[CONFORMED COPY]
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PURCHASE AGREEMENT
by and between
COLGATE-PALMOLIVE COMPANY,
and
CANDLE CORPORATION OF AMERICA
dated as of
September 30, 1997
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PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
Number
ARTICLE I CERTAIN DEFINITIONS 1
ARTICLE II CLOSING 11
2.1 Procedures 11
2.2 Closing of the Purchase 12
2.3 Time and Place of Closing 20
2.4 Deposit of Funds 20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER 21
3.1 Authorization; No Conflicts; etc. 21
3.2 Financial Information 23
3.3 Title to Assets; Sufficiency of Assets 23
3.4 Litigation; Orders 25
3.5 Intellectual Property 25
3.6 Licenses, Approvals, Other Authorizations,
Consents, Reports, etc. 26
3.7 Labor Matters 27
3.8 Compliance with Laws 27
3.9 Compliance with Contracts 28
3.10 Employee Benefit Plans 28
3.11 Brokers, Finders, etc. 31
3.12 Customers and Suppliers 31
3.13 Schedules and Exhibits 31
3.14 No Implied Representation; Disclaimer of
Warranties 32
3.15 Construction of Certain Provisions 32
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 33
4.1 Incorporation; Authorization; No
Conflicts; etc. 33
4.2 Brokers, Finders, etc. 35
4.3 Licenses, Approvals, Other Author-
izations, Consents, Reports, etc. 35
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Page
Number
4.4 Availability of Funds 35
4.5 No Outside Reliance 36
4.6 Knowledge Regarding Representations 36
4.7 Litigation; Orders 36
ARTICLE V COVENANTS OF SELLER AND BUYER 36
5.1 Investigation of Business; Access
to Properties and Records; Records
Retention; Phase II Review 36
5.2 Efforts; Obtaining Consents 41
5.3 Further Assurances 43
5.4 Conduct of Business 43
5.5 Public Announcements 46
5.6 Intercompany Accounts 46
5.7 Performance of Obligations 47
5.8 Insurance 47
5.9 Additional Covenant Regarding
Intellectual Property 48
5.10 Exclusivity 48
5.11 Transition 49
5.12 Product Returns 50
5.13 Nonassignable Contracts and Permits 51
5.14 Covenant Not to Compete 52
5.15 Non-Solicitation 53
5.16 Confidentiality 54
5.17 Inventory 55
5.18 Warehouse 55
5.19 Sales and Promotions During Last Two Months 55
5.20 Pre-Closing Costs 56
5.21 Capital Expenditure Projects 56
ARTICLE VI EMPLOYEE BENEFITS 57
6.1 Buyer's Obligations 57
6.2 Employment and Severance Agreements 57
6.3 Annual and Long-Term Incentive Plans 58
6.4 Benefit Plans 59
6.5 Miscellaneous 61
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Page
Number
ARTICLE VII CONDITIONS OF BUYER'S OBLIGATION
TO CLOSE 62
7.1 Representations, Warranties and
Covenants of Seller 63
7.2 Filings; Consents; Waiting Periods 63
7.3 No Injunction 63
7.4 Other Agreements 63
ARTICLE VIII CONDITIONS TO SELLER'S OBLIGATION
TO CLOSE 64
8.1 Representations, Warranties and
Covenants of Buyer 64
8.2 Filings; Consents; Waiting Periods 64
8.3 No Injunction 65
8.4 Resale Certificates 65
ARTICLE IX SURVIVAL; INDEMNIFICATION 65
9.1 Survival; Sole Remedy 65
9.2 Indemnification by Buyer or Seller 66
9.3 Third Party Claims 70
ARTICLE X TAX MATTERS 71
10.1 Tax Indemnification by Seller 71
10.2 Tax Indemnity and Covenant by Buyer 71
10.3 Allocation of Certain Taxes 72
10.4 Filing Responsibility 73
10.5 Refunds 74
10.6 Cooperation and Exchange of Information 75
ARTICLE XX XXXXXXXXXXX 00
11.1 Termination 79
11.2 Procedure and Effect of Termination 79
ARTICLE XII MISCELLANEOUS 80
12.1 Counterparts 80
12.2 Governing Law 80
12.3 Entire Agreement; No Third Party
Beneficiaries 81
12.4 Expenses 81
12.5 Notices 81
12.6 Successors and Assigns 83
12.7 Headings; Definitions 83
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Page
Number
12.8 Consent to Jurisdiction 83
12.9 Amendments and Waivers 84
12.10 Interpretation 84
12.11 Severability 85
12.12 No Consequential Damages 85
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SCHEDULES AND EXHIBITS
Schedule 2.2(a) Allocation of Purchase Price and
Liabilities
Schedule 2.2(b)(i) Real Property, Improvements and
Fixtures
Schedule 2.2(b)(ii) Personal Property
Schedule 3.1(b) Conflicts, Violations and
Defaults
Schedule 3.2 Financial Information
Schedule 3.3 Owned Real Property
Schedule 3.4 Litigation
Schedule 3.5 Intellectual Property
Schedule 3.6(a) Governmental Licenses and Permits
Schedule 3.6(b) Consents, Approvals and Notifications
Schedule 3.7 Labor Matters
Schedule 3.8 Environmental Matters
Schedule 3.9 Contracts
Schedule 3.10(a) Compensation Benefit Plans
Schedule 3.10(b) Benefit Plan Compliance
Schedule 3.10(c) Pension Plan Compliance
Schedule 4.3 Consents, Approvals and
Notifications
Schedule 5.1(b) Phase II Environmental Review -
Scope of Work
Schedule 5.4 Estimated Capital Expenditures
Schedule 5.11(b) Transition Services
Schedule 5.17 Description of Certain Product
Inventory
Schedule 6.2 Severance Policy
Schedule 6.4 Proposed Benefit Plans
Exhibit A Form of Assignment and License
Agreement
Exhibit B Form of Omnibus Assignment
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement"), dated as of September 30,
1997, is by and between Colgate-Palmolive Company, a Delaware corporation
("Seller"), and Candle Corporation of America, a New York corporation ("Buyer").
WHEREAS, Buyer desires to purchase and assume from Seller, and Seller
desires to cause to be sold to and assumed by Buyer, all of the assets held by
Seller as of the Closing Date set forth in Section 2.2(b) hereto and all of the
liabilities of Seller as of the Closing Date set forth in Section 2.2(d) hereto,
upon the terms and subject to the conditions set forth herein (the sale and
purchase of the Assets and the assumption of the Liabilities being referred to
herein as the "Purchase").
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
Certain Definitions
As used in this Agreement the following terms shall have the following
respective meanings:
"Action" shall mean any action, suit, arbitration, inquiry, proceeding
or investigation by or before any Governmental Authority.
"Affiliate" shall mean any natural person, and any corporation,
partnership or other entity, that directly, or
indirectly through one or more intermediaries, controls or is controlled by or
under common control with the party specified.
"Assets" shall have the meaning set forth in Section 2.2(b) hereof.
"Benefit Plans" shall have the meaning set forth in
Section 3.10(a) hereof.
"Business" shall mean the business of manufacturing and marketing
self-contained and portable cooking and heating fuels conducted as of the date
hereof by the division of Seller known as the "Institutional Products Division".
"Buyer" shall mean Candle Corporation of America, a New York
corporation.
"Buyer DC Plan" shall have the meaning set forth in
Section 6.4(b)(i) hereof.
"Buyer's Health Plans" shall have the meaning set
forth in Section 6.4(c) hereof.
"Buyer Indemnified Parties" shall have the meaning set forth in
Section 9.2(b) hereof.
"Closing" shall mean the consummation of the Purchase in accordance
with Article II hereof.
"Closing Date" shall mean the date on which the
Closing occurs.
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"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor thereto.
"Continuing Affiliate" shall mean Seller and any direct or indirect
Subsidiary of Seller.
"Covered Liabilities" shall mean any and all losses, liabilities,
claims, damages (including punitive, consequential or treble damages to the
extent available under applicable law), obligations, liens, assessments,
judgments, awards and fines (including, without limitation, those arising out of
any pending or threatened Action, including any settlement or compromise
thereof) and any reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses incurred in connection with
any pending or threatened Action).
"Current Employees" shall have the meaning set forth in Section 6.1(a)
hereof.
"Deposit" shall have the meaning set forth in Section 2.4 hereof.
"Employees" shall have the meaning set forth in Section 3.10(a)
hereof.
"Encumbrances" shall mean any lien, claim, charge, security interest,
option, mortgage, pledge or other legal or equitable encumbrance.
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"Environmental Laws" shall mean all United States federal, state or
local statutes, laws, rules, regulations or ordinances in effect and in each
case as amended as of the Closing relating to (a) pollution of the environment,
(b) a Release or threatened Release of Hazardous Materials or (c) the
manufacture, handling, storage, transport or disposal of Hazardous Materials,
including, without limitation, CERCLA; The Emergency Planning and Community
Right to Know Act of 1986; the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901 et seq.; the Clean Water Act, 33 U.S.C. Sections 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.; the Clean Air
Act, 42 U.S.C. Sections 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Sections 300f et seq.; the Atomic Energy Act, 42 U.S.C. Sections 2011 et seq.;
and the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections
136 et seq.
"Environmental Permits" shall mean all permits, approvals,
identification numbers, licenses and other authorizations required under
applicable Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor thereto.
"Excluded Assets" shall have the meaning set forth in Section 2.2(c)
hereof.
"Excluded Liabilities" shall have the meaning set forth in Section
2.2(d) hereof.
"Financial Information" shall have the meaning set forth in Section
3.2(a) hereof.
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"Governmental Authority" shall mean any government or governmental or
regulatory body thereof, or political subdivision thereof, or any regulatory or
administrative agency or instrumentality thereof, or any court or arbitrator, in
each case in the United States, whether federal, state or local.
"Hazardous Materials" shall mean (a) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants," or words
of similar import, under applicable Environmental Laws; and (b) any petroleum or
petroleum products, natural or synthetic gas, radioactive materials, asbestos in
any form that is friable, urea formaldehyde foam insulation, and radon.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Income Taxes" shall mean all taxes based upon or measured by income.
"IRS" shall mean the Internal Revenue Service.
"Law" shall have the meaning set forth in Section 3.1(b) hereof.
"Liabilities" shall have the meaning set forth in Section 2.2(d)
hereof.
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"License Agreement" shall mean the assignment and license agreement to
be dated as of the Closing Date between Buyer and Seller, the form of which is
attached as Exhibit A.
"Licenses" shall have the meaning set forth in Section 3.6(a) hereof.
"Material Adverse Effect" shall mean any change or condition that
would (i) result (after taking into account insurance recovered in respect
thereof) in a material diminution in the value of the Business or (ii)
materially adversely affect the ability of Seller to consummate the transactions
contemplated by this Agreement.
"Notice" shall have the meaning set forth in Section 9.2(c) hereof.
"Orders" shall have the meaning set forth in Section 3.4 hereof.
"Parent" shall mean Blyth Industries, Inc., a Delaware corporation.
"PBGC" shall have the meaning set forth in Section 3.10(c) hereof.
"Pension Plan" shall have the meaning set forth in Section 6.4(a)(ii)
hereof.
"Permitted Encumbrances" shall have the meaning set forth in Section
3.3 hereof.
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"Pre-Closing Costs" shall have the meaning set forth in Section 15.20
hereof.
"Purchase" shall have the meaning set forth in the "Whereas" clause
appearing at the beginning of this Agreement.
"Purchase Price" shall mean $70,000,000, representing the aggregate
cash consideration to be paid by Buyer for the Assets pursuant hereto.
"Release" shall mean disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping or placing and
like actions, into or upon any land, water or air, or otherwise entering into
the environment.
"License Rights" shall mean the license rights granted to Seller under
the License Agreement.
"Returns" shall mean returns, reports and forms required to be filed
with any federal, state, local or foreign taxing authority.
"Seller" shall mean Colgate-Palmolive Company, a Delaware corporation.
"Seller DC Plan" shall have the meaning set forth in Section 6.4(b)(i)
hereof.
"Seller Indemnified Parties" shall have the meaning set forth in
Section 9.2(a) hereof.
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"Services" shall have the meaning set forth in Section 3.3(b) hereof.
"Shared Contract" shall mean a contract, agreement or other commitment
of Seller involving, but not related exclusively to, the Business.
"Subsidiary" shall mean a corporation more than 50% of the voting
power of the outstanding voting securities of which is directly or indirectly
owned by any other corporation.
"Tax Audit" shall have the meaning set forth in Section 10.6(c)
hereof.
"Taxes" shall mean all taxes (whether federal, state, local or
foreign) based upon or measured by income and any other tax whatsoever,
including gross receipts, profits, sales, use, occupation, value added, ad
valorem, transfer, franchise, withholding, payroll, employment, excise, or
property taxes, together with any interest, penalties or statutory additions
imposed with respect thereto. In the case of Taxes (i) for which Buyer is
indemnified under Section 10.1 and (ii) with respect to which Buyer is
responsible for filing the Returns pursuant to Section 10.4(b), "Taxes" shall
not include any interest or penalties attributable to the late filing of a
Return, the late payment of a Tax, the failure to make timely estimated Tax
payments to the extent such payments are due after the Closing Date, or the tax
treatment of items with respect to that portion of the taxable period beginning
on or after the Closing Date.
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"Tax Laws" shall mean the Code, federal, state, county, local, or
foreign laws relating to Taxes and any regulations or official administrative
pronouncements released thereunder.
"Taxing Authority" shall mean any Governmental Authority having
jurisdiction over the assessment, determination, collection, or other imposition
of Tax.
"Third Parties" shall have the meaning set forth in Section 5.10
hereof.
"Transferred Intellectual Property" shall have the meaning set forth
in Section 2.2(b)(vi) hereof.
"Transition Services Agreement" shall mean the transition services
agreement to be dated as of the Closing Date between Buyer and Seller in form
and substance reasonably satisfactory to each of Buyer and Seller.
"U.S. Benefit Plans" shall have the meaning set forth in Section
3.10(b) hereof.
"U.S. Employees" shall have the meaning set forth in Section 3.10(b)
hereof.
"U.S. Pension Plan" shall have the meaning set forth in Section
3.10(c) hereof.
"Welfare Plans" shall have the meaning set forth in
Section 6.4(d) hereof.
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ARTICLE II
Closing
Section 2.1. Procedures. (a) At the Closing, Seller shall deliver to
Buyer the following: (i) a certificate dated the Closing Date and validly
executed on behalf of Seller to the effect that the condition set forth in
Section 7.1 shall have been satisfied; (ii) a copy of the resolutions of the
board of directors of Seller authorizing the execution, delivery and performance
of this Agreement by Seller, and a certificate of its secretary or assistant
secretary, dated as of the Closing Date, that such resolutions were duly adopted
and are in full force and effect; and (iii) evidence or copies of any consents,
approvals, orders, qualifications or waivers required pursuant to Section 7.2.
(b) At the Closing, Buyer shall deliver to Seller the following: (i) a
certificate dated the Closing Date and validly executed on behalf of Buyer to
the effect that the condition set forth in Section 8.1 shall have been
satisfied; (ii) a copy of the resolutions of the board of directors of Buyer
authorizing the execution, delivery and performance of this Agreement by Buyer,
and a certificate of its secretary or assistant secretary, dated as of the
Closing Date, that such resolutions were duly adopted and are in full force and
effect; and (iii) evidence or copies of any consents, approvals, orders,
qualifications or waivers required pursuant to Section 8.2.
Section 2.2. Closing of the Purchase. (a) The Closing shall occur as
soon as practicable following the satisfaction or waiver of the conditions set
forth in this Agreement including,
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without limitation, Section 2.1 and Articles VII and VIII hereof. At the
Closing, (i) Seller will sell and Buyer will purchase the Assets; (ii) Buyer
will assume and will pay, perform and discharge when due, and will indemnify
Seller Indemnified Parties against and hold each of them harmless from, the
Liabilities; and (iii) Buyer and Seller will execute the License Agreement and
the Transition Services Agreement. In payment for the Assets, simultaneously
with the delivery by Seller of such appropriately executed instruments of sale,
assignment, transfer and conveyance in form and substance reasonably
satisfactory to Buyer and its counsel evidencing and effecting the sale and
transfer to Buyer of the Assets (it being understood that such instruments shall
not require the Continuing Affiliates to make any additional representations,
warranties or covenants, express or implied, not contained in this Agreement),
Buyer will (A) wire transfer $70,000,000 (seventy million dollars) (the
"Purchase Price"), less the Deposit and accrued interest thereon, in immediately
available funds to the account or accounts specified by Seller and (B) deliver
instruments of assumption in form and substance reasonably satisfactory to
Seller and its counsel evidencing and effecting the assumption by Buyer of the
Liabilities and such other documents as are specifically required by this
Agreement.
With respect to the Transferred Intellectual Property, Buyer and
Seller agree that an omnibus assignment, the form of which is attached hereto as
Exhibit B, will be delivered at Closing, and that Seller will execute or cause
to be executed after Closing such additional documents as Buyer may prepare and
request from time to time to enable Buyer to record the transfer of ownership of
individual trademarks and patents with the applicable governmental agencies,
including, but not limited to, powers of attorney, deeds of assignment,
affidavits or
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declarations, it being understood that the cost of preparing and recording such
additional documents shall be borne by Buyer.
The Purchase Price and the Liabilities shall be allocated among the
Assets as set forth in Schedule 2.2(a) attached hereto. Seller and Buyer
acknowledge that the allocations set forth in Schedule 2.2(a) were bargained for
and negotiated, and Seller and Buyer agree to prepare and file all Returns in a
manner consistent with the provisions hereof and Schedule 2.2(a). Seller and
Buyer shall each provide to the other for review a copy of its report with
respect to this transaction pursuant to Section 1060 of the Code at least ten
(10) business days prior to its submission to the IRS. Such reports shall be
consistent with the allocations of the Purchase Price and the Liabilities
contained in Schedule 2.2(a).
(b) The assets to be sold to Buyer by Seller pursuant to this
Agreement shall include all of Seller's right, title and interest in, to and
under all of the tangible and intangible assets used exclusively in, or held for
use exclusively in connection with, the Business by Seller, other than Excluded
Assets, including without limitation the assets described in Sections 2.2(b)(i)
through 2.2(b)(viii) hereof (collectively, the "Assets"):
(i) all real property, real property leasehold interests, improvements
and fixtures which are listed in Schedule 2.2(b)(i) hereto;
(ii) all machinery, equipment, vehicles, spare parts, furniture and other
tangible personal property which are listed in Schedule 2.2(b)(ii)
hereto, except for any such items which are used or
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disposed of in the ordinary course of business between the date
hereof and the Closing Date;
(iii) all raw materials, supplies, work-in-process and finished
product inventory existing as of the close of business on the Closing
Date;
(iv) all contracts, agreements, personal property leases and
other commitments relating exclusively to the Business, or, if a
Shared Contract, to the extent related to the Business, as of the
Closing Date (subject to all the terms thereof, including, without
limitation, any condition or restriction on the assignment thereof);
(v) all books and records exclusively relating to the Business existing
as of the Closing Date (provided that Seller shall have the right to
retain copies thereof);
(vi) the patents (subject to the License Rights) and trademarks listed in
Schedule 3.5 (the "Transferred Intellectual Property");
(vii) all Licenses issued to or held by Seller as of the Closing
Date and used exclusively in connection with the operation of the
Business to the extent such Licenses may be assigned to Buyer; and
(viii) all other assets of every kind and nature whatsoever,
tangible or intangible, real, personal
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or mixed and wherever located (other than the Excluded Assets)
exclusively relating to the Business, except any such assets which
are used or disposed of in the ordinary course of business between
the date hereof and the Closing Date.
Promptly after the date hereof, Seller will deliver to Buyer a list of the
Assets, if any, located at Seller's Piscataway research and development
facility. Seller may retain possession of such Assets after the Closing as
necessary to fulfill its obligations under the Transition Services Agreement.
Seller will deliver such Assets to Buyer upon the termination of the Transition
Services Agreement or such earlier date as Buyer and Seller may agree.
(c) Anything to the contrary herein notwithstanding, the Assets shall not
include any of the following (the "Excluded Assets"):
(i) All causes of action, rights or claims for the benefit of the
Continuing Affiliates arising prior to the Closing Date relating to
the Business;
(ii) All cash and cash equivalents held by Seller as of the Closing Date;
(iii) all accounts receivable of Seller arising out of the
Business and existing as of the close of business on the Closing Date;
(iv) All receivables from any other Continuing Affiliate; and
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(v) All assets used by Seller in the conduct of its businesses other than
the Business, other than Shared Contracts to the extent assigned
hereunder.
(d) Except for the Liabilities, Buyer shall not assume from Seller any
liabilities or obligations by virtue of the transactions contemplated hereby,
and except to the extent expressly set forth in this Section 2.2 or elsewhere
in this Agreement, Buyer shall have no liability for any other liabilities or
obligations of Seller and its affiliates of any kind, character or
description whatsoever (the "Excluded Liabilities").
The liabilities and obligations to be assumed by Buyer from Seller
pursuant to this Agreement shall consist only of the following specified
liabilities (collectively, the "Liabilities"):
(i) subject to Section 5.12 with respect to product returns, liability for
obligations under all contracts, agreements, personal property leases
and commitments relating exclusively to the Business and under all
Shared Contracts to the extent they are assigned to Buyer pursuant to
Section 2.2(b)(iv) hereof, in each case with respect to the period
commencing at the Closing and continuing thereafter;
(ii) the liabilities relating to Employees which are specified to be
assumed by Buyer in Article VI hereof;
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(iii) subject to Section 5.1(d)and Section 9.2(b)(iii), all liabilities
relating to the environmental condition of real property included in
the Assets;
(iv) all liabilities relating to product liability claims in connection
with the products of the Business where the date of the event or
occurrence which is the basis of the claim occurs more than 60 days
after the Closing Date, provided, however, that Buyer shall not
assume any such liability as to which (A) Buyer can demonstrate by
clear and convincing evidence that the product involved was
manufactured by Seller prior to the Closing Date and (B)(i) Buyer can
demonstrate by clear and convincing evidence that a manufacturing
defect in the product caused the injury or damage which is the subject
of the product liability claim or (ii) a jury or judge, in a
non-appealable finding of fact, determines that a manufacturing defect
in the product caused the injury or damage which is the subject of the
product liability claim;
(v) all liabilities relating to product liability claims in connection
with the products of the Business where the date of the event or
occurrence which is the basis of the claim occurs in the first 60-day
period after the Closing Date where (A) Seller can demonstrate by
clear and convincing evidence that the product involved was
manufactured by Buyer after the Closing Date and
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(B)(i) Seller can demonstrate by clear and convincing evidence that a
manufacturing defect in the product caused the injury or damage which
is the subject of the product liability claim or (ii) a jury or judge,
in a non-appealable finding of fact, determines that a manufacturing
defect in the product caused the injury or damage which is the subject
of the product liability claim;
(vi) all liabilities relating to occupational health and safety claims of
employees of the Business (including claims relating to occupational
disease) where the date of the event or occurrence which is the basis
of the claim occurs or continues after the Closing; provided that, in
the event that such event or occurrence commences prior to the Closing
and continues after the Closing, Seller and Buyer shall share any
liabilities relating to such event or occurrence on an equitable basis
in accordance with applicable insurance industry practice or as Seller
and Buyer shall otherwise mutually agree;
(vii) all liabilities accruing on or after the Closing Date
relating to capital expenditure projects initiated or committed to by
Seller prior to the Closing Date in accordance with the current
capital expenditure plan for the Business, to the extent such capital
items are delivered or completed on or after the Closing Date; which
capital expenditures from September through
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December, 1997 are currently estimated to be substantially as
described in Schedule 5.4; and
(viii) all other liabilities relating to ownership of the Assets or
the operation of the Business with respect to the period commencing at
the Closing and continuing thereafter.
Section 2.3. Time and Place of Closing. The Closing shall take place
on the Closing Date at 10:00 A.M., New York City time, at the offices of Seller,
New York, New York.
Section 2.4. Deposit of Funds. Concurrently with the execution of
this Agreement, Buyer has deposited with Seller, by wire transfer in immediately
available funds to an account of Seller held in the name of "Colgate-Palmolive
Company" at Citibank, N.A. - New York (ABA# 000000000, account# 00000000), the
sum of $15,000,000 as a deposit toward the Purchase Price (the "Deposit").
Except as provided in the next sentence, the Deposit is non-refundable. If the
Closing does not occur as a result of (i) the failure of any Governmental
Authority to grant the approvals required under the HSR Act, despite Buyer's
compliance with Section 5.2(a)(iv), or (ii) the failure of any of the conditions
set forth in Article VII to be satisfied, other than as a result of Buyer's
breach of its obligations hereunder, Seller shall refund the Deposit, together
with any interest accrued thereon, to Buyer. The Deposit shall bear interest at
the rate of 7% per annum.
ARTICLE III
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Representations and Warranties of Seller
Seller hereby represents and warrants to Buyer as follows:
Section 3.1. Authorization; No Conflicts; etc.
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Seller has all requisite
corporate power and authority to own or lease and operate its properties and to
carry on its business as now being conducted. Seller has full corporate power to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. All corporate acts and other
proceedings required to be taken by Seller to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken. This Agreement has been
duly executed and delivered by Seller and, assuming the due execution and
delivery hereof by Buyer, this Agreement constitutes the legal, valid and
binding obligation of Seller, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity.
(b) The execution and delivery of this Agreement by Seller and
the consummation by it of the transactions contemplated by this Agreement will
not (i) violate any provision of the certificate of incorporation or by-laws of
Seller, (ii) except as disclosed in Schedule 3.1(b), violate any provision of,
or constitute a default (with or without notice or lapse of time) under, or give
rise to a right of termination, cancellation or
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acceleration of (or entitle any party to accelerate whether after the giving of
notice or lapse of time or both) any obligation under, or result in the
imposition of any lien upon or the creation of a security interest in any of the
Assets pursuant to, any note, bond, debt instrument, mortgage, indenture, lien,
lease, agreement or other instrument, or any judgment, injunction, order or
decree to which Seller is a party or by which it is bound, or (iii) except as
disclosed in Schedule 3.1(b), violate or conflict with any United States
(federal, state or local) law, statute, ordinance, rule or regulation ("Law")
applicable to Seller, or by which any of its properties or assets is bound,
except, in the case of either of clauses (ii) and (iii), for any such
violations, defaults, rights or restrictions that would not, individually or in
the aggregate, have a Material Adverse Effect.
Section 3.2. Financial Information. (a) Schedule 3.2 sets forth
certain financial data, specifically (i) operating profit of the Business for
the year ended December 31, 1996 and the six-month period ended June 30, 1997
and (ii) data regarding the assets being sold dated as of June 30, 1997
(together, the "Financial Information").
(b) The Financial Information has been derived from the
accounting books and records of Seller, is accurate in all material respects and
is fairly presented for the respective periods covered thereby or then ended,
except as provided in the Financial Information. Except as set forth on
Schedule 3.2, the accounting standards used in preparing the Financial
Information are in accordance with the standards applied by Colgate-Palmolive
Company in preparing its consolidated financial statements.
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(c) Since December 31, 1996, there has not been any material adverse
change in the business, financial condition, operations or results of operations
of the Business.
Section 3.3. Title to Assets; Sufficiency of Assets. (a) Schedule
3.3 contains a list of all real property owned by Seller and included in the
Assets. Except as set forth in Schedule 3.3, with respect to the Assets, Seller
has and will deliver to Buyer at Closing, (a) good and marketable fee title to
all real property owned by it, and (b) good, valid and marketable title to (or
good and valid leasehold interests in) all of the other Assets, in each case
free and clear of all Encumbrances, except (i) liens for current taxes or other
governmental assessments or charges not yet due and payable or being contested
in good faith, (ii) Encumbrances which would not have a Material Adverse Effect,
and (iii) other Encumbrances which will have been discharged prior to Closing
(the exceptions described in the foregoing clauses (i), (ii) and (iii) being
referred to herein as "Permitted Encumbrances"). All material structures and
other improvements located on such real property reasonably necessary for the
conduct of the Business as presently conducted, are in satisfactory operating
condition and repair, subject to ordinary wear and tear except in such instances
where the poor condition would not have a Material Adverse Effect.
(b) Buyer understands that Seller does not operate the Business as a
stand alone entity, and that Seller provides services of the following types to
the Business: general management, sales administration, finance administration,
marketing, research and development, distribution planning and services,
customer service, information technology, order
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processing, legal, insurance, human resources, accounts payable, accounts
receivable and collection services (the "Services"). Except for assets used to
provide the Services, immaterial assets, cash and accounts receivable, the
Assets represent all the assets, including manufacturing know-how, technology
and processes, reasonably necessary to operate the Business as it exists today
in the ordinary course.
Section 3.4. Litigation; Orders. Except as disclosed in Schedule
3.4, there are no Actions pending or, to Seller's knowledge, threatened by or
before any Governmental Authority against Seller that (a) involve a claim by or
against Seller of more than $100,000, (b) seek any injunctive relief or (c)
relate to the transactions contemplated by this Agreement. Except as disclosed
in Schedule 3.4, there are no judgments or outstanding orders, injunctions,
decrees, stipulations or awards rendered by any Governmental Authority
(collectively, "Orders") against Seller or any of its properties or businesses
that would, individually or in the aggregate, have a Material Adverse Effect.
Section 3.5. Intellectual Property. Schedule 3.5 lists all patents
and trademarks and pending applications with respect thereto owned, used or
filed by or licensed to Seller in connection with the Business. To Seller's
knowledge, except as disclosed in Schedule 3.5, no claims which would,
individually or in the aggregate, have a Material Adverse Effect have been
asserted by any person (a) challenging the ownership, validity or enforceability
of any of the patents and trademarks or applications therefor listed on Schedule
3.5, (b) to the effect that the manufacture, sale or use of any product as now
manufactured, sold or used by the Business or the use of any process to
manufacture any such products infringes on any patents
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or (c) against the use by the Business of any trademarks, technology, know-how
or processes necessary to the Business.
Section 3.6. Licenses, Approvals, Other Authorizations, Consents,
Reports, etc. (a) Except as disclosed in Schedule 3.6(a), Seller has all
governmental licenses, permits, franchises, approvals and other authorizations
of any Governmental Authority (the "Licenses") necessary to own, lease and
operate its properties and to enable it to carry on the Business as presently
conducted except for those Licenses, the lack of which would not have a Material
Adverse Effect. Except as disclosed in Schedule 3.6(a), all such Licenses are in
full force and effect except where the failure to be in full force and effect
would not have a Material Adverse Effect. To Seller's knowledge, except as
disclosed in Schedule 3.6(a), no proceeding is pending seeking the revocation or
limitation of any such License that would have a Material Adverse Effect.
(b) Schedule 3.6(b) lists all consents, approvals, registrations,
filings, applications, notices, orders, authorizations, qualifications and
waivers required to be made, filed, given or obtained by Seller with, to or from
any persons or Governmental Authorities in connection with the consummation of
the Purchase and the other transactions contemplated by this Agreement, except
for those (i) that become applicable solely as a result of the specific
regulatory status of Buyer or its Affiliates, or (ii) the failure to make, file,
give or obtain which would not, individually or in the aggregate, have a
Material Adverse Effect.
Section 3.7. Labor Matters. There are no collective bargaining
agreements with labor unions or associations
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representing employees of Seller employed in connection with the Business. No
material work stoppage against Seller is pending or, to Seller's knowledge,
threatened. Except as set forth in Schedule 3.7, Seller is not involved in
or, to Seller's knowledge, threatened with any labor dispute, arbitration,
lawsuit or administrative proceeding relating to labor matters involving the
employees of Seller employed in connection with the Business (excluding
routine workers' compensation claims) that would have a Material Adverse
Effect.
Section 3.8. Compliance with Laws. (a) To Seller's knowledge, the
conduct of the Business substantially complies with all Laws and Orders
applicable thereto, except for violations or failures so to comply, if any, that
would not have a Material Adverse Effect.
(b) Except as set forth on Schedule 3.8, Seller is in compliance
in all material respects with all applicable Environmental Laws and has obtained
all required Environmental Permits. Except as described in Schedule 3.8, Seller
has not received written notice from any United States Governmental Authority of
any alleged material violation by Seller of any Environmental Law in connection
with the Business. Except as described in Schedule 3.8, to the knowledge of
Seller, Seller has not received written notice of any fact, event or condition
relating to any Release attributable to the Business of any Hazardous Material
into the environment (other than pursuant to an Environmental Permit) which
would result in a material violation of Environmental Law. To the knowledge of
Seller, Seller has no material liability under any Environmental Law or relating
to any Release attributable to the Business of any Hazardous
-24-
Material into the environment (other than pursuant to an Environmental Permit).
Section 3.9. Compliance with Contracts. Schedule 3.9 contains a list
of all contracts, leases, agreements or understandings, to be transferred to,
and assumed by, Buyer pursuant to Section 2.2(b)(iv) hereof which are material
to the Business. Each of such contracts, leases, agreements and understandings
is in full force and effect and (i) neither Seller nor, to Seller's knowledge,
any other party thereto, has breached or is in default thereunder, (ii) no event
has occurred which, with the passage of time or the giving of notice, would
constitute such a breach or default, (iii) no claim of material default
thereunder has, to Seller's knowledge, been asserted or threatened and (iv)
neither Seller nor, to Seller's knowledge, any other party thereto is seeking
the renegotiation thereof or substitute performance thereunder, except where
such breach or default, or attempted renegotiation or substitute performance,
individually or in the aggregate, would not have a Material Adverse Effect.
Section 3.10. Employee Benefit Plans. (a) Schedule 3.10(a) lists all
material compensation and benefit plans, contracts and arrangements in effect as
of the date hereof including, without limitation, all bonus, incentive or
deferred compensation, severance pay, pension, profit sharing, savings and
thrift and medical and life insurance plans in which any current or former
employees of the Business and their respective dependents ("Employees")
participate (collectively, "Benefit Plans").
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(b) Except as disclosed in Schedule 3.10(b), all Benefit Plans in which
Employees in the United States ("U.S. Employees") participate ("U.S. Benefit
Plans") and which are "employee benefit plans", as defined in Section 3(3) of
ERISA, in all material respects are in compliance with and have been
administered in compliance with all applicable requirements of law, including
but not limited to the Code and ERISA, and all contributions required to be
made to each such plan under the terms of such plan, ERISA or the Code for
all periods of time prior to the date hereof and the Closing Date have been
or will be, as the case may be, made or accrued on or before the due dates
for such contributions.
(c) Except as disclosed in Schedule 3.10(c), with respect to any U.S.
Benefit Plan which is intended to qualify under Section 401(a) of the Code
("U.S. Pension Plan"), a favorable determination letter as to the
qualification under Section 401(a) of the Code has been issued and the
related trust has been determined to be exempt from taxation under Section
501(a) of the Code and, to Seller's knowledge, no amendment made (or the
failure of such amendment to be made) to any U.S. Pension Plan subsequent to
the date of such determination letter has adversely affected the qualified
status of any such plan. Seller has performed all material obligations
required to be performed by it under, and is not in default under or in
violation of, the terms of any of the U.S. Pension Plans in any material
respect. To the best of Seller's knowledge, neither Seller, nor any other
"disqualified person" (as defined in Section 4975 of the Code), has engaged
in any "prohibited transaction" (as such term is defined in Section 4975 of
the Code), which could subject any U.S. Pension Plan (or its related trust),
Seller or any officer, director or employee of Seller to any material tax or
penalty
-26-
imposed under Section 4975 of the Code; and no "reportable event" within the
meaning of Section 4043 of ERISA has occurred with respect to any U.S. Pension
Plan. Seller has not incurred, and does not reasonably expect to incur, any
material liability to the Pension Benefit Guaranty Corporation (the "PBGC")
(except for required premium payments, which payments have been made when due).
Except as set forth in Schedule 3.10(c) hereto, Seller has no "accumulated
funding deficiencies," as such term is defined in ERISA, whether or not waived,
with respect to any U.S. Pension Plan. Except as set forth in Schedule 3.10(c)
hereto, the present value of all accrued or vested benefits under each U.S.
Pension Plan which is subject to Title IV of ERISA did not, in each case, as of
the last applicable valuation date, exceed the fair market value of the assets
of the U.S. Pension Plan allocable to such accrued or vested benefits.
Section 3.11. Brokers, Finders, etc. Seller has not employed any broker,
finder, consultant or other intermediary in connection with the transactions
contemplated by this Agreement who would have a valid claim for a fee or
commission from Buyer in connection with such transactions. Seller is solely
responsible for any payment, fee or commission that may be due to Xxxxxxx, Xxxxx
& Co. in connection with the transactions contemplated hereby.
Section 3.12. Customers and Suppliers. Since January 1, 1997, Seller has
not received written notice from (i) any third party claiming that there is a
material breach on the part of Seller under any material agreement relating to
the Business; (ii) any material customer of its intention to return any material
amount of inventory of the Business other than in customary amounts in the
ordinary course of business; or (iii)
-27-
any material supplier or customer of its intention materially to reduce its
business with the Business by reason of the transactions contemplated by this
Agreement or otherwise, and, to Seller's knowledge, since January 1, 1997, none
of the actions described in clauses (i) through (iii) above has been threatened.
Section 3.13. Schedules and Exhibits. Disclosure of any fact or item in any
Schedule or Exhibit hereto referenced by a particular paragraph or section in
this Agreement shall, should the existence of the fact or item or its contents
be relevant to any other paragraph or section, be deemed to be disclosed with
respect to that other paragraph or section whether or not an explicit
cross-reference appears.
Section 3.14. No Implied Representation; Disclaimer of Warranties.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS ARTICLE III OR ANY OTHER PROVISION OF
THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT SELLER IS
NOT MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, BEYOND
THOSE EXPRESSLY GIVEN IN THIS AGREEMENT, A SCHEDULE HERETO, OR A CERTIFICATE
DELIVERED HEREUNDER, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OR
REPRESENTATION AS TO CONDITION, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AS TO ANY OF THE PROPERTIES OR ASSETS OF THE BUSINESS. It is
understood that any cost estimates, projections or other predictions contained
or referred to in the Schedules hereto and any cost estimates, projections or
predictions or any other information concerning the Business contained or
referred to in other materials that have been or shall hereafter be provided to
Buyer or any of its Affiliates, agents or representatives (including without
limitation the Confidential Memorandum dated
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July 1997) are not and shall not be deemed to be representations or warranties
of Seller.
Section 3.15. Construction of Certain Provisions. It is understood and
agreed that neither the specification of any dollar amount in the
representations and warranties contained in this Agreement nor the inclusion of
any specific item in the Schedules or Exhibits is intended to imply that such
amounts or higher or lower amounts, or the items so included or other items, are
or are not material, and neither party shall use the fact of the setting of such
amounts or the fact of the inclusion of any such item in the Schedules or
Exhibits in any dispute or controversy between the parties as to whether any
obligation, item or matter is or is not material for purposes of this Agreement.
ARTICLE IV
Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller as
follows:
Section 4.1. Incorporation; Authorization; No Conflicts; etc. Buyer is
a corporation duly organized, validly existing and in good standing under the
laws of the State of New York. Buyer has full corporate power to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement, the performance of Buyer's obligations hereunder and the consummation
of the transactions contemplated hereby by Buyer have been duly and validly
authorized by the
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board of directors of Buyer and no other corporate proceedings or actions on
the part of Buyer or its board of directors are necessary therefor. This
Agreement has been duly executed and delivered by Buyer, and, assuming the due
execution and delivery hereof by Seller, this Agreement constitutes the legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the rights and remedies of
creditors generally and to general principles of equity. The execution, delivery
and performance by Buyer of this Agreement will not (a) violate any provision of
the certificate of incorporation or by-laws or similar organizational instrument
of Buyer or any of its Affiliates, (b) violate any provision of, or constitute a
default (with or without notice or lapse of time) under, or give rise to a right
of termination, cancellation or acceleration of (or entitle any party to
accelerate whether after the giving of notice or lapse of time or both) any
obligation under, or result in the imposition of any lien upon or the creation
of a security interest in any of Buyer's or any of its Affiliates' assets or
properties pursuant to, any note, bond, debt instrument, mortgage, indenture,
lien, lease, agreement or other instrument, or any judgment, injunction, order
or decree to which Buyer or any of its Affiliates is a party or by which Buyer
or any of its Affiliates is bound, or (c) violate or conflict with any Law
applicable to Buyer or any of its Affiliates or by which any of their properties
or assets is bound, except, in the case of clauses (b) and (c), for any such
violations, defaults, rights or restrictions that would not, individually or in
the aggregate, have a material adverse effect on (i) the business or financial
condition of Buyer or (ii) the ability of Buyer to consummate the
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Purchase or the other transactions contemplated by this Agreement.
Section 4.2. Brokers, Finders, etc. Buyer has not employed, and is not
subject to the valid claim of, any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by this Agreement
who would have a valid claim for a fee or commission from any Continuing
Affiliate in connection with such transactions.
Section 4.3. Licenses, Approvals, Other Authorizations, Consents,
Reports, etc. Schedule 4.3 contains a list of all consents, approvals,
registrations, filings, applications, notices, orders, authorizations,
qualifications or waivers required to be made, filed, given or obtained by Buyer
or any of its Affiliates with, to or from any persons or Governmental
Authorities in connection with the consummation of the Purchase and the other
transactions contemplated by this Agreement, except for those (a) that become
applicable solely as a result of the specific regulatory status of Seller or (b)
the failure to make, file, give or obtain which would not, individually or in
the aggregate, either have a material adverse effect on the business or
financial condition of Buyer or prevent the consummation of the Purchase or the
other transactions contemplated by this Agreement.
Section 4.4. Availability of Funds. Buyer has available, and will have
available on the Closing Date, sufficient funds to enable it to consummate the
transactions contemplated by this Agreement.
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Section 4.5. No Outside Reliance. Buyer has not relied and is not
relying upon any statement or representation not made in this Agreement, a
Schedule hereto or a certificate to be delivered to Buyer by Seller at the
Closing.
Section 4.6. Knowledge Regarding Representations. Buyer is not aware
of any inaccuracy or misstatement in, or breach of, any representation or
warranty of Seller contained herein.
Section 4.7 Litigation; Orders. There are no Actions pending or, to
Buyer's knowledge, threatened by or before any Governmental Authority against
Buyer that relate to the transactions contemplated by this Agreement. There are
no Orders against Buyer or any of its properties or businesses that would
prohibit the Purchase or the other transactions contemplated by this Agreement.
ARTICLE V
Covenants of Seller and Buyer
Section 5.1. Investigation of Business; Access to Properties and
Records; Records Retention; Phase II Review. (a) (i) After the date hereof,
Seller shall afford to representatives of Buyer access to its offices, plants,
properties, books, records, distributors, brokers and other non-employee
marketing agents during normal business hours, in order that Buyer may have full
opportunity to make such investigations as it desires of the affairs of the
Business; provided, however, that such investigation shall be upon reasonable
notice and shall not unreasonably disrupt the personnel and operations of
Seller; and
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provided, further, that access to Seller's distributors and brokers shall be
afforded to Buyer only with the representatives of Seller present. All requests
for access to the Business and the offices, plants, properties, books, records,
distributors, brokers and other non-employee marketing agents relating thereto
shall be made to such representatives of Seller as Seller shall designate, who
shall be solely responsible for coordinating all such requests and all access
permitted hereunder. It is further understood and agreed that neither Buyer nor
its representatives shall contact any of the employees, customers, suppliers,
joint venture partners, or other associates or Affiliates of Seller or any of
its Subsidiaries, in connection with the transactions contemplated by this
Agreement, whether in person or by telephone, mail or other means of
communication, without the specific prior authorization of such representatives
of Seller as Seller may designate. If, as of the date hereof or at any time
hereafter Buyer is aware of or discovers any breach of any representation or
warranty contained in this Agreement or any circumstance or condition that upon
Closing would constitute such a breach, Buyer covenants that it will promptly so
inform Seller in writing.
(ii) After the date hereof, Seller shall prepare financial statements of
the Business to be filed by Parent with the Securities and Exchange Commission
as a result of the transactions contemplated hereby. Buyer and Parent shall be
responsible for all fees, costs and expenses incurred in connection with the
preparation of such financial statements. Since the Business is operated by
Seller as one product line within a division of a division, it is the
understanding of the parties that Parent intends to file a statement of assets
to be sold and a statement of operations based on direct, non-allocated
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costs of the Business in accordance with the current practice and procedure of
the staff of the Securities and Exchange Commission in transactions of this
type. If Parent determines that it is necessary to seek a waiver from the staff
of the Securities and Exchange Commission of the provisions of Regulation S-X
relating to financial information of acquired businesses, Seller shall cooperate
with Buyer and Parent in developing written support for such request. If Buyer
and Parent do not prevail in obtaining such waiver, Seller will prepare the type
of financial statements required by the Securities and Exchange Commission.
(b) Prior to Closing, any information provided to Buyer or its
representatives pursuant to this Agreement shall be held by Buyer and its
representatives in accordance with, and shall be subject to the terms of, the
Confidentiality Agreement dated July 17, 1997 by and between Seller and Buyer.
(c) Buyer agrees (i) to hold all of the books and records relating
to the Business and delivered to it on the Closing Date pursuant to Section
2.2(b)(v) hereof and not to destroy or dispose of any thereof for a period of
ten (10) years from the Closing Date or such longer time as may be required
by law, and thereafter, if it proposes to destroy or dispose of any of such
books and records, to offer first in writing at least sixty (60) days prior
to such proposed destruction or disposition to surrender them to Seller and
(ii) at any time and from time to time following the Closing Date to afford
Seller, its accountants and counsel, during normal business hours, upon
reasonable request, full access to such books, records and other data and to
the employees of Buyer or the Business to the extent that such access may be
requested for any legitimate purpose at no cost to Seller (other than for
reasonable out-of-pocket expenses).
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(d) Promptly after the date hereof, Seller will cause its
environmental engineering consultants, Dames & Xxxxx, to conduct a Phase II
environmental review at Seller's Texarkana facility in accordance with the scope
of work set forth in the letter, dated September 23, 1997, from Xxxxxxxx
Engineering, Inc. to Buyer, attached hereto as Schedule 5.1(b); provided,
however, that the scope of work shall not include the development of a
groundwater surface elevation map with groundwater flow direction referred to in
the second paragraph on page 3 of the letter unless there is evidence that such
a map is appropriate and necessary given the results of analytical testing and
the history and uses of the Texarkana facility and its adjoining properties and,
provided, further, that such scope of work shall not include borings through
containment areas at the facility unless there is no alternative method to
assess the conditions of the environment beneath such containment areas.
Seller's consultants shall perform the Phase II review at Seller's
costs and expense and shall communicate all results of the Phase II review to
Buyer. During the performance of the Phase II review, Seller will cause its
consultants to hold themselves reasonably available to meet with Buyer's
consultants for the purpose of discussing and reviewing the performance of the
Phase II review, the data obtained in connection therewith and the results
thereof. If such Phase II review demonstrates that the owner or operator of the
property is required to perform any environmental clean-up or remediation under
Environmental Laws as currently in effect, then, after the Closing, Seller will,
at its option, either (i) undertake at its own expense such remediation effort
as is necessary to satisfy the requirements of such Environmental Laws or to
obtain approval from appropriate
-35-
governmental authorities, or (ii) ask Buyer to undertake such effort and
reimburse Buyer for the out-of-pocket costs reasonably incurred by Buyer to
accomplish such remediation, based on a remediation plan approved in advance by
Seller. Buyer agrees to grant Seller access to the facility after the Closing to
enable it to perform such remediation and cooperate in Seller's preparation and
submission to applicable governmental authorities of remediation plans, reports
and documents necessary to complete the remediation, such cooperation to include
but not be limited to making relevant files and personnel available to Seller.
Except as required by law or as necessary to avoid any unreasonable disruption
of the operations of the Business, Buyer shall refrain from taking any action
that would increase Seller's costs for the environmental remediation, and Seller
shall not be responsible for any costs or expenses that result from the breach
of this sentence. Seller agrees to use reasonable efforts to avoid disrupting
Buyer's operations during such remediation.
All information learned by Buyer in connection with the Phase II review,
including any Phase II report, shall remain subject to the terms of the
Confidentiality Agreement, dated July 17, 1997, between Seller and Buyer until
the completion of any remediation effort.
Section 5.2. Efforts; Obtaining Consents. (a) Subject to the terms and
conditions herein provided, Seller and Buyer each agree to use all best 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 as
promptly as practicable the transactions contemplated by this Agreement, and to
cooperate with the other in connection with the foregoing, including using all
best efforts (i) to obtain all necessary
-36-
waivers, consents and approvals from other parties to material loan agreements,
leases and other contracts, (ii) to obtain all consents, approvals and
authorizations that are required to be obtained from any Governmental Authority,
(iii) to prevent the entry of, or to lift or rescind, any Order adversely
affecting the ability of the parties hereto to consummate the transactions
contemplated hereby, (iv) to effect all necessary registrations and filings
including, but not limited to, filings under the HSR Act and submissions of
information requested by Governmental Authorities, and to take, or cause to be
taken, all actions necessary in connection therewith, including, in the case of
Buyer, proposing, negotiating, committing to and effecting, by consent decree,
hold separate order, or otherwise, the sale, divestiture or disposition of
businesses or assets used in businesses that are similar to the Business,
provided that neither Buyer nor its Affiliates shall be required to refuse to
deal with any distributors or customers, as may be required in order (A) to
avoid any Governmental Authority commencing, or authorizing its staff to
commence, an Action seeking a temporary restraining order, a preliminary or
permanent injunction or any other order or decree, the entry of which would have
the effect of preventing the Closing, or (B) to effect the dissolution of any
injunction, temporary restraining order or other order in any suit or proceeding
which would otherwise have the effect of preventing the Closing, and (v) to
fulfill all conditions to this Agreement; provided, however, that such
cooperation shall not include any obligation of Buyer or Seller to incur
unreasonable expense in any one instance, commence any litigation (other than as
may be required by clause (iv)(B) above) or offer or grant any unreasonable
accommodation (financial or otherwise) to any third party in connection with any
of the foregoing; provided, further, that neither Buyer nor Seller shall be
obligated to incur
-37-
aggregate expenses in excess of five percent of the Purchase Price.
(b) Each party hereto shall promptly inform the other of any
material communication from the Federal Trade Commission, the United States
Department of Justice or any other Governmental Authority regarding any of the
transactions contemplated hereby. If either party or any Affiliate thereof
receives a request for additional information or documentary material from any
such Governmental Authority with respect to the transactions contemplated
hereby, then such party will endeavor in good faith to make, or cause to be
made, as soon as reasonably practicable and after consultation with the other
party, an appropriate response in compliance with such request.
Section 5.3. Further Assurances. Seller and Buyer agree that, from
time to time, whether before, at or after the Closing Date, each of them will,
and will cause their respective Affiliates to, execute and deliver such further
instruments of conveyance and transfer and take such other action as may be
necessary to carry out the purposes and intents of this Agreement, including,
without limitation, the transfer of assets and assumption of liabilities
contemplated by Article II hereof.
Section 5.4. Conduct of Business. From the date hereof to the Closing,
except as disclosed on Schedule 5.4 or otherwise provided for in, or
contemplated by, this Agreement, and except as consented to or approved by
Buyer, Seller covenants and agrees that:
(a) Seller shall operate the Business in the ordinary course in all
material respects;
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(b) except in the ordinary course of business, Seller (in connection
with the Business) shall not (i) create, incur or assume any indebtedness for
money borrowed (including obligations in respect of capital leases); (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any person if such
assumption, guarantee, endorsement or other liability is in each case material
to the Business; or (iii) make any material loans, advances or capital
contributions to or investments in, any person (except for customary loans or
advances to employees);
(c) except in the ordinary course of business or as required by any
Law or contractual obligations or other understandings or arrangements existing
on the date hereof, Seller shall not (i) increase in any manner the base
compensation of, or enter into or amend any employment, bonus, incentive,
severance, consulting, or other compensation agreement with any Current
Employee; or (ii) commit itself to any additional pension, profit-sharing,
deferred compensation, group insurance, severance pay, retirement or other
employee benefit plan, fund or similar arrangement applicable to Employees or
amend or commit itself to amend any of such plans, funds or similar arrangements
in existence on the date hereof so as to increase benefits thereunder;
(d) except in the ordinary course of business or as required by any
Law or contractual obligations existing on the date hereof or as provided for in
or contemplated by this Agreement, Seller shall not, in connection with the
Business, (i) sell, transfer or otherwise dispose of any of its material
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assets, (ii) create any new material Encumbrance, other than a Permitted
Encumbrance, on its properties or assets, (iii) enter into any material joint
venture or partnership (iv) purchase any material amount of assets or securities
of any person, or (v) make or incur any material capital expenditures other than
in accordance with its current capital expenditure plan for the Business, which
capital expenditures from September through December, 1997 are currently
estimated to be substantially as described in Schedule 5.4;
(e) except in the ordinary course of business, Seller will not
take any action that is intended to have the effect of discouraging any
licensor, customer, representative, supplier or other business associate of the
Business from maintaining the same business relationships with Buyer after the
Closing as are maintained with Seller prior to the Closing;
(f) Seller will maintain inventory levels for the Business consistent
with past practices in the ordinary course of business in all material respects;
and
(g) Seller shall not agree to take any action prohibited by this
Section 5.4.
Section 5.5. Public Announcements. Seller and Buyer shall agree upon
the text of any initial public announcement of the transactions contemplated by
this Agreement. Thereafter, unless required by law or applicable requirements of
the New York Stock Exchange, neither Seller nor Buyer nor any agent or Affiliate
of either of them will issue any press release or make any public statements
concerning the transactions contemplated by
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this Agreement without the consent of the other party, which shall not be
unreasonably withheld.
Section 5.6. Intercompany Accounts. Notwithstanding the provisions of
Section 5.4 hereof, nothing in this Agreement shall be construed or interpreted
to prevent Seller from (i) paying or making regular or special dividends or
other distributions to any Continuing Affiliate consisting of cash, marketable
securities, commercial receivable or any combination thereof; (ii) making or
accepting intercompany advances to, from or with one another or with any
Continuing Affiliate or (iii) engaging in any transaction incident to the cash
management procedures of Seller, including, without limitation, short-term
investments in bank deposits, money market instruments, time deposits,
certificates of deposit and bankers' acceptances, incurrence or payment of bank
overdrafts and borrowings for working capital purposes and for purposes of
providing additional funds to such entities in the ordinary course of business.
On or before the Closing, all intercompany and intracompany accounts and
contracts between the Business, on the one hand, and the Seller and its
Affiliates, on the other hand, shall be canceled without any payment or further
liability on the part of the Business or Seller and its Affiliates.
Section 5.7. Performance of Obligations. From and after the Closing
Date, Buyer shall perform and fulfill all of the obligations, liabilities and
commitments, whether arising, incurred or existing as of the Closing Date or
arising or incurred thereafter, which are included in the Liabilities.
Section 5.8. Insurance. (a) Buyer shall be responsible for any loss or
damage to the Assets which occurs on or after the
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Closing Date. Buyer also shall be responsible for all bodily injury, including
personal injury, and property damage sustained by third parties on or after the
Closing Date involving any of the Assets.
(b) Buyer shall be responsible for providing statutory Worker's
Compensation insurance for work-related injuries and illness sustained by any
employee (including any Current Employee) on and after the Closing Date. Seller
shall be responsible for providing statutory Worker's Compensation insurance for
work-related injuries and illness sustained by any employee (including any
Current Employee) prior to the Closing Date.
(c) Any insurance coverage carried by Seller shall be for the sole
benefit of Seller. Neither Buyer nor any Affiliate of Buyer shall have any
interest in, claim to or rights under any insurance policies owned by any
Continuing Affiliate. Any insurance coverage carried by Buyer shall be for the
sole benefit of Buyer. Neither Seller nor any Affiliate of Seller shall have any
interest in, claim to or rights under any insurance policies owned by Buyer.
Section 5.9. Additional Covenant Regarding Intellectual Property.
Buyer shall, and shall cause its Affiliates to, cease use of any corporate
logo, name or trademark consisting of, comprising or containing the name
"Colgate-Palmolive Company," the name "Institutional Products Division" or
any derivative or combination thereof in connection with the sale and
distribution of the products of the Business upon the earlier to occur of (i)
three months after the Closing Date and (ii) depletion of existing packaging,
advertising and
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other materials bearing any such logo, name or trademark. Except as set forth in
this Section 5.9, Buyer and its Affiliates shall have no right to use the name
"Colgate-Palmolive Company," the name "Institutional Products Division" or any
derivative or combination thereof.
Section 5.10. Exclusivity. Seller agrees that from and after the date
hereof and until the earlier to occur of the Closing or the termination of this
Agreement in accordance with Article XI, none of Seller and its Affiliates, nor
any of their respective officers, directors, employees, agents, representatives
or advisors (including, without limitation, investment bankers, attorneys and
accountants), will, directly or indirectly, (i) solicit, initiate or encourage
the submission of any inquiries, indications of interest, proposals or offers
from any corporation, partnership, person, entity or group, other than Buyer and
its Affiliates ("Third Parties"), concerning the sale of all or a significant
portion of the assets of the Business or a merger, consolidation, sale or any
other business combination transaction involving the Business, other than the
transactions contemplated by this Agreement, (ii) participate in any discussions
or negotiations regarding any of the foregoing, with or provide any information
concerning the Business or any of the foregoing to, any Third Parties, (iii)
otherwise cooperate in any way, with, or assist or participate in, facilitate or
encourage, any effort or attempt by any Third Parties to do or seek any of the
foregoing, provided that this covenant shall not prevent the furnishing of
information concerning the Business to Seller's lenders or customers or similar
parties in the ordinary course of the conduct of the Business. Seller will
notify Buyer if any Third Party makes any such inquiry, indication of interest,
proposal or offer between the date hereof and the earlier to
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occur of the Closing or the termination of this Agreement in accordance with
Article XI.
5.11. Transition. (a) Seller will refer all customer inquiries
relating to the Business to Buyer from and after the Closing.
(b) Seller and Buyer shall negotiate in good faith the terms and
conditions of the Transition Services Agreement pursuant to which Seller shall
provide to Buyer services of the type described in Schedule 5.11(b) for the
period specified therein, in consideration of which Buyer shall pay to Seller
the fees mutually agreed by Buyer and Seller and reflected in the Transition
Services Agreement.
Section 5.12. Product Returns. (a) Responsibility for returns of
products of the Business manufactured by Seller prior to the Closing Date, where
Buyer can demonstrate by clear and convincing evidence that such products have
been returned due to manufacturing defects, shall be allocated between Seller
and Buyer as follows:
(i) Seller shall be responsible for any Liabilities relating to
such product returns to the extent that such Liabilities, in the aggregate,
exceed $100,000. Buyer shall be obligated to acquire any such returned products
which can be re-worked or recycled into saleable inventory and to effect such
re-working or recycling.
(ii) Buyer shall be responsible for any Liabilities relating to
such product returns which in the aggregate do not exceed $100,000.
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(b) Liabilities relating to returns of products of the
Businessanufactured by Seller prior to the Closing Date, which occur within
60 days of the Closing Date and are solely attributable to errors by Seller
and its employees or agents in connection with the sale and distribution of
the products (for example, salesmen errors, order entry errors and warehouse
errors), shall be the responsibility of Seller, but Buyer shall be obligated
to acquire any such returned product which constitutes saleable inventory at
the standard cost(s) therefor.
(c) As used in this Section 5.12, "Liabilities" shall mean the
amount of any credits or refunds given to customers on account of such returns,
plus freight and, if applicable, the cost of re-working or recycling the
returned product, less the standard cost of the returned product.
Section 5.13. Nonassignable Contracts and Permits. Notwithstanding
anything to the contrary in this Agreement, this Agreement shall not constitute
an agreement to assign or transfer any instrument, contract, lease, permit or
other agreement or arrangement or any claim, right or benefit arising thereunder
or resulting therefrom if an assignment or transfer or an attempt to make such
an assignment or transfer without the consent of a third party or Governmental
Authority would constitute a breach or violation thereof or affect adversely the
rights of Buyer or Seller thereunder; and any transfer or assignment to Buyer by
Seller of any interest under any such instrument, contract, lease, permit or
other agreement or arrangement that requires the consent of a third party or
Governmental Authority shall be made subject to such consent or approval being
obtained. In the event any such consent or approval is not obtained on or prior
to the
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Closing Date, Seller shall continue to use all reasonable efforts to obtain any
such approval or consent after the Closing Date until such time as such consent
or approval has been obtained, and Seller will cooperate with Buyer in any
lawful and economically feasible arrangement to provide that Buyer shall receive
the interest of Seller, as the case may be, in the benefits under any such
instrument, contract, lease or permit or other agreement or arrangement,
provided that Buyer shall undertake to pay or satisfy the corresponding
liabilities for the enjoyment of such benefit to the extent Buyer would have
been responsible therefor hereunder if such consent or approval had been
obtained and, provided, further, that such cooperation shall not include any
requirement of Seller to expend money, incur any loss, cost or expense, commence
any litigation or offer or grant any accommodation (financial or otherwise) to
any third party, unless Seller is fully indemnified to its satisfaction by
Buyer. If and to the extent that such arrangement cannot be made with respect to
any such contract or license, Buyer shall not have any obligation with respect
thereto, any other provision of this Agreement to the contrary notwithstanding.
Section 5.14. Covenant Not to Compete. For a period of five years from
and after the Closing Date (the "Restricted Period"), Seller shall not engage
directly or indirectly in any business competitive with the Business in the
United States (a "Competing Business"); provided, however, that this Section
5.14 shall not restrict or prohibit any Continuing Affiliate from:
(a) acquiring any investment of less than fifteen percent of the
outstanding shares of any public company that engages, to any extent, in a
Competing Business; or
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(b) acquiring any business where fifteen percent or less of such
business's revenues is derived from activities that constitute a Competing
Business, provided that the competing portion of such business is disposed of
within 18 months of its acquisition.
If the final judgment of a court of competent jurisdiction declares
that any term or provision of this Section 5.14 is invalid or unenforceable, the
parties agree that such court 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 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.
Section 5.15. Non-Solicitation. For a period of two years from and
after the Closing Date, Seller shall not, and shall cause its Affiliates not to,
for its own benefit or as agent of another, without the prior written consent of
Buyer, directly solicit any Current Employee of the Business who becomes an
employee of Buyer at the Closing. For a period of two years from and after the
Closing Date, except as otherwise set forth in the Transition Agreement, Buyer
shall not, and shall cause its Affiliates not to, for its own benefit or as
agent of another, without the prior written consent of Seller, directly solicit
any Current Employee of the Business or the Institutional Products Division of
Seller who does not become an employee of Buyer at the Closing.
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Section 5.16. Confidentiality. Seller will not at any time during the
Restricted Period divulge, furnish to or make accessible to anyone, without
Buyer's prior written consent, any confidential information relating to the
Business (except to the extent that such information is or may be used in the
ordinary course of the businesses of Seller other than the Business) including,
without limitation confidential or secret processes, inventions, discoveries,
improvements, formulae, plans, materials, devices, ideas or know-how, whether
patentable or not, customer lists, supplier lists and pricing arrangements with
customers or suppliers; provided, however, that nothing herein shall prohibit
Seller from complying with any order or decree of any court of competent
jurisdiction or governmental authority. Seller agrees to use all reasonable
efforts to give Buyer timely notice of the receipt of any such order or decree,
and the foregoing provision shall not apply to any information which is or
becomes generally available to the public other than through a breach of this
Agreement.
Section 5.17. Inventory. On or before the Closing Date, Seller shall
recycle, rework or dispose of the product described in Schedule 5.17 that is
held in inventory as of the date hereof.
Section 5.18. Warehouse. On or before the Closing Date, Seller shall
remove all products relating to businesses other than the Business from the
warehouse facilities of Seller located in Texarkana, Texas.
Section 5.19. Sales and Promotions During Last Two Months. Seller
anticipates that the net sales of the Business
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for the two calendar months ending immediately prior to the Closing Date
(calculated in the same manner as the net sales shown in the Financial
Information) will not increase by more than 12.5% when compared to the net sales
of the Business for the comparable period in 1996. However, if the net sales
for such two-month period increase by more than 12.5%, Seller will pay to Buyer
after the Closing an amount equal to 25% of all such net sales in excess of
12.5%. It is understood that the foregoing provision shall not apply if Buyer
and Seller agree to extend the Closing Date beyond December 31, 1997.
In addition, Seller agrees that it has not and will not run any
unusual sales promotions for the Business in the second half of 1997 that are
not consistent with its normal sales promotions and practices, without the prior
written consent of the Buyer.
Section 5.20. Pre-Closing Costs. The parties acknowledge that
Buyer may be invoiced by third parties or otherwise be liable for costs which
are Excluded Liabilities (the "Pre-Closing Costs"), such as rebates to
customers of the Business that relate to sales made to such customers by or
on behalf of Seller prior to the Closing. Seller will reimburse Buyer for
Pre-Closing Costs on a monthly basis, upon presentation by Buyer of invoices
and related documentation reasonably satisfactory to Seller. Buyer agrees
that Seller may inspect Buyer's books and records as necessary to verify the
amount of such Pre-Closing Costs. Notwithstanding the foregoing, Buyer shall
forward to Seller any invoices it receives that are addressed to Seller and,
to the extent such invoices relate to Excluded Liabilities, Seller shall pay
such invoices.
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Section 5.21. Capital Expenditure Projects. Promptly after the
Closing Date, Buyer shall refund to Seller any and all deposits made by Seller
prior to the Closing with respect to any capital expenditure projects relating
to the Business pursuant to which capital items are delivered or completed on or
after the Closing Date. Such deposits, which are currently estimated to be as
set forth in Schedule 5.4, shall be set forth in a schedule delivered to Buyer
by Seller at the Closing.
ARTICLE VI
Employee Benefits
Section 6.1. Buyer's Obligations. (a) Effective as of the Closing
Date, Buyer shall continue the employment of all persons employed by Seller or
any Affiliate of Seller at the manufacturing facility located in Texarkana,
Texas in connection with the Business on the Closing Date (including, without
limitation, any employee on short-term or long-term disability, or on unpaid
leave pursuant to the Family and Emergency Medical Leave Act, on the Closing
Date who returns to work not more than 180 days following the Closing Date)
(collectively, the "Current Employees") on substantially the same terms as those
enjoyed by such Employees immediately prior to the Closing Date.
(b) For a period of one year following the Closing, Buyer will
maintain compensation and employee benefit plans, arrangements and perquisites
for Current Employees that have principal terms as outlined in Schedule 6.4,
subject to the following provisions of this Article VI.
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(c) For a period of one year following the Closing, Buyer will not
terminate the employment of any Current Employee, except for reasons of
misconduct or substandard performance.
Section 6.2. Employment and Severance Agreements.
(a) Notwithstanding the provisions of Section 6.1(c), Buyer will provide
severance benefits to Current Employees whose employment is terminated within
one year after the Closing comparable to those paid in the event of a business
restructuring in accordance with the existing Seller severance practice as
described in Schedule 6.2 hereto.
(b) In addition, Buyer shall provide severance benefits to any Current
Employee who terminates his or her employment following a violation by Buyer of
Section 6.1(a) or 6.1(b) comparable to those paid in the event of a business
restructuring in accordance with the existing Seller severance practice.
Section 6.3. Annual and Long-Term Incentive Plans.
(a) Seller agrees to make or cause to be made at or prior to the Closing Date
any payments which may be due or become due to Current Employees prior to the
Closing Date pursuant to any incentive plans maintained by Seller.
(b) Buyer will assume and be responsible for any payments that may
become due on or after the Closing Date to any Current Employee under any
incentive plans maintained by Seller, including without limitation any such
payments that accrue in whole or in part before the Closing Date but do not
become payable until after the Closing Date. Seller will reimburse Buyer
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for the amount of such payments which relate to the period during which such
Current Employee was employed by Seller prior to Closing, upon presentation by
Buyer of an invoice and related documentation reasonably satisfactory to Seller.
Buyer agrees that Seller may inspect Buyer's books and records as necessary to
verify the amount of such payments and the portion thereof being reimbursed by
Seller.
Section 6.4. Benefit Plans. (a) Pension Plans. (i) Prior to the
Closing Date, but contingent on the Closing, Seller shall fully vest all
Employees in their accrued benefits under each U.S. Pension Plan effective as of
the Closing Date.
(ii) In the event that Buyer maintains as of the Closing Date, or
implements at any time following the Closing, a defined benefit pension plan
(the "Pension Plan") covering its own employees, then Buyer immediately shall
offer participation in such Pension Plan to all Current Employees who are
participants in any U.S. Pension Plan immediately prior to the Closing Date
(disregarding any action taken by Seller prior to the Closing Date pursuant to
Section 6.4(a)(i) above). Further, Buyer agrees to provide Current Employees
with credit for service with Seller and its Affiliates for all purposes under
such Pension Plan, including, without limitation, eligibility, vesting and
benefit accrual.
(b) Savings Plan. (i) As soon as practicable after the Closing Date,
and effective as of the Closing Date, Buyer shall have in effect a defined
contribution plan with a salary reduction arrangement that covers Current
Employees and meets the requirements of Sections 401(a) and 401(k) of the Code
and offers, at a minimum, the principal terms outlined on Schedule
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6.4 ("Buyer DC Plan"). Buyer agrees that all service credited under the Savings
and Investment Plan (the "Seller DC Plan") as of the Closing Date with respect
to Current Employees shall be credited under Buyer DC Plan for all plan
purposes, including eligibility, vesting and, if applicable, employer
contribution level.
(ii) Seller agrees to fully vest, effective as of the Closing Date,
but contingent on the Closing, Employees who are participants in Seller DC Plan
in their account balances under Seller DC Plan.
(c) Medical/Dental Plans. Buyer agrees that Current Employees
and their dependents eligible to participate in the current medical and dental
Benefit Plans of Seller shall be eligible for immediate coverage under medical
and dental plans on the principal terms outlined in Schedule 6.4 ("Buyer's
Health Plans"), effective as of the Closing Date. Any and all waiting periods
and pre-existing condition clauses shall be waived under Buyer's Health Plans
with respect to such Current Employees and their eligible dependents. In
addition, Buyer shall cause Buyer's Health Plans to recognize any out-of-pocket
medical and dental expenses incurred by such Current Employees and their
eligible dependents prior to the Closing Date and during the calendar year in
which such Closing Date occurs for purposes of determining their deductibles and
out-of-pocket maximums under Buyer's Health Plans. Any xxxx received for
services which overlapped the period prior to and subsequent to the Closing
Date, and not specifically allocated by the service provider in the first
instance or upon request, shall be divided on an equitable basis between Buyer's
Health Plans and Seller's Health Plans, based on the date the services were
rendered.
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(d) Welfare Plans. Buyer agrees to provide coverage to Current
Employees for short- and long-term disability, life insurance, business travel
accident and similar Benefit Plans of Seller (collectively, "Welfare Plans") on
the principal terms outlined in Schedule 6.4. Any and all waiting periods and
preexisting condition clauses shall be waived from and after the Closing with
respect to Current Employees.
Section 6.5. Miscellaneous. (a) Buyer agrees that all service of an
Employee with Seller or any of its Affiliates shall be recognized by Buyer for
all employee benefits purposes.
(b) Seller and Buyer shall cooperate with each other in all respects
relating to any actions to be taken pursuant to this Article VI.
(c) Buyer will permit Current Employees to schedule and take accrued
but unused vacation and bonus days with pay, with respect to the fiscal year of
Seller in which the Closing occurs, in accordance with the applicable policies
of Seller in effect as of the Closing Date.
(d) Seller and Buyer agree that, with respect to filing and furnishing
IRS Forms W-2 and W-3 and 941, from and after the Closing Date (i) Seller and
Buyer shall report on a "predecessor-successor" basis with respect to any of
Seller's employees employed by Buyer or its Subsidiaries after the Closing Date,
(ii) Seller shall be relieved of furnishing Forms W-2 to such employees to whom
they would have been obliged to furnish such forms for the past full calendar
year, and (iii) Buyer shall
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assume the obligation of Seller to furnish such forms to such employees for the
past full calendar year.
(e) Except as expressly set forth in this Article VI, from and after
the Closing Date, the Continuing Affiliates shall have no liability or
obligation with respect to, and Buyer and its Subsidiaries shall assume and be
solely responsible for, the compensation or employee benefits of Employees (i)
which arose prior to the Closing Date and are assumed by Buyer pursuant to the
provisions of this Article VI or (ii) which arise after the Closing Date.
ARTICLE VII
Conditions of Buyer's Obligation to Close
Buyer's obligation to consummate the Purchase shall be subject to the
satisfaction on or prior to the Closing Date, or waiver by Buyer, of all of the
following conditions:
Section 7.1. Representations, Warranties and Covenants of Seller.
The representations and warranties of Seller contained in this Agreement shall
be true and correct in all material respects as of the date hereof and on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date, except for representations and
warranties that speak as of a specific date or time other than the Closing Date
(which need only be true and correct in all material respects as of such date or
time) and the covenants and agreements of Seller to be performed on or before
the Closing Date in accordance with this Agreement shall have been duly
performed in all material respects.
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Section 7.2. Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 3.6(b) or 4.3 shall have been filed, made or
obtained, and all waiting periods applicable under the HSR Act shall have
expired or been terminated.
Section 7.3. No Injunction. At the Closing Date, there shall be no
Order of any nature of any Governmental Authority of competent jurisdiction that
is in effect that restrains or prohibits the consummation of the Purchase.
Section 7.4. Other Agreements. Buyer and Seller shall have executed
and delivered the License Agreement and the Transition Services Agreement.
ARTICLE VIII
Conditions to Seller's Obligation to Close
Seller's obligation to consummate the Purchase is subject to the
satisfaction on or prior to the Closing Date, or waiver by Seller, of all of the
following conditions:
Section 8.1. Representations, Warranties and Covenants of Buyer. The
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects as of the date hereof and on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date, except for representations and
warranties that speak as of a specific date or time other than the Closing Date
(which need only be true and
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correct in all material respects as of such date or time) and the covenants and
agreements of Buyer to be performed on or before the Closing Date in accordance
with this Agreement shall have been duly performed in all material respects.
Section 8.2. Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 3.6(b) or 4.3 shall have been filed, made or
obtained, and all applicable waiting periods under the HSR Act shall have
expired or been terminated.
Section 8.3. No Injunction. At the Closing Date, there shall be no
Order of any nature of any Governmental Authority of competent jurisdiction that
is in effect that restrains or prohibits the consummation of the Purchase.
Section 8.4. Resale Certificates. Buyer shall have delivered to Seller
properly executed resale exemption certificates containing the requisite tax
registration numbers for the inventory being transferred by Seller pursuant to
this Agreement.
ARTICLE IX
Survival; Indemnification
Section 9.1. Survival; Sole Remedy. (a) The representations and
warranties of the parties contained in this Agreement shall survive the Closing
solely for purposes of indemnification pursuant to Section 9.2 hereof and shall
terminate on the first anniversary of the Closing. The covenants and
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agreements of the parties contained in this Agreement that contemplate or may
involve actions to be taken or obligations in effect (i) prior to the Closing,
shall not survive the Closing and (ii) after the Closing, shall survive in
accordance with their terms.
(b) Except in the case of fraud, intentional misrepresentation or
intentional breach of covenants, the parties hereto hereby agree that the
indemnification provisions of this Article IX and Article X shall be the sole
method of recourse for indemnity, contribution or reimbursement or payment of
Covered Liabilities by one party against another with respect to this Agreement
and the transactions contemplated hereby, including any Covered Liability
arising out of any breach of any representation or warranty. No claim of any
kind relating in any way to this Agreement, or the transactions contemplated
hereby (other than claims for fraud, intentional misrepresentation or
intentional breach of covenants) may be brought against either party hereto
except pursuant to this Article IX or Article X.
Section 9.2. Indemnification by Buyer or Seller.
(a) From and after the Closing Date, Buyer shall, subject to the notification
and timing requirements and limitations provided in this Section 9.2 and Section
9.1 hereof, indemnify and hold harmless the Continuing Affiliates, each of their
respective directors, officers, employees and agents, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
"Seller Indemnified Parties") (i) from and against any Covered Liability arising
out of any breach of any representation or warranty made by or on behalf of
Buyer under this Agreement, (ii) from and against any Covered Liability arising
out of any breach of any covenant or agreement which
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survives the Closing made by or on behalf of Buyer under this Agreement, and
(iii) from and against any and all Covered Liabilities incurred by or asserted
against any of Seller Indemnified Parties in connection with or arising from (A)
the Liabilities or (B) the ownership of the Assets, or the operation of the
Business, by Buyer and its Subsidiaries from and after the Closing (except for
Excluded Liabilities).
(b) From and after the Closing Date, Seller shall, subject to the
notification and timing requirements and limitations provided in this Section
9.2 and Section 9.1 hereof, indemnify and hold harmless Buyer, Buyer's
Affiliates, each of their respective directors, officers, employees and agents,
and each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "Buyer Indemnified Parties") (i) from and against any Covered
Liability arising out of any breach of any representation or warranty made by or
on behalf of Seller under this Agreement, provided that Seller shall have no
obligation hereunder to indemnify, or to hold harmless, the Buyer Indemnified
Parties in connection with any breach of the representations or warranties made
by Seller hereunder of which Buyer had actual knowledge at or prior to the
Closing, (ii) from and against any Covered Liability arising out of any breach
of any covenant or agreement which survives the Closing made by or on behalf of
Seller under this Agreement, (iii) from and against any Covered Liability
relating to the environmental condition of the real property included in the
Assets to the extent that Buyer can demonstrate by clear and convincing evidence
that such environmental condition was caused by an action of Seller that was in
violation of Environmental Laws existing at the time of such action by Seller,
and (iv) from and against any and all Covered Liabilities (A) incurred by or
asserted against any of
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the Buyer Indemnified Parties in connection with or arising from the Excluded
Liabilities or (B) other than the Liabilities, incurred by or asserted against
any of Buyer Indemnified Parties in connection with or arising from the
ownership of the Assets, or the operation of the Business, by Seller prior to
the Closing.
(c) No indemnity may be sought pursuant to this Agreement unless
written notice ("Notice") thereof, setting forth in reasonable detail the basis
of the claim, shall have been delivered to the party against whom the indemnity
is sought prior to (i) the first anniversary of the Closing, in the case of
Sections 9.2(a)(i) and 9.2(b)(i); (ii) the expiration of the applicable survival
period of the particular covenant or agreement in question in accordance with
its terms, in the case of Sections 9.2(a)(ii) and 9.2(b)(ii); (iii) the fifth
anniversary of the Closing, in the case of Section 9.2(b)(iii) or (iv) with
respect to the matters covered in Article X hereof, the expiration of the
applicable statute of limitations with respect to the particular Tax liabilities
in question (giving effect to any extension thereof).
(d) Notwithstanding any provision to the contrary contained in this
Agreement, Buyer shall not make any claim against Seller for indemnity,
contribution or reimbursement or payment of Covered Liabilities under Section
9.2(b)(i), (ii) or (iii) until the dollar amount of all loss to Buyer arising
from claims with respect to this Agreement or the transactions contemplated
hereby, after the reductions described in subsection (e) below, shall exceed in
the aggregate an amount equal to five percent of the Purchase Price, and, if
such amount is exceeded, Seller shall be required to pay only the amount by
which such aggregate loss to Buyer for all such claims exceeds five percent
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of the Purchase Price; provided that the obligations of Seller under Sections
9.2(b)(i), (ii) and (iii) shall not exceed in the aggregate an amount equal to
40% of the Purchase Price.
(e) In calculating any amount of loss payable to a Seller Indemnified
Party pursuant to Section 9.2(a) or payable to a Buyer Indemnified Party
pursuant to Section 9.2(b), the amount of any such loss shall be reduced by (i)
any reduction in tax liability as a result of the facts giving rise to the claim
for indemnification and (ii) any insurance recoveries by the party seeking
indemnification offsetting the amount of loss. Any payment made pursuant to this
Section 9.2 shall be treated by Seller and Buyer as an adjustment to the
purchase price provided for herein, and Seller and Buyer agree not to take any
position inconsistent therewith for any purpose. After the Closing, if
reasonably requested in writing by Buyer, Seller will, and will cause its
Affiliates to, file any insurance claims with respect to matters relating to the
Business covered under any occurrence-based insurance policies maintained by
Seller or any of its Affiliates prior to the Closing with respect to the
Business. The parties agree to cooperate in carrying out the foregoing. Buyer
shall reimburse Seller for any costs incurred by Seller or its Affiliates in
connection with compliance with this covenant; provided that Buyer shall not be
responsible for any insurance premiums paid or payable by Seller or any of its
Affiliates unless, as a direct result of Seller's compliance with this covenant,
its insurance premiums are increased and then only to the extent of such
increase.
Section 9.3. Third Party Claims. If a claim by a third party is made
against an indemnified party (i.e., a Seller Indemnified Party or a Buyer
Indemnified Party), and if such
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indemnified party intends to seek indemnity with respect thereto under Articles
IX or X, such indemnified party shall promptly notify the indemnifying party in
writing of such claims setting forth such claims in reasonable detail. The
indemnifying party shall have forty-five (45) days after receipt of such notice
to undertake, through counsel of its own choosing and at its own expense, the
defense thereof. If the indemnifying party elects to undertake such defense, the
indemnified party shall cooperate with it in connection therewith and the
indemnified party may participate in such settlement or defense through counsel
chosen by such indemnified party, it being understood that the indemnifying
party shall control such defense and that the fees and expenses of counsel
chosen by the indemnified party shall be borne by such indemnified party. If the
indemnifying party elects not to undertake such defense, the indemnifying party
will be entitled, at its own expense, to participate in such defense. Whether or
not the indemnifying party shall have assumed the defense of a third party
claim, (a) the indemnified party shall not admit any liability with respect to,
or settle, compromise or discharge, such third party claim without the
indemnifying party's prior written consent (which consent shall not be
unreasonably withheld), and (b) neither party shall, without the written consent
of the other party, settle or compromise or consent to the entry of any judgment
with respect to any action or third party claim if the effect thereof is to
admit any criminal liability by, or to permit any injunctive relief or other
order providing non-monetary relief to be entered against, the other party. In
the case of any inconsistency between the provisions of this Section 9.3 and the
provisions of Section 10.6, the provisions of Section 10.6 shall govern.
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ARTICLE X
Tax Matters
Section 10.1. Tax Indemnification by Seller. Except as provided in
Section 10.2, Seller shall be liable for, and shall hold the Buyer Indemnified
Parties harmless from and against any and all (a) Taxes with respect to the
Business due or payable by Seller for any taxable period or portion thereof
ending (or deemed pursuant to Section 10.3 to end) prior to the Closing Date,
and (b) Income Taxes attributable to the consummation of the transactions
contemplated hereby.
Section 10.2. Tax Indemnity and Covenant by Buyer. Buyer shall be
liable for, and shall hold Seller Indemnified Parties harmless from and against,
the following Taxes with respect to the Business: (a) except as provided in
Section 10.1, any and all Taxes for any taxable period beginning (or deemed
pursuant to Section 10.3 to begin) on or after the Closing Date, due or payable
with respect to the Business, (b) any and all Taxes not incurred in the ordinary
course of business attributable to the acts or omissions of Buyer or Buyer's
Affiliates, after the Closing on the Closing Date, and (c) any sales, transfer,
documentary, use, stamp, filing and similar Taxes and fees, whether levied on
Buyer, Seller or any of their respective Affiliates, resulting from the
transactions contemplated by this Agreement.
Section 10.3. Allocation of Certain Taxes. For purposes hereof, in the
case of any Taxes that are imposed on a periodic basis and are payable for a
period that begins before
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the Closing Date and ends after the Closing Date, the portion of such Tax that
shall be deemed to be payable for the portion of the period ending on the day
prior to the Closing Date shall (i) in the case of any Taxes, other than Taxes
based upon or related to income or receipts, be deemed to be the amount of such
Taxes for the entire period (or, in the case of such Taxes determined on an
arrears basis, the amount of such Taxes for the immediately preceding period),
whether actually paid before, during, or after such period, multiplied by a
fraction the numerator of which is the number of calendar days in the period
ending on the day prior to the Closing Date and the denominator of which is the
number of calendar days in the entire period, and (ii) in the case of any Taxes
based upon or related to income or receipts (including but not limited to
withholding Taxes), be deemed equal to the amount which would be payable if the
taxable year ended on the close of business on the day prior to the Closing
Date. Any credits for such a period shall be prorated, based upon the fraction
employed in clause (i) of the preceding sentence. Such clause (i) shall be
applied with respect to Taxes for such period relating to capital (including net
worth or long-term debt) or intangibles by reference to the level of such items
on the day prior to the Closing Date. In the event that Seller or any of its
Affiliates has prepaid any Taxes referred to herein, to the extent that such
Taxes exceed Seller's share of such Taxes under this Section 10.3, Buyer shall
pay Seller the amount of such excess within thirty (30) days of the Closing Date
upon receipt from Seller at the Closing of a statement detailing such
prepayments. Such statement and the calculations contained therein shall, at
Buyer's election, be reviewed within such 30-day period by a nationally
recognized accounting firm selected by and paid for by Buyer and the
determination of such accounting firm shall be final.
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Section 10.4. Filing Responsibility. (a) Seller shall prepare and file
the following Returns with respect to the Business:
(i) all Returns for Income Taxes for any taxable period or portion
thereof ending on or before the day prior to the Closing Date
and without taking into account Section 10.3; and
(ii) all other Returns required to be filed (taking into account
extensions) prior to the Closing Date.
(b) Buyer shall, subject to the provisions of paragraph (c) of
this Section 10.4, file all other Returns with respect to the Business.
(c) With respect to any Return for Income Taxes for taxable
periods beginning before the Closing Date and ending after the Closing Date,
Buyer shall consult with Seller concerning such Return and shall report all
items with respect to the period ending on the day prior to the Closing Date in
accordance with the instructions of Seller, unless otherwise agreed by Seller
and Buyer. Buyer shall provide Seller with a copy of its proposed Return at
least 15 days prior to the filing of such Return, and Seller may provide
comments to Buyer, which comments shall be delivered to Buyer within seven days
of receiving such copies from Buyer.
Section 10.5. Refunds. (a) Seller shall be entitled to any refunds or
credits of Taxes attributable to or arising in
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taxable periods ending (or deemed pursuant to Section 10.3 to end) on or before
the Closing Date with respect to the Business.
(b) Buyer shall be entitled to any refunds or credits of Taxes
attributable to or arising in taxable periods beginning (or deemed pursuant to
Section 10.3 to begin) on or after the Closing Date with respect to the
Business.
(c) Buyer shall forward to Seller or reimburse Seller for any refunds
or credits due Seller (pursuant to the terms of this Article) after receipt
thereof, and Seller shall promptly forward to Buyer or reimburse Buyer for any
refunds or credits due Buyer (pursuant to the terms of this Article) after
receipt thereof.
Section 10.6. Cooperation and Exchange of Information. (a) As soon as
practicable, but in any event within fifteen (15) days after Seller's request,
from and after the Closing Date, Buyer, at Buyer's expense, shall provide Seller
with such cooperation and shall deliver to Seller such information, data and
documents concerning the pre-Closing operations of the Business, including
providing the information and data required by Seller's customary tax and
accounting questionnaires, and make available such knowledgeable employees of
Buyer as Seller may request, in order to enable Seller to (i) complete and file
all Returns which it may be required to file with respect to the operations and
business of the Business up to the Closing Date, (ii) respond to and defend
audits by or contests with any Taxing Authorities with respect to such period,
(iii) determine the right to, and prosecute any claim for, refunds with respect
to such period, and (iv) otherwise enable Seller to satisfy its internal
accounting, tax and other legitimate requirements. Such
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cooperation and information shall include, but not be limited to, (i) provision
of powers of attorney for the purpose of signing Returns and refund claims and
defending audits and Tax contests, (ii) promptly forwarding copies of
appropriate notices and forms or other communications received from or sent to
any Taxing Authority which relate to the Business, and (iii) providing copies of
all relevant Returns, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by any Taxing
Authority and records concerning the ownership and tax basis of property, which
Buyer may possess. Buyer shall make its employees and facilities available on a
mutually convenient basis to provide explanations of any documents or
information provided hereunder and shall furnish such facilities and other
assistance to representatives of Taxing Authorities as may be requested by
Seller or such Taxing Authorities in connection with any audit, refund claim, or
contest involving Taxes.
(b) Buyer and Seller and their respective Affiliates shall cooperate
in the preparation of all Returns relating in whole or in part to taxable
periods or portions thereof beginning prior to the Closing Date that are
required to be filed after such date. Such cooperation shall include, but not be
limited to, furnishing prior years' Returns or Return preparation packages
illustrating previous reporting practices or containing historical information
relevant to the preparation of such Returns, and furnishing such other
information within such party's possession requested by the party filing such
Returns as is relevant to their preparation. In the case of any state, local or
foreign joint, consolidated, combined, unitary or group relief system Returns,
such cooperation shall also relate to any other
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taxable periods in which one party could reasonably require the assistance of
the other party in obtaining any necessary information.
(c) Seller shall have the right, at its own expense, to (i)
control and resolve any audit or examination by any Taxing Authority ("Tax
Audit"), (ii) prosecute any claim for refund, and (iii) contest, resolve and
defend against any assessment, notice of deficiency, or other adjustment or
proposed adjustment, relating to any and all Taxes for any taxable period ending
prior to the Closing Date with respect to the Business. Buyer shall have the
right, at its own expense, to (i) control and resolve any other Tax Audit, (ii)
prosecute any other claim for refund, and (iii) contest, resolve and defend
against any other assessment, notice of deficiency, or other adjustment or
proposed adjustment relating to Taxes with respect to the Business, provided
that, with respect to any Taxes for any taxable period beginning before the
Closing Date and ending after the Closing Date, each party shall consult with
the other party with respect to the resolution of any issue that would affect
the other party, and not settle any such issue, or file any amended return
relating to any such issue, without the consent of the other party, which
consent shall not unreasonably be withheld. Each party shall furnish the other
party with its cooperation in a manner comparable to that described in paragraph
(a) of this Section 10.6 to effect the purposes of this Section. Each party
agrees to give the other party prompt written notice of any matter that the
other party would have the right to control pursuant to this Section 10.6(c).
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(d) If a party fails to provide any information requested by the
other party in the time specified herein, or if no time is specified pursuant to
this Section 10.6, within a reasonable period, or otherwise fails to do any act
required of it under Section 9.3 or Article X, then the party so failing shall
be obligated, notwithstanding any other provision hereof, to indemnify and hold
harmless the Seller Indemnified Parties or the Buyer Indemnified Parties, as
applicable, from and against any and all costs, claims or damages, including all
Taxes or deficiencies thereof, payable as a result of such failure.
(e) Payment of any amounts due under this Article X shall be made
within fifteen (15) days following written notice by the indemnified party that
payment of such amounts to the appropriate Taxing Authority is due, or about to
become due, except that such payment is not required to be made earlier than
five days before it is due. In the case of a Tax that is contested in accordance
with the provisions of Articles IX and X, payment of the Tax to the appropriate
Taxing Authority shall not be considered to be due before the earlier of: (i)
when a final determination that such Tax is due is made by the appropriate
Taxing Authority or a court, or (ii) when the liability for such Tax is
determined through a compromise or settlement with a Taxing Authority.
ARTICLE XI
Termination
Section 11.1. Termination. This Agreement may be terminated at any
time prior to the Closing by:
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(a) The mutual consent of Seller and Buyer; or
(b) Either Seller or Buyer if the Closing has not occurred by
the close of business on December 31, 1997 and if the failure to consummate the
Purchase on or before such date did not result from the failure by the party
seeking termination of this Agreement to fulfill any undertaking or commitment
provided for herein that is required to be fulfilled prior to Closing.
Section 11.2. Procedure and Effect of Termination. In the event of
termination of this Agreement by Seller or Buyer pursuant to Section 11.1,
written notice thereof shall forthwith be given by the terminating party to the
other party hereto, and this Agreement shall thereupon terminate and become void
and have no effect, and the transactions contemplated hereby shall be abandoned
without further action by the parties hereto, except that the provisions of
Sections 5.1(b) and 12.4 shall survive the termination of this Agreement;
provided, however, that such termination shall not relieve any party hereto of
any liability for any breach of this Agreement or, except as set forth in
Section 12.12, constitute a waiver or bar by any party of any rights or remedies
at law or in equity it may have for damages caused by reason of a breach of this
Agreement by another party. If this Agreement is terminated as provided herein
all filings, applications and other submissions made pursuant to Sections 3.6(b)
and 4.3 shall, to the extent practicable, be withdrawn from the agency or other
persons to which they were made.
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ARTICLE XII
Miscellaneous
Section 12.1. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section 12.1, provided receipt of copies of such counterparts is confirmed.
Section 12.2. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the choice of law principles thereof.
Section 12.3. Entire Agreement; No Third Party Beneficiaries. This
Agreement (including agreements incorporated herein) and the Schedules and
Exhibits hereto contain the entire agreement between the parties with respect to
the subject matter hereof and there are no agreements, understandings,
representations or warranties between the parties other than those set forth or
referred to herein. Except for (a) Sections 9.2 and 9.3, which are intended to
benefit, and to be enforceable by, Seller Indemnified Parties and Buyer
Indemnified Parties, and (b) the provisions of Article VI which are intended to
benefit, and be enforceable by, the Employees, this Agreement is not intended to
confer upon any person not a party hereto
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(and their successors and assigns permitted by Section 12.6) any rights or
remedies hereunder.
Section 12.4. Expenses. Except as set forth in this Agreement, whether
or not the Purchase and the other transactions contemplated hereby are
consummated, all legal and other costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
Section 12.5. Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices to
Seller shall be addressed to:
Colgate-Palmolive Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Senior Vice President,
General Counsel and Secretary
or at such other address and to the attention of such other person as Seller may
designate by written notice to Buyer. Notices to Buyer shall be addressed to:
Candle Corporation of America
c/o Blyth Industries, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
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Attention: Xxxxx X. Xxxxxxx
Vice President,General Counsel
and Secretary
with a copy to:
Xxxx Xxxxx & Xxxxxxx LLP
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxx III, Esq.
or at such other address and to the attention of such other person as Buyer may
designate by written notice to Seller.
Section 12.6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither party hereto will assign
its rights or delegate its obligations under this Agreement without the express
prior written consent of the other party hereto.
Section 12.7. Headings; Definitions. The section and article headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement. All references
to Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated. All capitalized terms defined herein are
equally applicable to both the singular and plural forms of such terms.
Section 12.8. Consent to Jurisdiction. Each of Buyer and Seller
irrevocably submits to the exclusive jurisdiction of any New York state or
federal court sitting in The Borough of
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Manhattan, The City and State of New York, for the purposes of any Action
arising out of this Agreement or any transaction contemplated hereby. Each of
Buyer and Seller agrees to commence any Action relating hereto in any such New
York state or federal court. Each of Buyer and Seller further agrees that
service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth in Section 12.5 hereof shall be
effective service of process for any Action in New York with respect to any
matters to which it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each of Buyer and Seller irrevocably and
unconditionally waives any objection to the laying of venue of any Action
arising out of this Agreement or the transactions contemplated hereby in any New
York state or federal court sitting in The Borough of Manhattan, The City and
State of New York, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such Court that any such Action brought in
any such Court has been brought in an inconvenient forum.
Section 12.9. Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Either party hereto may, only by an instrument in writing, waive
compliance by the other party hereto with any term or provision of this
Agreement on the part of such other party hereto to be performed or complied
with. The waiver by either party hereto of a breach
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of any term or provision of this Agreement shall not be construed as a waiver of
any subsequent breach.
Section 12.10. Interpretation. For the purposes of this Agreement, "to
Seller's knowledge" shall mean the actual knowledge of (i) the following
management personnel of Seller's Institutional Products Division: President and
Chief Executive Officer, Vice President-Sales, Vice President-Marketing, and
Controller and (ii) the Texarkana Plant Manager and Texarkana Plant Controller,
in each case after due inquiry into their respective area(s) of responsibility.
Section 12.11. Severability. Any provision of this Agreement which is
invalid or unenforceable shall be ineffective to the extent of such invalidity
or unenforceability, without affecting in any way the remaining provisions
hereof.
Section 12.12. No Consequential Damages. Nothing herein is intended to
suggest that either party shall be liable under this Agreement or with respect
to the transactions contemplated hereby for consequential, special, indirect or
incidental damages, including without limitation, loss of profits or revenue,
suffered by the other party, except as otherwise available under applicable law.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties as of the day first above written.
COLGATE-PALMOLIVE COMPANY
By: /s/ Xxxxxx Xxxx
--------------------------
Name: Xxxxxx Xxxx
Title: Chairman of the Board and
Chief Executive Officer
CANDLE CORPORATION OF AMERICA
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board and
Director
* * *
The undersigned hereby agrees to cause Buyer promptly to fulfill all of its
obligations hereunder and guarantees the performance by Buyer of its obligations
hereunder.
BLYTH INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board,
Chief Executive Officer
and President
Exhibit A
ASSIGNMENT AND LICENSE AGREEMENT
This Agreement dated as of , 1997 by and between
Colgate-Palmolive Company, a Delaware corporation ("Colgate"), and Candle
Corporation of America, a New York corporation ("Candle").
1. "Purchase Agreement" as used herein shall mean the Purchase
Agreement of even date between Colgate and Candle.
2. Colgate hereby sells, assigns and transfers to Candle its full
right, title and interest in the patents and patent applications
of Schedule 1 hereof, including the right to have patents issued
to it in its name and to bring legal actions for the past
infringement thereof and to retain all recoveries.
3. (a) "Colgate's Field of Use" as used herein shall mean oral care,
personal care (including body deodorants and antiperspirants) and
household cleaning products (including those containing a fragrance),
but shall not include products used for warming, cooking, heating,
lighting or aromatherapy, or products used for the purpose of
dispersing a fragrance otherwise than through products used or
marketed as oral care, personal care or household cleaning products.
(b) "License Patents" as used herein shall mean the patents and patent
applications identified in Schedule 1 hereto, any patents that issue
therefrom, and any divisions, continuations, continuations-in-part,
reissues, reexaminations or extensions thereof.
(c) Candle hereby grants to Colgate, its Affiliates (as defined in
the Purchase Agreement), and its and their respective successors and
assigns, a world-wide, irrevocable, royalty-free exclusive right and
license under the Licensed Patents to make, have made, use, have used
and sell products within Colgate's Field of Use.
(d) The license granted hereunder shall be exclusive within Colgate's
Field of Use. Colgate agrees that it shall not, without receiving the
written consent of Candle, assign such license or any interest
therein or right thereunder to any person or entity that manufactures
or sells products that are used for warming, cooking, heating,
lighting, or aromatherapy, or products used for the purpose of
dispersing a fragrance otherwise than through products used or
marketed as oral care, personal care or household cleaning products.
Colgate further agrees promptly to notify Candle of the name and
address of any person or entity, other than an Affiliate of Colgate,
that acquires such license or any interest therein or right
thereunder.
4. Colgate makes no representation or warranty in this document with
respect to the patents and patent applications of Schedule I. All
representations and warranties with respect to such patents and
patent applications are in the Purchase Agreement.
5. In the event that Candle decides not to prosecute a patent
application of Schedule I to patent, or to maintain a patent or
patent application of Schedule I, Candle shall promptly so inform
Colgate and Colgate shall have the right to prosecute the patent
application to patent or to maintain the patent application or
patent. In the event that Colgate decides to prosecute a patent
application or to maintain a patent application or patent, Candle
shall assign all of its right, title and interest therein to Colgate,
retaining into itself either a worldwide, irrevocable, royalty-free,
nonexclusive right and license or a worldwide, royalty-bearing,
exclusive right and license to make, have made, use, have used and
sell products, other than within Colgate's Field of Use, as may be
covered by one or more of such patents or patent applications and
any divisions, extensions, continuations, continuations-in-part,
reissues and reexaminations thereof. The royalty for the foregoing
exclusive license shall be one half (1/2) of the costs and fees for
prosecuting and maintaining the Licensed Patents that are the subject
of the exclusive license.
6. Colgate shall notify Candle of any infringement of the Licensed
Patents of which it becomes aware within colgate's Field of Use. For
any such infringement within Colgate's Field of Use, Colgate may
elect, at its sole discretion and expense, whether to enforce the
Licensed Patents, and Candle shall cooperate in such enforcement
activities at the sole expense of Colgate; and Colgate shall be
entitled to retain all monetary awards recovered through such
enforcement activities. If infringement occurs outside Colgate's
Field of Use, Candle may elect, at its sole discretion and expense,
whether to enforce the Licensed Patents, and Colgate shall cooperate
in such enforcement activities at the sole expense of Candle; and
Candle shall be entitled to regain all monetary awards recovered
through such enforcement activities.
7. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to the choice of
law principles thereof.
8. All legal and other costs and expenses incurred in connection with
this Assignment/Retained License shall be paid by the party
incurring such costs and expenses.
9. All notices and other communications hereunder if in writing and
delivered personally, sent by documented overnight delivery service
or, to the extent receipt is confirmed, telecopy, telefax or other
electronic transmission service to the appropriate address or number
as set forth below.
Notices to Colgate shall be addressed to:
Colgate-Palmolive Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Senior Vice President,
General Counsel and Secretary
Notices to Candle shall be addressed to:
Candle Corporation of America
c/o Blyth Industries, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
cc: General Counsel
with a copy to:
Xxxx Xxxxx & Xxxxxxx LLP
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxx III, Esq.
10. This Agreement shall be binding upon and insure the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, this Assignment and License Agreement has been signed
by or on behalf of each of the parties as of the day first above written.
COLGATE-PALMOLIVE COMPANY CANDLE CORPORATION OF AMERICA
By: By:
-------------------------------- -----------------------------
Name: Name:
------------------------------ ---------------------------
Title: Title:
----------------------------- --------------------------
Exhibit B
OMNIBUS ASSIGNMENT
THIS ASSIGNMENT effective as of ______, between Colgate-Palmolive
Company, a corporation of the State of Delaware, with principal offices at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 X.X.X. (the "Assignor") and Candle
Corporation of America, a corporation of the State of New York, with principal
offices at 000 Xxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 X.X.X. (the
"assignee").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Assignor hereby assigns,
transfers and conveys to the Assignee all its right, title, and interest in
and to the Trademarks and the applications and registrations thereof listed
on the attached Schedule (the "Schedule"), together with all goodwill of the
business related thereto and any common law rights thereto in the countries
listed in the Schedule and any related rights based on use including the
right to xxx for past infringement.
ASSIGNOR: COLGATE-PALMOLIVE COMPANY
By:____________________________
Name:
Title:
Date:
ASSIGNEE: CANDLE CORPORATION OF AMERICA
By:____________________________
Name:
Title:
Date:
AMENDMENT NO. 1 TO PURCHASE AGREEMENT
THIS AMENDMENT (the "Amendment"), dated as of December 31, 1997, is to the
Purchase Agreement (the "Purchase Agreement"), dated as of September 30, 1997,
by and between Colgate-Palmolive Company, a Delaware corporation, and Candle
Corporation of America, a New York corporation. All capitalized terms used and
not otherwise defined herein shall have the meanings ascribed thereto in the
Purchase Agreement.
WHEREAS, on September 30, 1997, the parties hereto executed and delivered
the Purchase Agreement; and
WHEREAS, the parties hereto desire to amend the Purchase Agreement in the
manner set forth below; and
WHEREAS, Section 12.9 of the Purchase Agreement permits the amendment
thereof by the parties hereto by an instrument in writing signed by the party
against whom enforcement of such amendment is sought.
NOW THEREFORE, in consideration of the premises set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. (a) ARTICLE I of the Agreement is hereby amended by the addition of
the following definitions:
"ACCOUNTANTS" shall have the meaning set forth in Section 2.5 hereof.
"CERTIFICATE" shall have the meaning set forth in Section 2.5 hereof.
"DISPUTED ISSUES" shall have the meaning set forth in Section 2.5 hereof.
"ESCROW ACCOUNT" shall have the meaning set forth in Section 2.5 hereof.
"ESCROW AGENT" shall have the meaning set forth in Section 2.5 hereof.
"ESCROW AGREEMENT" shall have the meaning set forth in Section 2.5 hereof.
"ESCROW FUNDS" shall have the meaning set forth in Section 2.5 hereof.
"PURCHASE PRICE ADJUSTMENT" shall have the meaning set forth in Section 2.5
hereof.
1
"SPECIAL PURPOSE 1997 FINANCIAL STATEMENT" shall have the meaning set forth
in Section 2.5 hereof.
"1996 STERNO PROFIT & LOSS STATEMENT" shall have the meaning set forth in
Section 2.5 hereof.
(b) ARTICLE I of the Agreement is hereby amended by the amendment of the
following definition, which is hereby amended and restated in its entirety to
read as follows:
"PURCHASE PRICE" shall mean $70,000,000, subject to adjustment as set forth
in Section 2.5 hereof, representing the aggregate cash consideration to be paid
by Buyer for the Assets pursuant hereto."
2. (a) The first paragraph of Section 2.2(a) is hereby amended and
restated in its entirety to read as follows:
"(a) The Closing shall occur as soon as practicable following the
satisfaction or waiver of the conditions set forth in this Agreement
including, without limitation, Section 2.1 and Articles VII and VIII
hereof. At the Closing, (i) Seller will sell and Buyer will purchase
the Assets; (ii) Buyer will assume and will pay, perform and discharge
when due, and will indemnify Seller Indemnified Parties against and
hold each of them harmless from, the Liabilities; and (iii) Buyer and
Seller will execute the License Agreement, the Transition Services
Agreement and the Escrow Agreement. In payment for the Assets,
simultaneously with the delivery by Seller of such appropriately
executed instruments of sale, assignment, transfer and conveyance in
form and substance reasonably satisfactory to Buyer and its counsel
evidencing and effecting the sale and transfer to Buyer of the Assets
(it being understood that such instruments shall not require the
Continuing Affiliates to make any additional representations,
warranties or covenants, express or implied, not contained in this
Agreement), Buyer will (A) wire transfer an amount equal to the
Purchase Price less the Deposit and accrued interest thereon, and less
the $5,000,000 deposited in escrow pursuant to the Escrow Agreement,
in immediately available funds to the account or accounts specified by
Seller, (B) wire transfer $5,000,000 (five million dollars) to the
Escrow Agent for deposit pursuant to the Escrow Agreement and (C)
deliver instruments of assumption in form and substance reasonably
satisfactory to Seller and its counsel evidencing and effecting the
assumption by Buyer of the Liabilities and such other documents as are
specifically required by this Agreement"
2
(b) Schedule 2.2(a) of the Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Schedule 2.2(a) of this
Amendment.
(c) Schedule 2.2(b)(i) of the Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Schedule 2.2(b)(i) of this
Amendment.
3. A new paragraph (ix) is hereby added to Section 2.2(d) of the Purchase
Agreement which shall read in its entirety as follows:
ix) all prepaid expenses arising in connection with commitments made
by Seller prior to the Closing relating to sales and marketing
activities of the Business scheduled to occur after the Closing."
4. A new Section 2.5 is hereby added to the Purchase Agreement which
shall read in its entirety as follows:
"Section 2.5. PURCHASE PRICE ADJUSTMENT. (a) After the Closing,
Seller shall prepare a special purpose statement of the operating
profit of the Business for the period from January 1, 1997 through
December 31, 1997 in accordance with the basis of accounting set forth
in a footnote to such financial statement (the "Special Purpose 1997
Financial Statement"). To the extent necessary for Seller to prepare
the Special Purpose 1997 Closing Financial Statement, Buyer shall
provide Seller and its accountants full access to the books and
records included in the Assets, to any other information in Buyer's
possession or control after Closing and to Buyer's employees.
Seller will cause its independent public accountants, Xxxxxx Xxxxxxxx,
to audit the Special Purpose 1997 Financial Statement in accordance
with Generally Accepted Auditing Standards and to issue their
auditors' report thereon.
Seller will deliver to Buyer the Special Purpose 1997 Financial
Statement, together with the Xxxxxx Xxxxxxxx audit report in draft
form, within 50 calendar days after Closing. At the same time, Seller
will deliver to Buyer a certificate of an officer of Seller in the
form set forth as Exhibit D hereto (the "Certificate") containing a
representation and warranty that the 1997 Special Purpose Financial
Statement, taken in its entirety, has been prepared on a basis
consistent in all material respects with the Sterno Profit and Loss
Statement for the year ended 1996 that is set forth as Attachment A to
Schedule 3.2 of this Agreement (the "1996 Sterno Profit & Loss
Statement"). The
3
Certificate will be delivered by Seller only for the purpose set forth
in Section 2.5(c) below.
Buyer shall have a 9-calendar day period to review the Special Purpose
1997 Financial Statement to confirm that it has been prepared in
accordance with the first sentence of this Section 2.5(a). In
connection with such review, Buyer and its accountants shall have the
right to review the worksheets and other back-up documentation
relating to the preparation of the Special Purpose 1997 Financial
Statement and the auditors' work papers thereon, to consult with
representatives of Xxxxxx Xxxxxxxx and Seller in connection therewith
and to review books and records of Seller relevant to the preparation
of the Special Purpose Financial Statement. If, within such 9-day
period, Buyer has not given Seller written notice of an objection to
such statement, then the Special Purpose 1997 Financial Statement
shall be final, binding and conclusive on the parties. If Buyer
asserts, in good faith, that the Special Purpose 1997 Financial
Statement has not been prepared as described in the first sentence of
Section 2.5(a), it must notify Seller in writing in reasonable detail
of the issues it disputes (the "Disputed Issues") and the basis
therefor within such 9-day period. If Buyer and Seller are unable to
reach agreement regarding the Disputed Issues within 5 calendar days
after the giving of such notice by Buyer, then the Disputed Issues
shall be submitted to Deloitte & Touche LLP, independent public
accountants, or such other reputable independent accounting firm as
the parties may agree (the "Accountants") for resolution, the
Accountants to act as experts and not as arbitrators. The review by
the Accountants will be limited to the Disputed Issues. It is
expressly agreed by the parties that any issues relating to the
consistency of the Special Purpose 1997 Financial Statement with the
1996 Sterno Profit & Loss Statement as represented in the Certificate
will not be submitted to the Accountants for resolution.
If one or more Disputed Issues are submitted to the Accountants for
resolution: (i) each party will furnish to the Accountants the work
papers relating to the Disputed Issues and will be afforded the
opportunity to present to the Accountants any material relating to the
determination and to discuss the determination with the Accountants,
(ii) the determination of the Disputed Issues by the Accountants, as
set forth in a written notice delivered by the Accountants to both
parties will be final, binding and conclusive on the parties; and
(iii) Buyer and Seller shall each bear 50% of the fees of the
Accountants for such determination.
The parties will instruct the Accountants to deliver their written
determination no later than the tenth calendar day after the Disputed
4
Issues are submitted to the Accountants. Upon delivery of such
written determination, the Special Purpose 1997 Financial Statement,
adjusted in accordance with such determination, shall be final,
binding and conclusive on the parties.
The time periods for preparation, review and dispute resolution
regarding the 1997 Special Purpose Financial Statement set forth in
this Section 2.5(a) are intended to permit Seller to finalize the
financial statements to be prepared by it pursuant to Section
5.1(a)(ii) for filing by Parent with the Securities and Exchange
Commission without any dispute regarding the 1997 Special Purpose
Financial Statement pending between the parties. Buyer acknowledges
that Seller shall not be required to finalize and deliver the
financial statements referred to in Section 5.1(a)(ii) while any such
dispute is pending.
Buyer agrees that any confidential information obtained by it
regarding businesses of Seller other than the Business pursuant to the
review and dispute resolution procedures set forth above in this
Section 2.5(a) shall be subject to the confidentiality provisions of
Section 9.10 of the Transition Agreement.
(b) (i) If the 1997 operating profit of the Business as shown on the
Special Purpose 1997 Financial Statement is less than $10,297,000,
then Seller shall pay to Buyer as an adjustment to the Purchase Price
an amount equal to 6.4 multiplied by the difference between $10,
297,000 and such 1997 operating profit, together with interest on such
amount at the rate of 7% from the Closing Date to the date paid (the
"Purchase Price Adjustment"). The amount of the Purchase Price
Adjustment, if any, shall be deemed final, binding and conclusive at
the same time as the Special Purpose 1997 Financial Statement is
deemed final, binding and conclusive pursuant to Section 2.5(a). A
Purchase Price Adjustment, if any, shall become due and payable within
two business days after it has become final, binding and conclusive,
provided, however, Seller's obligation to pay such Purchase Price
Adjustment shall be deemed satisfied if either Buyer or Seller has
requested distribution of the Escrow Funds to Buyer in the amount of
the Purchase Price Adjustment in accordance with the terms and
conditions of the Escrow Agreement referred to in Section 2.5(d)
below. Notwithstanding the foregoing, if any Purchase Price
Adjustment payable by Seller to Buyer pursuant to Section 2.5(b)(i)
exceeds the amount contained in the Escrow Account, Seller shall
remain obligated to pay such excess to Buyer within two business days
after such Purchase Price Adjustment is deemed final, binding and
conclusive pursuant to this Section 2.5.
5
(ii) If the 1997 operating profit of the Business as shown
on the Special Purpose 1997 Financial Statement is greater
than or equal to $10,297,000, then Seller shall not be
obligated to pay any amount as Purchase Price Adjustment to
Buyer.
(iii) If Seller pays a Purchase Price Adjustment to Buyer
pursuant to Section 2.5(b)(i) above, the deductible set forth
in Section 9.2(b) for indemnification claims by Buyer under
this Agreement shall be increased by the amount of such
adjustment.
(c) Buyer's sole and exclusive remedy for any breach of the
representation and warranty set forth in the Certificate regarding
consistency of the Special Purpose 1997 Financial Statement and the
1996 Sterno Profit & Loss Statement will be pursuant to the
indemnification provisions of Article IX, including without limitation
the survival limitations and deductibility provisions set forth
therein, provided, however, to the extent Buyer has received a
Purchase Price Adjustment under Section 2.5(b)(i), it shall not be
allowed to recover again under Article IX with respect to the same
underlying circumstances or assertions. In addition, Buyer agrees it
shall not have a claim for indemnification for breach of the
representation and warranty set forth in the Certificate to the extent
any such claim relates to allocated costs of the Business that are not
relevant to Buyer's ongoing operation of the Business because, for
example, Buyer will operate the Business in a different manner,
because Buyer's cost structure regarding such items will be different,
or for similar reasons.
(d) At Closing, Buyer shall deposit $5,000,000 of the Purchase Price
(the "Escrow Funds") into an escrow account (the "Escrow Account")
maintained with a mutually agreed upon independent escrow agent (the
"Escrow Agent"). Such Escrow Funds will be held for, and interest
earned in such Escrow Funds will be paid to, the Escrow Agent for
distribution to Seller or Buyer as specified in an escrow agreement
substantially in the form of Exhibit C hereto (the "Escrow Agreement")
to be executed by Buyer, Seller and the Escrow Agent. Seller and
Buyer agree that the Escrow Account shall be used to satisfy any
obligations of Seller set forth in Section 2.5(b)(i), and, if and to
the extent that not all the Escrow Funds are used to satisfy
obligations of Seller pursuant to Section 2.5(b)(i), shall be released
by the Escrow Agent to Seller in accordance with the terms of the
Escrow Agreement. Notwithstanding the foregoing, if any Purchase
Price Adjustment payable by Seller to Buyer pursuant to Section
2.5(b)(i)
6
exceeds the amount contained in the Escrow Account, Seller shall
remain obligated to pay such excess to Buyer within two business days
after such Purchase Price Adjustment is deemed final, binding and
conclusive pursuant to this Section 2.5.
5. Section 5.18 of the Purchase Agreement is hereby amended and restated
to read in its entirety as follows:
"Section 5.18. WAREHOUSE. On or before February 28, 1998, Seller
shall remove all products relating to businesses other than the Business
from the warehouse facilities of Seller located in Texarkana, Texas."
6. A new Section 5.22 is hereby added to the Purchase Agreement, to read
in its entirety as follows:
"Section 5.22. PREPAID EXPENSES. Promptly after the Closing Date,
Buyer shall refund to Seller any and all prepaid expenses described in
Section 2.2(d)(ix) hereof prior to the Closing. Such prepaid expenses
shall be set forth in a schedule delivered to Buyer by Seller at the
Closing."
7. Schedule 6.4 of the Purchase Agreement is hereby amended and restated
in its entirety to read as set forth in Schedule 6.4 of this Amendment.
8. Section 7.4 of the Purchase Agreement is hereby amended and restated
to read in its entirety as follows:
"Section 7.4. OTHER AGREEMENTS. Buyer, Seller and , to the extent
applicable, the Escrow Agent, shall have executed and delivered the License
Agreement, the Transition Services Agreement and the Escrow Agreement."
9. A new Section 8.5 of the Purchase Agreement is hereby added, to read
in its entirety as follows:
"Section 8.5. ESCROW AGREEMENT. Buyer and the Escrow Agent shall have
executed and delivered the Escrow Agreement."
10. A new Exhibit C, in the form attached hereto, is hereby added to the
Purchase Agreement.
11. A new Exhibit D, in the form attached hereto, is hereby added to the
Purchase Agreement.
7
12. This Amendment may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party. Copies of executed counterparts transmitted by
telecopy, telefax or other electronic transmission service shall be considered
original executed counterparts for purposes of this paragraph, provided receipt
of copies of such counterparts is confirmed.
13. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York without reference to the choice of law
principles thereof.
14. Except as specifically amended hereby, the Purchase Agreement is
ratified and confirmed in its entirety.
15. Any provision of this Amendment which is invalid or unenforceable
shall be ineffective to the extent of such invalidity or unenforceability,
without affecting in any way the remaining provisions hereof.
8
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be duly executed and delivered by its proper and duly authorized officer as of
the day first above written.
COLGATE-PALMOLIVE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title:
CANDLE CORPORATION OF AMERICA
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
* * *
The undersigned hereby agrees to cause Buyer promptly to fulfill all of its
obligations under the Purchase Agreement, as amended hereby, and guarantees the
performance by Buyer of its obligations under the Purchase Agreement, as amended
hereby.
BLYTH INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
9
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of December___, 1997, among CANDLE
CORPORATION OF AMERICA, a New York corporation (the "Buyer"), COLGATE-PALMOLIVE
COMPANY, a Delaware corporation (the "Seller"), and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as escrow agent (the "Escrow Agent").
WHEREAS, as of September 30, 1997, the Buyer and the Seller entered
into a Purchase Agreement, as amended by Amendment No. 1 dated as of December
31, 1997 (as so amended, the "Purchase Agreement") pursuant to which the Buyer
will purchase the Assets (as defined in the Purchase Agreement);
WHEREAS, it is a condition precedent to the closing under the Purchase
Agreement that the parties hereto enter into this Agreement;
WHEREAS, the Buyer and the Seller have agreed that a portion of the
Purchase Price (as defined in the Purchase Agreement) shall be paid into escrow
by the Buyer in order to satisfy, in whole or in part, any purchase price
adjustment owed by the Seller to the Buyer as provided in Section 2.5(b)(i) of
the Purchase Agreement; and
WHEREAS, concurrently herewith the Buyer is depositing $5,000,000.00
(together with any income thereon or accretions thereto as provided herein,
being referred to as the "Escrow Funds") into escrow pursuant to Section 2.5 of
the Purchase Agreement.
NOW, THEREFORE, in consideration of the execution of the Purchase
Agreement and the agreements herein contained the parties agree as follows:
1. ESCROW FUNDS.
(a) The Escrow Agent is hereby appointed as escrow agent to hold
and dispose of the Escrow Funds in accordance with the terms of this Agreement.
(b) The Buyer shall deposit the Escrow Funds with the Escrow
Agent. The Escrow Agent will hold, invest and dispose of the Escrow Funds in
accordance with the terms and conditions hereof. Money deposited under this
Escrow Agreement shall be invested (and interest, when received, shall be
reinvested) in the Federated Cash Fund (the "Fund") (provided that prior to
January 2, 1998, money deposited under this Escrow Agreement shall be deposited
in United States Treasury obligations or commercial paper maturing no more than
270 days from the date of investment therein, at the time of investment therein,
having the highest rating by a nationally recognized credit rating agency). The
Seller and the Buyer understand that the Escrow Agent shall receive a fee
directly from the Fund, which can range from a minimum of .35 of 1% up to a
maximum of .60 of 1% as compensation to offset some of the costs incurred by the
Escrow Agent in providing Fund-related functions such as subaccounting, income
disbursing agent, servicing agent and other administrative tasks. Such fees
shall be charged against the Fund's management expenses and will not decrease
the rate of return from the Fund. The Escrow Agent shall maintain records
setting forth (i) investments of the Escrow Funds; (ii) the market value of the
Escrow
Funds as determined from time to time; (iii) all income or accretions to and
distributions from the Escrow Funds; and (iv) such other information as may be
required for the administration of this Escrow Agreement. All income or
accretions to the Escrow Funds shall be treated as additional Escrow Funds
pursuant to this Escrow Agreement.
2. CLAIMS AGAINST ESCROW FUNDS. The conditions of the escrow are as
follows:
(a) The Escrow Agent shall deliver to Buyer such amount of the
Escrow Funds, if any, which are due and payable to Buyer as a "Purchase Price
Adjustment" pursuant to Section 2.5 of the Purchase Agreement, once such
Purchase Price Adjustment has become final and binding under the terms and
conditions of such Section 2.5 of the Purchase Agreement, and shall deliver the
balance of the Escrow Funds, if any, to Seller, subject to the remaining
provisions of this Section 2.
(b) Either Buyer or Seller may request distribution of the
Escrow Funds as specified in Section 2(a) by delivering in accordance with
Section 4.2 of this Agreement to each of the Escrow Agent and the other party
(using the same method of delivery) a duly executed certificate in the form of
Annex I hereto (a "Distribution Certificate"). If the Escrow Agent does not
receive written notice of an objection from Seller, in the case where Buyer
delivers a Distribution Certificate, or from Buyer, in the case where Seller
delivers a Distribution Certificate, in each case substantially in the form of
Annex II attached hereto, specifying in reasonable detail the reasons for its
objection (an "Objection"), within fifteen (15) days after receipt by the Escrow
Agent of such Distribution Certificate, then within two (2) business days after
the expiration of such 15-day period, the Escrow Agent shall distribute the
Escrow Funds as specified in such Distribution Certificate. If the Escrow Agent
receives an Objection within fifteen (15) days after receipt by the Escrow Agent
of a Distribution Certificate, the Escrow Agent shall retain the Escrow Funds
and shall release them only in accordance with Section 2(d) below.
(c) Promptly upon receipt of a Distribution Certificate or an
Objection, the Escrow Agent shall deliver a copy of such Distribution
Certificate or Objection to Buyer, if Seller sent such document, or to Seller,
if Buyer sent such document.
(d) It is understood and agreed that if any Objection is filed
as provided in Section 2(b) hereof, the Escrow Agent is authorized and directed
to retain in its possession, without liability to anyone, the portion of the
Escrow Funds that are subject to the Objection until such dispute shall have
been settled (i) by mutual agreement by the parties concerned, to be evidenced
by written distribution instructions of the Buyer and Seller to the Escrow
Agent, or (ii) by delivery to the Escrow Agent of a written notice,
substantially in the form of Annex III attached hereto, executed by the Buyer or
the Seller instructing the Escrow Agent as to the distribution of the Escrow
Funds, and attaching a decision of the Accountants (as defined in the Purchase
Agreement) pursuant to the provisions of Section 2.5 of the Purchase Agreement.
3. CONCERNING THE ESCROW AGENT.
(a) The Escrow Agent shall be compensated annually in accordance
with the fee schedule set forth in Exhibit A attached hereto and reimbursed by
the Buyer and the Seller (in equal amounts) for all reasonable out-of-pocket
expenses, disbursements and advances (including reasonable attorneys' fees and
expenses actually incurred by the Escrow Agent in connection with the use of
outside attorneys) incurred or made by the Escrow Agent in the performance of
its duties hereunder. Such fees,
-2-
costs, and expenses may include the allocated cost of internal counsel as the
Escrow Agent shall determine in its sole discretion in connection with the
interpretation or administration of this Escrow Agreement and/or any litigation,
disputes or claims arising hereunder. The parties agree that the Escrow Agent
shall be entitled to seek the advice of counsel of its choosing as to the proper
tax treatment of this escrow if, prior to January 15, 1998, the Escrow Agent
shall not have received an opinion of counsel to the Buyer as to such tax
treatment, in form and substance reasonably satisfactory to the Escrow Agent.
The fees for such advice shall be paid by the Buyer. If the Escrow Agent's
compensation, fees, cost, expenses or attorneys' fees provided for herein are
not promptly paid, the Escrow Agent shall have the right to reimburse itself
from the Escrow Funds.
(b) The Escrow Agent may resign at any time by giving notice of
such resignation to the Seller and the Buyer specifying a date not less than 10
business days following the date of such notice when such resignation shall take
effect. Upon such notice, a successor escrow agent shall be appointed by the
Buyer, with the concurrence of the Seller not to be unreasonably withheld, such
successor escrow agent to become the Escrow Agent hereunder upon the resignation
date specified in such notice. The Buyer and the Seller (with each other's
concurrence, not to be unreasonably withheld) may at any time appoint a new
escrow agent by giving notice thereof to the Escrow Agent then acting. The
Escrow Agent shall continue to serve until its successor accepts such
appointment and receives the Escrow Funds. In the event a successor escrow
agent shall not have been appointed within thirty (30) days after the Escrow
Agent provides its notice of resignation, the Escrow Agent may, at the expense
of the Buyer, petition a court of competent jurisdiction for the appointment of
a successor escrow agent.
In addition to the above provisions, the Escrow Agent may resign
at any time and appoint as successor escrow agent any entity to which the Buyer
consents to act as successor escrow agent, and in which the Seller shall concur,
such consent and concurrence not to be unreasonably withheld.
It is understood and agreed that in all events and
notwithstanding anything herein to the contrary, any successor escrow agent
hereunder shall be a nationally recognized banking institution or trust company.
(c) The Escrow Agent undertakes to perform only such duties as
are specifically set forth in this Agreement and is not charged with any duties
or responsibilities in connection with any other document or agreement,
including, but not limited to, the Purchase Agreement. The Escrow Agent shall
not be liable for any acts or omissions by it of any kind unless caused by its
own misconduct, bad faith or gross negligence, and shall be entitled to rely
upon, and shall be protected in relying upon, (i) any written notice (including,
without limitation, the written notices contemplated hereby), instrument or
signature believed by it exercising good faith to be genuine and to have been
signed or presented by the proper party or parties duly authorized to do so and
(ii) the advice of counsel (which may be of the Escrow Agent's own choosing).
The Escrow Agent shall have no responsibility for the contents of any writing
submitted to it under this Agreement and shall be entitled reasonably to rely in
good faith upon the contents thereof. The Escrow Agent shall not inquire into
or consider whether a claim complies with the terms of the Purchase Agreement.
The Escrow Agent shall not be responsible for the sufficiency or accuracy of the
form, execution, validity or genuineness of documents or securities now or
hereafter deposited hereunder, or of any endorsement thereon, or for any lack of
endorsement thereon, or for any description therein, nor shall the Escrow Agent
be responsible or liable in any respect on the account of the identity,
authority or rights of the persons executing or delivering or reporting to
execute or deliver any such document, security or endorsement or this Escrow
Agreement.
-3-
(d) The Buyer and the Seller agree, jointly and severally, to
indemnify the Escrow Agent and to hold it harmless against any and all
liabilities incurred by it under this Agreement as a consequence of their
respective actions, except for liabilities incurred by the Escrow Agent
resulting from its own misconduct, bad faith or gross negligence. This right of
indemnification shall survive the termination of this Escrow Agreement, and the
removal or resignation of the Escrow Agent. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Buyer and the Seller.
4. GENERAL PROVISIONS.
4.1 CERTAIN DEFINITIONS Certain Definitions. As used in
this Agreement, capitalized terms used herein and not otherwise defined shall
have the meanings ascribed thereto in the Purchase Agreement. It is agreed
by and between the parties that capitalized terms not defined herein shall be
for reference by parties other than the Escrow Agent.
4.2 NOTICES. Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, telecopied, telegraphed or telexed, or sent by certified,
registered, or express mail, postage and/or charges prepaid, to the parties at
the following addresses or at such other addresses as shall be specified by the
parties by like notice, and shall be deemed given when so delivered personally,
telecopied, telegraphed or telexed, or if mailed, two days after the date of
mailing, as follows:
(i) if to the Buyer, to it:
Candle Corporation of America
c/o Blyth Industries
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Chairman
with a copy (which shall not constitute notice) to:
Xxxx Xxxxx & Xxxxxxx LLP
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxx III, Esq.
(ii) if to the Seller, to:
Colgate-Palmolive Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
-4-
Senior Vice President,
General Counsel
and Secretary
and
Xxxxxx X. Xxxxxx
Executive Vice President and Chief Financial
Officer - Colgate U.S.
(iii) if to the Escrow Agent, to it:
Bank of America National Trust and Savings Association
Personal Trust Administration
Attention: Xxxxxxx X. Xxxxxx, Vice President
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Whenever under the terms hereof, the timing for giving a notice or performing an
act falls upon a Saturday, Sunday, or holiday, such time shall be extended
through the next business day.
4.3 ENTIRE AGREEMENT. This Agreement contains the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior contracts and other agreements, written or oral, with
respect thereto. Nothing contained herein shall limit the liability of the
Seller pursuant to Section 2.5 of the Purchase Agreement to the extent that the
amount of the Buyer's claims under Section 2.5(b)(i) of the Purchase Agreement
exceed the amount of the Escrow Funds.
4.4 WAIVERS AND AMENDMENTS. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties hereto or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which any party may otherwise have at law or
in equity. The rights and remedies of any party arising out of or otherwise in
respect of any inaccuracy in or breach of any representation or warranty, or any
failure to perform or comply with any covenant or agreement, contained in this
Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy,
breach or failure is based may also be the subject matter of any other
representation, warranty, covenant or agreement contained in this Agreement as
to which there is no inaccuracy, breach or failure.
4.5 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with and subject to, the laws of the State
of Illinois without giving effect to principles of conflicts of laws thereof.
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4.6 BINDING EFFECT; BENEFIT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
4.7 NO ASSIGNMENT. This Agreement is not assignable except by
operation of law (and shall be binding upon any successor by operation of law,
including the executors, estates or other legal representatives of any party, as
if such successors were original signatories hereto). The Seller shall not
sell, transfer, pledge, hypothecate or otherwise dispose of, or agree to dispose
of, any portion of the Escrow Funds, or any interest therein, prior to the
distribution of such Escrow Funds in accordance with the terms hereof.
4.8 VARIATIONS IN PRONOUNS. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
4.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
4.10 HEADINGS. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
4.11 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement, or any part thereof, is held by a court of
competent jurisdiction or any foreign, federal, state, county or local
government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any
reason, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CANDLE CORPORATION OF AMERICA
By:
-------------------------------
Name:
Title:
COLGATE-PALMOLIVE COMPANY
By:
-------------------------------
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as escrow agent
By:
--------------------------------
Name:
Title:
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ANNEX I
CERTIFICATE
The undersigned, [Buyer] [Seller], a _____________ corporation, hereby,
certifies as follows:
1. With reference to the Purchase Agreement, as amended by Amendment No.
1 dated as of December 31, 1997, between Candle Corporation of America, a New
York corporation ("Buyer"), and Colgate-Palmolive Company, a Delaware
corporation ("Seller"), (the "Purchase Agreement"), the amount of the Purchase
Price Adjustment, as defined in the Purchase Agreement, has become final and
binding under the terms and conditions of Section 2.5 of the Purchase Agreement.
2. _______________________ ("the Escrow Agent") is hereby authorized and
directed to distribute the Escrow Funds as follows:
(i) $___________ to Buyer by certified check to its address as set forth
in the Escrow Agreement, or in immediately available funds by wire transfer to
such account as Buyer shall notify you in writing reasonably in advance of the
distribution of such funds.
(ii) $___________ to Seller by certified check to its address as set forth
in the Escrow Agreement, or in immediately available funds by wire transfer to
such account as Seller shall notify you in writing reasonably in advance of the
distribution of such funds.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the ___ day of ____.
[ ]
By: _________________________
ANNEX II
OBJECTION
Date:_______________________
To: [ ], as Escrow Agent
cc: [ ]
Re: Escrow Agreement (the "Escrow Agreement"), dated as of December 31, 1997,
among Candle Corporation of America, a New York corporation (the "Buyer"),
Colgate-Palmolive Company, and the Escrow Agent
Ladies and Gentlemen:
This Objection is delivered pursuant to Section 2(b) of the Escrow
Agreement. You are hereby notified that the undersigned hereby disputes the
Certificate dated ___________, ____, delivered to you by ___________, because:
[reasons for objection to be inserted].
You are hereby authorized to retain the portion of the Escrow Funds that
are subject to this Objection until you receive one of the notices specified in
Section 2(d)(i) or (ii) of the Escrow Agreement.
Very truly yours,
[ ]
By: _________________________
ANNEX III
NOTICE OF CLAIM
Date:_______________________
To: [ ], as Escrow Agent
cc: [Colgate-Palmolive Company] [Candle Corporation of America]
Re: Escrow Agreement (the "Escrow Agreement"), dated as of December 31, 1997,
among Candle Corporation of America, a New York corporation (the "Buyer"),
Colgate-Palmolive Company, and the Escrow Agent
Ladies and Gentlemen:
This notice is delivered pursuant to Section 2(d)(ii) of the Escrow
Agreement. Attached hereto is a decision of the Accountants pursuant to Section
2.5 of the Purchase Agreement. Capitalized terms used herein shall have the
meanings ascribed thereto in the Escrow Agreement.
The Escrow Agent is hereby authorized and directed to distribute the Escrow
Funds as follows:
(i) $___________ to Buyer by certified check to its address as set forth
in the Escrow Agreement, or in immediately available funds by wire transfer to
such account as Buyer shall notify you in writing reasonably in advance of the
distribution of such funds.
(ii) $___________ to Seller by certified check to its address as set forth
in the Escrow Agreement, or in immediately available funds by wire transfer to
such account as Seller shall notify you in writing reasonably in advance of the
distribution of such funds.
Very truly yours,
[CANDLE CORPORATION OF AMERICA]
[COLGATE-PALMOLIVE COMPANY]
By: _________________________
EXHIBIT D
Colgate-Palmolive Company
OFFICER'S CERTIFICATE
On this ____ day of _____,1998, the undersigned, ___________, does hereby
certify that he is the duly appointed and presently incumbent [insert title] and
is authorized to execute and deliver this Certificate pursuant to Section 2.5(a)
of the Purchase Agreement, dated as of September 30, 1997, as amended as of
December 31, 1997 (the "Purchase Agreement"), by and between Colgate-Palmolive
Company, a Delaware corporation (the "Company"), and Candle Corporation of
America, and does hereby further certify that:
1. The 1997 Special Purpose Financial Statement (as such term and all
other capitalized terms used herein without definition are defined in the
Purchase Agreement) attached hereto as Exhibit A, taken in its entirety, has
been prepared on a basis consistent in all material respects with the Sterno
Profit and Loss Statement for the year ended 1996 that is set forth as
Attachment A to Schedule 3.2 to the Purchase Agreement.
2. This Certificate is being delivered to Buyer only for the purpose set
forth in Section 2.5(c) of the Purchase Agreement and is subject to all the
terms and conditions set forth in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date first above written.
By:
-------------------------
Name:
Title:
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