 8.4) for any amount owed by Seller or Parent
pursuant to SECTION 8.4 with respect to any such Tax Returns.
(d) Purchaser and Parent agree to cause Newco or AHCGC to file all Tax
Returns for the period including the Closing Date on the basis that the relevant
Taxable Period ended as of the close of business on the Closing Date (which
shall be deemed the time of Closing as provided in SECTION 1.5 and which shall
include the tax consequences of the Share Purchase, the Elections and the
results of any inter-company transactions with Parent or its Affiliates) if the
relevant Tax Law allows such a filing and all Newco or AHCGC Tax Returns that
are filed for a Tax Period that begins the day immediately after the Closing
Date (including any group Tax Returns that include Newco or AHCGC beginning on
the day immediately after the Closing Date) shall include all activities of
Newco or AHCGC occurring after the deemed time of Closing provided in SECTION
1.5 other than the tax consequences of the Share Purchase, the Elections and the
results of any inter-company transactions with Parent or its Affiliates.
SECTION 6.3 FILING OF AMENDED TAX RETURNS. Parent shall be responsible
for filing any Tax Returns that include Newco or AHCGC for taxable years ending
on or prior to the Closing Date that are required as a result of examination
adjustments made by any Taxing Authority for such taxable years as finally
determined and shall pay any Taxes that are due thereon. Parent shall not be
entitled to file (nor shall Purchaser or its Affiliates be under any obligation
to file) any other amended Tax Return for any of the Companies for a Pre-Closing
Tax Period unless the requirements in the last sentence of SECTION 6.2(B) are
satisfied.
SECTION 6.4 TAX REFUNDS. The amount of any refunds or offsets of Taxes
of the Companies for any Taxable Period ending on or before the Closing Date
shall be for the account of Seller, except to the extent that such refund or
offset arises as a result of a Newco or AHCGC carryback of a loss or other tax
benefit arising from a period beginning after the Closing Date (except as
otherwise provided in SECTION 6.5). The amount of any refunds or offsets of
Taxes of Newco or AHCGC for any Taxable Period beginning after the Closing Date
shall be for the account of Purchaser. The amount of benefit of any refunds or
offsets of Taxes of Newco or AHCGC for any Straddle Period shall be equitably
apportioned in a manner consistent with SECTION 8.4(c). Provided that the
non-requesting party, acting in good faith, determines that there is a
reasonable basis for filing a claim for refund with the relevant Taxing
Authority and if the filing of such a claim is not inconsistent with any other
provision of this Agreement, each party shall, if the other party so requests
and at such other party's expense, cause Newco or AHCGC to file for and obtain
any refunds or offsets to Taxes to which the requesting party is expressly
entitled under this ARTICLE VI. Each party shall forward, and shall cause its
Affiliates to forward the amount of such refund or offset to Tax, to the party
entitled pursuant to this ARTICLE VI to receive such amount, within ten (10)
days after such refund is received or after such offset is
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allowed or applied against other Tax Liability, as the case may be.
Notwithstanding the foregoing, the control of the prosecution of a claim for
refund of Taxes paid pursuant to a deficiency assessed subsequent to the Closing
Date as a result of an audit shall be governed by the provisions of SECTION
8.4(e).
SECTION 6.5 CARRYBACKS. Purchaser shall not, and shall cause Newco and
AHCGC not to, carryback any net operating loss or other Tax attribute to a
Pre-Closing Tax Period if Newco or AHCGC (as the case may be) were included as
part of a combined, consolidated, or unitary Tax Return in such Tax Period to
which such carryback relates; PROVIDED, HOWEVER, that any such carryback will be
permitted if such carryback is required by the relevant Tax Law prior to a
carryforward (and a waiver of the carryback is not permitted), the carryback
involves a material net operating loss or other Tax attribute and Parent
consents to such carryback (which consent shall not be unreasonably withheld).
If Parent or an Affiliate realizes a reduction in Tax for such a period as a
result of such carryback (either in the form of a refund or an offset), Parent
shall pay to Purchaser the amount of such reduction within ten (10) days after
the receipt of the refund or the offset; PROVIDED, HOWEVER, that Parent shall be
entitled to retain any such reduction in Tax to the extent that Purchaser or its
Affiliates obtain as a result of such carryback a greater Tax credit
carryforward that may be utilized in a Post-Closing Tax Period. Parent shall, at
the request of Purchaser, cooperate in connection with the filing of any
necessary Tax Returns and other documents to effect a carryback at Purchaser's
expense, and Parent shall provide a basis for the computation of the amount paid
to Purchaser pursuant to this SECTION 6.5 in reasonable detail.
SECTION 6.6 COOPERATION IN TAX MATTERS. Parent, the Companies and
Purchaser shall reasonably cooperate, and shall cause their respective
Affiliates and Representatives to reasonably cooperate, in preparing and filing
all Tax Returns, including maintaining and making available to each other all
records necessary in connection with Taxes and in resolving all disputes and
audits with respect to all Taxable Periods relating to Taxes. Parent and
Purchaser agree (a) to retain all Books and Records with respect to Tax matters
pertinent to any Company or Canadian Seller relating to any Tax Period beginning
before the Closing Date until ninety (90) days after the expiration of the
applicable statute of limitations and to abide by all record retention
agreements entered into with any Taxing Authority, (b) to allow the other party
and its Representatives, at times and dates mutually acceptable to the parties,
to inspect, review and make copies of such records as such party may deem
necessary or appropriate from time to time, such activities to be conducted
during normal business hours and at such party's expense, and (c) to give the
other party reasonable written notice prior to transferring, destroying or
discarding any such Books and Records and, if the other party so requests,
Parent and Purchaser, as the case may be, shall allow the other party to take
possession of such Books and Records.
SECTION 6.7 TRANSFER TAXES. All transfer, documentary, sales, use,
stamp, registration and other similar Taxes (including all applicable real
estate transfer or real estate gains Taxes) and related recording and other fees
(collectively, "TRANSFER TAXES") incurred in connection with this Agreement and
the transactions contemplated by this Agreement shall be borne by Parent except
that any such Transfer Taxes resulting from the Share Purchase (including any
Transfer Taxes resulting from the Elections but excluding all other Taxes
resulting from the Elections, such as income and franchise Taxes) shall be borne
equally by
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Parent and Purchaser, and Parent and Purchaser shall cooperate in preparing and
filing all Tax Returns and other documentation on a timely basis as may be
required to comply with the provisions of such Tax laws.
SECTION 6.8 TREATMENT OF INDEMNIFICATION PAYMENTS. Parent, Seller and
Purchaser agree to treat any amounts payable pursuant to ARTICLE VIII as an
adjustment to the Purchase Price for federal income tax purposes, unless a final
determination causes any such payment not to be treated as an adjustment to the
Purchase Price for federal income tax purposes.
ARTICLE VII.
CONDITIONS TO CLOSING
SECTION 7.1 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of
Seller and Parent to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction (or waiver by Seller and Parent), at or
prior to the Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Purchaser contained in this Agreement and of Purchaser and Canadian Purchaser
contained in the Canadian Purchase Agreement that are qualified as to
materiality shall be true and correct as of the Execution Date and as of the
Closing Date, as if made as of the Closing Date (except for representations and
warranties which by their terms speak as of a specific date or time, which need
only be true and correct as of such date), and the representations and
warranties of Purchaser contained in this Agreement and of Purchaser and
Canadian Purchaser contained in the Canadian Purchase Agreement that are not so
qualified shall be true and correct in all material respects as of the Execution
Date and as of the Closing Date, as if made as of the Closing Date (other than
such representations and warranties as are made as of another date, which shall
be true and correct as of such date).
(b) AGREEMENTS AND COVENANTS. Purchaser and Canadian Purchaser shall
have performed and complied in all material respects with all agreements and
covenants required to be performed and complied with by Purchaser under this
Agreement and by Purchaser and Canadian Purchaser under the Canadian Purchase
Agreement at or prior to the Closing.
(c) NO ORDER. No order, statute, rule, regulation, executive order,
injunction, stay, decree, directive, or restraining order shall have been
enacted, entered, promulgated or enforced by any court of competent jurisdiction
or Governmental Authority that would (i) prevent the consummation of any of the
transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, nor shall any such injunction, judgement, order, decree, ruling or
charge be in effect.
(d) GOVERNMENTAL APPROVALS. All Consents from, registrations and
filings with and notices to Governmental Authorities necessary to permit the
consummation of the transactions contemplated by this Agreement shall have been
obtained, unless the failure to obtain any such consent, approval or waiver or
make such registration or filing or give such notice could not reasonably be
expected to have a material adverse effect on (i) Parent or (ii) the
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receipt or retention by Seller or Parent of the net proceeds of the transactions
contemplated by this Agreement.
(e) ANTITRUST APPROVALS. Any waiting period (and any extension thereof)
under the HSR Act applicable to the purchase of the Shares contemplated hereby
shall have expired or shall have been terminated.
(f) LEGAL OPINION. Parent shall have received from Xxxxxx & Xxxxxxx an
opinion of counsel addressed to Parent and dated as of the Closing Date in the
form set forth on EXHIBIT 7.1(f).
(g) CLOSING DELIVERIES. Each of the Closing deliveries set forth in
SECTION 1.7 hereof shall have been delivered.
SECTION 7.2 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction (or waiver by Purchaser in writing), at or prior to
the Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Seller and Parent contained in this Agreement and of Parent and Canadian
Seller contained in the Canadian Purchase Agreement that are qualified as to
materiality or Material Adverse Effect shall be true and correct as of the
Execution Date and as of the Closing Date, as if made on the Closing Date
(except for representations and warranties which by their terms speak as of a
specific date or time, which need only be true and correct as of such date), and
the representations and warranties of Seller and Parent contained in this
Agreement and of Parent and Canadian Seller contained in the Canadian Purchase
Agreement that are not so qualified shall be true and correct in all material
respects as of the Execution Date and as of the Closing Date, as if made as of
the Closing Date (other than such representations and warranties as are made as
of another date which shall be true and correct as of such date), PROVIDED, to
the extent that the representations and warranties set forth in Section
2.22(b)(i) or (iii) have been breached in any respect prior to Closing, such
breach or breaches shall not prevent this condition from being satisfied so long
as this condition shall have been satisfied with respect to each representation
and warranty concerning each asset requisite to the New Group's manufacture and
distribution of glass products in the Ordinary Course of Business following the
Closing.
(b) AGREEMENTS AND COVENANTS. Seller and Parent and their respective
Affiliates shall have performed and complied in all material respects with all
agreements and covenants required to be performed and complied with by Seller,
Parent or their respective Affiliates under this Agreement and the Canadian
Purchase Agreement at or prior to the Closing; PROVIDED, to the extent Seller,
Parent or their respective Affiliates have breached any of their respective
obligations under SECTION 4.16 with respect to the transfer of the Outside
Assets or the Seller Assets or under Section 4.33 with respect to the
Foodservice Assets, such breach or breaches shall not prevent this condition
from being satisfied, provided this condition has been satisfied with respect to
each asset requisite to the New Group's manufacture and distribution of glass
products in the Ordinary Course of Business following the Closing.
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(c) THIRD-PARTY CONSENTS; PERMITS. All Consents (i) from, with and to
Governmental Authorities necessary to permit the consummation of the
transactions contemplated by this Agreement and (ii) necessary to avoid an
Adverse Event as to a Contract or Permit listed on SCHEDULE 7.2(c)(ii) (each, a
"REQUIRED CONSENT" and collectively, the "REQUIRED CONSENTS"), in each case as a
result of the transactions contemplated by this Agreement shall have been
obtained, without, in any case, any material increase in any payments thereunder
or any other material adverse change or condition to the granting of such
Consent (except for one-time payments made by Parent or Seller), and all such
Consents as to Permits shall be final and conclusive, from which there is no
further appeal right, or any such appeal right has expired.
(d) NO ORDER. No Action shall be pending or threatened before any
Governmental Authority or before any arbitral body wherein an unfavorable
injunction, judgment, order, decree, ruling, directive or charge would (i)
prevent consummation of any of the transactions contemplated by this Agreement,
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, (iii) affect adversely the right of Purchaser
to own the Shares or control any member of the New Group or (iv) affect
adversely the right of Purchaser or any of its Affiliates (including the New
Group) to own their assets or to operate their businesses, nor shall any such
injunction, judgment, order, decree, ruling or charge be in effect.
(e) FINANCING. Purchaser shall have obtained and received all funding
of term loans under the Credit Agreement and all funding and availability of
revolving credit under the Credit Agreement (other than any portion of the
revolving credit facility which is not necessary to operate Libbey's business
(including the Business) and consummate the transactions contemplated hereby).
(f) ASSET TRANSFER TRANSACTIONS. All of the Asset Transfer Transactions
shall have been duly consummated pursuant to the terms of this Agreement and the
Asset Transfer Documents.
(g) CANADIAN ASSET ACQUISITION. The Canadian Asset Acquisition shall
have been duly consummated pursuant to the terms of the Canadian Purchase
Agreement.
(h) LEGAL OPINION. Purchaser shall have received from Xxxxxx Xxxxxx &
Xxxxx an opinion of counsel addressed to Purchaser dated as of the Closing Date
in the form set forth on EXHIBIT 7.2(h).
(i) AUDITORS CONSENT. If Purchaser has provided Xxxxxx Xxxxxxxx with a
reasonable opportunity to review, as provided in SECTION 4.19, the Form 8-K
filing Purchaser is required to file with the SEC in connection with the closing
of the transactions contemplated by this Agreement, Purchaser shall have
received Xxxxxx Xxxxxxxx'x consent to include its audit report on the Audited
Financial Statements and, if then complete, the 2001 Audited Financial
Statements in such Form 8-K.
(j) ANTITRUST APPROVALS. Any waiting period (and any extension thereof)
under the HSR Act applicable to the purchase of the Shares contemplated hereby
shall have expired or shall have been terminated.
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(k) CLOSING DELIVERIES. Each of the Closing deliveries set forth in
SECTION 1.7 hereof shall have been delivered.
(l) NO MATERIAL ADVERSE EFFECT. Since the Execution Date, a Material
Adverse Change shall not have occurred.
(m) FOODSERVICE ASSET TRANSFERS. All of the Foodservice Assets shall
have been transferred and conveyed to Parent or an Affiliate of Parent (other
than Newco or AHCGC) and Parent or such Affiliate shall have assumed all Assumed
Foodservice Liabilities pursuant to the terms of this Agreement and the
Foodservice Asset Transfer Documents.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1 SURVIVAL. The representations, warranties, covenants and
obligations of Seller, Parent, Canadian Seller, Purchaser and Canadian Purchaser
contained in this Agreement and the Canadian Purchase Agreement shall survive
the Closing, PROVIDED that the representations and warranties of Seller, Parent,
Canadian Seller, Purchaser and Canadian Purchaser shall survive for a period of
eighteen (18) months after the Closing; PROVIDED, FURTHER that (a) the
representations and warranties of Parent and Seller contained in SECTIONS 2.1
(ORGANIZATION), 2.2 (AUTHORITY; ENFORCEABILITY), 2.5 (CAPITAL STOCK OF
COMPANIES), 2.6 (SUBSIDIARIES), and 2.22(a)(iii) AND (b)(iii) (TITLE TO ASSETS),
and the representations and warranties of Parent and Canadian Seller contained
in SECTIONS 6(A) AND (B) of the Canadian Purchase Agreement and the
representations and warranties of Purchaser contained in SECTION 3.1
(ORGANIZATION) and 3.2 (AUTHORITY; ENFORCEABILITY) and the representations and
warranties of Purchaser and Canadian Purchaser contained in SECTIONS 7(a) AND
(b) of the Canadian Purchase Agreement, shall survive indefinitely, (b) the
representations and warranties of Parent and Seller contained in 2.17
(ENVIRONMENTAL MATTERS) shall survive for a period of five (5) years after the
Closing, (c) the representations and warranties of Parent and Seller contained
in SECTIONS 2.14 (EMPLOYEE BENEFITS) and 2.19 (TAXES) shall survive until ninety
(90) days following the expiration of the applicable statute or similar period
of limitations and (d) the representations and warranties of Parent and Seller
contained in SECTION 2.16 (INTELLECTUAL PROPERTY) shall survive indefinitely
with respect to ownership of Intellectual Property and any actual or alleged
infringement of intellectual property rights resulting from the use of the
Intellectual Property in the Business or by the New Group that occurred prior to
Closing; it being understood that in the event notice of any Claim for
indemnification under SECTION 8.2(a)(i) OR (ii), SECTION 8.2(b)(i) OR (ii) or
SECTION 8.4 shall have been given within the applicable survival period, the
representations and warranties that are the subject of such indemnification
Claim shall survive with respect to such Claim until such time as such Claim is
finally resolved.
SECTION 8.2 INDEMNIFICATION OTHER THAN FOR TAX MATTERS.
(a) INDEMNIFICATION BY SELLER AND PARENT. From and after the Closing,
Seller and Parent shall, jointly and severally, indemnify, save and hold
harmless Purchaser and its Affiliates (including the New Group after the
Closing) and each of the foregoing's respective officers, directors, employees,
agents and ERISA Affiliates (collectively, the "PURCHASER
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INDEMNIFIED PARTIES") from and against any and all Damages arising out of,
resulting from or incident to:
(i) the breach of any representation or warranty (other than those
relating to Taxes) made by Seller or Parent or its Affiliates in this Agreement
or the Canadian Purchase Agreement as of the Execution Date without regard to
any qualification contained in any representation or warranty as to materiality
or a Material Adverse Effect;
(ii) the breach of any representation or warranty (other than
those relating to Taxes) made by Seller or Parent or its Affiliates in this
Agreement or the Canadian Purchase Agreement without regard to any qualification
contained in any representation or warranty as to materiality or a Material
Adverse Effect as if such representation or warranty were made on and as of the
Closing Date (except in the case of any representation or warranty that by its
terms is made as of a date specified therein);
(iii) the breach of any covenant or agreement (other than those
relating to Taxes) by Seller or Parent or its Affiliates contained in this
Agreement or the Canadian Purchase Agreement;
(iv) the Seller-Retained Liabilities;
(v) the Excluded Seller Liabilities;
(vi) the Assumed Foodservice Liabilities and the Foodservice
Contracts;
(vii) any violation of Environmental Law relating to any action,
omission or occurrence prior to Closing or circumstance or condition existing
prior to Closing, subject to the limitations set forth in SECTION 8.3(e);
(viii) any release, discharge or migration of Hazardous Substances
from and beyond any of the Facilities or Former Properties at any time arising
from any release or discharge at or from a Facility at any time on or before the
Closing Date, subject to the limitations set forth in SECTION 8.3(d);
(ix) any claims made with respect to employees or former employees
of the Companies or their predecessors for workers' compensation or similar
claims whether or not insured or self-insured or mandated by applicable Law
("COMPENSATION CLAIMS") filed with an appropriate agency by an employee, former
employee of the Companies or by a spouse or dependent of an employee or former
employee of the Companies ("CLAIMING EMPLOYEE") prior to the Closing Date, and
Compensation Claims by Transition Employees who do not become Company Employees
regardless of when the injury occurred or is alleged to have occurred, and, to
the extent not included in the foregoing, Compensation Claims of Foodservice
Employees regardless of when the injury occurred or is alleged to have occurred;
(x) subject to the limitations set forth in SECTION 8.3(f), the
failure to obtain a Consent necessary to avoid any Adverse Event with respect to
a Pre-Closing Material
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Contract as a result of the consummation of the transactions contemplated by
this Agreement, if, in accordance with SECTION 4.30 hereof, Purchaser has
requested that Parent add such Pre-Closing Material Contract to the list of
Required Consents and Parent notifies Purchaser that it will instead agree to
indemnify Purchaser pursuant to this clause (x);
(xi) except to the extent subject to SECTION 8.2(a)(ix) OR SECTION
8.2(b)(viii), any claims, demands (oral or written), causes of actions or
Actions against the Companies, the Companies' officers, directors, employees or
agents or any of the Assets or the Foodservice Assets, asserted prior to or
after the Closing Date, relating to or arising out of any claim, cause of action
or Action relating to (a) any personal injury, bodily injury, sickness or
disease that occurs prior to the Closing Date, including any arising from or
relating to any exposure to or contact with any asbestos or other allegedly
injurious materials or substances, or (b) any damage to tangible property that
occurs prior to the Closing Date, or (c) any claim, cause of action or Action of
any employee or former employee of the Companies or their predecessors relating
to any employment matter (other than grievances under a collective bargaining
agreement) relating to occurrences prior to the Closing Date, including the
matters set forth as items 1-5 and 11 of subsection (i) of SECTION 2.13 of the
Disclosure Schedule. For the avoidance of doubt, the parties hereto acknowledge
that items 7, 8 and 10 of subsection (i) of SECTION 2.13 of the Disclosure
Schedule are covered by this clause (xi);
(xii) any claim for indemnification against any of the Companies
by reason of the fact that Seller, Parent or any of their directors, officers,
employees or agents, was a director, officer, employee, or agent of the
Companies or was serving at the request of any such entity as a partner,
trustee, director, officer, employee, or agent of the Companies (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw, agreement, or otherwise), including with
respect to any action, suit, proceeding, complaint, claim, or demand brought by
Purchaser against Seller or Parent (whether such action, suit, proceeding,
complaint, claim, or demand is pursuant to this Agreement, applicable law, or
otherwise);
(xiii) the 1995 Restructuring, including any (A) violation of any
Law, Governmental Order or Permit applicable to Seller or AHCGC or any of their
respective assets or properties in connection with the 1995 Restructuring or (B)
breach of, default under, failure to obtain any Consent under, or termination,
amendment or acceleration of, or creation of any Encumbrance on any of the
assets or properties of Seller or AHCGC pursuant to any Contract or Permit in
effect at the time of the 1995 Restructuring to which Seller or AHCGC (or any
predecessor thereto) is or was a party or by which any of their assets or
properties are or were bound or affected, in each case resulting from the 1995
Restructuring;
(xiv) the failure to obtain a Consent necessary to avoid an
Adverse Event with respect to the Railroad Agreement;
(xv) DELETED; or
(xvi) the failure to obtain a Consent necessary to avoid an
Adverse Event with respect to the Warehouse Agreement, including all reasonable
costs and expenses
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associated with the New Group having to move Inventory and associated equipment
and materials to another warehousing facility as a result of the failure to
obtain such Consent.
The foregoing indemnification obligations are independent of each other, except
as otherwise expressly provided therein.
(b) INDEMNIFICATION BY PURCHASER. From and after the Closing, Purchaser
shall indemnify, save and hold harmless Parent, Seller and their Affiliates and
each of the foregoing's respective directors, officers, employees, agents and
ERISA Affiliates (the "SELLER INDEMNIFIED PARTIES") from and against and all
Damages arising out of, resulting from or incident to:
(i) the breach of any representation or warranty made by Purchaser
or its Affiliates in this Agreement or the Canadian Purchase Agreement as of the
Execution Date without regard to any qualification contained in any
representation or warranty as to materiality;
(ii) the breach of any representation or warranty made by
Purchaser or its Affiliates in this Agreement or the Canadian Purchase Agreement
without regard to any qualification contained in any representation or warranty
as to materiality as if such representation or warranty were made on and as of
the Closing Date (except in the case of any representation or warranty that by
its terms is made as of a date specified therein);
(iii) the breach of any covenant or agreement (other than those
relating to Taxes) by Purchaser or its Affiliates contained in this Agreement or
the Canadian Purchase Agreement;
(iv) the presence of Hazardous Substances at, on or under any of
the Facilities, unless such Damages are subject to indemnification under
SECTIONS 8.2(a)(vii) or (viii) hereof;
(v) any obligation of Parent or any of its Affiliates (other than
Newco or AHCGC) as guarantors under any Contract (other than a Foodservice
Contract) (A) which is included in the transferred Assets or (B) which is
transferred to Purchaser in connection with the transfer of the capital stock of
AHCGC;
(vi) any obligations of Parent or any of its Affiliates for
product liability claims arising out of post-Closing occurrences concerning
machine-made soda lime or borosilicate bakeware or machine-made soda lime
glassware (excluding, for the avoidance of doubt, handmade or lead crystal
products) which (i) was manufactured prior to Closing at a Facility or Former
Property owned or previously owned by Seller or any of its Subsidiaries or
predecessors and (ii) was not sold in the Foodservice Channel;
(vii) any Assumed Seller Liabilities and Canadian Liabilities,
unless such Liability is subject to indemnification under SECTION 8.2(a) hereof
or under SECTION 8(b) of the Canadian Purchase Agreement; or
(viii) Compensation Claims filed with an appropriate agency by any
Company Employee after the Closing Date.
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(c) INDEMNIFICATION PROCESS. The Person making a claim for
indemnification under this ARTICLE VIII shall be, for the purposes of this
Agreement, referred to as the "INDEMNIFIED PARTY" (provided that for the purpose
of clause (iii) below such term shall refer to the party hereto to whom such
Person is related for purposes of obtaining the benefits of this Article VIII)
and the party or parties against whom such claims are asserted under this
Article VIII shall be, for the purposes of this Agreement, referred to as the
"INDEMNIFYING PARTY." All claims by any Indemnified Party under this ARTICLE
VIII, other than Tax Claims which are subject to the provisions of SECTION 8.4
hereof, shall be asserted and resolved as follows:
(i) NOTICE OF CLAIMS. In the event that (i) any claim or Action is
asserted or instituted against any Indemnified Party by any Person other than
the parties to this Agreement or their Affiliates which could give rise to
Damages for which an Indemnifying Party could be liable to an Indemnified Party
for Damages under this Agreement (such claim, demand or Proceeding, a "THIRD
PARTY CLAIM") or (ii) any Indemnified Party under this Agreement shall have a
claim to be indemnified for Damages by any Indemnifying Party under this
Agreement which does not involve a Third Party Claim (such claim, a "DIRECT
CLAIM" and, together with Third Party Claims, "Claims"), the Indemnified Party
shall with reasonable promptness send to the Indemnifying Party a written notice
specifying the nature of such Claim, the amount of Damages sought in such Claim,
if known, and the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises (a "CLAIM NOTICE"), PROVIDED that a delay
or defect in notifying the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations under this Agreement except to the extent that (and
only to the extent that) the Indemnifying Party demonstrates such failure shall
have caused the Damages for which the Indemnifying Party is obligated to be
greater than such Damages would have been had the Indemnified Party given the
Indemnifying Party timely notice.
(ii) THIRD PARTY CLAIMS. In the event of a Third Party Claim
(except for any Third Party Claims that are indemnifiable under SECTION
8.2(a)(viii), the process for which is set forth in SECTION 8.2(d)(ii)), the
Indemnifying Party shall be entitled to assume and control the defense of such
Third Party Claim and to appoint counsel of the Indemnifying Party's choice at
the expense of the Indemnifying Party to represent the Indemnified Party and any
others the Indemnifying Party may reasonably designate in connection with such
Third Party Claim (in which case the Indemnifying Party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by any
Indemnified Party except as set forth below); PROVIDED that such counsel is
reasonably acceptable to the Indemnified Party, which approval shall not be
unreasonably withheld or delayed. Notwithstanding an Indemnifying Party's
election to appoint one separate counsel (plus one local counsel, if necessary)
to represent an Indemnified Party in connection with a Third Party Claim, an
Indemnified Party shall have the right to employ one separate counsel (plus one
local counsel, if necessary), and the Indemnifying Party shall bear the
reasonable fees, costs and expenses of such one separate counsel (plus one local
counsel, if necessary) if (A) there exists a conflict of interest (including the
availability of one or more legal defenses to the Indemnified Party which are
not available to the Indemnifying Party) that would make it inappropriate in the
reasonable judgment of the Indemnified Party (upon and in conformity with advice
of counsel) for the same counsel to represent both the Indemnified Party and the
Indemnifying Party, PROVIDED that the Indemnified Party and such counsel shall
contest such Third Party Claim in good faith or (B) if the Claim seeks
injunctive
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relief which, if granted could materially and adversely affect the Indemnified
Party or its Affiliates. The Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in such defense and make available to the
Indemnifying Party all witnesses, records, materials, and information in the
Indemnified Party's possession or under the Indemnified Party's control relating
thereto as may be reasonably requested by the Indemnifying Party, and in
contesting any claim, demand or Proceeding which the Indemnifying Party defends,
or, if appropriate and related to the claim, demand or Proceeding in question,
in making any counterclaim against the person asserting the Third Party Claim,
or any cross-complaint against any Person. In the event the Indemnifying Party
fails to assume the defense of such Third Party Claim within thirty (30) days
after receipt of notice thereof in accordance with the terms hereof, (A) the
Indemnified Party against which such Third Party Claim has been asserted shall
have the right to undertake the defense, compromise or settlement of such Third
Party Claim on behalf of, at the expense of and for the account and risk of the
Indemnifying Party, and (B) the Indemnifying Party agrees to cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party,
all witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as may be
reasonably requested by the Indemnified Party.
(iii) SETTLEMENT OF THIRD PARTY CLAIMS. In connection with the
settlement or compromise of any Third Party Claim (except for any Third Party
Claims that are indemnifiable under SECTION 8.2(a)(viii), the process for which
is set forth in SECTION 8.2(d)(ii)), the Indemnifying Party shall not, without
the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed), (A) settle or compromise any Third Party
Claims or consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnified Party of a written release from all liability in respect of such
Third Party Claim of all Indemnified Parties affected by such Third Party Claim
or (B) settle or compromise any Third Party Claim if the settlement or
compromise imposes equitable remedies or material obligations on the Indemnified
Party other than financial obligations for which such Indemnified Party will be
indemnified hereunder or (C) settle or compromise any Third Party Claim if the
Indemnified Party will be required to make any payment with respect to such
compromise or settlement due to the application of the limitations of SECTION
8.3. No Third Party Claim which is being defended in good faith by the
Indemnifying Party or which is being defended by the Indemnified Party in
accordance with the terms of this Agreement shall be settled or compromised by
the Indemnified Party without the written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld or delayed); PROVIDED,
HOWEVER, if a Third Party Claim is being defended by an Indemnified Party
pursuant to the last sentence of clause (ii) above (unless the Indemnifying
Party and Indemnified Party mutually agree that the Indemnified Party shall
defend such Third Party Claim), the limitations on the Indemnified Party's right
to settle or compromise set forth in this clause (iii) shall not apply to such
Indemnified Party, unless the Indemnifying Party has been advancing (in a timely
manner) payment of such Indemnified Party's costs and expenses associated with
such defense upon demand therefor by the Indemnified Party (subject to the
undertaking of the Indemnified Party to reimburse such advances in the event
such costs of defense are not ultimately to be indemnifiable under this ARTICLE
VIII).
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(iv) REDUCTION OF DAMAGES. To the extent any Damages of an Indemnified Party are
reduced by receipt of payment under insurance policies, which payments are not
subject to retroactive adjustment or other reimbursement to the insurer in
respect of such payment, such payments (net of the expenses of the recovery
thereof) (such net payment, a "REIMBURSEMENT") shall be credited against any
such Damages; PROVIDED, HOWEVER, the pendency of such payments shall not delay
or reduce the obligation of the Indemnifying Party to make payment to the
Indemnified Party in respect of such Damages. The Indemnified Party shall use
commercially reasonably efforts (but in no event shall the Indemnified Party be
required to xxx the insurer or its agent, unless the Indemnifying Party agrees
to pay all reasonable costs and expenses in connection therewith, including
reasonable attorneys' fees) to pursue payment under or from any insurer in
respect of such Damages. If any Reimbursement is obtained subsequent to payment
by an Indemnifying Party in respect of any Damages, such Reimbursement shall be
promptly paid over to the Indemnifying Party. In the case any event shall have
occurred which would otherwise entitle either party to assert a claim for
indemnification hereunder, no Damages shall be deemed to have been sustained by
such party to the extent of any actual Tax savings realized by such party with
respect thereto (the "TAX BENEFIT"), but such Damages shall be increased by such
an amount necessary in order for the Indemnified Party to receive a net payment,
after paying any Taxes resulting from its receipt of any indemnification payment
for such Damages, equal to the amount of Damages otherwise determined in
accordance with this SECTION 8.2(c)(iv). The Tax losses, deductions, credits or
other items of the Indemnified Party resulting from Damages shall be deemed to
be realized proportionately with any other Tax losses, deductions, credits or
other items available to the Indemnified Party. To the extent there is a
determination (as defined in Section 1313(a) of the Code or any comparable
provision of state, local or foreign law) disallowing the Tax Benefit, the
Indemnifying Party shall refund to the Indemnified Party the amount of any
related reduction of Damages previously allowed pursuant to this SECTION
8.2(c)(iv).
(v) ACCESS. From and after the delivery of a Claim Notice under this
Agreement, at the reasonable request of the Indemnifying Party, each Indemnified
Party shall grant the Indemnifying Party and its Representatives all reasonable
access to the books, records and properties of such Indemnified Party to the
extent reasonably related to the matters to which the Claim Notice relates. All
such access shall be granted during normal business hours and shall be granted
under conditions which will not unreasonably interfere with the business and
operations of such Indemnified Party. The Indemnifying Party will not, and shall
require that its Representatives do not, use (except in connection with such
Claim Notice) or disclose to any third Person other than the Indemnifying
Party's Representatives (except as may be required by applicable Law) any
information obtained pursuant to THIS SECTION 8.2(c)(v) which is designated as
confidential by an Indemnified Party.
(d) CERTAIN ENVIRONMENTAL MATTERS. In connection with any claim for
indemnification under Section 8.2(a)(viii) (certain releases, discharges or
migration of Hazardous Substances), the following shall apply, notwithstanding
any contrary term of SECTIONS 8.2(c)(ii) or (iii):
(i) REMEDIATION. Purchaser shall control the remediation of any
release, discharge or migration of Hazardous Substances indemnifiable under
SECTION 8.2(a)(viii), including the selection and direction of any contractor,
consultants or other
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Persons necessary for the performance thereof and the communication with any
Governmental Authority or other Person incident thereto. Notwithstanding the
foregoing, however, Parent and Seller shall have the right to approve the lead
contractor or consultant for any such remediation project, provided such
approval shall not be unreasonably withheld or delayed. Purchaser shall provide
Parent and Seller with copies of any final proposed work plans, bids or cost
projections and allow Parent and Seller a reasonable amount of time to review
and comment on such documents prior to the commencement of the work proposed
therein. Purchaser shall provide Parent and Seller with copies of any invoices
or other documentation of Damages incurred in connection with any such work and
Parent and Seller shall deliver to Purchaser payment of amounts due in respect
of such Damages under SECTION 8.2(a)(viii), subject to the applicable
limitations in SECTION 8.3, within forty-five (45) days of its receipt of any
such invoices or other documentation (subject to the undertaking of the
Indemnified Party to reimburse such advances in the event such costs are not
ultimately to be indemnifiable under this ARTICLE VIII). In the event that a new
remediation project indemnifiable under SECTION 8.2(a)(viii) is to commence
after the aggregate amount of Damages incurred by Purchaser and indemnifiable
under such clause (but for the limitations of SECTION 8.3(d)) have already
exceeded $5,000,000, then Parent and Seller shall have the right to approve the
performance of such new remediation project, including the selection of any
contractor or consultant, the preparation and submission of any proposed work
plan and the communication with any Governmental Authority or other Person
incident thereto, and such approvals shall not be unreasonably withheld or
delayed.
(ii) THIRD PARTY CLAIMS. In the event of a Third Party Claim under
SECTION 8.2(a)(viii), Purchaser shall assume and control the defense of such
Third Party Claim, and the assertion of any counterclaims or cross-claims
relating thereto, including the appointment of counsel, the costs of which
defense shall be indemnifiable Damages, subject to the applicable limitations of
SECTION 8.3. Seller and Parent shall cooperate with Purchaser and its counsel in
such defense and make available to them all witnesses, records, materials and
information in Seller's or Parent's possession or under their control relating
thereto as may be reasonably requested by Purchaser or its counsel, and in
contesting any such claim, demand or proceeding in question, in making any
counterclaim against the person asserting the Third Party Claim, or any
cross-complaint against any Person. Purchaser shall not, without the written
consent of Seller or Parent (which consent shall not be unreasonably withheld or
delayed), settle or compromise any such Third Party Claim if Seller or Parent
will be required to make any payment with respect to such settlement or
compromise due to the application of SECTION 8.3. Purchaser shall provide Parent
and Seller with copies of any invoices or other documentation of Damages
incurred in connection with any such Third Party Claim and Parent and Seller
shall deliver to Purchaser payment of amounts due in respect of such Damages
under SECTION 8.2(a)(viii), subject to the applicable limitations in SECTION
8.3, within forty-five (45) days of its receipt of any such invoices or other
documentation (subject to the undertaking of the Indemnified Party to promptly
reimburse such advances in the event such costs are not ultimately to be
indemnifiable under this ARTICLE VIII).
(e) DEFINITION OF DAMAGES. "DAMAGES" shall mean any and all costs,
losses, (including diminution in value) Taxes, liabilities, obligations,
damages, lawsuits, deficiencies, claims, demands, and expenses (whether or not
arising out of Third Party Claims), including interest, penalties, costs of
mitigation, losses in connection with any Environmental Laws
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(including any clean-up or remedial action), damages to the environment and,
reasonable attorneys' fees. The term "DAMAGES" shall not include lost profits
and other losses (other than direct damages) resulting from any shutdown or
curtailment of operations of the Companies (other than lost profits and other
losses payable between or among the parties hereto which arise out of a Third
Party Claim for such Damages). The term "DAMAGES" as used in this ARTICLE VIII
is not limited to matters asserted by third parties against Seller, Parent or
Purchaser, but includes Damages incurred or sustained by Seller Indemnified
Parties or Purchaser Indemnified Parties in the absence of Third Party Claims.
Notwithstanding anything to the contrary in this Agreement, Damages shall
expressly exclude punitive damages, exemplary damages, multiple damages and
other penalty damages, unless arising out of a Third Party Claim. Payments by
Purchaser Indemnified Parties of amounts for which Purchaser Indemnified Parties
indemnified hereunder, and payments by Seller Indemnified Parties of amounts for
which Seller Indemnified Parties are indemnified, shall not be a condition
precedent to recovery.
(f) The respective indemnification obligations of the parties with
respect to Tax matters (including any breach of the representations and
warranties contained in SECTION 2.19) shall be governed by SECTION 8.4 and this
SECTION 8.2 shall not be applicable to any such matters.
SECTION 8.3 LIMITS ON INDEMNIFICATION.
(a) No amount shall be payable by any Indemnifying Party pursuant to
SECTION 8.2(a)(i) and (ii) or SECTION 8.2(b)(i) and (ii) unless the aggregate
amount of Damages indemnifiable under SECTION 8.2(a)(i) and (ii) or SECTION
8.2(b)(i) and (ii), respectively, exceeds $4,000,000 (at which point the
Indemnified Party shall be entitled to all indemnification amounts in excess of
such threshold amount); PROVIDED, HOWEVER, that the above limitation shall not
apply to any indemnification obligations of Seller and Parent to Purchaser
Indemnified Parties arising from Seller's and Parent's representations and
warranties set forth in SECTION 2.19 (Taxes) or SECTION 2.22(a)(iii) or (b)(iii)
(Title to Assets) or SECTION 2.15(a)(i) (Title to Owned Property) or
indemnification obligations of any party under any other provision of ARTICLE
VIII (nor shall any Damages paid in respect of such other indemnification
obligations be applied toward such $4,000,000 threshold).
(b) Notwithstanding anything to the contrary contained in this
Agreement, the maximum amount of indemnifiable Damages which may be recovered
by any Purchaser Indemnified Parties from Seller and Parent and by any Seller
Indemnified Parties from Purchaser arising out of, resulting from or incident
to the matters enumerated in SECTION 8.2(a)(i) or (a)(ii) or SECTION 8.2(b)(i)
or (b)(ii) shall be an amount equal to thirty percent (30%) of the Purchase
Price; PROVIDED, HOWEVER, that this limitation shall not apply to any
indemnification obligations of Seller and Parent to any Purchaser Indemnified
Parties arising from representations and warranties set forth in SECTION 2.14
(Employee Benefits), SECTION 2.17 (Environmental Matters) or SECTION 2.19
(Taxes).
(c) DELETED
(d) The indemnification obligations pursuant to SECTION 8.2(a)(viii)
shall survive for a period of five (5) years after the Closing. With respect to
Damages subject to
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indemnification under SECTION 8.2(a)(viii), (A) Parent and Seller shall not be
obligated to indemnify any Purchaser Indemnified Party for the first $3,000,000
of Damages for which Parent and Seller would otherwise be required to indemnify
Purchaser Indemnified Parties thereunder, and (B) if such Damages exceed
$3,000,000 in the aggregate, Parent and Seller shall indemnify Purchaser
Indemnified Parties for (1) fifty percent (50%) of the Damages that exceed
$3,000,000 and are less than $5,000,000 and (2) all Damages in excess of
$5,000,000.
(e) With respect to the indemnification obligations pursuant to SECTION
8.2(a)(vii), indemnifiable Damages thereunder shall be limited only to fines or
monetary penalties imposed or demanded by any Governmental Authority, provided
this limitation shall not affect any right of indemnification under any other
clause of SECTION 8.2(A). In the event that any Governmental Authority agrees to
a reduction of the amount of any fine or penalty in consideration for the
performance of any supplemental environmental project, the indemnifiable Damages
shall be the full amount of the fine or penalty prior to any reduction due to
the supplement environmental project, but shall not include any of the costs to
perform such supplemental environmental project.
(f) No Damages shall be indemnifiable under SECTION 8.2(a)(x) if such
Damages relate to loss by the New Group of products or services (but not breach
of Contract claims) under a Pre-Closing Material Contract as to which Purchaser
or the New Group could obtain (after using commercially reasonable efforts)
substantially equivalent products or services on substantially equivalent terms
and conditions (as to the Business) from a no less qualified third-party vendor.
(g) If Purchaser has provided the Limitation of Indemnification Notice,
Parent's and Seller's indemnification obligations in respect of Damages pursuant
to SECTION 8.2(a)(ii) shall be limited to Twenty Seven Million Seven Hundred
Fifty Thousand Dollars (USD27,750,000) in the aggregate with respect to Damages
arising out of the events, circumstances or conditions set forth in any Parent
Liabilities Notice provided to Purchaser in accordance with SECTION 4.29 hereof.
(h) To the extent an Indemnifying Party discharges any claim for
indemnification hereunder, it shall be subrogated to all related rights of the
Indemnified Party against third parties (other than any Purchaser Indemnified
Party or Seller Indemnified Party).
(i) None of the limitations set forth in SECTION 8.3(a), (b), (c),
(d), (e), (f) or (g) of this Agreement or the limitations on survival set forth
in SECTION 8.1 of this Agreement shall apply to Damages which arise out of
fraud by any party hereto or any Affiliate of such party.
SECTION 8.4 TAX INDEMNIFICATION.
(a) Following the Closing, Parent and Seller shall, jointly and
severally, indemnify the Purchaser Indemnified Parties (including the Companies)
and hold them harmless from (i) all Liability for Taxes of Newco and AHCGC
(including any obligation to contribute to the payment of a Tax determined on a
consolidated, combined or unitary basis with respect to a group of corporations
that includes or included Newco or AHCGC, and any Taxes resulting from
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the Elections except as provided in SECTION 6.7) for any Pre-Closing Tax Periods
(determined in accordance with the methodology provided in SECTION 6.2(d)), (ii)
all Liability (as a result of Regulation Section 1.1502-6(a) or otherwise) for
Taxes of Parent, Seller, Canadian Seller (including all Liability for Property
Taxes arising out of the ownership of the Canadian Assets for any Pre-Closing
Tax Period (determined on a per diem basis consistent with the methodology of
SECTION 8.4(c)(i)) or any other entity which is or has been an Affiliate of
Newco or AHCGC (other than Newco and AHCGC), (iii) any and all Damages arising
out of, resulting from or incident to any breach by Parent, Seller, or any of
their Affiliates (other than, after the Closing, Newco and AHCGC) of any
covenant contained in SECTION 4.1(xxiii) OR (xxiv) or ARTICLE VI, (iv) any and
all Damages arising out of, resulting from or incident to the breach of any
representation or warranty made by Parent or Seller in SECTION 2.19 without
regard to any qualification contained therein as to materiality or a Material
Adverse Effect, except to the extent that any such Damages are otherwise
indemnified pursuant to the foregoing clauses (i) - (iii), (v) any and all
Damages arising out of, resulting from or incident to the breach of any
representation or warranty made by Parent or Seller in SECTION 2.19 without
regard to any qualification contained therein as to materiality or Material
Adverse Effect as if such representation or warranty were made on or as of the
Closing Date (except in the case of any representation or warranty that by its
terms is made as of a date specified therein), except to the extent that any
such Damages are otherwise indemnified pursuant to the foregoing clauses (i) -
(iv), and (vi) all Liabilities for Property Taxes arising out of the ownership
of the Foodservice Assets. For purposes of this SECTION 8.4(a), Taxes shall
include the amount of Taxes which would have been paid but for the application
of any credit or net operating loss or capital loss deduction attributable to
Post-Closing Tax Periods.
(b) Following the Closing, Purchaser shall indemnify the Seller
Indemnified Parties and hold them harmless from (i) all Liability for Taxes of
Newco and AHCGC (including any obligation to contribute to the payment of a Tax
determined on a consolidated, combined or unitary basis with respect to a group
of corporations that includes or included one or more of Newco or AHCGC) for any
Post-Closing Tax Period (determined in accordance with the methodology provided
in SECTION 6.2(d)), (ii) any and all Damages arising out of, resulting from or
incident to the breach by Purchaser of any covenant contained in ARTICLE VI of
this Agreement and (iii) all Liability for Property Taxes arising out of the
ownership of the Canadian Assets for any Post-Closing Tax Period (determined on
a per diem basis consistent with the methodology of SECTION 8.4(c)(i)).
(c) In the case of any Straddle Period:
(i) real, personal and intangible property Taxes ("PROPERTY
TAXES") of Seller or its Affiliates for a Pre-Closing Tax Period shall be equal
to the amount of such Property 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 (including that portion of the
Straddle Period in which any of the Assets were owned by Seller) and the
denominator of which is the total number of days in the Straddle Period; and
(ii) the Taxes of Newco or AHCGC (other than Property Taxes) for
any Pre-Closing Tax Period shall be computed as if such Taxable Period ended as
of the close of business on the Closing Date (which shall be the deemed the time
of Closing as provided in
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SECTION 1.5 and which shall include the tax consequences of the Share Purchase,
the Elections and the results of any inter-company transactions with Parent or
its Affiliates).
(d) With respect to Parent and Seller's indemnity obligations in
respect of Taxes for a Straddle Period, Seller shall pay to Purchaser an amount
equal to any such Taxes allocable to a Pre-Closing Tax Period in accordance with
SECTION 8.4(c) less the sum of (i) the amount of such allocable Taxes paid by
Parent or any of its Affiliates (other than Newco or AHCGC) at any time and (ii)
the amount of such Taxes paid by Newco and AHCGC on or prior to the Closing Date
(collectively, (i) and (ii), the "STRADDLE PERIOD TAX OFFSET") within ten (10)
days after written demand thereof is made by Purchaser (but in no event earlier
than five (5) days before the date on which the Taxes for the Straddle Period
are required to be paid to the relevant Taxing Authority). If the amount of the
Straddle Period Tax Offset exceeds the amount of such Taxes allocable to the
Pre-Closing Tax Period within such Straddle Period, Purchaser shall pay to
Parent the amount of such excess within ten (10) days after the Tax Return with
respect to the final liability for such Taxes is required to be filed with the
relevant Taxing Authority. In the case of a Tax that is contested in accordance
with the provisions of SECTION 8.4(e), payment of the Tax to the appropriate
Taxing Authority shall not be considered to be due earlier than the date a final
determination to such effect is made by the appropriate Taxing Authority or
court.
(e) (i) If a claim shall be made by any Taxing Authority, which,
if successful, might result in an indemnity payment to a party (the "FIRST
PARTY"), one of its Affiliates or any of its Representatives pursuant to this
SECTION 8.4, the First Party shall promptly and in any event no more than thirty
(30) days following the First Party's receipt of such claim, give written notice
to the other party (the "SECOND PARTY") of such claim (a "TAX CLAIM"); PROVIDED,
HOWEVER, the failure of the First Party to give such notice shall only relieve
the Second Party from its indemnification obligations hereunder to the extent it
is actually prejudiced by such failure.
(ii) With respect to any Tax Claim relating to a Taxable
Period ending on or prior to the Closing Date, Parent shall, upon written
notification to Purchaser, control all proceedings and may make all decisions
taken in connection with such Tax Claim (including selection of counsel) at
its own expense; provided, HOWEVER, that with respect to Tax Claims the
resolution of which will be binding on Newco or AHCGC in a Tax Period ending
after the Closing Date, then Purchaser may also participate in such proceeding
at its own expense and Parent may not settle such Tax Claim without the
written consent of Purchaser (which consent shall not be unreasonably
withheld). Parent and Purchaser shall jointly control all proceedings taken in
connection with any Tax Claim relating to Taxes of Newco or AHCGC for a
Straddle Period. Purchaser shall control at its own expense all proceedings
with respect to any Tax Claim relating to a Taxable Period beginning after the
Closing Date. A party shall promptly notify the other party if it decides not
to control the defense or settlement of any Tax Claim which it is entitled to
control pursuant to this Agreement, and the other party shall thereupon be
permitted to defend and settle such proceeding.
(iii) Parent and Purchaser and each of their respective
Affiliates shall reasonably cooperate with each other in contesting any Tax
Claim. Such cooperation shall include the retention and, upon the request of the
party or parties controlling proceedings relating to such Tax Claim, the
provision to such party or parties of records and information which are
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reasonably relevant to such Tax Claim, and making employees available on a
mutually convenient basis to provide additional information or explanation of
any material provided hereunder or to testify at proceedings relating to such
Tax Claim.
SECTION 8.5 EXCLUSIVITY OF INDEMNIFICATION REMEDY. Except for any
equitable relief, including injunctive relief or specific performance, to which
any party hereto may be entitled, from and after the Closing the indemnification
provided in this ARTICLE VIII shall be the sole and exclusive remedy of any
party hereto with respect to this Agreement and the Ancillary Agreements, except
for rights of set-off as to obligations arising under this Agreement (excluding
any obligations arising under the Transition Services Agreement), which the
parties hereto hereby establish and acknowledge.
ARTICLE IX
TERMINATION AND WAIVER
SECTION 9.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by either Parent or Purchaser if the Closing shall not have
occurred on or prior to June 17, 2002; provided, HOWEVER, that the right to
terminate this Agreement under this SECTION 9.1(a) shall not be available to any
party whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, the failure of the Closing to
occur on or prior to such date;
(b) by either Parent or Purchaser in the event that any Governmental
Authority shall have issued a final, non-appealable order, decree, ruling or
injunction (other than a temporary restraining order) restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement; PROVIDED,
HOWEVER, that the right to terminate this Agreement under this SECTION 9.1(b)
shall not be available to any party who shall not have complied with its
obligations under SECTIONS 4.3 and 4.4 to avoid the issuance of such order,
decree, ruling or injunction;
(c) by Purchaser in the event (i) the EBITDA derived from the Initial
Financial Statements for the periods ended December 31, 2000 and March 31, 2001
taken as one fifteen (15) month period is $3 million or more greater than the
EBITDA derived from the Subsequent Financial Statements for the periods ended
December 31, 2000 and March 31, 2001 taken as one fifteen (15) month period or
(ii) the EBITDA derived from the Initial Financial Statements for the three
month period ended March 31, 2001 is $2 million or more greater than the EBITDA
derived from the Interim Financial Statements; PROVIDED, HOWEVER, Purchaser
shall not have the right to exercise such right of termination until twenty (20)
days after giving the written notice (the "STATEMENT NOTICE") to Seller and
Parent (the "EVALUATION PERIOD") setting forth the differences in EBITDA between
such financial statements. During the Evaluation Period, Purchaser agrees and
agrees to cause it financial and legal advisors to, negotiate in good faith with
Seller and Parent as to such matters and, if appropriate, to make such
adjustments to the terms and conditions of this Agreement and the Ancillary
Agreements as would result in Purchaser agreeing to proceed with the
transactions contemplated hereby. If the Statement Notice shall not be given by
Purchaser within thirty (30) days after receipt of the Subsequent
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Financial Statements in conformance with the requirements of SECTION 4.18 this
termination right shall cease;
(d) by the mutual written consent of Parent and Purchaser;
(e) by Seller upon written notice in the event of a material breach of
any representation or warranty of Purchaser contained in this Agreement (other
than a breach of the representations in SECTION 3.3(b) relating to a
Governmental Order entered after the Execution Date under the Antitrust Laws in
connection with the transactions contemplated hereby) or any covenant or
agreement to be performed or complied with by Purchaser pursuant to the terms of
this Agreement, which breach (i) has continued without cure for a period of
thirty (30) days following notice thereof by Seller to Purchaser and (ii) would
result in a condition to Closing set forth in SECTION 7.1 of this Agreement not
being satisfied (which condition has not been waived by Seller in writing);
(f) by Purchaser upon written notice in the event of a material breach
of any representation or warranty of Seller or Parent contained in this
Agreement (other than a breach of the representations in SECTION 2.3(b) relating
to a Governmental Order entered after the Execution Date under the Antitrust
Laws in connection with the transactions contemplated hereby) or any covenant or
agreement to be performed or complied with by Seller, Parent or the Companies
pursuant to the terms of this Agreement, which breach (i) has continued without
cure for a period of thirty (30) days following notice thereof by Purchaser to
Seller and Parent and (ii) would result in a condition to Closing set forth in
SECTION 7.2 of this Agreement not being satisfied (which condition has not been
waived by Purchaser in writing);
(g) by either Purchaser or Parent, if either (i) the Parent and
Purchaser shall have agreed to not further resist or contest actions or
proceedings under or relating to the HSR Act or other Antitrust Laws challenging
the Share Purchase or other transactions contemplated by this Agreement, or (ii)
Purchaser shall have determined not to proceed to continue to contest or resist
in compliance with SECTION 4.4 and, prior to termination by Purchaser pursuant
to this clause (ii), five (5) Business Days have passed since Purchaser advised
Parent of such decision pursuant to SECTION 4.4(d);
(h) by either Purchaser (provided Purchaser shall have complied with
its obligations under SECTION 4.20(a)) or Parent (provided Parent shall have
complied with its obligations under SECTION 4.20(b)), upon written notice to the
other, in the event of the termination of any of the term loan commitments of
the lenders under the Credit Agreement or revolving credit commitments of
lenders under the Credit Agreement (other than any portion of the revolving
credit facility which is not necessary to operate Libbey's business (including
the Business) and consummate the transactions contemplated hereby) and such
commitments are not renewed, reinstated or replaced within forty-five (45) days
of the date such commitments terminated (the "COMMITMENT CURE PERIOD");
PROVIDED, HOWEVER, Parent's and Purchaser's right of termination under this
subparagraph (h) shall terminate if prior to, or during the Commitment Cure
Period, Purchaser irrevocably waives the condition set forth in SECTION 7.2(e)
(FINANCING) hereof; or
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(i) by Parent, if it has provided a Parent Liabilities Notice to
Purchaser in accordance with SECTION 4.29 and Purchaser has not provided Parent
with a Limitation of Indemnification Notice at least two (2) Business Days prior
to Closing.
SECTION 9.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in SECTION 9.1, this Agreement shall forthwith become void
and of no further force or effect and there shall be no liability on the part of
any party hereto, except (i) that nothing herein shall relieve any party hereto
from liability for any willful breach of this Agreement occurring prior to any
such termination and (ii) the terms of each of this SECTION 9.2 and SECTION
11.1, SECTION 11.4, SECTION 11.6, SECTION 11.7, SECTION 11.10 and SECTION 11.11
shall survive such termination.
ARTICLE X
DEFINITIONS
SECTION 10.1 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"ACTION" shall mean any claim, action, suit, arbitration, hearing or
proceeding by or before any Governmental Authority or arbitral body.
"ADVERSE EVENT" means a violation of or breach or default (or event
which would become a default with either the giving of notice or lapse of time,
or both) under, or the arising of any rights of termination, material
modification or acceleration of, any Contract or Permit.
"AFFILIATE" shall mean, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"AGREEMENT" shall mean this Amended and Restated Stock Purchase
Agreement among Parent, Seller, Operating Company, Newco and Purchaser
(including the Disclosure Schedule, Schedules and Exhibits hereto), as amended,
modified or supplemented from time to time.
"AHCGC" shall mean Anchor Hocking Consumer Glass Corporation, a
Delaware corporation.
"AHCGC ASSETS" shall mean all of AHCGC's right, title and interest in
and to all properties, assets and rights of any kind, nature and description,
whether tangible or intangible, real or personal, owned by AHCGC or in which
AHCGC has any interest, excluding all Excluded Seller Assets and Foodservice
Assets.
"ANCILLARY AGREEMENTS" shall mean the Transition Services Agreement,
the License Agreement, the Asset Transfer Documents, the Asset Drop-Down
Documents, the Foodservice Asset Transfer Documents and the Canadian Purchase
Agreement.
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"ASSET TRANSFER DATE" shall mean the date on which the transfer and
conveyance of the Seller Assets to Newco is consummated in accordance with the
terms and subject to the conditions of this Agreement and the Asset Transfer
Documents.
"ASSET TRANSFERS" shall mean, collectively, the transactions
contemplated by the Asset Transfer Transactions, the Asset Drop-Down Transfers
and the Canadian Asset Acquisition.
"ASSETS" shall mean the (i) Seller Assets, (ii) AHCGC Assets, (iii)
Outside Assets and (iv) Canadian Assets, but shall exclude the Foodservice
Assets.
"BOOKS AND RECORDS" shall mean all books, documents, records, lists,
ledgers, files, reports, plans, data, drawings and operating records of any kind
(including records, files and data stored on computer disks or tapes or any
other storage medium, including any offline or archived data), or portions
thereof, pertaining to the Companies or the Business, including all corporate
and tax Books and Records of the Companies.
"BUSINESS" shall mean (a) all of the Assets and (b) the business of the
Companies as presently conducted, which relates to the design, development,
manufacture, distribution, servicing, sale or marketing of consumer or specialty
glass products and the associated Canadian business; PROVIDED, HOWEVER, the term
"Business" shall not include the Foodservice Business.
"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in The
City of Chicago.
"CANADIAN ASSETS" shall have the meaning set forth in the Canadian
Purchase Agreement.
"CANADIAN LIABILITIES" shall have the meaning set forth in the Canadian
Purchase Agreement.
"CANADIAN PURCHASE AGREEMENT" shall mean the Canadian Asset Purchase
Agreement between Canadian Purchaser, Purchaser, Parent and Canadian Seller
dated June 17, 2001, as amended and restated on January 21, 2002, whereby
Canadian Seller shall sell and Canadian Purchaser shall acquire all of the
Canadian Assets and assume all of the Canadian Liabilities.
"CANADIAN PURCHASER" shall mean Libbey Canada Inc., an Ontario
corporation.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"COMPANY EMPLOYEES" shall mean each (i) Employee of Newco and AHCGC on
the Closing Date and (ii) each Salaried Employee and/or Transition Employee who
becomes an Employee of Newco, AHCGC or Purchaser after the Closing Date in
accordance with SECTION 5.10, but only from and after his or her date of hire by
Newco, AHCGC or Purchaser after the Closing Date, but shall exclude any
Foodservice Employee.
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"CONFIDENTIALITY AGREEMENT" shall mean the confidentiality agreement
dated February 28, 2001 between Purchaser and Seller.
"CONSENT" shall mean waiver, consent, approval, grant, concession or
exemption of any Person, including any Governmental Authority.
"CONTRACTS" shall mean any agreements, contracts, leases, powers of
attorney, notes, loans, evidence of indebtedness, letters of credit, settlement
agreements, franchise agreements, undertakings, covenants not to compete,
licenses, instruments, obligations, commitments, purchase and sales orders and
other executory commitments to which any Person is a party, whether oral or
written.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), with respect to the relationship between or among two or more
Persons, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"CREDIT AGREEMENT" shall mean that certain Credit Agreement dated as of
November 16, 2001, among Libbey Glass Inc., as the borrower, Bank of America,
N.A., as the administrative agent, swing line lender and a letter of credit
issuer, Bank One, Michigan and Bear Xxxxxxx Corporate Lending, Inc., as
syndication agents, the other lenders party thereto from time to time, and Banc
of America Securities LLC, and Banc One Capital Markets, Inc., as joint lead
arrangers and joint book managers, as in effect as of the date hereof.
"DIVISION" shall mean the Assets and the Foodservice Assets and the
business of the Companies which relate to the design, development, manufacture,
distribution, servicing, sale or marketing of consumer or specialty glass
products and the associated Canadian business, including the accounts of Seller,
AHCGC (including the Canadian sales office and distribution operation) and,
after the Asset Transfers, the New Group, and Parent corporate accounts directly
related to Seller and AHCGC after elimination of inter-company accounts and
transactions, excluding the accounts of Operating Company, Xxxxxx Puerto Rico,
Ltd. and Plastics, Inc., which are businesses unrelated to the Assets or the
business of the Companies, which relates to the design, development,
manufacture, distribution, servicing, sale or marketing of consumer or specialty
glass products and the associated Canadian business.
"EBITDA" shall mean earnings before interest, taxes, depreciation and
amortization and shall be computed as the sum of (i) net income, income taxes
and interest as reflected on the relevant income statement and (ii) depreciation
and amortization as reflected on the relevant statement of cash flow for the
applicable period.
"EMPLOYEE" shall mean any employee of any of the Companies who perform
services with respect to the Business or the Foodservice Business.
"EMPLOYMENT AGREEMENT" shall mean any agreement between Parent or any
of its Affiliates (including the Companies), on the one hand, and an Employee,
on the other hand.
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"ENCUMBRANCE" shall mean any security interest, pledge, mortgage, lien,
charge, easement, restrictive covenant, development agreement, zoning by-law or
restriction, right-of-way (from or onto the real property and/or improvements
thereon), building set-back requirements, encroachment, building or use
restriction, other encumbrance or title defect of any kind, option to purchase,
right of first refusal, right of first offer, adverse claim, or other right of
occupation.
"ENVIRONMENTAL CLAIMS" means all notices of violation, liens, claims,
demands, suits, or causes of action for any damage, including personal injury
(including bodily injury) or property damage (including any depreciation or
diminution of property values) arising directly or indirectly out of
Environmental Conditions or Environmental Laws. By way of example only (and not
by way of limitation), Environmental Claims include (i) violations of or
obligations under any Contract related to Environmental Laws or Environmental
Conditions between the Companies and any other Person, (ii) actual or threatened
damages to natural resources, (iii) claims for nuisance or its statutory
equivalent, (iv) claims for the recovery of response costs under Environmental
Laws or otherwise, or administrative or judicial orders directing the
performance of investigations, responses or remedial actions under any
Environmental Laws or otherwise, (v) requirements to implement "corrective
action" pursuant to any order or permit issued pursuant to the Resource
Conservation and Recovery Act, as amended, or similar provisions of applicable
state law, (vi) claims related to Environmental Laws or Environmental Conditions
for restitution, contribution, or indemnity, (vii) fines, penalties or liens of
any kind against property related to Environmental Laws or Environmental
Conditions, (viii) claims related to Environmental Laws or Environmental
Conditions for injunctive relief or other orders or notices of violation from
federal, state or local agencies or courts, and (ix) with regard to any present
or former employees, claims relating to exposure to or injury from Environmental
Conditions.
"ENVIRONMENTAL CONDITIONS" means the state of the environment,
including natural resources (e.g., flora and fauna), soil, surface water, ground
water, any present or potential drinking water supply, subsurface strata or
ambient air, relating to or arising out of the use, handling, storage,
treatment, recycling, generation, transportation, release, spilling, leaking,
pumping, pouring, emptying, discharging, injecting, escaping, leaching,
disposal, dumping or threatened release of Hazardous Substances by the Companies
or any of their respective predecessors or successors in interest, or by its
respective agents, representatives, employees or independent contractors when
acting in such capacity on behalf of any of the Companies. With respect to
Environmental Claims by third parties, Environmental Conditions also include the
exposure of persons to Hazardous Substances at the work place or the exposure of
persons or property to Hazardous Substances migrating from or otherwise
emanating from or located on the Facilities or the Former Facilities.
"ENVIRONMENTAL LAWS" means all applicable Laws, all rules or
regulations promulgated thereunder, and all orders, consent orders, judgments,
notices, permits or demand letters issued, promulgated or entered pursuant
thereto, relating to pollution or protection of the environment (including
ambient air, surface water, ground water, land surface, or subsurface strata),
including (i) Laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, industrial materials, wastes or
other substances into the environment and (ii) Laws relating to the
identification, generation, manufacture, processing,
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distribution, use, treatment, storage, disposal, recovery, transport or other
handling of pollutants, contaminants, chemicals, industrial materials, wastes or
other substances. Environmental Laws shall include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Toxic Substances Control Act, as amended, the Hazardous Materials Transportation
Act, as amended, the Resource Conservation and Recovery Act, as amended, the
Clean Water Act, as amended, the Safe Drinking Water Act, as amended, the Clean
Air Act, as amended, the Occupational Safety and Health Act, as amended, and all
analogous laws promulgated or issued by any Governmental Authority.
"ENVIRONMENTAL REPORTS" means any and all written analyses, summaries
or explanations, in the possession or control of Seller or the Companies,
prepared for the purpose of analyzing or assessing (a) any Environmental
Conditions in, on or about the Facilities or the Former Properties or (b)
compliance by the Companies with Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
"ESTIMATED CLOSING DATE BALANCE SHEET" shall mean the estimated
unaudited, consolidated balance sheet of the New Group as of the Closing Date
prepared in accordance with GAAP consistent with accounting principles and
practices applied in preparation of the 2000 Audited Financial Statements
(excluding the physical inventory contemplated thereby).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"EXECUTION DATE" shall mean the date the Original Purchase Agreement
was executed, June 17, 2001.
"FACILITIES" shall means all plants, offices, manufacturing facilities,
stores, warehouses, administration buildings and all real property and related
facilities (i) owned or leased by the Companies and used by the Companies as of
the Execution Date in the conduct of the Business or (ii) which are part of the
Outside Assets or the Canadian Assets.
"FOODSERVICE BUSINESS" shall mean (a) the Foodservice Assets and (b)
the design, development, distribution, servicing, sale, manufacture and
marketing of glass products in the Foodservice Channel.
"FOODSERVICE CHANNEL" shall mean foodservice distributors, foodservice
dealers, foodservice redistributors, foodservice importers, foodservice
exporters, cash & carry outlets, hotels, restaurants, chain restaurants, bars,
casinos, airlines, cruise lines, breweries, microbreweries, hospitals, health
care facilities, penal institutions, all eating and drinking establishments,
government agencies (federal, state and local), educational facilities (public
and private), wholesale clubs, home centers, foodservice e-commerce distributors
and foodservice buying groups.
"FOODSERVICE INVENTORIES" shall mean (i) the finished goods inventories
used in the Foodservice Business or sold in the Foodservice Channel, which were
manufactured from the
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Foodservice Molds, (ii) the work-in-process inventory that is used exclusively
in the Foodservice Business or sold in the Foodservice Channel and was
manufactured from the Foodservice Molds, (iii) with respect to the products set
forth on EXHIBIT 10.1-FI-1, the finished goods inventories which are packaged as
finished goods inventories for the Foodservice Business or reasonably designated
as finished goods inventories for the Foodservice Business in the Books and
Records of the Companies, (iv) the percentage of units of finished goods
inventories for each of the products set forth on EXHIBIT 10.1-FI-1 (to the
extent such finished goods inventories are not packaged as finished goods
inventories for the Foodservice Business or not reasonably designated as
finished goods inventories for the Foodservice Business), which percentage of
units shall be calculated in accordance with the procedures set forth in EXHIBIT
10.1-FI-1, (v) all of the finished goods inventories packaged as finished goods
inventories for the Foodservice Business or designated as finished goods
inventories for the Foodservice Business in the Books and Records of the
Companies, provided such finished goods inventories are sourced from a
third-party manufacturer (whether such finished goods inventory is physically
present at a Facility or in transit from the third-party manufacturer) and (vi)
the percentage of units of finished goods inventory (which are not designated
solely as finished goods inventories for the Foodservice Business) for each of
the products set forth in EXHIBIT 10.1-FI-2, which percentage of units shall be
calculated in accordance with the procedures set forth in EXHIBIT 10.1-FI-2,
provided such products are sourced from a third-party manufacturer (whether such
finished goods inventory is physically present at a Facility or in transit from
the third-party manufacturer).
"FORMER PROPERTIES" shall mean all plants, offices, manufacturing
facilities, stores, warehouses, administration buildings and all real property
and related facilities owned, leased or operated by the Companies or any of
their respective predecessors prior to the Execution Date, but excluding the
Facilities; PROVIDED, HOWEVER, when this term is used in SECTION 2.17 hereof, it
shall only relate to all plants, offices, manufacturing facilities, stores,
warehouses, administration buildings and all real property and related
facilities owned, leased or operated by AHCGC prior to the Execution Date, but
excluding the Facilities; PROVIDED FURTHER, when this term is used in SECTION
4.16 hereof, it shall only relate to all plants, offices, manufacturing
facilities, stores, warehouses, administration buildings and all real property
and related facilities owned, leased or operated by Seller or any of its
predecessors, but excluding the Facilities.
"GAAP" shall mean United States generally accepted accounting
principles and practices as in effect from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any Canadian, United States
federal, state, provincial, municipal, or local or any foreign government, any
governmental or quasi-governmental regulatory or administrative authority,
agency or commission or any court, tribunal or judicial body.
"GOVERNMENTAL ORDER" shall mean any action, order, writ, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"HAZARDOUS SUBSTANCES" means all pollutants, contaminants, chemicals,
wastes, and any carcinogenic, ignitable, corrosive, reactive, toxic or otherwise
hazardous substances or
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materials (whether solids, liquids or gases) subject to regulation, control or
remediation under Environmental Laws or otherwise. By way of example only, the
term Hazardous Substances includes petroleum, flammable, explosive and
radioactive materials, PCBs, pesticides, herbicides, asbestos or
asbestos-containing materials, sludge, slag, acids, metals, solvents and waste
waters.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean all patents, registered and
unregistered copyrights, registered and unregistered trademarks and service
marks, tradenames, all applications or registrations for any of the foregoing,
and trade names, brandmarks, brand names, trade dress, logos, Internet domain
names, trade secrets, know-how, show-how, third-party licenses, data, data paths
or databases, software applications, HTML pages, file structures, artwork,
drawings, illustrations, photographs, videos, slogans and related information
and documentation and any similar type of proprietary intellectual property or
technology right.
"INVENTORY" shall mean (a) all of the Companies' inventories within the
Facilities or wherever otherwise located held for resale to the Companies'
customers or reflected as inventory on the Final Closing Date Balance Sheet and
(b) all of the raw materials, work in process, spare parts, finished products,
wrapping, supply and packaging items and similar items of the Companies in the
Facilities or wherever otherwise located.
"KEY FACILITIES" shall mean (i) the facility and associated real and
personal property commonly know as 000 Xxxxx Xxxxxx in Monaca, Pennsylvania,
(ii) the facility and associated real and personal property commonly known as
1115 West Fifth Avenue/519 Xxxxxx Avenue in Lancaster, Ohio and (iii) the
facility and associated real and personal property commonly known as 0000 Xxxx
Xxxx Xxxxxx in Lancaster, Ohio.
"KNOWLEDGE" shall mean (i) with respect to Purchaser, the actual
knowledge of the executive officers of Purchaser and (ii) with respect to
Seller, the actual knowledge of persons listed on EXHIBIT 10.1-K, as to those
matters subject to the representation indicated for such persons on EXHIBIT
10.1-K (it being agreed that the phrase "general knowledge" on such exhibit
means such persons knowledge shall be relevant to all representations and
warranties qualified by "knowledge").
"LAW" shall mean any statute, law, ordinance, regulation, decision or
rule of any Governmental Authority, whether foreign, federal, state, provincial,
municipal, local or otherwise.
"LIABILITIES" shall mean, any and all direct or indirect liability,
indebtedness, obligation, commitment, expense, loss, claim, damages, deficiency,
guaranty or endorsement of or by any Person of any type, whether accrued,
absolute, contingent, matured, unmatured, liquidated, unliquidated, known or
unknown or otherwise, including Tax liabilities, liabilities in respect of
products and liabilities arising under any Environmental Law.
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"LICENSE AGREEMENT" shall mean the License Agreement entered into by
and among Rubbermaid Consumer Products LLC and Newco substantially in the form
attached hereto as EXHIBIT 10.1-L.
"MATERIAL ADVERSE CHANGE" shall mean any change, circumstance or event
that, individually or in the aggregate with all other changes, circumstance or
events, has had or is reasonably likely to have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect (a) on
the business, properties, financial condition, assets, liabilities or results of
operations of (i) the Companies, taken as a whole, or (ii) the Business, taken
as a whole, or (b) on the ability of Parent or the Companies to consummate the
transactions contemplated by this Agreement in a timely manner, other than any
material adverse effect (x) resulting from conditions or circumstances generally
affecting the glass tableware and specialty glassware industries but only to the
extent the Companies or the Business are affected in a manner similar to such
other industry participants or (y) resulting from loss of business existing as
of the Execution Date with existing customers which loss is as a direct result
of the identity of Purchaser as the acquiror of the Business; PROVIDED, HOWEVER,
that solely for purposes of SECTION 2.9(a) hereof, the decline in the operating
performance of the Business during the period from the Execution Date to
December 31, 2001 which has been reflected in the Quarterly Period Financial
Statements provided to Purchaser prior to the date hereof and in the fourth
quarter 2001 forecast provided to Purchaser on December 17, 2001 in Lancaster,
Ohio, shall not constitute a Material Adverse Effect, except that the limitation
set forth in this proviso shall not in any manner limit Purchaser's rights under
SECTION 2.9(a) of this Agreement with respect to continued or similar or other
declines in operating performance after December 31, 2001 (including its right
to assert the existence of a Material Adverse Effect) or any other rights of
Purchaser under this Agreement (including those under SECTION 7.2(l)) or those
of any third party.
"MATERIAL AHCGC PERMIT" means any Permit as to which the loss or
absence of such Permit or an Adverse Event would be reasonably likely (i) to
materially and adversely affect or limit the ownership, use or operation as
presently conducted of (I) any AHCGC Facility or material portion thereof or
(II) any Asset which is material to the operation of the business of AHCGC or
(III) or any material aspect of the Business or (ii) to have a material adverse
effect on AHCGC or (iii) to result in a fine in excess of $10,000 or (iv) to
result in any criminal liability.
"MATERIAL PERMIT" means any Permit as to which the loss or absence of
such Permit or an Adverse Event would be reasonably likely (i) to materially and
adversely affect or limit the ownership, use or operation as presently conducted
of (I) any Key Facility or material portion thereof, (II) any Asset which is
material to the operation of the Business or (III) any material aspect of the
Business or (ii) to have a Material Adverse Effect or (iii) to result in a fine
in excess of $10,000 or (iv) to result in any criminal liability.
"MOLD" shall mean the mold equipment set forth on EXHIBIT 10.1-M of
this Agreement.
"NEW GROUP" shall mean Newco, AHCGC and the Canadian Assets and
Canadian Liabilities.
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"1995 RESTRUCTURING" shall mean the transfer of certain assets and
liabilities of Seller to AHCGC pursuant to the 1995 Transfer Agreement and the
other agreements associated therewith.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice.
"PERMITS" shall mean all permits, authorizations, approvals,
registrations, licenses or certificates granted by or obtained from any
Governmental Authority.
"PERMITTED ENCUMBRANCES" shall mean: (a) Encumbrances for Taxes,
assessments or governmental charges or levies on property not yet due and
delinquent or the validity of which are being contested in good faith by
appropriate proceedings or (b) Encumbrances consisting of mechanics', carriers',
workmens', repairmens' and other like Encumbrances arising or incurred in the
Ordinary Course of Business, (c) any interest of lessors reflected on UCC
financing statements filed in connection with equipment leases entered into in
the Ordinary Course of Business, or (d) Encumbrances consisting of zoning or
planning restrictions, easements, permits and other restrictions or limitations
of record on the use of real property or title thereto which do not individually
or in the aggregate materially detract from the occupancy, marketability or
value of the subject Asset, or materially impair the use of such subject Asset
by the Companies in the operation of the Business as presently conducted. No
Encumbrances in the nature of a judgment lien, mortgage, deed of trust or UCC
Financing Statement (other than those relating to Encumbrances described in
subpart (c) above) shall be a Permitted Encumbrance.
"PERSON" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization, joint venture, limited
liability company or other entity.
"POST-CLOSING TAX PERIOD" shall mean any Tax Period beginning after the
Closing Date and that portion of any Straddle Period beginning after the Closing
Date.
"PRE-CLOSING TAX PERIOD" shall mean any Tax Period ending on or before
the Closing Date and that portion of any Straddle Period ending on the Closing
Date.
"PRESENTLY CONDUCTED" shall mean the Business as then conducted or the
Business as conducted during, but without reference to any specific point in
time, the twelve (12) month period prior to Closing.
"RAILROAD AGREEMENT" shall mean the Service Agreement between Indiana
and Ohio Central Railroad, Inc. and Anchor Hocking Corporation, effective April
1994 (including all amendments, extensions, renewals and replacements thereof).
"REGULATION" shall mean the Treasury Regulations (including temporary
regulations) promulgated by the United States Department of Treasury with
respect to the Code or other federal Tax statutes.
"REGULATION S-X" shall mean Regulation S-X of the Securities and
Exchange Commission, as amended from to time.
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"REPRESENTATIVES" shall mean any officer, director, member,
shareholder, principal, attorney, agent, employee, banker, accountant,
consultant or other representative.
"SALARIED EMPLOYEE" shall mean each Employee who is paid on a salaried
basis.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SELLER BANK ACCOUNT" shall mean one or more bank accounts to be
designated by Seller in a written notice to Purchaser at least two (2) Business
Days before the Closing.
"SELLER-RETAINED LIABILITIES" shall mean any Liabilities arising from
or relating to (i) any Former Properties, (ii) any assets, products, employees
or operations of (A) any business other than the manufacturing, sale or
distribution of consumer and specialty glass products at the Facilities or (B)
any facilities, businesses or entities previously divested, sold or otherwise
discontinued by the Companies or their predecessors, (iii) any waste materials,
including but not limited to any waste water, Hazardous Substances or any
product that was off-specification, damaged or otherwise unsold, that were
generated or stored at and transported from any of the Facilities or Former
Properties to any offsite location at any time on or before the Closing Date
(but excluding, for the avoidance of doubt, any release, discharge or migration
of Hazardous Substances subject to SECTION 8.2(a)(viii)), (iv) Parent's Welfare
Plans, Parent's Hourly and Salaried Plans, Parent's 401(k) Plan or Parent's
Retiree Plan or (v) any of the Contracts set forth in SECTION 4.16(b) of the
Disclosure Schedule or the Foodservice Contracts; PROVIDED that notwithstanding
clause (ii) of this definition, Seller-Retained Liabilities shall not include
Liabilities for product liability claims arising out of post-Closing occurrences
concerning machine-made soda lime or borosilicate bakeware or machine-made soda
lime glassware (excluding, for the avoidance of doubt, handmade or lead crystal
products) which (i) was manufactured at a Former Property owned or previously
owned by Seller or any of its Subsidiaries or predecessors and (ii) was not sold
in the Foodservice Channel.
"STRADDLE PERIOD" shall mean any Taxable Period that includes (but does
not end on) the Closing Date.
"SUBSIDIARIES" and "SUBSIDIARY" shall mean any and all corporations,
partnerships, limited liability companies and other entities with respect to
which Seller, AHCGC or Newco, directly or indirectly, own securities having the
power to elect a majority of the board of directors or similar body governing
the affairs of such entity.
"TARGET NET WORKING CAPITAL" shall mean the amount specified under the
column "Target Amounts" in the table in Section D of SCHEDULE 1.3(b) hereof
corresponding to the "Closing Period" on said schedule in which the Closing Date
occurs.
"TAX OR TAXES" shall mean, with respect to any Person, all taxes,
assessments, charges, duties, fees, levies, imports or other governmental
charges, including any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, stamp, occupation, customs duties, goods
and services, capital stock, capital, business, franchise, profits, withholding,
social security (including any social security charge or premium), unemployment,
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real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum or estimated tax imposed by a Taxing
Authority, including any interest, penalty, or addition thereto, whether
disputed or not, for which such Person may be liable (including any such tax
related to any other Person or entity for which such Person is liable, by
contract, as transferee or successor, by law (including as a result of the
application of Regulation Section 1.1502-6) or otherwise).
"TAX AUTHORITY" and "TAXING AUTHORITY" shall mean with respect to any
Tax, the government entity or "quasi governmental entity," or political
subdivision thereof that imposes such Tax, and the agency (if any) charged with
the collection of such Taxes for such entity or subdivision.
"TAX PERIOD AND TAXABLE PERIOD" shall mean any period prescribed by any
Taxing Authority for which a Tax Return is required to be filed or a Tax is
required to be paid.
"TAX RETURN" shall mean any return (including information return),
report, notice, form, declaration, claim for refund, estimate, election,
information statement or other document relating to any Tax, including any
schedule or attachment thereto, and including any amendment thereof filed or to
be filed with any Tax Authority.
"TRADEMARK LICENSE AGREEMENTS" shall mean License Agreement dated May
1, 1999 between Coca-Cola Company and Anchor Hocking Consumer Glass Division, as
amended pursuant to an addendum dated January 4, 2001 (including all amendments,
extensions, renewals or replacements thereof) and the License Agreement dated
November 9, 1999 between Disney Enterprises, Inc. and Anchor Hocking Corporation
(including all amendments, extensions, renewals or replacements thereof).
"TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT" or "TRANSACTIONS
CONTEMPLATED BY THE AGREEMENT" shall include the Asset Transfers, the
transactions contemplated by SECTION 4.33 hereof and the other matters
contemplated by Ancillary Agreements.
"TRANSITION EMPLOYEE" shall mean those Salaried Employees who are
designated by Purchaser as Transition Employees pursuant to the provisions of
SECTION 5.10(a).
"TRANSITION SERVICES AGREEMENT" shall mean that Transition Services
Agreement entered into by and among Parent and Purchaser substantially in the
form attached hereto as EXHIBIT 10.1-T.
"WAREHOUSE AGREEMENT" shall mean the Lease Agreement between Beaver
Valley Industrial Park and Anchor Hocking Glass Corporation, effective April 11,
1996 (including all amendments, extensions, renewals and replacements thereof).
SECTION 10.2 OTHER DEFINED TERMS. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
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Term Section
---- -------
Accounting Expert 1.4
Accounting Principles 1.4
Acquired Person 4.14
Adjusted Division Final Stub Period
Pro Forma Statements 4.18(k)
Adjusted Division 2000 and 1999 Pro
Forma Statements 4.18(i)
Adjusted Division 2001 Pro Forma
Statements 4.18(j)
Adjusted Division 2001 Quarterly Period
Pro Forma Statements 4.18(l)
AH Products 4.14
Antitrust Laws 4.4
Appraisal 6.1
Xxxxxx Xxxxxxxx 4.19
Asset Drop-Down Documents 4.26
Asset Drop-Down Transfers Recitals
Asset Transfer Documents 4.16
Asset Transfer Transactions Recitals
Assumed Foodservice Liabilities 4.33(c)
Assumed Salaried Employees Liabilities 4.36
Assumed Seller Liabilities 4.16
Audited Financial Statements 2.7
Balance Sheet 2.7
Balance Sheet Date 2.7
Business Internet Content 4.9
Canadian Asset Acquisition Recitals
Canadian Purchase Price 1.4
Canadian Seller Recitals
Claim Notice 8.2
Claiming Employee 8.2
Claims 8.2
Closing 1.5
Closing Date 1.5
Closing Date Balance Sheet 1.4
Closing Net Working Capital 1.4
Closing Payment 1.2
COBRA 5.5
Commitment 3.6
Commitment Cure Period 9.1
Company or Companies Preamble
Companies' Software 2.16
Company Benefit Plans 2.14
Company Pension Plan 2.14
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Company Properties 2.15
Compensation Claims 8.2
Competing Business 4.14
Confidential Information 4.24
Coordinator 4.2
Damages 8.2
Desktop Software 2.16
Direct Claim 8.2
Disclosure Schedule 2.3
Elections 6.1
ERISA Affiliate 2.14
Estimated Closing Net Working Capital 1.3
Estimated Working Capital Adjustment Amount 1.3
Excluded Seller Assets 4.16
Excluded Seller Liabilities 4.16
Exempt Facilities Exhibit 4.14(d)(i)
Evaluation Period 9.1
Final Closing Date Balance Sheet 1.4
Final Closing Net Working Capital 1.4
Final Stub Period Financial Statements 2.7
Financing 3.6
First Party 8.4
Foodservice Annual Pro Forma Statements 4.18(f)
Foodservice Assets 4.33(a)
Foodservice Assets Transfer Documents 4.33
Foodservice Contracts 4.33(a)
Foodservice Employees 4.33(a)
Foodservice Final Stub Period Pro Forma
Statements 4.18(g)
Foodservice IP Assets 4.33(a)
Foodservice Molds 4.33(a)
Foodservice 2001 Quarterly Period Pro
Forma Statements 4.18(h)
Hourly Pension Assets 5.2
Hourly Pension Liabilities 5.2
Indemnified Party 8.2
Indemnifying Party 8.2
Initial Financial Statements 2.7
Initial Transfers Recitals
Interim Financial Statements 2.7
Leased Properties 2.15
Licensed Software 2.16
Limitation of Indemnification Notice 4.29
Material Contracts 2.10
Material Contract Notice 4.30
Monaca Furnace Expenses 4.35
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Multiemployer Plan 2.14
Net Working Capital 1.3
New Hourly and Salaried Plans 5.2
New Hourly Plan 5.2
New Salaried Plan 5.2
New 401(k) Plan 5.3
Newco Preamble
1995 Transfer Agreement 4.23
Non-Compete Period 4.14
Objection Period 1.4
Off The Shelf Software 2.16
Operating Company Preamble
Original Purchase Agreement Recitals
Outside Assets 2.18
Owned Properties 2.15
Owned Software 2.16
Packaging 4.8
Parent Preamble
Parent's Hourly and Salaried Plans 5.2
Parent's Hourly Plan 5.2
Parent's IP 4.8
Parent Liabilities Notice 4.29
Parent's Retiree Plan 5.4
Parent's Salaried Plan 5.2
Parent's Welfare Plans 5.5
Parent's 401(k) Plan 5.3
PBGC 2.14
Participate 4.14
Pre-closing Material Contract 4.30
Property Taxes 8.4
Proposed Acquisition 4.15
Purchase Price 1.2
Purchaser Preamble
Purchaser Indemnified Parties 8.2
Purchaser Required Consent Notice 4.30
Purchaser's Welfare Plans 5.7
Referenced Reports 10.1
Retention Recitals
Quarterly Period Financial Statements 4.18
Reimbursement 8.2
Required Consent 7.2
Salaried Pension Assets 5.2
Salaried Pension Liabilities 5.2
Satisfaction Date 1.5
Second Party 8.4
SEC 4.19
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SEC Filings 4.19
Section 338 Acts 6.1
Section 338 Allocation 6.1
Section 338 Forms 6.1
Section 4.33(b) Assets 4.33(b)
Seller Preamble
Seller Assets 4.16
Seller Indemnified Parties 8.2
Shared Assets 2.18
Shares Recitals
Share Purchase Recitals
Special Procedures Report 4.18(f)
Specified Seller Assets 4.16
Statement Notice 9.1
Statement of Objections 1.4
Straddle Period Tax Offset 8.4
Subsequent Financial Statements 2.7
Survey 4.7
Tax Benefit 8.2
Tax Claim 8.4
Third Party Claim 8.2
Transfer Date 5.2
Transfer Taxes 6.7
Transition Period 5.10
Untransferred Assets 4.26
Using Person 4.14
Western Hemisphere 4.14
2001 Audited Financial Statements 2.7
2001 Capital Budget Plan 2.23
2002 Capital Budget Plan 4.27
SECTION 10.3 OTHER INTERPRETIVE PROVISIONS. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation",
such that the matters or terms that follow are by way of example and not by way
of limitation. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.1 EXPENSES. Except as otherwise specified in this Agreement,
all out-of-pocket costs and expenses, including fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement, the Ancillary Agreements
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and the transactions contemplated by this Agreement and thereby shall be paid by
Seller, Parent or Purchaser, as the case may be, incurring such costs and
expenses, whether or not the Closing shall have occurred, it being understood
that Seller and/or Parent will pay all such costs and expenses incurred by the
Companies prior to the Closing Date.
SECTION 11.2 NOTICES. Any notices or other communications required or
permitted under, or otherwise in connection with this Agreement shall be in
writing and shall only be effective if deemed to have been duly given when
delivered in person or upon confirmation of receipt when transmitted by
facsimile transmission (but only if followed by transmittal by national
overnight courier or hand delivery on the next Business Day) or on receipt after
dispatch by registered or certified mail, postage prepaid, addressed, or on the
next Business Day if transmitted by national overnight courier, in each case as
follows:
(a) if to Seller or Parent:
Xxxxxx Rubbermaid Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxxx
Vice President - General Counsel
with copies to:
Xxxxxx Rubbermaid Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx; and
Vice President - Corporate Development
Xxxxxx Xxxxxx & Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx, Xx.
(b) if to Purchaser:
Libbey Inc.
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Director of Corporate
Development
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with copies to:
Libbey Inc.
000 Xxxxxxx Xxxxxx
XX Xxx 00000
Xxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Xxxxxx X. Xxxxx, Vice President and General Counsel
Xxxxxx & Xxxxxxx
000 X. Xxxxxx Xxxxx
Sears Tower, Suite 5800
Xxxxxxx, Xxxxxxxx 00000
Telecopy:(000) 000-0000
Attention: Xxxx X. Xxxxxxxx
or such other address as the person to whom notice is to be given has furnished
in writing to the other parties. A notice of change in address shall not be
deemed to have been given until received by the addressee.
SECTION 11.3 PUBLIC ANNOUNCEMENTS. No party to this Agreement shall
make, or cause to be made, any press release or public announcement in respect
of this Agreement or the transactions contemplated by this Agreement without the
prior written consent of the other parties, and the parties shall cooperate as
to the timing and contents of any such press release or public announcement;
PROVIDED, HOWEVER, that a party may, without the prior consent of the other
parties, make such press release or public announcement as may be required by
Law or any listing agreement with a securities exchange if it has used all
commercially reasonable efforts to consult with the other parties and to obtain
such parties' consent but has been unable to do so in a timely manner. SECTION
11.4 HEADINGS; TABLE OF CONTENTS. The descriptive headings contained in this
Agreement and table of contents of this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
SECTION 11.5 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the greatest extent possible.
SECTION 11.6 ENTIRE AGREEMENT. This Agreement (including all schedules,
exhibits, documents, and materials hereunder referred to, as amended) and the
Ancillary Agreements constitute the entire agreement of the parties hereto with
respect to the subject
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matter hereof and supersede all prior agreements and undertakings, both written
and oral, among the parties hereto with respect to the subject matter hereof.
SECTION 11.7 ASSIGNMENT. This Agreement may not be assigned by
operation of law or otherwise by Seller, Operating Company, Parent, Newco or
AHCGC without the prior written consent of Purchaser (which consent may be
granted or withheld in the sole discretion of Purchaser). This Agreement may not
be assigned by operation of law or otherwise by Purchaser without the prior
written consent of Seller (which consent may be granted or withheld in the sole
discretion of the other parties hereto), EXCEPT, Purchaser may, without prior
consent of any other party hereto, transfer or assign by operation of law or
otherwise this Agreement to any Affiliate or subsidiary of Purchaser, provided
that in the event Purchaser assigns all or a portion of its rights and
obligations under this Agreement, Purchaser hereby unconditionally and
irrevocably guarantees to the other parties hereto the prompt and full discharge
by such subsidiary or Affiliate of all of Purchaser's obligations under this
Agreement in accordance with the terms hereof. Purchaser also hereby agrees
that, if such subsidiary or Affiliate fails to perform and discharge promptly
all such obligations and liabilities in accordance with such terms, Purchaser
will, forthwith, perform and discharge the same. The unconditional obligation of
Purchaser hereunder will not be affected, impaired or released by any
termination or expiration hereof or by any extension, waiver, amendment or other
circumstance whatsoever that would release a guarantor. Any attempted assignment
in violation of this SECTION 11.7 shall be null and void.
SECTION 11.8 NO THIRD PARTY BENEFICIARIES. Except as provided in
ARTICLE VIII as to indemnified parties, this Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their permitted assigns
and nothing herein, express or implied, is intended to or shall confer upon any
other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
SECTION 11.9 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 11.10 WAIVER. Any party to this Agreement may (a) extend the
time for the performance of any of the obligations or other acts of any other
party, (b) waive any inaccuracies in the representations and warranties of
another party contained herein or in any document delivered by another party
pursuant hereto or (c) waive compliance with any of the agreements or conditions
of another party contained herein. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition, of this Agreement. The failure of
any party to assert any of its rights hereunder shall not constitute a waiver of
any of such rights.
SECTION 11.11 GOVERNING LAW; JURISDICTION. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Illinois. All actions, proceedings, claims, counterclaims or cross-complaints in
any action or other proceeding brought by any party hereto against any other
party or parties hereto with respect to any matter arising out of, or in any way
connected with or related to, this Agreement or any portion thereof, whether
based upon contractual, statutory, tortious or other theories of liability
arising out of or relating to this
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Agreement, shall be heard and determined in any federal court sitting in
Chicago, Illinois, unless there is no federal court jurisdiction, in which case
the action or proceeding shall be heard and determined in any state court
sitting in Chicago, Illinois, and the parties hereto hereby irrevocably submit
to the jurisdiction of such courts in any such action or proceeding, IRREVOCABLY
AGREE THAT ANY SUCH COURT IS A PROPER VENUE FOR ANY SUCH ACTION, and irrevocably
waive the defense of an inconvenient forum. Each party irrevocably consents to
the service of any and all process in any such action or proceeding by the
mailing of copies of such process to such party at its address specified in
SECTION 11.2. Nothing in this SECTION 11.11 shall affect the right of any party
hereto to serve legal process in any other manner permitted by law. The consents
to jurisdiction set forth in this Section shall not constitute general consents
to service of process in the State of Illinois and shall have no effect for any
purpose except as provided in this SECTION 11.11 and shall not be deemed to
confer rights on any person other than the parties hereto.
SECTION 11.12 WAIVER OF JURY TRIAL. The parties hereto hereby
irrevocably waive their respective rights to trial by jury of any cause of
action, claim, counterclaim or cross-complaint in any action or other proceeding
brought by any party hereto against any other party or parties hereto with
respect to any matter arising out of, or in any way connected with or related
to, this Agreement or any portion thereof, whether based upon contractual,
statutory, tortious or other theories of liability. Each party represents that
it has consulted with counsel regarding the meaning and effect of the foregoing
waiver of its right to a jury trial.
SECTION 11.13 DISCLOSURE SCHEDULE. Nothing in the Disclosure Schedule
shall be deemed adequate to disclose an exception to a representation or
warranty (referenced by subsection) made herein unless such exception is
identified in the applicable Section of the Disclosure Schedule. Any
information, item or other disclosure set forth in any section, of the
Disclosure Schedule shall be deemed to have been set forth in all other
applicable portions thereof pertaining to ARTICLE II, if the relevance of such
disclosure to such other portion is reasonably apparent from the facts specified
in such disclosure. Except as provided in SECTION 8.3(G) hereof, the right to
indemnification, payment of Damages or other remedy based on any of the
representations, warranties, covenants and agreements herein will not be
affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation, and the waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or agreement, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants and agreements.
SECTION 11.14 SPECIFIC PERFORMANCE. Each of the parties acknowledges
and agrees that the other party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
agrees that the other party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court having jurisdiction over the parties and the matter (subject to the
provisions set forth in
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SECTION 11.11 above), in addition to any other remedy to which they may be
entitled, at law or in equity.
SECTION 11.15 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 11.16 CURRENCY. Except for values expressly provided otherwise,
all currency amounts set forth herein are United States Dollars.
SECTION 11.17 EFFECT ON REPRESENTATION AND WARRANTIES AND DISCLOSURE
SCHEDULES. The representations and warranties of the parties as modified by this
Agreement, including modifications to the associated provisions of the
Disclosure Schedule, shall be deemed to have been made as of the Execution Date
as if they had been set forth in the Original Purchase Agreement on the
Execution Date, in lieu of the representations and warranties made under the
Original Purchase Agreement on such date.
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IN WITNESS WHEREOF, Seller, Parent, Operating Company, Seller and
Purchaser have caused this Agreement to be executed as of the date first written
above by their respective officers thereunto duly authorized.
XXXXXX HOLDINGS DELAWARE
(f/k/a Anchor Hocking Corporation)
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: VP Corporate Development
XXXXXX RUBBERMAID INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: VP Corporate Development
XXXXXX OPERATING COMPANY
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: VP Corporate Development
ANCHOR HOCKING INC.
(f/k/a Menagerie Corporation)
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: VP Corporate Development
LIBBEY INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: VP General Counsel
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