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EXHIBIT 10.1
TRANSITIONAL SERVICES AGREEMENT
THIS TRANSITIONAL SERVICES AGREEMENT (the "Agreement") is made this
1st day of November, 1996, between AMERICAN HOME PRODUCTS CORPORATION, a
Delaware corporation having its principal office at Five Giralda Farms,
Madison, New Jersey 07940 ("AHP") and INTERNATIONAL HOME FOODS, INC. ("IHF"), a
Delaware corporation, having a place of business at Five Xxxxxxx Xxxxx,
Xxxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
WHEREAS, AHP, AHP Subsidiary Holding Corporation, IHF (formerly
American Home Food Products, Inc.), and AHFP Holding Corporation, and AHFP
Acquisition Corporation have entered into an Agreement of Sale and Plan of
Merger, dated as of September 5, 1996 (the "Purchase Agreement") pursuant to
which AHP disposed of a controlling interest in AHP's food business in a merger
transaction.
WHEREAS, as contemplated by the Purchase Agreement, AHP will provide
certain transitional services to IHF following the Closing on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained and intending to be legally bound thereby, AHP
and IHF agree as follows:
1. Definitions
Any term used herein which is not defined herein, but is defined in
the Purchase Agreement, shall have the meaning ascribed to it in the Purchase
Agreement.
2. Fees
In consideration of the services to be provided herein, IHF agrees to
pay AHP the fees set forth in Sections 3 and 4 (the "N" Fees). AHP shall
invoice IHF for such fees, as well as any other out-of-pocket expenses
reasonably incurred in connection with the Transitional Services (as defined
below), as and when such charges are incurred or, unless otherwise indicated in
Sections 3 and 4, on a monthly basis. IHF shall make payment in full within
thirty (30) days of receipt of each such invoice setting forth in reasonable
detail the nature of the Fees charged.
3. Transitional Services
Until six months from the date hereof (or earlier as provided
below), AHP shall provide the services described below and in
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Section 4 (the "Transitional Services") for the Fees set forth below:
(a) Services Related to Intellectual Property
To the extent requested in writing by IHF, AHP shall provide
to IHF and its subsidiaries services related to the
establishment and maintenance of their intellectual property
rights to the same extent provided before the Closing Date.
The Fee for these Services will be AHP's cost, including
allocable overhead and AHP's out-of-pocket expenses.
(b) Media Buying Services
To the extent requested by IHF, AHP and its Affiliates shall
provide to IHF and its subsidiaries services related to media
purchasing of both the electronic and print media. The Fees
for these services will be the pre-Closing commission rates
charged by AHP or its Affiliates.
(c) Administration
AHP shall for a period of up to 90 days from the date hereof
assist in the administration of IHF's Welfare Plans and will
receive compensation for services provided and reimbursement
for any actual out-of-pocket costs associated with the
administration and maintenance of such plans (all calculated
in accordance with AHP's past practices). In connection with
AHP's assisting in the administration of IHF's Welfare Plans,
it is understood and agreed by the parties that: (i) AHP is
not a fiduciary, as defined in Section 3(31) of the ERISA, and
(ii) IHF is not a participating employer in any welfare
plans maintained by AHP after the Closing.
(d) Fleet Services
For six months or such period as may be agreeable to the
parties, AHP will furnish vehicle fleet administrative
services for the benefit of IHF and its Affiliates under AHP's
current contract with Four Wheels Co., Inc. in the same manner
as such services were provided prior to the Closing. AHP will
endeavor to cause all leases and other rights relating to
vehicles utilized by IHF prior to the Closing to be
transferred to IHF's account at the same rates as AHP's
current agreement with Four Wheels Co., Inc. plus applicable
transfer charges. IHF will be fully responsible for payment of
any and all lease charges,
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related expenses for operating such vehicles and for any
damages to or caused by the operation of such vehicles.
4. Facilities and Related Services
(a) AHP shall provide to IHF and its Affiliates the use of the
office space (and furniture and equipment related thereto) currently used and
occupied by IHF's predecessor at Five Giralda Farms, Madison, New Jersey (the
"Headquarters Facilities"), and services incidental thereto, including
telephone and other telecommunication, mail, courier, shipping, receiving,
security, utilities, maintenance, and janitorial services, all of the foregoing
to the extent provided before the Closing Date. These Facilities and services
will be provided for a total of $75,000 per month. In addition, IHF personnel
shall have access to AHP's company store, parking areas, cafeteria facilities,
fitness center and other services to the same extent and on the same basis as
before the Closing Date.
(b) Should IHF hold over in possession after expiration of six
months from the date hereof, the charge for such holdover period shall be
$112,500 per month.
(c) All Fees payable under this Section 4 shall be proportionately
adjusted for any partial month in which IHF occupies the Headquarters
Facilities.
(d) IHF shall use the Headquarters Facilities for general office
and business-related purposes.
(e) IHF shall not make any alterations to the Headquarters
Facilities without AHP's prior written consent, which shall not be unreasonably
withheld.
(f) AHP and its agents shall have the right to enter the
Headquarters Facilities at all reasonable times to make any repairs and
replacements as AHP may deem necessary and reasonably desirable for the
maintenance of the Headquarters Facilities or the Building.
5. Taxes
IHF shall reimburse AHP on a current basis for 100% of taxes (other
than taxes on or in respect of income) or other charges which AHP becomes
obligated to pay to any Governmental Authority arising out of the performance
of the Transitional Services and which are not included in the Fees otherwise
payable by IHF hereunder.
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6. Standard of Performance
In all material respects, AHP will perform the Transitional Services
in a competent and worklike manner and, except to the extent that IHF requests
and AHP agrees to a deviation from the standard practices and procedures that
AHP uses in its own businesses, in accordance with AHP's standard practices and
procedures. Notwithstanding the foregoing, AHP and its Affiliates and their
respective employees and agents shall have no liability hereunder to IHF or its
Affiliates for any Costs arising out of or relating to this Agreement and the
Transitional Services provided hereunder unless resulting from AHP's gross
negligence or willful misconduct.
7. Termination
(a) The Transitional Services shall terminate on the date provided
for termination of each Transitional Service as set forth in Sections 3 and 4,
provided, however, that, unless this Agreement is terminated as provided in
Section 7(b) or 7(c), all or any portion of the Transitional Services shall
terminate as follows:
(i) IHF may terminate all or any portion of any of the
Transitional Services upon twenty (20) days written notice;
and
(ii) Upon termination pursuant to Section 7(a) (i) of this
Agreement, the parties shall negotiate an appropriate pro rata
reduction of the Fees charged with respect to such
Transitional Services.
(b) If either party hereto becomes bankrupt or insolvent, or
makes an assignment for the benefit of creditors, or if a receiver is appointed
to take charge of its property, the other may immediately terminate this
Agreement by written notice. Any such termination shall be without prejudice to
accrued rights of the terminating party, and to other rights and remedies for
default.
(c) Either party may terminate this Agreement on thirty (30) days
written notice to the other if the other is in breach of this Agreement in any
material respect unless the breaching party, within such thirty (30) day
period, remedies such breach, or, in the case of a breach which cannot
reasonably be remedied within such period, initiates action which can
reasonably be expected to result in curing such breach within a reasonable
period of time.
8. Indemnification
(a) IHF shall indemnify, hold harmless and defend AHP and its
respective directors, officers, employees, advisors, affiliates,
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agents and shareholders from and against any and all Costs arising out of,
based upon or resulting from AHP's performance of any Transitional Service
(other than the Transitional Services set forth in Section 4) under this
Agreement (including, with respect to Section 3(d) above, any damages to
persons or property arising out of the use of any vehicles leased by Four
Wheels Co. to or for the use of IHF), except to the extent that any such loss,
damage, liability, cost, claim or expense arises out of, is based upon or
results from AHP's gross negligence or willful misconduct in the performance of
such Transitional Service.
(b) IHF shall indemnify, defend and save AHP harmless from and
against any liability or expense including reasonable attorneys fees arising
from the acts or omissions in the use or occupancy of the Headquarters
Facilities during the term hereof or anyone in the Headquarters Facilities with
IHF's permission, or from any breach of this Section 4 by IHF. IHF shall
reimburse AHP for all expense, damages or fines incurred by AHP, and for which
AHP has not been or will not be reimbursed by insurance, by reason of any
breach, violation or nonperformance by IHF, or its agents, servants or
employees, of any covenant or provision of this Section 4, or by reason of
damage to persons or property caused by moving property of or for IHF in or out
of the building in which the Headquarters Facilities are located (the
"Building"), or by the installation or removal of furniture, equipment or other
property of or for IHF or by reason of or arising out of the negligence or
improper conduct of IHF, or its agents, servants or employees, in the use or
occupancy of the Headquarters Facilities. IHF shall maintain, throughout the
term hereof, at its own cost and expense, general public liability insurance
against claims for personal injury, death or property damage occurring upon, in
or about the Headquarters Facilities, such insurance to afford protection to
the limit of not less than $2,000,000 in respect of personal injury or death
and damage to property in respect of any one occurrence.
(c) AHP shall indemnify, hold harmless and defend IHF and its
directors, officers, employees, advisors, affiliates, agents and shareholders
from and against any and all Costs arising out of, based upon or resulting from
AHP's gross negligence or willful misconduct in the performance of any
Transitional Service (other than the Transitional Services set forth in Section
4) under this Agreement.
9. Independent Contractors
AHP is performing and shall perform the Transitional Services under
this Agreement as an independent contractor and as such shall have and maintain
exclusive control over all its employees, agents, subcontractors and
operations. AHP shall not be, act as, purport
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to act as or be deemed to be IHF's agent, representative, employee or servant.
10. Notices
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally, mailed by
reputable overnight courier or certified mail or sent by telecopier (confirmed
thereafter by such overnight courier or certified mail) to the parties at the
following addresses or at such other addresses as shall be specified by the
parties by like notice:
If to AHP: American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Senior Executive Vice President
Telecopier Number: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxx, Xx.
Senior Vice President and General Counsel
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telecopier Number: (000) 000-0000
If to IHF: International Home Foods, Inc.
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: President
Telecopier Number: (000) 000-0000
With a copy to: Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Managing Director & Principal
Telecopier Number: (000) 000-0000
and
Xxxxxxx X. Xxxxxxx
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Telecopier Number: (000) 000-0000
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Notice so given shall (in the case of notice so given by mail) be
deemed to be given and received on the third calendar day after mailing or the
next business day if sent by a reputable overnight courier and (in the case of
notice so given by telecopier or personal delivery) on the date of actual
transmission or (as the case may be) personal delivery.
11. Miscellaneous
This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof; is not intended to confer
upon any other person any rights or remedies hereunder; and shall be governed
in all respects, including validity, interpretation and effect, by the internal
laws of the State of New York without giving effect to the principles of
conflicts of laws thereunder. This Agreement may be executed in one or more
counterparts which together shall constitute a single agreement. If any
provisions of this Agreement shall be held to be illegal, invalid or
unenforceable under any applicable law, then such contravention or invalidity
shall not invalidate the entire Agreement. Such provision shall be deemed to be
modified to the extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal, valid and enforceable, then this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed and
enforced accordingly.
12. Amendments; No Waivers
(a) This Agreement may not he amended except by an instrument in
writing signed on behalf of each of the parties hereto.
(b) Any term, provision or condition of this Agreement may be
waived in writing (or the time for performance of any of the obligations or
other acts of the parties hereto may be extended) by the party that is entitled
to the benefits thereof.
13. Successors and Assians
This Agreement may not be assigned by a party without the prior
written consent of the other parties hereto.
14. Captions
The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
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15. Force Majeure
Neither party hereto shall be liable in any manner for failure or
delay of performance of all or part of this Agreement, directly or indirectly,
owing to acts of God, governmental orders or restrictions, strikes or other
labor disturbances, riots, embargoes, power failures, telecommunication line
failures, revolutions, wars, fires, floods, or any other causes or
circumstances beyond the reasonable control of either party. The party,
however, in such delay or failure shall give prompt notice to the other party
and shall exert diligent efforts to remove the causes or circumstances of
nonperformance with all possible dispatch.
16. Administration of Agreement
AHP shall designate one of its employees to serve as chief
administrator and coordinator of the Transitional Services to be performed
under this Agreement and shall advise IHF in writing of the name, business
address, phone and fax number of that employee as promptly as possible after
the Closing.
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IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ XXXX X. XXXXXXXXX
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Xxxx X. Xxxxxxxxx
Vice President-Finance
INTERNATIONAL HOME FOODS, INC.
By: /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
President
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