Agreement and Plan of Corporate Separation
AGREEMENT made September 22, 1995, among Xxxxxxxxx Resources, Inc., a
Delaware corporation ("ARI"), Xxxxxxxxx Holding Company, Inc., a Delaware
corporation ("AHC"), and Xxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx (collectively,
the "ARI Shareholders").
WHEREAS, ARI, through AHC, its wholly owned subsidiary, owns all of
the issued and outstanding shares of common stock of Belize River Fruit Co.
("Belize"), and AHC and Belize own all of the issued and outstanding shares
of common stock of Xxxxxx Creek Farm Limited ("Xxxxxx Creek")(such shares
of Belize and Xxxxxx Creek are collectively referred to as the "Company
Shares"). Belize and Xxxxxx Creek are each a "Company," and collectively,
the "Companies"; and
WHEREAS, in furtherance of its strategy to concentrate its resources
on its environmental businesses, ARI, and AHC, has determined that it is in
its best interests to divest certain of its subsidiaries engaged in non-
environmental businesses, including the Companies; and
WHEREAS, the ARI Shareholders are shareholders of ARI and are fully
informed of all matters relating to the Companies, having served as
directors and/or officers of the Companies; and
WHEREAS, ARI and AHC desire to split-off and distribute to the ARI
Shareholders, and the ARI Shareholders desire to acquire, all of the
Company Shares, in exchange for 1,000,000 shares of the issued and
outstanding common stock of ARI (the "ARI Shares") currently owned by the
ARI Shareholders; and
WHEREAS, the parties intend the exchange transaction to qualify, for
Federal income tax purposes, as a tax-free split-off under Section 355 of
the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, the parties hereto hereby agree as follows:
1. TRANSFER OF COMPANY AND ARI SHARES. On the terms and subject to the
conditions of this Agreement, on the Closing Date (as hereafter defined),
ARI will distribute, transfer and deliver, or cause to be distributed,
transferred and delivered to the ARI Shareholders, free and clear of all
liens, claims and encumbrances of any kind, all of the Company Shares in
exchange for 1,000,000 ARI Shares owned by the ARI Shareholders, subject to
adjustment to account for any stock dividends, stock splits, or other
similar change in the number of ARI Shares outstanding as of the Closing
Date (the "Exchange"). Schedule 1 attached hereto sets out the number of
ARI Shares to be transferred and the number of Company Shares to be
received in exchange by each ARI Shareholder.
1. CLOSING. The closing of the transactions contemplated by this
Agreement shall occur on October 23, 1995 or as soon thereafter as all of
the conditions in Section 3 have been satisfied or waived, provided,
however, that if the Closing shall not have occurred on or before November
6, 1995, either party shall have the right to terminate all of its rights
and obligations hereunder (the "Closing Date").
3. CONDITIONS TO CLOSING.
(a) ARI SHAREHOLDERS' OBLIGATION. The obligation of the ARI
Shareholders to consummate the transactions contemplated by this Agreement
is subject to the satisfaction (or waiver by the ARI Shareholders) as of
the Closing of the following conditions:
(i) The representations and warranties of AHC and ARI made in
this Agreement shall be true and correct in all material respects as of the
date hereof and on and as of the Closing, as though made on and as of the
Closing Date, and AHC and ARI shall have performed or complied in all
material respects with all obligations and covenants required by this
Agreement to be performed or complied with by AHC and ARI by the time of
the Closing.
(ii) No injunction or order of any court or administrative agency
of competent jurisdiction shall be in effect, and no statute, rule or
regulation of any governmental authority or instrumentality shall have been
promulgated or enacted, as of the Closing which restrains or prohibits the
transaction contemplated herein.
(iii) No action, suit or other proceeding by any person to
restrain or prohibit the transaction contemplated herein or seeking
material damages in connection therewith shall be pending which in the
written opinion of the ARI Shareholders' counsel is reasonably likely to
succeed.
(iv) The waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx") shall have expired or been
terminated.
(v) The conditions to the Buyer's obligations under that Stock
Purchase Agreement among AHC, ARI, Xxxxxxxxx Acquisition Company, Inc., the
ARI Shareholders and Xxxxxx Xxxxxxxxx shall have been satisfied or
waived.
(b) ARI'S AND AHC'S OBLIGATION. The obligation of ARI and AHC
to consummate the transactions contemplated by this Agreement is subject to
the satisfaction (or waiver by ARI and AHC) as of the Closing of the
following conditions:
(i) The representations and warranties of the ARI
Shareholders made in this Agreement shall be true and correct in all
material respects as of the date hereof and on and as of the Closing, as
though made on and as of the Closing Date, and the ARI Shareholders shall
have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or
complied with by the ARI Shareholders by the time of the Closing;
(ii) No injunction or order of any court or administrative agency
or instrumentality shall be in effect, and no statute, rule or regulation
of any governmental authority of competent jurisdiction shall have been
promulgated or enacted, as of the Closing which restrains or prohibits the
transaction contemplated herein.
(iii) No action, suit or other proceeding by any person to
restrain or prohibit the transaction contemplated herein or seeking
material damages in connection therewith shall be pending which in the
written opinion of ARI's and AHC's counsel is reasonably likely to succeed.
(iv) The waiting period under the HSR Act shall have expired or
been terminated.
(v) ARI and AHC shall have been released from all
guarantees, if any, given for the benefit of the Companies.
(vi) ARI and AHC shall have received all necessary approvals of
the transactions contemplated by this Agreement from the Boards of
Directors of ARI and AHC, and where applicable, the Companies.
(vii) ARI shall have received an opinion from special Delaware
counsel to the effect that the transactions contemplated in this Agreement
do not require the approval of the stockholders of ARI under Delaware
General Corporation Law.
(viii) The conditions to AHC's obligations under that Stock
Purchase Agreement among AHC, ARI, Xxxxxxxxx Acquisition Company, Inc., the
ARI Shareholders and Xxxxxx Xxxxxxxxx shall have been satisfied or
waived.
4. REPRESENTATIONS AND WARRANTIES OF ARI AND AHC. ARI and AHC
jointly and severally represent and warrant that:
(a) Each of ARI and AHC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
full power and authority to enter into this Agreement and perform its
obligations hereunder.
(b) The execution, delivery and performance of this Agreement by ARI
and AHC have been duly authorized by all requisite corporate action and
will not conflict with or result in a violation of or default (with or
without notice or the lapse of time or both) under, or give rise to a lien,
encumbrance or right of termination, cancellation or acceleration of an
obligation under, the certificate or articles of incorporation or bylaws of
ARI, AHC or any Company, any material note, bond, mortgage, indenture or
deed of trust to which ARI, AHC or any Company is a party, or any judgment,
order or decree or material statute, law, ordinance, rule or regulation
applicable to ARI, AHC or any Company of any of their respective assets or
property. This Agreement has been duly executed and delivered by ARI and
AHC and constitutes a valid and binding obligation of ARI and AHC
enforceable against them in accordance with its terms. No consent or
approval of, or filing with, any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or
any other third party is required to be obtained or made by or with respect
to ARI, AHC or either Company or any of their respective affiliates in
connection with the execution and delivery of this Agreement or the
performance of the transactions contemplated hereby other than compliance
with and filings under the HSR Act and the Securities and Exchange Act of
1934.
(c) Each Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation. Other than the Company Shares identified in Exhibit A,
neither Company is obligated to or bound by any agreement pursuant to which
it may become obligated to offer, issue or sell any of its security.
(d) The Company Shares to be transferred to the ARI Shareholders
under Section 1 hereof are, and on the Closing Date will be, all of the
issued and outstanding stock of the Companies, fully paid and
nonassessable, and free and clear of any liens, claims, charges,
encumbrances, security interests, options and restrictions of any kind.
Other than this Agreement, the Company Shares are not subject to any voting
trust agreement or other contract, agreement, arrangement, commitment or
understanding, including any such agreement, arrangement, commitment or
understanding restricting or otherwise relating to the voting, dividend
rights or disposition of the Company Shares.
(e) To the knowledge of the directors and executive officers of ARI
and AHC (other than the ARI Shareholders), the Companies have conducted
business only in the ordinary course and have not made any payments to ARI
or AHC except in the ordinary course (whether in the form of
distributions, management fees, tax sharing payments or otherwise) since
June 30, 1995.
5. REPRESENTATIONS AND WARRANTIES OF THE ARI SHAREHOLDERS. The ARI
Shareholders jointly and severally represent and warrant that:
(a) This Agreement has been duly executed and delivered by the ARI
Shareholders and constitutes a valid and binding obligation of the ARI
Shareholders enforceable against them in accordance with its terms. No
consent or approval of, or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, or any other third party is required to be obtained or made by or
with respect to the ARI Shareholders in connection with the execution and
delivery of this Agreement or the performance of the transactions
contemplated hereby other than compliance with and filings under the HSR
Act and the Securities and Exchange Act of 1934.
(b) The 1,000,000 ARI Shares to be transferred by them to ARI under
Section 1 hereof are, and on the Closing Date will be, fully paid and
nonassessable and free and clear of any liens or encumbrances.
(c) The Company Shares are being acquired by the ARI Shareholders for
investment and not for the purpose of engaging in a distribution. The ARI
Shareholders acknowledge that the transferability of the Company Shares
will be restricted under the Securities Act of 1933 and applicable state
securities laws, and that the certificates representing the Company Shares
will be a legend to that effect.
6. COVENANTS OF ARI AND AHC. ARI and AHC covenant and agree as
follows:
Except as expressly permitted by the terms of this Agreement, from the
date hereof to the Closing, ARI and AHC will cause the business of each
Company to be conducted in the ordinary course in substantially the same
manner as presently conducted and will make all reasonable efforts
consistent with past practices to preserve its relation- ships with
customers, employees, suppliers and others with whom such Company deals.
In addition, except as otherwise expressly permitted by the terms of this
Agreement, ARI and AHC will not permit any Company to do any of the
following without the prior written consent of the ARI Shareholders
respectively:
(i) amend its Articles of Incorporation or By-laws;
(ii) declare or pay any dividend or make any other distributions
to its shareholders whether or not upon or in respect of any shares of its
capital stock except to the working extent that the capital of the
Companies on a combined basis as of the Closing Date shall not be greater
than zero;
(iii) redeem or otherwise acquire any shares of its
capital stock or issue any capital stock or any option, warrant or right
relating thereto or any securities convertible into or exchangeable for
any shares of capital stock;
(iv) grant to any employee, officer or director any increase in
compensation or benefits, or enter into any employment contract or adopt,
amend or terminate any profit sharing, compensation, bonus, deferred
compensation, pension, retirement or other employee benefit plan,
agreement, fund, trust or arrangement, for the benefit or welfare of any
employee;
(v) incur or assume any liabilities, capitalized leases,
operating leases, bonds, obligations or indebtedness for borrowed money or
guarantee any such liabilities, obligations or indebtedness;
(vi) permit, allow or suffer any of its assets to be subjected to
any mortgage, pledge, lien, encumbrance, restriction or charge of any kind;
(vii) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value;
(viii) except as contemplated by this Agreement, loan or advance
any amount to, or sell, transfer or lease any of its assets to, or enter
into any agreement or arrangement with either ARI or any of its affiliates;
(ix) make any change in any method of accounting or accounting
practice or policy other than those required by generally accepted
accounting principles;
(x) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any assets (other than inventory) which are material individually,
or in the aggregate, to such Company;
(xi) make or incur any capital expenditure or expenditures which,
individually, is in excess of $5,000 or, in the aggregate, are in excess of
$25,000;
(xii) sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets, except in the ordinary
course of business consistent with past practice;
(xiii) enter into any lease of real property;
(xiv) hire or terminate any employee of the Companies without
cause, or pay or agree to pay any severance or termination pay with respect
thereto; or
(xv) agree, whether in writing or otherwise, to do any of the
foregoing.
ARI and AHC shall not, and shall not permit any Company to, take
any action that would, or that could reasonably be expected to, result in
(i) any of its representations and warranties set forth in this Agreement
becoming untrue, or (ii) any of the conditions to the obligations of the
parties not being satisfied.
6. COVENANTS OF THE ARI SHAREHOLDERS. The ARI Shareholders shall
not take any action that would, or that could reasonably be expected to,
result in (i) any of their representations and warranties set forth in this
Agreement becoming untrue in any material respect, or (ii) any of the
conditions to their obligations under this Agreement not being satisfied in
any material respect;
7. TAX INDEMNIFICATION.
(a) ARI shall indemnify the ARI Shareholders and their affiliates
(including each Company) and each of their respective officers, directors,
employees and agents and hold them harmless from (i) all liability for
Taxes of any Company for the Pre-Closing Tax Period and (ii) all liability
(as a result of Treasury Regulation 1.1502-6 or otherwise) for Taxes of any
Affiliated Group or any member of any Affiliated Group and (iii) all
liability for reasonable legal fees and expenses attributable to any item
in clause (i) and (ii) above.
(b) The ARI Shareholders shall, and shall cause each Company to,
indemnify ARI and its affiliates and each of their respective officers,
directors, employees and agents and hold them harmless from (i) all
liability for Taxes of each such Company (other than Taxes described in
clauses (a)(i) or (a)(ii) of this Section 7) and (ii) all liability for
reasonable legal fees and expenses attributable to any item in clause (i)
above.
(c) In the case of any taxable period that includes (but does not end
on) the Closing Date (each a "Straddle Period"):
(i) real, personal and intangible property Taxes ("Property
Taxes") of any Company attributable to the Pre-Closing Tax Period shall be
equal to the amount of such Property Taxes for the entire Straddle Period
multiplied by a fraction, the numerator of which is the number of days
during the Straddle Period that are in the Pre-Closing Tax Period and the
denominator of which is the number of days in the Straddle Period; and
(ii) the Taxes of any Company (other than Property Taxes and
severance Tax) attributable to the Pre-Closing Tax Period shall be computed
as if such taxable period ended as of the close of business on the Closing
Date.
ARI's indemnity obligation in respect of Taxes for a Straddle Period that
are ARI's responsibility under this Section 7 shall initially be effected
by its payment to the relevant Company of the excess of (x) such Taxes for
the Pre-Closing Tax Period over (y) the amount of such Taxes paid by ARI or
any of its affiliates (other than any Company) at any time plus the amount
of such Taxes paid or accrued by any Company on or prior to the Closing
Date. ARI shall initially pay such excess to the relevant Company within
five days prior to the due date of any return, report or form with respect
to Straddle Period Taxes. If the amount of such Taxes paid by ARI or any
of its affiliates (other than any Company) at any time plus the amount of
such Taxes paid or accrued by any Company on or prior to the Closing Date
exceeds the amount payable by ARI pursuant to the preceding sentence, such
Company shall pay to ARI the amount of such excess (a) in the case of
Property Taxes, at the Closing and (b) in all other cases, within five days
prior to the due date of the return, report or form with respect to the
final liability for such Taxes is required to be filed.
(d) The payments to be made pursuant to this Section 7 by any person
with respect to Taxes shall be appropriately adjusted to reflect any final
determination with respect to such Taxes.
(e) For purposes of this Section 7, (A) "Tax" or "Taxes" shall mean
all Federal, state, local and foreign taxes, charges, fees, levies and
assessments, and any other governmental impositions of any kind whatsoever,
which may be imposed, no matter how measured or applied, including all
interest, penalties and additions imposed with respect to such amounts; (B)
"Pre-Closing Tax Period" shall mean all taxable periods ending on or before
the Closing Date and the portion ending on the Closing Date of any taxable
period that includes (but does not end on) such day; and (C) "Affiliated
Group" shall mean each affiliated group (within the meaning of Section 1504
of the Code) or consolidated, combined or unitary group (under any state or
local Tax law) of which any such Company is or has been a member and which
ARI is the common parent within the meaning of Section 1504 of the Code or
any analogous provision of state or local Tax law.
8. INDEMNIFICATION BY ARI. ARI shall indemnify the ARI Shareholders
and hold them harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) suffered or incurred by any
such indemnified party (other than any relating to Taxes, for which
indemnification provisions are set forth in Section 7) to the extent
arising from (i) any breach of any representation or warranty of ARI and
AHC contained in this Agreement, certificate, instrument or other document
delivered by it pursuant hereto, or (ii) any breach of any covenant of ARI
and AHC contained in this Agreement.
9. INDEMNIFICATION BY THE ARI SHAREHOLDERS. The ARI Shareholders
shall indemnify ARI, its affiliates, and each of their respective officers,
directors, employees and agents and hold them harmless from any loss,
liability, claim, damage or expense (including reasonable legal fees and
expenses) suffered or incurred by any such indemnified party (other than
any relating to Taxes, for which indemnification provisions are set forth
in Section 7) to the extent arising from (i) any breach of any
representation or warranty of the ARI Shareholders contained in this
Agreement, certificate, instrument or other document delivered by it
pursuant hereto, or (ii) any breach of any covenant of the ARI shareholders
contained in this Agreement.
10. SURVIVAL OF REPRESENTATIONS. The representations and warranties
in this Agreement and in any other document delivered in connection
herewith shall survive the Closing solely for purposes of Sections 8 and 9
of this Agreement and (i) in the case of representations, other than those
contained in Sections 4(a), (b), (c) and (d) and in Sections 5(a)-(c),
shall terminate at the close of business one year following the Closing
Date, (ii) in the case of the representations contained in Sections 4(a)-
(d) and Sections 5(a)-(c) shall not terminate.
11. FURTHER AGREEMENTS.
(a) AMENDMENTS. No amendment to this Agreement shall be effective
unless it shall be in writing and signed by both parties hereto. Each
party acknowledges that no officer, employee, agent or other representative
of the other party has authority, actual or apparent, to bind such other
party to any amendment or other modification of this Agreement, except
pursuant to a written document properly executed by an authorized
representative of such other party.
(b) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been
signed by each of the parties and delivered to the other party. For
purposes of this Section 11, a counterpart shall be deemed delivered when
transmitted by facsimile and upon receipt of confirmation of such
transmission by the delivering party.
(c) ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules attached hereto, constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to
such subject matter.
(d) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Kentucky.
(e) TAX RETURNS. ARI shall file any Tax returns in a manner
consistent with the stated intent of this Agreement to effect a tax-free
split-off under Section 355 of the Code.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
XXXXXXXXX HOLDING COMPANY, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name Xxxxxx Xxxxxxxxx
Title Chairman
XXXXXXXXX RESOURCES, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name Xxxxxx Xxxxxxxxx
Title Chairman
/s/ Xxxxx Xxxxxxxxx
XXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxxxxx
XXXXX XXXXXXXXX
297.14361
258K142.2
SCHEDULE 1
(a) Title to Shares of Each Company. Seller is the record and
beneficial owner of a number of shares of each Company set forth opposite
its name below. Each company is duly organized in the sate listed and
qualified as a foreign corporation, if any, in the state(s) listed.
State of Incorporation
Company (Qualification)
Xxxxxx Creek Farm Limited Belize
Belize River Fruit Co. Kentucky
(b) The authorized capital stock of each Company consists solely of
the following:
Company
Xxxxxx Creek Farm Limited 49,999 shares issued to Belize River
Fruit Co.
1 share issued to XXX
Xxxxxx Xxxxx Xxxxx Xx. 0000 shares of stock authorized
No par value
100 shares issued and outstanding
ARI Shareholders' ARI Shares
Xxxxx Xxxxxxxxx 850,000
Xxxxx Xxxxxxxxx 150,000
