EXHIBIT 2
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
between
CONOPCO, INC.
and
CHURCH & ▇▇▇▇▇▇ CO., INC.
Dated as of September 9, 2003
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TABLE OF CONTENTS
Page
----
ARTICLE I
Purchase and Sale of Transferred Assets
SECTION 1.01. Purchase and Sale..........................................................1
SECTION 1.02. Transferred Assets and Excluded Assets.....................................2
SECTION 1.03. Consents to Certain Assignments............................................8
SECTION 1.04. Assumption of Liabilities..................................................9
SECTION 1.05. Excluded Patents and Technology License...................................14
SECTION 1.06. Excluded Close-Up Trademarks and Technology License.......................14
SECTION 1.07. Lemelson Sublicense.......................................................14
SECTION 1.08. Transferred Technology License............................................14
ARTICLE II
Closing and Post-Closing Purchase Price Adjustment
SECTION 2.01. Closing...................................................................14
SECTION 2.02. Transactions To Be Effected at the Closing................................15
SECTION 2.03. Post-Closing Purchase Price Adjustment....................................16
ARTICLE III
Representations and Warranties of Seller
SECTION 3.01. Organization and Standing.................................................19
SECTION 3.02. Authority; Execution and Delivery; Enforceability.........................19
SECTION 3.03. No Conflicts or Violations; No Consents or Approvals Required.............20
SECTION 3.04. Financial Statements......................................................22
SECTION 3.05. Good and Valid Title......................................................22
SECTION 3.06. Intellectual Property.....................................................23
SECTION 3.07. Contracts.................................................................24
SECTION 3.08. Permits...................................................................26
SECTION 3.09. Taxes.....................................................................27
SECTION 3.10. Proceedings...............................................................28
SECTION 3.11. Absence of Changes or Events..............................................28
SECTION 3.12. Compliance with Applicable Laws...........................................28
SECTION 3.13. Transferred Inventory.....................................................29
SECTION 3.14. Relationships with Customers and Suppliers................................29
SECTION 3.15. Transferred Equipment.....................................................29
SECTION 3.16. Transferred Assets........................................................29
ARTICLE IV
Representations and Warranties of Purchaser
SECTION 4.01. Organization and Standing.................................................30
SECTION 4.02. Authority; Execution and Delivery; Enforceability.........................30
SECTION 4.03. No Conflicts or Violations; No Consents or Approvals Required.............31
SECTION 4.04. Proceedings...............................................................31
SECTION 4.05. Availability of Funds.....................................................32
ARTICLE V
Covenants
SECTION 5.01. Covenants Relating to Conduct of the Businesses...........................32
SECTION 5.02. Access to Information.....................................................34
SECTION 5.03. Confidentiality...........................................................34
SECTION 5.04. Best Efforts..............................................................35
SECTION 5.05. Brokers or Finders........................................................37
SECTION 5.06. Further Assurances........................................................37
SECTION 5.07. Additional Payments.......................................................37
SECTION 5.08. Removal of Certain Equipment..............................................41
ARTICLE VI
Conditions to Closing
SECTION 6.01. Conditions to Each Party's Obligation.....................................42
SECTION 6.02. Conditions to Obligation of Purchaser.....................................43
SECTION 6.03. Conditions to Obligation of Seller........................................43
SECTION 6.04. Frustration of Closing Conditions.........................................44
ARTICLE VII
Termination; Effect of Termination
SECTION 7.01. Termination...............................................................44
SECTION 7.02. Effect of Termination.....................................................46
ARTICLE VIII
Indemnification
SECTION 8.01. Indemnification by Seller.................................................46
SECTION 8.02. Indemnification by Purchaser..............................................47
SECTION 8.03. Indemnification Procedures................................................47
SECTION 8.04. Limitations on Indemnification............................................50
SECTION 8.05. Calculation of Indemnity Payments.........................................53
SECTION 8.06. Tax Treatment of Indemnification..........................................53
ARTICLE IX
Tax Matters
SECTION 9.01. Tax Matters...............................................................54
ARTICLE X
Non-Competition
SECTION 10.01. Seller's Covenant Not To Compete..........................................56
SECTION 10.02. Permitted Activities of Seller............................................57
SECTION 10.03. Injunctive Relief.........................................................57
ARTICLE XI
Additional Agreements
SECTION 11.01. Publicity.................................................................57
SECTION 11.02. No Use of Certain Names...................................................58
SECTION 11.03. Support Services..........................................................59
SECTION 11.04. Post-Closing Information..................................................59
SECTION 11.05. Records...................................................................59
SECTION 11.06. Bulk Transfer Laws........................................................59
SECTION 11.07. Refunds and Remittances...................................................60
SECTION 11.08. Additional Information....................................................60
ARTICLE XII
Miscellaneous
SECTION 12.01. Assignment................................................................61
SECTION 12.02. No Third-Party Beneficiaries..............................................61
SECTION 12.03. Expenses..................................................................61
SECTION 12.04. Notices...................................................................62
SECTION 12.05. Headings; Certain Definitions.............................................63
SECTION 12.06. Counterparts..............................................................65
SECTION 12.07. Integrated Contract; Exhibits and Schedules...............................65
SECTION 12.08. Severability; Enforcement.................................................66
SECTION 12.09. Governing Law.............................................................66
SECTION 12.10. Jurisdiction..............................................................66
SECTION 12.11. Service of Process........................................................66
SECTION 12.12. Waiver of Jury Trial......................................................67
SECTION 12.13. Amendments................................................................67
EXHIBITS
Excluded Patents and Technology License..................................................................A
Excluded Close-Up Trademarks and Technology License......................................................B
Lemelson Sublicense......................................................................................C
Transferred Technology License...........................................................................D
Transitional Services Agreement..........................................................................E
Manufacturing Agreement..................................................................................F
GLOSSARY OF DEFINED TERMS
Location of
Definition Defined Terms
---------- -------------
Acquisition..................................................................................Section 1.01
Adjusted Purchase Price...................................................................Section 2.03(c)
affiliate................................................................................Section 12.05(b)
Agreement........................................................................................Preamble
Aim Brand........................................................................................Recitals
Allocation............................................................................Section 9.01(a)(ii)
Ancillary Agreements.........................................................................Section 3.02
Annual Statement..........................................................................Section 5.07(d)
Annual Statement Date.....................................................................Section 5.07(a)
Annual Statement Payment Date.............................................................Section 5.07(a)
Applicable Law...............................................................................Section 3.03
Assumed Liabilities.......................................................................Section 1.04(a)
Brands...........................................................................................Recitals
Business.................................................................................Section 12.05(b)
Business Contracts........................................................................Section 3.07(b)
business day.............................................................................Section 12.05(b)
Businesses...............................................................................Section 12.05(b)
Businesses Material Adverse Effect.......................................................Section 12.05(b)
Cap Section 8.04(a)(iii)
Claims................................................................................Section 1.02(a)(ix)
Close-Up Brand...................................................................................Recitals
Closing......................................................................................Section 2.01
Closing Date.................................................................................Section 2.01
Closing Date Payment......................................................................Section 2.02(b)
Closing Inventory.........................................................................Section 2.03(a)
Code Section 3.09(a)
Competitive Activities......................................................................Section 10.01
Confidentiality Agreement....................................................................Section 5.03
Consent......................................................................................Section 3.03
Contracts...........................................................................Section 1.02(a)(viii)
De Minimis Amount.....................................................................Section 8.04(a)(ii)
DOJ.......................................................................................Section 5.04(b)
$........................................................................................Section 12.05(b)
Eighth Anniversary Date....................................................................Section5.07(a)
Environmental Laws........................................................................Section 3.12(b)
Equipment.............................................................................Section 1.02(a)(ii)
Excluded Assets...........................................................................Section 1.02(b)
Excluded Close-Up Trademarks and
Technology.........................................................................Section 1.02(b)(xi)
Excluded Close-Up Trademarks and
Technology License......................................................................Section 1.06
Excluded Patents and Technology..............................................................Section 1.05
Excluded Patents and Technology License......................................................Section 1.05
Final Payment Date........................................................................Section 5.07(a)
Final Purchase Price......................................................................Section 2.03(c)
Financial Statements.........................................................................Section 3.04
First Payment Date........................................................................Section 5.07(a)
FTC.......................................................................................Section 5.04(b)
GAAP......................................................................................Section 2.03(a)
General Survival Period...................................................................Section 8.04(b)
Governmental Entity..........................................................................Section 3.03
HSR Act......................................................................................Section 3.03
including................................................................................Section 12.05(b)
Indemnified Party.........................................................................Section 8.03(a)
Indemnifying Party........................................................................Section 8.03(a)
Independent Expert....................................................................Section 2.03(b)(ii)
Inventory..............................................................................Section 1.02(a)(i)
Judgment.....................................................................................Section 3.03
knowledge of Seller......................................................................Section 12.05(b)
Lemelson Sublicense..........................................................................Section 1.07
Licensed Patents, Trademarks and Technology..................................................Section 1.05
Liens.....................................................................................Section 3.05(a)
Losses.......................................................................................Section 8.01
Manufacturing Agreement.....................................................................Section 11.03
Mentadent Brand..................................................................................Recitals
Mentadent Notice of Objection.........................................................Section 5.07(d)(ii)
Mentadent Payment.........................................................................Section 5.07(a)
Mentadent Products........................................................................Section 5.07(a)
Names.......................................................................................Section 11.02
Nine Month Statement........................................................................Section 11.08
Notice of Objection....................................................................Section 2.03(b)(i)
Other Transferred Intellectual
Property..........................................................................Section 1.02(a)(v)
Payment Date..............................................................................Section 5.07(a)
Pepsodent Brand..................................................................................Recitals
Permits..............................................................................Section 1.02(a)(vii)
Permitted Liens...........................................................................Section 3.05(a)
person...................................................................................Section 12.05(b)
Pre-Closing Tax Period....................................................................Section 3.09(a)
Proceeding................................................................................Section 1.03(a)
Product Claims........................................................................Section 1.04(a)(ii)
Products.................................................................................Section 12.05(b)
Purchase Price...............................................................................Section 1.01
Purchase Price Cap........................................................................Section 8.04(a)
Purchaser........................................................................................Preamble
Purchaser Countries.......................................................................Section 1.02(b)
Purchaser Indemnitees........................................................................Section 8.01
Purchaser Material Adverse Effect............................................................Section 4.01
Quarter...................................................................................Section 5.07(a)
Quarterly Payment Date....................................................................Section 5.07(a)
Retained Liabilities......................................................................Section 1.04(b)
Seller...........................................................................................Preamble
Seller Affiliates................................................................................Recitals
Seller Indemnitees...........................................................................Section 8.02
Seller Insurance Policies.................................................................Section 5.01(b)
Six Month Statement.......................................................................Section 3.04(b)
Statement.................................................................................Section 2.03(a)
Statement of Assets..........................................................................Section 3.04
subsidiary...............................................................................Section 12.05(b)
Target Inventory..........................................................................Section 2.03(c)
Tax.......................................................................................Section 3.09(a)
Taxes.....................................................................................Section 3.09(a)
Taxing Authority..........................................................................Section 3.09(a)
Tax Return................................................................................Section 3.09(a)
Technology............................................................................Section 1.02(a)(vi)
Third Party Claim.........................................................................Section 8.03(a)
Threshold.................................................................................Section 8.04(a)
Transfer Taxes............................................................................Section 3.09(a)
Transferred Assets........................................................................Section 1.02(a)
Transferred Contracts...............................................................Section 1.02(a)(viii)
Transferred Equipment.................................................................Section 1.02(a)(ii)
Transferred Intellectual Property......................................................Section 1.02(a)(v)
Transferred Inventory..................................................................Section 1.02(a)(i)
Transferred Patents..................................................................Section 1.02(a)(iii)
Transferred Permits..................................................................Section 1.02(a)(vii)
Transferred Technology................................................................Section 1.02(a)(vi)
Transferred Technology License...............................................................Section 1.08
Transferred Trademarks................................................................Section 1.02(a)(iv)
Transitional Services Agreement.............................................................Section 11.03
True-Up Payment...........................................................................Section 5.07(a)
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of September 9, 2003
(this "Agreement"), between CONOPCO, INC., --------- a New
York corporation ("Seller"), and CHURCH & ▇▇▇▇▇▇ CO., INC.,
a Delaware corporation ("Purchaser"). ------ ---------
WHEREAS Seller, directly or indirectly through certain of its affiliates
(collectively, the "Seller Affiliates"), manufactures (or has made), markets,
distributes and sells (i) the Mentadent brand (the "Mentadent Brand") of oral
care products, (ii) the Close-Up brand (the "Close-Up Brand") of toothpaste
products, (iii) the Aim brand (the "Aim Brand") of toothpaste products and (iv)
the Pepsodent brand (the "Pepsodent Brand" and, together with the Mentadent
Brand, the Close-Up Brand and the Aim Brand, the "Brands") of toothpaste
products. Seller wishes to sell to Purchaser, and Purchaser wishes to purchase
from Seller and the Seller Affiliates, the Transferred Assets (as defined in
Section 1.02(a)) of the Businesses (as defined in Section 12.05(b)), upon the
terms and subject to the conditions of this Agreement. In addition, Purchaser
has agreed to assume from Seller and the Seller Affiliates the Assumed
Liabilities (as defined in Section 1.04(a)), upon the terms and subject to the
conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
Purchase and Sale of Transferred Assets
---------------------------------------
SECTION 1.01. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 2.01) Seller
agrees to, and agrees to cause the Seller Affiliates to, sell, transfer, assign
and deliver to Purchaser, and Purchaser agrees to purchase, acquire and accept
from Seller and the Seller Affiliates, all of Seller's and the Seller
Affiliates' right, title and interest in, to and under the Transferred Assets
for (i) an aggregate purchase price of $104,000,000 (the "Purchase Price"),
payable as set forth in Section 2.02(b) and subject to adjustment as set forth
in Section 2.03, (ii) the additional payments payable as set forth in Section
5.07 and (iii) the assumption of the Assumed Liabilities. The purchase and sale
of the Transferred Assets and the assumption of the Assumed Liabilities are
collectively referred to in this Agreement as the "Acquisition".
SECTION 1.02. Transferred Assets and Excluded Assets. (a) The term
"Transferred Assets" means all of Seller's and the Seller Affiliates' right,
title and interest in, to and under the following assets as they exist at the
time of Closing:
(i) all finished goods ("Inventory") owned by Seller or any of the Seller
Affiliates on the Closing Date that are used or held for use
exclusively in the operation or conduct of the Businesses
(collectively, the "Transferred Inventory");
(ii) all other tangible personal property and interests therein, including
all machinery, equipment, samples retained for manufacturing quality
control purposes, furniture, furnishings, parts, spare parts, molds
and vehicles ("Equipment"), owned by Seller or any of the Seller
Affiliates that are used or held for use exclusively in the operation
or conduct of the Businesses in the Purchaser Countries, including
those set forth in Schedule 1.02(a)(ii) (the "Transferred Equipment");
(iii) all patents (including all reissues, divisions, continuations and
extensions thereof), patent applications and patent rights owned by
Seller or any of the Seller Affiliates that are used or held for use
exclusively in the operation or conduct of the Businesses in the
Purchaser Countries (other than any with respect to the Close-Up
Brand), including those set forth in Schedule 1.02(a)(iii)
(collectively, the "Transferred Patents");
(iv) all trademarks, trademark registrations and trademark applications
owned by Seller or any of the Seller Affiliates that are used or held
for use exclusively in the operation or conduct of the Businesses in
the Purchaser Countries, including those set forth in Schedule
1.02(a)(iv), together with the goodwill associated exclusively
therewith, other than trademarks, trademark registrations and
trademark applications, including the goodwill associated exclusively
therewith, included in the Excluded Close-Up Trademarks and Technology
(as defined in Section 1.02(b)(xi)) (collectively, the "Transferred
Trademarks");
(v) all trade names and domain names owned by Seller or any of the Seller
Affiliates that are used or held for use exclusively in the operation
or conduct of the Businesses in the Purchaser Countries, including
those set forth in Schedule 1.02(a)(v) and all copyrights owned by
Seller or any of the Seller Affiliates that are used or held for use
exclusively in the operation or conduct of the Businesses, other than
trade names, domain names and copyrights included in the Excluded
Close-Up Trademarks and Technology (collectively, the "Other
Transferred Intellectual Property" and, together with the Transferred
Patents and the Transferred Trademarks, the "Transferred Intellectual
Property");
(vi) all trade secrets, proprietary inventions, know-how, formulae,
processes, procedures, research records, records of inventions, test
information, market surveys and marketing know-how ("Technology")
owned by Seller or any of the Seller Affiliates that are used or held
for use exclusively in the operation or conduct of the Businesses,
other than Technology included in the Excluded Close-Up Trademarks and
Technology (the "Transferred Technology");
(vii) all permits, licenses, franchises, approvals or authorizations from
any Governmental Entity (as defined in Section 3.03) ("Permits") that
are used or held for use exclusively in the operation or conduct of
the Businesses (the "Transferred Permits");
(viii) all legally binding contracts, leases, subleases, licenses,
agreements, commitments and other legally binding instruments
("Contracts") set forth in Schedule 3.07, and all other Contracts to
which Seller or any of the Seller Affiliates is a party or by which
Seller or any of the Seller Affiliates is bound that arise exclusively
out of the operation or conduct of the Businesses (the "Transferred
Contracts");
(ix) all rights, claims and causes of action to the extent relating to any
other Transferred Asset or any Assumed Liability, other than (i) any
such items arising under insurance policies to the extent such rights,
claims and causes of action relate to occurrences arising out of or
resulting from the operation or conduct of the Businesses prior to
Closing and (ii) all Seller's or any of the Seller Affiliates' rights
to assert claims, demands, actions, suits and causes of action,
whether class, individual or otherwise in nature, in law or in equity,
including any claim, demand, action, suit or cause of action for
damages, injunctive relief, declaratory relief or other relief under
the antitrust laws of any foreign country or the United States or any
State thereof, unfair competition, unfair practices, price
discrimination, unitary pricing, consumer protection, fraud prevention
or trade practice laws (in any such case, domestic or foreign)
(collectively, "Claims"), that Seller or any of the Seller
Affiliates, in any capacity, ever had, now have or may or shall have
in the future, whether known or unknown, to the extent related to (x)
the Businesses' purchase or procurement of any good, service or
product or (y) Seller's or any of the Seller Affiliates' purchase or
procurement of any good, service or product for, or on behalf of, the
Businesses, in either case, at any time up until the Closing, along
with any and all recoveries by settlement, judgment or otherwise in
connection with any such Claims;
(x) all books of account, general, financial, accounting and personnel
records, costed bills of materials (other than those the transfer of
which are prohibited by a confidentiality agreement or other
confidentiality restrictions), files, invoices, customers' and
suppliers' lists, other distribution lists, billing records, sales and
promotional literature, manuals and customer and supplier
correspondence owned by Seller or any of the Seller Affiliates that
are used or held for use exclusively in, or that arise exclusively out
of, the operation or conduct of the Businesses, except to the extent
relating to the Excluded Assets (as defined in Section 1.02(b)) or the
Retained Liabilities (as defined in Section 1.04(b)) and except to the
extent not reasonably separable from documents that do not relate
exclusively to the Businesses; and
(xi) all pre-paid expenses that are used or held for use exclusively in, or
that arise exclusively out of, the operation or conduct of the
Businesses.
(b) Purchaser acknowledges and agrees that it shall not, directly or
indirectly, manufacture, market, distribute or sell any products under any of
the Brands in any country outside the United States, Canada and Puerto Rico (the
"Purchaser Countries") (it being understood that (x) if Seller notifies
Purchaser in writing, or if Purchaser otherwise has knowledge, that a customer
or other third person to which Purchaser has sold products is exporting any
products under any of the Brands from, or is marketing, distributing or selling
any products under any of the Brands outside of, the Purchaser Countries,
Purchaser shall promptly notify in writing such customer or third person (with a
copy to Seller) of the existence of this Agreement and the prohibition on such
activities outside of the Purchaser Countries and (y) if requested by Seller in
writing following its receipt of a copy of the correspondence referred to in the
immediately preceding clause (x), Seller and Purchaser shall agree to confer in
good faith to develop a mutually agreed resolution of any issues arising from a
situation described in the immediately preceding clause (x)). Purchaser agrees
that it will not register, apply to register or otherwise use any Transferred
Trademark relating to any Brand in any country other than the Purchaser
Countries; provided, however, that Purchaser may manufacture (or have made) any
Products outside the Purchaser Countries solely for sale within the Purchaser
Countries. In addition, notwithstanding anything to the contrary contained in
this Agreement, the Transferred Assets shall not include any assets or rights
other than the assets specifically listed or described in Section 1.02(a) and
shall expressly exclude the following assets (collectively, the "Excluded
Assets"), which shall not be sold, transferred, assigned or delivered to
Purchaser:
(i) all cash, cash equivalents or securities of Seller or any of the
Seller Affiliates;
(ii) all accounts, notes receivable and similar rights to receive payments
of Seller or any of the Seller Affiliates on the Closing Date arising
out of the operation or conduct of the Businesses on or prior to the
Closing Date;
(iii) all rights, claims and causes of action of Seller or any of the
Seller Affiliates relating to any other Excluded Asset or any Retained
Liability, including (A) any such items arising under insurance
policies and (B) all Claims that Seller or any of the Seller
Affiliates, in any capacity, ever had, now have or may or shall have
in the future, whether known or unknown, to the extent related to (x)
the Businesses' purchase or procurement of any good, service or
product or (y) Seller's or any of the Seller Affiliates' purchase or
procurement of any good, service or product for, or on behalf of, the
Businesses, in either case, at any time up until the Closing, along
with any and all recoveries by settlement, judgment or otherwise in
connection with any such Claims;
(iv) any shares of capital stock of any affiliate of Seller or any of the
Seller Affiliates;
(v) any assets relating to any employee benefit plan in which any
employees of Seller, any of the Seller Affiliates or any of their
respective affiliates participate;
(vi) any refunds or credits, claims for refunds or credits or rights to
receive refunds or credits from any Taxing Authority (as defined in
Section 3.09(a)) with respect to Taxes (as defined in Section 3.09(a))
paid or to be paid by Seller, any of the Seller Affiliates or any of
their respective affiliates relating to any Pre-Closing Tax Period (as
defined in Section 3.09(a));
(vii) any records (including accounting records) related to Taxes (as
defined in Section 3.09(a)) paid or payable by Seller, any of the
Seller Affiliates or any of their respective affiliates and all
financial and Tax records relating to the Businesses that form part of
Seller's, any of the Seller Affiliates' or any of their respective
affiliates' general ledger;
(viii) all records prepared in connection with the sale of the Businesses,
including bids received from third persons and analyses relating to
the Businesses;
(ix) all rights of Seller or any of the Seller Affiliates under this
Agreement and any other agreements, certificates and instruments
relating to the sale of the Businesses (or any portion thereof) or
otherwise delivered in connection with this Agreement;
(x) the names and marks "Unilever", "Bestfoods", "Unilever Bestfoods",
"Unilever Home & Personal Care", "Faberge", "▇▇▇▇▇▇ ▇▇▇▇▇▇",
"▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇'▇", "Lever Brothers" and "Lever Ponds" (in any style
or design), and any name or ▇▇▇▇ derived from or including any of the
foregoing;
(xi) any copyrights, trademarks, trademark registrations and trademark
applications, together with the goodwill associated therewith, and any
Technology, in each case with respect to the Close-Up Brand (the
"Excluded Close-Up Trademarks and Technology"), except for any rights
in respect of such Excluded Close-Up Trademarks and Technology
expressly granted to Purchaser pursuant to the Excluded Close-Up
Trademarks and Technology License (as defined in Section 1.06);
(xii) all division or corporate-level services of the type currently
provided to the Businesses by Seller, any of the Seller Affiliates or
any of their respective affiliates; and
(xiii) all real property, leaseholds and other interests in real property
of Seller or any of the Seller Affiliates.
(c) Purchaser acknowledges and agrees that, notwithstanding anything to the
contrary contained in this Agreement, Seller, the Seller Affiliates and their
respective affiliates may continue to manufacture, market, distribute and sell,
or have manufactured, marketed, distributed or sold on their behalf, products
under each of the Brands outside the Purchaser Countries (it being understood
that (x) if Purchaser notifies Seller in writing, or if Seller otherwise has
knowledge, that a customer or other third person to which Seller has sold
products is importing any products under any of the Brands into, or is
marketing, distributing or selling any products under any of the Brands in, the
Purchaser Countries, Seller shall promptly notify in writing such customer or
third person (with a copy to Purchaser) of the existence of this Agreement and
the prohibition on such activities in the Purchaser Countries and (y) if
requested by Purchaser in writing following its receipt of a copy of the
correspondence referred to in the immediately preceding clause (x), Purchaser
and Seller shall agree to confer in good faith to develop a mutually agreed
resolution of any issues arising from a situation described in the immediately
preceding clause (x)). Notwithstanding anything to the contrary contained in
this Agreement, Seller may manufacture (or have made) any products under any of
the Brands in any Purchaser Country solely for sale outside the Purchaser
Countries.
SECTION 1.03. Consents to Certain Assignments. (a) Notwithstanding anything
to the contrary contained in this Agreement, this Agreement shall not constitute
an assignment or an attempted assignment of any asset or any claim or right or
any benefit arising under or resulting from such asset to the extent that an
assignment or an attempted assignment thereof, without the consent of a third
party, would constitute a breach, default, violation or other contravention of
the rights of such third party, would be ineffective with respect to any party
to an agreement concerning such asset, claim or right, or would in any way
adversely affect the rights of Seller or any of the Seller Affiliates or, upon
transfer, Purchaser under such asset, claim or right until such time as such
consent has been obtained. If any transfer or assignment by Seller or any of the
Seller Affiliates to Purchaser, or any assumption by Purchaser of, any interest
in, or liability, obligation or commitment under, any asset, claim or right
requires the consent of a third party, then such transfer or assignment or
assumption shall be made subject to such consent being obtained. Purchaser
agrees that neither Seller nor any of the Seller Affiliates shall have any
liability whatsoever to Purchaser arising out of or relating to the failure to
obtain any such consent that may be required in connection with the transactions
contemplated by this Agreement or because of any circumstances resulting
therefrom. Purchaser further agrees that no representation, warranty or covenant
of Seller herein shall be breached or deemed breached, and no condition shall be
deemed not satisfied, as a result of (i) the failure to obtain any such consent,
(ii) any circumstances resulting therefrom or (iii) any suit, action or
proceeding (a "Proceeding") or investigation commenced or threatened by or on
behalf of any person arising out of or relating to the failure to obtain any
such consent or any circumstances resulting therefrom. On or prior to the
Closing Date, Seller shall provide commercially reasonable assistance to
Purchaser (not including the payment of any consideration) to secure any consent
that may be required in connection with the transactions contemplated by this
Agreement.
(b) If any such consent is not obtained prior to the Closing, the Closing
shall nonetheless take place on the terms set forth herein and, thereafter,
Purchaser shall use its commercially reasonable efforts to secure such consent
as promptly as practicable after the Closing and Seller shall provide or cause
to be provided all commercially reasonable assistance to Purchaser (not
including the payment of any consideration) reasonably requested by Purchaser to
secure such consent after the Closing or cooperate with Purchaser (at
Purchaser's expense) in any lawful and commercially reasonable arrangement
reasonably proposed by Purchaser under which (i) Purchaser shall obtain (without
infringing upon the legal rights of such third party or violating any Applicable
Law (as defined in Section 3.03)) the economic claims, rights and benefits (net
of the amount of any related Tax costs imposed on Seller, any of the Seller
Affiliates or any of their respective affiliates) under the asset, claim, right
or benefit with respect to which the consent has not been obtained in accordance
with this Agreement and (ii) Purchaser shall assume any related economic burden
(including the amount of any related Tax costs imposed on Seller, any of the
Seller Affiliates or any of their respective affiliates) with respect to the
asset, claim, right or benefit with respect to which the consent has not been
obtained in accordance with this Agreement.
SECTION 1.04. Assumption of Liabilities. (a) Upon the terms and subject to
the conditions of this Agreement, Purchaser shall assume, effective as of the
Closing, and shall pay, perform and discharge when due, only the following
obligations, liabilities and commitments of any nature, whether known or
unknown, express or implied, primary or secondary, direct or indirect,
liquidated, absolute, accrued, contingent or otherwise and whether due or to
become due, arising out of, relating to or otherwise in respect of the
Transferred Assets, the Businesses or the operation or conduct of the Businesses
(collectively, the "Assumed Liabilities"):
(i) all obligations, liabilities and commitments of Seller or any of the
Seller Affiliates under the Transferred Contracts and the Transferred
Permits to the extent such obligations, liabilities and commitments
relate to the period from and after the Closing;
(ii) all obligations, liabilities and commitments for refunds, adjustments,
allowances, repairs, exchanges, returns and warranty or similar claims
(including all Proceedings relating to any such obligations,
liabilities or commitments) in respect of any and all products sold by
the Businesses before the Closing, other than obligations, liabilities
and commitments specified in Section 1.04(b)(viii) (collectively,
"Product Claims");
(iii) all Taxes arising out of, imposed on, relating to or in respect of
the Businesses or the Transferred Assets for all taxable periods other
than the Pre-Closing Tax Periods;
(iv) all obligations, liabilities and commitments (including under
Environmental Laws) accruing, arising out of or relating to the
operation or conduct of the Businesses or the use or ownership of the
Transferred Assets from and after the Closing, including obligations,
liabilities and commitments in respect of (A) any and all products
sold by the Businesses from and after the Closing (including in
respect of product liability claims) and (B) the matter described
under Item II in Schedule 1.04(b)(vi)(B) to the extent accruing,
arising out of or relating to the operation or conduct of the
Businesses or the use or ownership of the Transferred Assets from and
after the Closing; and
(v) all obligations, liabilities and commitments (A) arising under or in
respect of (x) the advertising commitments set forth in Schedule
1.04(a)(v) or (y) any advertising commitments entered into or assumed
by Seller or any of the Seller Affiliates on or after the date of this
Agreement in accordance with the terms of this Agreement, in each case
only to the extent the advertisement associated therewith runs in the
media from and after the Closing, (B) for trade promotions (x) as set
forth in Schedule 1.04(a)(v) or (y) planned or committed on or after
the date of this Agreement in accordance with the terms of this
Agreement, in the case of clauses (x) and (y), allocated between
Seller and Purchaser on the basis of a mutually agreed upon good faith
determination of whether the related sale is made prior to, or from
and after, the Closing, or (z) if such promotions commence from and
after the Closing and (C) for consumer coupons that are redeemed by
consumers from and after the Closing (the determination of when such
redemption occurred to be mutually agreed upon by Seller and Purchaser
acting in good faith), in each case in respect of any and all Products
of the Businesses (including the Transferred Inventory).
(b) Notwithstanding anything to the contrary contained in this Agreement,
Purchaser shall not assume any Retained Liability, each of which shall be
retained and paid, performed and discharged when due by Seller and the Seller
Affiliates. The term "Retained Liabilities" means:
(i) all obligations, liabilities and commitments of Seller or any of the
Seller Affiliates not listed or described as Assumed Liabilities in
Section 1.04(a);
(ii) all accounts payable of Seller or any of the Seller Affiliates on the
Closing Date arising out of the operation or conduct of the Businesses
on or before the Closing Date;
(iii) all Taxes arising out of, imposed on, relating to or in respect of
the Businesses or the Transferred Assets for any Pre-Closing Tax
Period;
(iv) all obligations, liabilities and commitments of Seller or any of the
Seller Affiliates to the extent relating to or arising out of the
Excluded Assets;
(v) all obligations, liabilities and commitments of Seller or any of the
Seller Affiliates to the extent solely arising from the employment of
any employee by Seller or any of the Seller Affiliates;
(vi) all obligations, liabilities and commitments of Seller or any of the
Seller Affiliates to the extent relating to or arising out of (A) any
suit, action or Proceeding (other than any Proceeding relating to
Product Claims) pending prior to the Closing and (B) the matter
described under (x) Item I in Schedule 1.04(b)(vi)(B) and (y) Item II
in Schedule 1.04(b)(vi)(B) to the extent accruing, arising out of or
relating to the operation or conduct of the Businesses or the use or
ownership of the Transferred Assets prior to the Closing;
(vii) all obligations, liabilities and commitments under Environmental Laws
to the extent arising out of or relating to the operation or conduct
of the Businesses or the use or ownership of the Transferred Assets in
each case prior to the Closing;
(viii) all obligations, liabilities and commitments for refunds,
adjustments, allowances, repairs, expenses, returns and warranty or
similar claims initiated by a customer or by Seller in respect of
Mentadent Brand whitening kits, regardless of whether such whitening
kits are returned before, on or after the Closing Date; and
(ix) all obligations, liabilities and commitments (A) arising under or in
respect of any advertising commitments entered into by Seller or any
of the Seller Affiliates only to the extent the advertisement
associated therewith runs in the media prior to the Closing, (B) for
trade promotions implemented prior to the Closing, allocated between
Seller and Purchaser on the basis of a mutually agreed upon good faith
determination of whether the related sale is made prior to, or from
and after, the Closing, or (C) for consumer coupons that are redeemed
by consumers prior to the Closing (the determination of when such
redemption occurred to be mutually agreed upon by Seller and Purchaser
acting in good faith), in each case in respect of any and all Products
of the Businesses.
(c) Purchaser agrees to reimburse Seller and any of the Seller Affiliates,
dollar for dollar, in the event that any of Seller's or such Seller Affiliate's
customers offset the cost of any Products returned by such customer which are
the responsibility of Purchaser pursuant to Section 1.04(a)(ii), in each case
against accounts payable by such customer to Seller or such Seller Affiliate.
Seller agrees to, and to cause the Seller Affiliates to, provide notice to
Purchaser of any such offset for which Seller or such Seller Affiliate is
entitled to be reimbursed by Purchaser pursuant to this Section 1.04(c).
Purchaser shall pay Seller or such Seller Affiliate promptly following receipt
of notice of any such offset by a customer (together with supporting
documentation). Seller agrees to reimburse Purchaser and any of its affiliates,
dollar for dollar, in the event that any of Purchaser's or such affiliate's
customers offset the cost of any Products returned by such customer which are
the responsibility of Seller pursuant to Section 1.04(b)(viii), in each case
against accounts payable by such customer owed to (or for the account of)
Purchaser or such affiliate. Purchaser agrees to, and to cause its affiliates
to, provide notice to Seller of any such offset for which Purchaser or such
affiliate is entitled to be reimbursed by Seller pursuant to this Section
1.04(c). Seller shall pay Purchaser or such affiliate promptly following receipt
of notice of any such offset by a customer (together with supporting
documentation). Purchaser agrees that it will work in good faith (at no cost to
Purchaser) with Seller to develop programs or policies designed to minimize the
amount of refunds, adjustments, allowances, repairs, expenses, returns and
warranty or similar claims in respect of Mentadent Brand whitening kits. In the
event that the implementation of such programs and policies have not exhausted
Purchaser's finished goods inventory of Mentadent Brand whitening kits within
six months following the Closing, Purchaser shall so notify Seller in writing
and Seller shall reimburse Purchaser for the difference, if any, between (x) the
amount Purchaser paid for the finished goods inventory of Mentadent Brand
whitening kits on the Closing Date as reflected on the Statement (as defined in
Section 2.03(a)) and (y) the value of any such remaining finished goods
inventory of Mentadent Brand whitening kits on the date of such notification
calculated using Purchaser's cost therefor as reflected on the Statement.
(d) Purchaser agrees to reimburse Seller and any of the Seller Affiliates,
dollar for dollar, in the event that any person offsets the amount of any
advertising commitments, trade promotions, consumer promotions, coupon
redemption or any other deductions which are the responsibility of Purchaser
pursuant to Section 1.04(a)(v). Seller agrees to reimburse Purchaser, dollar for
dollar, in the event that any person offsets the amount of any advertising
commitments, trade promotions, consumer promotions, coupon redemption or any
other deductions which are the responsibility of Seller or any Seller Affiliate
pursuant to Section 1.04(b)(ix). Seller and Purchaser agree to cooperate to
reconcile the amounts of any such offsets on a regular basis, but in any event
no less frequently than monthly.
SECTION 1.05. Excluded Patents and Technology License. At the Closing,
Seller will execute and deliver a royalty-free, non-exclusive license (in the
form attached hereto as Exhibit A) (the "Excluded Patents and Technology
License") to Purchaser with respect to any patent or Technology owned by Seller
or any of the Seller Affiliates that is used in connection with the operation or
conduct of the Businesses in the Purchaser Countries on the Closing Date and
that is not included in the Transferred Technology or the Excluded Close-Up
Trademarks and Technology (the "Excluded Patents and Technology" and, together
with the Excluded Close-Up Trademarks and Technology licensed to Purchaser under
the Excluded Close-Up Trademarks and Technology License (as defined in Section
1.06), the "Licensed Patents, Trademarks and Technology").
SECTION 1.06. Excluded Close-Up Trademarks and Technology License. At the
Closing, Seller will execute and deliver a royalty-free, exclusive license (in
the form attached hereto as Exhibit B) to Purchaser with respect to the Excluded
Close-Up Trademarks and Technology (the "Excluded Close-Up Trademarks and
Technology License").
SECTION 1.07. Lemelson Sublicense. At the Closing, Seller and Purchaser
shall enter into a sublicense agreement (in the form attached hereto as Exhibit
C) (the "Lemelson Sublicense").
SECTION 1.08. Transferred Technology License. At the Closing, Purchaser
will execute and deliver a royalty-free, non-exclusive license (in the form
attached hereto as Exhibit D) to Seller with respect to the Transferred
Technology (the "Transferred Technology License").
ARTICLE II
Closing and Post-Closing Purchase Price Adjustment
SECTION 2.01. Closing. The closing of the Acquisition (the "Closing") shall
take place at the offices of Cravath, Swaine & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on the second business day following the
satisfaction (or, to the extent permitted, the waiver) of the condition set
forth in Section 6.01(a), or, if on such day any other condition set forth in
Article VI has not been satisfied (or, to the extent permitted, waived by the
party or parties entitled to the benefit thereof), as soon as practicable after
all the conditions set forth in Article VI have been satisfied (or, to the
extent permitted, waived by the party or parties entitled to the benefit
thereof), or at such other place, time and date as may be agreed by Seller and
Purchaser. The date on which the Closing occurs is referred to in this Agreement
as the "Closing Date". The Closing shall be deemed to be effective as of the
close of business on the Closing Date.
SECTION 2.02. Transactions To Be Effected at the Closing. At the Closing:
(a) Seller shall deliver or cause to be delivered to Purchaser (i) such
appropriately executed bills of sale, assignments and other instruments of
transfer relating to the Transferred Assets (other than the Transferred
Intellectual Property), (ii) duly executed assignments of the U.S. and Canadian
Transferred Trademarks, in a form suitable for recording in the U.S. and
Canadian Trademark Offices, and a form of general assignment for all other
Transferred Trademarks mutually agreed upon by Seller and Purchaser, (iii) a
duly executed general assignment of the Transferred Patents, (iv) duly executed
general assignments of all Other Transferred Intellectual Property, (v) an
appropriately executed counterpart of the Transitional Services Agreement, (vi)
an appropriately executed counterpart of the Transferred Technology License,
(vii) an appropriately executed counterpart of the Excluded Patents and
Technology License, (viii) an appropriately executed counterpart of the Excluded
Close-Up Trademarks and Technology License, (ix) an appropriately executed
counterpart of the Manufacturing Agreement and (x) an appropriately executed
counterpart of the Lemelson Sublicense (it being understood that such bills of
sale, assignments and other instruments of transfer shall not require Seller to
make any additional representations, warranties or covenants, expressed or
implied, not contained in this Agreement); and
(b) Purchaser shall deliver to Seller and the Seller Affiliates (i)
payment, by wire transfer of immediately available funds to one or more accounts
designated in writing by Seller (such designation to be made at least one
business day prior to the Closing Date), in an amount equal to (A) the Purchase
Price plus or minus (B) an estimate, prepared by Seller in good faith and
delivered to Purchaser at least one business day prior to the Closing Date, of
any adjustment, not to exceed $2,000,000 (it being understood that this shall
not constitute a limit on the Final Purchase Price), to the Purchase Price under
Section 2.03 (the Purchase Price plus or minus such estimate of any adjustment
under Section 2.03 being hereinafter called the "Closing Date Payment"), (ii)
appropriately executed counterparts to such bills of sale, assignments and other
instruments of transfer, and appropriately executed assumption agreements and
other instruments of assumption providing for the assumption of the Assumed
Liabilities, (iii) an appropriately executed counterpart of the Transitional
Services Agreement, (iv) an appropriately executed counterpart of the
Transferred Technology License, (v) an appropriately executed counterpart of the
Excluded Patents and Technology License, (vi) an appropriately executed
counterpart of the Excluded Close-Up Trademarks and Technology License, (vii) an
appropriately executed counterpart of the Manufacturing Agreement and (viii) an
appropriately executed counterpart of the Lemelson Sublicense.
SECTION 2.03. Post-Closing Purchase Price Adjustment. (a) The Statement.
Within 60 days after the Closing Date, Seller shall prepare and deliver to
Purchaser a statement (the "Statement"), setting forth the book value of the
Transferred Inventory as of the close of business on the Closing Date ("Closing
Inventory") calculated in the same way, using the same accounting principles,
practices, methodologies and policies, as the line item comprising inventories
on the Statement of Assets (as defined in Section 3.04) (including those set
forth in Schedule 2.03), whether or not doing so is in accordance with United
States generally accepted accounting principles ("GAAP"). After the Closing
Date, at Seller's request, Purchaser shall assist Seller and its representatives
in the preparation of the Statement and shall provide Seller and its
representatives any information reasonably requested and shall provide them
reasonable access at all reasonable times during normal business hours to the
personnel, properties, books and records relating exclusively to the Businesses
for such purpose.
(b) Objections; Resolution of Disputes.
(i) Unless Purchaser notifies Seller in writing within 45 days after
Seller's delivery of the Statement of any objection to the computation
of Closing Inventory set forth therein (the "Notice of Objection"),
the Statement shall become final and binding. During such 45-day
period Purchaser and its representatives shall be permitted to review
the working papers and have access to the personnel of Seller relating
to the Statement. Any Notice of Objection shall specify in reasonable
detail the basis for the objections set forth therein. Any Notice of
Objection shall include only objections based on (A) mathematical
errors in the computation of Closing Inventory or (B) Closing
Inventory not having been calculated in accordance with the consistent
application of the same accounting principles, practices,
methodologies and policies used in the preparation of the Statement of
Assets (including those set forth in Schedule 2.03). Seller and
Purchaser acknowledge that (x) the sole purpose of the determination
of Closing Inventory is to adjust the Closing Date Payment so as to
reflect, based solely on the operation of the Businesses, the amount,
if any, by which the book value of the Transferred Inventory as of the
close of business on the Closing Date deviates from the Target
Inventory and (y) such amount, if any, can be determined only if the
calculation is done using the same accounting principles, practices,
methodologies and policies (including those set forth in Schedule
2.03).
(ii) If Purchaser provides the Notice of Objection to Seller within such
45-day period, Purchaser and Seller shall, during the 30-day period
following Seller's receipt of the Notice of Objection, attempt in good
faith to resolve Purchaser's objections. During such 30-day period,
Seller and its representatives shall be permitted to review the
working papers of Purchaser relating to the Notice of Objection and
the basis therefor. If Purchaser and Seller are unable to resolve all
such objections within such 30-day period, the matters remaining in
dispute shall be submitted to KPMG LLP (or, if such firm declines to
act, to another nationally recognized public accounting firm mutually
agreed upon by Purchaser and Seller and, if Purchaser and Seller are
unable to so agree within 10 days after the end of such 30-day period,
then Purchaser and Seller shall each select such a firm and such firms
shall jointly select a third nationally recognized firm to resolve the
disputed matters (such selected firm being the "Independent Expert")).
The parties shall instruct the Independent Expert to render its
reasoned written decision as promptly as practicable but in no event
later than 60 days after its selection. The resolution of disputed
items by the Independent Expert shall be final and binding, and the
determination of the Independent Expert shall constitute an arbitral
award that is final, binding and non-appealable and upon which a
judgment may be entered by a court having jurisdiction thereover. The
fees and expenses of the Independent Expert shall be borne equally by
Purchaser and Seller. After the Statement shall have become final and
binding, neither Purchaser nor Seller shall have any further right to
make any claims against the other party in respect of (i) any element
of Closing Inventory that Purchaser raised, or could have raised, in
the Notice of Objection or (ii) any payment made pursuant to Section
2.03(c).
(c) Adjustment Payment. The Purchase Price shall be increased by the amount
by which Closing Inventory exceeds $10,746,000 (the "Target Inventory"), and the
Purchase Price shall be decreased by the amount by which Closing Inventory is
less than the Target Inventory (the Purchase Price as so increased or decreased
being hereinafter called the "Adjusted Purchase Price"). Within 10 days after
the Statement has become final and binding in accordance with Section 2.03(b),
(i) if the Closing Date Payment is less than the Adjusted Purchase Price,
Purchaser shall pay to Seller an amount equal to such difference, plus simple
interest thereon at a rate of 3.0% per annum from the Closing Date to the date
payment is made in full, and (ii) if the Closing Date Payment is greater than
the Adjusted Purchase Price, Seller shall pay to Purchaser an amount equal to
such difference, plus simple interest thereon at a rate of 3.0% per annum from
the Closing Date to the date payment is made in full (the Closing Date Payment
as so increased or decreased being hereinafter called the "Final Purchase
Price"). Any such payment hereunder shall be made by wire transfer of
immediately available funds to an account designated in writing by Purchaser or
Seller, as the case may be.
(d) Post-Closing Books and Records. Except for the consummation of the
Closing, Purchaser and Seller agree that on the Closing Date itself the
Businesses shall be conducted in the ordinary course in a manner consistent with
past practice. From and after the Closing and to and including the date on which
the Statement shall have become final and binding, (i) Purchaser shall not take
any action with respect to the accounting books and records of the Businesses on
which the Statement is to be based that would affect the Statement of Assets or
the Statement and (ii) without limiting the generality of the foregoing clause
(i), no changes shall be made in any reserve or other account existing as of the
date of the Statement of Assets that would affect the Statement of Assets or the
Statement except as a result of events occurring after the date of the Statement
of Assets and, in such event, only in a manner consistent with the past
practices of the Businesses.
ARTICLE III
Representations and Warranties of Seller
Seller hereby represents and warrants to Purchaser as follows:
SECTION 3.01. Organization and Standing. Seller is validly existing and in
good standing under the laws of the State of New York. Each of the Seller
Affiliates is validly existing under the laws of its jurisdiction of
incorporation. Each of Seller and each of the Seller Affiliates has full
corporate power and authority to enable it to own, lease or otherwise hold the
Transferred Assets and the Licensed Patents, Trademarks and Technology owned,
leased or otherwise held by it and to conduct the Businesses as presently
conducted by it.
SECTION 3.02. Authority; Execution and Delivery; Enforceability. Seller has
full corporate power and authority to execute this Agreement and the other
agreements and instruments to be executed and delivered in connection with this
Agreement (including the Transferred Technology License, the Excluded Patents
and Technology License, the Excluded Close-Up Trademarks and Technology License,
the Transitional Services Agreement, the Manufacturing Agreement and the
Lemelson Sublicense) (the "Ancillary Agreements") to which it is, or is
specified to be, a party and to consummate the transactions contemplated to be
consummated by it by this Agreement and such Ancillary Agreements. Each of the
Seller Affiliates has full corporate power and authority to execute the
Ancillary Agreements to which it is, or is specified to be, a party and to
consummate the transactions contemplated to be consummated by it by such
Ancillary Agreements. Seller has taken all corporate action required by its
Certificate of Incorporation and By-laws to authorize the execution and delivery
of this Agreement and the Ancillary Agreements to which it is, or is specified
to be, a party and to authorize the consummation of the transactions
contemplated to be consummated by it by this Agreement and such Ancillary
Agreements. Each of the Seller Affiliates has taken all corporate action
required by its comparable organizational documents to authorize the execution
and delivery of the Ancillary Agreements to which it is, or is specified to be,
a party and to authorize the consummation of the transactions contemplated to be
consummated by it by such Ancillary Agreements. Seller has duly executed and
delivered this Agreement and prior to the Closing will have duly executed and
delivered each Ancillary Agreement to which it is, or is specified to be, a
party, and this Agreement constitutes, and each Ancillary Agreement to which it
is, or is specified to be, a party will after the Closing constitute, its legal,
valid and binding obligation, enforceable against it in accordance with its
terms subject, as to enforcement, to applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting creditors' rights generally
and to general equitable principles. Each of the Seller Affiliates prior to the
Closing will have duly executed and delivered each Ancillary Agreement to which
it is, or is specified to be, a party, and each Ancillary Agreement to which it
is, or is specified to be, a party will after the Closing constitute its legal,
valid and binding obligation, enforceable against it in accordance with its
terms subject, as to enforcement, to applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting creditors' rights generally
and to general equitable principles.
SECTION 3.03. No Conflicts or Violations; No Consents or Approvals
Required. The execution and delivery by Seller of this Agreement do not, the
execution and delivery by Seller and each of the Seller Affiliates of each
Ancillary Agreement to which it is, or is specified to be, a party will not, and
the consummation of, in the case of Seller, the transactions contemplated to be
consummated by it by this Agreement and such Ancillary Agreements, or, in the
case of each of the Seller Affiliates, the transactions contemplated to be
consummated by it by such Ancillary Agreements, will not conflict with, or
result in any breach of or constitute a default under, or result in the creation
of any Lien (as defined in Section 3.05) (other than Permitted Liens (as defined
in Section 3.05) or Liens caused by Purchaser) upon any of the Transferred
Assets or the Licensed Patents, Trademarks and Technology under, any provision
of (i) in the case of Seller, its Certificate of Incorporation or By-laws and,
in the case of each of the Seller Affiliates, its comparable organizational
documents, (ii) except as set forth in Schedule 3.03, any Contract to which
Seller or any of the Seller Affiliates is a party or by which any of the
Transferred Assets or the Licensed Patents, Trademarks and Technology is bound,
or (iii) any judgment, order or decree ("Judgment") or Federal, state, local,
foreign or provincial statute, law, ordinance, rule or regulation ("Applicable
Law") applicable to Seller or any of the Seller Affiliates or any of the
Transferred Assets, the Licensed Patents, Trademarks and Technology or the
Businesses, other than, in the case of clauses (ii) and (iii) above, any such
items that would not reasonably be expected to have a Businesses Material
Adverse Effect. No consent, approval or authorization ("Consent") of, or
registration, declaration or filing with, any Federal, state, local or foreign
court of competent jurisdiction, governmental agency, authority, instrumentality
or regulatory body (a "Governmental Entity"), is required to be obtained or made
by or with respect to Seller or any of the Seller Affiliates in connection with
the execution, delivery and performance of this Agreement or the Ancillary
Agreements or the consummation of the Acquisition or the other transactions
contemplated by this Agreement or the Ancillary Agreements, other than (A)
compliance with and filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), (B) compliance with and filings under
the Competition Act (Canada), (C) compliance with and filings and notifications
under Environmental Laws (as defined in Section 3.12(b)), (D) those that may be
required solely by reason of Purchaser's (as opposed to any other third party's)
participation in the Acquisition and the other transactions contemplated hereby
and by the Ancillary Agreements and (E) those the failure of which to obtain or
make would not reasonably be expected to have a Businesses Material Adverse
Effect.
SECTION 3.04. Financial Statements. (a) Schedule 3.04(a) sets forth (i) the
audited special-purpose Combined Statement of Assets to be sold at December 31,
2002 (the "Statement of Assets") and (ii) the audited special-purpose Combined
Statements of Direct Revenues and Expenses for the years ended December 31, 2002
and December 31, 2001, in each case of the Businesses, together with the notes
to such financial statements (such financial statements, together with the notes
to such financial statements, the "Financial Statements"). The Financial
Statements present fairly, in all material respects, the assets of the
Businesses as of December 31, 2002 and the related direct revenues and expenses
of their operations for each of the two years ended December 31, 2002 and
December 31, 2001, in conformity with GAAP.
(b) Schedule 3.04(b) sets forth the unaudited special-purpose statement of
direct revenues and expenses of the Businesses for the six months ended June 28,
2003 (the "Six Month Statement"). The Six Month Statement presents fairly, in
all material respects, the direct revenues and expenses of the Businesses for
the six months ended June 28, 2003, in conformity with GAAP (except as described
in Schedule 3.04(b)).
SECTION 3.05. Good and Valid Title. (a) Seller or one of the Seller
Affiliates has, or as of the Closing Date will have, good and valid title to all
Transferred Assets, other than those set forth in Schedule 3.05, in each case
free and clear of all mortgages, liens, charges, claims, pledges or other
encumbrances of any kind (collectively, "Liens"), except (i) such Liens as are
set forth in Schedule 3.05, (ii) mechanics', carriers', workmen's, repairmen's
or other like Liens arising or incurred in the ordinary course of business,
(iii) Liens arising under original purchase price conditional sales Contracts or
equipment leases with third parties entered into in the ordinary course of
business, (iv) Liens for Taxes and other governmental charges that are not due
and payable or that may thereafter be paid without penalty and (v) other
imperfections of title, licenses or encumbrances, if any, which do not
materially impair the continued use and operation of the assets to which they
relate in the conduct of the Businesses as presently conducted (the Liens
described in clauses (i) through (v) above are referred to collectively as
"Permitted Liens").
(b) This Section 3.05 does not relate to intellectual property, such items
being the subject of Section 3.06.
SECTION 3.06. Intellectual Property. (a) With respect to the Transferred
Patents and Transferred Trademarks, Schedules 1.02(a)(iii) and (iv),
respectively, set forth a list of the patents, patent applications, patent
rights, trademarks, trademark registration and application numbers and the
jurisdictions where such Transferred Patents and Transferred Trademarks are
registered or where applications have been filed. Except as set forth in
Schedule 3.06, Seller or one of the Seller Affiliates is the owner of the
Transferred Patents, the Transferred Trademarks, the Licensed Patents,
Trademarks and Technology, the Transferred Intellectual Property and the
Transferred Technology and no license fees in respect of any Transferred
Intellectual Property or Transferred Technology are paid to non-affiliated third
parties for the use by Seller or the applicable Seller Affiliate of the
Transferred Intellectual Property or Transferred Technology in those
jurisdictions listed in Schedule 1.02(a)(v). All registration, maintenance and
other fees with respect to the Transferred Intellectual Property that are
required to be paid prior to the date of this Agreement have been paid and, as
of the date of this Agreement, no such fees are due and owing. Purchaser
acknowledges and agrees that Seller does not make any representations or
warranties relating to the Transferred Trademarks for any Brand in jurisdictions
other than the Purchaser Countries.
(b) Except as set forth in Schedule 3.06, neither Seller nor any of the
Seller Affiliates has granted any license of any kind relating to any
Transferred Technology. Neither Seller nor any of the Seller Affiliates is bound
by or a party to any option, license or similar Contract relating to any
intellectual property of any other person for the use of such intellectual
property in the conduct of the Businesses, except (i) as set forth in Schedule
3.06, (ii) for nonexclusive licenses to Seller or the Seller Affiliates as
end-users of machinery and equipment in the ordinary course of business and
(iii) for so-called "shrink-wrap" and other non-customized license agreements
relating to computer software licensed to Seller or one of the Seller Affiliates
in the ordinary course of business. Except as set forth in Schedule 3.06, no
claims are pending or, to the knowledge of Seller, threatened, as of the date of
this Agreement against Seller or any of the Seller Affiliates by any person
claiming that use of the Transferred Intellectual Property, the Transferred
Technology or the Licensed Patents, Trademarks and Technology as presently used
infringes, dilutes or constitutes the misappropriation of the intellectual
property rights of any such person and Seller otherwise has not received any
written notice during the twelve month period immediately preceding the date of
this Agreement that its use of the Transferred Intellectual Property, the
Transferred Technology or the Licensed Patents, Trademarks and Technology
infringes, dilutes or constitutes the misappropriation of the intellectual
property rights of any third person. Except as set forth in Schedule 3.06,
Seller has not given any written notice during the twelve month period
immediately preceding the date of this Agreement to any third party of such
third party's infringement, dilution or misappropriation of the Transferred
Intellectual Property or the Transferred Technology. The Transferred
Intellectual Property, the Transferred Technology and the Licensed Patents,
Trademarks and Technology, taken as a whole, constitutes sufficient intellectual
property rights necessary to operate the Businesses as currently conducted,
other than to operate certain corporate-level applications.
(c) Except as set forth in Schedule 3.06 and other than (i) rights in
connection with co-packing arrangements and (ii) cross-promotional rights
entered into in the ordinary course of business, neither Seller nor any of the
Seller Affiliates is a party to or bound by any license, sublicense, option or
other agreement relating in whole or in part to the Transferred Intellectual
Property.
SECTION 3.07. Contracts. (a) Except as set forth in Schedule 3.07 and
except for Contracts relating to Excluded Assets, neither Seller nor any of the
Seller Affiliates is a party to or bound by any Contract that is used or held
for use exclusively in, or that arises exclusively out of, the operation or
conduct of the Businesses (other than (x) this Agreement and the Ancillary
Agreements and (y) Transferred Contracts entered into after the date of this
Agreement in accordance with the terms of this Agreement) and that is:
(i) a covenant not to compete (other than (A) pursuant to any radius
restriction contained in any lease, reciprocal easement or
development, construction, operating or similar agreement and (B) any
such covenant contained in any agreement with a broker) that
materially limits the conduct of the Businesses;
(ii) (A) a continuing Contract for the future purchase of materials,
supplies, equipment, raw materials, packaging or commodities (other
than (x) purchase Contracts and orders for raw materials,
work-in-process, finished goods, supplies, packaging materials and
other inventories in the ordinary course of business and (y) purchase
orders for the co-packing or manufacturing of Products of the
Businesses in the ordinary course of business), (B) a management,
service, consulting or other similar Contract (other than Contracts
for services in the ordinary course of business, including
transportation and warehousing Contracts) or (C) an advertising or
trade promotion Contract, in any such case which has an aggregate
future liability to any person (other than Seller or one of the Seller
Affiliates) in excess of $150,000 and is not terminable by Seller or
one of the Seller Affiliates by notice of not more than 90 days for a
cost of less than $75,000 (other than the obligations, liabilities and
commitments set forth in Schedule 1.04(a)(v));
(iii) a lease or similar Contract with any person (other than Seller or one
of the Seller Affiliates) under which Seller or one of the Seller
Affiliates is lessee of, or holds or uses, any machinery, equipment,
vehicle or other tangible personal property owned by any person which
lease or similar Contract has an aggregate future liability in excess
of $200,000 and is not terminable by Seller or one of the Seller
Affiliates by notice of not more than 90 days for a cost of less than
$100,000; or
(iv) any other Contract that has an aggregate future liability to any
person (other than Seller or one of the Seller Affiliates) in excess
of $175,000 and is not terminable by Seller or one of the Seller
Affiliates by notice of not more than 90 days for a cost of less than
$100,000 (other than purchase orders, sales orders and Contracts with
brokers).
(b) Except as set forth in Schedule 3.07, all Transferred Contracts
required to be listed in Schedule 3.07 (such Contracts, the "Business
Contracts") are valid, binding and in full force and effect and are enforceable
by Seller or the applicable Seller Affiliate in accordance with their terms
subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally and to
general equitable principles, except for such failures to be valid, binding, in
full force and effect or enforceable that would not reasonably be expected to
have a Businesses Material Adverse Effect. Except as set forth in Schedule 3.07,
Seller or the applicable Seller Affiliate has performed all material obligations
required to be performed by it to date under the Business Contracts, and it is
not in breach or default thereunder and, to the knowledge of Seller, no other
party to any Business Contract, as of the date of this Agreement, is in breach
or default thereunder, except to the extent that such breach or default would
not reasonably be expected to have a Businesses Material Adverse Effect.
SECTION 3.08. Permits. Except as set forth in Schedule 3.08, (i) all
Transferred Permits are validly held by Seller or one of the Seller Affiliates,
and Seller or the applicable Seller Affiliate has complied with the terms and
conditions thereof, except for any such invalidity or non-compliance that would
not reasonably be expected to have a Businesses Material Adverse Effect, (ii)
during the twelve month period immediately preceding the date of this Agreement
neither Seller nor any of the Seller Affiliates has received written notice of
any pending or threatened Proceeding relating to the revocation or modification
of any such Transferred Permits the loss of which would reasonably be expected
to have a Businesses Material Adverse Effect and (iii) none of such Transferred
Permits would reasonably be expected to be subject to suspension, modification,
revocation or nonrenewal as a result of the execution and delivery of this
Agreement or the consummation of the Acquisition, except for any such
suspensions, modifications, revocations or nonrenewals that would not reasonably
be expected to have a Businesses Material Adverse Effect.
SECTION 3.09. Taxes. (a) For purposes of this Agreement:
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Pre-Closing Tax Period" shall mean all taxable periods ending on or before
the Closing Date and the portion ending on the Closing Date of any taxable
period that includes but does not end on the Closing Date.
"Tax" or "Taxes" shall mean all forms of taxation imposed by any Federal,
state, provincial, local, foreign or other Taxing Authority, including income,
franchise, property, sales, use, excise, employment, unemployment, payroll,
social security, estimated, value added, ad valorem, transfer, recapture,
withholding, health and other taxes of any kind, including any interest,
penalties and additions thereto.
"Taxing Authority" shall mean any Federal, state, provincial, local or
foreign government, any subdivision, agency, commission or authority thereof or
any quasi-governmental body exercising tax regulatory authority.
"Tax Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority with
respect to Taxes, including any amendment made with respect thereto.
"Transfer Taxes" shall mean all sales (including bulk sales), use,
transfer, recording, ad valorem, privilege, documentary, gross receipts,
registration, conveyance, excise, license, stamp or similar Taxes and fees
arising out of, in connection with or attributable to the transactions
effectuated pursuant to this Agreement.
(b) (i) All material Tax Returns required to be filed by the Code or by
applicable state, provincial, local or foreign Tax laws to the extent such Tax
Returns relate to the Transferred Assets for Pre-Closing Tax Periods have been
timely filed or will be timely filed, (ii) all material Taxes due on such Tax
Returns with respect to the Transferred Assets have been paid in full or will be
timely paid in full by the due date thereof, (iii) no material claims are being
asserted in writing with respect to any Taxes with respect to the Transferred
Assets and (iv) no material Tax liens with respect to the Transferred Assets
have been filed.
(c) Seller is not a "foreign person" within the meaning of Section 1445 of
the Code. Certain of the Seller Affiliates are foreign persons within the
meaning of Section 1445 of the Code, but none of the assets to be transferred by
such Seller Affiliates pursuant to this Agreement constitutes a "United States
real property interest" within the meaning of Section 897(c)(l) of the Code.
SECTION 3.10. Proceedings. Schedule 3.10 sets forth a list as of the date
of this Agreement of each pending Proceeding (as to which a complaint has been
served on Seller or any of the Seller Affiliates) or, to the knowledge of
Seller, threatened Proceeding against Seller or any of the Seller Affiliates,
which relates to the Businesses (including the Transferred Assets and the
Licensed Patents, Trademarks and Technology) and pursuant to which a party seeks
(a) more than $150,000 from Seller or any of the Seller Affiliates or (b) in the
case of a pending Proceeding only, injunctive relief. Except as set forth in
Schedule 3.10, neither Seller nor any of the Seller Affiliates is a party or
subject to or in default under any unsatisfied Judgment applicable to the
conduct of the Businesses, other than for such Judgments that would not
reasonably be expected to have a Businesses Material Adverse Effect. This
Section 3.10 does not relate to environmental matters or intellectual property
matters, such items being the subject of Sections 3.12(b) and 3.06,
respectively.
SECTION 3.11. Absence of Changes or Events. Except as set forth in Schedule
3.11 or Schedule 5.01, since June 30, 2003, there has not been a Businesses
Material Adverse Effect. Except as set forth in Schedule 3.11, from June 30,
2003, to the date of this Agreement, Seller and the Seller Affiliates have not
taken any action which, if taken after the date of this Agreement, would
constitute a breach of Section 5.01(a).
SECTION 3.12. Compliance with Applicable Laws. (a) The Businesses are, and
to the knowledge of Seller, for the twelve month period immediately preceding
the date of this Agreement, have been, in compliance with all Applicable Laws,
except for instances of noncompliance that would not reasonably be expected to
have a Businesses Material Adverse Effect. This Section 3.12(a) does not relate
to matters with respect to Taxes, which are the subject of Section 3.09, or to
environmental matters, which are the subject of Section 3.12(b).
(b) Except for any matter that would not reasonably be expected to have a
Businesses Material Adverse Effect, (i) Seller and the Seller Affiliates conduct
the Businesses in compliance with all Applicable Laws relating to protection of
the environment ("Environmental Laws") and (ii) there are no pending Proceedings
against Seller or any of the Seller Affiliates alleging that the Businesses are
in violation of any Environmental Law.
SECTION 3.13. Transferred Inventory. Except as reflected or reserved
against in the Statement, at the Closing, the Transferred Inventory will be
items of a quality which is useable or saleable by the Businesses in the
ordinary course of business and made in accordance with their specifications.
SECTION 3.14. Relationships with Customers and Suppliers. Except as set
forth in Schedule 3.14, none of the ten largest customers of the Businesses
based on dollar sales and none of the ten largest suppliers based on dollar
purchases, in each case during the year ended December 31, 2002, has, as of the
date of this Agreement, canceled in writing or threatened in writing any
cancelation of any material agreement with relation to the Transferred Assets or
the Businesses. Except as set forth in Schedule 3.14, no Product SKU of Seller
or the Seller Affiliates with sales in excess of $100,000 during the year ended
December 31, 2002 to any one of the ten largest customers of the Businesses
referred to in the immediately preceding sentence has, from January 1, 2003 to
the date of this Agreement, been delisted by such customer.
SECTION 3.15. Transferred Equipment. The Transferred Equipment is in good
operating condition (ordinary wear and tear expected), except for instances,
individually or in the aggregate, that would not reasonably be expected to have
a Business Material Adverse Effect.
SECTION 3.16. Transferred Assets. The Transferred Assets (together with the
Licensed Patents, Trademarks and Technology) will include all the assets of
Seller and the Seller Affiliates that are used or held for use exclusively in
the operation or conduct of the Businesses on the Closing Date.
ARTICLE IV
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Seller as follows:
SECTION 4.01. Organization and Standing. Purchaser is validly existing and
in good standing under the laws of the jurisdiction in which it is organized and
has full corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to carry on its
business as presently conducted, other than such franchises, licenses, permits,
authorizations and approvals the lack of which would not reasonably be expected
to have a material adverse effect on the ability of Purchaser to consummate the
Acquisition (a "Purchaser Material Adverse Effect").
SECTION 4.02. Authority; Execution and Delivery; Enforceability. Purchaser
has full corporate power and authority to execute this Agreement and the
Ancillary Agreements to which it is, or is specified to be, a party and to
consummate the Acquisition and the other transactions contemplated hereby and
thereby. Purchaser has taken all corporate action required by its organizational
documents to authorize the execution and delivery of this Agreement and the
Ancillary Agreements to which it is, or is specified to be, a party and to
authorize the consummation of the Acquisition and the other transactions
contemplated hereby and thereby. Purchaser has duly executed and delivered this
Agreement and prior to the Closing will have duly executed and delivered each
Ancillary Agreement to which it is, or is specified to be, a party, and this
Agreement constitutes, and each Ancillary Agreement to which it is, or is
specified to be, a party will after the Closing constitute, its legal, valid and
binding obligation, enforceable against it in accordance with its terms subject,
as to enforcement, to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally and to
general equitable principles.
SECTION 4.03. No Conflicts or Violations; No Consents or Approvals
Required. The execution and delivery by Purchaser of this Agreement do not, the
execution and delivery by Purchaser of each Ancillary Agreement to which it is,
or is specified to be, a party will not, and the consummation of the Acquisition
and the other transactions contemplated hereby and thereby will not conflict
with, or result in any breach of or constitute a default under, or result in the
creation of any Lien upon any of the properties or assets of Purchaser or any of
its subsidiaries under, any provision of (i) the organizational documents of
Purchaser or any of its subsidiaries, (ii) any Contract to which Purchaser or
any of its subsidiaries is a party or by which any of their respective
properties or assets is bound or (iii) any Judgment or Applicable Law applicable
to Purchaser or any of its subsidiaries or their respective properties or
assets, other than, in the case of clauses (ii) and (iii) above, any such items
that would not reasonably be expected to have a Purchaser Material Adverse
Effect. No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to
Purchaser or any of its subsidiaries in connection with the execution, delivery
and performance of this Agreement or the Ancillary Agreements or the
consummation of the Acquisition or the other transactions contemplated by this
Agreement or the Ancillary Agreements other than (A) compliance with and filings
under the HSR Act, (B) compliance with and filings under the Competition Act
(Canada), (C) compliance with and filings and notifications under Environmental
Laws, (D) those that may be required solely by reason of Seller's (as opposed to
any third party's) participation in the Acquisition and the other transactions
contemplated hereby and by the Ancillary Agreements and (E) those the failure of
which to obtain or make would not reasonably be expected to have a Purchaser
Material Adverse Effect.
SECTION 4.04. Proceedings. There are not any (a) outstanding Judgments
against Purchaser or any of its subsidiaries, (b) Proceedings pending or, to the
knowledge of Purchaser, threatened against Purchaser or any of its subsidiaries
or (c) investigations by any Governmental Entity that are pending or threatened
against Purchaser or any of its subsidiaries that, in any such case, would
reasonably be expected to have a Purchaser Material Adverse Effect.
SECTION 4.05. Availability of Funds. Purchaser has (or at the Closing will
have) cash available which is sufficient to enable it to consummate the
Acquisition and the other transactions contemplated by this Agreement.
ARTICLE V
Covenants
SECTION 5.01. Covenants Relating to Conduct of the Businesses. (a) Except
for matters (x) set forth in Schedule 5.01, (y) expressly agreed to by Purchaser
or (z) otherwise contemplated by the terms of this Agreement, from the date of
this Agreement to the Closing Date, Seller shall, and shall cause the Seller
Affiliates to, conduct the Businesses in the ordinary course in a manner
consistent with past practice and, to the extent consistent therewith, use
commercially reasonable efforts to preserve the material business relationships
with customers, suppliers, distributors and others with whom Seller and the
Seller Affiliates deal with in connection with the conduct of the Businesses in
the ordinary course of business. Notwithstanding the foregoing, Purchaser
acknowledges and agrees that relationships with Seller and certain of its
affiliates providing services to the Businesses will terminate as of the Closing
as contemplated in Section 11.03 and that such termination shall not constitute
a breach of this Agreement. In addition, except as set forth in Schedule 5.01 or
otherwise contemplated by the terms of this Agreement, Seller shall not, and
shall not cause any of the Seller Affiliates to, do any of the following in
connection with the Businesses without the prior written consent of Purchaser
(which consent shall not be unreasonably withheld or delayed):
(i) subject any of the Transferred Assets to any Lien of any nature
whatsoever that would have been required to be set forth in Schedule
3.05 if existing on the date of this Agreement;
(ii) waive any claims or rights of material value that relate exclusively
to the Businesses or to the Transferred Assets;
(iii) sell, lease, license or otherwise dispose of any Transferred Asset,
except (A) Inventory and obsolete or excess Equipment sold or disposed
of in the ordinary course of business and (B) leases entered into in
the ordinary course of business with aggregate annual lease payments
not in excess of $100,000;
(iv) enter into any lease of real property that relates exclusively to the
Businesses;
(v) make any change in any method of accounting or accounting practice or
accounting policy applicable to the Businesses other than those
required by (w) applicable accounting principles, (x) Applicable Law,
(y) any Judgment or (z) changes in the internal accounting principles
of Seller and the Seller Affiliates generally and not specifically
related to the Businesses that do not affect the preparation of the
Statement;
(vi) amend in any material respect, waive any material right or terminate
prior to its stated term any Business Contract;
(vii) (A) enter into or agree to any (x) trade promotion in excess of
$300,000 per customer or (y) consumer promotion in excess of $700,000
or (B) make or incur any advertising commitment in excess of $250,000
(in each case, other than pursuant to a commitment set forth in
Schedule 1.04(a)(v));
(viii) enter into any other Contract that has an aggregate future liability
to any person (other than Seller or one of the Seller Affiliates) in
excess of $175,000 (other than purchase orders entered into in the
ordinary course of business in a manner consistent with past
practice); or
(ix) agree, whether in writing or otherwise, to do any of the foregoing.
(b) Seller shall use its best efforts to keep, or to cause to be kept, all
insurance policies currently maintained with respect to the Transferred Assets
(the "Seller Insurance Policies"), or suitable replacements therefor, in full
force and effect through the close of business on the Closing Date; it being
understood that any and all Seller Insurance Policies are owned and maintained
by Seller and its affiliates (and do not exclusively relate to the Businesses).
Purchaser will not have any rights under the Seller Insurance Policies from and
after the Closing.
SECTION 5.02. Access to Information. Seller shall, and shall cause the
Seller Affiliates to, afford to Purchaser and its accountants, counsel and other
representatives reasonable access, upon reasonable prior notice during normal
business hours during the period prior to the Closing, to (i) the personnel
engaged primarily in the Businesses and (ii) properties, books, Contracts,
commitments and records (including with respect to (x) Product SKU delistings
during such period and (y) Product loss information reasonably requested by
Purchaser), or portions thereof, relating exclusively to the Businesses (other
than the Excluded Assets and the personnel engaged in the conduct of the
Businesses) (such reasonable access to include the delivery of monthly unaudited
statements of direct revenues and expenses and weekly unaudited sales
information based on Unilever management accounts, in each case, of the
Businesses, similar to the ones made available to Purchaser prior to the date of
this Agreement); provided, however, that such access does not unreasonably
disrupt the normal operations of Seller or any of the Seller Affiliates relating
to the Businesses. Nothing contained in this Section 5.02 shall obligate Seller
to breach any duty of confidentiality owed to any person whether such duty
arises contractually, statutorily or otherwise.
SECTION 5.03. Confidentiality. (a) Purchaser acknowledges that the
information being provided to it in connection with the Acquisition and the
consummation of the other transactions contemplated hereby is subject to the
terms of a confidentiality agreement between Purchaser and Unilever United
States, Inc. (the "Confidentiality Agreement"), the terms of which are
incorporated herein by reference. Effective upon, and only upon, the Closing,
the Confidentiality Agreement shall terminate with respect to information
relating solely to the Businesses (other than the Excluded Assets and the
personnel engaged in the conduct of the Businesses); provided, however, that
Purchaser acknowledges that any and all other information provided to it by
Seller or Seller's representatives concerning Seller and its affiliates shall
remain subject to the terms and conditions of the Confidentiality Agreement
after the Closing Date.
(b) Seller shall keep confidential, and cause its affiliates and instruct
its and their officers, directors, employees and advisors to keep confidential,
all information included in the Transferred Assets, except as required by law or
administrative process and except for information which is available to the
public on the Closing Date, or thereafter becomes available to the public other
than as a result of a breach of this Section 5.03(b). The covenant set forth in
this Section 5.03(b) shall terminate three years after the Closing Date.
(c) From and after the Closing, at Purchaser's written request, Seller
shall, at its option, either (i) assign to Purchaser all of its rights under any
non-disclosure or confidentiality agreements against any third parties with
respect to disclosures regarding the Businesses or the Transferred Assets (or
any portion thereof) in breach of such agreements or (ii) use, and shall cause
its affiliates to use, at Purchaser's sole cost and expense, its commercially
reasonable efforts to defend and enforce its or their rights under any such
agreements against any third parties with respect to such disclosures.
(d) Notwithstanding anything to the contrary contained in this Agreement,
each party hereto (and each employee, representative or other agent of any
party) may disclose to any and all persons, without limitation of any kind, the
U.S. Federal income tax treatment and U.S. Federal income tax structure of any
and all transaction(s) contemplated by this Agreement and all materials of any
kind (including opinions or other tax analyses) that are or have been provided
to any party (or to any employee, representative or other agent of any such
party) relating to such tax treatment or tax structure; provided, however, the
treatment and tax structure shall not include the identity of any existing or
future party (or any affiliate of such party) to this Agreement.
SECTION 5.04. Best Efforts. (a) On the terms and subject to the conditions
of this Agreement, each of Seller and Purchaser shall use its best efforts or,
in the case of obtaining the clearance referenced in the sixth sentence of
Section 5.04(b), its commercially reasonable best efforts to cause the Closing
to occur, including taking all reasonable actions necessary to comply promptly
with all legal requirements that may be imposed on it or any of its affiliates
with respect to the Closing. Each of Seller and Purchaser shall not, and shall
not permit any of their respective affiliates to, take any actions that would,
or that could reasonably be expected to, result in any of the conditions set
forth in Article VI not being satisfied.
(b) Each of Seller and Purchaser shall as promptly as practicable, but in
no event later than six business days following the execution and delivery of
this Agreement, (i) file or cause to be filed with the United States Federal
Trade Commission (the "FTC") and the United States Department of Justice (the
"DOJ") the notification and report form required for the transactions
contemplated hereby and any supplemental information requested in connection
therewith pursuant to the HSR Act and (ii) make such other filings as are
necessary in other jurisdictions in order to comply with all Applicable Laws,
including the Competition Act (Canada), relating to competition and shall
promptly provide any supplemental information requested by applicable
Governmental Entities relating thereto. Any such filing, notification and report
form and supplemental information shall be in substantial compliance with the
requirements of the HSR Act or such other Applicable Law. Each of Seller and
Purchaser shall furnish to the other such necessary information and reasonable
assistance as the other may request in connection with its preparation of any
filing or submission that is necessary under the HSR Act or such other
Applicable Law. Each of Seller and Purchaser shall keep each other apprised of
the status of any communications with, and any inquiries or requests for
additional information from, the FTC, the DOJ and any other applicable
Governmental Entity and shall comply promptly with any such inquiry or request
and shall promptly provide any supplemental information requested in connection
with the filings made hereunder pursuant to the HSR Act or such other Applicable
Law. Any such supplemental information shall be in substantial compliance with
the requirements of the HSR Act or such other Applicable Law. Each party shall
use its commercially reasonable best efforts to obtain any clearance required
under the HSR Act or such other Applicable Law for the consummation of the
transactions contemplated by this Agreement, without the necessity of divesting
any portion of the products or assets of or relating to the Businesses or
Purchaser and its affiliates. For purposes of this Section 5.04, the
"commercially reasonable best efforts" of Purchaser shall include promptly
opposing any motion or action for a temporary, preliminary or permanent
injunction against the Acquisition or any portion thereof.
SECTION 5.05. Brokers or Finders. Each of Purchaser and Seller represents,
as to itself and its affiliates, that no agent, broker, investment banker or
other firm or person is or will be entitled to any broker's or finder's fee or
any other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except, as to Seller, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, whose fees and expenses will be paid by Seller and, as to
Purchaser and its affiliates, Lazard Freres & Co. LLC, whose fees and expenses
will be paid by Purchaser.
SECTION 5.06. Further Assurances. After the Closing, each party shall take
such further actions and execute such further documents as may be reasonably
necessary or reasonably requested by the other party in order to effectuate the
intent of this Agreement and to provide such other party in all material
respects with the intended benefits of this Agreement; provided, however, that
neither party shall be required to incur any expense pursuant to this Section
5.06.
SECTION 5.07. Additional Payments. (a) For purposes of this Agreement:
"Annual Statement Date" shall mean the date that is 60 days after the end
of each of the years ended December 31, 2004, December 31, 2005, December 31,
2006, December 31, 2007, December 31, 2008, December 31, 2009, December 31, 2010
and December 31, 2011, as the case may be.
"Annual Statement Payment Date" shall mean the date that is 15 days after
each Annual Statement Date other than the final Annual Statement Date to occur
in accordance with the terms of this Section 5.07.
"Eighth Anniversary Date" shall mean the eighth anniversary of the Closing
Date.
"Final Payment Date" shall mean the date that is 45 days after the Eighth
Anniversary Date.
"First Payment Date" shall mean the date that is 45 days after the end of
the first Quarter ended after the Closing Date.
"Mentadent Payment" shall mean an amount equal to 5% of the GAAP net sales
of Mentadent Products recorded by Purchaser or any of its affiliates, (i) if
paid on the First Payment Date, in the period from and after the Closing Date to
and including the end of the first Quarter ended after the Closing Date, (ii) if
paid on a Quarterly Payment Date or an Annual Statement Date, in the Quarter
immediately preceding such Quarterly Payment Date or Annual Statement Date, as
the case may be, or (iii) if paid on the Final Payment Date, in the period from
and after the end of the last Quarter ended prior to the Eighth Anniversary Date
to and including the Eighth Anniversary Date.
"Mentadent Products" shall mean any products (i) bearing the Mentadent
Brand trademarks or trade dress or (ii) created, developed or manufactured with,
or that use, (w) the pump/refill device, pump/refill Technology or pump/refill
trade dress, in each case associated with the Mentadent Brand as of the Closing,
(x) any modifications of such pump/refill device, pump/refill Technology or
pump/refill trade dress, (y) Transferred Patents exclusively relating to the
Mentadent Brand that exist as of the Closing or (z) any continuations,
continuations-in-part, divisions or reissues of such Transferred Patents.
"Payment Date" shall mean the First Payment Date, each Quarterly Payment
Date and the Final Payment Date, as the case may be.
"Quarter" shall mean a period of three calendar months (or, in the case of
the First Payment Date only, the portion thereof) ending on March 31, June 30,
September 30 or December 31.
"Quarterly Payment Date" shall mean the date that is 45 days after the end
of a Quarter ended (i) after the Closing Date, (ii) prior to the Eighth
Anniversary Date and (iii) on March 31, June 30 or September 30, other than the
First Payment Date and the Final Payment Date.
"True-Up Payment" shall mean an amount, if any, calculated on an Annual
Statement Date, equal to the amount by which (i) $1,000,000 x Y exceeds (ii) P
(where "Y" equals the number of Annual Statement Dates which have occurred prior
to and including such date of calculation and "P" equals the sum of the
aggregate amount of all (x) Mentadent Payments paid to Seller prior to such date
of calculation and due and payable on the Annual Statement Payment Date next
following plus (y) True-Up Payments paid to Seller prior to such date of
calculation; provided, however, that "True-Up Payment" shall mean an amount
equal to zero so long as Seller has received from Purchaser an aggregate amount
of Mentadent Payments and True-Up Payments equal to or in excess of $5,000,000.
(b) Purchaser shall pay to Seller (or its designee) (i) on each Payment
Date, a Mentadent Payment, and (ii) on each Annual Statement Payment Date, a
Mentadent Payment and, if applicable, a True-Up Payment. Notwithstanding the
foregoing, (A) so long as Seller has received from Purchaser an aggregate amount
of Mentadent Payments and True-Up Payments equal to or in excess of $5,000,000,
no Mentadent Payments shall be owed after the fifth Annual Statement Payment
Date unless and until such time as the aggregate amount of all Mentadent
Payments paid, accrued or owed pursuant to this Section 5.07 exceeds $5,000,000,
immediately following which time Mentadent Payments shall be due and payable in
accordance with the terms of this Section 5.07; provided, however, that, in the
event that the aggregate amount of all Mentadent Payments paid, accrued or owed
pursuant to this Section 5.07 does not equal or exceed $5,000,000, Seller shall
pay to Purchaser the amount, if any, by which the aggregate amount of Mentadent
Payments and True-Up Payments received by Seller exceeds $5,000,000 within five
Business Days after the earlier of (x) the Eighth Anniversary Date and (y) the
date this is 30 days immediately following such time that none of Purchaser or
its affiliates has engaged in the sale of Mentadent Products in any material
respect for a period of 60 or more consecutive days; (B) the aggregate amount of
all Mentadent Payments and True-Up Payments payable to Seller pursuant to this
Section 5.07 shall not exceed $12,000,000; and (C) Purchaser shall have no
further obligations under this Section 5.07 after Seller shall have received
from Purchaser an aggregate amount of Mentadent Payments and True-Up Payments
equal to $12,000,000.
(c) The Mentadent Payments and the True-Up Payments shall be calculated by
Purchaser. At least 15 days prior to each Payment Date, Purchaser shall deliver
to Seller a written statement (i) setting forth Purchaser's calculation of the
Mentadent Payment for such Payment Date, together with an analysis in reasonable
detail of how the relevant GAAP net sales of the Mentadent Products were derived
and calculated, and (ii) certified by the chief financial officer of Purchaser.
(d) (i) On each Annual Statement Date, Purchaser shall deliver to Seller a
written statement (each, an "Annual Statement") (A) setting forth
Purchaser's calculation of (x) the Mentadent Payment due on the next
following Annual Statement Payment Date and the Mentadent Payments
paid on the three immediately preceding Payment Dates (or, in the case
of the final Annual Statement Date to occur in accordance with the
terms of this Section 5.07, the Mentadent Payments paid on the four
immediately preceding Payment Dates) and (y) the True-Up Payment, if
any, due on the next following Annual Statement Payment Date, together
with an analysis in reasonable detail of how the relevant GAAP net
sales of the Mentadent Products were derived and calculated, (B)
certified by Purchaser's nationally recognized public accounting firm
in a written agreed upon procedures report of such firm and (C)
certified by the chief financial officer of Purchaser.
(ii) Unless Seller notifies Purchaser in writing within 45 days after
Seller's receipt of an Annual Statement of any objection to the
computation of the Mentadent Payment or, if applicable, the True-Up
Payment set forth therein (the "Mentadent Notice of Objection"), such
Annual Statement shall become final and binding. During such 45-day
period Seller and its representatives shall be permitted to review the
working papers and have access to the personnel of Purchaser relating
to such Annual Statement. Any Mentadent Notice of Objection shall
specify in reasonable detail the basis for the objections set forth
therein.
(iii) If Seller provides the Mentadent Notice of Objection to Purchaser
within such 45-day period, Purchaser and Seller shall, during the
30-day period following Purchaser's receipt of the Mentadent Notice of
Objection, attempt in good faith to resolve Seller's objections.
During such 30-day period, Purchaser and its representatives shall be
permitted to review the working papers of Seller relating to the
Mentadent Notice of Objection and the basis therefor. If Purchaser and
Seller are unable to resolve all such objections within 30 days, the
matters remaining in dispute shall be submitted to the Independent
Expert. The parties shall instruct the Independent Expert to render
its reasoned written decision as promptly as practicable but in no
event later than 60 days after its selection. The resolution of
disputed items by the Independent Expert shall be final and binding,
and the determination of the Independent Expert shall constitute an
arbitral award that is final, binding and non-appealable and upon
which a judgment may be entered by a court having jurisdiction
thereover. The fees and expenses of the Independent Expert shall be
borne equally by Purchaser and Seller. Notwithstanding the foregoing,
all undisputed amounts owed under this Section 5.07 shall be paid
promptly when due in accordance with Section 5.07(g).
(e) Purchaser shall afford or cause to be afforded to Seller and its
affiliates and its and their accountants and other representatives (i)
reasonable access during normal business hours in a manner that does not
unreasonably disrupt the normal operations of Purchaser's business to the
personnel, properties, books, contracts, commitments and records relating to the
business of Purchaser and its affiliates in connection with Seller's review of
each Annual Statement and (ii) the right to make copies of such books and
records.
(f) Notwithstanding anything to the contrary contained in this Section
5.07, within 30 days immediately following such time, if any, that none of
Purchaser or its affiliates has engaged in the sale of Mentadent Products in any
material respect for a period of 60 or more consecutive days, Purchaser shall
pay to Seller an amount equal to the amount by which $5,000,000 exceeds the
aggregate amount of all Mentadent Payments and True-Up Payments previously paid
to Seller.
(g) All payments made pursuant to this Section 5.07 shall be in U.S.
dollars by wire transfer of immediately available funds to a bank account
designated by Seller at least two days prior to the applicable Payment Date or
Annual Statement Payment Date.
SECTION 5.08. Removal of Certain Equipment. Purchaser and Seller agree that
Purchaser, with Seller's assistance, shall as soon as reasonably practicable
(and in any event within 90 days following the termination of the Transitional
Services Agreement (as defined in Section 11.03)) disassemble, package, prepare
for delivery and deliver at Purchaser's instruction the items of Equipment set
forth in Schedule 1.02(a)(iii) and located at a facility owned or operated by
Seller or a Seller Affiliate (other than such items of Equipment included in the
definition of "Equipment" in the Manufacturing Agreement), at Purchaser's sole
cost, risk and expense (other than damage to the Equipment caused by Seller's
negligence or willful misconduct). Seller agrees to allow Purchaser access to
the Equipment (for the above purpose) during normal business hours and upon
reasonable notice. Purchaser shall be responsible for any reasonable repairs of
any damage caused by Purchaser to the facilities owned and operated by Seller or
a Seller Affiliate solely to the extent such damage was caused by Purchaser's
removal of Equipment pursuant to this Section 5.08.
ARTICLE VI
Conditions to Closing
SECTION 6.01. Conditions to Each Party's Obligation. The obligation of
Purchaser to purchase and pay for the Transferred Assets and the obligation of
Seller to, or to cause the Seller Affiliates to, sell, transfer, assign and
deliver the Transferred Assets to Purchaser is subject to the satisfaction (or
waiver by Purchaser and Seller) on or prior to the Closing Date of the following
conditions:
(a) Governmental Approvals. The waiting period under the HSR Act and any
waiting periods under the Competition Act (Canada) shall have expired or been
terminated. All other material Consents of, or registrations, declarations or
filings with, or expirations of waiting periods imposed by, any Governmental
Entity legally required for the consummation of the Acquisition shall have been
obtained or filed or shall have occurred.
(b) No Injunctions or Restraints. No Applicable Law or injunction enacted,
entered, promulgated, enforced or issued by any Governmental Entity or other
legal restraint or prohibition preventing the consummation of the Acquisition
shall be in effect; provided, however, that each of the parties shall have used
its best efforts (as required by Section 5.04(a)) to prevent the occurrence or
entry of any such legal restraint and to remove or appeal as promptly as
possible any such legal restraint.
SECTION 6.02. Conditions to Obligation of Purchaser. The obligation of
Purchaser to purchase and pay for the Transferred Assets is subject to the
satisfaction (or waiver by Purchaser) on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. The representations and warranties of
Seller in this Agreement that are qualified as to materiality or Business
Material Adverse Effect shall be true and correct, and those not so qualified
shall be true and correct in all material respects, as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties that are qualified as to
materiality or Business Material Adverse Effect shall be true and correct, and
those not so qualified shall be true and correct in all material respects, on
and as of such earlier date). Purchaser shall have received a certificate signed
by an authorized officer of Seller as to the satisfaction of the foregoing
condition.
(b) Performance of Obligations of Seller. Seller shall have performed or
complied in all material respects with all obligations and covenants required by
this Agreement to be performed or complied with by Seller by the time of the
Closing. Purchaser shall have received a certificate signed by an authorized
officer of Seller as to the satisfaction of the foregoing condition.
(c) Licenses. Seller shall have duly executed and delivered each of the
Excluded Close-Up Trademarks and Technology License and the Excluded Patents and
Technology License.
SECTION 6.03. Conditions to Obligation of Seller. The obligation of Seller
to, or to cause the Seller Affiliates to, sell, transfer, assign and deliver the
Transferred Assets is subject to the satisfaction (or waiver by Seller) on or
prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of
Purchaser made in this Agreement that are qualified as to materiality or
Business Material Adverse Effect shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the date of
this Agreement and as of the Closing Date as though made on the Closing Date,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties that are
qualified as to materiality or Business Material Adverse Effect shall be true
and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date). Seller shall have received a
certificate signed by an authorized officer of Purchaser as to the satisfaction
of the foregoing condition.
(b) Performance of Obligations of Purchaser. Purchaser shall have performed
or complied in all material respects with all obligations and covenants required
by this Agreement to be performed or complied with by Purchaser by the time of
the Closing. Seller shall have received a certificate signed by an authorized
officer of Purchaser as to the satisfaction of the foregoing condition.
(c) Transferred Technology License. Purchaser shall have duly executed and
delivered the Transferred Technology License.
SECTION 6.04. Frustration of Closing Conditions. Neither Purchaser nor
Seller may rely on the failure of any condition set forth in this Article VI to
be satisfied if such failure was caused by such party's failure to act in good
faith or to use its best efforts to cause the Closing to occur, as required by
Section 5.04.
ARTICLE VII
Termination; Effect of Termination
SECTION 7.01. Termination. (a) Notwithstanding anything to the contrary
contained in this Agreement, this Agreement may be terminated and the
Acquisition and the other transactions contemplated by this Agreement abandoned
at any time prior to the Closing:
(i) by mutual written consent of Seller and Purchaser;
(ii) by Seller, if (x) any of the conditions set forth in Section 6.01 or
6.03 shall have become incapable of fulfillment and shall not have
been waived by Seller, (y) 30 days have elapsed since the receipt by
Purchaser of a written notice by Seller of such incapability and (z)
Purchaser shall have failed to fulfill such condition within such
30-day period;
(iii) by Purchaser, if (x) any of the conditions set forth in Section 6.01
or 6.02 shall have become incapable of fulfillment and shall not have
been waived by Purchaser, (y) 30 days have elapsed since the receipt
by Seller of a written notice by Purchaser of such incapability and
(z) Seller shall have failed to fulfill such condition within such
30-day period; or
(iv) by Seller or Purchaser, if the Closing does not occur on or prior to
February 29, 2004;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.
(b) In the event of termination by Seller or Purchaser pursuant to this
Section 7.01, written notice thereof shall forthwith be given to the other party
and the transactions contemplated by this Agreement shall be terminated, without
further action by any party. If the transactions contemplated by this Agreement
are terminated as provided herein:
(i) Purchaser shall, and shall cause each of its directors, officers,
employees, agents, representatives and advisors to, return to Seller
all documents and other material received from Seller or any of its
affiliates relating to the transactions contemplated hereby, whether
so obtained before or after the execution hereof; and
(ii) all confidential information received by Purchaser, its directors,
officers, employees, agents, representatives or advisors with respect
to the businesses of Seller and its affiliates (including with respect
to the Businesses) shall be treated in accordance with the
Confidentiality Agreement, which shall remain in full force and effect
notwithstanding the termination of this Agreement.
SECTION 7.02. Effect of Termination. If this Agreement is terminated and
the transactions contemplated hereby are abandoned as described in Section 7.01,
this Agreement shall become null and void and of no further force and effect,
except for the provisions of (i) Section 5.03 relating to the obligation of
Purchaser to keep confidential certain information and data obtained by it from
Seller or Seller's representatives, (ii) Section 12.03 relating to certain
expenses, (iii) Section 5.05 relating to finder's fees and broker's fees, (iv)
Section 7.01 and this Section 7.02 and (v) Section 11.01 relating to publicity.
Nothing in this Section 7.02 shall be deemed to release any party from any
liability for any breach by such party of the terms, conditions, covenants and
other provisions of this Agreement or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement.
ARTICLE VIII
Indemnification
SECTION 8.01. Indemnification by Seller. Subject to the limitations set
forth in Section 8.04, from and after the Closing, Seller shall indemnify,
defend and hold harmless Purchaser and its affiliates and each of their
respective officers, directors, employees, stockholders, agents and
representatives (the "Purchaser Indemnitees") from and against any and all
claims, losses, damages, liabilities, obligations or expenses, including
reasonable third-party legal fees and expenses incurred in the successful
enforcement of the indemnification provisions contained in this Article VIII
(collectively, "Losses"), to the extent arising or resulting from any of the
following:
(i) any breach of any representation or warranty of Seller contained in
this Agreement (it being understood and agreed that Seller makes no
representation or warranty as to the Nine Month Statement (as defined
in Section 11.08) to be delivered to Purchaser pursuant to Section
11.08, including as to (x) the accuracy, completeness or truthfulness
of any of the information contained in the Nine Month Statement or (y)
whether the Nine Month Statement fairly presents the direct revenue
and expenses of the Businesses for the nine months ended September 27,
2003);
(ii) any breach of any covenant of Seller contained in this Agreement,
whether requiring performance on or prior to, or from and after, the
Closing;
(iii) any Retained Liability;
(iv) any fees, expenses or other payments incurred or owed by Seller to any
agent, broker, investment banker or other firm or person retained or
employed by it in connection with the transactions contemplated by
this Agreement; and
(v) any so-called "bulk transfer laws" as a result of the actions
contemplated by Section 11.06.
SECTION 8.02. Indemnification by Purchaser. From and after the Closing,
Purchaser shall indemnify, defend and hold harmless Seller and each of its
affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives (the "Seller Indemnitees") from and
against any and all Losses, to the extent arising or resulting from any of the
following:
(i) any breach of any representation or warranty of Purchaser contained in
this Agreement;
(ii) any breach of any covenant of Purchaser contained in this Agreement,
whether requiring performance on or prior to, or from and after, the
Closing;
(iii) any Assumed Liability; and
(iv) any fees, expenses or other payments incurred or owed by Purchaser or
its affiliates to any agent, broker, investment banker or other firm
or person retained or employed by it in connection with the
transactions contemplated by this Agreement.
SECTION 8.03. Indemnification Procedures. (a) Procedures Relating to
Indemnification of Third Party Claims. If any party (the "Indemnified Party")
receives written notice of the commencement of any action or proceeding or the
assertion of any claim by a third party or the imposition of any penalty or
assessment for which indemnity may be sought under Section 8.01 or 8.02 (a
"Third Party Claim"), and such Indemnified Party intends to seek indemnity
pursuant to this Article VIII, the Indemnified Party shall promptly provide the
other party (the "Indemnifying Party") with written notice of such Third Party
Claim, stating the nature, basis and the amount thereof, to the extent known,
along with copies of the relevant documents evidencing such Third Party Claim
and the basis for indemnification sought. Failure of the Indemnified Party to
give such notice will not relieve the Indemnifying Party from liability on
account of this indemnification, except if and to the extent that the
Indemnifying Party is actually prejudiced thereby. The Indemnifying Party will
have 30 days from receipt of any such notice of a Third Party Claim to give
written notice to assume the defense thereof. If notice to the effect set forth
in the immediately preceding sentence is given by the Indemnifying Party, the
Indemnifying Party will have the right to assume the defense of the Indemnified
Party against the Third Party Claim with counsel of its choice and reasonably
satisfactory to the Indemnified Party. If (x) such Third Party Claim seeks
injunctive or other similar relief and (y) there would exist an actual conflict
of interest between the Indemnifying Party and the Indemnified Party, to the
extent that the equitable claim may be segregated, the Indemnified Party will
have the right to assume the defense of such Third Party Claim to the extent
that it relates to the injunctive relief sought, at the Indemnifying Party's
cost and expense. So long as the Indemnifying Party has assumed the defense of
the Third Party Claim in accordance herewith, (i) the Indemnified Party may
retain separate co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim and (ii) the Indemnified Party will not file
any papers or consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party. The Indemnifying Party will not (A) admit to any wrongdoing
on behalf of the Businesses or (B) consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim to the extent such
judgment or settlement provides for equitable relief or materially adversely
affects the Indemnified Party's operation and conduct of its business, in each
case, without the prior written consent of the Indemnified Party (such written
consent will not be withheld or delayed unreasonably). The Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement with
respect to a Third Party Claim to the extent such judgment or settlement
provides for monetary damages that would cause the Cap or the Purchase Price Cap
(each as defined in Section 8.04(a)), as applicable, to be exceeded, without the
prior written consent of the Indemnified Party (which consent will not be
unreasonably withheld or delayed) (it being agreed and understood that the Cap
or the Purchase Price Cap, as applicable, being exceeded will not, in and of
itself, constitute reasonable grounds for withholding or delaying such consent).
The parties will use reasonable best efforts to minimize Losses from Third Party
Claims and will act in good faith in responding to, defending against, settling
or otherwise dealing with such claims. The parties will also cooperate in any
such defense and give each other reasonable access to all information relevant
thereto. Whether or not the Indemnifying Party has assumed the defense, such
Indemnifying Party will not be obligated to indemnify the Indemnified Party
hereunder for any settlement entered into or any judgment that was consented to
without the Indemnifying Party's prior written consent (which consent will not
be unreasonably withheld or delayed).
(b) Procedures for Non-Third Party Claims. The Indemnified Party will
notify the Indemnifying Party in writing promptly of its discovery of any matter
that does not involve a Third Party Claim being asserted against or sought to be
collected from the Indemnified Party, giving rise to the claim of indemnity
pursuant hereto. The failure so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from liability on account of this
indemnification, except only to the extent that the Indemnifying Party is
actually prejudiced thereby. The Indemnifying Party will have 30 days from
receipt of any such notice to give written notice of dispute of the claim to the
Indemnified Party. The Indemnified Party will reasonably cooperate and assist
the Indemnifying Party in determining the validity of any claim for indemnity by
the Indemnified Party and in otherwise resolving such matters. Such assistance
and cooperation will include providing reasonable access, in a manner that does
not unreasonably disrupt the normal operation of the business of the Indemnified
Party, to and copies of information, records and documents relating to such
matters, furnishing employees to assist in the investigation, defense and
resolution of such matters and providing legal and business assistance with
respect to such matters.
SECTION 8.04. Limitations on Indemnification. (a) Notwithstanding the
foregoing provisions of this Article VIII, (i) Seller shall not be responsible,
pursuant to Section 8.01(i), for any indemnifiable Losses suffered by any
Purchaser Indemnitee arising out of a breach of any representation or warranty
of Seller herein (it being agreed and acknowledged by the parties that (A) for
purposes of determining whether any breach of any such representation or
warranty has occurred, such representations and warranties shall be deemed
qualified by all references herein to materiality generally or to whether or not
any such breach results or may result in a Businesses Material Adverse Effect,
and (B) for purposes of calculating Losses in respect of any Purchaser
Indemnitee's right to indemnification pursuant to this Article VIII, such
representations and warranties shall not be deemed so qualified) unless a claim
therefor is asserted in writing within the applicable time period specified in
Section 8.04(b), failing which such claim shall be waived and extinguished, (ii)
Seller shall not be liable, pursuant to Section 8.01(i), for (x) any Losses
suffered by any Purchaser Indemnitee unless the aggregate of all Losses suffered
by the Purchaser Indemnitees exceeds, on a cumulative basis, $1,000,000 (the
"Threshold"), and then only to the extent of any such excess or (y) any
individual item or series of related items arising out of the same or similar
set of facts or circumstances where the Loss relating thereto is, in the
aggregate, less than $20,000 (the "De Minimis Amount") (and such items shall not
be aggregated for purposes of the immediately preceding clause (x)), (iii) the
aggregate liability of Seller hereunder, pursuant to Section 8.01(i), for Losses
suffered by the Purchaser Indemnitees shall in no event exceed $41,600,000 (the
"Cap") and (iv) neither party hereto shall be liable to the other for indirect,
special, incidental, consequential or punitive damages claimed by such other
party (other than those paid or payable to third parties) resulting from such
first party's breach of its representations, warranties or covenants hereunder.
In no event shall Seller be obligated to indemnify the Purchaser Indemnitees or
any other person with respect to any matter to the extent that such matter was
reflected in the calculation of the adjustment to the Closing Date Payment, if
any, pursuant to Section 2.03(c). Notwithstanding anything to the contrary
contained in this Agreement, (A) Losses recoverable by the Purchaser Indemnitees
for breaches of the representations and warranties contained in Sections 3.01,
3.02, 3.05, 3.13 and 3.16 and claims of, or causes of action arising from,
Seller's fraud shall not be subject to the Threshold or the De Minimis Amount
and (B) if a Purchaser Indemnitee shall suffer any indemnifiable Loss arising
out of a breach of any covenant hereunder or the representations and warranties
contained in Sections 3.01, 3.02, 3.05, 3.13 and 3.16 or out of a claim of, or
cause of action arising from, Seller's fraud that would cause the Cap to be
exceeded, Seller shall be liable for such Loss so long as, and only to the
extent that, the amount of such Loss and all prior Losses that have been paid by
Seller, shall not exceed $104,000,000 (the "Purchase Price Cap") (in the event
that the amount of such Loss would cause the foregoing limitation in this clause
(B) to be exceeded, Seller's liability with respect to such Loss shall be
limited to the portion of such Loss which would not cause such limitation to be
exceeded).
(b) No action or claim for Losses under Section 8.01(i) or 8.02(i) arising
out of or resulting from a breach of representations and warranties described
therein shall be brought or made after the expiration of the 18 month
anniversary of the Closing Date (the "General Survival Period"); provided,
however, that the foregoing time limitations shall not apply to: (i) any
covenant hereunder or any of the representations and warranties contained in
Sections 3.01, 3.02, 3.05, 3.13, 3.16, 4.01 and 4.02, and claims of, or causes
of action arising from, Seller's or Purchaser's fraud, as applicable, each of
which shall survive indefinitely; or (ii) the representations and warranties
contained in Section 3.09, which shall survive until the day immediately
following expiration of the applicable statute of limitation so long as such
period is longer than the General Survival Period.
(c) Purchaser acknowledges and agrees that, (i) other than the
representations and warranties of Seller specifically contained in Article III
of this Agreement and Section 5.05, none of Seller, any of its affiliates or any
other person has made any representation or warranty either expressed or implied
(A) with respect to the Businesses, the Transferred Assets, the Assumed
Liabilities or the transactions contemplated hereby or (B) as to the accuracy or
completeness of any information regarding the Businesses, the Transferred
Assets, the Assumed Liabilities or the transactions contemplated hereby
furnished or made available to Purchaser and its representatives and (ii)
Purchaser shall have no claim or right to indemnification pursuant to this
Article VIII and none of Seller, any of its affiliates or any other person shall
have or be subject to any liability to Purchaser or any other person with
respect to any information, documents or materials furnished by Seller, any of
its affiliates or any of their respective officers, directors, employees, agents
or advisors to Purchaser, including the Confidential Memorandum dated March 2003
prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and any information, documents or
material made available to Purchaser and its representatives in certain "data
rooms", management presentations or any other form in expectation of the
transactions contemplated hereby. Without limiting the generality of the
foregoing, Purchaser acknowledges and agrees that, except for the
representations and warranties contained in Sections 3.13 or 3.15, (x) Seller
does not make any representations or warranties relating to the maintenance,
repair, condition, design, performance or marketability of any Transferred
Asset, including merchantability or fitness for a particular purpose and (y) it
shall obtain rights in the Transferred Assets in their present condition and
state of repair, "as is" and "where is".
(d) Each of Purchaser and Seller acknowledges and agrees that, should the
Closing occur, its sole and exclusive remedy with respect to any and all claims
relating to this Agreement, the Businesses, the Transferred Assets, the Excluded
Assets, the Assumed Liabilities, the Retained Liabilities or the transactions
contemplated hereby (other than claims of, causes of action arising from, fraud
or causes of action arising from the provisions of any so-called "bulk transfer
laws" or causes of action arising under the Ancillary Agreements) shall be
pursuant to the indemnification provisions set forth in this Article VIII. In
furtherance of the foregoing, (i) Purchaser hereby waives, from and after the
Closing, any and all rights, claims and causes of action (other than claims of,
or causes of action arising from, fraud, causes of action arising from the
provisions of any so-called "bulk transfer laws" or causes of action arising
under the Ancillary Agreements) Purchaser or any other Purchaser Indemnitee may
have against Seller or any of its affiliates or any of their respective
directors, officers and employees arising under or based upon any Federal,
state, provincial, local or foreign statute, law, ordinance, rule or regulation
or otherwise (except pursuant to the indemnification provisions set forth in
this Article VIII) and (ii) Seller hereby waives, from and after the Closing,
any and all rights, claims and causes of action (other than claims of, or causes
of action arising from, fraud, causes of action arising from the provisions of
any so-called "bulk transfer laws" or causes of action arising under the
Ancillary Agreements) Seller or any other Seller Indemnitee may have against
Purchaser or any of its affiliates or any of their respective directors,
officers and employees arising under or based upon any Federal, state,
provincial, local or foreign statute, law, ordinance, rule or regulation or
otherwise (except pursuant to the indemnification provisions set forth in this
Article VIII). Each party acknowledges and agrees that the indemnification
provisions set forth in this Article VIII are not available as a remedy with
respect to claims relating to any of the Ancillary Agreements.
SECTION 8.05. Calculation of Indemnity Payments. The amount of any Loss for
which indemnification is provided under this Article VIII shall be net of any
amounts actually received by, or paid on behalf of, the Indemnified Party under
insurance policies with respect to such Loss and shall be (a) increased to take
account of any net Tax cost actually incurred by the Indemnified Party arising
from the receipt of indemnity payments hereunder (grossed up for such increase)
and (b) reduced to take account of any net Tax benefit actually realized by the
Indemnified Party arising from the incurrence or payment of any such indemnified
amount. In computing the amount of any such Tax cost or Tax benefit, the
Indemnified Party shall be deemed to be subject to a combined marginal Tax rate
of 39% and only such items of Tax cost and Tax benefit shall be taken into
account. The Indemnified Party agrees to use its commercially reasonable best
efforts to pursue (and collect on) any recovery available under any insurance
policies with respect to the relevant Loss.
SECTION 8.06. Tax Treatment of Indemnification. For all Tax purposes,
Purchaser and Seller agree to treat (and shall cause each of their respective
affiliates to treat) any indemnity payment under this Agreement as an adjustment
to the Final Purchase Price unless a final determination (which shall include
the execution of an IRS Form 870-AD or successor form) provides otherwise.
ARTICLE IX
Tax Matters
SECTION 9.01. Tax Matters. (a) Purchase Price Allocations. (i) At least
seven (7) calendar days prior to the Closing Date, Purchaser shall provide
Seller with an estimate of the allocation of the total consideration (including
liabilities assumed) among the Transferred Assets and the covenant not to
compete described in Article X, with a single number for all of the Transferred
Assets and the covenant not to compete described in Article X of each of Seller
and each of the Seller Affiliates. This estimate will be consistent with the
third sentence of Section 9.01(a)(ii) and will be used at the Closing. If Seller
does not agree with such estimate, Seller and Purchaser shall use good faith
efforts to agree on an estimate prior to the Closing Date. If the parties cannot
agree on such estimate prior to the Closing Date, Purchaser's estimate shall be
used for allocating the total consideration pursuant to this Agreement at the
Closing.
(ii) Without regard to the estimate determined pursuant to Section
9.01(a)(i), within 60 calendar days of the determination of the Final Purchase
Price, Purchaser shall provide Seller a proposed allocation (the "Allocation")
of the total consideration (including liabilities assumed) among the Transferred
Assets and the covenant not to compete described in Article X, as well as with a
single amount for all of the Transferred Assets and the covenant not to compete
described in Article X of each of Seller and each of the Seller Affiliates. The
Allocation will be supported by a valuation report from a nationally recognized
appraiser. The parties agree that the Mentadent Payments and the True-Up
Payments shall be treated as being paid exclusively for the tangible and
intangible Transferred Assets relating to the Mentadent Products. The Allocation
Statement shall become final and binding 20 calendar days after Purchaser
provides the Allocation to Seller, unless Seller objects on the grounds that
there is no reasonable basis for the Allocation (in which case, Seller shall
propose an allocation). If the parties cannot agree on the Allocation, the
parties shall jointly appoint an Independent Expert to resolve the matter.
(iii) Seller (and its affiliates) and Purchaser (and its affiliates) agree
to file all Tax Returns consistent with the final versions of the allocations
and forms described in this Section 9.01.
(b) Transfer Taxes. (i) Seller and Purchaser, as applicable, shall
cooperate (and, if relevant, cause its affiliates to cooperate) in timely making
all filings, returns, reports and forms as may be required in connection with
payment of Transfer Taxes. Each party (and its affiliates) shall execute and
deliver all instruments and certificates reasonably necessary to enable the
other party to comply with any filing requirements relating to any such Transfer
Taxes.
(ii) Purchaser, on the one hand, and Seller, on the other hand, shall each
pay one-half of all Transfer Taxes; provided, however, that each party (and, if
applicable, its relevant affiliates) shall use its reasonable efforts to avail
itself of any available relief or exemption from any such Transfer Taxes, and to
cooperate with the other party (and, if applicable, its relevant affiliates) in
providing any information and documentation that may be necessary to obtain such
relief or exemption; provided, further that Purchaser or Seller, as applicable,
shall pay a Transfer Tax to the extent it is entitled to a refund or credit of
the Transfer Tax so paid.
(c) Purchaser, Seller and each of the Seller Affiliates agree to provide
each other with such information and assistance as is reasonably necessary,
including access to records and personnel, for the preparation of any Tax
Returns or for the defense of any Tax claim or assessment, whether in connection
with an audit or otherwise.
(d) Seller shall furnish to Purchaser on or prior to the Closing Date a
certificate of its non-foreign status complying with the provisions of United
States Treasury Regulation Section 1.1445-2(b).
(e) If permissible under Applicable Law, the relevant Canadian Seller
Affiliate shall, upon the written request of Purchaser, consent (which consent
shall not be unreasonably conditioned, delayed or withheld) to, and agree to
join Purchaser (or its designated affiliate) in, making the election under
Section 22 of the Canadian Income Tax Act relating to accounts receivable and
loans and to make all related filings necessary under Canadian Tax laws;
provided, however, the amount allocated to the accounts receivable for the
relevant Canadian Seller Affiliate shall be as determined under Section 9.01(a),
unless such determination has not been finalized by the date necessary for
purposes of such election, in which case the parties shall negotiate in good
faith to determine such allocation.
ARTICLE X
Non-Competition
SECTION 10.01. Seller's Covenant Not To Compete. Except as provided in
Section 10.02, for a period of three years from and after the Closing Date,
Seller shall not, and shall cause its affiliates not to, engage in the business
of manufacturing (or having made), marketing, distributing or selling
non-electric or non-battery-powered toothbrush products or toothpaste products
(the "Competitive Activities") within the Purchaser Countries (it being agreed
and understood by Purchaser and Seller that (x) the notice provisions contained
in the parenthetical in Section 1.02(c) shall apply with equal force and effect
during such three year period and (y) any activity giving rise to any such
notice requirement under the parenthetical in Section 1.02(c) shall not
constitute a breach by Seller or any affiliate of Seller of the provisions of
this Section 10.01 unless Seller or an affiliate of Seller knew of the activity
giving rise to such notice requirement and intended to breach the provisions of
this Section 10.01); provided, however, that the foregoing shall not prevent
Seller or any of its affiliates from doing the following (i) owning as an
investment, directly or indirectly, securities of any corporation or other
entity engaged in the Competitive Activities if Seller does not, directly or
indirectly, beneficially own in the aggregate more than 20% of all classes of
the outstanding equity securities of such entity so long as such investment is
completely passive; (ii) owning as an investment, directly or indirectly, any
instrument of indebtedness (that is not convertible or exchangeable for equity
securities, except as may be permitted by clause (i) above) of any corporation
or other entity engaged in the Competitive Activities so long as such investment
is completely passive; (iii) owning, directly or indirectly, securities or other
ownership interests of any corporation or other entity engaged in the
Competitive Activities within the Purchaser Countries if (x) such Competitive
Activities within the Purchaser Countries account for less than 35% of such
entity's consolidated annual revenues or assets or (y) such corporation or other
entity maintains the first, second, third, fourth or fifth largest market share
in any oral care sector in any Purchaser Country; and (iv) taking any action in
accordance with the provisions of the last sentence of Section 1.02(c).
SECTION 10.02. Permitted Activities of Seller. Notwithstanding anything to
the contrary contained in Section 10.01, Seller and its subsidiaries shall not
be prevented from (i) continuing to engage in, conducting or having an ownership
interest in any business which it currently is engaging in, conducting or in
which it currently has an ownership interest (other than the Businesses), and in
each case any reasonable extension or development thereof (other than extensions
of businesses outside the Purchaser Countries into the Purchaser Countries in
violation of Section 10.01), and (ii) treating the provisions of Section 10.01
as having terminated at the time that none of Purchaser and its subsidiaries
continues to conduct any aspect of the Businesses.
SECTION 10.03. Injunctive Relief. Seller acknowledges that any breach of
Section 10.01 may result in irreparable injury to Purchaser, the exact amount of
which may be difficult to ascertain, and that remedies at law for any such
breach may not be reasonable or adequate compensation to Purchaser for such a
breach. Accordingly, Seller agrees that if Seller or its affiliates breaches the
provisions of Section 10.01, in addition to any other remedy which may be
available at law, Purchaser shall be entitled to seek specific performance and
injunctive relief.
ARTICLE XI
Additional Agreements
SECTION 11.01. Publicity. From the date of this Agreement through the
Closing Date, no public release or announcement concerning the transactions
contemplated hereby shall be issued by any party without the prior consent of
the other parties (which consent shall not be unreasonably withheld or delayed),
except as such release or announcement may be required by law or the rules or
regulations of any United States or foreign securities exchange, in which case
the party required to make the release or announcement shall allow the other
party reasonable time to comment on such release or announcement in advance of
such issuance; provided, however, that each of the parties may make internal
announcements to their respective employees that are consistent with the
parties' prior public disclosures regarding the transactions contemplated
hereby.
SECTION 11.02. No Use of Certain Names. Purchaser shall, and shall cause
the Businesses, promptly, and in any event (a) within 180 days after the
Closing, to revise print advertising, product labeling and all other information
or other materials, including any internet or other electronic communications
vehicles, to delete all references to the Names and (b) within 90 days after the
Closing, to change signage and stationery and otherwise discontinue use of the
Names; provided, however, that for a period of 180 days after the Closing Date
(which period shall be reasonably extended as mutually agreed by Seller and
Purchaser) Purchaser may continue to distribute product literature relating to
the Businesses that uses any Names and distribute products with labeling
(including the applicable UPC codes contained therein) that uses any Names to
the extent that such product literature and labeling exists (including the
applicable UPC codes contained therein) on the Closing Date. In no event shall
Purchaser or the Businesses use any Names after the Closing in any manner or for
any purpose different from the use of such Names by Seller and the Seller
Affiliates during the 90-day period preceding the Closing. With respect to the
Transferred Inventory, Purchaser may continue to sell such Transferred
Inventory, notwithstanding that it bears one or more of the Names, for a
reasonable time after the Closing (not to exceed 180 days; provided, however,
that such period shall be reasonably extended as mutually agreed by Seller and
Purchaser if (x) so requested by the Purchaser in writing and (y) there remains
Transferred Inventory bearing one or more of the Names (it being understood that
Purchaser shall use its commercially reasonable best efforts to sell such
Transferred Inventory bearing one or more of the Names before selling any
related Inventory that does not bear such Name or Names)). Promptly after the
Closing, Purchaser shall, and shall cause the Businesses to, file applications
to amend or terminate any certificate of assumed name or d/b/a filings so as to
eliminate the right of Purchaser and the Businesses to use the Names. "Names"
means "Unilever", "Bestfoods", "Unilever Bestfoods", "Unilever Home & Personal
Care", "Faberge", "▇▇▇▇▇▇ ▇▇▇▇▇▇", "▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇'▇", "Lever Brothers" and
"Lever Ponds" and any variations and derivatives thereof and any other logos or
trademarks of Seller or its affiliates not included in Schedule 1.02(a)(iv) or
(v).
SECTION 11.03. Support Services. Purchaser acknowledges that as of the
Closing Date, neither Seller nor any of its affiliates shall have any obligation
to provide any support or other services to Purchaser relating to the Businesses
other than those services expressly required to be provided pursuant to the
transitional services agreement in the form attached hereto as Exhibit E (the
"Transitional Services Agreement") and the manufacturing agreement in the form
attached hereto as Exhibit F (the "Manufacturing Agreement"), each of which
agreements shall be entered into by Seller and Purchaser as of the Closing Date.
SECTION 11.04. Post-Closing Information. Following the Closing, upon
reasonable written notice, Seller and Purchaser shall afford or cause to be
afforded to each other and their respective affiliates (and Seller and Purchaser
shall afford or cause to be afforded to Seller's accountants) reasonable access
during normal business hours to the personnel, properties, books, Contracts,
commitments and records relating to the Businesses for any reasonable business
purpose including in respect of litigation, insurance matters and financial
reporting of Seller, Purchaser and their respective affiliates, and Seller and
Purchaser shall afford or cause to be afforded to each other the right to make
copies of such books and records, or portions thereof, to the extent that they
relate exclusively to the Businesses; provided, however, that neither party
shall be required to incur any expense pursuant to this Section 11.04.
SECTION 11.05. Records. Purchaser recognizes that certain records may
contain information relating to subsidiaries, divisions or businesses of Seller
and its affiliates other than the Businesses and that Seller and its affiliates
may retain copies thereof. SECTION 11.06. Bulk Transfer Laws. Subject to Article
VIII, Purchaser hereby waives compliance by Seller and the Seller Affiliates
with the provisions of any so-called "bulk transfer laws" of any jurisdiction in
connection with the sale of the Transferred Assets to Purchaser.
SECTION 11.07. Refunds and Remittances. After the Closing, if Seller or any
of its affiliates receive any refund or other amount which is a Transferred
Asset or is otherwise properly due and owing to Purchaser in accordance with the
terms of this Agreement, Seller promptly shall remit, or shall cause to be
remitted, such amount to Purchaser at the address set forth in Section 12.04.
After the Closing, if Purchaser or any of its affiliates receive any refund or
other amount which is an Excluded Asset or is otherwise properly due and owing
to Seller or any of its affiliates in accordance with the terms of this
Agreement, Purchaser promptly shall remit, or shall cause to be remitted, such
amount to Seller at the address set forth in Section 12.04. After the Closing,
if Purchaser or any of its affiliates receive any refund or other amount which
is related to claims (including workers' compensation), litigation, insurance or
other matters for which Seller is responsible hereunder, and which amount is not
a Transferred Asset, or is otherwise properly due and owing to Seller in
accordance with the terms of this Agreement, Purchaser promptly shall remit, or
cause to be remitted, such amount to Seller at the address set forth in Section
12.04. After the Closing, if Seller or any of its affiliates receive any refund
or other amount which is related to claims (including worker's compensation),
litigation, insurance or other matters for which Purchaser is responsible
hereunder, and which amount is not an Excluded Asset, or is otherwise properly
due and owing to Purchaser in accordance with the terms of this Agreement,
Seller promptly shall remit, or cause to be remitted, such amount to Purchaser
at the address set forth in Section 12.04.
SECTION 11.08. Additional Information. Seller shall deliver to Purchaser as
soon as is practicable an unaudited combined statement of direct revenues and
expenses for the nine months ended September 27, 2003, for the Businesses,
derived from Seller's management accounting records and reports and adjusted to
be in a GAAP format excluding footnotes and year end adjustments (the "Nine
Month Statement"). Seller and Purchaser agree that (x) Seller's sole obligation
under this Section 11.08 is to deliver the Nine Month Statement to Purchaser and
(y) Seller does not make any, and upon delivery of the Nine Month Statement
shall make no, representation or warranty as to the Nine Month Statement,
including as to (x) the accuracy, completeness or truthfulness of any of the
information contained in the Nine Month Statement or (y) whether the Nine Month
Statement fairly presents the direct revenues and expenses of the Businesses for
the nine months ended September 27, 2003.
ARTICLE XII
Miscellaneous
SECTION 12.01. Assignment. Neither this Agreement nor any of the rights and
obligations of the parties hereunder may be assigned by any of the parties
hereto without the prior written consent of the other party hereto, except that
(a) Purchaser may assign its right to purchase the Transferred Assets hereunder
to any of its wholly owned subsidiaries (or, if required by the terms of the
relevant financing documents required to consummate the Acquisition and the
other transactions contemplated by this Agreement, may pledge this Agreement as
security to the entity or entities providing such financing) without the prior
written consent of Seller and (b) Seller may assign any rights and obligations
hereunder to any of the Unilever Entities without the prior written consent of
Purchaser. Notwithstanding the foregoing, each of Seller and Purchaser shall
remain liable for all of their respective obligations under this Agreement.
Subject to the first sentence of this Section 12.01, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns and no other person shall have any right, obligation or
benefit hereunder. Any attempted assignment or transfer in violation of this
Section 12.01 shall be void.
SECTION 12.02. No Third-Party Beneficiaries. Except as provided in Article
VIII, this Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
SECTION 12.03. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, except as otherwise expressly provided herein
each of the parties hereto shall be responsible for the payment of its own
respective costs and expenses incurred in connection with the negotiations
leading up to and the performance of its respective obligations pursuant to this
Agreement and the Ancillary Agreements including the fees of any attorneys,
accountants, brokers or advisors employed or retained by or on behalf of such
party. Purchaser shall pay any filing fee required under the ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇).
SECTION 12.04. Notices. All notices, requests, permissions, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given (a) five business days following sending by registered or
certified mail, postage prepaid, (b) when sent, if sent by facsimile; provided
that the facsimile transmission is promptly confirmed by telephone, (c) when
delivered, if delivered personally to the intended recipient, and (d) one
business day following sending by overnight delivery via a national courier
service and, in each case, addressed to a party at the following address for
such party:
(i) if to Seller,
Conopco, Inc.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇ LLP
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Purchaser,
Church & ▇▇▇▇▇▇ Co., Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
and General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address(es) as shall be furnished in writing by any such party
to the other party hereto in accordance with the provisions of this Section
12.04.
SECTION 12.05. Headings; Certain Definitions. (a) The descriptive headings
of the several Articles and Sections of this Agreement and the Disclosure
Schedule to this Agreement and the Table of Contents to this Agreement are
inserted for convenience only, do not constitute a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement. All
references herein to "Articles", "Sections", "Exhibits" or "Schedules" shall be
deemed to be references to Articles or Sections hereof or Exhibits or Schedules
hereto unless otherwise indicated.
(b) For all purposes hereof:
"affiliate" of any party means any person or entity controlling, controlled
by or under common control with such party and, in the case of Seller, shall
include Unilever N.V., Unilever PLC or any entity a majority of the voting
shares of which is owned directly or indirectly by Unilever N.V. or Unilever PLC
or both of them together (including the Seller Affiliates).
"business day" shall refer to a day, other than a Saturday or a Sunday, on
which commercial banks are not required or authorized to close in New York City.
"Business" means (i) in the case of the Mentadent Brand, the business of
manufacturing (or having made), marketing, distributing and selling the Products
constituting such Brand in the United States, Canada and Puerto Rico as such
business is currently conducted by Seller and the Seller Affiliates, (ii) in the
case of the Close-Up Brand, the business of manufacturing (or having made),
marketing, distributing and selling the Products constituting such Brand in the
United States, Canada and Puerto Rico as such business is currently conducted by
Seller and the Seller Affiliates, (iii) in the case of the Aim Brand, the
business of manufacturing (or having made), marketing, distributing and selling
the Products constituting such Brand in the United States, Canada and Puerto
Rico as such business is currently conducted by Seller and the Seller Affiliates
and (iv) in the case of the Pepsodent Brand, the business of manufacturing (or
having made), marketing, distributing and selling the Products constituting such
Brand in the United States, Canada and Puerto Rico as such business is currently
conducted by Seller and the Seller Affiliates.
"Businesses" shall refer, collectively, to the Business of each Brand.
"Businesses Material Adverse Effect" means a material adverse effect (i) on
the financial condition or results of operations of the Businesses, taken as a
whole, or (ii) on the ability of Seller to consummate the Acquisition. For
purposes of this Agreement, "Businesses Material Adverse Effect" shall exclude
any effects to the extent resulting from (A) changes in the United States or
foreign economies in general, (B) changes in industries relating to the
Businesses in general and not specifically relating to the Businesses, (C) the
announcement by Seller of its intention to sell the Businesses or (D) the
execution of this Agreement (including the identity of Purchaser) or any of the
Ancillary Agreements and the consummation of the transactions contemplated
hereby or thereby.
"$" means United States dollars.
"including" means including, without limitation.
"knowledge of Seller" means the actual knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Mart Laius, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇.
"person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, Governmental Entity or other entity.
"Products" means, with respect to each Brand, products currently held for
sale by Seller or a Seller Affiliate, including those products represented by
the SKUs for such Brand set forth in Schedule 12.05(b).
"subsidiary" of any person means another person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person
or by another subsidiary of such first person.
SECTION 12.06. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered, in person or by facsimile, receipt
acknowledged, to the other party hereto.
SECTION 12.07. Integrated Contract; Exhibits and Schedules. This Agreement,
including the Schedules (and the Introduction thereto) and Exhibits hereto, any
written amendments to the foregoing satisfying the requirements of Section 12.13
hereof, the Confidentiality Agreement and the Ancillary Agreements, including
the schedules, exhibits and annexes thereto, constitute the entire agreement
among the parties with respect to the subject matter hereof and thereof and
supersede any previous agreements and understandings between the parties with
respect to such matters. All Exhibits and Schedules annexed hereto or referred
to herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. Any capitalized terms used in any Schedule or Exhibit but
not otherwise defined therein shall be defined as set forth in this Agreement.
There are no restrictions, promises, representations, warranties, agreements or
undertakings of any party hereto with respect to the transactions contemplated
by this Agreement, the Confidentiality Agreement or the Ancillary Agreements
other than those set forth herein or therein or in any other document required
to be executed and delivered hereunder or thereunder. In the event of any
conflict between the provisions of this Agreement (including the Schedules (and
the Introduction thereto) and Exhibits hereto), on the one hand, and the
provisions of the Confidentiality Agreement or the Ancillary Agreements
(including the schedules and exhibits thereto), on the other hand, the
provisions of this Agreement shall control.
SECTION 12.08. Severability; Enforcement. The invalidity of any portion
hereof (including the provisions of Article X) shall not affect the validity,
force or effect of the remaining portions hereof. If it is ever held that any
restriction hereunder is too broad to permit enforcement of such restriction to
its fullest extent, each party agrees that a court of competent jurisdiction may
enforce such restriction to the maximum extent permitted by law, and each party
hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
SECTION 12.09. Governing Law. This Agreement and any disputes arising under
or related thereto (whether for breach of contract, tortious conduct or
otherwise) shall be governed and construed in accordance with the laws of the
State of New York, without reference to its conflicts of law principles (other
than Section 5-1401 of the General Obligations Law of the State of New York).
SECTION 12.10. Jurisdiction. Each party irrevocably agrees that any legal
action, suit or proceeding against them arising out of or in connection with
this Agreement or the transactions contemplated hereby or disputes relating
hereto (whether for breach of contract, tortious conduct or otherwise) shall be
brought exclusively in the United States District Court for the Southern
District of New York, or, if such court does not have subject matter
jurisdiction, the state courts of New York located in New York County and hereby
irrevocably accepts and submits to the exclusive jurisdiction and venue of the
aforesaid courts in personam, with respect to any such action, suit or
proceeding.
SECTION 12.11. Service of Process. Each party agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth above shall be effective service of process for any
action, suit or proceeding in New York with respect to any matters for which it
has submitted to jurisdiction pursuant to Section 12.10.
SECTION 12.12. Waiver of Jury Trial. Each party hereby waives to the
fullest extent permitted by Applicable Law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement or the transactions contemplated hereby or
disputes relating hereto. Each party (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 12.12.
SECTION 12.13. Amendments. This Agreement may be amended, modified,
superseded or canceled and any of the terms, covenants, representations,
warranties or conditions hereof may be waived only by an instrument in writing
signed by each of the parties hereto or, in the case of a waiver, by or on
behalf of the party waiving compliance.
IN WITNESS WHEREOF, Seller and Purchaser have duly executed
this Agreement as of the date first written above.
CONOPCO, INC.,
by /s/Mart Laius
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Name: Mart Lauis
Title: Vice President
CHURCH & ▇▇▇▇▇▇ CO., INC.,
by /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Title: Chairman & CEO
Disclosure Schedules
The following is a list of disclosure schedules to the Asset Purchase Agreement,
dated as of September 9, 2003, between Conopco, Inc. and Church & ▇▇▇▇▇▇ Co.,
Inc. In accordance with Item 601(b)(2) of Regulation S-K, such schedules are not
filed herewith. Church & ▇▇▇▇▇▇ Co., Inc. agrees to furnish a copy of any
omitted schedule, on a supplemental basis, to the Commission upon request.
Schedule 1.02(a)(ii) - Transferred Equipment
Schedule 1.02(a)(iii) - Transferred Patents
Schedule 1.02(a)(iv) - Transferred Trademarks
Schedule 1.02(a)(v) - Transferred Domain Names
Schedule 1.04(a)(v) - Trade and Consumer Promotions, Advertising and
Market Research Commitments
Schedule 1.04(b)(vi)(B) - Pending Claims
Schedule 2.03 - Accounting Principles, Practices, Methodologies
and Policies
Schedule 3.03 - Conflicts and Consents
Schedule 3.04(a) - Financial Statements
Schedule 3.04(b) - Six Month Statement
Schedule 3.05 - Title
Schedule 3.06 - Intellectual Property
Schedule 3.07 - Business Contracts
Schedule 3.08 - Permits
Schedule 3.10 - Proceedings
Schedule 3.11 - Changes in the Business
Schedule 3.14 - Customers and Suppliers
Schedule 5.01 - Conduct of Business
Schedule 12.05(b) - Products