TRANSACTION AGREEMENT among THE PROCTER & GAMBLE COMPANY, THE FOLGERS COFFEE COMPANY, THE J.M. SMUCKER COMPANY and MOON MERGER SUB, INC. dated as of June 4, 2008
Exhibit 2.1
among
THE PROCTER & XXXXXX COMPANY,
THE FOLGERS COFFEE COMPANY,
THE X.X. XXXXXXX COMPANY
and
MOON MERGER SUB, INC.
dated as of
June 4, 2008
TABLE OF CONTENTS
Page | ||||||||
I. | THE MERGER; INITIAL ISSUANCE OF FOLGERS STOCK; AMENDMENT AND RESTATEMENT OF RMT PARTNER ARTICLES |
2 | ||||||
1.01 | The Merger | 2 | ||||||
1.02 | Initial Issuance of Folgers Stock | 3 | ||||||
1.03 | Amendment of RMT Partner Articles | 4 | ||||||
II. | CONVERSION OF SHARES AND RELATED MATTERS | 4 | ||||||
2.01 | Conversion Of Capital Stock in the Merger | 4 | ||||||
2.02 | Exchange Of Certificates | 5 | ||||||
2.03 | Exchange Procedures | 5 | ||||||
2.04 | No Further Ownership Rights in Folgers Common Stock | 5 | ||||||
2.05 | No Fractional Shares | 6 | ||||||
2.06 | Distributions with Respect to Unexchanged Shares | 6 | ||||||
2.07 | Withholding Rights | 7 | ||||||
2.08 | No Liability | 7 | ||||||
2.09 | Appraisal Rights | 7 | ||||||
III. | REPRESENTATIONS AND WARRANTIES OF PARENT | 7 | ||||||
3.01 | Due Organization, Good Standing And Corporate Power | 8 | ||||||
3.02 | Authorization Of Agreement | 8 | ||||||
3.03 | Consents And Approvals; No Violations | 8 | ||||||
3.04 | Information To Be Supplied | 9 | ||||||
3.05 | Capital Structure | 9 | ||||||
3.06 | Intellectual Property | 10 | ||||||
3.07 | Litigation | 10 | ||||||
3.08 | Compliance With Laws | 10 | ||||||
3.09 | Contracts | 11 | ||||||
3.10 | Employees and Employee Benefits | 11 | ||||||
3.11 | Financial Statements; Absence of Changes | 12 | ||||||
3.12 | Title to Properties; Security Interests | 13 | ||||||
3.13 | Sufficiency | 13 | ||||||
3.14 | Diligence; Knowledge | 14 | ||||||
3.15 | Taxes | 14 | ||||||
3.16 | Broker’s or Finder’s Fee | 14 |
TABLE OF CONTENTS
Continued
Continued
Page | ||||||||
3.17 | No Other Representations or Warranties | 14 | ||||||
IV. | REPRESENTATIONS AND WARRANTIES OF RMT PARTNER | 15 | ||||||
4.01 | Due Organization, Good Standing And Corporate Power | 15 | ||||||
4.02 | Authorization Of Agreement | 16 | ||||||
4.03 | Capitalization | 16 | ||||||
4.04 | Consents And Approvals; No Violations | 17 | ||||||
4.05 | RMT Partner SEC Filings; Financial Statements; Absence of Changes | 18 | ||||||
4.06 | Information To Be Supplied | 18 | ||||||
4.07 | Litigation | 19 | ||||||
4.08 | Voting Requirements; Approval; Board Approval | 19 | ||||||
4.09 | Compliance With Laws | 19 | ||||||
4.10 | Contracts | 19 | ||||||
4.11 | Employees And Employee Benefits | 20 | ||||||
4.12 | RMT Partner Rights Agreement | 21 | ||||||
4.13 | Title to Properties; Security Interests | 21 | ||||||
4.14 | Broker’s Or Finder’s Fee | 21 | ||||||
4.15 | Taxes | 21 | ||||||
4.16 | Intellectual Property | 22 | ||||||
4.17 | Fairness Opinion | 22 | ||||||
4.18 | Diligence; Knowledge | 22 | ||||||
4.19 | No Other Representations or Warranties | 22 | ||||||
V. | COVENANTS | 23 | ||||||
5.01 | Conduct Of Coffee Business Pending The Effective Time | 23 | ||||||
5.02 | Conduct Of RMT Partner Pending The Effective Time | 25 | ||||||
5.03 | Efforts To Close; Antitrust Clearance | 26 | ||||||
5.04 | Confidentiality | 27 | ||||||
5.05 | Cooperation In Tax Matters | 29 | ||||||
5.06 | Access | 29 | ||||||
5.07 | Public Announcements | 29 |
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TABLE OF CONTENTS
Continued
Continued
Page | ||||||||
5.08 | Preparation of SEC Filings | 30 | ||||||
5.09 | RMT Partner Shareholder Meeting | 31 | ||||||
5.10 | No Solicitation | 31 | ||||||
5.11 | Notification Of Certain Matters | 34 | ||||||
5.12 | NYSE Listing | 34 | ||||||
5.13 | Affiliates | 34 | ||||||
5.14 | Indemnification | 34 | ||||||
5.15 | Employee Matters | 35 | ||||||
5.16 | Voting Agreement | 38 | ||||||
5.17 | Required Amendments | 38 | ||||||
5.18 | TSA/IP Updates | 38 | ||||||
VI. | CONDITIONS TO THE MERGER | 38 | ||||||
6.01 | Conditions To The Merger | 38 | ||||||
6.02 | Conditions To The Obligation Of RMT Partner | 39 | ||||||
6.03 | Conditions To The Obligation Of Parent | 40 | ||||||
VII. | TERMINATION AND ABANDONMENT | 41 | ||||||
7.01 | Basis For Termination | 41 | ||||||
7.02 | Notice of Termination, Return of Documents, Continuing Confidentiality | |||||||
Obligation | 42 | |||||||
7.03 | Effect of Termination | 43 | ||||||
VIII. | MISCELLANEOUS | 44 | ||||||
8.01 | Nonsurvival Of Representations, Warranties And Agreements | 44 | ||||||
8.02 | Expenses | 44 | ||||||
8.03 | Entire Agreement | 45 | ||||||
8.04 | Governing Law | 45 | ||||||
8.05 | Notices | 45 | ||||||
8.06 | Amendments and Waivers | 46 | ||||||
8.07 | No Third-Party Beneficiaries | 47 | ||||||
8.08 | Assignability | 47 | ||||||
8.09 | Construction | 47 |
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TABLE OF CONTENTS
Continued
Continued
Page | ||||||||
8.10 | Severability | 48 | ||||||
8.11 | Counterparts | 48 | ||||||
8.12 | Specific Performance | 48 | ||||||
8.13 | Disclosure Letters | 48 | ||||||
IX. | DEFINITIONS | 49 |
EXHIBITS
Exhibit A:
|
Amended and Restated Articles of Incorporation of RMT Partner | |
Exhibit B:
|
Separation Agreement | |
Exhibit C:
|
Voting Agreement | |
Exhibit D:
|
Press Release |
PARENT DISCLOSURE LETTER
Section 1.02(b)(i)
|
RMT Partner Common Stock — Fully Diluted Basis | |
Section 3.01
|
Due Organization, Good Standing and Corporate Power | |
Section 3.03
|
Non-Contravention | |
Section 3.05
|
Capital Structure | |
Section 3.06
|
Intellectual Property | |
Section 3.07
|
Litigation | |
Section 3.08
|
Compliance with Applicable Laws | |
Section 3.10
|
Coffee Business Compensation And Benefit Plans | |
Section 3.11
|
Financial Statements; Absence of Change | |
Section 3.12
|
Title to Properties; Security Interests | |
Section 3.13
|
Sufficiency | |
Section 3.15
|
Taxes | |
Section 3.16
|
Broker’s or Finder’s Fees | |
Section 5.01
|
Conduct of Business | |
Section 5.06
|
Access to Data | |
Section 5.15
|
Employee Matters | |
Section 5.18
|
TSA Services |
RMT PARTNER DISCLOSURE LETTER
Section 4.03
|
Capitalization | |
Section 4.07
|
Litigation | |
Section 4.15
|
Intellectual Property | |
Section 5.02
|
Conduct of Business |
-iv-
This Transaction Agreement (this “Agreement”), dated as of June 4, 2008, is among The
Procter & Xxxxxx Company, an Ohio corporation (“Parent”), The Folgers Coffee Company, a
Delaware corporation and presently a wholly owned Subsidiary of Parent (“Folgers”), The
X.X. Xxxxxxx Company, an Ohio corporation (“RMT Partner”), and Moon Merger Sub, Inc., a
Delaware corporation and a direct wholly owned Subsidiary of RMT Partner (“Merger Sub”).
RECITALS
1. Parent directly and indirectly through its wholly owned Subsidiaries is engaged in the
Coffee Business;
2. Parent has determined that it would be appropriate and desirable to separate the Coffee
Business from Parent;
3. Prior to the Effective Time on the Closing Date (or as otherwise contemplated by Section
2.5 of the Separation Agreement) Parent will:
A. Pursuant to the Separation Agreement, effect the Folgers Transfer and Recapitalization;
B. Pursuant to the Separation Agreement and after the completion of the Folgers Transfer and
Recapitalization, effect the Distribution;
4. The Boards of Directors of Parent, Folgers, RMT Partner and Merger Sub have each approved
and declared advisable the Merger of Merger Sub with and into Folgers immediately following the
Distribution, on the terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL;
5. In the event that not all of the shares of Folgers Common Stock that are issued to Parent
in the Folgers Stock Issuance are subscribed for in the Exchange Offer (if Parent determines to
effect the Distribution through an Exchange Offer), Parent will distribute the balance of such
shares of Folgers Common Stock on a pro rata basis to its shareholders immediately following the
consummation of the Exchange Offer through the Clean-Up Spin Off as provided in the Separation
Agreement;
6. For federal income tax purposes, it is intended that (i) the Distribution should be
tax-free to Parent and to the Parent shareholders pursuant to Section 361 and Section 355 of the
Code, respectively, and (ii) the Merger will qualify as a tax-free reorganization within the
meaning of Section 368 of the Code, and the parties intend that the execution of the Separation
Agreement and this Agreement constitutes a plan of reorganization within the meaning of Section 368
of the Code; and
7. Simultaneously with the execution of this Agreement, and as an inducement to Parent to
enter into this Agreement, certain shareholders of RMT Partner have entered into the Voting
Agreement.
Accordingly, the Parties agree as follows:
I. THE MERGER; INITIAL ISSUANCE OF FOLGERS STOCK; AMENDMENT AND
RESTATEMENT OF RMT PARTNER ARTICLES
RESTATEMENT OF RMT PARTNER ARTICLES
1.01 The Merger. (a) On the terms and subject to the conditions of this Agreement,
Merger Sub will be merged (the “Merger”) with and into Folgers in accordance with the
provisions of the DGCL. Immediately following the Merger, Folgers will continue as the surviving
corporation (the “Surviving Corporation”) and will be a wholly owned Subsidiary of RMT
Partner, and the separate corporate existence of Merger Sub will cease.
(b) On the terms and subject to the conditions set forth in this Agreement, the consummation
of the Distribution and the Merger (the “Closing”) will take place at Xxxxx Day, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., local time on the third Business Day
following satisfaction or waiver of the conditions set forth in Article VI hereof (other
than those conditions, including the Distribution, that by their nature or pursuant to the terms of
this Agreement are to be satisfied at the Closing, but subject to the satisfaction or, where
permitted, the waiver of those conditions), or at such other date, time or place as Parent and RMT
Partner may agree. The date on which the Closing occurs is referred to as the “Closing
Date.”
(c) The Merger will be consummated by the filing of a certificate of merger (the
“Certificate Of Merger”) with the Secretary of State of the State of Delaware, in such form
as required by, and executed in accordance with, the relevant provisions of the DGCL (the date and
time of the filing of the Certificate of Merger with the Secretary of State of the State of
Delaware, or such later time as is specified in the Certificate of Merger and as is agreed to by
Parent and RMT Partner, the “Effective Time”).
(d) The Merger will have the effects set forth in this Agreement and the applicable provisions
of the DGCL. Without limiting the generality of the foregoing and subject thereto, at the
Effective Time, all the property, rights, privileges, immunities, powers and franchises of Folgers
and Merger Sub will vest in Folgers as the Surviving Corporation and all debts, liabilities and
duties of Folgers (including all of the obligations under the Folgers Credit Facility) and Merger
Sub will become the debts, liabilities and duties of Folgers as the Surviving Corporation.
(e) The text of the certificate of incorporation of the Surviving Corporation in effect at the
Effective Time shall, by virtue of the Merger, be amended and restated so as to be identical to the
certificate of incorporation of Merger Sub as in effect immediately prior to the Effective Time
(except that the name of the corporation set forth in the certificate of incorporation of the
Surviving Corporation will continue to be “The Folgers Coffee Company”), until thereafter changed
or amended as provided therein or by applicable Law. The bylaws of Merger Sub, as in effect
immediately prior
to the Effective Time, will be the bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable Law.
2
(f) The initial directors of the Surviving Corporation at the Effective Time will be the
directors of Merger Sub. The initial officers of the Surviving Corporation at the Effective Time
will be the officers of Folgers at the Effective Time (after taking into account the resignations
contemplated by Section 2.2(a)(vi) of the Separation Agreement). Each of such initial
officers and directors of the Surviving Corporation will hold office from the Effective Time until
their respective successors are duly elected or appointed and qualified in the manner provided by
the certificate of incorporation and bylaws of the Surviving Corporation or as otherwise provided
by Law.
1.02 Initial Issuance of Folgers Stock. (a) As contemplated by Section
1.1(a)(i) of the Separation Agreement and subject to adjustment as provided in Section 1.02(c),
in partial consideration for the transfer of Assets contemplated by Section 1.2 of the
Separation Agreement, Folgers will issue and deliver to Parent a number of shares of Folgers Common
Stock equal to (i) (A) 1.1524 (the “Exchange Ratio”), multiplied by (B) the number of
shares of RMT Partner Common Stock on a Fully Diluted Basis; less (iii) the number of
shares of Folgers common stock outstanding immediately prior to the issuance of Folgers Common
Stock pursuant to this Section 1.02.
(b) For purposes of this Agreement:
(i) “Fully Diluted Basis” shall mean the Parties’ best estimate, made in good
faith, of (i) the number of shares of RMT Partner Common Stock that are outstanding as of
the Closing Date, plus (ii) (a) the number of restricted shares of RMT Partner Common Stock
and deferred stock units outstanding as of the Closing Date (assuming, for purposes of this
calculation, that all of the Permitted Equity Awards will be outstanding as of the Closing
Date) and (b) the number of shares of RMT Partner Common Stock issuable upon exercise of any
options or rights of any nature, whatsoever, whether contingent, vested or unvested, or
otherwise, both (a) and (b) to be based upon the treasury stock method (in accordance with
the rules and interpretations of the Financial Accounting Standards Board, subject to the
following sentence, and consistent with Section 1.02(b)(i) of the Parent Disclosure
Letter (which details the calculation as of the date of this Agreement)), in each case other
than the shares of RMT Partner Common Stock issued or to be issued in the Merger. The
parties’ binding estimate of the number of shares of RMT Partner Common Stock on a Fully
Diluted Basis shall be made on the Estimation Date using, for the purposes of the treasury
stock method calculations, $50.85 for the price of RMT Partner Common Stock for all options
and rights included in the calculation.
(ii) “Estimation Date” means the soonest reasonably practicable date prior to
the date on which the Exchange Offer is commenced (or prior to the last Trading Day that
ends at least 20 Trading Days prior to the date the Parties
expect the Distribution Date to occur, if Parent elects to effect the Distribution as a
One-Step Spin-Off), or such other date as may be reasonably agreed by the parties hereto.
3
(c) If the condition to the obligation of Parent to effect the Folgers Transfer and the
Distribution set forth in Section 7.1(b) of the Separation Agreement has not been satisfied
and all of the conditions set forth in Section 7.1(a) of the Separation Agreement have been
satisfied or waived, Parent may elect to waive the condition set forth in Section 7.1(b) of
the Separation Agreement, in which case the number of shares of Folgers Common Stock issuable to
Parent pursuant to Section 1.02(a) shall be increased by an amount equal to (a) $350
million less the principal amount of indebtedness, if any, that is financable and received by
Folgers pursuant to the Folgers Credit Facility (such difference, the “Shortfall Amount”),
divided by (b) the Reference Price.
1.03 Amendment of RMT Partner Articles. RMT Partner may present to its shareholders
for approval at the RMT Partner Shareholder Meeting a proposal (the “Amendment Proposal”)
to amend and restate, effective as of the Effective Time, RMT Partner’s articles of incorporation
to read in the form attached hereto as Exhibit A and, to the extent approved by the
requisite vote of the shareholders of RMT Partner, such articles of incorporation will be the
articles of incorporation of RMT Partner from and after the Effective Time until thereafter changed
or amended as provided therein or by applicable Law.
II. CONVERSION OF SHARES AND RELATED MATTERS
2.01 Conversion Of Capital Stock in the Merger. At the Effective Time, by virtue of
the Merger and without any action on the part of Folgers, RMT Partner or the holders of the
following securities:
(a) Each share of Merger Sub Common Stock will be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Subject to Section 2.05, each issued share of Folgers Common Stock will be
converted into the right to receive one fully paid and nonassessable share of RMT Partner Common
Stock (together with the associated RMT Partner Right (as defined in Section 4.03(a)) under
the RMT Partner Rights Agreement (as defined in Section 4.03(a)). The shares of RMT
Partner Common Stock (including associated RMT Partner Rights) to be issued upon the conversion of
shares of Folgers Common Stock pursuant to this Section 2.01(a) and cash in lieu of
fractional shares of as contemplated by Section 2.05 are referred to collectively as
“Merger Consideration.” As of the Effective Time, all such shares of Folgers Common Stock
will no longer be outstanding and will automatically be canceled and retired and will cease to
exist, and any holder of a certificate representing any such shares of Folgers Common Stock will
cease to have any rights with respect thereto, except the right to receive Merger
Consideration upon surrender of such certificate, without interest. The issuance of RMT Partner
Common Stock (including associated RMT Partner Rights) in connection with the Merger is referred to
as the “RMT Partner Stock Issuance.”
(c) Each share of Folgers Common Stock owned by RMT Partner or any direct or indirect wholly
owned Subsidiary of RMT Partner (other than, in each case,
4
trust accounts, managed accounts,
custodial accounts and the like that are beneficially owned by third parties) immediately prior to
the Effective Time will be cancelled and extinguished without any conversion thereof and no payment
will be made with respect thereto.
2.02 Exchange Of Certificates. (a) Pursuant to Section 3.2(f) of the
Separation Agreement, the Exchange Agent will hold, for the account of the relevant Parent
shareholders, the global certificate(s) representing all of the outstanding shares of Folgers
Common Stock distributed in the Distribution. Such shares of Folgers Common Stock will be
converted into shares of RMT Partner Common Stock in accordance with the terms of this Article
II.
(b) Prior to the Closing, Parent will appoint a bank or trust company reasonably acceptable to
RMT Partner as exchange agent (the “Exchange Agent”). Prior to or at the Effective Time,
or as reasonably requested by Parent, RMT Partner will deposit with the Exchange Agent, for the
benefit of the holders of shares of Folgers Common Stock, for exchange in accordance with this
Article II through the Exchange Agent, evidence in book entry form representing the shares
of RMT Partner Common Stock issuable pursuant to this Article II in exchange for
outstanding shares of Folgers Common Stock (such shares of RMT Partner Common Stock, together with
any dividends or distributions with respect thereto, being hereinafter referred to as the
“Exchange Fund”). For the purposes of such deposit, RMT Partner will assume that there will
not be any fractional shares of RMT Partner Common Stock. RMT Partner will make available to the
Exchange Agent, for addition to the Exchange Fund, from time to time as needed or as reasonably
requested by Parent, cash sufficient to pay cash in lieu of fractional shares in accordance with
Section 2.05. The Exchange Agent will, pursuant to irrevocable instructions, deliver the
RMT Partner Common Stock to be issued pursuant to this Article II out of the Exchange Fund.
The Exchange Fund will not be used for any other purpose.
2.03 Exchange Procedures. As soon as reasonably practicable after the Effective Time
of the Merger, and to the extent not previously distributed in connection with the Distribution,
the Exchange Agent will mail to any holder of record of outstanding shares of Folgers Common Stock
whose shares were converted into the right to receive the Merger Consideration pursuant to
Section 2.01 (a) a letter of transmittal and (b) instructions for use in effecting the
exchange of any shares of Folgers Common Stock for Merger Consideration. Upon delivery to the
Exchange Agent of the letter of transmittal, duly executed, and such other documents as may
reasonably be required
by the Exchange Agent, the holder of such Folgers Common Stock will be entitled to receive in
exchange therefor the Merger Consideration (together with cash in lieu of fractional shares) that
such holder has the right to receive pursuant to the provisions of this Article II, and the
respective Folgers Common Stock will forthwith be canceled. Until exchanged as contemplated by
this Section 2.03, any Folgers Common Stock will be deemed at any time after the Effective
Time to represent only the right to receive upon such exchange Merger Consideration as contemplated
by this Section 2.03. No interest will be paid or accrue on any cash payable upon exchange
of any Folgers Common Stock.
5
2.04 No Further Ownership Rights in Folgers Common Stock. The Merger Consideration
issued (and paid) in accordance with the terms of this Article II upon conversion of any
shares of Folgers Common Stock will be deemed to have been issued (and paid) in full satisfaction
of all rights pertaining to such shares of Folgers Common Stock, and after the Effective Time there
will be no further registration of transfers on the stock transfer books of the Surviving
Corporation of shares of Folgers Common Stock that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, any certificates formerly representing shares of
Folgers Common Stock are presented to the Surviving Company or the Exchange Agent for any reason,
they will be canceled and exchanged as provided in this Article II.
2.05 No Fractional Shares. (a) No certificates or scrip representing fractional
shares of RMT Partner Common Stock will be issued upon the conversion of Folgers Common Stock
pursuant to Section 2.01, and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a holder of RMT Partner Common Stock. For purposes of this
Section 2.05, all fractional shares to which a single record holder would be entitled will
be aggregated, and calculations will be rounded to three decimal places.
(b) Fractional shares of RMT Partner Common Stock that would otherwise be allocable to any
former holders of Folgers Common Stock in the Merger will be aggregated, and no holder of Folgers
Common Stock will receive cash equal to or greater than the value of one full share of RMT Partner
Common Stock. The Exchange Agent will cause the whole shares obtained thereby to be sold, in the
open market or otherwise as reasonably directed by Parent, and in no case later than twenty
business days after the Effective Time. The Exchange Agent will make available the net proceeds
thereof, after deducting any required withholding Taxes and brokerage charges, commissions and
transfer Taxes, on a pro rata basis, without interest, as soon as practicable to the holders of
Folgers Common Stock entitled to receive such cash. Payment of cash in lieu of fractional shares
of RMT Partner Common Stock will be made solely for the purpose of avoiding the expense and
inconvenience to RMT Partner of issuing fractional shares of RMT Partner Common Stock and will not
represent separately bargained-for consideration.
2.06 Distributions with Respect to Unexchanged Shares. No dividends or other
distributions with respect to RMT Partner Common Stock with a record date after the Effective Time
will be paid to the holder of any Folgers Common Stock with respect to the shares of RMT Partner
Common Stock issuable upon exchange thereof, and no cash payment in lieu of fractional shares will
be paid to any such holder pursuant to Section 2.05, until, in each case, the exchange of
such Folgers Common Stock in accordance with this Article II. Subject to applicable Law,
following the exchange of any such Folgers Common Stock, there will be paid to the holder of the
certificate representing whole shares of RMT Partner Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash payable in lieu of a
fractional share of RMT Partner Common Stock to which such holder is entitled pursuant to
Section 2.05 and the amount of dividends or other distributions with a record date after
the Effective Time theretofore paid with respect to such whole shares
6
of RMT Partner Common Stock
and (ii) at the appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to such surrender and a payment date subsequent to
such exchange payable with respect to such whole shares of RMT Partner Common Stock.
2.07 Withholding Rights. RMT Partner, the Surviving Corporation or the Exchange
Agent, as the case may be, will be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement such amounts as may be required to be deducted and withheld with
respect to the making of such payment under the Code or any provision of state, local or foreign
Tax Law. Any withheld amounts will be treated for all purposes of this Agreement as having been
paid to the Persons otherwise entitled thereto.
2.08 No Liability. None of the parties hereto or the Exchange Agent will be liable to
any Person in respect of any shares of RMT Partner Common Stock (or dividends or distributions with
respect thereto) or cash from the Exchange Fund delivered to a public official pursuant to any
abandoned property, escheat or similar Law.
2.09 Appraisal Rights. Holders of RMT Partner Common Stock that are issued and
outstanding immediately prior to the Effective Time and that are held by a holder who has not voted
those shares in favor of the adoption of this Agreement, who shall have delivered a written demand
for appraisal of those shares in accordance with the Ohio Corporation Law and who, as of the
Effective Time, will not have effectively withdrawn or lost this right to appraisal (the
“Dissenting Shares”) will be entitled to those rights (but only those rights) as are
granted by Section 1701.85 of the Ohio Corporation Law. Each holder of Dissenting Shares who
becomes entitled to payment for those Dissenting Shares pursuant to Section 1701.85 of the Ohio
Corporation Law will receive payment from the Surviving Corporation in accordance with the Ohio
Corporation Law; provided, however, that (i) if any holder of Dissenting Shares shall have failed
to establish the holder’s entitlement to appraisal rights as provided in Section 1701.85 of the
Ohio Corporation Law, (ii) if any holder of Dissenting Shares shall have effectively
withdrawn the holder’s demand for appraisal of the holder’s shares or lost the holder’s right
to appraisal and payment for the holder’s shares under Section 1701.85 of the Ohio Corporation Law
or (iii) if neither any holder of Dissenting Shares nor the Surviving Corporation shall have filed
a petition demanding a determination of the value of all Dissenting Shares within the time provided
in Section 1701.85 of the Ohio Corporation Law, the holder will forfeit the right to appraisal of
those Dissenting Shares and each Dissenting Share will be exchanged pursuant to Section
2.01 of this Agreement.
III. REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to RMT Partner that, except as (i) set forth in the
applicable section (or another section to the extent provided in Section 8.13) of the
Parent Disclosure Letter or (ii) to the extent disclosed in, and reasonably apparent from, any
report, schedule, form or other document filed with, or furnished to, the Commission by Parent or
Folgers and publicly available prior to the date of this
7
Agreement (other than any forward-looking
disclosures set forth in any risk factor section, any disclosures in any section relating to
forward-looking statements and any other similar disclosures included therein to the extent they
are primarily cautionary in nature):
3.01 Due Organization, Good Standing And Corporate Power. Each of Parent, Folgers,
and the Folgers Entities is a corporation duly organized, validly existing and in good standing
under the Laws of its jurisdiction of incorporation. Parent and its Subsidiaries have all
requisite corporate power and authority to own, lease and operate their properties that will be
contributed to Folgers or the Folgers Entities pursuant to the Separation Agreement and to carry on
the Coffee Business as now being conducted. Parent and each of its Subsidiaries is duly qualified
or licensed to do business and is in good standing in each jurisdiction in which the property
owned, leased or operated by the Coffee Business that will be contributed to Folgers or the Folgers
Entities pursuant to the Separation Agreement or the nature of the Coffee Business conducted by it
makes such qualification necessary, except in such jurisdictions where the failure to be so
qualified or licensed and in good standing has not had or would not reasonably be expected to have,
individually or in the aggregate, a Coffee Business MAE.
3.02 Authorization Of Agreement. The execution, delivery and performance of this
Agreement and the Other RMT Agreements by each of Parent and Folgers, as applicable, and the
consummation by each of them of the Transactions (including the Merger), have been duly authorized
and approved by their respective boards of directors (and this Agreement has been adopted by Parent
as the sole stockholder of Folgers) and no other corporate or shareholder action on the part of
Parent or Folgers is necessary to authorize the execution, delivery and performance of this
Agreement and the Other RMT Agreements or the consummation of the Transactions. This Agreement,
the Separation Agreement and the Voting Agreement have been, and the Other RMT Agreements, when
executed, will be, duly executed and delivered by each of Parent and Folgers, as applicable, and,
to the extent it is a party thereto, each is (or when
executed will be) a valid and binding obligation of each of Parent and Folgers enforceable
against each of Parent and Folgers, as applicable, in accordance with their terms, except to the
extent that its enforceability may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar Law affecting the enforcement of creditors’ rights generally and by general
equitable principles (such exception, the “Enforceability Exception”).
3.03 Consents And Approvals; No Violations. Assuming (a) the filings required under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as amended (the “HSR Act”), are
made and the waiting periods thereunder (if applicable) have been terminated or expired, (b) the
applicable requirements of the Securities Act and the Exchange Act are met, (c) the requirements
under any applicable state securities or blue sky Laws are met, (d) the requirements of the NYSE in
respect of the listing of the shares of RMT Partner Common Stock to be issued hereunder are met,
and (e) the filing of the Certificate of Merger and other appropriate merger documents, if any, as
required by the DGCL, are made, the execution and delivery of this Agreement and the Other RMT
Agreements by Parent and Folgers, as applicable, and the consummation
8
by Parent and Folgers of the
Transactions do not and will not: (i) violate or conflict with any provision of their respective
articles of incorporation or code of regulations (or the comparable governing documents), (ii)
violate or conflict with any Law or Order of any Governmental Authority applicable to Parent or any
of its Subsidiaries or by which any of their respective properties or assets that will be
contributed to Folgers pursuant to the Separation Agreement may be bound; (iii) require any filing
with, consent or approval of, or the giving of any notice to, any Governmental Authority (other
than in connection with the Conveyance of Permits utilized in connection with the operation of the
Coffee Business that are unrelated to the manufacturing of the types of products of the Coffee
Business as such products are currently being manufactured); or (iv) result in a violation or
breach of, conflict with, constitute (with or without due notice or lapse of time or both) a
default under, or give rise to any right of termination, cancellation or acceleration, or result in
the creation of any Security Interest upon any of the properties or assets of Parent or its
Subsidiaries that will be contributed to Folgers pursuant to the Separation Agreement or give rise
to any obligation, right of termination, cancellation, acceleration or increase of any obligation
or a loss of a material benefit under, any of the terms, conditions or provisions of any Contract
that would be required to be filed as a “material contract” (as such term is defined in item
601(b)(10) of Regulation S-K of the Commission) in the Folgers Form 10/S-4 if such Folgers Form
10/S-4 was to be filed on the date of this Agreement (or, for purposes of the closing condition in
Section 6.02(c), as of the Closing Date) (an “Folgers Material Contract”),
excluding in the case of clauses (ii) through (iv) above, (x) conflicts, violations, breaches,
defaults, rights of payment and reimbursement, terminations, modifications, accelerations and
creations and impositions of Security Interests which would not reasonably be expected to have,
individually or in the aggregate, a Coffee Business MAE and (y) any Security Interests created in
connection with the Folgers Credit Facility.
3.04 Information To Be Supplied. The information supplied or to be supplied by Parent
(for itself or its Subsidiaries) for inclusion in the RMT Filings to be filed with the Commission
will not, on the date of its filing or, in the case of the RMT Partner Form S-4 or the Folgers Form
10/S-4, at the time it becomes effective under the Securities Act or Exchange Act, as applicable,
or on the dates the Proxy Statement is mailed to the RMT Partner Shareholders and at the time of
the RMT Partner Shareholder Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading.
3.05 Capital Structure. On the date of this Agreement, the authorized capital stock
of Folgers consisted solely of 1,000 shares of Folgers Common Stock, of which 100 shares of Folgers
Common Stock were outstanding. On the date of this Agreement and immediately prior to the
Distribution, all the outstanding shares of Folgers Common Stock are and will be owned directly by
Parent free and clear of any Security Interest other than Permitted Encumbrances. Immediately
following the Distribution, (i) there will be outstanding a number of shares of Folgers Common
Stock determined in accordance with this Agreement, (ii) no shares of Folgers Common Stock will be
held in Folgers’ treasury, and (iii) no bonds, debentures, notes or other Indebtedness of Folgers
or any of its Subsidiaries having the right to vote (or convertible into, or exchangeable
9
for,
securities having the right to vote) on any matters on which holders of Folgers Common Stock or the
holders of capital stock of any of Folgers’ Subsidiaries may vote will be outstanding. All
outstanding shares of Folgers Common Stock are, and all such shares that may be issued prior to the
Effective Time as contemplated by this Agreement will be when issued, duly authorized, validly
issued, fully paid and nonassessable. As of the date of this Agreement, there are no outstanding
or authorized options, warrants, rights, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise,
relating to Folgers Common Stock or any capital stock equivalent or other nominal interest in
Folgers or any of its Subsidiaries which relate to Folgers (collectively, “Folgers Equity
Interests”) pursuant to which Folgers or any of its Subsidiaries is or may become obligated to
issue shares of its capital stock or other equity interests or any securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any Folgers Equity Interests. There
are no outstanding obligations of Folgers to repurchase, redeem or otherwise acquire any
outstanding securities of Folgers Equity Interests.
3.06 Intellectual Property. Except as has not had and would not reasonably be
expected to have, individually or in the aggregate, a Coffee Business MAE, (a) to Parent’s
Knowledge, Parent’s and its Subsidiaries’ use of Trademarks and Patents in the Coffee Business as
currently conducted by Parent and its Subsidiaries does not infringe any Trademark or Patent, as
the case may be, of any third party and (b) during the past two years no third party has made any
written claim or demand or instituted any Action against Parent or any of its Subsidiaries, or to
the Knowledge of Parent threatened the same, and neither Parent nor any of its Subsidiaries has
received any
written notice, that (i) challenges the rights of Parent and its Subsidiaries in respect of
any of the Patents or Trademarks utilized in the Coffee Business or (ii) asserts that the operation
of the Coffee Business is or was infringing, misappropriating or otherwise violating the
intellectual property rights of any third party. None of the Patents or Trademarks utilized in the
Coffee Business is subject to any outstanding order, ruling, decree, judgment or stipulation by or
with any Governmental Authority.
3.07 Litigation. There are no Actions pending against Parent or any of its
Subsidiaries or, to the Knowledge of Parent, threatened against Parent or any of its Subsidiaries
(or any of their respective properties, rights or franchises), at Law or in equity, or before or by
any Governmental Authority or any arbitrator or arbitration tribunal, that have had or would
reasonably be expected to have, individually or in the aggregate, a Coffee Business MAE. Neither
Parent nor any of its Subsidiaries are subject to any Order that has had or would reasonably be
expected to have, individually or in the aggregate, a Coffee Business MAE.
3.08 Compliance With Laws. Except as has not had or would reasonably be expected to
have, individually or in the aggregate, a Coffee Business MAE, the Coffee Business is being
conducted in compliance with applicable Laws. None of the Permits necessary to manufacture the
products of the Coffee Business as such products are currently being manufactured will lapse,
terminate, expire or otherwise be impaired as a result of the consummation of the Transactions,
except as would not reasonably be
10
expected to have, individually or in the aggregate, a Coffee
Business MAE. Neither Parent nor any Subsidiary of Parent has received any written notice from any
Person within the past three years alleging non-compliance with any such Permit except for such
incidents of alleged non-compliance that have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Coffee Business MAE.
3.09 Contracts. Each Folgers Material Contract is in full force and effect and is
enforceable by the Parent or one of its Subsidiaries in accordance with its terms. Each of Parent
and its Subsidiaries has performed all obligations required to be performed by it to date under the
Folgers Material Contracts to which it is a party and is not (with or without the lapse of time or
the giving of notice, or both) in breach or default thereunder. Parent has made available to RMT
Partner a true and correct copy of each Folgers Material Contract not otherwise filed with the
Commission and publicly available.
3.10 Employees and Employee Benefits. (a) Parent has provided RMT Partner a summary,
in reasonable detail, of (i) all bonus, vacation, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted
stock and stock option, incentive, severance or change-in-control plans or other similar
agreements, (ii) all employment agreements, (iii) all medical, dental, disability, health and life
insurance plans, and (iv) all other employee benefit and fringe benefit plans, in the case of each
of (i) through (iv) maintained or contributed to by Parent or any of its Subsidiaries for the
benefit of any of
the employees of the Coffee Business or their beneficiaries and pursuant to which RMT Partner
or any of its Subsidiaries may have any liability for any employees of the Coffee Business
subsequent to the Effective Time (collectively, the “Compensation And Benefit Plans”).
Section 3.10(a)(i) of the Parent Disclosure Letter sets forth (i) a list of Compensation
And Benefit Plans or any other compensation or benefit plans, agreements or arrangements that were
contemplated to be sponsored or maintained by Folgers and (ii) Compensation And Benefit Plans or
any other compensation or benefit plans, agreements or arrangements which will be sponsored or
maintained by Folgers or pursuant to which RMT Partner or any of its Subsidiaries may have any
liabilities subsequent to the Effective Time as set forth on Section 3.10(a)(ii) of the
Parent Disclosure Letter (collectively, the “Coffee Business Compensation And Benefit
Plans”).
(b) Parent has provided RMT Partner access to true and correct copies of all Coffee Business
Compensation And Benefit Plans memorialized in writing as of the date hereof, including all
amendments thereto, and, with respect to each such Coffee Business Compensation And Benefit Plans,
as applicable, the trust documents, determination, opinion and notification letters issued by the
Internal Revenue Service, most recent annual valuation reports, summary plan descriptions, employee
booklets, most recent nondiscrimination tests, most recent annual reports (Form 5500), COBRA forms
and notices, correspondence or inquiries by the Internal Revenue Service, the Department of Labor
or the Pension Benefit Guaranty Corporation, written contracts, including administrative service
agreements, group annuity contracts and group insurance contracts.
11
(c) Except as has not had and would not reasonably be expected to have, individually or in the
aggregate, a Coffee Business MAE, each Coffee Business Compensation And Benefit Plan has been and
is being administered in accordance with the terms thereof and all applicable Law. Each Coffee
Business Compensation And Benefit Plan which is an “employee pension benefit plan” (as defined in
Section 3(2) of ERISA) (each such plan, a “Coffee Business Pension Plan”) and is intended
to be qualified under Section 401(a) of the Code is so qualified and has received a favorable
determination letter from the Internal Revenue Service, and to the Knowledge of Parent, there are
no circumstances which are reasonably likely to result in the revocation or denial of any such
favorable determination letter.
(d) Neither the execution or delivery of this Agreement nor the consummation of any of the
transactions contemplated by this Agreement will, either alone or in conjunction with any other
event (whether contingent or otherwise), solely with respect to Coffee Business Compensation And
Benefit Plans (i) result in any payment or benefit becoming due or payable, or required to be
provided, to any current or former director, officer or group of employees of any member of the
Folgers Group, (ii) increase the amount or value of any benefit or compensation otherwise payable
or required to be provided to any current or former director, officer or group of employees, or
result in the acceleration or the time of payment, vesting or funding of any such benefit or
compensation or (iii) result in any amount failing to be deductible by reasons
of Section 280G of the Code. No Coffee Business Compensation And Benefit Plan provides for a
“gross up” or similar payments in respect of any taxes that may become payable under Section 4999
of the Code.
(e) No Coffee Business Compensation And Benefit Plan provides for life, medical or dental
benefits to retired employees, other than as required under Section 4980B of the Code or other
applicable Law.
(f) Since January 1, 2007 through (and including) the date of this Agreement, (i) there has
not been any labor strike, work stoppage or lockout with respect to the Coffee Business, (ii)
neither Parent nor Folgers has received written notice of any unfair labor practice charges against
the Coffee Business that are pending before the National Labor Relations Board or any similar
state, local or foreign Governmental Authority, and (iii) neither Parent nor Folgers has received
written notice of any suits, actions or other proceedings in connection with the Coffee Business
that are pending before the Equal Employment Opportunity Commission or any similar state, local or
foreign Governmental Authority responsible for the prevention of unlawful employment practices,
including under applicable employment standards and human rights laws, except, in the case of each
of clauses (i), (ii) and (iii) above, for any such matters that have not had and would not
reasonably be expected to have, individually or in the aggregate, a Coffee Business MAE.
3.11 Financial Statements; Absence of Changes. (a) Attached as Section 3.11
of the Parent Disclosure Letter are copies of (i) the audited combined financial statements of
Folgers, including the combined balance sheets of Folgers as of June 30, 2007 and June 30, 2006,
and the combined statements of income, equity and cash
12
flows for the years ended June 30, 2007,
June 30, 2006 and June 30, 2005 (collectively, the “Audited Statements”), and (ii) the
unaudited combined balance sheet of Folgers for the nine months ended March 31, 2008 and the
related unaudited combined statements of income and cash flows for the nine-month period then ended
(collectively, the “Unaudited Statements,” and together with the Audited Statements, the
“Financial Statements”).
(b) The Financial Statements were derived from the books and records of the Parent and its
Subsidiaries and were prepared in accordance with GAAP, consistently applied, as at the dates and
for the periods presented (except, in the case of the Unaudited Statements, for the absence of
footnote disclosures and normal and recurring adjustments, which are not material, individually or
in the aggregate), and present fairly in all material respects the financial position and results
of operations of Folgers as at the dates and for the periods presented on the basis by which the
Financial Statements were prepared (subject, in the case of the Unaudited Statements, to normal and
recurring adjustments, which are not material, individually or in the aggregate).
(c) Except as required or expressly permitted by this Agreement, since March 31, 2008, there
has not occurred any event, occurrence or condition which has had or would be reasonably expected
to have, individually or in the aggregate, a Coffee Business MAE.
3.12 Title to Properties; Security Interests. Except as has not had, and would not be
reasonably likely to have, individually or in the aggregate, a Coffee Business MAE: Parent and its
Subsidiaries have good, valid and marketable title to, or valid leasehold interests in or valid
right to use, all Folgers Assets, in each case as such property is currently being used, subject to
no Security Interests, except for Permitted Encumbrances.
3.13 Sufficiency. The Folgers Assets include:
(a) the fixtures, machinery, equipment, furniture, office equipment, motor vehicles and other
transportation equipment, special and general tangible tools, prototypes and models and other
tangible personal property (other than computers and other electronic information or communications
Assets for which provision for access thereto is made in the Transition Services Agreement) that,
in the aggregate, are sufficient for the Folgers Group to continue after the Business Transfer Time
to manufacture the products of the Coffee Business in all material respects as such products are
currently being manufactured by the Coffee Business in substantially the same quantities and to
such specifications as currently manufactured by the Coffee Business in all material respects;
(b) assuming that any required Consents to the transfer of the Folgers Governmental Approvals
have been obtained, the Folgers Assets will include Permits that, in the aggregate, are sufficient
to manufacture the types of products of the Coffee Business in all material respects as such
products are currently being manufactured by the Coffee Business; and
13
(c) the Folgers Assets, together with the Intellectual Property licensed to Folgers pursuant
to the Intellectual Property Matters Agreement, include Intellectual Property sufficient to
manufacture the types of products of the Coffee Business in all material respects as such products
are currently being manufactured by the Coffee Business.
3.14 Diligence; Knowledge. Parent has been given an opportunity to conduct due
diligence and examine the assets and liabilities of RMT Partner, and has had an opportunity to ask
questions of and receive answers from Representatives of RMT Partner regarding the business and
properties, prospects and financial condition of RMT Partner, in each case to the full extent that
it has elected to do so prior to the execution of this Agreement. As of the date of this
Agreement, Parent has no Knowledge of any inaccuracy in the representations and warranties made by
RMT Partner herein and will not assert any event, occurrence or condition of which it has Knowledge
as of the date
hereof as the basis for any claim that RMT Partner has breached any of its representations or
warranties herein.
3.15 Taxes. Except as has not had, and would not reasonably be expected to have, a
Coffee Business MAE, (a) no Security Interests for Taxes exist and no outstanding claims for Taxes
have been asserted in writing with respect to the Coffee Business, the Folgers Assets or the
Folgers Liabilities, (b) Parent and its Subsidiaries have paid all Taxes required to be paid by
them with respect to the Coffee Business, the Folgers Assets and the Folgers Liabilities, (c)
neither Folgers nor any of its Subsidiaries has distributed stock of another Person or had its
stock distributed by another Person in a transaction (other than the Distribution) that was
intended to be governed in whole or in part by Section 355 of the Code in the two years prior to
the date of this Agreement, (d) neither Parent (with respect to the Folgers Assets and the Coffee
Business) nor Folgers has, to Parent’s Knowledge, “participated” in a “reportable transaction”
within the meaning of Treasury Regulation section 1.6011-4, other than a transaction exempted from
the reporting requirements of such Regulation, (e) neither Parent nor Folgers has taken or agreed
to take any action or knows of any fact, agreement, plan or other circumstance that has prevented
or would reasonably be expected to prevent the Intended Tax-Free Treatment, and (f) Parent has made
adequate provision for any Taxes payable by any member of the Folgers Group relating to the Coffee
Business that are not yet due and payable for all taxable periods on its most recent financial
statements to the extent required by GAAP or in the case of foreign entities in accordance with
generally applicable accounting principles in the relevant jurisdiction.
3.16 Broker’s or Finder’s Fee. Except as provided in Section 8.02, neither
Parent nor any of its Subsidiaries has any liability or obligation to pay any fees or commissions
to any broker, finder or other agent with respect to the transactions contemplated by this
Agreement for which Folgers, the Surviving Corporation or RMT Partner could become liable or
obligated.
3.17 No Other Representations or Warranties. Except for the representations and
warranties of Parent expressly set forth in this Agreement and the Other RMT Agreements, neither
the Parent nor any other Person makes
14
any other express or implied representation or warranty on
behalf of Parent or any of its Subsidiaries (including Folgers) with respect to Folgers, its
Subsidiaries, the Coffee Business or the transactions contemplated by this Agreement and the Other
RMT Agreements. The representations and warranties made in this Agreement and the Other RMT
Agreements with respect to Folgers, its Subsidiaries, the Coffee Business and the transactions
contemplated by this Agreement and the Other RMT Agreements are in lieu of all other
representations and warranties Parent and its Subsidiaries might have given RMT Partner, including
implied warranties of merchantability and implied warranties of fitness for a particular purpose.
RMT Partner acknowledges that all other warranties that Parent and its Subsidiaries or anyone
purporting to represent Parent and its Subsidiaries gave or might have given, or which might be
provided or implied by
applicable Law or commercial practice, with respect to Folgers, its Subsidiaries, the Coffee
Business, are hereby expressly excluded. RMT Partner acknowledges that, except as provided herein
and in the Other RMT Agreements, neither Parent nor any of its Subsidiaries nor any other Person
acting on their behalf will have or be subject to any Liability or indemnification obligation to
RMT Partner or any other Person acting on its behalf resulting from the distribution in written or
oral communication to RMT Partner, or use by RMT Partner of, any information, documents,
projections, forecasts or other material made available to RMT Partner, confidential information
memoranda or management interviews and presentations in expectation of the transactions
contemplated by this Agreement and the Other RMT Agreements.
IV. REPRESENTATIONS AND WARRANTIES OF RMT PARTNER
RMT Partner hereby represents and warrants to Parent that, except as (i) set forth in the
applicable section (or another section to the extent provided in Section 8.13) of the RMT
Partner Disclosure Letter or (ii) to the extent disclosed in, and reasonably apparent from, any
report, schedule, form or other document filed with, or furnished to, the Commission by RMT Partner
and publicly available prior to the date of this Agreement (other than any forward-looking
disclosures set forth in any risk factor section, any disclosures in any section relating to
forward-looking statements and any other similar disclosures included therein to the extent they
are primarily cautionary in nature):
4.01 Due Organization, Good Standing And Corporate Power. (a) RMT Partner and each
of its Subsidiaries is a corporation duly organized, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation (except as has not had, and would not reasonably
be expected to have, an RMT Partner MAE), and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now being conducted.
(b) RMT Partner and each of its Subsidiaries is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification necessary, except in such
jurisdictions where the failure to be so
15
qualified or licensed and in good standing has not had,
and would not reasonably be expected to have, individually or in the aggregate, an RMT Partner MAE.
4.02 Authorization Of Agreement. The execution, delivery and performance of this
Agreement and the Other RMT Agreements by RMT Partner and Merger Sub, and the consummation by RMT
Partner and Merger Sub of the Transactions, have been duly authorized and approved by their
respective board of directors (and this Agreement has been adopted by RMT Partner as the sole
stockholder of Merger Sub) and, except for the RMT Partner Shareholder Approval, no other corporate
or shareholder action on the part of RMT Partner or Merger Sub is necessary to authorize the
execution, delivery
and performance of this Agreement and the Other RMT Agreements or the consummation of the
Transactions. This Agreement, the Separation Agreement and the Voting Agreement have been, and the
Other RMT Agreements, when executed, will be, duly executed and delivered by RMT Partner and Merger
Sub and to the extent that it is a party thereto each is (or when executed will be) a valid and
binding obligation of RMT Partner and Merger Sub, as applicable, enforceable against RMT Partner
and Merger Sub, as applicable, in accordance with their terms, subject to the Enforceability
Exception.
4.03 Capitalization. (a) The authorized capital stock of RMT Partner consists of
150,000,000 shares of common stock, without par value (the “RMT Partner Common Stock”), and
6,000,000 shares of serial preferred stock, no par value (“RMT Partner Preferred Stock”),
of which 1,500,000 shares have been designated as “Series A Junior Participating Preferred Shares”
(hereinafter referred to as “RMT Partner Series A Preferred Stock”). As of the close of
business on the last full Business Day that precedes the date of this Agreement (the
“Measurement Date”), there were 54,587,991 shares of RMT Partner Common Stock issued and
outstanding (including shares of restricted RMT Partner Common Stock), 65,832 performance units
granted (which may convert into restricted RMT Partner Common Stock), and 1,143,235 shares were
reserved for issuance upon the exercise of outstanding options and deferred stock units (the
“RMT Partner Options”) for RMT Partner Common Stock and, between such date and the date
hereof, RMT Partner has not issued shares of RMT Partner Common Stock other than pursuant to the
exercise of such options to purchase shares of RMT Partner Common Stock. All issued and
outstanding shares of RMT Partner Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable. One right to purchase one-hundredth of a share of RMT Partner Series
A Preferred Stock (each, a “RMT Partner Right”), issued pursuant to the Amended and
Restated Rights Agreement dated as of August 28, 2000 between RMT Partner and Computershare
Investor Services, LLC, as amended on October 9, 2001 (the “RMT Partner Rights Agreement”),
is associated with and will be attached to each share of RMT Partner Common Stock issued as Merger
Consideration. As of the date of this Agreement, and except for shares of RMT Partner Common Stock
issuable as of the Measurement Date pursuant to the RMT Partner Rights Agreement and the RMT
Partner Options, there are no outstanding or authorized options, warrants, rights, subscriptions,
claims of any character, agreements, obligations, convertible or exchangeable securities, or other
commitments, contingent or otherwise, relating to RMT Partner Common Stock or any capital stock
equivalent (including shares of
16
restricted RMT Partner Common Stock ) or other nominal interest in
RMT Partner or any of its Subsidiaries which relate to RMT Partner (collectively, “RMT Partner
Equity Interests”) pursuant to which RMT Partner or any of its Subsidiaries is or may become
obligated to issue shares of its capital stock or other equity interests or any securities
convertible into, exchangeable for, or evidencing the right to subscribe for, any RMT Partner
Equity Interests. There are no outstanding obligations of RMT Partner to repurchase, redeem or
otherwise acquire any outstanding securities of RMT Partner Equity Interests.
(b) The authorized capital stock of Merger Sub consists of 3000 shares of common stock, par
value $0.01 per share (“Merger Sub Common Stock”). As of the date hereof, there were 100
shares of Merger Sub Common Stock issued and outstanding, all of which are owned by RMT Partner.
(c) As of the Closing Date, the fully diluted number of shares of RMT Partner Common Stock as
of the Closing Date, taking into account the number of shares of RMT Partner Common Stock that will
be outstanding, together with all shares of RMT Partner Common Stock that may be issued at any time
(before or after the Closing Date) pursuant to any outstanding options, rights or other RMT Partner
Equity Interests of any nature whatsoever, whether contingent, vested or unvested, or otherwise,
other than the shares of the RMT Partner Common Stock issued or to be issued in the Merger, will be
equal to the “number of shares of RMT Partner Common Stock on a Fully Diluted Basis” as utilized by
the Parties in connection with the calculations set forth in Section 1.02.
4.04 Consents And Approvals; No Violations. Assuming (a) the filings required under
the HSR Act are made and the waiting periods thereunder (if applicable) have been terminated or
expired, (b) the applicable requirements of the Securities Act and the Exchange Act are met, (c)
the requirements under any applicable state securities or blue sky Laws are met, (d) the
requirements of the NYSE in respect of the listing of the shares of RMT Partner Common Stock to be
issued hereunder are met, (e) the filing of the Certificate of Merger and other appropriate merger
documents, if any, as required by the DGCL, are made, and (f) the RMT Partner Shareholder Approval
is obtained, the execution and delivery of this Agreement and the Other RMT Agreements by RMT
Partner and Merger Sub, as applicable, and the consummation by RMT Partner and Merger Sub of the
Transactions do not and will not: (i) violate or conflict with any provision of their respective
articles of incorporation or code of regulations (or the comparable governing documents), (ii)
violate or conflict with any Law or Order of any Governmental Authority applicable to RMT Partner
or Merger Sub or by which any of their respective properties or assets may be bound; (iii) require
any filing with, or Permit, consent or approval of, or the giving of any notice to, any
Governmental Authority; or (iv) result in a violation or breach of, conflict with, constitute (with
or without due notice or lapse of time or both) a default under, or give rise to any right of
termination, cancellation or acceleration, or result in the creation of any Security Interest upon
any of the properties or assets of RMT Partner or its Subsidiaries or give rise to any obligation,
right of termination, cancellation, acceleration or increase of any obligation or a loss of a
material benefit under, any of the terms, conditions or provisions of any Contract that
17
would be
required to be filed as a “material contract” (as such term is defined in item 601(b)(10) of
Regulation S-K of the Commission) in an annual report on Form 10-K of RMT Partner if such Form 10-K
was to be filed on the date of this agreement (or, for purposes of the closing condition in
Section 6.03(c), as of the Closing Date) (an “RMT Partner Material Contract”),
excluding in the case of clauses (ii) through (iv) above, conflicts, violations, breaches,
defaults, rights of payment and reimbursement, terminations, modifications, accelerations and
creations and impositions of Security
Interests that would not reasonably be expected to have, individually or in the aggregate, an
RMT Partner MAE.
4.05 RMT Partner SEC Filings; Financial Statements; Absence of Changes. (a) RMT
Partner has timely filed all registration statements, prospectuses, forms, reports and documents
and related exhibits required to be filed by it under the Securities Act or the Exchange Act, as
the case may be, since April 30, 2006 (collectively, including all Commission filings filed after
the date of this Agreement and prior to the Closing, the “RMT Partner SEC Filings”). The
RMT Partner SEC Filings (i) were prepared or will after the date of this Agreement be prepared in
all material respects in accordance with the requirements of the Securities Act or the Exchange
Act, as the case may be, and (ii) did not at the time they were filed contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances under which they were
made, not misleading. No Subsidiary of RMT Partner is subject to the periodic reporting
requirements of the Exchange Act.
(b) Each of the consolidated financial statements of RMT Partner (including, in each case, any
notes thereto) contained in the RMT Partner SEC Filings was prepared in accordance with GAAP,
consistently applied (except as may be indicated in the notes thereto and except with respect to
unaudited statements as permitted by Form 10-Q under the Exchange Act and the absence of footnote
disclosures and normal and recurring adjustments, which are not material, individually or in the
aggregate), and each presented fairly in all material respects the consolidated financial position
and results of operations of RMT Partner and its consolidated Subsidiaries as of the respective
dates thereof and for the respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring adjustments, which are not
material, individually or in the aggregate). The books and records of RMT Partner and its
Subsidiaries have been and are being, maintained in accordance with applicable legal and accounting
requirements.
(c) Except as required or expressly permitted by this Agreement, since March 31, 2008, there
has not occurred any event, occurrence or condition which has had or would reasonably be expected
to have, individually or in the aggregate, an RMT Partner MAE.
4.06 Information To Be Supplied. The information supplied or to be supplied by RMT
Partner for inclusion in the RMT Filings to be filed with the Commission will not, on the date of
its filing or, in the case of the RMT Partner Form S-4 or the Folgers Form
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10/S-4, at the time it
becomes effective under the Securities Act or Exchange Act, as applicable, or on the dates the
Proxy Statement is mailed to the RMT Partner Shareholders and at the time of the RMT Partner
Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material
fact required to be
stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
4.07 Litigation. There are no Actions pending against RMT Partner or any of its
Subsidiaries or, to the Knowledge of RMT Partner, threatened against RMT Partner or any of its
Subsidiaries (or any of their respective properties, rights or franchises), at Law or in equity, or
before or by any Governmental Authority or any arbitrator or arbitration tribunal, that has had or
would reasonably be expected to have, individually or in the aggregate, an RMT Partner MAE.
Neither RMT Partner nor any of its Subsidiaries is subject to any Order that has had or would
reasonably be expected to have, individually or in the aggregate, an RMT Partner MAE.
4.08 Voting Requirements; Approval; Board Approval. (a) The affirmative vote of the
holders of at least two-thirds of votes entitled to be cast by the holders of the outstanding
shares of RMT Partner Common Stock to authorize the Transactions and approve the RMT Partner Stock
Issuance (“RMT Partner Shareholder Approval”) is the only vote of any class or series of
RMT Partner’s capital stock necessary to approve this Agreement, the Other RMT Agreements and the
Transactions.
(b) The board of directors of RMT Partner has, at a meeting duly called and held, by unanimous
vote, (i) approved this Agreement, the Other RMT Agreements, and the Transactions and (ii) resolved
to recommend that the RMT Partner Shareholders authorize the Transactions and approve the RMT
Partner Stock Issuance.
4.09 Compliance With Laws. Except as has not had and would not reasonably be expected
to have, individually or in the aggregate, an RMT Partner MAE, (a) RMT Partner and its Subsidiaries
are conducting their business in compliance with applicable Laws and (b) at the Closing, RMT
Partner and its Subsidiaries will collectively hold, to the extent legally required, all Permits
that are required for the operation of their business, and there will not have occurred any default
under any such Permit. None of such Permits will lapse, terminate, expire or otherwise be impaired
as a result of the consummation of the Transactions, except as would not reasonably be expected to
have, individually or in the aggregate, an RMT Partner MAE. Neither RMT Partner nor any Subsidiary
of RMT Partner has received any written notice from any Person within the past three years alleging
non-compliance with any Permit except for such incidents of alleged non-compliance that have not
had, and would not reasonably be expected to have, individually or in the aggregate, an RMT Partner
MAE.
4.10 Contracts. Each RMT Partner Material Contract is in full force and effect and is
enforceable by the RMT Partner or one of its Subsidiaries in accordance with its terms. Each of
RMT Partner and its Subsidiaries has performed all obligations required to be performed by it to
date under the RMT Partner Material Contracts to which it is a party and is not (with or without
the lapse of time or the giving of notice, or both) in
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breach or default thereunder. RMT Partner
has made available to Parent a true and
correct copy of each RMT Partner Material Contract not otherwise filed with the Commission and
publicly available.
4.11 Employees And Employee Benefits. (a) RMT Partner has provided Parent access to
(i) all bonus, vacation, deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted stock and stock option,
incentive, severance or change-in-control plans or other similar contracts, (ii) all employment
agreements, (iii) all medical, dental, disability, health and life insurance plans, and (iv) all
other employee benefit and fringe benefit plans, in the case of each of (i) through (iv) maintained
or contributed to by RMT Partner or any of its Subsidiaries for the benefit of any of their
employees or their beneficiaries, or pursuant to which RMT Partner or any of its Subsidiaries may
have any liability (collectively, the “RMT Partner Compensation And Benefit Plans”).
(b) RMT Partner has provided Parent access to true and correct copies of all RMT Partner
Compensation and Benefit Plans, including all amendments thereto, and, with respect to each of the
RMT Partner Compensation and Benefit Plans, as applicable, the trust documents, determination,
opinion and notification letters issued by the Internal Revenue Service, most recent annual
valuation reports, summary plan descriptions, employee booklets, most recent nondiscrimination
tests, most recent annual reports (Form 5500), COBRA forms and notices, correspondence or inquiries
by the Internal Revenue Service, the Department of Labor or the Pension Benefit Guaranty
Corporation, written contracts, including administrative service agreements, group annuity
contracts and group insurance contracts.
(c) Except as has not had, or would not reasonably be expected to have, individually or in the
aggregate, an RMT Partner MAE, each RMT Partner Compensation and Benefit Plan has been and is being
administered in accordance with the terms thereof and all applicable Law. Each RMT Partner
Compensation and Benefit Plan which is an “employee pension benefit plan” (as defined in Section
3(2) of ERISA) (each such plan, a “RMT Partner Pension Plan”) and is intended to be
qualified under Section 401(a) of the Code is so qualified and has received a favorable
determination letter from the Internal Revenue Service, and to the Knowledge of RMT Partner, there
are no circumstances which are reasonably likely to result in the revocation or denial of any such
favorable determination letter.
(d) Neither the execution or delivery of this Agreement nor the consummation of any of the
transactions contemplated by this Agreement will, either alone or in conjunction with any other
event (whether contingent or otherwise), solely with respect to RMT Partner Compensation and
Benefit Plans (i) result in any payment or benefit becoming due or payable, or required to be
provided, to any current or former director, officer or group of employees of RMT Partner or any of
its Subsidiaries, (ii) increase the amount or value of any benefit or compensation otherwise
payable or required to be provided to any current or former director, officer or group of
employees,
or result in the acceleration or the time of payment, vesting or funding of any such benefit
or compensation, or (iii) result in any amount failing to be deductible by reasons
20
of Section 280G of the Code. No RMT Partner Compensation and Benefit Plan provides for a
“gross up” or similar payments in respect of any taxes that may become payable under Section 4999
of the Code.
(e) No RMT Partner Compensation and Benefit Plan provides for life, medical or dental benefits
to retired employees, other than as required under Section 4980B of the Code or other applicable
law.
(f) Since January 1, 2007 through (and including) the date of this Agreement, (i) there has
not been any labor strike, work stoppage or lockout with respect to the business of RMT Partner and
its Subsidiaries, (ii) neither RMT Partner nor Merger Sub has received written notice of any unfair
labor practice charges against RMT Partner or any of its Subsidiaries that are pending before the
National Labor Relations Board or any similar state, local or foreign Governmental Authority, and
(iii) neither RMT Partner nor Merger Sub has received written notice of any suits, actions or other
proceedings in connection with the business of RMT Partner or any of its Subsidiaries that are
pending before the Equal Employment Opportunity Commission or any similar state, local or foreign
Governmental Authority responsible for the prevention of unlawful employment practices, including
under applicable employment standards and human rights laws, except, in the case of each of clauses
(i), (ii) and (iii) above, for any such matters that have not had and would not reasonably be
expected to have, individually or in the aggregate, an RMT Partner MAE.
4.12 RMT Partner Rights Agreement. None of the execution and delivery of this
Agreement, the Other RMT Agreements and the consummation of the Transactions, will cause (i) the
RMT Partner Rights to become exercisable under the RMT Partner Rights Agreement, (ii) Parent or any
of its Subsidiaries or, based on publicly available information, shareholders to be deemed an
“Acquiring Person” (as defined in the RMT Partner Rights Agreement), (iii) any “Triggering Event”
(as defined in the RMT Partner Rights Agreement), or (iv) the “Share Acquisition Date” or the
“Distribution Date” (each as defined in the RMT Partner Rights Agreement) to occur upon any such
event. RMT Partner has made available to Parent a true and complete copy of the RMT Partner Rights
Agreement, as amended to date.
4.13 Title to Properties; Security Interests. Except as has not had, and would not be
reasonably expected to have, individually or in the aggregate, an RMT Partner MAE: RMT Partner and
its Subsidiaries have good, valid and marketable title to, or valid leasehold interests in or a
valid right to use, all of the Assets utilized by RMT Partner in the conduct of its business, in
each case as such property is currently being used, subject to no Security Interests, except for
Permitted Encumbrances.
4.14 Broker’s Or Finder’s Fee. Neither RMT Partner nor any of its Subsidiaries has
any liability or obligation to pay any fees or commissions to any broker, finder or other agent
with respect to the transactions contemplated by this Agreement for which Parent or any of its
Subsidiaries could become liable or obligated.
4.15 Taxes. Except as has not had, and would not reasonably be expected to have, an
RMT Partner MAE, (a) none of the assets of RMT Partner or any of its
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Subsidiaries is subject to any Security Interest for Taxes and no outstanding claims for Taxes
have been asserted in writing with respect to RMT Partner or any of its Subsidiaries, (b) RMT
Partner and its Subsidiaries have paid all Taxes required to be paid by them, (c) RMT Partner and
its Subsidiaries have made adequate provision for any Taxes that are not yet due and payable for
all taxable periods on RMT Partner’s most recent financial statements to the extent required by
GAAP or in the case of foreign entities, in accordance with generally applicable accounting
principles in the relevant jurisdiction, (d) neither RMT Partner nor any of its Subsidiaries have
distributed stock of another Person or had its stock distributed by another Person in a transaction
that was intended to be governed in whole or in part by Section 355 of the Code in the two years
prior to the date of this Agreement, (e) neither RMT Partner nor any of its Subsidiaries have, to
RMT Partner’s Knowledge, “participated” in a “reportable transaction” within the meaning of
Treasury Regulation section 1.6011-4, other than a transaction exempted from the reporting
requirements of such Regulation, and (f) neither RMT Partner nor any of its Subsidiaries have taken
or agreed to take any action or know of any fact, agreement, plan or other circumstance that has
prevented or would reasonably be expected to prevent the Intended Tax-Free Treatment.
4.16 Intellectual Property. Except as has not had, or would not reasonably be
expected to have, individually or in the aggregate, an RMT Partner MAE, (a) to RMT Partner’s
Knowledge, its and its Subsidiaries’ use of Trademarks and Patents does not infringe any Trademark
or Patent, as the case may be, of any third party and (b) during the past two years no third party
has made any written claim or demand or instituted any Action against RMT Partner or any of its
Subsidiaries, or to the Knowledge of RMT Partner threatened the same, and neither RMT Partner nor
any of its Subsidiaries has received any written notice, that (i) challenges the rights of RMT
Partner and its Subsidiaries in respect of any of the Patents or Trademarks utilized by them or
(ii) asserts that RMT Partner or any of its Subsidiaries is or was infringing, misappropriating or
otherwise violating the intellectual property rights of any third party. None of the Patents or
Trademarks utilized by RMT Partner is subject to any outstanding order, ruling, decree, judgment or
stipulation by or with any Governmental Authority.
4.17 Fairness Opinion. RMT Partner has received the opinions of each of Xxxxxxx Xxxxx
& Co. and Banc of America Securities, Inc., dated as of June 2, 2008, to the effect that, as of
such date, the Exchange Ratio described in Section 1.02(a) is fair, from a financial point
of view, to RMT Partner.
4.18 Diligence; Knowledge. RMT Partner has been given an opportunity to conduct due
diligence and examine the assets and liabilities of the Coffee Business, and has had an opportunity
to ask questions of and receive answers from Representatives of Parent regarding the Coffee
Business, in each case to the full extent that it has elected to do so prior to the execution of
this Agreement. As of the date of this Agreement, RMT Partner has no Knowledge of any inaccuracy
in the representations and warranties made by Parent herein and will not assert any event,
occurrence or condition of which it has Knowledge as of the date hereof as the basis for any claim
that Parent has breached any of its representations or warranties herein.
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4.19 No Other Representations or Warranties. Except for the representations and
warranties of RMT Partner expressly set forth in this Agreement and the Other RMT Agreements,
neither the RMT Partner nor any other Person makes any other express or implied representation or
warranty on behalf of RMT Partner or any of its Subsidiaries with respect to the RMT Partner or the
transactions contemplated by this Agreement and the Other RMT Agreements. The representations and
warranties made in this Agreement and the Other RMT Agreements with respect to the RMT Partner and
the transactions contemplated by this Agreement and the Other RMT Agreements are in lieu of all
other representations and warranties RMT Partner and its Subsidiaries might have given Parent,
including implied warranties of merchantability and implied warranties of fitness for a particular
purpose. Parent acknowledges that all other warranties that RMT Partner and its Subsidiaries or
anyone purporting to represent RMT Partner and its Subsidiaries gave or might have given, or which
might be provided or implied by applicable Law or commercial practice, with respect to RMT Partner,
are hereby expressly excluded. Parent acknowledges that, except as provided herein or in the Other
RMT Agreements, neither RMT Partner nor any of its Subsidiaries nor any other Person acting on
their behalf will have or be subject to any Liability or indemnification obligation to Parent or
any other Person acting on its behalf resulting from the distribution in written or oral
communication to Parent, or use by Parent of, any information, documents, projections, forecasts or
other material made available to Parent, confidential information memoranda or management
interviews and presentations in expectation of the transactions contemplated by this Agreement and
the Other RMT Agreements.
V. COVENANTS
5.01 Conduct Of Coffee Business Pending The Effective Time.
(a) Except as contemplated by this Agreement or any Other RMT Agreement and except as set
forth in Section 5.01 of the Parent Disclosure Letter, between the date of this Agreement
and the Effective Time, Parent and each of its Subsidiaries will conduct the Coffee Business in all
material respects only according to the ordinary and usual course of business consistent in all
material respects with past practice. Notwithstanding the preceding sentence, between the date of
this Agreement and the Effective Time, Parent will take such actions as it determines in good faith
are commercially reasonable to respond to events resulting, in whole or in part, from the
announcement of this Agreement and to preserve the Coffee Business and existing employee, customer
and supplier relationships (including replacing any key employees of the Coffee Business who cease
to be employed with the Coffee Business). For purposes of the foregoing sentence, a determination
as to whether a particular employee is a “key” employee will be made by Parent in good faith, in
consultation with RMT Partner. Parent will be permitted to use a non-Business Employee (a
“Temporary Employee”) to replace such identified key employee for purposes of satisfying
its obligations under this Section 5.01. For the avoidance of doubt, a Temporary Employee
will not be deemed a Business Employee unless mutually agreed to by Parent and RMT Partner. Parent
will endeavor in good faith, and subject to compliance with applicable
23
Law, to review any actions taken pursuant to the preceding sentence with RMT Partner prior to
implementing them.
(b) Parent agrees that, between the date of this Agreement and the Effective Time, neither
Parent nor any of its Subsidiaries will take any action, cause any action to be taken, fail to take
any action or fail to cause any action to be taken, which action or failure to act could (i) cause
the Merger to fail to qualify as a reorganization under Section 368(a) of the Code or (ii) cause
(x) gain or loss to be recognized by the Parent shareholders in the Distribution or (y) gain or
loss to be recognized by Parent in the Distribution. For the avoidance of doubt, this Section
5.01(b) will not be deemed to require Parent to obtain a private letter ruling from the
Internal Revenue Service in respect of the tax treatment to be accorded to the Transactions.
(c) Without limiting the generality of Sections 5.01(a) and 5.01(b), and
except as otherwise provided in this Agreement, required by Law or set forth on Section
5.01 of the Parent Disclosure Letter, Parent will not, without the prior written consent of RMT
Partner (which consent in the case of clause (i), (ii) and (iv) below and in the case of clause (v)
insofar as it relates to clauses (i), (ii) and (iv), will not be unreasonably withheld or delayed),
nor will it permit any of its Subsidiaries to:
(i) sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or
authorize the sale, pledge, disposition, grant, transfer, lease, guarantee or encumbrance of
any Assets that are (or would otherwise be) Folgers Assets pursuant to the Separation
Agreement, other than (x) in the ordinary course of business and consistent in all material
respects with past practice or (y) not in the ordinary course of business consistent with
past practice but not in excess of $10,000,000 individually or in the aggregate;
(ii) (A) acquire (including by merger, consolidation, or acquisition of stock or
assets) any interest in any Person or any division thereof or any assets that would be
Folgers Assets, other than (x) in the ordinary course of business in a manner consistent in
all material respects with past practice or (y) not in the ordinary course of business
consistent with past practice but not in excess of $10,000,000 in the aggregate after the
date of this Agreement; or (B) other than Liabilities that would not be included in the
Folgers Liabilities, incur any indebtedness for borrowed money or issue any debt securities
or assume, guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any Person for borrowed money, except for (1) indebtedness for borrowed
money incurred in the ordinary course of business or in connection with transactions
otherwise permitted by this Agreement or any Other RMT Agreement, (2) indebtedness incurred
to refinance any existing indebtedness, or (3) other indebtedness for borrowed money under
existing credit facilities;
(iii) issue or authorize the issuance of any shares of Folgers Common Stock or any
Folgers Equity Interests, except as expressly provided in this Agreement and the Other RMT
Agreements;
24
(iv) in the case of each of the following to the extent it relates solely to the Coffee
Business, (A) make a material change in its accounting or Tax reporting principles, methods
or policies, except as required by applicable Law or a change in GAAP, (B) make, change or
revoke any material Tax election, settle or compromise any material Tax claim or liability,
or enter into any material Tax closing agreements, or (C) amend any Tax Return if any such
action would materially increase Folgers’ Tax obligations following the Effective Time; or
(v) agree, in writing or otherwise, to take any of the foregoing actions.
5.02 Conduct Of RMT Partner Pending The Effective Time. (a) Except as contemplated
by this Agreement or any Other RMT Agreement and except as set forth in Section 5.02 of the
RMT Partner Disclosure Letter, between the date of this Agreement and the Effective Time, RMT
Partner and each of its Subsidiaries will conduct their respective operations in all material
respects only according to the ordinary and usual course of business consistent in all material
respects with past practice.
(b) Between the date of this Agreement and the Effective Time, neither RMT Partner nor any of
its Subsidiaries will take any action, cause any action to be taken, fail to take any action or
fail to cause any action to be taken, which action or failure to act could (i) cause the Merger to
fail to qualify as a reorganization under Section 368(a) of the Code or (ii) cause (x) gain or loss
to be recognized by the Parent shareholders in the Distribution or (y) gain or loss to be
recognized by Parent in the Distribution. For the avoidance of doubt, this Section 5.02(b)
will not be deemed to require RMT Partner to obtain a private letter ruling from the Internal
Revenue Service in respect of the tax treatment to be accorded to the Transactions.
(c) Without limiting the generality of Sections 5.02(a) and 5.02(b), and
except as otherwise provided in this Agreement, required by Law or set forth on Section
5.02 of the RMT Partner Disclosure Letter, before the Effective Time, RMT Partner will not,
without the prior written consent of Parent (which consent will, in the case of clause (ii), (v)
and (vi) below and in the case of clause (vii) insofar as it relates to clauses (ii), (v) and (vi),
not be unreasonably withheld or delayed), nor will it permit any of its Subsidiaries to:
(i) amend or otherwise change its articles of incorporation or code of regulations,
except as expressly contemplated by this Agreement;
(ii) sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or
authorize the sale, pledge, disposition, grant, transfer, lease, guarantee or encumbrance of
any Assets, other than (x) in the ordinary course of business and consistent in all material
respects with past practice, or (y) not in the ordinary course of business consistent with
past practice but not in excess of $10,000,000 in the aggregate after the date of this
Agreement;
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(iii) declare, set aside, make or pay any dividends or other distribution, payable in
cash, stock, property or otherwise, with respect to any of its capital stock (other than (i)
regular quarterly cash dividends not in excess of $0.32 per share of RMT Partner Common
Stock declared and paid in the ordinary course and consistent with past practice; (ii) a
special dividend (the “Special Dividend”) payable prior to the Effective Time to the
holders of RMT Partner Common Stock in which the amount payable to such holders does not
exceed $5.00 per share (provided that the record date for such special dividend shall be
prior to the fifth trading day prior to the Estimation Date); and (iii) dividends payable by
a wholly owned Subsidiary of RMT Partner to RMT Partner or another wholly owned Subsidiary),
enter any agreement with respect to the voting of its capital stock (other than the Voting
Agreement), or purchase or otherwise acquire, directly or indirectly, any RMT Partner Equity
Interests;
(iv) reclassify, combine, split or subdivide, directly or indirectly, any of its
capital stock, or issue or authorize the issuance of any shares of RMT Partner Common Stock
or any other RMT Partner Equity Interests, except as expressly provided in this Agreement
and the Other RMT Agreements (other than in connection with (a) the exercise of currently
outstanding stock options and equity awards under existing RMT Partner Compensation and
Benefit Plans, and (b) the issuance of up to 225,000 shares of restricted stock in the
aggregate under existing RMT Partner Compensation and Benefit Plans (the “Permitted
Equity Awards”);
(v) (A) other than (x) in the ordinary course of business in a manner consistent in all
material respects with past practice, or (y) not in the ordinary course of business
consistent with past practice but not in excess of $10,000,000 in the aggregate after the
date of this Agreement, acquire (including by merger, consolidation, or acquisition of stock
or assets) any interest in any Person or any division thereof or any assets; or (B) incur
any indebtedness for borrowed money or issue any debt securities or assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the obligations of any
Person for borrowed money, except for (1) indebtedness for borrowed money incurred in the
ordinary course of business or in connection with transactions otherwise permitted by this
Agreement or any Other RMT Agreement, (2) indebtedness incurred to refinance any existing
indebtedness, or (3) other indebtedness for borrowed money under existing credit facilities;
(vi) (A) make a material change in its accounting or Tax reporting principles, methods
or policies except as required by applicable Law or a change in GAAP, (B) make, change or
revoke any material Tax election, settle or compromise any material Tax claim or liability
or enter into any material Tax closing agreements, or (C) amend any Tax Return if any such
action would materially increase the Tax obligations of RMT Partner or any of its
Subsidiaries following the Effective Time; or
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(vii) agree, in writing or otherwise, to take any of the foregoing actions.
5.03 Efforts To Close; Antitrust Clearance. (a) In addition to the actions
specifically provided for elsewhere in this Agreement or in any Other RMT Agreement, each of the
Parties hereto will cooperate with each other and use (and will cause their respective Subsidiaries
and Affiliates to use) commercially reasonable efforts, prior to, at and after the Closing Date, to
take, or to cause to be taken, all actions, and to do, or to cause to be done, all things
reasonably necessary on its part under applicable Law or Contractual obligations to consummate and
make effective the transactions contemplated by this Agreement and the Other RMT Agreements as
promptly as reasonably practicable; provided, however, that the level of efforts required to be
utilized in connection with the Folgers Transfer will be as set forth in the Separation Agreement.
(b) Parent and RMT Partner will comply fully with all applicable notification, reporting and
other requirements. Parent and RMT Partner, within ten Business Days after the date of this
Agreement, will file the required notifications with the appropriate Governmental Authorities
pursuant to and in compliance with the respective Antitrust Laws, including the HSR Act. Parent
and RMT Partner will as soon as practicable file any additional information reasonably requested by
any Governmental Authority.
(c) Parent and RMT Partner will each use its commercially reasonable efforts to obtain, as
soon as practicable, the Governmental Approvals that may be or become necessary for the performance
of its obligations under this Agreement, the Other RMT Agreements and the consummation of the
Transactions and will cooperate fully with each other in promptly seeking to obtain such
Governmental Approvals.
(d) In furtherance and not in limitation of the covenants of the parties contained in
Section 5.03(c), RMT Partner and Parent will offer to take (and if such offer is accepted,
commit to take) all necessary steps to avoid or eliminate impediments under any Antitrust Law that
may be asserted by any Governmental Authority with respect to the transactions contemplated hereby
and to avoid or prevent the entry of any Order sought by any Governmental Authority or private
Person under any Antitrust Law that would result in the failure of any condition to the obligations
of the Parties to consummate the Transactions to be satisfied, in each case to enable the Closing
to occur as expeditiously as possible. RMT Partner will propose, negotiate, cooperate with Parent,
and effect (or permit Parent to effect) prior to the Closing Date, by consent decree, hold separate
order or otherwise, the sale, divestiture or disposition of such assets or businesses of the Coffee
Business (or otherwise take any action that limits the freedom of action with respect to, or its
ability to retain, any of its businesses, product lines, or assets or those of the Coffee Business)
as may be required in order to avoid the entry of, or to effect the dissolution of, any Order
(whether temporary, preliminary or permanent), which would otherwise have the effect of preventing
or delaying the consummation of the transactions contemplated hereby.
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5.04 Confidentiality. (a) The parties acknowledge that in connection with the
Transactions, the parties have disclosed to each other technical and business information which the
parties consider proprietary and confidential. This information may include, by way of example and
without limitation, new products, commercial plans, financial projections, technical or
non-technical data, financial data, know-how, formulae, processes, patterns, strategies,
compilations, programs, devices, methods, techniques, drawings, designs, sketches, photographs,
plans, specifications, samples, reports, pricing information, lists of actual or potential
customers and suppliers, studies, findings, inventions, ideas, and trade secrets. Such information
is herein referred to as the “Information.” The parties agree that, after the Effective
Time, Information that constitutes an Folgers Asset will be Information of the Surviving
Corporation and Parent will be deemed to be the Receiving Party of such Information for purposes of
Section 5.04(b).
(b) Each Party receiving Information (the “Receiving Party”) recognizes and
acknowledges (i) that Information of the other Party may be commercially valuable proprietary
products of such Party, the design and development of which may have involved the expenditure of
substantial amounts of money and the use of skilled development experts over a long period of time
and which afford such Party a commercial advantage over its competitors; (ii) that the loss of this
competitive advantage due to unauthorized disclosure or use of Information of such Party may cause
great injury and harm to such Party; and (iii) that the restrictions imposed upon the parties under
this Section 5.04 are necessary to protect the secrecy of Information and to prevent the
occurrence of such injury and harm. The parties agree that:
(i) disclosure of Information will be received and held in confidence by the Receiving
Party and that such Receiving Party will not, without the prior written consent of the Party
from whom such Information was obtained (the “Disclosing Party”), disclose, divulge
or permit any unauthorized person to obtain any Information disclosed by the Disclosing
Party (whether or not such Information is in written or tangible form);
(ii) the Receiving Party will take such steps as may be reasonably necessary to prevent
the disclosure of Information to others; and
(iii) the Receiving Party will use the Information only in connection with the
Transactions unless otherwise authorized in writing by the Disclosing Party.
(c) The commitments set forth above will not extend to any portion of Information:
(i) which is already known to the Receiving Party, or is information generally
available to the public;
(ii) which, hereafter, through no act on the part of the Receiving Party becomes
generally available to the public;
28
(iii) which corresponds in substance to a disclosure furnished to the Receiving Party
by any third party having a bona fide right to do so and not having any confidential
obligation, direct or indirect, to the Disclosing Party with respect to the same; or
(iv) which is required to be disclosed by Law, provided that the Receiving Party
provides reasonable prior written notice of such required disclosure to the Disclosing
Party. The commitments set forth in this Section 5.04 will promptly and
automatically terminate in their entirety upon the lapse of a period of three (3) years from
the Closing Date.
5.05 Cooperation In Tax Matters. Subject to the Tax Matters Agreement, Parent and RMT
Partner will make available to each other during normal business hours, but without unreasonably
disrupting their respective businesses, all personnel and records of the Coffee Business reasonably
necessary in connection with the filing of any Tax Return, amended return or claim for refund,
determining a liability for Taxes or a right to refund for Taxes or conducting an audit or other
proceeding in respect of Taxes.
5.06 Access. From the date hereof to the Effective Time, each of Parent and RMT
Partner will allow all designated officers, attorneys, accountants and other representatives of
Parent or RMT Partner, as the case may be, access at reasonable times upon reasonable notice and in
a manner as will not adversely impact the conduct of the business of either Party or the Coffee
Business to the personnel, records files, correspondence, audits and properties, as well as to all
information relating to commitments, contracts, titles and financial position, or otherwise
pertaining to the business and affairs of the Coffee Business and RMT Partner and its Subsidiaries,
as the case may be, including inspection of such properties and the items described in Section
5.06 of the Parent Disclosure Letter; provided that no investigation pursuant to this
Section 5.06 will affect any representation or warranty given by any Party hereunder, and
provided further that notwithstanding the provision of information or investigation by any Party,
no Party will be deemed to make any representation or warranty except as expressly set forth in
this Agreement. Notwithstanding the foregoing, (i) no Party will be required to provide any
information which it reasonably believes it may not provide to the other Party by reason of
applicable Law, which such Party reasonably believes constitutes information protected by
attorney/client privilege or which it is required to keep confidential by reason of Contracts with
third parties and (ii) no Party will be required to provide access to any of its properties of such
access results in damage to such property or if such access is for the purpose of performing any
onsite procedure or investigation (including any onsite environmental investigation or study),
without that Party’s written consent, which the Party may grant or deny in its sole discretion.
The parties hereto will make reasonable and appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply. Each of Parent and RMT
Partner agrees that it will not, and will cause its respective representatives not to, use any
information obtained pursuant to this Section 5.06 for any purpose unrelated to the
consummation of the Transactions. All
29
information provided by a Party to the other Party hereunder will be subject to the
confidentiality provisions of Section 5.04.
5.07 Public Announcements. Parent and RMT Partner agree that the press release
announcing the execution and delivery of this Agreement and the Transactions shall be in the form
attached as Exhibit D hereto. The Parties further agree that the RMT Partner investor
presentation concerning the Transactions will be in substantially the form previously agreed to by
Parent and RMT Partner and that both the initial press release and the investor presentation
concerning the Transactions will be filed by RMT Partner as Exhibits to a Form 8-K filing promptly
after the execution of this Agreement. From the date hereof through the Effective Time, neither
Parent nor RMT Partner will issue any press releases with respect to this Agreement, the Other RMT
Agreements and the Transactions (or the portion thereof relating to this Agreement, the Other RMT
Agreements and the Transactions) without the prior approval of the other Party, such approval not
to be unreasonably withheld, except as may be required by Law or by obligations pursuant to any
listing agreement with any national securities exchange.
5.08 Preparation of SEC Filings. As soon as practicable following the date of this
Agreement, to the extent such filings are required by applicable Law, Parent and RMT Partner will
jointly prepare, and (i) RMT Partner will file with the Commission the a Registration Statement on
Form S-4 (the “RMT Partner Form S-4”) to register the shares of RMT Partner Common Stock to
be issued in the Merger, and a proxy statement (the “Proxy Statement”) relating to the RMT
Partner Shareholder Approval and the Amendment Proposal (which Proxy Statement will be included in
the RMT Partner Form S-4 and which Proxy Statement will present the RMT Partner Shareholder
Approval and Amendment Proposal as two separate proposals on the agenda for the RMT Partner
Shareholder Meeting), (ii) Folgers will file with the Commission the Folgers a registration
statement on Form 10 and/or a registration statement on Form S-4 (the “Folgers Form
10/S-4”) to register the shares of Folgers Common Stock to be distributed in the Distribution,
(iii) Parent will file with the Commission a Schedule TO (the “Schedule TO”) if Parent
elects to effect the Distribution in whole or in part by means of an Exchange Offer, and (iv) the
Parties will file such other appropriate documents as may be applicable. Each of Parent and RMT
Partner will use their best efforts to have the Folgers Form 10/S-4, the RMT Partner Form S-4, and
other registration statements as may be required declared effective under the Exchange Act or
Securities Act, as applicable, as promptly as practicable after such filing. RMT Partner will use
its best efforts to cause the Proxy Statement to be mailed to RMT Partner’s stockholders as
promptly as practicable after the Folgers Form 10/S-4 and the RMT Partner Form S-4 are declared
effective under the Securities Act. Each of RMT Partner and Parent will also take any action
(other than qualifying to do business in any jurisdiction in which it is not now so qualified)
required to be taken under any applicable state securities Laws in connection with, in the case of
RMT Partner, the issuance of RMT Partner Common Stock in the Folgers Merger and, in the case of
Parent, the issuance of Folgers Common Stock in the Distribution. Parent will furnish all
information concerning Parent and Folgers, and RMT Partner will furnish all information concerning
RMT Partner and Merger Sub, as may be reasonably requested in connection with any such action and
the preparation, filing and distribution of the Proxy Statement, the RMT
30
Partner Form S-4, the Folgers Form 10/S-4 and the Schedule TO. No filing of, or amendment or
supplement to the Proxy Statement or the RMT Partner Form S-4 will be made by RMT Partner, no
filing of, or amendment or supplement to, the Folgers Form 10/S-4 will be made by Folgers and no
filing of, or amendment or supplement to, the Schedule TO will be made by Parent, in each case
without providing the other parties a reasonable opportunity to review and comment thereon. If at
any time prior to the Effective Time any information relating to Parent or RMT Partner or any of
their respective affiliates, officers or directors should be discovered by Parent or RMT Partner
which should be set forth in an amendment or supplement to any of the Proxy Statement, the RMT
Partner Form S-4, the Folgers Form 10/S-4 or the Schedule TO, so that any such document would not
include any misstatement of a material fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading,
the Party which discovers such information will promptly notify the other Parties hereto and an
appropriate amendment or supplement describing such information will be promptly filed with the
Commission and, to the extent required by Law, disseminated to the applicable stockholders. The
Parties will notify each other promptly of the receipt of any comments from the Commission or its
staff and of any request by the Commission or its staff for amendments or supplements to the Proxy
Statement, the RMT Partner Form S-4, the Folgers Form 10/S-4 or the Schedule TO or for additional
information and will supply each other with copies of all correspondence between it or any of its
representatives, on the one hand, and the Commission or its staff, on the other hand, with respect
thereto and will respond as promptly as practicable to any such comments or requests.
5.09 RMT Partner Shareholder Meeting. RMT Partner will, as soon as practicable
following the date of this Agreement, establish a record date following the date of this Agreement
for, duly call, give notice of, convene and hold a meeting of its stockholders (the “RMT
Partner Shareholder Meeting”) solely for the purpose of obtaining the RMT Partner Shareholder
Approval and approval of the Amendment Proposal. Subject to Section 5.10, RMT Partner
will, through its Board of Directors, recommend to its shareholders that they give RMT Partner
Shareholder Approval and will include such recommendation in the Proxy Statement. RMT Partner may,
through its Board of Directors, recommend to its shareholders that they approve the Amendment
Proposal and may include such recommendation in the Proxy Statement. Without limiting the
generality of the foregoing, RMT Partner agrees that its obligations pursuant to the first sentence
of this Section 5.09 will not be affected by (i) the commencement, public proposal, public
disclosure or communication to RMT Partner of any RMT Partner Takeover Proposal or (ii) the
withdrawal or modification by the Board of Directors of RMT Partner of its approval or
recommendation of the RMT Partner Shareholder Approval.
5.10 No Solicitation. (a) RMT Partner will, and will cause its Representatives to,
cease immediately any discussions and negotiations regarding any proposal that constitutes, or may
reasonably be expected to lead to, an RMT Partner Takeover Proposal. Except as provided in
Section 5.10(b), RMT Partner will not, nor will it authorize or permit any of its
Subsidiaries to, nor will it authorize or permit any officer, employee, agent, advisor, director or
other representative (collectively,
31
“Representatives”) of RMT Partner or any of its Subsidiaries to (and will instruct
such Representatives not to), directly or indirectly (i) solicit, initiate or encourage the
submission of any RMT Partner Takeover Proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any RMT Partner Takeover Proposal. For purposes of determining
whether RMT Partner has violated the foregoing restrictions through the actions of any of its
employees, it is agreed that only actions by any director or officer of RMT Partner or a Person
acting at the direction or with the knowledge of such director or officer (whether or not such
Person is purporting to act on behalf of RMT Partner or any of its Subsidiaries or otherwise), will
be deemed to be a breach of this Section 5.10 by RMT Partner.
(b) Notwithstanding the provisions of Section 5.10(a), prior to receipt of the RMT
Partner Shareholder Approval, RMT Partner may, if the failure to take such action would be
inconsistent with the fiduciary duties of the Board of Directors of RMT Partner to the stockholders
of RMT Partner under applicable Law, as determined in good faith after consulting with outside
legal counsel, in response to a Qualifying RMT Partner Takeover Proposal (and subject to compliance
with the provisions of this Section 5.10):
(i) furnish information with respect to RMT Partner to the Person making such RMT
Partner Takeover Proposal and its Representatives pursuant to a confidentiality agreement
not less restrictive of the other Party than the Confidentiality Agreement (provided that
all such information has previously been provided to Parent or is provided to Parent prior
to or substantially concurrent with the time it is provided to such Person), and
(ii) participate in discussions and negotiations with such Person and its
Representatives regarding such Qualifying RMT Partner Takeover Proposal.
(c) Neither the Board of Directors of RMT Partner nor any committee thereof will (i) withdraw
or modify in a manner adverse to Parent or Folgers, or publicly propose to withdraw or modify in a
manner adverse to Parent or Folgers, the approval, recommendation or declaration of advisability by
the Board of Directors of RMT Partner of this Agreement, the Other RMT Agreements or any of the
transactions contemplated hereby or thereby, including the RMT Partner Shareholder Approval, (ii)
approve, adopt or recommend, or permit RMT Partner or any of its Subsidiaries to enter into, any
letter of intent, agreement in principle, acquisition agreement, option agreement, joint venture
agreement, merger agreement or similar agreement relating to any RMT Partner Takeover Proposal, or
(iii) approve, adopt or recommend, or publicly propose to approve, adopt or recommend, any RMT
Partner Takeover Proposal. Notwithstanding the foregoing, if, prior to receipt of the RMT Partner
Shareholder Approval, the Board of Directors of RMT Partner receives an RMT Partner Superior
Proposal and as a result thereof the Board of Directors of RMT Partner reasonably determines in
good faith, after consulting with outside legal counsel, that the failure to take such action would
be
32
inconsistent with its fiduciary duties to the stockholders of RMT Partner under applicable
Law, then, on the fifth business day following Parent’s receipt of written notice from RMT Partner,
the Board of Directors of RMT Partner may withdraw or modify its recommendation of the RMT Partner
Shareholder Approval and, in connection therewith, recommend such RMT Partner Superior Proposal;
provided that, during such five-business day period, RMT Partner will be obligated to negotiate in
good faith with Parent and Folgers any modification to this Agreement proposed by Parent or
Folgers.
(d) RMT Partner promptly will advise Parent orally and in writing of any RMT Partner Takeover
Proposal or any inquiry with respect to or that could reasonably be expected to lead to any RMT
Partner Takeover Proposal, and the identity of the Person making any such RMT Partner Takeover
Proposal or inquiry and the material terms of any such RMT Partner Takeover Proposal or inquiry.
RMT Partner will (i) keep Parent reasonably informed of the status including any change to the
material terms of any such RMT Partner Takeover Proposal or inquiry and (ii) provide to Parent as
soon as reasonably practicable after receipt or delivery thereof with copies of all correspondence
and other written material sent or provided to RMT Partner from any third party in connection with
any RMT Partner Takeover Proposal or sent or provided by RMT Partner to any third party in
connection with any RMT Partner Takeover Proposal.
(e) Nothing contained in this Section 5.10 will prohibit RMT Partner from taking and
disclosing to its stockholders a position contemplated by Rules 14d-9 or 14e-2(a) promulgated under
the Exchange Act or from making any required disclosure to RMT Partner’s stockholders if, in the
good-faith judgment of the Board of Directors of RMT Partner after consulting with outside legal
counsel, failure so to disclose would be inconsistent with its obligations under applicable Law;
provided, however, that this Section 5.10(e) will not eliminate or modify (x) RMT Partner’s
obligations under the proviso in Section 5.10(c) or (y) the effect that taking and
disclosing any such position would otherwise have under this Agreement (including under Section
7.01(d)(i)).
(f) For purposes of this Agreement:
(i) “Qualifying RMT Partner Takeover Proposal” mean a bona fide, written RMT
Partner Takeover Proposal that (i) is made by a Person the Board of Directors of RMT Partner
determines, in good faith, after consulting with outside counsel and independent financial
advisors, is reasonably capable of making an RMT Partner Superior Proposal, (ii) the Board
of Directors of RMT Partner determines, in good faith, after consulting with its independent
financial advisor, constitutes or is reasonably likely to lead to an RMT Partner Superior
Proposal, and (iii) that was not solicited by RMT Partner and did not otherwise result from
a breach of this Section 5.10.
(ii) “RMT Partner Takeover Proposal” means (i) any proposal for a merger,
consolidation, dissolution, recapitalization or other business combination involving RMT
Partner, (ii) any proposal or offer for the issuance by
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RMT Partner of over 15% of its
equity securities as consideration for the assets
or securities of another Person, or (iii) any proposal or offer to acquire in any
manner, directly or indirectly, over 15% of the equity securities or consolidated assets of
RMT Partner, or assets or business that constitute over 15% of the consolidated revenues or
net income of RMT Partner, in each case other than the transactions contemplated hereby.
(iii) “RMT Partner Superior Proposal” means any bona fide proposal made by a
third party to acquire 50% or more of the equity securities or all or substantially all the
assets of RMT Partner, pursuant to a tender or exchange offer, a merger, a consolidation, a
liquidation or dissolution, a recapitalization, a sale of all or substantially all its
assets or otherwise, on terms which the Board of Directors of RMT Partner determines in its
good-faith judgment after consulting with its independent financial advisor (i) to be
superior from a financial point of view to the holders of RMT Partner Common Stock than the
transactions contemplated hereby, taking into account all the terms and conditions of such
proposal and this Agreement (including any proposal by Parent to amend the terms of the
transactions contemplated hereby) as well as any other factors deemed relevant by the Board
of Directors of RMT Partner and (ii) is reasonably capable of being completed, taking into
account all financial, regulatory, legal and other aspects of such proposal.
5.11 Notification Of Certain Matters. Each of Parent and RMT Partner will give prompt
written notice to the other of (i) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the Transactions, (ii) any
Action commenced or threatened in writing against, relating to or involving or otherwise affecting
it or any of its Subsidiaries that relate to the consummation of the Transactions, and (iii) any
change that is reasonably expected to have, individually or in the aggregate, a Coffee Business MAE
or reasonably expected to have, individually or in the aggregate, an RMT Partner MAE, as the case
may be.
5.12 NYSE Listing. RMT Partner will use commercially reasonable efforts to cause the
shares of RMT Partner Common Stock to be issued in connection with the Merger to be issued in
connection with the Merger to be listed on the NYSE as of the Effective Time, subject to official
notice of issuance.
5.13 Affiliates. At least ten days prior to the mailing of the Proxy Statement, (i)
Parent will deliver to RMT Partner a letter identifying all persons who may be deemed to be
Affiliates of Folgers as of the date on which Parent, as sole shareholder of Folgers, approves and
adopts the Merger (the “Rule 145 Affiliates”) and (ii) Parent will advise the persons
identified in such letter of the resale restrictions imposed by applicable securities Law and will
use commercially reasonable efforts to obtain from each person identified in such letter a written
agreement in customary form and substance.
5.14 Indemnification. (a) Subject to the terms and conditions of this Agreement,
from and after the Closing, each of Parent and RMT Partner will indemnify and hold harmless the
other (as well as their respective directors, officers, employees
34
and agents) from and against any
and all Losses incurred in investigation or defense of
any third-party Action arising out of or related to a breach by such Party of (i) a Surviving
Covenant or (ii) the representations and warranties made by the indemnifying Party in Sections
3.04 and 4.06, respectively.
(b) The indemnification obligations set forth in Section 5.14 will be subject to the
provisions of Sections 4.4, 4.5(b), 4.6(a) and 4.6(c)-(d) of the
Separation Agreement, which will be deemed to be incorporated herein mutatis mutandis.
5.15 Employee Matters.
(a) Continuity of Employment. Parent and RMT Partner hereby acknowledge that it is in
their mutual best interest for there to be continuity of employment by RMT Partner, the Surviving
Corporation or one of its respective Subsidiaries following the Closing Date with respect to each
individual who currently works, or is hired prior to the Closing Date to work, for the sole purpose
of providing services to the Coffee Business (and any individual hired prior to the Closing Date to
replace such individual) (“Business Employees”). Each Business Employee who continues
employment with RMT Partner, the Surviving Corporation or one of its respective Subsidiaries (the
applicable entity, the “Employing Entity”) is referred to herein as a “Continuing
Employee.” A Business Employee who is on disability leave or on approved leave of absence on
the Closing Date will become a Continuing Employee only if such Business Employee returns to active
employment prior to the later of (a) the first anniversary of the Closing Date or (b) the end of
the period of time during which the reemployment rights are guaranteed under applicable Law (such
employee, a “Delayed Employee”). The date on which a Delayed Employee commences active
employment with the applicable Employing Entity is hereinafter referred to as the “Delayed
Date”. Within 30 calendar days following the execution of this Agreement, Parent will use
commercially reasonable efforts to provide RMT Partner with a list of the individuals as of the
most reasonably practicable date who are Business Employees (the “Continuing Employee
List”). Parent will provide RMT Partner within five Business Days prior to the Closing Date an
updated Continuing Employee List.
(b) Compensation and Benefits. With respect to each Continuing Employee, for the
period commencing on the Closing Date and ending on the second anniversary thereafter (the
“Benefits Continuation Period”), RMT Partner will, or will the cause the applicable
Employing Entity to, provide each such Continuing Employee (i) compensation (including salary,
wages and bonus opportunity) as in effect immediately prior to Effective Time (or communicated to
the applicable Continuing Employee in connection with the proposed divestiture of the Coffee
Business) and (ii) employee benefits (including equity based compensation, retirement benefits and
additional compensation in lieu of other benefits) that in all material respects are no less
favorable in the aggregate than employee benefits communicated to the applicable Continuing
Employee in connection with proposed divestiture of the Coffee Business and described on
Section 3.10(a) of the Parent Disclosure Letter, or if more favorable, employee benefits
provided by RMT Partner or the Employing Entity to similarly situated employees of RMT Partner or
the Employing Entity. In evaluating the relative
35
favorability of employee benefits, the RMT
Partner may use reasonable actuarial and
other assumptions. For avoidance of doubt, except for the Coffee Business And Benefit Plans
set forth on Section 3.10(a)(ii) of the Parent Disclosure Letter, RTM Parent and the
applicable Employing Entity will have discretion to determine the compensation and employee
benefits provided to the Continuing Employees, provided that in the aggregate they otherwise
satisfy the standard set forth in this Section 5.15(b).
(c) Service Recognition. RMT Partner will, or will cause the Employing Entity to,
give each Continuing Employee full credit for purposes of eligibility, vesting and determination of
level of benefits under the applicable RMT Partner Compensation and Benefit Plans for such
Continuing Employee’s service with Parent or its Subsidiaries prior to the Closing Date (or, if
applicable, the Delayed Date) at least to the same extent such service was recognized by the
corresponding Coffee Business Compensation And Benefit Plan immediately prior to the Closing Date
(or, if applicable, the Delayed Date); provided, however, that such service will not be recognized
(i) to the extent that such recognition would result in the duplication of benefits under an RMT
Partner Compensation and Benefit Plan and a Coffee Business Compensation And Benefit Plans and (ii)
for purposes of any defined benefit pension plans or retiree medical plans.
(d) 401(k) Plan. Each Continuing Employee who is eligible to contribute to Parent
401(k) plan on the Closing Date (or, if applicable, the Delayed Date) will be eligible to
participate and contribute to an RMT Partner Compensation and Benefit Plan intended to qualify
under Section 401(k) of the Code (the “RMT 401(k) Plan”) commencing as soon as reasonably
practicable after the Closing Date (or, if applicable, the Delayed Date) and RMT Partner will, or
will cause the Employing Entity to, permit Continuing Employees the right to roll over, in cash,
their account balances into the RMT 401(k) Plan subject to the regular procedures of the RMT 401(k)
Plan.
(e) Welfare Plans. RMT Partner or the Employing Entity will cause each RMT Partner
Compensation and Benefit Plan that is a health and welfare benefit plan (an “RMT Welfare
Plan”) to (i) waive all limitations as to preexisting conditions, exclusions and service
conditions with respect to participation and coverage requirements applicable to Continuing
Employees, other than limitations that were in effect with respect to such employees as of the
Closing Date (or, if applicable, the Delayed Date) under the corresponding health and welfare plan
maintained by Parent (“Parent Welfare Plan”), (ii) honor any deductibles, out-of-pocket
maximums and co-payments incurred by Continuing Employees under the corresponding Parent Welfare
Plan in satisfying any applicable deductibles, out-of-pocket maximums or co-payments under an RMT
Welfare Plan during the same plan year in which such deductibles, out-of-pocket maximums and
co-payments were made, and (iii) with respect to any medical plan, waive any waiting period
limitation or evidence of insurability requirement that would otherwise be applicable to a
Continuing Employee following the Closing Date (or, if applicable, the Delayed Date) to the extent
such employee had satisfied any similar limitation under the corresponding Parent Welfare Plan.
36
(f) Severance Benefits. With respect to each Continuing Employee, other than a
Continuing Employee who is a party to an individual severance agreement,
who incurs a “Constructive Termination” during the Benefits Continuation Period, RMT Partner
will, or will cause the Surviving Corporation to, provide such employee with the severance payments
and benefits under the formula set forth on Section 5.15(f) of the Parent Disclosure
Letter. A “Constructive Termination” means (A) a termination by RMT Partner or the
Employing Entity of a Continuing Employee’s employment, other than for “cause” or (B) a termination
by a Continuing Employee of his or her employment with RMT Partner or the Employing Entity due to a
reduction in his or her base pay from that in effect on the Closing Date or a relocation of such
employee’s principal place of employment by more than 50 miles from his or her principal place of
employment on the Closing Date. With respect to a Continuing Employee who is a party to an
individual severance agreement, RMT Partner will assume such agreement and provide such employee
with the severance payments and benefits such employee would be entitled under the terms of his or
her severance agreement, or if more favorable, the severance payments provided by RMT Partner to
similarly situated employees. RMT Partner and the Employing Entity may require, as a condition to
the payment of any severance due hereunder to any Continuing Employee, that such Continuing
Employee provide a general waiver and release of claims in a form substantially similar to the form
used for similarly situated RMT employees; provided that nothing herein will preclude such
Continuing Employee from becoming employed by Parent and such release will also include a provision
for a release of claims for the benefit of the Parent Group.
(g) Specified Employee Matters. The parties specified in Section 5.15(g) of
the Parent Disclosure Letter will take the actions therein specified for, if applicable, the period
therein provided.
(h) The provisions of this Section 5.15 are solely for the benefit of the parties
hereto and does not confer on third-parties (including any Business Employees or Continuing
Employee or any of their beneficiaries, dependent or alternate payee of any of the foregoing) any
remedy, claim, reimbursement, claim of action or other right in addition to those existing without
reference to this Agreement. Furthermore, nothing in this Agreement, including this Section
5.15 is intended (i) to confer upon any employee or former employee of Parent (including
Business Employees) any right to continued employment, or any recall or similar rights to an
individual on layoff or any type of approved leave or (ii) to be construed to relieve any insurance
company of any responsibility for any employee benefit under any benefit plan or any other
Liability or to constitute a plan or a plan amendment. In the event that (i) a party other than
Parent or RMT Partner makes a claim or takes other action to enforce any provision in this
Agreement as an amendment to any Parent Compensation and Benefit Plan, RMT Partner Compensation and
Benefit Plan, Coffee Business Compensation and Benefit Plan or other compensation or benefit plan
and (ii) such provision is deemed to be an amendment to such Parent Compensation and Benefit Plan,
RMT Partner Compensation And Benefit Plan, RMT Partner Compensation And Benefit Plan, Coffee
Company Compensation and Benefit Plan or other compensation or benefit plan, as
37
applicable, even
though not explicitly designated as such in this Agreement, then such provision will lapse
retroactively and will have no amendatory effect.
(i) Except for Sections 5.15(g) and 5.15(h), the provisions of this
Section 5.15 will not apply to any employee of the Business who is a beneficiary of a
collective bargaining agreement. The terms and conditions of employment for such employees will be
as set forth in the applicable collective bargaining agreement relating to such employee.
5.16 Voting Agreement. Contemporaneously with the execution of this Agreement, RMT
Partner will deliver to Parent the Voting Agreement, fully executed by each of the shareholders of
RMT Partner that are a party thereto except the Xxxxxxxx Shareholders. RMT Partner will use its
commercially reasonable efforts to cause the Xxxxxxxx Shareholders to execute the Voting Agreement
as promptly as practicable after the date hereof.
5.17 Required Amendments. Notwithstanding anything to the contrary set forth herein
or in any other Transaction Document (as defined in the Tax Matters Agreement), the parties shall
cooperate and negotiate in good faith with respect to any amendment to the Transaction Documents
reasonably requested by a party in order to enable its counsel to deliver the written opinion(s)
contemplated by Section 6.02 or 6.03 of this Agreement, as the case may be (any such amendment, a
“Proposed Amendment”). Neither party shall withhold its consent to a Proposed Amendment
that (i) does not result in any change in the Merger Consideration, (ii) is not materially adverse
to the interests of any party hereto, and (iii) does not unreasonably impede or delay consummation
of the Merger. Any Proposed Amendment that the parties consent to shall be reflected through the
execution of appropriate written amendments to the applicable Transaction Documents.
5.18 TSA/IP Updates. (a) IP Matters Agreement. Prior to the Closing, RMT
Partner will use its best efforts to identify and remove from Schedule B and Schedule
C to the Intellectual Property Matters Agreement, any Parent IP Asset(s) (as defined in the
Intellectual Property Matters Agreement) that RMT Partner determines, in its reasonable discretion
and in consultation with Parent, is not necessary to manufacture products of the Coffee Business as
such products are currently being manufactured by Folgers in RMT Partner’s established business
environment.
(b) TSA Services. Prior to the Closing, RMT Partner will use its best efforts to
remove from the schedules to the TSA those Services (as defined in the TSA) identified on
Section 5.18 of the Parent Disclosure Letter, unless RMT Partner determines, in its
reasonable discretion and in consultation with Parent, (i) it would not otherwise be able to
procure such Service(s) from a third party on commercially reasonable terms or (ii) such Services
would be necessary to consummate the Transactions on the timetable contemplated by the Parties.
5.19 RMT Partner Special Dividend. In the event that Parent elects to effect the
Distribution by way of an Exchange Offer, Parent will use reasonable efforts to keep RMT Partner
reasonably informed of the anticipated commencement date and
38
anticipated terms of such Exchange
Offer, for the purpose of facilitating RMT Partner’s determination of the record date for such
Special Dividend.
VI. CONDITIONS TO THE MERGER
6.01 Conditions To The Merger. The respective obligation of Parent and RMT Partner to
effect the Merger is subject to the satisfaction or waiver of the following conditions:
(a) the RMT Partner Shareholder Approval shall have been obtained at the RMT Partner
Shareholder Meeting;
(b) no preliminary or permanent injunction or other Order shall have been issued that would
make unlawful the consummation of the Transactions;
(c) the RMT Partner Common Stock to be issued in the Merger shall have been authorized for
listing on the NYSE, subject to notice of official issuance;
(d) Each of the RMT Partner Form S-4 and the Folgers Form 10/S-4 (or the Folgers Form 10, if
Parent elects to effect the Distribution solely as a One-Step Spin-Off) shall have become effective
under the Securities Act and shall not be the subject of any stop order or proceedings seeking a
stop order, and (i) if the Distribution is effected in whole or in part as an Exchange Offer, the
applicable offer period and any extensions thereof in the Exchange Offer required by applicable
securities Law shall have expired or (ii) if the Distribution is effected in whole or in part as a
One-Step Spin-Off, the applicable notice periods required by applicable stock exchange rules or
securities Laws shall have expired;
(e) all applicable waiting periods under the HSR Act shall have terminated or expired; and
(f) the Folgers Transfer and the Distribution shall have occurred.
6.02 Conditions To The Obligation Of RMT Partner. The obligation of RMT Partner to
effect the Merger is subject to the satisfaction of each of the following conditions (each of which
is for the exclusive benefit of RMT Partner and may be waived by RMT Partner):
(a) all covenants of Parent under this Agreement and the Other RMT Agreements to be performed
on or before the Closing shall have been duly performed by Parent in all material respects;
(b) the representations and warranties of Parent in Section 3.05 of this Agreement
shall be true and correct in all but de minimis respects;
(c) the representations and warranties of Parent in this Agreement other than Section
3.05 (which for purposes of this paragraph will be read as though none of them contained any
materiality or “Coffee Business MAE” qualifications, but not
39
disregarding limitations of
representations to Folgers Material Contracts) shall be true and correct in all respects as of the
Closing with the same effect as though made as of the Closing (except that any representation and
warranty made as of a date other than
the date of this Agreement will continue on the Closing Date to be true and correct in all
respects as of the specified date), except where the failure of the representations and warranties
to be true and correct in all respects has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Coffee Business MAE, and RMT Partner shall have received a
certificate of Parent addressed to RMT Partner and dated the Closing Date, signed on behalf of
Parent by an officer of Parent (on Parent’s behalf and without personal liability), confirming the
matters set forth in Section 6.02(a), Section 6.02(b) and this Section
6.02(c); and
(d) RMT Partner shall have received a written opinion, dated as of the Closing Date, from
Weil, Gotshal & Xxxxxx LLP, special tax counsel to RMT Partner, to the effect that the Merger will
be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a)
of the Code. In rendering the foregoing opinion, counsel will be permitted to rely upon and assume
the accuracy of customary representations provided by (i) RMT Partner and Merger Sub and (ii)
Parent.
6.03 Conditions To The Obligation Of Parent. The obligation of Parent to effect the
Merger is subject to the satisfaction of each of the following conditions (each of which is for the
exclusive benefit of Parent and may be waived by Parent):
(a) all covenants of RMT Partner under this Agreement and the Other RMT Agreements to be
performed on or before the Closing Date shall have been duly performed by RMT Partner in all
material respects;
(b) the representations and warranties of RMT Partner in Section 4.03 of this
Agreement shall be true and correct in all but de minimis respects;
(c) the representations and warranties of RMT Partner in this Agreement other than Section
4.03 (which for purposes of this paragraph will be read as though none of them contained any
materiality or material adverse effect qualifications, but not disregarding limitations of
representations to RMT Partner Material Contracts) shall be true and correct in all respects as of
the Closing Date with the same effect as though made as of the Closing Date (except that any
representation and warranty made as of a date other than the date of this Agreement will continue
on the Closing Date to be true and correct in all respects as of the specified date), except where
the failure of the representations and warranties to be true and correct in all respects has not
had, and would not reasonably be expected to have, individually or in the aggregate, an RMT Partner
MAE, and Parent shall have received a certificate of RMT Partner addressed to Parent and dated the
Closing Date, signed on behalf of RMT Partner by an officer of RMT Partner (on RMT Partner’s behalf
and without personal liability), confirming the matters set forth in Section 6.03(a),
Section 6.03(b) and this Section 6.03(c);
(d) Parent shall have received a written opinion, dated as of the Closing Date, from
Cadwalader, Xxxxxxxxxx & Xxxx LLP, counsel to Parent, to the effect that the Merger will be treated
for federal income tax purposes as a
40
reorganization within the meaning of Section 368(a) of the
Code. In rendering the foregoing opinion, counsel will be permitted to rely upon and assume the
accuracy of customary representations provided by (i) RMT Partner and Merger Sub and (ii) Parent;
(e) Parent shall have received a written opinion, dated as of the Closing Date, from
Cadwalader, Xxxxxxxxxx & Xxxx LLP, counsel to Parent, to the effect that (i) the Folgers Transfer,
taken together with the Distribution, should qualify as a tax-free reorganization pursuant to
Section 368(a)(1)(D) of the Code, (ii) the Distribution, as such, should qualify as a distribution
of Folgers stock to Parent stockholders pursuant to Section 355 of the Code, and (iii) the Merger
should not cause Section 355(e) of the Code to apply to the Distribution. In rendering the
foregoing opinion, counsel will be permitted to rely upon and assume the accuracy of customary
representations provided by (i) RMT Partner and (ii) Parent; and
(f) if Parent elects to effect the Distribution by way of a Qualifying Exchange Offer,
shareholders of Parent shall have validly tendered and not properly withdrawn before the expiration
of the Exchange Offer enough shares of the common stock of Parent such that no less than 59% of the
shares of Folgers Common Stock issued to Parent in the Folgers Stock Issuance is distributed
pursuant to the Qualifying Exchange Offer.
VII. TERMINATION AND ABANDONMENT
7.01 Basis For Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(a) by mutual written consent of Parent and RMT Partner;
(b) by either Parent or RMT Partner:
(i) if, upon a vote at a duly held meeting of RMT Partner’s stockholders to obtain the
RMT Partner Shareholder Approval, the RMT Partner Shareholder Approval is not obtained;
(ii) if the Closing does not occur on or prior to March 31, 2009 (the “Outside
Date”), unless the failure of the Closing to occur by such date is due to the failure of
the Party seeking to terminate the Agreement to perform or observe in all material respects
the covenants and agreements of such Party set forth herein; or
(iii) if (A) there shall be any Law that makes consummation of the transactions
hereunder illegal or otherwise prohibited or (B) any Governmental Authority having competent
jurisdiction shall have issued an order, decree or ruling or taken any other action (which
the terminating Party shall have complied with its obligations hereunder to resist, resolve
or lift) permanently restraining, enjoining or otherwise prohibiting any material component
of the
41
transactions hereunder, and such order, decree, ruling or other action shall have
become final and non-appealable;
(c) by Parent:
(i) if RMT Partner Board or any committee thereof withdraws, or modifies in a manner
adverse to Parent or Folgers or publicly proposes to withdraw or modify in a manner adverse
to Parent or Folgers, its approval or recommendation of this Agreement or any of the
transactions contemplated hereby, fails to recommend to RMT Partner’s stockholders that they
give the RMT Partner Shareholder Approval, or approves or recommends, or proposes publicly
to approve or recommend, any RMT Partner Takeover Proposal;
(ii) if RMT Partner breaches its obligations under Section 5.10;
(iii) if RMT Partner or Merger Sub breaches or fails to perform any of its
representations and warranties or covenants and agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure of a condition set
forth in Article VI and (B) cannot be or has not been cured within 60 days after the
giving of written notice to RMT Partner of such breach; or
(iv) if any of the conditions set forth in Section 6.01 or Section 6.03
shall have become incapable of fulfillment, and shall not have been waived by Parent;
(d) by RMT Partner:
(i) if Parent or Folgers breaches or fails to perform any of its representations and
warranties or covenants and agreements contained in this Agreement, which breach or failure
to perform (A) would give rise to the failure of a condition set forth in Article VI
and (B) cannot be or has not been cured within 60 days after the giving of written notice to
Parent of such breach; or
(ii) if any of the conditions set forth in Section 6.01 or Section 6.02
shall have become incapable of fulfillment, and shall not have been waived by RMT Partner;
provided, however, that the Party seeking termination pursuant to clause (c)(iii),
(c)(iv), (d)(i), or (d)(ii) is not in material breach of any of its
representations, warranties, covenants or agreements contained in this Agreement.
7.02 Notice of Termination, Return of Documents, Continuing Confidentiality
Obligation. In the event of termination by Parent or RMT Partner pursuant to this Article
VII, written notice thereof will forthwith be given to the other Parties and the transactions
contemplated by this Agreement and the Other RMT Agreements will terminate, without further action
by any Party. If the transactions contemplated by this Agreement and the Other RMT Agreements are
terminated as
42
provided herein, (a) RMT Partner and Merger Sub will return to Parent all documents
and copies and other material received from Parent and its Subsidiaries and its and their
Representatives relating to the transactions contemplated hereby and by the Other RMT Agreements,
whether so obtained before or after the execution hereof, and (b) Parent and Folgers will return to
RMT Partner all documents and copies and other
material received from RMT Partner and its Subsidiaries and its and their Representatives
relating to the transactions contemplated hereby and by the Other RMT Agreements, whether so
obtained before or after the execution hereof.
7.03 Effect of Termination. (a) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Article VII, this Agreement will
become void and of no further force and effect, except for the provisions of Section 5.04
relating obligations to keep certain information confidential, Section 5.07 relating to
publicity, this Section 7.03 and Article VIII (other than Section 8.12
which shall terminate with the other provisions of this Agreement except as specifically provided
herein) containing general provisions. Nothing in this Article VII will be deemed to
release any Party from any liability for any willful breach by such Party of the terms and
provisions of this Agreement or to impair the right of any Party to compel specific performance by
another Party of its obligations under this Agreement that specifically survive such termination as
set forth in the immediately preceding sentence. For the avoidance of doubt, receipt by Parent of a
payment or reimbursement pursuant to Section 7.03(b) or Section 7.03(c) will not
limit the ability of Parent to xxx for any willful breach of Section 5.10 or collect
damages arising from any such willful breach (except, in the case of calculation of damages, to the
extent a court would otherwise take such payment or reimbursement into account in assessing damages
for such breach).
(b) RMT Partner will pay to Parent:
(i) a fee of $35 million if either Party terminates this Agreement pursuant to
Section 7.01(b)(i); provided, that if (A) at any time after the date of this
Agreement and prior to any such termination, an RMT Partner Takeover Proposal with respect
to RMT Partner shall have been publicly announced, publicly proposed or commenced (provided
that for purposes of determining whether an RMT Takeover Proposal exists under this clause
(i), the references in the definition of such term to “15%” will be deemed to be “50%”); and
(B) within twelve months after the date of such termination, RMT Partner shall have entered
into an agreement related to an RMT Partner Takeover Proposal or any RMT Takeover Proposal
shall have been consummated, then RMT Partner shall pay an additional fee of $65 million to
Parent at or before the execution of such agreement;
(ii) a fee of $100 million if (A) either Party terminates this Agreement pursuant to
Section 7.01(b)(ii); (B) at any time after the date of this Agreement and prior to
any such termination, an RMT Partner Takeover Proposal with respect to RMT Partner shall
have been communicated to the Board of Directors of RMT Partner and not withdrawn (provided
that for purposes of determining whether an RMT Takeover Proposal exists under this clause
(ii),
43
the references in the definition of such term to “15%” will be deemed to be “50%”);
and (C) within twelve months after the date of such termination, RMT Partner shall have
entered into an agreement related to an RMT Partner Takeover Proposal or any RMT Takeover
Proposal shall have been consummated;
(iii) a fee of $100 million if Parent terminates this Agreement pursuant to
(c)(i) or (ii).
Any fee due under this Section 7.03(b) will be paid by wire transfer of immediately
available funds (to an account specified by Parent). The fees described in clauses (i) and (iii)
will be paid by RMT Partner promptly following termination of this Agreement (except that the fee
described in the proviso to clause (i) will be paid as provided therein, and in the case of a
termination by RMT Partner described in clause (i) above, such payment will be made at the time of
or prior to such termination). The fee described in clause (ii) will be paid by RMT Partner at or
before entering into the agreement relating to an RMT Takeover Proposal described therein. If RMT
Partner makes a payment to Parent pursuant to Section 7.03(b)(i), 7.03(b)(ii), or
7.03(b)(iii), it will not be obligated to make any subsequent payment under the other
subsections of Section 7.03(b) as applicable (for the avoidance of doubt, if the first
payment contemplated by Section 7.03(b)(i) is paid by RMT Partner, the second payment
contemplated by Section 7.03(b)(i) will continue to become payable under the circumstances
provided therein). Upon payment of the termination fees in accordance with this Section
7.03(b) and any applicable reimbursement of expenses under Section 7.03(c), RMT Merger
Partner will have no further liability to Parent at law or in equity under this Agreement except as
specifically set forth in Section 7.03(a).
(c) RMT Partner will reimburse Parent for all its out-of-pocket expenses actually incurred in
connection with this Agreement, the Other RMT Agreements and the transactions contemplated hereby
and thereby (not to exceed $10 million) if this Agreement is terminated in the circumstances
specified in clauses (i) or (iii) of Section 7.03(b), or if a fee becomes payable pursuant
to clause (ii) of Section 7.03(b). Such reimbursement will be paid by wire transfer of
immediately available funds (to an account specified by Parent), promptly following termination of
this Agreement.
VIII. MISCELLANEOUS
8.01 Nonsurvival Of Representations, Warranties And Agreements. None of the
representations, warranties and agreements in this Agreement will survive the Merger; provided,
however, that the agreements contained in Article I, Article II and in Sections
5.04, 5.05, 5.06, 5.14 and 5.15 and this Article VIII
that by their terms are to be performed in whole or part after the Effective Time (each, a
“Surviving Covenant”) will survive the Merger.
8.02 Expenses. (a) General Rule. Except as otherwise provided in this
Agreement or any of the Other RMT Agreements, all fees and expenses incurred in
44
connection with the
Transactions shall be paid by the Party incurring such fees or expenses.
(b) HSR Fee; Printing Expenses. RMT Partner and Parent will share equally (i) any
requisite filing fee in respect of any notice submitted pursuant to the HSR Act and (ii) the fees
and expenses of printers utilized by the Parties in connection with the preparation of the filings
with the Commission contemplated by Section 5.08.
(c) Folgers Counsel Expenses. In the event the Transactions are consummated, RMT
Partner will reimburse Parent for fees and expenses incurred by Folgers or by Parent or any of its
Subsidiaries on behalf of Folgers for Folgers’ legal counsel (including Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx LLP) in connection with the Transactions, up to an aggregate amount of $2
million.
(d) Folgers Indebtedness Expenses. Promptly following the earlier of (i) the Closing
Date and (ii) the termination of this Agreement, RMT Partner will reimburse Parent for any costs
and expenses incurred by Folgers or by Parent or any of its Subsidiaries on behalf of Folgers in
connection with Folgers’ entry into the Folgers Credit Facility, including any rating agency
evaluation or maintenance fees, commitment fees, professional fees and expenses, and other fees
paid pursuant to fee letters and arrangements entered into in connection with the Folgers Credit
Facility; provided, however, that RMT Partner will have no obligation to reimburse Parent for such
fees and expenses if this Agreement is terminated by RMT Partner pursuant to Section
7.01(d)(i).
(e) TSA Sunk Cost Charge. RMT Partner will be responsible to make the one-time $18.4
million payment set forth in the Transition Services Agreement as reimbursement of the fees and
expenses incurred by Parent and its Subsidiaries in connection with the preparation of transitional
services to be provided to Folgers following a divestiture of Folgers; provided, however, that RMT
Partner will have no obligation to make such payment to Parent if this Agreement is terminated by
RMT Partner pursuant to Section 7.01(d)(i).
8.03 Entire Agreement. This Agreement and the Other RMT Agreements, including any
related annexes, schedules and exhibits, as well as any other agreements and documents referred to
herein and therein, will together constitute the entire agreement between the Parties with respect
to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and
understandings of the Parties of any nature, whether oral or written, with respect to such subject
matter, including the Confidentiality Agreement, which is hereby terminated and of no further force
or effect.
8.04 Governing Law. The validity, interpretation and enforcement of this Agreement
will be governed by the Laws of the State of Ohio, other than the choice of Law provisions thereof.
8.05 Notices. Any notice, demand, claim or other communication under this Agreement
will be in writing and will be deemed to have been given (a) on delivery if delivered personally,
(b) on the date on which delivery thereof is guaranteed by the
45
carrier if delivered by a national
courier guaranteeing delivery within a fixed number of days of sending, or (c) on the date of
transmission thereof if delivery is confirmed, but, in each case, only if addressed to the Parties
in the following manner at the following addresses or facsimile numbers (or at the other address or
other number as a Party may specify by notice to the other):
If to Parent or, prior to the Effective Time, Folgers:
The Procter & Xxxxxx Company
Xxx Xxxxxxx & Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx,
Associate General Counsel — Global Transactions
Facsimile: (000) 000-0000
Email: xxxxxxxxx.xx@xx.xxx
Xxx Xxxxxxx & Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx,
Associate General Counsel — Global Transactions
Facsimile: (000) 000-0000
Email: xxxxxxxxx.xx@xx.xxx
with a copy to:
Xxxxx Day
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxxxxx@xxxxxxxx.xxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxxxxx@xxxxxxxx.xxx
If to RMT Partner or, after the Effective Time, Folgers:
The X.X. Xxxxxxx Company
Xxx Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: M. Xxx Xxxxxx,
Vice President, General Counsel and Secretary
Facsimile: (000) 000-0000
Email: xxx.xxxxxx@xxxxxxxxx.xxx
Xxx Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: M. Xxx Xxxxxx,
Vice President, General Counsel and Secretary
Facsimile: (000) 000-0000
Email: xxx.xxxxxx@xxxxxxxxx.xxx
with a copy to:
Xxxxxx, Halter & Xxxxxxxx LLP
0000 XxxXxxx Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq. and Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxxx@xxxxxx.xxx and xxxxxxxxx@xxxxxx.xxx
0000 XxxXxxx Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq. and Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxxx@xxxxxx.xxx and xxxxxxxxx@xxxxxx.xxx
Any notice to Parent will be deemed notice to Parent and its Subsidiaries, and any notice to
Folgers will be deemed notice to Folgers and its Subsidiaries.
46
8.06 Amendments and Waivers. (a) This Agreement may be amended and any provision of
this Agreement may be waived, provided that any such amendment or waiver will be binding upon a
Party only if such amendment or waiver is set forth in a writing executed by such Party. No course
of dealing between or among any Persons having any interest in this Agreement will be deemed
effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any Party hereto under or
by reason of this Agreement.
(b) No delay or failure in exercising any right, power or remedy hereunder will affect or
operate as a waiver thereof; nor will any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, power or remedy preclude any further exercise
thereof or of any other right, power or remedy. The rights and remedies hereunder are cumulative
and not exclusive of any rights or remedies that any Party hereto would otherwise have. Any
waiver, permit, consent or approval of any kind or character of any breach or default under this
Agreement or any such waiver of any provision of this Agreement must satisfy the conditions set
forth in Section 8.06(a) and will be effective only to the extent in such writing
specifically set forth.
8.07 No Third-Party Beneficiaries. Except for the provisions of Section 5.14
with respect to indemnification of indemnitees, this Agreement is solely for the benefit of the
Parties hereto and does not confer on third-parties (including any employees of any member of the
Parent Group, Folgers or RMT Partner or any of their respective Subsidiaries) any remedy, claim,
reimbursement, claim of action or other right in addition to those existing without reference to
this Agreement.
8.08 Assignability. No Party may assign its rights or delegate its duties under this
Agreement without the written consent of the other Parties, except that a Party may assign its
rights or delegate its duties under this Agreement to an Affiliate thereof, provided that such
Person agrees in writing to be bound by the terms and conditions contained in this Agreement, and
provided further that the assignment or delegation will not relieve any Party of its
indemnification obligations or obligations in the event of a breach of this Agreement. Except as
provided in the preceding sentence, any attempted assignment or delegation will be void.
8.09 Construction. The descriptive headings herein are inserted for convenience of
reference only and are not intended to be a substantive part of or to affect the meaning or
interpretation of this Agreement or the Parent Disclosure Letter or RMT Partner Disclosure Letter.
Whenever required by the context, any pronoun used in this Agreement or the Parent Disclosure
Letter or RMT Partner Disclosure Letter will include the corresponding masculine, feminine or
neuter forms, and the singular forms of nouns, pronouns, and verbs will include the plural and vice
versa. Reference to any agreement, document, or instrument means such agreement, document, or
instrument as amended or otherwise modified from time to time in accordance with the terms thereof,
and if applicable hereof. The use of the words “include” or “including” in this Agreement or the
Parent Disclosure Letter or RMT Partner Disclosure Letter will be by way of example rather than by
limitation. The use of the words “or,” “either” or “any” will
47
not be exclusive. The Parties have
participated jointly in the negotiation and drafting of this Agreement and the Other RMT
Agreements, and the Parties acknowledge that (a) RMT Partner has been represented by Xxxxxx, Halter
& Xxxxxxxx LLP in connection with this Agreement and the Other RMT Agreements, and (b) Parent has
been represented by Xxxxx Day in connection with this Agreement and the Other RMT Agreements (and
Xxxxx Day has not acted as counsel to Folgers in connection therewith). In the event an
ambiguity or question of intent or interpretation arises, this Agreement will be construed as if
drafted jointly by the Parties hereto, and no presumption or burden of proof will arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
Except as otherwise expressly provided elsewhere in this Agreement or any Other RMT Agreement, any
provision herein which contemplates the agreement, approval or consent of, or exercise of any right
of, a Party, such Party may give or withhold such agreement, approval or consent, or exercise such
right, in its sole and absolute discretion, the Parties hereto hereby expressly disclaiming any
implied duty of good faith and fair dealing or similar concept.
8.10 Severability. The Parties agree that (a) the provisions of this Agreement will
be severable in the event that for any reason whatsoever any of the provisions hereof are invalid,
void or otherwise unenforceable, (b) any such invalid, void or otherwise unenforceable provisions
will be replaced by other provisions which are as similar as possible in terms to such invalid,
void or otherwise unenforceable provisions but are valid and enforceable, and (c) the remaining
provisions will remain valid and enforceable to the fullest extent permitted by applicable Law.
8.11 Counterparts. This Agreement may be executed in multiple counterparts (any one
of which need not contain the signatures of more than one Party), each of which will be deemed to
be an original but all of which taken together will constitute one and the same agreement. This
Agreement, and any amendments hereto, to the extent signed and delivered by means of a facsimile
machine or other electronic transmission, will be treated in all manner and respects as an original
agreement and will be considered to have the same binding legal effects as if it were the original
signed version thereof delivered in person. At the request of any Party, the other Party will
re-execute original forms thereof and deliver them to the requesting Party. No Party will raise
the use of a facsimile machine or other electronic means to deliver a signature or the fact that
any signature was transmitted or communicated through the use of facsimile machine or other
electronic means as a defense to the formation of a Contract and each such Party forever waives any
such defense.
8.12 Specific Performance. The parties hereby acknowledge and agree that the failure
of any Party to perform its agreements and covenants hereunder, including its failure to take all
actions that it is obligated to take under the terms hereof to consummate the Transactions, will
cause irreparable injury to the other parties for which damages, even if available, will not be an
adequate remedy. Accordingly, each Party hereby consents to the issuance of injunctive relief by
any court of competent jurisdiction to compel performance of such Party’s obligations and to the
granting by any court of the remedy of specific performance of its obligations hereunder.
48
8.13 Disclosure Letters. There may be included in the Parent Disclosure Letter and/or
the RMT Partner Disclosure Letter items and information that are not “material,” and such inclusion
will not be deemed to be an acknowledgment or agreement that any such item or information (or any
non-disclosed item or information of comparable or greater significance) is “material,” or to
affect the interpretation of such
term for purposes of this Agreement. Matters reflected in the Parent Disclosure Letter and
RMT Partner Disclosure Letter are not necessarily limited to matters required by this Agreement to
be disclosed therein. The Parent Disclosure Letter and RMT Partner Disclosure Letter set forth
items of disclosure with specific reference to the particular Section or subsection of this
Agreement to which the information in the Parent Disclosure Letter and RMT Partner Disclosure
Letter, as applicable, relates; provided, however, that any information set forth in one Section of
such disclosure letter will be deemed to apply to each other Section or subsection thereof to which
its relevance is reasonably apparent on its face.
IX. DEFINITIONS
For purposes of this Agreement, the following terms, when utilized in a capitalized form, will
have the following meanings:
“Action” has the meaning given to such term in the Separation Agreement.
“Affiliate” has the meaning given to such term in the Separation Agreement.
“Agreement” has the meaning set forth in the preamble.
“Amendment Proposal” has the meaning set forth in Section 1.03.
“Antitrust Laws” means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the
HSR Act, the Federal Trade Commission Act and all other Laws that are designed or intended to
prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint
of trade.
“Assets” has the meaning given to such term in the Separation Agreement.
“Audited Statements” has the meaning set forth in Section 3.11.
“Benefits Continuation Period” has the meaning set forth in Section 5.15(b).
“Business Day” has the meaning given to such term in the Separation Agreement.
“Business Employees” has the meaning set forth in Section 5.15(a).
“Business Transfer Time” has the meaning given to such term in the Separation
Agreement.
“Certificate of Merger” has the meaning set forth in Section 1.01(c).
49
“Clean-Up Spin Off” has the meaning given to such term in the Separation Agreement.
“Closing” has the meaning set forth in Section 1.01(b).
“Closing Date” has the meaning set forth in Section 1.01(b).
“Code” has the meaning given to such term in the Separation Agreement.
“Coffee Business” has the meaning assigned to such term in the Separation Agreement.
“Coffee Business Compensation And Benefit Plans” has the meaning set forth in
Section 3.10(a).
“Continuing Employee List” has the meaning set forth in Section 5.15(a).
“Coffee Business MAE” means any circumstance, change, development, condition or event
that, individually or in the aggregate, has a material adverse effect on the business, financial
condition or results of operations of the Coffee Business taken as a whole over a period of more
than two full fiscal years beginning with the fiscal year commencing July 1, 2008; provided,
however, that any such effect resulting or arising from or relating to any of the following matters
will not be considered when determining whether a Coffee Business MAE has occurred or would
reasonably be expected to occur: (i) any conditions in the industry in which the Coffee Business
competes in general; (ii) any conditions in the United States general economy or the general
economy in other geographic areas in which the Coffee Business operates; (iii) political
conditions, including acts of war (whether or not declared), armed hostilities and terrorism, or
developments or changes therein; (iv) any conditions resulting from natural disasters; (v)
compliance by Parent and Folgers with their covenants in this Agreement; (vi) the failure of the
financial or operating performance of the Coffee Business to meet internal forecasts or budgets for
any period prior to, on or after the date of this Agreement (but the underlying reason for the
failure to meet such forecasts or budgets may be considered); (vii) any action taken or omitted to
be taken by or at the request or with the consent of RMT Partner; (viii) effects or conditions
resulting from the announcement of this Agreement or the transactions contemplated hereby,
including any employee departures; (ix) any deterioration in the business, financial condition or
results of operations of the Coffee Business that occurs subsequent to the date hereof and prior to
the Effective Time and does not (A) arise out of any breach of this Agreement or the Separation
Agreement by Parent or Folgers, or (B) arise out of any extraordinary event of a nature described
in clauses (iii) or (iv) (and in which case, such extraordinary event shall be considered to the
extent that it disproportionately affects the Coffee Business as compared to similarly situated
businesses operating in the packaged take-home coffee business in the U.S.), or (C) arise out of a
product recall required under applicable Law of the Coffee Business’s products or out of a product
tampering event that involves tampering with the Coffee Business’s products (and in which case,
such recall or product tampering event shall be considered to the extent that it disproportionately
affects the Coffee Business as compared to similarly situated
50
businesses operating in the packaged
take-home coffee business in the U.S.); or (x) changes in Laws or accounting principles; provided,
further, that with respect to clauses (i), (ii), (iii), (iv) or (x), such matter will be considered
to the extent that it disproportionately affects the Coffee Business as compared to similarly
situated businesses operating in the packaged take-home coffee business in the U.S.
“Coffee Business Pension Plan” has the meaning set forth in Section 3.10(c).
“Commission” means the Securities and Exchange Commission.
“Compensation And Benefit Plans” has the meaning set forth in Section 3.10(a).
“Confidentiality Agreement” means the confidentiality agreement, dated April 24, 2008,
by and between Parent and RMT Partner.
“Constructive Termination” has the meaning set forth in Section 5.15(f).
“Continuing Employee” has the meaning set forth in Section 5.15(a).
“Contracts” has the meaning given to such term in the Separation Agreement.
“Daily VWAP” shall mean for any trading day the volume weighted average price on such
trading day of RMT Partner Common Stock on the New York Stock Exchange, as reasonably determined by
Parent by reference to Bloomberg L.P. screen “SJM.N <Equity> AQR” (or any successor page) or
any other widely-available calculation or trading data source.
“Delayed Date” has the meaning set forth in Section 5.15(a).
“Delayed Employee” has the meaning set forth in Section 5.15(a).
“Disclosing Party” has the meaning set forth in Section 5.04(b)(i).
“Dissenting Shares” has the meaning set forth in Section 2.09.
“DGCL” means the General Corporation Law of the State of Delaware.
“Distribution” has the meaning given to such term in the Separation Agreement.
“Effective Time” has the meaning set forth in Section 1.01(c).
“Employing Entity” has the meaning set forth in Section 5.15(a).
“Enforceability Exception” has the meaning set forth in Section 3.02.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Estimation Date” has the meaning set forth in Section 1.02(b)(ii).
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“Exchange Act” has the meaning given to such term in the Separation Agreement.
“Exchange Agent” has the meaning set forth in Section 2.02.
“Exchange Fund” has the meaning set forth in Section 2.02.
“Exchange Offer” has the meaning given to such term in the Separation Agreement.
“Exchange Ratio” has the meaning set forth in Section 1.02(a).
“Financial Statements” has the meaning set forth in Section 3.11.
“Folgers” has the meaning set forth in the preamble.
“Folgers Assets” has the meaning given to such term in the Separation Agreement.
“Folgers Common Stock” has the meaning given to such term in the Separation Agreement.
“Folgers Credit Facility” has the meaning given to such term in the Separation
Agreement.
“Folgers Entities” has the meaning given to such term in the Separation Agreement.
“Folgers Equity Interests” has the meaning set forth in Section 3.05.
“Folgers Form 10/S-4” has the meaning set forth in Section 5.08.
“Folgers Governmental Approvals” has the meaning given to such term in the Separation
Agreement.
“Folgers Group” has the meaning given to such term in the Separation Agreement.
“Folgers Liabilities” has the meaning given to such term in the Separation Agreement.
“Folgers Material Contract” has the meaning set forth in Section 3.03.
“Folgers Stock Issuance” has the meaning given to such term in the Separation
Agreement.
“Folgers Transfer” has the meaning given to such term in the Separation Agreement.
“Fully Diluted Basis” has the meaning set forth in Section 1.02(b)(i).
52
“GAAP” means United States generally accepted accounting principles, consistently
applied.
“Governmental Approval” has the meaning given to such term in the Separation
Agreement.
“Governmental Authority” has the meaning given to such term in the Separation
Agreement.
“HSR Act” has the meaning set forth in Section 3.03.
“Information” has the meaning set forth in Section 5.04(a).
“Intellectual Property” has the meaning given to such term in the Separation
Agreement.
“Intellectual Property Matters Agreement” has the meaning given to such term in the
Separation Agreement.
“Intended Tax-Free Treatment” means that (i) the Folgers Transfer, taken together with
the Distribution, qualify as a tax-free reorganization pursuant to Section 368(a)(1)(D) of the
Code, (ii) the Distribution, as such, qualifies as a distribution of Folgers stock to Parent
stockholders pursuant to Section 355 of the Code, pursuant to which no gain or loss should be
recognized for federal income tax purposes, except to the extent of cash received in lieu of
fractional shares, and (iii) the Merger qualifies as a tax-free reorganization pursuant to Section
368(a) of the Code.
“Knowledge” means, in the case of an entity, the actual knowledge after due inquiry of
the executive officers of such entity as of the date of the representation, warranty or statement.
“Law” has the meaning given to such term in the Separation Agreement.
“Measurement Date” has the meaning set forth in Section 4.03(a).
“Merger” has the meaning set forth in Section 1.01(a).
“Merger Consideration” has the meaning set forth in Section 2.01(b).
“Merger Sub” has the meaning set forth in the preamble.
“Merger Sub Common Stock” has the meaning set forth in Section 4.03(b).
“NYSE” means the New York Stock Exchange.
“Ohio Corporation Law” means the General Corporation Law of the Ohio Revised Code.
53
“One-Step Spin-Off” has the meaning given to such term in the Separation Agreement.
“Order” has the meaning given to such term in the Separation Agreement.
“Other RMT Agreements” means the Separation Agreement, the Voting Agreement and the
other agreements and documents defined as “Ancillary Agreements” in the Separation Agreement.
“Outside Date” has the meaning set forth in Section 7.01(b)(ii).
“Parent” has the meaning set forth in the preamble.
“Parent Disclosure Letter” means the disclosure letter delivered by Parent to RMT
Partner immediately prior to the execution of this Agreement.
“Parent Welfare Plan” has the meaning set forth in Section 5.15(e).
“Parties” means Parent, Folgers, RMT Partner and Merger Sub.
“Patent” has the meaning set forth in the Separation Agreement.
“Permits” means all permits, approvals, licenses, authorizations, certificates,
rights, exemptions and Orders from Governmental Authorities.
“Permitted Encumbrances” means (a) Security Interests reflected in the Folgers balance
sheet delivered as part of the Audited Statements pursuant to Section 3.11 of this
Agreement; (b) Security Interests consisting of zoning or planning restrictions, easements, permits
and other restrictions or limitations on the use of real property or irregularities in title
thereto which do not materially interfere with the use of the property in the Coffee Business; (c)
Security Interests for current Taxes, assessments or similar governmental charges or levies not yet
due or which are being contested in good faith; (d) mechanic’s, workmen’s, materialmen’s,
carrier’s, repairer’s, warehousemen’s and similar other Security Interests arising or incurred in
the ordinary course of business; and (e) any Security Interests created in connection with the
Folgers Credit Facility or any arrangements ancillary thereto.
“Permitted Equity Awards” has the meaning set forth in Section 5.02(c)(iv).
“Person” has the meaning given to such term in the Separation Agreement.
“Proxy Statement” has the meaning set forth in Section 5.08.
“Qualifying Exchange Offer” means an Exchange Offer in which Parent offers to exchange
any and all of the shares of Folgers Common Stock issued to Parent in the Folgers Stock Issuance in
exchange for shares of Parent common stock.
“Qualifying RMT Partner Takeover Proposal” has the meaning set forth in Section
5.10(f)(i).
54
“Recapitalization” has the meaning given to such term in the Separation Agreement.
“Receiving Party” has the meaning set forth in Section 5.04(b).
“Record Date” has the meaning given to such term in the Separation Agreement.
“Reference Price” means the volume weighted average trading price of RMT Partner
Common Stock on the New York Stock Exchange during the five trading days preceding the Estimation
Date. For purposes of the calculation of Reference Price, if the RMT Partner Common Stock is not
trading on an “ex-” basis with respect to the Special Dividend with respect to any trading day used
in calculating the Reference Price, the per share price of the RMT Partner Common Stock for such
trading day will be reduced by the per-share value of the Special Dividend for purposes of such
calculation.
“Representatives” has the meaning set forth in Section 5.10(a).
“RMT 401(k) Plan” has the meaning set forth in Section 5.15(d).
“RMT Filings” means, collectively, the Folgers Form 10/S-4, the Schedule TO, the Proxy
Statement and the RMT Partner Form S-4.
“RMT Partner” has the meaning set forth in the preamble.
“RMT Partner Common Stock” has the meaning set forth in Section 4.03(a).
“RMT Partner Compensation and Benefit Plans” has the meaning set forth in Section
4.11(a).
“RMT Partner Disclosure Letter” means the disclosure letter delivered by RMT Partner
to Parent immediately prior to the execution of this Agreement.
“RMT Partner Equity Interests” has the meaning set forth in Section 4.03(a).
“RMT Partner Form S-4” has the meaning set forth in Section 5.08.
“RMT Partner MAE” means any circumstance, change, development, condition or event
that, individually or in the aggregate, has a material adverse effect on the business, financial
condition or results of operations of RMT Partner and its Subsidiaries taken as a whole over a
period of more than two full fiscal years beginning with the fiscal year commencing May 1, 2008;
provided, however, that any such effect resulting or arising from or relating to an of the
following matters will not be considered: (i) any conditions in the industry in which the RMT
Partner competes in general; (ii) any conditions in the United States general economy or the
general economy in other geographic areas in which the RMT Partner operates; (iii) political
conditions, including acts of war (whether or not declared), armed hostilities and terrorism, or
developments or changes therein; (iv) any conditions resulting from natural disasters; (v)
compliance by RMT Partner and Merger Sub with its covenants in this Agreement; (vi) the failure of
55
the financial or operating performance of the RMT Partner to meet internal forecasts or budgets for
any period prior to, on or after the date of this Agreement (but the underlying reason for the
failure to meet such forecasts or budgets may be considered); (vii) any action taken or omitted to
be taken by or at the request or with the consent of Parent; (viii) effects or conditions resulting
from the announcement of this Agreement or
the transactions contemplated hereby (including any employee departures); or (ix) changes in
Laws or accounting principles; provided, further, that with respect to clauses (i), (ii), (iii),
(iv) or (ix), such matter will be considered to the extent that it disproportionately affects the
RMT Partner as compared to similarly situated businesses operating in the same industry and
geographic areas as the RMT Partner operates.
“RMT Partner Material Contract” has the meaning set forth in Section 4.04.
“RMT Partner Options” has the meaning set forth in Section 4.03(a).
“RMT Partner Pension Plan” has the meaning set forth in Section 4.11(c).
“RMT Partner Preferred Stock” has the meaning set forth in Section 4.03(a).
“RMT Partner Right” has the meaning set forth in Section 4.03(a).
“RMT Partner Rights Agreement” has the meaning set forth in Section 4.03(a).
“RMT Partner SEC Filings” has the meaning set forth in Section 4.05(a).
“RMT Partner Series A Preferred Stock” has the meaning set forth in Section
4.03(a).
“RMT Partner Shareholder Approval” has the meaning set forth in Section
4.08(a).
“RMT Partner Shareholder Meeting” has the meaning set forth in Section 5.09.
“RMT Partner Shareholders” means the holders of RMT Partner Common Stock.
“RMT Partner Stock Issuance” has the meaning set forth in Section 2.01(b).
“RMT Partner Superior Proposal” has the meaning set forth in Section
5.10(f)(iii).
“RMT Partner Takeover Proposal” has the meaning set forth in Section
5.10(f)(ii).
“RMT Welfare Plan” has the meaning set forth in Section 5.15(e).
“Rule 145 Affiliates” has the meaning set forth in Section 5.13.
“Schedule TO” has the meaning set forth in Section 5.08.
“Securities Act” has the meaning given to such term in the Separation Agreement.
56
“Security Interest” has the meaning given to such term in the Separation Agreement.
“Separation Agreement” means the Separation Agreement in the form of Exhibit B
among Folgers, Parent and RMT Partner.
“Shortfall Amount” has the meaning set forth in Section 1.02(c).
“Special Dividend” has the meaning set forth in Section 5.02(c)(iii).
“Subsidiary” has the meaning given to such term in the Separation Agreement.
“Surviving Corporation” has the meaning set forth in Section 1.01(a).
“Surviving Covenant” has the meaning set forth in Section 8.01.
“Tax” has the meaning set forth in the Tax Matters Agreement.
“Tax Matters Agreement” has the meaning set forth in the Separation Agreement.
“Tax Return” has the meaning set forth in the Tax Matters Agreement.
“Temporary Employee” has the meaning set forth in Section 5.01(a).
“Trademarks” has the meaning set forth in the Separation Agreement.
“Trading Day” means any day on which there are sales of common stock on the NYSE
composite tape.
“Transactions” means the Folgers Transfer, the Recapitalization, the Distribution, the
Merger and the other transactions contemplated by this Agreement and the Other RMT Agreements.
“TSA” has the meaning set forth in the Separation Agreement.
“Unaudited Statements” has the meaning set forth in Section 3.11.
“Voting Agreement” means the agreement in the form attached hereto as Exhibit
C, between Parent and the RMT Partner Shareholders that are parties thereto.
“Xxxxxxxx Shareholders” means Xxxxx X. Xxxxxxxx, the Xxxxx X. Xxxxxxxx Trust, the H.
Xxxx Xxxxxxxx Trust and the Protected Trust and Exempt Trust FBO Xxxxx X. Xxxxxxxx.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and
year first above written.
THE PROCTER & XXXXXX COMPANY |
||||
By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxxxx | |||
Title: | Attorney-in-fact | |||
THE FOLGERS COFFEE COMPANY |
||||
By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxxxx | |||
Title: | Attorney-in-fact | |||
THE X.X. XXXXXXX COMPANY |
||||
By: | /s/ Xxxxxxx X. Xxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxx | |||
Title: | Chairman and Co-CEO | |||
MOON MERGER SUB, INC. |
||||
By: | /s/ Xxxxxxx X. Xxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxx | |||
Title: | Co-Chief Executive Officer | |||
[Signature
Page to Transaction Agreement]