EXHIBIT 2.1
FORM OF SEPARATION AND DISTRIBUTION AGREEMENT
dated as of
March __, 1998
between
▇▇▇▇▇▇▇▇ SOUP COMPANY
and
VLASIC FOODS INTERNATIONAL INC.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...................................................... 1
Section 1.1 Definitions................................................. 1
ARTICLE II THE DISTRIBUTION................................................. 10
Section 2.1 Cooperation Prior to the Distribution....................... 10
Section 2.2 CSC Board Action; Conditions Precedent to the Distribution.. 11
Section 2.3 The Distribution............................................ 11
Section 2.4 Fractional Shares........................................... 12
ARTICLE III CONVEYANCE OF CERTAIN ASSETS; ASSUMPTION OF CERTAIN
LIABILITIES; CERTAIN OTHER ARRANGEMENTS.......................... 12
Section 3.1 Internal Transfer Transactions.............................. 12
Section 3.2 Conveyance of Assets; Assumption of Liabilities............. 12
Section 3.3 Financing Arrangements...................................... 15
Section 3.4 Conduct of Spinco Pending Distribution...................... 15
Section 3.5 Director Resignations....................................... 15
Section 3.6 Settlement of Intercompany Accounts......................... 15
Section 3.7 Termination of Intercompany Agreements...................... 15
Section 3.8 Guaranteed Spinco Liabilities............................... 16
Section 3.9 Covenants Regarding Domestic Grocery Business of CSC........ 16
Section 3.10 The Non-U.S. Plan........................................... 17
Section 3.11 Corporate Name.............................................. 17
ARTICLE IV MUTUAL RELEASES.................................................. 19
Section 4.1 Release of Pre-Distribution Claims.......................... 19
ARTICLE V INDEMNIFICATION.................................................. 20
Section 5.1 Spinco Indemnification of the CSC Group..................... 20
Section 5.2 CSC Indemnification of Spinco Group......................... 20
Section 5.3 Insurance and Third Party Obligations....................... 21
Section 5.4 Notice and Payment of Claims................................ 21
Section 5.5 Notice and Defense of Third-Party Claims.................... 21
Section 5.6 Exclusive Remedy; Waiver of Jury Trial...................... 22
Section 5.7 Existing Claims............................................. 22
ARTICLE VI INSURANCE........................................................ 23
Section 6.1 Insurance Policies and Rights............................... 23
Section 6.2 Claims...................................................... 24
Section 6.3 Administration and Reserves................................. 25
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Section 6.4 Retrospectively-Rated Premium Adjustments................... 25
Section 6.5 Allocation of Insurance Proceeds; Cooperation............... 25
Section 6.6 Reimbursement of Expenses................................... 26
Section 6.7 Insurer Insolvency or Coverage Controversy.................. 26
Section 6.8 Direct Responsibility for Claims............................ 26
Section 6.9 Assistance, Waiver of Conflict and Shared Defense........... 27
ARTICLE VII SERVICES AND RELATED MATTERS..................................... 27
Section 7.1 Performance of Services..................................... 27
Section 7.2 Independence................................................ 27
ARTICLE VIII CERTAIN OTHER MATTERS............................................ 27
Section 8.1 Benefits Agreement.......................................... 27
Section 8.2 Tax Matters................................................. 27
Section 8.3 Intellectual Property Matters............................... 27
Section 8.4 Treatment of Assets Transferred and Liabilities Assumed..... 27
ARTICLE IX INFORMATION...................................................... 28
Section 9.1 Access to Information....................................... 28
Section 9.2 Litigation Cooperation...................................... 28
Section 9.3 Privilege Matters........................................... 28
Section 9.4 Reimbursement............................................... 29
Section 9.5 Retention of Records........................................ 29
Section 9.6 Confidentiality............................................. 29
ARTICLE X INTEREST ON PAYMENTS............................................. 30
Section 10.1 Interest on Payments........................................ 30
ARTICLE XI GENERAL.......................................................... 30
Section 11.1 Termination................................................. 30
Section 11.2 Effect of Termination....................................... 30
Section 11.3 Expenses.................................................... 30
Section 11.4 Notices..................................................... 30
Section 11.5 Amendment and Waiver........................................ 31
Section 11.6 Entire Agreement............................................ 31
Section 11.7 Survival.................................................... 31
Section 11.8 Parties in Interest......................................... 31
Section 11.9 Further Assurances and Consents............................. 32
Section 11.10 Severability................................................ 32
Section 11.11 Governing Law............................................... 32
Section 11.12 Counterparts................................................ 32
Section 11.13 Assignment.................................................. 32
Section 11.14 Disputes.................................................... 32
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TABLE OF EXHIBITS
Exhibit A - Internal Transfer Transactions
Exhibit B - Spinco Balance Sheet
TABLE OF SCHEDULES
Schedule 1.1 - Specified Collective Bargaining Agreements
Schedule 2.1(i) - Non-U.S. Plan
Schedule 3.7(b)(ii) - Certain Intercompany Agreements
SEPARATION AND DISTRIBUTION AGREEMENT
-------------------------------------
THIS IS A SEPARATION AND DISTRIBUTION AGREEMENT, dated as of March
___, 1998 (this AGREEMENT), by and between ▇▇▇▇▇▇▇▇ Soup Company, a New Jersey
corporation (together with its successors and permitted assigns, CSC), and
Vlasic Foods International Inc., a New Jersey corporation (together with its
successors and permitted assigns, SPINCO).
Background
----------
A. Spinco is presently a wholly-owned subsidiary of CSC.
B. The Board of Directors of CSC has determined that it is in the
best interest of CSC and the shareowners of CSC to make a distribution (the
DISTRIBUTION) to holders of CSC Common Stock (as defined herein), on the terms
set forth in this Agreement, of all of the outstanding shares of Spinco Common
Stock (as defined herein) at the rate of one share of Spinco Common Stock for
every ten shares of CSC Common Stock outstanding as of the Record Date (as
defined herein).
C. It is the intention of the parties that the Distribution will not
be taxable to the shareowners of CSC pursuant to Section 355 of the Code (as
defined herein).
D. The parties have determined that it is necessary and desirable to
set forth in this Agreement the principal corporate transactions required to
effect the Distribution and other terms and provisions that will govern certain
matters following such Distribution.
E. In connection with the Distribution, CSC and Spinco, and members
of their respective Groups, also intend to enter into the Benefits Agreement,
the Intellectual Property Agreements, the Tax Agreement, the Transition Services
Agreement and the other Ancillary Agreements (as such terms are defined herein)
to effect the separation of Spinco and CSC and to govern the relationship of
Spinco and CSC after the Distribution with respect to the matters covered by
such agreements.
Terms
-----
THEREFORE, in consideration of the foregoing premises and the mutual
agreements and covenants contained in this Agreement, and intending to be
legally bound, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used herein, the following terms have the
following meanings:
ACTION means any claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, governmental or other regulatory or
administrative agency or commission or any other tribunal.
AFFILIATE means a Person that controls, is controlled by, or is under
common control with such Person. As used herein, CONTROL means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through ownership of voting
securities or other interests, by contract or otherwise.
ANCILLARY AGREEMENTS means all of the written agreements, instruments,
understandings, assignments and other arrangements entered into in connection
with the transactions contemplated hereby, including, without limitation, the
Benefits Agreement, the Intellectual Property Agreement, the Tax Agreement and
the Transition Services Agreement, and the agreements and instruments entered
into in connection with the Internal Transfer Transactions.
ASSETS means any and all assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or other
third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or financial
statements of any Person, including, without limitation, the following:
(i) all accounting and other books, records and files, including
audit files, whether in paper, microfilm, microfiche, computer tape or
disc, magnetic tape or any other form;
(ii) all apparatus, computers and other electronic data processing
equipment, fixtures, trade fixtures, machinery, equipment, capital and
other spares, furniture, office equipment, automobiles, trucks and
aircraft, rolling stock, vessels, motor vehicles, trailers and other
transportation equipment, special and general tools, test devices,
prototypes and models and any other tangible personal property;
(iii) all inventories of materials, raw materials, supplies, work-in-
process, consigned goods, finished goods, packaging and all products and
product samples;
(iv) all interests in real property of whatever nature, including
easements, leases and licenses, whether as owner, mortgagee or holder of a
Security Interest in real property, lessor, sublessor, lessee, sublessee or
otherwise;
(v) all buildings and other improvements to real property and all
leasehold improvements;
(vi) all bonds, notes, debentures, stock or other securities issued
by any Subsidiary or any other Person, all loans, advances or other
extensions of credit or capital contributions to any Subsidiary or any
other Person, all certificates of deposit, banker's acceptances,
certificates of interest or participation in profit sharing agreements,
collateral trust certificates, preorganization certificates or
subscriptions, transferable shares, investment contracts, voting trust
certificates, fractional undivided interests in oil, gas or other mineral
rights, puts, calls, straddles, options and other securities of any kind;
(vii) all license agreements, leases of personal property and other
leases, open purchase orders for raw materials, supplies, parts or
services, unfilled orders for the manufacture or sale of products, other
sales or purchase agreements, other commitments or arrangements, permits,
distribution arrangements, and other contracts, agreements, or commitments;
(viii) all deposits, letters of credit and performance and surety
bonds;
(ix) all technical information, data, specifications, research and
development information, engineering drawings, operating and maintenance
manuals, and materials and
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analyses prepared by consultants and other third parties; environmental
clean-up technology, safety and industrial hygiene methods and technology;
(x) all technology, domestic and foreign patents, statutory,
common law and registered copyrights, trade names, registered and
unregistered trademarks, service marks, service names, trade styles,
product bar codes and associated goodwill, and registrations and
applications for any of the foregoing, trade secrets, inventions, recipes,
formulas, processes, designs, know-how, or other confidential or
proprietary information and licenses from third Persons granting the right
to use any of the foregoing and other rights in, to and under the foregoing
(it being understood that any transfer of Assets described in this clause
(x) shall be made pursuant to the Intellectual Property Agreements);
(xi) all computer applications, programs and other software and
databases (including all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions,
improvements, enhancements, updates and accessions thereto), all technical
manuals and documentation made in connection with the foregoing, and the
right to ▇▇▇ for past infringement thereof, and all licenses and rights
with respect to the foregoing or of like nature, including operating
software, network software, design software, design tools, systems
documentation and instructions;
(xii) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists, customer and
vendor data, correspondence and lists, product literature, artwork, design,
development and manufacturing files, vendor and customer drawings,
formulations and specifications, quality records and reports, lists of
advertisers, records pertaining to advertisers and accounts, and other
books, records, studies, surveys, reports, plans and document forms and any
other business information;
(xiii) all prepayments or prepaid expenses, trade accounts and other
accounts and notes receivable, deferred taxes and all other current assets;
(xiv) the right to receive mail, payments on accounts receivable and
other communications;
(xv) all rights under contracts, agreements, warranties or
guaranties, all claims or rights or judgments against any Person, all
rights in connection with any bids or offers and all claims, choses in
action, rights of recovery and rights of set-off or similar rights, whether
accrued or contingent, and refunds and deposits;
(xvi) all rights under insurance policies and all rights in the
nature of insurance, indemnification or contribution;
(xvii) all licenses, permits, approvals and authorizations which have
been issued by any governmental authority;
(xviii) advertising and marketing materials and other printed or
written materials;
(xix) employee contracts, including any rights thereunder to
restrict an employee or former employee from competing in certain respects,
and personnel and medical files and records;
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(xx) cash, cash equivalents, bank accounts, lock boxes and other
deposit arrangements; and
(xxi) interest rate, currency, commodity or other swap, collar, cap,
floor, or other hedging or similar agreements or arrangements.
ASSUMED SENIOR DEBT FACILITY AGREEMENTS means the Credit Agreement,
dated as of February 20, 1998, among CSC, Spinco and ▇▇▇▇▇▇ Guaranty Trust
Company of New York and the other parties thereto (and any ancillary agreements
thereto).
BENEFITS AGREEMENT means the Employee Benefits and Compensation
Agreement entered into on or prior to the Distribution Date between CSC and
Spinco, as amended from time to time.
CERCLA means the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601 et. seq.), as amended.
CLAIMS ADMINISTRATION means the processing of claims made under the
Insurance Policies, including the reporting of claims to the insurance carrier,
management and defense of claims and providing for the appropriate releases upon
settlement of claims.
CODE means the Internal Revenue Code of 1986, as amended.
COMMISSION means the United States Securities and Exchange Commission.
CONTINGENT GAIN means any claim or other right of CSC or Spinco or any
member of their respective Groups, whenever arising, against any Person other
than CSC or Spinco or any member of their respective Groups, if and to the
extent that (i) such claim or right has accrued as of the Distribution Date
(based on then existing law) and (ii) the existence or scope of the obligation
of such other Person as of the Distribution Date was not acknowledged, fixed or
determined in any material respect, due to a dispute or other uncertainty as of
the Distribution Date or as a result of the failure of such claim or other right
to have been discovered or asserted as of the Distribution Date. A claim or
right meeting the foregoing definition shall be considered a Contingent Gain
regardless of whether there was any proceeding pending, threatened or
contemplated as of the Distribution Date with respect thereto. For purposes of
the foregoing, a claim or right shall be deemed to have accrued as of the
Distribution Date if all the elements of the claim necessary for its assertion
shall have occurred on or prior to the Closing Date, such that the claim or
right, were it asserted in a proceeding on or prior to the Distribution Date,
would not be dismissed by a court on ripeness or similar grounds.
Notwithstanding the foregoing, none of (i) any proceeds from Insurance Policies,
(ii) any reversal of any litigation or other reserve, or (iii) any matters
relating to Taxes (which are governed by the Tax Agreement) shall be deemed to
be a Contingent Gain.
CSC ASSETS means all of the Assets, other than the Spinco Assets, held
on the Distribution Date by any member of either Group.
CSC BUSINESS means the business now or formerly conducted by CSC and
its present and former Subsidiaries, other than the Spinco Business.
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CSC COMMON STOCK means the outstanding shares of capital stock, par
value $.0375 per share, of CSC.
CSC GROUP means CSC and its Subsidiaries, excluding any member of the
Spinco Group.
CSC LIABILITIES means (i) Liabilities of CSC under this Agreement or
any Ancillary Agreement, (ii) Liabilities, other than Spinco Liabilities,
incurred in connection with the conduct or operation of the CSC Business or the
ownership, leasing or use of the CSC Assets (including liabilities arising under
contracts, real property and leasehold interests), whether absolute or
contingent, liquidated or unliquidated, known or unknown, and whether arising
before, on or after the Distribution Date, (iii) Divested Business Liabilities
and (iv) Identified Non-Operating Real Property Liabilities.
DISTRIBUTION is defined in the Background to this Agreement.
DISTRIBUTION AGENT means First Chicago Trust Company of New York,
Jersey City, New Jersey, in its capacity as agent for CSC in connection with the
Distribution.
DISTRIBUTION DATE means the open of business on March 30, 1998, or
such other business day as of which the Distribution shall be effective, as
determined by the Board of Directors of CSC.
DIVESTED BUSINESS LIABILITIES means any Liabilities, whether arising
before, on or after the Distribution Date, relating to or associated with (i)
any business or operations sold or otherwise divested to an unaffiliated third
party by a member of either Group at any time prior to the Distribution Date or
(ii) any real property sold or otherwise divested to an unaffiliated third party
by a member of either Group at any time prior to the Distribution Date or (iii)
any real property (A) in which a member of either Group maintained a leasehold
interest at any time prior to the Distribution Date and (B) in which no member
of the Spinco Group maintains a leasehold interest (or otherwise occupies or has
any right to occupy) as of the Distribution Date.
ENVIRONMENTAL LAWS means all foreign, federal, state and local
environmental and employee protection laws, rules, regulations, common law,
judgments, orders, consent agreements, work practices and standards.
ENVIRONMENTAL LIABILITIES means any and all losses, claims, demands,
liabilities, obligations, causes of action, damages, costs and expenses, fines
or penalties (including attorney fees and other defense costs), known or
unknown, foreseen or unforeseen, whether contingent or otherwise, fixed or
absolute, whether arising before, on or after the Distribution Date arising out
of or related to (i) environmental conditions, including the presence, Release,
threat of Release, Management or exposure of or to Hazardous Materials, whether
into the air, soil, ground or surface waters on-site or off-site or arising from
the off-site transportation, storage, treatment, recycling or disposal of
Hazardous Materials Managed or Released, or any costs or expenses for any
Remediation; or (ii) any violation of any Environmental Law (including costs and
expenses for pollution control equipment required to bring into compliance with
Environmental Laws and fines, penalties and defense costs), including CERCLA.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
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CSC CONTINGENT GAIN means any Contingent Gain if such Contingent Gain
primarily relates to the CSC Business (ignoring, for this purpose, the
difference in the relative sizes of the CSC Business and the Spinco Business) or
if such Contingent Gain is expressly assigned to CSC pursuant to this Agreement
or any Ancillary Agreement.
FORM 10 means the registration statement on Form 10 filed by Spinco
with the Commission to effect the registration of the Spinco Common Stock
pursuant to the Exchange Act, as such registration statement may be amended from
time to time.
GROUP means the CSC Group or the Spinco Group.
GUARANTEED SPINCO LIABILITIES means all Spinco Liabilities on which
any member of the CSC Group is an obligor by reason of any guarantee, suretyship
or similar contractual commitment.
HAZARDOUS MATERIALS means any hazardous, toxic or polluting materials,
substances, wastes, pollutants or contaminants (including petroleum, petroleum
products, radioactive materials, asbestos or asbestos-containing materials)
which are defined or regulated under any Environmental Law or any other
compound, mixture, element, solution or substance which poses or may pose a
present or potential hazard to human health or the environment.
HEADQUARTERS FACILITY means the land, buildings and improvements owned
by CSC located at ▇▇▇▇▇▇▇▇ Place, Camden, New Jersey.
IDENTIFIED NON-OPERATING REAL PROPERTY LIABILITIES means any
Liabilities, whether arising before, on or after the Distribution Date, relating
to or associated with the non-operating real property identified on Exhibit A to
be transferred by Spinco or another member of the Spinco Group to CSC or another
member of the CSC Group.
INFORMATION STATEMENT means the information statement to be sent to
each holder of CSC Common Stock in connection with the Distribution.
INSURANCE ADMINISTRATION means, with respect to each Insurance Policy,
(i) the accounting for, and payment of, retrospectively-rated premiums, defense
costs, deductibles and retentions as appropriate under the terms and conditions
of each of the Insurance Policies, (ii) the reporting to excess insurance
carriers of any losses or claims which may cause the pre-occurrence or aggregate
limits of any Insurance Policy to be exceeded and (iii) the distribution of
Insurance Proceeds as contemplated by this Agreement.
INSURANCE POLICIES means the insurance policies and insurance
contracts of any kind that are owned or maintained by, or provide a benefit in
favor of, any member of either Group or any of its predecessors as the insured
interest, including, without limitation, primary and excess policies, commercial
general liability policies, commercial automobile insurance policies, aviation
and aircraft insurance policies, workers' compensation policies (including,
without limitation, occupational disease), property, casualty and officers'
liability insurance policies, fiduciary liability insurance policies, commercial
crime insurance policies, and self-insurance and captive insurance company
arrangements, together with the rights, privileges and benefits arising
thereunder.
INSURANCE PROCEEDS means monies received by or on behalf of an insured
from an insurance carrier or paid by an insurance carrier on behalf of an
insured.
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INSURED CLAIMS means those Liabilities and losses, damages and costs
that, individually or in the aggregate, are covered within the terms and
conditions of any of the Insurance Policies, whether or not subject to
deductibles, self-insured retention, coinsurance, uncollectibility or
retrospectively-rated premium adjustments, but only to the extent such
Liabilities are within applicable Insurance Policy limits, including aggregates.
INTELLECTUAL PROPERTY AGREEMENTS means the ▇▇▇▇▇▇▇ Trademark License
Agreement between CSC Brands Inc. and Vlasic International Brands Inc., the
▇▇▇▇▇▇▇ Trademark License Agreement between CSC and Vlasic International Brands
Inc., the Trademark License Agreement between CSC Brands, Inc. and Vlasic
International Brands Inc., [the Trademark License Agreement between __________
and Vlasic International Brands Inc.,] and the Technology Sharing Agreement
between CSC and Spinco, each entered into on or prior to the Distribution Date,
as each may be amended from time to time.
INTERNAL TRANSFER TRANSACTIONS means, collectively, each of the
distributions, transfers, conveyances, contributions, assignments and other
transactions described and set forth on Exhibit A attached hereto, and, in
addition, those described or contemplated by the Information Statement and the
private letter ruling from the Internal Revenue Service described in Section
2.2(e) (or in the various private letter ruling request submissions made to the
Internal Revenue Service in connection therewith).
LIABILITIES means any and all claims, debts, liabilities and
obligations, including Environmental Liabilities, whether absolute or
contingent, matured or not matured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, including all costs and expenses
relating thereto, and including, without limitation, those debts, liabilities
and obligations arising under this Agreement, any law, rule, regulation, action,
order or consent decree of any governmental entity or any award of any
arbitrator of any kind, and those arising under any contract, commitment or
undertaking.
MANAGE means use, possess, generate, treat, manufacture, process,
handle, store, recycle, transport or dispose, and MANAGEMENT means the analogous
noun forms of the foregoing verbs.
PERSON means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity, including any governmental authority.
RECORD DATE means March 9, 1998, or such other date as is designated
by CSC's Board of Directors as the record date for determining the shareowners
of CSC entitled to receive the Distribution.
RELEASE means release, spill, leak, discharge, dispose of, pump, pour,
emit, empty, inject, ▇▇▇▇▇, dump or allow to escape.
SECURITIES ACT means the Securities Act of 1933, as amended.
SECURITY INTEREST means any mortgage, security interest, pledge, lien,
charge, claim, option, right to acquire, voting or other restriction, right-of-
way, covenant, condition, easement, encroachment, restriction on transfer, or
other encumbrance of any nature whatsoever.
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SPECIFIED COLLECTIVE BARGAINING AGREEMENTS means those collective
bargaining or similar agreements set forth on Schedule 1.1(a) hereto.
SPINCO ASSETS means all Assets that are (i) owned of record or held in
the name of a member of the Spinco Group as of the Distribution Date following
consummation of the Internal Transfer Transactions described on Exhibit A, (ii)
treated as owned by a member of the Spinco Group on the Spinco Balance Sheet,
subject to dispositions in the operation of the Spinco Business after the date
of the Spinco Balance Sheet, and any Assets acquired by either Group after the
date of the Spinco Balance Sheet and prior to the Distribution Date that would
have been included on the Spinco Balance Sheet had they been owned on the date
of the Spinco Balance Sheet, (iii) except as otherwise provided in any Ancillary
Agreement, used exclusively on the Distribution Date by one or more members of
the Spinco Group and which are owned, leased or held by a member of either Group
on the Distribution Date, other than any Assets located at or associated with
the Headquarters Facility, (iv) subject to Article VI, any rights of any member
of the Spinco Group under any of the Insurance Policies, (v) subject to Section
3.2(c), Spinco Contracts, (vi) any Assets (including pension Assets, pension
funds or other Assets) expressly contemplated to be transferred, licensed or
otherwise made available to any member of the Spinco Group pursuant to this
Agreement or any Ancillary Agreement, (vii) Spinco Contingent Gains and (viii)
books and records owned by a member of either Group on the Distribution Date
that are located at or associated with the Headquarters Facility and that relate
exclusively to the Spinco Business or the Spinco Assets.
SPINCO BALANCE SHEET means the pro forma condensed combined balance
sheet of Spinco as of February 1, 1998 set forth on Exhibit B attached hereto
and made a part hereof.
SPINCO BUSINESS means the business or businesses that, after giving
effect to the Internal Transfer Transactions set forth on Exhibit A are
conducted by Spinco or any other member of the Spinco Group, including any
business or operations of the Spinco Group following the Distribution Date.
SPINCO BYLAWS means the Bylaws of Spinco substantially in the form
filed as an exhibit to the Form 10 at the time it becomes effective.
SPINCO CERTIFICATE means the Certificate of Incorporation of Spinco
substantially in the form filed as an exhibit to the Form 10 at the time it
becomes effective.
SPINCO CLAIM means any claim with respect to any injury, loss,
Liability, damage or expense (i) that is or was incurred or asserted to have
been incurred prior to the Distribution Date in, or in connection with, the
Spinco Business or (ii) that is or was incurred, or asserted to have been
incurred, prior to the Distribution Date that is against any member of the
Spinco Group or any employee of any member of the Spinco Group; provided,
however, that such claim, such injury, loss, Liability, damage or expense is or
may be insured or insurable under one or more of the Insurance Policies and
represents a Spinco Liability.
SPINCO COMMON STOCK means the shares of Common Stock, without par
value, of Spinco.
SPINCO CONTINGENT GAIN means any Contingent Gain if such Contingent
Gain primarily relates to the Spinco Business (ignoring, for this purpose, the
difference in the relative sizes
8
of the CSC Business and the Spinco Business) or if such Contingent Gain is
expressly assigned to Spinco pursuant to this Agreement or any Ancillary
Agreement.
SPINCO CONTRACTS means (i) contracts, leases and licenses existing on
the Distribution Date which have as a party a member of either Group and which
are used exclusively by one or more members of the Spinco Group, (ii) the Spinco
Interest in Shared Contracts, (iii) the Specified Collective Bargaining
Agreements and (iv) any such other contracts, leases and licenses as may be
provided in any Ancillary Agreement; provided, however, that none of the
Insurance Policies will constitute Spinco Contracts.
SPINCO GROUP shall mean Spinco and its Subsidiaries as of the
Distribution Date following consummation of the Internal Transfer Transactions
set forth on Exhibit A.
SPINCO INTEREST IN SHARED CONTRACTS means the portions of any
contracts, leases and licenses existing on the Distribution Date (other than the
Insurance Policies) which have as a party a member of either Group and which
relate to, and are material to, the Spinco Business.
SPINCO LIABILITIES means (i) Liabilities of Spinco or another member
of the Spinco Group under this Agreement or any Ancillary Agreement, (ii)
Liabilities incurred in connection with the conduct or operation of the Spinco
Business or the ownership, leasing or use of the Spinco Assets (including
liabilities arising under contracts, leases and licenses (including the Spinco
Contracts), real property and leasehold interests), whether absolute or
contingent, liquidated or unliquidated, known or unknown, and whether arising
before, on or after the Distribution Date, other than (A) Divested Business
Liabilities and (B) Identified Non-Operating Real Property Liabilities, (iii)
Liabilities set forth on the Spinco Balance Sheet as reduced in the operation of
the Spinco Business after the date of the Spinco Balance Sheet, and any
Liabilities of either Group incurred or arising after the date of the Spinco
Balance Sheet and prior to the Distribution Date that would have been included
in the Spinco Balance Sheet had they been incurred or arisen prior to the date
of the Spinco Balance Sheet, and (iv) Liabilities of Spinco arising under or in
connection with the Assumed Senior Debt Facility Agreements. Notwithstanding the
foregoing, the Spinco Liabilities shall not include any debt of the CSC Group
for money borrowed or evidenced by a note, debenture or other instrument, except
the indebtedness arising under or in connection with the Assumed Senior Debt
Facility Agreements and the other debt set forth on the Spinco Balance Sheet.
SUBSIDIARY means, with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
Subsidiaries controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote on the election of members to
the board of directors or similar governing body.
TAX shall have the meaning given to such term in the Tax Agreement.
TAX AGREEMENT means the Tax Sharing and Indemnification Agreement
entered into on or prior to the Distribution Date between CSC and Spinco, as
amended from time to time.
TRANSITION SERVICES AGREEMENT means the Transition Services Agreement
entered into on or prior to the Distribution Date between CSC and Spinco, as
amended from time to time.
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ARTICLE II
THE DISTRIBUTION
SECTION 2.1 COOPERATION PRIOR TO THE DISTRIBUTION. Prior to the
Distribution,
(a) CSC and Spinco shall prepare, and CSC shall mail to the
holders of CSC Common Stock as of the Record Date, the Information
Statement. CSC and Spinco shall also prepare, and Spinco shall file with
the Commission, the Form 10, which shall include the Information Statement.
CSC and Spinco shall use all reasonable efforts to cause the Form 10 to
become effective under the Exchange Act as soon as practicable after the
filing thereof.
(b) CSC and Spinco shall cooperate in preparing, filing with the
Commission under the Securities Act and causing to become effective any
registration statements or amendments thereto that are appropriate to
reflect the establishment of or amendments to any employee benefit plan
contemplated by the Benefits Agreement.
(c) CSC and Spinco shall by means of a reclassification, stock
split or stock distribution or other means (including pursuant to the
Internal Transfer Transactions set forth on Exhibit A) cause the number of
outstanding shares of Spinco Common Stock held by CSC to be equal to the
number of shares to be distributed in the Distribution (as determined by
CSC).
(d) CSC and Spinco shall take all such action as may be necessary
or appropriate under the securities or blue sky laws of states or other
political subdivisions of the United States in connection with the
transactions contemplated by this Agreement or any Ancillary Agreement.
(e) Spinco shall prepare, file and use all reasonable efforts to
have approved an application to permit listing of the Spinco Common Stock
on the New York Stock Exchange or another mutually agreeable stock exchange
or quotations system.
(f) CSC and Spinco shall take all actions which may be required to
elect or otherwise appoint as directors of Spinco, on or prior to the
Distribution Date, the persons named in the Form 10 to constitute the Board
of Directors of Spinco on the Distribution Date.
(g) CSC shall cause a Certificate of Amendment and Restatement of
the Spinco Certificate of Incorporation substantially in the form filed
with the Form 10, to be filed for record with the New Jersey Secretary of
State and to be in effect on the Distribution Date, and (ii) the Board of
Directors of Spinco shall amend the Bylaws of Spinco so that the Spinco
Bylaws are substantially in the form filed with the Form 10.
(h) CSC and Spinco shall take all actions as may be necessary to
approve the stock-based employee benefit plans of Spinco in order to
satisfy the requirements of Rule 16b-3 under the Exchange Act and any
requirements of the NYSE (or any other stock exchange or quotations system
on which Spinco Common Stock is to be listed or traded).
(i) CSC and Spinco shall use all reasonable efforts to consummate
or cause to be consummated the transactions set forth on Schedule 2.1(i)
hereto.
10
SECTION 2.2 CSC BOARD ACTION; CONDITIONS PRECEDENT TO THE DISTRIBUTION.
CSC's Board of Directors shall, in its sole discretion, establish the Record
Date and the Distribution Date and any appropriate procedures in connection with
the Distribution; provided, however, in no event shall the Distribution occur
unless the following conditions shall have been satisfied or shall have been
waived by CSC's Board of Directors in its sole discretion:
(a) all material regulatory approvals necessary to consummate the
Distribution shall have been received and be in full force and effect;
(b) the Form 10 shall have become effective under the Exchange
Act, and no stop order or similar Commission proceeding shall be in effect
with respect to such Form 10;
(c) Spinco's Board of Directors, as named in the Form 10, shall
have been elected by CSC, as sole shareowner of Spinco, and the Spinco
Certificate and Spinco Bylaws shall be in effect;
(d) the Spinco Common Stock shall have been accepted for listing
on the New York Stock Exchange or other mutually agreeable stock exchange
or quotations system, subject to official notice of issuance;
(e) a private letter ruling from the Internal Revenue Service
that, among other things, the Distribution will not be taxable to the
shareowners of CSC pursuant to Section 355 of the Code shall have been
obtained and continue in effect, and such ruling shall be in form and
substance satisfactory to CSC in its sole discretion;
(f) no order, injunction or decree issued by any court or agency
of competent jurisdiction or other legal restraint or prohibition
preventing consummation of the Distribution shall be in effect and no other
event shall have occurred or failed to occur that prevents consummation of
the Distribution;
(g) the CSC Board of Directors shall have formally approved the
Distribution; and
(h) the Internal Transfer Transactions shall have been consummated
and this Agreement and the Ancillary Agreements shall have been executed
and delivered;
provided, however, that satisfaction of such conditions shall not create any
obligation on the part of CSC, Spinco or any other person to effect or seek to
effect the Distribution or in any way limit CSC's right to terminate this
Agreement as set forth in Section 11.1 or alter the consequences of any such
termination from those set forth in Section 11.2.
SECTION 2.3 THE DISTRIBUTION. (a) On or before the Distribution Date,
subject to satisfaction or waiver of the conditions set forth in this Agreement,
CSC shall deliver to the Distribution Agent a certificate or certificates
representing all of the then outstanding shares of Spinco Common Stock held by
the CSC Group, endorsed in blank, and shall instruct the Distribution Agent to
distribute, or make book-entry credits for, one share of Spinco Common Stock in
respect of every ten shares of CSC Common Stock held by holders of record of CSC
Common Stock on the Record Date, all subject to paragraph (b) below and Section
2.4. Spinco agrees to provide all certificates for shares of Spinco Common
Stock and any information relating to Spinco that the Distribution Agent shall
require in order to effect the Distribution.
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(b) Notwithstanding paragraph (a) above, awards of restricted CSC
Common Stock granted under the ▇▇▇▇▇▇▇▇ Soup Company 1994 Long-Term Incentive
Plan shall, in lieu of receiving the distribution referred to above, be adjusted
all as more fully set forth in the Benefits Agreement.
SECTION 2.4 FRACTIONAL SHARES. Spinco will take all necessary actions to
adopt a book-entry stock transfer and registration system effective as of the
Distribution Date. No certificates or scrip representing fractional shares of
Spinco Common Stock will be distributed to holders of CSC Common Stock in the
Distribution. The Distribution Agent will, as soon as practicable after the
Distribution Date, (a) determine the number of whole shares and fractional
shares of Spinco Common Stock allocable to each holder of record of CSC Common
Stock as of the Record Date who (i) has requested a physical stock certificate
or (ii) owns less than one whole share of Spinco Common Stock, (b) aggregate all
fractional shares held by such holders, and (c) sell the whole shares
attributable to the aggregate of such fractional shares, in open market
transactions, in each case at the then prevailing trading prices, and to cause
to be distributed to each such holder, in lieu of any fractional share, without
interest, such holder's ratable share of the proceeds of such sale, after making
appropriate deductions of the amount required, if any, to be withheld for U.S.
federal income tax purposes.
ARTICLE III
CONVEYANCE OF CERTAIN ASSETS; ASSUMPTION OF CERTAIN
LIABILITIES; CERTAIN OTHER ARRANGEMENTS
SECTION 3.1 INTERNAL TRANSFER TRANSACTIONS. On or prior to the
Distribution Date (but in any event prior to the Distribution) and otherwise in
accordance with the terms and provisions of Exhibit A, each of CSC and Spinco
will, and will cause each of their respective Subsidiaries to, as applicable,
take such action or actions as are necessary to consummate the Internal Transfer
Transactions set forth on Exhibit A. Notwithstanding the foregoing, each of the
parties agrees that prior to the Distribution the Internal Transfer Transactions
may be amended, modified or supplemented in any manner determined to be
appropriate or necessary by CSC, including, without limitation, to qualify any
of such transactions for tax-free treatment under the Code.
SECTION 3.2 CONVEYANCE OF ASSETS; ASSUMPTION OF LIABILITIES. (a) Except
as otherwise expressly provided herein or in any of the Ancillary Agreements,
effective on or prior to the Distribution Date,
(i) CSC shall, on behalf of itself and its Subsidiaries,
transfer or cause to be transferred to Spinco or another member of the
Spinco Group, all of CSC's and the other members of the CSC Group's
right, title and interest in and to the Spinco Assets (except for
those Assets to be transferred at a later date as set forth in
paragraph (c) below).
(ii) Spinco shall, on behalf of itself and its Subsidiaries,
transfer or cause to be transferred to CSC or another member of the
CSC Group, all of Spinco's and the other members of the Spinco Group's
right, title and interest in and to the CSC Assets (except for those
Assets to be transferred at a later date as set forth in paragraph (c)
below); and
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(iii) Spinco shall, on behalf of itself and its Subsidiaries,
assume, or cause another member of the Spinco Group to assume, the
Spinco Liabilities (except for those Liabilities to be assumed at a
later date as set forth in paragraph (c) below).
(b) From and after the Distribution Date, (i) Spinco shall, or
shall cause another member of the Spinco Group to, pay, perform and discharge
all Spinco Liabilities, and (ii) CSC shall, or shall cause another member of the
CSC Group to, pay, perform and discharge all CSC Liabilities.
(c) (i) If any Asset or Liability may not be transferred by
reason of the requirement to obtain the consent of any third party (other than a
governmental authority) and such consent has not been obtained on or before the
Distribution Date, then such Asset or Liability shall not be transferred until
such consent has been obtained, and CSC or Spinco, as the case may be, shall
cause the owner or holder of such Asset or Liability to use reasonable efforts
to provide to the appropriate member of the other Group all the rights and
benefits under such Asset, or the control over disposition, compromise or
satisfaction of such Liability, as applicable. Both parties shall otherwise
cooperate and use all reasonable efforts to provide the economic and operational
equivalent of an assignment or assumption of the Asset or Liability, as
appropriate.
(ii) If any Asset or Liability may not be transferred by
operation of law or without the approval of any governmental authority, then
such Asset or Liability shall not be transferred until such approval has been
obtained, and the parties hereto shall reasonably cooperate (and shall cause
their respective Affiliates to cooperate) to seek to obtain any necessary
regulatory or governmental approvals for the transfer of such Asset or
Liability. CSC or Spinco, as the case may be, shall cause the owner or holder of
such Asset or Liability to use reasonable efforts to provide to the appropriate
member of the other Group all the rights and benefits under such Asset, or the
control over disposition, compromise or satisfaction of such Liability, as
applicable. Both parties shall otherwise cooperate and use all reasonable
efforts to provide the economic and operational equivalent of an assignment or
assumption of the Asset or Liability, as appropriate.
(iii) In the event that any conveyance of an Asset or
Liability required hereby or by any Ancillary Agreement is not effected on or
before the Distribution Date, the obligation to transfer such Asset or Liability
shall continue past the Distribution Date and shall be accomplished as soon
thereafter as practicable. Whether or not any required consent or governmental
authorization is obtained, or any Asset or Liability is transferred or assumed,
as the case may be, on or prior to the Distribution Date, nothing in this
paragraph (c) shall in any way limit the obligations of Spinco to indemnify the
CSC Indemnities (as defined in Section 5.1) for Spinco Liabilities pursuant to
Section 5.1 or the obligations of CSC to indemnify Spinco Indemnities (as
defined in Section 5.2) for CSC Liabilities pursuant to Section 5.2.
(iv) Without limiting the foregoing, it is understood and
agreed that with respect to the transfer to Spinco or another member of the
Spinco Group of the Spinco Interest in Shared Contracts, the parties shall use
their reasonable efforts to assign the underlying contract, lease or license in
part, so that each party will be entitled to the rights and benefits (and
liabilities and obligations) inuring to its business under such contract, lease
or license.
(d) (i) Each of CSC and Spinco, at the request of the other
party, shall use its reasonable efforts to obtain, or cause to be obtained, any
consent, substitution, approval or amendment required to novate or assign all
obligations under agreements, leases, licenses and other obligations or
Liabilities of any nature whatsoever that constitute Spinco Liabilities, or to
obtain in writing the unconditional release of any member of the CSC Group that
is a party to such
13
arrangement, so that, in any such case, Spinco, or some other member of the
Spinco Group, will be solely responsible for such Liabilities; provided,
however, that no party will be obligated to pay any consideration therefor to
any third party from whom such consents, approvals, substitutions and amendments
are requested. Whether or not any such consent, approval, substitution or
amendment is obtained, nothing in this paragraph (d) shall in any way limit the
obligations of Spinco in respect of its assumption of the Spinco Liabilities
pursuant to this Agreement or any Ancillary Agreement or its indemnification of
CSC Indemnitees for the Spinco Liabilities pursuant to Article V hereof.
(ii) Each of CSC and Spinco, at the request of the other
party, shall use its reasonable efforts to obtain, or cause to be obtained, any
consent, substitution, approval or amendment required to novate or assign all
obligations under agreements, leases, licenses and other obligations or
Liabilities of any nature whatsoever that constitute CSC Liabilities, or to
obtain in writing the unconditional release of any member of the Spinco Group
that is a party to such arrangement, so that, in any such case, CSC, or some
other member of the CSC Group, will be solely responsible for such Liabilities;
provided, however, that no party will be obligated to pay any consideration
therefor to any third party from whom such consents, approvals, substitutions
and amendments are requested. Whether or not any such consent, approval,
substitution or amendment is obtained, nothing in this paragraph (d) shall in
any way limit the obligations of CSC in respect of its indemnification of Spinco
Indemnitees for the CSC Liabilities pursuant to Article V hereof.
(e) From and after the Distribution Date, each party shall
promptly transfer or cause the members of its Group promptly to transfer to the
other party or the appropriate member of the other party's Group, from time to
time, any property received that is an Asset of the other party or a member of
its Group. Without limiting the foregoing, funds received by a member of one
Group upon the payment of accounts receivable that belong to a member of the
other Group shall be transferred to the other Group by wire transfer not more
than 20 business days after receipt of such payment.
(f) Each of CSC (on behalf of itself and each member of the CSC
Group) and Spinco (on behalf of itself and each member of the Spinco Group)
understands and agrees that, except as expressly set forth in any Ancillary
Agreement, no party to any Ancillary Agreement or any other agreement or
document contemplated by any Ancillary Agreement either has or is representing
or warranting in any way as to the Assets, businesses or Liabilities retained,
transferred or assumed as contemplated hereby or thereby, as to any consents or
approvals required in connection therewith, as to the value or freedom from any
Security Interests of, or any other matter concerning, any Assets or Liabilities
of such party, or as to the absence of any defenses or right of setoff or
freedom from counterclaim with respect to any claim or other Asset, including
any accounts receivable, or any Liability of any party, or as to the legal
sufficiency of any assignment, document or instrument delivered hereunder to
convey title to any Asset or any other thing of value upon the execution,
delivery and filing hereof or thereof. Except as may expressly be set forth in
any Ancillary Agreement, all such Assets were, or are being, transferred, or are
being retained, on an "as is, where is" basis (and, in the case of any real
property, by means of a quitclaim or similar form deed or conveyance) and the
respective transferees shall bear the economic and legal risks that any
conveyance shall prove to be insufficient to vest in the transferee good and
marketable title, free and clear of any Security Interest. Without limiting the
foregoing, neither CSC nor any other party hereto, or to any Ancillary
Agreement, is making any representation or warranty to Spinco or any other
Person in respect of the Spinco Balance Sheet, including in respect of the
accuracy or presentation thereof, or the adequacy of accruals, reserves and
other amounts reflected thereon.
14
SECTION 3.3 FINANCING ARRANGEMENTS. Each of the parties hereto
acknowledges that (a) CSC has arranged availability for up to $750 million in
senior unsecured financing pursuant to the Assumed Senior Debt Facility
Agreements, (b) that CSC has, prior to the date hereof, incurred $500 million in
indebtedness pursuant to such Assumed Senior Debt Facility Agreements and (c)
that CSC has used, or will use prior to the Distribution Date, such indebtedness
to refinance other outstanding indebtedness of CSC. Spinco agrees that,
following the Distribution Date, Spinco will indemnify CSC (and all the other
members of the CSC Group) and hold such parties harmless from and against all
the obligations of CSC (or Spinco) arising under the Assumed Senior Debt
Facility Agreements (including the obligation to repay such $500 million in
outstanding borrowings), with the effect that CSC (and all other members of the
CSC Group) shall have no further liability or obligation under the Assumed
Senior Debt Facility Agreements.
SECTION 3.4 CONDUCT OF SPINCO PENDING DISTRIBUTION. Prior to the
Distribution Date, the business of Spinco shall be operated for the sole benefit
of CSC as its sole shareowner. Without limiting the foregoing, prior to the
Distribution Date, Spinco shall not, without the prior consent of CSC, make any
public announcement concerning the Distribution and shall use its best efforts
not to take any action which may prejudice or delay the consummation of the
Distribution.
SECTION 3.5 DIRECTOR RESIGNATIONS. (a) CSC shall cause all of its
directors and all employees of the CSC Group to resign, effective as of the
close of business on the Distribution Date, from all boards of directors or
similar governing bodies of each member of the Spinco Group on which they serve,
except as otherwise mutually agreed to in writing by CSC and Spinco.
(b) Spinco shall cause all of its directors and all employees of
the Spinco Group to resign, effective as of the close of business on the
Distribution Date, from all boards of directors or similar governing bodies of
each member of the CSC Group on which they serve, except as otherwise mutually
agreed to in writing by CSC and Spinco.
SECTION 3.6 SETTLEMENT OF INTERCOMPANY ACCOUNTS. All intercompany
receivables, payables and loans between any member of the CSC Group, on the one
hand, and any member of the Spinco Group, on the other hand, shall, as of the
Distribution Date, be contributed to capital and deemed settled and discharged;
provided, however, that (a) the intercompany payable in the aggregate amount of
$________ on the books of Spinco due to CSC representing various costs and
expenses related to the Distribution that are attributable to Spinco and (b) the
amount of the change in CSC's net investment account for Spinco and the other
members of the Spinco Group since August 3, 1997, reduced by net earnings since
August 3, 1997 (but in no event more than the amount reflecting advances to the
Spinco subsidiaries for their working capital needs), shall in each case be
deemed converted into an ordinary trade payable and remain on the books of
Spinco in the case of clause of (a) and the appropriate Spinco subsidiary in the
case of clause (b), with payment due to CSC thereunder within 45 days of the
Distribution Date.
SECTION 3.7 TERMINATION OF INTERCOMPANY AGREEMENTS. (a) Spinco and each
member of the Spinco Group, on the one hand, and CSC and each member of the CSC
Group, on the other hand, hereby terminate any and all agreements, arrangements,
commitments or understandings, whether or not in writing, between or among
Spinco and/or any member of the Spinco Group, on the one hand, and CSC and/or
any member of the CSC Group, on the other hand, effective as of the Distribution
Date. No such terminated agreement, arrangement, commitment or understanding
(including any provision thereof which purports to survive termination) shall be
of any further force or effect after the Distribution Date. Each party shall,
at the reasonable request of any other party, take, or cause to be taken, such
other actions as may be necessary to effect the foregoing.
15
(b) The provisions of Section 3.7(a) shall not apply to any of the
following agreements, arrangements, commitments or understandings (or to any of
the provisions thereof): (i) this Agreement or any of the Ancillary Agreements
(and each other agreement or instrument expressly contemplated by this Agreement
or any Ancillary Agreement to be entered into by any of the parties hereto or
any of the members of their respective Groups); (ii) any agreements,
arrangements, commitments or understandings listed or described on Schedule
3.7(b)(ii) hereto; (iii) any agreements, arrangements, commitments or
understandings to which any Person other than the parties hereto and their
respective Affiliates is a party; (iv) any agreements, arrangements, commitments
or understandings to which any non-wholly owned subsidiary of CSC or Spinco, as
the case may be, is a party (it being understood that directors' qualifying
shares or similar interests will be disregarded for purposes of determining
whether a subsidiary is wholly owned); and (v) any other agreements,
arrangements, commitments or understandings that this Agreement or any of the
Ancillary Agreements expressly contemplates will survive the Distribution Date.
SECTION 3.8 GUARANTEED SPINCO LIABILITIES. (a) Spinco shall use all
reasonable efforts (excluding payment of money or other significant
consideration) to obtain as promptly as practicable after the Distribution Date
the release of CSC from its obligations as guarantor or obligor with respect to
Guaranteed Spinco Liabilities. In no event shall any member of the Spinco Group
extend the term of any Guaranteed Spinco Liabilities (such as by exercising an
option to renew a lease) unless the guarantee of CSC is released as to any
future obligations under such Guaranteed Spinco Liabilities or CSC otherwise
consents in writing.
(b) In the event that CSC is required to pay any Guaranteed Spinco
Liabilities, without limiting any of CSC's rights and remedies against Spinco
under this Agreement or otherwise, Spinco shall, or shall cause a member of the
Spinco Group to, reimburse CSC as soon as practicable (but in no event later
than 30 days) following receipt of notice of such payment, and in order to
secure Spinco's obligations to CSC hereunder in respect of such Guaranteed
Spinco Liabilities, CSC shall be entitled to all the rights of the payee in any
property of any member of the Spinco Group pledged as security for such
Guaranteed Spinco Liabilities.
(c) In the event that at any time, whether prior to or after the
Distribution Date, CSC identifies any letters of credit, interest rate or
foreign exchange contracts or other financial or other contracts (other than
Guaranteed Spinco Liabilities) that relate primarily to the Spinco Business but
for which any member of the CSC Group has contingent, secondary, joint, several
or other Liability of any nature whatsoever, Spinco will at its expense take
such actions and enter into such agreements and arrangements as CSC may
reasonably request to effect the release or substitution of the member of the
CSC Group.
SECTION 3.9 COVENANTS REGARDING DOMESTIC GROCERY BUSINESS OF CSC. (a)
Spinco, on behalf of itself and the Spinco Group, agrees that neither it nor any
other member of the Spinco Group nor any of their Affiliates after the
Distribution Date shall, without the prior written consent of CSC, directly or
indirectly, as owner, partner, agent, consultant or otherwise, for a period of
three years following the Distribution Date, engage in the manufacturing,
distribution, marketing or selling of U.S. Grocery Products anywhere in the
United States. For this purpose, U.S. GROCERY PRODUCTS means the following
products to the extent such products are substantially similar to those products
manufactured or sold by CSC or another member of the CSC Group in the United
States as of the Distribution Date: soups, broths, vegetable juices, salsa and
picante and other Mexican sauces or dips, Italian sauces, heat processed
prepared pasta and gravies.
16
(b) Spinco, on behalf of itself and the Spinco Group, acknowledges
and agrees that the covenants in paragraph (a) above are reasonable in
geographical and temporal scope and otherwise are necessary to protect the
legitimate interests of CSC in its domestic grocery business and that it and the
other members of the Spinco Group have received adequate and independent
consideration in respect of such covenants. Each of the parties agrees that to
the extent any provision or portion of paragraph (a) shall be held, found or
deemed to be unreasonable, unlawful or unenforceable by a court of competent
jurisdiction, then any such provision or portion thereof shall be deemed to be
modified to the extent necessary in order that any such provision or portion
thereof shall be legally enforceable to the fullest extent permitted by
applicable law; and the parties do further agree that any court of competent
jurisdiction shall, and the parties hereto do hereby expressly authorize,
require and empower any court of competent jurisdiction to, enforce any such
provision or portion thereof in order that any such provision or portion thereof
shall be enforced to the fullest extent permitted by applicable law.
(c) Spinco further acknowledges that its covenants under this Section
3.9 are of a special, unique, unusual and extraordinary character. As the
violation by Spinco or any member of the Spinco Group of the provisions of this
Section 3.9 would cause irreparable injury to CSC, and there is no adequate
remedy at law for such violation, CSC shall, notwithstanding anything to the
contrary herein, have the right in addition to any other remedies available, at
law or in equity, to seek to enjoin Spinco (or such other member of the Spinco
Group) in a court of equity from violating such provisions. Spinco, on behalf
of itself and the Spinco Group, hereby waives any and all defenses it may have
on the ground of lack of jurisdiction or competence of the court to grant an
injunction or other equitable relief, or otherwise. Without limiting the
foregoing, Spinco hereby waives the right to require CSC to post any bond or
other security with respect to any proceeding to enforce the provisions of this
Section 3.9. The existence of the rights of CSC set forth in this Section 3.9
shall not preclude any other rights and remedies at law or in equity which CSC
may have.
(d) Spinco acknowledges that the covenants contained in this Section
3.9 are independent covenants and that any failure by CSC or any member of the
CSC Group to perform its obligations under this Agreement or any Ancillary
Agreement shall not be a defense to enforcement of the covenants contained in
this Section 3.9. The covenants contained in this Section 3.9 shall survive any
termination of this Agreement. The time periods associated with the covenants
set forth in paragraph (a) shall be extended by the period equal to the duration
of any breach thereof by Spinco.
SECTION 3.10 THE NON-U.S. PLAN. Each of CSC and Spinco shall take, and
shall cause each member of its respective Group to take, such action as shall be
reasonably necessary to consummate the transactions contemplated on Schedule
2.1(i) hereto (whether prior to or after the Distribution Date).
SECTION 3.11 CORPORATE NAME. (a) Except as otherwise specifically
provided in any Ancillary Agreement:
(i) as soon as reasonably practicable after the Distribution
Date but in any event within one year thereafter, Spinco will, at its
own expense, remove (or, if necessary, on an interim basis, cover up)
any and all exterior signs and other identifiers located on any of
Spinco's property or premises or on the property or premises used by
Spinco or another member of the Spinco Group (except property or
premises to be shared with CSC or a member of the CSC Group after the
Distribution Date) which refer or pertain to CSC or which include the
CSC name,
17
logo or any other trademark or the name of any member of the CSC Group
or any other CSC intellectual property; and
(ii) as soon as is reasonably practicable after the Distribution
Date but in any event within one year thereafter, Spinco will, and
will cause the other members of the Spinco Group to, remove from all
packaging materials, letterhead, envelopes, invoices and other
communications media of any kind, all references to CSC, including the
CSC name, logo and any other trademark or name of any member of the
CSC Group or any other CSC intellectual property (except that Spinco
shall not be required to take any such action with respect to
materials in the possession of customers and Spinco may, until the
first anniversary of the Distribution Date, continue to use existing
stock and supplies), and neither Spinco nor any other member of the
Spinco Group shall use or display the CSC name, logo or other
trademarks or name of any member of the CSC Group or any other CSC
intellectual property without the prior written consent of CSC.
(b) Except as otherwise specifically provided in any Ancillary
Agreement:
(i) as soon as reasonably practicable after the Distribution
Date but in any event within one year thereafter, CSC will, at its own
expense, remove (or, if necessary, on an interim basis, cover up) any
and all exterior signs and other identifiers located on any of CSC's
property or premises or on the property or premises used by CSC or
another member of the CSC Group (except property or premises to be
shared with Spinco or another member of the Spinco Group after the
Distribution Date) which refer or pertain to Spinco or which include
the Spinco name, logo or any other trademark or the name of any member
of the Spinco Group or any other Spinco intellectual property; and
(ii) as soon as is reasonably practicable after the Distribution
Date but in any event within one year thereafter, CSC will, and will
cause the other members of the CSC Group to, remove from all packaging
materials, letterhead, envelopes, invoices and other communications
media of any kind, all references to Spinco, including the Spinco
name, logo and any other trademark or name of any member of the Spinco
Group or any other Spinco intellectual property (except that CSC shall
not be required to take any such action with respect to materials in
the possession of customers and CSC may, until the first anniversary
of the Distribution Date, continue to use existing stock and
supplies), and neither CSC nor any of other member of the CSC Group
shall use or display the Spinco name, logo or other trademarks or name
of any member of the Spinco Group or any other Spinco intellectual
property without the prior written consent of Spinco.
(c) Each party acknowledges that it has no interest in nor any right
to use or display the name or any trademark or intellectual property of the
other party in any way, except to the extent specifically provided herein or in
any Ancillary Agreement and except for any use which is otherwise permissible as
"fair use" under applicable law.
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ARTICLE IV
MUTUAL RELEASES
SECTION 4.1 RELEASE OF PRE-DISTRIBUTION CLAIMS. (a) Except as provided
in Section 4.1(c), effective as of the Distribution Date, Spinco does hereby,
for itself and each other member of the Spinco Group, and their respective
Affiliates (other than any member of the CSC Group), successors and assigns,
remise, release and forever discharge CSC, the members of the CSC Group, their
respective Affiliates (other than any member of the Spinco Group), successors
and assigns, and their respective heirs, executors, administrators, successors
and assigns, from any and all Liabilities whatsoever, whether at law or in
equity (including any right of contribution), whether arising under any contract
or agreement, by operation of law or otherwise, existing or arising from any
acts or events occurring or failing to occur or alleged to have occurred or to
have failed to occur or any conditions existing or alleged to have existed on or
before the Distribution Date, including in connection with the actions or
decisions taken or omitted to be taken in connection with, and the other
activities relating to, the structuring or implementation of the Distribution
and the transfer of the Spinco Assets to the Spinco Group and the assumption by
the Spinco Group of the Spinco Liabilities.
(b) Except as provided in Section 4.1(c), effective as of the
Distribution Date, CSC does hereby, for itself and each other member of the CSC
Group, their respective Affiliates (other than any member of the Spinco Group),
successors and assigns, remise, release and forever discharge Spinco, the
respective members of the Spinco Group, their respective Affiliates (other than
any member of the CSC Group), successors and assigns, and their respective
heirs, executors, administrators, successors and assigns, from any and all
Liabilities whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by operation of
law or otherwise, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Distribution
Date, including in connection with the transactions and all other activities to
implement the Distribution and the transfer of the Spinco Assets to the Spinco
Group and the assumption by the Spinco Group of the Spinco Liabilities.
(c) Nothing contained in Section 4.1(a) or (b) shall impair any right
of any Person to enforce this Agreement or the Ancillary Agreements, or any
agreements, arrangements, commitments or understandings that are referred to
herein or therein as not terminating as of the Distribution Date, in each case
in accordance with its terms. Without limiting the foregoing, nothing contained
in Section 4.1(a) or (b) shall release any Person from:
(i) any Liability provided in or resulting from any agreement
among any members of the CSC Group or the Spinco Group that is
specified in Section 3.7(b) or in Schedule 3.7(b)(ii) as not to
terminate as of the Distribution Date;
(ii) any Liability, contingent or otherwise, assumed,
transferred, assigned or allocated to the Group of which such Person
is a member in accordance with, or any other Liability of any member
of any Group under, this Agreement or any Ancillary Agreement;
(iii) any Liability that the parties may have with respect to
indemnification or contribution pursuant to this Agreement or any
Ancillary Agreement, which Liability shall be governed by the
provisions of Article V, or, if applicable, by the appropriate
provisions of the Ancillary Agreements; or
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(iv) any Liability the release of which would result in the
release of any Person other than a Person released pursuant to this
Section 4.1.
(d) Spinco shall not make, and shall not permit any member of the
Spinco Group to make, any claim or demand, or commence any Action asserting any
claim or demand, including any claim of contribution or any indemnification,
against CSC, any member of the CSC Group, or any other Person released pursuant
to Section 4.1(a), with respect to any Liabilities released pursuant to Section
4.1(a). CSC shall not, and shall not permit any member of the CSC Group, to
make any claim or demand, or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification, against Spinco or
any member of the Spinco Group, or any other Person released pursuant to Section
4.1(b), with respect to any Liabilities released pursuant to Section 4.1(b).
(e) It is the intent of each of CSC and Spinco by virtue of the
provisions of this Section 4.1 to provide for a full and complete release and
discharge of all Liabilities existing or arising from all acts and events
occurring or failing to occur or alleged to have occurred or to have failed to
occur and all conditions existing or alleged to have existed on or before the
Distribution Date, between or among Spinco or any member of the Spinco Group, on
the one hand, and CSC or any member of the CSC Group, on the other hand
(including any contractual agreements or arrangements existing or alleged to
exist between or among any such members on or before the Distribution Date),
except as expressly set forth in Section 4.1(c). At any time, at the request
and expense of any other party, each party shall cause each member of its
respective Group to execute and deliver releases reflecting the provisions
hereof.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 SPINCO INDEMNIFICATION OF THE CSC GROUP. On and after the
Distribution Date, Spinco shall indemnify, defend and hold harmless each member
of the CSC Group, and each of their respective directors, officers, employees
and agents (the CSC INDEMNITEES) from and against any and all damage, loss,
liability and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with any
and all Actions or threatened Actions, but expressly excluding any special or
consequential damages) (collectively, INDEMNIFIABLE LOSSES) incurred or suffered
by any of the CSC Indemnitees and arising out of or in connection with (a) any
of the Spinco Liabilities (including, without limitation, the failure by Spinco
or any member of the Spinco Group to pay, perform or discharge such Liabilities
in accordance with their terms), (b) any of the Guaranteed Spinco Liabilities,
(c) any breach by Spinco or any member of the Spinco Group of this Agreement or
any Ancillary Agreement and, (d) any Liability relating to, arising out of or
resulting from any actual or threatened Action or other claim brought by any
Person other than a member of the Spinco Group alleging that any Liability was
improperly allocated to the Spinco Group or that any Asset was improperly
withheld from the Spinco Group, in each case pursuant to this Agreement or any
of the Ancillary Agreements.
SECTION 5.2 CSC INDEMNIFICATION OF SPINCO GROUP. On and after the
Distribution Date, CSC shall indemnify, defend and hold harmless each member of
the Spinco Group and each of their respective directors, officers, employees and
agents (the SPINCO INDEMNITEES) from and against any and all Indemnifiable
Losses incurred or suffered by any of the Spinco Indemnitees and arising out of
or in connection with (a) any of the CSC Liabilities (including the failure by
CSC or any member of the CSC Group to pay, perform or discharge such Liabilities
in accordance with their
20
terms) and (b) any breach by CSC or any member of the CSC Group of this
Agreement or any Ancillary Agreement.
SECTION 5.3 INSURANCE AND THIRD PARTY OBLIGATIONS. The amount which an
Indemnifying Party (as defined in Section 5.4 below) is required to pay to any
Indemnified Party (as so defined) pursuant to Section 5.1 or Section 5.2 shall
be reduced (including, without limitation, retroactively) by any Insurance
Proceeds and other amounts (including, without limitation, amounts actually
received from third parties in respect of indemnification or contribution
obligations of third parties) actually received by such Indemnified Party in
reduction of the Indemnifiable Loss, it being understood and agreed that each
member of the CSC Group and the Spinco Group shall use its reasonable efforts,
at the expense of the Indemnifying Party, to collect any such proceeds or other
such amounts to which it or any of its wholly-owned Subsidiaries is entitled,
without regard to whether it is an Indemnified Party hereunder. If an
Indemnified Party receives an indemnity payment pursuant to Section 5.1 or 5.2
in respect of an Indemnifiable Loss and subsequently receives Insurance Proceeds
or other amounts in reduction of such Indemnifiable Loss, then such Indemnified
Party shall pay to the Indemnifying Party an amount equal to the difference
between (x) the sum of the amount of such indemnity payment and the amount of
such Insurance Proceeds or other amounts actually received and (y) the amount of
such Indemnifiable Loss. No insurer or any other third party shall be (a)
entitled to a benefit it would not be entitled to receive in the absence of the
foregoing indemnification provisions, (b) relieved of the responsibility to pay
any claims to which it is obligated or (c) entitled to any subrogation rights
with respect to any obligation hereunder.
SECTION 5.4 NOTICE AND PAYMENT OF CLAIMS. If any CSC or Spinco Indemnitee
(the INDEMNIFIED PARTY) determines that it is or may be entitled to
indemnification by a party (the INDEMNIFYING PARTY) under this Article V (other
than in connection with any Action or claim subject to Section 5.5), the
Indemnified Party shall deliver to the Indemnifying Party a written notice
specifying, to the extent reasonably practicable, the basis for its claim for
indemnification and the amount for which the Indemnified Party reasonably
believes it is entitled to be indemnified (it being understood, however, that
the failure to give such notice shall not relieve the Indemnifying Party of its
obligations under this Article V except to the extent the Indemnifying Party is
materially prejudiced by the failure to give such notice). After the
Indemnifying Party shall have been notified of the amount for which the
Indemnified Party seeks indemnification, the Indemnifying Party shall, within 90
days after receipt of such notice, pay the Indemnified Party such amount in cash
or other immediately available funds (or reach agreement with the Indemnified
Party as to a mutually agreeable alternative payment schedule) unless the
Indemnifying Party objects to the claim for indemnification or the amount
thereof. If the Indemnifying Party does not give the Indemnified Party written
notice objecting to such claim and setting forth the grounds therefor within the
same 90 day period, the Indemnifying Party shall be deemed to have acknowledged
its liability for such claim and the Indemnified Party may exercise any and all
of its rights under applicable law to collect such amount.
SECTION 5.5 NOTICE AND DEFENSE OF THIRD-PARTY CLAIMS. Promptly (but in no
event later than 30 days) following the earlier of (a) receipt of notice of the
commencement by a third party of any Action against or otherwise involving any
Indemnified Party or (b) receipt of information from a third party alleging the
existence of a claim against an Indemnified Party, in either case, with respect
to which indemnification may be sought pursuant to this Agreement (a THIRD-PARTY
CLAIM), the Indemnified Party shall give the Indemnifying Party written notice
thereof. The failure of the Indemnified Party to give notice as provided in
this Section 5.5 shall not relieve the Indemnifying Party of its obligations
under this Article V, except to the extent that the Indemnifying Party is
materially prejudiced by such failure to give notice. Within 90 days after
receipt of such
21
notice, the Indemnifying Party may by giving written notice thereof to the
Indemnified Party, either (i) acknowledge, as between the parties hereto,
liability for and, at its option (but only if the foregoing acknowledgment is
provided), elect to assume the defense of such Third-Party Claim at its sole
cost and expense or (ii) object to the claim of indemnification set forth in the
notice delivered by the Indemnified Party pursuant to the first sentence of this
Section 5.5; provided that if the Indemnifying Party does not within the same 90
day period give the Indemnified Party written notice objecting to such claim and
setting forth the grounds therefor or electing to assume the defense, the
Indemnifying Party shall be deemed to have acknowledged, as between the parties
hereto, its liability for such Third-Party Claim. Any contest of a Third-Party
Claim as to which the Indemnifying Party has elected to assume the defense shall
be conducted by attorneys employed by the Indemnifying Party and reasonably
satisfactory to the Indemnified Party; provided that the Indemnified Party shall
have the right to participate in such proceedings and to be represented by
attorneys of its own choosing at the Indemnified Party's sole cost and expense.
If the Indemnifying Party assumes the defense of a Third-Party Claim, the
Indemnifying Party may settle or compromise the claim without the prior written
consent of the Indemnified Party; provided that the Indemnifying Party may not
agree to any such settlement pursuant to which any such remedy or relief, other
than monetary damages for which the Indemnifying Party shall be solely
responsible hereunder, shall be applied to or against the Indemnified Party,
without the prior written consent of the Indemnified Party, which consent shall
not be unreasonably withheld. If the Indemnifying Party does not assume the
defense of a Third-Party Claim for which it has acknowledged (or is deemed to
have acknowledged) liability for indemnification under this Article V, the
Indemnified Party may require the Indemnifying Party to reimburse it on a
monthly basis for its reasonable expenses of investigation, reasonable
attorneys' fees and reasonable out-of-pocket expenses incurred in defending
against such Third-Party Claim and the Indemnifying Party shall be bound by the
result obtained with respect thereto by the Indemnified Party; provided that the
Indemnifying Party shall not be liable for any settlement effected without its
prior written consent, which consent shall not be unreasonably withheld. The
Indemnifying Party shall pay to the Indemnified Party in cash the amount for
which the Indemnified Party is entitled to be indemnified (if any) within 15
days after the final resolution of such Third-Party Claim (whether by the final
nonappealable judgment of a court of competent jurisdiction or otherwise) or, in
the case of any Third-Party Claim as to which the Indemnifying Party has not
acknowledged (or is not deemed to have acknowledged) liability, within 15 days
after such Indemnifying Party's objection has been resolved by settlement,
compromise or the final nonappealable judgment of a court of competent
jurisdiction.
SECTION 5.6 EXCLUSIVE REMEDY; WAIVER OF JURY TRIAL. Each party agrees on
behalf of itself and each member of its respective Group that the procedures set
forth in this Article V, together with Section 11.14 hereof, shall be the sole
and exclusive remedy in connection with any dispute, controversy or claim
relating to any of the matters set forth in Sections 5.1 and 5.2. Each party on
behalf of itself and each member of its respective Group irrevocably waives any
right to any trial by jury with respect to any claim, controversy or dispute
arising under this Agreement or any Ancillary Agreement.
SECTION 5.7 EXISTING CLAIMS. On the Distribution Date, Spinco shall
assume (or shall cause one of its wholly-owned Subsidiaries to assume) (a) the
prosecution of all claims which are Spinco Assets and are pending on the
Distribution Date and (b) the defense against all Third Party Claims which are
Spinco Liabilities and are pending on the Distribution Date.
22
ARTICLE VI
INSURANCE
SECTION 6.1 INSURANCE POLICIES AND RIGHTS. (a) Prior to the Distribution
Date, CSC and Spinco will use reasonable efforts to obtain insurance (or binders
therefor) providing coverage to the Spinco Group similar to the coverage
provided by insurance in place prior to the Distribution Date. It is understood
and agreed that Spinco shall be responsible for payment of all premiums and
other amounts due under insurance policies so obtained, as well as the
performance of all other obligations of the insured party thereunder, including
any obligations to supply letters of credit, surety bonds or similar
arrangements.
(b) (i) The parties intend by this Agreement that Spinco and each
other member of the Spinco Group be successors-in-interest to all rights that
any member of the Spinco Group may have as of the Distribution Date as a
subsidiary, affiliate, division or department of CSC prior to the Distribution
Date under any policy of insurance issued to CSC or any member of the CSC Group
by any insurance carrier unaffiliated with CSC or under any agreements related
to such policies executed and delivered prior to the Distribution Date,
including any rights such member of the Spinco Group may have, as an insured or
additional named insured, subsidiary, affiliate, division or department, to
avail itself of any such policy of insurance or any such agreements related to
such policies as in effect prior to the Distribution Date. At the request of
Spinco, CSC shall take all reasonable steps, including the execution and
delivery of any instruments, to effect the foregoing; provided, however, that
CSC shall not be required to pay any amounts, waive any rights or incur any
Liabilities in connection therewith.
(ii) With respect to any policy of insurance that may be
transferred to Spinco (or any other member of the Spinco Group) pursuant to this
Agreement or any Ancillary Agreement, except as otherwise provided in any
Ancillary Agreement, the parties intend by this Agreement that CSC and each
other member of the CSC Group be successors-in-interest to all rights that any
member of the CSC Group may have as of the Distribution Date as an affiliate of
Spinco or otherwise prior to the Distribution Date under any policy of insurance
issued to Spinco or any member of the Spinco Group by any insurance carrier
unaffiliated with Spinco or CSC or under any agreements related to such policies
executed and delivered prior to the Distribution Date, including any rights such
member of the CSC Group may have, as an insured or additional named insured,
affiliate or otherwise, to avail itself of any such policy of insurance or any
such agreements related to such policies as in effect prior to the Distribution
Date. At the request of CSC, Spinco shall take all reasonable steps, including
the execution and delivery of any instruments, to effect the foregoing;
provided, however, that Spinco shall not be required to pay any amounts, waive
any rights or incur any Liabilities in connection therewith.
(iii) Except as otherwise contemplated by any Ancillary
Agreement, after the Distribution Date, none of CSC or Spinco or any member of
their respective Groups shall, without the consent of the other, provide any
such insurance carrier with a release, or amend, modify or waive any rights
under any such policy or agreement, if such release, amendment, modification or
waiver would adversely affect any rights or potential rights to coverage of any
member of the other Group thereunder; provided, however, that, except as
expressly provided herein, the foregoing shall not (A) preclude any member of
any Group from presenting any claim or from exhausting any policy limit, (B)
require any member of any Group to pay any premium or other amount or to incur
any Liability, or (C) require any member of any Group to renew, extend or
continue any policy in force. Each of Spinco and CSC will share such information
as is reasonably necessary in order to permit the other to manage and conduct
its insurance matters in an orderly fashion.
23
(c) This Agreement shall not be considered as an attempted assignment
of any policy of insurance or as a contract of insurance and shall not be
construed to waive any right or remedy of any member of the CSC Group or the
Spinco Group in respect of any Insurance Policy or any other contract or policy
of insurance.
(d) Spinco does hereby, for itself and each other member of the
Spinco Group, agree that no member of the CSC Group or any CSC Indemnitee shall
have any Liability whatsoever as a result of the insurance policies and
practices of CSC and its Affiliates as in effect at any time prior to the
Distribution Date, including as a result of the level or scope of any such
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.
(e) Nothing in this Agreement shall be deemed to restrict any member
of the Spinco Group from acquiring at its own expense any other insurance policy
in respect of any Liabilities or covering any period to the extent such
insurance policy does not contravene or abrogate any rights of any member of the
CSC Group under any of CSC's insurance policies or increase (or potentially
increase) premiums thereunder, whether prospectively or retroactively.
SECTION 6.2 CLAIMS. (a) The parties agree that effective on the
Distribution Date, CSC shall be deemed: (i) to have assigned to the Spinco
Group, without need of further documentation, all of the CSC Group's rights, if
any, as an additional named insured party, including rights of indemnity and the
right to be defended by or at the expense of the insurer, under all of the
Insurance Policies with respect to such Spinco Claims as are pending on the
Distribution Date, and (ii) to the extent necessary to provide the Spinco Group
with the benefit of such insurance with respect to Spinco Claims, to designate
Spinco, without need of further documentation, as the agent and attorney-in-fact
to assert and to collect any Insurance Proceeds under such Insurance Policies;
provided, however, that nothing in this Section 6.2 shall be deemed to
constitute (or reflect) the assignment of any of the Insurance Policies to the
Spinco Group. If, subsequent to the Distribution Date, the Spinco Group shall
be entitled to payment or reimbursement with respect to a Spinco Claim or any
Person shall assert a Spinco Claim, then CSC shall at the time such Spinco Claim
arises or is asserted be deemed: (i) to assign, without need of further
documentation, to the Spinco Group all of the CSC Group's rights, if any, as an
additional named insured party, including rights of indemnity and the right to
be defended by or at the expense of the insurer, under the applicable Insurance
Policy with respect to such Spinco Claim; and (ii) to the extent necessary to
provide the Spinco Group with the benefit of such insurance with respect to
Spinco Claims, to designate Spinco, without need of further documentation, as
the agent and attorney-in-fact to assert and to collect any Insurance Proceeds
under such Insurance Policies, provided, however, that nothing in this Section
6.2 shall be deemed to constitute (or to reflect) the assignment of any of the
Insurance Policies to the Spinco Group. In the event an insurer refuses to
honor such agency or to pay such Insurance Proceeds to the Spinco Group, CSC
shall use all reasonable efforts to collect such Insurance Proceeds and forward
them to Spinco.
(b) In the event of payment of a Spinco Claim by the Spinco Group
after the Distribution Date, Spinco, or the applicable member of the Spinco
Group shall be subrogated to and stand in the place of CSC or the CSC Group as
to any rights, events or circumstances in respect of which Spinco or the
applicable member of the Spinco Group may have any right or claim under this
Agreement or otherwise against any such insurer relating to such Spinco Claim.
CSC shall cooperate with the Spinco Group in a reasonable manner in prosecuting
any subrogated right or claim.
24
SECTION 6.3 ADMINISTRATION AND RESERVES. Consistent with the provisions
of Article V, from and after the Distribution Date:
(a) CSC shall be responsible for (i) Insurance Administration of the
Insurance Policies with respect to any CSC Liabilities, any CSC Assets or any
claims as to which the CSC Group has retained rights of reimbursement or
subrogation pursuant to this Agreement or any Ancillary Agreement; and (ii)
Claims Administration with respect to any CSC Liabilities, any CSC Assets or any
claims as to which the CSC Group has retained rights of reimbursement or
subrogation pursuant to this Agreement or any Ancillary Agreement. It is
understood that the physical possession of the Insurance Policies by CSC (other
than those transferred to Spinco hereunder or under any Ancillary Agreement) is
in no way intended to limit, inhibit or preclude any right to insurance coverage
for any Insured Claim or any other rights under the Insurance Policies,
including without limitation, claims of Spinco and any of its operations,
Subsidiaries and Affiliates for insurance coverage, reimbursement, subrogation
or otherwise; and
(b) Spinco shall be responsible for (i) Insurance Administration of
the Insurance Policies with respect to any Spinco Liabilities, any Spinco
Assets, or any claims as to which the Spinco Group has rights of reimbursement
or subrogation pursuant to this Agreement or any Ancillary Agreement, and (ii)
Claims Administration with respect to any Spinco Liabilities, any Spinco Assets,
or any claims as to which the Spinco Group has rights of reimbursement or
subrogation pursuant to this Agreement or any Ancillary Agreement.
SECTION 6.4 RETROSPECTIVELY-RATED PREMIUM ADJUSTMENTS. Each party shall
pay its share of retrospectively-rated premiums incurred after the Distribution
Date for coverage under the Insurance Policies with respect to their respective
Liabilities which are Insured Claims under the Insurance Policies. Such shares
will be determined consistent with the procedures and arrangements entered into
with the applicable insurers prior to the date of this Agreement. Either party
shall have the right but not the obligation to pay such premiums under the
Insurance Policies with respect to the other party's Liabilities which are
Insured Claims under the Insurance Policies to the extent that such other party
does not pay such premiums, whereupon the non-paying party shall forthwith (but
in no event more than 30 days following receipt of notice of such payment)
reimburse the payor for any premiums paid by the payor with respect to such non-
paying party's Liabilities.
SECTION 6.5 ALLOCATION OF INSURANCE PROCEEDS; COOPERATION. (a) Except as
otherwise provided in Section 5.3, Insurance Proceeds received with respect to
claims, costs and expenses under the Insurance Policies shall be paid to CSC
with respect to CSC Liabilities and to Spinco with respect to the Spinco
Liabilities. Payment of the allocable portions of indemnity costs of Insurance
Proceeds resulting from the Insurance Policies will be made to the appropriate
party upon receipt from the insurance carrier.
(b) Each of the parties hereto agrees to use reasonable efforts to
maximize available coverage under the Insurance Policies for all Insured Claims
whether or not such party is the expected beneficiary of Insurance Proceeds
under such Insurance Policies in respect of such Insured Claim. As part of such
efforts to maximize insurance coverage, each party agrees to take reasonable
steps to recover such amounts as are or might be due from all other responsible
parties in respect of an Insured Claim, including but not limited to Insured
Claims as to which coverage limits under the Insurance Policies would be or
would have been exceeded as a result of such Insured Claim and whether or not
such party is expected to benefit directly from such efforts.
25
(c) Where CSC Liabilities and Spinco Liabilities, as applicable, are
covered under the same Insurance Policies for periods prior to the Distribution
Date, or covering claims made after the Distribution Date with respect to an
event or an occurrence prior to the Distribution Date, then the CSC Group and
the Spinco Group may claim coverage for Insured Claims under such Insurance
Policies as and to the extent that such insurance is available up to the full
extent of the applicable limits of liability or other coverage of such Insurance
Policies and subject to payment of any deductible, co-insurance amounts or
retentions by the party making the claim. Each party may receive Insurance
Proceeds in respect of its Insured Claims as and when payable under the terms of
the applicable Insurance Policies without regard to the relative amount of
deductible paid by either party after the Distribution Date with respect to an
Insured Claim for a Liability for which such party was responsible or the amount
of such Insurance Proceeds paid to either Group after the Distribution Date with
respect to its respective Liabilities. In the event that the aggregate limits
on any Insurance Policy are exceeded by the aggregate of paid Insured Claims,
there shall be no allocation of previously paid deductibles, retentions,
premiums or Insurance Proceeds between the Groups, and except as expressly
provided in this Agreement, neither Group shall be entitled to reimbursement
from the other Group for deductibles, premiums or Insurance Proceeds paid by an
insurer to or on behalf of such Group; provided, however, that in the event
additional insurance coverage for remaining unpaid Insured Claims may be
purchased or reinstated by CSC, the parties agree to share such costs of
reinstatement (including premium penalty adjustments) in the same proportion
which the Insurance Proceeds under such Insurance Policy (both received and
expected to be received by such party after the Distribution Date less
deductible paid by such party after the Distribution Date) bears to the total
Insurance Proceeds paid (and payable to the party with the pending claims under
the new coverage limits).
SECTION 6.6 REIMBURSEMENT OF EXPENSES. Spinco shall reimburse the
relevant insurer (or any relevant third-party administrator), to the extent
required under any Insurance Policy for any services performed after the
Distribution Date with respect to any and all Spinco Claims which are paid,
settled, adjusted, defended and/or otherwise handled by such insurer or third-
party administrator pursuant to the terms and conditions of such Insurance
Policy (or any service, claims handling or administration agreement with any
such third-party administrator).
SECTION 6.7 INSURER INSOLVENCY OR COVERAGE CONTROVERSY. The CSC Group
shall not be obligated to reimburse the Spinco Group for any Spinco Claim
covered under any Insurance Policies which is not paid because of the insolvency
of such insurer or the refusal or failure by any insurer to pay such Spinco
Claim; provided, however, that CSC shall assign to Spinco or any member of the
Spinco Group all of its rights under such Insurance Policies with respect to
such Spinco Claim and shall reasonably cooperate with Spinco, at Spinco's option
and expense, in pursuing collection of all or part of such Spinco Claim from
such insurer or such other third parties who may have liability for such Spinco
Claim (including without limitation, governmental authorities, or others holding
insurance reserves available for payment, trustees in bankruptcy or liquidators
of such insurers, etc.).
SECTION 6.8 DIRECT RESPONSIBILITY FOR CLAIMS. CSC agrees to notify
insurers under the Insurance Policies of the Distribution and to seek an
endorsement by such insurers that the coverage provided by such Insurance
Policies will apply to the CSC Group and the Spinco Group with the same force
and effect and subject to the same terms, conditions, and exclusions as if the
separation of CSC and the Distribution had not occurred (it being understood
that CSC shall be under no obligation to pay any amounts or otherwise incur any
liabilities in connection therewith). In the event such endorsement is refused,
CSC agrees to make reasonable efforts to place the Spinco Group in the same
position as it would have been had such endorsement been agreed upon by such
insurers (it being understood that CSC shall be under no obligation to pay any
amounts or otherwise incur
26
any liabilities in connection therewith). Spinco shall have the right to make
reasonable efforts to negotiate agreements with any and all insurers or third-
party administrators whereby Spinco shall assume direct responsibility for any
and all Liabilities related to it under any Insurance Policies, and CSC shall
provide reasonable assistance in this effort.
SECTION 6.9 ASSISTANCE, WAIVER OF CONFLICT AND SHARED DEFENSE. Each of
the parties hereto agrees to provide reasonable assistance to the other parties
hereto as regards any dispute with any third party (including insurers, third-
party administrators and state guaranty funds) as to any matter related to the
Insurance Policies. In the event that Insured Claims of more than one Group
exist relating to the same occurrence, the parties hereto agree to defend such
Insured Claims jointly and to waive any conflict of interest necessary to the
conduct of such joint defense. Nothing in this Section 6.9 or elsewhere in this
Article VI shall be construed to limit or otherwise alter in any way the
indemnity obligations of the parties hereto, including those created by this
Agreement, any Ancillary Agreement or by operation of law.
ARTICLE VII
SERVICES AND RELATED MATTERS
SECTION 7.1 PERFORMANCE OF SERVICES. Beginning on the Distribution Date,
CSC will provide, or cause one or more of its Subsidiaries to provide, to Spinco
or another member of the Spinco Group certain services, or the right to use
certain assets, on such terms as may be set forth in the Transition Services
Agreement, including any schedules thereto.
SECTION 7.2 INDEPENDENCE. Unless otherwise agreed in writing, none of the
individuals providing the scheduled services referred to in the Transition
Services Agreement will be deemed to be employees of the party receiving such
services for any purpose.
ARTICLE VIII
CERTAIN OTHER MATTERS
SECTION 8.1 BENEFITS AGREEMENT. All matters relating to or arising out of
any employee benefit, compensation or welfare arrangement in respect of any
present and former employee of the CSC Group or the Spinco Group shall be
governed by the Benefits Agreement. In the event of any inconsistency between
the Benefits Agreement and this Agreement with respect to such matters, the
Benefits Agreement shall govern.
SECTION 8.2 TAX MATTERS. All matters relating to Taxes shall be governed
exclusively by the Tax Agreement. In the event of any inconsistency between the
Tax Agreement and this Agreement with respect to such matters, the Tax Agreement
shall govern.
SECTION 8.3 INTELLECTUAL PROPERTY MATTERS. Certain matters relating to
intellectual property are governed exclusively by the Intellectual Property
Agreements. In the event of any inconsistency between the Intellectual Property
Agreements and this Agreement with respect to the matters covered by the
Intellectual Property Agreements, the Intellectual Property Agreements shall
govern.
SECTION 8.4 TREATMENT OF ASSETS TRANSFERRED AND LIABILITIES ASSUMED. All
transfers of Assets of the CSC Group to the Spinco Group pursuant to this
Agreement shall constitute contributions by CSC to the capital of Spinco, and
all transfers of Assets of the Spinco Group to the
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CSC Group, and the assumption by the Spinco Group of Liabilities of the CSC
Group, net of Assets received, pursuant to this Agreement shall be treated as a
distribution by Spinco to CSC.
ARTICLE IX
INFORMATION
SECTION 9.1 ACCESS TO INFORMATION. From and after the Distribution Date,
CSC and Spinco shall each afford the other and its accountants, counsel and
other designated representatives reasonable access (including using reasonable
efforts to give access to persons or firms possessing information) and
duplicating rights during normal business hours to all records, books,
contracts, instruments, computer data and other data and information in its
possession relating to the business and affairs of the other (other than data
and information subject to an attorney/client or other privilege), insofar as
such access is reasonably required by the other including, without limitation,
for audit, accounting and litigation purposes; provided, however, that no party
shall be under any obligation by reason of this Section 9.1 to afford such
access to any of the foregoing persons in connection with any Action commenced
or threatened against such party; and provided further, however, that except as
expressly provided otherwise in any Ancillary Agreement, no party shall have any
liability to any other party in the event that any information exchanged or
provided pursuant to this Agreement which is an estimate or forecast, or which
is based on an estimate or forecast, is found to be inaccurate.
SECTION 9.2 LITIGATION COOPERATION. CSC and Spinco shall each use
reasonable efforts to make available to the other, upon written request, its
officers, directors, employees and agents as witnesses to the extent that such
persons may reasonably be required in connection with any legal, administrative
or other proceedings arising out of the business of the other prior to the
Distribution Date in which the requesting party may from time to time be
involved; provided, however, that no party shall be under any obligation by
reason of this Section 9.2 to make available any of the foregoing persons in
connection with any Action commenced or threatened against such party.
SECTION 9.3 PRIVILEGE MATTERS.
(a) Each of the parties hereto shall, and shall cause the members of its
Group over which it has legal or effective direct or indirect control to, use
its reasonable efforts to maintain, preserve, protect and assert all privileges
including, without limitation, all privileges arising under or relating to the
attorney-client relationship (including without limitation the attorney-client
and attorney work product privileges) that relate directly or indirectly to any
member of the other Group for any period prior to the Distribution Date
(PRIVILEGE or PRIVILEGES). Each of the parties hereto shall use its reasonable
efforts not to waive, or permit any member of its Group over which it has legal
or effective direct or indirect control to waive, any such Privilege that could
be asserted under applicable Law without the prior written consent of the other
party. With respect to each party, the rights and obligations created by this
Section 9.3 shall apply to all information as to which a member of any Group did
assert or, but for the Distribution, would have been entitled to assert the
protections of a Privilege (PRIVILEGED INFORMATION) including, but not limited
to, any and all information that either:
(i) was generated or received prior to the Distribution Date but
which, after the Distribution, is in the possession of a member of
another Group; or
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(ii) is generated or received after the Distribution Date but
refers to or relates to Privileged Information that was generated or
received prior to the Distribution Date.
(b) Upon receipt by a party or any member of its Group of any
subpoena, discovery or other request that arguably calls for the production or
disclosure of Privileged Information, or if a party or any member of its Group
obtains knowledge that any current or former employee of such party or any
member of its Group has received any subpoena, discovery or other request which
arguably calls for the production or disclosure of Privileged Information, such
party shall promptly notify the other parties of the existence of the request
and shall provide the other party a reasonable opportunity to review the
information and to assert any rights it may have under this Section 9.4 or
otherwise to prevent the production or disclosure of Privileged Information. No
party will, or will permit any member of its Group over which it has direct or
indirect legal or effective control to, produce or disclose any information
arguably covered by a Privilege under this Section 9.4 unless:
(i) the other party has provided its express written consent to
such production or disclosure; or
(ii) a court of competent jurisdiction has entered an order which
is not then appealable or a final, nonappealable order finding that
the information is not entitled to protection under any applicable
privilege.
(c) The parties hereto understand and agree that the transfer of any
books and records or other information between any members of the CSC Group or
the Spinco Group shall be made in reliance on the agreements of CSC and Spinco
as set forth in this Article IX, to maintain the confidentiality of Privileged
Information and to assert and maintain all applicable Privileges. The access to
information being granted pursuant to Section 9.1, the agreement to provide
witnesses and individuals pursuant to Section 9.2 and the transfer of Privileged
Information to either party pursuant to this Section 9.3 shall not be deemed a
waiver of any Privilege that has been or may be asserted under this Section 9.3
or otherwise.
SECTION 9.4 REIMBURSEMENT. CSC and Spinco, each providing information or
witnesses under Sections 9.1 or 9.2 to the other, shall be entitled to receive
from the recipient, upon the presentation of invoices therefor, payment for all
out-of-pocket costs and expenses as may be reasonably incurred in providing such
information or witnesses.
SECTION 9.5 RETENTION OF RECORDS. Except as otherwise required by law or
agreed to in writing, each party shall, and shall cause the members of its Group
to, retain all information relating to the other's business in accordance with
the past practice of such party. Notwithstanding the foregoing, except as
otherwise provided in the Tax Agreement, either party may destroy or otherwise
dispose of any information at any time in accordance with the corporate record
retention policy maintained by such party with respect to its own records,
subject to the provisions of applicable law.
SECTION 9.6 CONFIDENTIALITY. Each party shall, and shall cause each
member of its Group to, hold and cause its directors, officers, employees,
agents, consultants and advisors to hold, in strict confidence, unless compelled
to disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all information concerning the other
party (except to the extent that such information can be shown to have been (a)
in the public domain through no fault of such party or (b) later lawfully
acquired after the Distribution on a non-confidential basis from
29
other sources by the party to which it was furnished), and neither party shall
release or disclose such information to any other person, except its auditors,
attorneys, financial advisors, bankers and other consultants and advisors who
shall be advised of and agree in writing to comply with the provisions of this
Section 9.6. Each party shall be deemed to have satisfied its obligation to
hold confidential information concerning or supplied by the other party if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.
ARTICLE X
INTEREST ON PAYMENTS
SECTION 10.1 INTEREST ON PAYMENTS. Except as otherwise expressly
provided in this Agreement, all payments by one party to the other under this
Agreement or any Ancillary Agreement shall be paid, by wire transfer of
immediately available funds to an account in the United States designated by the
recipient, within 30 days after receipt of an invoice or other written request
for payment setting forth the specific amount due and a description of the basis
therefor in reasonable detail. Any amount remaining unpaid beyond its due date,
including disputed amounts that are ultimately determined to be payable, shall
bear interest at a floating rate of interest equal to the prime commercial
lending rate publicly announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York or
any successor thereto at its principal office (or any alternative rate
substituted therefor by such bank).
ARTICLE XI
GENERAL
SECTION 11.1 TERMINATION. This Agreement may be terminated at any time
prior to the Distribution by CSC.
SECTION 11.2 EFFECT OF TERMINATION. In the event of any termination of
this Agreement pursuant to Section 11.1, no party to this Agreement (or any of
its directors or officers) shall have any Liability or further obligation to any
other party.
SECTION 11.3 EXPENSES. Except as specifically provided in this Agreement
or any Ancillary Agreement (including Section 3.6), all costs and expenses
incurred in connection with the preparation, execution, delivery and
implementation of this Agreement and the Ancillary Agreements and with the
consummation of the transactions contemplated by this Agreement (including
transfer taxes and the fees and expenses of the Distribution Agent and of all
counsel, accountants and financial and other advisors) shall be paid by CSC.
SECTION 11.4 NOTICES. All notices, requests, claims and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly give or made upon receipt) by delivery by
hand, by reputable overnight courier service, by facsimile transmission, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 11.4)
listed below:
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If to CSC, to:
▇▇▇▇▇▇▇▇ Soup Company
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Spinco, to:
Vlasic Foods International Inc.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner. Notice given by hand shall be deemed
delivered when received by the recipient. Notice given by mail as set out above
shall be deemed delivered five calendar days after the date the same is mailed.
Notice given by reputable overnight courier shall be deemed delivered on the
next following business day after the same is sent. Notice given by facsimile
transmission shall be deemed delivered on the day of transmission provided
telephone confirmation of receipt is obtained promptly after completion of
transmission.
SECTION 11.5 AMENDMENT AND WAIVER. This Agreement may not be altered or
amended, nor may rights hereunder be waived, except by an instrument in writing
executed by the party or parties to be charged with such amendment or waiver.
No waiver of any term, provision or condition of or failure to exercise or delay
in exercising any rights or remedies under this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, provision, condition, right or remedy or as a waiver of
any other term, provision or condition of this Agreement.
SECTION 11.6 ENTIRE AGREEMENT. This Agreement, together with the
Ancillary Agreements, constitutes the entire understanding of the parties hereto
with respect to the subject matter hereof, superseding all negotiations, prior
discussions and prior agreements and understandings relating to such subject
matter. To the extent that the provisions of this Agreement are inconsistent
with the provisions of any Ancillary Agreement, the provisions of this Agreement
shall prevail, except as otherwise provided in Article VIII.
SECTION 11.7 SURVIVAL. All of the representations, warranties, covenants
and agreements contained in this Agreement shall survive (a) the execution and
delivery of this Agreement (b) the transfer and assumption of Spinco Assets and
Spinco Liabilities and (c) the Distribution Date in perpetuity.
SECTION 11.8 PARTIES IN INTEREST. Nothing contained in this Agreement,
express or implied, is intended to confer any benefits, rights or remedies upon
any person or entity other than members of the CSC Group and the Spinco Group,
the Persons released pursuant to Article IV hereof, and the CSC Indemnitees and
Spinco Indemnitees under Article V hereof.
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SECTION 11.9 FURTHER ASSURANCES AND CONSENTS. In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto will use its reasonable efforts to (a) execute and deliver such further
instruments and documents and take such other actions as any other party may
reasonably request in order to effectuate the purposes of this Agreement and to
carry out the terms hereof and (b) take, or cause to be taken, all actions, and
to do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws, regulations and agreements or otherwise to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, using its reasonable efforts to obtain any consents and
approvals and to make any filings and applications necessary or desirable in
order to consummate the transactions contemplated by this Agreement; provided
that no party hereto shall be obligated to pay any consideration therefor
(except for filing fees and other similar charges) to any third party from whom
such consents, approvals and amendments are requested or to take any action or
omit to take any action if the taking of or the omission to take such action
would be unreasonably burdensome to the party or its Group or the business
thereof.
SECTION 11.10 SEVERABILITY. The provisions of this Agreement are
severable and should any provision hereof be void, voidable or unenforceable
under any applicable law, such provision shall not affect or invalidate any
other provision of this Agreement, which shall continue to govern the relative
rights and duties of the parties as though such void, voidable or unenforceable
provision were not a part hereof.
SECTION 11.11 GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of New Jersey, without
regard to the conflicts of law rules of such state.
SECTION 11.12 COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same Agreement.
SECTION 11.13 ASSIGNMENT. Neither of the parties may assign or delegate
any of its rights or duties under this Agreement without the prior written
consent of the other party, which consent will not be unreasonably withheld.
This Agreement shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and permitted assigns.
SECTION 11.14 DISPUTES. (a) Resolution of any and all disputes arising
from or in connection with this Agreement, whether based on contract, tort,
statute or otherwise, including, but not limited to, disputes in connection with
claims by third parties (collectively, DISPUTES), shall be subject to the
provisions of this Section 11.14; provided, however, that nothing contained
herein shall preclude either party from seeking or obtaining (i) injunctive
relief (including where expressly authorized herein pursuant to Sections 3.9) or
(ii) equitable or other judicial relief to enforce the provisions hereof or to
preserve the status quo pending resolution of Disputes hereunder.
(b) Either party may give the other party written notice of any
Dispute not resolved in the normal course of business. The parties shall attempt
in good faith to resolve any Dispute promptly by negotiation between executives
of the parties who have authority to settle the controversy and who are at a
higher level of management than the persons with direct responsibility for
administration of this Agreement. Within 30 days after delivery of the notice,
the foregoing executives of both parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary for a
period not to exceed 15 days, to attempt to resolve the Dispute. All reasonable
requests for information made by one party to the other will be honored.
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If the parties do not resolve the Dispute within such 45 day period (the INITIAL
MEDIATION PERIOD), the parties shall attempt in good faith to resolve the
Dispute by negotiation between (a) in the case of CSC, the Chief Financial
Officer or the Vice President - Treasurer and (b) in the case of Spinco, the
Chief Financial Officer (collectively, the DESIGNATED OFFICERS). Such officers
shall meet at a mutually acceptable time and place (but in any event no later
than 15 days following the expiration of the Initial Mediation Period) and
thereafter as often as they reasonably deem necessary for a period not to exceed
15 days, to attempt to resolve the Dispute.
(c) If the Dispute has not been resolved by negotiation within 75
days of the first party's notice, or if the parties failed to meet within 30
days of the first party's notice, or if the Designated Officers failed to meet
within 60 days of the first party's notice, either party may commence any
litigation or other procedure allowed by law.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
▇▇▇▇▇▇▇▇ SOUP COMPANY
By _______________________________________
Name:
Title:
VLASIC FOODS INTERNATIONAL INC.
By _______________________________________
Name:
Title:
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