Exhibit 2.1
STOCK PURCHASE AGREEMENT
BETWEEN
THE QUAKER OATS COMPANY
AND
TRIARC COMPANIES, INC.
Dated as of March 27, 1997
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND TERMS
1.1 Specific Definitions....................................... 1
1.2 Terms Defined Elsewhere in the Agreement................... 6
1.3 Other Definitional Provisions.............................. 7
1.4 References to Time......................................... 8
ARTICLE II
PURCHASE AND SALE OF THE SHARES
2.1 Purchase and Sale of the Shares............................ 8
2.2 Purchase Price............................................. 8
2.3 Closing.................................................... 9
2.4 Deliveries by Acquiror..................................... 9
2.5 Deliveries by Seller....................................... 9
2.6 Adjustment to Purchase Price............................... 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization and Qualification............................. 11
3.2 Capitalization; Subsidiaries............................... 11
3.3 Corporate Authorization.................................... 12
3.4 Consents and Approvals..................................... 13
3.5 Non-Contravention.......................................... 13
3.6 Binding Effect............................................. 14
3.7 Financial Statements; Absence of Certain
Changes.................................................... 14
3.8 Litigation................................................. 15
3.9 Taxes...................................................... 16
3.10 Employee Benefits.......................................... 18
3.11 Compliance with Laws....................................... 19
3.12 Intellectual Property...................................... 19
3.13 Contracts.................................................. 19
3.14 Brokers.................................................... 20
3.15 Title to Properties........................................ 20
3.16 Environmental Matters...................................... 21
3.17 Labor Relations............................................ 21
3.18 No Other Representations or Warranties..................... 21
3.19 Disclosure Schedule........................................ 22
3.20 Standard................................................... 22
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Section Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
4.1 Organization and Qualification............................. 23
4.2 Corporate Authorization.................................... 23
4.3 Consents and Approvals..................................... 23
4.4 Non-Contravention.......................................... 24
4.5 Binding Effect............................................. 24
4.6 Brokers.................................................... 24
4.7 Purchase for Investment.................................... 25
4.8 Financial Capability....................................... 25
4.9 No Other Representations or Warranties..................... 25
ARTICLE V
COVENANTS
5.1 Conduct of Snapple Business................................ 25
5.2 Access..................................................... 27
5.3 Reasonable Best Efforts.................................... 27
5.4 Antitrust Notification..................................... 29
5.5 Supplemental Disclosure.................................... 29
5.6 Further Assurances......................................... 30
5.7 Announcements.............................................. 30
5.8 Employee Matters........................................... 31
5.9 Preservation of Records.................................... 33
5.10 Other Agreements........................................... 33
5.11 Financial Statements....................................... 34
5.12 Related Party Payments..................................... 34
5.13 Continental PET............................................ 35
5.14 Use of Cash................................................ 35
5.15 Payment of Proceeds........................................ 35
5.16 Insurance.................................................. 35
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to the Obligations of Acquiror and
Seller..................................................... 37
6.2 Conditions to the Obligations of Acquiror.................. 37
6.3 Conditions to the Obligations of Seller.................... 38
ARTICLE VII
SURVIVAL; GENERAL INDEMNIFICATION
7.1 Survival................................................... 39
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Section Page
7.2 Indemnification by Acquiror................................ 39
7.3 Indemnification by Seller.................................. 40
7.4 Procedure for Indemnification.............................. 40
7.5 Characterization of Indemnification Payments............... 43
7.6 Computation of Losses; Disputes............................ 43
ARTICLE VIII
TAX MATTERS; TAX INDEMNIFICATION
8.1 Tax Indemnification........................................ 44
8.2 No Tax Elections........................................... 45
8.3 Preparation of Tax Returns; Payment of Taxes............... 45
8.4 Cooperation with Respect to Tax Returns. .................. 48
8.5 Tax Audits................................................. 48
8.6 Refund Claims.............................................. 49
8.7 Transfer Taxes............................................. 50
8.8 Other Tax Matters.......................................... 50
8.9 Disputes................................................... 50
ARTICLE IX
TERMINATION
9.1 Termination................................................ 51
9.2 Effect of Termination...................................... 51
9.3 Termination Fee............................................ 52
ARTICLE X
GENERAL PROVISIONS
10.1 Extension; Waiver.......................................... 52
10.2 Amendment.................................................. 53
10.3 Expenses................................................... 53
10.4 Governing Law.............................................. 53
10.5 Notices.................................................... 53
10.6 Entire Agreement........................................... 54
10.7 Disclosure Schedule........................................ 54
10.8 Headings; References....................................... 55
10.9 Counterparts............................................... 55
10.10 Parties in Interest; Assignment............................ 55
10.11 Severability; Enforcement.................................. 55
10.12 Consent to Jurisdiction.................................... 55
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EXHIBITS
Exhibit A -- Transition Services Agreement
Exhibit B -- Patent License Agreement
Exhibit C -- Shared Technology License Agreement
Exhibit D -- Xxxxxx Agreement
Exhibit E -- Power Packaging Agreement
Exhibit F -- Assignment and Assumption Agreement
Exhibit G -- Opinion of Seller's Counsel
Exhibit H -- Opinion of Acquiror's Counsel
Exhibit I -- Guaranty Agreement
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 27, 1997, between THE
QUAKER OATS COMPANY, a New Jersey corporation ("Seller"), and TRIARC COMPANIES,
INC., a Delaware corporation ("Acquiror").
W I T N E S S E T H :
WHEREAS, Snapple Beverage Corp., a Delaware corporation ("Snapple"),
is engaged, directly and through its subsidiaries, in the business of producing,
marketing and distributing beverages and other products under the Snapple
trademark and related trademarks and trade names (the "Snapple Business");
WHEREAS, Seller is the owner of 1,000 shares of Common Stock, par
value $1.00 per share (the "Shares"), of Snapple, which Shares constitute all of
the outstanding shares of capital stock of Snapple; and
WHEREAS, Seller desires to sell, transfer and deliver to Acquiror,
and Acquiror desires to purchase from Seller, all of the Shares, on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
1.1 Specific Definitions. For purposes of this
Agreement, the following terms shall have the meanings set
forth below:
"Acquiror" shall have the meaning set forth in the
preamble to this Agreement.
"Affiliate" shall mean, with respect to any specified Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such specified Person.
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"Agreed Rate" shall mean the 30-day commercial paper rate published
in the most current issue of Federal Reserve Statistical Release H.15 (Selected
Interest Rates) at the Closing Date and reset at such rate as published at
30-day intervals thereafter.
"Agreement" shall mean this Stock Purchase Agreement, together with
all exhibits and schedules hereto, as the same may be amended or supplemented
from time to time in accordance with the terms hereof.
"Applicable Laws" shall mean, with respect to any Person, all
statutes, laws, ordinances, rules, orders and regulations of any Governmental
Authority applicable to such Person and its business, properties and assets.
"Base Working Capital Amount" shall mean
$58,000,000.
"Business" shall mean the Snapple Business and any terminated,
divested or discontinued business or operations that at the time of termination,
divestiture or discontinuation was conducted by any of the Snapple Companies or
its predecessors.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which banks located in New York City are authorized or required by
law to close.
"Cash Equivalents" shall mean cash on hand, all other cash in any
bank, savings or similar accounts at any financial institution, and checks,
drafts and similar instruments and any publicly traded stocks, bonds or similar
marketable securities, certificates of deposit, commercial paper, eurodollar
deposits and any other cash equivalents held in the name of or for the account
of any of the Snapple Companies.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.).
"Closing" shall mean the closing of the trans-actions contemplated
by this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
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"Confidentiality Agreement" shall mean the Agreement, dated December
4, 1996, between Acquiror and Seller.
"DOJ" shall mean the United States Department of
Justice.
"Employee Arrangements" shall mean all employment and consulting
agreements, and all bonus and other incentive compensation, deferred
compensation, disability, severance, stock award, stock option, stock purchase,
collective bargaining or workers' compensation agreements, plans, programs,
policies and arrangements with respect to the employment or termination of
employment of any employee, officer, director or other Person who is or was
employed by any of the Snapple Companies or primarily in the Snapple Business.
"Employee Benefit Plans" shall mean all "employee benefit plans", as
defined in Section 3(3) of ERISA, which Seller or the Snapple Companies
maintains and in which any employee or former employee employed by the Snapple
Companies or primarily in the Snapple Business participates.
"Encumbrances" shall mean any and all mortgages, security interests,
liens, claims, pledges, restrictions, leases, title exceptions, rights of
others, charges or other encumbrances.
"Environmental Law" shall mean any law, statute, ordinance, rule,
regulation, order, judgment or decree as in effect as of the date of this
Agreement relating to (i) the protection of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface or subsurface land) or (ii) the exposure of Persons (other than Persons
employed by the Snapple Business or the Snapple Companies) to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labelling, protection, release or disposal of, Hazardous Substances, but
excluding any such law, statute, ordinance, rule, regulation, order, judgment or
decree, including common law, (x) governing protection of worker health and
safety or human health (other than exposure of Persons other than Persons
employed by the Snapple Business or the Snapple Companies to Hazardous
Substances), or (y) establishing the basis for a claim for product liability.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Cash Equivalents" shall mean the amount of Cash
Equivalents set forth on the Estimated Statement.
"Estimated Working Capital" shall mean the amount of Working Capital
set forth on the Estimated Statement.
"FTC" shall mean the United States Federal Trade Commission.
"GAAP" shall mean generally accepted accounting principles in effect
in the United States of America.
"Governmental Authority" shall mean any foreign, federal, state or
local government, court, agency or commission or other governmental or
regulatory body or authority.
"Hazardous Substances" shall mean any hazardous substances within
the meaning of 101(14) of CERCLA, 42 U.S.C. ss. 9601(14).
"Indemnified Party" shall mean any Person which is seeking
indemnification from an Indemnifying Party pursuant to the provisions of this
Agreement.
"Indemnifying Party" shall mean any party hereto from which any
Indemnified Party is seeking indemnification pursuant to the provisions of this
Agreement.
"Independent Law Firm" shall mean a nationally recognized
independent law firm, jointly selected by the parties; or, if the parties cannot
agree on such law firm, Seller and Acquiror shall each submit the name of a
nationally recognized independent law firm that does not at the time provide,
and has not in the prior two years provided, services to Seller or Acquiror, and
the "Independent Law Firm" shall mean the firm selected by lot from these two
firms.
"IRS" shall mean the United States Internal Revenue Service.
"Knowledge" of Seller or any Snapple Company or any similar phrase
means the actual knowledge of those management employees of Seller identified in
Section 1.1(a) of the Disclosure Schedule, and only with respect to the
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following Snapple personnel, Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxxxxx
and Xxxxxxx Xxxxxx, after reasonable inquiry.
"Legal Proceedings" shall mean any judicial, administrative or
arbitral actions, suits, proceedings (public or private) or governmental
proceedings.
"Material Adverse Effect" shall mean, with respect to any Person,
any change or effect that is materially adverse to the business of such Person
and its Subsidiaries taken as a whole; provided, however, that Material Adverse
Effect shall exclude any change or effect due to (i) general economic or
industry-wide conditions, including, without limitation, devaluation,
revaluation or decline in value of any foreign currency against the U.S. dollar,
(ii) any continuation of an adverse trend disclosed to Acquiror on or prior to
the date hereof, and (iii) any condition described in the Disclosure Schedule.
"Person" or "person" shall mean and includes any individual,
partnership, joint venture, corporation, association, joint stock company,
trust, unincorporated organization or similar entity.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Shares" shall have the meaning set forth in the recitals to this
Agreement.
"Snapple" shall have the meaning set forth in the recitals to this
Agreement.
"Snapple Business" shall have the meaning set forth in the recitals
to this Agreement.
"Snapple Companies" shall mean Snapple and all of its direct and
indirect Subsidiaries.
"Subsidiary" shall mean, with respect to any Person, (i) each
corporation, partnership, joint venture or other legal entity of which such
Person owns, either directly or indirectly, 50% or more of the stock or other
equity
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interests the holders of which are generally entitled to vote for the election
of the board of directors or similar governing body of such corporation,
partnership, joint venture or other legal entity and (ii) each partnership in
which such Person or another Subsidiary of such Person is the general partner or
otherwise controls such partnership.
"Tax" or "Taxes" shall mean all taxes, charges, fees, imposts,
levies or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to tax or additional amounts imposed by any taxing authority (domestic
or foreign) and shall include any transferee liability in respect of Taxes.
"Tax Returns" shall mean all reports, returns, declaration forms and
statements filed or required to be filed with respect to Taxes.
"Working Capital" shall mean the sum of all inventory and trade
accounts receivable of the Snapple Business conducted worldwide, minus all trade
accounts payable of the Snapple Business conducted worldwide; provided, however,
that Working Capital shall not include intercompany receivables and payables.
"Working Capital Amount" shall mean the Estimated Working Capital
minus the Base Working Capital Amount.
1.2 Terms Defined Elsewhere in the Agreement. For purposes of
this Agreement, the following terms have the meanings set forth in the sections
indicated:
Term Section
Acquiror Indemnified Parties......................................7.3(a)
Asserted Liability................................................7.4(a)
Assigned Contracts...................................................5.3
Assignment and Assumption Agreement.................................5.10
Audited Financial Statements........................................5.11
Xxxxxx Agreement....................................................5.10
Cash.................................................................4.8
Casualty Insurance Claims........................................5.15(a)
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Claim Notice......................................................7.4(a)
Closing Date.........................................................2.3
Closing Statement.................................................2.6(a)
Contract............................................................3.13
CPA Firm..........................................................2.6(b)
Deposit...........................................................2.2(a)
Disclosure Schedule.................................................3.19
Escrow Agent......................................................2.2(a)
Escrow Agreement..................................................2.2(a)
Estimated Amount..................................................2.6(c)
Estimated Statement...............................................2.2(c)
Final Amount......................................................2.6(c)
Financial Statements..............................................3.7(a)
HSR Act..............................................................3.4
Independent Accounting Firm..........................................8.9
Insurance Policies...............................................5.15(a)
Losses...............................................................7.2
Notice Period.....................................................7.4(a)
Objection.........................................................2.6(b)
Other Antitrust Regulations..........................................3.4
Patent License Agreement............................................5.10
Power Packaging Agreement...........................................5.10
Purchase Price....................................................2.2(b)
Quaker Facility Co-Pack Agreement...................................5.10
Seller Indemnified Parties...........................................7.2
Shared Technology License Agreement.................................5.10
Snapple Employees.................................................5.8(b)
Snapple Employee Arrangements.....................................5.8(a)
Snapple Employee Benefit Plans....................................5.8(a)
Statement of Assets and Liabilities...............................3.7(a)
SVC.................................................................5.10
Tax Agreement, Consent or Election................................3.9(f)
Tax Ruling........................................................3.9(f)
Transition Services Agreement.......................................5.10
1.3 Other Definitional Provisions. (a) The words "hereof",
"herein", and "hereunder" and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States dollars.
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(d) As used in this Agreement, accounting terms which are
specifically defined under GAAP and are not otherwise defined herein shall have
the respective meanings given to them under GAAP.
1.4 References to Time. All references in this Agreement to
times of the day shall be to New York City time.
ARTICLE II
PURCHASE AND SALE OF THE SHARES
2.1 Purchase and Sale of the Shares. On the terms and subject to the
conditions set forth herein, at the Closing, Seller agrees to sell, transfer and
deliver to Acquiror, and Acquiror agrees to purchase from Seller, the Shares.
2.2 Purchase Price. (a) Upon the execution of this Agreement,
Acquiror shall pay to Weil, Gotshal & Xxxxxx LLP, in its capacity as escrow
agent (the "Escrow Agent") pursuant to that certain Escrow Agreement, dated as
of the date hereof, among Acquiror, Seller and the Escrow Agent (the "Escrow
Agreement"), by certified check or wire transfer of immediately available funds,
the sum of $20,000,000 (the "Deposit"), which pursuant to the Escrow Agreement
shall either (i) be applied as a deposit on the Purchase Price as provided in
Section 2.4(a), (ii) be applied toward Acquiror's payment obligation pursuant to
Section 9.3, if any, or (iii) be returned to Acquiror in the event that the
Closing does not occur on or before the date set forth in Section 9.1(b) due to
Seller's failure to satisfy the closing conditions set forth in Section 6.2 or
the non-occurrence of any closing condition set forth in Section 6.1.
(b) The purchase price for the Shares shall be $300,000,000 plus
the sum of the Working Capital Amount and the Estimated Cash Equivalents (the
"Purchase Price"), as adjusted pursuant to Section 2.6.
(c) Seller shall prepare and deliver to Acquiror, at least five days
but not more than 30 days immediately preceding the Closing Date, an estimated
statement of Working Capital and Cash Equivalents as of the Closing Date (the
"Estimated Statement").
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2.3 Closing. The Closing shall take place at the offices of Weil,
Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M.,
on the later of (a) the second Business Day following the satisfaction or waiver
(by the party entitled to waive the condition) of all conditions to the Closing
set forth in Article VI, or (b) 60 days after the date of this Agreement unless
another date, time or place is agreed to by the parties hereto. The date on
which the Closing occurs is called the "Closing Date".
2.4 Deliveries by Acquiror. At the Closing, Acquiror shall
deliver to Seller the following:
(a) an amount which, when added to the Deposit plus accrued interest
thereon which is paid to Seller pursuant to the Escrow Agreement, will total the
Purchase Price, in immediately available funds by wire transfer to Seller's
account set forth in Section 2.4(a) of the Disclosure Schedule or such other
account designated in writing by Seller not less than two Business Days prior to
the Closing; and
(b) the certificates and other documents to be delivered
pursuant to Section 6.3.
2.5 Deliveries by Seller. At the Closing, Seller shall deliver
to Acquiror the following:
(a) a certificate or certificates representing the Shares,
registered in the name of Acquiror; and
(b) the certificates and other documents to be delivered
pursuant to Section 6.2.
2.6 Adjustment to Purchase Price. (a) Within 60 days following the
Closing Date, Seller shall, at its expense, prepare, or cause to be prepared,
and deliver to Acquiror a statement (the "Closing Statement"), which shall set
forth in reasonable detail the amount of Working Capital and Cash Equivalents as
of the Closing Date. The line items included in the Closing Statement shall be
prepared on a basis consistent with the line items contained in the Statement of
Assets and Liabilities of the Snapple Business as of December 31, 1996 included
in the Financial Statements; provided, however, that the trade accounts payable
reflected on the Closing Statement shall, to the extent reasonably practicable,
reflect the trade accounts
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payable directly attributable to the Snapple Business, consistent with past
practice.
(b) Acquiror shall have 30 days to review the Closing Statement and
to inform Seller in writing of its disagreement (the "Objection") with the
Closing Statement, if any. If Seller does not receive Acquiror's Objection
within such 30-day period, the amount of Working Capital and Cash Equivalents
set forth in the Closing Statement delivered pursuant to Section 2.6(a) shall be
deemed to have been accepted by Acquiror and shall become binding upon Acquiror.
If Acquiror does deliver Acquiror's Objection to Seller, Seller shall then have
30 days to review and respond to Acquiror's Objection. If Seller and Acquiror
are unable to resolve all of their disagreements with respect to the
determination of Working Capital and Cash Equivalents as of the Closing Date
within 10 days following the completion of Seller's review of Acquiror's
Objection, they may refer, at the option of either party, their differences to
an internationally recognized firm of independent public accountants selected
jointly by Seller and Acquiror, who shall, acting as experts and not as
arbitrators, determine only with respect to the differences so submitted,
whether and to what extent, if any, the amount of Working Capital and Cash
Equivalents set forth in the Closing Statement requires adjustment. If Seller
and Acquiror are unable to so select the independent public accountants within
five days of either party requesting such referral, either Acquiror or Seller
may thereafter request that the American Arbitration Association make such
selection (the firm selected by Seller and Acquiror or by the American
Arbitration Association is referred to as the "CPA Firm"). Seller and Acquiror
shall direct the CPA Firm to use its best efforts to render its determination
within 30 days. The CPA Firm's determination shall be conclusive and binding
upon Seller and Acquiror. The fees and disbursements of the CPA Firm shall be
shared equally by Seller and Acquiror. Seller and Acquiror shall make readily
available to the CPA Firm all relevant books and records relating to the Closing
Statement and all other items reasonably requested by the CPA Firm.
(c) If the sum of the amount of Working Capital and Cash Equivalents
as of the Closing Date determined in accordance with the procedures set forth in
this Section 2.6 (the "Final Amount") is less than the sum of the amount of
Working Capital and Cash Equivalents set forth in the Estimated Statement (the
"Estimated Amount"), Seller shall,
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within 10 days following the determination of the Final Amount, pay to Acquiror
an amount in cash equal to such difference, and if the Final Amount is greater
than the Estimated Amount, Acquiror shall, within such 10 days, pay to Seller an
amount in cash equal to such difference.
(d) The amount payable by Seller to Acquiror or from Acquiror to
Seller, as the case may be, under this Section 2.6 shall bear interest at the
Agreed Rate as in effect from time to time, computed from the Closing Date to
the date of payment of such amount and shall be wire transferred to an account
designated by Acquiror or Seller, as the case may be.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller, subject to Sections 3.18, 3.19 and 3.20, hereby represents
and warrants to Acquiror as follows:
3.1 Organization and Qualification. Seller and each Snapple Company
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to own and operate its assets and properties and to carry on
its business as currently conducted. Each Snapple Company is duly qualified to
do business and is in good standing in each jurisdiction where the ownership or
operation of its assets and properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing, as the case may be, would not have a Material Adverse Effect with
respect to Snapple.
3.2 Capitalization; Subsidiaries. (a) The authorized capital stock
of Snapple consists of 1,000 shares of Common Stock, par value $1.00 per share,
and 1,000,000 shares of Preferred Stock, par value $0.01 per share. The Shares
constitute the only shares of capital stock of Snapple issued and outstanding.
All of the Shares are duly authorized, validly issued, fully paid and
nonassessable and are owned, of record and beneficially, by Seller, free and
clear of all Encumbrances. Other than pursuant to this Agreement, there are no
outstanding subscriptions, options, warrants, rights, puts, calls, commitments,
or other contracts, arrangements or understandings issued by or
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binding upon any Snapple Company requiring or providing for, and there are no
outstanding debt or equity securities of any Snapple Company which upon the
conversion, exchange or exercise thereof would require or provide for the
issuance, transfer or sale by any Snapple Company of any new or additional
equity interests in Snapple (or any other securities of Snapple which, with
notice, lapse of time or payment of monies, are or would be convertible into or
exercisable or exchangeable for equity interests in Snapple). Upon transfer of
the Shares to Acquiror in accordance with the terms of Article II hereof,
Acquiror will receive valid title to the Shares, free and clear of all
Encumbrances.
(b) Section 3.2(b) of the Disclosure Schedule sets forth the name of
each Subsidiary of Seller which is a Snapple Company and, with respect to each
such Snapple Company, the jurisdiction in which it is incorporated or organized
and, if not a wholly-owned direct or indirect Subsidiary of Snapple, the
percentage owned directly or indirectly by Snapple. All of the issued and
outstanding shares of capital stock or equity interests of each Snapple Company
owned either directly or indirectly by Snapple or by officers and directors of
Snapple as nominees on behalf of any Snapple Company are duly authorized,
validly issued, fully paid and nonassessable and are owned free and clear of all
Encumbrances. Except as set forth in Section 3.2(b) of the Disclosure Schedule,
there is no subscription, option, warrant, right, put, call, contract,
agreement, commitment, understanding or arrangement to which any Snapple Company
is a party with respect to the issuance, sale, delivery or transfer of capital
stock or other equity interests of any Snapple Company.
3.3 Corporate Authorization. Seller has the requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations under this Agreement and to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance by Seller of this
Agreement and the consummation by Seller of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate action on
the part of Seller. Seller has heretofore made available to Acquiror true,
correct and complete copies of the certificate of incorporation and bylaws of
each of the Snapple Companies.
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3.4 Consents and Approvals. Except as set forth in Section 3.4 of
the Disclosure Schedule, no consent, approval or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by Seller or any Snapple Company in connection with the execution, delivery and
performance by Seller of this Agreement and the consummation by Seller of the
transactions contemplated by this Agreement, except (i) for the filing of a
premerger notification and report form by Seller under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended ("HSR Act"), (ii) as may be
required under any local, state or foreign antitrust statute, law, regulation or
rule applicable to Acquiror, Seller or any Snapple Company ("Other Antitrust
Regulations"), (iii) as may be required under any environmental, health,
employment or safety law or regulation pertaining to any notification,
disclosure or required approval triggered by the transactions contemplated by
this Agreement, (iv) as may be required under the laws of any foreign
jurisdiction in which any Snapple Company or Acquiror conducts business or owns
assets and (v) for such other consents, approvals, orders, authorizations,
registrations, declarations and filings, the failure of which to be obtained or
made would not, individually or in the aggregate, (x) have a Material Adverse
Effect with respect to Snapple or (y) materially impair or delay the ability of
Seller to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement.
3.5 Non-Contravention. Except as set forth in Section 3.5 of the
Disclosure Schedule, the execution, delivery and performance by Seller of this
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not (i) violate any provision of the Certificate of Incorporation or
the By-laws of Seller or any Snapple Company, (ii) subject to obtaining the
consents and approvals referred to in Section 3.5 of the Disclosure Schedule,
conflict with, or result in the breach of, or constitute a default under, or
result in the termination, cancellation or acceleration (whether after the
filing of notice or the lapse of time or both) of any material right or
obligation of any of the Snapple Companies under, any material agreement, lease,
contract, note, mortgage, indenture or other obligation of any of the Snapple
Companies; or (iii) subject to the exceptions set forth in Section 3.4, violate,
or result in a breach of or constitute a default under any Applicable Law or
judgment, decree or order of any Governmental Authority to which Seller or any
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Snapple Company is subject, other than, in the cases of clauses (ii) and (iii),
any conflict, breach, termination, default, cancellation, acceleration, loss or
violation that, individually or in the aggregate, would not have a Material
Adverse Effect with respect to Snapple or materially impair or delay the ability
of Seller to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement.
3.6 Binding Effect. This Agreement constitutes a valid and legally
binding obligation of Seller, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
3.7 Financial Statements; Absence of Certain Changes. (a) Section
3.7(a) of the Disclosure Schedule contains (i) the Statement of Assets and
Liabilities of the Snapple Business as of December 31, 1996 (the "Statement of
Assets and Liabilities") and (ii) the Financial Summary-Direct Contribution of
the Snapple Business for the year ended December 31, 1995 and the year ended
December 31, 1996 (collectively, the "Financial Statements").
(b) Except as noted in the Financial Statements or in the Notes
thereto, or otherwise set forth in this Section 3.7(b) or in Section 3.7(b) of
the Disclosure Schedule, the Financial Statements:
(i) have been derived from the consolidated
financial statements of Seller;
(ii) have been prepared in accordance with GAAP and Seller's
internal accounting procedures, applied on a consistent basis for all
periods presented and on a basis consistent with Seller's audited
consolidated financial statements and unaudited interim financial
statements; and
(iii) fairly present, in all material respects, the assets and
liabilities of the Snapple Business to be transferred and assumed
hereunder through the purchase of the Shares as of the date set forth
therein and the direct contribution of the Snapple Business for the
periods indicated.
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(c) Except (i) as set forth in the Financial Statements or in the
Notes thereto, (ii) as set forth in Section 3.7(c) of the Disclosure Schedule or
in any other Section of the Disclosure Schedule, (iii) for liabilities and
obligations incurred in the ordinary course of business and (iv) for
indebtedness, obligations or liabilities addressed in any other representation
or warranty set forth in this Article III (including items which need not be
disclosed pursuant to the terms of such representations and warranties), as of
the date hereof, to the Knowledge of Seller, the Snapple Companies do not have
any indebtedness, obligations or liabilities of any kind (whether accrued,
absolute, contingent or otherwise) that, individually or in the aggregate, would
have a Material Adverse Effect with respect to Snapple.
(d) Except as set forth in Section 3.7(d) of the Disclosure
Schedule, since December 31, 1996, the Snapple Business has been conducted only
in the ordinary course, and, as of the date hereof, there have not been any
changes or developments that, individually or in the aggregate, would have a
Material Adverse Effect with respect to Snapple.
3.8 Litigation. Except as set forth in Section 3.8 of the Disclosure
Schedule, as of the date hereof, there are no Legal Proceedings pending or, to
the Knowledge of Seller, threatened, against Seller or any Snapple Company that,
individually or in the aggregate, would (i) have a Material Adverse Effect with
respect to Snapple or (ii) materially impair or delay the ability of Seller to
perform its obligations under this Agreement or consummate the transactions
contemplated by this Agreement. Except as set forth in Section 3.8 of the
Disclosure Schedule, as of the date hereof, there is no order, judgment,
injunction or decree of any Governmental Authority outstanding against Seller or
any of the Snapple Companies that, individually or in the aggregate, would have
any effect referred to in the foregoing clauses (i) and (ii). Except as set
forth in Section 3.8 of the Disclosure Schedule, (i) all notices required to
have been given to any insurance company insuring against any Legal Proceeding
have been timely and duly given, and (ii) no insurance company has asserted,
orally or in writing, that such Legal Proceeding is not covered by the
applicable policy relating to such Legal Proceeding other than where the failure
to give such notice or the absence of such coverage would not have, individually
or in the aggregate, a Material Adverse Effect with respect
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to Snapple. Except as set forth in Section 3.8 of the Disclosure Schedule, (i)
there are no product liability Legal Proceedings against or involving any of the
Snapple Companies or any product manufactured, marketed or distributed at any
time by or on behalf of any of the Snapple Companies, and (ii) no such Legal
Proceeding has been settled, adjudicated or otherwise disposed of since December
31, 1996 other than such Legal Proceedings and such settlements, adjudications
and dispositions thereof that, individually or in the aggregate, would not have
a Material Adverse Effect with respect to Snapple. Except as set forth in
Section 3.8 of the Disclosure Schedule, there are no Legal Proceedings pending
or, to the Knowledge of Seller, threatened that would give rise to any right of
indemnification on the part of any director or officer of any of the Snapple
Companies or the heirs, executors or administrators of such director or officer,
against any of the Snapple Companies or any successor to the Snapple Business
other than such Legal Proceedings that, individually or in the aggregate, would
not have a Material Adverse Effect with respect to Snapple.
3.9 Taxes. (a) Each Snapple Company, and each affiliated group
(within the meaning of Section 1504 of the Code) of which any Snapple Company is
a member, has timely filed all federal income Tax Returns and all other material
Tax Returns required to be filed by it. All such Tax Returns are complete and
correct in all material respects. Each of the Snapple Companies has paid (or
Seller or a Subsidiary of Seller has paid on its behalf) all taxes shown due on
such Tax Returns.
(b) Except as disclosed on Section 3.9 of the Disclosure Schedule,
no material deficiencies for any Taxes have been proposed, asserted or assessed
against any of the Snapple Companies that have not been fully paid or adequately
provided for in the appropriate Financial Statements, no requests for waivers of
the time to assess any Taxes are pending, and no power of attorney with respect
to any Taxes has been executed or filed with any taxing authority. No material
issues relating to Taxes have been raised by the relevant taxing authority
during any presently pending audit or examination.
(c) No liens for Taxes exist with respect to any assets or
properties of the Snapple Companies, except for statutory liens for Taxes not
yet due.
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(d) Except as disclosed in Section 3.9 of the Disclosure Schedule,
no federal, state, local or foreign audits or other administrative proceedings
or court proceedings are presently pending with regard to any federal income or
material state, local or foreign Taxes or Tax Returns of any of the Snapple
Companies and none of the Snapple Companies has received a written notice of any
pending audit or proceeding.
(e) None of the Snapple Companies has, with regard to any assets or
property held or acquired by any of them, filed a consent to the application of
Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply
to any disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by any of the Snapple Companies.
(f) Except as set forth in Section 3.9 of the Disclosure Schedule,
since December 6, 1994 and, to the Knowledge of Seller, at any time prior to
December 6, 1994, none of the Snapple Companies or any of their present or
former Affiliates has received a Tax Ruling or made or entered into a Tax
Agreement, Consent or Election (foreign or domestic) that will have a continuing
adverse effect after the Closing Date on any Snapple Company or any asset of any
Snapple Company, and there are no applications or negotiations pending with
respect to any of the foregoing. For purposes of the preceding sentence, the
term "Tax Ruling" shall mean written rulings of a taxing authority relating to
Taxes and the term "Tax Agreement, Consent or Election" shall mean a written
agreement, consent or election relating to Taxes.
(g) Except as set forth in Section 3.9 of the Disclosure Schedule,
none of the Snapple Companies is a party to, or bound by, or has any obligation
under any Tax indemnity, sharing, allocation, or similar agreement or
arrangement, express or implied, other than the provisions of this Agreement.
(h) The Snapple Companies are for federal, state and local income
tax purposes amortizing over 15 years under Section 197 of the Code, the
acquired deductible intangibles using the bases set forth in Annex 1, Attachment
L of Section 3.7(a) of the Disclosure Schedule. No taxing authority has at any
time proposed or asserted that any such asset or group of assets is not properly
amortizable.
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(i) Seller has made available to Acquiror complete and correct
copies of all federal and all material foreign and state income Tax Returns for
taxable periods December 7, 1994 to June 30, 1995 and July 1, 1995 to December
31, 1995 that have been filed by or with respect to each of the Snapple
Companies.
3.10 Employee Benefits. (a) Section 3.10(a) of the Disclosure
Schedule sets forth a complete and correct list of all material Employee Benefit
Plans in the United States and all material Employee Arrangements in the United
States.
(b) With respect to each material Employee Benefit Plan and each
material Employee Arrangement referred to above, a complete and correct copy of
each of the following documents (if applicable) has been provided or made
available to Acquiror: (i) the most recent plan document or agreement and all
amendments thereto; and (ii) the most recent summary plan description and all
related summaries of material modifications.
(c) Except as set forth in Section 3.10(c) of the Disclosure
Schedule, none of the Snapple Employee Benefit Plans is subject to Section 4063,
4064 or 4202 of ERISA.
(d) The Snapple Employee Benefit Plans and their related trusts
intended to qualify under Sections 401 and 501(a) of the Code, respectively,
have been determined by the IRS to qualify under such sections, as amended by
the Tax Reform Act of 1986.
(e) All contributions required to have been made by Snapple or
Seller under any Snapple Employee Benefit Plan or any Applicable Law to any
trusts established thereunder or in connection therewith have been made by the
due date therefor (including any valid extensions).
(f) The Snapple Employee Benefit Plans and Snapple Employee
Arrangements have been maintained, in all material respects, in accordance with
their terms and, to Seller's knowledge, Applicable Laws, including, but not
limited to, the filing of applicable reports, documents and notices regarding
any Snapple Employee Benefit Plans with the Secretary of Labor and the Secretary
of the Treasury, or the furnishing of such documents to participants in the
Snapple Employee Benefit Plans, except where any failure to
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comply would not, individually or in the aggregate, have a Material Adverse
Effect with respect to Snapple.
3.11 Compliance with Laws. Except as set forth in Section 3.11 of
the Disclosure Schedule, to the Knowledge of Seller, each of the Snapple
Companies is in compliance with all Applicable Laws, except where the failure to
so comply, individually or in the aggregate, would not have a Material Adverse
Effect with respect to Snapple, and the Snapple Companies have all permits,
licenses, certificates of authority, orders and approvals of, and have made all
filings, applications and registrations with, Governmental Authorities that are
required in order for the Snapple Companies to conduct the Snapple Business as
presently conducted, except for such permits, licenses, certificates, orders,
approvals, filings, applications and registrations, the failure to have or make
would not, individually or in the aggregate, have a Material Adverse Effect with
respect to Snapple; it being understood that nothing in this representation is
intended to address any matters which are the subject of the representation or
warranty set forth in Section 3.16.
3.12 Intellectual Property. Section 3.12 of the Disclosure Schedule
sets forth a list and description (including the country of registration) of all
material trademarks, trade names, service marks, copyrights and patents owned or
licensed by any of the Snapple Companies and all material patent applications of
any of the Snapple Companies. Except as set forth in Section 3.12 of the
Disclosure Schedule, the Snapple Companies own or possess licenses or other
rights to use all patents, trademarks, trade names, service marks, copyrights,
licenses and product licenses or registrations (including applications for any
of the foregoing) as are necessary to conduct the Snapple Business as currently
conducted, except those the lack of which would not, individually or in the
aggregate, have a Material Adverse Effect with respect to Snapple; and none of
Seller or any of the Snapple Companies has any Knowledge of any conflict with
the proprietary intellectual property rights relating to the Snapple Business or
any Knowledge of any conflict by Seller or any of the Snapple Companies with the
rights of others therein which, individually or in the aggregate, would have a
Material Adverse Effect with respect to Snapple.
3.13 Contracts. Section 3.13 of the Disclosure Schedule sets
forth a list, as of the date hereof, of each
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material written contract and lease and each material oral contract or lease as
to which Seller has Knowledge and to which any of the Snapple Companies is a
party ("Contract") (other than (i) any purchase or sale orders arising in the
ordinary course of business, (ii) any Contract involving the payment of less
than $1,000,000 in the aggregate and (iii) any Contract listed in any other
Section of the Disclosure Schedule). Except as set forth in Section 3.13 of the
Disclosure Schedule, each Contract set forth in Section 3.13 of the Disclosure
Schedule is a valid and binding agreement of the Snapple Company which is a
party thereto and, to the Knowledge of Seller, is in full force and effect.
Except as set forth in Section 3.13 of the Disclosure Schedule, Seller has no
Knowledge of any material default under any Contract set forth in Section 3.13
of the Disclosure Schedule which default has not been cured or waived and which
default would have a Material Adverse Effect with respect to Snapple.
3.14 Brokers. Except for Xxxxxxx, Sachs & Co., whose fees will be
paid by Seller, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Seller or the Snapple Companies who might be entitled to any fee or commission
from Seller or the Snapple Companies in connection with the transactions
contemplated by this Agreement.
3.15 Title to Properties. Each of the Snapple Companies has good and
valid title to all of the material tangible assets and properties which it owns
and which are reflected on the Statement of Assets and Liabilities (except for
assets and properties sold, consumed or otherwise disposed of by the Snapple
Companies in the ordinary course of business since the date of the Statement of
Assets and Liabilities), and such tangible assets and properties are owned free
and clear of all Encumbrances, except for (a) Encumbrances listed in Section
3.15 of the Disclosure Schedule, (b) liens for current Taxes not yet due and
payable or for Taxes the validity of which is being contested in good faith, (c)
Encumbrances to secure indebtedness reflected on the Statement of Assets and
Liabilities or indebtedness incurred in the ordinary course of business
consistent with past practice after the date thereof, (d) mechanic's liens,
materialmen's liens and other Encumbrances which have arisen in the ordinary
course of business and (e) Encumbrances which, in the aggregate, would not have
a Material Adverse Effect with respect to Snapple
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or materially adversely interfere with the use of such material assets and
properties as they are presently being used.
3.16 Environmental Matters. (a) Except as set forth in Section 3.16
of the Disclosure Schedule, to the Knowledge of Seller, the Snapple Companies
are in compliance with all applicable Environmental Laws, except where the
failure to be in compliance would not, individually or in the aggregate, have a
Material Adverse Effect with respect to Snapple.
(b) Except as set forth in Section 3.16 of the Disclosure Schedule,
to the Knowledge of Seller, none of the Snapple Companies has received any
written request for information, or has been notified that it is a potentially
responsible party, under CERCLA or any similar state law with respect to any
on-site or off-site location for which liability is currently being asserted.
(c) Except as set forth in Section 3.16 of the Disclosure Schedule,
there are no writs, injunctions, decrees, orders or judgments outstanding, or
any actions, suits, proceedings or investigations pending or, to the knowledge
of Seller, threatened, relating to compliance by the Snapple Companies with any
Environmental Law that, individually or in the aggregate, would have a Material
Adverse Effect with respect to Snapple.
3.17 Labor Relations. Except as set forth in Section 3.17 of the
Disclosure Schedule, none of the Snapple Companies is a party to any collective
bargaining agreements. Except as set forth in Section 3.17 of the Disclosure
Schedule, there is no unfair labor practice complaint or other proceeding
against any of the Snapple Companies pending before the National Labor Relations
Board which, if adversely decided, would have a Material Adverse Effect with
respect to Snapple, and there is no labor strike pending or threatened against
any Snapple Company which would have a Material Adverse Effect with respect to
Snapple.
3.18 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither Seller nor
any other Person makes any other express or implied representation or warranty
on behalf of Seller.
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3.19 Disclosure Schedule. On or prior to the date hereof, Seller has
delivered to Acquiror a schedule (as the same may be amended or supplemented
pursuant to this Section 3.19, the "Disclosure Schedule") setting forth, among
other things, items of disclosure relating to any or all of the representations
and warranties of Seller; provided, that (i) no such item is required to be set
forth in the Disclosure Schedule as an exception to a representation or warranty
if its absence would not result in the related representation or warranty being
deemed untrue or incorrect under the standard established by Section 3.20, and
(ii) the mere inclusion of an item in the Disclosure Schedule shall not be
deemed an admission by Seller that such item represents a material exception or
fact, event or circumstance or that such item would result in a Material Adverse
Effect with respect to Snapple. Seller may, by notice in accordance with this
Agreement, amend or supplement any Section of the Disclosure Schedule to include
any matters (x) which, if existing or occurring before or at the date of this
Agreement, would have caused any representation or warranty of the Seller to be
untrue or incorrect if not set forth or described in the Disclosure Schedule,
and (y) hereafter arising prior to the Closing which, if existing or occurring
before or at the date of this Agreement, would have been required to be set
forth or described in the Disclosure Schedule, it being hereby agreed and
understood that any such amendment or supplement to any Section of the
Disclosure Schedule shall not operate to cure any prior breach by Seller, under
the standard established by Section 3.20, of any representation or warranty to
which such amended or supplemented schedule relates. In no event shall Seller
have any liability by virtue of its failure to disclose in response to any
Section of this Agreement information which is disclosed herein in response to
another Section of this Agreement.
3.20 Standard. No representation or warranty of Seller contained in
Article III hereof shall be deemed untrue or incorrect, and Seller shall not be
deemed to have breached a representation or warranty, as a consequence of the
existence of any fact, circumstance or event unless such fact, circumstance or
event, individually or taken together with all other facts, circumstances or
events inconsistent with any Section of Article III, has had or would have a
Material Adverse Effect with respect to Snapple.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to Seller as follows:
4.1 Organization and Qualification. Acquiror is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own and operate its assets and properties and to carry on its
business as currently conducted. Acquiror is duly qualified to do business and
is in good standing in each jurisdiction where the ownership or operation of its
assets and properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing,
as the case may be, would not have a Material Adverse Effect with respect to
Acquiror.
4.2 Corporate Authorization. Acquiror has the requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations under this Agreement and to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance by Acquiror of this
Agreement and the consummation by Acquiror of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate action on
the part of Acquiror.
4.3 Consents and Approvals. Except as set forth in Section 4.3 of
the Disclosure Schedule, no consent, approval or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by Acquiror in connection with the execution, delivery and performance by
Acquiror of this Agreement and the consummation by Acquiror of the transactions
contemplated by this Agreement, except (i) for the filing of a premerger
notification and report form by Acquiror under the HSR Act, (ii) as may be
required under any Other Antitrust Regulations, (iii) as may be required under
any environmental, health, employment or safety law or regulation pertaining to
any notification, disclosure or required approval triggered by the transactions
contemplated by this Agreement, (iv) as may be required under the laws of any
foreign jurisdiction in which Acquiror or any Snapple Company conducts business
or owns assets and (v) for such other consents, approvals, orders,
authorizations,
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registrations, declarations and filings, the failure of which to be obtained or
made would not, individually or in the aggregate, (x) have a Material Adverse
Effect with respect to Acquiror or (y) materially impair or delay the ability of
Acquiror to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement.
4.4 Non-Contravention. The execution, delivery and performance by
Acquiror of this Agreement, and the consummation by Acquiror of the transactions
contemplated hereby, do not and will not (i) violate any provision of the
Certificate of Incorporation or the By-laws of Acquiror; (ii) conflict with, or
result in the breach of, or constitute a default under, or result in the
termination, cancellation or acceleration (whether after the filing of notice or
the lapse of time or both) of any material right or obligation of Acquiror or
any of its Subsidiaries under, any material agreement, lease, contract, note,
mortgage, indenture or other obligation of Acquiror or its Subsidiaries; or
(iii) subject to the exceptions set forth in Section 4.3, violate, or result in
a breach of or constitute a default under any Applicable Law or judgment, decree
or order of any Governmental Authority to which Acquiror or any of its
Subsidiaries is subject, other than, in the case of clauses (ii) and (iii), any
conflict, breach, termination, default, cancellation, acceleration, loss or
violation which, individually or in the aggregate, would not have a Material
Adverse Effect with respect to Acquiror or materially impair or delay the
ability of Acquiror to perform its obligations under this Agreement or
consummate the transactions contemplated by this Agreement.
4.5 Binding Effect. This Agreement constitutes a valid and legally
binding obligation of Acquiror enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
4.6 Brokers. Except for Xxxxxx Xxxxxxx & Co., Incorporated and
Salomon Brothers Inc, whose fees will be paid by Acquiror, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of Acquiror or any Subsidiary of Acquiror
who might be entitled to any fee or commission
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from Acquiror in connection with the transactions contemplated by this
Agreement.
4.7 Purchase for Investment. Acquiror is acquiring the Shares for
investment and not with a view toward, or for the purpose of, the resale or
distribution thereof. Acquiror acknowledges that the sale of the Shares
hereunder has not been registered under the Securities Act and that the Shares
may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act, pursuant to
an exemption therefrom or in a transaction not subject thereto. Acquiror has no
knowledge that any representation or warranty of Seller contained in Article III
is not true and correct in all material respects.
4.8 Financial Capability. Acquiror will have on the Closing Date
sufficient funds to purchase the Shares and consummate the transactions
contemplated by this Agreement. As of the date hereof, Acquiror has cash and
cash equivalents of approximately $195,000,000 (the "Cash").
4.9 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither Acquiror
nor any other Person makes any other express or implied representation or
warranty on behalf of Acquiror.
ARTICLE V
COVENANTS
5.1 Conduct of Snapple Business. Except as otherwise contemplated by
this Agreement or as set forth in Section 5.1 of the Disclosure Schedule or in
any other Section of the Disclosure Schedule, during the period from the date
hereof to the Closing, Seller shall, and shall cause the Snapple Companies to,
taking into account any matters that may arise that are attributable to the
pendency of the transactions contemplated by this Agreement, conduct the Snapple
Business only in the ordinary course. In addition, from and after the date
hereof to the Closing Date, except as otherwise provided in this Agreement or as
otherwise contemplated hereby or as set forth in Section 5.1 of the Disclosure
Schedule or in any other Section of the Disclosure Schedule, Seller shall not
permit any Snapple
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Company to, without the prior written consent of Acquiror (which consent shall
not be unreasonably withheld):
(i) amend its Certificate of Incorporation, By-Laws or other
comparable charter or organizational documents or merge with or into or
consolidate with any other person;
(ii) issue, sell, pledge, dispose of or encumber, or
authorize or propose the issuance, sale, pledge, disposition or
encumbrance of, any shares of, or securities convertible or exchangeable
for, or options, puts, warrants, calls, commitments or rights of any kind
to acquire, any of its capital stock or subdivide or in any way reclassify
any shares of its capital stock or change or agree to change in any manner
the rights of its outstanding capital stock;
(iii) except as may be required by agreements or arrangements
disclosed in the Disclosure Schedule, grant any severance or termination
pay to, or enter into, extend or amend any employment, consulting,
severance or other compensation agreement with, any of its directors,
officers or other employees whose annual base salary is in excess of
$200,000 which would bind any Snapple Company from and after the Closing
Date;
(iv) sell, lease, license, mortgage or otherwise encumber or
subject to any lien or otherwise dispose of any properties or assets
material to the Snapple Business having a fair market value in excess of
$2 million individually or $10 million in the aggregate;
(v) terminate any distributor or co-packer relationship;
(vi) enter into any material contract or other arrangement
with any new co-packer with a term of more than three months;
(vii) enter into any material distribution agreement with
respect to the Snapple Business, other than those agreements which have
been delivered to distributors prior to the date hereof, but not yet
mutually executed, as described in Section 3.13 of the Disclosure
Schedule;
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(viii) implement any change in its accounting principles,
practices or methods, other than as may be required by GAAP and other than
as may be necessary or advisable in connection with the transactions
contemplated hereby; or
(ix) authorize any of, or commit or agree to take any of,
the actions referred to in paragraphs (i) through (viii) above.
5.2 Access. Prior to the Closing, Seller shall, and shall cause the
Snapple Companies to, permit Acquiror and its officers, employees, accountants,
counsel, financial advisors and other representatives to have reasonable access,
during normal business hours and upon reasonable advance notice, to the
properties, books, records, accountants (subject to their availability) and
personnel of Seller and its Affiliates relating to the Snapple Business, and
shall furnish, or cause to be furnished, to Acquiror, all other information
concerning the Snapple Business or the Snapple Companies that is available as
Acquiror may reasonably request. In connection with such access, Acquiror's
representatives shall cooperate with Seller's and Snapple's representatives and
shall use their reasonable best efforts to minimize any disruption of the
Snapple Business. Acquiror agrees to abide by the terms of the Confidentiality
Agreement with respect to such access and any information furnished to it or its
representatives pursuant to this Section 5.2.
5.3 Reasonable Best Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, Seller and Acquiror shall use their
respective reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Authorities and the making of all necessary registrations and filings with, and
the taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Authority,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties (including, without limitation, any necessary consents for the
assignment to Acquiror of the contracts and arrangements
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referenced in the Assignment and Assumption Agreement), (iii) the defending of
any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of any of the transactions
contemplated by this Agreement, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Authority vacated
or reversed and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement; provided, however, that, notwithstanding the
foregoing, the actions of Seller and Acquiror with respect to filings, approvals
and other matters pursuant to the HSR Act and Other Antitrust Regulations shall
be governed by Section 5.4. To the extent that any contract, permit or other
arrangement that the parties intend to assign, as specified herein and in the
Assignment and Assumption Agreement (hereinafter, collectively the "Assigned
Contracts"), is not capable of being assigned or transferred without the consent
or waiver of the other party thereto or any other third party (including a
government or governmental unit), or if such assignment or transfer or attempted
assignment or transfer would constitute a breach thereof or a violation of any
law, decree, order, regulation or other governmental edict, this Agreement shall
not constitute an assignment or transfer thereof, or an attempted assignment or
transfer of any such Assigned Contracts until such time as such consent or
waiver is obtained. Anything in this Agreement to the contrary notwithstanding,
Seller is not obligated to transfer to Acquiror any of its rights and
obligations in and to any of the Assigned Contracts without first having
obtained all necessary consents and waivers. Prior to the Closing Date, Seller
shall use its reasonable best efforts to obtain consents to the assignment of
the Assigned Contracts, provided, however, that Seller shall not, without
Acquiror's consent (which shall not be unreasonably withheld), agree to any
modification of any such Assigned Contracts in the course of obtaining any such
consents or waivers. Prior to and for a reasonable period of time after the
Closing Date, Seller shall cooperate with Acquiror to assist Acquiror in
obtaining any other consents and waivers under any Assigned Contract which are
reasonably requested by Acquiror. If any such consent or waiver cannot be
obtained, Seller and Acquiror will cooperate to implement reasonable
arrangements resulting in Acquiror obtaining the benefits and privileges of the
relevant Assigned Contract (including without limitation enforcement for the
benefit of Acquiror of any
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and all rights of Seller against a third party or otherwise) while protecting
Seller from continuing liabilities or obligations thereunder.
5.4 Antitrust Notification. (a) Seller and Acquiror shall, as
promptly as practicable, but in no event later than 10 Business Days following
the execution and delivery of this Agreement, file with (i) the FTC and the DOJ,
the notification and report form required for the transactions contemplated
hereby and any supplemental information requested in connection therewith
pursuant to the HSR Act and (ii) any other applicable Governmental Authority all
filings, reports, information and documentation required for the transactions
contemplated hereby pursuant to Other Antitrust Regulations. Each of Seller and
Acquiror shall furnish to each other's counsel such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submission that is necessary under the HSR Act and
Other Antitrust Regulations.
(b) Each of Seller and Acquiror shall use its best efforts to obtain
any clearance required under the HSR Act and Other Antitrust Regulations for the
consummation of the transactions contemplated by this Agreement and shall keep
each other apprised of the status of any communications with, and any inquiries
or requests for additional information from, the FTC and the DOJ and other
Governmental Authorities and shall comply promptly with any such inquiry or
request.
(c) Each of Seller and Acquiror shall use its best efforts to take
any action reasonably necessary to vigorously defend, lift, mitigate and rescind
the effect of any litigation or administrative proceeding adversely affecting
this Agreement or the transactions contemplated hereby, including, without
limitation, promptly appealing any adverse court or administrative order or
injunction.
5.5 Supplemental Disclosure. Seller shall confer on a regular and
frequent basis with Acquiror, report on operational matters and promptly notify
Acquiror of, and furnish Acquiror with, any information it may reasonably
request with respect to, any event or condition or the existence of any fact
that would cause any of the conditions to Acquiror's obligation to consummate
the transactions contemplated by this Agreement not to be completed, and
Acquiror shall promptly notify Seller of, and furnish Seller
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with any information it may reasonably request with respect to, any event or
condition or the existence of any fact that would cause any of the conditions to
Seller's obligation to consummate the transactions contemplated by this
Agreement not to be completed. Prior to the Closing, Seller shall deliver to
Acquiror within 21 days of the end of each month monthly financial statements of
the Snapple Business, which monthly financial statements are prepared in the
ordinary course of business, on a basis consistent with the direct contribution
and invested capital statements previously delivered.
5.6 Further Assurances. (a) At any time after the Closing Date,
Seller, on the one hand, and Acquiror, on the other hand, shall promptly
execute, acknowledge and deliver any other assurances or documents reasonably
requested by Acquiror or Seller, as the case may be, and necessary for it to
satisfy its respective obligations hereunder or obtain the benefits contemplated
hereby.
(b) In the event that, subsequent to the Closing Date, Acquiror
shall receive written notice from Seller that certain specified assets which
were transferred to Acquiror through the sale of the Shares constitute assets
which were used predominantly in the Seller's non-Snapple Business prior to the
Closing Date, Acquiror shall transfer and deliver any and all of such assets to
Seller without the payment by Seller of any consideration therefor, subject to
all liabilities relating thereto, environmental or otherwise, that were in
effect when such assets were transferred to Acquiror, shall execute such
instruments of conveyance and transfer, assignments, bills of sale and other
documents as may be reasonably requested by Seller in connection therewith and
shall cooperate with Seller in causing the transfer of such assets to occur in a
manner to appropriately minimize the payment of Taxes. In addition, any transfer
of assets pursuant to this Section 5.6(b) shall be treated as if such assets
were distributed as a dividend by Snapple to Seller on the day immediately
preceeding the Closing Date.
5.7 Announcements. Prior to the Closing, neither Seller nor Acquiror
will issue any press release or otherwise make any public statement with respect
to this Agreement and any of the transactions contemplated hereby without the
prior consent of the other (which consent shall not be unreasonably withheld),
except as expressly permitted by and in accordance with the terms of the
Confidentiality
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Agreement. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the parties.
5.8 Employee Matters. (a) Section 5.8(a) of the Disclosure Schedule
sets forth a complete and correct list of all Employee Benefit Plans or portions
thereof which Acquiror hereby covenants and agrees that the Snapple Companies or
Acquiror will assume and be liable for with respect to any employee or former
employee of the Snapple Companies or the Snapple Business after the Closing Date
(the "Snapple Employee Benefit Plans"). Section 5.8(a) of the Disclosure
Schedule also sets forth a complete and correct list of all Employee
Arrangements or portions thereof which Acquiror hereby covenants and agrees that
the Snapple Companies or Acquiror will assume and be liable for with respect to
any employee or former employee of the Snapple Companies or the Snapple Business
after the Closing Date (the "Snapple Employee Arrangements"). Effective as of
the Closing Date, Snapple Employees (as hereinafter defined in Section 5.8(b))
will cease participation in all Employee Benefit Plans and all Employee
Arrangements other than the Snapple Employee Benefit Plans and the Snapple
Employee Arrangements. Snapple Employees will be treated as 100% vested in their
accrued benefits under any such Employee Benefit Plan constituting a qualified
pension plan under Section 401(a) of the Code.
(b) Prior to the Closing, Seller shall cause the employees listed in
Section 5.8(b) of the Disclosure Schedule to become employees of Snapple or
another applicable Snapple Company (to the extent that such employees are not
employees of Snapple or another applicable Snapple Company as of the date
hereof). All such employees, any other employees in the Snapple division working
exclusively on the Snapple Business, and any other employees that are hired by a
Snapple Company between the date hereof and the Closing Date, are hereinafter
collectively referred to as the "Snapple Employees". The parties agree that all
Snapple Employees will remain employees of a Snapple Company immediately
following the Closing. Notwithstanding the foregoing, the term "Snapple
Employees" shall not include employees who as of the Closing Date are "disabled"
(within the meaning of the long-term disability plans applicable to the Snapple
Companies), former employees and retired employees of the Snapple Companies.
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(c) No provision of this Agreement shall be construed to prohibit
the Snapple Companies or any Affiliate thereof from having the right to
terminate the employment of any Snapple Employee, with or without cause, or to
amend or to terminate any Snapple Employee Benefit Plans or Snapple Employee
Arrangements established, maintained or contributed to by the Snapple Companies,
Acquiror or their Affiliates after the Closing.
(d) Service by Snapple Employees with the Snapple Companies or any
of their Affiliates shall be recognized under any benefit plan or arrangement
established, maintained or contributed to by Acquiror, the Snapple Companies, or
any of their Affiliates after the Closing for the benefit of any Snapple
Employee solely for purposes of eligibility to participate and vesting, and for
accrual under any severance plan, but in no event shall such service be taken
into account in determining the accrual of benefits under a defined benefit
plan. Acquiror shall indemnify Seller for any claim by Snapple Employees that
they are entitled to severance or similar payments as a result of the
transactions contemplated by this Agreement or any act of Acquiror following the
Closing; provided, that to the extent any such claim arises under any
arrangement, agreement or plan maintained by Seller or any of its Affiliates,
such arrangement, agreement or plan shall have been disclosed to Acquiror prior
to the date of this Agreement.
(e) Prior to the Closing Seller shall take all action necessary to
assume all liabilities of the Snapple Companies arising under, in connection
with or relating to, any Employee Benefit Plan, other than any Snapple Employee
Benefit Plan or any Snapple Employee Arrangement, and all liabilities arising
under, in connection with or relating to all Snapple Employee Benefit Plans and
Snapple Employee Arrangements shall be assumed and paid by Acquiror.
(f) Following the Closing, the Snapple Employees shall have
substantially the same compensation, benefits and severance as provided for
similarly situated employees of Acquiror's Mistic business. It is understood
that Acquiror is not required to maintain any of the benefit plans and
arrangements listed in the Disclosure Schedule.
(g) Seller and Acquiror agree to cooperate to carry out the duties
and responsibilities contained in this Section 5.8. In addition, Seller agrees
to make available to Acquiror such information as Acquiror may reasonably
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request to facilitate the determination of (i) the period of service of any
Snapple Employee with the Snapple Companies or any of their Affiliates prior to
the Closing Date, (ii) individual service accruals and salary histories of
Snapple Employees and (iii) such other information as Acquiror may reasonably
request to carry out the provisions of this Section 5.8.
5.9 Preservation of Records. Subject to Section 8.4, Acquiror agrees
that it shall, at its own expense, preserve and keep the records held by it
relating to the Snapple Business that could reasonably be required after the
Closing by Seller for as long as is specified for such categories of records in
Seller's document retention program in effect on the Closing Date (a copy of
which has been provided to Acquiror). In addition, Acquiror shall make such
records available to Seller as may be reasonably required by Seller in
connection with, among other things, any insurance claim, legal proceeding or
governmental investigation relating to the Snapple Business.
5.10 Other Agreements. Each of Seller and Acquiror agrees that it
shall (and, with respect to clauses (ii) through (vii) below, shall cause
Snapple to), on or prior to the Closing, enter into (i) a Transition Services
Agreement, substantially in the form of Exhibit A hereto (the "Transition
Services Agreement"), with respect to shared arrangements between any Snapple
Company, on the one hand, and Seller or any of its other Subsidiaries, on the
other hand, (ii) a Patent License Agreement, substantially in the form of
Exhibit B hereto (the "Patent License Agreement"), with respect to the licensing
of certain patents, (iii) a Shared Technology License Agreement, substantially
in the form of Exhibit C hereto (the "Shared Technology License Agreement"),
with respect to the cross-licensing of shared technology, (iv) an Assignment and
Delegation Agreement Regarding Services of Beverage America, Inc. d/b/a Xxxxxx
Pro-Pak, substantially in the form of Exhibit D hereto (the "Xxxxxx Agreement"),
(v) an Assignment and Delegation Agreement Regarding Services of Power
Packaging, Inc., substantially in the form of Exhibit E hereto (the "Power
Packaging Agreement"), provided, however, that if for any reason prior to the
Closing Date Xxxxxxx-Xxx Xxxx, Inc. ("SVC"), Snapple and Power Packaging, Inc.
do not enter into an amended Manufacturing Agreement, substantially in the form
of the January 1997 draft previously provided to Acquiror, with respect to the
Xxxxxxxx facility, then Seller, Snapple and Acquiror shall enter into an
agreement
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with respect to SVC's and Snapple's rights and obligations under the existing
Facility Construction and Manufacturing Agreement dated as of November 30, 1993
between Snapple and Power Packaging, Inc. that is substantially similar in
effect to the Power Packaging Agreement and (vi) an Assignment and Assumption
Agreement, substantially in the form of Exhibit F hereto (the "Assignment and
Assumption Agreement").
5.11 Financial Statements. Seller shall, at Acquiror's expense, (i)
within 90 days following the date of this Agreement, deliver to Acquiror audited
financial statements for the Snapple Companies for the years ended December 31,
1996, December 31, 1995 and December 31, 1994, such audited financial statements
to present the consolidated balance sheets of the Snapple Companies as of such
dates and the related consolidated statements of operations and cash flows and
related footnotes for each of such years (collectively, the "Audited Financial
Statements") and (ii) within 90 days following the date on which Seller receives
written notice from Acquiror that Acquiror is required to include such interim
financial information in a specific filing with the United States Securities and
Exchange Commission, unaudited financial statements for the Snapple Companies
for the quarters ended March 31, 1996 and March 31, 1997, such unaudited
financial statements to present the consolidated balance sheets of the Snapple
Companies as of such dates and the related consolidated statement of operations
and cash flows and related footnotes each for such period. In addition, if
Acquiror proposes to engage in a transaction or filing regarding any of the
Snapple Companies that requires the creation of pro forma or historical
financial statements for any of the Snapple Companies, individually or in some
combination (including any filing with the United States Securities and Exchange
Commission that requires financial statements for any of the Snapple Companies
prepared in accordance with Regulation S-X), for any period of time prior to the
Closing Date, Seller shall permit Acquiror and its officers, employees,
accountants, counsel, financial advisors and other representatives, to have
reasonable access, during normal business hours and upon reasonable advance
notice, to the properties, books and records of Seller and its Affiliates
relating to the Snapple Business solely for such purpose.
5.12 Related Party Payments. Except as otherwise provided in
this Agreement and the other agreements and documents contemplated hereby, all
liabilities and obliga-
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tions of the Snapple Companies to Seller and its Affiliates shall be paid or
otherwise settled on or prior to the Closing.
5.13 Continental PET. Seller shall use commercially reasonable
efforts to provide, in connection with products co-packed by Seller, the
remaining calendar 1997 requirements, and 1998 and 1999 requirements (as
described and limited in the Xxxxxx Agreement and the Power Packaging
Agreement), of Snapple for 20 oz. bottles that are produced for Seller pursuant
to any contract with Continental PET Technologies, Inc. and co-packed at
Seller's Xxxxxxxx facility or at the Xxxxxx Pro-Pak facility at a cost equal to
that charged to Seller by Continental PET Technologies, Inc.
5.14 Payment of Proceeds. Acquiror agrees to cause Snapple to pay to
Seller, immediately upon receipt, any proceeds paid to Snapple in connection
with the settlement of the Snapple Beverage Corp. x. Xxxxxxxx & Sterling
Litigation (E.D.N.Y.). Any payments made under this Section 5.14 shall be net of
any Taxes payable with respect to the receipt or accrual of any such proceeds
after the Closing (taking into account any actual reduction in Tax liability
after the Closing realized or that will be realized upon the payments pursuant
to this Section 5.14).
5.15 Insurance. (a) Seller and Acquiror agree that Casualty
Insurance Claims relating to the Snapple Business (including reported claims and
including incurred but not reported claims) will remain with the Snapple
Companies immediately following the Closing. For purposes hereof, "Casualty
Insurance Claims" shall mean workers' compensation, auto liability, general
liability and products liability claims. The Casualty Insurance Claims are
subject to the provisions of policies of insurance with insurance carriers and
contractual arrangements with insurance adjusters maintained by Seller prior to
the Closing (collectively, the "Insurance Policies"). With respect to the
Casualty Insurance Claims, the following procedures shall apply: (i) Seller
shall continue to administer, adjust, settle and pay, on behalf of Snapple, all
Casualty Insurance Claims with dates of occurrence prior to the date of Closing;
provided, that Seller will obtain the consent of Acquiror prior to adjusting,
settling or paying any Casualty Insurance Claim of an amount greater than
$50,000; and (ii) Seller shall invoice Snapple at the end of each month for
Casualty Insurance Claims paid on behalf of Snapple by the
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Seller or Seller's insurance company or insurance adjuster during the previous
month. Acquiror shall cause Snapple to pay the Seller within 15 days of the date
of each monthly invoice. In the event that Snapple does not pay Seller within 15
days of such invoice, interest at the rate of 10% per annum shall accrue on the
amount of such invoice. Casualty Insurance Claims to be paid by Snapple
hereunder shall include all costs necessary to settle claims including, but not
limited to, compensatory, medical, legal and other allocated expenses. In the
event that any Casualty Insurance Claim exceeds a deductible or self-insured
retention under the Insurance Policies, and provided that Snapple shall have
properly paid any costs related to such Casualty Insurance Claim, Snapple shall
be entitled to the benefit of any insurance proceeds that may be available to
discharge any portion of such Casualty Insurance Claim.
(b) Seller makes no representation or warranty with respect
to the existence, applicability, validity or adequacy of any Insurance Policy,
and Seller shall not be responsible to Acquiror or any of its Affiliates for the
failure of any insurer to pay under any such Insurance Policy.
(c) Nothing in this Agreement is intended to provide or
shall be construed as providing a benefit or release to any insurer or claims
service organization of any obligation under any Insurance Policy. Seller and
Acquiror confirm that the sole intention of this Section 5.15 is to divide and
allocate the benefits and obligations under the Insurance Policies between them
as of the Closing Date and not to affect, enhance or diminish the rights and
obligations of any insurer or claims service organization thereunder. Nothing
herein shall be construed as creating or permitting any insurer or claims
service organization the right of subrogation against Seller or Acquiror or any
of their Affiliates in respect of payments made by one to the other under any
Insurance Policy.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to the Obligations of Acquiror
and Seller. The respective obligation of each party to
effect the Closing is subject to the satisfaction or waiver
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(to the extent permitted under Applicable Laws) on or prior to the Closing Date
of the following conditions:
(a) No Injunctions or Restraints. No statute, rule, regulation,
decree, preliminary or permanent injunction, temporary restraining order or
other order of any nature of any U.S. federal or state Governmental Authority
shall be in effect that restrains, prevents or materially changes the
transactions contemplated hereby; provided, however, that in the case of a
decree, injunction or other order, each of the parties shall have used its best
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any decree, injunction or other order.
(b) Updating. If Seller has, in accordance with Section 3.19 of this
Agreement, amended or supplemented any Section of the Disclosure Schedule, the
matters included in such amendments or supplements shall not, individually or in
the aggregate, have a Material Adverse Effect with respect to Snapple.
(c) HSR Act. The applicable waiting periods under the HSR Act shall
have expired or been terminated.
6.2 Conditions to the Obligations of Acquiror. The obligation of
Acquiror to effect the Closing is further subject to the satisfaction of the
following conditions, any or all of which may be waived on or prior to the
Closing Date in whole or in part by Acquiror:
(a) Representations and Warranties. The representations and
warranties of Seller made hereunder shall be true and correct, subject to the
standard set forth in Section 3.20, at and as of the Closing Date, except for
changes permitted or contemplated by this Agreement and except to the extent
that any representation or warranty is expressly made as of a specified date, in
which case such representation or warranty shall be true and correct, subject to
the standard set forth in Section 3.20, only as of such date. Acquiror shall
have received a certificate to that effect dated the Closing Date and signed on
behalf of Seller by an authorized officer of Seller.
(b) Agreements. Seller shall have performed in all material
respects all of its material obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and Acquiror shall have
received
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a certificate to that effect dated the Closing Date and signed on behalf of
Seller by an authorized officer of Seller.
(c) Legal Opinion. Acquiror shall have received the opinion of
Seller's in-house counsel, dated as of the Closing Date, addressed to Acquiror
substantially to the effect set forth in Exhibit G hereto.
6.3 Conditions to the Obligations of Seller. The obligation of
Seller to effect the Closing is further subject to the satisfaction of the
following conditions, any or all of which may be waived on or prior to the
Closing Date in whole or in part by Seller:
(a) Representations and Warranties. The representations and
warranties of Acquiror made hereunder shall be true and correct in all material
respects, at and as of the Closing Date, except for changes permitted or
contemplated by this Agreement and except to the extent that any representation
or warranty is expressly made as of a specified date, in which case such
representation or warranty shall be true and correct in all material respects,
only as of such date. Seller shall have received a certificate to that effect
dated the Closing Date and signed on behalf of Acquiror by an authorized officer
of Acquiror.
(b) Agreements. Acquiror shall have performed in all material
respects all of its material obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and Seller shall have received a
certificate to that effect dated the Closing Date and signed on behalf of
Acquiror by an authorized officer of Acquiror.
(c) Legal Opinion. Seller shall have received the opinion of
Acquiror's counsel, dated as of the Closing Date, addressed to Seller
substantially to the effect set forth in Exhibit H hereto.
ARTICLE VII
SURVIVAL; GENERAL INDEMNIFICATION
7.1 Survival. All of the representations and warranties of
Seller and Acquiror contained in this Agreement (other than in Section 3.9) and
all claims and causes of action with respect thereto shall terminate upon the
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first anniversary of the Closing Date and notices of such claims for
indemnification under Section 7.2 or 7.3(a) shall be given within such one-year
period. In the event notice of such claim for indemnification under Section 7.2
or Section 7.3(a) is given (within the meaning of Section 10.5) within the
applicable survival period, the representations and warranties that are the
subject of such indemnification claim shall survive with respect to such claim
until such time as such claim is finally resolved.
7.2 Indemnification by Acquiror. Subject to Section 7.1 and except
as otherwise provided in Article VIII, Acquiror hereby agrees that it shall
indemnify, defend and hold harmless Seller and, if applicable, its directors,
officers, employees, representatives, advisors, agents and Affiliates (the
"Seller Indemnified Parties") from, against and in respect of any and all
damages, claims, losses, charges, actions, suits, proceedings, deficiencies,
Taxes, interest, penalties, and reasonable costs and expenses (but not
including, consequential, exemplary, special and punitive damages and lost
profits, other than such damages awarded to any third party against an
Indemnified Party) (collectively, the "Losses") arising out of, relating to or
resulting from, directly or indirectly:
(i) any breach of any representation or warranty made by
Acquiror contained in this Agreement;
(ii) the breach of any covenant or agreement of Acquiror
contained in this Agreement; and
(iii) except as otherwise provided in Article VIII or specifically
enumerated as an item as to which Seller will indemnify Acquiror pursuant
to Section 7.3, all liabilities and obligations of the Snapple Companies
and the Business, regardless of when they arose or arise and regardless of
by whom or when asserted.
7.3 Indemnification by Seller. (a) Subject to Sections 7.1 and
7.3(b), and except as otherwise provided in Article VIII, Seller hereby agrees
that it shall indemnify, defend and hold harmless Acquiror and, if applicable,
its directors, officers, employees, representatives, advisors, agents and
Affiliates (other than employees of the Snapple Companies) (the "Acquiror
Indemnified Parties") from, against and in respect of any Losses arising out of,
relating to or resulting from, directly or indirectly:
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(i) any breach, subject to the standard set forth in Section
3.20, of any representation or warranty made by Seller contained in this
Agreement;
(ii) the breach of any covenant or agreement of Seller contained
in this Agreement; and
(iii) any liabilities and expenses attributable to Employee Benefit
Plans (other than Snapple Employee Benefit Plans) and Employee
Arrangements (other than Snapple Employee Arrangements), except for
liabilities and expenses to be paid by Acquiror and/or Snapple pursuant to
Section 5.8.
(b) Seller shall not be liable to the Acquiror Indemnified Parties
for any Losses with respect to the matters enumerated in Section 7.3(a) unless
the Losses therefrom exceed an aggregate amount equal to 3% of the Purchase
Price, and then only for such Losses in excess of 3% of the Purchase Price and
only up to an aggregate amount equal to 25% of the Purchase Price; provided,
however, that the foregoing shall not apply to any Losses for claims under
Article II of this Agreement.
7.4 Procedure for Indemnification. Subject to Section 7.1, all
claims for indemnification under this Article VII shall be asserted and resolved
as follows:
(a) In the event that any claim or demand, or other circumstance or
state of facts which could give rise to any claim or demand, for which an
Indemnifying Party may be liable to an Indemnified Party hereunder is asserted
against or sought to be collected by a third party (an "Asserted Liability"),
the Indemnified Party shall as soon as reasonably possible notify the
Indemnifying Party in writing of such Asserted Liability, specifying the nature
of such Asserted Liability (the "Claim Notice"); provided, that no delay on the
part of the Indemnified Party in giving any such Claim Notice shall relieve the
Indemnifying Party of any indemnification obligation hereunder except to the
extent that the Indemnifying Party is materially prejudiced by such delay. The
Indemnifying Party shall have 60 days (or less if the nature of the Asserted
Liability requires) from its receipt of the Claim Notice (the "Notice Period")
to notify the Indemnified Party whether or not the Indemnifying Party desires,
at the Indemnifying Party's sole cost and expense and by counsel of its own
choosing to defend against such Asserted Liability; provided, that if,
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under applicable standards of professional conduct a conflict on any significant
issue between the Indemnifying Party and any Indemnified Party exists in respect
of such Asserted Liability, then the Indemnifying Party shall reimburse the
Indemnified Party for the reasonable fees and expenses of one additional counsel
(who shall be reasonably acceptable to the Indemnifying Party). The Indemnifying
Party shall not, without the prior written consent of the Indemnified Party
(which consent shall not be unreasonably withheld), consent to any settlement
unless such settlement (i) includes a complete release of the Indemnified Party
and (ii) does not require the Indemnified Party to make any payment or forego or
take any action. Notwithstanding the foregoing, the Indemnified Party shall have
the right to control, pay or settle any Asserted Liability which the
Indemnifying Party shall have undertaken to defend so long as the Indemnified
Party shall also waive any right to indemnification therefor by the Indemnifying
Party. If the Indemnifying Party undertakes to defend against such Asserted
Liability, the Indemnified Party shall cooperate fully with the Indemnifying
Party and its counsel in the investigation, defense and settlement thereof, but
the Indemnifying Party shall control the investigation, defense and settlement
thereof. If the Indemnified Party desires to participate in any such defense it
may do so at its sole cost and expense. If the Indemnifying Party elects not to
defend against such Asserted Liability, then the Indemnifying Party shall have
the right to participate in any such defense at its sole cost and expense, but
the Indemnified Party shall control the investigation, defense and settlement
thereof at the reasonable cost and expense of the Indemnifying Party. The
Indemnifying Party shall not be liable for any settlement of any Asserted
Liability effected without its prior written consent (which consent shall not be
unreasonably withheld).
(b) In the event that an Indemnified Party should have a claim
against the Indemnifying Party hereunder which does not involve a claim or
demand being asserted against or sought to be collected from it by a third
party, the Indemnified Party shall send a Claim Notice with respect to such
claim to the Indemnifying Party. The Indemnifying Party shall have 60 days from
the date such Claim Notice is delivered during which to notify the Indemnified
Party in writing of any good faith objections it has to the Indemnified Party's
Claim Notice or claims for indemnification, setting forth in reasonable detail
each of the Indemnifying Party's objections thereto. If the Indemnifying Party
does
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deliver such written notice of objection within such 60-day period, the
Indemnifying Party and the Indemnified Party shall attempt in good faith to
resolve any such dispute within 60 days of the delivery by the Indemnifying
Party of such written notice of objection.
(c) With respect to the liabilities for which Seller shall be
required to provide indemnification pursuant to Section 7.3(a)(i) resulting from
a breach of Section 3.16, (i) the Acquiror Indemnified Parties shall cooperate
with Seller, provide Seller as promptly as possible with all relevant materials,
information and data requested by Seller and shall grant Seller, without charge,
reasonable access to employees and premises of the Snapple Companies, including
the right to conduct environmental tests thereon and to take samples therefrom.
(d) Acquiror acknowledges that the indemnification provisions
contained in this Article VII and in Article VIII constitute Acquiror's sole
remedy with respect to any of the matters arising out of or in connection with
this Agreement, the Disclosure Schedule or any Exhibit hereto. Acquiror
acknowledges and agrees that: (i) Acquiror and its representatives have the
experience and knowledge to evaluate the business, financial condition, assets
and liabilities of the Snapple Companies; and (ii) in determining to acquire the
Shares and, therefore, the Snapple Business and the underlying assets and
liabilities of the Snapple Companies (including the real property, fixtures and
the tangible personal property), Acquiror has made its own investigation into,
and based thereon Acquiror has formed an independent judgment concerning, the
Shares, the Snapple Business and the underlying assets and liabilities of the
Snapple Companies (including the real property, fixtures and the tangible
personal property). It is therefore expressly understood and agreed that, except
as otherwise provided in this Agreement, Acquiror accepts the condition of the
real property and tangible personal property of the Snapple Companies "AS IS,
WHERE IS" without any representation, warranty or guarantee, express or implied,
as to merchantability, fitness for a particular purpose or otherwise as to the
condition, size, extent, quantity, type or value of such property. Acquiror
hereby waives, releases and agrees not to make any claim or bring any
contribution, cost recovery or other action against Seller, its Affiliates, and,
if applicable, their respective directors, officers, shareholders, partners,
attorneys, accountants, agents and employees and their heirs, successors and
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assigns, under the Environmental Laws, common law, or any similar federal, state
or local environmental law or regulation now existing or hereafter enacted other
than for Losses which Seller is expressly required to indemnify Acquiror under
this Article VII. Acquiror agrees that it will not bring any such claim or
action under any Environmental Laws or any other environmental law or regulation
which seeks to allocate liabilities between Acquiror and Seller in a different
manner than as expressly set forth in this Agreement or in a more costly manner
than would be the case under applicable Environmental Laws in effect on the date
hereof.
7.5 Characterization of Indemnification Payments. All amounts paid
by Acquiror or Seller, as the case may be, under this Article VII or Article
VIII shall be treated as adjustments to the Purchase Price for all Tax purposes.
7.6 Computation of Losses; Disputes. The amount of any Losses for
which indemnification is provided under this Article VII or Article VIII shall
be reduced by (x) any related Tax benefits if and when actually realized or
received (but only after taking into account any Tax benefits (including,
without limitation, any net operating losses or other deductions and any
carryovers or carrybacks) to which the Indemnified Party would be entitled
without regard to such item), except to the extent such recovery has already
been taken into account in determining the amount of any such Losses, and (y)
any insurance recovery if and when actually realized or received, in each case
in respect of such Losses. Any such recovery shall be promptly repaid by the
Indemnified Party to the Indemnifying Party following the time at which such
recovery is realized or received pursuant to the previous sentence, minus all
reasonably allocable costs, charges and expenses incurred by the Indemnified
Party in obtaining such recovery. Notwithstanding the foregoing, if (x) the
amount of Indemnifiable Losses for which the Indemnifying Party is obligated to
indemnify the Indemnified Party is reduced by any Tax benefit or insurance
recovery in accordance with the provisions of the previous sentence, and (y) the
Indemnified Party subsequently is required to repay the amount of any such Tax
benefit or insurance recovery or such Tax benefit or insurance recovery is
disallowed, then the obligation of the Indemnifying Party to indemnify with
respect to such amounts shall be reinstated immediately and such amounts
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shall be paid promptly to the Indemnified Party in accordance with the
provisions of this Agreement.
ARTICLE VIII
TAX MATTERS; TAX INDEMNIFICATION
8.1 Tax Indemnification. (a) Seller agrees to be responsible for and
to indemnify and hold the Acquiror Indemnified Parties harmless from and against
any and all Taxes (and claims with respect to Taxes) that may be imposed upon or
assessed against any of the Snapple Companies or the assets of any of the
Snapple Companies:
(i) with respect to all taxable periods ending on or prior
to the Closing Date, except for Taxes arising out of any transaction
occurring after the Closing but on the Closing Date not in the ordinary
course;
(ii) with respect to any and all Taxes of any of the Snapple
Companies for the period allocated to Seller pursuant to Section 8.3(d);
(iii) arising by reason of any breach by Seller of any of the
representations contained in Section 3.9 hereof;
(iv) with respect to any claim under the Asset Purchase Agreement
dated as of January 31, 1992 by and among Snapple Beverage Corp., Snapple
Holding Corp., Unadulterated Food Products, Inc., Xxxxx Xxxxxx, Xxxxxx
Xxxxxxxxx and Xxxxxxx Xxxxx, including under Section 1.09 of such
agreement;
(v) with respect to all taxable periods ending on or prior to
the Closing Date, any Taxes arising by reason of Treasury Regulation
Section 1.1502-6 or any comparable provision of state, local or foreign
law; and
(vi) arising by reason of a transfer of assets described in
Section 5.6(b).
(b) Acquiror agrees to indemnify and hold harmless the Seller
Indemnified Parties from and against any and all Taxes of the Snapple Companies
(i) with respect to any
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taxable period of the Snapple Companies beginning after the Closing Date, (ii)
arising out of any transaction occurring after the Closing but on the Closing
Date not in the ordinary course and (iii) attributable to the period allocated
to Acquiror pursuant to Section 8.3(d).
8.2 No Tax Elections. Seller and Acquiror acknowledge that no
election will be made under Section 338(a) or Section 338(h)(10) of the Code to
treat the purchase and sale of the Shares pursuant to this Agreement as a sale
of assets for income tax purposes. Seller agrees that neither it nor any
Affiliate will apply for, enter into or make any Tax Agreement, Consent or
Ruling with respect to any of the Snapple Companies, or any of the assets owned
by any Snapple Company on the Closing Date. Further, Seller agrees that neither
it nor any Affiliate will make any Tax election with respect to any of the
Snapple Companies or any of the assets owned by any Snapple Company on the
Closing Date without the consent of Acquiror (which consent shall not be
unreasonably withheld), except for those Tax elections consistent with the prior
practice of the Snapple Companies or required by a change in applicable Tax
laws, rules or regulations.
8.3 Preparation of Tax Returns; Payment of Taxes. (a) Seller shall
include the Snapple Companies or cause the Snapple Companies to be included in,
and shall timely file or cause to be timely filed, (i) the United States
consolidated federal income Tax Returns of Seller or its Affiliates for the
taxable periods of the Snapple Companies ending on or prior to the Closing Date
and (ii) where applicable, all other consolidated, combined or unitary Tax
Returns of Seller or its Affiliates for the taxable periods of Snapple ending on
or prior to the Closing Date, and shall pay any and all Taxes due with respect
to the returns referred to in clause (i) or (ii) of this Section 8.3(a). The Tax
Returns referred to in this Section 8.3(a) shall be prepared in a manner
consistent with the prior practice of the Snapple Companies unless otherwise
required by a change in applicable Tax laws, rules or regulations. Seller shall
provide Acquiror with copies of such Tax Returns, but only to the extent of the
discrete Snapple federal income Tax Return which is made part of and includable
in the United States consolidated federal income Tax Return of Seller and the
discrete Snapple state income tax returns which are made part of and includable
in any consolidated, combined or unitary state Tax Return. Seller shall provide
such Tax Returns (or the portion thereof) to
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Acquiror at least 30 days prior to the due date for filing such return, and
Acquiror shall have the right to review and comment on such Tax Returns for 15
days following receipt thereof. Nothing contained in the foregoing shall in any
manner terminate, limit or adversely affect any right of Acquiror Indemnified
Parties, Seller or Snapple to receive indemnification pursuant to any provision
in this Agreement.
(b) In addition to the Tax Returns referred to in Section 8.3(a)
above, Seller shall prepare all other Tax Returns of, or which include, any of
the Snapple Companies for taxable periods that end on, end prior to or which
include the Closing Date. To the extent any such Tax Returns are required to be
filed (taking into account any extensions) on or prior to the Closing Date,
Seller shall timely file or shall cause the Snapple Companies to timely file
such Tax Returns and shall pay any and all Taxes due with respect to such Tax
Returns. To the extent any such Tax Returns are required to be filed after the
Closing Date, and provided that Acquiror has complied with its obligations
pursuant to Section 8.4 in a timely manner so as to permit Seller to perform the
following obligations, (i) Seller shall provide Acquiror with copies of such Tax
Returns and, in the case of those Tax Returns for taxable periods that end after
the Closing Date, a schedule showing the computation of Taxes allocated to each
of Seller and Acquiror (such allocation computed in the manner described in
Section 8.3(d) hereunder) at least 30 days prior to the due date for filing such
Tax Returns (taking into account any extensions), (ii) Acquiror shall have the
right to review and approve (which approval shall not be unreasonably withheld)
such Tax Returns, and in the case of those Tax Returns for taxable periods that
end after the Closing Date, the schedule setting forth the computation of the
allocation of Taxes, (iii) Seller shall pay Acquiror any amount owing from
Seller under Section 8.1(a)(i) and (ii) no later than two Business Days before
the filing of the underlying Tax Returns, and (iv) Acquiror shall timely file or
cause to be timely filed all such Tax Returns and shall pay or cause to be paid
all Taxes due with respect to such Tax Returns, provided, however, that nothing
contained in the foregoing shall in any manner terminate, limit or adversely
affect any right of Acquiror Indemnified Parties, Seller Indemnified Parties or
Snapple to receive indemnification pursuant to the terms of this Agreement. Any
disputes between Seller and Acquiror shall be resolved as provided in Section
8.9.
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(c) Acquiror shall reimburse Seller for all costs, expenses and fees
incurred in connection with Seller's preparation of Tax Returns required to be
filed after the Closing Date, including, without limitation, those costs
associated with the services of Seller's employees in connection therewith,
which shall be valued at $140 per hour. Seller shall invoice Acquiror at the end
of each month for such costs, expenses and fees incurred by Seller and Acquiror
shall pay Seller the amount shown as due on such invoice within 15 days of the
invoice date. In the event that Acquiror does not pay Seller within 15 days of
such invoice, interest at the rate of 10% per annum shall accrue on the unpaid
amount. The liability of Acquiror pursuant to this Section 8.3(c) shall not
exceed $50,000.
(d) For federal income tax purposes, the taxable year of Snapple
shall end as of the close of the Closing Date and, with respect to all other
Taxes, Seller and Acquiror will, unless prohibited by Applicable Law, close the
taxable period of the Snapple Companies as of the close of the Closing Date.
Neither Seller nor Acquiror shall take any position inconsistent with the
preceding sentence on any Tax Return. Notwithstanding anything contained herein
to the contrary, Seller and Acquiror shall report all transactions not in the
ordinary course of business occurring after the Closing but on the Closing Date
on Acquiror's federal unconsolidated and other consolidated or combined Tax
Returns. In any case where Applicable Law does not permit Snapple and its
Subsidiaries to close its taxable year on the Closing Date or in any case in
which a Tax is assessed with respect to a taxable period which includes the
Closing Date (but does not begin or end on that day), then Taxes, if any,
attributable to the taxable period of any of the Snapple Companies beginning
before and ending after the Closing Date shall be allocated (i) to Seller for
the period up to and including the Closing Date and (ii) to Acquiror for the
period subsequent to the Closing Date. Any allocation of income or deductions
required to determine any Taxes attributable to any period beginning before and
ending after the Closing Date shall be made by means of a closing of the books
and records of the Snapple Companies as of the close of the Closing Date,
provided that exemptions, allowances or deductions that are calculated on an
annual basis (including, but not limited to, depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period after the Closing Date in proportion to the number of days in each
such period.
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8.4 Cooperation with Respect to Tax Returns. Acquiror and Seller
agree to furnish or cause to be furnished to each other, and each at their own
expense, as promptly as practicable, such information (including access to books
and records) and assistance, including making employees available on a mutually
convenient basis to provide additional information and explanations of any
material provided, relating to the Snapple Companies or the Snapple Business as
is reasonably necessary for the filing of any Tax Return and elections in
respect thereof, for the preparation for any audit, and for the prosecution or
defense of any claim, suit or proceeding relating to any adjustment or proposed
adjustment with respect to Taxes. Acquiror or Snapple shall retain in its
possession, and shall provide Seller reasonable access to (including the right
to make copies of), such supporting books and records and any other materials
that Seller may specify with respect to Tax matters relating to any taxable
period ending on or prior to the Closing Date until the relevant statute of
limitations (or extensions thereof) has expired. After such time, Acquiror may
dispose of such material, provided that prior to such disposition Acquiror shall
give Seller a reasonable opportunity to take possession of such materials.
8.5 Tax Audits. (a) Seller shall have the sole right to represent
the interests of the Snapple Companies in any Tax audit or administrative or
court proceeding relating to taxable periods of the Snapple Companies which end
on or before the Closing Date and to employ counsel of its choice at its
expense. Acquiror agrees that it will cooperate fully with Seller and its
counsel in the defense against or compromise of any claim in any said
proceeding. Seller agrees that it will not settle any such proceeding in a
manner that has a Material Adverse Effect on Acquiror for any taxable period
that ends after the Closing Date. Seller agrees that it will keep Acquiror fully
informed as to the status and resolution of any such proceeding.
(b) If any taxing authority asserts a claim, makes an assessment or
otherwise disputes or affects the Tax reporting position of the Snapple
Companies for taxable periods ending on or prior to the Closing Date, Acquiror
shall, promptly upon receipt by Acquiror or any of the Snapple Companies of
notice thereof, inform Seller thereof.
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(c) Seller and Acquiror jointly shall represent the interests of the
Snapple Companies in any Tax audit or administrative or court proceeding
relating to any taxable period of the Snapple Companies which includes (but does
not begin or end on) the Closing Date. All costs, fees and expenses paid to
third parties in the course of such proceeding shall be borne by Seller and
Acquiror in the same ratio as the ratio in which, pursuant to the terms of this
Agreement, Seller and Acquiror would share the responsibility for payment of the
Taxes asserted by the taxing authority in such claim or assessment if such claim
or assessment were sustained in its entirety.
(d) Acquiror shall have the sole right to represent the interests of
the Snapple Companies in any Tax audit or administrative or court proceeding
relating to taxable periods of the Snapple Companies which begins after the
Closing Date and to employ counsel of its choice at its expense. Acquiror agrees
that it will not settle any such proceeding in a manner which has a Material
Adverse Effect on Seller for any taxable period that ends on, ends prior to or
which includes the Closing Date.
(e) Seller shall not take any position on any Tax Return, Tax refund
claim or in any Tax audit or administrative or court proceeding that is
inconsistent with the representation contained in Section 3.9(h) of this
Agreement, unless otherwise required by applicable Tax laws, rules or
regulations.
8.6 Refund Claims. Seller shall not file any amended Tax Return or
file or apply for any Tax refund with respect to any Snapple Company without the
consent of Acquiror, which consent shall not be unreasonably withheld, it being
understood and agreed that the foregoing shall not apply to the utilization of
any loss arising on the sale of the Shares. Except as otherwise provided in
Section 8.7, to the extent any determination of Tax liability of the Snapple
Companies results in any refund of Taxes paid with respect to (i) any period
which ends on or before the Closing Date or (ii) any period which includes the
Closing Date but does not begin or end on that day, any such refund shall belong
to Seller, provided that any Tax refund described in clause (i) or (ii) of this
Section 8.6 that is attributable to a carryback with respect to state or local
income Taxes arising after the Closing Date shall belong to Acquiror to the
extent that Acquiror is not permitted under the applicable state or local law to
elect to carry forward the
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relevant tax attribute and provided further that in the case of any Tax refund
described in clause (ii) of this Section 8.6 the portion of such Tax refund
which shall belong to Seller shall be that portion that is attributable to the
portion of that period which ends on the Closing Date (determined on the basis
of an interim closing of the books as of the Closing Date), Acquiror shall
promptly pay any such refund that belongs to Seller, and the interest actually
received thereon, to Seller upon receipt thereof by Acquiror. Any payments made
under this Section 8.6 shall be net of any Taxes payable with respect to such
refund, credit or interest thereon (taking into account any actual reduction in
Tax liability realized upon the payment pursuant to this Section 8.6).
8.7 Transfer Taxes. Acquiror shall be liable for and shall pay (and
shall indemnify and hold harmless Seller against) all sales, use, stamp,
documentary, filing, recording, transfer or similar fees or taxes or
governmental charges as levied by any taxing authority or governmental agency in
connection with the transfer of the Shares (other than taxes measured by or with
respect to income imposed on Seller). Acquiror hereby agrees to file all
necessary documents (including, but not limited to, all Tax Returns) with
respect to all such amounts in a timely manner.
8.8 Other Tax Matters. (a) The indemnification provided for in
this Article VIII shall be the sole and exclusive remedy for any claim in
respect of Taxes and the provisions of Article VII (other than Sections 7.5 and
7.6) shall not apply to such claims.
(b) Any claim for indemnity under this Article VIII may be made at
any time prior to 60 days after the expiration of the applicable Tax statute of
limitations with respect to the relevant taxable period (including all periods
of extension, whether automatic or permissive).
8.9 Disputes. If the parties disagree as to the amount of any
payment to be made under, or any other matter arising out of this Article VIII,
the parties shall attempt in good faith to resolve such dispute, and any agreed
upon amount shall be paid to the appropriate party. If such dispute is not
resolved within 15 days, the parties shall, in accordance with the procedures
set forth in Section 2.6(b) for selecting a CPA Firm, select an internationally
recognized firm of independent public accountants to resolve the dispute (the
"Independent Accounting Firm"). If and to
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the extent that the dispute presents legal issues, the Independent Accounting
Firm shall have the authority to consult an Independent Law Firm. The fees of
the Independent Accounting Firm and the Independent Law Firm shall be borne
equally by Seller and Acquiror, and the decision of such Independent Accounting
Firm and Independent Law Firm shall be final and binding on all parties.
Following the decision of the Independent Accounting Firm and/or the Independent
Law Firm, the parties shall each take or cause to be taken any action that is
necessary or appropriate to implement such decision of the Independent
Accounting Firm and the Independent Law Firm.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by agreement of Acquiror and Seller;
(b) by either Acquiror, on the one hand, or Seller, on the other
hand, by giving written notice of such termination to the other, if the Closing
shall not have occurred on or prior to June 30, 1997; provided, however, that
the terminating party is not in breach of its obligations under this Agreement;
or
(c) by Seller if, as a result of action or inaction by Acquiror, the
Closing shall not have occurred on or prior to the later of (i) the date that is
two Business Days following the date on which all of the conditions to Closing
set forth in Sections 6.1 and 6.2 are satisfied or waived or (ii) 60 days after
the date of this Agreement.
9.2 Effect of Termination. In the event of termination by Seller or
Acquiror pursuant to Section 9.1, written notice thereof shall promptly be given
to the other party and, except as otherwise provided herein, the transactions
contemplated by this Agreement shall be terminated and become void and have no
effect, without further action by the other party, other than the provisions of
the last sentence of Section 5.2 and Article X. Nothing in this Section 9.2
shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement.
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9.3 Termination Fee. In the event the Closing does not occur on or
before the earlier of the dates set forth in Section 9.1(b) or 9.1(c) for any
reason other than (i) Seller's failure to satisfy the closing conditions set
forth in Section 6.2, or (ii) the non-occurrence of any closing condition set
forth in Section 6.1, then Acquiror agrees to pay Seller either of the following
amounts, immediately upon Seller's demand and election, which election shall be
made in Seller's sole discretion within fourteen (14) days following the earlier
of the dates set forth in Section 9.1(b) or 9.1(c), as applicable: (x) the sum
of $10,000,000 as a termination fee, in which case the parties agree that
payment of such fee shall not relieve Acquiror from liability for its breach
hereunder or be construed as limiting Seller's rights in any manner, except that
such $10,000,000 shall be credited against any damages which may be awarded to
Seller or (y) the sum of $20,000,000 as liquidated damages, which the parties
agree shall be in lieu of any other damages to which Seller might be entitled
hereunder and shall relieve Acquiror from any liability for its breach
hereunder. Any amounts payable to Seller pursuant to this Section 9.3 shall be
applied against the Deposit and the remainder of the Deposit shall be returned
to Acquiror pursuant to the terms of the Escrow Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Extension; Waiver. The parties hereto, by action taken or
authorized by their respective boards of directors, may, to the extent legally
allowed: (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto; and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
10.2 Amendment. This Agreement may be amended, modified or
supplemented only by written agreement of
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Acquiror and Seller at any time prior to the Closing Date with respect to any of
the terms contained herein.
10.3 Expenses. Each of the parties hereto shall pay the fees and
expenses of its respective counsel, accountants and other experts and shall pay
all other costs and expenses incurred by it in connection with the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Except as otherwise specifically provided
herein, Seller shall pay any fees and expenses incurred prior to Closing of any
counsel, accountants and other experts of any of the Snapple Companies and shall
pay all other costs and expenses incurred by any of the Snapple Companies
incurred prior to Closing in connection with the negotiation and preparation of
this Agreement.
10.4 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to choice of law principles, including all matters of construction,
validity and performance.
10.5 Notices. Notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if signed by the respective persons giving them (in the case of any
corporation the signature shall be by an officer thereof) and delivered by hand
or by telecopy or on the date of receipt indicated on the return receipt if
mailed (registered or certified, return receipt requested, properly addressed
and postage prepaid):
If to Seller, to:
The Quaker Oats Company
000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
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with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Block, Esq.
Facsimile: (000) 000-0000
and,
If to Acquiror, to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Such names and addresses may be changed by notice given in accordance with this
Section 10.5.
10.6 Entire Agreement. This Agreement, together with all schedules,
exhibits, annexes, certificates, instruments and agreements delivered pursuant
hereto and the Confidentiality Agreement contain the entire understanding of the
parties hereto and thereto with respect to the subject matter contained herein
and therein, and supersede and cancel all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party hereto with
respect to the transactions contemplated by this Agreement other than those set
forth herein or made hereunder.
10.7 Disclosure Schedule. The Disclosure Schedule is
incorporated into this Agreement by reference and made a part hereof.
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10.8 Headings; References. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. All
references herein to "Articles", "Sections" or "Exhibits" shall be deemed to be
references to Articles or Sections hereof or Exhibits hereto unless otherwise
indicated.
10.9 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original, but all of
which shall constitute one and the same original.
10.10 Parties in Interest; Assignment. Neither this Agreement nor
any of the rights, interest or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties;
provided, however, that Acquiror may, in its sole discretion, assign any or all
of its rights, interests and obligations to an Affiliate in which event Acquiror
shall guarantee unconditionally and irrevocably the obligations assigned to such
Affiliate in a guarantee agreement in the form attached hereto as Exhibit I.
Subject to the preceding sentence this Agreement shall inure to the benefit of
and be binding upon Seller and Acquiror and shall inure to the sole benefit of
Seller and Acquiror and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
other Person any rights or remedies under or by reason of this Agreement.
10.11 Severability; Enforcement. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad to permit
enforcement of such restriction to its fullest extent, each party agrees that a
court of competent jurisdiction may enforce such restriction to the maximum
extent permitted by law, and each party hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
10.12 Consent to Jurisdiction. Each party hereto hereby irrevocably
and unconditionally (i) submits, for itself and its property, to the exclusive
jurisdiction of any Federal Court sitting in New York County of the State of New
York in any suit, action or proceeding arising out of or relating to this
Agreement or for recognition or enforcement
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of any judgment rendered in any such suit, action or proceeding, (ii) waives any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding in any such court, including any claim that any such
suit, action or proceeding has been brought in an inconvenient forum and (iii)
waives all rights to a trial by jury in any such suit, action or proceeding. Any
and all service of process and any other notice and any such action or
proceeding shall be effective against any party if given personally or by
registered or certified mail, return receipt requested, or by any other means of
mail that requires a signed receipt, postage prepaid, mailed to such party as
provided herein. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
THE QUAKER OATS COMPANY
By: Xxxxxx X. XxXxxxxx
-----------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Senior Vice President
TRIARC COMPANIES, INC.
By: Xxxxxx Xxxxx Xxxxx X. May
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Chairman and Chief Executive Officer
and Xxxxx X. May
President and Chief Operating Officer
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EXECUTION COPY
LIST OF OMITTED EXHIBITS
Exhibit A -- Transition Services Agreement
Exhibit B -- Patent License Agreement
Exhibit C -- Shared Technology License Agreement
Exhibit D -- Xxxxxx Agreement
Exhibit E -- Power Packaging Agreement
Exhibit F -- Assignment and Assumption Agreement
Exhibit G -- Opinion of Seller's Counsel
Exhibit H -- Opinion of Acquiror's Counsel
Exhibit I -- Guaranty Agreement
Disclosure Schedules
The Registrant hereby agrees to furnish supplementally a copy of any omitted
exhibit or the Disclosure Schedules to the Securities and Exchange Commission
upon its request.
